Document:

Exhibit 4.1

 

TERM SHEET FOR PROPOSED RECAPITALIZATION OF

SYRATECH CORPORATION

 

November 11, 2004

 

This term
sheet is not an offer with respect to any securities or solicitation of
acceptances of a chapter 11 plan.  Such
offer or solicitation will be made only in compliance with all applicable
securities laws and/or provisions of the Bankruptcy Code.  This term sheet is being provided in
furtherance of settlement discussions and is entitled to protection pursuant to
Fed. R. Evid. 408 and any similar rule of evidence.

 

	
  Company:

  	
  Syratech Corporation (“Syratech” or “The Company”)

  
	
   

  	
   

  
	
  Transaction Summary:

  	
  A recapitalization effected through a solicitation of all of the
  beneficial holders (the “Noteholders”) of Syratech’s 11% senior notes
  (the “Notes”) in connection with a prearranged plan of reorganization
  for the Company (the “Plan”) under chapter 11, whereby Noteholders
  shall receive (on the effective date of the Plan (the “Effective Date”)
  common stock (the “New Common Stock”) in the Reorganized Syratech (“Reorganized
  Syratech”) and new senior notes to be issued by Reorganized Syratech (the
  “New Senior Notes”) upon the terms and conditions specified herein.

  
	
   

  	
   

  
	
  Impaired Unsecured Creditors(1):

  	
  •           405,000 shares of New
  Common Stock

  •           100% of New Senior
  Notes

  
	
   

  	
   

  
	
  Existing Preferred &Common
  Stockholder’s Recovery:

  	
  Warrants for 5% of New Common Stock on a fully diluted basis:

   

  •  warrant for 2.5% of New Common
  Stock exercisable when Company’s equity value, assuming conversion of the New
  Senior Notes, exceeds $140,000,000

   

  •  warrant for 2.5% of New Common
  Stock exercisable when Company’s equity value, assuming conversion of the New
  Senior Notes, exceeds $155,000,000

   

  •  Term of warrants: 5 years

  
	
   

  	
   

  
	
  New Senior Notes:

  	
  See Appendix A for material terms

  

 

(1)          Class
to include Notes and rejection claims.

 

 

	
  I. Pre
  Arranged Plan of Reorganization

  
	
   

  	
   

  	
   

  
	
  Required Noteholder Approval:

  	
   

  	
  As dictated by the plan solicitation provisions under chapter 11 of
  the US Bankruptcy Code, upon the approval of a majority in number and two-thirds
  in amount of those voting in the Noteholders Class.

  
	
   

  	
   

  	
   

  
	
  Stockholder Approvals:

  	
   

  	
  The Existing Preferred Stockholders and Existing Common Stockholders
  shall be solicited for votes accepting or rejecting the Plan.

  
	
   

  	
   

  	
   

  
	
  DIP Financing:

  	
   

  	
  DIP Financing Facility providing up to a $70,000,000 line of credit
  provided by either existing prepetition lenders, or such other lenders agreed
  upon by the Noteholders’ Committee and the Company, upon terms and conditions
  agreed upon by the Noteholders’ Committee and the Company.

  
	
   

  	
   

  	
   

  
	
  Exit Financing:

  	
   

  	
  Exit Financing Facility of up to $70,000,000 to be provided by the
  DIP Lender, or such other lenders agreed upon by the Noteholders’ Committee
  and the Company, upon terms and conditions agreed upon by the Noteholders’
  Committee and the Company. Exit Financing Facility will include provisions to
  allow for a mezzanine or other working capital facility within the
  $70,000,000 amount, which mezzanine or other working capital facility the
  Company may enter into at any time during the term of the Exit Financing
  Facility. Terms and conditions of the Exit Facility shall be agreed upon by
  the Committee and the Company.

  
	
   

  	
   

  	
   

  
	
  Notes, Existing Common Stock and Stock
  Options:

  	
   

  	
  On the Effective Date, all Notes, Existing Preferred Stock, Existing
  Common Stock, stock options, warrants, or other rights exercisable into
  equity securities of the Company will be canceled.

  
	
   

  	
   

  	
   

  
	
  Other Unsecured Claims:

  	
   

  	
  Customer and vendor contracts and holders of other unsecured claims
  will be unimpaired under the Plan; provided, however, that the
  Company and the Noteholders’ Committee may agree to reject (or, with the
  consent of the other party, modify and assume) executory contracts or
  unexpired leases with entities other than customers or vendors.(1)

  

 

(1)                                  Rejection damage claims arising from rejected
executory  contracts and unexpired leases
shall be placed in the same class as the Noteholders; provided  however,
that as a condition precedent to the effectiveness of the Plan, the allowed
rejection damage claims shall not be greater than $10,000,000.

 

2

 

	
  II. Corporate
  Governance of the Company

  
	
   

  	
   

  	
   

  
	
  Senior
  Management:

  	
   

  	
  The composition of the senior management team of the Reorganized
  Company will be agreed upon by the Company and the Noteholders’ Committee.

  
	
   

  	
   

  	
   

  
	
  Management
  Employment Contracts

  	
   

  	
  To be acceptable to the Noteholders’ Committee and senior management.
  In particular, the employment contracts of Messrs. Meers, Hunt, and Kanter
  will be assumed, subject to such amendments that are acceptable to the
  Noteholders Committee and each of those executives.

  
	
   

  	
   

  	
   

  
	
  Management
  Equity Plan

  	
   

  	
  On the Effective Date, members of the senior management team shall be
  issued, in aggregate, 45,000 shares of New Common Stock. The participating
  members of senior management and the allocation among such individuals shall
  be agreed upon by the Company and the Noteholders Committee. Each individual
  stock grant shall vest as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a)

  	
  25% on the Effective Date,

  
	
   

  	
   

  	
  b)

  	
  37.5% performance vesting

  •      12.5% over $8 million EBITDA, 25% over
  $10 million of EBITDA, and all 37.5% over $12 million

  •      vesting schedule is straight line
  between identified points (i.e., at $9 million EBITDA, 12.5% + 6.25% vests)

  •      Clawback provision if financial targets
  are not met

  
	
   

  	
   

  	
  c)

  	
  37.5% time vesting (12.5% per on each subsequent one-year anniversary
  of the Effective Date).

  
	
   

  	
   

  	
   

  
	
  Board of Directors

  	
   

  	
  The Post-Effective Date Board of Directors shall be comprised of 5
  members, of which (a) 4 members shall be selected by the Noteholders’
  Committee, and (b) one member shall be the CEO. All directors to be
  identified no later than one week prior to confirmation hearing.

  
	
   

  	
   

  	
   

  
	
  Shareholders’ Agreement

  	
   

  	
  On or before the bankruptcy filing to implement the transactions
  contemplated by this term sheet, the Noteholders Committee shall evidence its
  agreement to a term sheet setting forth the material terms of a shareholders
  agreement.

  
	
   

  	
   

  	
   

  
	
  Registration Rights

  	
   

  	
  On or before the bankruptcy filing to implement the transactions
  contemplated by this term sheet, the Noteholders Committee shall evidence its
  agreement to a term sheet setting forth the material terms of a registration
  rights agreement.

  

 

3

 

	
  III. Other
  Provisions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Other Terms:

  	
   

  	
  The Plan will provide for other matters customary for pre-arranged
  plans of reorganization, including, but not limited to, classification and
  treatment of claims, releases of all claims against the Company’s officers,
  directors and advisors, and the affiliates successors and assigns of the
  foregoing; releases of all claims against the members of the Noteholders’
  Committee and their advisors; restated charter and bylaws and other terms, in
  each case upon terms and conditions agreed upon by the Noteholders’ Committee
  and the Company.

  
	
   

  	
   

  	
   

  
	
  Reporting
  Requirements

  	
   

  	
  The Company shall de-register from the ‘34 Act, but prepare quarterly
  and annual reports generally in compliance with the ‘34 Act and make these
  available to stakeholders on a basis to be determined.

  
	
   

  	
   

  	
   

  
	
  Fees and Expenses

  	
   

  	
  Subject to Court approval to the extent required, all transaction
  fees and expenses, including fees and expenses owed pursuant to the Company’s
  engagement letters with Anderson, Kill & Olick, Houlihan Lokey Howard
  & Zukin, Peter J. Solomon Company, and Weil Gotshal & Manges will be
  paid by the Company according to the terms of retention agreements and in no
  event later than the Effective Date of the Plan.

  
	
   

  	
   

  	
   

  
	
  Documentation

  	
   

  	
  The documents evidencing the foregoing shall be in form and substance
  satisfactory to the Noteholders’ Committee.

  
	
   

  	
   

  	
   

  
	
  Conditions to Effectiveness

  	
   

  	
  This term sheet shall become effective only after (a) the approval of
  the Company’s Board of Directors and (b) the execution and delivery to the
  Company of lock-up agreements by the holders of two-thirds in principal
  amount of the Notes that bind any subsequent holders of those Notes to the
  terms of this term sheet and the lock-up agreement.

  

 

4

 

Appendix A

 

Terms of New Senior Notes

 

	
  Principal Amount:

  	
   

  	
  $55,000,000

  
	
   

  	
   

  	
   

  
	
  Term :

  	
   

  	
  Five (5) Years.

  
	
   

  	
   

  	
   

  
	
  Interest:

  	
   

  	
  •     Payable semi-annually

   

  •     First four coupon payments,
  at the option of the Company:

   

  •      8% annual interest if paid in cash, or

   

  •      10% annual interest if paid in kind in
  additional New Senior Notes

   

  •     Subsequent coupon payments
  paid in cash at a 10% annual rate.

  
	
   

  	
   

  	
   

  
	
  Conversion :

  	
   

  	
  Each $1000 principal amount of New Senior Notes shall be convertible
  into 10 shares of New Common Stock.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Conversion not permitted during any period that Company makes or has
  option of making PIK coupon payments on New Senior Notes, unless conversion
  is agreed to by a majority of the Company’s Board of Directors (including the
  CEO in his capacity as a director) and 75% or more of the outstanding
  principal amount of New Senior Notes.

  
	
   

  	
   

  	
   

  
	
  Class
  Conversion :

  	
   

  	
  If 75% or more of the outstanding principal amount of New Senior
  Notes vote to convert the New Senior Notes into shares of New Common Stock,
  then all of the outstanding New Senior Notes shall be automatically converted
  on the same terms.

  
	
   

  	
   

  	
   

  
	
  Redemption by
  Issuer :

  	
   

  	
  The New Senior Notes shall be redeemable by the Company at any time
  at a price equal to 100% of the principal amount plus any accrued and unpaid
  interest. The New Senior Notes shall be redeemable in part by the Company at
  any time in increments of no less than $10,000,000 principal amount, with the
  New Senior Notes subject to redemption being redeemed ratably from all
  holders.

  

 

5

 

	
  Security :

  	
   

  	
  The New Senior Notes shall receive liens in all of the assets and
  property of the Company, junior only to the liens granted to secure the
  indebtedness under or provided for in the Exit Financing Facility.The
  intercreditor agreement governing the rights of the lenders under the Exit
  Financing Facility and the holders of the New Senior Notes shall be
  acceptable to the Noteholders Committee.

  
	
   

  	
   

  	
   

  
	
  Covenants :

  	
   

  	
  Covenants to be agreed on by the Noteholders Committee and the
  Company.

  

 

6Exhibit 4.2

 

 

FORM OF LOCK-UP AGREEMENT

 

with respect to

 

SYRATECH CORPORATION

 

Dated as of November 15, 2004

 

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  Section 1.1

  	
  Definitions

  	
   

  
	
  Section 1.2

  	
  Other Definitional Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II GENERAL RESTRUCTURING
  OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 2.1

  	
  Commercially Reasonable Best Efforts

  	
   

  
	
  Section 2.2

  	
  Voting

  	
   

  
	
  Section 2.3

  	
  Documentation

  	
   

  
	
  Section 2.4

  	
  Good
  Faith

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  III COMPANY RESTRUCTURING OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 3.1

  	
  Commencement of Bankruptcy Proceedings

  	
   

  
	
  Section 3.2

  	
  Modification of Financial Restructuring

  	
   

  
	
  Section 3.3

  	
  Performance of Obligations

  	
   

  
	
  Section 3.4

  	
  No Opposition to Financial Restructuring

  	
   

  
	
  Section 3.5

  	
  Impact of Appointment of Creditors
  Committee

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV NOTEHOLDER RESTRUCTURING
  OBLIGATIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 4.1

  	
  Restrictions on Claim Transfers

  	
   

  
	
  Section 4.2

  	
  No Support For Alternative Restructuring

  	
   

  
	
  Section 4.3

  	
  No Opposition To Financial Restructuring

  	
   

  
	
  Section 4.4

  	
  Fiduciary Exception

  	
   

  
	
  Section 4.5

  	
  Subsequently Acquired Notes

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V EFFECTIVENESS OF AGREEMENT.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 5.1

  	
  Effective
  Date

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI TERMINATION OF AGREEMENT.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 6.1

  	
  Termination Events

  	
   

  
	
  Section 6.2

  	
  Bankruptcy Termination Events

  	
   

  
	
  Section 6.3

  	
  Noteholder Termination

  	
   

  

 

i

 

	
  ARTICLE
  VII REPRESENTATIONS AND WARRANTIES.

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 7.1

  	
  The
  Company

  	
   

  
	
  Section 7.2

  	
  Each
  Noteholder

  	
   

  
	
  Section 7.3

  	
  Conduct
  Business

  	
   

  
	
  Section 7.4

  	
  Lock-Up Noteholders

  	
   

  
	
  Section 7.5

  	
  Other
  Noteholders

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Section 8.1

  	
  Amendments to the Financial Restructuring

  	
   

  
	
  Section 8.2

  	
  Amendments to Agreement

  	
   

  
	
  Section 8.3

  	
  No
  Waiver

  	
   

  
	
  Section 8.4

  	
  Further Assurances

  	
   

  
	
  Section 8.5

  	
  Complete Agreement

  	
   

  
	
  Section 8.6

  	
  Notices

  	
   

  
	
  Section 8.7

  	
  Governing
  Law

  	
   

  
	
  Section 8.8

  	
  Consent to Venue and Jurisdiction

  	
   

  
	
  Section 8.9

  	
  Consent to Service of Process

  	
   

  
	
  Section 8.10

  	
  Specific Performance

  	
   

  
	
  Section 8.11

  	
  Headings

  	
   

  
	
  Section 8.12

  	
  Successors and Assigns

  	
   

  
	
  Section 8.13

  	
  Counterparts

  	
   

  
	
  Section 8.14

  	
  No Third-Party Beneficiaries

  	
   

  
	
  Section 8.15

  	
  No
  Solicitations

  	
   

  
	
  Section 8.16

  	
  Consideration

  	
   

  
	
  Section 8.17

  	
  Public Disclosures

  	
   

  
	
  Section 8.18

  	
  Reservation of Rights

  	
   

  

 

ii

 

LOCK-UP AGREEMENT

 

This LOCK-UP AGREEMENT, dated as of November 15,
2004 (this “Agreement”), is entered into by and
among:

 

(a)                                  Company.  Syratech
Corporation and each of its Subsidiaries (collectively, the “Company”); and

 

(b)                                 Noteholders.  The
undersigned holders of Senior Notes who are each identified on the signature
page(s) hereto as a “Lock-up Noteholder”
(collectively, the “Lock-up Noteholders”),
and each other registered or beneficial owner (or investment managers or
advisors for the beneficial owners) of Senior Notes that executes a counterpart
signature page to this Agreement after the date hereof (collectively, the “Other Noteholders,” and each, individually, an “Other Noteholder”; the Lock-up Noteholders and the Other
Noteholders are collectively referred to as the “Noteholders”
and each individually as a “Noteholder”).

 

RECITALS:

 

WHEREAS, the Company issued certain 11%
Senior Notes Due 2007 (the “Senior Notes”)
pursuant to that certain Indenture, dated as of April 16, 1997 between the
Company, the Subsidiaries, and State Street Bank and Trust Company;

 

WHEREAS, the current aggregate outstanding
principal amount owed under the Senior Notes totals approximately $118 million;

 

WHEREAS, the parties hereto have engaged in
good faith negotiations regarding a financial restructuring with respect to the
Company consistent in all material respects with the terms set forth in this
Agreement and the Restructuring Term Sheet attached hereto as Annex A (the “Financial Restructuring”); and

 

WHEREAS, the parties hereto intend to
implement the Financial Restructuring by the commencement of the Bankruptcy
Proceedings and confirmation of the Joint Plan of Reorganization, including
without limitation in each case, the issuance of the New Securities and the
execution of the Stockholders’ Agreement as provided herein and in the
Restructuring Term Sheet.

 

NOW, THEREFORE, in consideration of the
premises and the mutual covenants and agreements set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1            Definitions.  As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this
Section 1.1.

 

2

 

“Accredited Investor”
means “accredited investor” as defined in Rule 501 of Regulation D under the
Securities Act.

 

“Action” means
any lawsuit, action, arbitration, investigation, complaint or legal,
administrative or other governmental proceeding before any Governmental
Authority, mediator, judge or arbitrator.

 

“Agreement” has
the meaning specified in the first page of this Agreement.

 

“Agreement Effective Date”
has the meaning specified in Section 5.1 of this Agreement.

 

“Ancillary Proceedings”
means proceedings commenced by the Company in jurisdictions other than the
United States of America, as the Consenting Lock-Up Noteholders and the Company
may subsequently agree, that are necessary or appropriate to enforce, and are
commenced for the purpose of enforcing, the orders and judgments of the court
with jurisdiction over the Bankruptcy Proceedings, including but not limited to
enforcing or extending into such jurisdiction (i) the automatic stay under
Section 362 of the Bankruptcy Code, (ii) the discharge injunction under section
1141 of the Bankruptcy Code, and/or (iii) relief similar in effect to the
foregoing, or otherwise effectuate the Financial Restructuring.

 

“Bankruptcy Code”
means 11 U.S.C. § 101 et seq.

 

“Bankruptcy Proceedings”
means (i) cases commenced by the Company under chapter 11 of the Bankruptcy
Code, (ii) Ancillary Proceedings and (iii) cases commenced by the Company under
such other insolvency laws and in such other jurisdictions as the Consenting
Lock-Up Noteholders and the Company may subsequently agree.

 

“Company” has
the meaning given on the first page of this Agreement.

 

“Consenting Lock-up
Noteholders” means Lock-up Noteholders who hold in the aggregate at
least 75% of the principal amount of Senior Notes held by Lock-up Noteholders.

 

“Disclosure Statement”
means a disclosure statement with respect to the Joint Plan of Reorganization
that complies with section 1125 of the Bankruptcy Code in a form reasonably
acceptable to the Consenting Lock-up Noteholders.

 

“Eligible Offeree”
means a Person that is an Accredited Investor.

 

“Financial Restructuring”
has the meaning given in the Recitals of this Agreement.

 

“Governmental Authority”
means any national, supranational, federal, state, province, county, city,
municipal or other political subdivision, whether within or outside the United
States, or any government, department, commission, board, bureau, court, agency
or any other instrumentality of any of them.

 

“Informal Noteholders’
Committee” means the informal committee of holders and beneficial
owners of the Senior Notes that have negotiated the terms of the Financial
Restructuring with the Company, who are identified on the signature page(s)
hereto.

 

3

 

“Joint Plan of
Reorganization” means a joint plan of reorganization concerning the
Company consistent in all material respects with the terms set forth in this
Agreement and the Restructuring Term Sheet which, if confirmed or approved in
the Bankruptcy Proceedings, will implement the Financial Restructuring.

 

“Lock-up Noteholder”
and “Lock-up Noteholders” has the meaning
given on the first page of this Agreement.

 

“Material Adverse Change”
means any change in the business, condition (financial, legal or otherwise) or
operations of the Company and its subsidiaries, taken as a whole, that could
reasonably be expected to have a material adverse effect (i) on such business,
condition or operations of the Company, taken as a whole, or (ii) on the
ability of the Company to consummate the Financial Restructuring or perform
fully and punctually its obligations under and in respect of this Agreement and
the Financial Restructuring; provided that the filing of the Bankruptcy
Proceedings shall not constitute a Material Adverse Change.

 

“New Common Stock”
has the meaning set forth in the Restructuring Term Sheet.

 

“New Securities”
means the New Common Stock and the New Senior Notes.

 

“New Senior Notes”
has the meaning set forth in the Restructuring Term Sheet.

 

“Noteholder” and
“Noteholders” has the meaning given on
the first page of this Agreement.

 

“Old Indenture”
means the indenture (as amended, modified or supplemented from time to time),
dated as of April 16, 1997, between Syratech Corporation, as issuer, and State
Street Bank and Trust Company as indenture trustee.

 

“Other Noteholder”
and “Other Noteholders” has the meaning given
on the first page of this Agreement.

 

“Person” means
any individual, partnership, corporation, limited liability company,
association, trust, joint venture, unincorporated organization or other entity.

 

 “Relevant Claim” means any amount owed with respect to the
Senior Notes.

 

“Reorganized Company”
means the Delaware corporation that will take the place of and continue the
operations of the Company following of the Financial Restructuring.

 

“Reorganized Company
Charter” means the certificate of incorporation of the Reorganized
Company which authorizes the issuance of the New Securities and the by-laws of
such Reorganized Company.

 

“Restructuring Documents”
means the final, definitive documents that give effect to the Financial
Restructuring including, without limitation, the Joint Plan of Reorganization,
the Disclosure Statement, the Stockholders’ Agreement, the Reorganized Company
Charter and all other documents executed in connection with the Financial
Restructuring .

 

4

 

“Restructuring Term Sheet”
means that certain Restructuring Term Sheet attached hereto as Annex A which
sets forth the material terms and conditions of the Financial Restructuring.

 

“Securities Act”
means the Securities Act of 1933, as amended.

 

“Senior Notes”
means the 11%  Senior Notes Due 2007
issued by the Company pursuant to the Old Indenture.

 

“Stockholders’ Agreement”
means the agreement containing the terms set forth in the Restructuring Term
Sheet to be entered into by and among the Reorganized Company and each Person
who receives New Securities in the Financial Restructuring.

 

“Subsidiary” and
“Subsidiaries” means Wallace
International de P.R., Inc. and CHI International, Inc.

 

“Transfer”
means, in relation to a Relevant Claim, to directly or indirectly
(i) sell, pledge, assign, grant an option with respect to, transfer or
otherwise dispose of any interest (voting or otherwise) in or (ii) enter
into an agreement, commitment or other arrangement to sell, pledge, assign,
grant an option with respect to, transfer or otherwise dispose of any interest
(voting or otherwise) in such Relevant Claim.

 

Section 1.2            Other Definitional
Provisions.

 

(a)           The words “hereof”,
“herein” and “hereunder”
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.

 

(b)           The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of
such terms.

 

ARTICLE II

GENERAL RESTRUCTURING OBLIGATIONS

 

Section 2.1            Commercially
Reasonable Best Efforts.  Each
party hereto agrees, severally and not jointly, to use commercially reasonable
best efforts to complete the Financial Restructuring through (i) the execution
and delivery of the Restructuring Documents, as each is described herein or in
the Restructuring Term Sheet and (ii) the confirmation, enactment and/or
approval in the Bankruptcy Proceedings of the Joint Plan of Reorganization.

 

Section 2.2            Voting.  Each Noteholder represents and warrants,
severally and not jointly, that, as of the date hereof, it is the legal owner,
beneficial owner and/or the investment adviser, representative or manager for
the beneficial owner (with the power to vote and dispose of such claims on
behalf of such beneficial owner) of such beneficial owner’s Relevant
Claim.  Each Noteholder agrees for
itself, except as otherwise provided in Section 3.5, that it shall not vote its
Relevant Claim to reject the Joint Plan of Reorganization provided that the
terms of the Joint Plan of Reorganization and Disclosure Statement with respect
thereto are consistent in all material respects with the terms described in the
Restructuring Term Sheet and the information

 

5

 

provided in the Disclosure
Statement contains information not materially different from that previously
provided to the Lock-up Noteholders.  For
so long as this Agreement shall remain in effect, the Noteholders shall oppose
any action, objection or motion by any party that would result in termination
of this Agreement or the Financial Restructuring, subject to the provisions of
Section 3.5 and Article VIII of this Agreement.

 

Section 2.3            Documentation.  Notwithstanding anything to the contrary
contained in this Agreement, the obligations of the parties hereto to
consummate the Financial Restructuring shall be subject to the preparation of
definitive documents (in form and substance reasonably satisfactory to each of
the parties hereto and their respective counsel) relating to the transactions
contemplated by this Agreement, including, without limitation, the documents
relating to the Joint Plan of Reorganization, Disclosure Statement, the
Restructuring Documents, the Reorganized Company Charter and each other
Restructuring Document, which documents shall be in all respects consistent
with this Agreement (including the Restructuring Term Sheet).

 

Section 2.4            Good Faith.  Each of the parties hereto agrees to
cooperate in good faith with each other party hereto to facilitate the
performance by the parties of their respective obligations hereunder and the
purposes of this Agreement.

 

ARTICLE III

COMPANY RESTRUCTURING OBLIGATIONS

 

Section 3.1            Commencement of
Bankruptcy Proceedings.  If
the required consents of the Noteholders are received to make the Restructuring
Term Sheet effective by its terms, then within 45 days  after
such date (or such later date as the Consenting Lock-up Noteholders may agree),
the Company shall file the Bankruptcy Proceedings including, substantially
simultaneously therewith, the Joint Plan of Reorganization, Disclosure
Statement and such “first-day”
motions and papers as are necessary or appropriate and seek confirmation of the
Joint Plan of Reorganization.   The Joint
Plan of Reorganization, accompanying Disclosure Statement and all “first-day” motions and papers shall be in form and substance
reasonably satisfactory to the Company and counsel to the Consenting Lock-Up
Noteholders.

 

Section 3.2            Modification of
Financial Restructuring.  The
Company shall not, without the prior written consent of the Consenting Lock-up
Noteholders seek to restructure the Company or any of its subsidiaries except
through the Financial Restructuring in accordance with the Restructuring Term
Sheet.

 

Section 3.3            Performance of
Obligations.  The Company
shall perform all its obligations hereunder and under the Restructuring Term
Sheet.

 

Section 3.4            No Opposition to
Financial Restructuring.  The
Company further agrees that it will not object to, or otherwise commence any
proceeding to oppose, the Financial Restructuring and shall not take any action
that is inconsistent with, or that would unreasonably delay the consummation
of, the Financial Restructuring, or the execution, delivery, and performance of
the obligations of the Company under this Agreement (including the
Restructuring Term Sheet).

 

6

 

Section 3.5            Impact of Appointment
of Creditors Committee.  If an
official committee of holders of unsecured claims or similar body is appointed
in the Bankruptcy Proceedings, the Company shall cooperate with the members of
the Informal Noteholders’ Committee in seeking to cause the appointment of the
members of the Informal Noteholders’ Committee to be members of such committee
or body if the Informal Noteholders’ Committee so elects (but the fact of such
service on such committee or body shall not otherwise affect the continuing
obligations of such Noteholders under this Agreement or the validity or
enforceability of this Agreement; provided that, to the extent that a
Noteholder is acting in his or its capacity as a member of such committee or
body, such Noteholder will not be prohibited from acting as required by the
fiduciary duties of a member of such committee or body in its good faith
judgment and will not be liable to the parties hereto or in respect hereof for
so acting).

 

ARTICLE IV

NOTEHOLDER RESTRUCTURING OBLIGATIONS

 

Section 4.1            Restrictions on Claim
Transfers.  Each Noteholder
hereby agrees that it shall not Transfer any of the Senior Notes, unless the
transferee agrees in writing to be bound by all of the terms and conditions of
this Agreement by executing a counterpart signature page of this Agreement and
such Noteholder provides a copy of such executed signature page to the
Noteholders’ counsel and the Company as set forth in this Agreement.  Any Transfer of the Senior Notes that does
not comply with the foregoing shall be deemed ineffective to Transfer any right
to accept the Joint Plan of Reorganization, which right shall remain with and
be exercised only by the purported transferor.

 

Section 4.2            No Support For
Alternative Restructuring. 
Each Noteholder agrees that, except as otherwise provided in Section
3.5, (i) it will not vote for, consent to, provide any support for, participate
in the formulation of, or solicit or encourage others to formulate any tender
offer, settlement offer, or exchange offer for the Senior Notes except as
contemplated by the Restructuring Term Sheet and (ii) it will permit the prompt
public disclosure, including in a press release, of the contents of this
Agreement (and the Restructuring Term Sheet), including, but not limited to,
the commitments given in this Article IV and the Restructuring Term Sheet, but
not including information with respect to such Noteholder’s name or specific
ownership of Senior Notes.

 

Section 4.3            No Opposition To
Financial Restructuring.  Each
Noteholder further agrees that it will not object to, or otherwise commence any
proceeding to oppose, the Financial Restructuring or the Joint Plan of
Reorganization, and shall not take any action that is inconsistent with, or
that would unreasonably delay the consummation of, the Financial Restructuring
or the Joint Plan of Reorganization.

 

Section 4.4            Fiduciary Exception.  Nothing in this Agreement shall be deemed to
prevent any Noteholder from taking any action that it is obligated to take in
the performance of any fiduciary or similar duty which the Noteholder owes to
any other Person by reason of such Noteholder’s appointment to any official
committee in the Bankruptcy Proceedings or any other insolvency proceeding.

 

7

 

Section 4.5            Subsequently Acquired
Notes.  Each Noteholder
further agrees that any Senior Notes acquired by such Noteholder following the
execution of this Agreement by such Noteholder shall be subject to the terms
and conditions of this Agreement and shall be subject to the same treatment in
the Financial Restructuring as the Senior Notes held by such Noteholder as of
the date of execution of this Agreement by such Noteholder.

 

ARTICLE V

EFFECTIVENESS OF AGREEMENT.

 

Section 5.1            Effective Date.  This Agreement shall become effective as of the
date first written above (the “Agreement Effective Date”)
when each of the following has been satisfied or waived in accordance with the
terms hereof:

 

(a)           Receipt by the Informal Noteholders’
Committee of a counterpart of this Agreement, duly executed and delivered by
the Company; and

 

(b)           Receipt by the Company of
counterparts of this Agreement, duly executed and delivered by Noteholders who
hold in the aggregate at least two-thirds of the principal amount of the Senior
Notes.

 

ARTICLE VI

TERMINATION OF AGREEMENT.

 

Section 6.1            Termination Events.  This Agreement shall terminate, and any
action or consent taken or given by any party hereto in furtherance of or
reliance upon this Agreement (including any vote in favor of the Joint Plan of
Reorganization and any execution or deemed execution of the Stockholders’
Agreement) shall be null and void upon:

 

(a)           The occurrence of a Material Adverse
Change and written notice from the Consenting Lock-up Noteholders of their
respective termination of this Agreement based upon the occurrence of a
Material Adverse Change;

 

(b)           Unless approved in advance or
subsequently ratified by the Consenting Lock-up Noteholders, the Joint Plan of
Reorganization or any other Restructuring Document contains terms that are
materially inconsistent with, or less favorable to the Noteholders than, the
terms and conditions set forth in the Restructuring Term Sheet or the other
Restructuring Documents;

 

(c)           Any representation or warranty made
by the Company in this Agreement or the Restructuring Documents shall have been
untrue in any material respect when made or shall have come untrue in any
material respect, or any breach of any covenant or material provision hereof by
the Company shall have occurred;

 

(d)           The Company’s failure to pay the
reasonable pre-petition or post-petition fees and expenses, when due, of the
financial advisor and the counsel to the Informal Noteholders’ Committee; provided, however, the payment of any such post-petition
fees and expenses will be subject to Bankruptcy Court approval, and only to the
extent so approved;

 

8

 

(e)           The Company’s failure to file prior
to 9:00 a.m. on November 16, 2004 its Form 10-Q with the Securities &
Exchange Commission which contains either the Restructuring Term Sheet as an
exhibit, or a summary of the terms of the Restructuring Term Sheet.

 

(f)            The day preceding the filing of any
bankruptcy or insolvency proceeding involving the Company other than the
Bankruptcy Proceedings contemplated by this Agreement; or

 

(g)           Notwithstanding anything in this
Section 6 to the contrary, this Agreement shall automatically terminate on
April 30, 2005 without the requirement of any further action by any of the
parties hereto unless extended in writing by the Company and the Consenting
Lock-up Noteholders.

 

Section 6.2            Bankruptcy Termination
Events.  Notwithstanding
anything to the contrary contained herein, this Agreement and all obligations
of the parties hereto shall terminate if (i) the Company fails to commence
the Bankruptcy Proceedings and file the Joint Plan of Reorganization and the
Disclosure Statement on or before December 31, 2004; (ii) the
Disclosure Statement is not approved within 60 days from the date the Company
commences the Bankruptcy Proceedings; (iii) the Joint Plan of
Reorganization is not confirmed by the Bankruptcy Court having jurisdiction
over the Bankruptcy Proceedings within 45 days  after
the approval of the Disclosure Statement; (iv) the effective date of the
Joint Plan of Reorganization is not within 11 days from the date that the Joint
Plan of Reorganization is confirmed; (v) the Company shall have filed any
motion or other pleading, or otherwise shall have brought any action or
proceeding, challenging or objecting to the claims of a Noteholder or otherwise
seeking any recovery from, or injunctive relief against, a Noteholder (other
than with respect to any alleged or actual breach by a Noteholder of the terms
of this Agreement or any other agreement between the Company and such Noteholder);
(vi) the Bankruptcy Proceedings shall have been dismissed or converted to
a case under Chapter 7 of the Bankruptcy Code; (vii) a Chapter 11 trustee
is appointed; or (viii) an examiner with enlarged powers relating to the
operation of the Company’s business (powers beyond those set forth in Section
1106(a)(3) and (4) of the Bankruptcy Code) under Section 1106(b) of the
Bankruptcy Code shall have been appointed in the Bankruptcy Proceedings.

 

Section 6.3            Noteholder Termination.  If not earlier terminated, this Agreement may
be terminated by the Consenting Lock-up Noteholders if the Company does or
effects any of the following actions, except to the extent expressly provided
in, and not inconsistent with, this Agreement (including the Restructuring Term
Sheet): (A) adjusts, splits, combines or reclassifies any of its capital stock;
(B) makes, declares or pays any dividend or distribution on, or directly or
indirectly redeems, purchases or otherwise acquires, any shares of its capital
stock or any securities or obligations convertible into or exchangeable for any
shares of its capital stock; (C) grants any person any right or option to
acquire any shares of its capital stock; (D) issues, delivers or sells or
agrees to issue, deliver or sell any additional shares of its capital stock or
any such securities; (E) merges, consolidates, reorganizes or recapitalizes, or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets; or (F) makes or proposes any changes in its
organizational documents.

 

9

 

ARTICLE VII

REPRESENTATIONS AND WARRANTIES.

 

Section 7.1            The Company.  The Company represents and warrants to each
other party hereto that the following statements, as applicable, are true,
correct and complete as of the date hereof:

 

(a)           Power and Authority.  It has all requisite corporate power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby, and to perform its obligations hereunder.

 

(b)           Due Organization. It is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization and it has the requisite power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.

 

(c)           Authorization.  The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly authorized by
all necessary corporate action on its part, other than the approval of the Bankruptcy
Court, which the Company will seek promptly to the extent necessary upon
commencement of the Bankruptcy Proceedings.

 

(d)           No Conflicts.  The execution, delivery and performance of
this Agreement by it does not and shall not: (i) violate any provision of
law, rule or regulation applicable to it; (ii) violate its certificate of
incorporation, bylaws or other organizational documents; or (iii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it is a
party.

 

(e)           Governmental Consents.  The execution, delivery and performance by it
of this Agreement do not and shall not require any registration or filing with,
consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body, other than
(i) the approval of the Bankruptcy Court, which approval the Company will
seek promptly to the extent necessary upon commencement of the Bankruptcy
Proceedings and (ii) filings, if any, with the Securities and Exchange
Commission in the United States.

 

(f)            Binding Obligation.  Subject to the provisions of sections 1125
and 1126 of the Bankruptcy Code and similar applicable law, this Agreement is a
legally valid and binding obligation of it, enforceable against it in
accordance with its terms.

 

(g)           No Action.  There is no pending or, to its knowledge,
threatened Action against or affecting the Company in connection with the
execution, delivery or performance of this Agreement or the Financial
Restructuring.

 

(h)           No Broker.  No broker or investment banker acting on
behalf of the Company or under the authority of the Company is or will be
entitled to any broker’s or finder’s fee or any other commission or similar fee
directly or indirectly from the Company in connection with any of the
transactions contemplated herein, except Peter J. Solomon Company.

 

10

 

(i)            Available Information.  To the best knowledge of the Company, the
financial and other information concerning the Company which the Company or its
representatives have made available to the Noteholders or their representatives
was complete and correct in all material respects when delivered and did not
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not materially
misleading in light of the circumstances under which such statements were made.

 

Section 7.2            Each Noteholder.  Each of the Noteholders hereto, severally and
not jointly, represents and warrants to each other party hereto that the
following statements, as applicable, are true, correct and complete as of the
date hereof:

 

(a)           Power and Authority.  It has all requisite corporate, partnership,
or limited liability company power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby, and to perform its
obligations hereunder.

 

(b)           Authorization.  The execution and delivery of this Agreement
and the performance of its obligations hereunder have been duly authorized by
all necessary corporate, partnership or limited liability company action on its
part.

 

(c)           Binding Obligation.  Subject to the provisions of sections 1125
and 1126 of the Bankruptcy Code and similar applicable law, this Agreement is a
legally valid and binding obligation of it, enforceable against it in
accordance with its terms.

 

Section 7.3            Conduct Business.  The Company agrees that at all times prior to
the termination of this Agreement, unless otherwise agreed in writing by the
Consenting Lock-up Noteholders, that it shall not (i) directly or
indirectly engage in, agree to, or consummate any transaction outside the
ordinary course of its business (other than the Financial Restructuring) or
(ii) enter into any transaction or perform any act which would constitute any
breach of any of its representations, warranties, covenants or obligations
hereunder.

 

Section 7.4            Lock-Up Noteholders.  Each of the Lock-up Noteholders further
represents and warrants to the other parties hereto that:

 

(a)           As of the date of this Agreement, it
is the record or beneficial owner of, or the investment adviser or manager for
the beneficial owners of, the principal amount at maturity of the Senior Notes,
as represented to the financial advisor and counsel to the Informal Noteholders
Committee with the power and authority to vote and dispose of such Senior
Notes;

 

(b)           It is an Eligible Offeree; and

 

(c)           As of the date of this Agreement, to
the best of its knowledge it does not owe any fiduciary or similar duty to any
other Person that would prevent it from taking any action required of it under
this Agreement.

 

Section 7.5            Other Noteholders.  Each of the Other Noteholders further
represents and warrants to the other parties hereto that:

 

11

 

(a)           As of the date it becomes a party to
this Agreement, such Other Noteholder is the beneficial owner of, or the
investment adviser or manager for the beneficial owners of, the principal
amount at maturity of the Senior Notes, as represented to the financial advisor
and counsel to the Informal Noteholders Committee with the power and authority
to vote and dispose of such Senior Notes;

 

(b)           Such Other Noteholder is an Eligible
Offeree; and

 

(c)           As of the date it becomes a party to
this Agreement, to the best of its knowledge, such Other Noteholder does not
owe any fiduciary or similar duty to any other Person that would prevent it
from taking any action required of it under this Agreement.

 

ARTICLE
VIII

MISCELLANEOUS

 

Section 8.1            Amendments to the
Financial Restructuring.  The
Company shall not alter the material terms of the Financial Restructuring
without the prior written consent of the Consenting Lock-up Noteholders, and
the Noteholders shall not alter the material terms of the Financial
Restructuring without the prior written consent of the Company.

 

Section 8.2            Amendments to
Agreement.  Except as
otherwise expressly provided in this Agreement, this Agreement shall not be
amended, modified or supplemented, except in writing signed by the Company and
the Consenting Lock-up Noteholders.

 

Section 8.3            No Waiver.  Each of the parties hereto acknowledges and
agrees that, except as expressly provided in this Agreement, nothing in this
Agreement is intended to, or does, in any manner waive, limit, impair or
restrict the ability of any party to this Agreement to protect and preserve all
of its rights, remedies and interests, including, without limitation, with
respect to its claims against and interests in the Company.

 

Section 8.4            Further Assurances.  Each of the parties hereto covenants and
agrees to execute and deliver all further documents and agreements that may be
reasonably necessary or desirable, or that the Company may reasonably request,
in order to enforce and effectively implement the terms and conditions of this
Agreement, and to refrain from taking any action inconsistent with its
obligations under this Agreement.

 

Section 8.5            Complete Agreement.  This Agreement, including the Schedules and
Annex hereto, constitutes the complete agreement between the parties to this
Agreement with respect to the subject matter hereof and supersedes all prior
and contemporaneous negotiations, agreements and understandings with respect to
the subject matter hereof.  The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intent of the parties to this Agreement.  In the event that any provision of this
Agreement conflicts with the Schedules or Annex hereto, the provisions of this
Agreement shall be controlling.

 

Section 8.6            Notices.  All notices, requests, demands, claims and
other communications hereunder shall be in writing and shall be (i) transmitted
by hand delivery, or (ii) mailed by first class, registered or certified mail,
postage prepaid, or (iii) transmitted by overnight courier, or (iv) transmitted
by telecopy, at the addresses set forth below:

 

12

 

	
  To the Company:

  
	
   

  
	
  Syratech Corporation

  175 McClellan Hwy

  P.O. Box 9114

  E. Boston, MA 02128

  Attn:Mr. Gregory W. Hunt

  
	
  Fax:617-568-1361

  
	
   

  
	
  With copies to:

  
	
   

  
	
  Weil, Gotshal & Manges, LLP

  
	
  100 Federal street, 34th Floor

  
	
  Boston, MA 02110

  
	
  Attn: Andrew M. Troop, Esquire

  
	
  Christopher R. Mirick, Esquire

  
	
  Fax: 617-772-8333

  
	
   

  
	
  To the Noteholders:

  
	
   

  
	
  At the address(es) set forth on the signature pages hereto

  
	
   

  
	
  With copies to:

  
	
   

  
	
  Anderson Kill & Olick, P.C.

  
	
  1251 Avenue of the Americas

  
	
  New York, NY 10020

  
	
  Attn: J. Andrew Rahl, Jr, Esquire

  
	
  Fax: 212-278-1933

  

 

 

Notices mailed or transmitted in accordance
with the foregoing shall be deemed to have been given upon receipt.

 

Section 8.7            Governing Law.  This Agreement shall be governed in all
respects by the laws of the State of New York as such laws are applied to
agreements between New York residents entered into and performed entirely in
the State of New York, except that the General Corporation Law of the State of
Delaware shall govern as to matters of interest-holder approval and other
corporate governance matters relating to the Company.

 

Section 8.8            Consent to Venue and
Jurisdiction.  Each of the
parties hereto irrevocably and unconditionally agrees that any legal action,
suit or proceeding against it with respect to any matter under or arising out
of or in connection with this Agreement or for recognition or enforcement of
any judgment rendered in any such action, suit or proceeding, shall be brought
exclusively (a) if the Company has commenced a case under Chapter 11 of the
Bankruptcy Code, in the United States Bankruptcy Court in which such case is
pending, or (b) if the Company has not commenced a case under Chapter 11 of the
Bankruptcy Code, in the courts of the United States of America for the District
of Massachusetts.  By its execution and
delivery of this Agreement, each of the parties hereto irrevocably accepts and
submits itself to the jurisdiction of the United States Bankruptcy Court in
which the Chapter 11 case is pending, or the courts of the United States of
America for the District of Massachusetts, as applicable under the preceding
sentence, with respect to any such action, suit or proceeding.

 

13

 

Section 8.9            Consent to Service of
Process.  Each party to this
Agreement irrevocably consents to service of process by mail at the address
listed with the signature of each such party in Section 8.6 hereof or on the
signature pages to this Agreement as the case may be.  Each party agrees that its submission to
jurisdiction and consent to service of process by mail is made for the express
benefit of each of the other parties to this Agreement.

 

Section 8.10         Specific Performance.  It is understood and agreed by each of the
parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement by any party and each non-breaching party shall be
entitled to specific performance, injunctive, rescissionary or other equitable
relief as a remedy for any such breach.

 

Section 8.11         Headings.  The headings of the sections, paragraphs and
subsections of this Agreement are inserted for convenience only and shall not
affect the interpretation hereof.

 

Section 8.12         Successors and Assigns.  This Agreement is intended to bind and inure
to the benefit of the parties to this Agreement and their respective successors,
permitted assigns, heirs, executors, administrators and representatives.  The agreements, representations and
obligations of the undersigned parties under this Agreement are, in all
respects, several and not joint.

 

Section 8.13         Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement. 
Delivery of an executed counterpart of a signature page by telecopier
shall be effective as delivery of a manually executed counterpart.  Any Other Noteholder may become party to this
Agreement on or after the date of this Agreement by executing a signature page
to this Agreement.

 

Section 8.14         No Third-Party
Beneficiaries.  Unless
expressly stated in this Agreement, this Agreement shall be solely for the
benefit of the parties to this Agreement, and no other Person or entity shall
be a third-party beneficiary hereof.

 

Section 8.15         No Solicitations.  This Agreement is not intended to be, and
each party to this Agreement acknowledges that it is not, a solicitation of the
acceptance or rejection of any plan of reorganization, including the Joint Plan
of Reorganization for the Company pursuant to Section 1125 of the Bankruptcy
Code.

 

Section 8.16         Consideration.  It is hereby acknowledged by each of the
parties that no consideration (other than the obligations of the other parties
under this Agreement) shall be paid to the parties for their agreement to
support the Joint Plan of Reorganization in accordance with the terms and
conditions of this Agreement.  The
parties hereto further agree and acknowledge that this provision shall not
limit the obligations of the Company to pay the reasonable fees and expenses of
the financial advisor and the counsel to the Informal Noteholders’ Committee
including, without limitation, under those certain letter agreements by and
among the Company and the financial advisor and the counsel to Informal
Noteholders’ Committee, subject to (and to the extent of) approval of the
Bankruptcy Court, if applicable.

 

Section 8.17         Public Disclosures.  Prior to the issuance of any public
disclosures regarding the Financial Restructuring, including those public
disclosures referred to in this

 

14

 

Agreement, the Company shall
consult with and accept all reasonable comments from counsel to the Noteholders
as to the form and substance of such public disclosures materially related to
this Agreement or any other transaction contemplated hereby; provided, that
nothing in this Section 8.17 shall be deemed to prohibit the Company from
making any disclosure which its counsel deems necessary or advisable in order
to satisfy their respective disclosure obligations imposed by law, after such
consultation.

 

Section 8.18         Reservation of Rights.  Except as otherwise expressly provided in
this Agreement, the parties hereto fully reserve any and all of their
rights.  Except as otherwise expressly
provided in this Agreement, nothing herein is intended to, or does, in any
manner waive, limit, impair or restrict the ability of any of the Noteholders
to protect and preserve any of its rights, remedies and interests, including
without limitation, its claims against the Company, or its full participation
in any bankruptcy case filed by the Company.

 

	
  List of Schedules and Annexes:

  
	
  Schedule A:

  	
  Other Noteholders

  
	
  Schedule B:

  	
  Informal Noteholders’ Committee

  
	
  Annex A:

  	
  Restructuring Term Sheet

  

 

[REMAINDER OF PAGE INTENTIONALLY BLANK

 

15

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered by their respective
proper and duly authorized agents as of the date first written above.

 

	
  COMPANY

  
	
   

  
	
  SYRATECH CORPORATION

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SUBSIDIARIES

  
	
   

  
	
  WALLACE INTERNATIONAL DE P.R., INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  
	
   

  
	
   

  
	
  CHI INTERNATIONAL, INC.

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
    Name:

  
	
   

  	
    Title:

  

 

 

LOCK-UP NOTEHOLDERS

 

 

 

 

 

ANNEX A

 

RESTRUCTURING
TERM SHEET

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