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EXHIBIT 10.1
CONSENT, WAIVER AND AMENDMENT NO. 3
CONSENT, WAIVER AND AMENDMENT NO. 3 (this "Amendment"), dated
as of April 7, 2005, to the Second Amended
and Restated Credit Agreement dated
as of August 9, 2004 (as amended and as the
same may be further amended, amended
and restated, supplemented or otherwise
modified, renewed or replaced from time
to time, the "Credit Agreement"), among
Oneida Ltd., as borrower (the
"Borrower"), the financial institutions
from time to time party thereto
(collectively, the "Lenders") and JPMorgan
Chase Bank ("JPMorgan Chase"), as
administrative agent (the "Administrative
Agent") and collateral agent (the
"Collateral Agent") for the Lenders.
INTRODUCTORY STATEMENT
A. All capitalized terms not otherwise defined in this
Amendment are used herein as defined in the
Credit Agreement.
B. The Borrower has informed the Lenders that it seeks to (i)
suspend operations at the knife plant
located at 3690 Kenwood Road, Sherrill,
New York (the "Knife Plant"), (ii) modify
the Knife Plant's insurance policy in
connection with such suspension of
operations, and (iii) sell the Knife Plant,
certain other real property located in
Sherrill, New York and the distribution
facility located in Buffalo, New York.
C. The Borrower has requested and the Lenders have agreed to
(i) consent to the modifications of the
Borrower's insurance coverage, (ii)
consent to the release of certain funds
held in the Sale Proceeds Collateral
Account, (iii) consent to the sale of
certain real property and related assets,
(iv) waive certain Defaults and Events of
Default arising out of the Borrower's
failure to comply with provisions of the
Credit Agreement, and (v) amend certain
provisions of the Credit Agreement, each
subject to the terms and conditions
hereof and each as more fully set forth
herein.
Accordingly, the parties hereto hereby
agree as follows:
SECTION 1. Consent to Modification of Insurance. The Lenders
hereby consent to the modification of the
Borrower's insurance policy for the
Knife Plant to (i) increase the Borrower's
deductible from $100,000 to $250,000
and (ii) change the loss valuation
calculation from replacement cost to actual
cash value (depreciated value).
SECTION 2. Consent to Release of Funds Held in Sale Proceeds
Collateral Account. The Lenders hereby
authorize the Administrative Agent to
release to the Borrower the $4,000,000 of
proceeds from the sale of Encore
deposited in the Sale Proceeds Collateral
Account pursuant to Section 5.21
subject to there occurring a ruling of the
Internal Revenue Service on the
Borrower's request for a waiver of the
Borrower's minimum funding contributions
in respect of certain specified Plans
pursuant to Section 412 of the Code for
the 2004 plan year.
SECTION 3. Consents.
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(A) Sale of Buffalo Distribution Facility. The Lenders hereby
consent to the sale of the real property,
including buildings and personal
property appurtenant thereto, located at
500 Bailey Avenue, Buffalo, New York
14210 (the "Buffalo Distribution
Facility"); provided that the Buffalo
Distribution Facility shall be deemed to be
sold pursuant to Section 6.6(a)(iv)
of the Credit Agreement and the proceeds of
such sale treated as Net Cash
Proceeds; provided, further that (i) 50% of
such Net Cash Proceeds shall be
subject to the mandatory prepayment
required pursuant to Section 2.11(b) of the
Credit Agreement and (ii) the remaining 50%
of such Net Cash Proceeds shall (1)
be held in an account established with the
Administrative Agent in the name of
the Administrative Agent (for the benefit
of the Secured Parties) under the sole
and exclusive control of the Administrative
Agent (the "Distribution Proceeds
Collateral Account") or (2) in the event
that the Administrative Agent shall
have received the satisfactory evidence
referred to in clause (B) of the
following sentence, be retained by the
Borrower. So long as no Event of Defualt
shall have occurred and be continuing,
amounts held in the Distribution Proceeds
Collateral Account shall be released to the
Borrower upon the earlier of (A)
consent of the Required Lenders and (B) the
Administrative Agent's receipt of
evidence reasonably satisfactory to it of
the Borrower's proposed principal
distribution facility located in the
western portion of the United States
becoming operational (regardless of whether
such facility is owned or leased by
the Borrower or operated by a third party
logistics provider on behalf of the
Borrower). In the event a Default or an
Event of Default has occurred and is
then continuing, the Administrative Agent
may deposit any or all amounts held in
the Distribution Proceeds Collateral
Account in the Collateral Account (as
defined in the Intercreditor Agreement) and
apply such amounts to the repayment
of the Obligations in accordance with
Section 5 of the Intercreditor Agreement.
Notwithstanding anything to the contrary
contained in the Credit Agreement, the
Net Cash Proceeds from the sale of the
Buffalo Distribution Facility shall not
reduce the $250,000 basket established
pursuant to Section 6.6(a)(vi) of the
Credit Agreement.
(B) Sale of Certain Real Property and Related Assets. The
Lenders hereby consent to the sale of (i)
the Knife Plant and the personal
property and fixtures appurtenant thereto
and (ii) the CAC Clubhouse building
and adjacent real property located at
Hamilton Avenue, Sherrill, New York and
the personal property and fixtures
appurtenant thereto ((i) and (ii) above,
collectively, the "Sherrill Property");
provided that the Sherrill Property
shall be deemed to be sold pursuant to
Section 6.6(a)(iv) of the Credit
Agreement and the proceeds of such sale
treated as Net Cash Proceeds; provided,
further that (i) the first $1,000,000 of
such Net Cash Proceeds shall be
retained by the Borrower and (ii) all such
Net Cash Proceeds in excess of
$1,000,000 shall be subject to the
mandatory prepayment required pursuant to
Section 2.11(b) of the Credit Agreement.
Notwithstanding anything to the
contrary contained in the Credit Agreement,
the Net Cash Proceeds from the sale
of the Sherrill Property shall not reduce
the $250,000 basket established
pursuant to Section 6.6(a)(vi) of the
Credit Agreement.
SECTION 4. Waiver. The Lenders hereby waive the Defaults and
Events of Default arising out of the
Borrower's failure to comply with the
Section 5.1(a)(i) of the Credit Agreement
resulting from the inclusion of a
"going concern" explanatory paragraph in
the report and opinion from the
Borrower's accountants in connection with
the delivery of its consolidated
balance sheet, related consolidated
statements of income, stockholder's equity
and cash flows, for the fiscal year ending
January 2005. Nothing in this Section
4 shall be deemed to relieve the Borrower
of its obligation to deliver such
financial statement in accordance with the
terms of Section 5.1(a)(i) of the
Credit Agreement.
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SECTION 5. Amendment to Section 1 of the Credit Agreement.
Section 1 of the Credit Agreement is hereby
amended by inserting the following
definition in the appropriate alphabetical
order:
""Covenant Amendment" means an amendment to this Agreement
satisfactory to the Administrative Agent, the Required Lenders
and the Borrower to be entered into in accordance with Section
5.24 hereof amending the covenants set forth in Sections 6.8
through 6.13 hereof."
SECTION 6. Amendment to Section 2.12 of the Credit Agreement.
Section 2.12 of the Credit Agreement is
hereby amended to read in its entirety
as follows:
"The Borrower shall be required to repay the principal amount
of the Tranche A Term Loans, to the extent then outstanding:
(i) on or before the last Business Day of the Borrower's first
fiscal quarter for the Borrower's fiscal year ending January
2007 in an amount equal to 50% of the amount by which
Consolidated EBITDAR for the Borrower's fiscal year ending
January 2006 exceeds $27,500,000, and (ii) in equal
installments of $1,500,000 each, commencing on the last
Business Day of the
Borrower's first fiscal quarter for the
Borrower's fiscal year ending January 2007 and continuing on
the last Business Day of each fiscal quarter thereafter
through the Tranche A Term Loan Maturity Date, and any
outstanding balance of the Tranche A Term Loans on the Tranche
A Term Loan Maturity Date."
SECTION 7. Amendment to Article 5 of the Credit Agreement.
Article 5 of the Credit Agreement is hereby
amended by inserting the following
Section 5.24 at the end thereof:
"Section 5.24 Covenant Amendment. The Borrower will furnish to
the Administrative Agent by no later than (i) August 31, 2006,
a set of financial projections for the Borrower and its
Consolidated Subsidiaries for the fiscal year ending in
January 2008, which projections shall be in form and substance
reasonably satisfactory to the Administrative Agent and (ii)
October 31, 2006 the Covenant Amendment duly executed and
delivered by the Borrower, the Administrative Agent and the
Required Lenders."
SECTION 8.
Amendment to Section 6.2 of the Credit Agreement.
Section 6.2 of the Credit Agreement is
hereby amended by deleting subsection (d)
thereof in its entirety and inserting in
lieu thereof the following new
subsection (d):
"(d)(i) existing Liens listed on Schedule 6.2(d) hereto, (ii)
Liens that have been imposed on the Borrower's and Guarantors'
assets in favor of certain Plans pursuant to Section 412 of
the Code to secure minimum funding contributions in respect of
such Plans for the 2004 plan year, which liens in favor of the
PBGC have been subordinated to the Liens granted to the
Collateral Agent pursuant to the Security Documents for the
benefit of the Lenders pursuant to that certain letter dated
October 15, 2004 from the PBGC (as the same may be amended,
amended and restated, supplemented or otherwise modified, the
"PBGC Subordination Letter"), and (iii) additional Liens that
may be imposed on the Borrower's or any Guarantor's assets in
favor of any Plan pursuant to Section 412 of the Code to
secure minimum funding contributions in respect of any Plan
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for the 2005 plan year, provided that the PBGC shall have
agreed to subordinate such additional Liens to the Liens
granted to the Co
