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EXHIBIT 10.5
Conformed Copy
DATED 31 JULY 2000
THE DERBY CYCLE CORPORATION AND OTHERS
as Borrowers and/or Guarantors
CHASE MANHATTAN plc
as Arranger
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as Banks
CHASE MANHATTAN INTERNATIONAL LIMITED
as Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
as Security Agent
_____________________________________________
WAIVER
AND NINTH
AMENDMENT AGREEMENT
relating to
a facility agreement dated 12 May 1998
_____________________________________________
DLA
3 Noble Street
LONDON EC2V 7EE
Tel: 08700 111 111
Fax: 020 7600 1650
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CONTENTS
<S> <C>
1. INTERPRETATION.......................................................... 3
2. WAIVER AND AMENDMENT AGREEMENT.......................................... 4
3. AMENDMENT............................................................... 4
4. REPRESENTATIONS AND WARRANTIES.......................................... 5
5. COUNTERPARTS; EFFECTIVENESS............................................. 6
6. FEES AND COSTS.......................................................... 6
7. CONDITIONS SUBSEQUENT................................................... 6
8. GOVERNING LAW AND JURISDICTION.......................................... 6
SCHEDULE 1................................................................. 7
The Borrowers............................................................ 7
SCHEDULE 2................................................................. 8
The Guarantors........................................................... 8
SCHEDULE 3................................................................. 10
The Banks................................................................ 10
SCHEDULE 4................................................................. 16
Further Amendments to the Facility Agreement to take effect on the First
Effective Date........................................................... 16
SCHEDULE 5............................................................... 19
Conditions Precedent..................................................... 19
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THIS WAIVER AND NINTH AMENDMENT AGREEMENT is made on 31 July 2000
BETWEEN
(1). THE DERBY CYCLE CORPORATION, a company incorporated in Delaware, United
States of America, having its principal office at 300 First Stamford Place,
Stamford CT06902-6765, Connecticut, United States of America ("the
Company");
(2) THE COMPANIES identified as Borrowers in Schedule 1 ("the Borrowers");
(3) THE COMPANIES identified as Guarantors in Schedule 2 ("the Guarantors");
(4) CHASE MANHATTAN PLC as arranger ("the Arranger");
(5) THE FINANCIAL INSTITUTIONS identified as banks in Schedule 3 ("the Banks");
(6) CHASE MANHATTAN INTERNATIONAL LIMITED as facility agent ("the Facility
Agent");
(7) CHASE MANHATTAN INTERNATIONAL LIMITED as security agent ("the Security
Agent")
RECITALS
A. By a facility agreement dated 12 May 1998, as amended and restated pursuant
to an amendment and restatement agreement dated 3 February 1999 and as
further amended pursuant to an amendment agreement dated 30 April 1999 and
as further amended pursuant to a amendment agreement dated 31 August 1999
and as further amended pursuant to a amendment agreement dated 25 November
1999 and as further amended pursuant to an amendment agreement dated 17
December 1999 and as further amended pursuant to an amendment agreement
dated 3 February 2000 and as further amended pursuant to an amendment
agreement dated 2 March 2000 and as further amended pursuant to a waiver
and amendment agreement dated 30 June 2000 (collectively the "Facility
Agreement") by and among the Company, Borrowers, Guarantors, Arranger, the
Banks, Facility Agent and Security Agent, the Banks have agreed to make
certain credit facilities available to the Borrower.
B. The Banks have agreed to further amend the Facility Agreement and waive
compliance with certain provisions of the Facility Agreement as more
particularly set out herein but subject always to the provisions of this
Waiver and Amendment Agreement.
NOW, THEREFORE IN CONSIDERATION of these premises and the agreements, provisions
and covenants herein contained, the parties agree as follows:
1. Interpretation
1.1 Definitions
In this Agreement:
"Effective Date" means the date on which the Facility Agent has
confirmed to the Company and the Banks that it has received evidence
satisfactory to it and it has received all the conditions precedent as
set out in Schedule 5, in each case in a form and substance
satisfactory to the Facility Agent;
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1.2 Interpretation
Unless the context otherwise requires, words and expressions defined
in the Facility Agreement shall have the same meaning herein.
2. Waiver and Amendment Agreement
2.1 Subject to Clause 2.2 below and the other terms and conditions set
forth herein and in reliance on the representations and warranties of
the Obligors herein contained, the Banks hereby waive any Event of
Default under the following clause:
2.1.1 Clause 20.2(g) (Financial Indebtedness Covenant) resulting
solely from the breach of the covenant in respect of the period
3 July 2000 to (and including) 31 July 2000 by virtue of the
Sponsor Facility being included in the definition of Financial
Indebtedness in that clause only ;
2.2 Without limiting the generality of the provisions of Clause 32 and 35
of the Facility Agreement the Waiver and Amendment Agreement set forth
above in Clause 2.1 shall be limited precisely as written and nothing
in this clause 2.2 shall be deemed to:
2.2.1 constitute a permanent waiver of the breach referred to at
clause 2.1.1 in the event that the Event of Default described
in Clause 2.1 above is continuing or unremedied on or after 1
August 2000 ; or
2.2.2 constitute a waiver of any other term, provision or condition
of the Facility Agreement or any other Finance Documents or
agreement referred to therein or otherwise; or
2.2.3 prejudice any rights or remedy that the Agents or Banks may now
have or may have in the future under or in connection with the
Facility Agreement or any other Finance Documents referred to
therein (other than the rights and remedies which they
otherwise would have had as a consequence of the breaches set
out in Clause 2.1 above);
2.3 Except as expressly set forth therein, the terms, provisions and
conditions of the Facility Agreement and the other Finance Documents
shall remain in full force and effect and in all other respects are
hereby ratified and confirmed.
3. Amendment
3.1 Each of the parties agrees that, as from the Effective Date, the
amendments referred to in Schedule 4 shall become effective;
3.2 The Facility Agreement and this Waiver and Amendment Agreement shall
be read and construed as a single document;
3.3 References in the Facility Agreement to the Facility Agreement
howsoever characterised shall with effect from the Effective Date be
references to the Facility Agreement as amended pursuant to Clause 3.1
of this Waiver and Amendment Agreement;
4. Representations and Warranties
The Obligors hereby each represents and warrants to the Agents and the
Banks that:
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4.1 as at the date hereof, there exists no Event of Default under the
Facility Agreement other than as specifically referred to in clause
2.1 hereof and after giving effect to this Waiver and Amendment
Agreement there will exist no Event of Default or Potential Event of
Default under the Facility Agreement;
4.2 all representations and warranties contained in the Facility Agreement
and the other Finance Documents are true, correct and complete in all
material respects on and as at the date hereof except to the extent
such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all
material respects on and as at such earlier date;
4.3 as at the date hereof, each Obligor has performed all agreements to be
performed on its part as set forth in the Facility Agreement;
4.4 each Obligor is duly organised and validly existing under the laws of
the jurisdiction of its organisation and has all necessary power and
authority to execute and delivery this Waiver and Amendment Agreement
and to consummate the transactions contemplated hereby;
4.5 neither the execution and delivery of this Waiver and Amendment
Agreement, nor the consummation of the transactions contemplated
hereby, violates or will violate (i) any law, regulation, decree or
other legal restriction applicable to any Obligor; (ii) the charter,
by-laws or other constitutional documents of any Obligor; or (iii) any
instrument or agreement to which any Obligor or any of its assets is
subject or by which it is bound;
4.6 there is no legal requirement of any governmental authority (including
any requirement to make any declaration, filing or registration or to
obtain any consent, approval, licence or order) which is necessary to
be met by the Company or any other Obligor in connection with its
execution, delivery or performance of this Waiver and Amendment
Agreement
4.7 this Waiver and Amendment Agreement has been duly authorised, executed
and delivered by the Company on behalf of each Obligor and this Waiver
and Amendment Agreement, the Facility Agreement and the other Finance
Documents to which any Obligor is a party, constitute the legal, valid
and binding obligations of such Obligor, enforceable against it in
accordance with their terms; and
4.8 All information provided to the Facility Agent in connection with this
Waiver and Amendment Agreement was or will be as at the time it was
given, true, complete and accurate in all respects and each Obligor
represents that no circumstances have arisen, or any event has
occurred between the date when such information was provided to the
Facility Agent and the date hereof which would render such information
to be untrue, inaccurate or incomplete in any respect.
4.9 The representations and warranties given in this Clause 4 shall be
deemed to be repeated on the Effective Date (if different to the date
hereof) with reference to the facts and circumstances existing at such
time.
5. Counterparts; Effectiveness
5.1 This Waiver and Amendment Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which
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when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one
and the same instrument;
5.2 Signature pages may be detached from multiple separate counterparts
and attached to a single document so that all signature pages are
physically attached to the same document;
5.3 The waiver referred to in Clause 2.1 of this Waiver and Amendment
Agreement shall become effective upon the execution of the
counterparts hereof in accordance with this Clause 5 and the
amendments referred to in Clause 3 of this Waiver and Amendment
Agreement shall become effective upon the Effective Date.
6. Fees and Costs
The Company shall reimburse the Agents and the Banks for all costs and
expenses (including legal fees) properly incurred by them and their
professional advisers in connection with the negotiation, preparation and
execution of this Waiver and Amendment Agreement and any related
documentation, including but not limited to any release of security and any
filings, registrations or any other action required by law or otherwise.
7. Conditions Subsequent
The Company shall procure by no later than 30 days after the date of this
Agreement that it delivers to the Facility Agent a copy of the resolutions
of the members of each Obligor certified by an Authorised Signatory (or
appropriately authorised person of such Obligor) ratifying, approving, and
confirming the execution and delivery of this Agreement by the Company as
Obligors' Agent and any other communication or documents delivered by on or
on behalf of each Obligor in connection herewith.
8. Governing Law and jurisdiction
8.1 This Waiver and Amendment Agreement and the rights and obligations of
the parties hereunder shall be governed by, and shall be construed and
enforced in accordance with the laws of England.
8.2 Clause 38 (Jurisdiction) of the Facility Agreement shall be deemed to
apply as if it had been set out in full in this Agreement.
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SCHEDULE 1
The Borrowers
Raleigh Industries Limited
Sturmey-Archer Limited
Derby Holding (Deutschland) GmbH
Koninklijke Gazelle BV
The Derby Cycle Corporation
Raleigh Industries of Canada Limited
Raleigh Europe B.V.
Raleigh B.V.
Englebert Wiener Bike Parts GmbH
Winora-Staiger GmbH
Derby Holding Limited
Raleigh Fahrrader GmbH
Derby Cycle Werke GmbH
Raleigh International Limited
Curragh Finance Company
Raleigh Ireland Limited
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SCHEDULE 2
The Guarantors
Derby Holding Limited
Raleigh Industries Limited
Raleigh International Limited
Sturmey-Archer Limited
Raleigh Industries of Canada Limited
The Derby Cycle Corporation
Raleigh BV
Raleigh Europe BV
Koninklijke Gazelle BV
Derby Nederland BV
Derby Holding BV
Lyon Investments BV
Derby Holding (Deutschland) GmbH
Raleigh Fahrrader GmbH
NW Sportgerate GmbH
Derby Cycle Werke GmbH
Englebert Wiener Bike Parts GmbH
Univega Worldwide Licence GmbH
Univega Beteiligungen GmbH
Univega Bikes & Sports Europe GmbH
Derby Fahrrader GmbH
Derby WS Vermogenswerwaltungs GmbH
Winora-Staiger GmbH
Curragh Finance Company
Raleigh Ireland Limited
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The British Cycle Corporation Limited
BSA Cycles Limited
Triumph Cycle Co. Limited
Raleigh (Services) Limited
Derby Sweden AB
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SCHEDULE 3
The Banks
Name
The Chase Manhattan Bank
ABN Amro Bank N.V.
Bank of Scotland
BHF - Bank AG
Dresdner Bank AG, New York and Grand Cayman
Branches
Lloyds TSB Bank Plc
HSBC Bank Plc
Scotia Bank Europe plc
The Bank of Nova Scotia
The Sumitomo Bank, Limited
Banque Nationale de Paris
San Paolo IMI SPA
KBC Bank (Nederland) N.V.
Oldenburgische Landesbank AG
The Governor and Company of the Bank of Ireland
The Industrial Bank of Japan, Limited
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SCHEDULE 4
Further Amendments to the Facility Agreement to take effect on the First
Effective Date
1. Clause 1.1 (Definitions) shall be amended by the insertion of the following
amendments:
"Permitted Financial Indebtedness" means (without double-counting):
(a) in respect of the Company, any indebtedness:
(i) incurred under the Finance Documents;
(ii) as permitted under Clause 19.5(c) of this Agreement;
(iii) as contemplated in the definition of Permitted Amount; or
(iv) incurred under the Sponsor Facility.
(b) in respect of Lyon Investments B.V., any indebtedness (i) incurred
under the Note Documents and in respect of the Notes and (ii) as
permitted under Clause 19.5(c) of this Agreement; and
(c) in respect of a Group Member (other than the Company and Lyon
Investments B.V.) any indebtedness:
(i) incurred under the Finance Documents other than the
GSIC Note Documents;
(ii) as permitted by Clauses 19.5(c) and 19.5(d);
(iii) Financial Indebtedness owed to a Beneficiary of a Standby L/C
to the extent such Financial Indebtedness is supported by such
Standby L/C;
(iv) in addition to any Financial Indebtedness able to be incurred
or permitted to subsist pursuant to paragraphs (i), (ii),
(iii), (v), (vi) or (vii) of this definition:
(A) members of the South African Group may incur Financial
Indebtedness (in aggregate) in the aggregate principal
amount of DM11,000,000 (or the equivalent thereof in
other currencies); and
(B) in respect of the Group as a whole (excluding the South
African Group) $1,000,000 (or the equivalent thereof in
other currencies);
(v) Financial Indebtedness in respect of finance leases existing as
at the date of this Agreement which have been disclosed in
writing to the Facility Agent prior to the date of this
Agreement;
(vi) Financial Indebtedness incurred by a Dormant Subsidiary as at
Closing to the extent disclosed prior to the date of this
Agreement;
"Senior Liabilities" means all present and future sums, liabilities and
obligations whatsoever (actual or contingent) payable, owing, due or
incurred by an Obligor to any of the Security Agent, Facility Agent and
Secured Beneficiaries (as such term is defined in the Debentures) under the
Senior Finance Documents;
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"Sponsor Class `C' Warrants" means the 2,500 warrants issued to Thayer and
Perseus in consideration of their providing the Sponsor Facility;
"Sponsor Facility Letter" means the letter dated 30 June 2000 and made
between Thayer, Perseus, the Facility Agent and the Security Agent.
"Sponsor PIK Notes" means the further subordinated debt issued to Thayer
and Perseus in lieu of interest on the Sponsor Facility, such debt to be on
the same terms as the Sponsor Facility and subject to the provisions of the
Sponsor Facility Letter and Term Sheet;
"Subordinated Sponsor Facilities Liabilities" means all present and future
sums, liabilities and obligations whatsoever (actual or contingent),
payable, owing, due or incurred by the Company to Thayer and\or Perseus
under, pursuant to or otherwise in connection with the Sponsor Facility
Documents;
"Term Sheet" means the term sheet in the agreed form dated 30 June 2000
pursuant to which Thayer and Perseus have agreed to continue to provide the
Sponsor Facility in accordance with its terms but subject to the provisions
of the Sponsor Facility Letter;
2. Clause 19.5 (ac) (Sponsor Facility) shall be deleted and replaced with the
following
The Company shall not and shall procure that no Group Company shall repay,
redeem, cancel or repurchase all or any part of the Subordinated Sponsor
Facilities Liabilities or make any other payment or distribution whether in
cash or kind or in any manner (other than the issue of the Sponsor PIK
Notes) save that the Company may repay the Sponsor Loan Facility on the
earlier of (i) the Company having contemporaneously with such repayment
issued share capital of a type permitted pursuant to Clause 19.5(w)(a)
(Share Capital) to Thayer and Perseus in an amount equal to the amount of
subordinated debt outstanding under the Sponsor Facility at that date and
(ii) the Facility Agent confirming to the Company that the Senior
Liabilities have been unconditionally discharged; and
Provided further that the Company shall not and shall procure that no other
Group Company shall issue Sponsor PIK Notes if:
(i) a Default is continuing, unremedied or unwaived in writing by the
Facility Agent or would result as a consequence of such issue; or
(ii) such issue would constitute a breach of the Note Documents and the
GSIC Loan Note Documents or a breach of the same would result as a
consequence of such issue.
Subject to the Sponsor PIK Notes having been issued in accordance with this
Clause, the Company may at any time after their issue convert any Sponsor
PIK Notes into share capital of a type permitted pursuant to Clause
19.5(w)(a) (Share Capital) in an amount equal to the Sponsor PIK Notes
converted.
3 Clause 19.5 (ac) referred to in the 7th Amendment Agreement shall be
renumbered 19.5 (ad);
4 Clause 20.2(a) shall be deleted and replaced with the following:
"Consolidated Net Interest Payable" for any period comprising an annual
Accounting Period of the Company or four consecutive quarterly Accounting
Periods of the Company or less where such period ends on or before 28 March
1999 (taken together as one period) means, the Interest accrued during such
period as an obligation of any Group Member under or in respect of any
Financial Indebtedness (whether or not paid, capitalised or accrued
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during, or deferred for payment after, such period) together with interest
paid, payable, capitalised, accrued or deferred for payment under any
interest rate or currency Hedging Protection Agreement or instruments under
which the parties are in compliance with their payment obligations or other
obligations (excluding for the avoidance of doubt interest accrued or
payable on the GSIC Notes or the Sponsor Facility, to the extent the same
is not payable in cash and any item comprised in Transaction Costs
amortised in accordance with Applicable Accounting Principles) less
Interest received in respect of Cash and together with Cash Equivalent
Investments during such period together with Interest received or
receivable by any Group Member during such period under any interest rate
and/or currency hedging agreements or instruments (calculated on an accrual
basis) under which all parties are in compliance with their payment and
other obligations all determined on a consolidated basis and avoiding
double counting and (subject only as may be required in order to reflect
the express inclusion or exclusion of items as specified in this
definition) in accordance with the Applicable Accounting Principles and as
shown in the consolidated Financial Accounts of the Group for such annual
Accounting Period or for the quarterly Accounting Periods falling within
such period.
5. Clause 20.2 (g) (Financial Indebtedness) shall be deleted and replaced with
the following:
The aggregate amount of Financial Indebtedness of the Group (excluding, the
GSIC Notes, any amounts due under the Note Documents, the Subordinated
Sponsor Facilities Liabilities and any Financial Indebtedness described at
paragraph (h) of the definition "Financial Indebtedness" (and without
double-counting)) shall not, during any period listed in Column 1 below
exceed the amount specified opposite such period in Column 2 below and, for
the purposes of any such determination, any Financial Indebtedness not
denominated in Dollars shall be converted to Dollars by reference to the
Facility Agent's spot rate of exchange for such currency and Dollars at or
about 10:00a.m. on the date determination is made
Column 1 Column 2
5 June 2000 to (and including) 2 July 2000 77,000,000
3 July 2000 to (and including) 6 August 2000 55,000,000
7 August 2000 to (and including) 3 September 2000 45,000,000
4 September 2000 to (and including) 1 October 2000 45,000,000
2 October 2000 to (and including) 5 November 2000 60,000,000
6 November 2000 to (and including) 3 December 2000 75,000,000
4 December 2000 to (and including) 31 December 2000 75,000,000
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SCHEDULE 5
Conditions Precedent
1. The Term Sheet duly signed by each of the parties thereto;
2. The Sponsor Facility Letter duly signed by each of the parties thereto;
3. An opinion from Kirkland & Ellis, United States legal advisors to the
Company confirming that the amendments contemplated hereunder and the
agreements and transactions contemplated in connection with the Sponsor
Facility and the Term Sheet and the performance by the Company of its
obligations thereunder will not violate or result in a breach of the
provisions of the Note Indentures, the Senior Notes and the GSIC Note
Documents.
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THE DERBY CYCLE CORPORATION )
for itself and on behalf of each of the )
Borrowers and Guarantors as Obligors' Agent )
By: DANIEL S LYNCH
CHASE MANHATTAN INTERNATIONAL )
LIMITED for itself and as the Facility Agent )
and Security Agent and for and on behalf of the )
Arranger and each of the Banks (other than Lloyds )
TSB Bank Plc, Scotia Bank Europe plc and The Bank
of Nova Scotia)
By: B SCAMMELL
By:
LLOYDS TSB BANK PLC
By: DAVID JOHN MILWARD
SCOTIA BANK EUROPE PLC
By: P SHANLEY
THE BANK OF NOVA SCOTIA
By: R A MILLARD
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