Document:

Prepared by MerrillDirect

EX-10.1

BANCO
POPULAR

 

 

August 2, 2001

 

Mr. James F.
Callahan

Corporate Comptroller

Wallace International de Puerto Rico, Inc.

175 Mc Clellan Highway

East Boston, Massachusetts  02128

VIA
FACSIMILE  (617) 568-1370

Dear Mr.
Callahan:

Please be
advised that Wallace International de Puerto Rico, Inc. has an authorized line
of credit with Banco Popular de Puerto Rico for the amount of One million
dollars ($1,000,000).  This facility
bears interest at a floating rate per annum equal to the sum of the Index Rate plus
one hundred (100) basis points.  It is
required an annual clean up to fifteen (15) calendar days during each approval
period.  The expiration date for this
line is April 30, 2002.

Sincerely,

 

/s/ FRANKLYN
VARGAS

Assistant Vice President

Mayagüez Commercial Banking Center (412)Prepared by MerrillDirect

Exhibit 10.2

AMENDMENT NO. 6

to

LOAN AND SECURITY AGREEMENT

dated as of April 16, 1997

             THIS AMENDMENT NO. 6 dated as of
August 13, 2001 (this “Amendment”) is made by SYRATECH CORPORATION, a Delaware
corporation, TOWLE MANUFACTURING COMPANY, a Delaware corporation, LEONARD
FLORENCE ASSOCIATES, INC., a Massachusetts corporation, WALLACE INTERNATIONAL
SILVERSMITHS, INC., a Delaware corporation, RAUCH INDUSTRIES, INC., a North
Carolina corporation, ROCHARD, INC., a New York corporation, HOLIDAY PRODUCTS,
INC., a North Carolina corporation, FARBERWARE INC., a Delaware corporation,
SILVESTRI, INC., a Delaware corporation, the financial institutions parties
hereto from time to time as “Lenders,” and BANK OF AMERICA, N.A., a national
banking association, 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,
Amendment No. 2 dated as of December 31, 1997, Amendment No. 3 dated as of
March 30, 1998, Amendment No. 4 and Consent dated as of March 26, 1999 and
Amendment No. 5 dated as of March 26, 2001 (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 Administrative Agent and the Lenders amend certain financial covenants and
certain other provisions of the Loan Agreement as hereinafter set forth and the
Lenders and the Administrative Agent have agreed so to amend the Loan
Agreement, 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.         Amendment to Loan Agreement.  The Loan Agreement is hereby amended,
effective as provided in Section 2, by:

             (a)         amending Section 1.1 Definitions
by:

                           (i)          amending the definition “Applicable
Margin” appearing therein in its entirety to read as follows:

             Applicable
Margin means (i) prior to
August 16, 2001, (a) as to Prime Rate Loans, 0.50%, and (b) as to Eurodollar
Rate Loans, 2.25% and (ii) from August 16, 2001 through the Termination Date,
(a) as to Prime Rate Loans, 1.00%, and (b) as to Eurodollar Rate Loans, 3.75%.

 

             (ii)           amending clause (b) of the definition “Borrowing Base”
appearing therein by (x) deleting the word “minus” appearing at the end of
subpart (ii) thereof and substituting therefor the word “and” and (y) adding a
new subpart (iii) at the end thereof to read as follows:

                             (iii)     the Inventory Base, minus

             (iii)          amending clause (d) of the definition “Borrowing Base”
appearing therein by inserting after the phrase “Interest Rate Protection
Reserve” the following phrase “, the Adjustment Reserve (which shall take effect
beginning September 15, 2001)”;

             (b)        further amending Section 1.1 Definitions
by adding thereto in appropriate alphabetical order the following definitions:

             Adjustment Reserve means an amount equal to (i) in the
first week of any Fiscal Month, 10% of an amount equal to 60% or 70% (or such
lesser or greater percentage as may then constitute the applicable advance rate
against Eligible Inventory) of the remainder derived by subtracting the
Inventory valuation reflected on the forecasted monthly balance sheet prepared
as of the last day of the following Fiscal Month and delivered to the
Administrative Agent and the Lenders pursuant to Section 10.1(c) (or any
revised forecasted balance sheet delivered to and accepted by the
Administrative Agent and the Lenders) from the greater of (x) the Cost of
Inventory reflected on the Borrowing Base Certificate most recently delivered
to the Administrative Agent pursuant to Section 8.14(c) and (y) the Inventory
valuation reflected on the forecasted monthly balance sheet prepared as of the
last day of such Fiscal Month and delivered to the Administrative Agent and the
Lenders pursuant to Section 10.1(c) (or any revised forecasted
balance sheet delivered to and accepted by the Administrative Agent and the
Lenders) (such amount, hereinafter referred to as the “Reserve Amount”), (ii)
in the second week of any Fiscal Month, 20% of the Reserve Amount, (iii) in the
third week of any Fiscal Month, 30% of the Reserve Amount, and (iv) in the
fourth week of any Fiscal Month, 40% of the Reserve Amount.  At no time shall the Adjustment Reserve be
less than zero.

             Inventory
Base means, at any time, an
amount equal to 80% (or such lesser percentage as the Administrative Agent may
in its reasonable credit judgment, applying standards customary to
institutional asset-based lenders, determine from time to time following any
adverse change in quality, composition, salability or other measure of value of
the Inventory) of the orderly liquidation value (net of liquidation expenses)
of Eligible Inventory at such time, as determined by the Administrative Agent
from time to time in its reasonable discretion.

             (c)         amending
Section 4.2(c) Letter of Credit and Acceptance Fees by amending subpart
(i) thereof by:

                        (i)            deleting the phrase “the Applicable
Margin applicable from time to time to Eurodollar Rate Loans” appearing therein
and substituting therefor the figure “3.75%”; and

                        (ii)           inserting immediately before the
phrase “1/4 of 1%” appearing therein, the phrase “the greater of $125 or”;

             (d)        amending
Section 8.14(a) Schedule of Receivables in its entirety to read as
follows:

             (a)         Schedule of Receivables.

             (i)          Weekly
Schedule of Receivables.  Commencing
August 31, 2001, the Borrowers shall deliver to the Administrative Agent not
later than Wednesday of each week a Schedule of Receivables which:

             (A)       shall be
prepared as of the last Business Day of the immediately preceding week, and

             (B)        shall
set forth a summary aged trial balance of all its then existing Receivables,
specifying the names and balance due for each Account Debtor obligated on a
Receivable so listed.

             (ii)         Monthly Schedule of Receivables.  The Borrowers shall deliver to the
Administrative Agent 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 a Schedule of Receivables which:

             (A)       shall
be prepared as of the last day of the immediately preceding Fiscal Month,

             

             (B)        shall be
reconciled to the Borrowing Base Certificate as of such last day,

             (C)        shall
set forth a summary aged trial balance of all its then existing Receivables,
specifying the names and balance due for each Account Debtor obligated on a
Receivable so listed, and

             (D) shall include on such schedule delivered for the
months of March and September of each year an Account Debtor address list
including all Account Debtors on Receivables reflected on such schedule.

             (e)         amending
Section 11.1 Financial Ratios by:

             (i)           deleting subsections (b) and (c)
thereof in their entireties, and

(ii)        adding
a new subsection (b) to the end thereof to read as follows:

            (b)      Minimum EBITDA.  EBITDA (i) for the period of four
consecutive Fiscal Quarters ending on September 30, 2001, to be less than
$18,000,000 and (ii) for any period of four consecutive Fiscal Quarters ending
after September 30, 2001, to be less than $15,000,000.

(f)         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 (i) during Fiscal Year 2001 in
an amount not greater than $6,500,000 and (ii) from January 1, 2002 through
April 15, 2002 in an amount not greater than $3,000,000.

             (g)        amending Section 11.14 Minimum
Availability in its entirety to read as follows:

             Section 11.14   Minimum Availability.  Permit Revolving Credit Availability at any
time to be less than $10,000,000, except that (i) during the period August 16
through September 30 of 2001, Revolving Credit Availability shall not be less
than $15,000,000 and (ii) during the period February 1 through March 31 of any
year, Revolving Credit Availability shall not be less than $25,000,000.

             (h)        amending
Section 15.2 Expenses by amending subsection (d) thereof by deleting the
parenthetical phrase at the end thereof in its entirety; and

             (i)          further
amending the Loan Agreement by deleting Annex B - Pricing Matrix in its
entirety.

             Section
2.         Effectiveness of Amendment.  Section 1 of this Amendment shall become
effective as of the date hereof on the date (the “Amendment Effective Date”) on
which the Administrative Agent shall have received (1) an amendment fee in the
amount of $307,500 to be shared Ratably among the Lenders in accordance with
their respective Commitments, which fee shall not be
subject to refund or rebate of any kind whatsoever, and (2) 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 request.

             Section 3.         Additional Covenant. 
The Borrowers agree to engage, not later than August 31, 2001 and at
their own expense, a qualified independent appraiser acceptable to the Lenders
to (i) perform an appraisal of the Borrowers’ Inventory, which appraisal shall
be of a scope satisfactory to the Lenders, and (ii) prepare and deliver to the Lenders
not later than October 1, 2001 a written appraisal report in form and substance
satisfactory to the Lenders.  The
failure of the Borrowers to comply timely with the provisions of the Section 3
shall, at
the option of the Required Lenders, constitute an Event of Default under the
Loan Agreement.

             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.         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.  Delivery of an executed signature page of any
party hereto by facsimile transmission shall be effective as delivery of a
manually delivered counterpart thereof.

             (b)        Governing
Law.  This Amendment shall be
governed by and construed in accordance with the laws of the State of Georgia without
giving effect to the conflict of laws principles thereof.

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/	Gregory
  W. Hunt
	

	 	Name:	 	Gregory
  W. Hunt
	 	Title	 	Senior
  Vice President, Chief Financial Officer and Treasurer
	 
	TOWLE
  MANUFACTURING COMPANY
	By:  	/s/	Gregory
  W. Hunt
	

	 	Name:	 	Gregory
  W. Hunt
	 	Title	 	Senior
  Vice President, Chief Financial Officer and Treasurer
	 	 	 
	LEONARD
  FLORENCE ASSOCIATES, INC.
	By:  	/s/	Gregory
  W. Hunt
	

	 	Name:	 	Gregory
  W. Hunt
	 	Title	 	Senior
  Vice President, Chief Financial Officer and Treasurer
	 	 	 
	WALLACE
  INTERNATIONAL SILVERSMITHS,
	By:  	/s/	Gregory
  W. Hunt
	

	 	Name:	 	Gregory
  W. Hunt
	 	Title	 	Senior
  Vice President, Chief Financial Officer and Treasurer
	 	 	 
	RAUCH INDUSTRIES, INC.
	By:  	/s/	Leonard
  Florence
	

	 	Name:	 	Leonard
  Florence
	 	Title	 	Chairman
  of the Board and Chief Executive Officer
	 	 	 
	ROCHARD, INC.
	By:  	/s/	Leonard
  Florence
	

	 	Name:	 	Leonard
  Florence
	 	Title	 	Chairman
  of the Board and Chief Executive Officer
	 	 	 
	HOLIDAY PRODUCTS, INC.
	By:  	/s/	Leonard
  Florence
	

	 	Name:	 	Leonard
  Florence
	 	Title	 	Chairman
  of the Board and Chief Executive Officer
	 	 	 
	FARBERWARE INC.
	By:  	/s/	Gregory
  W. Hunt
	

	 	Name:	 	Gregory
  W. Hunt
	 	Title	 	Senior
  Vice President, Chief Financial Officer and Treasurer
	 	 	 
	SILVESTRI, INC.
	By:  	/s/	Gregory
  W. Hunt
	

	 	Name:	 	Gregory
  W. Hunt
	 	Title	 	Senior
  Vice President, Chief Financial Officer and Treasurer
	 	 	 
	ADMINISTRATIVE AGENT:	 
	BANK OF AMERICA, N.A.	 
	By:  	/s/	Andrew
  A. Doherty	 
	

	 
	 	Name:	 	Andrew
  A. Doherty	 
	 	Title	 	Vice
  President	 
	 	 	 	 
	LENDERS:	 
	BANK OF AMERICA, N.A.	 
	By:  	/s/	Andrew
  A. Doherty	 
	

	 
	 	Name:	 	Andrew
  A. Doherty	 
	 	Title	 	Vice President	 
	 	 	 	 	 
	AMERICAN
  NATIONAL BANK AND TRUST COMPANY OF CHICAGO	 
	By:  	/s/	Jay
  S. Lewis	 
	

	 
	 	Name:	 	Jay
  S. Lewis	 
	 	Title	 	Commercial
  Banking Officer	 
	 	 	 	 	 
	FLEET
  CAPITAL CORPORATION	 
	By:  	/s/	Matthew
  T. O'Keefe	 
	

	 
	 	Name:	 	Matthew
  T. O'Keefe	 
	 	Title	 	Senior
  Vice President	 
	 	 	 	 	 
	UNION
  BANK OF CALIFORNIA, N.A.	 
	By:  	/s/	Greg
  F. Ennis	 
	

	 
	 	Name:	 	Greg
  F. Ennis	 
	 	Title	 	Vice
  President

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