Document:

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                                                                  EXHIBIT 4.1(b)

                   AGREEMENT OF SUBSTITUTION AND AMENDMENT
                               OF RIGHTS AGREEMENT

      This Agreement of Substitution and Amendment is entered into as of May 21,
2001, by and between Cannondale Corporation, a Delaware corporation (the
"Company"), and American Stock Transfer and Trust Company, a New York banking
corporation ("AST").

                                    RECITALS

A. On or about December 22, 1997, the Company entered into a Rights Agreement
   (the "Rights Agreement") with BankBoston, N.A. (the "Predecessor Agent")
   as rights agent.

B. The Company wishes to remove the Predecessor Agent and substitute AST as
   rights agent pursuant to Section 21 of the Rights Agreement.

C. The Company has given the Predecessor Agent notice of removal of the
   Predecessor Agent as rights agent.

                                    AGREEMENT

      NOW THEREFORE, in consideration of the foregoing and of other
consideration, the sufficiency of which is hereby acknowledged, the parties
agree as follows:

1. Section 21 of the Rights Agreement is hereby amended to provide that any
   successor rights agent shall, at the time of its appointment as rights agent,
   have a combined capital and surplus of at least $10 million, rather than $25
   million.

2. The Company hereby appoints AST as rights agent pursuant to Section 21 of the
   Rights Agreement, to serve in that capacity for the consideration and subject
   to all of the terms and conditions of the Rights Agreement.

3. AST hereby accepts the appointment as rights agent pursuant to Section 21 of
   the Rights Agreement and agrees to serve in that capacity for the
   consideration and subject to all of the terms and conditions of the Rights
   Agreement.

4. From and after the effective date hereof, each and every reference in the
   Rights Agreement to a "Rights Agent" shall be deemed to be a reference to
   AST.

5. Section 26 of the Rights Agreement is amended to provide that notices or
   demands shall be addressed as follows (until another address is filed):
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If to the Company:      Cannondale Corporation
                        16 Trowbridge Drive
                        Bethel, Connecticut 06801
                        Attention: Chief Financial Officer

   with a copy to:      Kelley Drye & Warren LLP
                        Two Stamford Plaza
                        281 Tresser Blvd.
                        Stamford, CT 06901
                        Attention: John T. Capetta

If to AST:              American Stock Transfer & Trust Company
                        59 Maiden Lane
                        New York, NY 10038
                        Attention: Shareholder Services Division

6. Except as expressly modified herein, the Rights Agreement shall remain in
   full force and effect.

7. This Agreement of Substitution and Amendment may be executed in one or more
   counterparts, each of which shall together constitute one and the same
   document.

      IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the dated indicated above.

                                   CANNONDALE CORPORATION

                                   By:    /s/ Joseph S. Montgomery
                                           -----------------------------------
                                   Name:      Joseph S. Montgomery
                                           -----------------------------------
                                   Title:     President
                                           -----------------------------------

                                   AMERICAN STOCK TRANSFER & TRUST
                                   COMPANY

                                    By:    /s/ Herbert J. Lemmer
                                           -----------------------------------
                                    Name:        Herbert J. Lemmer
                                           -----------------------------------
                                    Title:       Vice President
                                           -----------------------------------

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                                                                     EXHIBIT 4.8

                   CONVERTIBLE DEBENTURE PURCHASE AGREEMENT

      THIS CONVERTIBLE DEBENTURE PURCHASE AGREEMENT (this "Agreement") is made
as of April 27, 2001, by and between Cannondale Corporation, a Delaware
corporation with an office located at 16 Trowbridge Drive, Bethel, Connecticut
06801 (the "Company"), and Joseph S. Montgomery, an individual with a mailing
address at 44 Granite Ridge Road, Redding, Connecticut (the "Investor").

      NOW THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement, the parties
hereto agree as follows:

      1.    Purchase of Convertible Debenture; Closing.

            1.1 Purchase of Convertible Debenture. Subject to the terms and
conditions of this Agreement, the Company agrees to sell to the Investor, and
the Investor agrees to purchase from the Company, an 8% convertible subordinated
debenture in the principal amount of Two Million Dollars ($2,000,000.00) (the
"Convertible Debenture") in substantially the form attached hereto as Exhibit A.

            1.2 Registration Rights Agreement. The Company and the Investor
hereby acknowledge and agree that the Investor shall become a party to the
Registration Rights Agreement (the "Registration Rights Agreement"), a copy of
which is attached hereto as Exhibit B, whereby the Company will include the
shares of common stock of the Company (the "Common Stock") issuable upon
conversion of the Convertible Debenture in a registration statement to be filed
by the Company pursuant to the terms of the Registration Rights Agreement.

            1.3 Closing. The closing of the sale and issuance of the Convertible
Debenture shall be held at the offices of Kelley Drye & Warren LLP, Two Stamford
Plaza, 281 Tresser Boulevard, Stamford, Connecticut 06901 at 10:00 a.m. on April
27, 2001 or at such other time and place upon which the Company and the Investor
shall agree (hereinafter referred to as the "Closing"). The date of the Closing
is referred to herein as the "Closing Date." At the Closing, the Company will
deliver to the Investor the Convertible Debenture against payment of the
principal amount of the Convertible Debenture by a certified check or wire
transfer payable to the order of the Company.

      2. Conversion of the Convertible Debenture. The Holder (as defined herein)
of the Convertible Debenture shall be entitled, upon the written election of
such Holder to the Company and without the payment of any additional
consideration, to convert at any time commencing on the date hereof, the
principal amount of the Convertible Debenture or any portion thereof (but not
any accrued interest thereon) into shares of Common Stock at an initial
conversion price equal to the closing price for the Company's Common Stock on
the trading day immediately preceding the Closing Date (the "Conversion Price");
provided, however, that the Conversion Price shall be subject to adjustment as
set forth in the Convertible Debenture. The Convertible Debenture and the shares
of Common Stock issuable upon conversion of the Convertible Debenture are
collectively referred to herein as the "Securities."
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      3.    Representations of the Company.

      The Company represents and warrants to the Investor as follows:

            3.1 Organization and Standing. The Company is a corporation duly
organized and existing under, and by virtue of, the laws of the State of
Delaware and is in good standing under such laws.

            3.2 Corporate Power. The Company will have at the Closing all
requisite legal and corporate power and authority to execute and deliver this
Agreement, to sell and issue the Convertible Debenture and to carry out and
perform its obligations under the terms of this Agreement.

            3.3 Capitalization. As of the Closing, the authorized capital stock
of the Company consists of 40,000,000 shares of Common Stock, $0.01 par value,
of which approximately 7,528,791 shares are issued and outstanding.

            3.4 Authorization. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of this
Agreement and the Registration Rights Agreement by the Company, the
authorization, sale, issuance and delivery of the Convertible Debenture and the
performance of all of the Company's obligations hereunder and thereunder has
been taken or will be taken prior to the Closing. This Agreement, the
Registration Rights Agreement and the Convertible Debenture, when executed and
delivered by the Company, shall constitute valid and binding obligations of the
Company, enforceable in accordance with their respective terms, subject to laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies. The Common Stock, when issued in compliance with the
provisions of the Convertible Debenture, will be validly issued, fully paid and
non-assessable, and will be free of any liens or encumbrances, assuming that the
Investor takes the Common Stock with no notice thereof, other than any liens or
encumbrances created by or imposed upon the Investor; provided, however, that
the Common Stock will be subject to restrictions on transfer under state and/or
federal securities laws.

            3.5 No Finder's Fees. No person is entitled, directly or indirectly,
to compensation from the Company by reason of any contract or understanding or
contact with the Company, as a finder or broker in connection with this sale and
purchase of the Convertible Debenture contemplated by this Agreement. The
Company agrees to indemnify and hold the Investor harmless against and respect
of any claim of brokerage or other commissions or similar fees relative to this
Agreement or the transactions contemplated hereby which arises as a result of a
contract or understanding made by the Company with any such broker or finder in
connection with this sale and purchase of the Convertible Debenture contemplated
by this Agreement.

      4.    Representations of the Investor.  The Investor hereby represents
and warrants to the Company with respect to his purchase of the Convertible
Debenture as follows:

            4.1 Investment. The Investor understands that the investment in the
Securities is a speculative investment, and represents that he is aware of the
business affairs and financial condition of the Company, and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Securities, and that he is purchasing the Convertible
Debenture for investment for his own account only and not with a view to, or for

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resale in connection with, any "distribution" within the meaning of the
Securities Act of 1933, as amended (the "Securities Act") or applicable state
securities laws. The Investor further represents that he understands that the
Securities have not been registered under the Securities Act or applicable state
securities laws by reason of specific exemptions therefrom, which exemptions
depend upon, among other things, the bona fide nature of the Investor's
investment intent as expressed herein. The Investor acknowledges and understands
that the Securities must be held indefinitely unless subsequently registered
under the Securities Act and qualified under applicable state securities laws or
unless exemptions from such registration and qualification requirements are
available, and that, other than any obligation that may arise under the
Registration Rights Agreement, the Company is under no obligation to register or
qualify any of the Securities.

            4.2 Sophistication and Financial Condition. The Investor represents
and warrants to the Company that he is an "accredited investor" as defined in
Rule 501(a) of Regulation D promulgated under the Securities Act and that he
considers himself to be an experienced and sophisticated investor and to have
such knowledge and experience in financial and business matters as are necessary
to evaluate the merits and risks of an investment in the Securities.

            4.3 Access to Data. The Investor acknowledges that he has received
and reviewed this Agreement and exhibits hereto. The Investor has had an
opportunity to discuss the Company's business, management and financial affairs
with its officers and directors. The Investor understands that such discussions
as well as any written information issued by the Company were intended to
describe the aspects of the Company's business and prospects which it believes
to be material but were not necessarily a thorough or exhaustive description.

            4.4 No Finder's Fees. The Investor represents and warrants to the
Company that no person is entitled, directly or indirectly, to compensation from
such Investor by reason of any contract or understanding or contact with the
Investor, as a finder or broker in connection with the sale and purchase of the
Convertible Debenture contemplated by this Agreement. The Investor agrees to
indemnify and hold harmless against and in respect of any claim for brokerage or
other commissions or similar fees relative to this Agreement or the transactions
contemplated hereby which arises as a result of a contract or understanding made
by the Investor with any such broker or finder in connection with the sale and
purchase of the Convertible Debenture contemplated by this Agreement.

      5. Registration of Transfers. The Company shall treat the person or entity
in whose name the Convertible Debenture shall be registered as the absolute
owner of the Convertible Debenture for the purpose of receiving payment of
principal and interest and for all other purposes. The Convertible Debenture may
be exchanged only upon the surrender thereof by the registered holder at the
office or agency of the Company, for a new Convertible Debenture of like tenor
and dated as of such exchange. The Company shall maintain at the above-mentioned
office or agency a registry showing the name and address of the registered
holder of the Convertible Debenture. The Company shall be entitled to rely in
all respects upon such registry and shall not be obligated to honor any notice
to the contrary.

      6. Usury. This Agreement, the Convertible Debenture and any other
agreements which may subsequently be entered into between the Company and the
Investor, are hereby expressly limited so that in no event whatsoever, whether
by reason of acceleration of maturity of the loan evidenced hereby or thereby,
or otherwise, shall the amount paid or agreed to be paid

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to the Investor hereunder for the loan, use, forbearance or detention of money
exceed that permissible under applicable law. If at any time the performance of
any provision hereof or of the Convertible Debenture or any other such agreement
involves a payment exceeding the limit of the price that may be validly charged
for the loan, use, forbearance or detention of money under applicable law, then
automatically and retroactively, ipso facto, the obligation to be performed
shall be reduced to such limit, it being the specific intent of the Company and
the Investor that all payments under this Agreement or the Convertible Debenture
are to be credited first to interest as permitted by law, but not in excess of
(i) the agreed rate of interest set forth herein or therein or (ii) that
permitted by law, whichever is the lesser, and the balance toward the reduction
of principal. The provisions of this Section 6 shall never be superseded or
waived and shall control every other provision of this Agreement, the
Convertible Debenture and all other agreements between the Company and the
Investor.

      7.    Condition to the Investor's Obligations at Closing.  The
Investor's obligation to purchase the Convertible Debenture at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions:

            7.1 Representations and Warranties Correct. The representations and
warranties made by the Company in Section 3 hereof shall be true and correct
when made and shall be true and correct on the Closing Date.

            7.2 Reservation of Shares. The Company shall have reserved for
issuance the full number of shares of Common Stock issuable at any time upon
conversion of the Convertible Debenture.

            7.3   Registration Rights Agreement.  The Investor shall have
received the Registration Rights Agreement, dated the Closing Date, duly
executed by the parties thereto.

            7.4 Qualifications. The offer and sale of the Convertible Debenture
to the Investor pursuant to this Agreement shall be qualified or exempt from
qualification under all applicable federal and state securities laws.

      8.    Conditions to the Company's Obligations at Closing.  The
Company's obligation to sell and issue the Convertible Debenture at the
Closing is subject to the fulfillment of the following conditions:

            8.1 Representations and Warranties Correct. The representations and
warranties made by the Investor in Section 4 hereof shall be true and correct
when made and shall be true and correct on the Closing Date.

            8.2 Blue Sky. The Company shall have obtained all necessary blue sky
law permits and qualifications, or have the availability of exemptions
therefrom, required by any state for the offer and sale of the Convertible
Debenture.

      9.    Restrictions on Transferability; Compliance with Securities Act.

            9.1 General Restrictions on Transferability. The Securities shall
not be sold, assigned, transferred or pledged except upon the conditions
specified in this Section 9, which conditions are intended to ensure compliance
with the provisions of the Securities Act. The Investor will cause any proposed
purchaser, assignee, transferee, or pledgee of the Securities

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held by the Investor to agree to take and hold such Securities subject to the
provisions and upon the conditions specified in this Section 9.

            9.2   Certain Definitions.  As used in this Agreement, the
following terms shall have the following respective meanings:

                  "Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.

                  "Holder" shall mean a holder of the Convertible Debenture or
any Securities.

                  "Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in Section 9.3 hereof.

            9.3 Restrictive Legend. Each certificate or note representing the
Securities and any other securities issued in respect of the Securities upon any
stock split, stock dividend, recapitalization, merger, consolidation or similar
event, shall (unless otherwise permitted by the provisions of Section 9.4 below)
be stamped or otherwise imprinted with a legend in substantially the following
form (in addition to any legend required under applicable state securities
laws):

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
            STATE SECURITIES LAW. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED,
            PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS FIRST
            REGISTERED UNDER SUCH LAWS, OR UNLESS THE COMPANY HAS RECEIVED
            EVIDENCE REASONABLY SATISFACTORY TO IT THAT REGISTRATION UNDER SUCH
            LAWS IS NOT REQUIRED.

The Investor and the Holder consent to the Company making a notation on its
records and giving instructions to any transfer agent of the Securities in order
to implement the restrictions on transfer established in this Section 9.

            9.4 Notice of Proposed Transfers. The Holder of certificates
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 9.4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities, unless there is in
effect a registration statement under the Securities Act covering the proposed
transfer, the Holder thereof shall given written notice to the Company of such
Holder's intention to effect such transfer, sale, assignment or pledge. Each
such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall be
accomplished at such Holder's expense by either (i) an unqualified written
opinion of legal counsel who shall be, and whose legal opinion shall be,
reasonably satisfactory to the Company and its legal counsel, addressed to the
Company, to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, or (ii) a "no
action" letter from the Commission to the effect that the transfer of such
securities

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without registration will not result in a recommendation by the staff of the
Commission that action be taken with respect thereto, whereupon the Holder of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the Holder to
the Company. Each certificate evidencing the Restricted Securities transferred
as above provided shall bear, except if such transfer is made pursuant to Rule
144, the appropriate restrictive legend set forth in Section 9.3 above, except
that such certificate shall not bear such restrictive legend if, in the opinion
of counsel for such Holder and the Company, such legend is not required in order
to establish compliance with any provisions of the Securities Act.

      10.   Miscellaneous.

            10.1 Governing Law. This Agreement, the Registration Rights
Agreement and the Convertible Debenture shall in all respects be governed by and
construed and enforced in accordance with the laws of the State of Connecticut,
as such laws apply to contracts entered into and wholly to be performed within
such state, other than matters relating to corporate law, which shall be
governed by and construed and enforced in accordance with the laws the State of
Delaware.

            10.2 Successors and Assigns. Except as otherwise provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided, however, that the rights of the Investor to purchase the Convertible
Debenture shall not be assignable without the consent of the Company and
provided further that the Company may not assign its rights hereunder.

            10.3 Entire Agreement; Amendment. This Agreement, the Convertible
Debenture and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects hereof and thereof, and no party shall be liable or bound to any other
party in any manner by any warranties, representations or covenants except as
specifically set forth herein or therein. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against whom
enforcement of any such amendment, waiver, discharge or termination is sought.

            10.4 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if delivered by hand, (c) one business day after the business day of deposit
with Federal Express or similar overnight courier, freight prepaid or (d) one
business day after the business day of a facsimile or e-mail transmission, if
delivered by facsimile or e-mail transmission with copy by first class mail,
postage prepaid, and shall be addressed (i) if to the Investor, at the
Investor's address first set above or on the register maintained by the Company,
and (ii) if to the Company, at the address of its principal corporate offices
(Attn: Chief Financial Officer), or at such other address as a party may
designate by written notice to the other party pursuant to the provisions above.

Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given when delivered if delivered
personally, by messenger or by telecopy, or, if sent by mail, at the earlier of
its receipt or 72 hours after the same has been

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deposited in a regularly maintained receptacle for the deposit of the United
States mail, addressed and mailed as aforesaid.

            10.5 Expenses. The Company and shall bear all expenses incurred on
its and the Investor's behalf with respect to this Agreement and the
transactions contemplated hereby.

            10.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the party or parties
actually executing such counterparts, and all of which together shall constitute
one instrument.

            10.7 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.

      The foregoing agreement is hereby executed as of the date first above
written.

                                    CANNONDALE CORPORATION
                                    a Delaware corporation

                                    By:   /s/ William A. Luca
                                       ---------------------------------
                                       Name:  William A. Luca
                                       Title: Vice President

                                        /s/ Joseph S. Montgomery
                                       ---------------------------------
                                            Joseph S. Montgomery

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