EXHIBIT 4(a)(xxix)
AMENDMENT NO. 3 TO
2001 AMENDED AND RESTATED NOTE AGREEMENT
Reference is hereby made to that certain 2001 Amended and Restated Note
Agreement dated as of May 1, 2001 by and among THC Systems, Inc. (the
"Company"), Oneida Ltd. (the "Guarantor"), Allstate Life Insurance Company
("Allstate Life"), Allstate Insurance Company ("Allstate") and Pacific Life
Insurance Company (together with Allstate Life and Allstate, the "Purchasers"),
as amended by that certain (i) Waiver and Amendment No. 1 to 2001 Amended and
Restated Note Agreement dated as of December 7, 2001 and (ii) Amendment No. 2 to
2001 Amended and Restated Note Agreement dated as of April 23, 2002
(collectively, the "Note Agreement"; a previous amendment to the Note Agreement,
denominated "Amendment No. 3 to 2001 Amended and Restated Note Agreement" and
dated as of August __, 2002, never having become effective due to Company's and
the Guarantor's failure to satisfy the conditions to effectiveness set forth
therein). This Amendment No. 3 to 2001 Amended and Restated Note Agreement is
dated as of April 24, 2003 and hereinafter referred to as "Amendment No. 3."
R E C I T A L S
A. The Company and the Guarantor have requested that the financial
covenants in the Note Agreement be amended and that certain of the other
provisions in the Note Agreement be revised.
B. The Purchasers are willing to amend the Note Agreement including,
but not limited to, the financial covenants as requested by the Company and the
Guarantor, provided that a Pro Rata Amount of the Indebtedness under the Note
Agreement shall be reduced upon any reduction of the Commitment.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Amendment No. 3 which
are not otherwise defined shall have the meanings given to those terms in the
Note Agreement, except where such terms are amended herein.
2. Amendments of Note Agreement.
2.1 The following defined terms are added in alphabetical order to
Section 5.1 of the Note Agreement:
"Amendment No. 3 Effective Date" means the date on which all the
conditions to the Amendment No. 3 to 2001 Amended and Restated Note
Agreement dated as of April 24, 2003 have been satisfied.
2.2 The definition of the term "Applicable Margin" in Section 5.1 is
amended by replacing the grid contained therein with the following grid and by
amending the proviso immediately following the grid all as follows, such
amendments to be effective from the Amendment No. 3 Effective Date through and
including February 6, 2004:
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Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 5 Xxxxx 0 Xxxxx 0 Xxxxx 0
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Consolidated Leverage Ratio <=2.50 <=2.75 <=3.00 <=3.25 <=3.50 <=4.00 <=4.50 >4.50
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Eurodollar Margin (bps) 150.0 175.0 200.0 250.0 300.0 320.0 335.0 400.0
-----------------------------------------------------------------------------------------------------------
ABR Margin (bps) 25.0 50.0 75.0 125.0 175.0 200.0 200.0 200.0
-----------------------------------------------------------------------------------------------------------
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provided that (i) during the period from the Amendment No. 3 Effective
Date through and including the date on which Borrower delivers the financial
statements under Section 6.1 for the Fiscal Quarter ended January 25, 2003,
the Applicable Margin shall be based on Xxxxx 0, and (ii) if the Borrower shall
have failed to deliver the financial statements required by Section 6.1 when
due (without giving effect to any grace period or notice requirement) or there
shall have occurred an Event of Default which has not been waived in the manner
provided in Section 8.1 hereof, the Applicable Margin shall immediately be
adjusted to Level 8 until such time delivery of such financial statements shall
have been made or the Event of Default shall have been cured or waived, as the
case may be.
2.3 Effective February 7, 2004, the definition of the term "Applicable
Margin" in Section 5.1 shall be further amended by replacing the grid contained
therein with the following grid and by amending the proviso immediately
following the grid as follows:
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Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 5
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Consolidated Leverage Ratio <=4.00 <=5.00 <=6.00 <=7.00 >7.00
-----------------------------------------------------------------------------
Eurodollar Margin (bps) 320.0 400.0 425.0 450.0 475.0
-----------------------------------------------------------------------------
ABR Margin (bps) 200.0 200.0 225.0 250.0 275.0
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provided that (i) during the period from February 7, 2004 through and
including the date on which Borrower delivers the financial statements under
Section 6.1 for the Fiscal Quarter ended January 31, 2004, the Applicable
Margin shall be determined on the basis of the Consolidated Leverage Ratio for
the Fiscal Quarter ended October 25, 2003, and (ii) if the Borrower shall have
failed to deliver the financial statements required by Section 6.1 when due
(without giving effect to any grace period or notice requirement) or there shall
have occurred an Event of Default which has not been waived in the manner
provided in Section 8.1 hereof, the Applicable Margin shall immediately be
adjusted to Level 5 until such time delivery of such financial statements shall
have been made or the Event of Default shall have been cured or waived, as the
case may be.
2.4 The definition of the term "Consolidated Net Worth" in Section 5.1
is amended and restated in its entirety to read as follows:
"Consolidated Net Worth - means at any date, all amounts which would,
in accordance with GAAP, be included on a consolidated balance sheet of the
Guarantor and its Subsidiaries under stockholders' equity at such date,
excluding for any Fiscal Quarter ending after January 25, 2003, foreign currency
translation adjustments reflecting net gains or losses on foreign assets
resulting from foreign currency fluctuations since January 25, 2003."
2.5 The following sentence is added to the definition of the term
Commitment as the last sentence in Section 5.1 of the Note Agreement:
The aggregate amount of the Lenders' Commitments will be reduced by
the amounts set forth on Schedule 2.01 to the Credit Agreement on the
dates set forth therein, and as set forth in Section 2.07 of the
Credit Agreement.
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2.6 The following new Section 6.19 is added to the Note Agreement
immediately following Section 6.18, as added by Amendment No. 2:
6.19 Implementation of Lean Manufacturing.
The Company and the Guarantor shall develop and implement lean
manufacturing practices at its Oneida Silversmiths division which are
designed to promote manufacturing efficiencies and reduce costs. The
Company and the Guarantor shall use commercially reasonable efforts to
implement its lean manufacturing program in phases in accordance with
the implementation schedule set forth on Schedule 6.19 annexed hereto
and shall complete implementation of each phase of its lean
manufacturing program no later than (a) sixty (60) days after the
scheduled completion date set forth on Schedule 6.19 for items
scheduled to be completed in 2003 and (b) ninety (90) days after the
scheduled completion date set forth on Schedule 6.19 for items
scheduled to be completed in 2004, unless completion of a phase has
been delayed because of actions, orders or directives of a
Governmental Authority. Simultaneously with the delivery of its
quarterly financial statements required to be delivered under Section
6.1(a) hereof, the Company and the Guarantor shall provide to the
Purchasers a written report certified by the chief financial officer
or chief accounting officer or Senior Vice President, Finance of each
of the Company and the Guarantor setting forth the steps taken by the
Company and the Guarantor during such quarter in implementing lean
manufacturing practices and noting any deviations from the
implementation schedule set forth on Schedule 6.19 in excess of the
sixty (60) or ninety (90) day grace period, as applicable.
2.7 Section 7.2 is amended by deleting the word "and" at the end of
subparagraph (h), adding the word "and" at the end of subparagraph (i), and
inserting the following new subparagraph (j) immediately following subparagraph
(i):
(j) purchase money liens on inventory reflecting consignment
arrangements by which Noritake Co., Inc. consigns to the Guarantor
inventory having a value of not more than $3,000,000, provided that
such purchase money liens do not attach to proceeds of the consigned
inventory, including accounts receivable arising out of the sale
thereof.
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2.8 Section 7.3 of the Note Agreement is amended and restated in its
entirety to read as follows:
7.3 Merger or Consolidation.
(a) The Guarantor will not, and will not permit any Subsidiary
to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
transactions), or engage in a sale/leaseback transaction with respect
to, any substantial part of its assets, any trade receivables (other
than an assignment in connection with the collection thereof in the
ordinary course of business), or any of the capital stock of any of
its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default or
Event of Default shall have occurred and be continuing (i) any
Subsidiary may merge into the Guarantor in a transaction in which the
Guarantor is the surviving corporation, (ii) any Subsidiary may merge
into a Material Domestic Subsidiary in a transaction in which the
surviving entity is a Material Domestic Subsidiary, (iii) any
Subsidiary may sell, transfer, lease or otherwise dispose of its
assets to the Guarantor or to a Material Domestic Subsidiary, (iv) any
Subsidiary may liquidate or dissolve if the Guarantor determines in
good faith that such liquidation or dissolution is in the best
interests of the Guarantor and the assets of such Subsidiary are
distributed to the Guarantor in liquidation or dissolution, (v) the
Company, the Guarantor and Buffalo China, Inc. may transfer assets to
Subsidiaries in accordance with subparagraph (b) below; and (vi) the
Guarantor and its Subsidiaries may sell, transfer, or otherwise
dispose of (in one transaction or a series of transactions), or engage
in a sale/leaseback transaction with respect to, assets if the
consideration received is in cash or cash equivalents at least equal
to 90% of the fair market value of such assets (as determined from a
written appraisal dated within one year of the sale furnished by the
Guarantor to the Purchasers and the Collateral Agent from an appraiser
reasonably acceptable to them who is a Member of the Appraisal
Institute) and the aggregate consideration received does not exceed
$11,000,000 for all such sales, transfers, or dispositions after the
Amendment No. 3 Effective Date; provided that 100% of the proceeds
received from any sale, transfer or disposition permitted under clause
(vi) above (after deducting the reasonable expenses of such sale,
transfer or disposition and any applicable federal and state income or
capital gains taxes payable on taxable gains realized from such sale,
transfer or disposition) are applied to prepay, on a pro rata basis,
the Indebtedness outstanding under this Agreement and the Loans
outstanding under the Credit Agreement. The Purchasers hereby
authorize the Collateral Agent to execute and deliver appropriate
releases, discharges and satisfactions releasing its Liens on any
assets sold, transferred or disposed of under clause (vi) above upon
receipt by the Collateral Agent of (A) the MAI appraisal referred to
above, (B) written evidence that the gross consideration received from
the sale is cash or cash equivalents equal to or exceeding 90% of the
appraised value of the assets sold, and (C) confirmation that the
prepayments required by this subparagraph (a) have been sent by wire
transfer to the Purchasers and the Administrative Agent.
(b) Notwithstanding anything in subparagraph (a) to the contrary, the
Guarantor may transfer property, plant and equipment located in
Sherrill, New York and Xxxxxx, New York to a wholly-owned Subsidiary,
and Buffalo China, Inc. may transfer property, plant and equipment
located in Buffalo, New York to a wholly-owned Subsidiary provided
that, in each instance, (i) each such Subsidiary executes and delivers
to the Purchasers a Subsidiary Guarantee and a Subordination
Agreement, each in form and substance satisfactory to Purchasers, (ii)
such assets are transferred subject to any existing Liens thereon in
favor of the Collateral Agent, and (iii) each such Subsidiary executes
and delivers to the Collateral Agent any and all Security Documents
requested by the Collateral Agent to confirm the continued existence
of such Liens following such transfer.
(c) The Guarantor will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other
than the Tableware Business.
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2.9 Section 7.5(f) of the Note Agreement is amended and restated in
its entirety to read as follows:
"(f) the purchase by the Guarantor of the remaining outstanding
Capital Stock of Oneida International Inc., which the Guarantor
currently does not own, for a purchase price of not more than
1,800,000 Euros; and"
2.10 Section 7.12 of the Note Agreement is amended and restated in its
entirety to read as follows, provided that, as to Fiscal Quarters ended prior to
the Amendment No. 3 Effective Date for which financial statements have been
delivered by the Guarantor pursuant to Section 6.1 of the Note Agreement, the
provisions of Section 7.12 in effect as of the end of such Fiscal Quarter shall
continue in effect:
"7.12. Financial Covenants. The Guarantor shall not:
(a) permit the Consolidated Interest Coverage Ratio of the Guarantor
and its Subsidiaries to be less than the amount indicated for the
applicable Fiscal Quarter:
Fiscal Quarter End Minimum Ratio
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1/25/03 2.11 to 1.00
4/26/03 2.16 to 1.00
7/26/03 1.89 to 1.00
10/25/03 2.01 to 1.00
1/31/04 2.16 to 1.00
4/24/04 2.70 to 1.00
7/31/04 2.87 to 1.00
10/30/04 3.02 to 1.00
1/29/05 3.18 to 1.00
4/30/05 3.37 to 1.00
(b) permit the Consolidated Leverage Ratio of the Guarantor and its
Subsidiaries to be greater than the amount indicated for the
applicable Fiscal Quarter:
Fiscal Quarter Ended Maximum Ratio
-------------------- -------------
1/25/03 5.70 to 1.00
4/26/03 7.40 to 1.00
7/26/03 7.95 to 1.00
10/25/03 7.95 to 1.00
1/31/04 7.39 to 1.00
4/24/04 6.07 to 1.00
7/31/04 5.76 to 1.00
10/30/04 5.43 to 1.00
1/29/05 5.03 to 1.00
4/30/05 4.67 to 1.00
(c) as of the last day of any Fiscal Quarter, permit Consolidated Net
Worth of the Guarantor and its Subsidiaries to be less than the sum of
(i) $125,200,000, plus (ii) 75% of the Consolidated Net Income of
Borrower and its consolidated Subsidiaries (which for the purposes of
this covenant shall not be reduced by losses) for the six-month
periods ending with each second and fourth Fiscal Quarter commencing
with the Fiscal Quarter ending July 28, 2003; and
(d) as of the last day of any Fiscal Quarter commencing with the
Fiscal Quarter ending October 25, 2003, permit Consolidated Net Income
for such Fiscal Quarter to be less than zero."
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2.11 Section 7.23 of the Note Agreement is amended and restated in its
entirety to read as follows:
7.23 Dividends.
Neither the Guarantor nor any Subsidiary shall declare or pay any
dividends on shares of any class of capital stock, whether now or
hereafter outstanding, except (a) the Guarantor or any Subsidiary may
declare dividends payable solely in common stock of the Guarantor or
such Subsidiary, (b) any Subsidiary may declare and pay cash dividends
to the Guarantor, and (c) so long as no Default or Event of Default
shall have occurred and be continuing, the Guarantor may declare cash
dividends on its outstanding shares of 6% Cumulative Preferred Stock
in an amount not to exceed $32,265 per Fiscal Quarter. Cash dividends
on 6% Cumulative Preferred Stock which are permitted to be paid under
this Section must be paid within one hundred (100) days after the
close of the Fiscal Quarter for which such dividends are declared.
2.12 A new Schedule 6.19 is added to the Note Agreement in the form
attached hereto as Exhibit A.
3. Representations and Warranties. Each of the Company and the Guarantor
represents and warrants to the Purchasers that the following statements are
true, correct and complete:
3.1 Representations and Warranties. Each of the representations and
warranties made by the Company and the Guarantor in the Note Agreement is true
and correct on and as of the date of this Amendment No. 3.
3.2 No Default or Event of Default. No Default or Event of Default has
occurred and is continuing.
3.3 Execution, Delivery and Enforceability. This Amendment No. 3 has
been duly and validly executed and delivered by each of the Company and the
Guarantor and constitutes their legal, valid and binding obligation, enforceable
against the Company and the Guarantor in accordance with its terms.
4. Conditions to Effectiveness of Amendment No. 3. This Amendment No. 3
shall be effective only when and if each of the following conditions is
satisfied:
4.1 Secretary's Certificate. The Purchasers shall have received a
certificate executed by the Secretary or Assistant Secretary of each of the
Company and the Guarantor certifying the due authorization of this Amendment No.
3 by the Company and the Guarantor, the incumbency of the officer executing this
Amendment No. 3, and any other legal matters relating to this Amendment No. 3,
all in form and substance satisfactory to the Purchasers and their counsel.
4.2 Consent of Subsidiary Guarantors. Each of the Subsidiary
Guarantors shall have executed and delivered to the Purchasers the Consent of
Guarantors attached to this Amendment No. 3.
4.3 No Default or Event of Default; Accuracy of Representations and
Warranties. After giving effect to this Amendment No. 3, no Default or Event of
Default shall exist and each of the representations and warranties made by the
Company and the Guarantor or any of its Material Domestic Subsidiaries herein
and in or pursuant to the Transaction Documents or any of the Notes shall be
true and correct in all material respects as if made on and as of the date on
which this Amendment No. 3 becomes effective.
4.4 Expense Reimbursements. The Company and the Guarantor shall have
paid or agreed to pay all invoices presented to Company and the Guarantor for
expense reimbursements due to the Purchasers including but not limited to fees
of counsel pursuant to Section 11.1 of the Note Agreement.
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4.5 Execution of Amendment No. 3. The Purchasers shall have received a
counterpart of this Amendment No. 3 duly executed and delivered by the Company,
the Guarantor and the Purchasers.
4.6 Mortgaged Property. The Collateral Agent shall have received
updated abstracts of title for the Mortgaged Property showing the existence of
no Liens thereon subsequent to the recording of the Mortgages.
4.7 Amendment Fee. The Guarantor and the Company shall have paid to
the Purchasers an amendment fee equal to 0.60% of the amount of the aggregate
principal balance of the Notes outstanding of each Purchaser on the effective
date of this Amendment No. 3. Such fee shall be fully earned and nonrefundable
when paid.
4.8 Credit Agreement. The Purchasers shall have received a copy of any
amendment amending the Credit Agreement, duly executed by the Company, Guarantor
and the Lenders described therein amending the affirmative and negative
covenants contained therein in a manner consistent with this Amendment No. 3.
The Purchasers will notify the Company and the Guarantor when each of the
foregoing conditions has been satisfied and when this Amendment No. 3 is deemed
effective.
5. Confirmation of Note Agreement. Except as amended by this Amendment
No. 3, all the provisions of the Note Agreement remain in full force and effect
from and after the date hereof, and the Company and the Guarantor hereby ratify
and confirm the Note Agreement and each of the documents executed in connection
therewith. From and after the date hereof, all references in the Note Agreement
to "this Agreement", "hereof", "herein", or similar terms, shall refer to the
Note Agreement as amended by Amendment Xx. 0, Xxxxxxxxx Xx. 0 and this Amendment
No. 3. Each of the Company and the Guarantor also ratifies and confirms that the
Security Documents remain in full force and effect in accordance with their
terms and are not impaired or affected by this Amendment No. 3.
6. Counterparts. This Amendment No. 3 may be signed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Delivery of an executed
signature page to this Amendment No. 3 by facsimile transmission shall be as
effective as delivery of a manually signed counterpart.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties have caused this Amendment No. 3 to be
duly executed as of the day and year first above written.
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
-------------------------------
Its: Vice President, Finance
ONEIDA LTD.
By: /s/ XXXXX X. XXXXX
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Its: Chief Financial Officer
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ X.X. XXXXXXX
-------------------------------
By: /s/ XXXXX X. XXXXXXX
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Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/ X.X. XXXXXXX
-------------------------------
By: /s/ XXXXX X. XXXXXXX
-------------------------------
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
-------------------------------
Its: Assistant Vice President
By: /s/ XXXX XXXXXXXXX
-------------------------------
Its: Assistant Secretary
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CONSENT OF SUBSIDIARY GUARANTORS
Each of the undersigned is a party to a Subsidiary Guarantee and is a
Subsidiary Guarantor of the obligations of the Company and the Guarantor under
the Note Agreement referred to in the foregoing Amendment No. 3 to 2001 Amended
and Restated Note Agreement. Each of the undersigned Subsidiary Guarantors
hereby (a) consents to the foregoing Amendment No. 3, (b) acknowledges that,
notwithstanding the execution and delivery of the foregoing Amendment No. 3, the
obligations of each of the undersigned Subsidiary Guarantors are not impaired or
affected and the Subsidiary Guarantee continues in full force and effect, and
(c) ratifies and affirms the terms and provisions of the Subsidiary Guarantee.
IN WITNESS WHEREOF, each of the undersigned has executed and delivered
this Consent of Subsidiary Guarantors as of the 24th day of April, 2003.
BUFFALO CHINA, INC. DELCO INTERNATIONAL LTD.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXX X. XXXXX
------------------------------- -------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President, Finance Title: Vice President, Finance
ENCORE PROMOTIONS, INC. SAKURA, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXX X. XXXXX
------------------------------- -------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President, Finance Title: Vice President, Finance
THC SYSTEMS INC. KENWOOD SILVER COMPANY, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXX X. XXXXX
------------------------------- -------------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Vice President, Finance Title: Vice President, Finance
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EXHIBIT A
Schedule 6.19
Lean Manufacturing Implementation Schedule
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