EXHIBIT 10.41
LIMITED WAIVER AND AMENDMENT NO. 5
TO
2001 AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
This Limited Waiver and Amendment (the "Waiver and Amendment"), dated
as of December 12, 2003, is by and among THC SYSTEMS, INC., a New York
corporation (the "Company"), ONEIDA LTD., a New York corporation (the
"Guarantor"), ALLSTATE INSURANCE COMPANY ("Allstate"), ALLSTATE LIFE INSURANCE
COMPANY ("Allstate Life") and PACIFIC LIFE INSURANCE COMPANY (together with
Allstate and Allstate Life, the "Purchasers").
R E C I T A L S
A. Company, Guarantor and Purchasers are parties to the 2001 Amended and
Restated Note Purchase Agreement dated as of May 1, 2001 pertaining to those
certain notes with a maturity date of May 31, 2005, as amended by a Waiver and
Amendment No. 1 to 2001 Amended and Restated Note Agreement dated as of December
7, 2001, an Amendment No. 2 to 2001 Amended and Restated Note Agreement dated as
of April 23, 2002, an Amendment No. 3 to 2001 Amended and Restated Note
Agreement dated as of April 24, 2003 and a Limited Waiver and Amendment No. 4 to
2001 Amended and Restated Note Purchase Agreement dated as of October 31, 2003
(as so amended or otherwise modified, the "Note Agreement").
B. The Company and the Guarantor have requested that the Purchasers waive
(i) payment of the mandatory principal payment due to the Purchasers on November
1, 2003 in the amount of $3,890,000 pursuant to Section 2.1(a) of the Note
Agreement (the "Sinking Fund Payment") until January 30, 2004 and (ii) the
Events of Default arising out of the Company's and the Guarantor's failure to
comply with Sections 7.12(a), (b), (c) and (d) of the Note Agreement for the
Fiscal Quarter ended October 25, 2003.
C. Each of the Purchasers are willing to grant the waivers requested by the
Company and the Guarantor subject to and upon the terms and conditions set forth
herein.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Waiver and Amendment
which are not otherwise defined shall have the meanings given to those terms in
the Note Agreement.
2. Waiver. The Purchasers hereby waive, for the period commencing on the
Effective Date (as defined below) of this Waiver and Amendment and ending on
January 30, 2004 (the "Waiver Period"), (a) payment of the Sinking Fund Payment
and (b) the Events of Default created as a result of Guarantor's failure to
comply with Sections 7.12(a), (b), (c) and (d) of the Note Agreement for the
Fiscal Quarter ended October 25, 2003; provided that upon the expiration of the
Waiver Period, the waiver provided for herein shall be immediately (without cure
period or notice) and automatically terminated in its entirety and be of no
force and effect as if the waiver had never been granted; provided further that
(x) in the event that any other creditor, or group of creditors, of the
Guarantor or any of its Subsidiaries with claims aggregating in excess of
$1,000,000, (A) accelerates the obligations of the Guarantor or such Subsidiary
to such creditor or group of creditors, (B) commences enforcement of their
rights and remedies in respect of the obligations of the Guarantor or such
Subsidiary to such creditor or group or creditors, or (C) takes any other action
against the Guarantor or any such Subsidiary to improve their position as
creditors of the Guarantor or such Subsidiary (it being understood that none of
a meeting among lenders to discuss options and alternatives, the mere sending of
a notice of default or reservation of rights or the charging of a customary work
fee shall constitute such an action) or (y) the Guarantor or any of its
Subsidiaries makes any voluntary prepayments in respect of the $2,000,000
Promissory Note issued by the Guarantor dated September 20, 2003 or voluntarily
reduces the Commitment under the Credit Agreement, the waiver provided for
herein shall be immediately (without cure period or notice) and automatically
terminated in its entirety and be of no force and effect as if the waiver had
never been granted. This waiver is limited to payment of the Sinking Fund
Payment and the Guarantor's and the
Company's failure to comply with Section 7.12(a), (b), (c) and (d) of the Note
Agreement as of October 25, 2003 and shall not constitute or be construed as a
waiver of any other presently existing or future Defaults or Events of Default.
3. Amendment to Section 3.1(e) of the Note Agreement. Section 3.1(e) is
amended in its entirety to read as follows:
"(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 (i) as indicated on the financial statements
described in the foregoing paragraph (d) of this Section 3.1 and (ii)
that may arise or may have arisen in connection with charges related
to FAS 87. For any representations and warranties made on or after the
Amendment No. 5 Effective Date, since January 27, 2001, there has been
no material adverse change in the business, assets, operations,
prospects or condition, financial or otherwise, of the Guarantor and
its Subsidiaries, taken as a whole, and no sale, transfer or other
disposition of a material part of the assets or business of the
Guarantor or any Subsidiary, except for any material adverse change
that has been publicly disclosed or otherwise disclosed in writing to
the Purchasers on or before the Amendment No. 5 Effective Date."
4. Amendment to Section 5.1 of the Note Agreement. Section 5.1 of the Note
Agreement is hereby amended by inserting the following new defined term in the
appropriate alphabetical order:
""Amendment No. 5 Effective Date" means the date on which all the
conditions to the Limited Waiver and Amendment No. 5, dated December
12, 2003, have been satisfied.".
5. Representation and Warranties. Each of the Guarantor and the Company
represents and warrants to the Purchasers that the following statements are
true, correct and complete:
(a) Representations and Warranties. Each of the representations and
warranties made by the Guarantor and the Company in the Note Agreement is true
and correct on and as of the date of this Waiver and Amendment.
(b) No Default or Event of Default. After giving effect to this Waiver
and Amendment, no Default or Event of Default has occurred and is continuing.
(c) Execution, Delivery and Enforceability. This Waiver and Amendment
has been duly and validly executed and delivered by each of the Guarantor, the
Company and each Subsidiary Guarantor and constitutes each such Person's legal,
valid and binding obligation, enforceable against such Person in accordance with
its terms.
6. Covenants. In order to induce the Purchasers to enter into this Waiver
and Amendment, each of the Guarantor and the Company hereby agrees to the
following covenants, the failure to perform any of which will be an additional
Event of Default under the Note Agreement:
(a) Strategic Plans. The Guarantor shall continue to work with M&T
Bank with respect to the strategic plans of the Guarantor.
(b) Financial Forecast. The Guarantor shall (i) continue to work with
the Purchasers and Xxxxxxx & Marsal regarding the financial forecast delivered
pursuant to paragraph 6(c) of the Limited Waiver and Amendment No. 4 dated as of
October 31, 2003 (including updating such financial forecast) and (ii) deliver a
comprehensive report no later than December 22, 2003 updating the status of the
Guarantor's cost-saving plan involving the five manufacturing sites outlined in
the Guarantor's October 31, 2003 press release.
(c) Lender Waiver Termination Notice. The Guarantor shall, upon
receiving notification from the Lenders that they intend to terminate the waiver
referred to in Section 7(e) of this Waiver and Amendment, immediately notify
Xxxxxxx and the Purchasers thereof.
(d) Delivery of SEC Letters. The Guarantor shall have delivered to the
Purchasers no later than December 18, 2003 copies of (i) all correspondence and
documents received by the Company, the Guarantor or any of its Subsidiaries from
the Securities Exchange Commission (the "SEC") on or after January 1, 2002 and
(ii) all correspondence and documents prepared and produced by the Guarantor or
any of its Subsidiaries for the SEC on or after January 1, 2002, including, but
not limited to, all correspondence and documents received from or delivered to
the SEC, Division of Corporation Finance, in connection with the Guarantor's
Form 10K for the year ended January 25, 2003 and all correspondence and
documents received from or delivered to the SEC, Division of Enforcement, but
excluding any document publicly filed with the SEC.
7. Conditions to Effectiveness of Waiver and Amendment. This Waiver and
Amendment shall be effective on the date (the "Effective Date") when and if each
of the following conditions is satisfied:
(a) Consent of Subsidiary Guarantors. Each of the Subsidiary
Guarantors shall have executed and delivered to Xxxxxxx XxXxxxxxx LLP
("Xxxxxxx") the Consent of Subsidiary Guarantors attached to this Waiver and
Amendment.
(b) No Default or Event of Default; Accuracy of Representations and
Warranties. The Guarantor and the Company shall deliver to each of the
Purchasers a certificate of a Financial Officer certifying that, after giving
effect to this Waiver and Amendment, no Default or Event of Default shall exist
and each of the representations and warranties made by the Guarantor or any of
its Subsidiaries herein and in or pursuant to the Transaction Documents shall be
true and correct in all material respects as if made on and as of the date on
which this Waiver and Amendment becomes effective.
(c) Expense Reimbursements. The Guarantor shall have paid all
reasonable invoices presented to the Guarantor for expense reimbursements
(including reasonable attorneys' and financial advisors' fees and disbursements)
due to the Purchasers in accordance with Section 11.1 of the Note Agreement.
(d) Execution by Purchasers. Xxxxxxx shall have received a counterpart
of this Waiver and Amendment duly executed and delivered by the Guarantor, the
Company, and each Purchaser.
(e) Waiver and Amendment Pursuant to Credit Agreement. Xxxxxxx shall
have received a copy of an executed waiver of any Default or Event of Default
arising under the Credit Agreement, duly executed by the Guarantor, the
Administrative Agent and the Lenders, (i) deferring the scheduled reduction in
the Lenders' Revolving Commitments (as defined in the Credit Agreement) to no
earlier than January 30, 2004 and (ii) waiving until January 30, 2004 any
Default or Event of Default arising from failure to satisfy any financial
covenants under Section 6.11 of the Credit Agreement.
(f) Third Quarter 2003 Results. The Guarantor shall have delivered to
the Purchasers, Xxxxxxx and Xxxxxxx & Marsal consolidated and consolidating
balance sheet, income statement and cash flow statement for the Guarantor and
its Subsidiaries for the third Fiscal Quarter of 2003 with all supporting
schedules thereto (including, but not limited to, reserve adjustments).
8. Termination. Notwithstanding the occurrence of the Effective Date, the
effect of Section 2 of this Waiver and Amendment shall terminate and be of no
further force or effect upon (i) three (3) Business Days written notice from the
Purchasers that they have determined in their sole discretion that (x)
negotiations with any designated potential investor regarding the restructuring
of obligations under the Note Agreement are not proceeding in a manner that is
satisfactory to the Purchasers or (y) the restructuring of obligations under the
Note
Agreement that has been requested by any designated potential investor is not
acceptable to the Purchasers or (ii) the termination of the waiver referred to
in Section 7(e) of this Waiver and Amendment.
9. Further Assurances. Each of the Guarantor and the Company agrees, at its
own expense, to execute, acknowledge, deliver and cause to be duly filed all
such further instruments and documents and take all such actions as the
Collateral Agent may from time to time reasonably request to better assure,
preserve, protect and perfect the Security Interest (as defined in the Security
Agreement) and the rights and remedies created thereby. In addition, as further
security for payment and performance of the obligations under the Note Agreement
and as consideration for the Purchaser's agreement to enter into this Waiver and
Amendment, the Guarantor and the Company hereby further agrees to grant a
perfected pledge and security interest in any additional collateral as the
Collateral Agent may reasonably request.
10. Release. For purposes of this Section, the following terms shall have
the following definitions:
(a) "Related Parties" shall mean, with respect to any released party,
such party's parents, subsidiaries, affiliates, successors, assigns,
predecessors in interest, officers, directors, employees, agents,
representatives, attorneys, financial advisors, accountants and shareholders, if
any.
(b) "Claims" shall mean any and all claims, losses, debts,
liabilities, demands, obligations, promises, acts, omissions, agreements, costs,
expenses, damages, injuries, suits, actions, causes of action, including without
limitation, any and all rights of setoff, recoupment or counterclaim of any kind
or nature whatsoever, in law or in equity, known or unknown, suspected or
unsuspected, contingent or fixed.
Excluding only the continuing obligations of the Purchasers under the
express terms of the Note Agreement, the Transaction Documents and this Waiver
and Amendment, each of the Guarantor and the Company hereby releases, acquits
and forever discharges the Purchasers, and each of them, and their respective
Related Parties, of and from any and all Claims arising out of, related or in
any way connected with the Note Agreement, the Transaction Documents or the
transactions contemplated by any thereof, including, without limitation, any
action or failure to act, prior to the execution of this Waiver and Amendment,
in response to or otherwise in connection with the events or circumstances
arising under or otherwise related to the Note Agreement, the Transaction
Documents or any Defaults or Events of Default occurring under the Note
Agreement or the Transaction Documents.
11. Acknowledgement. Each of the Guarantor and the Company hereby confirms
and acknowledges as of the date hereof that it is validly and justly indebted to
the Purchasers for the payment of all obligations under the Note Agreement and
the Notes without offset, defense, cause of action or counterclaim of any kind
or nature whatsoever.
12. Confirmation of Note Agreement and Security Documents. Except as
amended by this Waiver and Amendment, all the provisions of the Note Agreement
remain in full force and effect from and after the date hereof, and each of the
Guarantor and the Company hereby ratifies and confirms the Note Agreement and
each of the documents executed in connection therewith. This Waiver and
Amendment shall be limited precisely as written and shall not be deemed (a) to
be a consent granted pursuant to, or a waiver or modification of, any other term
or condition of the Note Agreement or any of the instruments or agreements
referred to therein or (b) to prejudice any right or rights which the Purchasers
may now have or have in the future under or in connection with the Note
Agreement or any of the instruments or agreements referred to therein. 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 this Waiver and Amendment. Each of the Guarantor and the Company 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
Waiver and Amendment.
13. Counterparts. This Waiver and Amendment 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 Waiver and Amendment by facsimile or as an electronic
attachment to an email transmission shall be as effective as delivery of a
manually signed counterpart.
14. Governing Law. This Waiver and Amendment shall be governed by and
construed in accordance with the internal laws of the State of Illinois.
15. Time is of the Essence. Time is of the essence with respect to all
terms set forth in this Waiver and Amendment.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have caused this Waiver and Amendment to be
duly executed as of the day and year first above written.
ONEIDA LTD.
By: /s/ XXXXX X. XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
ALLSTATE INSURANCE COMPANY
By: /s/ XXXXXXX XXXXXX
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
By: /s/ XXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title:
Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXXX XXXXXX
-----------------------------------
Name: Xxxxxxx Xxxxxx
Title:
By: /s/ XXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title:
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ XXXXXX XXXX
-----------------------------------
Name: Xxxxxx Xxxx
Title: Assistant Vice President
By: /s/ XXXX X. XXXXXXXXX
-----------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Assistant Secretary
CONSENT OF SUBSIDIARY GUARANTORS
Each of the undersigned is a party to a Subsidiary Guarantee
Agreement, a Subsidiary Subordination Agreement and one or more Security
Documents and is a Subsidiary Guarantor of the obligations of the Company under
the Note Agreement referred to in the foregoing Limited Waiver and Amendment No.
5 to 2001 Amended and Restated Note Purchase Agreement (the "Waiver and
Amendment"). Each of the undersigned Subsidiary Guarantors hereby (a) consents
to the foregoing Waiver and Amendment, (b) acknowledges that, notwithstanding
the execution and delivery of the foregoing Waiver and Amendment, the
obligations of each of the undersigned Subsidiary Guarantors are not impaired or
affected and the Subsidiary Guarantee Agreement, the Subsidiary Subordination
Agreement and Security Documents continue in full force and effect, and (c)
ratifies and affirms the terms and provisions of the Subsidiary Guarantee
Agreement, the Subsidiary Subordination Agreement and Security Documents. All
capitalized terms used herein which are not otherwise defined shall have the
meanings given to those terms in the Note Agreement.
Each of the undersigned hereby agree, at its own expense, to execute,
acknowledge, deliver and cause to be duly filed all such further instruments and
documents and take all such actions as the Collateral Agent may from time to
time reasonably request to better assure, preserve, protect and perfect the
Security Interest (as defined in the Security Agreement) and the rights and
remedies created thereby. In addition, as further security for payment and
performance of the obligations under the Subsidiary Guarantee Agreement and as
consideration for the Purchasers' agreement to enter into the Waiver and
Amendment, each of the undersigned hereby further agrees to grant a perfected
pledge and security interest in any additional collateral as the Collateral
Agent may reasonably request.
Excluding only the continuing obligations of the Purchasers under the
express terms of the Note Agreement, the Transaction Documents and Waiver and
Amendment, the undersigned hereby releases, acquits and forever discharges the
Purchasers, and each of them, and their respective Related Parties (as defined
below) of and from any and all Claims (as defined below) arising out of, related
or in any way connected with the Note Agreement, the Transaction Documents or
the transactions contemplated by any thereof, including, without limitation, any
action or failure to act, prior to the execution of the Waiver and Amendment, in
response to or otherwise in connection with the events or circumstances arising
under or otherwise related to the Note Agreement, the Transaction Documents or
any Defaults or Events of Default occurring under the Note Agreement or the
Transaction Documents.
"Related Parties" shall mean, with respect to any released party, such
party's parents, subsidiaries, affiliates, successors, assigns, predecessors in
interest, officers, directors, employees, agents, representatives, attorneys,
accountants and shareholders, if any.
"Claims" shall mean any and all claims, losses, debts, liabilities,
demands, obligations, promises, acts, omissions, agreements, costs, expenses,
damages, injuries, suits, actions, causes of action, including without
limitation, any and all rights of setoff, recoupment or counterclaim of any kind
or nature whatsoever, in law or in equity, known or unknown, suspected or
unsuspected, contingent or fixed.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the undersigned has executed and delivered this
Consent of Subsidiary Guarantors as of the 12th day of December, 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: Chief Financial Officer Title: Chief Financial Officer
ENCORE PROMOTIONS, INC. SAKURA, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXX X. XXXXX
-------------------------- --------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
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: Chief Financial Officer Title: Chief Financial Officer
ONEIDA SILVERSMITHS INC ONEIDA FOOD SERVICE, INC.
By: /s/ XXXXX X. XXXXX By: /s/ XXXXX X. XXXXX
-------------------------- --------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer Title: Chief Financial Officer
