EXHIBIT 4(a)(i)
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ONEIDA LTD.
AMENDED AND RESTATED NOTE AGREEMENT
Dated as of January 1, 1992
$30,000,000 Principal Amount
8.52% Senior Notes
Due January 15, 2002
PPN: 682505 B# 8
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ONEIDA LTD.
AMENDED AND RESTATED NOTE AGREEMENT
Dated as of January 1, 1992
To the Purchasers Named
in Schedule I Hereto
Ladies and Gentlemen:
ONEIDA LTD., a New York corporation (the "Company"), agrees with you as
follows:
'SS'1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes. This Amended and Restated Note Agreement (the
"Agreement") amends and restates that certain Note Agreement dated as of January
1, 1992, the notes issued thereunder between the Company and the Purchasers
named therein, and shall not constitute a novation of such Note Agreement or all
or any portion of the indebtedness evidenced thereby. The Company has authorized
the issuance and sale of $30,000,000 aggregate principal amount of its Senior
Notes (the "Notes"), to be dated the date of issuance, to bear interest from
such date at the rate of 8.52% per annum prior to maturity, payable
semi-annually on the fifteenth day of July and January of each year, commencing
July 15, 1992, and at maturity, to bear interest on overdue principal (including
any overdue required or optional prepayment), premium, if any, and (to the
extent legally enforceable) on any overdue installment of interest at the
greater of (a) the rate of interest publicly announced by The Chase Manhattan
Bank (or its successors or assigns) as its Prime Rate plus one percent (1%) or
(b) 10.52% per annum, to be expressed to mature on January 15, 2002 and to be
substantially in the form attached as Exhibit A. The term "Notes" as used herein
shall include each Note delivered pursuant to this Agreement and each Note
delivered in substitution or exchange therefor and, where applicable, shall
include the singular number as well as the plural. Any reference to you in this
Agreement shall in all instances be deemed to include any nominee of yours or
any separate account or other person on whose behalf you are purchasing Notes.
You are sometimes referred to herein as a "Purchaser" and, together with the
other Purchaser, as the "Purchasers." The obligations of the Company hereunder
and under the Notes shall be guaranteed by the Subsidiary Guarantors pursuant to
the Subsidiary Guarantees.
1.2 Commitment; Closing Date. Subject to the terms and conditions
hereof and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to you, and you agree to purchase
from the Company, Notes in the aggregate principal amount set forth opposite
your name in the attached Schedule I at a price of 100% of the principal amount
thereof.
Delivery of and payment for the Notes shall be made at the offices of
Xxxxxxx, Carton & Xxxxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000, at 9:00 a.m., Chicago Time, on January 30, 1992, or at such
later time or on such later date, not later than 5:00 p.m. Chicago Time, on
January 31, 1992, as may be mutually agreed upon by the Company and the
Purchasers (the "Closing Date"). The Notes will be delivered to you in fully
registered form, issued in your name or in the name of your nominee. Delivery of
the Notes to you on the Closing Date shall be against payment of the purchase
price thereof in Federal Funds or other funds in U.S. dollars immediately
available at the principal office of Chase Lincoln First Bank, N.A., Rochester,
New York, A.B.A. No. 000000000, for deposit in the Company's Account No.
0102042942. If on the Closing Date the Company shall fail to tender the Notes to
you, you shall be relieved of all remaining obligations under this Agreement.
Nothing in the preceding sentence shall relieve the Company of any liability
occasioned by such failure to deliver the Notes. If on the Closing Date any
Purchaser shall fail to tender the purchase price of Notes set forth in Schedule
I hereto to the Company, the Company shall be relieved of all remaining
obligations under
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this Agreement. Nothing in the preceding sentence shall relieve any Purchaser of
any liability occasioned by its failure to deliver such Funds. The obligations
of each Purchaser shall be several and not joint and no Purchaser shall be
liable or responsible for the acts of any other Purchaser.
'SS'2. PREPAYMENT OF NOTES
2.1 Required Prepayments. (a) In addition to payment of all outstanding
principal of the Notes at maturity and regardless of the amount of Notes which
may be outstanding from time to time, the Company shall prepay and there shall
become due and payable on January 15 in each year, $4,285,714.29 of the
principal amount of the Notes or such lesser amount as would constitute payment
in full on the Notes, commencing January 15, 1996 and ending January 15, 2001
inclusive, with the remaining principal payable on January 15, 2002. Each such
prepayment shall be at a price of 100% of the principal amount prepaid, together
with interest accrued thereon to the date of prepayment.
(b) (i) In the event of a Change of Control, the Company shall,
immediately upon learning thereof, but in any event within five days after the
date of such Change of Control, give written notice to each holder of a Note of
the Change of Control, accompanied by a certificate of an authorized officer of
the Company describing in detail the nature of the Change of Control and
containing an offer by the Company to prepay the Notes on the terms set forth in
the following sentence (the "Change Notice"). Subject to clause (ii) of this
paragraph (b), the Company shall prepay, on a date specified in such notice by
the Company which shall be not less than 45 or more than 60 calendar days after
the effective date of such Change in Control, the entire principal amount of the
Notes held by each holder at the price set forth in Section 2.2(b).
(ii) A holder of Notes may accept or reject the offer of the
Company to prepay Notes made pursuant to clause (i) of this paragraph (b) by
causing a notice of such acceptance or rejection to be delivered to the Company
not more than 30 calendar days following receipt of the Change Notice. A failure
by a holder of Notes to respond to an offer to prepay made pursuant to clause
(i) of this paragraph (b) shall be deemed to constitute an acceptance of such
offer by such holder.
2.2 Optional Prepayments. (a) Upon notice as provided in Section 2.3,
the Company may prepay the Notes, in whole or in part, at any time, in an amount
of not less than $1,000,000 or in integral multiples of $100,000 in excess
thereof at the price set forth in Section 2.2(b).
(b) Each prepayment made pursuant to Section 2.1(b), Section 7.8 or
paragraph (a) of this Section 2.2 shall be at a price of (i) 100% of the
principal amount to be prepaid, plus interest accrued thereon to the date of
prepayment, if the Reinvestment Yield, on the applicable Determination Date,
equals or exceeds the interest rate payable on or in respect of the Notes, or
(ii) 100% of the principal amount to be prepaid, plus interest accrued thereon
to the date of prepayment, plus a premium, if the Reinvestment Yield, on such
Determination Date, is less than the interest rate payable on or in respect of
the Notes. The premium shall equal (x) the aggregate present value of the amount
of principal being prepaid (taking into account the manner of application of
such prepayment required by Section 2.2(c)) and the present value of the amount
of interest (exclusive of interest accrued to the date of prepayment) which
would have been payable in respect of such principal absent such prepayment,
determined by discounting (semi-annually on the basis of a 360-day year composed
of twelve 30-day months) each such amount utilizing an interest factor equal to
the Reinvestment Yield, less (y) the principal amount to be prepaid.
(c) Any prepayment pursuant to Section 2.2(a) or 7.8 of less than all
of the Notes outstanding shall be applied, to reduce, pro rata, each of the
prepayments and the final payment at maturity required by Section 2.1.
(d) Except as provided in Section 2.1, this Section 2.2 and Section
7.8, the Notes shall not be prepayable in whole or in part.
2.3 Notice of Prepayments. The Company shall give notice of any
prepayment of the Notes pursuant to Section 2.1(b) or Section 2.2(a) or Section
7.8 to each holder of the Notes not less than 30 days nor more than 60 days
before the date fixed for prepayment, specifying (i) such date, (ii) the
principal amount of the holder's
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Notes to be prepaid on such date, (iii) the date as of which the premium, if
any, will be calculated and (iv) the accrued interest applicable to the
prepayment. Notice of prepayment having been so given, the aggregate principal
amount of the Notes specified in such notice, together with the premium, if any,
and accrued interest thereon shall become due and payable on the prepayment date
specified in such notice.
The Company also shall give notice to each holder of the Notes by
telecopy, telegram, telex or other same-day written communication, as soon as
practicable but in any event not later than two business days prior to the
prepayment date, of the premium, if any, applicable to such prepayment and the
details of the calculations used to determine the amount of such premium.
2.4 Surrender of Notes on Prepayment or Exchange. Subject to Section
2.5, upon any partial prepayment of a Note pursuant to this Section 2 or partial
exchange of a Note pursuant to Section 10.3, such Note may, at the option of the
holder thereof, (i) be surrendered to the Company pursuant to Section 10.3 in
exchange for a new Note equal to the principal amount remaining unpaid on the
surrendered Note, or (ii) be made available to the Company for notation thereon
of the portion of the principal so prepaid or exchanged. In case the entire
principal amount of any Note is prepaid or exchanged, such Note shall, at the
written request of the Company, be surrendered to the Company for cancellation
and shall not be reissued, and no Note shall be issued in lieu of such Note.
2.5 Direct Payment. Notwithstanding any other provision contained in
the Notes or this Agreement, the Company will pay all sums becoming due on each
Note held by you or any subsequent Institutional Holder by wire transfer of
immediately available federal funds to such account as you or such subsequent
Institutional Holder has designated in Schedule I, or as you or such subsequent
Institutional Holder may otherwise designate by written notice to the Company,
in each case without presentment and without notations being made thereon,
except that any such Note so paid or prepaid in full shall, at the written
request of the Company, be surrendered to the Company for cancellation. Any wire
transfer shall identify such payment in the manner set forth in Schedule I and
shall identify the payment as principal, premium, if any, and/or interest. You
and any subsequent Institutional Holder of a Note to which this Section 2.5
applies agree that, before selling or otherwise transferring any such Note, you
or it will make a notation thereon of the aggregate amount of all payments of
principal theretofore made and of the date to which interest has been paid.
2.6 Allocation of Payments. If less than the entire principal amount of
all the Notes outstanding is to be paid, the Company will prorate the aggregate
principal amount to be paid among the outstanding Notes in proportion to the
unpaid principal.
2.7 Payments Due on Saturdays, Sundays and Holidays. In any case where
the date of any required prepayment of the Notes or any interest payment date on
the Notes or the date fixed for any other payment of any Note or exchange of any
Note is not a Business Day, then such payment, prepayment or exchange need not
be made on such date but may be made on the next preceding Business Day, with
the same force and effect as if made on the due date.
'SS'3. REPRESENTATIONS
3.1 Representations of the Company. As an inducement to, and as part of
the consideration for, your purchase of the Notes pursuant to this Agreement,
the Company represents and warrants to you as follows:
(a) Corporate Organization and Authority. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York, has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
presently proposed to be conducted, to enter into and perform the Agreement and
to issue and sell the Notes as contemplated in the Agreement.
(b) Qualification to Do Business. The Company is duly licensed or
qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction where the nature of the business transacted by it
or the character of its properties owned or leased makes such qualification or
licensing necessary.
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(c) Subsidiaries. The Company has no Subsidiaries, as defined in
Section 5.1, except those listed in Annex I, which correctly sets forth whether
such Subsidiary is a Restricted Subsidiary and the jurisdiction of incorporation
and the percentage of the outstanding Voting Stock or equivalent interest of
each Subsidiary which is owned, of record or beneficially, by the Company and/or
one or more Subsidiaries. Each Subsidiary has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and is duly licensed or qualified and in good
standing as a foreign corporation in each other jurisdiction where the nature of
the business transacted by it or the character of its properties owned or leased
makes such qualification or licensing necessary. A list of those jurisdictions
wherein each Subsidiary is qualified to do business is set forth in Annex I.
Each Subsidiary has full corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as presently
proposed to be conducted. The Company or each Subsidiary has good and marketable
title to all of the shares it purports to own of the capital stock of each
Subsidiary, as the case may be, free and clear in each case of any Lien or
encumbrance, and all such shares have been duly issued and are fully paid and
nonassessable.
(d) Financial Statements. The consolidated balance sheets of the
Company and its Restricted Subsidiaries as of January 29, 2000 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended January 29, 2000, accompanied by the report and unqualified opinion
of PriceWaterhouseCoopers, independent certified public accountants, copies of
which have heretofore been delivered to you, were prepared in accordance with
GAAP (except as otherwise noted therein) and present fairly the consolidated
financial condition and consolidated results of operations and cash flows of the
Company and its Restricted Subsidiaries for and as of the end of each of such
year.
(e) No Contingent Liabilities or Adverse Changes. Neither the Company
nor any of its Subsidiaries has any contingent liabilities which are material to
the Company and its Subsidiaries taken as a whole other than as indicated on the
financial statements described in the foregoing paragraph (d) of this Section
3.1, and since January 29, 2000, there have been no material adverse changes in
the condition, financial or otherwise, of the Company and its Subsidiaries
except those occurring in the ordinary course of business.
(f) No Pending Litigation or Proceedings. Except as set forth on
Schedule 3.1(f) attached hereto, there are no actions, suits or proceedings
pending or threatened against or affecting the Company or any of its
Subsidiaries, at law or in equity or before or by any Federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which might result, either individually or
in the aggregate, in any material adverse change in the business, properties,
operations or condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or on the Company's ability to perform its
obligations under this Agreement or the Notes.
(g) Compliance with Law. (i) Neither the Company nor any of its
Subsidiaries is: (x) in default with respect to any order, writ, injunction or
decree of any court to which it is a named party; or (y) in default under any
law, rule, regulation, ordinance or order relating to its or their respective
businesses, the sanctions and penalties resulting from which defaults described
in clauses (x) and (y) might have a material adverse effect on the business,
properties, operations, assets or condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole, or on the Company's ability to
perform its obligations under this Agreement or the Notes.
(ii) Neither the Company nor any Subsidiary nor any Affiliate
of the Company is an entity defined as a "designated national" within the
meaning of the Foreign Assets Control Regulations, 31 C.F.R. Chapter V, or for
any other reason, subject to any restriction or prohibition under, or is in
violation of, any Federal statute or Presidential Executive Order, or any rules
or regulations of any department, agency or administrative body promulgated
under any such statute or Order, concerning trade or other relations with any
foreign country or any citizen or national thereof or the ownership or operation
of any property.
(h) Pension Reform Act of 1974. Based upon the representations of the
Purchasers set forth in Section 3.2, neither the purchase of the Notes by you
nor the consummation of any of the other transactions contemplated by this
Agreement is or will constitute a "prohibited transaction" within the meaning of
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or
Section 406 of the Employee Retirement
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Income Security Act of 1974, as amended ("ERISA"). The Internal Revenue Service
has issued a favorable determination letter with respect to each "employee
pension benefit plan," as defined in Section 3 of ERISA, established, maintained
or contributed to by the Company or any Subsidiary (except for any Plan which is
unfunded and maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees)
(a "Plan") that the same is qualified under Section 401(a) and related
provisions of the Code and that each related trust or custodial account is
exempt from taxation under Section 501(a) of the Code. All Plans of the Company
or any Subsidiary comply in all material respects with ERISA and other
applicable laws. There exist with respect to the Company or any Subsidiary no
"multi-employer plans," as defined in the Multi-employer Pension Plan Amendments
Act of 1980, for which a material withdrawal or termination liability may be
incurred. There exist with respect to all Plans or trusts established or
maintained by the Company or any Subsidiary: (i) no material accumulated funding
deficiency within the meaning of ERISA; (ii) no termination of any Plan or trust
which would result in any material liability to the Pension Benefit Guaranty
Corporation ("PBGC") or any "reportable event," as that term is defined in
ERISA, which is likely to constitute grounds for termination of any Plan or
trust by the PBGC; and (iii) no "prohibited transaction," as that term is
defined in ERISA, which is likely to subject any Plan, trust or party dealing
with any such Plan or trust to any material tax or penalty on prohibited
transactions imposed by Section 4975 of the Code.
(i) Title to Properties. The Company and each Subsidiary has (i) good
title in fee simple or its equivalent under applicable law to all the real
property owned by it and (ii) good title to all other Property owned by it, in
each case free from all Liens except (x) those securing Indebtedness of the
Company or a Subsidiary, which are listed in the attached Annex II and (y) other
Liens that would be permitted pursuant to Section 7.5.
(j) Leases. The Company and each Subsidiary enjoy peaceful and
undisturbed possession under all leases under which the Company or such
Subsidiary is a lessee or is operating. None of such leases contains any
provision which might materially and adversely affect the operation or use of
the property so leased. All of such leases are valid and subsisting and neither
the Company nor any Subsidiary is in default with respect to any such leases
which are material to the business, Properties, operations or condition,
financial or otherwise, of the Company and its Subsidiaries taken as a whole.
(k) Franchises, Patents, Trademarks and Other Rights. The Company and
each Subsidiary have all franchises, permits, licenses and other authority
necessary to carry on their businesses as now being conducted and as proposed to
be conducted, and none is in default under any of such franchises, permits,
licenses or other authority which are material to their respective businesses,
Properties, operations or condition, financial or otherwise. The Company and
each Subsidiary own or possess all patents, trademarks, service marks, trade
names, copyrights, licenses and rights with respect to the foregoing necessary
for the present conduct of their businesses, without any known conflict with the
rights of others which might result in any material adverse change in their
respective businesses, Properties, operations or condition, financial or
otherwise.
(l) Status of Notes and Sale of Notes. The Agreement and the Notes have
been duly authorized on the part of the Company, have been duly executed and
delivered by an authorized officer of the Company and constitute the legal,
valid and binding obligations of the Company, enforceable in accordance with
their terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in equity or at law. The sale of the Notes and compliance by the Company
with all of the provisions of this Agreement and of the Notes (i) are within the
corporate powers of the Company, (ii) have been duly authorized by proper
corporate action, (iii) are legal, (iv) will not violate any provisions of any
law or regulation or order of any court, governmental authority or agency and
(v) will not result in any breach of any of the provisions of, or constitute a
default under, or result in the creation of any Lien on any property of the
Company or any Subsidiary under the provisions of, any charter document, by-law,
loan agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their property may be bound.
(m) No Defaults. No event has occurred and no condition exists which,
upon the issuance of the Notes, would constitute an Event of Default, or with
the lapse of time or the giving of notice or both would become an Event of
Default, under this Agreement. Neither the Company nor any Subsidiary is in
default under any
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charter document, by-law, loan agreement or other material agreement or material
instrument to which it is a party or by which it or its property may be bound,
nor has the Company nor any Subsidiary obtained any waivers with respect to any
defaults under any loan agreements or other material agreements or instruments.
(n) Governmental Consent. Neither the nature of the Company or any of
its Subsidiaries, their respective businesses or properties, nor any
relationship between the Company or any of its Subsidiaries and any other
Person, nor any circumstances in connection with the offer, issue, sale or
delivery of the Notes is such as to require a consent, approval or authorization
of, or withholding of objection on the part of, or filing, registration or
qualification with, any governmental authority on the part of the Company in
connection with the execution and delivery of this Agreement or the offer,
issue, sale or delivery of the Notes.
(o) Taxes. All tax returns required to be filed by the Company or any
Subsidiary in any jurisdiction have been filed or appropriate extensions have
been filed with respect thereto, and all taxes, assessments, fees and other
governmental charges upon the Company or any Subsidiary, or upon any of their
respective properties, income or franchises, which are due and payable, have
been paid timely or within appropriate extension periods or are being contested
in good faith by appropriate proceedings. The Company does not know of any
proposed additional tax assessment against it or any Subsidiary for which
adequate provision has not been made on its books. The federal income tax
liability of the Company and its Subsidiaries has been finally determined by the
Internal Revenue Service and satisfied for all taxable years up to and including
the taxable year ended January 31, 1987, and no material controversy in respect
of additional taxes due since such date is pending or to the Company's knowledge
threatened. The provisions for taxes on the books of the Company and each
Subsidiary are adequate for all open years and for the current fiscal period.
(p) Status under Certain Statutes. Neither the Company nor any
Subsidiary is: (i) a "public utility company" or a "holding company," or an
"affiliate" or a "subsidiary company" of a "holding company," or an "affiliate"
of such a "subsidiary company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined
in the Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
(q) Private Offering. Neither the Company nor Manufacturers Hanover
Securities Corporation (the only Person authorized or employed by the Company as
agent, broker, dealer or otherwise in connection with the offering of the Notes
or any similar security of the Company) has offered any of the Notes or any
similar security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser, other than not more than 35 institutional investors,
including the Purchasers, each of whom was offered all or a portion of the Notes
at private sale for investment. Neither the Company nor anyone acting on its
authorization will offer the Notes or any part thereof or any similar securities
for issue or sale to, or solicit any offer to acquire any of the same from,
anyone so as to bring the issuance and sale of the Notes within the provisions
of Section 5 of the Securities Act.
(r) Effect of Other Instruments. Neither the Company nor any Subsidiary
is bound by any agreement or instrument or subject to any charter or other
corporate restriction which materially and adversely affects the business,
properties, operations, or condition, financial or otherwise, of the Company and
its Subsidiaries taken as a whole or the Company's ability to perform its
obligations under this Agreement or the Notes.
(s) Use of Proceeds. The Company will apply the proceeds from the sale
of the Notes to reduce the outstanding balance of bank Indebtedness in the
approximate amount of $30,000,000 incurred to finance plant modernization. None
of the transactions contemplated in this Agreement (including, without
limitation thereof, the use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Exchange Act, or any
regulations issued pursuant thereto, including, without limitation, Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System (12
C.F.R., Chapter II). Neither the Company nor any Subsidiary owns or intends to
carry or purchase any "margin stock" within the meaning of Regulation G, and
none of the proceeds from the sale of the Notes will be used to purchase or
carry or refinance any borrowing the
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proceeds of which were used to purchase or carry any "margin stock" or "margin
security" in violation of Regulations G, T, U or X.
(t) Condition of Property. All of the facilities of the Company and
each of its Subsidiaries are in sound operating condition and repair except for
facilities being repaired in the ordinary course of business or facilities which
individually or in the aggregate are not material to the business, properties,
operations, or condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole.
(u) Books and Records. The Company and each of its Subsidiaries (i)
maintain books, records and accounts in reasonable detail which accurately and
fairly reflect their respective transactions and business affairs, and (ii)
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in accordance with
management's general or specific authorization and to permit preparation of
financial statements in accordance with GAAP.
(v) Full Disclosure. Neither the Confidential Information Memorandum
dated as of May 18, 2000 which has heretofore been delivered to you, the
financial statements referred to in paragraph (d) of this Section 3.1, nor this
Agreement, nor any other statement or document furnished by the Company to you
in connection with the negotiation of the sale of the Notes and in connection
with the execution of this Agreement, nor any document executed or delivered in
connection therewith, taken together, contain any untrue statement of a material
fact or omit a material fact necessary to make the statements contained therein
or herein not misleading in light of the circumstances under which they were
made. There is no fact known, or which, with reasonable diligence would be
known, by the Company which the Company has not disclosed to you in writing
which has a material adverse effect on or, so far as the Company can now
foresee, will have a material adverse effect on the business, property,
operations or condition, financial or otherwise, of the Company and its
Subsidiaries taken as a whole or the ability of the Company to perform its
undertakings under and in respect of this Agreement and the Notes.
(w) Environmental Compliance. The Company and each Subsidiary (i) is in
compliance in all material respects with all applicable environmental,
transportation, health and safety statutes and regulations, including, without
limitation, regulations promulgated under the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. 'SS''SS'6901 et seq., and (ii) has not acquired, incurred
or assumed, directly or indirectly, any material contingent liability in
connection with the release or storage of any toxic or hazardous waste or
substance into the environment. The Company and its Subsidiaries have not
acquired, incurred or assumed, directly or indirectly, any material contingent
liability in connection with a release or other discharge of any hazardous,
toxic or waste material, including petroleum, on, in, under or into the
environment surrounding any property owned, used or leased by any of them.
3.2 Representations of the Purchasers. As an inducement to, and as part
of the Company's consideration for the sale of the Notes pursuant to this
Agreement, each of you represents, respectively, and in entering into this
Agreement the Company understands, that (i) you are an Institutional Holder,
(ii) you are acquiring Notes for the purpose of investment and for your own
account and not with a view to the distribution thereof; provided that the
disposition of your property shall at all times be and remain within your
control, subject, however, to compliance with Federal securities laws. You
acknowledge that the Notes have not been registered under the Securities Act or
the laws of any state and you understand that the Notes must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. You have been advised that the
Company does not contemplate registering, and is not legally required to
register, the Notes under the Securities Act.
Each of you further represents that either: (i) no part of the funds to
be used by you to purchase the Notes will constitute assets allocated to any
separate account maintained by you; or (ii) no part of the funds to be used by
you to purchase the Notes will constitute assets allocated to any separate
account maintained by you such that the application of such funds will
constitute a prohibited transaction under Section 406 of ERISA; or (iii) all or
a part of such funds will constitute assets of one or more separate accounts
maintained by you, and you have disclosed to the Company the names of such
employee benefit plans whose assets in such separate account or accounts exceed
10% of the total assets or are expected to exceed 10% of the total assets of
such account or accounts as of the date of such purchase and the Company has
advised you in writing that the Company is not a party-in-interest nor are
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the Notes employer securities with respect to the particular employee benefit
plans disclosed to the Company by you as aforesaid (for the purpose of this
clause (iii), all employee benefit plans maintained by the same employer or
employee organization are deemed to be a single plan). As used herein, the terms
"separate account," "party-in-interest," "employer securities," and "employee
benefit plan" have the meanings assigned to them in ERISA.
'SS'4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date shall be
subject to the performance by the Company of its agreements hereunder which are
to be performed at or prior to the time of delivery of the Notes, and to the
following conditions to be satisfied on or before the Closing Date:
4.1 Representations and Warranties. The representations and warranties
of the Company contained in this Agreement or otherwise made in writing in
connection herewith shall be true and correct on or as of the Closing Date and
the Company shall have delivered to you a certificate to such effect, dated the
Closing Date and executed by the President or the chief financial officer of the
Company.
4.2 Legal Opinions. You shall have received from Xxxxxxx, Carton &
Xxxxxxx, who is acting as your special counsel in this transaction, and from
Xxxxxxxxx X. Xxxxxxxxx, associate counsel to the Company and from Shearman &
Sterling, special counsel for the Company, their respective opinions, dated as
of such Closing Date, in form and substance satisfactory to you and covering
substantially the matters set forth or provided in the attached Exhibit B.
4.3 Events of Default. No event shall have occurred and be continuing
on the Closing Date which would constitute an Event of Default, as defined in
Section 8.1, or with notice or lapse of time or both would become such an Event
of Default, and the Company shall have delivered to you a certificate to such
effect, dated the Closing Date and executed by the President or the chief
financial officer of the Company.
4.4 Payment of Fees and Expenses. The Company shall have paid all
reasonable fees, expenses, costs and charges, including the fees and expenses of
your special counsel, incurred by you through the date hereof and incident to
the proceedings in connection with, and transactions contemplated by, this
Agreement and the Notes (including any amendments, renewals, supplements or
replacements thereto).
4.5 Accountants' Letter. You shall have received a letter from the
Company's independent certified public accountants acknowledging that you and
the other Purchasers may rely on their opinion accompanying the audited
financial statements referred to in Section 3.1(d).
4.6 Legality of Investment. Your acquisition of the Notes shall
constitute a legal investment as of the Closing Date under the laws and
regulations of each jurisdiction to which you may be subject (without resort to
any "basket" or "leeway" provision which permits the making of an investment
without restriction as to the character of the particular investment being
made), and such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation.
4.7 Private Placement Number. A private placement number shall have
been obtained from Standard & Poor's Corporation.
4.8 Sale of All Notes. Contemporaneously with the sale of the Notes to
you, the Company will complete and close the sale of Notes being purchased by
each of the Purchasers set forth in Schedule I hereto.
4.9 Proceedings and Documents. All proceedings taken in connection with
the transactions contemplated by this Agreement, and all documents necessary to
the consummation of such transactions shall be satisfactory in form and
substance to you and your special counsel, and you and your special counsel
shall have received copies (executed or certified as may be appropriate) of all
legal documents or proceedings which you and they may reasonably request.
'SS'5. INTERPRETATION OF AGREEMENT
9
5.1 Certain Terms Defined. The terms hereinafter set forth when used in
this Agreement shall have the following meanings:
1996 Note Agreement - That Note Agreement dated as of November 15, 1996
between THC Systems, Inc., the Company and the Purchasers which are signatories
thereto.
1996 Notes - The senior notes issued pursuant to the terms of the 1996
Note Agreement.
Affiliate - Any Person (other than a Subsidiary Guarantor) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Company or any Subsidiary or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% of the equity interest) of which
is beneficially owned or held by the Company or a Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
Agreement - As defined in Section 1.1.
Bank Agreement - That Credit Agreement dated as of June 2, 2000, among
the Company, The Chase Manhattan Bank, as Administrative Agent, Banc of America
Securities, LLC, as Syndication Agent, Fleet National Bank, as Documentation
Agent, HSBC Bank, USA, as Senior Managing Agent, Chase Securities Inc., as
Arranger, and the banks signatory to such agreement, as such agreement may be
from time to time amended. The term "Bank Agreement" shall also include
replacement or additional credit agreements entered into by the Company or any
Restricted Subsidiary Guarantor with banks or other institutional lenders.
Banks - The bank lenders to the Company pursuant to the Bank Agreement.
Business Day - Any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York; Los Angeles, California; or
Chicago, Illinois are required or authorized to be closed.
Capital Lease Obligations - The obligations of any Person to pay rent
or other amounts under any lease of (or other arrangement conveying the right to
use) real or personal property, or a combination thereof, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with GAAP.
Change of Control - The occurrence of any one or more of the following:
(a) any Person (other than an Executive Officer) or a group of Persons
(other than a group of Persons consisting solely of Executive Officers) shall
purchase or otherwise acquire, directly or indirectly, in one or more
transactions, beneficial ownership of securities representing 20% or more of the
combined voting power of the Company's Voting Stock, determined on the date
prior to the date of such purchase or acquisition (or, if there is more than one
transaction, the date of the last such purchase or acquisition);
(b) the Company shall convey, transfer, lease or otherwise dispose of
all or substantially all Consolidated Total Assets to any Person (other than a
Majority-Owned Restricted Subsidiary);
(c) there shall occur, in any consecutive twenty-four month period, a
replacement of or change in a majority of the members of the Board of Directors
of the Company, and such replacement shall not have been initiated by the Board
of Directors which is incumbent at the time of commencement of such twenty-four
month period;
(d) the Company shall merge or consolidate into any other corporation
other than into a Majority-Owned Restricted Subsidiary (and the Company shall
not be the surviving corporation) in a transaction in which
10
more than 20% of the voting power of the Company's Voting Stock (determined on
the date prior to the date of the consummation of such transaction) is
exchanged;
(e) the Company or any Restricted Subsidiary shall purchase or
otherwise acquire, directly or indirectly, in one or more transactions,
beneficial ownership of Voting Stock of the Company, if, after giving effect to
such purchase or acquisition, the Company (together with all Restricted
Subsidiaries) shall have acquired, during any period of twelve consecutive
months, beneficial ownership of an aggregate of 30% or more of the Voting Stock
of the Company outstanding on the date immediately prior to the last such
purchase or acquisition during such period (or, if there is more than one
transaction, the date of the last such purchase or acquisition); or
(f) the Company shall make a distribution of cash, securities or other
properties (other than regular periodic cash dividends at a rate which is
substantially consistent with past practice, including with respect to increases
in dividends, and other than Common Stock or rights to acquire Common Stock) to
holders of capital stock (including by means of dividend, reclassification,
recapitalization or otherwise) which, together with all other such distributions
during the 365-day period preceding the date of such distribution, has an
aggregate fair market value in excess of an amount equal to 30% of the fair
market value of the Voting Stock of the Company outstanding on the date
immediately prior to such distribution.
Closing Date - As defined in Section 1.2.
Code - As defined in Section 3.1(h).
Consolidated EBITDA - For any period, Consolidated Net Income for such
period plus, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, (c) depreciation and amortization expense,
and (d) amortization of intangibles (including, but not limited to, goodwill)
and organization costs, all as determined on a consolidated basis; provided that
(y) in determining Consolidated EBITDA of the Company and its Restricted
Subsidiaries for any period that includes the Fiscal Quarter ending October 30,
1999, there shall also be added to Consolidated Net Income the sum of
$8,500,000, representing pre-tax extraordinary and non-recurring charges
incurred in such quarter, and (z) for purposes of calculating Consolidated
EBITDA of the Company and its Restricted Subsidiaries for any period, the
Consolidated EBITDA of any Person acquired by the Company or its Restricted
Subsidiaries during such period shall be included on a pro forma basis for such
period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the first day
of such period) if the consolidated balance sheet of such acquired Person and
its consolidated Subsidiaries as at the end of the period preceding the
acquisition of such Person and the related consolidated statements of income and
stockholders' equity and of cash flows for the period in respect of which
Consolidated EBITDA is to be calculated have been either (A) reported on without
a qualification arising out of the scope of the audit by independent certified
public accountants of nationally recognized standing or (B) found acceptable by
the holders of the Notes.
Consolidated Interest Coverage Ratio - As at the last day of any period
of four consecutive Fiscal Quarters, the ratio of (a) Consolidated EBITDA for
such period to (b) Consolidated Interest Expense for such period.
Consolidated Interest Expense - For any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Company and
its Restricted Subsidiaries for such period with respect to all outstanding
Indebtedness of the Company and its Restricted Subsidiaries, as determined in
accordance with GAAP.
Consolidated Leverage Ratio - As at the last day of any period of four
consecutive Fiscal Quarters, the ratio of (a) Consolidated Total Debt on such
date to (b) Consolidated EBITDA for such period.
Consolidated Net Income - For any period, the gross revenues of the
Company and its Restricted Subsidiaries for such period less all expenses and
other proper charges (including taxes on income), determined on a consolidated
basis in accordance with GAAP after eliminating earnings or losses attributable
to outstanding minority interests, but excluding in any event:
11
(a) (i) any gains or losses on the sale or other
disposition of Investments and (ii) any gains or losses on the sale or
other disposition of plant, property and equipment which gains or
losses exceed, in the aggregate, $100,000 during any Fiscal Year and
any taxes on such excluded gains and any tax deductions or credits on
account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted
Subsidiary accrued prior to the date it became a Restricted Subsidiary,
except to the extent permitted to be included in Consolidated EBITDA
pursuant to clause (z) of the definition of Consolidated EBITDA set
forth above;
(d) net earnings and losses of any Person (other than
a Restricted Subsidiary), substantially all the assets of which have
been acquired in any manner by the Company or any Restricted
Subsidiary, realized by such Person prior to the date of such
acquisition, except to the extent permitted to be included in
Consolidated EBITDA pursuant to clause (z) of the definition of
Consolidated EBITDA set forth above;
(e) net earnings and losses of any Person (other than
a Restricted Subsidiary) with which the Company or a Restricted
Subsidiary shall have consolidated or which shall have merged into or
with the Company or a Restricted Subsidiary prior to the date of such
consolidation or merger, except to the extent permitted to be included
in Consolidated EBITDA pursuant to clause (z) of the definition of
Consolidated EBITDA set forth above;
(f) net earnings of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest unless such net earnings shall
have actually been received by the Company or such Restricted
Subsidiary in the form of cash distributions or readily marketable
securities;
(g) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment of dividends
to the Company or any other Restricted Subsidiary.
(h) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(i) any deferred or other credit representing any
excess of the equity in any Subsidiary at the date of acquisition
thereof over the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any
securities of the Company or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except
to the extent that provision for such contingency reserve shall have
been made from income arising during such fiscal period or during the
period consisting of the four consecutive Fiscal Quarters immediately
following the end of such fiscal period; and
(l) any other extraordinary or non-recurring income
or gain.
Consolidated Net Worth - At any date, all amounts which would, in
accordance with GAAP, be included on a consolidated balance sheet of the Company
and its Restricted Subsidiaries under stockholders' equity at such date.
Consolidated Tangible Assets - Consolidated Total Assets less the sum
of (i) deferred assets, determined in accordance with GAAP on a consolidated
basis, other than prepaid insurance, prepaid taxes, deferred taxes and deferred
pension expense, (ii) all goodwill, trade names, trademarks, patents,
organization expense, unamortized debt discount and expense and other similar
intangibles properly classified as intangibles in accordance with GAAP and (iii)
Restricted Investments.
12
Consolidated Total Assets - The consolidated total assets of the
Company and its Restricted Subsidiaries determined in accordance with GAAP.
Consolidated Total Debt - As of the date of determination, the
aggregate principal amount of all Indebtedness of the Company and its Restricted
Subsidiaries at such date, determined on a consolidated basis in accordance with
GAAP.
Determination Date - The day 2 Business Days before the date fixed for
a prepayment pursuant to a notice required by Sections 2.2(b) or 2.3 or the day
2 Business Days before the date of declaration pursuant to Section 8.2.
ERISA - As defined in Section 3.1(h).
Event of Default - As defined in Section 8.1.
Exchange Act - The Securities Exchange Act of 1934, as amended, and as
it may be further amended from time to time.
Executive Officers - The Persons listed as "executive officers" in the
most recent Form 10-K of the Company filed pursuant to the Exchange Act.
Fiscal Quarter or Fiscal Year - The fiscal quarter or fiscal year of
Borrower.
GAAP - Generally accepted accounting principles in the United States of
America, consistently applied.
Guaranties - All obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) of a
Person guaranteeing or, in effect, guaranteeing any Indebtedness, dividend or
other obligation, of any other Person in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (iii) to lease property
or to purchase securities or other property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation, or (iv)
otherwise to assure the owner of the Indebtedness or obligation against loss in
respect thereof. For the purposes of all computations made under this Agreement,
a Guaranty in respect of any Indebtedness for borrowed money shall be deemed to
be Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
Indebtedness - (i) All items of borrowed money, including Capital Lease
Obligations, which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet as of the
date at which Indebtedness is to be determined, (ii) all Guaranties (other than
Guaranties of Indebtedness of the Company by a Restricted Subsidiary Guarantor
in accordance with Section 7.12 or of a Restricted Subsidiary Guarantor by the
Company), letters of credit and endorsements (other than of notes, bills and
checks presented to banks for collection or deposit in the ordinary course of
business), in each case to support Indebtedness of other Persons; and (iii) all
items of borrowed money secured by any mortgage, pledge or Lien existing on
Property owned subject to such mortgage, pledge, or Lien, whether or not the
borrowed money secured thereby shall have been assumed by the Company or any
Restricted Subsidiary. Indebtedness of the Company and its Restricted
Subsidiaries at January 25, 1992 is set forth in Annex II hereto.
Institutional Holder - Any bank, trust company, insurance company,
pension fund, mutual fund or other similar financial institution, including,
without limiting the foregoing, any "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act, which is or becomes a holder of
any Note.
13
Investments - All investments made, in cash or by delivery of property,
directly or indirectly, in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.
Lien - Any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to file any financing statement under
the Uniform Commercial Code of any jurisdiction in connection with any of the
foregoing.
Long-Term Lease - Any lease of real or personal property (other than a
Capitalized Lease) having an original term of more than three years, including
any period for which the lease may be renewed at the option of the lessor,
whether or not theretofore renewed.
Majority-Owned - When applied to a Restricted Subsidiary, any
Restricted Subsidiary 80% of the Voting Stock of which is owned by the Company
and/or its Majority-Owned Restricted Subsidiaries.
Noteholder - Any holder of a Note.
Notes - As defined in Section 1.1.
PBGC - As defined in Section 3.1(h).
Plan - As defined in Section 3.1(h).
Person - Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Priority Indebtedness - Without duplication (i) all Indebtedness of
Restricted Subsidiaries (except to the Company or a Majority-Owned Restricted
Subsidiary Guarantor) in each case unsecured by Liens, (ii) the aggregate amount
of Guaranties by Restricted Subsidiaries (except of Indebtedness of the Company
in accordance with Section 7.13 or a Majority-Owned Restricted Subsidiary in
accordance with Section 7.13), (iii) all Indebtedness of the Company and its
Restricted Subsidiaries excluding the 1996 Notes (except to the Company or a
Majority-Owned Restricted Subsidiary Guarantor) secured by any Lien on the
Property of the Company or any Restricted Subsidiary and (iv) the redemption or
liquidation value (whichever is higher) of all equity securities of Restricted
Subsidiaries (other than common stock) which are not legally and beneficially
owned by the Company or its Restricted Subsidiaries.
Property - Any real or personal or tangible or intangible asset.
Reinvestment Yield - The sum of (i) the yield set forth on page "USD"
of the Bloomberg Financial Markets Service at 11:00 a.m., Central Time on the
Determination Date opposite the maturity of the U.S. Treasury Security
corresponding to the Weighted Average Life to Maturity, rounded to the nearest
month, of the principal amount of the Notes to be prepaid, plus (ii) .50 of 1%
with respect to Notes to be prepaid pursuant to Section 2.2(a) or (b) or Notes
the payment of which has been accelerated with premium pursuant to Section 8.2.
If no maturity exactly corresponding to such rounded Weighted Average Life to
Maturity shall appear therein, yields for the two most closely corresponding
published maturities (one of which occurs prior and the other subsequent to the
Weighted Average Life to Maturity) shall be calculated pursuant to the foregoing
sentence and the Reinvestment Yield shall be interpolated from such yields on a
straight-line basis (rounding in each of such relevant periods, to the nearest
month).
Rentals - As of the date of any determination thereof, all fixed
payments (including all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the property) payable by the
Company or a Restricted Subsidiary, as lessee or sublessee under a lease of real
or personal property, but exclusive
14
of any amounts required to be paid by the Company or a Restricted Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes, assessments, amortization and similar
charges. Fixed rents under any so-called "percentage leases" shall be computed
solely on the basis of the minimum rents, if any, required to be paid by the
lessee regardless of sales volume or gross revenues.
Restricted Investments - Any Investment, except for:
(a) Investments in Restricted Subsidiary Guarantors;
(b) Investments made in the ordinary course of business in
Property and assets to be used in the ordinary course of business of the
Company and its Restricted Subsidiaries;
(c) Investments in Current Assets arising from the sale of
goods and services in the ordinary course of business of the Company and
its Restricted Subsidiaries;
(d) advances to and Guaranties of loans to employees of the
Company and its Restricted Subsidiaries for expenses incurred in the
ordinary course of business;
(e) Investments in direct obligations of the United States or
any instrumentality thereof, provided that such obligations have a final
maturity not in excess of one year from the date of acquisition thereof;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof issued by (i) Chase Manhattan
Bank, or (ii) in the case of any other bank, a bank organized under the
laws of the United States or any state thereof, having capital, surplus
and undivided profits aggregating at least $100,000,000 and whose
long-term corporate debt is, at the time of acquisition thereof by the
Company or any Subsidiary, accorded a rating of "A" or better by Xxxxx'x
Investors Service, Inc., or "A" or better by Standard & Poor's Ratings
Group;
(g) Investments in commercial paper maturing no more than 270
days from the date of issuance issued by any corporation organized under
the laws of the United States or any state thereof, rated in the highest
category by Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings
Group;
(h) Investments in money market funds registered under the
Investment Company Act of 1940 which invest in securities which, in the
aggregate, have an average rating of "A" or better (or an equivalent) by
Xxxxx'x Investors Services, Inc. or Standard & Poor's Ratings Group;
(i) Investments in tax-exempt municipal bonds maturing not
more than one year from the date of issue and which bear at least a
MIG-1 rating; and
(j) Guaranties by the Company of Long-Term Leases of
Majority-Owned Restricted Subsidiaries.
Restricted Subsidiary - Any Subsidiary (i) which is organized under the
laws of the Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxx, Xxxxxx or a member of the
European Union or a jurisdiction thereof, (ii) which conducts substantially all
of its business and payments within the United States, Puerto Rico, Canada,
Mexico or any member of the European Union, (iii) a majority of each class of
capital stock of which is legally and beneficially owned by the Company or a
Restricted Subsidiary or (iv) which is designated as a "Restricted Subsidiary"
in Annex I hereto or in a written notice provided to each Noteholder. The
Company and each Restricted Subsidiary which issues a Subsidiary Guarantee
shall, as long as such Subsidiary Guarantee remains in effect, at all times
remain a Restricted Subsidiary.
Restricted Subsidiary Guarantor - Any Subsidiary Guarantor which is a
Restricted Subsidiary.
Securities Act - The Securities Act of 1933, as amended, and as it may
be further amended from time to time.
15
Sharing Agreement - The Sharing Agreement dated as of June 2, 2000
among the Banks, Allstate Life Insurance Company, Allstate Insurance Company and
Pacific Life Insurance Company (formerly known as Pacific Mutual Life Insurance
Company) substantially in the form attached hereto as Exhibit C.
Subordination Agreement - That Subsidiary Subordination Agreement dated
as of June 2, 2000 providing that all Indebtedness owed by each Subsidiary
Guarantor to the Company is subordinated to the prior payment of Indebtedness
owed to the Noteholders under this Agreement and the Subsidiary Guarantees
substantially in the form attached hereto as Exhibit D.
Subsidiary - Any corporation of which more than 50% of the outstanding
shares of Voting Stock are owned or controlled by the Company or one or more
Subsidiaries.
Subsidiary Guarantees - The Guarantee Agreements substantially in the
form attached as Exhibit E hereto executed by each Subsidiary Guarantor.
Subsidiary Guarantors - Each of Buffalo China, Inc., Encore Promotions,
Inc., THC Systems, Inc. (successor to Oneida Community China, Inc.) and each
Restricted Subsidiary created or acquired after January 19, 1996, which becomes
a "Guarantor" as such term is defined in the Bank Agreement or which is required
to issue a Subsidiary Guaranty pursuant to Section 7.12.
Voting Stock - Capital stock of any class of a corporation having power
to vote for the election of members of the board of directors of such
corporation, or persons performing similar functions (whether or not at the time
stock of any class shall have or might have special voting powers or rights by
reason of the happening of any contingency).
Weighted Average Life to Maturity - As applied to any prepayment of
principal of the Notes, at any date, the number of years obtained by dividing
(a) the then outstanding principal amount of the Notes to be prepaid into (b)
the sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity, or other required payment,
including payment at final maturity, foregone by such prepayment by (ii) the
number of years (calculated to the nearest 1/12th) which will elapse between
such date and the making of such payment.
Wholly-Owned Restricted Subsidiary - When applied to a Restricted
Subsidiary, any Restricted Subsidiary 100% of the Voting Stock of which is owned
by the Company or its Wholly-Owned Restricted Subsidiaries.
Terms which are defined in other Sections of this Agreement shall have
the meanings specified therein.
5.2 Accounting Principles. Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP in
force at the time of determination, except where such principles are
inconsistent with the requirements of this Agreement.
5.3 Valuation Principles. Except where indicated expressly to the
contrary by the use of terms such as "fair value," "fair market value" or
"market value," each asset, each liability and each capital item of any Person,
and any quantity derivable by a computation involving any of such assets,
liabilities or capital items, shall be taken at the net book value thereof for
all purposes of this Agreement. "Net book value", for purposes of Section 7.8
hereof, with respect to any asset, liability or capital item of any Person shall
mean the amount at which the same is recorded or, in accordance with GAAP,
should have been recorded in the books of account of such Person, as reduced by
any reserves which have been or, in accordance with GAAP, should have been set
aside with respect thereto, without giving effect to any write-up, write-down or
write-off, relating thereto which was made after the date of this Agreement.
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5.4 Direct or Indirect Actions. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
5.5 Property. Wherever the word "property" is used in this Agreement,
the lower case "p" is changed to the upper case "P".
5.6 Officers. Whenever the phrase "chief financial officer" or "chief
accounting officer" is used, the phrase "or Senior Vice President, Finance,
Treasurer or Controller" shall be added.
'SS'6. AFFIRMATIVE COVENANTS
The Company agrees that, for so long as any amount remains unpaid on
any Note:
6.1 Corporate Existence. The Company will maintain and preserve, and
will cause each Subsidiary to maintain and preserve, its corporate existence and
right to carry on its business and use, and cause each Subsidiary to use, its
best efforts to maintain, preserve, renew and extend all of its rights, powers,
privileges and franchise necessary to the proper conduct of its business;
provided, however, that the foregoing shall not prevent any transaction
permitted by Sections 7.7 or 7.8.
6.2 Insurance. The Company will insure and keep insured at all times
all of its properties and all of its Subsidiaries' properties which are of an
insurable nature and of the character usually insured by companies operating
similar properties, against loss or damage by fire and from other causes
customarily insured against by companies engaged in similar businesses in such
amounts as are usually insured against by such companies. The Company also will
maintain for itself and its Subsidiaries at all times with financially sound and
reputable insurers adequate insurance against loss or damage from such hazards
and risks to the person and property of others as are usually insured against by
companies operating properties similar to the properties of the Company and its
Subsidiaries. All such insurance shall be carried with financially sound and
reputable insurers accorded a rating of A-XII or better by A.M. Best Company,
Inc. A summary of insurance presently in force is contained in the attached
Annex IV.
6.3 Taxes, Claims for Labor and Materials. The Company will pay and
discharge when due, and will cause each Subsidiary to pay and discharge when
due, all taxes, assessments and governmental charges or levies imposed upon it
or its property or assets, or upon properties leased by it (but only to the
extent required to do so by the applicable lease), prior to the date on which
penalties attach thereto, and all lawful claims which, if unpaid, might become a
Lien upon its property or assets, provided that neither the Company nor any
Subsidiary shall be required to pay any such tax, assessment, charge, levy or
claim, the payment of which is being contested in good faith and by proper
proceedings that will stay the forfeiture or sale of any property and with
respect to which adequate reserves are maintained in accordance with GAAP.
6.4 Maintenance of Properties. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
properties (whether owned in fee or a leasehold interest) in good repair and
working order, ordinary wear and tear excepted, and from time to time will make
all necessary repairs, replacements, renewals and additions.
6.5 Maintenance of Records. The Company will keep, and will cause each
Subsidiary to keep, at all times proper books of record and account in which
full, true and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such Subsidiary, in
accordance with GAAP (except for such changes as are disclosed in such financial
statements or in the notes thereto and concurred in by the independent certified
public accountants), and the Company will, and will cause each Subsidiary to,
provide reasonable protection against loss or damage to such books of record and
account.
6.6 Financial Information and Reports. The Company will furnish to you
and to any other Institutional Holder (in duplicate if you or such other holder
so request), the following:
17
(a) As soon as available and in any event within 45 days after the end
of each of the first three quarterly accounting periods of each fiscal year of
the Company, a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of the end of such period and consolidated statements of
earnings and cash flows of the Company and its Restricted Subsidiaries for the
periods beginning on the first day of such fiscal year and the first day of such
quarterly accounting period and ending on the date of such balance sheet,
setting forth in comparative form the corresponding consolidated figures for the
corresponding periods of the preceding fiscal year, all in reasonable detail
prepared in accordance with GAAP (except for changes disclosed in such financial
statements or in the notes thereto and concurred in by the Company's independent
certified public accountants) and certified by the chief financial officer or
chief accounting officer of the Company (i) outlining the basis of presentation,
and (ii) stating that the information presented in such statements presents
fairly the financial condition of the Company and its Subsidiaries and the
results of operations for the period, subject to customary year-end audit
adjustments; provided that so long as the Company shall file a quarterly report
on Form 10-Q or any similar form with the Securities and Exchange Commission or
any successor agency which contains the information set forth in this paragraph
(a), the requirements of this paragraph (a) shall be satisfied by forwarding
Form 10-Q to the holder of the Notes within such 45-day period;
(b) As soon as available and in any event within 90 days after the last
day of each fiscal year a consolidated and a consolidating balance sheet of the
Company and its Restricted Subsidiaries as of the end of such fiscal year and
the related audited consolidated and consolidating statements of earnings,
stockholders' equity and cash flows for such fiscal year, in each case setting
forth in comparative form figures for the preceding fiscal year, all in
reasonable detail, prepared in accordance with GAAP (except for changes
disclosed in such financial statements or in the notes thereto and concurred in
by independent certified public accountants) and accompanied by a report as to
the consolidated balance sheet and the related consolidated statements of
PriceWaterhouseCoopers or any firm of independent public accountants of
recognized national standing selected by the Company to the effect that such
financial statements have been prepared in conformity with GAAP and present
fairly, in all material respects, the financial condition of the Company and its
Restricted Subsidiaries and that the examination of such financial statements by
such accounting firm has been made in accordance with generally accepted
auditing standards; provided that so long as the Company shall file an annual
report on Form 10-K or any similar form with the Securities and Exchange
Commission or any successor agency which contains the information set forth in
this paragraph (b), the requirements of this paragraph (b) shall be satisfied by
forwarding Form 10-K to the holder of the Notes within such 90-day period;
(c) Together with the financial statements delivered pursuant to
paragraphs (a) and (b) of this Section 6.6, a certificate of the chief financial
officer or chief accounting officer, (i) to the effect that such officer has
re-examined the terms and provisions of this Agreement and that at the date of
such certificate, during the periods covered by such financial reports and as of
the end of such periods, the Company is not, or was not, in default in the
fulfillment of any of the terms, covenants, provisions and conditions of this
Agreement and that no Event of Default, or event which, with the lapse of time
or the giving of notice, or both, would become an Event of Default, is occurring
or has occurred as of the date of such certificate, during such periods and as
of the end of such periods, or if the signer is aware of any such default, event
or Event of Default, he shall disclose in such statement the nature thereof, its
period of existence and what action, if any, the Company has taken or proposes
to take with respect thereto, and (ii) stating whether the Company is in
compliance with Sections 7.1 through 7.13 and setting forth, in sufficient
detail, the information and computations required to establish whether or not
the Company was in compliance with the requirements of Sections 7.1 through 7.9
during the periods covered by the financial reports then being furnished and as
of the end of such periods;
(d) Together with the financial reports delivered pursuant to paragraph
(b) of this Section 6.6, a certificate of the independent certified public
accountants (i) stating that in making the examination necessary for expressing
an opinion on such financial statements, nothing came to their attention that
caused them to believe that there is in existence or has occurred any Event of
Default hereunder, or any event (the occurrence of which is ascertainable by
accountants in the course of normal audit procedures) which, with the lapse of
time or the giving of notice, or both, would become an Event of Default
hereunder or, if such accountants shall have obtained knowledge of any such
event or Event of Default, describing the nature thereof and the length of time
it has existed and (ii) acknowledging that holders of the Notes may rely on
their opinion on such financial statements;
18
(e) Within 15 days after the Company obtains knowledge thereof, notice
of any litigation not fully covered by insurance or any governmental proceeding
pending against the Company or any Subsidiary in which the damages sought exceed
$5,000,000 or which might otherwise materially adversely affect the business,
property, operations or condition, financial or otherwise, of the Company and
its Subsidiaries taken as a whole;
(f) As soon as available, copies of each financial statement, notice,
report and proxy statement which the Company shall furnish to its stockholders;
copies of all press releases; copies of each registration statement and periodic
report which the Company may file with the Securities and Exchange Commission,
and any other similar or successor agency of the Federal government
administering the Securities Act, the Exchange Act or the Trust Indenture Act of
1939, as amended; copies of each report relating to the Company or its
securities which the Company may file with any securities exchange on which any
of the Company's securities may be registered; copies of any orders in any
material proceedings to which the Company or any of its Subsidiaries is a party,
issued by any governmental agency, Federal or state, having jurisdiction over
the Company or any of its Subsidiaries; and, except at such times as the Company
is a reporting company under Section 13 or 15(d) of the Exchange Act or has
complied with the requirements for the exemption from registration under the
Exchange Act set forth in Rule 12g-3-2(b), such financial or other information
as any holder of the Notes may reasonably determine is required to permit such
holder to comply with the requirements of Rule 144A under the Securities Act in
connection with the resale by it of the Notes;
(g) As soon as available, a copy of each other report submitted to the
Company or any Subsidiary by independent accountants retained by the Company or
any Subsidiary in connection with any interim or special audit made by them of
the books of the Company or any Subsidiary; and
(h) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Company and its
Subsidiaries.
6.7 Inspection of Properties and Records; Confidentiality. The Company
will allow, and will cause each Subsidiary to allow, any representative of you
or any other Institutional Holder, so long as you or such other Institutional
Holder holds any Note, at your expense, to visit and inspect any of its
properties, to examine its books of record and account and to discuss its
affairs, finances and accounts with its officers and its public accountants (and
by this provision the Company authorizes such accountants to discuss with you or
such Institutional Holder its affairs, finances and accounts), all at such
reasonable times and as often as you or such Institutional Holder may reasonably
request. So long as an Event of Default or an event which, with the passage of
time or the giving of notice, or both, would become an Event of Default has
occurred and is continuing, the Company agrees to pay the costs of any
inspections made pursuant to this Section 6.7. Each Noteholder covenants and
agrees to treat as confidential all nonpublic information furnished to it
pursuant to the provisions of Sections 6.6 and this 6.7 which has been
designated in writing as confidential by an officer of the Company; provided
that each Noteholder reserves the right to make such disclosure to (i) such
Noteholder's directors, officers, employees, auditors, financial advisers,
rating agencies and attorneys, (ii) any other Noteholder, (iii) any Person to
which such Noteholder offers to sell such Note or any part thereof or a
participation in all or any part of such Note, (iv) any Federal or state
regulatory authority having jurisdiction over such Noteholder, (v) the National
Association of Insurance Commissioners or any similar organization, (vi) effect
compliance with any law, rule, regulation or order applicable to you or any
other Institutional Holder, (vii) in response to any subpoena or other legal
process, (viii) in connection with any litigation to which you or any other
Institutional Holder are a party, or (ix) if an Event of Default has occurred
and is continuing, to the extent you or any other Institutional Holder may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under the
Notes, this Agreement, the Subsidiary Guarantees or the Subordination Agreement.
The confidentiality restrictions contained in this Section 6.7 shall not apply
to information which (a) is or becomes generally available to the public other
than as a result of a disclosure by any Noteholder or its representatives or (b)
becomes available to any Noteholder on a nonconfidential basis from a source
other than the Company or one of its agents.
19
6.8 ERISA. (a) The Company agrees that all assumptions and methods used
to determine the actuarial valuation of employee benefits, both vested and
unvested, under any Plan of the Company or any Subsidiary, and each such Plan,
whether now existing or adopted after the date hereof, will comply in all
material respects with ERISA and other applicable laws.
(b) The Company will not at any time permit any Plan established,
maintained or contributed to by it or any Subsidiary or "affiliate" (as defined
in Section 407(d)(7) of ERISA) to:
(i) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such term
is defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to
result in the imposition of a lien on the property of the Company or any
Subsidiary pursuant to Section 4068 of ERISA, if and to the extent such
termination is within the control of the Company;
if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Company or any Subsidiary or ERISA affiliate to a
liability which, in the aggregate, is material in relation to the business,
property, operations, or condition, financial or otherwise, of the Company and
its Subsidiaries taken as a whole.
(c) Upon the request of you or any other Institutional Holder, the
Company will furnish a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service. Copies of annual reports
shall be delivered no later than 30 days after the later of the date such report
has been filed with the Internal Revenue Service or the date the copy is
requested.
(d) Promptly upon the occurrence thereof, the Company will give you and
each other Institutional Holder written notice of (i) a reportable event with
respect to any Plan; (ii) the institution of any steps by the Company, any
Subsidiary, any ERISA affiliate, the PBGC or any other person to terminate any
Plan; (iii) the institution of any steps by the Company, any Subsidiary, or any
ERISA affiliate to withdraw from any Plan; (iv) a prohibited transaction in
connection with any Plan; (v) any material increase in the contingent liability
of the Company or any Subsidiary with respect to any post-retirement welfare
liability; or (vi) the taking of any action by the Internal Revenue Service, the
Department of Labor or the PBGC with respect to any of the foregoing which, in
any of the events specified above, would result in any material liability of the
Company or any of its Subsidiaries.
6.9 Compliance with Laws. The Company will comply, and will cause each
Subsidiary to comply, with all laws, rules and regulations relating to its or
their respective businesses, other than laws, rules and regulations the failure
to comply with which or the sanctions and penalties resulting therefrom,
individually or in the aggregate, would not have a material adverse effect on
the business, property, operations, or condition, financial or otherwise, of the
Company or such Subsidiary, and would not result in the creation of a Lien
which, if incurred in the ordinary course of business, would not be permitted by
Section 7.5 on any of the property of the Company or any Subsidiary; provided,
however, that the Company and its Subsidiaries shall not be required to comply
with laws, rules and regulations the validity or applicability of which are
being contested in good faith and by appropriate proceedings; provided that the
failure to comply with such laws, rules or regulations would not have a material
adverse effect on the business, properties, operations, assets or condition,
financial or otherwise, of the Company and its Subsidiaries taken as a whole.
6.10 Acquisition of Notes. The Company will forthwith cancel any Notes
in any manner or at any time acquired by the Company or any Subsidiary or
Affiliate and such Notes shall not be deemed to be outstanding for any of the
purposes of this Agreement or the Notes.
6.11 Private Placement Number. The Company consents to the filing of
copies of this Agreement with Standard & Poor's Ratings Group and the National
Association of Insurance Commissioners to obtain a private placement number.
20
6.12 NAIC Filings. The Company shall, on the date it provides its
audited financial statements to the Noteholders pursuant to Section 6.6(b),
simultaneously provide such statements to the National Association of Insurance
Commissioners, Securities Valuation Office, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
6.13. Company's Restricted Subsidiary Status. The Company shall at all
times own 100% of the Voting Stock of THC Systems, Inc.
6.14. Bank Agreement. The Company shall promptly notify the holders of
the Notes of any amendment to or other modification of or replacement of the
Bank Agreement and shall promptly provide copies to the Noteholders of such
amendment or modification or replacement documentation.
6.15. Subsidiary Guarantees. In the event that the Company or any
Restricted Subsidiary acquires a Person which complies with the definition
herein of a Restricted Subsidiary Guarantor, the Company shall, within twenty
(20) days following such acquisition, provide the Noteholders with a Subsidiary
Guarantee from such new Restricted Subsidiary Guarantor.
'SS'7. NEGATIVE COVENANTS
The Company agrees that, for so long as any amount remains unpaid on
any Note:
7.1 Consolidated Net Worth. As of the last day of any Fiscal Quarter,
the Company will not permit Consolidated Net Worth of the Company and its
Restricted Subsidiaries to be less than the sum of (i) $125,000,000, plus (ii)
50% of the Consolidated Net Income of the Company and its Restricted
Subsidiaries (which for the purposes of this covenant shall not be reduced by
losses) for the Fiscal Year ending January 27, 2001 and for each Fiscal Year
thereafter.
7.2 Leverage Ratio. The Company will not permit the Consolidated
Leverage Ratio of the Company and its Restricted Subsidiaries to be greater than
(i) 3.0 to 1.0 as of the last day of the Fiscal Quarter ending April 29, 2000,
(ii) 3.25 to 1.0 as of the last day of the Fiscal Quarters ending July 29, 2000
and October 28, 2000, and (iii) 3.0 to 1.0 as of the last day of each succeeding
Fiscal Quarter.
7.3 Priority Indebtedness of Restricted Subsidiaries. The Company will
not permit any Restricted Subsidiary to permit to exist, create, assume, incur,
guarantee or otherwise be or become liable, directly or indirectly, in respect
of any Priority Indebtedness, (a) except the 1996 Notes and (b) except
additional Priority Indebtedness (excluding fifty percent (50%) of the then
outstanding principal amount of all tax-exempt Indebtedness of Restricted
Subsidiaries issued at or prior to January 26, 1991) which, after giving effect
thereto and the application of proceeds thereof, does not result in aggregate
outstanding Indebtedness (including the 1996 Notes) incurred by Restricted
Subsidiaries, when added to aggregate Indebtedness incurred (without
duplication) pursuant to Section 7.5(f), exceeding 20% of Consolidated Net
Worth.
7.4 Consolidated Interest Coverage Ratio. For a period of four
consecutive Fiscal Quarters ending with its most recent Fiscal Quarter, the
Company will not permit the Consolidated Interest Coverage Ratio of the Company
and its Restricted Subsidiaries to be less than 3.0 to 1.0.
7.5 Liens. Neither the Company nor any Restricted Subsidiary will cause
or permit or hereafter agree or consent to cause or permit in the future (upon
the happening of a contingency or otherwise), any of its Property, whether now
owned or subsequently acquired, to be subject to a Lien except:
(a) Liens securing the payment of taxes, assessments or governmental
charges or levies or the demands of suppliers, mechanics, repairmen, workmen,
materialmen, carriers, warehousers, landlords and other like Persons, or similar
statutory Liens, provided that (i) such Liens do not in the aggregate materially
reduce the value of any Properties subject to the Liens or materially interfere
with their use in the ordinary conduct of the Company's or any Restricted
Subsidiaries business, (ii) all claims which such Liens secure are not
delinquent or are
21
being actively contested in good faith and by appropriate proceedings and (iii)
adequate reserves have been established therefor on the books of the Company;
(b) Liens incurred or deposits made in the ordinary course of business
(i) in connection with worker's compensation, unemployment insurance, social
security and other like laws, or (ii) to secure the performance of letters of
credit, bids, tenders, sales contracts, leases, statutory obligations, surety,
appeal and performance bonds and other similar obligations, in each case not
incurred in connection with the borrowing of money, the obtaining of advances or
the payment of the deferred purchase price of Property otherwise than permitted
by paragraph (f) below;
(c) Attachment, judgment and other similar Liens arising in connection
with court proceedings, provided that (i) execution and other enforcement are
effectively stayed, (ii) all claims which the Liens secure are being actively
contested in good faith and by appropriate proceedings and (iii) adequate
reserves have been established therefor on the books of the Company, if required
by GAAP;
(d) Liens on Property of a Restricted Subsidiary, provided that such
Liens secure only obligations owing between the Company and any Restricted
Subsidiary Guarantor or between Majority-Owned Restricted Subsidiary Guarantors;
(e) Liens existing as of January 30, 1992, which Liens are set forth in
Annex III hereto;
(f) Other Liens solely on real estate, plant equipment and supplies not
otherwise permitted under subparagraphs (a) through (e) above securing
Indebtedness; provided that the Indebtedness secured by such Liens does not
exceed the lesser of the cost or fair market value of the Property; and
provided, further, that the aggregate amount of such Indebtedness secured by
Liens permitted by this subparagraph (f), when added to the aggregate amount of
other Indebtedness of Restricted Subsidiaries incurred (without duplication)
pursuant to Section 7.3 (but excluding Subsidiary Guarantees), does not exceed
twenty percent (20%) of Consolidated Net Worth;
(g) Liens resulting from extension, refunding, renewal or replacement
of the Indebtedness secured by Liens described in subparagraphs (d), (e) and (f)
above, up to the amount outstanding under such Indebtedness at the time of such
extension, refunding, renewal or replacement; provided that any new Lien
attaches only to the same Property theretofore subject to such earlier Lien; and
(h) In the event that the Company or any Restricted Subsidiary creates,
assumes, incurs or permits to exist any Lien not otherwise permitted by this
Section 7.5, the Company will make or cause to be made provision whereby the
Notes will be secured equally and ratably with all other obligations secured by
such Liens, and in any case the Notes shall have the benefit, to the full extent
that, and with such priority as, the holders may be entitled thereto under
applicable law, of an equitable Lien on such Property securing the Notes. Any
violation of this Section 7.5 shall constitute an Event of Default whether or
not any such provision is made for equal and ratable security pursuant to this
subparagraph (h).
7.6 Long-Term Leases. The Company will not, and will not permit any
Restricted Subsidiary to, become obligated, as lessee under any Long-Term Lease
unless, at the time of entering into such Long-Term Lease and after giving
effect thereto, the average aggregate annual Rentals payable by the Company and
its Restricted Subsidiaries on a consolidated basis during the term of such
Long-Term Lease pursuant to Long-Term Leases will not exceed 10% of Consolidated
Net Worth, determined as of the end of the Company's prior fiscal quarter.
7.7 Merger or Consolidation. The Company will not, and will not permit
any Restricted Subsidiary to, merge or consolidate with any other Person, except
that:
(a) The Company may consolidate with or merge into any Person or permit
any other Person to merge into it, provided that immediately after giving effect
thereto,
(i) The Company is the successor corporation or, if the
Company is not the successor corporation, the successor corporation is a
corporation organized under the laws of a state of the United
22
States of America or the District of Columbia and shall expressly assume
in writing the Company's obligations under the Notes and this Agreement;
(ii) There shall exist no Event of Default or event which,
with the passage of time or giving of notice, or both, would constitute
an Event of Default; and
(iii) The Company or such successor corporation could incur at
least $1.00 of additional debt pursuant to the Consolidated Leverage
Ratio of Section 7.2 hereof as of the most recently reported Fiscal
Quarter;
(b) Any Restricted Subsidiary (except THC Systems, Inc.) may (i) merge
into the Company or another Majority-Owned Restricted Subsidiary Guarantor or
(ii) sell, transfer or lease all or any part of its assets to the Company or to
another Majority-Owned Restricted Subsidiary Guarantor or (iii) merge into any
Person which, as a result of such merger, concurrently becomes a Restricted
Subsidiary, provided in each such instance that there shall exist no Event of
Default or event which, with the passage of time or giving of notice, or both,
would constitute an Event of Default; and
(c) THC Systems, Inc. may merge into the Company.
7.8 Sale of Assets. During any fiscal year, the Company will not, and
will not permit any Restricted Subsidiary to, sell, lease, transfer or otherwise
dispose of any assets, in one or a series of transactions, other than in the
ordinary course of business, to any Person, other than the Company or, in the
case of the THC Systems, Inc., to a Wholly-Owned Restricted Subsidiary Guarantor
or, in the case of all other Restricted Subsidiaries, to a Majority-Owned
Restricted Subsidiary Guarantor (collectively a "Disposition"), if after giving
effect to such Disposition, the aggregate book value of all Dispositions made
during such fiscal year would exceed ten percent (10%) of Consolidated Tangible
Assets as of the end of the immediately preceding fiscal year. Notwithstanding
the foregoing, the Company may make a Disposition in excess of the aforesaid
percentage if the Company shall, within 180 days after such Disposition, (a) use
pro rata the net proceeds from the sale of such assets exceeding ten percent
(10%) to invest in other tangible Property and of at least equivalent value for
use in the business of the Company and its Restricted Subsidiaries or (b) with
respect to the net proceeds from Dispositions exceeding ten percent (10%), use
such net proceeds to prepay the Notes on a pro rata basis among all the
Noteholders (subject to the right, to which the Company agrees, of any
Noteholders to elect not to be so prepaid), subject to the prepayment
requirements of Section 2.2(a) and at the price set forth in Section 2.2(b).
7.9 Change in Business. Neither the Company nor any Restricted
Subsidiary (whether now existing or hereafter acquired or organized) will engage
in any business if, giving effect thereto, less than 80% of the Consolidated
Tangible Assets of the Company at the most recently ended fiscal quarter would
be attributable to the current business of the Company and its Restricted
Subsidiaries taken as a whole, including, but not limited to, the manufacturing,
advertising, sales, distribution, of industrial wire, household and foodservice
products and related businesses.
7.10 Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary to, enter into any transaction (including the furnishing
of goods or services) with an Affiliate except in the ordinary course of
business as presently conducted and on terms and conditions no less favorable to
the Company or such Subsidiary than would be obtained in a comparable
arm's-length transaction with a Person not an Affiliate.
7.11 Consolidated Tax Returns. The Company will not file, or consent to
the filing of, any consolidated Federal income tax return with any Person other
than a Restricted Subsidiary, except to the extent that the Company is required
under the Code to do otherwise.
7.12 Pari Passu Position. The Company agrees that it will not grant or
provide, and at no time will it allow to exist, be created or granted, any Liens
or security interests in favor of, or Guarantees by Restricted Subsidiaries for
the benefit of, any of the Banks, unless in the case of the giving of any
guaranty by Restricted Subsidiaries, the Noteholders shall simultaneously be
provided with a Subsidiary Guarantee.
23
7.13 Sharing Agreement. The Company shall not permit any Restricted
Subsidiary to incur Priority Indebtedness or to issue a Restricted Subsidiary
Guarantee without requiring that the lender of such Indebtedness or beneficiary
of such Restricted Subsidiary Guarantee execute the Sharing Agreement at the
time of such incurrence of Indebtedness.
'SS'8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events. An "Event of Default" shall exist if any one or
more of the following occurs:
(a) Default in the payment of interest on any of the Notes which
continues for a period of three (3) days following the date such payment is due;
(b) Default in the payment of the principal of any of the Notes or the
premium thereon, if any, at maturity, upon acceleration of maturity or at any
date fixed for prepayment;
(c) Default shall occur (i) in the payment of the principal of,
premium, or interest on any other Indebtedness of the Company or its
Subsidiaries, aggregating in excess of $1,000,000 as and when due and payable
(whether by lapse of time, declaration, call for redemption or otherwise), (ii)
under any mortgage, agreement or other instrument of the Company or any
Subsidiary securing such Indebtedness or under or pursuant to which such
Indebtedness aggregating in excess of $1,000,000 is issued, (iii) under any
leases other than Capital Lease Obligations of the Company or any Subsidiary,
with aggregate Capital Lease Obligations in excess of $1,000,000 or (iv) with
respect to any combination of the foregoing involving Indebtedness and/or
Capital Lease Obligations aggregating in excess of $1,000,000 regardless of
whether such defaults would be Events of Default hereunder, and any such
defaults with respect to the payment of money shall continue, unless waived,
beyond the period of grace, if any, allowed with respect thereto;
(d) Default in the observance or performance of Sections 6.13, 6.15,
7.1, 7.2, 7.3, 7.4, 7.6, 7.7, 7.8, 7.12 or 7.13;
(e) Default in the observance or performance of any other covenant or
provision of this Agreement which default is not remedied within 30 days after
the earlier of the date (a) management of the Company knew of such default or
(b) on which written notice of such default is provided to the Company by any
Noteholder;
(f) Any representation or warranty made by the Company in this
Agreement, or made by the Company in any written statement or certificate
furnished by the Company in connection with the issuance and sale of the Notes
or furnished by the Company pursuant to this Agreement or furnished by any
Subsidiary Guarantor pursuant to any Subsidiary Guarantee, proves incorrect in
any material respect as of the date of the issuance or making thereof;
(g) Any judgments, writs or warrants of attachment or any similar
processes individually or in the aggregate in excess of $1,500,000 shall be
entered or filed against the Company or any Subsidiary or against any property
or assets of either and remain unpaid, unvacated, unbonded or unstayed (through
appeal or otherwise) for a period of 60 days after the Company or any Subsidiary
receives notice thereof;
(h) The Company or any Subsidiary shall incur a "Distress Termination"
(as defined in Title IV of ERISA) of any Plan or any trust created thereunder
which results in material liability to the PBGC, the PBGC shall institute
proceedings to terminate any Plan or any trust created thereunder, or a trustee
shall be appointed by a United States District Court pursuant to Section 4042(b)
of ERISA to administer any Plan or any trust created thereunder;
(i) (A) Any Subsidiary Guarantor shall be in default of or fail to
comply with any term, covenant, or agreement contained in any Subsidiary
Guarantee or the Subordination Agreement or (B) any Subsidiary Guarantee or the
Subordination Agreement shall cease to be in full force and effect; or
(j) The Company or any Subsidiary shall
24
(i) generally not pay its debts as they become due or admit in
writing its inability to pay its debts generally as they become due;
(ii) file a petition in bankruptcy or for reorganization or
for the adoption of an arrangement under the Federal Bankruptcy Code, or
any similar applicable bankruptcy or insolvency law, as now or in the
future amended (herein collectively called "Bankruptcy Laws"), or an
answer or other pleading admitting or failing to deny the material
allegations of such a petition or seeking, consenting to or acquiescing
in relief provided for under the Bankruptcy Laws;
(iii) make an assignment of all or a substantial part of its
property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment of a
receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its property;
(v) be finally adjudicated a bankrupt or insolvent;
(vi) be subject to the entry of a court order, which shall not
be vacated, set aside or stayed within 30 days from the date of entry,
appointing a receiver, liquidator, custodian or trustee of it or for all
or a substantial part of its property, or entering of an order for
relief pursuant to an involuntary case, or effecting an arrangement in,
bankruptcy or for a reorganization pursuant to the Bankruptcy Laws or
for any other judicial modification or alteration of the rights of
creditors; or
(vii) be subject to the assumption of custody or sequestration
by a court of competent jurisdiction of all or a substantial part of its
property, which custody or sequestration shall not be suspended or
terminated within 30 days from its inception.
8.2 Remedies on Default. When any Event of Default described in
paragraphs (a) through (i) of Section 8.1 has happened and is continuing, the
holder or holders of at least 25% in principal amount of the Notes then
outstanding may by notice to the Company declare the entire principal, together
with the premium set forth below, and all interest accrued on all Notes to be,
and such Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
expressly waived. Notwithstanding the foregoing, when (i) any Event of Default
described in paragraphs (a) or (b) of Section 8.1 has happened and is
continuing, any holder may by notice to the Company declare the entire
principal, together with the premium set forth below, and all interest accrued
on the Notes then held by such holder to be, and such Notes shall thereupon
become, forthwith due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are expressly waived and (ii) where any
Event of Default described in paragraph (j) of Section 8.1 has happened, then
all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon the Notes or any of them
becoming due and payable as aforesaid, the Company will forthwith pay to the
holders of such Notes the entire principal of and interest accrued on such
Notes, plus a premium in the event that the Reinvestment Yield shall, on the
Determination Date, be less than the interest rate payable on or in respect of
the Notes. Such premium shall equal (x) the aggregate present value of the
principal so accelerated and the aggregate present value of the interest which
would have been payable in respect of such principal absent such accelerated
payment, determined by discounting (semi-annually on the basis of a 360-day year
composed of twelve 30-day months) each such amount utilizing an interest factor
equal to the Reinvestment Yield, less (y) the principal amount to be
accelerated.
8.3 Annulment of Acceleration of Notes. The provisions of Section 8.2
are subject to the condition that if the principal of and accrued interest on
the Notes have been declared immediately due and payable by reason of the
occurrence of any Event of Default described in paragraphs (a) through (h),
inclusive, of Section 8.1, the holder or holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument
furnished to the Company, rescind and annul such declaration and the
consequences thereof, provided that (i) at the time such declaration is annulled
and rescinded no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement, (ii) all arrears of interest
upon all the Notes
25
and all other sums payable under the Notes and under this Agreement (except any
principal, interest or premium on the Notes which has become due and payable
solely by reason of such declaration under Section 8.2) and under the Subsidiary
Guarantees shall have been duly paid and (iii) each and every other Event of
Default shall have been cured or waived; and provided further, that no such
rescission and annulment shall extend to or affect any subsequent default or
Event of Default or impair any right consequent thereto.
8.4 Other Remedies. Subject to the provisions of Section 8.3, if any
Event of Default shall be continuing, any holder of Notes may enforce its rights
by suit in equity, by action at law, or by any other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Agreement, the Notes or the Subsidiary
Guarantees or in aid of the exercise of any power granted in this Agreement, and
may enforce the payment of any Note held by such holder and any of its other
legal or equitable rights.
8.5 Conduct No Waiver; Collection Expenses. No course of dealing on the
part of any holder of Notes, nor any delay or failure on the part of any holder
of Notes to exercise any of its rights, shall operate as a waiver of such rights
or otherwise prejudice such holder's rights, powers and remedies. If the Company
fails to pay, when due, the principal of, or the interest on, any Note, or fails
to comply with any other provision of this Agreement, the Company will pay to
each holder, to the extent permitted by law, on demand, such further amounts as
shall be sufficient to cover the reasonable cost and expenses, including but not
limited to reasonable attorneys' fees, incurred by such holders of the Notes in
collecting any sums due on the Notes or in otherwise enforcing any of their
rights.
8.6 Remedies Cumulative. No right or remedy conferred upon or reserved
to any holder of Notes under this Agreement or the Subsidiary Guarantees is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right or remedy given
under this Agreement or under the Subsidiary Guarantees or now or hereafter
existing under any applicable law. Every right and remedy given by this
Agreement or by applicable law to any holder of Notes may be exercised from time
to time and as often as may be deemed expedient by such holder, as the case may
be.
8.7 Notice of Default. With respect to Events of Default or claimed
defaults, the Company will give the following notices:
(a) The Company promptly will furnish to each holder of a Note notice
in writing by registered or certified mail, return receipt requested, of the
occurrence of an Event of Default or an event which, with the lapse of time or
the giving of notice, or both, would become an Event of Default. Such notice
shall specify the nature of such default, the period of existence thereof and
what action the Company has taken or is taking or proposes to take with respect
thereto.
(b) If the holder of any Note or of any other evidence of Indebtedness
of the Company or any Subsidiary gives any notice or takes any other action with
respect to a claimed default, the Company will forthwith give written notice to
the extent of the Company's knowledge thereof to each holder of the then
outstanding Notes, describing the notice or action and the nature of the claimed
default.
'SS'9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company shall have obtained
the consent in writing of the holder or holders of at least 66-2/3% in aggregate
principal amount of outstanding Notes; provided, however, that, without the
written consent of the holder or holders of all of the Notes then outstanding,
no such waiver, modification, alteration or amendment shall be effective which
will (i) change the time of payment (including any required prepayment) of the
principal of or the interest on any Note, (ii) reduce the principal amount
thereof or the premium, if any, or reduce the rate of interest thereon, (iii)
change any provision of any instrument affecting the preferences between holders
of the Notes or between holders of the Notes and other creditors of the Company,
or (iv) change any of the provisions of Section 8.1, Section 8.2, Section 8.3 or
this Section 9.
26
For the purpose of determining whether holders of the requisite
principal amount of Notes have made or concurred in any waiver, consent,
approval, notice or other communication under this Agreement, Notes held in the
name of, or owned beneficially by, the Company, any Subsidiary or any Affiliate
thereof, shall not be deemed outstanding.
9.2 Solicitation of Holders of Notes. The Company will not solicit,
request or negotiate for or with respect to any proposed waiver or amendment of
any of the provisions of this Agreement or the Notes unless each holder of the
Notes (irrespective of the amount of Notes then owned by it) shall concurrently
be informed thereof by the Company and shall be afforded the opportunity of
considering the same and shall be supplied by the Company with sufficient
information to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent effected pursuant
to the provisions of this Section 9 shall be delivered by the Company to each
holder of outstanding Notes forthwith following the date on which the same shall
have been executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any holder of the Notes as
consideration for or as an inducement to the entering into by any holder of the
Notes of any waiver or amendment of any of the terms and provisions of this
Agreement unless such remuneration is concurrently paid, on the same terms,
ratably to each holder of the then outstanding Notes.
9.3 Binding Effect. Any such amendment or waiver shall apply equally to
all the holders of the Notes and shall be binding upon them, upon each future
holder of any Note and upon the Company whether or not such Note shall have been
marked to indicate such amendment or waiver. No such amendment or waiver shall
extend to or affect any obligation not expressly amended or waived or impair any
right related thereto.
'SS'10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1 Form of Notes. The Notes initially delivered under this Agreement
will be in the form of five fully registered Notes in the form attached as
Exhibit A. The Notes are issuable only in fully registered form and in
denominations of at least $2,000,000 (or the remaining outstanding balance
thereof, if less than $2,000,000).
10.2 Note Register. The Company shall cause to be kept at its principal
office a register (the "Note Register") for the registration and transfer of the
Notes. The names and addresses of the holders of Notes, the transfer thereof and
the names and addresses of the transferees of the Notes shall be registered in
the Note Register. The Company may deem and treat the person in whose name a
Note is so registered as the holder and owner thereof for all purposes and shall
not be affected by any notice to the contrary, until due presentment of such
Note for registration of transfer as provided in this Section 10.
10.3 Issuance of New Notes upon Exchange or Transfer. Upon surrender
for exchange or registration of transfer of any Note at the office of the
Company designated for notices in accordance with Section 11.2, the Company
shall execute and deliver, at its expense, one or more new Notes of any
authorized denominations requested by the holder of the surrendered Note, each
dated the date to which interest has been paid on the Notes so surrendered (or,
if no interest has been paid, the date of such surrendered Note), but in the
same aggregate unpaid principal amount as such surrendered Note, and registered
in the name of such person or persons as shall be designated in writing by such
holder. Every Note surrendered for registration of transfer shall be duly
endorsed, or be accompanied by a written instrument of transfer duly executed,
by the holder of such Note or by his attorney duly authorized in writing. The
Company may condition its issuance of any new Note in connection with a transfer
by any Person on compliance by the transferee with the representations required
under Section 3.2, by Institutional Holders on compliance with Section 2.5 and
on the payment to the Company of a sum sufficient to cover any stamp tax or
other governmental charge imposed in respect of such transfer.
10.4 Replacement of Notes. Upon receipt of evidence satisfactory to the
Company of the loss, theft, mutilation or destruction of any Note, and in the
case of any such loss, theft or destruction upon delivery of a bond of indemnity
in such form and amount as shall be reasonably satisfactory to the Company or in
the event of such mutilation upon surrender and cancellation of the Note, the
Company, without charge to the holder thereof, will
27
make and deliver a new Note, of like tenor in lieu of such lost, stolen,
destroyed or mutilated Note. If any such lost, stolen or destroyed Note is owned
by you or any other Institutional Holder, then the affidavit of an authorized
officer of such owner setting forth the fact of loss, theft or destruction and
of its ownership of the Note at the time of such loss, theft or destruction
shall be accepted as satisfactory evidence thereof, and no further indemnity
shall be required as a condition to the execution and delivery of a new Note,
other than a written agreement of such owner (in form reasonably satisfactory to
the Company) to indemnify the Company.
'SS'11. MISCELLANEOUS
11.1 Expenses. Whether or not the purchase of Notes herein contemplated
shall be consummated, the Company agrees to pay directly all reasonable expenses
in connection with the preparation, execution and delivery of this Agreement and
the transactions contemplated by this Agreement, including, but not limited to,
out-of-pocket expenses, filing fees of Standard & Poor's Ratings Group in
connection with obtaining a private placement number, charges and disbursements
of special counsel, photocopying and printing costs and charges for shipping the
Notes, adequately insured, to you at your home office or at such other address
as you may designate, and all similar expenses (including the reasonable fees
and expenses of counsel) relating to any amendments, waivers or consents in
connection with this Agreement or the Notes or the Subsidiary Guarantees or the
Subordination Agreement or the Sharing Agreement or any agreement entered into
by the Noteholders and the Company or any Subsidiary Guarantor, including, but
not limited to, any such amendments, waivers or consents resulting from any
work-out, renegotiation or restructuring relating to the performance by the
Company of its obligations under this Agreement and the Notes and the
performance by the Subsidiary Guarantors under the Subsidiary Guarantees and the
Subordination Agreement. The Company also agrees that it will pay and save you
harmless against any and all liability with respect to stamp and other
documentary taxes, if any, which may be payable, or which may be determined to
be payable in connection with the execution and delivery of this Agreement or
the Notes (but not in connection with a transfer of any Notes), whether or not
any Notes are then outstanding. The obligations of the Company under this
Section 11.1 shall survive the retirement of the Notes.
11.2 Notices. Except as otherwise expressly provided herein, all
communications provided for in this Agreement shall be in writing and delivered
or sent by registered or certified mail, return receipt requested, or by
overnight courier (i) if to you, to the address set forth below your name in
Schedule I, or to such other address as you may in writing designate, (ii) if to
any other holder of the Notes, to such address as the holder may designate in
writing to the Company, and (iii) if to the Company, to Oneida Ltd., Xxxxxxx
Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx, Senior Vice
President-Finance, or to such other address as the Company may in writing
designate.
11.3 Reproduction of Documents. This Agreement and all documents
relating hereto, including, without limitation, (i) consents, waivers and
modifications which may hereafter be executed, (ii) documents received by you at
the closing of the purchase of the Notes (except the Notes themselves), and
(iii) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process, and you may destroy any original document so reproduced. The Company
agrees and stipulates that any such reproduction which is legible shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence; provided that nothing herein contained shall
preclude the Company from objecting to the admission of any reproduction on the
basis that such reproduction is not accurate, has been altered or is otherwise
incomplete.
11.4 Successors and Assigns. This Agreement will inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns.
11.5 Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of Illinois. No provision of this
Agreement may be waived, changed or modified, or the discharge thereof
acknowledged, orally, except by an agreement in writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge is
sought.
28
11.6 Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
11.7 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart or reproduction thereof permitted by Section
11.3.
11.8 Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant to this Agreement, whether or not in connection
with a closing, (i) shall be deemed to have been relied upon by you,
notwithstanding any investigation heretofore or hereafter made by you or on your
behalf and (ii) shall survive the delivery of this Agreement and the Notes.
11.9 Integration and Severability. This Agreement embodies the entire
agreement and understanding between you and the Company, and supersedes all
prior agreements and understandings relating to the subject matter hereof. In
case any one or more of the provisions contained in this Agreement or in any
Note, or application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained in this Agreement and in any Note, and any other application thereof,
shall not in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.
ONEIDA LTD.
By: /s/ XXXXXX X. XXXXX
-------------------------------
Title: Senior Vice President - Finance
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXXX X. XXXXX
-------------------------------
By: /s/ XXXXXX XXXX
-------------------------------
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
-------------------------------
Title: Assistant Vice President
By: /s/ XXXXX X. XXXXX
-------------------------------
Title: Assistant Secretary
29
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
------------------------------------------------------------------------------------------------
Allstate Life Insurance Company $10,000,000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Investment Department -
Private Placement Division J2A
Address for all communications is as above. All payments are to be by
bank wire transfer of immediately available funds to:
Xxxxxx Trust and Savings Bank
ABA No. 0000-0000-0
Xxxxxxx, XX 00000
Attn: Trust Collection Dept. 5C
Custody Account #23-80522
PPN: 682505 B# 8
Each wire transfer shall identify such payment as "Oneida
Ltd., 8.52% Senior Notes due January 15, 2002."
Tax ID #00-0000000
30
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
-------------------------------------------------------------------------------------------------
Allstate Life Insurance Company $5,000,000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Investment Department -
Private Placement Division J2A
Address for all communications is as above. All payments are to be by
bank wire transfer of immediately available funds to:
Xxxxxx Trust and Savings Bank
ABA No. 0000-0000-0
Xxxxxxx, XX 00000
Attn: Trust Collection Dept. 5C
Custody Account #23-83531
PPN: 682505 B# 8
Each wire transfer shall identify such payment as "Oneida
Ltd., 8.52% Senior Notes due January 15, 2002."
Tax ID #00-0000000
31
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
------------------------------------------------------------------------------------------------
Allstate Life Insurance Company $5,000,000
Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Investment Department -
Private Placement Division J2A
Address for all communications is as above. All payments are to be by
bank wire transfer of immediately available funds to:
Xxxxxx Trust and Savings Bank
ABA No. 0000-0000-0
Xxxxxxx, XX 00000
Attn: Trust Collection Dept. 5C
Custody Account #23-80524
PPN: 682505 B# 8
Each wire transfer shall identify such payment as "Oneida
Ltd., 8.52% Senior Notes due January 15, 2002."
Tax ID #00-0000000
32
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
------------------------------------------------------------------------------------------------
Pacific Life Insurance Company $5,000,000
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Securities Department
Address for all communications is as above, except notices of payment
and written confirmations of wire or inter-bank transfers. All payments
are to be by bank wire transfer of immediately available funds to:
For Payment of Principal & Interest:
Federal Reserve Bank of Boston
ABA# 0000-0000-0/BOS SAFE DEP
DDA 125261
Attn: MBS Income CC: 1253
A/C Name: Pacific Life General Account/PLCF1810132
Each wire transfer shall identify such payment as "Oneida
Ltd., 8.52% Senior Notes due January 15, 2002."
Notices of payment and written confirmations of wire or inter-bank
transfers shall be addressed to:
Mellon Trust
Attn: Pacific Life Accounting Team
Xxx Xxxxxx Xxxx Xxxxxx
Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
And
Pacific Life Insurance Company
Attn: Securities Administration - Cash Team
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
All securities being purchased should be registered in the nominee name
of "Mac & Co." and delivered to:
Mellon Securities Trust Company
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx 212.374.1918
A/C Name: Pacific Life General Acct
A/C#: PLCF1810132
Tax ID #00-0000000
33
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
------------------------------------------------------------------------------------------------
Pacific Life Insurance Company $5,000,000
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Fixed Income Securities Dept.
Address for all communications is as above, except notices of payment
and written confirmations of wire or inter-bank transfers. All payments
are to be by bank wire transfer of immediately available funds to:
For Payment of Principal & Interest:
Federal Reserve Bank of Boston
ABA# 0000-0000-0/BOS SAFE DEP
DDA 125261
Attn: MBS Income CC: 1253
A/C Name: Pacific Life General Account/PLCF1810132
Each wire transfer shall identify such payment as "Oneida
Ltd., 8.52% Senior Notes due January 15, 2002."
Notices of payment and written confirmations of wire or inter-bank
transfers shall be addressed to:
Mellon Trust
Attn: Pacific Life Accounting Team
Xxx Xxxxxx Xxxx Xxxxxx
Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
And
Pacific Life Insurance Company
Attn: Securities Administration - Cash Team
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
All securities being purchased should be registered in the nominee name
of "EBENCO" and delivered to:
Mellon Securities Trust Company
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx 212.374.1918
A/C Name: Pacific Life General Acct
A/C#: PLCF1810132
Tax ID #00-0000000
34
EXHIBIT A
ONEIDA LTD.
8.52% SENIOR NOTE
Due January 15, 2002
--------------------
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT AND
ACCORDINGLY ANY PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE UNPAID PRINCIPAL
AMOUNT WITH THE COMPANY.
--------------------
Registered Note No. R-____ January __, 1992
$__________
ONEIDA LTD., a New York corporation (the "Company), for value received,
hereby promises to pay to ______________________ or registered assigns, on the
fifteenth day of January, 2002, the principal amount of _______________ Dollars
($__________) and to pay interest (computed on the basis of a 360-day year of
twelve 30-day months) on the principal amount from time to time remaining unpaid
hereon at the rate of eight and fifty-two hundredths percent (8.52%) per annum
from the date hereof until maturity, payable on the fifteenth day of July and
January in each year, commencing July 15, 1992, and at maturity, and to pay
interest on overdue principal, premium and (to the extent legally enforceable)
on any overdue installment of interest at the greater of (a) the rate of
interest publicly announced by The Chase Manhattan Bank (or its successors or
assigns) as its Prime Rate plus one percent (1%) or (b) ten and fifty-two
hundredths percent (10.52%) per annum after maturity or the due date thereof,
whether by acceleration or otherwise, until paid. Payments of the principal of,
the premium, if any, and interest on this Note shall be made in lawful money of
the United States of America in the manner and at the place provided in Section
2.5 of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and provisions of a
Note Agreement, dated as of January 1, 1992, entered into by the Company with
the Purchasers named in Schedule I thereto (the "Note Agreement"), and this Note
and any holder hereof are entitled to all of the benefits and are bound by the
terms provided for by such Note Agreement or referred to therein. The provisions
of the Note Agreement are incorporated in this Note to the same extent as if set
forth at length herein.
As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or his attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of the
taxes or other governmental charges, if any, that may be imposed in connection
therewith. The Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required to
be made hereon all in the events, on the terms and in the manner as provided in
the Note Agreement. Such prepayments include certain required prepayments on
January 15 of each year beginning January 15, 1996 and ending January 15, 2001
and certain optional prepayments with a premium.
35
Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition to
the principal, premium, if any, and interest due and payable hereon, all
reasonable costs of collecting this Note, including reasonable attorneys' fees
and expenses.
This Note and the Note Agreement are governed by and construed in
accordance with the laws of the State of Illinois.
ONEIDA LTD.
By:___________________________________
Its:
36
EXHIBIT B
LEGAL OPINIONS
A. The opinion of Xxxxxxx, Carton & Xxxxxxx, special counsel for the
Purchasers, shall be to the effect that:
1. The Company is a corporation organized and validly existing in good
standing under the laws of the State of New York, with all requisite corporate
power and authority to carry on its business as now conducted, to enter into and
perform the Agreement and to issue and sell the Notes.
2. The Agreement has been duly authorized by proper corporate action on
the part of the Company, has been duly executed and delivered by an authorized
officer of the Company and constitutes the legal, valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the extent that
enforcement of the Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
3. The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed and delivered by an authorized
officer of the Company and constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
4. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes do not require the registration of the
Notes under the Securities Act of 1933, as amended, nor the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
5. The issuance and sale of the Notes and compliance with the terms and
provisions of the Notes and the Agreement will not conflict with or result in
any breach of any of the provisions of the Certificate of Incorporation or
By-Laws of the Company.
The opinion of Xxxxxxx, Carton & Xxxxxxx also shall state that the opinion of
Shearman & Sterling, counsel for the Company, delivered to you pursuant to the
Agreement, is satisfactory in form and scope to Xxxxxxx, Carton & Xxxxxxx, and,
in their opinion, the Purchasers and it are justified in relying thereon and
shall cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request. Xxxxxxx, Carton & Xxxxxxx may rely, as to
matters of New York law, on the opinion of Shearman & Sterling.
B. The opinion of Shearman & Sterling, counsel for the Company, shall
cover all matters specified in clauses 1 through 6 set forth above and also
shall be to the effect that:
1. The Company has full corporate power and authority to conduct the
activities in which it is now engaged and own its property.
2. Each Subsidiary of the Company is a corporation duly organized and
validly existing in good standing under the laws of its jurisdiction of
incorporation, and each has all requisite corporate power and authority to carry
on its business as now conducted and own its property.
3. Each of the Company and its Subsidiaries is duly qualified or
licensed and in good standing as a foreign corporation authorized to do business
in each jurisdiction where the nature of the business transacted by it or the
character of its properties owned or leased makes such qualification or
licensing necessary except where
37
failure to so qualify would not, individually or in the aggregate, have a
material adverse affect on its business, properties, or condition, financial or
otherwise.
4. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Company of the Agreement or the lawful offering, issuance
and sale of the Notes, and no designation, filing, declaration, registration
and/or qualification with any governmental authority is required by the Company
in connection with such offer, issuance and sale.
5. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Agreement will not conflict with, or result in
any breach or violation of any of the provisions of, or constitute a default
under, or result in the creation of any Lien on the property of the Company or
any Subsidiary pursuant to, (i) the provisions of the Certificate of
Incorporation or other charter document or by-laws of the Company or any
Subsidiary or any loan agreement under which the Company or any Subsidiary is
bound, or other agreement or instrument known to such counsel (after due
inquiry) to which the Company or any Subsidiary is a party or by which any of
them or their property is bound or (ii) any New York law (including usury laws)
or regulation, order, writ, injunction or decree of any court or governmental
authority applicable to the Company known to such counsel.
6. There are no actions, suits or proceedings pending or, to the best
of such counsel's knowledge after due inquiry, threatened against, or affecting
the Company or its Subsidiaries, at law or in equity or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which are likely to
result, either individually or in the aggregate, in any material adverse change
in the business, properties, operations or condition, financial or otherwise, of
the Company and its Subsidiaries taken as a whole.
7. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and, to the knowledge of such counsel, are owned by the Company free and clear
of any Lien.
8. The issuance of the Notes and the use of the proceeds of the sale of
the Notes do not violate or conflict with Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
9. Neither the Company nor any Subsidiary is: (i) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended,
or (ii) a "public utility" as defined in the Federal Power Act, as amended, or
(iii) an "investment company" or an "affiliated person" thereof or an
"affiliated person" of any such "affiliated person," as such terms are defined
in the Investment Company Act of 1940, as amended.
The opinion of Shearman & Sterling shall cover such other matters relating to
the sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company and with respect to matters governed by the laws of any jurisdiction
other than the United States of America and the State of New York, such counsel
may rely upon the opinions of counsel deemed (and stated in their opinion to be
deemed) by them to be competent and reliable.
38
================================================================================
EXHIBIT C
SHARING AGREEMENT
SHARING AGREEMENT dated as of June 2, 2000 among The Chase Manhattan
Bank, as Administrative Agent (the "Administrative Agent"), the financial
institutions that are parties to the Credit Agreement referred to below (each
such institution is referred to herein as a "Lender" and. Together with the
Adminstrative Agent, are collectively referred to herein as "Lenders") and
Allstate Life Insurance Company, Allstate Insurance Company and Pacific Mutual
Life Insurance Company (each institution is referred to herein either as a "1992
Noteholder" (as defined in Recital A below) or a "1996 Noteholder" (as defined
in Recital A below)) and the 1992 Noteholders and the 1996 Noteholders and the
Lenders are individually referred to herein as a "Creditor" and are collectively
referred to herein as the "Creditors").
RECITALS:
A. Under and pursuant to a Note Agreement dated as of November 15, 1996
(as such agreement may be modified, amended, renewed or replaced, the "1996 Note
Agreement"), between THC Systems, Inc., a New York corporation, Oneida Ltd., a
New York corporation (the "Parent"), and Allstate Life Insurance Company,
Allstate Insurance Company and Pacific Mutual Life Insurance Company (the "1996
Noteholders"), THC Systems, Inc. has issued and sold to the 1996 Noteholders
$35,000,000 aggregate principal amount of its 7.49% Senior Notes due November 1,
2008 (the "1996 Notes"). Under and pursuant to a Note Agreement dated as of
January 1, 1992 (as such agreement may be modified, amended, renewed or
replaced, the "1992 Note Agreement") between the Parent, Allstate Life Insurance
Company and Pacific Mutual Life Insurance Company (the "1992 Noteholders"), the
Parent has issued and sold to the 1992 Noteholders $30,000,000 principal amount
of its 8.52% Senior Notes due January 15, 2002 (the "1992 Notes") (the 1992 Note
Agreement and the 1996 Note Agreement being collectively referred to as the
"Note Agreements" and the 1992 Notes and the 1996 Notes being hereinafter
collectively referred to as the "Notes").
B. Under and pursuant to that certain Credit Agreement dated as of June
2, 2000 (as such agreement may be modified, amended, renewed or replaced,
including any increase in the amount thereof, the "Credit Agreement") among the
Parent and the Lenders, the Lenders have made available to the Parent certain
credit facilities in a current aggregate principal amount up to $285,000,000
(all amounts outstanding in respect of said credit facilities being hereinafter
collectively referred to as the "Loans").
C. In connection with the execution of the Bank Credit Agreement and as
support for the Loans made thereunder, THC Systems, Inc., Buffalo China, Inc.
and Encore Promotions, Inc., each of which are wholly-owned subsidiaries of the
Parent (together with any other subsidiaries of the Parent required from time to
time to execute and deliver a subsidiary guarantee pursuant to the provisions of
the 1992 Note Agreement, the 1996 Note Agreement or the Credit Agreement,
collectively, the "Subsidiary Guarantors") have guaranteed to the Lenders the
payment of the Loans and all other obligations of the Parent arising in
connection with the transactions contemplated by the Credit Agreement under
certain subsidiary guarantees (as such guarantees may be modified, amended,
renewed or replaced, including any increase in the amount thereof, and together
with any other subsidiary guarantee executed and delivered from time to time
pursuant to the provisions of the Credit Agreement, collectively, the "Lender
Guaranty").
D. The Subsidiary Guarantors have entered into subsidiary guarantees
dated as of various dates with respect to the 1992 Notes and the 1996 Notes (as
such subsidiary guarantees may be modified, amended, renewed or replaced and,
together with any other subsidiary guarantee executed and delivered from time to
time pursuant to the provisions of the Note Agreements, collectively, the
"Noteholder Guaranty") pursuant to which (a) Buffalo China, Inc. and Encore
Promotions, Inc. have guaranteed to the holders of the 1996 Notes the payment of
the principal of, premium, if any, and interest on the 1996 Notes and the
payment of all other obligations of THC Systems, Inc. arising in connection with
the transactions contemplated by the 1996 Note Agreement and (b) Buffalo China,
Inc., THC Systems, Inc. and Encore Promotions, Inc. have guaranteed to the
holders of the 1992 Notes the payment of the principal of, premium, if any, and
interest on the 1992 Notes and the payment of all other obligations of the
Parent
39
arising in connection with the transactions contemplated by the 1992 Note
Agreement. The Lender Guaranty and the Noteholder Guaranty are each hereinafter
referred to as a "Subsidiary Guarantee".
E. In consideration of the mutual benefit to be provided hereby and
intending to be legally bound, the Lenders and the Noteholders have agreed to
enter into this Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS.
The following terms shall have the meanings assigned to them below in
this 'SS'1 or in the provisions of this Agreement referred to below:
"Bankruptcy Proceeding" shall mean, with respect to any person, a
general assignment of such person for the benefit of its creditors, or the
institution by or against such person of any proceeding seeking relief as
debtor, or seeking to adjudicate such person as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of such person or
its debts, under any law relating to bankruptcy, insolvency, reorganization or
relief of debtors, or seeking appointment of a receiver, trustee, custodian or
other similar official for such person or for any substantial part of its
property.
"Credit Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"Creditor" shall have the meaning assigned thereto in the introductory
paragraph hereto.
"Excess Sharing Payment" shall mean as to any Creditor an amount equal
to the Sharing Payment received by such Creditor less the Pro Rata Share of
Sharing Payments to which such Creditor is then entitled.
"Lender" shall have the meaning assigned thereto in the introductory
paragraph hereto.
"Lender Guaranty" shall have the meaning assigned thereto in the
Recitals hereof.
"Loans" shall have the meaning assigned thereto in the Recitals hereof.
"1992 Notes" shall have the meaning assigned thereto in the Recitals
hereof.
"1992 Note Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"1996 Notes" shall have the meaning assigned thereto in the Recitals
hereof.
"1996 Note Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"Noteholder" shall have the meaning assigned thereto in the
introductory paragraph hereto.
"Noteholder Guaranty" shall have the meaning assigned thereto in the
Recitals hereof.
"Notes" shall have the meaning assigned thereto in the Recitals hereof.
"Parent" shall have the meaning assigned thereto in the Recitals
hereof.
"Pro Rata Share of Sharing Payments" shall mean as of the date of any
Sharing Payment to a Creditor an amount equal to the product obtained by
multiplying (x) the amount of all Sharing Payments made to all Creditors
concurrently with the payments to such Creditors in connection with the
collection of such Sharing Payments by (y) fraction, the numerator of which
shall be the Specified Amount owing to such Creditor, and the denominator of
40
which is the aggregate amount of all outstanding Subject Obligations (without
giving effect in the denominator to the application of any such Sharing
Payments).
"Receiving Creditor" shall have the meaning assigned thereto in Section
2.
"Sharing Payment" shall have the meaning assigned thereto in Section 2.
"Specified Amount" shall mean as to any Creditor the aggregate amount
of the Subject Obligations owed to such Creditor.
"Subject Obligations" shall mean all principal of, premium, if any, and
interest on, the Notes and the Loans and all other obligations of THC Systems,
Inc. or the Parent under or in respect of the Notes and the Loans and under the
Note Agreements and the Credit Agreement; provided that any amount of such
Subject Obligations which is not allowed as a claim enforceable against the
Parent or THC Systems, Inc. in a Bankruptcy Proceeding under applicable law
shall be excluded from the computation of "Subject Obligations" hereunder.
"Subsidiary Guarantors" shall have the meaning assigned thereto in the
Recitals hereof.
"Subsidiary Guarantee" shall have the meaning assigned thereto in the
Recitals hereof.
Section 2. SHARING OF RECOVERIES.
Each Creditor hereby agrees with each other Creditor that (a) payments
made pursuant to terms of a Subsidiary Guarantee or (b) payments (other than
regularly scheduled payments of principal and interest) made with respect to the
1996 Notes by THC Systems, Inc. (collectively, "Sharing Payments" or
individually, a "Sharing Payment") (x) within 90 days prior to the commencement
of a Bankruptcy Proceeding or at any time thereafter with respect to any
Subsidiary Guarantor or THC Systems, Inc. (with respect to the 1996 Note
Agreement) or the Parent or (y) following the acceleration of the 1992 Notes or
the 1996 Notes or the Loans, shall be shared so that each Creditor shall receive
its Pro Rata Share of Sharing Payments. Accordingly, each Creditor hereby agrees
that in the event (a) an event described in clauses (x) or (y) above shall have
occurred, (b) any Creditor shall receive a Sharing Payment (a "Receiving
Creditor"), and (c) any other Creditor shall not concurrently receive its Pro
Rata Share of Sharing Payments from the same Subsidiary Guarantor or THC
Systems, Inc. in connection with Sharing Payments made pursuant to clause (b)
above, then the Receiving Creditor shall promptly remit the Excess Sharing
Payment to each other Creditor who shall then be entitled thereto so that after
giving effect to such payment (and any other payments then being made by any
other Receiving Creditor pursuant to this Section 2) each Creditor shall have
received its Pro Rata Share of Sharing Payments.
Any such payments shall be deemed to be and shall be made in
consideration of the purchase for cash at face value, but without recourse,
ratably from the other Creditors of such amount of the 1992 Notes or the 1996
Notes or Loans (or interest therein), as the case may be, to the extent
necessary to cause such Creditor to share such Excess Sharing Payment with the
other Creditors as hereinabove provided; provided, however, that if any such
purchase or payment is made by any Receiving Creditor and if such Excess Sharing
Payment or part thereof is thereafter recovered from such Receiving Creditor by
any Subsidiary Guarantor or by THC Systems, Inc. in connection with Sharing
Payments made pursuant to clause (b) of the preceding paragraph (including,
without limitation, by any trustee in bankruptcy of any Subsidiary Guarantor or
any creditor thereof), the related purchase from the other Creditors shall be
rescinded ratably and the purchase price restored as to the portion of such
Excess Sharing Payment so recovered, but without interest; and provided further
nothing herein contained shall obligate any Creditor to resort to any setoff,
application of deposit balance or other means of payment or avail itself of any
recourse by resort to any property of THC Systems, Inc. or the Parent or any
Subsidiary Guarantor, the taking of any such action to remain within the
absolute discretion of such Creditor without obligation of any kind to other
Creditors to take any such action.
41
Section 3. AGREEMENTS AMONG THE CREDITORS.
Section 3.1. Independent Actions by Creditors. Nothing contained in
this Agreement shall prohibit any Creditor from accelerating the maturity of, or
demanding payment from any Subsidiary Guarantor on, any Subject Obligation of
the Parent or THC Systems, Inc. to such Creditor or from instituting legal
action against THC Systems, Inc. or the Parent or any Subsidiary Guarantor or
THC Systems, Inc. in connection with a Sharing Payment to obtain a judgment or
other legal process in respect of such Subject Obligation, but any funds
received from any Subsidiary Guarantor or THC Systems, Inc. in connection with a
Sharing Payment in connection with any recovery therefrom shall be subject to
the terms of this Agreement.
Section 3.2. Relation of Creditors. This Agreement is entered into
solely for the purpose set forth herein, and no Creditor assumes any
responsibility to any other party hereto to advise such other party of
information known to such other party regarding the financial condition of the
Parent, THC Systems, Inc. or any Subsidiary Guarantor or of any other
circumstances bearing upon the risk of nonpayment of any Subject Obligation.
Each Creditor specifically acknowledges and agrees that nothing contained in
this Agreement is or is intended to be for the benefit of THC Systems, Inc. or
the Parent or any Subsidiary Guarantor and nothing contained herein shall limit
or in any way modify any of the obligations of THC Systems, Inc. or the Parent
or any Subsidiary Guarantor to the Creditors.
SECTION 4. MISCELLANEOUS
Section 4.1. Entire Agreement. This Agreement represents the entire
Agreement among the Creditors and, except as otherwise provided, this Agreement
may not be altered, amended or modified except in a writing executed by all
parties to this Agreement.
Section 4.2. Notices. Notices hereunder shall be given to the Creditors
at their addresses as set forth in the Note Agreements or the Credit Agreement,
as the case may be, or at such other address as may be designated by each in a
written notice to the other parties hereto.
Section 4.3. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the Creditors and their respective
successors and assigns (including, without limitation, any holder of a
participation interest in any Subject Obligation), whether so expressed or not,
and, in particular, shall inure to the benefit of and be enforceable by any
future holder or holders of any Subject Obligations, and the term "Creditor"
shall include any such subsequent holder of Subject Obligations, wherever the
context permits.
Section 4.4. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
Section 4.5. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one Agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.
Section 4.6. Sale of Interest. No Creditor will sell, transfer or
otherwise dispose of any interest in the Subject Obligations unless such
purchaser or transferee shall agree, in writing, to be bound by the terms of
this Agreement.
Section 4.7. Severability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby.
42
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXX X. XXXXXX
--------------------------------------
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------------
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/ XXXXXX X. XXXXXX
--------------------------------------
By: /s/ XXXXXXXX X. XXXXXX
--------------------------------------
Authorized Signatories
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
--------------------------------------
By: /s/ XXXXX X. XXXX
--------------------------------------
43
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
THE CHASE MANHATTAN BANK
(as Administrative Agent and as Lender)
By: /s/ XXXXXX X. XXXX, XX.
-------------------------------
Title: Vice President
HSBC BANK, USA
By: /s/ XXXX X. XXXXXXX
-------------------------------
Title: Vice President
MANUFACTURERS AND TRADERS TRUST
COMPANY
By: /s/ XXXX X. XXXXXX
-------------------------------
Title: Banking Officer
FLEET NATIONAL BANK
By: /s/ XXXXX X. XXXXXX
-------------------------------
Title: Vice President
BANK OF AMERICA, N.A.,
By: /s/ XXXX X. XXXX
-------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ XXXX X. XXXXXX
-------------------------------
Title Managing Director
EUROPEAN AMERICAN BANK
By: /s/ XXXX XXXXXX
-------------------------------
Title: Vice President
BANCA NAZIONALE DEL LAVORO
By: /s/ XXXXXX XXXXXXX
-------------------------------
Title: Vice President
By: /s/ XXXXXXXX XXXXXXXXX
-------------------------------
Title: First Vice President
44
EXHIBIT D
SUBSIDIARY SUBORDINATION AGREEMENT
This Subsidiary Subordination Agreement (the "Agreement"), dated as of
June 2, 2000, is among ONEIDA LTD., a New York corporation ("Borrower"), BUFFALO
CHINA, INC., ENCORE PROMOTIONS, INC., and THC SYSTEMS, INC., each a New York
corporation (individually, a "Guarantor" and, collectively, the "Guarantors"),
and THE CHASE MANHATTAN BANK, as Administrative Agent (the "Administrative
Agent") for the Lenders which now or hereafter become parties to the Credit
Agreement referred to below (collectively referred to as the "Lenders").
RECITALS
A. The Lenders, the Administrative Agent and Borrower are parties to a
Credit Agreement dated as of June 2, 2000 (as amended, modified or restated from
time to time, the "Credit Agreement") establishing a senior unsecured revolving
credit facility in an aggregate amount of up to $275,000,000 (which amount may
be increased, under certain circumstances, to $285,000,000) in accordance with
the terms of the Credit Agreement.
B. Guarantors are subsidiaries of Borrower. Each of the Guarantors has
executed and delivered to the Administrative Agent a Subsidiary Guarantee
Agreement dated as of the date hereof (the "Guarantee Agreement") guarantying
repayment of the Borrower's obligations under the Credit Agreement.
D. Borrower from time to time extends credit to the Guarantors in the
form of loans, advances, accounts receivable, administrative services and
expenses, and other inter-company accommodations made by the Borrower to the
Guarantors.
F. The Lenders, as a condition to entering into the Credit Agreement
and providing the loans and advances thereunder, have required the Borrower and
the Guarantors to execute and deliver this Agreement.
NOW, THEREFORE, in order to induce the Lenders to enter into the Credit
Agreement and in consideration thereof, the Borrower and the Guarantors agree as
follows:
1. Definitions.
45
1.1 As used herein, the following terms shall have the
following meanings:
"Credit Agreement" shall have the meaning given such term in
the Recitals.
"Event of Default" shall mean an Event of Default as defined
in the Credit Agreement (after giving effect to any applicable cure period)
which is not waived in writing by the Required Lenders.
"Guarantee Agreement" shall have the meaning given to such
term in the Recitals.
"Guaranteed Obligations" shall have the meaning given to such
term in the Guarantee Agreement.
"Loan Documents" shall mean all credit accommodations, notes,
note agreements, and any other agreements and documents, now or hereafter
existing, creating, evidencing, guarantying, securing or relating to any or all
of the Senior Liabilities, together with all amendments, modifications,
renewals, or extensions thereof.
"Required Lenders" Shall have the meaning given to such term
in the Credit Agreement.
"Senior Liabilities" shall mean all liabilities of the
Guarantors to the Administrative Agent and the Lenders under the Guarantee
Agreements, including, without limitation, the principal amount of all
Guaranteed Obligations and all interest payable in respect thereof, together
with all fees, late charges, premiums, costs and expenses payable under the
Guarantee Agreements.
"Subordinated Liabilities" shall mean all liabilities of each
of the Guarantors to the Borrower for loans, advances, accounts receivable,
administrative services and expenses, and all other inter-company
accommodations, including, without limitation, all amounts in the inter-company
account maintained by Borrower on behalf of each of the Guarantors.
"Subordinated Loan Documents" shall mean all credit
accommodations, notes, loan agreements and any other agreements and documents,
now or hereafter existing, creating, evidencing, guarantying, securing or
relating to any or all of the Subordinated Liabilities, together with all
amendments, modifications, renewals or extensions thereof.
1.2 Other capitalized terms used herein which are not
otherwise defined herein shall have the meanings given to such terms in the
Credit Agreement.
1.3 The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (d) all references herein to Sections,
shall be construed to refer to Sections of this Agreement.
2. Subordination.
2.1 Subordination to Senior Liabilities. Except as set forth
in Section 2.2 of this Agreement or as the Required Lenders may hereinafter
otherwise expressly consent in writing, the payment of all Subordinated
Liabilities shall be postponed and subordinated to the payment in full of all
Senior Liabilities, and no payments or other distributions whatsoever,
including, without limitation, payments of interest in respect of any
Subordinated Liabilities, shall be made, nor shall any property or assets of the
Guarantors be applied to the purchase or other acquisition or retirement of any
Subordinated Liabilities, nor given as collateral security to secure repayment
of same.
2.2 Permitted Payments. Notwithstanding anything in Section
2.1 to the contrary, until such time as an Event of Default occurs, Guarantors
may make, and Borrower may receive, payments of principal and interest on
account of Subordinated Liabilities in a manner consistent with past practice.
Upon the occurrence of an Event of Default, all payments on account of
Subordinated Liabilities shall automatically cease, and Guarantors shall not
make, and Borrower shall not receive, any such payments unless the Lenders shall
expressly consent thereto in writing.
2.3 Rights of Lenders to Collect Subordinated Liabilities. In
the event of, and commencing with the date thereof, any dissolution, winding up,
liquidation, reorganization or other similar proceedings relating to
46
any Guarantor or to its creditors or its property (whether voluntary or
involuntary, partial or complete, and whether in bankruptcy, insolvency or
receivership, or upon an assignment for the benefit of creditors, or any other
marshalling of the assets and liabilities of a Guarantor, or any sale of all or
substantially all of the assets of a Guarantor), the Senior Liabilities shall
first be paid in full before the Borrower shall be entitled to receive and/or to
retain any payment or distribution in respect of the Subordinated Liabilities,
and in order to implement the foregoing: (i) all payments and distributions of
any kind or character in respect of the Subordinated Liabilities to which the
Borrower would be entitled but for the provisions of this Agreement will be made
directly to the Lenders; and (ii) the Borrower shall promptly file a claim or
claims, in the form required in such proceedings, for the full outstanding
amount of the Subordinated Liabilities, and shall cause said claim or claims to
be approved and all payments and other distributions in respect thereof to be
made directly to the Lenders.
2.4 Protection of Lenders' Rights in Subordinated
Liabilities. In the event that, after the occurrence of an Event of Default, the
Borrower receives any payment or other distribution of any kind or character
from any Guarantor or any other source whatsoever in respect of any of the
Subordinated Liabilities, other than as expressly permitted by the terms of this
Agreement, such payment or other distribution shall be received in trust for the
Lenders and promptly turned over by the Borrower to the Administrative Agent.
The Borrower will cause to be clearly inserted in any promissory note or other
instrument which at any time evidences any of the Subordinated Liabilities a
statement to the effect that the payment thereof is subordinated in accordance
with the terms of this Agreement. The Borrower will execute such further
documents and instruments and take such further action as the Lenders may from
time to time reasonably request to carry out the intent of this Agreement. The
Borrower hereby irrevocably appoints the Administrative Agent its attorney in
fact, said appointment being coupled with an interest, to execute such further
documents and instruments and take such further action on behalf of the Borrower
as the Administrative Agent may from time to time deem reasonable to carry out
the intent of this Agreement, including, without limitation, the actions set
forth in Section 2.3 hereof.
2.5 Treatment of Payment of Subordinated Liabilities. All
payments and distributions received by the Lenders in respect of the
Subordinated Liabilities, to the extent received in or converted into cash, may
be applied by the Lenders first to the payment of any and all expenses
(including attorneys' fees and disbursements and the allocated fees, expenses
and cost of in-house counsel) paid or incurred by the Administrative Agent or
the Lenders in enforcing this Agreement or in endeavoring to collect or realize
upon any of the Subordinated Liabilities, and any balance thereof shall be
applied by the Administrative Agent toward the payment of the Senior Liabilities
in accordance with the terms of the Credit Agreement.
2.6 Prohibition on Changes in Subordinated Liabilities. The
Borrower will not, without the prior written consent of the Lenders: (i) cancel,
waive, or forgive any Subordinated Liabilities or any rights in respect thereof,
or (ii) convert any Subordinated Liabilities into capital stock of the
Guarantors.
2.7 Continuing Agreement. This Agreement shall in all
respects be a continuing agreement and shall remain in full force and effect
until all Senior Liabilities have been paid in full.
2.8 Permitted Changes in Senior Liabilities. The Lenders may,
from time to time, take any or all of the following actions without affecting
the subordination set forth in this Agreement: (i) retain or obtain a security
interest in any property to secure any of the Senior Liabilities; (ii) retain or
obtain the primary or secondary obligation of any other person with respect to
any of the Senior Liabilities; (iii) extend, renew, alter or exchange any of the
Senior Liabilities; (iv) release or compromise any obligation of any nature of
any Guarantor with respect to any of the Senior Liabilities; and (v) release any
security interest or lien in, allow a security interest or lien to be
unperfected, surrender, release or permit any substitution or exchange for, all
or any part of any property securing any of the Senior Liabilities, or extend,
renew or release, compromise, alter or exchange any obligations of any nature of
any Guarantor with respect to any such property.
3. Representations and Warranties. Each of the Borrower and each
Guarantor hereby represents and warrants that: (i) it has the necessary power
and capacity to make and perform this Agreement and such making and performance
have been duly authorized by all necessary corporate action; (ii) the making and
performance of this Agreement does not and will not violate any provision of law
or regulation or result in the breach of, or constitute a default or require any
consent under, any indenture or other agreement or instrument to which it is a
party or by
47
which any of its properties may be bound; and (iii) this Agreement is the legal,
valid and binding obligation of the Borrower and each Guarantor, enforceable in
accordance with its terms.
4. Additional Subordinated Liabilities. If, under the terms
of the Credit Agreement, any other Material Domestic Subsidiary of Borrower (as
that term is defined in the Credit Agreement) becomes obligated to deliver to
the Administrative Agent a written guarantee of amounts due under the Credit
Agreement, Borrower agrees to subordinate all liabilities of such Subsidiary to
the Borrower for loans, advances, accounts receivable, administrative services
and expenses and other inter-company accommodations to the prior payment of the
such Subsidiary's liability under the written guarantee. Borrower agrees to
execute, and to cause such Subsidiary to execute, a subordination agreement in
form and substance similar to this Agreement.
5. Miscellaneous.
5.1 Remedies Cumulative: No Waiver. The rights, powers and
remedies of the Administrative Agent and the Lenders provided in this Agreement
and any of the Loan Documents are cumulative and not exclusive of any right,
power or remedy provided by law or equity. No failure or delay on the part of
the Administrative Agent or the Lenders in the exercise of any right, power or
remedy shall operate as a waiver thereof, nor shall any single or partial
exercise preclude any other or further exercise thereof, or the exercise of any
other right, power or remedy.
5.2 Notices. Notices and communications under this Agreement
shall be in writing and shall be given by: (i) hand delivery, (ii) first class
mail (postage prepaid), or (iii) reliable overnight commercial courier (charges
prepaid). Notice by overnight courier shall be deemed to have been given and
received on the date scheduled for delivery. Notice by mail shall be deemed to
have been given and received three (3) calendar days after the date first
deposited in the United States mail. Notice by hand delivery shall be deemed to
have been given and received upon delivery. All notices to the Lenders shall be
addressed to the Administrative Agent. Notices shall be sent or delivered to the
addresses of the parties set forth in the Credit Agreement or Guarantee
Agreements, as the case may be.
5.3 Governing Law. This Agreement shall be construed in
accordance with and governed by the substantive laws of the State of New York
without reference to conflict of laws principles.
5.4 Integration; Amendment. This Agreement and the other Loan
Documents constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations and prior
writings with respect to the subject matter hereof and thereof. No amendment of
this Agreement, and no waiver of any one or more of the provisions hereof, shall
be effective unless set forth in writing and signed by the parties hereto.
5.5 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs,
executors, administrators, successors and permitted assigns.
5.6 Severability. The illegality, unenforceability or
inconsistency of any provision of this Agreement shall not affect or impair the
legality, enforceability or consistency of the remaining provisions of this
Agreement.
5.7 Judicial Proceedings; Waivers. For purposes of this
Agreement, the parties hereby irrevocably consent and submit to the nonexclusive
jurisdiction and venue of all federal and state courts located in the State of
New York. Each party hereby irrevocably waives (to the fullest extent permitted
by applicable law) any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of, under or relating to
this Agreement or any Loan Document brought in any federal or state court
located in the State of New York, and hereby further irrevocably waives (to the
fullest extent permitted by applicable law) any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Nothing in this Section shall affect any right that the Administrative
Agent and the Lenders may otherwise have to bring any action or proceeding
relating to this Agreement against any Guarantor or its properties in any
jurisdiction in which it may lawfully do so, provided that no such action or
proceeding may be commenced in a court located outside the
48
United States except an action or proceeding to enforce a judgment rendered by a
court in the United States in the courts of another jurisdiction. EACH PARTY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENT.
5.8 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed as of the date set forth above.
ONEIDA LTD.
By:
-------------------------------------
Xxxxxx X. Xxxxx
Corporate Senior Vice President, Finance
BUFFALO CHINA, INC.
By:
-------------------------------------
Title:
-------------------------------------
THC SYSTEMS, INC.
By:
-------------------------------------
Title:
-------------------------------------
ENCORE PROMOTIONS, INC.
By:
-------------------------------------
Title:
-------------------------------------
THE CHASE MANHATTAN BANK,
as Administrative Agent
By:
-------------------------------------
Xxxxxx X. Xxxx, Xx.
Vice President
49
EXHIBIT E
SUBSIDIARY GUARANTEE AGREEMENT
This Subsidiary Guarantee Agreement, dated as of June 2, 2000,
is executed by BUFFALO CHINA, INC, ENCORE PROMOTIONS, INC., and THC SYSTEMS
INC., each a New York corporation (individually, a "Guarantor" and,
collectively, the "Guarantors"), for the benefit of the Persons that now are or
at any time hereinafter become party as a Lender to the Credit Agreement
referred to below (the "Lenders"), The Chase Manhattan Bank, as Administrative
Agent under the Credit Agreement (in such capacity the "Administrative Agent"),
and all other present and future holders of any of the Guaranteed Obligations
described herein (all such Persons, collectively, including the Lenders and the
Administrative Agent, referred to as the "Beneficiaries").
RECITALS
A. Guarantor is a wholly owned subsidiary of Oneida Ltd., a
New York corporation (the "Borrower"). Borrower has requested that credit be
extended to the Borrower on terms and conditions set forth in the Credit
Agreement referred to below.
B. To induce the Lenders and Administrative Agent to enter
into the Credit Agreement and the other Loan Documents, and in consideration
thereof and of any and all credit at any time extended thereunder, Guarantor has
offered to enter into this Subsidiary Guarantee Agreement.
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Guarantor hereby agrees for the benefit of each of the
Beneficiaries as follows:
1. Definitions.
1.1 The following capitalized terms shall have the meanings
set forth below for purposes of this Agreement:
"Credit Agreement" means the Credit Agreement dated as of the
date hereof between Borrower, the Lenders and the Administrative Agent, as the
same may hereafter be amended, modified, extended or restated from time to time.
"Discharge of the Guaranteed Obligations" means that all
Commitments of the Lenders to extend credit under the Credit Agreement have
irrevocably expired or been terminated and all Guaranteed Obligations have been
fully, finally and indefeasibly paid in cash.
"Guaranteed Obligations" means all debts, liabilities and
obligations of Borrower, whether now existing or hereafter incurred at any time
or times, direct or indirect, absolute or contingent, secured or unsecured,
arising under the Credit Agreement or any of the other Loan Documents, including
without limitation all principal, interest, premiums, commitment fees, up- front
fees, agency fees, legal fees or other fees and charges payable to the
Beneficiaries by the Borrower, and all late charges, penalties and reasonable
expenses of collection or enforcement or attempted collection or enforcement
thereof, including reasonable fees and disbursements of legal counsel in
connection therewith, whether within or apart from any legal action or
proceeding.
"Loan Documents" means the Credit Agreement and any other
agreement, document or instrument executed by the Borrower or any other Person,
delivered to the Administrative Agent or any of the Lenders, and pertaining to
any Guaranteed Obligations, as the same may hereafter be amended, modified,
extended or restated from time to time.
"Material Adverse Effect" means a material adverse effect on
(a) the business, assets, operations, prospects or condition, financial or
otherwise, of a Guarantor, (b) the ability of a Guarantor to perform any of its
obligations under this Agreement, or (c) the rights or benefits available to the
Beneficiaries under this Agreement.
50
1.2 Other capitalized terms used herein which are not
otherwise defined herein shall have the meanings given to such terms in the
Credit Agreement.
1.3 The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, and (d) all references herein to Sections,
shall be construed to refer to Sections of this Agreement.
2. Guarantee.
2.1 Each Guarantor, jointly and severally, hereby absolutely,
unconditionally and irrevocably guarantees to each of the Beneficiaries the
payment in full when due, by acceleration or otherwise, of all Guaranteed
Obligations. If an Event of Default occurs and notice of demand for payment
under this Agreement is given by the Administrative Agent or the Required
Lenders to Guarantors, all liability of Guarantors under this Agreement shall
become due and payable, without further notice or demand.
2.2 This Agreement constitutes a guarantee of payment and not
merely a guarantee of collection. The Beneficiaries shall not be required to
commence any action or proceeding to foreclose any security for the payment of
the Guaranteed Obligations or to pursue or exhaust any remedies against the
Borrower prior to the effectiveness of the Guarantors' obligation to pay the
full amount of the Guaranteed Obligations.
2.3 This Agreement is a continuing guarantee and shall remain
in full force and effect in respect of the Guarantors until the Discharge of the
Guaranteed Obligations.
2.4 The Guarantors' liability hereunder is in addition to and
independent of any other liabilities which the Guarantors have incurred or
assumed, or may hereafter incur or assume, by way of endorsement, separate
guarantee agreement, or in any other manner, with respect to all or any part of
the Guaranteed Obligations. This Agreement does not supersede nor limit any such
other liabilities of the Guarantors, and the Beneficiaries' rights and remedies
under and pursuant to this Agreement and any such other liabilities are
cumulative and may be exercised singly or concurrently.
3. Representation and Warranties.
The Guarantors jointly and severally represent and warrant
that:
3.1 Each Guarantor (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority and all licenses, permits and other approvals
of any Governmental Authority to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except where the failure to so qualify or be in good standing
could not, individually or in the aggregate, have a Material Adverse Effect, and
(d) is in compliance with all applicable laws, rules and regulations except to
the extent that the failure to comply therewith could not, individually or in
the aggregate, have a Material Adverse Effect.
3.2 Each Guarantor has the corporate power and authority to
make, deliver and perform this Agreement and all other Loan Documents to which
it is a party, and has taken all necessary corporate action to
51
undertake and pay and perform all of its liabilities and obligations hereunder
and has taken all necessary corporate action to authorize the execution,
delivery, payment and performance hereof and thereof on the terms and conditions
set forth herein and therein. No consent, approval or authorization of, filing
with, notice to or other act by any Governmental Authority or any other Person
is required by any Guarantor in connection with the execution, delivery and
performance of this Agreement.
3.3 This Agreement has been duly executed and delivered on
behalf of each Guarantor. This Agreement constitutes a legal, valid and binding
obligation of each Guarantor enforceable against it in accordance with its terms
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether enforcement is sought in equity or at law).
3.4 The execution, delivery and performance of this Agreement
and other Loan Documents to which each Guarantor is a party will not violate any
law, rule or regulation or any indenture, agreement or other instrument to which
a Guarantor is a party or by which it or any of its property is bound and will
not result in the creation or imposition of any Lien on any of its properties or
revenues pursuant to any such law, rule or regulation or any such indenture,
agreement or other instrument.
3.5 After giving effect to the liability incurred by it under
this Agreement and the rights granted to it in Section 5 (including Guarantors'
ability to realize upon the rights granted to it under Section 5), (a) the fair
value of the assets of each Guarantor, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (b) the present
fair saleable value of the property of each Guarantor will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (c) each Guarantor, on a going
concern basis, will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and
matured; and (d) each Guarantor will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following such date. If,
notwithstanding the foregoing, enforcement of the liability of any Guarantor
under this Agreement for the full amount of the Guaranteed Obligations would be
an unlawful or voidable transfer under any applicable fraudulent conveyance or
fraudulent transfer law or any comparable law, then the liability of such
Guarantor hereunder shall be reduced to the highest amount for which such
liability may then be enforced without giving rise to an unlawful or voidable
transfer under any such law.
4. Guarantee Absolute.
4.1 The obligations of the Guarantors hereunder are absolute,
unconditional and irrevocable and shall not be subject to any counterclaim,
setoff, deduction, diminution, abatement, recoupment, suspension, deferment,
reduction or defense.
4.2 The Beneficiaries may at any time and from time to time
without the consent of or notice of any kind to the Guarantors, and without
regard to any demands or requests by the Guarantors, take any of the following
acts, upon or without any terms or conditions and in whole or in part, without
thereby incurring any liability to the Guarantors, impairing the Guarantors'
obligations under this Agreement or releasing the Guarantors from this
Agreement:
(a) change the rate of interest, penalties, manner, place or
terms of payment, change or extend the time of payment of the Guaranteed
Obligations, or renew, amend, alter or revoke any commitment, condition,
covenant, Event of Default or other provision with respect to any of the
Guaranteed Obligations, any security therefor, or any liability incurred
directly or indirectly in respect thereof, and this Agreement shall apply to
such Guaranteed Obligations as so changed, extended, renewed, amended or
altered;
(b) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof;
52
(c) waive, consent, extend, grant indulgence, compromise,
release, discharge or exercise or refrain from exercising any right, remedy,
power or privilege under or in respect of the Loan Documents or the Borrower or
any other party directly or indirectly liable upon the Guaranteed Obligations;
(d) settle or compromise any Guaranteed Obligations, any
security therefor, or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and subordinate the payment
of all or any part thereof to the payment of any liability (whether due or not)
of Borrower to creditors of Borrower;
(e) apply any sum by whomsoever paid or howsoever realized to
such debts, liabilities, obligations, interest, or expenses of collection owing
by Borrower or the Guarantor to the Beneficiaries and in such order as the
Beneficiaries may elect pursuant to any right of the Beneficiaries, whether
guaranteed hereby or not, without regard to any rights of the Guarantor in
respect to the application thereof, and regardless of what Guaranteed
Obligations or other liability hereunder or portion thereof remains unpaid;
(f) omit to collect or enforce any collateral security or
other guarantees held by the Beneficiaries without regard to any demand or
request by the Guarantor; or
(g) fail or omit to perfect any security interest in any
collateral for the payment of the Guaranteed Obligations.
4.3 This Agreement shall remain in full force and effect
without regard to, and shall not be released, discharged or in any way affected
by, any of the following circumstances or conditions whatsoever:
(a) any failure, omission or delay on the part of the
Beneficiaries to comply with any term of the Loan Documents or any other
agreement or instrument applicable to any of the parties to the Loan Documents;
(b) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or similar proceeding with respect to the
Borrower or the Guarantors or any of their respective properties or any action
taken by any trustee or receiver or by any court in any such proceeding; and
(c) any limitation on the liability or obligations of the
Borrower or any other Person under the Loan Documents or any other Person
referred to therein, or any discharge, termination, cancellation, frustration,
irregularity, invalidity or unenforceability, in whole or in part, of the Loan
Documents other than by reason of a Discharge of the Guaranteed Obligations.
4.4 Each Guarantor expressly waives any and all right to
notice from the Beneficiaries, the Borrower or any other Person of:
(a) any notice of any adverse change in the Borrower's
financial condition or of any other fact which might increase the Guarantor's
risk;
(b) all notices that may be required by statute, rule of law
or otherwise, now or hereafter in effect, to preserve intact any rights against
the Guarantor, including without limitation, any demand, presentment and
protest, proof of notice of nonpayment under the Loan Documents and notice of
default or any failure on the part of Borrower or any other Person, to perform
and comply with any covenant, agreement, term or condition of the Loan
Documents;
(c) any notice of any assignment, sale, transfer,
participation or other disposition of any right, title or interest in the Loan
Documents by the Beneficiaries;
(d) any requirement of diligence on the part of the
Beneficiaries or any other Person;
53
(e) any requirement to exhaust any remedies or to mitigate
the damages resulting from any Default under the Loan Documents; and
(f) any other circumstances whatsoever that might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety, or that might otherwise limit recourse against the Guarantor.
4.5 If claim is ever made upon a Beneficiary for repayment or
recovery of any amount or amounts received by the Beneficiary in payment or on
account of any of the Guaranteed Obligations, and such Beneficiary repays all or
part of said amount by reason of (a) any judgment, decree or order of any court
or administrative body having jurisdiction over the Beneficiary or any of the
Beneficiary's property, or (b) any settlement or compromise of any such claim
effected by the Beneficiary with any such claimant (including Borrower), then
and in such event the Guarantors agree that any such judgment, decree, order,
settlement or compromise shall be binding upon the Guarantors, and
notwithstanding any termination hereof or the cancellation of any Guaranteed
Obligations, the Guarantors shall be and remain liable to such Beneficiary
hereunder for the amounts so repaid or recovered to the same extent as if such
amount had never originally been received by the Beneficiary.
5. Reimbursement and Contribution Rights
5.1 Each Guarantor reserves the right to claim reimbursement
from the Borrower for the entire amount of any payment made by such Guarantor on
account of Guaranteed Obligations pursuant to this Agreement, but such Guarantor
agrees that its claim for reimbursement shall not arise until, and is subject in
all respects to, Discharge of the Guaranteed Obligations. Accordingly, each
Guarantor agrees not to assert, xxx upon, collect or otherwise enforce against
the Borrower (by set-off or otherwise) any claim for reimbursement on account of
any payment made by a Guarantor hereunder until Discharge of the Guaranteed
Obligations.
5.2 Each Guarantor agrees that if the Borrower at any time
fails to pay any reimbursement due to a Guarantor as contemplated in subsection
5.1 and such failure continues for a period of 60 days after Discharge of the
Guaranteed Obligations, then if and to the extent any such unreimbursed payment
due to such Guarantor under this Agreement is such that the Aggregate
Unreimbursed Payments of such Guarantor are greater than its Fair Share of the
Aggregate Unreimbursed Payments of All Guarantors, the Guarantor shall be
entitled to a contribution from each other guarantor in the amount necessary to
cause Guarantor's Aggregate Unreimbursed Payments to equal its Fair Share. For
these purposes:
(i) "Fair Share" means an amount equal to (i) the ratio of
(x) the Adjusted Maximum Amount of a Guarantor to (y) the Adjusted Maximum
Amounts of All Guarantors, multiplied by (ii) the Aggregate Unreimbursed
Payments of All Guarantors.
(ii) "Adjusted Maximum Amount" means the maximum aggregate
amount of the liability of a Guarantor under this Subsidiary Guarantee Agreement
limited to the extent required under subsection 3.5 (except that, for purposes
solely of this calculation, any assets or liabilities arising by virtue of any
rights to or obligations of reimbursement or contribution under this subsection
5.2 shall not be counted as assets or liabilities of such Guarantor).
(iii) "Aggregate Unreimbursed Payments" means, with respect
to a Person as of any date of determination, the aggregate net amount of all
payments made on or before such date by such Person under this Subsidiary
Guarantee Agreement or any other written instrument providing for the guarantee
of the Guaranteed Obligations for which reimbursement by the Borrower to such
Person is then due and payable as contemplated in subsection 5.1 but has not
been paid.
(iv) "All Guarantors" means the Guarantors under this
Agreement and any other Person who has entered into a written instrument
agreeing to guarantee the Guaranteed Obligations.
The allocation and right of contribution among the Guarantors set forth in this
subsection 5.2 shall not in any respect limit the Guarantors' liability under
this Subsidiary Guarantee Agreement to the Beneficiaries.
54
5.3 Guarantors hereby waive, release and discharge,
absolutely, unconditionally, irrevocably and forever, all rights of recourse,
reimbursement, contribution or indemnity and all other claims that Guarantors
might otherwise have or acquire against Borrower or any other Person liable for
the payment of any of the Guaranteed Obligations (including, without limitation,
the owner of any interest in collateral subject to a Lien securing any of the
Guaranteed Obligations) and all rights of subrogation that Guarantors might
otherwise have or acquire against any Beneficiary by reason of any payment made
by Guarantors under this Agreement or otherwise as a result of or in connection
with this Agreement, whether such rights or claims are conferred by agreement,
implied or created by law or otherwise, except only the reimbursement rights
reserved by Guarantors in subsection 5.1 and the contribution rights granted to
Guarantors under subsection 5.2.
6. Setoff. In the event that any amount becomes due and
payable hereunder and the Beneficiaries shall have demanded payment thereof from
Guarantors, in addition to all other rights and remedies, the Beneficiaries and
each and every affiliate of the Beneficiaries (and any Person holding a
participation interest in any of the Guaranteed Obligations) is hereby
irrevocably authorized, without prior notice to the Guarantors, to set off any
balances held for the account of or any other liability owing by the
Beneficiaries or any such affiliate or participant to Guarantors at any of their
offices against any of the Guaranteed Obligations, as the Beneficiaries or such
affiliate or participant may elect.
7. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the Guarantors hereto shall
be in writing (including teletransmissions), shall be given or made at the
address or telecopier number set forth on the signature page hereto, or at such
other address or telecopier number as Guarantors may hereafter specify to the
Administrative Agent in writing, and (unless otherwise specified herein) shall
be deemed delivered on receipt if teletransmitted or delivered by hand or five
Business Days after mailing, and all mailed notices shall be by registered mail,
postage prepaid.
8. Expenses. Guarantors shall be jointly and severally liable
to the Beneficiaries and shall pay to the Beneficiaries immediately on demand
all costs and expenses of the Beneficiaries, including all reasonable fees and
disbursements of the Beneficiaries' counsel incurred in the collection or
enforcement or attempted collection or attempted enforcement of the
Beneficiaries' rights under this Agreement.
9. No Waiver of Remedies. No failure to exercise and no delay
in exercising, on the part of the Beneficiaries, any right, remedy, power or
privilege under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege under this
Agreement preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights, remedies, powers and
privileges provided under this Agreement are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York
without regard to any conflicts-of-laws rules.
11. Entire Agreement; Modifications. This Agreement contains
the entire agreement between the Beneficiaries and the Guarantors with respect
to all subject matters contained herein. This Agreement cannot be amended,
modified or changed in any way except by a written instrument executed by
Guarantors and accepted by the Administrative Agent.
12. Successors and Assigns. The covenants, representations,
warranties and agreements herein set forth shall be binding upon the Guarantors
and their successors and assigns and shall inure to the benefit of the
Beneficiaries, their successors and assigns.
13. Severability. The unenforceability or invalidity of any
provision or provisions of this Agreement shall not render any other provision
or provisions herein contained unenforceable or invalid.
14. Jurisdiction and Venue. For purposes of this Agreement,
each of the Guarantors and the Beneficiaries hereby irrevocably consents and
submits to the nonexclusive jurisdiction and venue of all federal and
55
state courts located in the State of New York. At the Beneficiaries' option, the
Guarantors may be joined in any action or proceeding commenced by the
Beneficiaries against Borrower in connection with or based on the Loan Documents
to which Borrower is a party, or any provision of any thereof, and recovery may
be had against the Guarantors in such action or proceeding or in any independent
action or proceeding against the Guarantors, without any requirement that the
Beneficiaries first assert, prosecute or exhaust any remedy or claim against
Borrower. Each Guarantor and each Beneficiary hereby irrevocably waives (to the
fullest extent permitted by applicable law) any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of, under or relating to this Agreement or any Loan Document brought in any
federal or state court located in the State of New York, and hereby further
irrevocably waives (to the fullest extent permitted by applicable law) any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing in this Section shall affect any right
that the Beneficiaries may otherwise have to bring any action or proceeding
relating to this Agreement against any Guarantor or its properties in any
jurisdiction in which it may lawfully do so, provided that no such action or
proceeding may be commenced in a court located outside the United States except
an action or proceeding to enforce a judgment rendered by a court in the United
States in the courts of another jurisdiction. EACH GUARANTOR AND EACH
BENEFICIARY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY LOAN
DOCUMENT.
IN WITNESS WHEREOF, the Guarantors have executed this
Subsidiary Guarantee Agreement as of the date first written above.
BUFFALO CHINA, INC.
By:
---------------------------------------
Name:
Title:
Address: 000-000 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Telecopier (fax) #: (000) 000-0000
THC SYSTEMS INC.
By:
---------------------------------------
Name:
Title:
Address: 000-000 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Telecopier (fax) #: (000) 000-0000
ENCORE PROMOTIONS, INC.
By:
---------------------------------------
Name:
Title:
Address: 000-000 Xxxxxxx Xxx.
Xxxxxx, Xxx Xxxx 00000
Telecopier (fax) #: (000) 000-0000
56
