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Exhibit 10.1.9
May 28, 1997
Cannondale Corporation
9 Brookside Place
Georgetown, CT 06829-0122
Attention: Mr. William F. Schmalkuche
Manager of Finance
Dear Mr. Luca:
With reference to our discussions on this subject, we are pleased to advise you
that we hold available to Cannondale Corporation (the "Company") and to those
branches, subsidiaries and affiliates of the Company approved by you in
accordance with this letter (the Company and all such approved branches,
subsidiaries and affiliates being called herein the "Borrowers" and each a
"Borrower"), until further notice, an overall credit arrangement (hereinafter
the "Arrangement") on the following terms and conditions:
LIMIT: Ten Million U.S. dollars ($10,000,000) or the equivalent thereof in other
currencies as specified below. This is the aggregate maximum principal amount at
any one time outstanding for all Borrowers.
VALIDITY: The Arrangement shall continue to be valid until canceled either by
you or by us.
DESIGNATION OF BORROWER: Whenever you wish a subfacility to be made available to
one of your branches, subsidiaries or affiliates, you will deliver to us a
Designation of Borrower and Guarantee in the form of Exhibit A hereto. On
receipt of such Designation, we will contact the appropriate lending branch or
branches, make a preliminary determination of whether they are in a position to
provide the subfacilities requested and, if they are, arrange appropriate direct
contact between the Borrower and the lending branch.
UTILIZATION, AVAILABILITY AND COMPLIANCE WITH LAW: It is intended that the
Arrangement be used for short term credit facilities, with terms of twelve
months or less. Loans and/or other credit facilities may be made available to
the Company and to other Borrowers by our office and/or by other specified
branches, agencies, subsidiaries or affiliates of our bank ("lending branches"
and each a "lending branch"). Credit facilities made available to individual
Borrowers are herein referred to as "subfacilities". The nature, terms and
conditions of the specific types of subfacilities which may be extended by a
particular lending branch to a particular Borrower, whether overdraft
facilities, letters of credit, discounting facilities, bankers acceptance
financing, foreign exchange contracts or any of the many other short term
facilities which the ABN AMRO Group is able to offer to its clients, must be
mutually agreed to between the respective Borrower and lending branch. No
commitment by us or any other lending branch to make available any specific
subfacility is hereby intended. In addition, and notwithstanding any such mutual
agreement, the availability of any subfacility from any lending branch is at all
times subject to local availability of funds (domestic or foreign) and to
compliance by the lending branch with all laws, regulations and governmental
policies applicable to that lending branch (in each case as determined by the
lending branch). Moreover, each subfacility is subject to all applicable
exchange control restrictions and it will be the responsibility of each Borrower
to obtain any necessary or appropriate foreign exchange license. We urge each
Borrower to consult the lending branch in this regard, however, as they may well
be able to give advice and assistance. The Company shall inform both us and (if
different) the respective lending branch, in writing, of the names of the
individual signatories authorized to make borrowing requests on behalf of a
specific Borrower. For the sake of good order, we remind you that we do not
anticipate receiving from you any request to utilize the Arrangement until the
"Existing Revolver" (as defined below) shall have become effective in accordance
with its terms.
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PRICING: Pricing of each subfacility shall be mutually agreed to by the
respective Borrower and lending branch. If you so instruct in the relevant
Designation of Borrower, your approval of the pricing structure agreed to
between Borrower and lending branch will be sent to you for approval before the
subfacility is extended to the Borrower.
FOREIGN EXCHANGE FLUCTUATIONS: The Arrangement and individual subfacilities may
be used in any one or more freely transferable and convertible currencies. In
the event that, by reason of foreign exchange fluctuations, the aggregate
liabilities of the Borrowers to the lending branches shall exceed the maximum
principal amount specified above (as calculated by us, based on our spot rates
from time to time for the relevant currencies) we will so inform you and you
will arrange to reduce the aggregate liabilities of the Borrowers to the lending
branches to or below the limit specified above. You agree that you will
accomplish that reduction as quickly as possible and in any event within ten
days of receipt of the respective notice from us.
DOCUMENTATION: Each lending branch will determine the documentation that it
requires from each Borrower with which it deals. Each Borrower will provide to
each lending branch with which it deals such financial statements as the
respective lending branch may reasonably require. We ask the Company to provide
us with appropriate evidence of its corporate authority to enter into the
transactions hereby contemplated, of the authority of the individual officers
who have acted and will act on behalf of the Company and of the authenticity of
the signatures of those officers. If you wish us to provide forms covering these
matters, we will do so at your request or, in the alternative, we will be happy
to evaluate your own standard forms.
EXISTING REVOLVER; COMPLIANCE WITH COVENANTS: You and we are presently
participating in negotiations pursuant to which it is anticipated that you and
we will both (together with others) enter into a $50,000,000 Senior Unsecured
Revolving Credit Facility Agreement (hereinafter called the "Existing
Revolver"), with NationsBank N.A. as Agent. Without in anyway limiting the
uncommitted nature of the Arrangement and each subfacility, you agree that, so
long as the Arrangement remains available or any amount is outstanding
thereunder, you will comply with each of the covenants contained in Articles 7
and 8 of the Existing Revolver, as in effect from time to time. Such covenants
shall be deemed to be incorporated herein, and you agree that if a breach of any
covenant contained in such sections occurs, we may, by written notice to you,
demand, and you will make, immediate payment of all amounts outstanding under
the Arrangement, whether matured or unmatured. In the event that the Arrangement
shall remain in effect after the termination of the Existing Revolver or the
termination of our Bank's participation in the Existing Revolver, then "Existing
Revolver" shall be deemed to refer to such Agreement as in effect immediately
prior to such termination.
CROSS DEFAULT TO EXISTING REVOLVER: Without in any way limiting the uncommitted
nature of the Arrangement and each subfacility, and in addition to such other
agreements as may be made between us, you agree that if any Cross Default (as
defined below) occurs, then we may, by written notice to you, demand, and you
will make, immediate payment of all amounts outstanding under the Arrangement,
whether matured or unmatured. If any amount under the Existing Revolver is
declared to be due prior to its stated maturity or is otherwise not paid when
due (whether by acceleration or otherwise), or if any event or condition shall
exist under the Existing Revolver the effect of which (after giving effect to
any relevant grace period) is to authorize or enable the banks party to the
Existing Revolver to declare any amount due thereunder to be due prior to its
stated maturity, then a "Cross Default" shall be said to have occurred.
DOCUMENTATION BETWEEN OUR OFFICE AND EACH LENDING BRANCH: Whenever a Borrower
makes use of a subfacility, our office in New York will have issued an
instrument in favor of the lending branch which will evidence our office's
acceptance of the credit risk of extensions of credit under the respective
subfacility. We will refer to such instruments herein as "Risk Allocation
Letters", although the actual title, and the characteristics, of each instrument
may vary, depending on the nature of the subfacility and the legal status of the
lending branch. Without limiting the foregoing, the term "Risk Allocation
Letter", for purposes of this agreement, may refer to a standby letter of credit
or a bank guarantee. Each Risk Allocation Letter will be in an amount sufficient
(as determined by the Bank) to assure the lending branch of our full assumption
of credit responsibility. Depending on the
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characteristics of a particular Risk Allocation Letter, we may need additional
documentation from you; before issuing a standby letter of credit, for example,
we must receive from you a specific application/reimbursement agreement.
GOVERNING LAW: The Arrangement and the obligations of the Company shall be
governed by and constructed in accordance with the laws of the State of New
York. Each subfacility shall be governed and construed in accordance with the
laws of the jurisdiction in which the relevant lending branch is located.
NOTICES: All communications and notices regarding the Arrangement should be sent
to the respective parties hereto at the addresses indicated below:
The Company:
Cannondale Corporation
9 Brookside Place
Georgetown, CT 06829-0122
Attn: William F. Schmalkuche Tel: (203) 544-3319
Manager of Finance Fax: (203) 852-9081
The Bank:
ABN AMRO Bank N.V.
New York Branch
500 Park Avenue
New York, NY 10022
Attn: Thomas Rogers Tel: (212) 446-4122
Fax: (212) 832-7129
Please evidence your acceptance of the foregoing terms and conditions of the
Arrangement by signing and returning to us the enclosed duplicate copy of this
letter, whereupon this letter shall become a binding agreement between us.
Very truly yours,
ABN AMRO Bank N.V.
New York Branch
/s/ NANCY W. LANZONI /s/ THOMAS T. ROGERS
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Nancy Lanzoni Thomas T. Rogers
Group Vice President Assistant Vice President
ACCEPTED AND AGREED:
Cannondale Corporation
By: /s/ WILLIAM A. LUCA
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William A. Luca Vice President and Chief Financial Officer
(Authorized Signatory)
Date Accepted: May 30, 1997
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Exhibit A
DESIGNATION OF BORROWER AND GUARANTEE
ABN AMRO Bank N.V.
500 Park Avenue
New York, New York 10022
Gentlemen:
We refer to the Umbrella Arrangement Agreement, dated May 28, 1997 (the
"Umbrella Agreement") between you and us. Terms defined in the Umbrella
Agreement which are used herein shall, unless otherwise defined herein, have the
same meaning provided therefore in the Umbrella Agreement.
We hereby designate:
Cannondale Europe, B.V.
[name
Postbus 5100 Hanzepoort 27
and address
7570 GC Oldenzaal Netherlands
of Borrower]
a corporation organized and existing under the laws of the Netherlands or any
successor in interest thereof a Borrower in accordance with the Umbrella
Agreement. In consideration of you or any one or more lending branches extending
subfacilities to the Borrower hereby designated, the undersigned hereby
absolutely and unconditionally guarantees to you, to each respective lending
branch and to your and their respective successors and assigns, the full and
prompt payment when due by its terms of any and all obligations of the Borrower
hereby designated towards you or such lending branches, now existing and/or
hereafter to be incurred, and such interest as may accrue thereon, irrespective
of the validity, regularity or enforceability of the obligations of the Borrower
hereby designated provided, however, that the liability of the undersigned
hereunder at any one time shall in no event exceed the aggregate principal sum
of
$10,000,000.00
specify subfacility limit
and such interest as may accrue thereon, together with any and all expenses
(including reasonable attorney's fees) which may be incurred by you, on your
behalf, or by or on behalf of any lending branch in collecting such indebtedness
and/or enforcing any rights hereunder. If, at any time, you or any lending
branch shall inform us that an amount due to you from the Borrower hereby
designated has not been paid, the undersigned undertakes to pay such amount (or
its equivalent in
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the currency contemplated by the Umbrella Agreement) to you at your first
request at the office of the respective lending branch without the necessity of
any suit or proceeding on your part or on the part of any lending branch of any
kind or nature whatsoever and the undersigned agrees to accept as prima facie
evidence for the amount payable by the undersigned the balance which shall
appear due to you or the respective lending branch from the Borrower hereby
designated according to the respective lending branch's books and records.
The undersigned hereby waives notice of acceptance of the guarantee contained
herein, and also presentment, protest and notice of protest or dishonor of any
evidences of indebtedness hereby guaranteed, and consents that in your
discretion (or that of the relevant lending branch) at the time of payment of
all or part of such indebtedness may be extended or renewed, and that any
collateral held therefore may be released, exchanged or otherwise disposed of at
the discretion of the lending branch, at any time, without affecting the
liability of the undersigned.
The guarantee contained herein, which is binding upon the undersigned's
successors and assigns, is a guarantee of payment not of collection and shall be
construed in accordance with the laws of the State of New York. It is a
continuing guarantee which will remain in force until the tenth day after actual
receipt by you of a written notice of revocation executed on behalf of the
undersigned. Such revocation shall be effective the tenth day after receipt of
such notice by you at your address shown above or at such other address as you
shall have designated in writing to the undersigned, but it shall be ineffective
with regard to any accommodation granted to the Borrower hereby designated at
any time prior to the tenth day after receipt by you of such notice.
Very truly yours,
Cannondale Corporation
By:/s/ WILLIAM A LUCA
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Vice President and Chief Financial Officer
(Authorized Signatory)
Date: May 30, 1997
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