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CML GROUP, INC.
AND ITS UNDERSIGNED SUBSIDIARIES
000 Xxxx Xxxxxx
Xxxxx, Xxxxxxxxxxxxx 00000
AMENDMENT NO. 2 TO CREDIT AGREEMENT AND LIMITED WAIVER
Dated as of March 30, 1998
BankBoston, N.A.
(f/k/a The First National Bank of Boston)
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Rothschild Recovery Fund, L.P.
1251 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We refer to the Revolving Credit Agreement, dated as of April 17, 1996,
amended and restated as of August 28, 1997 and further amended as of March 11,
1998 (as so amended, the "CREDIT AGREEMENT"), among (i) CML Group, Inc. ("CML"),
(ii) NordicTrack, Inc., Nordic Advantage, Inc. and Xxxxx & Xxxxxx, Ltd.
(collectively, the "BORROWERS"), (iii) BankBoston, N.A. (f/k/a The First
National Bank of Boston) ("BANKBOSTON"), Rothschild Recovery Fund, L.P.
("Rothschild"), and the other financial institutions from time to time listed on
SCHEDULE 1 thereto (each a "LENDER" and collectively, the "LENDERS") and (iv)
BankBoston, N.A., as administrative, collateral and documentation agent for the
Lenders (the "ADMINISTRATIVE AGENT") and as Issuing Bank. Capitalized terms
which are used in this letter agreement (this "AMENDMENT AGREEMENT") without
definition and which are defined in the Credit Agreement shall have the same
meanings herein as in the Credit Agreement. CML and the Borrowers are sometimes
referred to herein collectively as the "OBLIGORS".
We are not in compliance with the Accrued Expenses covenant for S&H set
forth in Section 11.3(a) of the Credit Agreement for the week ending March 14,
1998. We are also not in compliance with the Maximum Weekly Borrower Exposure
covenant for S&H set forth in Section 11.4(a) of the Credit Agreement for the
week ending March 14, 1998. Each of the foregoing constitute an Event of Default
under Section 14.1 of the Credit Agreement (the "SPECIFIED EVENTS OF DEFAULT").
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We have requested that the Administrative Agent and each of the Lenders
agree, on the terms and subject to the conditions contained herein, to waive the
Specified Events of Default for the week ending March 14, 1998 and to amend
Section 11.3(a) of the Credit Agreement.
The Administrative Agent and the Lenders have advised us that they are
prepared to grant such waivers and to so amend the Credit Agreement, on the
terms and subject to the conditions and in reliance on our representations
contained herein.
SECTION 1. AMENDMENT TO CREDIT AGREEMENT. Section 11.3 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
11.3. ACCRUED EXPENSES. CML and the Borrowers will not permit
(a) the aggregate amount of Accrued Expenses of S&H at any time (i) during
the month of February 1998 to exceed $5,956,859 and (ii) during any month
thereafter to exceed the amount of projected Accrued Expenses of S&H as of
the end of such month set forth in the Monthly Budget, or (b) the aggregate
amount of Accrued Expenses of NordicTrack at any time during any month to
exceed the amount of projected Accrued Expenses of NordicTrack as of the
end of such month set forth in the Monthly Budget.
SECTION 2. WAIVERS. The Lenders hereby waive the Specified Events of
Default resulting from noncompliance with Sections 11.3 and 11.4 of the Credit
Agreement as in effect prior to giving effect to this Amendment Agreement. The
waivers granted herein are limited strictly to their terms and shall apply only
to the specific transactions and provisions described herein. The Lenders shall
not have any obligation to grant any further waiver with the respect to the
subject matter of the waivers granted herein or any other waivers.
SECTION 3. CONDITIONS. The effectiveness of this Amendment Agreement and
all of the provisions hereof is subject to satisfaction of the following
conditions precedent:
(a) This Amendment Agreement shall have been duly authorized,
executed and delivered to the Administrative Agent by CML, the Borrowers,
and the Lenders.
(b) Each of the Guarantors and the Foreign Guarantors shall have
duly authorized, executed and delivered to the Administrative Agent its
consent to this Amendment Agreement, in form and substance satisfactory to
the Administrative Agent.
(c) All representations and warranties of the Obligors contained
in Section 4 of this Amendment Agreement shall be true and correct.
SECTION 4. REPRESENTATIONS AND WARRANTIES. Each of the Obligors hereby
jointly and severally agrees, represents and warrants to the Lenders and the
Administrative Agent as follows
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(a) This Amendment Agreement has been duly executed and delivered by each
of the Obligors. The execution, delivery and performance by each Obligor of this
Amendment Agreement have been duly authorized by proper corporate proceedings by
such Person, and each Amendment Document to which any Obligor is a party
constitutes the legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with the terms of the Amendment Agreement.
(b) The execution, delivery and performance of the Amendment Agreement by
each Obligor (i) are within the corporate authority of such Person, (ii) do not
conflict with or result in any breach or contravention of any provision of law,
statute, rule or regulation to which such Person is subject or any judgment,
order, writ, injunction, license or permit applicable to such Person, (iii) do
not conflict with any provision of the corporate charter or bylaws of, or any
agreement or other instrument binding upon, such Person, and (iv) do not require
any consents under, result in a breach of or constitute (along or with notice or
lapse of time or both) a default under any such agreement or other instrument
binding upon such Person.
(c) Each of the representations and warranties of any of CML, the
Borrowers and their Subsidiaries contained in the Credit Agreement, the other
Loan Documents or in any document or instrument delivered pursuant to or in
connection with the Credit Agreement (in each case, as amended or modified
hereby or in connection herewith) are true as of the date as of which they were
made and are true on the date of this Amendment Agreement, except to the extent
that such representations and warranties relate expressly to an earlier date.
(d) No Default or Event of Default is continuing, after giving effect to
the waivers of the Specified Events of Default as provided in Section 2 above
and the amendment to the Credit Agreement effected by Section 1 above.
SECTION 5. CONTINUED VALIDITY OF LOAN DOCUMENTS. Except to the extent
expressly provided herein, this Amendment Agreement shall not, by implication or
otherwise, limit, impair, constitute a waiver of or otherwise affect the rights
and remedies of the Administrative Agent, the Issuing Bank or any of the Lenders
under the Credit Agreement or any other Loan Document, or waive, modify, amend
or in any way affect any of the terms, conditions, obligations, covenants or
agreements contained in the Credit Agreement or any other Loan Document, all of
which are ratified and affirmed in all respects and shall continue in full force
and effect. Nothing herein shall be deemed to entitle any Obligor to a consent
to, or a waiver, amendment, modification or other change of, any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Documents in any circumstance.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL SUBSTANTIVE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
SECTION 7. EXPENSES. CML and the Borrowers shall pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with
the preparation,
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negotiation, execution, delivery and enforcement of this Amendment Agreement,
including the reasonable fees and disbursements of Xxxxxxx Xxxx LLP.
SECTION 8. LOAN DOCUMENTS. From and after the date hereof, this Amendment
Agreement shall be deemed a Loan Document for all purposes of the Credit
Agreement, and each reference to Loan Documents in the Credit Agreement shall be
deemed to include this Amendment Agreement.
SECTION 9. COUNTERPARTS. This Amendment Agreement may be executed in any
number of counterparts, each of which shall constitute an original but all of
which, when taken together, shall constitute but one agreement. Delivery of an
executed counterpart of a signature page by facsimile transmission shall be
effective as delivery of a manually executed counterpart of this Amendment
Agreement.
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Very truly yours,
CML GROUP, INC.
By:_________________________________
Xxxxx X. Xxxxx, Vice President -
Finance
NORDICTRACK, INC.
NORDIC ADVANTAGE, INC.
XXXXX & XXXXXX, LTD.
By:_________________________________
Xxxxx X. Xxxxx, Vice President
Agreed to and Accepted By:
BANKBOSTON, N.A.
(f/k/a The First National Bank of Boston),
individually and as Administrative Agent
and Issuing Bank
By: __________________________________
Name:
Title:
ROTHSCHILD RECOVERY FUND, L.P.
By: __________________________________
Name:
Title:
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CONSENT OF GUARANTORS AND FOREIGN GUARANTORS
Each of the undersigned hereby acknowledges and consents to Amendment No. 2
to Credit Agreement, dated as of March 30, 1998, and agrees that the Guaranty
dated as of April 17, 1996 and amended and restated as of August 28, 1997
executed by such Person in favor of the Administrative Agent and the Lenders or,
as the case may be, the Foreign Guaranty dated in April 1996 executed by such
Person in favor of the Administrative Agent and the Lenders, and all of the
other Loan Documents to which such Person is a party remain in full force and
effect, and such Person confirms and ratifies all of its obligations thereunder.
OCR, INC.
OBW, INC.
WFH GROUP, INC.
CML INTERNATIONAL (FSC), LTD.
NORDICTRACK (U.K.) LTD.
NORDIC ADVANTAGE OF
ONTARIO, INC.
NORDICTRACK GMBH
OTNC, INC.
BFPI, INC.
By:__________________________________
Xxxxx X. Xxxxx, Vice President
