EXHIBIT 10.1
November 18, 1996
Oneida Rostone Corp.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Oneida Molded Plastics, Corp.
of North Carolina
Xxxxx 00, Xxxx
X.X. Xxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Re: Amendment No. 2 to Loan and Security Agreement
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Gentlemen:
Reference is made to the Loan and Security Agreement, dated February 2,
1996 (the "Loan Agreement"), by and among Congress Financial Corporation
("Lender"), Oneida Rostone Corp. ("ORC") and Oneida Molded Plastics, Corp. of
North Carolina ("OMPC-NC"; together with ORC, each individually a "Borrower" and
collectively, "Borrowers"), as amended by Amendment No. 1 to Loan and Security
Agreement, dated October 21, 1996, together with all other agreements,
documents, supplements and instruments now or at any time hereafter executed
and/or delivered by Borrowers or any other person, with to or in favor of Lender
in connection therewith (all of the foregoing, together with this Amendment and
the agreements and instruments delivered hereunder, as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, collectively, the "Financing Agreements"). All capitalized terms used
herein and not otherwise defined herein shall have the meanings given to them in
the Loan Agreement.
ORC and OMPC-NC have requested that Lender (a) increase permanently the
Maximum Credit from $16,000,000 to $20,000,000, (b) provide $1,000,000 in
temporary additional Revolving Loan availability, (c) permit ORC to incur
certain subordinated indebtedness to Reunion in connection with the repayment of
such temporary additional Revolving Loan availability, (d) enter into certain
amendments and grant certain consents in connection with the purchase by ORC of
substantially all of the assets, properties and business of, and the assumption
of certain liabilities of, Quality Molded Products, Inc., and permit ORC to
enter into a consulting and non-competition agreement with Xxx X. Xxxx in
connection therewith, and (e) enter into certain amendments and grant certain
consents in connection with the merger of OMPC-NC with and into ORC, with ORC as
the surviving corporation.
Lender is willing to agree to the foregoing to the extent set forth herein
and subject to the terms and conditions set forth herein.
1. Definitions.
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(a) Additional Definitions. As used herein or in any of the other
Financing Agreements, the following terms shall have the respective meanings set
forth below, and the Loan Agreement shall be deemed and is hereby amended to
include, in addition and not in limitation, each of the following definitions:
(i) "BBT" shall mean Branch Banking and Trust Company, a
North Carolina banking corporation, and its successors and assigns.
(ii) "OMPC-NC Merger" shall mean the merger of OMPC-NC with
and into ORC, with ORC as the surviving corporation.
(iii) "OMPC-NC Merger Agreements" shall mean the Certificates
of Merger, dated of even date herewith, of ORC and OMPC-NC and all related
agreements, documents, consents and instruments as the same now exist or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(iv) "Overformula Limit" shall mean the amount of $1,000,000,
subject to reduction pursuant to Section 5 hereof.
(v) "Overformula Loans" shall have the meaning set forth in
Section 5(a) hereof.
(vi) "Overformula Period" shall mean the period commencing
on the date hereof and ending on February 14, 1997.
(vii) "Xxxx" shall mean Xxx X. Xxxx, and his heirs,
executors, legal representatives, successors and assigns.
(viii) "Xxxx Noncompetition Agreement" shall mean the
Consulting and Noncompetition Agreement, dated of even date herewith, between
ORC and Xxxx, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(ix) "QMP" shall mean Quality Molded Products, Inc., a North
Carolina corporation, and its successors
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and assigns, but not including ORC as assignee under any of the QMP Purchase
Agreements.
(x) "QMP Purchase Agreements" shall mean, individually and
collectively, the Asset Purchase Agreement, dated November __, 1996, among ORC,
Xxxx and QMP, together with bills of sale, deeds, assignment and assumption
agreements and such other instruments of transfer as are referred to therein and
all side letters with respect thereto, and all agreements, documents and
instruments executed and/or delivered in connection therewith, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(xi) "QMP Purchase Price" shall have the meaning set forth
in Section 2 hereof.
(xii) "QMP Purchased Assets" shall mean all of the assets
and properties acquired by ORC from QMP pursuant to the QMP Purchase Agreements.
(xiii) "Reunion Limited Guarantee" shall mean the Limited
Guarantee, dated of even date herewith, by Reunion in favor of Lender pursuant
to which Reunion has agreed to absolutely and unconditionally guarantee the
payment and performance of the Obligations of ORC to the extent provided
therein, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(xiv) "Reunion Indemnity Agreement" shall mean the Indemnity
Agreement, dated of even date herewith, by Reunion in favor of Lender pursuant
to which Reunion has, among other things, agreed to indemnify Lender and the
other Indemnified Parties referred to therein from and against all liabilities
arising in connection with non-compliance by ORC or QMP with the Bulk Sales Law
of Article 6 of the Uniform Commercial Code of the State of North Carolina, as
the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
(xv) "Reunion/ORC Letter" shall mean the letter, dated of even
date hereof, between Reunion and ORC providing for, among other things, the
agreement by Reunion to make the Reunion November 1996 Subordinated Loan in
connection with the payment by ORC of the QMP Purchase Price, and, if necessary,
the Reunion February 1997 Subordinated Loan in connection with the repayment of
the Overformula Loans and reduction of the Overformula Limit as provided herein,
as the same now exists or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
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(xvi) "Reunion November 1996 Subordinated Loan" shall mean the
unsecured subordinated loan made on the date hereof by Reunion to ORC in the
original principal amount of $2,000,000 to fund a portion of the QMP Purchase
Price.
(xvii) "Reunion February 1997 Subordinated Loan" shall mean
the unsecured subordinated loan (when and if made) by Reunion to ORC in the
amount required to repay in full the unpaid balance of the Overformula Loans (if
any) outstanding on the last day of the Overformula Period.
(xviii) "Second Amended and Restated ORC Term Note" shall mean
the Second Amended and Restated Term Promissory Note, dated of even date
herewith, made by ORC payable to Lender in the original principal amount of
$9,271,025, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(xix) "Sunbeam" shall mean Sunbeam Outdoor Products, f/k/a
Rubbermaid Specialty Products, Inc., and its successors and assigns.
(b) Amendments to Definitions.
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(i) Amended and Restated ORC Term Note. All references to the
term "Amended and Restated ORC Term Note" in the Loan Agreement and the other
Financing Agreements are hereby amended to mean the "Second Amended and Restated
ORC Term Note", as defined herein.
(ii) Borrowers. Effective upon consummation of the OMPC-NC
Merger, all references to "Borrower" or "Borrowers" and to "Debtor" or "Debtors"
or words of similar import contained in the Loan Agreement and the other
Financing Agreements are hereby amended to mean only ORC, as the surviving
corporation of the OMPC-NC Merger.
(iii) Maximum Credit. Section 1.37 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following, effective as of
the date hereof:
"1.37 "Maximum Credit" shall mean the amount of
$20,000,000."
(iv) Mortgages. All references to the term "Mortgages" in the
Loan Agreement and the other Financing Agreements are hereby amended to include,
without limitation, the Deed of Trust and Security Agreement, dated of even date
herewith, by ORC in favor of Xxxxxxx X. Xxxxxx as trustee for the benefit of
Lender, and Lender with respect to the Real Property and related assets of ORC
acquired from QMP pursuant to the QMP Purchase Agreements and located in Xxxxxxx
Xxxxxx, Xxxxx
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Xxxxxxxx, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(v) OMPC-NC. Effective upon consummation of the OMPC-NC
Merger, all references to the term "OMPC-NC" in the Loan Agreement and the other
Financing Agreements are hereby amended to mean ORC, as successor of the merger
of OMPC-NC with and into ORC, with ORC as the surviving corporation, pursuant to
the OMPC-NC Merger Agreements and applicable law; provided, however, that the
references to the Excess Availability of OMPC-NC contained in Xxxxxxxx 00.00(x),
(x), (x), (x), (x), (x) and (l) of the Loan Agreement and contained in the
various subordination agreements delivered in favor of Lender as contemplated by
such Sections shall be deemed amended and shall be construed in such manner as
to maintain at $1,000,000 the Excess Availability requirement contained in such
provisions as applied to ORC, as the surviving corporation of the OMPC-NC
Merger.
(vi) ORC. Effective upon consummation of the OMPC-NC Merger,
all references to the term "ORC" contained herein and in the Loan Agreement and
the other Financing Agreements are hereby amended to mean Oneida Rostone Corp.,
as successor of the merger of OMPC-NC with and into Oneida Rostone Corp., with
Oneida Rostone Corp. as the surviving corporation, pursuant to the OMPC-NC
Merger Agreements and applicable law.
(vii) ORC Term Loan. Effective upon consummation of the OMPC-
NC Merger, all references to the term "ORC Term Loan" herein and in the Loan
Agreement and the other Financing Agreements are hereby amended to mean the
outstanding Obligations owed to Lender by ORC consisting of the indebtedness
evidenced by the Second Amended and Restated ORC Term Note.
(viii) Revolving Loans. All references to the term "Revolving
Loans" herein and in the Loan Agreement and the other Financing Agreements are
hereby amended to include, without limitation, the Overformula Loans.
2. Consents. Subject to the terms and conditions contained herein
and in the Loan Agreement and the other Financing Agreements, Lender consents to
(a) the purchase by ORC of the QMP Purchased Assets pursuant to the QMP Purchase
Agreements (as in effect on the date hereof), including the fulfillment (not
merely the waiver, except as may be consented to in writing by Lender) of all
conditions precedent to the obligations of the parties to the QMP Purchase
Agreements to close the transactions contemplated thereunder, (b) ORC's use of
the proceeds received by ORC (i) from the Reunion November 1996 Subordinated
Loan in an amount not less than $2,000,000, and (ii) from the additional, single
advance by Lender to ORC in the amount of $3,695,000 constituting a portion of
the ORC Term Loan
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as provided in Section 7 hereof, (iii) from Revolving Loans made by Lender to
ORC in accordance with Section 5 hereof (including the portion thereof, up to
$1,000,000 constituting an Overformula Loan hereunder), for the payment by ORC,
in consideration of the purchase by ORC of the QMP Purchased Assets pursuant to
the QMP Purchase Agreements (as in effect on the date hereof) of an amount,
subject to adjustment, but not greater than $8,000,000 (the "QMP Purchase
Price") consisting of cash payments, amounts delivered in escrow and the
assumption of certain indebtedness owed by QMP to BBT, which indebtedness to BBT
will be repaid contemporaneously herewith, (c) the payment by ORC of an amount,
not to exceed $240,000, in payment of the broker's fee payable to First
Commercial Group upon closing of the acquisition contemplated by the QMP
Purchase Agreements, (d) the Xxxx Noncompetition Agreement, (e) the incurrence
of the indebtedness of ORC to Reunion arising pursuant to the Reunion November
1996 Subordinated Loan and the Reunion February 1997 Subordinated Loan (when and
if made), and (f) the merger of OMPC-NC with and into ORC, with ORC as the
surviving corporation, pursuant to the OMPC-NC Merger Agreements (as in effect
on the date hereof) and applicable laws.
3. Collateral. ORC hereby acknowledges, confirms and agrees that
the Collateral does and shall include, without limitation, all of the QMP
Purchased Assets and the products and proceeds thereof. To secure payment and
performance of all obligations, ORC hereby grants to Lender, and hereby
confirms, reaffirms and restates the prior grant to Lender under the Loan
Agreement and the other Financing Agreements of, a continuing security interest
in, a lien upon, and a right of set off against, and hereby assigns to Lender as
security, all of the Collateral.
4. Location of QMP Purchased Assets. ORC represents and warrants to
Lender that the QMP Purchased Assets consisting of tangible property are located
only at 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxx Xxxxxxxx.
5. Temporary Overformula Loans.
(a) In addition to the Revolving Loans that may otherwise be made
available by Lender to Borrower pursuant to the lending formulas and subject to
the sublimits and Availability Reserves set forth in and established pursuant to
the Loan Agreement, upon the request of Borrower, Lender agrees, subject to the
terms and conditions contained herein and all other terms and conditions of the
Loan Agreement, to make available to Borrower, during the Overformula Period,
additional Revolving Loans in excess of the amount of Revolving Loans otherwise
determined by Lender to be available to Borrower at such time pursuant to
Section 3.1 of the Loan Agreement as amended hereby (such excess, if any, from
time to time, the "Overformula
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Loans"), by an amount not to exceed the Overformula Limit. The Overformula
Loans (i) shall be repaid, on or prior to the expiration of the Overformula
Period, without notice or demand by Lender, together with interest and all other
amounts due thereon, in accordance with the provisions of this Amendment, the
Loan Agreement as amended hereby and the other Financing Agreements and (ii)
shall be secured by all of the Collateral (except for the Real Property of ORC
located in the State of New York).
(b) On the last day of the Overformula Period, the Overformula
Limit shall be reduced permanently to zero ($0), and, in accordance with the
Reunion/ORC Letter, Reunion shall make the Reunion February 1997 Subordinated
Loan to ORC for application to the Obligations to the extent and in the amount
required to repay in full the then outstanding amount of Overformula Loans (if
any).
(c) During the Overformula Period, but only so long as no Event of
Default has occurred, (i) the Overformula Limit shall be included under Section
1.24(a)(i) of the Loan Agreement in determining Excess Availability of ORC and
(ii) all outstanding Overformula Loans shall be included as outstanding
Obligations under Section 1.24(b)(i) of the Loan Agreement in determining Excess
Availability of ORC at any time during such period.
6. Inventory Sublimit. Effective upon consummation of the OMPC-NC
Merger, Section 3.1(a) of the Loan Agreement is hereby amended by deleting the
amount "$2,200,000" appearing in clause (B)(1) of Section 3.1(a)(ii) and
substituting therefor the amount "$3,000,000", replacing the word "or" appearing
at the end of Section 3.1(a)(ii) with the word "less", deleting Section
3.1(a)(iii) in its entirety, and renumbering Section 3.1(a)(iv) to be Section
3.1(a)(iii).
7. ORC Term Loan.
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(a) On the date hereof, upon consummation of the OMPC-NC Merger,
subject to the other terms and conditions contained herein and the other terms
and conditions of the Loan Agreement, Lender is making an additional, single
advance to ORC in the amount of $3,695,000, which advance, together with the
unpaid principal amount outstanding in respect of the ORC Term Loan as in effect
prior to this Amendment, plus the unpaid principal amount outstanding in respect
of the OMPC-NC Term Loan as in effect prior to this Amendment, shall all be
consolidated into a single loan, constituting the ORC Term Loan, which shall be
in the original principal amount of $9,271,025, which amount, together with
interest accrued and accruing thereon, is owed and shall be paid by ORC to
Lender, without offset, defense or counterclaim of any kind, nature and
description.
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(b) The ORC Term Loan shall be (i) evidenced by the Second Amended
and Restated ORC Term Note, executed and delivered by ORC to Lender concurrently
with the consummation of the OMPC-NC Merger, (ii) repaid, together with interest
and other amounts due thereunder in accordance with the terms and provisions of
the Second Amended and Restated ORC Term Note, the Loan Agreement and the other
Financing Agreements, and (iii) secured by all of the Collateral.
(c) None of the provisions of Section 7(a) hereof or elsewhere
contained herein and none of the provisions of the Second Amended and Restated
ORC Term Note, shall, in any manner, be construed to constitute payment of, or
impair, limit, cancel or extinguish or constitute a novation in respect of, any
of the outstanding Obligations arising in respect of the Term Loans under the
Loan Agreement or any of the other Financing Agreements, and the liens and
security interests securing such Obligations shall not in any manner be
impaired, limited, terminated, waived or released.
8. Use of Proceeds. ORC shall use the initial proceeds of the
Overformula Loans and the additional, single advance constituting a portion of
the ORC Term Loan as provided in Section 7 hereof only for the payment of the
QMP Purchase Price and the costs, expenses and fees in connection with this
Amendment and the transactions contemplated hereunder.
9. Ratification. Without limiting the acknowledgments,
confirmations and agreements of ORC contained in Section 7 hereof, ORC hereby
acknowledges, confirms, and agrees that upon consummation of the OMPC-NC Merger,
by operation of law, the OMPC-NC Merger Agreements and this Amendment:
(a) ORC, as the surviving corporation pursuant to the OMPC-NC
Merger, is and shall continue to be directly and primarily liable in all
respects for the Obligations of OMPC-NC arising prior to the effective time of
the OMPC-NC Merger.
(b) Lender has and shall continue to have valid and perfected
security interests, liens and rights in and to all of the assets and properties
of OMPC-NC, which ORC shall own and hold as the surviving corporation pursuant
to the OMPC-NC Merger and applicable laws, and which assets and properties shall
be deemed included in the Collateral, and such security interests, liens and
rights and their perfection and priority shall continue in all respects in full
force and effect; and
(c) Without limiting the generality of the foregoing, (i) the
OMPC-NC Merger shall in no way, limit, impair or adversely affect the
Obligations now or hereafter owed to Lender or any security interests or liens
in the assets and properties of ORC securing the same and (ii) the security
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interests, liens and rights of Lender in and to all of the assets and properties
of ORC, as the surviving corporation pursuant to the OMPC-NC Merger, shall
continue to secure all Obligations of OMPC-NC arising prior to the effective
time of the OMPC-NC Merger, in addition to all other existing and future
Obligations of ORC to Lender.
10. Indebtedness.
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(a) Effective upon the consummation of the OMPC-NC Merger, Section
10.10(d) of the Loan Agreement is hereby deleted in its entirety and replaced
with the following:
"(d) unsecured indebtedness of ORC, as the surviving corporation
of the OMPC-NC Merger, consisting of (x) a monthly credit support
fee owed to Xxxxxxx Xxxxxxx pursuant to the Credit Support Fee
Agreement, dated the date hereof, by and among ORC, OMPC-NC and
Xxxxxxx Xxxxxxx in a monthly amount not to exceed one twelfth of
one (1/12 of 1%) percent of the Principal Liability (as defined in
the Limited Guarantee) then in effect as provided in the Limited
Guarantee, and (y) a monthly credit support fee owed to Xxxxxxx
Xxxxxxx pursuant to the Supplemental Credit Support Fee Agreement,
dated November __, 1996, by and between ORC and Xxxxxxx Xxxxxxx in
a monthly amount not to exceed $833.33, all of which indebtedness
is subject to, and subordinate in right of payment to, the right
of Lender to receive the prior indefeasible payment in full of all
of the Obligations in accordance with a written subordination
agreement between Lender and Xxxxxxx Xxxxxxx in form and substance
satisfactory to Lender; provided, that: (i) ORC shall not,
directly or indirectly, make any payments in respect of such
indebtedness, including, but not limited to, any prepayments,
other than regularly scheduled monthly payments by ORC in
accordance with such Credit Support Fee Agreement as in effect on
the date hereof and such Supplemental Credit Support Fee Agreement
as in effect on the date of execution and delivery thereof and so
long as, in each case (A) no Event of Default or condition or
event which with notice or passage of time or both would
constitute an Event of Default has occurred or exists or would
occur or exist after giving effect to such payment and (B) ORC
shall have Excess Availability of not less than $1,000,000 for the
period of thirty (30) consecutive days immediately prior to making
and immediately after giving effect to and such
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payments, (ii) ORC shall not, directly or indirectly, (A) amend,
modify, alter or change any terms of such indebtedness or any
agreement, document or instrument related thereto, or (B) redeem,
retire, defease, purchase or otherwise acquire such indebtedness,
or set aside or otherwise deposit or invest any sums for such
purpose, and (iii) ORC shall furnish to Lender all notices,
demands or other materials concerning such indebtedness either
received by ORC or on irs behalf, promptly after receipt thereof,
or sent by ORC or on its behalf, concurrently with the sending
thereof, as the case may be;"
(b) Section 10.10 of the Loan Agreement is hereby amended by
deleting the word "and" at the end of Section 10.10(k), replacing the period
with a semicolon and adding the word "and" at the end of Section 10.10(l) and
adding new Sections 10.10(m) and 10.10(n) thereto as follows:
"(m) unsecured obligations of ORC to Xxxx evidenced by the Xxxx
Noncompetition Agreement; provided, that: (i) ORC shall not, directly
or indirectly, make any payments in respect of such obligations,
including, but not limited to, any payments or prepayments, of
principal, interest or other sums, other than regularly scheduled
payments when due in accordance with the Xxxx Noncompetition
Agreement, as in effect on the execution date thereof, (ii) ORC shall
not, directly or indirectly, (A) amend, modify, alter or change any
terms of such obligations or any agreement, document or instrument
related thereto, or (B) redeem, retire, defease, purchase or otherwise
acquire such obligations, or set aside or otherwise deposit or invest
any sums for such purpose, and (iii) ORC shall furnish to Lender all
notices, demands or other materials concerning such obligations either
received by Borrower or on its behalf, promptly after receipt thereof,
or sent by ORC or on its behalf, concurrently with the sending
thereof, as the case may be; and
"(n) unsecured indebtedness of ORC to Reunion consisting of (x)
the Reunion November 1996 Subordinated Loan evidenced by a
subordinated promissory note, dated November __, 1996, by ORC payable
to Reunion so long as all of the proceeds of such loan are used by ORC
to fund a portion of the QMP Purchase Price and (y) the Reunion
February 1997 Subordinated Loan (when and if made) to be evidenced by
a subordinated promissory note to be executed and delivered by ORC
payable to Reunion so long as the
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proceeds of such loan, when made, are used by or for the account of
ORC to repay the then outstanding amount of Overformula Loans (if any)
on the last day of the Overformula Period as provided in Section 5 of
Amendment No. 2 to Loan and Security, dated November __, 1996, between
Borrowers and Lender, and provided, that, in the case of the
indebtedness referred to in clauses (x) and (y), all of such
indebtedness is subject to, and subordinate in right of payment to,
the right of Lender to receive the prior indefeasible payment in full
of all of the Obligations in accordance with a written subordination
agreement between Lender and Reunion in form and substance
satisfactory to Lender; provided, further, that: (i) ORC shall not,
directly or indirectly, make any payments in respect of such
indebtedness, including, but not limited to, any payments or
prepayments, of principal, interest or other sums, other than
regularly scheduled monthly payments of interest accruing after the
date of the making of such loans in accordance with such subordinated
promissory notes to be executed and delivered to evidence such
indebtedness, each as in effect on the execution date thereof, so long
as (A) no Event of Default or condition or event which with notice or
passage of time or both would constitute an Event of Default has
occurred or exists or would occur or exist after giving effect to such
payment and (B) ORC shall have Excess Availability of not less than
$1,000,000 for the period of thirty (30) consecutive days immediately
prior to making and immediately after giving effect to such payment,
(ii) ORC shall not, directly or indirectly, (A) amend, modify, alter
or change any terms of such indebtedness or any agreement, document or
instrument related thereto, or (B) redeem, retire, defease, purchase
or otherwise acquire such indebtedness, or set aside or otherwise
deposit or invest any sums for such purpose, and (iii) ORC shall
furnish to Lender all notices, demands or other materials concerning
such indebtedness either received by ORC or on its behalf, promptly
after receipt thereof, or sent by ORC or on its behalf, concurrently
with the sending thereof, as the case may be."
11. Working Capital. Section 10.15 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"10.15 Working Capital". Borrowers shall, at all times,
maintain Working Capital, determined for ORC and its subsidiaries on a
consolidated basis, of not less than $1,450,000."
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12. Information Certificates and Schedules.
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(a) Upon the consummation of the OMPC-NC Merger, the Information
Certificate, dated February 2, 1996, of ORC and the Information Certificate,
dated February 2, 1996, of OMPC-NC, collectively attached as Exhibit A to the
Loan Agreement, are deleted in their entireties and replaced with the Amended
and Restated Information Certificate, dated the date hereof, of ORC attached
hereto as Exhibit A.
(b) Schedule 9.4 to the Loan Agreement is hereby amended by
including the additional information set forth on Exhibit B attached hereto and
Schedule 9.8 to the Loan Agreement is hereby amended by including the additional
information set forth on Exhibit C attached hereto.
13. Amendment Fee. In addition to all other fees, charges, interest
and expenses payable by Borrowers to Lender under the Financing Agreements,
Borrowers shall pay to Lender a fee for entering into this Amendment in the
amount of $50,000, which amount is fully earned and payable as of the date
hereof and may, at Lender's option, be charged directly to ORC's Revolving Loan
account maintained by Lender.
14. Additional Representations, Warranties and Covenants. Borrowers,
jointly and severally, represent, warrant and covenant with and to Lender as
follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof, and the truth and accuracy of,
or compliance with each, together with the representations, warranties and
covenants in the other Financing Agreements, being a continuing condition of the
making of any and all Loans by Lender to Borrowers and/or to ORC, as the
surviving corporation of the OMPC-NC Merger:
(a) No Event of Default or act, condition or event which with
notice or passage of time or both would constitute an Event of Default exists or
has occurred as of the date of this Amendment (after giving effect to the
amendments made and consents granted by Lender pursuant to this Amendment).
(b) This Amendment and each other agreement or instrument to be
executed and delivered by Borrowers hereunder has been duly executed and
delivered by Borrowers and is in full force and effect as of the date hereof,
and the agreements and obligations of Borrowers contained herein and therein
constitute legal, valid and binding obligations of Borrowers enforceable against
Borrowers in accordance with their terms.
(c) Neither the execution and delivery of the QMP Purchase
Agreements or the OMPC-NC Merger Agreements, nor the consummation of the
transactions contemplated by the QMP Purchase
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Agreements or the OMPC-NC Merger Agreements, nor compliance with the provisions
of the QMP Purchase Agreements or the OMPC-NC Merger Agreements or instruments
thereunder, as the case may be, shall result in the creation or imposition of
any lien, claim, charge or encumbrance upon any of the Collateral, other than
the lien of Lender pursuant hereto and the Loan Agreement and the other
Financing Agreements.
(d) The QMP Purchase Agreements and the transactions contemplated
thereunder have been duly executed, delivered and, contemporaneously herewith,
have been performed in accordance with their terms by the respective parties
thereto in all respects, including the fulfillment (not merely the waiver,
except as may be consented to in writing by Lender) of all conditions precedent
to the obligations of the parties to close the transactions contemplated
thereunder, and ORC has acquired and presently has good and marketable title to
the QMP Purchased Assets, free and clear of all claims, liens, pledges and
encumbrances of any kind, except as permitted under the Loan Agreement as
amended hereby.
(e) On or before the close of business on the date hereof, the
OMPC-NC Merger shall become effective in accordance with the terms of the OMPC-
NC Merger Agreements and the provisions of corporation statutes of the states of
New York and North Carolina, and ORC shall be the surviving corporation pursuant
to the OMPC-NC Merger Agreements and applicable law.
(f) All actions and proceedings required by the QMP Purchase
Agreements and the OMPC-NC Merger Agreements, applicable law or regulation
(including, but not limited to, if applicable, compliance with the Xxxx-Xxxxx-
Xxxxxx Anti-Trust Improvements Act of 1976, as amended) have been duly and
validly taken and have occurred, excluding, however, compliance with Article 6
of the North Carolina Uniform Commercial Code, if applicable, compliance with
which by QMP has been waived by ORC upon QMP's and Xxxx'x indemnification of ORC
for claims relating thereto as provided in the QMP Purchase Agreements (as in
effect on the date hereof).
(g) No court of competent jurisdiction has issued any injunction,
restraining order or other order which prohibits consummation of the
transactions described in the QMP Purchase Agreements or the OMPC-NC Merger
Agreements and no governmental or other action or proceeding has been threatened
or commenced, seeking any injunction, restraining order or other order which
seeks to void or otherwise modify the transactions described in or contemplated
by the QMP Purchase Agreements or the OMPC-NC Merger Agreements.
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(h) ORC has delivered, or caused to be delivered, to Lender, true,
correct and complete copies of the QMP Purchase Agreements and the OMPC-NC
Merger Agreements.
(i) Neither the execution and delivery of the QMP Purchase
Agreements or the OMPC-NC Merger Agreements nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof,
has violated or shall violate any federal or state securities laws or any other
law or regulation or any order or decree of any court or governmental
instrumentality in any respect (except for any non-compliance by QMP with
Article 6 of the North Carolina Uniform Commercial Code, if applicable, upon the
waiver by ORC of such compliance as described in Section 14(f) hereof) or does
or shall conflict with or result in the breach of, or constitute a default in
any respect under, any indenture, mortgage, deed of trust, security agreement,
lease, agreement or instrument to which ORC or OMPC-NC or, to ORC's knowledge,
QMP is a party or may be bound, or violate any provision of the Certificate of
Incorporation or By-Laws of ORC or, to ORC's knowledge, QMP, or, in the case of
the OMPC-NC Merger, violate any provision of the Certificate of Incorporation or
By-Laws of OMPC-NC.
(j) Within ninety (90) days from the date hereof, ORC agrees to
deliver to Lender, in form and substance satisfactory to Lender, evidence that
the Real Property of ORC located in Xxxxx City, North Carolina acquired pursuant
to the QMP Purchase Agreements is classified as an industrial zone under
applicable state and local laws of the State of North Carolina.
15. Conditions to Effectiveness of Amendment. The effectiveness of
the amendments and consents pursuant to this Amendment shall be subject to the
satisfaction of each of the following conditions precedent:
(a) Lender shall have received an executed original or executed
original counterparts of this Amendment (as the case may be), duly authorized,
executed and delivered by the respective party or parties hereto;
(b) Lender shall have received, in form and substance satisfactory
to Lender, evidence that the QMP Purchase Agreements and the OMPC-NC Merger
Agreements have been duly authorized, executed and delivered by and to the
appropriate parties thereto, that the transactions contemplated under the terms
and conditions of the QMP Purchase Agreements have been consummated prior to or
contemporaneously with the execution of this Amendment;
(c) Lender shall have received, in form and substance satisfactory
to Lender, all releases, terminations and such other documents as Lender may
request to evidence and
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effectuate the termination by BBT of its financing arrangements with ORC, as
assumed by ORC pursuant to the QMP Purchase Agreements, and the termination and
release by BBT of any interest in and to any assets and properties of QMP
constituting any of the QMP Purchased Assets, and of any interest in the assets
and properties of ORC, duly authorized, executed and delivered by BBT,
including, but not limited to, (i) UCC-3 Termination Statements for all UCC
Financing Statements previously filed by it, as secured party, and QMP, as
debtor, and (ii) satisfactions and discharges of any mortgages, deeds or trusts
or deeds to secured debt by QMP in favor of it covering any of the Real Property
located in Chatham County, North Carolina, in form acceptable for recording in
the appropriate governmental office located in Chatham County, North Carolina;
(d) Lender shall have received evidence, in form and substance
satisfactory to Lender, that the OMPC-NC Merger will be consummated by the close
of business on the date hereof.
(e) Lender shall have received, in form and substance satisfactory
to Lender, the Second Amended and Restated ORC Term Note, duly authorized,
executed and delivered by ORC;
(f) Lender shall have received, in form and substance satisfactory
to Lender, each duly authorized, executed and delivered (i) a Deed of Trust and
Security Agreement by ORC in favor of Xxxxxxx X. Xxxxxx, as trustee, for the
benefit of Lender with respect to the Real Property and related assets of ORC
acquired from QMP located in Chatham County, North Carolina, (ii) a Mortgage
Modification Agreement with respect to the Mortgage and Security Agreement,
dated February 2, 1996, by ORC in favor of Lender for filing in Tippecanoe
County, Indiana, and (iii) a Mortgage Modification Agreement with respect to the
Amended and Restated Mortgage and Security Agreement, dated February 2, 1996, by
ORC in favor of Lender for filing in Madison County, New York and Oswego County,
New York;
(g) Lender shall have received an environmental Phase I and Phase
II site report with respect to ORC's Real Property to be acquired from QMP and
located in Chatham County, North Carolina, conducted by an independent
environmental engineering firm acceptable to Lender, and in form, scope and
methodology satisfactory to Lender, confirming (i) that the past and present
operation, use and condition of such Real Property has been in compliance with
all material applicable Environmental Laws and (ii) the absence of any material
environmental problems;
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(h) Lender shall have received, in form and substance satisfactory
to Lender, a valid and effective title insurance policy and/or updating
endorsements issued by a company and agent acceptable to Lender (i) insuring the
priority, amount and sufficiency of the Mortgages, (ii) insuring against matters
that would be disclosed by surveys and (iii) containing any legally available
endorsements, assurances or affirmative coverage requested by Lender for
protection of its interests;
(i) Lender shall have received, in form and substance,
satisfactory to Lender, originals of the following, each duly authorized,
executed and delivered:
(i) a Supplemental Limited Guarantee by Xxxxxxx Xxxxxxx
with respect to the Obligations of ORC;
(ii) the Reunion Limited Guarantee;
(iii) the Reunion Indemnity Agreement; and
(iv) the Reunion/ORC Letter; and
(v) a Subordinated Promissory Note, dated of even date
herewith, by ORC payable to Reunion in the original principal amount of
$2,000,000 evidencing the indebtedness consisting of the Reunion November 1996
Subordinated Loan.
(j) Lender shall have received, in form and substance satisfactory
to Lender, (i) a letter agreement from Reunion in favor of Lender acknowledging
that each of the Reunion November 1996 Subordinated Loan and the Reunion
February 1997 Subordinated Loan (when and if made) shall be subordinated in
right of payment to the right of Lender to receive the prior indefeasible
payment in full of all of the Obligations pursuant to the Subordination
Agreement, dated February 2, 1996, between Lender and Reunion, as acknowledged
by Borrowers, duly authorized, executed and delivered by Reunion and Borrowers
and (ii) a letter agreement from Xxxxxxx Xxxxxxx in favor of Lender
acknowledging that the indebtedness consisting of the Supplemental Credit
Support Fee Agreement, dated of even date herewith, between ORC and Xxxxxxx
Xxxxxxx shall be subordinated in right of payment to the right of Lender to
receive the prior indefensible payment in full of all of the Obligations
pursuant to the Subordination Agreement, dated February 2, 1996, between Lender
and Xxxxxxx Xxxxxxx, as acknowledged by ORC, duly authorized, executed and
delivered by Xxxxxxx Xxxxxxx and ORC;
(k) Lender shall have received, in form and substance satisfactory
to Lender, (i) a favorable opinion of counsel for ORC addressed to Lender with
respect to the transactions contemplated by this Amendment, the QMP Purchase
Agreements and the OMPC-NC Merger Agreements, (ii) a favorable
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opinion of special North Carolina counsel for ORC addressed to Lender with
respect to the transactions contemplated by this Amendment, the QMP Purchase
Agreements and the OMPC-NC Merger Agreements, and (iii) a favorable opinion of
counsel for QMP and Xxxx addressed to ORC, upon which Lender is expressly
permitted to rely, with respect to the transactions contemplated by the QMP
Purchase Agreements;
(l) Lender shall have received, in form and substance satisfactory
to Lender, (i) a Collateral Assignment of Acquisition Agreements by ORC in favor
of Lender, duly authorized, executed and delivered by ORC providing for the
assignment of all of ORC's rights and remedies and claims for damages or other
relief under the QMP Purchase Agreements and granting Lender such other rights
with respect thereto, as Lender may require, and (ii) the agreement of QMP, Xxxx
and the Escrow Agent (as defined in the Purchase Agreements) consenting to the
Collateral Assignment of Acquisition Agreements by ORC to Lender duly
authorized, executed and delivered by QMP, Xxxx and the Escrow Agent;
(m) Lender shall have received, in form and substance satisfactory
to Lender, evidence that Lender has valid, perfected and first priority security
interests in and liens upon the QMP Purchased Assets;
(n) Lender shall have received, in form and substance satisfactory
to Lender, updates or amendments to the insurance certificates previously issued
by the insurance agent and/or insurance company in favor of Lender certifying to
Lender that the QMP Purchased Assets, including the Real Property located in
Chatham County, North Carolina, are covered by ORC's existing insurance policies
and loss payable and additional insured endorsements in favor of Lender;
(o) Lender shall have received, in form and substance satisfactory
to Lender, UCC-3 Termination Statement by Sunbeam with respect to UCC-1
Financing Statements previously filed against QMP and new UCC-1 Financing
Statements between ORC, as debtor, and Sunbeam, as secured party, filed with the
North Carolina Secretary of State and the Recorder of Deeds of Chatham County,
North Carolina;
(p) Lender shall have received evidence that ORC has qualified to
do business as a foreign corporation in the State of North Carolina;
(q) Lender shall have received evidence that QMP has filed an
amendment to its Certificate of Incorporation changing its name to a name
bearing no resemblance to Quality Molded Products, Inc.;
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(r) Lender shall have received, in form and substance satisfactory
to Lender, all consents, waivers, acknowledgments and other agreements from
third persons which Lender may deem necessary or desirable in order to permit,
protect and perfect its security interests and liens upon the Collateral or to
affect the provisions or purposes of this Amendment and the other Financing
Agreements;
(s) no material adverse change shall have occurred in the QMP
Purchased Assets or the business of QMP conducted with the QMP Purchased Assets
by QMP since the date of Lender's latest field examination of the QMP Purchased
Assets.
(t) all requisite corporate action and proceedings in connection
with this Amendment and the documents and instruments to be delivered hereunder
shall be in form and substance satisfactory to Lender, and Lender shall have
received all information and copies of all documents, including, without
limitation, records of requisite corporate action and proceedings which Lender
may have reasonably requested in connection therewith, such documents where
requested by Lender or its counsel to be certified by appropriate corporate
officers or governmental authorities;
(u) no Event of Default shall exist or have occurred and no event
or condition shall have occurred or exist which with notice or passage of time
or both would constitute an Event of Default;
(v) Lender shall have received, in form and substance satisfactory
to Lender, an agreement from Xxxxx Limited and Gain Technologies providing for,
among other things, the rights of ORC and Lender with respect to intellectual
property licensed to ORC by Gain Technologies and/or Xxxxx Limited and
Collateral consisting of or affected by such rights; and
(w) Lender shall have received, in form and substance satisfactory
to Lender, evidence of the payment by ORC of the QMP Purchase Price (subject to
adjustment as provided in the QMP Purchase Agreements) in consideration of the
purchase by ORC of the QMP Purchase Assets pursuant to the QMP Purchase
Agreements and the payment by ORC of an amount not to exceed $240,000 in payment
of the broker's fee payable to First Commercial Group upon closing of the
acquisition contemplated by the QMP Purchase Agreements, in each case as in
effect on the date hereof.
16. Indemnification. In addition to the indemnification by Borrowers
pursuant to Section 12.15 of the Loan Agreement, and, in addition to the rights
of Lender under the Reunion Indemnity Agreement and under the QMP Purchase
Agreements assigned as Collateral and without limiting Borrowers
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other Obligations in any manner, Borrowers hereby agree to indemnify and hold
Lender, and each of its present and future directors, officers, shareholders,
employees, agents, and their respective heirs, legal representatives, successors
and assigns, harmless from and against any and all losses, claims, damages,
costs or expenses, imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding commenced or
threatened in connection with or arising out of any actual or claimed failure by
ORC or QMP to comply with the provisions of Article 6 of the Uniform Commercial
Code of the State of North Carolina applicable to or claimed applicable to the
consummation of the transaction under the QMP Purchase Agreements.
17. Effect of this Amendment. This Amendment and the instruments and
agreements delivered pursuant hereto constitute the entire agreement of the
parties with respect to the subject matter hereof and thereof, and supersede all
prior oral or written communications, memoranda, proposals, negotiations,
discussions, term sheets and commitments with respect to the subject matter
hereof and thereof. Except as expressly amended pursuant hereto, and except for
the consents expressly set forth herein, no other changes or modifications to
the Financing Agreements or consents under any provisions thereof are intended
or implied, and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment shall
control.
18. Further Assurances. Borrowers and ORC, as the surviving
corporation of the OMPC-NC Merger, shall execute and deliver such additional
documents and take such additional action as may be reasonably requested by
Lender to effectuate the provisions and purposes of this Amendment.
19. Governing Law. The rights and obligations hereunder of each of
the parties hereto shall be governed by and interpreted and determined in
accordance with the internal laws of the State of New York (without giving
effect to principles of conflicts of laws).
20. Binding Effect. This Amendment shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors and
assigns.
21. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto.
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Please sign in the space provided below and return a counterpart of this
Amendment, whereupon this Amendment, as so agreed to and accepted, shall become
a binding agreement between Borrowers and Lender.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
[NAME APPEARS HERE]
By: ___________________________
Asst. Vice President
Title: ________________________
AGREED TO AND ACCEPTED:
ONEIDA ROSTONE CORP.
[NAME APPEARS HERE]
By: _________________________
Vice President
Title: ______________________
ONEIDA MOLDED PLASTICS, CORP.
OF NORTH CAROLINA
[NAME APPEARS HERE]
By: _________________________
Vice President
Title: ______________________
[SIGNATURES CONTINUE ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
CONSENTED TO AND ACKNOWLEDGED:
/s/ Xxxxxxx X. Xxxxxxx, Xx.,
______________________________
XXXXXXX X. XXXXXXX, XX.,
limited personal guarantor
REUNION INDUSTRIES, INC.,
limited corporate guarantor
By: /s/ Xxxxxxx X. Xxxxx
_________________________
XXXXXXX X. XXXXX
Title: Executive Vice President
________________________
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