SECOND AMENDMENT TO LOAN AGREEMENT
This is the Second Amendment (the "Second Amendment") dated as
of April 20, 2006 to the Loan Agreement dated as of November 5, 2003 between
Israel Discount Bank of New York (hereinafter referred to as "Lender"), a New
York bank, having an office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and
Syms Corp. (hereinafter referred to as "Borrower"), a New Jersey corporation,
with its principal office located at Xxx Xxxx Xxx, Xxxxxxxxx, Xxx Xxxxxx 00000,
as amended from time to time (the "Loan Agreement"). All capitalized terms that
are not defined herein shall have the meanings ascribed to them in the Loan
Agreement.
WHEREAS, Lender and Borrower wish to supplement and amend the
Loan Agreement as of the date hereof (the "Effective Date") by modifying certain
financial covenants and other terms and conditions of the Loan Agreement to
allow the Borrower, on a one time basis, to draw up to $15,000,000 (the "Initial
Drawing") under the credit facility to repurchase certain of the Borrower's
outstanding stock (the "Stock Repurchase"); and
WHEREAS, the Borrower has requested and the Lender has agreed
to allow the Borrower, on a one time basis, to draw in addition to the Initial
Drawing up to $13,000,000 (the "Additional Drawing") under the credit facility
if the Borrower does not have sufficient cash on hand to complete the Stock
Repurchase.
NOW, THEREFORE, it is agreed as follows that as of the
Effective Date:
1. Section 5.3.1 of the Loan Agreement related to Working
Capital is hereby deleted in its entirety and replaced with the following
"WORKING CAPITAL. Maintain as of the end of each fiscal
quarter for Borrower, Working Capital of no less than
$35,000,000. Notwithstanding the foregoing, in the event the
Borrower requests the Additional Drawing, as of the Effective
date through June 30, 2006, the Borrower covenants and agrees
that it shall maintain Working Capital of no less than
$35,000,000 less the amount of the Additional Drawing."
2. Section 5.3.3 of the Loan Agreement related to Consolidated
Tangible Net Worth is hereby amended by deleting reference to the amount of
"$180,000,000" and inserting in its place and stead the amount of
"$150,000,000":
3. Section 5.3.4 of the Loan Agreement related to Capital
Expenditures is hereby deleted in its entirety and replaced with the following:
"CAPITAL EXPENDITURES. Not permit the sum of Borrower's
Capital Expenditures plus Dividends minus Net Proceeds to
exceed (i) $55,000,000 for the 2006-2007 fiscal year of the
Borrower and (ii) for each fiscal year thereafter, $15,000,000
plus the Carry Forward Amount.
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"Carry Forward Amount" shall mean, for any fiscal year of the
Borrower, the excess, if any, of $15,000,000 over the
aggregate amount of Capital Expenditures for the immediately
preceding fiscal year. For the purposes of this Section the
purchase price paid by Borrower for the Stock Repurchase shall
be deemed a Capital Expenditure."
4. Section 5.3.5 of the Loan Agreement related to Net
Operating Loss is hereby amended by deleting reference to the amount
"$8,000,000" and inserting in its place and stead the amount of "4,000,000."
5. The following paragraph is hereby added to the Loan
Agreement.
"8.15 CONDITIONS SUBSEQUENT. In the event the Borrower
requests the Additional Drawing, then within thirty (30) days
following the date of such Additional Drawing, the Lender
shall have received, in form and substance satisfactory to
Lender and its counsel, a certificate signed by a senior
executive officer of Borrower stating that the amount of the
Additional Drawing has been repaid in full, together with such
other documentation as Lender shall reasonably require
evidencing the same."
6. The obligations of Lender under this Second Amendment and
the Loan Agreement are subject to the following conditions precedent, all of
which shall be performed or satisfied in a manner in form and substance
reasonably satisfactory to Lender and its counsel:
a. The Lender shall have received certified (as of the
Effective Date) copies of the resolutions of the board
of directors of the Borrower authorizing and approving
this Second Amendment;
b. The Lender shall have received a certificate signed by
the President, Vice President or Chief Financial
Officer of the Borrower dated as of the Effective Date,
stating that:
i. The representations and warranties contained in
this Second Amendment and in the Loan Documents
are true and correct in all material respects
on and as of such date;
ii. No Default or Event of Default has occurred and
is continuing, or would result from the making
of this Second Amendment;
c. The Lender shall have received payment of the
reasonable legal fees and expenses of the Lender's
counsel;
d. The Lender shall have received payment of an extension
fee in the amount of $37,500. which the Borrower
acknowledges shall have been earned by the Lender in
connection with the transactions contemplated hereby.
7. All terms and conditions of the Loan Agreement, except as
modified by this agreement are hereby affirmed and ratified.
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8. The Loan Agreement, together with this Second Amendment,
embodies the entire agreement and understanding between the Lender and the
Borrower and supersedes all prior agreements and understandings relating to the
subject matter hereof.
9. This Second Amendment shall be governed and construed in
accordance with the laws of the State of New York.
10. No modification or waiver of or with respect to any
provision of this Second Amendment and all other agreements, instruments and
documents delivered pursuant hereto or thereto, nor consent to any departure by
the Lender from any of the terms or conditions thereof, shall in any event be
effective unless it shall be in writing and executed in accordance with the
provisions of the Loan Agreement, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
consent to or demand on the Borrower or any Guarantor in any case shall, of
itself, entitle it, him or her to any other or further notice or demand in
similar or other circumstances.
11. The provisions of this Second Amendment are severable, and
if any clause or provision shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision in this Second Amendment in any jurisdiction.
12. This Second Amendment may be signed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
13. This Second Amendment shall be binding upon and inure to
the benefit of the Borrower and its successors and to the benefit of the Lender
and its successors and assigns. The rights and obligations of the Borrower under
this Second Amendment shall not be assigned or delegated without the prior
written consent of the Lender, and any purported assignment or delegation
without such consent shall be void.
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IN WITNESS WHEREOF, the parties have set their hands hereto
the day and the year first above written.
SYMS CORP.
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Chief Executive Office and President
ISRAEL DISCOUNT BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: First Vice President
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
Title: First Vice President
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