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EXHIBIT 10.1.10
FIRST AMENDMENT TO CREDIT AGREEMENT
FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of October __,
1997 (this "Amendment"), by and 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 to the Credit Agreement (as
defined below) (individually, a "Subsidiary Borrower", collectively the
"Subsidiary Borrowers" and, together with Cannondale, the "Borrowers"), each of
the banks which is a signatory to the Credit Agreement (individually an
"Existing Bank" and collectively the "Existing Banks"), NATIONSBANK, N.A., a
national banking association organized under the laws of the United States of
America, as administrative agent for the Banks (as defined in the Credit
Agreement) (in such capacity, together with its successors in such capacity, the
"Administrative Agent") and as fronting bank (in such capacity, together with
its successors in such capacity, the "Fronting Bank"), ABN AMRO BANK N.V., a
Netherlands banking corporation acting through its duly licensed New York Branch
("ABN AMRO"), as documentation agent for the Banks (in such capacity, together
with its successors in such capacity, the "Existing Documentation Agent") and as
syndication agent for the Banks (in such capacity, together with its successors
in such capacity, the "Existing Syndication Agent"), and 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"; Chase and State Street may hereinafter be
referred to individually as a "New Bank" and collectively as the "New Banks").
Background
A. The Borrowers, the Existing Banks, the Administrative Agent, the
Fronting Bank, the Existing Documentation Agent and the Existing Syndication
Agent are parties to that Certain Credit Agreement dated as of June 9, 1997 (The
"Credit Agreement").
B. The parties hereto wish to amend the credit agreement as herein
provided.
C. Capitalized terms not otherwise defined shall have the meanings
ascribed to them in the Credit Agreement after giving effect to this Amendment.
Agreement
In consideration of the Background, which is incorporated by
reference, the parties hereto, intending to be legally bound, hereby agree as
follows:
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1. Modifications. All the terms and provisions of the Credit Agreement
and the Facility Documents shall remain in full force and effect except as
follows:
(a) The definition of "Banks" contained in the preamble of the
Credit Agreement is deleted and the following is substituted therefor:
"Banks" means NationsBank, N.A., Fleet National Bank, The Chase
Manhattan Bank, and State Street Bank and Trust Company.
(b) Clause (d) of the definition of "Acceptable Acquisition"
contained in Section 1.1 of the Credit Agreement is deleted and the following
clause is substituted therefor:
(d) for which the certificate specified in Section 7.8(l) was
timely delivered.
(c) The definition of "Commitment" contained in Section 1.1 of the
Credit Agreement is deleted and the following is substituted therefor:
"Commitment" means, with respect to each Bank, the
obligation of such Bank to make its Loans and participate in
Letters of Credit 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.: $20,000,000
Fleet National Bank: $20,000,000
The Chase Manhattan Bank: $17,500,000
State Street Bank and Trust Company: $12,500,000
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Total: $70,000,000
;provided, however, that the Commitment of each Bank shall be
decreased on a quarterly basis by an amount (each quarter)
equal to its Commitment Percentage multiplied by $1,250,000
commencing on September 9, 1998 and on the ninth day of each
December, March, June and September thereafter and,
accordingly, the total Commitments shall be decreased on a
quarterly basis by an amount equal to $1,250,000 on September
9, 1998 and on the ninth day of each December, March, June and
September thereafter.
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(d) The definition of "Swingline Facility Amount" contained in
Section 1.1 of the Credit Agreement is deleted and the following is substituted
therefor:
"Swingline Facility Amount" shall mean the
independent obligation of the Swingline Bank to make Swingline
Loans pursuant to Section 2.2 hereof in an aggregate amount at
any one time outstanding up to but not exceeding $10,000,000.
(e) The definition of "Swingline Loans" contained in Section
1.1 of the Credit Agreement is deleted and the following is substituted
therefor:
"Swingline Loans" means, the Loans made by the
Swingline Bank pursuant to Section 2.2 hereof, which Swingline
Loans shall in no event exceed $10,000,000 in aggregate
principal amount outstanding at any one time.
(f) The definition of "Termination Date" contained in Section
1.1 of the Credit Agreement is deleted and the following is substituted
therefor:
"Termination Date" means September 9, 2000; 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.)
(g) Section 2.4 of the Credit Agreement is deleted and the
following is substituted therefor:
Section 2.4 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.
(h) Section 9.2 to the Credit Agreement is deleted and the
following is substituted therefor:
Section 9.2 Minimum Tangible Net Worth. The Borrowers
shall maintain at all times a Consolidated Tangible Net Worth,
as certified at the end of each Fiscal Quarter of the
Borrowers, of not less than the sum of (x) eighty percent
(80%) of the Consolidated Tangible Net Worth of the
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Borrowers at the end of the Fiscal Quarter ending March 29,
1997 (one hundred percent (100%) of the Consolidated Tangible
Net Worth of the Borrowers at such date being $76,594,000),
plus (y) the Fiscal Quarter Net Worth Increase Amounts of the
Borrowers for the Fiscal Quarter ending June 30, 1997, plus
(z) the sum of the Fiscal Year Net Worth Increase Amounts of
the Borrowers for each Fiscal Year (commencing with the 1998
Fiscal Year of the Borrowers ending approximately June 30,
1998); provided however, that at such time (and thereafter) as
Cannondale has spent $12,000,000 (from and after September 1,
1997) for the repurchase of its publicly traded shares of
common stock, the Borrowers shall maintain at all times a
Consolidated Tangible Net Worth, as certified at the end of
each Fiscal Quarter of the Borrowers, of not less than the sum
of (i) $58,000,000, plus (ii) the Fiscal Quarter Net Worth
Increase Amounts of the Borrowers for the Fiscal Quarters
ending on or about March 31, 1998 and June 30, 1998, plus
(iii) the sum of the Fiscal Year Net Worth Increase Amounts of
the Borrowers for each Fiscal Year (commencing with the 1999
Fiscal Year of the Borrowers ending approximately June 30,
1999).
(i) Section 9.3 to the Credit Agreement is deleted and the
following is substituted therefor:
Section 9.3 Leverage Ratio. The Borrowers shall
maintain at all times a ratio of Consolidated Funded Debt to
Total Capitalization of not greater than 0.50 to 1.0; provided
however, that at such time (and thereafter until June 30,
1998) as Cannondale has spent $12,000,000 (from and after
September 1, 1997) for the repurchase of its publicly traded
shares of common stock, such ratio of Consolidated Funded Debt
to Total Capitalization shall be increased to not greater than
0.55 to 1.0; and provided, further, however, that on June 30,
1998, such ratio of Consolidated Funded Debt to Total
Capitalization shall revert back to not greater than 0.5 to
1.0.
(j) The following Section 9.4 is added to the Credit Agreement
following Section 9.3:
Section 9.4 Debt Service Coverage Ratio. The
Borrowers shall maintain at all times, as certified at the end
of each Fiscal Quarter of the Borrowers, a ratio of Funded
Debt to EBITDA (for the four Fiscal Quarters then ended) of
not greater than 3.0 to 1.0.
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2. Acknowledgment.
(a) Each of the New Banks (i) confirms that it has received a
copy of the Credit Agreement and the Facility Documents, together with copies of
the financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Amendment; (ii) agrees that it will, independently
and without reliance upon the Agents or any of the Existing Banks and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Administrative Agent to
take such action as agents on its behalf and to exercise such powers under the
Credit Agreement and the Facility Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank.
(b) On and as of the date upon which each of the New Banks
delivers the amounts referred to in Section 4(d) of this Amendment, each New
Bank shall become a "Bank" under, and for all purposes of, the Credit Agreement
and the Facility Documents. On and as of the effectiveness of this Agreement,
and provided that all Obligations to ABN AMRO of the Borrowers have been paid in
full, ABN AMRO shall cease to be a "Bank" under, and for all purposes of, and
shall have no further duties, rights, or obligations arising out of or relating
to the Credit Agreement and the Facility Documents.
3. Assumption of Roles of Documentation Agent and Syndication
Agent.
(a) The Existing Documentation Agent hereby resigns as
Documentation Agent and NationsBank, N.A. (the "New Documentation Agent") hereby
agrees to be designated the Documentation Agent under the Credit Agreement. The
New Documentation Agent shall become the "Documentation Agent" under, and for
all purposes of, the Credit Agreement and the Facility Documents.
(b) The Existing Syndication Agent hereby resigns as
Syndication Agent and Fleet National Bank (the "New Syndication Agent") hereby
agrees to be designated the Syndication Agent under the Credit Agreement.
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 it is understood that the Syndication Agent, in its capacity as such, has
and shall have no duties or liabilities.
4. Conditions to Effectiveness. This Amendment shall not be
effective until such date as the Administrative Agent shall have received the
following, all in form, scope and content acceptable to the Administrative Agent
and Lenders in their sole discretion:
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(a) This Amendment, duly executed by the parties hereto;
(b) New revolving promissory notes duly executed by the
Borrowers and delivered to the Banks in accordance with Section 2.3(a) of the
Credit Agreement, in exchange for the existing revolving promissory notes to be
surrendered to the Agent by each of the Existing Banks;
(c) A new swingline note duly executed by the Borrowers and
delivered to the Swingline Bank in accordance with Section 2.3(b) of the Credit
Agreement, in exchange for the existing revolving swingline note to be
surrendered to the Agent by the Swingline Bank;
(d) From each New Bank, for the account of the Existing Banks,
an amount equal to such New Bank's Commitment Percentage of the outstanding
Loans;
(e) Confirmation from ABN AMRO that all Obligations of the
Borrowers to ABN AMRO have been paid in full; and
(f) Such other agreements and adjustments as the
Administrative Agent shall reasonably require.
5. Reaffirmation By The Borrowers. Each of the Borrowers acknowledges
and agrees, and reaffirms, both prior to and after taking into account this
Amendment, that each is legally, validly and enforceably indebted to the
Existing Banks and the New Banks under the Notes without defense, counterclaim
or offset, and that each is legally, validly and enforceably liable to the
Existing Banks and the New Banks for all costs and expenses of collection and
reasonable attorneys' fees as and to the extent provided in this Amendment, the
Credit Agreement, the Notes and the Facility Documents. Each of the Borrowers
hereby restates and agrees to be bound by all covenants contained in the Credit
Agreement and the Facility Documents, as amended hereby, and hereby reaffirms
that all of the representations and warranties contained in the Credit Agreement
and the Facility Documents, as amended, remain true and correct in all material
respects with the exception that the representations and warranties regarding
the financial statements described therein are deemed true as of the date made.
Each of the Borrowers represents that except as set forth in the Credit
Agreement and the Facility Documents, there are not pending, nor to each
Borrower's knowledge threatened, legal proceedings to which any of the Borrowers
is a party, which materially or adversely affect the transactions contemplated
by this Amendment or the ability of any of the Borrowers to conduct its business
on a consolidated basis. Cannondale Corporation and Cannondale Europe B.V. each
acknowledge and represent that the resolutions of each dated May 28, 1997, and
June 9, 1997, respectively, remain in full force and effect and have not been
amended, modified, rescinded or otherwise abrogated.
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6. Reaffirmation re: Collateral. Cannondale reaffirms the liens,
security interests and pledges granted to NationsBank, N.A., as Administrative
Agent, for the benefit of the Banks pursuant to the Facility Documents to secure
the obligations of each Borrower thereunder.
7. Other Representations By The Borrowers. Each of the Borrowers
represents and confirms that (a) no Default or Event of Default has occurred and
is continuing and neither the Agents nor the Existing Banks nor the New Banks
has given its consent to or waived any Default or Event of Default and (b) the
Credit Agreement and the other Facility Documents, as amended, are in full force
and effect and enforceable against the Borrowers in accordance with the terms
thereof. Each of the Borrowers represents and confirms that as of the date
hereof, each has no claim or defense (and the Borrowers each hereby waive every
claim and defense as of the date hereof) against the Agents, or the Existing
Banks or the New Banks arising out of or relating to the Credit Agreement and
the other Facility Documents, as amended, or the making, administration or
enforcement of the Loans and the remedies provided for under the Facility
Documents.
8. No Waiver By The Banks. Each of the Borrowers acknowledges that (a)
by the execution by each of this Amendment, neither the Existing Banks nor the
New Banks are waiving any Default, whether now existing or hereafter occurring,
disclosed or undisclosed, by the Borrowers under the Facility Documents and (b)
the Existing Banks and the New Banks reserve all rights and remedies available
to them under the Facilities Documents and otherwise.
9. Miscellaneous.
(a) This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
(b) This Amendment and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with, the
laws of the State of New York.
(c) This Amendment shall be deemed a, and included in the
definition of, Facility Document under the Credit Agreement for all purposes.
(d) The Credit Agreement, as amended hereby, remains in full
force and effect in accordance with its terms.
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IN WITNESS WHEREOF, the parties have executed this Amendment
on the date first written above.
BORROWERS:
CANNONDALE CORPORATION
By /s/ XXXXXX X. XXXXXXXXXX
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Name: Xxxxxx X. Xxxxxxxxxx
Title: President
CANNONDALE EUROPE B.V.
By /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx
Title: Managing Director
CANNONDALE JAPAN KK
By /s/ XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
Title: President
ADMINISTRATIVE AGENT:
NATIONSBANK, N.A.
By /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
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EXISTING DOCUMENTATION AGENT:
ABN AMRO BANK N.V. NEW YORK BRANCH
By /s/ XXXXX X. XXXXX
/s/ XXXXXXX X.XXXXXXX
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Name: Xxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
Vice President
NEW DOCUMENTATION AGENT:
NATIONSBANK, N.A.
By /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
EXISTING SYNDICATION AGENT:
ABN AMRO BANK N.V. NEW YORK BRANCH
By /s/ XXXXX X. XXXXX
/s/ XXXXXXX X.XXXXXXX
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Name: Xxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
Vice President
NEW SYNDICATION AGENT:
FLEET NATIONAL BANK
By /s/ XXXXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
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FRONTING BANK:
NATIONSBANK, N.A.
By /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
EXISTING BANKS:
NATIONSBANK, N.A.
By /s/ XXXXX XXXXXXXXX
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
FLEET NATIONAL BANK
By /s/ XXXXXXXX X. XXXXXXX
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Name: Xxxxxxxx X. Xxxxxxx
Title: Vice President
ABN AMRO BANK N.V. NEW YORK BRANCH
By /s/ XXXXX X. XXXXX
/s/ XXXXXXX X.XXXXXXX
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Name: Xxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
Vice President
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NEW BANKS:
THE CHASE MANHATTAN BANK
By /s/ XXXX XXXXX
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Name: Xxxx Xxxxx
Title: Vice President
STATE STREET BANK AND TRUST COMPANY
By /s/ XXXXXX X. XXXXXXX
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Name: Xxxxxx X. Xxxxxxx
Title: Vice President
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