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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of January 22, 1999
by and among
CANNONDALE CORPORATION,
CERTAIN SUBSIDIARIES OF CANNONDALE CORPORATION,
the Banks signatory hereto
and
NATIONSBANK, N.A.,
as Administrative Agent, Documentation Agent, Fronting Bank and Swingline Bank
and
FLEET NATIONAL BANK,
as Syndication Agent
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Table of Contents
1.
DEFINITIONS; ACCOUNTING TERMS...............................................................................3
Definitions........................................................................................3
Accounting Terms..................................................................................21
Rules of Interpretation...........................................................................22
Exchange Rates....................................................................................22
THE CREDIT.................................................................................................22
The Loans.........................................................................................22
The Term Loan.....................................................................................23
The Revolving Loans...............................................................................23
The Swingline Loans...............................................................................24
The Notes.........................................................................................26
Purpose...........................................................................................26
Borrowing Procedures..............................................................................26
Prepayments and Conversions.......................................................................27
Interest Periods; Renewals........................................................................28
Changes of Commitments............................................................................29
Certain Notices...................................................................................29
Minimum Amounts...................................................................................30
Interest..........................................................................................30
Fees..............................................................................................31
Payments Generally................................................................................32
Interest Rate Protection..........................................................................33
European Monetary Unit............................................................................33
LETTERS OF CREDIT..........................................................................................34
Letters of Credit.................................................................................34
Cash Collateral Account...........................................................................38
YIELD PROTECTION; ILLEGALITY; ETC..........................................................................38
Additional Costs..................................................................................38
Limitation on Types of Loans......................................................................40
Illegality........................................................................................40
Certain Conversions Pursuant to Sections 4.1 and 4.3..............................................41
Certain Compensation..............................................................................42
Taxes.............................................................................................42
CONDITIONS PRECEDENT.......................................................................................44
Documentary Conditions Precedent..................................................................44
Additional Conditions Precedent...................................................................46
Deemed Representations............................................................................47
REPRESENTATIONS AND WARRANTIES.............................................................................47
Incorporation, Good Standing and Due Qualification................................................47
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Corporate Power and Authority; No Conflicts.......................................................47
Legally Enforceable Agreements....................................................................48
Litigation........................................................................................48
Financial Statements..............................................................................48
Ownership and Liens...............................................................................49
Taxes ............................................................................................49
ERISA ............................................................................................49
Subsidiaries and Ownership of Stock...............................................................49
Credit Arrangements...............................................................................50
Operation of Business.............................................................................50
Hazardous Materials...............................................................................50
No Default on Outstanding Judgments or Orders.....................................................52
No Defaults on Other Agreements...................................................................52
Labor Disputes and Acts of God....................................................................53
Governmental Regulation...........................................................................53
Full Disclosure...................................................................................53
Insurance.........................................................................................53
Intellectual Property.............................................................................54
Collateral Documents..............................................................................54
Year 2000 Compliance..............................................................................55
AFFIRMATIVE COVENANTS......................................................................................56
Maintenance of Existence..........................................................................56
Conduct of Business...............................................................................56
Maintenance of Properties.........................................................................56
Maintenance of Records............................................................................56
Maintenance of Insurance..........................................................................56
Compliance with Laws..............................................................................56
Right of Inspection...............................................................................56
Reporting Requirements............................................................................57
Payment of Taxes and Other Potential Charges and Priority Claims..................................61
End of Fiscal Year; End of Fiscal Quarter.........................................................61
Additional Security; Domestic Subsidiaries........................................................61
Year 2000 Compliance..............................................................................62
NEGATIVE COVENANTS.........................................................................................62
Debt .............................................................................................62
Guaranties, Etc...................................................................................65
Liens ............................................................................................65
Leases ...........................................................................................67
Investments.......................................................................................67
Dividends ........................................................................................68
Sale of Assets....................................................................................69
Stock of Subsidiaries, Etc........................................................................69
Transactions with Affiliates......................................................................69
Mergers, Etc......................................................................................69
Limitation on Payment of Senior Notes.............................................................70
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FINANCIAL COVENANTS........................................................................................70
Minimum Interest Coverage Ratio...................................................................70
Minimum Tangible Net Worth........................................................................70
Leverage Ratio....................................................................................70
Debt Service Coverage Ratio.......................................................................70
EVENTS OF DEFAULT..........................................................................................71
Events of Default.................................................................................71
Remedies .........................................................................................73
GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS.................................................................74
Guarantied Obligations............................................................................74
Performance under this Agreement..................................................................74
Waivers ..........................................................................................75
Releases .........................................................................................76
Marshaling........................................................................................77
Liability ........................................................................................77
Unconditional Obligation..........................................................................77
Election to Perform Obligations...................................................................77
No Election.......................................................................................77
Severability......................................................................................78
Other Enforcement Rights..........................................................................78
Delay or Omission; No Waiver......................................................................78
Restoration of Rights and Remedies................................................................78
Cumulative Remedies...............................................................................79
Survival .........................................................................................79
No Setoff, Counterclaim or Withholding; Gross-Up..................................................79
Payment in Applicable Currency....................................................................79
THE ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS AND BORROWERS..............................................79
Appointment, Powers and Immunities of Administrative Agent........................................79
Reliance by Administrative Agent..................................................................80
Defaults .........................................................................................81
Rights of Administrative Agent as a Bank..........................................................81
Indemnification of Administrative Agent...........................................................81
Documents ........................................................................................82
Non-Reliance on Administrative Agent and Other Banks..............................................82
Failure of Administrative Agent to Act............................................................82
Resignation or Removal of Administrative Agent....................................................83
Amendments Concerning Agency Function.............................................................83
Liability of Administrative Agent.................................................................83
Transfer of Agency Function.......................................................................83
Non-Receipt of Funds by the Administrative Agent..................................................84
Withholding Taxes.................................................................................84
Several Obligations and Rights of Banks...........................................................84
Pro Rata Treatment of Loans, Etc..................................................................85
Sharing of Payments Among Banks...................................................................85
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The Syndication Agent.............................................................................86
MISCELLANEOUS..............................................................................................86
Amendments and Waivers............................................................................87
Usury ............................................................................................87
Expenses .........................................................................................87
Survival .........................................................................................87
Assignment; Participations........................................................................87
Notices ..........................................................................................88
Setoff ...........................................................................................88
Indemnification; Exoneration......................................................................89
JURISDICTION; IMMUNITIES..........................................................................89
Table of Contents; Headings.......................................................................90
Severability......................................................................................90
Counterparts......................................................................................90
Integration.......................................................................................90
GOVERNING LAW.....................................................................................90
Confidentiality...................................................................................91
Treatment of Certain Information..................................................................91
Judgment Currency.................................................................................91
Independence of Covenants.........................................................................92
Time of the Essence...............................................................................92
Reference to and Effect on the Facility Documents.................................................92
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EXHIBITS
Exhibit A-1 Form of Revolving Promissory Note
Exhibit A-2 Form of Swingline Promissory Note
Exhibit A-3 Form of Term Promissory Note
Exhibit B Form of Authorization Letter
Exhibit C-1 Form of Bethel First Mortgage
Exhibit C-2 Form of Bethel Third Mortgage
Exhibit D [Intentionally Omitted]
Exhibit E Form of Collateral Assignment of Shareholder Note
Exhibit F Environmental Indemnification Agreement
Exhibit G Pledge Agreement
Exhibit H Form of Security Agreement
Exhibit I Form of Security Agreement Questionnaire
Exhibit J Form of Subsidiary Pledge Agreement
Exhibit K Form of Opinion of Counsel for Borrowers
Exhibit L Form of Closing Agreement
Exhibit M Form of Notice of Borrowing
Exhibit N Form of Financial Covenants Compliance Report
Exhibit O Form of Confidentiality Agreement
SCHEDULES
Schedule 6.9 Subsidiaries of Borrower
Schedule 6.10 Credit Arrangements
Schedule 6.11 Operation of Business
Schedule 6.12 Hazardous Materials
Schedule 6.18 Insurance
Schedule 8.3(a) Liens
Schedule 8.3(j) Senior Mortgage Liens
Schedule 8.5 Intercompany Loans
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of January 22,
1999, among Cannondale Corporation, a corporation organized under the laws of
the State of Delaware ("Cannondale"), each of the Subsidiaries of Cannondale
which is a signatory hereto (individually, a "Subsidiary Borrower", collectively
the "Subsidiary Borrowers" and, together with Cannondale, the "Borrowers"), each
of the banks which is a signatory hereto (individually a "Bank" and collectively
the "Banks"), NationsBank, N.A., a national banking association organized under
the laws of the United States of America ("NationsBank"), as administrative
agent for the Banks (in such capacity, together with its successors in such
capacity, the "Administrative Agent"), as documentation agent for the Banks (in
such capacity, together with its successors in such capacity, the "Documentation
Agent"), as Fronting Bank (in such capacity, together with its successors in
such capacity, the "Fronting Bank") and as Swingline Bank (in such capacity,
together with its successors in such capacity, the "Swingline Bank") and Fleet
National Bank, a national banking association organized under the laws of the
United States of America ("Fleet"), as syndication agent for the Banks (in such
capacity, together with its successors in such capacity, the "Syndication
Agent").
PRELIMINARY STATEMENTS.
A. Reference is made to that certain Credit Agreement dated as
of June 9, 1997 (the "Original Credit Agreement"), among the Borrowers, the
banks signatory thereto, the Administrative Agent, the Fronting Bank, the
Swingline Bank and ABN AMRO Bank N.V., a Netherlands banking corporation acting
through its duly licensed New York Branch ("ABN AMRO Bank"), as documentation
agent and syndication agent for the banks signatory thereto.
B. The Original Credit Agreement was amended by that certain
First Amendment to Credit Agreement dated as of October 14, 1997 (the "First
Amendment"), among the Borrowers, the Existing Banks signatory thereto
(including ABN AMRO Bank), the Administrative Agent, the Fronting Bank, the
Swingline Bank, ABN AMRO Bank as documentation agent and syndication agent for
the Existing Banks signatory thereto, The Chase Manhattan Bank, a bank organized
under the laws of New York ("Chase"), and State Street Bank and Trust Company, a
trust company organized under the laws of Massachusetts ("State Street").
Pursuant to the First Amendment, among other things, (i) Chase and State Street
were added as "Banks", (ii) ABN AMRO Bank was removed as a "Bank" and as
Documentation Agent and Syndication Agent, (iii) NationsBank was added as
Documentation Agent, (iv) Fleet was added as Syndication Agent, and (v) the
Commitments were increased by $20,000,000 in the aggregate.
C. The Original Credit Agreement was further amended by that
certain Second Amendment to Credit Agreement dated as of April 15, 1998 (the
"Second Amendment"), that certain Third Amendment to Credit Agreement dated as
of May 29, 1998 (the "Third Amendment"), and that certain Fourth Amendment to
Credit Agreement dated as of June 25, 1998 (the "Fourth Amendment"), in each
case among the Borrowers,
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XxxxxxxXxxx, Xxxxx, Xxxxx Xxxxxx, Xxxxx and the Administrative Agent. The
Original Credit Agreement, as amended by the First Amendment, the Second
Amendment, the Third Amendment and the Fourth Amendment, may be hereinafter
referred to as the "Existing Credit Agreement."
D. Pursuant to the Existing Credit Agreement, (i) the
Swingline Bank committed to make Swingline Loans to Cannondale, at any time and
from time to time prior to the Termination Date, in an aggregate principal
amount at any time outstanding not in excess of $10,000,000, (ii) the Banks
committed to make Revolving Loans to the Borrowers, at any time and from time to
time prior to the Termination Date, in an aggregate principal amount at any time
outstanding not in excess of $70,000,000 minus the sum of (a) the aggregate
principal amount of the Swingline Loans outstanding at such time, plus (b) the
Letters of Credit Usage at such time, and (iii) the Fronting Bank committed to
issue Letters of Credit in an aggregate face amount at any time outstanding not
in excess of $10,000,000.
E. The Borrowers have requested that the Existing Credit
Agreement be amended to provide for (i) Term Loans to the Borrowers in an
aggregate principal amount of $20,000,000, and (ii) Revolving Loans to the
Borrowers, at any time and from time to time prior to the Termination Date, in
an aggregate principal amount at any time outstanding not in excess of
$65,000,000 minus the sum of (a) the aggregate principal amount of the Swingline
Loans outstanding at such time, plus (b) the Letters of Credit Usage at such
time.
F. It is a condition precedent to the Banks and the
Administrative Agent agreeing to the foregoing amendment to the Existing Credit
Agreement that (i) the Existing Credit Agreement be amended and restated in its
entirety to read as set forth herein, and (ii) the Borrowers grant to the
Administrative Agent for the benefit of the Banks a first priority (subject to
certain exceptions) security interest in all of the Borrowers' domestic (i.e.,
United States) assets, whether now owned or hereafter acquired, wherever
located, of any kind, nature or description, tangible or intangible, including,
without limitation, the Borrowers' accounts receivable, inventory, property,
plant, equipment and general intangibles.
G. The Borrowers have requested that the Banks make loans to
and issue letters of credit on behalf of one or more of the Borrowers. The
Borrowers acknowledge that, pursuant to the Existing Credit Agreement, the
Borrowers are presently indebted to the Banks on the Closing Date without
offset, defense or counterclaim of any kind, nature or description. The
repayment of the loans and the repayment of the reimbursement obligations of the
Subsidiary Borrowers are and will be guaranteed by Cannondale. Each Borrower
acknowledges that it has received direct economic and financial benefits from
the Debt incurred under the Existing Credit Agreement and will receive direct
economic and financial benefits from the Debt incurred under this Agreement, and
the incurrence of such Debt is in the best interests of such Borrower.
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Cannondale acknowledges that the Banks would not provide the financing hereunder
but for Cannondale's guaranty of the Subsidiary Borrowers' obligations
hereunder.
Accordingly, the Borrowers, the Banks, the Administrative
Agent, the Documentation Agent, the Syndication Agent, the Swingline Bank and
the Fronting Bank agree as follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.1. Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the singular to
have a correlative meaning when used in the plural and vice versa):
"Acceptable Acquisition" means any Acquisition (a) that has
been either (i) approved by the Board of Directors of the corporation that is
the subject of such Acquisition or (ii) recommended by such Board to the
shareholders of such corporation, (b) that does not result in any Borrower, or
any Subsidiary of any Borrower, engaging in any line or type of business other
than the businesses in which the Borrowers and their Subsidiaries are presently
engaged as of the Closing Date and other sporting or recreational lines or types
of businesses; (c) the aggregate purchase price of which Acquisition, together
with the aggregate purchase price of all Acceptable Acquisitions consummated on
or after June 9, 1997, does not exceed $5,000,000, and (d) for which the
certificate specified in Section 7.8(l) was timely delivered.
"Acquisition" means any transaction pursuant to which any
Borrower or any of its Subsidiaries (a) acquires equity securities (or warrants,
options or other rights to acquire such securities) of any corporation (other
than such Borrower or any corporation that is then a Subsidiary of such
Borrower), pursuant to a solicitation of tenders therefor, or in one or more
negotiated block, market or other transactions not involving a tender offer, or
a combination of any of the foregoing, or (b) makes any corporation a Subsidiary
of such Borrower, or causes any such corporation to be merged into such Borrower
or any of its Subsidiaries, in any case pursuant to a merger, purchase of assets
or any reorganization providing for the delivery or issuance to the holders of
such corporation's then outstanding securities, in exchange for such securities,
of cash or securities of such Borrower or any of its Subsidiaries, or a
combination thereof, or (c) purchases all or substantially all of the business
or assets of any corporation.
"Affiliate" means any Person: (a) that directly or indirectly
controls, or is controlled by, or is under common control with, a Borrower or
any of its Subsidiaries; (b) that directly or indirectly beneficially owns or
holds 5% or more of any class of voting stock of a Borrower or any such
Subsidiary; (c) 5% or more of the voting stock of which is directly or
indirectly beneficially owned or held by a Borrower or such Subsidiary; or (d)
that is a partnership in which a Borrower or any of its Subsidiaries is a
general partner. The term "control" means the possession, directly or
indirectly, of the power to direct or
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cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract, or otherwise.
"Agents" means the Administrative Agent, the Documentation
Agent and the Syndication Agent.
"Agreement" means this Amended and Restated Credit Agreement,
as amended or supplemented from time to time.
"Alternative Currency" means Guilders, Yen, the Euro or such
other currency other than Dollars that the Banks may in their sole discretion
make available to one or more Borrowers from time to time.
"Alternative Currency Equivalent" means, with respect to an
amount of Dollars on any date in relation to any specified Alternative Currency,
the amount of such specified Alternative Currency that may be purchased with
such amount of Dollars at the Spot Exchange Rate with respect to Dollars on such
date.
"Alternative Currency Loan" means any Loan denominated in an
Alternative Currency.
"Authorization Letter" means the letter agreement executed by
the Borrowers substantially in the form of Exhibit B.
"Banking Day" means any day on which commercial banks are not
authorized or required to close in New York, New York, and whenever such day
relates to a Eurocurrency Loan or notice with respect to any Eurocurrency Loan,
a day on which dealings in Dollar or the applicable Alternative Currency
deposits are also carried out in the London interbank market.
"Bethel First Mortgage" means the Open-End Mortgage Deed and
Security Agreement that mortgages the Bethel Mortgaged Property in the amount of
$2,000,000 substantially in the form of Exhibit C-1 to be delivered by
Cannondale in favor of the Administrative Agent, as mortgagee, as the same may
be amended, modified, supplemented or restated from time to time.
"Bethel Third Mortgage" means the Open-End Mortgage Deed and
Security Agreement that mortgages the Bethel Mortgaged Property in the amount of
$83,000,000 substantially in the form of Exhibit C-2 to be delivered by
Cannondale in favor of the Administrative Agent, as mortgagee, as the same may
be amended, modified, supplemented or restated from time to time.
"Bethel Mortgaged Property" means the real property and
improvements known as 00 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxx 00000, as more
particularly described in the Bethel Mortgages.
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"Bethel Mortgages" means the Bethel First Mortgage and the
Bethel Third Mortgage.
"Borrowing" means a Loan or group of Loans of a single type as
to which a single Interest Period is in effect.
"Capital Expenditures" means, for any period, the Dollar
amount of gross expenditures (including Capitalized Lease Obligations) made for
the acquisition of any fixed assets, real property, plant and equipment, and all
renewals, improvements and replacements thereto (but not repairs thereof)
incurred during such period in each case which are required to be capitalized
for financial reporting purposes in accordance with GAAP.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Capitalized Lease Obligations" of any Person shall mean as of
the date of any determination thereof the amount at which the aggregate present
value of future Rentals due and to become due under all Capital Leases under
which such Person is a lessee would be reflected as a liability on a
consolidated or combined balance sheet of such Person in accordance with GAAP.
"Cash and Cash Equivalents" means, with respect to any Person,
the aggregate amount of the following, to the extent owned by such Person or any
of its Subsidiaries free and clear of all Liens, encumbrances and rights of
others: (i) cash on hand; (ii) Dollar demand deposits maintained in the United
States with any commercial bank and Dollar time deposits maintained in the
United States with, or certificates of deposit having a maturity of one year or
less issued by, any commercial bank which has its head office in the United
States and which has a combined capital and surplus of at least $100,000,000;
(iii) direct obligations of, or unconditionally guaranteed by, the United States
and having a maturity of one year or less; and (iv) readily marketable
commercial paper having a maturity of one year or less, issued by any
corporation organized and existing under the laws of the United States or any
state thereof or the District of Columbia and rated by Standard & Poor's
Corporation or Xxxxx'x Investors Service, Inc. (or, if neither such organization
shall rate such commercial paper at any time, rated by any nationally recognized
rating organization in the United States) with the highest rating assigned by
such organization.
"Closing Date" means the date this Agreement has been executed
by the Borrowers, the Banks, the Administrative Agent, the Documentation Agent,
the Syndication Agent, the Swingline Bank and the Fronting Bank.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
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"Collateral" means the property subject to a security interest
in favor of the Administrative Agent on behalf of the Banks pursuant to the
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of the Administrative
Agent for the benefit of the Banks to secure the Obligations.
"Collateral Assignment of Shareholder Mortgage" means the
Collateral Assignment of Deed of Trust and Financing Statements from Cannondale
to the Administrative Agent, in recordable form substantially in the form of
Exhibit B to the Collateral Assignment of Shareholder Note, that collaterally
assigns the Shareholder Mortgage to the Administrative Agent for the benefit of
the Banks, as the same may be amended, modified, supplemented or restated from
time to time.
"Collateral Assignment of Shareholder Note" means the
Collateral Assignment of Shareholder Note from Cannondale to the Administrative
Agent, substantially in the form of Exhibit E, that collaterally assigns the
Shareholder Note, together with all agreements related thereto and all security
therefor (including without limitation the Shareholder Pledge Agreement and the
Shareholder Mortgage), to the Administrative Agent for the benefit of the Banks,
as the same may be amended, modified, supplemented or restated from time to
time.
"Collateral Documents" means (i) the Security Agreement, (ii)
the Trademark Agreement, (iii) the Mortgages, (iv) the Pledge Agreement, the
original stock certificates with respect to the capital stock pledged thereunder
and blank executed stock powers in connection therewith, (v) the Subsidiary
Pledge Agreement, the original stock certificates with respect to the capital
stock pledged thereunder and blank executed stock powers in connection
therewith, (vi) the Collateral Assignment of Shareholder Note and the
Shareholder Note, the Shareholder Mortgage, the Shareholder Pledge Agreement and
the other agreements and instruments collaterally assigned thereby, (vii) the
Collateral Assignment of Shareholder Mortgage and the Shareholder Mortgage and
other agreements and instruments collaterally assigned thereby, (viii) the
Pennsylvania Collateral Assignments, if any, and the other agreements and
instruments collaterally assigned thereby, (ix) such mortgages, security
agreements, pledge agreements, guarantees and other documents, instruments or
agreements executed pursuant to Section 7.11 herein, and (x) any and all other
financing statements, fixture filings and other documents, agreements or
instruments executed in connection with any of the foregoing, as the same may be
amended, modified, supplemented or restated from time to time.
"Commitment" means, collectively, the Term Loan Commitment and
the Revolving Credit Commitment.
"Commitment Percentage" means, as to any Bank, the percentage
equivalent of a fraction, the numerator of which is the Commitment of such Bank
and the denominator of which is the aggregate Commitments of all Banks.
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"Consolidated Average Funded Debt to EBITDA Ratio" means, with
respect to any Person, the ratio of (a) the average of the Consolidated Funded
Debt of such Person outstanding on the last day of each of the last four Fiscal
Quarters to (b) the EBITDA of such Person and its Consolidated Subsidiaries,
determined on a consolidated basis in accordance with GAAP, measured on a
trailing four quarters basis.
"Consolidated Funded Debt" means Funded Debt of a Person and
its Consolidated Subsidiaries, as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Coverage Ratio" means the Interest
Coverage Ratio of a Person and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Net Income" means Net Income of a Person and its
Consolidated Subsidiaries, as determined on a consolidated basis in accordance
with GAAP.
"Consolidated Subsidiary" means any Subsidiary of a Person
whose accounts are or are required to be consolidated with the accounts of such
Person in accordance with GAAP.
"Consolidated Tangible Net Worth" means Tangible Net Worth of
a Person and its Consolidated Subsidiaries, as determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Assets" means, at any time, all items
which would be classified as assets on a consolidated balance sheet of a Person
and its Consolidated Subsidiaries, as determined on a consolidated basis in
accordance with GAAP.
"Debt" means, with respect to any Person: (a) indebtedness of
such Person for borrowed money and, without duplication, all obligations
evidenced by bonds, debentures, notes or similar instruments; (b) indebtedness
for the deferred purchase price of property or services; (c) Unfunded Benefit
Liabilities of such Person (determined, if such Person is not the Borrower, in a
manner analogous to that of determining Unfunded Benefit Liabilities of the
Borrower); (d) the face amount of any outstanding letters of credit issued for
the account of such Person; (e) obligations arising under acceptance facilities;
(f) guaranties, endorsements (other than for collection in the ordinary course
of business) and other contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person, or otherwise to assure a
creditor against loss; (g) obligations secured by any Lien on property of such
Person; (h) net liabilities of such Person under interest rate cap agreements,
interest rate swap agreements, foreign currency exchange agreements and other
hedging agreements or arrangements (calculated on a basis satisfactory to the
Administrative Agent and in accordance with accepted practice); and (i)
obligations of such Person as lessee under Capital Leases.
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"Default" means any event which with the giving of notice or
lapse of time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, any other amount payable by the
Borrower under this Agreement, any Note or any other Facility Document that is
not paid when due (whether at stated maturity, by acceleration or otherwise), a
rate per annum during the period from and including the due date, to, but
excluding the date on which such amount is paid in full equal to 2% above the
Variable Rate as in effect from time to time plus the Margin (if any) (provided
that, if the amount so in default is principal of a Eurocurrency Loan and the
due date thereof is a day other than the last day of the Interest Period
therefor, the "Default Rate" for such principal shall be, for the period from
and including the due date and to but excluding the last day of the Interest
Period therefor, 2% above the interest rate for such Loan as provided in Section
2.13 hereof and, thereafter, the rate provided for above in this definition).
"Denomination Date" means each of the following: (a) in
relation to any Borrowing in an Alternative Currency, the date that is three
Banking Days prior to the date such Borrowing is made and in the case of a
renewal of, or conversion to, such a Loan, the date that is three Banking Days
prior to the date of such renewal or conversion, (b) in relation to any Letter
of Credit payable in an Alternative Currency, the date such Letter of Credit is
issued, (c) as to any such Borrowing or Letter of Credit, the date that is the
last day of each Fiscal Quarter of Cannondale, and (d) such additional dates as
the Administrative Agent or the Required Banks shall specify, which additional
dates shall only be specified at such times as the Administrative Agent or the
Required Banks reasonably expect that currency fluctuations would require a
mandatory prepayment under Section 2.8(b).
"Dollar Equivalent" means, with respect to an amount of any
Alternative Currency on any date, the amount of Dollars that may be purchased
with such amount of such Alternative Currency at the Spot Exchange Rate with
respect to such Alternative Currency on such date.
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"EBITDA" means, for any Person, for any period, earnings
before Interest Expense, taxes, depreciation, amortization and extraordinary
items for such Person determined in accordance with GAAP.
"Eligible Assignee" means (i) a Bank; (ii) an affiliate of a
Bank; and (iii) any other Person approved by the Administrative Agent and,
unless an Event of Default has occurred and is continuing at the time any
assignment is effected in accordance with Section 13.5, Cannondale, such
approval not to be unreasonably withheld or delayed by Cannondale or the
Administrative Agent, and such approval to be deemed given by
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Cannondale if no objection is received by the assigning Bank and the
Administrative Agent from Cannondale within two Banking Days after notice of
such proposed assignment has been provided by the assigning Bank to Cannondale;
provided, however, that neither the Borrowers nor any affiliate of the Borrowers
shall qualify as an Eligible Assignee.
"Environmental Indemnification" means the environmental
indemnification agreement dated June 9, 1997, entered into by the Borrowers in
favor of the Administrative Agent for the benefit of the Banks, a copy of which
is attached as Exhibit F hereto, as the same may be amended, modified,
supplemented or restated from time to time.
"Environmental Laws" means any and all domestic, foreign,
federal, state and local statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, licenses, agreements with Governmental
Authorities or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or industrial, toxic or hazardous substances or
wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, including any rules and regulations
promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or business
which is a member of any group of organizations (i) described in Section 414(b)
or (c) of the Code of which the Borrower is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of
which a Borrower is a member.
"Eurocurrency Loan" means any Loan when and to the extent the
interest rate therefor is determined on the basis of the definition "Fixed Base
Rate."
"Event of Default" shall have the meaning assigned to such
term in Section 10.1 hereof.
"Facility Documents" means this Agreement, the Notes, the
Authorization Letter, the Environmental Indemnification, the Pledge Agreement,
the Subsidiary Pledge Agreement, the Security Agreement and the other Collateral
Documents and documents relating to Letters of Credit and each of the documents,
certificates or other instruments referred to in Article 5 hereof as well as any
other documents, instruments or certificates to be delivered by any Borrower in
connection with this Agreement or in connection with the documents, certificates
or instruments referred to in Article 5, including documents delivered in
connection with any Borrowing.
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"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York for such day (or for
any day that is not a Banking Day, for the immediately preceding Banking Day).
"Fiscal Quarter" means, for any Person, any fiscal quarter,
determined in a manner consistent with past practices of such Person.
"Fiscal Year" means, for any Person, any fiscal year,
determined in a manner consistent with past practices of such Person.
"Fiscal Year Net Worth Increase Amounts" means, with respect
to each Fiscal Year, the greater of (a) Zero Dollars ($0) or (b) the sum of (i)
50% of Consolidated Net Income for such Fiscal Year of a Person, plus (ii)
seventy-five percent (75%) of the net proceeds to such Person realized during
such Fiscal Year from the issuance or sale by such Person of any shares of its
common stock.
"Fixed Base Rate" means, for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100th of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars or deposits
in an Alternative Currency, as applicable, at approximately 11:00 a.m. (London
time) on, if such day is a Banking Day, the day on which banks in the London
interbank market customarily quote such rates for deposits to be delivered on,
and, if such day is not a Banking Day, two (2) Banking Days prior to, the first
day of such Interest Period for a term comparable to such Interest Period. If
for any reason such rate is not available, the term "Fixed Base Rate" shall
mean, for any Eurocurrency Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars or deposits in an Alternative Currency, as applicable, at approximately
11:00 a.m. (London time) on, if such day is a Banking Day, the day on which
banks in the London interbank market customarily quote such rates for deposits
to be delivered on, and if such day is not a Banking Day, two (2) Banking Days
prior to, the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Fixed Rate" means, for any Eurocurrency Loan for any Interest
Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined by the Administrative Agent to be equal to the quotient
of (i) the Fixed Base Rate for such Loan for such Interest Period, divided by
(ii) one minus the Reserve Requirement for such Loan for such Interest Period.
17
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"Fronting Bank" means NationsBank, N.A., a national banking
association organized under the laws of the United States of America, acting in
its capacity as the issuer of the Letters of Credit hereunder.
"Funded Debt" means, with respect to any Person, all Debt of
such Person for money borrowed, including any such indebtedness which may be
incurred pursuant to the provisions of any revolving credit agreement or other
similar agreement.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the date hereof, applied on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 6.5.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantied Obligations" shall have the meaning assigned to
such term in Section 11.1 hereof.
"Guilders" means the lawful money of the Netherlands.
"Interest Coverage Ratio" means, for any Person, as at any
date, the ratio of (a) EBITDA of such Person for the immediately preceding four
full Fiscal Quarters of such Person (including the Fiscal Quarter ending on such
date if such date is the last day of a Fiscal Quarter) to (b) Interest Expense
of such Person for such period.
"Interest Expense" shall mean, with respect to any Person, for
any period, the sum, for such Person in accordance with GAAP, of (a) all
interest on Debt that is accrued as an expense during such period (including,
without limitation, imputed interest on Capital Lease obligations), plus (b) all
amounts paid, accrued or amortized as an expense during such period in respect
of the Interest Rate Protection Agreements or other interest rate protection
agreements, minus (c) all amounts received or accrued as income during such
period in respect of interest rate protection agreements.
"Interest Period" means, with respect to any Eurocurrency
Loan, the period commencing on the date such Loan is made, converted from
another type of Loan or renewed, as the case may be, and ending, as the Borrower
may select pursuant to Section 2.9, on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter, provided that each
such Interest Period which commences on the last Banking Day of a calendar month
(or on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Banking Day of the
appropriate calendar month.
"Interest Rate Protection Agreement" means any interest rate
protection agreement entered into with any bank or other financial institution
whereby the Borrowers
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obtain a hedge or cap for the interest rate that will be payable by the
Borrowers on the Loans under this Agreement.
"Judgment Currency" shall have the meaning assigned to such
term in Section 13.17 hereof.
"Judgment Currency Conversion Date" shall have the meaning
assigned to such term in Section 13.17 hereof.
"L/C Related Documents" shall have the meaning assigned to
such term in Section 3.1(f).
"L/C Sublimit" shall have the meaning assigned to such term in
Section 3.1(a).
"Lending Office" means, for each Bank and for each type of
Loan, the lending office of such Bank (or of an affiliate of such Bank)
designated as such for such type of Loan on its signature page hereof or such
other office of such Bank (or of an affiliate of such Bank) as such Bank may
from time to time specify to the Administrative Agent and the Borrowers as the
office by which its Loans of such type are to be made and maintained.
"Letter(s) of Credit" means any standby Letter of Credit
issued by the Fronting Bank for the account of a Borrower pursuant to Section
3.1 for the purpose of supporting performance, payment deposit, or surety
obligations of such Borrower, in any case if required by law or governmental
rule or regulation or if in the ordinary course of business of such Borrower.
"Letters of Credit Usage" means with respect to the Borrowers,
as at any date of determination, the sum of (i) the maximum aggregate amount
which is or at any time thereafter may become available (including any amounts
drawn but not yet honored) under all Letters of Credit then outstanding and (ii)
the aggregate amount of all drawings under Letters of Credit honored by the
Agent and not theretofore reimbursed by a Borrower. Letters of Credit Usage of
each Bank shall be determined as if the Banks had bought the participations
referred to in Section 3.1(a) with respect to all then outstanding Letters of
Credit. In determining Letters of Credit Usage, any Letters of Credit
denominated in an Alternative Currency, shall be converted to the Dollar
Equivalent (as of the Denomination Date for such Letter of Credit).
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, negative pledge, charge,
conditional sale, title retention agreement, financing lease or other
encumbrance or similar right of others, or any agreement to give or refrain from
giving any of the foregoing.
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"Loans" means the Term Loans, the Revolving Loans and the
Swingline Loans.
"Margin" means (a) for each type of Revolving Loan, the number
of basis points for such type of Revolving Loan set forth below opposite the
range of the Consolidated Average Funded Debt to EBITDA Ratio of Cannondale in
the schedule below as determined as of the last day of the immediately preceding
Fiscal Quarter, with adjustments to become effective on the date of receipt by
the Administrative Agent of the most recent financial statements of the
Borrowers required to be furnished to the Banks under Section 7.8; provided,
however, that in the event that the Borrowers fail to furnish such financial
statements to the Banks on a timely basis under Section 7.8, "Margin" means, for
each type of Revolving Loan during the continuance of such failure until such
financial statements are delivered, the highest number of basis points for such
type of Revolving Loan set forth below:
-------------------------------------------------------------------------------------------------------------
Margin
Consolidated Average Funded Debt to Variable Rate Loans Eurocurrency Loans
EBITDA Ratio
-------------------------------------------------------------------------------------------------------------
Less than 1.50 0 basis points 42.5 basis points
-------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.50, but 0 basis points 52.5 basis points
less than 2.00
-------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.00, but 0 basis points 75.0 basis points
less than 2.50
-------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.50, but 0 basis points 97.5 basis points
less than 3.00
-------------------------------------------------------------------------------------------------------------
Greater than or equal to 3.00 0 basis points 120.0 basis points
-------------------------------------------------------------------------------------------------------------
; and (b) for each type of Term Loan, the number of basis
points for such type of Term Loan set forth below opposite the stated months
from and after the Closing Date in the schedule below, with adjustments to
become effective automatically without further action on the part of the
Borrowers, the Administrative Agent or the Banks:
-------------------------------------------------------------------------------------------------------------
Months from and after the Closing Margin
Date
Variable Rate Loans Eurocurrency Loans
-------------------------------------------------------------------------------------------------------------
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-------------------------------------------------------------------------------------------------------------
months 1 through 6 0 basis points 175 basis points
-------------------------------------------------------------------------------------------------------------
months 7 through 12 0 basis points 200 basis points
-------------------------------------------------------------------------------------------------------------
months 13 through 18 0 basis points 225 basis points
-------------------------------------------------------------------------------------------------------------
months 19 through 24 0 basis points 250 basis points
-------------------------------------------------------------------------------------------------------------
thereafter 0 basis points 250 basis points.
-------------------------------------------------------------------------------------------------------------
"Material Subsidiary" means (i) each of the Subsidiary
Borrowers, and (ii) any other direct or indirect subsidiary of Cannondale which
on or after the date hereof has total assets equal to or greater than ten
percent (10%) of Cannondale's Consolidated Total Assets.
"Mortgaged Property" means the Bethel Mortgaged Property and
the Pennsylvania Mortgaged Property.
"Mortgages" means the Bethel Mortgages and, if any, each
Pennsylvania Mortgage.
"Multiemployer Plan" means a Plan defined as such in Section
3(37) of ERISA to which contributions have been made by any Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Cash Proceeds" means, with respect to any issuance of
Senior Notes, the cash proceeds thereof, net of customary fees, costs and other
expenses (including legal, accounting, investment banking and other professional
fees, and underwriting discounts and commissions) incurred in connection
therewith.
"Net Income" of any Person for any period means the net income
(loss) of such Person for such period determined in accordance with GAAP.
"Notes" means the Term Notes, the Revolving Notes and the
Swingline Notes.
"Notice of Borrowing" shall have the meaning assigned to such
term in Section 2.7 hereof.
"Obligation Currency" shall have the meaning assigned to such
term in Section 13.17 hereof.
"Obligations" means the unpaid principal of and interest on
(including interest accruing on or after the filing of any petition in
bankruptcy, or the commencement
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of any insolvency, reorganization or like proceeding, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Notes
and all other obligations and liabilities of any Borrower to the Administrative
Agent or any Bank, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under, out
of, or in connection with, this Agreement, any Note, any Letter of Credit, any
other Facility Document and any other document made, delivered or given in
connection therewith or herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all fees and disbursements of counsel to the Administrative
Agent or any Bank) or otherwise.
"Outstandings Amount" means, as of any date of determination,
the sum of (a) the aggregate amount of Revolving Loans outstanding, plus (b) the
aggregate amount of Swingline Loans outstanding, plus (c) the Letters of Credit
Usage.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Pennsylvania Collateral Assignment" means a collateral
assignment (which shall be in form and substance reasonably satisfactory to the
Administrative Agent) that collaterally assigns all installment sales agreements
relating to Cannondale's Bedford, Pennsylvania facilities entered into by
Cannondale with local Pennsylvania agencies, and all agreements and instruments
related thereto, which collateral assignment may be delivered from time to time
hereafter by Cannondale in favor of the Administrative Agent, as Mortgagee, as
the same may be amended, modified, supplemented or restated from time to time.
"Pennsylvania Mortgage" means an Open-End Mortgage Deed and
Security Agreement (which shall be in form and substance reasonably satisfactory
to the Administrative Agent and substantially similar to the Bethel Mortgages)
that mortgages the Pennsylvania Mortgaged Property and may be delivered from
time to time hereafter by Cannondale in favor of the Administrative Agent, as
Mortgagee, as the same may be amended, modified, supplemented or restated from
time to time.
"Pennsylvania Mortgaged Property" means the real property and
improvements owned by Cannondale and located in Bedford, Pennsylvania that may
from time to time hereafter be or become subject to a Pennsylvania Mortgage in
favor of the Administrative Agent, as more particularly described in the
applicable Pennsylvania Mortgage.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, joint
venture, governmental authority or other entity of whatever nature.
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"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA, other than a
Multiemployer Plan.
"Pledge Agreement" means the pledge agreement dated June 9,
1997, with respect to the shares of the Subsidiary Borrowers, entered into by
Cannondale in favor of the Administrative Agent for the benefit of the Banks, a
copy of which is attached hereto as Exhibit G, as the same may be amended,
modified, supplemented or restated from time to time.
"Prime Rate" means that per annum rate of interest from time
to time announced by the Reference Bank at its Principal Office as its prime
rate, which rate may not be the lowest rate of interest charged by the Reference
Bank to its customers.
"Principal Office" means the principal office of the
Administrative Agent, presently located at 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000.
"Reference Bank" means NationsBank, N.A. (or its applicable
Lending Office, as the case may be).
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Regulatory Change" means, with respect to any Bank, any
change after the date of this Agreement in United States federal, state,
municipal or foreign laws or regulations (including without limitation
Regulation D) or the adoption or making after such date of any interpretations,
directives or requests applying to a class of banks including such Bank of or
under any United States, federal, state, municipal or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Rentals" means and includes as of the date of any
determination thereof all payments (including as such all payments which the
lessee is obligated to make to the lessor on termination of the lease or
surrender of the property and all payments, if any, required to be paid by the
lessee based on sales volume or gross revenues or otherwise) payable by the
Borrowers, as lessee or sublessee under a lease of real or personal property,
but shall be exclusive of any amounts required to be paid by the Borrowers
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges.
"Required Banks" means, at any time, Banks having in the
aggregate at least 51% of (i) the sum of the aggregate amount of the Revolving
Credit Commitments
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plus the aggregate outstanding principal amount of the Term Loans, or (ii) if
the Commitments have been terminated, the Total Outstandings Amount (determined
as if the Swingline Loans outstanding had been repaid with the proceeds of
Variable Rate Loans). For purposes of determining the Required Banks, any
amounts denominated in an Alternative Currency shall be translated into Dollars
at the Spot Exchange Rate in effect at such time.
"Reserve Requirement" means, for any Interest Period for any
Eurocurrency Loan, the average maximum rate at which reserves (including without
limitation any marginal, special, supplemental or emergency reserves) are
required to be maintained during such Interest Period under regulations issued
from time to time by the Board of Governors of the Federal Reserve System (or
any successor) by member banks of the Federal Reserve System against, in the
case of Eurocurrency Loans, "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks by reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the Fixed Base Rate
for Eurocurrency Loans is to be determined as provided in the definition of
"Fixed Base Rate" in this Section 1.1 or (ii) any category of extensions of
credit or other assets which include Eurocurrency Loans. The Fixed Rate shall be
adjusted automatically on and as of the effective date of any change in the
Reserve Requirement.
"Restricted Payment Allowance" means, at any date of
determination thereof, for the Borrowers, on a combined basis in accordance with
GAAP, the difference of (a) 50% of (i) EBITDA of Cannondale and its Consolidated
Subsidiaries for the four most recent Fiscal Quarters ended on or prior to the
date of determination (with adjustments to become effective on the date of
receipt by the Administrative Agent of the most recent financial statements of
the Borrowers required to be furnished to the Banks under Section 7.8), minus
(ii) Capital Expenditures made during such four Fiscal Quarters by Cannondale
and its Consolidated Subsidiaries, minus (iii) the increase in working capital
of Cannondale and its Consolidated Subsidiaries (which includes accounts
receivable, inventory, accounts payable, accrued expenses, and other similar
accounts but excludes the current portion of Funded Debt) during such four
Fiscal Quarters, minus (iv) all interest and principal payments paid or payable
on all Debt of Cannondale and its Consolidated Subsidiaries during such four
Fiscal Quarters, minus (b) the sum of (i) the amount of all dividends or
distributions already declared or paid during such four Fiscal Quarters by
Cannondale and its Consolidated Subsidiaries pursuant to Section 8.6(c), plus
(ii) the cost of any stock repurchases, redemptions or other acquisitions for
value already made during such four Fiscal Quarters by Cannondale and its
Consolidated Subsidiaries pursuant to Section 8.6(c).
"Revolving Credit Commitment" means, with respect to each
Bank, the obligation of such Bank to make Revolving Loans and participate in
Letters of Credit
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under this Agreement in the following aggregate principal amount, as such amount
may be reduced or otherwise modified from time to time:
NationsBank, N.A.: $15,294,118;
Fleet National Bank: $15,294,118;
The Chase Manhattan Bank: $11,470,588
State Street Bank and Trust Company: $11,470,588
BankBoston, N.A.: $11,470,588
Total: $65,000,000.
"Revolving Loans" has the meaning given such term in Section
2.3.
"Revolving Notes" means the promissory notes of each of the
Borrowers substantially in the forms of Exhibit A-1 hereto evidencing the
Revolving Loans made to such Borrower by a Bank hereunder, as amended, modified,
supplemented, restated or reissued from time to time.
"Security Agreement" means the security agreement
substantially in the form of Exhibit H to be delivered by Cannondale under the
terms of this Agreement, as the same may be amended, modified, supplemented or
restated from time to time.
"Security Agreement Questionnaire" means the security
agreement questionnaire substantially in the form of Exhibit I to be delivered
by the Borrowers under the terms of this Agreement.
"Senior Notes" has the meaning given such term in Section
8.1(h).
"Shareholder Note" means the promissory note in the original
principal amount of $12,000,000 made by Xxxxxx Xxxxxxxxxx in favor of Cannondale
evidencing loans made by Cannondale to Xxxxxxxxxx, as the same may be amended,
modified, supplemented or restated from time to time.
"Shareholder Mortgage" means the Collateral Assignment of Note
and Deed of Trust, dated as of September 15, 1998, by and between Xxxxxx
Xxxxxxxxxx and Cannondale, and the Deed of Trust and Security Agreement dated
September 15, 1998 from Diamond M, LLC to the Public Trustee of Rio Xxxxxx
County, as Trustee f/b/o Xxxxxx X. Xxxxxxxxxx assigned thereby.
"Shareholder Note Proceeds" has the meaning given such term in
the Collateral Assignment of Shareholder Note.
"Shareholder Pledge Agreement" means the shareholder pledge
agreement dated of even date herewith entered into by Xxxxxx Xxxxxxxxxx in favor
of Cannondale, securing the Shareholder Note, as the same may be amended,
modified, supplemented or restated from time to time.
25
19
"Spot Exchange Rate" means, on any date of determination
thereof, (a) with respect to any Alternative Currency, the spot rate at which
Dollars are offered for such Alternative Currency on such day by the principal
London branch of the Reference Bank at approximately 11:00 a.m. (London time)
and (b) with respect to Dollars in relation to any specified Alternative
Currency, the spot rate at which such specified Alternative Currency is offered
on such date by the principal London branch of the Reference Bank for Dollars at
approximately 11:00 a.m. (London time). For purposes of determining the Spot
Exchange Rate in connection with an Alternative Currency Borrowing, such Spot
Exchange Rate shall be determined as of the Denomination Date for such Borrowing
with respect to transactions in the applicable Alternative Currency that will
settle on the date of such Borrowing.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which at least a majority of the securities or
other ownership interests having ordinary voting power (absolutely or
contingently) for the election of directors or other persons performing similar
functions are at the time owned directly or indirectly by such Person.
"Subsidiary Pledge Agreement" means the pledge agreement with
respect to the shares of Cannondale Australia Pty Limited and Cannondale FSC,
Inc., to be entered into by Cannondale in favor of the Administrative Agent for
the benefit of the Banks, substantially in the form of Exhibit J, as the same
may be amended, modified, supplemented or restated from time to time.
"Swingline Bank" means NationsBank, N.A., a national banking
association organized under the laws of the United States of America, acting in
its capacity as lender of the Swingline Loans hereunder.
"Swingline Facility Amount" shall mean the independent
obligation of the Swingline Bank to make Swingline Loans pursuant to Section 2.4
hereof in an aggregate principal amount at any one time outstanding up to but
not exceeding $10,000,000.
"Swingline Loans" means the Loans made by the Swingline Bank
pursuant to Section 2.4 hereof, which Swingline Loans shall in no event exceed
$10,000,000 in aggregate principal amount outstanding at any one time.
"Swingline Notes" means the promissory notes of each of the
Borrowers substantially in the form of Exhibit A-2 hereto evidencing the
Swingline Loans made to such Borrower by the Swingline Bank hereunder.
"Swingline Rate" shall mean an as offered rate per annum
quoted by the Swingline Bank (determined in such Bank's discretion) and agreed
to by the applicable
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20
Borrower for a term mutually agreeable to such Swingline Bank and such Borrower.
Promptly after the Borrower and the Swingline Bank so mutually agree on the
Swingline Rate and the term therefor, the Swingline Bank shall send to the
Borrower a written confirmation of such Swingline Rate, the term thereof, and
the principal amount of the Swingline Loan subject thereto, which confirmation
shall be conclusive and binding for all purposes. No failure or delay in sending
such a confirmation shall impair in any way the obligations of any Borrower with
respect to such Swingline Loan.
"Tangible Net Worth" means, at any date of determination
thereof, the excess of total assets of a Person over total liabilities of such
Person, excluding, however, from the determination of total assets: goodwill,
trademarks, patents, organizational costs, unamortized debt discounts and
expenses and other like intangible assets as defined by GAAP, all determined in
accordance with GAAP.
"Termination Date" means January 22, 2002; provided that if
such date is not a Banking Day, the Termination Date shall be the next
succeeding Banking Day (or, if such next succeeding Banking Day falls in the
next calendar month, the next preceding Banking Day).
"Term Loan" shall have the meaning given such term in Section
2.2.
"Term Loan Amortization Date" shall have the meaning assigned
to such term in Section 2.2(b) of this Agreement, provided that if any such day
is not a Banking Day, such day shall be the next succeeding Banking Day.
"Term Loan Commitment" means, with respect to each Bank, the
obligation of such Bank to make Term Loans under this Agreement in the following
aggregate principal amount:
NationsBank, N.A.: $4,705,882;
Fleet National Bank: $4,705,882;
The Chase Manhattan Bank: $3,529,412;
State Street Bank and Trust Company: $3,529,412;
BankBoston, N.A.: $3,529,412;
Total: $20,000,000.
"Term Loan Maturity Date" means January 22, 2002, provided
that if such date is not a Banking Day, the Term Loan Maturity Date shall be the
next succeeding Banking Day.
"Term Notes" means the promissory notes of Cannondale
substantially in the form of Exhibit A-3 hereto evidencing the Term Loans made
to Cannondale by a Bank hereunder, as amended, modified, supplemented, restated
or reissued from time to time.
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"Total Capitalization" means, at any date of determination
thereof, the capitalization (stockholders' equity plus long-term debt (less
current installments)) of a Person and its Consolidated Subsidiaries, determined
on a consolidated basis in accordance with GAAP.
"Total Outstandings Amount" means, as of any date of
determination, the sum of (a) the aggregate amount of Term Loans outstanding,
plus (b) the aggregate amount of Revolving Loans outstanding, plus (c) the
aggregate amount of Swingline Loans outstanding, plus (d) the Letters of Credit
Usage.
"Trademark Agreement" means the "Patent, Trademark, Copyright
and Other Intellectual Property Security Interest" agreement, the form of which
is attached as Annex I to the Security Agreement executed and delivered by the
Borrowers.
"Unconditional Guaranty" shall have the meaning assigned to
such term in Section 11.1 herein.
"Unfunded Benefit Liabilities" means, with respect to any
Plan, the amount (if any) by which the present value of all benefit liabilities
(within the meaning of Section 4001(a)(16) of ERISA) under the Plan exceeds the
fair market value of all Plan assets allocable to such benefit liabilities, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrower
or any ERISA Affiliate under Title IV of ERISA.
"Variable Rate" means, for any day, the higher of (a) the
Federal Funds Rate for such day plus 1/2 of 1% and (b) the Prime Rate for such
day. Any change in the Variable Rate due to a change in the Federal Funds Rate
or the Prime Rate shall be effective on the effective date of such change in the
Federal Funds Rate or the Prime Rate.
"Variable Rate Loan" means any Loan when and to the extent the
interest rate for such Loan is determined in relation to the Variable Rate.
"Year 2000 Compliant" shall have the meaning assigned to such
term in Section 6.21.
"Yen" means the lawful money of Japan.
Section 1.2. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP, and all
financial data required to be delivered hereunder shall be prepared in
accordance with GAAP.
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Section 1.3. Rules of Interpretation.
(a) A reference to any document or agreement shall
include such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) The words "include", "includes" and "including"
are not limiting.
(f) All terms not specifically defined herein or by
GAAP, which terms are defined in the Uniform Commercial Code as in effect in the
State of New York, have the meanings assigned to them therein.
(g) Reference to a particular "Section" refers to
that section of this Agreement unless otherwise indicated.
(h) The words "herein", "hereof", "hereunder" and
words of like import shall refer to this Agreement as a whole and not to any
particular section or subdivision of this Agreement.
Section 1.4. Exchange Rates. On each Denomination Date, the
Administrative Agent shall determine the Spot Exchange Rate as of such
Denomination Date to be used for calculating the relevant Dollar Equivalent and
Alternative Currency Equivalent amounts. The Spot Exchange Rates so determined
shall become effective on such Denomination Date, shall remain effective until
the next succeeding Denomination Date and shall, for all purposes of this
Agreement (other than any provision expressly requiring the use of a current
exchange rate) be the Spot Exchange Rate employed in converting any amounts
between the applicable currencies.
ARTICLE 2. THE CREDIT.
Section 2.1. The Loans. Subject to the terms and conditions of
this Agreement, each of the Banks, severally and not jointly, agrees to make
loans pursuant to Sections 2.2 and 2.3 herein and in accordance with their
respective Commitment Percentages and the Swingline Bank agrees to make loans
pursuant to Section 2.4 herein (all such loans, the "Loans") to the Borrowers
(as specified in the notice of each Borrowing
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pursuant to Section 2.11) from time to time from and including the dates
specified for the Loans in Sections 2.2, 2.3 and 2.4 herein.
Section 2.2. The Term Loan.
(a) Subject to the terms and conditions of this
Agreement, each of the Banks, severally and not jointly, agrees to make term
loans (the "Term Loans") to Cannondale (as specified in the Notice of Borrowing
pursuant to Section 2.11) on the Closing Date in an aggregate principal amount
not to exceed the Term Loan Commitment of such Bank to Cannondale. The Term Loan
Commitments shall be automatically terminated at 5:00 p.m., New York City time,
on the Closing Date. The Term Loans may be outstanding as Variable Rate Loans or
Eurocurrency Loans (each a "type" of Loan). The Term Loans shall be denominated
only in Dollars. Each type of Loan of each Bank shall be made and maintained at
such Bank's applicable Lending Office for such type of Loan.
(b) The principal amount of the Term Loans shall be
due and payable in two (2) equal installments of $10,000,000 each, payable on
July 22, 2001, and January 22, 2002, each such date being a Term Loan
Amortization Date. Interest on each Term Loan shall be due and payable in
accordance with Section 2.13 herein. Cannondale agrees that the principal amount
outstanding in respect of the Term Loans, together with any other amounts,
including any accrued interest and other costs and expenses, shall be due and
payable in full on the Term Loan Maturity Date without notice or demand. Amounts
paid or prepaid in respect of Term Loans may not be reborrowed.
Section 2.3. The Revolving Loans.
(a) Subject to the terms and conditions of this
Agreement, each of the Banks, severally and not jointly, agrees to make
revolving credit loans (the "Revolving Loans") to each Borrower (as specified in
the notice of each Borrowing pursuant to Section 2.11) from time to time from
and including the date hereof to and including the Banking Day next preceding
the Termination Date, in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of the Revolving Credit
Commitment of such Bank to the Borrowers; provided the Revolving Loans of such
Bank outstanding plus the Letters of Credit Usage outstanding of such Bank shall
not at any time exceed its Revolving Credit Commitment and provided further that
the Outstandings Amount shall not at any time exceed the aggregate amount of the
Revolving Credit Commitments of the Banks. The Revolving Loans shall be due and
payable on the Termination Date. The Revolving Loans may be outstanding as
Variable Rate Loans or Eurocurrency Loans (each a "type" of Loan). Eurocurrency
Loans may be denominated in Dollars or in one or more Alternative Currencies but
Variable Rate Loans shall be denominated only in Dollars. Each type of Loans of
each Bank shall be made and maintained at such Bank's applicable Lending Office
for such type of Loan. Subject to the
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terms hereof, the Borrowers may borrow, repay or prepay and reborrow Revolving
Loans hereunder prior to the Termination Date.
(b) Any Revolving Loan that is a Eurocurrency Loan
may be made in the Alternative Currency specified in the Notice of Borrowing
pursuant to Section 2.11 in the Alternative Currency amount specified in such
notice, and the Administrative Agent shall determine the Dollar Equivalent as of
the Denomination Date for such Borrowing (which determination shall be
conclusive absent manifest error). For purposes of determining the amount
outstanding under any Bank's Revolving Credit Commitment, each Eurocurrency Loan
denominated in an Alternative Currency shall be the Dollar Equivalent for such
Eurocurrency Loan as of the Denomination Date.
Section 2.4. The Swingline Loans.
(a) Subject to the terms and conditions of this
Agreement, the Swingline Bank agrees to make Swingline Loans (the "Swingline
Loans") to Cannondale from time to time from and including the date hereof to
and including the Banking Day next preceding the Termination Date, in an
aggregate principal amount at any one time outstanding up to but not exceeding
the Swingline Facility Amount; provided that the Outstandings Amount shall not
at any time exceed the aggregate amount of the Revolving Credit Commitments of
the Banks. Each Loan under this Section 2.4 shall be made by the Swingline Bank.
The Swingline Loans shall be at the Swingline Rate, shall have a term of no more
than 30 days and shall be denominated only in Dollars. Subject to the terms
hereof, Cannondale may borrow, repay or prepay and reborrow Swingline Loans
hereunder prior to the Termination Date.
(b) Anything contained in this Agreement to the
contrary notwithstanding, (A) unless Cannondale shall have notified the
Swingline Bank prior to 11:00 a.m. (New York City local time) on the Banking Day
immediately before the date on or before which a Swingline Loan is due that
Cannondale intends to repay such Swingline Loan other than with the proceeds of
Variable Rate Loans, Cannondale shall be deemed to have timely given a Notice of
Borrowing pursuant to Section 2.11 requesting the Banks to make Variable Rate
Loans on the date on which such Swingline Loan is due in an amount equal to the
amount of outstanding principal and interest of such Swingline Loan (provided
that such notice shall also be deemed to have been automatically given upon the
occurrence of a Default or Event of Default under Section 10.1 or upon the
exercise of remedies provided in Section 10.2); and (B) the Banks shall make
Variable Rate Loans on the date on which such Swingline Loan is due (including
upon an Event of Default and acceleration of such Loans) ratably in accordance
with their Commitment Percentage (determined before giving effect to any
termination or reduction of Commitments after any such Swingline Loans were
made), the proceeds of which shall be applied directly to reimburse the
Swingline Bank for the amount of outstanding principal and interest of such
Swingline Loan notwithstanding (i) that the amount of such Borrowing may not
comply
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with any minimum amount for advances of Variable Rate Loans otherwise required
hereunder, (ii) whether any conditions specified in Article 5 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the
failure of any such Notice of Borrowing or deemed Notice of Borrowing for
Variable Rate Loans to be made by the time otherwise required hereunder, (v)
whether the date of such Borrowing is a date on which Variable Rate Loans are
otherwise permitted to be made hereunder, and (vi) any termination or reduction
in the Commitments after any such Swingline Loans were made. If, for any reason,
the Swingline Bank does not receive proceeds of Variable Rate Loans on the date
on which a Swingline Loan is due in an amount equal to the outstanding principal
and interest of such Swingline Loan, Cannondale shall reimburse the Swingline
Bank on the Banking Day immediately following the date of such nonpayment, in an
amount in Dollars in same day funds equal to the excess of the amount due over
the proceeds of such Variable Rate Loans, if any, which are so received, plus
accrued interest on such excess amount at a rate per annum equal to the Variable
Rate; provided that if a Default or Event of Default shall exist and Cannondale
is not, by reason thereof, eligible to borrow Variable Rate Loans, then interest
shall accrue on such amount paid by the Swingline Bank at the Default Rate. Each
Bank irrevocably agrees that if Cannondale fails to repay a Swingline Loan to
the Swingline Bank when due (including upon an Event of Default and acceleration
of such Loans), whether or not such failure is a result of the commencement of a
proceeding of the type referred to in Section 10.1(f) with respect to
Cannondale, then each Bank shall be deemed to have purchased participations in
the Swingline Loans in proportion to their respective Commitments (determined
before giving effect to any termination or reduction of Commitments after any
such Swingline Loans were made); provided that (x) all interest payable on the
Swingline Loans shall be for the account of the Swingline Bank until the date as
of which the respective participation is required to be purchased and, to the
extent attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Bank
shall be required to pay the Swingline Bank interest on the principal amount of
participation purchased for each day from and including the day upon which the
Variable Rate Loan Borrowing would otherwise have occurred to but excluding the
date of payment for such participation, at the rate otherwise applicable to
Variable Rate Loans hereunder.
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Section 2.5. The Notes.
(a) The Term Loans of each Bank to Cannondale shall
be evidenced by promissory notes in favor of such Bank in the form of Exhibit
A-3, dated the Closing Date, duly completed and executed by Cannondale.
(b) The Revolving Loans of each Bank to each Borrower
shall be evidenced by promissory notes in favor of such Bank in the form of
Exhibit A-1, dated the Closing Date, duly completed and executed by the
applicable Borrower. Each Bank shall, and is hereby authorized by each of the
Borrowers to, endorse on the schedule attached to each Note held by such Bank,
or otherwise record in such Bank's internal records, an appropriate notation
evidencing the date, type, amount and currency of each Revolving Loan evidenced
by such Note and the date, amount and currency of each repayment or prepayment
of principal; provided that the failure of any Bank to make such notation or any
error therein shall not affect the obligations of the applicable Borrower to
repay the Revolving Loans made by such Bank.
(c) The Swingline Loans of the Swingline Bank to
Cannondale shall be evidenced by promissory notes in favor of the Swingline Bank
in the form of Exhibit A-2, dated the Closing Date, duly completed and executed
by Cannondale. The Swingline Bank shall, and is hereby authorized by Cannondale
to, endorse on the schedule attached to each Swingline Note, or otherwise record
in such Bank's internal records, an appropriate notation evidencing the date,
amount and term of each Swingline Loan evidenced by such Note and the date and
amount of each repayment or prepayment of principal; provided that the failure
of the Swingline Bank to make such notation or any error therein shall not
affect the obligations of Cannondale to repay the Swingline Loans made by such
Swingline Bank.
Section 2.6. Purpose. The Borrowers shall use the proceeds of
the Loans for working capital, repurchases of Cannondale's publicly traded
common stock and general corporate purposes. Such proceeds shall not be used for
the purpose, whether immediate, incidental or ultimate, of buying or carrying
"margin stock" except in compliance with Regulation U.
Section 2.7. Borrowing Procedures. The applicable Borrower
shall give the Administrative Agent notice (a "Notice of Borrowing") of each
Borrowing to be made under Sections 2.2, 2.3 or 2.4 as provided in Section 2.11.
Not later than 2:00 p.m. New York City local time on the date of such Borrowing
pursuant to Sections 2.2 or 2.3, each Bank shall, through its Lending Office and
subject to the conditions of this Agreement, make available to the
Administrative Agent, at the Principal Office for the account of the Lending
Office, the amount of the Loan to be made by such Bank on such day in the
currency in which such Loan is to be made and in immediately available funds for
the account of the applicable Borrower. The amount so received by the
Administrative Agent shall, subject to the conditions of this Agreement, be made
available to the applicable
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Borrower, in immediately available funds, by the Administrative Agent crediting
an account of such Borrower designated by such Borrower and maintained by such
Borrower with the Administrative Agent at the Principal Office.
Section 2.8. Prepayments and Conversions.
(a) Optional Prepayments. Each Borrower shall have
the right to make prepayments of principal, to convert one type of Loans into
another type of Loans or to convert Eurocurrency Loans denominated in one
currency to Eurocurrency Loans denominated in another currency, at any time or
from time to time; provided that: (i) such Borrower shall give the
Administrative Agent notice of each such prepayment or conversion as provided in
Section 2.11; (ii) Eurocurrency Loans may be prepaid or converted only on the
last day of an Interest Period for such Eurocurrency Loans, and (iii)
prepayments of the Term Loans shall be applied in the order of maturity against
principal amounts due on the Term Loans until the Term Loans are paid in full.
(b) Mandatory Prepayments. If any time prior to the
Termination Date, as a result of a partial reduction or termination of Revolving
Credit Commitments, as a result of fluctuations in currencies or otherwise, the
aggregate amount of all Revolving Loans and Swingline Loans outstanding at such
time plus the aggregate amount of Letters of Credit Usage outstanding at such
time shall exceed the aggregate amount of the Revolving Credit Commitments, the
Borrowers shall repay the Banks forthwith such amounts as may be necessary to
eliminate such excess (and if the repayment in full of the Revolving Loans and
Swingline Loans does not eliminate such excess due to the amount of outstanding
Letters of Credit Usage at such time, Cannondale shall also deposit with the
Administrative Agent sufficient cash collateral to cover such remaining excess),
and the failure of the Borrowers to make and the Banks to receive such payment
shall constitute an Event of Default hereunder. For the purposes of this Section
2.8(b), (i) the amount outstanding under any Eurocurrency Loan, or the amount of
any Letter of Credit Usage, denominated in an Alternative Currency at any time
shall be the Dollar Equivalent thereof as of each Denomination Date, and (ii)
for purposes of determining such amount outstanding, there shall not be an
interval of greater than three months between Denomination Dates.
(c) Prepayment with Senior Note Proceeds. In the
event that, at any time or from time to time, Cannondale shall receive Net Cash
Proceeds from the issuance of Senior Notes, then, substantially simultaneously
with (and in any event not later than the third Business Day next following) the
receipt of such Net Cash Proceeds, 100% of such Net Cash Proceeds shall be used,
first, to pay or prepay outstanding Term Loans in the order of maturity in an
aggregate principal amount up to 100% of such Net Cash Proceeds and, second, to
pay or prepay outstanding Revolving Loans in an aggregate principal amount up to
the remaining balance of such Net Cash Proceeds.
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(d) Prepayment with Shareholder Note Proceeds. In the
event that, at any time or from time to time, Cannondale or the Administrative
Agent shall receive Shareholder Note Proceeds (as defined in the Collateral
Assignment of Shareholder Note) in accordance with Section 4(j) of the
Collateral Assignment of Shareholder Note, then, substantially simultaneously
with the receipt of such Shareholder Note Proceeds, 100% of such Shareholder
Note Proceeds shall be used, first, to pay or prepay outstanding Term Loans in
the order of maturity in an aggregate principal amount up to 100% of such
Shareholder Note Proceeds, and, second, to pay or prepay outstanding Revolving
Loans in an aggregate principal amount up to the remaining balance of such
Shareholder Note Proceeds.
Section 2.9. Interest Periods; Renewals.
(a) In the case of each Eurocurrency Loan, the
Borrower thereunder shall select an Interest Period of any duration in
accordance with the definition of Interest Period in Section 1.1, subject to the
following limitations: (i) in the case of the Term Loans, no Interest Period may
extend beyond a Term Loan Amortization Date unless, after giving effect thereto,
the aggregate principal amount of the Term Loans outstanding as Eurocurrency
Loans having Interest Periods which end after such Term Loan Amortization Date
shall be equal to or less than the principal amount of the Term Loans to be
outstanding after such Term Loan Amortization Date; (ii) in the case of the
Revolving Loans, no Interest Period may extend beyond the Termination Date;
(iii) notwithstanding clauses (i) and (ii) above, no Interest Period shall have
a duration less than 30 days, and if any such proposed Interest Period would
otherwise be for a shorter period, such Interest Period shall not be available;
(iv) if an Interest Period would end on a day which is not a Banking Day, such
Interest Period shall be extended to the next Banking Day, unless such Banking
Day would fall in the next calendar month in which event such Interest Period
shall end on the immediately preceding Banking Day; and (v) no more than eight
Interest Periods may be outstanding at any one time. For purposes of this
Section 2.9(a), borrowings having different Interest Periods or denominated in
different currencies, regardless of whether they commence on the same date,
shall be considered separate borrowings.
(b) Upon notice to the Administrative Agent as
provided in Section 2.11, each Borrower may renew any Eurocurrency Loan on the
last day of the Interest Period therefor as the same type of Loans with an
Interest Period of the same or different duration in accordance with the
limitations provided above. If such Borrower shall fail to give notice to the
Administrative Agent of such a renewal, (i) in the case of a Eurocurrency Loan
denominated in Dollars, such Eurocurrency Loan shall automatically become a
Variable Rate Loan on the last day of the current Interest Period and (ii) in
the case of a Eurocurrency Loan denominated in an Alternative Currency, such
Eurocurrency Loan shall automatically become a Eurocurrency Loan denominated in
the same Alternative Currency having an Interest Period of one month.
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Section 2.10. Changes of Commitments.
(a) The Borrowers shall have the right to reduce or
terminate the amount of unused Revolving Credit Commitments or the Swingline
Facility Amount at any time or from time to time, provided that: (a) the
Borrowers shall give notice of each such reduction or termination to the
Administrative Agent and the Swingline Bank as provided in Section 2.11; and (b)
each partial reduction shall be in an aggregate amount at least equal to
$5,000,000; provided that if any such reduction would cause the aggregate
Revolving Credit Commitments to be reduced below the amount of $5,000,000, the
Banks shall have the right either to reduce the Revolving Credit Commitments to
such amount or to terminate the Revolving Credit Commitments, in whole. The
Revolving Credit Commitments, once reduced or terminated, may not be reinstated.
(b) In addition to any other reduction in Revolving
Credit Commitments provided for herein, on each date upon which Senior Notes are
issued, the aggregate Revolving Credit Commitments shall be reduced by an amount
equal to the excess of (i) 100% of the Net Cash Proceeds from the issuance of
such Senior Notes over (ii) the aggregate principal amount of Term Loans paid or
prepaid pursuant to Section 2.8(c) in connection with such issuance.
(c) In addition to any other reduction in Revolving
Credit Commitments provided for herein, in the event that, at any time or from
time to time, Cannondale or the Administrative Agent shall receive Shareholder
Note Proceeds in accordance with Section 4(j) of the Collateral Assignment of
Shareholder Note, then the aggregate Revolving Credit Commitments shall be
automatically reduced by an amount equal to the excess of (i) 100% of the
Shareholder Note Proceeds over (ii) the aggregate principal amount of Term Loans
paid or prepaid pursuant to Section 2.8(d) with such Shareholder Note Proceeds.
(d) With respect to the Bethel Mortgages, in the
event that Cannondale records a written notice pursuant to Section 49-2(c) of
the Connecticut General Statutes (a copy of which shall concurrently be given to
the Administrative Agent) terminating the right to have additional Borrowings or
additional Letters of Credit secured by the Bethel Mortgages or limiting such
Borrowings or Letters of Credit Usage secured by the Bethel Mortgages to not
more than the Total Outstandings Amount at the time of the recording of such
notice, then the Banks and the Swingline Bank shall have no further obligation
to make Loans hereunder and the Fronting Bank shall have no further obligation
to issue Letters of Credit hereunder.
Section 2.11. Certain Notices. Notices by the Borrowers to the
Administrative Agent of each Borrowing pursuant to Section 2.7, and each
prepayment or conversion pursuant to Section 2.8 and each renewal pursuant to
Section 2.9(b), and each reduction or termination of the Revolving Credit
Commitments pursuant to Section 2.10, shall be irrevocable and shall be
effective only if received by the Administrative Agent not
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later than 11:00 a.m. New York City time, and (a) in the case of borrowings and
prepayments of, conversions into and (in the case of Eurocurrency Loans)
renewals of (i) Variable Rate Loans, given one Banking Day prior thereto; (ii)
Eurocurrency Loans, given three Banking Days prior thereto; and (iii) Swingline
Loans, given on the day thereof; (b) in the case of reductions or termination of
the Revolving Credit Commitments, given three Banking Days prior thereto. Each
such notice shall specify the Loans to be borrowed, prepaid, converted or
renewed and the amount (subject to Section 2.12) and type of the Loans to be
borrowed, or converted, or prepaid or renewed (and, in the case of a conversion,
the type of Loans to result from such conversion and, in the case of a
Eurocurrency Loan, the Interest Period therefor) and the date of the Borrowing
or prepayment, or conversion or renewal (which shall be a Banking Day). Each
such notice of reduction or termination shall specify the amount of the
Revolving Credit Commitments to be reduced or terminated. The Administrative
Agent shall promptly notify the Banks of the contents of each such notice.
Section 2.12. Minimum Amounts. Except for Borrowings which
exhaust the full remaining amount of the Revolving Credit Commitments,
prepayments or conversions which result in the prepayment or conversion of all
Loans of a particular type or conversions made pursuant to Section 4.4, each
Borrowing, prepayment, conversion and renewal of principal of Loans of a
particular type and of a particular currency shall be in an amount at least
equal to $3,500,000 (or the Dollar equivalent thereof) in the aggregate for
Borrowings other than in Yen, and the Dollar equivalent of $1,500,000 in the
aggregate for Borrowings in Yen, and in increments of $500,000 for all Banks
(borrowings, prepayments, conversions or renewals of or into Loans of different
types or, in the case of Eurocurrency Loans, having different Interest Periods
at the same time hereunder to be deemed separate borrowings, prepayments,
conversions and renewals for the purposes of the foregoing, one for each type of
Interest Period). Anything in this Agreement to the contrary notwithstanding,
the aggregate principal amount of Eurocurrency Loans of each type having
concurrent Interest Periods shall be at least equal to $1,000,000 in the
aggregate for each Bank.
Section 2.13. Interest.
(a) Interest shall accrue on the outstanding and
unpaid principal amount of each Loan for the period from and including the date
of such Loan to but excluding the date such Loan is due at the following rates
per annum: (i) for a Variable Rate Loan, at a variable rate per annum equal to
the Variable Rate plus any applicable Margin, (ii) for a Eurocurrency Loan, at a
fixed rate equal to the Fixed Rate plus the applicable Margin, and (iii) for a
Swingline Loan, at a rate per annum equal to the applicable Swingline Rate. If
the principal amount of any Loan and any other amount payable by any Borrower
hereunder, under the Notes or under any other Facility Documents shall not be
paid when due (at stated maturity, by acceleration or otherwise), interest shall
accrue on such amount to the fullest extent permitted by law from and
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including such due date to but excluding the date such amount is paid in full at
the Default Rate.
(b) The interest rate on each Variable Rate Loan
shall change when the Variable Rate changes and interest on each such Loan shall
be calculated on the basis of a year of 360 days for the actual number of days
elapsed. Interest on each Eurocurrency Loan and each Swingline Loan shall be
calculated on the basis of a year of 360 days for the actual number of days
elapsed. Promptly after the determination of any interest rate provided for
herein or any change therein, the Administrative Agent shall notify the
applicable Borrower and the Banks.
(c) Accrued interest on all types of Loans shall be
due and payable in the relevant currency in arrears upon any payment of
principal or conversion thereof and (i) for each Variable Rate Loan, on the last
business day of each fiscal quarter, commencing the first such date after such
Variable Rate Loan is made, and on the Termination Date with respect to
Revolving Loans and on each Term Loan Amortization Date and the Term Loan
Maturity Date with respect to the Term Loans; (ii) for each Eurocurrency Loan,
on the last day of the Interest Period therefor and, in the case of an Interest
Period greater than three months, at three-month intervals after the first day
of such Interest Period and on the last day of such Interest Period; and (iii)
for each Swingline Loan, on the date on which such Swingline Loan is due;
provided that interest accruing at the Default Rate shall be due and payable
from time to time on demand of the Administrative Agent.
Section 2.14. Fees.
(a) The Borrowers shall pay to the Administrative
Agent for the account of each Bank a facility fee on the daily average used and
unused Revolving Credit Commitment of such Bank, for the period from and
including the date hereof to the earlier of the date the Revolving Credit
Commitments are terminated or the Termination Date, at the rate per annum set
forth opposite the applicable range of the Consolidated Average Funded Debt to
EBITDA Ratio of Cannondale in the schedule below as determined as of the last
day of the immediately preceding Fiscal Quarter (with adjustments to become
effective on the date of receipt by the Administrative Agent of the most recent
financial statements of the Borrowers required to be furnished to the Banks
under Section 7.8; provided, however, that in the event that the Borrowers fail
to furnish such financial statements to the Banks on a timely basis under
Section 7.8, such rate per annum during the continuance of such failure until
such financial statements are so delivered shall be the highest rate per annum
set forth below). The facility fee shall be calculated in each case on the basis
of a year of 360 days for the actual number of days elapsed. The accrued
facility fee shall be due and payable in arrears upon any reduction or
termination of the Revolving Credit Commitment and on the last business day of
each fiscal quarter, commencing on the first such date after the Closing Date:
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------------------------------------------------------------------------
Consolidated Average Funded Debt to
EBITDA Ratio Facility Fee
------------------------------------------------------------------------
Less than 1.50 20 basis points
------------------------------------------------------------------------
Greater than or equal to 1.50, but less
than 2.00 22.5 basis points
------------------------------------------------------------------------
Greater than or equal to 2.00, but less
than 2.50 25 basis points
------------------------------------------------------------------------
Greater than or equal to 2.50, but less
than 3.00 27.5 basis points
------------------------------------------------------------------------
Greater than or equal to 3.00 30 basis points
------------------------------------------------------------------------
(b) The Borrowers shall pay to the Administrative
Agent an agency fee of Twenty Five Thousand Dollars ($25,000) per year or part
thereof payable on the Closing Date and each anniversary of the Closing Date,
which agency fees shall be deemed fully earned when paid and shall be
non-refundable.
Section 2.15. Payments Generally. All payments under this
Agreement, the Notes and the other Facility Documents shall be made in
immediately available funds in Dollars (except that payments on Eurocurrency
Loans denominated in an Alternative Currency shall be made in such Alternative
Currency) without offset, deduction or withholding of any kind. All payments
shall be made not later than 11:00 a.m. (New York, New York, time) on the
relevant dates specified above (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Banking Day) to
an account of the Administrative Agent maintained at the Principal Office for
the account of the applicable Lending Office of each Bank. The Administrative
Agent, or any Bank for whose account any such payment is to be made, may (but
shall not be obligated to) debit the amount of any such payment that is not made
by such time to any ordinary deposit account of the applicable Borrower with the
Administrative Agent or such Bank, as the case may be, and any Bank so doing
shall promptly notify the Administrative Agent. The applicable Borrower shall,
at the time of making each payment under this Agreement, any Note or any other
Facility Document, specify to the Administrative Agent the principal or other
amount payable by such Borrower under this Agreement, such Note or such other
Facility Document to which such payment is to be applied (and in the event that
it fails to so specify, or if a Default or Event of Default has occurred and is
continuing, the Administrative Agent may apply such payment as it may elect in
its sole discretion but subject to Section 12.16). If the due date of any
payment under this Agreement, any Note or any other Facility Document would
otherwise fall on a day which is not a Banking Day, such date shall be extended
to the next succeeding Banking Day and interest shall be payable for any
principal so extended for the period of such extension. Each payment received by
the Administrative Agent hereunder, under any Note or under any other
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Facility Document for the account of a Bank shall be paid promptly to such Bank,
in immediately available funds, for the account of such Bank's applicable
Lending Office.
Section 2.16. Interest Rate Protection. The Borrowers may
enter into Interest Rate Protection Agreements so long as no Default or Event of
Default would result therefrom, including any violation of any of the covenants
contained in Article 9 on a pro forma basis based upon the most recent
calculations delivered to the Banks in accordance with Section 7.8. The
obligations of the Borrowers to a Bank (but not to any other bank or other
financial institution that is not a "Bank" hereunder) under such Interest Rate
Protection Agreements will automatically constitute Obligations of the Borrowers
under this Agreement for so long as such Interest Rate Protection Agreements
remain in effect (regardless of whether the Bank that is a party thereto remains
a party hereto) and will be secured by any Lien granted under the Facility
Documents pari passu with the other Obligations of the Borrowers under this
Agreement.
Section 2.17. European Monetary Unit.
(a) If, as a result of the implementation of the
European economic and monetary union ("EMU"), (i) any currency available for
borrowing under this Agreement (a "National Currency") ceases to be lawful
currency of the state issuing the same and is replaced by a European single or
common currency (the "Euro") or (ii) any National Currency and the Euro are
simultaneously recognized by the central bank or comparable governmental
authority of the state issuing such currency as lawful currency of such state,
then any amount payable hereunder by any party hereto in such National Currency
or any Loan to be made or, in the case of clause (i) above, Letter of Credit to
be issued under this Agreement in such National Currency shall instead be
payable or made or issued in the Euro and the amount so payable or made or
issued shall be determined by redenominating or converting such amount into the
Euro at the exchange rate officially fixed by the European Central Bank for the
purpose of implementing the EMU; provided, however, that to the extent any EMU
legislation provides that an amount denominated either in the Euro or in the
applicable National Currency can be paid either in Euros or in the applicable
National Currency, each party to this Agreement shall be entitled to pay or
repay such amount in Euros or in the applicable National Currency. Prior to the
occurrence of the event or events described in clause (i) or (ii) of the
preceding sentence, each amount payable hereunder in any such National Currency
will, except as otherwise provided herein, continue to be payable only in that
National Currency.
(b) The Borrowers shall from time to time, at the
request of the Administrative Agent, pay to the Administrative Agent for the
account of each Bank the amount of any cost or increased cost incurred by, or of
any reduction in any amount payable or in the effective return on its capital
to, or of interest or other return foregone by, such Bank or any holding company
of such Bank as a result of the introduction of, changeover to, or operation of
the Euro in any applicable state.
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(c) In addition, this Agreement (including, without
limitation, the definition of Fixed Rate) will be amended to the extent
determined by the Administrative Agent (acting reasonably and in consultation
with the Borrowers) to be necessary to reflect such implementation of the EMU
and change in currency and to put the Banks and the Borrowers in the same
position, so far as possible, that each would have been in if such
implementation and change in currency had not occurred. No such implementation
or change in currency nor any economic consequences resulting therefrom shall
(i) give rise to any right to terminate prematurely, contest, cancel, rescind,
alter, modify, or renegotiate the provisions of this Agreement or (ii)
discharge, excuse, or otherwise affect the performance of any obligations of any
of the Borrowers under this Agreement, the Notes, or any other Facility
Document.
ARTICLE 3. LETTERS OF CREDIT
Section 3.1. Letters of Credit.
(a) Subject to the terms and conditions of this
Agreement, in addition to requesting that the Banks make the Term Loans and the
Revolving Loans and that the Swingline Bank make the Swingline Loans, any
Borrower may request, in accordance with the provisions of this Section 3.1(a),
that the Fronting Bank issue Letters of Credit for the account of such Borrower;
provided that (i) no Borrower shall request that the Fronting Bank issue any
Letter of Credit if, after giving effect to such issuance, the Outstandings
Amount would exceed the aggregate of all Revolving Credit Commitments, (ii) in
no event shall the Fronting Bank issue (A) any Letter of Credit having an
expiration date later than the tenth Banking Day prior to the Termination Date,
or (B) any Letter of Credit having an expiration date more than one year after
its date of issuance, and (iii) no Borrower shall request that the Fronting Bank
issue any Letter of Credit if, after giving effect to such issuance, the
aggregate amount of outstanding Letters of Credit Obligations would exceed
$10,000,000 (the "L/C Sublimit"). The issuance of any Letter of Credit in
accordance with the provisions of this Section 3.1(a) shall require the
satisfaction of each condition set forth in Article 5. All Letters of Credit may
be denominated in Dollars or in an Alternative Currency, as requested by the
Borrower.
Immediately upon the issuance of each Letter of
Credit, each Bank shall be deemed to, and hereby agrees to, have irrevocably
agreed to participate with the Fronting Bank in such Letter of Credit and any
drawing thereunder in an amount equal to such Bank's ratable share (determined
in accordance with such Bank's Commitment) of the maximum amount which is or at
any time may become available to be drawn thereunder.
Each Letter of Credit may provide that the Fronting
Bank, with the written consent of the Required Banks, may (but shall not be
required to) pay all or any part of the maximum amount which may at any time be
available for drawing thereunder to the beneficiary thereof upon the occurrence
of an Event of Default and the acceleration of the maturity of the Loans. If
payment is not due to the beneficiary of an outstanding Letter
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of Credit, upon the occurrence of an Event of Default the applicable Borrower
shall deposit immediately available funds in an amount equal to the face amount
of such Letter of Credit in an account or fund a cash collateral account, in the
applicable currency, with the Fronting Bank to secure payment to the beneficiary
under such Letter of Credit. Any funds so deposited or standing to the credit of
such account shall be paid to the beneficiary of such Letter of Credit if
conditions to such payment are satisfied or returned to the Fronting Bank for
distribution to the Banks (or, if all Loans shall have been repaid in full in
cash in the applicable currency, to the applicable Borrower) if no payment to
the beneficiary has been made and the final date available for drawings under
such Letter of Credit has passed. Each payment or distribution of funds by the
Fronting Bank as provided in this paragraph shall be treated for all purposes of
this Agreement as a drawing duly honored by the Fronting Bank under the related
Letter of Credit and each deposit by the Borrower as provided in this paragraph
shall be treated for all purposes of this Agreement as a reimbursement by
Borrower for a portion of such drawing equal to the amount of such deposit.
(b) Whenever a Borrower desires the issuance of a
Letter of Credit, it shall deliver to the Fronting Bank at the Principal Office
a written notice no later than 11:00 a.m. (New York City local time) at least
ten (10) Banking Days prior to the proposed date of issuance. Such notice shall
consist of the form of application and agreement for letters of credit
customarily used by the Fronting Bank, as such document may be amended from time
to time. Promptly after receipt of a notice of desired issuance of a Letter of
Credit, (i) if the conditions set forth in Section 3.1(a) have been satisfied,
the Fronting Bank shall notify each Bank of the proposed issuance and the amount
of each such other Bank's respective participation therein, determined in
accordance with Section 3.1(a); and (ii) if such conditions have not been
satisfied, the Fronting Bank shall notify the applicable Borrower.
(c) In the event of any request for a drawing under
any Letter of Credit by the beneficiary thereof, the Fronting Bank shall give
telephonic notice (promptly confirmed in writing) to the applicable Borrower (x)
confirming receipt of such request and (y) of the date on or before which the
Fronting Bank intends to honor such drawing, and the applicable Borrower shall
reimburse the Fronting Bank on the day on which such drawing is honored under
the applicable Letter of Credit in an amount in Dollars in same day funds equal
to: (i) the amount of such drawing if such drawing is in Dollars or (ii) the
Dollar Equivalent on the date of such drawing of the amount required to be paid
in the Alternative Currency pursuant to the terms of the applicable Letter of
Credit if such drawing is in an Alternative Currency (the "Contract Amount");
provided that, and anything contained in this Agreement to the contrary
notwithstanding, (A) unless the applicable Borrower shall have notified the
Fronting Bank prior to 11:00 a.m. (New York City local time) on the Banking Day
immediately before the date on or before which the Fronting Bank has indicated
that it intends to honor such drawing that the applicable Borrower intends to
reimburse the Fronting Bank for the amount of such drawing with funds other than
the proceeds of Variable Rate Loans, such Borrower shall be deemed to
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have timely given a Notice of Borrowing pursuant to Section 2.11 requesting the
Banks to make Variable Rate Loans on the date on which such drawing is honored
in an amount equal to (x) the amount of such drawing if such drawing is
denominated in Dollars or (y) the Contract Amount if such drawing is not
denominated in Dollars, and (B) subsequent to satisfaction or waiver of the
conditions specified in Article 5, the Banks shall make Variable Rate Loans on
the date on which such drawing is honored, the proceeds of which shall be
applied directly to reimburse the Fronting Bank for the amount of such drawing;
and provided further that if, for any reason, the Fronting Bank does not receive
proceeds of Variable Rate Loans on the date on which such drawing is honored in
an amount equal to the amount of such drawing (or the Contract Amount for any
drawing not denominated in Dollars), the applicable Borrower shall reimburse the
Fronting Bank on the Banking Day immediately following the date of such drawing,
in an amount in Dollars in same day funds equal to the excess of the amount of
such drawing (or the Contract Amount for any drawing not denominated in Dollars)
over the proceeds of such Variable Rate Loans, if any, which are so received,
plus accrued interest on such excess amount at a rate per annum equal to the
Variable Rate; provided that if a Default or Event of Default shall exist and
such Borrower is not, by reason thereof, eligible to borrow Variable Rate Loans,
then interest shall accrue on such amount paid by the Fronting Bank at the
Default Rate.
(d) If a Borrower shall fail to reimburse the
Fronting Bank as provided in Section 3.1(c) in an amount equal to the amount of
any drawing under a Letter of Credit issued by the Fronting Bank and honored by
the Fronting Bank in compliance with the terms of such Letter of Credit and for
any reason Variable Rate Loans are not advanced to the applicable Borrower as
contemplated by Section 3.1(c), the Fronting Bank shall promptly notify each
Bank of the unreimbursed amount of such drawing and of such Bank's pro rata
participation therein. Each Bank shall make available to the Fronting Bank an
amount equal to its pro rata participation in same day funds, at the office of
the Fronting Bank specified in such notice, immediately upon demand of the
Fronting Bank. If any Bank fails to make available to the Fronting Bank the
amount of such Bank's pro rata participation in such Letter of Credit as
provided in this Section 3.1(d), the Fronting Bank shall be entitled to recover
such amount on demand from such Bank together with interest at the Variable
Rate. The Fronting Bank shall distribute to each Bank which has paid all amounts
payable by it under this Section 3.1(d) with respect to any Letter of Credit
issued by the Fronting Bank such Bank's pro rata share of all payments received
by the Fronting Bank from the applicable Borrower in reimbursement of drawings
honored by the Fronting Bank under such Letter of Credit when such payments are
received.
(e) (i) Each Borrower agrees to pay the
Administrative Agent, for the ratable benefit of each of the Banks, a
non-refundable letter of credit fee with respect to each Letter of Credit,
payable in the applicable currency, computed at the rate per annum equal to the
then-applicable Margin for Revolving Loans, calculated on the basis of a year of
360 days for the actual days elapsed, of the face amount of such Letter of
Credit for the stated duration thereof. Such fees shall be payable quarterly in
arrears on the last day of each quarter and shall be nonrefundable.
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(ii) Each Borrower agrees to pay the
Fronting Bank, for its own account, a non-refundable letter of credit fee with
respect to each Letter of Credit, payable in Dollars, computed at the rate per
annum equal to 1/8 of one percent, calculated on the basis of a year of 360 days
for the actual days elapsed, of the face amount of such Letter of Credit for the
stated duration thereof. Such fees shall be payable quarterly in arrears on the
last day of each quarter and shall be nonrefundable.
(iii) Each Borrower further agrees to pay
the Fronting Bank, for its own account, its normal and customary administration,
amendment, transfer, payment and negotiation fees charged in connection with its
issuance and administration of letters of credit.
(f) The obligations of each Borrower to reimburse the
Fronting Bank for drawings made under the Letters of Credit issued by the
Fronting Bank for such Borrower and the obligations of the Banks under Section
3.1(d) shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances and
irrespective of any of the following:
(i) any lack of validity or enforceability
of this Agreement, any Letter of Credit or any other agreement or instrument
relating thereto (this Agreement and all of the other foregoing being,
collectively, the "L/C Related Documents");
(ii) any change in the time, manner or place
of payment of, or in any other term of, all or any of the obligations of the
Borrowers in respect of any L/C Related Document or any other amendment or
waiver of or any consent to departure from all or any of the L/C Related
Documents;
(iii) the existence of any claim, set-off,
defense or other right that the Borrowers may have at any time against any
beneficiary or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Fronting Bank or any
other Person, whether in connection with the transactions contemplated by the
L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document
presented under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(v) payment by the Fronting Bank under a
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms and conditions of such Letter of Credit; or
(vi) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including, without
limitation, any other
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circumstance that might otherwise constitute a defense available to, or a
discharge of, any of the Borrowers.
(g) The face amount of each Letter of Credit shall
not be less than an amount agreed upon between the Fronting Bank and the
Borrower from time to time.
(h) In the event of any conflict between the terms of
any application and agreement for a letter of credit hereunder and the terms of
this Agreement, the terms of this Agreement shall control.
Section 3.2. Cash Collateral Account. If the Commitments are
duly terminated and all amounts owing under this Agreement, the Notes and the
Letters of Credit become due and payable pursuant to Article 10, each Borrower
shall deposit with the Administrative Agent, on the date such obligations become
due and payable, an amount in cash equal to its Letters of Credit Usage as of
such date and the Letter of Credit fees in accordance with Section 3.1(e). Such
amount shall be deposited in a cash collateral account to be established by the
Administrative Agent, for the benefit of the Banks, and shall constitute
collateral security for the Letters of Credit Usage and other amounts owing by
such Borrower hereunder. All amounts in such cash collateral account shall be
maintained pursuant to a cash collateral account agreement which shall grant to
the Administrative Agent exclusive dominion and control (including exclusive
rights of withdrawal) over all such amounts and shall be otherwise satisfactory
in form and substance to the Administrative Agent.
ARTICLE 4. YIELD PROTECTION; ILLEGALITY; ETC.
Section 4.1. Additional Costs.
(a) The Borrowers shall pay directly to each Bank
from time to time on demand such amounts as such Bank may determine to be
necessary to compensate it for any costs which such Bank determines are
attributable to its making or maintaining any Eurocurrency Loans or Letters of
Credit Usage under this Agreement or the Notes or its obligation to make any
such Loans or issue or participate in Letters of Credit hereunder, or any
reduction in any amount receivable by such Bank hereunder in respect of any such
Loans or Letters of Credit Usage or such obligations (such increases in costs
and reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change which: (i) subjects such Bank (or its
applicable Lending Office) to any tax, duty or other charge or changes the basis
of taxation of any amounts payable to such Bank under this Agreement or the
Notes in respect of any of such Loans or Letters of Credit Usage (other than
taxes imposed on the overall net income of such Bank or of its Lending Office
for any of such Loans or Letters of Credit Usage by the jurisdiction in which
such Bank has its principal office or such Lending Office); or (ii) imposes or
modifies any reserve, special deposit, deposit insurance or assessment, minimum
capital,
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capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Bank
(including any of such Loans or Letters of Credit Usage or any deposits referred
to in the definition of "Fixed Base Rate" in Section 1.1); or (iii) imposes any
other condition affecting this Agreement or the Notes or the Letters of Credit
(or any of such extensions of credit or liabilities). Each Bank will notify the
Borrowers of any event occurring after the date of this Agreement which will
entitle such Bank to compensation pursuant to this Section 4.1(a) as promptly as
practicable after it obtains knowledge thereof and determines to request such
compensation. If any Bank requests compensation from the Borrower under this
Section 4.1(a), or under Section 4.1(c), the Borrower may, by notice to such
Bank (with a copy to the Administrative Agent), require that such Bank's Loans
of the type with respect to which such compensation is requested be converted in
accordance with Section 4.4.
(b) Without limiting the effect of the foregoing
provisions of this Section 4.1, in the event that, by reason of any Regulatory
Change, any Bank either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Bank which includes deposits by reference to which the
interest rate on Eurocurrency Loans is determined as provided in this Agreement
or a category of extensions of credit or other assets of such Bank which
includes Eurocurrency Loans or (ii) becomes subject to restrictions on the
amount of such a category of liabilities or assets which it may hold, then, if
such Bank so elects by notice to the Borrower (with a copy to the Administrative
Agent), the obligation of such Bank to make or renew, and to convert Loans of
any other type into, Loans of such type hereunder shall be suspended until the
date such Regulatory Change ceases to be in effect (and all Loans of such type
held by such Bank then outstanding shall be converted in accordance with Section
4.4).
(c) Without limiting the effect of the foregoing
provisions of this Section 4.1 (but without duplication), the Borrower shall pay
directly to each Bank from time to time on request such amounts as such Bank may
determine to be necessary to compensate such Bank for any costs which it
determines are attributable to the maintenance by it or any of its affiliates
pursuant to any law or regulation of any jurisdiction or any interpretation,
directive or request (whether or not having the force of law and whether in
effect on the date of this Agreement or thereafter) of any court or governmental
or monetary authority of capital in respect of its Loans hereunder or its
obligation to make Loans hereunder or its Letters of Credit Usage hereunder or
its obligations to issue or participate in Letters of Credit or drawings
thereunder (such compensation to include, without limitation, an amount equal to
any reduction in return on assets or equity of such Bank to a level below that
which it could have achieved but for such law, regulation, interpretation,
directive or request). Each Bank will notify the Borrower if it is entitled to
compensation pursuant to this Section 4.1(c) as promptly as practicable after it
determines to request such compensation.
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(d) Determinations and allocations by a Bank for
purposes of this Section 4.1 of the effect of any Regulatory Change pursuant to
subsections (a) or (b), or of the effect of capital maintained pursuant to
subsection (c), on its costs of making or maintaining Loans or Letters of Credit
Usage or its obligation to make Loans or issue or participate in Letters of
Credit, or on amounts receivable by, or the rate of return to, it in respect of
Loans or Letters of Credit Usage or such obligation, and of the additional
amounts required to compensate such Bank under this Section 4.1, shall be
conclusive, provided that such determinations and allocations are made on a
reasonable basis. Each Bank will notify the Borrower of such determinations,
allocations and additional amounts, the basis therefor and the calculations
thereof, as promptly as practicable after it determines to request such
compensation.
Section 4.2. Limitation on Types of Loans. Anything herein
to the contrary notwithstanding, if:
(a) the Administrative Agent determines (which
determination shall be conclusive) that quotations of interest rates for the
relevant deposits referred to in the definition of "Fixed Base Rate" in Section
1.1 are not being provided in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for any type of
Eurocurrency Loans as provided in this Agreement; or
(b) the Required Banks determine (which determination
shall be conclusive) and notify the Administrative Agent that the relevant rates
of interest referred to in the definition of "Fixed Base Rate" in Section 1.1
upon the basis of which the rate of interest for any type of Eurocurrency Loans
is to be determined do not adequately cover the cost to the Banks of making or
maintaining such Loans; or
(c) in the case of Eurocurrency Loans denominated in
an Alternative Currency, any Bank shall determine (which determination shall be
conclusive) and notify the Administrative Agent that the relevant Alternative
Currency is not available in the relevant amounts or for the relevant period, or
that a change in national or international controls has occurred which would, in
the opinion of such Bank, make it impracticable for such Bank to make, fund or
maintain its Eurocurrency Loans to be made in such Alternative Currency or for
such Borrower to pay the principal of or interest on such Eurocurrency Loans as
provided in this Agreement;
then the Administrative Agent shall give the
Borrowers and each Bank prompt notice thereof, and so long as such condition
remains in effect, the Banks shall be under no obligation to make or renew Loans
of such type or to convert Loans of any other type into Loans of such type and
the Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Loans of the affected type, either prepay such Loans or
convert such Loans into another type of Loans in accordance with Section 2.8.
Section 4.3. Illegality. Notwithstanding any other provision
in this Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending
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Office to honor its obligation to make, maintain or renew Eurocurrency Loans in
any currency hereunder or convert Variable Rate Loans or Eurocurrency Loans in a
different currency to Eurocurrency Loans in such currency, then such Bank shall
promptly notify the Borrower thereunder (with a copy to the Administrative
Agent) and such Bank's obligation to make or renew affected Eurocurrency Loans
and to convert Variable Rate Loans or unaffected Eurocurrency Loans into
affected Eurocurrency Loans hereunder shall be suspended until such time as such
Bank may again make, renew, or convert and maintain such affected Eurocurrency
Loans and such Bank's outstanding affected Eurocurrency Loans, as the case may
be, shall be converted in accordance with Section 4.4.
Section 4.4. Certain Conversions Pursuant to Sections 4.1 and
4.3. If the Loans of any Bank of a particular type (Loans of such type being
herein called "Affected Loans" and such type being herein called the "Affected
Type") are to be converted pursuant to Section 4.1 or 4.3, such Bank's Affected
Loans shall be automatically converted into Variable Rate Loans on the last
day(s) of the then current Interest Period(s) for the Affected Loans (or, in the
case of a conversion required by Section 4.1(b) or 4.3, on such earlier date as
such Bank may specify to the Borrower with a copy to the Administrative Agent)
and, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 4.1 or 4.3 which gave rise to such conversion
no longer exist:
(a) to the extent that such Bank's Affected Loans
have been so converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Affected Loans shall be applied instead to
its Variable Rate Loans;
(b) all Loans which would otherwise be made or
renewed by such Bank as Loans of the Affected Type shall be made instead as
Variable Rate Loans and all Loans of such Bank which would otherwise be
converted into Loans of the Affected Type shall be converted instead into (or
shall remain as) Variable Rate Loans; and
(c) if Loans of other Banks of the Affected Type are
subsequently converted into Loans of another type (other than Variable Rate
Loans), such Bank's Variable Rate Loans shall be automatically converted on the
conversion date into Loans of such other type to the extent necessary so that,
after giving effect thereto, all Loans held by such Bank and the Banks whose
Loans are so converted are held pro rata (as to principal amounts, types and
Interest Periods) in accordance with their respective Commitments.
If such Bank gives notice to the Borrower (with a
copy to the Administrative Agent) that the circumstances specified in Section
4.1 or 4.3 which gave rise to the conversion of such Bank's Affected Loans
pursuant to this Section 4.4 no longer exist (which such Bank agrees to do
promptly upon such circumstances ceasing to exist) at a time when Loans of the
Affected Type are outstanding, such Bank's Variable Rate Loans shall be
automatically converted, on the first day(s) of the next succeeding Interest
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Period(s) for such outstanding Loans of the Affected Type to the extent
necessary so that, after giving effect thereto, all Loans held by the Banks
holding Loans of the Affected Type and by such Bank are held pro rata (as to
principal amounts, types and Interest Periods) in accordance with their
respective Commitments.
Section 4.5. Certain Compensation. Each Borrower shall pay to
the Administrative Agent for the account of each Bank, upon the request of such
Bank through the Administrative Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense which such Bank determines is attributable to:
(a) any payment, prepayment, conversion or renewal of
a Eurocurrency Loan or a Swingline Loan made by such Bank or the Swingline Bank,
as applicable, at the direction of Borrower or as otherwise permitted herein,
which payment, prepayment, conversion or renewal is on a date other than the
last day of an Interest Period for such Loan (whether by reason of acceleration
or otherwise); or
(b) any failure by the Borrower to borrow, convert
into or renew a Eurocurrency Loan or a Swingline Loan to be made, converted into
or renewed by such Bank or the Swingline Bank, as applicable, on the date
specified therefor in the relevant notice under Section 2.7, 2.8 or 2.9, as the
case may be.
Without limiting the foregoing, such compensation
shall include an amount equal to the excess, if any, of: (i) the amount of
interest which otherwise would have accrued on the principal amount so paid,
prepaid, converted or renewed or not borrowed, converted or renewed for the
period from and including the date of such payment, prepayment or conversion or
failure to borrow, convert or renew to but excluding the last day of the then
current Interest Period for such Loan (or, in the case of a failure to borrow,
convert or renew, to but excluding the last day of the Interest Period for such
Loan which would have commenced on the date specified therefor in the relevant
notice) at the applicable rate of interest for such Loan provided for herein;
over (ii) the amount of interest (as reasonably determined by such Bank) such
Bank would have bid in the London interbank market for deposits in the relevant
currencies of leading banks for amounts comparable to such principal amount and
maturities comparable to such period. A determination of any Bank as to the
amounts payable pursuant to this Section 4.5 shall be conclusive absent manifest
error.
Section 4.6. Taxes. Each Borrower covenants and agrees that:
(a) All payments on account of the principal of and
interest on its Loans and the Notes, and all other amounts payable by such
Borrower hereunder, under any Note or under any other Facility Document,
including without limitation amounts payable with respect to any Letter of
Credit or under Section 4.6(b), shall be made without any set-off or
counterclaim and free and clear of and without reduction by reason of, all
present and future income, stamp, registration and other taxes and levies,
imposts,
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deductions, charges, compulsory loans and withholdings whatsoever (other than
taxes imposed on the overall net income of any Bank, or of its applicable
Lending Office, by the jurisdiction in which such Bank's principal office or its
applicable Lending Office is located), and all interest, penalties or similar
amounts with respect thereto, now or hereafter imposed, assessed, levied or
collected by any country or any political subdivision or taxing authority
thereof or therein or by any federation or association of or with which any
country may be a member or associated or by any jurisdiction from which any
payment hereunder or under any Note is made or any taxing authority thereof or
therein, on or in respect of this Agreement, the Loans, any Note, any other
Facility Document, the recording, registration, notarization or other
formalization of any thereof, the enforcement thereof or the introduction
thereof in any judicial proceedings, or on or in respect of any payments of
principal, interest, premiums, charges, fees or other amounts made on, under or
in respect of any thereof (hereinafter called "Taxes"), all of which will be
paid by such Borrower, for its own account, prior to the date on which penalties
attach thereto;
(b) Such Borrower shall indemnify each Bank against,
and reimburse each Bank on demand for, any Taxes and any loss, liability, claim
or expense, including interest, penalties and reasonable legal fees (net of any
refunds or tax credits for such Taxes which such Bank shall actually receive or
utilize), which such Bank may incur at any time arising out of or in connection
with any failure of such Borrower to make any payments of Taxes when due;
(c) In the event that such Borrower is required by
applicable law, decree or regulation to deduct or withhold Taxes from any
amounts payable to any Bank on, under or in respect of this Agreement, the
Loans, any Note or any other Facility Document, such Borrower shall pay to such
Bank such additional amount(s) as may be required, after the deduction or
withholding of Taxes, to enable such Bank to receive from such Borrower an
amount equal to the amount stated to be payable by such Borrower to such Bank
under this Agreement, its Note held by such Bank or under any other Facility
Document;
(d) Such Borrower shall furnish to each Bank the
official tax receipts in respect of each payment of Taxes required under this
Section 4.6 within 30 days after the date such payment is due pursuant to
applicable law, and such Borrower shall promptly furnish to each Bank at its
request any other information, documents and receipts that such Bank may, in its
reasonable discretion from time to time, require to establish to its
satisfaction that full and timely payment has been made of all Taxes required to
be paid under this Section 4.6; and
(e) In the event that the payments by such Borrower
hereunder which are subject to the payment of Taxes subsequently become exempt
from or not subject to Taxes, such Borrower will, upon the reasonable request of
any Bank, furnish to such Bank either a certificate from each appropriate taxing
authority or an opinion of
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counsel reasonably acceptable to such Bank, in either case stating that payments
hereunder are exempt from or not subject to Taxes.
ARTICLE 5. CONDITIONS PRECEDENT.
Section 5.1. Documentary Conditions Precedent. This Agreement
shall become effective when, and only when, the Administrative Agent shall have
received on or before the date of effectiveness each of the following, in form
and substance satisfactory to the Administrative Agent and its counsel:
(a) the Notes duly executed by the respective
Borrowers;
(b) the Authorization Letter duly executed by the
Borrowers;
(c) the Security Agreement duly executed by the
Borrowers together with (i) confirmation of the filing of financing statements
(UCC-1) duly filed under the Uniform Commercial Code (or other satisfactory
evidence that such statements have been filed prior to the Closing Date) of all
jurisdictions necessary or, in the opinion of the Administrative Agent or any
Bank, desirable to perfect the security interest created by the Security
Agreement; and (ii) certified copies of requests for information (Form UCC-11)
identifying all of the financing statements on file with respect to the
Borrowers in all jurisdictions referred to under (i), indicating that no party
claims an interest in any of the Collateral (as defined in the Security
Agreement), other than interests permitted under the terms of this Agreement;
(d) the Trademark Agreement duly executed by
Cannondale;
(e) the Subsidiary Pledge Agreement duly executed by
Cannondale;
(f) a Phase I Environmental Site Assessment and an
MAI appraisal, both in form and content acceptable to the Administrative Agent,
in its sole discretion, with respect to the Bethel Mortgaged Property ;
(g) the Bethel Mortgages duly executed by Cannondale,
together with executed financing statements and fixture filings (UCC-1) to be
filed under the Uniform Commercial Code of all jurisdictions necessary or, in
the opinion of the Administrative Agent, desirable to perfect the security
interests created by the Mortgages;
(h) title insurance policies with respect to the
Bethel Mortgaged Property issued by a title insurance company acceptable to the
Administrative Agent;
(i) a current as-built survey of the Bethel Mortgaged
Property, certified to the Borrowers, the Administrative Agent and the title
company;
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(j) a certificate of occupancy for the Bethel
Mortgaged Property;
(k) a favorable opinion of Xxxxxx Xxxx & Xxxxxx LLP,
counsel for the Borrowers, dated the Closing Date, in substantially the form of
Exhibit K and as to such other matters as the Administrative Agent or any Bank
may reasonably request;
(l) a favorable opinion of foreign local counsel for
such Subsidiary Borrower, dated the Closing Date, in form and substance
satisfactory to the Administrative Agent;
(m) a certificate of the Secretary, Assistant
Secretary or other appropriate officer of each of the Borrowers, dated the
Closing Date, (i) attesting to all corporate action taken by each of the
Borrowers, including resolutions of its Board of Directors authorizing the
execution, delivery and performance of the Facility Documents to which it is a
party and each other document to be delivered pursuant to this Agreement, (ii)
certifying the names and true signatures of the officers of each of the
Borrowers authorized to sign the Facility Documents to which it is a party and
the other documents to be delivered by such Borrowers under this Agreement and
(iii) verifying that the charter and by-laws (or other analogous documents) of
such Borrower attached thereto are true, complete and correct as of the date
thereof;
(n) certificates to the good standing or subsistence
(or other analogous certificates) and certified copies of all charter documents
with respect to each of the Borrowers certified by the Secretary of State (or
other appropriate Governmental Authority) of its jurisdiction of incorporation
and every other jurisdiction in which it does business;
(o) a certificate of the chief financial officer or
assistant treasurer of Cannondale setting forth (i) computations demonstrating
compliance with the covenants contained in Article 9 as determined as of the
last day of the immediately preceding Fiscal Quarter and (ii) the computation of
the Consolidated Average Funded Debt to EBITDA Ratio as determined as of the
last day of the immediately preceding Fiscal Quarter (for Margin and facility
fee purposes);
(p) Federal Reserve Forms U-1 provided for in
Regulation U issued by the Board of Governors of the Federal Reserve System, the
statements made in which shall be such, in the opinion of the Administrative
Agent, as to permit the transactions contemplated hereby in accordance with said
Regulation U;
(q) payment by the Borrowers to the Agents of all
expenses and fees incurred by the Agents in connection with the negotiation,
execution and delivery of the Facility Documents and the syndication of the
Loans, including legal fees;
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(r) absence of any change in market conditions which,
in the Administrative Agent's opinion, would materially impair a financial
institution's ability to fund Loans of this type;
(s) certificates of insurance (XXXXX Form 27)
evidencing casualty and liability insurance policies in conformity with the
requirements of the Security Agreement, the Bethel Mortgages and Section 7.5 of
this Agreement and naming the Administrative Agent as loss payee, mortgagee and
additional insured, as appropriate;
(t) the Collateral Assignment of Shareholder Note and
the Collateral Assignment of Officer Note, each duly executed by Cannondale,
together with proper endorsement and delivery of the original promissory notes
collaterally assigned thereunder and duly executed consents to assignment in the
forms attached thereto;
(u) assignments of all collateral securing the
promissory notes referenced in subsection 5.1(t) above, including the Collateral
Assignment of Shareholder Mortgage; and
(v) the Closing Agreement substantially in the form
of Exhibit L duly executed by Cannondale.
Section 5.2. Additional Conditions Precedent. The obligations
of the Banks to make any Loans pursuant to a Borrowing that increase the amount
outstanding hereunder (including the initial Borrowing) and of the Fronting Bank
to issue any Letters of Credit shall be subject to the further conditions
precedent that, on the date of such Loans or the issuance of such Letters of
Credit:
(a) the following statements shall be true:
(i) the representations and warranties
contained in Article 6 herein and in each of the other Facility Documents are
true and correct on and as of the date of such Loans or the issuance of such
Letters of Credit as though made on and as of such date;
(ii) no Default or Event of Default has
occurred and is continuing, or would result from such Loans or the issuance of
such Letters of Credit; and
(iii) there has been no material adverse
change in the business, management, operations, properties, prospects or
condition (financial or otherwise) of the Borrowers or their respective
Subsidiaries since the Closing Date;
(b) the relevant Borrower shall have delivered to the
Administrative Agent or the Fronting Agent, as the case may be, a Notice of
Borrowing substantially in the form of Exhibit M;
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(c) in the case of the initial Borrowing by
Cannondale Japan K.K., an additional favorable opinion of foreign local counsel
for Cannondale Japan K.K., dated as of the date of such Loan or issuance of such
Letters of Credit, in form and substance satisfactory to the Administrative
Agent;
(d) for each loan to or issuance of Letters of Credit
on behalf of Cannondale Japan K.K., the Administrative Agent shall have received
a certificate of the Secretary or Assistant Secretary of Cannondale Japan K.K.,
dated as of or prior to the date of such Loan or issuance of such Letter of
Credit, attesting to all necessary corporate action taken by Cannondale Japan
K.K., including resolutions of its Board of Directors authorizing such Borrowing
or request for issuance of such Letters of Credit;
(e) the Administrative Agent shall have received such
independent appraisals, audits and valuations of assets satisfactory to the
Administrative Agent as the Administrative Agent may reasonably request; and
(f) the Administrative Agent shall have received such
approvals, opinions or documents as the Administrative Agent or any Bank may
reasonably request.
Section 5.3. Deemed Representations. Each Notice of Borrowing
or request for the issuance of a Letter of Credit hereunder and acceptance by
any Borrower of the proceeds of such Borrowing or the benefit of such Letter of
Credit shall constitute a representation and warranty that the statements
contained in Section 5.2 are true and correct both on the date of such notice
and, unless such Borrower otherwise notifies the Administrative Agent prior to
such Borrowing or issuance, as of the date of such Borrowing or issuance.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers hereby represents and warrants that:
Section 6.1. Incorporation, Good Standing and Due
Qualification. Each Borrower and each of its respective Subsidiaries is a
corporation duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which such qualification is required.
Section 6.2. Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by each Borrower of the Facility Documents
to which it is a party have been duly authorized by all necessary corporate
action and do not and will not: (a) require any consent or approval of its
stockholders; (b) contravene its charter or by-laws; (c) violate any provision
of, or require any filing, registration, consent or approval
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under, any law, rule, regulation (including, without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to such Borrower or any of its Subsidiaries or
Affiliates; (d) result in a breach of or constitute a default or require any
consent under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which such Borrower is a party or by which it or its
properties may be bound or affected; (e) result in, or require, the creation or
imposition of any Lien (other than as created under the Security Agreement or
the other Collateral Documents), upon or with respect to any of the properties
now owned or hereafter acquired by such Borrower; or (f) cause such Borrower (or
any Subsidiary or Affiliate, as the case may be) to be in default under any such
law, rule, regulation, order, writ, judgment, injunction, decree, determination
or award or any such indenture, agreement, lease or instrument.
Section 6.3. Legally Enforceable Agreements. Each Facility
Document to which any Borrower is a party is, or when delivered under this
Agreement will be, a legal, valid and binding obligation of such Borrower
enforceable against such Borrower in accordance with its terms, except to the
extent that such enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
Section 6.4. Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of any Borrower, threatened, against or
affecting the Borrowers or any of their respective Subsidiaries before any
court, governmental agency or arbitrator, which may, in any one case or in the
aggregate, materially adversely affect the financial condition, operations,
properties or business of any Borrower or any such Subsidiary or of the ability
of any Borrower to perform its obligations under the Facility Documents to which
it is a party.
Section 6.5. Financial Statements. The consolidated balance
sheet of Cannondale and its Consolidated Subsidiaries as of June 27, 1998, and
the related consolidated statements of earnings, cash flows and stockholders'
equity of Cannondale and its Consolidated Subsidiaries for the Fiscal Year then
ended, and the accompanying footnotes, together with the opinion thereon, of
Ernst & Young LLP, independent certified public accountants, and the interim
consolidated balance sheet of Cannondale and its Consolidated Subsidiaries as of
September 26, 1998, and the related consolidated statements of earnings, cash
flows and stockholders' equity for the three-month period then ended, copies of
which have been furnished to each of the Banks, fairly present the financial
condition of Cannondale and its Consolidated Subsidiaries as of such dates and
the results of the operations of Cannondale and its Consolidated Subsidiaries
for the periods covered by such statements, all in accordance with GAAP
consistently applied (subject to year end adjustments in the case of the interim
financial statements). There are no liabilities of Cannondale or any of its
Consolidated Subsidiaries, fixed or contingent, which are material but are not
reflected in the financial statements or in the notes thereto and which, in
accordance with GAAP, are required to be so reflected, other than liabilities
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arising in the ordinary course of business since June 27, 1998. No information,
exhibit or report furnished by the Borrowers to the Administrative Agent or any
Bank in connection with the negotiation of this Agreement contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially misleading. Since June
27, 1998, there has been no material adverse change in the condition (financial
or otherwise), business, operations or prospects of any Borrower or any of its
Subsidiaries.
Section 6.6. Ownership and Liens. Each of the Borrowers and
each of their respective Subsidiaries has title to, or valid leasehold interests
in, all of its properties and assets, real and personal, including the
properties, assets, and leasehold interests reflected in the financial
statements referred to in Section 6.5 (other than any properties or assets
disposed of in the ordinary course of business), and none of the properties and
assets owned by the Borrowers or any of their respective Subsidiaries and none
of its leasehold interests is subject to any Lien, except as disclosed in such
financial statements or as may be permitted hereunder and except for any Lien
created by any of the Collateral Documents.
Section 6.7. Taxes. Each of the Borrowers and each of their
respective Subsidiaries has filed all tax returns (federal, state and local)
required to be filed and has paid all taxes, assessments and governmental
charges and levies thereon to be due, including interest and penalties, other
than those being contested in good faith and by appropriate proceedings and as
to which appropriate reserves are being maintained in accordance with GAAP. The
federal income tax liability of Cannondale has been audited by the Internal
Revenue Service and has been finally determined and satisfied for all taxable
years up to and including the taxable year ended 1994.
Section 6.8. ERISA. Each Plan, and, to the best knowledge of
the Borrowers, each Multiemployer Plan, is in compliance in all material
respects with, and has been administered in all material respects in compliance
with, the applicable provisions of ERISA, the Code and any other applicable
Federal or state law, and no event or condition is occurring or exists
concerning which the Borrower would be under an obligation to furnish a report
to the Banks in accordance with Section 7.8(h) hereof. As of the most recent
valuation date for each Plan, each Plan was "fully funded", which for purposes
of this Section 6.8 shall mean that the fair market value of the assets of the
Plan is not less than the present value of the accrued benefits of all
participants in the Plan, computed on a Plan termination basis. To the best
knowledge of the Borrowers, no Plan has ceased being fully funded as of the date
these representations are made with respect to any Loan under this Agreement.
Section 6.9. Subsidiaries and Ownership of Stock. Schedule 6.9
is a complete and accurate list of the Subsidiaries of each Borrower, showing
the jurisdiction of incorporation or organization of each Subsidiary and showing
the percentage of such Borrower's ownership of the outstanding stock or other
interest of each such Subsidiary.
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All of the outstanding capital stock or other interest of each such Subsidiary
has been validly issued, is fully paid and nonassessable and is owned by such
Borrower free and clear of all Liens, other than Liens created by the Pledge
Agreement and the Subsidiary Pledge Agreement.
Section 6.10. Credit Arrangements. Schedule 6.10 is a complete
and correct list of all credit agreements, indentures, purchase agreements,
guaranties, Capital Leases and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of credit (including
agreements and arrangements for the issuance of letters of credit or for
acceptance financing) in excess of $500,000 in respect of which any Borrower or
any of its Subsidiaries is in any manner directly or contingently obligated; and
the maximum principal or face amounts of the credit in question, outstanding and
which can be outstanding, are correctly stated, and all Liens of any nature
given or agreed to be given as security therefor are correctly described or
indicated in such Schedule.
Section 6.11. Operation of Business. Each of the Borrowers and
each of their respective Subsidiaries possesses all material licenses, permits,
franchises, patents, copyrights, trademarks and trade names, or rights thereto,
to conduct its business substantially as now conducted and as presently proposed
to be conducted, and neither such Borrower nor any of its Subsidiaries is in
violation of any valid rights of others with respect to any of the foregoing
and, except as set forth in Schedule 6.11, neither such Borrower nor any of its
Subsidiaries has received any notice or other written communications alleging
that any such party has violated any rights of others with respect to any of the
foregoing.
Section 6.12. Hazardous Materials. Each of the Borrowers and
each of their respective Subsidiaries have obtained all permits, licenses and
other authorizations which are required under all Environmental Laws, except to
the extent failure to have any such permit, license or authorization would not
have a material adverse effect on the consolidated financial condition,
operations, business or prospects of such Borrower and its Consolidated
Subsidiaries. Each Borrower and its Subsidiaries are in compliance with the
material terms and conditions of all such permits, licenses and authorizations,
and are also in compliance with all other limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued, entered,
promulgated or approved thereunder, except to the extent failure to comply would
not have a material adverse effect on the consolidated financial condition,
operations, business or prospects of such Borrower and its Consolidated
Subsidiaries.
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In addition, except as set forth in Schedule 6.12 hereto:
(a) No notice, notification, demand, request for
information, citation, summons or order has been issued, no complaint has been
filed, no penalty has been assessed and no investigation or review is pending or
threatened by any governmental or other entity with respect to any alleged
failure by any Borrower or any of its Subsidiaries to have any permit, license
or authorization required in connection with the conduct of the business of such
Borrower or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, release or disposal, or any
release as defined in 42 U.S.C. 9601(22) ("Release"), of any substance regulated
under Environmental Laws ("Hazardous Materials") generated by such Borrower or
any of its Subsidiaries.
(b) None of each Borrower and its respective
Subsidiaries has manufactured, treated, moved, stored, used, released,
discharged or disposed of any Hazardous Material, other than as a generator, on
any property now or previously owned or leased by such Borrower or any of its
Subsidiaries to an extent that it has, or may reasonably be expected to have, a
material adverse effect on the consolidated financial condition, operations,
business or prospects taken as a whole of such Borrower and its Consolidated
Subsidiaries; and
(i) no PCB is or has been present at any
property now or previously owned or leased by any Borrower of any of its
Subsidiaries;
(ii) no asbestos is or has been present at
any property now or previously owned or leased by any Borrower or any of its
Subsidiaries;
(iii) there are no underground storage tanks
for Hazardous Materials, active or abandoned, at any property now or previously
owned or leased by any Borrower of any of its Subsidiaries;
(iv) no Hazardous Materials have been
Released, in a reportable quantity, where such a quantity has been established
by statute, ordinance, rule, regulation or order, at, on or under any property
now or previously owned by any Borrower or any of its Subsidiaries.
(c) None of any Borrower and its Subsidiaries has
transported or arranged for the transportation of any Hazardous Material to any
location which is listed on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), listed for possible inclusion on the National Priorities List by the
Environmental Protection Agency in the
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Comprehensive Environmental Response and Liability Information System as
provided by 40 C.F.R. 300.5 ("CERCLIS") or on any similar state list or which is
the subject of federal, state or local enforcement actions or other
investigations which may lead to claims against such Borrower or any of its
Subsidiaries for clean-up costs, remedial work, damages to natural resources or
for personal injury claims, including, but not limited to, claims under CERCLA.
(d) No Hazardous Material generated by any Borrower
or any of its Subsidiaries has been recycled, treated, stored, disposed of or
Released by such Borrower or any of its Subsidiaries at any location other than
those listed in Schedule 6.12 hereto.
(e) No oral or written notification of a Release of a
Hazardous material has been filed by or on behalf of any Borrower or any of its
Subsidiaries and no property now or previously owned or leased by such Borrower
or any of its Subsidiaries is listed or proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, on CERCLIS or on any similar
state list of sites requiring investigation or clean-up.
(f) There are no Liens arising under or pursuant to
any Environmental Laws on any of the real property or properties owned or leased
by any Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such properties to such Liens
and neither such Borrower nor any of its Subsidiaries would be required to place
any notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property.
(g) There have been no environmental investigations,
studies, audits, test, reviews or other analyses conducted by or which are in
the possession of any Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by such Borrower or any
of its Subsidiaries which have not been made available to the Banks.
Section 6.13. No Default on Outstanding Judgments or Orders.
Each of the Borrowers and each of their respective Subsidiaries has satisfied
all judgments and neither such Borrower nor any of its Subsidiaries is in
default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court, arbitrator or federal, state, municipal or other
governmental authority, commission, board, bureau, agency or instrumentality,
domestic or foreign.
Section 6.14. No Defaults on Other Agreements. None of the
Borrowers and their respective Subsidiaries is a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which could have a material adverse effect on
the business, properties, assets, operations or conditions, financial or
otherwise, of such Borrower or any of its Subsidiaries, or the
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ability of such Borrower to carry out its obligations under the Facility
Documents to which it is a party. None of the Borrowers nor any of their
respective Subsidiaries is in default in any material respect in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument material to its business to
which it is a party.
Section 6.15. Labor Disputes and Acts of God. Neither the
business nor the properties of any Borrower or of any of its Subsidiaries are
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance), materially and
adversely affecting such business or properties or the operation of such
Borrower or such Subsidiary.
Section 6.16. Governmental Regulation. None of the Borrowers
and their respective Subsidiaries is subject to regulation under the Public
Utility Holding Company Act of 1935, the Investment Company Act of 1940, the
Interstate Commerce Act, the Federal Power Act or any statute or regulation
limiting its ability to incur indebtedness for money borrowed as contemplated
hereby.
Section 6.17. Full Disclosure. All information heretofore
furnished by any Borrower to the Administrative Agent or any Bank for purposes
of or in connection with this Agreement or any transaction contemplated hereby
is, and all such information hereafter furnished by the Borrowers to the
Administrative Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is stated or certified. The
Borrowers have disclosed to the Banks in writing any and all facts, other than
general economic conditions, which materially and adversely affect or may affect
(to the extent the Borrowers can now reasonably foresee) the business,
operations or financial condition of the Borrowers and their respective
Subsidiaries, taken as a whole, or the ability of any Borrower or any of its
Subsidiaries to perform their respective obligations under this Agreement or any
Note.
Section 6.18. Insurance. The Borrowers maintain through
financially sound and reputable insurers not related to or affiliated with the
Borrowers insurance with respect to its properties and business and against at
least such liabilities, casualties and contingencies and in at least such types
and amounts as is customary in the case of corporations engaged in the same or a
similar business or having similar properties similarly situated. Schedule 6.18
sets forth a complete and correct list and brief description of all insurance
currently maintained by or on respect of each Borrower, setting forth the
identity of the insurance carrier, the type of coverage, the amount of coverage
and the deductible. There are no claims, actions, suits, proceedings against,
arising under or based upon any of such insurance policies except as set forth
in Schedule 6.18. Schedule 6.18 identifies each insurance policy providing for a
retrospective premium adjustment or other change in compensation payable to the
insurer on the basis of claim or loss experience, and describes any liability
any Borrower has in respect of such matters.
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Section 6.19. Intellectual Property. To the best of the
Borrowers' knowledge, each Borrower owns, or is licensed or otherwise has the
right to use, all the material patents, trademarks, service marks, names (trade,
service, fictitious or otherwise), copyrights, technology (including but not
limited to computer programs and software), processes, data bases and other
rights, free from burdensome restrictions, necessary to own and operate its
properties and carry on its business as presently conducted and presently
planned to be conducted without conflict with the rights of others.
Section 6.20. Collateral Documents.
(a) Each of the Pledge Agreement and the Subsidiary
Pledge Agreement is effective to create in favor of the Administrative Agent,
for the ratable benefit of the Banks, a legal, valid and enforceable security
interest in the Pledged Collateral (as defined in each such agreement) and
proceeds thereof and the pledge thereunder constitutes a fully perfected
first-priority Lien on, and security interest in, all right, title and interest
of Cannondale in such Pledged Collateral and the proceeds thereof, in each case
prior and superior in right to any other Person, except that the pledge of the
shares of Cannondale Australia Pty Limited pursuant to the Subsidiary Pledge
Agreement may be unenforceable in Australia unless and until the New South
Wales, Australia, stamp tax is paid.
(b) The Security Agreement is effective to create in
favor of the Administrative Agent, for the ratable benefit of the Banks, a
legal, valid and enforceable security interest in the Collateral (as defined in
the Security Agreement) and proceeds thereof, securing the payment of the
Obligations, and when (i) financing statements in appropriate form are filed in
the offices specified on Schedule 2.3 thereto, (ii) possession of any Collateral
thereunder, the possession of which is required to lawfully perfect a security
interest therein, is in the possession of the Administrative Agent, and (iii)
the Trademark Agreement is filed with the United States Patent and Trademark
Office and the United States Copyright Office, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of Cannondale in such Collateral (other than vehicles) and the
proceeds thereof, prior and superior in right to any other Person other than
with respect to any applicable Liens expressly permitted by Section 8.3 and
Liens set forth on Schedule 2.2 thereto.
(c) The Bethel Mortgages are effective to create in
favor of the Administrative Agent, for the ratable benefit of the Banks, a
legal, valid and enforceable Lien on all of Cannondale's right, title and
interest in and to the Bethel Mortgaged Property thereunder and the proceeds
thereof, and, when the Bethel Mortgages are filed in the appropriate offices
with respect to the Bethel Mortgaged Property, the Bethel Mortgages shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of Cannondale in such Bethel Mortgaged Property and the proceeds
thereof, in each case prior and superior in right to any other Person other than
with respect to rights of Persons pursuant to any applicable Liens expressly
permitted by Section 8.3.
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(d) The Collateral Assignment of Shareholder Note and
the Collateral Assignment of Shareholder Mortgage are effective to create in
favor of the Administrative Agent, for the ratable benefit of the Banks, a
legal, valid and enforceable assignment of, transfer of all right, title and
interest of Cannondale in, and security interest in, the promissory notes and
other agreements assigned thereby, and when (i) financing statements in
appropriate form are filed in the appropriate offices, (ii) all Collateral
thereunder, the possession of which is required to lawfully perfect a security
interest therein, is in the possession of the Administrative Agent, and (iii)
the Collateral Assignment of Shareholder Mortgage is recorded in the Office of
the Clerk of Rio Xxxxxx County, State of Colorado, the Collateral Assignment of
Shareholder Note and the Collateral Assignment of Shareholder Mortgage shall
constitute fully perfected Liens on, and security interest in, all right, title
and interest of Cannondale in such promissory notes and other agreements
assigned thereby, in each case prior and superior in right to any other Person.
Section 6.21. Year 2000 Compliance. Cannondale has (i)
initiated a review and assessment of all areas within its and each of its
Subsidiaries' business and operations (including those affected by suppliers,
vendors, and customers) that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by Cannondale, any
of its Subsidiaries, or any of the suppliers, vendors, and customers of
Cannondale or any of its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999); (ii) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, the cost of which plan is not reasonably
expected to have a material adverse effect on Cannondale or on Cannondale Europe
B.V.; and (iii) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, Cannondale believes that all computer
applications used by Cannondale; any of its Subsidiaries; or (based upon the
lack of negative responses to Cannondale's inquiries received through December
31, 1998) any of the suppliers, vendors, and customers of Cannondale or any of
its Subsidiaries that are material to its or any of its Subsidiaries' business
or operations are reasonably expected on a timely basis to be able to perform
properly date-sensitive functions for all dates before and after January 1, 2000
(that is, to be "Year 2000 Compliant"), except to the extent that a failure to
do so could not reasonably be expected to have a material adverse effect on
Cannondale or on Cannondale Europe B.V.
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ARTICLE 7. AFFIRMATIVE COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of
Credit shall remain outstanding or any Bank shall have any Commitment under this
Agreement, each Borrower shall:
Section 7.1. Maintenance of Existence. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence and good standing in the jurisdiction of its incorporation, and
qualify and remain qualified, and cause each of its Subsidiaries to qualify and
remain qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
Section 7.2. Conduct of Business. Continue, and cause each of
its Subsidiaries to continue, to engage in an efficient and economical manner in
a business of the same general type as conducted by it on the date of this
Agreement or in sporting or recreational lines of business.
Section 7.3. Maintenance of Properties. Maintain, keep and
preserve, and cause each of its Subsidiaries to maintain, keep and preserve, all
of its properties (tangible and intangible) necessary or useful in the proper
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
Section 7.4. Maintenance of Records. Keep financial statements
in accordance with GAAP, and keep, and cause each of its Subsidiaries to keep,
other adequate records and books of account in accordance with sound accounting
practices.
Section 7.5. Maintenance of Insurance. Maintain, and cause
each of its Subsidiaries to maintain, insurance with financially sound and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in the same or a similar
business and similarly situated, which insurance may provide for reasonable
deductibility from coverage thereof.
Section 7.6. Compliance with Laws. Comply, and cause each of
its Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property.
Section 7.7. Right of Inspection. At any reasonable time and
from time to time, upon one business day's prior notice, permit the
Administrative Agent or any Bank or any agent or representative thereof, to
examine and make copies and abstracts from the records and books of account of,
and visit the properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers and directors and the
Borrower's independent accountants, and to conduct an audit of the Borrower. If
the Borrower
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reasonably believes that any material interests of the Borrower or any of its
Subsidiaries relating to any non-public, confidential or proprietary information
which could become available to the Administrative Agent or any Bank during the
course of such inspections or such discussions are not adequately protected by
any then existing confidentiality agreements entered into by the Administrative
Agent and the Banks with respect to the Borrower and its Subsidiaries, then any
such visit and examination or discussions shall be performed in compliance with
reasonable and customary security procedures mutually agreeable to the
Administrative Agent and the Banks, as applicable, and the Borrowers.
Section 7.8. Reporting Requirements. Furnish directly to each
of the Banks:
(a) as soon as available and in any event within 90
days after the end of each Fiscal Year of the Borrowers, a consolidated and
consolidating balance sheet of the Borrowers and their Consolidated Subsidiaries
as of the end of such Fiscal Year and consolidated and consolidating statements
of earnings, cash flows and stockholders' equity of the Borrowers and their
Consolidated Subsidiaries for such Fiscal Year, all in reasonable detail and
stating in comparative form the respective consolidated and consolidating
figures for the corresponding date and period in the prior Fiscal Year and, in
the case of such consolidated statements, prepared in accordance with GAAP and
accompanied by an opinion thereon acceptable to the Administrative Agent and
each of the Banks by Ernst & Young LLP or other independent accountants of
national standing selected by the Borrowers;
(b) as soon as available and in any event within 45
days after the end of each of the first three quarters of each Fiscal Year of
the Borrowers, a consolidated and consolidating balance sheet of the Borrowers
and their Consolidated Subsidiaries as of the end of such Fiscal Quarter and
consolidated and consolidating statements of earnings, cash flows and
stockholders' equity, of the Borrowers and their Consolidated Subsidiaries for
the period commencing at the end of the previous Fiscal Year and ending with the
end of such quarter, all in reasonable detail and stating in comparative form
the respective consolidated and consolidating figures for the corresponding date
and period in the previous Fiscal Year and prepared (in the case of the
consolidated statements) in accordance with GAAP and certified by the chief
financial officer of the Borrowers (subject to year-end adjustments);
(c) promptly upon receipt thereof, copies of any
reports, inclusive of any management letters, submitted to the Borrowers or any
of their respective Subsidiaries by independent certified public accountants in
connection with examination of the financial statements of the Borrowers or any
such Subsidiary made by such accountants;
(d) simultaneously with the delivery of the financial
statements referred to above, a certificate substantially in the form of Exhibit
N of the chief financial
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officer of the Borrowers (i) certifying that to the best of his knowledge no
Default or Event of Default has occurred and is continuing or, if a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof and the action which is proposed to be taken with respect thereto, (ii)
with computations demonstrating compliance with the covenants contained in
Articles 8 and 9 and (iii) with computations of the Consolidated Average Funded
Debt to EBITDA Ratio of Cannondale (for Margin and facility fee purposes);
(e) simultaneously with the delivery of the annual
financial statements referred to in Section 7.8(a), a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes a Default or
Event of Default, or if such accountants shall have obtained knowledge of any
such condition or event, specifying in such certificate each such condition or
event of which they have knowledge and the nature and status thereof;
(f) promptly after the commencement thereof, notice
of all actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting any Borrower or any of their respective Subsidiaries which,
if determined adversely to such Borrower or such Subsidiary, could have a
material adverse effect on the financial condition, properties, or operations of
such Borrower or such Subsidiary;
(g) as soon as possible and in any event within 5
days after the occurrence of each Default or Event of Default a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrower with respect thereto;
(h) as soon as possible, and in any event within ten
days after any Borrower knows or has reason to know that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan have
occurred or exist, a statement signed by a senior financial officer of the
Borrowers setting forth details respecting such event or condition and the
action, if any, which the Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrower or an ERISA Affiliate with respect to such event
or condition):
(i) any reportable event, as defined in
Section 4043(b) of ERISA, with respect to a Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Code or Section 302
of ERISA including, without limitation, the failure to make on or before its due
date a required installment under Section 412(m) of the Code or Section 302(e)
of ERISA, shall be a reportable event regardless of the issuance of any
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waivers in accordance with Section 412(d) of the Code) and any request for a
waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of
ERISA of a notice of intent to terminate any Plan or any action taken by the
Borrower or an ERISA Affiliate to terminate any Plan;
(iii) the institution by PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has been taken
by PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from
a Multiemployer Plan by the Borrower or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
of any Borrower or any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a
fiduciary or any Multiemployer Plan against any Borrower or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not dismissed within 30
days;
(vi) the adoption of an amendment to any
Plan that pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA
would result in the loss of tax-exempt status of the trust of which such Plan is
a part if any Borrower or an ERISA Affiliate fails to timely provide security to
the Plan in accordance with the provisions of said Sections;
(vii) any event or circumstance exists which
may reasonably be expected to constitute grounds for any Borrower or any ERISA
Affiliate to incur liability under Title IV of ERISA or under Sections
412(c)(11) or 412(n) of the Code with respect to any Plan; and
(viii) the Unfunded Benefit Liabilities of
one or more Plans increase after the date of this Agreement in an amount which
is material in relation to the financial condition of the Borrowers;
(i) promptly after the request of any Bank, copies of
each annual report filed pursuant to Section 104 of ERISA with respect to each
Plan (including, to the extent required by Section 104 of ERISA, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information referred to in Section 103) and each
annual report filed with respect to each
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Plan under Section 4065 of ERISA; provided, however, that in the case of a
Multiemployer Plan, such annual reports shall be furnished only if they are
available to the Borrower or an ERISA Affiliate;
(j) promptly after the furnishing thereof, copies of
any statement or report furnished to any other party pursuant to the terms of
any Interest Rate Protection Agreement or any indenture, loan or credit or
similar agreement and not otherwise required to be furnished to the Banks
pursuant to any other clause of this Section 7.8;
(k) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any
Borrower or any of its Subsidiaries sends to its stockholders (other than to the
Borrower or a Subsidiary), and copies of all regular, periodic and special
reports, and all registration statements that any Borrower or any such
Subsidiary files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange;
(l) at least ten (10) days prior to consummation of
each Acceptable Acquisition, a certificate of the chief financial officer of
Cannondale to the effect that, on a historical pro forma basis after giving
effect to the Acceptable Acquisition as of and for the twelve-month period
ending on the last day of the most recently completed fiscal quarter, (i) the
Borrowers are in compliance with the terms of this Agreement, (ii) no Default or
Event of Default exists, and (iii) the Borrowers are in compliance with the
financial covenants contained in Article 9. In addition, such certificate shall
demonstrate compliance with such financial covenants contained in Article 9 by
setting forth the calculations thereof;
(m) on a monthly basis as soon as available and in
any event within fifteen (15) days after the end of each calendar month, the
summary aging report with respect to the accounts receivable of the Borrowers
and their Subsidiaries, certified by the chief financial officer or the chief
accounting officer of the Borrowers;
(n) promptly upon receipt thereof, copies of all
notices of default under any promissory note, loan agreement or mortgage entered
into with or in favor of the Connecticut Development Authority, the Connecticut
Department of Economic and Community Development, the Pennsylvania Industrial
Development Authority and the Bedford Development Council; and
(o) such other information respecting the condition
or operations, financial or otherwise, of any Borrower or any of its
Subsidiaries as the Administrative Agent or any Bank may from time to time
reasonably request.
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Section 7.9. Payment of Taxes and Other Potential Charges and
Priority Claims. Pay or discharge
(a) on or prior to the date on which penalties attach
thereto, all taxes, assessments and other governmental charges imposed upon it
or any of its properties;
(b) on or prior to the date when due, all lawful
claims of materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons which, if unpaid, might result in the creation of a Lien upon any
such property; and
(c) on or prior to the date when due, all other
lawful claims which, if unpaid, might result in the creation of a Lien upon any
such property or which, if unpaid, might give rise to a claim entitled to
priority over general creditors of the Borrower in a case under Title 11
(Bankruptcy) of the United States Code, as amended; provided, that unless and
until foreclosure, distraint, levy, sale or similar proceedings shall have been
commenced, such Borrower need not pay or discharge any such tax, assessment,
charge or claim so long as (x) the validity thereof is contested in good faith
and by appropriate proceedings diligently conducted, and (y) such reserves or
other appropriate provisions as may be required by GAAP shall have been made
therefor.
Section 7.10. End of Fiscal Year; End of Fiscal Quarter. Cause
each of its, and each of its Subsidiaries': (a) fiscal years and fourth fiscal
quarter to end on the same day on or within seven calendar days of June 30, and
(b) first three fiscal quarters to end on the same day on or within seven
calendar days of September 30, December 31 and March 31, determined in a manner
consistent with past practices of such Borrower and its Subsidiaries.
Section 7.11. Additional Security; Domestic Subsidiaries.
(a) Grant, and shall cause each of their domestic
Subsidiaries to grant, to the Administrative Agent, for the benefit of the
Banks, upon the request of the Administrative Agent, security interests in such
domestic real property not already constituting Collateral and to take, or cause
such domestic Subsidiary to take, all actions reasonably requested by the
Administrative Agent (including, without limitation, the filing of UCC-1's and
the obtaining of title insurance policies and title surveys) in connection with
the granting of such security interests, except for Liens permitted by Section
8.3 herein;
(b) Cause each domestic Subsidiary formed, organized,
established or acquired on or after the Closing Date, to irrevocably and
unconditionally guaranty the Guaranteed Obligations pursuant to a separate
guaranty agreement to be entered into in accordance with Section 11.1 herein
(which guaranty agreement shall be in form and substance reasonably satisfactory
to the Administrative Agent) and to execute and deliver to the Administrative
Agent such mortgages (including mortgage title policies
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and surveys), security agreements, financing statements, fixture filings,
opinions of counsel and other documents and instruments as the Administrative
Agent may reasonably require (which shall be in form and substance reasonably
satisfactory to the Administrative Agent and substantially similar to the
analogous Collateral Documents already executed and delivered by the Borrowers)
in order to grant the Administrative Agent, for the benefit of the Banks, a
valid and perfected first priority lien, pledge or security interest in all
domestic assets of such Subsidiary, except for Liens permitted by Section 8.3
herein;
(c) Pledge, and shall cause each of their domestic
Subsidiaries to pledge, sixty six percent (66%) of each class and series of
outstanding capital stock of each foreign Subsidiary and one hundred percent
(100%) of each class and series of outstanding capital stock of each domestic
Subsidiary formed, organized, established or acquired on or after the Closing
Date and to execute and deliver to the Administrative Agent such pledge
agreements, financing statements, opinions of counsel and other documents and
instruments as the Administrative Agent may reasonably require (which shall be
substantially similar to the analogous pledge agreements already executed and
delivered by Cannondale) in order to grant the Administrative Agent, for the
benefit of the Banks, a valid and perfected first priority lien, pledge and
security interest in all such capital stock, except for Liens permitted by
Section 8.3 herein;
(d) Cause each action required by Section 7.11(a),
(b) or (c) to be completed as soon as practicable but in no event later than
thirty (30) days after such action is requested to be taken by the
Administrative Agent.
Section 7.12. Year 2000 Compliance. Cannondale will promptly
notify the Administrative Agent in the event that Cannondale discovers or
determines that any computer application used by Cannondale; any of its
Subsidiaries; or any of the suppliers, vendors, and customers of Cannondale or
any of its Subsidiaries that is material to its or any of its Subsidiaries'
business or operations will not be Year 2000 Compliant, except to the extent
that such failure could not reasonably be expected to have a material adverse
effect on Cannondale or on Cannondale Europe B.V.
ARTICLE 8. NEGATIVE COVENANTS.
So long as any Obligation shall remain unpaid, any Letter of
Credit shall remain outstanding or any Bank shall have any Commitment under this
Agreement, each Borrower shall not:
Section 8.1. Debt. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist
any Debt, except:
(a) Debt of such Borrower under this Agreement, the
Notes or any Interest Rate Protection Agreement;
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(b) Debt described in Schedule 6.10, including
renewals, extensions or refinancings thereof, provided that the outstanding
principal amount thereof does not increase;
(c) Debt of such Borrower subordinated on terms
satisfactory to the Banks to the Borrower's obligations under this Agreement and
the Notes;
(d) Debt in respect of letters of credit issued for
the account of the Borrower or any such Subsidiary in an aggregate face amount
outstanding at any time of up to $5,000,000;
(e) Debt of such Borrower or any such Subsidiary
(other than Debt permitted by Section 8.1(b)) secured by (i) mortgage Liens
permitted by Section 8.3(j) and (ii) purchase money Liens permitted by Section
8.3(k), provided that such Debt under this clause (e), together with all other
Debt of all Borrowers and their Subsidiaries under this clause (e), does not
exceed an aggregate principal amount outstanding at any time of $10,000,000;
(f) Debt of such Borrower or any such Subsidiary
arising out of intercompany loans permitted by Section 8.5(e);
(g) Additional Debt of such Borrower and its
Subsidiaries (other than Debt permitted by Sections 8.1(a) to 8.1(f) inclusive
and Section 8.1(h)), provided that such additional Debt under this clause (g),
together with all other Debt of all Borrowers and their Subsidiaries under this
clause (g), does not exceed an aggregate principal amount outstanding at any
time of $8,000,000, and provided further that the aggregate of all Debt under
this clause (g), plus all Debt of all Borrowers and their Subsidiaries permitted
by Section 8.1(e), does not exceed an aggregate principal amount outstanding at
any time of $15,000,000; and
(h) Debt of Cannondale evidenced by its senior notes
(the "Senior Notes") so long as (i) such Debt is in an aggregate principal
amount not greater than an amount equal to the aggregate principal amount of the
Term Loans outstanding being prepaid with the Net Cash Proceeds of such Senior
Notes pursuant to Section 2.8(c) plus the amount by which the Revolving Credit
Commitments are being reduced pursuant to Section 2.10(b) in connection with the
issuance of such Senior Notes, plus the amount of any interest or premiums
required to be paid on the Term Loans and Revolving Loans being prepaid with the
Net Cash Proceeds of such Debt pursuant to Section 2.8 plus fees and expenses
associated therewith; (ii) such Debt has a later or equal final maturity and a
longer or equal weighted average life than the Term Loans and Revolving Loans
being refinanced; (iii) the covenants, events of default and other non-pricing
provisions of such Debt, and the other terms and conditions thereof, shall be in
form and substance reasonably satisfactory to the Administrative Agent and the
Required Banks; (iv) the Senior Notes shall be issued at par (subject to a de
minimis discount not to exceed 1%); and (v) all documentation evidencing such
Senior Notes shall be reasonably satisfactory to the
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Administrative Agent and the Required Banks; provided, however, that the Senior
Notes shall be permitted to be (x) guaranteed by any direct or indirect
Subsidiary of Cannondale which is a guarantor of the Obligations hereunder (only
for so long as such Subsidiary remains a guarantor of the Obligations
hereunder), and (y) secured on a pari passu basis by the Collateral or any
portion thereof on terms reasonably satisfactory to the Administrative Agent and
the Required Banks (which security interests shall be granted pursuant to the
Collateral Documents or amendments thereto reasonably satisfactory to the
Administrative Agent and the Required Banks providing for the Administrative
Agent to continue to serve as sole collateral agent); provided further, that if
any such guarantor or Collateral, as the case may be, is released pursuant to
the Facility Documents, such guarantor or Collateral shall also be automatically
released as guarantor of or as security for, as the case may be, the Senior
Notes. At the time of issuance of the Senior Notes, if the same are secured as
contemplated above, all actions deemed necessary or desirable by the
Administrative Agent or the Required Banks (including without limitation the
filing of additional UCC financing statements, mortgage amendments and the like)
to preserve and protect the security interests granted (and intended to be
granted) pursuant to the Collateral Documents (as the same may be amended as
contemplated above) shall be taken by Cannondale and its Subsidiaries at their
own expense. All intercreditor arrangements, if any, in connection with any
securing of the Senior Notes shall be required to be reasonably satisfactory to
the Administrative Agent and the Required Banks. To the extent the foregoing
provisions of this subsection (h) require that any documentation or terms and
conditions relating to the Senior Notes (excluding amendments to the Facility
Documents) be satisfactory or approved by the Required Banks, such documentation
or terms and conditions shall be deemed satisfactory and approved by the
Required Banks so long as (i) the relevant documentation (in substantially final
form excluding pricing information for the Senior Notes and in form approved by
the Administrative Agent) and a term sheet containing a range of pricing
information for the Senior Notes is distributed to the Banks at least ten (10)
Business Days prior to pricing of the Senior Notes, (ii) the Required Banks do
not object thereto within such ten (10) Business Day period, (iii) the final
economic terms of the Senior Notes are within the range of pricing information
contained in the term sheet distributed to the Banks, and (iv) the
Administrative Agent approves the final form of documentation relating to the
Senior Notes. To the extent the Facility Documents are to be amended (including
amendments and restatements thereof) as contemplated above to provide for the
sharing of security with the Senior Notes, (i) such amendments or restatements
of the Security Agreement, the Pledge Agreement and the Subsidiary Pledge
Agreement shall be distributed to the Banks and shall require the affirmative
approval of the Required Banks, and (ii) such amendments or restatements of the
Mortgages or other Collateral Documents (excluding the Security Agreement, the
Pledge Agreement and the Subsidiary Pledge Agreement) shall be deemed
satisfactory to the Required Banks so long as the same are in form approved by
the Administrative Agent and are reasonably consistent with the changes made
pursuant to the Security Agreement, the Pledge Agreement and the Subsidiary
Pledge Agreement. The documentation evidencing the Senior Notes shall not be
amended or otherwise modified unless such amendments or modifications shall be
reasonably satisfactory to the Administrative Agent and the
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Required Banks. To the extent the foregoing provisions of this subsection (h)
require that any amendments or modifications to the documentation relating to
the Senior Notes (excluding amendments to the Facility Documents) be
satisfactory or approved by the Required Banks, such documentation shall be
deemed satisfactory and approved by the Required Banks so long as (i) the
relevant documentation (in substantially final form) and in form approved by the
Administrative Agent is distributed to the Banks at least ten (10) Business Days
prior to the execution thereof, (ii) the Required Banks do not object thereto
within such ten (10) Business Day period, and (iii) the Administrative Agent
approves the final form of such amendment and modification.
Section 8.2. Guaranties, Etc. Assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable, or permit
any of its Subsidiaries to assume, guarantee, endorse or otherwise be or become
directly or indirectly responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, asset, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except for (a) guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business, (b) guaranties of Debt permitted by Sections 8.1(d)
to 8.1(g) inclusive, including Cannondale's guarantee to ABN AMRO Bank N.V. of
the unsecured obligations of Subsidiaries of Cannondale to ABN AMRO Bank N.V.
and its affiliates as permitted by such sections (which guarantee to ABN AMRO
Bank N.V. , together with Cannondale's guarantee to ABN AMRO Bank N.V. of Debt
permitted by Section 8.1(b), shall not exceed an aggregate principal amount at
any time outstanding of 12.5 million Guilders), and (c) guaranties permitted by
Section 8.1(h) with respect to the Senior Notes.
Section 8.3. Liens. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any Lien, upon or with respect to any of its properties, now owned or hereafter
acquired, except:
(a) Liens outstanding on the date hereof and
described in Schedule 8.3(a);
(b) Liens in favor of the Administrative Agent on
behalf of the Banks securing the Loans hereunder and Liens in favor of the
Administrative Agent on behalf of one or more Banks securing the Borrowers'
obligations under Interest Rate Protection Agreements permitted by Section 2.16;
(c) Liens for taxes or assessments or other
government charges or levies if not yet due and payable or if due and payable if
they are being contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained in accordance with GAAP;
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(d) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens, and other similar
Liens, securing obligations incurred in the ordinary course of business which
are not past due for more than 30 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have been
established;
(e) Liens under workmen's compensation, unemployment
insurance, social security or similar legislation (other than ERISA);
(f) Liens, deposits or pledges to secure the
performance of bids, tenders, contracts (other than contracts for the payment of
money), leases (permitted under the terms of this Agreement), public or
statutory obligations, surety, stay, appeal, indemnity, performance or other
similar bonds, or other similar obligations arising in the ordinary course of
business;
(g) judgment and other similar Liens arising in
connection with court proceedings; provided that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are being actively contested in good faith and by appropriate proceedings;
(h) easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially interfere with
the occupation, use and enjoyment by the Borrower or any such Subsidiary of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(i) Liens securing obligations of such a Subsidiary
to the Borrower or another such Subsidiary;
(j) mortgage Liens on real property (and fixed
improvements thereon) now owned or hereafter acquired; provided that:
(i) any property subject to any of the
foregoing is acquired or used by such Borrower or any such Subsidiary in the
ordinary course of its business;
(ii) the obligation secured by any Lien so
created, assumed or existing shall not exceed 100% of the lesser of cost or fair
market value as of the time of creation or incurrence of such Lien on the
property covered thereby;
(iii) each such Lien shall attach only to
the real property so acquired or held and fixed improvements thereon;
(iv) the obligations secured by such Lien
are permitted by the provisions of Section 8.1; and
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(v) except as set forth on Schedule 8.3(j),
each such mortgage Lien and the Debt of such Borrower secured thereby is
subordinated on terms reasonably satisfactory to the Administrative Agent to the
Liens in favor of the Administrative Agent and such Borrower's Obligations under
the Agreement and the Notes secured thereby;
(k) purchase money Liens on any real or personal
property hereafter acquired or the assumption of any Lien on real or personal
property existing at the time of such acquisition, or a Lien incurred in
connection with any conditional sale or other title retention agreement or a
Capital Lease; provided that:
(i) any property subject to any of the
foregoing is acquired by such Borrower or any such Subsidiary in the ordinary
course of its business and the Lien on any such property is created
contemporaneously with such acquisition;
(ii) the obligation secured by any Lien so
created, assumed or existing shall not exceed 100% of the lesser of cost or fair
market value as of the time of acquisition of the property covered thereby to
such Borrower or such Subsidiary acquiring the same;
(iii) as to real property, each such Lien
shall attach only to the property so acquired and fixed improvements thereon;
and
(iv) the obligations secured by such Lien
are permitted by the provisions of Section 8.1;
(l) after the issuance of the Senior Notes, Liens on
Collateral securing the Senior Notes on an equal and ratable basis with
Obligations otherwise secured pursuant to the Collateral Documents to the extent
permitted by Section 8.1(h); provided that such Liens may not continue in
existence at any time, and for so long as, the Liens on the respective items of
Collateral have been released pursuant to the Collateral Documents.
Section 8.4. Leases. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer to exist,
any obligation as lessee for the rental or hire of any real or personal
property, except: (a) leases existing on the date of this Agreement and any
extensions or renewals thereof; (b) leases (other than Capital Leases) which do
not in the aggregate require such Borrower and its Subsidiaries on a
consolidated basis to make payments (including taxes, insurance, maintenance and
similar expense which such Borrower or any Subsidiary is required to pay under
the terms of any lease) in any Fiscal Year of such Borrower in excess of
$3,000,000; (c) leases between such Borrower and any such Subsidiary or between
any such Subsidiaries; (d) Capital Leases permitted by Section 8.3(k).
Section 8.5. Investments. Make, or permit any of its
Subsidiaries to make, any loan or advance to any Person or purchase or otherwise
acquire, or permit any
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such Subsidiary to purchase or otherwise acquire, any capital stock, assets,
obligations or other securities of, make any capital contribution to, or
otherwise invest in, or acquire any interest in, any Person, except for: (a)
Cash and Cash Equivalents held or acquired by such Borrower or any such
Subsidiary; (b) stock, obligations or securities received in settlement of debts
(created in the ordinary course of business) owing to such Borrower or any such
Subsidiary; (c) any Acceptable Acquisition or any Interest Rate Protection
Agreement; (d) joint ventures with third-parties (including dealer loans) that,
together with all other joint ventures (including dealer loans) entered into by
all Borrowers and their Subsidiaries on or after June 9, 1997, do not exceed an
aggregate amount of $5,000,000 during the term hereof (other than joint ventures
(including dealer loans) existing at the Closing Date); (e) intercompany loans
made by Cannondale to any Subsidiary or Affiliate, including any Subsidiary
Borrower, that do not exceed an aggregate principal amount of $5,000,000
outstanding at any one time (exclusive of such intercompany loans set forth in
Schedule 8.5 hereto); and (f) loans to employees of such Borrower or any
Subsidiary that, together with all such loans to employees made by all Borrowers
and their Subsidiaries, do not exceed an aggregate principal amount of
$13,500,000 outstanding at any one time.
Section 8.6. Dividends. Declare or pay any dividends,
purchase, redeem, retire or otherwise acquire for value any of its capital stock
now or hereafter outstanding, or make any distribution of assets to its
stockholders as such whether in cash, assets or in obligations of such Borrower,
or allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption or retirement of any shares of
its capital stock, or make any other distribution by reduction of capital or
otherwise in respect of any shares of its capital stock or permit any of its
Subsidiaries to purchase or otherwise acquire for value any stock of such
Borrower or another such Subsidiary, provided, however, that: (a) each Borrower
may declare and deliver dividends and make distributions payable solely in
common stock of such Borrower; (b) each Borrower may purchase or otherwise
acquire shares of its capital stock by exchange for or out of the cash proceeds
actually received by such Borrower from a substantially concurrent issue of new
shares of its capital stock; and (c) each Borrower may declare and pay dividends
or make distributions to its stockholders or purchase, redeem, retire or
otherwise acquire for value shares of its capital stock provided that (i) on a
pro forma historical basis, after giving effect to all such dividends and
distributions and all such share repurchases, redemptions and other acquisitions
for value, the Borrowers shall be in compliance with the covenants set forth in
Article 9 herein, (ii) all such dividends and distributions and all such share
repurchases, redemptions and other acquisitions for value during a Fiscal
Quarter do not in the aggregate exceed the Restricted Payment Allowance, and
(iii) at least fifteen (15) days prior to any such declaration and payment of
dividends, any such making of distributions, and any such share repurchase,
redemption or acquisition for value, Cannondale shall furnish directly to each
of the Banks a certificate of its chief financial officer to the effect that,
(x) on a pro forma historical basis, after giving effect to all such dividends
and distributions and all such share repurchases, redemptions and other
acquisitions for value, the Borrowers shall be in compliance with the financial
covenants contained in Article 9, and (y) all such dividends and distributions
and all such share repurchases, redemptions
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and other acquisitions for value during a Fiscal Quarter do not in the aggregate
exceed the Restricted Payment Allowance, which certificate shall also
demonstrate compliance with such financial covenants and such Restricted Payment
Allowance restriction by setting forth the calculations thereof; provided
further, however, that no such dividends shall be declared or paid, no such
distributions shall be made, and no such shares of capital stock shall be
purchased, redeemed, retired or otherwise acquired for value if any Default or
Event of Default shall have occurred and be continuing or shall result
therefrom.
Section 8.7. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease, assign,
transfer or otherwise dispose of, any of its now owned or hereafter acquired
assets (including, without limitation, shares of stock and indebtedness of such
Subsidiaries, receivables and leasehold interests); except: (a) for inventory
disposed of in the ordinary course of business; (b) the sale or other
disposition of assets no longer used or useful in the conduct of its business;
(c) that any such Subsidiary may sell, lease, assign, or otherwise transfer its
assets to a Borrower, and (d) the assignment or other transfer by Cannondale of
certain intangible assets to a domestic Subsidiary of Cannondale to be formed,
organized or established after the Closing Date (which Subsidiary shall be
deemed a Material Subsidiary for all purposes herein, shall provide the
irrevocable and unconditional guaranty set forth in Article 11 and shall grant
the mortgages, pledges and other security interests provided for in Section
7.11).
Section 8.8. Stock of Subsidiaries, Etc. Sell or otherwise
dispose of any shares of capital stock of any Material Subsidiary, or permit any
such Material Subsidiary to issue any additional shares of its capital stock,
except directors' qualifying shares.
Section 8.9. Transactions with Affiliates. Enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate or permit any of
its Subsidiaries to enter into any transaction, including, without limitation,
the purchase, sale or exchange of property or the rendering of any service, with
any Affiliate, except in the ordinary course of and pursuant to the reasonable
requirements of such Borrower's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to such Borrower or such Subsidiary than it
would obtain in a comparable arm's length transaction with a Person not an
Affiliate.
Section 8.10. Mergers, Etc. Merge or consolidate with any
Person unless such Borrower is the surviving corporation and, on a pro forma
basis after giving effect to such merger or consolidation, no Default or Event
of Default would exist hereunder, or sell, assign, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or substantially
all of its assets (whether now owned or hereafter acquired) to, any Person;
provided, however, that no such merger, consolidation, sale, assignment, lease
or other disposition shall occur or be made if any Default or Event of Default
shall have occurred and be continuing or shall result therefrom.
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Section 8.11. Limitation on Payment of Senior Notes. After the
issuance of Senior Notes, make (or give any notice in respect of) any voluntary,
involuntary, optional or mandatory payment or prepayment on or redemption or
acquisition for value of, including any prepayment or redemption as a result of
any change of control or similar event of, including by way of depositing with
the trustee with respect to the Senior Notes money or securities before due for
the purpose of paying when due, the Senior Notes, except, in the case of
scheduled principal payments on the Senior Notes, to the extent expressly
provided for in the terms and conditions of the Senior Notes approved by the
Administrative Agent and the Required Banks pursuant to Section 8.1(h).
ARTICLE 9. FINANCIAL COVENANTS.
So long as any Obligations shall remain unpaid, any Letter of
Credit shall remain outstanding or any Bank shall have a Commitment under this
Agreement:
Section 9.1. Minimum Interest Coverage Ratio. Cannondale shall
maintain a Consolidated Interest Coverage Ratio, measured quarterly for the
twelve month period then ended (a rolling twelve month calculation measured as
of the end of each successive Fiscal Quarter of Cannondale), of not less than
3.50 to 1.0 at any time.
Section 9.2. Minimum Tangible Net Worth. Cannondale shall
maintain at all times a Consolidated Tangible Net Worth, as certified at the end
of each Fiscal Quarter of Cannondale, of not less than the sum of (x) sixty
million dollars ($60,000,000), plus (y) the sum of the Fiscal Year Net Worth
Increase Amounts of Cannondale for each Fiscal Year (commencing with the 1999
Fiscal Year of Cannondale ending approximately June 30, 1999).
Section 9.3. Leverage Ratio. Cannondale shall maintain (x) at
all times from and after the Closing Date until June 30, 2001, a ratio of
Consolidated Funded Debt to Total Capitalization of not greater than 0.60 to
1.0, and (y) at all times from and after June 30, 2001, a ratio of Consolidated
Funded Debt to Total Capitalization of not greater than 0.55 to 1.0.
Section 9.4. Debt Service Coverage Ratio. Cannondale shall
maintain at all times, as certified at the end of each Fiscal Quarter of
Cannondale, a Consolidated Average Funded Debt to EBITDA Ratio (for the four
Fiscal Quarters then ended) of not greater than 3.3 to 1.0.
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ARTICLE 10. EVENTS OF DEFAULT.
Section 10.1. Events of Default. Any of the following events
shall be an "Event of Default":
(a) any Borrower shall: (i) fail to pay the principal
of any Note as and when due and payable; or (ii) fail to pay interest on any
Note or any fee or other amount due hereunder as and when due and payable and
such failure to pay such interest, fee or other amount shall continue for three
(3) or more days;
(b) an Event of Default shall have occurred and be
continuing under the Mortgages, the Security Agreement, the Pledge Agreement,
the Subsidiary Pledge Agreement, the Collateral Assignment of Shareholder Note,
or the Pennsylvania Collateral Assignments, if any;
(c) any representation or warranty made or deemed
made by any Borrower in this Agreement or in any other Facility Document or
which is contained in any certificate, document, opinion, financial or other
statement furnished at any time under or in connection with any Facility
Document shall prove to have been incorrect in any material respect on or as of
the date made or deemed made;
(d) any Borrower shall: (i) fail to perform or
observe any term, covenant or agreement contained in Section 2.5 or Articles 8
or 9; or (ii) fail to perform or observe any term, covenant or agreement on its
part to be performed or observed (other than the obligations specifically
referred to in clause (i) or elsewhere in this Section 10.1) in any Facility
Document and such failure shall continue for 30 consecutive days;
(e) (i) any Borrower or any of its Subsidiaries shall
fail to pay on or after June 9, 1997 any indebtedness under any Interest Rate
Protection Agreement or any other indebtedness in an aggregate amount in excess
of $500,000, including but not limited to indebtedness for borrowed money (other
than the payment obligations described in (a) above), of such Borrower or such
Subsidiary, as the case may be, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise); or (ii) any Borrower or any of its Subsidiaries shall fail to
perform or observe any term, covenant or condition on its part to be performed
or observed under any such Interest Rate Protection Agreement or any other
agreement or instrument relating to any such indebtedness, when required to be
performed or observed, if the effect of such failure to perform or observe is to
accelerate, or to permit the acceleration of, after the giving of notice or
passage of time, or both, the maturity of such indebtedness (unless such failure
to perform or observe shall be timely waived by the holder of such
indebtedness); or (iii) any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
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(f) any Borrower or any of its Subsidiaries: (i)
shall generally not, or be unable to, or shall admit in writing its inability
to, pay its debts as such debts become due; or (ii) shall make an assignment for
the benefit of creditors, petition or apply to any tribunal for the appointment
of a custodian, receiver or trustee for it or a substantial part of its assets;
or (iii) shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; or (iv) shall have had any
such petition or application filed or any such proceeding shall have been
commenced, against it, in which an adjudication or appointment is made or order
for relief is entered, or which petition, application or proceeding remains
undismissed for a period of 60 days or more; or shall be the subject of any
proceeding under which its assets may be subject to seizure, forfeiture or
divestiture (other than a proceeding in respect of a Lien permitted under
Section 8.3 (b)); or (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 60 days or more;
(g) one or more judgments, decrees or orders for the
payment of money in excess of $1,000,000 in the aggregate (i) shall be rendered
against any Borrower or any of its Subsidiaries, (ii) shall not be appealed or
shall remain unstayed on appeal or shall become a final judgment, and (iii)
either (x) enforcement proceedings shall have been commenced by any creditor
upon such judgment decree or order, or (y) such judgments, decrees or orders
shall continue unsatisfied and in effect for a period of 30 consecutive days
without being vacated, discharged, satisfied or stayed or bonded pending appeal
without an insurance company (satisfactory to the Administrative Agent in its
reasonable discretion) having agreed to fund such judgment, decree or order in a
manner satisfactory to the Administrative Agent;
(h) any event or condition shall occur or exist with
respect to any Plan or Multiemployer Plan concerning which any Borrower is under
an obligation to furnish a report to the Banks in accordance with Section 7.8(h)
hereof and as a result of such event or condition, together with all other such
events or conditions, such Borrower or any ERISA Affiliate has incurred or in
the opinion of any Bank is reasonably likely to incur a liability to a Plan, a
Multiemployer Plan, the PBGC, or a Section 4042 Trustee (or any combination of
the foregoing) which is material in relation to the financial position of such
Borrower;
(i) the Unfunded Benefit Liabilities of one or more
Plans have increased after the date of this Agreement in an amount which is
material;
(j) (A) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the meaning of Rules
13d-3 of the Securities and Exchange commission under the Securities Exchange
Act of 1934) of 50%
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or more of the outstanding shares of voting stock of Cannondale (other than any
Person or two or more Persons acting in concert who had beneficial ownership
(within the meaning of said Rule 13d-3) of 25% or more of the outstanding shares
of voting stock of Cannondale on the date of this Agreement); or (B) during any
period of up to 12 consecutive months, commencing before or after the date of
this Agreement, individuals who at the beginning of such period were directors
of Cannondale (together with any new director whose election by Cannondale's
Board of Directors or whose nomination for election by Cannondale's shareholders
was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the board of directors of Cannondale;
(k) the Security Agreement, the Pledge Agreement, the
Subsidiary Pledge Agreement, the Collateral Assignment of Shareholder Note, or
the Collateral Assignment of Shareholder Mortgage shall at any time after its
execution and delivery and for any reason cease: (A) to create a valid and
perfected first priority security interest in and to any material portion of the
property purported to be subject to such agreement (subject to certain
exceptions permitted thereby); or (B) to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by any party thereto, or such party shall deny it has further
liability or obligation thereunder or an event of default shall have occurred
thereunder and be continuing;
(l) any Mortgage or any financing statement related
thereto shall at any time after its execution and delivery and for any reason
cease: (A) to create a valid and perfected first priority security interest in
and to any material portion of the Mortgaged Property purported to be subject to
such Mortgage or financing statement (subject to certain exceptions permitted
thereby); or (B) to be in full force and effect or shall be declared null and
void, or the validity or enforceability thereof shall be contested by any party
thereto, or such party shall deny it has further liability or obligation
thereunder or an event of default shall have occurred thereunder and be
continuing; or
(m) the Shareholder Mortgage or any financing
statement related thereto shall at any time after its execution and delivery and
for any reason cease: (A) to create a valid and perfected first priority
security interest in and to any material portion of the mortgaged property
purported to be subject to such Mortgage or financing statement (subject to
certain exceptions permitted thereby); or (B) to be in full force and effect or
shall be declared null and void, or the validity or enforceability thereof shall
be contested by any party thereto, or such party shall deny it has further
liability or obligation thereunder or an event of default shall have occurred
thereunder and be continuing.
Section 10.2. Remedies. If any Event of Default shall occur
and be continuing, the Administrative Agent shall, upon request of the Required
Banks, by notice to the Borrowers (a) declare the Commitments to be terminated,
whereupon the same shall forthwith terminate and so shall the obligations of the
Fronting Bank to issue any Letter of
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Credit, (b) declare the outstanding principal of any or all of the Notes, all
interest thereon and all other amounts payable under this Agreement, the Notes
and the other Facility Documents to be forthwith due and payable, whereupon such
Notes, all such principal, interest and all such other amounts shall become and
be forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers,
(c) enforce any and all rights and interests created and existing under any of
the Facility Documents, and/or (d) direct the Borrowers to pay to the
Administrative Agent an amount, to be held as cash security in the cash
collateral account held by the Administrative Agent under Section 3.2, equal to
the Letter of Credit Usage then outstanding; provided that, in the case of an
Event of Default referred to in Section 10.1(f) or Section 10.1(j) above, the
Commitments and the obligation to issue Letters of Credit shall be immediately
terminated, and the Notes, all interest thereon and all other amounts payable
under this Agreement, the Notes and the other Facility Documents shall be
immediately due and payable without notice, presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrowers.
ARTICLE 11. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS.
Section 11.1. Guarantied Obligations. Cannondale, in
consideration of the execution and delivery of this Agreement by the Banks and
the Administrative Agent, hereby irrevocably and unconditionally guarantees to
the Administrative Agent and the Banks, and hereby agrees to cause each domestic
direct and indirect Subsidiary of Cannondale formed, organized, established or
acquired on or after the Closing Date to irrevocably and unconditionally
guarantee to the Administrative Agent and the Banks, as primary obligor, until
final payment has been made, the due and punctual payment and performance in
full in cash in the applicable currency of the Obligations of, in the case of
the guaranty of Cannondale, the other Borrowers, and, in the case of the
guaranty of any such Subsidiary, all of the Borrowers (all such obligations so
guarantied are herein collectively referred to as the "Guarantied Obligations"),
in each case when and as the same shall become due and payable, whether at
maturity, pursuant to mandatory or optional prepayment, by acceleration or
otherwise, all in accordance with the terms and provisions hereof and thereof,
it being the intent of such guarantors that the guaranty set forth in this
Section 11.1 (the "Unconditional Guaranty") shall be a guaranty of payment and
not a guaranty of collection.
Section 11.2. Performance under this Agreement. In the event
any Subsidiary Borrower fails to make, on or before the due date thereof, any
payment of the Guarantied Obligations, Cannondale shall cause forthwith to be
paid the moneys, or to be performed, kept, observed, or fulfilled each of such
Guarantied Obligations, in respect of which such failure has occurred.
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Section 11.3. Waivers. To the fullest extent permitted by law,
Cannondale does hereby waive:
(a) notice of acceptance of the Unconditional
Guaranty;
(b) notice of any borrowings under this Agreement, or
the creation, existence or acquisition of any of the Guarantied Obligations,
subject to Cannondale's right to make inquiry of the Administrative Agent to
ascertain the amount of the Guarantied Obligations at any reasonable time;
(c) notice of the amount of the Guarantied
Obligations, subject to Cannondale's right to make inquiry of the Administrative
Agent to ascertain the amount of the Guarantied Obligations at any reasonable
time;
(d) notice of adverse change in the financial
condition of any Subsidiary Borrower or any other fact that might increase
Cannondale's risk hereunder;
(e) notice of presentment for payment, demand,
protest, and notice thereof as to the Notes or any other instrument;
(f) notice of any Default or Event of Default;
(g) all other notices and demands to which Cannondale
might otherwise be entitled (except if such notice or demand is specifically
otherwise required to be given to Cannondale hereunder or under the other
Facility Documents);
(h) the right by statute or otherwise to require any
or each Bank or the Administrative Agent to institute suit against any
Subsidiary Borrower or to exhaust the rights and remedies of any or each Bank or
the Administrative Agent against any Borrower, Cannondale being bound to the
payment of each and all Guarantied Obligations, whether now existing or
hereafter accruing, as fully as if such Guarantied Obligations were directly
owing to each Bank by Cannondale;
(i) any defense arising by reason of any disability
or other defense of any Subsidiary Borrower or by reason of the cessation from
any cause whatsoever of the liability of any Subsidiary Borrower in respect
thereof; and
(j) any stay (except in connection with a pending
appeal), valuation, appraisal, redemption or extension law now or at any time
hereafter in force which, but for this waiver, might be applicable to any sale
of Property of Cannondale made under any judgment, order or decree based on this
Agreement, and Cannondale covenants that it will not at any time insist upon or
plead, or in any manner claim or take the benefit or advantage of such law.
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Until all of the Guarantied Obligations shall have
been paid in full, Cannondale shall not have any right of subrogation,
reimbursement, or indemnity whatsoever in respect thereof and any right of
recourse to or with respect to any assets or Property of any Subsidiary
Borrower. Nothing shall discharge or satisfy the obligations of Cannondale
hereunder except upon the full and final performance and indefeasible payment of
the Guarantied Obligations in cash in the applicable currency and the
termination of all Commitments, upon which, if paid by Cannondale, each Bank
agrees to transfer and assign its interest in the Notes to Cannondale without
recourse, representation or warranty of any kind (other than that such Bank owns
such Notes and that such Notes are free of Liens created by such holder). All of
the Guarantied Obligations shall in the manner and subject to the limitations
provided herein for the acceleration of, the Notes and the Letters of Credit
Usage, forthwith become due and payable without notice.
Section 11.4. Releases. Cannondale consents and agrees that,
without notice to or by, or the consent of, Cannondale and without affecting or
impairing the obligations of Cannondale hereunder, each Bank or the
Administrative Agent, in the manner provided herein, by action or inaction, may:
(a) compromise or settle, extend the period of
duration or the time for the payment, or discharge the performance of, or may
refuse to, or otherwise not, enforce, or may, by action or inaction, release all
or any one or more parties to, any one or more of the Notes or the other
Facility Documents;
(b) grant other indulgences to any Subsidiary
Borrower in respect thereof;
(c) amend or modify in any manner and at any time (or
from time to time) any one or more of the Notes, the Letters of Credit and the
other Facility Documents in accordance with Section 13.1 or otherwise;
(d) release or substitute any one or more of the
endorsers or guarantors of the Guarantied Obligations whether parties hereto or
not;
(e) exchange, enforce, waive, or release, by action
or inaction, any security for the Guarantied Obligations (including, without
limitation, any of the collateral therefor) or any other guaranty of any of the
Notes or the Letter of Credit Usage; and
(f) take any other action or fail to take any other
action, which, in the absence of this Section 11.4, would otherwise constitute
an equitable or legal discharge of Cannondale's obligations under the
Unconditional Guaranty.
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Section 11.5. Marshaling. Cannondale consents and agrees that:
(a) the Administrative Agent shall be under no
obligation to marshal any assets in favor of Cannondale or against or in payment
of any or all of the Guarantied Obligations; and
(b) to the extent Cannondale or any Subsidiary
Borrower makes a payment or payments to any Bank, which payment or payments or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required, for any of the foregoing reasons or for
any other reason, to be repaid or paid over to a custodian, trustee, receiver,
or any other party under any bankruptcy law, common law, or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
intended to be satisfied thereby shall be revived and continued in full force
and effect as if said payment or payments had not been made and Cannondale shall
be primarily liable for such obligation.
Section 11.6. Liability. Cannondale agrees that its liability
in respect of this Article 11 shall not be contingent upon the exercise or
enforcement by any Bank or the Administrative Agent of whatever remedies such
Bank or the Administrative Agent may have against any Subsidiary Borrower or the
enforcement of any Lien or realization upon any security such Bank or the
Administrative Agent may at any time possess.
Section 11.7. Unconditional Obligation. The Unconditional
Guaranty set forth in this Article 11 is an absolute, unconditional, continuing
and irrevocable guaranty of payment and performance and shall remain in full
force and effect until the full and final payment of the Guarantied Obligations
and termination of the Commitments without respect to future changes in
conditions, including change of law or any invalidity or irregularity with
respect to the issuance or assumption of any obligations (including, without
limitation, the Notes and the Letter of Credit Usage) of or by any Subsidiary
Borrower or any other Guarantor, or with respect to the execution and delivery
of any agreement (including, without limitation, the Notes and the other
Facility Documents) of any Borrower or any other Guarantor.
Section 11.8. Election to Perform Obligations. Any election by
Cannondale to pay or otherwise perform any of the obligations of any Subsidiary
Borrower under the Notes or under any of the other Facility Documents, whether
pursuant to this Article 11 or otherwise, shall not release such Subsidiary
Borrower from such obligations or any of its other obligations under the Notes
or under any of the other Facility Documents.
Section 11.9. No Election. The Administrative Agent and the
Banks shall have the right to seek recourse against Cannondale to the fullest
extent provided for herein for Cannondale's obligations under this Agreement
(including, without limitation, this Article 11) in respect of the Notes and the
Letters of Credit. No election to proceed in one form of action or proceeding,
or against any party, or on any obligation, shall constitute a
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waiver of the Administrative Agent's or such Bank's right to proceed in any
other form of action or proceeding or against other parties unless such holder
has expressly waived such right in writing. Specifically, but without limiting
the generality of the foregoing, no action or proceeding by any Bank or the
Administrative Agent against any Subsidiary Borrower under any document or
instrument evidencing obligations of such Borrower to such Bank or the
Administrative Agent shall serve to diminish the liability of Cannondale under
this Agreement (including, without limitation, this Article 11) except to the
extent that such Bank finally and unconditionally shall have realized payment by
such action or proceeding, notwithstanding the effect of any such action or
proceeding upon Cannondale's right of subrogation against such Subsidiary
Borrower.
Section 11.10. Severability. Subject to Article 10 hereof and
applicable law, each of the rights and remedies granted under this Article 11 to
the Administrative Agent and each Bank may be exercised by the Administrative
Agent or any such Bank without notice by the Administrative Agent or any such
Bank, as applicable, to, or the consent of, the Administrative Agent or the
other Banks or any other action by the Administrative Agent or such Bank,
provided that Cannondale will give each Bank immediate notice of any exercise of
rights and remedies by the Administrative Agent or any Bank under this Article
11.
Section 11.11. Other Enforcement Rights. The Administrative
Agent and each Bank may proceed, as provided in Article 11 hereof, to protect
and enforce the Unconditional Guaranty by suit or suits or proceedings in
equity, at law or in bankruptcy, and whether for the specific performance of any
covenant or agreement contained herein (including, without limitation, in this
Article 11) or in execution or aid of any power herein granted; or for the
recovery of judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law. Each Bank shall have, to the fullest extent permitted by law and
this Agreement, a right of set-off against, any and all credits and any and all
other Property of Cannondale, now or at any time whatsoever with, or in the
possession of, such holder, or anyone acting for such holder, as security for
any and all obligations of Cannondale hereunder and such Lien shall be deemed
permitted for all purposes under Article 8 hereof.
Section 11.12. Delay or Omission; No Waiver. No course of
dealing on the part of any Bank or the Administrative Agent and no delay or
failure on the part of any such Person to exercise any right hereunder
(including, without limitation, this Article 11) shall impair such right or
operate as a waiver of such right or otherwise prejudice such Person's rights,
powers and remedies hereunder. Every right and remedy given by the Unconditional
Guaranty or by law to any Bank or the Administrative Agent may be exercised from
time to time as often as may be deemed expedient by such Person.
Section 11.13. Restoration of Rights and Remedies. If any Bank
or the Administrative Agent shall have instituted any proceeding to enforce any
right or remedy under the Unconditional Guaranty, under any Note held by such
Bank, or under the
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Security Agreement, the Pledge Agreement, the Subsidiary Pledge Agreement or any
other Collateral Document and such proceeding shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to such Bank
or the Administrative Agent, then and in every such case each such Bank, the
Administrative Agent and each Borrower shall, except as may be limited or
affected by any determination in such proceeding, be restored severally and
respectively to its respective former positions hereunder and thereunder, and
thereafter, subject as aforesaid, the rights and remedies of such Bank or the
Administrative Agent shall continue as though no such proceeding had been
instituted.
Section 11.14. Cumulative Remedies. No remedy under this
Agreement (including, without limitation, this Article 11), the Notes, the
Letters of Credit or any of the other Facility Documents is intended to be
exclusive of any other remedy, but each and every remedy shall be cumulative and
in addition to any and every other remedy given hereunder this Agreement
(including, without limitation, this Article 11), under the Notes, the Letters
of Credit or under any of the other Facility Documents.
Section 11.15. Survival. So long as the Guarantied Obligations
shall not have been fully and finally performed and indefeasibly paid, the
obligations of Cannondale under this Article 11 shall survive the transfer and
payment of any Note or Letter of Credit Obligation and the payment in full of
all the Notes and Letter of Credit Usage and the expiration and termination of
the Commitments.
Section 11.16. No Setoff, Counterclaim or Withholding;
Gross-Up. Each payment by Cannondale shall be made without setoff or
counterclaim and without withholding for or on account of any present or future
Taxes imposed by any Governmental Authority. If any such withholding is so
required, Cannondale shall make the withholding and pay the amount withheld to
the appropriate Governmental Authority before penalties attach thereto or
interest accrues thereon.
Section 11.17. Payment in Applicable Currency. Any payment of
a Guarantied Obligation required to be made pursuant to this Agreement shall be
made in the currency in which such Guarantied Obligation is required to be made
pursuant to this Agreement, any Note or any other Facility Document.
ARTICLE 12. THE ADMINISTRATIVE AGENT;
RELATIONS AMONG BANKS AND BORROWERS.
Section 12.1. Appointment, Powers and Immunities of
Administrative Agent. Each Bank hereby irrevocably (but subject to removal by
the Required Banks pursuant to Section 12.9) appoints and authorizes the
Administrative Agent to act as its agent hereunder and under any other Facility
Document with such powers as are specifically delegated to the Administrative
Agent by the terms of this Agreement and any other Facility Document, together
with such other powers as are reasonably incidental
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thereto. The Administrative Agent (which term, when used in this sentence and
the next sentence and in Section 12.5 and the first sentence of Section 12.7
hereof, shall include its affiliates and its own and its affiliates' officers,
directors, employees and agents) shall have no duties or responsibilities except
those expressly set forth in this Agreement and any other Facility Document, and
shall not by reason of this Agreement be a trustee or fiduciary for any Bank.
The Administrative Agent shall not be responsible to the Banks for any recitals,
statements, representations or warranties made by any Borrower or any officer or
official of any Borrower or any other Person contained in this Agreement or any
other Facility Document, or in any certificate or other document or instrument
referred to or provided for in, or received by any of them under, this Agreement
or any other Facility Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Facility Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any collateral
security for the Loans or for any failure by any Borrower to perform any of its
obligations hereunder or thereunder (and shall have no duty to ascertain,
inquire into or verify the performance or observance of any such obligations or
the satisfaction of any conditions). The Administrative Agent may employ agents
and attorneys-in-fact and shall not be responsible, except as to money or
securities received by it or its authorized agents, for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Administrative Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or under any other Facility
Document or in connection herewith or therewith, except for its or their own
gross negligence or willful misconduct. The Borrowers shall pay any fee agreed
to by the Borrowers and the Administrative Agent with respect to the
Administrative Agent's services hereunder.
Section 12.2. Reliance by Administrative Agent. The
Administrative Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each Bank as
the holder of the Loans made by it for all purposes hereof unless and until a
notice of the assignment or transfer thereof satisfactory to the Administrative
Agent signed by such Bank shall have been furnished to the Administrative Agent
but the Administrative Agent shall not be required to deal with any Person who
has acquired a participation in any Loan from a Bank. As to any matters not
expressly provided for by this Agreement or any other Facility Document, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Required Banks, and such instructions of the Required Banks and any action taken
or failure to act pursuant thereto shall be binding on all of the Banks and any
other holder of all or any portion of any Loan.
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Section 12.3. Defaults. The Administrative Agent shall not be
deemed to have knowledge of the occurrence of a Default or Event of Default
(other than the non-payment of principal of or interest on the Loans to the
extent the same is required to be paid to the Administrative Agent for the
account of the Banks) unless the Administrative Agent has received notice from a
Bank or the Borrower specifying such Default or Event of Default and stating
that such notice is a "Notice of Default." In the event that the Administrative
Agent receives such a notice of the occurrence of a Default or Event of Default,
the Administrative Agent shall give prompt notice thereof to the Banks (and
shall give each Bank prompt notice of each such non-payment). The Administrative
Agent shall (subject to Section 12.8) take such action with respect to such
Default or Event of Default which is continuing as shall be directed by the
Required Banks; provided that, unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Banks; and
provided further that the Administrative Agent shall not be required to take any
such action which it determines to be contrary to law.
Section 12.4. Rights of Administrative Agent as a Bank. With
respect to its Commitment and the Loans made by it, the Administrative Agent in
its capacity as a Bank hereunder shall have the same rights and powers hereunder
as any other Bank and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Administrative Agent in its capacity as a Bank.
The Administrative Agent and its affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to (on a secured or
unsecured basis), and generally engage in any kind of banking, trust or other
business with, the Borrower (and any of its affiliates) as if it were not acting
as the Administrative Agent, and the Administrative Agent may accept fees and
other consideration from the Borrowers for services in connection with this
Agreement or otherwise without having to account for the same to the Banks.
Although the Administrative Agent and its affiliates may in the course of such
relationships and relationships with other Persons acquire information about the
Borrower, its Affiliates and such other Persons, the Administrative Agent shall
have no duty to disclose such information to the Banks.
Section 12.5. Indemnification of Administrative Agent. The
Banks agree to indemnify the Administrative Agent (to the extent not reimbursed
under Section 13.3 or under any other applicable provision of any Facility
Document, but without limiting the obligations of the Borrowers under Section
13.3 or such provisions), ratably in accordance with their respective Commitment
Percentages, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, any other Facility Document or any other documents contemplated by or
referred to herein or the transactions contemplated hereby or thereby
(including, without limitation, the failure to
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withhold any tax from any payments by Cannondale or any other Borrower
hereunder, the costs and expenses which the Borrowers are obligated to pay under
Section 13.3 or under the applicable provisions of any other Facility Document
but excluding, unless a Default or Event of Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents or instruments or any other action taken
or omitted to be taken by the Administrative Agent under any Facility Document;
provided that no Bank shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the party to be
indemnified. The agreements contained in this Section shall survive payment in
full of the Loans and all other amounts payable under this Agreement and
expiration and termination of the Commitments and the Facility Documents.
Section 12.6. Documents. The Administrative Agent will forward
to each Bank, promptly after the Administrative Agent's receipt thereof, a copy
of each report, notice or other document required by this Agreement or any other
Facility Document to be delivered to the Administrative Agent for such Bank.
Section 12.7. Non-Reliance on Administrative Agent and Other
Banks. Each Bank agrees that it has, independently and without reliance on the
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrowers and their respective Subsidiaries and decision to enter into this
Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any other Facility Document. The Administrative Agent shall not be required to
keep itself informed as to the performance or observance by the Borrowers of
this Agreement or any other Facility Document or any other document referred to
or provided for herein or therein or to inspect the properties or books of the
Borrowers or any Subsidiary. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrowers or any
Subsidiary (or any of their Affiliates) which may come into the possession of
the Administrative Agent or any of its affiliates. The Administrative Agent
shall not be required to file this Agreement, any other Facility Document or any
document or instrument referred to herein or therein, for record or give notice
of this Agreement, any other Facility Document or any document or instrument
referred to herein or therein, to anyone.
Section 12.8. Failure of Administrative Agent to Act. Except
for action expressly required of the Administrative Agent hereunder, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall have received further assurances
(which may include cash collateral) of the indemnification
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obligations of the Banks under Section 12.5 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
Section 12.9. Resignation or Removal of Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as
provided below, the Administrative Agent may resign at any time by giving
written notice thereof to the Banks and the Borrowers, and the Administrative
Agent may be removed at any time with or without cause by the Required Banks;
provided that the Borrowers and the other Banks shall be promptly notified
thereof. Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Required Banks and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Banks'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Banks, appoint a successor Administrative Agent,
which shall be a bank which has an office in New York, New York. The Required
Banks or the retiring Administrative Agent, as the case may be, shall upon the
appointment of a successor Administrative Agent promptly so notify the Borrowers
and the other Banks. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article 12
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent.
Section 12.10. Amendments Concerning Agency Function. The
Administrative Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement or any other Facility Document which affects its
duties hereunder or thereunder unless it shall have given its prior consent
thereto.
Section 12.11. Liability of Administrative Agent. The
Administrative Agent shall not have any liabilities or responsibilities to the
Borrowers on account of the failure of any Bank to perform its obligations
hereunder or to any Bank on account of the failure of the Borrowers to perform
its obligations hereunder or under any other Facility Document.
Section 12.12. Transfer of Agency Function. Without the
consent of the Borrowers or any Bank, the Administrative Agent may at any time
or from time to time transfer its functions as Administrative Agent hereunder to
any of its offices wherever located, provided that the Administrative Agent
shall promptly notify the Borrowers and the Banks thereof.
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Section 12.13. Non-Receipt of Funds by the Administrative
Agent. Unless the Administrative Agent shall have been notified by a Bank or a
Borrower (either one as appropriate being the "Payor") prior to the date on
which such Bank is to make payment hereunder to the Administrative Agent of the
proceeds of a Loan or such Borrower is to make payment to the Administrative
Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Administrative Agent, the Administrative Agent
may assume that the Required Payment has been made and may, in reliance upon
such assumption (but shall not be required to), make the amount thereof
available to the intended recipient on such date and, if the Payor has not in
fact made the Required Payment to the Administrative Agent, the recipient of
such payment (and, if such recipient is a Borrower and the Payor Bank fails to
pay the amount thereof to the Administrative Agent forthwith upon demand, such
Borrower) shall, on demand, repay to the Administrative Agent the amount made
available to it together with interest thereon for the period from the date such
amount was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount at a rate per annum equal to the
average daily Federal Funds Rate for such period.
Section 12.14. Withholding Taxes. Each Bank represents to the
Administrative Agent that it is entitled at the date hereof to receive any
payments to be made to it by Cannondale hereunder without the withholding of any
tax and will furnish to the Administrative Agent such forms, certifications,
statements and other documents as the Administrative Agent may request from time
to time to evidence such Bank's exemption from the withholding of any tax
imposed by any jurisdiction or to enable the Administrative Agent to comply with
any applicable laws or regulations relating thereto. Without limiting the effect
of the foregoing, if any Bank is not created or organized under the laws of the
United States of America or any state thereof, in the event that the payment of
interest by the Borrowers is treated for U.S. income tax purposes as derived in
whole or in part from sources from within the U.S., such Bank will furnish to
the Administrative Agent Form 4224 or Form 1001 of the Internal Revenue Service,
or such other forms, certifications, statements or documents, duly executed and
completed by such Bank as evidence of such Bank's exemption from the withholding
of U.S. tax with respect thereto. The Administrative Agent shall not be
obligated to make any payments hereunder to such Bank in respect of any Loan or
such Bank's Commitment until such Bank shall have furnished to the
Administrative Agent the requested form, certification, statement or document.
Section 12.15. Several Obligations and Rights of Banks. The
failure of any Bank to make any Loan to be made by it on the date specified
therefor shall not relieve any other Bank of its obligation to make its Loan on
such date, but no Bank shall be responsible for the failure of any other Bank to
make a Loan to be made by such other Bank. The amounts payable at any time
hereunder to each Bank shall be a separate and independent debt, and each Bank
shall be entitled to protect and enforce its rights arising
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out of this Agreement, and it shall not be necessary for any other Bank to be
joined as an additional party in any proceeding for such purpose.
Section 12.16. Pro Rata Treatment of Loans, Etc. Except to the
extent otherwise provided: (a) each Borrowing under Section 2.7 shall be made
from the Banks, each reduction or termination of the amount of the Revolving
Credit Commitments under Section 2.10 shall be applied to the Revolving Credit
Commitments of the Banks, and each payment of facility fees accruing under
Section 2.14 shall be made for the account of the Banks, pro rata according to
the amounts of their respective used and unused Revolving Credit Commitments;
(b) each conversion under Section 2.8 of Loans of a particular type (but not
conversions provided for by Section 4.4), shall be made pro rata among the Banks
holding Loans of such type according to the respective principal amounts of such
Loans by such Banks; (c) each prepayment and payment of principal of or interest
on Loans of a particular type and a particular Interest Period shall be made to
the Administrative Agent for the account of the Banks holding Loans of such type
and Interest Period pro rata in accordance with the respective unpaid principal
amounts of such Loans of such Interest Period held by such Banks; and (d) if,
pursuant to Section 10.2, the Commitments are duly terminated and all amounts
owing under this Agreement, the Notes and the Letters of Credit become due and
payable, then each payment of principal of or interest on the Loans (whether by
voluntary payment, by realization upon security, by the enforcement of any right
under the Facility Documents or otherwise) shall be made to the Administrative
Agent for the account of the Banks holding Loans pro rata in accordance with the
respective unpaid principal and interest amounts of such Loans held by such
Banks.
Section 12.17. Sharing of Payments Among Banks. If a Bank
shall obtain payment of any principal of or interest on any Loan made by it
through the exercise of any right of setoff, banker's lien, counterclaim, or by
any other means (including any payment obtained from or charged against any
Third Party), it shall promptly purchase from the other Banks participations in
(or, if and to the extent specified by such Bank, direct interests in) the Loans
made by the other Banks in such amounts, and make such other adjustments from
time to time as shall be equitable to the end that all the Banks shall share the
benefit of such payment (net of any expenses which may be incurred by such Bank
in obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrowers agree that any Bank so purchasing a participation (or
direct interest) in the Loans made by other Banks may exercise all rights of
setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Bank to exercise any such right or shall affect the right of any Bank to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrowers.
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Section 12.18. The Syndication Agent. Neither the designation
of Fleet as, nor the title of, Syndication Agent shall impose on Fleet any
duties or obligations greater than those of any other Bank, and the Syndication
Agent, in its capacity as such, has and shall have no duties or liabilities.
ARTICLE 13. MISCELLANEOUS.
Section 13.1. Amendments and Waivers. Except as otherwise
expressly provided in this Agreement, any provision of this Agreement may be
amended or modified only by an instrument in writing signed by the Borrowers,
the Administrative Agent and the Required Banks, or by the Borrowers and the
Administrative Agent acting with the consent of the Required Banks and any
provision of this Agreement may be waived by the Required Banks or by the
Administrative Agent acting with the consent of the Required Banks; provided
that no amendment, modification or waiver shall in any manner, unless by an
instrument signed by all of the Banks or by the Administrative Agent acting with
the consent of all of the Banks: (a) increase or extend the term, or extend the
time or waive any requirement for the reduction or termination, of the
Commitments, (b) increase the Swingline Facility Amount or the L/C Sublimit, (c)
extend any date fixed for the payment (including, without limitation, any
mandatory prepayment) of principal of or interest on any Loan or any fee payable
hereunder, (d) extend the date fixed for payment and reimbursement of
Obligations with respect to Letters of Credit, (e) reduce the amount of any
payment of principal of any Loan or the rate at which interest is payable
thereon or any fee payable hereunder, (f) reduce the amount of any Obligations
with respect to Letters of Credit, (g) release in whole or in part the
Unconditional Guaranty (whether of Cannondale or any domestic Subsidiary), (h)
release all or any substantial part of the Pledged Collateral (as defined in
each of the Pledge Agreement or the Subsidiary Pledge Agreement or the Assigned
Collateral (as defined in the Collateral Assignment of Shareholder Note or the
Collateral Assignment of Officer Note) or the Collateral (as defined in the
Security Agreement) or the Mortgaged Property (as defined in the Mortgages) or
any other Collateral that may at any time hereafter be or become subject to a
security interest or Lien in favor of the Administrative Agent for the benefit
of the Banks pursuant to Section 7.11, (i) alter the terms of Sections 2.8(b),
7.11, 8.1(h), 11.1 12.16, 12.17, 13.5 or this Section 13.1, (j) amend the
definition of the term "Required Banks" or (k) waive any of the conditions
precedent set forth in Article 5 hereof and provided, further, that any
amendment of Section 2.14(b) and Article 12 hereof or any amendment which
increases the obligations of the Administrative Agent hereunder shall require
the consent of the Administrative Agent. No failure on the part of the
Administrative Agent or any Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
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Section 13.2. Usury. Anything herein to the contrary
notwithstanding, the obligations of the Borrowers under this Agreement and the
Notes shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to a Bank limiting rates of interest which may be charged or
collected by such Bank.
Section 13.3. Expenses. The Borrowers shall reimburse the
Administrative Agent and the Banks on demand for all reasonable costs, expenses,
and charges (including, without limitation, reasonable fees and charges of
external legal counsel for the Administrative Agent and each Bank and reasonable
costs allocated by their respective internal legal departments) incurred by the
Administrative Agent or the Banks in connection with the preparation,
performance, enforcement (whether through negotiations, legal proceedings or
otherwise), modification or amendment of this Agreement or the Notes, the
syndication of the Loans, and the administration of this credit facility.
Section 13.4. Survival. The obligations of the Borrowers under
Sections 4.1, 4.5, 4.6, 13.3 and 13.8 shall survive the repayment of the Loans
and the expiration and termination of the Commitments and the Facility
Documents.
Section 13.5. Assignment; Participations.
(a) This Agreement shall be binding upon, and shall
inure to the benefit of, the Borrowers, the Administrative Agent, the Banks and
their respective successors and assigns, except that the Borrowers may not
assign or transfer their rights or obligations hereunder. Each Bank may assign,
or sell participations in, all or any part of any Loan or Commitment to another
bank or other entity, in which event (i) in the case of an assignment, upon
notice thereof by the Bank to the Borrowers with a copy to the Administrative
Agent, the assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights, benefits and obligations as it
would have if it were a Bank hereunder, and the assignor shall, to the extent of
such assignment (unless otherwise provided therein), relinquish its rights and
be released from its obligations hereunder; and (ii) in the case of a
participation, the participant shall have no rights under the Facility Documents
and all amounts payable by the Borrowers under Article 3 shall be determined as
if such Bank had not sold such participation and such Bank's obligations
hereunder shall remain unchanged, such Bank being solely responsible for the
performance of such obligations. Each such assignment shall be to an Eligible
Assignee and shall be in an amount equal to $5,000,000 or an integral multiple
of $1,000,000 in excess thereof. The agreement executed by such Bank in favor of
the participant shall not give the participant the right to require such Bank to
take or omit to take any action hereunder (such Bank retaining the sole right to
enforce the Obligations of the Borrowers relating to the Loans and the Notes and
to approve any amendment, modification, waiver or provision of this Agreement)
except action directly relating to (i) the extension of a payment date with
respect to any portion of the principal of or interest on any amount outstanding
hereunder
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allocated to such participant, (ii) the reduction of the principal amount
outstanding hereunder or (iii) the reduction of the rate of interest payable on
such amount or any amount of fees payable hereunder to a rate or amount, as the
case may be, below that which the participant is entitled to receive under its
agreement with such Bank. Such Bank may furnish any information concerning the
Borrowers in the possession of such Bank from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Bank shall require any such prospective assignee or such participant
(prospective or otherwise) to agree in writing to maintain the confidentiality
of such information. Upon the consummation of any assignment pursuant to this
Section, the assignor, the Administrative Agent and the Borrowers shall make
appropriate arrangements so that, if required, the new Notes are issued to the
assignor or assignee in replacement of the Note(s) assigned. In connection with
any assignment pursuant to this paragraph (a), the assigning Bank shall pay the
Administrative Agent an administrative fee for processing such assignment in the
amount of $2,500.
(b) In addition to the assignments and participations
permitted under paragraph (a) above, any Bank may assign and pledge all or any
portion of its Loans and Note(s) to (i) any affiliate of such Bank or (ii) any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
Section 13.6. Notices. Unless the party to be notified
otherwise notifies the other party in writing as provided in this Section, and
except as otherwise provided in this Agreement, notices shall be delivered in
person or sent by overnight courier, facsimile, ordinary mail, cable or telex
addressed to such party at its "Address for Notices" on the signature page of
this Agreement. Notices shall be effective: (a) on the day on which delivered to
such party in person, (b) on the first Banking Day after the day on which sent
to such party by overnight courier, (c) if given by mail, 48 hours after deposit
in the mails with first-class postage prepaid, addressed as aforesaid, and (d)
if given by facsimile, cable or telex, when the facsimile, cable or telex is
transmitted to the facsimile, cable or telex number as aforesaid; provided that
notices to the Administrative Agent and the Banks shall be effective upon
receipt.
Section 13.7. Setoff. The Borrowers agree that, in addition to
(and without limitation of) any right of setoff, banker's lien or counterclaim a
Bank may otherwise have, each Bank shall be entitled, at its option, to offset
balances (general or special, time or demand, provisional or final) held by it
for the account of the Borrower at any of such Bank's offices, in Dollars or in
any other currency, against any amount payable by the Borrowers to such Bank
under this Agreement or such Bank's Note(s) which is not paid when due
(regardless of whether such balances are then due to the Borrower), in which
case it shall promptly notify the Borrowers and the Administrative Agent
thereof; provided that such Bank's failure to give such notice shall not affect
the validity thereof. Payments by the Borrowers hereunder shall be made without
setoff or counterclaim.
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Section 13.8. Indemnification; Exoneration. In consideration
of the execution and delivery of this Agreement by the Administrative Agent and
the Banks, each Borrower, jointly and severally, will defend, indemnify,
exonerate and hold harmless each Bank, the Fronting Bank, the Swingline Bank,
the Administrative Agent, the Documentation Agent, the Syndication Agent and
their affiliates and each of their respective officers, directors, stockholders,
affiliates, trustees, employee and agents, and each other Person, if any,
controlling such Bank or any of its affiliates (herein collectively called the
"Indemnitees") from and against any and all actions, causes of action, suits,
losses, liabilities and damages, and expenses in connection therewith, including
without limitation reasonable counsel fees and disbursements incurred in the
investigation and defense of claims and actions (herein collectively called the
"Indemnified Liabilities"), incurred by the Indemnitees or any of them as a
result of, or arising out of or relating to the execution, delivery, performance
or enforcement of this Agreement, the Notes, or any other Facility Document, or
any instrument or document contemplated hereby or thereby by any of the
Indemnitees, or the actual or proposed use of the proceeds of the Loans or by
any act, event or transaction related or attendant thereto or contemplated
hereby or thereby, or any action or inaction by any Indemnitee under or in
connection therewith, or the falseness of any representation or warranty made by
or on behalf of a Borrower, except for any Indemnified Liabilities that are
finally judicially determined to have resulted from any Indemnitee's gross
negligence or willful misconduct, and if and to the extent that the foregoing
may be unenforceable for any reason, each Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under applicable law. The obligations of each
Borrower under this Section 13.8 shall be in addition to any liability that such
Borrower may otherwise have and shall survive the payment or prepayment in full
or transfer of any Note, the termination of the Banks' Commitments and
obligations hereunder and the enforcement of any provision hereof or thereof.
SECTION 13.9. JURISDICTION; IMMUNITIES.
(a) EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW
YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE NOTES, AND SUCH BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN
RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW
YORK STATE OR FEDERAL COURT. EACH BORROWER IRREVOCABLY CONSENTS TO THE SERVICE
OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
OF SUCH PROCESS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
BORROWER AT ITS ADDRESS SPECIFIED IN SECTION 13.6. THE BORROWERS AGREE THAT A
FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
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PROVIDED BY LAW. THE BORROWERS FURTHER WAIVE ANY OBJECTION TO VENUE IN SUCH
STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF
FORUM NON CONVENIENS. THE BORROWERS FURTHER AGREE THAT ANY ACTION OR PROCEEDING
BROUGHT AGAINST THE ADMINISTRATIVE AGENT SHALL BE BROUGHT ONLY IN NEW YORK STATE
OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK. THE BORROWERS, THE
ADMINISTRATIVE AGENT AND EACH BANK EACH WAIVES ANY RIGHT IT MAY HAVE TO JURY
TRIAL.
(b) Nothing in this Section 13.9 shall affect the
right of the Administrative Agent or any Bank to serve legal process in any
other manner permitted by law or affect the right of the Administrative Agent or
any Bank to bring any action or proceeding against the Borrowers or their
property in the courts of any other jurisdictions.
(c) To the extent that any Borrower has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, such Borrower hereby irrevocably waives such immunity in
respect of its obligations under this Agreement and the Notes.
Section 13.10. Table of Contents; Headings. Any table of
contents and the headings and captions hereunder are for convenience only and
shall not affect the interpretation or construction of this Agreement.
Section 13.11. Severability. The provisions of this Agreement
are intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 13.12. Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument, and any party hereto may execute this Agreement by signing
any such counterpart.
Section 13.13. Integration. The Facility Documents set forth
the entire agreement among the parties hereto relating to the transactions
contemplated thereby and supersede any prior oral or written statements or
agreements with respect to such transactions.
SECTION 13.14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK.
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Section 13.15. Confidentiality. Each Bank and the
Administrative Agent agrees (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with safe and sound banking
practices, any financial information (other than financial information included
in documents filed with the Securities and Exchange Commission), business plans
and any other non-public information supplied to it by the Borrowers pursuant to
this Agreement which is identified by the Borrowers as being confidential at the
time the same is delivered to the Banks or the Administrative Agent, provided
that nothing herein shall limit the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any of the Banks or the Administrative Agent, (iii) to bank
examiners, auditors or accountants, (iv) in connection with any litigation to
which any one or more of the Banks is a party, (v) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first executes and delivers
to the respective Bank a Confidentiality Agreement in substantially the form of
Exhibit O hereto, or (vi) to affiliates, directors, officers, employees and
representatives of the Banks or the Administrative Agent; provided, further,
that in no event shall any Bank or the Administrative Agent be obligated or
required to return any materials furnished by the Borrowers. Each Bank and the
Administrative Agent, as applicable, shall notify the Borrowers of the
disclosure of any such information pursuant to clauses (i), (iv) and (v) of the
preceding sentence prior to such disclosure, if reasonably practicable, or if
not, as soon thereafter as is reasonably practicable.
Section 13.16. Treatment of Certain Information. The Borrowers
(a) acknowledge that services may be offered or provided to them (in connection
with this Agreement or otherwise) by each Bank or by one or more of their
respective subsidiaries or affiliates and (b) acknowledge that information
delivered to each Bank by the Borrowers may be provided to each such subsidiary
and affiliate.
Section 13.17. Judgment Currency.
(a) The obligations of Cannondale and the Subsidiary
Borrowers under this Agreement, the Notes, the Letters of Credit and the other
Facility Documents to make payments in Dollars or in any Alternative Currency
(the "Obligation Currency") shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Administrative Agent or a Bank
of the full amount of the Obligation Currency expressed to be payable to them
under this Agreement, the Notes, the Letters of Credit and the other Facility
Documents. If for the purpose of obtaining or enforcing judgment against
Cannondale or any Subsidiary Borrower in any court or in any jurisdiction, it
becomes necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made, at the Alternative Currency Equivalent or Dollar
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Equivalent, in the case of any Alternative Currency or Dollars, and, in the case
of other currencies, the rate of exchange (as quoted by the Administrative Agent
or if the Administrative Agent does not quote a rate of exchange on such
currency, by a known dealer in such currency designated by the Administrative
Agent) determined, in each case, as on the day immediately preceding the day on
which the judgment is given (such Banking Day being hereinafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange
prevailing between the Judgment Currency Conversion Date and the date of actual
payment of the amount due, each Obligor covenants and agrees to pay such
additional amounts, if any (but in any event not a lesser amount), as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate of exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining the Alternative
Currency Equivalent or Dollar Equivalent or rate of exchange for this Section
13.17, such amount shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
Section 13.18. Independence of Covenants. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default or Event of Default if such
action is taken or condition exists.
Section 13.19. Time of the Essence. Time and punctuality shall
be of the essence with respect to this instrument, but no delay or failure of
the Administrative Agent or any Bank to enforce any of the provisions herein
contained and no conduct or statement of the Administrative Agent or any Bank
shall waive or affect any of the Administrative Agent's or any Bank's rights
hereunder.
Section 13.20. Reference to and Effect on the Facility
Documents.
(a) Upon the effectiveness of this Agreement, on and
after the date hereof each reference in the Facility Documents to the Credit
Agreement or the Notes, shall mean and be a reference to this Amended and
Restated Credit Agreement or the Notes as amended and restated in connection
with the execution and delivery of this Agreement.
(b) The Existing Credit Agreement is amended and
restated in its entirety by this Agreement and the "Notes" delivered under the
Existing Credit Agreement are amended and restated in their entirety by the
Notes delivered pursuant to this Agreement. The Administrative Agent shall use
reasonable efforts to deliver to the
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Borrowers on the Closing Date the Notes issued to the Banks under the Existing
Credit Agreement marked "REPLACED AND REISSUED;" provided, however, that in any
event, such Notes shall be deemed replaced and superseded as of the Closing Date
upon receipt by the Banks of the Notes issued to the Banks hereunder. All other
Facility Documents shall remain in full force and effect and are hereby ratified
and confirmed. Without limiting the generality of the foregoing, the Security
Agreement and all of the Collateral described therein, the Pledge Agreement and
the Subsidiary Pledge Agreement and all of the Pledged Collateral described
therein, and each other Collateral Document and all of the collateral described
in such Collateral Document, do and shall continue to secure the payment of all
Obligations (as therein defined), in each case as amended hereby.
(c) The execution, delivery and effectiveness of this
Agreement shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Administrative Agent or the Banks under any of
the Facility Documents, nor constitute a waiver of any provision of any of the
Facility Documents.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
BORROWERS:
CANNONDALE CORPORATION
By /s/ Xxxxxxx Xxxx
-----------------------------------------
Name: Xxxxxxx Xxxx
Title: VP-CFO
Address for Notices:
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
CANNONDALE EUROPE B.V.
By /s/ Beppo Xxxxxxxx
-----------------------------------------
Name: Beppo Xxxxxxxx
Title: President
Address for Notices:
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
CANNONDALE JAPAN K.K.
By /s/ Xxxxxxx Xxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
Address for Notices:
00 Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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ADMINISTRATIVE AGENT:
NATIONSBANK, N.A.
By /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: SVP
DOCUMENTATION AGENT:
NATIONSBANK, N.A.
By /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: SVP
SYNDICATION AGENT:
FLEET NATIONAL BANK
By /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
FRONTING BANK:
NATIONSBANK, N.A.
By /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: SVP
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BANKS:
NATIONSBANK, N.A.
By /s/ Xxxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: SVP
Address for Notices:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
THE CHASE MANHATTAN BANK
By /s/ Xxxx X. Aria
-----------------------------------------
Name: Xxxx X. Aria
Title: Vice President
Address for Notices:
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
FLEET NATIONAL BANK
By /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
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XXXXX XXXXXX BANK AND TRUST COMPANY
By /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
BANKBOSTON, N.A.
By /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
Address for Notices:
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
