EXHIBIT 4(a)
ONEIDA LTD.
NOTE AGREEMENT
Dated as of January 1, 1992
$30,000,000 Principal Amount
8.52% Senior Notes
Due January 15, 2002
TABLE OF CONTENTS
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes 1
1.2 Commitment; Closing Date 1
2. PREPAYMENT OF NOTES
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 5
3. REPRESENTATIONS
3.1 Representations of the Company 5
3.2 Representations of the Purchasers 12
4. CLOSING CONDITIONS
4.1 Representations and Warranties 13
4.2 Legal Opinions 13
4.3 Events of Default 14
4.4 Payment of Fees and Expenses 14
4.5 Accountants' Letter 14
4.6 Legality of Investment 14
4.7 Private Placement Number 14
4.8 Sale of All Notes 14
4.9 Proceedings and Documents 14
5. INTERPRETATION OF AGREEMENT
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
6.1 Corporate Existence 24
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 29
6.8 ERISA 29
6.9 Compliance with Laws 30
6.10 Acquisition of Notes 31
6.11 Private Placement Number 31
6.12 NAIC Filings 31
7. NEGATIVE COVENANTS
7.1 Net Worth 31
7.2 Current Ratio 31
7.3 Funded Debt 31
7.4 Priority Indebtedness of Restricted Subsidiaries 32
7.5 Interest Coverage Ratio 32
7.6 Liens 32
7.7 Long-Term Leases 33
7.8 Restricted Payments 34
7.9 Merger or Consolidation 35
7.10 Sale of Assets 35
7.11 Change in Business 36
7.12 Transactions with Affiliates 36
7.13 Consolidated Tax Returns 36
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Events 36
8.2 Remedies on Default 38
8.3 Annulment of Acceleration of Notes 39
8.4 Other Remedies 39
8.5 Conduct No Waiver; Collection Expenses 40
8.6 Remedies Cumulative 40
8.7 Notice of Default 40
9. AMENDMENTS, WAIVERS AND CONSENTS
9.1 Matters Subject to Modification 41
9.2 Solicitation of Holders of Notes 41
9.3 Binding Effect 42
10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT
10.1 Form of Notes 42
10.2 Note Register 42
10.3 Issuance of New Notes upon Exchange or Transfer 42
10.4 Replacement of Notes 43
11. MISCELLANEOUS
11.1 Expenses 43
11.2 Notices 44
11.3 Reproduction of Documents 44
11.4 Successors and Assigns 44
11.5 Law Governing 44
11.6 Headings 44
11.7 Counterparts 45
11.8 Reliance on and Survival of Provisions 45
11.9 Integration and Severability 45
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 8.52% Senior Notes, Due January 15, 2002
Exhibit B: Legal Opinions
ONEIDA LTD.
NOTE AGREEMENT
Dated as of January 1, 1992
To the Purchasers Named in Schedule I Hereto
Ladies and Gentlemen:
ONEIDA LTD., a New York corporation (the "Company"), agrees with you as
follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1 Description of Notes. The Company has authorized the issuance and sale
of $30,000,000 aggregate principal amount of its Senior Notes (the "Notes"), to
be dated the date of issuance, to bear interest from such date at the rate of
8.52% per annum prior to maturity, payable semi-annually on the fifteenth day of
July and January of each year, commencing July 15, 1992, 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 Chemical Bank (or its successors or assigns) as its Prime
Rate plus one percent (1%) or (b) 10.52% per annum, to be expressed to mature on
January 15, 2002 and to be substantially in the form attached as Exhibit A. The
term "Notes" as used herein shall include each Note delivered pursuant to this
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."
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 January 30, 1992, or at such
later time or on such later date, not later than 5:00 p.m. Chicago Time, on
January 31, 1992, 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 Lincoln First Bank, N.A., Rochester,
New York, A.B.A. No. 022300173, for deposit in the Company's Account No.
0102042942. If on the Closing Date the Company shall fail to tender the Notes to
you, 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 Note which
may be outstanding from time to time, the Company shall prepay and there shall
become due and payable on January 15 in each year, $4,285,714.29 of the
principal amount of the Notes or such lesser amount as would constitute payment
in full on the Notes, commencing January 15, 1996 and ending January 15, 2001
inclusive, with the remaining principal payable on January 15, 2002. 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) In the event of a Change of Control, the Company 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 of
the Change of Control, accompanied by a certificate of an authorized officer of
the Company describing in detail the nature of the Change of Control. 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).
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 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 () 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 a Saturday, Sunday or a legal holiday or a day on which banking
institutions in Chicago, Illinois or New York, New York are authorized by law to
close, then such payment, prepayment or exchange need not be made on such date
but may be made on the next preceding business day which is not a Saturday,
Sunday or a legal holiday or a day on which banking institutions in Chicago,
Illinois or New York, New York are authorized by law to close, with the same
force and effect as if made on the due date.
3. REPRESENTATIONS
3.1 Representations of the Company. As an inducement to, and as part of
the consideration for, your purchase of the Notes pursuant to this Agreement,
the Company represents and warrants to you as follows:
(a) Corporate Organization and Authority. 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 to issue and sell
the Notes as contemplated in the Agreement.
(b) Qualification to Do Business. 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 Company 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 Company 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 and 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. The Company 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 Company
and its Restricted Subsidiaries as of January 26, 1991 and the related
consolidated statements of income, stockholders' equity and cash flows for the
year ended January 26, 1991, accompanied by the report and unqualified opinion
of Coopers & Lybrand, 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 Company and its Restricted Subsidiaries for and as of the end of
each of such years. The consolidated balance sheets of the Company and its
Restricted Subsidiaries as of July 27, 1991 and July 28, 1990 and the related
unaudited consolidated condensed statements of income, stockholders' equity and
cash flows for the six months ended July 27, 1991 and July 28, 1990, 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 Company 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) Contingent Liabilities or Adverse Changes. Neither the Company nor any
of its Subsidiaries has any contingent liabilities which are material to the
Company 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 26, 1991, there have been no material adverse changes in
the condition, financial or otherwise, of the Company 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 Company 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 Company and its Subsidiaries taken as a whole or
on the Company's ability to perform its obligations under this Agreement or the
Notes.
(g) Compliance with Law. (i) Neither the Company 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
Company and its Subsidiaries taken as a whole, or on the Company's ability to
perform its obligations under this Agreement or the Notes.
(ii) Neither the Company nor any Subsidiary nor any Affiliate of the
Company 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 Company 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 Company or any Subsidiary comply in all material respects with
ERISA and other applicable laws. There exist with respect to the Company 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 Company 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 Company 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 Company or a
Subsidiary, which are listed in the attached Annex II and (y) other Liens that
would be permitted pursuant to Section 7.6.
(j) Leases. The Company and each Subsidiary enjoy peaceful and undisturbed
possession under all leases under which the Company 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 Company 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 Company and its Subsidiaries taken as a whole.
(k) Franchises, Patents, Trademarks and Other Rights. The Company 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 Company 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 and the Notes have
been duly authorized on the part of the Company, have been duly elected 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 and of the Notes (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
Company or any Subsidiary under the provisions of, any charter document, by-law,
loan agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their property may be bound.
(m) No Defaults. No event has occurred and no condition exists which, upon
the issuance of the Notes, 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 Company 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 Company nor any Subsidiary obtained any waivers with respect
to any defaults under any loan agreements or other mate rial agreements or
instruments
(n) Governmental Consent. Neither the nature of the Company or any of its
Subsidiaries, their respective businesses or properties, nor any relationship
between the Company 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 in connection with the
execution and delivery of this Agreement or the offer, issue, sale or delivery
of the Notes.
(o) Taxes. All tax returns required to be filed by the Company 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 Company 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 Company 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 Company 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 Company's knowledge
threatened. The provisions for taxes on the books of the Company and each
Subsidiary are adequate for all open years and for the current fiscal period.
(p) Status under Certain Statutes. Neither the Company nor any Subsidiary
is: (i) a "public utility company" or a "holding company," or an "affiliate" or
a "subsidiary company" of a "holding company," or an "affiliate of such a
subsidiary company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, or (ii) a public utility" as defined in the
Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.
(q) Private Offering. Neither the Company nor Manufacturers Hanover
Securities Corporation (the only Person authorized or employed by the Company as
agent, broker, dealer or otherwise in connection with the offering of the Notes
or any similar security of the Company) has offered any of the Notes or any
similar security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser, other than not more than 35 institutional investors,
including the Purchasers, each of whom was offered all or a portion of the Note
at private sale for investment. Neither the Company nor anyone acting on its
authorization will offer the Notes or any part thereof or any similar securities
for issue or sale to, or solicit any offer to acquire any of the same from,
anyone so as to bring the issuance and sale of the Notes within the provisions
of Section 5 of the Securities Act.
(r) Effect of Other Instruments. Neither the Company 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 Company and
its Subsidiaries taken as a whole or the Company's ability to perform its
obligations under this Agreement or the Notes.
(s) Use of Proceeds. The Company will apply the proceeds from the sale of
the Notes to reduce the outstanding balance of bank Indebtedness in the
approximate amount of $30,000,000 incurred to finance plant modernization. None
of the transactions contemplated in this Agreement (including, without
limitation thereof, the use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Exchange Act, or any
regulations issued pursuant thereto, including, without limitation, Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System (12
C.F.R., Chapter II). Neither the Company nor any Subsidiary owns or intends to
carry or purchase any "margin stock" within the meaning of Regulation G, and
none of the proceeds from the sale of the Notes will be used to purchase or
carry or refinance any borrowing the proceeds of which were used to purchase or
carry any "margin stock" or margin security" in violation of Regulations G, T, U
or X.
(t) Condition of Property. All of the facilities of the Company 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 company and its
Subsidiaries taken as a whole.
(u) Books and Records. The Company 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.
(v) Full Disclosure. Neither the Private Placement Memorandum dated
November 1991 which has heretofore been delivered to you (including the
Company's Annual Report on Form 10-K for the year ended January 26, 1991, its
Quarterly Reports on Form 10-Q for the periods ended April 27, 1991 and July 27,
1991 and its Annual Report to Stockholders for the
year ended January 26, 1991), the financial statements referred to in paragraph
(d) of this Section 3.1, nor this Agreement, nor any other statement or document
furnished by the Company 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 Company which the Company has not disclosed to you in writing which has a
material adverse effect on or, so far as the Company can now foresee, will have
a material adverse effect on the business, property, operations or condition,
financial or otherwise, of the Company and its Subsidiaries taken as a whole or
the ability of the Company to perform its undertakings under and in respect of
this Agreement and the Notes.
(w) Environmental Compliance. The Company 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 Company 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. 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
Each of you further represents that either: (i) no part of the funds to be
used by you to purchase the Notes will constitute assets allocated to any
separate account maintained by you; or (ii) no part of the funds to be used by
you to purchase the Notes will constitute assets allocated to any separate
account maintained by you such that the application of such funds will
constitute a prohibited transaction under Section 406 of ERISA; or (iii) all or
a part of such funds will constitute assets of one or more separate accounts
maintained by you, and you have disclosed to the Company the names of such
employee benefit plans whose assets in such separate account or accounts exceed
10% of the total assets or are expected to exceed 10% of the total assets of
such account or accounts as of the date of such purchase and the Company has
advised you in writing that the Company is not a party-in-interest nor are the
Notes employer securities with respect to the particular employee benefit plans
disclosed to the Company by you as aforesaid (for the purpose of this clause
(iii), all employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan). As used herein, the terms
"separate account," party-in-interest," "employer securities," and "employee
benefit plan" have the meanings assigned to them in ERISA.
4. CLOSING CONDITIONS
Your obligation to purchase the Notes on the Closing Date shall be subject
to the performance by 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 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
the Company 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.
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, associate counsel to the Company and from Shearman & Sterling,
special counsel for the Company, 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 Company 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.
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 Accountants' Letter. You shall have received a letter from the
Company's independent certified public accountants acknowledging that you and
the other Purchasers may rely on their opinion accompanying the audited
financial statements referred to in Section 3.1(d).
4.6 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.
4.7 Private Placement Number. A private placement number shall have been
obtained from Standard & Poor's Corporation.
4.8 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.
4.9 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) (i) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, the Company, (ii) which beneficially owns or holds
5% or more of any class of the Voting Stock of the Company 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 Company 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.
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 Company'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 Company 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 Company, 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 Company 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 Company's Voting Stock (determined on the
date prior to the date of the consummation of such transaction) is exchanged;
(e) the Company or any Restricted Subsidiary shall purchase or
otherwise acquire, directly or indirectly, in one or more transactions,
beneficial ownership of Voting Stock of the Company, if, after giving effect to
such purchase or acquisition, the Company (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 Company 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 Company 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 Company 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 Company 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 Company 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 Company or a Restricted Subsidiary shall
have consolidated or which shall have merged into or with the Company 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 Company or any Restricted Subsidiary has an ownership
interest unless such net earnings shall have actually been received by the
Company 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 Company 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 Company 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
Company 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 Company 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 Company 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 Company
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
Company 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 Company and its Restricted
Subsidiaries.
Credit - 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 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
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 Company filed pursuant to the Exchange Act.
Fund 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 () 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.
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 Company by a Restricted
Subsidiary or of a Restricted Subsidiary by the Company), 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 Company or any Restricted Subsidiary.
Indebtedness of the Company and its Restricted Subsidiaries at January 25, 1992
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.
Loan - 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 Company
and/or its Majority-Owned Restricted Subsidiaries.
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,
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 Company or a Majority-Owned
Restricted Subsidiary) in each case unsecured by Liens, (ii) the aggregate
amount of Guaranties by Restricted Subsidiaries (except of Indebtedness of the
Company or a Majority-Owned Restricted Subsidiary), (iii) Funded Debt and
Current Debt of the Company and its Restricted Subsidiaries (except to the
Company or a Majority-Owned Restricted Subsidiary) secured by any Lien on the
Property of the Company 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 Company 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
Company 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
Company 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 Subsidiaries;
(b) Investments made in the ordinary course of business in
Property and assets to be used in the ordinary course of business of the Company
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 Company and its
Restricted Subsidiaries;
(d) advances to and Guaranties of loans to employees of the
Company 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) Manufacturers Hanover
Trust Company, Chemical Bank, Chase Manhattan Bank, or North Carolina National
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 Company, accorded a rating of "A" or
better by Moody's Investors Service, Inc., or "A" or better by Standard & Poor's
Corporation;
(g) Investments in commercial paper 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
Corporation:
(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 Corporation;
(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-l rating; and
(j) Guaranties by 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 Economic Community and (ii) which is designated as a "Restricted
Subsidiary in Annex I hereto or a written notice provided to each Noteholder.
Securities Act - The Securities Act of 1933, as amended, and as it may
be further amended from time to time.
Subsidiary - Any corporation of which more than 50% of the outstanding
shares of Voting Stock are owned or controlled by the Company or one or more
Subsidiaries.
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 l/12th) which will elapse between
such date and the making of such payment.
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 Company 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
The Company agrees that, for so long as any amount remains unpaid on any
Note:
6.1 Corporate Existence. The Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company will, and will cause each
Subsidiary to, provide reasonable protection against loss or damage to such
books of record and account.
6.6 Financial Information and Reports. The Company 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 Company, a consolidated balance sheet of the Company and its Restricted
Subsidiaries as of the end of such period and consolidated statements of
earnings and cash flows of the Company 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 Company's independent certified public accountants) and certified by the
chief financial officer or chief accounting officer of the Company (i) outlining
the basis of presentation, and (ii) stating that the information presented in
such statements presents fairly the financial condition of the Company and its
Subsidiaries and the results of operations for the period, subject to customary
year-end audit adjustments; provided that so long as the Company 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 Company 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 Company 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 Company 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 Company 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, (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 is not, or was not, in default in the
fulfillment of any of the terms, covenants, provisions and conditions of this
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, he shall disclose in such statement the
nature thereof, its period of existence and what action, if any, the Company has
taken or proposes to take with respect thereto, and (ii) stating whether the
Company is in compliance with Sections 7.1 through 7.13 and setting forth, in
sufficient detail, the information and computations required to establish
whether or not the Company 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 Company obtains knowledge thereof, notice
of any litigation not fully covered by insurance or any governmental proceeding
pending against the Company 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 Company and
its Subsidiaries taken as a whole:
(f) As soon as available, copies of each financial statement, notice,
report and proxy statement which the Company shall furnish to its stockholders;
copies of all press releases; copies of each registration statement and
periodic report which the Company 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 Company or its
securities which the Company may file with any securities exchange on which any
of the Company's securities may be registered; copies of any orders in any
material proceedings to which the Company or any of its Subsidiaries is a party,
issued by any governmental agency, Federal or state, having jurisdiction over
the Company or any of its Subsidiaries; and, except at such times as the Company
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
Company or any Subsidiary by independent accountants retained by the Company or
any Subsidiary in connection with any interim or special audit made by them of
the books of the Company or any Subsidiary; and
(h) Such additional information as you or such other Institutional
Holder of the Notes may reasonably request concerning the Company and its
Subsidiaries.
6.7 Inspection of Properties and Records; Confidentiality. The Company 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
Company 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 Company 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 Company; 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 or (v) the National Association of Insurance
Commissioners or any similar organization. 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 Company or
one of its agents.
6.8 ERISA. (a) The Company agrees that all assumptions and methods used to
determine the actuarial valuation of employee benefits, both vested and
unvested, under any Plan of the Company 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 Company 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 Company or any Subsidiary
pursuant to Section 4068 of ERISA, if and to the extent such termination is
within the control of the Company;
if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Company 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 Company and
its Subsidiaries taken as a whole.
(c) Upon the request of you or any other Institutional Holder, the
Company 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 Company 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 Company, any
Subsidiary, any ERISA affiliate, the PBGC or any other person to terminate any
Plan; (iii) the institution of any steps by the Company, 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 Company 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
Company or any of its Subsidiaries.
6.9 Compliance with Laws. The Company 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
Company 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 or any of the property of the Company or any
Subsidiary; provided, however, that the Company 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
Company 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 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 consents to the filing of copies
of this Agreement with Standard Poor's Corporation and the National Association
of Insurance Commissioners to obtain a private placement number.
6.12 NAIC Filings. The Company 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.
7. NEGATIVE COVENANTS
The Company agrees that, for so long as any amount remains unpaid on any
Note:
7.1 Net Worth. The Company will not at any time permit its Consolidated
Tangible Net Worth to be less than $85,000,000.
7.2 Current Ratio. The Company 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 Company 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 Company 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 Company 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, except 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, (a)
does not exceed twenty percent (20%) of Consolidated Tangible Net Worth and (b)
does not result in aggregate Funded Debt incurred pursuant to this Section 7.4.,
when added to aggregate Indebtedness incurred pursuant to Section 7.6(f),
exceeding 20% of Consolidated Tangible Net Worth.
7.5 Interest Coverage Ratio. The Company 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 Company 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 Company'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 Company;
(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 Company, 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 Company and any Restricted
Subsidiary or between Majority-Owned Restricted Subsidiaries;
(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 Funded Debt of Restricted Subsidiaries incurred after the Closing Date,
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 Company 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 Company 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 Company 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 Company's prior fiscal quarter.
7.8 Restricted Payments. The Company will not, except as hereinafter
provided:
(a) declare or pay any dividends, 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 Company;)
(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
Company);
(c) make any other payment or distribution, 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 Company 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
26, 1991, 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 26, 1991).
The Company 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 Company will not, and will not permit any
Restricted Subsidiary to, merge or consolidate with any other Person, except
that:
(a) The Company 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 Company is the successor corporation or, if the Company
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 Company's
obligations under the Notes and this 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 Company or such successor corporation could incur at
least $1.00 of additional Funded Debt pursuant to Section 7.3;
(b) Any Restricted Subsidiary may (i) merge into the Company or
another Majority-Owned Restricted Subsidiary or (ii) sell, transfer or lease all
or any part of its assets to the Company or to another Majority-Owned Restricted
Subsidiary 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
7.10 Sale of Assets. During any fiscal year, the Company 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 Company or a
Majority-Owned Restricted Subsidiary (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 Company may make a Disposition in excess of
the aforesaid percentage if the Company 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 Company and its Restricted Subsidiaries or (b) prepay
Funded Debt, including the Notes, on a pro rata basis among all issuers of such
Funded Debt, including the Noteholders, subject to the prepayment requirements
of Section 2.2(a) and at the price set forth in Section 2.2(b).
7.11 Change in Business. Neither the Company 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 Company at the most recently ended fiscal quarter would be
attributable to the current business of the Company 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 Company 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
Company 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 Company 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 Company is required under
the Code to do otherwise.
8. EVENTS OF DEFAULT AND REMEDIES THEREFOR
8.1 Nature of Event. 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 Company 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 Company 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 Company 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 (x) 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 and, (y) solely in the case of any default
not involving the payment of money, the sums due thereunder shall have been
accelerated and such acceleration shall not have been annulled:
(d) Default in the observance or performance of Sections 7.1, 7.3,
7.4, 7.5, 7.7, 7.8, 7.9, 7.10 or 7.11.
(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 Company knew of such default or
(b) on which written notice of such default is provided to the Company by any
Noteholder;
(f) Any representation or warranty made by the Company in this
Agreement, or made by the Company in any written statement or certificate
furnished by the Company in connection with the issuance and sale of the Notes
or furnished by the Company pursuant to this Agreement, 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 Company 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 Company or any Subsidiary
receives notice thereof;
(h) The Company 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; or
(i) The Company 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 (h) 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) where any Event of Default described
in paragraph (i) 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 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 (h), 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) 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 or in the Notes 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 fails
to comply with any other provision of this Agreement, the Company 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 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 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 Company will give the following notices:
(a) The Company 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 Company 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 Company or any Subsidiary gives any notice or takes any other action with
respect to a claimed default, the Company will forthwith give written notice to
the extent of the Company's knowledge thereof to each holder of the then out
standing 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 may, with the consent of the Company, be amended, or
compliance therewith may be waived (either generally or in a particular instance
and either retroactively or prospectively), if the Company 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,
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, Notes held in the name of, or owned
beneficially by, the Company, any Subsidiary or any Affiliate thereof, shall not
be deemed outstanding.
9.2 Solicitation of Holders of Notes. The Company 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 shall be afforded the opportunity of
considering the same and shall be supplied by the Company 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 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. The Company will not, 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 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 five 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 his 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 agrees 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, 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 Company also agrees that it 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., 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 agrees and stipulates 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 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 herein and in any
certificates delivered pursuant to this Agreement, whether or not in connection
with a closing, (i) shall be deemed to have been relied upon by you,
notwithstanding any investigation heretofore or hereafter made by you or on your
behalf and (ii) shall survive the delivery of this Agreement and the Notes.
11.9 Integration and Severability. This Agreement embodies the entire
agreement and understanding between you and the Company, and supersedes all
prior agreements and understandings relating to the subject matter hereof. In
case any one or more of the provisions contained in this Agreement or in any
Note, or application thereof, shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained in this Agreement and in any Note, and any other application thereof,
shall not in any way be affected or impaired thereby.
IN WITNESS WHEREOF, the Company and the Purchasers have caused this
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.
ONEIDA LTD.
By: /s/ Edward W. Thoma
Title: Senior Vice President
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Patricia W. Wilson
By: /s/ Gary W. Fridley
Authorized Signatories
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By: /s/ Diane W. Dales
Title: Assistant Vice President
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Allstate Life Insurance Company $10,000,000
Allstate Plaza West
Northbrook, Illinois 60062
Attention: Investment Department -
Private Placement Division J2A
Address for all communications is as above. All payments are to be by bank
wire transfer of immediately available funds to:
Harris Trust and Savings Bank
ABA No. 0710-0028-8
Chicago, IL 60690
Attn: Trust Collection Dept. 5C
Custody Account #23-80522
PPN: 682505 B# 8
Each wire transfer shall identify such payment as "Oneida Ltd., 8.52%
Senior Notes due January 15, 2002."
Tax ID #36-2554642
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Allstate Life Insurance Company $5,000,000
Allstate Plaza West
Northbrook, Illinois 60062
Attention: Investment Department -
Private Placement Division J2A
Address for all communications is as above. All payments are to be by bank
wire transfer of immediately available funds to:
Harris Trust and Savings Bank
ABA No. 0710-0028-8
Chicago, IL 60690
Attn: Trust Collection Dept. 5C
Custody Account #23-83531
PPN: 682505 B# 8
Each wire transfer shall identify such payment as "Oneida Ltd., 8.52%
Senior Notes due January 15, 2002."
Tax ID #36-2554642
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Allstate Life Insurance Company $5,000,000
Allstate Plaza West
Northbrook, Illinois 60062
Attention: Investment Department -
Private Placement Division J2A
Address for all communications is as above. All payments are to be by bank
wire transfer of immediately available funds to:
Harris Trust and Savings Bank
ABA No. 0710-0028-8
Chicago, IL 60690
Attn: Trust Collection Dept. 5C
Custody Account #23-80524
PPN: 682505 B# 8
Each wire transfer shall identify such payment as "Oneida Ltd., 8.52%
Senior Notes due January 15, 2002."
Tax ID #36-2554642
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Pacific Mutual Life Insurance Company $5,000,000
700 Newport Center Drive
P.O. Box 9000
Newport Beach, California 92658-9000
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:
Security Pacific National Bank
Los Angeles, California
ABA #122-000-043
Account #0014-043543 Business Services 0956
For Pacific Mutual Life Insurance Company
Account #33-7-lS510-0
Each wire transfer shall identify such payment as "Oneida Ltd., 8.52%
Senior Notes due January 15, 2002."
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 92658-9000
Attention: Investment Administration
All securities being purchased should be registered in the nominee name of
"EBENCO" and delivered to:
Sequor Group
333 South Hope Street
Los Angeles, California 90071
Ref. Sequor Group-Pasadena-Mona Milane
SPSTC Customer Account #33-7-15510-0
For Pacific Mutual Life Insurance Company
Attn: Custody/Sherry Welch HE-16 Level E
Tax ID #95-6025815
SCHEDULE I
Principal Amount of Notes to be Purchased
Name and Address of Purchaser Principal Amount of Notes
Pacific Mutual Life Insurance Company $5,000,000
700 Newport Center Drive
P.O. Box 9000
Newport Beach, California 92658-9000
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:
Security Pacific National Bank
Los Angeles, California
ABA #122-000-043
Account #0014-043543 Business Services 0956
For Pacific Mutual Life Insurance Company
Account #33-7-15510-0
Each wire transfer shall identify such payment as "Oneida Ltd., 8.52%
Senior Notes due January 15, 2002.
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 92658-9000
Attention: Investment Administration
All securities being purchased should be registered in the nominee name of
"EBNCO" and delivered to:
Sequor Group
333 South Hope Street
Los Angeles, California 90071
Ref. Sequor Group-Pasadena-Mona Milane
SPSTC Customer Account #33-7-15510-0
For Pacific Mutual Life Insurance Company
Attn: Custody/Sherry Welch HE-16 Level E
Tax ID #95-6025815
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 York
Oregon
Pennsylvania
S. Carolina
Tennessee
Texas
Vermont
Virginia
Washington
Camden Wire Co., Inc. New York Arkansas
Illinois
California
N. Carolina
Oneida Distribution
Services, Inc. New York Missouri
California
Washington
Georgia
Buffalo China, Inc. New York
Oneida International, Inc. Delaware
Oneida Foreign
Sales Corporation Virgin Islands
Oneida Mexicana, S.A. Mexico
Oneida, 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., Inc. (U.S.) New York
Simeon L. & George H.
Rogers Co., Ltd. (Canada) Canada
Wm. A. Rogers, Limited New York
Canadian Wm. A.
Rogers, Ltd. Canada
D. J. Tableware, Inc. New York
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 1/25/92
1) FUNDED DEBT
Funded Debt at January 25, 1992 consisted of the following:
(Thousands)
9.42% senior notes due September 15, 1997, payable
$2,857,140 annually, commencing September 15, 1991 $17,143
Notes payable at various interest rates up to prime,
due through November 30, 1996 50,000
Industrial Revenue Bond, Chemical Bank Tax Exempt
Money Market Index rate, due February 1, 2005 9,000
Industrial Revenue Bond, 9-1/4%, due March 1, 2000,
payable in semi-annual installments of $193,607,
including interest 2,245
Industrial Revenue Bond, 9%, due March 1, 1995, payable
in semi-annual installments of $214,870, including
interest 1,266
Other debt at various rates due through 1997 1,715
81,369
Less amounts due currently 3,715
Total FUNDED DEBT $77,654
2) CURRENT DEBT
Current Debt at January 25, 1992 consisted of the following:
(Thousands)
Short term debt $36,000
Bankers acceptances 22,000
Current installments of long term debt 3,715
Total CURRENT DEBT $61,715
ANNEX III
Description of Liens
None.
ANNEX V
ONEIDA LTD.
RISK INSURANCE COVERAGE SUMMARY
Class of Insurance Insurance Company Risks Covered Limits
Property Damage, Industrial Risk All Risk coverage $502,018,000
Boiler/Machinery, Insurers including damage due to
Business Interruption earthquake and flood
Commercial General Utica Mutual Bodily Injury and $3,000,000
Liability Insurance Company 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 Liability New Hampshire Umbrella coverage over $10,000,000
Umbrella Insurance Company commercial general
liability and auto
liability policies
Excess Liability Fireman's Fund Excess coverage over $15,000,000
Insurance Company commercial liability
umbrella
Pension & Welfare Aetna Casualty & Breach of fiduciary $1,000,000
Fiduciary Liability Surety Company responsibility as Trustee
of employee benefit plans
Executive Liability Federal Insurance Co. Wrongful acts while $10,000,000
(Directors and (Chubb Group) 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
ONEIDA LTD.
8.52% SENIOR NOTE
Due January 15, 2002
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-___________ January ___, 1992
$_________________
ONEIDA LTD., a New York corporation (the Company), for value received,
hereby promises to pay to _______________________ or registered assigns, on the
fifteenth day of January, 2002, the principal amount of __________________
Dollars ($_____________) 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 eight and fifty-two hundredths percent
(8.52) per annum from the date hereof until maturity, payable on the fifteenth
day of July and January in each year, commencing July 15, 1992, 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 Chemical Bank (or its successors or
assigns) as its Prime Rate plus one percent (1%) or (b) ten and fifty-two
hundredths percent (10.52%) 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 January 1, 1992, entered into by the Company 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
January 15 of each year beginning January 15, 1996 and ending January 15, 2001
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 agrees 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.
ONEIDA LTD.
By:
Its:
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 Agreement has been duly authorized by proper corporate action on
the part of the Company, has been duly executed and delivered by an authorized
officer of the Company and constitutes the legal, valid and binding agreement of
the Company, enforceable in accordance with its terms, except to the extent that
enforcement of the Agreement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
3. The Notes have been duly authorized by proper corporate action on the
part of the Company, have been duly executed and delivered by an authorized
officer of the Company and constitute the legal, valid and binding obligations
of the Company, enforceable in accordance with their terms, except to the extent
that enforcement of the Notes may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
relating to or affecting the enforcement of the rights of creditors or by
equitable principles, regardless of whether enforcement is sought in a
proceeding in equity or at law.
4. Based upon the representations set forth in the Agreement, the
offering, sale and delivery of the Notes do not require the registration of the
Notes under the Securities Act of 1933, as amended, nor the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
5. The issuance and sale of the Notes and compliance with the terms and
provisions of the Notes and the Agreement will not conflict with or result in
any breach of any of the provisions of the Certificate of Incorporation or By-
Laws of the Company.
The opinion of 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. The Company has full corporate power and authority to conduct the
activities in which it is now engaged and own its property.
2. Each Subsidiary of the Company is a corporation duly organized and
validly existing in good standing under the laws of its jurisdiction of
incorporation, and each has all requisite corporate power and authority to carry
on its business as now conducted and own its property.
3. Each of the Company and its Subsidiaries is duly qualified or licensed
and in good standing as a foreign corporation authorized to do business in each
jurisdiction where the nature of the business transacted by it or the character
of its properties owned or leased makes such qualification or licensing
necessary except where failure to so qualify would not, individually or in the
aggregate, have a material adverse affect on its business, properties, or
condition, financial or otherwise.
4. No authorization, approval or consent of any governmental or regulatory
body is necessary or required in connection with the lawful execution and
delivery by the Company of the Agreement or the lawful offering, issuance and
sale of the Notes, and no designation, filing, declaration, registration and/or
qualification with any governmental authority is required by the Company in
connection with such offer, issuance and sale.
5. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Agreement will not conflict with, or result in
any breach or violation of any of the provisions of, or constitute a default
under, or result in the creation of any Lien on the property of the Company or
any Subsidiary pursuant to, (i) the provisions of the Certificate of
Incorporation or other charter document or bylaws of the Company or any
Subsidiary or any loan agreement under which the Company or any Subsidiary is
bound, or other agreement or instrument known to such counsel (after due
inquiry) to which the Company or any Subsidiary is a party or by
which any of them or their property is bound or (ii) any New York law (including
usury laws) or regulation, order, writ, injunction or decree of any court or
governmental authority applicable to the Company known to such counsel.
6. There are no actions, suits or proceedings pending or, to the best of
such counsel's knowledge after due inquiry, threatened against, or affecting the
Company or its Subsidiaries, at law or in equity or before or by any Federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which are likely to result,
either individually or in the aggregate, in any material adverse change in the
business, properties, operations or condition, financial or otherwise, of the
Company and its Subsidiaries taken as a whole.
7. All of the issued and outstanding shares of capital stock of each
Subsidiary have been duly and validly issued, are fully paid and nonassessable
and, to the knowledge of such counsel, are owned by the Company free and clear
of any Lien.
8. The issuance of the Notes and the use of the proceeds of the sale of
the Notes do not violate or conflict with Regulation G, T, U or X of the Board
of Governors of the Federal Reserve System (12 C.F.R., Chapter II).
9. Neither the Company nor any Subsidiary is: (i) a public utility company
or a holding company, or an affiliate" or a subsidiary company of a holding
company, or an "affiliate" of such a "subsidiary company, as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended, or (ii) a
"public utility as defined in the Federal Power Act, as amended, or (iii) an
investment company or an "affiliated person" thereof or an affiliated person of
any such "affiliated person, as such terms are defined in the Investment Company
Act of 1940, as amended.
The opinion of Shearman & Sterling shall cover such other matters relating
to the sale of the Notes as the Purchasers may reasonably request. With respect
to matters of fact on which such opinion is based, such counsel shall be
entitled to rely on appropriate certificates of public officials and officers of
the Company and with respect to matters governed by the laws of any jurisdiction
other than the United States of America and the State of New York, such counsel
may rely upon the opinions of counsel deemed (and stated in their opinion to be
deemed) by them to be competent and reliable.