EXHIBIT 4(a)(viii)
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THC SYSTEMS, INC. (the "Company")
ONEIDA LTD. (the "Guarantor")
2001 AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
Dated as of May 31, 2001
$35,000,000 Principal Amount
Senior Secured Notes
Due May 31, 2005
PPN: 87252@ AC 4
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TABLE OF CONTENTS
Section Page
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1. DESCRIPTION OF NOTES AND COMMITMENT................................................1
1.1. Amendment and Restatement of Agreement....................................1
1.2. Description of Notes......................................................1
1.3. Subsidiary Guarantee and Security Documents...............................3
1.4. Commitment; Closing Date..................................................3
2. PREPAYMENT OF NOTES................................................................3
2.1. Required Prepayments......................................................3
2.2. Optional Prepayments......................................................4
2.3. Notice of Prepayments.....................................................5
2.4. Surrender of Notes on Prepayment or Exchange..............................5
2.5. Direct Payment............................................................5
2.7. Payments Due on Saturdays, Sundays and Holidays...........................6
3. REPRESENTATIONS....................................................................6
3.1. Representations of the Company and the Guarantor..........................6
3.2. Representations of the Purchasers........................................13
4. CLOSING CONDITIONS................................................................14
4.1. Representations and Warranties...........................................14
4.2. Legal Opinions...........................................................14
4.3. Events of Default........................................................14
4.4. Payment of Fees and Expenses.............................................14
4.5. Legality of Investment...................................................14
4.6. Private Placement Number.................................................15
4.7. Issue of All Notes.......................................................15
4.8. Proceedings and Documents................................................15
4.9. Amendment Fee............................................................15
4.10. Credit Agreement.........................................................15
4.11. Exchange of Notes........................................................15
5. INTERPRETATION OF AGREEMENT.......................................................15
5.1. Certain Terms Defined....................................................15
5.2. Accounting Principles....................................................28
5.3. Valuation Principles.....................................................28
5.4. Direct or Indirect Actions...............................................29
5.5. Property.................................................................29
5.6. Officers.................................................................29
6. AFFIRMATIVE COVENANTS.............................................................29
6.1. Financial and Business Information and Reports...........................29
6.2. ERISA....................................................................32
6.3. Corporate Existence......................................................33
6.4. Payment of Obligations...................................................34
6.5. Maintenance of Properties................................................34
6.6. Insurance................................................................34
6.7. Maintenance of Records...................................................34
6.8. Inspection of Properties and Records; Confidentiality....................34
6.9. Compliance with Laws.....................................................35
Section Page
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6.10. Subsidiary Guarantees and Collateral.....................................36
6.11. Maintenance of Liens of the Security Documents...........................36
6.12. Taxes, Claims for Labor and Materials....................................36
6.13. Acquisition of Notes.....................................................37
6.14. Private Placement Number.................................................37
6.15. NAIC Filings.............................................................37
6.16. THC Systems, Inc. Voting Stock...........................................37
6.17. Most Favored Nation......................................................37
7. NEGATIVE COVENANTS................................................................38
7.1. Indebtedness.............................................................38
7.2. Liens....................................................................39
7.3. Merger or Consolidation..................................................41
7.4. Liquidate or Dissolve Subsidiaries; Sale of Assets.......................42
7.5. Investments, Loans, Advances, Guaranties and Acquisitions................42
7.6. Hedging Agreements.......................................................43
7.7. Transactions with Affiliates.............................................43
7.8. Restrictive Agreements...................................................43
7.9. Fiscal Year, Accounting Policies and Consolidated Tax Returns............44
7.10. Subordinated Debt........................................................44
7.11. Negative Pledges.........................................................44
7.12. Financial Covenants......................................................44
7.13. Letters of Credit........................................................45
7.14. Deposit Accounts.........................................................45
7.15. Prepayment of Indebtedness...............................................45
7.16. Long-Term Leases.........................................................46
7.17. Change in Business.......................................................46
7.18. Pari Passu Position......................................................46
7.19. Collateral Agency Agreement..............................................46
7.20. Change in Commitment.....................................................46
7.21. Change in Level..........................................................46
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR...........................................47
8.1. Nature of Events.........................................................47
8.2. Remedies on Default......................................................49
8.3. Annulment of Acceleration of Notes.......................................50
8.4. Other Remedies...........................................................50
8.5. Conduct No Waiver; Collection Expenses...................................50
8.6. Remedies Cumulative......................................................51
8.7. Notice of Default........................................................51
9. AMENDMENTS, WAIVERS AND CONSENTS..................................................51
9.1. Matters Subject to Modification..........................................51
9.2. Solicitation of Holders of Notes.........................................52
9.3. Binding Effect...........................................................52
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT...................53
10.1. Form of Notes............................................................53
10.2. Note Register............................................................53
10.3. Issuance of New Notes upon Exchange or Transfer..........................53
10.4. Replacement of Notes.....................................................53
11. MISCELLANEOUS.....................................................................54
11.1. Expenses.................................................................54
11.2. Notices..................................................................54
11.3. Reproduction of Documents................................................55
Section Page
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11.4. Successors and Assigns...................................................55
11.5. Law Governing............................................................55
11.6. Headings.................................................................55
11.7. Counterparts.............................................................55
11.8. Reliance on and Survival of Provisions...................................55
11.9. Integration and Severability.............................................56
Annex I: Subsidiaries of the Guarantor
Annex II: Indebtedness
Annex III: Description of Liens
Annex IV: Schedule of Insurance
Exhibit A: Form of 7.49% Senior Notes, Due November 1, 2008
Exhibit B: Legal Opinions
Exhibit C: Form of Guaranty Agreement
Exhibit D: Form of Subsidiary Guarantee
Exhibit E: Form of Subordination Agreement
Exhibit F: Form of Sharing Agreement
THC SYSTEMS, INC.
ONEIDA LTD.
2001 AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
Dated as of May 31, 2001
To the Purchasers Named
in Schedule I Hereto
Ladies and Gentlemen:
Each of THC SYSTEMS, INC. (formerly named Oneida Community China,
Inc.), a New York corporation (the "Company") and ONEIDA LTD., a New York
corporation (the "Guarantor"), agrees with you as follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1. Amendment and Restatement of Agreement.
This 2001 Amended and Restated Note Purchase Agreement (as the same may
from time to time be amended, restated, modified or supplemented, the
"Agreement") amends and restates in its entirety and is delivered in
substitution for and replacement of the Amended and Restated Note Agreement
dated as of November 15, 1996 (as the same may from time to time be amended,
supplemented, restated or modified, the "Original Agreement") and the notes
issued thereunder among the Company, the Guarantor and the Purchasers named
therein pursuant to which $35,000,000 aggregate principal amount of the
Company's Senior Notes due November 1, 2008 (the "Original 1996 Senior Notes")
were issued and presently are outstanding. This Agreement shall not constitute a
novation of the Original Agreement or all or any portion of the indebtedness
evidenced thereby. References herein to a "Schedule", an "Annex" or an "Exhibit"
are, unless otherwise specified, to a Schedule, an Annex or an Exhibit attached
to this Agreement.
1.2 Description of Notes.
In substitution for and replacement of the Original 1996 Senior Notes,
the Company has authorized the issue of $35,000,000 aggregate principal amount
of its Senior Secured Notes due May 31, 2005 (the "Notes", such term to include
any such notes issued in substitution therefor pursuant to Section 10 of this
Agreement). The Notes shall be substantially in the forms set out in Exhibit A,
with such changes therefrom, if any, as may be approved by each of the
Purchasers named therein and the Company.
The Notes shall bear interest from such date of issuance at the rate
of:
(i) 7.49% per annum commencing May 1, 1997 up to and including
September 11, 2000;
(ii) 7.99% per annum commencing September 12, 2000 up to and
including December 13, 2000;
(iii) 8.49% per annum commencing December 14, 2000 up to and
including April 27, 2001;
(iv) 8.84% per annum from April 28, 2001 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 7.49% and (ii) the
Company and the Guarantor provide evidence to the Purchasers
satisfactory to the Purchasers that: (1) the Lenders 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 last day of the immediately preceding Fiscal Quarter,
in compliance with Section 7.12 and (3) no Event of Default
exists, or
(c) maturity; and
(v) Notwithstanding the foregoing, if the amount of capital
required to be maintained by the Noteholders in respect of the Notes
is increased as a result of a Change in Capital (as defined below),
the interest rate then in effect on the Notes shall be increased by
0.50% (50 basis points) effective as of the date on which such
increase in required capital is effective. The Noteholders agree to
notify the Company of such increase and the date on which such
increase becomes effective, promptly after learning of such increase
in required capital. As used herein, "Change in Capital" means any
change after the date of this Agreement that increases the risk-based
capital factor attributable to the Notes as mandated by the risk-based
capital guidelines for life and health insurance companies in effect
in the United States on the date of this Agreement.
All such interest payments shall be payable quarterly on the first
(1st) day of November, February, May and August of each year commencing May 1,
1997, 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) the sum of the rate of interest then in effect plus two percent (2%) per
annum, after maturity of the due date thereof, whether by acceleration or
otherwise, until paid, to be expressed to mature on May 31, 2005. 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 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."
1.3 Subsidiary Guarantee and Security Documents.
The Notes will be guaranteed by each Subsidiary Guarantor pursuant to a
Subsidiary Guarantee. The Notes will be secured, pari passu, with all other
Senior Secured Indebtedness pursuant to the Security Documents. In connection
with the Subsidiary Guarantees and the Security Documents, the Lenders, the
Noteholders and certain other lenders have entered into the Collateral Agency
Agreement.
1.4 Commitment; Closing Date.
Subject to the terms and conditions hereof and on the basis of the
representations and warranties hereinafter set forth, the Company has issued and
sold to you, and you have purchased from the Company, Original Notes in the
aggregate principal amount set forth opposite your name in the attached Schedule
I at a price of 100% of the principal amount thereof.
Delivery of the Notes issued pursuant to this Agreement and any and all
documents required pursuant to Section 4 hereof shall be made at the offices of
Xxxxxxx, Carton & Xxxxxxx, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, at 9:00 a.m., Chicago Time, on May 31,
2001, or at such later time or on such later date as may be mutually agreed upon
by the Company and the Purchasers (the "Closing Date"). The Notes will be
delivered to you in fully registered form, issued in your name or in the name of
your nominee.
2. PREPAYMENT OF NOTES
2.1 Required Prepayments.
(a) In addition to payment of all outstanding principal of the Notes at
maturity and regardless of the amount of Notes which may be outstanding from
time to time, the Company shall prepay and there shall become due and payable on
November 1 in each year, $3,890,000 of the principal amount of the Notes or such
lesser amount as would constitute payment in full on the Notes, commencing
November 1, 2000 and ending November 1, 2004 inclusive, with the remaining
principal payable on May 31, 2005. Notwithstanding the foregoing, a Pro Rata
Amount of the Notes shall mature and become immediately due and payable on the
date of an occurrence of a Bank Event. Each such prepayment shall be at a price
of 100% of the principal amount prepaid, together with interest accrued thereon
to the date of prepayment. The Notes shall be prepaid in full, together with any
interest accrued thereon, in the event that the Commitment is reduced to zero
dollars ($0.00).
(b) (i) In the event of a Change of Control, the Guarantor shall,
immediately upon learning thereof, but in any event within five (5) days after
the date of such Change of Control, give written notice to each holder of a Note
and to the Company of the Change of Control, accompanied by a certificate of an
authorized officer of the Guarantor describing in detail the nature of the
Change of Control and containing an offer by the Company to prepay the Notes on
the terms set forth in the following sentence (the "Change Notice"). Subject to
clause (ii) of this paragraph (b), the Company shall prepay, on a date specified
in such notice by the Company which shall be not less than forty five (45) or
more than sixty (60) calendar days after the effective date of such Change in
Control, the entire principal amount of the Notes held by each holder at the
price set forth in Section 2.2(b).
(ii) A holder of Notes may accept or reject the offer of the
Company to prepay Notes made pursuant to clause (i) of this paragraph (b) by
causing a notice of such acceptance or rejection to be delivered to the Company
not more than thirty (30) calendar days following receipt of the Change Notice.
A failure by a holder of Notes to respond to an offer to prepay made pursuant to
clause (i) of this paragraph (b) shall be deemed to constitute an acceptance of
such offer by such holder.
2.2 Optional Prepayments.
(a) Upon notice as provided in Section 2.3, the Company may prepay the
Notes, in whole or in part, at any time, in an amount of not less than
$1,000,000 or in integral multiples of $100,000 in excess thereof at the price
set forth in Section 2.2(b).
(b) Each prepayment made pursuant to only Section 2.1(b) or paragraph
(a) of this Section 2.2 shall be at a price of (i) 100% of the principal amount
to be prepaid, plus interest accrued thereon to the date of prepayment, if the
Reinvestment Yield, on the applicable Determination Date, equals or exceeds the
interest rate payable on or in respect of the Notes, or (ii) 100% of the
principal amount to be prepaid, plus interest accrued thereon to the date of
prepayment, plus a premium, if the Reinvestment Yield, on such Determination
Date, is less than the interest rate payable on or in respect of the Notes. The
premium shall equal (x) the aggregate present value of the amount of principal
being prepaid (taking into account the manner of application of such prepayment
required by Section 2.2(c)) and the present value of the amount of interest
(exclusive of interest accrued to the date of prepayment) which would have been
payable in respect of such principal absent such prepayment, determined by
discounting (semi-annually on the basis of a 360-day year composed of twelve
30-day months) each such amount utilizing an interest factor equal to the
Reinvestment Yield, less (y) the principal amount to be prepaid.
(c) Any prepayment pursuant to Section 2.2(a) or Section 7.15 of less
than all of the Notes outstanding shall be applied, to reduce, pro rata, each of
the prepayments and the final payment at maturity required by Section 2.1.
(d) Except as provided in Section 2.1, this Section 2.2 and Section
7.15, the Notes shall not be prepayable in whole or in part.
2.3 Notice of Prepayments.
The Company shall give notice of any prepayment of the Notes pursuant
to Section 2.1(b), Section 2.2(a) or Section 7.15 to each holder of the Notes
not less than thirty (30) days nor more than sixty (60) days before the date
fixed for prepayment, specifying (i) such date, (ii) the principal amount of the
holder's Notes to be prepaid on such date, (iii) the date as of which the
premium, if any, will be calculated and (iv) the accrued interest applicable to
the prepayment. Notice of prepayment having been so given, the aggregate
principal amount of the Notes specified in such notice, together with the
premium, if any, and accrued interest thereon shall become due and payable on
the prepayment date specified in such notice.
The Company also shall give notice to each holder of the Notes by
telecopy, telegram, telex or other same-day written communication, as soon as
practicable but in any event not later than two business days prior to the
prepayment date, of the premium, if any, applicable to such prepayment and the
details of the calculations used to determine the amount of such premium.
2.4 Surrender of Notes on Prepayment or Exchange.
Subject to Section 2.5, upon any partial prepayment of a Note pursuant
to this Section 2 or partial exchange of a Note pursuant to Section 10.3, such
Note may, at the option of the holder thereof, (i) be surrendered to the Company
pursuant to Section 10.3 in exchange for a new Note equal to the principal
amount remaining unpaid on the surrendered Note, or (ii) be made available to
the Company for notation thereon of the portion of the principal so prepaid or
exchanged. In case the entire principal amount of any Note is prepaid or
exchanged, such Note shall, at the written request of the Company, be
surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of such Note.
2.5 Direct Payment.
Notwithstanding any other provision contained in the Notes or this
Agreement, the Company will pay all sums becoming due on each Note held by you
or any subsequent Noteholder by wire transfer of immediately available federal
funds to such account as you or such subsequent Noteholder has designated in
Schedule I, or as you or such subsequent Noteholder may otherwise designate by
written notice to the Company, in each case without presentment and without
notations being made thereon, except that any such Note so paid or prepaid in
full shall, at the written request of the Company, be surrendered to the Company
for cancellation. Any wire transfer shall identify such payment in the manner
set forth in Schedule I and shall identify the payment as principal, premium, if
any, and/or interest. You and any subsequent Noteholder to which this Section
2.5 applies agree that, before selling or otherwise transferring any such Note,
you or it will make a notation thereon of the aggregate amount of all payments
of principal theretofore made and of the date to which interest has been paid.
2.6 Allocation of Payments.
If less than the entire principal amount of all the Notes outstanding
is to be paid, the Company will prorate the aggregate principal amount to be
paid among the outstanding Notes in proportion to the unpaid principal.
2.7 Payments Due on Saturdays, Sundays and Holidays.
In any case where the date of any required prepayment of the Notes or
any interest payment date on the Notes or the date fixed for any other payment
of any Note or exchange of any Note is not a Business Day, then such payment,
prepayment or exchange need not be made on such date but may be made on the next
preceding Business Day, with the same force and effect as if made on the due
date.
3. REPRESENTATIONS
3.1 Representations of the Company and the Guarantor.
As an inducement to, and as part of the consideration for, your
purchase of the Notes pursuant to this Agreement, each of the Company and the
Guarantor represents and warrants to you as follows:
(a) Corporate Organization and Authority. Each of the Company and the
Guarantor is a corporation duly organized, validly existing and in
good standing under the laws of the State of New York, has all
requisite corporate power and authority to own and operate its
Properties, to carry on its business as now conducted and as presently
proposed to be conducted, to enter into and perform this Agreement and
the Security Documents and to issue the Notes as contemplated in this
Agreement. Each of the Subsidiary Guarantors has the corporate power
to execute and deliver its Subsidiary Guarantee and to perform the
provisions thereof and to execute and deliver the Security Documents
to which each is a party and to perform the provisions thereof.
(b) Qualification to Do Business. Each of the Company and the
Guarantor is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, 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.
(c) Subsidiaries. The Guarantor has no Subsidiaries, except those
listed in Annex I, which correctly sets forth the jurisdiction of
incorporation and the percentage of the outstanding Voting Stock or
equivalent interest of each Subsidiary which is owned, of record or
beneficially, by the Guarantor and/or one or more Subsidiaries. Each
Subsidiary has been duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation or
organization 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. Each Subsidiary has full corporate power and authority to
own and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted. Each Subsidiary
Guarantor has all requisite corporate power and authority to issue its
Subsidiary Guarantee and to execute the Subordination Agreement. The
Guarantor or each Subsidiary has good and marketable title to all of
the shares it purports to own of the capital stock of each Subsidiary,
as the case may be, free and clear in each case of any Lien or
encumbrance, and all such shares have been duly issued and are fully
paid and nonassessable.
(d) Financial Statements. The audited consolidated balance sheets of
the Guarantor and its Subsidiaries as of January 27, 2001 and the
related audited consolidated statements of income, stockholders'
equity and cash flows for the year ended January 27, 2001, accompanied
by the report and unqualified opinion of PricewaterhouseCoopers LLP,
independent certified public accountants, copies of which have
heretofore been delivered to you, were prepared in accordance with
GAAP (except as otherwise noted therein) and present fairly the
consolidated financial condition and consolidated results of
operations and cash flows of the Guarantor and its Subsidiaries for
and as of the end of each of such year.
(e) No Contingent Liabilities or Adverse Changes. Neither the
Guarantor nor any of its Subsidiaries has any contingent liabilities
which are material to the Guarantor and its Subsidiaries taken as a
whole other than as indicated on the financial statements described in
the foregoing paragraph (d) of this Section 3.1, and since January 27,
2001, there have been no material adverse changes in the condition,
financial or otherwise, of the Guarantor and its Subsidiaries except
those occurring in the ordinary course of business.
(f) No Pending Litigation or Proceedings. There are no actions, suits
or proceedings pending or threatened against or affecting the
Guarantor or any of its Subsidiaries, at
law or in equity or before or by any Federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which might result, either
individually or in the aggregate, in any material adverse change in
the business, Properties, operations or condition, financial or
otherwise, of the Guarantor and its Subsidiaries taken as a whole on
the Company's ability to perform its obligations under this Agreement,
any Security Document or the Notes, or on any Subsidiary Guarantor's
ability to perform its obligations under any Security Document to
which it is a party.
(g) Compliance with Law.
(i) Neither the Guarantor nor any of its Subsidiaries is: (x) in
default with respect to any order, writ, injunction or decree of any
court to which it is a named party; or (y) in default under any law,
rule, regulation, ordinance or order relating to its or their
respective businesses, the sanctions and penalties resulting from
which defaults described in clauses (x) and (y) might have a material
adverse effect on the business, Properties, operations, assets or
condition, financial or otherwise, of the Guarantor and its
Subsidiaries taken as a whole, on the Guarantor's ability to perform
its obligations under this Agreement, any Security Document or the
Notes, or on any Subsidiary Guarantor's ability to perform its
obligations under or any Security Document to which it is a party.
(ii) Neither the Guarantor nor any Subsidiary nor any Affiliate is an
entity defined as a "designated national" within the meaning of the
Foreign Assets Control Regulations, 31 C.F.R. Chapter V, or for any
other reason, subject to any restriction or prohibition under, or is
in violation of, any Federal statute or Presidential Executive Order,
or any rules or regulations of any department, agency or
administrative body promulgated under any such statute or Order,
concerning trade or other relations with any foreign country or any
citizen or national thereof or the ownership or operation of any
Property.
(h) Pension Reform Act of 1974. Based upon the representations of the
Purchasers set forth in Section 3.2, neither the purchase of the Notes
by you nor the consummation of any of the other transactions
contemplated by this Agreement is or will constitute a "prohibited
transaction" within the meaning of Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Internal Revenue Service has issued a favorable determination
letter with respect to each "employee pension benefit plan," as
defined in Section 3 of ERISA, established, maintained or contributed
to by the Guarantor or any Subsidiary (except for any Plan which is
unfunded and maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees) (a "Plan") that the same is qualified under
Section 401(a) and related provisions of the Code and that each
related trust or custodial account is exempt from taxation under
Section 501(a) of the Code. All Plans of the Guarantor or any
Subsidiary comply in all material respects with ERISA and other
applicable laws. There exist with respect to the Guarantor or any
Subsidiary no "multi-employer plans," as defined in the Multi-employer
Pension Plan Amendments Act of 1980, for which a material withdrawal
or termination liability may be incurred. There exist with respect to
all Plans or trusts established or maintained by the Guarantor or any
Subsidiary: (i) no material accumulated funding deficiency within the
meaning of ERISA; (ii) no termination of any Plan or trust which would
result in any material liability to the Pension Benefit Guaranty
Corporation ("PBGC") or any "reportable event," as that term is
defined in ERISA, which is likely to constitute grounds for
termination of any Plan or trust by the PBGC; and (iii) no "prohibited
transaction," as that term is defined in ERISA, which is likely to
subject any Plan, trust or party dealing with any such Plan or trust
to any material tax or penalty on prohibited transactions imposed by
Section 4975 of the Code.
(i) Title to Properties. The Guarantor and each Subsidiary has (i)
good title in fee simple or its equivalent under applicable law to all
the real Property owned by it and (ii) good title to all other
Property owned by it, in each case free from all Liens except (x)
those
securing Indebtedness of the Guarantor or a Subsidiary, which are
listed in the attached Annex II and (y) other Liens that would be
permitted pursuant to Section 7.2.
(j) Leases. The Guarantor and each Subsidiary enjoy peaceful and
undisturbed possession under all leases under which the Guarantor or
such Subsidiary is a lessee or is operating. None of such leases
contains any provision that might materially and adversely affect the
operation or use of the Property so leased. All of such leases are
valid and subsisting and neither the Guarantor nor any Subsidiary is
in default with respect to any such leases which are material to the
business, Properties, operations or condition, financial or otherwise,
of the Guarantor and its Subsidiaries taken as a whole.
(k) Franchises, Patents, Trademarks and Other Rights. The Guarantor
and each Subsidiary have all franchises, permits, licenses and other
authority necessary to carry on their businesses as now being
conducted and as proposed to be conducted, and none is in default
under any of such franchises, permits, licenses or other authority
which are material to their respective businesses, Properties,
operations or condition, financial or otherwise. The Guarantor and
each Subsidiary own or possess all patents, trademarks, service marks,
trade names, copyrights, licenses and rights with respect to the
foregoing necessary for the present conduct of their businesses,
without any known conflict with the rights of others which might
result in any material adverse change in their respective businesses,
Properties, operations or condition, financial or otherwise.
(l) Authorization.
(i) The Agreement, the Security Documents and the Notes have been duly
authorized by all necessary corporate action on the part of the
Guarantor, have been duly executed and delivered by an authorized
officer of the Guarantor and constitute the legal, valid and binding
obligations of the Guarantor, enforceable in accordance with their
terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in equity or at law. The
sale of the Notes and compliance by the Guarantor with all of the
provisions of this Agreement, the Security Documents and the Notes (i)
are within the corporate powers of the Guarantor, (ii) have been duly
authorized by proper corporate action, (iii) are legal, (iv) will not
violate any provisions of any law or regulation or order of any court,
governmental authority or agency and (v) will not result in any breach
of any of the provisions of, or constitute a default under, or result
in the creation of any Lien on any Property of the Guarantor or any
Subsidiary under the provisions of, any charter document, by-law, loan
agreement or other agreement or instrument to which the Guarantor or
any Subsidiary is a party or by which any of them or their Property
may be bound.
(ii) Each of the Subsidiary Guarantees and the Security Documents to
which any Subsidiary Guarantor is a party have been duly authorized by
all necessary corporate action on the part of such Subsidiary
Guarantor, have been duly executed and delivered by an authorized
officer of such Subsidiary Guarantor and constitute the legal, valid
and binding obligations of such Subsidiary Guarantor, enforceable in
accordance with their terms, except to the extent that enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or
by equitable principles, regardless of whether enforcement is sought
in equity or at law.
(m) No Defaults. The execution, delivery and performance by the
Company and the Guarantor of this Agreement, the 1992 Note Agreement,
the Notes and the Security Documents and the execution, delivery and
performance by each Subsidiary Guarantor of each Subsidiary Guarantee
and the Security Documents to which such Subsidiary Guarantor is a
party will not (i) contravene, result in any breach of, or constitute
a default under, or result in the
creation of any Lien in respect of any property of the Guarantor or
any Subsidiary under any indenture, mortgage, deed of trust, loan,
purchase or credit agreement, lease, corporate charter or by-laws, or
any other agreement or instrument the violation of which would result
in a cross-default pursuant to the terms hereof to which the Guarantor
or any Subsidiary is bound or by which the Guarantor or any Subsidiary
or any of their respective Properties may be bound or affected, (ii)
conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Guarantor or
any Subsidiary or (iii) violate any provision of any statute or
other rule or regulation of any Governmental Authority applicable to
the Guarantor or any Subsidiary.
(n) Governmental Consent. Neither the nature of the Guarantor or any
of its Subsidiaries, their respective businesses or properties, nor
any relationship between the Guarantor or any of its Subsidiaries and
any other Person, nor any circumstances in connection with the offer,
issue, sale or delivery of the Notes is such as to require a consent,
approval or authorization of, or withholding of objection on the part
of, or filing, registration or qualification with, any Governmental
Authority on the part of the Company or the Guarantor in connection
with the execution and delivery of this Agreement, any Security
Document or the issue or delivery of the Notes, or in connection with
the execution and delivery by each Subsidiary Guarantors of its
Subsidiary Guarantees or any Security Document to which it is a party.
(o) Taxes. All tax returns required to be filed by the Guarantor or
any Subsidiary in any jurisdiction have been filed or appropriate
extensions have been filed with respect thereto, and all taxes,
assessments, fees and other governmental charges upon the Guarantor or
any Subsidiary, or upon any of their respective properties, income or
franchises, which are due and payable, have been paid timely or within
appropriate extension periods or are being contested in good faith by
appropriate proceedings. The Guarantor does not know of any proposed
additional tax assessment against it or any Subsidiary for which
adequate provision has not been made on its books. The federal income
tax liability of the Guarantor and its Subsidiaries has been finally
determined by the Internal Revenue Service and satisfied for all
taxable years up to and including the taxable year ended January 31,
1998, and no material controversy in respect of additional taxes due
since such date is pending or to the Guarantor's knowledge threatened.
The provisions for taxes on the books of the Guarantor and each
Subsidiary are adequate for all open years and for the current fiscal
period.
(p) Status under Certain Statutes. Neither the Guarantor nor any
Subsidiary is: (i) a "public utility company" or a "holding company,"
or an "affiliate" or a "subsidiary company" of a "holding company," or
an "affiliate" of such a "subsidiary company," as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended,
or (ii) a "public utility" as defined in the Federal Power Act, as
amended, or (iii) an "investment company" or an "affiliated person"
thereof or an "affiliated person" of any such "affiliated person," as
such terms are defined in the Investment Company Act of 1940, as
amended.
(q) Private Offering. Neither the Guarantor, the Company nor
Manufacturers Hanover Securities Corporation (the only Person
authorized or employed by the Company or the Guarantor as agent,
broker, dealer or otherwise in connection with the offering of the
Notes or any similar security of the Company or the Guarantor) has
offered any of the Notes or any similar security of the Company or the
Guarantor for sale to, or solicited offers to buy any thereof from, or
otherwise approached or negotiated with respect thereto with, any
prospective purchaser, other than not more than 35 institutional
investors, including the Purchasers, each of whom was offered all or a
portion of the Notes at private sale for investment. Neither the
Company nor the Guarantor nor anyone acting on its authorization will
offer the Notes or any part thereof or any similar securities for
issue or sale to, or solicit any offer to acquire any of the same
from, anyone so as to bring the issuance and sale of the Notes within
the provisions of Section 5 of the Securities Act.
(r) Effect of Other Instruments. Neither the Guarantor nor any
Subsidiary is bound by any agreement or instrument or subject to any
charter or other corporate restriction which materially and adversely
affects the business, properties, operations, or condition, financial
or otherwise, of the Guarantor and its Subsidiaries taken as a whole,
the Guarantor's ability to perform its obligations under this
Agreement, the Security Documents or the Notes, or any Subsidiary
Guarantor's ability to perform its obligations under its Subsidiary
Guarantee or under any Security Document to which it is a party.
(s) Use of Proceeds. The Company has applied the proceeds from the
sale of the Notes to reduce the outstanding balance of bank
Indebtedness in the approximate amount of $35,000,000 incurred to
finance plant modernization. None of the transactions contemplated in
this Agreement (including, without limitation thereof, the use of the
proceeds from the sale of the Notes) will violate or result in a
violation of Section 7 of the Exchange Act, or any regulations issued
pursuant thereto, including, without limitation, Regulations G, T, U
and X of the Board of Governors of the Federal Reserve System (12
C.F.R., Chapter II). Neither the Guarantor nor any Subsidiary owns or
intends to carry or purchase any "margin stock" within the meaning of
Regulation G, and none of the proceeds from the sale of the Notes will
be used to purchase or carry or refinance any borrowing the proceeds
of which were used to purchase or carry any "margin stock" or "margin
security" in violation of Regulations G, T, U or X.
(t) Condition of Property. All of the facilities of the Guarantor and
each of its Subsidiaries are in sound operating condition and repair
except for facilities being repaired in the ordinary course of
business or facilities which individually or in the aggregate are not
material to the business, properties, operations, or condition,
financial or otherwise, of the Guarantor and its Subsidiaries taken as
a whole.
(u) Books and Records. The Guarantor and each of its Subsidiaries (i)
maintain books, records and accounts in reasonable detail which
accurately and fairly reflect their respective transactions and
business affairs, and (ii) maintain a system of internal accounting
controls sufficient to provide reasonable assurances that transactions
are executed in accordance with management's general or specific
authorization and to permit preparation of financial statements in
accordance with GAAP.
(v) Full Disclosure. Neither the Confidential Information Memorandum
dated as of May 18, 2000 which has heretofore been delivered to you,
the financial statements referred to in paragraph (d) of this Section
3.1, the Perfection Certificate dated as of April 27, 2001 delivered
to the Lenders in connection with the execution and delivery of the
Credit Agreement, nor this Agreement, nor any other statement or
document furnished by the Company or the Guarantor to you in
connection with the negotiation of the sale of the Original 1996
Senior Notes, the issue of the Notes and in connection with the
negotiation of this Agreement, nor any document executed or delivered
in connection therewith, taken together, contain any untrue statement
of a material fact or omit a material fact necessary to make the
statements contained therein or herein not misleading in light of the
circumstances under which they were made. There is no fact known, or
which, with reasonable diligence would be known, by the Guarantor or
the Company which the Guarantor or the Company has not disclosed to
you in writing which has a Material Adverse Effect on or, so far as
the Guarantor or the Company can now foresee, will have a Material
Adverse Effect on the business, property, operations or condition,
financial or otherwise, of the Guarantor and its Subsidiaries taken as
a whole, the ability of the Company to perform its undertakings under
and in respect of this Agreement, the Security Documents and the
Notes, or any Subsidiary Guarantor's ability to perform its
undertakings under and in respect of its Subsidiary Guarantee or any
Security Document to which it is a party.
(w) Environmental Compliance. The Guarantor and each Subsidiary (i) is
in compliance in all material respects with all applicable
environmental, transportation, health and safety statutes and
regulations, including, without limitation, regulations promulgated
under the Resource Conservation and Recovery Act of 1976, 42
U.S.C.'SS''SS'6901 et seq., and (ii) has not
acquired, incurred or assumed, directly or indirectly, any material
contingent liability in connection with the release or storage of any
toxic or hazardous waste or substance into the environment. The
Guarantor and its Subsidiaries have not acquired, incurred or assumed,
directly or indirectly, any material contingent liability in
connection with a release or other discharge of any hazardous, toxic
or waste material, including petroleum, on, in, under or into the
environment surrounding any property owned, used or leased by any of
them.
3.2 Representations of the Purchasers.
(a) As an inducement to, and as part of the Company's consideration for
the sale of the Original 1996 Senior Notes pursuant to the Original Agreement
and for the issue of the Notes pursuant to this Agreement, each of you
represents, respectively, and in entering into this Agreement the Company
understands, that (i) you are an Institutional Holder, (ii) you are acquiring
Notes for the purpose of investment and for your own account and not with a view
to the distribution thereof; provided that the disposition of your Property
shall at all times be and remain within your control, subject, however, to
compliance with Federal securities laws. You acknowledge that the Notes have not
been registered under the Securities Act or the laws of any state and you
understand that the Notes must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. You have been advised that the Company does not contemplate
registering, and is not legally required to register, the Notes under the
Securities Act.
(b) Each of you further represents that either: (i) no part of the
funds used by you to purchase the Notes constituted assets allocated to any
separate account maintained by you; or (ii) no part of the funds used by you to
purchase the Notes constituted assets allocated to any separate account
maintained by you such that the application of such funds will constitute a
prohibited transaction under Section 406 of ERISA; or (iii) all or a part of
such funds constituted assets of one or more separate accounts maintained by
you, and you have disclosed to the Company the names of such employee benefit
plans whose assets in such separate account or accounts exceed 10% of the total
assets or are expected to exceed 10% of the total assets of such account or
accounts as of the date of such purchase and the Company has advised you in
writing that the Company is not a party-in-interest nor are the Notes employer
securities with respect to the particular employee benefit plans disclosed to
the Company by you as aforesaid (for the purpose of this clause (iii), all
employee benefit plans maintained by the same employer or employee organization
are deemed to be a single plan). As used herein, the terms "separate account,"
"party-in-interest," "employer securities," and "employee benefit plan" have the
meanings assigned to them in ERISA.
4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date shall be
subject to the performance by each of the Company and the Guarantor of its
agreements hereunder which are to be performed at or prior to the time of
delivery of the Notes, and to the following conditions to be satisfied on or
before the Closing Date:
4.1 Representations and Warranties.
The representations and warranties of the Guarantor and the Company
contained in this Agreement or otherwise made in writing in connection herewith
shall be true and correct on or as of the Closing Date, and each of the Company
and the Guarantor shall have delivered to you a certificate to such effect,
dated the Closing Date and executed by the President or the chief financial
officer the Company and the Guarantor, respectively.
4.2 Legal Opinions.
You shall have received from Xxxxxxxxx X. Xxxxxxxxx, Vice President,
General Counsel and Secretary to the Company and the Guarantor, and from
Shearman & Sterling, special counsel for the Company, the Guarantor and the
Subsidiary Guarantors, their respective opinions, dated as of such Closing Date,
in connection with transactions contemplated herein, in form and substance
satisfactory to you and covering substantially the matters set forth or provided
in the attached Exhibit B.
4.3 Events of Default.
No event shall have occurred and be continuing on the Closing Date
which would constitute an Event of Default, or with notice or lapse of time or
both would become such an Event of Default, and each of the Company and the
Guarantor shall have delivered to you a certificate to such effect, dated the
Closing Date and executed by the President or the chief financial officer of the
Company and the Guarantor, respectively.
4.4 Payment of Fees and Expenses.
The Company shall have paid all reasonable fees, expenses, costs and
charges, including the fees and expenses of your special counsel, incurred by
you through the date hereof and incident to the proceedings in connection with,
and transactions contemplated by, this Agreement and the Notes (including any
amendments, renewals, supplements or replacements thereto).
4.5 Legality of Investment.
Your acquisition of the Notes shall constitute a legal investment as of
the Closing Date under the laws and regulations of each jurisdiction to which
you may be subject (without resort to any "basket" or "leeway" provision which
permits the making of an investment without restriction as to the character of
the particular investment being made), and such acquisition shall not subject
you to any penalty or other onerous condition in or pursuant to any such law or
regulation.
4.6 Private Placement Number.
A private placement number shall have been obtained from Standard &
Poor's CUSIP Service Bureau (in cooperation with the Securities Valuation Office
of the National Association of Insurance Commissioners).
4.7 Issue of All Notes.
Contemporaneously with the issue of the Notes to you, the Company will
complete and close the issue of Notes being acquired by each of the Purchasers
set forth in Schedule I hereto.
4.8 Proceedings and Documents.
All proceedings taken in connection with the transactions contemplated
by this Agreement, and all documents and instruments incident to such
transactions or necessary to the consummation of such transactions shall be
satisfactory in form and substance to you and your special counsel, and you and
your special counsel shall have received copies (executed or certified as may be
appropriate) of all legal documents or proceedings which you and they may
reasonably request.
4.9 Amendment Fee.
The Company shall have paid to the Noteholders an amendment fee equal
to 0.25% of the principal amount of the Notes on the effective date of this
Agreement. Such fee shall be deemed fully earned and nonrefundable when paid.
4.10 Credit Agreement.
The Company shall have delivered to you a correct, complete and
executed copy of the Credit Agreement and, simultaneously with the execution of
this Agreement, a correct, complete and executed copy of Amendment No. 1 to the
Credit Agreement dated as of May __, 2001.
4.11 Exchange of Notes.
On the Closing Date, the Company shall deliver to each Purchaser the
Notes to be received by such Purchaser as specified in Schedule I in exchange
for any original Notes held by such Purchaser.
5. INTERPRETATION OF AGREEMENT
5.1 Certain Terms Defined.
The terms hereinafter set forth when used in this Agreement shall have
the following meanings:
1992 Note Agreement - means that certain Amended and Restated Note
Agreement Dated as of January 1, 1992 by and among THC Systems, Inc., the
Guarantor and the Purchasers which are signatories thereto, as such agreement
may be amended, restated, modified or supplemented from time to time.
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.
Administrative Agent - means The Chase Manhattan Bank, in its capacity
as administrative agent for the Lenders under the terms and provisions of the
Credit Agreement.
Agreement - has the meaning as defined in Section 1.1.
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,
as set forth in the Credit Agreement as in effect on April 27, 2001 (as such
Level may change as described in Section 7.21 hereof), with such Level to be
determined on the basis of the Consolidated Leverage Ratio of the Guarantor and
its consolidated Subsidiaries as of the last day of each Fiscal Quarter of the
Company as reflected on the financial statements for such Fiscal Quarter
delivered by the Company and the Guarantor pursuant to Section 6.1:
----------------------------------------------------------------------------------------------------------------------
Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 5 Xxxxx 0 Xxxxx 0
----------------------------------------------------------------------------------------------------------------------
Consolidated Leverage Ratio <= 2.50 <= 2.75 <= 3.00 <= 3.25 <= 3.50 <= 4.00 > 4.00
----------------------------------------------------------------------------------------------------------------------
Eurodollar Margin (bps) 150.0 175.0 200.0 250.0 300.0 320.0 335.0
----------------------------------------------------------------------------------------------------------------------
provided that (i) during the period from April 27, 2001 through and including
the date on which the Company and the Guarantor deliver the financial statements
under Section 6.1 for the Fiscal Quarter ending April 28, 2001, the applicable
margin shall be based on Xxxxx 0, and (ii) if the Company or the Guarantor shall
have failed to deliver the financial statements required by Section 6.1 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 8.1 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 6.1 subject to the proviso set forth in the preceding
sentence.
Bank Event - means any reduction in the principal amount of the
Commitment.
Business Day - means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York, New York; Los Angeles, California; or
Chicago, Illinois are required or authorized to be closed.
Capitalized Lease Obligations - means the obligations of any 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.
Capital Stock - means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
regardless of type, class, preference or designation, and any and all equivalent
ownership interests in a Person other than a corporation, including membership
interests, partnership interests, or other equity interests, and any and all
warrants, options, purchase rights, conversion or exchange rights, voting
rights, calls or claims of any character with respect thereto.
Change in Capital - has the meaning as set forth in Section 1.2 hereof.
Change of Control - means the occurrence of any one or more of the
following:
(a) any Person (other than an Executive Officer) or a group of Persons
(other than a group of Persons consisting solely of Executive Officers) shall
purchase or otherwise acquire, directly or indirectly, in one or more
transactions, beneficial ownership of securities representing 20% or more of the
combined voting power of the Guarantor's Voting Stock, determined on the date
prior to the date of such purchase or acquisition (or, if there is more than one
transaction, the date of the last such purchase or acquisition);
(b) the Guarantor shall convey, transfer, lease or otherwise dispose of
all or substantially all Consolidated Total Assets to any Person (other than a
Majority-Owned Subsidiary);
(c) there shall occur, in any consecutive twenty-four month period, a
replacement of or change in a majority of the members of the Board of Directors
of the Guarantor, and such replacement shall not have been initiated by the
Board of Directors which is incumbent at the time of commencement of such
twenty-four month period;
(d) the Guarantor shall merge or consolidate into any other corporation
other than into a Majority-Owned Subsidiary (and the Company shall not be the
surviving corporation) in a transaction in which more than 20% of the voting
power of the Guarantor's Voting Stock (determined on the date prior to the date
of the consummation of such transaction) is exchanged;
(e) the Guarantor or any Subsidiary shall purchase or otherwise
acquire, directly or indirectly, in one or more transactions, beneficial
ownership of Voting Stock of the Guarantor, if, after giving effect to such
purchase or acquisition, the Guarantor (together with all Subsidiaries) shall
have acquired, during any period of twelve consecutive months, beneficial
ownership of an aggregate of 30% or more of the Voting Stock of the Guarantor
outstanding on the date immediately prior to the last such purchase or
acquisition during such period (or, if there is more than one transaction, the
date of the last such purchase or acquisition); or
(f) the Guarantor shall make a distribution of cash, securities or
other properties (other than regular periodic cash dividends at a rate which is
substantially consistent with past practice, including with respect to increases
in dividends, and other than Common Stock or rights to acquire Common Stock) to
holders of capital stock (including by means of dividend, reclassification,
recapitalization or otherwise) which, together with all other such distributions
during the 365-day period preceding the date of such distribution, has an
aggregate fair market value in excess of an amount equal to 30% of the fair
market value of the Voting Stock of the Guarantor outstanding on the date
immediately prior to such distribution.
Closing Date - has the meaning as defined in Section 1.4.
Code - has the meaning as defined in Section 3.1(h).
Collateral - means the assets, properties and rights of the Guarantor
and each Loan Party, whether now owned or hereafter acquired, upon which a Lien
is purported to be created by any Security Document.
Collateral Agent - means The Chase Manhattan Bank or any successor
Collateral Agent appointed by the parties to the Collateral Agency Agreement.
Collateral Agency Agreement - means that certain Collateral Agency and
Intercreditor Agreement dated April 27, 2001 among the Lenders and certain other
senior creditors of the Guarantor, as the same may be amended, supplemented or
modified from time to time.
Commitment - means, with respect to the Credit Agreement, the
commitment to lend thereunder in an amount equal to $275,000,000.
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 the
Guarantor and its 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
Guarantor and its Subsidiaries for any period, the Consolidated EBITDA of any
Person acquired by the Guarantor 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 of 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. Notwithstanding the foregoing, (i) whenever the Consolidated
EBITDA of Viners of Sheffield Limited is included on a pro forma basis for any
period which includes its fiscal quarter ended April 20, 2000, there shall be
excluded a $1,800,000 pre-tax non-recurring employee bonus incurred in such
quarter, and (ii) whenever the Consolidated EBITDA of Delco International Ltd.
is included on a pro forma basis for any period which includes its fiscal
quarter ended July 31, 2000, there shall be excluded $3,000,000 in pre-tax
non-recurring employee bonus and employee compensation charges incurred in such
quarter.
Consolidated Interest Coverage Ratio - means, as of 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
Guarantor and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Guarantor and its Subsidiaries, as determined in accordance
with GAAP.
Consolidated Leverage Ratio - means, as of 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 Guarantor 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
Guarantor 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 Guarantor or a Subsidiary shall have consolidated or which shall
have merged into or with the Guarantor 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;
(f) net earnings of any Person (other than a Subsidiary) in which the
Guarantor or any Subsidiary has an ownership interest unless such net earnings
shall have actually been received by the Guarantor 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 Guarantor 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
Guarantor 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
Guarantor and its Subsidiaries under stockholders' equity at such date.
Consolidated Total Assets - means the consolidated total assets of the
Guarantor and its Subsidiaries determined in accordance with GAAP.
Consolidated Total Debt - means, as of the date of determination, the
aggregate principal amount of all Indebtedness of the Guarantor 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.
Credit Agreement - means that certain Amended and Restated Credit
Agreement dated as of April 27, 2001, among the Guarantor, The Chase Manhattan
Bank, as Administrative Agent and Collateral Agent, Banc of America Securities,
LLC, as Syndication Agent, Fleet National Bank, as Documentation Agent, HSBC
Bank, USA, as Senior Managing Agent, Chase Securities Inc., as Arranger, and the
banks signatory to such agreement, as such agreement may be from time to time
amended. The term "Credit Agreement" shall also include replacement or
additional credit agreements entered into by the Guarantor or any Subsidiary
with banks or other institutional lenders.
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.
Deposit Accounts - means a demand, time, savings, passbook or other
deposit account maintained with a bank, savings and loan association, credit
union or other financial institution, or a branch of any the foregoing.
Determination Date - means the day two (2) Business Days prior to the
date fixed for a prepayment pursuant to a notice required by Sections 2.2(b) or
2.3 or the day two (2) Business Days prior to the date of declaration pursuant
to Section 8.2.
ERISA - has the meaning as defined in Section 3.1(h).
Event of Default - has the meaning as defined in Section 8.1.
Exchange Act - means the Securities Exchange Act of 1934, as amended,
and as it may be further amended from time to time.
Executive Officers - means the Persons listed as "executive officers"
in the most recent Form 10-K of the Guarantor filed pursuant to the Exchange
Act.
Fiscal Quarter or Fiscal Year - means the fiscal quarter or fiscal year
of the Guarantor.
GAAP - means generally accepted accounting principles in the United
States of America, consistently applied.
Governmental Authority - means:
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Guarantor or any
Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any Properties of the
Guarantor or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any
such government.
Guaranties - means all obligations (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
of a Person guaranteeing or, in effect, guaranteeing any Indebtedness, dividend
or other obligation, of any other Person in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such
Person: (i) to purchase such Indebtedness or obligation or any Property or
assets constituting security therefor, (ii) to advance or supply funds (x) for
the purchase or payment of such Indebtedness or obligation, (y) to maintain
working capital or other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or obligation,
(iii) to lease Property or to purchase securities or other Property or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation, or (iv) otherwise to assure the owner of the Indebtedness or
obligation against loss in respect thereof. For the purposes of all computations
made under this Agreement, a Guaranty in respect of any Indebtedness for
borrowed money shall be deemed to be Indebtedness equal to the principal amount
of such Indebtedness for borrowed money which has been guaranteed, and a
Guaranty in respect of any other obligation or liability or any dividend shall
be deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation, liability or dividend.
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 - means (i) 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, (ii) all Guaranties
(other than Guaranties of Indebtedness of the Guarantor by a Subsidiary
Guarantor in accordance with Section 7.1(d) or of a Subsidiary Guarantor by the
Guarantor in accordance with Section 7.1(d)), 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 (iii) all items of borrowed money secured by
any mortgage, pledge or Lien existing on Property owned subject to such
mortgage, pledge, or Lien, whether or not the borrowed money secured thereby
shall have been assumed by the Guarantor or any Subsidiary. Indebtedness of the
Guarantor and its Subsidiaries as of November 26, 1996 is set forth in Annex II
hereto.
Institutional Holder - means any bank, trust company, insurance
company, pension fund, mutual fund or other similar financial institution,
including, without limiting the foregoing, any "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act, which is or becomes a
Noteholder.
Investments - means all investments made, in cash or by delivery of
Property, directly or indirectly, in any Person, whether by acquisition of
shares of capital stock, indebtedness or other obligations or securities or by
loan, advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in Property to be
used or consumed in the ordinary course of business.
Lenders - means the lenders to the Guarantor pursuant to the terms and
conditions of the Credit Agreement.
Level - has the meaning ascribed to such term in the definition of
Applicable Margin set forth herein.
Lien - means any mortgage, deed of trust, hypothecation, pledge,
security interest, encumbrance, lien or charge of any kind, including any
agreement to grant any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to file any financing statement under the Uniform Commercial Code of
any jurisdiction in connection with any of the foregoing, and in the case of
securities other than those of Xxxxxx Zwiesel Glaswerke, AG, any purchase,
option, call or similar right of a third party with respect to such securities.
Loan or Loans - means a loan or the loans made by the Lenders to the
Guarantor pursuant to the terms and conditions of the Credit Agreement.
Loan Party - means the Guarantor and each Material Domestic Subsidiary
of the Guarantor which is a party to a Transaction Document, and any other
Person which guaranties, or grants a Lien on any of its
assets to secure, the obligations under this Agreement, the 1992 Note Agreement,
the Credit Agreement or any of the other Transaction Documents.
Long-Term Lease - means any lease of real or personal Property (other
than a Capital Lease Obligation) having an original term of more than three
years, including any period for which the lease may be renewed at the option of
the lessor, whether or not theretofore renewed.
Majority-Owned - means, when applied to a Subsidiary, any Subsidiary
80% of the Voting Stock of which is owned by the Guarantor and/or its
Majority-Owned Subsidiaries.
Material Adverse Effect - means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Guarantor and its Subsidiaries taken as a whole, (b) the ability of the
Company to perform any of its obligations under this Agreement or (c) the rights
of or benefits available to the Noteholders under this Agreement.
Material Domestic Subsidiary - means any Subsidiary which is
incorporated in the United States of America, any State thereof, or the District
of Columbia, and whose assets, as of the end of the most recent Fiscal Quarter,
account for five percent (5%) or more of the total assets of the Company and its
Subsidiaries, taken as a whole, determined in accordance with GAAP.
Material Foreign Subsidiary - means any Subsidiary which is
incorporated in an jurisdiction other than the United States of America, any
State thereof, or the District of Columbia, and whose assets, as of the end of
the most recent Fiscal Quarter, account for five percent (5%) or more of the
total assets of the Company and its Subsidiaries, taken as a whole, determined
in accordance with GAAP.
Noteholder - means any holder of a Note.
Notes - has the meaning as defined in Section 1.1.
PBGC - has the meaning as defined in Section 3.1(h).
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 two
hundred and seventy (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 Xxxxx'x;
(c) Investments in certificates of deposit, banker's
acceptances and time deposits maturing within one hundred
and eighty (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;
(d) fully collateralized repurchase agreements with a term
of not more than thirty (30) days for securities described
in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c)
above;
(e) Hedging Agreements permitted by the terms of this
Agreement and the Credit Agreement;
(f) Investments arising in connection with the bankruptcy or
reorganization of a customer or supplier in settlement of
delinquent obligations owed by such customer or supplier and
not exceeding the amount of such obligations owed;
(g) loans or advances made in the ordinary course of
business to officers or directors of the Guarantor or any
Subsidiary not exceeding $200,000 in the aggregate
outstanding at any time;
(h) Investments in Subsidiary Guarantors;
(i) Investments made in the ordinary course of business in
Property and assets to be used in the ordinary course of
business of the Guarantor and its Subsidiaries;
(j) Investments in tax-exempt municipal bonds maturing not
more than one year from the date of issue and which bear at
least a MIG-1 rating; and
(k) Guaranties by the Guarantor of Long-Term Leases of
Majority-Owned Subsidiaries.
Person - means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Plan - has the meaning as defined in Section 3.1(h).
Pledge Agreement - means the Pledge Agreement dated April 27, 2001
executed by the Guarantor and each Subsidiary Guarantor substantially in the
form of Exhibit F attached to the Credit Agreement, as the same may be amended,
supplemented, or otherwise modified from time to time.
Pro Rata Amount - means, in connection with Section 2.1 hereof, the
percentage amount of any reduction in the Commitment, such percentage to
constitute the percentage of the aggregate principal amount of Notes then
outstanding to be prepaid pursuant to Section 2.1 hereof.
Property or Properties - means any real or personal or tangible or
intangible asset.
Reinvestment Yield - means the sum of (i) the yield set forth on page
"USD" of the Bloomberg Financial Markets Service at 11:00 a.m., Central Time on
the Determination Date opposite the maturity of the U.S. Treasury Security
corresponding to the Weighted Average Life to Maturity, rounded to the nearest
month, of the principal amount of the Notes to be prepaid, plus (ii) .50 of 1%
with respect to Notes to be prepaid pursuant to Section 2.2(a) or (b) or Notes
the payment of which has been accelerated with premium pursuant to Section 8.2.
If no maturity exactly corresponding to such rounded Weighted Average Life to
Maturity shall appear therein, yields for the two most closely corresponding
published maturities (one of which occurs prior and the other subsequent to the
Weighted Average Life to Maturity) shall be calculated pursuant to the foregoing
sentence and the Reinvestment Yield shall be interpolated from such yields on a
straight-line basis (rounding in each of such relevant periods, to the nearest
month).
Rentals - means, as of the date of any determination thereof, all fixed
payments (including all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the Property) payable by the
Guarantor or a Subsidiary, as lessee or sublessee under a lease of real or
personal Property, but exclusive of any amounts required to be paid by the
Guarantor or a Subsidiary (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes, assessments,
amortization and similar charges. Fixed rents under any so-called "percentage
leases" shall be computed solely on the basis of the minimum rents, if any,
required to be paid by the lessee regardless of sales volume or gross revenues.
Securities Act - means the Securities Act of 1933, as amended, and as
it may be further amended from time to time.
Security Agreement - means that certain Security Agreement dated as of
April 27, 2001 executed by the Guarantor and each Subsidiary Guarantor
substantially in the form attached hereto as Exhibit C, as the same may be
amended, supplemented, or otherwise modified from time to time.
Security Documents - means, collectively, the Security Agreement,
Pledge Agreement, and all financing statements, collateral assignments and other
security documents delivered to the Collateral Agent granting or purporting to
xxxxx x Xxxx on any assets to secure the obligations of the Guarantor or any
Loan Party under the Credit Agreement, this Agreement, the 1992 Note Agreement
or any of the Transaction Documents.
Senior Secured Indebtedness - means indebtedness or obligations of the
Guarantor and its Subsidiaries which are secured by the Liens created by the
Security Documents, including, without limitation, (i) Indebtedness under this
Agreement, the 1992 Note Agreement and the Credit Agreement and (ii) obligations
under Hedging Agreements to which any Lender is a party.
Subordinated Debt - means all Indebtedness of the Guarantor or its
Subsidiaries subordinated in right of payment to Indebtedness arising under this
Agreement or the 1992 Note Agreement by written terms or agreement in form and
substance satisfactory to the Lenders and the Noteholders.
Subsidiary - means any corporation of which more than 50% of the
outstanding shares of Voting Stock are owned or controlled by the Guarantor or
one or more Subsidiaries.
Subsidiary Guarantees - means those certain Amended and Restated
Subsidiary Guarantee Agreements substantially in the form attached as Exhibit E
hereto executed by each Subsidiary Guarantor, as the same may be amended,
supplemented, or otherwise modified from time to time.
Subsidiary Guarantors - means each of Buffalo China, Inc., Encore
Promotions, Inc., THC Systems, Inc. (formerly known as Oneida Community China,
Inc.), Sakura, Inc. (formerly known as Oneida Community China, Inc.), Delco
International Ltd., and each Subsidiary created or acquired after January 19,
1996, which becomes a "Guarantor" as such term is defined in the Credit
Agreement or which is required to issue a Subsidiary Guarantee pursuant to
Section 7.18.
Subsidiary Subordination Agreement - means that certain Amended and
Restated Subsidiary Subordination Agreement substantially in the form attached
as Exhibit D hereto executed by each Subsidiary Guarantor, as the same may be
amended, supplemented, or otherwise modified from time to time.
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 the
Guarantor's name for use on toys.
Transaction Documents - means, collectively, this Agreement, the 1992
Note Agreement, the Credit Agreement, any promissory note delivered to a Lender
evidencing the Loans, the Subsidiary Guarantees, the Subsidiary Subordination
Agreements, the Security Documents, any agreement between the Guarantor and the
Collateral Agent or the Administrative Agent with respect to the payment of
fees, any Hedging Agreement entered into with a Lender or an Affiliate of the
Lender, the Chase Working Capital Facility, as such term is defined in the
Security Agreement, the Scotiabank Metal Line, as such term is defined in the
Security Agreement, the LC's, as such term is defined in the Security Agreement,
and each other document, agreement or instrument delivered
pursuant to the terms of any of the foregoing, as the same may be amended,
supplemented or otherwise modified from time to time.
Voting Stock - means the capital stock of any class of a corporation
having power to vote for the election of members of the board of directors of
such corporation, or persons performing similar functions (whether or not at the
time stock of any class shall have or might have special voting powers or rights
by reason of the happening of any contingency).
Weighted Average Life to Maturity - means, as applied to any prepayment
of principal of the Notes, at any date, the number of years obtained by dividing
(a) the then outstanding principal amount of the Notes to be prepaid into (b)
the sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity, or other required payment,
including payment at final maturity, foregone by such prepayment by (ii) the
number of years (calculated to the nearest 1/12th) which will elapse between
such date and the making of such payment.
Wholly-Owned Subsidiary - means, when applied to a Subsidiary, any
Subsidiary 100% of the Voting Stock of which is owned by the Guarantor or its
Wholly-Owned Subsidiaries.
Terms which are defined in other Sections of this Agreement shall have
the meanings specified therein.
5.2 Accounting Principles.
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 Company notifies the Noteholders
that the Company 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 (or if the Noteholders
notifies the Company that the Noteholders request an amendment to any provision
hereof for such purpose), 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.
5.3 Valuation Principles.
Except where indicated expressly to the contrary by the use of terms
such as "fair value," "fair market value" or "market value," each asset, each
liability and each capital item of any Person, and any quantity derivable by a
computation involving any of such assets, liabilities or capital items, shall be
taken at the net book value thereof for all purposes of this Agreement. "Net
book value", for purposes herein, with respect to any asset, liability or
capital item of any Person shall mean the amount at which the same is recorded
or, in accordance with GAAP, should have been recorded in the books of account
of such Person, as reduced by any reserves which have been or, in accordance
with GAAP, should have been set aside with respect thereto, without giving
effect to any write-up, write-down or write-off, relating thereto which was made
after the date of this Agreement.
5.4 Direct or Indirect Actions.
Where any provision in this Agreement refers to action to be taken by
any Person, or which such Person is prohibited from taking, such provision shall
be applicable whether the action in question is taken directly or indirectly by
such Person.
5.5 Property.
Wherever the word "property" is used in this Agreement, the lower case
"p" is changed to the upper case "P".
5.6 Officers.
Wherever the phrase "chief financial officer" or "chief
accounting officer" is used, the phrase "or Senior Vice President, Finance,
Treasurer or Controller" shall be added.
6. AFFIRMATIVE COVENANTS
Each of the Company and the Guarantor agrees that, for so long
as any amount remains unpaid on any Note:
6.1 Financial and Business Information and Reports.
The Company and the Guarantor will furnish to you and to any
other Institutional Holder (in duplicate if you or such other holder so
request), the following:
(a) As soon as available and in any event within forty five
(45) days after the end of each Fiscal Quarter of the
Guarantor (including the forth Fiscal Quarter), a consolidated
balance sheet of the Guarantor and its Subsidiaries as of the
end of such Fiscal Quarter and for the then-elapsed portion of
the Fiscal Year, and related consolidated statements of
earnings and cash flows of the Guarantor and its Subsidiaries
for such Fiscal Quarter, setting forth in comparative form the
corresponding consolidated figures as of and for the
corresponding period or periods then ended of the previous
Fiscal Year, all in reasonable detail prepared in accordance
with GAAP (except for changes disclosed in such financial
statements or in the notes thereto and concurred in by the
Guarantor's independent certified public accountants) and
certified by the chief financial officer or chief accounting
officer or Senior Vice President, Finance of the Guarantor (i)
outlining the basis of presentation, and (ii) stating that the
information presented in such financial statements presents
fairly the financial condition of the Guarantor and its
Subsidiaries and the results of operations of the Guarantor
and its Subsidiaries on a consolidated basis, subject to
customary year-end audit adjustments; provided that so long as
the Guarantor shall file a quarterly report on Form 10-Q or
any similar form with the Securities and Exchange Commission
or any successor agency which contains the information set
forth in this paragraph (a), the requirements of this
paragraph (a) shall be satisfied by forwarding Form 10-Q to
the holder of the Notes within such 45-day period;
(b) As soon as available and in any event within ninety (90)
days after the last day of each Fiscal Year an audited
consolidated and consolidating balance sheet of the Guarantor
and its Subsidiaries as of the end of such Fiscal Year and the
related audited consolidated and consolidating statements of
earnings, stockholders' equity and cash flows for such Fiscal
Year, in each case setting forth in comparative form figures
for the preceding Fiscal Year, all in reasonable detail,
prepared in accordance with GAAP (except for changes disclosed
in such financial statements or in the notes thereto and
concurred in by independent certified public accountants) and
accompanied by a report of PricewaterhouseCoopers LLP, or any
firm of independent public accountants of recognized national
standing selected by the Guarantor, (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 financial statements have been prepared
in conformity with GAAP and present fairly, in all material
respects, the financial condition and results of operations of
the Guarantor and its Subsidiaries on a consolidated basis;
provided that so long as the Guarantor shall file an annual
report on Form 10-K or any similar form with the Securities
and Exchange Commission or any successor agency which contains
the information set forth in this paragraph (b), the
requirements of this paragraph (b) shall be satisfied by
forwarding Form 10-K to the holder of the Notes within such
90-day period;
(c) Together with the financial statements delivered pursuant
to paragraphs (a) and (b) of this Section 6.1, a certificate
of the chief financial officer or chief accounting officer or
Senior Vice President, Finance of each of the Guarantor and
the Company, (i) to the effect that such officer has
re-examined the terms and provisions of this Agreement and
that as of the date of such certificate, during the periods
covered by such financial reports and as of the end of such
periods, the Company and the Guarantor, respectively, is not,
or was not, in default in the fulfillment of any of the terms,
covenants, provisions and conditions of this Agreement or, in
the case of the Guarantor, this Agreement or the Guaranty
Agreement, and that no Event of Default, or event which, with
the lapse of time or the giving of notice, or both, would
become an Event of Default, is occurring or has occurred as of
the date of such certificate, during such periods and as of
the end of such periods, or if the signer is aware of any such
default, event or Event of Default, such xxxxxx shall disclose
in such statement the nature thereof, its period of existence
and what action, if any, the Company or the Guarantor has
taken or proposes to take with respect thereto, (ii) stating
whether the Guarantor is in compliance with Sections 7.1
through 7.20 and setting forth, in sufficient detail, the
information and computations required to establish whether or
not the Guarantor was in compliance with the requirements of
such Sections 7.1 through 7.20 during the periods covered by
the financial reports then being furnished and as of the end
of such periods 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 3.1(d)
and, if any such change has occurred, specifying the effect of
such change on the financial statements accompanying such
certificate;
(d) Together with the financial reports delivered pursuant to
paragraph (b) of this Section 6.1, a certificate of the
independent certified public accountants (i) stating that in
making the examination necessary for expressing an opinion on
such financial statements, nothing came to their attention
that caused them to believe that there is in existence or has
occurred any Event of Default hereunder, or any event (the
occurrence of which is ascertainable by accountants in the
course of normal audit procedures) which, with the lapse of
time or the giving of notice, or both, would become an Event
of Default hereunder or, if such accountants shall have
obtained knowledge of any such event or Event of Default,
describing the nature thereof and the length of time it has
existed and (ii) acknowledging that holders of the Notes may
rely on their opinion on such financial statements;
(e) Within fifteen (15) days after the Guarantor obtains
knowledge thereof, notice of any litigation not fully covered
by insurance or any governmental proceeding pending against
the Guarantor or any Subsidiary in which the damages sought
exceed Five Million Dollars ($5,000,000) or which might
otherwise materially adversely affect the business, Property,
operations or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole;
(f) As soon as available, copies of each financial statement,
notice, report and proxy statement which the Guarantor shall
furnish to its stockholders; copies of all press releases;
copies of each registration statement and periodic report
which the Guarantor may file with the Securities and Exchange
Commission, and any other similar or successor agency of the
Federal government administering the Securities Act, the
Exchange Act or the Trust Indenture Act of 1939, as amended;
copies of each report relating to the Guarantor or its
securities which the Guarantor may file with any securities
exchange on which any of the Guarantor's securities may be
registered; copies of any orders in any material proceedings
to which the Guarantor or any of its Subsidiaries is a party,
issued by any governmental agency, Federal or state, having
jurisdiction over the Guarantor or any of its Subsidiaries;
and, except at such times as the Guarantor is a reporting
company under Section 13 or 15(d) of the Exchange Act or has
complied with the requirements for the exemption from
registration under the Exchange Act set forth in Rule
12g-3-2(b), such financial or other information as any holder
of the Notes may reasonably determine is required to permit
such holder to comply with the requirements of Rule 144A under
the Securities Act in connection with the resale by it of the
Notes;
(g) As soon as available, a copy of each other report
submitted to the Guarantor or any Subsidiary by independent
accountants retained by the Guarantor or any Subsidiary in
connection with any interim or special audit made by them of
the books of the Guarantor or any Subsidiary;
(h) On or before the commencement of each Fiscal Year of the
Guarantor, a copy of the budget of the Guarantor and its
Subsidiaries for such Fiscal Year;
(i) (1) promptly, and in any event within five (5) days after
an Executive Officer becoming aware of the Guarantor's breach
of a covenant, default or event of default under the Credit
Agreement, a written notice setting forth the nature of such
breach and the action, if any, that the Guarantor proposes to
take or has taken with respect thereto and any responses
received by the Guarantor from the Lenders with respect to
such breach; and (2) promptly, and in any event within the
applicable time period specified in the Credit Agreement, all
information, notices, certificates and other documents
required to be delivered by the Guarantor to the Lenders
pursuant to such Credit Agreement;
(j) Immediately upon any increase or reduction in the
Commitment, a written notice setting xxxx such increase or
reduction in the Commitment and copies of any documents given
to the Lenders or executed in connection with such increase or
reduction in the Commitment;
(k) Promptly after becoming known to an Executive Officer
written notice of the filing or commencement of any action,
suit or proceeding by or before any arbitrator or Governmental
Authority against or affecting the Guarantor or any Affiliate
thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(l) Promptly written notice of any amendment to or other
modification of or replacement of the Credit Agreement and
copies of such amendment or modification or replacement
documentation;
(m) Promptly, and in any event within five (5) days, written
notice of (a) any increase or decrease in the Level from that
which is in effect on May __, 2001, (b) any other compensation
requested by the Collateral Agent or the Lenders and (c) any
change by the Guarantor from "Eurodollar" (as defined in the
Credit Agreement) pricing to "ABR" (as defined in the Credit
Agreement) pricing under the terms of the Credit Agreement
when such "ABR" pricing remains in effect for more than ten
(10) consecutive Business Days with respect to any borrowing
under the terms of the Credit Agreement of more than Ten
Million Dollars ($10,000,000); and
(n) Promptly following receipt of any request therefor, such
additional information concerning the Guarantor and its
Subsidiaries or compliance with the terms of this Agreement.
6.2 ERISA.
(a) The Guarantor agrees that all assumptions and methods used
to determine the actuarial valuation of employee benefits, both vested and
unvested, under any Plan of the Guarantor or any Subsidiary, and each such Plan,
whether now existing or adopted after the date hereof, will comply in all
material respects with ERISA and other applicable laws.
(b) The Guarantor will not at any time permit any Plan
established, maintained or contributed to by it or any Subsidiary or "affiliate"
(as defined in Section 407(d)(7) of ERISA) to:
(i) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Code or in
Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as
such term is defined in Section 412 of the Code or
Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are
likely to result in the imposition of a lien on the
Property of the Guarantor or any Subsidiary pursuant
to Section 4068 of ERISA, if and to the extent such
termination is within the control of the Guarantor;
if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Guarantor or any Subsidiary or ERISA affiliate to a
liability which, in the aggregate, is material in relation to the business,
Property, operations, or condition, financial or otherwise, of the Guarantor and
its Subsidiaries taken as a whole.
(a) Upon the request of you or any other Institutional Holder,
the Guarantor will furnish a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service. Copies of annual reports
shall be delivered no later than thirty (30) days after the later of the date
such report has been filed with the Internal Revenue Service or the date the
copy is requested.
(b) Promptly upon the occurrence thereof, the Guarantor will
give you and each other Institutional Holder written notice of (i) a reportable
event with respect to any Plan; (ii) the institution of any steps by the
Guarantor, any Subsidiary, any ERISA affiliate, the PBGC or any other person to
terminate any Plan; (iii) the institution of any steps by the Guarantor, any
Subsidiary, or any ERISA affiliate to withdraw from any Plan; (iv) a prohibited
transaction in connection with any Plan; (v) any material increase in the
contingent liability of the Guarantor or any Subsidiary with respect to any
post-retirement welfare liability; or (vi) the taking of any action by the
Internal Revenue Service, the Department of Labor or the PBGC with respect to
any of the foregoing which, in any of the events specified above, would result
in any material liability of the Guarantor or any of its Subsidiaries.
6.3 Corporate Existence.
The Guarantor will maintain and preserve, and will cause each
Subsidiary to maintain and preserve, its corporate existence and right to carry
on its business and use, and cause each Subsidiary to use, its best efforts to
maintain, preserve, renew and extend all of its rights, powers, privileges,
licenses, permits and franchises necessary to the proper conduct of its
business; provided, however, that the foregoing shall not prevent any
transaction permitted by Sections 7.3 or 7.4.
6.4 Payment of Obligations.
The Guarantor will, and will cause each of its Subsidiaries
to, pay its obligations 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) the
Guarantor 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.
6.5 Maintenance of Properties.
The Guarantor will maintain, preserve and keep, and will cause
each Subsidiary to maintain, preserve and keep, its properties (whether owned in
fee or a leasehold interest) in good repair and working order, ordinary wear and
tear excepted, and from time to time will make all necessary repairs,
replacements, renewals and additions.
6.6 Insurance.
The Guarantor will insure and keep insured at all times all of
its properties and all of its Subsidiaries' properties which are of an insurable
nature and of the character usually insured by companies operating similar
properties, against loss or damage by fire and from other causes customarily
insured against by companies engaged in similar businesses in such amounts as
are usually insured against by such companies. The Guarantor also will maintain
for itself and its Subsidiaries at all times with financially sound and
reputable insurers adequate insurance against loss or damage from such hazards
and risks to the person and property of others as are usually insured against by
companies operating properties similar to the properties of the Guarantor and
its
Subsidiaries. All such insurance shall be carried with financially sound and
reputable insurers accorded a rating of A-XII or better by A.M. Best Company,
Inc. A summary of insurance presently in force is contained in the attached
Annex IV.
6.7 Maintenance of Records.
The Guarantor will keep, and will cause each Subsidiary to
keep, at all times proper books of record and account in which full, true and
correct entries will be made of all dealings or transactions of or in relation
to the business and affairs of the Guarantor or such Subsidiary, in accordance
with GAAP (except for such changes as are disclosed in such financial statements
or in the notes thereto and concurred in by the independent certified public
accountants), and the Guarantor will, and will cause each Subsidiary to, provide
reasonable protection against loss or damage to such books of record and
account.
6.8 Inspection of Properties and Records; Confidentiality.
The Guarantor will allow, and will cause each Subsidiary to
allow, any representative of you or any other Institutional Holder, so long as
you or such other Institutional Holder holds any Note, at your expense, to visit
and inspect any of its properties, to examine its books of record and account
and to discuss its affairs, finances and accounts with its officers and its
public accountants (and by this provision the Guarantor authorizes such
accountants to discuss with you or such Institutional Holder its affairs,
finances and accounts), all at such reasonable times and as often as you or such
Institutional Holder may reasonably request. So long as an Event of Default or
an event which, with the passage of time or the giving of notice, or both, would
become an Event of Default has occurred and is continuing, the Guarantor agrees
to pay the costs of any inspections made pursuant to this Section 6.8. Each
Noteholder covenants and agrees to treat as confidential all nonpublic
information furnished to it pursuant to the provisions of Sections 6.1 and this
6.8 which has been designated in writing as confidential by an officer of the
Guarantor; provided that each Noteholder reserves the right to make such
disclosure to (i) such Noteholder's directors, officers, employees, auditors,
financial advisers, rating agencies and attorneys, (ii) any other Noteholder,
(iii) any Person to which such Noteholder offers to sell such Note or any part
thereof or a participation in all or any part of such Note, (iv) any Federal or
state regulatory authority having jurisdiction over such Noteholder, (v) the
National Association of Insurance Commissioners or any similar organization,
(vi) effect compliance with any law, rule, regulation or order applicable to you
or any other Institutional Holder, (vii) in response to any subpoena or other
legal process, (viii) in connection with any litigation to which you or any
other Institutional Holder are a party, or (ix) if an Event of Default has
occurred and is continuing, to the extent you or any other Noteholder may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under the
Notes, this Agreement, the Subsidiary Guarantees or the Subsidiary Subordination
Agreement. The confidentiality restrictions contained in this Section 6.8 shall
not apply to information which (a) is or becomes generally available to the
public other than as a result of a disclosure by any Noteholder or its
representatives that is authorized by this Section 6.8 or (b) becomes available
to any Noteholder on a nonconfidential basis from a source other than the
Guarantor or one of its agents.
6.9 Compliance with Laws.
The Guarantor will comply, and will cause each Subsidiary to
comply, with all laws, rules and regulations relating to its or their respective
businesses, other than laws, rules and regulations the failure to comply with
which or the sanctions and penalties resulting therefrom, individually or in the
aggregate, would not have a Material Adverse Effect on the business, Property,
operations, or condition, financial or otherwise, of the Guarantor or such
Subsidiary, and would not result in the creation of a Lien which, if incurred in
the ordinary course of business, would not be permitted by Section 7.2 on any of
the Property of the Guarantor or any Subsidiary; provided, however, that the
Guarantor and its Subsidiaries shall not be required to comply with laws, rules
and regulations the validity or applicability of which are being contested in
good faith and by appropriate proceedings; provided that the failure to comply
with such laws, rules or regulations would not have a Material Adverse Effect on
the business, Properties, operations, assets or condition, financial or
otherwise, of the Guarantor and its Subsidiaries taken as a whole.
6.10 Subsidiary Guarantees and Collateral.
The Guarantor shall cause each Subsidiary which becomes a
Material Domestic Subsidiary after the Closing Date (whether by creation,
acquisition, expansion or otherwise) to promptly execute and deliver to the
Noteholders and the Administrative Agent or the Collateral Agent, as the case
may be, (a) a Subsidiary Guarantee and Subsidiary Subordination Agreement, (b)
instruments in form and substance reasonably satisfactory to the Noteholders and
the Collateral Agent pursuant to which the new Material Domestic Subsidiary
shall become a party to the Security Documents, and (c) such other financing
statements, documents and certificates as may be reasonably requested by the
Noteholders and the Administrative Agent or the Collateral Agent, as the case
may be, to establish the organization and good standing of such Material
Domestic Subsidiary, the due authorization and the execution of the Subsidiary
Guarantee, Subsidiary Subordination Agreement and the Security Documents, and
the perfection of the Liens created by the Security Documents. With respect to
each new Material Domestic Subsidiary or Material Foreign Subsidiary formed or
acquired after the Closing Date, the Guarantor and each Material Domestic
Subsidiary shall, in addition to executing the documents described in the
preceding sentence, pledge and deliver to the Collateral Agent, for the benefit
of the Noteholders and the Lenders, 100% of the Capital Stock of each new
Material Domestic Subsidiary and 65% of the Capital Stock of each new Material
Foreign Subsidiary), together with undated stock powers duly executed in blank.
6.11 Maintenance of Liens of the Security Documents.
The Guarantor shall, and shall cause each Material Domestic
Subsidiary to: (a) promptly, upon the reasonable request of the Noteholders or
the Collateral Agent, at the Guarantor's expense, execute, acknowledge and
deliver any document or instrument supplemental to or confirmatory of the
Security Documents or otherwise reasonably deemed by the Collateral Agent or the
Noteholders necessary or desirable for the continued validity, perfection and
priority of the Liens in the Collateral covered thereby, and (b) promptly notify
the Collateral Agent and the Noteholders in writing of any change in (i) its
corporate name, (ii) the location of its chief executive office, its principal
place of business or any office in which it maintains books or records relating
to Collateral or at which the Collateral is located (including the establishment
of any new office or facility), (iii) in its identity or corporate structure
(iv) any newly acquired intellectual property registrations or applications
therefore in the United States owned by it, or (v) in its federal taxpayer
identification number. If, at any time after April 27, 2001, the Guarantor or
any of its Material Domestic Subsidiaries shall acquire property which is
required by the terms hereof or of any of the Security Documents to be subject
to a Lien created by the Security Documents but is not subject to such Lien, as
soon as possible after the acquisition date of such property, the Guarantor
shall grant or cause to be granted to the Collateral Agent, for the benefit of
the Lenders and the Noteholders, a first priority Lien in such property pursuant
to documentation reasonably satisfactory in form and substance to the Collateral
Agent and the Noteholders.
6.12 Taxes, Claims for Labor and Materials.
The Guarantor will pay and discharge when due, and will cause
each Subsidiary to pay and discharge when due, all taxes, assessments and
governmental charges or levies imposed upon it or its property or assets, or
upon properties leased by it (but only to the extent required to do so by the
applicable lease), prior to the date on which penalties attach thereto, and all
lawful claims which, if unpaid, might become a Lien upon its property or assets,
provided that neither the Guarantor nor any Subsidiary shall be required to pay
any such tax, assessment, charge, levy or claim, the payment of which is being
contested in good faith and by proper proceedings that will stay the forfeiture
or sale of any property and with respect to which adequate reserves are
maintained in accordance with GAAP.
6.13 Acquisition of Notes.
The Company will forthwith cancel any Notes in any manner or
at any time acquired by the Company, the Guarantor or any Subsidiary or
Affiliate, and such Notes shall not be deemed to be outstanding for any of the
purposes of this Agreement or the Notes.
6.14 Private Placement Number.
The Company and the Guarantor consent to the filing of copies
of this Agreement with Standard & Poor's CUSIP Service Bureau and the National
Association of Insurance Commissioners to obtain a private placement number.
6.15 NAIC Filings.
The Guarantor shall, on the date it provides its audited
financial statements to the Noteholders pursuant to Section 6.1(b),
simultaneously provide such statements to the National Association of Insurance
Commissioners, Securities Valuation Office, 000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
6.16 THC Systems, Inc. Voting Stock.
The Guarantor shall at all times own 100% of the Voting Stock
of THC Systems, Inc.
6.17 Most Favored Nation.
If the Guarantor or any Subsidiary (i) becomes in any
agreement or instrument subject to additional or more restrictive covenants,
reporting requirements, events of default or provisions regarding any
guaranties, security interests or collateral (including all definitions relating
to the foregoing) than those imposed on them by this Agreement or (ii) grants to
any Person more favorable covenants, reporting requirements, events of default
or provisions regarding any guaranties, security interests or collateral
(including all definitions relating to the foregoing) than are granted to any
Noteholder pursuant to this Agreement, the Guarantor shall immediately notify in
writing and provide to the Noteholders a copy of such covenant, reporting
requirements, events of default or other provisions (and all definitions
relating to the foregoing) and this Agreement shall be deemed to be amended
automatically to incorporate such covenants, reporting requirements, events of
default or other provisions (and all such definitions relating to the
foregoing). The Guarantor hereby agrees to cooperate with the Noteholders in
connection with the execution and delivery to the Noteholders of an amendment to
this Agreement incorporating any such covenants, reporting requirements, events
of default or other provisions (and all such definitions relating to the
foregoing). Any amendment to this Agreement pursuant to this Section 6.17 shall
remain in effect only so long as such other covenants, reporting requirements,
events of default or other provisions (and all such definitions relating to the
foregoing) remain in effect.
7. NEGATIVE COVENANTS
Each of the Company and the Guarantor agrees that, for so long
as any amount remains unpaid on any Note:
7.1 Indebtedness.
The Guarantor 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 7.12 hereof:
(a) Indebtedness created hereunder and under the
other Transaction Documents;
(b) Indebtedness existing under the Original
Agreement and set forth in Annex II hereto, and
extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding
principal amount thereof
(c) Indebtedness of the Guarantor to any
Subsidiary and of any Subsidiary to the Guarantor
or to any other Subsidiary, provided that
Indebtedness of Subsidiaries who are not Material
Domestic Subsidiaries owed to the Guarantor
or to any Material Domestic Subsidiary shall not
exceed $35,000,000 in the aggregate, of which no
more than $25,000,000 may be owed by Subsidiaries
other than Kenwood Silver Company, Inc.;
(d) Guaranties by the Guarantor of Indebtedness of
any Subsidiary permitted under this Agreement and
by any Subsidiary of Indebtedness of the Guarantor
or of any other Subsidiary permitted under this
Agreement, provided that the Guarantor and the
Material Domestic Subsidiaries shall not Guaranty
Indebtedness of Subsidiaries which are not
Material Domestic Subsidiaries in excess of
$15,000,000 in the aggregate;
(e) Indebtedness of the Guarantor 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 one hundred and eighty
(180) days after such acquisition or after the
completion of such construction or improvement,
(ii) the amount of such Indebtedness does not
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) the creation or acquisition of the Subsidiary
is permitted by the terms hereof, (ii) 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 (iii) the principal
amount of such Indebtedness, when added to other
Indebtedness of the Guarantor and its
Subsidiaries, does not violate subparagraphs (e)
or (h) of this Section;
(g) unsecured Indebtedness of the Guarantor; and
(h) unsecured Indebtedness of the Guarantor's
Subsidiaries which does not exceed, in the
aggregate, $25,000,000 outstanding at any time,
exclusive of unsecured Indebtedness of
Subsidiaries listed on Annex II hereto.
7.2 Liens.
Neither the Guarantor nor any Subsidiary will cause or permit
or hereafter agree or consent to cause or permit in the future (upon the
happening of a contingency or otherwise), any of its Property, whether now owned
or subsequently acquired, to be subject to a Lien except:
(a) Liens securing the payment of taxes,
assessments or governmental charges or levies or
the demands of suppliers, mechanics, repairmen,
workmen, materialmen, carriers, warehousers,
landlords and other like Persons, or similar
statutory Liens, provided that (i) such Liens do
not in the aggregate materially reduce the value
of any Properties subject to the Liens or
materially interfere with their use in the
ordinary conduct of the Guarantor's or any
Subsidiary's business, (ii) all claims which such
Liens secure are not delinquent or are being
actively contested in good faith and by
appropriate proceedings and (iii) adequate
reserves have been established therefor on the
books of the Guarantor;
(b) Liens incurred or pledges and deposits made in
the ordinary course of business (i) in connection
with worker's compensation, unemployment
insurance, social security and other like laws, or
(ii) to secure the performance of letters of
credit, bids, tenders, trade contracts or sales
contracts, leases, statutory obligations, surety,
appeal and performance bonds and other similar
obligations, in each case not incurred in
connection with the borrowing of money, the
obtaining of advances or the payment of the
deferred purchase price of Property otherwise than
permitted by paragraph (f) below;
(c) Attachment, judgment and other similar Liens
arising in connection with court proceedings that
do not constitute an Event of Default under clause
(g) of Section 8.1, provided that (i) execution
and other enforcement are effectively stayed, (ii)
all claims which the Liens secure are being
actively contested in good faith and by
appropriate proceedings and (iii) adequate
reserves have been established therefor on the
books of the Guarantor, if required by GAAP;
(d) Liens on Property of the Guarantor or a
Subsidiary existing under the Original Agreement
and set forth on Annex III hereto, provided that
(i) such Liens shall not apply to any other
property or asset of the Guarantor 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;
(e) any Lien existing on any property or asset
prior to the acquisition thereof by the Guarantor
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) the
acquisition of such property or assets or such
Subsidiary is permitted by the terms hereof, (ii)
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, (iii)
such Lien shall not apply to any other property or
assets of the Guarantor or any Subsidiary and (iv)
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;
(f) Liens on fixed or capital assets acquired,
constructed or improved by the Guarantor or any
Subsidiary; provided that (i) such security
interests secure Indebtedness permitted by clause
(e) of Section 7.1, (ii) such security interests
and the Indebtedness secured thereby are incurred
simultaneously with or within one hundred and
eighty (180) days after such acquisition or the
completion of such construction or improvement,
(iii) the Indebtedness secured thereby does not
exceed one hundred (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 Guarantor or any Subsidiary;
(g) In the event that the Guarantor or any
Subsidiary creates, assumes, incurs or permits to
exist any Lien not otherwise permitted by this
Section 7.2, the Guarantor will make or cause to
be made provision whereby the Notes will be
secured equally and ratably with all other
obligations secured by such Liens, and in any case
the Notes shall have the benefit, to the full
extent that, and with such priority as, the
holders may be entitled thereto under applicable
law, of an equitable Lien on such Property
securing the Notes. Any violation of this Section
7.2 shall constitute an Event of Default whether
or not any such
provision is made for equal and ratable security
pursuant to this subparagraph (g);
(h) Liens in favor of the Collateral Agent for the
benefit of the Noteholders and the Lenders granted
pursuant to the terms and conditions of the
Security Documents; and
(i) Liens consisting of a call option on the
shares of Xxxxxx Zwiesel Glaswerke, AG, owned by
the Company.
7.3 Merger or Consolidation.
The Guarantor will not, and will not permit any Subsidiary to,
merge 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 Subsidiary (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that:
(i) The Guarantor may consolidate with or merge into
any Person or permit any other Person to merge into it,
provided that,
(1) Immediately after giving effect thereto,
the Guarantor is the successor corporation or, if the
Guarantor is not the successor corporation, the
successor corporation is a corporation organized
under the laws of a state of the United States of
America or the District of Columbia and shall
expressly assume in writing the Guarantor's
obligations under the Notes and this Agreement;
(2) At the time thereof and immediately
after giving effect thereto, there shall exist no
Event of Default or event which, with the passage of
time or giving of notice, or both, would constitute
an Event of Default; and
(3) The Guarantor or such successor
corporation could incur at least $1.00 of additional
debt pursuant to the Consolidated Leverage Ratio of
Section 7.12 hereof as of the most recently reported
Fiscal Quarter;
(i) Any Subsidiary (except the Company) may (A) merge
into the Guarantor or another Majority-Owned Subsidiary
Guarantor or (B) sell, transfer or lease all or any part of
its assets to the Guarantor or to another Majority-Owned
Subsidiary Guarantor or (C) merge into any Person which, as a
result of such merger, concurrently becomes a Subsidiary,
provided in each such instance that there shall exist no Event
of Default or event which, with the passage of time or giving
of notice, or both, would constitute an Event of Default;
(ii) THC Systems, Inc. may merge into the Guarantor;
and
(iii) The Guarantor may sell its investment in Xxxxxx
Zwiesel Glaswerke, AG for consideration (whether cash,
property or other consideration) of not less than 7,500,000
DM;
provided that any merger permitted by clauses (i) or (ii) above involving a
Person that is not a Wholly-Owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 7.3 hereof.
7.4 Liquidate or Dissolve Subsidiaries; Sale of Assets.
The Guarantor may liquidate or dissolve any Subsidiary (except
THC Systems, Inc.) if the Guarantor determines in good faith that such
liquidation or dissolution is in the best interests of the Guarantor and
the assets of such Subsidiary are distributed to the Guarantor in liquidation or
dissolution. Except as otherwise permitted under the terms and conditions of the
Collateral Agency Agreement, the Guarantor 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.
7.5 Investments, Loans, Advances, Guaranties and Acquisitions.
The Guarantor 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, Guaranty 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 the
Guarantor 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 Guarantor 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 Guarantor to any
Subsidiary and made by any Subsidiary to the
Guarantor or any other Subsidiary which constitute
Indebtedness permitted by Section 7.1, provided
that loans or advances made by the Guarantor or
any Material Domestic Subsidiary are evidenced by
a promissory note or other instrument which is
pledged to the Collateral Agent pursuant to the
Security Documents for the benefit of the Lenders
and the Noteholders;
(d) Guaranties constituting Indebtedness permitted
by Section 7.1(d);
(e) repurchases or redemptions of the capital
stock of the Guarantor permitted by applicable
law;
(f) the purchase by the Guarantor of the remaining
outstanding Capital Stock of Oneida International
Inc., which the Guarantor currently does not own,
for a purchase price of not more than 845,000,000
Italian Lira; and
(g) 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 (i)
prior to any such purchase, acquisition or
Investment, the Noteholders shall have received a
certificate from a Financial Officer of the
Guarantor (A) setting forth calculations which
demonstrate that, on a pro forma basis, after
giving effect to the proposed purchase,
acquisition or investment, the Consolidated
Leverage Ratio of the Guarantor and its
Subsidiaries is less than 2.50 to 1.0, and the
Guarantor is in compliance with Section 7.12
hereof as of the end of the most recent Fiscal
Quarter, and (B) certifying that no other Default
or Event of Default exists or would be created as
a result thereof, (ii) the Person purchased or
acquired or in which an Investment is made is
engaged solely in the Tableware Business, and
(iii) the aggregate consideration (exclusive of
consideration consisting solely of the Capital
Stock of the Guarantor) paid by the Guarantor or
any Subsidiary in connection with the purchase of
assets from, acquisition of the Capital Stock of,
or Investment in,
any single Person (whether in a single transaction
or in a series of transactions) shall not exceed
$20,000,000 without the consent of the
Noteholders.
7.6 Hedging Agreements.
The Guarantor 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 Guarantor 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 Guarantor 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.
7.7 Transactions with Affiliates.
The Guarantor 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 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 Guarantor or such Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, or (b) transactions between or among the Guarantor
and its Wholly-Owned Subsidiaries not involving any other Affiliate.
7.8 Restrictive Agreements.
The Guarantor 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 Guarantor or any other Subsidiary or to Guaranty
Indebtedness of the Guarantor or any other Subsidiary; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law, by this
Agreement or by the Credit Agreement, (ii) the foregoing shall not apply to
restrictions and conditions existing on the date hereof identified on Annex V
attached hereto (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.
7.9 Fiscal Year, Accounting Policies and Consolidated Tax Returns.
The Guarantor shall not make any change in its Fiscal Year or
change its accounting policies or practices from those in effect on May __,
2001, except to the extent such change is required by GAAP. The Guarantor will
not file, or consent to the filing of, any consolidated Federal income tax
return with any Person other than a Subsidiary, except to the extent that the
Guarantor is otherwise required to do so under the Code.
7.10 Subordinated Debt.
The Guarantor 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 Collateral Agent and the Noteholders.
7.11 Negative Pledges.
The Guarantor shall not, and shall not permit any of its
Subsidiaries to, enter into any agreement which prohibits or limits the ability
of the Guarantor 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.
7.12 Financial Covenants.
(a) Consolidated Interest Coverage Ratio. For a period of four
(4) consecutive Fiscal Quarters ending with its most recent Fiscal Quarter, the
Guarantor will not permit the Consolidated Interest Coverage Ratio of the
Guarantor and its Subsidiaries to be less than (i) 2.70 to 1.00 for the Fiscal
Quarter ended Xxxxx 00, 0000, (xx) 2.40 to 1.00 for the Fiscal Quarter ending
July 28, 2001, (iii) 2.20 to 1.00 for the Fiscal Quarter ending October 27,
2001, (iv) 2.50 to 1.00 for the Fiscal Quarter ending January 26, 2002, (v) 2.75
to 1.00 for the Fiscal Quarter ending April 27, 2002, and (vi) 3.00 to 1.00 for
each succeeding Fiscal Quarter.
(b) Leverage Ratio. The Guarantor will not permit the
Consolidated Leverage Ratio of the Guarantor and its Subsidiaries to be greater
than (i) 4.30 to 1.00 as of the last day of the Fiscal Quarter ended April 28,
2001 and the last day of the Fiscal Quarter ending July 28, 2001, (ii) 4.45 to
1.00 as of the last day of the Fiscal Quarter ending October 27, 2001, (iii)
4.10 to 1.00 as of the last day of the Fiscal Quarter ending January 26, 2002,
(iv) 3.85 to 1.00 as of the last day of the Fiscal Quarter ending April 27,
2002, (v) 3.55 to 1.00 as of the last day of the Fiscal Quarter ending July 27,
2002, (vi) 3.10 to 1.00 as of the last day of the Fiscal Quarter ending October
26, 2002, and (vii) 3.00 to 1.00 as of the last day of each succeeding Fiscal
Quarter.
(c) Consolidated Net Worth. As of the last day of any Fiscal
Quarter, the Guarantor will not permit Consolidated Net Worth of the Guarantor
and its Subsidiaries to be less than the sum of (i) $118,000,000, plus (ii) 75%
of the Consolidated Net Income of the Guarantor and its Subsidiaries (which for
the purposes of this covenant shall not be reduced by losses) for the six-month
periods ending with each second and fourth Fiscal Quarter commencing with the
Fiscal Quarter ending July 29, 2001.
7.13 Letters of Credit.
The Guarantor 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 or bankers' acceptances except obligations in respect of (i)
trade letters of credit and bankers' acceptances in an amount not to exceed
$15,000,000 in the aggregate and (ii) standby letters of credit in an amount not
to exceed $20,000,000 in the aggregate.
7.14 Deposit Accounts.
The Guarantor will not, and will not permit any of its
Material Domestic Subsidiaries to, open or maintain any Deposit Account with a
Person other than one of the Lenders unless the Collateral Agent, for the
benefit of the Lenders and Noteholders, shall have a perfected first priority
Lien therein.
7.15 Prepayment of Indebtedness.
The Guarantor will not, and will not permit any of its
Subsidiaries to, make any optional payment or prepayment of, or purchase or
redeem, any Indebtedness except: (a) payments of the Notes as permitted
hereunder and of the Loans as permitted under the terms and conditions of the
Credit Agreement, (b) payments made in the ordinary course of business of other
Indebtedness consisting of working capital lines of credit or metal consignment
facilities which contemplate unscheduled periodic payments and advances or
readvances, (c) prepayments of Senior Secured Indebtedness (including the Notes
hereunder and the Loans under the terms and conditions of the Credit Agreement),
other than those permitted by clauses (a) and (b), provided the prepayments are
applied to all Senior Secured Indebtedness on a pro rata basis and the
Commitments are permanently reduced by the amount of the payments applied to the
Notes and Loans under this subparagraph, (d) optional payments or prepayments of
Indebtedness other than Senior Secured Indebtedness not to exceed $5,000,000 in
the aggregate, or (e) prepayments of Indebtedness in connection with
refinancings or replacements of such Indebtedness that do not increase the
outstanding principal amount thereof.
7.16 Long-Term Leases.
The Guarantor will not, and will not permit any Subsidiary to,
become obligated, as lessee under any Long-Term Lease unless, at the time of
entering into such Long-Term Lease and after giving effect thereto, the average
aggregate annual Rentals payable by the Guarantor and its Subsidiaries on a
consolidated basis during the term of such Long-Term Lease pursuant to Long-Term
Leases will not exceed 10% of Consolidated Net Worth, determined as of the end
of the Guarantor's prior Fiscal Quarter.
7.17 Change in Business.
The Guarantor will not, and will not permit any Subsidiary to,
engage to any material extent in any business other than the Tableware Business.
7.18 Pari Passu Position.
Each of the Company and the Guarantor agrees that it will not
grant or provide, and at no time will it allow to exist, be created or granted,
any Liens or security interests in favor of, or Guaranties by Subsidiaries for
the benefit of, any of the Lenders, unless in the case of the giving of any
Guaranty by Subsidiaries, the Noteholders shall simultaneously be provided with
a Subsidiary Guarantee.
7.19 Collateral Agency Agreement.
The Guarantor shall not permit any Subsidiary to incur
Indebtedness or to issue a Subsidiary Guarantee without requiring that the
lender of such Indebtedness or beneficiary of such Subsidiary Guarantee execute
the Collateral Agency Agreement at the time of such incurrence of Indebtedness.
7.20 Change in Commitment.
The Guarantor will not, and will not permit any of its
Subsidiaries to, (a) reduce the Commitment, as permitted under Section 2.07 of
the Credit Agreement, or (b) increase the Commitment without the prior written
consent of the Noteholders.
7.21 Change in Level.
Any increase or decrease as a result of an amendment to the
Credit Agreement in "Eurodollar Margin" as such term is used in the definition
of "Applicable Margin" in the Credit Agreement, as well as any related changes
in any other terms or conditions of the Credit Agreement, shall be deemed to be
immediately incorporated by reference herein as of such date of increase or
decrease by the Lenders and the interest rate on the Notes will be increased or
decreased accordingly pursuant to Section 1.2 hereof. The Company, the Guarantor
and the Noteholders agree to cooperate with each other in connection with the
execution and delivery to the Noteholders of an amendment to this Agreement and
to the Notes incorporating such increase or decrease, as well as any related
changes in any other terms or conditions of the Credit Agreement.
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events.
An "Event of Default" shall exist if any one or more of the
following occurs:
(a) Default in the payment of interest on any of
the Notes which continues for a period of three
(3) days following the date such payment is due;
(b) Default in the payment of the principal of any
of the Notes or the premium thereon, if any, at
maturity, upon acceleration of maturity or at any
date fixed for prepayment;
(c) Default shall occur (i) in the payment of the
principal of, premium, or interest on any other
Indebtedness of the Guarantor or its Subsidiaries,
aggregating in excess of $1,000,000 as and when
due and payable (whether by lapse of time,
declaration, call for redemption or otherwise),
(ii) under any mortgage, agreement or other
instrument of the Guarantor or any Subsidiary
securing such Indebtedness or under or pursuant to
which such Indebtedness aggregating in excess of
$1,000,000 is issued, (iii) under any leases other
than Capital Lease Obligations of the Guarantor or
any Subsidiary, with aggregate Capital Lease
Obligations in excess of $1,000,000 or (iv) with
respect to any combination of the foregoing
involving Indebtedness and/or Capital Lease
Obligations aggregating in excess of $1,000,000
regardless of whether such defaults would be
Events of Default hereunder, and any such defaults
with respect to the payment of money shall
continue, unless waived, beyond the period of
grace, if any, allowed with respect thereto;
(d) Default in the observance or performance of
(i) any negative covenant under Section 7 or (ii)
any covenant under Sections 6.1(i), 6.1(m), 6.10,
6.16, 6.17 or 8.7;
(e) Default in the observance or performance of
any other covenant or provision of this Agreement
which default is not remedied within thirty (30)
days after the earlier of the date (a) management
of the Guarantor knew of such default or (b) on
which written notice of such default is provided
to the Guarantor by any Noteholder;
(f) Any representation or warranty made by the
Company or the Guarantor in this Agreement or in
any Security Document, or made by the Company or
the Guarantor in any written statement or
certificate furnished by the Company or the
Guarantor in connection with the issuance and sale
of the Notes or furnished by the Company or the
Guarantor pursuant to this Agreement or in
connection with any Security Document, or
furnished by any Subsidiary pursuant to a
Subsidiary Guarantee or any Security Document to
which it is a party, or in any writing furnished
in connection with the transactions contemplated
hereby, proves to have been false or incorrect in
any material respect as of the date of the
issuance or making thereof;
(g) Any judgments, writs or warrants of attachment
or any similar processes individually or in the
aggregate in excess of $1,500,000 shall be entered
or filed against the Guarantor or any Subsidiary
or against any Property or assets of either and
remain unpaid, unvacated, unbonded or unstayed
(through appeal or otherwise) for a period of 60
days after the Guarantor or any Subsidiary
receives notice thereof;
(h) The Guarantor or any Subsidiary shall incur a
"Distress Termination" (as defined in Title IV of
ERISA) of any Plan or any trust created thereunder
which results in material liability to the PBGC,
the PBGC shall institute proceedings to terminate
any Plan or any trust created thereunder, or a
trustee shall be appointed by a United States
District Court pursuant to Section 4042(b) of
ERISA to administer any Plan or any trust created
thereunder;
(i) (A) Any Subsidiary Guarantor shall be in
default of or fail to comply with any term,
covenant, or agreement contained in any Subsidiary
Guarantee or the Subsidiary Subordination
Agreement or (B) any Subsidiary Guarantee or the
Subsidiary Subordination Agreement shall cease to
be in full force and effect; or
(j) The Guarantor or any Subsidiary shall:
(i) generally not pay its debts as they
become due or admit in writing its inability
to pay its debts generally as they become
due;
(ii) file a petition in bankruptcy or for
reorganization or for the adoption of an
arrangement under the Federal Bankruptcy
Code, or any similar applicable bankruptcy
or insolvency law, as now or in the future
amended (herein collectively called
"Bankruptcy Laws"), or an answer or other
pleading admitting or failing to deny the
material allegations of such a petition or
seeking, consenting to or acquiescing in
relief provided for under the Bankruptcy
Laws;
(iii) make an assignment of all or a
substantial part of its Property for the
benefit of its creditors;
(iv) seek or consent to or acquiesce in the
appointment of a receiver, liquidator,
custodian or trustee of it or for all or a
substantial part of its Property;
(v) be finally adjudicated a bankrupt or
insolvent;
(vi) be subject to the entry of a court
order, which shall not be vacated, set aside
or stayed within 30 days from the date of
entry, appointing a receiver, liquidator,
custodian or trustee of it or for all or a
substantial part of its Property, or
entering of an order for relief pursuant to
an involuntary case, or effecting an
arrangement in, bankruptcy or for a
reorganization pursuant to the Bankruptcy
Laws or for any other judicial modification
or alteration of the rights of creditors; or
(vii) be subject to the assumption of
custody or sequestration by a court of
competent jurisdiction of all or a
substantial part of its Property, which
custody or sequestration shall not be
suspended or terminated within 30 days from
its inception;
(k) The Guarantor shall be in Default under the
Credit Agreement, or the Guarantor shall breach
any terms or provisions of the Credit Agreement or
any other document governing, evidencing or
securing the Loans thereunder, including any
replacements, refundings, refinancings or
additions of the foregoing;
(l) The Guarantor shall be in Default in the
observance or performance of any covenant or
agreement in the Security Documents beyond any
applicable grace period, or such Security
Documents creating or granting a Lien on any
collateral shall cease to be in full force and
effect;
(m) The Commitment shall at any time be less than
an amount equal to $275,000,000; or
(n) Any Subsidiary Guarantor shall be in default
with respect to any term, covenant or agreement
contained in a Subsidiary Guarantee or (ii) the
Subsidiary Guarantee shall cease to be in full
force and effect for any reason or any Subsidiary
Guarantor shall contest or deny in writing the
validity or enforceability of any of its
obligations under a Subsidiary Guarantee.
8.2 Remedies on Default.
When any Event of Default described in paragraphs (a) through
(i) and paragraphs (k) through (n) of Section 8.1 has happened and is
continuing, the holder or holders of at least 25% in principal amount of the
Notes then outstanding may by notice to the Guarantor declare the entire
principal, together with the premium set forth below, and all interest accrued
on all Notes to be, and such Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any kind,
all of which are expressly waived. Notwithstanding the foregoing, when (i) any
Event of Default described in paragraphs (a) or (b) of Section 8.1 has happened
and is continuing, any holder may by notice to the Guarantor declare the entire
principal, together with the premium set forth below, and all interest accrued
on the Notes then held by such holder to be, and such Notes shall thereupon
become, forthwith due and payable, without any presentment, demand, protest or
other notice of any kind, all of which are expressly waived and (ii) any Event
of Default described in paragraph (j) of Section 8.1 has happened, then all
outstanding Notes shall immediately become due and payable without presentment,
demand or notice of any kind. Upon the Notes or any of them becoming due and
payable as aforesaid, the Guarantor will forthwith pay to the holders of such
Notes the entire principal of and interest accrued on such Notes, plus a premium
in the event that the Reinvestment Yield shall, on the Determination Date, be
less than the interest rate payable on or in respect of the Notes. Such premium
shall equal (x) the aggregate present value of the principal so accelerated and
the aggregate present value of the interest which would have been payable in
respect of such principal absent such accelerated payment, determined by
discounting (semi-annually on the basis of a 360-day year composed of twelve
30-day months) each such amount utilizing an interest factor equal to the
Reinvestment Yield, less (y) the principal amount to be accelerated.
8.3 Annulment of Acceleration of Notes.
The provisions of Section 8.2 are subject to the condition
that if the principal of and accrued interest on the Notes have been declared
immediately due and payable by reason of the occurrence of any Event of Default
described in paragraphs (a) through (i), inclusive, of Section 8.1, the holder
or holders of 66-2/3% in aggregate principal amount of the Notes then
outstanding may, by written instrument furnished to the Guarantor, rescind and
annul such declaration and the consequences thereof, provided that (i) at the
time such declaration is annulled and rescinded no judgment or decree has been
entered for the payment of any monies due pursuant to the Notes or this
Agreement, (ii) all arrears of interest upon all the Notes and all other sums
payable under the Notes and under this Agreement (except any principal, interest
or premium on the Notes which has become due and payable solely by reason of
such declaration under Section 8.2) and under the Guaranty Agreement and under
the Subsidiary Guarantees shall have been duly paid and (iii) each and every
other Event of Default shall have been cured or waived; and provided further,
that no such rescission and annulment shall extend to or affect any subsequent
default or Event of Default or impair any right consequent thereto.
8.4 Other Remedies.
Subject to the provisions of Section 8.3, if any Event of
Default shall be continuing, any holder of Notes may enforce its rights by suit
in equity, by action at law, or by any other appropriate proceedings, whether
for the specific performance (to the extent permitted by law) of any covenant or
agreement contained in this Agreement, the Notes or the Subsidiary Guarantees or
in aid of the exercise of any power granted in this Agreement, and may enforce
the payment of any Note held by such holder and any of its other legal or
equitable rights.
8.5 Conduct No Waiver; Collection Expenses.
No course of dealing on the part of any holder of Notes, nor
any delay or failure on the part of any holder of Notes to exercise any of its
rights, shall operate as a waiver of such rights or otherwise prejudice such
holder's rights, powers and remedies. If the Guarantor fails to pay, when due,
the principal of, or the interest on, any Note, or if the Company or the
Guarantor fails to comply with any other provision of this Agreement, the
Company and the Guarantor will pay to each holder, to the extent permitted by
law, on demand, such further amounts as shall be sufficient to cover the
reasonable cost and expenses, including but not limited to reasonable attorneys'
fees, incurred by such holders of the Notes in collecting any sums due on the
Notes or in otherwise enforcing any of their rights.
8.6 Remedies Cumulative.
No right or remedy conferred upon or reserved to any holder of
Notes under this Agreement or the Subsidiary Guarantees is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to every other right or remedy given under this
Agreement or the Subsidiary Guarantees or now or hereafter existing under any
applicable law. Every right and remedy given by this Agreement or by applicable
law to any holder of Notes may be exercised from time to time and as often as
may be deemed expedient by such holder, as the case may be.
8.7 Notice of Default.
With respect to Events of Default or claimed defaults, the
Guarantor will give the following notices:
(a) The Guarantor promptly will furnish to each
holder of a Note notice in writing by registered
or certified mail, return receipt requested, of
the occurrence of an Event of Default or an event
which, with the lapse of time or the giving of
notice, or both, would become an Event of Default.
Such notice shall specify the nature of such
default, the period of existence thereof and what
action the Guarantor has taken or is taking or
proposes to take with respect thereto.
(b) If the holder of any Note or of any other
evidence of Indebtedness of the Guarantor or any
Subsidiary gives any notice or takes any other
action with respect to a claimed default, the
Guarantor will forthwith give written notice to
the extent of the Guarantor's knowledge thereof to
each holder of the then outstanding Notes,
describing the notice or action and the nature of
the claimed default.
9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification.
Any term, covenant, agreement or condition of this Agreement,
the Notes, the Subsidiary Guarantees and the Security Documents may, with the
written consent of the Company and the Guarantor, be amended, or compliance
therewith may be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company and the Guarantor shall have
obtained the consent in writing of the holder or holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes; provided, however, that,
without the written consent of the holder or holders of all of the Notes then
outstanding, no such waiver, modification, alteration or amendment shall be
effective which will (i) change the time of payment (including any required
prepayment) of the principal of or the interest on any Note, (ii) reduce the
principal amount thereof or the premium, if any, or reduce the rate of interest
thereon, (iii) change any provision of any instrument affecting the preferences
between holders of the Notes or between holders of the Notes and other creditors
of the Company, and the Guarantor or (iv) change any of the provisions of
Section 8.1, Section 8.2, Section 8.3 or this Section 9.
Solely for the purpose of determining whether the holders of
the requisite percentage of the aggregate principal amount of Notes then
outstanding approved or consented to any amendment, waiver or consent to be
given under this Agreement, the Notes, any Subsidiary Guarantee or any Security
Document, or have directed the taking of any action provided herein any
Subsidiary Guarantee, any Security Document or in the Notes to be taken upon the
direction of the holders of a specified percentage of the aggregate principal
amount of Notes then outstanding, Notes directly or indirectly owned by the
Company or any of its Affiliates shall be deemed not to be outstanding.
9.2 Solicitation of Holders of Notes.
The Company and the Guarantor will not solicit, request or
negotiate for or with respect to any proposed waiver or amendment of any of the
provisions of this Agreement, the Notes, the Subsidiary Guarantees or any
Security Document unless each holder of the Notes (irrespective of the amount of
Notes then owned by it) shall concurrently be informed thereof by the Company
and the Guarantor shall be afforded the opportunity of considering the same and
shall be supplied by the Company and the Guarantor with sufficient information
to enable it to make an informed decision with respect thereto. The Company and
the Guarantor will pay all reasonable attorney fees and expenses incurred by
each holder of the Notes in connection with the review, evaluation and
documentation of any proposed amendment, waiver or consent in respect of any of
the provisions of this Agreement or of the Notes, the Subsidiary Guarantee or
the Security Documents. Executed or true and correct copies of any waiver or
consent effected pursuant to the provisions of this Section 9 shall be delivered
by the Company and the Guarantor to each holder of outstanding Notes forthwith
following the date on which the same shall have been executed and delivered by
the holder or holders of the requisite percentage of outstanding Notes. Neither
the Company nor the Guarantor will, directly or indirectly, pay or cause to be
paid any remuneration, whether by way of supplemental or additional interest,
fee or otherwise, to any holder of the Notes as consideration for or as an
inducement to the entering into by any holder of the Notes of any waiver or
amendment of any of the terms and provisions of this Agreement, any Subsidiary
Guarantee or any Security Document unless such remuneration is concurrently
paid, on the same terms, ratably to each holder of the then outstanding Notes.
9.3 Binding Effect.
Any such amendment or waiver shall apply equally to all the
holders of the Notes and shall be binding upon them, upon each future holder of
any Note and upon the Company and the Guarantor whether or not such Note shall
have been marked to indicate such amendment or waiver. No such amendment or
waiver shall extend to or affect any obligation not expressly amended or waived
or impair any right related thereto.
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1 Form of Notes.
The Notes initially delivered under this Agreement will be in
the form of six fully registered Notes in the form attached as Exhibit A. The
Notes are issuable only in fully registered form and in denominations of at
least $2,000,000 (or the remaining outstanding balance thereof, if less than
$2,000,000).
10.2 Note Register.
The Company shall cause to be kept at its principal office a
register (the "Note Register") for the registration and transfer of the Notes.
The names and addresses of the holders of Notes, the transfer thereof and the
names and addresses of the transferees of the Notes shall be registered in the
Note Register. The Company may deem and treat the person in whose name a Note is
so registered as the holder and owner thereof for all purposes and shall not be
affected by any notice to the contrary, until due presentment of such Note for
registration of transfer as provided in this Section 10.
10.3 Issuance of New Notes upon Exchange or Transfer.
Upon surrender for exchange or registration of transfer of any
Note at the office of the Company designated for notices in accordance with
Section 11.2, the Company shall execute and deliver, at its expense, one or more
new Notes of any authorized denominations requested by the holder of the
surrendered Note, each dated the date to which interest has been paid on the
Notes so surrendered (or, if no interest has been paid, the date of such
surrendered Note), but in the same aggregate unpaid principal amount as such
surrendered Note, and registered in the name of such person or persons as shall
be designated in writing by such holder. Every Note surrendered for registration
of transfer shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or by such holder's attorney
duly authorized in writing. The Company may condition its issuance of any new
Note in connection with a transfer by any Person on compliance by the transferee
with the
representations required under Section 3.2, by Institutional Holders on
compliance with Section 2.5 and on the payment to the Company of a sum
sufficient to cover any stamp tax or other governmental charge imposed in
respect of such transfer.
10.4 Replacement of Notes.
Upon receipt of evidence satisfactory to the Company of the
loss, theft, mutilation or destruction of any Note, and in the case of any such
loss, theft or destruction upon delivery of a bond of indemnity in such form and
amount as shall be reasonably satisfactory to the Company or in the event of
such mutilation upon surrender and cancellation of the Note, the Company,
without charge to the holder thereof, will make and deliver a new Note, of like
tenor in lieu of such lost, stolen, destroyed or mutilated Note. If any such
lost, stolen or destroyed Note is owned by you or any other Institutional
Holder, then the affidavit of an authorized officer of such owner setting forth
the fact of loss, theft or destruction and of its ownership of the Note at the
time of such loss, theft or destruction shall be accepted as satisfactory
evidence thereof, and no further indemnity shall be required as a condition to
the execution and delivery of a new Note, other than a written agreement of such
owner (in form reasonably satisfactory to the Company) to indemnify the Company.
11. MISCELLANEOUS
11.1 Expenses.
Whether or not the purchase of Notes herein contemplated shall
be consummated, the Company and the Guarantor agree to pay directly all
reasonable expenses in connection with the preparation, execution and delivery
of this Agreement, the Notes, the Subsidiary Guarantees, the Subsidiary
Subordination Agreement, the Security Documents, the Collateral Agency Agreement
and the transactions contemplated by each of the foregoing documents and
agreements, including, but not limited to, out-of-pocket expenses, filing fees
of Standard & Poor's Ratings Group in connection with obtaining a private
placement number, charges and disbursements of special counsel, photocopying and
printing costs and charges for shipping the Notes, adequately insured, to you at
your home office or at such other address as you may designate, and all similar
expenses (including the reasonable fees and expenses of counsel) relating to any
amendments, waivers or consents in connection with this Agreement, the Notes,
the Subsidiary Guarantees, the Subsidiary Subordination Agreement, the Security
Documents or the Collateral Agency Agreement or any agreement entered into by
the Noteholders and the Company, the Guarantor or any Subsidiary Guarantor,
including, but not limited to, any such amendments, waivers or consents
resulting from any work-out, renegotiation or restructuring relating to the
performance by the Guarantor of its obligations under this Agreement, the
Security Documents and the Notes and the performance by any Subsidiary Guarantor
under any Subsidiary Guarantee, the Subsidiary Subordination Agreement and any
Security Document to which it is a party. The Company and the Guarantor also
agree that they will pay and save you harmless against any and all liability
with respect to stamp and other documentary taxes, if any, which may be payable,
or which may be determined to be payable in connection with the execution and
delivery of this Agreement, the Security Documents or the Notes (but not in
connection with a transfer of any Notes), whether or not any Notes are then
outstanding. The obligations of the Company and the Guarantor under this Section
11.1 shall survive the retirement of the Notes.
11.2 Notices.
Except as otherwise expressly provided herein, all
communications provided for in this Agreement shall be in writing and delivered
or sent by registered or certified mail, return receipt requested, or by
overnight courier (i) if to you, to the address set forth below your name in
Schedule I, or to such other address as you may in writing designate, (ii) if to
any other holder of the Notes, to such address as the holder may designate in
writing to the Guarantor, and (iii) if to the Company, to Oneida Ltd., 000-000
Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxx, Chief
Financial Officer, with a copy to Oneida Ltd., 000-000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxx Xxxx 00000, Attention: General Counsel, or to such other address as the
Company may in writing designate.
11.3 Reproduction of Documents.
This Agreement and all documents relating hereto, including,
without limitation, (i) consents, waivers and modifications which may hereafter
be executed, (ii) documents received by you at the closing of the purchase of
the Notes (except the Notes themselves), and (iii) financial statements,
certificates and other information previously or hereafter furnished to you, may
be reproduced by you by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process, and you may destroy any
original document so reproduced. The Company and Guarantor agree and stipulate
that any such reproduction which is legible shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or not
the original is in existence and whether or not such reproduction was made by
you in the regular course of business) and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence; provided that nothing herein contained shall preclude the Company and
the Guarantor from objecting to the admission of any reproduction on the basis
that such reproduction is not accurate, has been altered or is otherwise
incomplete.
11.4 Successors and Assigns.
This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
11.5 Law Governing.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois. No provision of this
Agreement may be waived, changed or modified, or the discharge thereof
acknowledged, orally, except by an agreement in writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge is
sought.
11.6 Headings.
The headings of the sections and subsections of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
11.7 Counterparts.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart or reproduction thereof permitted by Section
11.3.
11.7 Reliance on and Survival of Provisions.
All covenants, representations and warranties made by the
Company and the Guarantor herein and in any certificates delivered pursuant to
this Agreement, whether or not in connection with a closing, (i) shall be deemed
to have been relied upon by you, notwithstanding any investigation heretofore or
hereafter made by you or on your behalf and (ii) shall survive the delivery of
this Agreement and the Notes.
11.8 Integration and Severability.
This Agreement embodies the entire agreement and understanding
between you, the Guarantor and the Company, and supersedes all prior agreements
and understandings relating to the subject matter hereof. In case any one or
more of the provisions contained in this Agreement or in any Note, or
application thereof, shall be invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
in this Agreement and in any Note, and any other application thereof, shall not
in any way be affected or impaired thereby.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Company, the Guarantor and the Purchasers have
caused this Agreement to be executed and delivered by their respective officer
or officers thereunto duly authorized.
THC SYSTEMS, INC.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
ONEIDA LTD.
By: /s/ XXXXX X. XXXXX
------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
ALLSTATE INSURANCE COMPANY
By: /s/ XXXXXXXX X. XXXXXX
-----------------------
By: /s/ XXXXXX X. XXXXXXXX
-----------------------
Authorized Signatories
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ XXXXXXXX X. XXXXXX
-----------------------
By: /s/ XXXXXX X. XXXXXXXX
-----------------------
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ XXXXX XXXXXXXX
-----------------------
Title: Assistant Vice President
By: /s/ XXXXX X. XXXX
-----------------------
Title: Assistant Secretary
Schedule A-1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
----------------------------- ---------------------
Allstate Insurance Company (1) $10,000,000
0000 Xxxxxxx Xxxx, XXX X0X (2) $ 5,000,000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Investment Operations
Private Placements
Telephone: (000) 000-0000
Telecopy: (000)000-0000
All notices of scheduled payments and written confirmations of such
wire transfer should be sent to the address above. All payments by
Fedwire transfer of immediately available funds, identifying the name
of the Issuer (and the Credit, if any), the Private Placement Number
preceded by "DPP" and the payment as principal, interest or premium, in
the format as follows:
BBK = Xxxxxx Trust and Savings Bank
ABA #000000000
BNF = Allstate Life Insurance Company
Collection Account #000-000-0
ORG = THC Systems, Inc.
OBI = DPP (PPN: 87252@ AA 8)
L ______ (Enter Lease Number, if any)
Payment Due Date (MM/DD/YY) -
P ______ (Enter "P" and amount of
principal being remitted, for example,
P5000000.00) -
I ______ (Enter "I" and amount of
interest being remitted, for example,
I225000.00)
Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
000 Xxxx Xxxxxxx Xxxxxx
4th Floor, Zone 6
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
For Allstate Life Insurance Company/
Safekeeping Account No. 846627
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
0000 Xxxxxxx Xxxx, XXX X0X
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Tax ID #00-0000000
Schedule A-2
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
----------------------------- ---------------------
Allstate Insurance Company $7,500,000
0000 Xxxxxxx Xxxx, XXX X0X
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Investment Operations
Private Placements
Telephone: (000) 000-0000
Telecopy: (000)000-0000
All notices of scheduled payments and written confirmations of such
wire transfer should be sent to the address above. All payments by
Fedwire transfer of immediately available funds, identifying the name
of the Issuer (and the Credit, if any), the Private Placement Number
preceded by "DPP" and the payment as principal, interest or premium, in
the format as follows:
BBK = Xxxxxx Trust and Savings Bank
ABA #000000000
BNF = Allstate Insurance Company
Collection Account #000-000-0
ORG = THC Systems, Inc.
OBI = DPP (PPN: 87252@ AA 8)
L ______ (Enter Lease Number, if any)
Payment Due Date (MM/DD/YY) -
P ______ (Enter "P" and amount of
principal being remitted, for example,
P5000000.00) -
I ______ (Enter "I" and amount of
interest being remitted, for example,
I225000.00)
Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
000 Xxxx Xxxxxxx Xxxxxx
4th Floor, Zone 6
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxx
For Allstate Insurance Company/
Safekeeping Account No. 846626
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
0000 Xxxxxxx Xxxx, XXX X0X
Xxxxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Tax ID #00-0000000
Schedule A-3
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
----------------------------- ---------------------
Pacific Life Insurance Company (1) $5,000,000
000 Xxxxxxx Xxxxxx Xxxxx (2) $5,000,000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (3) $2,500,000
Attention: Securities Department
Address for all communications is as above, except notices of payment
and written confirmations of wire or inter-bank transfers. All payments
are to be by bank wire transfer of immediately available funds to:
For Payment of Principal & Interest:
Federal Reserve Bank of Boston
ABA# 0000-0000-0/BOS SAFE DEP
DDA 125261
Attn: MBS Income CC: 1253
A/C Name: Pacific Life General Account/PLCF1810132
Each wire transfer shall identify such payment as "THC Systems,
Inc., 7.49% Senior Notes due November 1, 2008."
Notices of payment and written confirmations of wire or inter-bank
transfers shall be addressed to:
Mellon Trust
Attn: Pacific Life Accounting Team
Xxx Xxxxxx Xxxx Xxxxxx
Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
And
Pacific Life Insurance Company
Attn: Securities Administration - Cash Team
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000-0000
All securities being purchased should be registered in the nominee name
of "Mac & Co" and delivered to:
Mellon Securities Trust Company
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx 212.374.1918
A/C Name: Pacific Life General Acct
A/C#: PLCF1810132
General Tax ID #: 00-0000000
SCHEDULE 6.01(a)
BORROWED MONEY
Oneida Ltd.
USD $2,000,000 presently outstanding and owed to Alliance Bank under a USD
$2,000,000 line of credit
USD $4,285,714 owed under 8.52% Senior Notes due 1/15/02 issued pursuant to a
Note Agreement dated as of January 1, 1992
USD $1,500,000 presently outstanding and owed to Oneida Savings Bank under a
USD$3,000,000 line of credit
USD $2,500,000 line of credit with the Chase Manhattan Bank of which no
indebtedness presently is outstanding
Buffalo China, Inc.
USD $185,526 owed to NYS Urban Development Corporation under a loan
Delco International, Ltd.
None
Encore Promotions, Inc.
None
Sakura, Inc.
None
THC Systems, Inc.
USD 31,100,000 owed under 7.49% Senior Notes due 11/1/08 issued pursuant to a
Note Agreement dated as of November 15, 1996
SCHEDULE 6.01(b)
GUARANTEES
Irrevocable Letter of Credit
#SPC 32421
Issued: 1/8/92 by Chase
Amount: $86,760
In Favor of: McGilroy Ltd. Partnership
For Account of: KSCI
Payable: on presentation of original Letter of Credit & statement that KSCI has
defaulted under its (factory outlet store) lease with McGilroy
Issued by HSBC Bank USA
$2,500,000
In favor of The Hong Kong and Shanghai Banking Corporation, Ltd.
Purpose: to guarantee borrowing by Shanghai Premium Tableware Manufacturing Co.
Ltd., A wholly owned subsidiary of Oneida International, Inc.
Guarantee Agreements-
Buffalo China, Inc. in favor of the Purchasers pursuant to the January 15, 1992
Note Agreement.
Oneida Ltd. in favor of the Purchasers pursuant to the January 15, 1992 Note
Agreement.
Oneida Ltd. in favor of HSBC with respect to borrowing by Oneida Australia Pty
Ltd. dated May 1998.
Oneida Ltd. in favor of Banca Nazionale del Lavoro with respect to borrowings by
Oneida Italy, Srl. Dated November 1999.
SCHEDULE 6.01(c)
CAPITAL LEASES
Oneida Ltd.
1. IBM Credit Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Equipment Covered: Various Computer Equipment
Lease Date: March 2001
Lease Term: 36
Each Lease Payment: $4,550.00/month
2. Toyota Motor Credit Corporation
Commercial Finance Division
0000 Xxxx 000xx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
a. Equipment Covered: Three (3) Fork Lift Trucks
Lease Date: May 10, 1999
Lease Term: 60 months
Each Lease Payment: $797.25/month
b. Equipment Covered: Two (2) Fork Lift Trucks
Lease Date: May 10, 1999
Lease Term: 60 months
Each Lease Payment: $531.50/month
c. Equipment Covered: One (1) Fork Lift Truck
Lease Date: October 27, 1999
Lease Term: 36 months
Each Lease Payment: $265.00/month
d. Equipment Covered: One (1) Fork Lift Truck
Lease Date: October 27, 1999
Lease Term: 60 months
Each Lease Payment: $314.00/month
e. Equipment Covered: One (1) Fork Lift Truck
Lease Date: September 28, 2000
Lease Term: 60 months
Each Lease Payment: $297.61/month
3. Xxxxx Leasing Company
0000 Xxxxxxxx Xxxx Xxxxx
X.X. Xxx 0000
Xxx Xxxxx, XX 00000-0000
Equipment Covered: Various Copier Equipment
Lease Date: June 30, 1999
Lease Term: 63 months
Each Lease Payment: $5,204.48/month
4. Ameritech Credit Corporation
d/b/a Ameritech Capital Services
0000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxxx, XX 00000
Equipment Covered: Securitylink Security System
Lease Date: June 1999
Lease Term: 60 months
Each Lease Payment: $364.00
5. IOS (IKON Office Solutions) Capital, Inc.
X.X. Xxx 0000
Xxxxx, XX 00000-0000
Equipment Covered: One (1) Copier and Finisher
Lease Date: September 27, 2000
Lease Term: 60 months
Each Lease Payment: Months 1-12: $630.62/month
Months 13-60: $1,056.62/month
6. USBancorp.
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Equipment Covered: One (1) Copier
Lease Date: March 2001
Lease Term: 42 months
Each Lease Payment: $210.00/month
7. NMHG Financial Services, Inc.
X.X. Xxx 000X
Xxxxxxx, XX 00000
Equipment Covered: Three (3) Lift Trucks
Lease Date: March 1, 2000
Lease Term: 60 months
Each Lease Payment: $841.01/month
8. V.T., Inc., as Trustee of World Omni Financial Corp.
X.X. Xxx 0000
Xxxxxxxxx, XX 00000-0000
Equipment Covered: 2000 Jeep Grand Cherokee
Lease Date: August 25, 2000
Lease Term: 36 months
Each Lease Payment: $312.45/month
Buffalo China, Inc.
1. NMHG Financial Services, Inc.
X.X. Xxx 000X
Xxxxxxx, XX 00000
Equipment Covered: One (1) Motorized Hand Truck
Lease Date: May 30, 2000
Lease Term: 60 months
Each Lease Payment: $166.05/month
2. Xxxxxx Handling, Inc.
0000 Xxxx Xxxx
Xxxxxxx, XX 00000
Equipment Covered: Four (4) Reach Trucks
Lease Date: September 5, 2000
Lease Term: 60 months
Each Lease Payment: $1,086.14/month
Delco International, Ltd.
1. Pitney Xxxxx Credit Corporation
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 0000-0000
Equipment Covered: One (1) Postage Meter
Lease Date: December 8, 1999
Lease Term: 63 months
Each Lease Payment: $455.00/month
2. Chase Equipment Leasing, Inc.
Xxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Equipment Covered: Three (3) Fork Lift Trucks
Lease Date: April 6, 1998
Lease Term: -
Each Lease Payment: $1525.57/month
3. Toyota Motor Credit Corporation
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Equipment Covered: Fork Lift Truck(s)
Lease Date: -
Lease Term: -
Each Lease Payment: $415.21/month
4. IBM Credit Corporation
0 Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Equipment Covered: Various computer equipment
Lease Date: October 2, 1998
Lease Term: -
Each Lease Payment: $1,040.00/month
5. Xerox
Equipment Covered: Copier
Lease Date: -
Lease Term: -
Each Lease Payment: approx. $250.00/month
Encore Promotions, Inc.
1. Pitney Xxxxx Credit Corporation
0 Xxxxxxxx Xxxx
Xxxxxxxx, XX 0000-0000
Equipment Covered: One (1) Postage Meter
Lease Date: January 19, 2001
Lease Term: 48 months
Each Lease Payment: $145.00/month
Sakura, Inc.
1. Leasecomm Corporation
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Equipment Covered: Linkpoint 3000 printer
Lease Date: none
Lease Term: 48 months
Each Lease Payment: $39.99/month
2. MCS Canon Business Solution, Inc.
Equipment Covered: One (1) copier
Lease Date: September 25, 1998
Lease Term: 36 months
Each Lease Payment: $665.23/month
3. Minolta Business Solutions
Xxx Xxxxxxxxxxxxx Xxxx. 00xx Xxxxx
Xxxxxx, XX 00000-0000
Equipment Covered: One (1) color copier
Lease Date: May 1, 2000
Lease Term: 36
Each Lease Payment: $745.00/month
THC Systems, Inc.
None
ANNEX I
Subsidiary Guarantors of the Company and Jurisdictions where each Subsidiary
Guarantor is Qualified to do Business as a Foreign Corporation
% OWNED BY
SUBSIDIARY GUARANTOR STATES COMPANY
1. Buffalo China, Inc. California 100%
2. Delco International, Ltd. None 100%
3. Encore Promotions, Inc. None 100%
4. Sakura, Inc. California 100%
(qualified as "Oneida-Sakura Inc.")
New Jersey
(qualified as "Oneida-Sakura, Inc.")
5. THC Systems, Inc. North Carolina 100%
ANNEX II
Existing Indebtedness
a) Borrowed Money - See attached Schedule 6.01(a)
b) Guaranties - See attached Schedule 6.01(b)
c) Borrowed Money Secured by Lien - See attached Schedule 6.01(c)
ANNEX III
Description of Liens
ANNEX IV
Schedule of Insurance
ANNEX V
Restrictions
None
EXHIBIT A
ONEIDA LTD.
SENIOR SECURED NOTE
Due May 31, 2005
--------------------
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT AND
ACCORDINGLY ANY PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE UNPAID PRINCIPAL
AMOUNT WITH THE COMPANY.
THIS NOTE IS ISSUED IN SUBSTITUTION FOR AND IN REPLACEMENT OF THAT
SENIOR NOTE DUE NOVEMBER 1, 2008, AS AMENDED AND RESTATED AS OF NOVEMBER 1, 2000
ISSUED BY THC SYSTEMS, INC.
--------------------
Registered Note No. R- April 27, 2001
----
$
---------------
THC SYSTEMS, INC., a New York corporation (the "Company), for value
received, hereby promises to pay to the order of Allstate Life Insurance
Company, or registered assigns, on the thirty-first day of May, 2005, the
principal amount of __________ Dollars ($________) and to pay interest (computed
on the basis of a 360-day year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon at the rate of:
(i) 7.49% per annum commencing May 1, 1997 up to and
including September 11, 2000;
(ii) 7.99% per annum from September 12, 2000 up to and
including December 13, 2000;:
(iii) 8.49% per annum commencing December 14, 2000 up to
and including April 27, 2001;
(iv) 8.84% per annum from April 28, 2001 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 7.49% and (ii) the Company provides evidence to the
Noteholders satisfactory to the Noteholders that: (1) the
Lenders 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 last day of the
immediately preceding Fiscal Quarter, in compliance with
Section 7.12 of the Note Agreement (as hereinafter defined)
and (3) no Event of Default exists, or
(c) maturity; and
(v) Notwithstanding the foregoing, if the amount of capital
required to be maintained
by the Noteholders in respect of the Notes is increased as a result of a Change
in Capital (as defined below), the interest rate then in effect on the Notes
shall be increased by 0.50% (50 basis points) effective as of the date on which
such increase in required capital is effective. The Noteholders agree to notify
the Company of such increase and the date on which such increase becomes
effective, promptly after learning of such increase in required capital. As used
herein, "Change in Capital" means any change after the date of this Agreement
that increases the risk-based capital factor attributable to the Notes as
mandated by the risk-based capital guidelines for life and health insurance
companies in effect in the United States on the date of this Agreement.
All such interest payments shall be payable quarterly on the first
(1st) day of November, February, May and August of each year, commencing May 1,
1997, 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) the sum of the rate of interest then in effect plus two percent (2%) per
annum, after maturity or the due date thereof, whether by acceleration or
otherwise, until paid, to be expressed to mature on May 31, 2005. Payments of
the principal of, the premium, if any, and interest on this Note shall be made
in lawful money of the United States of America in the manner and at the place
provided in Section 2.5 of the Note Agreement hereinafter defined.
This Note is issued under and pursuant to the terms and provisions of
that certain Note Agreement dated as of November 15, 1996, as amended by that
certain Amended and Restated Note Purchase Agreement dated as of November 15,
1996, and as further amended by that 2001 Amended and Restated Note Agreement
dated as of May 31, 2001, each of which is entered into by the Company and
Oneida Ltd. (the "Guarantor") with the Noteholders named in Schedule I thereto
(collectively, as the same may from time to time be amended, restated,
supplemented or modified, the "Note Agreement"), and this Note and any holder
hereof are entitled to all of the benefits and are bound by the terms provided
for by such Note Agreement or referred to therein. The provisions of the Note
Agreement are incorporated in this Note to the same extent as if set forth at
length herein. All defined terms used herein shall have the meanings assigned to
such terms in the Note Agreement.
As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or his attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of the
taxes or other governmental charges, if any, that may be imposed in connection
therewith. The Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required to
be made hereon all in the events, on the terms and in the manner as provided in
the Note Agreement. Such prepayments include certain required prepayments on
November 1 of each year beginning November 1, 2000 and ending November 1, 2004
and certain optional prepayments with a premium.
Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company and the Guarantor agree to
pay, in addition to the principal, premium, if any, and interest due and payable
hereon, all reasonable costs of collecting this Note, including reasonable
attorneys' fees and expenses.
This Note is secured pursuant to the terms of certain Security
Documents and Subsidiary Guarantees and a Noteholder's rights hereunder are
subject to the terms of a Collateral Agency Agreement with certain other lenders
to the Company.
This Note and the Note Agreement are governed by and construed in
accordance with the laws of the State of Illinois.
THC SYSTEMS, INC.
By:
----------------------------------
Its:
EXHIBIT B
LEGAL OPINIONS
A. The opinion of Xxxxxxx, Carton & Xxxxxxx, special counsel for the
Purchasers, shall be to the effect that:
1. The Company is a corporation organized and validly existing in good
standing under the laws of the State of New York, with all requisite corporate
power and authority to carry on its business as now conducted, to enter into and
perform the Agreement and to issue and sell the Notes.
2. The Agreement has been duly authorized by proper corporate action on
the part of the Company, has been duly executed and delivered by an authorized
officer of the Company and constitutes the legal, valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the extent that
enforcement of the Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
3. The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed and delivered by an authorized
officer of the Company and constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
4. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes do not require the registration of the
Notes under the Securities Act of 1933, as amended, nor the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
5. The issuance and sale of the Notes and compliance with the terms and
provisions of the Notes and the Agreement will not conflict with or result in
any breach of any of the provisions of the Certificate of Incorporation or
By-Laws of the Company.
The opinion of Xxxxxxx, Carton & Xxxxxxx also shall state that the opinion of
Shearman & Sterling, counsel for the Company, delivered to you pursuant to the
Agreement, is satisfactory in form and scope to Xxxxxxx, Carton & Xxxxxxx, and,
in their opinion, the Purchasers and it are justified in relying thereon and
shall cover such other matters relating to the sale of the Notes as the
Purchasers may reasonably request. Xxxxxxx, Carton & Xxxxxxx may rely, as to
matters of New York law, on the opinion of Shearman & Sterling.
B. The opinion of Shearman & Sterling, counsel for the Company, shall
cover all matters specified in clauses 1 through 6 set forth above and also
shall be to the effect that:
1. The Company has full corporate power and authority to conduct the
activities in which it is now engaged and own its property.
2. Each Subsidiary of the Company is a corporation duly organized and
validly existing in good standing under the laws of its jurisdiction of
incorporation, and each has all requisite corporate power and authority to carry
on its business as now conducted and own its property.
3. Each of the Company and its Subsidiaries is duly qualified or
licensed and in good standing as a foreign corporation authorized to do business
in each jurisdiction where the nature of the business transacted by it or the
character of its properties owned or leased makes such qualification or
licensing necessary except where failure to so qualify would not, individually
or in the aggregate, have a material adverse affect on its business, properties,
or condition, financial or otherwise.
4. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Company of the Agreement or the lawful offering, issuance
and sale of the Notes, and no designation, filing, declaration, registration
and/or qualification with any governmental authority is required by the Company
in connection with such offer, issuance and sale.
5. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Agreement will not conflict with, or result in
any breach or violation of any of the provisions of, or constitute a default
under, or result in the creation of any Lien on the property of the Company or
any Subsidiary pursuant to, (i) the provisions of the Certificate of
Incorporation or other charter document or by-laws of the Company or any
Subsidiary or any loan agreement under which the Company or any Subsidiary is
bound, or other agreement or instrument known to such counsel (after due
inquiry) to which the Company or any Subsidiary is a party or by which any of
them or their property is bound or (ii) any New York law (including usury laws)
or regulation, order, writ, injunction or decree of any court or governmental
authority applicable to the Company known to such counsel.
6. There are no actions, suits or proceedings pending or, to the best
of such counsel's knowledge after due inquiry, threatened against, or affecting
the Company or its Subsidiaries, at law or in equity or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which are likely to
result, either individually or in the aggregate, in any material adverse change
in the business, properties, operations or condition, financial or otherwise, of
the Company and its Subsidiaries taken as a whole.
7. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and, to the knowledge of such counsel, are owned by the Company free and clear
of any Lien.
8. The issuance of the Notes and the use of the proceeds of the sale of
the Notes do not violate or conflict with Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
9. Neither the Company nor any Subsidiary is: (i) a "public utility
company" or a "holding company," or an "affiliate" or a "subsidiary company" of
a "holding company," or an "affiliate" of such a "subsidiary company," as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended,
or (ii) a "public utility" as defined in the Federal Power Act, as amended, or
(iii) an "investment company" or an "affiliated person" thereof or an
"affiliated person" of any such "affiliated person," as such terms are defined
in the Investment Company Act of 1940, as amended.
The opinion of Shearman & Sterling shall cover such other matters relating to
the sale of the Notes as the Purchasers may reasonably request. With respect to
matters of fact on which such opinion is based, such counsel shall be entitled
to rely on appropriate certificates of public officials and officers of the
Company and with respect to matters governed by the laws of any jurisdiction
other than the United States of America and the State of New York, such counsel
may rely upon the opinions of counsel deemed (and stated in their opinion to be
deemed) by them to be competent and reliable.
EXHIBIT C
SECURITY AGREEMENT
EXHIBIT D
AMENDED AND RESTATED SUBSIDIARY
SUBORDINATION AGREEMENT
EXHIBIT E
AMENDED AND RESTATED SUBSIDIARY
GUARANTEE AGREEMENT
EXHIBIT F
PLEDGE AGREEMENT
