EX 10.26
AMENDMENT NO. 2
to
LOAN AND SECURITY AGREEMENT
dated as of April 16, 1997
THIS AMENDMENT NO. 2 dated as of December 31, 1997 (this "Amendment")
is made by SYRATECH CORPORATION, a Delaware corporation, XXXXX MANUFACTURING
COMPANY, a Delaware corporation, XXXXXXX XXXXXXXX ASSOCIATES, INC., a
Massachusetts corporation, XXXXXXX INTERNATIONAL SILVERSMITHS, INC., a Delaware
corporation, SYRATECH HOLDING CORPORATION, an Arkansas corporation, XXXXX
INDUSTRIES, INC., a North Carolina corporation, ROCHARD, INC., a New York
corporation, HOLIDAY PRODUCTS, INC., a North Carolina corporation, FARBERWARE
INC., a Delaware corporation, XXXXXXXXX, INC., a Delaware corporation, the
financial institutions parties hereto from time to time as Lenders, and
NATIONSBANK, N.A. (formerly named NationsBank, N.A. (South), a national banking
association ("NationsBank"), as administrative agent for the Lenders (the
"Administrative Agent").
Preliminary Statements
----------------------
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 (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 thereof by 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; 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 11.1 Financial Ratios by
(i) amending Section 11.1(b) Total Funded Debt to EBITDA by
inserting therein after the phrase "four consecutive Fiscal
Quarters" appearing therein, the parenthetical phrase (other than
such period ending December 31, 1997, as to which this covenant
shall not apply);
(ii) amending Section 11.1(c) Fixed Charge Coverage by deleting
clause (ii) thereof in its entirety and changing the designation
of clause (iii) to clause (ii); and
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(iii) adding a new subsection (d) to read as follows:
(d) Minimum EBITDA. EBITDA for the period of four consecutive
Fiscal Quarters ending December 31, 1997 to be less than
$18,000,000.
(c) amending Section 11.4 Investments by inserting therein after the
phrase "Borrowers may Acquire a Business Unit or Subsidiary"
appearing therein, the phrase "after March 31, 1998";
(d) amending Section 11.5 Capital Expenditures in its entirety to read
as follows:
Section 11.5 Capital Expenditures. Make or incur any Capital
Expenditures; provided, however, that the Borrowers may make or incur
Capital Expenditures (a) in connection with the construction of a
warehouse and distribution facility in Ontario, California in Fiscal years
1997 and 1998 in an aggregate amount not greater than $17,500,000, and (b)
in an additional amount (i) during Fiscal Year 1997 not greater than
$9,500,000 and (ii) during each Fiscal Year ending after December 31, 1997
not greater than $7,500,000, plus any amount, up to $3,000,000, by which
$7,500,000 exceeded actual Capital Expenditures in the preceding Fiscal
Year.
(e) amending Section 11.10 Benefit Plans by deleting the amount of
$4,500,000" therein and substituting therefor the amount of
"$4,750,000"; and
(f) amending Section 11.14 Minimum Availability in its entirety to read
as follows:
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);
(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 thereof 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 or 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 of Event of Default has occurred and is
continuing, and such statements shall be true;
(d) payment of an amendment fee to the Administrative Agent for
the Ratable account of the Lenders in the amount of $325,000;
and
(e) such other documents, certificates and instruments in
connection with the effectiveness of this Amendment as the
Administrative Agent or any Lender may reasonably request.
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Section 3. Effect of 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 in 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/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Vice President, Treasurer and
Chief Financial Officer
XXXXX MANUFACTURING COMPANY
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Vice President, Treasurer and
Chief Financial Officer
XXXXXXX XXXXXXXX ASSOCIATES, INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Vice President and Treasurer
XXXXXXX INTERNATIONAL SILVERSMITHS,
INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Vice President and Treasurer
SYRATECH HOLDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
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XXXXX INDUSTRIES, INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Vice President and Chief
Financial Officer
ROCHARD, INC.
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: President
HOLIDAY PRODUCTS, INC.
By:/s/ Xxxxx X. Xxxxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: President
FARBERWARE INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Treasurer
XXXXXXXXX, INC.
By: /s/ X. X. Xxxxxxxx
-----------------------------------
Name: X. X. Xxxxxxxx
Title: Treasurer
ADMINISTRATIVE AGENT:
NATIONSBANK, N.A.
By: /s/ Xxxxx X. X'Xxxxxx
-----------------------------------
Xxxxx X. X'Xxxxxx
Senior Vice President
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LENDERS:
NATIONSBANK, N.A.
By: /s/ Xxxxx X. X'Xxxxxx
-----------------------------------
Xxxxx X. X'Xxxxxx
Senior Vice President
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
BANKBOSTON, N.A.
By:/s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
FLEET NATIONAL BANK
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxx Xxxxx
-----------------------------------
Name: Xxxx Xxxxx
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Assistant Vice President
SANWA BUSINESS CREDIT CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
