EXHIBIT 10.1
SECOND AMENDMENT AND WAIVER dated as of December 7, 2001 ("Amendment")
to FINANCING AGREEMENT, dated as of June 27, 2000 (as amended through the date
hereof, the "Financing Agreement"), among CANNONDALE CORPORATION, as Borrower
(the "Borrower"), the lenders party thereto (each a "Lender" and collectively
the "Lenders") and THE CIT GROUP/BUSINESS CREDIT, INC., as agent for the Lenders
(in such capacity, the "Agent"). Terms which are capitalized in this Amendment
and not otherwise defined shall have the meanings ascribed to such terms in the
Financing Agreement.
WHEREAS, the Borrower has requested the Lenders to (i) waive as Events
of Default the violation of certain financial covenants contained in the
Financing Agreement and the occurrence and continuance of the Cross Default, as
defined in Section Two hereof and (ii) modify certain provisions contained in
the Financing Agreement, and the Lenders have agreed to the foregoing request,
on the terms and subject to the satisfaction of the conditions contained in this
Amendment;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower, the Agent and the
Lenders hereby agree as follows:
SECTION ONE. AMENDMENT. Effective as of October 1, 2001, upon the
satisfaction of the conditions precedent set forth in Section Four hereof, the
Financing Agreement is hereby amended as follows:
(A) SECTION 1.01 DEFINED TERMS. Section 1.01 is amended by
deleting the definitions of the terms "Applicable Increment," "Case 1", "Case
2", "Case 3", "Case 4", "Case 5", "Case 6", "Case 7" and "Line of Credit Fee",
by substituting the following definitions in lieu thereof and by adding the
terms "Motor Sports Division", "Motor Sports Division Report", "Second
Amendment", and "Second Amendment Closing Date", and the following definitions
thereof, each in the appropriate alphabetical order:
"APPLICABLE INCREMENT" shall mean on any date of
determination, with respect to any Revolving Loan bearing
interest based on the Base Rate or LIBOR, or any portion of
the Term Loan bearing interest based on the Base Rate or
LIBOR, the applicable rate per annum set forth below under the
applicable caption, based upon the Fixed Charge Coverage Ratio
corresponding thereto for the period of four consecutive
Fiscal Quarters ending immediately prior to
such date of determination. The Applicable Increment shall
apply during the period commencing on the first day of the
month following the month during which the Agent shall have
received the financial statements required to be delivered
pursuant to Section 8.01 for any referenced Fiscal Quarter,
and ending on
the last day of the month during which the Agent
shall have received such financial statements for the next
succeeding Fiscal Quarter:
Fixed Charge Applicable Applicable Applicable Applicable
Coverage Ratio Increment for Increment for Increment for Increment for
Revolving Loans Revolving Loans Term Loan based Term Loan based
based on the based on LIBOR on the Base Rate on LIBOR
Base Rate
- ----------------------- ------------------ ------------------- ------------------ -------------------
Case 1 1.50% N/A 2.00% N/A
Case 2 1.25% N/A 1.75% N/A
Case 3 1.00% 2.75% 1.50% 3.25%
Case 4 .75% 2.50% 1.25% 3.00%
Case 5 .50% 2.25% 1.00% 2.75%
Case 6 .25% 2.00% .75% 2.50%
Case 7 .25% 2.00% .50% 2.25%
"CASE 1 shall mean a Fixed Charge Coverage Ratio of less than
1.25 to 1.00."
"CASE 2 shall mean a Fixed Charge Coverage Ratio of equal to
or greater than 1.25 to 1.00, and less than 1.75 to 1.00."
"CASE 3 shall mean a Fixed Charge Coverage Ratio of equal to
or greater than 1.75 to 1.00, and less than 2.25 to 1.00."
"CASE 4 shall mean a Fixed Charge Coverage Ratio of equal to
or greater than 2.25 to 1.00, and less than 2.50 to 1.00."
"CASE 5 shall mean a Fixed Charge Coverage Ratio of equal to
or greater than 2.50 to 1.00, and less than 2.75 to 1.00."
"CASE 6 shall mean a Fixed Charge Coverage Ratio of equal to
or greater than 2.75 to 1.00 and less than 3.00 to 1.00."
"CASE 7 shall mean a Fixed Charge Coverage Ratio of equal to
or greater than 3.00 to 1.00."
"LINE OF CREDIT FEE" shall mean (a) mean the fee payable to
the Agent, for the ratable benefit of the Lenders, due at the
end of each month for the Line of Credit, and (b) be
determined by multiplying the difference between (i) the
Revolving Line of Credit and (ii) the sum, for such month, of
(x) the average daily balance of Revolving
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Loans plus (y) the average daily undrawn balance of Letters of
Credit, in each case outstanding during such month, by one-half
of one percent (.50%) per annum for the number of days in such
month.
"MOTOR SPORTS DIVISION" shall mean the division of the
Borrower pursuant to which the manufacture and distribution of
motorcycles and related products, and the rendition of services
associated therewith, is conducted.
"MOTOR SPORTS DIVISION REPORT" shall mean a report concerning
certain aspects of the business and operations of the Motor
Sports Division, in substantially the form of Exhibit A to the
Second Amendment.
"SECOND AMENDMENT" shall mean the Second Amendment and Waiver
dated as of December 7, 2001, executed in connection with the
Agreement.
"SECOND AMENDMENT CLOSING DATE" shall mean the date on which
all of the conditions precedent to the effectiveness of the
Second Amendment shall have occurred.
(B) SECTION 8.01 FINANCIAL STATEMENTS, PROJECTIONS, BORROWING BASE
CERTIFICATES AND OTHER INFORMATION. Section 8.01 (h) is deleted in its entirety,
and the following is substituted in lieu thereof:
"(h)(i) on Monday of each week (or on the next Business Day,
if such Monday is not a Business Day) (u) a report of all
inventory purchased by the Borrower during the preceding week,
categorized by type, amount and cost, for intended use by the
Motor Sports Division, (w) a Motor Sports Division Report for
the preceding week, (x) a report of the Borrower's sales,
collections, debit and credit adjustments for the preceding
week, such report to contain such level of detail and to
otherwise be in such scope, form and substance as the Agent
may reasonably require, (y) a Borrowing Base Certificate as of
the last day of the preceding week, which Borrowing Base
Certificate shall reflect the Borrower's total Eligible
Inventory as of the last day of such preceding week, and (z) a
reconciliation to the Trade Accounts Receivable outstanding as
of the prior Monday (or the next Business Day of the prior
week, if such prior Monday is not a Business Day), and (ii)
within fifteen (15) days after the end of each month, a
Borrowing Base Certificate as of the last day of such month,
together with a report, in form and substance, and in such
detail, as shall be satisfactory to the Agent, of (w) the
amount and value, by location, of the Inventory as of the end
of such month, (x) an aging of the Trade
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Accounts Receivable as of the end of such month, (y) an aging
of the Borrower's accounts payable as of the end of such month
and (z) a work-up of ineligible Trade Accounts Receivable and
ineligible Inventory as of the end of such month; and"
(C) SECTION 8.08 USE OF PROCEEDS AND LETTERS OF CREDIT. Section 8.08 is
deleted in its entirety, and the following is substituted in lieu thereof:
"SECTION 8.08. USE OF PROCEEDS AND LETTERS OF CREDIT. The
proceeds of the Loans will be used only for the Borrower's
working capital needs and for the other purposes described in
the last sentence of Section 7.13, PROVIDED, HOWEVER, that on
and after the Second Amendment Closing Date, no proceeds of
Revolving Loans may be used, directly or indirectly, to fund
the operations of the Motor Sports Division, except to the
limited extent necessary to (x) purchase and convert inventory
to be used in the production of finished goods for which the
Borrower, through the Motor Sports Division, shall have
received purchase orders, and (y) fund the payment of
reasonable expenses, incurred in the ordinary course of
business, relating to such purchase and conversion, the
details of which, in each case, shall have been reported to
the Agent pursuant to the terms of Section 8.01(h)(i). No
part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a
violation of any of the Regulations of the Federal Reserve
Board, including Regulations U and X. Documentary or
commercial Letters of Credit will be issued only to support
the Borrower's importation of merchandise and inventory.
Standby Letters of Credit will be issued only to support the
Borrower's insurance obligations and its Hedging Obligations."
(D) SECTION 8.16 REAPPRAISALS AND CONSULTANT. Article VIII is amended
by adding a new Section 8.16 thereto, captioned "Reappraisals and Consultant",
as follows:
"SECTION 8.16. REAPPRAISALS AND CONSULTANT. As soon as
possible after the Second Amendment Closing Date, and in any
event no later than December 15, 2001, the Borrower shall
engage at its expense (x) one or more appraisal firms, each of
which shall be satisfactory to the Agent and the Lenders, for
the purpose of reappraising the values of the plant, property
and equipment used in the Borrower's business, the scope of
each of which such appraisals, and the methodology to be used
therein, shall be satisfactory to the Agent and the Lenders
and (y) an individual, either as a full time employee or
pursuant to a consulting arrangement, to assist in the
restructuring of the Borrower's business and operations, the
identity of which individual, and the terms and conditions
upon which such individual shall be engaged
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by the Borrower, shall be satisfactory to the Agent and
the Lenders."
(E) SECTION 9.10 FIXED CHARGE COVERAGE RATIO Section 9.10 is
deleted in its entirety, and the following is substituted in lieu thereof:
"SECTION 9.10. FIXED CHARGE COVERAGE RATIO. The Borrower shall
have a Fixed Charge Coverage Ratio, as of the end of each period
of twelve consecutive fiscal months ending on the last day of
the fiscal month set forth below, of not less than (or not worse
than, in the case of a negative ratio) the ratio set forth below
opposite such month:
TWELVE FISCAL MONTHS ENDING MINIMUM FIXED CHARGE COVERAGE
RATIO
-------------------------------- -----------------------------
(a) November 2001 <.08 to 1.00>
(b) December 2001 <.09 to 1.00>
(c) January 2002 <.07 to 1.00>
(d) February 2002 .15 to 1.00
(e) March, April and May 2002 .45 to 1.00
(f) June, July and August 2002 .75 to 1.00
(g) September, October and November 2002 .92 to 1.00
(h) December 2002 and January and February 2003 1.00 to 1.00
(i) March, April and May 2003 1.00 to 1.00
(j) June 2003, and each fiscal month thereafter, in 1.02 to 1.00
each case together with the 11 preceding fiscal
months"
(F) SECTION 9.11 CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Section 9.11
is deleted in its entirety, and the following is substituted in lieu thereof:
"SECTION 9.11. CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
The Borrower shall have, on a consolidated basis with
its consolidated Subsidiaries, a Fixed Charge Coverage Ratio,
as of the end of each period of twelve consecutive fiscal
months ending on the last day of the fiscal month set forth
below, of not less than (or not worse
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than, in the case of a negative ratio) the ratio set forth below
opposite such period:
Twelve Fiscal Months Ending Minimum Consolidated Fixed Charge
Coverage Ratio
---------------------------------------------- ---------------------------------------
(a) November 2001 <.04 to 1.00>
(b) December 2001 <.08 to 1.00>
(c) January 2002 <.04 to 1.00>
(d) February 2002 .30 to 1.00
(e) March, April and May 2002 .59 to 1.00
(f) June, July and August 2002 .82 to 1.00
(g) September, October and November 2002 .95 to 1.00
(h) December 2002, and each fiscal month 1.00 to 1.00
thereafter, in each case together with the
11 preceding fiscal months"
(G) SECTION 9.12 EBITDA. Section 9.12 is amended by (i) inserting
the parenthetical phrase "(or not worse than, in the case of a negative
amount)" after the phrase "not less than" appearing in the introductory
portion of such Section and (ii) deleting paragraph (f) thereof, and
substituting the following in lieu thereof:
FOUR FISCAL QUARTERS ENDING IN MINIMUM EBITDA
------------------------------ --------------
(f) December 2001 <1,000,000>
(H) SECTION 9.14 SENIOR LEVERAGE RATIO. Section 9.14 is amended by
(i) inserting the parenthetical phrase "(or not worse than, in the case of
a negative amount)" after the phrase "not greater than" appearing in the
introductory portion of such Section and (ii) deleting paragraph (f) thereof,
and substituting the following in lieu thereof:
FOUR FISCAL QUARTERS ENDING IN MINIMUM SENIOR LEVERAGE RATIO
------------------------------ -----------------------------
(f) December 2001 <35 to 1.00>
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(I) SECTION 9.15 COLLATERAL MANAGEMENT FEES AND AVAILABILITY. Section
9.15 is deleted in its entirety and the following is substituted in lieu
thereof:
"SECTION 9.15. COLLATERAL MANAGEMENT FEE AND AVAILABILITY.
The Borrower shall pay to the Agent, for the ratable
benefit of the Lenders, in cash, on April 30, 2001, and
on the first Business Day of each of July and October,
2001, and January, April and July 2002, a non-refundable
collateral management fee of $50,000, which fee shall be
due and payable, and deemed to be fully earned, on each
such date. In addition, with respect to each calendar
month prior to the first Business Day following the Sunday
closest to July 1, 2002, the Borrower's average Availability
for the 30 or 31 day period (or 28 day period, in the case
of the month of February) ending at the end of each such
month shall not be less than $1,500,000, PROVIDED, HOWEVER,
that with respect to the months of December 2001 and January
and February 2002, the Borrower's average Availability for
each such month shall not be less than $750,000. Beginning
with March 1, 2002, through the end of the Fiscal Year
beginning the Sunday closest to July 1, 2002, the Borrower's
Availability at the end of each day during such period shall
not be less than $1,500,000. Beginning with the first
Business Day following the Sunday closest to July 1, 2003,
and at all times thereafter, the Borrower's Availability at
the end of each day shall not be less than $2,000,000."
(J) SECTION 9.17 FINANCIAL PERFORMANCE AND RESULTS OF OPERATIONS OF
MOTOR SPORTS DIVISION. Article IX is amended by adding a new Section 9.17
thereto, captioned "Financial Performance and Results of Operations of Motor
Sports Division", as follows:
"SECTION 9.17. FINANCIAL PERFORMANCE AND RESULTS OF
OPERATIONS OF MOTOR SPORTS DIVISION. Both EBITDA and Net
Income, calculated solely with respect to the financial
performance and results of operations of the Motor Sports
Division, as if the Motor Sports Division was a separate
financial reporting entity, as of the end of and for each
fiscal month, beginning with the fiscal month of February
2002, shall be not less than $1.00. In addition, for each
of the fiscal months of December 2001 and January 2002, the
aggregate amount of costs and expenses associated with the
operation of the Motor Sports Division and paid in cash
during or at the end of any such month shall not exceed an
amount equal to (x) the aggregate purchase price of all
shipments of finished goods made by or through the Motor
Sports Division during or at the end of such month,
exclusive of the aggregate charges, if any, for shipping
costs, freight, sales and other taxes, and other similar
charges, payable by the purchasers of such finished goods
(but only to the extent such charges shall have been
included in the calculation of such purchase price),
MINUS (y) all credits, deductions and other set-offs taken
during or at the end of such
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month by Deutsche Financial Services Corporation pursuant
to the Vendor Agreement dated as of February 11, 1999
between the Borrower and Deutsche Financial Services
Corporation, PROVIDED, HOWEVER, that in the event that
such Vendor Agreement shall have expired or shall have
been cancelled or terminated, in any case during or at the
end of such month, then the amount calculated pursuant to
clause (x) hereof in respect of such month shall be
deemed to be zero (-0-)."
(K) SECTION 10.04 LETTER OF CREDIT FEES. Section 10.04 is deleted in
its entirety, and the following is substituted in lieu thereof:
"SECTION 10.04. LETTER OF CREDIT FEES. In consideration
of the Letter of Credit Guaranty of the Agent, the
Borrower shall pay the Agent, for the ratable benefit of
the Lenders, the Letter of Credit Fee which shall be an
amount equal to (a) one and one-quarter percent (1.25%)
per annum on the face amount of each documentary Letter
of Credit payable monthly, commencing upon issuance
thereof and (b) two and one-quarter percent (2.25%) per
annum, payable monthly, commencing upon issuance thereof,
on the face amount of each standby Letter of Credit less
the amount of any and all amounts previously drawn under
such standby Letter of Credit."
(L) ANNEX II LIEN PERFECTION INFORMATION. Annex II to the Financing
Agreement is deleted in its entirety, and Annex II to this Amendment is
substituted in lieu thereof.
(M) Schedule A to the Trademark Security Agreement executed by the
Borrower in favor of the Agent and dated as of the Closing Date is deleted in
its entirety and Schedule A-1 to this Amendment is substituted in lieu thereof,
and Schedule A to the Patent Security Agreement executed by the Borrower in
favor of the Agent and dated as of the Closing Date is deleted in its entirety,
and Schedule A-2 to this Amendment is substituted in lieu thereof.
SECTION TWO. WAIVER. Effective as of (x) September 29, 2001, in the
case of the covenant violations hereinafter described in respect of the fiscal
month of September 2001, and (y) October 27, 2001, in the case of the covenant
violations hereinafter described in respect of the fiscal month of October 2001,
upon the satisfaction of the conditions precedent set forth in Section Four
hereof, the Lenders hereby waive as separate Events of Default (i) the
Borrower's failure to have a Fixed Charge Coverage Ratio of at least .01 to 1.00
for the period of twelve consecutive months ending on the last day of the fiscal
month of October 2001, in violation of Section 9.10, (ii) the Borrower's failure
to have, on a consolidated basis with its consolidated Subsidiaries, a
Consolidated Fixed Charge Coverage Ratio of at least .20 to 1.00 for the period
of twelve consecutive fiscal months ending on the last day of each of the fiscal
months of September and October 2001, in violation of Section 9.11, and (iii)
the occurrence and continuance as of the date of this Amendment of each "Event
of Default" under, and as defined in, the Mezzanine Financing Agreement, arising
from the Borrower's violation of the Fixed Charge Coverage Ratio and the
Consolidated Fixed Charge Coverage Ratio described in clauses
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(i) and (ii) hereof, respectively (collectively the "Cross Default"), PROVIDED,
HOWEVER, that nothing contained herein shall be deemed to be a waiver of any
other Event of Default, whether or not the Lenders have any knowledge thereof,
nor shall anything contained herein be deemed to be a waiver of any future Event
of Default whatsoever.
SECTION THREE. REPRESENTATIONS AND WARRANTIES. To induce the Agent and
the Lenders to enter into this Amendment, the Borrower warrants and represents
to the Agent and the Lenders as follows:
(a) all of the representations and warranties contained in the
Financing Agreement and each other Loan Document to which the Borrower is a
party continue to be true and correct in all material respects as of the date
hereof, as if repeated as of the date hereof, except for such representations
and warranties which, by their terms, are only made as of a previous date;
(b) the execution, delivery and performance of this Amendment by the
Borrower is within its corporate powers, has been duly authorized by all
necessary corporate action, and the Borrower has received all necessary consents
and approvals (if any shall be required) for the execution and delivery of this
Amendment;
(c) upon its execution, this Amendment shall constitute the legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as such enforceability may be limited by
(i) bankruptcy, insolvency or similar laws affecting creditors' rights generally
and (ii) general principles of equity;
(d) The Borrower is not in default under any indenture, mortgage, deed
of trust, or other material agreement or material instrument to which it is a
party or by which it may be bound. Neither the execution and delivery of this
Amendment, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will (i) violate any law or regulation
applicable to it, (ii) cause a violation by the Borrower of any order or decree
of any court or government instrumentality applicable to it, (iii) conflict
with, or result in the breach of, or constitute a default under, any indenture,
mortgage, deed of trust, or other material agreement or material instrument to
which the Borrower is a party or by which it may be bound, (iv) result in the
creation or imposition of any lien, charge, or encumbrance upon any of the
property of the Borrower, except in favor of the Agent, to secure the
Obligations, or (v) violate any provision of the Certificate of Incorporation,
By-Laws or any capital stock provisions of the Borrower;
(e) No Event of Default has occurred and is continuing, except for
those Events of Default which have been waived pursuant to Section Two hereof;
and
(f) Since the date of the receipt by the Agent and the Lenders of the
financial statements of the Borrower and its consolidated Subsidiaries for the
fiscal year ended on June 30, 2001, no change or event has occurred which has
had or is reasonably likely to have a Material Adverse Effect.
SECTION FOUR. CONDITIONS PRECEDENT. This Amendment shall become
effective upon the date that the last of the following events shall have
occurred:
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(a) the Lenders shall have received this Amendment, duly executed by
the Borrower, together with (i) an updated Annex II to the Financing Agreement,
completed by the Borrower and (ii) an updated Schedule A to that certain
Trademark Security Agreement and an updated Schedule A to that certain Patent
Security Agreement, each executed by the Borrower in favor of the Agent and
dated as of the Closing Date;
(b) the Agent, the Lenders and their counsel shall have received and
reviewed a final draft of an amendment to the Mezzanine Financing Agreement
containing (i) financial covenant modifications that are consistent with the
modifications contained in this Amendment and (ii) a waiver of all events of
default that have occurred and are continuing thereunder, which draft shall
contain such terms and conditions (including conditions to its effectiveness) as
shall be reasonably satisfactory to the Agent, the Lenders and their counsel;
(c) except for those Events of Default which have been waived pursuant
to Section Two hereof, no Default shall have occurred and be continuing which
constitutes an Event of Default or would constitute an Event of Default upon the
giving of notice or lapse of time or both, and no event or development which has
had or is reasonably likely to have a Material Adverse Effect shall have
occurred, in each case since the date of delivery to the Lenders of the
Borrower's most recent financial statements;
(d) the Lenders shall have received (i) an officer's certificate,
executed by the chief financial officer or chief executive officer of the
Borrower, confirming the truth and accuracy of the representations and
warranties contained in Section Three hereof, and (ii) a secretary's
certificate, executed by the corporate secretary of the Borrower, certifying
that the Borrower's Board of Directors shall have met and considered the
transactions contemplated to occur under this Amendment, and shall have approved
the same;
(e) the Agent shall have received payment, in cash, for the ratable
benefit of the Lenders, of an amendment fee in the amount of $50,000, which fee
shall be non-refundable and deemed fully earned when paid. The Borrower hereby
authorizes the Agent to charge the Borrower's Revolving Loan Account, effective
as of September 30, 2001, with the amount of such fee; and
(f) counsel to the Agent and the Lenders shall have received payment of
all reasonable fees and disbursements incurred in connection with the
preparation, negotiation and closing of this Amendment and the transactions
contemplated to occur hereunder.
SECTION FIVE. GENERAL PROVISIONS.
(a) Except as herein expressly amended, the Financing Agreement and all
other agreements, documents, instruments and certificates executed in connection
therewith, are ratified and confirmed in all respects and shall remain in full
force and effect in accordance with their respective terms.
(b) All references to the Financing Agreement in the Financing
Agreement shall mean the Financing Agreement as amended as of the effective date
hereof, and as amended hereby and as hereafter amended, supplemented and
modified from time to time.
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(c) In consideration of the willingness of the Lenders to enter into
this Amendment and to consummate the transactions contemplated to occur
hereunder, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower irrevocably agrees to
pay in cash to the Agent, for the ratable benefit of the Lenders, a
non-refundable accommodation fee in the amount of $300,000. Such accommodation
fee shall be deemed to be fully earned on the date of this Amendment and shall
be paid in three equal and consecutive monthly installments of $100,000 each,
the first of which shall be due on the earlier to occur of (i) March 31, 2002
and (ii) the date on which both the outstanding principal balance of the Term
Loan, and that portion of the outstanding principal balance of the Revolving
Loans consisting of advances against Eligible Inventory used or to be used in
the Motor Sports Division, shall have been paid and satisfied in full, and
reduced to zero, respectively, and the second and third of which shall be due on
the last day of the first month and second month, respectively, following the
month during which the earlier of the dates set forth in clauses (i) and (ii)
hereof shall have occurred.
(d) The Borrower hereby authorizes the Agent to charge the Borrower's
loan account with the amount of each installment of the fee set forth in clause
(c) above as and when such installments becomes payable.
(e) The Borrower hereby acknowledges and agrees that each fee payable
by the Borrower to the Agent or the Lenders pursuant to this Amendment or
pursuant to any other Loan Document constitutes an Obligation.
(f) The Borrower agrees to deliver to the Agent and the Lenders as soon
as possible, and in any event no later than December 7, 2001, a copy of the
definitive engagement agreement, as executed, between the Borrower and Stone
Ridge Partners.
(g) The Borrower agrees to cooperate fully with the Agent and the
Lenders in connection with the perfection by the Agent, for the benefit of the
Lenders, of a first priority security interest in all personal property of the
Borrower, including without limitation any goods of the Borrower in the
possession of a vendor, warehouseman, lessor or other bailee of the Borrower.
(h) This Amendment shall be governed by and construed in accordance
with the internal laws of the State of New York, without regard to the conflicts
of law principals thereof.
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IN WITNESS WHEREOF, each of the Borrower, the Agent and each of the
Lenders has signed below to indicate its agreement with the foregoing and its
intent to be bound thereby.
CANNONDALE CORPORATION
as Borrower
By:/s/ William A. Luca
-------------------------------------------
Name: William A. Luca
Title: Vice President of Finance, Treasurer,
Chief Financial Officer and Chief
Operating Officer
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Agent and as a Lender
By:/s/ Nick Malatestinic
-------------------------------------------
Name: Nick Malatestinic
Title: Vice President, Team Leader
GMAC COMMERCIAL CREDIT LLC,
as a Lender
By:/s/ Frank Imperato
-------------------------------------------
Name: Frank Imperato
Title: Senior Vice President
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