<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended January 27, 1996
Commission File Number 1-5452
ONEIDA LTD.
ONEIDA, NEW YORK 13421-2899
(315) 361-3636
NEW YORK 15-0405700
(State of Incorporation) (I.R.S. Employer Identification No)
Securities registered
pursuant to Section 12(b) of the Act:
Name of exchange
Title of Class on which registered
Common Stock, par value $1.00 per share New York Stock Exchange
with attached Preferred Stock purchase rights
Securities registered pursuant to Section 12(g) of the Act:
6% Cumulative Preferred Stock, par value $25 per share
(Title Of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10 -K or any amendment to
this Form 10 -K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of the close of business on April 8, 1996 was $180,899,598.
The number of shares of Common stock ($1.00 par value) outstanding as of April
8, 1996 was 11,031,678.
Documents Incorporated by Reference
1. Portions of Oneida Ltd.'s Annual Report to Stockholders for the fiscal year
ended January 27, 1996 (Parts I and II of Form 10-K).
2. Portions of Oneida Ltd.'s Definitive Proxy Statement dated April 26, 1996
(Part III of Form 10-K).
<PAGE>
PART I
ITEM 1. BUSINESS.
General.
The Corporation (unless otherwise indicated by the context, the term
"Corporation" means Oneida Ltd. and its wholly-owned subsidiaries) was
incorporated in New York in 1880 under the name Oneida Community, Limited. In
1935, the Corporation's name was changed to Oneida Ltd. It maintains its
executive offices in Oneida, New York.
Since its inception, the Corporation has manufactured and marketed tableware -
initially sterling and later silverplated and stainless steel products. By
acquiring subsidiaries and expanding its tableware lines, the Corporation has
diversified into the fabrication of copper wire, the manufacture of commercial
china tableware and the marketing of other tableware and gift items, most
notably, crystal.
Financial Information About Industry Segments.
The Corporation operates in two principal industries: Tableware and Industrial
Wire Products.
Information regarding the Corporation's operations by industry segment for the
years ended January 27, 1996, January 28, 1995 and January 29, 1994 is set
forth on page 26 of the Corporation's Annual Report to Shareholders for the
year ended January 27, 1996, parts of which are incorporated herein by
reference.
Narrative Description of Business.
The following is a description of the business of the Corporation in the
Tableware and Industrial Wire Products industries.
TABLEWARE
In the tableware industry, the Corporation is organized to serve two markets:
consumer and foodservice. This is accomplished by an organizational structure
designed to serve four marketing focal points: the Consumer Retail Division;
Consumer Direct Division; Foodservice Division and the International Division.
Consumer operations focus on individual consumers, both in the United States
and around the world, offering a variety of tabletop and giftware products
including stainless steel, silverplated, sterling and resin color handle
flatware; silverplated and stainless steel holloware; cutlery; and crystal
stemware and decorative pieces.
Flatware and holloware are manufactured primarily at the Corporation's
facilities in Sherrill, New York. Its operations have been harmonized with the
Corporation's other two North American manufacturing facilities to maximize the
efficiency of producing a comprehensive product line for domestic and
international markets. Production at Oneida Canada, Limited, a wholly owned
subsidiary in Niagara Falls, Ontario, has been integrated with operations at
the Sherrill plant, with each facility producing complementary items in similar
product lines. Meanwhile, Oneida Mexicana, S.A., which is operated as a
maquiladora in Toluca, Mexico, manufactures cutlery and consumer flatware
patterns which are not produced at the Corporation's other facilities. The
Corporation also imports products from several international sources.
The Corporation's wide-ranging consumer marketing activities are coordinated by
the Oneida Silversmiths Division from its central offices in Oneida, New York.
Responsibilities are divided between the Consumer Retail and Consumer Direct
divisions.
<PAGE>
The Consumer Retail Division serves retail accounts, particularly major retail
outlets. Most orders are fulfilled directly by the Corporation from its
primary distribution center located in Sherrill, New York. For some accounts,
however, orders direct from the retailer to the Corporation are fulfilled by
Oneida's wholly-owned subsidiary, Oneida Distribution Services, Inc., which has
two distribution centers in Ontario, California and Nashville, Tennessee.
Oneida Distribution Services, Inc. also provides sales and merchandising
support services to retail accounts.
The Consumer Direct Division is responsible for managing Special Sales, which
focus on serving business customers in the premium, incentive, mail order and
direct selling markets. This division also includes Kenwood Silver Company,
Inc., another wholly-owned subsidiary which plays a significant role in the
overall marketing of the Corporation's products through its operation of retail
factory store outlets. Kenwood Silver presently operates 69 Oneida Factory
Stores in resort and destination shopping areas across the United States.
Foodservice operations manufacture and import stainless steel and silverplated
flatware and holloware, and vitreous, porcelain and bone china, which are sold
to restaurants and hotel chains, food distributors, airlines, institutions and
other related customers. These operations are consolidated within the Oneida
Foodservice Division.
Flatware for the foodservice market is sourced primarily from the Corporation's
manufacturing facilities in Sherrill, Niagara Falls and Toluca, while
foodservice holloware is primarily imported. Buffalo China, Inc., a
wholly-owned subsidiary located in Buffalo, New York, is a leading manufacturer
of vitreous china for the foodservice industry. Buffalo China also owns a
subsidiary organized as a maquiladora in Juarez, Mexico. This subsidiary,
Ceramica de Juarez, S.A., produces not only bisque china which is finished in
Buffalo, but also finished, undecorated holloware items.
The Foodservice Division is also the exclusive distributor of certain china
products manufactured by Schonwald and Noritake Co., Inc. for the United
States foodservice and institutional markets.
International operations in both the consumer and foodservice markets are
overseen by the Oneida International Division. The International Division
coordinates the marketing of Oneida's domestically manufactured products
overseas as well as the distribution of products from Oneida Silversmiths'
United Kingdom branch. The Corporation is 80% owner of Oneida International,
Inc., a joint venture formed to market tabletop products of Italian design
which are sourced internationally. Oneida International, Inc. sells these
products through its wholly-owned Italian subsidiary, Sant'Andrea S.r.l., in
the international foodservice market. The foodservice and consumer markets in
Mexico, Central America and South America are served by Oneida Mexicana, S.A.
The percentage of tableware sales to total consolidated sales for the fiscal
years, which end in January, is as follows:
1996 1995 1994
71% 68% 71%
The principal raw materials and supplies used by the Corporation for metal
tableware are stainless steel, silver and various copper alloys. For china,
they are various clays, flint and aluminum oxide. These materials are purchased
in the open market to meet current requirements. The Corporation does not
anticipate any delays or difficulties in obtaining raw materials or supplies.
The Corporation owns and maintains many design patents in the United States and
foreign countries. While these patents are used to protect the Corporation's
designs, they are not considered material. In addition, the Corporation has
registered numerous trademarks in the United States and many foreign countries.
Both the consumer and institutional operations use a number of trademarks and
trade names which are advertised and promoted extensively including ONEIDA,
COMMUNITY, HEIRLOOM, ROGERS, LTD, BUFFALO CHINA, SANT'ANDREA, DJ and NORTHLAND.
<PAGE>
Although consumer operations normally do a greater volume of business during
October, November and December, primarily because of holiday-related orders for
tableware products, the total tableware business is not considered seasonal.
No material part of the Corporation's tableware business is dependent upon a
single customer or a few customers, the loss of which would have a materially
adverse effect. Sufficient inventories of tableware products are maintained by
the Corporation to respond promptly to orders.
Tableware operations had order backlogs of $14,040,000 as of April 12, 1996 and
$12,465,000 as of March 18, 1995. This backlog is expected to be filled during
the current fiscal year, principally in the first quarter. The amount of
backlog is reasonable for the tableware industry.
The Corporation is the only domestic manufacturer of a complete line of
stainless steel, silverplated and sterling tableware products. The Corporation
believes that it is the largest producer of stainless steel and silverplated
flatware in the world. The Corporation faces competition from several smaller
domestic companies that market both imported and domestically manufactured
lines and from hundreds of importers engaged exclusively in marketing foreign-
made tableware products. In recent years there is also competition from
department and specialty stores and foodservice establishments that import
foreign-made tableware products under their own private labels for their sale
or use.
The consumer tableware business is highly competitive. The principal factors
affecting domestic competition in this market are design, price and quality.
Other factors that have an effect on competition are availability of
replacement pieces and product warranties. In the opinion of the Corporation,
no one factor is dominant, and the significance of the different competitive
factors varies from customer to customer.
The foodservice tableware business is highly competitive. The principal factors
affecting competition in this market are price, service and quality. The Oneida
Foodservice Division's products and service are highly regarded in this
industry, and it is one of the largest sources of commercial china, stainless
steel and silverplated tableware in the United States.
INDUSTRIAL WIRE PRODUCTS
The Corporation manufactures copper wire and cable products through Camden Wire
Co., Inc. ("Camden"), a wholly-owned subsidiary. Camden, a supplier of copper
conductor wire, produces bare and tinned copper wire in bunched and concentric
stranded, braided and extra flexible stranded forms, as well as tin or alloy
electroplated wire. Camden's customers include integrated and non-integrated
manufacturers of insulated wire and cable, primarily in the
electronics/computer, consumer and automotive industries, and manufacturers of
carbon brushes, circuit-breakers, resistors and capacitors for use in
transformers, generators, motors and appliances. Camden serves customers in its
high value-added, fine wire markets through more highly technical wire
fabrication by its Shunt Technology division.
The percentage of sales of wire and cable to total consolidated sales for the
fiscal years, which end in January, is as follows:
1996 1995 1994
29% 32% 29%
The principal raw materials used by Camden are copper rod and tin ingots which
are purchased and readily available in the open market. No delay or difficulty
in obtaining such raw materials is anticipated.
Camden's business is not seasonal. Sufficient inventories of products are
maintained by Camden to respond promptly to orders.
<PAGE>
No material part of Camden's business is dependent upon a single customer or a
few customers, the loss of which would have a permanent and materially adverse
effect on profits. Camden had an order backlog of $15,254,000 as of April 8,
1996 and $17,900,000 as of March 6, 1995.
Camden is one of more than three hundred firms that participate in the
nonferrous wire drawing and insulating industry. However, Camden actually
competes in a segment of this industry: copper wire fabricators without rod
mills or insulating facilities. While Camden is a leader in this industry
segment, it faces competition from approximately twenty other similar domestic
companies. Foreign competition is increasing on both a direct and indirect
basis as the wire in many products exported to the United States is sourced
from wire manufacturers located in the exporting country.
The principal factors affecting competition in this subindustry are price,
quality, service and the range and selection of wire and cable products. No one
factor is dominant and the significance of the different competitive factors
varies from customer to customer.
Other Matters.
Research and Development
The Corporation has and continues to place a considerable emphasis on
excellence in development and design. To achieve this end, the Corporation
maintains full time, in-house design and engineering departments which
continuously develop, test and improve products and manufacturing methods.
Independent designers and collaborative efforts with other companies contribute
to the Corporation's emphasis on development and design. The Corporation's
actual expenditures on research and development activities during the past
three fiscal years, however, have not been material.
Environmental
The Corporation does not anticipate that compliance with federal, state
and local environmental laws and regulations will have any material effect upon
the capital expenditures, earnings or competitive position of the Corporation.
The Corporation does not anticipate any material capital expenditures for
environmental control facilities for the remainder of the current fiscal year
or the succeeding fiscal year.
Employees and Employee Relations
The Corporation and its wholly-owned subsidiaries employ approximately
4,600 employees in domestic operations and 1,130 employees in foreign
operations.
ITEM 2. PROPERTIES
The principal properties of the Corporation and its subsidiaries are situated
at the following locations and have the following characteristics:
Tableware Approximate Square Feet
Oneida, New York Executive Administrative Offices 95,000
Sherrill, New York Manufacturing Stainless Steel,
Silverplated and Sterling Tableware 1,082,000
Sherrill, New York Manufacturing Knives 135,000
Buffalo, New York Office and Warehouse 82,000
<PAGE>
Buffalo, New York Manufacturing China 257,000
Niagara Falls, Ontario Manufacturing Stainless Steel
and Silverplated Flatware 120,000
Bangor, N. Ireland Office and Warehouse 32,000
Toluca, Mexico Manufacturing Stainless Steel
Flatware 75,000
Juarez, Mexico Manufacturing Bisque China 65,000
Industrial Wire
Camden, New York Administrative Offices and
Manufacturing Wire and Cable
Products 414,000
Pine Bluff, Arkansas Office and Manufacturing Wire
and Cable Products 167,000
El Paso, Texas Office and Manufacturing Wire
and Cable Products 75,000
All of these buildings are owned by the Corporation with the following
exceptions:
The offices and warehouses in Bangor, Northern Ireland are leased.
120,000 square feet of the 167,000-square-foot Pine Bluff, Arkansas
manufacturing properties are subject to a Letter of Credit and Guaranty
Agreement in the amount of $9,000,000 covering real property and equipment to
secure a like amount of Industrial Development Revenue Bonds. Pursuant to an
Installment Sale Agreement with the City of Pine Bluff, Arkansas, dated August
1, 1985, Camden Wire Co., Inc. is purchasing this portion of the Pine Bluff
properties over a twenty-year period and will take title to the property upon
retirement of the bonds on or before August 1, 2005. The remaining 47,000
square feet of the Pine Bluff, Arkansas properties is owned outright by Camden
Wire Co., Inc.
The Buffalo, New York manufacturing property is subject to a mortgage in the
principal amount of approximately $1,399,000 covering both real property and
equipment to secure a like amount of Industrial Revenue Bonds. Pursuant to the
terms of a Lease Agreement dated February 1, 1980, the real property is leased
by Buffalo China from the Erie County Industrial Development Agency for a term
of twenty years, upon the expiration of which the property will be conveyed
back to Buffalo China.
The El Paso, Texas manufacturing property is subject to a Letter of Credit and
Guaranty Agreement in the principal amount of approximately $6,500,000
covering both real property and equipment to secure a like amount of Industrial
Revenue Bonds. Pursuant to an Installment Sale Agreement with the City of El
Paso, Texas, dated March 1, 1996, Camden Wire Co., Inc. is purchasing the El
Paso property over a twenty-year period and will take title to the property
upon retirement of the bonds on or before March 1, 2016.
In addition to the land primarily associated with its manufacturing operations,
the Corporation owns approximately 500 additional acres in the cities of
Sherrill and Oneida and the town of Vernon, New York.
The Corporation leases sales offices and/or showrooms in New York, Los Angeles,
Dallas, Atlanta and London, England. The Corporation and its subsidiaries lease
warehouse space in various locations throughout the United States. The
Corporation also leases retail outlet space through its wholly-owned
subsidiary, Kenwood Silver Company, Inc., in various locations throughout the
United States.
<PAGE>
In January 1983, the Corporation entered into a 25-year lease for an office
facility in Redmond, Washington. The remaining lease commitment for this
facility is $24,635,320. The Corporation has sublet substantially all of the
building through 1998. The sublease income projected through 2002 is
$4,919,015.
The Corporation's buildings are located on sufficient property to accommodate
any further expansion or development. The properties are served adequately by
transportation facilities, are well maintained and are adequate for the
purposes for which used.
ITEM 3. LEGAL PROCEEDINGS
Management believes there is no ongoing or pending litigation with a possible
material effect on the financial position of the Corporation.
ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF STOCKHOLDERS.
None.
PART II
Information required to be furnished under this Part (Items 5 through 9) is set
forth in the Corporation's Annual Report to Shareholders for the year ended
January 27, 1996, at the respective pages indicated, and incorporated by
reference.
ITEM 5. MARKET FOR THE CORPORATION'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS.
Page 30 of the Corporation's Annual Report.
ITEM 6. SELECTED FINANCIAL DATA.
Page 31 of the Corporation's Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Pages 29 and 30 of the Corporation's Annual Report
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Pages 17 through 31 of the Corporation's Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
Some of the information required to be furnished under this Part (Items 10
through 13) is set forth in the Corporation's definitive Proxy Statement dated
April 26, 1996 (File 1-5452) at the respective pages indicated, and
incorporated by reference.
<PAGE>
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
Pages 2 through 4 of the Corporation's definitive Proxy Statement.
Executive Officers of the Registrant
The persons named below are the executive officers of the Corporation and have
been elected to serve in the capacities indicated at the pleasure of the Oneida
Ltd. Board of Directors.
Name, Age and Positions Principal Business Affiliations
with Corporation During Past Five Years
Thomas A. Fetzner, 48 Mr. Fetzner has been Corporate Controller and Vice
Vice President and President for more than the past five years.
Corporate Controller
Terry M. French, 52 Mr. French has been President of Camden Wire Co.,
President, Inc. for more than the past five years.
Camden Wire Co., Inc.
Barry G. Grabow, 52 Mr. Grabow has been Treasurer for more than the
Treasurer past five years.
Peter J. Kallet, 49 Mr. Kallet was elected President and Chief
President, Chief Operating Officer in January 1996. Mr. Kallet had
Operating Vice President and General Manager of the Oneida
Officer and a Foodservice Division for more than the past five
Director years.
Glenn B. Kelsey, 44 Mr. Kelsey was elected Executive Vice President
Executive Vice and Chief Financial Officer in January 1996. Mr.
President, Chief Kelsey had President of the Oneida Foodservice
Financial Officer and Division for more than the past five years.
a Director
William D. Matthews, 61 Mr. Matthews has been Chairman of the Board and
Chairman of the Board, Chief Executive Officer for more than the past five
Chief Executive years.
Officer
and a Director
Walter A. Stewart, 63 Mr. Stewart has been Senior Vice President,
Senior Vice President, Manufacturing and Engineering, Tableware
Manufacturing and Operations, for more than the past five years.
Engineering, Tableware
Operations and a Director
Catherine H. Suttmeier, 39 Ms. Suttmeier was elected General Counsel and
Vice President, Secretary in January 1992 and Vice President in
General Counsel December 1992. She had served as Associate
and Secretary Counsel and Assistant Secretary since 1986.
Edward W. Thoma, 50 Mr. Thoma has been Senior Vice President, Finance
Senior Vice President, for more than the past five years.
Finance
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
Pages 5 through 9 of the Corporation's definitive Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Pages 1 through 4 of the Corporation's definitive Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Pages 2 through 4 of the Corporation's definitive Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8K.
(a) 1. Financial statements incorporated by reference from the Corporation's
1996 Annual Report to Shareholders and filed as part of this Report:
Consolidated Statement of Operations for the fiscal years ended
1996, 1995 and 1994 (page 17 of the Corporation's Annual Report).
Consolidated Balance Sheet for the fiscal years ended in 1996 and 1995
(pages 18 and 19 of the Corporation's Annual Report).
Consolidated Statement of Cash Flows for the fiscal years ended 1996,
1995 and 1994 (page 20 of the Corporation's Annual Report).
Notes to Consolidated Financial Statements (pages 21-28 of the
Corporation's Annual Report).
Independent Auditor's Report (page 28 of the Corporation's Annual
Report).
2. Financial Statement Schedule:
Schedule for the fiscal years ended 1996, 1995 and 1994:
Valuation and Qualifying Accounts (Schedule II)(page 13 of this
Report).
Independent Auditor's Report (page 12 of this Report).
All other schedules have been omitted because of the absence of conditions under
which they are required or because the required information is included in the
financial statements submitted.
3. Exhibits:
(3) The Restated Certificate of Incorporation and the By-Laws, as
previously amended, which are incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 29, 1994.
<PAGE>
(4)(a) Note Agreement dated January 1, 1992 between Oneida Ltd.
and Allstate Life Insurance and Pacific Mutual Life Insurance Company, which
is incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended January 25, 1992. Restated and Modified Letter of Credit,
Bond Purchase and Guaranty Agreement dated August 1, 1995 between Oneida Ltd.
and Chemical Bank, N.A. Revolving Credit Agreement dated January 19, 1996
between Oneida Ltd. , The Chase Manhattan Bank, N.A., Chemical Bank, and
Nationsbank, N.A.
(b) Shareholder Rights Agreement dated December 13, 1989, which
is incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended January 28, 1995. Assignment and Assumption Agreement dated
November 1, 1991, which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 28, 1995.
(10)(a) Employment agreements with two executive employees of the
Corporation dated October 1, 1982, which are incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 28, 1995.
Employment Agreements with five executive employees of the Corporation dated
July 26, 1989, which are incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 28, 1995. Employment Agreement
with one executive employee of the Corporation dated March 29, 1995.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board
of Directors on February 24, 1988, which provides for the payment of bonus
awards to senior management employees, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended January 28,
1995.
(c) Oneida Ltd. 1987 Stock Option Plan, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 30, 1993.
(d) Oneida Ltd. Employee Security Plan adopted by the Board of
Directors on July 26, 1989, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 28, 1995.
(e) Oneida Ltd. Restricted Stock Award Plan as adopted by the
Board of Directors on November 29, 1989 and approved by shareholders on May 30,
1990 for the granting of common stock to key employees.
(f) Oneida Ltd. Deferred Compensation Plan for Key Employees as
adopted by the Board of Directors on October 27, 1993, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 29, 1994.
(11) Computation of per share earnings.
(13) Portions of the Oneida Ltd. Annual Report to Shareholders for
the fiscal year ended January 27, 1996, which have been incorporated by
reference in this Form 10-K.
(22) Subsidiaries of the Registrant.
(b) No reports on Form 8-K were filed by the Registrant during the quarter
ended January 27, 1996.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ONEIDA LTD.
By: /s/ WILLIAM D. MATTHEWS
William D. Matthews
Chairman of the Board and
Chief Executive Officer
March 26, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
Signature Title Date
Principal Executive Officer
/s/WILLIAM D. MATTHEWS Chairman of the Board March 26, 1996
William D. Matthews and Chief Executive
Officer
Principal Financial Officer
/s/GLENN B. KELSEY Executive Vice President March 26, 1996
Glenn B. Kelsey and Chief Financial Officer
Principal Accounting Officer
/s/THOMAS A. FETZNER Vice President, and March 26, 1996
Thomas A. Fetzner Corporate Controller
The Board of Directors
/s/ROBERT F. ALLEN Director March 26, 1996
Robert F. Allen
/s/WILLIAM F. ALLYN Director March 26, 1996
William F. Allyn
/s/R. QUINTUS ANDERSON Director April 6, 1996
R. Quintus Anderson
/s/GEORGIA S. DERRICO Director March 26, 1996
Georgia S. Derrico
<PAGE>
/s/EDWARD W. DUFFY Director March 26, 1996
Edward W. Duffy
/s/DAVID E. HARDEN Director March 26, 1996
David E. Harden
/s/PETER J. KALLET Director March 26, 1996
Peter J. Kallet
/s/GLENN B. KELSEY Director March 26, 1996
Glenn B. Kelsey
/s/WILLIAM D. MATTHEWS Director March 26, 1996
William D. Matthews
/s/RAYMOND T. SCHULER Director March 26, 1996
Raymond T. Schuler
/s/WALTER A. STEWART Director March 26,
Walter A. Stewart
<PAGE>
INDEPENDENT AUDITOR'S REPORT
ON FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Stockholders of Oneida Ltd.
Our report on the consolidated financial statements of Oneida Ltd. has been
incorporated by reference in this Form 10-K from page 28 of the 1996 Annual
Report to Shareholders of Oneida Ltd. In connection with our audits of such
financial statements, we have also audited the related financial statement
schedule listed in the index on page 8 of this Form 10-K.
In our opinion, the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included herein.
COOPERS & LYBRAND L.L.P.
a professional services firm
/s/ Coopers & Lybrand L.L.P.
Syracuse, New York
February 22, 1996
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We consent to the incorporation by reference in the registration
statements of Oneida Ltd. on Form S-8 (File Nos. 2-84304 and 33-38036), Form
S-3 (File No. 2-66234) of our report dated February 22, 1996 on our audits of
the consolidated financial statements and financial statement schedules of
Oneida Ltd. as of January 27, 1996 and January 28, 1995, and for each of the
three years in the period ended January 27, 1996 which reports are either
included or incorporated by reference in this Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
a professional services firm
/s/ Coopers & Lybrand L.L.P.
Syracuse, New York
April 19, 1996
<PAGE>
SCHEDULE II
<TABLE>
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED JANUARY 1996, 1995 AND 1994
<CAPTION>
(Thousands)
Column A Column B Column C Column D Column E
Additions
Balance at Charged to Balance at
Beginning Cost and End of
Description of Period Expenses Deductions Period
<S> <C> <C> <C> <C>
YEAR ENDED JANUARY 27, 1996:
Reserves deducted from
assets to which they
apply:
Doubtful accounts
receivable............ $1,665 $ 294 $262<F1> $1,697
Other reserves:
Rebate program.......$471 $1,430 $1,467<F2> $434
YEAR ENDED JANUARY 28, 1995:
Reserves deducted from
assets to which they
apply:
Doubtful accounts
receivable.............$2,066 $788 $1,189<F1> $1,665
Other reserves:
Rebate program.......$605 $1,977 $2,111<F2> $471
YEAR ENDED JANUARY 29, 1994:
Reserves deducted from
assets to which they
apply:
Doubtful accounts
receivable.............$1,728 $1,749 $1,411<F1> $2,066
Other reserves:
Rebate program.......$427 $1,208 $1,030<F2> $605
<FN>
<F1> Adjustments and doubtful accounts written off
<F2> Payments under rebate program
</FN>
</TABLE>
<PAGE>
Index to Exhibits
Exhibits:
(3) The Restated Certificate of Incorporation and the By-Laws, as
previously amended, which are incorporated by reference to the Registrant's
Annual Report on Form 10-K for the year ended January 29, 1994.
(4)(a) Note Agreement dated January 1, 1992 between Oneida Ltd.
and Allstate Life Insurance and Pacific Mutual Life Insurance Company, which
is incorporated by reference to the Registrant's Annual Report on Form 10-K
for the year ended January 25, 1992. Restated and Modified Letter of Credit,
Bond Purchase and Guaranty Agreement dated August 1, 1995 between Oneida Ltd.
and Chemical Bank, N.A. Revolving Credit Agreement dated January 19, 1996
between Oneida Ltd. , The Chase Manhattan Bank, N.A., Chemical Bank, and
Nationsbank, N.A.
(b) Shareholder Rights Agreement dated December 13, 1989, which
is incorporated by reference to the Registrant's Annual Report on Form 10-K for
the year ended January 28, 1995. Assignment and Assumption Agreement dated
November 1, 1991, which is incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 28, 1995.
(10)(a) Employment agreements with two executive employees of the
Corporation dated October 1, 1982, which are incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 28, 1995.
Employment Agreements with five executive employees of the Corporation dated
July 26, 1989, which are incorporated by reference to the Registrant's Annual
Report on Form 10-K for the year ended January 28, 1995. Employment Agreement
with one executive employee of the Corporation dated March 29, 1995.
(b) Oneida Ltd. Management Incentive Plan adopted by the Board
of Directors on February 24, 1988, which provides for the payment of bonus
awards to senior management employees, which is incorporated by reference
to the Registrant's Annual Report on Form 10-K for the year ended January 28,
1995.
(c) Oneida Ltd. 1987 Stock Option Plan, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 30, 1993.
(d) Oneida Ltd. Employee Security Plan adopted by the Board of
Directors on July 26, 1989, which is incorporated by reference to the
Registrant's Annual Report on Form 10-K for the year ended January 28, 1995.
(e) Oneida Ltd. Restricted Stock Award Plan as adopted by the
Board of Directors on November 29, 1989 and approved by shareholders on May 30,
1990 for the granting of common stock to key employees.
(f) Oneida Ltd. Deferred Compensation Plan for Key Employees as
adopted by the Board of Directors on October 27, 1993, which is incorporated by
reference to the Registrant's Annual Report on Form 10-K for the year ended
January 29, 1994.
(11) Computation of per share earnings.
(13) Portions of the Oneida Ltd. Annual Report to Shareholders for
the fiscal year ended January 27, 1996, which have been incorporated by
reference in this Form 10-K.
(22) Subsidiaries of the Registrant.
<PAGE>
EXHIBIT 4(a)
CHEMICAL BANK
TO
CAMDEN WIRE CO., INC.
LETTER OF CREDIT RENEWAL
AUGUST 1, 1995
LACY, KATZEN, RYEN & MITTLEMAN, LLP
Counsel for Chemical Bank
The Granite Building
130 East Main Street
Rochester, NY 14604
<PAGE>
CHEMICAL BANK
TO
CAMDEN WIRE CO., INC.
LETTER OF CREDIT RENEWAL
AUGUST 1, 1995
INDEX
Modified and Restated Letter of Credit, Bond Purchase and
Guaranty Agreement...................................................1
Restated and Modified Promissory Note ...............................2
Modification of Basic Documents.....................................3
Renewal of Letter of Credit..........................................4
Certificate of Incumbency of Officers of Issuer, City of
Pine Bluff, Arkansas.................................................5
Incumbency Certificate for Camden Wire Co., Inc......................6
Compliance Certificate for Camden Wire Co., Inc......................7
Corporate Documents for Camden Wire Co., Inc.........................8
a. Exhibit A: Certified Resolutions
b. Exhibit B: Certificate as to Corporate Documents and By-Laws
c. Exhibit C: Certificate of Good Standing
Incumbency and Signature Certificate for Oneida Ltd..................9
Compliance Certificate for Oneida Ltd................................10
Corporate Documents for Oneida Ltd...................................11
a. Exhibit A: Certified Resolutions
b. Exhibit B: Certificate as to Corporate Documents and By-Laws
c. Exhibit C: Certificate of Good Standing
Opinion of Counsel for Oneida Ltd....................................12
<PAGE>
MODIFIED AND RESTATED
LETTER OF CREDIT, BOND PURCHASE AND GUARANTY AGREEMENT
As of August 1, 1995
Camden Wire Co., Inc.
12 Masonic Avenue
Camden, New York 13316
Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13421
RE: $9,000,000 City of Pine Bluff, Arkansas Variable Rate Demand
Industrial Development Refunding and Construction Revenue Bonds (Camden
Wire Project), Series 1985.
Dear Sirs:
WHEREAS, the parties entered into a Letter of Credit, Bond Purchase and
Guaranty Agreement dated as of August 1, 1985, as modified and restated as of
August 1, 1990 (the "Agreement"); and
WHEREAS, the Company (such term, and each other capitalized term used
herein having the meaning set forth in this Modification) requested that the
Issuer issue Bonds to provide funds for the refunding of the 1983 Bonds on
August 1, 1985 and to finance the project; and
WHEREAS, in order to enhance the marketability of the Bonds, the Company
(a) requested the Bank and the Bank committed, pursuant to the Agreement, to
purchase for its own account, upon the request of the Trustee under certain
terms and conditions, Bonds which the Issuer is required under the Indenture to
purchase because the owners (other than the Bank if it has purchased such Bonds
pursuant to the Agreement) have submitted irrevocable notices of tender of such
Bonds to the Tender Agent, and (b) applied to the Bank for the issuance by the
Bank of a standby letter of credit which was issued by the Bank and dated
August 1, 1985 in an original Stated Amount of $9,560,958.90 of which the sum
of $9,000,000 was in respect of the principal or purchase price of the Bonds,
and $560,958.90 was in respect of up to 182 days' interest on the Bonds on or
prior to the stated maturity thereof in order to secure a source of funds to be
devoted exclusively to the payment by the Trustee, when and as due, of the
principal or purchase price of and interest on the Bonds; and
<PAGE>
WHEREAS, the Bank has annually extended the term of the Letter of Credit in
accordance with the Agreement; and
WHEREAS, the Company and Guarantor have requested that the Bank further
renew and extend the Letter of Credit and that the terms of the Agreement be
modified as set forth herein; and
WHEREAS, the parties have mutually agreed and consented to the
modification and restatement of the Agreement;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the Company, the Guarantor and the Bank hereby agree as
follows:
ARTICLE ONE
Definitions
Section 1.1 Definitions. As used in this Modification:
"Accrued Benefit" has the meaning ascribed to such term in Section 5.8(a)(i)
hereof.
"Accumulated Funding Deficiency" has the meaning ascribed to such term in
Section 5.8(a)(ii) hereof.
"Adjusted Tangible Assets" means all assets except:
(i) deferred assets, other than prepaid insurance and prepaid taxes,
deferred taxes and deferred pension expense;
(ii) patents, copyrights, trademarks, trade names, franchises, good
will, experimental expense and other similar intangibles;
(iii) Restricted Investments;
(iv) unamortized debt discount and expense; and
(v) assets located, and notes and receivables due from obligors
domiciled, outside the United States of America, unless such assets are owned
by or such notes and receivables are due from Restricted Subsidiaries.
"A Drawing" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit "A" thereto.
<PAGE>
"Affiliate" means a Person (other than a Restricted Subsidiary) which directly
Controls, or is Controlled by, or is under common Control with, the Guarantor.
"Agent" means Chemical Bank, as Remarketing Agent under the Indenture.
"B Drawing" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit "B" thereto.
"Bank" means Chemical Bank, a New York State banking corporation, its
successors and assigns.
"Bank Rate" shall have the meaning given to such term in the Bonds.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as superseded or
amended.
"Basic Documents" means collectively, the Indenture, the Installment Sale
Agreement, the Tender Agency Agreement, the Remarketing Agreement, the Guaranty
Agreement, the Security Agreement, and the Agreement as modified and restated
in this Modification.
"Bonds" means the Issuer's $9,000,000 Industrial Development Agency Industrial
Development Refunding and Construction Revenue Bonds (Camden Wire Project),
Series 1985.
"Business Day" has the meaning given in the Letter of Credit.
"C Drawing" means a drawing under the Letter of Credit resulting from the
presentation of a certificate in the form of Exhibit "C" thereto.
"Code" means the Internal Revenue Code of 1986, as superseded or amended, and
the regulations, rulings and proclamations promulgated and proposed thereunder.
"Commitment" means, collectively, (i) the Bank's obligation under the Letter of
Credit and (ii) the Bank's obligation to purchase Bonds under Section 2.1(b)
hereof.
"Company" means Camden Wire Co., Inc., a New York corporation.
"Consolidated Adjusted Net Income" means, for any period, the gross revenues of
the Guarantor and its Restricted Subsidiaries for such period less all expenses
and other proper charges (including taxes on income), determined on a
consolidated basis after eliminating earnings or losses attributable to
outstanding minority interests, but excluding in any event:
(a) (i) any gains or losses on the sale or other disposition of
investments and
(ii) any gins or losses on the sale or other disposition of
plant, property and equipment which gains or losses exceed, in the aggregate,
$100,000 during any fiscal year
<PAGE>
and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Restricted Subsidiary accrued prior
to the date it became a Restricted Subsidiary;
(d) net earnings and losses of any corporation (other than a
Restricted Subsidiary), substantially all the assets of which have been
acquired in any manner by the Guarantor or any Restricted Subsidiary,
realized by such corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than a
Restricted Subsidiary) with which the Guarantor or a Restricted Subsidiary
shall have consolidated or which shall have merged into or with the
Guarantor or a Restricted Subsidiary prior to the date of such consolidation
or merger;
(f) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Guarantor or any Restricted
Subsidiary has an ownership interest unless such net earnings shall have
actually been received by the Guarantor or such Restricted Subsidiary in the
form of cash distributions or readily marketable securities;
(g) any portion of the net earnings of any Restricted Subsidiary
which for any reason is unavailable for payment of dividends to the Guarantor
or any other Restricted Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or write-up
of assets;
(i) any deferred or other credit representing any excess of the
equity in any Subsidiary at the date of acquisition thereof over the amount
invested in such Subsidiary;
(j) any gain arising from the acquisition of any securities of
the Guarantor or any Restricted Subsidiary;
(k) any reversal of any contingency reserve, except to the extent
that provision for such contingency reserve shall have been made from income
arising during such fiscal period or during the period consisting of
the four consecutive fiscal quarters immediately following the end of
such fiscal period; and
(l) any other extraordinary gain.
"Consolidated Adjustable Tangible Assets" at any date means the Adjusted
Tangible Assets of the Guarantor and its Restricted Subsidiaries at such date
determined on a consolidated basis.
"Consolidated Adjusted Tangible Net Worth" at any date means:
<PAGE>
(i) the net book value (after deducting related
depreciation, obsolescence, amortization, valuation and other proper reserves)
at which the Adjusted Tangible Assets of the Guarantor and all Restricted
Subsidiaries would be shown on a consolidated balance sheet at such date, but
excluding any amount on account of write-ups of assets after January 28, 1995;
(ii) minus the amount at which their liabilities (other than capital
stock and surplus) would be shown on such balance sheet, and including as
liabilities all reserves for contingencies and other potential liabilities and
all minority interests in Restricted Subsidiaries.
"Consolidated Current Assets" at any date means the amount at which the current
assets of the Guarantor and all Restricted Subsidiaries would be shown on a
consolidated balance sheet at such date.
"Consolidated Current Liabilities" at any date means the amount at which the
current liabilities of the Guarantor and all Restricted Subsidiaries would be
shown on a consolidated balance sheet at such date, plus (without duplication)
the aggregate amount of their Guaranties of current liabilities of other
Persons outstanding at such date.
"Consolidated Income Available for Interest Charges" with respect to the
Guarantor and all Restricted Subsidiaries, means for any period the sum
(without duplication) of (i) Consolidated Adjusted Net Income, (ii) to the
extent deducted in determining Consolidated Adjusted Net Income, all provisions
for federal, state or other income taxes made by the Guarantor and its
Restricted Subsidiaries during such period, and (iii) Consolidated Interest
Charges for such period.
"Consolidated Interest Charges" with respect to the Guarantor and all
Restricted Subsidiaries means for any period the sum of (i) interest expense
with respect to their liabilities for Long Term Debt (including the current
portion thereof) and Current Debt and (ii) to the extent not already included
in (i), imputed interest expenses on capitalized lease obligations.
"Consolidated Working Capital" means the Consolidated Current Assets less
Consolidated Current Liabilities.
"Control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
"Credit Agreement" means the Credit Agreement dated as of January 21, 1994
between the Guarantor, Chase Manhattan Bank, N.A. as agent and certain banks
signatory thereto.
"Current Debt" with respect to any Person, means all liabilities for borrowed
money, all obligations under capitalized leases, and all liabilities secured by
any Lien, other than any
<PAGE>
Lien permitted by Section 6.2(a)(i)-(iv), existing on Property owned by that
Person (whether or not those liabilities have been assumed) which, in either
case, are payable on demand or within one (1) year from their creation, plus
the aggregate amount of Guaranties by that Person of all such liabilities of
other Persons, except:
(i) any liabilities which are renewable or extendible at the option of
the debtor to a date more than one (1) year from the date of creation thereof;
and
(ii) any liabilities which, although payable within one (1)
year, constitute principal payments on indebtedness expressed to mature more
than one (1) year from the date of its creation.
"Date of Issuance" means the date on which the Letter of Credit shall be
issued.
"Default" means any event or condition which constitutes an Event of Default or
which with the giving of notice or lapse of time or both, would become an Event
of Default.
"Employee Pension Benefit Plan" has the meaning ascribed to such term in
Section 5.8(a)(iii) hereof.
"Employer Liability" has the meaning ascribed to such term in Section
5.8(a)(iv) hereof.
"Environmental Law" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"ERISA" has the meaning ascribed to such term in Section 5.8(a)(v) hereof.
"Event of Default" has the meaning ascribed to such term in Section 7.1 hereof.
"Expiration Date" means August 1, 1996, unless earlier terminated or extended
pursuant to the terms of this Modification and the Letter of Credit.
"Fiscal Year" means each twelve (12) month period ending on each last Saturday
in January.
"GAAP" means generally accepted accounting principles in the United States of
America as promulgated by the American Institute of Certified Public
Accountants and as in effect from time to time, consistently applied.
<PAGE>
"Guaranty" with respect to any Person, means all guaranties of, and all other
obligations which in effect guaranty, any indebtedness, dividend or other
obligation of any Person (the "primary obligor") in any manner (except any
indebtedness or other obligation of any Restricted Subsidiary), including
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(i) to purchase such indebtedness or obligation or, in the
circumstances contemplated by Clause (iii) below, any Property constituting
security thereof;
(ii) to advance or supply funds (A) for the purchase or payment of
such indebtedness or obligation, or (B) to maintain working capital or any
balance sheet or income statement condition;
(iii) to lease Property, or to purchase Securities or other Property
or services, primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the primary obligor to make
payment of the indebtedness or obligation;
(iv) otherwise to assure the owner of such indebtedness or obligation,
or the primary obligor, against loss;
but excluding endorsements in the ordinary course of business of negotiable
instruments for deposit or collection.
The amount of any Guaranty shall be deemed to be the maximum amount for
which such Person may be liable, upon the occurrence of any contingency or
otherwise, under or by virtue of the Guaranty.
"Guaranty Agreement" means the Guaranty Agreement from the Guarantor to the
Trustee and the Bank dated as of August 1, 1985.
"Guarantor" means Oneida, Ltd., a New York corporation.
"Holder" or "Bondholder" means a holder of any of the Bonds.
"Indebtedness" as applied to any Person refers to (a) all items (except items
of capital stock or of surplus or of general contingency reserves) which in
accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person as at the date as
of which Indebtedness is to be determined, including all capitalized lease
obligations; (b) all indebtedness secured by any mortgage, pledge, lien or
conditional sale or other title retention agreement existing on any property or
asset owned or held by such Person subject thereto, whether or not the
indebtedness secured thereby shall have been assumed; and (c) all indebtedness
of others which such Person has directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
discounted or agreed (contingent or otherwise) to purchase or repurchase or
otherwise acquire, or with respect to which such Person has agreed to supply or
advance
<PAGE>
funds (whether by way of loan, stock purchase, capital contribution or
otherwise) or has otherwise become liable directly or indirectly.
"Indenture" means the Indenture of Trust dated as of August 1, 1985, from the
Issuer to the Trustee, including any indentures supplemental thereto as therein
permitted.
"Installment Sale Agreement" means the Installment Sale Agreement dated as of
August 1, 1985 between the Issuer and the Company.
"Interest Period" has the meaning given in the Indenture.
"Interest Stated Amount" means, as of any date of calculation, the amount which
may be drawn under the Letter of Credit in respect of interest on the Bonds.
"Issuer" means the City of Pine Bluff, Arkansas.
"Letter of Credit" means the irrevocable standby letter of credit issued by the
Bank for the account of the Company in favor of the Trustee pursuant to the
Agreement, a copy of which is contained in Appendix 2 hereto, as such Letter of
Credit has been extended from time to time and may be further extended in
accordance with this Modification
"Letter of Credit Department of the Bank" means the department of the Bank
where the Exhibits to the Letter of Credit may be presented for payment on the
Letter of Credit. Currently such department is located at Chemical Bank, Letter
of Credit Department, 55 Water Street, New York 10041, Attention: Victor
Marinaccio, Vice President.
"Letter of Credit Fee" has the meaning given in Section 2.3 hereof.
"Lien" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether the interest
is based on common law, statute or contract (including the security interest
lien arising from a mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes). The term
"Lien" shall not include minor reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions and other minor
title exceptions affecting Property, provided that they do not constitute
security for a monetary obligation. For the purposes of this Modification, the
Guarantor or a Restricted Subsidiary shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale
agreement, financing lease or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes, and such retention or vesting shall be deemed to be a Lien. The
amount of any Lien shall be the aggregate amount of the obligation secured
thereby.
"Loan" has the meaning given to such term in Section 2.7(a) hereof.
<PAGE>
"Long Term Debt" with respect to any Person, means all liabilities for borrowed
money (including, without limitation, subordinated debt), all obligations under
capitalized leases, and all liabilities secured by any Lien, other than any
Lien permitted by Section 6.2(a)(i)-(iv), existing on Property owned by that
Person (whether or not those liabilities have been assumed), or any other
obligation (other than deferred taxes) which are required by generally accepted
accounting principles to be shown as liabilities on its balance sheet which, in
any case, are payable more than one year from the date of their creation,
including (i) any liabilities which are renewable or extendible at the option
of the obligor to a date more than one year from their creation and (ii) any
liabilities which, although payable within one year, constitute principal
payments on indebtedness expressed to mature more than one year from its
creation, plus the aggregate amount of Guaranties by that Person of all such
liabilities of other Persons.
"Material Adverse Effect" with respect to Sections 5.8 and 7.1(a)(xiii) hereof,
has the meaning ascribed to such term in such Section 7.1(a)(xiii).
"Modification" means the Agreement (as such term is defined in the first
paragraph hereof) as restated and modified herein.
"Modification Documents" means this Modification and all other documents and
instruments executed in connection with this Modification of the Agreement and
renewal of the Letter of Credit.
"1983 Bonds" means the Issuer's Variable Rate Demand Industrial Development
Revenue Bonds (Camden Wire Co., Inc. Project), Series 1983.
"Offering Memorandum" means the Private Placement Memorandum dated August 1,
1985, prepared in connection with the offering and sale of the Bonds
"Officer's Certificate" means a certificate executed on behalf of the
Guarantor, as the case may be, by the President or one of its Vice Presidents
and its Treasurer or one of its Assistant Treasurers.
"Option" has the meaning ascribed to such term in Section 2.8 hereof.
"Outstanding" has the meaning ascribed to such term in the Indenture.
"Participants" has the meaning ascribed to such term in Section 8.6 hereof.
"PBGC" has the meaning ascribed to such term in Section 5.8(a)(vi) hereof.
"Pension Plan(s)" means all "employee pension benefit plans" as such term is
defined in Section 3 of ERISA, maintained by the Guarantor and its Subsidiaries
from time to time.
"Permitted Encumbrances" has the meaning ascribed to such term in the
Indenture.
<PAGE>
"Person" means a corporation, an association, a partnership, an organization, a
business, a joint venture, an individual or a government or political
subdivision thereof or any governmental agency.
"Plan" has the meaning ascribed to such term in Section 5.8(a)(vii) hereof.
"Prime Rate" means such rate of interest as is publicly announced by the Bank
at its principal office from time to time as its prime rate (any change in the
Prime Rate to be effective at the time and date of the announcement of such
change).
"Principal Stated Amount" means, as of any date of calculation, the amount
which may be drawn under the Letter of Credit in respect of the Principal of
the Bonds.
"Project" has the meaning given to such term in the Installment Sale Agreement.
"Promissory Note" has the meaning given to such term in Section 2.7(a) hereof.
"Property" means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
"Purchased Bonds" means any Bonds purchased by the Bank pursuant to Section
2.1(b) hereof or by virtue of a "C Drawing" prior to the occurrence of an Event
of Default and the giving of the notice to the Trustee referred to in Section
7.l (b)(i).
"Related Documents" has the meaning given to such term in section 8.4 hereof.
"Remarketing Agreement" means the Placement and Remarketing Agreement dated as
of August 1, 1985 between the Company and the Agent.
"Reportable Event" has the meaning ascribed to such term in Section
5.8(a)(viii) hereof.
"Restricted Dividends" means all dividends or other distributions in respect of
capital stock of the Guarantor or any Restricted Subsidiary (except
distributions in such stock or of warrants, rights or other options to purchase
such stock), valued at the fair market value of the Property being dividended,
distributed or otherwise transferred as a Restricted Dividend.
"Restricted Investments" means all Property, including all investments in any
Person, whether by acquisition of stock, indebtedness, other obligation or
Security, or by loan, advance, capital contribution, or otherwise, except:
(i) investments in one or more Restricted Subsidiaries or any
corporation which concurrently with such investment becomes a Restricted
Subsidiary;
<PAGE>
(ii) Property to be used in the ordinary course of business,
including without limitation, advances made to employees for expenses incurred
in the ordinary course of business;
(iii) current assets arising from the sale of goods and services in
the ordinary course of business;
(iv) direct obligations of the United States of America, or any of
its agencies or obligations fully guaranteed by the United States of America,
provided that such obligations mature within one (1) year from the date
acquired;
(v) demand deposits or certificates of deposit maturing within one (1)
year from the date acquired and issued by a bank or trust company organized
under the laws of the United States or any of its states, and having capital,
surplus and undivided profits aggregating at least $50,000,000;
(vi) commercial paper given the highest rating by a national credit
rating agency and maturing not more than two hundred seventy (270) days from the
date acquired; and
(vii) shares of capital stock of the Guarantor held in its treasury as
of the date of this Agreement.
"Restricted Payment" means the excess, if any, of redemptions or acquisitions
of capital stock of the Guarantor or of warrants, rights or other options to
purchase such stock, over the net proceeds of sales of such stock or of
warrants, rights or other options to purchase such stock valued at the fair
market value of the Property being distributed or otherwise transferred as a
Restricted Payment.
"Restricted Subsidiary" means a Subsidiary:
(i) organized under the laws of the United States, Puerto Rico,
Canada, Mexico or any member of the European Economic Community, or a
jurisdiction thereof;
(ii) which conducts substantially all of its business and
has substantially all of its Property within the United States, Puerto
Rico, Canada, Mexico or any member of the European Economic Community;
(iii) a majority of each class of capital stock of which is legally
and beneficially owned by the Guarantor and/or its Restricted Subsidiaries; and
(iv) either (a) as of the date hereof, is a Restricted Subsidiary
within the meaning of paragraphs (i), (ii) and (iii) above or (b) is designated
as a Restricted Subsidiary pursuant to Section 6.2(i)(ii) unless such Subsidiary
is subsequently designated as an Unrestricted Subsidiary pursuant to Section
6.2(i)(ii); provided that Buffalo China, Inc. and Camden Wire Co., Inc. shall
at all times remain a Restricted Subsidiary under this Agreement.
<PAGE>
"Security" shall have the same meaning as in Section 2(1) of the Securities Act
of 1933, as amended.
"Security Agreement" means the Mortgage and Security Agreement dated August 1,
1985 by the Issuer and the Company to the Trustee and the Bank.
"State" means the State of New York.
"Stated Amount" means, as of the date of reference, the sum of the Principal
Stated Amount plus the Interest Stated Amount.
"Subsidiary" means a corporation in which the Guarantor owns, directly or
indirectly, sufficient Voting Stock to enable it ordinarily, in the absence of
contingencies, to elect a majority of the corporate directors (or Persons
performing similar functions).
"Tender Agency Agreement" means the Tender Agency Agreement dated as of August
1, 1985, among the Issuer, the Company and the Tender Agent.
"Tender Agent" means Chemical Bank, as tender agent for the Bonds under the
Indenture.
"Total Funded Debt" means the sum of (i) Long Term Debt (including the current
portion thereof) and (ii) Current Debt.
"Trustee" means Simmons First National Bank of Pine Bluff, a national banking
association, with its principal place of business located in Pine Bluff
Arkansas, its successors and assigns.
"Unreimbursed Amount" means any amount due and owing to the Bank by the Company
as a result of a draw under the Letter of Credit, including any amount the Bank
must repay or has repaid to the Company, the Guarantor or either of their
estates or the Trustee or any Bondholder resulting from an avoided transfer
under the Bankruptcy Code or other law, court order or otherwise.
"Unrestricted Subsidiary" refers to any Subsidiary which is not a Restricted
Subsidiary.
"Variable Rate" shall have the meaning given to such term in the Bonds.
"Voting Stock" refers to Securities, the holders of which are ordinarily, in
the absence of contingencies, entitled to elect the corporate directors (or
Persons performing similar functions.)
"Withdrawal Liability" has the meaning ascribed to such term in Section
5.8(a)(ix) hereof.
Section 1.2 Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made,
<PAGE>
and all financial statements required to be delivered hereunder shall be
prepared in accordance with generally accepted accounting principles
consistently applied.
ARTICLE TWO
Letter of Credit; Bond Purchase Commitment; Option
Section 2.1 Issuance of Letter of Credit; Purchase of Bonds.
(a) The Bank issued on the date of the initial issuance of the Bonds,
upon the terms, subject to the terms and conditions and relying upon the
representations and warranties of the Company and the Guarantor contained in
the Agreement, the Letter of Credit in the form of Appendix 2 hereto. The
Letter of Credit was initially in the amount of $9,560,958.90 of which
$9,000,000.00 was in respect of the principal or purchase price of the Bonds
and $560,958.90 was in respect of up to 182 days' interest on the Bonds.
(b) Subject to the terms and conditions and relying upon the
representations and warranties of the Company and the Guarantor contained in
this Modification, the Bank agrees to purchase, at any time and from time to
time, on or prior to the Business Day immediately preceding the Expiration
Date, and for its own account, any or all of the Bonds tendered to the Tender
Agent in accordance with the terms and provisions set forth in the Bonds, at a
purchase price equal to the then unpaid principal amount of the Bonds to be
purchased plus accrued and unpaid interest thereon at the Variable Rate to the
date of purchase, provided that (i) the Trustee shall have given notice (which
notice may be made by telephone or telegraph, promptly confirmed in writing) to
the Bank by 4:30 p.m., New York City time, on the day preceding the purchase
date of the principal amount of an accrued interest on the Bonds to be so
purchased, and (ii) no Event of Default shall have occurred and then be
continuing. The Bank agrees to meet its obligations under this Section 2.1(b)
by making available to the Tender Agent, at the offices of the Tender Agent,
not later than 10:00 a.m., New York City time, on the purchase date, an amount
equal to 100% of the principal amount of Bonds purchased plus accrued interest
thereon at the Variable Rate to the date of purchase. If the Bank's obligation
to purchase Bonds under this Section 2.1(b) terminates for any reason, the Bank
shall thereafter give prompt written notice of such termination to the Trustee
and the Company (failure to given such notice shall not cause the Bank to have
any obligation to purchase Bonds hereunder if such obligation is terminated for
any other reason). On or after August 1, 2000, at the sole option of the Bank,
the Bank may tender any or all Purchased Bonds to the Company and the Company
shall purchase such Bonds from the Bank at a purchase price of par plus accrued
interest at the Bank Rate. The Bank shall provide the Company with five (5)
days written notice that it intends to exercise its option to sell Purchased
Bonds to the Company on the date specified in such notice.
(c) The Bank agrees to amend the Letter of Credit on the date hereof,
to extend the term thereof until the Expiration Date.
<PAGE>
Section 2.2 Reimbursement. The Company hereby reaffirms and restates its
obligation to reimburse the Bank in full for any drawing made under the Letter
of Credit or any other Unreimbursed Amount on the date of such drawing or, to
the extent such drawing is not reimbursed to the Bank on the date, to pay to
the Bank the amount of such drawing, with interest, in accordance with Section
2.7 below; provided, for all purposes of this Modification, so long as Bonds
purchased by the Bank prior to the occurrence of an Event of Default and the
giving of the notice to the Trustee referred to in Section 7.1(b)(i) pursuant
to a C Drawing under the Letter of Credit are legally required to be registered
to the Bank or its nominee and the Bank is the Tender Agent, the Company shall
be deemed to have reimbursed the Bank in full for the amount drawn under the
Letter of Credit on the date of a C Drawing; provided, however, that if the
Bank is not the Tender Agent, the Company shall be deemed to have reimbursed
the Bank in full for the amount drawn under the Letter of Credit on the date of
a C Drawing when the Bonds acquired pursuant to such C Drawing are lawfully
registered in the name of the Bank and delivered to the Bank.
Section 2.3 Fees and Charges. The Company hereby reaffirms and
restates its obligation to pay to the Bank:
(a) (i) On September 30, 1985 and (ii) thereafter, quarterly,
in arrears, on the first Business Day of each October, January, April and
July, until the occurrence of the Expiration Date, a nonrefundable fee of
three-quarters of one percent (3/4 of 1%) per annum on the average daily amount
which, pursuant to the express terms of the Letter of Credit, was
available to be drawn thereunder on each date since the last date on which the
Letter of Credit Fees were due (such initial and quarterly fees being referred
to herein as the "Letter of Credit Fees").
(b) On the date of the following transactions (i) $200 for every
drawing under the Letter of Credit, (ii) $150 for every amendment to the Letter
of Credit and (iii) $2,000 for every transfer of the Letter of Credit by the
Trustee.
Section 2.4 Method of Payment; etc. All payments to be made by the
Company under this Modification shall be made not later than 12:00 noon (New
York City time) on the date when due and shall be made in lawful money of the
United States of America (in freely transferable U.S. Dollars) and in
immediately available funds. All payments made after 12:00 noon (New York City
time) shall be deemed to have been made on the next Business Day following the
date when such payment was due.
Section 2.5 Reduction and Termination.
(a) The Company shall have the right to cause the Trustee to reduce
permanently the Principal Stated Amount on the dates determined as provided
below by an amount up to the amount by which the Principal Stated Amount
exceeds the aggregate principal amount of Bonds Outstanding and unpaid by
filing a certificate in the form of Exhibit F to the Letter of Credit. The
Interest Stated Amount may be reduced permanently with the reduction of the
Principal Stated Amount, upon any such reduction, in an amount
<PAGE>
equal to 182 days' interest (calculated at the rate of twelve and one-half of
one percent (12 1/2%) per annum, based on a year of 365/366 days) on the
amount of the reduction in the Principal Stated Amount. Such reductions shall
be effective as of the Business Day set forth in such certificate.
(b) Upon payment by the Bank of an A Drawing, the Principal Stated
Amount shall be reduced automatically and permanently by an amount equal to the
amount so drawn, and the Interest Stated Amount may be reduced
permanently with such reduction of the Principal Stated Amount which such A
Drawing in an amount equal to 182 days' interest (calculated at the rate of
twelve and one-half of one percent (12 1/2%) per annum, based on a year of
365/366 days) on the amount of such reduction in the Principal Stated Amount,
such reduction of the Principal Stated Amount and the Interest Stated Amount to
be effective on the date of such payment.
(c) Upon payment by the Bank of a B Drawing, the Interest Stated
Amount shall be reduced automatically, subject to reinstatement pursuant to
Section 2.6 hereof, by an amount equal to the amount so drawn, such
reduction of the Interest Stated Amount to be effective on the date of such
payment.
(d) Upon payment by the Bank of a C Drawing, the Principal Stated
Amount shall be reduced automatically, subject to reinstatement pursuant to
Section 2.6 hereof, by an amount equal to the amount so drawn, and the
Interest Stated Amount shall be reduced automatically, subject to reinstatement
pursuant to Section 2.6 hereof, with the reduction of the Principal Stated
Amount after payment by the Bank of a B Drawing accompanying a C Drawing with
such C Drawing, in an amount equal to the accrued interest paid in connection
with such C Drawing, such reductions of the Principal Stated Amount and the
Interest Stated Amount to be effective on the date of such payment.
(e) Upon each purchase of Bonds pursuant to Section 2.1(b), the
Principal Stated Amount may be reduced, subject to reinstatement pursuant to
Section 2.6 hereof, by an amount equal to the principal amount of Bonds so
purchased by the Bank and the Interest Stated Amount may be reduced, subject to
reinstatement pursuant to Section 2.6 hereof, with the reduction of the
Interest Stated Amount, in an amount equal to the number of days of accrued
interest paid by the Bank in connection with such purchase of Bonds (calculated
at the rate of twelve and one-half of one percent (12 1/2%) per annum, based on
a year of 365/366 days) on the amount of such reduction in the Principal Stated
Amount, such reductions of the Principal Stated Amount and the Interest Stated
Amount to be effective on the date set forth in a certificate filed with the
Letter of Credit Department of the Bank in the form of Exhibit F to the Letter
of Credit.
(f) Upon any reduction of the Principal Stated Amount under Section
2.5(a), (b) or (d) and upon the purchase of Bonds pursuant to Section 2.1(b),
the amount of the Commitment to purchase Bonds under Section 2.1(b) shall be
reduced automatically, subject to reinstatement pursuant to Section 2.6 hereof,
by an amount equal to principal of and accrued interest on Bonds in the same
principal amount as the amount by which the Principal
<PAGE>
Stated Amount was reduced or the principal amount of Bonds so purchased, as
appropriated, but in no event shall such Commitment to purchase Bonds be reduced
pursuant to this paragraph (f) to an amount less than the principal of and up
to 182 days' accrued interest (calculated at twelve and one-half of one
percent (12 1/2%) per annum, based on a year of 365/366 days) on Bonds then
Outstanding, other than Purchased Bond
(g) If the Stated Amount shall be permanently reduced in part
pursuant to Section 2.5(a) or (b), the Bank shall then have the right to
require the Trustee to surrender the Letter of Credit to the Bank on the
effective date of such partial reduction of the Stated Amount and to accept on
such date, in substitution for such Letter of Credit, a substitute irrevocable
Letter of Credit, dated such date, in a stated amount equal to the amount to
which the Stated Amount shall have been so reduced but otherwise having terms
identical to the then outstanding Letter of Credit, except for such changes in
dollar amount corresponding to such permanent reduction.
(h) This Modification and the Letter of Credit shall terminate,
subject to the provisions of Sections 2.2 and 8.10 hereof, on the Expiration
Date. With the express consent of the Bank, the Expiration Date of this
Modification shall be extended by issuing an amendment to the Letter of Credit
extending the term thereof for one (l) year or a new letter of credit,
containing the same terms and conditions except for the Expiration Date and the
dated date of such new letter of credit, shall be issued for additional terms
of one year (but no Expiration Date shall exceed August 1, 2000), provided that
no Event of Default has occurred or the Letter of Credit has not otherwise been
terminated.
Section 2.6 Reinstatement and Transfer.
(a) Upon receipt by the Bank of reimbursement for any B Drawing
other than B Drawing to pay accrued interest on Bonds purchased with the
proceeds of a C Drawing in an amount equal to the full amount drawn under such
B Drawing, the Interest Stated Amount shall be automatically reinstated in the
amount of such payment received by the Bank. Notwithstanding the foregoing
sentence, the Interest Stated Amount shall be reinstated automatically
(notwithstanding any subsequent termination of the Letter of Credit) in the
full amount of the amount so drawn at the close of business on the tenth (10th)
Business Day following payment of the draft presented in connection with such B
Drawing, unless, prior to such time on the tenth (10th) Business Day the
Trustee shall have received written notice, or telephonic notice, promptly
confirmed in writing, from the Bank of the occurrence of an Event of Default
hereunder.
(b) The Principal Stated Amount and the Interest Stated Amount of
the Letter of Credit will be reinstated, to the extent of any reductions
in the Principal Stated Amount and/or the Interest Stated Amount of the Letter
of Credit made pursuant to paragraphs (d) and (e) of Section 2.5 hereof, and
any reductions in the Interest Stated Amount pursuant to paragraph (c) of
Section 2.5 hereof with respect to a B Drawing made to pay accrued interest
on Bonds purchased with the proceeds of a C Drawing, upon receipt by the Bank
of notice from the Trustee or the Agent, as agent of the Trustee for this
purpose, in the form of Exhibit
<PAGE>
G to the Letter of Credit, unless, prior to receipt by the Bank of such notice,
and at a time when the Bonds remain registered to the Bank, the Trustee and the
Tender Agent shall have received from the Bank either written notice, or
telephonic notice, promptly confirmed in writing, of the occurrence of an Event
of Default under this Modification.
(c) The amount of the Commitment to purchase Bonds pursuant to Section
2.1(b) hereof, following a reduction pursuant to Section 2.5(f) hereof, shall
automatically be reinstated upon any reinstatement of the Stated Amount of the
Letter of Credit for any reason, and in all events shall never be less than the
principal amount of and 182 days' accrued interest (calculated at twelve and
one-half of one percent (12 1/2%) per annum, based on a year of 365/366 days)
on Bonds then Outstanding (other than Purchased Bonds).
(d) The Bank agrees that prior to the delivery to the Tender Agent
of any Bond sold by the Bank pursuant to Section 2.8 hereof it shall increase
the Stated Amount of the Letter of Credit to cover principal and 182 days'
interest on such Bond together with all outstanding Bonds other than Purchased
Bonds.
(e) The Letter of Credit may be transferred by the Trustee solely in
accordance with the provisions thereof.
Section 2.7 Loan.
(a) Any drawing under the Letter of Credit not reimbursed to the Bank
on the date of such drawing shall automatically be converted into a demand loan
(the "Loan"). The Loan shall be evidenced by a restated and modified
promissory note dated August 1, 1995 (the "Promissory Note"), duly executed
and delivered by the Company to the Bank, and payable to the order of the
Bank. The Promissory Note shall be payable and bear interest as therein
provided.
(b) The Bank is hereby authorized by the Company to endorse on
schedules attached to the Promissory Note an appropriate notation evidencing the
date and amount of each Loan, each payment and any other information
provided for on such schedule, provided, however, that the failure of the Bank
to set forth such Loans, principal payments or prepayments and other
information on such schedule shall not in any manner affect the obligation of
the Company to repay the Loans in accordance with the terms of this
Modification and the Promissory Note.
Section 2.8 Grant of Option. The Bank hereby grants to the Company a call
option to cause the Bank to sell and the Company to purchase Purchased Bonds
owned by the Bank (the "Option") upon receipt of written instructions from
the Company on the date two (2) days prior to the date upon which the
Company will exercise such Option. The exercise price for such Option shall be
a price equal to the principal amount of each Purchased Bond purchased plus
accrued interest thereon at the Bank Rate. The Option may be exercised from
time to time and more than once if and so long as there exist any Purchased
Bonds. The Option expires on the date on which the Bonds are no longer
Outstanding. The grant of this
<PAGE>
Option to the Company is made by the Bank as a potential owner of the Bonds for
its own account and not as an agent or broker for the Company, the Guarantor
or for any other Person. This Option is not transferable by the Company to any
other Person. Pursuant to this Option, the Bank, as owner of Purchased
Bonds, shall not be required to sell Purchased Bonds to any Person other than
the Company nor shall the Bank, as owner of Purchased Bonds, assist or be
required to assist the Company in locating purchasers for the Purchased Bonds
subject to the Option.
ARTICLE THREE
Guaranty
Section 3.1 Guaranty of Payment. The Guarantor hereby reaffirms and
restates that the Guarantor absolutely and unconditionally guarantees to the
Bank for its benefit and that of its successors and assigns, the full and
prompt payment of all obligations of the Company under this Modification and
the Promissory Note, including, but not limited to, any payments due pursuant
to Sections 2.2, 2.3, 2.7, 2.8, 7.1(b), 8.1 and 8.3 hereunder.
Section 3.2 Right of Setoff; Other Collateral.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Bank is hereby authorized at any time and from time to time,
without notice to the Guarantor (any such notice being expressly waived by the
Guarantor) and to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and any other Indebtedness at the time owing to the Bank to or
for the credit or the account of the Guarantor against any and all of the
obligations of the Company or the Guarantor now or hereafter existing under
this Modification or the Promissory Note, irrespective of whether or not the
Bank shall have made any demand to the Company under this Modification and
although such obligations may be unmatured.
(b) Without modifying the payment provisions of Section 2.2 of this
Modification, the Promissory Note or any Purchased Bonds, the Bank hereby
agrees to waive its rights, at law or otherwise, at any time after the
commencement of and during the pendency of a case by or against the Company
seeking relief under the Bankruptcy Code, as now constituted or hereafter
amended, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at the time held and any other Indebtedness at
the time owing by the Bank to or for the account of against any and all
obligations of the Company under this Modification, the Promissory Note or any
Purchased Bonds to reimburse the Bank for amounts drawn and paid under the
Letter of Credit; provided, that such waiver shall terminate and be of no force
and effect as and when to the extent that the exercise of such rights would not
result in the Bank's being released, prevented or restrained from or delayed in
fulfilling its obligation under the Letter of Credit, and provided, further,
that such waiver shall terminate and be of no force and effect if the absence
of such waiver
<PAGE>
would not result in the lowering or suspension by Moody's Investors Service
of its rating of the Bonds.
3.3 Absolute and Unconditional Guaranty of Payment; Survival of
Obligations. The obligations of the Guarantor hereunder shall be an absolute,
irrevocable, unconditional, present and continuing guaranty of payment and not
of collectibility and shall remain in full force and effect so long as any
amount payable hereunder or by the Company under this Modification or the
Promissory Note shall remain unpaid or any potential liability of the Company
under this Modification or the Promissory Note shall survive the maturity or
redemption of the Bonds and the expiration or termination of the Letter of
Credit. The Guarantor hereby consents that from time to time, before or after
any Event of Default or default by the Company under any Basic Document or any
notice of termination hereof, with or without further notice to or assent from
the Guarantor, any security at any time held by or available to the Bank for
any obligation of the Company, or any security at any time held by or available
to the Bank for any obligation of any other Person secondarily or otherwise
liable for any of the obligations of the Company under this Modification or
Promissory Note, may be exchanged, surrendered or released and any obligation
of the Company, or of any such other Person, may be changed, altered, renewed,
extended, continued, surrendered, compromised, waived or released, in whole or
in part, or any default with respect thereto waived, and the Bank may fail to
set off and may release, in whole or in part, any balance of any deposit
account or credit on its books in favor of the Company, or of any such other
Person, and may extend further credit in any manner whatsoever to the Company,
and generally deal with the Company or any such security or other Person as the
Bank may see fit; and the Guarantor shall remain bound under this guaranty
notwithstanding any such exchange, surrender, release, change, alteration,
renewal, extension, continuance, compromise, waiver, inaction, extension of
further credit or other dealing.
If claim is ever made upon the Bank for repayment or recovery of any amount
or amounts received by the Bank in payment or on account of any of the
obligations of the Company under this Modification or Promissory Note,
including, but not limited to, any avoided transfers under the Bankruptcy Code,
and the Bank repays all or part of such amount by reason of (a) any judgment,
decree or order of any court or administrative body having jurisdiction over
the Bank or any of its property, or (b) any settlement or compromise of any
such claim effected and in such event the Guarantor agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon the
Guarantor, notwithstanding any revocation hereof or the cancellation of any
note or other instrument evidencing any liability of the Company including, but
not limited to, this Modification or the Promissory Note, the Guarantor shall
be and will remain liable to the Bank hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by the Bank.
Section 3.4 Bank May Proceed Directly Against Guarantor. Upon the
occurrence of an Event of Default hereunder, the Bank may proceed hereunder
against the Guarantor without first proceeding against the Company under any
Basic Document, the Promissory Note or otherwise. The Guarantor waives any
right to require that any action be brought
<PAGE>
against the Company or any other Person or to require that resort be had to
any security or to any balance of any deposit account or credit on the books
of the Bank in favor of the Company or any other Person.
Section 3.5 Waiver of Notice. The Guarantor hereby waives any notice,
whether written or otherwise, of the failure of the Company to make any payment
due to the Bank under this Modification or the Promissory Note.
Section 3.6 Agreement to Pay Costs. The Guarantor, without notice or
demand, agrees to pay all costs, including attorneys' fees and disbursements of
the Bank in enforcing or attempting to enforce this Modification.
ARTICLE FOUR
Conditions Precedent
Section 4.1 Conditions Precedent to Issuance of the Letter of Credit and
Commitment to Purchase Bonds. The following were conditions precedent to the
obligation of the Bank to issue the original Letter of Credit and to
purchase Bonds under the Agreement:
(a) the Company and/or the Guarantor provided to the Bank, in form and
substance satisfactory to the Bank and its special counsel:
(i) the written opinion of counsel to the Company and the
Guarantor, dated the date of initial delivery of the Bonds, with respect to the
matters referred to in Appendix 1 of the Agreement;
(ii) the written opinions of Bond Counsel and counsel to the
Issuer, dated the date of initial delivery of the Bonds, with respect to the
matters referred to in Appendices 2 and 3 of the Agreement, respectively;
(iii) a certificate or certificates, signed by a duly
authorized officer of the Guarantor and a duly authorized officer of the
Company, respectively, dated the date of initial delivery of the Bonds, stating
that on the date of the execution and delivery of the Agreement:
(a) the representations and warranties contained in
Article Five thereof were correct on and as of the date of the Agreement as
though made on such date;
(b) none of the Events of Default (as defined in Article
Seven thereof) had occurred and was continuing, or would result from the
issuance of the Letter of Credit, the execution and delivery of the Agreement
or any other Basic Document to which the Company or the Guarantor is a party,
and no event had occurred and was continuing
<PAGE>
which would constitute an Event of Default but for the requirement that notice
be given or time elapse or both; and
(c) the audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the Fiscal Year ending January 26, 1985, accurately
reflected the financial condition and performance of the Guarantor, the Company
and Subsidiaries and no material adverse change had occurred in such financial
condition and performance since April 27, 1985;
(iv) evidence of due authorization, execution and delivery by the
parties thereto of the Related Documents;
(v) a copy of resolutions of the Board of Directors of the Company
and the Guarantor, certified as of the date of the Letter of Credit by an
authorized officer of the Company and the Guarantor, authorizing, among
other things, the execution, delivery and performance by the Company of the
Basic Documents to which the Company is a party and the Agreement and the
Guaranty Agreement by the Guarantor and authorizing the Company to obtain the
issuance of the Letter of Credit;
(vi) certified copies of the Company's and the Guarantor's
certificates of incorporation, by-laws and certificates of good standing in the
State and, for the Company, evidence that it was in good standing for doing
business in the State of Arkansas;
(vii) executed counterparts or certified copies of the Related
Documents;
(viii) true and correct copies of all governmental
approvals necessary (a) for the Company to enter into the Basic Documents to
which the Company is a party, and the transactions contemplated by the
Agreement and (b) for the Guarantor to enter into the Agreement and the
Guaranty Agreement;
(ix) a certificate of the Secretary of the Company
certifying the name and true signatures of the officers of the Company
authorized to sign the Basic Documents to which the Company is a party and a
certificate of the Secretary of the Guarantor certifying the name and true
signatures of the officers of the Guarantor authorized to sign the Agreement
and the Guaranty Agreement;
(x) a schedule of estimated Project costs and such other
information relating to the Project;
(xi) a certified copy of the resolution of the Issuer
authorizing the issuance of the Bonds;
(xii) evidence that Moody's Investors Service had given the Bonds
a credit rating at least as high as the Bank's rating or that such Bonds
qualified for such rating;
<PAGE>
(xiii) evidence that the Issuer had duly executed, issued and
delivered the Bonds to the Trustee and the Trustee had duly authenticated the
Bonds and delivered the Bonds against payment;
(xiv) audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the fiscal year ending January 26, 1985, including any
management letters related thereto for the Company and the Guarantor;
(xv) a set of preliminary or final plans and
specifications, trade cost breakdown, construction schedule and the general
contract for the Project, if and to the extent such plans and specifications
were available;
(xvi) copy of subordinated debt agreement of the Guarantor and its
Subsidiaries certified by the secretary of the Guarantor; and
(xvii) the receipt of such other documents, certificates and
opinions as the Bank or its special counsel requested and the acceptability of
the documents, certificates and opinions in subsections (i) through (xvii)
hereof to the satisfaction of such special counsel;
(b) no law, regulation, ruling or other action of the United
States, the State or the State of Arkansas or any political subdivision, agency
or authority or court therein or thereof was to be in effect or to have
occurred, the effect of which would be to prevent the Bank from fulfilling its
obligations under the Agreement or under the Letter of Credit.
Section 4.2 Conditions Precedent to this Modification and Renewal of the
Letter of Credit. As conditions precedent to the obligation of the Bank to
enter into this Modification, to renew the Letter of Credit and to purchase
Bonds hereunder:
(a) the Company and/or the Guarantor shall provide the Bank on the date
of this Modification, in form and substance satisfactory to the Bank and its
special counsel:
(i) the written opinion of counsel to the Company and the
Guarantor, dated the date of this Modification with respect to the matters
referred to in Appendix 1 hereto;
(ii) a certificate or certificates, signed by a duly
authorized officer of the Guarantor and a duly authorized officer of the
Company, respectively, dated the date hereof, stating that on the date of the
execution and delivery of this Modification:
(a) the representations and warranties contained in
Article Five of this Modification are correct on and as of the date of this
Modification as though made on such date:
<PAGE>
(b) none of the Events of Default (as defined in Article
Seven hereof) has occurred and is continuing, or would result from the renewal
of the Letter of Credit, the execution and delivery of this Modification or any
other Basic Document to which the Company or the Guarantor is a party, and no
event has occurred and is continuing which would constitute an Event of Default
but for the requirement that notice be given or time elapse or both; and
(c) the audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the Fiscal Year ending January 28, 1995, accurately
reflect the financial condition and performance of the Guarantor, the Company
and Subsidiaries and no material adverse change has occurred in such financial
condition and performance since January 28, 1995;
(iii) evidence of due authorization, execution and delivery
by the parties thereto of the Modification Documents;
(iv) a copy of resolutions of the Board of Directors of the
Company and the Guarantor, certified as of the date of this Modification by an
authorized officer of the Company and the Guarantor, authorizing, among
other things, the execution, delivery and performance by the company and the
Guarantor of this Modification and authorizing the company to obtain the
renewal of the Letter of Credit;
(v) certified copies of the Company's and the Guarantor's
certificates of incorporation, by-laws and certificates of good standing in the
State and, for the Company, evidence that it is in good standing for doing
business in the State of Arkansas;
(vi) a certificate of the Secretary of the Company
certifying the name and true signatures of the officers of the Company
authorized to sign this Modification and a certificate of the Secretary of the
Guarantor certifying the name and true signatures of the officers of the
Guarantor authorized to sign this Modification:
(vii) audited fiscal consolidated and unaudited
consolidating (certified by the chief financial officer of the Guarantor)
financial statements for the fiscal year ending January 28, 1995, including any
management letters related thereto for the Company and the Guarantor;
(viii) the receipt of such other documents, certificates and
opinions as the Bank or its special counsel may reasonably request and the
acceptability of the documents, certificates and opinions in subsections (i)
through (viii) hereof to the satisfaction of such special counsel;
(b) no law, regulation, ruling or other action of the United
States, the State or the State of Arkansas or any political subdivision, agency
or authority or court therein or
<PAGE>
thereof shall be in effect or shall have occurred, the effect of which would
be to prevent the Bank from fulfilling its obligations under this Modification
or under the Letter or Credit.
ARTICLE FIVE
Representations and Warranties of the Company and Guarantor
The Company and the Guarantor represent and warrant, which
representations and warranties shall be deemed to be remade at the time of each
purchase of Bonds hereunder and at the time of each drawing under the Letter of
Credit, that:
Section 5.1 Organization. Corporate Powers. The Company and the
Guarantor are business corporations duly incorporated, validly existing and in
good standing under the law of the State, with all requisite power and
authority to conduct its business and to own its properties and is qualified to
do business in the State and the Company is qualified to do business in the
State of Arkansas.
Section 5.2 Corporate Authority, etc. The execution, delivery and
performance by the Company of the Basic Documents to which it is a party and by
the Guarantor of this Modification and the Guaranty Agreement, have been duly
authorized by all necessary corporate action and such Basic Documents
constitute legal, valid and binding obligations of the Company, and this
Modification and this Guaranty Agreement constitute legal, valid and binding
obligations of the subject to (i) bankruptcy, reorganization, insolvency,
moratorium or other similar laws of general application relating to the
enforcement of creditors' rights; and (ii) certain equitable remedies.
Section 5.3 Compliance with Laws and Contracts. The execution,
delivery and performance by the Company of the Basic Documents to which it is a
party and this Modification and the Guaranty Agreement by the Guarantor do not
and will not: (a) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award as currently in
effect to which the Company or the Guarantor is subject or of the certificate
of incorporation or by-laws of the Company or the Guarantor; (b) result in a
breach of or constitute a default under the provisions of any indenture, loan
or credit agreement or any other agreement, lease or instrument to which the
Company or the Guarantor is subject or by which they, or their property, is
bound; or (c) result in, or require, the creation or imposition of any
mortgage, deed of trust, assignment, pledge, lien, security interest or other
charge or encumbrance of any nature or with respect to any of the properties of
the Company or the Guarantor other than as provided therein; and the Company
and the Guarantor are not in default under any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, agreement lease or instrument.
<PAGE>
Section 5.4 Governmental Approvals. The Company and the Guarantor have
obtained all authorizations, consents, approvals, licenses, exemptions of or
filing or registrations with all commissions, boards, bureaus, agencies and
instrumentalities, domestic or foreign, necessary to the valid execution,
delivery and performance by the Company of the Basic Documents to which it is a
party and by the Guarantor of this Modification and the Guaranty Agreement.
Section 5.5 Financial Statements. The audited consolidated and
unaudited consolidating (certified by the chief financial officer of the
Guarantor) financial statements of the Guarantor as at January 28, 1995 and
April 29, 1995, heretofore delivered to the Bank were prepared in accordance
with GAAP in effect on the date such statements were prepared and fairly
present the financial condition of the Company and the Guarantor at such dates
and the results of its operations for the period then ended. No adverse change
in the condition of the Company or the Guarantor as shown on such financial
statements occurred from January 28, 1995, through and including the date of
this Modification. There are no contingent liabilities of the Company or the
Guarantor not disclosed in such financial statements nor are there any payments
due of any material amounts.
Section 5.6 Taxes. The Company and the Guarantor have filed all United
States Federal tax returns and all other tax returns which, to the
knowledge of the Company and the Guarantor, are required to be filed (whether
informational returns or not), and have paid all taxes due, if any, pursuant to
such returns or pursuant to any assessment received by the Company or the
Guarantor, except such taxes, if any, as are being contested in good faith and
as to which reasonable reserves have been provided.
Section 5.7 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Company or the Guarantor, threatened
against the Company or the Guarantor or any of their properties before any
court, arbitrator or governmental department, commission, board, bureau, agency
or instrumentality which, if determined adversely to the Company or the
Guarantor, would singly or in the aggregate, have a material adverse effect on
the business, properties, earnings, prospects or conditions of the ability of
the Company or the Guarantor to perform under this Modification or the
Promissory Note.
Section 5.8 Employee Benefit Plans.
(a) As used in this Section 5.8 and in Section 7.1(a)(xiii) hereof, the
following terms shall have the following meanings:
(i) "Accrued Benefit" - shall have the meaning assigned to
that term in Section 3(23) of ERISA.
(ii) "Accumulated Funding Deficiency" - shall have the meaning
assigned to that term in Section 302(a)(2) of ERISA and Section 412(a) of the
Code.
<PAGE>
(iii) "Employee Pension Benefit Plan" - shall have the meaning
assigned to that term in Section 3(2) of ERISA.
(iv) "Employer Liability" - shall mean the liability computed
under Sections 4062, 4063 and 4064 of ERISA.
(v) "ERISA" - shall mean the Employee Retirement Income
Security Act of 1974, as now in effect or as hereafter amended. All
citations to sections, subtitles, titles or other parts of ERISA are to such
sections, subtitles, titles or other parts as they may from time to time be
amended or renumbered.
(vi) "PBGC" - shall mean the Pension Benefit Guaranty Corporation.
(vii) "Plan" - shall mean any "employee benefit plan" (as that
term is defined in Section 3(3) of ERISA but shall not include a
multiemployer plan as defined in Section 3(37)A or Section 4001(A)(3) of
ERISA), as well as any other written or formal plan or contract involving
direct or indirect compensation, under which the Guarantor, the Company or any
Subsidiary has any present or future obligations or liability on behalf of its
employees or former employees or their dependents or beneficiaries, including
but not limited to, each retirement, pension, profit sharing, thrift, savings,
target benefit, employee stock ownership, cash or deferred, multiple employer,
multiemployer or other similar plan or program, each other deferred or
incentive compensation, bonus, stock option, employee stock purchase, "phantom
stock" or stock appreciation right plan, each other program providing payment
or reimbursement for or of medical, dental or visual care, psychiatric
counseling or vacation, sick, disability or severance pay and each other
"fringe benefit" plan or arrangement.
(viii) " Reportable Event" - shall mean any of the events
enumerated in Section 4043(b) of ERISA or the regulations issued
thereunder.
(ix) "Withdrawal Liability" - shall mean the liability described
in Section 4201 of ERISA.
(b) The written terms of each of the Plans and any related trust
agreement group annuity contract, insurance policy or other funding arrangement
are in compliance with the applicable requirements, if any, of ERISA, the Code
or other applicable federal or state law and each of the Plans has been
administered in compliance with such requirements and in accordance with its
terms and the provisions of the applicable collective bargaining agreements, if
any. Each of the Plans for which the Guarantor, the Company or any Subsidiary
has claimed a deduction under Section 404 of the Code, as if such Plan was
qualified under Section 401(a), 403(a), or 408(k) of the Code, has received a
favorable determination letter from the Internal Revenue Service as to
qualification under the appropriate section, and such favorable determination
has not been modified, revoked or limited by failure to satisfy any condition
thereof or by a subsequent amendment to, or failure to amend such Plan. All
contributions which were due and payable on or before the date
<PAGE>
hereof to the Plans have been made in full and in proper form, and adequate
accruals have been provided for in the financial statements for all other
contributions or amounts as may be required to be paid to the Plans with
respect to periods which include the date hereof or ended prior thereto,
and neither the Guarantor, the Company nor any Subsidiary has made or agreed
to make, or is required to make (in order to bring any of the Plans
into substantial compliance with the applicable requirements, if any, of
ERISA, the Code or other applicable federal or state law), any changes in
benefits which would materially increase the costs of maintaining any of the
Plans. The present value of all Accrued Benefits of each of the Plans which is
an Employee Pension Benefit Plan does not exceed the current value of the assets
of each such Plan as of the date hereof (based on the interest rate,
mortality and other actuarial assumptions then used for the purpose of
determining the contributions required to be made to each such Plan) in
the aggregate, excluding any Plan for which the current value of Plan assets
equals or exceeds the present value of all Accrued Benefits. No Plan that is
subject to Part 3 of Subtitle B of Title I of ERISA or Section 412 of the Code
had an Accumulated Funding Deficiency as of the end of any Plan's respective
Plan year, whether or not waived. All premiums (and interest charges and
penalties for late payment), if any, due the PBGC as of the date hereof with
respect to the Plans have been paid and, since September 2, 1974, there has
been no Reportable Event with respect of any of the Plans subject to Title IV
of ERISA. No Employer Liability or Withdrawal Liability to the PBGC, to any
Employee Pension Benefit Plan or to another Person or entity has been or is
expected by the Company to be, incurred by the Company or any Subsidiary. None
of the Plans subject to Title IV of ERISA has been terminated, no proceeding
to terminate any of such Plans has been instituted, and there has been no
complete or partial withdrawal, cessation of facility operations or
occurrence or any other event that would result in the imposition of
liability on the Guarantor, the Company or any Subsidiary under Title IV of
ERISA. There is not now, nor since January 1, 1975 has there been, any
transaction involving any Plan which is a "prohibited transaction" under
Sections 406 and 407 of ERISA or Section 4975 of the Code in connection with
which the Guarantor, the Company or any Subsidiary could be subject to any
liability under Title I of ERISA or any excise tax imposed by Section 4975 of
the Code. The Guarantor, the Company and each Subsidiary has, since January 1,
1975, satisfied any bond coverage requirement of ERISA and all reporting and
disclosure obligations under ERISA and the Code with respect to each of the
Plans and the related trust, group annuity contract, insurance policy or
other funding arrangement. No liability for failure to comply with the
withholding tax requirements applying to payments from the Plans has been or
is reasonably expected by the Guarantor or the Company to be, incurred by the
Guarantor, the Company or any Subsidiary. There is no suit, action,
dispute, claim, arbitration or legal, administrative or other proceeding or
governmental investigation pending or threatened, alleging a breach or breaches
of the terms of any of the Plans or of any fiduciary duties thereunder, or
violations of ERISA or the Code or other applicable federal or state law with
respect to any such Plan which might reasonably be expected to result in
material liability to the Guarantor, the Company or any Subsidiary or to have a
material adverse effect on the operations or condition (financial or otherwise)
of the Guarantor, the Company or any Subsidiary or any such Plan, nor is there
any basis or grounds for any such material suit, action, dispute, claim,
arbitration, proceeding or investigation.
<PAGE>
Section 5.9 Title to Property. The Company and the Guarantor have good
and marketable title to all of their Property, free and clear of all Liens
except for Liens shown in the financial reports of the Company or the Guarantor
delivered to the Bank for the Fiscal Year ending January 28, 1995.
Section 5.10 Liens. There are no Liens on the Project except
Permitted Encumbrances (as defined in the Installment Sale Agreement). Except
as otherwise provided by law, the obligations of the Company or the Guarantor
to pay the amounts payable under this Modification are not subordinate, in any
respect, to the payment of obligations under all other unsecured and
unsubordinated loans, debts, guaranties or other similar obligations incurred,
created or assumed by the Company or the Guarantor.
Section 5.11 Offering Memorandum. The information concerning the
Company and the Guarantor in the Offering Memorandum is materially accurate and
there has been no material omission of information which in light of the
circumstances would make the information concerning the Company or the
Guarantor in the Offering Memorandum materially misleading or inaccurate.
ARTICLE SIX
Covenants
Section 6.1 Affirmative Covenants. The Company and the Guarantor
covenant and agree with the Bank that they will do the following so long as the
Expiration Date has not occurred and the Stated Amount of the Letter of Credit
has not been permanently reduced to zero, and thereafter so long as any amounts
remain outstanding or obligations remain unfulfilled under this Modification or
the Promissory Note, and for so long as the Bank shall be obligated to purchase
Bonds under Section 2.1(b) hereof or shall be the registered holder of any
Purchased Bond, unless the Bank shall otherwise consent in writing:
(a) Accounting; Financial Statements and Other Information. The
Guarantor and the Company shall deliver to the Bank:
(i) within ninety (90) days after the end of each fiscal year
of the Guarantor and the Company, respectively, consolidated and consolidating
balance sheets of the Guarantor and the Company, respectively,
and their consolidated Subsidiaries as at the end of such year, and
consolidated and consolidating statements of income and retained earnings and
changes in financial position of the Guarantor and the Company, respectively,
and their consolidated Subsidiaries for such year, setting forth in each case
in comparative form corresponding consolidated and consolidating figures from
the preceding fiscal year, all as reported on by Coopers & Lybrand or other
independent certified public accountants of nationally recognized standing;
<PAGE>
(ii) within sixty (60) days after the end of each of the first
three (3) quarters of each fiscal year of the Guarantor and the Company,
respectively, consolidated and consolidating balance sheets of the Guarantor
and the Company, respectively, and their consolidated Subsidiaries as at the
end of such quarter and the related consolidated and consolidating
statements of income and retained earnings and changes in financial position of
the Guarantor and the Company, respectively, and their consolidated
Subsidiaries for such quarter and for the portion of the Guarantor's and the
Company's, respectively, fiscal year ended at the end of such quarter as filed
with the Securities and Exchange Commission, all certified (subject to normal
year-end adjustments) as to fairness of presentation, generally accepted
accounting principles and consistency by the chief financial officer or the
chief accounting officer of the Guarantor and the Company, respectively;
(iii) simultaneously with the delivery of each set of financial
statements referred to in clauses (i) and (ii) above, a certificate of the
chief financial officer or the principal accounting officer of the Guarantor
and the Company, respectively, (A) setting forth whether the
Guarantor and the Company, respectively, were in compliance with the
requirements of Section 6.2 on the date of such financial statements, (B)
stating whether there exists on the date of such certificate any Default or
Event of Default and, if any Default or Event of Default exists, setting forth
the details thereof and the action which the Guarantor and the Company,
respectively, are taking or propose to take with respect thereto, and (C)
having attached thereto a schedule in reasonable detail satisfactory to the
Bank setting forth the computations necessary to determine whether the
Guarantor and the Company, respectively, are in compliance with the financial
covenants set forth in Section 6.2;
(iv) promptly upon the mailing thereof to the shareholders
of the Guarantor and the Company, respectively, generally, copies of all
financial statements, reports and proxy statements so mailed;
(v) promptly upon the filing thereof, copies of all registration
statements, annual reports and Form 8-K's or its equivalent which the
Guarantor and the Company, respectively, shall have filed with the
Securities and Exchange Commission;
(vi) promptly upon the occurrence of any Default or Event of
Default, a certificate of the chief financial officer or the principal
accounting officer of the Company setting forth the details thereof and the
action which the Company is taking or proposes to take with respect thereto;
(vii) from time to time such additional information regarding
the financial position or business of the Guarantor and the Company,
respectively, as the Bank may reasonably request.
(b) Compliance with Laws. Guarantor shall comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable
laws, rules, regulations and orders. In furtherance, but not in limitation,
of such obligation, Guarantor shall:
<PAGE>
(i) comply in all material respects with all Environmental
Laws;
(ii) notify the Bank immediately of any notice of a hazardous
discharge or environmental complaint received from any governmental agency or
any other party if there exists the reasonable likelihood of a material
loss or liability or the reasonable likelihood of the suspension of business
operations;
(iii) In the event of any hazardous discharge from or affecting
any of the premises of either Guarantor or any of its Subsidiaries which has a
reasonable likelihood of resulting in a material loss or liability
or a material suspension of business operations, (i) notify the Bank
immediately thereof, (ii) promptly contain and remove the same in the manner
required by law, (iii) promptly pay any fine or penalty assessed in connection
therewith unless being contested in good faith by proper proceedings, (iv) at
the request of the Bank, permit the Bank to inspect all books, correspondence
and records pertaining thereto, (v) at the Guarantor's expense, provide a
report of a qualified environmental engineer reasonably acceptable to the Bank
with sufficient information to enable the Bank to determine the Guarantor's
liability for remediation and response costs, damages, fines and other costs
and expenses arising out of the hazardous discharge, to the extent such
liability can reasonably be quantified by the engineer, and (vi) provide such
other and further assurances reasonably satisfactory to the Bank that the
condition has been corrected.
(c) Preservation of Corporate Existence etc.; Conduct of Business;
Ownership of Certain Subsidiaries. The Guarantor and each Restricted Subsidiary
shall do or cause to be done all things necessary (i) to preserve and keep
in full force and effect its existence, rights and franchises, and (ii) to
maintain each Restricted Subsidiary as a Restricted Subsidiary, except as
otherwise permitted by Sections 6.2(e)(i), 6.2(e)(ii) and 6.2(i).
(d) Maintenance of Properties; Insurance; Records. The Guarantor
and each Restricted Subsidiary shall:
(i) Maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(ii) Maintain, with financially sound and reputable insurers,
insurance with respect to its Property and business against such casualties
and contingencies, of such types (including public liability, larceny,
embezzlement or other criminal misappropriation insurance) and in such amounts
as is customary in the case of corporations of established reputations engaged
in the same or a similar business and similarly situated;
(iii) Keep true books of records and accounts in which full and
correct entries will be made of all its business transactions, and will
reflect in its financial statements adequate accruals and appropriations to
reserves, all in accordance with GAAP.
(e) Payment of Taxes and Claims, etc. The Guarantor and each
Restricted Subsidiary will pay, before they become delinquent, (i) all taxes,
assessments and
<PAGE>
governmental charges or levies imposed upon it or its Property, and (ii) all
claims or demands of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons which, if unpaid, might result in the creation of a
Lien upon its Property, provided that the items enumerated in clauses (i) and
(ii) above need not be paid while being contested in good faith and by
appropriate proceedings and provided further that adequate book reserves have
been established with respect thereto, if required by GAAP, and provided
further that the owing company's title to, and its right to use, its Property
(f) Bond Proceeds; Additional Funds. Use the proceeds of the Bonds
for the purposes set forth in the Indenture and complete the Project in
accordance with Article III of the Installment Sale Agreement.
(g) Further Assurance. Execute and deliver to the Bank all such
documents and instruments and do all such other acts and things as may be
necessary or required by the Bank to enable the Bank to exercise and enforce
its rights under this Modification, and to record and file and re-record and
re-file all such documents and instruments, at such time or times, in such
manner and at such place or places, all as may be necessary or required by the
Bank to validate, preserve and protect the position of the Bank under this
Modification, the Promissory Note and the Security Agreement.
(h) Disclosure to Bondholders. Permit the Bank and the Agent to
disclose the financial information described in Section 6.1(a) hereof to
potential Bondholders.
Section 6.2 Negative Covenants. The Company and the Guarantor
covenant and agree with the Bank that so long as the Expiration Date has not
occurred and the Stated Amount of the Letter of Credit has not been permanently
reduced to zero, and thereafter until the Bank delivers to the Company a
certificate that to its knowledge no amounts remain outstanding under and no
obligations remain unfulfilled under this Modification or the Promissory Note
(which certificate shall not prejudice any rights of the Bank and which
certificate shall not be unreasonably withheld), and for so long as the Bank
shall be obligated to purchase Bonds under Section 2.1(b) hereof or shall be
the registered holder of any Purchased Bond, the Company and the Guarantor will
not directly or indirectly, unless the Bank shall otherwise consent in writing:
(a) Mortgages, Liens, etc. Neither the Guarantor nor any Restricted
Subsidiary will cause or permit or hereafter agree to consent to cause or
permit in the future (upon the happening of a contingency or otherwise)
any of its Property, whether now owned or subsequently acquired, to be subject
to a Lien except:
(i) Liens securing the payment of taxes, assessments or
governmental charges or levies or the demands of suppliers, mechanics,
repairmen, workmen, materialmen, carriers, warehousers, landlords and other
like Persons, or similar statutory Liens, provided that (A) they do not in the
aggregate materially reduce the value of any Properties subject to the Liens or
materially interfere with their use in the ordinary conduct of the owning
<PAGE>
company's business, (B) all claims which the Liens secured are not delinquent
or are being actively contested in good faith and by appropriate proceedings
and (C) adequate reserves have been established therefor on the books of the
Guarantor, if required by generally accepted accounting principles;
(ii) Liens incurred or deposits made in the ordinary course of
business (A) in connection with worker's compensation, unemployment insurance,
social security and other like laws, or (B) to secure the performance
of letters of credit, bids, tenders, sales contracts, leases, statutory
obligations, surety, appeal and performance bonds and other similar
obligations, in each case not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of Property;
(iii) attachment, judgment and other similar Liens arising in
connection with court proceedings, provided that (A) execution and other
enforcement are effectively stayed, (B) all claims which the Liens secure are
being actively contested in good faith and by appropriate proceedings and (C)
adequate reserves have been established therefor on the books of the
Guarantor, if required by generally accepted accounting principles;
(iv) Liens on Property of a Restricted Subsidiary, provided
that they secure only obligations owing between the Guarantor and any
Restricted Subsidiary;
(v) Liens existing on the date hereof, which liens are set forth
on Exhibit A hereto;
(vi) other Liens not otherwise permitted under this Section
6.2(a)(i)-(v) securing Long Term Debt or Current Debt and limited to real
estate, plant or equipment, provided such Liens secure the purchase price of
such property, do not exceed the lesser of the cost or fair market value of such
property, and do not extend to any other asset; and provided, further, that
the aggregate amount of indebtedness secured by such Liens shall not exceed
twenty percent (20%) of Consolidated Adjusted Tangible Net Worth or the amounts
permitted under Section 6.2(b)(iv)-(v) with respect to indebtedness incurred
by one of the Subsidiaries identified therein; and
(vii) Liens resulting from the extension, refunding, renewal or
replacement of the indebtedness secured by the Liens described in paragraphs
(iv), (v) and (vi) above, up to the amount outstanding under such indebtedness
at the time of such extension, refunding, renewal or replacement.
(b) Financial Covenants.
(i) The Guarantor will at all times maintain Consolidated
Current Assets at not less than 175% of Consolidated Current Liabilities.
<PAGE>
(ii) The Guarantor will at all times maintain Consolidated
Working Capital of not less than $90,000,000.
(iii) The Guarantor will at all times maintain Consolidated
Adjusted Tangible Net Worth of not less than $80,000,000 plus 30% of
Consolidated Adjusted Net Income accumulated after January 28, 1995. The
minimum Consolidated Adjusted Tangible Net Worth requirement set forth in this
Section shall be unaffected by and shall not be reduced as a result of losses,
if any, sustained by the Guarantor or its consolidated Subsidiaries after
January 28, 1995.
(iv) The Guarantor shall not permit Buffalo China, Inc. to
incur Total Funded Debt in excess of $5,000,000 and the Company to incur
Total Funded Debt in excess of $7,500,000, except for Total Funded Debt payable
to the Guarantor and permitted by Section 6.2(c).
(v) The Guarantor shall not permit Kenwood Silver Company,
Inc. to incur any Total Funded Debt.
(vi) For the period of four (4) consecutive fiscal quarters
immediately prior to the execution of this Modification and for each period of
four (4) consecutive fiscal quarters thereafter, the Guarantor will maintain
Consolidated Income Available for Interest Charges at not less than 200% of
Consolidated Interest Charges.
(vii) The ratio of Total Funded Debt of the Guarantor and its
Restricted Subsidiaries to Consolidated Adjusted Tangible Net Worth shall not
exceed:
(A) 1.55 through the fiscal quarter ending July 30, 1995; and
(B) 1.35 as at the end of each fiscal quarter ending after
August 1, 1995.
(c) Restricted Payments. Neither the Guarantor nor any Restricted
Subsidiary will declare, make or incur any liability to make, any Restricted
Payment or make or authorize any Restricted Investment or purchase or
otherwise acquire any Restricted Payment or Restricted Investment if,
immediately after giving effect to Restricted Payment or Restricted Investment:
(i) the sum of such Restricted Payments and the amount of Restricted
Investments (valued immediately after such action) made after April 29, 1995
would exceed the sum of 20% of Consolidated Adjusted Net Income accumulated
after January 28, 1995, plus $11,000,000; (ii) a Default or an Event of Default
under this Modification would exist, or (iii) the Guarantor could not incur at
least $1.00 of additional Total Funded Debt pursuant to Section 6.2(b)(vii).
Notwithstanding anything in this Section 6.2(c) to the contrary, (i)
the aggregate amount of loans and advances by Guarantor to, and accounts
receivable of Guarantor from, Buffalo China, Inc. shall not exceed $10,000,000
and (ii) Guarantor shall not make or permit
<PAGE>
to exist any loans or advances by Guarantor to, or accounts receivable of
Guarantor from, Kenwood Silver Company, Inc.
(d) Restricted Dividends. Neither the Guarantor nor any Restricted
Subsidiary will declare, make, pay or incur any liability for, any Restricted
Dividend other than (i) a Restricted Dividend paid to Guarantor by a Restricted
Subsidiary, (ii) Restricted Dividends paid during the fiscal year ending
January 28, 1995, in an amount not to exceed $5,500,000 in the
aggregate, and (iii) Restricted Dividends paid subsequent to January 28, 1995
which do not exceed the sum of $6,000,000 plus 50% of Consolidated Adjusted Net
Income accumulated subsequent to January 28, 1995.
(e) Consolidation, Merger Sale of Assets etc. The Guarantor will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
(i) Be a party to any merger or consolidation (except that a
Restricted Subsidiary may merge into or consolidate with the Guarantor or
another Restricted Subsidiary) provided that the Guarantor may merge or
consolidate with another corporation if (A) the surviving or acquiring
corporation (v) is organized under the laws of the United States or a
jurisdiction thereof, (w) expressly assumes the covenants and obligations in
the Guaranty Agreement and this Modification, (x) is solvent, (y) would not,
immediately after giving effect to the transaction, be in default under any of
the terms of this Modification, and (z) could, immediately after giving effect
to the transaction, incur at least $1.00 of additional Total Funded Debt
pursuant to Section 6.2(b)(vii), and (B) no Default shall have occurred,
including, without limitation, a Default of the nature described in Section
7.1(a)(xv) hereof;
(ii) (A) sell, lease, transfer or otherwise dispose of any of its
Property (other than to the Guarantor and other than in a transaction
permitted by Section 6.2(e)(i) or (B) sell or otherwise dispose of any shares
of the stock (or any options or warrants to purchase stock or Securities
exchangeable for or convertible into stock) of a Restricted Subsidiary
(said stock, options, warrants and other Securities herein called "Subsidiary
Stock"), nor will any Restricted Subsidiary issue, sell or otherwise
dispose of any shares of its own Subsidiary Stock, if the effect would be
to reduce the direct or indirect proportionate interest of the Guarantor
and its other Restricted Subsidiaries in the outstanding Subsidiary Stock of
the Restricted Subsidiary whose shares are the subject of the
transaction; provided, however, that these restrictions do not apply to:
(x) the issue of directors' qualifying shares; or
(y) the transfer of Property (other than Subsidiary Stock) in
the ordinary course of business; or
(z) the transfer of Property (including up to, but not more
than, 15% of the outstanding Subsidiary Stock of any Subsidiary) during any
fiscal year to any Person if (A) such Property (valued at the greater of book
or fair market value at the time of disposition thereof) does not, together
with Property of the Company and all other Restricted
<PAGE>
Subsidiaries previously disposed of during such fiscal year (other than in
the ordinary course of business and other than to the Guarantor and other
than in a transaction permitted by Section 6.2(e)(i)), constitute 10% or
more of Consolidated Adjusted Tangible Assets determined as of the beginning
of such fiscal year; (B) the sum of the portions of Consolidated Adjusted
Net Income which were contributed during the immediately preceding four fiscal
quarters by (1) such Property, (2) each Restricted Subsidiary which has been
disposed of since the beginning of such four fiscal quarters (other than to
the Guarantor and other than in a transaction permitted by Section
6.2(e)(i))), and (3) other Property of the Guarantor and all Restricted
Subsidiaries disposed of since the beginning of such four fiscal quarters
(other than in the ordinary course of business and other than to the
Guarantor and other than in a transaction
permitted by Section 6.2(e)(i)), do not constitute more than 10% of
Consolidated Adjusted Net Income for any such four fiscal quarters; and (C) the
amount of Subsidiary Stock transferred, when added to Subsidiary Stock
previously transferred, does not exceed 15% of the outstanding Subsidiary Stock
of any Subsidiary. For purposes of determining Guarantor's compliance with this
subsection (z) in the event of a sale of up to 15% of the Subsidiary Stock of a
Subsidiary, the Property transferred shall be deemed to be the Adjusted
Tangible Assets of such Subsidiary multiplied by the percentage of Subsidiary
Stock transferred.
(f) Compliance with Law. The Guarantor and each Restricted Subsidiary
will not be in violation of any laws, ordinances, or governmental rules and
regulations to which it is subject and will not fail to obtain any licenses,
permits, franchises or other governmental authorizations necessary to the
ownership of its Properties or to the conduct of its business, which
violation or failure to obtain might materially adversely affect the business,
prospects, profits, properties or conditions (financial or otherwise) of the
Guarantor and its Subsidiaries as a whole.
(g) Taxability of Interest on Bonds. Neither the Guarantor nor the
Company will take, or omit to take, any action or consent to the Trustee
taking, or omitting to take, any action which would cause the interest on the
Bonds to become taxable to the recipients therefor for any reason.
(h) Guaranties. Neither the Guarantor nor any Restricted Subsidiary
will become liable for or permit any of its Property to become subject to
any Guaranty except: (a) Guaranties of Indebtedness for borrowed money under
which the maximum aggregate principal amount guaranteed can be mathematically
determined at the time of issuance, (b) other Guaranties under which the
maximum aggregate amount guaranteed can be mathematically determined at the
time of issuance, and (c) Guaranties of indebtedness under the Credit
Agreement. Each Guaranty permitted by this Section 6.2(h) shall be included in
either Current Debt or Long Term Debt in determining Guarantor's compliance
with the covenants in this Article Six.
(i) Transactions with Affiliates: Restricted Subsidiaries.
<PAGE>
(i) Neither the Guarantor nor any Restricted Subsidiary
will enter into any transaction (including the purchase, sale or exchange of
Property or the rendering of any service) with any Affiliate except upon fair
and reasonable terms which are at least as favorable to the Guarantor or the
Restricted Subsidiary as would be obtained in a comparable arm's-length
transaction with a non-Affiliate.
(ii) The Guarantor may from time to time cause any Subsidiary
to be designated as a Restricted Subsidiary (provided the Subsidiary satisfies
the requirements set forth in the definition of Restricted Subsidiary)
or any Restricted Subsidiary to be designated an Unrestricted Subsidiary;
provided, however, that neither Buffalo China, Inc. nor the Company may be
designated an Unrestricted Subsidiary; and provided, further, that immediately
following such action and after giving effect thereto, (A) no Event of Default
would exist under the terms of this Modification, (B) the Guarantor and its
Restricted Subsidiaries would be in compliance with all of the business
covenants set forth in this Article Six if tested on the date of such action,
and (C) any Restricted Subsidiary which is designated an Unrestricted
Subsidiary has no interest in any other Restricted Subsidiary or the Guarantor
and has no indebtedness for borrowed money from the Guarantor or any Restricted
Subsidiary, and provided, further, that once a Restricted Subsidiary has been
designated an Unrestricted Subsidiary, it shall not thereafter be redesignated
as a Restricted Subsidiary. Within ten (10) days following any designation
described above, the Guarantor will deliver to the Bank a notice of such
designation accompanied by a certificate signed by a principal financial
officer of the Guarantor certifying compliance with all requirements of this
Section 6.2(i) and setting forth all information required in order to establish
such compliance.
(j) ERISA Compliance.
(i) Neither the Guarantor nor any Restricted Subsidiary
will at any time fail to comply with the minimum funding standards of Title I,
Part 3 of ERISA or Section 412 of the Code.
(ii) All assumptions and methods used to determine the actuarial
valuation of vested employee benefits under Pension Plans and the present
value of assets of Pension Plans shall be reasonable in the good faith judgment
of the Guarantor and shall comply with all requirements of law.
(iii) Neither the Guarantor nor any Restricted Subsidiary
will at any time permit any Pension Plan maintained by it to:
(a) engage in any "prohibited transaction", as such term is
defined in Section 4975 of the Code;
(b) incur any "accumulated funding deficiency", as such term
is defined in Section 30 of ERISA, whether or not waived; or
<PAGE>
(c) be terminated in a manner which could result in the
imposition of a Lien on the Property of the Guarantor or any Restricted
Subsidiary pursuant to Section 4068 of ERISA.
ARTICLE SEVEN
Defaults
Section 7.1 Events of Default and Remedies.
(a) If any of the following events shall occur and be continuing
(each such event shall be an "Event of Default"):
(i) any representation or warranty made by the Company or the
Guarantor in the Agreement, this Modification or in any certificate,
agreement, instrument or statement contemplated by or made or delivered
pursuant to or in connection herewith shall prove to have been false or
misleading in any material respect either on the date hereof, on the date of
any drawing under the Letter of Credit or purchase of any bond pursuant to
Section 2.1(b) hereof, or on the date when made;
(ii) an event of default shall have occurred (or would occur but
for the passage of time or the lack of notice or both) and is continuing
under any of the Basic Documents (as defined respectively therein);
(iii) default in the payment of principal of the Promissory
Note five (5) days after the same shall become due and payable;
(iv) default in the payment of interest on the Promissory
Note five (5) days after the same shall become due and payable;
(v) five (5) days after default in the payment due under the
Installment Sale Agreement by the Company of the Company's payment obligation
under the Installment Sale Agreement;
(vi) default in the payment of any Letter of Credit Fee or other
amount required to be paid or reimbursed under this Modification or the
Promissory Note to the Bank five (5) days after the same shall become due and
payable;
(vii) default in the due observance of the covenants set forth in
Section 6.1 and the continuance of such default for thirty (30) days;
(viii) default in the due observance or performance of the
negative covenants contained in Section 6.2 hereof;
<PAGE>
(ix) the Guarantor or any Restricted Subsidiary shall (i) fail to
pay any aggregate indebtedness exceeding $1,000,000 (other than the Notes) when
due or interest thereon and such failure to pay shall continue for more than
any applicable period of grace with respect thereto or (ii) fail to observe or
perform any term, covenant, or agreement contained in any agreement or
instrument (other than this Modification Agreement or the Notes) by which it is
bound evidencing or securing or relating to any aggregate indebtedness
exceeding $1,000,000 and such failure to observe or perform continues for more
than any applicable period of grace with respect thereto, if the effect of such
failure to observe or perform is to permit (or, with the giving of notice or
lapse of time or both, would permit) the holder or holders thereof or of any
obligations issued thereunder or a trustee or trustees acting on behalf of such
holder or holders to cause acceleration of the maturity thereof or of any such
indebtedness;
(x) The Company or the Guarantor or any Subsidiary of either makes
an assignment for the benefit of creditors, enters into a composition of
creditors, files a petition under the Bankruptcy Code, is unable generally to
pay its debts as they come due, is insolvent or bankrupt or its debts are
greater than its property net of any property which was transferred, concealed
or removed with the intent to hinder, delay or defraud its creditors or there is
entered any order or decree granting relief in any involuntary case commenced
against the Company or the Guarantor or any Subsidiary of either under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or if the Company or the Guarantor or any Subsidiary of either
petitions or applies to any tribunal or governmental entity for any
receiver, trustee, liquidator, assignee, custodian or sequestrator (or other
similar official) of the Company or the Guarantor or any Subsidiary of either
or of any substantial part of the Company's or the Guarantor's (or any
Subsidiary of either) assets, or the Company or the Guarantor or any Subsidiary
of either has transferred, concealed or removed any of its property with intent
to hinder, delay or defraud its creditors generally or the Bank or Bondholders,
in particular, or a transfer of all or a substantial or material portion of its
property, or commences any readjustment of debt, dissolution, liquidation or
other similar procedure under the law or statutes of any jurisdiction, whether
now or hereafter in effect, or if there is commenced against the Company or the
Guarantor or any Subsidiary of either any such involuntary case or proceeding
in a court of law or the Company or the Guarantor or any Subsidiary of either
by any act indicates its consent to, approval of, or acquiescence in any such
case or proceeding in a court of law, or to an order for relief in an
involuntary case commenced against the Company or the Guarantor or any
Subsidiary under any such law, or to the appointment of any receiver, trustee,
liquidator, assignee, custodian or sequestrator (or other similar official) for
the Company or the Guarantor or any Subsidiary or a substantial part of the
Company's or the Guarantor's assets (or any subsidiary of either), or if the
Company or the Guarantor or any Subsidiary takes any action for the purposes of
effecting the foregoing; or if the Issuer becomes a debtor under the Bankruptcy
Code or otherwise adjusts its debts under judicial or administrative
administration or otherwise restructures its debts generally or is insolvent,
bankrupt, seeks liquidation or dissolution or unable to meet its debts as they
become due;
<PAGE>
(xi) any material provision of this Modification or of any of the
Basic Documents shall cease to be valid and binding, or the Company, the
Guarantor or any governmental authority shall contest any such provision, or
the Company, the Guarantor, or any agent, custodian or trustee on behalf of the
Company or the Guarantor, shall deny, in writing, signed by an executive
officer of the Company or the Guarantor (as defined in the Articles of
Incorporation or By-Laws of the Company or the Guarantor as existing on the
date of execution of this Modification), that it has any or further liability
under this Modification or any of the Basic Documents to which either is a
party;
(xii) judgment for the payment of money in excess of an aggregate
of $500,000 shall be rendered against the Company or the Guarantor or any
Subsidiary of either and the same shall remain undischarged or unbonded for a
period of sixty (60) consecutive days after notice of appeal, if any, has been
filed or sixty (60) days after expiration of the time for filing such notice
has expired;
(xiii) the Company or the Guarantor, in the reasonable opinion of
the Bank, will experience a Material Adverse Effect on the operations,
properties or conditions (financial or otherwise) of the Company or the
Guarantor or any Subsidiary of either as a result of:
(A) a Reportable Event, Plan termination, complete or
partial withdrawal, cessation of facility operations or any other event that
could result in liability under Title IV of ERISA other than an event based on
the participation in or withdrawal from a "multiemployer plan" as defined in
Section 3(37)A or Section 4001(A)(3) of ERISA;
(B) a failure to comply with the written terms of any Plan
or related document (including, but not limited to, a collective bargaining
agreement) or a failure to discharge any duty or obligation thereunder;
(C) a loss of any prior qualification of any Plan or related
trust under Sections 401(a), 403(a), 408(k) or 501(a) of the Code;
(D) a threatened or pending suit, action, dispute, claim,
arbitration or legal, administrative or other proceeding, audit or
investigation with respect to any Plan;
(E) the total present value of all Accrued Benefits under all
of the Plans which is an Employee Pension Benefit Plan exceeds by $10,000,000
or more the current value of the assets of all such Plans as of the most recent
valuation date with respect to such Plan (based on the interest rate,
mortality and other actuarial assumptions then used for the purpose of
determining the contributions required to be made to each such Plan), excluding
any plan for which the current value of Plan assets equals or exceeds the
present value of all Accrued Benefits; or
(F) any combination of the above;
<PAGE>
and such default has not been cured or waived within sixty (60) days after the
occurrence thereof; for purposes of this subsection (xiii) and Section 5.8, a
"Material Adverse Effect" shall be deemed to exist if there is any material
expense, liability or loss to the Company, the Guarantor or any Subsidiary of
either;
(xiv) the Guarantor shall default on its guaranty of payment
contained in Section 3.1 hereof;
(xv) any Person or two or more Persons acting in concert
(other than the Guarantor, any Subsidiary of the Guarantor, any employee
benefit plan maintained by the Guarantor or any of its Subsidiaries, or any
trustee or fiduciary with respect to such plan acting in such capacity) (A)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly of securities of the Guarantor (or other
securities convertible into such securities) representing twenty percent (20%)
or more of the combined voting power of all securities of the Guarantor
entitled to vote in the election of directors, other than securities having
such power only by reason of the happening of a contingency; or (ii) shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement which upon consummation will result in its or their acquisition of,
control over securities of the Guarantor (or other securities convertible into
such securities) representing twenty percent (20%) or more of the combined
voting power of all securities of the Guarantor entitled to vote in the
election of directors, other than securities having such power only by reason
of the happening of a contingency;
then:
(b) In the Event of Default, at any time thereafter, during the
continuance of any such Event of Default, the Bank may:
(i) give notice to: (a) the Trustee as provided for in Section
9.01(f) of the Indenture of the Event of Default; and (b) to the Tender Agent
or the Trustee as provided in, and subject to compliance with the terms and
time limits imposed by Section 2.6(a) of this Modification, if applicable;
(ii) demand immediate payment of any Unreimbursed Amounts and
any other amounts under this Modification or any amounts owing as evidenced by
the Promissory Note;
(iii) take any actions permitted with respect to the collateral,
under the Security Agreement;
(iv) terminate its obligation to purchase Bonds pursuant to
Section 2.1(b) of this Modification; and/or
<PAGE>
(v) pursue any other action available at law or in equity.
ARTICLE EIGHT
Miscellaneous
Section 8.1 No Deductions, Increased Costs.
(a) All sums payable by the Company or the Guarantor hereunder or
under the Promissory Note or the Bonds, whether of principal, interest, fees,
expenses or otherwise, shall be paid in full, without any deduction or
withholding whatsoever. In the event that the Company or the Guarantor is
compelled by law to make any such deduction or withholding, then the Company or
the Guarantor shall pay the Bank such additional amount as will result in the
receipt by the Bank of a net sum equal to the sum it would have received had no
such deduction or withholding been required to be made. In the event such law,
regulation or condition shall be revoked, rescinded, declared invalid or
inapplicable or otherwise rescinded, the Bank shall forthwith refund to the
Company or the Guarantor any and all amounts repaid to it upon or after such
rescission which are attributable to payments made by the Company or the
Guarantor to the Bank pursuant to this Section.
(b) If any change in applicable law, regulation, condition, directive
or interpretation thereof (including any request, guideline or policy of a
governmental agency or official, whether or not having the force of law, which
the Bank, in the reasonable exercise of its judgment complies with, and
including, without limitation, Regulation D promulgated by the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect) by any authority charged with the administration or interpretation
thereof occurs which:
(i) subjects the Bank to any tax not imposed on the date of this
Modification, with respect to: (a) any amount paid or to be paid by the Bank,
as the issuer of the Letter of Credit (other than any tax measured by or based
upon the overall net income of the Bank imposed by the jurisdiction in which the
Bank has its principal office), or (b) the Letter of Credit;
(ii) changes the basis of taxation of payments to the Bank of
principal of or interest on the amount described in clause (i)(a) above, or,
with respect to the Letter of Credit, other amounts payable hereunder or
under the Promissory Note or any Purchased Bond then held by it; or
(iii) imposes, modifies or deems applicable any reserve or
deposit requirements against any assets held by, deposits with or for the
account of, or loans or commitments by, an office of the Bank in connection
with payments by the Bank under this
<PAGE>
Modification or under the Promissory Note, any such Purchased Bond or the
Letter of Credit: or
(iv) imposes upon the Bank any other condition with respect to
such amount paid or payable to or by the Bank or with respect to this
Modification, the Promissory Note, any such Purchased Bond or the Letter of
Credit;
and the result of any of the foregoing is to increase the cost to the Bank of
making any payment or maintaining the Commitment, or to reduce the amount of
any payment (whether of principal, interest or otherwise) receivable by the
Bank under this Modification or to require the Bank to make any payment on or
calculated by reference to the gross amount of any sum received by it under
this Modification, in each case by an amount which the Bank in its sole
judgment deems material, then and, in any such case in which a payment to the
Bank is based upon the Prime Rate, to the extent that any such increased cost,
reduction or payment is not factored into the Prime Rate:
(1) the Bank shall promptly notify the Company in writing of
the happening of such event;
(2) the Bank shall promptly deliver to the Company a
certificate stating the change which has occurred or the reserve requirements
or other conditions which have been imposed on the Bank or the request,
direction or requirement with which it has complied, together with the date
thereof, the amount of such increased cost, reduction or payment and the way in
which such amount has been calculated; and
(3) the Company shall pay to the Bank, within thirty (30)
days after delivery of the certificate referred to in clause (2) above, such
amount or amounts as will compensate the Bank for such additional cost,
reduction or payment. The certificate of the Bank, signed by a vice president
or more senior officer of the Bank, as to the additional amounts payable
pursuant to this paragraph delivered to the Company shall be conclusive
evidence, absent error of the amount thereof.
Section 8.2 Right of Setoff; Other Collateral.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Bank is hereby authorized at any time and from time to time,
without notice to the Company (any such notice being expressly waived by the
Company) and to the fullest extent permitted by law, to setoff and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other Indebtedness at any time owing to the Bank to or for the
credit or the account of the Company against any and all of the obligations of
the Company now or hereafter existing under this Modification, irrespective of
whether or not the Bank shall have made any demand under this Modification and
although such obligations may be unmatured.
<PAGE>
(b) Without modifying the payment provisions of Section 2.2 of this
Modification, the Promissory Note or any Purchased Bonds, the Bank hereby
agrees to waive its rights, at law or otherwise, at any time after the
commencement of and during the pendency of a case by or against the Company
under the Bankruptcy Code, as now constituted or hereafter amended, to set off
and apply any and all deposit (general or special, time or demand, provisional
or final) at any time held and any other Indebtedness at any time owing by the
Bank to or for the account of the Company against any and all of the
obligations of the Company under Section 2.2 of this Modification, the
Promissory Note or any Purchased Bonds to reimburse the Bank for amounts drawn
and paid under the Letter of Credit; provided, that such waiver shall terminate
and be of no force and effect as and when and to the extent that the exercise
of such rights would not result in the Bank's being released, prevented or
restrained from or delayed in fulfilling its obligation under the Letter of
Credit, and provided, further, that such waiver shall terminate and be of no
force and effect if the absence of such waiver would not result in the lowering
or suspension by Moody's Investors Service of its rating of the Bonds.
(c) The Bank hereby agrees that it will not at any time accept any
collateral as security for the payment of the reimbursement obligations
of the Company set forth in Section 2.2 of this Modification, the Promissory
Note or any Purchased Bonds unless provision is made prior to or
simultaneously with the taking of such collateral security by the Bank for an
equal an rateable interest in such collateral security to be granted to the
Trustee for the benefit of the owners from time to time of the Bonds; provided,
that such agreement shall terminate and be of no force and effect as and when
and to the extent that the acceptance of such collateral would not result in
the Bank's being released, prevented or restrained from or delayed in
fulfilling its obligation under the Letter of Credit, and provided, further,
that such agreement shall terminate and be of no force and effect if the
absence of such agreement would not result in the lowering or suspension by
Moody's Investors Service of its rating of the Bonds.
Section 8.3 Indemnity, Costs, Expenses and Taxes.
(a) The Company agrees to indemnify and hold harmless the Bank from
and against, and to pay on demand, any and all claims, damages, losses,
liabilities, reasonable costs and expenses whatsoever which the Bank may
incur or suffer by reason of or in connection with the execution and
delivery of this Modification or payment under the Letter of Credit, and any
other documents which may be delivered in connection with this Modification or
the Letter of Credit including, without limitation, the fees and expenses of
counsel for the Bank, with respect thereto, and with respect to advising the
Bank prior to the date hereof as to their rights and responsibilities under
this Modification and the Letter of Credit and all fees and expenses, if any,
in connection with the enforcement or defense of the rights of the Bank in
connection with this Modification or the collection of any monies due hereunder
or under the Promissory Note, any Purchased Bond, the Letter of Credit and such
other documents which may be delivered in connection with the Modification and
the Letter of Credit; except, only if, and to the extent that any such claim,
damage, loss, liability, cost or expense shall be caused by the willful
misconduct or gross negligence of the Bank in
<PAGE>
performing or failing to perform its obligations under this Modification or in
making payment against a draft presented under the Letter of Credit which
does not comply with the terms thereof (it being understood that (x) in
making such payment the Bank's exclusive reliance on the documents
presented to the Bank in accordance with the terms of the Letter of Credit as
to any and all matters set forth therein, whether or not any statement or any
document presented pursuant to the Letter of Credit proves to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
proves to be untrue or inaccurate in any respect whatsoever, and (y) any
such non-compliance in an immaterial respect shall not be deemed willful
misconduct or gross negligence of the Bank). The Company, upon demand by the
Bank at any time, shall reimburse the Bank for any legal or other expenses
incurred in connection with investigating or defending against any such claim,
loss, liability, cost or expense, except if the same is due to the Bank's
gross negligence or willful misconduct. Promptly after receipt by the Bank
of notice of the commencement, or threatened commencement, of any action
subject to the indemnities contained in this Section, the Bank shall promptly
notify the Company thereof; provided, however, that the failure of the Bank
so to notify the Company will not affect the obligation of the Company to
indemnify the Bank with respect to such action or any other action pursuant to
this Section. Notwithstanding Section 8.10, the obligations of the Company
under this Section shall survive payment of any amounts due under the
Promissory Note, the Purchased Bonds or this Modification and the expiration of
the Letter of Credit.
(b) In the event that any amounts paid to the Bank by the Company
pursuant to paragraph (a) of this Section are subsequently required to be
refunded to the Company by the Bank as the result of a final judgment or non-
appealable order, or an agreement between the parties, the Bank shall also
refund interest on such refunded amount (to the extent such refunded amount
was, during the period for which interest is to be so calculated pursuant to
this paragraph (b), within the Banks' control) in an amount equal to the amount
of interest which such refunded amount would have earned from the date such
amount was originally paid by the Company to the Bank, to, but not including
the date of such refund, at the average certificate of deposit rate of the Bank
having a term equal to the period during which such refunded amount was held by
the Bank.
Section 8.3A Capital Adequacy. If after the date of this
Modification, the Bank shall have determined that the applicability of any law,
rule, regulation or guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations and Supervisory
Practices entitled "International Convergence of Capital Measurement and
Capital Standards", or adoption after the date hereof, of any other applicable
law, rule, regulation or guideline regarding capital adequacy, or any change in
any of the foregoing, or in the interpretation or administration of any of the
foregoing by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by the
Bank (or any lending office of the Bank) or the Bank's holding company with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on the Bank's capital or
on the capital of the Bank's holding company, if any, as a consequence of its
obligations under the instruments
<PAGE>
executed and delivered to evidence and/or to secure the obligations of the
Company and Guarantor to the Bank to a level below that which the Bank or the
Bank's holding company could have achieved but for such adoption, change or
compliance (taking into consideration the Bank's policies and the policies of
the Bank's holding company with respect to capital adequacy) by an amount deemed
by the Bank to be material, then, within fifteen (15) days after demand
therefor by the Bank, the Company shall pay to the Bank such additional amount
or amounts as will compensate the Bank or the Bank's holding company for such
reduction.
Section 8.4 Obligations Absolute. The obligations of the Company under
this Modification shall be absolute, unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Modification under all
circumstances whatsoever, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of the Letter of Credit, the
Bonds, the Promissory Note, the Basic Documents or any other
agreement or instrument relating thereto (collectively, the "Related
Documents"); provided, however, that this Section 8.4 shall not prohibit the
Company from asserting as a defense to its obligation to pay Letter of Credit
Fees the lack of validity or enforceability of the Letter of Credit if the Bank
refuses to pay any amount drawn under the Letter of Credit in accordance with
the terms thereof;
(b) any amendment or waiver of or any consent to departure from all or
any of the Related Documents;
(c) the existence of any claim, set-off, defense or other rights which
the Company may have at any time against the Trustee, any beneficiary or
any such transferee of the Letter of Credit (or any persons or entities for
which the Trustee, the Tender Agent, any such beneficiary or any such
transferee may be acting), the Bank (other than the defense of payment to the
Bank in accordance with the terms of this Modification), or any other
person or entity, whether in connection with this Modification, the Related
Documents or any unrelated transaction;
(d) any statement or any other document presented under the Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect whatsoever;
and
(e) payment by the Bank under the Letter of Credit against presentation
of a sight draft or certificate which does not comply with the terms of the
Letter of Credit, provided that such payment shall not have constituted
gross negligence or willful misconduct of the Bank.
For purposes of this Section 8.4, the Bank's payment against any draft or
acceptance of any document failing to comply with the terms of the Letter of
Credit in any immaterial respect shall not be deemed willful misconduct or
gross negligence.
<PAGE>
Section 8.5 Liability of the Bank. The Company assumes all risks of the
acts or omissions of the Trustee and any transferee of the Letter of Credit with
respect to its use of the Letter of Credit. Neither the Bank nor any of its
officers, directors or employees shall be liable or responsible for: (a) the use
which may be made of the Letter of Credit or for any acts or omissions of the
Trustee and any transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement(s) thereon, even
if such documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Bank against
presentation of documents which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under the Letter of Credit, except only that
the Company shall have a claim against the Bank, and the Bank shall be liable
to the Company, to the extent, but only to the extent, of any direct or
consequential damages suffered by the Company which the Company proves were
caused by (i) the Bank's willful misconduct or gross negligence in determining
whether documents presented under the Letter of Credit (it being understood
that any such noncompliance in any immaterial respect shall not be deemed
willful misconduct or gross negligence of the Bank) or (ii) the Bank's willful
failure or gross negligence to pay under the Letter of Credit after the
presentation to it by the Trustee (or a successor Trustee to whom the Letter of
Credit has been transferred in accordance with its terms) of a sight draft and
certificate strictly complying with the terms and conditions of the Letter of
Credit. In furtherance and not in limitation of the foregoing, the Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; provided, however, that if the Bank shall receive
timely written notification (at both addresses specified in Section 8.16, under
the notice address for the Bank) from both the Trustee and the Company that
sufficiently identified (in the opinion of the Bank) documents to be presented
to the Bank are not to be honored, the Bank agrees that it will not honor such
documents. The Bank is not obligated to honor such notification if timely
written notice is not received by the Letter of Credit Department of the Bank.
Section 8.6 Participants. The Bank shall have the right to grant
participations (to be evidenced by one or more participation agreements or
certificates of participation) in this Modification, in the Promissory Note/ in
the Purchased Bonds and in its rights and obligations under the Letter of
Credit at any time and from time to time to one or more other financial
institutions (each a "Participant"). The Guarantor and Company shall cooperate
in all respects with the Bank in connection with the sale of such
participations, and shall, in connection therewith, execute and deliver such
estoppels, certificates, instruments and documents as may be requested by the
Bank. The Guarantor and Company grant to the Bank the right to distribute, on a
confidential basis financial and other information concerning the Guarantor,
its Subsidiaries and the Project to any party who has purchased such a
participation or who has expressed a serious interest in doing so.
Section 8.7 Calculations. All fees shall be computed on the basis of a 360-
day year (composed of 30-day months) for the actual number of days
elapsed, which shall include the first day on which fees are payable but shall
exclude the day on which payment is made.
<PAGE>
Section 8.8 Extension of Maturity. If any payment to the Bank would become
due and payable on other than a Business Day, such payment shall instead become
due on the next succeeding Business Day and interest shall be payable thereon
at the rate herein specified during such extension.
Section 8.9 Drawing and Purchase a Certification. Each drawing by the
Trustee under the Letter of Credit and purchase by the Bank of a Bond under
Section 2.1(b) shall be deemed (i) a certification by the Company and the
Guarantor that the representations and warranties of the Company and the
Guarantor contained in Article Five of this Modification shall be correct in
all material respects as of the date of the drawing, (ii) a certification by
the Company and the Guarantor that the conditions specified in Section 4.1 of
this Modification remain fulfilled, and (iii) a certification by the Company
and the Guarantor that it is in all other respects in material compliance with
the provisions of this Modification.
Section 8.10 Survival of This Agreement. All covenants, agreements,
representations and warranties made in this Modification shall survive the
issuance by the Bank of the Letter of Credit and shall continue in full force
and effect until the Expiration Date shall have occurred, or the Stated Amount
of the Letter of Credit shall have been permanently reduced to zero prior to
the Expiration Date, and no sums drawn or due thereunder or hereunder or under
the Promissory Note or under any Purchased Bond shall be outstanding or unpaid,
regardless of any investigation made by any Person and so long as any amount
payable hereunder remain unpaid. Whenever in this Modification the Bank is
referred to, such reference shall be deemed to include the successors and
assigns of the Bank and all covenants, promises and agreements by or on behalf
of the Company and the Guarantor which are contained in this Modification shall
inure to the benefit of the successors and assigns of the Bank. The rights and
duties of the Company or the Guarantor, however, may not be assigned or
transferred, except as specifically provided in this Modification or with the
prior written consent of the Bank, and all obligations of the Company and the
Guarantor hereunder shall continue in full force and effect notwithstanding any
assignment by the Company or the Guarantor of any of its rights or obligations
under any of the Basic Documents.
Section 8.11 Modification of This Agreement. No amendment,
modification or waiver of any provision of this or any other Basic Document or
the Promissory Note or the Bonds shall be effective unless the same shall be in
writing and signed by the Bank and no consent to any departure by the Company
or the Guarantor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Bank. Any such waiver or consent shall e
effective only in the specific instance and for the purpose for which given. No
notice to or demand on the Company or the Guarantor in any case shall entitle
the Company or the Guarantor to any other or further notice or demand in the
same, similar or other circumstances.
Section 8.12 Waiver of Rights by the Bank. No course of dealing or
failure or delay on the part of the Bank in exercising any right, power or
privilege hereunder or under
<PAGE>
the Letter of Credit, this Modification, the Promissory Note, the Bonds or
any Basic Document shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise or the
exercise of any other right, power or privilege. The rights of the Bank under
the Letter of Credit and the rights of the Bank under this Modification, the
Promissory Note, the Bonds and the Basic Documents are cumulative and not
exclusive of any rights or remedies which the Bank would otherwise have.
Section 8.13 Source of Funds. All payments made by the Bank pursuant to
Section 2.1(b) of this Modification or pursuant to the Letter of Credit
shall be made from its own funds or from funds obtained from a Participant as
provided in Section 8.6 of this Modification, but in no event shall such
payment be made with funds obtained from the Company, the Guarantor or the
Issuer.
Section 8.14 Severability. In case any one or more of the provisions
contained in this Modification should be invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
Section 8.15 Governing Law. This Modification shall be construed in
accordance with and governed by the law of the State of New York.
Section 8.16 Notices.
(a) All notices hereunder shall be given by United States certified or
registered mail, by telegram or by other telecommunication device capable of
creating written record of such notice and its receipt, unless otherwise
specifically provided herein or in the Letter of Credit. Notices hereunder
shall be effective when received and shall be addressed:
If to the Bank, to: Chemical Bank
1975 Lake Street
Elmira, New York 14901
Attention: Account Officer for Camden Wire Co., Inc.
and Oneida Ltd.
With a copy to: Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
Attention: Victor Marinaccio, Vice President
If to the Company, to: Camden Wire Co., Inc.
12 Masonic Avenue
<PAGE>
Camden, New York 13316
Attention: Treasurer
If to the Guarantor, to: Oneida Ltd.
163-181 Kenwood Avenue
Oneida, New York 13421
Attention: Treasurer
If to the Agent, to: Chemical Securities, Inc.
270 Park Avenue, 6th Floor
New York, New York 10017
Attention: Alex Polaczyk
If to the Trustee, to: Simmons First National Bank of Pine Bluff
501 Main Street
Pine Bluff, Arkansas 71661
Attention: Trust Department
If to the Tender Agent,
to: Chemical Bank
450 W. 33rd Street, 15th Floor
New York, New York 10001
Attention: Art Cabral, AVP
(b) The Bank agrees to give immediate notice, promptly confirmed in
writing, to the Tender Agent and the Agent of any notice of an Event of
Default given to the Trustee by the Bank as described in Section
7.1(b)(i)(a) of this Modification.
Section 8.17 Headings. The table of contents and captions in this
Modification are for convenience of reference only and shall not define or
limit the provisions hereof.
Section 8.18 Counterparts. This Modification may be executed in two or
more counterparts, each of which shall constitute an original but both or all
of which, when taken together, shall constitute but one instrument, and shall
become effective when copies hereof which, when taken together, bear the
signature of each of the parties hereto shall be delivered to the Company, the
Guarantor and the Bank.
Section 8.19 Reference to Other Documents. Any reference in any of the
Basic Documents or the Related Documents to the Agreement shall be deemed to
refer to the Agreement as restated and modified in this Modification.
Please signify your agreement and acceptance of the foregoing by
executing this Modification in the space provided below.
<PAGE>
Very truly yours,
CHEMICAL BANK
By: /s/ Christine M. McLeod
Vice President
Agreed to and Accepted,
August 1, 1995
CAMDEN WIRE CO., INC.
By: /s/ George F. Miller, III
Vice President and Treasurer
ONEIDA LTD.
By: /s/ Barry G. Grabow
Treasurer
<PAGE>
FORM OF LETTER OF CREDIT
CHEMICAL BANK
IRREVOCABLE STANDBY LETTER OF CREDIT
August 1, 1985
Simmons First National Bank of Pine Bluff, as trustee
(the "Trustee") under the Indenture of Trust (the "Indenture")
dated as of August 1, 1985, by the City of Pine Bluff,
Arkansas (the "Issuer") to the Trustee.
Attention: Trust Department
Dear Sirs:
We hereby establish in your favor our irrevocable standby Letter of Credit
No. C281929 for the account of Camden Wire Co., Inc. (the "Company"),
whereby we hereby irrevocably authorize you to draw on us from time to time
from and after the date hereof to and including our close of business on August
1, 1986 (the "Expiration Date") a maximum aggregate amount not exceeding
U.S. $9,560,958.90 (the "Stated Amount") of which the sum of $9,000,000
may be drawn on by you to pay principal or the principal component of the
purchase price (the "Principal Stated Amount") of the Issuer's $9,000,000
aggregate principal amount of a Variable Rate Demand Industrial Development
Refunding and Constriction Revenue Bonds (Camden Wire Project), Series 1985
dated August 1, 1985 (the "Bonds"), in accordance with the terms hereof and
the sum of $560,958.90 may be drawn on by you to pay up to 182 days' interest
(based on a year of 365 days) accrued on or the interest component of the
purchase price of the Bonds (the "Interest Stated Amount") on or prior to
the Expiration Date; available against the following documents (the "Payment
Documents") presented to Chemical Bank (the "Bank") at our Letter of Credit
Department at 55 Water Street, South Building, 17th Floor, New York, New York
10041 (or such other place as we may from time to time specify) or by
telecopier (212-344-7731 or 212-344-7741), attention.: Victor Marinaccio, Vice
President (or such other person as we may from time to time specify):
(i) a certificate (i) in the form attached as Exhibit A hereto to pay
principal of the Bonds which is due and payable (other than the purchase price
in respect of principal) (an "A Drawing"), (ii) in the form attached as Exhibit
B hereto to pay up to 182 days' interest (based
<PAGE>
on a year of 365 days) on, or the interest component of the purchase price
of, the Bonds (a "B Drawing") which is either (a) due and payable on the
Bonds or (b) accrued on Bonds being purchased with the proceeds of any draft
drawn hereunder following presentment of a certificate in the form of Exhibit C
hereto, or (iii) in the form attached as Exhibit C hereto to pay the purchase
price in respect of principal of the Bonds being purchased (a "C Drawing"),
each signed by one who states therein that he is your duly authorized officer
and dated the date such certificate is presented hereunder; and
(ii) a sight draft in the form attached as Exhibit E hereto (a) drawn
by and payable to you on us, (b) bearing the number of this Letter of Credit,
(c) if presented prior to 11:00 A.M., New York City time, and on a day that is
not a Saturday, Sunday or legal holiday in the Sate of New York or a day on
which Chemical Bank is authorized or required to close (a "Business Day"), of
even date with such certificate or, if presented after 11:00 A.M., New York
City time, on a Business Day, dated the following Business Day and (d) having
inserted therein where indicated a dollar amount not in excess of the amount
equal to the balance available hereunder (i.e., the difference between (I) the
maximum aggregate amount available under this Letter of Credit as provided
above with respect to principal, purchase price, or interest, as the case may
be, less (II) the aggregate amount of all previous drawings made and paid under
this Letter of Credit with respect to principal, purchase price or interest, as
the case may be, other than drawings with respect to which the Bank's
obligation to honor demands for payment under this Letter of Credit has been
reinstated pursuant to the express provisions hereof).
We agree to honor and pay the amount of any draft if drawn and presented
with the documents required by and otherwise in compliance with all of the
terms of this Letter of Credit. If any draft is presented prior to 11:00 A.M.,
New York City time, on a Business Day, payment shall be made to you of the
amount specified, in immediately available funds, before 4:00 P.M., New York
City time, on the same Business Day and if any draft is presented after 11:00
A M., New York City time, on a Business Day, payment shall be made to you of
the amount specified, in immediately available funds, before 4:00 P.M., New York
City time, on the following Business Day.
After payment by us of an A Drawing, the Principal Stated Amount shall be
reduced permanently and automatically by an amount equal to the amount so paid
and the Interest Stated Amount shall be reduced permanently and
automatically, with such reduction of the Interest Stated Amount in an amount
equal to 182 days' interest (calculated at the rate of twelve and one-half of
one percent (12 1/2 per annum, based on a year of 365 days) on the amount of
such reduction of the Principal Stated Amount, such reductions of the Principal
Stated Amount and the Interest Stated Amount to be effective at the time of
such
payment by us.
After payment by us of a B Drawing (other than a B Drawing to pay accrued
interest on Bonds purchased with the proceeds of a C Drawing), the Interest
Stated Amount shall be reduced automatically, subject to reinstatement as
provided in the following sentence, by an amount equal to the amount so
paid, such reduction to be effective at the time of such
<PAGE>
payment by us. Notwithstanding the foregoing sentence, the Interest Stated
Amount shall be automatically reinstated in the full amount of such drawing
at the close of business on the tenth (10th) calendar day following payment
of such drawing, unless prior to such time on the tenth (10th) calendar
day, you, in your capacity as Trustee, shall have received either written
notice, or telephonic notice, promptly confirmed in writing, from us of the
occurrence of an Event of Default under the Letter of Credit, Bond Purchase and
Guaranty Agreement dated as of August 1, 1985, among the Company, Oneida, Ltd.
(the "Guarantor") and us (the "Letter of Credit Agreement").
After payment by us of a C Drawing, the Principal Stated Amount shall be
reduced automatically subject to reinstatement as provided in this paragraph by
an amount equal to the amount so paid in respect of such C Drawing. The
Interest Stated Amount shall be reduced automatically, at the same time as such
reduction of the Principal Stated Amount referred to in the immediately
preceding sentence, after payment by us of a B Drawing accompanying a C
Drawing, in an amount equal to the number of days of accrued interest paid by
us in connection with such B Drawing, such reductions to be effective at the
time of such payments by us. Amounts reduced from time to time in connection
with a C Drawing, or in connection with a B Drawing to pay accrued interest on
Bonds purchased with the proceeds of a C Drawing, will be reinstated by the
Bank upon the receipt by the Bank of a certificate, signed by one who states
therein that he is your duly authorized officer and dated the date such
certificate is presented, in the form of Exhibit G hereto, unless, prior to
receipt by us of such notice you shall have received from us either written
notice, or telephonic notice, promptly confirmed in writing, of the occurrence
of an Event of Default under the Letter of Credit Agreement.
After purchase by us of Bonds pursuant to Section 2.1(b) of the Letter
of Credit Agreement, the Principal Stated Amount may be reduced upon
presentation to us of a certificate in the form of Exhibit F, subject to
reinstatement as provided in the following sentence, by an amount equal to the
principal amount of Bonds so purchased, and the Interest Stated Amount shall be
reduced automatically, at the same time as such reduction in the Principal
Stated Amount referred to in this sentence, subject also to reinstatement as
provided in the following sentence, in an amount equal to the number of days of
accrued interest paid by us in connection with such purchase of Bonds on the
principal amount of Bonds so purchased, such reductions to be effective at the
time of such purchase. Amounts reduced from time to time in connection with a
purchase of Bonds pursuant to Section 2.1(b) of the Letter of Credit Agreement
resulting from your presentation to us of a certificate in the form of Exhibit
F hereto as described in the immediately preceding sentence will be reinstated
by us upon the receipt by us of a certificate, signed by one who states therein
that he is your duly authorized officer and dated the date such certificate is
presented, in the form of Exhibit G hereto, unless, prior to receipt by us of
such notice, you shall have received from us either written notice, or
telephonic notice, promptly confirmed in writing, of the occurrence of an Event
of Default under the Letter of Credit Agreement.
Upon receipt by us of a certificate from you in the form of Exhibit F
hereto, we will automatically reduce the amounts available to be drawn
hereunder in respect of principal or
<PAGE>
purchase price of and interest on the Bonds by the respective amounts
specified in such certificate. Such reductions shall be effective as of the
date set forth in such certificate.
Upon any reduction of the amounts available to be drawn under this
Letter, of Credit, as provided herein, we may deliver to you: (a) an
amendment to this Letter of Credit substantially in the form of Exhibit H
hereto to reflect any such reduction, or (b) a substitute letter of credit in
exchange for this Letter of Credit, which shall be an irrevocable letter of
credit, dated its date of issuance, in a stated amount equal to the amount to
which the Stated Amount shall have been so reduced, but otherwise having terms
identical to this Letter of Credit, except for such changes in dollar amount
corresponding to such permanent reduction.
Upon the earlier of (i) the making by you of the final drawing available
to be made hereunder which is not subject to reinstatement, (ii) receipt of
a written notice in the form of Exhibit I hereto (which shall be conclusive
evidence of the matters set forth therein) signed by your duly authorized
officer or a duly authorized officer of your successor as Trustee, as
appropriate, and a duly authorized officer of the Issuer that no Bonds
remain outstanding and unpaid or (iii) the Expiration Date, this Letter of
Credit shall automatically terminate and be delivered to us for cancellation.
This Letter of Credit is transferable to your successor as Trustee,
but not otherwise. Any such transfer and assignment (including any successive
transfer and assignment) shall be effective upon receipt by us of a signed copy
of an instrument effecting each such transfer and assignment signed by the
transferor and by the transferee in the form of Exhibit D hereto (which shall
be conclusive evidence of such transfer and assignment) and, in such case,
the transferee instead of the transferor shall, without the necessity of
further action, be entitled to all the benefits of and rights under this Letter
of Credit in the transferor's place; provided that, in such case, the draft and
the certificate of the transferee in the form of Exhibit E and Exhibits A, B,
C, F, G or I hereto, respectively, shall be signed by one who states therein
that he is a duly authorized officer of the transferee.
This Letter of Credit is intended to provide only for the payment of
the principal or purchase price of and interest on the Bonds, other than Bonds
owned by the Bank. Accordingly, in actions taken by you as beneficiary
of this Letter of Credit you shall not be acting as an agent of the Issuer, the
Company or the Guarantor, but shall be acting on behalf of the holders of
the Bonds, other than the Bank. Notwithstanding anything to the contrary
herein, under no circumstances shall you draw upon this Letter of Credit for
the purpose of paying the principal or purchase price or interest on any Bond
owned by the Bank.
Communications with respect to this Letter of Credit shall be addressed
to us at Chemical Bank, Letter of Credit Department, 55 Water Street, South
Building, 17th Floor, New York, New York 10041, specifically referring to the
number of this Letter of Credit.
To the extent not inconsistent with the express terms hereof, this Letter
of Credit shall be governed by, and construed in accordance with, the terms of
the Uniform Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce
<PAGE>
Publication No. 400 (the "Uniform Customs"). As to matters not governed by the
Uniform Customs, this Letter of Credit shall be governed by and construed in
accordance with the law of the State of New York.
This Letter of Credit sets forth in full the terms of our
undertaking, and such undertaking shall not in any way be modified or amended
by reference to any other document whatsoever.
Very truly yours,
CHEMICAL BANK
By: ____________________
Title:
<PAGE>
Exhibit A to
LETTER OF CREDIT
No._______
PRINCIPAL CERTIFICATE
The undersigned-individual, a duly authorized officer of
_____________________, as trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (i) that certain Letter of
Credit No. ______ dated August 1, 1985 (the "Letter of Credit"), issued by
Chemical Bank in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make a drawing under the Letter
of Credit pursuant to the provisions of the Indenture.
3. The amount of the draft presented with this Certificate is equal
to $___________, the amount of principal of the Bonds (other than Bonds owned
by Chemical Bank) which is due and payable whether upon maturity,
redemption or otherwise but not from the purchase of such Bonds with the
proceeds of any draft drawn under the Letter of Credit upon presentation of a
certificate in the form of Exhibit C to the Letter of Credit.
4. The amount of the draft presented with this certificate does
not exceed the amount equal to (a) the maximum aggregate Principal Stated Amount
originally drawable under the Letter of Credit as provided therein, less (b)
the aggregate amount of all previous drawings made under the Letter of
Credit with respect to principal or purchase price in respect of principal of
the Bonds (whether through an "A Drawing" or a "C Drawing," as each is defined
in the Letter of Credit), less, (c) the amounts, if any, by which the Principal
Stated Amount has been reduced by virtue of the purchase of Bonds by Chemical
Bank pursuant to Section 2.1(b) of the Letter of Credit Agreement (as defined
in the Letter of Credit), plus (d) the amounts, if any, which have been
reinstated with respect to principal or purchase price of the Bonds in
accordance with the express terms of the Letter of Credit.
5. This drawing is made pursuant to Section 5.05 of the
Indenture because (a) an Act of Bankruptcy (as such term is defined in the
Indenture) has occurred or (b) there are insufficient monies (with respect to
paragraph 3 hereof) in the Bond Fund (as such term is defined in the Indenture)
on the Maturity Date (as such term is defined in the Indenture).
In Witness hereof, this certificate has been executed this ____ day of
______________, 19___.
__________________________
as Trustee
By: ______________________
Authorized Officer
<PAGE>
Exhibit B
to
LETTER OF CREDIT
No._______
INTEREST CERTIFICATE
The undersigned individual, a duly authorized officer of
____________________, as trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (a) Letter of Credit
No._____ dated August 1, 1985 (the "Letter of Credit"), issued by Chemical Bank
in favor of the Beneficiary; (b) those certain Bonds (as defined in the Letter
of Credit); and (c) that certain Indenture (as defined in the Letter of
Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make a drawing under the Letter
of Credit pursuant to the Indenture.
3. The amount of the draft presented with this Certificate is equal
to (a) $__________, the amount of interest on the Bonds (other than Bonds owned
by Chemical Bank) which is due and payable or (b) $_______________, the amount
of any accrued but unpaid interest on Bonds (other than Bonds owned by Chemical
Bank) being purchased with the proceeds of any draft drawn under the Letter of
Credit accompanying or following presentation of a Certificate in the form of
Exhibit C to the Letter of Credit (but, in the case of a draft presented
pursuant to paragraphs (a) or (b) preceding, does not (A) exceed 182 days'
accrued interest on the Bonds, computed at the actual rate from time to time
applicable, or (B) include any interest accrued on the Bonds, or
otherwise, after the maturity, redemption or purchase date, as applicable).
4. The amount of the draft presented with this Certificate does
not exceed the amount equal to (a) the maximum aggregate Interest Stated Amount
originally drawable under the Letter of Credit as provided therein, less (b)
the aggregate amount of all previous drawings made under the Letter of
Credit with respect to interest on or the interest component of the purchase
price of the Bonds, less (c) the amounts, if any, by which the Interest Stated
Amount has been automatically reduced pursuant to the express terms of the
Letter of Credit as a result of an "A Drawing," a "C Drawing" or the purchase
of Bonds by Chemical Bank pursuant to Section 2.1(b) of the "Letter of Credit
Agreement" (as such terms are defined in the Letter of Credit), plus (d) the
amounts which have been reinstated with respect to interest on the Bonds in
accordance with the express terms of the Letter of Credit.
<PAGE>
5. This drawing is made pursuant to Section 5.05 of the
Indenture because (a) an Act of Bankruptcy (as such term is defined in the
Indenture) has occurred or (b) there are insufficient monies (with respect to
paragraph 3 hereof) in the Bond Fund (as such term is defined in the Indenture)
on an Interest Payment Date (as such term is defined in the Indenture) or on a
Purchase Date (as such term, is defined in the Indenture).
In Witness Whereof, this certificate has been executed this ___ day of
_________, 19___.
_________________________
as Trustee
By: _______________________
Authorized Officer
<PAGE>
Exhibit C
to
LETTER OF CREDIT
No._______
PURCHASE CERTIFICATE
The undersigned individual, a duly authorized officer of
____________________, as trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (i) that certain Letter of
Credit No. ________ dated August 1, 1985 (the "Letter of Credit"), issued by
Chemical Bank in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. The Beneficiary is entitled to make a drawing under the Letter
of Credit pursuant to the Indenture.
3. The amount of the draft presented with this certificate is equal
to the principal amount of Bonds other than Bonds owned by Chemical Bank) to be
purchased by the Bank on the day such draft is honored.
4. The Amount of the draft presented with this certificate does
not exceed the amount equal to (a) the maximum aggregate Principal Stated Amount
originally drawable under the Letter of Credit as provided therein, less (b)
the aggregate amount of all previous drawings made under the Letter of
Credit with respect to principal or purchase price of the Bonds (whether
through an "A Drawing" or a "C Drawing"), less (c) the amounts, if any, by
which the Principal Stated Amount has been reduced by virtue of the purchase of
Bonds by Chemical Bank pursuant to Section 2.1(b) of the "Letter of Credit
Agreement" (as defined in the Letter of Credit), less (d) the amounts, if any,
which have been reinstated with respect to principal or purchase price of the
Bonds in accordance with the express terms of the Letter of Credit.
In Witness Whereof, this certificate has been executed this ___ day of
____________, 19___.
__________________________
As Trustee
By: _______________________
Authorized Officer
<PAGE>
Exhibit D
to
LETTER OF CREDIT
No._______
TRANSFER CERTIFICATE
Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
Dear Sirs:
Reference is made to that certain irrevocable Letter of Credit No.
__________ dated August 1, 1985 which has been established by the Bank in favor
of ___________________, as trustee.
The undersigned [Name of Transferor] has transferred and assigned
(and hereby confirms to you said transfer and assignment) all of its rights
in and under said Letter of Credit to [Name of Transferee] and confirms that
[Name of Transferor] no longer has any rights under or interest in said Letter
of Credit.
Transferor and Transferee have indicated on the face of said Letter of
Credit that it has been transferred and assigned to Transferee. Transferee
hereby certifies that it is a duly authorized Transferee under the terms
of such Letter of Credit and is accordingly entitled, upon presentation of
the documents called for therein, to receive payment thereunder.
_________________________
Name of Transferor
By: ______________________
[Name and Title of Authorized
Officer of Transferor]
__________________________
Name of Transferee
By: _______________________
[Name and Title of Authorized
Officer of Transferee]
<PAGE>
Exhibit E
to
LETTER OF CREDIT
No._______
SIGHT DRAFT
New York, New York
_______________, 19___
For Value Received
Pay on Demand* to
U.S. __________________ Dollars (U.S. $ _______________________ )
Charge to Account of Chemical Bank
Irrevocable Letter of Credit No. ____________
dated August 1, 1985
To Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
_______________________
as Trustee
By: _______________________
Authorized Officer
_________________________________
*By wire transfer in immediately available funds for the account of
___________________, as Trustee (Account No._____ [to be specified]).
<PAGE>
Exhibit F
to
LETTER OF CREDIT
No._______
REDUCTION CERTIFICATE
The undersigned individual, a duly authorized officer of
_______________________, as Trustee (the "Beneficiary"), hereby CERTIFIES on
behalf of the Beneficiary as follows with respect to (i) that certain Letter of
Credit No. _____________ dated August 1, 1985 (the "Letter of Credit"), issued
by the Bank in favor of the Beneficiary; (ii) those certain Bonds (as defined
in the Letter of Credit); and (iii) that certain Indenture (as defined in the
Letter of Credit):
1. The Beneficiary is the Trustee under the Indenture.
2. Effective on _____________, the Principal Stated Amount
(as defined in the Letter of Credit) shall be permanently reduced by
$__________ (the "Reduction in Principal Stated Amount") and the Interest
Stated Amount (as defined in the Letter of Credit) shall be permanently reduced
by $_________ (which is equal to ____ days' interest, calculated at the rate of
twelve and one-half of one percent (12 1/2 per annum, based on a year of 365/366
days, on the Reduction in Principal Stated Amount), and the Stated Amount shall
thereupon equal $_________, all in accordance with the provisions of the
Indenture.
3. Effective on _____________, the Principal Stated Amount (as
defined in the Letter of Credit) shall be reduced by $__________ the "Reduction
in Principal Stated Amount") and the Interest Stated Amount (as defined in the
Letter of Credit) shall be reduced by $________ (which is equal to ____ days'
interest, calculated at the rate of twelve and one-half of one percent (12
1/2) per annum, based on a year of 365/366 days, on the Reduction in Principal
Stated Amount), and the Stated Amount shall thereupon equal $_________, all in
accordance with the provisions of the Indenture.
In Witness Whereof, this certificate has been executed this ___ day of
____________, 19___.
_________________________
Trustee
By: _______________________
Authorized Officer
<PAGE>
Exhibit G
to
LETTER OF CREDIT
No._______
CERTIFICATE OF REINSTATEMENT
The undersigned individual, a duly authorized officer of
______________________, as trustee under the Indenture (as defined in the
Letter of Credit) (the "Beneficiary"), hereby CERTIFIES on behalf of the
Beneficiary as follows with respect to that certain Letter of Credit No.____
dated August 1, 1985 (the "Letter of Credit"), issued by Chemical Bank (the
"Bank") in favor of the Beneficiary, pursuant to the Letter of Credit Agreement
(as defined in the Letter of Credit) (the "Letter of Credit Agreement").
(Capitalized terms in this certificate are defined as they are in the Letter of
Credit Agreement.)
1. The undersigned has received notification from the (Agent)
(Bank) (Company) that: (Bonds owned by the Bank which had been acquired with
the proceeds of a drawing under the Letter of Credit pursuant to a Certificate
in the form attached as Exhibits B and C thereto) (Bonds owned by the Bank
which had been acquired with funds made available pursuant to Section 2.1(b) of
the Letter of Credit Agreement) are to be remarketed or sold to a Person other
than the Bank, the Company or the Guarantor.
2. Upon receipt by the Bank of this certificate, (a) the
Principal Stated Amount available under the Letter of Credit shall be increased
by $________ (the "Increase in Principal Stated Amount"), which shall not
increase the Principal Stated Amount available to be drawn under the Letter of
Credit to an amount in excess of the Principal Stated Amount originally
drawable under the Letter of Credit, less any drawings for principal which have
not been reinstated in accordance with the express terms of the Letter of
Credit, and (b) the Interest Stated Amount shall be increased by
$____________(which shall not increase the Interest Stated Amount to an amount
in excess of the Interest Stated Amount originally drawable under the Letter of
Credit less any drawings for interest which have not been reinstated in
accordance with the express terms of the Letter of Credit, subject to the right
of the Bank not to reinstate such amounts as set forth in the Letter of Credit.
_________________________
as Trustee
By: ______________________
Authorized Officer
<PAGE>
Exhibit H
to
LETTER OF CREDIT
No._______
NOTICE OF REDUCTION
__________________________, as Trustee
____________________________________
____________________________________
Attention: Corporate Trust Department
Dear Sirs:
Reference is hereby made to that certain Irrevocable Letter of Credit
No._____ dated August 1, 1985 (the "Letter of Credit"), established by us in
your favor as beneficiary.
We hereby notify you that, in accordance with the terms of the Letter of
Credit and that certain Letter of Credit, Bond Purchase and Guaranty Agreement
dated as of August 1, 1985, among Camden Wire Co., Inc., Oneida Ltd. and us
(check, if applicable)
The Principal Stated mount of the Letter of Credit has been permanently
reduced by $________ and the Interest Stated Amount of the Letter of Credit has
been permanently reduced by $_________.
The Principal Stated Amount of the Letter of Credit has been reduced by
$________ and the Interest Stated Amount of the Letter of Credit has been
reduced by $________. [NOTE: These amounts are subject to reinstatement as
provided in the Letter of Credit.)
Accordingly, we hereby confirm with you the following with respect to
the Letter of Credit:
(1) The Principal Stated Amount equals $_____________.
(2) The Interest Stated Amount equals $______________.
(3) The total Stated Amount equals $______________.
This letter should be attached to the Letter of Credit and made a part
thereof.
CHEMICAL BANK
By: _______________________
Authorized Officer
<PAGE>
Exhibit I
to
LETTER OF CREDIT
No._______
NOTICE OF TERMINATION
Chemical Bank
Letter of Credit Department
55 Water Street
South Building, 17th Floor
New York, New York 10041
Dear Sirs:
Reference is made to that certain Irrevocable Letter of Credit No.
_________ dated August 1, 1985 (the "Letter of Credit"), which has been
established by Chemical Bank in favor of ____________________, as trustee.
The undersigned hereby certify and confirm that no Bonds (other than Bonds
owned by Chemical Bank, if any) (as defined in the Letter of Credit) have
remained Outstanding within the meaning of the Indenture (as defined in said
Letter of Credit), and the provisions of the Indenture have been
satisfied; accordingly, said Letter of Credit is hereby terminated in
accordance with it terms.
CITY OF PINE BLUFF, ARKANSAS
By: _______________________
Authorized Officer
[Name of Beneficiary or Transferee] By:
_______________________
Authorized Officer
<PAGE>
APPENDIX 1
See Tab 12 - Opinion of Counsel for
Camden Wire Co., Inc. and Oneida Ltd.
<PAGE>
EXHIBIT A
LIST OF EXISTING LIENS
Lien on certain machinery and equipment securing a $1,400,000 loan
from the New York State Urban Development Corporation.
<PAGE>
EXHIBIT 4(a)
THE CHASE MANHATTAN BANK, N.A.
CHEMICAL BANK
NATIONSBANK, N.A.
$45,000,000 Credit Facility
to
ONEIDA LTD.
January 19, 1996
<PAGE>
THE CHASE MANHATTAN BANK, N.A.
CHEMICAL BANK
NATIONSBANK, N.A.
$45,000,000 Credit Facility
to
ONEIDA LTD.
January 19, 1996
Table of Contents
1. Credit Agreement
2. Promissory Note in favor of The Chase Manhattan Bank, N.A. ("Chase")
3. Competitive Bid Note in favor of Chase
4. Promissory Note in favor of Chemical Bank ("Chemical")
5. Competitive Bid Note in favor of Chemical
6. Promissory Note in favor of NationsBank, N.A. ("NationsBank")
7. Competitive Bid Note in favor of NationsBank
8. Confirmation and Acknowledgment
9. Secretary's Certificate of Oneida Ltd. ("Oneida")
10. Secretary's Certificate of Buffalo China, Inc. ("Buffalo China")
11. Secretary's Certificate of Camden Wire Co., Inc. ("Camden")
12. Waiver
13. Officer's Certificate
14. Officer's Certificate Designating Restricted Subsidiaries
15. Opinion of Counsel - Oneida
16. Opinion of Counsel - Buffalo China
17. Opinion of Counsel - Camden
18. Good Standing Certificates
19. Franchise Tax Searches
20. Supplemental Secretary's Certificate of Oneida
<PAGE>
CREDIT AGREEMENT
AMONG
ONEIDA LTD.,
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.,
as Agent
U.S. $45,000,000
Dated as of January 19, 1996
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. INTERPRETATIONS AND DEFINITIONS 1
1.1 Definitions 1
1.2 Accounting Terms 12
SECTION 2. THE CREDIT 13
2.1 Loans 13
2.2 Method of Borrowing With Respect to Base Rate
Loans and Eurodollar Loans 13
2.3 Competitive Bid Loans 14
2.4 Promissory Notes 17
2.5 Interest Rates and Payments 18
2.6 Interest Periods 18
2.7 Fees 18
2.8 Changes of Commitments 19
2.9 Required Repayments 19
2.10 Optional Prepayments 19
2.11 General Provisions as to Payments 20
2.12 Computation of Interest and Fees 20
SECTION 3. CONDITIONS OF LENDING 20
3.1 All Loans 20
3.2 Initial Loan 21
SECTION 4. CHANGE IN CIRCUMSTANCES AFFECTING
EURODOLLAR LOANS 22
4.1 Basis for Determining Interest Rate Inadequate 22
4.2 Illegality 22
4.3 Increased Costs 23
4.4 Funding Losses 24
4.5 Survival 25
SECTION 5. REPRESENTATIONS AND WARRANTIES 25
5.1 Corporate Existence and Power 25
5.2 Corporate Authorization 25
5.3 Binding Effect 25
5.4 Financial Statements 25
5.5 Litigation 26
5.6 Taxes 26
<PAGE>
5.7 Governmental and Other Approvals 26
5.8 ERISA 26
5.9 Subsidiaries 27
5.10 Liens 27
5.11 Absence of Defaults 27
5.12 Environmental Compliance 27
SECTION 6. COVENANTS 27
6.1 Financial Statements 27
6.2 Current Ratio 29
6.3 Guaranties 29
6.4 Liens and Encumbrances 29
6.5 Restricted Payments and Restricted Investments 30
6.6 Restricted Dividends 31
6.7 Merger and Consolidation 31
6.8 Transactions with Affiliates; Restricted
Subsidiaries 31
6.9 Sale of Property and Subsidiary Stock 32
6.10 Net Worth 33
6.11 Interest Coverage Ratio 33
6.12 Payment of Taxes and Claims 33
6.13 Maintenance of Properties and Corporate Existence 33
6.14 Payment of Notes and Maintenance of Office 34
6.15 ERISA Compliance 34
6.16 Use of Proceeds 35
6.17 Limitations on Debt 35
6.18 Guarantors 35
6.19 Compliance with Laws 36
6.20 Change in Business 36
SECTION 7. EVENTS OF DEFAULT 36
SECTION 8. THE AGENT; RELATIONS AMONG BANKS
AND BORROWER 39
8.1 Appointment, Powers and Immunities of Agent 39
8.2 Reliance by Agent 39
8.3 Defaults 39
8.4 Rights of Agent as a Bank 40
8.5 Indemnification of Agent 40
8.6 Documents 40
8.7 Non-Reliance on Agent and Other Banks 41
8.8 Failure of Agent to Act 41
8.9 Resignation or Removal of Agent 41
8.10 Amendments Concerning Agency Function 42
8.11 Liability of Agent 42
8.12 Transfer of Agency Function 42
<PAGE>
8.13 Non-Receipt of Funds by the Agent 42
8.14 Withholding Taxes 42
8.15 Several Obligations and Rights of Banks 43
8.16 Pro Rata Treatment of Loans, Etc. 43
8.17 Sharing of Payments Among Banks 43
SECTION 9. MISCELLANEOUS 44
9.1 Notices
9.2 Amendments and Waivers; Cumulative Remedies 44
9.3 Assignments and Participations 45
9.4 Expenses; Documentary Taxes 46
9.5 Counterparts 46
9.6 Headings 46
9.7 Governing Law 47
9.8 Jurisdiction 47
9.9 Waiver of Jury Trial 47
9.10 Successors and Assigns 47
9.11 Entire Agreement 47
Exhibit A - Form of Promissory Note
Exhibit B - Form of Competitive Bid Note
Exhibit C - Form of Competitive Bid Quote Request
Exhibit D - Form of Competitive Bid Quote
Exhibit E - Schedule of Liens
Exhibit F - Form of Guarantee Agreement
Exhibit G - Pricing Grid
<PAGE>
CREDIT AGREEMENT dated as of January 19, 1996 between ONEIDA LTD., a New
York corporation (the "Borrower"), each of the banks which is a signatory
hereto (individually a "Bank" and collectively the "Banks"), and THE CHASE
MANHATTAN BANK, N.A., as agent for the Banks (in such capacity, together with
its successors in such capacity, the "Agent").
The Borrower has requested that the Banks make loans to it in the
aggregate amount not exceeding $45,000,000 at any time outstanding, and the
Banks are prepared to extend such credit. Accordingly, the Borrower, the Banks
and the Agent agree as follows:
SECTION 1. INTERPRETATIONS AND DEFINITIONS
1.1 Definitions. The following terms, as used herein, shall have the
following respective meanings:
Absolute Interest Rate-- a market rate of interest fixed for a
period ranging from 30 days to 180 days, determined through an auction for
short-term borrowings conducted in response to a Competitive Bid Quote Request.
Adjusted Tangible Assets-- all assets except:
(i) deferred assets, other than prepaid insurance and prepaid
taxes, deferred taxes and deferred pension expense;
(ii) patents, copyrights, trademarks, trade
names, franchises, good will, experimental expense and other similar
intangibles;
(iii) Restricted Investments;
(iv) unamortized debt discount and expense; and
(v) assets located, and notes and accounts receivable due from
obligors domiciled, outside the United States of America, unless such assets
are owned by or such notes and accounts receivable are due from Restricted
Subsidiaries.
Affiliate-- a Person (other than a Restricted Subsidiary) which
directly controls, or is controlled by, or is under common control with, the
Borrower. The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise.
<PAGE>
Agency Office-- the office of the Agent presently located at 4
Chase Metrotech Center, 13th Floor, Brooklyn, New York, 11245 or such other
office as the Agent may designate in writing.
Agreement-- this Credit Agreement dated as of January 19, 1996 between
the Borrower, the Banks, and the Agent, as amended or modified from time to
time.
Applicable Lending Office-- for each Bank and each type of Loan,
the Lending Office of such Bank (or of an affiliate of such Bank) designated on
the signature pages hereof or such other office of such Bank (or of an affiliate
of such Bank) as such Bank may from time to time specify to the Agent and
the Borrower as the office by which its Loans of such type are to be made
and maintained.
Base Rate-- for any day, the higher of (a) the Federal Funds Rate for
such day plus one-half of 1% per annum or (b) the Prime Rate for such day.
Each change in any interest rate provided for herein based upon the Base
Rate resulting from a change in the Base Rate shall take effect at the time of
such change in the Base Rate.
Base Rate Loan-- a Loan which bears interest at rates based upon the
Base Rate.
Closing Date-- January 19, 1996 or such other date as the parties
may mutually agree.
Code-- the Internal Revenue Code of 1986, as amended.
Commitment-- as to each Bank, the obligation of such Bank to make
Loans pursuant to Section 2.1 hereof in an aggregate amount at any one
time outstanding up to but not exceeding the amount set opposite such Bank's
name on the signature pages hereof under the caption "Commitment" (as the same
may be reduced at any time or from time to time pursuant to Section 2.8
hereof).
Competitive Bid Borrowing-- has the meaning given to such term in
Section 2.3(c) of this Agreement.
Competitive Bid Loan-- a Loan made in accordance with Section 2.3 of
this Agreement.
Competitive Bid Quote-- an offer by a Bank to make a Competitive Bid
Loan in accordance with Section 2.3(d) of this Agreement.
Competitive Bid Quote Request-- a request by Borrower for Competitive
Bid rate offers pursuant to Section 2.3(c) of this Agreement.
Competitive Bid Rate-- has the meaning given to such term in
Section 2.3(d) of this Agreement.
<PAGE>
Consolidated Adjusted Net Income-- for any period, the gross revenues
of the Borrower 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 Borrower 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 Borrower or a Restricted Subsidiary shall
have consolidated or which shall have merged into or with the Borrower 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 Borrower or any Restricted Subsidiary has
an ownership interest unless such net earnings shall have actually been
received by the Borrower 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
Borrower 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 Borrower or any Restricted Subsidiary;
<PAGE>
(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 Adjusted Tangible Assets-- at any date means the
Adjusted Tangible Assets of the Borrower and its Restricted Subsidiaries at
such date determined on a consolidated basis.
Consolidated Adjusted Tangible Net Worth-- at any date means:
(i) the net book value (after deducting related depreciation,
obsolescence, amortization, valuation and other proper reserves) at which
the Adjusted Tangible Assets of the Borrower and all Restricted
Subsidiaries would be shown on a consolidated balance sheet at such date, but
excluding any amount on account of write-ups of assets after October 30, 1993;
(ii) minus the amount at which their liabilities (other than
capital stock and surplus) would be shown on such balance sheet, and
including as liabilities all reserves for contingencies and other potential
liabilities and all minority interests in Restricted Subsidiaries.
Consolidated Cash Flow-- with respect to the Borrower and all
Restricted Subsidiaries, means for any period the sum (without duplication) of
(i) Consolidated Adjusted Net Income, (ii) all provisions for federal, state or
other income taxes made by the Borrower and its Restricted Subsidiaries during
such period, (iii) Consolidated Interest Charges for such period, and (iv)
depreciation and amortization deducted in determining Consolidated Adjusted Net
Income.
Consolidated Current Assets-- at any date means the amount at which
the current assets of the Borrower and all Restricted Subsidiaries would be
shown on a consolidated balance sheet at such date.
Consolidated Current Liabilities-- at any date means the amount at
which the current liabilities of the Borrower and all Restricted Subsidiaries
would be shown on a consolidated balance sheet at such date, plus
(without duplication) the aggregate amount of their Guaranties of current
liabilities of other Persons outstanding at such date.
Consolidated Income Available for Interest Charges-- with respect to
the Borrower and all Restricted Subsidiaries, means for any period the sum
(without duplication) of (i) Consolidated Adjusted Net Income, (ii) to the
extent deducted in determining Consolidated Adjusted Net Income, all
provisions for federal, state or other income taxes made by
<PAGE>
the Borrower and its Restricted Subsidiaries during such period, and (iii)
Consolidated Interest Charges for such period.
Consolidated Interest Charges-- with respect to the Borrower and
all Restricted Subsidiaries means for any period the sum of (i) interest
expense with respect to their liabilities for Long Term Debt (including the
current portion thereof) and Current Debt and (ii) to the extent not already
included in (i), imputed interest expenses on capitalized lease obligations.
Controlled Group-- all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common
control, which together with the Borrower, are treated as a single
employer under Section 414(b) or 414(c) of the Code.
Current Debt-- with respect to any Person, means all liabilities for
borrowed money, all obligations under capitalized leases, and all liabilities
secured by any Lien, other than any Lien permitted by Section 6.4(a)(i)-(iv),
existing on Property owned by that Person (whether or not those liabilities
have been assumed) which, in any case, are payable on demand or within one year
from their creation, plus the aggregate amount of Guaranties by that Person of
all such liabilities of other Persons, except:
(i) any liabilities which are renewable or extendible at the
option of the debtor to a date more than one year from the date of creation
thereof; and
(ii) any liabilities which, although payable within one year,
constitute principal payments on indebtedness expressed to mature more than
one year from the date of its creation.
Default-- any event or condition which constitutes an Event of Default
or which with the giving of notice or lapse of time or both, would become an
Event of Default.
Dollars and the sign $-- means lawful money of the United States
of America.
Domestic Business Day-- any day except a Saturday, Sunday, or other day
on which commercial banks in the State of New York are authorized by law to
close.
Environmental Law-- any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
<PAGE>
ERISA-- the Employee Retirement Income Security Act of 1974, as from
time to time amended.
ERISA Affiliate-- any corporation or trade or business which is a
member of any group or organizations (i) described in Section 414(b) or (c)
of the Code of which the Borrower is a member, or (ii) solely for
purposes of potential liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and
Section 412(n) of the Code, described in Section 414(m) or (o) of the Code
of which the Borrower is a member.
Eurodollar Business Day-- any Domestic Business Day on which
commercial banks are also open for domestic and international business
(including dealings in Dollar deposits in the interbank Eurodollar market).
Eurodollar Loan-- a Loan which the Borrower specifies pursuant to
Section 2.2 hereof to be a Eurodollar Loan.
Eurodollar Margin -- means a rate per annum ranging from 1/2% to 1% to
be determined by the Agent as of the first day of May, August, November
and February of each year based on the ratio of Total Funded Debt at the end
of Borrower's most recent fiscal quarter to Consolidated Cash Flow for the
four fiscal quarters ending with such quarter, as more particularly set forth
on Exhibit G attached hereto. The ratio of Total Funded Debt to Consolidated
Cash Flow shall be determined by the Agent based on the financial
statements required to be delivered by Borrower under Section 6.1 (a) and
(b) hereof. Should the Banks fail to receive Borrower's financial statements
within the time periods set forth in Section 6.1 (a) and (b), the Eurodollar
Margin shall become 1% on the first day of the next succeeding May, August,
November or February.
Event of Default-- has the meaning set forth in Section 7 hereof.
Federal Funds Rate-- for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System, as published by the Federal Reserve
Bank of New York on the Domestic Business Day next succeeding such day,
provided that (i) if the day for which such rate is to be determined is not a
Domestic Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Domestic Business Day as
so published on the next succeeding Domestic Business Day, and (ii) if such
rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Reference Bank on such day on
such transactions as determined by the Agent.
Guarantee Agreement-- means a guarantee agreement, substantially in
the form of Exhibit F annexed hereto, executed and delivered by each
Guarantor guaranteeing the payment of amounts due hereunder and the Borrower's
performance of its obligations required to be performed hereunder, provided
that (a) the Guarantee Agreement executed by Buffalo China, Inc. shall be
limited to a maximum liability of $10,000,000, (b) the Guarantee
<PAGE>
Agreement executed by Camden Wire Co., Inc. shall be limited to a maximum
liability of $20,000,000, and (c) the Guarantee Agreement executed by each
other Guarantor shall be limited to an amount mutually acceptable to Borrower
and the Banks, which amount shall be not less than the greater of (i) 80% of
the Tangible Net Worth of such Guarantor, (ii) 35% of the Adjusted Tangible
Assets of such Guarantor, or (iii) the amount of the intercompany loan
account, if any, maintained by Borrower for the benefit of such Guarantor, all
determined as of the date the Guarantee Agreement is executed by such
Guarantor.
Guarantor-- means each of Buffalo China, Inc., Camden Wire Co., Inc.
and each Restricted Subsidiary created or acquired after the date of this
Agreement whose Adjusted Tangible Assets account for 5% or more of the
Consolidated Adjusted Tangible Assets of Borrower and its Restricted
Subsidiaries.
Guaranty-- with respect to any Person, means all guaranties of, and
all other obligations which in effect guaranty in any manner, any
indebtedness, dividend or other obligation of any other Person other than
any Restricted Subsidiary or the Borrower (such other person hereafter
referred to as the "primary obligor"), including obligations incurred
through an agreement, continent or otherwise, by such Person:
(i) to purchase such indebtedness or obligation or, in the
circumstances contemplated by Clause (iii) below, any Property constituting
security thereof;
(ii) to advance or supply funds (A) for the purchase or payment of
such indebtedness or obligation, or (B) to maintain working capital or any
balance sheet or income statement condition;
(iii) to lease Property, or to purchase Securities or other
Property or services, primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the primary obligor to make
payment of the indebtedness or obligation; or
(iv) otherwise to assure the owner of such indebtedness or
obligation, or the primary obligor, against loss;
but excluding endorsements in the ordinary course of business of negotiable
instruments for deposit or collection.
The amount of any Guaranty shall be deemed to be the maximum amount for
which such Person may be liable, upon the occurrence of any contingency
or otherwise, under or by virtue of the Guaranty.
Interest Period-- (A) with respect to each Eurodollar Loan, the
period commencing on the date of such Loan and ending on the numerically
corresponding day one, two, three, four, five, six or twelve months
thereafter, as the Borrower may elect; provided that:
<PAGE>
(i) any Interest Period which would otherwise end on a
day which is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day unless such Eurodollar Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Eurodollar Business Day;
(ii) any Interest Period which begins on the last Eurodollar
Business Day of the calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall, subject to clause (iii) below, end on the last Eurodollar
Business Day of the corresponding calendar month; and
(iii) no Interest Period may extend beyond the Termination
Date, and the Banks shall be under no obligation to make a Eurodollar Loan
if the Interest Period selected by the Borrower would extend beyond the
Termination Date.
(B) With respect to each Competitive Bid Loan, the period
commencing on the date of such Loan and ending on such day as the Borrower may
request and the Banks may offer pursuant to Section 2.3, provided that such
period may not be shorter than 30 days and may not exceed 180 days.
Lien-- any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether the
interest is based on common law, statute or contract (including the security
interest lien arising from a mortgage, encumbrance, pledge, conditional sale or
trust receipt or a lease, consignment or bailment for security purposes). The
term "Lien" shall not include minor reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions and other
minor title exceptions affecting Property, provided that they do not
constitute security for a monetary obligation. For the purposes of this
Agreement, the Borrower or a Restricted Subsidiary shall be deemed to be the
owner of any Property which it has acquired or holds subject to a
conditional sale agreement, financing lease or other arrangement pursuant to
which title to the Property has been retained by or vested in some other
Person for security purposes, and such retention or vesting shall be deemed to
be a Lien. The amount of any Lien shall be the aggregate amount of the
obligation secured thereby.
Loan and Loans-- a Base Rate Loan, Eurodollar Loan, or a Competitive
Bid Loan, or any combination thereof, as the context may require.
London Interbank Offered Rate-- applicable to any Interest Period
means the interbank offered rate quoted by the Reference Bank (and rounded
upwards to the nearest 1/16 of 1%) to prime banks in the London interbank
market as of 11:00 a.m. London time two Eurodollar Business Days prior to the
first day of the Interest Period applicable to the relevant Eurodollar Loan for
deposits in Dollars in amounts and for durations comparable to such
Eurodollar Loan and applicable Interest Period divided by 1 minus the Reserve
Requirements (rounded upwards if necessary to the nearest 1/100 of 1%).
<PAGE>
Long Term Debt-- with respect to any Person, means all liabilities
for borrowed money (including, without limitation, subordinated debt), all
obligations under capitalized leases, and all liabilities secured by any Lien,
other than any Lien permitted by Section 6.4(a)(i)-(iv), existing on Property
owned by that Person (whether or not those liabilities have been assumed), or
any other obligation (other than deferred taxes) which are required by
generally accepted accounting principles to be shown as liabilities on its
balance sheet which, in any case, are payable more than one year from the date
of their creation, including (i) any liabilities which are renewable or
extendible at the option of the obligor to a date more than one year from their
creation and (ii) any liabilities which, although payable within one year,
constitute principal payments on indebtedness expressed to mature more than one
year from its creation, plus the aggregate amount of Guaranties by that Person
of all such liabilities of other Persons.
Notes-- the Notes of the Borrower provided for by Section 2.4
hereof substantially in the form of Exhibit A or Exhibit B, as applicable, with
each such note individually referred to as a "Note".
PBGC-- the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Pension Plans-- all "employee pension benefit plans" as such term
is defined in Section 3 of ERISA, maintained by the Borrower and its
Subsidiaries from time to time.
Person-- an individual, partnership, corporation, trust or
unincorporated
organization, and a government or a governmental agency or political
subdivision.
Plan-- any employee benefit or other plan established or maintained, or
to which contributions have been made, by the Borrower or any ERISA Affiliate
and which is covered by Title IV of ERISA.
Prime Rate-- the rate of interest publicly announced by the Reference
Bank from time to time as its Prime Rate, regardless of whether that rate is
the lowest rate actually charged by such Bank on commercial borrowings. Each
change in interest rate provided for herein shall take effect at the time of
such change in the Prime Rate.
Principal Office-- the office of the Agent presently located at
One Lincoln Center, Syracuse, New York, or such other office as the Agent
may designate to the Borrower in writing.
Property-- any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
Reference Bank-- The Chase Manhattan Bank, N.A. or any successor
thereto.
<PAGE>
Required Banks-- Banks having at least 60% of the aggregate amount of
the Commitments.
Regulation D-- Regulation D of the Board of Governors of the
Federal Reserve System as in effect from time to time.
Regulatory Change-- with respect to any Bank, any change after the date
of this Agreement in federal, state, municipal or foreign laws or
regulations (including Regulation D) or the adoption or making after such
date of any interpretations, directives or requests applying to a class of
banks including such Bank of or under any federal, state, municipal or any
foreign, laws or regulations (whether or not having the force of law)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
Reserve Requirements-- for any Interest Period, means the average
maximum rate at which reserves are required to be maintained during such time
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding $1,000,000,000 against Eurodollar liabilities
(as defined therein). Without limiting the effect of the foregoing, the
Reserve Requirements shall also reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory Change against (i)
any category of liabilities which includes deposits by reference to which
the London Interbank Offered Rate for Eurodollar Loans is to be determined or
(ii) any category of extensions of credit or other assets which include
Eurodollar Loans.
Restricted Dividends-- means all dividends or other distributions in
respect of capital stock of the Borrower or any Restricted Subsidiary
(except distributions in such stock or of warrants, rights or other options to
purchase such stock), valued at the fair market value of the Property being
dividended, distributed or otherwise transferred as a Restricted Dividend.
Restricted Investments-- all Property, including all investments in
any Person, whether by acquisition of stock, indebtedness, other obligation
or Security, or by loan, advance, capital contribution, or otherwise, except:
(i) investments in one or more Restricted Subsidiaries or any
corporation which concurrently with such investment becomes a Restricted
Subsidiary;
(ii) Property to be used in the ordinary course of business,
including without limitation, advances made to employees for expenses incurred
in the ordinary course of business;
(iii) current assets arising from the sale of goods and services
in the ordinary course of business;
(iv) direct obligations of the United States of America, or any
of its agencies or obligations fully guaranteed by the United States of
America, provided that such obligations mature within one year from the date
acquired;
<PAGE>
(v) demand deposits or certificates of deposit maturing within
one year from the date acquired and issued by a bank or trust company organized
under the laws of the United States or any of its states, and having
capital, surplus and undivided profits aggregating at least $50,000,000;
(vi) commercial paper given the highest rating by a national
credit rating agency and maturing not more than 270 days from the date
acquired; and
(vii) shares of capital stock of the Borrower held in its treasury
as of the date of this Agreement.
Restricted Payment-- means the excess, if any, of redemptions
or acquisitions of capital stock of the Borrower or of warrants, rights or
other options to purchase such stock, over the net proceeds of sales of such
stock or of warrants, rights or other options to purchase such stock valued at
the fair market value of the Property being distributed or otherwise
transferred as a Restricted Payment.
Restricted Subsidiary-- a Subsidiary,
(i) organized under the laws of the United States, Puerto Rico,
Canada, Mexico, or any member of the European Economic Community, or a
jurisdiction thereof;
(ii) which conducts substantially all of its business and has
substantially all of its Property within the United States, Puerto Rico,
Canada, Mexico, or any member of the European Economic Community;
(iii) a majority of each class of capital stock of which is
legally and beneficially owned by the Borrower and/or its Restricted
Subsidiaries; and
(iv) either (a) as of the Closing Date, is a Restricted
Subsidiary within the meaning of paragraphs (i), (ii) and (iii) above or (b) is
designated as a Restricted Subsidiary pursuant to Section 6.8(b) unless such
Subsidiary is subsequently designated as an Unrestricted Subsidiary pursuant to
Section 6.8(b); provided that Buffalo China, Inc. and Camden Wire Co., Inc.
shall at all times remain a Restricted Subsidiary under this Agreement.
Security-- shall have the same meaning as in Section 2(1) of
the Securities Act of 1933, as amended.
Subsidiary-- a corporation in which the Borrower owns, directly
or indirectly, sufficient Voting Stock to enable it ordinarily, in the absence
of contingencies, to elect a majority of the corporate directors (or
Persons performing similar functions).
<PAGE>
Tangible Net Worth-- with respect to any Person, means as of any date
the net book value (after deducting related depreciation, obsolescence,
amortization, valuation and other proper reserves) at which the Adjusted
Tangible Assets of such Person would be shown on a balance sheet at such date
(but excluding any amount on account of a write-up of assets) minus the amount
at which its liabilities (other than capital stock and surplus) would be shown
on such balance sheet, and including as liabilities all reserves for
contingencies and other potential liabilities and all minority interests in
Subsidiaries.
Termination Date-- February 20, 2001.
Total Funded Debt-- the sum of (i) Long Term Debt (including the
current portion thereof) and (ii) Current Debt.
Unrestricted Subsidiary-- any Subsidiary which is not a
Restricted Subsidiary.
Voting Stock-- Securities, the holders of which are ordinarily, in
the absence of contingencies, entitled to elect the corporate directors (or
Persons performing similar functions).
1.2 Accounting Terms. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required
to be delivered hereunder shall be prepared in accordance with generally
accepted accounting principles consistently applied.
SECTION 2. THE CREDIT
2.1 Loans. Each Bank severally agrees, on the terms and conditions
contained in this Agreement, to lend to the Borrower from time to time prior to
the Termination Date an amount up to but not exceeding in the aggregate at any
one time outstanding the amount of such Bank's Commitment as then in effect.
The Loans may be outstanding as Eurodollar Loans or Base Rate Loans (each a
"type" of Loan). The Loans of each Bank shall be made and maintained at such
Bank's Applicable Lending Office for such type of Loans. During such period and
within the foregoing limits, the Borrower may borrow under this Section 2.1,
prepay to the extent permitted under Section 2.10 hereof and reborrow under
this Section 2.1.
2.2 Method of Borrowing With Respect to Base Rate Loans and
Eurodollar Loans.
(a) With respect to each Base Rate Loan and Eurodollar Loan made
pursuant to Section 2.1 hereof, the Borrower shall give the Agent (who shall
promptly notify the Banks) at least one Domestic Business Days' notice in the
case of a Base Rate Loan or at least three Eurodollar Business Days' notice in
the case of a Eurodollar Loan (such Notice to be not later than 12 noon),
specifying:
<PAGE>
(i) the date of such Loan, which shall be a Domestic Business
Day in the case of a Base Rate Loan and a Eurodollar Business Day in the
case of a Eurodollar Loan;
(ii) the principal amount of such Loan which, in the case of a
Eurodollar Loan, shall be in the minimum principal amount of $5,000,000 and in
larger multiples of $1,000,000;
(iii) whether the Loan is to be a Base Rate Loan or a
Eurodollar Loan; and
(iv) the duration of the Interest Period applicable thereto,
subject to the definition of Interest Period.
(b) Not later than 1:00 p.m. New York time on the date specified in
each notice of borrowing, each Bank shall, through its Applicable Lending Office
and subject to the terms of this Agreement, make the amount of the Loan to be
made by that Bank available to the Agent at account number 900 9000 002
maintained by the Agent at its Agency Office in immediately available funds for
the account of the Borrower. The amount so received by the Agent shall, subject
to the conditions of this Agreement, be made available to the Borrower, in
immediately available funds, by the Agent crediting an account of the Borrower
maintained with the Agent at its Agency Office.
2.3 Competitive Bid Loans.
(a) In addition to borrowings of Base Rate Loans and Eurodollar Loans
pursuant to Section 2.1, the Borrower may, as set forth in this Section 2.3,
request the Banks to make offers to make Competitive Bid Loans to the
Borrower priced at any Absolute Interest Rate. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section
2.3.
(b) The aggregate principal amount of all Competitive Bid Loans,
together with the aggregate principal amount of all Base Rate Loans and
Eurodollar Loans at any one time outstanding, shall not exceed the aggregate
amount of the Commitments at such time.
(c) When the Borrower wishes to request offers to make
Competitive Bid Loans, it shall give the Agent (which shall promptly notify
the Banks) notice (a "Competitive Bid Quote Request") so as to be received at
the Agency Office no later than 11:00 a.m. New York time on the Business Day
immediately preceding the date of borrowing proposed therein (or such other
time and date as the Borrower and the Agent, with the consent of the Required
Banks, may agree), which notice shall be substantially in the form of Exhibit C
hereto and shall specify:
<PAGE>
(i) the proposed date of such borrowing (a "Competitive Bid
Borrowing"), which shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid Borrowing,
which shall be at least $5,000,000 (and in larger multiples of $1,000,000)
but shall not cause the limits specified in Section 2.3(b) hereof to be
violated; and
(iii) the duration of the Interest Period applicable thereto.
The Borrower may request offers to make Competitive Bid Loans for up to
three different Interest Periods in a single Competitive Bid Quote Request
and there may be no more than three different Interest Periods for
Competitive Bid Loans outstanding at the same time. Each request for a separate
Interest Period shall be deemed to be a separate Competitive Bid Quote Request
for a separate Competitive Bid Borrowing. Except as otherwise provided in the
preceding sentence, no Competitive Bid Quote Request shall be given within five
Business Days of another Competitive Bid Quote Request.
(d) (i) Each Bank may submit one or more Competitive Bid Quotes,
each containing an offer to make a Competitive Bid Loan in response to any
Competitive Bid Quote Request; provided that, if the Borrower's request under
Section 2.3(c) hereof specified more than one Interest Period, such Bank may
make a single submission containing a separate offer for each such Interest
Period and each such separate offer shall be deemed to be a separate
Competitive Bid Quote. Each Competitive Bid Quote must be submitted to the
Agent at the Agency Office not later than 10:00 a.m. New York time on the
proposed date of borrowing; provided that any Competitive Bid Quote submitted
by the Agent (or its Applicable Lending Office) may be submitted, and may only
be submitted, if the Agent (or such Applicable Lending Office) notifies the
Borrower of the terms of the offer contained therein not later than 9:45 a.m.
New York time on the proposed date of borrowing. Except as otherwise provided
in this Agreement, any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Agent given on the instructions of the
Borrower.
(ii) Each Competitive Bid Quote shall be substantially in the form
of Exhibit D hereto and shall specify:
(A) the proposed date of borrowing and the Interest Period
therefor;
(B) the principal amount of the Competitive Bid Loan
for which each offer is being made, which principal amount (x) may be greater
than or less than the unused Commitment of the quoting Bank, (y) shall be at
least $5,000,000 or a larger multiple of $1,000,000, and (z) may not exceed
the principal amount of the Competitive Bid Borrowing for which offers were
requested;
<PAGE>
(C) the rate of interest per annum (rounded upwards, if
necessary, to the nearest 1/10,000th of 1%) (the "Competitive Bid Rate")
offered for each such Competitive Bid Loan; and
(D) the identity of the quoting Bank.
No Competitive Bid Quote shall contain qualifying, conditional or similar
language or propose terms other than or in addition to those set forth in the
applicable Competitive Bid Quote Request; provided, however, that a Competitive
Bid Quote may be conditioned upon acceptance by the Borrower of all (or some
specified minimum) of the principal amount of the Competitive Bid Loan for
which such Competitive Bid Quote is being made.
(e) The Agent shall as promptly as practicable after such
Competitive Bid Quote is submitted (but in any event not later than 10:15 a.m.
New York time) notify the Borrower of the terms (i) of any Competitive Bid
Quote submitted by a Bank that is in accordance with Section 2.3(d) hereof and
(ii) of any Competitive Bid Quote that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid Quote submitted by such Bank with
respect to the same Competitive Bid Quote Request. Any such subsequent
Competitive Bid Quote shall be disregarded by the Agent unless such subsequent
Competitive Bid Quote is submitted solely to correct a manifest error in such
former Competitive Bid Quote. The Agent's notice to the Borrower shall specify
(A) the aggregate principal amount of the Competitive Bid Borrowing for which
offers have been received and (B) the respective principal amounts and
Competitive Bid Rates so offered by each Bank (identifying the Bank that
submitted each Competitive Bid Quote).
(f) Not later than 11:00 a.m. New York time on the proposed date of
borrowing the Borrower shall notify the Agent at the Agency Office of its
acceptance or nonacceptance of the offers so notified to it pursuant to Section
2.3(e) hereof and the Agent shall promptly notify each affected Bank (it being
understood that in the event the Borrower does not so advise the Agent of its
acceptance by such time it shall be deemed to have declined to accept any such
offers). In the case of acceptance, such notice shall specify the aggregate
principal amount of the Competitive Bid Quote for each Interest Period that are
accepted. The Borrower may accept any Competitive Bid Quote in whole or in part
(provided that any Competitive Bid Quote accepted in part from any Bank shall
be at least $5,000,000 and in multiples of $1,000,000); provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive Bid
Borrowing shall be at least $5,000,000 (and in larger multiples of $1,000,000)
but shall not cause the limits specified in Section 2.3(b) hereof to be
violated;
<PAGE>
(iii) acceptance of offers may only be made in ascending order of
Competitive Bid Rates;
(iv) the Borrower may not accept any offer that the Agent has
determined (and advised the Borrower) fails to comply with Section 2.3(d) hereof
or otherwise fails to comply with the requirements of this Agreement.
If offers are made by two or more Banks with the same Competitive Bid Rates for
a greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Interest Period, the principal amount of
Competitive Bid Loans in respect of which such offers are accepted shall be
allocated by the Borrower among such Banks as nearly as possible (in multiples
of $1,000,000) in proportion to the aggregate principal amount of such offers;
provided, however, that no Bank shall be required to make a Competitive Bid
Loan in an amount less than that specified as a minimum in its Competitive Bid
Quote. Determinations by the Borrower of the amounts of Competitive Bid Loans
shall be conclusive in the absence of manifest error.
(g) Any Bank whose offer to make any Competitive Bid Loan has been
accepted shall, not later than 1:00 p.m. New York time on the date specified
for the making of such Loan, make the amount of such Loan available to the
Agent at the Agency Office at account number 900 9000 002 in immediately
available amounts. The amount so received by the Agent shall, subject to the
terms and conditions of this Agreement, be made available to the Borrower on
such date by depositing the same, in immediately available funds, in an account
of the Borrower designated by the Borrower.
(h) The amount of any Competitive Bid Loan made by any Bank shall
not constitute a utilization of such Bank's Commitment; provided, however, that
for the duration of any Competitive Bid Loan, each Bank's obligation to make
Eurodollar Loans and Base Rate Loans shall be reduced on a pro rata basis to
account for the utilization of a portion of the aggregate amount of the
Commitments by such Competitive Bid Loan, as set forth in Section 2.3(b)
hereof.
(i) Each Competitive Bid Loan made by a Bank shall be for the sole
account of such Bank, and none of the other Banks shall have any obligation or
liability with respect thereto.
2.4 Promissory Notes.
(a) The Base Rate Loans and Eurodollar Loans made by each Bank shall
be evidenced by a Note payable to the order of each such Bank in substantially
the form of Exhibit A. Each Note shall be dated on or before the date of the
first such Loan, shall set forth the amount of the Bank's Commitment as the
maximum principal amount thereof and shall have the blanks therein
appropriately completed.
<PAGE>
(b) The Competitive Bid Loans made by each Bank shall be evidenced by
a single promissory note payable to the order of such Bank in substantially the
form of Exhibit B. Each Note shall be dated on or before the date of the first
such Loan, shall set forth the aggregate amounts of the Commitments as the
maximum principal amount thereof, and shall have the blanks therein
appropriately completed.
(c) Each Bank shall record and, prior to any transfer of its Notes,
shall endorse on the schedule forming a part thereof appropriate notations
evidencing the date and amount of each payment of principal made by the
Borrower with respect thereto. Each Bank is hereby irrevocably authorized by
the Borrower to endorse its Notes and to attach to and make a part of its
Notes a continuation of any such Schedule as and when required, provided that
any failure by a Bank to make any endorsement shall not affect the obligation of
the Borrower hereunder or under its Notes. In lieu of endorsing borrowings and
payments on schedules to its Notes, each Bank may maintain on its books and
records (including computer records) an account in the name of Borrower
showing the date and amount of each borrowing under this Agreement, as well as
the date and amount of each payment of principal and interest with respect
thereto, provided that prior to any transfer of its Notes each Bank shall
endorse on the schedule attached thereto the date and amount of each borrowing
and the date and amount of each principal payment. Borrower agrees that such
books and records (or the schedules with notations thereon) shall be prima
facie evidence of all borrowings and payments made hereunder and shall be
conclusive upon Borrower absent manifest error.
2.5 Interest Rates and Payments.
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof payable in arrears on the last day of November,
February, May and August while any principal balance on such Loan is
outstanding, and on the maturity thereof, at a rate per annum equal to the Base
Rate. Such interest rate shall be adjusted automatically on and as of the
effective date of any change in the Base Rate. Overdue principal of and, to the
extent permitted by law, overdue interest on each Base Rate Loan shall bear
interest for each day until paid at a rate per annum equal to the sum of 1%
plus the otherwise applicable rate for such day, payable immediately without
demand of the Agent or any Bank.
(b) Each Eurodollar Loan shall bear interest on the unpaid principal
amount thereof, for each Interest Period applicable thereto, at a rate per
annum equal to the sum of the Eurodollar Margin plus the applicable London
Interbank Offered Rate. Such interest shall be payable in arrears on the last
day of each Interest Period applicable thereto, and in the case of an Interest
Period greater than three months, at three-month intervals after the first day
of such Interest Period. Any overdue principal of and, to the extent permitted
by law, overdue interest on, each Eurodollar Loan shall bear interest payable
on demand, for each day from the date payment thereof was due to the date of
actual payment, at a rate per annum equal to the sum of 1% plus the rate
applicable to Base Rate Loans for such day, payable immediately without demand
of the Agent or any Bank.
<PAGE>
(c) Each Competitive Bid Loan shall bear interest at the applicable
Competitive Bid Rate. Such interest shall be payable in arrears on the last day
of each Interest Period applicable thereto, and in the case of an Interest
Period greater than 90 days, at 90-day intervals after the first day of such
Interest Period. Any overdue principal and, to the extent permitted by law,
overdue interest on each Competitive Bid Loan shall bear interest for each day
until paid at a rate per annum equal to the sum of 1% plus the rate applicable
to Base Rate Loans for such day, payable immediately without demand of the
Agent or any Bank.
2.6 Interest Periods. The duration of the Interest Period for each
Eurodollar Loan or Competitive Bid Loan shall be as specified in the applicable
notice delivered pursuant to Sections 2.2 or 2.3, as applicable.
2.7 Fees. The Borrower shall pay to the Agent for the account of each of
the Banks:
(a) a commitment fee computed at a rate per annum ranging from 12.50
basis points to 25 basis points applied to the daily average unused amount of
each Bank's Commitment (for which purpose the amount of any Competitive Bid
Loan shall not be deemed to be a utilization of a Bank's Commitment). The
commitment fee rate will be determined by the Agent as of the first day of May,
August, November and February of each year based on the ratio of Total Funded
Debt at the end of Borrower's most recent fiscal quarter to Consolidated Cash
Flow for the four fiscal quarters ending with such quarter, as more
particularly set forth on Exhibit G attached hereto. The ratio of Total Funded
Debt to Consolidated Cash Flow shall be determined by the Agent based on the
financial statements required to be delivered by Borrower under Section 6.1(a)
or (b) hereof. Should the Banks fail to receive Borrower's quarterly financial
statements within the time periods set forth in Section 6.1 (a) or (b) the
commitment fee shall become 25 basis points on the first day of the next
succeeding May, August, November or February. Such commitment fee shall accrue
from the date hereof to and including the Termination Date or, if earlier, the
date on which the Commitments are terminated. The commitment fee shall be
payable in arrears quarterly on the last day of each February, May, August, and
November of each year, commencing on the first such date after the Closing Date
and ending on the Termination Date or, if earlier, the date on which the
Commitments are terminated. Any overdue fee shall bear interest until paid at a
rate per annum equal to the sum of 1% plus the Base Rate for such day, payable
immediately without demand of the Agent;
(b) a facility fee which shall accrue on the full amount of the
Commitment of each Bank for the period from and including the date hereof to
the Termination Date (or, if earlier, on the date the Commitment is
terminated), regardless of usage, at a rate per annum equal to seven basis
points, due and payable in arrears on the last day of each February, May,
August and November, commencing on the first such date after the Closing Date
or upon termination of the Commitments. Any overdue fee shall bear interest
until paid at a rate per annum equal to the sum of 1% plus the Base Rate for
such day, payable immediately without demand of the Agent.
<PAGE>
2.8 Changes of Commitments. The Borrower shall have the right to reduce or
terminate the amount of unused Commitments at any time or from time to time,
provided that: (i) the Borrower shall give three Domestic Business Days' prior
written notice to the Agent of each such reduction or termination; and (ii)
each partial reduction shall be in an aggregate amount at least equal to
$5,000,000 or any multiple thereof. Such reduction or termination shall be
permanent. The Commitments once reduced or terminated may not be reinstated.
The accrued commitment fee and facility fee with respect to the terminated
Commitment shall be payable on the effective date of such termination.
2.9 Required Payments. The Borrower shall pay to the Agent for account
of each Bank the principal of each Loan made by such Bank, and each Loan shall
mature, on the earlier of the last day of the Interest Period therefor or the
Termination Date.
2.10 Optional Prepayments. The Borrower shall have the right to prepay
Loans at any time or from time to time; provided that (a) the Borrower shall
give the Agent at least two Domestic Business Days' notice in the event of a
Base Rate Loan and four Eurodollar Business Days' notice in the event of a
Eurodollar Loan, (b) Eurodollar Loans may be prepaid only if Borrower also pays
in connection therewith any amounts payable pursuant to Section 4.4, and (c)
Competitive Bid Loans may not be prepaid.
2.11 General Provisions as to Payments. The Borrower shall make each
payment of principal of, and interest on, the Loans and fees hereunder not later
than 12:00 noon on the date when due in funds immediately available at the
Agency Office of the Agent, provided that, if a new Loan is to be made by any
Bank on a date the Borrower is to repay any principal of an outstanding Loan
of such Bank, such Bank shall apply the proceeds of such new Loan to the
payment of the principal to be repaid and only an amount equal to the excess of
the principal to be borrowed over the principal to be repaid shall be made
available by such Bank to the Agent as provided in Section 2.2(b) or 2.3(g), as
applicable, or if the principal to be repaid exceeds the principal to be
reborrowed, the Borrower shall pay to the Agent for the account of such Bank
only an amount equal to such excess. Whenever any payment of principal of, or
interest on, Base Rate Loans or Competitive Bid Loans, or of any commitment fee
or facility fee, shall be due on a day which is not a Domestic Business Day,
the date for payment thereof shall be the next succeeding Domestic Business
Day. Whenever any payment of principal of, or interest on, Eurodollar Loans
shall be due on a day which is not a Eurodollar Business Day, the date for
payment thereof shall be extended to the next succeeding Eurodollar Business
Day unless as a result thereof it would fall in the next calendar month, in
which case it shall be advanced to the next preceding Eurodollar Business Day.
If the date for any payment of principal is extended by operation of law or
otherwise, interest shall be payable for such extended time. In addition to
(and without limitation of) any right of set-off, bankers' lien or
counterclaim, each Bank has the option to offset balances held by it for the
account of the Borrower at any of its offices against any principal of or
interest on any of the Loans hereunder or any other amount payable by the
Borrower hereunder which is not paid when due (regardless of whether such
balances are then due to the Borrower), in which case it shall promptly notify
the Borrower thereof, provided that its failure to give such notice shall not
affect the validity of any offset.
<PAGE>
2.12 Computation of Interest and Fees. The commitment fee, facility fee
and interest on all Loans shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed.
SECTION 3. CONDITIONS OF LENDING
The obligation of the Banks to make each Loan hereunder is subject to the
performance by the Borrower of all its obligations under this Agreement and to
the satisfaction of the following further conditions:
3.1 All Loans. In the case of each Loan, including the initial Loan:
(a) receipt by the Agent of the notice from the Borrower required by
Section 2.2 or Section 2.3(f), as applicable;
(b) no Default or Event of Default shall have occurred and be
continuing;
(c) the representations and warranties contained in this Agreement
shall be true on and as of the date of the Loan with the same force and effect
as if made on and as of such date; and
(d) receipt by the Agent of such other documents, evidence,
materials and information with respect to the matters contemplated hereby as
the Agent or any Bank may reasonably request.
Each notice of borrowing by the Borrower hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Loan as to the
facts specified in (b) and (c) above.
3.2 Initial Loan. In the case of the initial Loan:
(a) receipt by each Bank of duly executed Notes in its favor;
(b) receipt by the Agent of an opinion of counsel to the Borrower and
each Guarantor covering such matters as the Agent or any Bank may reasonably
request, dated the date of such Loan, satisfactory in form and substance to the
Agent and the Banks;
(c) receipt by the Agent of certified copies of the charter and by-
laws of the Borrower and of all corporate action taken by the Borrower to
authorize the execution, delivery, and performance of this Agreement, the
Notes, the Loans hereunder and such other corporate documents and other
papers as the Agent or any Bank may reasonably request;
(d) receipt by the Agent of a certificate of a duly authorized
officer of the Borrower as to the incumbency, and setting forth a specimen
signature, of each of the persons
<PAGE>
(i) who has signed this Agreement on behalf of the Borrower; (ii) who will
sign the Notes on behalf of the Borrower; and (iii) who will, until
replaced by other persons duly authorized for that purpose, act as the
representatives of the Borrower for the purpose of signing documents in
connection with this Agreement and the transactions contemplated hereby;
(e) receipt by the Agent of a certificate of a duly authorized officer
of the Borrower to the effect set forth in Section 3.l (b) and 3.l (c) hereof;
(f) receipt by the Agent of a certificate
of an executive officer of Borrower certifying which Subsidiaries are
Restricted Subsidiaries as of the Closing Date;
(g) receipt by the Agent of certified copies of the charter and by-
laws of Buffalo China, Inc. and Camden Wire Co., Inc. and of all corporate
action taken by each such Guarantor to authorize the written confirmation of
each Guarantee Agreement, and such other corporate documents and other papers
as the Agent or any Bank may reasonably request;
(h) receipt by the Agent of written confirmation executed by Borrower
and each Guarantor confirming that (i) the Guarantee Agreements dated as of
January 21, 1994 remain in full force and effect and guarantee all
obligations of Borrower under this Agreement, and (ii) the Subordination
Agreement dated as of January 21, 1994 remains in full force and effect and
that all indebtedness owed by each Guarantor to Borrower is subordinated to
the prior payment of indebtedness owed to the Banks under this Agreement and
the Guarantee Agreements.
SECTION 4. CHANGE IN CIRCUMSTANCES AFFECTING EURODOLLAR LOANS
4.1 Basis for Determining Interest Rate Inadequate. In the event that (i)
the Agent shall have determined (which determination shall be conclusive and
binding upon the Borrower in the absence of gross negligence or mathematical
error) that by reason of circumstances affecting the interbank Eurodollar
market adequate and reasonable means do not exist for ascertaining the London
Interbank Offered Rate applicable for any Interest Period, or (ii) the Required
Banks determine (which determination shall be conclusive) and notify the Agent
that the relevant rates of interest referred to in the definition of the London
Interbank Offered Rate for any Interest Period are not likely to cover the cost
to such Banks of making or maintaining such type of Loans, the Agent shall
promptly give notice thereof to the Borrower, whereupon until the Agent
notifies the Borrower that the circumstances giving rise to such suspension no
longer exist (a) the obligations of the Banks to make Eurodollar Loans shall be
suspended and (b) the Borrower shall repay in full the then outstanding
principal amount of each Eurodollar Loan together with accrued interest
thereon, on the last day of the then current Interest Period applicable to such
Loan. Unless the Borrower notifies the Agent to the contrary within three
Eurodollar Business Days after receiving a notice from the Agent pursuant to
this Section, the Borrower shall, concurrently with repaying each Eurodollar
Loan of the Bank pursuant to this Section 4.1, borrow a Base Rate Loan in an
equal principal amount.
<PAGE>
4.2 Illegality. If, after the date of this Agreement, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof or compliance by the Banks with any directive of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Bank to make, maintain, or fund its Eurodollar Loans, the Bank shall so notify
the Borrower (with a copy to the Agent). Upon the giving of such notice, the
Bank's obligation to make Eurodollar Loans shall be suspended and the Borrower
shall repay in full the then outstanding principal amount of each Eurodollar
Loan of the Bank, together with accrued interest thereon, on either (a) the
last day of the then current Interest Period applicable to such Eurodollar Loan
if the Bank may lawfully continue to maintain and fund such Eurodollar Loan to
such day or (b) immediately if the Bank may not lawfully continue to fund and
maintain such Eurodollar Loan to such day. Unless the Borrower notifies the
Agent to the contrary within three Eurodollar Business Days after receiving a
notice pursuant to this Section, the Borrower shall, concurrently with repaying
each such Eurodollar Loan, borrow a Base Rate Loan in an equal principal
amount.
4.3 Increased Costs.
(a) If any Regulatory Change:
(i) shall subject the Bank to any tax, duty or other charge with
respect to its obligation to make Eurodollar Loans, its existing Competitive
Bid or Eurodollar Loans, or the Notes, or shall change the basis of taxation of
payments to the Bank of the principal of or interest on its Eurodollar or
Competitive Bid Loans or in respect of any other amounts due under this
Agreement, in respect of its existing Eurodollar or Competitive Bid Loans or
its obligation to make Eurodollar Loans (except for a change in the rate of tax
on the overall net income of the Bank imposed by the jurisdiction in which the
Bank's principal executive office is located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of Governors
of the Federal Reserve System, but excluding any included in an applicable
Reserve Requirements), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by any Bank or
shall impose on any Bank or on the United States market for certificates of
deposit or the London interbank market any other condition affecting its
obligation to make Eurodollar Loans, its existing Competitive Bid Loans or
Eurodollar Loans or the Notes; or
(iii) imposes any other condition affecting this Agreement or
the Notes or Commitment of any Bank; and the result of any of the foregoing is
to increase the cost to or impose a cost on any Bank of making any Eurodollar
Loan or maintaining any Eurodollar Loan or Competitive Bid Loan, or to reduce
the amount of any sum received or receivable by any Bank under this Agreement
or under its Note with respect thereto, by an amount deemed by the Bank to be
material, then, within four days after demand by the Bank (with a copy to
<PAGE>
the Agent), the Borrower agrees to pay to the Bank such additional amount or
amounts as will compensate the Bank for such increased cost or reduction. Each
Bank will promptly notify the Borrower (with a copy to the Agent) of any
event of which it has knowledge, occurring after the date hereof, which will
entitle the Bank to compensation pursuant to this Section 4.3.
(b) Without limiting the effect of the foregoing provisions of this
Section 4.3, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs additional costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
the Bank which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of the Bank which includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if the Bank so elects by
notice to the Borrower (with a copy to the Agent), the obligation of the Bank
to make Loans of such type hereunder shall be suspended until the date such
Regulatory Change ceases to be in effect, and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of such
type, prepay such Loans.
(c) Without limiting the effect of the foregoing provisions of this
Section 4.3 (but without duplication), the Borrower shall pay directly to
each Bank from time to time on request such amounts as such Bank may
determine to be necessary to compensate such Bank for any costs which it
determines are attributable to the maintenance by it or any of its affiliates,
pursuant to any law or regulation of any jurisdiction or any interpretation,
directive or request (whether or not having the force of law) of any court
or governmental or monetary authority, whether in effect on the date of this
Agreement or thereafter, of capital in respect of its Loans hereunder or
its obligation to make Loans hereunder (such compensation to include,
without limitation, an amount equal to any reduction in return on assets or
equity of such Bank to a level below that which it could have achieved
but for such law, regulation, interpretation, directive or request). Each
Bank will notify the Borrower if it is entitled to compensation pursuant to
this Section 4.3(c) as promptly as practicable after it determines to
request such compensation.
(d) A certificate of any Bank claiming compensation under this Section
4.3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Bank may use any reasonable averaging and
attribution methods. If the Bank demands compensation under this Section 4.3,
the Borrower may at any time, upon at least three Eurodollar Business Days'
prior notice to the Bank, prepay in full the then outstanding Eurodollar Loans
or Competitive Bid Loans, as the case may be, together with accrued interest
thereon to the date of prepayment. Unless the Borrower notifies the Bank
to the contrary within three Eurodollar Business Days prior to such
prepayment, the Borrower shall concurrently with prepaying such Loans, borrow a
Base Rate Loan in an equal principal amount.
<PAGE>
4.4 Funding Losses. If the Borrower makes any payment of principal with
respect to any Eurodollar Loan or Competitive Bid Loan on any day other than
the last day of an Interest Period applicable to such Loan, or if the Borrower
fails to borrow or prepay any Eurodollar Loan or Competitive Bid Loan after
appropriate notice or acceptance (as applicable) has been given to the Agent in
accordance with Section 2.2, 2.10 and/or 2.3(f) hereof (as applicable), the
Borrower shall reimburse the Agent (for the benefit of the Banks) on demand for
any reasonable loss, cost or expense incurred by it attributable to such
failure of the Borrower. Without limiting the foregoing, such compensation
shall include an amount equal to the excess, if any, of: (i) the amount of
interest which otherwise would have accrued on the principal amount so paid or
not borrowed for the period from and including the date of such payment or
failure to borrow to but excluding the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, to but excluding the last day of
the Interest Period for such Loan which would have commenced on the date
specified therefor in the relevant notice) at the applicable rate of interest
for such Loan provided for herein; over (ii) the amount of interest (as
reasonably determined by such Bank) such Bank would have bid in the London
interbank market (if such Loan is a Eurodollar Loan) for Dollar deposits for
amounts comparable to such principal amount and maturities comparable to such
period. A determination of any Bank as to the amounts payable pursuant to this
Section 4.4 shall be conclusive absent manifest error.
4.5 Survival. The obligations of the Borrower under this Section 4
shall survive the repayment of the Loans and the termination of the
Commitments.
SECTION 5. REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to each Bank that:
5.1 Corporate Existence and Power. The Borrower and each Restricted
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
corporate power and authority to carry on its business as now being conducted
and to own its properties and is duly licensed or qualified and in good
standing as a foreign corporation in each other jurisdiction in which the
failure to qualify would materially and adversely affect the conduct of its
business.
5.2 Corporate Authorization. The execution, delivery, and performance by
the Borrower of this Agreement and the Notes are within the Borrower's
corporate power, have been duly authorized by all necessary corporate action
and will not contravene, constitute a default under, or require the consent of
another party pursuant to, any provision of law or regulation applicable to the
Borrower or of the certificate of incorporation or by-laws of the Borrower, or
of any judgment, order, decree, agreement or instrument binding on the Borrower
or result in the creation of any Lien upon any of its property or assets not
contemplated or permitted hereunder.
5.3 Binding Effect. This Agreement constitutes, and the Notes when duly
executed on behalf of the Borrower and delivered in accordance with this
Agreement will constitute, the
<PAGE>
valid and binding obligations of the Borrower enforceable in accordance with
their respective terms.
5.4 Financial Statements. The consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at January 28, 1995 and the
related consolidated statements of income and retained earnings and changes in
financial position of the Borrower for the fiscal year then ended, certified by
Coopers & Lybrand, certified public accountants, copies of which have been
delivered to the Bank, fairly present in conformity with generally accepted
accounting principles, the consolidated financial position of the Borrower and
its consolidated Subsidiaries at such date and the consolidated results of
operations for such fiscal year. The unaudited consolidated balance sheet of
the Borrower and its consolidated Subsidiaries as at October 28, 1995 and the
related unaudited consolidated statements of income and retained earnings and
changes in financial position of the Borrower and its consolidated Subsidiaries
for the nine months then ended, copies of which have been delivered to the
Bank, fairly present in accordance with generally accepted accounting
principles, the consolidated financial position of the Borrower and its
consolidated Subsidiaries as at such date and the consolidated results of
operations for such nine month period. No material adverse change has occurred
in the financial position, results of operations or business of the Borrower
and its consolidated Subsidiaries since January 28, 1995.
5.5 Litigation. Except as disclosed in Borrower's audited financial
statements as at January 28, 1995, there are no actions, suits or proceedings
pending against or, to the knowledge of the Borrower, threatened against or
affecting, the Borrower or any Restricted Subsidiary in any court or before or
by any governmental department, agency or instrumentality, which would in the
opinion of the Borrower require disclosure in Borrower's financial statements
and in accordance with generally accepted accounting principles and would
materially and adversely affect the financial condition or business of the
Borrower and its consolidated Subsidiaries taken as a whole or the ability of
the Borrower to perform its obligations under this Agreement or the Notes.
5.6 Taxes. The Borrower has filed (or has obtained extensions of the time
by which it is required to file) all United States Federal income tax returns
and all other material tax returns required to be filed by it and has paid all
taxes shown due on the returns so filed as well as all other taxes, assessments
and governmental charges which have become due, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided.
5.7 Governmental and Other Approvals. No approval, consent or
authorization of or filing or registration with any governmental authority or
body is necessary for the execution, delivery or performance by the Borrower of
this Agreement or the Notes or for the performance by the Borrower of any of
the terms or conditions hereof or thereof, except for such approvals, consents
or authorizations (copies of which have been delivered to the Bank) as have
herein obtained and are in full force and effect.
<PAGE>
5.8 ERISA. The Borrower and each member of the Controlled Group have
fulfilled their obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and are in compliance in all material
respects with the presently applicable provisions of ERISA and the Code and
have not incurred any liability to the PBGC or a Plan under Title IV of ERISA.
Borrower and each member of the Controlled Group have not incurred any
accumulated funding deficiency within the meaning of ERISA.
5.9 Subsidiaries. All of the outstanding capital stock of each
Restricted Subsidiary has been validly issued, is fully paid and nonassessable
and is owned by the Borrower free and clear of all Liens, except for a minority
interest of approximately 7% of the common stock of Buffalo China, Inc. and a
minority interest of 20% of the common stock of Oneida International, Inc.
5.10 Liens. There are no mortgages, liens or security interests on the
assets and properties, real or personal, of Borrower and its Subsidiaries other
than as set forth on Exhibit E.
5.11 Absence of Defaults. Each of the Borrower and any Restricted
Subsidiaries has satisfied all judgments and neither the Borrower nor any of
its Restricted Subsidiaries is in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court, arbitrator or federal,
state, municipal or other governmental authority, commission, board, bureau,
agency or instrumentality, domestic or foreign. Neither Borrower nor any of its
Restricted Subsidiaries is a party to any indenture, loan or credit agreement
or any lease or other agreement or instrument or subject to any charter or
corporate restriction which could have a material adverse effect on the
business, properties, assets, operations or conditions, financial or otherwise,
of the Borrower or any of its Subsidiaries, or the ability of the Borrower to
carry out its obligations under the Notes or this Agreement. Neither the
Borrower nor any of its Restricted Subsidiaries is in default in any respect in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any agreement or instrument material to its business
to which it is a party.
5.12 Environmental Compliance. The Borrower and each Subsidiary (i) is in
compliance in all material respects with all applicable environmental,
transportation, health and safety statutes and regulations, 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 Borrower 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.
SECTION 6. COVENANTS
<PAGE>
So long as any Commitment shall be in effect or any Note is outstanding,
unless compliance shall have been waived in writing by the Agent, with the
consent of the Required Banks, the Borrower agrees that:
6.1 Financial Statements. The Borrower will deliver to each of the Banks:
(a) within 90 days after the end of each fiscal year of the Borrower,
consolidated and consolidating balance sheets of the Borrower and its
consolidated Subsidiaries as at the end of such year, and consolidated and
consolidating statements of income and retained earnings and changes in
financial position of the Borrower and its consolidated Subsidiaries for such
year, setting forth in each case in comparative form corresponding consolidated
and consolidating figures from the preceding fiscal year, all as reported on
by Coopers & Lybrand or other independent certified public accountants of
nationally recognized standing;
(b) within 45 days after the end of each of the first three quarters of
each fiscal year of the Borrower, consolidated and consolidating balance sheets
of the Borrower and its consolidated Subsidiaries as at the end of such
quarter and the related consolidated and consolidating statements of income and
retained earnings and changes in financial position of the Borrower and its
consolidated Subsidiaries for such quarter and for the portion of the
Borrower's fiscal year ended at the end of such quarter as filed with the
Securities and Exchange Commission, all certified (subject to normal year-end
adjustments) as to fairness of presentation, generally accepted accounting
principles and consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the chief
financial officer or the principal accounting officer of the Borrower (i)
setting forth whether the Borrower was in compliance with the requirements of
Section 6 on the date of such financial statements, (ii) stating whether there
exists on the date of such certificate any Default or Event of Default and,
if any Default or Event of Default exists, setting forth the details thereof and
the action which the Borrower is taking or proposes to take with respect
thereto, and (iii) having attached thereto a schedule in reasonable detail
satisfactory to the Banks setting forth the computations necessary to
determine whether the Borrower is in compliance with the financial covenants set
forth in this Section 6;
(d) promptly upon the occurrence of any Default or Event of Default,
a certificate of the chief financial officer or the principal accounting
officer of the Borrower setting forth the details thereof and the action
which the Borrower is taking or proposes to take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
<PAGE>
(f) promptly upon the filing thereof, copies of all registration
statements (other than registration statements relating to securities registered
in connection with an employee benefit plan), annual reports and Form 8-K's or
its equivalent which the Borrower shall have filed with the Securities and
Exchange Commission;
(g) if and when the Borrower or any member of the Controlled Group
gives or is required to give notice to the PBGC of any "reportable event" (as
defined in Section 4043 or ERISA) with respect to any Plan under Title IV of
ERISA, or knows that the plan administrator of any Plan has given or is required
to give notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC;
(h) from time to time such additional information regarding the
financial position or business of the Borrower and its Subsidiaries as the
Bank may reasonably request.
6.2 Current Ratio. The Borrower will at all times maintain Consolidated
Current Assets at not less than 175% of Consolidated Current Liabilities.
6.3 Guaranties. Neither the Borrower nor any Restricted Subsidiary will
become liable for or permit any of its Property to become subject to any
Guaranty except: (a) Guaranties of indebtedness for borrowed money under which
the maximum aggregate principal amount guaranteed can be mathematically
determined at the time of issuance, (b) other Guaranties under which the
maximum aggregate amount guaranteed can be mathematically determined at the
time of issuance and (c) Guaranties of indebtedness owed to the Banks under
this Agreement. Each Guaranty permitted by this Section 6.3 must comply with
the other requirements of Section 6 to the extent the provisions of Section 6
require the amount of the Guaranty to be included in Consolidated Current
Liabilities, Current Debt or Long Term Debt.
6.4 Liens and Encumbrances.
(a) Neither the Borrower 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:
(i) Liens securing the payment of taxes, assessments or
governmental charges or levies or the demands of suppliers, mechanics,
repairmen, workmen, materialmen, carriers, warehousers, landlords and other like
Persons, or similar statutory Liens, provided that (A) they do not in the
aggregate materially reduce the value of any Properties subject to the Liens
or materially interfere with their use in the ordinary conduct of the owning
company's business, (B) all claims which the Liens secure are not delinquent
or are being actively contested in good faith and by appropriate proceedings
and (C) adequate reserves have been established therefor on the books of
the Borrower, if required by generally accepted accounting principles;
<PAGE>
(ii) Liens incurred or deposits made in the ordinary course of
business (A) in connection with worker's compensation, unemployment
insurance, social security and other like laws, or (B) to secure the
performance of letters of credit, bids, tenders, sales contracts, leases,
statutory obligations, surety, appeal and performance bonds and other similar
obligations, in each case not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of Property;
(iii) attachment, judgment and other similar Liens arising in
connection with court proceedings, provided that (A) execution and other
enforcement are effectively stayed, (B) all claims which the Liens secure are
being actively contested in good faith and by appropriate proceedings and (C)
adequate reserves have been established therefor on the books of the Borrower,
if required by generally accepted accounting principles;
(iv) Liens on Property of a Restricted Subsidiary, provided that
they secure only obligations owing between the Borrower and any Restricted
Subsidiary;
(v) Liens existing on the date hereof, which Liens are set
forth on Exhibit E hereto;
(vi) other Liens not otherwise permitted under this Section
6.4(a)(i)-(v) securing Long Term Debt or Current Debt and limited to real
estate, plant, or equipment, provided such Liens secure the purchase price of
such property do not exceed the lesser of the cost or fair market value of such
property, and do not extend to any other asset; and provided, further, that
the aggregate amount of indebtedness secured by such Liens shall not exceed 20%
of Consolidated Adjusted Tangible Net Worth or the amounts permitted under
Section 6.17(b) with respect to indebtedness incurred by one of the
Subsidiaries identified therein: and
(vii) Liens resulting from the extension, refunding,
renewal or replacement of the indebtedness secured by the Liens described in
paragraphs (iv), (v), and (vi) above, up to the amount outstanding under
such indebtedness at the time of such extension, refunding, renewal or
replacement.
(b) In case any Property is subjected to a Lien in violation of
Section 6.4(a), the Borrower will make or cause to be made provision whereby
the Notes will be secured equally and ratably with all other obligations
secured thereby, and in any case the Notes shall have the benefit, to the full
extent that, and with such priority as, the holders may be entitled thereto
under applicable law, of an equitable Lien on such Property securing the Notes.
Such violation of Section 6.4(a) shall constitute an Event of Default whether
or not any such provision is made pursuant to this Section 6.4(b).
6.5 Restricted Payments and Restricted Investments.
<PAGE>
(a) Neither the Borrower nor any Restricted Subsidiary will declare,
make or incur any liability to make, any Restricted Payment or make or
authorize any Restricted Investment or purchase or otherwise acquire any
Restricted Investment if, immediately after giving effect to the Restricted
Payment or Restricted Investment, the sum of such Restricted Payments and the
amount of Restricted Investments (valued immediately after such action) made
after the date hereof would exceed the sum of $13,000,000 plus 20% of
Consolidated Adjusted Net Income accumulated after January 27, 1996.
(b) Notwithstanding anything in Section 6.5(a) to the contrary, (i)
the aggregate amount of loans and advances by Borrower to, and accounts
receivable of Borrower from, any Guarantor shall not exceed (A) $10,000,000 in
the case of Buffalo China, Inc., (B) $20,000,000 in the case of Camden Wire
Co., Inc., and (C) the maximum amount of the Guarantee Agreement in the case of
any other Guarantor, and (ii) Borrower shall not make or permit to exist any
loans or advances by Borrower to, or accounts receivable of Borrower from,
Kenwood Silver Company, Inc., except for accounts receivable consisting of
accrued management fees owed by Kenwood Silver Company, Inc. to Borrower for
management services rendered by Borrower in the ordinary course of business and
in a manner consistent with past practice.
6.6 Restricted Dividends. Neither the Borrower nor any Restricted
Subsidiary will declare, make, pay, or incur any liability for any Restricted
Dividend other than (a) a Restricted Dividend paid to Borrower by a Restricted
Subsidiary, and (b) Restricted Dividends which do not exceed the sum of
$8,000,000 plus 50% of Consolidated Adjusted Net Income accumulated subsequent
to January 27, 1996.
6.7 Merger and Consolidation. Neither the Borrower nor any Restricted
Subsidiary will be a party to any merger or consolidation (except that a
Restricted Subsidiary may merge into or consolidate with the Borrower or
another Restricted Subsidiary) provided that the Borrower may merge or
consolidate with another corporation if (a) the surviving or acquiring
corporation (i) is organized under the laws of the United States or a
jurisdiction thereof, (ii) expressly assumes the covenants and obligations in
the Notes and this Agreement, (iii) is solvent, and (iv) would not, immediately
after giving effect to the transaction, be in default under any of the terms of
the Notes or this Agreement, and (b) no Default shall have occurred, including,
without limitation, a Default of the nature described in Section 7(h) hereof.
6.8 Transactions with Affiliates: Restricted Subsidiaries.
(a) Neither the Borrower nor any Restricted Subsidiary will enter into
any transaction (including the purchase, sale or exchange of Property or the
rendering of any service) with any Affiliate except upon fair and reasonable
terms which are at least as favorable to the Borrower or the Restricted
Subsidiary as would be obtained in a comparable arm's-length transaction with a
non-Affiliate.
<PAGE>
(b) The Borrower may from time to time cause any Subsidiary to be
designated as a Restricted Subsidiary (provided the Subsidiary satisfies the
requirements set forth in the definition of Restricted Subsidiary) or any
Restricted Subsidiary to be designated an Unrestricted Subsidiary; provided,
however, that neither Buffalo China, Inc. nor Camden Wire Co., Inc. may be
designated an Unrestricted Subsidiary; and provided further that immediately
following such action and after giving effect thereto, (A) no Event of Default
would exist under the terms of the Notes or this Agreement, (B) the Borrower
and its Restricted Subsidiaries would be in compliance with all of the covenants
set forth in this Section 6 if tested on the date of such action, and (C) any
Restricted Subsidiary which is designated an Unrestricted Subsidiary has no
interest in any other Restricted Subsidiary or the Borrower and has no
indebtedness for borrowed money from the Borrower or any Restricted Subsidiary,
and provided, further, that once a Restricted Subsidiary has been designated
an Unrestricted Subsidiary, it shall not thereafter be redesignated as a
Restricted Subsidiary. Within ten (10) days following any designation
described above, the Borrower will deliver to you a notice of such designation
accompanied by a certificate signed by a principal financial officer of the
Borrower certifying compliance with all requirements of this Section 6.8(b) and
setting forth all information required in order to establish such compliance.
6.9 Sale of Property and Subsidiary Stock. Neither the Borrower nor any
Restricted Subsidiary will (a) sell, lease, transfer or otherwise dispose of
any of its Property (other than to the Borrower and other than in a
transaction permitted by Section 6.7) or (b) sell or otherwise dispose of any
shares of the stock (or any options or warrants to purchase stock or Securities
exchangeable for or convertible into stock) of a Restricted Subsidiary (said
stock, options, warrants and other Securities herein called "Subsidiary
Stock"), nor will any Restricted Subsidiary issue, sell or otherwise dispose of
any shares of its own Subsidiary Stock, if the effect would be to reduce the
direct or indirect proportionate interest of the Borrower and its other
Restricted Subsidiaries in the outstanding Subsidiary Stock of the Restricted
Subsidiary whose shares are the subject of the transaction; provided, however,
that these restrictions do not apply to:
(a) the issue of directors' qualifying shares; or
(b) the transfer of Property (other than Subsidiary Stock) in the
ordinary course of business; or
(c) the transfer of Property (including up to, but not more than, 15%
of the outstanding Subsidiary Stock of any Subsidiary) during any fiscal
year to any Person if (A) such Property (valued at the greater of book or fair
market value at the time of disposition thereof) does not, together with
Property of the Company and all other Restricted Subsidiaries previously
disposed of during such fiscal year (other than in the ordinary course of
business and other than to the Borrower and other than in a transaction
permitted by Section 6.7), constitute 10% or more of Consolidated Adjusted
Tangible Assets determined as of the beginning of such fiscal year; (B) the
sum of the portions of Consolidated Adjusted Net Income which were contributed
during the immediately preceding four fiscal quarters by
<PAGE>
(1) such Property, (2) each Restricted Subsidiary which has been disposed of
since the beginning of such four fiscal quarters (other than to the Borrower
and other than in a transaction permitted by Section 6.7), and (3) other
Property of the Borrower and all Restricted Subsidiaries disposed of since
the beginning of such four fiscal quarters (other than in the ordinary
course of business and other than to the Borrower and other than in a
transaction permitted by Section 6.7), do not constitute more than 10% of
Consolidated Adjusted Net Income for any such four fiscal quarters; and
(C) the amount of Subsidiary Stock transferred, when added to Subsidiary
Stock previously transferred, does not exceed 15% of the outstanding
Subsidiary Stock of any Subsidiary. For purposes of determining Borrower's
compliance with this subsection (c) in the event of a sale of up to 15% of
the Subsidiary Stock of a Subsidiary, the Property transferred shall be
deemed to be the Adjusted Tangible Assets of such Subsidiary multiplied by
the percentage of Subsidiary Stock transferred.
6.10 Net Worth. At the end of each of its fiscal quarters, Borrower will
maintain Consolidated Adjusted Tangible Net Worth of not less than the sum of
$80,000,000 plus 30% of Consolidated Adjusted Net Income accumulated after
January 28, 1995. The minimum Consolidated Adjusted Tangible Net Worth
requirement set forth in this Section shall be unaffected by and shall not be
reduced as a result of losses, if any, sustained by the Borrower or its
consolidated Subsidiaries after January 28, 1995.
6.11 Interest Coverage Ratio. For the period of four consecutive fiscal
quarters immediately prior to the execution of this Agreement and for each
period of four consecutive fiscal quarters while any Note is outstanding, the
Borrower will maintain Consolidated Income Available for Interest Charges at
not less than 200% of Consolidated Interest Charges.
6.12 Payment of Taxes and Claims. The Borrower and each Restricted
Subsidiary will pay, before they become delinquent,
(a) all taxes, assessments and governmental charges or levies
imposed upon it or its Property, and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons which, if unpaid, might result
in the creation of a Lien upon its Property, provided that the items enumerated
in Subparagraphs (a) and (b) above need not be paid while being contested in
good faith and by appropriate proceedings and provided further that adequate
book reserves have been established with respect thereto, if required by
generally accepted accounting principles, and provided further that the owing
company's title to, and its right to use, its Property is not materially
adversely affected thereby.
6.13 Maintenance of Properties and Corporate Existence. The Borrower
and each Restricted Subsidiary will:
<PAGE>
(a) Property--maintain its Property in good condition and make all
necessary renewals, replacements, additions, betterments and improvements
thereto;
(b) Insurance--maintain, with financially sound and reputable insurers,
insurance with respect to its Property and business against such casualties
and contingencies, of such types (including public liability, larceny,
embezzlement or other criminal misappropriation insurance) and in such
amounts as is customary in the case of corporations of established reputations
engaged in the same or a similar business and similarly situated;
(c) Financial Records--keep true books of records and accounts in
which full and correct entries will be made of all its business transactions,
and will reflect in its financial statements adequate accruals and
appropriations to reserves, all in accordance with generally accepted
accounting principles;
(d) Corporate Existence and Rights--do or cause to be done all things
necessary (i) to preserve and keep in full force and effect its existence,
rights and franchises and (ii) to maintain each Restricted Subsidiary as a
Restricted Subsidiary, except as otherwise permitted by Sections 6.7, 6.8 and
6.9; and
(e) Compliance with Law--not be in violation of any laws,
ordinances, or governmental rules and regulations to which it is subject and
will not fail to obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its Properties or to the conduct
of its business, which violation or failure to obtain might materially
adversely affect the business, prospects, profits, Properties or condition
(financial or otherwise) of the Borrower and its Subsidiaries as a whole
6.14 Payment of Notes and Maintenance of Office. The Borrower will
punctually pay or cause to be paid the principal and interest (and premium, if
any) to become due in respect of the Notes according to the terms thereof and
will maintain an office in the State of New York where notices, presentations,
and demands in respect of this Agreement or the Notes may be made upon it. Such
office shall be maintained at Oneida, New York until such time as the Borrower
shall so notify the holder(s) of the Notes of any change of the location of
such office within such State.
6.15 ERISA Compliance.
(a) Neither the Borrower nor any Restricted Subsidiary will at any time
fail to comply with the minimum funding standards of Title I, Part 3 of ERISA
or Section 412 of the Code.
(b) All assumptions and methods used to determine the actuarial
valuation of vested employee benefits under Pension Plans and the present
value of assets of Pension Plans shall be reasonable in the good faith
judgment of the Borrower and shall comply with all requirements of law.
<PAGE>
(c) Neither the Borrower nor any Restricted Subsidiary will at any
time permit any Pension Plan maintained by it to:
(i) engage in any "prohibited transaction", as such term is
defined in Section 4975 of the Code;
(ii) incur any "accumulated funding deficiency", as such term is
defined in Section 302 of ERISA, whether or not waived; or
(iii) be terminated in a manner which could result in the
imposition of a Lien on the Property of the Borrower or any Restricted
Subsidiary pursuant to Section 4068 of ERISA.
6.16 Use of Proceeds. The Borrower shall use the proceeds of the Loans
made hereunder for the general corporate purposes of the Borrower and its
Subsidiaries, provided that no proceeds shall be used to purchase margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System. Proceeds of Loans in an amount not to exceed $15,000,000 in the
aggregate may be used to make Restricted Investments provided that any
Restricted Investment complies with Section 6.5 hereof.
6.17 Limitations on Debt.
(a) The ratio of Total Funded Debt of the Borrower and its Restricted
Subsidiaries to Consolidated Adjusted Tangible Net Worth shall not exceed 1.35
as of the end of any fiscal quarter.
(b) Borrower shall not permit Buffalo China, Inc. to incur Total
Funded Debt in excess of $5,000,000 and Camden Wire Co., Inc. to incur Total
Funded Debt in excess of $11,500,000, except for Total Funded Debt payable to
the Borrower and permitted by Section 6.5. Borrower shall not permit any
other Guarantor to incur Total Funded Debt (except Total Funded Debt payable to
the Borrower and permitted by Section 6.5) in excess of an amount agreed to
by Borrower and the Banks at the time the Guarantee Agreement of such
other Guarantor is delivered, which amount shall be determined on a basis
consistent with the limitations set forth in this Section 6.17(b) with respect
to Buffalo China, Inc. and Camden Wire Co., Inc.
(c) Borrower shall not permit Kenwood Silver Company, Inc. to incur
any Total Funded Debt.
6.18 Guarantors. The Borrower will cause each Restricted Subsidiary
acquired or formed after the date of this Agreement to execute and deliver to
each Bank a Guarantee Agreement if the assets of such Restricted Subsidiary at
any time account for 5% or more of the Consolidated Adjusted Tangible Assets of
Borrower and its Subsidiaries.
<PAGE>
6.19 Compliance with Laws. Borrower shall comply, and cause each of its
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders. In furtherance, but not in limitation, of such
obligation, Borrower shall:
(a) comply in all material respects with all Environmental Laws;
(b) notify the Banks immediately of any notice of a hazardous discharge
or environmental complaint received from any governmental agency or any other
party if there exists the reasonable likelihood of a material loss or
liability or the reasonable likelihood of the suspension of business operations;
(c) in the event of any hazardous discharge from or affecting any of
the premises of either Borrower or any of its Subsidiaries which has a
reasonable likelihood of resulting in a material loss or liability or a material
suspension of business operations, (i) notify the Banks immediately thereof,
(ii) promptly contain and remove the same in the manner required by law,
(iii) promptly pay any fine or penalty assessed in connection therewith unless
being contested in good faith by proper proceedings, (iv) at the request
of any Bank, permit the Bank to inspect all books, correspondence and records
pertaining thereto, (v) at the Borrower's expense, provide a report of a
qualified environmental engineer reasonably acceptable to the Agent with
sufficient information to enable the Agent to determine the Borrower's
liability for remediation and response costs, damages, fines and other costs
and expenses arising out of the hazardous discharge, to the extent such
liability can reasonably be quantified by the engineer, and (vi) provide such
other and further assurances reasonably satisfactory to each Bank that the
condition has been corrected.
6.20 Change in Business. Neither the Borrower nor any Restricted
Subsidiary (whether now existing or hereafter acquired or organized) will
engage in any business if, after giving effect thereto, less than 80% of the
Consolidated Adjusted Tangible Assets of the Borrower at the most recently
ended fiscal quarter would be attributable to the current business of the
Borrower and its Restricted Subsidiaries taken as a whole, including, but not
limited to, the manufacturing, advertising, sales and distribution of
industrial wire, household and foodservice products and related business.
SECTION 7. EVENTS OF DEFAULT
If any one or more of the following events ("Events of Default") shall
have occurred and be continuing:
(a) the Borrower shall fail to pay any principal of or interest on
any Loan, or any fee payable hereunder or under any document executed in
connection herewith, within three days of when due; or
(b) any representation or warranty made by the Borrower herein or in
any instrument or document delivered pursuant hereto shall prove to be incorrect
or misleading in any material respect upon the date when made; or
<PAGE>
(c) Borrower shall (i) be in default of or fail to perform any term,
covenant or agreement contained in Sections 6.1, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8,
6.9, 6.13(d), 6.14 or 6.16; or (ii) be in default of or fail to perform any
other term, covenant or agreement contained herein and such failure shall
continue uncured for a period of 30 days; or
(d) the Borrower or any Restricted Subsidiary shall (i) fail to
pay any aggregate indebtedness exceeding $1,000,000 (other than the Notes)
when due or interest thereon and such failure shall continue for more than any
applicable period of grace with respect thereto or (ii) fail to observe or
perform any term, covenant, or agreement contained in any agreement or
instrument (other than this Agreement or the Notes) by which it is bound
evidencing or securing or relating to any aggregate indebtedness exceeding
$1,000,000 and such failure continues for more than any applicable period of
grace with respect thereto, if the effect thereof is to permit (or, with the
giving of notice or lapse of time or both, would permit) the holder or
holders thereof or of any obligations issued thereunder or a trustee or
trustees acting on behalf of such holder or holders to cause acceleration
of the maturity thereof or of any such indebtedness; or
(e) the Borrower or any Restricted Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency, or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall take any
corporate action to authorize any of the foregoing; or
(f) an involuntary case or other proceeding shall be commenced against
the Borrower or any Restricted Subsidiary seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or similar law now or hereafter in effect or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary case or other
proceeding is not controverted by Borrower within 10 days and is not
dismissed within 60 days; or an order for relief shall be entered against
the Borrower or any Restricted Subsidiary under the federal bankruptcy laws as
now or hereafter in effect; or
(g) the Borrower or any member of the Controlled Group shall fail
to pay when due any amount which it shall have become liable to pay to the
PBGC or to a Plan or Plans or notice of intent to terminate a Plan or Plans
having aggregate unfunded vested liabilities shall be filed under Title IV of
ERISA by the Borrower or any member of the Controlled Group, any plan
administrator or any combination of the foregoing, or the PBGC shall institute
proceedings under Tile IV of ERISA to terminate or to cause a trustee to be
appointed to administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce Section 515 of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter, or a condition shall exist by reason
<PAGE>
of which the PBGC would be entitled to obtain a decree adjudicating that any
such Plan or Plans must be terminated;
(h) any Person or two or more Persons acting in concert (other
than the Borrower, any Subsidiary of the Borrower, any employee benefit plan
maintained by the Borrower or any of its Subsidiaries, or any trustee or
fiduciary with respect to such plan acting in such capacity) (i) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of securities of the Borrower (or other
securities convertible into such securities) representing 20% or more of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors, other than securities having such power only by reason
of the happening of a contingency; or (ii) shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement which upon
consummation will result in its or their acquisition of, control over
securities of the Borrower (or other securities convertible into such
securities) representing 20% or more of the combined voting power of all
securities of the Borrower entitled to vote in the election of directors, other
than securities having such power only by reason of the happening of a
contingency;
(i) any representation or warranty made by a Guarantor in any
Guarantee Agreement shall prove to be incorrect or misleading in any
material respect upon the date when made; or
(j) any Guarantor shall be in default or fail to perform any term,
covenant or agreement contained in any Guarantee Agreement and such failure
shall continue uncured for a period of 30 days; then, and in every such
event, (1) in the case of any of the Events of Default specified in paragraph
(e) or (f) above, the Commitments shall thereupon automatically be
terminated and the principal of and accrued interest on each Note and all
other sums payable under this Agreement shall automatically become due and
payable without presentment, demand, protest, or other notice or formality
of any kind, all of which are hereby expressly waived, and (2) in the case of
any other Event of Default specified above, the Agent shall, upon request
of the Required Banks, by notice in writing to the Borrower, terminate the
Commitments hereunder, if still in existence, and, by notice in writing to the
Borrower, declare the principal amount then outstanding of and the accrued
interest on the Loans and all other amounts payable by the Borrower hereunder
and under the Notes to be and the same shall thereupon forthwith become, due
and payable without presentment, demand, protest, or other notice or formality
of any kind, all of which are hereby expressly waived.
SECTION 8. THE AGENT: RELATIONS AMONG BANKS AND BORROWER.
8.1 Appointment. Powers and Immunities of Agent. Each Bank hereby
irrevocably (but subject to removal by the Required Banks pursuant to Section
8.9) appoints and authorizes the Agent to act as its agent hereunder with such
powers as are specifically delegated to the Agent by the terms of this
Agreement, together with such other powers as
<PAGE>
are reasonably incidental thereto. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement, and
shall not by reason of this Agreement be a trustee for any Bank. The Agent
shall not be responsible to the Banks for any recitals, statements,
representations or warranties made by the Borrower or any officer or
official of the Borrower or any other Person contained in this Agreement,
or in any certificate or other document or instrument referred to or
provided for in, or received by any of them under,
this Agreement, or for the value, legality, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
document or instrument referred to or provided for herein or therein, for the
perfection or priority of any collateral security for the Loans or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder. The Agent may employ agents and attorneys-in-fact, and the Agent
shall not be responsible, except as to money or securities received by it or
its authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor
any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder
or in connection herewith, except for its or their own gross negligence or
willful misconduct.
8.2 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Bank as the holder of the Loans made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Bank shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Bank. As to any matters not expressly provided
for by this Agreement, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Banks, and such instructions of the Required Banks and
any action taken or failure to act pursuant thereto shall be binding on all of
the Banks and any other holder of all or any portion of any Loan.
8.3 Defaults. The Agent shall not be deemed to have knowledge of the
occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on the Loans to the extent the same is required to be
paid to the Agent for the account of the Banks) unless the Agent has received
notice from a Bank or the Borrower specifying such Default or Event of Default
and stating that such notice is a "Notice of Default." In the event that the
Agent receives such a notice of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Banks (and shall
give each Bank prompt notice of each such non-payment). The Agent shall
(subject to Section 8.8) take such action with respect to such Default or Event
of Default which is continuing as shall be directed by the Required Banks;
provided that, unless and until the Agent shall have received such directions,
the Agent may take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interest of the Banks;
<PAGE>
and provided further that the Agent shall not be required to take any such
action which it determines to be contrary to law.
8.4 Rights of Agent as a Bank. With respect to its Commitment and the
Loans made by it, the Agent in its capacity as a Bank hereunder shall have the
same rights and powers hereunder as any other Bank and may exercise the same
as though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its capacity
as a Bank. The Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to (on a secured or unsecured
basis) and generally engage in any kind of banking, trust or other business
with the Borrower (and any of its Affiliates) as if it were not acting as the
Agent, and the Agent may accept fees and other consideration from the Borrower
for services in connection with this Agreement or otherwise without having to
account for the same to the Banks. The Agent shall have no duty to disclose
to the Banks, information about the Borrower and its Affiliates obtained
by the Agent or its Affiliates in connection with such relationships with the
Borrower.
8.5 Indemnification of Agent. The Banks agree to indemnify the Agent
(to the extent not reimbursed under Section 9.4 but without limiting the
obligations of Borrower under Section 9.4) ratably in accordance with the
aggregate unpaid principal amount of the Loans made by the Banks (without
giving effect to any participations, in all or any portion of such Loans, sold
by them to any other Person) (or, if no Loans are at the time outstanding,
ratably in accordance with their respective Commitments), for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in any way
relating to or arising out of this Agreement, or any other documents
contemplated by or referred to herein or the transactions contemplated hereby
or thereby (including, without limitation, the costs and expenses which the
Borrower is obligated to pay under Section 9.4 but excluding, unless a Default
or Event of Default has occurred, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents or
instruments; provided that no Bank shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified.
8.6 Documents. The Agent will forward to each Bank, promptly after the
Agent's receipt thereof, a copy of each report, notice or other document
required by this Agreement to be delivered to the Agent for such Bank.
8.7 Non-Reliance on Agent and Other Banks. Each Bank agrees that it has,
independently and without reliance on the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and its Subsidiaries and decision to enter into
this Agreement and that it will, independently and without reliance upon the
Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. The Agent shall
<PAGE>
not be required to keep itself informed as to the performance or observance by
the Borrower of this Agreement or any other document referred to or provided
for herein or to inspect the properties or books of the Borrower or any
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of the Borrower or any Subsidiary (or any of their affiliates) which
may come into the possession of the Agent or any of its Affiliates. The Agent
shall not be required to file this Agreement or any document or instrument
referred to herein or therein, for record or give notice of this Agreement or
any document or instrument referred to herein or therein, to anyone.
8.8 Failure of Agent to Act. Except for action expressly required of the
Agent hereunder, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 8.5 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
8.9 Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving written notice thereof to the Banks and the Borrower, and the
Agent may be removed at any time with or without cause by the Required Banks;
provided that the Borrower and the other Banks shall be promptly notified
thereof. Upon any such resignation or removal, the Required Banks, with the
consent of the Borrower (which shall not be unreasonably withheld), shall have
the right to appoint a successor Agent. If no successor Agent shall have been
so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or
the Required Banks' removal of the retiring Agent, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a bank which
has an office in New York State and which shall perform its duties as successor
Agent from an office located in New York State. The Required Banks or the
retiring Agent, as the case may be, shall upon the appointment of a successor
Agent promptly so notify the Borrower and the other Banks. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation or removal as Agent, the provisions of this Article 8 shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Agent.
8.10 Amendments Concerning Agency Function. The Agent shall not be bound by
any waiver, amendment, supplement or modification of this Agreement which
affects its duties hereunder unless it shall have given its prior consent
thereto.
<PAGE>
8.11 Liability of Agent. The Agent shall not have any liabilities or
responsibilities to the Borrower on account of the failure of any Bank to
perform its obligations hereunder or to any Bank on account of the failure of
the Borrower to perform its obligations hereunder.
8.12 Transfer of Agency Function. Without the consent of the Borrower
or any Bank, the Agent may at any time or from time to time transfer its
functions as Agent hereunder to any of its offices located in the
continental United States, provided that the Agent shall promptly notify the
Borrower and the Banks thereof.
8.13 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Bank or the Borrower (either one as appropriate being the
"Payor") prior to the date on which such Bank is to make payment hereunder to
the Agent of the proceeds of a Loan or the Borrower is to make payment to the
Agent, as the case may be (either such payment being a "Required Payment"),
which notice shall be effective upon receipt, that the Payor does not intend to
make the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, the recipient of such payment (and, if such recipient is the Borrower
and the Payor Bank fails to pay the amount thereof to the Agent forthwith upon
demand, the Borrower) shall, on demand, repay to the Agent the amount made
available to it together with interest thereon for the period from the date
such amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to the average daily Federal
Funds Rate for such period.
8.14 Withholding Taxes. Each Bank represents that it is entitled to receive
any payments to be made to it hereunder without the withholding of any tax and
will furnish to the Agent such forms, certifications, statements and other
documents as the Agent may request from time to time to evidence such Bank's
exemption from the withholding of any tax imposed by any jurisdiction or to
enable the Agent to comply with any applicable laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Bank is not
created or organized under the laws of the United States of America or any
state thereof, in the event that the payment of interest by the Borrower is
treated for U.S. income tax purposes as derived in whole or in part from
sources from within the U.S., such Bank will furnish to the Agent Form 4224 or
Form 1001 of the Internal Revenue Service, or such other forms, certifications,
statements or documents, duly executed and completed by such Bank as evidence
of such Bank's exemption from the withholding of U.S. tax with respect thereto.
The Agent shall not be obligated to make any payments hereunder to such Bank in
respect of any Loan or such Bank's Commitment until such Bank shall have
furnished to the Agent the requested form, certification, statement or
document.
8.15 Several Obligations and Rights of Banks. The failure of any Bank to
make any Loan to be made by it on the date specified therefor shall not relieve
any other Bank of its obligation to make its Loan on such date, but no Bank
shall be responsible for the failure of any other Bank to make a Loan to be
made by such other Bank, provided that each Competitive Bid Loan made by a Bank
shall be for the sole account of such Bank, and none
<PAGE>
of the other Banks shall have any obligation with respect thereto. The amounts
payable at any time hereunder to each Bank shall be a separate and independent
debt, and each Bank shall be entitled to protect and enforce its rights
arising out of this Agreement and it shall not be necessary for any other
Bank to be joined as an additional party in any proceeding for such purpose.
8.16 Pro Rata Treatment of Loans Etc. Except to the extent
otherwise provided: (a) each borrowing of Loans under Section 2.1 shall be made
from the Banks, each reduction or termination of the amount of the Commitments
under Section 2.8 shall be applied to the Commitments of the Banks, and each
payment of commitment fee accruing under Section 2.7(a) shall be made for the
account of the Banks, pro rata according to the amounts of their respective
unused Commitments; (b) each prepayment and payment of principal of or interest
on Loans of a particular type and a particular Interest Period shall be made to
the Agent for the account of the Banks holding Loans of such type and Interest
Period pro rata in accordance with the respective unpaid principal amounts of
such Loans of such Interest Period held by such Banks; and (c) each payment of
facility fee accruing under Section 2.7(b) shall be made for the account of the
Banks, pro rata according to the amounts of their Commitments.
8.17 Sharing of Payments Among Banks.
(a) The Borrower agrees that, in addition to (and without limitation
of) any right of set-off, bankers lien or counterclaim a Bank may otherwise
have, each Bank shall be entitled, at its option, to offset balances held by
it for account of the Borrower at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of such Bank's
Loans, or any other amount payable to such Bank hereunder, which is not paid
when due (regardless of whether such balances are then due to the Borrower),
in which case it shall promptly notify the Borrower and the Agent thereof,
provided that such Bank's failure to give such notice shall not affect the
validity thereof.
(b) If any Bank obtains payment of any principal of or interest on any
Loan (other than a Competitive Bid Loan) made by it to the Borrower under this
Agreement through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise (including any payment obtained from
or charged against a third party), and, as a result of such payment, such Bank
shall have received a greater percentage of the principal or interest then
due hereunder by the Borrower to such Bank in respect of Loans than the
percentage received by any other Banks, it shall promptly purchase from such
other Banks participations in (or, if and to the extent specified by such
Bank, direct interests in) the Loans (other than Competitive Bid Loans) made
by such other Banks (or in interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Banks shall share the benefit of such
excess payment (net of any expenses which may be incurred by such Bank in
obtaining or preserving such excess payment) pro rata in accordance with
the unpaid principal and/or interest on the Loans held by each of the Banks.
To such end all the Banks shall make appropriate adjustments
<PAGE>
among themselves (by the resale of participations sold or otherwise) if such
payment is rescinded or must otherwise be restored.
(c) The Borrower agrees that any Bank so purchasing a participation
(or direct interest) in the Loans (other than Competitive Bid Loans) made
by other Banks (or in interest due thereon, as the case may be) may exercise
all rights of set-off, bankers lien, counterclaim or similar rights with
respect to such participation as fully as if such Bank were a direct holder of
Loans in the amount of such participation.
(d) Nothing contained herein shall require any Bank to exercise any
such right or shall affect the right of any Bank to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness
(including, without limitation, Competitive Bid Loans) or obligation of the
Borrower.
(e) If under any applicable bankruptcy, insolvency or other similar
law, any Bank receives a secured claim in lieu of a set-off to which this
Section 8.17 applies, such Bank shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Banks entitled under this Section 8.17 to share in the benefits
of any recovery on such secured claim.
SECTION 9. MISCELLANEOUS
9.1 Notices. All notices and other communications provided for herein
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made by telecopy with receipt confirmed
or in writing (or, with respect to notices of borrowing given pursuant to
Sections 2.2 and 2.3 hereof, by telephone, confirmed in writing by telecopy or
mail by the close of business on the day the notice is given) and telecopied,
mailed or delivered (or telephoned, as the case may be) to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof; or, as to any party, at such other address as shall be designated
by such party in a notice to each other party. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly
given when transmitted by telecopier or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
9.2 Amendments and Waivers: Cumulative Remedies
(a) Except as otherwise expressly provided in this Agreement, any
provision of this Agreement may be amended, waived or modified only by an
instrument in writing signed by the Borrower, the Required Banks, and (for
matters affecting the Agent in its capacity as Agent) the Agent, or by the
Borrower and the Agent acting with the consent of the Required Banks, provided
however that no amendment, modification or waiver shall, unless by an
instrument signed by all of the Banks or by the Agent acting with the consent
of all of the Banks: (i) increase or extend the term, or extend the time or
waive any requirement for the reduction or termination of the
Commitments, (ii) extend the date fixed for the payment of principal of or
interest on any Loan, (iii) reduce the amount of any payment of
<PAGE>
principal thereof or the rate at which interest is payable thereon or any fee
which is payable hereunder, (iv) alter the terms of this Section 9.2(a) (v)
amend the definition of the term "Required Banks"; or (vii) waive any of the
conditions precedent set forth in Section 3 hereof; and provided, further,
that any amendment of Section 8 hereof shall require the consent of the Agent.
(b) No failure or delay on the part of any Bank in exercising any
right, power or privilege under this Agreement or any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement or the Notes preclude any other or further
exercise thereof or the exercise of any right, power or privilege. The
rights and remedies provided in and contemplated by this Agreement and the
Notes are cumulative and not exclusive of any rights or remedies provided by
law.
9.3 Assignments and Participations.
(a) The Borrower may not assign its rights or obligations hereunder
or under the Notes without the prior consent of all of the Banks and the Agent.
(b) No Bank may assign any of its Loans, its Notes or its Commitment
without the prior consent of the Agent and the Borrower, such consents not to
be unreasonably withheld or delayed. Any such assignment shall be in a minimum
principal amount of $5,000,000. Upon written notice to the Borrower and the
Agent of an assignment (which notice shall identify the assignee Bank, the
amount of the assigning Bank's Commitment, Loans and Notes assigned in detail
reasonably satisfactory to the Agent) and upon the effectiveness of any
assignment consented to by the Agent, the assignee shall have, to the extent of
such assignment (unless otherwise provided in such assignment with the consent
of the Agent), the obligations, rights and benefits of a Bank hereunder holding
the Commitment, Loans and Notes (or portions thereof) assigned to it (in
addition to the Commitment, Loans and Notes, if any, theretofore held by such
assignee) and the assigning Bank shall, to the extent of such assignment, be
released from the Commitment (or portions thereof) so assigned. Upon making an
assignment, the assigning Bank shall pay a $2,500 assignment fee to the Agent.
(c) A Bank may sell to one or more other Persons a participation in
all or any part of any Loan and Commitment held by it, but each such
participant shall not have any rights or benefits under this Agreement or any
Note (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement (the "Participation
Agreement") executed by such Bank in favor of the participant). All amounts
payable by the Borrower to any Bank under Section 4 hereof shall be determined
as if such Bank had not sold any participations in such Loan and as if such
Bank were funding all of such Loan in the same way that it is funding the
portion of such Loan in which no participations have been sold.
(d) A Bank may furnish any information concerning the Borrower or
its Subsidiaries in the possession of such Bank from time to time to assignees
and participants
<PAGE>
(including prospective assignees and participants), provided that each
assignee or participant (or prospective assignee or participant) agrees to
maintain the confidentiality of non-public, confidential information received
from a Bank except for disclosures to officers, employees, auditors and
counsel and disclosures required by law or pursuant to judicial process.
(e) In addition to the assignments and participations permitted
above, any Bank may assign and pledge all or any portion of its Loans and
Note to (i) any Affiliate of such Bank, or (ii) any Federal Reserve Bank as
collateral security pursuant to Regulation A of the Board of Governors of
the Federal Reserve System and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Bank from its
obligations hereunder.
9.4 Expenses: Documentary Taxes. The Borrower shall pay on demand all out-
of-pocket expenses of the Banks and the Agent in connection with the
preparation and administration of this Agreement, the Notes, the Guarantee
Agreements and any waiver or amendment of any provision hereof or thereof
(including fees and disbursements of counsel) and if there is an Event of
Default, all out-of-pocket expenses incurred by the Agent or any Bank
(including fees and disbursements of counsel) in connection with such Event of
Default and collection and other enforcement proceedings resulting therefrom.
The Borrower agrees to indemnify the Agent and each Bank and their respective
directors, officers, employees and agents from and hold them harmless against
(a) any documentary taxes, assessments or charges made by any governmental
authority by reason of the execution and delivery of this Agreement or the
Notes and (b) any losses, liabilities, claims, damages or expenses incurred by
any of them arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation)
relating to the financing contemplated by this Agreement or the actual or
proposed use by the Borrower of the proceeds of the Loans (whether or not the
transaction contemplated is actually completed or the loan documentation is
signed), including without limitation, the reasonable fees and disbursements of
counsel incurred in connection therewith (but excluding any loss, liability,
claim, damage, or expense incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
9.5 Counterparts. This Agreement may be signed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument.
9.6 Headings. The section and subsection headings used herein have been
inserted for convenience of reference only and do not constitute matters to be
considered in interpreting this Agreement.
9.7 Governing Law. This Agreement and the Notes shall be construed in
accordance with and governed by the law of the State of New York.
9.8 Jurisdiction. The Borrower hereby irrevocably submits to the
jurisdiction of any state or federal court sitting in Onondaga County, New York
with respect to any action or proceeding arising out of or relating to this
Agreement and hereby irrevocably agrees that all
<PAGE>
claims in respect of such action or proceeding shall be heard and
determined in such state or federal court. The Borrower irrevocably consents
to the service of any and all process in any such action or proceeding by
mailing copies of such process to the Borrower at its address specified in
Section 9.1. The Borrower further agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
The Borrower waives any objection to jurisdiction or venue in New York State
and any objection to an action or proceeding in such state on the basis of
forum non conveniens.
9.9 Waiver of Jury Trial. The Borrower hereby voluntarily and
irrevocably waives any right to a trial by jury in any action, suit or
proceeding instituted by or against the Borrower arising out of or in
connection with this Agreement.
9.10 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and
permitted assigns.
9.11 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto constitute the entire understanding of the parties relative to the
making of revolving credit loans by the Banks. This Agreement supersedes and
replaces the Credit Agreement dated as of January 21, 1994 between the
Borrower, the Banks and the Agent (the "Prior Agreement"). All revolving credit
loans outstanding under the Prior Agreement shall automatically become Loans
outstanding hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
authorized officers as of the day and year first above written.
ONEIDA LTD.
By: /s/ Edward W. Thoma
Edward W. Thoma
Senior Vice President
Address for Notices:
Oneida Ltd.
Oneida, New York 13241
Attention: Treasurer
Telex: (315) 685-4507
Telecopy No.: (315) 361-3700
Commitment THE CHASE MANHATTAN BANK, N.A.
$20 000,000 By: /s/ Joseph Oddo V.P.
Joseph Oddo
Vice President
<PAGE>
Lending office for Eurodollar Loans:
Chase Manhattan Bank, N.A.
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopy No: (718) 242-6909/10
Lending Office for Other Loans:
Chase Manhattan Bank, N.A.
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopy No: (718) 242-6909/10
Agency Office:
Chase Manhattan Bank, N.A.
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopy No: (718) 242-6909/10
Address for Notices Under Sections
2.2, 2.3 and 8.13:
Chase Manhattan Bank, N.A.
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Telecopy No: (718) 242-6909/10
Address for all other Notices:
Chase Manhattan Bank, N.A.
One Lincoln Center
Syracuse, New York 13202
Attn: Corporate Industries Dep't Telecopy
No.: (315) 424-2706
Commitment CHEMICAL BANK
$12,500,000 By: /s/ Christine McLeod
Title: Vice President
<PAGE>
Lending Office for Eurodollar Loans:
Chemical Bank
270 Park Avenue, 6th Floor
New York, New York 10017
Lending Office for Other Loans:
Chemical Bank
1975 Lake Street
Elmira, New York 14901
Address for Notices:
Chemical Bank
1975 Lake Street
Elmira, New York 14901
Telecopy No.: (607) 734-7645
Commitment NATIONSBANK, N.A.
$12,500,000 By: /s/ Mary Ellen H. Jones
Title: Senior Vice President
Lending Office for Eurodollar Loans:
NationsBank, N.A.
1 NationsBank Plaza;
NC1-007-06-19
Charlotte, North Carolina 28255
Lending Office for Other Loans:
NationsBank, N.A.
1 NationsBank Plaza;
NC1-007-06-19
Charlotte, North Carolina 28255
Address for Notices:
NationsBank, N.A.
767 Fifth Avenue, 5th Floor
New York, New York 10153
Telecopy No.: (212) 593-1083
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$Commitment of [Bank X] [Date]
ONEIDA LTD. (the "Borrower") a corporation organized under the laws of New
York, for value received, hereby promises to pay to the order of [Bank X] (the
"Bank") at the office of The Chase Manhattan Bank, N.A., at 4 Chase Metrotech
Center, 13th Floor, Brooklyn, New York 11245, for the account of the Applicable
Lending Office of the Bank, the principal sum of ($Commitment amount of Bank X)
or, if less, the amount of Base Rate Loans and Eurodollar Loans made by the
Bank to the Borrower pursuant to the Credit Agreement referred to below, in
lawful money of the United States of America and in immediately available
funds, on the date(s) and in the manner provided in the Credit Agreement. The
Borrower also promises to pay interest on the unpaid principal balance hereof,
for the period such balance is outstanding, at said principal office for the
account of said Lending Office, in like money, at the rates of interest as
provided in the Credit Agreement described below, on the date(s) and in the
manner provided in the Credit Agreement.
The date and amount of each Base Rate Loan and Eurodollar Loan made by the
Bank to the Borrower under the Credit Agreement referred to below, and the
maturity date and each payment of principal thereof, shall be recorded by the
Bank on its books and, prior to any transfer of this Note (or, at the
discretion of the Bank, at any other time), endorsed by the Bank on the
schedule attached hereto or any continuation thereof.
This is one of the Notes referred to in that certain Credit Agreement (as
amended from time to time, the "Credit Agreement") dated as of January 19, 1996
among the Borrower, the banks named therein (including the Bank) and The Chase
Manhattan Bank, N.A., as Agent, and evidences Base Rate Loans and
Eurodollar Loans made by the Bank thereunder. All terms not defined herein
shall have the meanings given to them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default and for prepayments
on the terms and conditions specified therein.
The Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York.
ONEIDA LTD.
By:
Name:
Title:
<PAGE>
Amount Amount Balance Notation
Date of Loan of Payment Outstanding By
<PAGE>
EXHIBIT B
COMPETITIVE BID NOTE
$45,000,000.00 [Date]
ONEIDA LTD. (the "Borrower"), a corporation organized under the laws of
New York, for value received, hereby promises to pay to the order of [Bank X]
(the "Bank") at the office of The Chase Manhattan Bank, N.A. at 4 Chase
Metrotech Center, 13th Floor, Brooklyn, New York 11245, for the account of the
Applicable Lending Office of the Bank, the principal sum of FORTY-FIVE MILLION
DOLLARS ($45,000,000.00) or, if less, the amount of the Competitive Bid Loans
made by the Bank to the Borrower pursuant to the Credit Agreement referred to
below, in lawful money of the United States of America and in immediately
available funds, on the date(s) and in the manner provided in said Credit
Agreement. The Borrower also promises to pay interest on the unpaid principal
balance hereof, for the period such balance is outstanding, at said principal
office for the account of said Lending Office, in like money, at the rates of
interest as provided in the Credit Agreement described below, on the date(s)
and in the manner provided in said Credit Agreement.
The date and amount of each Competitive Bid Loan made by the Bank to the
Borrower under the Credit Agreement referred to below, and the maturity date
and each payment of principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note (or, at the discretion of the
Bank, at any other time), endorsed by the Bank on the schedule attached hereto
or any continuation thereof.
This is one of the Notes referred to in that certain Credit Agreement (as
amended from time to time, the "Credit Agreement") dated as of January 19, 1996
among the Borrower, the banks named therein (including the Bank) and The Chase
Manhattan Bank, N.A., as Agent, and evidences Competitive Bid Loans made by the
Bank thereunder. All terms not defined herein shall have the meanings given to
them in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence of certain Events of Default. Competitive Bid
Loans may not be prepaid.
The Borrower waives presentment, notice of dishonor, protest and any other
notice or formality with respect to this Note.
This Note shall be governed by, and interpreted and construed in
accordance with, the laws of the State of New York.
ONEIDA LTD.
By:
Name:
Title:
<PAGE>
Amount Amount Balance Notation
Date of Loan of Payment Outstanding By
<PAGE>
EXHIBIT C
[FORM OF COMPETITIVE BID QUOTE REQUEST]
[Date]
TO: The Chase Manhattan Bank, N.A., Agent
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Attn: Muniram Appana or Laura Rebecca
FROM: Oneida Ltd.
RE: Competitive Bid Quote Request
Pursuant to Section 2.3 of the Credit Agreement (the "Credit Agreement.')
dated as of January 19, 1996, between Oneida Ltd. the banks named therein and
The Chase Manhattan Bank, N.A., Agent, we hereby give notice that we request
Competitive Bid Quotes priced at an Absolute Interest Rate for the following
proposed Competitive Bid Borrowing(s):
Borrowing Interest
Date Amount 1/ Period 2/
Terms used herein have the meanings assigned to them in the Credit
Agreement.
ONEIDA LTD.
By_____________________
Name:
Title:
____________________________________
1/ Each amount must be $5,000,000 or a larger multiple of $1,000,000
2/ A period not less than 30 days nor more than 180 days after the making of
such Competitive Bid Loan and ending on a Business Day.
<PAGE>
EXHIBIT D
[FORM OF COMPETITIVE BID QUOTE]
The Chase Manhattan Bank, N.A., Agent
4 Chase Metrotech Center
13th Floor
Brooklyn, New York 11245
Re: Competitive Bid Quote to Oneida Ltd. (the "Borrower")
This Competitive Bid Quote is given in accordance with Section 2.3 of the
Credit Agreement (the "Credit Agreement") dated as of January 19, 1996, between
Oneida Ltd., the banks named therein and The Chase Manhattan Bank, N.A., as
Agent. Terms defined in the Credit Agreement are used herein as defined
therein.
In response to the Borrower's invitation dated ______, 19___, we hereby
make the following Competitive Bid Quote(s) on the following terms:
1. Quoting Bank: ________________________________________
2. Person to contact at Quoting Bank:________________________
3. We hereby offer to make Competitive Bid Loan(s) in the
following principal amounts, for the following Interest Periods and at the
following rates:
Borrowing Interest
Date Amount 1/ Period 2/ Rate 3/
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate(s) us to make the Competitive Bid Loan(s) for which any
offer(s) [is] [are] accepted, in whole or in part (subject to the provisions of
Section 2.3 of the Credit Agreement).
Very truly yours,
[Name of Bank]
By ___________________
Dated: Authorized Officer
_______________________________________
1/ The principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $5,000,000 or a
larger multiple of $1,000.000.
2/ A period no less than 30 and no more than 180 days after the making of
such Competitive Bid Loan and ending on a Business Day, as specified in the
related Competitive Bid Quote Request.
3/ Specify rate of interest per annum (rounded to the nearest 1/10,000 of 1%).
<PAGE>
SCHEDULE E
LIENS
ONEIDA LTD.
1. #162265 7/30/91
4 Raymond Lift Trucks
Chase Lincoln Lease/Way, Inc.
2. #176312 8/21/92
Specified Equipment including Knife Forging Machine
NYS Urban Development Corporation
3. #026705 2/1/88 cont. #209677
Equipment
Chase Lincoln Lease/way, Inc.
BUFFALO CHINA, INC.
1. #034805 9/11/80 cont. #189245
Specified Equipment
Marine Midland Bank
2. #189829 9/6/91
Fork Lift Truck
Caterpillar Financial Services
3. #019818 1/27/93
Dry Press Equipment
Chase Equipment Leasing, Inc.
CAMDEN WIRE CO., INC.
1. #074551 2/26/86 cont. #019665
4 TRB/3.2 Samp Wire Drawing Equipment
1 Robot
Marine Midland Bank
2. #177195 5/27/86 cont. #040999
MicroVax II Computer (Deck)
Chase Lincoln Lease/Way, Inc.
3. #223501 7/23/87 cont. #059232
2 Schreck Walkie Talkie Electric Pallet Trucks
8 Yale Lift Trucks
Chase Lincoln Lease/Way, Inc.
4. #317265 10/22/87 cont. #149044
Lesmos Bunching Equipment
Chase Lincoln Lease/Way, Inc.
5. #149198 6/13/88 cont. #013433
115 KV Substation Expansion
M&T Financial Corp.
<PAGE> 145
6. #023859 2/4/91
All inventory of Copper Rod delivered by Kirtland Indiana LP
Kirtland Indiana LP.
7. #030755 2/13/92
2 Caterpillar Gas Model Lift Trucks
Cheyenne Leasing Co.
8. #009599 1/15/93
Motorized Yale Hand Pallet Truck
Cheyenne Leasing Co.
9. #169644 8/9/93
Lesmos Bunching Equipment
Chase Equipment Leasing, Inc.
10. #169645 8/9/93
Lesmos Bunching Equipment
Chase Equipment Leasing, Inc.
11. #862754 8/10/93 Arkansas
Chase Equipment Leasing
12. #921842 9/6/94 Arkansas
Yale Financial Services, Inc. - Arkansas
13. #0673879 7/24/89 Arkansas
Kalmar Capital Corp.
Equipment
14. #179999 9/1/94 Arkansas
Lift Trucks
Yale Financial Services, Inc.
15. #490416 8/5/85 cont. 7/12/95
Real Estate, Equipment, Machinery
Simmons First National Bank
16. #492678 8/23/85 cont. 7/12/95
Bond Indenture
City of Pine Bluff
<PAGE>
EXHIBIT F
LIMITED CORPORATE GUARANTEE AGREEMENT
To: The Chase Manhattan Bank, N.A.
(as Agent and as Bank)
One Lincoln Center
Syracuse, New York 13202
NationsBank, N.A.
1 NationsBank Plaza
Charlotte, North Carolina 28255
Chemical Bank
1975 Lake Street
Elmira, New York 14901
[Date]
DEFINITIONS
In this Agreement, the words we, our, us, ours and Guarantor shall mean
the corporation executing and delivering this Agreement. The words you, your
and yours mean each of the Agent, each Bank to whom this Agreement is
addressed, and each Bank which hereafter becomes a party to the Credit
Agreement identified below. All capitalized terms not defined herein shall have
the meanings given to those terms in such Credit Agreement.
GUARANTEE
For value received and in order to induce you to extend credit or other
considerations to Oneida Ltd., a New York corporation ("Borrower"),
Guarantor hereby absolutely and unconditionally, jointly with any other party
and severally, guarantees unto each of you, your successors and assigns, the
payment whenever due, by acceleration or otherwise, of any and all debts,
liabilities and obligations of Borrower to you under a Credit Agreement dated
as of January 19, 1996 among Borrower, The Chase Manhattan Bank, N.A., as
Agent, and the Banks which are signatories thereto ("Credit Agreement"),
without deduction by reason of setoff, defense or counterclaim, without regard
to the enforcement of any other guarantee or any other obligations or security,
and whether or not such debts, liabilities or obligations are now existing or
hereafter incurred, including any extensions and renewals thereof or a part
thereof, together with interest, fees, charges, expenses and costs of
enforcement or collection (including reasonable attorney's fees of both outside
counsel and the allocated costs of in-house counsel) (the "Liabilities");
provided, however, that the liability of Guarantor under this Agreement shall
not exceed the sum of $______ , together with expenses and the costs of
enforcement (including reasonable attorney's fees). You may make loans or
extend credit to Borrower in excess of this limit without affecting the
liability of Guarantor hereunder, but the liability of Guarantor shall not
exceed this limitation.
<PAGE>
All payments required to be made by Guarantor under this Agreement shall
be made to the Agent at the address set forth above or such other address as
may be designated by the Agent in writing. All such payments, and any other
recoveries under this Agreement, shall be applied first to the costs and
expenses of the Agent in realizing upon this Agreement, with the balance to be
allocated among the Banks pro rata in accordance with the respective unpaid
principal amounts of the Loans then outstanding under the Credit Agreement.
YOUR RIGHTS
You may at any time without notice or demand of any kind, the receipt of
which is expressly waived, without regard to any demands or requests by
Guarantor and without thereby impairing Guarantor's obligations hereunder,
releasing Guarantor hereunder or incurring any liability to Guarantor:
1. Change the rate of interest, the time for repayment, the amount
outstanding or any other provisions with respect to any of the Liabilities,
grant any extension, compromise, settlement, release or discharge (in whole or
in part) to Borrower or any other party liable with Borrower, and sell,
exchange, release, impair or compromise, or fail to perfect or omit to collect
or enforce, any collateral security or other guarantee held by you, or
exchange, substitute, deal with or take any additional collateral security;
2. Realize on and apply any sums of money or other collateral held by you,
whether or not deposited by Guarantor, to such obligation or obligations as you
may elect, whether guaranteed hereby or not, without regard to any rights of
Guarantor, or any of them, in respect to the application thereof;
3. Waive, release, delay in the exercise of, or refrain from exercising, any
of your rights (and the single or partial exercise of any such right or rights
shall not preclude any other or further exercise thereof);
4. Fail to give notice to Guarantor of an event of default in the terms and
conditions of the Liabilities: or
5. Take any other action, or engage in a course of conduct, which might
constitute a legal or equitable discharge or defense of a surety or guarantor
or which might otherwise limit recourse against Guarantor.
RIGHT TO SET OFF
All sums to the credit of the Guarantor and any property of the
Guarantor in your possession at any time shall be deemed held by you as
security for the Liabilities and Guarantor hereby gives you the right, without
notice to Guarantor, to set off such sums against any obligation of Guarantor
hereunder.
Your books and records showing the account and amounts outstanding
between you and the Borrower shall he admissible in evidence in any action or
proceeding, and shall constitute prima facie proof thereof. You may take or
refrain from taking any of the actions authorized under this Guarantee without
notice of any kind to Guarantor.
NATURE OF GUARANTEE
Guarantor hereby waives any and all defenses based on the Liabilities and
any right to assert any defenses that Borrower may have in connection with the
Liabilities. No invalidity,
<PAGE>
irregularity or unenforceability of all or any part of the Liabilities or of
the interest and penalties thereon, expenses of collection thereof, or of
any collateral security therefor, shall affect, impair or be a defense
to this Guarantee, and this Guarantee shall be enforceable as to all of
the Liabilities, despite any petition in bankruptcy brought by or against the
Borrower or despite adjustment of all or any part of the Liabilities in
insolvency proceedings or pursuant to some other compromise with creditors.
Guarantor's liability hereunder is in addition to and independent of any
other liabilities which Guarantor has incurred or assumed, or may hereafter
incur or assume, by way of endorsement, separate guarantee agreement, or in any
other manner, with respect to all or any part of the Liabilities guaranteed
hereby. This Guarantee does not supersede nor limit any such other liabilities
of Guarantor and your rights and remedies under and pursuant to this Guarantee
and any such other liabilities are cumulative and may be exercised singly or
concurrently.
Guarantor waives notice of protest and any right to notice of any action
you take with respect to the Liabilities. This Guarantee is a guarantee of
payment and not of collection. As a condition of payment or performance by
Guarantor, you are not required to enforce any remedies against the Borrower or
any other party liable to you on account of the Liabilities; nor are you
required to seek to enforce or resort to any remedies with respect to any
security interest, lien or encumbrance granted to you by the Borrower or any
other party. This Agreement remains fully enforceable irrespective of any
defenses Borrower may assert on the Liabilities, including, but not limited to,
failure of consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction, and usury.
Guarantor hereby waives and renounces any and all rights that it has or may
have for subrogation, indemnity, reimbursement or contribution against the
Borrower for amounts paid by the Guarantor pursuant to this Guarantee. This
waiver is expressly intended to prevent the existence of any claim in respect
to such reimbursement by the Guarantor against the estate of the Borrower
within the meaning of Section 101 of the Bankruptcy Code, and to prevent the
Guarantor from constituting a creditor of the Borrower in respect of such
reimbursement under Section 547(b) of the Bankruptcy Code in the event of a
subsequent case involving the Borrower. Notwithstanding the foregoing, if it is
clearly established, by an amendment to the Bankruptcy Code or by a final,
non-appealable court decision binding on the Bankruptcy Court for the Northern
District of New York, that a right of subrogation, indemnity, reimbursement or
contribution in favor of Guarantor against the Borrower for amounts paid by
Guarantor pursuant to this Guarantee would not render Guarantor a creditor of
Borrower under the Bankruptcy Code, the foregoing waiver in this paragraph
shall become ineffective.
REPAYMENT OR RECOVERY OF CLAIMS
If claim is ever made upon you for repayment or recovery of any amount
or amounts received by you in payment or on account of any of the
Liabilities, and you repay all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body, or (b) any
settlement or compromise of any such claim effected by you with any such
claimant (including Borrower), then and in such event Guarantor agrees that any
such judgment, decree, order, settlement or compromise shall be binding upon
Guarantor, notwithstanding any termination hereof or the cancellation of any
such Liabilities, and
<PAGE>
Guarantor shall be and remain liable to you hereunder for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been received by you.
ORGANIZATION AND AUTHORITY OF GUARANTOR
Guarantor does hereby represent and warrant that:
1. Guarantor is a corporation duly organized, validity existing and in good
standing under the laws of its jurisdiction of incorporation;
2. Guarantor has all requisite corporate power and authority and all
necessary licenses and permits to own and operate its assets and to carry on
its business as now conducted and as presently proposed to be conducted;
3. Guarantor is duly qualified and is authorized to do business and is in
good standing as a foreign corporation in each jurisdiction where the character
of its assets or the nature of its activities makes such qualification
necessary (including, without limitation, New York);
4. Guarantor has the lawful authority to enter into this Agreement and by
proper corporate action, where applicable, has been duly authorized to execute,
deliver and perform this Agreement;
5. Neither the execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby nor the fulfillment of or compliance with
the provisions of this Agreement will conflict with or result in a breach of or
violate any provision of law, any order of any court or other agency of
government, the Certificate of Incorporation or By-Laws of Guarantor, or any of
the terms, conditions or provisions of any corporate restriction or any
agreement or instrument to which Guarantor is a party or by which it or any of
its assets are bound, or will constitute a default under any of the foregoing,
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon any of the assets of Guarantor under the terms of
any such instrument or agreement;
6. There are no actions, suits or proceedings pending, or, to the knowledge
of Guarantor, threatened against or affecting Guarantor or any of its property
or rights in any court or by or before any governmental authority or
arbitration board, tribunal or governmental instrumentality or agency which
involve the possibility of materially and adversely affecting the condition
(financial or otherwise) of Guarantor, or the ability of Guarantor to execute,
deliver or perform this Agreement; Guarantor is not in default with respect to
any applicable order of any court, governmental authority or arbitration board
or tribunal;
7. Guarantor has heretofore furnished all requested financial statements or
information requested by Bank in connection with this transaction; said
statements and information are correct and complete, and present fairly the
financial condition of Guarantor on the dates thereof and the results of its
operations for the periods then ended, and show all known liabilities, direct
or contingent, of Guarantor as of the date thereof, and each financial
statement referred to herein was prepared in accordance with generally accepted
accounting principles, consistently applied;
8. There has been no material adverse change in the business, assets,
condition (financial or otherwise) of Guarantor since the date of the above
described financial statements; and
9. Guarantor and Borrower are engaged in business as an integrated group the
operation of which requires financing on such a basis that credit supplied to
the Borrower can be made available from time to time (subject to the
limitations contained in the Credit Agreement) to Subsidiaries of the Borrower
(including Guarantor), as required for the continued successful
<PAGE>
operation of the integrated group as a whole. Guarantor expects to derive
benefit, directly or indirectly, from the Loans to the Borrower both in the
Guarantor's separate capacity and as a member of the integrated group. The
Guarantor (a) is not and has not been rendered by the incurrence of its
obligations hereunder unable to pay its indebtedness and obligations
(including the Liabilities hereunder) as and when they mature, and (b) has
assets with a book value which exceeds the total amount of its liabilities
on existing obligations (including the Liabilities hereunder). To the best
of Guarantor's knowledge, there is nothing which would indicate that the book
value of its assets does not approximate the fair market value of such assets.
MISCELLANEOUS
1. Guarantor agrees that any action involving this Guarantee may be brought
by you in any Federal or New York State Court in Onondaga County in the State
of New York, and in any such action Guarantor consents that service of process
upon Guarantor shall be effective if mailed to Guarantor by registered or
certified mail, return receipt requested, at the address provided below or if
service is otherwise made at that address. The Guarantor hereby voluntarily and
irrevocably waives any right to a trial by jury in any action, suit or
proceeding instituted by or against the Guarantor arising out of or in
connection with this Agreement.
2. This instrument shall be binding upon Guarantor's successors and assigns
and shall inure to your benefit. Your rights and benefits hereunder shall, if
you so direct, inure to any party acquiring any interest in the Liabilities or
any part thereof.
3. This instrument contains the entire agreement between you and Guarantor
and cannot be changed orally. Guarantor expressly disclaims any reliance on any
oral representation made by you. No failure by you to exercise any right
hereunder shall be deemed a waiver thereof, nor shall any single or partial
exercise by you of any right hereunder preclude any other or further exercise
thereof, and no waiver by you of any right hereunder shall operate as a waiver
of any other right.
4. This Agreement and the transactions evidenced thereby shall be construed
under the laws of the State of New York.
5. If any provision of this Agreement is unenforceable in whole or in part
for any reason, the remaining provisions shall continue to be effective.
IN WITNESS WHEREOF, Guarantor has signed this instrument on the date first
hereinabove written.
[NAME OF GUARANTOR]
By:
Title:
[ADDRESS]
<PAGE>
STATE OF NEW YORK )
) ss:
COUNTY OF )
On this ____ day of _________, ____, before me personally appeared
___________________ to me personally known, did depose and say that he/she is
the _______________________ of ______________, the corporation described in and
which executed the foregoing instrument, and that he/she executed the same by
order of the Board of Directors of said corporation.
_________________________
Notary Public
<PAGE>
<TABLE>
EXHIBIT G
Pricing Grid
<CAPTION>
I II III IV
Ratio<1.5 1.5<RATIO<2.5 2.5<RATIO<3.5 Ratio>3.5
<S> <C> <C> <C> <C>
Commitment Fee 12.50 BPs 15.00 BPs 17.50 BPs 25.00 BPs
Eurodollar Margin 50.00 BPs 62.50 BPs 75.00 BPs 100.00 BPs
</TABLE>
Ratio = the ratio of Total Funded Debt at the end of each fiscal quarter
to Consolidated Cash Flow for the four fiscal quarters ending with such
quarter. The Ratio is to be determined upon receipt of financial statements
required to be delivered under Section 6.1 (a) and (b), with the change in
Commitment Fee and Eurodollar Margin to take effect on the first day of the
next succeeding May, August, November and February.
By way of example, if the Ratio at the end of a fiscal quarter is 1.5 to
1.00, the level of Commitment Fee and the Eurodollar Margin is found in Column
II.
All numerical amounts for the Commitment Fee and Eurodollar Margin are
expressed in basis points ("BPs").
<PAGE>
EXHIBIT 10(a)
March 29, 1995
Ms. Catherine H. Suttmeier
3922 Kenwood Road
Vernon, New York 13476
Dear Ms. Suttmeier:
Oneida Ltd. (the "Company") considers it essential to the best interests
of its stockholders to foster the continuous employment of key management
personnel. In this connection, the Board of Directors of the Company (the
"Board') recognizes that the possibility of a change in control of the Company
may exist and that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its stockholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from
any possible change in control of the Company.
In order to induce you to remain in the employ of the Company, the Company
agrees that you shall receive the severance benefits set forth in this letter
agreement (the "Agreement") in the event that your employment with the Company
is terminated subsequent to a Change in Control (as defined in Section 2).
1. Term of Agreement. The term of this Agreement (the "Term") shall
commence on the Operative Date (as hereinafter defined) and end on the fifth
anniversary of the Operative Date, provided that it has not been terminated in
accordance with its terms. In the event, however, that you attain the age of
sixty-five (65) during the Term, then this Agreement shall terminate on the
last day of the month in which you attain the age of sixty-five (65). For
purposes of this Agreement, the term "Operative Date" shall mean the date on
which a Change in Control occurs, provided that (i) you are then in the employ
of the Company and (ii) such Change in Control occurs before you reach age
sixty-five (65).
2. Change in Control. No benefits shall be payable hereunder unless
there shall have been a Change in Control. For purposes of this Agreement, a
"Change in Control" shall be deemed to have occurred if:
<PAGE>
(A) any "Person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any company owned, directly
or indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of sock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act, directly
or indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities;
(B) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, and any new director
(other than a director designated by a person who has entered into an agreement
with the Company to effect a transaction described in clause (A), (C) or (D) of
this Section) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof;
(C) the stockholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction in which no
''person" (as hereinabove defined) acquires more than 20% of the combined
voting power of the Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or Substantially all of the Company's assets.
3. Termination Following Change in Control. If a Change in Control
shall have occurred, you shall be entitled to the benefits provided in
Subsection 4(D) upon the subsequent termination of your employment during the
Term unless such termination is because of your death or retirement, by the
Company for cause or disability, or by you other than for good reason. In the
event your employment with the Company is terminated for any reason prior to
the Operative Date, you shall not be entitled to any benefits hereunder.
(A) Disability; Retirement. If, as a result of your incapacity
due to physical or mental illness, you shall have been absent from the full-
time performance of your duties with the Company for six (6) consecutive months,
and within thirty (30) days after written Notice of Termination (as defined
in Subsection 3(D)) is given you shall not have returned to the
<PAGE>
full-time performance of your duties, the Company may terminate your employment
for "Disability." Any question as to the existence of your Disability upon which
you and the Company cannot agree shall be determined by a qualified independent
physician selected by you (or, if you are unable to make such selection, it
shall be made by any adult member of your immediate family), and approved by
the Company. The determination of such physician made in writing to the Company
and to you shall be final and conclusive for all purposes of this Agreement.
Termination of your employment based on "Retirement" shall mean your voluntary
termination of employment on a Retirement Date as defined in the Retirement
Plan for Employees of Oneida Ltd. or any successor plan thereto (the "Pension
Plan") as in effect immediately prior to the occurrence of a Change in Control
(whether or not you are a participant in the Pension Plan) or in accordance with
any retirement arrangement established with your consent with respect to you.
(B) Cause. Termination by the Company of your employment for
"Cause" shall mean termination upon (i) the willful and continued failure by
you to substantially perform your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness or
from your Retirement or any such actual or anticipated failure resulting from
termination by you for Good Reason (as hereinafter defined after a written
demand for substantial performance is delivered to you by the Board, which
demand specifically identifies the manner in which the Board believes that you
have not substantially performed your duties, or (ii) the willful engaging by
you in conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Subsection, no act or failure to
act on your part shall be deemed ''willful'' unless done, or omitted to be
done, by you in other than good faith and without reasonable belief that your
action or omission was in the best interests of the Company. Notwithstanding
the foregoing, you shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to you a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters (3/4) of the
entire membership of the Board at a meeting of the Board (after reasonable
notice to you and an opportunity for you, together with your counsel, to be
heard before the Board), finding that in the good faith opinion of the Board
you were guilty of conduct set forth above in clause (i) or (ii) of the first
sentence of this Subsection and specifying the particulars thereof in detail.
(C) Good Reason. You shall be entitled to terminate your
employment for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean, without your express written consent, the occurrence after a Change in
Control of any of the following circumstances:
(i) Inconsistent Duties. A meaningful and detrimental
alteration in your position or in the nature or status of your responsibilities
(including those as a director of the Company, if any) from those in effect
immediately prior to the Change in Control;
(ii) Reduced Salary or Failure to Increase Salary. A
reduction by the Company in your annual base salary as in effect on the date
hereof or as the same may be increased from time to time; a failure by the
Company to increase your salary at a rate
<PAGE>
commensurate with that of other key executives of the Company; or a failure
by the Company to increase your salary on an annual basis to reflect the
percentage increase in the cost of living (as determined in accordance with
such statistics or indices as the Board shall reasonably consider appropriate
for such purposes).
(iii) Relocation. The relocation of the office of the
Company where you are employed at the time of the Change in Control
(the "CIC Location") to a location which in your good faith assessment is an
area not generally considered conducive to maintaining the executive
offices of a company such as the Company because of hazardous or
undesirable conditions, including, without limitation, a high crime rate or
inadequate facilities, or to a location which is more than twenty-five (25)
miles away from the CIC Location or the Company's requiring you to be based
more than twenty-five (25) miles away from the CIC Location (except for
required travel on the Company's business to an extent substantially
consistent with your present business travel obligations);
(iv) Compensation Plans. The failure by the Company to
continue in effect any material compensation, benefit or profit sharing plan
in which you were participating immediately prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the failure by
the Company to continue your participation therein (or in such substitute or
alternative plan) on at least as favorable a basis, both in terms of the
amount of benefits provided and the level of your participation relative to
other participants, as existed immediately prior to the Change in Control;
(v) Benefits and Perquisites. The failure by the Company to
continue to provide you with benefits at least as favorable as those enjoyed by
you under any of the Company's pension, life insurance, medical, health and
accident, disability or savings plans in which you were participating
immediately prior to the Change in Control; the taking of any action by the
Company which would directly or indirectly materially reduce any of such
benefits or deprive you of any material benefit or perquisite enjoyed by you
immediately prior to the Change in Control; or the failure by the Company to
provide you with the number of paid vacation days to which you are entitled on
the basis of years of service with the Company in accordance with the Company's
normal vacation policy in effect immediately prior to the Change in Control;
(vi) No Assumption by Successor. The failure of the Company
to obtain a satisfactory agreement from any successor to assume and agree
to perform this Agreement, as contemplated in Section 5 hereof or, if the
business of the Company for which your services are principally performed is
sold at any time after a Change in Control, the failure of the purchaser of
such business to agree to provide you with the same or a comparable
position, duties, compensation, benefits and perquisites (as described in
clauses (iv) and (v) above) as provided to you by the Company immediately
prior to the Change in Control; or
(vii) No Notice. Any purported termination of your
employment that is not effected pursuant to a Notice of Termination
satisfying the requirements of Subsection
<PAGE>
(D) below (and, if applicable, the requirements of Subsection (B) above),
which purported termination shall not be effective for purposes of this
Agreement.
(D) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. For
purposes of his Agreement, a "Notice of Termination" shall mean a notice that
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated.
(E) Date of Termination, Etc. For purposes of this Agreement,
"Date of Termination" shall mean (i) if your employment is terminated for
Disability, thirty (30) days after a Notice of Termination is given (provided
that you shall not have returned to the full-time performance of your duties
during such thirty (30) day period), and (ii) if your employment is terminated
pursuant to Subsection (B) or (C) above or for any other reason (other than
Disability), the date specified in the Notice of Termination (which, in the
case of a termination pursuant to Subsection B) above shall not be less than
thirty (30) days from the date such Notice of Termination is given, and in the
case of a termination pursuant to Subsection (C) above shall not be less than
thirty (30) nor more than sixty (60) days from the date such Notice of
Termination is given); provided, however, that if within thirty (30) days after
any Notice of Termination is given, the party receiving such Notice of
Termination. notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of a court
of competent jurisdiction (which is not appealable or the time for appeal
therefrom having expired and no appeal having been perfected); Provided
further, however, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay you your full compensation in effect when the notice giving rise to the
dispute was given and continue you as a participant in all compensation,
benefit and insurance plans and perquisites in which you were participating
when the notice giving rise to the dispute was given, until the dispute is
finally resolved in accordance with this Subsection. Amounts paid under this
Subsection are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement and shall not be reduced by any compensation earned by you as the
result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a
Change in Control, you shall be entitled to the following benefits during a
period of Disability, or upon termination of your employment, as the case may
be, provided that such period or termination occurs during the Term:
<PAGE>
(A) Disability. During any period that you fail to perform your
full-time duties with the Company as a result of your Disability, you shall
continue to receive your base salary at the rate in effect at the commencement
of any such period, together with compensation payable to you under the
Company's disability insurance coverage or other plan during such period, until
your employment is terminated pursuant to Subsection 3(A). Thereafter, your
benefits shall be determined in accordance with the Company's insurance
programs and other benefit or pension plans then in effect in accordance with
the terms of such programs and plans.
(B) Termination for Other than Good Reason or for Cause. If your
employment shall be terminated by the Company for Cause or by you other than
for Good Reason, death or Retirement, the Company shall pay you your full base
salary through the Date of Termination at the rate in effect at the time the
Notice of Termination is given, plus all other amounts to which you are
entitled pursuant to the Company's benefit and pension plans then in effect,
and the Company shall have no further obligations to you under this Agreement.
(C) Retirement; Death. If your employment shall be terminated
for Retirement, or by reason of your death, your benefits shall be determined
in accordance with the Company's benefit and pension plans then in effect.
(D) Breach by the Company. If your employment by the Company
shall be terminated by the Company other than for Cause, Retirement or
Disability or by you for Good Reason, then you shall be entitled to the
benefits provided below:
(i) Base Salary. The Company shall pay you your full base
salary through the Date of Termination at the rate in effect at the time the
Notice of Termination is given;
(ii) Severance Payment. In lieu of any further salary
payments to you for periods subsequent to the Date of Termination, the Company
shall pay as severance pay to you, not later than the tenth (10th) business day
following the Date of Termination, a lump sum severance payment equal to 2.99
times the average of the annual compensation which was payable to you by the
Company (or any corporation affiliated with the Company within the meaning of
section 1504 of the Internal Revenue Code of 1986, as amended (the "Code"),
determined without regard to section 1504(b) of the Code) and includable in
your gross income for Federal income tax purposes for the five (5) taxable
years preceding your taxable year in which a Change in Control occurred. The
amount of your average annual compensation shall be determined in
accordance with the regulations (including proposed regulations) promulgated
under section 280G(d) of the Code; provided, however, that (a) notwithstanding
any provision of such regulations to the contrary, the amount of your average
annual compensation shall be determined by including as compensation any
contribution (a "401(k) Contribution") pursuant to any cash or deferred
arrangement (as described in section 401(k) of the Code) maintained by the
Company which is not includable in your gross income under section 402(a)(8)
of the Code and (b) the amount of any such
<PAGE>
401(k) Contribution shall be treated as includable in your gross income in
the taxable year such contribution is made for purposes of the preceding
sentence.
(iii) Legal Fees and Expenses. The Company shall also pay
to you all legal fees and expenses incurred by you as a result of such
termination, including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain or enforce
any right or benefit provided by this Agreement (other than any such fees or
expenses incurred in connection with any such claim which is determined to be
frivolous).
(iv) Insurance Benefits for 36 Months. For a thirty-six
(36) month period after such termination, the Company shall arrange to provide
you with life, disability, accident and health insurance benefits
substantially similar to and at no greater cost to you than those which you
were receiving immediately prior to the Notice of Termination. Benefits
otherwise receivable by you pursuant to this Subsection 4(D)(iv) shall be
reduced to the extent comparable benefits are actually received by you
during the thirty-six (36) month period following your termination, and
any such benefits actually received by you shall be reported to the Company.
(v) Supplemental Pension. In addition to the Pension
benefits to which you are entitled under the Pension Plan, the Company shall
pay you in one sum in cash on the tenth (10th) business day following the Date
of Termination, a lump sum equal to the actuarial equivalent of the excess of
(1) the retirement pension (determined as a straight life annuity commencing at
age 65) which you would have accrued under the terms of the Pension Plan and
any other pension benefit program (without regard to any amendment to such
Pension Plan or other pension benefit program made subsequent to the Change in
Control and on or prior to the Date of Termination, which amendment adversely
affects in any manner the computation of pension benefits thereunder),
determined as if you were fully vested thereunder and had accumulated (after
the Date of Termination thirty-six (36) additional months of service credit
thereunder at your highest annual rate of compensation (the "Compensation
Rate") during the twelve (12) months immediately preceding the Date of
Termination (but in no event shall you be deemed to have accumulated additional
months of service credit after your sixty-fifth (65th) birthday), over (2) the
retirement pension (determined as a straight life annuity commencing at age
sixty-five (65)) which you had then accrued pursuant to the provisions of the
Pension Plan and any other pension benefit program. For purposes of clause (1)
above, the Compensation Rate shall be deemed to include amounts payable
pursuant to Subsection 4(D)(ii) hereof, and amounts payable pursuant to
Subsection 4(D)(ii) hereof shall be deemed to represent thirty-six (36) months
of compensation (or such lesser number of months of compensation to your
sixty-fifth (65th) birthday) for purposes of determining benefits under the
Pension Plan. For purposes of this Subsection, "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under the Pension
Plan immediately prior to the Change in Control.
<PAGE>
(vi) Employee Benefit Plans. You shall be entitled to
receive all benefits payable to you under the Company's benefit and pension
plans, not otherwise specifically provided for in this Subsection 4(D).
(E) No Mitigation. You shall not be required to mitigate the
amount of any payment provided for in this Section 4 by seeking other
employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by you as
the result of employment by another employer or by pension benefits after the
Date of Termination, or otherwise except as specifically provided in this
Section 4.
(F) Reduction of Payments In Certain Cases. Notwithstanding
anything herein to the contrary, if any amounts due to you under this Agreement
and any other plan or program of the Company constitute a "parachute payment",
as such term is defined in Section 280G(b)(2) of the Code (the "Parachute
Payment"), and the amount of the Parachute Payment, reduced by all federal,
state and local taxes applicable thereto, including the excise tax imposed
pursuant to Section 4999 of the Code, is less than the amount you would receive
if you were paid three times your "base amount," as defined in Section
280G(b)(3) of the Code, less $1.00, reduced by all federal, state and local
taxes applicable thereto, then the aggregate of the amounts constituting the
Parachute Payment shall be reduced to an amount that will equal three times
your base amount less $1.00. The determinations to be made with respect to this
Subsection 4(F) shall be made by an accounting firm (the "Auditor") jointly
selected by the Company and you and paid by the Company. The Auditor shall be a
nationally recognized United States public accounting firm that has not during
the two years preceding the date of its selection acted in any way on behalf of
the Company or any of its subsidiaries. If you and the Company cannot agree on
the accounting firm to serve as the Auditor, then you and the Company shall
each select one accounting firm, which two firms shall jointly select the
accounting firm to serve as the Auditor. If the Auditor determines that a
reduction in the aggregate of the amounts constituting the Parachute Payment is
required by this Subsection (F), you shall have the right to specify the
portion of such reduction, if any, that will be made under this Agreement and
each applicable plan or program of the Company, respectively. If you do not so
specify within, 60 days following the date of a determination by the Auditor
pursuant to the preceding sentence, the Company shall determine, in its sole
discretion, the portion of such reduction, if any, to be made under this
Agreement and each applicable plan or program of the Company, respectively.
5. Successors; Binding Agreement. (A) Assumption By Successor. The
Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you
to compensation from the Company in the same amount and on the same terms as
you would be entitled hereunder if you had terminated your employment for Good
Reason following a Change in
<PAGE>
Control, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "the Company" shall mean the Company
as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(B) Enforceability By Beneficiaries. This Agreement shall inure to
the benefit of and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If you should die while any amount would still be payable to you
hereunder had you continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to your devisee, legatee or other designee or, if there is no such designee, to
your estate.
6. Notice. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective parties as follows:
If to the Company: Secretary
Oneida Ltd.
Oneida, New York 13421
If to you: Catherine H. Suttmeier
3922 Kenwood Road
Vernon, New York 13476
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notice of change of address shall
be effective only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other arty shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement, and this Agreement
shall supersede all Prior agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, with respect
to the subject matter hereof. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York.
<PAGE>
8. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
conducted in the State of New York in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that
you shall be entitled to seek specific performance of your right to be paid
until the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
11. Contract of Employment. Nothing in this Agreement shall be
construed as giving you any right to be retained in the employ of the Company.
12. Headings. The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the parties to this
Agreement.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter, which
will then constitute our agreement on this subject.
Sincerely,
ONEIDA LTD.
By: /s/ William D. Matthews
William D. Matthews
Title: Chairman of the Board
Agreed to this 29th day of March, 1995
/s/ Catherine H. Suttmeier
Catherine H. Suttmeier
<PAGE>
EXHIBIT 10(f)
ONEIDA LTD.
Restricted Stock Award Plan
In order to reward the efforts of certain key employees of Oneida Ltd.,
the Company has established the Oneida Ltd. Restricted Stock Award Plan, as
follows:
1. For purposes of this plan, the following words shall have the following
meanings:
(a) "Board of Directors" or "Board" shall mean the Board of Directors of
Oneida Ltd.
(b) "Cause" shall mean (i) the willful failure of a Recipient to
satisfactorily perform the duties consistent with his title and position; (ii)
the commission by a Recipient of a felony, or the perpetration by a Recipient
of a dishonest act or common law fraud against the Company or any of its
subsidiaries; or (iii) any other willful act or omission which is materially
injurious to the financial condition or business reputation of the Company or
any of its subsidiaries and failure of such Recipient to correct such act or
omission within ten business days after notice by the Company of such act or
omission.
(c) "Change in Control" shall mean an event where (A) any "person," as
such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than
the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities; (B) during
any period of two consecutive years (not including any period prior to the
Effective Date), individuals who at the beginning of such period constitute the
Board of Directors, and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in clause (A), (C) or (D) of this Section) whose election
by the Board of Directors or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority thereof; (C)
the Stockholders of the Company with any other company, other than (1) a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation
<PAGE>
effected to implement a recapitalization of the Company (or similar transaction)
in which no "person" (as hereinabove defined) acquires more than 20% of the
combined voting power of the Company's then outstanding securities; or
(D) the stockholders of the Company approve a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of
all or substantially all of the Company's assets.
(d) "Committee" shall mean the Management Development and Executive
Compensation Committee of the Board of Directors. Each member of the Committee
shall be a "disinterested person" within the meaning of Rule 16b-3 of the
Exchange Act.
(e) "Common Stock" shall mean the Company's $6.25 par value common stock.
(f) "Company" shall mean Oneida Ltd.
(g) "Disability" shall mean permanent disability in accordance with the
disability policy of the Company as in effect for the Recipient on the date any
such disability is incurred.
(h) "Effective Date" shall mean February 1, 1990.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the applicable rules and regulations thereunder and any successor
provisions thereto.
(j) "Good Reason" shall mean, with respect to any Recipient, (i) failure
to elect or reelect or to appoint or reappoint such a Recipient to, or removal
of such Recipient from, the position such Recipient holds with the Company at
the commencement of the Restriction Period or a superior position; (ii)
relocation of the office of the Company where such Recipient is employed to a
location more than 50 miles from Oneida, New York; or (iii) a material
reduction in such Recipient's total annual cash compensation.
(k) "Plan" shall mean the Oneida Ltd. Restricted Stock Award Plan.
(l) "Recipient" shall mean any eligible employee of the Company, as
determined in accordance with paragraph 2 hereof, to whom an award has been
made.
(m) "Restricted Stock" shall mean a share of Common Stock granted to a
Recipient subject to the restrictions set forth herein.
(n) "Restricted Stock Agreement" shall mean the written agreement between
the Company and the recipient setting forth the terms and conditions of an
award of Restricted Stock under the Plan.
(o) "Restriction Period" shall mean the period commencing on the date of
grant of a Recipient's Restricted Stock (or such other date determined by the
Committee and set forth in the Restricted Stock Agreement) and ending not
earlier than three and not later than five
<PAGE>
years after such date of grant, unless sooner terminated in accordance with
paragraph 5 hereof. The duration of the Restriction Period shall be determined
by the Committee and set forth in the applicable Restricted Stock Agreement.
(p) "Retirement" shall mean termination or resignation of employment with
the Company on or after "normal retirement age," as such term or a similar term
is defined in the Company's qualified defined benefit retirement plan.
(q) "Special Circumstances" shall mean such events as the Committee may,
in its sole discretion, and from time to time, determine to warrant the full or
partial vesting of previously unvested Restricted Stock, provided, however,
that Special circumstances shall not include termination of a Recipient's
employment for cause.
2. Restricted Stock may be granted under the Plan only to officers and key
employees of the Company whose job performance, in the judgment of the
committee, can have a positive impact (from a financial point of view or
otherwise) on the performance of the Company.
3. (a) The Committee shall have the sole and exclusive authority to select
from the class of eligible employees specified in paragraph 2 hereof the
Recipients of awards of Restricted Stock under the Plan and to determine the
number of shares of Restricted Stock awarded to a Recipient which may vary by
Recipient.
(b) Subject to the terms of the Plan, the Committee shall have the
authority to (i) prescribe the form or forms of instruments evidencing any
awards under the Plan, (ii) adopt, amend and rescind such rules and regulations
as may be necessary or advisable, in the judgment of the Committee for the
administration of the Plan, (iii) construe and interpret the Plan and the
rules, regulations and instruments promulgated by the Committee under the Plan
and (iv) make all other determinations deemed necessary or advisable for the
administration of the Plan. All determinations by the Committee shall be
final, conclusive and binding upon the Company, the recipient and any and all
interested parties.
(c) The total number of shares of Common Stock which may be issued under
the Plan, shall be 100,000 shares (as adjusted from time to time for stock
dividends, stock splits, recapitalization or the like). Restricted stock
issued under the Plan which is forfeited by a Recipient under the terms of the
Plan or the Restricted Stock Agreement shall again be eligible for future
awards under the Plan.
4. Shares of Restricted Stock awarded to a Recipient shall vest in accordance
with the schedule set forth in each Recipient's Restricted Stock Agreement,
provided the Recipient is employed by the Company at the end of each vesting
period or otherwise meets the conditions set forth in such Agreement.
5. If a Recipient's employment terminates during the Restriction Period (i)
due to death, Retirement, Disability, termination of employment without Cause
or termination of employment by the recipient for Good Reason, or (ii) for any
reason other than termination
<PAGE>
for Cause following a Change in Control, the portion of the award then
outstanding and not vested shall fully vest as of the date of termination. If
a Recipient's employment terminates due to Special Circumstances, the
Committee, in its sole discretion, may provide that some or all of the
nonvested portion of a Recipient's Restricted Stock shall vest immediately
as of the date of such termination, provided, however, that any such
determination by the Committee shall apply only to the Recipient then
terminated and shall not govern or control the Committee's decision with
respect to any other Recipient whose employment ends under the same or similar
circumstances. Termination of employment for any reason other than the
foregoing will result in the immediate forfeiture of all nonvested Restricted
Stock then held by the terminated Recipient.
6. During the Restriction Period, the Recipient will be entitled to all
rights of a stockholder of the Company, including the right to vote the
Restricted Stock and receive dividends declared on such shares of Restricted
Stock. However, any shares of Common Stock received as a result of a stock
distribution to holders of nonvested Restricted Stock or as a stock dividend or
stock split in respect of shares of Restricted Stock which are nonvested as of
the date thereof shall be subject to the same restrictions as such shares of
nonvested Restricted Stock.
7. The Restricted Stock shall be non-transferable until such time as it
vests, subject to further restrictions on transfer as may be applicable under
Federal or state securities laws of the rules and regulations or any exchange
or automated quotation system on which the Common Stock is listed. The stock
certificates evidencing an award of Restricted Stock shall be registered in the
name of the Recipient and shall bear a legend referring to the terms,
conditions and restrictions applicable to such Restricted Stock under the Plan
or the Restricted Stock Agreement or under any applicable provisions of Federal
or state securities laws or the rules and regulations of any applicable
exchange or automated quotation system. Physical possession or custody of the
certificates will be retained by the Company until such time as the Restricted
Stock has vested.
8. The value of a Restricted Stock award shall not be includable for
determining compensation or benefits under any other Company compensation or
benefit plan, unless such inclusion is required by the terms of such other plan
or applicable law.
9. Nothing in this Plan or the Restricted Stock Agreement shall confer on a
Recipient any right to continue in the employ of the Company or affect in any
way the right of the Company to terminate such Recipient's employment without
notice, at any time, for any or no reason.
10. The Board of Directors may amend or terminate the Plan at any time;
provided, however, that any amendment which must be approved by the
shareholders of the Company in order to maintain the continued qualification of
the Plan under Rule 16b-3 of the Exchange Act shall not be effective unless and
until such shareholder approval has been obtained in compliance therewith; and
provided, further, that no amendment to the Plan shall impair any
<PAGE>
rights of a Recipient with respect to awards under the Plan which are
outstanding as of the effective date of such amendment without the prior
written consent of the affected Recipient.
11. Prior to the delivery to the Recipient of stock certificates in respect of
Restricted Stock which has vested, the Company and the Recipient shall make an
arrangement for the withholding of all applicable Federal, state and local
taxes. The Committee, in its sole discretion, may permit a Recipient to
satisfy some or all of this withholding obligation by surrendering that number
of shares of Common Stock then owned by the Recipient (which shares may be
either shares of vested Restricted Stock or other shares of Common Stock) with
a fair market value as of the date of such surrender equal to the value of the
withholding obligation to be satisfied with shares of Common Stock. In
addition, in the event that the Recipient is subject to the provisions of
Section 16 of the Exchange Act, the following shall apply: (i) the election by
the Recipient to use Common Stock to satisfy the withholding obligation shall
be made either not less than six months prior to the applicable vesting date of
the Restricted Stock or during one of the "window periods" described in Rule
16b-3 of the Exchange Act; and (ii) the fair market value, determined as of the
date of such withholding, of the shares so applied shall not exceed the maximum
marginal tax rate arising as a result of the vesting of the shares of
Restricted Stock in respect of which such withholding election is made.
12. The Plan and the Restricted Stock Agreements shall be governed by, and
construed and administered in accordance with, the laws of the State of New
York.
13. The Plan shall be effective as of the Effective Date and, unless
terminated earlier in accordance with paragraph 10 hereof, shall terminate,
except with respect to outstanding awards, on the Tenth anniversary of the
Effective Date.
14. Notwithstanding any of the foregoing, the validity and effectiveness of
this Plan is contingent upon its approval by shareholders at the May 30, 1990
Annual Meeting. Dividends accruing from shares issued under the Plan will be
held in escrow and voting rights arising from such shares will be suspended
until after shareholders approve the Plan.
<PAGE>
<TABLE>
EXHIBIT 11
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
TABULATION OF AVERAGE NUMBER OF COMMON SHARES FOR COMPUTATION OF PRIMARY AND
FULLY DILUTED EARNINGS PER SHARE
<CAPTION>
Common Shares
(in thousands)
Primary Earnings Fully Diluted
Per Share Earnings Per Share
Actual Used in Actual Used in
Number Average Number Average
<S> <C> <C> <C> <C>
Year Ended JANUARY 29, 1994:
Shares outstanding
beginning................10,205 10,205 10,205 10,205
Shares issued under:
Stock purchase plan..........22 22
Dividend reinvestment
plan.....................45 45
Stock option plan............14 14
ESOP shares allocated to
participants..............212 103 212 103
Common share equivalents
under employee stock
purchase stock option
and dividend
reinvestment plans...................85 125
TOTAL...............10,498 10,393 10,498 10,433
Year Ended JANUARY 28, 1995:
Shares outstanding
beginning.................10,498 10,498 10,498 10,498
Shares issued under:
Stock purchase plan..........110 110
Stock option plan............40 40
ESOP shares allocated to
participants..............212 193 212 193
Common share equivalents
under employee stock
purchase stock option
and dividend
reinvestment plans...................93 93
TOTAL...............10,902 10,784 10,902 10,784
Year Ended JANUARY 27, 1996
Shares outstanding
beginning.................10,902 10,902 10,902 10,902
Shares issued under:
Stock purchase plan..........47 47
Treasury stock - net.........3 3
Stock option plan............81 81
Purchase of ESOP shares......(34) 15 (34) 15
Common share equivalents
under employee stock
purchase stock option
and dividend
reinvestment plans...................132 13
TOTAL...............10,999 11,019 10,999 11,020
</TABLE>
<PAGE>
<TABLE>
ONEIDA LTD.
AND CONSOLIDATED SUBSIDIARIES
Calculation of Earnings Per Share
(Thousands except per share amounts)
January 27, 1996 January 28, 1995 January 29, 1994
<S> <C> <C> <C>
Net income....................$18,088 $13,493 $10,662
Less preferred dividends.....134 134 135
Net income (loss) for
primary and fully
diluted earnings
per share.................17,954 13,359 10,527
Average common shares:
Primary.................11,019 10,784 10,393
Fully diluted...........11,020 10,784 10,433
Earnings per share:
Primary.................1.63 1.24 1.01
Fully diluted...........1.63 1.24 1.01
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 13
CONSOLIDATED STATEMENT OF OPERATIONS
ONEIDA LTD.
For the years ended January 1996, 1995 and 1994
(Thousands except per share amounts)
<CAPTION>
Year ended in January 1996 1995 1994
<S> <C> <C> <C>
NET SALES.........................$513,799 $492,954 $455,192
COST OF SALES.....................369,648 360,098 328,623
GROSS MARGIN......................144,151 132,098 126,569
OPERATING REVENUES................482 468 477
144,633 133,324 127,046
OPERATING EXPENSES:
Selling, advertising
and distribution...............73,425 72,550 69,307
General and
administrative.................31,510 29,397 30,677
Total....................104,935 101,947 100,074
INCOME FROM OPERATIONS............39,698 31,377 26,972
OTHER EXPENSES....................1,289 1,182 1,218
INTEREST EXPENSE..................8,639 7,362 7,751
INCOME BEFORE INCOME
TAXES..........................29,770 22,833 18,003
PROVISIONS FOR INCOME
TAXES..........................11,682 9,340 7,341
NET INCOME........................$18,088 13,493 $10,662
EARNINGS PER SHARE OF
COMMON STOCK...................$1.63 $1.24 $1.01
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEET
ONEIDA LTD.
<CAPTION>
(Thousands)
ASSETS January 27, 1996 January 28, 1995
<S> <C> <C>
CURRENT ASSETS:
Cash .............................$2,847 $2,207
Receivables ......................57,152 64,873
Inventories ......................145,763 135,810
Other current assets .............9,471 9,234
Total current assets ....215,233 212,124
PROPERTY, PLANT AND EQUIPMENT:
Land and buildings ...............58,338 57,566
Machinery and equipment ..........193,420 184,632
Total....................251,758 242,198
Less accumulated depreciation ....136,559 129,906
Property, plant and
equipment - net .......115,199 112,292
OTHER ASSETS:
Deferred income taxes ............9,728 7,055
Other ............................4,203 4,559
TOTAL ...................$344,363 $336,030
LIABILITIES AND STOCKHOLDERS' (Thousands)
EQUITY January 27, 1996 January 28, 1995
CURRENT LIABILITIES:
Short-term debt ..................24,067 27,555
Accounts payable .................26,621 27,625
Accrued liabilities ..............38,314 33,004
Current installments
of long-term debt ............4,749 5,022
Total current
liabilities............93,751 93,206
LONG-TERM DEBT ...................72,129 77,278
OTHER LIABILITIES:
Accrued postretirement liability..61,800 60,509
Accrued pension liability ........5,209 4,618
Other liabilities ................5,174 5,223
Total ........ ..........72,183 70,350
<PAGE>
STOCKHOLDERS' EQUITY:
Cumulative 6% preferredstock-$25
par value; authorized 95,660 shares,
issued 88,989 and 89,202 shares,
respectively; callable at
$30 per share...................2,225 2,230
Common stock - $l .00 par value;
authorized 24,000,000 shares,
issued 11,706,224 and 11,579,964
shares, respectively ...........11,706 11,580
Additional paid-in capital .......81,150 79,740
Retained earnings ............... 28,936 16,255
Equity adjustment from
translation .....................(8,614) (6,035)
Less cost of common stock held in
treasury; 672,617 and 678,298
shares, respectively ...........(8,563) (8,574)
Less unallocated ESOP shares of
common stock of 34,347 .........(540)
Stockholders' equity ....106,300 95,196
TOTAL ...................$344,363 $336,030
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
ONEIDA LTD.
for the years ended January 1996, 1995 and 1994
<CAPTION> (Thousands)
Year ended in January 1996 1995 1994
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income...............................$18,088 $13,493 $10,662
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation ...................15,402 14,345 14,079
ESOP shares allocated to
participants ..............................2,753 2,753
Deferred taxes and other
non-cash charges ............(1,018) (2,889) (1,707)
Decrease (increase) in
operating assets:
Receivables ...............7,655 (10,023) 1,130
Inventories ...............(10,466) (8,181) (2,143)
Other current assets.......(248) 220 888
Other assets...............60 (84) 249
Increase (decrease) in
accounts payable ............(1,056) (162) 4,161
Increase in accrued
liabilities ................. 5,036 4,658 4,165
Net cash provided by
operating activities ...33,453 14,130 34,237
CASH FLOW FROM INVESTING ACTIVITIES:
Property, plant and
equipment expenditures ..............(20,319) (18,532) (13,800)
Retirement of property,
plant and equipment .................962 1,241 540
Other, net ..............................67 211 1,045
Net cash used in
investing activities ...(19,290) (17,080) (12,215)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from issuance
of common stock .....................1,809 1,982 910
Purchase of treasury stock, net .........(268) (3) (19)
Purchase of ESOP Shares .................(540)
Net payment under short-term debt........(3,488) (631) (6,981)
Proceeds from issuance of
long-term debt .......................5,000 7,000 33,000
Payment of long-term debt ...............(10,423) (899) (42,582)
Dividends paid ..........................(5,407) (5,367) (5,264)
Net cash provided by (used in)
financing activities ....(13,317) 2,082 (20,936)
EFFECT OF EXCHANGE RATE CHANGES
ON CASH .............................(206) (152) (62)
NET INCREASE (DECREASE) IN CASH .........640 (1,020) (1,024)
CASH AT BEGINNING OF YEAR ...............2,207 3,227 2,203
CASH AT END OF YEAR .....................$2,847 $2,207 $3,227
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid ..................$8,800 $6,860 $8,272
Income taxes paid ..............9,563 8,873 4,346
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and
its subsidiaries. The Company uses a 52-53 week fiscal year ending on the last
Saturday in January. The financial statements of certain foreign subsidiaries
are consolidated with those of the parent on the basis of years ending in
December.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the dates of the
financial statements and the reported amounts of revenues and expenses during
the reporting periods. Actual results could differ from those estimates.
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated principally at
the year-end rates of exchange and revenue and expense accounts are translated
at average rates of exchange during the year. Net transaction gains and losses
reflected in the statement of operations were not material.
Earnings Per Share
Earnings per share are based on the weighted average number of shares of common
stock outstanding. The weighted average number of shares for earnings per share
includes the potentially dilutive effect of shares issuable under the employee
stock purchase, stock option and dividend reinvestment plans. No fully diluted
earnings per share are presented as the difference between primary and fully
diluted earnings per share is not significant.
Inventories
Inventories are valued at the lower of cost or market. Approximately 54% of
inventories are valued under the last-in, first-out (LIFO) method, with the
remainder valued under the first-in, first -out (FIFO) method.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is provided over
the estimated useful lives of the related assets, generally using the
straight-line method.
Interest relating to the cost of acquiring certain fixed assets is capitalized
and amortized over the asset's estimated useful life.
Fair Value of Financial Instruments
The estimated fair market values of the Company's financial instruments,
principally long-term debt, approximate their recorded values.
Recently Issued Accounting Pronouncements
The Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of" (FAS 121) in March 1995,
which is effective for Oneida beginning January 28, 1996. FAS 121 requires
that an impairment loss be recognized when circumstances indicate that the
carrying amount of an asset may not be recoverable. Historically, Oneida has
used a methodology similar to FAS 121 in determining the amount of an
impairment. Accordingly, the issuance of FAS 121 will not have a significant
impact on Oneida's consolidated financial statements.
<PAGE>
In October 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (FAS 123). As permitted by
FAS 123, Oneida will continue to apply the recognition and measurement
provisions of Accounting Principles Board Opinion No. 25 "Accounting for Stock
Issued to Employees" and adopt the disclosure requirements of FAS 123 beginning
in 1996. Accordingly, the issuance of FAS 123 will not impact on Oneida's
consolidated financial statements.
2. INCOME TAXES
The Company accounts for taxes in accordance with Statement of Financial
Accounting Standards (FAS) No. 109, Accounting for Income Taxes, which
requires the use of the liability method of computing deferred income taxes.
Under the liability method, deferred income taxes are based on the tax effect
of temporary differences between the financial statement and tax bases of
assets and liabilities and are adjusted for tax rate changes as they occur.
The components of the deferred tax assets and liabilities are as follows:
<TABLE>
<CAPTION>
(Thousands)
Net Assets (Liabilities)
1996 1995
<S> <C> <S>
Deferred Income Taxes:
Postretirement benefits................$24,574 $24,004
Employee benefits......................8,000 7,039
Total deferred tax assets..............32,574 31,043
Depreciation...........................(17,409) (17,951)
Other..................................(656) (2,437)
Total deferred tax liabilities.........(18,065) (20,388)
Total..............................14,509 10,655
Current deferred.......................4,781 3,600
Non-current deferred...................$9,728 $7,055
</TABLE>
<TABLE>
The provision for income taxes consists of the following:
<CAPTION>
(Thousands)
1996 1995 1994
<S> <C> <C> <C>
Current tax expense:
U.S. Federal.................$13,234 $8,389 $7,612
Foreign......................1,466 570 155
State........................836 928 598
15,536 9,887 8,365
Deferred tax expense..............(3,854) (547) (1,024)
Total........................$11,682 $9,340 $7,341
</TABLE>
The income tax provision differed from the total income tax expense as computed
by applying the statutory U.S. Federal income tax rate to income before income
taxes. The reasons for the differences are as follows:
<TABLE>
<CAPTION>
(Thousands)
1996 1995 1994
<S> <C> <C> <C>
Statutory U.S. Federal taxes......$10,419 $7,992 $6,301
Difference due to:
Foreign taxes................(451) (20) (383)
State taxes..................543 603 387
Other........................1,171 765 1,036
Provision for taxes..........$11,682 $9,340 $7,341
</TABLE>
<PAGE>
The following presents the U.S. and non-U.S. components of income before income
taxes:
<TABLE>
<CAPTION>
(Thousands)
1996 1995 1994
<S> <C> <C> <C>
U.S.income........................$23,907 $20,177 $16,076
Non-U.S. income...................5,863 2,656 1,927
Total........................$29,770 $22,833 $18,003
</TABLE>
3. RECEIVABLES
Receivables by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1996 1995
<S> <C> <C>
Accounts receivable.........................$56,649 $63,875
Other accounts and notes receivable.........2,200 2,663
Less allowance for doubtful accounts........(1,697) (1,665)
Recievables............................$57,152 $64,873
</TABLE>
4. INVENTORIES
Inventories by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1996 1995
<S> <C> <C>
Finished goods.........................$101,864 $99,218
Goods in process.......................22,796 22,668
Raw materials and supplies.............21,103 13,924
Total.........................$145,763 $135,810
Excess of replacement cost
over LIFO value of inventories......$34,700 $31,400
</TABLE>
5. LEASES
The Company leases many factory store and warehouse facilities. It also leases
transportation and manufacturing equipment under operating leases. Lease
expense charged to operations was $7,944,000, $8,208,000 and $8,010,000, for
1996, 1995 and 1994, respectively.
Future minimum lease payments and related sublease income for all
non-cancelable operating leases having a remaining term in excess of one year
at January 1996 are as follows:
<TABLE>
<CAPTION>
(Thousands)
Lease Sublease
Commitment Income
<S> <C> <C>
1997.........................$7,484 $1,249
1998.........................6,533 1,309
1999.........................5,633 1,271
2000.........................4,442 539
2001.........................2,758 362
Remainder through 2008.......13,846 189
Total...................$40,696 $4,919
</TABLE>
Under the provisions of some leases, the Company pays taxes, maintenance,
insurance and other operating expenses related to leased premises. Sublease
income relates to an office facility for which the Company has currently sublet
all of the facility.
<PAGE>
6. SHORT-TERM DEBT AND COMPENSATING BALANCES
The Company has been granted lines of credit to borrow at interest rates up to
the prime rate from various banks. Certain credit lines call for the main-
tenance of compensating balances of up to 1.25% of the credit line or fees in
lieu thereof. At January 1996, the Company had lines of credit of $86,000,000
of which $62,500,000 was available.
The average outstanding balances of short-term debt for the fiscal years ending
January 1996 and January 1995 were $35,109,000 and $38,148,000, respectively,
computed by using daily balances and the weighted interest rates of 6.5% in
1996 and 5.0% in 1995.
7. ACCRUED LIABILITIES
Accrued liabilities by major classification are as follows:
<TABLE>
<CAPTION>
(Thousands)
1996 1995
<S> <C> <C>
Accrued vacation pay...................$6,769 $6,441
Accrued wage incentive.................8,167 6,456
Accrued workmen's compensation.........7,251 6,252
Accrued wages and commissions..........4,928 4,741
Accrued income taxes...................3,282 1,882
Dividends payable......................1,357 1,342
Other accruals.........................6,560 5,890
Total..................................$38,314 $33,004
</TABLE>
8. LONG-TERM DEBT
Long-term debt at January 1996 and 1995 consisted of the following:
<TABLE>
<CAPTION>
(Thousands)
1996 1995
<S> <C> <C>
Senior notes, 8.52% due January
15, 2002, payable $4,285,710
$25,714 $30,000 annually................$25,714 $30,000
Notes payable at various interest
rates (6.50% - 6.63%), due
February 20, 2001.......................40,000 40,000
Industrial Revenue Bond, Chemical
Bank Tax Exempt Money Market
Index rate, due August 1, 2005..........9,000 9,000
Other debt at various interest
rates (7% -9.25%) due
through 2000............................2,164 3,300
Total..............................76,878 82,300
Less amounts due currently..................4,749 5,022
Long-term debt..............................$72,129 $77,278
</TABLE>
Certain note agreements restrict borrowings, business investments, acquisition
of the Company's stock and payment of cash dividends. The Industrial Revenue
Bonds are collateralized by the facilities acquired through the proceeds of the
related bond issuances and letters of credit.
The aggregate amounts of long-term maturities due each year are as follows:
<TABLE>
<S> <C>
1997...................................$4,749
1998...................................4,789
1999...................................4,831
2000...................................4,752
2001...................................4,471
After..................................53,286
Total.........................$76,878
</TABLE>
<PAGE>
Total interest costs incurred by the Company are presented net of capitalized
interest of $505,000, $354,000, and $390,000 for 1996, 1995 and 1994,
respectively.
9. RETIREMENT BENEFIT AND EMPLOYEE SECURITY PLANS
Pension Plans
The Company maintains defined contribution and defined benefit plans covering
substantially all employees in the United States and Canada. Employees of the
Silversmiths Division are covered by both an Employee Stock Ownership Plan
(ESOP), and a defined benefit floor plan. Dividends on all shares are added
to participant accounts. Future contributions to the ESOP will be primarily in
the form of cash.
The Company maintains salary deferral (401-K) plans covering substantially all
employees. Employees of the Company's industrial wire subsidiary are covered
under a defined contribution plan, for which contributions are determined based
on that subsidiary's operating income.
The net periodic pension cost for the Company's various defined benefit plans
for 1996, 1995 and 1994 were as follows:
<TABLE>
<CAPTION>
(Thousands)
1996 1995 1994
<S> <C> <C> <C>
Service cost - benefits earned
during the year..................$1,509 $1,031 $1,028
Interest cost on projected
benefit obligation...............2,243 1,501 1,569
Actual return on plan assets.........(3,090) 278 (1,306)
Net amortization and deferral........1,627 (1,448) (24)
Net periodic pension cost...$2,289 $1,362 $1,267
</TABLE>
Plan assets consist primarily of stocks, bonds, and cash equivalents. The
following table presents a reconciliation of the funded status of the plans and
assumptions used at January 1996 and 1995.
<TABLE>
<CAPTION>
(Thousands)
U.S. PLANS FOREIGN PLAN
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Plan assets at fair value.........$15,43 $11,50 $5,703 $5,346
Actuarial present value of benefit
obligations:
Vested benefits..........16,614 12,568 4,272 4,198
Nonvested benefits.......16,740 10,884 193 157
Accumulated benefit obligation....33,354 23,452 4,465 4,355
Projected future salary
increases......................910 524 1,020 921
Projected benefit obligation......34,264 23,976 5,485 5,276
Plan assets more (less) than
projected benefit
obligation....................(18,825) (12,468) 218 70
Unrecognized net losses...........14,621 9,117 1,168 1,402
Unrecognized prior
service cost...................396 285 9 12
Unrecognized net asset............(1,401) (1,552) (368) (450)
Accrued pension asset
(liability)............. $(5,209) $(4,618) $1,027 $1,034
Discount rate.....................7.0% 8.2% 7.5% 7.5%
Expected long-term rate
of return on assets...........8.5% 8.5% 8.5% 8.5%
Rate of increase in
compensation levels...........4.5% 4.5% 5.0% 5.0%
</TABLE>
<PAGE>
The net pension cost associated with the Company's defined contribution plans,
including the cost of shares allocated to the ESOP, was $2,022,000, $3,377,000
and $3,166,000, for 1996, 1995 and 1994, respectively.
Postretirement Health Care and Life Insurance Benefits
The Company reimburses a portion of the health care and life insurance benefits
for the majority of its retired employees who have attained specified age and
service requirements.
Net periodic postretirement benefit cost for 1996, 1995 and 1994 included the
following components:
<TABLE>
<CAPTION>
(Thousands)
1996 1995 1994
<S> <C> <C> <C>
Service cost of benefits earned........$1,048 $1,290 $1,444
Interest cost on accumulated
postretirement benefit
obligation.........................3,694 3,735 4,291
Net amortization and deferral..........(947) (722) (596)
Net periodic postretirement
benefit cost.......................$3,795 $4,303 $5,139
</TABLE>
The following table sets forth the status of the Company's postretirement
plans, which are unfunded, at January 1996 and January 1995:
<TABLE>
<CAPTION>
(Thousands)
1995 1994
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees...........................$27,712 $27,168
Fully eligible active
plan participants...............7,079 5,943
Other active plan
participants....................20,995 15,008
Accrued postretirement
benefit.................................55,786 48,119
Unrecognized prior service
cost....................................8,958 9,063
Unrecognized net gain (loss)................(1,034) 5,327
Accrued postretirement
benefit.........................63,710 62,509
Less current portion........................1,910 2,000
Accrued Postretirement
benefit.........................61,800 60,509
Discount rate...............................7.1% 8.4%
Health care inflation rate..................9.0% 10.0%
</TABLE>
The 1996 health care inflation rate was assumed to decrease gradually to 5% by
the year 2003 and remain at that level thereafter. An increase in the assumed
health care inflation rate by 1% per year would increase the accumulated
postretirement benefit obligation at January 1996 by $4,657,000 and the net
postretirement benefit cost for 1996 by $586,000.
Employee Security Plan
The Company maintains an employee security plan which provides severance
benefits for all eligible employees of the Company and its subsidiaries who
lose their jobs in the event of a change in control as defined by the plan.
Employees are eligible if they have one year or more of service and are not
covered by a collective bargaining agreement. The plan provides two and one
half months of pay for each year of service, up to twenty-four months maximum,
and a continuation of health care and life insurance benefits on the same
basis.
<PAGE>
10. STOCK PURCHASE PLAN
At January 1996, under the terms of a stock purchase plan, the Company has
reserved 1,065,199 shares of common stock for issuance to its employees. The
purchase price of the stock is the lower of 90% of the market price at the time
of grant or at the time of exercise. The option price for the shares
outstanding at January 1996 is $13.28.
<TABLE>
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Outstanding at beginning
of year.......................453,010 426,770 422,073
Exercised during the year.........(45,701) (110,175) (21,797)
Expired during the year...........(440,839) (322,712) (423,891)
Granted during the year...........482,943 459,127 450,385
Outstanding at end of year........449,413 453,010 26,770
Average per share price
of rights exercised...........$13.83 $11.00 $10.68
</TABLE>
Rights to purchase are exercisable on date of grant. Unexercised rights expire
on June 30 of each year and become available for future grants. Employees are
entitled to purchase one share of common stock for each $250 of their earnings
for the calendar year preceding July 1.
The consolidated statement of operations does not contain any charges as a
result of accounting for this plan.
11. STOCK OPTION AND RIGHTS PLANS
At January 1996, under the terms of its incentive stock option plans, the
Company has reserved shares of common stock for issuance to selected key
employees.
Options were granted at prices equal to the fair market value on the date of
the grant and may be paid for in cash or by tendering previously held common
stock of the Company at the time the option is exercised.
Stock options are non-transferable other than on death, are partially
exercisable one year from the date of grant and expire ten years from date of
grant.
<TABLE>
<CAPTION>
Option Price
No. of Per (Thousands)
Shares Share Total
<S> <C> <C> <C>
Outstanding at:
January 1993 .......631,455 9.00-15.00 $8,207
Granted ............154,000 11.38 1,752
Exercised ..........(11,000) 9.00 (99)
Expired ............(74,140) 9.00-15.00 (963)
Outstanding at:
January 1994 .......700,315 9.00-15.00 8,897
Granted ............152,000 13.63 2,071
Exercised ..........(107,500) 9.00-15.00 (1,290)
Expired ............(6,936) 9.00-15.00 (86)
Outstanding at:
January 1995 .......737,879 9.00 -15.00 9,592
Exercised ..........(106,086) 9.00-15.00 (1,266)
Outstanding at:
January 1996 .......631,793 9.00-15.00 $9,326
Shares remaining available
for grant ................194,153
Total exercisable as of
January 1996 .............397,393
</TABLE>
At the time options are exercised the proceeds of the shares issued are
credited to the related stockholders' equity accounts. There are no charges to
income in connection with the options.
<PAGE>
The Company maintains a shareholder rights plan. The rights were distributed to
shareholders at the rate of one right per share. The rights entitle the holder
to purchase one additional share of voting common stock at a substantial
discount and are exercisable only in the event of the acquisition of 20% or
more of the Company's voting common stock, or the commencement of a tender or
exchange offer under which the offeror would own 30% or more of the Company's
voting common stock. The rights will expire on December 13, 1999.
12. OPERATIONS BY INDUSTRY SEGMENT
The Company's operations and assets are in two principal industries: tableware
products and industrial wire products. The Company's tableware operations,
which are located in the United States, Canada, Mexico, Italy and the United
Kingdom, involve the manufacture and distribution of stainless, plated and
sterling flatware, silverplated and stainless holloware, cutlery and crystal.
These products are sold directly to a broad base of retail outlets including
department stores, mass merchandisers and chain stores. Additionally, these
products are sold to special sales markets, which include customers who use
them as premiums, incentives and business gifts. The Company also sells
flatware, holloware and commercial chinaware directly or through distributors
to foodservice operations worldwide, including hotels, restaurants, airlines,
schools and health care facilities.
The Company's industrial wire division produces copper conducting wire, as well
as tin or alloy plated wire for a wide range of customers in electronics,
transportation, industrial/energy, construction and consumer products markets.
Information as to the Company's operations by industry segment for 1996, 1995
and 1994 is summarized below:
<TABLE>
<CAPTION>
(Thousands)
1996 1995 1994
<S> <C> <C> <C>
NET SALES AND OTHER OPERATING
REVENUES:
Tableware products................$364,293 $336,300 $322,988
Industrial wire products..........149,988 157,122 132,681
Total....................$514,281 $493,422 $455,669
OPERATING PROFIT:
Tableware products ...............$37,235 $28,205 $26,917
Industrial wire products .........5,900 6,829 4,127
Operating profit .................43,135 35,034 31,044
Corporate expense ................4,726 4,839 5,290
Interest expense .................8,639 7,362 7,751
Income before income taxes .......$29,770 $22,833 $18,033
IDENTIFIABLE ASSETS:
Tableware products................$271,596 $255,073 $246,510
Industrial wire products .........69,920 78,750 68,768
Total ...................341,516 333,823 315,278
Corporate Assets-Cash ............2,847 2,207 3,227
Total ...................$344,363 $336,030 $318,505
DEPRECIATION EXPENSE:
Tableware products................$10,615 $9,712 $9,681
Industrial wire products..........4,787 4,633 4,398
Total....................$15,402 $14,345 $14,079
PROPERTY, PLANT AND EQUIPMENT
ADDITIONS:
Tableware products ...............$12,434 $11,443 $10,587
Industrial wire products .........6,888 5,747 2,693
Total ...................$19,322 $17,190 $13,280
</TABLE>
Foreign operations of the Company are not material and are therefore not
separately set forth.
<PAGE>
13. CHANGES IN STOCKHOLDERS' EQUITY
Following is a summary of the changes in Stockholders' Equity for the three
years ended January 1996
<TABLE>
<CAPTION>
(Thousands)
Equity
Adjust- Un-
Addt'l ment allocated
Common Common Pref'd Paid-in Ret'd from Treasury ESOP
Shares Stock Stock Capital Earnings Translation Stock Shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
Jan. 1993......... 11,361,279 $11,361 $2,271 $77,725 $2,731 $(1,667) $(9,262) $(5,495)
Stock purchase
plan............ 21,797 22 211
dividend
reinvestment
plan............ 44,818 45 517
stock option
plan............ 4,996 5 29
Purchase/
retirement
of treasury
stock........... (12,666) (13) (35) (131) 160
Cash dividends
declared ($.48
per share)............................................. (5,264)
Net Income............................................... 10,662
ESOP shares
allocated to
participants............................................................................. 2,753
Equity Adjustment
from translation.............................................................. (794)
Balance
Jan. 1994......... 11,429,843 11,430 2,236 78,423 8,129 (2,461) (9,102) (2,742)
Stock purchase
plan............ 110,175 110 1,112
dividend
reinvestment
plan............ 80 528 (11)
Restricted stock
plan............ 7,920 8 118
stock option
plan............ 32,026 32 (6) 7
Cash dividends
declared ($.48
per share)............................................. (5,367)
Net Income............................................... 13,493
ESOP shares
allocated to
participants............................................................................. 2,753
Equity Adjustment
from translation......................................................................... (3,574)
Balance
Jan. 1995......... 11,579,964 11,580 2,230 79,740 16,255 (6,035) (8,574)
Stock purchase
plan............ 45,701 46 586
dividend
reinvestment
plan............ 56 276
Restricted stock
plan............ 4,348 4 67
Purchase/
retirement of
treasury stock....................... (5) 2 (265)
stock option
plan............ 76,211 76 699
Purchase of
ESOP shares.............................................................................. (540)
Cash dividends
declared ($.48
per share)............................................. (5,407)
Net Income............................................... 18,088
Equity Adjustment
from translation.............................................................. (2,579)
Balance
Jan. 1996......... 11,706,224 $11,706 $2,225 $81,150 $28,936 $(8,614) $(8,563) $(540)
</TABLE>
<PAGE>
14. SELECTED QUARTERLY FINANCIAL DATA (Unaudited)
<TABLE>
<CAPTION>
(Thousands except per share amounts)
Quarter Ended
1996 April 29, July 29, October 28, January 27,
1995 1995 1995 1996
<S> <C> <C> <C> <C>
Net sales ............. $121,807 $124,898 $139,964 $127,130
Gross margin........... 33,964 34,576 39,060 36,551
Net income ............ 3,385 3,450 5,345 5,908
Earnings per share .... .30 .31 .48 .53
Quarter Ended
1995 April 30, July 30, October 29, January 28,
1994 1994 1994 1995
Net sales ............. $111,022 $115,561 $134,212 $132,159
Gross margin .......... 29,186 30,736 35,563 37,371
Net income ............ 1,706 1,938 4,368 5,481
Earnings per share .... .16 .18 .40 .50
</TABLE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of Oneida Ltd.
We have audited the accompanying consolidated balance sheet of Oneida Ltd. as
of January 27, 1996 and January 28, 1995 and the related consolidated
statements of operations and cash flows for each of the three years in the
period ended January 27, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Oneida Ltd. as of
January 27, 1996 and January 28, 1995, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended
January 27, 1996 in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
a professional services firm
/s/ Coopers & Lybrand L.L.P.
Syracuse, New York
February 22, 1996
<PAGE>
<TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Thousands)
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Net Sales ...................$513,799 $492,954 $455,192
Gross Margin ................144,151 132,856 126,569
% Net Sales.............28.1% 27.0% 27.8%
Operating Expense ...........104,935 101,947 100,074
% Net Sales.............20.4% 20.7% 22.0%
</TABLE>
Fiscal year ended January 1996 compared with fiscal year ended January 1995
Operations
1996 consolidated net sales were $20,845, or 4.2% higher than in the previous
year. Sales of tableware products rose 8.3 % over 1995 levels. The tableware
division registered increases in both the domestic consumer and foodservice
markets, as well as in international sales. Tableware sales benefited from the
introduction of several well received new patterns and increased distribution
efficiencies. In particular, significant sales increases were achieved in the
retail department store and mas merchandise markets. Sales of the industrial
wire division decreased by $7,133 or 4.5%. The industrial wire facility had a
significant decline in the volume of wire produced this year. This decrease
was somewhat offset by rising copper prices (which are passed along to
customers) and improved product mix.
Gross margin as a percent of net sales increased to 28.1% from 27.0% in 1995,
primarily because of improved tableware volume and manufacturing efficiency.
Camden's gross profit margin remained stable in 1996 despite copper costs
being approximately 25% higher on average that the prior year. If the
increased copper costs are factored out, the Company's 1996 consolidated gross
profit percentage would show a pro forma rate of 29.0%.
Operating expenses increased by $2,988 or 2.9% over 1995. Selling and
distribution costs rose by 1.2%. These costs increased by 3% at the tableware
division and decreased by 14% at Camden Wire primarily due to sales volume
fluctuations. General and administrative costs increased by 7.2%., principally
due to higher employee profit sharing accruals.
1996 interest expense (prior to capitalized interest) increased by $1,428 or
18.5%. The rise in interest expense was principally due to the effect of
increasing interest rates on the Company's borrowings in 1996 versus 1995.
Liquidity and Financial Resources
During the current year, the Company has invested approximately $20,300 in
capital additions, primarily in its manufacturing facilities. In 1996, $4,200
was spent as part of a $23,500 multi-year expansion plan for the industrial
wire division. Camden Wire is constructing a new plant in El Paso, Texas and
transferring a portion of its net assets there. It is also modernizing the
Pine Bluff, Arkansas and Camden, New York facilities. The Company plans to
spend $22,000 on capital projects in 1997. Roughly 30% of this amount will be
allocated to the Camden expansion plan.
Total outstanding debt increased by $8,910 or 8.1% during 1996. Debt as a
percentage of total capital decreased to 48.7% from 53.6% one year ago. Cash
from 1997 operations is expected to provide sufficient liquidity for all of the
Company's capital needs.
As a result of the recent devaluation of the Mexican peso in 1996, the Company
has recorded, as a negative adjustment to equity, a $2,300 charge which relates
to the effect of the devaluation on the Company's long-term investments in its
Mexican assets. While this charge is in accordance with generally accepted
accounting principles, management believes that devaluation has made the
Company's products manufactured in Mexico more cost competitive.
<PAGE>
Fiscal year ended January 1995 compared with fiscal year ended January 1994
Operations
1995 consolidated net sales were $37,762, or 8.3% higher than in the previous
year. Approximately two thirds of this increase was attributable to the
industrial wire division. Sales of wire products increased by 18.4% over 1994,
primarily as a result of significantly higher copper costs (which are passed
along to customers) throughout fiscal 1995. Sales of tableware products rose
4.1% over 1994 levels. Both the consumer and foodservice tableware divisions
recorded higher sales volume. Consumer sales were below 1994 during the first
half of the year, but ended slightly higher for the year with a very strong
second half. Foodservice sales were up throughout the year.
Gross margin as a percent of net sales decreased to 27.0% from 27.8% in 1994.
When the higher copper costs incurred by the industrial wire division are
factored out, the gross margin percentage was unchanged from 1994.
Operating expenses increased by $1,873, or 1.9% over 1994. Selling and
distribution costs rose by 4.5%, in direct relation to the higher sales level
realized by the Company this year. In contrast, general and administrative
costs decreased by 4.2%.
1995 Interest expense (prior to capitalized interest) decreased $425 or 5.2%.
Although the Company's average debt level decreased in 1995, rising interest
rates offset approximately one-third of the potential benefit.
Dividends and Price Range of the Company's Common Stock
The Company's Common Stock is traded on the New York Stock Exchange and the
total number of stockholders of record at January 1996 was 4,297. The
following table sets forth the high and low sales prices per share of the
Company's Common Stock for the periods indicated on the Composite Tape, and
cash dividends declared for the quarters in the Company's 1996 and 1995 fiscal
years.
<TABLE>
<CAPTION>
JANUARY 1996 JANUARY 1995
Fiscal Dividends Fiscal Dividends
Quarter High Low Per Share Quarter High Low Per Share
<S> <C> <C> <C> <C> <C> <C> <C>
First.......$15.25 $13.38 $.12 First.......$16.63 $14.00 $.12
Second......15.88 14.00 .12 Second......16.00 13.50 .12
Third.......16.75 15.00 .12 Third.......14.63 13.38 .12
Fourth......17.63 15.13 .12 Fourth......15.00 12.38 .12
</TABLE>
<PAGE>
<TABLE>
FIVE YEAR SUMMARY
ONEIDA LTD.
(Thousands except per share amounts)
<CAPTION>
Year ended in January 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net sale............... $513,799 $492,954 $455,192 $479,442 $446,602
Gross margin .......... 144,151 132,856 126,569 123,292 122,566
Interest expense....... 8,639 7,362 7,751 10,304 10,452
Income before income
taxes and
cumulative effect.. 29,770 22,833 18,003 5,939 14,510
Income taxes .......... 11,682 9,340 7,341 2,227 5,586
Net income (loss) ..... 18,088 13,493 10,662 (33,252) 8,924
Cash dividends declared-
Preferred stock. 134 134 135 136 137
Common stock.... 5,272 5,233 5,129 5,090 5,026
PER SHARE OF COMMON STOCK
Income before
accounting changes. 1.63 1.24 1.01 .36 .90
Net income (loss) ..... 1.63 1.24 1.01 (3.32) .90
Dividends declared .... .48 .48 .48 .48 .48
Book value............. 9.46 8.53 7.97 7.39 11.35
FINANCIAL DATA
Current assets ........ 215,233 212,124 196,746 195,712 210,952
Working capital ....... 121,482 118,918 111,817 109,388 103,691
Total assets........... 344,363 336,030 318,505 317,679 328,613
Long-term debt ........ 72,129 77,278 75,301 81,906 77,573
Stockholders' equity... 106,300 95,196 85,913 77,664 114,387
Additions to property, plant
and equipment...... 19,322 17,190 13,280 14,163 18,755
Property, plant and
equipment-at cost.. 251,758 242,198 227,290 216,216 207,514
Accumulated
depreciation ...... 136,559 129,906 116,496 104,297 95,034
SHARES OF CAPITAL STOCK
Outstanding at end of year
Preferred .... 89 89 89 91 91
Common ....... 10,999 10,902 10,498 10,205 9,876
Weighted average number
of common shares
outstanding during
the year........... 11,019 10,784 10,393 10,056 9,767
SALES OF MAJOR PRODUCTS BY PERCENT
OF TOTAL SALES
Tableware ............. .71% 68% 71% 69% 71%
Industrial wire
product............ 29% 32% 29% 31% 29%
AVERAGE NUMBER OF
EMPLOYEES.......... 5,708 5,590 5,466 5,530 5,252
</TABLE>
<PAGE>
EXHIBIT 22
PARENTS AND SUBSIDIARIES
There are no parents of the Company. There is no subsidiary for which
separate financial statements are filed. The following list includes the
Company and its subsidiaries, all of which are included, in the consolidated
financial statements.
<TABLE>
<CAPTION>
State or Percentage of
Country of Voting Securities
Name Incorporation Owned by the Company
<S> <C> <C>
Oneida Ltd. New York
Oneida Canada, Limited Canada 100
Camden Wire Co., Inc. New York 100
Buffalo China, Inc. New York 93
Kenwood Silver Company, Inc. New York 100
Oneida Mexicana, S.A. de C.V. Mexico 100
Oneida Distribution Services, Inc. New York 100
Oneida International, Inc. Delaware 80
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Jan-27-1996
<PERIOD-START> Jan-29-1995
<PERIOD-END> Oct-28-1995
<PERIOD-TYPE> 12-MOS
<CASH> 2,847
<SECURITIES> 0
<RECEIVABLES> 58,849
<ALLOWANCES> 1,697
<INVENTORY> 145,763
<CURRENT-ASSETS> 215,233
<PP&E> 251,758
<DEPRECIATION> 136,559
<TOTAL-ASSETS> 344,363
<CURRENT-LIABILITIES> 93,751
<BONDS> 72,129
0
2,225
<COMMON> 11,706
<OTHER-SE> 92,369
<TOTAL-LIABILITY-AND-EQUITY> 344,363
<SALES> 513,799
<TOTAL-REVENUES> 514,281
<CGS> 369,648
<TOTAL-COSTS> 369,648
<OTHER-EXPENSES> 106,224
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,639
<INCOME-PRETAX> 29,770
<INCOME-TAX> 11,682
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,088
<EPS-PRIMARY> 1.63
<EPS-DILUTED> 1.63
</TABLE>
