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Exhibit 10(a)
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FOURTH AMENDMENT AGREEMENT
--------------------------
FOURTH AMENDMENT AGREEMENT (this "AMENDMENT AGREEMENT") dated as of July
31, 1995 by and among (1) CML Group, Inc. (the "BORROWER"), (2) Citibank, N.A.
("CITIBANK"), BayBank Boston, N.A. ("BAYBANK") and The First National Bank of
Boston ("FNBB") as lenders (collectively, the "LENDERS" and individually, a
"LENDER"), and (3) Citibank as agent (the "AGENT") for the Lenders, amending a
certain Third Amended and Restated Revolving Credit Agreement dated as of July
31, 1993 among the Borrower, the Lenders and the Agent (the "ORIGINAL LOAN
AGREEMENT"), as amended by a certain Amendment Agreement dated as of May 15,
1994 (the "FIRST AMENDMENT"), as further amended by a certain Second Amendment
Agreement dated as of June 1, 1994 (the "SECOND AMENDMENT"), as further amended
by a certain Third Amendment Agreement dated as of April 28, 1995 (the "THIRD
AMENDMENT")(the Original Loan Agreement, the First Amendment, the Second
Amendment and the Third Amendment are collectively referred to as the "LOAN
AGREEMENT"). All capitalized terms used herein which are defined in the Loan
Agreement shall have the same meanings herein as therein.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of the Loan Agreement, the Lenders may make
Advances to the Borrower in the original principal amount of up to $60,000,000;
and
WHEREAS, pursuant to the Loan Agreement, the Borrower executed and
delivered the following: (i) a Third Amended and Restated Revolver Note dated
as of July 31, 1993 in the original principal amount of up to $25,716,000 in
favor of Citibank (the "CITIBANK NOTE"); (ii) a Third Amended and Restated
Revolver Note dated as of July 31, 1993 in the original principal amount of up
to $17,142,000 in favor of BayBank (the "BAYBANK NOTE"); and (iii) a Third
Amended and Restated Revolver Note dated as of July 31, 1993 in the original
principal amount of up to $17,142,000 in favor of FNBB (the "FNBB NOTE") (the
Citibank Note, the BayBank Note and the FNBB Note are collectively referred to
herein as the "NOTES"); and
WHEREAS, the Borrower has requested that the Lenders and Agent amend
certain provisions of the Loan Agreement as further set forth herein; and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to modify the
Loan Agreement pursuant to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. DEFINITIONS. Capitalized terms used herein without definition
that are defined in the Loan Agreement shall have the same meanings herein as
therein.
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Section 2. RATIFICATION OF EXISTING AGREEMENTS. All of the Borrower's
obligations and and liabilities to the Lenders and the Agent as evidenced by or
otherwise arising under the Loan Agreement, the Notes and the other Loan
Documents, except as otherwise expressly modified in this Amendment Agreement
upon the terms set forth herein, are, by the Borrower's execution of this
Amendment Agreement, ratified and confirmed in all respects. In addition, by
the Borrower's execution of this Amendment Agreement, the Borrower represents
and warrants that no counterclaim, right of set-off or defense of any kind
exists or is outstanding with respect to such obligations and liabilities. The
Borrower acknowledges and agrees that this Amendment Agreement shall be
included in the definition of Loan Documents under the Loan Agreement.
Section 3. REPRESENTATIONS AND WARRANTIES. All of the representations and
warranties made by the Borrower in the Loan Agreement, the Notes and the other
Loan Documents are true and correct on the date hereof as if made on and as of
the date hereof, except to the extent that any of such representations and
warranties relate by their terms to a prior date.
Section 4. CONDITIONS PRECEDENT. (a) The effectiveness of the amendments
contemplated hereby shall be subject to the satisfaction on or before September
28, 1995 hereof of each of the following conditions precedent:
(i) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties made by the Borrower herein, whether directly or
incorporated by reference, shall be true and correct on the date hereof, except
as provided in Section 3 hereof.
(ii) PERFORMANCE; NO EVENT OF DEFAULT. The Borrower shall have
performed and complied in all material respects with all terms and conditions
herein required to be performed or complied with by it prior to or at the time
hereof, and there shall exist no Default or Event of Default or condition
which, with either or both the giving of notice or the lapse of time, would
result in an Event of Default upon the execution and delivery of this Amendment
Agreement.
(iii) DELIVERY. The parties hereto shall have executed and
delivered this Amendment Agreement together with Fourth Amended and Restated
Notes executed in favor of each of the Lenders, each in form and substance
satisfactory to the Lenders and Agent.
(iv) FEES AND EXPENSES. The Borrower shall have paid to the
Agent in immediately available funds a non-refundable amendment fee equal to
$150,000 for the accounts of the Lenders in accordance with their respective
Commitment Percentages proposed to be in effect on the Commitment Effective
Date pursuant to Section 5.2 hereof. In addition, the Borrower shall have paid
all fees and expenses incurred by the Agent in connection with this Amendment
Agreement, the Loan Agreement or the other Loan Documents on or prior to the
date hereof.
(b) In addition to the conditions precedent set forth in clause (a) of
Section 4 above, the effectiveness of the Amendments contemplated by Section
5.1, 5.2, and clauses (f) and (h) of Section 5.14 hereof shall be subject to
the satisfaction prior to the effectiveness thereof to each of the following
conditions precedent:
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(i) CORPORATE ACTION. The Agent shall receive evidence satisfactory
to it that all requisite corporate action necessary for the valid execution,
delivery and performance by the Borrower and its Subsidiaries of this Amendment
Agreement and all other instruments and documents delivered by the Borrower and
its Subsidiaries in connection therewith shall have been duly and effectively
taken.
(ii) The Agent shall have received from Xxxx & Xxxx, counsel to the
Borrower, a favorable opinion addressed to the Agent and the Lenders in form
and substance satisfactory to the Agent.
5. AMENDMENTS TO THE LOAN AGREEMENT.
---------------------------------
5.1 Section 1.01(b) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"(b) COMMITMENT TO LEND. Subject to the terms and
conditions set forth in this Agreement, each of the Lenders
severally agrees to lend to the Borrower and the Borrower
may borrow, repay, and reborrow from time to time between
the Effective Date and the Final Maturity Date upon notice
by the Borrower to the Agent given in accordance with
Section 1.02 hereof, such sums as are requested by the
Borrower up to a maximum aggregate amount Outstanding (after
giving effect to all amounts requested) at any one time
equal to such Lender's Commitment MINUS such Lender's
Commitment Percentage of the sum of the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations; PROVIDED
that the sum of the Outstanding amount of the Advances
(after giving effect to all amounts requested) PLUS the
Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Total
Commitment. The Advances shall be made PRO RATA in
accordance with each Lender's Commitment Percentage. Each
request for an Advance hereunder shall constitute a
representation and warranty by the Borrower that the
conditions set forth in Section 4.01 and Section 4.02 have
been satisfied on the date of such request. Each Borrowing
of a Base Rate Advance under this Section 1.01(a) shall be
in an aggregate amount of $500,000 or an integral multiple
thereof. Each Borrowing of a Eurodollar Rate Advance under
this Section 1.01(a) shall be in the aggregate amount of
$5,000,000 or an integral multiple thereof. Each Borrowing
under this Section 1.01(a) shall consist of Advances made on
the same day by each Lender ratably according to the
respective Commitment Percentages of the Lenders. Within
the limits of each Lender's Commitment, the Borrower may
borrow, prepay pursuant to Section 1.08, and reborrow under
this Section 1.01(a)."
5.2. Section 1.01(c) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
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"(c) (i) During the period beginning on July 31, 1995 and
ending on the Commitment Effective Date, each Lender's
Commitment Percentage shall be as follows:
Lender Commitment Percentage
-------- ---------------------
Citibank 42.86%
BayBank 28.57%
FNBB 28.57%
Total 100.00%
(ii) During the period beginning on the Commitment
Effective Date and ending on December 29, 1995, each
Lender's Commitment Percentage shall be as follows:
Lender Commitment Percentage
-------- ---------------------
Citibank 40.00%
BayBank 30.00%
FNBB 30.00%
Total 100.00%
(iii) From and after December 30, 1995, each Lender's
Commitment Percentage shall be as follows:
Lender Commitment Percentage
-------- ---------------------
Citibank 42.86%
BayBank 28.57%
FNBB 28.57%
Total 100.00%
(iv) On and as of the date of any increase of the
Total Commitment or change in the respective Commitment
Percentages of the Lenders pursuant to the terms of this
Agreement, the Lenders shall make such assignments and
assumptions of Loans and Commitments as shall be necessary
in the opinion of the Agent to effectuate any such increase
or change."
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5.3. Section 1.05 of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"1.05. Reduction of Total Commitment.
-----------------------------
(a) The Total Commitment shall be immediately and
irrevocably reduced by an amount equal to (i) one hundred
percent (100%) of any Net Cash Proceeds in an aggregate
amount on a cumulative basis of up to and including eight
million dollars ($8,000,000) received by the Borrower or any
Subsidiary after the date hereof in connection with any
sales of its properties and assets not in the ordinary
course of business (any such sales being referred to herein
as "REDUCTION SALES"), (ii) zero percent (0%) of any Net
Cash Proceeds in excess of eight million dollars
($8,000,000) in the aggregate on a cumulative basis but less
than or equal to eighteen million dollars ($18,000,000) in
the aggregate on a cumulative basis received by the Borrower
or any Subsidiary after the date hereof in connection with
Reduction Sales, (iii) fifty percent (50%) of any Net Cash
Proceeds in excess of eighteen million dollars ($18,000,000)
in the aggregate on a cumulative basis received by the
Borrower or any Subsidiary after the date hereof in
connection with Reduction Sales constituted of sales of the
properties and assets of any of the First Tier Companies not
in the ordinary course of business (to the extent permitted
by the Majority Lenders), excluding any sales of NordicTrack
accounts receivable ("NordicTrack Receivables"), (iv) fifty
percent (50%) of any Net Cash Proceeds in excess of eighteen
million dollars ($18,000,000) in the aggregate on a
cumulative basis received by the Borrower or any Subsidiary
after the date hereof in connection with Reduction Sales
constituted of sales of NordicTrack Receivables and any of
the other properties and assets of the Borrower and its
Subsidiaries (other than the properties and assets of any of
the First Tier Companies) not in the ordinary course of
business (to the extent permitted by the Majority Lenders)
until such time as the Total Commitment is equal to or less
than $55,000,000, (v) zero percent (0%) of any Net Cash
Proceeds received by the Borrower or any Subsidiary from the
sales of those assets and properties subject to the
operation of clause (iv) hereof to the extent the Total
Commitment would not be required to be reduced in connection
therewith pursuant to the operation of clause (iv) hereof
(to the extent such sales are permitted by the Majority
Lenders) and (vi) eighty-five percent (85%) of the Net Cash
Proceeds of any Senior Debt Securities issued by the
Borrower or any Subsidiary after the date hereof, provided
that nothing set forth in this Section 1.05(a) shall alter
or modify the Borrower's obligations set forth in Section
6.02(e) or (j) hereof. Without limiting the generality of
the foregoing, for the purposes of calculating reductions of
the Total Commitment required by the operation of Section
1.05(a)(iv) the purchase by or assignment to any Person (a
"THIRD-PARTY CREDITOR") by the Borrower or any of its
Subsidiaries or the underwriting by a Third-Party Creditor
of credit extended to any retail purchasers of goods sold by
the Borrower or any of its Subsidiaries pursuant to an
ongoing underwriting arrangement facilitated by the Borrower
or any of
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its Subsidiaries (excluding so-called "credit card"
transactions carried out in the ordinary course of business
of the Borrower and its Subsidiaries and which are
consistent with past practices) shall be deemed to be the
sale of an asset not in the ordinary course of business and
trigger the commitment reduction obligations set forth in
Section 105(a)(iv), as applicable."
(b) The Borrower shall also have the right, upon at
least two (2) Business Days' notice to the Agent, to
terminate in whole or reduce ratably in part the unused
portions of the Total Commitment of the Lenders, PROVIDED
that each partial reduction shall be in an amount equal to
$5,000,000 or an integral multiple thereof.
(c) Upon the occurrence of a reduction in the Total
Commitment as contemplated by paragraphs (a) and (b) of this
Section 1.05, the respective Commitments of the Lenders
shall be reduced PRO RATA to an amount equal to their
respective Commitment Percentages of the Total Commitment in
effect immediately after such reduction.
(d) No reduction of the Total Commitment as
contemplated by paragraphs (a), (b) or (c) of this Section
1.05 may be reinstated.
(e) If at any time the sum of (i) the aggregate
principal amount of all Advances Outstanding PLUS (ii) the
Maximum Drawing Amount and all Unpaid Reimbursement
Obligations, exceeds the Total Commitment, then the Borrower
shall immediately pay the amount of such excess to the Agent
for the respective accounts of the Lenders for application
to the Advances.
(f) The Total Commitment shall be reduced to $0 and the
Advances shall become due and payable in full on the Final
Maturity Date."
5.4. Section 2.01(a) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"(a) Subject to the terms and conditions hereof, the
Issuing Bank, on behalf of the Lenders and in reliance on
the agreement of the Lenders set forth in Section 2.01(b)
hereof and upon the representations and warranties of the
Borrower contained herein and in the other Loan Documents,
agrees to issue, extend, and renew for the account of the
Borrower one or more standby and trade letters of credit
(individually, a "LETTER OF CREDIT" and collectively, the
"LETTERS OF CREDIT"), in such form as may be requested from
time to time by the Borrower and agreed to by the Issuing
Bank, from and including the Effective Date to the date
which is three (3) calendar months prior to the then
scheduled Final Maturity Date; PROVIDED, HOWEVER, that,
after giving effect to such request, the sum of (i) the
aggregate Maximum Drawing Amount, (ii) any Unpaid
Reimbursement Obligations and (iii) the aggregate
Outstanding Advances shall not exceed at any time the Total
Commitment in effect at such time,
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and PROVIDED FURTHER that the Maximum Drawing Amount and any
Unpaid Reimbursement Obligations with respect to any Standby
Letters of Credit shall not exceed $5,000,000 at any time."
5.5. Section 3.01 of the Loan Agreement is hereby amended in its entirety
effective as of the date hereof to read as follows:
"Section 3.01. FACILITY FEE. The Borrower agrees to
pay to the Agent for the accounts of the Lenders in
accordance with their respective Commitment Percentages a
facility fee calculated on the basis of a 365/366 day year
and at a rate PER ANNUM equal to four-tenths of one percent
(.40%) per annum on the average daily Total Commitment
(whether used or unused) during each calendar quarter or
portion thereof from the date hereof to the Final Maturity
Date. The facility fee shall be payable quarterly in
arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the
first such date after July 31, 1995, with a final payment on
the Final Maturity Date or any earlier date on which the
Commitments shall terminate."
5.6. Section 6.01(k) of the Loan Agreement is hereby amended by deleting
the phrase "during the period commencing December 1 and ending July 1" and
inserting in lieu thereof the phrase "commencing during January of".
5.7. Section 6.02(e) of the Loan Agreement is hereby amended by deleting
the phrase "Advance Total Commitment" appearing in the sixth and seventh lines
thereof and substituting therefore "Total Commitment."
5.8. Section 6.02(g) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"(g) CAPITAL EXPENDITURES. Make, or permit any
Subsidiary to make, any expenditures for fixed or capital
assets which would cause the aggregate amount of such
expenditures made by the Borrower and the Subsidiaries to
exceed, on a Consolidated basis, (i) $75,000,000 in the
Fiscal Year ended July 31, 1995 (ii) $32,000,000 for the
Fiscal Year ending July 31, 1996, and (iii) $48,000,000 in
any Fiscal Year of the Borrower ending thereafter, PROVIDED
that each of the Capital Expenditure limits set forth above
shall be reduced to the extent of any loans or other
investments permitted to be made by Section 6.02(f)(iv)
hereof and actually made by the Borrower in such Fiscal
Year, and PROVIDED FURTHER that in the event that in any
Fiscal Year, the Capital Expenditure limit set forth above
for such Fiscal Year is greater than the sum of After-Tax
Income (Excluding Permitted Losses) for the prior Fiscal
Year PLUS depreciation for the prior Fiscal Year, the
Capital Expenditure limit shall be reduced to eliminate such
excess. For purposes of determining compliance with the
foregoing covenant, there shall be deducted from Capital
Expenditures (to the extent included therein) those amounts
comprised of construction allowances by landlords."
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5.9. Section 6.02(i) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"(i) FIXED CHARGE RATIO. Permit the ratio of (i) the sum of
(A) Consolidated Earnings Before Interest and Taxes for any period of
four consecutive fiscal quarters ending on the dates set forth in the
table below, (B) depreciation and amortization for such period and
(C) Rental Obligations for such period to (ii) the sum of (A) Fixed
Charges for such period and (B) Rental Obligations for such period, to
be less than the amount set forth opposite such period in the table below.
Four Consecutive Fiscal Minimum Fixed
Quarter Period Ending Charges Ratio
----------------------- -------------
October 31, 1995 1.1 to 1
January 31, 1996 1.1 to 1
April 30, 1996 1.2 to 1
Each Fiscal Quarter
ending thereafter 1.25 to 1"
5.10. Section 6.02(j) of the Loan Agreement is hereby amended by deleting
the phrase "Advance Total Commitment" appearing in the last line thereof and
substituting therefore "Total Commitment."
5.11. Section 6.02(h) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"(h) LIABILITIES RATIO. Permit the ratio of (i) the sum of
(A) Indebtedness (including, without limitation, Subordinated
Indebtedness) as of the end of any fiscal quarter and (B) the result of
(w) Rental Obligations for the four fiscal-quarter period ending on such
date multiplied by (x) eight (8) to (ii) the sum of (A) Consolidated
Tangible Net Worth, (B) Indebtedness (including, without limitation,
Subordinated Indebtedness) and (C) the result of (y) Rental Obligations
for the four fiscal-quarter period ending on such date multiplied by
(z) eight (8), to be greater than .85 to 1."
5.12. Section 6.02(l) of the Loan Agreement is hereby amended in its
entirety effective as of the date hereof to read as follows:
"(l) OPERATIONS OF SUBSIDIARIES. (a) Cause or permit any
Subsidiary to have any pre-tax, pre-interest operating loss (Excluding
Permitted Losses and Excluding Management Fees) (i) in excess of
$11,047,000 for the four consecutive fiscal quarters of such Subsidiary
ending Xxxxx 00, 0000, (xx) in excess of $12,000,000 for the four
consecutive fiscal quarters of such Subsidiary ending July 31, 1995, (iii)
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in excess of $15,000,000 for the four consecutive fiscal
quarters of such Subsidiary ending October 31, 1995, (iv) in
excess of $12,000,000 for the four consecutive fiscal
quarters of such Subsidiary ending January 31, 1996 and (v)
in excess of $10,000,000 in any period consisting of four
consecutive fiscal quarters of such Subsidiary ending on or
after February 1, 1996, (b) cause or permit any or all
Subsidiaries to have any aggregate pre-tax, pre-interest
operating loss (Excluding Permitted Losses and Excluding
Management Fees) (i) in excess of $16,016,000 for the four
consecutive fiscal quarters of such Subsidiaries ending
Xxxxx 00, 0000, (xx) in excess of $21,600,000 for the four
consecutive fiscal quarters of such Subsidiaries ending July
31, 1995, (iii) in excess of $20,000,000 for the four
consecutive fiscal quarters of such Subsidiaries ending
October 31, 1995 and (iv) in excess of $15,000,000 in any
period consisting of four consecutive fiscal quarters of
such Subsidiaries ending on or after November 1, 1995
(excluding from the calculations under subsection (b) hereof
the financial performance of any Subsidiary which had an
operating profit during such period), (c) cause or permit
NordicTrack, Inc. to have a pre-tax, pre-interest operating
deficit (Excluding Management Fees) for the fiscal quarter
of NordicTrack, Inc. ending on July 31, 1995 of greater than
$27,500,000, and (d) cause or permit NordicTrack, Inc. to
have a pre-tax, pre-interest operating profit (Excluding
Management Fees) of less than, or in the case of loss
(Excluding Management Fees), greater than, those amounts set
forth in the table below:
Profit Not to Loss Not to Four Fiscal
be less than be greater than Quarter Period Ending
------------- --------------- ---------------------
N/A ($15,000,000) October 31, 1995
$25,000,000 N/A January 31, 1996
$10,000,000 X/X Xxxxx 00, 0000
X/X ($15,000,000) July 31, 1996
N/A ($15,000,000) October 31, 1996
$30,000,000 N/A January 31, 1997
$12,500,000 N/A April 30, 1997
N/A ($15,000,000) July 31, 1997"
5.13. Paragraph (m) of Section 6.02 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
"(m) STOCK REPURCHASE. Make, or permit any Subsidiary
to make, any repurchase of common stock, subordinated
debentures or other equity or subordinated debt securities;
PROVIDED that the Borrower may make, or permit any
Subsidiary to make, a repurchase of common stock so long as
no Default or Event of Default is continuing hereunder or
would occur as a result of such repurchase, and further
provided that (a) the aggregate amount of such repurchases
from and after August 1, 1995 shall not in any event exceed
$8,000,000 PLUS, on a cumulative basis, twenty
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five percent (25%) of positive Consolidated Net Income for each fiscal
quarter of the Borrower beginning with the fiscal quarter ending
October 31, 1995 and (b) the purchase price paid by the Borrower or such
Subsidiary to repurchase such common stock shall not in any event exceed
$8.25 per share for the first $8,000,000 of such repurchased common stock.
It is understood that the Borrower shall be permitted to convert to equity
in accordance with the terms thereof the convertible subordinated
debentures issued by the Borrower, in the original principal amount of
$57,500,000 due 2003."
5.14. AMENDMENTS TO EXHIBIT A.
(a) The definition of "Advance Commitment" appearing in EXHIBIT A
is hereby deleted.
(b) The definition of "Advance Total Commitment" appearing in
Exhibit A is hereby deleted.
(c) The definition of "Applicable Margin" appearing in EXHIBIT A is
hereby amended by deleting the phrase "three-eighths of one percent (3/8%)"
appearing in the second and third lines of subsection (a) thereof and
substituting therefore "three-quarters of one percent (3/4%)."
(d) The definition of "Commitment Percentage" appearing in Exhibit
A is hereby amended in its entirety to read as follows:
"COMMITMENT PERCENTAGE" means with respect to each
Lender, the percentage referred to in Section 1.01(c) as
such Lender's percentage of the Total Commitment."
(e) The definition of "Consolidated Earnings Before Interest and
Taxes" appearing in EXHIBIT A is hereby amended in its entirety to read as
follows:
"CONSOLIDATED EARNINGS BEFORE INTEREST AND TAXES" means
the combined and consolidated earnings (or deficit) from the
operations of the Borrower and its Subsidiaries, after all expenses
and other proper charges other than interest and taxes, determined in
accordance with generally accepted accounting principles, Excluding
Permitted Losses."
(f) The definition of "Final Maturity Date" appearing in EXHIBIT A
is hereby amended by deleting the date "September 30, 1996" in the first line
thereof and substituting therefore "July 31, 1997."
(g) The definition of "Letter of Credit Commitment" appearing in
EXHIBIT A is hereby deleted.
(h) The definition of "Total Commitment" appearing in EXHIBIT A is
hereby amended in its entirety to read as follows:
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"TOTAL COMMITMENT" means (i) during the period beginning on
The Commitment Effective Date and ending on December 29,
1995, $100,000,000 and (ii) during the period beginning on
December 30, 1995 and ending on the Final Maturity Date, an
amount equal (a) to the Total Commitment as in effect on
December 29, 1995 (after giving effect to any and all prior
reductions of the Total Commitment) minus (b) the result of
(1) $30,000,000 minus (2) Excess Reductions, as the same may
thereafter be reduced pursuant to Section 1.05 hereof."
(i) The following new definitions are hereby added to EXHIBIT A of
the Loan Agreement:
"CAPITALIZED LEASES" means leases under which the Borrower or
any of its Subsidiaries is the lessee or obligor, the discounted
future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
"COMMITMENT EFFECTIVE DATE" means the date on which the
conditions precedent set forth in Section 4(b)(i) and (ii) of the
Fourth Amendment Agreement to this Agreement dated as of July 31,
1995 are satisfied in full (as evidenced by a written confirmation
thereof by the Agent.
"DEBT SERVICE" means, for any fiscal period the amount of all
principal and Interest Charges, together with fees associated
therewith of the Borrower and its Subsidiaries on a consolidated
basis in respect of Indebtedness paid or scheduled to be paid
during such period. For the purposes of this definition,
"principal" shall in include the principal component of payments
for such period in respect of Capitalized Leases.
"DISTRIBUTION" means the declaration or payment of any
dividend on or in respect of any shares of any class of capital
stock of the Borrower or any of its Subsidiaries, other than
dividends payable solely in shares of common stock of the Borrower
or such Subsidiary; the purchase, redemption, or other retirement
of any shares of any class of capital stock of the Borrower or any
Subsidiary, directly or indirectly through a Subsidiary of the
Borrower, such Subsidiary or otherwise; the return of capital by
the Borrower or any Subsidiary to its respective shareholders as
such; or any other distribution on or in respect of any shares of
any class of capital stock of the Borrower or any Subsidiary.
"EXCESS REDUCTIONS" means an amount equal to the lesser of (a)
$30,000,000 and (b) the aggregate reductions of the Total
Commitment required pursuant to the operation of Section
1.05(a)(iv) on or prior to December 29, 1995 in excess of
$7,000,000.
"EXCLUDING MANAGEMENT FEES" means, with respect to a specified
calculation of income, the exclusion of Management Fees therefrom.
"EXCLUDING PERMITTED LOSSES" means, with respect to a
specified calculation of income, the exclusion of Permitted Losses
therefrom.
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"FIRST TIER COMPANIES" means NordicTrack, the Nature Company, a
California corporation and Xxxxx & Xxxxxx, Ltd., a Delaware
corporation.
"FIXED CHARGES" means, for any fiscal period, the sum for the
Borrower and its Subsidiaries on a consolidated basis with respect
to (i) Debt Service for such period, (ii) taxes paid during such
period and (iii) Distributions made during such period.
"MANAGEMENT FEES" means those management fees paid by any
Subsidiary of the Borrower to the Borrower or any other Subsidiary
of the Borrower.
"PERMITTED LOSSES" means pre-tax losses of up to $60,000,000
in the aggregate associated with the planned sale of Britches of
Georgetowne, Inc. and its Subsidiaries, PROVIDED THAT, the
aggregate amount of such losses shall be comprised of (i) up to
$45,000,000 of losses recognized by the Borrower and its
Subsidiaries in the third fiscal quarter of the Borrower's 1995
Fiscal Year and (ii) up to $15,000,000 of losses recognized by the
Borrower and its Subsidiaries after the third fiscal quarter of the
Borrower's 1995 Fiscal Year.
"RENTAL OBLIGATIONS" means all present or future obligations
of the Borrower or any of its Subsidiaries under any rental
agreements or leases of real or personal property, other than (i)
obligations that can be terminated by the giving of notice without
liability to the Borrower or such Subsidiary in excess of the
liability for rent due as of the date on which such notice is given
and under which no penalty or premium is paid as a result of any
such termination, (ii) obligations in respect of Capitalized Leases
and (iii) those obligations of the Borrower and its Subsidiaries to
pay rents which are calculated solely as a percentage of retail
store sales revenues.
Section 6. EXPENSES. The Borrower agrees to pay to the Agent upon demand
(a) an amount equal to any and all out-of-pocket costs or expenses (including
reasonable legal fees and disbursements and appraisal expenses) incurred or
sustained by the Agent in connection with the preparation of this Amendment
Agreement and related matters and (b) from time to time any and all
out-of-pocket costs or expenses (including commercial examiner fees and legal
fees and disbursements) hereafter incurred or sustained by the Agent and
Lenders in connection with the administration of credit extended by the Agent
and Lenders to the Borrower or the preservation of or enforcement of the
Lenders' and Agent's rights under the Loan Agreement, the Notes or the other
Loan Documents.
Section 7. MISCELLANEOUS PROVISIONS.
(a) Except as otherwise expressly provided by this Amendment
Agreement, all of the respective terms, conditions and provisions of the Loan
Agreement remain the same. It is declared and agreed by each of the parties
hereto that the Loan Agreement and the other Loan Documents, each as amended
hereby, shall continue in full force and effect, and that this Amendment
Agreement and the Loan Agreement and the other Loan Documents, as applicable,
be read and construed as one instrument, and all references in the Loan
Documents shall hereafter refer to the Loan Agreement and the other Loan
Documents, each as amended hereby. The Loan Agreement and the other Loan
Documents, each as amended hereby, shall continue to
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be secured (and the holders of the Obligations shall continue to have the
benefit of) the continuing liens and security interests and guarantees, created
by the Collateral Agreements.
(b) This Amendment Agreement is intended to take effect under,
and shall be construed according to and governed by, the laws of the State of
New York.
(c) This Amendment Agreement may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
instrument. In making proof of this Amendment Agreement it shall not be
necessary to produce or account for more than one counterpart signed by each
party hereto by and against which enforcement hereof is sought.
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IN WITNESS WHEREOF, each of the parties hereto have caused this Amendment
Agreement to be executed in its name and behalf by its duly authorized officer
as of the date first written above.
CML GROUP, INC.
By: /s/Xxxxxx X. Xxxxxxxxx
------------------------
Its: Senior Vice President
------------------------
CITIBANK, N.A.,
Individually,
As Agent and Issuing Bank
By: /s/Xxxxxx X. Xxxxx
------------------------
Its: Vice President
------------------------
BAYBANK BOSTON, N.A
By: /s/Xxxxx X. Xxxxxxx
------------------------
Its: Loan Officer (Special)
------------------------
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/Xxxxxx X. Xxxxxx, Xx.
------------------------
Its: Director
------------------------
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