AMENDMENT NO. 3
to
LOAN AND SECURITY AGREEMENT
dated as of April 16, 1997
THIS AMENDMENT NO. 3 dated as of March 30, 1998 (this "Amendment") is made
by SYRATECH CORPORATION, a Delaware corporation, ▇▇▇▇▇ MANUFACTURING COMPANY, a
Delaware corporation, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES, INC., a Massachusetts
corporation, ▇▇▇▇▇▇▇ INTERNATIONAL SILVERSMITHS, INC., a Delaware corporation,
SYRATECH HOLDING CORPORATION, an Arkansas corporation, ▇▇▇▇▇ INDUSTRIES, INC., a
North Carolina corporation, ROCHARD, INC., a New York corporation, HOLIDAY
PRODUCTS, INC., a North Carolina corporation, FARBERWARE INC., a Delaware
corporation, ▇▇▇▇▇▇▇▇▇, INC., a Delaware corporation, the financial institutions
parties hereto from time to time as Lenders, and NATIONSBANK, N.A., a national
banking association ("NationsBank"), as administrative agent for the Lenders
(the "Administrative Agent").
Preliminary Statements
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The Borrowers, the Lenders and the Administrative Agent are parties to a
Loan and Security Agreement dated as of April 16, 1997, as amended by Amendment
No. 1 dated as of July 31, 1997 and Amendment No. 2 dated as of December 31,
1997 (the "Loan Agreement", terms defined in the Loan Agreement and not
otherwise defined herein being used herein as therein defined).
The Borrowers have requested that the Lenders modify certain financial
covenants and amend certain other provisions of the Loan Agreement and the
Lenders and the Administrative Agent have agreed to such modifications to the
Loan Agreement as hereinafter set forth, upon and subject to all of the terms,
conditions and provisions hereof.
NOW, THEREFORE, in consideration of the Loan Agreement, the Loans made by
the Lenders and outstanding thereunder, the mutual promises hereinafter set
forth and other good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendments to Loan Agreement. The Loan Agreement is hereby
amended, effective as provided in Section 2, by
(a) amending Section 1.1 Definitions by
(i) adding thereto in correct alphabetical order the following definition:
Fiscal Quarter means each of the four consecutive periods of three Fiscal
Months each, beginning on the first day of a Fiscal Year.
(ii) amending the definition EBITDA in its entirety to read as follows:
EBITDA for a specified period means consolidated Net Income of Syratech
and its Consolidated Subsidiaries for such period, before provision for interest
expense, income taxes, depreciation expense, amortization, and any extraordinary
item(s), all determined in accordance with GAAP; plus any amount (up to
$1,250,000) applied before December and otherwise in accordance with the
provisions of Section 11.6, to fund unfunded pension liability of the Borrowers
to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, plus, during the period from April 15, 1997 through
December 31, 1997, an amount not greater than $3,873,756, expensed by Syratech
in connection with the exercise of certain employee stock options exercised in
connection with the Merger.
(b) amending Section 4.9 Prepayment Fee in its entirety to read as
follows:
Section 4.9 Prepayment Fee. If the Borrowers prepay the Loans in whole
(other than from the proceeds of a primary offering of securities of Syratech or
the sale of the Company as a whole) and terminate this Agreement (a) prior to
the first Anniversary or (b) after the first Anniversary but prior to March 1,
1999, the Borrowers shall pay to the Administrative Agent for the Ratable
benefit of the Lenders on such date of terminations, as liquidated damages and
compensation for the costs of making funds available to the Borrowers under this
Agreement and not as a penalty, an amount equal to 2% or 1%, respectively, of
the amount of the Revolving Credit Facility on the Effective Date.
(c) amending Section 11.1 Financial Ratios by
(i) amending Section 11.1(b) Total Funded Debt to EBITDA in its
entirety to read as follows:
(b) Total Funded Debt to EBITDA. Total Funded Debt to EBITDA for any
period of four consecutive Fiscal Quarters ending on or after a date specified
below, to be greater than the ratio specified opposite such date:
Date Ratio
3/31/98 14.84 to 1
6/30/98 19.16 to 1
9/30/98 15.83 to 1
12/31/98 8.80 to 1
3/31/99 5.0 to 1
12/31/99 4.5 to 1
12/31/00
and thereafter 4.25 to 1
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(ii) amending Section 11.1(c) Fixed Charge Coverage in its entirety
to read as follows:
(c) Fixed Charge Coverage: Fixed Charge Coverage for any period of
four consecutive Fiscal Quarters ending on or after a date specified below to be
less than the ratio specified opposite such date:
Date Ratio
3/31/98 0.30 to 1
6/30/98 0.22 to 1
9/30/98 0.29 to 1
12/31/98 0.71 to 1
3/31/99 1.15 to 1
12/31/99 1.20 to 1
12/31/00
and thereafter 1.30 to 1
(d) amending Section 11.4 Investments by deleting the figure "$40,000,000"
appearing therein and substituting therefor the figure "$20,000,000";
(e) amending Section 11.5 Capital Expenditures by deleting the figure
"$17,500,000" appearing therein and substituting therefor the figure
"$23,000,000",
(f) amending Section 11.6 Restricted Distributions and Payments, Etc. by
adding at the end thereof as a new grammatical paragraph the following:
To the extent that the payments hereinafter described may be deemed to
be Restricted Distributions or Restricted Payments, so long as no
Default or Event of Default has occurred and is continuing or would
exist after giving effect thereto, the Borrowers may (1) fund 50% of
the unfunded pension liability of the Borrowers to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, up
to an amount equal to $1,250,000, or after the effective date of
Amendment No. 3 to this Agreement, (2) fund the remaining unfunded
pension liability of the Borrowers to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, up to an amount
equal to $1,250,000, after December 1, 1998, provided that after giving
pro forma effect to such funding, based on actual performance by the
Borrowers during the 1998 Fiscal Year to date, no Default or Event of
Default would exist as of December 31, 1998, and (3) purchase life
insurance (which one or more of the Borrowers would own) covering
Messrs Randolph, Levine, and Kanter and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, or otherwise
provide for the Borrowers' post-retirement obligations to such Persons,
on or after the effective date of Amendment No. 3 to this Agreement,
upon terms and conditions no more costly to the Borrowers and otherwise
not less favorable to the Borrowers than those outlined in ▇▇.
▇▇▇▇▇▇▇▇'▇ letter dated March 10, 1998 addressed to the Agent, copies
of which have been furnished to each Lender.
Section 2. Effectiveness of Amendment. This Amendment shall become
effective as of the date hereof on the date on which the Administrative Agent
shall have received each of the following documents (in sufficient copies for
each Lender):
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(a) this Amendment duly executed and delivered by each Borrower and the
Required Lenders,
(b) a certificate of the Secretary of each Borrower having attached
thereto the articles or certificate of incorporation and bylaws of such Borrower
as in effect on the date hereof attached thereto (or containing the
certification of such Secretary that no amendment of modification of such
articles or certificate or bylaws has become effective since the last date on
which such documents were delivered to the Administrative Agent pursuant to the
Loan Agreement), and to the further effect that the incumbency certificate and
corporate action delivered in connection with the occurrence of the date hereof
remain in effect, unchanged,
(c) a certificate of the President or Financial Officer of Syratech to the
effect that
(i) the representations and warranties of the Borrowers contained in
the Loan Documents are true and correct in all material respects on and as of
the date hereof as if made on and as of such date, and
(ii) no Default or Event of Default has occurred and is continuing
and such statements shall be true; and
(d) such other documents, certificates and instrument sin connection with
the effectiveness of this Amendment as the Administrative Agent or any lender
may reasonably request.
Section 3. Effect on Amendment. From and after the effectiveness of this
Amendment, all references in the Loan Agreement and in any other Loan Document
to "this Agreement," "the Loan Agreement," "hereunder," "hereof" and words of
like import referring to the Loan Agreement, shall mean and be references to the
Loan Agreement as amended by this Amendment. Except as expressly amended hereby,
the Loan Agreement and all terms, conditions and provisions thereof remain in
full force and effect and are hereby ratified and confirmed. The execution,
delivery and effectiveness of this Amendment shall not, except as expressly
provided herein, operate as a waiver of any right, power or remedy of any Lender
or the Administrative Agent under any of the Loan Documents, nor constitute a
waiver of any provision of any of the Loan Documents.
Section 4. Counterpart Execution: Governing Law.
(a) Execution Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute but one and the same agreement.
(b) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
SYRATECH CORPORATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
▇▇▇▇▇ MANUFACTURING COMPANY
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
▇▇▇▇▇▇▇ INTERNATIONAL SILVERSMITHS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
SYRATECH HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
ROCHARD, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
HOLIDAY PRODUCTS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
President
FARBERWARE INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
▇▇▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President of Finance,
Chief Financial Officer and
Corporate Treasurer
ADMINISTRATIVE AGENT:
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Senior Vice President
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LENDERS:
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Senior Vice President
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
BANKBOSTON, N.A.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
FLEET NATIONAL BANK
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇
Vice President
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇
Assistant Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Vice President
SANWA BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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