EXHIBIT 4(a)
THC SYSTEMS, INC. (the "Company")
ONEIDA LTD. (the "Guarantor")
NOTE AGREEMENT
Dated as of November 15, 1996
$35,000,000 Principal Amount
7.49% Senior Notes
Due November 1, 2008
TABLE OF CONTENTS
Section Page
1. DESCRIPTION OF NOTES AND COMMITMENT 1
1.1. Description of Notes 1
1.2. Commitment; Closing Date 1
2. PREPAYMENT OF NOTES 2
2.1. Required Prepayments 2
2.2. Optional Prepayments 3
2.3. Notice of Prepayments 3
2.4. Surrender of Notes on Prepayment or Exchange 4
2.5. Direct Payment 4
2.6. Allocation of Payments 4
2.7. Payments Due on Saturdays, Sundays and Holidays 4
3. REPRESENTATIONS 5
3.1. Representations of the Guarantor and the Company 5
3.2. Representations of the Purchasers 12
4. CLOSING CONDITIONS 13
4.1. Representations and Warranties 13
4.2. Legal Opinions 14
4.3. Events of Default 14
4.4. Payment of Fees and Expenses 14
4.5. Legality of Investment 14
4.6. Private Placement Number 14
4.7. Sale of All Notes 14
4.8. THC Acquisition 14
4.9. Additional Agreements 14
4.10. Proceedings and Documents 14
5. INTERPRETATION OF AGREEMENT 15
5.1. Certain Terms Defined 15
5.2. Accounting Principles 24
5.3. Effect of FASB 106 24
5.4. Valuation Principles 24
5.5. Direct or Indirect Actions 24
6. AFFIRMATIVE COVENANTS 25
6.1. Corporate Existence 25
6.2. Insurance 25
6.3. Taxes, Claims for Labor and Materials 25
6.4. Maintenance of Properties 25
6.5. Maintenance of Records 25
6.6. Financial Information and Reports 26
6.7. Inspection of Properties and Records;
Confidentiality 28
6.8. ERISA 29
6.9. Compliance with Laws 30
6.10. Acquisition of Notes 30
6.11. Private Placement Number 30
6.12. NAIC Filings 30
6.13. Company's Restricted Subsidiary Status 30
6.14. Bank Agreement. 30
6.15. Subsidiary Guarantees 30
6.16. Release of Camden Wire Subsidiary Guarantee 30
7. NEGATIVE COVENANTS 31
7.1. Net Worth 31
7.2. Current Ratio 31
7.3. Funded Debt 31
7.4. Priority Indebtedness of Restricted Subsidiaries 31
7.5. Interest Coverage Ratio 31
7.6. Liens 31
7.7. Long-Term Leases 33
7.8. Restricted Payments 33
7.9. Merger or Consolidation 34
7.10. Sale of Assets 34
7.11. Change in Business 35
7.12. Transactions with Affiliates 35
7.13. Consolidated Tax Returns 35
7.14. Pari Passu Position 35
7.15. Sharing Agreement 35
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR 36
8.1. Nature of Events 36
8.2. Remedies on Default 38
8.3. Annulment of Acceleration of Notes 38
8.4. Other Remedies 38
8.5. Conduct No Waiver; Collection Expenses 39
8.6. Remedies Cumulative 39
8.7. Notice of Default 39
9. AMENDMENTS, WAIVERS AND CONSENTS 39
9.1. Matters Subject to Modification 39
9.2. Solicitation of Holders of Notes 40
9.3. Binding Effect 40
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND
REPLACEMENT
10.1. Form of Notes 41
10.2. Note Register 41
10.3. Issuance of New Notes upon Exchange or Transfer 41
10.4. Replacement of Notes 41
11. MISCELLANEOUS 42
11.1. Expenses 42
11.2. Notices 42
11.3. Reproduction of Documents 42
11.4. Successors and Assigns 43
11.5. Law Governing 43
11.6. Headings 43
11.7. Counterparts 43
11.8. Reliance on and Survival of Provisions 43
11.9. Integration and Severability 43
Annex I: Subsidiaries
Annex II: Existing Funded Debt and Current Debt
Annex III: Description of Liens
Annex IV: Schedule of Insurance
Exhibit A: Form of 7.49% Senior Notes, Due November 1, 2008
Exhibit B: Legal Opinions
Exhibit C: Form of Guaranty Agreement
Exhibit D: Form of Subsidiary Guarantee
Exhibit E: Form of Subordination Agreement
Exhibit F: Form of Sharing Agreement
THC SYSTEMS, INC.
ONEIDA LTD.
NOTE AGREEMENT
Dated as of November 15, 1996
To the Purchasers Named in Schedule I Hereto
Ladies and Gentlemen:
Each of THC SYSTEMS, INC. (formerly named Oneida Community China, Inc.),
a New York corporation (the "Company") and ONEIDA LTD., a New York corporation
(the "Guarantor"), agrees with you as follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes. (a) The Company has authorized the issuance and
sale of $35,000,000 aggregate principal amount of its Senior Notes (the
"Notes"), to be dated the date of issuance, to bear interest from such date at
the rate of 7.49% per annum prior to maturity, payable semi-annually on the
first day of November and May of each year, commencing May 1, 1997, and at
maturity, to bear interest on overdue principal (including any overdue required
or optional prepayment), premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the greater of (a)
the rate of interest publicly announced by The Chase Manhattan Bank (or its
successors or assigns) as its "prime rate" plus one percent (1%) or (b) 9.49%
per annum, to be expressed to mature on November 1, 2008 and to be
substantially in the form attached as Exhibit A. The term "Notes" as used
herein shall include each Note delivered pursuant to this Note Agreement (the
"Agreement") and each Note delivered in substitution or exchange therefor and,
where applicable, shall include the singular number as well as the plural. Any
reference to you in this Agreement shall in all instances be deemed to include
any nominee of yours or any separate account or other person on whose behalf you
are purchasing Notes. You are sometimes referred to herein as a "Purchaser"
and, together with the other Purchaser, as the "Purchasers."
(b) The obligations of the Company hereunder and under the Notes shall
be guaranteed by the Guarantor pursuant to the Guaranty Agreement and by
the Subsidiary Guarantors pursuant to the Subsidiary Guarantees.
1.2 Commitment; Closing Date. Subject to the terms and conditions hereof
and on the basis of the representations and warranties hereinafter set
forth, the Company agrees to issue and sell to you, and you agree to
purchase from the Company, Notes in the aggregate principal
amount set forth opposite your name in the attached Schedule I at a price of
100% of the principal amount thereof.
Delivery of and payment for the Notes shall be made at the offices
of Gardner, Carton & Douglas, 321 North Clark Street, Quaker Tower, Chicago,
Illinois 60610, at 9:00 a.m., Chicago Time, on November 26, 1996, or at such
later time or on such later date, not later than 5:00 p.m. Chicago Time, on
November 30, 1996, as may be mutually agreed upon by the Company and the
Purchasers (the "Closing Date"). The Notes will be delivered to you in fully
registered form, issued in your name or in the name of your nominee. Delivery
of the Notes to you on the Closing Date shall be against payment of the purchase
price thereof in Federal Funds or other funds in U.S. dollars immediately
available at the principal office of Chase Manhattan Bank, New York, New York,
A.B.A. No. 02100002, Attention: Upstate New York-Syracuse, for deposit in the
Company's Account No. 8250073601, Attention: Patricia Janowski (315) 424-2763.
If on the Closing Date the Company shall fail to tender the Notes to you or
shall fail to meet the closing conditions set forth in Sections 4.1 through 4.10
hereof, you shall be relieved of all remaining obligations under this Agreement.
Nothing in the preceding sentence shall relieve the Company of any liability
occasioned by such failure to deliver the Notes. If on the Closing Date any
Purchaser shall fail to tender the purchase price of Notes set forth in Schedule
I hereto to the Company, the Company shall be relieved of all remaining
obligations under this Agreement. Nothing in the preceding sentence shall
relieve any Purchaser of any liability occasioned by its failure to deliver such
Funds. The obligations of each Purchaser shall be several and not joint and no
Purchaser shall be liable or responsible for the acts of any other Purchaser.
2. PREPAYMENT OF NOTES
2.1 Required Prepayments. (a) In addition to payment of all outstanding
principal of the Notes at maturity and regardless of the amount of Notes which
may be outstanding from time to time, the Company shall prepay and there shall
become due and payable on November 1 in each year, $3,890,000 of the principal
amount of the Notes or such lesser amount as would constitute payment in full on
the Notes, commencing November 1, 2000 and ending November 1, 2007 inclusive,
with the remaining principal payable on November 1, 2008. Each such prepayment
shall be at a price of 100% of the principal amount prepaid, together with
interest accrued thereon to the date of prepayment.
(b) (i) In the event of a Change of Control, the Guarantor shall,
immediately upon learning thereof, but in any event within five days after the
date of such Change of Control, give written notice to each holder of a Note
and to the Company of the Change of Control, accompanied by a certificate of
an authorized officer of the Guarantor describing in detail the nature of the
Change of Control and containing an offer by the Company to prepay the Notes on
the terms set forth in the following sentence (the "Change Notice"). Subject to
clause (ii) of this paragraph (b), the Company shall prepay, on a date specified
in such notice by the Company which shall be not less than 45 or more than 60
calendar days after the effective date
of such Change in Control, the entire principal amount of the Notes held by each
holder at the price set forth in Section 2.2(b).
(ii) A holder of Notes may accept or reject the offer of the
Company to prepay Notes made pursuant to clause (i) of this paragraph (b) by
causing a notice of such acceptance or rejection to be delivered to the Company
not more than 30 calendar days following receipt of the Change Notice. A failure
by a holder of Notes to respond to an offer to prepay made pursuant to clause
(i) of this paragraph (b) shall be deemed to constitute an acceptance of such
offer by such holder.
2.2 Optional Prepayments. (a) Upon notice as provided in Section 2.3,
the Company may prepay the Notes, in whole or in part, at any time, in an
amount of not less than $1,000,000 or in integral multiples of $100,000 in
excess thereof at the price set forth in Section 2.2(b).
(b) Each prepayment made pursuant to Section 2.1(b), Section 7.10
(other than prepayments made in connection with a Camden Disposition pursuant to
such Section 7.10) or paragraph (a) of this Section 2.2 shall be at a price of
(i) 100% of the principal amount to be prepaid, plus interest accrued thereon
to the date of prepayment, if the Reinvestment Yield, on the applicable
Determination Date, equals or exceeds the interest rate payable on or in
respect of the Notes, or (ii) 100% of the principal amount to be prepaid, plus
interest accrued thereon to the date of prepayment, plus a premium, if the
Reinvestment Yield, on such Determination Date, is less than the interest
rate payable on or in respect of the Notes. The premium shall equal (x) the
aggregate present value of the amount of principal being prepaid (taking into
account the manner of application of such prepayment required by Section 2.2(c))
and the present value of the amount of interest (exclusive of interest accrued
to the date of prepayment) which would have been payable in respect of such
principal absent such prepayment, determined by discounting (semi-annually on
the basis of a 360-day year composed of twelve 30-day months) each such amount
utilizing an interest factor equal to the Reinvestment Yield, less (y) the
principal amount to be prepaid.
(c) Any prepayment pursuant to Section 2.2(a) or 7.10 of less than all
of the Notes outstanding shall be applied, to reduce, pro rata, each of the
prepayments and the final payment at maturity required by Section 2.1.
(d) Except as provided in Section 2.1, this Section 2.2 and Section
7.10, the Notes shall not be prepayable in whole or in part.
2.3 Notice of Prepayments. The Company shall give notice of any prepayment
of the Notes pursuant to Section 2.1(b) or Section 2.2(a) or Section 7.10 to
each holder of the Notes not less than 30 days nor more than 60 days before the
date fixed for prepayment, specifying (i) such date, (ii) the principal amount
of the holder's Notes to be prepaid on such date, (iii) the date as of
which the premium, if any, will be calculated and (iv) the accrued interest
applicable to the prepayment. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice, together
with the premium, if any, and accrued interest thereon shall become due and
payable on the prepayment date specified in such notice.
The Company also shall give notice to each holder of the Notes by telecopy,
telegram, telex or other same-day written communication, as soon as practicable
but in any event not later than two business days prior to the prepayment date,
of the premium, if any, applicable to such prepayment and the details of
the calculations used to determine the amount of such premium.
2.4 Surrender of Notes on Prepayment or Exchange. Subject to Section 2.5,
upon any partial prepayment of a Note pursuant to this Section 2 or partial
exchange of a Note pursuant to Section 10.3, such Note may, at the option of the
holder thereof, (i) be surrendered to the Company pursuant to Section 10.3 in
exchange for a new Note equal to the principal amount remaining unpaid on the
surrendered Note, or (ii) be made available to the Company for notation
thereon of the portion of the principal so prepaid or exchanged. In case the
entire principal amount of any Note is prepaid or exchanged, such Note
shall, at the written request of the Company, be surrendered to the Company
for cancellation and shall not be reissued, and no Note shall be issued in lieu
of such Note.
2.5 Direct Payment. Notwithstanding any other provision contained in the
Notes or this Agreement, the Company will pay all sums becoming due on each Note
held by you or any subsequent Institutional Holder by wire transfer of
immediately available federal funds to such account as you or such subsequent
Institutional Holder has designated in Schedule I, or as you or such
subsequent Institutional Holder may otherwise designate by written notice to
the Company, in each case without presentment and without notations being
made thereon, except that any such Note so paid or prepaid in full
shall, at the written request of the Company, be surrendered to the Company
for cancellation. Any wire transfer shall identify such payment in the manner
set forth in Schedule I and shall identify the payment as principal, premium, if
any, and/or interest. You and any subsequent Institutional Holder of a Note to
which this Section 2.5 applies agree that, before selling or otherwise
transferring any such Note, you or it will make a notation thereon of the
aggregate amount of all payments of principal theretofore made and of the date
to which interest has been paid.
2.6 Allocation of Payments. If less than the entire principal amount of all
the Notes outstanding is to be paid, the Company will prorate the aggregate
principal amount to be paid among the outstanding Notes in proportion to
the unpaid principal.
2.7 Payments Due on Saturdays, Sundays and Holidays. In any case where the
date of any required prepayment of the Notes or any interest payment date on the
Notes or the date fixed for any other payment of any Note or exchange of any
Note is not a Business Day, then such payment, prepayment or exchange need not
be made on such date but may be made on the next preceding Business Day, with
the same force and effect as if made on the due date.
3. REPRESENTATIONS
3.1 Representations of the Guarantor and the Company. As an inducement to,
and as part of the consideration for, your purchase of the Notes pursuant to
this Agreement, each of the Guarantor and the Company represents and warrants
to you as follows:
(a) Corporate Organization and Authority. Each of the Guarantor and
the Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York, has all requisite corporate
power and authority to own and operate its Properties, to carry on its
business as now conducted and as presently proposed to be conducted, to enter
into and perform the Agreement and the Subordination Agreement and, in the
case of the Company, to issue and sell the Notes as contemplated in the
Agreement and in the case of the Guarantor, to issue the Guaranty Agreement.
(b) Qualification to Do Business. Each of the Guarantor and the Company
is duly licensed or qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction where the nature of
the business transacted by it or the character of its Properties owned or
leased makes such qualification or licensing necessary.
(c) Subsidiaries. The Guarantor has no Subsidiaries, as defined
in Section 5.1, except those listed in Annex I, which correctly sets forth
whether such Subsidiary is a Restricted Subsidiary and the jurisdiction of
incorporation and the percentage of the outstanding Voting Stock or equivalent
interest of each Subsidiary which is owned, of record or beneficially, by the
Guarantor and/or one or more Subsidiaries. Each Subsidiary has been duly
organized and is validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization and is duly licensed or qualified
and in good standing as a foreign corporation in each other jurisdiction
where the nature of the business transacted by it or the character of its
Properties owned or leased makes such qualification or licensing necessary. A
list of those jurisdictions wherein each Subsidiary is qualified to do business
is set forth in Annex I. Each Subsidiary has full corporate power and
authority to own and operate its Properties and to carry on its business as now
conducted and as presently proposed to be conducted. Each Subsidiary Guarantor
has all requisite corporate power and authority to issue its Subsidiary
Guarantee and to execute the Subordination Agreement. The Guarantor or each
Subsidiary has good and marketable title to all of the shares it purports to own
of the capital stock of each Subsidiary, as the case may be, free and clear in
each case of any Lien or encumbrance, and all such shares have been duly issued
and are fully paid and nonassessable.
(d) Financial Statements. The consolidated balance sheets of the Guarantor
and its Restricted Subsidiaries as of January 27, 1996 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended January 27, 1996, accompanied by the report and unqualified opinion
of Coopers & Lybrand, L.L.P., independent certified public accountants, copies
of which have heretofore been delivered to you, were prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein) and present fairly the
consolidated financial
condition and consolidated results of operations and cash flows of the Guarantor
and its Restricted Subsidiaries for and as of the end of each of such years.
The consolidated balance sheets of the Guarantor and its Restricted Subsidiaries
as of July 27, 1996 and July 29, 1995 and the related unaudited consolidated
condensed statements of income, stockholders' equity and cash flows for the six
months ended July 27, 1996 and July 29, 1995, copies of which have heretofore
been delivered to you, were prepared in accordance with generally accepted
accounting principles and present fairly the consolidated financial condition
of the Guarantor and its Restricted Subsidiaries as of such dates and the
consolidated results of their operations and cash flows for the periods then
ended, subject to customary year-end adjustments.
(e) No Contingent Liabilities or Adverse Changes. Neither the Guarantor nor
any of its Subsidiaries has any contingent liabilities which are material to
the Guarantor and its Subsidiaries taken as a whole other than as indicated on
the financial statements described in the foregoing paragraph (d) of this
Section 3.1, and since January 27, 1996, there have been no material adverse
changes in the condition, financial or otherwise, of the Guarantor and its
Subsidiaries except those occurring in the ordinary course of business.
(f) No Pending Litigation or Proceedings. There are no actions, suits
or proceedings pending or threatened against or affecting the Guarantor or any
of its Subsidiaries, at law or in equity or before or by any Federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which might result, either
individually or in the aggregate, in any material adverse change in the
business, Properties, operations or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole or on the Company's ability to
perform its obligations under this Agreement or the Notes or the Subordination
Agreement or on the Guarantor's ability to perform its obligations under this
Agreement or the Guaranty Agreement or the Subordination Agreement or on any
Subsidiary Guarantor's ability to perform its obligations under its Subsidiary
Guarantee or the Subordination Agreement.
(g) Compliance with Law. (i) Neither the Guarantor nor any of its
Subsidiaries is: (x) in default with respect to any order, writ, injunction or
decree of any court to which it is a named party; or (y) in default under
any law, rule, regulation, ordinance or order relating to its or their
respective businesses, the sanctions and penalties resulting from which defaults
described in clauses (x) and (y) might have a material adverse effect on the
business, Properties, operations, assets or condition, financial or otherwise,
of the Guarantor and its Subsidiaries taken as a whole, or on the Company's
ability to perform its obligations under this Agreement or the Notes or the
Subordination Agreement or on the Guarantor's ability to perform its
obligations under this Agreement or the Guaranty Agreement or the
Subordination Agreement or on any Subsidiary Guarantor's ability to perform
its obligations under its Subsidiary Guarantee or the Subordination Agreement.
(ii) Neither the Guarantor nor any Subsidiary nor any Affiliate is
an entity defined as a "designated national" within the meaning of the Foreign
Assets Control Regulations, 31 C.F.R. Chapter V, or for any other reason,
subject to any restriction or prohibition under, or is in violation of, any
Federal statute or Presidential Executive Order, or
any rules or regulations of any department, agency or administrative body
promulgated under any such statute or Order, concerning trade or other
relations with any foreign country or any citizen or national thereof or the
ownership or operation of any Property.
(h) Pension Reform Act of 1974. Based upon the representations of
the Purchasers set forth in Section 3.2, neither the purchase of the Notes by
you nor the consummation of any of the other transactions contemplated by this
Agreement is or will constitute a "prohibited transaction" within the meaning of
Section 4975 of the Internal Revenue Code of 1986, as amended (the "Code"), or
Section 406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Internal Revenue Service has issued a favorable determination
letter with respect to each "employee pension benefit plan," as defined in
Section 3 of ERISA, established, maintained or contributed to by the
Guarantor or any Subsidiary (except for any Plan which is unfunded and
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees) (a "Plan") that the
same is qualified under Section 401(a) and related provisions of the Code and
that each related trust or custodial account is exempt from taxation under
Section 501(a) of the Code. All Plans of the Guarantor or any Subsidiary comply
in all material respects with ERISA and other applicable laws. There exist with
respect to the Guarantor or any Subsidiary no "multi-employer plans," as defined
in the Multi-employer Pension Plan Amendments Act of 1980, for which a
material withdrawal or termination liability may be incurred. There exist with
respect to all Plans or trusts established or maintained by the Guarantor or any
Subsidiary: (i) no material accumulated funding deficiency within the meaning of
ERISA; (ii) no termination of any Plan or trust which would result in any
material liability to the Pension Benefit Guaranty Corporation ("PBGC") or any
"reportable event," as that term is defined in ERISA, which is likely to
constitute grounds for termination of any Plan or trust by the PBGC; and
(iii) no "prohibited transaction," as that term is defined in ERISA, which is
likely to subject any Plan, trust or party dealing with any such Plan or trust
to any material tax or penalty on prohibited transactions imposed by Section
4975 of the Code.
(i) Title to Properties. The Guarantor and each Subsidiary has (i) good
title in fee simple or its equivalent under applicable law to all the real
Property owned by it and (ii) good title to all other Property owned by it, in
each case free from all Liens except (x) those securing Indebtedness of the
Guarantor or a Subsidiary, which are listed in the attached Annex III and (y)
other Liens that would be permitted pursuant to Section 7.6.
(j) Leases. The Guarantor and each Subsidiary enjoy peaceful and
undisturbed possession under all leases under which the Guarantor or such
Subsidiary is a lessee or is operating. None of such leases contains any
provision which might materially and adversely affect the operation or use of
the Property so leased. All of such leases are valid and subsisting and
neither the Guarantor nor any Subsidiary is in default with respect to any
such leases which are material to the business, Properties, operations or
condition, financial or otherwise, of the Guarantor and its Subsidiaries taken
as a whole.
(k) Franchises, Patents, Trademarks and Other Rights. The Guarantor and
each Subsidiary have all franchises, permits, licenses and other authority
necessary to carry on their
businesses as now being conducted and as proposed to be conducted, and none is
in default under any of such franchises, permits, licenses or other authority
which are material to their respective businesses, Properties, operations or
condition, financial or otherwise. The Guarantor and each Subsidiary own or
possess all patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect to the foregoing necessary for the present
conduct of their businesses, without any known conflict with the rights of
others which might result in any material adverse change in their respective
businesses, Properties, operations or condition, financial or otherwise.
(l) Status of Notes and Sale of Notes. The Agreement, the Notes and
the Subordination Agreement have been duly authorized on the part of the
Company, have been duly executed and delivered by an authorized officer of the
Company and constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application relating to or
affecting the enforcement of the rights of creditors or by equitable principles,
regardless of whether enforcement is sought in equity or at law. The sale of
the Notes and compliance by the Company with all of the provisions of this
Agreement, of the Notes and of the Subordination Agreement (i) are within the
corporate powers of the Company, (ii) have been duly authorized by proper
corporate action, (iii) are legal, (iv) will not violate any provisions of any
law or regulation or order of any court, governmental authority or agency and
(v) will not result in any breach of any of the provisions of, or constitute a
default under, or result in the creation of any Lien on any Property of the
Guarantor or any Subsidiary under the provisions of, any charter document, by-
law, loan agreement or other agreement or instrument to which the Guarantor or
any Subsidiary is a party or by which any of them or their Property may be
bound.
(m) Guarantor Authorization. The Agreement, the Guaranty Agreement and
the Subordination Agreement have been duly authorized on the part of the
Guarantor, have been duly executed and delivered by an authorized officer of
the Guarantor and constitute the legal, valid and binding obligations of
the Guarantor, enforceable in accordance with their terms, except to the extent
that enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in equity or
at law. The compliance by the Guarantor with all of the provisions of this
Agreement, of the Guaranty Agreement and of the Subordination Agreement (i) are
within the corporate powers of the Guarantor, (ii) have been duly authorized
by proper corporate action, (iii) are legal, (iv) will not violate any
provisions of any law or regulation or order of any court, governmental
authority or agency and (v) will not result in any breach of any of the
provisions of, or constitute a default under, or result in the creation of any
Lien on any Property of the Guarantor or any Subsidiary under the provisions of,
any charter document, by-law, loan agreement or other agreement or instrument to
which the Guarantor or any Subsidiary is a party or by which any of them or
their Property may be bound.
(n) Subsidiary Guarantor Authorization. Each Subsidiary Guarantee and
the Subordination Agreement have been duly authorized on the part of each
Subsidiary
Guarantor has been duly executed and delivered by an authorized officer of
such Subsidiary Guarantor and constitute the legal, valid and binding
obligations of such Subsidiary Guarantor, enforceable in accordance with its
terms, except to the extent that enforcement thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
of general application relating to or affecting the enforcement of the
rights of creditors or by equitable principles, regardless of whether
enforcement is sought in equity or at law. The compliance by each Subsidiary
Guarantor with all of the provisions of its Subsidiary Guarantee (i) is within
the corporate powers of each Subsidiary Guarantor, (ii) has authorized by proper
corporate action, (iii) is legal, (iv) will not violate any provisions of any
law or regulation or order of any court, governmental authority or agency and
(v) will not result in any breach of any of the provisions of, or constitute a
default under, or result in the creation of any Lien on any Property of the
Guarantor or any Subsidiary under the provisions of, any charter document, by-
law, loan agreement or other agreement or instrument to which each the Guarantor
or any Subsidiary is a party or by which any of them or their Property may be
bound.
(o) No Defaults. No event has occurred and no condition exists which, upon
the issuance of the Notes, or the execution and delivery of this Agreement, the
Guaranty Agreement, the Subordination Agreement or the Subsidiary Guarantees,
would constitute an Event of Default, or with the lapse of time or the giving of
notice or both would become an Event of Default, under this Agreement. Neither
the Guarantor nor any Subsidiary is in default under any charter document, by-
law, loan agreement or other material agreement or material instrument to which
it is a party or by which it or its Property may be bound, nor has the Guarantor
nor any Subsidiary obtained any waivers with respect to any defaults under any
loan agreements or other material agreements or instruments.
(p) Governmental Consent. Neither the nature of the Guarantor or any of
its Subsidiaries, their respective businesses or Properties, nor any
relationship between the Guarantor or any of its Subsidiaries and any other
Person, nor any circumstances in connection with the offer, issue, sale or
delivery of the Notes is such as to require a consent, approval or
authorization of, or withholding of objection on the part of, or filing,
registration or qualification with, any governmental authority on the part
of the Company or the Guarantor or any Subsidiary Guarantor in connection
with the execution and delivery of this Agreement or any Subsidiary
Guarantor or the Guaranty Agreement or the offer, issue, sale or delivery of
the Notes.
(q) Taxes. All tax returns required to be filed by the Guarantor or
any Subsidiary in any jurisdiction have been filed or appropriate extensions
have been filed with respect thereto, and all taxes, assessments, fees and
other governmental charges upon the Guarantor or any Subsidiary, or upon any of
their respective Properties, income or franchises, which are due and payable,
have been paid timely or within appropriate extension periods or are being
contested in good faith by appropriate proceedings. The Guarantor does not
know of any proposed additional tax assessment against it or any
Subsidiary for which adequate provision has not been made on its books. The
federal income tax liability of the Guarantor and its Subsidiaries has been
finally determined by the Internal Revenue Service and satisfied for all taxable
years up to and including the taxable year ended January 31, 1987 and no
material controversy in respect of additional taxes due since such date is
pending or to the Guarantor's knowledge threatened. The provisions
for taxes on the books of the Guarantor and each Subsidiary are adequate for
all open years and for the current fiscal period.
(r) Status under Certain Statutes. Neither the Guarantor nor any Subsidiary
is: (i) a "public utility company" or a "holding company," or an "affiliate"
or a "subsidiary company" of a "holding company," or an "affiliate" of
such a "subsidiary company," as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended, or (ii) a "public utility" as defined
in the Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
(s) Private Offering. Neither the Guarantor nor the Company nor
Chase Securities Inc. (the only Person authorized or employed by the Guarantor
or the Company as agent, broker, dealer or otherwise in connection with the
offering of the Notes or any similar security of the Company or the Guarantor)
has offered any of the Notes or any similar security of the Company or the
Guarantor for sale to, or solicited offers to buy any thereof from, or
otherwise approached or negotiated with respect thereto with, any prospective
purchaser, other than not more than 3 institutional investors, including the
Purchasers, each of whom was offered all or a portion of the Notes at private
sale for investment. Neither the Company nor the Guarantor nor anyone acting on
its authorization will offer the Notes or any part thereof or any similar
securities for issue or sale to, or solicit any offer to acquire any of the
same from, anyone so as to bring the issuance and sale of the Notes within
the provisions of Section 5 of the Securities Act.
(t) Effect of Other Instruments. Neither the Guarantor nor any Subsidiary
is bound by any agreement or instrument or subject to any charter or other
corporate restriction which materially and adversely affects the business,
Properties, operations, or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole or the Company's ability to
perform its obligations under this Agreement or the Notes or the
Subordination Agreement or the Guarantor's ability to perform its
obligations under this Agreement or the Guaranty Agreement or the
Subordination Agreement or any Subsidiary Guarantor's ability to perform its
obligations under its Subsidiary Guarantee or the Subordination Agreement.
(u) Use of Proceeds. The Company will apply the proceeds from the sale of
the Notes to reimburse the Guarantor with respect to bank Indebtedness incurred
by the Guarantor and loaned to the Company to purchase substantially all of
the assets of a company formerly known as THC Systems, Inc. The Guarantor will
apply the proceeds paid by the Company to it pursuant to the preceding
sentence to repay the bank Indebtedness incurred in connection with the THC
Acquisition. None of the transactions contemplated in this Agreement
(including, without limitation thereof, the use of the proceeds from the sale
of the Notes) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulations issued pursuant thereto, including, without
limitation, Regulations G, T, U and X of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II). Neither the Guarantor nor any
Subsidiary owns or intends to carry or purchase any "margin stock" within the
meaning of Regulation G, and none of the proceeds from the sale of the Notes
will be used to purchase or carry or refinance any
borrowing the proceeds of which were used to purchase or carry any "margin
stock" or "margin security" in violation of Regulations G, T, U or X.
(v) Condition of Property. All of the facilities of the Guarantor and each
of its Subsidiaries are in sound operating condition and repair except
for facilities being repaired in the ordinary course of business or facilities
which individually or in the aggregate are not material to the business,
Properties, operations, or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole.
(w) Books and Records. The Guarantor and each of its Subsidiaries (i)
maintain books, records and accounts in reasonable detail which accurately and
fairly reflect their respective transactions and business affairs, and (ii)
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in accordance with
management's general or specific authorization and to permit preparation of
financial statements in accordance with generally accepted accounting
principles.
(x) Full Disclosure. Neither the Private Placement Memorandum dated
October 1996 which has heretofore been delivered to you (including but not
limited to the Guarantor's Annual Report on Form 10-K for the year ended January
27, 1996, its Quarterly Reports on Form 10-Q for the periods ended July 27,
1996 and July 29, 1995, its Current Reports on Form 8-K dated August 29, 1996
and November 4, 1996 and its Annual Report to Stockholders for the year ended
January 27, 1996), the financial statements referred to in paragraph (d) of
this Section 3.1, the pro forma financial information provided to you dated
October 15, 1996 with respect to the possible sale of Camden Wire Co., Inc.,
nor this Agreement, nor any other statement or document furnished by the
Company or the Guarantor to you in connection with the negotiation of the
sale of the Notes, taken together, contain any untrue statement of a material
fact or omit a material fact necessary to make the statements contained therein
or herein not misleading in light of the circumstances under which they were
made. There is no fact known, or which, with reasonable diligence would be
known, by the Guarantor or the Company which the Company or the Guarantor has
not disclosed to you in writing which has a material adverse effect on or, so
far as the Company or the Guarantor can now foresee, will have a material
adverse effect on the business, Property, operations or condition, financial
or otherwise, of the Guarantor and its Subsidiaries taken as a whole or the
ability of the Company to perform its obligations under and in respect of this
Agreement and the Notes or the ability of the Guarantor to perform its
obligations under and in respect of this Agreement and the Guaranty Agreement or
each Subsidiary Guarantor's ability to perform the obligations under its
Subsidiary Guarantee.
(y) Environmental Compliance. The Guarantor and each Subsidiary i) is in
compliance in all material respects with all applicable environmental,
transportation, health and safety statutes and regulations, including, without
limitation, regulations promulgated under the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. 6901 et seq., and (ii) has not acquired, incurred or
assumed, directly or indirectly, any material contingent liability in connection
with the release or storage of any toxic or hazardous waste or substance into
the environment. The Guarantor and its Subsidiaries have not acquired, incurred
or assumed, directly or indirectly, any material contingent liability in
connection with a release or other
discharge of any hazardous, toxic or waste material, including petroleum, on,
in, under or into the environment surrounding any Property owned, used or leased
by any of them.
3.2 Representations of the Purchasers. (a) As an inducement to, and as part
of the Company's consideration for the sale of the Notes pursuant to this
Agreement, each of you represents, respectively, and in entering into this
Agreement the Company understands, that (i) you are an Institutional Holder,
(ii) you are acquiring Notes for the purpose of investment and for your own
account and not with a view to the distribution thereof; provided that the
disposition of your Property shall at all times be and remain within your
control, subject, however, to compliance with Federal securities laws. You
acknowledge that the Notes have not been registered under the Securities Act or
the laws of any state and you understand that the Notes must be held
indefinitely unless they are subsequently registered under the Securities Act or
an exemption from such registration is available. You have been advised that
the Company does not contemplate registering, and is not legally required to
register, the Notes under the Securities Act.
(b) Each of you represents that at least one of the following
statements is an accurate representation as to each source of funds (a "Source")
to be used by you to pay the purchase price of, or to be attributed to the
holding of, the Notes to be purchased by you hereunder:
(i) if you are an insurance company, the Source constitutes
assets allocated to any separate account maintained by you (A) in which no
employee benefit plan (or its related trust) has any interest or (B) which
is maintained solely in connection with your fixed contractual obligations under
which the amounts payable, or credited, to such plan and to any participant or
beneficiary of such plan (including any annuitant) are not affected in any
manner by the investment performance of the separate account; or
(ii) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction Exemption ("PTE")
90-1 (issued January 29, 1990), or (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 (issued July 12, 1991) and, except as you
have disclosed to the Company in writing pursuant to this paragraph (b), no
employee benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund, and the other
applicable conditions of PTEs 90-1 or 91-38 have been satisfied; or
(iii) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the QPAM
Exemption), no employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other employee benefit
plans established or maintained by the same employer or by an affiliate (within
the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by
the same employee organization and managed by such QPAM, exceed 20% of the
total client assets managed by such QPAM; all conditions of the QPAM Exemption
are satisfied; neither the QPAM nor a person controlling or controlled
by the QPAM (applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (A) the identity of
such QPAM and (B) the names of all employee benefit plans whose assets are
included in such investment fund have been disclosed to the Company in writing
pursuant to this paragraph (iii); or
(iv) the Source is a governmental plan; or
(v) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit plans,
each of which has been identified to the Company in writing pursuant to this
paragraph (v); or
(vi) the Source does not include assets of any employee benefit
plan, other than a plan exempt from the coverage of ERISA; or
(vii) if you are an insurance company and the Source includes
assets of your general account, the acquisition of the Notes by you is exempt
under PTE 95-60 (issued July 12, 1995).
[In the event the Company reasonably determines that it is a party in interest
with respect to any employee benefit plan identified by you pursuant to
paragraph (ii) or paragraph (v) of this Section 3.2(b), no assets of such
employee benefit plan may be used by you to pay any portion of the purchase
price of the Notes to be purchased by you hereunder.]
As used in this Section 3.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account" shall have
the respective meanings assigned to such terms in Section 3 of ERISA.
4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date shall be subject
to the performance by each of the Guarantor and the Company of its
agreements hereunder which are to be performed at or prior to the time of
delivery of the Notes, and to the following conditions to be satisfied on or
before the Closing Date:
4.1 Representations and Warranties. The representations and warranties
of the Guarantor and the Company contained in this Agreement or otherwise
made in writing in connection herewith shall be true and correct on or as of
the Closing Date and each of the Company and the Guarantor shall have
delivered to you a certificate to such effect, dated the Closing Date and
executed by the President or the chief financial officer of the Company and the
Guarantor, respectively.
4.2 Legal Opinions. You shall have received from Gardner, Carton & Douglas,
who is acting as your special counsel in this transaction, and from
Catherine H. Suttmeier, General Counsel to the Company, the Guarantor and
the Subsidiary Guarantors and from Shearman & Sterling, special counsel for
the Company, the Guarantor and the Subsidiary Guarantors, their respective
opinions, dated as of such Closing Date, in form and substance
satisfactory to you and covering substantially the matters set forth or
provided in the attached Exhibit B.
4.3 Events of Default. No event shall have occurred and be continuing
on the Closing Date which would constitute an Event of Default, as
defined in Section 8.1, or with notice or lapse of time or both would become
such an Event of Default, and the each of the Company and the Guarantor shall
have delivered to you a certificate to such effect, dated the Closing Date and
executed by the President or the chief financial officer or the Senior Vice
President, Finance of the Company and the Guarantor, respectively.
4.4 Payment of Fees and Expenses. The Company shall have paid all
reasonable fees, expenses, costs and charges, including the fees and expenses
of your special counsel, incurred by you through the Closing Date and incident
to the proceedings in connection with, and transactions contemplated by, this
Agreement and the Notes.
4.5 Legality of Investment. Your acquisition of the Notes shall constitute
a legal investment as of the Closing Date under the laws and regulations
of each jurisdiction to which you may be subject (without resort to any
"basket" or "leeway" provision which permits the making of an investment
without restriction as to the character of the particular investment being
made), and such acquisition shall not subject you to any penalty or other
onerous condition in or pursuant to any such law or regulation.
4.6 Private Placement Number. A private placement number shall have been
obtained from Standard & Poor's CUSIP Service Bureau (in cooperation with the
Securities Valuation Office of the National Association of Insurance
Commissioners).
4.7 Sale of All Notes. Contemporaneously with the sale of the Notes to
you, the Company will complete and close the sale of Notes being purchased by
each of the Purchasers set forth in Schedule I hereto.
4.8 THC Acquisition. Prior to or contemporaneously with the sale of the
Notes, the Guarantor shall consummate the THC Acquisition and shall provide to
you evidence satisfactory to you and your special counsel of the
consummation of such acquisition.
4.9 Additional Agreements. The Company and the Guarantor will deliver to you
executed copies of (a) the Subsidiary Guarantees, (b) the Subordination
Agreement, (c) the Sharing Agreement and (d) the First Amendment to 1992 Note
Agreement dated as of October 15, 1996, each in form and substance satisfactory
to you and your counsel.
4.10 Proceedings and Documents. All proceedings taken in connection
with the transactions contemplated by this Agreement, and all documents
necessary to the consummation
of such transactions shall be satisfactory in form and substance to you and
your special counsel, and you and your special counsel shall have received
copies (executed or certified as may be appropriate) of all legal documents
or proceedings which you and they may reasonably request.
5. INTERPRETATION OF AGREEMENT
5.1 Certain Terms Defined. The terms hereinafter set forth when used in
this Agreement shall have the following meanings:
Affiliate - Any Person (other than a Subsidiary Guarantor) (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Guarantor, (ii) which
beneficially owns or holds 5% or more of any class of the Voting Stock of the
Guarantor or any Subsidiary or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% of the equity interest) of
which is beneficially owned or held by the Guarantor or a Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
Agreement - As defined in Section 1.1.
Bank Agreement - That Credit Agreement dated as of January 19, 1996,
among Oneida Ltd., The Chase Manhattan Bank, N.A., as Agent and the banks
signatory to such agreement, as such agreement may be from time to time amended.
The term "Bank Agreement" shall also include replacement or additional credit
agreements entered into by the Guarantor or any Restricted Subsidiary with
banks or other institutional lenders.
Banks - The bank lenders to the Guarantor pursuant to the Bank
Agreement.
Business Day - Any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, New York; Los Angeles, California; or
Chicago, Illinois are required or authorized to be closed.
Camden Disposition - The sale, lease, transfer or other disposition of
stock or assets of Camden Wire Co., Inc. prior to January 31, 1999 (i)
for cash consideration, net of any continuing or contingent liabilities equal
to book value of Camden Wire Co., Inc. at the time of such sale, plus or
minus ten percent (10%) and (ii) for all of the capital stock of Camden Wire
Co., Inc. or all of its assets, as the case may be.
Capitalized Lease - Any lease the obligation for Rentals with respect
to which, in accordance with generally accepted accounting principles, would be
required to be capitalized on a balance sheet of the lessee or for which the
amount of the asset and liability thereunder, as if so capitalized, would be
required to be disclosed in a note to such balance sheet.
Change of Control - The occurrence of any one or more of the following:
(a) any Person (other than an Executive Officer) or a group of
Persons (other than a group of Persons consisting solely of Executive
Officers) shall purchase or otherwise acquire, directly or indirectly, in one or
more transactions, beneficial ownership of securities representing 20% or more
of the combined voting power of the Guarantor's Voting Stock, determined on the
date prior to the date of such purchase or acquisition (or, if there is more
than one transaction, the date of the last such purchase or acquisition);
(b) the Guarantor shall convey, transfer, lease or otherwise
dispose of all or substantially all Consolidated Total Assets to any Person
(other than a Majority-Owned Restricted Subsidiary);
(c) there shall occur, in any consecutive twenty-four month
period, a replacement of or change in a majority of the members of the Board of
Directors of the Guarantor, and such replacement shall not have been initiated
by the Board of Directors which is incumbent at the time of commencement of such
twenty-four month period;
(d) the Guarantor shall merge or consolidate into any other
corporation other than into a Majority-Owned Restricted Subsidiary (and the
Company shall not be the surviving corporation) in a transaction in which more
than 20% of the voting power of the Guarantor's Voting Stock (determined on the
date prior to the date of the consummation of such transaction) is exchanged;
(e) the Guarantor or any Restricted Subsidiary shall purchase or
otherwise acquire, directly or indirectly, in one or more transactions,
beneficial ownership of Voting Stock of the Guarantor, if, after giving
effect to such purchase or acquisition, the Guarantor (together with all
Restricted Subsidiaries) shall have acquired, during any period of twelve
consecutive months, beneficial ownership of an aggregate of 30% or more of the
Voting Stock of the Guarantor outstanding on the date immediately prior to the
last such purchase or acquisition during such period (or, if there is more
than one transaction, the date of the last such purchase or acquisition); or
(f) the Guarantor shall make a distribution of cash, securities
or other Properties (other than regular periodic cash dividends at a rate which
is substantially consistent with past practice, including with respect to
increases in dividends, and other than Common Stock or rights to acquire Common
Stock) to holders of capital stock (including by means of dividend,
reclassification, recapitalization or otherwise) which, together with all other
such distributions during the 365-day period preceding the date of such
distribution, has an aggregate fair market value in excess of an amount equal
to 30% of the fair market value of the Voting Stock of the Guarantor
outstanding on the date immediately prior to such distribution.
Closing Date - As defined in Section 1.2.
Code - As defined in Section 3.1(h).
Consolidated Adjusted Net Income - 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 gains or losses on the sale or other disposition of
plant, Property and equipment which gains or losses exceed, in the aggregate,
$100,000 during any fiscal year and any taxes on such excluded gains and
any tax deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any 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 Current Assets and Consolidated Current Liabilities - As
of the date of any determination thereof, such assets and liabilities of the
Guarantor and its Restricted Subsidiaries as shall be determined on a
consolidated basis in accordance with generally accepted accounting principles
to constitute current assets and current liabilities, respectively.
Consolidated Income Available for Interest Charges - For any period,
the sum (without duplication) of (i) Consolidated Adjusted Net Income for such
period, plus (ii) (to the extent deducted in determining Consolidated Adjusted
Net Income), all provisions for any federal, state, or other income taxes made
by the Guarantor and its Subsidiaries during such period and (iii) Consolidated
Interest Charges for such period.
Consolidated Interest Charges - For any period, the interest expense on
all Indebtedness (including the interest component of Rentals under Capitalized
Leases and capitalized interest), of the Guarantor and its
Restricted Subsidiaries on a consolidated basis for such period.
Consolidated Tangible Assets - Consolidated Total Assets less the sum
of (i) deferred assets, determined in accordance with generally accepted
accounting principles on a consolidated basis, other than prepaid insurance,
prepaid taxes, deferred taxes and deferred pension expense, (ii) all goodwill,
trade names, trademarks, patents, organization expense, unamortized debt
discount and expense and other similar intangibles properly classified as
intangibles in accordance with generally accepted accounting principles and
(iii) Restricted Investments.
Consolidated Tangible Net Worth - Stockholders' equity of the Guarantor
and its Restricted Subsidiaries on a consolidated basis, determined in
accordance with generally accepted accounting principles less the sum of (i) all
goodwill, trade names, trademarks, patents, organization expense, unamortized
debt discount and similar intangibles properly classified as intangibles
in accordance with generally accepted accounting principles and (ii) Restricted
Investments.
Consolidated Total Assets - The consolidated total assets of the
Guarantor and its Restricted Subsidiaries determined in accordance with
generally accepted accounting principles.
Consolidated Total Capitalization - The sum of (i) Consolidated
Tangible Net Worth and (ii) Funded Debt of the Guarantor and its Restricted
Subsidiaries.
Current Debt - All Indebtedness which by its terms matures on demand or
one year or less from the date of creation thereof, including current maturities
of Funded Debt.
Determination Date - The day 2 Business Days before the date fixed for
a prepayment pursuant to a notice required by Sections 2.2(b) or 2.3 or the day
2 Business Days before the date of declaration pursuant to Section 8.2.
ERISA - As defined in Section 3.1(h).
Event of Default - As defined in Section 8.1.
Exchange Act - The Securities Exchange Act of 1934, as amended, and as
it may be further amended from time to time.
Executive Officers - The Persons listed as "executive officers" in the
most recent Form 10-K of the Guarantor filed pursuant to the Exchange Act.
Funded Debt - All Indebtedness owed or guaranteed which by its terms
matures more than one year from its date of creation or which may be renewed or
extended at the option of the obligor for more than a year from such date,
whether or not theretofore renewed or extended, excluding current maturities of
such obligations.
Guaranties - All obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) of
a Person guaranteeing or, in effect, guaranteeing any Indebtedness, dividend
or other obligation, of any other Person in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through
an agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any Property or assets constituting security
therefor, (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (iii) to lease Property
or to purchase securities or other Property or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation, or (iv)
otherwise to assure the owner of the Indebtedness or obligation against loss
in respect thereof. For the purposes of all computations made under this
Agreement, a Guaranty in respect of any Indebtedness for borrowed money
shall be deemed to be Indebtedness equal to the principal amount of such
Indebtedness for borrowed money which has been guaranteed, and a Guaranty
in respect of any other obligation or liability or any dividend shall be deemed
to be Indebtedness equal to the maximum aggregate amount
of such obligation, liability or dividend.
Guaranty Agreement - The Guaranty Agreement dated as of November 26,
1996 between the Guarantor and the Purchasers substantially in the form
attached hereto as Exhibit C.
Indebtedness - (i) All items of borrowed money, including Capitalized
Leases, which in accordance with generally accepted accounting principles
would be included in determining total liabilities as shown on the liability
side of a balance sheet as of the date at which Indebtedness is to be
determined, (ii) all Guaranties (other than Guaranties of Indebtedness of the
Guarantor by a Restricted Subsidiary Guarantor in accordance with Section 7.15
or of a Restricted Subsidiary Guarantor by the Guarantor), letters of credit
and endorsements (other than of notes, bills and checks presented to banks for
collection or deposit in the ordinary course of business), in each case to
support Indebtedness of other Persons; and (iii) all items of borrowed money
secured by any mortgage, pledge or Lien existing on Property owned subject to
such mortgage, pledge, or Lien, whether or not the borrowed money secured
thereby shall have been assumed by the Guarantor or any Restricted
Subsidiary. Indebtedness of the Guarantor and its Restricted Subsidiaries at
November 26, 1996 is set forth in Annex II hereto.
Institutional Holder - Any bank, trust company, insurance company,
pension fund, mutual fund or other similar financial institution, including,
without limiting the foregoing, any "qualified institutional buyer" within
the meaning of Rule 144A under the Securities Act, which is or becomes a holder
of any Note.
Investments - All investments made, in cash or by delivery of Property,
directly or indirectly, in any Person, whether by acquisition of shares of
capital stock, indebtedness or other obligations or securities or by loan,
advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in Property to be
used or consumed in the ordinary course of business.
Lien - Any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind, including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to file any financing statement under
the Uniform Commercial Code of any jurisdiction in connection with any of the
foregoing.
Long-Term Lease - Any lease of real or personal Property (other than
a Capitalized Lease) having an original term of more than three years,
including any period for which the lease may be renewed at the option of
the lessor, whether or not theretofore renewed.
Majority-Owned - When applied to a Restricted Subsidiary, any
Restricted Subsidiary 80% of the Voting Stock of which is owned by the Guarantor
and/or its Majority-Owned Restricted Subsidiaries.
1992 Note Agreement - That Note Agreement dated as of January 1, 1992
between the Guarantor and the Purchasers which are signatories thereto.
1992 Notes - The senior notes issued pursuant to the 1992 Note
Agreement.
Noteholder - Any holder of a Note.
Notes - As defined in Section 1.1.
PBGC - As defined in Section 3.1(h).
Plan - As defined in Section 3.1(h).
Person - Any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Priority Indebtedness - Without duplication (i) Funded Debt and Current
Debt of Restricted Subsidiaries (except to the Guarantor or a Majority-Owned
Restricted Subsidiary Guarantor) in each case unsecured by Liens, (ii) the
aggregate amount of Guaranties by Restricted Subsidiaries (except of
Indebtedness of the Guarantor in accordance with Section 7.15 or a Majority-
Owned Restricted Subsidiary in accordance with Section 7.15), (iii) Funded Debt
and Current Debt of the Guarantor and its Restricted Subsidiaries (except to
the Guarantor or a Majority-Owned Restricted Subsidiary Guarantor) secured by
any Lien on the Property of the Guarantor or any Restricted Subsidiary and (iv)
the redemption or liquidation value (whichever is higher) of all equity
securities of Restricted Subsidiaries (other than common stock) which are not
legally and beneficially owned by the Guarantor or its Restricted Subsidiaries.
Property - Any real or personal or tangible or intangible asset.
Reinvestment Yield - The sum of (i) the yield set forth on page "USD"
of the Bloomberg Financial Markets Service at 11:00 a.m., Central Time on the
Determination Date opposite the maturity of the U.S. Treasury
Security corresponding to the Weighted Average Life to Maturity, rounded to
the nearest month, of the principal amount of the Notes to be prepaid, plus
(ii) .50 of 1% with respect to Notes to be prepaid pursuant to Section 2.2(a)
or (b) or Notes the payment of which has been accelerated with premium
pursuant to Section 8.2. If no maturity exactly corresponding to such
rounded Weighted Average Life to Maturity shall appear therein, yields for
the two most closely corresponding published maturities (one of which occurs
prior and the other subsequent to the Weighted Average Life to Maturity)
shall be calculated pursuant to the foregoing sentence and the Reinvestment
Yield shall be interpolated from such yields on a straight-line basis
(rounding in each of such relevant periods, to the nearest month).
Rentals - As of the date of any determination thereof, all fixed
payments (including all payments which the lessee is obligated to make to the
lessor on termination of the lease or surrender of the Property) payable by
the Guarantor or a Restricted Subsidiary, as lessee or sublessee under a lease
of real or personal Property, but exclusive of any amounts required to be paid
by the Guarantor or a Restricted Subsidiary (whether or not designated as
rents or additional rents) on account of maintenance, repairs, insurance,
taxes, assessments, amortization and similar charges. Fixed rents under any
so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be paid
by the lessee regardless of sales volume or gross revenues.
Restricted Investments - Any Investment, except for:
(a) Investments in Restricted Subsidiary Guarantors;
(b) Investments made in the ordinary course of business in
Property and assets to be used in the ordinary course of business of the
Guarantor and its Restricted Subsidiaries;
(c) Investments in Current Assets arising from the sale of goods
and services in the ordinary course of business of the Guarantor and its
Restricted Subsidiaries;
(d) advances to and Guaranties of loans to employees of the
Guarantor and its Restricted Subsidiaries for expenses incurred in the ordinary
course of business;
(e) Investments in direct obligations of the United States or
any instrumentality thereof, provided that such obligations have a final
maturity not in excess of one year from the date of acquisition thereof;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof issued by (i) Chase Manhattan Bank or
(ii) in the case of any other bank, a bank organized under the laws of the
United States or any state thereof, having capital, surplus and undivided
profits aggregating at least $100,000,000 and whose long-term corporate debt
is, at the time of acquisition thereof by the Guarantor or any Subsidiary,
accorded a rating of "A" or better by Moody's Investors Service, Inc., or "A" or
better by Standard & Poor's Ratings Group;
(g) Investments in commercial paper maturing no more than 270
days from the date of issuance issued by any corporation organized under the
laws of the United States or any state thereof, rated in the highest category
by Moody's Investors Service, Inc. or Standard & Poor's Ratings Group;
(h) Investments in money market funds registered under the
Investment Company Act of 1940 which invest in securities which, in the
aggregate, have an average rating of "A" or better (or an equivalent) by Moody's
Investors Services, Inc. or Standard & Poor's Rating Group;
(i) Investments in tax-exempt municipal bonds maturing not more
than one year from the date of issue and which bear at least a MIG-1 rating; and
(j) Guaranties by the Guarantor or the Company of Long-Term
Leases of Majority-Owned Restricted Subsidiaries.
Restricted Subsidiary - Any Subsidiary (i) which is organized under the
laws of the United States, Puerto Rico, Mexico, Canada or a member of the
European Union or a jurisdiction thereof, (ii) which conducts substantially all
of its business and payments within the United States, Puerto Rico, Canada,
Mexico or any member of the European Union, (iii) a majority of each class of
capital stock of which is legally and beneficially owned by the Guarantor or a
Restricted Subsidiary or (iv) which is designated as a "Restricted Subsidiary in
Annex I hereto or in a written notice provided to each Noteholder. The Company
and each Restricted Subsidiary which issues a Subsidiary Guarantee shall, as
long as such Subsidiary Guarantee remains in effect, at all times remain a
Restricted Subsidiary.
Restricted Subsidiary Guarantor. Any Subsidiary Guarantor which is a
Restricted Subsidiary.
Securities Act - The Securities Act of 1933, as amended, and as it may
be further amended from time to time.
Sharing Agreement - The Sharing Agreement dated as of November 26, 1996
between the Banks and the Purchasers substantially in the form attached
hereto as Exhibit F.
Subordination Agreement - That Subordination Agreement dated as of
November 26, 1996 providing that all Indebtedness owed by each Subsidiary
Guarantor to the Parent is subordinated to the prior payment of
Indebtedness owed to the Noteholders under this Agreement and the Subsidiary
Guarantees substantially in the form attached hereto as Exhibit E.
Subsidiary - Any corporation of which more than 50% of the outstanding
shares of Voting Stock are owned or controlled by the Guarantor or one or
more Subsidiaries.
Subsidiary Guarantees - The Guarantee Agreements substantially in the
form attached as Exhibit D hereto executed by each Subsidiary Guarantor.
Subsidiary Guarantors - Each of Buffalo China, Inc., Camden Wire Co.,
Inc. and each Restricted Subsidiary created or acquired after January 19,
1996, which becomes a "Guarantor" as such term is defined in the Bank Agreement
or which is required to issue a Subsidiary Guarantee Agreement pursuant to
Section 7.14.
THC Acquisition - The acquisition by the Company of assets of a
company formerly known as THC Systems, Inc. pursuant to that Asset Purchase
Agreement dated August 29, 1996.
Voting Stock - Capital stock of any class of a corporation having power
to vote for the election of members of the board of directors of such
corporation, or persons performing similar functions (whether or not at the
time stock of any class shall have or might have special voting powers or
rights by reason of the happening of any contingency).
Weighted Average Life to Maturity - As applied to any prepayment of
principal of the Notes, at any date, the number of years obtained by dividing
(a) the then outstanding principal amount of the Notes to be prepaid into (b)
the sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity, or other required payment,
including payment at final maturity, foregone by such prepayment by (ii) the
number of years (calculated to the nearest 1/12th) which will elapse between
such date and the making of such payment.
Wholly-Owned Restricted Subsidiary - When applied to a Restricted
Subsidiary, any Restricted Subsidiary 100% of the Voting Stock of which is
owned by the Guarantor or its Wholly-Owned Restricted Subsidiaries.
Terms which are defined in other Sections of this Agreement shall have
the meanings specified therein.
5.2 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with
generally accepted accounting principles in force at the time of determination,
except where such principles are inconsistent with the requirements of this
Agreement.
5.3 Effect of FASB 106. In computing compliance with the covenants set forth
in this Agreement, any accrual of liabilities for unfunded post-retirement
medical benefit plans of the Guarantor and its Restricted Subsidiaries on a
consolidated basis resulting from the Statement of Financial Accounting
Standards Board FAS No. 106 shall be disregarded.
5.4 Valuation Principles. Except where indicated expressly to the contrary
by the use of terms such as "fair value," "fair market value" or "market
value," each asset, each liability and each capital item of any Person, and
any quantity derivable by a computation involving any of such assets,
liabilities or capital items, shall be taken at the net book value thereof
for all purposes of this Agreement. "Net book value", for purposes of Section
7.10 hereof, with respect to any asset, liability or capital item of any Person
shall mean the amount at which the same is recorded or, in accordance with
generally accepted accounting principles, should have been recorded in the books
of account of such Person, as reduced by any reserves which have been or, in
accordance with generally accepted accounting principles, should have been set
aside with respect thereto, without giving effect to any write-up, write-down
or write-off, relating thereto which was made after the date of this Agreement.
5.5 Direct or Indirect Actions. Where any provision in this Agreement refers
to action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.
6. AFFIRMATIVE COVENANTS
Each of the Company and the Guarantor agrees that, for so long as any
amount remains unpaid on any Note:
6.1 Corporate Existence. The Guarantor will maintain and preserve, and
will cause each Subsidiary to maintain and preserve, its corporate existence and
right to carry on its business and use, and cause each Subsidiary to use, its
best efforts to maintain, preserve, renew and extend all of its rights,
powers, privileges and franchise necessary to the proper conduct of its
business; provided, however, that the foregoing shall not prevent any
transaction permitted by Sections 7.9 or 7.10.
6.2 Insurance. The Guarantor will insure and keep insured at all times all
of its Properties and all of its Subsidiaries' Properties which are of an
insurable nature and of the character usually insured by companies
operating similar Properties, against loss or damage by fire and from other
causes customarily insured against by companies engaged in similar businesses
in such amounts as are usually insured against by such companies. The Guarantor
also will maintain for itself and its Subsidiaries at all times with
financially sound and reputable insurers adequate insurance against loss or
damage from such hazards and risks to the person and Property of others as are
usually insured against by companies operating Properties similar to the
Properties of the Guarantor and its Subsidiaries. All such insurance shall
be carried with financially sound and reputable insurers accorded a rating of
A-XII or better by A.M. Best Company, Inc. A summary of insurance presently in
force is contained in the attached Annex IV.
6.3 Taxes, Claims for Labor and Materials. The Guarantor will pay and
discharge when due, and will cause each Subsidiary to pay and discharge when
due, all taxes, assessments and governmental charges or levies imposed upon
it or its Property or assets, or upon Properties leased by it (but only to
the extent required to do so by the applicable lease), prior to the date on
which penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien upon its Property or assets, provided that neither the
Guarantor nor any Subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim, the payment of which is being contested in
good faith and by proper proceedings that will stay the forfeiture or sale
of any Property and with respect to which adequate reserves are maintained in
accordance with generally accepted accounting principles.
6.4 Maintenance of Properties. The Guarantor will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
Properties (whether owned in fee or a leasehold interest) in good repair and
working order, ordinary wear and tear excepted, and from time to time will
make all necessary repairs, replacements, renewals and additions.
6.5 Maintenance of Records. The Guarantor will keep, and will cause
each Subsidiary to keep, at all times proper books of record and account in
which full, true and correct entries will be made of all dealings or
transactions of or in relation to the business and affairs of
the Guarantor or such Subsidiary, in accordance with generally accepted
accounting principles consistently applied throughout the period involved
(except for such changes as are disclosed in such financial statements or in the
notes thereto and concurred in by the independent certified public accountants),
and the Guarantor will, and will cause each Subsidiary to, provide reasonable
protection against loss or damage to such books of record and account.
Financial Information and Reports. The Guarantor will furnish to you and to
any other Institutional Holder (in duplicate if you or such other holder so
request), the following:
(a) As soon as available and in any event within 45 days after the end
of each of the first three quarterly accounting periods of each fiscal year of
the Guarantor, a consolidated balance sheet of the Guarantor and its
Restricted Subsidiaries as of the end of such period and consolidated statements
of earnings and cash flows of the Guarantor and its Restricted Subsidiaries for
the periods beginning on the first day of such fiscal year and the first
day of such quarterly accounting period and ending on the date of such balance
sheet, setting forth in comparative form the corresponding consolidated
figures for the corresponding periods of the preceding fiscal year, all in
reasonable detail prepared in accordance with generally accepted accounting
principles consistently applied throughout the period involved (except for
changes disclosed in such financial statements or in the notes thereto and
concurred in by the Guarantor's independent certified public accountants) and
certified by the chief financial officer or chief accounting officer or
Senior Vice President, Finance of the Guarantor (i) outlining the basis of
presentation, and (ii) stating that the information presented in such
statements presents fairly the financial condition of the Guarantor and its
Subsidiaries and the results of operations for the period, subject to customary
year-end audit adjustments; provided that so long as the Guarantor shall file a
quarterly report on Form 10-Q or any similar form with the Securities and
Exchange Commission or any successor agency which contains the information set
forth in this paragraph (a), the requirements of this paragraph (a) shall be
satisfied by forwarding Form 10-Q to the holder of the Notes within such 45-day
period;
(b) As soon as available and in any event within 90 days after the
last day of each fiscal year a consolidated and a consolidating balance
sheet of the Guarantor and its Restricted Subsidiaries as of the end of such
fiscal year and the related audited consolidated and consolidating
statements of earnings, stockholders' equity and cash flows for such fiscal
year, in each case setting forth in comparative form figures for the
preceding fiscal year, all in reasonable detail, prepared in accordance
with generally accepted accounting principles consistently applied
throughout the period involved (except for changes disclosed in such
financial statements or in the notes thereto and concurred in by independent
certified public accountants) and accompanied by a report as to the
consolidated balance sheet and the related consolidated statements of
Coopers & Lybrand or any firm of independent public accountants of recognized
national standing selected by the Guarantor to the effect that such financial
statements have been prepared in conformity with generally accepted
accounting principles and present fairly, in all material respects, the
financial condition of the Guarantor and its Restricted Subsidiaries and
that the examination of such financial statements by such accounting firm has
been made in accordance with generally accepted auditing standards; provided
that so long as the Guarantor shall file an annual report on Form 10-K or any
similar form with the Securities
and Exchange Commission or any successor agency which contains the information
set forth in this paragraph (b), the requirements of this paragraph (b) shall be
satisfied by forwarding Form 10-K to the holder of the Notes within such 90-day
period;
(c) Together with the financial statements delivered pursuant
to paragraphs (a) and (b) of this Section 6.6, a certificate of the chief
financial officer or chief accounting officer or Senior Vice President, Finance
of each of the Guarantor and the Company, (i) to the effect that such
officer has re-examined the terms and provisions of this Agreement and that at
the date of such certificate, during the periods covered by such financial
reports and as of the end of such periods, the Company and the Guarantor,
respectively, is not, or was not, in default in the fulfillment of any of the
terms, covenants, provisions and conditions of this Agreement or, in the case of
the Guarantor, this Agreement or the Guaranty Agreement, and that no Event of
Default, or event which, with the lapse of time or the giving of notice, or
both, would become an Event of Default, is occurring or has occurred as of the
date of such certificate, during such periods and as of the end of such
periods, or if the signer is aware of any such default, event or Event of
Default, such signer shall disclose in such statement the nature thereof, its
period of existence and what action, if any, the Company or the Guarantor has
taken or proposes to take with respect thereto, and (ii) stating whether the
Guarantor is in compliance with Sections 7.1 through 7.15 and setting forth, in
sufficient detail, the information and computations required to establish
whether or not the Guarantor was in compliance with the requirements of
Sections 7.1 through 7.11 during the periods covered by the financial reports
then being furnished and as of the end of such periods;
(d) Together with the financial reports delivered pursuant to
paragraph (b) of this Section 6.6, a certificate of the independent certified
public accountants (i) stating that in making the examination necessary for
expressing an opinion on such financial statements, nothing came to their
attention that caused them to believe that there is in existence or has
occurred any Event of Default hereunder, or any event (the occurrence of
which is ascertainable by accountants in the course of normal audit procedures)
which, with the lapse of time or the giving of notice, or both, would become an
Event of Default hereunder or, if such accountants shall have obtained knowledge
of any such event or Event of Default, describing the nature thereof and the
length of time it has existed and (ii) acknowledging that holders of the
Notes may rely on their opinion on such financial statements;
(e) Within 15 days after the Guarantor obtains knowledge thereof,
notice of any litigation not fully covered by insurance or any governmental
proceeding pending against the Guarantor or any Subsidiary in which the
damages sought exceed $5,000,000 or which might otherwise materially
adversely affect the business, Property, operations or condition, financial
or otherwise, of the Guarantor and its Subsidiaries taken as a whole;
(f) As soon as available, copies of each financial statement, notice,
report and proxy statement which the Guarantor shall furnish to its
stockholders; copies of all press releases; copies of each registration
statement and periodic report which the Guarantor may file with the Securities
and Exchange Commission, and any other similar or successor agency of the
Federal government administering the Securities Act, the Exchange Act or the
Trust Indenture Act of
1939, as amended; copies of each report relating to the Guarantor or its
securities which the Guarantor may file with any securities exchange on which
any of the Guarantor's securities may be registered; copies of any orders in any
material proceedings to which the Guarantor or any of its Subsidiaries is a
party, issued by any governmental agency, Federal or state, having jurisdiction
over the Guarantor or any of its Subsidiaries; and, except at such times as
the Guarantor is a reporting company under Section 13 or 15(d) of the Exchange
Act or has complied with the requirements for the exemption from registration
under the Exchange Act set forth in Rule 12g-3-2(b), such financial or other
information as any holder of the Notes may reasonably determine is required to
permit such holder to comply with the requirements of Rule 144A under the
Securities Act in connection with the resale by it of the Notes;
(g) As soon as available, a copy of each other report submitted to
the Guarantor or any Subsidiary by independent accountants retained by the
Guarantor or any Subsidiary in connection with any interim or special audit
made by them of the books of the Guarantor or any Subsidiary; and
(h) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Guarantor and its
Subsidiaries.
6.7 Inspection of Properties and Records; Confidentiality. The Guarantor
will allow, and will cause each Subsidiary to allow, any representative of you
or any other Institutional Holder, so long as you or such other Institutional
Holder holds any Note, at your expense, to visit and inspect any of its
Properties, to examine its books of record and account and to discuss its
affairs, finances and accounts with its officers and its public accountants
(and by this provision the Guarantor authorizes such accountants to discuss
with you or such Institutional Holder its affairs, finances and accounts), all
at such reasonable times and as often as you or such Institutional Holder may
reasonably request. So long as an Event of Default or an event which, with
the passage of time or the giving of notice, or both, would become an Event of
Default has occurred and is continuing, the Guarantor agrees to pay the costs
of any inspections made pursuant to this Section 6.7. Each Noteholder
covenants and agrees to treat as confidential all nonpublic information
furnished to it pursuant to the provisions of Sections 6.6 and this 6.7 which
has been designated in writing as confidential by an officer of the Guarantor;
provided that each Noteholder reserves the right to make such disclosure to (i)
such Noteholder's directors, officers, employees, auditors, financial advisers,
rating agencies and attorneys, (ii) any other Noteholder, (iii) any Person to
which such Noteholder offers to sell such Note or any part thereof or a
participation in all or any part of such Note, (iv) any Federal or state
regulatory authority having jurisdiction over such Noteholder, (v) the
National Association of Insurance Commissioners or any similar organization,
(vi) effect compliance with any law, rule, regulation or order applicable to
you or any other Institutional Holder, (vii) in response to any subpoena or
other legal process, (viii) in connection with any litigation to which you
or any other Institutional Holder are a party, or (ix) if an Event of Default
has occurred and is continuing, to the extent you or any other Institutional
Holder may reasonably determine such delivery and disclosure to be necessary or
appropriate in the enforcement or for the protection of the rights and
remedies under the Notes, this Agreement the Subsidiary Guarantees or the
Subordination Agreement. The confidentiality restrictions contained in this
Section 6.7 shall not apply to information which (a)
is or becomes generally available to the public other than as a result of a
disclosure by any Noteholder or its representatives or (b) becomes available to
any Noteholder on a nonconfidential basis from a source other than the
Guarantor or one of its agents.
6.8 ERISA. (a) The Guarantor agrees that all assumptions and methods used
to determine the actuarial valuation of employee benefits, both vested and
unvested, under any Plan of the Guarantor or any Subsidiary, and each such
Plan, whether now existing or adopted after the date hereof, will comply
in all material respects with ERISA and other applicable laws.
(b) The Guarantor will not at any time permit any Plan established,
maintained or contributed to by it or any Subsidiary or "affiliate" (as defined
in Section 407(d)(7) of ERISA) to:
(i) engage in any "prohibited transaction" as such term is
defined in Section 4975 of the Code or in Section 406 of ERISA;
(ii) incur any "accumulated funding deficiency" as such term is
defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated under circumstances which are likely to result
in the imposition of a lien on the Property of the Guarantor or any Subsidiary
pursuant to Section 4068 of ERISA, if and to the extent such termination is
within the control of the Guarantor;
if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Guarantor or any Subsidiary or ERISA affiliate to a
liability which, in the aggregate, is material in relation to the business,
Property, operations, or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole.
(c) Upon the request of you or any other Institutional Holder, the
Guarantor will furnish a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service. Copies of annual
reports shall be delivered no later than 30 days after the later of the date
such report has been filed with the Internal Revenue Service or the date the
copy is requested.
(d) Promptly upon the occurrence thereof, the Guarantor will give you
and each other Institutional Holder written notice of (i) a reportable event
with respect to any Plan; (ii) the institution of any steps by the Guarantor,
any Subsidiary, any ERISA affiliate, the PBGC or any other person to terminate
any Plan; (iii) the institution of any steps by the Guarantor, any Subsidiary,
or any ERISA affiliate to withdraw from any Plan; (iv) a prohibited transaction
in connection with any Plan; (v) any material increase in the contingent
liability of the Guarantor or any Subsidiary with respect to any post-
retirement welfare liability; or (vi) the taking of any action by the Internal
Revenue Service, the Department of Labor or the PBGC with respect to any of the
foregoing which, in any of the events specified above, would result in any
material liability of the Guarantor or any of its Subsidiaries.
6.9 Compliance with Laws. The Guarantor will comply, and will cause
each Subsidiary to comply, with all laws, rules and regulations relating to
its or their respective businesses, other than laws, rules and regulations the
failure to comply with which or the sanctions and penalties resulting therefrom,
individually or in the aggregate, would not have a material adverse effect on
the business, Property, operations, or condition, financial or otherwise, of
the Guarantor or such Subsidiary, and would not result in the creation of a
Lien which, if incurred in the ordinary course of business, would not be
permitted by Section 7.6 on any of the Property of the Guarantor or any
Subsidiary; provided, however, that the Guarantor and its Subsidiaries shall not
be required to comply with laws, rules and regulations the validity or
applicability of which are being contested in good faith and by appropriate
proceedings; provided that the failure to comply with such laws, rules or
regulations would not have a material adverse effect on the business,
Properties, operations, assets or condition, financial or otherwise, of the
Guarantor and its Subsidiaries taken as a whole.
6.10 Acquisition of Notes. The Company will forthwith cancel any Notes in
any manner or at any time acquired by the Company or the Guarantor or any
Subsidiary or Affiliate and such Notes shall not be deemed to be outstanding for
any of the purposes of this Agreement or the Notes.
6.11 Private Placement Number. The Company and the Guarantor consent to
the filing of copies of this Agreement with Standard & Poor's CUSIP Service
Bureau and the National Association of Insurance Commissioners to obtain a
private placement number.
6.12 NAIC Filings. The Guarantor shall, on the date it provides its audited
financial statements to the Noteholders pursuant to Section 6.6(b),
simultaneously provide such statements to the National Association of Insurance
Commissioners, Securities Valuation Office, 195 Broadway, New York, New York
10007.
6.13 Company's Restricted Subsidiary Status. The Guarantor shall at all
times own 100% of the Voting Stock of the Company.
6.14 Bank Agreement. The Guarantor shall promptly notify the holders of the
Notes of any amendment to or other modification of or replacement of the Bank
Agreement and shall promptly provide copies to the Noteholders of such
amendment or modification or replacement documentation.
6.15 Subsidiary Guarantees. In the event that the Guarantor or any
Restricted Subsidiary acquires a Person which complies with the definition
herein of a Restricted Subsidiary Guarantor, the Guarantor shall, within 10
days following such acquisition, provide the Noteholders with a Subsidiary
Guarantee from such new Restricted Subsidiary Guarantor.
6.16 Release of Camden Wire Subsidiary Guarantee. The Noteholders shall
release and discharge Camden Wire Co., Inc. from its obligations under its
Subsidiary Guarantee if (i) the capital stock or assets of Camden Wire Co., Inc.
are sold in compliance with Section 7.10
hereof and (ii) prior to or simultaneously with such release and discharge by
the Noteholders, the Banks release Camden Wire Co., Inc. from all guarantee
obligations of Camden Wire Co., Inc. to the Banks.
7. NEGATIVE COVENANTS
Each of the Company and the Guarantor agrees that, for so long as any
amount remains unpaid on any Note:
7.1 Net Worth. The Guarantor will not at any time permit its
Consolidated Tangible Net Worth to be less than $85,000,000.
7.2 Current Ratio. The Guarantor will not at any time permit the ratio
of Consolidated Current Assets to Consolidated Current Liabilities to be less
than 1.75 to 1.0.
7.3 Funded Debt. The Guarantor will not, and will not permit any
Restricted Subsidiary to, create, assume, incur, guarantee or otherwise become
liable for, directly or indirectly, any Funded Debt, unless, after giving
effect thereto and the application of the proceeds thereof, Funded Debt of
the Guarantor and its Restricted Subsidiaries on a consolidated basis then
outstanding would not exceed 55% of Consolidated Total Capitalization.
7.4 Priority Indebtedness of Restricted Subsidiaries. The Guarantor will
not permit any Restricted Subsidiary to permit to exist, create, assume,
incur, guarantee or otherwise be or become liable, directly or indirectly, in
respect of any Priority Indebtedness, (a) except the Notes and (b) except
additional Priority Indebtedness (excluding fifty percent (50%) of the then
outstanding principal amount of all tax-exempt Indebtedness of Restricted
Subsidiaries issued at or prior to January 26, 1991) which, after giving effect
thereto and the application of proceeds thereof, does not result in aggregate
outstanding Indebtedness (including the Notes) incurred by Restricted
Subsidiaries when added to aggregate Indebtedness incurred (without duplication)
pursuant to Section 7.6(f), exceeding 20% of Consolidated Tangible Net Worth.
7.5 Interest Coverage Ratio. The Guarantor will not, as of the end of any
fiscal quarter, permit the ratio of Consolidated Income Available for Interest
Charges to Consolidated Interest Charges for the four preceding consecutive
fiscal quarters to be less than 1.5 to 1.0.
7.6 Liens. Neither the Guarantor nor any Restricted Subsidiary will cause
or permit or hereafter agree or consent to cause or permit in the future (upon
the happening of a contingency or otherwise), any of its Property, whether now
owned or subsequently acquired, to be subject to a Lien except:
(a) Liens securing the payment of taxes, assessments or governmental
charges or levies or the demands of suppliers, mechanics, repairmen, workmen,
materialmen, carriers, warehousers, landlords and other like Persons, or
similar statutory Liens, provided that (i) such
Liens do not in the aggregate materially reduce the value of any Properties
subject to the Liens or materially interfere with their use in the ordinary
conduct of the Guarantor's or any Restricted Subsidiaries business, (ii) all
claims which such Liens secure are not delinquent or are being actively
contested in good faith and by appropriate proceedings and (iii) adequate
reserves have been established therefor on the books of the Guarantor;
(b) Liens incurred or deposits made in the ordinary course of business
(i) in connection with worker's compensation, unemployment insurance, social
security and other like laws, or (ii) to secure the performance of letters
of credit, bids, tenders, sales contracts, leases, statutory obligations,
surety, appeal and performance bonds and other similar obligations, in each
case not incurred in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of Property otherwise
than permitted by paragraph (f) below;
(c) Attachment, judgment and other similar Liens arising in connection
with court proceedings, provided that (i) execution and other
enforcement are effectively stayed, (ii) all claims which the Liens secure
are being actively contested in good faith and by appropriate proceedings
and (iii) adequate reserves have been established therefor on the books
of the Guarantor, if required by generally accepted accounting principles;
(d) Liens on Property of a Restricted Subsidiary, provided that such
Liens secure only obligations owing between the Guarantor and any Restricted
Subsidiary Guarantor or between Majority-Owned Restricted Subsidiary Guarantors;
(e) Liens existing as of January 30, 1992, which Liens are set forth
in Annex III hereto;
(f) Other Liens solely on real estate, plant equipment and supplies
not otherwise permitted under subparagraphs (a) through (e) above securing
Indebtedness; provided that the Indebtedness secured by such Liens does not
exceed the lesser of the cost or fair market value of the Property; and
provided, further, that the aggregate amount of such Indebtedness secured
by Liens permitted by this subparagraph (f), when added to the aggregate amount
of other Indebtedness of Restricted Subsidiaries incurred (without duplication)
pursuant to Section 7.4 (but excluding, solely in connection with the issuance
of the Notes, the Notes), does not exceed twenty percent (20%) of Consolidated
Tangible Net Worth;
(g) Liens resulting from extension, refunding, renewal or replacement
of the Indebtedness secured by Liens described in subparagraphs (d), (e) and (f)
above, up to the amount outstanding under such Indebtedness at the time of
such extension, refunding, renewal or replacement; provided that any new Lien
attaches only to the same Property theretofore subject to such earlier Lien; and
(h) In the event that the Guarantor or any Restricted Subsidiary
creates, assumes, incurs or permits to exist any Lien not otherwise permitted
by this Section 7.6, the Company will make or cause to be made provision
whereby the Notes will be secured equally and ratably
with all other obligations secured by such Liens, and in any case the Notes
shall have the benefit, to the full extent that, and with such priority as,
the holders may be entitled thereto under applicable law, of an equitable
Lien on such Property securing the Notes. Any violation of this Section 7.6
shall constitute an Event of Default whether or not any such provision is made
for equal and ratable security pursuant to this subparagraph (h).
7.7 Long-Term Leases. The Guarantor will not, and will not permit any
Restricted Subsidiary to, become obligated, as lessee under any Long-Term Lease
unless, at the time of entering into such Long-Term Lease and after giving
effect thereto, the average aggregate annual Rentals payable by the Guarantor
and its Restricted Subsidiaries on a consolidated basis during the term of
such Long-Term Lease pursuant to Long-Term Leases will not exceed 10% of
Consolidated Tangible Net Worth, determined as of the end of the Guarantor's
prior fiscal quarter.
7.8 Restricted Payments. The Guarantor will not, and will not permit
any Restricted Subsidiary to, except as hereinafter provided:
(a) declare or pay any dividends (other than to the Guarantor), either
in cash or Property, on any shares of its capital stock of any class (except
dividends or other distributions payable solely in shares of capital stock of
the Guarantor);
(b) directly or indirectly, or through any Subsidiary, purchase,
redeem or retire any shares of its capital stock or any class or any warrants,
rights or options to purchase or acquire any shares of its capital stock (other
than in exchange for the same or similar securities or out of the net cash
proceeds from the issuance or sale of other shares of capital stock of the
Guarantor);
(c) make any other payment or distribution (other than to the
Guarantor), either directly or indirectly or through any Subsidiary, in
respect of its capital stock; or
(d) make any Restricted Investment;
(all such declarations, payments, purchases, redemptions, retirements,
distributions and investments being herein collectively called "Restricted
Payments") if, after giving effect thereto (i) the Guarantor could not incur
an additional $1.00 of Funded Debt pursuant to Section 7.3, (ii) an Event of
Default pursuant to Section 8.1 shall have occurred and (iii) the aggregate
amount of all Restricted Payments made during the period from and after January
28, 1996, to and including the date of the Restricted Payment in question
would exceed the sum of:
(x) $12,500,000, plus
(y) 75% (or minus 100% in the case of a deficit) of Consolidated
Net Income for such period (computed on a cumulative basis for the entire period
from January 28, 1996).
The Guarantor will not declare any dividend which constitutes a
Restricted Payment payable more than 60 days after its date of declaration. Any
dividend which complies with the provisions of this Section 7.8 on the
date of its declaration shall be deemed to comply on its date of payment,
provided that any intervening event giving rise to non-compliance is not the
result of a Restricted Payment.
7.9 Merger or Consolidation. The Guarantor will not, and will not permit
any Restricted Subsidiary to, merge or consolidate with any other Person,
except that:
(a) The Guarantor may consolidate with or merge into any Person or
permit any other Person to merge into it, provided that immediately after
giving effect thereto,
(i) The Guarantor is the successor corporation or, if the
Guarantor is not the successor corporation, the successor
corporation is a corporation organized under the laws of a state of the United
States of America or the District of Columbia and shall expressly assume in
writing the Guarantor's obligations under the Notes and this Agreement and the
Guaranty Agreement;
(ii) There shall exist no Event of Default or event which, with
the passage of time or giving of notice, or both, would constitute an Event of
Default; and
(iii) The Guarantor or such successor corporation could incur at
least $1.00 of additional Funded Debt pursuant to Section 7.3;
(b) Any Restricted Subsidiary (except the Company) may (i) merge into
the Guarantor or another Majority-Owned Restricted Subsidiary Guarantor or (ii)
sell, transfer or lease all or any part of its assets to the Guarantor or to
another Majority-Owned Restricted Subsidiary Guarantor or (iii) merge into
any Person which, as a result of such merger, concurrently becomes a
Restricted Subsidiary, provided in each such instance that there shall exist
no Event of Default or event which, with the passage of time or giving of
notice, or both, would constitute an Event of Default;
(c) The Company may merge into the Guarantor.
7.10 Sale of Assets. During any fiscal year, the Guarantor will not, and
will not permit any Restricted Subsidiary to, sell, lease, transfer or
otherwise dispose of any assets, in one or a series of transactions, other than
in the ordinary course of business, to any Person, other than the Guarantor or,
in the case of the Company, to a Wholly-Owned Restricted Subsidiary Guarantor
or, in the case of all other Restricted Subsidiaries, to a Majority-Owned
Restricted Subsidiary Guarantor (collectively a "Disposition"), if after giving
effect to such Disposition, the aggregate book value of all Dispositions made
during such fiscal year would exceed ten percent (10%) of Consolidated Tangible
Assets as of the end of the immediately preceding fiscal year. Notwithstanding
the foregoing, the Guarantor may make a Disposition in excess of the aforesaid
percentage if the Guarantor shall, within 180 days after such Disposition, (a)
use pro rata the net proceeds from the sale of such assets exceeding ten percent
(10%) to invest in other tangible
Property and of at least equivalent value for use in the business of the
Guarantor and its Restricted Subsidiaries or (b) with respect to the net
proceeds from Dispositions exceeding ten percent (10%) derived other than from a
Camden Disposition, to prepay Funded Debt, including the Notes, on a pro rata
basis among all issuers of such Funded Debt, including the Noteholders (subject
to the right, to which the Company agrees, of any Noteholders to elect not to be
so prepaid), subject to the prepayment requirements of Section 2.2(a) and at the
price set forth in Section 2.2(b). With respect to a Camden Disposition
occurring prior to March 1, 1997, such Camden Disposition shall not constitute a
Disposition for purposes of this Section 7.10. With respect to a Camden
Disposition occurring after March 1, 1997, the net proceeds of such Camden
Disposition, plus proceeds of other Dispositions made during the same fiscal
year which exceed in the aggregate, ten percent (10%) of Consolidated Tangible
Net Assets as of the end of the immediately preceding fiscal year, shall be used
to prepay Funded Debt, including the Notes, on a pro rata basis among all
issuers of such Funded Debt, including the Noteholders (subject to the right, to
which the Company agrees, of any Noteholder to elect not to be so prepaid),
subject to the prepayment requirements of Section 2.2(a) and a price equal to
100% of the principal amount to be prepaid, plus interest accrued to the date
of prepayment.
7.11 Change in Business. Neither the Guarantor nor any Restricted
Subsidiary (whether now existing or hereafter acquired or organized) will
engage in any business if, giving effect thereto, less than 80% of the
Consolidated Tangible Assets of the Guarantor at the most recently ended
fiscal quarter would be attributable to the current business of the
Guarantor and its Restricted Subsidiaries taken as a whole, including, but
not limited to, the manufacturing, advertising, sales, distribution, of
industrial wire, household and foodservice products and related businesses.
7.12 Transactions with Affiliates. The Guarantor will not, and will not
permit any Subsidiary to, enter into any transaction (including the furnishing
of goods or services) with an Affiliate except in the ordinary course of
business as presently conducted and on terms and conditions no less favorable to
the Guarantor or such Subsidiary than would be obtained in a comparable arm's-
length transaction with a Person not an Affiliate.
7.13 Consolidated Tax Returns. The Guarantor will not file, or consent to
the filing of, any consolidated Federal income tax return with any Person other
than a Restricted Subsidiary, except to the extent that the Guarantor is
required under the Code to do otherwise.
7.14 Pari Passu Position. Each of the Company and the Guarantor agrees that
it will not grant or provide, and at no time will it allow to exist, be created
or granted, any Liens or security interests in favor of, or Guaranties by
Restricted Subsidiaries for the benefit of, any of the Banks, unless in the
case of the giving of any guaranty by Restricted Subsidiaries, the
Noteholders shall simultaneously be provided with a Subsidiary Guarantee.
7.15 Sharing Agreement. The Guarantor shall not permit any Restricted
Subsidiary to incur Priority Indebtedness or to issue a Restricted
Subsidiary Guarantee without requiring that the lender of such Indebtedness or
beneficiary of such Restricted Subsidiary Guarantee execute the Sharing
Agreement at the time of such incurrence of Indebtedness.
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events. An "Event of Default" shall exist if any one or more
of the following occurs:
(a) Default in the payment of interest on any of the Notes which continues
for a period of three (3) days following the date such payment is due;
(b) Default in the payment of the principal of any of the Notes or the
premium thereon, if any, at maturity, upon acceleration of maturity or at any
date fixed for prepayment;
(c) Default shall occur (i) in the payment of the principal of, premium,
or interest on any other Indebtedness of the Guarantor or its
Subsidiaries, aggregating in excess of $1,000,000 as and when due and payable
(whether by lapse of time, declaration, call for redemption or otherwise), (ii)
under any mortgage, agreement or other instrument of the Guarantor or any
Subsidiary securing such Indebtedness or under or pursuant to which such
Indebtedness aggregating in excess of $1,000,000 is issued, (iii) under any
leases other than Capitalized Leases of the Guarantor or any Subsidiary, with
aggregate Rentals in excess of $1,000,000 or (iv) with respect to any
combination of the foregoing involving Indebtedness and/or Rentals aggregating
in excess of $1,000,000 regardless of whether such defaults would be Events of
Default hereunder, and any such defaults with respect to the payment of money
shall continue, unless waived, beyond the period of grace, if any, allowed with
respect thereto;
(d) Default in the observance or performance of Sections 6.13, 6.15, 7.1,
7.3, 7.4, 7.5, 7.7, 7.8, 7.9, 7.10, 7.11, 7.14 or 7.15.
(e) Default in the observance or performance of any other covenant or
provision of this Agreement which default is not remedied within 30 days after
the earlier of the date (a) management of the Guarantor knew of such default or
(b) on which written notice of such default is provided to the Guarantor by any
Noteholder;
(f) Any representation or warranty made by the Company or the Guarantor in
this Agreement, or made by the Company or the Guarantor in any written
statement or certificate furnished by the Company or the Guarantor in connection
with the issuance and sale of the Notes or furnished by the Company or the
Guarantor pursuant to this Agreement or furnished by the Guarantor pursuant to
the Guaranty Agreement or furnished by any Subsidiary Guarantor pursuant to any
Subsidiary Guarantee, proves incorrect in any material respect as of the date
of the issuance or making thereof;
(g) Any judgments, writs or warrants of attachment or any similar
processes individually or in the aggregate in excess of $1,500,000 shall be
entered or filed against the Guarantor or any Subsidiary or against any
Property or assets of either and remain unpaid,
unvacated, unbonded or unstayed (through appeal or otherwise) for a period of 60
days after the Guarantor or any Subsidiary receives notice thereof;
(h) The Guarantor or any Subsidiary shall incur a "Distress Termination"
(as defined in Title IV of ERISA) of any Plan or any trust created thereunder
which results in material liability to the PBGC, the PBGC shall institute
proceedings to terminate any Plan or any trust created thereunder, or a trustee
shall be appointed by a United States District Court pursuant to Section 4042(b)
of ERISA to administer any Plan or any trust created thereunder;
(i) (A) Guarantor or any Subsidiary Guarantor shall be in default of or
fail to comply with any term, covenant, or agreement contained in the Guaranty
Agreement or any Subsidiary Guarantee or the Subordination Agreement or (B) the
Guaranty Agreement or any Subsidiary Guarantee or the Subordination Agreement
shall cease to be in full force and effect; or
(j) The Guarantor or any Subsidiary shall
(i) generally not pay its debts as they become due or admit
in writing its inability to pay its debts generally as they become due;
(ii) file a petition in bankruptcy or for reorganization or
for the adoption of an arrangement under the Federal Bankruptcy Code, or any
similar applicable bankruptcy or insolvency law, as now or in the future amended
(herein collectively called "Bankruptcy Laws"), or an answer or other pleading
admitting or failing to deny the material allegations of such a petition or
seeking, consenting to or acquiescing in relief provided for under the
Bankruptcy Laws;
(iii) make an assignment of all or a substantial part of its
Property for the benefit of its creditors;
(iv) seek or consent to or acquiesce in the appointment of a
receiver, liquidator, custodian or trustee of it or for all or a substantial
part of its Property;
(v) be finally adjudicated a bankrupt or insolvent;
(vi) be subject to the entry of a court order, which shall
not be vacated, set aside or stayed within 30 days from the date of entry,
appointing a receiver, liquidator, custodian or trustee of it or for all or a
substantial part of its Property, or entering of an order for relief pursuant
to an involuntary case, or effecting an arrangement in, bankruptcy or for a
reorganization pursuant to the Bankruptcy Laws or for any other judicial
modification or alteration of the rights of creditors; or
(vii) be subject to the assumption of custody or
sequestration by a court of competent jurisdiction of all or a substantial
part of its Property, which custody or sequestration shall not be suspended or
terminated within 30 days from its inception.
8.2 Remedies on Default. When any Event of Default described in paragraphs
(a) through (i) of Section 8.1 has happened and is continuing, the holder or
holders of at least 25% in principal amount of the Notes then outstanding may by
notice to the Company declare the entire principal, together with the premium
set forth below, and all interest accrued on all Notes to be, and such Notes
shall thereupon become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which are expressly
waived. Notwithstanding the foregoing, when (i) any Event of Default described
in paragraphs (a) or (b) of Section 8.1 has happened and is continuing, any
holder may by notice to the Company declare the entire principal, together
with the premium set forth below, and all interest accrued on the Notes then
held by such holder to be, and such Notes shall thereupon become, forthwith
due and payable, without any presentment, demand, protest or other notice of
any kind, all of which are expressly waived and (ii) any Event of Default
described in paragraph (j) of Section 8.1 has happened, then all outstanding
Notes shall immediately become due and payable without presentment, demand or
notice of any kind. Upon the Notes or any of them becoming due and payable as
aforesaid, the Company will forthwith pay to the holders of such Notes the
entire principal of and interest accrued on such Notes, plus a premium in the
event that the Reinvestment Yield shall, on the Determination Date, be less
than the interest rate payable on or in respect of the Notes. Such premium
shall equal (x) the aggregate present value of the principal so accelerated and
the aggregate present value of the interest which would have been payable in
respect of such principal absent such accelerated payment, determined by
discounting (semi-annually on the basis of a 360-day year composed of twelve
30-day months) each such amount utilizing an interest factor equal to the
Reinvestment Yield, less (y) the principal amount to be accelerated.
8.3 Annulment of Acceleration of Notes. The provisions of Section 8.2
are subject to the condition that if the principal of and accrued interest on
the Notes have been declared immediately due and payable by reason of the
occurrence of any Event of Default described in paragraphs (a) through (i),
inclusive, of Section 8.1, the holder or holders of 66-2/3% in aggregate
principal amount of the Notes then outstanding may, by written instrument
furnished to the Company, rescind and annul such declaration and the
consequences thereof, provided that (i) at the time such declaration is
annulled and rescinded no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or this Agreement, (ii) all arrears of
interest upon all the Notes and all other sums payable under the Notes and
under this Agreement (except any principal, interest or premium on the Notes
which has become due and payable solely by reason of such declaration under
Section 8.2) and under the Guaranty Agreement and under the Subsidiary
Guarantees shall have been duly paid and (iii) each and every other Event of
Default shall have been cured or waived; and provided further, that no such
rescission and annulment shall extend to or affect any subsequent default or
Event of Default or impair any right consequent thereto.
8.4 Other Remedies. Subject to the provisions of Section 8.3, if any Event
of Default shall be continuing, any holder of Notes may enforce its rights by
suit in equity, by action at law, or by any other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Agreement, in the Notes or in the
Guaranty Agreement or in the Subsidiary Guarantees or in aid of the exercise of
any power
granted in this Agreement, and may enforce the payment of any Note held by such
holder and any of its other legal or equitable rights.
8.5 Conduct No Waiver; Collection Expenses. No course of dealing on the
part of any holder of Notes, nor any delay or failure on the part of any holder
of Notes to exercise any of its rights, shall operate as a waiver of such rights
or otherwise prejudice such holder's rights, powers and remedies. If the
Company fails to pay, when due, the principal of, or the interest on, any Note,
or if the Company or the Guarantor fail to comply with any other provision
of this Agreement, the Company and the Guarantor will pay to each holder, to
the extent permitted by law, on demand, such further amounts as shall be
sufficient to cover the reasonable cost and expenses, including but not
limited to reasonable attorneys' fees, incurred by such holders of the Notes
in collecting any sums due on the Notes or in otherwise enforcing any of their
rights.
8.6 Remedies Cumulative. No right or remedy conferred upon or reserved to
any holder of Notes under this Agreement, the Guaranty Agreement, and the
Subsidiary Guarantees is intended to be exclusive of any other right or remedy,
and every right and remedy shall be cumulative and in addition to every
other right or remedy given under this Agreement or the Guaranty Agreement or
now or hereafter existing under any applicable law. Every right and
remedy given by this Agreement or by applicable law to any holder of Notes
may be exercised from time to time and as often as may be deemed expedient by
such holder, as the case may be.
8.7 Notice of Default. With respect to Events of Default or claimed
defaults, the Guarantor will give the following notices:
(a) The Guarantor promptly will furnish to each holder of a Note
notice in writing by registered or certified mail, return receipt requested, of
the occurrence of an Event of Default or an event which, with the lapse of
time or the giving of notice, or both, would become an Event of Default. Such
notice shall specify the nature of such default, the period of existence
thereof and what action the Guarantor has taken or is taking or proposes to
take with respect thereto.
(b) If the holder of any Note or of any other evidence of Indebtedness
of the Guarantor or any Subsidiary gives any notice or takes any other
action with respect to a claimed default, the Guarantor will forthwith give
written notice to the extent of the Guarantor's knowledge thereof to each
holder of the then outstanding Notes, describing the notice or action and the
nature of the claimed default.
9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification. Any term, covenant, agreement or
condition of this Agreement or the Guaranty Agreement may, with the consent of
the Company and the Guarantor, be amended, or compliance therewith may be
waived (either generally or in a particular instance and either retroactively or
prospectively), if the Company and the Guarantor
shall have obtained the consent in writing of the holder or holders of at least
66-2/3% in aggregate principal amount of outstanding Notes; provided, however,
that, without the written consent of the holder or holders of all of the
Notes then outstanding, no such waiver, modification, alteration or amendment
shall be effective which will (i) change the time of payment (including any
required prepayment) of the principal of or the interest on any Note, (ii)
reduce the principal amount thereof or the premium, if any, or reduce the rate
of interest thereon, (iii) change any provision of any instrument affecting the
preferences between holders of the Notes or between holders of the Notes and
other creditors of the Company, and the Guarantor or (iv) change any of the
provisions of Section 8.1, Section 8.2, Section 8.3 or this Section 9.
For the purpose of determining whether holders of the requisite principal
amount of Notes have made or concurred in any waiver, consent, approval, notice
or other communication under this Agreement or the Guaranty Agreement, Notes
held in the name of, or owned beneficially by, the Guarantor, the Company, or
any Subsidiary or any Affiliate thereof, shall not be deemed outstanding.
9.2 Solicitation of Holders of Notes. The Company and the Guarantor
will not solicit, request or negotiate for or with respect to any proposed
waiver or amendment of any of the provisions of this Agreement or the Notes
unless each holder of the Notes (irrespective of the amount of Notes then owned
by it) shall concurrently be informed thereof by the Company and the
Guarantor shall be afforded the opportunity of considering the same and
shall be supplied by the Company and the Guarantor with sufficient
information to enable it to make an informed decision with respect thereto.
Executed or true and correct copies of any waiver or consent effected pursuant
to the provisions of this Section 9 shall be delivered by the Company and the
Guarantor to each holder of outstanding Notes forthwith following the date on
which the same shall have been executed and delivered by the holder or
holders of the requisite percentage of outstanding Notes. Neither the Company
nor the Guarantor will, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any holder of the Notes as consideration for or as an
inducement to the entering into by any holder of the Notes of any waiver or
amendment of any of the terms and provisions of this Agreement unless such
remuneration is concurrently paid, on the same terms, ratably to each holder
of the then outstanding Notes.
9.3 Binding Effect. Any such amendment or waiver shall apply equally to
all the holders of the Notes and shall be binding upon them, upon each future
holder of any Note and upon the Company and the Guarantor whether or not such
Note shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right related thereto.
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1 Form of Notes. The Notes initially delivered under this Agreement will
be in the form of six fully registered Notes in the form attached as Exhibit A.
The Notes are issuable only in fully registered form and in denominations of at
least $2,000,000 (or the remaining outstanding balance thereof, if less than
$2,000,000).
10.2 Note Register. The Company shall cause to be kept at its principal
office a register (the "Note Register") for the registration and transfer of
the Notes. The names and addresses of the holders of Notes, the transfer
thereof and the names and addresses of the transferees of the Notes shall be
registered in the Note Register. The Company may deem and treat the person in
whose name a Note is so registered as the holder and owner thereof for all
purposes and shall not be affected by any notice to the contrary, until due
presentment of such Note for registration of transfer as provided in this
Section 10.
10.3 Issuance of New Notes upon Exchange or Transfer. Upon surrender for
exchange or registration of transfer of any Note at the office of the Company
designated for notices in accordance with Section 11.2, the Company shall
execute and deliver, at its expense, one or more new Notes of any authorized
denominations requested by the holder of the surrendered Note, each dated the
date to which interest has been paid on the Notes so surrendered (or, if no
interest has been paid, the date of such surrendered Note), but in the
same aggregate unpaid principal amount as such surrendered Note, and
registered in the name of such person or persons as shall be designated in
writing by such holder. Every Note surrendered for registration of transfer
shall be duly endorsed, or be accompanied by a written instrument of transfer
duly executed, by the holder of such Note or by such holder's attorney duly
authorized in writing. The Company may condition its issuance of any new Note
in connection with a transfer by any Person on compliance by the transferee with
the representations required under Section 3.2, by Institutional Holders on
compliance with Section 2.5 and on the payment to the Company of a sum
sufficient to cover any stamp tax or other governmental charge imposed in
respect of such transfer.
10.4 Replacement of Notes. Upon receipt of evidence satisfactory to the
Company of the loss, theft, mutilation or destruction of any Note, and in the
case of any such loss, theft or destruction upon delivery of a bond of
indemnity in such form and amount as shall be reasonably satisfactory to the
Company or in the event of such mutilation upon surrender and cancellation of
the Note, the Company, without charge to the holder thereof, will make and
deliver a new Note, of like tenor in lieu of such lost, stolen, destroyed or
mutilated Note. If any such lost, stolen or destroyed Note is owned by you or
any other Institutional Holder, then the affidavit of an authorized officer of
such owner setting forth the fact of loss, theft or destruction and of its
ownership of the Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof, and no further indemnity shall be
required as a condition to the execution and delivery of a new Note, other than
a written agreement of such owner (in form reasonably satisfactory to the
Company) to indemnify the Company.
11. MISCELLANEOUS
11.1 Expenses. Whether or not the purchase of Notes herein contemplated
shall be consummated, the Company and the Guarantor agree to pay directly all
reasonable expenses in connection with the preparation, execution and
delivery of this Agreement and the transactions contemplated by this
Agreement, including, but not limited to, out-of-pocket expenses, filing fees
of Standard & Poor's Corporation in connection with obtaining a private
placement number, charges and disbursements of special counsel, photocopying
and printing costs and charges for shipping the Notes, adequately insured, to
you at your home office or at such other address as you may designate, and all
similar expenses (including the reasonable fees and expenses of counsel)
relating to any amendments, waivers or consents in connection with this
Agreement or the Notes or the Guaranty Agreement or the Subsidiary Guarantees or
the Subordination Agreement or the Sharing Agreement or any agreement entered
into by the Noteholders and the Company, the Guarantor or any Subsidiary
Guarantor, including, but not limited to, any such amendments, waivers or
consents resulting from any work-out, renegotiation or restructuring relating
to the performance by the Company of its obligations under this Agreement and
the Notes, the performance by the Guarantor under this Agreement, the
Subordination Agreement and the Guaranty Agreement and the performance by
the Subsidiary Guarantors under the Subsidiary Guarantees and the Subordination
Agreement. The Company and the Guarantor also agree that they will pay and save
you harmless against any and all liability with respect to stamp and other
documentary taxes, if any, which may be payable, or which may be determined
to be payable in connection with the execution and delivery of this Agreement
or the Notes (but not in connection with a transfer of any Notes), whether or
not any Notes are then outstanding. The obligations of the Company under
this Section 11.1 shall survive the retirement of the Notes.
11.2 Notices. Except as otherwise expressly provided herein, all
communications provided for in this Agreement shall be in writing and
delivered or sent by registered or certified mail, return receipt requested,
or by overnight courier (i) if to you, to the address set forth below your name
in Schedule I, or to such other address as you may in writing designate, (ii) if
to any other holder of the Notes, to such address as the holder may designate in
writing to the Company, and (iii) if to the Company, to Oneida Ltd., 163
Kenwood Avenue, Oneida, New York 13421, Attention: Edward W. Thoma, Senior
Vice President-Finance, or to such other address as the Company may in
writing designate.
11.3 Reproduction of Documents. This Agreement and all documents relating
hereto, including, without limitation, (i) consents, waivers and modifications
which may hereafter be executed, (ii) documents received by you at the
closing of the purchase of the Notes (except the Notes themselves), and
(iii) financial statements, certificates and other information previously or
hereafter furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other similar
process, and you may destroy any original document so reproduced. The Company
and Guarantor agree and stipulate that any such reproduction which is legible
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by you in the regular course of
business) and that any enlargement,
facsimile or further reproduction of such reproduction shall likewise be
admissible in evidence; provided that nothing herein contained shall preclude
the Company and the Guarantor from objecting to the admission of any
reproduction on the basis that such reproduction is not accurate, has been
altered or is otherwise incomplete.
11.4 Successors and Assigns. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
11.5 Law Governing. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois. No provision of this
Agreement may be waived, changed or modified, or the discharge thereof
acknowledged, orally, except by an agreement in writing signed by the
party against whom the enforcement of any waiver, change, modification or
discharge is sought.
11.6 Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
11.7 Counterparts. This Agreement may be executed simultaneously in one
or more counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart or reproduction thereof permitted by Section
11.3.
11.8 Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company and the Guarantor herein and
in any certificates delivered pursuant to this Agreement, the Guaranty
Agreement and the Subsidiary Guarantees, whether or not in connection with a
closing, (i) shall be deemed to have been relied upon by you,
notwithstanding any investigation heretofore or hereafter made by you or on
your behalf and (ii) shall survive the delivery of this Agreement, the Notes,
the Guaranty Agreement and the Subsidiary Guarantees.
11.9 Integration and Severability. This Agreement and the Exhibits
hereto (including but not limited to the Guaranty Agreement, the Subsidiary
Guarantees, and the Subordination Agreement) embody the entire agreement and
understanding between you, the Guarantor, the Company, and supersedes all prior
agreements and understandings relating to the subject matter hereof. In case
any one or more of the provisions contained in this Agreement, the Guaranty
Agreement, the Subsidiary Guarantee, the Subordination Agreement or in any Note,
or application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained in this Agreement, the Guaranty Agreement, the Subsidiary
Guarantees, the Subordination Agreement and in any Note, and any other
application thereof, shall not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the Company, the Guarantor and the Purchasers
have caused this Agreement to be executed and delivered by their respective
officer or officers thereunto duly authorized.
THC SYSTEMS, INC.
By: /s/ Glenn B. Kelsey
Title: Vice President-Finance
ONEIDA LTD.
By: /s/ Edward W. Thoma
Title: Senior Vice President - Finance
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Patricia W. Wilson
By: /s/ Steven M. Laude
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/ Patricia W. Wilson
By: /s/ Steven M. Laude
Authorized Signatories
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ Diane W. Dales
Title: Assistant Vice President
By: /s/ Peter S. Fiek
Title: Assistant Secretary
Schedule A-1
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
Allstate Insurance Company (1) $10,000,000
3075 Sanders Road, STE G4A (2) $5,000,000
Northbrook, Illinois 60062-7127
Attention: Investment Operations Private Placements
Telephone: (847) 402-8709
Telecopy: (847)402-7331
All notices of scheduled payments and written confirmations of such wire
transfer should be sent to the address above. All payments by Fedwire
transfer of immediately available funds, identifying the name of the Issuer
(and the Credit, if any), the Private Placement Number preceded by "DPP" and
the payment as principal, interest or premium, in the format as follows:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Life Insurance Company
Collection Account #168-117-0
ORG = THC Systems, Inc.
OBI = DPP (PPN: 87252@ AA 8)
L___________ (Enter Lease Number, if any)
Payment Due Date (MM/DD/YY) -
P___________ (Enter "P" and amount of
principal being remitted, for example,
P5000000.00) -
I____________ (Enter "I" and amount of
interest being remitted, for example,
I225000.00)
Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
500 West Madison Street
4th Floor, Zone 6
Chicago, Illinois 60661-2591
Attention: Misty Gniadek
For Allstate Life Insurance Company/
Safekeeping Account No. 846627
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-4394
Telecopy: (847) 402-3092
Tax ID #36-2554642
Schedule A-2
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
Allstate Insurance Company $7,500,000
3075 Sanders Road, STE G4A
Northbrook, Illinois 60062-7127
Attention: Investment Operations Private Placements
Telephone: (847) 402-8709
Telecopy: (847)402-7331
All notices of scheduled payments and written confirmations of such wire
transfer should be sent to the address above. All payments by Fedwire
transfer of immediately available funds, identifying the name of the Issuer
(and the Credit, if any), the Private Placement Number preceded by "DPP" and
the payment as principal, interest or premium, in the format as follows:
BBK = Harris Trust and Savings Bank
ABA #071000288
BNF = Allstate Insurance Company
Collection Account #168-114-7
ORG = THC Systems, Inc.
OBI = DPP (PPN: 87252@ AA 8)
L__________ (Enter Lease Number, if any)
Payment Due Date (MM/DD/YY) -
P__________ (Enter "P" and amount of
principal being remitted, for example,
P5000000.00) -
I__________ (Enter "I" and amount of
interest being remitted, for example,
I225000.00)
Securities to be delivered to:
Citibank, Federal Savings Bank
Citicorp Center
500 West Madison Street
4th Floor, Zone 6
Chicago, Illinois 60661-2591
Attention: Misty Gniadek
For Allstate Insurance Company/
Safekeeping Account No. 846626
All financial reports, compliance certificates and all other written
communications, including notice of prepayments, to be sent to:
Allstate Life Insurance Company
Private Placements Department
3075 Sanders Road, STE G3A
Northbrook, IL 60062-7127
Telephone: (847) 402-4394
Telecopy: (847) 402-3092
Tax ID #36-0719665
Schedule A-3
INFORMATION RELATING TO PURCHASERS
Principal Amount of
Name and Address of Purchaser Notes to be Purchased
Pacific Mutual Life Insurance Company (1) $5,000,000
700 Newport Center Drive (2) $5,000,000
P.O. Box 9000 (3) $2,500,000
Newport Beach, California 92660
Attention: Fixed Income Securities Dept.
Address for all communications is as above, except notices of payment and
written confirmations of wire or inter-bank transfers. All payments are to be
by bank wire transfer of immediately available funds to:
The Chase Manhattan Bank, N.A.
ABA #021-000-021
A/C = 900-9-002206
BBK = Chase Manhattan Bank, N.A.
A/C Name: General Account
A/C Number: 89930705
For Pacific Mutual Life Insurance Company
PPN: 87252@ AA 8
Each wire transfer shall identify such payment as "THC Systems, Inc.,
7.49% Senior Notes due November 1, 2008."
Principal and interest payments:
The Chase Manhattan Bank, N.A.
ABA #021-000-021
A/C = 900-9-002206
BBK = Chase Manhattan Bank/SSTO
A/C Name: Pacific Mutual Gen. Acct.
Sub A/C Number: 47363300
Regarding: "THC Systems, Inc., 7.49% Senior Notes due
November 1, 2008 (PPN: 87252@ AA 8)"
Notices of payment and written confirmations of wire or inter-bank
transfers shall be addressed to:
Pacific Mutual Life Insurance Company
700 Newport Center Drive
P.O. Box 9000
Newport Beach, California 92660
Attention: Investment Administration
All securities being purchased should be registered in the nominee
name of "Atwell & Co" and delivered to:
The Chase Manhattan Bank
4 New York Plaza
Ground Floor Window
New York, NY 10004
Attention: Lillian Gonzalas
A/C Name: General Account
A/C Number: 89930705
General Tax ID #: 95-1079000
Private Placement Tax ID #: 13-6065575
ANNEX I
Restricted Subsidiaries of the Company
Restricted Place of Authorized to do
Subsidiaries Incorporation Business
Kenwood Silver Company, Inc. New York Alabama
Arizona
California
Colorado
Connecticut
Delaware
Florida
Georgia
Idaho
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Michigan
Missouri
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
Ohio
Oklahoma
Oregon
Pennsylvania
South Carolina
Tennessee
Texas
Virginia
Washington
West Virginia
Wisconsin
Camden Wire Co. Inc. New York Arkansas
California
Illinois
North Carolina
Texas
Oneida Distribution
Services, Inc. New York California
Georgia
Buffalo China, Inc. New York
Oneida International, Inc. Delaware
Oneida Foreign
Sales Corporation Virgin Islands
THC Systems, Inc. New York North Carolina
Oneida Mexicana, S.A. Mexico
Oneida Canada, Limited Canada
Oneida Domestic
International Sales Corp. New York
Oneida Community, Limited New York
Employee Agency, Inc. New York
Heirloom, Inc. New York
Kenwood Advertising, Inc. New York
Simeon L. & George H.
Rogers Co., Ltd. (Canada) Canada
William A. Rogers, Limited New York
Canadian Wm. A. Rogers, Ltd. Canada
Oneida Ltd. owns 100% of the outstanding shares of each of the
above subsidiaries except Buffalo China, Inc. and Oneida International, Inc.
which are 93% and 80% owned, respectively.
Subsidiary of Buffalo China, Inc.
Ceramica De Juarez, S.A. Mexico
Subsidiary of Oneida International, Inc.
Sant'Andrea, Inc. Italy
ANNEX II
ONEIDA LTD. & ITS RESTRICTED SUBSIDIARIES
FUNDED DEBT & CURRENT DEBT
FOR FISCAL PERIOD ENDED 10/26/96
1) FUNDED DEBT
Funded Debt at October 26, 1996 consisted of the following:
(Thousands)
Senior notes, 8.52% due January 15, 2002, payable
$4,285,710 annually $25,714
Notes payable at various interest rates due February
20, 2001 40,000
Industrial Revenue Bond, Chemical Bank Tax Exempt Money
Market Index rate, due February 1, 2005 9,000
Industrial Revenue Bond, Marine Midland Bank, 9.25%
due March 1, 2000 1,136
Industrial Revenue Bond, NationsBank Tax Exempt Market
Index rate, due March 20, 2016 6,500
Other debt at various rates due through 1999 297
Total 82,647
Less amounts due currently 4,702
Long-term debt $77,945
2) CURRENT DEBT
Current Debt at October 26, 1996 consisted of the following:
(Thousands)
Short term debt $12,500
Bankers acceptances 19,000
Current installments of long term debt 4,702
Total CURRENT DEBT $36,202
ANNEX III
Description of Liens
None.
ANNEX IV
ONEIDA LTD.
RISK INSURANCE COVERAGE SUMMARY
Class of Insurance Insurance Company Risks Covered Limits
Property Damage, Industrial Risk All Risk coverage $624,658,000
Boiler/Machinery, Insurers including damage due to
Business Interruption earthquake and flood
Commercial General Royal Insurance Bodily Injury and $3,000,000
Liability Property damage caused (Aggregate)
by ownership and $1,000,000
operation of premises; (Each
includes product Occurrence)
liability, broad form
vendors liability,
advertisers & contractual
liability
Commercial Federal Insurance Umbrella coverage over $25,000,000
Liability Co. commercial general liability
Umbrella and auto liability policies
Pension & Welfare Aetna Casualty & Breach of fiduciary $1,000,000
Fiduciary Liability Surety Company responsibility as Trustee
of employee benefit plans
Executive Liability CNA Wrongful acts while $15,000,000
(Directors and acting in capacity as
Officers) director or officer
General Crime Lumbermans Mutual Comprehensive crime and $ 500,000
Casualty Company employee dishonesty;
(Kemper) includes ERISA compliance
for administration of
benefit plans
EXHIBIT A
THC SYSTEMS, INC.
7.49% SENIOR NOTE
Due November 1, 2008
THIS NOTE MAY BE SUBJECT TO A HOME OFFICE PAYMENT AGREEMENT AND ACCORDINGLY
ANY PROSPECTIVE PURCHASER SHOULD FIRST VERIFY THE UNPAID PRINCIPAL AMOUNT WITH
THE COMPANY.
Registered Note No. R-____ November __, 1996
$__________
THC SYSTEMS, INC., a New York corporation (the "Company), for value
received, hereby promises to pay to ______________________ or registered
assigns, on the first day of November, 2008, the principal amount of
_______________ Dollars ($__________) and to pay interest (computed on the
basis of a 360-day year of twelve 30-day months) on the principal amount
from time to time remaining unpaid hereon at the rate of seven and forty-nine
hundredths percent (7.49%) per annum from the date hereof until maturity,
payable on the first day of November and May in each year, commencing May 1,
1997, and at maturity, and to pay interest on overdue principal, premium and
(to the extent legally enforceable) on any overdue installment of interest at
the greater of (a) the rate of interest publicly announced by The Chase
Manhattan Bank (or its successors or assigns) as its "prime rate" plus one
percent (1%) or (b) nine and forty-nine hundredths percent (9.49%) per annum
after maturity or the due date thereof, whether by acceleration or otherwise,
until paid. Payments of the principal of, the premium, if any, and interest on
this Note shall be made in lawful money of the United States of America in the
manner and at the place provided in Section 2.5 of the Note Agreement
hereinafter defined.
This Note is issued under and pursuant to the terms and provisions of a
Note Agreement, dated as of November 15, 1996, entered into by the Company and
Oneida Ltd. (The "Guarantor") with the Purchasers named in Schedule I thereto
(the "Note Agreement"), and this Note and any holder hereof are entitled to
all of the benefits and are bound by the terms provided for by such Note
Agreement or referred to therein. The provisions of the Note Agreement are
incorporated in this Note to the same extent as if set forth at length herein.
As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or his attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of
the taxes or other governmental charges, if any, that may be imposed in
connection therewith. The Company may treat the person in whose name this Note
is registered as the owner hereof for the purpose of receiving payment and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.
This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required
to be made hereon all in the events, on the terms and in the manner as
provided in the Note Agreement. Such prepayments include certain required
prepayments on November 1 of each year beginning November 1, 2000 and ending
November 1, 2007 and certain optional prepayments with a premium.
Should the indebtedness represented by this Note or any part thereof
be collected in any proceeding provided for in the Note Agreement or be placed
in the hands of attorneys for collection, the Company and the Guarantor agree
to pay, in addition to the principal, premium, if any, and interest due and
payable hereon, all reasonable costs of collecting this Note, including
reasonable attorneys' fees and expenses.
This Note and the Note Agreement are governed by and construed in
accordance with the laws of the State of Illinois.
THE SYSTEMS, INC.
By:___________________________________
Its:
GUARANTY ENDORSEMENT
Payment of principal, interest and premium, if any, with respect to this
Note is guaranteed pursuant to the terms of the Guaranty Agreement and
Subsidiary Guarantees dated as of November __, 1996 of, respectively, Oneida
Ltd., Camden Wire Co., Inc. and Buffalo China, Inc. Subject to the terms of
such Guaranty Agreement which terms are incorporated herein by reference,
each of the undersigned guarantees the prompt payment when due of the principal
of, premium, if any, and interest on this Note and all payments due under the
Note Agreement.
ONEIDA LTD.
By:____________________________________
Title:
CAMDEN WIRE CO., INC.
By:____________________________________
Title:
BUFFALO CHINA, INC.
By:____________________________________
Title:
EXHIBIT B
LEGAL OPINIONS
A. The opinion of Gardner, Carton & Douglas, special counsel for the
Purchasers, shall be to the effect that:
1. The Company is a corporation organized and validly existing in
good standing under the laws of the State of New York, with all requisite
corporate power and authority to carry on its business as now conducted, to
enter into and perform the Agreement and to issue and sell the Notes.
2. The Guarantor is a corporation organized and validly existing in
good standing under the laws of the State of New York, with all requisite
corporate power and authority to carry on its business as now conducted, to
enter into and perform the Agreement and to issue and sell the Notes.
3. The Agreement has been duly authorized by proper corporate action
on the part of the Company and the Guarantor, has been duly executed and
delivered by an authorized officer of the Company and the Guarantor and
constitutes the legal, valid and binding agreement of the Company and the
Guarantor, enforceable in accordance with its terms, except to the extent that
enforcement of the Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
4. The Guaranty Agreement and the Subordination Agreement and the
First Amendment to the 1992 Agreement have been duly authorized by proper
corporate action on the part of the Guarantor, have been duly executed and
delivered by an authorized officer of Guarantor and constitute the legal,
valid and binding obligations of the Guarantor, enforceable in accordance
with their respective terms, except to the extent that enforcement of the
Notes may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of the rights of creditors or by equitable principles, regardless
of whether enforcement is sought in a proceeding in equity or at law.
5. The Subsidiary Guarantees and the 1992 Subsidiary Guarantees have
been duly authorized by proper corporate action on the part of the Subsidiary
Guarantors have been duly executed and delivered by an authorized officer of
each of the Subsidiary Guarantors that are a party thereto and constitute the
legal, valid and binding obligations of the Subsidiary Guarantors, enforceable
in accordance with their respective terms, except to the extent that
enforcement of the Subsidiary Guarantors may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application relating to or
affecting the enforcement of the rights of creditors or by equitable
principles, regardless of whether enforcement is sought in a proceeding in
equity or at law.
6. The Notes have been duly authorized by proper corporate action on
the part of the Company, have been duly executed and delivered by an authorized
officer of the Company and constitute the legal, valid and binding
obligations of the Company, enforceable in accordance with their terms, except
to the extent that enforcement of the Notes may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the rights of
creditors or by equitable principles, regardless of whether enforcement is
sought in a proceeding in equity or at law.
7. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes and the delivery of the Guaranty do not
require the registration of the Notes under the Securities Act of 1933, as
amended, nor the qualification of an indenture under the Trust Indenture Act
of 1939, as amended.
8. The issuance of the Guaranty Agreement and compliance with the
terms and provisions of the Agreement and the Guaranty Agreement will not
conflict with or result in any breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Guarantor or its Subsidiaries.
9. The issuance of each of the Subsidiary Guarantees, the 1992
Subsidiary Guarantees, the Subordination Agreement and the First Amendment
to the 1992 Agreement and compliance with the terms and provisions will not
conflict with or result in any breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Guarantor or its Subsidiaries.
10. The issuance and sale of the Notes and compliance with the terms
and provisions of the Notes, the Agreement and the Subordination Agreement will
not conflict with or result in any breach of any of the provisions of the
Certificate of Incorporation or By-Laws of the Guarantor or its Subsidiaries.
The opinion of Gardner, Carton & Douglas also shall state that the
opinion of Shearman & Sterling, counsel for the Company, delivered to you
pursuant to the Agreement, is satisfactory in form and scope to Gardner, Carton
& Douglas, and, in their opinion, the Purchasers and it are justified in relying
thereon and shall cover such other matters relating to the sale of the Notes as
the Purchasers may reasonably request. Gardner, Carton & Douglas may rely,
as to matters of New York law, on the opinion of Shearman & Sterling.
B. The opinion of Shearman & Sterling, counsel for the Company, shall
cover all matters specified in clauses 1 through 6 set forth above and also
shall be to the effect that:
1. Each of the Company and the Guarantor has full corporate power and
authority to conduct the activities in which it is now engaged and own its
Property.
2. Each Subsidiary of the Guarantor is a corporation duly organized
and validly existing in good standing under the laws of its jurisdiction of
incorporation, and each has all requisite corporate power and authority to carry
on its business as now conducted and own its Property.
3. Each of the Guarantor and its Subsidiaries is duly qualified or
licensed and in good standing as a foreign corporation authorized to do business
in each jurisdiction where the nature of the business transacted by it or the
character of its Properties owned or leased makes such qualification or
licensing necessary except where failure to so qualify would not, individually
or in the aggregate, have a material adverse affect on its business,
Properties, or condition, financial or otherwise.
4. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Company of the Agreement or the lawful offering, issuance
and sale of the Notes by the Guarantor of the Agreement and the Guaranty
Agreement, and no designation, filing, declaration, registration and/or
qualification with any governmental authority is required by the Company in
connection with such offer, issuance and sale.
5. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Guarantor of the Agreement or the Guaranty Agreement or the
Subordination Agreement or the First Amendment to the 1992 Agreement and
no designation, filing, declaration, registration and/or qualification with
any governmental authority is required by the Guarantor in connection with
such execution and delivery.
6. No authorization, approval or consent of any governmental or
regulatory body is necessary or required in connection with the lawful execution
and delivery by the Subsidiary Guarantors of the Subsidiary Guarantees or the
1992 Subsidiary Guarantees or the Subordination Agreement and no designation,
filing, declaration, registration and/or qualification with any governmental
authority is required by the Subsidiary Guarantors in connection with such
execution and delivery.
7. The (i) issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Agreement and (ii) the execution, delivery
and performance by the Guarantor of the Agreement, the Guaranty Agreement,
the Subordination Agreement and the First Amendment to the 1992 Agreement, and
(iii) the execution, delivery and performance by the Subsidiary Guarantors
of the Subsidiary Guarantees and the Subordination Agreement will not conflict
with, or result in any breach or violation of any of the provisions of, or
constitute a default under, or result in the creation of any Lien on the
Property of the Company or the Guarantor or any Subsidiary pursuant to, (i)
the provisions of the Certificate of Incorporation or other charter document or
by-laws of the Company or the Guarantor or any Subsidiary or any loan agreement
under which the Company or the Guarantor or any Subsidiary is bound, or other
agreement or instrument known to such counsel (after due inquiry) to which the
Company or the Guarantor or any Subsidiary is a party or by which any of
them or their Property is bound or (ii) any New York law (including usury laws)
or regulation, order, writ, injunction or decree of any court or governmental
authority applicable to the Company or the Guarantor known to such counsel.
8. There are no actions, suits or proceedings pending or, to the best
of such counsel's knowledge after due inquiry, threatened against, or affecting
the Guarantor or its Subsidiaries, at law or in equity or before or by any
Federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which are likely to
result, either individually or in the aggregate, in any material adverse change
in the business, Properties, operations or condition, financial or otherwise,
of the Guarantor and its Subsidiaries taken as a whole.
9. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and, to the knowledge of such counsel, are owned by the Guarantor free and
clear of any Lien.
10. The issuance of the Notes and the use of the proceeds of the sale
of the Notes do not violate or conflict with Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
11. Neither the Guarantor nor any Subsidiary is: (i) a "public
utility company" or a "holding company," or an "affiliate" or a "subsidiary
company" of a "holding company," or an "affiliate" of such a "subsidiary
company," as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended, or (ii) a "public utility" as defined in the Federal Power
Act, as amended, or (iii) an "investment company" or an "affiliated person"
thereof or an "affiliated person" of any such "affiliated person," as such terms
are defined in the Investment Company Act of 1940, as amended.
The opinion of Shearman & Sterling shall cover such other matters relating
to the sale of the Notes as the Purchasers may reasonably request. With
respect to matters of fact on which such opinion is based, such counsel shall
be entitled to rely on appropriate certificates of public officials and
officers of the Guarantor and with respect to matters governed by the laws
of any jurisdiction other than the United States of America and the State of
New York, such counsel may rely upon the opinions of counsel deemed (and
stated in their opinion to be deemed) by them to be competent and reliable.
EXHIBIT C
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of November 26, 1996 (the "Guaranty"),
is made and given by ONEIDA LTD., a New York corporation (the "Guarantor"),
in favor of Allstate Life Insurance Company, Allstate Insurance Company and
Pacific Mutual Life Insurance Company (and their respective successors,
assignees or transferees) (the "Purchasers").
RECITALS
A. THC Systems, Inc., a New York corporation (the "Issuer"), and
the Purchasers have entered into a Note Agreement dated as of November 15, 1996
(as the same may hereafter be amended, restated, or otherwise modified from
time to time, the "Agreement") pursuant to which the Purchasers have agreed to
purchase from the Issuer Senior Notes due November 1, 2008 in the principal
amount of $35,000,000 (the "Notes").
B. It is a condition precedent to the obligation of the Purchasers to
purchase the Notes pursuant to the terms of the Agreement that this Guaranty be
executed and delivered by the Guarantor.
C. The Guarantor expects to derive benefits from the consummation of the
purchase of the Notes and finds it advantageous, desirable and in its best
interests to execute and deliver this Guaranty to the Purchasers.
NOW, THEREFORE, in consideration of the purchase of the Notes and
for other good and valuable consideration, the Guarantor hereby covenants and
agrees with the Purchasers as follows
Section l. Defined Terms. As used in this Guaranty, the following terms
shall have the meaning indicated:
"Obligations" shall mean all indebtedness, liabilities and obligations of
the Issuer to the Purchasers of every kind, nature or description under the
Agreement and the Notes.
"Person" shall mean any individual, limited liability company,
corporation, partnership, joint venture, firm, association, trust,
unincorporated organization, government or governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.
Section 2. The Guaranty. The Guarantor hereby absolutely and
unconditionally guarantees to the Purchasers the payment when due (whether at a
stated maturity or earlier by reason of acceleration or otherwise) and
performance of the Obligations.
Section 3. Guaranty Absolute. The Guarantor acknowledges and agrees that
Obligations may be created and continued in any amount, without affecting or
impairing the
liability of the Guarantor hereunder, and the Purchasers may pay (or allow for
the payment of) Obligations out of any sums received by or available to the
Purchasers on account of Obligations from the Issuer or any other Person (except
the Guarantor), from the properties of the Issuer or such other Persons, out
of collateral security or from any other source, and such payment (or
allowance) shall not reduce, affect or impair the liability of the Guarantor
hereunder. The liability of the Guarantor shall be a continuing liability and
shall not be affected by (nor shall anything herein contained be deemed a
limitation upon) the amount of credit which may be extended to the Issuer, the
number of transactions with the Issuer, repayments by the Issuer, or the
allocation by the Purchasers of repayments by the Issuer, it being the
understanding of the Guarantor that the Guarantor's liability shall continue
hereunder so long as there are any Obligations outstanding. Any payment made by
the Guarantor hereunder shall be effective to reduce or discharge such
liability only if accompanied by a written transmittal document. received by
the Purchasers, advising the Purchasers that such payment is made under this
Guaranty for such purpose.
Section 4. Continuing Guaranty. This Guaranty is an absolute, unconditional,
complete and continuing guaranty of payment and performance of the
Obligations, and the obligations of the Guarantor hereunder shall not be
released, in whole or in part, by any action or thing which might, but for this
provision of this Guaranty, be deemed a legal or equitable discharge of a surety
or guarantor, other than irrevocable payment and performance in full of the
Obligations. No notice of the Obligations to which this Guaranty may apply,
or of any renewal or extension thereof need be given to the Guarantor and none
of the foregoing acts shall release the Guarantor from liability hereunder. The
Guarantor hereby expressly waives (a) demand of payment, presentment,
protest, notice of dishonor, nonpayment or nonperformance on any and all forms
of the Obligations; (b) notice of acceptance of this Guaranty and notice of
any liability to which it may apply; (c) all other notices and demands of any
kind and description relating to the Obligations now or hereafter provided for
by any agreement, statute, law, rule or regulation; and (d) any and all defenses
of the Issuer pertaining to the Obligations except for the defense of
discharge by payment. The Guarantor shall not be exonerated with respect to
the Guarantor's liabilities under this Guaranty by any act or thing except
irrevocable payment and performance of the Obligations, it being the purpose
and intent of this Guaranty that the Obligations constitute the direct and
primary obligations of the Guarantor and that the covenants, agreements and
all obligations of the Guarantor hereunder be absolute, unconditional and
irrevocable. The Guarantor shall be and remain liable for any deficiency
remaining after foreclosure of any mortgage, deed of trust or security
agreement securing all or any part of the Obligations, whether or not the
liability of the Issuer or any other Person for such deficiency is discharged
pursuant to statute, judicial decision or otherwise. The acceptance of this
Guaranty by the Purchasers is not intended to, and does not release any
liability previously existing of any other guarantor or surety of an
indebtedness of the Issuer to the Purchasers.
Section 5. Other Transactions. Each of the Purchasers is expressly
authorized (a) to exchange, surrender or release with or without consideration
any or all collateral and security which may at any time be placed with them
or their agent by the Issuer or by any other Person, or to forward or deliver
any or all such collateral and security directly to the Issuer for collection
and remittance or for credit, or to collect the same in any other manner
without notice to the Guarantor, and (b) to amend, modify, extend or
supplement the Agreement, the Notes or other
instrument evidencing the Obligations or any part thereof and any other
agreement with respect to the Obligations, waive compliance by the Issuer or
any other Person with the respective terms thereof and settle or compromise
any of the Obligations without notice to the Guarantor and without in any
manner affecting the absolute liabilities of the Guarantor hereunder. No
invalidity, irregularity or unenforceability of all or any part of the
Obligations or of any security therefor or other recourse with respect
thereto shall affect, impair or be a defense to this Guaranty. The
liabilities of the Guarantor hereunder shall not be affected or impaired by any
failure, delay, neglect or omission on the part of the Purchasers to realize
upon any of the Obligations, or upon any collateral or security for any or all
of the Obligations, nor by the taking by the Purchasers of (or the failure to
take) any other guaranty or guaranties to secure the Obligations, nor by the
taking by the Purchasers of (or the failure to take or the failure to perfect
its security interest in or other Lien on) collateral or security of any kind.
No act or omission of the Purchasers, whether or not such action or failure to
act varies or increases the risk of, or affects the rights or remedies of the
Guarantor, shall affect or impair the obligations of the Guarantor hereunder.
The Guarantor acknowledges that this Guaranty is in effect and binding without
reference to whether this Guaranty is signed by any other Person or Persons,
that possession of this Guaranty by the Purchasers shall be conclusive evidence
of due delivery hereof by the Guarantor and that this Guaranty shall continue in
full force and effect, both as to the Obligations then existing and/or
thereafter created, notwithstanding the release of or extension of time to any
other guarantor of the Obligations or any part thereof.
Section 6. Actions Not Required. The Guarantor hereby waives any and all
right to cause a marshaling of the assets of the Issuer or any other action by
any court or other governmental body with respect thereto or to cause the
Purchasers to proceed against any security for the Obligations or any other
recourse which the Purchasers may have with respect thereto and further waives
any and all requirements that any Purchaser institutes any action or
proceeding at law or in equity, or obtain any judgment, against the Issuer or
any other Person, or with respect to any collateral security for the
Obligations, as a condition precedent to making demand on or bringing an action
or obtaining and/or enforcing a judgment against, the Guarantor upon this
Guaranty. The Guarantor further acknowledges that time is of the essence with
respect to the Guarantor's obligations under this Guaranty. Any remedy or right
hereby granted which shall be found to be unenforceable as to any Person
or under any circumstance, for any reason, shall in no way limit or prevent the
enforcement of such remedy or right as to any other Person or circumstance,
nor shall such unenforceability limit or prevent enforcement of any other
remedy or right hereby granted.
Section 7. No Subrogation. Notwithstanding any payment or payments made by
the Guarantor hereunder or any setoff or application of funds of the Guarantor
by the Purchasers, the Guarantor shall not be entitled to be subrogated to any
of the rights of the Purchasers against the Issuer or any other guarantor or any
collateral security or guaranty or right of offset held by the Purchasers for
the payment of the Obligations, nor shall the Guarantor seek or be entitled to
seek any contribution or reimbursement from the Issuer or any other guarantor in
respect of payments made by the Guarantor hereunder.
Section 8. Application of Payments. Any and all payments upon the
Obligations made by the Guarantor or by any other Person, and/or the proceeds
of any or all collateral or
security for any of the Obligations, may be applied by the Purchasers on such
items of the Obligations as the Purchasers may elect.
Section 9. Recovery of Payment. If any payment received by the Purchasers
and applied to the Obligations is subsequently set aside, recovered, rescinded
or required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Issuer or any other obligor),
the Obligations to which such payment was applied shall for the purposes of this
Guaranty be deemed to have continued in existence, notwithstanding such
application, and this Guaranty shall be enforceable as to such Obligations as
fully as if such application had never been made. References in this Guaranty
to amounts "irrevocably paid" or to "irrevocable payment" refer to payments that
cannot be set aside, recovered, rescinded or required to be returned for any
reason.
Section 10. Issuers' Financial Condition. The Guarantor is familiar with
the financial condition of the Issuer, and the Guarantor has executed and
delivered this Guaranty based on the Guarantor's own judgment and not in
reliance upon any statement or representation of the Purchasers. The
Purchasers shall have no obligation to provide the Guarantor with any advice
whatsoever or to inform the Guarantor at any time of the Purchasers' actions,
evaluations or conclusions on the financial condition or any other matter
concerning the Issuer.
Section 11. Remedies. All remedies afforded to the Purchasers by reason of
this Guaranty are separate and cumulative remedies and it is agreed that no one
of such remedies, whether or not exercised by the Purchasers, shall be
deemed to be in exclusion of any of the other remedies available to the
Purchasers and shall in no way limit or prejudice any other legal or equitable
remedy which the Purchasers may have hereunder and with respect to the
Obligations. Mere delay or failure to act shall not preclude the exercise or
enforcement of any rights and remedies available to the Purchasers.
Section 12. Bankruptcy of the Issuer. The Guarantor expressly agrees that
the liabilities and obligations of the Guarantor under this Guaranty shall not
in any way be impaired or otherwise affected by the institution by or
against the Issuer or any other Person of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar
proceedings for relief under any bankruptcy law or similar law for the relief
of debtors and that any discharge of any of the Obligations pursuant to any
such bankruptcy or similar law or other law shall not diminish, discharge or
otherwise affect in any way the obligations of the Guarantor under this
Guaranty, and that upon the institution of any of the above actions, such
obligations shall be enforceable against the Guarantor.
Section 13. Costs and Expenses. The Guarantor will pay or reimburse the
Purchasers on demand for all out-of-pocket expenses (including in each case
all reasonable fees and expenses of counsel) incurred by the Purchasers arising
out of or in connection with the enforcement of this Guaranty against the
Guarantor or arising out of or in connection with any failure of the
Guarantor to fully and timely perform the obligations of the Guarantor
hereunder.
Section 14. Waivers and Amendments. This Guaranty can be waived, modified,
amended, terminated or discharged only explicitly in a writing signed by the
Purchasers. A
waiver so signed shall be effective only in the specific instance and for the
specific purpose given.
Section 15. Notices. Any notice or other communication to any party in
connection with this Guaranty shall be in writing and shall be sent by manual
delivery, facsimile transmission (with a confirming copy sent by United States
mail (postage prepaid)), overnight courier or United States mail (postage
prepaid) addressed to such party at the address specified on the signature page
hereof, or at such other address as such party shall have specified to the
other party hereto in writing. All periods of notice shall be measured from
the date of delivery thereof if manually delivered, from the date of sending
thereof if sent by facsimile transmission, from the first business day after
the date of sending if sent by overnight courier, or from four days after the
date of mailing if mailed.
Section 16. Guarantor Acknowledgments. The Guarantor hereby acknowledges
that (a) counsel has advised the Guarantor in the negotiation, execution
and delivery of this Guaranty, (b) the Purchasers have no fiduciary relationship
to the Guarantor, the relationship being solely that of debtor and creditor,
and (c) no joint venture exists between the Guarantor and the Purchasers.
Section 17. Representations and Warranties. The Guarantor hereby
represents and warrants to the Purchasers that:
(a) The Guarantor is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the corporate power and authority and the legal right to
own and operate its properties and to conduct the business in which it is
currently engaged.
(b) The Guarantor has the corporate power and authority and the legal
right to execute and deliver, and to perform its obligations under, this
Guaranty and has taken all necessary corporate action to authorize such
execution, delivery and performance.
(c) This Guaranty constitutes its legal, valid and binding
obligation enforceable in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (whether enforcement is
sought by proceedings in equity or at law).
(d) The execution, delivery and performance of this Guaranty will not
(i) violate any provision of any law, statute, rule or regulation or any order,
writ, judgment, injunction, decree, determination or award of any court,
governmental agency or arbitrator presently in effect having applicability to
the Guarantor, (ii) violate or contravene any provision of its Articles of
Incorporation or bylaws, or (iii) result in a breach of or constitute a default
under any indenture, loan or credit agreement or any other agreement, lease or
instrument to which it is a party or by which it or any of its properties
may be bound or result in the creation of any lien thereunder. The Guarantor
is not in default under or in violation of any such law, statute, rule or
regulation, order, writ, judgment, injunction, decree, determination or award
or any such indenture, loan or
credit agreement or other agreement, lease or instrument in any case in which
the consequences of such default or violation could have a material adverse
effect on its business, operations, properties, assets or condition (financial
or otherwise).
(e) No order, consent, approval, license, authorization or validation
of, or filing recording or registration with, or exemption by, any
governmental or public body or authority is required on the part of the
Guarantor to authorize, or is required in connection with the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, this Guaranty.
(f) There are no actions, suits or proceedings pending or, to the
knowledge of the Guarantor, threatened against or affecting it or any of its
properties before any court or arbitrator, or any governmental department,
board, agency or other instrumentality which, if determined adversely to the
Guarantor, would have a material adverse effect on its business, operations,
property or condition (financial or otherwise) or on its ability to perform its
obligations hereunder.
(g) The Guarantor expects to derive benefits from the transactions
resulting in the creation of the Obligations. The Purchasers may rely
conclusively on the continuing warranty, hereby made, that the Guarantor
continues to be benefited by the Purchasers' extension of credit accommodations
to the Issuer and the Purchasers shall have no duty to inquire into or
confirm the receipt of any such benefits, and this Guaranty shall be effective
and enforceable by the Purchasers without regard to the receipt, nature
or value of any such benefits.
Section 18. Covenants. Until such time that the Obligations are paid in
full, unless the Purchasers shall otherwise consent in writing:
(a) Corporate Existence. The Guarantor will maintain its corporate
existence in good standing under the laws of its jurisdiction of
incorporation and its qualification to transact business in each jurisdiction
where failure so to qualify would permanently preclude the Guarantor from
enforcing its rights with respect to any material asset or would expose such the
Guarantor to any material liability.
(b) Insurance. The Guarantor shall maintain with financially sound and
reputable insurance companies such insurance as may be required by law and such
other insurance in such amounts and against such hazards as is customary in the
case of reputable firms engaged in the same or similar business and similarly
situated.
(c) Payment of Taxes and Claims. The Guarantor shall file all tax
returns and reports which are required by law to be filed by it and will pay
before they become delinquent all taxes, assessments and governmental charges
and levies imposed upon it or its property and all claims or demands of any
kind (including but not limited to those of suppliers, mechanics, carriers,
warehouses, landlords and other like Persons) which, if unpaid, might result
in the creation of a lien upon its property; provided that the foregoing items
need not be paid if they are being contested in good faith by appropriate
proceedings, and as long as the Guarantor's title to its property is not
materially adversely affected, its use of such property in the ordinary course
of its
business is not materially interfered with and adequate reserves with respect
thereto have been set aside on the Guarantor's books in accordance with GAAP.
(d) Inspection. The Guarantor shall permit any Person designated by
the Purchasers to visit and inspect any of the properties, corporate books
and financial records of the Guarantor, to examine and to make copies of the
books of accounts and other financial records of the Guarantor, and to discuss
the affairs, finances and accounts of the Guarantor with, and to be advised as
to the same by, its officers at such reasonable times and intervals as the
Purchasers may designate.
(e) Maintenance of Properties. The Guarantor will maintain its
properties used or useful in the conduct of its business in good condition,
repair and working order, and supplied with all necessary equipment, and
make all necessary repairs, renewals, replacements, betterments and improvements
thereto, all as may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
(f) Books and Records. The Guarantor will keep adequate and proper
records and books of account in which full and correct entries will be made of
its dealings, business and affairs.
(g) Compliance. The Guarantor will comply in all material respects
with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject, provided, however, that failure so
to comply shall not be a breach of this covenant if such failure does not
have, or is not reasonably expected to have, a materially adverse effect on
the properties, business, prospects or condition (financial or otherwise) of
the Guarantor and the Guarantor is acting in good faith and with reasonable
dispatch to cure such noncompliance.
(h) Environmental Matters Reporting. The Guarantor will observe and
comply with, all laws, rules, regulations and orders of any government or
government agency relating to health, safety, pollution, hazardous materials or
other environmental matters to the extent non-compliance could result in a
material adverse effect on the Guarantor. The Guarantor will give the Purchasers
prompt written notice of any violation as to any environmental matter by
the Guarantor and of the commencement of any judicial or administrative
proceeding relating to health, safety or environmental matters (a) in which an
adverse determination or result could result in the revocation of or have a
material adverse effect on any operating permits, air emission permits, water
discharge permits, hazardous waste permits or other permits held by the
Guarantor which are material to the operations of such Guarantor, or (b) which
will or threatens to impose a material liability on such Guarantor to any Person
or which will require a material expenditure by the Guarantor to cure any
alleged problem or violation.
(i) Merger. The Guarantor will not merge or consolidate or enter into
any analogous reorganization or transaction with any Person or liquidate, wind
up or dissolve itself (or suffer any liquidation or dissolution) provided,
however, the Guarantor may be merged with or liquidated into another Person in
accordance with the terms of the Agreement.
(j) Sale of Assets. The Guarantor will not sell, transfer, lease or
otherwise convey all or any substantial part of its assets except for sales
and leases of inventory in the ordinary course of business and except for
sales or other transfers permitted by the terms of the Agreement.
(k) Negative Pledge. The Guarantor will not enter into any agreement,
bond, note or other instrument with or for the benefit of any Person other than
the Purchasers and the banks which are lenders to the Guarantor pursuant to that
Credit Agreement dated as of January 19, 1996 which would prohibit the
Guarantor from granting, or otherwise limit the ability of the Guarantor to
grant to the Purchasers a Lien on any assets or properties of the Guarantor.
Section 19. Continuing Guaranty; Assignments under Agreement. This Guaranty
shall (a) remain in full force and effect until irrevocable payment in
full of the Obligations, (b) be binding upon the Guarantor, its successors
and assigns and (c) inure to the benefit of, and be enforceable by, the
Purchasers and its respective successors, transferees, and assigns. Without
limiting the generality of the foregoing clause (c), the Purchasers may
sell, assign or otherwise transfer all or any portion of its rights and
obligations under the Agreement to any other Persons to the extent and in the
manner provided in the Agreement and may similarly transfer all or any portion
of its rights under this Guaranty to such Persons.
Section 20. Revocation. Notwithstanding any other provision hereof, the
Guarantor may revoke this Guaranty prospectively as to future transactions by
written notice to that effect actually received by the Purchasers. No such
revocation shall release, impair or affect in any manner any liability hereunder
with respect to Obligations created, contracted, assumed or incurred prior to
receipt by the Purchasers of written notice of revocation, or Obligations
created, contracted, assumed or incurred after receipt of such notice pursuant
to any contract entered into by the Purchasers prior to receipt of such notice,
or any renewals or extensions thereof, theretofore or thereafter made, or all
other costs, expenses and attorneys' fees arising from such Obligations.
Section 21. Governing Law and Construction. THE VALIDITY, CONSTRUCTION
AND ENFORCEABILITY OF THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF ILLINOIS, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Whenever possible, each provision of this Guaranty and any other statement,
instrument or transaction contemplated hereby or relating hereto shall be
interpreted in such manner as to be effective and valid under such applicable
law, but, if any provision of this Guaranty or any other statement, instrument
or transaction contemplated hereby or relating hereto shall be held to
be prohibited or invalid under such applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Guaranty or any other statement, instrument or transaction contemplated
hereby or relating hereto.
Section 22. Consent to Jurisdiction. AT THE OPTION OF THE PURCHASERS, THIS
GUARANTY MAY BE ENFORCED IN ANY FEDERAL COURT OR ILLINOIS STATE COURT SITTING
IN CHICAGO, ILLINOIS; AND THE GUARANTOR CONSENTS TO THE JURISDICTION AND VENUE
OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT
CONVENIENT. IN THE EVENT
THE GUARANTOR COMMENCES ANY ACTION IN ANOTHER JURISDICTION OR VENUE UNDER ANY
TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP
CREATED BY THIS GUARANTY, THE PURCHASERS
AT THEIR OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH TRANSFER CANNOT
BE ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.
Section 23. Counterparts. This Guaranty may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
Section 24. General. All representations and warranties contained in this
Guaranty or in any other agreement between the Guarantor and the Purchasers
shall survive the execution, delivery and performance of this Guaranty and
the creation and payment of the Obligations. Captions in this Guaranty are for
reference and convenience only and shall not affect the interpretation or
meaning of any provision of this Guaranty.
IN WITNESS WHEREOF, the Guarantor has executed this Guaranty as of the date
first above written.
ONEIDA LTD.
By: /s/ Edward W. Thoma
Title: Senior Vice President, Finance
Address for the Purchasers: Address for the Guarantor:
Allstate Life Insurance Company Oneida Ltd.
Private Placements Department 163 Kenwood Avenue
3075 Sanders Road, G3A Oneida, New York 13421
Northbrook, IL 60062-7127
Allstate Insurance Company
Private Placements Department
3075 Sanders Road, G3A
Northbrook, IL 60062-7127
Pacific Mutual Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
EXHIBIT D
SUBSIDIARY GUARANTEE AGREEMENT
To: Allstate Life Insurance Company ("Allstate") ("Noteholder")
3075 Sanders Road
Northbrook, IL 60062-7127
Allstate Insurance Company ("Allstate Insurance") ("Noteholder")
3075 Sanders Road
Northbrook, IL 60062-7127
Pacific Mutual Life Insurance Company ("Pacific Mutual") ("Noteholder")
700 Newport Center
Newport Beach, CA 92660
November 26, 1996
DEFINITIONS
In this Agreement, the words we, our, us, ours and Guarantor shall mean the
corporation executing and delivering this Agreement. The words you, your and
yours mean each of the Noteholders to whom this Agreement is addressed, and each
transferee or assignee of any Noteholder. All capitalized terms not defined
herein shall have the meanings given to those terms in such Note Agreement.
GUARANTEE
For value received and in order to induce you to purchase senior notes
of THC Systems, Inc., a New York corporation ("Borrower"), Guarantor
hereby absolutely and unconditionally, jointly with any other party and
severally, guarantees unto each of you, your successors and assigns, the
payment whenever due, by acceleration or otherwise, of any and all
debts, liabilities and obligations of Borrower to you under a Note Agreement
dated as of November 15, 1996 among Borrower, Oneida Ltd., Allstate Life
Insurance Company, Allstate Insurance Company and Pacific Mutual Life
Insurance Company (the "Note Agreement"), without deduction by reason of
setoff, defense or counterclaim, without regard to the enforcement of any
other guarantee or any other obligations or security, and whether or not such
debts, liabilities or obligations are now existing or hereafter incurred,
including any extensions and renewals thereof or a part thereof, together with
interest, premium, fees, charges, expenses and costs of
enforcement or collection (including reasonable attorney's fees of both outside
counsel and the allocated costs of in-house counsel) (the "Liabilities");
provided, however, that the liability of Guarantor under this Agreement shall
not exceed the Subsidiary Guarantee Amount as defined below, together with
expenses and the costs of enforcement (including reasonable attorney's fees).
You may make loans to, purchase debt of or extend credit to Borrower in excess
of this limit without affecting the liability of Guarantor hereunder, but the
liability of Guarantor shall not exceed this limitation.
The following terms as used herein shall be defined as follows:
Subsidiary Guarantee Amount - The maximum liability of Guarantor, as required
by the Banks pursuant to the Bank Agreement.
Bank Agreement - That Credit Agreement dated as of January 19, 1996, among
Oneida Ltd. The Chase Manhattan Bank, N.A., as Agent and the banks signatory
to such Agreement, as such Agreement may be from time to time amended. The
term "Bank Agreement" shall also include replacement or additional credit
agreements entered into by the Guarantor or any subsidiary with banks or other
institutional lender
Banks - The bank lenders to the Guarantor pursuant to the Bank Agreement.
Subsidiary Guarantors - Each of Buffalo China, Inc. and Camden Wire Co., Inc.
and each Restricted Subsidiary created or acquired after January 19, 1996,
which becomes a "Guarantor" as such term is defined in the Bank Agreement.
All payments required to be made by Guarantor under this Agreement shall be
made to the Noteholders or their transferees or assignees at the addresses set
forth in the Note Agreement.
YOUR RIGHTS
You may at any time without notice or demand of any kind, the receipt
of which is expressly waived, without regard to any demands or requests
by Guarantor and without thereby impairing Guarantor's obligations
hereunder, releasing Guarantor hereunder or incurring any liability to
Guarantor:
1. Change the rate of interest, the time for repayment, the amount
outstanding or any other provisions with respect to any of the Liabilities,
grant any extension, compromise, settlement, release or discharge (in whole or
in part) to Borrower or any other party liable with Borrower, and sell,
exchange, release, impair or compromise, or fail to perfect or omit to collect
or enforce, any collateral security or other guarantee held by you, or exchange,
substitute, deal with or take any additional collateral security;
2. Realize on and apply any sums of money or other collateral held by you,
whether or not deposited by Guarantor, to such obligation or obligations as you
may elect, whether
guaranteed hereby or not, without regard to any rights of Guarantor, or any of
them, in respect to the application thereof;
3. Waive, release, delay in the exercise of, or refrain from
exercising, any of your rights (and the single or partial exercise of any such
right or rights shall not preclude any other or further exercise thereof);
4. Fail to give notice to Guarantor of an event of default in the terms
and conditions of the Liabilities; or
5. Take any other action, or engage in a course of conduct, which might
constitute a legal or equitable discharge or defense of a surety or
guarantor or which might otherwise limit recourse against Guarantor.
RIGHT TO SET OFF
All sums to the credit of the Guarantor and any property of
the Guarantor in your possession at any time shall be deemed held by you as
security for the Liabilities and Guarantor hereby gives you the right, without
notice to Guarantor, to set off such sums against any obligation of Guarantor
hereunder.
Your books and records showing the account and amounts outstanding
between you and the Borrower shall he admissible in evidence in any action
or proceeding, and shall constitute prima facie proof thereof. You may take
or refrain from taking any of the actions authorized under this Guarantee
without notice of any kind to Guarantor.
NATURE OF GUARANTEE
Guarantor hereby waives any and all defenses based on the Liabilities and
any right to assert any defenses that Borrower may have in connection with the
Liabilities. No invalidity, irregularity or unenforceability of all or any part
of the Liabilities or of the interest and penalties thereon, expenses of
collection thereof, or of any collateral security therefor, shall affect, impair
or be a defense to this Guarantee, and this Guarantee shall be enforceable as
to all of the Liabilities, despite any petition in bankruptcy brought by or
against the Borrower or despite adjustment of all or any part of the
Liabilities in insolvency proceedings or pursuant to some other compromise with
creditors.
Guarantor's liability hereunder is in addition to and independent of any
other liabilities which Guarantor has incurred or assumed, or may hereafter
incur or assume, by way of endorsement, separate guarantee agreement, or in
any other manner, with respect to all or any part of the Liabilities
guaranteed hereby. This Guarantee does not supersede nor limit any such other
liabilities of Guarantor and your rights and remedies under and pursuant to
this Guarantee and any such other liabilities are cumulative and may be
exercised singly or concurrently.
Guarantor waives notice of protest and any right to notice of
any action you take with respect to the Liabilities. This Guarantee is a
guarantee of payment and not of collection. As a condition of payment or
performance by Guarantor, you are not required to enforce any remedies against
the Borrower or any other party liable to you on account of the Liabilities;
nor are you required to seek to enforce or resort to any remedies with respect
to any security interest, lien or encumbrance granted to you by the Borrower or
any other party. This Agreement remains fully enforceable irrespective of any
defenses Borrower may assert on the Liabilities, including, but not limited
to, failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction, and usury.
Guarantor hereby waives and renounces any and all rights that it has or may
have for subrogation, indemnity, reimbursement or contribution against the
Borrower for amounts paid by the Guarantor pursuant to this Guarantee.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimbursement by the Guarantor against the estate of the
Borrower within the meaning of Section 101 of the Bankruptcy Code, and to
prevent the Guarantor from constituting a creditor of the Borrower in respect
of such reimbursement under Section 547(b) of the Bankruptcy Code in the event
of a subsequent case involving the Borrower. Notwithstanding the foregoing, if
it is clearly established, by an amendment to the Bankruptcy Code or by a
final, non-appealable court decision binding on the Bankruptcy Court for the
Northern District of New York, that a right of subrogation, indemnity,
reimbursement or contribution in favor of Guarantor against the Borrower
for amounts paid by Guarantor pursuant to this Guarantee would not render
Guarantor a creditor of Borrower under the Bankruptcy Code, the foregoing waiver
in this paragraph shall become ineffective.
REPAYMENT OR RECOVERY OF CLAIMS
If claim is ever made upon you for repayment or recovery of any amount
or amounts received by you in payment or on account of any of the
Liabilities, and you repay all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body, or (b) any
settlement or compromise of any such claim effected by you with any such
claimant (including Borrower), then and in such event Guarantor agrees that
any such judgment, decree, order, settlement or compromise shall be binding
upon Guarantor, notwithstanding any termination hereof or the cancellation
of any such Liabilities, and Guarantor shall be and remain liable to you
hereunder for the amounts so repaid or recovered to the same extent as if
such amount had never originally been received by you.
ORGANIZATION AND AUTHORITY OF GUARANTOR
Guarantor does hereby represent and warrant that:
1. Guarantor is a corporation duly organized, validity existing and
in good standing under the laws of its jurisdiction of incorporation;
2. Guarantor has all requisite corporate power and authority and all
necessary licenses and permits to own and operate its assets and to carry on its
business as now conducted and as presently proposed to be conducted;
3. Guarantor is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each jurisdiction where
the character of its assets or the nature of its activities makes such
qualification necessary (including, without limitation, New York);
4. Guarantor has the lawful authority to enter into this Agreement and by
proper corporate action, where applicable, has been duly authorized to execute,
deliver and perform this Agreement;
5. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby nor the fulfillment of or
compliance with the provisions of this Agreement will conflict with or result in
a breach of or violate any provision of law, any order of any court or other
agency of government, the Certificate of Incorporation or By-Laws of Guarantor,
or any of the terms, conditions or provisions of any corporate restriction or
any agreement or instrument to which Guarantor is a party or by which it or
any of its assets are bound, or will constitute a default under any of the
foregoing, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the assets of Guarantor under
the terms of any such instrument or agreement;
6. There are no actions, suits or proceedings pending, or, to the
knowledge of Guarantor, threatened against or affecting Guarantor or any of its
property or rights in any court or by or before any governmental authority or
arbitration board, tribunal or governmental instrumentality or agency which
involve the possibility of materially and adversely affecting the condition
(financial or otherwise) of Guarantor, or the ability of Guarantor to execute,
deliver or perform this Agreement; Guarantor is not in default with respect
to any applicable order of any court, governmental authority or arbitration
board or tribunal;
7. Guarantor has heretofore furnished all requested financial statements
or information requested by the Noteholders in connection with this
transaction; said statements and information are correct and complete, and
present fairly the financial condition of Guarantor on the dates thereof and
the results of its operations for the periods then ended, and show all known
liabilities, direct or contingent, of Guarantor as of the date thereof, and
each financial statement referred to herein was prepared in accordance with
generally accepted accounting principles, consistently applied;
8. There has been no material adverse change in the business, assets,
condition (financial or otherwise) of Guarantor since the date of the above
described financial statements; and
9. Guarantor and Borrower are engaged in business as an integrated group
the operation of which requires financing on a consolidated basis. The
Guarantor (a) is not and has
not been rendered by the incurrence of its obligations hereunder unable to
pay its indebtedness and obligations (including the Liabilities hereunder) as
and when they mature, and (b) has assets with a book value which exceeds
the total amount of its liabilities on existing obligations (including the
Liabilities hereunder). To the best of Guarantor's knowledge, there is
nothing which would indicate that the book value of its assets does not
approximate the fair market value of such assets.
MISCELLANEOUS
1. Guarantor agrees that any action involving this Guarantee may be
brought by you in any Federal or New York State Court in Onondaga County in the
State of New York, and in any such action Guarantor consents that service of
process upon Guarantor shall be effective if mailed to Guarantor by registered
or certified mail, return receipt requested, at 658 Bailey Avenue, Buffalo, New
York 14204 or if service is otherwise made at that address. The Guarantor
hereby voluntarily and irrevocably waives any right to a trial by jury in any
action, suit or proceeding instituted by or against the Guarantor arising out
of or in connection with this Agreement.
2. This instrument shall be binding upon Guarantor's successors and
assigns and shall inure to your benefit. Your rights and benefits hereunder
shall, if you so direct, inure to any party acquiring any interest in the
Liabilities or any part thereof.
3. This instrument contains the entire agreement between you and
Guarantor and cannot be changed orally. Guarantor expressly disclaims any
reliance on any oral representation made by you. No failure by you to exercise
any right hereunder shall be deemed a waiver thereof, nor shall any single or
partial exercise by you of any right hereunder preclude any other or further
exercise thereof, and no waiver by you of any right hereunder shall operate as
a waiver of any other right.
4. This Agreement and the transactions evidenced thereby shall be
construed under the laws of the State of New York.
5. If any provision of this Agreement is unenforceable in whole or in part
for any reason, the remaining provisions shall continue to be effective.
IN WITNESS WHEREOF, Guarantor has signed this instrument on the date first
hereinabove written.
BUFFALO CHINA, INC.
By: /s/ William D. Matthews
Title: Chairman of the Board
STATE OF NEW YORK ) ss:
COUNTY OF MADISON)
On this day of November 19, 1996, before me personally appeared William
D. Matthews to me personally known, did depose and say that he/she is the
Chairman of Buffalo China, the corporation described in and which executed the
foregoing instrument, and that he/she executed the same by order of the Board of
Directors of said corporation
/s/ Donna G. McCorduck
Notary Public
EXHIBIT D
SUBSIDIARY GUARANTEE AGREEMENT
To: Allstate Life Insurance Company ("Allstate") ("Noteholder")
3075 Sanders Road
Northbrook, IL 60062-7127
Allstate Insurance Company ("Allstate Insurance") ("Noteholder")
3075 Sanders Road
Northbrook, IL 60062-7127
Pacific Mutual Life Insurance Company ("Pacific Mutual") ("Noteholder")
700 Newport Center
Newport Beach, CA 92660
November 26, 1996
DEFINITIONS
In this Agreement, the words we, our, us, ours and Guarantor shall mean the
corporation executing and delivering this Agreement. The words you, your and
yours mean each of the Noteholders to whom this Agreement is addressed, and each
transferee or assignee of any Noteholder. All capitalized terms not defined
herein shall have the meanings given to those terms in such Note Agreement.
GUARANTEE
For value received and in order to induce you to purchase senior notes
of THC Systems, Inc., a New York corporation ("Borrower"), Guarantor
hereby absolutely and unconditionally, jointly with any other party and
severally, guarantees unto each of you, your successors and assigns, the
payment whenever due, by acceleration or otherwise, of any and all
debts, liabilities and obligations of Borrower to you under a Note Agreement
dated as of November 15, 1996 among Borrower, Oneida Ltd., Allstate Life
Insurance Company, Allstate Insurance Company and Pacific Mutual Life
Insurance Company (the "Note Agreement"), without deduction by reason of
setoff, defense or counterclaim, without regard to the enforcement of any
other guarantee or any other obligations or security, and whether or not such
debts, liabilities or obligations are now existing or hereafter incurred,
including any extensions and renewals thereof or a part thereof, together with
interest, premium, fees, charges, expenses and costs
of enforcement or collection (including reasonable attorney's fees of both
outside counsel and the allocated costs of in-house counsel) (the
"Liabilities"); provided, however, that the liability of Guarantor under this
Agreement shall not exceed the Subsidiary Guarantee Amount as defined below,
together with expenses and the costs of enforcement (including reasonable
attorney's fees). You may make loans to, purchase debt of or extend credit to
Borrower in excess of this limit without affecting the liability of Guarantor
hereunder, but the liability of Guarantor shall not exceed this limitation.
The following terms as used herein shall be defined as follows:
Subsidiary Guarantee Amount - The maximum liability of Guarantor, as required
by the Banks pursuant to the Bank Agreement.
Bank Agreement - That Credit Agreement dated as of January 19, 1996, among
Oneida Ltd. The Chase Manhattan Bank, N.A., as Agent and the banks signatory
to such Agreement, as such Agreement may be from time to time amended. The
term "Bank Agreement" shall also include replacement or additional credit
agreements entered into by the Guarantor or any subsidiary with banks or
other institutional lenders.
Banks - The bank lenders to the Guarantor pursuant to the Bank Agreement.
Subsidiary Guarantors - Each of Buffalo China, Inc. and Camden Wire Co., Inc.
and each Restricted Subsidiary created or acquired after January 19, 1996,
which becomes a "Guarantor" as such term is defined in the Bank Agreement.
All payments required to be made by Guarantor under this Agreement shall be
made to the Noteholders or their transferees or assignees at the addresses set
forth in the Note Agreement.
YOUR RIGHTS
You may at any time without notice or demand of any kind, the receipt
of which is expressly waived, without regard to any demands or requests
by Guarantor and without thereby impairing Guarantor's obligations
hereunder, releasing Guarantor hereunder or incurring any liability to
Guarantor:
1. Change the rate of interest, the time for repayment, the amount
outstanding or any other provisions with respect to any of the Liabilities,
grant any extension, compromise, settlement, release or discharge (in whole or
in part) to Borrower or any other party liable with Borrower, and sell,
exchange, release, impair or compromise, or fail to perfect or omit to collect
or enforce, any collateral security or other guarantee held by you, or exchange,
substitute, deal with or take any additional collateral security;
2. Realize on and apply any sums of money or other collateral held by you,
whether
or not deposited by Guarantor, to such obligation or obligations as you may
elect, whether guaranteed hereby or not, without regard to any rights of
Guarantor, or any of them, in respect to the application thereof;
3. Waive, release, delay in the exercise of, or refrain from
exercising, any of your rights (and the single or partial exercise of any such
right or rights shall not preclude any other or further exercise thereof);
4. Fail to give notice to Guarantor of an event of default in
the terms and conditions of the Liabilities; or
5. Take any other action, or engage in a course of conduct, which might
constitute a legal or equitable discharge or defense of a surety or
guarantor or which might otherwise limit recourse against Guarantor.
RIGHT TO SET OFF
All sums to the credit of the Guarantor and any property of the
Guarantor in your possession at any time shall be deemed held by you as security
for the Liabilities and Guarantor hereby gives you the right, without notice
to Guarantor, to set off such sums against any obligation of Guarantor
hereunder.
Your books and records showing the account and amounts outstanding
between you and the Borrower shall he admissible in evidence in any action
or proceeding, and shall constitute prima facie proof thereof You may take
or refrain from taking any of the actions authorized under this Guarantee
without notice of any kind to Guarantor.
NATURE OF GUARANTEE
Guarantor hereby waives any and all defenses based on the Liabilities and
any right to assert any defenses that Borrower may have in connection with the
Liabilities. No invalidity, irregularity or unenforceability of all or any part
of the Liabilities or of the interest and penalties thereon, expenses of
collection thereof, or of any collateral security therefor, shall affect, impair
or be a defense to this Guarantee, and this Guarantee shall be enforceable as
to all of the Liabilities, despite any petition in bankruptcy brought by or
against the Borrower or despite adjustment of all or any part of the
Liabilities in insolvency proceedings or pursuant to some other compromise with
creditors.
Guarantor's liability hereunder is in addition to and independent of any
other liabilities which Guarantor has incurred or assumed, or may hereafter
incur or assume, by way of endorsement, separate guarantee agreement, or in
any other manner, with respect to all or any part of the Liabilities
guaranteed hereby. This Guarantee does not supersede nor limit any such other
liabilities of Guarantor and your rights and remedies under and pursuant to
this Guarantee and any such other liabilities are cumulative and may be
exercised singly or concurrently.
Guarantor waives notice of protest and any right to notice of any
action you take with respect to the Liabilities. This Guarantee is a guarantee
of payment and not of collection. As a condition of payment or performance
by Guarantor, you are not required to enforce any remedies against the Borrower
or any other party liable to you on account of the Liabilities; nor are you
required to seek to enforce or resort to any remedies with respect to any
security interest, lien or encumbrance granted to you by the Borrower or any
other party. This Agreement remains fully enforceable irrespective of any
defenses Borrower may assert on the Liabilities, including, but not
limited to, failure of consideration, breach of warranty, payment,
statute of frauds, statute of limitations, accord and satisfaction and
usury.
Guarantor hereby waives and renounces any and all rights that it has or may
have for subrogation, indemnity, reimbursement or contribution against the
Borrower for amounts paid by the Guarantor pursuant to this Guarantee.
This waiver is expressly intended to prevent the existence of any claim in
respect to such reimbursement by the Guarantor against the estate of the
Borrower within the meaning of Section 101 of the Bankruptcy Code, and to
prevent the Guarantor from constituting a creditor of the Borrower in respect
of such reimbursement under Section 547(b) of the Bankruptcy Code in the event
of a subsequent case involving the Borrower. Notwithstanding the foregoing, if
it is clearly established, by an amendment to the Bankruptcy Code or by a
final, non-appealable court decision binding on the Bankruptcy Court for the
Northern District of New York, that a right of subrogation, indemnity,
reimbursement or contribution in favor of Guarantor against the Borrower
for amounts paid by Guarantor pursuant to this Guarantee would not render
Guarantor a creditor of Borrower under the Bankruptcy Code, the foregoing waiver
in this paragraph shall become ineffective.
REPAYMENT OR RECOVERY OF CLAIMS
If claim is ever made upon you for repayment or recovery of any amount or
amounts received by you in payment or on account of any of the Liabilities, and
you repay all or part of said amount by reason of (a) any judgment, decree or
order of any court or administrative body, or (b) any settlement or compromise
of any such claim effected by you with any such claimant (including Borrower),
then and in such event Guarantor agrees that any such judgment, decree,
order, settlement or compromise shall be binding upon Guarantor,
notwithstanding any termination hereof or the cancellation of any such
Liabilities, and Guarantor shall be and remain liable to you hereunder for
the amounts so repaid or recovered to the same extent as if such amount had
never originally been received by you.
ORGANIZATION AND AUTHORITY OF GUARANTOR
Guarantor does hereby represent and warrant that:
1. Guarantor is a corporation duly organized, validity existing and
in good standing under the laws of its jurisdiction of incorporation;
2. Guarantor has all requisite corporate power and authority and all
necessary licenses and permits to own and operate its assets and to carry on its
business as now conducted and as presently proposed to be conducted;
3. Guarantor is duly qualified and is authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where the
character of its assets or the nature of its activities makes such
qualification necessary (including, without limitation, New York);
4. Guarantor has the lawful authority to enter into this Agreement and by
proper corporate action, where applicable, has been duly authorized to execute,
deliver and perform this Agreement;
5. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby nor the fulfillment
of or compliance with the provisions of this Agreement will conflict with or
result in a breach of or violate any provision of law, any order of any court or
other agency of government, the Certificate of Incorporation or By-Laws of
Guarantor, or any of the terms, conditions or provisions of any corporate
restriction or any agreement or instrument to which Guarantor is a party or by
which it or any of its assets are bound, or will constitute a default under any
of the foregoing, or result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of the assets of Guarantor under
the terms of any such instrument or agreement;
6. There are no actions, suits or proceedings pending, or, to the
knowledge of Guarantor, threatened against or affecting Guarantor or any of its
property or rights in any court or by or before any governmental authority or
arbitration board, tribunal or governmental instrumentality or agency which
involve the possibility of materially and adversely affecting the condition
(financial or otherwise) of Guarantor, or the ability of Guarantor to execute,
deliver or perform this Agreement; Guarantor is not in default with respect
to any applicable order of any court, governmental authority or arbitration
board or tribunal;
7. Guarantor has heretofore furnished all requested financial
statements or information requested by the Noteholders in connection with this
transaction; said statements and information are correct and complete, and
present fairly the financial condition of Guarantor on the dates thereof and the
results of its operations for the periods then ended, and show all known
liabilities, direct or contingent, of Guarantor as of the date thereof, and
each financial statement referred to herein was prepared in accordance with
generally accepted accounting principles, consistently applied;
8. There has been no material adverse change in the business, assets,
condition (financial or otherwise) of Guarantor since the date of the above
described financial statements; and
9. Guarantor and Borrower are engaged in business as an integrated group
the operation of which requires financing on a consolidated basis. The
Guarantor (a) is not and has
not been rendered by the incurrence of its obligations hereunder unable to
pay its indebtedness and obligations
(including the Liabilities hereunder) as and when they mature, and (b) has
assets with a book value which exceeds the total amount of its
liabilities on existing obligations (including the Liabilities hereunder). To
the best of Guarantor's knowledge, there is nothing which would indicate
that the book value of its assets does not approximate the fair market value
of such assets.
MISCELLANEOUS
1. Guarantor agrees that any action involving this Guarantee may be
brought by you in any Federal or New York State Court in Onondaga County in the
State of New York, and in any such action Guarantor consents that service of
process upon Guarantor shall be effective if mailed to Guarantor by registered
or certified mail, return receipt requested, at 658 Bailey Avenue, Buffalo, New
York 14204 or if service is otherwise made at that address. The Guarantor
hereby voluntarily and irrevocably waives any right to a trial by jury in any
action, suit or proceeding instituted by or against the Guarantor arising out
of or in connection with this Agreement.
2. This instrument shall be binding upon Guarantor's successors and
assigns and shall inure to your benefit. Your rights and benefits hereunder
shall, if you so direct, inure to any party acquiring any interest in the
Liabilities or any part thereof.
3. This instrument contains the entire agreement between you and
Guarantor and cannot be changed orally. Guarantor expressly disclaims any
reliance on any oral representation made by you. No failure by you to exercise
any right hereunder shall be deemed a waiver thereof, nor shall any single or
partial exercise by you of any right hereunder preclude any other or further
exercise thereof, and no waiver by you of any right hereunder shall operate as
a waiver of any other right.
4. This Agreement and the transactions evidenced thereby shall be
construed under the laws of the State of New York.
5. If any provision of this Agreement is unenforceable in whole or in part
for any reason, the remaining provisions shall continue to be effective.
IN WITNESS WHEREOF, Guarantor has signed this instrument on the
date first hereinabove written.
CAMDEN WIRE CO., INC.
By: /s/ George L. Miller III
Title: Vice President
STATE OF NEW YORK ) ss:
COUNTY OF MADISON)
On this day of November 26, 1996, before me personally appeared George L.
Miller to me personally known, did depose and say that he/she is the Vice
President of Camden Wire, the corporation described in and which executed the
foregoing instrument, and that he/she executed the same by order of the Board of
Directors of said corporation.
/s/ Catherine H. Suttmeier
Notary Public
EXHIBIT E
SUBORDINATION AGREEMENT
This Subordination Agreement (the "Agreement"), dated as of November 26,
1996, is among ONEIDA LTD., a New York corporation ("Parent"), BUFFALO CHINA,
INC. ("Buffalo"), THC SYSTEMS, NC. ("THC"), and CAMDEN WIRE CO., INC.
("Camden"), each a New York corporation and the holders of the Notes
referred to below (collectively referred to herein as the "Noteholders").
RECITALS
A. Allstate Life Insurance Company, Allstate Insurance Company, and
Pacific Mutual Life Insurance Company (collectively, the "1996 Noteholders") and
the Parent and THC are parties to a Note Agreement dated as of November 15,
1996 (the "1996 Note Agreement") pursuant to which the 1996 Noteholders
purchased Senior Notes issued by THC and guaranteed by the Parent in the
aggregate principal amount of $35,000,000 (the "1996 Notes") in accordance with
the terms of the 1996 Note Agreement.
B. Allstate Life Insurance Company and Pacific Mutual Life Insurance
Company (collectively, the "1992 Noteholders"), and the Parent are parties to
a Note Agreement dated as January 1, 1992 (the "1992 Note Agreement") pursuant
to which the 1992 Noteholders purchased Senior Notes issued by the Parent in
the aggregate principal amount of $30,000,000 (the "1992 Notes") in accordance
with the terms of the 1992 Note Agreement. (The 1992 Note Agreement and the
1996 Note Agreement, as such agreements may be from time to time amended,
modified or supplemented, are hereinafter collectively referred to as the
"Note Agreements" and the 1992 Notes and the 1996 Notes are hereinafter
collectively referred to as the "Notes").
C. Buffalo, Camden and THC are Restricted Subsidiaries (as such term
is defined in the Note Agreements). Each of Buffalo, Camden and THC has
executed and delivered to the 1992 Noteholders a Subsidiary Guarantee Agreement
dated as of November 1, 1996 (the "1992 Guarantee Agreement") guaranteeing
repayment of the 1992 Notes and other obligations owed pursuant to the 1992 Note
Agreement.
D. Buffalo and Camden have executed and delivered to the 1996
Noteholders a Subsidiary Guarantee Agreement dated as of November 26, 1996 (the
"1996 Guarantee Agreement") guaranteeing repayment of the 1996 Notes and other
obligations owed pursuant to the 1996 Note Agreement.
E. Parent from time to time extends credit to the Guarantors in the form
of notes, advances, accounts receivable, administrative services and
expenses, and other inter-company accommodations made by the Parent to the
Guarantors.
F. The 1996 Noteholders, as a condition to entering into the 1996 Note
Agreement and purchasing Notes thereunder, and the 1992 Noteholders, as a
condition to granting a Waiver dated as of November 1, 1996 with respect to
certain covenants in the 1992 Note Agreement, have required the Parent and the
Guarantors to execute and deliver this Agreement.
NOW, THEREFORE, in order to induce the Noteholders, and the 1992
Noteholders, as a condition to granting a Waiver dated as of November l, 1996
with respect to certain covenants in the 1992 Note Agreement, to purchase the
1996 Notes and in consideration thereof, the Parent and the Guarantors agree
as follows:
l. Definitions. As used herein, the following terms shall have the
following meanings:
1.1 "Event of Default" shall mean an Event of Default as defined in
the Note Agreements (after giving effect to any applicable cure period) which is
not waived in writing by the Noteholders.
1.2 "Loan Documents" shall mean all credit accommodations, notes, note
agreements, and any other agreements and documents, now or hereafter existing,
creating, evidencing, guarantying, securing or relating to any or all of the
Senior Liabilities, together with all amendments, modifications, renewals, or
extensions thereof.
1.3 "Obligation" shall mean, (a) in the case of the 1992 Notes, the
Parent and (b) the in the case of the 1996 Notes, THC, and (c) with respect to
the 1992 Notes and the 1996 Notes, each and every maker, endorser, guarantor,
or surety of or for any or all of the Senior Liabilities.
1.4 "Senior Liabilities" shall mean all liabilities of the
Guarantors to the Noteholders under the Guarantee Agreements, including, without
limitation, the principal amount of all Notes guaranteed thereby and all
interest payable in respect thereof, together with all fees, late charges,
premiums, costs and expenses payable under the Guarantee Agreements.
1.5 "Subordinated Liabilities" shall mean all liabilities of each of
the Guarantors to the Parent for notes, advances, accounts receivable,
administrative services and expenses, and all other inter-company
accommodations, including, without limitation, all amounts in the inter-company
account maintained by Parent on behalf of each of the Guarantors.
1.6 "Subordinated Loan Documents" shall mean all credit
accommodations, notes, loan agreements and any other agreements and documents,
now or hereafter existing, creating, evidencing, guarantying, securing
or relating to any or all of the Subordinated Liabilities, together with
all amendments, modifications, renewals or extensions thereof.
2. Subordination.
2.1 Subordination to Senior Liabilities. Except as set forth in
Section 2.2 of this Agreement or as the Noteholders may hereinafter otherwise
expressly consent in writing, the payment of all Subordinated Liabilities
shall be postponed and subordinated to the payment in full of all Senior
Liabilities, and no payments or other distributions whatsoever, including,
without limitation, payments of interest in respect of any Senior Liabilities,
shall be made, nor shall any property or assets of the Guarantor be applied
to the purchase or other acquisition or retirement of any Subordinated
Liabilities, nor given as collateral security to secure repayment of same.
2.2 Permitted Payments. Notwithstanding anything in Section 2.1 to
the contrary, until such time as an Event of Default occurs, Guarantors may
make, and the Parent may receive, payments of principal and interest on account
of Subordinated Liabilities in a manner consistent with past practice. Upon
the occurrence of an Event of Default, all payments on account of
Subordinated Liabilities shall automatically cease, and Guarantors shall not
make, and the Parent shall not receive, any such payments unless the
Noteholders shall expressly consent thereto in writing.
2.3 Rights of Noteholders to Collect Subordinated Liabilities. In
the event of, and commencing with the date thereof, any dissolution, winding
up, liquidation, reorganization or other similar proceedings relating to any
of the Guarantors or to their creditors or their property (whether voluntary or
involuntary, partial or complete, and whether in bankruptcy, insolvency or
receivership, or upon an assignment for the benefit of creditors, or any other
marshaling of the assets and liabilities of any of the Guarantors, or any sale
of all or substantially all of the assets of any of the Guarantors), the Senior
Liabilities shall first be paid in full before the Parent shall be entitled
to receive and/or to retain any payment or distribution in respect of the
Subordinated Liabilities, and in order to implement the foregoing: (i) all
payments and distributions of any kind or character in respect of the
Subordinated Liabilities to which the Parent would be entitled but for the
provisions of this Agreement will be made directly to the Noteholders; and
(ii) the Parent shall promptly file a claim or claims, in the form required in
such proceedings, for the full outstanding amount of the Subordinated
Liabilities, and shall cause said claim or claims to be approved and all
payments and other distributions in respect thereof to be made directly to the
Noteholders.
2.4 Protection of Noteholders' Rights in Subordinated Liabilities.
In the event that, after the occurrence of an Event of Default, the Parent
receives any payment or other distribution of any kind or character from any
Guarantor or any other source whatsoever in respect of any of the Subordinated
Liabilities, other than as expressly permitted by the terms of this Agreement,
such payment or other distribution shall be received in trust for the
Noteholders and promptly turned over by the Parent to the Noteholders. The
Parent will cause to be clearly inserted in any promissory note or other
instrument which at any time evidences any of the Subordinated Liabilities a
statement to the effect that the payment thereof is subordinated in
accordance with the terms of this Agreement. The Parent will execute such
further documents and instruments and take such further action as the
Noteholders may from time to time
reasonably request to carry out the intent of this Agreement. The Parent
hereby irrevocably appoints the Noteholders its attorney in fact, such
appointment being coupled with an interest, to execute such further documents
and instruments and take such further action on behalf of the Parent as the
Noteholders may from time to time deem reasonable to carry out the intent of
this Agreement, including, without limitation, the actions set forth in Section
2.3 hereof.
2.5 Treatment of Payment of Subordinated Liabilities. All payments
and distributions received by the Noteholders in respect of the Subordinated
Liabilities, to the extent received in or converted into cash, may be applied by
the Noteholders first to the payment of any and all expenses (including
attorneys' fees and disbursements and the allocated fees, expenses and cost of
in-house counsel) paid or incurred by the Noteholders or the Noteholders in
enforcing this Agreement or in endeavoring to collect or realize upon any of
the Subordinated Liabilities, and any balance thereof shall be applied by the
Noteholders toward the payment of the Senior Liabilities remaining unpaid by
allocating the balance among the Noteholders rata in accordance with the
respective unpaid principal amounts of the Notes then outstanding under the
Note Agreements.
2.6 Prohibition On Changes in Subordinated Liabilities. The Parent
will not, without the prior written consent of the Noteholders: (i) cancel,
waive, or forgive any Subordinated Liabilities or any rights in respect
thereof; or (ii) convert any Subordinated Liabilities into stock in the
Guarantors.
2.7 Continuing Agreement. This Agreement shall in all respects be a
continuing agreement and shall remain in full force and effect until all Senior
Liabilities have been paid in full.
2.8 Permitted Changes in Senior Liabilities. The Noteholders may,
from time to time, take any or all of the following actions without affecting
the subordination set forth in this Agreement: (i) retain or obtain a security
interest in any property to secure any of the Senior Liabilities; (ii)
retain or obtain the primary or secondary obligation of any other Obligor or
Obligors with respect to any of the Senior Liabilities; (iii) extend, renew,
alter or exchange any of the Senior Liabilities; (iv) release or compromise any
obligation of any nature of any Obligor with respect to any of the Senior
Liabilities; and (v) release any security interest or lien in, allow a
security interest or lien to be unperfected, surrender, release or permit any
substitution or exchange for, all or any part of any property securing any of
the Senior Liabilities, or extend, renew or release, compromise, alter or
exchange any obligations of any nature of any Obligor with respect to any such
property.
3. Representations and Warranties. Each of the Parent and the
Guarantors hereby represents and warrants that: (i) it has the necessary power
and capacity to make and perform this Agreement and such making and performance
have been duly authorized by all necessary corporate action; (ii) the making
and performance of this Agreement does not and will not violate any provision of
law or regulation or result in the breach of, or constitute a default or
require any consent under, any indenture or other agreement or instrument to
which it is a party
or by which any of its properties may be bound; and (iii) this Agreement is the
legal, valid and binding obligation of each of the Parent and Guarantors,
enforceable in accordance with its terms.
4. Additional Subordinated Liabilities. If, under the terms of
the 1992 Note Agreement or the 1996 Note Agreement, any other Restricted
Subsidiary of Parent (as that term is defined in the 1992 Note Agreement and the
1996 Note Agreement) becomes obligated to deliver to the Noteholders a written
guarantee of amounts due under the Note Agreements, the Parent agrees to
subordinate all liabilities of such Restricted Subsidiary to the Parent for
notes, advances, accounts receivable, administrative services and expenses and
other inter-company accommodations to the prior payment of the such Restricted
Subsidiary's liability under the written guarantee. Parent agrees to execute,
and to cause such Restricted Subsidiary to execute, a subordination agreement
in form and substance similar to this Agreement.
5. Miscellaneous.
5.1 Remedies Cumulative; No Waiver. The rights, powers and
remedies of the Noteholders provided in this Agreement and in the Note
Agreements are cumulative and not exclusive of any right, power or remedy
provided by law or equity. No failure or delay on the part of the
Noteholders in the exercise of any right, power or remedy shall operate as a
waive thereof, nor shall any single or partial exercise preclude any other or
further exercise thereof, or the exercise of any other right, power or remedy.
5.2 Notices. Notices and communications under this Agreement shall be
in writing and shall be given as provided in Section 11.2
of the Note Agreements.
5.3 Governing Law. This Agreement shall be construed in accordance
with and governed by the substantive laws of the State of Illinois without
reference to conflict of laws principles.
5.4 Integration; Amendment. This Agreement and the other Loan
Documents constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations and
prior writings with respect to the subject matter hereof and thereof. No
amendment of this Agreement, and no waiver of any one or more of the provisions
hereof, shall be effective unless set forth in writing and signed by the
parties hereto.
5.5 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, executors,
administrators, successors and permitted assigns; provided, however, that the
Guarantors and the Parent may not assign their rights or obligations hereunder
or any interest herein without the prior written consent of the Noteholders, and
any such assignment or attempted assignment shall be void and of no effect with
respect to the Noteholders. The Noteholders may from time to time sell or
assign, in whole or in part, or grant participation in the Notes, the Senior
Liabilities, this Agreement and/or the obligations evidenced thereby.
5.6 Severability. The illegality, unenforceability or inconsistency
of any provision of this Agreement shall not affect or impair the legality,
enforceability or consistency of the remaining provisions of this Agreement.
5.7 Judicial Proceeding; Waivers. The parties acknowledge and agree
that any suit, action or proceeding, whether claim or counterclaim, brought or
instituted by the Noteholders and the Parent or any successor or assign of
the Noteholders and the Parent, on or with respect to this Agreement or the
dealings of the parties with respect hereto or thereto, shall be tried only by a
court and not by a jury.
5.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed the date set forth above.
ONEIDA LTD.
By: /s/ Edward W. Thoma
Edward W. Thoma, Senior Vice President
BUFFALO CHINA, INC.
By: /s/ William D. Matthews
CAMDEN WIRE CO., INC.
By: /s/ George L. Miller III
Vice President
THC SYSTEMS, INC.
By: /s/ Glenn B. Kelsey
Vice President - Finance
ALLSTATE LIFE INSURANCE COMPANY
By: /s/
By: /s/ Steven M. Laude
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/
By: /s/ Steven M. Laude
Authorized Signatories
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ Diane W. Daleo
By: /s/ Peter S. Fiek
EXHIBIT F
SHARING AGREEMENT
SHARING AGREEMENT dated as of November 26, 1996 among The
Chase Manhattan Bank, as Agent (the "Agent"), The Chase Manhattan Bank, Marine
Midland Bank and NationsBank, N.A. (each bank is referred to herein as a
"Lender" and the banks, together with the Agent, are collectively referred to
herein as "Lenders") and Allstate Life Insurance Company, Allstate Insurance
Company and Pacific Mutual Life Insurance Company (each institution is
referred to herein either as a "1992 Noteholder" (as defined in Recital A
below) or a "1996 Noteholder" (as defined in Recital A below)) and the 1992
Noteholders and the 1996 Noteholders and the Lenders are individually
referred to herein as a "Creditor" and are collectively referred to herein as
the "Creditors").
RECITALS:
A. Under and pursuant to a Note Agreement dated as of November
15, 1996 (as such agreement may be modified, amended, renewed or replaced, the
"1996 Note Agreement"), between THC Systems, Inc., a New York corporation,
Oneida Ltd., a New York corporation (the "Parent"), and Allstate Life Insurance
Company, Allstate Insurance Company and Pacific Mutual Life Insurance Company
(the "1996 Noteholders"), THC Systems, Inc. has issued and sold to the 1996
Noteholders $35,000,000 aggregate principal amount of its 7.49% Senior Notes due
November 1, 2008 (the "1996 Notes"). Under and pursuant to a Note Agreement
dated as of January 1, 1992 (as such agreement may be modified, amended,
renewed or replaced, the "1992 Note Agreement") between the Parent, Allstate
Life Insurance Company and Pacific Mutual Life Insurance Company (the "1992
Noteholders"), the Parent has issued and sold to the 1992 Noteholders
$30,000,000 principal amount of its 8.52% Senior Notes due January 15, 2002
(the "1992 Notes") (the 1992 Note Agreement and the 1996 Note Agreement
being collectively referred to as the "Note Agreements" and the 1992 Notes and
the 1996 Notes being hereinafter collectively referred to as the "Notes").
B. Under and pursuant to that certain Credit Agreement dated as of January
19, 1996 (as such agreement may be modified, amended, renewed or
replaced, including any increase in the amount thereof, the "Bank Credit
Agreement") among the Parent and the Lenders, the Lenders have made available
to the Parent certain credit facilities in a current aggregate principal amount
up to $45,000,000 (all amounts outstanding in respect of said credit
facilities being hereinafter collectively referred to as the "Loans").
C. In connection with the execution of the Bank Credit Agreement and
as support for the Loans made thereunder, THC Systems, Inc., Buffalo China,
Inc. and Camden Wire Co., Inc., each of which are wholly-owned subsidiaries
of the Parent (together with any other subsidiaries of the Parent required from
time to time to execute and deliver a subsidiary guarantee pursuant to the
provisions of the 1992 Note Agreement, the 1996 Note Agreement or the Bank
Credit Agreement, collectively, the "Subsidiary Guarantors") have guaranteed
to the Lenders
the payment of the Loans and all other obligations of the Parent arising
in connection with the transactions contemplated by the Bank Credit Agreement
under certain subsidiary guarantees (as such guarantees may be modified,
amended, renewed or replaced, including any increase in the amount thereof, and
together with any other subsidiary guarantee executed and delivered from time
to time pursuant to the provisions of the Bank Credit Agreement,
collectively, the "Lender Guaranty").
D. The Subsidiary Guarantors have entered into subsidiary guarantees dated
as of November 1, 1996 with respect to the 1992 Notes and November 26, 1996 with
respect to the 1996 Notes (as such subsidiary guarantees may be modified,
amended, renewed or replaced and, together with any other subsidiary guarantee
executed and delivered from time to time pursuant to the provisions of the
Note Agreements, collectively, the "Noteholder Guaranty") pursuant to which (a)
Camden Wire Co., Inc. and Buffalo China, Inc. have guaranteed to the holders of
the 1996 Notes the payment of the principal of, premium, if any, and interest on
the 1996 Notes and the payment of all other obligations of THC Systems, Inc.
arising in connection with the transactions contemplated by the 1996 Note
Agreement and (b) Camden Wire Co., Inc., Buffalo China, Inc. and THC Systems,
Inc. have guaranteed to the holders of the 1992 Notes the payment of the
principal of, premium, if any, and interest on the 1992 Notes and the payment
of all other obligations of the Parent arising in connection with the
transactions contemplated by the 1992 Note Agreement. The Lender Guaranty and
the Noteholder Guaranty are each hereinafter referred to as a "Subsidiary
Guarantee".
E. In consideration of the mutual benefit to be provided hereby and
intending to be legally bound, the Lenders and the Noteholders have
agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS.
The following terms shall have the meanings assigned to them below in this
1 or in the provisions of this Agreement referred to below:
"Bank Credit Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"Bankruptcy Proceeding" shall mean, with respect to any person,
a general assignment of such person for the benefit of its creditors, or
the institution by or against such person of any proceeding seeking relief as
debtor, or seeking to adjudicate such person as bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of such person
or its debts, under any law relating to bankruptcy, insolvency, reorganization
or relief of debtors, or seeking appointment of a receiver, trustee, custodian
or other similar official for such person or for any substantial part of its
property.
"Creditor" shall have the meaning assigned thereto in the introductory
paragraph hereto.
"Excess Sharing Payment" shall mean as to any Creditor an amount equal
to the Sharing Payment received by such Creditor less the Pro Rata Share
of Sharing Payments to which such Creditor is then entitled.
"Lender" shall have the meaning assigned thereto in the introductory
paragraph hereto.
"Lender Guaranty" shall have the meaning assigned thereto in the
Recitals hereof.
"Loans" shall have the meaning assigned thereto in the Recitals hereof.
"1992 Notes" shall have the meaning assigned thereto in the Recitals
hereof.
"1992 Note Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"1996 Notes" shall have the meaning assigned thereto in the Recitals
hereof.
"1996 Note Agreement" shall have the meaning assigned thereto in the
Recitals hereof.
"Noteholder" shall have the meaning assigned thereto in the
introductory paragraph hereto.
"Noteholder Guaranty" shall have the meaning assigned thereto in
the Recitals hereof.
"Notes" shall have the meaning assigned thereto in the Recitals hereof.
"Parent" shall have the meaning assigned thereto in the Recitals
hereof.
"Pro Rata Share of Sharing Payments" shall mean as of the date of any
Sharing Payment to a Creditor an amount equal to the product obtained by
multiplying (x) the amount of all Sharing Payments made to all Creditors
concurrently with the payments to such Creditors in connection with the
collection of such Sharing Payments by (y) fraction, the numerator of which
shall be the Specified Amount owing to such Creditor, and the denominator of
which is the aggregate amount of all outstanding Subject Obligations (without
giving effect in the denominator to the application of any such Sharing
Payments).
"Receiving Creditor" shall have the meaning assigned thereto in 2.
"Sharing Payment" shall have the meaning assigned thereto in 2.
"Specified Amount" shall mean as to any Creditor the aggregate amount
of the Subject Obligations owed to such Creditor.
"Subject Obligations" shall mean all principal of premium, if any, and
any interest on, the Notes and the Loans and all other obligations of THC
Systems, Inc. or the Parent under or in respect of the Notes and the Loans and
under the Note Agreements and the Bank Credit Agreement; provided that any
amount of such Subject Obligations which is not allowed as a
claim enforceable against the Parent or THC Systems, Inc. in a Bankruptcy
Proceeding under applicable law shall be excluded from the computation of
"Subject Obligations" hereunder.
"Subsidiary Guarantors" shall have the meaning assigned thereto in the
Recitals hereof.
"Subsidiary Guarantee" shall have the meaning assigned thereto in
the Recitals hereof.
Section 2. SHARING OF RECOVERIES.
Each Creditor hereby agrees with each other Creditor that (a) payments made
pursuant to terms of a Subsidiary Guarantee or (b) payments (other than
regularly scheduled payments of principal and interest) made with respect to the
1996 Notes by THC Systems, Inc. (collectively, "Sharing Payments"
or individually, a "Sharing Payment") (x) within 90 days prior to the
commencement of a Bankruptcy Proceeding or at any time thereafter with respect
to any Subsidiary Guarantor or THC Systems, Inc. (with respect to the 1996 Note
Agreement) or the Parent or (y) following the acceleration of the 1992 Notes or
the 1996 Notes or the Loans, shall be shared so that each Creditor shall
receive its Pro Rata Share of Sharing Payments. Accordingly, each Creditor
hereby agrees that in the event (a) an event described in clauses (x) or (y)
above shall have occurred, (b) any Creditor shall receive a Sharing Payment (a
"Receiving Creditor"), and (c) any other Creditor shall not concurrently
receive its Pro Rata Share of Sharing Payments from the same Subsidiary
Guarantor or THC Systems, Inc. in connection with Sharing Payments made
pursuant to clause (b) above, then the Receiving Creditor shall promptly remit
the Excess Sharing Payment to each other Creditor who shall then be entitled
thereto so that after giving effect to such payment (and any other payments
then being made by any other Receiving Creditor pursuant to this 2) each
Creditor shall have received its Pro Rata Share of Sharing Payments.
Any such payments shall be deemed to be and shall be made in
consideration of the purchase for cash at face value, but without recourse,
ratably from the other Creditors of such amount of the 1992 Notes or the 1996
Notes or Loans (or interest therein), as the case may be, to the extent
necessary to cause such Creditor to share such Excess Sharing Payment with the
other Creditors as hereinabove provided; provided, however, that if any such
purchase or payment is made by any Receiving Creditor and if such Excess Sharing
Payment or part thereof is thereafter recovered from such Receiving Creditor by
any Subsidiary Guarantor or by THC Systems, Inc. in connection with Sharing
Payments made pursuant to clause (b) of the preceding paragraph
(including, without limitation, by any trustee in bankruptcy of any
Subsidiary Guarantor or any creditor thereof), the related purchase from
the other Creditors shall be rescinded ratably and the purchase price
restored as to the portion of such Excess Sharing Payment so recovered, but
without interest; and provided further nothing herein contained shall
obligate any Creditor to resort to any setoff, application of deposit balance
or other means of payment or avail itself of any recourse by resort to any
property of THC Systems, Inc. or the Parent or any Subsidiary Guarantor, the
taking of any such action to remain within the absolute discretion of such
Creditor without obligation of any kind to other Creditors to take any such
action.
Section 3. AGREEMENTS AMONG THE CREDITORS.
Section 3.1. Independent Actions by Creditors. Nothing contained in this
Agreement shall prohibit any Creditor from accelerating the maturity of, or
demanding payment from any Subsidiary Guarantor on, any Subject Obligation of
the Parent or THC Systems, Inc. to such Creditor or from instituting
legal action against THC Systems, Inc. or the Parent or any Subsidiary
Guarantor or THC Systems, Inc. in connection with a Sharing Payment to obtain a
judgment or other legal process in respect of such Subject Obligation, but any
funds received from any Subsidiary Guarantor or THC Systems, Inc. in
connection with a Sharing Payment in connection with any recovery therefrom
shall be subject to the terms of this Agreement.
Section 3.2. Relation of Creditors. This Agreement is entered into solely
for the purpose set forth herein, and no Creditor assumes any responsibility to
any other party hereto to advise such other party of information known to
such other party regarding the financial condition of the Parent, THC Systems,
Inc. or any Subsidiary Guarantor or of any other circumstances bearing
upon the risk of nonpayment of any Subject Obligation. Each Creditor
specifically acknowledges and agrees that nothing contained in this Agreement
is or is intended to be for the benefit of THC Systems, Inc. or the Parent or
any Subsidiary Guarantor and nothing contained herein shall limit or in any way
modify any of the obligations of THC Systems, Inc. or the Parent or any
Subsidiary Guarantor to the Creditors.
Section 3.3. Acknowledgment of Guaranties. The Lenders hereby expressly
acknowledge and consent to the execution and delivery of the
Noteholder Guaranty and the Noteholders hereby expressly acknowledge
the existence of the Lender Guaranty.
SECTION 4. MISCELLANEOUS
Section 4.1. Entire Agreement. This Agreement represents the entire
Agreement among the Creditors and, except as otherwise provided, this
Agreement may not be altered, amended or modified except in a writing executed
by all parties to this Agreement.
Section 4.2. Notices. Notices hereunder shall be given to the Creditors at
their addresses as set forth in the Note Agreements or the Bank Credit
Agreement, as the case may be, or at such other address as may be designated by
each in a written notice to the other parties hereto.
Section 4.3. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the Creditors and their respective
successors and assigns (including, without limitation, any holder of a
participation interest in any Subject Obligation), whether so expressed or not,
and, in particular, shall inure to the benefit of and be enforceable by any
future holder or holders of any Subject Obligations, and the term "Creditor"
shall include any such subsequent holder of Subject Obligations, wherever the
context permits.
Section 4.4. Governing law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
Section 4.5. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one Agreement,
and any of the parties hereto may execute this Agreement by signing any such
counterpart.
Section 4.6. Sale of Interest No Creditor will sell, transfer or otherwise
dispose of any interest in the Subject Obligations unless such purchaser or
transferee shall agree, in writing, to be bound by the terms of this Agreement.
Section 4.7. Severability. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal, or unenforceable
in any respect, the validity, legality and enforceability of the remaining
provisions of this Agreement shall not in any way be affected or impaired
thereby.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date set forth above.
ALLSTATE INSURANCE COMPANY
By: /s/
By: /s/ Steven M. Laude
Authorized Signatories
ALLSTATE INSURANCE COMPANY
By: /s/
By: /s Steven M. Laude
Authorized Signatories
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ Diane W. Dales
By: /s/ Peter S. Fiek
THE CHASE MANHATTAN BANK
(as Agent and Bank)
By: /s/ Joseph H. Oddo, Jr.
Joseph H. Oddo, Jr.
Vice President
MARINE MIDLAND BANK
By: /s/ John R. Pennisi
Vice President
NATIONSBANK, N.A.
By: /s/ C. A. Lauher
Vice President