SUPPLEMENTAL INDENTURE
This Supplemental Indenture is dated as of July 2, 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 $100,000,000 of the Issuers' 10% 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 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 DM110,000,000 of 9
3/8% 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.
"DM Securities" means the securities issued under the DM
Indenture.
"DM Trustee" means the party named as trustee in the DM
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 DM 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).
"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
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(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
USD 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,
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
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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.
"USD 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 DM Securities then outstanding.
(b) 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 USD 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
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Proceeds") shall be forthwith and irrevocably paid from time
to time 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: GFU-IBJW Account
Sub A/C # 134503
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 DM Securities pursuant to
Section 4.06(b), (c) and (d) and Section 4.06(b), (c) and (d)
of the DM 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 "DM Indenture
Account") under Section 5.01(c)(ii) of the DM Indenture as of
such date (the "DM Initial Gazelle Proceeds");
(vii) the Trustee and the DM Trustee shall combine
the DM Initial Gazelle Proceeds in the DM Indenture Account
with the Gazelle Sale Proceeds in the Account for purposes of
purchasing Securities and DM 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
USD 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 DM Securities pursuant to Section 4.06(b),
(c) and (d) and Section 4.06(b), (c) and (d) of the DM
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 DM Indenture Account as of such date
(the "DM Released Gazelle Proceeds");
(xi) the Trustee and the DM Trustee shall combine
the Gazelle Sale Proceeds in the Account with the DM Released
Gazelle Proceeds in the DM Indenture Account for purposes of
purchasing Securities and DM 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.
[Remainder of page is intentionally left blank]
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
---------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxx Xxxxx
---------------------------------------
Name: Xxxx Xxxxx
Title: Assistant Vice President
EXHIBIT A
SECURED PROMISSORY NOTE
US$2,500,000 July _, 2001
FOR VALUE RECEIVED, THE DERBY CYCLE CORPORATION, a Delaware
corporation ("Borrower"), hereby unconditionally promises to pay to the order of
LYON INVESTMENTS B.V., a corporation organized under the laws of the Netherlands
("HOLDER"), in lawful money and in immediately available funds, the lesser of
(i) the principal sum of the Dollar Equivalent of Two Million Five Hundred
Thousand Dollars (US$2,500,000) or its Euro equivalent (the "COMMITMENT Amount")
and (ii) the aggregate unpaid principal amount of all loans made by or through
Holder to Borrower pursuant to this Note (the "LOANS"). The principal of and all
accrued interest on this Note shall be due and payable at such time and in such
amounts as set forth herein. For purposes of this Note, "DOLLAR EQUIVALENT"
means on any particular date, (i) with respect to any amount denominated in U.S.
Dollars, such amount in U.S. Dollars, and (ii) with respect to any amount
denominated in Euros, the average of the amount of Dollars which could be
purchased by each of the Trustee and the DM 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.
1. BORROWINGS. Holder agrees to make loans from time to time on
each requested borrowing date (a "BORROWING DATE") on
and after the date hereof until the Maturity Date (as
defined below) in an aggregate principal amount not
to exceed the Commitment Amount at any time on the
terms and conditions set forth herein. As a condition
precedent to the making of each Loan, the Holder
shall have received a written loan request (a "LOAN
REQUEST") from the Borrower. The Borrower agrees that
it will not make a Loan Request hereunder unless, the
Borrower, collectively with its subsidiaries
(excluding Holder), (i) will have less than the
Dollar Equivalent of US$2,500,000 in cash and cash
equivalents on the relevant Borrowing Date and (ii)
the amount of such borrowing shall not exceed the
difference of (A) the Dollar Equivalent of
US$2,500,000 minus (B) the Dollar Equivalent of the
aggregate amount of cash and cash equivalents
collectively held by the Borrower and its
subsidiaries (excluding Holder) (the "SHORTFALL").
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2. MATURITY. The outstanding principal amount of the Loans,
together will all accrued but unpaid interest
thereon, shall be due and payable in full on the
earlier of (i) January 15, 2002 and (ii) the closing
date of a sale or disposition of substantially all of
the assets of Holder, whichever occurs first (the
"MATURITY DATE"); PROVIDED that if the Borrower and
its subsidiaries (excluding Holder) shall
collectively have cash and cash equivalents
(including, without limitation, the aggregate amount
of all outstanding Loans) in an aggregate amount in
excess of the Dollar Equivalent of US$2,500,000 (the
"EXCESS") at any time, then the Borrower shall repay
the Loans (in accordance with paragraph 4(a)) on such
date by the amount of such Excess (an "EXCESS
PAYMENT"), but any amounts so repaid may thereafter
be reborrowed in accordance with paragraph 1 hereof;
PROVIDED, FURTHER, however, that Borrower shall not
be required to make any Excess Payment unless the
Excess exceeds $250,000.
3. INTEREST.
(a) The outstanding principal balance of all Loans made
hereunder shall bear interest from the date of
advancement thereof to the date of repayment at a
rate per annum (computed on the basis of a 360-day
year, actual days elapsed) equal to 5%. Borrower
shall pay all such accrued interest on the last
business day of each calendar month, beginning on the
last business day of August 2001.
(b) Notwithstanding the foregoing, but subject to
applicable law, any overdue principal of and overdue
interest on this Note shall bear interest, payable on
demand in immediately available funds, for each day
excluding the date payment thereof was due to the
date of actual payment, at a rate equal to the rate
of interest otherwise in effect pursuant to clause
(a) above PLUS 2% per annum.
4. PAYMENT PROCEDURES.
(a) All amounts payable hereunder shall be payable to
Holder by wire transfer of immediately available
funds in the currency in which the Loan was made to
Borrower in accordance with wire transfer
instructions to be separately provided to Borrower in
writing.
(b) If any payment of principal or interest on this Note
shall become due on a day that is not a business day,
such payment shall be made on the next succeeding day
that is a business day.
(c) All payments on this Note shall be applied first to
accrued interest, if any, and thereafter to the
outstanding principal balance hereof.
5. GRANT OF SECURITY.
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(a) As collateral security for the prompt and complete
payment when due of all of the Borrower's obligations
hereunder, the Borrower hereby creates and grants a
continuing security interest to the Holder in and to
all of the Borrower's right, title and interest in
and to all of the following, whether now owned or
hereafter acquired or existing (all of the following,
the "COLLATERAL"): all accounts (other than bank
accounts), accounts receivable, including, without
limitation, any right to payment for inventory of the
Borrower sold in the ordinary course of the
Borrower's business, whether now existing or
hereafter arising, and all contract rights, chattel
paper, tax refunds, instruments, acceptances, drafts
and other obligations of any kind evidencing a right
to receive money, in each case, arising out of or in
connection with the sale or lease of goods or the
rendering of services, together with all ledger
sheets, files, records and documents relating to any
of the foregoing including all computer records,
programs, storage media and computer software used or
useful in connection therewith (the "RECEIVABLES"),
and all of the Borrower's right, title and interest,
powers, privileges and other benefits under each and
every one of the security agreements and other
contracts securing or otherwise relating to any such
Receivables; and all proceeds of any and all of the
foregoing.
(b) In furtherance of the foregoing, the Borrower agrees
(and at its expense) to deliver to Holder duly
completed Uniform Commercial Code financing
statements and such other like instruments as Holder
may request from time to time to perfect the liens
and security interests in the Collateral granted
hereunder.
6. NO LIENS. Borrower agrees that it shall not, directly or
indirectly, create, permit or suffer to exist, and
shall defend the Collateral against and take such
other action as is necessary to remove, any lien or
encumbrance on or in the Collateral or in any portion
thereof.
7. CONDITIONS PRECEDENT. Holder's obligation to make each Loan
hereunder is subject to the satisfaction of the
following condition precedent:
(a) COVENANTS. The Borrower shall be in compliance with
each of the provisions contained in this Note.
(b) NO DEFAULTS. No Event of Default shall have occurred
and be continuing or would result from the proposed
borrowing.
8. DEFAULT. Each of the following events shall be an "EVENT OF
DEFAULT" hereunder:
(a) Borrower shall fail to pay (i) the principal amount
of any Loan on the date the same becomes due and
payable or (ii) any other
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amount payable hereunder on the date the same becomes
due and payable and such default shall continue
unremedied for 5 days thereafter;
(b) Borrower shall be in breach of any other covenant,
provision, agreement, representation or warranty
under this Note and such failure shall continue
unremedied for 10 days thereafter;
(c) Borrower commences any case, proceeding or other
action under any existing or future law of any
jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, liquidation, winding-up,
dissolution, reorganization or relief of debtors,
seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it bankrupt
or insolvent, or seeking reorganization, liquidation,
winding-up, dissolution, composition, extension or
other such relief with respect to it or its debts, or
seeking appointment of a receiver, trustee, custodian
or other similar official for all or any substantial
part of its assets (a "BANKRUPTCY ACTION");
(d) Borrower becomes a debtor named in any Bankruptcy
Action which results in the entry of an order for
relief or any such adjudication or appointment
remains undismissed or undischarged for a period of
thirty (30) days;
(e) Borrower makes a general assignment for the benefit
of its creditors; or
(f) An Event of Default occurs under Sections 6.01(3)-(9)
of either the DM Indenture or the USD Indenture (each
as defined below).
9. REMEDIES.
(a) Upon the occurrence of an Event of Default hereunder,
all unpaid principal, accrued interest and other
amounts owing hereunder shall, automatically become,
immediately due, payable and collectible by Holder
pursuant to applicable law and without presentment,
demand, protest or notice of any kind, and the
commitments hereunder shall be automatically
terminated.
(b) Upon the occurrence of any one or more Events of
Default, the Holder may proceed to protect and
enforce its rights hereunder in equity, at law or by
other appropriate proceedings, or the Holder may
proceed to enforce the payment of this Note, or to
enforce any other legal or equitable right of the
Holder, including its rights as a secured creditor
against the Collateral.
10. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower hereby
represents and warrants to the Holder that:
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(a) ORGANIZATION AND GOOD STANDING. Borrower is a
corporation duly organized, validly existing and in
good standing under the laws of Delaware and has all
requisite corporate power and authority to carry on
its business as now conducted.
(b) AUTHORIZATION. The execution, delivery and
performance by Borrower of this Note are within
Borrower's corporate power and have been duly
authorized by all necessary or proper corporate
action.
(c) VALID OBLIGATION. This Note constitutes a valid and
legally binding obligation of Borrower, enforceable
against Borrower in accordance with its terms.
(d) NON-CONTRAVENTION OF OTHER INSTRUMENTS. The
execution, delivery and performance of this Note and
the consummation of the transactions contemplated
hereby will not result in any violation or be in
conflict with or constitute, with or without the
passage of time and giving of notice, a default under
any agreement, instrument, judgment, order, writ,
decree or contract to which the Borrower is a party
or is subject.
11. WAIVER. Borrower waives presentment and demand for payment,
notice of dishonor, protest and notice of protest of
this Note, and shall pay all costs of collection when
incurred, including, without limitation, reasonable
attorneys' fees, costs and other expenses.
12. SUCCESSORS AND ASSIGNS. The provisions of this Note shall
inure to the benefit of and be binding on any
successor to Borrower and to any successor or assign
of Holder; PROVIDED, however, that the Borrower's
rights and obligations hereunder may not be assigned
without the prior written consent of the USD Trustee
and the DM Trustee, and PROVIDED FURTHER that Holder
may only assign its rights and obligations hereunder
with the prior written consent of the USD Trustee and
the DM Trustee.
13. GOVERNING LAW. This Note shall be governed by, and construed
and enforced in accordance with, the laws of the
State of New York, excluding conflict of laws
principles that would cause the application of laws
of any other jurisdiction.
14. THIRD PARTY BENEFICIARIES. The representations, warranties
and indemnities contained in this Note shall extend
to and be enforceable by The Bank of New York, in its
capacity as Trustee under the USD Indenture (together
with its successors and assigns, the "USD TRUSTEE"),
and The Bank of New York, in its capacity as Trustee
under the DM Indenture (together with its successors
and
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assigns, the "DM TRUSTEE"). For purposes of this
Section 14, (i) "DM 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 DM110,000,000 of 9 3/8%
Senior Notes due 2008 among Holder and Borrower, as
issuers, and The Bank of New York as successor to IBJ
Xxxxxxxx Bank & Trust Company, in its capacity as
trustee thereunder, and (ii) "USD 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
US$100,000,000 of 10% Senior Notes due 2008 among
Holder and Borrower, as issuers, and The Bank of New
York as successor to IBJ Xxxxxxxx Bank & Trust
Company, in its capacity as trustee thereunder.
[SIGNATURE PAGE FOLLOWS]
7
BORROWER THE DERBY CYCLE CORPORATION
By: /s/
---------------------------------------
Name:
Title:
HOLDER LYON INVESTMENTS B.V.
By: /s/
---------------------------------------
Name:
Title:
