EXHIBIT 4(a)
CHEMICAL BANK
TO
CAMDEN WIRE CO., INC.
LETTER OF CREDIT RENEWAL
AUGUST 1, 1995
LACY, KATZEN, RYEN & MITTLEMAN, LLP
Counsel for Chemical Bank
The Granite Building
130 East Main Street
Rochester, NY 14604
CHEMICAL BANK
TO
CAMDEN WIRE CO., INC.
LETTER OF CREDIT RENEWAL
AUGUST 1, 1995
INDEX
Modified and Restated Letter of Credit, Bond Purchase and
Guaranty Agreement...................................................1
Restated and Modified Promissory Note ...............................2
Modification of Basic Documents.....................................3
Renewal of Letter of Credit..........................................4
Certificate of Incumbency of Officers of Issuer, City of
Pine Bluff, Arkansas.................................................5
Incumbency Certificate for Camden Wire Co., Inc......................6
Compliance Certificate for Camden Wire Co., Inc......................7
Corporate Documents for Camden Wire Co., Inc.........................8
a. Exhibit A: Certified Resolutions
b. Exhibit B: Certificate as to Corporate Documents and By-Laws
c. Exhibit C: Certificate of Good Standing
Incumbency and Signature Certificate for Oneida Ltd..................9
Compliance Certificate for Oneida Ltd................................10
Corporate Documents for Oneida Ltd...................................11
a. Exhibit A: Certified Resolutions
b. Exhibit B: Certificate as to Corporate Documents and By-Laws
c. Exhibit C: Certificate of Good Standing
Opinion of Counsel for Oneida Ltd....................................12
MODIFIED AND RESTATED
LETTER OF CREDIT, BOND PURCHASE AND GUARANTY AGREEMENT
As of August 1, 1995
Camden Wire Co., Inc.
12 Masonic Avenue
Camden, New York 13316
Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13421
RE: $9,000,000 City of Pine Bluff, Arkansas Variable Rate Demand
Industrial Development Refunding and Construction Revenue Bonds (Camden
Wire Project), Series 1985.
Dear Sirs:
WHEREAS, the parties entered into a Letter of Credit, Bond Purchase and
Guaranty Agreement dated as of August 1, 1985, as modified and restated as of
August 1, 1990 (the "Agreement"); and
WHEREAS, the Company (such term, and each other capitalized term used
herein having the meaning set forth in this Modification) requested that the
Issuer issue Bonds to provide funds for the refunding of the 1983 Bonds on
August 1, 1985 and to finance the project; and
WHEREAS, in order to enhance the marketability of the Bonds, the Company
(a) requested the Bank and the Bank committed, pursuant to the Agreement, to
purchase for its own account, upon the request of the Trustee under certain
terms and conditions, Bonds which the Issuer is required under the Indenture to
purchase because the owners (other than the Bank if it has purchased such Bonds
pursuant to the Agreement) have submitted irrevocable notices of tender of such
Bonds to the Tender Agent, and (b) applied to the Bank for the issuance by the
Bank of a standby letter of credit which was issued by the Bank and dated
August 1, 1985 in an original Stated Amount of $9,560,958.90 of which the sum
of $9,000,000 was in respect of the principal or purchase price of the Bonds,
and $560,958.90 was in respect of up to 182 days' interest on the Bonds on or
prior to the stated maturity thereof in order to secure a source of funds to be
devoted exclusively to the payment by the Trustee, when and as due, of the
principal or purchase price of and interest on the Bonds; and
WHEREAS, the Bank has annually extended the term of the Letter of Credit in
accordance with the Agreement; and
WHEREAS, the Company and Guarantor have requested that the Bank further
renew and extend the Letter of Credit and that the terms of the Agreement be
modified as set forth herein; and
WHEREAS, the parties have mutually agreed and consented to the
modification and restatement of the Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the Company, the Guarantor and the Bank hereby agree as
follows:
ARTICLE ONE
Definitions
Section 1.1 Definitions. As used in this Modification:
"Accrued Benefit" has the meaning ascribed to such term in Section 5.8(a)(i)
hereof.
"Accumulated Funding Deficiency" has the meaning ascribed to such term in
Section 5.8(a)(ii) hereof.
"Adjusted Tangible Assets" means 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 receivables due from obligors
domiciled, outside the United States of America, unless such assets are owned
by or such notes and receivables are due from Restricted Subsidiaries.
"A Drawing" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit "A" thereto.
"Affiliate" means a Person (other than a Restricted Subsidiary) which directly
Controls, or is Controlled by, or is under common Control with, the Guarantor.
"Agent" means Chemical Bank, as Remarketing Agent under the Indenture.
"B Drawing" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit "B" thereto.
"Bank" means Chemical Bank, a New York State banking corporation, its
successors and assigns.
"Bank Rate" shall have the meaning given to such term in the Bonds.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as superseded or
amended.
"Basic Documents" means collectively, the Indenture, the Installment Sale
Agreement, the Tender Agency Agreement, the Remarketing Agreement, the Guaranty
Agreement, the Security Agreement, and the Agreement as modified and restated
in this Modification.
"Bonds" means the Issuer's $9,000,000 Industrial Development Agency Industrial
Development Refunding and Construction Revenue Bonds (Camden Wire Project),
Series 1985.
"Business Day" has the meaning given in the Letter of Credit.
"C Drawing" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit "C" thereto.
"Code" means the Internal Revenue Code of 1986, as superseded or amended, and
the regulations, rulings and proclamations promulgated and proposed thereunder.
"Commitment" means, collectively, (i) the Bank's obligation under the Letter of
Credit and (ii) the Bank's obligation to purchase Bonds under Section 2.1(b)
hereof.
"Company" means Camden Wire Co., Inc., a New York corporation.
"Consolidated Adjusted Net Income" means, for any period, the gross revenues of
the Guarantor and its Restricted 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:
(a) (i) any gains or losses on the sale or other disposition of
investments and
(ii) any gins or losses on the sale or other disposition of
plant, property and equipment which gains or losses exceed, in the aggregate,
$100,000 during any fiscal year
and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary accrued prior
to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Guarantor or any Restricted Subsidiary,
realized by such corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Guarantor or a Restricted Subsidiary
shall have consolidated or which shall have merged into or with the
Guarantor or a Restricted Subsidiary prior to the date of such consolidation
or merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Guarantor or any Restricted
Subsidiary has an ownership interest unless such net earnings shall have
actually been received by the Guarantor or such Restricted Subsidiary in the
form of cash distributions or readily marketable securities;
(g) any portion of the net earnings of any Restricted Subsidiary
which for any reason is unavailable for payment of dividends to the Guarantor
or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any securities of
the Guarantor or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from income
arising during such fiscal period or during the period consisting of
the four consecutive fiscal quarters immediately following the end of
such fiscal period; and
(l) any other extraordinary gain.
"Consolidated Adjustable Tangible Assets" at any date means the Adjusted
Tangible Assets of the Guarantor and its Restricted Subsidiaries at such date
determined on a consolidated basis.
"Consolidated Adjusted Tangible Net Worth" at any date means:
(i) the net book value (after deducting related
depreciation, obsolescence, amortization, valuation and other proper reserves)
at which the Adjusted Tangible Assets of the Guarantor and all Restricted
Subsidiaries would be shown on a consolidated balance sheet at such date, but
excluding any amount on account of write-ups of assets after January 28, 1995;
(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 Restricted Subsidiaries.
"Consolidated Current Assets" at any date means the amount at which the current
assets of the Guarantor and all Restricted Subsidiaries would be shown on a
consolidated balance sheet at such date.
"Consolidated Current Liabilities" at any date means the amount at which the
current liabilities of the Guarantor and all Restricted 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.
"Consolidated Income Available for Interest Charges" with respect to the
Guarantor and all Restricted Subsidiaries, means for any period the sum
(without duplication) of (i) Consolidated Adjusted Net Income, (ii) to the
extent deducted in determining Consolidated Adjusted Net Income, all provisions
for federal, state or other income taxes made by the Guarantor and its
Restricted Subsidiaries during such period, and (iii) Consolidated Interest
Charges for such period.
"Consolidated Interest Charges" with respect to the Guarantor and all
Restricted Subsidiaries means for any period the sum of (i) interest expense
with respect to their liabilities for Long Term Debt (including the current
portion thereof) and Current Debt and (ii) to the extent not already included
in (i), imputed interest expenses on capitalized lease obligations.
"Consolidated Working Capital" means the Consolidated Current Assets less
Consolidated Current Liabilities.
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Credit Agreement" means the Credit Agreement dated as of January 21, 1994
between the Guarantor, Chase Manhattan Bank, N.A. as agent and certain banks
signatory thereto.
"Current Debt" with respect to any Person, means all liabilities for borrowed
money, all obligations under capitalized leases, and all liabilities secured by
any Lien, other than any
Lien permitted by Section 6.2(a)(i)-(iv), existing on Property owned by that
Person (whether or not those liabilities have been assumed) which, in either
case, are payable on demand or within one (1) year from their creation, plus
the aggregate amount of Guaranties by that Person 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 (1) year from the date of creation thereof;
and
(ii) any liabilities which, although payable within one (1)
year, constitute principal payments on indebtedness expressed to mature more
than one (1) year from the date of its creation.
"Date of Issuance" means the date on which the Letter of Credit shall be
issued.
"Default" means any event or condition which constitutes an Event of Default or
which with the giving of notice or lapse of time or both, would become an Event
of Default.
"Employee Pension Benefit Plan" has the meaning ascribed to such term in
Section 5.8(a)(iii) hereof.
"Employer Liability" has the meaning ascribed to such term in Section
5.8(a)(iv) hereof.
"Environmental Law" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" has the meaning ascribed to such term in Section 5.8(a)(v) hereof.
"Event of Default" has the meaning ascribed to such term in Section 7.1 hereof.
"Expiration Date" means August 1, 1996, unless earlier terminated or extended
pursuant to the terms of this Modification and the Letter of Credit.
"Fiscal Year" means each twelve (12) month period ending on each last Saturday
in January.
"GAAP" means generally accepted accounting principles in the United States of
America as promulgated by the American Institute of Certified Public
Accountants and as in effect from time to time, consistently applied.
"Guaranty" with respect to any Person, means all guaranties of, and all other
obligations which in effect guaranty, any indebtedness, dividend or other
obligation of any Person (the "primary obligor") in any manner (except any
indebtedness or other obligation of any Restricted Subsidiary), 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;
(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.
The amount of any Guaranty shall be deemed to be the maximum amount for
which such Person may be liable, upon the occurrence of any contingency or
otherwise, under or by virtue of the Guaranty.
"Guaranty Agreement" means the Guaranty Agreement from the Guarantor to the
Trustee and the Bank dated as of August 1, 1985.
"Guarantor" means Oneida, Ltd., a New York corporation.
"Holder" or "Bondholder" means a holder of any of the Bonds.
"Indebtedness" as applied to any Person refers to (a) all items (except items
of capital stock or of surplus or of general contingency reserves) which in
accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as at the date as
of which Indebtedness is to be determined, including all capitalized lease
obligations; (b) all indebtedness secured by any mortgage, pledge, lien or
conditional sale or other title retention agreement existing on any property or
asset owned or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed; and (c) all indebtedness
of others which such Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
discounted or agreed (contingent or otherwise) to purchase or repurchase or
otherwise acquire, or with respect to which such Person has agreed to supply or
advance
funds (whether by way of loan, stock purchase, capital contribution or
otherwise) or has otherwise become liable directly or indirectly.
"Indenture" means the Indenture of Trust dated as of August 1, 1985, from the
Issuer to the Trustee, including any indentures supplemental thereto as therein
permitted.
"Installment Sale Agreement" means the Installment Sale Agreement dated as of
August 1, 1985 between the Issuer and the Company.
"Interest Period" has the meaning given in the Indenture.
"Interest Stated Amount" means, as of any date of calculation, the amount which
may be drawn under the Letter of Credit in respect of interest on the Bonds.
"Issuer" means the City of Pine Bluff, Arkansas.
"Letter of Credit" means the irrevocable standby letter of credit issued by the
Bank for the account of the Company in favor of the Trustee pursuant to the
Agreement, a copy of which is contained in Appendix 2 hereto, as such Letter of
Credit has been extended from time to time and may be further extended in
accordance with this Modification
"Letter of Credit Department of the Bank" means the department of the Bank
where the Exhibits to the Letter of Credit may be presented for payment on the
Letter of Credit. Currently such department is located at Chemical Bank, Letter
of Credit Department, 55 Water Street, New York 10041, Attention: Victor
Marinaccio, Vice President.
"Letter of Credit Fee" has the meaning given in Section 2.3 hereof.
"Lien" means 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 Modification, the
Guarantor or a Restricted 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.
"Loan" has the meaning given to such term in Section 2.7(a) hereof.
"Long Term Debt" with respect to any Person, means 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 6.2(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 by that Person of all such
liabilities of other Persons.
"Material Adverse Effect" with respect to Sections 5.8 and 7.1(a)(xiii) hereof,
has the meaning ascribed to such term in such Section 7.1(a)(xiii).
"Modification" means the Agreement (as such term is defined in the first
paragraph hereof) as restated and modified herein.
"Modification Documents" means this Modification and all other documents and
instruments executed in connection with this Modification of the Agreement and
renewal of the Letter of Credit.
"1983 Bonds" means the Issuer's Variable Rate Demand Industrial Development
Revenue Bonds (Camden Wire Co., Inc. Project), Series 1983.
"Offering Memorandum" means the Private Placement Memorandum dated August 1,
1985, prepared in connection with the offering and sale of the Bonds
"Officer's Certificate" means a certificate executed on behalf of the
Guarantor, as the case may be, by the President or one of its Vice Presidents
and its Treasurer or one of its Assistant Treasurers.
"Option" has the meaning ascribed to such term in Section 2.8 hereof.
"Outstanding" has the meaning ascribed to such term in the Indenture.
"Participants" has the meaning ascribed to such term in Section 8.6 hereof.
"PBGC" has the meaning ascribed to such term in Section 5.8(a)(vi) hereof.
"Pension Plan(s)" means all "employee pension benefit plans" as such term is
defined in Section 3 of ERISA, maintained by the Guarantor and its Subsidiaries
from time to time.
"Permitted Encumbrances" has the meaning ascribed to such term in the
Indenture.
"Person" means a corporation, an association, a partnership, an organization, a
business, a joint venture, an individual or a government or political
subdivision thereof or any governmental agency.
"Plan" has the meaning ascribed to such term in Section 5.8(a)(vii) hereof.
"Prime Rate" means such rate of interest as is publicly announced by the Bank
at its principal office from time to time as its prime rate (any change in the
Prime Rate to be effective at the time and date of the announcement of such
change).
"Principal Stated Amount" means, as of any date of calculation, the amount
which may be drawn under the Letter of Credit in respect of the Principal of
the Bonds.
"Project" has the meaning given to such term in the Installment Sale Agreement.
"Promissory Note" has the meaning given to such term in Section 2.7(a) hereof.
"Property" means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"Purchased Bonds" means any Bonds purchased by the Bank pursuant to Section
2.1(b) hereof or by virtue of a "C Drawing" prior to the occurrence of an Event
of Default and the giving of the notice to the Trustee referred to in Section
7.l (b)(i).
"Related Documents" has the meaning given to such term in section 8.4 hereof.
"Remarketing Agreement" means the Placement and Remarketing Agreement dated as
of August 1, 1985 between the Company and the Agent.
"Reportable Event" has the meaning ascribed to such term in Section
5.8(a)(viii) hereof.
"Restricted Dividends" means all dividends or other distributions in respect of
capital stock of the Guarantor or any Restricted Subsidiary (except
distributions in such stock or of warrants, rights or other options to purchase
such stock), valued at the fair market value of the Property being dividended,
distributed or otherwise transferred as a Restricted Dividend.
"Restricted Investments" means 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 Restricted Subsidiaries or any
corporation which concurrently with such investment becomes a Restricted
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 (1) year from the date
acquired;
(v) demand deposits or certificates of deposit maturing within one (1)
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 $50,000,000;
(vi) commercial paper given the highest rating by a national credit
rating agency and maturing not more than two hundred seventy (270) days from the
date acquired; and
(vii) shares of capital stock of the Guarantor held in its treasury as
of the date of this Agreement.
"Restricted Payment" means the excess, if any, of redemptions or acquisitions
of capital stock of the Guarantor or of warrants, rights or other options to
purchase such stock, over the net proceeds of sales of such stock or of
warrants, rights or other options to purchase such stock valued at the fair
market value of the Property being distributed or otherwise transferred as a
Restricted Payment.
"Restricted Subsidiary" means a Subsidiary:
(i) organized under the laws of the United States, Puerto Rico,
Canada, Mexico or any member of the European Economic Community, or a
jurisdiction thereof;
(ii) which conducts substantially all of its business and
has substantially all of its Property within the United States, Puerto
Rico, Canada, Mexico or any member of the European Economic Community;
(iii) a majority of each class of capital stock of which is legally
and beneficially owned by the Guarantor and/or its Restricted Subsidiaries; and
(iv) either (a) as of the date hereof, is a Restricted Subsidiary
within the meaning of paragraphs (i), (ii) and (iii) above or (b) is designated
as a Restricted Subsidiary pursuant to Section 6.2(i)(ii) unless such Subsidiary
is subsequently designated as an Unrestricted Subsidiary pursuant to Section
6.2(i)(ii); provided that Buffalo China, Inc. and Camden Wire Co., Inc. shall
at all times remain a Restricted Subsidiary under this Agreement.
"Security" shall have the same meaning as in Section 2(1) of the Securities Act
of 1933, as amended.
"Security Agreement" means the Mortgage and Security Agreement dated August 1,
1985 by the Issuer and the Company to the Trustee and the Bank.
"State" means the State of New York.
"Stated Amount" means, as of the date of reference, the sum of the Principal
Stated Amount plus the Interest Stated Amount.
"Subsidiary" means a corporation in which the Guarantor 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).
"Tender Agency Agreement" means the Tender Agency Agreement dated as of August
1, 1985, among the Issuer, the Company and the Tender Agent.
"Tender Agent" means Chemical Bank, as tender agent for the Bonds under the
Indenture.
"Total Funded Debt" means the sum of (i) Long Term Debt (including the current
portion thereof) and (ii) Current Debt.
"Trustee" means Simmons First National Bank of Pine Bluff, a national banking
association, with its principal place of business located in Pine Bluff
Arkansas, its successors and assigns.
"Unreimbursed Amount" means any amount due and owing to the Bank by the Company
as a result of a draw under the Letter of Credit, including any amount the Bank
must repay or has repaid to the Company, the Guarantor or either of their
estates or the Trustee or any Bondholder resulting from an avoided transfer
under the Bankruptcy Code or other law, court order or otherwise.
"Unrestricted Subsidiary" refers to any Subsidiary which is not a Restricted
Subsidiary.
"Variable Rate" shall have the meaning given to such term in the Bonds.
"Voting Stock" refers to Securities, the holders of which are ordinarily, in
the absence of contingencies, entitled to elect the corporate directors (or
Persons performing similar functions.)
"Withdrawal Liability" has the meaning ascribed to such term in Section
5.8(a)(ix) hereof.
Section 1.2 Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting principles
consistently applied.
ARTICLE TWO
Letter of Credit; Bond Purchase Commitment; Option
Section 2.1 Issuance of Letter of Credit; Purchase of Bonds.
(a) The Bank issued on the date of the initial issuance of the Bonds,
upon the terms, subject to the terms and conditions and relying upon the
representations and warranties of the Company and the Guarantor contained in
the Agreement, the Letter of Credit in the form of Appendix 2 hereto. The
Letter of Credit was initially in the amount of $9,560,958.90 of which
$9,000,000.00 was in respect of the principal or purchase price of the Bonds
and $560,958.90 was in respect of up to 182 days' interest on the Bonds.
(b) Subject to the terms and conditions and relying upon the
representations and warranties of the Company and the Guarantor contained in
this Modification, the Bank agrees to purchase, at any time and from time to
time, on or prior to the Business Day immediately preceding the Expiration
Date, and for its own account, any or all of the Bonds tendered to the Tender
Agent in accordance with the terms and provisions set forth in the Bonds, at a
purchase price equal to the then unpaid principal amount of the Bonds to be
purchased plus accrued and unpaid interest thereon at the Variable Rate to the
date of purchase, provided that (i) the Trustee shall have given notice (which
notice may be made by telephone or telegraph, promptly confirmed in writing) to
the Bank by 4:30 p.m., New York City time, on the day preceding the purchase
date of the principal amount of an accrued interest on the Bonds to be so
purchased, and (ii) no Event of Default shall have occurred and then be
continuing. The Bank agrees to meet its obligations under this Section 2.1(b)
by making available to the Tender Agent, at the offices of the Tender Agent,
not later than 10:00 a.m., New York City time, on the purchase date, an amount
equal to 100% of the principal amount of Bonds purchased plus accrued interest
thereon at the Variable Rate to the date of purchase. If the Bank's obligation
to purchase Bonds under this Section 2.1(b) terminates for any reason, the Bank
shall thereafter give prompt written notice of such termination to the Trustee
and the Company (failure to given such notice shall not cause the Bank to have
any obligation to purchase Bonds hereunder if such obligation is terminated for
any other reason). On or after August 1, 2000, at the sole option of the Bank,
the Bank may tender any or all Purchased Bonds to the Company and the Company
shall purchase such Bonds from the Bank at a purchase price of par plus accrued
interest at the Bank Rate. The Bank shall provide the Company with five (5)
days written notice that it intends to exercise its option to sell Purchased
Bonds to the Company on the date specified in such notice.
(c) The Bank agrees to amend the Letter of Credit on the date hereof,
to extend the term thereof until the Expiration Date.
Section 2.2 Reimbursement. The Company hereby reaffirms and restates its
obligation to reimburse the Bank in full for any drawing made under the Letter
of Credit or any other Unreimbursed Amount on the date of such drawing or, to
the extent such drawing is not reimbursed to the Bank on the date, to pay to
the Bank the amount of such drawing, with interest, in accordance with Section
2.7 below; provided, for all purposes of this Modification, so long as Bonds
purchased by the Bank prior to the occurrence of an Event of Default and the
giving of the notice to the Trustee referred to in Section 7.1(b)(i) pursuant
to a C Drawing under the Letter of Credit are legally required to be registered
to the Bank or its nominee and the Bank is the Tender Agent, the Company shall
be deemed to have reimbursed the Bank in full for the amount drawn under the
Letter of Credit on the date of a C Drawing; provided, however, that if the
Bank is not the Tender Agent, the Company shall be deemed to have reimbursed
the Bank in full for the amount drawn under the Letter of Credit on the date of
a C Drawing when the Bonds acquired pursuant to such C Drawing are lawfully
registered in the name of the Bank and delivered to the Bank.
Section 2.3 Fees and Charges. The Company hereby reaffirms and
restates its obligation to pay to the Bank:
(a) (i) On September 30, 1985 and (ii) thereafter, quarterly,
in arrears, on the first Business Day of each October, January, April and
July, until the occurrence of the Expiration Date, a nonrefundable fee of
three-quarters of one percent (3/4 of 1%) per annum on the average daily amount
which, pursuant to the express terms of the Letter of Credit, was
available to be drawn thereunder on each date since the last date on which the
Letter of Credit Fees were due (such initial and quarterly fees being referred
to herein as the "Letter of Credit Fees").
(b) On the date of the following transactions (i) $200 for every
drawing under the Letter of Credit, (ii) $150 for every amendment to the Letter
of Credit and (iii) $2,000 for every transfer of the Letter of Credit by the
Trustee.
Section 2.4 Method of Payment; etc. All payments to be made by the
Company under this Modification shall be made not later than 12:00 noon (New
York City time) on the date when due and shall be made in lawful money of the
United States of America (in freely transferable U.S. Dollars) and in
immediately available funds. All payments made after 12:00 noon (New York City
time) shall be deemed to have been made on the next Business Day following the
date when such payment was due.
Section 2.5 Reduction and Termination.
(a) The Company shall have the right to cause the Trustee to reduce
permanently the Principal Stated Amount on the dates determined as provided
below by an amount up to the amount by which the Principal Stated Amount
exceeds the aggregate principal amount of Bonds Outstanding and unpaid by
filing a certificate in the form of Exhibit F to the Letter of Credit. The
Interest Stated Amount may be reduced permanently with the reduction of the
Principal Stated Amount, upon any such reduction, in an amount
equal to 182 days' interest (calculated at the rate of twelve and one-half of
one percent (12 1/2%) per annum, based on a year of 365/366 days) on the
amount of the reduction in the Principal Stated Amount. Such reductions shall
be effective as of the Business Day set forth in such certificate.
(b) Upon payment by the Bank of an A Drawing, the Principal Stated
Amount shall be reduced automatically and permanently by an amount equal to the
amount so drawn, and the Interest Stated Amount may be reduced
permanently with such reduction of the Principal Stated Amount which such A
Drawing in an amount equal to 182 days' interest (calculated at the rate of
twelve and one-half of one percent (12 1/2%) per annum, based on a year of
365/366 days) on the amount of such reduction in the Principal Stated Amount,
such reduction of the Principal Stated Amount and the Interest Stated Amount to
be effective on the date of such payment.
(c) Upon payment by the Bank of a B Drawing, the Interest Stated
Amount shall be reduced automatically, subject to reinstatement pursuant to
Section 2.6 hereof, by an amount equal to the amount so drawn, such
reduction of the Interest Stated Amount to be effective on the date of such
payment.
(d) Upon payment by the Bank of a C Drawing, the Principal Stated
Amount shall be reduced automatically, subject to reinstatement pursuant to
Section 2.6 hereof, by an amount equal to the amount so drawn, and the
Interest Stated Amount shall be reduced automatically, subject to reinstatement
pursuant to Section 2.6 hereof, with the reduction of the Principal Stated
Amount after payment by the Bank of a B Drawing accompanying a C Drawing with
such C Drawing, in an amount equal to the accrued interest paid in connection
with such C Drawing, such reductions of the Principal Stated Amount and the
Interest Stated Amount to be effective on the date of such payment.
(e) Upon each purchase of Bonds pursuant to Section 2.1(b), the
Principal Stated Amount may be reduced, subject to reinstatement pursuant to
Section 2.6 hereof, by an amount equal to the principal amount of Bonds so
purchased by the Bank and the Interest Stated Amount may be reduced, subject to
reinstatement pursuant to Section 2.6 hereof, with the reduction of the
Interest Stated Amount, in an amount equal to the number of days of accrued
interest paid by the Bank in connection with such purchase of Bonds (calculated
at the rate of twelve and one-half of one percent (12 1/2%) per annum, based on
a year of 365/366 days) on the amount of such reduction in the Principal Stated
Amount, such reductions of the Principal Stated Amount and the Interest Stated
Amount to be effective on the date set forth in a certificate filed with the
Letter of Credit Department of the Bank in the form of Exhibit F to the Letter
of Credit.
(f) Upon any reduction of the Principal Stated Amount under Section
2.5(a), (b) or (d) and upon the purchase of Bonds pursuant to Section 2.1(b),
the amount of the Commitment to purchase Bonds under Section 2.1(b) shall be
reduced automatically, subject to reinstatement pursuant to Section 2.6 hereof,
by an amount equal to principal of and accrued interest on Bonds in the same
principal amount as the amount by which the Principal
Stated Amount was reduced or the principal amount of Bonds so purchased, as
appropriated, but in no event shall such Commitment to purchase Bonds be reduced
pursuant to this paragraph (f) to an amount less than the principal of and up
to 182 days' accrued interest (calculated at twelve and one-half of one
percent (12 1/2%) per annum, based on a year of 365/366 days) on Bonds then
Outstanding, other than Purchased Bond
(g) If the Stated Amount shall be permanently reduced in part
pursuant to Section 2.5(a) or (b), the Bank shall then have the right to
require the Trustee to surrender the Letter of Credit to the Bank on the
effective date of such partial reduction of the Stated Amount and to accept on
such date, in substitution for such Letter of Credit, a substitute irrevocable
Letter of Credit, dated such date, in a stated amount equal to the amount to
which the Stated Amount shall have been so reduced but otherwise having terms
identical to the then outstanding Letter of Credit, except for such changes in
dollar amount corresponding to such permanent reduction.
(h) This Modification and the Letter of Credit shall terminate,
subject to the provisions of Sections 2.2 and 8.10 hereof, on the Expiration
Date. With the express consent of the Bank, the Expiration Date of this
Modification shall be extended by issuing an amendment to the Letter of Credit
extending the term thereof for one (l) year or a new letter of credit,
containing the same terms and conditions except for the Expiration Date and the
dated date of such new letter of credit, shall be issued for additional terms
of one year (but no Expiration Date shall exceed August 1, 2000), provided that
no Event of Default has occurred or the Letter of Credit has not otherwise been
terminated.
Section 2.6 Reinstatement and Transfer.
(a) Upon receipt by the Bank of reimbursement for any B Drawing
other than B Drawing to pay accrued interest on Bonds purchased with the
proceeds of a C Drawing in an amount equal to the full amount drawn under such
B Drawing, the Interest Stated Amount shall be automatically reinstated in the
amount of such payment received by the Bank. Notwithstanding the foregoing
sentence, the Interest Stated Amount shall be reinstated automatically
(notwithstanding any subsequent termination of the Letter of Credit) in the
full amount of the amount so drawn at the close of business on the tenth (10th)
Business Day following payment of the draft presented in connection with such B
Drawing, unless, prior to such time on the tenth (10th) Business Day the
Trustee shall have received written notice, or telephonic notice, promptly
confirmed in writing, from the Bank of the occurrence of an Event of Default
hereunder.
(b) The Principal Stated Amount and the Interest Stated Amount of
the Letter of Credit will be reinstated, to the extent of any reductions
in the Principal Stated Amount and/or the Interest Stated Amount of the Letter
of Credit made pursuant to paragraphs (d) and (e) of Section 2.5 hereof, and
any reductions in the Interest Stated Amount pursuant to paragraph (c) of
Section 2.5 hereof with respect to a B Drawing made to pay accrued interest
on Bonds purchased with the proceeds of a C Drawing, upon receipt by the Bank
of notice from the Trustee or the Agent, as agent of the Trustee for this
purpose, in the form of Exhibit
G to the Letter of Credit, unless, prior to receipt by the Bank of such notice,
and at a time when the Bonds remain registered to the Bank, the Trustee and the
Tender Agent shall have received from the Bank either written notice, or
telephonic notice, promptly confirmed in writing, of the occurrence of an Event
of Default under this Modification.
(c) The amount of the Commitment to purchase Bonds pursuant to Section
2.1(b) hereof, following a reduction pursuant to Section 2.5(f) hereof, shall
automatically be reinstated upon any reinstatement of the Stated Amount of the
Letter of Credit for any reason, and in all events shall never be less than the
principal amount of and 182 days' accrued interest (calculated at twelve and
one-half of one percent (12 1/2%) per annum, based on a year of 365/366 days)
on Bonds then Outstanding (other than Purchased Bonds).
(d) The Bank agrees that prior to the delivery to the Tender Agent
of any Bond sold by the Bank pursuant to Section 2.8 hereof it shall increase
the Stated Amount of the Letter of Credit to cover principal and 182 days'
interest on such Bond together with all outstanding Bonds other than Purchased
Bonds.
(e) The Letter of Credit may be transferred by the Trustee solely in
accordance with the provisions thereof.
Section 2.7 Loan.
(a) Any drawing under the Letter of Credit not reimbursed to the Bank
on the date of such drawing shall automatically be converted into a demand loan
(the "Loan"). The Loan shall be evidenced by a restated and modified
promissory note dated August 1, 1995 (the "Promissory Note"), duly executed
and delivered by the Company to the Bank, and payable to the order of the
Bank. The Promissory Note shall be payable and bear interest as therein
provided.
(b) The Bank is hereby authorized by the Company to endorse on
schedules attached to the Promissory Note an appropriate notation evidencing the
date and amount of each Loan, each payment and any other information
provided for on such schedule, provided, however, that the failure of the Bank
to set forth such Loans, principal payments or prepayments and other
information on such schedule shall not in any manner affect the obligation of
the Company to repay the Loans in accordance with the terms of this
Modification and the Promissory Note.
Section 2.8 Grant of Option. The Bank hereby grants to the Company a call
option to cause the Bank to sell and the Company to purchase Purchased Bonds
owned by the Bank (the "Option") upon receipt of written instructions from
the Company on the date two (2) days prior to the date upon which the
Company will exercise such Option. The exercise price for such Option shall be
a price equal to the principal amount of each Purchased Bond purchased plus
accrued interest thereon at the Bank Rate. The Option may be exercised from
time to time and more than once if and so long as there exist any Purchased
Bonds. The Option expires on the date on which the Bonds are no longer
Outstanding. The grant of this
Option to the Company is made by the Bank as a potential owner of the Bonds for
its own account and not as an agent or broker for the Company, the Guarantor
or for any other Person. This Option is not transferable by the Company to any
other Person. Pursuant to this Option, the Bank, as owner of Purchased
Bonds, shall not be required to sell Purchased Bonds to any Person other than
the Company nor shall the Bank, as owner of Purchased Bonds, assist or be
required to assist the Company in locating purchasers for the Purchased Bonds
subject to the Option.
ARTICLE THREE
Guaranty
Section 3.1 Guaranty of Payment. The Guarantor hereby reaffirms and
restates that the Guarantor absolutely and unconditionally guarantees to the
Bank for its benefit and that of its successors and assigns, the full and
prompt payment of all obligations of the Company under this Modification and
the Promissory Note, including, but not limited to, any payments due pursuant
to Sections 2.2, 2.3, 2.7, 2.8, 7.1(b), 8.1 and 8.3 hereunder.
Section 3.2 Right of Setoff; Other Collateral.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Bank is hereby authorized at any time and from time to time,
without notice to the Guarantor (any such notice being expressly waived by the
Guarantor) and to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and any other Indebtedness at the time owing to the Bank to or
for the credit or the account of the Guarantor against any and all of the
obligations of the Company or the Guarantor now or hereafter existing under
this Modification or the Promissory Note, irrespective of whether or not the
Bank shall have made any demand to the Company under this Modification and
although such obligations may be unmatured.
(b) Without modifying the payment provisions of Section 2.2 of this
Modification, the Promissory Note or any Purchased Bonds, the Bank hereby
agrees to waive its rights, at law or otherwise, at any time after the
commencement of and during the pendency of a case by or against the Company
seeking relief under the Bankruptcy Code, as now constituted or hereafter
amended, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at the time held and any other Indebtedness at
the time owing by the Bank to or for the account of against any and all
obligations of the Company under this Modification, the Promissory Note or any
Purchased Bonds to reimburse the Bank for amounts drawn and paid under the
Letter of Credit; provided, that such waiver shall terminate and be of no force
and effect as and when to the extent that the exercise of such rights would not
result in the Bank's being released, prevented or restrained from or delayed in
fulfilling its obligation under the Letter of Credit, and provided, further,
that such waiver shall terminate and be of no force and effect if the absence
of such waiver
would not result in the lowering or suspension by Moody's Investors Service
of its rating of the Bonds.
3.3 Absolute and Unconditional Guaranty of Payment; Survival of
Obligations. The obligations of the Guarantor hereunder shall be an absolute,
irrevocable, unconditional, present and continuing guaranty of payment and not
of collectibility and shall remain in full force and effect so long as any
amount payable hereunder or by the Company under this Modification or the
Promissory Note shall remain unpaid or any potential liability of the Company
under this Modification or the Promissory Note shall survive the maturity or
redemption of the Bonds and the expiration or termination of the Letter of
Credit. The Guarantor hereby consents that from time to time, before or after
any Event of Default or default by the Company under any Basic Document or any
notice of termination hereof, with or without further notice to or assent from
the Guarantor, any security at any time held by or available to the Bank for
any obligation of the Company, or any security at any time held by or available
to the Bank for any obligation of any other Person secondarily or otherwise
liable for any of the obligations of the Company under this Modification or
Promissory Note, may be exchanged, surrendered or released and any obligation
of the Company, or of any such other Person, may be changed, altered, renewed,
extended, continued, surrendered, compromised, waived or released, in whole or
in part, or any default with respect thereto waived, and the Bank may fail to
set off and may release, in whole or in part, any balance of any deposit
account or credit on its books in favor of the Company, or of any such other
Person, and may extend further credit in any manner whatsoever to the Company,
and generally deal with the Company or any such security or other Person as the
Bank may see fit; and the Guarantor shall remain bound under this guaranty
notwithstanding any such exchange, surrender, release, change, alteration,
renewal, extension, continuance, compromise, waiver, inaction, extension of
further credit or other dealing.
If claim is ever made upon the Bank for repayment or recovery of any amount
or amounts received by the Bank in payment or on account of any of the
obligations of the Company under this Modification or Promissory Note,
including, but not limited to, any avoided transfers under the Bankruptcy Code,
and the Bank repays all or part of such amount by reason of (a) any judgment,
decree or order of any court or administrative body having jurisdiction over
the Bank or any of its property, or (b) any settlement or compromise of any
such claim effected and in such event the Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon the
Guarantor, notwithstanding any revocation hereof or the cancellation of any
note or other instrument evidencing any liability of the Company including, but
not limited to, this Modification or the Promissory Note, the Guarantor shall
be and will remain liable to the Bank hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Bank.
Section 3.4 Bank May Proceed Directly Against Guarantor. Upon the
occurrence of an Event of Default hereunder, the Bank may proceed hereunder
against the Guarantor without first proceeding against the Company under any
Basic Document, the Promissory Note or otherwise. The Guarantor waives any
right to require that any action be brought
against the Company or any other Person or to require that resort be had to
any security or to any balance of any deposit account or credit on the books
of the Bank in favor of the Company or any other Person.
Section 3.5 Waiver of Notice. The Guarantor hereby waives any notice,
whether written or otherwise, of the failure of the Company to make any payment
due to the Bank under this Modification or the Promissory Note.
Section 3.6 Agreement to Pay Costs. The Guarantor, without notice or
demand, agrees to pay all costs, including attorneys' fees and disbursements of
the Bank in enforcing or attempting to enforce this Modification.
ARTICLE FOUR
Conditions Precedent
Section 4.1 Conditions Precedent to Issuance of the Letter of Credit and
Commitment to Purchase Bonds. The following were conditions precedent to the
obligation of the Bank to issue the original Letter of Credit and to
purchase Bonds under the Agreement:
(a) the Company and/or the Guarantor provided to the Bank, in form and
substance satisfactory to the Bank and its special counsel:
(i) the written opinion of counsel to the Company and the
Guarantor, dated the date of initial delivery of the Bonds, with respect to the
matters referred to in Appendix 1 of the Agreement;
(ii) the written opinions of Bond Counsel and counsel to the
Issuer, dated the date of initial delivery of the Bonds, with respect to the
matters referred to in Appendices 2 and 3 of the Agreement, respectively;
(iii) a certificate or certificates, signed by a duly
authorized officer of the Guarantor and a duly authorized officer of the
Company, respectively, dated the date of initial delivery of the Bonds, stating
that on the date of the execution and delivery of the Agreement:
(a) the representations and warranties contained in
Article Five thereof were correct on and as of the date of the Agreement as
though made on such date;
(b) none of the Events of Default (as defined in Article
Seven thereof) had occurred and was continuing, or would result from the
issuance of the Letter of Credit, the execution and delivery of the Agreement
or any other Basic Document to which the Company or the Guarantor is a party,
and no event had occurred and was continuing
which would constitute an Event of Default but for the requirement that notice
be given or time elapse or both; and
(c) the audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the Fiscal Year ending January 26, 1985, accurately
reflected the financial condition and performance of the Guarantor, the Company
and Subsidiaries and no material adverse change had occurred in such financial
condition and performance since April 27, 1985;
(iv) evidence of due authorization, execution and delivery by the
parties thereto of the Related Documents;
(v) a copy of resolutions of the Board of Directors of the Company
and the Guarantor, certified as of the date of the Letter of Credit by an
authorized officer of the Company and the Guarantor, authorizing, among
other things, the execution, delivery and performance by the Company of the
Basic Documents to which the Company is a party and the Agreement and the
Guaranty Agreement by the Guarantor and authorizing the Company to obtain the
issuance of the Letter of Credit;
(vi) certified copies of the Company's and the Guarantor's
certificates of incorporation, by-laws and certificates of good standing in the
State and, for the Company, evidence that it was in good standing for doing
business in the State of Arkansas;
(vii) executed counterparts or certified copies of the Related
Documents;
(viii) true and correct copies of all governmental
approvals necessary (a) for the Company to enter into the Basic Documents to
which the Company is a party, and the transactions contemplated by the
Agreement and (b) for the Guarantor to enter into the Agreement and the
Guaranty Agreement;
(ix) a certificate of the Secretary of the Company
certifying the name and true signatures of the officers of the Company
authorized to sign the Basic Documents to which the Company is a party and a
certificate of the Secretary of the Guarantor certifying the name and true
signatures of the officers of the Guarantor authorized to sign the Agreement
and the Guaranty Agreement;
(x) a schedule of estimated Project costs and such other
information relating to the Project;
(xi) a certified copy of the resolution of the Issuer
authorizing the issuance of the Bonds;
(xii) evidence that Moody's Investors Service had given the Bonds
a credit rating at least as high as the Bank's rating or that such Bonds
qualified for such rating;
(xiii) evidence that the Issuer had duly executed, issued and
delivered the Bonds to the Trustee and the Trustee had duly authenticated the
Bonds and delivered the Bonds against payment;
(xiv) audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the fiscal year ending January 26, 1985, including any
management letters related thereto for the Company and the Guarantor;
(xv) a set of preliminary or final plans and
specifications, trade cost breakdown, construction schedule and the general
contract for the Project, if and to the extent such plans and specifications
were available;
(xvi) copy of subordinated debt agreement of the Guarantor and its
Subsidiaries certified by the secretary of the Guarantor; and
(xvii) the receipt of such other documents, certificates and
opinions as the Bank or its special counsel requested and the acceptability of
the documents, certificates and opinions in subsections (i) through (xvii)
hereof to the satisfaction of such special counsel;
(b) no law, regulation, ruling or other action of the United
States, the State or the State of Arkansas or any political subdivision, agency
or authority or court therein or thereof was to be in effect or to have
occurred, the effect of which would be to prevent the Bank from fulfilling its
obligations under the Agreement or under the Letter of Credit.
Section 4.2 Conditions Precedent to this Modification and Renewal of the
Letter of Credit. As conditions precedent to the obligation of the Bank to
enter into this Modification, to renew the Letter of Credit and to purchase
Bonds hereunder:
(a) the Company and/or the Guarantor shall provide the Bank on the date
of this Modification, in form and substance satisfactory to the Bank and its
special counsel:
(i) the written opinion of counsel to the Company and the
Guarantor, dated the date of this Modification with respect to the matters
referred to in Appendix 1 hereto;
(ii) a certificate or certificates, signed by a duly
authorized officer of the Guarantor and a duly authorized officer of the
Company, respectively, dated the date hereof, stating that on the date of the
execution and delivery of this Modification:
(a) the representations and warranties contained in
Article Five of this Modification are correct on and as of the date of this
Modification as though made on such date:
(b) none of the Events of Default (as defined in Article
Seven hereof) has occurred and is continuing, or would result from the renewal
of the Letter of Credit, the execution and delivery of this Modification or any
other Basic Document to which the Company or the Guarantor is a party, and no
event has occurred and is continuing which would constitute an Event of Default
but for the requirement that notice be given or time elapse or both; and
(c) the audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the Fiscal Year ending January 28, 1995, accurately
reflect the financial condition and performance of the Guarantor, the Company
and Subsidiaries and no material adverse change has occurred in such financial
condition and performance since January 28, 1995;
(iii) evidence of due authorization, execution and delivery
by the parties thereto of the Modification Documents;
(iv) a copy of resolutions of the Board of Directors of the
Company and the Guarantor, certified as of the date of this Modification by an
authorized officer of the Company and the Guarantor, authorizing, among
other things, the execution, delivery and performance by the company and the
Guarantor of this Modification and authorizing the company to obtain the
renewal of the Letter of Credit;
(v) certified copies of the Company's and the Guarantor's
certificates of incorporation, by-laws and certificates of good standing in the
State and, for the Company, evidence that it is in good standing for doing
business in the State of Arkansas;
(vi) a certificate of the Secretary of the Company
certifying the name and true signatures of the officers of the Company
authorized to sign this Modification and a certificate of the Secretary of the
Guarantor certifying the name and true signatures of the officers of the
Guarantor authorized to sign this Modification:
(vii) audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the fiscal year ending January 28, 1995, including any
management letters related thereto for the Company and the Guarantor;
(viii) the receipt of such other documents, certificates and
opinions as the Bank or its special counsel may reasonably request and the
acceptability of the documents, certificates and opinions in subsections (i)
through (viii) hereof to the satisfaction of such special counsel;
(b) no law, regulation, ruling or other action of the United
States, the State or the State of Arkansas or any political subdivision, agency
or authority or court therein or
thereof shall be in effect or shall have occurred, the effect of which would
be to prevent the Bank from fulfilling its obligations under this Modification
or under the Letter or Credit.
ARTICLE FIVE
Representations and Warranties of the Company and Guarantor
The Company and the Guarantor represent and warrant, which
representations and warranties shall be deemed to be remade at the time of each
purchase of Bonds hereunder and at the time of each drawing under the Letter of
Credit, that:
Section 5.1 Organization. Corporate Powers. The Company and the
Guarantor are business corporations duly incorporated, validly existing and in
good standing under the law of the State, with all requisite power and
authority to conduct its business and to own its properties and is qualified to
do business in the State and the Company is qualified to do business in the
State of Arkansas.
Section 5.2 Corporate Authority, etc. The execution, delivery and
performance by the Company of the Basic Documents to which it is a party and by
the Guarantor of this Modification and the Guaranty Agreement, have been duly
authorized by all necessary corporate action and such Basic Documents
constitute legal, valid and binding obligations of the Company, and this
Modification and this Guaranty Agreement constitute legal, valid and binding
obligations of the subject to (i) bankruptcy, reorganization, insolvency,
moratorium or other similar laws of general application relating to the
enforcement of creditors' rights; and (ii) certain equitable remedies.
Section 5.3 Compliance with Laws and Contracts. The execution,
delivery and performance by the Company of the Basic Documents to which it is a
party and this Modification and the Guaranty Agreement by the Guarantor do not
and will not: (a) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award as currently in
effect to which the Company or the Guarantor is subject or of the certificate
of incorporation or by-laws of the Company or the Guarantor; (b) result in a
breach of or constitute a default under the provisions of any indenture, loan
or credit agreement or any other agreement, lease or instrument to which the
Company or the Guarantor is subject or by which they, or their property, is
bound; or (c) result in, or require, the creation or imposition of any
mortgage, deed of trust, assignment, pledge, lien, security interest or other
charge or encumbrance of any nature or with respect to any of the properties of
the Company or the Guarantor other than as provided therein; and the Company
and the Guarantor are not in default under any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, agreement lease or instrument.
Section 5.4 Governmental Approvals. The Company and the Guarantor have
obtained all authorizations, consents, approvals, licenses, exemptions of or
filing or registrations with all commissions, boards, bureaus, agencies and
instrumentalities, domestic or foreign, necessary to the valid execution,
delivery and performance by the Company of the Basic Documents to which it is a
party and by the Guarantor of this Modification and the Guaranty Agreement.
Section 5.5 Financial Statements. The audited consolidated and
unaudited consolidating (certified by the chief financial officer of the
Guarantor) financial statements of the Guarantor as at January 28, 1995 and
April 29, 1995, heretofore delivered to the Bank were prepared in accordance
with GAAP in effect on the date such statements were prepared and fairly
present the financial condition of the Company and the Guarantor at such dates
and the results of its operations for the period then ended. No adverse change
in the condition of the Company or the Guarantor as shown on such financial
statements occurred from January 28, 1995, through and including the date of
this Modification. There are no contingent liabilities of the Company or the
Guarantor not disclosed in such financial statements nor are there any payments
due of any material amounts.
Section 5.6 Taxes. The Company and the Guarantor have filed all United
States Federal tax returns and all other tax returns which, to the
knowledge of the Company and the Guarantor, are required to be filed (whether
informational returns or not), and have paid all taxes due, if any, pursuant to
such returns or pursuant to any assessment received by the Company or the
Guarantor, except such taxes, if any, as are being contested in good faith and
as to which reasonable reserves have been provided.
Section 5.7 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Company or the Guarantor, threatened
against the Company or the Guarantor or any of their properties before any
court, arbitrator or governmental department, commission, board, bureau, agency
or instrumentality which, if determined adversely to the Company or the
Guarantor, would singly or in the aggregate, have a material adverse effect on
the business, properties, earnings, prospects or conditions of the ability of
the Company or the Guarantor to perform under this Modification or the
Promissory Note.
Section 5.8 Employee Benefit Plans.
(a) As used in this Section 5.8 and in Section 7.1(a)(xiii) hereof, the
following terms shall have the following meanings:
(i) "Accrued Benefit" - shall have the meaning assigned to
that term in Section 3(23) of ERISA.
(ii) "Accumulated Funding Deficiency" - shall have the meaning
assigned to that term in Section 302(a)(2) of ERISA and Section 412(a) of the
Code.
(iii) "Employee Pension Benefit Plan" - shall have the meaning
assigned to that term in Section 3(2) of ERISA.
(iv) "Employer Liability" - shall mean the liability computed
under Sections 4062, 4063 and 4064 of ERISA.
(v) "ERISA" - shall mean the Employee Retirement Income
Security Act of 1974, as now in effect or as hereafter amended. All
citations to sections, subtitles, titles or other parts of ERISA are to such
sections, subtitles, titles or other parts as they may from time to time be
amended or renumbered.
(vi) "PBGC" - shall mean the Pension Benefit Guaranty Corporation.
(vii) "Plan" - shall mean any "employee benefit plan" (as that
term is defined in Section 3(3) of ERISA but shall not include a
multiemployer plan as defined in Section 3(37)A or Section 4001(A)(3) of
ERISA), as well as any other written or formal plan or contract involving
direct or indirect compensation, under which the Guarantor, the Company or any
Subsidiary has any present or future obligations or liability on behalf of its
employees or former employees or their dependents or beneficiaries, including
but not limited to, each retirement, pension, profit sharing, thrift, savings,
target benefit, employee stock ownership, cash or deferred, multiple employer,
multiemployer or other similar plan or program, each other deferred or
incentive compensation, bonus, stock option, employee stock purchase, "phantom
stock" or stock appreciation right plan, each other program providing payment
or reimbursement for or of medical, dental or visual care, psychiatric
counseling or vacation, sick, disability or severance pay and each other
"fringe benefit" plan or arrangement.
(viii) " Reportable Event" - shall mean any of the events
enumerated in Section 4043(b) of ERISA or the regulations issued
thereunder.
(ix) "Withdrawal Liability" - shall mean the liability described
in Section 4201 of ERISA.
(b) The written terms of each of the Plans and any related trust
agreement group annuity contract, insurance policy or other funding arrangement
are in compliance with the applicable requirements, if any, of ERISA, the Code
or other applicable federal or state law and each of the Plans has been
administered in compliance with such requirements and in accordance with its
terms and the provisions of the applicable collective bargaining agreements, if
any. Each of the Plans for which the Guarantor, the Company or any Subsidiary
has claimed a deduction under Section 404 of the Code, as if such Plan was
qualified under Section 401(a), 403(a), or 408(k) of the Code, has received a
favorable determination letter from the Internal Revenue Service as to
qualification under the appropriate section, and such favorable determination
has not been modified, revoked or limited by failure to satisfy any condition
thereof or by a subsequent amendment to, or failure to amend such Plan. All
contributions which were due and payable on or before the date
hereof to the Plans have been made in full and in proper form, and adequate
accruals have been provided for in the financial statements for all other
contributions or amounts as may be required to be paid to the Plans with
respect to periods which include the date hereof or ended prior thereto,
and neither the Guarantor, the Company nor any Subsidiary has made or agreed
to make, or is required to make (in order to bring any of the Plans
into substantial compliance with the applicable requirements, if any, of
ERISA, the Code or other applicable federal or state law), any changes in
benefits which would materially increase the costs of maintaining any of the
Plans. The present value of all Accrued Benefits of each of the Plans which is
an Employee Pension Benefit Plan does not exceed the current value of the assets
of each such Plan as of the date hereof (based on the interest rate,
mortality and other actuarial assumptions then used for the purpose of
determining the contributions required to be made to each such Plan) in
the aggregate, excluding any Plan for which the current value of Plan assets
equals or exceeds the present value of all Accrued Benefits. No Plan that is
subject to Part 3 of Subtitle B of Title I of ERISA or Section 412 of the Code
had an Accumulated Funding Deficiency as of the end of any Plan's respective
Plan year, whether or not waived. All premiums (and interest charges and
penalties for late payment), if any, due the PBGC as of the date hereof with
respect to the Plans have been paid and, since September 2, 1974, there has
been no Reportable Event with respect of any of the Plans subject to Title IV
of ERISA. No Employer Liability or Withdrawal Liability to the PBGC, to any
Employee Pension Benefit Plan or to another Person or entity has been or is
expected by the Company to be, incurred by the Company or any Subsidiary. None
of the Plans subject to Title IV of ERISA has been terminated, no proceeding
to terminate any of such Plans has been instituted, and there has been no
complete or partial withdrawal, cessation of facility operations or
occurrence or any other event that would result in the imposition of
liability on the Guarantor, the Company or any Subsidiary under Title IV of
ERISA. There is not now, nor since January 1, 1975 has there been, any
transaction involving any Plan which is a "prohibited transaction" under
Sections 406 and 407 of ERISA or Section 4975 of the Code in connection with
which the Guarantor, the Company or any Subsidiary could be subject to any
liability under Title I of ERISA or any excise tax imposed by Section 4975 of
the Code. The Guarantor, the Company and each Subsidiary has, since January 1,
1975, satisfied any bond coverage requirement of ERISA and all reporting and
disclosure obligations under ERISA and the Code with respect to each of the
Plans and the related trust, group annuity contract, insurance policy or
other funding arrangement. No liability for failure to comply with the
withholding tax requirements applying to payments from the Plans has been or
is reasonably expected by the Guarantor or the Company to be, incurred by the
Guarantor, the Company or any Subsidiary. There is no suit, action,
dispute, claim, arbitration or legal, administrative or other proceeding or
governmental investigation pending or threatened, alleging a breach or breaches
of the terms of any of the Plans or of any fiduciary duties thereunder, or
violations of ERISA or the Code or other applicable federal or state law with
respect to any such Plan which might reasonably be expected to result in
material liability to the Guarantor, the Company or any Subsidiary or to have a
material adverse effect on the operations or condition (financial or otherwise)
of the Guarantor, the Company or any Subsidiary or any such Plan, nor is there
any basis or grounds for any such material suit, action, dispute, claim,
arbitration, proceeding or investigation.
Section 5.9 Title to Property. The Company and the Guarantor have good
and marketable title to all of their Property, free and clear of all Liens
except for Liens shown in the financial reports of the Company or the Guarantor
delivered to the Bank for the Fiscal Year ending January 28, 1995.
Section 5.10 Liens. There are no Liens on the Project except
Permitted Encumbrances (as defined in the Installment Sale Agreement). Except
as otherwise provided by law, the obligations of the Company or the Guarantor
to pay the amounts payable under this Modification are not subordinate, in any
respect, to the payment of obligations under all other unsecured and
unsubordinated loans, debts, guaranties or other similar obligations incurred,
created or assumed by the Company or the Guarantor.
Section 5.11 Offering Memorandum. The information concerning the
Company and the Guarantor in the Offering Memorandum is materially accurate and
there has been no material omission of information which in light of the
circumstances would make the information concerning the Company or the
Guarantor in the Offering Memorandum materially misleading or inaccurate.
ARTICLE SIX
Covenants
Section 6.1 Affirmative Covenants. The Company and the Guarantor
covenant and agree with the Bank that they will do the following so long as the
Expiration Date has not occurred and the Stated Amount of the Letter of Credit
has not been permanently reduced to zero, and thereafter so long as any amounts
remain outstanding or obligations remain unfulfilled under this Modification or
the Promissory Note, and for so long as the Bank shall be obligated to purchase
Bonds under Section 2.1(b) hereof or shall be the registered holder of any
Purchased Bond, unless the Bank shall otherwise consent in writing:
(a) Accounting; Financial Statements and Other Information. The
Guarantor and the Company shall deliver to the Bank:
(i) within ninety (90) days after the end of each fiscal year
of the Guarantor and the Company, respectively, consolidated and consolidating
balance sheets of the Guarantor and the Company, respectively,
and their consolidated Subsidiaries as at the end of such year, and
consolidated and consolidating statements of income and retained earnings and
changes in financial position of the Guarantor and the Company, respectively,
and their consolidated Subsidiaries for such year, setting forth in each case
in comparative form corresponding consolidated and consolidating figures from
the preceding fiscal year, all as reported on by Coopers & Lybrand or other
independent certified public accountants of nationally recognized standing;
(ii) within sixty (60) days after the end of each of the first
three (3) quarters of each fiscal year of the Guarantor and the Company,
respectively, consolidated and consolidating balance sheets of the Guarantor
and the Company, respectively, and their consolidated Subsidiaries as at the
end of such quarter and the related consolidated and consolidating
statements of income and retained earnings and changes in financial position of
the Guarantor and the Company, respectively, and their consolidated
Subsidiaries for such quarter and for the portion of the Guarantor's and the
Company's, respectively, fiscal year ended at the end of such quarter as filed
with the Securities and Exchange Commission, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer or the
chief accounting officer of the Guarantor and the Company, respectively;
(iii) simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (ii) above, a certificate of the
chief financial officer or the principal accounting officer of the Guarantor
and the Company, respectively, (A) setting forth whether the
Guarantor and the Company, respectively, were in compliance with the
requirements of Section 6.2 on the date of such financial statements, (B)
stating whether there exists on the date of such certificate any Default or
Event of Default and, if any Default or Event of Default exists, setting forth
the details thereof and the action which the Guarantor and the Company,
respectively, are taking or propose to take with respect thereto, and (C)
having attached thereto a schedule in reasonable detail satisfactory to the
Bank setting forth the computations necessary to determine whether the
Guarantor and the Company, respectively, are in compliance with the financial
covenants set forth in Section 6.2;
(iv) promptly upon the mailing thereof to the shareholders
of the Guarantor and the Company, respectively, generally, copies of all
financial statements, reports and proxy statements so mailed;
(v) promptly upon the filing thereof, copies of all registration
statements, annual reports and Form 8-K's or its equivalent which the
Guarantor and the Company, respectively, shall have filed with the
Securities and Exchange Commission;
(vi) promptly upon the occurrence of any Default or Event of
Default, a certificate of the chief financial officer or the principal
accounting officer of the Company setting forth the details thereof and the
action which the Company is taking or proposes to take with respect thereto;
(vii) from time to time such additional information regarding
the financial position or business of the Guarantor and the Company,
respectively, as the Bank may reasonably request.
(b) Compliance with Laws. Guarantor shall comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders. In furtherance, but not in limitation,
of such obligation, Guarantor shall:
(i) comply in all material respects with all Environmental
Laws;
(ii) notify the Bank immediately of any notice of a hazardous
discharge or environmental complaint received from any governmental agency or
any other party if there exists the reasonable likelihood of a material
loss or liability or the reasonable likelihood of the suspension of business
operations;
(iii) In the event of any hazardous discharge from or affecting
any of the premises of either Guarantor or any of its Subsidiaries which has a
reasonable likelihood of resulting in a material loss or liability
or a material suspension of business operations, (i) notify the Bank
immediately thereof, (ii) promptly contain and remove the same in the manner
required by law, (iii) promptly pay any fine or penalty assessed in connection
therewith unless being contested in good faith by proper proceedings, (iv) at
the request of the Bank, permit the Bank to inspect all books, correspondence
and records pertaining thereto, (v) at the Guarantor's expense, provide a
report of a qualified environmental engineer reasonably acceptable to the Bank
with sufficient information to enable the Bank to determine the Guarantor's
liability for remediation and response costs, damages, fines and other costs
and expenses arising out of the hazardous discharge, to the extent such
liability can reasonably be quantified by the engineer, and (vi) provide such
other and further assurances reasonably satisfactory to the Bank that the
condition has been corrected.
(c) Preservation of Corporate Existence etc.; Conduct of Business;
Ownership of Certain Subsidiaries. The Guarantor and each Restricted Subsidiary
shall do or cause to be done all things necessary (i) to preserve and keep
in full force and effect its existence, rights and franchises, and (ii) to
maintain each Restricted Subsidiary as a Restricted Subsidiary, except as
otherwise permitted by Sections 6.2(e)(i), 6.2(e)(ii) and 6.2(i).
(d) Maintenance of Properties; Insurance; Records. The Guarantor
and each Restricted Subsidiary shall:
(i) Maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(ii) Maintain, with financially sound and reputable insurers,
insurance with respect to its 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 customary in the case of corporations of established reputations engaged
in the same or a similar business and similarly situated;
(iii) Keep true books of records and accounts in which full and
correct entries will be made of all its business transactions, and will
reflect in its financial statements adequate accruals and appropriations to
reserves, all in accordance with GAAP.
(e) Payment of Taxes and Claims, etc. The Guarantor and each
Restricted Subsidiary will pay, before they become delinquent, (i) all taxes,
assessments and
governmental charges or levies imposed upon it or its Property, and (ii) all
claims or demands of materialmen, mechanics, carriers, warehousemen, 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 clauses (i) and
(ii) 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 GAAP, and provided
further that the owing company's title to, and its right to use, its Property
(f) Bond Proceeds; Additional Funds. Use the proceeds of the Bonds
for the purposes set forth in the Indenture and complete the Project in
accordance with Article III of the Installment Sale Agreement.
(g) Further Assurance. Execute and deliver to the Bank all such
documents and instruments and do all such other acts and things as may be
necessary or required by the Bank to enable the Bank to exercise and enforce
its rights under this Modification, and to record and file and re-record and
re-file all such documents and instruments, at such time or times, in such
manner and at such place or places, all as may be necessary or required by the
Bank to validate, preserve and protect the position of the Bank under this
Modification, the Promissory Note and the Security Agreement.
(h) Disclosure to Bondholders. Permit the Bank and the Agent to
disclose the financial information described in Section 6.1(a) hereof to
potential Bondholders.
Section 6.2 Negative Covenants. The Company and the Guarantor
covenant and agree with the Bank that so long as the Expiration Date has not
occurred and the Stated Amount of the Letter of Credit has not been permanently
reduced to zero, and thereafter until the Bank delivers to the Company a
certificate that to its knowledge no amounts remain outstanding under and no
obligations remain unfulfilled under this Modification or the Promissory Note
(which certificate shall not prejudice any rights of the Bank and which
certificate shall not be unreasonably withheld), and for so long as the Bank
shall be obligated to purchase Bonds under Section 2.1(b) hereof or shall be
the registered holder of any Purchased Bond, the Company and the Guarantor will
not directly or indirectly, unless the Bank shall otherwise consent in writing:
(a) Mortgages, Liens, etc. Neither the Guarantor nor any Restricted
Subsidiary will cause or permit or hereafter agree to consent to cause or
permit in the future (upon the happening of a contingency or otherwise)
any of its Property, whether now owned or subsequently acquired, to be subject
to a Lien except:
(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 Properties subject to the Liens or
materially interfere with their use in the ordinary conduct of the owning
company's business, (B) all claims which the Liens secured 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
Guarantor, 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 and by appropriate proceedings and (C)
adequate reserves have been established therefor on the books of the
Guarantor, if required by generally accepted accounting principles;
(iv) Liens on Property of a Restricted Subsidiary, provided
that they secure only obligations owing between the Guarantor and any
Restricted Subsidiary;
(v) Liens existing on the date hereof, which liens are set forth
on Exhibit A hereto;
(vi) other Liens not otherwise permitted under this Section
6.2(a)(i)-(v) 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 the amounts
permitted under Section 6.2(b)(iv)-(v) with respect to indebtedness incurred
by one of the Subsidiaries identified therein; 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.
(b) Financial Covenants.
(i) The Guarantor will at all times maintain Consolidated
Current Assets at not less than 175% of Consolidated Current Liabilities.
(ii) The Guarantor will at all times maintain Consolidated
Working Capital of not less than $90,000,000.
(iii) The Guarantor will at all times maintain Consolidated
Adjusted Tangible Net Worth of not less than $80,000,000 plus 30% of
Consolidated Adjusted Net Income accumulated after January 28, 1995. The
minimum Consolidated Adjusted Tangible Net Worth requirement set forth in this
Section shall be unaffected by and shall not be reduced as a result of losses,
if any, sustained by the Guarantor or its consolidated Subsidiaries after
January 28, 1995.
(iv) The Guarantor shall not permit Buffalo China, Inc. to
incur Total Funded Debt in excess of $5,000,000 and the Company to incur
Total Funded Debt in excess of $7,500,000, except for Total Funded Debt payable
to the Guarantor and permitted by Section 6.2(c).
(v) The Guarantor shall not permit Kenwood Silver Company,
Inc. to incur any Total Funded Debt.
(vi) For the period of four (4) consecutive fiscal quarters
immediately prior to the execution of this Modification and for each period of
four (4) consecutive fiscal quarters thereafter, the Guarantor will maintain
Consolidated Income Available for Interest Charges at not less than 200% of
Consolidated Interest Charges.
(vii) The ratio of Total Funded Debt of the Guarantor and its
Restricted Subsidiaries to Consolidated Adjusted Tangible Net Worth shall not
exceed:
(A) 1.55 through the fiscal quarter ending July 30, 1995; and
(B) 1.35 as at the end of each fiscal quarter ending after
August 1, 1995.
(c) Restricted Payments. Neither the Guarantor nor any Restricted
Subsidiary will declare, make or incur any liability to make, any Restricted
Payment or make or authorize any Restricted Investment or purchase or
otherwise acquire any Restricted Payment or Restricted Investment if,
immediately after giving effect to Restricted Payment or Restricted Investment:
(i) the sum of such Restricted Payments and the amount of Restricted
Investments (valued immediately after such action) made after April 29, 1995
would exceed the sum of 20% of Consolidated Adjusted Net Income accumulated
after January 28, 1995, plus $11,000,000; (ii) a Default or an Event of Default
under this Modification would exist, or (iii) the Guarantor could not incur at
least $1.00 of additional Total Funded Debt pursuant to Section 6.2(b)(vii).
Notwithstanding anything in this Section 6.2(c) to the contrary, (i)
the aggregate amount of loans and advances by Guarantor to, and accounts
receivable of Guarantor from, Buffalo China, Inc. shall not exceed $10,000,000
and (ii) Guarantor shall not make or permit
to exist any loans or advances by Guarantor to, or accounts receivable of
Guarantor from, Kenwood Silver Company, Inc.
(d) Restricted Dividends. Neither the Guarantor nor any Restricted
Subsidiary will declare, make, pay or incur any liability for, any Restricted
Dividend other than (i) a Restricted Dividend paid to Guarantor by a Restricted
Subsidiary, (ii) Restricted Dividends paid during the fiscal year ending
January 28, 1995, in an amount not to exceed $5,500,000 in the
aggregate, and (iii) Restricted Dividends paid subsequent to January 28, 1995
which do not exceed the sum of $6,000,000 plus 50% of Consolidated Adjusted Net
Income accumulated subsequent to January 28, 1995.
(e) Consolidation, Merger Sale of Assets etc. The Guarantor will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
(i) Be a party to any merger or consolidation (except that a
Restricted Subsidiary may merge into or consolidate with the Guarantor or
another Restricted Subsidiary) provided that the Guarantor may merge or
consolidate with another corporation if (A) the surviving or acquiring
corporation (v) is organized under the laws of the United States or a
jurisdiction thereof, (w) expressly assumes the covenants and obligations in
the Guaranty Agreement and this Modification, (x) is solvent, (y) would not,
immediately after giving effect to the transaction, be in default under any of
the terms of this Modification, and (z) could, immediately after giving effect
to the transaction, incur at least $1.00 of additional Total Funded Debt
pursuant to Section 6.2(b)(vii), and (B) no Default shall have occurred,
including, without limitation, a Default of the nature described in Section
7.1(a)(xv) hereof;
(ii) (A) sell, lease, transfer or otherwise dispose of any of its
Property (other than to the Guarantor and other than in a transaction
permitted by Section 6.2(e)(i) or (B) sell or otherwise dispose of any shares
of the stock (or any options or warrants to purchase stock or Securities
exchangeable for or convertible into stock) of a Restricted Subsidiary
(said stock, options, warrants and other Securities herein called "Subsidiary
Stock"), nor will any Restricted Subsidiary issue, sell or otherwise
dispose of any shares of its own Subsidiary Stock, if the effect would be
to reduce the direct or indirect proportionate interest of the Guarantor
and its other Restricted Subsidiaries in the outstanding Subsidiary Stock of
the Restricted Subsidiary whose shares are the subject of the
transaction; provided, however, that these restrictions do not apply to:
(x) the issue of directors' qualifying shares; or
(y) the transfer of Property (other than Subsidiary Stock) in
the ordinary course of business; or
(z) the transfer of Property (including up to, but not more
than, 15% of the outstanding Subsidiary Stock of any Subsidiary) during any
fiscal year to any Person if (A) such Property (valued at the greater of book
or fair market value at the time of disposition thereof) does not, together
with Property of the Company and all other Restricted
Subsidiaries previously disposed of during such fiscal year (other than in
the ordinary course of business and other than to the Guarantor and other
than in a transaction permitted by Section 6.2(e)(i)), constitute 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 fiscal
quarters by (1) such Property, (2) each Restricted Subsidiary which has been
disposed of since the beginning of such four fiscal quarters (other than to
the Guarantor and other than in a transaction permitted by Section
6.2(e)(i))), and (3) other Property of the Guarantor and all Restricted
Subsidiaries disposed of since the beginning of such four fiscal quarters
(other than in the ordinary course of business and other than to the
Guarantor and other than in a transaction
permitted by Section 6.2(e)(i)), do not constitute more than 10% of
Consolidated Adjusted Net Income for any such four fiscal quarters; and (C) the
amount of Subsidiary Stock transferred, when added to Subsidiary Stock
previously transferred, does not exceed 15% of the outstanding Subsidiary Stock
of any Subsidiary. For purposes of determining Guarantor's compliance with this
subsection (z) in the event of a sale of up to 15% of the Subsidiary 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.
(f) Compliance with Law. The Guarantor and each Restricted Subsidiary
will not be in violation of any laws, ordinances, or governmental rules and
regulations to which it is subject and will not fail to obtain any licenses,
permits, franchises or other governmental authorizations necessary to the
ownership of its Properties or to the conduct of its business, which
violation or failure to obtain might materially adversely affect the business,
prospects, profits, properties or conditions (financial or otherwise) of the
Guarantor and its Subsidiaries as a whole.
(g) Taxability of Interest on Bonds. Neither the Guarantor nor the
Company will take, or omit to take, any action or consent to the Trustee
taking, or omitting to take, any action which would cause the interest on the
Bonds to become taxable to the recipients therefor for any reason.
(h) Guaranties. Neither the Guarantor nor any Restricted 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, (b) other Guaranties under which the
maximum aggregate amount guaranteed can be mathematically determined at the
time of issuance, and (c) Guaranties of indebtedness under the Credit
Agreement. Each Guaranty permitted by this Section 6.2(h) shall be included in
either Current Debt or Long Term Debt in determining Guarantor's compliance
with the covenants in this Article Six.
(i) Transactions with Affiliates: Restricted Subsidiaries.
(i) Neither the Guarantor nor any Restricted 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 Guarantor or the
Restricted Subsidiary as would be obtained in a comparable arm's-length
transaction with a non-Affiliate.
(ii) The Guarantor may from time to time cause any Subsidiary
to be designated as a Restricted Subsidiary (provided the Subsidiary satisfies
the requirements set forth in the definition of Restricted Subsidiary)
or any Restricted Subsidiary to be designated an Unrestricted Subsidiary;
provided, however, that neither Buffalo China, Inc. nor the Company may be
designated an Unrestricted Subsidiary; and provided, further, that immediately
following such action and after giving effect thereto, (A) no Event of Default
would exist under the terms of this Modification, (B) the Guarantor and its
Restricted Subsidiaries would be in compliance with all of the business
covenants set forth in this Article Six if tested on the date of such action,
and (C) any Restricted Subsidiary which is designated an Unrestricted
Subsidiary has no interest in any other Restricted Subsidiary or the Guarantor
and has no indebtedness for borrowed money from the Guarantor or any Restricted
Subsidiary, and provided, further, that once a Restricted Subsidiary has been
designated an Unrestricted Subsidiary, it shall not thereafter be redesignated
as a Restricted Subsidiary. Within ten (10) days following any designation
described above, the Guarantor will deliver to the Bank a notice of such
designation accompanied by a certificate signed by a principal financial
officer of the Guarantor certifying compliance with all requirements of this
Section 6.2(i) and setting forth all information required in order to establish
such compliance.
(j) ERISA Compliance.
(i) Neither the Guarantor nor any Restricted 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.
(ii) 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 Guarantor and shall comply with all requirements of law.
(iii) Neither the Guarantor nor any Restricted Subsidiary
will at any time permit any Pension Plan maintained by it to:
(a) engage in any "prohibited transaction", as such term is
defined in Section 4975 of the Code;
(b) incur any "accumulated funding deficiency", as such term
is defined in Section 30 of ERISA, whether or not waived; or
(c) be terminated in a manner which could result in the
imposition of a Lien on the Property of the Guarantor or any Restricted
Subsidiary pursuant to Section 4068 of ERISA.
ARTICLE SEVEN
Defaults
Section 7.1 Events of Default and Remedies.
(a) If any of the following events shall occur and be continuing
(each such event shall be an "Event of Default"):
(i) any representation or warranty made by the Company or the
Guarantor in the Agreement, this Modification or in any certificate,
agreement, instrument or statement contemplated by or made or delivered
pursuant to or in connection herewith shall prove to have been false or
misleading in any material respect either on the date hereof, on the date of
any drawing under the Letter of Credit or purchase of any bond pursuant to
Section 2.1(b) hereof, or on the date when made;
(ii) an event of default shall have occurred (or would occur but
for the passage of time or the lack of notice or both) and is continuing
under any of the Basic Documents (as defined respectively therein);
(iii) default in the payment of principal of the Promissory
Note five (5) days after the same shall become due and payable;
(iv) default in the payment of interest on the Promissory
Note five (5) days after the same shall become due and payable;
(v) five (5) days after default in the payment due under the
Installment Sale Agreement by the Company of the Company's payment obligation
under the Installment Sale Agreement;
(vi) default in the payment of any Letter of Credit Fee or other
amount required to be paid or reimbursed under this Modification or the
Promissory Note to the Bank five (5) days after the same shall become due and
payable;
(vii) default in the due observance of the covenants set forth in
Section 6.1 and the continuance of such default for thirty (30) days;
(viii) default in the due observance or performance of the
negative covenants contained in Section 6.2 hereof;
(ix) the Guarantor or any Restricted Subsidiary shall (i) fail to
pay any aggregate indebtedness exceeding $1,000,000 (other than the Notes) when
due or interest thereon and such failure to pay shall continue for more than
any applicable period of grace with respect thereto or (ii) fail to observe or
perform any term, covenant, or agreement contained in any agreement or
instrument (other than this Modification Agreement or the Notes) by which it is
bound evidencing or securing or relating to any aggregate indebtedness
exceeding $1,000,000 and such failure to observe or perform continues for more
than any applicable period of grace with respect thereto, if the effect of such
failure to observe or perform is to permit (or, with the giving of notice or
lapse of time or both, would permit) the holder or holders thereof or of any
obligations issued thereunder or a trustee or trustees acting on behalf of such
holder or holders to cause acceleration of the maturity thereof or of any such
indebtedness;
(x) The Company or the Guarantor or any Subsidiary of either makes
an assignment for the benefit of creditors, enters into a composition of
creditors, files a petition under the Bankruptcy Code, is unable generally to
pay its debts as they come due, is insolvent or bankrupt or its debts are
greater than its property net of any property which was transferred, concealed
or removed with the intent to hinder, delay or defraud its creditors or there is
entered any order or decree granting relief in any involuntary case commenced
against the Company or the Guarantor or any Subsidiary of either under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or if the Company or the Guarantor or any Subsidiary of either
petitions or applies to any tribunal or governmental entity for any
receiver, trustee, liquidator, assignee, custodian or sequestrator (or other
similar official) of the Company or the Guarantor or any Subsidiary of either
or of any substantial part of the Company's or the Guarantor's (or any
Subsidiary of either) assets, or the Company or the Guarantor or any Subsidiary
of either has transferred, concealed or removed any of its property with intent
to hinder, delay or defraud its creditors generally or the Bank or Bondholders,
in particular, or a transfer of all or a substantial or material portion of its
property, or commences any readjustment of debt, dissolution, liquidation or
other similar procedure under the law or statutes of any jurisdiction, whether
now or hereafter in effect, or if there is commenced against the Company or the
Guarantor or any Subsidiary of either any such involuntary case or proceeding
in a court of law or the Company or the Guarantor or any Subsidiary of either
by any act indicates its consent to, approval of, or acquiescence in any such
case or proceeding in a court of law, or to an order for relief in an
involuntary case commenced against the Company or the Guarantor or any
Subsidiary under any such law, or to the appointment of any receiver, trustee,
liquidator, assignee, custodian or sequestrator (or other similar official) for
the Company or the Guarantor or any Subsidiary or a substantial part of the
Company's or the Guarantor's assets (or any subsidiary of either), or if the
Company or the Guarantor or any Subsidiary takes any action for the purposes of
effecting the foregoing; or if the Issuer becomes a debtor under the Bankruptcy
Code or otherwise adjusts its debts under judicial or administrative
administration or otherwise restructures its debts generally or is insolvent,
bankrupt, seeks liquidation or dissolution or unable to meet its debts as they
become due;
(xi) any material provision of this Modification or of any of the
Basic Documents shall cease to be valid and binding, or the Company, the
Guarantor or any governmental authority shall contest any such provision, or
the Company, the Guarantor, or any agent, custodian or trustee on behalf of the
Company or the Guarantor, shall deny, in writing, signed by an executive
officer of the Company or the Guarantor (as defined in the Articles of
Incorporation or By-Laws of the Company or the Guarantor as existing on the
date of execution of this Modification), that it has any or further liability
under this Modification or any of the Basic Documents to which either is a
party;
(xii) judgment for the payment of money in excess of an aggregate
of $500,000 shall be rendered against the Company or the Guarantor or any
Subsidiary of either and the same shall remain undischarged or unbonded for a
period of sixty (60) consecutive days after notice of appeal, if any, has been
filed or sixty (60) days after expiration of the time for filing such notice
has expired;
(xiii) the Company or the Guarantor, in the reasonable opinion of
the Bank, will experience a Material Adverse Effect on the operations,
properties or conditions (financial or otherwise) of the Company or the
Guarantor or any Subsidiary of either as a result of:
(A) a Reportable Event, Plan termination, complete or
partial withdrawal, cessation of facility operations or any other event that
could result in liability under Title IV of ERISA other than an event based on
the participation in or withdrawal from a "multiemployer plan" as defined in
Section 3(37)A or Section 4001(A)(3) of ERISA;
(B) a failure to comply with the written terms of any Plan
or related document (including, but not limited to, a collective bargaining
agreement) or a failure to discharge any duty or obligation thereunder;
(C) a loss of any prior qualification of any Plan or related
trust under Sections 401(a), 403(a), 408(k) or 501(a) of the Code;
(D) a threatened or pending suit, action, dispute, claim,
arbitration or legal, administrative or other proceeding, audit or
investigation with respect to any Plan;
(E) the total present value of all Accrued Benefits under all
of the Plans which is an Employee Pension Benefit Plan exceeds by $10,000,000
or more the current value of the assets of all such Plans as of the most recent
valuation date with respect to such Plan (based on the interest rate,
mortality and other actuarial assumptions then used for the purpose of
determining the contributions required to be made to each such Plan), excluding
any plan for which the current value of Plan assets equals or exceeds the
present value of all Accrued Benefits; or
(F) any combination of the above;
and such default has not been cured or waived within sixty (60) days after the
occurrence thereof; for purposes of this subsection (xiii) and Section 5.8, a
"Material Adverse Effect" shall be deemed to exist if there is any material
expense, liability or loss to the Company, the Guarantor or any Subsidiary of
either;
(xiv) the Guarantor shall default on its guaranty of payment
contained in Section 3.1 hereof;
(xv) any Person or two or more Persons acting in concert
(other than the Guarantor, any Subsidiary of the Guarantor, any employee
benefit plan maintained by the Guarantor or any of its Subsidiaries, or any
trustee or fiduciary with respect to such plan acting in such capacity) (A)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly of securities of the Guarantor (or other
securities convertible into such securities) representing twenty percent (20%)
or more of the combined voting power of all securities of the Guarantor
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 Guarantor (or other securities convertible into
such securities) representing twenty percent (20%) or more of the combined
voting power of all securities of the Guarantor entitled to vote in the
election of directors, other than securities having such power only by reason
of the happening of a contingency;
then:
(b) In the Event of Default, at any time thereafter, during the
continuance of any such Event of Default, the Bank may:
(i) give notice to: (a) the Trustee as provided for in Section
9.01(f) of the Indenture of the Event of Default; and (b) to the Tender Agent
or the Trustee as provided in, and subject to compliance with the terms and
time limits imposed by Section 2.6(a) of this Modification, if applicable;
(ii) demand immediate payment of any Unreimbursed Amounts and
any other amounts under this Modification or any amounts owing as evidenced by
the Promissory Note;
(iii) take any actions permitted with respect to the collateral,
under the Security Agreement;
(iv) terminate its obligation to purchase Bonds pursuant to
Section 2.1(b) of this Modification; and/or
(v) pursue any other action available at law or in equity.
ARTICLE EIGHT
Miscellaneous
Section 8.1 No Deductions, Increased Costs.
(a) All sums payable by the Company or the Guarantor hereunder or
under the Promissory Note or the Bonds, whether of principal, interest, fees,
expenses or otherwise, shall be paid in full, without any deduction or
withholding whatsoever. In the event that the Company or the Guarantor is
compelled by law to make any such deduction or withholding, then the Company or
the Guarantor shall pay the Bank such additional amount as will result in the
receipt by the Bank of a net sum equal to the sum it would have received had no
such deduction or withholding been required to be made. In the event such law,
regulation or condition shall be revoked, rescinded, declared invalid or
inapplicable or otherwise rescinded, the Bank shall forthwith refund to the
Company or the Guarantor any and all amounts repaid to it upon or after such
rescission which are attributable to payments made by the Company or the
Guarantor to the Bank pursuant to this Section.
(b) If any change in applicable law, regulation, condition, directive
or interpretation thereof (including any request, guideline or policy of a
governmental agency or official, whether or not having the force of law, which
the Bank, in the reasonable exercise of its judgment complies with, and
including, without limitation, Regulation D promulgated by the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect) by any authority charged with the administration or interpretation
thereof occurs which:
(i) subjects the Bank to any tax not imposed on the date of this
Modification, with respect to: (a) any amount paid or to be paid by the Bank,
as the issuer of the Letter of Credit (other than any tax measured by or based
upon the overall net income of the Bank imposed by the jurisdiction in which the
Bank has its principal office), or (b) the Letter of Credit;
(ii) changes the basis of taxation of payments to the Bank of
principal of or interest on the amount described in clause (i)(a) above, or,
with respect to the Letter of Credit, other amounts payable hereunder or
under the Promissory Note or any Purchased Bond then held by it; or
(iii) imposes, modifies or deems applicable any reserve or
deposit requirements against any assets held by, deposits with or for the
account of, or loans or commitments by, an office of the Bank in connection
with payments by the Bank under this
Modification or under the Promissory Note, any such Purchased Bond or the
Letter of Credit: or
(iv) imposes upon the Bank any other condition with respect to
such amount paid or payable to or by the Bank or with respect to this
Modification, the Promissory Note, any such Purchased Bond or the Letter of
Credit;
and the result of any of the foregoing is to increase the cost to the Bank of
making any payment or maintaining the Commitment, or to reduce the amount of
any payment (whether of principal, interest or otherwise) receivable by the
Bank under this Modification or to require the Bank to make any payment on or
calculated by reference to the gross amount of any sum received by it under
this Modification, in each case by an amount which the Bank in its sole
judgment deems material, then and, in any such case in which a payment to the
Bank is based upon the Prime Rate, to the extent that any such increased cost,
reduction or payment is not factored into the Prime Rate:
(1) the Bank shall promptly notify the Company in writing of
the happening of such event;
(2) the Bank shall promptly deliver to the Company a
certificate stating the change which has occurred or the reserve requirements
or other conditions which have been imposed on the Bank or the request,
direction or requirement with which it has complied, together with the date
thereof, the amount of such increased cost, reduction or payment and the way in
which such amount has been calculated; and
(3) the Company shall pay to the Bank, within thirty (30)
days after delivery of the certificate referred to in clause (2) above, such
amount or amounts as will compensate the Bank for such additional cost,
reduction or payment. The certificate of the Bank, signed by a vice president
or more senior officer of the Bank, as to the additional amounts payable
pursuant to this paragraph delivered to the Company shall be conclusive
evidence, absent error of the amount thereof.
Section 8.2 Right of Setoff; Other Collateral.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Bank is hereby authorized at any time and from time to time,
without notice to the Company (any such notice being expressly waived by the
Company) and to the fullest extent permitted by law, to setoff and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing to the Bank to or for the
credit or the account of the Company against any and all of the obligations of
the Company now or hereafter existing under this Modification, irrespective of
whether or not the Bank shall have made any demand under this Modification and
although such obligations may be unmatured.
(b) Without modifying the payment provisions of Section 2.2 of this
Modification, the Promissory Note or any Purchased Bonds, the Bank hereby
agrees to waive its rights, at law or otherwise, at any time after the
commencement of and during the pendency of a case by or against the Company
under the Bankruptcy Code, as now constituted or hereafter amended, to set off
and apply any and all deposit (general or special, time or demand, provisional
or final) at any time held and any other Indebtedness at any time owing by the
Bank to or for the account of the Company against any and all of the
obligations of the Company under Section 2.2 of this Modification, the
Promissory Note or any Purchased Bonds to reimburse the Bank for amounts drawn
and paid under the Letter of Credit; provided, that such waiver shall terminate
and be of no force and effect as and when and to the extent that the exercise
of such rights would not result in the Bank's being released, prevented or
restrained from or delayed in fulfilling its obligation under the Letter of
Credit, and provided, further, that such waiver shall terminate and be of no
force and effect if the absence of such waiver would not result in the lowering
or suspension by Moody's Investors Service of its rating of the Bonds.
(c) The Bank hereby agrees that it will not at any time accept any
collateral as security for the payment of the reimbursement obligations
of the Company set forth in Section 2.2 of this Modification, the Promissory
Note or any Purchased Bonds unless provision is made prior to or
simultaneously with the taking of such collateral security by the Bank for an
equal an rateable interest in such collateral security to be granted to the
Trustee for the benefit of the owners from time to time of the Bonds; provided,
that such agreement shall terminate and be of no force and effect as and when
and to the extent that the acceptance of such collateral would not result in
the Bank's being released, prevented or restrained from or delayed in
fulfilling its obligation under the Letter of Credit, and provided, further,
that such agreement shall terminate and be of no force and effect if the
absence of such agreement would not result in the lowering or suspension by
Moody's Investors Service of its rating of the Bonds.
Section 8.3 Indemnity, Costs, Expenses and Taxes.
(a) The Company agrees to indemnify and hold harmless the Bank from
and against, and to pay on demand, any and all claims, damages, losses,
liabilities, reasonable costs and expenses whatsoever which the Bank may
incur or suffer by reason of or in connection with the execution and
delivery of this Modification or payment under the Letter of Credit, and any
other documents which may be delivered in connection with this Modification or
the Letter of Credit including, without limitation, the fees and expenses of
counsel for the Bank, with respect thereto, and with respect to advising the
Bank prior to the date hereof as to their rights and responsibilities under
this Modification and the Letter of Credit and all fees and expenses, if any,
in connection with the enforcement or defense of the rights of the Bank in
connection with this Modification or the collection of any monies due hereunder
or under the Promissory Note, any Purchased Bond, the Letter of Credit and such
other documents which may be delivered in connection with the Modification and
the Letter of Credit; except, only if, and to the extent that any such claim,
damage, loss, liability, cost or expense shall be caused by the willful
misconduct or gross negligence of the Bank in
performing or failing to perform its obligations under this Modification or in
making payment against a draft presented under the Letter of Credit which
does not comply with the terms thereof (it being understood that (x) in
making such payment the Bank's exclusive reliance on the documents
presented to the Bank in accordance with the terms of the Letter of Credit as
to any and all matters set forth therein, whether or not any statement or any
document presented pursuant to the Letter of Credit proves to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
proves to be untrue or inaccurate in any respect whatsoever, and (y) any
such non-compliance in an immaterial respect shall not be deemed willful
misconduct or gross negligence of the Bank). The Company, upon demand by the
Bank at any time, shall reimburse the Bank for any legal or other expenses
incurred in connection with investigating or defending against any such claim,
loss, liability, cost or expense, except if the same is due to the Bank's
gross negligence or willful misconduct. Promptly after receipt by the Bank
of notice of the commencement, or threatened commencement, of any action
subject to the indemnities contained in this Section, the Bank shall promptly
notify the Company thereof; provided, however, that the failure of the Bank
so to notify the Company will not affect the obligation of the Company to
indemnify the Bank with respect to such action or any other action pursuant to
this Section. Notwithstanding Section 8.10, the obligations of the Company
under this Section shall survive payment of any amounts due under the
Promissory Note, the Purchased Bonds or this Modification and the expiration of
the Letter of Credit.
(b) In the event that any amounts paid to the Bank by the Company
pursuant to paragraph (a) of this Section are subsequently required to be
refunded to the Company by the Bank as the result of a final judgment or non-
appealable order, or an agreement between the parties, the Bank shall also
refund interest on such refunded amount (to the extent such refunded amount
was, during the period for which interest is to be so calculated pursuant to
this paragraph (b), within the Banks' control) in an amount equal to the amount
of interest which such refunded amount would have earned from the date such
amount was originally paid by the Company to the Bank, to, but not including
the date of such refund, at the average certificate of deposit rate of the Bank
having a term equal to the period during which such refunded amount was held by
the Bank.
Section 8.3A Capital Adequacy. If after the date of this
Modification, the Bank shall have determined that the applicability of any law,
rule, regulation or guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and
Capital Standards", or adoption after the date hereof, of any other applicable
law, rule, regulation or guideline regarding capital adequacy, or any change in
any of the foregoing, or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by the
Bank (or any lending office of the Bank) or the Bank's holding company with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on the Bank's capital or
on the capital of the Bank's holding company, if any, as a consequence of its
obligations under the instruments
executed and delivered to evidence and/or to secure the obligations of the
Company and Guarantor to the Bank to a level below that which the Bank or the
Bank's holding company could have achieved but for such adoption, change or
compliance (taking into consideration the Bank's policies and the policies of
the Bank's holding company with respect to capital adequacy) by an amount deemed
by the Bank to be material, then, within fifteen (15) days after demand
therefor by the Bank, the Company shall pay to the Bank such additional amount
or amounts as will compensate the Bank or the Bank's holding company for such
reduction.
Section 8.4 Obligations Absolute. The obligations of the Company under
this Modification shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Modification under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of the Letter of Credit, the
Bonds, the Promissory Note, the Basic Documents or any other
agreement or instrument relating thereto (collectively, the "Related
Documents"); provided, however, that this Section 8.4 shall not prohibit the
Company from asserting as a defense to its obligation to pay Letter of Credit
Fees the lack of validity or enforceability of the Letter of Credit if the Bank
refuses to pay any amount drawn under the Letter of Credit in accordance with
the terms thereof;
(b) any amendment or waiver of or any consent to departure from all or
any of the Related Documents;
(c) the existence of any claim, set-off, defense or other rights which
the Company may have at any time against the Trustee, any beneficiary or
any such transferee of the Letter of Credit (or any persons or entities for
which the Trustee, the Tender Agent, any such beneficiary or any such
transferee may be acting), the Bank (other than the defense of payment to the
Bank in accordance with the terms of this Modification), or any other
person or entity, whether in connection with this Modification, the Related
Documents or any unrelated transaction;
(d) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
and
(e) payment by the Bank under the Letter of Credit against presentation
of a sight draft or certificate which does not comply with the terms of the
Letter of Credit, provided that such payment shall not have constituted
gross negligence or willful misconduct of the Bank.
For purposes of this Section 8.4, the Bank's payment against any draft or
acceptance of any document failing to comply with the terms of the Letter of
Credit in any immaterial respect shall not be deemed willful misconduct or
gross negligence.
Section 8.5 Liability of the Bank. The Company assumes all risks of the
acts or omissions of the Trustee and any transferee of the Letter of Credit with
respect to its use of the Letter of Credit. Neither the Bank nor any of its
officers, directors or employees shall be liable or responsible for: (a) the use
which may be made of the Letter of Credit or for any acts or omissions of the
Trustee and any transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement(s) thereon, even
if such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Bank against
presentation of documents which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit, except only that
the Company shall have a claim against the Bank, and the Bank shall be liable
to the Company, to the extent, but only to the extent, of any direct or
consequential damages suffered by the Company which the Company proves were
caused by (i) the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit (it being understood
that any such noncompliance in any immaterial respect shall not be deemed
willful misconduct or gross negligence of the Bank) or (ii) the Bank's willful
failure or gross negligence to pay under the Letter of Credit after the
presentation to it by the Trustee (or a successor Trustee to whom the Letter of
Credit has been transferred in accordance with its terms) of a sight draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; provided, however, that if the Bank shall receive
timely written notification (at both addresses specified in Section 8.16, under
the notice address for the Bank) from both the Trustee and the Company that
sufficiently identified (in the opinion of the Bank) documents to be presented
to the Bank are not to be honored, the Bank agrees that it will not honor such
documents. The Bank is not obligated to honor such notification if timely
written notice is not received by the Letter of Credit Department of the Bank.
Section 8.6 Participants. The Bank shall have the right to grant
participations (to be evidenced by one or more participation agreements or
certificates of participation) in this Modification, in the Promissory Note/ in
the Purchased Bonds and in its rights and obligations under the Letter of
Credit at any time and from time to time to one or more other financial
institutions (each a "Participant"). The Guarantor and Company shall cooperate
in all respects with the Bank in connection with the sale of such
participations, and shall, in connection therewith, execute and deliver such
estoppels, certificates, instruments and documents as may be requested by the
Bank. The Guarantor and Company grant to the Bank the right to distribute, on a
confidential basis financial and other information concerning the Guarantor,
its Subsidiaries and the Project to any party who has purchased such a
participation or who has expressed a serious interest in doing so.
Section 8.7 Calculations. All fees shall be computed on the basis of a 360-
day year (composed of 30-day months) for the actual number of days
elapsed, which shall include the first day on which fees are payable but shall
exclude the day on which payment is made.
Section 8.8 Extension of Maturity. If any payment to the Bank would become
due and payable on other than a Business Day, such payment shall instead become
due on the next succeeding Business Day and interest shall be payable thereon
at the rate herein specified during such extension.
Section 8.9 Drawing and Purchase a Certification. Each drawing by the
Trustee under the Letter of Credit and purchase by the Bank of a Bond under
Section 2.1(b) shall be deemed (i) a certification by the Company and the
Guarantor that the representations and warranties of the Company and the
Guarantor contained in Article Five of this Modification shall be correct in
all material respects as of the date of the drawing, (ii) a certification by
the Company and the Guarantor that the conditions specified in Section 4.1 of
this Modification remain fulfilled, and (iii) a certification by the Company
and the Guarantor that it is in all other respects in material compliance with
the provisions of this Modification.
Section 8.10 Survival of This Agreement. All covenants, agreements,
representations and warranties made in this Modification shall survive the
issuance by the Bank of the Letter of Credit and shall continue in full force
and effect until the Expiration Date shall have occurred, or the Stated Amount
of the Letter of Credit shall have been permanently reduced to zero prior to
the Expiration Date, and no sums drawn or due thereunder or hereunder or under
the Promissory Note or under any Purchased Bond shall be outstanding or unpaid,
regardless of any investigation made by any Person and so long as any amount
payable hereunder remain unpaid. Whenever in this Modification the Bank is
referred to, such reference shall be deemed to include the successors and
assigns of the Bank and all covenants, promises and agreements by or on behalf
of the Company and the Guarantor which are contained in this Modification shall
inure to the benefit of the successors and assigns of the Bank. The rights and
duties of the Company or the Guarantor, however, may not be assigned or
transferred, except as specifically provided in this Modification or with the
prior written consent of the Bank, and all obligations of the Company and the
Guarantor hereunder shall continue in full force and effect notwithstanding any
assignment by the Company or the Guarantor of any of its rights or obligations
under any of the Basic Documents.
Section 8.11 Modification of This Agreement. No amendment,
modification or waiver of any provision of this or any other Basic Document or
the Promissory Note or the Bonds shall be effective unless the same shall be in
writing and signed by the Bank and no consent to any departure by the Company
or the Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Bank. Any such waiver or consent shall e
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Company or the Guarantor in any case shall entitle
the Company or the Guarantor to any other or further notice or demand in the
same, similar or other circumstances.
Section 8.12 Waiver of Rights by the Bank. No course of dealing or
failure or delay on the part of the Bank in exercising any right, power or
privilege hereunder or under
the Letter of Credit, this Modification, the Promissory Note, the Bonds or
any Basic Document shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege. The rights of the Bank under
the Letter of Credit and the rights of the Bank under this Modification, the
Promissory Note, the Bonds and the Basic Documents are cumulative and not
exclusive of any rights or remedies which the Bank would otherwise have.
Section 8.13 Source of Funds. All payments made by the Bank pursuant to
Section 2.1(b) of this Modification or pursuant to the Letter of Credit
shall be made from its own funds or from funds obtained from a Participant as
provided in Section 8.6 of this Modification, but in no event shall such
payment be made with funds obtained from the Company, the Guarantor or the
Issuer.
Section 8.14 Severability. In case any one or more of the provisions
contained in this Modification should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
Section 8.15 Governing Law. This Modification shall be construed in
accordance with and governed by the law of the State of New York.
Section 8.16 Notices.
(a) All notices hereunder shall be given by United States certified or
registered mail, by telegram or by other telecommunication device capable of
creating written record of such notice and its receipt, unless otherwise
specifically provided herein or in the Letter of Credit. Notices hereunder
shall be effective when received and shall be addressed:
If to the Bank, to: Chemical Bank
1975 Lake Street
Elmira, New York 14901
Attention: Account Officer for Camden Wire Co., Inc.
and Oneida Ltd.
With a copy to: Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
Attention: Victor Marinaccio, Vice President
If to the Company, to: Camden Wire Co., Inc.
12 Masonic Avenue
Camden, New York 13316
Attention: Treasurer
If to the Guarantor, to: Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13421
Attention: Treasurer
If to the Agent, to: Chemical Securities, Inc.
270 Park Avenue, 6th Floor
New York, New York 10017
Attention: Alex Polaczyk
If to the Trustee, to: Simmons First National Bank of Pine Bluff
501 Main Street
Pine Bluff, Arkansas 71661
Attention: Trust Department
If to the Tender Agent,
to: Chemical Bank
450 W. 33rd Street, 15th Floor
New York, New York 10001
Attention: Art Cabral, AVP
(b) The Bank agrees to give immediate notice, promptly confirmed in
writing, to the Tender Agent and the Agent of any notice of an Event of
Default given to the Trustee by the Bank as described in Section
7.1(b)(i)(a) of this Modification.
Section 8.17 Headings. The table of contents and captions in this
Modification are for convenience of reference only and shall not define or
limit the provisions hereof.
Section 8.18 Counterparts. This Modification may be executed in two or
more counterparts, each of which shall constitute an original but both or all
of which, when taken together, shall constitute but one instrument, and shall
become effective when copies hereof which, when taken together, bear the
signature of each of the parties hereto shall be delivered to the Company, the
Guarantor and the Bank.
Section 8.19 Reference to Other Documents. Any reference in any of the
Basic Documents or the Related Documents to the Agreement shall be deemed to
refer to the Agreement as restated and modified in this Modification.
Please signify your agreement and acceptance of the foregoing by
executing this Modification in the space provided below.
Very truly yours,
CHEMICAL BANK
By: /s/ Christine M. McLeod
Vice President
Agreed to and Accepted,
August 1, 1995
CAMDEN WIRE CO., INC.
By: /s/ George F. Miller, III
Vice President and Treasurer
ONEIDA LTD.
By: /s/ Barry G. Grabow
Treasurer
FORM OF LETTER OF CREDIT
CHEMICAL BANK
IRREVOCABLE STANDBY LETTER OF CREDIT
August 1, 1985
Simmons First National Bank of Pine Bluff, as trustee
(the "Trustee") under the Indenture of Trust (the "Indenture")
dated as of August 1, 1985, by the City of Pine Bluff,
Arkansas (the "Issuer") to the Trustee.
Attention: Trust Department
Dear Sirs:
We hereby establish in your favor our irrevocable standby Letter of Credit
No. C281929 for the account of Camden Wire Co., Inc. (the "Company"),
whereby we hereby irrevocably authorize you to draw on us from time to time
from and after the date hereof to and including our close of business on August
1, 1986 (the "Expiration Date") a maximum aggregate amount not exceeding
U.S. $9,560,958.90 (the "Stated Amount") of which the sum of $9,000,000
may be drawn on by you to pay principal or the principal component of the
purchase price (the "Principal Stated Amount") of the Issuer's $9,000,000
aggregate principal amount of a Variable Rate Demand Industrial Development
Refunding and Constriction Revenue Bonds (Camden Wire Project), Series 1985
dated August 1, 1985 (the "Bonds"), in accordance with the terms hereof and
the sum of $560,958.90 may be drawn on by you to pay up to 182 days' interest
(based on a year of 365 days) accrued on or the interest component of the
purchase price of the Bonds (the "Interest Stated Amount") on or prior to
the Expiration Date; available against the following documents (the "Payment
Documents") presented to Chemical Bank (the "Bank") at our Letter of Credit
Department at 55 Water Street, South Building, 17th Floor, New York, New York
10041 (or such other place as we may from time to time specify) or by
telecopier (212-344-7731 or 212-344-7741), attention.: Victor Marinaccio, Vice
President (or such other person as we may from time to time specify):
(i) a certificate (i) in the form attached as Exhibit A hereto to pay
principal of the Bonds which is due and payable (other than the purchase price
in respect of principal) (an "A Drawing"), (ii) in the form attached as Exhibit
B hereto to pay up to 182 days' interest (based
on a year of 365 days) on, or the interest component of the purchase price
of, the Bonds (a "B Drawing") which is either (a) due and payable on the
Bonds or (b) accrued on Bonds being purchased with the proceeds of any draft
drawn hereunder following presentment of a certificate in the form of Exhibit C
hereto, or (iii) in the form attached as Exhibit C hereto to pay the purchase
price in respect of principal of the Bonds being purchased (a "C Drawing"),
each signed by one who states therein that he is your duly authorized officer
and dated the date such certificate is presented hereunder; and
(ii) a sight draft in the form attached as Exhibit E hereto (a) drawn
by and payable to you on us, (b) bearing the number of this Letter of Credit,
(c) if presented prior to 11:00 A.M., New York City time, and on a day that is
not a Saturday, Sunday or legal holiday in the Sate of New York or a day on
which Chemical Bank is authorized or required to close (a "Business Day"), of
even date with such certificate or, if presented after 11:00 A.M., New York
City time, on a Business Day, dated the following Business Day and (d) having
inserted therein where indicated a dollar amount not in excess of the amount
equal to the balance available hereunder (i.e., the difference between (I) the
maximum aggregate amount available under this Letter of Credit as provided
above with respect to principal, purchase price, or interest, as the case may
be, less (II) the aggregate amount of all previous drawings made and paid under
this Letter of Credit with respect to principal, purchase price or interest, as
the case may be, other than drawings with respect to which the Bank's
obligation to honor demands for payment under this Letter of Credit has been
reinstated pursuant to the express provisions hereof).
We agree to honor and pay the amount of any draft if drawn and presented
with the documents required by and otherwise in compliance with all of the
terms of this Letter of Credit. If any draft is presented prior to 11:00 A.M.,
New York City time, on a Business Day, payment shall be made to you of the
amount specified, in immediately available funds, before 4:00 P.M., New York
City time, on the same Business Day and if any draft is presented after 11:00
A M., New York City time, on a Business Day, payment shall be made to you of
the amount specified, in immediately available funds, before 4:00 P.M., New York
City time, on the following Business Day.
After payment by us of an A Drawing, the Principal Stated Amount shall be
reduced permanently and automatically by an amount equal to the amount so paid
and the Interest Stated Amount shall be reduced permanently and
automatically, with such reduction of the Interest Stated Amount in an amount
equal to 182 days' interest (calculated at the rate of twelve and one-half of
one percent (12 1/2 per annum, based on a year of 365 days) on the amount of
such reduction of the Principal Stated Amount, such reductions of the Principal
Stated Amount and the Interest Stated Amount to be effective at the time of
such
payment by us.
After payment by us of a B Drawing (other than a B Drawing to pay accrued
interest on Bonds purchased with the proceeds of a C Drawing), the Interest
Stated Amount shall be reduced automatically, subject to reinstatement as
provided in the following sentence, by an amount equal to the amount so
paid, such reduction to be effective at the time of such
payment by us. Notwithstanding the foregoing sentence, the Interest Stated
Amount shall be automatically reinstated in the full amount of such drawing
at the close of business on the tenth (10th) calendar day following payment
of such drawing, unless prior to such time on the tenth (10th) calendar
day, you, in your capacity as Trustee, shall have received either written
notice, or telephonic notice, promptly confirmed in writing, from us of the
occurrence of an Event of Default under the Letter of Credit, Bond Purchase and
Guaranty Agreement dated as of August 1, 1985, among the Company, Oneida, Ltd.
(the "Guarantor") and us (the "Letter of Credit Agreement").
After payment by us of a C Drawing, the Principal Stated Amount shall be
reduced automatically subject to reinstatement as provided in this paragraph by
an amount equal to the amount so paid in respect of such C Drawing. The
Interest Stated Amount shall be reduced automatically, at the same time as such
reduction of the Principal Stated Amount referred to in the immediately
preceding sentence, after payment by us of a B Drawing accompanying a C
Drawing, in an amount equal to the number of days of accrued interest paid by
us in connection with such B Drawing, such reductions to be effective at the
time of such payments by us. Amounts reduced from time to time in connection
with a C Drawing, or in connection with a B Drawing to pay accrued interest on
Bonds purchased with the proceeds of a C Drawing, will be reinstated by the
Bank upon the receipt by the Bank of a certificate, signed by one who states
therein that he is your duly authorized officer and dated the date such
certificate is presented, in the form of Exhibit G hereto, unless, prior to
receipt by us of such notice you shall have received from us either written
notice, or telephonic notice, promptly confirmed in writing, of the occurrence
of an Event of Default under the Letter of Credit Agreement.
After purchase by us of Bonds pursuant to Section 2.1(b) of the Letter
of Credit Agreement, the Principal Stated Amount may be reduced upon
presentation to us of a certificate in the form of Exhibit F, subject to
reinstatement as provided in the following sentence, by an amount equal to the
principal amount of Bonds so purchased, and the Interest Stated Amount shall be
reduced automatically, at the same time as such reduction in the Principal
Stated Amount referred to in this sentence, subject also to reinstatement as
provided in the following sentence, in an amount equal to the number of days of
accrued interest paid by us in connection with such purchase of Bonds on the
principal amount of Bonds so purchased, such reductions to be effective at the
time of such purchase. Amounts reduced from time to time in connection with a
purchase of Bonds pursuant to Section 2.1(b) of the Letter of Credit Agreement
resulting from your presentation to us of a certificate in the form of Exhibit
F hereto as described in the immediately preceding sentence will be reinstated
by us upon the receipt by us of a certificate, signed by one who states therein
that he is your duly authorized officer and dated the date such certificate is
presented, in the form of Exhibit G hereto, unless, prior to receipt by us of
such notice, you shall have received from us either written notice, or
telephonic notice, promptly confirmed in writing, of the occurrence of an Event
of Default under the Letter of Credit Agreement.
Upon receipt by us of a certificate from you in the form of Exhibit F
hereto, we will automatically reduce the amounts available to be drawn
hereunder in respect of principal or
purchase price of and interest on the Bonds by the respective amounts
specified in such certificate. Such reductions shall be effective as of the
date set forth in such certificate.
Upon any reduction of the amounts available to be drawn under this
Letter, of Credit, as provided herein, we may deliver to you: (a) an
amendment to this Letter of Credit substantially in the form of Exhibit H
hereto to reflect any such reduction, or (b) a substitute letter of credit in
exchange for this Letter of Credit, which shall be an irrevocable letter of
credit, dated its date of issuance, in a stated amount equal to the amount to
which the Stated Amount shall have been so reduced, but otherwise having terms
identical to this Letter of Credit, except for such changes in dollar amount
corresponding to such permanent reduction.
Upon the earlier of (i) the making by you of the final drawing available
to be made hereunder which is not subject to reinstatement, (ii) receipt of
a written notice in the form of Exhibit I hereto (which shall be conclusive
evidence of the matters set forth therein) signed by your duly authorized
officer or a duly authorized officer of your successor as Trustee, as
appropriate, and a duly authorized officer of the Issuer that no Bonds
remain outstanding and unpaid or (iii) the Expiration Date, this Letter of
Credit shall automatically terminate and be delivered to us for cancellation.
This Letter of Credit is transferable to your successor as Trustee,
but not otherwise. Any such transfer and assignment (including any successive
transfer and assignment) shall be effective upon receipt by us of a signed copy
of an instrument effecting each such transfer and assignment signed by the
transferor and by the transferee in the form of Exhibit D hereto (which shall
be conclusive evidence of such transfer and assignment) and, in such case,
the transferee instead of the transferor shall, without the necessity of
further action, be entitled to all the benefits of and rights under this Letter
of Credit in the transferor's place; provided that, in such case, the draft and
the certificate of the transferee in the form of Exhibit E and Exhibits A, B,
C, F, G or I hereto, respectively, shall be signed by one who states therein
that he is a duly authorized officer of the transferee.
This Letter of Credit is intended to provide only for the payment of
the principal or purchase price of and interest on the Bonds, other than Bonds
owned by the Bank. Accordingly, in actions taken by you as beneficiary
of this Letter of Credit you shall not be acting as an agent of the Issuer, the
Company or the Guarantor, but shall be acting on behalf of the holders of
the Bonds, other than the Bank. Notwithstanding anything to the contrary
herein, under no circumstances shall you draw upon this Letter of Credit for
the purpose of paying the principal or purchase price or interest on any Bond
owned by the Bank.
Communications with respect to this Letter of Credit shall be addressed
to us at Chemical Bank, Letter of Credit Department, 55 Water Street, South
Building, 17th Floor, New York, New York 10041, specifically referring to the
number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this Letter
of Credit shall be governed by, and construed in accordance with, the terms of
the Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce
Publication No. 400 (the "Uniform Customs"). As to matters not governed by the
Uniform Customs, this Letter of Credit shall be governed by and construed in
accordance with the law of the State of New York.
This Letter of Credit sets forth in full the terms of our
undertaking, and such undertaking shall not in any way be modified or amended
by reference to any other document whatsoever.
Very truly yours,
CHEMICAL BANK
By: ____________________
Title:
Exhibit A to
LETTER OF CREDIT
No._______
PRINCIPAL CERTIFICATE
The undersigned-individual, a duly authorized officer of
_____________________, as trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (i) that certain Letter of
Credit No. ______ dated August 1, 1985 (the "Letter of Credit"), issued by
Chemical Bank in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make a drawing under the Letter
of Credit pursuant to the provisions of the Indenture.
3. The amount of the draft presented with this Certificate is equal
to $___________, the amount of principal of the Bonds (other than Bonds owned
by Chemical Bank) which is due and payable whether upon maturity,
redemption or otherwise but not from the purchase of such Bonds with the
proceeds of any draft drawn under the Letter of Credit upon presentation of a
certificate in the form of Exhibit C to the Letter of Credit.
4. The amount of the draft presented with this certificate does
not exceed the amount equal to (a) the maximum aggregate Principal Stated Amount
originally drawable under the Letter of Credit as provided therein, less (b)
the aggregate amount of all previous drawings made under the Letter of
Credit with respect to principal or purchase price in respect of principal of
the Bonds (whether through an "A Drawing" or a "C Drawing," as each is defined
in the Letter of Credit), less, (c) the amounts, if any, by which the Principal
Stated Amount has been reduced by virtue of the purchase of Bonds by Chemical
Bank pursuant to Section 2.1(b) of the Letter of Credit Agreement (as defined
in the Letter of Credit), plus (d) the amounts, if any, which have been
reinstated with respect to principal or purchase price of the Bonds in
accordance with the express terms of the Letter of Credit.
5. This drawing is made pursuant to Section 5.05 of the
Indenture because (a) an Act of Bankruptcy (as such term is defined in the
Indenture) has occurred or (b) there are insufficient monies (with respect to
paragraph 3 hereof) in the Bond Fund (as such term is defined in the Indenture)
on the Maturity Date (as such term is defined in the Indenture).
In Witness hereof, this certificate has been executed this ____ day of
______________, 19___.
__________________________
as Trustee
By: ______________________
Authorized Officer
Exhibit B
to
LETTER OF CREDIT
No._______
INTEREST CERTIFICATE
The undersigned individual, a duly authorized officer of
____________________, as trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (a) Letter of Credit
No._____ dated August 1, 1985 (the "Letter of Credit"), issued by Chemical Bank
in favor of the Beneficiary; (b) those certain Bonds (as defined in the Letter
of Credit); and (c) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make a drawing under the Letter
of Credit pursuant to the Indenture.
3. The amount of the draft presented with this Certificate is equal
to (a) $__________, the amount of interest on the Bonds (other than Bonds owned
by Chemical Bank) which is due and payable or (b) $_______________, the amount
of any accrued but unpaid interest on Bonds (other than Bonds owned by Chemical
Bank) being purchased with the proceeds of any draft drawn under the Letter of
Credit accompanying or following presentation of a Certificate in the form of
Exhibit C to the Letter of Credit (but, in the case of a draft presented
pursuant to paragraphs (a) or (b) preceding, does not (A) exceed 182 days'
accrued interest on the Bonds, computed at the actual rate from time to time
applicable, or (B) include any interest accrued on the Bonds, or
otherwise, after the maturity, redemption or purchase date, as applicable).
4. The amount of the draft presented with this Certificate does
not exceed the amount equal to (a) the maximum aggregate Interest Stated Amount
originally drawable under the Letter of Credit as provided therein, less (b)
the aggregate amount of all previous drawings made under the Letter of
Credit with respect to interest on or the interest component of the purchase
price of the Bonds, less (c) the amounts, if any, by which the Interest Stated
Amount has been automatically reduced pursuant to the express terms of the
Letter of Credit as a result of an "A Drawing," a "C Drawing" or the purchase
of Bonds by Chemical Bank pursuant to Section 2.1(b) of the "Letter of Credit
Agreement" (as such terms are defined in the Letter of Credit), plus (d) the
amounts which have been reinstated with respect to interest on the Bonds in
accordance with the express terms of the Letter of Credit.
5. This drawing is made pursuant to Section 5.05 of the
Indenture because (a) an Act of Bankruptcy (as such term is defined in the
Indenture) has occurred or (b) there are insufficient monies (with respect to
paragraph 3 hereof) in the Bond Fund (as such term is defined in the Indenture)
on an Interest Payment Date (as such term is defined in the Indenture) or on a
Purchase Date (as such term, is defined in the Indenture).
In Witness Whereof, this certificate has been executed this ___ day of
_________, 19___.
_________________________
as Trustee
By: _______________________
Authorized Officer
Exhibit C
to
LETTER OF CREDIT
No._______
PURCHASE CERTIFICATE
The undersigned individual, a duly authorized officer of
____________________, as trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (i) that certain Letter of
Credit No. ________ dated August 1, 1985 (the "Letter of Credit"), issued by
Chemical Bank in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make a drawing under the Letter
of Credit pursuant to the Indenture.
3. The amount of the draft presented with this certificate is equal
to the principal amount of Bonds other than Bonds owned by Chemical Bank) to be
purchased by the Bank on the day such draft is honored.
4. The Amount of the draft presented with this certificate does
not exceed the amount equal to (a) the maximum aggregate Principal Stated Amount
originally drawable under the Letter of Credit as provided therein, less (b)
the aggregate amount of all previous drawings made under the Letter of
Credit with respect to principal or purchase price of the Bonds (whether
through an "A Drawing" or a "C Drawing"), less (c) the amounts, if any, by
which the Principal Stated Amount has been reduced by virtue of the purchase of
Bonds by Chemical Bank pursuant to Section 2.1(b) of the "Letter of Credit
Agreement" (as defined in the Letter of Credit), less (d) the amounts, if any,
which have been reinstated with respect to principal or purchase price of the
Bonds in accordance with the express terms of the Letter of Credit.
In Witness Whereof, this certificate has been executed this ___ day of
____________, 19___.
__________________________
As Trustee
By: _______________________
Authorized Officer
Exhibit D
to
LETTER OF CREDIT
No._______
TRANSFER CERTIFICATE
Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
Dear Sirs:
Reference is made to that certain irrevocable Letter of Credit No.
__________ dated August 1, 1985 which has been established by the Bank in favor
of ___________________, as trustee.
The undersigned [Name of Transferor] has transferred and assigned
(and hereby confirms to you said transfer and assignment) all of its rights
in and under said Letter of Credit to [Name of Transferee] and confirms that
[Name of Transferor] no longer has any rights under or interest in said Letter
of Credit.
Transferor and Transferee have indicated on the face of said Letter of
Credit that it has been transferred and assigned to Transferee. Transferee
hereby certifies that it is a duly authorized Transferee under the terms
of such Letter of Credit and is accordingly entitled, upon presentation of
the documents called for therein, to receive payment thereunder.
_________________________
Name of Transferor
By: ______________________
[Name and Title of Authorized
Officer of Transferor]
__________________________
Name of Transferee
By: _______________________
[Name and Title of Authorized
Officer of Transferee]
Exhibit E
to
LETTER OF CREDIT
No._______
SIGHT DRAFT
New York, New York
_______________, 19___
For Value Received
Pay on Demand* to
U.S. __________________ Dollars (U.S. $ _______________________ )
Charge to Account of Chemical Bank
Irrevocable Letter of Credit No. ____________
dated August 1, 1985
To Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
_______________________
as Trustee
By: _______________________
Authorized Officer
_________________________________
*By wire transfer in immediately available funds for the account of
___________________, as Trustee (Account No._____ [to be specified]).
Exhibit F
to
LETTER OF CREDIT
No._______
REDUCTION CERTIFICATE
The undersigned individual, a duly authorized officer of
_______________________, as Trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (i) that certain Letter of
Credit No. _____________ dated August 1, 1985 (the "Letter of Credit"), issued
by the Bank in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. Effective on _____________, the Principal Stated Amount
(as defined in the Letter of Credit) shall be permanently reduced by
$__________ (the "Reduction in Principal Stated Amount") and the Interest
Stated Amount (as defined in the Letter of Credit) shall be permanently reduced
by $_________ (which is equal to ____ days' interest, calculated at the rate of
twelve and one-half of one percent (12 1/2 per annum, based on a year of 365/366
days, on the Reduction in Principal Stated Amount), and the Stated Amount shall
thereupon equal $_________, all in accordance with the provisions of the
Indenture.
3. Effective on _____________, the Principal Stated Amount (as
defined in the Letter of Credit) shall be reduced by $__________ the "Reduction
in Principal Stated Amount") and the Interest Stated Amount (as defined in the
Letter of Credit) shall be reduced by $________ (which is equal to ____ days'
interest, calculated at the rate of twelve and one-half of one percent (12
1/2) per annum, based on a year of 365/366 days, on the Reduction in Principal
Stated Amount), and the Stated Amount shall thereupon equal $_________, all in
accordance with the provisions of the Indenture.
In Witness Whereof, this certificate has been executed this ___ day of
____________, 19___.
_________________________
Trustee
By: _______________________
Authorized Officer
Exhibit G
to
LETTER OF CREDIT
No._______
CERTIFICATE OF REINSTATEMENT
The undersigned individual, a duly authorized officer of
______________________, as trustee under the Indenture (as defined in the
Letter of Credit) (the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to that certain Letter of Credit No.____
dated August 1, 1985 (the "Letter of Credit"), issued by Chemical Bank (the
"Bank") in favor of the Beneficiary, pursuant to the Letter of Credit Agreement
(as defined in the Letter of Credit) (the "Letter of Credit Agreement").
(Capitalized terms in this certificate are defined as they are in the Letter of
Credit Agreement.)
1. The undersigned has received notification from the (Agent)
(Bank) (Company) that: (Bonds owned by the Bank which had been acquired with
the proceeds of a drawing under the Letter of Credit pursuant to a Certificate
in the form attached as Exhibits B and C thereto) (Bonds owned by the Bank
which had been acquired with funds made available pursuant to Section 2.1(b) of
the Letter of Credit Agreement) are to be remarketed or sold to a Person other
than the Bank, the Company or the Guarantor.
2. Upon receipt by the Bank of this certificate, (a) the
Principal Stated Amount available under the Letter of Credit shall be increased
by $________ (the "Increase in Principal Stated Amount"), which shall not
increase the Principal Stated Amount available to be drawn under the Letter of
Credit to an amount in excess of the Principal Stated Amount originally
drawable under the Letter of Credit, less any drawings for principal which have
not been reinstated in accordance with the express terms of the Letter of
Credit, and (b) the Interest Stated Amount shall be increased by
$____________(which shall not increase the Interest Stated Amount to an amount
in excess of the Interest Stated Amount originally drawable under the Letter of
Credit less any drawings for interest which have not been reinstated in
accordance with the express terms of the Letter of Credit, subject to the right
of the Bank not to reinstate such amounts as set forth in the Letter of Credit.
_________________________
as Trustee
By: ______________________
Authorized Officer
Exhibit H
to
LETTER OF CREDIT
No._______
NOTICE OF REDUCTION
__________________________, as Trustee
____________________________________
____________________________________
Attention: Corporate Trust Department
Dear Sirs:
Reference is hereby made to that certain Irrevocable Letter of Credit
No._____ dated August 1, 1985 (the "Letter of Credit"), established by us in
your favor as beneficiary.
We hereby notify you that, in accordance with the terms of the Letter of
Credit and that certain Letter of Credit, Bond Purchase and Guaranty Agreement
dated as of August 1, 1985, among Camden Wire Co., Inc., Oneida Ltd. and us
(check, if applicable)
The Principal Stated mount of the Letter of Credit has been permanently
reduced by $________ and the Interest Stated Amount of the Letter of Credit has
been permanently reduced by $_________.
The Principal Stated Amount of the Letter of Credit has been reduced by
$________ and the Interest Stated Amount of the Letter of Credit has been
reduced by $________. [NOTE: These amounts are subject to reinstatement as
provided in the Letter of Credit.)
Accordingly, we hereby confirm with you the following with respect to
the Letter of Credit:
(1) The Principal Stated Amount equals $_____________.
(2) The Interest Stated Amount equals $______________.
(3) The total Stated Amount equals $______________.
This letter should be attached to the Letter of Credit and made a part
thereof.
CHEMICAL BANK
By: _______________________
Authorized Officer
Exhibit I
to
LETTER OF CREDIT
No._______
NOTICE OF TERMINATION
Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
Dear Sirs:
Reference is made to that certain Irrevocable Letter of Credit No.
_________ dated August 1, 1985 (the "Letter of Credit"), which has been
established by Chemical Bank in favor of ____________________, as trustee.
The undersigned hereby certify and confirm that no Bonds (other than Bonds
owned by Chemical Bank, if any) (as defined in the Letter of Credit) have
remained Outstanding within the meaning of the Indenture (as defined in said
Letter of Credit), and the provisions of the Indenture have been
satisfied; accordingly, said Letter of Credit is hereby terminated in
accordance with it terms.
CITY OF PINE BLUFF, ARKANSAS
By: _______________________
Authorized Officer
[Name of Beneficiary or Transferee] By:
_______________________
Authorized Officer
APPENDIX 1
See Tab 12 - Opinion of Counsel for
Camden Wire Co., Inc. and Oneida Ltd.
EXHIBIT A
LIST OF EXISTING LIENS
Lien on certain machinery and equipment securing a $1,400,000 loan
from the New York State Urban Development Corporation.