AMENDMENT AND TEMPORARY WAIVER AGREEMENT
This
THIRD AMENDMENT AND TEMPORARY WAIVER AGREEMENT (this “Amendment”) is made as of
the 12th day of
August, 2009 among:
(a) CONCORD STEEL, INC. (formerly known as
SIG Acquisition Corp.), a Delaware corporation (“Borrower”);
(b) the Lenders, as defined in the Credit
Agreement, as hereinafter defined; and
(c) BANK
OF AMERICA, N.A., successor to LaSalle Bank National Association, as lead
arranger and administrative agent for the Lenders under the Credit Agreement
(“Administrative Agent”).
WHEREAS,
Borrower, Administrative Agent and the Lenders are parties to that certain
Credit Agreement, dated as of October 3, 2006, that provides, among other
things, for loans and letters of credit aggregating Thirty-Three Million Dollars
($33,000,000), all upon certain terms and conditions (as amended and as the same
may from time to time be further amended, restated or otherwise modified, the
“Credit Agreement”);
WHEREAS,
Borrower, Administrative Agent and the Lenders desire to amend the Credit
Agreement to modify certain provisions thereof and add certain provisions
thereto;
WHEREAS,
each capitalized term used herein and defined in the Credit Agreement, but not
otherwise defined herein, shall have the meaning given such term in the Credit
Agreement; and
WHEREAS,
unless otherwise specifically provided herein, the provisions of the Credit
Agreement revised herein are amended effective as of the date of this
Amendment;
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
and for other valuable consideration, Borrower, Administrative Agent and the
Lenders agree as follows:
1. Amendment to
Definitions. Section 1.1 of the Credit
Agreement is hereby amended to delete the definitions of “Applicable Margin”,
“Base Rate”, “Base Rate Margin”, “Borrowing Base”, “L/C Fee Rate”, “LIBOR
Margin”, “LIBOR Rate” and “Non-Use Fee Rate” therefrom and to insert in place
thereof, respectively, the following:
“Applicable Margin” means the Base Rate
Margin or the LIBOR Margin, as appropriate.
“Base Rate” means at any time a rate per
annum equal to the greatest of (a) the Federal Funds Rate plus fifty (50.00)
basis points, (b) the Prime Rate, and (c) three hundred twenty-five (325.00)
basis points.
“Base Rate Margin” means a rate per
annum equal to four hundred fifty (450.00) basis points.
“Borrowing Base” means an amount equal
to the sum of:
(a) (i) for the period from the Third
Amendment Effective Date through August 17, 2009, Three Hundred Ninety-Five
Thousand Dollars ($395,000), (ii) for the period from August 18, 2009 through
August 24, 2009, Seven Hundred Ninety Thousand Dollars ($790,000), (iii) for the
period from August 25, 2009 through August 31, 2009, One Million One Hundred
Seventy-Eight Thousand Dollars ($1,178,000), (iv) for the period from September
1, 2009 through September 12, 2009, One Million Three Hundred Eighty-Two
Thousand Dollars ($1,382,000), and (v) for the period from September 13, 2009
and thereafter, Zero Dollars; provided that the amounts set forth in subparts
(iii) and (iv) above are subject to confirmation by the financial consultant
hired pursuant to Section 10.13 hereof (acting reasonably) as to the
reasonableness of the amount and timing of payments set forth in the Budget for
such periods; plus
(b) the undrawn amount of the Letter of
Credit outstanding on the Third Amendment Effective Date;
plus
(c) (i) any amount due and payable by
Borrower to the financial consultant hired pursuant to Section 10.13 hereof, but
only to the extent such amount is approved in advance by Administrative Agent,
and (ii) interest payable to the Lenders under Section 4.2
hereof.
“L/C Fee Rate” means a rate per annum
equal to two hundred (200.00) basis points.
“LIBOR Margin” means a rate per annum
equal to six hundred (600.00) basis points.
“LIBOR Rate” means a rate per annum
equal to the greater of (a) the quotient obtained by dividing (i) the rate of
interest at which United States dollar deposits in an amount comparable to the
amount of the relevant LIBOR Loan and for a period equal to the relevant
Interest Period are offered in the London Interbank Eurodollar market at 11:00
A.M. (London time) two Business Days prior to the commencement of such Interest
Period (or three Business Days prior to the commencement of such Interest Period
if banks in London, England were not open and dealing in offshore United States
dollars on such second preceding Business Day), as displayed in the Bloomberg Financial
Markets system (or other
authoritative source selected by Administrative Agent in its sole discretion)
or, if the Bloomberg Financial
Markets system or another
authoritative source is not available, as the LIBOR Rate is otherwise determined
by Administrative Agent in its sole and absolute discretion, divided by (ii) a
number determined by subtracting from 1.00 the then stated maximum reserve
percentage for determining reserves to be maintained by member banks of the
Federal Reserve System for Eurocurrency funding or liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D), such
rate to remain fixed for such Interest Period; and (b) one hundred (100.00)
basis points. Administrative Agent’s determination of the LIBOR Rate
shall be conclusive, absent manifest error.
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“Non-Use Fee Rate” means a rate per
annum equal to fifty (50.00) basis points.
2. Addition to
Definitions. Section 1.1 of the Credit
Agreement is hereby amended to add the following new definitions
thereto:
“Budget”
means that certain budget prepared by Borrower, as set forth in the exhibit
attached to the Budget Letter.
“Budget
Letter” means that certain Budget Letter, dated as of the Third Amendment
Effective Date, by and between Administrative Agent and Borrower, as the same
may from time to time be amended, restated or otherwise modified.
“Cash
Collateral Account” means a commercial Deposit Account designated “cash
collateral account” and maintained by one or more Parent Entities with
Administrative Agent, without liability by Administrative Agent or the Lenders
to pay interest thereon, from which account Administrative Agent, on behalf of
the Lenders, shall have the exclusive right to withdraw funds until all of the
Secured Obligations are paid in full.
“Collection” means any payment made from
an Account Debtor to one or more Parent Entities including, but not limited to,
cash, checks, drafts and any other form of payment.
“Controlled Disbursement Account” means
a commercial Deposit Account designated “controlled disbursement account” and
maintained by one or more Parent Entities with Administrative Agent, without
liability by Administrative Agent to pay interest thereon.
“Lockbox”
means the post office box rented by and in the name of one or more Parent
Entities in accordance with Section 10.14(a)
hereof.
“Operating
Account” means a commercial Deposit Account designated “operating account” and
maintained by one or more Parent Entities with Administrative Agent, without
liability by Administrative Agent to pay interest thereon, from which account
such Parent Entity or Parent Entities, as the case may be, shall have the right
to withdraw funds until Administrative Agent, on behalf of the Lenders,
terminates such right after the occurrence of a Default or an Event of
Default.
“Security
Account” means a commercial Deposit Account maintained with Administrative
Agent, without liability by Agent to pay interest thereon, as described in Section 10.14(e)
hereof.
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“Settlement
Date” means each Tuesday (or the
next Business Day if such Tuesday is not a Business Day), or as often as
Administrative Agent, in its sole discretion, deems
appropriate.
“Third Amendment Effective Date” means
August 13, 2009.
3. Amendment to
Provisions Regarding Borrowing Procedures. Article II of the Credit
Agreement is hereby amended to delete Section 2.2.2 therefrom and to insert in
place thereof the following:
2.2.2. Borrowing
Procedures. Borrower shall give a
Notice of Borrowing (which shall include a certification from a Senior Officer
that the requested funds shall be used in a manner consistent with the Budget)
to Administrative Agent of each proposed borrowing not later than (a) in
the case of a Base Rate borrowing, 1:00 P.M. (Eastern Time) on the proposed
date of such borrowing, and (b) in the case of a LIBOR borrowing,
1:00 P.M. (Eastern Time) at least three Business Days prior to the proposed
date of such borrowing. Each such notice shall be effective upon
receipt by Administrative Agent, shall be irrevocable, and shall specify the
date, amount and type of borrowing and, in the case of a LIBOR borrowing, the
initial Interest Period therefor. So long as Administrative Agent has
not received written notice that the conditions precedent set forth in
Article
XI with respect to such
borrowing have not been satisfied, Administrative Agent shall fund such
borrowing on the requested borrowing date. Each borrowing shall be on
a Business Day. Each LIBOR borrowing shall be in an aggregate amount
of at least Two Hundred Fifty Thousand Dollars ($250,000) and integral multiples
of at least One Hundred Thousand Dollars ($100,000).
4.
Amendment to
Swing Line Facility Provisions. Subsection (a) of Section
2.2.4 of the Credit Agreement is hereby amended to delete the last sentence
therefrom and to insert in place thereof the following:
Anything in this Agreement to the
contrary notwithstanding (i) effective on the Third Amendment Effective Date and
thereafter, Swing Line Loans shall not be available, unless otherwise agreed to
by Administrative Agent, in its sole discretion, and (ii) Borrower shall, on the
Third Amendment Effective Date, repay the aggregate outstanding principal amount
of Swing Line Loans then outstanding.
5. Amendment to
Participation in Letters of Credit Provisions. Article II of the Credit
Agreement is hereby amended to delete Section 2.3.2 therefrom and to insert in
place thereof the following:
2.3.2. Participations
in Letters of Credit. Concurrently with the
issuance of each Letter of Credit, the Issuing Lender shall be deemed to have
sold and transferred to each Revolving Credit Lender, and each such Revolving
Credit Lender shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Lender, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender’s Pro Rata Share, in
such Letter of Credit and Borrower’s reimbursement obligations with respect
thereto. (For purposes of clarification, to the extent the Issuing
Lender is also a Revolving Credit Lender, Letters of Credit issued by the
Issuing Lender shall not be included in the calculation of such Revolving Credit
Lender’s Commitment Percentage of the Revolving Credit Commitment (other than
any participation obligations as a Revolving Credit Lender).) If
Borrower does not pay any reimbursement obligation when due, Borrower shall be
deemed to have immediately requested that the Revolving Credit Lenders make a
Revolving Loan which is a Base Rate Loan in a principal amount equal to such
reimbursement obligations. Administrative Agent shall, on each
Settlement Date, notify the Revolving Credit Lenders of each such deemed request
and, without the necessity of compliance with the requirements of Section
2.2.2, Section
12.2 or otherwise such
Lender shall make available to Administrative Agent its Pro Rata Share of such
Revolving Loans in accordance with Section
2.6 hereof. The
proceeds of such Revolving Loan shall be paid over by Administrative Agent to
the Issuing Lender for the account of Borrower in satisfaction of such
reimbursement obligations. For the purposes of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed to be the
Issuing Lender’s “participation” therein. The Issuing Lender hereby
agrees, upon request of Administrative Agent or any Revolving Credit Lender, to
deliver to Administrative Agent or such Revolving Credit Lender a list of all
outstanding Letters of Credit issued by the Issuing Lender, together with such
information related thereto as Administrative Agent or such Revolving Credit
Lender may reasonably request.
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6. Amendment to
Borrowing Provisions. Article II of the Credit
Agreement is hereby amended to add the following new Section 2.6
thereto:
Section 2.6
Funding of
Loans. Anything
herein to the contrary notwithstanding, on and after the Third Amendment
Effective Date, on each Settlement Date (by no later than 2:00 P.M. (Eastern
Time)), Administrative Agent shall notify each Lender of the date, amount and type of borrowing
of each Loan and, in the case of a LIBOR borrowing, the initial Interest Period
with respect thereto. On each settlement
date, each Lender shall
provide Administrative Agent at the office specified by Administrative Agent
with immediately available funds covering such Lender’s Pro Rata Share of such
Loan. Each Lender agrees to reimburse Agent for such Lender’s Pro Rata
Share of the Loans advanced by Administrative Agent on behalf of such Lender on
the date of such notice, subject to no conditions precedent
whatsoever. Each Lender acknowledges and agrees that such Lender’s
obligation to reimburse Administrative Agent is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, the occurrence and continuance of a Default or Event of Default, and
that its payment to Administrative Agent shall be made without any offset,
abatement, recoupment, counterclaim, withholding or reduction whatsoever and
whether or not the Commitment shall have been reduced or
terminated. If
Administrative Agent shall elect to advance the proceeds of any Loan prior to
receiving funds from such Lender, Administrative Agent shall have the right,
upon prior notice to Borrower, to debit any account of Borrower or otherwise
receive such amount from Borrower, promptly after demand, in the event that such
Lender shall fail to reimburse Administrative Agent in accordance with this
subsection. If,
and to the extent, any Lender shall not have made its portion of the Loan
available to Administrative Agent by 3:00 P.M. (Eastern Time) on such Settlement
Date and Administrative Agent shall elect to provide such funds, such Lender
agrees to pay interest on such amount to Administrative Agent, for
Administrative Agent’s account, forthwith on demand, for each day from the date
such amount was to have been delivered to Administrative Agent to the date such
amount is paid, at a rate per annum equal to (a) for the first three days after
demand, the Federal Funds Rate from time to time in effect, and (b) thereafter,
the Base Rate from time to time in effect.
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7. Amendment to Provisions
Regarding Interest Payment Dates. Article IV of the Credit
Agreement is hereby amended to delete Section 4.2 therefrom and to insert in
place thereof the following:
Section
4.2. Interest Payment
Dates. Accrued interest on each Base Rate Loan and LIBOR Loan
shall be payable in arrears on the first day of each calendar month and on the
Termination Date. After the Termination Date, and at any time an
Event of Default exists, accrued interest on all Loans shall be payable on
demand.
8. Addition to Fees
Provisions. Article V of the Credit Agreement is hereby
amended to add the following new Sections 5.4 and 5.5 to the end
thereof:
Section 5.4. Collateral
Audit and Appraisal Fees. Borrower shall promptly
reimburse Administrative Agent, for its sole benefit, for all costs expenses
relating to collateral field audits, appraisals (including appraisals for
equipment and machinery, real property and Inventory) or other collateral
assessments that may be conducted from time to time by or on behalf of
Administrative Agent, the scope and frequency of which shall be in the sole
discretion of Administrative Agent.
Section 5.5. Authorization
to Debit Accounts. Borrower hereby agrees that
Administrative Agent has the right to debit from any deposit account (including
the Cash Collateral Account) of Borrower, amounts owing to Administrative Agent
by Borrower under this Agreement and the Loan Documents for payment of fees and
expenses incurred in connection therewith.
9.
Amendment to Application of
Payments Provisions. Article VII of the Credit Agreement is hereby
amended to delete Section 7.1 therefrom and to insert in place thereof the
following:
Section 7.1. Making of
Payments.
(a) Payments
from Borrower. All payments of principal
and interest on the Loans, and of all fees, shall be made by Borrower to
Administrative Agent in immediately available funds at the office specified by
Administrative Agent not later than 2:00 P.M. (Eastern Time) on the date due;
and funds received after that hour shall be deemed to have been received by
Administrative Agent on the following Business Day. All payments
under Section
8.1 shall be made by
Borrower directly to the Lender entitled thereto without setoff, counterclaim or
other defense.
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(b) Payments to
Lenders.
(i) On each Settlement Date, Administrative
Agent shall distribute to each Lender its Pro Rata Share, if any, of the amount
of principal payments received by Administrative Agent for the account of such
Lender.
(ii) With respect to interest, commitment
fees and other payments received by Administrative Agent from Borrower,
Administrative Agent shall promptly distribute to each Lender its Pro Rata
Share, if any, of the amount of interest, commitment fee or other payment
received by Administrative Agent for the account of such
Lender.
10. Amendment to Application of
Payments Provisions. Article VII of the Credit Agreement is hereby
amended to delete Section 7.2 therefrom and to insert in place thereof the
following:
Section 7.2. Application
of Payments.
(a) Application
of Certain Payments. Except as set forth in
subsection (b) below, and so long as no Default or Event of Default has occurred
and is continuing, (a) payments matching specific scheduled payments then due
shall be applied to those scheduled payments, and (b) voluntary and mandatory
prepayments shall be applied as set forth in Section
6.2. After the
occurrence and during the continuance of a Default or an Event of Default, all
amounts collected or received by Administrative Agent or any Lender as proceeds
from the sale of, or other realization upon, all or any part of the Collateral
shall be applied as Administrative Agent shall determine in its reasonable
discretion. Concurrently with each remittance to any Lender of its
share of any such payment, Administrative Agent shall advise such Lender as to
the intended application of such payment.
(b) Application of Amounts in
Cash Collateral Account. The ledger balance in the Cash
Collateral Account as of the end of a Business Day shall be applied to the Term
Loan at the beginning of the next Business Day; provided that prior to any such
application, Administrative Agent, in its sole discretion, may apply proceeds
from the Cash Collateral Account to the payment of fees and expenses payable by
Borrower to Administrative Agent and the Lenders. Upon payment in
full of the Term Loan, funds from the Cash Collateral Account shall be applied
to the other Secured Obligations, at the discretion of Administrative
Agent. Upon payment in full of the Secured Obligations and the
termination of the Commitment, deposits of Collections to the Cash Collateral
Account shall be credited by Administrative Agent as directed by
Borrower.
11. Amendment to Provisions
Regarding Reports, Certificates and Other Information. Article
X of the Credit Agreement is hereby amended to delete Section 10.1.3 therefrom
and to insert in place thereof the following:
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10.1.3. Compliance
Certificates. Contemporaneously with the furnishing of a copy
of each annual audit report pursuant to Section 10.1.1 and
the monthly and quarterly financial statements pursuant to Section 10.1.2, a
duly completed Compliance Certificate, dated the date of such financial
statements and signed by a Senior Officer of Parent, containing (i) a
computation of each of the financial ratios and restrictions set forth in Section 11.13 and a
representation that such Senior Officer has not become aware of any Default or
Event of Default that has occurred and is continuing, or, if there is any such
event, describing such event and the steps, if any, being taken to cure such
event, and (ii) a written statement of Parent’s management setting forth a
discussion of the financial condition, changes in financial condition and
results of operations of Parent and Borrower; provided that, anything herein to
the contrary notwithstanding, the Compliance Certificates that correspond to the
calendar months of January and February of each calendar year shall be delivered
concurrently with the quarterly financial statements of Parent for the first
Fiscal Quarter of such Fiscal Year.
12. Amendment to
Books, Records and Inspections Provisions. Section 10.2 of the Credit
Agreement is hereby amended to delete the last sentence
therefrom.
13. Amendment to
Use of Proceeds. Article X of the Credit
Agreement is hereby amended to delete Section 10.6 therefrom and to insert in
place thereof the following:
Section 10.6. Use of
Proceeds. Borrower agrees that,
unless at any time the Required Lenders shall otherwise expressly consent in
writing, it will use the proceeds of the Loans for working capital as outlined
in the Budget, to pay any draws made on the Letter of Credit existing on the
Third Amendment Effective Date, for payments to the financial consultant hired
pursuant to Section 10.13 hereof, and for payment of any interest due under
Section 4.2 hereof, and not for any other purpose.
14. Addition to Affirmative
Covenants. Article X of the Credit Agreement is hereby amended
to add the following new Sections 10.13 and 10.14 thereto:
Section
10.13. Financial
Consultant. Borrower shall, within one week after the Third
Amendment Effective Date, hire a third-party financial advisor selected by
Borrower and Parent, and acceptable to Administrative Agent, in its discretion,
to review and evaluate the financial condition of the Parent
Entities. Such financial advisor shall commence such review and
evaluation immediately upon such hiring, but in no event any later than one week
after the Third Amendment Effective Date. Borrower shall pay for all
costs and expenses of such financial advisor related to such review and
evaluation. Borrower
agrees to cause the Parent Entities to fully cooperate with Administrative Agent
and such financial advisor.
Section 10.14. Cash Management
System. The Parent Entities shall establish and maintain,
until the payment in full of the Secured Obligations and the termination of the
Commitment, the cash management systems described below. It is the
intent of the parties that Administrative Agent, on behalf of the Lenders,
establish full dominion of the funds of each Parent Entity. The
following cash management provisions shall be effective notwithstanding any
conflicting provisions in the Guaranty and Collateral Agreement to the
contrary:
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(a) Lockbox. On
or before the Third Amendment Effective Date, Parent, on behalf of the Parent
Entities, shall (i) establish a lockbox arrangement with Administrative Agent,
on behalf of the Lenders (the “Lockbox”), which shall be governed by the Master
Agreement, and, within ten days after the Third Amendment Effective Date, shall
request in writing and otherwise take such reasonable steps to ensure that all
Account Debtors forward all Collections directly to the Lockbox (if any Parent
Entity neglects or refuses to notify any Account Debtor to remit all such
Collections to the Lockbox, Administrative Agent shall be entitled to make such
notification), (ii) hold in trust for Administrative Agent, as fiduciary for
Administrative Agent, all checks, cash and other items of payment received by
the Parent Entities, (iii) not commingle any Collections with any other funds or
property of the Parent Entities, but will hold such funds separate and apart in
trust and as fiduciary for Administrative Agent until deposit is made into the
Cash Collateral Account, and (iv) close all Deposit Accounts not held with
Administrative Agent.
(b) Cash Collateral
Account. On or before the Third Amendment Effective Date,
Parent, on behalf of the Parent Entities, shall have established a Cash
Collateral Account with Administrative Agent, on behalf of the
Lenders. All Collections from sales of Inventory or from Account
Debtors sent to the Lockbox shall be deposited directly on a daily basis, and in
any event no later than the first Business Day after the date of receipt
thereof, into the Cash Collateral Account in the identical form in which such
Collections were made (except for any necessary endorsements) whether by cash or
check. All amounts deposited in the Cash Collateral Account from the
Lockbox or any other source shall be the under the sole and exclusive control of
Administrative Agent. No Parent Entity shall have any interest in or
control over such funds. The Cash Collateral Account shall not be
subject to any deduction, set off, banker’s lien or any other right in favor of
any Person other than Administrative Agent.
(c) Operating
Account. Parent, on behalf of the Parent Entities, shall
maintain, in its name, an Operating Account with Administrative Agent, into
which Administrative Agent shall, from time to time, deposit proceeds of the
Revolving Loans made to Borrower for use by the Companies in accordance with the
provisions of Section
10.6 hereof. Unless otherwise agreed by Administrative Agent
and Borrower, any Revolving Loan requested by Borrower and made under this
Agreement shall be deposited into the Operating Account. The Parent
Entities shall not accumulate or maintain cash in the Operating Account or
payroll or other such accounts, as of any date of determination, in excess of
checks outstanding against the Controlled Disbursement Account (or Controlled
Disbursement Accounts) and other deposit accounts approved by Administrative
Agent (such as medical benefit accounts, flexible spending accounts and
automated clearing house accounts) as of that date, and amounts necessary to
meet minimum balance requirements.
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(d) Controlled Disbursement
Account. Parent, on behalf of the Parent Entities, shall
maintain, in the name of Parent, a Controlled Disbursement Account with
Administrative Agent, on behalf of the Lenders. The Parent Entities
may maintain more than one Controlled Disbursement Account. Borrower
shall base its requests for Revolving Loans on, among other things, the daily
balance of the Controlled Disbursement Account (or Controlled Disbursement
Accounts). Borrower shall not, and shall not cause or permit any
Parent Entity, to maintain cash in any Controlled Disbursement Account, as of
any date of determination, in excess of checks outstanding against such account
as of that date, and amounts necessary to meet minimum balance
requirements.
(e) Lockbox and Security
Accounts. The Lockbox established pursuant to the Lockbox
agreement and the Cash Collateral Account, the Operating Account and the
Controlled Disbursement Accounts shall be Security Accounts, with all cash,
checks and other similar items of payment in such accounts securing payment of
the Secured Obligations.
(f) Costs of
Collection. All reasonable costs of collection of the Accounts
of each Parent Entity, including out-of-pocket expenses, administrative and
record-keeping costs, reasonable attorneys’ fees, and all service charges and
costs related to the establishment and maintenance of the Security Accounts
shall be the sole responsibility of Borrower, whether the same are incurred by
Administrative Agent or such Parent Entity. Borrower hereby
indemnifies and holds Administrative Agent harmless from and against any loss or
damage with respect to any deposits made in the Security Accounts that are
dishonored or returned for any reason. If any deposits are dishonored
or returned unpaid for any reason, Administrative Agent, in its sole discretion,
may charge the amount thereof against the Cash Collateral Account or any other
Security Account or other Deposit Account of the Parent
Entities. Administrative Agent shall not be liable for any loss or
damage resulting from any error, omission, failure or negligence on the part of
Administrative Agent, except losses or damages resulting from Administrative
Agent’s gross negligence or willful misconduct as determined by a final judgment
of a court of competent jurisdiction.
(g) Return of
Funds. Upon the payment in full of the Secured Obligations
(other than continuing indemnification obligations) and the termination of the
Commitment hereunder, (i) Administrative Agent’s security interests and other
rights in funds in the Security Accounts shall terminate, (ii) all rights to
such funds shall revert to the Parent Entities, and (iii) Administrative Agent
will, at Borrower’s expense, take such steps as Borrower may reasonably request
to evidence the termination of such security interests and to effect the return
to the Parent Entities such funds.
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(h) Attorney-in-Fact to Endorse
Documents. Administrative Agent, or Administrative Agent’s
designated agent, is hereby constituted and appointed attorney-in-fact for each
Parent Entity with authority and power to endorse any and all instruments,
documents, and chattel paper upon the failure of such Parent Entity to do
so. Such authority and power, being coupled with an interest, shall
be (i) irrevocable until all of the Secured Obligations are paid, (ii) exercisable by
Administrative Agent at any time and without any request upon Borrower by
Administrative Agent to so endorse, and (iii) exercisable in the name of
Administrative Agent or such Parent Entity. Borrower hereby waives
presentment, demand, notice of dishonor, protest, notice of protest, and any and
all other similar notices with respect thereto, regardless of the form of any
endorsement thereof. Administrative Agent shall not be bound or
obligated to take any action to preserve any rights therein against prior
parties thereto.
15. Amendment to Indebtedness
Provisions. Section 11.1 of the Credit Agreement is hereby
amended to delete subsections (i) and (j) therefrom and to insert in place
thereof, respectively, the following:
(i) unsecured Indebtedness that is
subordinated in right of payment to the Obligations hereunder and otherwise on
terms and conditions acceptable to Administrative Agent and the Required
Lenders, and pursuant to documentation satisfactory to Administrative Agent, up
to an aggregate amount, at any time outstanding, of Ten Million Dollars
($10,000,000); and
(j) Reserved.
16. Closing
Deliveries. Concurrently with the execution of this Amendment
cause Borrower and each Guarantor of Payment to execute the attached
Acknowledgment and Agreement.
17. Fees and
Expenses. Borrower hereby agrees that the following fees and
expenses shall be due and payable as of the Third Amendment Effective Date and
that Administrative Agent is hereby authorized to immediately commence
application of funds in the Cash Collateral Account to the payment of such fees
and expenses:
(a) an amendment fee to Administrative
Agent, for the pro rata benefit of the Lenders, in an amount equal to
Fifty Thousand Dollars ($50,000); and
(b) all
legal fees and expenses of Administrative Agent in connection with this
Amendment.
18. Temporary
Waiver of Specific Defaults. Borrower has notified Agent
and the Lenders that Borrower has failed to comply with certain financial
covenants set forth in Section 11.13 of the Credit Agreement for the period
ending June 30, 2009 (the “Violations”). Borrower has requested that
Administrative Agent and the Lenders temporarily waive the Events
of Default that exist solely by virtue of the
Violations. Administrative Agent and the Lenders hereby temporarily
waive the aforesaid Events of Default for the period from the Third Amendment
Effective Date through September 12, 2009 on the conditions that, after giving
effect to the terms of this Amendment, no Default or Event of Default shall
exist under the Credit Agreement or any other Loan Document. This
Amendment shall serve as evidence of such temporary waiver. Borrower
agrees with Administrative Agent and the Lenders that (a) the temporary waiver
granted herein applies only to the Violations that relate to the periods set
forth in this Section 19 and to no other period, (b) on September 13, 2009 and
thereafter, the Violations shall not have been waived and the related Events of
Default shall be back in effect (unless otherwise waived by Administrative Agent
and the Required Lenders in writing), (c) except with respect to the limited
waiver granted herein specifically relating to the Violations, Administrative
Agent and the Lenders shall not be under any obligation to forbear from
exercising any of their rights or remedies upon the occurrence of any Default or
Event of Default, and (d) Administrative Agent and the Lenders have not
established any course of dealing with respect to such waiver or otherwise that
is inconsistent with the express terms of the Credit Agreement and the other
Loan Documents. The temporary waiver requested by Borrower and granted by
Administrative Agent and the Lenders hereunder relates solely to the items
specifically set forth in this Section 18. No further waiver has been
requested or granted.
11
19. Temporary
Suspension of Certain Representations and Warranties. Borrower has notified Agent
and the Lenders that Borrower is no longer able to make certain of the
representations and warranties set forth in Sections 9.5, 9.6, 9.7, 9.13, 9.14
and 9.22 of the Credit Agreement (the “Suspended Representations and
Warranties”). Administrative Agent and the Lenders hereby agree that
the Suspended Representations and Warranties shall not be in effect for the
period from the Third Amendment Effective Date through September 12,
2009. The temporary suspension of the Suspended Representations
and Warranties requested by Borrower and granted by Administrative Agent and the
Lenders hereunder relates solely to the items specifically set forth in this
Section 19.
20. Confirmation of Obligations
Under Second Amendment Letter Agreement. Borrower hereby
acknowledges and confirms the obligations of Borrower pursuant to that certain
Second Amendment Letter Agreement, dated March 13, 2008.
21. Representations and
Warranties. Borrower hereby represents and warrants to
Administrative Agent and the Lenders that (a) Borrower has the legal power and
authority to execute and deliver this Amendment; (b) the officers executing
this Amendment have been duly authorized to execute and deliver the same and
bind Borrower with respect to the provisions hereof; (c) the execution and
delivery hereof by Borrower and the performance and observance by Borrower of
the provisions hereof do not violate or conflict with the organizational
agreements of Borrower or any law applicable to Borrower or result in a breach
of any provision of or constitute a default under any other agreement,
instrument or document binding upon or enforceable against Borrower; (d)
Borrower is not aware of any claim or offset against, or defense or counterclaim
to, Borrower’s obligations or liabilities under the Credit Agreement or any
Related Writing; and (e) this Amendment constitutes a valid and binding
obligation of Borrower in every respect, enforceable in accordance with its
terms.
22. Waiver. Borrower,
by signing below, hereby waives and releases Administrative Agent and the
Lenders (and their respective directors, officers, employees, attorneys,
affiliates and subsidiaries) from any and all claims, offsets, defenses and
counterclaims, such waiver and release being with full knowledge and
understanding of the circumstances and effect thereof and after having consulted
legal counsel with respect thereto.
12
23. No Other
Promises or Inducements. There are no promises or
inducements that have been made to any party hereto to cause such party to enter
into this Amendment other than those that are set forth in this
Amendment. This Amendment has been entered into by Borrower freely,
voluntarily, with full knowledge, and without duress, and, in executing this
Amendment, Borrower is not relying on any other representations, either written
or oral, express or implied, made to Borrower by Administrative Agent or any
Lender. Borrower agrees that the consideration received by Borrower
under this Amendment has been actual and adequate.
24. References to Credit
Agreement. Each reference that is made in the Credit Agreement
or any Related Writing shall hereafter be construed as a reference to the Credit
Agreement as amended hereby. Except as herein otherwise specifically provided,
all terms and provisions of the Credit Agreement are confirmed and ratified and
shall remain in full force and effect and be unaffected hereby. This Amendment
is a Related Writing.
25. Counterparts. This
Amendment may be executed in any number of counterparts, by different parties
hereto in separate counterparts and by facsimile signature, 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.
26. Headings. The
headings, captions and arrangements used in this Amendment are for convenience
only and shall not affect the interpretation of this Amendment.
27. Severability. Any
term or provision of this Amendment held by a court of competent jurisdiction to
be invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the term or provision so
held to be invalid or unenforceable.
28. Governing
Law. The rights and obligations of all parties hereto shall be
governed by the laws of the State of New York, without regard to principles of
conflicts of laws.
[Remainder
of page intentionally left blank.]
13
JURY TRIAL
WAIVER. BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS, TO THE
EXTENT PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE
IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
BORROWER, AGENT AND THE LENDERS, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.
IN WITNESS WHEREOF, the parties have
executed and delivered this Amendment as of the date first set forth
above.
|
CONCORD STEEL,
INC.,
formerly known as SIG Acquisition Corp. By:
________________________________________
Name:
______________________________________
Title:
_______________________________________
|
|
|
BANK OF AMERICA,
N.A.,
as Administrative Agent, as
Issuing Lender, as
Swing Line Lender and as a Lender By:
________________________________________
Name:
______________________________________
Title:
_______________________________________
|
|
|
FIRSTMERIT BANK,
N.A.
By:
________________________________________
Name:
______________________________________
Title:
_______________________________________
|
|
|
FIFTH THIRD
BANK
By:
________________________________________
Name:
______________________________________
Title:
_______________________________________
|
|
|
RBS CITIZENS, NATIONAL
ASSOCIATION
By:
________________________________________
Name:
______________________________________
Title:
_______________________________________
|
Signature
Page to
GUARANTOR
ACKNOWLEDGMENT AND AGREEMENT
The
undersigned consent and agree to and acknowledge the terms of the foregoing
Third Amendment and Temporary Waiver Agreement dated as of August 13,
2009. The undersigned further agree that the obligations of the
undersigned pursuant to the Guaranty and Collateral Agreement executed by the
undersigned are hereby ratified and shall remain in full force and effect and be
unaffected hereby.
Each
Guarantor of Payment agrees that there are no promises or inducements that have
been made to such Guarantor of Payment to cause such Guarantor of Payment to
execute this Guarantor Acknowledgment and Agreement. The foregoing
Third Amendment and Temporary Waiver Agreement has been acknowledged and
consented to by such Guarantor of Payment freely, voluntarily, with full
knowledge, and without duress, and, in executing this Guarantor Acknowledgment
and Agreement, no Guarantor of Payment is relying on any other representations,
either written or oral, express or implied, made to such Guarantor of Payment by
Administrative Agent or any Lender. Each Guarantor of Payment agrees
that the consideration received by Borrower and the other Credit Parties under
the foregoing Third Amendment and Temporary Waiver Agreement has been actual and
adequate. The undersigned hereby waive and release Administrative
Agent and the Lenders and their respective directors, officers, employees,
attorneys, affiliates and subsidiaries from any and all claims, offsets,
defenses and counterclaims of any kind or nature, absolute and contingent, of
which the undersigned are aware or should be aware, such waiver and release
being with full knowledge and understanding of the circumstances and effect
thereof and after having consulted legal counsel with respect
thereto.
JURY TRIAL
WAIVER. THE UNDERSIGNED, TO THE EXTENT PERMITTED BY LAW,
HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER, AGENT, THE
LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION WITH,
RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.
|
By:
__________________________________
Name:
_______________________________
Title:
________________________________
|
CRC WILMINGTON ACQUISITION,
LLC
By:
__________________________________
Name:
_______________________________
Title:
________________________________
|
|
0000
XXXXX XXXXX XXXXXX, LLC
By:
__________________________________
Name:
_______________________________
Title:
________________________________
|
Signature
Page to
Guarantor
Acknowledgment and Agreement to
Third
Amendment and Temporary Wavier Agreement
