EXHIBIT 4(a)
AMENDMENT NO. 2
TO
CREDIT AGREEMENT
This Amendment No. 2, dated as of November 1, 1996, is among ONEIDA LTD., a
New York corporation (the "Borrower"), THE CHASE MANHATTAN BANK (successor to
The Chase Manhattan Bank, N.A.), as agent under the Credit Agreement
referred to below ("Agent"), and the banks which are or have become parties to
the Credit Agreement referred to below ("Banks").
RECITALS:
A. The Borrower, the Agent and the Banks are or have become parties to
a Credit Agreement dated as of January 19, 1996 which has been amended by
an Amendment No. 1 dated as of September 25, 1996 (as amended, hereafter
referred to as the "Credit Agreement").
B. Borrower has formed a new subsidiary named Oneida Community China,
Inc. which has entered into an Agreement to acquire substantially all of the
assets of THC Systems, Inc., a New York corporation which sells products under
the trademark "Xxxx China". Upon consummation of such acquisition, Borrower
intends to change the name of Oneida Community China, Inc. to THC Systems,
Inc. and to designate such subsidiary as a Restricted Subsidiary under the
Credit Agreement.
C. Oneida Community China, Inc. proposes to finance the acquisition
of THC Systems, Inc. through a private placement of debt securities and through
inter-company loans from Borrower.
D. Borrower has requested the Banks to amend the Credit Agreement
to modify certain covenants to accommodate the financing necessary to
consummate the proposed acquisition of THC Systems, Inc.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Amendment shall have
the meanings given to those terms in the Credit Agreement.
2. Amendment of Credit Agreement. The Credit Agreement is hereby amended
as follows:
(a) The following definitions are added to Section 1.1 of the Credit
Agreement:
"1992 Private Placement" - the private placement of debt
securities in the original face amount of $30,000,000 issued by Borrower
pursuant to a Note Agreement dated as of January 1, 1992.
"1996 Private Placement" - the private placement of debt
securities in the face amount of $35,000,000 issued or to be issued by Oneida
Community China, Inc. to one or more institutional investors to partially
finance the purchase of substantially all the assets of THC Systems, Inc.
"Noteholders" - collectively, the holders of the debt securities
issued in connection with the 1992 Private Placement and the 1996 Private
Placement.
(b) The definition of Guarantee Agreement is amended to read as
follows:
Guarantee Agreement - means a guarantee Agreement, substantially
in the form of Exhibit F annexed hereto, executed and delivered by each
Guarantor guaranteeing the payment of amounts due hereunder and the
Borrower's performance of its obligations required to be performed hereunder,
provided that (a) the Guarantee Agreement executed by Buffalo China, Inc.
shall be limited to a maximum liability of $10,000,000, (b) the Guarantee
Agreement executed by Camden Wire Co., Inc. shall be limited to a maximum
liability of $20,000,000, (c) the Guarantee Agreement executed by Oneida
Community China, Inc. shall be limited to a maximum liability of $15,000,000,
and (d) the Guarantee Agreement executed by each other Guarantor shall be
limited to an amount mutually acceptable to Borrower and the Banks, which
amount shall be not less than the greater of (i) 80% of the Tangible Net
Worth of such Guarantor, (ii) 35% of the Adjusted Tangible Assets of such
Guarantor, or (iii) the amount of the inter-company loan account, if any,
maintained by Borrower for the benefit of such Guarantor, all determined as
of the date the Guarantee Agreement is executed by such Guarantor.
(c) The definition of Guarantor is amended to read as follows:
Guarantor - each of Buffalo China, Inc., Camden Wire Co.,
Inc., Oneida Community China, Inc.
and each Restricted Subsidiary created or acquired after the date of this
Agreement whose Adjusted Tangible Assets account for 5% or more of the
Consolidated Adjusted Tangible Assets of Borrower and its Restricted
Subsidiaries.
(d) Clause (iv) of the definition of Restricted Subsidiary is amended
to read as follows:
(iv) either (a) as of the Closing Date, is a Restricted
Subsidiary within the meaning of paragraphs (i), (ii) and (iii) above or (b)
is designated as a Restricted Subsidiary pursuant to Section 6.8(b) unless
such Subsidiary is subsequently designated as an Unrestricted Subsidiary
pursuant to Section 6.8(b); provided that Buffalo China, Inc., Camden Wire Co.,
Inc. and Oneida Community China, Inc. shall at all times remain a Restricted
Subsidiary under this Agreement.
(e) Section 6.2 is amended to read as follows:
Current Ratio. The Borrower will maintain Consolidated Assets at
not less than 150% of Consolidated Current Liabilities from November 4, 1996
to the earlier of January 24, 1997 or the closing of the 1996 Private
Placement, and at not less than 175 % of Consolidated Current
Liabilities at and all times thereafter.
(f) Section 6.3 is amended by adding the following proviso to the end
of the first sentence:
provided that each Guaranty by a Restricted Subsidiary in
favor of the Noteholders shall be limited in amount to the levels set
forth in the definition of Guarantee Agreement above.
(g) Section 6.5(b) is amended to read as follows:
Notwithstanding anything in Section 6.5(a) to the contrary, (i)
the aggregate amount of loans and advances by Borrower to, and accounts
receivable of Borrower from, any Guarantor shall not exceed (A) $10,000,000 in
the case of Buffalo China, Inc., (B) $20,000,000 in the case of Camden Wire
Co., Inc., (C) $15,000,000 in the case of Oneida Community China, Inc.
(provided that this
limitation for Oneida Community China, Inc. shall be $50,000,000 from the date
hereof through the earlier of January 24, 1997 or the closing of the 1996
Private Placement, at which time it will revert to $15,000,000), and (D) the
maximum amount of the Guarantee Agreement in the case of any other Guarantor,
and (ii) Borrower shall not make or permit to exist any loans or advances by
Borrower to, or accounts receivable of Borrower from, Kenwood Silver Company,
Inc., except for accounts receivable consisting of accrued management fees owed
by Kenwood Silver Company, Inc. to Borrower for management services rendered by
Borrower in the ordinary course of business and in a manner consistent with
past practice.
(h) The first provision in Section 6.8(b) is amended to read as
follows:
...provided, however, that Buffalo China, Inc., Camden Wire Co.,
Inc., or Oneida Community China, Inc. may not be designated an Unrestricted
Subsidiary...
(i) Section 6.10 of the Credit Agreement is amended to read as
follows:
Net Worth. At the end of each of its fiscal quarters, Borrower
will maintain Consolidated Adjusted Tangible Net Worth of not less than
$70,000,000 plus 30% of Consolidated Adjusted Net Income accumulated after
July 27, 1996. The minimum Consolidated Adjusted Tangible Net Worth requirement
set forth in this Section shall be unaffected by and shall not be reduced as a
result of losses, if any, sustained by the Borrower or its consolidated
Subsidiaries after July 27, 1996.
(j) Section 6.17 is amended to read as follows:
(a) The ratio of Total Funded Debt of the Borrower and its
Restricted Subsidiaries to Consolidated Adjusted Tangible Net Worth shall not
exceed the following amounts at the end of any fiscal quarter:
2.0 to 1.0 at the end of the 1996-97 fiscal year in January
1997 through the end of the third fiscal quarter in October 1997;
1.55 to 1.0 at the end of the 1997-98 fiscal year in January
1998 through the end of the third fiscal quarter in October 1998:
1.35 to 1.0 at the end of 1998-1999 fiscal year in January
1999 and at all times thereafter.
(b) Borrower shall not permit Buffalo China, Inc. to incur Total
Funded Debt in excess of $5,000,000, shall not permit Camden Wire Co., Inc.,
to incur Total Funded Debt in excess of $11,500,000 and shall not permit
Oneida Community China, Inc. to incur Total Funded Debt in excess of
$35,000,000, except in each case for (i) Total Funded Debt payable to the
Borrower and permitted by Section 6.5 and (ii) Guaranties of Total Funded
Debt incurred by Borrower or any Restricted Subsidiary, which Guaranties are
otherwise permitted by Section 6.3. Borrower shall not permit any other
Guarantor to incur Total Funded Debt (except Total Funded Debt payable to the
Borrower and permitted by Section 6.5 and Guaranties of Total Funded Debt
incurred by Borrower or any Restricted Subsidiary, which Guaranties are
otherwise permitted by Section 6.3) in excess of an amount agreed to by
Borrower and the Banks at the time the Guarantee Agreement of such other
Guarantor is delivered, which amount shall be determined on a basis
consistent with the limitations set forth in this Section 6.17(b) with respect
to Buffalo China, Inc., Camden Wire Co., Inc. and Oneida Community China, Inc.
(k) The list of Restricted Subsidiaries attached as Exhibit A to the
Officer's Certificate Designating Restricted Subsidiaries dated January 19,
1996 is amended to include Oneida Community China, Inc., a New York corporation
(to be known as THC Systems, Inc.)
3. Representations and Warranties. The Borrower represents and warrants to
the Banks that:
(a) Each of the representations and warranties made by the Borrower
in the Credit Agreement is true and correct on and as of the date of this
Amendment (except that Schedule E thereto does not reflect additional liens,
permitted under the Credit Agreement, which were created after the date
thereof.
(b) No Default or Event of Default has occurred and is continuing;
(c) This Amendment has been duly authorized and validly executed by
Borrower.
4. Effectiveness. This Amendment shall not become effective until the
satisfaction of each of the following conditions:
(a) The Agent shall have received a duly executed counterpart of this
Amendment signed by each of the Borrower, each Bank and the Agent;
(b) Oneida Community China, Inc. shall have executed and delivered
to the Agent (i) a Guarantee Agreement substantially in the form of Exhibit F
to the Credit Agreement and limited in amount to $15,000,000, (ii) a Supplement
to Subordination Agreement substantially in the form of Exhibit A annexed
hereto, and (iii) a Certificate of its Secretary certifying the adoption
of resolutions by the Board of Directors authorizing the execution and delivery
of the Guarantee Agreement and Supplement to Subordination Agreement, certifying
the incumbency of the officer executing such documents, and certifying
copies of the Certificate of Incorporation and Bylaws of Oneida Community
China, Inc.
(c) Borrower shall have executed and delivered to the Agent a
Certificate of its Secretary certifying the adoption of resolutions by the
Board of Directors authorizing the execution and delivery of this Amendment and
certifying the incumbency of the officer executing this Amendment.
(d) The acquisition of substantially all of the assets of THC
Systems, Inc. by Oneida Community China, Inc. shall have been consummated.
5. Confirmation of Credit Agreement. Except as amended by this Amendment,
all of the provisions of the Credit Agreement remain in full force and effect
from and after the date hereof, and the Borrower hereby ratifies and confirms
the Credit Agreement and each of its obligations thereunder. From and after the
date hereof, all references in the Credit Agreement to "this Agreement",
"hereof", "herein", or similar terms, shall mean and refer to the Credit
Agreement as amended by this Amendment.
6. Counterparts. This Amendment may be signed in any number of
Counterparts, all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed as of the day and year first above written.
THE CHASE MANHATTAN BANK
(as Agent and as Bank)
By: /s/ Xxxxxx X. Xxxx, Xx.
Xxxxxx X. Xxxx, Xx.
Vice President
NATIONSBANK, N.A.
By: /s/ Xxxxxxxx X. XxXxxxxxx
Xxxxxxxx X. XxXxxxxxx
Title: Senior Vice President
MARINE MIDLAND BANK
By: /s/ Xxxx X. Xxxxxxx
Xxxx X. Xxxxxxx
Title: Vice President
ONEIDA LTD.
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Senior Vice President
