EXHIBIT 4(a)(viii)
FIRST AMENDMENT TO AMENDED AND RESTATED
NOTE AGREEMENT DATED AS OF JANUARY 1, 1992
Reference is hereby made to that certain Amended and Restated Note
Agreement dated as of January 1, 1992 (the "Agreement") by and among Oneida Ltd.
(the "Company"), Allstate Life Insurance Company ("Allstate Life") and Pacific
Life Insurance Company (together with Allstate Life, the "Purchasers"), as
modified pursuant to that certain First Waiver to Amended and Restated Note
Agreement dated as of January 1, 1992 (the "Waiver"). This First Amendment to
Amended and Restated Note dated as of January 1, 1992 is hereinafter referred to
as the "First Amendment."
WHEREAS, the Company disclosed to the Purchasers in a letter and
accompanying materials dated August 23, 2000 (the "Amendment Request") certain
pre-tax restructuring charges in the amount of $32 million for the Fiscal
Quarter ending July 29, 2000, and is anticipating taking an additional pre-tax
restructuring charge in an amount not to exceed $7 million (collectively, the
"Restructuring Charges") for the Fiscal Quarter ending October 28, 2000;
WHEREAS, as a result of the Restructuring Charges recorded for the
Fiscal Quarter ended July 29, 2000, the Company's Consolidated Net Worth at the
end of such Fiscal Quarter was $115,544,000, in violation of Section 7.1 of the
Agreement;
WHEREAS, as a result of the Restructuring Charges recorded for the
Fiscal Quarter ended July 29, 2000, the Company's Consolidated Leverage Ratio at
the end of such Fiscal Quarter was 4.42 to 1.0, in violation of Section 7.2 of
the Agreement;
WHEREAS, the Company has requested that the Purchasers amend Section
7.1 and Section 7.2 of the Agreement to eliminate the effect of the
Restructuring Charges; and
WHEREAS, the Company recently completed acquisitions of Delco
International Ltd. ("Delco"), Viners of Sheffield Limited ("Viners") and Sakura,
Inc. ("Sakura"). The Company has requested that whenever the 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 the Company.
It is therefore agreed that:
1. Definitions.
"Level" shall have the meaning ascribed to such term in the
Bank Agreement as in effect on the date hereof and as reflected in the
definition of Application Margin, which definition of "Applicable
Margin" shall have the meaning ascribed to such term in the Bank
Agreement as in effect on the date hereof and as set forth on Exhibit A
attached hereto. All defined terms used in the paragraph of the Bank
Agreement which defines "Applicable Margin" and "Level" shall have the
meanings ascribed to such terms in the Waiver and Amendment No. 1 to
the Bank Agreement dated as of September 12, 2000. All defined terms
used herein shall have the meanings assigned to such terms in the
Agreement.
2. Pro forma Calculation.
Whenever the Agreement requires or permits the determination
of the pro forma Consolidated EBITDA of Viners and Delco for the
periods prior to their acquisition by the Company, the Purchasers
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
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in pre-tax non-recurring employee bonus and employee compensation
charges incurred by Delco in its fiscal quarter ending July 31, 2000.
3. Amendments.
(a) Section 1.1(a) of the Agreement is hereby deleted and
the following inserted in lieu thereof:
1.1 Description of Notes. (a) This Amended
and Restated Note Agreement (the "Agreement") amends
and restates that certain Note Agreement dated as of
January 1, 1992, the notes issued thereunder between
the Company and the Purchasers named therein, and
shall not constitute a novation of such Note
Agreement or all or any portion of the indebtedness
evidenced thereby. The Company has authorized the
issuance and sale of $30,000,000 aggregate principal
amount of its Senior Notes (the "Notes"), to be dated
the date of issuance. The Notes shall bear interest
from such date of issuance at the rate of:
(i) 8.52% per annum commencing
July 15, 1992 up to and including September 11, 2000
and
(ii) 9.02% per annum from
September 12, 2000 until the earlier of:
(a) the date or dates, as
the case may be, of any increase in
the Level in which case the rate of
interest will increase on such date
to an amount equal to the sum of the
then existing interest rate plus the
amount of such increase in the
Level; or
(b) the date or dates, as
the case may be, of a decrease in
the Level in which case the rate of
interest will decrease on such date
to an amount equal to the then
existing interest rate minus the
amount of such decrease in the
Level, provided that (i) in no event
shall the interest rate fall below
8.52% and (ii) the Company provides
evidence to the Purchasers
satisfactory to the Purchasers that:
(1) the Banks have
not received further
compensation in any form as
a result of any such
reduction in the Level, (2)
the Consolidated Leverage
Ratio is, as of the date of
the immediately preceding
Fiscal Quarter, in
compliance with Section 7.2
as amended herein and (3)
no Event of Default exists,
or
(c) maturity.
All such interest payments shall be payable
semi-annually on the fifteenth day of July and
January of each year, and at maturity, and shall bear
interest on overdue principal (including any overdue
required or optional prepayment), premium, if any,
and (to the extent legally enforceable) on any
overdue installment of interest at the greater of (a)
the rate of interest publicly announced by The Chase
Manhattan Bank (or its successors or assigns) as its
"prime rate" plus one percent (1%) or (b) 10.52% per
annum, to be expressed to mature on January 15, 2002
and to be substantially in the form attached as
Exhibit A. The term "Notes" as used herein shall
include each Note delivered pursuant to this
Agreement and each Note delivered in substitution or
exchange therefor and, where applicable, shall
include the singular number as well as the plural.
Any reference to you in this Agreement shall in all
instances be deemed to include any nominee of yours
or any
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separate account or other person on whose behalf you
are purchasing Notes. You are sometimes referred to
herein as a "Purchaser" and, together with the other
Purchaser, as the "Purchasers." The obligations of
the Company hereunder and under the Notes shall be
guaranteed by the Subsidiary Guarantors pursuant to
the Subsidiary Guarantees.
(b) Section 5.1 of the Agreement shall be amended by deleting
therefrom the following definition of "Consolidated EBITDA" and
inserting in lieu thereof the following:
Consolidated EBITDA - For any period, Consolidated
Net Income for such period plus, without duplication and to
the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) interest expense, (c) depreciation and
amortization expense, and (d) amortization of intangibles
(including, but not limited to, goodwill) and organization
costs, all as determined on a consolidated basis; provided
that (y) in determining Consolidated EBITDA of the Company and
its Restricted Subsidiaries (i) 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, (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 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 Company and its
Restricted Subsidiaries for any period, the Consolidated
EBITDA of any Person acquired by the Company or its Restricted
Subsidiaries during such period shall be included on a pro
forma basis for such period (assuming the consummation of each
such acquisition and the incurrence or assumption of any
Indebtedness in connection therewith occurred on the first day
of such period) if the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the
end of the period preceding the acquisition of such Person and
the related consolidated statements of income and
stockholders' equity and of cash flows for the period in
respect of which Consolidated EBITDA is to be calculated (i)
have been previously provided to the holders of the Notes 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 holders of the Notes.
(c) The following language is inserted as Section 6.16 of
the Agreement:
6.16 Level Increases. The Company shall notify the
Purchasers in writing within five (5) days of (a) any increase in the
Level from that which is in effect on September 12, 2000, including any
increase from Level 6 (as defined in the Bank Agreement) to Level 7 (as
defined in the Bank Agreement) and (b) any other compensation requested
by the Banks.
(d) Section 7.1 of the Agreement is hereby deleted and
the following inserted in lieu thereof:
7.1 Consolidated Net Worth. As of the last day of any
Fiscal Quarter, the Company will not permit Consolidated Net
Worth of the Company and its Restricted Subsidiaries to be
less than the sum of (i) $110,000,000, plus (ii) 50% of the
Consolidated Net Income of the Company and its Restricted
Subsidiaries (which for the purposes of this covenant shall
not be reduced by losses) for the Fiscal Year ending January
27, 2001 and for each Fiscal Year thereafter.
(e) Section 7.2 of the Agreement is hereby deleted and
the following inserted in lieu thereof:
7.2 Leverage Ratio. The Company will not permit the
Consolidated Leverage Ratio of the Company and its Restricted
Subsidiaries to be greater than (i) 3.0 to 1.0 as of the last
day of the Fiscal Quarter ending April 29, 2000, (ii) 3.60 to
1.0 as of the last day of the Fiscal Quarter
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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.
3. Representations and Warranties.
(a) In order to induce the Purchasers to enter into this First
Amendment, the Company confirms that (i) each of the representations
and warranties set forth in the Agreement is true and correct as of the
date hereof, (ii) to the extent such representation or warranty is
stated to relate solely to an earlier date, such representation or
warranty was true and correct as of such earlier date, and that (iii)
no Event of Default (which has not been cured pursuant to amendments
made hereunder) has occurred and is continuing.
(b) The Company represents and warrants that the information
set forth in the Amendment Request (a copy of which is attached hereto
as Exhibit A) is true and correct in all material respects.
(c) The projected financial statements for the Company and its
Restricted Subsidiaries dated August 23, 2000 delivered to the
Purchasers in connection with this First Amendment were prepared by the
Company in good faith and on the basis of the best information
available at that time and on the assumptions stated therein, which
assumptions the Company believes to be reasonable.
4. Counterparts.
This First Amendment may be executed by the parties hereto
individually, or in any combination of the parties hereto in several
counterparts, all of which taken together shall constitute one and the same
First Amendment.
5. Conditions to Effectiveness.
The effectiveness of the Purchasers' agreement to this First Amendment
is subject to the satisfaction on or prior to the date hereof of each of the
following conditions:
(a) Delivery to the Purchasers of copies of this First
Amendment executed by the Company.
(b) The Company shall have paid to the Purchasers fees and
expenses of counsel to the Purchasers.
(c) Delivery by the Company of a duly executed copy of that
certain Waiver and Amendment No. 1 to Credit Agreement among the
Company, The Chase Manhattan Bank and various lenders party thereto
dated as of September 12, 2000.
(d) The Purchasers shall have received a Subsidiary Guarantee
and a Subordination Agreement executed and delivered by Encore
Promotions, Inc., Delco, Viners and Sakura (collectively, the "New
Guarantors").
(e) The Purchasers shall have received such documents and
certificates as the Purchasers or their 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 Guarantors, any other legal matters
relating to each New Guarantor or this First Amendment, all in form and
substance satisfactory to Purchasers and their counsel.
(f) Each of the existing Guarantors shall have executed and
delivered to the Purchasers the Consent of the Guarantors attached to
this First Amendment.
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6. New Notes. The Company hereby agrees to issue to Purchasers a
new note which reflect the terms and provisions of this First Amendment if the
Purchasers request such new note, and any further documentation requested by the
Purchasers executed or delivered in connection therewith.
7. Ratification and Acknowledgment.
All of the representations, warranties, provisions, covenants, terms
and conditions of the Agreement shall remain unaltered and in full force and
effect the Agreement is in all respects agreed to, ratified and confirmed by the
Company. The Company acknowledges and agrees that the amendments provided in the
First Amendment shall not be construed as establishing a course of conduct on
the part of the Purchasers upon which the Company may rely at any time in the
future.
8. Reference to and Effect on the Agreement.
Except as amended by this First Amendment, all the provisions of the
Agreement remain in fully force and effect from and after the date hereof, and
the Company ratifies and confirms the Agreement and each of the documents
executed in connection therewith. Upon the effectiveness of this First
Amendment, each reference in the Agreement and in other documents describing or
referencing the Agreement to "this Agreement," "hereunder," "hereof," "herein,"
or words of like import referring to the Agreement, shall mean and be a
reference to the Agreement as modified by this First Amendment.
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Dated as of this 24 day of October, 2000.
ONEIDA LTD.
By: /s/ XXXXX X. XXXXXX
-------------------
Its: CEO
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXXXX X. XXXXXX
----------------------
By: /s/ XXXXXX X. XXXXXXXX
----------------------
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
------------------
Its: Assistant Vice President
By: /s/ XXXXX X. XXXXX
------------------
Its: Assistant Secretary
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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 Company under the Agreement
referred to above. Each of the undersigned Guarantors hereby (a) consents to the
foregoing First Amendment, (b) acknowledges that notwithstanding the execution
and delivery of the foregoing First 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 24 day of October, 2000.
BUFFALO CHINA, INC.
By: /s/ XXXXX X. XXXXX
-------------------
Name:
---------------------------------
Title: Vice President
THC SYSTEMS INC.
By: /s/ XXXXX X. XXXXXX
--------------------
Name:
---------------------------------
Title: CEO
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EXHIBIT A
Excerpt from the Bank Agreement(1) defining "Applicable Margin"
"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 [ ]2.00 [ ]2.25 [ ]2.50 [ ]2.75 [ ]3.00 [ ]3.25 > 3.25
---------------------------------------------------------------------------------------------------------------------
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
---------------------------------------------------------------------------------------------------------------------
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."
--------------------
(1) Section 4.1 of Waiver and Amendment No. 1 to Credit Agreement dated as of
September 12, 2000 by and among the Guarantor, The Chase Manhattan Bank, and
various banks party thereto.
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