Exhibit 10.53
AMENDMENT AND LIMITED WAIVER TO
DEBTOR-IN-POSSESSION REVOLVING CREDIT AGREEMENT
AMENDMENT AND LIMITED WAIVER TO DEBTOR-IN-POSSESSION REVOLVING CREDIT
AGREEMENT, dated as of September 28, 2001 (this "AMENDMENT"), by and among (a)
REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC, a debtor and debtor-in-possession and
a Delaware limited liability company (the "BORROWER"), (b) REPUBLIC TECHNOLOGIES
INTERNATIONAL HOLDINGS, LLC, a debtor and debtor-in-possession and a Delaware
limited liability company, RTI CAPITAL CORP., a debtor and debtor-in-possession
and a Delaware corporation, CANADIAN DRAWN STEEL COMPANY INC., a Canadian
corporation, and NIMISHILLEN AND TUSCARAWAS, LLC, a Delaware limited liability
company (collectively, the "GUARANTORS"), (c) FLEET CAPITAL CORPORATION and the
other lending institutions listed on the signature pages hereof (collectively
the "LENDERS"), (d) FLEET CAPITAL CORPORATION, as Administrative Agent (in such
capacity, the "ADMINISTRATIVE AGENT") for the Lenders, (e) BANK OF AMERICA,
N.A., as syndication agent (the "SYNDICATION AGENT"), and (f) THE CHASE
MANHATTAN BANK, as documentation agent (the "DOCUMENTATION AGENT", and together
with the Administrative Agent and the Syndication Agent, the "AGENTS").
WHEREAS, the Borrower, the Guarantors, the Lenders, the Administrative
Agent, the Syndication Agent and the Documentation Agent are parties to that
certain Debtor-in-Possession Revolving Credit Agreement, dated as of April 3,
2001 (as amended and in effect from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower has informed the Agents and the Lenders that the
Borrower is likely to fail to comply with Section 10.2 of the Credit Agreement
for the Test Period ending on September 30, 2001, such failure to comply, when
occurring, to constitute an Event of Default (such Event of Default being herein
referred to as the "SPECIFIED DEFAULT"); and
WHEREAS, at the request of the Borrower, the Borrower, the Guarantors,
the Agents and the Lenders have agreed to waive the Specified Default, and to
modify certain other terms and conditions of the Credit Agreement, all as
specifically set forth in this Amendment;
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement, herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. LIMITED WAIVER. Upon the effectiveness of this Amendment,
the Administrative Agent and the Lenders hereby waive the Specified Default
solely for the Test Period ending on September 30, 2001. Nothing contained in
this waiver shall be construed to imply a willingness on the part of any Lender
to grant any similar or other future waivers of any of the terms and conditions
(including, without limitation, any failure to comply with Section 10.2 for any
other Test Period) of the Credit Agreement or any other Loan Documents.
SECTION 2. OTHER DEFAULTS. The waiver set forth in Section 1 shall
apply only to the Specified Default. No waiver with respect to any other Default
or Event of Default, whether presently
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existing or hereafter arising, is granted hereby. Any obligation of the Lenders
to make Revolving Credit Loans or of the Issuing Bank to issue, extend or renew
Letters of Credit shall at all times be subject to the satisfaction of all of
the terms and conditions of the Credit Agreement, including, without limitation,
the conditions precedent set forth in the Credit Agreement. The Lenders and the
Agents shall, at all times, retain all of the rights and remedies in respect of
any Default or Event of Default under the Credit Agreement and the other Loan
Documents.
SECTION 3. AMENDMENTS TO THE CREDIT AGREEMENT. The Credit Agreement is
hereby amended in the following respects:
(a) The definition of "Borrowing Base" contained in Section 1.1 of the
Credit Agreement is hereby amended by deleting clause (b) it in its entirety and
replacing it with the following:
"(b) the sum of (i) 60% of the net book value
(determined on a first-in first-out basis at lower of cost or
market) of Eligible Inventory and (ii) the Special Inventory
Advance; PROVIDED, that in no event shall the amount of the
Borrowing Base allocable to Eligible Inventory exceed (A)
during the period commencing on October 1, 2001 through
November 4, 2001, $173,000,000, (B) during the period
commencing on November 5, 2001 through November 29, 2001,
$167,000,000 and (C) at any time thereafter, $164,000,000."
(b) Section 1.1 of the Credit Agreement is hereby amended by inserting
the following new definitions in the appropriate alphabetical sequence:
"ADJUSTED AVAILABILITY" Amount. As at any date of
determination, the lesser of (a) the Maximum Amount, and (b)
the Borrowing Base minus the Rate Protection Exposure."
"KEY MANAGEMENT PERSONNEL. Those individuals listed
in the letter agreement dated as of September 28, 2001,
between the Administrative Agent and the Borrower.
"MAXIMUM AMOUNT. During any period set forth in the
table below, the amount set forth opposite such period in such
table:"
PERIOD AMOUNT
------ ------
10/1/01 through 11/4/01 $360,000,000
11/5/01 through 11/29/01 $355,000,000
Thereafter $337,000,000
(c) Section 2.1 of the Credit Agreement is hereby amended by inserting
the following new sentence at the end thereof:
"Notwithstanding the foregoing, from and after October 1,
2001, the aggregate outstanding amount of Revolving Credit
Loans plus the
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Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not exceed the Adjusted Availability Amount.
(d) Section 3.2 of the Credit Agreement is hereby amended by inserting
the following new sentence at the end thereof:
"Notwithstanding the foregoing, in the event that the sum of
the outstanding amount of the Revolving Credit Loans, the
Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds Adjusted Availability as a result of (i)
any reduction in the Maximum Amount, (ii) any decrease in the
maximum amount of the Borrowing Base allocable to Eligible
Inventory, or (iii) any failure to maintain the minimum
liquidity required by Section 10.3(a), then the Borrower shall
have a period of five (5) days from the date such event occurs
to pay the amount of such excess to the Administrative Agent
for the respective accounts of the Lenders."
(e) Section 10.3 of the Credit Agreement is hereby amended by deleting
it in its entirety and replacing it with the following:
"10.3. MINIMUM LIQUIDITY. (a) The Borrower will not
permit the sum of (i) (A) Availability LESS (B) the sum of the
outstanding amount of the Revolving Credit Loans (after giving
effect to all amounts requested) and the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations, PLUS (ii) the
Net Cash Proceeds from the permitted sale or other disposition
of assets constituting Collateral where such Net Cash Proceeds
are deposited in a Swept Account, PLUS (iii) Unrestricted Cash
to be less than (A) as at the last Business Day of any week
ending during any period set forth in the table below, the
amount set forth opposite such week in such table, and (B) as
at the last Business Day of any week thereafter, eighty-five
percent (85%) of the projected liquidity of the Borrower set
forth in the 13-week rolling liquidity forecast to be
delivered by the Borrower to the Lenders prior to the
commencement of the applicable period of 13-weeks, such
forecast to be acceptable to the Lenders:
WEEK ENDED: AMOUNT
----------- ------
October 6, 2001 $11,000,000
October 13, 2001 $11,800,000
October 20, 2001 $10,975,000
October 27, 2001 $11,500,000
November 3, 2001 $10,350,000
November 10, 2001 $11,900,000
November 17, 2001 $14,650,000
November 24, 2001 $20,150,000
December 1, 2001 $21,700,000
December 8, 2001 $17,550,000
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December 15, 2001 $12,950,000
December 22, 2001 $9,650,000
December 29, 2001 $12,700,000
(b) In addition to, and not in limitation of the
foregoing Section 10.3(a), the Borrower will not permit the
sum of (i) (A) Availability LESS (B) the sum of the
outstanding amount of the Revolving Credit Loans (after giving
effect to all amounts requested) and the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations, PLUS (ii) the
Net Cash Proceeds from the permitted sale or other disposition
of assets constituting Collateral where such Net Cash Proceeds
are deposited in a Swept Account, PLUS (iii) Unrestricted Cash
to be less than $5,000,000 at any time."
(f) Section 13.1(z) of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
"(z) Any Key Management Personnel cease to be
employed by the Borrower and such Key Management Personnel are
not replaced with personnel acceptable to the Majority
Lenders; and"
SECTION 4. WAIVER FEE. The Borrower hereby agrees to pay to the
Administrative Agent, for the ratable accounts of the Lenders, a waiver fee in
the amount of $225,000 (the "WAIVER FEE") on November 30, 2001. The Waiver Fee
shall be fully earned on the date hereof and nonrefundable when paid.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Borrower and each
Guarantor hereby represents and warrants to the Agents and the Lenders as
follows:
(a) Each of the representations and warranties of the Borrower or such
Guarantor contained in the Credit Agreement as modified hereby or in any
document or instrument delivered pursuant to or in connection with the Credit
Agreement as modified hereby are true as of the date hereof and no Default or
Event of Default has occurred and is continuing; and
(b) The execution, delivery and performance of this Amendment and the
transactions contemplated hereby (i) are within the corporate or limited
liability company authority of the Borrower or such Guarantor, (ii) have been
duly authorized by all necessary corporate or limited liability company
proceedings, (iii) do not conflict with or result in any material breach or
contravention of any provision of law, statute, rule or regulation to which the
Borrower or such Guarantor is subject or any judgment, order, writ, injunction,
license or permit applicable to the Borrower or such Guarantor so as to
materially adversely affect the assets, business or any activity of the Borrower
or such Guarantor, and (iv) do not conflict with any provision of the corporate
charter or bylaws of the Borrower or such Guarantor or any agreement or other
instrument binding upon it. The execution, delivery and performance of this
Amendment will result in valid and legally binding obligations of the Borrower
or such Guarantor enforceable against the Borrower or such Guarantor in
accordance with the respective terms and provisions hereof.
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SECTION 6. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective only upon the satisfaction of the following conditions:
(a) this Amendment shall have been executed and delivered by the
Borrower, each Guarantor and the Majority Lenders;
(b) the Borrower shall have paid all unpaid fees and expenses of
Xxxxxxx Xxxx LLP, Xxxxx & Xxxxx and all other advisors and professionals
retained by the Administrative Agent to the extent that copies of invoices have
been presented to the Borrower;
(c) The Borrower and the Guarantors shall have delivered to the
Administrative Agent and the Administrative Agent's Special Counsel, all closing
documents reasonably requested by the Administrative Agent, such documents to be
satisfactory in form and substance to the Administrative Agent and the
Administrative Agent's Special Counsel; and
(d) The Administrative Agent shall have received a signed copy of a
Bankruptcy Court order, satisfactory to the Administrative Agent, approving and
authorizing the Borrower and the Guarantors to enter into this Amendment, and
such order shall be in full force and effect and shall not have been reversed,
modified or amended in any respect.
SECTION 7. RATIFICATION, ETC. The Borrower and each Guarantor hereby
adopts again, ratifies and confirms in all respects, as its own act and deed,
each of the Credit Agreement and the other Loan Documents to which such Person
is a party; the Borrower and each Guarantor hereby adopts again, ratifies and
confirms in all respects, as its own act and deed, the grant of a security
interest under the Security Agreement to which such Person is a party and, in
the case of the Borrower, the Mortgage, in all of the existing and
after-acquired or arising inventory, including raw materials, work in progress
and finished goods; accounts, including accounts receivable, chattel paper, and
insurance refund claims and all other insurance claims and proceeds to which the
Administrative Agent is entitled pursuant to the provisions of Section 8.7 of
the Credit Agreement; all general intangibles, including, without limitation,
all rights to the payment of money, to the extent relating to the Collateral
described above; all rights to all short term Investments described in Section
9.3 of the Credit Agreement constituting Collateral described above or proceeds
thereof, and to the extent such Investments do not constitute Collateral for the
Notes, together with all income therefrom and increases therein; the Canton
Fixed Assets and all insurance refund claims and all other insurance claims,
tort claims, chattel paper and all general intangibles related to the Canton
Fixed Assets; the Pledged Trademarks (as defined in the Trademark Agreement);
and all real and personal property, and any proceeds and products therefrom,
that was not encumbered as of the date on which the Borrower filed for
Bankruptcy under Chapter 11 of the Bankruptcy Code, together with any and all
Uniform Commercial Code financing statements and other instruments or documents
previously executed in connection therewith to create, evidence, perfect or
preserve the priority of such security interest in favor of the Administrative
Agent for the benefit of the Lenders and the Administrative Agent; the Borrower
and each Guarantor hereby adopts again, ratifies and confirms in all respects,
as its own act and deed, any and all Uniform Commercial Code financing
statements executed by the Administrative Agent in the name of such Person,
pursuant to the power of attorney provisions contained in the Security Agreement
to which such Person is a party, to perfect, preserve the perfection, or insure
the priority of such security interest in favor of the Administrative Agent for
the benefit of the Lenders and the
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Administrative Agent; the Borrower under the Mortgage hereby adopts again,
ratifies and confirms, as its own act and deed, the mortgage of certain real
estate assets in which the Borrower has an ownership or other rights; each
pledgor under the Master Pledge Agreement hereby adopts again, ratifies and
confirms in all respects, as its own act and deed, each pledge granted by such
pledgor thereunder; and the Borrower and each Guarantor hereby adopts again,
ratifies and confirms, as its own act and deed, each of the other instruments or
documents delivered in connection with the Credit Agreement or any of the Loan
Documents and purported to be executed by it and acknowledges that all of the
foregoing Loan Documents and other instruments, documents, filings and
recordings shall continue in full force and effect. To the extent that it has
not already done so, the Borrower and each Guarantor hereby waives all
suretyship defenses of whatsoever nature, whether arising out of any Agents' or
any Lender's dealings with the Borrower or any Guarantor, as the case may be, in
respect of the Credit Agreement, any other Loan Document or otherwise. By its
signature below, the Borrower and each Guarantor hereby consents to this
Amendment, and after taking into account this Amendment, acknowledges that this
Amendment shall not alter, release, discharge or otherwise affect any of its
obligations under any Loan Document.
SECTION 8. RELEASE. In order to induce the Agents and the Lenders to
enter into this Amendment, the Borrower and each Guarantor acknowledges and
agrees that: (a) neither the Borrower nor any Guarantor has any claim or cause
of action against any Agent or any Lender (or any of its respective directors,
officers, employees or agents); (b) neither the Borrower nor any Guarantor has
any offset right, counterclaim or defense of any kind against any of its
respective obligations, indebtedness or liabilities to any Agent or any Lender;
and (c) each of the Agents and the Lenders has heretofore properly performed and
satisfied in a timely manner all of its obligations to the Borrower and each
Guarantor. The Borrower and each Guarantor wishes to eliminate any possibility
that any past conditions, acts, omissions, events, circumstances or matters
would impair or otherwise adversely affect any of the Agents' and the Lenders'
rights, interests, contracts, collateral security or remedies. Therefore, the
Borrower and each Guarantor unconditionally releases, waives and forever
discharges (i) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of any Agent or any Lender to the Borrower or such
Guarantor, except the obligations to be performed by any Agent or any Lender on
or after the date hereof as expressly stated in this Amendment, the Credit
Agreement and the other Loan Documents, and (ii) all claims, offsets, causes of
action, suits or defenses of any kind whatsoever (if any), whether arising at
law or in equity, whether known or unknown, which the Borrower or any Guarantor
might otherwise have against any Agent, any Lender or any of its directors,
officers, employees or agent, in either case (i) or (ii), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.
SECTION 9. EFFECT OF AMENDMENT. Except as expressly set forth herein,
this Amendment does not constitute an amendment or waiver of any term or
condition of the Credit Agreement or any other Loan Document, and all such terms
and conditions shall remain in full force and effect and are hereby ratified and
confirmed in all respects. Nothing contained in this Amendment shall be
construed to imply a willingness on the part of the Lenders to grant any similar
or other future waivers of any of the terms and conditions of the Credit
Agreement or the other Loan Documents. Nothing contained herein shall in any way
prejudice, impair or otherwise adversely affect any rights or remedies of the
Agents and the Lenders under the
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Credit Agreement, as amended, or any other Loan Document. This Amendment shall
constitute a Loan Document.
SECTION 10. REIMBURSEMENT OF EXPENSES. The Borrower acknowledges that
all out of pocket costs and expenses incurred by the Agents and the Lenders in
connection with (a) the preparation, negotiation, execution, delivery and
monitoring of this Amendment, and (b) the discussions and meetings that preceded
this Amendment (including, without limitation, the fees and disbursements of any
investment banker, consultant or appraiser retained by the Administrative Agent,
allocable costs of in-house counsel, and all legal and other professional and
consultant's fees and disbursements).
SECTION 11. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts.
SECTION 12. COUNTERPARTS. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as a sealed instrument as of the date first above written.
REPUBLIC TECHNOLOGIES
INTERNATIONAL, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
REPUBLIC TECHNOLOGIES
INTERNATIONAL HOLDINGS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
RTI CAPITAL CORP.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
CANADIAN DRAWN STEEL COMPANY INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
NIMISHILLEN & TUSCARAWAS, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President & CEO
FLEET CAPITAL CORPORATION,
individually and as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
-------------------------------------
Xxxxxx X. Xxxxxxx, Xx.
BANK OF AMERICA, N.A., individually
and as Syndication Agent
By:
Name:
Title:
THE CHASE MANHATTAN BANK,
individually and as Documentation Agent
By:
Name:
Title:
FOOTHILL CAPITAL CORPORATION
By:
Name:
Title:
XXXXXX FINANCIAL, INC.
By:
Name:
Title:
