EXHIBIT 4(a)(ii)
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THC SYSTEMS, INC. (the "Company")
ONEIDA LTD. (the "Guarantor")
AMENDED AND RESTATED NOTE AGREEMENT
Dated as of November 15, 1996
$35,000,000 Principal Amount
7.49% Senior Notes
Due November 1, 2008
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THC SYSTEMS, INC.
ONEIDA LTD.
NOTE AGREEMENT
Dated as of November 15, 1996
To the Purchasers Named
in Schedule I Hereto
Ladies and Gentlemen:
Each of THC SYSTEMS, INC. (formerly named Oneida Community China,
Inc.), a New York corporation (the "Company") and ONEIDA LTD., a New York
corporation (the "Guarantor"), agrees with you as follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1. Description of Notes. (a) This Amended and Restated Note Agreement
(the "Agreement") amends and restates that certain Note Agreement dated as of
November 15, 1996, the notes issued thereunder between the Company, the
Guarantor, and the Purchasers named therein, and shall not constitute a novation
of such Note Agreement or all or any portion of the indebtedness evidenced
thereby. The Company has authorized the issuance and sale of $35,000,000
aggregate principal amount of its Senior Notes (the "Notes"), to be dated the
date of issuance, to bear interest from such date at the rate of 7.49% per annum
prior to maturity, payable semi-annually on the first day of November and May of
each year, commencing May 1, 1997, and at maturity, to bear interest on overdue
principal (including any overdue required or optional prepayment), premium, if
any, and (to the extent legally enforceable) on any overdue installment of
interest at the greater of (a) the rate of interest publicly announced by The
Chase Manhattan Bank (or its successors or assigns) as its "prime rate" plus one
percent (1%) or (b) 9.49% per annum, to be expressed to mature on November 1,
2008 and to be substantially in the form attached as Exhibit A. The term "Notes"
as used herein shall include each Note delivered pursuant to this Agreement and
each Note delivered in substitution or exchange therefor and, where applicable,
shall include the singular number as well as the plural. Any reference to you in
this Agreement shall in all instances be deemed to include any nominee of yours
or any separate account or other person on whose behalf you are purchasing
Notes. You are sometimes referred to herein as a "Purchaser" and, together with
the other Purchaser, as the "Purchasers."
(b) The obligations of the Company hereunder and under the Notes shall
be guaranteed by the Guarantor pursuant to the Guaranty Agreement and by the
Subsidiary Guarantors pursuant to the Subsidiary Guarantees.
1.2. Commitment; Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to you, and you agree to purchase
from the Company, Notes in the aggregate principal amount set forth opposite
your name in the attached Schedule I at a price of 100% of the principal amount
thereof.
Delivery of and payment for the Notes shall be made at the offices of
Xxxxxxx, Carton & Xxxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, at 9:00 a.m., Chicago Time, on November 26, 1996, or at such
later time or on such later date, not later than 5:00 p.m. Chicago Time, on
November 30, 1996, as may be mutually agreed upon by the Company and the
Purchasers (the "Closing Date"). The Notes will be delivered to you in fully
registered form, issued in your name or in the name of your nominee. Delivery of
the Notes to you on the Closing Date shall be against payment of the purchase
price thereof in Federal Funds or other funds in U.S. dollars immediately
available at the principal office of Chase Manhattan Bank, New York, New York,
A.B.A. No. 02100002, Attention: Upstate New York-Syracuse, for deposit in the
Company's Account No. 8250073601, Attention: Xxxxxxxx Xxxxxxxx (000) 000-0000.
If on the Closing Date the Company shall fail to tender the Notes to
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you or shall fail to meet the closing conditions set forth in Sections 4.1
through 4.10 hereof, you shall be relieved of all remaining obligations under
this Agreement. Nothing in the preceding sentence shall relieve the Company of
any liability occasioned by such failure to deliver the Notes. If on the Closing
Date any Purchaser shall fail to tender the purchase price of Notes set forth in
Schedule I hereto to the Company, the Company shall be relieved of all remaining
obligations under this Agreement. Nothing in the preceding sentence shall
relieve any Purchaser of any liability occasioned by its failure to deliver such
Funds. The obligations of each Purchaser shall be several and not joint and no
Purchaser shall be liable or responsible for the acts of any other Purchaser.
2. PREPAYMENT OF NOTES
2.1. Required Prepayments. (a) In addition to payment of all
outstanding principal of the Notes at maturity and regardless of the amount of
Notes which may be outstanding from time to time, the Company shall prepay and
there shall become due and payable on November 1 in each year, $3,890,000 of the
principal amount of the Notes or such lesser amount as would constitute payment
in full on the Notes, commencing November 1, 2000 and ending November 1, 2007
inclusive, with the remaining principal payable on November 1, 2008. Each such
prepayment shall be at a price of 100% of the principal amount prepaid, together
with interest accrued thereon to the date of prepayment.
(b) (i) In the event of a Change of Control, the Guarantor shall,
immediately upon learning thereof, but in any event within five days after the
date of such Change of Control, give written notice to each holder of a Note and
to the Company of the Change of Control, accompanied by a certificate of an
authorized officer of the Guarantor describing in detail the nature of the
Change of Control and containing an offer by the Company to prepay the Notes on
the terms set forth in the following sentence (the "Change Notice"). Subject to
clause (ii) of this paragraph (b), the Company shall prepay, on a date specified
in such notice by the Company which shall be not less than 45 or more than 60
calendar days after the effective date of such Change in Control, the entire
principal amount of the Notes held by each holder at the price set forth in
Section 2.2(b).
(ii) A holder of Notes may accept or reject the offer of the Company to
prepay Notes made pursuant to clause (i) of this paragraph (b) by causing a
notice of such acceptance or rejection to be delivered to the Company not more
than 30 calendar days following receipt of the Change Notice. A failure by a
holder of Notes to respond to an offer to prepay made pursuant to clause (i) of
this paragraph (b) shall be deemed to constitute an acceptance of such offer by
such holder.
2.2. Optional Prepayments. (a) Upon notice as provided in Section 2.3,
the Company may prepay the Notes, in whole or in part, at any time, in an amount
of not less than $1,000,000 or in integral multiples of $100,000 in excess
thereof at the price set forth in Section 2.2(b).
(b) Each prepayment made pursuant to Section 2.1(b), Section 7.8 (other
than prepayments made in connection with a Camden Disposition pursuant to such
Section 7.10) or paragraph (a) of this Section 2.2 shall be at a price of (i)
100% of the principal amount to be prepaid, plus interest accrued thereon to the
date of prepayment, if the Reinvestment Yield, on the applicable Determination
Date, equals or exceeds the interest rate payable on or in respect of the Notes,
or (ii) 100% of the principal amount to be prepaid, plus interest accrued
thereon to the date of prepayment, plus a premium, if the Reinvestment Yield, on
such Determination Date, is less than the interest rate payable on or in respect
of the Notes. The premium shall equal (x) the aggregate present value of the
amount of principal being prepaid (taking into account the manner of application
of such prepayment required by Section 2.2(c)) and the present value of the
amount of interest (exclusive of interest accrued to the date of prepayment)
which would have been payable in respect of such principal absent such
prepayment, determined by discounting (semi-annually on the basis of a 360-day
year composed of twelve 30-day months) each such amount utilizing an interest
factor equal to the Reinvestment Yield, less (y) the principal amount to be
prepaid.
(c) Any prepayment pursuant to Section 2.2(a) or 7.8 of less than all
of the Notes outstanding shall be applied, to reduce, pro rata, each of the
prepayments and the final payment at maturity required by Section 2.1.
(d) Except as provided in Section 2.1, this Section 2.2 and Section
7.8, the Notes shall not be prepayable in whole or in part.
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2.3. Notice of Prepayments. The Company shall give notice of any
prepayment of the Notes pursuant to Section 2.1(b) or Section 2.2(a) or Section
7.8 to each holder of the Notes not less than 30 days nor more than 60 days
before the date fixed for prepayment, specifying (i) such date, (ii) the
principal amount of the holder's Notes to be prepaid on such date, (iii) the
date as of which the premium, if any, will be calculated and (iv) the accrued
interest applicable to the prepayment. Notice of prepayment having been so
given, the aggregate principal amount of the Notes specified in such notice,
together with the premium, if any, and accrued interest thereon shall become due
and payable on the prepayment date specified in such notice.
The Company also shall give notice to each holder of the Notes by
telecopy, telegram, telex or other same-day written communication, as soon as
practicable but in any event not later than two business days prior to the
prepayment date, of the premium, if any, applicable to such prepayment and the
details of the calculations used to determine the amount of such premium.
2.4. Surrender of Notes on Prepayment or Exchange. Subject to Section
2.5, upon any partial prepayment of a Note pursuant to this Section 2 or partial
exchange of a Note pursuant to Section 10.3, such Note may, at the option of the
holder thereof, (i) be surrendered to the Company pursuant to Section 10.3 in
exchange for a new Note equal to the principal amount remaining unpaid on the
surrendered Note, or (ii) be made available to the Company for notation thereon
of the portion of the principal so prepaid or exchanged. In case the entire
principal amount of any Note is prepaid or exchanged, such Note shall, at the
written request of the Company, be surrendered to the Company for cancellation
and shall not be reissued, and no Note shall be issued in lieu of such Note.
2.5. Direct Payment. Notwithstanding any other provision contained in
the Notes or this Agreement, the Company will pay all sums becoming due on each
Note held by you or any subsequent Institutional Holder by wire transfer of
immediately available federal funds to such account as you or such subsequent
Institutional Holder has designated in Schedule I, or as you or such subsequent
Institutional Holder may otherwise designate by written notice to the Company,
in each case without presentment and without notations being made thereon,
except that any such Note so paid or prepaid in full shall, at the written
request of the Company, be surrendered to the Company for cancellation. Any wire
transfer shall identify such payment in the manner set forth in Schedule I and
shall identify the payment as principal, premium, if any, and/or interest. You
and any subsequent Institutional Holder of a Note to which this Section 2.5
applies agree that, before selling or otherwise transferring any such Note, you
or it will make a notation thereon of the aggregate amount of all payments of
principal theretofore made and of the date to which interest has been paid.
2.6. Allocation of Payments. If less than the entire principal amount
of all the Notes outstanding is to be paid, the Company will prorate the
aggregate principal amount to be paid among the outstanding Notes in proportion
to the unpaid principal.
2.7. Payments Due on Saturdays, Sundays and Holidays. In any case where
the date of any required prepayment of the Notes or any interest payment date on
the Notes or the date fixed for any other payment of any Note or exchange of any
Note is not a Business Day, then such payment, prepayment or exchange need not
be made on such date but may be made on the next preceding Business Day, with
the same force and effect as if made on the due date.
3. REPRESENTATIONS
3.1. Representations of the Guarantor and the Company. As an inducement
to, and as part of the consideration for, your purchase of the Notes pursuant to
this Agreement, each of the Guarantor and the Company represents and warrants to
you as follows:
(a) Corporate Organization and Authority. Each of the Guarantor and the
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of New York, has all requisite corporate power and
authority to own and operate its Properties, to carry on its business as now
conducted and as presently proposed to be conducted, to enter into and perform
the Agreement and the Subordination Agreement and,
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in the case of the Company, to issue and sell the Notes as contemplated in the
Agreement and in the case of the Guarantor, to issue the Guaranty Agreement.
(b) Qualification to Do Business. Each of the Guarantor and the Company
is duly licensed or qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction where the nature of the business
transacted by it or the character of its Properties owned or leased makes such
qualification or licensing necessary.
(c) Subsidiaries. The Guarantor has no Subsidiaries, as defined in
Section 5.1, except those listed in Annex I, which correctly sets forth whether
such Subsidiary is a Restricted Subsidiary and the jurisdiction of incorporation
and the percentage of the outstanding Voting Stock or equivalent interest of
each Subsidiary which is owned, of record or beneficially, by the Guarantor
and/or one or more Subsidiaries. Each Subsidiary has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization and is duly licensed or qualified and in good
standing as a foreign corporation in each other jurisdiction where the nature of
the business transacted by it or the character of its Properties owned or leased
makes such qualification or licensing necessary. A list of those jurisdictions
wherein each Subsidiary is qualified to do business is set forth in Annex I.
Each Subsidiary has full corporate power and authority to own and operate its
Properties and to carry on its business as now conducted and as presently
proposed to be conducted. Each Subsidiary Guarantor has all requisite corporate
power and authority to issue its Subsidiary Guarantee and to execute the
Subordination Agreement. The Guarantor or each Subsidiary has good and
marketable title to all of the shares it purports to own of the capital stock of
each Subsidiary, as the case may be, free and clear in each case of any Lien or
encumbrance, and all such shares have been duly issued and are fully paid and
nonassessable.
(d) Financial Statements. The consolidated balance sheets of the
Guarantor and its Restricted Subsidiaries as of January 29, 2000 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended January 29, 2000, accompanied by the report and unqualified opinion
of PriceWaterhouseCoopers, independent certified public accountants, copies of
which have heretofore been delivered to you, were prepared in accordance with
GAAP (except as otherwise noted therein) and present fairly the consolidated
financial condition and consolidated results of operations and cash flows of the
Guarantor and its Restricted Subsidiaries for and as of the end of each of such
year.
(e) No Contingent Liabilities or Adverse Changes. Neither the Guarantor
nor any of its Subsidiaries has any contingent liabilities which are material to
the Guarantor and its Subsidiaries taken as a whole other than as indicated on
the financial statements described in the foregoing paragraph (d) of this
Section 3.1, and since January 29, 2000, there have been no material adverse
changes in the condition, financial or otherwise, of the Guarantor and its
Subsidiaries except those occurring in the ordinary course of business.
(f) No Pending Litigation or Proceedings. Except as set forth on
Schedule 3.1(f) attached hereto, there are no actions, suits or proceedings
pending or threatened against or affecting the Guarantor or any of its
Subsidiaries, at law or in equity or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which might result, either individually or
in the aggregate, in any material adverse change in the business, Properties,
operations or condition, financial or otherwise, of the Guarantor and its
Subsidiaries taken as a whole or on the Company's ability to perform its
obligations under this Agreement or the Notes or the Subordination Agreement or
on the Guarantor's ability to perform its obligations under this Agreement or
the Guaranty Agreement or the Subordination Agreement or on any Subsidiary
Guarantor's ability to perform its obligations under its Subsidiary Guarantee or
the Subordination Agreement.
(g) Compliance with Law. (i) Neither the Guarantor nor any of its
Subsidiaries is: (x) in default with respect to any order, writ, injunction or
decree of any court to which it is a named party; or (y) in default under any
law, rule, regulation, ordinance or order relating to its or their respective
businesses, the sanctions and penalties resulting from which defaults described
in clauses (x) and (y) might have a material adverse effect on the business,
Properties, operations, assets or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole, or on the Company's ability to
perform its obligations under this Agreement or the Notes or the
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Subordination Agreement or on the Guarantor's ability to perform its obligations
under this Agreement or the Guaranty Agreement or the Subordination Agreement or
on any Subsidiary Guarantor's ability to perform its obligations under its
Subsidiary Guarantee or the Subordination Agreement.
(ii) Neither the Guarantor nor any Subsidiary nor any
Affiliate is an entity defined as a "designated national" within the meaning of
the Foreign Assets Control Regulations, 31 C.F.R. Chapter V, or for any other
reason, subject to any restriction or prohibition under, or is in violation of,
any Federal statute or Presidential Executive Order, or any rules or regulations
of any department, agency or administrative body promulgated under any such
statute or Order, concerning trade or other relations with any foreign country
or any citizen or national thereof or the ownership or operation of any
Property.
(h) Pension Reform Act of 1974. Based upon the representations of the
Purchasers set forth in Section 3.2, neither the purchase of the Notes by you
nor the consummation of any of the other transactions contemplated by this
Agreement is or will constitute a "prohibited transaction" within the meaning of
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Internal Revenue Service has issued a favorable determination
letter with respect to each "employee pension benefit plan," as defined in
Section 3 of ERISA, established, maintained or contributed to by the Guarantor
or any Subsidiary (except for any Plan which is unfunded and maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees) (a "Plan") that the same is
qualified under Section 401(a) and related provisions of the Code and that each
related trust or custodial account is exempt from taxation under Section 501(a)
of the Code. All Plans of the Guarantor or any Subsidiary comply in all material
respects with ERISA and other applicable laws. There exist with respect to the
Guarantor or any Subsidiary no "multi-employer plans," as defined in the
Multi-employer Pension Plan Amendments Act of 1980, for which a material
withdrawal or termination liability may be incurred. There exist with respect to
all Plans or trusts established or maintained by the Guarantor or any
Subsidiary: (i) no material accumulated funding deficiency within the meaning of
ERISA; (ii) no termination of any Plan or trust which would result in any
material liability to the Pension Benefit Guaranty Corporation ("PBGC") or any
"reportable event," as that term is defined in ERISA, which is likely to
constitute grounds for termination of any Plan or trust by the PBGC; and (iii)
no "prohibited transaction," as that term is defined in ERISA, which is likely
to subject any Plan, trust or party dealing with any such Plan or trust to any
material tax or penalty on prohibited transactions imposed by Section 4975 of
the Code.
(i) Title to Properties. The Guarantor and each Subsidiary has (i) good
title in fee simple or its equivalent under applicable law to all the real
Property owned by it and (ii) good title to all other Property owned by it, in
each case free from all Liens except (x) those securing Indebtedness of the
Guarantor or a Subsidiary, which are listed in the attached Annex II and (y)
other Liens that would be permitted pursuant to Section 7.5.
(j) Leases. The Guarantor and each Subsidiary enjoy peaceful and
undisturbed possession under all leases under which the Guarantor or such
Subsidiary is a lessee or is operating. None of such leases contains any
provision which might materially and adversely affect the operation or use of
the Property so leased. All of such leases are valid and subsisting and neither
the Guarantor nor any Subsidiary is in default with respect to any such leases
which are material to the business, Properties, operations or condition,
financial or otherwise, of the Guarantor and its Subsidiaries taken as a whole.
(k) Franchises, Patents, Trademarks and Other Rights. The Guarantor and
each Subsidiary have all franchises, permits, licenses and other authority
necessary to carry on their businesses as now being conducted and as proposed to
be conducted, and none is in default under any of such franchises, permits,
licenses or other authority which are material to their respective businesses,
Properties, operations or condition, financial or otherwise. The Guarantor and
each Subsidiary own or possess all patents, trademarks, service marks, trade
names, copyrights, licenses and rights with respect to the foregoing necessary
for the present conduct of their businesses, without any known conflict with the
rights of others which might result in any material adverse change in their
respective businesses, Properties, operations or condition, financial or
otherwise.
(l) Status of Notes and Sale of Notes. The Agreement, the Notes and the
Subordination Agreement have been duly authorized on the part of the Company,
have been duly executed and delivered by an authorized
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officer of the Company and constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in equity or at law. The sale of the
Notes and compliance by the Company with all of the provisions of this
Agreement, of the Notes and of the Subordination Agreement (i) are within the
corporate powers of the Company, (ii) have been duly authorized by proper
corporate action, (iii) are legal, (iv) will not violate any provisions of any
law or regulation or order of any court, governmental authority or agency and
(v) will not result in any breach of any of the provisions of, or constitute a
default under, or result in the creation of any Lien on any Property of the
Guarantor or any Subsidiary under the provisions of, any charter document,
by-law, loan agreement or other agreement or instrument to which the Guarantor
or any Subsidiary is a party or by which any of them or their Property may be
bound.
(m) Guarantor Authorization. The Agreement, the Guaranty Agreement and
the Subordination Agreement have been duly authorized on the part of the
Guarantor, have been duly executed and delivered by an authorized officer of the
Guarantor and constitute the legal, valid and binding obligations of the
Guarantor, enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in equity or at law. The compliance
by the Guarantor with all of the provisions of this Agreement, of the Guaranty
Agreement and of the Subordination Agreement (i) are within the corporate powers
of the Guarantor, (ii) have been duly authorized by proper corporate action,
(iii) are legal, (iv) will not violate any provisions of any law or regulation
or order of any court, governmental authority or agency and (v) will not result
in any breach of any of the provisions of, or constitute a default under, or
result in the creation of any Lien on any Property of the Guarantor or any
Subsidiary under the provisions of, any charter document, by-law, loan agreement
or other agreement or instrument to which the Guarantor or any Subsidiary is a
party or by which any of them or their Property may be bound.
(n) Subsidiary Guarantor Authorization. Each Subsidiary Guarantee and
the Subordination Agreement have been duly authorized on the part of each
Subsidiary Guarantor has been duly executed and delivered by an authorized
officer of such Subsidiary Guarantor and constitute the legal, valid and binding
obligations of such Subsidiary Guarantor, enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in equity or at law. The compliance by each Subsidiary Guarantor with all
of the provisions of its Subsidiary Guarantee (i) is within the corporate powers
of each Subsidiary Guarantor, (ii) has authorized by proper corporate action,
(iii) is legal, (iv) will not violate any provisions of any law or regulation or
order of any court, governmental authority or agency and (v) will not result in
any breach of any of the provisions of, or constitute a default under, or result
in the creation of any Lien on any Property of the Guarantor or any Subsidiary
under the provisions of, any charter document, by-law, loan agreement or other
agreement or instrument to which each the Guarantor or any Subsidiary is a party
or by which any of them or their Property may be bound.
(o) No Defaults. No event has occurred and no condition exists which,
upon the issuance of the Notes, or the execution and delivery of this Agreement,
the Guaranty Agreement, the Subordination Agreement or the Subsidiary
Guarantees, would constitute an Event of Default, or with the lapse of time or
the giving of notice or both would become an Event of Default, under this
Agreement. Neither the Guarantor nor any Subsidiary is in default under any
charter document, by-law, loan agreement or other material agreement or material
instrument to which it is a party or by which it or its Property may be bound,
nor has the Guarantor nor any Subsidiary obtained any waivers with respect to
any defaults under any loan agreements or other material agreements or
instruments.
(p) Governmental Consent. Neither the nature of the Guarantor or any of
its Subsidiaries, their respective businesses or Properties, nor any
relationship between the Guarantor or any of its Subsidiaries and any other
Person, nor any circumstances in connection with the offer, issue, sale or
delivery of the Notes is such as to require a consent, approval or authorization
of, or withholding of objection on the part of, or filing, registration or
qualification with, any governmental authority on the part of the Company or the
Guarantor or any Subsidiary
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Guarantor in connection with the execution and delivery of this Agreement or any
Subsidiary Guarantor or the Guaranty Agreement or the offer, issue, sale or
delivery of the Notes.
(q) Taxes. All tax returns required to be filed by the Guarantor or any
Subsidiary in any jurisdiction have been filed or appropriate extensions have
been filed with respect thereto, and all taxes, assessments, fees and other
governmental charges upon the Guarantor or any Subsidiary, or upon any of their
respective Properties, income or franchises, which are due and payable, have
been paid timely or within appropriate extension periods or are being contested
in good faith by appropriate proceedings. The Guarantor does not know of any
proposed additional tax assessment against it or any Subsidiary for which
adequate provision has not been made on its books. The federal income tax
liability of the Guarantor and its Subsidiaries has been finally determined by
the Internal Revenue Service and satisfied for all taxable years up to and
including the taxable year ended January 31, 1987 and no material controversy in
respect of additional taxes due since such date is pending or to the Guarantor's
knowledge threatened. The provisions for taxes on the books of the Guarantor and
each Subsidiary are adequate for all open years and for the current fiscal
period.
(r) Status under Certain Statutes. Neither the Guarantor nor any
Subsidiary is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an "affiliate"
of such a "subsidiary company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined
in the Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
(s) Private Offering. Neither the Guarantor nor the Company nor Chase
Securities Inc. (the only Person authorized or employed by the Guarantor or the
Company as agent, broker, dealer or otherwise in connection with the offering of
the Notes or any similar security of the Company or the Guarantor) has offered
any of the Notes or any similar security of the Company or the Guarantor for
sale to, or solicited offers to buy any thereof from, or otherwise approached or
negotiated with respect thereto with, any prospective purchaser, other than not
more than 3 institutional investors, including the Purchasers, each of whom was
offered all or a portion of the Notes at private sale for investment. Neither
the Company nor the Guarantor nor anyone acting on its authorization will offer
the Notes or any part thereof or any similar securities for issue or sale to, or
solicit any offer to acquire any of the same from, anyone so as to bring the
issuance and sale of the Notes within the provisions of Section 5 of the
Securities Act.
(t) Effect of Other Instruments. Neither the Guarantor nor any
Subsidiary is bound by any agreement or instrument or subject to any charter or
other corporate restriction which materially and adversely affects the business,
Properties, operations, or condition, financial or otherwise, of the Guarantor
and its Subsidiaries taken as a whole or the Company's ability to perform its
obligations under this Agreement or the Notes or the Subordination Agreement or
the Guarantor's ability to perform its obligations under this Agreement or the
Guaranty Agreement or the Subordination Agreement or any Subsidiary Guarantor's
ability to perform its obligations under its Subsidiary Guarantee or the
Subordination Agreement.
(u) Use of Proceeds. The Company will apply the proceeds from the sale
of the Notes to reimburse the Guarantor with respect to bank Indebtedness
incurred by the Guarantor and loaned to the Company to purchase substantially
all of the assets of a company formerly known as THC Systems, Inc. The Guarantor
will apply the proceeds paid by the Company to it pursuant to the preceding
sentence to repay the bank Indebtedness incurred in connection with the THC
Acquisition. None of the transactions contemplated in this Agreement (including,
without limitation thereof, the use of the proceeds from the sale of the Notes)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulations issued pursuant thereto, including, without limitation, Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System (12
C.F.R., Chapter II). Neither the Guarantor nor any Subsidiary owns or intends to
carry or purchase any "margin stock" within the meaning of Regulation G, and
none of the proceeds from the sale of the Notes will be used to purchase or
carry or refinance any borrowing the proceeds of which were used to purchase or
carry any "margin stock" or "margin security" in violation of Regulations G, T,
U or X.
8
(v) Condition of Property. All of the facilities of the Guarantor and
each of its Subsidiaries are in sound operating condition and repair except for
facilities being repaired in the ordinary course of business or facilities which
individually or in the aggregate are not material to the business, Properties,
operations, or condition, financial or otherwise, of the Guarantor and its
Subsidiaries taken as a whole.
(w) Books and Records. The Guarantor and each of its Subsidiaries (i)
maintain books, records and accounts in reasonable detail which accurately and
fairly reflect their respective transactions and business affairs, and (ii)
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in accordance with
management's general or specific authorization and to permit preparation of
financial statements in accordance with GAAP.
(x) Full Disclosure. Neither the Confidential Information Memorandum
dated as of May 18, 2000 which has heretofore been delivered to you, the
financial statements referred to in paragraph (d) of this Section 3.1, the pro
forma financial information provided to you dated October 15, 1996 with respect
to the possible sale of Camden Wire Co., Inc., nor this Agreement, nor any other
statement or document furnished by the Company or the Guarantor to you in
connection with the negotiation of the sale of the Notes and in connection with
the execution of this Agreement, nor any document executed or delivered in
connection therewith, taken together, contain any untrue statement of a material
fact or omit a material fact necessary to make the statements contained therein
or herein not misleading in light of the circumstances under which they were
made. There is no fact known, or which, with reasonable diligence would be
known, by the Guarantor or the Company which the Company or the Guarantor has
not disclosed to you in writing which has a material adverse effect on or, so
far as the Company or the Guarantor can now foresee, will have a material
adverse effect on the business, Property, operations or condition, financial or
otherwise, of the Guarantor and its Subsidiaries taken as a whole or the ability
of the Company to perform its obligations under and in respect of this Agreement
and the Notes or the ability of the Guarantor to perform its obligations under
and in respect of this Agreement and the Guaranty Agreement or each Subsidiary
Guarantor's ability to perform the obligations under its Subsidiary Guarantee.
(y) Environmental Compliance. The Guarantor and each Subsidiary (i) is
in compliance in all material respects with all applicable environmental,
transportation, health and safety statutes and regulations, including, without
limitation, regulations promulgated under the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. 'SS''SS'6901 et seq., and (ii) has not acquired, incurred
or assumed, directly or indirectly, any material contingent liability in
connection with the release or storage of any toxic or hazardous waste or
substance into the environment. The Guarantor and its Subsidiaries have not
acquired, incurred or assumed, directly or indirectly, any material contingent
liability in connection with a release or other discharge of any hazardous,
toxic or waste material, including petroleum, on, in, under or into the
environment surrounding any Property owned, used or leased by any of them.
3.2. Representations of the Purchasers. (a) As an inducement to, and as
part of the Company's consideration for the sale of the Notes pursuant to this
Agreement, each of you represents, respectively, and in entering into this
Agreement the Company understands, that (i) you are an Institutional Holder,
(ii) you are acquiring Notes for the purpose of investment and for your own
account and not with a view to the distribution thereof; provided that the
disposition of your Property shall at all times be and remain within your
control, subject, however, to compliance with Federal securities laws. You
acknowledge that the Notes have not been registered under the Securities Act or
the laws of any state and you understand that the Notes must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. You have been advised that the
Company does not contemplate registering, and is not legally required to
register, the Notes under the Securities Act.
(b) Each of you represents that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by you to pay the purchase price of, or to be attributed to the
holding of, the Notes to be purchased by you hereunder:
(i) if you are an insurance company, the Source constitutes
assets allocated to any separate account maintained by you (A) in which
no employee benefit plan (or its related trust) has any interest or (B)
which is maintained solely in connection with your fixed contractual
obligations under which the
9
amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in
any manner by the investment performance of the separate account; or
(ii) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 00-0 (xxxxxx Xxxxxxx 00, 0000), xx (xx) a bank
collective investment fund, within the meaning of the PTE 91-38 (issued
July 12, 1991) and, except as you have disclosed to the Company in
writing pursuant to this paragraph (b), no employee benefit plan or
group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund, and the other
applicable conditions of PTEs 90-1 or 91-38 have been satisfied; or
(iii) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM" (within the meaning of
Part V of the QPAM Exemption), no employee benefit plan's assets that
are included in such investment fund, when combined with the assets of
all other employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section V(c)(1) of
the QPAM Exemption) of such employer or by the same employee
organization and managed by such QPAM, exceed 20% of the total client
assets managed by such QPAM; all conditions of the QPAM Exemption are
satisfied; neither the QPAM nor a person controlling or controlled by
the QPAM (applying the definition of "control" in Section V(e) of the
QPAM Exemption) owns a 5% or more interest in the Company and (A) the
identity of such QPAM and (B) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed
to the Company in writing pursuant to this paragraph (iii); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (v); or
(vi) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA; or
(vii) if you are an insurance company and the Source includes
assets of your general account, the acquisition of the Notes by you is
exempt under PTE 95-60 (issued July 12, 1995).
[In the event the Company reasonably determines that it is a party in interest
with respect to any employee benefit plan identified by you pursuant to
paragraph (ii) or paragraph (v) of this Section 3.2(b), no assets of such
employee benefit plan may be used by you to pay any portion of the purchase
price of the Notes to be purchased by you hereunder.]
As used in this Section 3.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date shall be
subject to the performance by each of the Guarantor and the Company of its
agreements hereunder which are to be performed at or prior to the time of
delivery of the Notes, and to the following conditions to be satisfied on or
before the Closing Date:
4.1. Representations and Warranties. The representations and warranties
of the Guarantor and the Company contained in this Agreement or otherwise made
in writing in connection herewith shall be true and correct on or as of the
Closing Date and each of the Company and the Guarantor shall have delivered to
you a certificate to such effect, dated the Closing Date and executed by the
President or the chief financial officer of the Company and the Guarantor,
respectively.
10
4.2. Legal Opinions. You shall have received from Xxxxxxx, Carton &
Xxxxxxx, who is acting as your special counsel in this transaction, and from
Xxxxxxxxx X. Xxxxxxxxx, General Counsel to the Company, the Guarantor and the
Subsidiary Guarantors and from Shearman & Sterling, special counsel for the
Company, the Guarantor and the Subsidiary Guarantors, their respective opinions,
dated as of such Closing Date, in form and substance satisfactory to you and
covering substantially the matters set forth or provided in the attached Exhibit
B.
4.3. Events of Default. No event shall have occurred and be continuing
on the Closing Date which would constitute an Event of Default, as defined in
Section 8.1, or with notice or lapse of time or both would become such an Event
of Default, and the each of the Company and the Guarantor shall have delivered
to you a certificate to such effect, dated the Closing Date and executed by the
President or the chief financial officer or the Senior Vice President, Finance
of the Company and the Guarantor, respectively.
4.4. Payment of Fees and Expenses. The Company shall have paid all
reasonable fees, expenses, costs and charges, including the fees and expenses of
your special counsel, incurred by you through the date hereof and incident to
the proceedings in connection with, and transactions contemplated by, this
Agreement and the Notes (including any amendments, renewals, supplements or
replacements thereto).
4.5. Legality of Investment. Your acquisition of the Notes shall
constitute a legal investment as of the Closing Date under the laws and
regulations of each jurisdiction to which you may be subject (without resort to
any "basket" or "leeway" provision which permits the making of an investment
without restriction as to the character of the particular investment being
made), and such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation.
4.6. Private Placement Number. A private placement number shall have
been obtained from Standard & Poor's CUSIP Service Bureau (in cooperation with
the Securities Valuation Office of the National Association of Insurance
Commissioners).
4.7. Sale of All Notes. Contemporaneously with the sale of the Notes to
you, the Company will complete and close the sale of Notes being purchased by
each of the Purchasers set forth in Schedule I hereto.
4.8. THC Acquisition. Prior to or contemporaneously with the sale of
the Notes, the Guarantor shall consummate the THC Acquisition and shall provide
to you evidence satisfactory to you and your special counsel of the consummation
of such acquisition.
4.9. Additional Agreements. The Company and the Guarantor will deliver
to you executed copies of (a) the Subsidiary Guarantees, (b) the Subordination
Agreement, (c) the Sharing Agreement and (d) the First Amendment to 1992 Note
Agreement dated as of October 15, 1996, each in form and substance satisfactory
to you and your counsel.
4.10. Proceedings and Documents. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation of such transactions shall be satisfactory in form
and substance to you and your special counsel, and you and your special counsel
shall have received copies (executed or certified as may be appropriate) of all
legal documents or proceedings which you and they may reasonably request.
5. INTERPRETATION OF AGREEMENT
5.1. Certain Terms Defined. The terms hereinafter set forth when used
in this Agreement shall have the following meanings:
Affiliate - Any Person (other than a Subsidiary Guarantor) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Guarantor, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Guarantor or any Subsidiary or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% of the equity interest) of which
is beneficially owned or held by the Guarantor or a Subsidiary. The term
"control" means the
11
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Agreement - As defined in Section 1.1.
Bank Agreement - That Credit Agreement dated as of June 2, 2000, among
the Guarantor, The Chase Manhattan Bank, as Administrative Agent, Banc of
America Securities, LLC, as Syndication Agent, Fleet National Bank, as
Documentation Agent, HSBC Bank, USA, as Senior Managing Agent, Chase Securities
Inc., as Arranger, and the banks signatory to such agreement, as such agreement
may be from time to time amended. The term "Bank Agreement" shall also include
replacement or additional credit agreements entered into by the Guarantor or any
Restricted Subsidiary Guarantor with banks or other institutional lenders.
Banks - The bank lenders to the Guarantor pursuant to the Bank
Agreement.
Business Day - Any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York; Los Angeles, California; or
Chicago, Illinois are required or authorized to be closed.
Capitalized Lease Obligations - The obligations of any Person to pay
rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
Change of Control - The occurrence of any one or more of the following:
(a) any Person (other than an Executive Officer) or a group of Persons
(other than a group of Persons consisting solely of Executive Officers) shall
purchase or otherwise acquire, directly or indirectly, in one or more
transactions, beneficial ownership of securities representing 20% or more of the
combined voting power of the Guarantor's Voting Stock, determined on the date
prior to the date of such purchase or acquisition (or, if there is more than one
transaction, the date of the last such purchase or acquisition);
(b) the Guarantor shall convey, transfer, lease or otherwise dispose of
all or substantially all Consolidated Total Assets to any Person (other than a
Majority-Owned Restricted Subsidiary);
(c) there shall occur, in any consecutive twenty-four month period, a
replacement of or change in a majority of the members of the Board of Directors
of the Guarantor, and such replacement shall not have been initiated by the
Board of Directors which is incumbent at the time of commencement of such
twenty-four month period;
(d) the Guarantor shall merge or consolidate into any other corporation
other than into a Majority-Owned Restricted Subsidiary (and the Company shall
not be the surviving corporation) in a transaction in which more than 20% of the
voting power of the Guarantor's Voting Stock (determined on the date prior to
the date of the consummation of such transaction) is exchanged;
(e) the Guarantor or any Restricted Subsidiary shall purchase or
otherwise acquire, directly or indirectly, in one or more transactions,
beneficial ownership of Voting Stock of the Guarantor, if, after giving effect
to such purchase or acquisition, the Guarantor (together with all Restricted
Subsidiaries) shall have acquired, during any period of twelve consecutive
months, beneficial ownership of an aggregate of 30% or more of the Voting Stock
of the Guarantor outstanding on the date immediately prior to the last such
purchase or acquisition during such period (or, if there is more than one
transaction, the date of the last such purchase or acquisition); or
(f) the Guarantor shall make a distribution of cash, securities or
other Properties (other than regular periodic cash dividends at a rate which is
substantially consistent with past practice, including with respect to increases
in dividends, and other than Common Stock or rights to acquire Common Stock) to
holders of capital stock (including by means of dividend, reclassification,
recapitalization or otherwise) which, together with all other
12
such distributions during the 365-day period preceding the date of such
distribution, has an aggregate fair market value in excess of an amount equal to
30% of the fair market value of the Voting Stock of the Guarantor outstanding on
the date immediately prior to such distribution.
Closing Date - As defined in Section 1.2.
Code - As defined in Section 3.1(h).
Consolidated EBITDA - For any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, (c) depreciation and amortization expense,
and (d) amortization of intangibles (including, but not limited to, goodwill)
and organization costs, all as determined on a consolidated basis; provided that
(y) in determining Consolidated EBITDA of the Guarantor and its Restricted
Subsidiaries for any period that includes the Fiscal Quarter ending October 30,
1999, there shall also be added to Consolidated Net Income the sum of
$8,500,000, representing pre-tax extraordinary and non-recurring charges
incurred in such quarter, and (z) for purposes of calculating Consolidated
EBITDA of the Guarantor and its Restricted Subsidiaries for any period, the
Consolidated EBITDA of any Person acquired by the Company or its Restricted
Subsidiaries during such period shall be included on a pro forma basis for such
period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the first day
of such period) if the consolidated balance sheet of such acquired Person and
its consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of which
Consolidated EBITDA is to be calculated have been either (A) reported on without
a qualification arising out of the scope of the audit by independent certified
public accountants of nationally recognized standing or (B) found acceptable by
the holders of the Notes.
Consolidated Interest Coverage Ratio - As at the last day of any period
of four consecutive Fiscal Quarters, the ratio of (a) Consolidated EBITDA for
such period to (b) Consolidated Interest Expense for such period.
Consolidated Interest Expense - For any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Guarantor and
its Restricted Subsidiaries for such period with respect to all outstanding
Indebtedness of the Guarantor and its Restricted Subsidiaries, as determined in
accordance with GAAP.
Consolidated Leverage Ratio - As at the last day of any period of four
consecutive Fiscal Quarters, the ratio of (a) Consolidated Total Debt on such
date to (b) Consolidated EBITDA for such period.
Consolidated Net Income - For any period, the gross revenues of the
Guarantor and its Restricted Subsidiaries for such period less all expenses and
other proper charges (including taxes on income), determined on a consolidated
basis in accordance with GAAP after eliminating earnings or losses attributable
to outstanding minority interests, but excluding in any event:
(a) (i) any gains or losses on the sale or other disposition
of Investments and (ii) any gains or losses on the sale or other
disposition of plant, Property and equipment which gains or losses
exceed, in the aggregate, $100,000 during any Fiscal Year and any taxes
on such excluded gains and any tax deductions or credits on account of
any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary
accrued prior to the date it became a Restricted Subsidiary, except to
the extent permitted to be included in Consolidated EBITDA pursuant to
clause (z) of the definition of Consolidated EBITDA set forth above;
(d) net earnings and losses of any Person (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Guarantor or any Restricted Subsidiary,
realized by such Person prior to the date of such acquisition, except to
the extent permitted to be included in Consolidated EBITDA pursuant to
clause (z) of the definition of Consolidated EBITDA set forth above;
13
(e) net earnings and losses of any Person (other than a
Restricted Subsidiary) with which the Guarantor or a Restricted
Subsidiary shall have consolidated or which shall have merged into or
with the Guarantor or a Restricted Subsidiary prior to the date of such
consolidation or merger, except to the extent permitted to be included
in Consolidated EBITDA pursuant to clause (z) of the definition of
Consolidated EBITDA set forth above;
(f) net earnings of any Person (other than a Restricted
Subsidiary) in which the Guarantor or any Restricted Subsidiary has an
ownership interest unless such net earnings shall have actually been
received by the Guarantor or such Restricted Subsidiary in the form of
cash distributions or readily marketable securities;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends
to the Guarantor or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof over
the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any securities
of the Guarantor or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have been made
from income arising during such fiscal period or during the period
consisting of the four consecutive Fiscal Quarters immediately following
the end of such fiscal period; and
(l) any other extraordinary or non-recurring income or gain.
Consolidated Net Worth - At any date, all amounts which would, in
accordance with GAAP, be included on a consolidated balance sheet of the
Guarantor and its Restricted Subsidiaries under stockholders' equity at such
date.
Consolidated Tangible Assets - Consolidated Total Assets less the sum
of (i) deferred assets, determined in accordance with GAAP on a consolidated
basis, other than prepaid insurance, prepaid taxes, deferred taxes and deferred
pension expense, (ii) all goodwill, trade names, trademarks, patents,
organization expense, unamortized debt discount and expense and other similar
intangibles properly classified as intangibles in accordance with GAAP and (iii)
Restricted Investments.
Consolidated Total Assets - The consolidated total assets of the
Guarantor and its Restricted Subsidiaries determined in accordance with GAAP.
Consolidated Total Debt - As of the date of determination, the
aggregate principal amount of all Indebtedness of the Guarantor and its
Restricted Subsidiaries at such date, determined on a consolidated basis in
accordance with GAAP.
Determination Date - The day 2 Business Days before the date fixed for
a prepayment pursuant to a notice required by Sections 2.2(b) or 2.3 or the day
2 Business Days before the date of declaration pursuant to Section 8.2.
ERISA - As defined in Section 3.1(h).
Event of Default - As defined in Section 8.1.
14
Exchange Act - The Securities Exchange Act of 1934, as amended, and as
it may be further amended from time to time.
Executive Officers - The Persons listed as "executive officers" in the
most recent Form 10-K of the Guarantor filed pursuant to the Exchange Act.
Fiscal Quarter or Fiscal Year - The fiscal quarter or fiscal year of
Borrower.
GAAP - Generally accepted accounting principles in the United States of
America, consistently applied.
Guaranties - All obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) of a
Person guaranteeing or, in effect, guaranteeing any Indebtedness, dividend or
other obligation, of any other Person in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any Property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (iii) to lease Property
or to purchase securities or other Property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation, or (iv)
otherwise to assure the owner of the Indebtedness or obligation against loss in
respect thereof. For the purposes of all computations made under this Agreement,
a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to
be Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
Guaranty Agreement - The Guaranty Agreement dated as of November 26,
1996 between the Guarantor and the Purchasers substantially in the form attached
hereto as Exhibit C.
Indebtedness - (i) All items of borrowed money, including Capital Lease
Obligations, which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet as of the
date at which Indebtedness is to be determined, (ii) all Guaranties (other than
Guaranties of Indebtedness of the Guarantor by a Restricted Subsidiary Guarantor
in accordance with Section 7.12 or of a Restricted Subsidiary Guarantor by the
Guarantor), letters of credit and endorsements (other than of notes, bills and
checks presented to banks for collection or deposit in the ordinary course of
business), in each case to support Indebtedness of other Persons; and (iii) all
items of borrowed money secured by any mortgage, pledge or Lien existing on
Property owned subject to such mortgage, pledge, or Lien, whether or not the
borrowed money secured thereby shall have been assumed by the Guarantor or any
Restricted Subsidiary. Indebtedness of the Guarantor and its Restricted
Subsidiaries at November 26, 1996 is set forth in Annex II hereto.
Institutional Holder - Any bank, trust company, insurance company,
pension fund, mutual fund or other similar financial institution, including,
without limiting the foregoing, any "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act, which is or becomes a holder of
any Note.
Investments - All investments made, in cash or by delivery of Property,
directly or indirectly, in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in Property to be
used or consumed in the ordinary course of business.
Lien - Any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to file any financing statement under
the Uniform Commercial Code of any jurisdiction in connection with any of the
foregoing.
15
Long-Term Lease - Any lease of real or personal Property (other than a
Capitalized Lease) having an original term of more than three years, including
any period for which the lease may be renewed at the option of the lessor,
whether or not theretofore renewed.
Majority-Owned - When applied to a Restricted Subsidiary, any
Restricted Subsidiary 80% of the Voting Stock of which is owned by the Guarantor
and/or its Majority-Owned Restricted Subsidiaries.
1992 Note Agreement - That Note Agreement dated as of January 1, 1992
between the Guarantor and the Purchasers which are signatories thereto.
1992 Notes - The senior notes issued pursuant to the 1992 Note
Agreement.
Noteholder - Any holder of a Note.
Notes - As defined in Section 1.1.
PBGC - As defined in Section 3.1(h).
Plan - As defined in Section 3.1(h).
Person - Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Priority Indebtedness - Without duplication (i) all Indebtedness of
Restricted Subsidiaries (except to the Guarantor or a Majority-Owned Restricted
Subsidiary Guarantor) in each case unsecured by Liens, (ii) the aggregate amount
of Guaranties by Restricted Subsidiaries (except of Indebtedness of the
Guarantor in accordance with Section 7.13 or a Majority-Owned Restricted
Subsidiary in accordance with Section 7.13), (iii) all Indebtedness of the
Guarantor and its Restricted Subsidiaries excluding the 1996 Notes (except to
the Guarantor or a Majority-Owned Restricted Subsidiary Guarantor) secured by
any Lien on the Property of the Guarantor or any Restricted Subsidiary and (iv)
the redemption or liquidation value (whichever is higher) of all equity
securities of Restricted Subsidiaries (other than common stock) which are not
legally and beneficially owned by the Guarantor or its Restricted Subsidiaries.
Property - Any real or personal or tangible or intangible asset.
Reinvestment Yield - The sum of (i) the yield set forth on page "USD"
of the Bloomberg Financial Markets Service at 11:00 a.m., Central Time on the
Determination Date opposite the maturity of the U.S. Treasury Security
corresponding to the Weighted Average Life to Maturity, rounded to the nearest
month, of the principal amount of the Notes to be prepaid, plus (ii) .50 of 1%
with respect to Notes to be prepaid pursuant to Section 2.2(a) or (b) or Notes
the payment of which has been accelerated with premium pursuant to Section 8.2.
If no maturity exactly corresponding to such rounded Weighted Average Life to
Maturity shall appear therein, yields for the two most closely corresponding
published maturities (one of which occurs prior and the other subsequent to the
Weighted Average Life to Maturity) shall be calculated pursuant to the foregoing
sentence and the Reinvestment Yield shall be interpolated from such yields on a
straight-line basis (rounding in each of such relevant periods, to the nearest
month).
Rentals - As of the date of any determination thereof, all fixed
payments (including all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the Property) payable by the
Guarantor or a Restricted Subsidiary, as lessee or sublessee under a lease of
real or personal Property, but exclusive of any amounts required to be paid by
the Guarantor or a Restricted Subsidiary (whether or not designated as rents or
additional rents) on account of maintenance, repairs, insurance, taxes,
assessments, amortization and similar charges. Fixed rents under any so-called
"percentage leases" shall be computed solely on the basis of the minimum rents,
if any, required to be paid by the lessee regardless of sales volume or gross
revenues.
16
Restricted Investments - Any Investment, except for:
(a) Investments in Restricted Subsidiary Guarantors;
(b) Investments made in the ordinary course of business in
Property and assets to be used in the ordinary course of business of
the Guarantor and its Restricted Subsidiaries;
(c) Investments in Current Assets arising from the sale of
goods and services in the ordinary course of business of the Guarantor
and its Restricted Subsidiaries;
(d) advances to and Guaranties of loans to employees of the
Guarantor and its Restricted Subsidiaries for expenses incurred in the
ordinary course of business;
(e) Investments in direct obligations of the United States or
any instrumentality thereof, provided that such obligations have a
final maturity not in excess of one year from the date of acquisition
thereof;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof issued by (i) Chase Manhattan
Bank or (ii) in the case of any other bank, a bank organized under the
laws of the United States or any state thereof, having capital, surplus
and undivided profits aggregating at least $100,000,000 and whose
long-term corporate debt is, at the time of acquisition thereof by the
Guarantor or any Subsidiary, accorded a rating of "A" or better by
Xxxxx'x Investors Service, Inc., or "A" or better by Standard & Poor's
Ratings Group;
(g) Investments in commercial paper maturing no more than 270
days from the date of issuance issued by any corporation organized
under the laws of the United States or any state thereof, rated in the
highest category by Xxxxx'x Investors Service, Inc. or Standard &
Poor's Ratings Group;
(h) Investments in money market funds registered under the
Investment Company Act of 1940 which invest in securities which, in the
aggregate, have an average rating of "A" or better (or an equivalent)
by Xxxxx'x Investors Services, Inc. or Standard & Poor's Rating Group;
(i) Investments in tax-exempt municipal bonds maturing not
more than one year from the date of issue and which bear at least a
MIG-1 rating; and
(j) Guaranties by the Guarantor or the Company of Long-Term
Leases of Majority-Owned Restricted Subsidiaries.
Restricted Subsidiary - Any Subsidiary (i) which is organized under the
laws of the Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx, Xxxxxx or a member of the
European Union or a jurisdiction thereof, (ii) which conducts substantially all
of its business and payments within the United States, Puerto Rico, Canada,
Mexico or any member of the European Union, (iii) a majority of each class of
capital stock of which is legally and beneficially owned by the Guarantor or a
Restricted Subsidiary or (iv) which is designated as a "Restricted Subsidiary in
Annex I hereto or in a written notice provided to each Noteholder. The Guarantor
and each Restricted Subsidiary which issues a Subsidiary Guarantee shall, as
long as such Subsidiary Guarantee remains in effect, at all times remain a
Restricted Subsidiary.
Restricted Subsidiary Guarantor. Any Subsidiary Guarantor which is a
Restricted Subsidiary.
Securities Act - The Securities Act of 1933, as amended, and as it may
be further amended from time to time.
17
Sharing Agreement - The Sharing Agreement dated as of June 2, 2000
among the Banks, Allstate Life Insurance Company, Allstate Insurance Company and
Pacific Life Insurance Company (formerly known as Pacific Mutual Life Insurance
Company) substantially in the form attached hereto as Exhibit F.
Subordination Agreement - That Subsidiary Subordination Agreement dated
as of June 2, 2000 providing that all Indebtedness owed by each Subsidiary
Guarantor to the Guarantor is subordinated to the prior payment of Indebtedness
owed to the Noteholders under this Agreement and the Subsidiary Guarantees
substantially in the form attached hereto as Exhibit E.
Subsidiary - Any corporation of which more than 50% of the outstanding
shares of Voting Stock are owned or controlled by the Guarantor or one or more
Subsidiaries.
Subsidiary Guarantees - The Guarantee Agreements substantially in the
form attached as Exhibit D hereto executed by each Subsidiary Guarantor.
Subsidiary Guarantors - Each of Buffalo China, Inc., Encore Promotions,
Inc., THC Systems, Inc. (successor to Oneida Community China, Inc.) and each
Restricted Subsidiary created or acquired after January 19, 1996, which becomes
a "Guarantor" as such term is defined in the Bank Agreement or which is required
to issue a Subsidiary Guaranty pursuant to Section 7.12.
THC Acquisition. - The acquisition by the Company of assets of a
company formerly known as THC Systems, Inc. pursuant to that Asset Purchase
Agreement dated August 29, 1996.
Voting Stock - Capital stock of any class of a corporation having power
to vote for the election of members of the board of directors of such
corporation, or persons performing similar functions (whether or not at the time
stock of any class shall have or might have special voting powers or rights by
reason of the happening of any contingency).
Weighted Average Life to Maturity - As applied to any prepayment of
principal of the Notes, at any date, the number of years obtained by dividing
(a) the then outstanding principal amount of the Notes to be prepaid into (b)
the sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity, or other required payment,
including payment at final maturity, foregone by such prepayment by (ii) the
number of years (calculated to the nearest 1/12th) which will elapse between
such date and the making of such payment.
Wholly-Owned Restricted Subsidiary. - When applied to a Restricted
Subsidiary, any Restricted Subsidiary 100% of the Voting Stock of which is owned
by the Guarantor or its Wholly-Owned Restricted Subsidiaries.
Terms which are defined in other Sections of this Agreement shall have
the meanings specified therein.
5.2. Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP in
force at the time of determination, except where such principles are
inconsistent with the requirements of this Agreement.
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5.3. Valuation Principles. Except where indicated expressly to the
contrary by the use of terms such as "fair value," "fair market value" or
"market value," each asset, each liability and each capital item of any Person,
and any quantity derivable by a computation involving any of such assets,
liabilities or capital items, shall be taken at the net book value thereof for
all purposes of this Agreement. "Net book value", for purposes of Section 7.8
hereof, with respect to any asset, liability or capital item of any Person shall
mean the amount at which the same is recorded or, in accordance with GAAP,
should have been recorded in the books of account of such Person, as reduced by
any reserves which have been or, in accordance with GAAP, should have been set
aside with respect thereto, without giving effect to any write-up, write-down or
write-off, relating thereto which was made after the date of this Agreement.
5.4. Direct or Indirect Actions. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
5.5. Property. Wherever the word "property" is used in this Agreement,
the lower case "p" is changed to the upper case "P".
5.6. Officers. Whenever the phrase "chief financial officer" or "chief
accounting officer" is used, the phrase "or Senior Vice President, Finance,
Treasurer or Controller" shall be added.
6. AFFIRMATIVE COVENANTS
Each of the Company and the Guarantor agrees that, for so long as any
amount remains unpaid on any Note:
6.1. Corporate Existence. The Guarantor will maintain and preserve, and
will cause each Subsidiary to maintain and preserve, its corporate existence and
right to carry on its business and use, and cause each Subsidiary to use, its
best efforts to maintain, preserve, renew and extend all of its rights, powers,
privileges and franchise necessary to the proper conduct of its business;
provided, however, that the foregoing shall not prevent any transaction
permitted by Sections 7.7 or 7.8.
6.2. Insurance. The Guarantor will insure and keep insured at all times
all of its Properties and all of its Subsidiaries' Properties which are of an
insurable nature and of the character usually insured by companies operating
similar Properties, against loss or damage by fire and from other causes
customarily insured against by companies engaged in similar businesses in such
amounts as are usually insured against by such companies. The Guarantor also
will maintain for itself and its Subsidiaries at all times with financially
sound and reputable insurers adequate insurance against loss or damage from such
hazards and risks to the person and Property of others as are usually insured
against by companies operating Properties similar to the Properties of the
Guarantor and its Subsidiaries. All such insurance shall be carried with
financially sound and reputable insurers accorded a rating of A-XII or better by
A.M. Best Company, Inc. A summary of insurance presently in force is contained
in the attached Annex IV.
6.3. Taxes, Claims for Labor and Materials. The Guarantor will pay and
discharge when due, and will cause each Subsidiary to pay and discharge when
due, all taxes, assessments and governmental charges or levies imposed upon it
or its Property or assets, or upon Properties leased by it (but only to the
extent required to do so by the applicable lease), prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien upon its Property or assets, provided that neither the Guarantor nor any
Subsidiary shall be required to pay any such tax, assessment, charge, levy or
claim, the payment of which is being contested in good faith and by proper
proceedings that will stay the forfeiture or sale of any Property and with
respect to which adequate reserves are maintained in accordance with GAAP.
6.4. Maintenance of Properties. The Guarantor will maintain, preserve
and keep, and will cause each Subsidiary to maintain, preserve and keep, its
Properties (whether owned in fee or a leasehold interest) in good repair and
working order, ordinary wear and tear excepted, and from time to time will make
all necessary repairs, replacements, renewals and additions.
19
6.5. Maintenance of Records. The Guarantor will keep, and will cause
each Subsidiary to keep, at all times proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to the business and affairs of the Guarantor or
such Subsidiary, in accordance with GAAP (except for such changes as are
disclosed in such financial statements or in the notes thereto and concurred in
by the independent certified public accountants), and the Guarantor will, and
will cause each Subsidiary to, provide reasonable protection against loss or
damage to such books of record and account.
6.6. Financial Information and Reports. The Guarantor will furnish to
you and to any other Institutional Holder (in duplicate if you or such other
holder so request), the following:
(a) As soon as available and in any event within 45 days after the end
of each of the first three quarterly accounting periods of each fiscal year of
the Guarantor, a consolidated balance sheet of the Guarantor and its Restricted
Subsidiaries as of the end of such period and consolidated statements of
earnings and cash flows of the Guarantor and its Restricted Subsidiaries for the
periods beginning on the first day of such fiscal year and the first day of such
quarterly accounting period and ending on the date of such balance sheet,
setting forth in comparative form the corresponding consolidated figures for the
corresponding periods of the preceding fiscal year, all in reasonable detail
prepared in accordance with GAAP (except for changes disclosed in such financial
statements or in the notes thereto and concurred in by the Guarantor's
independent certified public accountants) and certified by the chief financial
officer or chief accounting officer or Senior Vice President, Finance of the
Guarantor (i) outlining the basis of presentation, and (ii) stating that the
information presented in such statements presents fairly the financial condition
of the Guarantor and its Subsidiaries and the results of operations for the
period, subject to customary year-end audit adjustments; provided that so long
as the Guarantor shall file a quarterly report on Form 10-Q or any similar form
with the Securities and Exchange Commission or any successor agency which
contains the information set forth in this paragraph (a), the requirements of
this paragraph (a) shall be satisfied by forwarding Form 10-Q to the holder of
the Notes within such 45-day period;
(b) As soon as available and in any event within 90 days after the last
day of each fiscal year a consolidated and a consolidating balance sheet of the
Guarantor and its Restricted Subsidiaries as of the end of such fiscal year and
the related audited consolidated and consolidating statements of earnings,
stockholders' equity and cash flows for such fiscal year, in each case setting
forth in comparative form figures for the preceding fiscal year, all in
reasonable detail, prepared in accordance with GAAP (except for changes
disclosed in such financial statements or in the notes thereto and concurred in
by independent certified public accountants) and accompanied by a report as to
the consolidated balance sheet and the related consolidated statements of
PriceWaterhouseCoopers or any firm of independent public accountants of
recognized national standing selected by the Guarantor to the effect that such
financial statements have been prepared in conformity with GAAP and present
fairly, in all material respects, the financial condition of the Guarantor and
its Restricted Subsidiaries and that the examination of such financial
statements by such accounting firm has been made in accordance with generally
accepted auditing standards; provided that so long as the Guarantor shall file
an annual report on Form 10-K or any similar form with the Securities and
Exchange Commission or any successor agency which contains the information set
forth in this paragraph (b), the requirements of this paragraph (b) shall be
satisfied by forwarding Form 10-K to the holder of the Notes within such 90-day
period;
(c) Together with the financial statements delivered pursuant to
paragraphs (a) and (b) of this Section 6.6, a certificate of the chief financial
officer or chief accounting officer or Senior Vice President, Finance of each of
the Guarantor and the Company, (i) to the effect that such officer has
re-examined the terms and provisions of this Agreement and that at the date of
such certificate, during the periods covered by such financial reports and as of
the end of such periods, the Company and the Guarantor, respectively, is not, or
was not, in default in the fulfillment of any of the terms, covenants,
provisions and conditions of this Agreement or, in the case of the Guarantor,
this Agreement or the Guaranty Agreement, and that no Event of Default, or event
which, with the lapse of time or the giving of notice, or both, would become an
Event of Default, is occurring or has occurred as of the date of such
certificate, during such periods and as of the end of such periods, or if the
signer is aware of any such default, event or Event of Default, such signer
shall disclose in such statement the nature thereof, its period of existence and
what action, if any, the Company or the Guarantor has taken or proposes to take
with respect thereto, and (ii) stating whether the Guarantor is in compliance
with Sections 7.1 through 7.13 and setting forth, in sufficient detail, the
information and computations required to establish whether or not the Guarantor
was
20
in compliance with the requirements of Sections 7.1 through 7.9 during the
periods covered by the financial reports then being furnished and as of the end
of such periods;
(d) Together with the financial reports delivered pursuant to paragraph
(b) of this Section 6.6, a certificate of the independent certified public
accountants (i) stating that in making the examination necessary for expressing
an opinion on such financial statements, nothing came to their attention that
caused them to believe that there is in existence or has occurred any Event of
Default hereunder, or any event (the occurrence of which is ascertainable by
accountants in the course of normal audit procedures) which, with the lapse of
time or the giving of notice, or both, would become an Event of Default
hereunder or, if such accountants shall have obtained knowledge of any such
event or Event of Default, describing the nature thereof and the length of time
it has existed and (ii) acknowledging that holders of the Notes may rely on
their opinion on such financial statements;
(e) Within 15 days after the Guarantor obtains knowledge thereof,
notice of any litigation not fully covered by insurance or any governmental
proceeding pending against the Guarantor or any Subsidiary in which the damages
sought exceed $5,000,000 or which might otherwise materially adversely affect
the business, Property, operations or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole;
(f) As soon as available, copies of each financial statement, notice,
report and proxy statement which the Guarantor shall furnish to its
stockholders; copies of all press releases; copies of each registration
statement and periodic report which the Guarantor may file with the Securities
and Exchange Commission, and any other similar or successor agency of the
Federal government administering the Securities Act, the Exchange Act or the
Trust Indenture Act of 1939, as amended; copies of each report relating to the
Guarantor or its securities which the Guarantor may file with any securities
exchange on which any of the Guarantor's securities may be registered; copies of
any orders in any material proceedings to which the Guarantor or any of its
Subsidiaries is a party, issued by any governmental agency, Federal or state,
having jurisdiction over the Guarantor or any of its Subsidiaries; and, except
at such times as the Guarantor is a reporting company under Section 13 or 15(d)
of the Exchange Act or has complied with the requirements for the exemption from
registration under the Exchange Act set forth in Rule 12g-3-2(b), such financial
or other information as any holder of the Notes may reasonably determine is
required to permit such holder to comply with the requirements of Rule 144A
under the Securities Act in connection with the resale by it of the Notes;
(g) As soon as available, a copy of each other report submitted to the
Guarantor or any Subsidiary by independent accountants retained by the Guarantor
or any Subsidiary in connection with any interim or special audit made by them
of the books of the Guarantor or any Subsidiary; and
(h) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Guarantor and its
Subsidiaries.
6.7. Inspection of Properties and Records; Confidentiality. The
Guarantor will allow, and will cause each Subsidiary to allow, any
representative of you or any other Institutional Holder, so long as you or such
other Institutional Holder holds any Note, at your expense, to visit and inspect
any of its Properties, to examine its books of record and account and to discuss
its affairs, finances and accounts with its officers and its public accountants
(and by this provision the Guarantor authorizes such accountants to discuss with
you or such Institutional Holder its affairs, finances and accounts), all at
such reasonable times and as often as you or such Institutional Holder may
reasonably request. So long as an Event of Default or an event which, with the
passage of time or the giving of notice, or both, would become an Event of
Default has occurred and is continuing, the Guarantor agrees to pay the costs of
any inspections made pursuant to this Section 6.7. Each Noteholder covenants and
agrees to treat as confidential all nonpublic information furnished to it
pursuant to the provisions of Sections 6.6 and this 6.7 which has been
designated in writing as confidential by an officer of the Guarantor; provided
that each Noteholder reserves the right to make such disclosure to (i) such
Noteholder's directors, officers, employees, auditors, financial advisers,
rating agencies and attorneys, (ii) any other Noteholder, (iii) any Person to
which such Noteholder offers to sell such Note or any part thereof or a
participation in all or any part of such Note, (iv) any Federal or state
regulatory authority having jurisdiction over such Noteholder, (v) the National
Association of Insurance Commissioners or any similar organization, (vi) effect
compliance with any law, rule, regulation or order applicable to you or any
other Institutional Holder, (vii) in response to any subpoena or other legal
process, (viii) in connection with any litigation
21
to which you or any other Institutional Holder are a party, or (ix) if an Event
of Default has occurred and is continuing, to the extent you or any other
Institutional Holder may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under the Notes, this Agreement the Subsidiary Guarantees or the
Subordination Agreement. The confidentiality restrictions contained in this
Section 6.7 shall not apply to information which (a) is or becomes generally
available to the public other than as a result of a disclosure by any Noteholder
or its representatives or (b) becomes available to any Noteholder on a
nonconfidential basis from a source other than the Guarantor or one of its
agents.
6.8. ERISA. (a) The Guarantor agrees that all assumptions and methods
used to determine the actuarial valuation of employee benefits, both vested and
unvested, under any Plan of the Guarantor or any Subsidiary, and each such Plan,
whether now existing or adopted after the date hereof, will comply in all
material respects with ERISA and other applicable laws.
(b) The Guarantor will not at any time permit any Plan established,
maintained or contributed to by it or any Subsidiary or "affiliate" (as defined
in Section 407(d)(7) of ERISA) to:
(i) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such term
is defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to
result in the imposition of a lien on the Property of the Guarantor or
any Subsidiary pursuant to Section 4068 of ERISA, if and to the extent
such termination is within the control of the Guarantor;
if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Guarantor or any Subsidiary or ERISA affiliate to a
liability which, in the aggregate, is material in relation to the business,
Property, operations, or condition, financial or otherwise, of the Guarantor and
its Subsidiaries taken as a whole.
(c) Upon the request of you or any other Institutional Holder, the
Guarantor will furnish a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service. Copies of annual reports
shall be delivered no later than 30 days after the later of the date such report
has been filed with the Internal Revenue Service or the date the copy is
requested.
(d) Promptly upon the occurrence thereof, the Guarantor will give you
and each other Institutional Holder written notice of (i) a reportable event
with respect to any Plan; (ii) the institution of any steps by the Guarantor,
any Subsidiary, any ERISA affiliate, the PBGC or any other person to terminate
any Plan; (iii) the institution of any steps by the Guarantor, any Subsidiary,
or any ERISA affiliate to withdraw from any Plan; (iv) a prohibited transaction
in connection with any Plan; (v) any material increase in the contingent
liability of the Guarantor or any Subsidiary with respect to any post-retirement
welfare liability; or (vi) the taking of any action by the Internal Revenue
Service, the Department of Labor or the PBGC with respect to any of the
foregoing which, in any of the events specified above, would result in any
material liability of the Guarantor or any of its Subsidiaries.
22
6.9. Compliance with Laws. The Guarantor will comply, and will cause
each Subsidiary to comply, with all laws, rules and regulations relating to its
or their respective businesses, other than laws, rules and regulations the
failure to comply with which or the sanctions and penalties resulting therefrom,
individually or in the aggregate, would not have a material adverse effect on
the business, Property, operations, or condition, financial or otherwise, of the
Guarantor or such Subsidiary, and would not result in the creation of a Lien
which, if incurred in the ordinary course of business, would not be permitted by
Section 7.5 on any of the Property of the Guarantor or any Subsidiary; provided,
however, that the Guarantor and its Subsidiaries shall not be required to comply
with laws, rules and regulations the validity or applicability of which are
being contested in good faith and by appropriate proceedings; provided that the
failure to comply with such laws, rules or regulations would not have a material
adverse effect on the business, Properties, operations, assets or condition,
financial or otherwise, of the Guarantor and its Subsidiaries taken as a whole.
6.10. Acquisition of Notes. The Company will forthwith cancel any Notes
in any manner or at any time acquired by the Company or the Guarantor or any
Subsidiary or Affiliate and such Notes shall not be deemed to be outstanding for
any of the purposes of this Agreement or the Notes.
6.11. Private Placement Number. The Company and the Guarantor consent
to the filing of copies of this Agreement with Standard & Poor's CUSIP Service
Bureau and the National Association of Insurance Commissioners to obtain a
private placement number.
6.12. NAIC Filings. The Guarantor shall, on the date it provides its
audited financial statements to the Noteholders pursuant to Section 6.6(b),
simultaneously provide such statements to the National Association of Insurance
Commissioners, Securities Valuation Office, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
6.13. Company's Restricted Subsidiary Status. The Guarantor shall at
all times own 100% of the Voting Stock of the Company.
6.14. Bank Agreement. The Guarantor shall promptly notify the holders
of the Notes of any amendment to or other modification of or replacement of the
Bank Agreement and shall promptly provide copies to the Noteholders of such
amendment or modification or replacement documentation.
6.15. Subsidiary Guarantees. In the event that the Guarantor or any
Restricted Subsidiary acquires a Person which complies with the definition
herein of a Restricted Subsidiary Guarantor, the Guarantor shall, within twenty
(20) days following such acquisition, provide the Noteholders with a Subsidiary
Guarantee from such new Restricted Subsidiary Guarantor.
7. NEGATIVE COVENANTS
Each of the Company and the Guarantor agrees that, for so long as any
amount remains unpaid on any Note:
7.1. Consolidated Net Worth. As of the last day of any Fiscal Quarter,
the Guarantor will not permit Consolidated Net Worth of the Guarantor and its
Restricted Subsidiaries to be less than the sum of (i) $125,000,000, plus (ii)
50% of the Consolidated Net Income of the Guarantor and its Restricted
Subsidiaries (which for the purposes of this covenant shall not be reduced by
losses) for the Fiscal Year ending January 27, 2001 and for each Fiscal Year
thereafter.
7.2. Leverage Ratio. The Guarantor will not permit the Consolidated
Leverage Ratio of the Guarantor and its Restricted Subsidiaries to be greater
than (i) 3.0 to 1.0 as of the last day of the Fiscal Quarter ending April 29,
2000, (ii) 3.25 to 1.0 as of the last day of the Fiscal Quarters ending July 29,
2000 and October 28, 2000, and (iii) 3.0 to 1.0 as of the last day of each
succeeding Fiscal Quarter.
7.3. Priority Indebtedness of Restricted Subsidiaries. The Guarantor
will not permit any Restricted Subsidiary to permit to exist, create, assume,
incur, guarantee or otherwise be or become liable, directly or indirectly, in
respect of any Priority Indebtedness, (a) except the Notes and (b) except
additional Priority Indebtedness
23
(excluding fifty percent (50%) of the then outstanding principal amount of all
tax-exempt Indebtedness of Restricted Subsidiaries issued at or prior to January
26, 1991) which, after giving effect thereto and the application of proceeds
thereof, does not result in aggregate outstanding Indebtedness (including the
Notes) incurred by Restricted Subsidiaries when added to aggregate Indebtedness
incurred (without duplication) pursuant to Section 7.5(f), exceeding 20% of
Consolidated Net Worth.
7.4. Consolidated Interest Coverage Ratio. For a period of four
consecutive Fiscal Quarters ending with its most recent Fiscal Quarter, the
Guarantor will not permit the Consolidated Interest Coverage Ratio of the
Guarantor and its Restricted Subsidiaries to be less than 3.0 to 1.0.
7.5. Liens. Neither the Guarantor nor any Restricted Subsidiary will
cause or permit or hereafter agree or consent to cause or permit in the future
(upon the happening of a contingency or otherwise), any of its Property, whether
now owned or subsequently acquired, to be subject to a Lien except:
(a) Liens securing the payment of taxes, assessments or governmental
charges or levies or the demands of suppliers, mechanics, repairmen, workmen,
materialmen, carriers, warehousers, landlords and other like Persons, or similar
statutory Liens, provided that (i) such Liens do not in the aggregate materially
reduce the value of any Properties subject to the Liens or materially interfere
with their use in the ordinary conduct of the Guarantor's or any Restricted
Subsidiaries business, (ii) all claims which such Liens secure are not
delinquent or are being actively contested in good faith and by appropriate
proceedings and (iii) adequate reserves have been established therefor on the
books of the Guarantor;
(b) Liens incurred or deposits made in the ordinary course of business
(i) in connection with worker's compensation, unemployment insurance, social
security and other like laws, or (ii) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations, in each case not
incurred in connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of Property otherwise than permitted
by paragraph (f) below;
(c) Attachment, judgment and other similar Liens arising in connection
with court proceedings, provided that (i) execution and other enforcement are
effectively stayed, (ii) all claims which the Liens secure are being actively
contested in good faith and by appropriate proceedings and (iii) adequate
reserves have been established therefor on the books of the Guarantor, if
required by GAAP;
(d) Liens on Property of a Restricted Subsidiary, provided that such
Liens secure only obligations owing between the Guarantor and any Restricted
Subsidiary Guarantor or between Majority-Owned Restricted Subsidiary Guarantors;
(e) Liens existing as of January 30, 1992, which Liens are set forth in
Annex III hereto;
(f) Other Liens solely on real estate, plant equipment and supplies not
otherwise permitted under subparagraphs (a) through (e) above securing
Indebtedness; provided that the Indebtedness secured by such Liens does not
exceed the lesser of the cost or fair market value of the Property; and
provided, further, that the aggregate amount of such Indebtedness secured by
Liens permitted by this subparagraph (f), when added to the aggregate amount of
other Indebtedness of Restricted Subsidiaries incurred (without duplication)
pursuant to Section 7.3 (but excluding Subsidiary Guarantees), does not exceed
twenty percent (20%) of Consolidated Net Worth;
(g) Liens resulting from extension, refunding, renewal or replacement
of the Indebtedness secured by Liens described in subparagraphs (d), (e) and (f)
above, up to the amount outstanding under such Indebtedness at the time of such
extension, refunding, renewal or replacement; provided that any new Lien
attaches only to the same Property theretofore subject to such earlier Lien; and
(h) In the event that the Guarantor or any Restricted Subsidiary
creates, assumes, incurs or permits to exist any Lien not otherwise permitted by
this Section 7.5, the Company will make or cause to be made provision whereby
the Notes will be secured equally and ratably with all other obligations secured
by such Liens, and in any
24
case the Notes shall have the benefit, to the full extent that, and with such
priority as, the holders may be entitled thereto under applicable law, of an
equitable Lien on such Property securing the Notes. Any violation of this
Section 7.5 shall constitute an Event of Default whether or not any such
provision is made for equal and ratable security pursuant to this subparagraph
(h).
7.6. Long-Term Leases. The Guarantor will not, and will not permit any
Restricted Subsidiary to, become obligated, as lessee under any Long-Term Lease
unless, at the time of entering into such Long-Term Lease and after giving
effect thereto, the average aggregate annual Rentals payable by the Guarantor
and its Restricted Subsidiaries on a consolidated basis during the term of such
Long-Term Lease pursuant to Long-Term Leases will not exceed 10% of Consolidated
Net Worth, determined as of the end of the Guarantor's prior fiscal quarter.
7.7. Merger or Consolidation. The Guarantor will not, and will not
permit any Restricted Subsidiary to, merge or consolidate with any other Person,
except that:
(a) The Guarantor may consolidate with or merge into any Person or
permit any other Person to merge into it, provided that immediately after giving
effect thereto,
(i) The Guarantor is the successor corporation or, if the
Guarantor is not the successor corporation, the successor corporation is
a corporation organized under the laws of a state of the United States
of America or the District of Columbia and shall expressly assume in
writing the Guarantor's obligations under the Notes and this Agreement
and the Guaranty Agreement;
(ii) There shall exist no Event of Default or event which,
with the passage of time or giving of notice, or both, would constitute
an Event of Default; and
(iii) The Guarantor or such successor corporation could incur
at least $1.00 of additional debt pursuant to the Consolidated Leverage
Ratio of Section 7.2 hereof as of the most recently reported Fiscal
Quarter;
(b) Any Restricted Subsidiary (except the Company) may (i) merge into
the Guarantor or another Majority-Owned Restricted Subsidiary Guarantor or (ii)
sell, transfer or lease all or any part of its assets to the Guarantor or to
another Majority-Owned Restricted Subsidiary Guarantor or (iii) merge into any
Person which, as a result of such merger, concurrently becomes a Restricted
Subsidiary, provided in each such instance that there shall exist no Event of
Default or event which, with the passage of time or giving of notice, or both,
would constitute an Event of Default;
(c) The Company may merge into the Guarantor.
7.8. Sale of Assets. During any fiscal year, the Guarantor will not,
and will not permit any Restricted Subsidiary to, sell, lease, transfer or
otherwise dispose of any assets, in one or a series of transactions, other than
in the ordinary course of business, to any Person, other than the Guarantor or,
in the case of the Company, to a Wholly-Owned Restricted Subsidiary Guarantor
or, in the case of all other Restricted Subsidiaries, to a Majority-Owned
Restricted Subsidiary Guarantor (collectively a "Disposition"), if after giving
effect to such Disposition, the aggregate book value of all Dispositions made
during such fiscal year would exceed ten percent (10%) of Consolidated Tangible
Assets as of the end of the immediately preceding fiscal year. Notwithstanding
the foregoing, the Guarantor may make a Disposition in excess of the aforesaid
percentage if the Guarantor shall, within 180 days after such Disposition, (a)
use pro rata the net proceeds from the sale of such assets exceeding ten percent
(10%) to invest in other tangible Property and of at least equivalent value for
use in the business of the Guarantor and its Restricted Subsidiaries or (b) with
respect to the net proceeds from Dispositions exceeding ten percent (10%)
derived other than from a Camden Disposition, to prepay Funded Debt, including
the Notes, on a pro rata basis among all issuers of such Funded Debt, including
the Noteholders (subject to the right, to which the Company agrees, of any
Noteholders to elect not to be so prepaid), subject to the prepayment
requirements of Section 2.2(a) and at the price set forth in Section 2.2(b).
With respect to a Camden Disposition occurring prior to March 1, 1997, such
Camden Disposition shall not constitute a Disposition for purposes of this
Section 7.10. With respect to a Camden Disposition occurring after March 1,
1997, the net proceeds of such Camden Disposition, plus proceeds of
25
other Dispositions made during the same fiscal year which exceed in the
aggregate, ten percent (10%) of Consolidated Tangible Net Assets as of the end
of the immediately preceding fiscal year, shall be used to prepay Funded Debt,
including the Notes, on a pro rata basis among all issuers of such Funded Debt,
including the Noteholders (subject to the right, to which the Company agrees, of
any Noteholder to elect not to be so prepaid), subject to the prepayment
requirements of Section 2.2(a) and a price equal to 100% of the principal amount
to be prepaid, plus interest accrued to the date of prepayment.
7.9. Change in Business. Neither the Guarantor nor any Restricted
Subsidiary (whether now existing or hereafter acquired or organized) will engage
in any business if, giving effect thereto, less than 80% of the Consolidated
Tangible Assets of the Guarantor at the most recently ended fiscal quarter would
be attributable to the current business of the Guarantor and its Restricted
Subsidiaries taken as a whole, including, but not limited to, the manufacturing,
advertising, sales, distribution, of industrial wire, household and foodservice
products and related businesses.
7.10. Transactions with Affiliates. The Guarantor will not, and will
not permit any Subsidiary to, enter into any transaction (including the
furnishing of goods or services) with an Affiliate except in the ordinary course
of business as presently conducted and on terms and conditions no less favorable
to the Guarantor or such Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
7.11. Consolidated Tax Returns. The Guarantor will not file, or consent
to the filing of, any consolidated Federal income tax return with any Person
other than a Restricted Subsidiary, except to the extent that the Guarantor is
required under the Code to do otherwise.
7.12. Pari Passu Position. Each of the Company and the Guarantor agrees
that it will not grant or provide, and at no time will it allow to exist, be
created or granted, any Liens or security interests in favor of, or Guaranties
by Restricted Subsidiaries for the benefit of, any of the Banks, unless in the
case of the giving of any guaranty by Restricted Subsidiaries, the Noteholders
shall simultaneously be provided with a Subsidiary Guarantee.
7.13. Sharing Agreement. The Guarantor shall not permit any Restricted
Subsidiary to incur Priority Indebtedness or to issue a Restricted Subsidiary
Guarantee without requiring that the lender of such Indebtedness or beneficiary
of such Restricted Subsidiary Guarantee execute the Sharing Agreement at the
time of such incurrence of Indebtedness.
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1. Nature of Events. An "Event of Default" shall exist if any one or
more of the following occurs:
(a) Default in the payment of interest on any of the Notes which
continues for a period of three (3) days following the date such payment is due;
(b) Default in the payment of the principal of any of the Notes or the
premium thereon, if any, at maturity, upon acceleration of maturity or at any
date fixed for prepayment;
(c) Default shall occur (i) in the payment of the principal of,
premium, or interest on any other Indebtedness of the Guarantor or its
Subsidiaries, aggregating in excess of $1,000,000 as and when due and payable
(whether by lapse of time, declaration, call for redemption or otherwise), (ii)
under any mortgage, agreement or other instrument of the Guarantor or any
Subsidiary securing such Indebtedness or under or pursuant to which such
Indebtedness aggregating in excess of $1,000,000 is issued, (iii) under any
leases other than Capital Lease Obligations of the Guarantor or any Subsidiary,
with aggregate Caital Lease Obligations in excess of $1,000,000 or (iv) with
respect to any combination of the foregoing involving Indebtedness and/or
Capital Lease Obligations aggregating in excess of $1,000,000 regardless of
whether such defaults would be Events of Default hereunder, and any such
defaults with respect to the payment of money shall continue, unless waived,
beyond the period of grace, if any, allowed with respect thereto;
26
(d) Default in the observance or performance of Sections 6.13, 6.15,
7.1, 7.2, 7.3, 7.4, 7.6, 7.7, 7.8, 7.12 or 7.13.
(e) Default in the observance or performance of any other covenant or
provision of this Agreement which default is not remedied within 30 days after
the earlier of the date (a) management of the Guarantor knew of such default or
(b) on which written notice of such default is provided to the Guarantor by any
Noteholder;
(f) Any representation or warranty made by the Company or the Guarantor
in this Agreement, or made by the Company or the Guarantor in any written
statement or certificate furnished by the Company or the Guarantor in connection
with the issuance and sale of the Notes or furnished by the Company or the
Guarantor pursuant to this Agreement or furnished by the Guarantor pursuant to
the Guaranty Agreement or furnished by any Subsidiary Guarantor pursuant to any
Subsidiary Guarantee, proves incorrect in any material respect as of the date of
the issuance or making thereof;
(g) Any judgments, writs or warrants of attachment or any similar
processes individually or in the aggregate in excess of $1,500,000 shall be
entered or filed against the Guarantor or any Subsidiary or against any Property
or assets of either and remain unpaid, unvacated, unbonded or unstayed (through
appeal or otherwise) for a period of 60 days after the Guarantor or any
Subsidiary receives notice thereof;
(h) The Guarantor or any Subsidiary shall incur a "Distress
Termination" (as defined in Title IV of ERISA) of any Plan or any trust created
thereunder which results in material liability to the PBGC, the PBGC shall
institute proceedings to terminate any Plan or any trust created thereunder, or
a trustee shall be appointed by a United States District Court pursuant to
Section 4042(b) of ERISA to administer any Plan or any trust created thereunder;
(i) (A) Guarantor or any Subsidiary Guarantor shall be in default of or
fail to comply with any term, covenant, or agreement contained in the Guaranty
Agreement or any Subsidiary Guarantee or the Subordination Agreement or (B) the
Guaranty Agreement or any Subsidiary Guarantee or the Subordination Agreement
shall cease to be in full force and effect; or
(j) The Guarantor or any Subsidiary shall
(i) generally not pay its debts as they become due or admit in
writing its inability to pay its debts generally as they become due;
(ii) file a petition in bankruptcy or for reorganization or
for the adoption of an arrangement under the Federal Bankruptcy Code,
or any similar applicable bankruptcy or insolvency law, as now or in
the future amended (herein collectively called "Bankruptcy Laws"), or
an answer or other pleading admitting or failing to deny the material
allegations of such a petition or seeking, consenting to or acquiescing
in relief provided for under the Bankruptcy Laws;
(iii) make an assignment of all or a substantial part of its
Property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment of a
receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its Property;
(v) be finally adjudicated a bankrupt or insolvent;
(vi) be subject to the entry of a court order, which shall not
be vacated, set aside or stayed within 30 days from the date of entry,
appointing a receiver, liquidator, custodian or trustee of it or for
all or a substantial part of its Property, or entering of an order for
relief pursuant to an involuntary case, or effecting an arrangement in,
bankruptcy or for a reorganization pursuant to the Bankruptcy Laws or
for any other judicial modification or alteration of the rights of
creditors; or
27
(vii) be subject to the assumption of custody or sequestration
by a court of competent jurisdiction of all or a substantial part of
its Property, which custody or sequestration shall not be suspended or
terminated within 30 days from its inception.
8.2. Remedies on Default. When any Event of Default described in
paragraphs (a) through (i) of Section 8.1 has happened and is continuing, the
holder or holders of at least 25% in principal amount of the Notes then
outstanding may by notice to the Company declare the entire principal, together
with the premium set forth below, and all interest accrued on all Notes to be,
and such Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
expressly waived. Notwithstanding the foregoing, when (i) any Event of Default
described in paragraphs (a) or (b) of Section 8.1 has happened and is
continuing, any holder may by notice to the Company declare the entire
principal, together with the premium set forth below, and all interest accrued
on the Notes then held by such holder to be, and such Notes shall thereupon
become, forthwith due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are expressly waived and (ii) any Event
of Default described in paragraph (j) of Section 8.1 has happened, then all
outstanding Notes shall immediately become due and payable without presentment,
demand or notice of any kind. Upon the Notes or any of them becoming due and
payable as aforesaid, the Company will forthwith pay to the holders of such
Notes the entire principal of and interest accrued on such Notes, plus a premium
in the event that the Reinvestment Yield shall, on the Determination Date, be
less than the interest rate payable on or in respect of the Notes. Such premium
shall equal (x) the aggregate present value of the principal so accelerated and
the aggregate present value of the interest which would have been payable in
respect of such principal absent such accelerated payment, determined by
discounting (semi-annually on the basis of a 360-day year composed of twelve
30-day months) each such amount utilizing an interest factor equal to the
Reinvestment Yield, less (y) the principal amount to be accelerated.
8.3. Annulment of Acceleration of Notes. The provisions of Section 8.2
are subject to the condition that if the principal of and accrued interest on
the Notes have been declared immediately due and payable by reason of the
occurrence of any Event of Default described in paragraphs (a) through (i),
inclusive, of Section 8.1, the holder or holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument
furnished to the Company, rescind and annul such declaration and the
consequences thereof, provided that (i) at the time such declaration is annulled
and rescinded no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement, (ii) all arrears of interest
upon all the Notes and all other sums payable under the Notes and under this
Agreement (except any principal, interest or premium on the Notes which has
become due and payable solely by reason of such declaration under Section 8.2)
and under the Guaranty Agreement and under the Subsidiary Guarantees shall have
been duly paid and (iii) each and every other Event of Default shall have been
cured or waived; and provided further, that no such rescission and annulment
shall extend to or affect any subsequent default or Event of Default or impair
any right consequent thereto.
8.4. Other Remedies. Subject to the provisions of Section 8.3, if any
Event of Default shall be continuing, any holder of Notes may enforce its rights
by suit in equity, by action at law, or by any other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Agreement, in the Notes or in the
Guaranty Agreement or in the Subsidiary Guarantees or in aid of the exercise of
any power granted in this Agreement, and may enforce the payment of any Note
held by such holder and any of its other legal or equitable rights.
8.5. Conduct No Waiver; Collection Expenses. No course of dealing on
the part of any holder of Notes, nor any delay or failure on the part of any
holder of Notes to exercise any of its rights, shall operate as a waiver of such
rights or otherwise prejudice such holder's rights, powers and remedies. If the
Company fails to pay, when due, the principal of, or the interest on, any Note,
or if the Company or the Guarantor fail to comply with any other provision of
this Agreement, the Company and the Guarantor will pay to each holder, to the
extent permitted by law, on demand, such further amounts as shall be sufficient
to cover the reasonable cost and expenses, including but not limited to
reasonable attorneys' fees, incurred by such holders of the Notes in collecting
any sums due on the Notes or in otherwise enforcing any of their rights.
8.6. Remedies Cumulative. No right or remedy conferred upon or reserved
to any holder of Notes under this Agreement, the Guaranty Agreement, and the
Subsidiary Guarantees is intended to be exclusive of any
28
other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right or remedy given under this Agreement or the
Guaranty Agreement or now or hereafter existing under any applicable law. Every
right and remedy given by this Agreement or by applicable law to any holder of
Notes may be exercised from time to time and as often as may be deemed expedient
by such holder, as the case may be.
8.7. Notice of Default. With respect to Events of Default or claimed
defaults, the Guarantor will give the following notices:
(a) The Guarantor promptly will furnish to each holder of a Note notice
in writing by registered or certified mail, return receipt requested, of the
occurrence of an Event of Default or an event which, with the lapse of time or
the giving of notice, or both, would become an Event of Default. Such notice
shall specify the nature of such default, the period of existence thereof and
what action the Guarantor has taken or is taking or proposes to take with
respect thereto.
(b) If the holder of any Note or of any other evidence of Indebtedness
of the Guarantor or any Subsidiary gives any notice or takes any other action
with respect to a claimed default, the Guarantor will forthwith give written
notice to the extent of the Guarantor's knowledge thereof to each holder of the
then outstanding Notes, describing the notice or action and the nature of the
claimed default.
9. AMENDMENTS, WAIVERS AND CONSENTS
9.1. Matters Subject to Modification. Any term, covenant, agreement or
condition of this Agreement or the Guaranty Agreement may, with the consent of
the Company and the Guarantor, be amended, or compliance therewith may be waived
(either generally or in a particular instance and either retroactively or
prospectively), if the Company and the Guarantor shall have obtained the consent
in writing of the holder or holders of at least 66-2/3% in aggregate principal
amount of outstanding Notes; provided, however, that, without the written
consent of the holder or holders of all of the Notes then outstanding, no such
waiver, modification, alteration or amendment shall be effective which will (i)
change the time of payment (including any required prepayment) of the principal
of or the interest on any Note, (ii) reduce the principal amount thereof or the
premium, if any, or reduce the rate of interest thereon, (iii) change any
provision of any instrument affecting the preferences between holders of the
Notes or between holders of the Notes and other creditors of the Company, and
the Guarantor or (iv) change any of the provisions of Section 8.1, Section 8.2,
Section 8.3 or this Section 9.
For the purpose of determining whether holders of the requisite
principal amount of Notes have made or concurred in any waiver, consent,
approval, notice or other communication under this Agreement or the Guaranty
Agreement, Notes held in the name of, or owned beneficially by, the Guarantor,
the Company, or any Subsidiary or any Affiliate thereof, shall not be deemed
outstanding.
9.2. Solicitation of Holders of Notes. The Company and the Guarantor
will not solicit, request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions of this Agreement or the Notes
unless each holder of the Notes (irrespective of the amount of Notes then owned
by it) shall concurrently be informed thereof by the Company and the Guarantor
shall be afforded the opportunity of considering the same and shall be supplied
by the Company and the Guarantor with sufficient information to enable it to
make an informed decision with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the provisions of this
Section 9 shall be delivered by the Company and the Guarantor to each holder of
outstanding Notes forthwith following the date on which the same shall have been
executed and delivered by the holder or holders of the requisite percentage of
outstanding Notes. Neither the Company nor the Guarantor will, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of the
Notes as consideration for or as an inducement to the entering into by any
holder of the Notes of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently paid, on
the same terms, ratably to each holder of the then outstanding Notes.
9.3. Binding Effect. Any such amendment or waiver shall apply equally
to all the holders of the Notes and shall be binding upon them, upon each future
holder of any Note and upon the Company and the Guarantor
29
whether or not such Note shall have been marked to indicate such amendment or
waiver. No such amendment or waiver shall extend to or affect any obligation not
expressly amended or waived or impair any right related thereto.
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1. Form of Notes. The Notes initially delivered under this Agreement
will be in the form of six fully registered Notes in the form attached as
Exhibit A. The Notes are issuable only in fully registered form and in
denominations of at least $2,000,000 (or the remaining outstanding balance
thereof, if less than $2,000,000).
10.2. Note Register. The Company shall cause to be kept at its
principal office a register (the "Note Register") for the registration and
transfer of the Notes. The names and addresses of the holders of Notes, the
transfer thereof and the names and addresses of the transferees of the Notes
shall be registered in the Note Register. The Company may deem and treat the
person in whose name a Note is so registered as the holder and owner thereof for
all purposes and shall not be affected by any notice to the contrary, until due
presentment of such Note for registration of transfer as provided in this
Section 10.
10.3. Issuance of New Notes upon Exchange or Transfer. Upon surrender
for exchange or registration of transfer of any Note at the office of the
Company designated for notices in accordance with Section 11.2, the Company
shall execute and deliver, at its expense, one or more new Notes of any
authorized denominations requested by the holder of the surrendered Note, each
dated the date to which interest has been paid on the Notes so surrendered (or,
if no interest has been paid, the date of such surrendered Note), but in the
same aggregate unpaid principal amount as such surrendered Note, and registered
in the name of such person or persons as shall be designated in writing by such
holder. Every Note surrendered for registration of transfer shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or by such holder's attorney duly authorized in
writing. The Company may condition its issuance of any new Note in connection
with a transfer by any Person on compliance by the transferee with the
representations required under Section 3.2, by Institutional Holders on
compliance with Section 2.5 and on the payment to the Company of a sum
sufficient to cover any stamp tax or other governmental charge imposed in
respect of such transfer.
10.4. Replacement of Notes. Upon receipt of evidence satisfactory to
the Company of the loss, theft, mutilation or destruction of any Note, and in
the case of any such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company or in the event of such mutilation upon surrender and cancellation of
the Note, the Company, without charge to the holder thereof, will make and
deliver a new Note, of like tenor in lieu of such lost, stolen, destroyed or
mutilated Note. If any such lost, stolen or destroyed Note is owned by you or
any other Institutional Holder, then the affidavit of an authorized officer of
such owner setting forth the fact of loss, theft or destruction and of its
ownership of the Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof, and no further indemnity shall be
required as a condition to the execution and delivery of a new Note, other than
a written agreement of such owner (in form reasonably satisfactory to the
Company) to indemnify the Company.
11. MISCELLANEOUS
11.1. Expenses. Whether or not the purchase of Notes herein
contemplated shall be consummated, the Company and the Guarantor agree to pay
directly all reasonable expenses in connection with the preparation, execution
and delivery of this Agreement and the transactions contemplated by this
Agreement, including, but not limited to, out-of-pocket expenses, filing fees of
Standard & Poor's Ratings Group in connection with obtaining a private placement
number, charges and disbursements of special counsel, photocopying and printing
costs and charges for shipping the Notes, adequately insured, to you at your
home office or at such other address as you may designate, and all similar
expenses (including the reasonable fees and expenses of counsel) relating to any
amendments, waivers or consents in connection with this Agreement or the Notes
or the Guaranty Agreement or the Subsidiary Guarantees or the Subordination
Agreement or the Sharing Agreement or any agreement entered into by the
Noteholders and the Company, the Guarantor or any Subsidiary Guarantor,
including, but not limited to, any such amendments, waivers or consents
resulting from any work-out, renegotiation or restructuring relating to the
performance by the Company of its obligations under this Agreement and the
Notes, the performance by the Guarantor under this Agreement, the Subordination
Agreement and the Guaranty Agreement and the performance by
30
the Subsidiary Guarantors under the Subsidiary Guarantees and the Subordination
Agreement. The Company and the Guarantor also agree that they will pay and save
you harmless against any and all liability with respect to stamp and other
documentary taxes, if any, which may be payable, or which may be determined to
be payable in connection with the execution and delivery of this Agreement or
the Notes (but not in connection with a transfer of any Notes), whether or not
any Notes are then outstanding. The obligations of the Company under this
Section 11.1 shall survive the retirement of the Notes.
11.2. Notices. Except as otherwise expressly provided herein, all
communications provided for in this Agreement shall be in writing and delivered
or sent by registered or certified mail, return receipt requested, or by
overnight courier (i) if to you, to the address set forth below your name in
Schedule I, or to such other address as you may in writing designate, (ii) if to
any other holder of the Notes, to such address as the holder may designate in
writing to the Company, and (iii) if to the Company, to Oneida Ltd., 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx, Senior Vice
President-Finance, or to such other address as the Company may in writing
designate.
11.3. Reproduction of Documents. This Agreement and all documents
relating hereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed, (ii) documents received by you at
the closing of the purchase of the Notes (except the Notes themselves), and
(iii) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process, and you may destroy any original document so reproduced. The Company
and Guarantor agree and stipulate that any such reproduction which is legible
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by you in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence; provided that nothing
herein contained shall preclude the Company and the Guarantor from objecting to
the admission of any reproduction on the basis that such reproduction is not
accurate, has been altered or is otherwise incomplete.
11.4. Successors and Assigns. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
11.5. Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois. No provision of this
Agreement may be waived, changed or modified, or the discharge thereof
acknowledged, orally, except by an agreement in writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge is
sought.
11.6. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
11.7. Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart or reproduction thereof permitted by Section
11.3.
11.8. Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company and the Guarantor herein and
in any certificates delivered pursuant to this Agreement, the Guaranty Agreement
and the Subsidiary Guarantees, whether or not in connection with a closing, (i)
shall be deemed to have been relied upon by you, notwithstanding any
investigation heretofore or hereafter made by you or on your behalf and (ii)
shall survive the delivery of this Agreement, the Notes, the Guaranty Agreement
and the Subsidiary Guarantees.
11.9. Integration and Severability. This Agreement and the Exhibits
hereto (including but not limited to the Guaranty Agreement, the Subsidiary
Guarantees, and the Subordination Agreement) embody the entire agreement and
understanding between you, the Guarantor, the Company, and supersedes all prior
agreements and understandings relating to the subject matter hereof. In case any
one or more of the provisions contained in this
31
Agreement, the Guaranty Agreement, the Subsidiary Guarantee, the Subordination
Agreement or in any Note, or application thereof, shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained in this Agreement, the Guaranty Agreement, the
Subsidiary Guarantees, the Subordination Agreement and in any Note, and any
other application thereof, shall not in any way be affected or impaired thereby.
[SIGNATURE PAGES FOLLOW]
32
IN WITNESS WHEREOF, the Company, the Guarantor and the Purchasers have
caused this Agreement to be executed and delivered by their respective officer
or officers thereunto duly authorized.
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
-------------------
Title: Vice President-Finance
ONEIDA LTD.
By: /s/ XXXXXX X. XXXXX
-------------------
Title: Senior Vice President - Finance
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXXX X. XXXXX
--------------------
By:
-----------------------------------
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/ XXXXXXX X. XXXXX
-------------------
By:
-----------------------------------
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
-------------------
Title: Assistant Vice President
By: /s/ XXXXX X. XXXXX
-------------------
Title: Assistant Secretary
33
Schedule A-1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
----------------------------- ---------------------
Allstate Insurance Company (1) $10,000,000
0000 Xxxxxxx Xxxx, XXX X0X (2) $5,000,000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Investment Operations
Private Placements
Telephone: (000) 000-0000
Telecopy: (000)000-0000
All notices of scheduled payments and written confirmations of such wire
transfer should be sent to the address above. All payments by Fedwire transfer
of immediately available funds, identifying the name of the Issuer (and the
Credit, if any), the Private Placement Number preceded by "DPP" and the payment
as principal, interest or premium, in the format as follows:
BBK = Xxxxxx Trust and Savings Bank
ABA #000000000
BNF = Allstate Life Insurance Company
Collection Account #000-000-0
ORG = THC Systems, Inc.
OBI = DPP (PPN: 87252@ AA 8)
L__________(Enter Lease Number, if any)
Payment Due Date (MM/DD/YY) -
P__________(Enter "P" and amount of
principal being remitted, for example,
P5000000.00) -
I__________(Enter "I" and amount of
interest being remitted, for example,
I225000.00)
Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
000 Xxxx Xxxxxxx Xxxxxx
4th Floor, Zone 6
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
For Allstate Life Insurance Company/
Safekeeping Account No. 846627
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
0000 Xxxxxxx Xxxx, XXX X0X
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Tax ID #00-0000000
34
Schedule A-2
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
----------------------------- ---------------------
Allstate Insurance Company $7,500,000
0000 Xxxxxxx Xxxx, XXX X0X
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Investment Operations
Private Placements
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
All notices of scheduled payments and written confirmations of such wire
transfer should be sent to the address above. All payments by Fedwire transfer
of immediately available funds, identifying the name of the Issuer (and the
Credit, if any), the Private Placement Number preceded by "DPP" and the payment
as principal, interest or premium, in the format as follows:
BBK = Xxxxxx Trust and Savings Bank
ABA #000000000
BNF = Allstate Insurance Company
Collection Account #000-000-0
ORG = THC Systems, Inc.
OBI = DPP (PPN: 87252@ AA 8)
L (Enter Lease Number, if any)
----------
Payment Due Date (MM/DD/YY) -
P (Enter "P" and amount of
----------
principal being remitted, for example,
P5000000.00) -
I (Enter "I" and amount of
----------
interest being remitted, for example,
I225000.00)
Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
000 Xxxx Xxxxxxx Xxxxxx
4th Floor, Zone 6
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
For Allstate Insurance Company/
Safekeeping Account No. 846626
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
0000 Xxxxxxx Xxxx, XXX X0X
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Tax ID #00-0000000
35
Schedule A-3
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser otes to be Purchased
----------------------------- --------------------
Pacific Life Insurance Company (1) $5,000,000
000 Xxxxxxx Xxxxxx Xxxxx (2) $5,000,000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (3) $2,500,000
Attention: Securities Department
Address for all communications is as above, except notices of payment and
written confirmations of wire or inter-bank transfers. All payments are to be by
bank wire transfer of immediately available funds to:
For Payment of Principal & Interest:
Federal Reserve Bank of Boston
ABA# 0000-0000-0/BOS SAFE DEP
DDA 125261
Attn: MBS Income CC: 1253
A/C Name: Pacific Life General Account/PLCF1810132
Each wire transfer shall identify such payment as "THC Systems,
Inc., 7.49% Senior Notes due November 1, 2008."
Notices of payment and written confirmations of wire or inter-bank transfers
shall be addressed to:
Mellon Trust
Attn: Pacific Life Accounting Team
Xxx Xxxxxx Xxxx Xxxxxx
Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
And
Pacific Life Insurance Company
Attn: Securities Administration - Cash Team
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
All securities being purchased should be registered in the nominee name of "Mac
& Co" and delivered to:
Mellon Securities Trust Company
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx 212.374.1918
A/C Name: Pacific Life General Acct
A/C#: PLCF1810132
General Tax ID #: 00-0000000
36
EXHIBIT A
THC SYSTEMS, INC.
7.49% SENIOR NOTE
Due November 1, 2008
--------------------
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT AND
ACCORDINGLY ANY PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE UNPAID PRINCIPAL
AMOUNT WITH THE COMPANY.
--------------------
Registered Note No. R-____ November __, 1996
$
----------
THC SYSTEMS, INC., a New York corporation (the "Company), for value
received, hereby promises to pay to ______________________ or registered
assigns, on the first day of November, 2008, the principal amount of
_______________ Dollars ($__________) and to pay interest (computed on the basis
of a 360-day year of twelve 30-day months) on the principal amount from time to
time remaining unpaid hereon at the rate of seven and forty-nine hundredths
percent (7.49%) per annum from the date hereof until maturity, payable on the
first day of November and May in each year, commencing May 1, 1997, and at
maturity, and to pay interest on overdue principal, premium and (to the extent
legally enforceable) on any overdue installment of interest at the greater of
(a) the rate of interest publicly announced by The Chase Manhattan Bank (or its
successors or assigns) as its "prime rate" plus one percent (1%) or (b) nine and
forty-nine hundredths percent (9.49%) per annum after maturity or the due date
thereof, whether by acceleration or otherwise, until paid. Payments of the
principal of, the premium, if any, and interest on this Note shall be made in
lawful money of the United States of America in the manner and at the place
provided in Section 2.5 of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and provisions of a
Note Agreement, dated as of November 15, 1996, entered into by the Company and
Oneida Ltd. (The "Guarantor") with the Purchasers named in Schedule I thereto
(the "Note Agreement"), and this Note and any holder hereof are entitled to all
of the benefits and are bound by the terms provided for by such Note Agreement
or referred to therein. The provisions of the Note Agreement are incorporated in
this Note to the same extent as if set forth at length herein.
As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or his attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of the
taxes or other governmental charges, if any, that may be imposed in connection
therewith. The Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required to
be made hereon all in the events, on the terms and in the manner as provided in
the Note Agreement. Such prepayments include certain required prepayments on
November 1 of each year beginning November 1, 2000 and ending November 1, 2007
and certain optional prepayments with a premium.
37
Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company and the Guarantor agree to
pay, in addition to the principal, premium, if any, and interest due and payable
hereon, all reasonable costs of collecting this Note, including reasonable
attorneys' fees and expenses.
This Note and the Note Agreement are governed by and construed in
accordance with the laws of the State of Illinois.
THE SYSTEMS, INC.
By:___________________________________
Its:
38
GUARANTY ENDORSEMENT
Payment of principal, interest and premium, if any, with respect to
this Note is guaranteed pursuant to the terms of the Guaranty Agreement and
Subsidiary Guarantees dated as of November __, 1996 of, respectively, Oneida
Ltd., Camden Wire Co., Inc. and Buffalo China, Inc. Subject to the terms of such
Guaranty Agreement which terms are incorporated herein by reference, each of the
undersigned guarantees the prompt payment when due of the principal of, premium,
if any, and interest on this Note and all payments due under the Note Agreement.
ONEIDA LTD.
By:
-----------------------------------
Title:
CAMDEN WIRE CO., INC.
By:
-----------------------------------
Title:
BUFFALO CHINA, INC.
By:
-----------------------------------
Title:
39
EXHIBIT B
LEGAL OPINIONS
A. The opinion of Xxxxxxx, Carton & Xxxxxxx, special counsel for the
Purchasers, shall be to the effect that:
1. The Company is a corporation organized and validly existing in good
standing under the laws of the State of New York, with all requisite corporate
power and authority to carry on its business as now conducted, to enter into and
perform the Agreement and to issue and sell the Notes.
2. The Guarantor is a corporation organized and validly existing in
good standing under the laws of the State of New York, with all requisite
corporate power and authority to carry on its business as now conducted, to
enter into and perform the Agreement and to issue and sell the Notes.
3. The Agreement has been duly authorized by proper corporate action on
the part of the Company and the Guarantor, has been duly executed and delivered
by an authorized officer of the Company and the Guarantor and constitutes the
legal, valid and binding agreement of the Company and the Guarantor, enforceable
in accordance with its terms, except to the extent that enforcement of the
Agreement may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles, regardless of
whether enforcement is sought in a proceeding in equity or at law.
4. The Guaranty Agreement and the Subordination Agreement and the First
Amendment to the 1992 Agreement have been duly authorized by proper corporate
action on the part of the Guarantor, have been duly executed and delivered by an
authorized officer of Guarantor and constitute the legal, valid and binding
obligations of the Guarantor, enforceable in accordance with their respective
terms, except to the extent that enforcement of the Notes may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.
5. The Subsidiary Guarantees and the 1992 Subsidiary Guarantees have
been duly authorized by proper corporate action on the part of the Subsidiary
Guarantors have been duly executed and delivered by an authorized officer of
each of the Subsidiary Guarantors that are a party thereto and constitute the
legal, valid and binding obligations of the Subsidiary Guarantors, enforceable
in accordance with their respective terms, except to the extent that enforcement
of the Subsidiary Guarantors may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
6. The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed and delivered by an authorized
officer of the Company and constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
7. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes and the delivery of the Guaranty do not
require the registration of the Notes under the Securities Act of 1933, as
amended, nor the qualification of an indenture under the Trust Indenture Act of
1939, as amended.
40
8. The issuance of the Guaranty Agreement and compliance with the terms
and provisions of the Agreement and the Guaranty Agreement will not conflict
with or result in any breach of any of the provisions of the Certificate of
Incorporation or By-Laws of the Guarantor or its Subsidiaries.
9. The issuance of each of the Subsidiary Guarantees, the 1992
Subsidiary Guarantees, the Subordination Agreement and the First Amendment to
the 1992 Agreement and compliance with the terms and provisions will not
conflict with or result in any breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Guarantor or its Subsidiaries.
10. The issuance and sale of the Notes and compliance with the terms
and provisions of the Notes, the Agreement and the Subordination Agreement will
not conflict with or result in any breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Guarantor or its Subsidiaries.
The opinion of Xxxxxxx, Carton & Xxxxxxx also shall state that the opinion of
Shearman & Sterling, counsel for the Company, delivered to you pursuant to the
Agreement, is satisfactory in form and scope to Xxxxxxx, Carton & Xxxxxxx, and,
in their opinion, the Purchasers and it are justified in relying thereon and
shall cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request. Xxxxxxx, Carton & Xxxxxxx may rely, as to
matters of New York law, on the opinion of Shearman & Sterling.
B. The opinion of Shearman & Sterling, counsel for the Company, shall
cover all matters specified in clauses 1 through 6 set forth above and also
shall be to the effect that:
1. Each of the Company and the Guarantor has full corporate power and
authority to conduct the activities in which it is now engaged and own its
Property.
2. Each Subsidiary of the Guarantor is a corporation duly organized and
validly existing in good standing under the laws of its jurisdiction of
incorporation, and each has all requisite corporate power and authority to carry
on its business as now conducted and own its Property.
3. Each of the Guarantor and its Subsidiaries is duly qualified or
licensed and in good standing as a foreign corporation authorized to do business
in each jurisdiction where the nature of the business transacted by it or the
character of its Properties owned or leased makes such qualification or
licensing necessary except where failure to so qualify would not, individually
or in the aggregate, have a material adverse affect on its business, Properties,
or condition, financial or otherwise.
4. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Company of the Agreement or the lawful offering, issuance
and sale of the Notes by the Guarantor of the Agreement and the Guaranty
Agreement, and no designation, filing, declaration, registration and/or
qualification with any governmental authority is required by the Company in
connection with such offer, issuance and sale.
5. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Guarantor of the Agreement or the Guaranty Agreement or the
Subordination Agreement or the First Amendment to the 1992 Agreement and no
designation, filing, declaration, registration and/or qualification with any
governmental authority is required by the Guarantor in connection with such
execution and delivery.
6. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Subsidiary Guarantors of the Subsidiary Guarantees or the
1992 Subsidiary Guarantees or the Subordination Agreement and no designation,
filing, declaration, registration and/or qualification with any governmental
authority is required by the Subsidiary Guarantors in connection with such
execution and delivery.
7. The (i) issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Agreement and (ii) the execution, delivery
and performance by the Guarantor of the Agreement,
41
the Guaranty Agreement, the Subordination Agreement and the First Amendment to
the 1992 Agreement, and (iii) the execution, delivery and performance by the
Subsidiary Guarantors of the Subsidiary Guarantees and the Subordination
Agreement will not conflict with, or result in any breach or violation of any of
the provisions of, or constitute a default under, or result in the creation of
any Lien on the Property of the Company or the Guarantor or any Subsidiary
pursuant to, (i) the provisions of the Certificate of Incorporation or other
charter document or by-laws of the Company or the Guarantor or any Subsidiary or
any loan agreement under which the Company or the Guarantor or any Subsidiary is
bound, or other agreement or instrument known to such counsel (after due
inquiry) to which the Company or the Guarantor or any Subsidiary is a party or
by which any of them or their Property is bound or (ii) any New York law
(including usury laws) or regulation, order, writ, injunction or decree of any
court or governmental authority applicable to the Company or the Guarantor known
to such counsel.
8. There are no actions, suits or proceedings pending or, to the best
of such counsel's knowledge after due inquiry, threatened against, or affecting
the Guarantor or its Subsidiaries, at law or in equity or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which are likely to
result, either individually or in the aggregate, in any material adverse change
in the business, Properties, operations or condition, financial or otherwise, of
the Guarantor and its Subsidiaries taken as a whole.
9. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and, to the knowledge of such counsel, are owned by the Guarantor free and clear
of any Lien.
10. The issuance of the Notes and the use of the proceeds of the sale
of the Notes do not violate or conflict with Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
11. Neither the Guarantor nor any Subsidiary is: (i) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended,
or (ii) a "public utility" as defined in the Federal Power Act, as amended, or
(iii) an "investment company" or an "affiliated person" thereof or an
"affiliated person" of any such "affiliated person," as such terms are defined
in the Investment Company Act of 1940, as amended.
The opinion of Shearman & Sterling shall cover such other matters relating to
the sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Guarantor and with respect to matters governed by the laws of any jurisdiction
other than the United States of America and the State of New York, such counsel
may rely upon the opinions of counsel deemed (and stated in their opinion to be
deemed) by them to be competent and reliable.
42
================================================================================
EXHIBIT C
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of November 26, 1996 (the
"Guaranty"), is made and given by ONEIDA LTD., a New York corporation (the
"Guarantor"), in favor of Allstate Life Insurance Company, Allstate Insurance
Company and Pacific Mutual Life Insurance Company (and their respective
successors, assignees or transferees) (the "Purchasers").
RECITALS
A. THC Systems, Inc., a New York corporation (the "Issuer"), and the
Purchasers have entered into a Note Agreement dated as of November 15, 1996 (as
the same may hereafter be amended, restated, or otherwise modified from time to
time, the "Agreement") pursuant to which the Purchasers have agreed to purchase
from the Issuer Senior Notes due November 1, 2008 in the principal amount of
$35,000,000 (the "Notes").
B. It is a condition precedent to the obligation of the Purchasers to
purchase the Notes pursuant to the terms of the Agreement that this Guaranty be
executed and delivered by the Guarantor.
C. The Guarantor expects to derive benefits from the consummation of
the purchase of the Notes and finds it advantageous, desirable and in its best
interests to execute and deliver this Guaranty to the Purchasers.
NOW, THEREFORE, in consideration of the purchase of the Notes and for
other good and valuable consideration, the Guarantor hereby covenants and agrees
with the Purchasers as follows:
Section 1. Defined Terms. As used in this Guaranty, the following terms
shall have the meaning indicated:
"Obligations" shall mean all indebtedness, liabilities and obligations
of the Issuer to the Purchasers of every kind, nature or description
under the Agreement and the Notes.
"Person" shall mean any individual, limited liability company,
corporation, partnership, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or
political subdivision or any other entity, whether acting in an
individual, fiduciary or other capacity.
Section 2. The Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees to the Purchasers the payment when due (whether at a
stated maturity or earlier by reason of acceleration or otherwise) and
performance of the Obligations.
Section 3. Guaranty Absolute. The Guarantor acknowledges and agrees
that Obligations may be created and continued in any amount, without affecting
or impairing the liability of the Guarantor hereunder, and the Purchasers may
pay (or allow for the payment of) Obligations out of any sums received by or
available to the Purchasers on account of Obligations from the Issuer or any
other Person (except the Guarantor), from the properties of the Issuer or such
other Persons, out of collateral security or from any other source, and such
payment (or allowance) shall not reduce, affect or impair the liability of the
Guarantor hereunder. The liability of the Guarantor shall be a continuing
liability and shall not be affected by (nor shall anything herein contained be
deemed a limitation upon) the amount of credit which may be extended to the
Issuer, the number of transactions with the Issuer, repayments by the Issuer, or
the allocation by the Purchasers of repayments by the Issuer, it being the
understanding of the Guarantor that the Guarantor's liability shall continue
hereunder so long as there are any Obligations outstanding. Any payment made by
the Guarantor hereunder shall be effective to reduce or discharge such liability
only if accompanied by a written transmittal document, received by the
Purchasers, advising the Purchasers that such payment is made under this
Guaranty for such purpose.
43
Section 4. Continuing Guaranty. This Guaranty is an absolute,
unconditional, complete and continuing guaranty of payment and performance of
the Obligations, and the obligations of the Guarantor hereunder shall not be
released, in whole or in part, by any action or thing which might, but for this
provision of this Guaranty, be deemed a legal or equitable discharge of a surety
or guarantor, other than irrevocable payment and performance in full of the
Obligations. No notice of the Obligations to which this Guaranty may apply, or
of any renewal or extension thereof need be given to the Guarantor and none of
the foregoing acts shall release the Guarantor from liability hereunder. The
Guarantor hereby expressly waives (a) demand of payment, presentment, protest,
notice of dishonor, nonpayment or nonperformance on any and all forms of the
Obligations; (b) notice of acceptance of this Guaranty and notice of any
liability to which it may apply; (c) all other notices and demands of any kind
and description relating to the Obligations now or hereafter provided for by any
agreement, statute, law, rule or regulation; and (d) any and all defenses of the
Issuer pertaining to the Obligations except for the defense of discharge by
payment. The Guarantor shall not be exonerated with respect to the Guarantor's
liabilities under this Guaranty by any act or thing except irrevocable payment
and performance of the Obligations, it being the purpose and intent of this
Guaranty that the Obligations constitute the direct and primary obligations of
the Guarantor and that the covenants, agreements and all obligations of the
Guarantor hereunder be absolute, unconditional and irrevocable. The Guarantor
shall be and remain liable for any deficiency remaining after foreclosure of any
mortgage, deed of trust or security agreement securing all or any part of the
Obligations, whether or not the liability of the Issuer or any other Person for
such deficiency is discharged pursuant to statute, judicial decision or
otherwise. The acceptance of this Guaranty by the Purchasers is not intended to,
and does not release any liability previously existing of any other guarantor or
surety of any indebtedness of the Issuer to the Purchasers.
Section 5. Other Transactions. Each of the Purchasers is expressly
authorized (a) to exchange, surrender or release with or without consideration
any or all collateral and security which may at any time be placed with them or
their agent by the Issuer or by any other Person, or to forward or deliver any
or all such collateral and security directly to the Issuer for collection and
remittance or for credit, or to collect the same in any other manner without
notice to the Guarantor, and (b) to amend, modify, extend or supplement the
Agreement, the Notes or other instrument evidencing the Obligations or any part
thereof and any other agreement with respect to the Obligations, waive
compliance by the Issuer or any other Person with the respective terms thereof
and settle or compromise any of the Obligations without notice to the Guarantor
and without in any manner affecting the absolute liabilities of the Guarantor
hereunder. No invalidity, irregularity or unenforceability of all or any part of
the Obligations or of any security therefor or other recourse with respect
thereto shall affect, impair or be a defense to this Guaranty. The liabilities
of the Guarantor hereunder shall not be affected or impaired by any failure,
delay, neglect or omission on the part of the Purchasers to realize upon any of
the Obligations, or upon any collateral or security for any or all of the
Obligations, nor by the taking by the Purchasers of (or the failure to take) any
other guaranty or guaranties to secure the Obligations, nor by the taking by the
Purchasers of (or the failure to take or the failure to perfect its security
interest in or other Lien on) collateral or security of any kind. No act or
omission of the Purchasers, whether or not such action or failure to act varies
or increases the risk of, or affects the rights or remedies of the Guarantor,
shall affect or impair the obligations of the Guarantor hereunder. The Guarantor
acknowledges that this Guaranty is in effect and binding without reference to
whether this Guaranty is signed by any other Person or Persons, that possession
of this Guaranty by the Purchasers shall be conclusive evidence of due delivery
hereof by the Guarantor and that this Guaranty shall continue in full force and
effect, both as to the Obligations then existing and/or thereafter created,
notwithstanding the release of or extension of time to any other guarantor of
the Obligations or any part thereof.
Section 6. Actions Not Required. The Guarantor hereby waives any and
all right to cause a marshaling of the assets of the Issuer or any other action
by any court or other governmental body with respect thereto or to cause the
Purchasers to proceed against any security for the Obligations or any other
recourse which the Purchasers may have with respect thereto and further waives
any and all requirements that any Purchaser institutes any action or proceeding
at law or in equity, or obtain any judgment, against the Issuer or any other
Person, or with respect to any collateral security for the Obligations, as a
condition precedent to making demand on or bringing an action or obtaining
and/or enforcing a judgment against, the Guarantor upon this Guaranty. The
Guarantor further acknowledges that time is of the essence with respect to the
Guarantor's obligations under this Guaranty. Any remedy or right hereby granted
which shall be found to be unenforceable as to any Person or under any
circumstance, for any reason, shall in no way limit or prevent the enforcement
of such remedy or right as to any other
44
Person or circumstance, nor shall such unenforceability limit or prevent
enforcement of any other remedy or right hereby granted.
Section 7. No Subrogation. Notwithstanding any payment or payments made
by the Guarantor hereunder or any setoff or application of funds of the
Guarantor by the Purchasers, the Guarantor shall not be entitled to be
subrogated to any of the rights of the Purchasers against the Issuer or any
other guarantor or any collateral security or guaranty or right of offset held
by the Purchasers for the payment of the Obligations, nor shall the Guarantor
seek or be entitled to seek any contribution or reimbursement from the Issuer or
any other guarantor in respect of payments made by the Guarantor hereunder.
Section 8. Application of Payments. Any and all payments upon the
Obligations made by the Guarantor or by any other Person, and/or the proceeds of
any or all collateral or security for any of the Obligations, may be applied by
the Purchasers on such items of the Obligations as the Purchasers may elect.
Section 9. Recovery of Payment. If any payment received by the
Purchasers and applied to the Obligations is subsequently set aside, recovered,
rescinded or required to be returned for any reason (including, without
limitation, the bankruptcy, insolvency or reorganization of the Issuer or any
other obligor), the Obligations to which such payment was applied shall for the
purposes of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such Obligations as fully as if such application had never been made. References
in this Guaranty to amounts "irrevocably paid" or to "irrevocable payment" refer
to payments that cannot be set aside, recovered, rescinded or required to be
returned for any reason.
Section 10. Issuers' Financial Condition. The Guarantor is familiar
with the financial condition of the Issuer, and the Guarantor has executed and
delivered this Guaranty based on the Guarantor's own judgment and not in
reliance upon any statement or representation of the Purchasers. The Purchasers
shall have no obligation to provide the Guarantor with any advice whatsoever or
to inform the Guarantor at any time of the Purchasers' actions, evaluations or
conclusions on the financial condition or any other matter concerning the
Issuer.
Section 11. Remedies. All remedies afforded to the Purchasers by reason
of this Guaranty are separate and cumulative remedies and it is agreed that no
one of such remedies, whether or not exercised by the Purchasers, shall be
deemed to be in exclusion of any of the other remedies available to the
Purchasers and shall in no way limit or prejudice any other legal or equitable
remedy which the Purchasers may have hereunder and with respect to the
Obligations. Mere delay or failure to act shall not preclude the exercise or
enforcement of any rights and remedies available to the Purchasers.
Section 12. Bankruptcy of the Issuer. The Guarantor expressly agrees
that the liabilities and obligations of the Guarantor under this Guaranty shall
not in any way be impaired or otherwise affected by the institution by or
against the Issuer or any other Person of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar
proceedings for relief under any bankruptcy law or similar law for the relief of
debtors and that any discharge of any of the Obligations pursuant to any such
bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of the Guarantor under this
Guaranty, and that upon the institution of any of the above actions, such
obligations shall be enforceable against the Guarantor.
Section 13. Costs and Expenses. The Guarantor will pay or reimburse the
Purchasers on demand for all out-of-pocket expenses (including in each case all
reasonable fees and expenses of counsel) incurred by the Purchasers arising out
of or in connection with the enforcement of this Guaranty against the Guarantor
or arising out of or in connection with any failure of the Guarantor to fully
and timely perform the obligations of the Guarantor hereunder.
Section 14. Waivers and Amendments. This Guaranty can be waived,
modified, amended, terminated or discharged only explicitly in a writing signed
by the Purchasers. A waiver so signed shall be effective only in the specific
instance and for the specific purpose given.
45
Section 15. Notices. Any notice or other communication to any party in
connection with this Guaranty shall be in writing and shall be sent by manual
delivery, facsimile transmission (with a confirming copy sent by United States
mail (postage prepaid)), overnight courier or United States mail (postage
prepaid) addressed to such party at the address specified on the signature page
hereof, or at such other address as such party shall have specified to the other
party hereto in writing. All periods of notice shall be measured from the date
of delivery thereof if manually delivered, from the date of sending thereof if
sent by facsimile transmission, from the first business day after the date of
sending if sent by overnight courier, or from four days after the date of
mailing if mailed.
Section 16. Guarantor Acknowledgments. The Guarantor hereby
acknowledges that (a) counsel has advised the Guarantor in the negotiation,
execution and delivery of this Guaranty, (b) the Purchasers have no fiduciary
relationship to the Guarantor, the relationship being solely that of debtor and
creditor, and (c) no joint venture exists between the Guarantor and the
Purchasers.
Section 17. Representations and Warranties. The Guarantor hereby
represents and warrants to the Purchasers that:
(a) The Guarantor is a corporation duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has the corporate power and authority and the legal right to own and operate its
properties and to conduct the business in which it is currently engaged.
(b) The Guarantor has the corporate power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Guaranty and has taken all necessary corporate action to authorize such
execution, delivery and performance.
(c) This Guaranty constitutes its legal, valid and binding obligation
enforceable in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
(d) The execution, delivery and performance of this Guaranty will not
(i) violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to
the Guarantor, (ii) violate or contravene any provision of its Articles of
Incorporation or bylaws, or (iii) result in a breach of or constitute a default
under any indenture, loan or credit agreement or any other agreement, lease or
instrument to which it is a party or by which it or any of its properties may be
bound or result in the creation of any lien thereunder. The Guarantor is not in
default under or in violation of any such law, statute, rule or regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, loan or credit agreement or other agreement, lease or instrument in
any case in which the consequences of such default or violation could have a
material adverse effect on its business, operations, properties, assets or
condition (financial or otherwise).
(e) No order, consent, approval, license, authorization or validation
of, or filing recording or registration with, or exemption by, any governmental
or public body or authority is required on the part of the Guarantor to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
this Guaranty.
(f) There are no actions, suits or proceedings pending or, to the
knowledge of the Guarantor, threatened against or affecting it or any of its
properties before any court or arbitrator, or any governmental department,
board, agency or other instrumentality which, if determined adversely to the
Guarantor, would have a material adverse effect on its business, operations,
property or condition (financial or otherwise) or on its ability to perform its
obligations hereunder.
(g) The Guarantor expects to derive benefits from the transactions
resulting in the creation of the Obligations. The Purchasers may rely
conclusively on the continuing warranty, hereby made, that the Guarantor
continues to be benefited by the Purchasers' extension of credit accommodations
to the Issuer and the Purchasers
46
shall have no duty to inquire into or confirm the receipt of any such benefits,
and this Guaranty shall be effective and enforceable by the Purchasers without
regard to the receipt, nature or value of any such benefits.
Section 18. Covenants. Until such time that the Obligations are paid in
full, unless the Purchasers shall otherwise consent in writing:
(a) Corporate Existence. The Guarantor will maintain its corporate
existence in good standing under the laws of its jurisdiction of incorporation
and its qualification to transact business in each jurisdiction where failure so
to qualify would permanently preclude the Guarantor from enforcing its rights
with respect to any material asset or would expose such the Guarantor to any
material liability.
(b) Insurance. The Guarantor shall maintain with financially sound and
reputable insurance companies such insurance as may be required by law and such
other insurance in such amounts and against such hazards as is customary in the
case of reputable firms engaged in the same or similar business and similarly
situated.
(c) Payment of Taxes and Claims. The Guarantor shall file all tax
returns and reports which are required by law to be filed by it and will pay
before they become delinquent all taxes, assessments and governmental charges
and levies imposed upon it or its property and all claims or demands of any kind
(including but not limited to those of suppliers, mechanics, carriers,
warehouses, landlords and other like Persons) which, if unpaid, might result in
the creation of a lien upon its property; provided that the foregoing items need
not be paid if they are being contested in good faith by appropriate
proceedings, and as long as the Guarantor's title to its property is not
materially adversely affected, its use of such property in the ordinary course
of its business is not materially interfered with and adequate reserves with
respect thereto have been set aside on the Guarantor's books in accordance with
GAAP.
(d) Inspection. The Guarantor shall permit any Person designated by the
Purchasers to visit and inspect any of the properties, corporate books and
financial records of the Guarantor, to examine and to make copies of the books
of accounts and other financial records of the Guarantor, and to discuss the
affairs, finances and accounts of the Guarantor with, and to be advised as to
the same by, its officers at such reasonable times and intervals as the
Purchasers may designate.
(e) Maintenance of Properties. The Guarantor will maintain its
properties used or useful in the conduct of its business in good condition,
repair and working order, and supplied with all necessary equipment, and make
all necessary repairs, renewals, replacements, betterments and improvements
thereto, all as may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
(f) Books and Records. The Guarantor will keep adequate and proper
records and books of account in which full and correct entries will be made of
its dealings, business and affairs.
(g) Compliance. The Guarantor will comply in all material respects with
all laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, provided, however, that failure so to comply
shall not be a breach of this covenant if such failure does not have, or is not
reasonably expected to have, a materially adverse effect on the properties,
business, prospects or condition (financial or otherwise) of the Guarantor and
the Guarantor is acting in good faith and with reasonable dispatch to cure such
noncompliance.
(h) Environmental Matters; Reporting. The Guarantor will observe and
comply with, all laws, rules, regulations and orders of any government or
government agency relating to health, safety, pollution, hazardous materials or
other environmental matters to the extent non-compliance could result in a
material adverse effect on the Guarantor. The Guarantor will give the Purchasers
prompt written notice of any violation as to any environmental matter by the
Guarantor and of the commencement of any judicial or administrative proceeding
relating to health, safety or environmental matters (a) in which an adverse
determination or result could result in the revocation of or have a material
adverse effect on any operating permits, air emission permits, water discharge
permits, hazardous waste permits or other permits held by the Guarantor which
are material to the operations of such Guarantor, or (b) which will or threatens
to impose a material liability on such Guarantor to any Person or which will
require a material expenditure by the Guarantor to cure any alleged problem or
violation.
47
(i) Merger. The Guarantor will not merge or consolidate or enter into
any analogous reorganization or transaction with any Person or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution) provided,
however, the Guarantor may be merged with or liquidated into another Person in
accordance with the terms of the Agreement.
(j) Sale of Assets. The Guarantor will not sell, transfer, lease or
otherwise convey all or any substantial part of its assets except for sales and
leases of inventory in the ordinary course of business and except for sales or
other transfers permitted by the terms of the Agreement.
(k) Negative Pledge. The Guarantor will not enter into any agreement,
bond, note or other instrument with or for the benefit of any Person other than
the Purchasers and the banks which are lenders to the Guarantor pursuant to that
Credit Agreement dated as of January 19, 1996 which would prohibit the Guarantor
from granting, or otherwise limit the ability of the Guarantor to grant to the
Purchasers a Lien on any assets or properties of the Guarantor.
Section 19. Continuing Guaranty; Assignments under Agreement. This
Guaranty shall (a) remain in full force and effect until irrevocable payment in
full of the Obligations, (b) be binding upon the Guarantor, its successors and
assigns and (c) inure to the benefit of, and be enforceable by, the Purchasers
and its respective successors, transferees, and assigns. Without limiting the
generality of the foregoing clause (c), the Purchasers may sell, assign or
otherwise transfer all or any portion of its rights and obligations under the
Agreement to any other Persons to the extent and in the manner provided in the
Agreement and may similarly transfer all or any portion of its rights under this
Guaranty to such Persons.
Section 20. Revocation. Notwithstanding any other provision hereof, the
Guarantor may revoke this Guaranty prospectively as to future transactions by
written notice to that effect actually received by the Purchasers. No such
revocation shall release, impair or affect in any manner any liability hereunder
with respect to Obligations created, contracted, assumed or incurred prior to
receipt by the Purchasers of written notice of revocation, or Obligations
created, contracted, assumed or incurred after receipt of such notice pursuant
to any contract entered into by the Purchasers prior to receipt of such notice,
or any renewals or extensions thereof, theretofore or thereafter made, or all
other costs, expenses and attorneys' fees arising from such Obligations.
Section 21. Governing Law and Construction. THE VALIDITY, CONSTRUCTION
AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF ILLINOIS, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Whenever possible, each provision of this Guaranty and any other statement,
instrument or transaction contemplated hereby or relating hereto shall be
interpreted in such manner as to be effective and valid under such applicable
law, but, if any provision of this Guaranty or any other statement, instrument
or transaction contemplated hereby or relating hereto shall be held to be
prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Guaranty or any other statement, instrument or transaction contemplated hereby
or relating hereto.
Section 22. Consent to Jurisdiction. AT THE OPTION OF THE PURCHASERS,
THIS GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR ILLINOIS STATE COURT
SITTING IN CHICAGO, ILLINOIS; AND THE GUARANTOR CONSENTS TO THE JURISDICTION AND
VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IN THE EVENT THE GUARANTOR COMMENCES ANY ACTION IN ANOTHER
JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR
INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS GUARANTY, THE PURCHASERS AT
THEIR OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
48
Section 23. Counterparts. This Guaranty may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
Section 24. General. All representations and warranties contained in
this Guaranty or in any other agreement between the Guarantor and the Purchasers
shall survive the execution, delivery and performance of this Guaranty and the
creation and payment of the Obligations. Captions in this Guaranty are for
reference and convenience only and shall not affect the interpretation or
meaning of any provision of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the
date first above written.
ONEIDA LTD.
By
-------------------------------------
Title
----------------------------------
Address for the Purchasers: Address for the Guarantor:
Allstate Life Insurance Company Oneida Ltd.
Private Placements Department 000 Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxx, X0X Xxxxxx, Xxx Xxxx 00000
Xxxxxxxxxx, XX 00000-0000
Allstate Insurance Company
Private Placements Department
0000 Xxxxxxx Xxxx, X0X
Xxxxxxxxxx, XX 00000-0000
Pacific Mutual Life Insurance Company
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
49
EXHIBIT D
SUBSIDIARY GUARANTEE AGREEMENT
This Subsidiary Guarantee Agreement, dated as of June 2, 2000, is
executed by BUFFALO CHINA, INC, ENCORE PROMOTIONS, INC., and THC SYSTEMS INC.,
each a New York corporation (individually, a "Guarantor" and, collectively, the
"Guarantors"), for the benefit of the Persons that now are or at any time
hereinafter become party as a Lender to the Credit Agreement referred to below
(the "Lenders"), The Chase Manhattan Bank, as Administrative Agent under the
Credit Agreement (in such capacity the "Administrative Agent"), and all other
present and future holders of any of the Guaranteed Obligations described herein
(all such Persons, collectively, including the Lenders and the Administrative
Agent, referred to as the "Beneficiaries").
RECITALS
A. Guarantor is a wholly owned subsidiary of Oneida Ltd., a New York
corporation (the "Borrower"). Borrower has requested that credit be extended to
the Borrower on terms and conditions set forth in the Credit Agreement referred
to below.
B. To induce the Lenders and Administrative Agent to enter into the
Credit Agreement and the other Loan Documents, and in consideration thereof and
of any and all credit at any time extended thereunder, Guarantor has offered to
enter into this Subsidiary Guarantee Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees for the benefit of each of the
Beneficiaries as follows:
1. Definitions.
1.1 The following capitalized terms shall have the meanings set forth
below for purposes of this Agreement:
"Credit Agreement" means the Credit Agreement dated as of the date
hereof between Borrower, the Lenders and the Administrative Agent, as the same
may hereafter be amended, modified, extended or restated from time to time.
"Discharge of the Guaranteed Obligations" means that all Commitments of
the Lenders to extend credit under the Credit Agreement have irrevocably expired
or been terminated and all Guaranteed Obligations have been fully, finally and
indefeasibly paid in cash.
"Guaranteed Obligations" means all debts, liabilities and obligations
of Borrower, whether now existing or hereafter incurred at any time or times,
direct or indirect, absolute or contingent, secured or unsecured, arising under
the Credit Agreement or any of the other Loan Documents, including without
limitation all principal, interest, premiums, commitment fees, up-front fees,
agency fees, legal fees or other fees and charges payable to the Beneficiaries
by the Borrower, and all late charges, penalties and reasonable expenses of
collection or enforcement or attempted collection or enforcement thereof,
including reasonable fees and disbursements of legal counsel in connection
therewith, whether within or apart from any legal action or proceeding.
"Loan Documents" means the Credit Agreement and any other agreement,
document or instrument executed by the Borrower or any other Person, delivered
to the Administrative Agent or any of the Lenders, and pertaining to any
Guaranteed Obligations, as the same may hereafter be amended, modified, extended
or restated from time to time.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
a Guarantor, (b) the ability of a Guarantor to perform any of its obligations
under this Agreement, or (c) the rights or benefits available to the
Beneficiaries under this Agreement.
50
1.2 Other capitalized terms used herein which are not otherwise defined
herein shall have the meanings given to such terms in the Credit Agreement.
1.3 The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, and (d) all references herein to Sections, shall be construed
to refer to Sections of this Agreement.
2. Guarantee.
2.1 Each Guarantor, jointly and severally, hereby absolutely,
unconditionally and irrevocably guarantees to each of the Beneficiaries the
payment in full when due, by acceleration or otherwise, of all Guaranteed
Obligations. If an Event of Default occurs and notice of demand for payment
under this Agreement is given by the Administrative Agent or the Required
Lenders to Guarantors, all liability of Guarantors under this Agreement shall
become due and payable, without further notice or demand.
2.2 This Agreement constitutes a guarantee of payment and not merely a
guarantee of collection. The Beneficiaries shall not be required to commence any
action or proceeding to foreclose any security for the payment of the Guaranteed
Obligations or to pursue or exhaust any remedies against the Borrower prior to
the effectiveness of the Guarantors' obligation to pay the full amount of the
Guaranteed Obligations.
2.3 This Agreement is a continuing guarantee and shall remain in full
force and effect in respect of the Guarantors until the Discharge of the
Guaranteed Obligations.
2.4 The Guarantors' liability hereunder is in addition to and
independent of any other liabilities which the Guarantors have incurred or
assumed, or may hereafter incur or assume, by way of endorsement, separate
guarantee agreement, or in any other manner, with respect to all or any part of
the Guaranteed Obligations. This Agreement does not supersede nor limit any such
other liabilities of the Guarantors, and the Beneficiaries' rights and remedies
under and pursuant to this Agreement and any such other liabilities are
cumulative and may be exercised singly or concurrently.
3. Representation and Warranties.
The Guarantors jointly and severally represent and warrant that:
3.1 Each Guarantor (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority and all licenses, permits and other approvals of
any Governmental Authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to so qualify or be in good standing
could not, individually or in the aggregate, have a Material Adverse Effect, and
(d) is in compliance with all applicable laws, rules and regulations except to
the extent that the failure to comply therewith could not, individually or in
the aggregate, have a Material Adverse Effect.
3.2 Each Guarantor has the corporate power and authority to
make, deliver and perform this Agreement and all other Loan Documents to which
it is a party, and has taken all necessary corporate action to
51
undertake and pay and perform all of its liabilities and obligations hereunder
and has taken all necessary corporate action to authorize the execution,
delivery, payment and performance hereof and thereof on the terms and conditions
set forth herein and therein. No consent, approval or authorization of, filing
with, notice to or other act by any Governmental Authority or any other Person
is required by any Guarantor in connection with the execution, delivery and
performance of this Agreement.
3.3 This Agreement has been duly executed and delivered on behalf of
each Guarantor. This Agreement constitutes a legal, valid and binding obligation
of each Guarantor enforceable against it in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether enforcement is sought in equity or at law).
3.4 The execution, delivery and performance of this Agreement and other
Loan Documents to which each Guarantor is a party will not violate any law, rule
or regulation or any indenture, agreement or other instrument to which a
Guarantor is a party or by which it or any of its property is bound and will not
result in the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such law, rule or regulation or any such indenture,
agreement or other instrument.
3.5 After giving effect to the liability incurred by it under this
Agreement and the rights granted to it in Section 5 (including Guarantors'
ability to realize upon the rights granted to it under Section 5), (a) the fair
value of the assets of each Guarantor, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of each Guarantor will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Guarantor, on a going
concern basis, will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Guarantor will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following such date. If,
notwithstanding the foregoing, enforcement of the liability of any Guarantor
under this Agreement for the full amount of the Guaranteed Obligations would be
an unlawful or voidable transfer under any applicable fraudulent conveyance or
fraudulent transfer law or any comparable law, then the liability of such
Guarantor hereunder shall be reduced to the highest amount for which such
liability may then be enforced without giving rise to an unlawful or voidable
transfer under any such law.
4. Guarantee Absolute.
4.1 The obligations of the Guarantors hereunder are absolute,
unconditional and irrevocable and shall not be subject to any counterclaim,
setoff, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense.
4.2 The Beneficiaries may at any time and from time to time without the
consent of or notice of any kind to the Guarantors, and without regard to any
demands or requests by the Guarantors, take any of the following acts, upon or
without any terms or conditions and in whole or in part, without thereby
incurring any liability to the Guarantors, impairing the Guarantors' obligations
under this Agreement or releasing the Guarantors from this Agreement:
(a) change the rate of interest, penalties, manner, place or
terms of payment, change or extend the time of payment of the Guaranteed
Obligations, or renew, amend, alter or revoke any commitment, condition,
covenant, Event of Default or other provision with respect to any of the
Guaranteed Obligations, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and this Agreement shall apply to
such Guaranteed Obligations as so changed, extended, renewed, amended or
altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof;
52
(c) waive, consent, extend, grant indulgence, compromise,
release, discharge or exercise or refrain from exercising any right, remedy,
power or privilege under or in respect of the Loan Documents or the Borrower or
any other party directly or indirectly liable upon the Guaranteed Obligations;
(d) settle or compromise any Guaranteed Obligations, any
security therefor, or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and subordinate the payment
of all or any part thereof to the payment of any liability (whether due or not)
of Borrower to creditors of Borrower;
(e) apply any sum by whomsoever paid or howsoever realized to
such debts, liabilities, obligations, interest, or expenses of collection owing
by Borrower or the Guarantor to the Beneficiaries and in such order as the
Beneficiaries may elect pursuant to any right of the Beneficiaries, whether
guaranteed hereby or not, without regard to any rights of the Guarantor in
respect to the application thereof, and regardless of what Guaranteed
Obligations or other liability hereunder or portion thereof remains unpaid;
(f) omit to collect or enforce any collateral security or
other guarantees held by the Beneficiaries without regard to any demand or
request by the Guarantor; or
(g) fail or omit to perfect any security interest in any
collateral for the payment of the Guaranteed Obligations.
4.3 This Agreement shall remain in full force and effect without regard
to, and shall not be released, discharged or in any way affected by, any of the
following circumstances or conditions whatsoever:
(a) any failure, omission or delay on the part of the
Beneficiaries to comply with any term of the Loan Documents or any other
agreement or instrument applicable to any of the parties to the Loan Documents;
(b) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding with respect to the
Borrower or the Guarantors or any of their respective properties or any action
taken by any trustee or receiver or by any court in any such proceeding; and
(c) any limitation on the liability or obligations of the
Borrower or any other Person under the Loan Documents or any other Person
referred to therein, or any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of the Loan
Documents other than by reason of a Discharge of the Guaranteed Obligations.
4.4 Each Guarantor expressly waives any and all right to notice from
the Beneficiaries, the Borrower or any other Person of:
(a) any notice of any adverse change in the Borrower's
financial condition or of any other fact which might increase the Guarantor's
risk;
(b) all notices that may be required by statute, rule of law
or otherwise, now or hereafter in effect, to preserve intact any rights against
the Guarantor, including without limitation, any demand, presentment and
protest, proof of notice of nonpayment under the Loan Documents and notice of
default or any failure on the part of Borrower or any other Person, to perform
and comply with any covenant, agreement, term or condition of the Loan
Documents;
(c) any notice of any assignment, sale, transfer,
participation or other disposition of any right, title or interest in the Loan
Documents by the Beneficiaries;
(d) any requirement of diligence on the part of the
Beneficiaries or any other Person;
53
(e) any requirement to exhaust any remedies or to mitigate the
damages resulting from any Default under the Loan Documents; and
(f) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety, or that might otherwise limit recourse against the Guarantor.
4.5 If claim is ever made upon a Beneficiary for repayment or recovery
of any amount or amounts received by the Beneficiary in payment or on account of
any of the Guaranteed Obligations, and such Beneficiary repays all or part of
said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over the Beneficiary or any of the
Beneficiary's property, or (b) any settlement or compromise of any such claim
effected by the Beneficiary with any such claimant (including Borrower), then
and in such event the Guarantors agree that any such judgment, decree, order,
settlement or compromise shall be binding upon the Guarantors, and
notwithstanding any termination hereof or the cancellation of any Guaranteed
Obligations, the Guarantors shall be and remain liable to such Beneficiary
hereunder for the amounts so repaid or recovered to the same extent as if such
amount had never originally been received by the Beneficiary.
5. Reimbursement and Contribution Rights
5.1 Each Guarantor reserves the right to claim reimbursement from the
Borrower for the entire amount of any payment made by such Guarantor on account
of Guaranteed Obligations pursuant to this Agreement, but such Guarantor agrees
that its claim for reimbursement shall not arise until, and is subject in all
respects to, Discharge of the Guaranteed Obligations. Accordingly, each
Guarantor agrees not to assert, xxx upon, collect or otherwise enforce against
the Borrower (by set-off or otherwise) any claim for reimbursement on account of
any payment made by a Guarantor hereunder until Discharge of the Guaranteed
Obligations.
5.2 Each Guarantor agrees that if the Borrower at any time fails to pay
any reimbursement due to a Guarantor as contemplated in subsection 5.1 and such
failure continues for a period of 60 days after Discharge of the Guaranteed
Obligations, then if and to the extent any such unreimbursed payment due to such
Guarantor under this Agreement is such that the Aggregate Unreimbursed Payments
of such Guarantor are greater than its Fair Share of the Aggregate Unreimbursed
Payments of All Guarantors, the Guarantor shall be entitled to a contribution
from each other guarantor in the amount necessary to cause Guarantor's Aggregate
Unreimbursed Payments to equal its Fair Share. For these purposes:
(i) "Fair Share" means an amount equal to (i) the ratio of (x)
the Adjusted Maximum Amount of a Guarantor to (y) the Adjusted Maximum Amounts
of All Guarantors, multiplied by (ii) the Aggregate Unreimbursed Payments of All
Guarantors.
(ii) "Adjusted Maximum Amount" means the maximum aggregate
amount of the liability of a Guarantor under this Subsidiary Guarantee Agreement
limited to the extent required under subsection 3.5 (except that, for purposes
solely of this calculation, any assets or liabilities arising by virtue of any
rights to or obligations of reimbursement or contribution under this subsection
5.2 shall not be counted as assets or liabilities of such Guarantor).
(iii) "Aggregate Unreimbursed Payments" means, with respect to
a Person as of any date of determination, the aggregate net amount of all
payments made on or before such date by such Person under this Subsidiary
Guarantee Agreement or any other written instrument providing for the guarantee
of the Guaranteed Obligations for which reimbursement by the Borrower to such
Person is then due and payable as contemplated in subsection 5.1 but has not
been paid.
(iv) "All Guarantors" means the Guarantors under this
Agreement and any other Person who has entered into a written instrument
agreeing to guarantee the Guaranteed Obligations.
The allocation and right of contribution among the Guarantors set forth in this
subsection 5.2 shall not in any respect limit the Guarantors' liability under
this Subsidiary Guarantee Agreement to the Beneficiaries.
54
5.3 Guarantors hereby waive, release and discharge, absolutely,
unconditionally, irrevocably and forever, all rights of recourse, reimbursement,
contribution or indemnity and all other claims that Guarantors might otherwise
have or acquire against Borrower or any other Person liable for the payment of
any of the Guaranteed Obligations (including, without limitation, the owner of
any interest in collateral subject to a Lien securing any of the Guaranteed
Obligations) and all rights of subrogation that Guarantors might otherwise have
or acquire against any Beneficiary by reason of any payment made by Guarantors
under this Agreement or otherwise as a result of or in connection with this
Agreement, whether such rights or claims are conferred by agreement, implied or
created by law or otherwise, except only the reimbursement rights reserved by
Guarantors in subsection 5.1 and the contribution rights granted to Guarantors
under subsection 5.2.
6. Setoff. In the event that any amount becomes due and payable
hereunder and the Beneficiaries shall have demanded payment thereof from
Guarantors, in addition to all other rights and remedies, the Beneficiaries and
each and every affiliate of the Beneficiaries (and any Person holding a
participation interest in any of the Guaranteed Obligations) is hereby
irrevocably authorized, without prior notice to the Guarantors, to set off any
balances held for the account of or any other liability owing by the
Beneficiaries or any such affiliate or participant to Guarantors at any of their
offices against any of the Guaranteed Obligations, as the Beneficiaries or such
affiliate or participant may elect.
7. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the Guarantors hereto shall
be in writing (including teletransmissions), shall be given or made at the
address or telecopier number set forth on the signature page hereto, or at such
other address or telecopier number as Guarantors may hereafter specify to the
Administrative Agent in writing, and (unless otherwise specified herein) shall
be deemed delivered on receipt if teletransmitted or delivered by hand or five
Business Days after mailing, and all mailed notices shall be by registered mail,
postage prepaid.
8. Expenses. Guarantors shall be jointly and severally liable to the
Beneficiaries and shall pay to the Beneficiaries immediately on demand all costs
and expenses of the Beneficiaries, including all reasonable fees and
disbursements of the Beneficiaries' counsel incurred in the collection or
enforcement or attempted collection or attempted enforcement of the
Beneficiaries' rights under this Agreement.
9. No Waiver of Remedies. No failure to exercise and no delay in
exercising, on the part of the Beneficiaries, any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10. Governing Law. This Agreement shall be governed by, and construed
and interpreted in accordance with, the laws of the State of New York without
regard to any conflicts-of-laws rules.
11. Entire Agreement; Modifications. This Agreement contains the entire
agreement between the Beneficiaries and the Guarantors with respect to all
subject matters contained herein. This Agreement cannot be amended, modified or
changed in any way except by a written instrument executed by Guarantors and
accepted by the Administrative Agent.
12. Successors and Assigns. The covenants, representations, warranties
and agreements herein set forth shall be binding upon the Guarantors and their
successors and assigns and shall inure to the benefit of the Beneficiaries,
their successors and assigns.
13. Severability. The unenforceability or invalidity of any provision
or provisions of this Agreement shall not render any other provision or
provisions herein contained unenforceable or invalid.
14. Jurisdiction and Venue. For purposes of this Agreement, each of the
Guarantors and the Beneficiaries hereby irrevocably consents and submits to the
nonexclusive jurisdiction and venue of all federal and
55
state courts located in the State of New York. At the Beneficiaries' option, the
Guarantors may be joined in any action or proceeding commenced by the
Beneficiaries against Borrower in connection with or based on the Loan Documents
to which Borrower is a party, or any provision of any thereof, and recovery may
be had against the Guarantors in such action or proceeding or in any independent
action or proceeding against the Guarantors, without any requirement that the
Beneficiaries first assert, prosecute or exhaust any remedy or claim against
Borrower. Each Guarantor and each Beneficiary hereby irrevocably waives (to the
fullest extent permitted by applicable law) any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of, under or relating to this Agreement or any Loan Document brought in any
federal or state court located in the State of New York, and hereby further
irrevocably waives (to the fullest extent permitted by applicable law) any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing in this Section shall affect any right
that the Beneficiaries may otherwise have to bring any action or proceeding
relating to this Agreement against any Guarantor or its properties in any
jurisdiction in which it may lawfully do so, provided that no such action or
proceeding may be commenced in a court located outside the United States except
an action or proceeding to enforce a judgment rendered by a court in the United
States in the courts of another jurisdiction. EACH GUARANTOR AND EACH
BENEFICIARY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY LOAN
DOCUMENT.
56
IN WITNESS WHEREOF, the Guarantors have executed this Subsidiary
Guarantee Agreement as of the date first written above.
BUFFALO CHINA, INC.
By:
----------------------------------------
Name:
Title:
Address: 000-000 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Telecopier (fax) #: (000) 000-0000
THC SYSTEMS INC.
By:
----------------------------------------
Name:
Title:
Address: 000-000 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Telecopier (fax) #: (000) 000-0000
ENCORE PROMOTIONS, INC.
By:
----------------------------------------
Name:
Title:
Address: 000-000 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Telecopier (fax) #: (000) 000-0000
57
EXHIBIT E
SUBORDINATION AGREEMENT
This Subordination Agreement (the "Agreement"), dated as of November
26, 1996, is among ONEIDA LTD., a New York corporation ("Parent"), BUFFALO
CHINA, INC. ("Buffalo"), THC SYSTEMS, INC. ("THC"), and CAMDEN WIRE CO., INC.
("Camden"), each a New York corporation and the holders of the Notes referred to
below (collectively referred to herein as the "Noteholders").
RECITALS
A. Allstate Life Insurance Company, Allstate Insurance Company, and
Pacific Mutual Life Insurance Company (collectively, the "1996 Noteholders") and
the Parent and THC are parties to a Note Agreement dated as of November 15, 1996
(the "1996 Note Agreement") pursuant to which the 1996 Noteholders purchased
Senior Notes issued by THC and guaranteed by the Parent in the aggregate
principal amount of $35,000,000 (the "1996 Notes") in accordance with the terms
of the 1996 Note Agreement.
B. Allstate Life Insurance Company and Pacific Mutual Life Insurance
Company (collectively, the "1992 Noteholders"), and the Parent are parties to a
Note Agreement dated as January 1, 1992 (the "1992 Note Agreement") pursuant to
which the 1992 Noteholders purchased Senior Notes issued by the Parent in the
aggregate principal amount of $30,000,000 (the "1992 Notes") in accordance with
the terms of the 1992 Note Agreement. (The 1992 Note Agreement and the 1996 Note
Agreement, as such agreements may be from time to time amended, modified or
supplemented, are hereinafter collectively referred to as the "Note Agreements"
and the 1992 Notes and the 1996 Notes are hereinafter collectively referred to
as the "Notes").
C. Buffalo, Camden and THC are Restricted Subsidiaries (as such term is
defined in the Note Agreements). Each of Buffalo, Camden and THC has executed
and delivered to the 1992 Noteholders a Subsidiary Guarantee Agreement dated as
of November 1, 1996 (the "1992 Guarantee Agreement") guaranteeing repayment of
the 1992 Notes and other obligations owed pursuant to the 1992 Note Agreement.
D. Buffalo and Camden have executed and delivered to the 1996
Noteholders a Subsidiary Guarantee Agreement dated as of November 26, 1996 (the
"1996 Guarantee Agreement") guaranteeing repayment of the 1996 Notes and other
obligations owed pursuant to the 1996 Note Agreement.
E. Parent from time to time extends credit to the Guarantors in the
form of notes, advances, accounts receivable, administrative services and
expenses, and other inter-company accommodations made by the Parent to the
Guarantors.
F. The 1996 Noteholders, as a condition to entering into the 1996 Note
Agreement and purchasing Notes thereunder, and the 1992 Noteholders, as a
condition to granting a Waiver dated as of November 1, 1996 with respect to
certain covenants in the 1992 Note Agreement, have required the Parent and the
Guarantors to execute and deliver this Agreement.
NOW, THEREFORE, in order to induce the Noteholders, and the 1992
Noteholders, as a condition to granting a Waiver dated as of November 1, 1996
with respect to certain covenants in the 1992 Note Agreement, to purchase the
1996 Notes and in consideration thereof, the Parent and the Guarantors agree as
follows:
1. Definitions. As used herein, the following terms shall have the
following meanings:
1.1 "Event of Default" shall mean an Event of Default as
defined in the Note Agreements (after giving effect to any applicable cure
period) which is not waived in writing by the Noteholders.
1.2 "Loan Documents" shall mean all credit accommodations,
notes, note agreements, and any other agreements and documents, now or hereafter
existing, creating, evidencing, guarantying, securing or
58
relating to any or all of the Senior Liabilities, together with all
amendments, modifications, renewals, or extensions thereof.
1.3 "Obligor" shall mean, (a) in the case of the 1992 Notes,
the Parent and (b) the in the case of the 1996 Notes, THC, and (c) with respect
to the 1992 Notes and the 1996 Notes, each and every maker, endorser, guarantor,
or surety of or for any or all of the Senior Liabilities.
1.4 "Senior Liabilities" shall mean all liabilities of the
Guarantors to the Noteholders under the Guarantee Agreements, including, without
limitation, the principal amount of all Notes guaranteed thereby and all
interest payable in respect thereof, together with all fees, late charges,
premiums, costs and expenses payable under the Guarantee Agreements.
1.5 "Subordinated Liabilities" shall mean all liabilities of
each of the Guarantors to the Parent for notes, advances, accounts receivable,
administrative services and expenses, and all other inter-company
accommodations, including, without limitation, all amounts in the inter-company
account maintained by Parent on behalf of each of the Guarantors.
1.6 "Subordinated Loan Documents" shall mean all credit
accommodations, notes, loan agreements and any other agreements and documents,
now or hereafter existing, creating, evidencing, guarantying, securing or
relating to any or all of the Subordinated Liabilities, together with all
amendments, modifications, renewals or extensions thereof.
2. Subordination.
2.1 Subordination to Senior Liabilities. Except as set forth
in Section 2.2 of this Agreement or as the Noteholders may hereinafter otherwise
expressly consent in writing, the payment of all Subordinated Liabilities shall
be postponed and subordinated to the payment in full of all Senior Liabilities,
and no payments or other distributions whatsoever, including, without
limitation, payments of interest in respect of any Senior Liabilities, shall be
made, nor shall any property or assets of the Guarantor be applied to the
purchase or other acquisition or retirement of any Subordinated Liabilities, nor
given as collateral security to secure repayment of same.
2.2 Permitted Payments. Notwithstanding anything in Section
2.1 to the contrary, until such time as an Event of Default occurs, Guarantors
may make, and the Parent may receive, payments of principal and interest on
account of Subordinated Liabilities in a manner consistent with past practice.
Upon the occurrence of an Event of Default, all payments on account of
Subordinated Liabilities shall automatically cease, and Guarantors shall not
make, and the Parent shall not receive, any such payments unless the Noteholders
shall expressly consent thereto in writing.
2.3 Rights of Noteholders to Collect Subordinated Liabilities.
In the event of, and commencing with the date thereof, any dissolution, winding
up, liquidation, reorganization or other similar proceedings relating to any of
the Guarantors or to their creditors or their property (whether voluntary or
involuntary, partial or complete, and whether in bankruptcy, insolvency or
receivership, or upon an assignment for the benefit of creditors, or any other
marshaling of the assets and liabilities of any of the Guarantors, or any sale
of all or substantially all of the assets of any of the Guarantors), the Senior
Liabilities shall first be paid in full before the Parent shall be entitled to
receive and/or to retain any payment or distribution in respect of the
Subordinated Liabilities, and in order to implement the foregoing: (i) all
payments and distributions of any kind or character in respect of the
Subordinated Liabilities to which the Parent would be entitled but for the
provisions of this Agreement will be made directly to the Noteholders; and (ii)
the Parent shall promptly file a claim or claims, in the form required in such
proceedings, for the full outstanding amount of the Subordinated Liabilities,
and shall cause said claim or claims to be approved and all payments and other
distributions in respect thereof to be made directly to the Noteholders.
2.4 Protection of Noteholders' Rights in Subordinated
Liabilities. In the event that, after the occurrence of an Event of Default, the
Parent receives any payment or other distribution of any kind or character from
any Guarantor or any other source whatsoever in respect of any of the
Subordinated Liabilities, other than as
59
expressly permitted by the terms of this Agreement, such payment or other
distribution shall be received in trust for the Noteholders and promptly turned
over by the Parent to the Noteholders. The Parent will cause to be clearly
inserted in any promissory note or other instrument which at any time evidences
any of the Subordinated Liabilities a statement to the effect that the payment
thereof is subordinated in accordance with the terms of this Agreement. The
Parent will execute such further documents and instruments and take such further
action as the Noteholders may from time to time reasonably request to carry out
the intent of this Agreement. The Parent hereby irrevocably appoints the
Noteholders its attorney in fact, such appointment being coupled with an
interest, to execute such further documents and instruments and take such
further action on behalf of the Parent as the Noteholders may from time to time
deem reasonable to carry out the intent of this Agreement, including, without
limitation, the actions set forth in Section 2.3 hereof.
2.5 Treatment of Payment of Subordinated Liabilities. All
payments and distributions received by the Noteholders in respect of the
Subordinated Liabilities, to the extent received in or converted into cash, may
be applied by the Noteholders first to the payment of any and all expenses
(including attorneys' fees and disbursements and the allocated fees, expenses
and cost of in-house counsel) paid or incurred by the Noteholders or the
Noteholders in enforcing this Agreement or in endeavoring to collect or realize
upon any of the Subordinated Liabilities, and any balance thereof shall be
applied by the Noteholders toward the payment of the Senior Liabilities
remaining unpaid by allocating the balance among the Noteholders pro rata in
accordance with the respective unpaid principal amounts of the Notes then
outstanding under the Note Agreements.
2.6 Prohibition on Changes in Subordinated Liabilities. The
Parent will not, without the prior written consent of the Noteholders: (i)
cancel, waive, or forgive any Subordinated Liabilities or any rights in respect
thereof; or (ii) convert any Subordinated Liabilities into stock in the
Guarantors.
2.7 Continuing Agreement. This Agreement shall in all respects
be a continuing agreement and shall remain in full force and effect until all
Senior Liabilities have been paid in full.
2.8 Permitted Changes in Senior Liabilities. The Noteholders
may, from time to time, take any or all of the following actions without
affecting the subordination set forth in this Agreement: (i) retain or obtain a
security interest in any property to secure any of the Senior Liabilities; (ii)
retain or obtain the primary or secondary obligation of any other Obligor or
Obligors with respect to any of the Senior Liabilities; (iii) extend, renew,
alter or exchange any of the Senior Liabilities; (iv) release or compromise any
obligation of any nature of any Obligor with respect to any of the Senior
Liabilities; and (v) release any security interest or lien in, allow a security
interest or lien to be unperfected, surrender, release or permit any
substitution or exchange for, all or any part of any property securing any of
the Senior Liabilities, or extend, renew or release, compromise, alter or
exchange any obligations of any nature of any Obligor with respect to any such
property.
3. Representations and Warranties. Each of the Parent and the
Guarantors hereby represents and warrants that: (i) it has the necessary power
and capacity to make and perform this Agreement and such making and performance
have been duly authorized by all necessary corporate action; (ii) the making and
performance of this Agreement does not and will not violate any provision of law
or regulation or result in the breach of, or constitute a default or require any
consent under, any indenture or other agreement or instrument to which it is a
party or by which any of its properties may be bound; and (iii) this Agreement
is the legal, valid and binding obligation of each of the Parent and Guarantors,
enforceable in accordion with its terms.
4. Additional Subordinated Liabilities. If, under the terms of the 1992
Note Agreement or the 1996 Note Agreement, any other Restricted Subsidiary of
Parent (as that term is defined in the 1992 Note Agreement and the 1996 Note
Agreement) becomes obligated to deliver to the Noteholders a written guarantee
of amounts due under the Note Agreements, the Parent agrees to subordinate all
liabilities of such Restricted Subsidiary to the Parent for notes, advances,
accounts receivable, administrative services and expenses and other
inter-company accommodations to the prior payment of the such Restricted
Subsidiary's liability under the written guarantee. Parent agrees to execute,
and to cause such Restricted Subsidiary to execute, a subordination agreement in
form and substance similar to this Agreement.
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5. Miscellaneous.
5.1 Remedies Cumulative; No Waiver. The rights, powers and
remedies of the Noteholders provided in this Agreement and in the Note
Agreements are cumulative and not exclusive of any right, power or remedy
provided by law or equity. No failure or delay on the part of the Noteholders in
the exercise of any right, power or remedy shall operate as a waive thereof, nor
shall any single or partial exercise preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy.
5.2 Notices. Notices and communications under this Agreement
shall be in writing and shall be given as provided in Section 11.2 of the Note
Agreements.
5.3 Governing Law. This Agreement shall be construed in
accordance with and governed by the substantive laws of the State of Illinois
without reference to conflict of laws principles.
5.4 Integration; Amendment. This Agreement and the other Loan
Documents constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations and prior
writings with respect to the subject matter hereof and thereof. No amendment of
this Agreement, and no waiver of any one or more of the provisions hereof, shall
be effective unless set forth in writing and signed by the parties hereto.
5.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs,
executors, administrators, successors and permitted assigns; provided, however,
that the Guarantors and the Parent may not assign their rights or obligations
hereunder or any interest herein without the prior written consent of the
Noteholders, and any such assignment or attempted assignment shall be void and
of no effect with respect to the Noteholders. The Noteholders may from time to
time sell or assign, in whole or in part, or grant participation in the Notes,
the Senior Liabilities, this Agreement and/or the obligations evidenced thereby.
5.6 Severability. The illegality, unenforceability or
inconsistency of any provision of this Agreement shall not affect or impair the
legality, enforceability or consistency of the remaining provisions of this
Agreement.
5.7 Judicial Proceeding; Waivers. The parties acknowledge and
agree that any suit, action or proceeding, whether claim or counterclaim,
brought or instituted by the Noteholders and the Parent or any successor or
assign of the Noteholders and the Parent, on or with respect to this Agreement
or the dealings of the parties with respect hereto or thereto, shall be tried
only by a court and not by a jury.
5.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
ONEIDA LTD.
By:
------------------------------------------
Xxxxxx X. Xxxxx, Senior Vice President
BUFFALO CHINA, INC.
By:
------------------------------------------
CAMDEN WIRE CO., INC.
By:
------------------------------------------
THC SYSTEMS, INC.
By:
------------------------------------------
ALLSTATE LIFE INSURANCE COMPANY
By:
------------------------------------------
By:
------------------------------------------
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By:
------------------------------------------
By:
------------------------------------------
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By:
------------------------------------------
By:
------------------------------------------
62
================================================================================
EXHIBIT F
SHARING AGREEMENT
SHARING AGREEMENT dated as of June 2, 2000 among The Chase Manhattan
Bank, as Administrative Agent (the "Administrative Agent"), the financial
institutions that are parties to the Credit Agreement referred to below (each
such institution is referred to herein as a "Lender" and. Together with the
Adminstrative Agent, are collectively referred to herein as "Lenders") and
Allstate Life Insurance Company, Allstate Insurance Company and Pacific Mutual
Life Insurance Company (each institution is referred to herein either as a "1992
Noteholder" (as defined in Recital A below) or a "1996 Noteholder" (as defined
in Recital A below)) and the 1992 Noteholders and the 1996 Noteholders and the
Lenders are individually referred to herein as a "Creditor" and are collectively
referred to herein as the "Creditors").
RECITALS:
A. Under and pursuant to a Note Agreement dated as of November 15, 1996
(as such agreement may be modified, amended, renewed or replaced, the "1996 Note
Agreement"), between THC Systems, Inc., a New York corporation, Oneida Ltd., a
New York corporation (the "Parent"), and Allstate Life Insurance Company,
Allstate Insurance Company and Pacific Mutual Life Insurance Company (the "1996
Noteholders"), THC Systems, Inc. has issued and sold to the 1996 Noteholders
$35,000,000 aggregate principal amount of its 7.49% Senior Notes due November 1,
2008 (the "1996 Notes"). Under and pursuant to a Note Agreement dated as of
January 1, 1992 (as such agreement may be modified, amended, renewed or
replaced, the "1992 Note Agreement") between the Parent, Allstate Life Insurance
Company and Pacific Mutual Life Insurance Company (the "1992 Noteholders"), the
Parent has issued and sold to the 1992 Noteholders $30,000,000 principal amount
of its 8.52% Senior Notes due January 15, 2002 (the "1992 Notes") (the 1992 Note
Agreement and the 1996 Note Agreement being collectively referred to as the
"Note Agreements" and the 1992 Notes and the 1996 Notes being hereinafter
collectively referred to as the "Notes").
B. Under and pursuant to that certain Credit Agreement dated as of June
2, 2000 (as such agreement may be modified, amended, renewed or replaced,
including any increase in the amount thereof, the "Credit Agreement") among the
Parent and the Lenders, the Lenders have made available to the Parent certain
credit facilities in a current aggregate principal amount up to $285,000,000
(all amounts outstanding in respect of said credit facilities being hereinafter
collectively referred to as the "Loans").
C. In connection with the execution of the Bank Credit Agreement and as
support for the Loans made thereunder, THC Systems, Inc., Buffalo China, Inc.
and Encore Promotions, Inc., each of which are wholly-owned subsidiaries of the
Parent (together with any other subsidiaries of the Parent required from time to
time to execute and deliver a subsidiary guarantee pursuant to the provisions of
the 1992 Note Agreement, the 1996 Note Agreement or the Credit Agreement,
collectively, the "Subsidiary Guarantors") have guaranteed to the Lenders the
payment of the Loans and all other obligations of the Parent arising in
connection with the transactions contemplated by the Credit Agreement under
certain subsidiary guarantees (as such guarantees may be modified, amended,
renewed or replaced, including any increase in the amount thereof, and together
with any other subsidiary guarantee executed and delivered from time to time
pursuant to the provisions of the Credit Agreement, collectively, the "Lender
Guaranty").
D. The Subsidiary Guarantors have entered into subsidiary guarantees
dated as of various dates with respect to the 1992 Notes and the 1996 Notes (as
such subsidiary guarantees may be modified, amended, renewed or replaced and,
together with any other subsidiary guarantee executed and delivered from time to
time pursuant to the provisions of the Note Agreements, collectively, the
"Noteholder Guaranty") pursuant to which (a) Buffalo China, Inc. and Encore
Promotions, Inc. have guaranteed to the holders of the 1996 Notes the payment of
the principal of, premium, if any, and interest on the 1996 Notes and the
payment of all other obligations of THC Systems, Inc. arising in connection with
the transactions contemplated by the 1996 Note Agreement and (b) Buffalo China,
Inc., THC Systems, Inc. and Encore Promotions, Inc. have guaranteed to the
holders of the 1992 Notes the payment of the
63
principal of, premium, if any, and interest on the 1992 Notes and the payment of
all other obligations of the Parent arising in connection with the transactions
contemplated by the 1992 Note Agreement. The Lender Guaranty and the Noteholder
Guaranty are each hereinafter referred to as a "Subsidiary Guarantee".
E. In consideration of the mutual benefit to be provided hereby and
intending to be legally bound, the Lenders and the Noteholders have agreed to
enter into this Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS.
The following terms shall have the meanings assigned to them below in
this 'SS'1 or in the provisions of this Agreement referred to below:
"Bankruptcy Proceeding" shall mean, with respect to any person, a
general assignment of such person for the benefit of its creditors, or the
institution by or against such person of any proceeding seeking relief as
debtor, or seeking to adjudicate such person as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of such person or
its debts, under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for such person or for any substantial part of its
property.
"Credit Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"Creditor" shall have the meaning assigned thereto in the introductory
paragraph hereto.
"Excess Sharing Payment" shall mean as to any Creditor an amount equal
to the Sharing Payment received by such Creditor less the Pro Rata Share of
Sharing Payments to which such Creditor is then entitled.
"Lender" shall have the meaning assigned thereto in the introductory
paragraph hereto.
"Lender Guaranty" shall have the meaning assigned thereto in the
Recitals hereof.
"Loans" shall have the meaning assigned thereto in the Recitals hereof.
"1992 Notes" shall have the meaning assigned thereto in the Recitals
hereof.
"1992 Note Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"1996 Notes" shall have the meaning assigned thereto in the Recitals
hereof.
"1996 Note Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"Noteholder" shall have the meaning assigned thereto in the
introductory paragraph hereto.
"Noteholder Guaranty" shall have the meaning assigned thereto in the
Recitals hereof.
"Notes" shall have the meaning assigned thereto in the Recitals hereof.
"Parent" shall have the meaning assigned thereto in the Recitals
hereof.
"Pro Rata Share of Sharing Payments" shall mean as of the date of any
Sharing Payment to a Creditor an amount equal to the product obtained by
multiplying (x) the amount of all Sharing Payments made to all Creditors
concurrently with the payments to such Creditors in connection with the
collection of such Sharing Payments by (y)
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fraction, the numerator of which shall be the Specified Amount owing to such
Creditor, and the denominator of which is the aggregate amount of all
outstanding Subject Obligations (without giving effect in the denominator to the
application of any such Sharing Payments).
"Receiving Creditor" shall have the meaning assigned thereto in Section
2.
"Sharing Payment" shall have the meaning assigned thereto in Section 2.
"Specified Amount" shall mean as to any Creditor the aggregate amount
of the Subject Obligations owed to such Creditor.
"Subject Obligations" shall mean all principal of, premium, if any, and
interest on, the Notes and the Loans and all other obligations of THC Systems,
Inc. or the Parent under or in respect of the Notes and the Loans and under the
Note Agreements and the Credit Agreement; provided that any amount of such
Subject Obligations which is not allowed as a claim enforceable against the
Parent or THC Systems, Inc. in a Bankruptcy Proceeding under applicable law
shall be excluded from the computation of "Subject Obligations" hereunder.
"Subsidiary Guarantors" shall have the meaning assigned thereto in the
Recitals hereof.
"Subsidiary Guarantee" shall have the meaning assigned thereto in the
Recitals hereof.
Section 2. SHARING OF RECOVERIES.
Each Creditor hereby agrees with each other Creditor that (a) payments
made pursuant to terms of a Subsidiary Guarantee or (b) payments (other than
regularly scheduled payments of principal and interest) made with respect to the
1996 Notes by THC Systems, Inc. (collectively, "Sharing Payments" or
individually, a "Sharing Payment") (x) within 90 days prior to the commencement
of a Bankruptcy Proceeding or at any time thereafter with respect to any
Subsidiary Guarantor or THC Systems, Inc. (with respect to the 1996 Note
Agreement) or the Parent or (y) following the acceleration of the 1992 Notes or
the 1996 Notes or the Loans, shall be shared so that each Creditor shall receive
its Pro Rata Share of Sharing Payments. Accordingly, each Creditor hereby agrees
that in the event (a) an event described in clauses (x) or (y) above shall have
occurred, (b) any Creditor shall receive a Sharing Payment (a "Receiving
Creditor"), and (c) any other Creditor shall not concurrently receive its Pro
Rata Share of Sharing Payments from the same Subsidiary Guarantor or THC
Systems, Inc. in connection with Sharing Payments made pursuant to clause (b)
above, then the Receiving Creditor shall promptly remit the Excess Sharing
Payment to each other Creditor who shall then be entitled thereto so that after
giving effect to such payment (and any other payments then being made by any
other Receiving Creditor pursuant to this Section 2) each Creditor shall have
received its Pro Rata Share of Sharing Payments.
Any such payments shall be deemed to be and shall be made in
consideration of the purchase for cash at face value, but without recourse,
ratably from the other Creditors of such amount of the 1992 Notes or the 1996
Notes or Loans (or interest therein), as the case may be, to the extent
necessary to cause such Creditor to share such Excess Sharing Payment with the
other Creditors as hereinabove provided; provided, however, that if any such
purchase or payment is made by any Receiving Creditor and if such Excess Sharing
Payment or part thereof is thereafter recovered from such Receiving Creditor by
any Subsidiary Guarantor or by THC Systems, Inc. in connection with Sharing
Payments made pursuant to clause (b) of the preceding paragraph (including,
without limitation, by any trustee in bankruptcy of any Subsidiary Guarantor or
any creditor thereof), the related purchase from the other Creditors shall be
rescinded ratably and the purchase price restored as to the portion of such
Excess Sharing Payment so recovered, but without interest; and provided further
nothing herein contained shall obligate any Creditor to resort to any setoff,
application of deposit balance or other means of payment or avail itself of any
recourse by resort to any property of THC Systems, Inc. or the Parent or any
Subsidiary Guarantor, the taking of any such action to remain within the
absolute discretion of such Creditor without obligation of any kind to other
Creditors to take any such action.
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Section 3. AGREEMENTS AMONG THE CREDITORS.
Section 3.1. Independent Actions by Creditors. Nothing contained in
this Agreement shall prohibit any Creditor from accelerating the maturity of, or
demanding payment from any Subsidiary Guarantor on, any Subject Obligation of
the Parent or THC Systems, Inc. to such Creditor or from instituting legal
action against THC Systems, Inc. or the Parent or any Subsidiary Guarantor or
THC Systems, Inc. in connection with a Sharing Payment to obtain a judgment or
other legal process in respect of such Subject Obligation, but any funds
received from any Subsidiary Guarantor or THC Systems, Inc. in connection with a
Sharing Payment in connection with any recovery therefrom shall be subject to
the terms of this Agreement.
Section 3.2. Relation of Creditors. This Agreement is entered into
solely for the purpose set forth herein, and no Creditor assumes any
responsibility to any other party hereto to advise such other party of
information known to such other party regarding the financial condition of the
Parent, THC Systems, Inc. or any Subsidiary Guarantor or of any other
circumstances bearing upon the risk of nonpayment of any Subject Obligation.
Each Creditor specifically acknowledges and agrees that nothing contained in
this Agreement is or is intended to be for the benefit of THC Systems, Inc. or
the Parent or any Subsidiary Guarantor and nothing contained herein shall limit
or in any way modify any of the obligations of THC Systems, Inc. or the Parent
or any Subsidiary Guarantor to the Creditors.
SECTION 4. MISCELLANEOUS
Section 4.1. Entire Agreement. This Agreement represents the entire
Agreement among the Creditors and, except as otherwise provided, this Agreement
may not be altered, amended or modified except in a writing executed by all
parties to this Agreement.
Section 4.2. Notices. Notices hereunder shall be given to the Creditors
at their addresses as set forth in the Note Agreements or the Credit Agreement,
as the case may be, or at such other address as may be designated by each in a
written notice to the other parties hereto.
Section 4.3. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the Creditors and their respective
successors and assigns (including, without limitation, any holder of a
participation interest in any Subject Obligation), whether so expressed or not,
and, in particular, shall inure to the benefit of and be enforceable by any
future holder or holders of any Subject Obligations, and the term "Creditor"
shall include any such subsequent holder of Subject Obligations, wherever the
context permits.
Section 4.4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
Section 4.5. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one Agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.
Section 4.6. Sale of Interest. No Creditor will sell, transfer or
otherwise dispose of any interest in the Subject Obligations unless such
purchaser or transferee shall agree, in writing, to be bound by the terms of
this Agreement.
Section 4.7. Severability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXX X. XXXXXX
----------------------------------
By: /s/ XXXXXXXX X. XXXXXX
----------------------------------
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/ XXXXXX X. XXXXXX
----------------------------------
By: /s/ XXXXXXXX X. XXXXXX
----------------------------------
Authorized Signatories
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
----------------------------------
By: /s/ XXXXX X. XXXX
----------------------------------
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
THE CHASE MANHATTAN BANK
(as Administrative Agent and as Lender)
By: /s/ XXXXXX X. XXXX, XX.
-------------------------------
Title: Vice President
HSBC BANK, USA
By: /s/ XXXX X. XXXXXXX
-------------------------------
Title: Vice President
MANUFACTURERS AND TRADERS TRUST
COMPANY
By: /s/ XXXX X. XXXXXX
-----------------------
Title: Banking Officer
FLEET NATIONAL BANK
By: /s/ XXXXX X. XXXXXX
----------------------
Title: Vice President
BANK OF AMERICA, N.A.,
By: /s/ XXXX X. XXXX
-------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ XXXX X. XXXXXX
-----------------------
Title Managing Director
EUROPEAN AMERICAN BANK
By: /s/ XXXX XXXXXX
--------------------------------
Title: Vice President
BANCA NAZIONALE DEL LAVORO
By: /s/ XXXXXX XXXXXXX
--------------------------------
Title: Vice President
By: /s/ XXXXXXXX XXXXXXXXX
-------------------------------
Title: First Vice President
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