EXHIBIT 4(a)(vii)
WAIVER AND AMENDMENT NO. 1
TO
CREDIT AGREEMENT
This Waiver and Amendment No. 1 ("Amendment"), dated as of
September 12, 2000, is among ONEIDA LTD., a New York corporation (the
"Borrower"), THE CHASE MANHATTAN BANK as Administrative Agent under the Credit
Agreement referred to below ("Administrative Agent"), and the Lenders which are
parties to the Credit Agreement referred to below (the "Lenders").
R E C I T A L S
A. Borrower, the Administrative Agent and the Lenders are
parties to a Credit Agreement dated as of June 2, 2000 (the "Credit Agreement").
B. Borrower has advised the Administrative Agent and the
Lenders that it has recorded a pre-tax restructuring charge of $32,000,000 in
the Fiscal Quarter ending July 29, 2000, and anticipates taking an additional
pre-tax restructuring charge in an amount not to exceed $7,000,000 in its Fiscal
Quarter ending October 28, 2000.
C. Borrower has advised the Administrative Agent and Lenders
that, because of the restructuring charge recorded for the Fiscal Quarter ending
July 29, 2000, its Consolidated Leverage Ratio for such Fiscal Quarter was 4.42
to 1.0, in violation of Section 6.11(b) of the Credit Agreement.
D. Borrower has advised the Administrative Agent and the
Lenders that, because of the restructuring charge recorded for the Fiscal
Quarter ending July 29, 2000, its Consolidated Net Worth at the end of such
Fiscal Quarter was $115,544,000, in violation of Section 6.11(c) of the Credit
Agreement.
E. Borrower has requested that the Administrative Agent and
the Lenders (i) waive the Events of Default arising out of Borrower's failure to
comply with Sections 6.11(b) and (c) of the Credit Agreement at July 29, 2000,
and (ii) amend Sections 6.11(b) and (c) of the Credit Agreement.
F. Borrower recently completed acquisitions of Delco
International Ltd. ("Delco"), Viners of Sheffield Limited ("Viners") and Sakura,
Inc. ("Sakura"). Borrower has requested that, whenever the Credit Agreement
requires or permits the determination of the pro forma Consolidated EBITDA of
Viners and Delco, the determination be made without regard to certain one-time
non-operating charges totaling $4,800,000 recorded by Viners and Delco prior to
their acquisition by Borrower.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Amendment which are
not otherwise defined shall have the meanings given to those terms in the Credit
Agreement.
2. Waiver. The Lenders hereby waive the Events of Default created as a
result of Borrower's failure to comply with Sections 6.11(b) and 6.11(c) of the
Credit Agreement at July 29, 2000. This waiver is limited to the failure to
comply with Sections 6.11(b) and 6.11(c) at July 29, 2000 and shall not be
construed as a waiver of any other presently existing or future Events of
Default.
3. Pro Forma Calculation. Whenever the Credit Agreement requires or
permits the determination of the pro forma Consolidated EBITDA of Viners and
Delco for periods prior to their acquisition by Borrower, the Lenders hereby
agree that such determination may be made without regard to (a) a $1,800,000
pre-tax non-recurring employee bonus incurred by Viners in its fiscal quarter
ending April 30, 2000 and (b) a total of $3,000,000 in pre-tax
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non-recurring employee bonus and employee compensation charges incurred by Delco
in its fiscal quarter ending July 31, 2000.
4. Amendment of Credit Agreement.
4.1 The definition of "Applicable Margin" in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:
"Applicable Margin" means for any day, with respect to any
Loans, 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):
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Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 5 Xxxxx 0 Xxxxx 0
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Consolidated Leverage Ratio <=2.0 <=2.25 <=2.5 <=2.75 <=3.00 <=3.25 >3.25
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Eurodollar Margin (bps) 100.0 125.0 150.0 175.0 200.0 250.0 300.0
----------------------------------------------------------------------------------------------------------------------
ABR Margin (bps) 0.0 0.0 25.0 50.0 75.0 125.0 175.0
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provided that (i) during the period from the Closing Date
through and including September 11, 2000, the Applicable
Margin shall be based on Level 2, (ii) during the period from
September 12, 2000 through and including the date on which
Borrower delivers the financial statements under Section
5.01(b) for the Fiscal Quarter ending January 27, 2001, the
Applicable Margin shall be based on Xxxxx 0, unless the
financial statements delivered for the Fiscal Quarter ending
October 28, 2000 require the Applicable Margin to be increased
to Level 7 at that time, and (iii) 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 in the manner provided in
Section 9.02 hereof, the Applicable Margin shall immediately
be adjusted to Level 7 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.
4.2 The definition of "Consolidated EBITDA" in Section 1.01 of
the Credit Agreement is hereby amended to read as follows:
"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: (i) for any period that
includes the Fiscal Quarter ending October 30, 1999, there
shall be added to Consolidated Net Income the sum of
$8,500,000, representing pre-tax extraordinary and
non-recurring charges incurred in such quarter, (ii) for any
period that includes the Fiscal Quarter ending July 29, 2000,
there shall be added to Consolidated Net Income the sum of
$32,000,000, representing pre-tax extraordinary and
non-recurring charges incurred in such quarter, and (iii) for
any period that includes the Fiscal Quarter ending October 28,
2000, there may be added to
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Consolidated Net Income pre-tax extraordinary and
non-recurring restructuring charges incurred in such quarter
in an amount not to exceed $7,000,000, 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 previously provided
to the Administrative Agent and the Lenders 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 Administrative Agent.
4.3 Section 2.10(a) of the Credit Agreement is hereby amended
to read as follows:
(a) The Borrower agrees to pay to the Administrative Agent for
the account of each Lender a commitment fee on the daily
average unused amount of the Commitment of such Lender during
the period from and including the date hereof to but excluding
the date on which such Commitment terminates, provided that
for purposes of calculating commitment fees the unused amount
of a Commitment shall be determined without regard to the
principal amount of any outstanding Swingline Loans. The rate
at which commitment fees shall accrue is to be determined
according to the applicable level ("Level") as indicated in
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 Sections 5.01(b):
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Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 5 Xxxxx 0 Xxxxx 0
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Consolidated Leverage Ratio <=2.0 <=2.25 <=2.5 <=2.75 <=3.0 <=3.25 >3.25
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Commitment Fee (bps) 35.0 37.5 40.0 45.0 50.0 50.0 50.0
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provided that (i) during the period from the Closing Date
through and including September 11, 2000 commitment fees shall
accrue at the rate set forth in Level 2, (ii) during the
period from September 12, 2000 through and including the date
on which Borrower delivers the financial statements under
Section 5.01(b) for the Fiscal Quarter ending January 27,
2001, commitment fees shall accrue at the rate set forth in
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 in the manner provided in Section
9.02 hereof, the rate at which commitment fees shall accrue
shall immediately be adjusted to the rate set forth in Level 7
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 commitment fees
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.
4.4 Section 6.11(b) of the Credit Agreement is hereby amended
to read as follows:
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(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 on a pro forma basis 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) 3.60 to 1.0 as of the last day of the Fiscal
Quarter ending October 28, 2000, (iii) 3.10 to 1.0 as of
the last day of the Fiscal Quarters ending January 27,
2001 and April 28, 2001, and (iv) 3.0 to 1.0 as of the
last day of each succeeding Fiscal Quarter.
4.5 Section 6.11(c) of the Credit Agreement is hereby amended
to read as follows:
(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)
$110,000,000 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.
5. Representations and Warranties. The Borrower represents and warrants
to the Administrative Agent and the Lenders that the following statements are
true, correct and complete:
5.1 Representations and Warranties. 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.
5.2 No Default or Event of Default. No Default or Event of
Default has occurred and is continuing except for the Events of Default
referenced in Paragraph 2 above.
5.3 Financial Projections. The projected financial statements
for the Borrower and its Subsidiaries dated August 23, 2000 delivered to the
Administrative Agent and the Lenders in connection with this Amendment were
prepared by the Borrower in good faith and on the basis of the best information
available at that time and on the assumptions stated therein, which assumptions
the Borrower believes to be reasonable.
5.4 Execution, Delivery and Enforceability. This Amendment has
been duly and validly executed and delivered by the Borrower and constitutes its
legal, valid and binding obligation, enforceable against the Borrower in
accordance with its terms.
6. Conditions to Effectiveness of Amendment. This Amendment shall be
effective only when and if each of the following conditions is satisfied:
6.1 Subsidiary Guarantee and Subordination. The Administrative
Agent shall have received a subsidiary guarantee agreement (the "Subsidiary
Guarantee") and a subsidiary subordination agreement (the "Subordination
Agreement") executed and delivered by Delco and Sakura (collectively the "New
Guarantors") in substantially the same forms as the Subsidiary Guarantee and
Subordination Agreement attached to the Credit Agreement as Exhibits C and D,
respectively.
6.2 Secretary's Certificate. The Administrative Agent shall
have received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of each New Guarantor, the authorization of the Subsidiary Guarantee
and Subordination Agreement, the incumbency of the officers executing any
documents on behalf of the New Guarantor, and any other legal matters relating
to each New Guarantor or this Amendment, all in form and substance satisfactory
to the Administrative Agent and its counsel.
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6.3 Consent of Guarantors. Each of the existing Guarantors
shall have executed and delivered to the Administrative Agent the Consent of
Guarantors attached to this Amendment.
6.4 No Default or Event of Default; Accuracy of
Representations and Warranties. After giving effect to this Amendment, no
Default or Event of Default shall exist and each of the representations and
warranties made by the Borrower or any of its Subsidiaries herein and in or
pursuant to the Loan Documents shall be true and correct in all material
respects as if made on and as of the date on which this Amendment becomes
effective.
6.5 Waiver/Amendment Fee. The Borrower shall have paid to the
Administrative Agent a waiver/amendment fee equal to 0.15% applied to the
aggregate outstanding Loans and unused Commitments of each Lender that delivers
to the Agent, by hand delivery or telefax no later than 5:00 PM EDT on September
11, 2000, a counterpart of this Amendment executed by such Lender. Such fee (a)
shall be received by the Administrative Agent ratably for the account of, and
shall be remitted by the Administrative Agent solely to, such Lenders and (b)
shall be fully earned and nonrefundable when paid.
6.6 Expense Reimbursements. The Borrower shall have paid all
invoices presented to Borrower for expense reimbursements due to the
Administrative Agent pursuant to Section 9.03 of the Credit Agreement.
6.7 Execution by Required Lenders. The Administrative Agent
shall have received a counterpart of this Amendment duly executed and delivered
by the Borrower, the Administrative Agent, and the Required Lenders.
7. Confirmation of Credit Agreement. Except as amended by this
Amendment, all 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 the documents executed in connection
therewith. From and after the date hereof, all references in the Credit
Agreement to "this Agreement", "hereof", "herein", or similar terms, shall refer
to the Credit Agreement as amended by this Amendment.
8. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Delivery of an executed
signature page to this Amendment by facsimile transmission shall be as effective
as delivery of a manually signed counterpart.
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the day and year first above written.
ONEIDA LTD.
By: /s/ XXXXXX X. XXXXX
-------------------
Name: Xxxxxx X. Xxxxx
Title: Corporate Senior Vice President, Finance
THE CHASE MANHATTAN BANK, individually and as
Administrative Agent
By: /s/ XXXXXX X. XXXX, XX.
-----------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
BANK OF AMERICA, N.A., individually and as Syndication
Agent
By: /s/ XXXX X. XXXX
----------------
Name: Xxxx X. Xxxx
Title: Vice President
FLEET NATIONAL BANK, individually and as
Documentation Agent
By: /s/ XXXXX X. XXXXXX
-------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
HSBC BANK, USA, individually and as Senior Managing
Agent
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Senior Vice President
MANUFACTURERS AND TRADERS TRUST
COMPANY
By: /s/ XXXX X. XXXXXX
------------------
Name: Xxxx X. Xxxxxx
Title: Banking Officer
THE BANK OF NOVA SCOTIA
By: /s/ XXXX X. XXXXXX
------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
EUROPEAN AMERICAN BANK
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By: /s/ XXXXXXXXX XXXXXXXXX
-----------------------
Name: Xxxxxxxxx Xxxxxxxxx
Title: Group Vice President
BANCA NAZIONALE DEL LAVORO
By: /s/ XXXXXXX XXXXXXX
Name: Xxxxxxx Xxxxxxx
Title: Vice President
By: /s/ XXXXXXXX XXXXXXXXX
Name: Xxxxxxxx Xxxxxxxxx
Title: First Vice President
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CONSENT OF GUARANTORS
Each of the undersigned is a party to a Subsidiary Guarantee Agreement
and is a Guarantor of the obligations of the Borrower under the Credit Agreement
referred to above. Each of the undersigned Guarantors hereby (a) consents to the
foregoing Amendment, (b) acknowledges that notwithstanding the execution and
delivery of the foregoing Amendment, the obligations of each of the undersigned
Guarantors are not impaired or affected and the Subsidiary Guarantee Agreement
continues in full force and effect, and (c) ratifies the Subsidiary Guarantee
Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed and
delivered this Consent of Guarantors as of the 12th day of September, 2000.
BUFFALO CHINA, INC.
By: /s/ XXXXXXXXX. X. XXXXXXXXX
---------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: V.P. & Secretary
ENCORE PROMOTIONS, INC.
By: /s/ XXXXXXXXX. X. XXXXXXXXX
---------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: V.P. & Secretary
THC SYSTEMS INC.
By: /s/ XXXXXXXXX. X. XXXXXXXXX
---------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: V.P. & Secretary
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