EXHIBIT 10.1
EXECUTION COPY
SUPPLEMENTAL INDENTURE
This Supplemental Indenture is dated as of July 18, 2001,
among THE DERBY CYCLE CORPORATION, a Delaware corporation ("DCC"), LYON
INVESTMENTS B.V., a company organized under the laws of The Netherlands and a
wholly owned subsidiary of DCC ("Lyon" and, together with DCC, the "Issuers"),
as issuers, and THE BANK OF NEW YORK as successor to IBJ XXXXXXXX BANK & TRUST
COMPANY, a New York banking corporation, as trustee (the "Trustee"). Each
defined term used herein shall have the meaning assigned to it in the Indenture
(hereinafter defined), unless the context hereof otherwise requires or provides.
RECITALS
1. The Issuers and the Trustee have executed an
Indenture dated as of May 14, 1998 (as amended or supplemented, the "Indenture")
providing for the issuance of DM110,000,000 of the Issuers' 9 3/8% Senior Notes
due 2008 (the "Securities").
2. Section 9.02 of the Indenture generally permits the
Indenture to be amended or supplemented, or compliance with any provision of the
Indenture or the Securities to be waived, with the written consent of the
Holders of not less than a majority in principal amount of the Securities then
outstanding.
3. The Issuers have received written consents of Holders
of not less than a majority in the aggregate principal amount of the Securities
outstanding as of June 13, 2001 (the record date fixed by the Issuers pursuant
to the terms of the Indenture) to the amendments and the waiver of compliance
with certain provisions of the Indenture contemplated by Section 1.01 hereof.
4. The Issuers have always treated their business and
enterprises as being separate and independent business entities and have always
held themselves out to the Holders and the Trustee as being separate and
independent business entities.
The Issuers and the Trustee agree as follows for the benefit
of each other and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE I
AMENDMENTS AND WAIVERS WITH RESPECT TO THE INDENTURE
Section 1.01 AMENDMENTS. The Indenture is hereby amended
as follows:
(a) Section 1.01 of the Indenture is amended as follows:
(i) by inserting the following new definitions
in the appropriate alphabetic order:
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"Default Rate" means the interest rate on overdue installments
of interest set forth in the Securities.
"Derby Nederland" means Derby Nederland B.V. together with its
successors and assigns.
"DM Percentage" means on any particular date, the quotient of
(i) the Euro Equivalent of the principal amount of the
Securities then outstanding, divided by (ii) the sum of (A)
the Euro Equivalent of the principal amount of the Securities
then outstanding plus (B) the Euro Equivalent of the principal
amount of the Dollar Securities then outstanding.
"Dollar Indenture" means the Indenture (as supplemented from
time to time), dated as of May 14, 1998, providing for the
issuance of an aggregate principal amount of up to
$100,000,000 of 10% Senior Notes due 2008 among DCC and Lyon,
as issuers, and The Bank of New York as successor to IBJ
Xxxxxxxx Bank & Trust Company, in its capacity as trustee
thereunder.
"Dollar Securities" means the securities issued under the
Dollar Indenture.
"Dollar Trustee" means the party named as trustee in the
Dollar Indenture until a successor trustee replaces it and,
thereafter, means the successor trustee.
"Euro Equivalent" means on any particular date, (i) with
respect to any amount denominated in Euros, such amount in
Euros, (ii) with respect to any amount denominated in
Deutschemarks, such amount divided by 1.95583 and (iii) with
respect to any amount denominated in U.S. Dollars, the average
of the amount of Euros which could be purchased by each of the
Trustee and the Dollar Trustee (in accordance with their
normal banking practices) in the London foreign currency
deposit market with such amount of such currency at the spot
rate of exchange prevailing at or about 11:00 a.m. (London
time) on such date.
"Gazelle Sale" means the sale of Koninklijke Gazelle B.V. by
Derby Nederland to Gazelle Holding B.V., pursuant to the terms
and conditions of the Sale and Purchase Agreement, dated on or
about June 14, 2001, among DCC, Derby Nederland and Gazelle
Holding B.V. (a copy of which was delivered to the Trustee on
June 14, 2001).
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"General Asset Disposition" means any sale, lease (other than
operating leases entered into in the ordinary course of
business), transfer or other disposition (or series of related
sales, leases, transfers or dispositions) by DCC or any
Subsidiary, including any disposition by means of a merger,
consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of (i) any
shares of Capital Stock of a Subsidiary (other than directors'
qualifying shares or shares required by applicable law to be
held by a Person other than DCC or a Subsidiary), (ii) all or
substantially all of the assets of any division or line of
business of DCC or any Subsidiary or (iii) any other assets of
DCC or any Subsidiary outside of the ordinary course of
business of DCC or such Subsidiary; provided, however, that
General Asset Dispositions shall not include (A) the sale or
discount, in each case without recourse, of accounts
receivable arising in the ordinary course of business, but
only in connection with the compromise or collection thereof,
(B) the factoring of accounts receivable arising in the
ordinary course of business pursuant to arrangements customary
in the industry, (C) the licensing of intellectual property,
and (D) sales of accounts receivable, equipment and related
assets (including contract rights) of the type specified in
the definition of the term "Qualified Securitization
Transaction" to a Securitization Entity for the fair market
value thereof, including cash in an amount at least equal to
75% of the fair market value thereof. For the purposes of
clause (D), Purchase Money Securities shall be deemed to be
cash.
"Modified Net Available Cash" from the Gazelle Sale means the
DM Percentage of the aggregate amount of consideration payable
to Lyon or Derby Nederland (including any deferred payment of
principal pursuant to a note or installment receivable or
otherwise and proceeds from the sale or other disposition of
any securities received as consideration, but only as and when
received, but excluding any other consideration received in
the form of assumption by the acquiring Person of Indebtedness
or other obligations relating to properties or assets that are
the subject of the Gazelle Sale or received in any other
non-cash form, and excluding Designated Non-Cash
Consideration) therefrom, in each case net of (i) all legal,
accounting and investment banking fees, and sales commissions,
and all title and recording tax expenses,
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commissions and other fees and expenses incurred, and all
federal, state, provincial, local and foreign taxes required
to be paid or accrued as a liability under U.S. GAAP or Dutch
accounting principles, as a consequence of the Gazelle Sale,
and (ii) all payments made by Derby Nederland or Lyon (whether
directly or through any Affiliate) upon the closing of the
Gazelle Sale on any Indebtedness (including any
collateralisation of such Indebtedness (such amounts
collectively referred to as "Cash Collateral"))or other
amounts due under the Revolving Credit Agreement outstanding
on the date of the closing of the Gazelle Sale.
(b) Section 4.06(a) of the Indenture is amended by
deleting the words "DCC shall not, and shall not permit any Restricted
Subsidiary to make any Asset Disposition unless" in the first sentence and
inserting the following in place of the deleted text:
"DCC shall not, and shall not permit any Restricted Subsidiary
or Unrestricted Subsidiary to, make any General Asset
Disposition where the assets disposed of have a fair market
value, as determined in good faith by the board of directors
of DCC or such Restricted Subsidiary or Unrestricted
Subsidiary, as applicable, that equals or exceeds $5,000,000.
In addition, DCC shall not, and shall not permit any
Restricted Subsidiary to, make any Asset Disposition unless"
(c) Section 5.01 of the Indenture is amended by the
addition of Section 5.01(c) to read as follows:
"(c) Notwithstanding the foregoing, Sections 5.01(a) and
(b) shall not apply to the Gazelle Sale and the Gazelle Sale
shall not be deemed a conveyance or transfer of all or
substantially all of the assets of either of the Issuers or of
any of the Note Guarantors under Sections 5.01(a) or (b),
provided that each of the following conditions are met:
(i) the DM Percentage of the Euro Equivalent of
the first $2,500,000 of the Modified Net Available Cash from
the Gazelle Sale shall be delivered to Derby Nederland upon
the closing of the Gazelle Sale and Derby Nederland shall,
upon its receipt thereof, forthwith distribute such amount to
Lyon (the "Lyon Distribution");
(ii) Lyon shall procure, and shall procure that
Derby Nederland shall procure, that 100% of the Modified Net
Available Cash from the Gazelle Sale (excluding the Lyon
Distribution) (the "Gazelle Sale Proceeds") shall be forthwith
and irrevocably paid from time to time
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directly to the Trustee (to be held by the Trustee for the
benefit of the Holders in accordance with Sections 2.04 and
4.06(c)(2) for the purposes of making the interest payment
under the Securities due on May 15, 2001 (the "May Interest
Payment") and commencing one or more Offers pursuant to
Section 4.06) to be held by the Trustee in the following
account (the "Account"):
The Bank of New York
ABA # 000-000-000
A/C # GLA/111-565
A/C Name: XXX - XXXX Xxxxxxx
Xxx X/X # 000000
Ref: Derby Cycle Corporation;
(iii) Lyon shall procure that Derby Nederland
shall take such actions as are necessary from time to time
(and prior to any dissolution or insolvency proceeding of
Derby Nederland) to effectuate transfers of the residual
beneficial interests in any Gazelle Sale Proceeds received
after the closing of the Gazelle Sale (after application
thereof in accordance with the terms herein) from Derby
Nederland to Lyon;
(iv) immediately prior to any portion of the
Gazelle Sale Proceeds being deposited in the Account, Lyon
shall deliver to the Trustee a written statement certified by
an officer of the Issuers setting forth in reasonable detail
computations evidencing the calculation of the amount of such
portion of the Gazelle Sale Proceeds to be deposited in the
Account;
(v) within 2 days of the closing of the Gazelle
Sale, the Trustee shall apply the Gazelle Sale Proceeds in the
Account to pay in full at the Default Rate the May Interest
Payment;
(vi) within 7 days of the making of the May
Interest Payment, Lyon will commence an Offer solely with
respect to the Securities and the Dollar Securities pursuant
to Section 4.06(b), (c) and (d) and Section 4.06(b), (c) and
(d) of the Dollar Indenture for an Offer Amount equal to 100%
of the Gazelle Sale Proceeds held in the Account as of such
date and 100% of the amount held in the account (the "Dollar
Indenture Account") under Section 5.01(c)(ii) of the Dollar
Indenture as of such date (the "Dollar Initial Gazelle
Proceeds");
(vii) the Trustee and the Dollar Trustee shall
combine the Dollar Initial Gazelle Proceeds in the Dollar
Indenture Account with the Gazelle Sale Proceeds in the
Account for purposes of purchasing Securities and Dollar
Securities which are to be purchased in whole or in part in
connection with an Offer;
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(viii) the Issuers shall cause Derby Nederland to
deliver at the closing of the Gazelle Sale to the escrow agent
for the escrow account established in connection with the
Gazelle Sale (the "SPA Holdback Account") written notice
irrevocably instructing such escrow agent to forthwith deliver
the Gazelle Sale Proceeds released from the SPA Holdback
Account from time to time to the Trustee for depositing in the
Account;
(ix) DCC shall deliver at the closing of the
Gazelle Sale to Chase Manhattan International Ltd., as
facility agent and security agent under the Revolving Credit
Agreement ("Chase"), written notice satisfactory to the
Trustee irrevocably instructing Chase to forthwith deliver the
DM Percentage of Cash Collateral released by Chase from time
to time to the Trustee for depositing in the Account;
(x) within 7 days of any portion of the Gazelle
Sale Proceeds being released from the SPA Holdback Account and
deposited into the Account, Lyon shall, to the extent that
more than EUR 5,000,000 is held by the Trustee in the Account
at such time, commence an Offer solely with respect to the
Securities and the Dollar Securities pursuant to Section
4.06(b), (c) and (d) and Section 4.06(b), (c) and (d) of the
Dollar Indenture for an Offer Amount equal to 100% of the
Gazelle Sale Proceeds held in the Account as of such date and
100% of the amounts held in the Dollar Indenture Account as of
such date (the "Dollar Released Gazelle Proceeds");
(xi) the Trustee and the Dollar Trustee shall
combine the Gazelle Sale Proceeds in the Account with the
Dollar Released Gazelle Proceeds in the Dollar Indenture
Account for purposes of purchasing Securities and Dollar
Securities which are to be purchased in whole or in part in
connection with an Offer;
(xii) Lyon shall only use the Lyon Distribution to
make first priority secured revolving loans to DCC pursuant to
the secured revolving note in substantially the form attached
hereto as Exhibit A and, forthwith upon the earlier of January
15, 2002 or the closing of a sale or disposition of
substantially all of the assets of DCC, Lyon shall procure
that the Lyon Distribution be irrevocably paid to the Trustee
(to be held by the Trustee for the benefit of the Holders in
accordance with Section 2.04 and 4.06(c)(2) in the Account for
the purpose of commencing one or more Offers pursuant to
Section 4.06); and
(xiii) until all of the Gazelle Sale Proceeds have
been irrevocably paid to the Trustee, Lyon shall not incur any
Indebtedness.
Subject to the provisions of Section 4.06(d), if the
terms of this Section 5.01(c) are inconsistent with the terms
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of Section 4.06, then the terms of this Section 5.01(c) shall
govern. For the purposes of Section 5.01(c), the term "Lyon"
shall include all successors or assigns of Lyon Investments
B.V.
ARTICLE II
MISCELLANEOUS
Section 2.1 FURTHER ASSURANCES. The parties will execute
and deliver such further instruments and do such further acts and things as may
be reasonably required to carry out the intent and purpose of this Supplemental
Indenture.
Section 2.2 TRUST INDENTURE ACT CONTROLS. If any
provision of this Supplemental Indenture limits, qualifies or conflicts with
another provision hereof that is required to be included in this Supplemental
Indenture by the TIA, the required provision shall control.
Section 2.3 COUNTERPART ORIGINALS. This Supplemental
Indenture may be executed in any number of counterparts, each of which so
executed shall be an original, but all of them together represent the same
agreement.
Section 2.4 HEADINGS. Headings of the Sections of this
Supplemental Indenture have been inserted for convenience of reference only, are
not to be considered a part of this Supplemental Indenture, and shall in no way
modify or restrict any of the terms of provisions hereof.
Section 2.5 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 2.6 SUCCESSORS AND ASSIGNS. All agreements of
the Issuers and the Trustee in this Supplemental Indenture shall bind their
successors. All Securityholders and every subsequent Holder of any Security
shall be bound by this Supplemental Indenture.
Section 2.7 SEVERABILITY. In case any provision of this
Supplemental Indenture shall be invalid, illegal, or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 2.8 RATIFICATION OF INDENTURE; SUPPLEMENTAL
INDENTURES PART OF INDENTURE. Except as expressly amended hereby, the Indenture
is in all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect. This Supplemental
Indenture shall form a part of the Indenture for all
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purposes, and every Holder of Securities heretofore or hereafter authenticated
and delivered shall be bound hereby.
Section 2.9 NO THIRD PARTY BENEFITS. Nothing in this
Supplemental Indenture, express or implied, shall give to any Person, other than
the parties hereto and their successors under the Indenture, and the
Securityholders, any benefit or any legal or equitable right, remedy or claim
under the Indenture.
Section 2.10 THE TRUSTEE. The Trustee shall not be
responsible in any manner for or in respect of the validity or sufficiency of
this Supplemental Indenture, or for or in respect of the recitals contained
herein, all of which recitals are made by the Issuers individually.
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IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first written above.
THE DERBY CYCLE CORPORATION
By: /s/ Xxxx Xxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
LYON INVESTMENTS B.V.
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Managing Director
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxx Xxxxx
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Name: Xxxx Xxxxx
Title: Assistance Vice President
