Exhibit 10.1
AMENDED AND RESTATED CREDIT
AGREEMENT
between
CYBEX INTERNATIONAL, INC., as
Borrower
and
GMAC COMMERCIAL FINANCE LLC, as
Lender
Dated as of February 1,
2005
THIS AMENDED AND RESTATED CREDIT
AGREEMENT is made as of February 1, 2005, by and between CYBEX
INTERNATIONAL, INC., a New York corporation (the
“Borrower”), having its chief executive office at 10
Trotter Drive, Medway, Massachusetts 11779 and GMAC COMMERCIAL
FINANCE LLC (the “Lender”), having an office at 210
Interstate North Parkway, Suite 315, Atlanta, Georgia
30339.
SECTION I
DEFINITIONS
1.1 Definitions . All
capitalized terms used in this Agreement shall have the meanings
assigned to them below:
Acquisition
. Any transaction pursuant to which
the Borrower or any of its Subsidiaries (a) acquires any equity
securities (or warrants, options or other rights to acquire such
securities) of any Entity other than the Borrower or any Entity
which is not then a Subsidiary of the Borrower, pursuant to a
solicitation of tenders therefor, or in one or more negotiated
block, market or other transactions not involving a tender offer,
or a combination of any of the foregoing, or (b) makes any Entity a
Subsidiary of the Borrower, or causes any such Entity to be merged
into the Borrower or any of its Subsidiaries, in any case pursuant
to a merger, purchase of assets or any reorganization providing for
the delivery or issuance to the holders of such Entity’s then
outstanding securities, in exchange for such securities, cash or
securities of the Borrower or any of its Subsidiaries, or a
combination thereof, or (c) purchases all or substantially all of
the business or assets of any Entity.
Affiliate . With respect to any Person, any other Person
directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes
of this definition, “control” when used with respect to
any specified Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and
the terms “controlling” and “controlled”
have meanings correlative to the foregoing.
Agreement . This Agreement, as the same may be
supplemented or amended from time to time.
Beneficial Ownership
. Beneficial ownership as
determined in accordance with Rule 13d-3 of the Securities and
Exchange Commission under the Exchange Act, as in effect on the
date hereof.
Borrower . See Preamble.
Business Day
. As defined in each
Note.
Capital Assets
. Fixed assets, both tangible (such
as land, buildings, fixtures, machinery and equipment) and
intangible (such as patents, copyrights, trademarks, franchises and
good will); provided that Capital Assets shall not include any item
customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with
GAAP.
Capital Expenditures
. For any period the aggregate of
all expenditures of the Borrower during such period that, in
conformity with GAAP, are required to be included in or reflected
by the property, plant or equipment or similar fixed asset account
reflected in the balance sheet of the Borrower.
Capital Stock
. Any and all shares, interests,
participations or other equivalents (however designated) of capital
stock of a corporation, any and all equivalent ownership interests
in an Entity (other than a corporation) and any and all warrants,
rights or options to purchase any of the foregoing.
Capitalized Leases
. Leases under which the Borrower
or any of its Subsidiaries is the lessee or obligor, the discounted
future rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.
Change of Control
. The occurrence of any of the
following:
(a) any Person or two or more
Persons acting in concert shall have acquired Beneficial Ownership,
directly or indirectly, through a purchase, merger or other
transaction or series of transactions or otherwise, of a number of
shares of (i) common stock of the Borrower or (ii) Voting Stock of
the Borrower, which in either case exceeds the number of such
shares then beneficially owned by UM Holdings, Ltd. and its
Affiliates; or
(b) during any period of twelve (12)
consecutive calendar months, individuals who were either (i)
directors of the Borrower on the first day of such period, or (ii)
appointed or nominated for election to the board of directors by a
majority of the individuals who were members of the board of
directors on the first day of such period, shall cease to
constitute a majority of the board of directors.
Code . The Internal Revenue Code of 1986 and the
rules and regulations thereunder, collectively, as the same may
from time to time be supplemented or amended and remain in
effect.
Collateral
. All property, real or personal, in
which Lender is granted a lien, or security interest, or in which
title or security title is granted to or for the benefit of the
Lender as security for the Obligations pursuant to the Security
Documents.
Consolidated or
consolidated . With
reference to any term defined herein, shall mean that term as
applied to the accounts of the Borrower and its Subsidiaries,
consolidated in accordance with GAAP.
Controlled Group
. All trades or businesses (whether
or not incorporated) under common control that, together with the
Borrower, are treated as a single employer under Section 414(b) or
414(c) of the Code or Section 4001 of ERISA.
Credit Line Advance
. See Section 2.2.
Credit Line Advance
Account . A deposit
account designated by the Borrower by written notice to the Lender
and approved by Lender.
2
Credit Line Advance
Rate . (a) With respect
to any Credit Line Advance that shall constitute purchase money
financing with respect to a new Credit Line Asset, 80%, and (b)
with respect to any other Credit Line Asset, 100%.
Credit Line Advance Request
Deadline . See Section
2.2.
Credit Line Asset
. Equipment and/or machinery
acquired or to be acquired by Borrower with the proceeds of a
Credit Line Advance.
Credit Line Asset Purchase
Price . With respect to
any Credit Line Asset, the lesser of (i) the actual price paid or
to be paid by the Borrower with respect to acquiring such Credit
Line Asset and (ii) Lender’s determination of value (made in
its sole discretion) of such Credit Line Asset based solely upon
Lender’s review of such Credit Line Asset.
Credit Line
Availability . The
willingness of the Lender from time to time to make Credit Line
Advances to the Borrower, in Lender’s sole and absolute
discretion pursuant to this Agreement with the aggregate Credit
Line Principal Amount of such Credit Line Advances never exceeding
the Credit Line Maximum Availability.
Credit Line Availability
Period . The period from
and including the date hereof through and including September 30,
2005.
Credit Line Maximum
Availability .
$3,000,000.00.
Credit Line Note
. That certain Promissory Note of
the Borrower to the Lender dated the date hereof in the original
principal amount of $3,000,000.00, a copy of which is attached
hereto as Exhibit A-2, together with any and all extensions,
renewals, substitutions, replacements, amendments, modifications
and/or restatements thereof.
Credit Line Principal
Amount . The outstanding
principal balance of the Credit Line Note as of the date of
determination.
Default . An Event of Default or event or condition
that, but for the requirement that time elapse or notice be given,
or both, would constitute an Event of Default.
EBITDA . In any period, all earnings of the Borrower
for said period before all interest and tax obligations of the
Borrower for said period and all depreciation and amortization
expense for said period, determined in accordance with GAAP on a
consistent basis with the latest audited financial statements of
the Borrower, but excluding the effect of extraordinary or
non-reoccurring gains or losses for such period.
Encumbrances
. See Section 6.1.
Entity . Any corporation, limited liability company,
partnership, limited liability partnership, trust, other
unincorporated association, business, or other legal entity, and
any Governmental Authority.
3
Equipment . All present and hereafter acquired equipment
(as defined in the UCC) including, without limitation, all
machinery, equipment, furnishings and fixtures, and all additions,
substitutions and replacements thereof, wherever located, together
with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto and all proceeds thereof of
whatever sort.
ERISA . The Employee Retirement Income Security Act of
1974 and the rules and regulations thereunder, collectively, as the
same may from time to time be supplemented or amended and remain in
effect.
Event of Default
. Any event described in Section
7.1.
Financial Covenants
. The covenants set forth in
Sections 5.9, and 5.10 herein.
Fixed Charge Coverage
Ratio . For any Reference
Period, the ratio of the following for the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with
GAAP: (a) EBITDA less non-financed Capital Expenditure for such
period, less, without duplication, losses incurred in respect of
Support Obligations during such period, to (b) Fixed Charges for
such period.
Fixed Charges
. For any applicable twelve-month
period of computation, the sum of (a) interest expense paid or
accrued in respect of any Indebtedness during such period, without
duplication, plus (b) taxes to the extent paid during or
with respect to such period plus (c) regularly scheduled
payments of principal paid on Indebtedness (excluding the Revolving
Facility) during such period.
Funded Debt
. As of any date, the Indebtedness
of the Borrower and its Subsidiaries for money borrowed from
financial institutions.
GAAP . Those generally accepted accounting principles
and practices which are recognized as such by the American
Institute of Certified Public Accountants acting through its
Accounting Principles Board or by the Financial Accounting
Standards Board or through other appropriate boards or committees
thereof, as in effect on the date hereof.
Governmental Authority
. Any foreign, federal, state,
regional, local, municipal or other government, or any department,
commission, board, bureau, agency, public authority or
instrumentality thereof, or any court or arbitrator.
Government Lists
. (i) the Specially Designated
Nationals and Blocked Persons Lists maintained by OFAC, (ii) any
other list of terrorists, terrorist organizations or narcotics
traffickers maintained pursuant to any of the Rules and Regulations
of OFAC, or (iii) any similar lists maintained by the United States
Department of State, the United States Department of Commerce or
any other governmental authority or pursuant to any Executive Order
of the President of the United States of America.
Guarantees
. As applied to the Borrower and its
Subsidiaries, all guarantees, endorsements or other contingent or
surety obligations with respect to obligations of others whether or
not reflected on the consolidated balance sheet of the Borrower and
its Subsidiaries, including any obligation to
4
furnish funds, directly or indirectly (whether
by virtue of partnership arrangements, by agreement to keep-well or
otherwise), through the purchase of goods, supplies or services, or
by way of stock purchase, capital contribution, advance or loan, or
to enter into a contract for any of the foregoing, for the purpose
of payment of obligations of any other person or entity.
Indebtedness
. As applied to the Borrower and its
Subsidiaries, (i) all obligations for borrowed money or other
extensions of credit whether or not secured or unsecured, absolute
or contingent, including, without limitation, unmatured
reimbursement obligations with respect to letters of credit or
guarantees issued for the account of or on behalf of the Borrower
and its Subsidiaries and all obligations representing the deferred
purchase price of property, other than accounts payable arising in
the ordinary course of business, (ii) all obligations evidenced by
bonds, notes, debentures or other similar instruments, (iii) all
obligations secured by any mortgage, pledge, security interest or
other lien on property owned or acquired by the Borrower or any of
its Subsidiaries whether or not the obligations secured thereby
shall have been assumed, (iv) that portion of all obligations
arising under Capitalized Leases that is required to be capitalized
on the consolidated balance sheet of the Borrower and its
Subsidiaries, (v) all Guarantees, and (vi) all obligations that are
immediately due and payable out of the proceeds of or production
from property now or hereafter owned or acquired by the Borrower or
any of its Subsidiaries.
Lender . See Preamble.
Leverage Ratio
. For any Reference Period, the
ratio of Funded Debt to EBITDA.
Loan Documents
. This Agreement, each Note, the
Security Documents, and each other document executed and delivered
by Borrower to Lender in connection with the Loans.
Loans . Each of the loans described in Section 2.1 and
Section 2.2.
Note . Collectively, the Term Note and the Credit
Line Note.
Obligations
. Any and all obligations of the
Borrower to the Lender of every kind and description, direct or
indirect, absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter arising, regardless of how
they arise or by what agreement or instrument, if any, and
including obligations to perform acts and refrain from taking
action as well as obligations to pay money.
OFAC . The United States Office of Foreign Assets
Control.
Patriot Act
. The Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as the same may
be amended from time to time, and corresponding provisions of
future laws.
Patriot Act Offense
. Any violation of the criminal
laws of the United States of America or of any of the several
states, or that would be a criminal violation if committed within
the jurisdiction of the United States of America or any of the
several states, relating to terrorism or the laundering of monetary
instruments, including any offense under (a) the criminal laws
against terrorism; (b) the criminal laws against money laundering,
(c) the Bank Secrecy Act, as amended, (d) the Money
5
Laundering Control Act of 1986, as amended, or
(e) the Patriot Act. “Patriot Act Offense” also
includes the crimes of conspiracy to commit, or aiding and abetting
another to commit, a Patriot Act Offense.
PBGC . The Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under
ERISA.
Permitted Exceptions
. (a) the liens existing on the
date hereof set forth on Exhibit G hereof; (b) Purchase Money
Liens; (c) statutory liens of landlords and liens of carriers,
warehousemen, mechanics, materialmen and other like liens imposed
by law, created in the ordinary course of business and for amounts
not yet due (or which are being contested in good faith, by
appropriate proceedings or other appropriate actions which are
sufficient to prevent imminent foreclosure of such liens) and with
respect to which adequate reserves or other appropriate provisions
are being maintained by the Borrower in accordance with GAAP; (d)
deposits made (and the liens thereon) in the ordinary course of
business of the Borrower (including, without limitation, security
deposits for leases, indemnity bonds, surety bonds and appeal
bonds) in connection with workers’ compensation, unemployment
insurance and other types of social security benefits or to secure
the performance of tenders, bids, contracts (other than for the
repayment or guarantee of borrowed money or purchase money
obligations), statutory obligations and other similar obligations
arising as a result of progress payments under government
contracts; (e) easements (including, without limitation, reciprocal
easement agreements and utility agreements), encroachments, minor
defects or irregularities in title, variation and other
restrictions, charges or encumbrances (whether or not recorded)
affecting the Property (as such term is defined in the Security
Instrument), if applicable, and which in the aggregate (A) do not
materially interfere with the occupation, use or enjoyment by the
Borrower in its business of the Property so encumbered and (B) in
the reasonable business judgment of Lender, do not materially and
adversely affect the value of such Property; and (f) liens granted
to Lender by the Borrower; (g) tax liens which are not yet due and
payable or which are being diligently contested in good faith by
the Borrower by appropriate proceedings, and which liens are not
(x) filed on any public records, (y) senior to the liens of Lender,
or (z) for Taxes due the United States of America or any state
thereof having similar priority statutes; (h) liens and
encumbrances and other title exceptions noted on the title
insurance policies for the Property delivered to and accepted by
Lender on the date hereof; and (i) liens securing Capitalized
Leases, provided that (A) each lien securing such
Capitalized Leases shall attach only to the property being leased,
(B) a description of the assets being leased is furnished to
Lender, and (C) the debt incurred in connection with such
Capitalized Leases shall not exceed, in the aggregate,
$1,500,000.00 in any calendar year.
Person . Any individual or Entity.
Plan . At any time, an employee pension or other
benefit plan that is subject to Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and is
either (i) maintained by the Borrower or any member of the
Controlled Group for employees of the Borrower or any member of the
Controlled Group or (ii) if such Plan is established, maintained
pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions
and to which the Borrower or any member of the Controlled Group is
then making or accruing an obligation to make contributions or has
within the preceding five Plan years made contributions.
6
Proposed Credit Line Advance
Notice . See Section
2.2.
Purchase Money Liens
. Liens on any item of Equipment
acquired after the date of this Agreement provided that (a) each
such lien shall attach only to the property to be acquired, (b) a
description of the Equipment so acquired is furnished to Lender,
and (c) the debt incurred in connection with such acquisitions
shall not exceed, in the aggregate, $300,000.00 in any calendar
year.
Real Property Security
Instrument . Each of
those certain Amended and Restated Mortgages, Assignments of Leases
and Rents, Security Agreements, Financing Statements and Fixture
Filings dated the date hereof in the original principal amount of
$12,661,111.12, made by Borrower for the benefit of Lender, copies
of which are attached hereto as Exhibit B-1 and Exhibit B-2,
together with any and all extensions, renewals, substitutions,
replacements, amendments, modifications and/or restatements
thereof.
Reference Period
. As of any date of determination,
the period of four (4) consecutive fiscal quarters of the Borrower
and its Subsidiaries ending on such date, or if such date is not a
fiscal quarter end date, the period of four (4) consecutive fiscal
quarters most recently ended (in each case treated as a single
accounting period).
Request for Advance
. See Section 2.2.
Revolving Facility
. The loan facility established
pursuant to that certain Financing Agreement dated as of July 16,
2003 by and between The CIT Group/Business Credit, Inc., and
Borrower, and any modification, extension, refinancing or
replacement of said loan facility.
Security Documents
. Each Real Property Security
Instrument.
Subsidiary
. Any Entity of which 50% or more of
the ordinary Voting Power for the election of a majority of the
members of the board of directors or other governing body of such
Entity is held or controlled by the Borrower or a Subsidiary of the
Borrower; or any other such Entity the management of which is
directly or indirectly controlled by the Borrower or a Subsidiary
of the Borrower through the exercise of Voting Power or otherwise;
or any joint venture, whether incorporated or not, in which the
Borrower has a 50% ownership interest.
Support Obligations
. All recourse Indebtedness with
respect to leases and third party financing arrangements pertaining
to the Borrower’s products and related matters.
Taxes . All federal, state, municipal and other
governmental taxes, levies, charges, claims and assessments which
are or may be due by the Borrower with respect to its business,
operations, Collateral or otherwise.
Term Note . That certain Promissory Note of the Borrower
to the Lender dated July 13, 2004 in the original principal amount
of $11,000,000.00, as amended by that certain First
7
Amendment to Note dated the date hereof between
Borrower and Lender, copies of which note and amendment are
attached hereto as Exhibit A-1, together with any and all
extensions, renewals, substitutions, replacements, amendments,
modifications and/or restatements thereof.
UCC . The Uniform Commercial Code as in effect from
time to time in the state of New York.
Voting Power
. means, with respect to any Voting
Stock of any Entity at any time, the number of votes entitled to
vote generally in the election of directors of such Entity that are
attributable to such Voting Stock at such time divided by the
number of votes entitled to vote generally in the election of
directors of such Entity that are attributable to all shares of
Capital Stock of such Entity (including such Voting Stock) at such
time.
Voting Stock
. Capital Stock issued by a
corporation, or equivalent interests in any other Entity, the
holders of which are ordinarily, in the absence of contingencies,
entitled to vote for the election of directors (or persons
performing similar functions) of such Entity, even if the right so
to vote has been suspended by the happening of such a
contingency.
1.2 Accounting Terms . All
terms of an accounting character shall have the meanings assigned
thereto by GAAP applied on a basis consistent with the financial
statements referred to in Section 4.6 of this Agreement, modified
to the extent, but only to the extent, that such meanings are
specifically modified herein.
SECTION II
DESCRIPTION OF
CREDIT
2.1 The Term Loan . Lender
made a term loan to Borrower in the original principal amount of
$11,000,000.00 on July 13, 2004, which loan is evidenced by and is
payable in accordance with the terms and provisions of the Term
Note.
2.2 The Credit Line Loan
.
(a) Credit Line Availability
. Subject to and upon the terms and conditions set forth herein,
Lender may, in its sole and absolute discretion, at any time and
from time to time during the Credit Line Availability Period (or
such earlier date as the Credit Line Availability shall have been
terminated pursuant to the terms hereof), make an advance or
advances (each a “Credit Line Advance” and,
collectively, the “Credit Line Advances”) to Borrower,
which Credit Line Advance: (a) shall be made in Lender’s sole
and absolute discretion at any time and from time to time; (b), if
made, shall bear interest and shall be payable in accordance with
the terms and provisions of the Credit Line Note; (c), if made,
shall be secured by the Collateral, provided, however, that the sum
of (i) the Credit Line Principal Amount plus (ii) the amount
requested in the Request for Advance (and any outstanding but
unfunded Requests for Advance) shall not exceed the Credit Line
Maximum Availability.
(b) Minimum Borrowing Amount
. The principal amount of each Credit Line Advance shall not be
less than $600,000.00.
8
(c) Requests for Advance
.
(A) Whenever Borrower desires to
incur a Credit Line Advance hereunder, it shall first provide
Lender with sufficient notice (a “Proposed Credit Line
Advance Notice”) and time to conduct and/or require, at
Borrower’s expense, due diligence of any kind as Lender
reasonably requires on any Credit Line Asset which Borrower
contemplates including in a Request for Advance as a Credit Line
Asset to be financed by a Credit Line Advance and in which a lien
will be granted to Lender as collateral for the Loans. Upon
completion (or earlier if agreed to by Lender in its sole
discretion) of any and all due diligence and Lender’s
agreement to finance a Credit Line Asset subject to the due
diligence review, Borrower shall then deliver to the Lender (i) a
Request for Advance substantially in the form of Exhibit H (the
“Request for Advance”) and (ii) any other information
requested by Lender not later than 10:00 a.m. (New York City time)
on the third (3 rd ) Business Day prior to the
proposed date of such Credit Line Advance (the “Credit Line
Advance Request Deadline”). Each Request for Advance: (A)
shall be appropriately completed to specify the aggregate principal
amount of the Credit Line Advance to be made and the proposed date
of such Credit Line Advance (which shall be a Business Day); and
(B) the calculation for determining the amount requested in such
Request for Advance, including the Credit Line Asset Purchase Price
for each Credit Line Asset, as applicable and the applicable Credit
Line Advance Rate and verification that amount of the requested
Credit Line Advance plus the Credit Line Principal Amount does not
violate this Section 2.2. The Borrower may withdraw any Proposed
Credit Line Advance Notice or Request for Advance at any time prior
to the Credit Line Advance being made.
(B) In no event shall Lender make
any Credit Line Advance unless (i) Lender shall have received prior
to the applicable Credit Line Advance Request Deadline evidence
reasonably satisfactory to Lender in all respects that it shall
have a first priority lien on the Credit Line Asset to be financed
by a Credit Line Advance upon the funding of the Credit Line
Advance (subject only on the date of funding to any existing liens
on such Credit Line Asset that will be paid off in full with the
proceeds of such Credit Line Advance), (ii) Lender shall have
completed its due diligence and be reasonably satisfied with the
results thereof, (iii) all conditions set forth in Section III have
been and continue to be satisfied in all material respects, and
(iv) all representations and warranties set forth in Section IV are
true, accurate and complete in all material respects.
(C) Notwithstanding anything
contained herein to the contrary, but subject to the provisions of
this Section II, the amount requested in each Request for Advance
shall not exceed, unless waived by the Lender in its sole
discretion, the product of the (i) the applicable Credit Line
Advance Rate multiplied by (ii) the Credit Line Asset Purchase
Price for the Asset included in such applicable Request for
Advance.
(d) Disbursement of Funds .
On the date specified in the Request for Advance with respect to
any requested Credit Line Advance, the Lender may make available to
the Borrower the requested amount of such Credit Line Advance in
Dollars by wire transfer of funds to the Borrower’s Credit
Line Advance Account unless, the Lender, in its sole discretion,
determines that such funds are to be wire transferred to Persons
selling such Credit Line Asset and/or holding a lien on
such
9
Credit Line Asset which is being financed with
the proceeds of such Credit Line Advance in which case the funds
shall be transferred as provided in any payoff or other
instructional letters or documents received from such Persons; such
letters being in form and substance satisfactory to
Lender.
SECTION III
CONDITIONS OF
LOANS
3.1 Conditions Precedent to
Loans . The obligation of the Lender to make the Loans is
subject to the condition precedent that the Lender shall have
received, in form and substance satisfactory to the Lender and its
counsel, the following:
(a) this Agreement, the Notes, the
Security Documents and the other Loan Documents, duly executed by
the Borrower;
(b) a certificate of the Secretary
or an Assistant Secretary (or equivalent officer) of the Borrower
with respect to resolutions of the Board of Directors (or
equivalent governing body) authorizing the execution and delivery
of this Agreement, the Notes, the Security Documents and the other
Loan Documents and identifying the officer(s) authorized to
execute, deliver and take all other actions required under this
Agreement, and providing specimen signatures of such
officers;
(c) the certificate of
incorporation, articles of organization, or other substantially
similar formative documents of the Borrower and all amendments and
supplements thereto, filed in the office of the Secretary of State
of New York, each certified by said Secretary of State as being a
true and correct copy thereof (receipt of which is acknowledged by
Lender);
(d) the bylaws, operating agreement,
or other substantially similar governance document of the Borrower
and all amendments and supplements thereto, certified by the
Secretary or an Assistant Secretary (or equivalent officer) as
being a true and correct copy thereof (receip
