EXHIBIT 4(a)(iii)
SECURITY AGREEMENT
This SECURITY AGREEMENT, dated as of April 27, 2001 (this "Agreement"),
is by and among ONEIDA LTD., a New York corporation (the "Borrower"), THC
SYSTEMS, INC., a New York corporation and a wholly-owned subsidiary of the
Borrower ("THC"), the other subsidiaries of the Borrower which are signatories
hereto (THC and each such subsidiary individually a "Guarantor" and
collectively, the "Guarantors"; the Guarantors and the Borrower are referred to
collectively herein as the "Grantors") and THE CHASE MANHATTAN BANK, a New York
banking corporation ("Chase"), as collateral agent (in such capacity, the
"Collateral Agent") for the Secured Parties (as defined below). All capitalized
terms used herein shall have the respective meanings given to them in Section
1.01 hereof.
R E C I T A L S
A. Pursuant to a Note Agreement, dated as of November 15, 1996 (such
agreement, as has been or hereafter may be modified, amended, renewed or
replaced, the "1996 Note Agreement"), by and among the Borrower, THC and
Allstate Life Insurance Company, Allstate Insurance Company, and Pacific Life
Insurance Company (successor to Pacific Mutual Life Insurance Company
(individually, a "Noteholder" and collectively, the "Noteholders"), THC has
issued and sold to the Noteholders $35,000,000 aggregate principal amount of its
7.49% Senior Notes due November 1, 2008 (the "1996 Notes"). Pursuant to a Note
Agreement, dated as of January 1, 1992 (such agreement, as has been or hereafter
may be modified, amended, renewed or replaced, the "1992 Note Agreement"), by
and among the Borrower and the Noteholders, the Borrower has issued and sold to
the Noteholders $30,000,000 aggregate principal amount of its 8.52% Senior Notes
due January 15, 2002 (the "1992 Notes"). The 1992 Note Agreement and the 1996
Note Agreement 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."
B. Pursuant to that certain Amended and Restated Credit Agreement,
dated as of the date hereof (as may be modified, amended, renewed or replaced,
the "Credit Agreement"), by and among the Borrower, Chase, as the Administrative
Agent (in such capacity, the "Administrative Agent"), and the financial
institutions parties thereto (collectively, the "Lenders"), the Lenders have
made available to the Borrower certain credit facilities in a current aggregate
principal amount of up to $275,000,000 (all amounts outstanding in respect of
said credit facilities being hereinafter collectively referred to as the
"Loans").
X. Xxxxx has established a $2,500,000 working capital line of credit
(the "Chase Working Capital Facility") in favor of Borrower pursuant to a Grid
Demand Promissory Note dated June 7, 2000 (as may be modified, amended, renewed
or replaced, the "Chase Working Capital Note"), under which Chase may make
working capital loans up to an aggregate principal amount of $2,500,000 (the
"Chase Loans").
D. Certain of the Lenders from time to time issue trade and standby
letters of credit and bankers' acceptances for the benefit of the Borrower and
its Subsidiaries, or purchase a participation interest therein.
E. The Borrower and its Subsidiaries from time to time enter into
hedging agreements with one or more Lenders or their Affiliates (as hereafter
defined) to manage or hedge certain interest rate, currency exchange rate or
commodity price risks inherent in the conduct of the Borrower's business (as may
be modified, amended, renewed or replaced, collectively, the "Hedging
Agreements").
F. The Bank of Nova Scotia ("Scotiabank") has established a precious
metal consignment line ("Scotiabank Metal Line") in favor of Borrower pursuant
to a letter agreement dated October 8, 1986 (as modified, amended, renewed or
replaced, the "Scotiabank Metal Agreement"). Under the Scotiabank Metal Line,
Scotiabank consigns to Borrower quantities of silver and gold bullion.
G. In connection with the Credit Agreement and in order to induce the
Lenders to make the Loans thereunder, the Guarantors have guaranteed to the
Lenders the payment of the Loans and all other obligations of the Borrower
arising in connection with transactions contemplated by the Credit Agreement.
Similarly, the Guarantors
have guaranteed to the Noteholders the payment of the principal of, and premium
(if any) and interest on, the Notes and the payment of all other obligations of
the Borrower and THC under the Notes and the Note Agreements.
H. The Credit Agreement and the Note Agreements require the Borrower
and the Guarantors to grant security interests in or pledge certain of their
respective assets to secure the Borrower's or THC's obligations under the Credit
Agreement and the Note Agreements.
I. The parties hereto desire that the collateral to be provided by the
Grantors will secure ratably for the benefit of the Lenders, Chase, the
Noteholders, Scotiabank and the Issuing Banks the obligations of the Grantors
under the Credit Agreement, the Note Agreements, the Reimbursement Agreements in
respect of the Secured LCs, the Chase Working Capital Facility, the Secured
Hedging Agreements, the Secured Metal Obligations, and the Subsidiary Guarantee
Agreements.
J. The Secured Parties and the Collateral Agent are entering into a
Collateral Agency and Intercreditor Agreement (as may be modified, amended,
supplemented or replaced, the "Collateral Agent Agreement") dated as of the date
hereof to appoint Chase as their Collateral Agent and to establish their
relative rights with respect to such collateral pursuant to this Agreement and a
Pledge Agreement (as may be modified, amended, supplemented or replaced, the
"Pledge Agreement"), dated as of the date hereof, by and among the Grantors and
the Collateral Agent.
K. The Grantors are executing on the date hereof the Pledge Agreement
in favor of the Collateral Agent to more fully grant and perfect a security
interest in certain of such collateral.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Grantors and the Collateral Agent, on behalf of itself and
each Secured Party (and each of their respective successors or assigns), hereby
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definition of Certain Terms Used Herein. As used herein,
the following terms shall have the following meanings:
"1992 Notes" shall have the meaning given to that term in the recitals
to this Agreement.
"1992 Note Agreement" shall have the meaning given to that term in the
recitals to this Agreement.
"1996 Notes" shall have the meaning given to that term in the recitals
to this Agreement.
"1996 Note Agreement" shall have the meaning given to that term in the
recitals to this Agreement.
"Account Debtor" shall mean any Person who is or who may become
obligated to any Grantor under, with respect to, or on account of an Account.
"Accounts" shall mean any and all right, title and interest of any
Grantor to payment for goods and services sold or leased, including chattel
paper and any right evidenced by chattel paper, whether due or to become due,
whether or not it has been earned by performance, and whether now or hereafter
acquired or arising in the future, including accounts receivable from Affiliates
of the Grantors.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any rights to stoppage in transit,
replevin, reclamation and resales, and all related security interests, liens and
pledges, whether voluntary or involuntary, in each case whether now existing or
owned or hereafter arising or acquired.
"Administrative Agent" shall have the meaning given to that term in the
recitals to this Agreement.
"Affiliate" shall mean, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such Person.
"Borrower" shall have the meaning given to that term in the first
paragraph of this Agreement.
"Chase" shall have the meaning given to that term in the first
paragraph of this Agreement.
"Chase Loans" shall have the meaning assigned to that term in the
recitals to this Agreement.
"Chase Working Capital Facility" shall have the meaning assigned to
that term in the recitals to this Agreement.
"Chase Working Capital Note" shall have the meaning assigned to that
term in the recitals to this Agreement.
"Collateral" shall mean all (a) Accounts Receivable, (b) Documents, (c)
Equipment, (d) Fixtures, (e) General Intangibles, (f) Inventory, (g) cash on
hand and in Deposit Accounts, (h) Investment Property, (i) Instruments, and (j)
Proceeds, in each case whether now owned or hereafter acquired.
"Collateral Agent" shall have the meaning given to that term in the
first paragraph of this Agreement.
"Collateral Agent Agreement" shall have the meaning given to that term
in the recitals to this Agreement.
"Collateral Documents" shall mean, collectively, this Agreement, the
Pledge Agreement, the Copyright Security Agreement, the Patent Security
Agreement, the Trademark Security Agreement, any Uniform Commercial Code
financing statements, any other documents filed with governmental authorities to
perfect, establish priority or give public notice of the security interests
granted by this Agreement or the Pledge Agreement, and any certificate or other
document contemplated by or delivered pursuant to this Agreement or the Pledge
Agreement.
"Commitments" shall mean the commitments of the Lenders to make Loans
under the Credit Agreement in an aggregate amount not to exceed $275,000,000.
"Commodity Account" shall mean an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" shall mean a commodity futures contract, an option
on a commodity futures contract, a commodity option or any other contract that,
in each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer" shall mean a Person for whom a Commodity
Intermediary carries a Commodity Contract on its books.
"Commodity Intermediary" shall mean (a) a Person who is registered as a
futures commission merchant under the federal commodities laws or (b) a Person
who in the ordinary course of its business provides clearance or settlement
services for a board of trade that has been designated as a contract market
pursuant to federal commodities laws.
"Copyright License" shall mean any written agreement, now or hereafter
in effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean all of the following: (a) all copyright rights
in any work subject to the copyright laws of the United States, whether as
author, assignee, transferee or otherwise, and (b) all registrations and
applications for registration of any such copyright in the United States,
including registrations, recordings, supplemental registrations and pending
applications for registration in the United States Copyright Office, including
those listed on Schedule I.
"Copyright Security Agreement" shall mean the Copyright Security
Agreement in substantially the form of Exhibit A annexed hereto and being
executed concurrently herewith to be filed in the United States Copyright
Office.
"Credit Agreement" shall have the meaning given to that term in the
recitals to this Agreement.
"Deposit Account" means a demand, time, savings, passbook or like
account maintained with a bank, savings and loan association, credit union or
other financial institutions located in the United States, or a branch of any of
the foregoing.
"Documents" shall mean all documents of title and all files, records,
ledger sheets and documents covering or relating to any of the Collateral.
"Entitlement Holder" shall mean a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person acquires a Security Entitlement by virtue
of Section 8-501(b)(2) or (3) of the Uniform Commercial Code, such Person is the
Entitlement Holder.
"Equipment" shall mean all equipment, furniture, and furnishings,
tools, parts, supplies, and all other goods and tangible personal property
(other than Inventory), and all improvements, accessions or appurtenances
thereto, that are now or hereafter owned by any Grantor and located in the
United States. The term Equipment shall include Fixtures owned by any Grantor
and located in the United States.
"Event of Default" shall mean (i) an event of default as such term may
be defined in the Credit Agreement or one of the Note Agreements or in any of
the other Transaction Documents evidencing indebtedness or obligations in excess
of $3,500,000, and (ii) any event or condition which, under the terms of the
Credit Agreement or one of the Note Agreements, or under any of the other
Transaction Documents evidencing indebtedness or obligations in excess of
$3,500,000, would allow a Secured Party to accelerate or declare due and payable
indebtedness or obligations owing under any of such Transaction Documents or
require the Borrower or any of the Guarantors to prepay, redeem, defease, or
provide cash collateral for, any such indebtedness or obligations.
"Fair Market Value" (a) when used in connection with a Security traded
on a securities exchange or reported by the National Association of Securities
Dealers, Inc. Automated Quotation System, shall mean the closing price thereof
or, in case there is no closing price, the average of the closing bid and asked
price, (b) when used in connection with a Security which is not traded on a
securities exchange or reported by the National Association of Securities
Dealers, Inc. Automated Quotation System, shall mean the fair market value
thereof as determined in good faith by the Collateral Agent, and (c) when used
in connection with an Instrument or debt security, shall mean the outstanding
principal amount thereof.
"Financial Asset" shall mean (a) a Security, (b) an obligation of a
Person or a share, participation or other interest in a Person or in property or
an enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the Uniform
Commercial Code. As the context requires, the term Financial Asset shall mean
either the interest itself or the means by which a Person's claim to it is
evidenced, including a certificated or uncertificated Security, a certificate
representing a Security or a Security Entitlement.
"Fixtures" shall mean all items of Equipment located in the United
States, whether now owned or hereafter acquired, of any Grantor that become so
related to particular real estate that an interest in them arises under any real
estate law applicable thereto.
"General Intangibles" shall mean all choses in action and causes of
action and all other intangible personal property of any Grantor of every kind
and nature (other than Accounts Receivable) now owned or hereafter acquired by
any Grantor, including corporate or other business records, indemnification
claims, contract rights (including rights under leases, whether entered into as
lessor or lessee, and other agreements), Intellectual Property, goodwill,
registrations, franchises, tax refund claims and any letter of credit,
guarantee, claim, security interest or other security held by or granted to any
Grantor to secure payment by an Account Debtor of any of the Accounts
Receivable.
"Grantors" shall have the meaning given to that term in the first
paragraph of this Agreement.
"Guarantors" shall have the meaning given to that term in the first
paragraph of this Agreement.
"Hedging Agreements" shall have the meaning given to that term in the
recitals to this Agreement.
"Indemnitee" shall mean, with respect to any Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Affiliates.
"Instrument" shall mean a negotiable instrument or any other writing
which evidences a right to the payment of money and is not itself a security
agreement or lease and is of a type which in the ordinary course of business in
transferred by delivery with any necessary endorsement or assignment.
"Intellectual Property" shall mean all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter acquired
by any Grantor, including inventions, designs, Patents, Copyrights, Licenses,
Trademarks, trade secrets, confidential or proprietary technical and business
information, know-how, show-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation
created or owned by any Grantor, registrations and franchises, and all
additions, improvements and accessions to, and books and records describing or
used in connection with, any of the foregoing.
"Inventory" shall mean all goods of any Grantor, whether now owned or
hereafter acquired, held for sale or lease, or furnished or to be furnished by
any Grantor under contracts of service, or consumed in any Grantor's business
and located in the United States, including raw materials, intermediates, work
in process, packaging materials, finished goods, semi-finished inventory, scrap
inventory, manufacturing supplies and spare parts, and all such goods that have
been returned to or repossessed by or on behalf of any Grantor.
"Investment Property" shall mean all Securities (whether certificated
or uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of any Grantor, whether now owned or hereafter
acquired by any Grantor.
"Issuing Banks" shall mean, collectively, the Lenders which issue LCs
in their capacity as the issuing bank thereof.
"LCs" shall mean, collectively, the Trade LCs and Standby LCs.
"LC Exposure" shall mean, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding LCs at such time, plus (b) the aggregate
amount of all payments made by the Issuing Banks pursuant to LCs that have not
yet been reimbursed by or on behalf of the Borrower or its Subsidiaries at such
time.
"Lenders" shall have the meaning given to that term in the recitals to
this Agreement.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party, whether
as licensor or licensee (other than those license agreements in existence on the
date hereof or entered into after the date hereof, which by their terms prohibit
the grant of a security interest by such Grantor as licensee thereunder).
"Liens" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security interest
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loans" shall have the meaning given to that term in the recitals to
this Agreement.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospect or condition (financial or otherwise)
of the Grantors taken as a whole, (b) the ability of any Grantor to perform its
obligations under any Collateral Document, (c) the validity or enforceability of
any Collateral Document, or (d) the rights of or benefits available to the
Secured Parties under the Collateral Documents.
"Material Domestic Subsidiary" shall mean any Guarantor and any other
direct or indirect Subsidiary of the Borrower organized under the laws of the
United States of America, any State thereof, or the District of Columbia whose
assets, as of the end of the most recent fiscal quarter, account for 5% or more
of the total assets of the Borrower and its Subsidiaries, taken as a whole,
determined in accordance with generally accepted accounting principles.
"Material Foreign Subsidiary" shall mean any direct or indirect
Subsidiary of the Borrower organized under the laws of a jurisdiction other than
the United States of America, any State thereof, or the District of Columbia
whose assets, as of the end of the most recent fiscal quarter, account for 5% or
more of the total assets of the Borrower and its Subsidiaries, taken as a whole,
determined in accordance with generally accepted accounting principles.
"Maximum Hedging Exposure" shall mean, with respect to any Hedging
Agreement at any given time, the maximum aggregate amount (after giving effect
to any netting agreements) that the Borrower and its Subsidiaries would be
required to pay the counterparty if such Hedging Agreement were terminated at
such time.
"Note Agreements" shall have the meaning given to that term in the
recitals to this Agreement.
"Noteholders" shall have the meaning given to that term in the recitals
to this Agreement.
"Notes" shall have the meaning given to that term in the recitals to
this Agreement.
"Obligations" shall mean (a) the due and punctual payment by the
Borrower and THC, as the case may be, of (i) the principal of the Loans (in an
amount not to exceed $275,000,000), the Chase Loans (in an amount not to exceed
$2,500,000), and the Notes (in an amount not to exceed the principal amount
thereof as of the date hereof), when and as due, whether at maturity, by
acceleration, upon one or more dates set for repayment or otherwise, (ii) any
make-whole premium or other premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, the Chase Loans and the Notes, when and as due,
whether at maturity, by acceleration, upon one or more dates set for prepayment
or otherwise, (iii) each payment required to be made by the Borrower to the
Issuing Banks in respect of any Secured LC under the Reimbursement Agreement
relating thereto, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide cash
collateral, if any, (iv) each payment required to be made by the Borrower to a
Lender (or an Affiliate of a Lender) as counterparty under any Secured Hedging
Agreement, when and as due, (v) the Secured Metal Obligations, and (vi) all
other monetary obligations, including fees, costs, expenses and indemnities,
whether primary, secondary, direct, contingent, fixed or otherwise (including
monetary obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Secured Parties under any of the
Transaction Documents, and (b) the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrower, THC and the
Guarantors under or pursuant to any of the Transaction Documents, including
without limitation, the Subsidiary Guarantee Agreements.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following: (a) all letters patent of
the United States, all registrations and recordings thereof, and all
applications for letters patent of the United States, including registrations,
recordings and pending applications in the United States Patent and Trademark
Office, including those listed on Schedule II, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.
"Patent Security Agreement" shall mean the Patent Security Agreement in
substantially the form of Exhibit B annexed hereto and being executed
concurrently herewith to be filed in the United States Patent and Trademark
Office.
"Perfection Certificate" shall mean a certificate substantially in the
form of Exhibit C hereto, completed and supplemented with the schedules and
attachments contemplated thereby, and duly executed by an executive officer of
the Borrower.
"Permitted Encumbrance" shall mean:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in good faith, provided that if such taxes are being contested
(i) the Borrower has set aside on its books adequate reserves with respect
thereto in accordance with generally accepted accounting principles, and (ii)
the failure to make payment pending such contest could not reasonably be
expected to have a Material Adverse Effect;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in good faith, provided that if such obligations are
being contested (i) the Borrower has set aside on its books adequate reserves
with respect thereto in accordance with generally accepted accounting
principles, and (ii) the failure to make payment pending such contest could not
reasonably be expected to have a Material Adverse Effect;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature, in each case in the ordinary
course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under any Transaction Document; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing indebtedness for borrowed money.
"Person" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, governmental
authority or other entity.
"Pledge Agreement" shall have the meaning given to that term in the
recitals to this Agreement.
"Proceeds" shall mean any consideration received from the sale,
exchange, license, lease or other disposition of any asset or property that
constitutes Collateral, any value received as a consequence of the possession of
any Collateral and any payment received from any insurer or other Person or
entity as a result of the destruction, loss, theft, damage or other involuntary
conversion of whatever nature of any asset or property which constitutes
Collateral, and shall include, (a) any claim of any Grantor against any third
party for (and the right to xxx and recover for and the rights to damages or
profits due or accrued arising out of or in connection with) (i) past, present
or future infringement of any Patent now or hereafter owned by any Grantor, or
licensed under a Patent License, (ii) past, present or future infringement or
dilution of any Trademark now or hereafter owned by any Grantor or licensed
under a Trademark License or injury to the goodwill associated with or
symbolized by any Trademark now or hereafter owned by any Grantor, (iii) past,
present or future breach of any License and (iv) past, present or future
infringement of any Copyright now or hereafter owned by any Grantor or licensed
under a Copyright License and (b) any and all other amounts from time to time
paid or payable under or in connection with any of the Collateral.
"Reimbursement Agreements" shall mean, collectively, any application,
agreement, instrument or commitment (regardless of how denominated) obligating
any Grantor to reimburse, indemnify or provide security or cash collateral to,
any of the Issuing Banks in respect of LCs issued by it.
"Required Banks" shall mean the Lenders and other financial
institutions holding 67% or more of the sum of (i) the then aggregate
outstanding principal amount of the Loans and the Chase Loans, (ii) any unused
Commitments of the Lenders under the Credit Agreement which have not expired or
been terminated or suspended, (iii) the then aggregate LC Exposure under the
Secured LCs, (iv) any unused commitment of an Issuing Bank to issue an LC (to
the extent that such LC would then be a Secured LC if so issued), which
commitment has not expired or been terminated or suspended, (v) the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower and
its Subsidiaries would be required to pay if all of the Secured Hedging
Agreements were terminated at such time, and (vi) the maximum amount of the
Secured Metal Obligations if the Scotiabank Metal Agreement was terminated at
such time.
"Required Noteholders" shall mean Noteholders holding 67% or more of
the aggregate outstanding principal amount of the Notes.
"Required Secured Parties" shall mean the Required Banks and the
Required Noteholders, in each case voting separately as a class.
"Scotiabank" shall have the meaning given to that term in the recitals
to this Agreement.
"Scotiabank Metal Agreement" shall have the meaning given to that term
in the recitals to this Agreement.
"Scotiabank Metal Line" shall have the meaning given to that term in
the recitals to this Agreement.
"Secured Hedging Agreements" shall mean, collectively at any given
time, those Hedging Agreements under which the then Maximum Hedging Exposure
does not exceed $5,000,000. In the event that the Maximum Hedging Exposure for
all of the Hedging Agreements then outstanding exceeds $5,000,000, the term
"Secured Hedging Agreements" shall exclude one or more of the most recent
Hedging Agreements (based upon the date thereof) until the Maximum Hedging
Exposure becomes $5,000,000 or less, provided that if such exclusion causes the
Maximum Hedging Exposure to be less than $5,000,000, then the last Hedging
Agreement so excluded shall become a Secured Hedging Agreement but only to the
extent of the difference between $5,000,000 and the Maximum Hedging Exposure
under the other Secured Hedging Agreements.
"Secured LCs" shall mean, collectively, the Secured Trade LCs and the
Secured Standby LCs.
"Secured Metal Obligations" shall mean an amount (not to exceed
$1,500,000 in the aggregate) equal to the difference between (a) amounts owed by
Borrower under the Scotiabank Metal Agreement, and (b) the value of the metal
bullion (determined in the manner set forth in the Scotiabank Metal Agreement)
recovered or recoverable by Scotiabank upon the occurrence of an Event of
Default.
"Secured Parties" shall mean (a) the Lenders, (b) the Noteholders, (c)
the Issuing Banks, (d) Chase, individually, (e) the Administrative Agent, (f)
the Collateral Agent, (g) Scotiabank, (h) each Lender (or Affiliate of a Lender)
which is a counterparty under a Secured Hedging Agreement, (i) the beneficiaries
of each indemnification obligation undertaken by any Grantor under any
Transaction Document, and (j) the successors and assigns of each of the
foregoing.
"Secured Standby LCs" shall mean, collectively at any given time, those
Standby LCs for which the aggregate LC Exposure thereunder does not exceed
$20,000,000. In the event that the aggregate LC Exposure under all of the
Standby LCs then outstanding exceeds $20,000,000, the term "Secured Standby LCs"
shall exclude one or more of the most recent Standby LCs (based upon the date of
issuance thereof) until such aggregate LC Exposure becomes $20,000,000 or less,
provided that if such exclusion causes such aggregate LC Exposure to be less
than $20,000,000, then the last Standby LC so excluded shall become a Secured
Standby LC but only to the extent of the difference between $20,000,000 and the
aggregate LC Exposure under the other Secured Standby LCs.
"Secured Trade LCs" shall mean, collectively at any given time, those
Trade LCs for which the aggregate LC Exposure thereunder does not exceed
$15,000,000. In the event that the aggregate LC Exposure under all of the Trade
LCs then outstanding exceeds $15,000,000, the term "Secured Trade LCs" shall
exclude one or more of the most recent Trade LCs (based upon the date of
issuance thereof) until such aggregate LC Exposure becomes $15,000,000 or less,
provided that if such exclusion causes such aggregate LC Exposure to be less
than $15,000,000, then the last Trade LC so excluded shall become a Secured
Trade LC but only to the extent of the difference between $15,000,000 and the
aggregate LC Exposure under the other Secured Trade LCs.
"Securities" shall mean any obligations of an issuer or any shares,
participations or other interests in an issuer or in property or an enterprise
of an issuer which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of the issuer, (b) are one of
a class or series or by its terms is divisible into a class or series of shares,
participations, interests or obligations and (c)(i) are, or are of a type, dealt
with or traded on securities exchanges or securities markets or (ii) are a
medium for investment and by their terms expressly provide that they are a
security governed by Article 8 of the Uniform Commercial Code.
"Securities Account" shall mean an account to which a Financial Asset
is or may be credited in accordance with an agreement under which the Person
maintaining the account undertakes to treat the Person for whom the account is
maintained as entitled to exercise rights that comprise the Financial Asset.
"Security Entitlements" shall mean the rights and property interests of
an Entitlement Holder with respect to a Financial Asset.
"Security Interest" shall have the meaning given to that term in
Section 2.01.
"Security Intermediary" shall mean (a) a clearing corporation or (b) a
Person, including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Standby LCs" shall mean, collectively, standby letters of credit
issued by Issuing Banks for the benefit or on the account of the Borrower or any
of its Subsidiaries, and any participation interest therein.
"Subsidiary" shall mean any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the Borrower in the Borrower's consolidated financial
statements if such financial statements were prepared in accordance with
generally accepted accounting principles, as well as any other corporation,
limited liability company, partnership, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity
or more than 50% of the ordinary voting power or, in the case of a partnership,
more than 50% of the general partnership interests are owned, controlled or
held, or (b) that is otherwise controlled, by the Borrower or one or more
subsidiaries of the Borrower or by the Borrower and one or more subsidiaries of
the Borrower.
"Subsidiary Guarantee Agreements" shall mean, collectively, the
subsidiary guarantee agreements executed and delivered by Buffalo China, Inc.,
Encore Promotions, Inc., THC, Delco International Ltd. and Sakura, Inc.
guaranteeing the obligations of the Borrower and THC under the Credit Agreement
and Note Agreements, together with any additional guarantee agreements entered
into by Subsidiaries of the Borrower in favor of the Administrative Agent, the
Lenders or the Noteholders.
"Subsidiary Subordination Agreements" shall mean, collectively, the
subordination agreements executed and delivered by the Borrower, Buffalo China,
Inc., Encore Promotions, Inc., THC, Delco International Ltd. and Sakura, Inc.
subordinating payment of any intra-company indebtedness owed to the Borrower
(other than intra-company indebtedness evidenced by promissory notes pledged to
the Collateral Agent) to the prior payment of the indebtedness under the Credit
Agreement or the Note Agreements, together with any additional subordination
agreements entered into by the Borrower and its Subsidiaries in favor of the
Administrative Agent, the Lenders or the Noteholders.
"THC" shall have the meaning given to that term in the recitals to this
Agreement.
"Trade LCs" shall mean, collectively, trade letters of credit and
bankers' acceptances issued by Issuing Banks for the benefit or on the account
of the Borrower or any of its Subsidiaries, and any participation interest
therein.
"Trademark License" shall mean any written agreement, now or hereafter
in effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or which any Grantor otherwise has the right to
license, or granting to any Grantor any right to use any Trademark now or
hereafter owned by any third party, and all rights of any Grantor under any such
agreement.
"Trademarks" shall mean all of the following: (a) all trademarks,
service marks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, trade dress, logos, other source or
business identifiers, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all registration and recording applications filed in connection
therewith, including registrations and registration applications in the United
States Patent and Trademark Office or any State of the United States, and all
extensions or renewals thereof, including those listed on Schedule III, (b) all
goodwill associated therewith or symbolized thereby and (c) all other assets,
rights and interests that uniquely reflect or embody such goodwill.
"Trademark Security Agreement" shall mean the Trademark Security
Agreement in substantially the form of Exhibit D annexed hereto and being
executed concurrently herewith to be filed in the United States Patent and
Trademark Office.
"Transaction Documents" shall mean, collectively, this Agreement, the
Pledge Agreement, the Security Agreement, the Credit Agreement, the Subsidiary
Guarantee Agreements, the Subsidiary Subordination Agreements, the Note
Agreements, the Reimbursement Agreements for the Secured LCs, the Chase Working
Capital Note, the Secured Hedging Agreements, the Scotiabank Metal Agreement,
the Collateral Documents and any certificate or other document referred to or
provided for therein.
SECTION 1.02. Other Terms. Unless the context otherwise requires, terms
used in this Agreement (whether capitalized or not), other than those set forth
in Section 1.01 or elsewhere in this Agreement, shall have the meanings given to
them in the New York Uniform Commercial Code as in effect from time to time.
ARTICLE II
SECURITY INTEREST
SECTION 2.01. Security Interest. As security for the payment or
performance, as the case may be, in full of the Obligations, each Grantor hereby
bargains, sells, conveys, assigns, sets over, mortgages, pledges, hypothecates
and transfers to the Collateral Agent, its successors and assigns, for the
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to and under the Collateral (the "Security Interest"); provided that (a)
Securities having a Fair Market Value of $7,500 per issuer are excluded from the
Security Interest up to a maximum of $50,000 in the aggregate, (b) the Security
Interest in Securities of a Subsidiary is limited to the Securities of each
Material Domestic Subsidiary and 65% of the issued and outstanding Securities of
each Material Foreign Subsidiary, and (c) Instruments and debt securities having
a Fair Market Value of less than $7,500 per issuer or obligor are excluded from
the Security Interest up to a maximum of $50,000 in the aggregate. Without
limiting the foregoing, the Collateral Agent is hereby authorized to file one or
more financing statements (including fixture filings), continuation statements,
filings with the United States Patent and Trademark Office or United States
Copyright Office (or any successor office or any similar office in any other
country) or other documents for the purpose of perfecting, confirming,
continuing, enforcing or protecting the Security Interest granted by each
Grantor, without the signature of any Grantors, and naming any Grantor or the
Grantors as debtors and the Collateral Agent as secured party.
SECTION 2.02. No Assumption of Liability. The Security Interest is
granted as security only and shall not subject the Collateral Agent or any other
Secured Party to, or in any way alter or modify, any obligation or liability of
any Grantor with respect to or arising out of the Collateral.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the
Collateral Agent and the Secured Parties that:
SECTION 3.01. Title and Authority. Each Grantor has good and valid
rights in and title to the Collateral with respect to which it has purported to
grant a Security Interest hereunder and has full power and authority to grant to
the Collateral Agent the Security Interest in such Collateral pursuant hereto
and to execute, deliver and perform its obligations in accordance with the terms
of this Agreement, without the consent or approval of any other Person other
than any consent or approval which has been obtained.
SECTION 3.02. Filings. (a) The Perfection Certificate has been duly
prepared, completed and executed and the information set forth therein is
correct and complete. Fully executed Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations containing a description of the Collateral
have been delivered to the Collateral Agent for filing in each governmental,
municipal or other office specified in the Perfection Certificate, which are all
the filings, recordings and registrations (other than filings required to be
made in the United States Patent and Trademark Office and the United States
Copyright Office in order to perfect the Security Interest in Collateral
consisting of United States Patents, Trademarks and Copyrights) that are
necessary to publish notice of and protect the validity of and to establish a
legal, valid and perfected security interest in favor of the Collateral Agent
(for the ratable benefit of the Secured Parties) in respect of all Collateral in
which the Security Interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary in any such
jurisdiction, except as provided under applicable law with respect to the filing
of continuation statements.
(b) Each Grantor represents and warrants that a fully executed
Copyright Security Agreement, Patent Security Agreement and Trademark Security
Agreement containing descriptions of all Collateral consisting of Intellectual
Property with respect to United States Patents and United States registered
Trademarks (and Trademarks
for which United States registration applications are pending) and United States
registered Copyrights have been delivered to the Collateral Agent for recording
by the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. Section 261, 15 U.S.C. Section 1060 or 17 U.S.C.
Section 205 and the regulations thereunder, as applicable, and otherwise as may
be required pursuant to the laws of any other necessary jurisdiction, to protect
the validity of and to establish a legal, valid and perfected security interest
in favor of the Collateral Agent (for the ratable benefit of the Secured
Parties) in respect of all Collateral consisting of Patents, Trademarks and
Copyrights in which a security interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and its
territories and possessions, or in any other necessary jurisdiction, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction (other than such actions as
are necessary to perfect the Security Interest with respect to any Collateral
consisting of Patents, Trademarks and Copyrights (or registration or application
for registration thereof) acquired or developed after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02 above, a perfected security interest in all
Collateral in which a security interest may be perfected by filing, recording or
registering a financing statement or analogous document in the United States (or
any political subdivision thereof) and its territories and possessions pursuant
to the Uniform Commercial Code or other similar law in such jurisdictions and
(c) a security interest that shall be perfected in all Collateral in which a
security interest may be perfected upon the receipt and recording of this
Agreement with the United States Patent and Trademark Office and the United
States Copyright Office, as applicable. The Security Interest is and shall be
prior to any other Lien on any of the Collateral, other than Permitted
Encumbrances that have priority over the Security Interest by operation of law
and Liens expressly permitted by the Transaction Documents.
SECTION 3.04. Absence of Other Liens. The Collateral is owned by the
Grantors free and clear of any Lien, except for existing Liens set forth on
Schedule IV annexed hereto. The Grantor has not filed or consented to the filing
of (a) any financing statement or analogous document under the Uniform
Commercial Code or any other applicable laws covering any Collateral, (b) any
assignment in which any Grantor assigns any Collateral or any security agreement
or similar instrument covering any Collateral with the United States Patent and
Trademark Office or the United States Copyright Office or (c) any assignment in
which any Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for Liens expressly permitted pursuant to the Transaction Documents.
ARTICLE IV
COVENANTS
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of
Business.
(a) Each Grantor agrees promptly to notify the Collateral Agent in
writing of any change (i) in its corporate name or in any trade name used to
identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of its chief executive office, its principal
place of business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility),
(iii) in its identity or corporate structure or (iv) in its Federal Taxpayer
Identification Number. Each Grantor agrees not to effect or permit any change
referred to in the preceding sentence unless all filings have been made under
the Uniform Commercial Code or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected first priority security interest in all the Collateral. Each
Grantor agrees promptly to notify the Collateral Agent if any material portion
of the Collateral owned or held by such Grantor is damaged or destroyed.
(b) Each Grantor agrees to maintain, at its own cost and expense, such
complete and accurate records with respect to the Collateral owned by it as is
consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged, but in any event to include complete
accounting records indicating all payments and proceeds received
with respect to any part of the Collateral and, at such time or times as the
Collateral Agent may reasonably request, promptly to prepare and deliver to the
Collateral Agent a duly certified schedule or schedules in form and detail
satisfactory to the Collateral Agent showing the identity, amount and location
of any and all Collateral.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own
cost and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien not
expressly permitted pursuant to the Transaction Documents.
SECTION 4.03 Maintenance of Collateral and Compliance with Laws.
(a) Each Grantor shall keep and maintain at its own cost and consistent
with its past practices satisfactory and complete records of the Collateral,
including, without limitation, a record of all payments received and all credits
granted with respect to the Accounts Receivable. Each Grantor shall furnish to
the Collateral Agent upon request such statements and schedules further
identifying and describing the Collateral as the Collateral Agent may reasonably
request.
(b) Except as otherwise expressly permitted by this Agreement or the
other Transaction Documents, each Grantor agrees to keep and maintain all
Equipment material to the operation of its business in good operating condition,
ordinary wear and tear excepted.
(c) Each Grantor shall comply in all material respects with all
federal, state and local laws, rules, regulations and decrees applicable to the
Collateral, provided that a Grantor may contest the validity or applicability
thereof in good faith by proper proceedings long as such contest will not have a
Material Adverse Effect.
(d) Each Grantor shall maintain and preserve each contract and
agreement included within the Collateral if the failure to do so would have a
Material Adverse Effect, and will not amend or modify any such material contract
or agreement if the amendment or modification would impair the value of the
interest or rights of the Grantor thereunder.
SECTION 4.04. Additional Deliveries and Further Assurances.
(a) Prior to or contemporaneously with the execution of this Agreement,
the Grantors shall cause to be delivered to the Collateral Agent the following
additional instruments or certificates:
(i) the Perfection Certificate, duly completed and executed;
(ii) originals of the Pledge Agreement, Copyright Security
Agreement, Patent Security Agreement and Trademark Security Agreement, duly
executed by each of the Grantors, together with all documents and instruments
required to be delivered thereunder;
(iii) such documents and certificates as the Collateral Agent
or its counsel may reasonably request relating to the organization, existence
and good standing of each Grantor, the due authorization of the Collateral
Documents by each Grantor, and the incumbency of the officers executing any of
the Collateral Documents, all in form and substance reasonably satisfactory to
the Collateral Agent and its counsel;
(iv) such Uniform Commercial Code financing statements and
other documents as the Collateral Agent may reasonably request for the purpose
of perfecting the Security Interest granted by each Grantor;
(v) Lien searches against each Grantor conducted by a Person
reasonably satisfactory to the Collateral Agent in such jurisdictions as the
Collateral Agent may require showing the absence of Liens on the Collateral
except for Liens permitted by this Agreement;
(vi) such opinions of local counsel and foreign counsel to the
Grantors as the Collateral Agent may request and covering the matters set forth
on Exhibit E and Exhibit F, respectively, and such other matters as the
Collateral Agent may request;
(vii) certificates of insurance evidencing the insurance
required to be maintained pursuant to Section 4.11 of this Agreement; and
(viii) with respect to each facility at which Collateral is
located which is leased by the Grantors or on which a mortgage Lien exists,
landlord and/or mortgagee waivers in form and substance reasonably satisfactory
to the Collateral Agent.
(b) Each Grantor 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 request
to better assure, preserve, protect and perfect the Security Interest and the
rights and remedies created hereby, including the payment of any fees and taxes
required in connection with the execution and delivery of this Agreement, the
granting of the Security Interest and the filing of any financing statements
(including fixture filings) or other documents in connection herewith or
therewith. If any amount payable under or in connection with any of the
Collateral shall be or become evidenced by any promissory note or other
instrument, such note or instrument shall be immediately pledged and delivered
to the Collateral Agent, duly endorsed in a manner satisfactory to the
Collateral Agent. Each Grantor agrees that it will use its best efforts to take
such action as shall be necessary in order that all representations and
warranties hereunder shall be true and correct with respect to such Collateral
within 30 days after the date it has been notified by the Collateral Agent of
the specific identification of such Collateral.
SECTION 4.05. Inspection and Verification. The Collateral Agent and
such Persons as the Collateral Agent may reasonably designate shall have the
right, at the Grantors' own cost and expense, to (a) inspect the Collateral, all
records related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantors' affairs with the officers of the Grantors and to verify under
reasonable procedures the validity, amount, quality, quantity, value, condition
and status of, or any other matter relating to, the Collateral, and (b)
following the occurrence of an Event of Default, contact Account Debtors or any
third Person possessing such Collateral for the purpose of making such
verification. The Collateral Agent shall maintain the confidentiality of any
information it gains from such inspection or verification except that
information may be disclosed (a) to the Secured Parties, their Affiliates, and
their directors, officers, employees and agents, including accountants, legal
counsel and other advisors who need to know such information (it being
understood that the Person to whom such disclosure is made will be informed of
the confidential nature of such information and instructed to keep such
information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or the enforcement of rights hereunder, (e) subject to an agreement
containing provisions substantially the same as those of this Section, to any
assignee of or participant in, or any prospective assignee of or participant in,
any of the Obligations, (f) with the prior written consent of the Borrower or
(g) to the extent such information (i) becomes publicly available other than as
a result of a breach of this Section or (ii) becomes available to the Collateral
Agent or any Secured Party on a nonconfidential basis from a source not known by
the Collateral Agent or Secured Party to be under an obligation of
confidentiality with respect thereto.
SECTION 4.06. Taxes; Encumbrances. The Grantors shall pay and discharge
all taxes, assessments, charges, fees or Liens at any time levied or placed on
the Collateral or payable in respect of the Collateral, except (a) Liens created
by the Collateral Documents, (b) Permitted Encumbrances, and (c) taxes,
assessments, changes or fees levied against the Collateral where (i) the
validity or amount thereof is being contested in good faith by proper
proceedings, (ii) the Grantors have set aside on their books adequate reserves
therefor in accordance with generally accepted accounting principles, and (iii)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect. At its option, the Collateral
Agent may discharge all such Liens and all such taxes, assessments, charges or
fees not being contested in accordance with the preceding sentence, and may pay
for the maintenance and preservation of the Collateral, in each case to the
extent any Grantor fails to do so as required by this Agreement or any other
Transaction Document, and each Grantor jointly and severally agrees to reimburse
the Collateral Agent on demand for any payment made or any expense incurred by
the Collateral Agent pursuant to the foregoing authorization; provided, however,
that nothing in this Section 4.06 shall be interpreted as excusing any Grantor
from the performance of, or imposing any obligation on the Collateral Agent or
any Secured
Party to cure or perform, any covenants or other promises of any Grantor with
respect to taxes, assessments, charges, fees or Liens and maintenance as set
forth herein or in the other Transaction Documents.
SECTION 4.07. Assignment of Security Interest. If at any time any
Grantor shall take a security interest in any property having a fair market
value of $25,000 or more of an Account Debtor or any other Person to secure
payment and performance of an Account, such Grantor shall promptly assign such
security interest to the Collateral Agent. Such assignment need not be filed of
public record unless necessary to continue the perfected status of the security
interest against creditors of and transferees from the Account Debtor or other
Person granting the security interest.
SECTION 4.08. Continuing Obligations of the Grantors. Each Grantor
shall remain liable to observe and perform all the conditions and obligations to
be observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the Secured Parties from and against any and
all liability for such performance.
SECTION 4.09. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment, pledge or hypothecation of the
Collateral or shall grant any other Lien in respect of the Collateral, except as
expressly permitted by the Transaction Documents. None of the Grantors shall
make or permit to be made any transfer of the Collateral and each Grantor shall
remain at all times in possession of the Collateral owned by it, except that (a)
Inventory may be sold in the ordinary course of business consistent with past
practice and (b) unless and until the Collateral Agent shall notify the Grantors
that an Event of Default shall have occurred and be continuing and that during
the continuance thereof the Grantors shall not sell, convey, lease, assign,
transfer or otherwise dispose of any Collateral (which notice may be given by
telephone if promptly confirmed in writing), the Grantors may dispose of
Collateral if permitted by the terms of each Transaction Document. Without
limiting the generality of the foregoing, each Grantor agrees that (a) it shall
not permit any Inventory to be in the possession or control of any warehouseman,
bailee, agent or processor at any time unless such warehouseman, bailee, agent
or processor shall have been notified of the Security Interest, (b) it shall use
its best efforts to obtain the written agreement of any such warehouseman,
bailee, agent or processor to hold the Inventory subject to the Security
Interest and the instructions of the Collateral Agent and to waive and release
any Lien held by it with respect to such Inventory, whether arising by operation
of law or otherwise, and (c) it will promptly notify the Collateral Agent in the
event any warehouseman, bailee, agent or processor issues to a Grantor a
negotiable warehouse receipt or other negotiable document with respect to
Inventory and will use its best efforts to cause the Collateral Agent to have a
first priority perfected Lien therein.
SECTION 4.10. Limitation on Modification of Accounts. None of the
Grantors will, without the Collateral Agent's prior written consent, grant any
extension of the time of payment of any of the Accounts Receivable, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof or allow any credit
or discount whatsoever thereon, other than extensions, credits, discounts,
compromises or settlements granted or made in the ordinary course of business
and consistent with its current practices.
SECTION 4.11. Insurance. Each of the Grantors will maintain or caused
to be maintained, at its own expense, with financially sound and reputable
insurance companies (a) casualty insurance covering the Collateral, including
fire, theft and other risks usually insured against by extended coverage, in an
amount not less than the fair market value of the Collateral, and (b) such other
insurance on the Collateral in such amounts (with no greater risk retention) and
against such risks as are customarily maintained by companies of established
repute engaged in the same or similar businesses operating in the same or
similar locations. Each policy of insurance covering the Collateral shall
designate the Collateral Agent as an additional insured and loss payee and shall
provide 30 days minimum written notice of cancellation to the Collateral Agent.
Grantors will furnish Secured Party with certificates evidencing such insurance
or, at the Collateral Agent's request, a copy of each such policy of insurance,
together with such additional insurance information as the Collateral Agent may
reasonably request from time to time. Grantors shall give immediate written
notice to the Collateral Agent and to insurers of loss or damage to the
Collateral and shall promptly file proofs of loss with insurers. Each Grantor
irrevocably makes, constitutes and appoints the Collateral Agent (and all
officers, employees or agents designated by the Collateral Agent) as such
Grantor's true and lawful agent (and attorney-in-fact) for the purpose, during
the continuance of an Event of Default,
of making, settling and adjusting claims in respect of Collateral under policies
of insurance, endorsing the name of such Grantor on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required hereby or to pay any premium in whole or part
relating thereto, the Collateral Agent may, without waiving or releasing any
obligation or liability of the Grantors hereunder or any Event of Default, in
its sole discretion, obtain and maintain such policies of insurance and pay such
premium and take any other actions with respect thereto as the Collateral Agent
deems advisable. All sums disbursed by the Collateral Agent in connection with
this Section 4.11, including reasonable attorneys' fees, court costs, expenses
and other charges relating thereto, shall be payable, upon demand, by the
Grantors to the Collateral Agent and shall be additional Obligations secured
hereby.
SECTION 4.12. Legend. Upon the request of the Collateral Agent, each
Grantor shall legend, in form and manner satisfactory to the Collateral Agent,
its Accounts Receivable and any invoices evidencing or pertaining thereto with
an appropriate reference to the fact that such Accounts Receivable have been
assigned to the Collateral Agent for the benefit of the Secured Parties and that
the Collateral Agent has a security interest therein.
SECTION 4.13. Covenants Regarding Patent, Trademark and Copyright
Collateral.
(a) Each Grantor agrees that it will not, nor will it permit any of its
licensees to, do any act, or omit to do any act, whereby any Patent which is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and agrees that, consistent with its past practices, it
shall continue to xxxx any products covered by a Patent with the relevant patent
number as necessary and sufficient to establish and preserve its maximum rights
under applicable patent laws.
(b) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of Federal or foreign registration to the extent necessary and sufficient to
establish and preserve its maximum rights under applicable law, and (iv) not use
or knowingly permit the use of such Trademark in violation of any third party
rights, in each case in a manner consistent with its past practices.
(c) Each Grantor (either itself or through licensees) will, for each
work covered by a material Copyright, continue to publish, reproduce, display,
adopt and distribute the work with appropriate copyright notice as necessary and
sufficient to establish and preserve its maximum rights under applicable
copyright laws in a manner consistent with its past practices.
(d) Each Grantor shall notify the Collateral Agent immediately if it
knows or has reason to know that any Patent, Trademark or Copyright material to
the conduct of its business may become abandoned, lost or dedicated to the
public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, United States Copyright Office or
any court or similar office of any country) regarding such Grantor's ownership
of any Patent, Trademark or Copyright, its right to register the same, or to
keep and maintain the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States, unless it so
informs the Collateral Agent within 30 days after the end of the fiscal quarter
in which the application is filed and, upon request of the Collateral Agent,
executes and delivers any and all agreements, instruments, documents and papers
as the Collateral Agent may reasonably request to evidence and perfect the
Collateral Agent's security interest in such Patent, Trademark or Copyright, and
each Grantor hereby appoints the Collateral Agent as its attorney-in-fact to
execute and file such writings for the foregoing purposes, all acts of such
attorney being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.
(f) Each Grantor will take all necessary steps that are consistent with
the practice in any proceeding before the United States Patent and Trademark
Office, United States Copyright Office or any office or agency in any political
subdivision of the United States, to maintain and pursue each material
application relating to the Patents, Trademarks and/or Copyrights (and to obtain
the relevant grant or registration) and to maintain each issued Patent and each
registration of the Trademarks and Copyrights that is material to the conduct of
any Grantor's business, including timely filings of applications for renewal,
affidavits of use, affidavits of incontestability and payment of maintenance
fees and, if consistent with good business judgment, to initiate opposition,
interference and cancellation proceedings against third parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright material to the
conduct of any Grantor's business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with good business judgment,
promptly take appropriate action to end such infringement, misappropriation or
dilution, and take such other action as is appropriate under the circumstances
to protect such Collateral.
(h) Upon and during the continuance of an Event of Default, each
Grantor shall use its best efforts to obtain all requisite consents or approvals
from the licensor of each Copyright License, Patent License or Trademark License
to effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
ARTICLE V
POWER OF ATTORNEY
Each Grantor irrevocably makes, constitutes and appoints the Collateral
Agent (and all officers, employees or agents designated by the Collateral Agent)
as such Grantor's true and lawful agent and attorney-in-fact, and in such
capacity the Collateral Agent shall have the right, with power of substitution
for each Grantor and in each Grantor's name or otherwise, for the use and
benefit of the Collateral Agent and the Secured Parties, upon the occurrence and
during the continuance of an Event of Default (a) to receive, endorse, assign
and/or deliver any and all notes, acceptances, checks, drafts, money orders or
other evidences of payment relating to the Collateral or any part thereof; (b)
to demand, collect, receive payment of, give receipt for and give discharges and
releases of all or any of the Collateral; (c) to sign the name of any Grantor on
any invoice or xxxx of lading relating to any of the Collateral; (d) to send
verifications of Accounts Receivable to any Account Debtor; (e) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (f) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (g) to notify, or to require any
Grantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (h) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral for all purposes; provided, however, that nothing herein
contained shall be construed as requiring or obligating the Collateral Agent or
any Secured Party to make any commitment or to make any inquiry as to the nature
or sufficiency of any payment received by the Collateral Agent or any Secured
Party, or to present or file any claim or notice, or to take any action with
respect to the Collateral or any part thereof or the monies due or to become due
in respect thereof or any property covered thereby, and no action taken or
omitted to be taken by the Collateral Agent or any Secured Party with respect to
the Collateral or any part thereof shall give rise to any defense, counterclaim
or offset in favor of any Grantor or to any claim or action against the
Collateral Agent or any Secured Party. It is understood and agreed that the
appointment of the Collateral Agent as the agent and attorney-in-fact of the
Grantors for the purposes set forth above is coupled with an interest and is
irrevocable. The provisions of this Article shall in no event relieve any
Grantor of any of its obligations hereunder or under any other Transaction
Document with respect to the Collateral or any part thereof or impose any
obligation on the Collateral Agent or any Secured Party to proceed in any
particular manner with respect to the Collateral or any part thereof, or in any
way limit the exercise by the Collateral Agent or any Secured Party of any other
or further right which it may have on the date of this Agreement or hereafter,
whether hereunder, under any other Transaction Document, by law or otherwise.
ARTICLE VI
REMEDIES
SECTION 6.01. Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, each Grantor agrees to deliver or make
available each item of Collateral to the Collateral Agent on demand at its
current location, and it is agreed that the Collateral Agent shall have the
right to take any or all of the following actions at the same or different
times: (a) with respect to any Collateral consisting of Intellectual Property,
on demand, to cause the Security Interest to become an assignment, transfer and
conveyance of any of or all such Collateral by the applicable Grantors to the
Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any such
Collateral on such terms and conditions and in such manner as the Collateral
Agent shall determine, and (b) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a secured party under the
Uniform Commercial Code or other applicable law. Without limiting the generality
of the foregoing, each Grantor agrees that the Collateral Agent shall have the
right, subject to the mandatory requirements of applicable law, to sell or
otherwise dispose of all or any part of the Collateral, at public or private
sale or at any broker's board, on any securities exchange or in the
over-the-counter market, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. The Collateral Agent shall be
authorized at any such sale (if it deems it advisable to do so) to restrict the
prospective bidders or purchasers to Persons who will represent and agree that
they are purchasing the Collateral for their own account for investment and not
with a view to the distribution or sale thereof, and upon consummation of any
such sale the Collateral Agent shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the Collateral so sold. Each such
purchaser at any such sale shall hold the property sold absolutely, free from
any claim or right on the part of any Grantor, and each Grantor hereby waives
(to the fullest extent permitted by law) all rights of redemption, stay and
appraisal which such Grantor now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted.
The Collateral Agent shall give the Grantors ten (10) business days'
written notice (which each Grantor agrees is reasonable notice within the
meaning of Section 9-504(3) of the Uniform Commercial Code as in effect in the
State of New York or its equivalent in other jurisdictions) of the Collateral
Agent's intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a
sale at a broker's board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section, any Secured Party may bid
for or purchase, free from any right of redemption, stay, valuation or appraisal
on the part of any Grantor (all said rights being also hereby waived and
released to the fullest extent permitted by law), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
Obligation then due and payable to such Secured Party from any Grantor as a
credit against the purchase price, and such Secured Party may, upon compliance
with the terms of sale, hold, retain and dispose of such property without
further accountability to any Grantor therefor. For purposes hereof a written
agreement to purchase the Collateral or any portion thereof shall be treated as
a sale thereof; the Collateral Agent shall be free to carry out such sale
pursuant to such agreement and no Grantor shall be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Collateral Agent shall have entered into such an agreement, all Events
of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose on this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver.
SECTION 6.02. Application of Proceeds. The Collateral Agent shall apply
the proceeds of any collection or sale of the Collateral, as well as any
Collateral consisting of cash, as follows:
FIRST, to the payment of all costs and expenses incurred by
the Collateral Agent (in its capacity as such hereunder or under any
other Collateral Document) or by the Administrative Agent (in its
capacity as such under the Credit Agreement or under any related loan
documents) in connection with such collection or sale or otherwise in
connection with this Agreement or such other Transaction Documents,
including all court costs and the fees and expenses of its agents and
legal counsel, the repayment of all advances made by the Collateral
Agent or the Administrative Agent hereunder or under any other
Transaction Document on behalf of any Grantor and any other costs or
expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Transaction Document;
SECOND, to the payment to the Secured Parties of all costs,
expenses, liabilities and advances made or incurred by each of them
under the Transaction Documents to enforce its rights to collect
payments for the Obligations owed to it, including all court costs and
the fees and expenses of its agents and legal counsel, all advances
made by a Secured Party under any other Transaction Document on behalf
of any Grantor and any other costs or expenses incurred in connection
with the exercise of any right or remedy under any other Transaction
Document, and if such proceeds are insufficient to repay such amounts
in full, ratably in proportion to the amount of costs, expenses,
liabilities and advances made or incurred by each such Secured Party;
THIRD, to the payment in full of the other Obligations (the
amounts so applied to be distributed among the Secured Parties pro rata
in accordance with the terms of the Collateral Agent Agreement); and
FOURTH, to the Grantors, their successors or assigns, or as a
court of competent jurisdiction may otherwise direct.
The Collateral Agent shall have absolute discretion as to the time of
application of any such proceeds, monies or balances in accordance with this
Agreement. Upon any sale of the Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.
SECTION 6.03. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article at such time as the Collateral Agent shall be lawfully entitled to
exercise such rights and remedies, each Grantor hereby grants to the Collateral
Agent an irrevocable, non-exclusive license (exercisable without payment of
royalty or other compensation to the Grantors) to use, license or sub-license
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Grantor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral Agent
shall be exercised, at the option of the Collateral Agent, upon the occurrence
and during the continuation of an Event of Default; provided that any license,
sub-license or other transaction entered into by the Collateral Agent in
accordance herewith shall be binding upon the Grantors notwithstanding any
subsequent cure of an Event of Default.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopy, as follows:
If to the Borrower or any other Grantor:
Oneida Ltd.
000-000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxx, Chief Financial Officer
Telecopy: (000) 000-0000
With a copy to:
Oneida Ltd.
000-000 Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxx, General Counsel
Telecopy: (000) 000-0000
If to the Collateral Agent:
The Chase Manhattan Bank
Bridgewater Place
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxx, Xx., Vice President
Telecopy: (000) 000-0000
Any party hereto may change its address or telecopy number for notice hereunder
by notice to the other parties. All notices given in accordance with this
Section shall be deemed to have been given on the date of receipt.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of any Transaction Document, any agreement with
respect to any of the Obligations or any other agreement or instrument relating
to any of the foregoing, (b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any other
amendment to or waiver of or any consent to any departure from any Transaction
Document, or any other agreement or instrument, (c) any exchange, release or
non-perfection of any Lien on other collateral, or any release or amendment or
waiver of or consent under or departure from any guarantee, securing or
guaranteeing all or any of the Obligations, or (d) any other circumstance that
might otherwise constitute a defense available to, or a discharge of, any
Grantor in respect of the Obligations or this Agreement.
SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Secured Parties and shall continue in full force and effect until this Agreement
shall terminate.
SECTION 7.04. Binding Effect; Several Agreement. This Agreement shall
become effective as to any Grantor when a counterpart hereof executed on behalf
of such Grantor shall have been delivered to the Collateral Agent and a
counterpart hereof shall have been executed on behalf of the Collateral Agent,
and thereafter shall be binding upon such Grantor and the Collateral Agent and
their respective successors and assigns, and shall inure to the benefit of such
Grantor, the Collateral Agent and the Secured Parties and their respective
successors and assigns, except that no Grantor shall have the right to assign or
transfer its rights or obligations hereunder or any interest herein or in the
Collateral (and any such assignment or transfer shall be void) except as
expressly contemplated by this Agreement and each Transaction Document. This
Agreement shall be construed as a separate agreement with respect to each
Grantor and may be amended, modified, supplemented, waived or released with
respect to any Grantor without the approval of any other Grantor and without
affecting the obligations of any other Grantor hereunder.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.
(a) Each Grantor jointly and severally agrees to pay upon demand to the
Collateral Agent the amount of any and all reasonable expenses, including the
reasonable fees, disbursements and other charges of its counsel and of any
experts or agents, which the Collateral Agent may incur in connection with (i)
the administration of this Agreement, (ii) the custody or preservation of, or
the sale of, collection from or other realization upon any of the Collateral,
(iii) the exercise, enforcement or protection of any of the rights of the
Collateral Agent hereunder, or (iv) the failure of any Grantor to perform or
observe any of the provisions hereof.
(b) Without limitation of its indemnification obligations under the
other Transaction Documents, each Grantor jointly and severally agrees to
indemnify the Collateral Agent, the Secured Parties and their Indemnitees
against, and hold each of them harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable fees,
disbursements and other charges of counsel, incurred by or asserted against any
of them arising out of, in any way connected with, or as a result of, the
execution, delivery or performance of this Agreement or any claim, litigation,
investigation or proceeding relating hereto or to the Collateral, whether or not
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any such Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Any such amounts payable as provided hereunder shall be additional
Obligations secured hereby and by the other Collateral Documents. The provisions
of this Section 7.06 shall remain operative and in full force and effect
regardless of the termination of this Agreement or any other Transaction
Document, the consummation of the transactions contemplated thereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Transaction Document or any
investigation made by or on behalf of the Collateral Agent or any Secured Party.
All amounts due under this Section 7.06 shall be payable on written demand
therefor given in accordance with Section 7.01.
SECTION 7.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York.
SECTION 7.08. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent hereunder
and of the Collateral Agent and the Secured Parties under the other Transaction
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provisions of this Agreement or any
other Transaction Documents or consent to any departure by any Grantor therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) below, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. No notice to or demand on
any Grantor in any case shall entitle such Grantor or any other Grantor to any
other or further notice or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply.
SECTION 7.09. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT
NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.09.
SECTION 7.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
cooperate in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.11 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one instrument, and shall become
effective as provided in Section 7.04. Delivery of an executed signature page to
this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
SECTION 7.12. Headings. Article and Section headings used herein are
for the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.13. Jurisdiction; Consent to Service of Process. (a) Each
Grantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the State or Federal courts
located in the State of New York, and any appellate court from any thereof, in
any action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each Grantor hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such State or Federal court or, to the
extent permitted by law, in such Federal court. Each Grantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any Secured Party may otherwise have to bring any action or
proceeding relating to this Agreement or the other Transaction Documents against
any Grantor or its properties in the courts of any jurisdiction.
(b) Each Grantor hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Transaction Documents
in any New York State or Federal court described in subparagraph (a) above. Each
Grantor hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affected the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 7.14. Termination. This Agreement and the Security Interest
shall terminate when each of the following events shall have occurred: (a) all
the Obligations have been indefeasibly paid in full, (b) the Lenders have no
further commitment to lend under the Credit Agreement, (c) the LC Exposure has
been reduced to zero, (d) the Issuing Banks have no further obligation to issue
LCs or make payments to beneficiaries thereunder, (d) all Hedging Agreements
have been terminated and the obligations of Borrower and its Subsidiaries
thereunder have been satisfied, and (e) the Scotiabank Metal Agreement has been
terminated and the obligations of the Borrower thereunder have been satisfied.
This Agreement, or the Security Interest on any Collateral, may also be
terminated by and with the written consent of the Collateral Agent, provided
that the Collateral Agent obtains written authorization to so consent by the
Required Secured Parties pursuant to the Collateral Agent Agreement. Upon
termination of this Agreement or the Security Interest on any Collateral, the
Collateral Agent shall execute and
deliver to the Grantors, at the Grantors' expense, all appropriate Uniform
Commercial Code termination statements and similar documents which the Grantors
shall reasonably request to evidence such termination. Any execution and
delivery of termination statements or documents pursuant to this Section 7.14
shall be without recourse to or warranty by the Collateral Agent.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have duly executed this Security
Agreement as of the day and year first above written.
ONEIDA LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
BUFFALO CHINA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
ENCORE PROMOTIONS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
DELCO INTERNATIONAL, LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
SAKURA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
THE CHASE MANHATTAN BANK, as
Collateral Agent
By: /s/ XXXXXX X. XXXX, XX.
-----------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
EXHIBIT A
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT, dated as of April 27, 2001, is made
by ONEIDA LTD., a New York corporation (the "Borrower"), THC SYSTEMS, INC., a
New York corporation and a wholly-owned subsidiary of the Borrower ("THC"), and
the other subsidiaries of the Borrower which are signatories hereto (THC and
each such subsidiary individually a "Guarantor" and collectively, the
"Guarantors"; the Guarantors and the Borrower are referred to collectively
herein as the "Grantors") in favor of THE CHASE MANHATTAN BANK, as collateral
agent (in such capacity, the "Collateral Agent") for the parties (the "Secured
Parties") to the Collateral Agent Agreement referred to below.
R E C I T A L S
A. The Secured Parties have made or agreed to make certain loans,
credit facilities or financial accommodations to, or issue letters of credit for
the benefit of, the Borrower and its subsidiaries.
B. As a condition to waiving certain defaults of the Borrower for the
fiscal year ended January 27, 2001, the Borrower has agreed to cause the
Grantors to grant to the Secured Parties a security interest in substantially
all of their tangible and intangible assets, including intellectual property
assets.
C. The Secured Parties and The Chase Manhattan Bank are entering into a
Collateral Agency and Intercreditor Agreement dated as of the date hereof (as
may be modified, amended, supplemented or replaced, the "Collateral Agent
Agreement") to appoint The Chase Manhattan Bank as the Collateral Agent and to
establish their relative rights to the collateral granted by the Grantors.
D. Pursuant to a Security Agreement dated as of the date hereof (as
modified, amended, supplemented or replaced the "Security Agreement";
capitalized terms used herein without definition have the meanings given to
them, in the Security Agreement) the Grantors have granted, pledged,
hypothecated and transferred to the Collateral Agent, for the ratable benefit of
the Secured Parties, a first priority security interest in, among other things,
all right, title and interest of the Grantors in, to and under all of the
Grantors' Copyrights and Copyright Licenses, whether presently existing or
hereafter arising or acquired, together with the goodwill of the business
symbolized by the Copyrights, and all products and proceeds thereof, including
without limitation, and all products and proceeds thereof, including, without
limitation, any and all causes of action which may exist by reason of
infringement or dilution thereof or injury to the goodwill associated therewith,
to secure the Obligations as defined therein; and
E. The Security Agreement requires the Grantors to execute and deliver
this Copyright Security Agreement to the Collateral Agent, for the ratable
benefit of the Secured Parties in order to perfect and more grant to the
Collateral Agent a security interest in Grantors' Copyrights and Copyright
Licenses.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, each Grantor does hereby grant, pledge,
hypothecate and transfer to the Collateral Agent, for the ratable benefit of the
Secured Parties, a first priority security interest in all of the Grantor's
right, title and interest in, to and under the following, whether presently
existing or hereafter arising or acquired:
(i) all Copyrights, including, without limitation, all Copyrights
referred to in Schedule 1 hereto;
(ii) all Copyright Licenses; and
(iii) all products and proceeds of the foregoing, including, without
limitation, any claim by the Grantor against third parties for past, present or
future infringement or dilution of any Copyright, including, without limitation,
any Copyright referred to in Schedule 1 hereto, and of any Copyright licensed
under any Copyright License.
This security interest is granted in conjunction with the security
interest granted to the Collateral Agent, for the ratable benefit of the Secured
Parties, in the assets of the Grantors as set forth in the Security Agreement.
The Grantors do hereby acknowledge and affirm that the rights and remedies of
the Collateral Agent, with respect to the security interest in the Copyrights
and the Copyright Licenses made and granted hereby are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
IN WITNESS WHEREOF, each of the Grantors has caused this Copyright
Security Agreement to be duly executed by its officer thereunto duly authorized
as of the date and year first above written.
ONEIDA LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
BUFFALO CHINA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
ENCORE PROMOTIONS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
DELCO INTERNATIONAL, LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
SAKURA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
EXHIBIT B
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT, dated as of April 27, 2001, is made by
ONEIDA LTD., a New York corporation (the "Borrower"), THC SYSTEMS, INC., a New
York corporation and a wholly-owned subsidiary of the Borrower ("THC"), and the
other subsidiaries of the Borrower which are signatories hereto (THC and each
such subsidiary individually a "Guarantor" and collectively, the "Guarantors";
the Guarantors and the Borrower are referred to collectively herein as the
"Grantors") in favor of THE CHASE MANHATTAN BANK, as collateral agent (in such
capacity, the "Collateral Agent") for the parties (the "Secured Parties") to the
Collateral Agent Agreement referred to below.
R E C I T A L S
A. The Secured Parties have made or agreed to make certain loans,
credit facilities or financial accommodations to, or issue letters of credit for
the benefit of, the Borrower and its subsidiaries.
B. As a condition to waiving certain defaults of the Borrower for the
fiscal year ended January 27, 2001, the Borrower has agreed to cause the
Grantors to grant to the Secured Parties a security interest in substantially
all of their tangible and intangible assets, including intellectual property
assets.
C. The Secured Parties and The Chase Manhattan Bank are entering into a
Collateral Agency and Intercreditor Agreement dated as of the date hereof (as
may be modified, amended, supplemented or replaced, the "Collateral Agent
Agreement") to appoint The Chase Manhattan Bank as the Collateral Agent and to
establish their relative rights to the collateral granted by the Grantors.
D. Pursuant to a Security Agreement dated as of the date hereof (as
modified, amended, supplemented or replaced the "Security Agreement";
capitalized terms used herein without definition have the meanings given to
them, in the Security Agreement) the Grantors have granted, pledged,
hypothecated and transferred to the Collateral Agent, for the ratable benefit of
the Secured Parties, a first priority security interest in, among other things,
all right, title and interest of the Grantors in, to and under all of the
Grantors' Patents and Patent Licenses, whether presently existing or hereafter
arising or acquired, together with the goodwill of the business symbolized by
the Patents, and all products and proceeds thereof, including without
limitation, and all products and proceeds thereof, including, without
limitation, any and all causes of action which may exist by reason of
infringement or dilution thereof or injury to the goodwill associated therewith,
to secure the Obligations as defined therein; and
E. The Security Agreement requires the Grantors to execute and deliver
this Patent Security Agreement to the Collateral Agent, for the ratable benefit
of the Secured Parties in order to perfect and more grant to the Collateral
Agent a security interest in Grantors' Patents and Patent Licenses.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, each Grantor does hereby grant, pledge,
hypothecate and transfer to the Collateral Agent, for the ratable benefit of the
Secured Parties, a first priority security interest in all of the Grantor's
right, title and interest in, to and under the following, whether presently
existing or hereafter arising or acquired:
(i) all Patents, including, without limitation, all Patents referred to
in Schedule 1 hereto;
(ii) all Patent Licenses; and
(iii) all products and proceeds of the foregoing, including, without
limitation, any claim by the Grantor against third parties for past, present or
future infringement or dilution of any Patent, including, without limitation,
any Patent referred to in Schedule 1 hereto, and of any Patent licensed under
any Patent License.
This security interest is granted in conjunction with the security
interest granted to the Collateral Agent, for the ratable benefit of the Secured
Parties, in the assets of the Grantors as set forth in the Security Agreement.
The Grantors do hereby acknowledge and affirm that the rights and remedies of
the Collateral Agent, with respect to the security interest in the Patents and
the Patent Licenses made and granted hereby are more fully set forth in the
Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the Grantors has caused this Patent
Security Agreement to be duly executed by its officer thereunto duly authorized
as of the date and year first above written.
ONEIDA LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
BUFFALO CHINA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
ENCORE PROMOTIONS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
DELCO INTERNATIONAL, LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
SAKURA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
EXHIBIT C
ONEIDA LTD.
Perfection Certificate
----------------------
To: The Chase Manhattan Bank, as Collateral Agent under the Security
Agreement referred to below.
This Certificate is being executed and delivered by Oneida Ltd. (the
"Borrower") in connection with (a) a Security Agreement dated the date hereof
among the Borrower and its Material Domestic Subsidiaries and The Chase
Manhattan Bank, as Collateral Agent for the Secured Parties referred to therein
(as hereafter amended, modified or restated, the "Security Agreement"), and (b)
a Pledge Agreement dated the date hereof among the Borrower and its Material
Domestic Subsidiaries and the Collateral Agent (as hereafter amended, modified
or restated, the "Pledge Agreement"). Capitalized terms used in this Certificate
shall have the meanings given to them in the Security Agreement and the Pledge
Agreement.
In order to assist the Collateral Agent in the preparation of
definitive documentation which may be required to perfect the Security Interest
granted under the Security Agreement, the Borrower hereby represents and
warrants, as of the date hereof, the following information about the Borrower,
its Subsidiaries, their respective organizational structures, and the following
additional matters:
1. Give the full and exact name of the Borrower as set forth in its
Certificate of Incorporation and state the jurisdiction of its incorporation:
2. (a) List the full and exact name of each Material Domestic
Subsidiary (as set forth in its Certificate of Incorporation), give the
jurisdiction of its incorporation and the percentage of outstanding capital
stock owned by Borrower, and list the total assets of each Material Domestic
Subsidiary as of the end of the most recent fiscal quarter:
Jurisdiction of Ownership Total
Name Incorporation Percentage Assets
---- --------------- ---------- ------
(b) List the full and exact name of each Material Foreign Subsidiary
(as set forth in its Certificate of Incorporation), give the jurisdiction of its
incorporation and the percentage of outstanding capital stock owned by Borrower,
and list the total assets of each Material Domestic Subsidiary as of the end of
the most recent fiscal quarter:
Jurisdiction of Ownership Total
Name Incorporation Percentage Assets
---- --------------- ---------- ------
3. Give the names of each other Subsidiary of the Borrower and list the
jurisdiction of its incorporation and the percentage of outstanding capital
stock owned by Borrower:
Jurisdiction of Ownership
Name Incorporation Percentage
---- --------------- ----------
4. List all capital stock, partnership interests, membership interests
and limited liability company or other equity ownership interests ("Equity
Interests") in any Person (other than a Subsidiary) owned by the Borrower or any
Material Domestic Subsidiary and the percentage ownership of such Person, except
Equity Interests having a fair market value of less than $7,500 per issuer, up
to a maximum of $50,000 in the aggregate:
Jurisdiction of Ownership
Name Incorporation Percentage
---- --------------- ----------
5. List each state in which the Borrower and each Material Domestic
Subsidiary is qualified and authorized to transact business as a foreign
corporation:
6. If the Borrower or any Material Domestic Subsidiary has changed its
corporate name in the past ten years, provide all former names:
7. Provide the address (including number, street, town or city, county
and state) of the chief executive office of the Borrower and each Material
Domestic Subsidiary:
8. Provide the address of each location where the books and records of
the Borrower and each Material Domestic Subsidiary are located (if other than
the chief executive office referred to above):
9. Provide the address of each location where the Borrower or any
Material Domestic Subsidiary maintains inventory, equipment, fixtures or other
tangible assets and indicate whether the location is owned, leased or operated
by a third party or is subject to a mortgage (and if leased or operated by a
third party or subject to a mortgage, provide the name and address of the
lessor, operator or mortgagee):
10. For each location owned by the Borrower or any Material Domestic
Subsidiary where any fixtures of the Borrower or any Material Domestic
Subsidiary are located, provide one of the following: (a) a complete legal
description of the location, (b) the book and page number in a deed index for
each deed applicable to the location, or (c) the street and number, town or
city, county and, if applicable, the lot and block number of the location:
11. State the places of business or other locations of any assets used
by the Borrower or any Material Domestic Subsidiary during the last four months
other than those listed above:
12. Provide the federal employee identification numbers of the Borrower
and each Material Domestic Subsidiary:
13. Provide the names and titles of each officer of the Borrower and
each Material Domestic Subsidiary who will have signatory powers to execute
documents in connection with the Credit Agreement:
14. Provide a list and brief description of all United States copyright
registrations owned by the Borrower or any Material Domestic Subsidiary and
provide a list of all pending applications therefor:
15. Provide a list and brief description of all current letters patent
issued by the United States and all pending patent applications in the United
States Patent and Trademark Office owned by Borrower or any Material Domestic
Subsidiary:
16. List all trademarks, service marks, tradenames, fictitious names
and logos owned by the Borrower and each Material Domestic Subsidiary which are
registered in United States Patent and Trademark Office, together with any
pending registrations applications therefor:
17. Provide a description of any patent license, trademark license or
copyright license to which the Borrower or any Material Domestic Subsidiary is a
party as Licensor:
18. List all promissory notes, debt securities and other negotiable
instruments owned by the Borrower or any Material Domestic Subsidiary:
19. Provide the name of each bank or financial institution where
Borrower or any Material Domestic Subsidiary maintains a deposit account
together with the account number(s):
20. Provide the name and address of each Person where the Borrower or
any Material Domestic Subsidiary maintains a Commodity Account, together with
the account number(s):
21. Provide the name and address of each Person where the Borrower or
any Material Domestic Subsidiary maintains a Securities Account, together with
the account number(s):
IN WITNESS WHEREOF, the Borrower has executed this Perfection
Certificate as of the day of April, 2001.
-------
ONEIDA LTD.
By:
-------------------------------
Title:
EXHIBIT D
TRADEMARK SECURITY AGREEMENT
-----------------------------
This TRADEMARK SECURITY AGREEMENT, dated as of April 27, 2001, is made
by ONEIDA LTD., a New York corporation (the "Borrower"), THC SYSTEMS, INC., a
New York corporation and a wholly-owned subsidiary of the Borrower ("THC"), and
the other subsidiaries of the Borrower which are signatories hereto (THC and
each such subsidiary individually a "Guarantor" and collectively, the
"Guarantors"; the Guarantors and the Borrower are referred to collectively
herein as the "Grantors") in favor of THE CHASE MANHATTAN BANK, as collateral
agent (in such capacity, the "Collateral Agent") for the parties (the "Secured
Parties") to the Collateral Agent Agreement referred to below.
R E C I T A L S
A. The Secured Parties have made or agreed to make certain loans,
credit facilities or financial accommodations to, or issue letters of credit for
the benefit of, the Borrower and its subsidiaries.
B. As a condition to waiving certain defaults of the Borrower for the
fiscal year ended January 27, 2001, the Borrower has agreed to cause the
Grantors to grant to the Secured Parties a security interest in substantially
all of their tangible and intangible assets, including intellectual property
assets.
C. The Secured Parties and The Chase Manhattan Bank are entering into a
Collateral Agency and Intercreditor Agreement dated as of the date hereof (as
may be modified, amended, supplemented or replaced, the "Collateral Agent
Agreement") to appoint The Chase Manhattan Bank as the Collateral Agent and to
establish their relative rights to the collateral granted by the Grantors.
D. Pursuant to a Security Agreement dated as of the date hereof (as
modified, amended, supplemented or replaced the "Security Agreement";
capitalized terms used herein without definition have the meanings given to
them, in the Security Agreement) the Grantors have granted, pledged,
hypothecated and transferred to the Collateral Agent, for the ratable benefit of
the Secured Parties, a first priority security interest in, among other things,
all right, title and interest of the Grantors in, to and under all of the
Grantors' Trademarks and Trademark Licenses, whether presently existing or
hereafter arising or acquired, together with the goodwill of the business
symbolized by the Trademarks, and all products and proceeds thereof, including
without limitation, and all products and proceeds thereof, including, without
limitation, any and all causes of action which may exist by reason of
infringement or dilution thereof or injury to the goodwill associated therewith,
to secure the Obligations as defined therein; and
E. The Security Agreement requires the Grantors to execute and deliver
this Trademark Security Agreement to the Collateral Agent, for the ratable
benefit of the Secured Parties in order to perfect and more grant to the
Collateral Agent a security interest in Grantors' Trademarks and Trademark
Licenses.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, each Grantor does hereby grant, pledge,
hypothecate and transfer to the Collateral Agent, for the ratable benefit of the
Secured Parties, a first priority security interest in all of the Grantor's
right, title and interest in, to and under the following, whether presently
existing or hereafter arising or acquired:
(i) all Trademarks, including, without limitation, all registered
Trademarks referred to in Schedule 1 hereto, and all the goodwill of the
business connected with the use of, and symbolized by, the Trademarks;
(ii) all Trademark Licenses and all the goodwill of the business
connected with the use of, and symbolized by, the Trademark Licenses; and
(iii) all products and proceeds of the foregoing, including, without
limitation, any claim by the Grantor against third parties for past, present or
future infringement or dilution of any Trademark, including, without limitation,
any Trademark referred to in Schedule 1 hereto, and of any Trademark licensed
under any Trademark
License, or for injury to goodwill associated with any Trademark or Trademark
licensed under any Trademark License.
This security interest is granted in conjunction with the security
interest granted to the Collateral Agent, for the ratable benefit of the Secured
Parties, in the assets of the Grantors as set forth in the Security Agreement.
The Grantors do hereby acknowledge and affirm that the rights and remedies of
the Collateral Agent, with respect to the security interest in the Trademarks
and the Trademark Licenses made and granted hereby are more fully set forth in
the Security Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the Grantors has caused this Trademark
Security Agreement to be duly executed by its officer thereunto duly authorized
as of the date and year first above written.
ONEIDA LTD.
By: /s/XXXXX X. XXXXX
-----------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
BUFFALO CHINA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
ENCORE PROMOTIONS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
DELCO INTERNATIONAL, LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
SAKURA, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Vice President - Finance
EXHIBIT E
Form of Local Counsel Opinions
(New York Counsel)
April , 2000
----
The Chase Manhattan Bank, as
Collateral Agent under the
Collateral Documents referred to below
000 Xxxx Xxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Sirs:
We have acted as special counsel in the State of New York (the "State")
for Oneida Ltd., Buffalo China, Inc., Encore Promotions, Inc., THC Systems Inc.,
Delco International, Ltd. and Sakura, Inc., each of which is a New York
corporation (individually, a "Grantor" and, collectively, the "Grantors"), in
connection with the negotiation, execution and deliver of a Security Agreement
dated as of April ___, 2001 (the "Security Agreement") among the Grantors and
The Chase Manhattan Bank, as Collateral Agent ("Collateral Agent") and the other
Collateral Documents referred to below. Terms defined in the Security Agreement
are used herein with the same meanings.
In rendering this opinion, we have examined executed counterparts of
each of the following documents (the "Collateral Documents"), each of which is
dated the date hereof;
(a) the Security Agreement;
(b) the Pledge Agreement executed by the Grantors in favor of the
Collateral Agent ("Pledge Agreement");
(c) the Acknowledgement and Cross-Default Agreement executed by the
Grantors;
(d) the Patent Security Agreement executed by the Grantors ("Patent
Security Agreement");
(e) the Trademark Security Agreement executed by the Grantors
("Trademark Security Agreement");
(f) the Copyright Security Agreement executed by the Grantors
("Copyright Security Agreement");
2
(g) UCC-1 Financing Statements under the Uniform Commercial Code of
the State (the "UCC") naming each of the Grantors as debtor and
the Collateral Agent as secured party to be filed in the State
("Financing Statements").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. Each Grantor (a) is a corporation duly organized, validly existing and
in good standing under the laws of the State, and (b) has all requisite power
and authority to make, deliver and perform its obligations under the Collateral
Documents to which it is a party.
2. The execution, delivery and performance of the Collateral Documents are
within the corporate power of each Grantor and have been duly authorized by all
necessary corporate and, if required, stockholder action. Each of the Collateral
Documents has been duly executed and delivered by each Grantor and constitutes a
legal, valid and binding obligation of each Grantor, enforceable in accordance
with its terms.
3. The execution, delivery and performance of the Collateral Documents by
the Grantors (a) do not require any consent or approval of, registration or
filing with, or any other action by, any governmental authority, except filings
necessary to perfect the Lien created by the Collateral Documents, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Grantor, (c) to our knowledge, will not violate
or result in a default under any indenture, agreement or other instrument
binding upon any Grantor, and (d) will not result in the creation or imposition
of any Lien on any asset of any Grantor except in favor of the Collateral Agent.
4. The Collateral Documents are effective to create a valid and enforceable
security interest in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, in the Collateral owned by the Grantors described therein
as security for the payment of the Obligations.
5. Upon the filing of the Financing Statements with the offices listed on
Schedule 1 attached hereto, the Collateral Agent will have a valid and perfected
security interest in the Collateral as to which security interests may be
perfected by filing financing statements under the UCC as in effect in the
State.
3
6. Upon the filing of the Financing Statements with the offices listed on
Schedule 1 and the filing of the Patent Security Agreement and the Trademark
Security Agreement with the U.S. Patent and Trademark Office, the security
interest granted to the Collateral Agent in the Collateral described in the
Patent Security Agreement and the Trademark Security Agreement will be
perfected.
7. Upon the filing of the Financing Statements with the offices listed on
Schedule 1 and the filing of the Copyright Security Agreement with the U.S.
Copyright Office, the security interest granted to the Collateral Agent in the
Collateral described in the Copyright Security Agreement will be perfected.
8. Upon taking possession of and continuously holding the Pledged Equity
Interests and the Pledged Debt Securities described in the Pledge Agreement, the
security interest granted to the Collateral Agent in the Pledged Equity
Interests and Pledged Debt Securities will be perfected.
9. The choice of law provisions contained in the Collateral Documents will
be upheld and enforced by the courts of the State and federal courts sitting in
and applying the laws of the State.
10. Except for filing fees payable in connection with the filing of the
Financing Statements, no recording, filing, privilege or other tax must be paid
by any Grantor or the Collateral Agent to any governmental authority of the
State in connection with the execution, delivery, recordation or enforcement of
any of the Collateral Documents.
11. Neither the Collateral Agent nor any of the Secured Parties is required
to qualify to do business in the State solely by reason of the execution and
delivery of any Collateral Document, the realization of the benefits thereunder
or the enforcement of their rights thereunder.
[INSERT ASSUMPTIONS AND QUALIFICATIONS AS APPROPRIATE]
This opinion is limited to the laws of the State and the general
federal law of the United States of America. This opinion is issued to the
Collateral Agent as of the date hereof and is necessarily limited to the laws
now in effect. This opinion is intended for use by Collateral Agent and the
Secured Parties in connection with the Collateral Documents and does not extend
to any other purpose and may not be relied upon by any other Person (other than
successors and assigns of the Secured Parties and the Collateral Agent and
Persons who purchase or acquire participations in any of the Obligations, who in
each case may rely on this opinion as of the time of its delivery on the date
hereof as if this opinion were addressed to such successors, assigns or Persons,
as the case may be) and no portion hereof may be quoted or in any other way
published or communicated without the express written consent of the
undersigned; provided, however, that this opinion may be disclosed (a) in
connection with the enforcement of the Obligations, (b) in response to a
subpoena or other legal process, (c) as otherwise required by applicable law or
regulations, or (d) in connection with the sale or transfer of any of the
Obligations or participations therein. No opinion may be inferred or implied
beyond the matters expressly stated herein and our opinions expressed herein
must be read in conjunction with the assumptions, limitations, exceptions, and
qualifications set forth in this letter.
Very truly yours,
4
(For use by Counsel in States other than New York)
April , 2000
-----
The Chase Manhattan Bank, as
Collateral Agent under the
Collateral Documents referred to below
000 Xxxx Xxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Sirs:
We have acted as special counsel in the State of __________ (the
"State") for Oneida Ltd., Buffalo China, Inc., Encore Promotions, Inc., THC
Systems Inc., Delco International, Ltd. and Sakura, Inc., each of which is a New
York corporation (individually, a "Grantor" and, collectively, the "Grantors"),
in connection with the negotiation, execution and deliver of a Security
Agreement dated as of April ___, 2001 (the "Security Agreement") among the
Grantors and The Chase Manhattan Bank, as Collateral Agent ("Collateral Agent")
and the other Collateral Documents referred to below. Terms defined in the
Security Agreement are used herein with the same meanings.
In rendering this opinion, we have examined executed counterparts of
each of the following documents (the "Collateral Documents"), each of which is
dated the date hereof;
(a) the Security Agreement;
(h) the Pledge Agreement executed by the Grantors in favor of the
Collateral Agent ("Pledge Agreement");
(i) the Acknowledgement and Cross-Default Agreement executed by the
Grantors;
(j) the Patent Security Agreement executed by the Grantors ("Patent
Security Agreement");
(k) the Trademark Security Agreement executed by the Grantors
("Trademark Security Agreement");
(l) the Copyright Security Agreement executed by the Grantors
("Copyright Security Agreement");
(m) UCC-1 Financing Statements under the Uniform Commercial Code of
the State (the "UCC") naming each of the Grantors as debtor and
the Collateral Agent as secured party to be filed in the State
("Financing Statements").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. To the extent that the Collateral Documents are, or may be, governed by
the laws of the State, each of the Collateral Documents constitutes a legal,
valid and binding obligation of each Grantor, enforceable in accordance with its
terms.
2. The execution, delivery and performance of the Collateral Documents by
the Grantors (a) do not require any consent or approval of, registration or
filing with, or any other action by, any governmental authority,
5
except filings necessary to perfect the Lien created by the Collateral
Documents, and (b) will not violate any applicable law or regulation.
3. The Collateral Documents are effective to create a valid and enforceable
security interest in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, in the Collateral owned by the Grantors described therein
as security for the payment of the Obligations.
4. Upon the filing of the Financing Statements with the offices listed on
Schedule 1 attached hereto, the Collateral Agent will have a valid and perfected
security interest in the Collateral as to which security interests may be
perfected by filing financing statements under the UCC as in effect in the
State.
5. The choice of law provisions contained in the Collateral Documents will
be upheld and enforced by the courts of the State and federal courts sitting in
and applying the laws of the State.
6. Except for filing fees payable in connection with the filing of the
Financing Statements, no recording, filing, privilege or other tax must be paid
by any Grantor or the Collateral Agent to any governmental authority of the
State in connection with the execution, delivery, recordation or enforcement of
any of the Collateral Documents.
7. Neither the Collateral Agent nor any of the Secured Parties is required
to qualify to do business in the State solely by reason of the execution and
delivery of any Collateral Document, the realization of the benefits thereunder
or the enforcement of their rights thereunder.
[INSERT ASSUMPTIONS AND QUALIFICATIONS AS APPROPRIATE]
This opinion is limited to the laws of the State and the general
federal law of the United States of America. This opinion is issued to the
Collateral Agent as of the date hereof and is necessarily limited to the laws
now in effect. This opinion is intended for use by Collateral Agent and the
Secured Parties in connection with the Collateral Documents and does not extend
to any other purpose and may not be relied upon by any other Person (other than
successors and assigns of the Secured Parties and the Collateral Agent and
Persons who purchase or acquire participations in any of the Obligations, who in
each case may rely on this opinion as of the time of its delivery on the date
hereof as if this opinion were addressed to such successors, assigns or Persons,
as the case may be) and no portion hereof may be quoted or in any other way
published or communicated without the express written consent of the
undersigned; provided, however, that this opinion may be disclosed (a) in
connection with the enforcement of the Obligations, (b) in response to a
subpoena or other legal process, (c) as otherwise required by applicable law or
regulations, or (d) in connection with the sale or transfer of any of the
Obligations or participations therein. No opinion may be inferred or implied
beyond the matters expressly stated herein and our opinions expressed herein
must be read in conjunction with the assumptions, limitations, exceptions, and
qualifications set forth in this letter.
Very truly yours,
6
EXHIBIT F
Form of Foreign Counsel Opinions
April , 2000
----
The Chase Manhattan Bank, as
Collateral Agent under the
Collateral Documents referred to below
000 Xxxx Xxxxxx
Xxxxxxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Dear Sirs:
We have acted as special counsel in [JURISDICTION] for [NAME OF
SUBSIDIARY] (the "Subsidiary"), a corporation organized under the laws of
[JURISDICTION] and a wholly owned subsidiary of Oneida Ltd. (the "Borrower") in
connection with the pledge by the Borrower of _______ shares of capital stock of
the Subsidiary (the "Pledged Shares") to The Chase Manhattan Bank, as Collateral
Agent ("Collateral Agent") for the secured parties (the "Secured Parties")
pursuant to and described in the Collateral Documents referred to below.
In rendering this opinion, we have examined executed counterparts of
each of the following documents (the "Collateral Documents"), each of which is
dated the date hereof;
(a) the Security Agreement among Borrower, Buffalo China, Inc., Encore
Promotions, Inc., THC Systems Inc., Delco International, Ltd. and Sakura, Inc.
and the Collateral Agent;
(b) the Pledge Agreement among Borrower, Buffalo China, Inc., Encore
Promotions, Inc., THC Systems Inc., Delco International, Ltd. and Sakura, Inc.
and the Collateral Agent ("Pledge Agreement").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion.
Upon the basis of the foregoing, we are of the opinion that:
1. The Subsidiary is a corporation duly incorporated and in good standing
under the laws of [JURISDICTION].
2. The Pledged Shares have been duly authorized, validly issued and are
fully paid and non-assessable. Borrower is the record owner of the Pledged
Shares.
3. Under the laws of [JURISDICTION], the Collateral Documents are
sufficient to create a valid security interest in favor of the Collateral Agent,
for the ratable benefit of the Secured Parties described therein, in the Pledged
Shares owned by the Borrower, which security interest is perfected under the
laws of [JURISDICTION] by the Collateral Agent's taking possession of the
certificates representing such Pledged Shares, together with stock powers duly
executed by Borrower in blank.
4. No filings, recordings or registrations with, and no consents or
authorizations of, any governmental agency or any other person are required
under the laws of [JURISDICTION] in order to give effect to and perfect the
security interest in the Pledged Shares created under the Collateral Documents.
5. Neither the pledge by the Borrower of the Pledged Shares to the
Collateral Agent nor the execution, delivery and performance by the Borrower of
the Collateral Documents will conflict with or result in a breach or violation
of (a) the [Articles of Organization and By-laws] of the Subsidiary or (b) any
law, statute, rule or regulation of [JURISDICTION] applicable to the Subsidiary
or any of its assets.
7
6. No stamp duties, levies, taxes or other fees are required to be paid
under the laws of [JURISDICTION] in connection with the execution, delivery or
performance of the Collateral Documents or the pledge of the Pledged Shares
pursuant thereto.
7. The courts of [JURISDICTION] will give effect to the provisions of the
Collateral Documents stating that the terms of the Collateral Documents are to
be governed by the laws of the State of New York.
[INSERT ASSUMPTIONS AND QUALIFICATIONS AS APPROPRIATE]
This opinion is limited to the laws of [JURISDICTION]. This opinion is
issued to the Collateral Agent as of the date hereof and is necessarily limited
to the laws now in effect. This opinion is intended for use by Collateral Agent
and the Secured Parties in connection with the Collateral Documents and does not
extend to any other purpose and may not be relied upon by any other Person
(other than successors and assigns of the Secured Parties and the Collateral
Agent and Persons who purchase or acquire participations in any of the
Obligations, who in each case may rely on this opinion as of the time of its
delivery on the date hereof as if this opinion were addressed to such
successors, assigns or Persons, as the case may be) and no portion hereof may be
quoted or in any other way published or communicated without the express written
consent of the undersigned; provided, however, that this opinion may be
disclosed (a) in connection with the enforcement of the Obligations, (b) in
response to a subpoena or other legal process, (c) as otherwise required by
applicable law or regulations, or (d) in connection with the sale or transfer of
any of the Obligations or participations therein. No opinion may be inferred or
implied beyond the matters expressly stated herein and our opinions expressed
herein must be read in conjunction with the assumptions, limitations,
exceptions, and qualifications set forth in this letter.
Very truly yours,
8
