EX 10.34
AMENDMENT NO. 4 AND CONSENT
under
LOAN AND SECURITY AGREEMENT
dated as of April 16, 1997
THIS AMENDMENT NO. 4 AND CONSENT dated as of March 26,1999 (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., 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. I dated as of July 31, 1997, Amendment No. 2 dated as of December
31, 1997 and Amendment No. 3 dated as of March 30, 1998 (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 related definitions 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 3, by
(a) amending Section 1.1 Definitions by
(i) amending the definition "Applicable Margin" in its entirety
to read as follows:
1079930
Applicable Margin means (a) as to Prime Rate Loans, 0.50%
and (b) as to Eurodollar Rate Loans, (i) 2.25%, or (ii) beginning
five days after delivery of the quarterly financial statements of
Syratech and its Consolidated Subsidiaries for the third Fiscal
Quarter of Fiscal Year 1999, such other percentage indicated on
the performance pricing matrix attached hereto as Annex B, as may
at the time be applicable after taking into account the Total
Funded Debt to EBITDA and the Pricing Ratio (as such term is
defined on Annex B) for the most recently ended period of four
consecutive Fiscal Quarters based on the consolidated financial
statements of Syratech and its Consolidated Subsidiaries for the
latest Fiscal Quarter, timely delivered in accordance with Section
10.1. Each change in the Applicable Margin shall become effective
as of the fifth Business Day after delivery of the relevant
financial statements. If an Event of Default has occurred and is
continuing, then, subject to the provisions of Section 4.1(d), the
Applicable Margin for Eurodollar Rate Loans shall again be the
applicable percentage set forth in clause (b)(i) above, for the
following month or until such Event of Default has been cured or
waived and the requirements of clause (b)(ii) above have been
satisfied.
(ii) amending the definition "Borrowing Base" by deleting the date
"June I" each time it appears in clause (b) thereof and
substituting therefor the date "May 1 ";
(iii) 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 for any such
specified period that includes the Fiscal Quarter in which such
expense was recorded, up to $5,170,000 of Fiscal Year 1998 expense
attributable to increasing reserve(s) in anticipation of the sale
of fixed assets listed on Schedule UB -Assets Held for Sale.
(iv) amending the definition "Fixed Charge Coverage" in its
entirety to read as follows:
Fixed Charge Coverage means, for any specified period of
four consecutive Fiscal Quarters, the ratio of (a) EBITDA for such
period, to (b) the sum of (i) $4,000,000 for each such period
ending on or after March 31, 1999, plus (ii) the following charges
of Syratech and its Consolidated Subsidiaries on a consolidated
basis for the same specified accounting period: interest expense
(excluding amortization of financing transaction costs), cash
income taxes paid, dividends paid in cash, and scheduled principal
repayments on Funded Debt, in each case determined in accordance
with GAAP, and excluding, for avoidance of doubt, any amount paid
to redeem Preferred Stock in compliance with the terms of this
Agreement.
(b) amending Section 4.9 Prepayment Fee in its entirety to read as
follows:
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Section 4.9 Prepayment Fee. If the Borrowers prepay the
Loans in whole and terminate this Agreement prior to the
Termination Date, the Borrowers shall pay to the Administrative
Agent for the Ratable benefit of the Lenders on such date of
termination, 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 1% of the amount of the
Revolving Credit Facility on the Effective Date, provided that if
such prepayment occurs after the Administrative Agent has declared
the Secured Obligations to be immediately due and payable pursuant
to Section 12.2, the amount of such fee shall be 1/2 of 1% of the
amount of the Revolving Credit Facility on the Effective Date.
(c) amending Section 8.14 Information and Reports by deleting from each
of subsections (a), (b) and (c) thereof the phrase "not later than the 10th day
of each calendar month" or "not later than the 10th day of each month", as the
case may be, and substituting therefor in each such subsection the phrase "not
later than the 15th day (or, if such month is the last month of a Fiscal
Quarter, the 20th day) of each calendar month";
(d) 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
-----------------------------------------------------
3/31/99 10.56 to 1
6/30/99 10.09 to 1
9/30/99 9.20 to 1
12/31/99 8.54 to 1
3/31/00 8.46 to 1
6/30/00 8.36 to 1
9/30/00 7.96 to 1
12/31/00 7.64 to 1
3/31/01 7.51 to 1
6/30/01 7.34 to 1
9/30/01 6.92 to 1
12/31/01
and thereafter 6.58 to 1
(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:
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Date Ratio
-----------------------------------------------------
3/31/99 0.855 to 1
6/30/99 0.859 to 1
9/30/99 0.872 to 1
12/31/99 0.871 to 1
3/31/00 0.866 to 1
6/30/00 0.866 to 1
9/30/00 0.900 to 1
12/31/00 1.0 to 1
3/31/01 1.0 to 1
6/30/01 1.0 to 1
9/30/01 1.0 to 1
12/31/01
and thereafter 1.015 to 1
(e) 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 during Fiscal Year 1999 not greater than
$7,500,000 and during any Fiscal Year thereafter not greater than
$9,000,000.
(f) amending Section 11.6 Restricted Distributions and Payments, Etc.
by amending the final grammatical paragraph thereof in its entirety to read as
follows:
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 (i) fund
unfunded pension liability of the Borrowers to Xxxxxxx Xxxxxxxx in the
Fiscal Years and amounts shown below:
Fiscal Year Amount
1999 and 2000 $891,730
2001 and 2002 577,002
and (ii) purchase life insurance (which one or more of the Borrowers
would own) covering Messrs Xxxxxxxx, Xxxxxx and Xxxxxx and Xx. Xxxx
Xxxxxxxx, or otherwise provide for the Borrowers' post-retirement
obligations to such Persons, on or after March 30, 1998, upon terms and
conditions no more costly to the Borrowers and otherwise not less
favorable to the Borrowers than those outlined in Xx. Xxxxxxxx'x letter
dated March 10, 1998 addressed to the Administrative Agent, copies of
which have been furnished to
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each Lender.
amending Section 11.14 Minimum Availability in its entirety
to read as follows:
Section 11.14 Minimum Availability. Permit Revolving Credit
Availability to be less than $25,000,000 during the period February I
through March 31 of any year.
(h) amending Section 15.2(d) by deleting the figure 125,000 "appearing
therein and substituting therefor the figure 150,000"; and
(i) further amending the Loan Agreement by deleting Annex B thereto and
substituting therefor a new Annex B (Pricing Matrix) in the form of Annex 1
attached hereto and adding thereto a new Schedule 1. 1 B - Assets Held for Sale
in the form of Annex 2 attached hereto.
Section 2. Consent. Subject to the provisions of Section 3, the Lenders
hereby consent to the Borrowers' sale of the assets described on Annex 2 to this
Amendment; provided, however, that Syratech shall take such actions (including
voluntary prepayment of Revolving Credit Loans and reduction of Commitments) as
may be necessary in accordance with Section 4.10 of the Senior Note Indenture
to assure that Syratech will have no obligation thereunder to prepay any
principal of the Senior Notes.
Section 3. Effectiveness of Amendment. Sections 1 and 2 of this
Amendment shall become effective as of December 31, 1998 on the date (the
"Amendment Effective Date") on which the Borrowers have paid to the
Administrative Agent for the ratable benefit of the Lenders an amendment fee in
the amount of $162,500 and 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
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 Amendment Effective Date (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 the
Amendment Effective 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 instruments in connection
with the effectiveness of this Amendment as the Administrative Agent or any
Lender may reasonably
5
request.
Section 4. 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 5. Additional Agreement. NationsBank and its Affiliate, Bank of
America National Trust and Savings Association, a national banking association
("BofA"), are both wholly owned Subsidiaries of BankAmerica Corp. and it is
contemplated that NationsBank and BofA will merge. In anticipation of such
merger and as part of a larger rationalization of services offered by the two
banks, NationsBank has requested that the Borrowers and the Lenders agree that
letters of credit issued by BofA for the account of Syratech Hong Kong and the
Borrowers under the Master L/C Agreement and in conformity with the terms
thereof and of the Loan Agreement, will be "Letters of Credit" for all purposes
of the Loan Agreement and that all Reimbursement Obligations in respect of such
letters of credit issued by BofA will be "Secured Obligations." By their
execution and delivery hereof, each Borrower and each Lender and the
Administrative Agent agree that each reference to NationsBank in the Loan
Agreement and the other Loan Documents shall also be deemed to be a reference to
BofA, to the full extent necessary to include as "Letters of Credit" for all
purposes of the Loan Agreement and the other Loan Documents, letters of credit
issued by BofA pursuant to and in accordance with the terms of the Master L/C
Agreement and the applicable provisions of the Loan Agreement for the account of
Syratech Hong Kong (and the Borrowers).
Section 6. 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/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Executive Vice President, Chief Financial Officer and
Treasurer
XXXXX MANUFACTURING COMPANY
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Vice President
XXXXXXX XXXXXXXX ASSOCIATES, INC.
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Vice President
XXXXXXX INTERNATIONAL SILVERSMITHS, INC.
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Vice President
SYRATECH HOLDING CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
------------------------------
Xxxxxxx Xxxxxxx
President
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XXXXX INDUSTRIES, INC.
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Vice President
ROCHARD, INC.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Xxxxxxx Xxxxxxxx
Chairman
HOLIDAY PRODUCTS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Xxxxxxx Xxxxxxxx
Chairman
FARBERWARE INC.
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Vice President
XXXXXXXXX, INC.
By: /s/ Xxx X. Xxxxxxx
------------------------------
Xxx X. Xxxxxxx
Vice President
ADMINISTRATIVE AGENT: NATIONSBANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Vice President
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LENDERS:
NATIONSBANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Vice President
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
FLEET NATIONAL BANK
By: /s/ H. Xxxxxx Xxxxxxxxx
------------------------------
Name: H. Xxxxxx Xxxxxxxxx
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxx X. Xxxxx
------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
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BHF-BANK AKTIENGESELLSCHAFT
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
FLEET BUSINESS CREDIT CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxx
------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
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Acknowledgment and Agreement of BofA
The undersigned, Bank of America National Trust and Savings Association
("BofA") hereby acknowledges and agrees for the benefit of Syratech Corporation,
its Subsidiaries parties to the Loan Agreement as defined in the foregoing
Amendment No. 4, as amended by said Amendment No. 4 (as the same may be further
amended, supplemented, amended and restated, or otherwise modified or refinanced
from time to time, the "Syratech Loan Agreement", unless otherwise defined in
this Acknowledgment, terms defined in the Syratech Loan Agreement are used
herein as therein defined), Syratech Hong Kong, each Lender, NationsBank and the
Administrative Agent, that BofA has received copies of the foregoing Amendment
No. 4, the Loan Agreement and the Master L/C Agreement and that in respect of
any letters of credit issued by BofA for the account of Syratech Hong Kong (and
the Borrowers), it will observe and perform the applicable provisions of the
Master L/C Agreement and the Syratech Loan Agreement as fully as if it were
"NationsBank" or otherwise named therein as the issuer of such letters of
credit. BofA also agrees that in the circumstances contemplated by Section 3.9
(Supporting Letter of Credit; Cash Collateral Account of the Syratech Loan
Agreement occurring or existing at a time when BofA and NationsBank remain
separate legal entities, if any Letters of Credit issued by BofA remain
outstanding, it will accept as a Supporting Letter of Credit, a Letter of Credit
issued by NationsBank for its benefit.
IN WITNESS WHEREOF, BofA has caused this Acknowledgment to be executed
and delivered as of March, 1999 by its duly authorized officer.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
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Annex 1
to Amendment No. 4
Annex B
PRICING MATRIX
Total Funded Debt Pricing Ratio Applicable Margin
EBITDA ------------- Eurodollar Rate Loans
------ ---------------------
>6.0 to 1 < covenant level >covenant level <1.0 to 1 2.25%
- -
>6.0 to 1 <6.0 to 1 >I.O to I <1.10 to 1 2.125%
- -
>4.0 to 1 <5.0 to 1 >1.10 to 1 <1.25 to 1 2.00%
- -
>3.5 to 1 <4.0 to 1 >1.25 to 1 1.875%
- -
<3.5 to 1 >1.25 to 1 1.75%
- -
Pricing Ratio means (a) EBITDA for such four-quarter period divided by
(b) the sum of (i) Capital Expenditures of Syratech and its Consolidated
Subsidiaries for such period plus (ii) up to the amounts listed below in respect
of the Fiscal Year opposite such amount to the extent paid by the Borrowers in
such Fiscal Year to fund unfunded pension liability of the Borrower to Xxxxxxx
Xxxxxxxx,
Fiscal Year Amount
1999 $455,521
2000 527,998
2001 321,514
2002 340,311
plus (iii) the following charges of Syratech and its Consolidated Subsidiaries
on a consolidated basis for the same specified accounting period: interest
expense (excluding amortization of financing transaction costs), cash income
taxes paid, dividends paid in cash, and scheduled principal repayments on Funded
Debt, in each case determined in accordance with GAAP, and excluding, for
avoidance of doubt, any amount paid to redeem Preferred Stock in compliance with
the terms of this Agreement.
Annex 1
to Amendment No. 4
SCHEDULE 1.1B - ASSETS HELD FOR SALE
($Thousands)
Asset
Impairment
Reserves
Recorded in
Description 1998
----------- -----------
Land and Building, Modena N.C. (Xxxxx) $ 000
Xxxx & Xxxxxxxxx, Xx Xxxx Xxxxx (Xxxxx Holiday Products) 3,123
Machinery & Equipment, EL Paso Texas (Xxxxx Holiday Products) 506
Obsolete Warehouse System (Xxxxx) 000
Xxxx & Xxxxxxxxx, Xxxxxxxxx Xxxxxxx (X X Xxxxxx) 235
Obsolete Computer Equipment (Potpourri/Xxxxxxxxx Consolidation) 161
Discontinued Product Tooling 185
Obsolete Warehouse Equipment (East Coast Warehouse Consolidation) 109
All Other 30
------
Total $5,170
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