EXHIBIT 4(a)(iii)
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of June 2, 2000, is
made by and between ONEIDA LTD., a New York business corporation with an address
at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 ("Borrower"") and ALLIANCE BANK,
N.A., a national banking association with an address at 000 Xxxx Xxxxxx, Xxxxxx,
Xxx Xxxx 00000 (the "Bank").
In consideration of the mutual covenants and agreements contained
herein, Borrower and the Bank agree as follows:
SECTION 1
SECTION 1.01. Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agreement" means this Agreement dated as of June 2, 2000 between Borrower and
the Bank.
"Applicable Margin" means for any day the Applicable Margin (expressed in terms
of basis points (bps)) as determined according to the applicable level ("Level")
as indicated by the following grid, with such Level to be determined on the
basis of the Consolidated Leverage Ratio of Borrower and its consolidated
Subsidiaries as of the last day of each Fiscal Quarter of the Borrower as
reflected on the financial statements for such Fiscal Quarter delivered by the
Borrower pursuant to Section 5.01(b):
--------------------------- ------------ ------------ ------------ -------------
Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0
--------------------------- ------------ ------------ ------------ -------------
Consolidated Leverage <=2.0 <=2.5 <=3.0 > 3.0
Ratio
--------------------------- ------------ ------------ ------------ -------------
Eurodollar Margin (bps) 110.0 130.0 150.0 170.0
--------------------------- ------------ ------------ ------------ -------------
provided that (i) during the period from the Closing Date through and including
the date on which Borrower delivers the financial statements under Section
5.01(b) for the Fiscal Quarter ending July 29, 2000, the Applicable Margin shall
be based on Xxxxx 0, and (ii) if the Borrower shall have failed to deliver the
financial statements required by Section 5.01(b) when due (without giving effect
to any grace period or notice requirement) or there shall have occurred an Event
of Default which has not been waived by the Bank, the Applicable Margin shall
immediately be adjusted to Level 6 until such time delivery of such financial
statements shall have been made or the Event of Default shall have been cured or
waived, as the case may be. Each change in the Applicable Margin shall be
effective on the first Business Day following delivery of the most recent
financial statements pursuant to Section 5.01(b) subject to the proviso set
forth in the preceding sentence.
"Bank" shall mean and refer to Alliance Bank, N.A. and its successors and
assigns.
"Board" means the Board of Governors of the Federal Reserve System of the United
States of America.
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"Borrower" means Oneida Ltd., a New York corporation.
"Borrowing" shall have the meaning set forth in Section 2.01(c) of this
Agreement.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Business Combination" means a reorganization, merger, consolidation or other
transaction involving a combination of Borrower with another Person accomplished
in any manner.
"Capital Lease Obligations" of any Person means the obligations of such 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 in Control" means a change in control of the Borrower of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act, whether or not the Borrower
is then subject to such reporting requirement; provided however, that, anything
in this Agreement to the contrary notwithstanding, a Change in Control shall be
deemed to have occurred if:
(a) any individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity or person, or any syndicate or group
deemed to be a person under Section 14(d)(2) of the Exchange Act is or becomes
the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), directly or indirectly, of securities of
the Borrower representing 20% or more of the combined voting power of the
Borrower's then outstanding securities entitled to vote in the election of
directors of the Borrower'
(b) during any period of two consecutive years (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constituted the Borrower's Board of Directors and any new directors,
whose election by the Board or nomination for election by the Borrower's
stockholders was approved by a vote of at least three-fourths of the directors
then still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved cease for
any reason to constitute a majority thereof;
(c) there occurs a Business Combination with respect to which the
stockholders of the Borrower immediately prior to such transaction do not
immediately after such transaction, own directly or indirectly more than 50% of
the combined voting power of the Borrower or other Person resulting from such
Business Combination in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the voting securities of the
Borrower;
(d) all or substantially all of the assets of the Borrower are sold,
liquidated or distributed; or
(e) there occurs a transaction that constitutes a change in the (i)
ownership of the Borrower, (ii) effective Control of the Borrower or (iii)
effective ownership of a substantial portion of the assets of the Borrower, as
determined pursuant to Code Section 280G and the regulations promulgated
thereunder.
"Change in Law" means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by the Bank with any request, guideline
or directive (whether or not having the force of law) of any Governmental
Authority made or issued after the date of this Agreement.
"Closing Date" means the date of the Note.
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"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Consolidated EBITDA" means, 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 Borrower and its consolidated
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 Borrower and its Subsidiaries for any period, the Consolidated
EBITDA of any Person acquired by the Borrower or its 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 (i) have been provided to the Bank and (ii) either (A) have
been reported on without a qualification arising out of the scope of the audit
by independent certified public accountants of nationally recognized standing or
(B) have been found acceptable by the Bank.
Consolidated Interest Coverage Ratio" means, 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" means, for any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries, as determined in accordance with GAAP.
"Consolidated Leverage Ratio" means, 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" means, for any period, the gross revenues of the
Borrower and its 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:
(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 Subsidiary accrued prior to the date
it became a 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 Subsidiary),
substantially all the assets of which have been acquired in any manner by the
Borrower or any 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 Subsidiary)
with which the Borrower or a Subsidiary shall have consolidated or which shall
have merged into or with the Borrower or a 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;
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(f) net earnings of any Person (other than a Subsidiary) in which the
Borrower or any Subsidiary has an ownership interest unless such net earnings
shall have actually been received by the Borrower or such Subsidiary in the form
of cash distributions or readily marketable securities;
(g) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to the Borrower or any other
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
Borrower or any 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" means, at any date, all amounts which would, in
accordance with GAAP, be included on a consolidated balance sheet of the
Borrower and its Subsidiaries under stockholders' equity at such date.
"Consolidated Total Debt" means, at any date, the aggregate principal amount of
all Indebtedness of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
"Disclosed Matters" means the actions, suits, proceedings, title defects and
other matters disclosed in Schedule 3.06.
"Dollars" or "$" refers to lawful money of the United States of America.
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
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"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043 of
ERISA or the regulations issued thereunder with respect to a Plan (other than an
event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to the Loan, refers to whether the Loan is
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time.
"Executive Officer" means the Chief Executive Officer, General Counsel or any
Financial Officer of Borrower.
"Excluded Taxes" means, with respect to the Bank or any other recipient of any
payment to be made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by the jurisdiction under the laws of which such
recipient is organized or in which its principal office is located and (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction in which the Borrower is located.
"Federal Funds Effective Rate" means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Bank from three Federal funds brokers of recognized standing
selected by it.
"Financial Officer" means the chief financial officer, senior vice president --
finance, principal accounting officer, treasurer or controller of the Borrower.
"Fiscal Quarter" or "Fiscal Year" means the fiscal quarter or fiscal year of
Borrower.
"GAAP" means generally accepted accounting principles in the United States of
America.
"Governmental Authority" means the government of the United States of America,
any other nation or any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor,
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direct or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase (or
to advance or supply funds for the purchase of) any security for the payment
thereof, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness or other obligation of the
payment thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation or (d)
as an account party in respect of any letter of credit or letter of guaranty
issued to support such Indebtedness or obligation; provided, that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all items of
borrowed money (including, without limitation, Capital Lease Obligations and the
deferred purchase price of property or services other than current accounts
payable arising in the ordinary course of business), 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, (b) all Guarantees, 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 (c) all items of borrowed money secured by any mortgage, pledge or
Lien existing on property owned by such Person whether or not the borrowed money
secured thereby shall have been assumed by such Person.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Interest Period" means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is two weeks or one, two, three or
six months thereafter, as the Borrower may elect.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Bank from time to
time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, as
the rate for dollar deposits with a maturity comparable to such Interest Period.
In the event that such rate is not available at such time for any reason, then
the "LIBO Rate" with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London
office of the Bank in immediately available funds in the London interbank market
at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien,
pledge, hypothecation, encumbrance, charge or security interest in, on or of
such asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan" shall mean and refer to the Term Loan.
"Loan Documents" or "Credit Documents" shall mean this Agreement, the Term Note
and any ISDA Master Agreement which is or may hereafter be entered into by the
Borrower with respect to the Term Loan.
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"Material Adverse Effect" means a material adverse effect on (a) the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Borrower
to perform any of its obligations under this Agreement or (c) the rights of or
benefits available to the Bank under this Agreement.
"Material Domestic Subsidiary" means any Subsidiary of the Borrower which is
incorporated in any state or other jurisdiction of the United States of America
and whose assets, as of the end of the most recent Fiscal Quarter, account for
5% or more of the total assets of the Borrower and its Subsidiaries, taken as a
whole, determined in accordance with GAAP.
"Material Indebtedness" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$5,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
"Note" shall mean the Term Note.
"Notice" or "notice" shall mean wherever used in this Agreement, written notice
delivered as specified in Section 6.4 of this Agreement.
"Other Taxes" means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in
ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Section 7.01; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
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detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum announced from time to time by
Alliance Bank, N.A. as its prime rate in effect at its principal office,
regardless of whether such rate is the lowest rate actually charged by such Bank
on commercial borrowings; each change in the Prime Rate shall be effective from
and including the date such change is announced as being effective.
"Related Parties" means, with respect to any specified Person, such Person's
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person's Affiliates.
"Repricing Notice" shall mean the notice delivered by the Borrower to the Bank
as provided in Section 2.1(c) of this Agreement in order to select either the
Alternate Base Rate or the Adjusted LIBO Rate in each case plus the Applicable
Margin and with respect to an Adjusted LIBO Rate Borrowing, an Interest Period.
"S&P" means Standard & Poor's.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Bank is subject, with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be
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available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" means, with respect to any Person (the "parent") at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subordinated Debt" means all Indebtedness of Borrower or its Subsidiaries
subordinated in right of payment to Indebtedness arising under this Agreement by
written terms or agreement in form and substance satisfactory to the Bank.
"Tableware Business" means the business of (a) designing, manufacturing,
licensing, importing, selling, marketing, distributing or otherwise dealing in
tableware, kitchenware, and giftware, including but not limited to, dinnerware,
flatware, hollowware, giftware, glassware, crystal, stemware, cutlery, cookware,
table linens, kitchen, table or bar utensils and gadgets, and minor kitchen
appliances and equipment, and (b) licensing Borrower's name for use on toys.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Term Loan" shall mean the Four Million Five Hundred Thousand Dollars
($4,500,000) Term Loan provided for in Section 2.01 of this Agreement and
evidenced by the Term Note.
"Term Note" shall mean and refer to the amended and restated note in the form
attached hereto as Schedule 2.01(c) executed and delivered by the Borrower to
the Bank to evidence the Borrower's obligations to repay Term Loan.
"Transactions" means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of the Loan and the use of the proceeds thereof.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are
defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. 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, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
9
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Bank that the Borrower requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
ARTICLE II
THE LOAN
2.01 TERM LOAN.
(a) Loan Amount and Purpose. The Term Loan amount shall be Four Million
Five Hundred Thousand Dollars ($4,500,000) which amount is the unpaid principal
balance of the Borrower's note dated July 28, 1999.
(b) Term Loan Interest Rate. The Borrower shall repay the Term Loan
with interest at either the Alternate Base Rate or the Adjusted LIBO Rate in
either case plus the Applicable Margin. With respect to any Borrowing based on
the Adjusted LIBO Rate, the Borrower agrees that the Borrower will submit to the
Bank the Borrower's Repricing Notice not later than two (2) London Banking Days
preceding the date on which an Interest Period ends and the interest rate is to
be reset. In its Repricing Notice, the Borrower may elect up to three (3)
different Interest Periods with respect to up to three (3) tranches of the Loan
(each, a "Borrowing"), provided that no Borrowing may be less than One Million
Dollars ($1,000,000). In the event Borrower timely elects more than one
Borrowing, scheduled payments of principal received by the Bank shall be applied
by the Bank to reduce the principal balance of each Borrowing on a per capita
basis.
(c) Term Loan Repayment. The Term Loan shall be repaid under a Term
Note in substantially the form attached hereto and made a part hereof as
Schedule 2.01(c) which note replaces and restates the Borrower's note dated July
28, 1999 in the original principal amount of Five Million Dollars ($5,000,000).
(d) Prepayment.
(i) The Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with (ii) of this subsection and the payment of the amounts provided
in (ii) of this subsection.
(ii) The Borrower shall notify the Bank by telephone (confirmed by
telecopy) of any prepayment hereunder not later than 11:00 a.m. New York City
time, three (3) Business Days before the prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
the Borrowing or portion thereof to be prepaid, and in the event of the payment
of any principal of any Eurodollar Borrowing other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), then in any such event, the Borrower shall compensate the Bank for the
loss, cost and expense attributable to such event, such loss, cost or expense to
the Bank shall be deemed to include an amount determined by the Bank to be the
excess if any (X) the amount of interest which would have accrued on the
principal amount of such Borrowing had such event not occurred, at the Adjusted
LIBO Rate but would have been applicable to such Borrowing to the period from
the date of such event to the last day of the then current Interest Period
thereof, or (Y) the amount of interest which would accrue on such principal
amount for such period at the interest rate which the Bank were to bid, at the
commencement of such period for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate by the Bank
setting forth any amount or amounts that the Bank is entitled to receive
pursuant to this subsection shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay to the Bank the amount
shown as due on such certificate within ten (10) days after the receipt thereof.
10
(e) Default Interest Rate. Notwithstanding anything to the contrary in
this Agreement, if any principal of or interest on any Borrowing or any fee or
other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to in the
case of overdue principal of any borrowing, two percent (2%) plus the rate
otherwise applicable to such borrowing as provided in this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its Subsidiaries is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has all requisite power and authority to own
or lease its assets and carry on its business as now conducted and, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within the
Borrower's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower, and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, except such as have been obtained or made
and are in full force and effect, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or any order of any Governmental Authority,
(c) will not violate or result in a default under any indenture, agreement or
other instrument binding upon the Borrower or any of its Subsidiaries or its
assets, or give rise to a right thereunder to require any payment to be made by
the Borrower or any of its Subsidiaries, and (d) will not result in the creation
or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to the Bank its consolidated
balance sheet and statements of income, stockholders equity and cash flows as of
and for the Fiscal Year ended January 29, 2000, reported on by
PriceWaterhouseCoopers LLP, independent public accountants. Such financial
statements present fairly, in all material respects, the financial position and
results of operations and cash flows of the Borrower and its consolidated
Subsidiaries as of such dates and for such periods in accordance with GAAP.
(b) Since January 29, 2000, there has been no material adverse change
in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole, and no sale,
transfer or other disposition of a material part of the assets or business of
Borrower or any Subsidiary.
SECTION 3.05. Properties.
(a) Each of the Borrower and its Subsidiaries has good title to, or
valid leasehold interests in, all its real and personal property material to its
business, except for Disclosed Matters and minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and
11
its Subsidiaries does not infringe upon the rights of any other Person, except
for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Borrower, threatened against or affecting the Borrower or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve this Agreement or the
Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability, (iv) knows of any basis for any Environmental
Liability, or (v) is subject to any decree, consent order or other
administrative order arising under any Environmental Law. Except for the
Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, no real estate currently or formerly owned or leased
by the Borrower or any of its Subsidiaries contains, is subject to, affected by,
or contaminated with, Hazardous Materials, except Hazardous Materials used,
stored and transported in accordance with Environmental Laws.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the Borrower nor
any of its Subsidiaries is (a) an "investment company" as defined in, or subject
to regulation under, the Investment Company Act of 1940 or (b) a "holding
company" as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely filed
or caused to be filed all Tax returns and reports required to have been filed
and has paid or caused to be paid all Taxes required to have been paid by it,
except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected to
occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Bank all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. To the actual knowledge of the Executive Officers of the
Borrower, neither the Information Memorandum nor any of the other reports,
financial statements, certificates or other information furnished by or on
behalf of the Borrower to the Bank in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the
12
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Liens. None of the assets or properties of the Borrower or any of
its Subsidiaries is subject to any Lien other than Permitted Encumbrances, and
Liens existing as the date hereof and disclosed on Schedule 3.12.
SECTION 3.13. Subsidiaries. The Persons listed on Schedule 3.13 constitute all
the Subsidiaries of the Borrower. Such Schedule identifies the state or country
of organization of each such Subsidiary and the percentage ownership of such
Subsidiary directly or indirectly owned by the Borrower, the number of
authorized and outstanding shares of capital stock, and whether such Subsidiary
constitutes a Material Domestic Subsidiary. Except as set forth on Schedule
3.13, there are no pre-emptive rights with respect to the capital stock of such
Subsidiaries and no options, warrants or other rights to acquire the capital
stock of any such Subsidiary, and no securities convertible into such capital
stock.
SECTION 3.14. No Default. Neither the Borrower nor any of its Subsidiaries is in
default under or with respect to any Indebtedness or indenture, agreement or
other instrument to which such Person is a party or by which it or any of its
property is bound in any respect which could reasonably be expected to have a
Material Adverse Effect.
ARTICLE IV
CONDITIONS
SECTION 4.01. Effective Date. This Agreement shall become effective as of the
date of its execution and delivery by the Borrower and the Bank's receipt of the
Term Note in the form attached hereto as Schedule 2.01(c) executed and delivered
by the Borrower.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the principal of and interest on the Loan and all fees payable
hereunder shall have been paid in full, the Borrower covenants and agrees with
the Bank that:
SECTION 5.01. Financial Statements; Other Information. The Borrower will furnish
to the Bank:
(a) Within ninety (90) days after the end of each Fiscal Year of the
Borrower, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all reported on by PriceWaterhouseCoopers LLP or other
independent public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) Within forty-five (45) days after the end of each Fiscal Quarter of
the Borrower (including the fourth Fiscal Quarter), its consolidated balance
sheet and related statements of operations, stockholders' equity and cash flows
as of the end of and for such Fiscal Quarter and the then elapsed portion of the
Fiscal Year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous Fiscal Year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) on or before the commencement of each Fiscal Year of the Borrower,
a copy of the budget of the Borrower and its Subsidiaries for such Fiscal Year;
13
(d) concurrently with any delivery of financial statements under clause
(a) or (b) above, a certificate of a Financial Officer of the Borrower (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Section 6.11 and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(e) concurrently with any deliver of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials (i) filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission, or
any Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange as the case may be, or (ii)
delivered by the Borrower to its stockholders or to holders of its Indebtedness
(or any trustee, agent, or other representative therefor);
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Bank may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to the Bank
prompt written notice of the following promptly after the same becomes known to
an Executive Officer:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;
(d) receipt of any claim made by a Person, including any Governmental
Authority, asserting that the Borrower or any Subsidiary is in violation of any
Environmental Law, or the occurrence of any event which could give rise to an
Environmental Liability, in each case if the effect thereof could reasonably be
expected to result in a Material Adverse Effect; and
(e) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay its obligations, including Tax liabilities, that, if
not paid, could result in a Material Adverse Effect before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith, (b)
14
the Borrower or such Subsidiary has set aside on its books adequate reserves
with respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries are made of all dealings and transactions
in relation to its business and activities. The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the Bank,
upon reasonable prior notice and during normal business hours, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested, subject to the provisions of Section 8.21 hereof.
SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property (including, without
limitation, all Environmental Laws) except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loan have been used only for
general corporate purposes of the Borrower and its subsidiaries in the ordinary
course of business, including refinancing of existing debt and permitted
acquisitions. No part of the proceeds of any Loan have been used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.
ARTICLE VI
NEGATIVE COVENANTS
Until the principal of and interest on the Loan and all fees payable
hereunder have been paid in full, the Borrower covenants and agrees with the
Bank that:
SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness, except
Indebtedness of the following nature which is otherwise permitted under Section
6.11 hereof:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Schedule
6.01 and extensions, renewals and replacements of any such Indebtedness that do
not increase the outstanding principal amount thereof;
(c) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness permitted under this
Agreement of any Subsidiary and by any Subsidiary of Indebtedness permitted
under this Agreement of the Borrower or any other Subsidiary;
(e) Indebtedness of the Borrower or any Subsidiary incurred to finance
the acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 180
days after such acquisition or the completion of such construction or
improvement, (ii) the amount of such Indebtedness does not
15
exceed the cost of such acquisition, construction or improvement, and (iii) the
aggregate principal amount of Indebtedness permitted by this clause (e) shall
not exceed $25,000,000 at any time outstanding;
(f) Indebtedness of any Person that becomes a Subsidiary after the date
hereof; provided that (i) such Indebtedness exists at the time such Person
becomes a Subsidiary and is not created in contemplation of or in connection
with such Person becoming a Subsidiary and (ii) the principal amount of such
Indebtedness, when added to other Indebtedness of Borrower and its Subsidiaries,
does not violate subparagraphs (e) or (i) of this Section;
(g) unsecured Indebtedness of the Borrower; and
(h) unsecured Indebtedness of the Borrower's Subsidiaries which does
not exceed, in the aggregate, $25,000,000 outstanding at any time, exclusive of
unsecured Indebtedness of Subsidiaries listed on Schedule 6.01.
SECTION 6.02. Liens. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Lien on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any Subsidiary
existing on the date hereof and set forth in Schedule 3.12; provided that (i)
such Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
(c) any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any property or asset
of any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary , as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided that (i) such security interests
secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
180 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary; and
SECTION 6.03. Fundamental Changes.
(a) The Borrower will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions), or engage in a
sale/leaseback transaction with respect to, any substantial part of its assets,
any trade receivables (other than an assignment in connection with the
collection thereof in the ordinary course of business), or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary/Person may merge into the Borrower
in a transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary/Person may merge into any Subsidiary in a transaction in which the
surviving entity is a Subsidiary, (iii) any Subsidiary may sell, transfer, lease
or otherwise dispose of its assets to the Borrower or to another Subsidiary,
(iv) any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and the assets of such Subsidiary are distributed to Borrower in
liquidation or dissolution, provided that any such merger involving a Person
that is not a wholly owned Subsidiary
16
immediately prior to such merger shall not be permitted unless also permitted by
Section 6.04, and (v) Borrower and its Subsidiaries may sell, transfer, or
otherwise dispose of (in one transaction or a series of transactions), or engage
in a sale/leaseback transaction with respect to, assets if the consideration
received is in cash or cash equivalents at least equal to the fair market value
of such assets and the aggregate consideration received does not exceed
$15,000,000 for all such sales, transfers, or dispositions.
(b) The Borrower will not, and will not permit any of its Subsidiaries
to, engage to any material extent in any business other than the Tableware
Business.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except Borrower and its Subsidiaries may
engage in transactions of the following nature so long as no Default or Event of
Default exists or would be created as a result thereof:
(a) Permitted Investments;
(b) investments by the Borrower existing on the date hereof in the
capital stock of its Subsidiaries and in Xxxxxx Zwiesel Glaswerke, AG;
(c) loans or advances made by the Borrower to any Subsidiary and made
by any Subsidiary to the Borrower or any other Subsidiary;
(d) Guarantees constituting Indebtedness permitted by Section 6.01;
(e) repurchases or redemptions of the capital stock of Borrower
permitted by applicable law;
(f) purchases or acquisitions of (whether by merger, consolidation,
purchase, share exchange or otherwise), or investments in, the assets or capital
stock of another Person, provided that if, after giving effect to the proposed
purchase, acquisition or investment the Borrower is not in violation of Section
6.11(b) of this Agreement as of the most recent reported fiscal quarter.
SECTION 6.05. Hedging Agreements. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any Hedging Agreement, other than Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Borrower or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities; provided that the maximum
aggregate amount (after giving effect to any netting agreements) that the
Borrower and its Subsidiaries would be required to pay under all such Hedging
Agreements if such Hedging Agreements were terminated at any time shall not
exceed $5,000,000.
SECTION 6.06. Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, or (b)
transactions between or among the Borrower and its wholly owned Subsidiaries not
involving any other Affiliate.
SECTION 6.07. Restrictive Agreements. The Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, enter into, incur or permit
to exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary; provided that (i) the
foregoing shall not apply to
17
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.07 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), and (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder.
SECTION 6.08. Fiscal Year and Accounting Policies. The Borrower shall not make
any change in its Fiscal Year or change its accounting policies or practices
from those in effect on the Closing Date, except to the extent such change is
required by GAAP.
SECTION 6.09. Subordinated Debt. The Borrower shall not, and will not permit any
of its Subsidiaries to, modify the terms of any Subordinated Debt or to pay any
principal of, interest on, or other amount in respect of, Subordinated Debt
other than scheduled payments of principal and interest on Subordinated Debt if
and to the extent permitted under the terms of a written subordination agreement
executed and delivered by the subordinated creditor containing terms acceptable
to the Bank.
SECTION 6.10. Negative Pledges. The Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into any agreement which prohibits or limits the
ability of Borrower or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired, except operating leases, purchase money Liens
or Capital Lease Obligations permitted by this Agreement containing such a
prohibition or limitation solely as to the assets financed thereby.
SECTION 6.11. Financial Covenants. The Borrower shall not:
(a) for a period of four consecutive Fiscal Quarters ending with its
most recent Fiscal Quarter, permit the Consolidated Interest Coverage Ratio of
the Borrower and its Subsidiaries to be less than 3.0 to 1.0;
(b) permit the Consolidated Leverage Ratio of the Borrower and its
Subsidiaries to be greater than (i) 3.0 to 1.0 as of the last day of the Fiscal
Quarter ending April 29, 2000 (provided that solely for the purpose of
determining compliance herewith under Section 6.04(f), the Consolidated Leverage
Ratio for the Fiscal Quarter ending April 29, 2000 shall not exceed 3.25 to
1.0), (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; and
(c) as of the last day of any Fiscal Quarter, permit Consolidated Net
Worth of the Borrower and its consolidated Subsidiaries to be less than the sum
of (i) $125,000,000, plus (ii) 50% of the Consolidated Net Income of Borrower
and its Consolidated Subsidiaries (which for the purposes of this covenant shall
not be reduced by losses) for the Fiscal Year ending January 27, 2001 and for
each Fiscal Year thereafter.
SECTION 6.12. Letters of Credit. The Borrower will not, and will not permit any
Subsidiary to, become an account party in respect of, or otherwise incur
obligations under, any letters of credit except obligations in respect of (i)
trade letters of credit in an amount not to exceed $20,000,000 in the aggregate
and (ii) standby letters of credit in an amount not to exceed $20,000,000 in the
aggregate.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. If any of the following events ("Events of
Default") shall occur:
(a) the Borrower shall fail to pay any principal of the Loan when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on the Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Section) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
18
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect in any material respect when made
or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02, 5.03 (with respect to the
Borrower's existence) or 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Section), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Bank to the
Borrower (which notice will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, within three Business Days of the date the same shall
become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $1,500,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
19
(m) a Change in Control shall occur; or
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Section), and at any time thereafter
during the continuance of such event, the Bank may, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) declare the Loan to be due and payable in whole (or in part, in which case
any principal not so declared to be due and payable may thereafter be declared
to be due and payable), and thereupon the principal of the Loan, together with
accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
MISCELLANEOUS
8.01. Survival of Provisions. All agreements, covenants, provisions,
representations, warranties and undertakings made herein shall survive the
execution and delivery of this Agreement, the execution and delivery of all
other Credit Documents and the making of the Loan.
8.02. Failure or Indulgence Not a Waiver. No failure or delay on the part of the
Bank or any holder of the any Note in the exercise of any power, right, remedy
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right, remedy or privilege preclude other
or further exercise thereof, or of any other right, power, remedy or privilege.
All rights, powers, remedies and privileges existing under this Agreement and
the other Credit Documents are cumulative to, and not exclusive of, any rights
or remedies otherwise available to the Bank, all of which rights and remedies
may be exercised by the Bank, singly or in combination and in such order or
sequence as the Bank, in its sole discretion, may elect.
8.03. Waiver/Modification. Neither this Agreement nor any Credit Document nor
any provision in any of them may be amended, waived or modified in any manner,
absent the execution and delivery of a writing by the Bank intended for such
purpose.
8.04. Notices. Except as otherwise expressly provided herein or in any other
Credit Document, any notice required or permitted to be given, shall be deemed
to have been duly given if personally delivered, delivered by an overnight
courier service or mailed by certified mail return receipt requested, postage
and registry fees prepaid in the event of mailing, and in all events addressed
to the party to receive such notice at the address for such party set forth at
the beginning of this Agreement. By notice, any party may change the address to
which further notices shall be sent. All notices shall be deemed given when
mailed or delivered in the manner provided in this Section, except that a notice
changing the address to which future notices shall be sent shall be effective
only on actual receipt (or refusal of delivery) by the party to whom such notice
is addressed.
8.05. Severability. In the event any provision of this Agreement or any other
Credit Document shall be finally held by a court of competent jurisdiction to be
invalid, illegal or unenforceable, such provision shall be severed from the
remainder of this Agreement or such other Credit Document, as the case may be,
and the validity, legality and enforceability of the remaining provisions of
this Agreement and the other Credit Documents shall in no way be affected or
impaired thereby.
8.06. Applicable Law. This Agreement, the other Credit Documents and the rights
and obligations of the parties hereto and thereto, shall in all respects be
governed by and enforced under and in accordance with the laws of the State of
New York, exclusive of New York's Conflicts of Law rules and public policies.
8.07. Assignability. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns, and shall inure to the benefit of the
Bank and its successors and assigns. Borrower may not assign, in whole or in
part, any of its rights under this Agreement.
20
8.08. Section and Subsection Headings. The various headings used in this
Agreement and the division of the Agreement into sections and subsections are
for convenience of reference only, do not form a part of this Agreement and
shall not affect the meaning or interpretation of this Agreement or any
provision hereof.
8.09. Further Assurances. At any time or from time to time upon the request of
the Bank, Borrower shall execute and deliver such further documents and do such
other acts and things as the Bank may reasonably request in order to effect
fully the purposes of the Credit Documents and to provide for the payment of the
Loan and interest thereon. Further, upon receipt of an affidavit of an officer
of the Bank as to the loss, theft, destruction or mutilation of the Note or any
other Credit Document which is not of public record, and in the case of any such
loss, theft, destruction or mutilation, upon surrender and cancellation of the
Note or other Credit Document, Borrower, will issue in lieu thereof, a
replacement Note or other Credit Document in the same principal amount thereof
in the case of the Note and otherwise of like tenor.
8.10. Entire Agreement. This Agreement (including any Schedules) and the other
Credit Documents and any other instruments executed by Borrower in connection
with this Agreement, taken together constitute the entire agreement between the
parties and supersede all prior or contemporaneous negotiations, agreements and
understandings, all of which are merged into this Agreement and the other Credit
Documents.
8.11. Payments on Business Days. Whenever any payment to be made under this
Agreement or under a Note is due on a day other than a day on which the Bank is
open for business, the payment shall be made on the immediately following
Business Day.
8.12. No Usury. All agreements between the Borrower and the Bank are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the Loan or otherwise, shall the amount
paid or agreed to be paid to the Bank for the use or forebearance of the Loan
indebtedness exceed the maximum permissible under applicable law. As used
herein, the term "applicable law" shall mean the law in effect as of the date of
this Agreement provided, however, that in the event that there is a change in
the law which results in a higher permissible rate of interest, then this
Agreement and the other Credit Documents and the Loan shall be governed by such
new law as of its effective date. In this regard it is expressly agreed that it
is the intent of the Borrower and the Bank in the execution, delivery and
acceptance of this Agreement, the Notes and the other Credit Documents to
contract in strict accordance with the laws of the State of New York from time
to time in effect. If, under or from any circumstance whatsoever, fulfillment of
any provision of this Agreement or of any of the other Credit Documents at the
time performance of such provision shall be due, shall involve transcending the
limit of such validity prescribed by applicable law, then the obligation to be
fulfilled shall be automatically reduced to the limits of such validity, and if,
under or from any circumstance whatsoever the Bank should ever receive as
interest an amount which would exceed the highest lawful rate, such amount which
would be excessive interest shall be applied to the reduction of the principal
balance of the Loan and not to the payment of interest. This provision shall
control every other provision of all agreements between the Borrower and the
Bank.
8.13. Bank Entitled to Rely. The Bank shall be entitled to rely on all
information, financial or otherwise, delivered to the Bank by Borrower or by any
Person authorized by Borrower to deliver same, irrespective of any investigation
or inquiry that the Bank has or could have made, or which the Bank may in the
future makes or could make.
8.14. Certain Rules of Construction. Wherever possible, the terms and provisions
of which Agreement, the Note and each other Credit Document, shall be read and
construed as being consistent. However, if notwithstanding the foregoing
directive, any provision in this Agreement conflicts with a provision in the
Note or in any other Credit Document, then the provision affording to the Bank
the greatest right, entitlement, discretion or remedy shall govern and the
conflicting provision shall for all purposes be disregarded.
8.15. Expenses. Borrower agrees to pay all expenses of the Bank (including the
reasonable fees and expenses of its counsel) in connection with the preparation
of this Agreement and all of the other Credit Documents, the completion of the
transactions contemplated hereby or thereby and incidental to the enforcement of
any provision of this Agreement or of any of the other Credit Documents.
Borrower further agrees that in the event the Bank refers to an attorney for
collection of any amounts due under this Agreement, under the Note or under any
other Credit
21
Document, or the enforcement of the Bank's rights under any Credit Document,
Borrower shall pay to the Bank the reasonable attorneys fees and expenses
thereby incurred by the Bank.
8.16. Jury Waiver. Borrower and Bank mutually hereby knowingly, voluntarily, and
intentionally waive the right to a trial by jury in respect of any claim based
herein, arising out of, under or in connection with this Agreement or any of the
other Credit Documents contemplated to be executed in connection herewith or any
course of conduct, course of dealings, statements (whether verbal or written) or
actions of any party. This waiver constitutes a material inducement for the Bank
to enter into this Agreement and to make the Loan.
8.17. Certain Bank Rights.
(a) With the prior consent of the Borrower, which consent will not be
unreasonably denied or delayed, the Bank shall have the right at any time and
from time to time, to grant to one or more banks or other financial institutions
(each, a "Participant") participating interests in the Bank's obligations to
lend hereunder and/or in the Loan. In the event of any such grant by the Bank of
a participating interest to a Participant, the Bank shall remain liable for the
performance of the Bank's obligations under the Credit Documents and Borrower
shall continue to deal solely and directly with the Bank in connection with the
Bank's rights and obligations. The Bank may furnish any information concerning
Borrower or its Subsidiaries in its possession from time to time to prospective
assignees and Participants, provided that each assignee or participant (or
prospective assignee or participant) agrees in accordance with Section 8.21
below to maintain the confidentiality of non-public confidential information
received from the Bank except for disclosures to officers, employees, auditors
and counsel and disclosures required by law or pursuant to judicial process.
(b) The Bank may at any time pledge all or any portion of its rights
under the Credit Documents including any portion of the Note, to any of the
twelve (12) Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341. No such pledge or enforcement thereof shall
release the Bank from its obligations under any of the Credit Documents.
8.18. Payments/Interest Calculation. All payments to the Bank under the Note
shall be in lawful money of the United States in immediately available funds.
All computations of interest on account of the Loan shall be made on the basis
of a three hundred sixty (360) day year and the actual number of days elapsed.
8.19. Offset Rights. Borrower grants to the Bank a lien, security interest and
right of setoff as security for all of its liabilities and obligations to the
Bank whether now existing or hereafter arising, upon and against all deposits,
credits, collateral and property, now or hereafter in possession, custody, safe
keeping or control of the Bank or any entity under the control of Alliance Bank,
N.A., or in transit to any of them. At any time without demand or notice, the
Bank may setoff the same or any part thereof and apply the same to any liability
or obligation of Borrower regardless of the adequacy of any other collateral
securing the Loan. Any and all rights to require the Bank to exercise its rights
or remedies with respect to any other collateral which secures the Loan, prior
to its exercising its right of setoff with respect to such deposits, credits or
other property of Borrower are hereby knowingly and voluntarily and irrevocably
waived.
8.20. No Broker. Borrower represent and warrant to the Bank that no broker has
been instrumental in arranging for the Loan, and Borrower agree to defend,
indemnify and hold the Bank harmless from and against any claim by any broker or
any finder for any fee or commission or similar payment on account of or with
respect to the Loan.
8.21. Confidentiality. The Bank agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisers who need to know such Information
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or
22
Participant in, any of its rights or obligations under this Agreement, (g) with
the prior written consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to Bank on a non-confidential basis from a
source not known by the Bank to be under an obligation of confidentiality with
respect thereto. For the purposes of this Section, "Information" means all
information received from the Borrower relating to the Borrower or its business,
other than any such information that is available to the Bank on a
non-confidential basis prior to disclosure by the Borrower; provided that, in
the case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
ALLIANCE BANK, N.A.
By: /s/ XXXXX XXXXXX
--------------------------------------
Xxxxx Xxxxxx, Executive Vice President
ONEIDA LTD.
By: /s/ XXXXXXX X. XXXX
-------------------------------------
Xxxxxxx Xxxx, Treasurer
SCHEDULE LIST
-------------
Schedule 3.06 - Disclosed Matters
Schedule 2.01(c) - Term Note Form
Schedule 3.12 - Liens
Schedule 3.13 - Subsidiary List/Preemptive Rights
Schedule 6.01 - Existing Debt
Schedule 6.07 - Restrictive Agreements
23
SCHEDULE 2.01(c)
TERM NOTE
$4,500,000 Dated as of August 1, 2000
At Syracuse, New York
FOR VALUE RECEIVED, the undersigned, ONEIDA LTD., a New York business
corporation with an address at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the
"Borrower") unconditionally promises to pay to the order of ALLIANCE BANK, N.A.,
a national banking association with an address at 000 Xxxx Xxxxxx, Xxxxxx, Xxx
Xxxx 00000 (the "Bank"), the principal sum of Four Million Five Hundred Thousand
Dollars ($4,500,000) together with interest at a rate equal to the "Adjusted
LIBO Rate" plus the "Applicable Margin" (defined below) as follows:
Commencing on the 1st day of September, 2000 and continuing on the
first day of each of the then next succeeding eighty-three (83) equal
monthly principal payments each in the amount of Forty One Thousand
Six Hundred Sixty-Six and 67/100 Dollars ($41,666.67) plus interest at
the Applicable Rate and a final eighty four (84th) monthly principal
payment in the amount of One Million Forty-One Thousand Six Hundred
Sixty-Six and 35/100 Dollars ($1,041,666.35) plus accrued and unpaid
interest at the Adjusted LIBO Rate plus the Applicable Margin.
This Note restates and replaces the Borrower's Term Note dated as of
July 28, 1999 and is the Term Note referred to in the Amended and Restated Loan
Agreement dated as of August 1, 2000 between the Bank and the Borrower (the
"Loan Agreement"). The Bank is entitled to all of the privileges and benefits of
the Loan Agreement, the terms and conditions of which are incorporated herein
and made a part hereof. Terms denoted with a capitalized first letter and not
otherwise defined in this Note, shall have the meanings ascribed to such terms
in the Loan Agreement.
Wherever used in this Note:
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Applicable Margin" means for any day the Applicable Margin (expressed
in terms of basis points (bps)) as determined according to the applicable level
("Level") as indicated by the following grid, with such Level to be determined
on the basis of the Consolidated Leverage Ratio of Borrower and its consolidated
Subsidiaries as of the last day of each Fiscal Quarter of the Borrower as
reflected on the financial statements for such Fiscal Quarter delivered by the
Borrower pursuant to Section 5.01(b) of the Loan Agreement:
----------------------------------- ------------- ------------ ------------ ------------
Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0
----------------------------------- ------------- ------------ ------------ ------------
Consolidated Leverage Ratio <=2.0 <=2.5 <=3.0 > 3.0
----------------------------------- ------------- ------------ ------------ ------------
Eurodollar Margin (bps) 110.0 130.0 150.0 170.0
----------------------------------- ------------- ------------ ------------ ------------
provided that (i) during the period from the Closing Date through and including
the date on which Borrower delivers the financial statements under Section
5.01(b) of the Loan Agreement for the Fiscal Quarter ending July 29, 2000, the
Applicable Margin shall be based on Xxxxx 0, and (ii) if the Borrower shall have
failed to deliver the financial statements required by Section 5.01(b) of the
Loan Agreement when due (without giving effect to any grace period or notice
requirement) or there shall have occurred an Event of Default which has not been
waived by the Bank, the
24
Applicable Margin shall immediately be adjusted to Level 4 until such time
delivery of such financial statements shall have been made or the Event of
Default shall have been cured or waived, as the case may be. Each change in the
Applicable Margin shall be effective on the first Business Day following
delivery of the most recent financial statements pursuant to Section 5.01(b) of
the Loan Agreement subject to the proviso set forth in the preceding sentence.
"Eurodollar", when used in reference to the Loan, refers to whether the
Loan is bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is two weeks or one, two, three or
six months thereafter, as the Borrower may elect in a Repricing Notice in the
form attached hereto as Schedule "A".
"LIBO Rate" means, with respect to any Eurodollar Borrowing, for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Bank from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate", with respect to any Eurodollar Borrowing, for
such Interest Period shall be the rate at which dollar deposits of $5,000,000
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Bank in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Bank is subject, with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
The Borrower shall notify the Bank by telephone (confirmed by telecopy)
of any prepayment hereunder not later than 11:00 a.m. New York City time, three
(3) Business Days before the prepayment. Each such notice shall be irrevocable
and shall specify the prepayment date and the principal amount of the Borrowing
or portion thereof to be prepaid, and in the event of the payment of any
principal of any Eurodollar Borrowing other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), then
in any such event, the Borrower shall compensate the Bank for the loss, cost and
expense attributable to such event, such loss, cost or expense to the Bank shall
be deemed to include an amount determined by the Bank to be the excess if any
(X) the amount of interest which would have accrued on the principal amount of
such Borrowing had such event not occurred, at the Adjusted LIBO Rate but would
have been applicable to such Borrowing to the period from the date of such event
to the last day of the then current Interest Period thereof, or (Y) the amount
of interest which would accrue on such principal amount for such period at the
interest rate which the Bank were to bid, at the commencement of such period for
dollar deposits of a comparable amount and period from other banks in the
eurodollar market. A certificate by the Bank setting forth any amount or amounts
that the Bank is entitled to receive pursuant to this subsection shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay to the Bank the amount shown as due on such certificate
within ten (10) days after the receipt thereof.
All computations of interest under this Note shall be made on the basis
of a three hundred sixty (360) day year and the actual number of days elapsed.
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Payments of both principal and interest are to be made when due in
immediately available funds at the offices of Bank set forth above, or at such
other place as the holder of this Note shall designate to Borrower in writing,
in lawful money of the United States of America.
If this Note or any payment hereunder becomes due on a day which is not
a Business Day (as defined below), the due date of this Note or payment shall be
extended to the next succeeding Business Day, and such extension of time shall
be included in computing interest and fees in connection with such payment. As
used herein, "Business Day" shall mean any day other than a Saturday, Sunday or
day which shall be in the State of New York a legal holiday or day on which
banking institutions are required or authorized to close.
All agreements between Borrower and Bank are hereby expressly limited
so that in no contingency or event whatsoever, whether by reason of acceleration
of maturity of the indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible under applicable
law. As used herein, the term "applicable law" shall mean the law in effect as
of the date hereof provided, however, that in the event there is a change in the
law which results in a higher permissible rate of interest, then this Note shall
be governed by such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of Borrower and Bank in the execution,
delivery and acceptance of this Note to contract in strict compliance with the
laws of the State of New York, from time to time in effect. If under or from any
circumstances whatsoever, fulfillment of any provision hereof or of any of the
Loan Documents at the time of performance of such provision shall be due, shall
involve transcending the limit of such validity prescribed by applicable law,
then the obligation to be fulfilled shall automatically be reduced to the limits
of such validity, and if under or from circumstances whatsoever Bank should ever
receive as interest an amount which would exceed the highest lawful rate, such
amount which would be excessive interest shall be applied to the reduction of
the principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between Borrower
and Bank.
Upon the occurrence of an Event of Default as defined in the Loan
Agreement, the then unpaid balance of this Note, together with all accrued and
unpaid interest, shall be and become due and payable in accordance with the
provisions of the Loan Agreement.
Further and not in lieu of any other remedy, (a) in the event any
payment due hereunder is not made within ten (10) days of the date when due,
Borrower shall pay to Bank a late charge equal to one-half of one percent (1/2%)
of the amount of such payment, and (b) upon the occurrence of an Event of
Default under the Loan Agreement, the amount due under this Note shall
thereafter bear interest at a rate equal to the Prime Rate of Interest plus one
percent (1%), and Borrower agrees to pay interest at such rate until all amounts
due under this Note are paid in full.
Borrower expressly waives any presentment, demand, protest or, except
for notices required to be given by the Bank under the Loan Agreement, any
notice in connection with this Note.
Borrower grants to Bank, a lien, security interest and right of setoff
as security for all liabilities and obligations to Bank, whether now existing or
hereafter arising, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Bank or any entity under the control of Alliance Bank, N.A., or in transit to
any of them. At any time, without demand or notice, Bank may set off the same or
any part thereof and apply the same to any liability or obligation of Borrower
even though unmatured and regardless of the adequacy of any other collateral
securing the Loan. Any and all rights to require Bank to exercise its rights or
remedies with respect to any other collateral which secures the Loan, prior to
exercising its right of setoff with respect to such deposits, credits or other
property of the Borrower, are hereby knowingly, voluntarily and irrevocably
waived.
Borrower promises and agrees to pay the costs of collection and any
reasonable attorneys' fees incurred by the Bank upon the occurrence of an Event
of Default under the Loan Agreement.
This Note, together with the provisions of the Loan Agreement and the
other Loan Documents constitutes the complete understanding between the parties
and taken together, supersede all prior or contemporaneous
26
understandings, agreements and negotiations, all of which are merged into this
Note, the Loan Agreement and such other Loan Documents.
This Note shall be governed by and construed and enforced in accordance
with the laws of the State of New York, exclusive of New York's conflicts of
laws rules and public policies.
The Borrower unconditionally consents to the jurisdiction of the courts
of the State of New York or of federal courts located within the State of New
York and agree that any action to construe, enforce or effect collection of
amounts due under, this Note, may be commenced in a state or federal court
located within the State of New York.
The Bank may at any time pledge all or any portion of its rights under
this Note or under any other Loan Document, to any of the twelve (12) federal
reserve banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or enforcement thereof shall release the Bank from
its obligations under the Loan Documents.
With the Borrower's prior consent, which consent will not be
unreasonably denied or delayed, the Bank shall have the right at any time and
from time to time to grant to one or more banks or other financial institutions
(each, a "Participant") participating interests in the Loan evidenced by this
Note. In the event of any such grant by the Bank of a participating interest to
a Participant, the Bank shall remain responsible for the performance of its
obligations hereunder and the Borrower shall continue to deal solely and
directly with the Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the Borrower or its
Subsidiaries in its possession from time to time to prospective participants,
each assignee or participant (or prospective assignee or participant) agrees in
accordance with Section 8.21 of the Loan Agreement to maintain the
confidentiality of non-public confidential information received from the Bank
except for disclosures to officers, employees, auditors and counsel and
disclosures required by law or pursuant to judicial process.
Upon receipt of an affidavit of an officer of the Bank as to the loss,
theft, destruction or mutilation of this Note or any other Loan Document which
is not of public record, and, in the face of any such loss, theft, destruction
or mutilation, upon cancellation of this Note or such other Loan Document,
Borrower will issue, in lieu thereof, a replacement note or other Loan Document
in the same principal amount thereof and otherwise of like tenor.
Borrower and Bank hereby knowingly, voluntarily and intentionally waive
the right to a trial by jury in respect of any claim based hereon, arising out
of, under or in connection with this Note or any other Loan Document
contemplated to be executed in connection herewith or any course of conduct,
course of dealings, statements (whether verbal or written) or actions by any
party. This waiver constitutes a material inducement for the Bank to accept this
Note and to make the Loan evidenced hereby.
ONEIDA LTD.
By:
----------------------------------
Xxxxxxx Xxxx, Treasurer
27
SCHEDULE A
REPRICING NOTICE
TO: ALLIANCE BANK, N.A.
(Commercial Loan Department)
Reference herein to the Term Note shall mean the Oneida Ltd.
("Borrower") Term Note dated August 1, 2000 in the original principal amount of
Four Million Five Hundred Thousand Dollars ($4,500,000) executed and delivered
to the Bank.
Borrower wishes to continue its borrowing under the Term Note:
For ____ month(s) [insert one month, three months or six
months] at the rate quoted to the Borrower of ________% per
annum for the terms of the Term Note
Kindly confirm by fax to Borrower's fax number (315) __________.
DATED: ONEIDA LTD.
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By:
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Name:
---------------------------
Title:
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