Exhibit 10.1
As of March 31, 1997
Consolidated Stainless, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Re: First Amendment to Loan and Security Agreement
Gentlemen:
Reference is made to the Loan and Security Agreement dated March 10, 1997 by and
between Consolidated Stainless, Inc. and Mellon Bank, N.A. (the "Loan
Agreement"). All capitalized terms used herein without definition have the
respective meanings ascribed to them in the Loan Agreement.
This will confirm the agreement of Borrower and Bank to amend certain covenants
contained in the Loan Agreement, as follows:
1. Net Income. Section 8.1 (a)(i) of the Loan Agreement, relating to
the Net Income of Borrower for the three (3) month period ended March 31,
1997, is hereby amended so as to provide that the Borrower shall have Net
Loss for such three (3) month period of not greater than Seven Hundred
Seventy-Eight Thousand Dollars ($778,000.00).
2. Effective Net Worth. Section 8.1 (d)(ii) of the Loan Agreement,
relating to the Effective Net Worth of Borrower as of March 31, 1997, is
hereby amended so as to require Borrower to have an Effective Net Worth
of not less than Eight Million Ninety-Three Thousand Dollars
($8,093,000.00) as of such date.
Except as expressly set forth herein, all of the terms and conditions of the
Loan Agreement shall remain unchanged and in full force and effect, and are
hereby ratified, confirmed and continued.
The amendments set forth herein shall only be applicable for the specific date
and time period stated herein, and shall not be applicable to any other dates or
any other time periods whatsoever. Furthermore, this amendment shall not be
applicable to, and shall not imply Bank's agreement to grant any amendment,
consent or waiver in respect of, any covenant not specified herein, or for any
date or time period not specified herein, or in any other circumstances (whether
of like or unlike nature).
Consolidated Stainless, Inc.
As of March 31, 1997
Page - 2 -
The effectiveness of this amendment is expressly subject to the execution and
delivery by SunTrust Banks, Inc. ("SunTrust"), of a certain modification
agreement with Borrower relating to certain covenants under the Convertible
Subordinated Note Purchase Agreement dated as of October 18, 1996 (as amended)
by and among Borrower, SunTrust and the other parties thereto. Such modification
agreement must be in form and substance satisfactory to Bank in its sole
discretion.
Bank hereby requests that Borrower acknowledge and confirm its agreement to the
foregoing amendments by countersigning a counterpart copy of this letter. When
signed, this amendment may not be altered or amended except in accordance with
Section 17.11 of the Loan Agreement.
Very truly yours,
MELLON BANK, N.A.
By:_________________________________
Xxxx X. XxXxxxxx
Its Vice President
Duly Authorized
ACKNOWLEDGED AND AGREED TO INTENDING
TO BE LEGALLY BOUND HEREBY:
CONSOLIDATED STAINLESS, INC.
By:_________________________________
Xxxxxx X. Xxxxxxx
Its Chief Financial Officer
Duly Authorized
