EXHIBIT 4(a)(xiii)
LOAN AGREEMENT
FLEET NATIONAL BANK
to
ONEIDA LTD.
Dated as of July 28, 1999
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of July 28, is made by and
between ONEIDA LTD., a New York business corporation with an
address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("Borrower"") and FLEET NATIONAL BANK, a national banking
association with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Bank").
In consideration of the mutual covenants and agreements
contained herein, Borrower and the Bank agree as follows:
SECTION 1
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINED TERMS. All terms used in this Agreement
shall have the defined meanings set forth below when used herein
or in any Credit Document, or in any certificate or report made
or delivered under this Agreement, unless the context otherwise
requires or unless such term is otherwise defined therein.
"Adjusted Tangible Assets" shall mean all assets except:
(i) deferred assets, other than prepaid insurance and
prepaid taxes, deferred taxes and deferred pension
expense;
(ii) patents, copyrights, trademarks, trade names,
franchises, good will, experimental expense and other
similar intangibles;
(iii) Restricted Investments;
(iv) unamortized debt discount and expense; and
(v) assets located, and notes and accounts receivable
due from obligors domiciled, outside the United States
of America, unless such assets are owned by or such
notes and accounts receivable are due from
Subsidiaries.
"Affiliate" shall mean a Person (other than a Subsidiary)
which directly controls, or is controlled by, or is under common
control with, the Borrower. The term "control" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person,
either through the ownership of Voting Securities, by contract or
otherwise.
"Agreement" shall mean this Loan Agreement as originally
executed, and as the same may, from time to time, be amended or
supplemented as hereinafter provided.
"Applicable Rate" shall be the rate of interest payable on
the Term Loan and shall mean and refer to the "Level IV Rate", or
the "Level III Rate", or the "Level II Rate", or the "Level I
Rate", calculated and determined by the Bank at Closing and
thereafter effective as of each November 1, February 1, May 1
and August 1, based upon the Borrower's quarterly and annual
financial statements for the immediately preceding four (4)
fiscal quarters commencing on November 1, 1999, as follows:
Level IV Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is greater than 3.5
to 1, the Applicable Rate shall be LIBOR plus
one hundred seventy (170) basis points.
Level III Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 3.5 to 1 but more than 2.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred fifty (150) basis points.
Level II Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 2.5 to 1 but more than 1.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred thirty (130) basis points.
Level I Rate - So long as no Event of Default
has occurred and the Borrower is then in
compliance with the financial covenants set
forth in Section 4 below, if the Borrower's
Leverage Ratio is 1.5 to 1 or less, the
Applicable Rate shall be LIBOR plus one
hundred ten (110) basis points.
"Authorized Person" shall mean:
Name Title
▇▇▇▇▇▇ ▇▇▇▇▇ Senior Vice President
▇▇▇▇▇▇▇ ▇▇▇▇ Treasurer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Assistant Cashier
▇▇▇▇▇▇ ▇▇▇▇▇▇ Cashier
By written Notice, accompanied by a copy of the Borrower's
Board of Directors Resolution, the Borrower may designate its
Authorized Person(s) to be the individual(s) named in such
resolution.
"Bank" shall mean and refer to Fleet National Bank, and its
successors and assigns.
"Borrower" shall mean and refer to Oneida Ltd.
"Business Day" shall mean any day other than a Saturday,
Sunday or day which in the State of New York shall be a legal
holiday or a day on which banking institutions are required or
authorized to close.
"Code" shall mean the Internal Revenue Code of 1986,
including all regulations issued thereunder, all as from time to
time amended.
"Consolidated Adjusted Net Income" shall mean for any
period, the gross revenues of the Borrower and its Subsidiaries
for such period less all expenses and other proper charges
(including taxes on income), determined on a consolidated basis
after eliminating earnings or losses attributable to outstanding
minority interests, but excluding in any event:
(i)(1) any gains or losses on the sale or other
disposition of investments and
(2) any gains or losses on the sale or other
disposition of plant, property and equipment which
gains or losses exceed, in the aggregate, One Hundred
Thousand Dollars ($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;
(ii) the proceeds of any life insurance policy;
(iii) net earnings and losses of any Subsidiary
accrued prior to the date it became a Subsidiary;
(iv) net earnings and losses of any corporation
(other than a Subsidiary), substantially all the assets
of which have been acquired in any manner by the
Borrower or any Subsidiary, realized by such
corporation prior to the date of such acquisition;
(v) net earnings and losses of any corporation (other
than a Subsidiary) with which the Borrower or a
Subsidiary shall have consolidated or which shall have
merged into or with the Borrower or a Subsidiary prior
to the date of such consolidation or merger;
(vi) net earnings of any business entity (other
than a Subsidiary) in which the Borrower or any
Subsidiary has an ownership interest unless such net
earnings shall have actually been received by the
Borrower or such Subsidiary in the form of cash
distributions or readily marketable securities;
(vii) any portion of the net earnings of any
Subsidiary which for any reason is unavailable for
payment of dividends to the Borrower or any other
Subsidiary;
(viii) earnings resulting from any reappraisal,
revaluation or write-up of assets;
(ix) 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;
(x) any gain arising from the acquisition of any
securities of the Borrower or any Subsidiary;
(xi) 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 (4) consecutive fiscal quarters
immediately following the end of such fiscal period;
and
(xii) any other extraordinary gain.
"Consolidated Adjusted Tangible Assets" shall mean the
Adjusted Tangible Assets of the Borrower and its Subsidiaries at
such date determined on a consolidated basis.
"Consolidated Adjusted Tangible Net Worth" shall mean:
(i) the net book value (after deducting related
depreciation, obsolescence, amortization, valuation and
other proper reserves) at which the Adjusted Tangible
Assets of the Borrower and all Subsidiaries would be
shown on a consolidated balance sheet at such date, but
excluding any amount on account of write-ups of assets;
(ii) minus the amount at which their liabilities
(other than capital stock and surplus) would be shown
on such balance sheet, and including as liabilities all
reserves for contingencies and other potential
liabilities and all minority interests in Subsidiaries.
"Consolidated Current Assets" at any date means the amount
at which the current assets of the Borrower and all Subsidiaries
would be shown on a consolidated balance sheet at such date.
"Consolidated Current Liabilities" at any date shall mean
the amount at which the current liabilities of the Borrower and
all Subsidiaries would be shown on a consolidated balance sheet
at such date, plus (without duplication) the aggregate amount of
their Guaranties of current liabilities of other Persons
outstanding at such date.
"Controlled Group" shall mean all members of a controlled
group of corporations and all trades or businesses (whether or
not incorporated) under common control, which together with the
Borrower, are treated as a single employer under Section 414(b)
or 414(c) of the Code.
"Cost of Funds" shall mean the per annum rate of interest
which the Bank is required to pay, or is offering to pay, for
wholesale liabilities of like tenor, adjusted for reserve
requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as
determined by the Bank.
"Current Debt" with respect to a Person shall mean all
liabilities for borrowed money, all obligations under capitalized
leases, and all liabilities secured by any Lien other than a Lien
permitted by Section 4.6(a)(i)-(iv), existing on Property owned
by that Person, which, in any case, are payable on demand or
within one year from their creation, plus the aggregate amount of
Guaranties of all such liabilities of other Persons, except:
(i) any liabilities which are renewable or extendible
at the option of the debtor to a date more than one
year from the date of creation thereof; and
(ii) any liabilities which, although payable within one
year, constitute principal payments on indebtedness
expressed to mature more than one year from the date of
its creation.
"Draw Request" shall mean the Borrower's request for a Line
Loan completed and delivered to the Bank as provided in Section
2.1(b) of this Agreement.
"EBITDA" shall mean the Borrower's and Subsidiaries'
consolidated earnings before interest, taxes, depreciation and
amortization, provided that in calculating EBITDA for the
Borrower's fiscal year ending January 29, 2000, the May 1, 1999,
Thirty Five Million Eight Hundred Thousand Dollars ($35,800,000)
restructuring expense shall be disregarded.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as from time to time amended.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of any group or organizations (i)
described in Section 414(b) or (c) of the Code of which the
Borrower is a member, or (ii) solely for the purposes of
potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which the Borrower is a member.
"Event of Default" shall mean each event of default
described in Section 5 of this Agreement.
"GAAP" shall mean generally accepted accounting principles
in the United States of America in effect on the date the Credit
Documents are executed and delivered.
"Guaranty" shall mean with respect to any Person, all
guaranties of, and all other obligations which in effect guaranty
in any manner, any indebtedness, dividend or other obligation of
any other Person other than any Subsidiary or the Borrower (such
other person hereafter referred to as the "primary obligor"),
including obligations incurred through an agreement, contingent
or otherwise, by such Person:
(i) to purchase such indebtedness or obligation or, in
the circumstances contemplated by clause (iii) below,
any Property constituting security thereof;
(ii) to advance or supply funds (A) for the purchase or
payment of such indebtedness or obligation, or (B) to
maintain working capital or any balance sheet or income
statement condition;
(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 of the ability of the primary obligor to
make payment of the indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness
or obligation, or the primary obligor, against loss;
but excluding endorsements in the ordinary course of business of
negotiable instruments for deposit or collection.
"Leverage Ratio" shall mean the Borrower's and Subsidiaries'
Total Funded Debt divided by Borrower's and Subsidiaries'
consolidated EBITDA.
"LIBOR" shall mean the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in
U.S. dollars, for one (1) month to six (6) months as specified by
the Borrower in its Repricing Notice with respect to Term Loan
(the "Interest Period") which appears on the Telerate page 3750
as of 11:00 a.m. London time on the day that is two London
Banking Days preceding the first day of such LIBOR advance;
provided that if the Bank does not receive Borrower's Repricing
Notice at least two (2) London Banking Days preceding the first
day of such LIBOR advance, this Note shall bear interest at the
Prime Rate of Interest; provided further, however, if the rate
described above does not appear on the Telerate System on any
applicable interest determination date, the LIBOR rate shall be
the rate (rounded upwards as described above, if necessary) for
deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as
may replace the LIBO Page on that service for the purpose of
displaying such rates), as of 11:00 a.m. (London Time), on the
day that is two (2) London Banking Days prior to the beginning of
such Interest Period. "Banking Day" shall mean, in respect of
any city, any date on which commercial banks are open for
business in that city.
If both the Telerate and Reuters system are unavailable,
then the rate for that date will be determined on the basis of
the offered rates for deposits in U.S. dollars for the period of
time comparable to the Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00
a.m. London time, on the date that is two (2) London Banking Days
preceding the first day of such LIBOR advance as selected by the
Bank. The principal London office of each of the four major
London banks will be requested to provide a quotation of its U.S.
dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis
of the rates quoted for loans in U.S. dollars to leading European
banks for period of time comparable to such Interest Period
offered by major banks in New York City at approximately 11:00
a.m. New York City time, on the date that is two London Banking
Days preceding the first day of such LIBOR advance. In the event
that Bank is unable to obtain any such quotation as provided
above, it will be deemed that LIBOR pursuant to a LIBOR advance
cannot be determined, and the LIBOR rate shall not be available
to Borrower and interest on the Term Loan shall accrue and be
paid by the Borrower at the Bank's Prime Rate of Interest.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Bank then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-Currency Liabilities" as
defined in Regulation D.
"Lien" shall mean any interest in Property securing an
obligation owed to, or a claim by, a Person other than the owner
of the Property, whether the interest is based on common law,
statute or contract (including the security interest lien arising
from a mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security
purposes). The term "Lien" shall not include minor reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions and other minor title exceptions
affecting Property, provided that they do not constitute security
for a monetary obligation. For the purposes of this Agreement,
the Borrower or a Subsidiary shall be deemed to be the owner of
any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement
pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such
retention or vesting shall be deemed to be a Lien. The amount of
any Lien shall be the aggregate amount of the obligation secured
thereby.
"Line" or "Line of Credit" shall mean and refer to the
Fifteen Million Dollar ($15,000,000) line of credit provided for
in Section 2.1 of this Agreement.
"Line Loan" shall mean and refer to each advance by the Bank
to the Borrower under the Line of Credit.
"Line Termination Date" shall have the meaning given to such
term in Section 2.1(c) of this Agreement.
"Loans" shall mean and refer to the Term Loan and each
advance under the Line of Credit.
"Loan Documents" or "Credit Documents" shall mean this
Agreement, the Term Note, the Line Note and any ISDA Master
Agreement which is or may hereafter be entered into by the
Borrower with respect to the Term Loan.
"Long Term Debt" with respect to a Person shall mean all
liabilities for borrowed money (including, without limitation,
subordinated debt), all obligations under capitalized leases, and
all liabilities secured by any Lien other than any Lien permitted
by Section 4.6(a)(i)-(iv), existing on Property owned by that
Person (whether or not those liabilities have been assumed), or
any other obligation (other than deferred taxes) which are
required by generally accepted accounting principles to be shown
as liabilities on its balance sheet which, in any case, are
payable more than one year from the date of their creation,
including (i) any liabilities which are renewable or extendible
at the option of the obligor to a date more than one year from
their creation and (ii) any liabilities which, although payable
within one year, constitute principal payments on indebtedness
expressed to mature more than one year from its creation, plus
the aggregate amount of Guaranties of all such liabilities of
other Persons.
"Note" or "Notes" shall mean the Line Note and the Term
Note.
"Notice" or "notice" shall mean wherever used in this
Agreement, written notice delivered as specified in Section 6.4
of this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under
ERISA.
"Pension Plan(s)" shall mean all "employee pension benefit
plans" as such term is defined in Section 3 of ERISA, maintained
by the Borrower and its subsidiaries from time to time.
"Person" shall mean a corporation, limited liability
company, association, partnership, trust, unincorporated
organization, business, individual and any government agency or
political subdivision or branch thereof.
"Plan" shall mean any employee benefit or other plan
established or maintained, or to which contributions have been
made, by the Borrower or any ERISA Affiliate and which is covered
by Title IV of ERISA.
"Prime" or "Prime Rate" or "Prime Rate of Interest" shall
mean the variable per annum rate of interest so designated from
time to time by Fleet National Bank as its prime rate. The Prime
Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer. Changes in the
rate of interest resulting from changes in the Prime Rate shall
take place immediately without notice or demand of any kind.
"Repricing Notice" shall mean the notice delivered by the
Borrower to the Bank as provided in Section 2.2(c) of this
Agreement in order to select a LIBOR Interest Period.
"Restricted Investments" shall mean all Property, including
all investments in any Person, whether by acquisition of stock,
indebtedness, other obligation or security, or by loan, advance,
capital contribution, or otherwise, except:
(i) investments in one or more Subsidiaries or any
corporation which concurrently with such investment
becomes a Subsidiary;
(ii) Property to be used in the ordinary course of
business, including without limitation, advances made
to employees for expenses incurred in the ordinary
course of business;
(iii) current assets arising from the sale of goods
and services in the ordinary course of business;
(iv) direct obligations of the United States of
America, or any of its agencies or obligations fully
guaranteed by the United States of America, provided
that such obligations mature within one year from the
date acquired;
(v) demand deposits or certificates of deposit
maturing within one year from the date acquired and
issued by a bank or trust company organized under the
laws of the United States or any of its states, and
having capital, surplus and undivided profits
aggregating at least Fifty Million Dollars
($50,000,000);
(vi) commercial paper given the highest rating by
a national credit rating agency and maturing not more
than 270 days from the date acquired; and
(vii) shares of capital stock of the Borrower held
in its treasury as of the date of this Agreement.
"Subsidiary" shall mean a corporation in which the Borrower
owns, directly or indirectly, sufficient Voting Stock to enable
it ordinarily, in the absence of contingencies, to elect a
majority of the corporate directors (or Persons performing
similar functions).
"Term Loan" shall mean the Fifteen Million Dollar
($15,000,000) Term Loan provided for in Section 2.2 of this
Agreement.
"Term Note" shall mean and refer to the note executed and
delivered by the Borrower to the Bank to evidence the Borrower's
obligations to repay Term Loan.
"Total Funded Debt" shall mean the sum of the Borrower's and
Subsidiaries' (i) Long Term Debt (including the current portion
thereof) and (ii) Current Debt.
"Voting Stock" shall mean securities, the holders of which
are ordinarily in the absence of contingencies, entitled to elect
corporate officers (or Persons performing similar functions).
SECTION 2
THE LOANS
2.1 LINE OF CREDIT.
(a) Line Amount. The Bank shall provide to the Borrower
on an offering basis a line of credit in an amount not to exceed
Fifteen Million Dollars ($15,000,000).
(b) Line Loans. Prior to the Business Day immediately
preceding the Line Termination Date, so long as no Event of
Default has occurred and so long as no event has occurred which
but for the giving of notice or the lapse of time or both would
constitute an Event of Default, the Borrower may request Line
Loans by timely delivering to the Bank a Draw Request in the form
attached hereto as Schedule A, signed by an Authorized Person,
setting forth the date, the amount of the requested Line Loan,
whether the Borrower elects a floating interest rate based on the
Bank's Prime Rate of Interest less one hundred and fifty (150)
basis points or a fixed rate based upon the Bank's Cost of Funds
plus fifty (50) basis points (and in the latter case, specifying
the term of the requested Line Loan), and otherwise completing
the Draw Request. Draw Requests must be received by the Bank not
later than 1:00 p.m. on the Business Day on which the Borrower
requests a Line Loan to be made.
(c) Line Termination Date. Unless extended in writing by
the Bank or unless the Bank earlier demands payment in full of
outstanding Line Loans, the Bank's obligation to make Line Loans
shall in all event cease and expire on July 29, 2000.
(d) Line Loan Repayment Terms. The Borrower's obligation
to repay Line Loans shall be evidenced by the Borrower's demand
Note in substantially the form attached hereto as Schedule B.
(e) Line of Credit Interest Rate. Loans made by the Bank
to the Borrower under the Line shall bear interest as specified
in the Borrower's Draw Request at either (i) the Bank's Prime
Rate of Interest less one hundred and fifty (150) basis points,
or (ii) with respect to Line Loans of Five Hundred Thousand
Dollars ($500,000) or more, a fixed rate equal to the Bank's Cost
of Funds for a period not to exceed one hundred and eighty (180)
days (but in no event beyond the Line Termination Date), plus
fifty (50) basis points.
2.2 TERM LOAN.
(a) Loan Amount and Purpose. The Term Loan amount shall be
Fifteen Million Dollars ($15,000,000), which amount shall be used
by the Borrower to repay and refinance certain short term
indebtedness incurred by the Borrower in connection with the
completion of certain capital projects.
(b) Term Loan Fee. Concurrently with the execution and
delivery of the Term Note, the Borrower shall pay to the Bank a
Term Loan fee in the amount of Thirty Seven Thousand Five Hundred
Dollars ($37,500).
(c) Term Loan Interest Rate. The Borrower shall repay the
Term Loan with interest at the Applicable Rate. The Borrower will
submit to the Bank the Borrower's Repricing Notice not later than
two (2) London Banking Days preceding the date on which an
Interest Period ends and the Applicable Rate is to be reset. In
the Repricing Notice, the Borrower may request up to three (3)
different Interest Periods with respect to up to three (3)
portions of the Loan (each, a "Tranche"). In its discretion, the
Bank may agree to the Borrower's request for separate Tranches in
which event as of the date of the creation of the separate
Tranches, (i) no Tranche may be less than Two Million Dollars
($2,000,000), (ii) at least one Tranche shall bear interest at
the Applicable Rate based upon one month LIBOR (the "One Month
Tranche"), and (iii) all scheduled payments of principal received
by the Bank will be applied by the Bank to reduce the principal
balance of the One Month Tranche.
(d) Term Loan Repayment. The Term Loan shall be repaid
under a Term Note in substantially the form attached hereto and
made a part hereof as Schedule C.
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1 EXISTENCE AND RIGHTSAND RIGHTSRIGHTS. The Borrower and each
Subsidiary is a corporation duly organized and validly existing
under the laws of the jurisdiction of its incorporation, each
with full power and authority to own its properties, conduct its
operations as now conducted, and with respect to the Borrower, to
enter into and to perform its obligations under this Agreement
and the other Credit Documents and the Borrower and each
Subsidiary is duly licensed or qualified and in good standing as
a foreign corporation in each other jurisdiction in which the
failure to qualify would materially and adversely affect the
conduct of its business.
3.2 AGREEMENT AND CREDIT DOCUMENTS AUTHORIZED. The execution,
delivery and performance of the Credit Documents by the Borrower
have been duly authorized by all required corporate action and
the execution, delivery and performance of the Credit Documents
do not require consent or approval of any governmental body or
other regulatory authority, are not in contravention of or in
conflict with any law or regulation applicable to the Borrower or
any term or provision of the Borrower's certificate of
incorporation or by-laws, and the Credit Documents are each
valid, binding and legally enforceable obligations of the
Borrower enforceable in accordance with their respective terms.
3.3 NO CONFLICT. The execution, delivery and performance of each
of the Credit Documents by the Borrower will not breach or
constitute a default under any loan agreement, credit agreement,
indenture or similar document, or any other undertaking or
instrument, to which the Borrower is a party, or by which the
Borrower or any of its property is or may be bound or affected,
and the execution, delivery and performance by the Borrower will
not result in the creation or imposition of (or the obligation to
create or impose) any lien, charge or encumbrance on, or security
interest in, any of the property of the Borrower excepting only
liens or security interests in favor of the Bank.
3.4 LITIGATION. Except as disclosed in the Borrower's audited
financial statements for the period ending January 30, 1999,
there is no action, proceeding or investigation at law or in
equity, pending or threatened by or before any court, arbitration
panel or governmental instrumentality or agency which is not
fully covered by insurance (less normal deductibles) and which if
determined adversely to Borrower could have a material adverse
effect on the financial condition, properties, affairs or
operations of Borrower and Borrower is not in default with
respect to any final order, writ, injunction, decree, rule,
ruling or demand of any court, tribunal or other governmental or
regulatory instrumentality or agency.
3.5 FINANCIAL CONDITION. The Borrower has furnished to the Bank
the Borrower's consolidated balance sheet and the related
operating statement and statement of changes in financial
position for the Borrower's fiscal year ending January 30, 1999.
These financial statements present fairly in conformity with GAAP
the consolidated financial condition and affairs of Borrower and
its Subsidiaries as of the date thereof, and the consolidated
results of the operations of Borrower and its Subsidiaries for
the periods covered thereby, and have been prepared in accordance
with generally accepted accounting principles on a basis
consistently applied. The unaudited consolidated balance sheet
of the Borrower and its Subsidiaries with respect to the period
ending May 1, 1999 and the related unaudited consolidated
statements of income and retained earnings and changes in
financial position of the Borrower and its Subsidiaries for the
period then ended, copies of which have been delivered to the
Bank, fairly present in accordance with GAAP, the consolidated
financial position of the Borrower and its Subsidiaries as at
such date and the consolidated results of the operations for the
period then ended. Since the date of the most recent such
balance sheet and related operating statement there has been no
materially adverse change in the assets or liabilities or
financial condition of Borrower or its Subsidiaries.
3.6 TITLE TO ASSETS. Except as set forth on Schedule D,
Borrower and each Subsidiary each have good and marketable title
to each of the assets titled in their respective names and none
of such assets are subject to any Lien, mortgage, deed of trust,
pledge, security interest or other encumbrance.
3.7 TAX STATUS. Borrower and each Subsidiary have filed all tax
returns and reports required to be filed (or have obtained
necessary and appropriate extensions of time) and have paid all
applicable federal, state and local franchise, income and other
taxes, fees, assessments or other charges which are or have been
due and payable prior to the date of this Agreement.
3.8 ABSENCE OF CONTINGENT OBLIGATIONS. Neither the Borrower nor
any Subsidiary have made any Guaranty of any nature or otherwise
agreed to or incurred any other contingent obligation not
disclosed on the financial statements delivered to the Bank.
3.9 ABSENCE OF DEFAULT. Each of the Borrower and each Subsidiary
has satisfied all judgments and neither the Borrower nor any
Subsidiary is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court, arbitrator,
or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or
foreign. Neither the Borrower nor any Subsidiary is a party to
any indenture, loan or credit agreement or lease or other
agreement or instrument or subject to any charter or corporate
restriction which could have a material adverse affect on the
business, properties, assets, operations or conditions, financial
or otherwise, of the Borrower or any Subsidiary, or the ability
of the Borrower to carry out its obligations under the Credit
Documents. Neither the Borrower nor any Subsidiary is in default
in any respect in the performance, observance or fulfillment of
any obligations, covenants or conditions contained in any
agreement or instrument material to its business to which it is a
party.
3.10 SUBSIDIARIES. The capital stock of each Subsidiary has
been validly issued, is fully paid and non-assessable and is
owned by the Borrower free and clear of all Liens..
3.11 ENVIRONMENTAL COMPLIANCE. The Borrower and each Subsidiary
(a) is in compliance in all material respects with all applicable
environmental, transportation, health and safety statutes and
regulations, and (b) 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. Neither the Borrower nor
its Subsidiaries have 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, leased or
operated by any of them.
3.12 ERISA. The Borrower and each member of the Controlled Group
have fulfilled their obligations under the minimum funding
standards of ERISA and the Code with respect to each Plan and are
in compliance in all material respects with the presently
applicable provisions of ERISA and Code and have not incurred any
liability to the PBGC or to a Plan under Title IV of ERISA.
Neither the Borrower nor any member of the Controlled Group have
incurred any accumulated funding deficiency within the meaning of
ERISA.
SECTION 4
COVENANTS
Borrower covenants and agrees that so long as any credit
hereunder shall be available, and until payment in full of the
Loans:
4.1 EXISTENCE. Except as permitted by Section 4.6(b), Borrower
and each Subsidiary shall maintain and preserve its corporate
existence and all rights, privileges and franchises and other
authority adequate for the conduct of their operations; maintain
their respective Property in good order and repair, conduct
their respective operations without voluntary interruption or
cessation. ;The Borrower shall maintain its principal offices at
the place specified at the beginning of this Agreement, until
after such time as the Bank is given written notice of any change
of any of such location.
4.2 INSURANCE. Borrower and each Subsidiary shall maintain with
financially sound and reputable insurers, insurance with respect to each of
their respective Property and business against such casualties
and contingencies, of such types (including public liability,
larceny, embezzlement or other criminal misappropriation
insurance) and in such amounts as is customarily maintained in
the case of corporations of established reputations engaged in
the same or similar businesses and similarly situated. All
insurance required to be provided by the Borrower and each
Subsidiary shall be issued by companies reasonably satisfactory
to the Bank and under policies requiring at least thirty (30)
days prior written notice to the Bank as a condition to any
termination or material reduction of coverage.
4.3 TAXES AND OTHER LIABILITIES. Intentionally deleted.
4.4 RECORDS AND REPORTS. Borrower and each Subsidiary shall
maintain a system of accounting in accordance with generally
accepted accounting principles on a basis consistently applied,
permit representatives of the Bank to have access to and to
examine Borrower's and each Subsidiaries' Property, books and
records at all reasonable times on reasonable notice, and at no
expense to the Bank, the Borrower furnish to the Bank:
(a) Within one hundred-twenty (120) days of the end of each
fiscal year, the Bank shall be furnished with Borrower's audited
consolidated financial statements (which shall include a copy of
any management letter delivered to the Borrower), each certified
by an independent certified public accountant retained by the
Borrower and reasonably satisfactory to the Bank, and which
contain balance sheets and income statements, together with
comparative figures for the prior year. Quarterly, within sixty
(60) days of each fiscal quarter, the Bank shall be furnished
with internally prepared consolidated financial statements for
the Borrower. Each such quarterly statement shall be certified
to by the Borrower's chief financial officer and shall contain
balance sheets and income statements together with comparative
figures for the same period for the prior year. Each such annual
and quarterly financial statement shall fairly present the
financial condition of the Borrower and its Subsidiaries for the
periods covered. The Borrower shall also furnish to the Bank (i)
the Borrower's annual 10-K report within one hundred twenty (120)
days of the end of each of the Borrower's fiscal years, (ii) the
Borrower's quarterly 10-Q report within sixty (60) days of the
end of each of the Borrower's fiscal quarters, and (iii) such
other management reports as the Bank may reasonably request.
(b) Concurrently with the delivery of the annual
consolidated audit and quarterly consolidated internal
statements, a certificate of the Chief Financial Officer or the
principal accounting officer of the Borrower (i) setting forth
whether the Borrower is in compliance with the requirements of
this Section 4 on the date of such financial statements, (ii)
stating whether there exists on the date of such certificate any
Event of Default and, if any Event of Default exists, setting
forth the details thereof and the action which the Borrower is
taking or proposes to take with respect thereto, and (iii) having
attached thereto a schedule in reasonable detail satisfactory to
the Bank setting forth the computations necessary to determine
whether the Borrower is in compliance with the financial
covenants set forth in Section 4.5 of this Agreement.
(c) Promptly, after the occurrence of any Event of Default,
a certificate of the chief financial officer or the principal
accounting officer of the Borrower setting forth the details
thereof and the action which the Borrower is taking or proposes
to take with respect thereto.
(d) If and when the Borrower or any member of the
Controlled Group gives or is required to give notice to the PBGC
of any "Reportable Event" (as defined in Section 4043 of ERISA)
with respect to any Plan under Title IV of ERISA, or knows that
the Plan administrator of any Plan has given or is required to
give notice of any such reportable event, a copy of the notice of
such Reportable Event given or required to be given to the PBGC;
and
(e) Such other financial information regarding Borrower
and each Subsidiary as the Bank may reasonably request.
4.5 CERTAIN BORROWER FINANCIAL COVENANTS.
(a) Minimum Current Ratio. The Borrower shall maintain a
minimum ratio of Consolidated Current Assets divided by
Consolidated Current Liabilities (all computed in accordance with
generally accepted accounting principles consistently applied),
measured as at the end of each of Borrower's fiscal quarters, of
not less than 1.75 to 1;
(b) Maximum Leverage Ratio. The Borrower shall maintain a
maximum Leverage Ratio of 4.0 to 1 measured as at the end of each
of the Borrower's fiscal quarters for the period including such
fiscal quarter and the then immediately preceding three (3)
fiscal quarters;
(c) Minimum Cash Flow Coverage. The Borrower shall
maintain a minimum ratio of consolidated EBITDA less cash
dividends and less cash income taxes (determined in accordance
with GAAP), divided by the current maturities of Borrower's and
Subsidiaries' Long-Term Debt plus interest, of not less than 1.50
to 1, all measured as at the end of each of Borrower's fiscal
quarters for the period including such fiscal quarter and the
immediately preceding three (3) fiscal quarters.
4.6 .6 .6 .6 NEGATIVE PLEDGE/SALE OF PROPERTY. So long as
any amounts remain unpaid on account of any of the Loans and so
long as the Borrower may request Loans from the Bank, neither the
Borrower nor any Subsidiary shall:
(a) 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 any Lien, except:
(i) 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 (A)
they do not in the aggregate materially reduce the
value of any Property subject to the Liens or material
interfere with their use in the ordinary conduct of the
owning company's business, (B) all claims which the
Liens secure are not delinquent or are being actively
contested in good faith and by appropriate proceedings,
and (C) adequate reserves have been established
therefor on the books of the Borrower, if required by
generally accepted accounting principles;
(ii) Liens incurred or deposits made in the ordinary
course of business (A) in connection with worker's
compensation, unemployment insurance, social security
and other like laws, or (B) to secure the performance
of letters of credit, bids, tenders, 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;
(iii) attachment, judgment and other similar Liens
arising in connection with court proceedings, provided
that (A) execution and other enforcement are
effectively stayed, (B) all claims which the Liens
secure are being actively contested in good faith by
appropriate proceedings and (C) adequate reserves have
been established therefor on the books of the Borrower,
if required by generally accepted accounting
principles;
(iv) Liens on Property of a Subsidiary, provided that
they secure only obligations owing between the Borrower
and any Subsidiary;
(v) Liens existing on the date hereof, which Liens
have been disclosed in writing to the Bank;
(vi) other Liens not otherwise permitted under this
Section 4.6(a) securing Long Term Debt or Current Debt
and limited to real estate, plant or equipment,
provided such Liens secure the purchase price of such
property, do not exceed the lesser of the cost or fair
market value of such property, and do not extend to any
other asset; and provided, further, that the aggregate
amount of indebtedness secured by such Liens shall not
exceed twenty percent (20%) of Consolidated Adjusted
Tangible Net Worth or, with respect to Buffalo China,
Inc., Five Million Dollars ($5,000,000); and
(vii) Liens resulting from the extension,
refunding, renewal or replacement of the indebtedness
secured by the Liens described in paragraphs (iv), (v)
and (vi) above, up to the amount outstanding under such
indebtedness at the time of such extension, refunding,
renewal or replacement.
In case any Property is subjected to a Lien in violation of
Section 4.6(a), the Borrower will make or cause to be made
provisions whereby the Notes will be secured equally and ratably
with all other obligations secured thereby, 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. Such violation of Section 4.6(a) shall constitute an
Event of Default whether or not any such provision is made
pursuant to this paragraph; or
(b) Sell, lease, or otherwise dispose of any of its
Property (other than by the Borrower as permitted under Section
4.7 below) or sell or otherwise dispose of any shares of the
stock of a Subsidiary, nor will any Subsidiary issue, sell or
otherwise dispose of any shares of its own stock where the effect
would be to reduce the direct or indirect proportionate interest
of the Borrower and its other Subsidiaries in the stock of the
Subsidiary whose shares are the subject of the transaction,
provided, however, that these restrictions do not apply to:
(i) the issue of directors' qualifying shares; or
(ii) the transfer of Property (other than Subsidiary
stock) in the ordinary course of business; or
(iii) the transfer of Property (including up to,
but not more than, fifteen percent (15%) of the
outstanding stock of any Subsidiary) during any fiscal
year to any Person if (A) such Property does not,
together with Property of the Borrower and all of its
Subsidiaries previously disposed of during such fiscal
year (other than in the ordinary course of business or
as is permitted by Section 4.7), constitute ten percent
(10%) or more of Consolidated Adjusted Tangible Assets
determined as of the beginning of such fiscal year; (B)
the sum of the portions of Consolidated Adjusted Net
Income which were contributed during the immediately
preceding four (4) fiscal quarters by (1) such
Property, (2) each Subsidiary which has been disposed
of since the beginning of such four (4) fiscal quarters
(other than to the Borrower and other than in a
transaction permitted by Section 4.7 below), and (3)
other Property of the Borrower and all Subsidiaries
disposed of since the beginning of such four (4) fiscal
quarters (other than in the ordinary course of business
and other than to the Borrower and other than in a
transaction permitted by Section 4.7 below), do not
constitute more than ten percent (10%) of the
Consolidated Adjusted Net Income for any such four (4)
fiscal quarters; and (C) the amount of the Subsidiary
stock transferred when added to Subsidiary stock
previously transferred does not exceed fifteen percent
(15%) of the outstanding Subsidiary stock of any
Subsidiary. For the purposes of determining Borrower's
compliance with this subsection (iii), in the event of
a sale of up to fifteen percent (15%) of the stock of a
Subsidiary, the Property transferred shall be deemed to
be the Adjusted Tangible Assets of such Subsidiary
multiplied by the percentage of Subsidiary stock
transferred.
4.7 MERGER AND CONSOLIDATION. Neither Borrower nor any
Subsidiary will be a party to any merger or consolidation (except
that a Subsidiary may combine with the Borrower or another
Subsidiary) provided that the Borrower may merge or consolidate
if the surviving or acquiring corporation is organized under the
laws of the United States or any jurisdiction thereof, expressly
assumes the covenants and obligations of the Credit Documents,
is solvent and would not immediately after giving effect to the
transaction be in default under any term of any Credit Document.
4.8 GUARANTIES. Neither the Borrower nor any Subsidiary will
become liable for or permit any of its Property to become subject
to any Guaranty except: (a) Guaranties of indebtedness for
borrowed money under which the maximum aggregate principal amount
guaranteed can be mathematically determined at the time of
issuance, and (b) other Guaranties under which the maximum
aggregate amount guaranteed can be mathematically determined at
the time of issuance. Each Guaranty permitted by this Section 4.8
must comply with the other requirements of Section 4.5(a), 4.5(b)
and 4.5(c) to the extent the provisions of Section 4.5(a), 4.5(b)
and 4.5(c) require the amount of the Guaranty to be included in
Consolidated Current Liabilities, Current Debt, Long Term Debt or
Total Funded Debt.
4.9 TAXES AND CLAIMS. Intentionally deleted.
4.10 TRANSACTIONS WITH SUBSIDIARIES AND AFFILIATES. Neither the
Borrower nor any Subsidiary will enter into any transaction
(including the purchase, sale or exchange of Property or the
rendering of any service) with any Affiliate except upon fair and
reasonable terms which are at least as favorable to the Borrower
and to the Subsidiary as would be obtained in a comparable arms-
length transaction with a non-Affiliate.
4.11 PREPAYMENTS.
(a) Term Loan Prepayment. The Borrower may prepay the Term
Loan only upon three (3) Business Days prior written notice to
the Bank (which notice shall be irrevocable), and any such
prepayment shall occur only on the last day of the Interest
Period involved. As a condition to the Borrower's right to make
such prepayment, the Borrower shall upon the request of the Bank
pay to the Bank such amount or amounts as shall be sufficient (in
the reasonable opinion of the Bank) to compensate it for any
loss, cost or expense incurred as a result of (i) any prepayment
of the Term Loan on a date other than the last day of the
Interest Period, or (ii) any failure by Borrower to prepay the
Term Loan on the date for prepayment specified in Borrower's
written notice. Without limiting the foregoing, the Borrower
shall pay to the Bank a "yield maintenance fee" in an amount
computed as follows: The current rate for United States Treasury
Securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the end of the
Interest Period during which the prepayment is made, shall be
subtracted from the LIBOR in effect at the time of prepayment. If
the result is zero or a negative number, there shall be no yield
maintenance fee. If the result is a positive number, then the
resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be
divided by three hundred sixty (360) and multiplied by the number
of days remaining the Interest Period during which the prepayment
is made. Such amount shall be reduced to a present value
calculated using the above-referenced United States Treasury
Securities rate and the number of days remaining in the Interest
Period during which the prepayment is made.
The resulting amount shall be the yield maintenance fee due
to the Bank upon the prepayment. If by reason of an Event of
Default, the Bank elects to declare the Term Loan to be
immediately due and payable, then any yield maintenance fee with
respect to the Term Loan shall become due and payable in the same
manner as though the Borrower had exercised such right of
prepayment.
(b) PREPAYMENT OF LINE LOANS. The Borrower may prepay a
Line Loan bearing interest based upon the Bank's Prime Rate of
Interest without premium or yield maintenance fee. The Borrower
shall have the right to prepay a Line Loan (bearing interest
based upon the Bank's Cost of Funds) in whole (but not in part)
only upon the condition that the Borrower concurrently pay to the
Bank a yield maintenance fee in an amount computed as follows:
The current rate for United States Treasury Securities
(bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the maturity date
chosen pursuant to the Fixed Rate Election (defined below) as to
which the prepayment is made, shall be subtracted from the Cost
of Funds component of the fixed rate in effect at the time of
prepayment. If the result is zero or a negative number, there
shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the
amount of the principal balance being prepaid. The resulting
amount shall be divided by three hundred sixty (360) and
multiplied by the number of days remaining the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is
made. Such amount shall be reduced to a present value calculated
using the referenced United States Treasury Securities rate and
the number of days remaining in the term chosen pursuant to the
Fixed Rate Election as to which the prepayment is made. The
resulting amount shall be the yield maintenance fee due to the
Bank upon such prepayment.
Each reference in this section to "Fixed Rate Election"
shall mean the election by the Borrower for a Line Loan bearing
interest based upon the Bank's Cost of Funds. If by reason of an
Event of Default, the Bank elects to declare the Line Loan(s) to
be immediately due and payable, then any yield maintenance fee
with respect to each Loan involved shall become due and payable
in the same manner as though the Borrower had exercised such
right of prepayment.
4.12 ERISA COMPLIANCE.
(a) Neither the Borrower nor any Subsidiary will at any
time fail to comply with the minimum funding standards of Title
I, Part 3 of ERISA or Section 412 of the Code.
(b) All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension
Plans and the present value of assets of Pension Plans shall be
reasonable in the good faith judgment of the Borrower and shall
comply with all requirements of law.
(c) Neither the Borrower nor any Subsidiary will at any
time permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction", as such
term is defined in Section 4975 of the Code;
(ii) incur any "accumulated funding deficiency", as
such term is defined in Section 302 of ERISA, whether
or not waived; or
(iii) be terminated in a manner which could result
in the imposition of a Lien on the Property of the
Borrower or any Subsidiary pursuant to Section 4068 of
ERISA.
4.13 CHANGES IN BUSINESS. Neither the Borrower nor any
Subsidiary (whether now existing or hereafter acquired or
organized) will engage in any business if, after given effect
thereto, less than eighty percent (80%) of the Consolidated
Adjusted Tangible Assets of the Borrower at the most recently
ended fiscal quarter would be attributable to the current
business of the Borrower and its Subsidiaries taken as a whole,
including, but not limited to, the manufacturing, advertising,
sales and distribution of household and food service products and
related business.
4.14 MAINTENANCE OF OFFICE. Borrower shall maintain its
principal place of business at the location specified at the
beginning of this Agreement until such time as the Borrower
notifies the Bank of the Borrower's intention to relocate such
principal place of business.
4.15 COMPLIANCE WITH LAWS. The Borrower and each Subsidiary
shall comply with all laws, ordinances or governmental rules and
regulations to which it is subject and will not fail to obtain
any license, permit, franchise or other governmental
authorizations necessary to the ownership of its Property or to
conduct its business, which violation or failure to obtain might
materially adversely affect the business, prospects, profits,
Property or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole.
4.16 LOANS. The Borrower shall not lend money or extend credit
other than (a) the extension of normal payment terms to
Borrower's or a Subsidiary's customers in the ordinary and normal
course of Borrower's or such Subsidiary's business as presently
conducted, or (b) loans to Subsidiaries.
4.17 REGULATIONS G, T, U. The Borrower shall not use the proceeds
of any Loan directly or indirectly to purchase or carry any
margin stock (within the meaning of regulations G, T and U of the
Board of Governors of the Federal Reserve System), or extend
credit to others for the purpose of purchasing or carrying,
directly or indirectly, any margin stock.
4.18 PAYMENT OF TAXES AND CLAIMS. The Borrower and each
Subsidiary will pay, before they become delinquent:
(a) all taxes, assessments and governmental charges or
levies imposed upon it or its Property; and
(b) all claims or demands of materialmen, mechanics,
carriers, warehouseman, landlords and other like Persons which,
if unpaid, might result in the creation of a Lien upon its
Property,
provided that the items enumerated in subsections (a) and (b)
above need not be paid while being contested in good faith and by
appropriate proceedings and provided further that adequate book
reserves have been established with respect thereto, if required
by generally accepted accounting principles, and provided further
that the owing company's title to, and its right to use, its
Property is not materially adversely affected thereby.
SECTION 5
EVENTS OF DEFAULT
5.1 EVENTS OF DEFAULT. Upon the occurrence of any of the
following Events of Default, automatically upon the happening of
any Event of Default specified in Section 5.1(d) or 5.1(e)
hereof, and, with respect to the other Events of Default during
the continuation thereof, at the option of the Bank, the Bank
shall have no obligation to consider or to make Line Loans to the
Borrower and all sums of principal and interest then remaining
unpaid on account of the Loans and all other amounts payable
hereunder or under any other Credit Document, shall be
immediately due and payable, all without demand, presentment or
notice, all of which are expressly waived, and the Bank may
enforce all of its rights pursuant to this Agreement, all other
Credit Documents and under law:
(a) Failure by Borrower to make any payment of principal,
interest, fees or other amounts due under any Note, or by
Borrower or any Subsidiary on any other obligation owed to the
Bank, within ten (10) days of the date when due.
(b) The occurrence of an event of default which would
permit the acceleration before stated maturity of any revolving
credit obligation of the Borrower or any Subsidiary, any
reimbursement obligation with respect to any letter of credit
issued on behalf of the Borrower or any Subsidiary, any line of
credit or any private placement indebtedness of the Borrower or
any Subsidiary including the debt held by Allstate Life Insurance
and by Pacific Mutual Life Insurance where the amount which can
be accelerated exceeds in the aggregate, One Million Dollars
($1,000,000).
(c) The entry of one or more judgments against Borrower or
any Subsidiary individually or aggregating in excess of One
Million Five Hundred Thousand Dollars ($1,500,000) not fully
covered by insurance (less normal deductibles) and the failure in
any such case to bond or otherwise satisfy or discharge such
judgments or liens within sixty (60) days of the date of entry.
(d) The Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, or shall consent to any
such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to
authorize any of the foregoing.
(e) An involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or similar law now or
hereafter in effect seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary
case or other proceeding is not controverted by Borrower or such
Subsidiary within ten (10) days and is not dismissed within sixty
(60) days; or an order for relief shall be entered against the
Borrower or any Subsidiary under the federal bankruptcy laws as
now or hereafter in effect.
(f) The Borrower or any member of the Controlled Group
shall fail to pay when due any amount which it shall have become
liable to pay to the PBGC or to a Plan or Plans or notice of
intent to terminate a Plan or Plans having aggregate unfunded
vested liabilities shall be filed under Title IV of ERISA by the
Borrower or any member of the Controlled Group, any plan
administrator or any combination of the foregoing, or the PBGC
shall institute proceedings under Title IV of ERISA to terminate
or to cause a trustee to be appointed to administer any such Plan
or Plans or a proceeding shall be instituted by a fiduciary of
any such Plan or Plans to enforce Section 515 of ERISA and such
proceeding shall not have been dismissed within thirty (30) days
thereafter, or a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that any
such Plan or Plans must be terminated.
(g) Any Person or two or more Persons acting in concert
(other than the Borrower, any Subsidiary, any employee benefit
plan maintained by the Borrower or any of its Subsidiaries, or
any trustee or fiduciary with respect to such Plan acting in such
capacity):
(i) shall have acquired beneficial ownership (within
the meaning of Rule 13(d)(3) of the Securities and
Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of securities of the
Borrower (or other securities convertible into such
securities) representing twenty percent (20%) or more
of the combined voting power of all securities of the
Borrower entitled to vote in the election of directors,
other than securities having such power only by reason
of the happening of a contingency; or
(ii) shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement which
upon consummation will result in its or their
acquisition of, control over securities of the Borrower
(or other securities convertible into such securities)
representing twenty percent (20%) or more of the
combined voting power of all securities of the Borrower
entitled to vote in the election of directors, other
than securities having such power only by reason of the
happening of a contingency.
(h) A breach or violation of the covenants described in
Sections 4.4, 4.6, 4.7, 4.8, 4.9, 4.10 or 4.12 above;
(i) A breach or violation by Borrower of any provision,
agreement or covenant contained in, or the occurrence of any
event of default under any other Credit Document and the failure
to cure same within any applicable grace period.
5.2 LATE FEE AND DEFAULT RATE OF INTEREST. In addition to the
Bank's other rights, remedies, powers and privileges, and not in
lieu thereof:
(a) Borrower shall pay to the Bank a late charge equal to
one-half of one percent (1/2%) of the amount of any payment due
under a Note and not made within ten (10) days of the date when
due.
(b) Upon the occurrence of an Event of Default, the Loans
shall thereafter bear interest at a rate equal to the Prime Rate
of Interest plus one percent (1%).
SECTION 6
MISCELLANEOUS
6.1 SURVIVAL OF PROVISIONS. All agreements, covenants,
provisions, representations, warranties and undertakings made
herein shall survive the execution and delivery of this
Agreement, the execution and delivery of all other Credit
Documents and the making of the Loans.
6.2 FAILURE OR INDULGENCE NOT A WAIVER. No failure or delay on
the part of the Bank or any holder of any Note in the exercise of
any power, right, remedy or privilege hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any
such power, right, remedy or privilege preclude other or further
exercise thereof, or of any other right, power, remedy or
privilege. All rights, powers, remedies and privileges existing
under this Agreement and the other Credit Documents are
cumulative to, and not exclusive of, any rights or remedies
otherwise available to the Bank, all of which rights and remedies
may be exercised by the Bank, singly or in combination and in
such order or sequence as the Bank, in its sole discretion, may
elect.
6.3 WAIVER/MODIFICATION. Neither this Agreement nor any Credit
Document nor any provision in any of them may be amended, waived
or modified in any manner, absent the execution and delivery of a
writing by the Bank intended for such purpose.
6.4 NOTICES. Except as otherwise expressly provided herein or in
any other Credit Document, any notice required or permitted to be
given, shall be deemed to have been duly given if personally
delivered, delivered by an overnight courier service or mailed by
certified mail return receipt requested, postage and registry
fees prepaid in the event of mailing, and in all events addressed
to the party to receive such notice at the address for such party
set forth at the beginning of this Agreement. By notice, any
party may change the address to which further notices shall be
sent. All notices shall be deemed given when mailed or delivered
in the manner provided in this Section, except that a notice
changing the address to which future notices shall be sent shall
be effective only on actual receipt (or refusal of delivery) by
the party to whom such notice is addressed.
6.5 SEVERABILITY. In the event any provision of this Agreement
or any other Credit Document shall be finally held by a court of
competent jurisdiction to be invalid, illegal or unenforceable,
such provision shall be severed from the remainder of this
Agreement or such other Credit Document, as the case may be, and
the validity, legality and enforceability of the remaining
provisions of this Agreement and the other Credit Documents shall
in no way be affected or impaired thereby.
6.6 APPLICABLE LAW. This Agreement, the other Credit Documents
and the rights and obligations of the parties hereto and thereto,
shall in all respects be governed by and enforced under and in
accordance with the laws of the State of New York, exclusive of
New York's Conflicts of Law rules and public policies.
6.7 ASSIGNABILITY. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns, and
shall inure to the benefit of the Bank and its successors and
assigns. Borrower may not assign, in whole or in part, any of
its rights under this Agreement.
6.8 SECTION AND SUBSECTION HEADINGS. The various headings used
in this Agreement and the division of the Agreement into sections
and subsections are for convenience of reference only, do not
form a part of this Agreement and shall not affect the meaning or
interpretation of this Agreement or any provision hereof.
6.9 FURTHER ASSURANCES. At any time or from time to time upon
the request of the Bank, Borrower shall execute and deliver such
further documents and do such other acts and things as the Bank
may reasonably request in order to effect fully the purposes of
the Credit Documents and to provide for the payment of the Loans
and interest thereon. Further, upon receipt of an affidavit of
an officer of the Bank as to the loss, theft, destruction or
mutilation of a Note or any other Credit Document which is not of
public record, and in the case of any such loss, theft,
destruction or mutilation, upon surrender and cancellation of the
Note or other Credit Document, Borrower, will issue in lieu
thereof, a replacement Note or other Credit Document in the same
principal amount thereof in the case of a Note and otherwise of
like tenor.
6.10 ENTIRE AGREEMENT. This Agreement (including any Schedules)
and the other Credit Documents and any other instruments executed
by Borrower in connection with this Agreement, taken together
constitute the entire agreement between the parties and supersede
all prior or contemporaneous negotiations, agreements and
understandings, all of which are merged into this Agreement and
the other Credit Documents.
6.11 PAYMENTS ON BUSINESS DAYS. Whenever any payment to be made
under this Agreement or under a Note is due on a day other than a
day on which the Bank is open for business, the payment shall be
made on the immediately following Business Day.
6.12 NO USURY. All agreements between the Borrower and the Bank
are hereby expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of a
Loan or otherwise, shall the amount paid or agreed to be paid to
the Bank for the use or forebearance of a Loan indebtedness
exceed the maximum permissible under applicable law. As used
herein, the term "applicable law" shall mean the law in effect as
of the date of this Agreement provided, however, that in the
event that there is a change in the law which results in a higher
permissible rate of interest, then this Agreement and the other
Credit Documents and each Loan shall be governed by such new law
as of its effective date. In this regard it is expressly agreed
that it is the intent of the Borrower and the Bank in the
execution, delivery and acceptance of this Agreement, the Notes
and the other Credit Documents to contract in strict accordance
with the laws of the State of New York from time to time in
effect. If, under or from any circumstance whatsoever,
fulfillment of any provision of this Agreement or of any of the
other Credit Documents at the time performance of such provision
shall be due, shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be
fulfilled shall be automatically reduced to the limits of such
validity, and if, under or from any circumstance whatsoever the
Bank should ever receive as interest an amount which would exceed
the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the principal
balance of the Loans and not to the payment of interest. This
provision shall control every other provision of all agreements
between the Borrower and the Bank.
6.13 BANK ENTITLED TO RELY. The Bank shall be entitled to rely on
all information, financial or otherwise, delivered to the Bank by
Borrower or by any Person authorized by Borrower to deliver same,
irrespective of any investigation or inquiry that the Bank has or
could have made, or which the Bank may in the future makes or
could make.
6.14 CERTAIN RULES OF CONSTRUCTION. Wherever possible, the terms
and provisions of which Agreement, the Notes and each other
Credit Document, shall be read and construed as being consistent.
However, if notwithstanding the foregoing directive, any
provision in this Agreement conflicts with a provision in the
Notes or in any other Credit Document, then the provision
affording to the Bank the greatest right, entitlement, discretion
or remedy shall govern and the conflicting provision shall for
all purposes be disregarded.
6.15 EXPENSES. Borrower agrees to pay all expenses of the Bank
(including the reasonable fees and expenses of its counsel) in
connection with the preparation of this Agreement and all of the
other Credit Documents, the completion of the transactions
contemplated hereby or thereby and incidental to the enforcement
of any provision of this Agreement or of any of the other Credit
Documents. Borrower further agrees that in the event the Bank
refers to an attorney for collection of any amounts due under
this Agreement, under any Note or under any other Credit
Document, or the enforcement of the Bank's rights under any
Credit Document, Borrower shall pay to the Bank the reasonable
attorneys fees and expenses thereby incurred by the Bank.
6.16 JURY WAIVER. Borrower and Bank mutually hereby knowingly,
voluntarily, and intentionally waive the right to a trial by jury
in respect of any claim based herein, arising out of, under or in
connection with this Agreement or any of the other Credit
Documents contemplated to be executed in connection herewith or
any course of conduct, course of dealings, statements (whether
verbal or written) or actions of any party. This waiver
constitutes a material inducement for the Bank to enter into this
Agreement and to make the Loans.
6.17 CERTAIN BANK RIGHTS.
(a) The Bank shall have the unrestricted right at any time
and from time to time and without the consent of or notice to
Borrower, to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Bank's obligations to lend hereunder and/or in any Loan. In
the event of any such grant by the Bank of a participating
interest to a Participant, whether or not upon notice to
Borrower, the Bank shall remain liable for the performance of the
Bank's obligations under the Credit Documents and Borrower shall
continue to deal solely and directly with the Bank in connection
with the Bank's rights and obligations. The Bank may furnish any
information concerning Borrower or its Subsidiaries in its
possession from time to time to prospective assignees and
Participants, provided that each assignee or participant (or
prospective assignee or participant) agrees to maintain the
confidentiality of non-public confidential information received
from the Bank except for disclosures to officers, employees,
auditors and counsel and disclosures required by law or pursuant
to judicial process.
(b) The Bank may at any time pledge all or any portion of
its rights under the Credit Documents including any portion of
any Note, to any of the twelve (12) Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or enforcement thereof shall release
the Bank from its obligations under any of the Credit Documents.
6.18 PAYMENTS/INTEREST CALCULATION. All payments to the Bank
under the Notes shall be in lawful money of the United States in
immediately available funds. All computations of interest on
account of the Loans shall be made on the basis of a three
hundred sixty (360) day year and the actual number of days
elapsed.
6.19 OFFSET RIGHTS. Borrower grants to the Bank a lien, security
interest and right of setoff as security for all of its
liabilities and obligations to the Bank whether now existing or
hereafter arising, upon and against all deposits, credits,
collateral and property, now or hereafter in possession, custody,
safe keeping or control of the Bank or any entity under the
control of Fleet Financial Group, or in transit to any of them.
At any time without demand or notice, the Bank may setoff the
same or any part thereof and apply the same to any liability or
obligation of Borrower regardless of the adequacy of any other
collateral securing the Loans. Any and all rights to require the
Bank to exercise its rights or remedies with respect to any other
collateral which secures the Loans, prior to its exercising its
right of setoff with respect to such deposits, credits or other
property of Borrower are hereby knowingly and voluntarily and
irrevocably waived.
6.20 NO BROKER. Borrower represent and warrant to the Bank that
no broker has been instrumental in arranging for the Loans, and
Borrower agree to defend, indemnify and hold the Bank harmless
from and against any claim by any broker or any finder for any
fee or commission or similar payment on account of or with
respect to any of the Loans.
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
ONEIDA LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Senior Vice
President, Finance
SCHEDULE LIST
Schedule A - Draw Request
Schedule B - Line Note
Schedule C - Term Note
Schedule D - Liens/Exceptions to
Title
SCHEDULE A
DRAW REQUEST
TO: FLEET NATIONAL BANK (Commercial Loan Department)
The Borrower, Oneida Ltd., hereby requests a draw from Fleet
National Bank under Borrower's Line of Credit. Reference herein
to the Commercial Purpose Master Note shall mean the Line Note
given by Borrower to Bank dated July 28, 1999.
A. We wish to draw $_______________ on a Variable Rate basis
per the terms of the Line Note.
B. We wish to draw $_______________ for _________ days at the
rate quoted to us of _______% per annum, on a fixed rate
basis per the terms of the Line Note.
With respect to the draw requested above, we hereby ask that you
wire transfer such funds to us in accordance with the following
wiring instructions:
WIRE TRANSFER INSTRUCTIONS
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
C. We owe the principal sum of $___________ pursuant to a
previous borrowing made by us on a Fixed Rate basis per the
terms of the Line Note. We wish to continue our borrowing of
said principal sum:
q On a Variable Rate basis per the terms of the Line
Note.
q For _______ days at the rate quoted to us of _______%
per annum, on a Fixed Rate basis per the terms of the
Line Note.
Kindly confirm by fax to our fax number (____)_____________.
DATED:________________ ONEIDA LTD.
By:___________________________
Its Authorized Person
SCHEDULE B
LINE NOTE
$15,000,000 Dated as of July 28, 1999
At Syracuse, New York
FOR VALUE RECEIVED, the undersigned, ONEIDA LTD., a New York
business corporation with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower") unconditionally promises
to pay to the order of FLEET NATIONAL BANK, a national banking
association with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ and its successors or assigns (the
"Bank") on demand, the principal sum of Fifteen Million Dollars
($15,000,000) or the aggregate such amount of "Line Loans" (as
that quoted term is defined in the Loan Agreement between the
Bank and the Borrower dated as of July 28, 1999 [the "Loan
Agreement"]), together with interest at a rate equal to either
(i) the Bank's Prime Rate of Interest less one hundred and fifty
(150) basis points, or (ii) with respect to Line Loans of
$500,000 or more, a fixed rate equal to the Bank's Cost of Funds
for a period not to exceed one hundred and eighty (180) days (but
in no event beyond the Line Termination Date (the "Cost of Funds
Interest Period") plus fifty (50) basis points, as follows:
The Borrower shall pay interest on all Line
Loans bearing interest at the Bank's Prime
Rate of Interest less one hundred and fifty
(150) basis points on the last day of each
calendar quarter on the unpaid principal
balance of such Line Loans computed on a
daily basis for the immediately preceding
calendar quarter. The Borrower shall pay
interest on all Line Loans bearing interest
at a rate equal to the Bank's Cost of Funds
plus fifty (50) basis points on the last day
of the Cost of Funds Interest Period
applicable to such Loan. On July 29, 2000
(the "Line Termination Date") (unless such
date is extended in writing by the Bank) or
on such earlier date that the Bank demands
payment of amounts due under this Note, the
Borrower shall pay to the Bank one hundred
percent (100%) of the then unpaid principal
balance of all Line Loans, together with all
accrued and unpaid interest.
This Line Note is one of the Notes provided for in the Loan
Agreement. The Bank is entitled to all of the privileges and
benefits of the Loan Agreement, the terms and conditions of which
are incorporated herein and made part hereof. Terms used in this
Line Note and denoted with a capitalized first letter shall have
the meanings ascribed to such terms in the Loan Agreement unless
otherwise defined herein.
"Prime Rate of Interest" or "Prime Rate" shall mean the
variable per annum rate of interest so designated from time to
time by Fleet National Bank as its prime rate. The prime rate is
a reference rate and does not necessarily represent the lowest or
the best rate being charged to any customer. Changes in the rate
of interest resulting from changes in the prime rate shall take
place immediately without any notice or demand of any kind.
"Cost of Funds" shall mean the per annum rate of interest
which the Bank is required to pay, or is offering to pay, for
wholesale liabilities of like tenor, adjusted for reserve
requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as
determined by the Bank.
All computations of interest under this Note shall be made
on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed.
The Borrower may prepay a Line Loan bearing interest based
upon the Bank's Prime Rate of Interest without premium or yield
maintenance fee. The Borrower shall have the right to prepay a
Line Loan bearing interest based upon the Bank's Cost of Funds in
whole (but not in part) only upon the condition that the Borrower
concurrently pay to the Bank a yield maintenance fee in an amount
computed as follows:
The current rate for United States Treasury Securities
(bills on a discounted basis shall be converted to a bond
equivalent) with a maturity date closest to the maturity date
chosen pursuant to the Fixed Rate Election (defined below) as to
which the prepayment is made, shall be subtracted from the Cost
of Funds component of the fixed rate in effect at the time of
prepayment. If the result is zero or a negative number, there
shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the
amount of the principal balance being prepaid. The resulting
amount shall be divided by three hundred sixty (360) and
multiplied by the number of days remaining the term chosen
pursuant to the Fixed Rate Election as to which the prepayment is
made. Such amount shall be reduced to a present value calculated
using the referenced United States Treasury Securities rate and
the number of days remaining in the term chosen pursuant to the
Fixed Rate Election as to which the prepayment is made. The
resulting amount shall be the yield maintenance fee due to the
Bank upon such prepayment.
Each reference in this Note to "Fixed Rate Election" shall
mean the election by the Borrower for interest on a Line Loan to
be computed based upon the Bank's Cost of Funds. If by reason of
an Event of Default, the Bank elects to declare the Line Loan(s)
to be immediately due and payable, then any yield maintenance fee
with respect to each Loan involved shall become due and payable
in the same manner as though the Borrower had exercised such
right of prepayment.
Payments of both principal and interest are to be made when
due in immediately available funds at the offices of Bank set
forth above, or at such other place as the holder of this Note
shall designate to Borrower in writing, in lawful money of the
United States of America.
If this Note or any payment hereunder becomes due on a day
which is not a Business Day (as defined below), the due date of
this Note or payment shall be extended to the next succeeding
Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment. As
used herein, "Business Day" shall mean any day other than a
Saturday, Sunday or day which shall be in the State of New York a
legal holiday or day on which banking institutions are required
or authorized to close.
All agreements between Borrower and Bank are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided,
however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of
Borrower and Bank in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the
State of New York, from time to time in effect. If under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances
whatsoever Bank should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the
principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of
all agreements between Borrower and Bank.
Upon the occurrence of an Event of Default as defined in the
Loan Agreement, the then unpaid balance of this Note, together
with all accrued and unpaid interest, shall be and become due and
payable in accordance with the provisions of the Loan Agreement.
Further and not in lieu of any other remedy, (a) in the
event any payment due hereunder is not made within ten (10) days
of the date when due, Borrower shall pay to Bank a late charge
equal to one-half of one percent (1/2%) of the amount of such
payment, and (b) upon the occurrence of an Event of Default under
the Loan Agreement, the amount due under this Note shall
thereafter bear interest at a rate equal to the Prime Rate of
Interest plus one percent (1%), and Borrower agrees to pay
interest at such rate until all amounts due under this Note are
paid in full.
Borrower expressly waives any presentment, demand, protest
or, except for notices required to be given by the Bank under the
Loan Agreement, any notice in connection with this Note.
Borrower hereby grants to Bank, a lien, security interest
and right of setoff as security for all liabilities and
obligations to Bank, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property,
now or hereafter in the possession, custody, safekeeping or
control of Bank or any entity under the control of Fleet
Financial Group, or in transit to Borrower. At any time, without
demand or notice, Bank may set off the same or any part thereof
and apply the same to any liability or obligation of Borrower
even though unmatured and regardless of the adequacy of any other
collateral securing this Note. Any and all rights to require Bank
to exercise its rights or remedies with respect to any other
collateral which secures the Loans, prior to exercising its right
of setoff with respect to such deposits, credits or other
property of the Borrower are hereby knowingly, voluntarily and
irrevocably waived.
Borrower promises and agrees to pay the costs of collection
and any reasonable attorneys' fees incurred by the Bank upon the
occurrence of an Event of Default under the Loan Agreement.
This Note, together with the provisions of the Loan
Agreement and the other Loan Documents constitutes the complete
understanding between the parties and taken together, supersede
all prior or contemporaneous understandings, agreements and
negotiations, all of which are merged into this Note, the Loan
Agreement and such other Loan Documents.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York, exclusive of
New York's conflicts of laws rules and public policies.
The undersigned unconditionally consents to the jurisdiction
of the courts of the State of New York or of federal courts
located within the State of New York and agree that any action to
construe, enforce or effect collection of amounts due under, this
Note, may be commenced in a state or federal court located within
the State of New York.
The Bank may at any time pledge all or any portion of its
rights under this Note or under any other Loan Document, to any
of the twelve (12) federal reserve banks organized under Section
4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or enforcement thereof shall release the Bank from its
obligations under the Loan Documents.
The Bank shall have the unrestricted right at any time and
from time to time and without the consent of or notice to the
Borrower to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Loan evidenced by this Note. In the event of any such grant
by the Bank of a participating interest to a Participant, whether
or not upon notice to the Borrower, the Bank shall remain
responsible for the performance of its obligations hereunder and
the Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the
Borrower or its Subsidiaries in its possession from time to time
to prospective participants, provided that each assignee or
participant (or prospective assignee or participant) agrees to
maintain the confidentiality of non-public confidential
information received from the Bank except for disclosures to
officers, employees, auditors and counsel and disclosures
required by law or pursuant to judicial process.
Upon receipt of an affidavit of an officer of the Bank as to
the loss, theft, destruction or mutilation of this Note or any
other Loan Document which is not of public record, and, in the
face of any such loss, theft, destruction or mutilation, upon
cancellation of this Note or such other Loan Document, Borrower
will issue, in lieu thereof, a replacement note or other loan
document in the same principal amount thereof and otherwise of
like tenor.
Borrower and Bank hereby knowingly, voluntarily and
intentionally waive the right to a trial by jury in respect of
any claim based hereon, arising out of, under or in connection
with this Note or any other Loan Document contemplated to be
executed in connection herewith or any course of conduct, course
of dealings, statements (whether verbal or written) or actions by
any party. This waiver constitutes a material inducement for the
Bank to accept this Note and to make the Loans evidenced hereby.
ONEIDA LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Senior Vice
President, Finance
SCHEDULE C
TERM NOTE
$15,000,000
Dated as of July 28, 1999
At Syracuse, New York
FOR VALUE RECEIVED, the undersigned, ONEIDA LTD., a New York
business corporation with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower") unconditionally promises
to pay to the order of FLEET NATIONAL BANK, a national banking
association with an address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Bank"), the principal sum of
Fifteen Million Dollars ($15,000,000) together with interest at
a rate equal to the "Applicable Rate" (defined below) as
follows:
Commencing on the 1st day of September, 1999
and continuing on the first day of each of
the then next succeeding ninety-four (94)
calendar months the Borrower will pay to the
order of the Bank on each such date a
principal payment in the amount of $125,000
plus interest on the unpaid principal balance
of this ("Note") at the Applicable Rate and,
on the first day of August, 2007, the
Borrower shall pay to the order of the Bank a
principal payment in the amount of $3,125,000
plus accrued and unpaid interest at the
Applicable Rate.
This Note is one of the Notes referred to in the Loan
Agreement dated as of July 28, 1999 between the Bank and the
Borrower (the "Loan Agreement"). The Bank is entitled to all of
the privileges and benefits of the Loan Agreement, the terms and
conditions of which are incorporated herein and made a part
hereof. Terms denoted with a capitalized first letter and not
otherwise defined in this Note, shall have the meanings ascribed
to such terms in the Loan Agreement.
"Applicable Rate" shall be the rate of interest payable on
the Term Loan and shall mean and refer to the "Level IV Rate", or
the "Level III Rate", or the "Level II Rate", or the "Level I
Rate", calculated and determined by the Bank at Closing and
thereafter effective as of each November 1, February 1, May 1
and August 1, based upon the Borrower's quarterly and annual
financial statements for the immediately preceding four (4)
fiscal quarters commencing on November 1, 1999, as follows:
Level IV Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is greater than 3.5
to 1, the Applicable Rate shall be LIBOR plus
one hundred seventy (170) basis points.
Level III Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 3.5 to 1 but more than 2.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred fifty (150) basis points.
Level II Rate - So long as no Event of
Default has occurred and the Borrower is then
in compliance with the financial covenants
set forth in Section 4 below, if the
Borrower's Leverage Ratio is equal to or less
than 2.5 to 1 but more than 1.5 to 1, the
Applicable Rate shall be LIBOR plus one
hundred thirty (130) basis points.
Level I Rate - So long as no Event of Default
has occurred and the Borrower is then in
compliance with the financial covenants set
forth in Section 4 below, if the Borrower's
Leverage Ratio is 1.5 to 1 or less, the
Applicable Rate shall be LIBOR plus one
hundred ten (110) basis points.
Notwithstanding anything to the contrary contained in this
Note, the Applicable Rate for the period commencing on the date
of this Note and ending on October 31, 1999 shall be the Level II
Rate of LIBOR plus one hundred thirty (130) basis points.
"Leverage Ratio" shall mean the Borrower's and Subsidiaries'
Total Funded Debt (as defined in the Loan Agreement) divided by
consolidated EBITDA.
"LIBOR" means the rate per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in U.S. dollars, from
one (1) month to six (6) months (the "Interest Period") as
specified by the Borrower in the rate election form attached
hereto as Schedule "A" (the "Repricing Notice") which appears on
the Telerate page 3750 as of 11:00 a.m. London time on the day
that is two (2) London Banking Days preceding the first day of
such LIBOR advance; provided that if the Bank does not receive
Borrower's Repricing Notice at least two (2) London Banking days
preceding the first day of such LIBOR advance, the Loan shall
bear interest at the Prime Rate of Interest; and provided
further, however, if the rate described above does not appear on
the Telerate System on any applicable interest determination
date, the LIBOR rate shall be the rate (rounded upwards as
described above, if necessary) for deposits in dollars for a
period substantially equal to the Interest Period on the Reuters
Page "LIBO" (or such other page as may replace the LIBO Page on
that service for the purpose of displaying such rates), as of
11:00 a.m. (London Time), on the day that is two (2) London
Banking Days prior to the beginning of such Interest Period.
"Banking Day" shall mean, in respect of any city, any date on
which commercial banks are open for business in that city.
If both the Telerate and Reuters system are
unavailable, then the rate for that date will be determined on
the basis of the offered rates for deposits in U.S. dollars for
the period of time comparable to such advances which are offered
by four major banks in the London interbank market at
approximately 11:00 a.m. London time, on the date that is two (2)
London Banking Days preceding the first day of such LIBOR advance
as selected by the Bank. The principal London office of each of
the four major London banks will be requested to provide a
quotation of its U.S. dollar deposit offered rate. If at least
two such quotations are provided, the rate for that date will be
the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will
be determined on the basis of the rates quoted for loans in U.S.
dollars to leading European banks for period of time comparable
to such advances offered by major banks in New York City at
approximately 11:00 a.m. New York City time, on the date that is
two London Banking Days preceding the first day of such LIBOR
advance. In the event that Bank is unable to obtain any such
quotation as provided above, it will be deemed that LIBOR
pursuant to a LIBOR advance cannot be determined, and the LIBOR
Rate shall not be available to Borrower. In such event, the
Borrower's obligation to pay to the order of the Bank the amounts
then due under this Note shall bear interest at the Bank's Prime
Rate of Interest.
In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to
LIBOR deposits of Bank then for any period during which such
Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the
Reserve Percentage. "Reserve Percentage" shall mean the maximum
aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed on member banks of
the Federal Reserve System against "Euro-Currency Liabilities" as
defined in Regulation D.
In the Repricing Notice, the Borrower may request up to
three (3) different Interest Periods with respect to up to three
(3) portions of the Loan (each, a "Tranche"). In its discretion,
the Bank may agree to the Borrower's request for separate
Tranches in which event (i) as of the date of the creation of the
separate Tranche, no Tranche may be less than Two Million Dollars
($2,000,000), (ii) at least one Tranche shall bear interest at
the Applicable Rate based upon one month LIBOR (the "One Month
Tranche"), and (iii) all scheduled payments of principal received
by the Bank will be applied by the Bank to reduce the principal
balance of the One Month Tranche.
"Prime Rate of Interest" or "Prime Rate" means the
variable per annum rate of interest so designated from time to
time by the Bank as its prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest or
best rate being charged to any customer. Changes in the rate of
interest resulting from changes in the Prime Rate shall take
place immediately without notice or demand of any kind.
All computations of interest under this Note shall be made
on the basis of a three hundred sixty (360) day year and the
actual number of days elapsed.
At any time that interest payable under this Note is
determined by reference to LIBOR, Borrower may prepay this Note
only upon at least three (3) Business Days prior written notice
to Bank (which notice shall be irrevocable), and any such
prepayment shall occur only on the last day of an Interest
Period. Borrower shall pay to Bank, upon request of Bank, such
amount or amounts as shall be sufficient (in the reasonable
opinion of Bank) to compensate it for any loss, cost, or expense
incurred as a result of: (i) any payment of this Note on a date
other than the last day of the Interest Period; or (ii) any
failure by Borrower to pay this Note on the date for payment
specified in Borrower's written notice. Without limiting the
foregoing, Borrower shall pay to Bank a yield maintenance fee in
an amount computed as follows: The current rate for United States
Treasury securities (bills on a discounted basis shall be
converted to a bond equivalent) with a maturity date closest to
the term chosen pursuant to the Fixed Rate Election as to which
the prepayment is made, shall be subtracted from the LIBOR in
effect at the time of prepayment. If the result is zero or a
negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall
be multiplied by the amount of the principal balance being
prepaid. The resulting amount shall be divided by three hundred
sixty (360) and multiplied by the number of days remaining in the
term chosen pursuant to the Fixed Rate Election as to which the
prepayment is made. Said amount shall be reduced to present
value calculated by using the above referenced United States
Treasury securities rate and the number of days remaining in the
term chosen pursuant to the Fixed Rate Election as to which
prepayment is made. The resulting amount shall be the yield
maintenance fee due to Bank upon the payment of the Loan. Each
reference in this paragraph to "Fixed Rate Election" shall mean
the Borrower's election for the one (1) month, two (2) month,
three (3) month, four (4) month, five (5) month or six (6) month
LIBOR. If by reason of an Event of Default, Bank elects to
declare the Note to be immediately due and payable, then any
yield maintenance fee with respect to this Note shall become due
and payable in the same manner as though the Borrower had
exercised such right of prepayment.
At any time that interest under this Note is determined by
reference to the Prime Rate, Borrower may prepay this Note, in
whole or in part, at any time, without penalty.
Payments of both principal and interest are to be made when
due in immediately available funds at the offices of Bank set
forth above, or at such other place as the holder of this Note
shall designate to Borrower in writing, in lawful money of the
United States of America.
If this Note or any payment hereunder becomes due on a day
which is not a Business Day (as defined below), the due date of
this Note or payment shall be extended to the next succeeding
Business Day, and such extension of time shall be included in
computing interest and fees in connection with such payment. As
used herein, "Business Day" shall mean any day other than a
Saturday, Sunday or day which shall be in the State of New York a
legal holiday or day on which banking institutions are required
or authorized to close.
All agreements between Borrower and Bank are hereby
expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount paid or agreed to
be paid to Bank for the use or the forbearance of the
indebtedness evidenced hereby exceed the maximum permissible
under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof provided,
however, that in the event there is a change in the law which
results in a higher permissible rate of interest, then this Note
shall be governed by such new law as of its effective date. In
this regard, it is expressly agreed that it is the intent of
Borrower and Bank in the execution, delivery and acceptance of
this Note to contract in strict compliance with the laws of the
State of New York, from time to time in effect. If under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any of the Loan Documents at the time of performance of
such provision shall be due, shall involve transcending the limit
of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the
limits of such validity, and if under or from circumstances
whatsoever Bank should ever receive as interest an amount which
would exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the
principal balance evidenced hereby and not to the payment of
interest. This provision shall control every other provision of
all agreements between Borrower and Bank.
Upon the occurrence of an Event of Default as defined in the
Loan Agreement, the then unpaid balance of this Note, together
with all accrued and unpaid interest, shall be and become due and
payable in accordance with the provisions of the Loan Agreement.
Further and not in lieu of any other remedy, (a) in the
event any payment due hereunder is not made within ten (10) days
of the date when due, Borrower shall pay to Bank a late charge
equal to one-half of one percent (1/2%) of the amount of such
payment, and (b) upon the occurrence of an Event of Default under
the Loan Agreement, the amount due under this Note shall
thereafter bear interest at a rate equal to the Prime Rate of
Interest plus one percent (1%), and Borrower agrees to pay
interest at such rate until all amounts due under this Note are
paid in full.
Borrower expressly waives any presentment, demand, protest
or, except for notices required to be given by the Bank under the
Loan Agreement, any notice in connection with this Note.
Borrower grants to Bank, a lien, security interest and right
of setoff as security for all liabilities and obligations to
Bank, whether now existing or hereafter arising, upon and against
all deposits, credits, collateral and property, now or hereafter
in the possession, custody, safekeeping or control of Bank or any
entity under the control of Fleet Financial Group, or in transit
to any of them. At any time, without demand or notice, Bank may
set off the same or any part thereof and apply the same to any
liability or obligation of Borrower even though unmatured and
regardless of the adequacy of any other collateral securing the
Loan. Any and all rights to require Bank to exercise its rights
or remedies with respect to any other collateral which secures
the Loan, prior to exercising its right of setoff with respect to
such deposits, credits or other property of the Borrower, are
hereby knowingly, voluntarily and irrevocably waived.
Borrower promises and agrees to pay the costs of collection
and any reasonable attorneys' fees incurred by the Bank upon the
occurrence of an Event of Default under the Loan Agreement.
This Note, together with the provisions of the Loan
Agreement and the other Loan Documents constitutes the complete
understanding between the parties and taken together, supersede
all prior or contemporaneous understandings, agreements and
negotiations, all of which are merged into this Note, the Loan
Agreement and such other Loan Documents.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of New York, exclusive of
New York's conflicts of laws rules and public policies.
The Borrower unconditionally consents to the jurisdiction of
the courts of the State of New York or of federal courts located
within the State of New York and agree that any action to
construe, enforce or effect collection of amounts due under, this
Note, may be commenced in a state or federal court located within
the State of New York.
The Bank may at any time pledge all or any portion of its
rights under this Note or under any other Loan Document, to any
of the twelve (12) federal reserve banks organized under Section
4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such
pledge or enforcement thereof shall release the Bank from its
obligations under the Loan Documents.
The Bank shall have the unrestricted right at any time and
from time to time and without the consent of or notice to the
Borrower to grant to one or more banks or other financial
institutions (each, a "Participant") participating interests in
the Loan evidenced by this Note. In the event of any such grant
by the Bank of a participating interest to a Participant, whether
or not upon notice to the Borrower, the Bank shall remain
responsible for the performance of its obligations hereunder and
the Borrower shall continue to deal solely and directly with the
Bank in connection with the Bank's rights and obligations
hereunder. The Bank may furnish any information concerning the
Borrower or its Subsidiaries in its possession from time to time
to prospective participants, provided that each assignee or
participant (or prospective assignee or participant) agrees to
maintain the confidentiality of non-public confidential
information received from the Bank except for disclosures to
officers, employees, auditors and counsel and disclosures
required by law or pursuant to judicial process.
Upon receipt of an affidavit of an officer of the Bank as to
the loss, theft, destruction or mutilation of this Note or any
other Loan Document which is not of public record, and, in the
face of any such loss, theft, destruction or mutilation, upon
cancellation of this Note or such other Loan Document, Borrower
will issue, in lieu thereof, a replacement note or other Loan
Document in the same principal amount thereof and otherwise of
like tenor.
Borrower and Bank hereby knowingly, voluntarily and
intentionally waive the right to a trial by jury in respect of
any claim based hereon, arising out of, under or in connection
with this Note or any other Loan Document contemplated to be
executed in connection herewith or any course of conduct, course
of dealings, statements (whether verbal or written) or actions by
any party. This waiver constitutes a material inducement for the
Bank to accept this Note and to make the Loan evidenced hereby.
ONEIDA LTD.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, Senior Vice
President, Finance
SCHEDULE A
REPRICING NOTICE
TO: Fleet National Bank
(Commercial Loan Department)
Reference herein to the Term Note shall mean the Oneida Ltd.
("Borrower") Term Note dated July 28, 1999 in the original
principal amount of Fifteen Million Dollars ($15,000,000)
executed and delivered to the Bank.
Borrower wishes to continue its borrowing under the Term
Note:
For ____ month(s) [insert one month, two
months, three months, four months, five
months or six months] at the rate quoted to
the Borrower of ________% per annum for the
terms of the Term Note
Kindly confirm by fax to Borrower's fax number (315)
__________.
DATED: ____________ ONEIDA LTD.
By:______________________________
Authorized Person
SCHEDULE D
A COMPLETE LISTING OF PRESENTLY
EFFECTIVE FINANCING STATEMENTS
FILE NUMBER SECURED PARTY FILE DATE
162265 Chase Lincoln 7/30/91 with a
Lease/Way, Inc. continuation filed
on 5/20/96
Filing No. 100716
176312 NYS Urban 8/21/92 with a
Development continuation filed
Corporation on 8/8/97
Filing No. 165998
259019 IBM Credit 12/29/95
Corporation
▇▇▇▇▇▇ ▇▇▇ Credit 12/15/97
Corporation
011969 ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 1/20/98
Equipment Co., Inc.
▇▇▇▇▇▇ ▇▇▇ Credit 4/14/98
Corporation
134758 ▇▇▇▇▇ Leasing 7/6/99
Company
