EXHIBIT 4(a)(i)
WAIVER AND AMENDMENT NO. 1
TO
2001 AMENDED AND RESTATED NOTE PURCHASE AGREEMENT (1992)
This Waiver and Amendment No. 1 ("Amendment"), dated as of December 7,
2001, is among ONEIDA LTD., a New York corporation (the "Company"), ALLSTATE
LIFE INSURANCE COMPANY ("Allstate") and PACIFIC LIFE INSURANCE COMPANY (together
with Allstate, the "Purchasers") under the 2001 Amended and Restated Note
Agreement referred to below between the Company and the Purchasers.
R E C I T A L S
A. The Company and the Purchasers are parties to the 2001 Amended and
Restated Note Agreement dated as of May 1, 2001 entered into in connection with
$30,000,000 principal amount of Senior Notes due January 15, 2002 (the "Note
Agreement").
B. The Company has advised the Purchasers that (i) its Consolidated
Interest Coverage Ratio for the Fiscal Quarter ended October 27, 2001 is 2.04 to
1.0, in violation of Section 7.12(a) of the Note Agreement which required a
Consolidated Interest Coverage Ratio of not less than 2.20 to 1.0, and (ii) its
Consolidated Leverage Ratio for the Fiscal Quarter ended October 27, 2001 is
5.42 to 1.0 in violation of Section 7.12(b) of the Note Agreement which required
a Consolidated Leverage Ratio of not more than 4.45 to 1.0.
C. The Company has requested that the Purchasers waive the Events of
Default arising out of the Company's failure to comply with Sections 7.12(a) and
(b) of the Note Agreement for the Fiscal Quarter ended October 27, 2001, and
amend the Note Agreement to allow certain Foreign Subsidiaries to pledge their
assets as collateral security for foreign lines of credit.
D. The Purchasers are willing to grant the waiver requested by the
Company, provided the Note Agreement is amended, among other things, (i) to
increase the Applicable Margin used in determining interest rates under the Note
Agreement and the Notes, together with certain other provisions therein, (ii) to
require Kenwood Silver Company, Inc., a Subsidiary of the Company, to execute a
Subsidiary Guarantee and Subordination Agreement and to grant the Collateral
Agent, for the ratable benefit of the Secured Parties, a security interest in
substantially all of its assets (other than Deposit Accounts) upon execution of
the further amendment to the Note Agreement contemplated in the next Recital,
and (iii) to require the Company to grant and to cause Oneida Canada Limited to
grant the Collateral Agent, for the ratable benefit of certain of the Secured
Parties, one or more mortgages on certain of the real property owned by the
Company or its Subsidiaries in the United States and Canada upon execution of
the further amendment to the Note Agreement contemplated in the next Recital.
E. The Company and the Purchasers contemplate that, subsequent to the
execution of this Amendment, they will enter into discussions regarding, among
other things, (i) amending the required levels for the Company's Consolidated
Interest Coverage Ratio and Consolidated Interest Coverage Ratio for periods
ending after October 27, 2001 and (ii) possibly reducing the amount of
Commitments of the Lenders.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used in this Amendment which are
not otherwise defined shall have the meanings given to those terms in the Note
Agreement, except where such terms are amended herein.
2. Waiver. The Purchasers hereby waive the Events of Default created as
a result of the Company's failure to comply with Sections 7.12(a) and (b) of the
Note Agreement for the Fiscal Quarter ended October 27, 2001. This waiver is
limited to the failure to comply with Sections 7.12(a) and (b) at October 27,
2001 and shall not constitute or be construed as a waiver of any other presently
existing or future Events of Default.
3. Amendment of Note Agreement.
3.1. The following defined terms are added to Section 5.1 of the
Note Agreement:
"Amendment No. 1 Effective Date" means the date on which all
the conditions to the Waiver and Amendment No. 1 dated as of
December 7, 2001 have been satisfied.
"Bullet Loan" means the non-revolving Loan under the Credit
Agreement in the principal amount of $40,000,000 to be made on
January 4, 2002.
"Mortgages" means one or more mortgages on the Mortgaged
Property granted to the Collateral Agent, for the ratable benefit
of the Purchasers and the Lenders, securing the obligations under
the Bullet Loan, the Note Agreement and the 1996 Note Agreement,
provided that the Mortgages on Mortgaged Property subject to the
payment of New York mortgage recording tax will be limited in
amount to the sum of (a) the orderly liquidation value of the
Company's main plant and knife plant located in Sherrill, New
York, and the Buffalo China, Inc. main plant located in Buffalo,
New York, as determined from an appraisal conducted by an
independent appraisal firm satisfactory to the Collateral Agent,
and (b) the current assessed value of any other such Mortgaged
Property determined from the appropriate tax assessment records,
as adjusted to full value in the case of any taxing jurisdiction
with assessments at less than full value.
"Mortgaged Property" means the real property described on
Schedule I hereto.
3.2. The definition of the term "Applicable Margin" in Section 5.1
is amended by deleting such definition in its entirety and inserting in
lieu thereof the following:
"Applicable Margin" means for any day, with respect to any
Loans, the Applicable Margin (expressed in terms of basis points
(bps)) as determined according to the applicable level ("Level")
as indicated by the following grid, as set forth in the Credit
Agreement as in effect on December 7, 2001 (as such Level may
change as described in Section 7.21 hereof), with such Level to be
determined on the basis of the Consolidated Leverage Ratio of the
Company and its consolidated Subsidiaries as of the last day
of each Fiscal Quarter of the Company as reflected on the
financial statements for such Fiscal Quarter delivered by the
Company pursuant to Section 6.1:
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▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ 5 ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇
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Consolidated <=2.50 <=2.75 <=3.00 <=3.25 <=3.50 <=4.00 <=4.50 >4.50
Leverage Ratio
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Eurodollar Margin 150.0 175.0 200.0 250.0 300.0 320.0 335.0 350.0
(bps)
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provided that, (i) during the period from the Amendment No. 1
Effective Date through and including the date on which Company
delivers the financial statements under Section 6.1 for the Fiscal
Quarter ended October 27, 2001, the Applicable Margin shall be
based on ▇▇▇▇▇ ▇, and (ii) if the Company shall have failed to
deliver the financial statements required by Section 6.1 when due
(without giving effect to any grace period or notice requirement)
or there shall have occurred an Event of Default which has not
been waived in the manner provided in Section 8.1 hereof, the
Applicable Margin shall immediately be adjusted to Level 8 until
such time delivery of such financial statements shall have been
made or the Event of Default shall have been cured or waived, as
the case may be. Each change in the Applicable Margin shall be
effective on the first Business Day following delivery of the most
recent financial statements pursuant to Section 6.1 subject to the
proviso set forth in the preceding sentence.
3.3. The definition of the term Loan Party in Section 5.01 is
amended to read as follows:
"Loan Party" means the Company and each Subsidiary of the
Company which is a party to a Transaction Document, and any other
Person which guarantees, or grants a Lien on any of its assets to
secure, the obligations under this Agreement, the 1996 Agreement,
the Credit Agreement or any of the other Transaction Documents.
3.4. The definition of the term Transaction Documents in Section
5.1 is amended to read as follows:
"Transaction Documents" means, collectively, this Agreement,
the 1996 Note Agreement, the Credit Agreement, any promissory note
delivered to a Lender evidencing the Loans, the Subsidiary
Guarantees, the Subsidiary Subordination Agreements, the Security
Documents, the Mortgages, any agreement between the Company and
the Collateral Agent or the Administrative Agent with respect to
the payment of fees, any Hedging Agreement entered into with a
Lender or an Affiliate of the Lender, the Chase Working Capital
Facility, as such term is defined in the Security Agreement, the
Scotiabank Metal Line, as such term is defined in the Security
Agreement, the LC's,
as such term is defined in the Security Agreement, and each
other document, agreement or instrument delivered pursuant to the
terms of any of the foregoing, as the same may be amended,
supplemented or otherwise modified from time to time.
3.5. The following new Section 6.18 is added to the Note
Agreement:
Section 6.18 Additional Collateral. The Company shall use its
best efforts to deliver or cause to be delivered to the Collateral
Agent the following items on or before February 1, 2002, and in
any event shall deliver or cause to be delivered to the Collateral
Agent the following items on or before the later of (a) February
23, 2002 or (b) the date that the Company and the holders of at
least 66-2/3% in aggregate principal amount of outstanding Notes
have entered into an amendment to this Note Agreement amending the
Consolidated Interest Coverage Ratio and the Consolidated Leverage
Ratio to levels which are mutually satisfactory and which
amendment may contain such other terms and conditions as may be
required by the Purchasers: (i) a Subsidiary Guarantee and
Subsidiary Subordination Agreement executed by Kenwood Silver
Company, Inc., (ii) instruments in form and substance reasonably
satisfactory to the Collateral Agent pursuant to which Kenwood
Silver Company, Inc. shall become a party to the Security
Documents granting to the Collateral Agent a perfected first
priority security interest in or pledge of all of its tangible and
intangible assets (other than Deposit Accounts), (iii) Mortgages
executed by the Company and any Subsidiary owning Mortgaged
Property granting the Collateral Agent a mortgage Lien on all
Mortgaged Property, (iv) fully paid mortgagee title insurance
policies (or binding commitments to issue title insurance
policies, marked to the satisfaction of the Collateral Agent to
evidence the form of such policies to be delivered with respect to
the Mortgages) in standard ALTA form, issued by a title insurance
company satisfactory to the Collateral Agent in an amount not less
than the amount of the Mortgages (except as the Collateral Agent
may otherwise agree), insuring the Mortgages to create valid Liens
on the Mortgaged Property with no exceptions which the Collateral
Agent shall not have approved in writing, (v) instrument surveys
dated within sixty (60) days of delivery of all Mortgaged Property
prepared by land surveyors acceptable to the Collateral Agent
showing the courses and distances of all boundaries of the
Mortgaged Property and the location of all improvements, fences,
driveways, encroachments and easements affecting or appurtenant to
the Mortgaged Property, with the surveys certified to the
Collateral Agent and the title insurance company, (vi) a report
from an independent real estate appraisal firm acceptable to the
Collateral Agent certifying to the Collateral Agent the orderly
liquidation value of the Company's main plant and knife plant in
Sherrill, New York and the main plant of Buffalo China, Inc. in
Buffalo, New York, (vii) insurance certificates in form
satisfactory to the Collateral Agent naming the Collateral Agent a
loss payee or mortgagee (as the case may be) with respect to the
assets of Kenwood Silver Company, Inc. and the Mortgaged Property,
and (viii) such other instruments and documents as the Collateral
Agent may reasonably request incidental to any of the foregoing.
Provided the Company and the holders of at least 66-2/3% in
aggregate principal amount of outstanding Notes have entered into
a mutually acceptable amendment amending the Consolidated
Interest Coverage Ratio and the Consolidated Leverage Ratio, the
Company shall deliver or cause to be delivered to the Collateral
Agent the foregoing items as and when they become available,
including, without limitation, Mortgages on each parcel comprising
the Mortgaged Property without the necessity of waiting until the
title insurance policies, surveys and other required documents
with respect to all Mortgaged Property shall become available.
3.6. Section 7.1(h) of the Note Agreement is amended to read as
follows:
(h) Indebtedness of the Company's Subsidiaries which does not
exceed, in the aggregate, $25,000,000 outstanding at any time,
exclusive of Indebtedness of Subsidiaries listed on Schedule 7.1.
3.7. Section 7.2 is amended by deleting the word "and" at the end
of subparagraph (h), adding the word "and" at the end of subparagraph
(i), and inserting the following new subparagraph (j) immediately
following subparagraph (i):
(j) any Lien existing or created on any property or asset of
a Subsidiary organized under the laws of Australia, China, Italy
or the United Kingdom to secure Indebtedness under working capital
lines of credit permitted under Section 7.1.
3.8. Section 7.14 of the Note Agreement is amended to read as
follows:
The Company will not, and will not permit any of its Material
Domestic Subsidiaries to, open or maintain any Deposit Account
with a Person other than one of the Lenders unless the Collateral
Agent shall have a perfected first priority Lien therein, except
that the Company may maintain Deposit Accounts at Oneida Savings
Bank solely for payroll purposes.
3.9. Section 8.1(d) of the Note Agreement is amended to read as
follows:
(d) Default in the observance or performance of (i) any
negative covenant under Section 7 or (ii) any covenant under
Sections 6.1(i), 6.1(m), 6.10, 6.16, 6.17, 6.18 or 8.7;
4. Representations and Warranties. The Company represents and warrants
to the Purchasers that the following statements are true, correct and complete:
4.1. Consolidated Interest Coverage Ratio. The Consolidated
Interest Coverage Ratio for the Fiscal Quarter ended October 27, 2001,
as reflected on the unaudited financial statements for the Fiscal
Quarter then ended required to be delivered pursuant to Section 6.1(a)
of the Note Agreement, is 2.04 to 1.00.
4.2. Consolidated Leverage Ratio. The Consolidated Leverage Ratio
for the Fiscal Quarter ended October 27, 2001, as reflected on the
unaudited financial statements for the Fiscal Year then ended required
to be delivered pursuant to Section 6.1(b) of the Note Agreement, is
5.42 to 1.0.
4.3. Representations and Warranties. Each of the representations
and warranties made by the Company in the Note Agreement is true and
correct on and as of the date of this Amendment.
4.4. No Default or Event of Default. No Default or Event of
Default has occurred and is continuing except for the Events of Default
referenced in Paragraph 2 above.
4.5. Execution, Delivery and Enforceability. This Amendment has
been duly and validly executed and delivered by the Company and
constitutes its legal, valid and binding obligation, enforceable
against the Company in accordance with its terms.
5. Conditions to Effectiveness of Amendment. This Amendment shall be
effective only when and if each of the following conditions is satisfied:
5.1. Secretary's Certificate. The Purchasers shall have received a
certificate executed by the Secretary or Assistant Secretary of the
Company certifying the due authorization of this Amendment by Company,
the incumbency of the officer executing this Amendment, and any other
legal matters relating to this Amendment, all in form and substance
satisfactory to the Purchasers and its counsel.
5.2. Consent of Guarantors. Each of the Guarantors shall have
executed and delivered to the Purchasers the Consent of Guarantors
attached to this Amendment.
5.3. No Default or Event of Default; Accuracy of Representations
and Warranties. After giving effect to this Amendment, no Default or
Event of Default shall exist and each of the representations and
warranties made by the Company or any of its Subsidiaries herein and in
or pursuant to the Loan Documents shall be true and correct in all
material respects as if made on and as of the date on which this
Amendment becomes effective.
5.4. Expense Reimbursements. The Company shall have paid or agreed
to pay all invoices presented to the Company for expenses reimbursement
of the Purchasers including but not limited to fees of counsel,
pursuant to Section 11.1 of the Note Agreement.
5.5. Execution by Purchasers. The Purchasers shall have received a
counterpart of this Amendment duly executed and delivered by the
Company.
5.6. Amendment Fee. The Company shall have paid to the Purchasers
a nonrefundable amendment fee equal to .10% of the amount of the
principal amount of the Notes outstanding on the effective date of this
Amendment of each Purchaser, a counterpart of this Amendment executed
by such Purchaser.
5.7. Credit Agreement. The Purchasers shall have received copies
of any waivers and/or amendments waiving or amending the Credit
Agreements duly executed by the Company and the Lenders described
therein.
6. Confirmation of Note Agreement. Except as amended by this Amendment,
all the provisions of the Note Agreement remain in full force and effect from
and after the date hereof, and the Company hereby ratifies and confirms the Note
Agreement and each of the documents executed in connection therewith. From and
after the date hereof, all references in the Note Agreement
to "this Agreement", "hereof", "herein", or similar terms, shall refer to the
Note Agreement as amended by this Amendment. The Company also ratifies and
confirms that the Security Documents remain in full force and effect in
accordance with their terms and are not impaired or affected by this Amendment.
7. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument. Delivery of an executed
signature page to this Amendment by facsimile transmission shall be as effective
as delivery of a manually signed counterpart.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the day and year first above written.
ONEIDA LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Chief Financial Officer
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Authorized Signatories
PACIFIC LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Secretary
CONSENT OF GUARANTORS
Each of the undersigned is a party to a Subsidiary Guarantee Agreement
and is a Guarantor of the obligations of the Company under the Note Agreement
referred to in the foregoing Waiver and Amendment No. 1 to the 2001 Amended and
Restated Note Agreement. Each of the undersigned Guarantors hereby (a) consents
to the foregoing Amendment, (b) acknowledges that, notwithstanding the execution
and delivery of the foregoing Amendment, the obligations of each of the
undersigned Guarantors are not impaired or affected and the Subsidiary Guarantee
Agreement continues in full force and effect, and (c) ratifies and affirms the
terms and provisions of the Subsidiary Guarantee Agreement.
IN WITNESS WHEREOF, each of the undersigned has executed and delivered
this Consent of Guarantors as of the 7th day of December, 2001.
BUFFALO CHINA, INC. DELCO INTERNATIONAL LTD.
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
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ENCORE PROMOTIONS, INC. SAKURA, INC.
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇ By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
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THC SYSTEMS INC.
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇
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SCHEDULE I
Mortgaged Property
Owner Description
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Oneida Ltd. Main and Knife Plants
Sherrill, NY
Oneida Ltd. Warehouse
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇
Oneida Ltd. Administration Building
Kenwood Ave.
Oneida, NY
Oneida Ltd. ▇▇▇▇▇ Pt
Canastota
Oneida Ltd. Golf Course
Oneida/Sherrill, NY
Buffalo China, Inc. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Ltd. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇