Exhibit 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (this "Amendment") is entered
into as of November 10, 2004 by and among REPUBLIC ENGINEERED PRODUCTS, INC., a
Delaware corporation ("Borrower"); the other Credit Parties signatory hereto;
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders, and
the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrower, Agent and Lenders have entered into a Credit
Agreement dated as of May 20, 2004 (as heretofore or hereafter further amended,
modified, supplemented or restated, the "Credit Agreement"), and
WHEREAS, Borrower desires, and the Lenders and the Agent are willing,
to amend the Credit Agreement upon and subject to the terms and conditions set
forth in this Amendment;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. Capitalized words and terms used herein which are defined
in the Credit Agreement shall have the same meaning herein as therein defined,
unless the specific terms or the context hereof otherwise require.
2. Amendments to the Credit Agreement.
(a) Section 1.5(a) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Borrower shall pay interest to Agent, for the
ratable benefit of Lenders in accordance with the
various Loans being made by each Lender, in arrears
on each applicable Interest Payment Date, at the
following rates: (i) with respect to the Revolving
Credit Advances, the Index Rate plus the Applicable
Index Margin per annum or, at the election of
Borrower, the applicable LIBOR Rate plus the
Applicable LIBOR Margin per annum and (ii) with
respect to the Swing Line Loan, the Index Rate plus
the Applicable Index Margin per annum.
The Applicable Margins are as follows:
Applicable Index Margin 1.00%
Applicable LIBOR Margin 2.75%
Commencing on April 1, 2005, the Applicable Margins
shall be adjusted by reference to the following
grids:
LEVEL OF
IF AVERAGE AVAILABILITY IS: APPLICABLE MARGINS:
--------------------------- -------------------
> $200,000,000 Level I
less than or equal to $200,000,000 but > $150,000,000 Level II
less than or equal to $150,000,000 but > $100,000,000 Level III
less than or equal to $100,000,000 but > $50,000,000 Level IV
less than or equal to $ 50,000,000 Level V
APPLICABLE MARGINS
------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
------- -------- --------- -------- -------
Applicable Index Margin 0.00% 0.25% 0.50% 0.75% 1.00%
Applicable LIBOR Margin 1.75% 2.00% 2.25% 2.50% 2.75%
Such adjustments in the Applicable Margins shall be
implemented quarterly on a prospective basis. On the
first Business Day of each Fiscal Quarter, starting
with the first Fiscal Quarter of 2005, Agent shall
notify Borrower and each Lender of the continuance
of, or any change in, the Applicable Margins and any
change in the Applicable Margins shall be effective
as of the first Business Day of such Fiscal Quarter.
If an Event of Default has occurred and is continuing
at the time any reduction in the Applicable Margins
is to be implemented, that reduction shall be
deferred until the first day of the first calendar
month following the date on which such Event of
Default is waived or cured."
(b) Section 1.7(b) of the Credit Agreement is hereby amended
by deleting the number "$250,000" in clause (v) of such Section and
replacing such number with the number "$100,000."
(c) Section 1.9(c) of the Credit Agreement is hereby amended
by (i) deleting each reference therein to "first anniversary" and
replacing each such reference with a reference to "second anniversary"
and (ii) deleting the reference therein to "third anniversary" and
replacing such reference with a reference to "fourth anniversary."
(d) Section 1.18 of the Credit Agreement is amended by
deleting the first sentence of such Section and replacing such deleted
sentence with the following new sentence:
"Upon the prior written consent of Agent, Borrower
may, at its option from time to time, seek to
increase the aggregate Commitments by up to an
aggregate of $100,000,000 in increments of not less
than $50,000,000."
(e) Section 3.26 of the Credit Agreement is hereby amended by
deleting the number "$3,000,000" in such Section and replacing such
number with the number "$5,000,000."
(f) Section 6.3(a) of the Credit Agreement is hereby amended
by deleting the word "and" immediately before clause (viii) of such
Section, replacing such word with a comma, and inserting the following
text at the end of such Section:
", and (ix) other Indebtedness not exceeding $5,000,000 in
the aggregate at any time outstanding."
(g) Section 6.7 of the Credit Agreement is hereby amended by
deleting the word "and" immediately prior to clause (f) of such Section
and inserting the following text immediately after such clause (f):
", and (g) other Liens securing Indebtedness, not
exceeding $5,000,000 in the aggregate at any time
outstanding, so long as such Liens do not attach to any
Inventory."
(h) The definition of "Borrowing Base" contained in Annex A to
the Credit Agreement is amended by deleting the number "$115,000,000"
in clause (b)(iii) of such definition and replacing such number with
the number "$150,000,000."
(i) The following definition is added to Annex A to the Credit
Agreement:
"Average Availability" means, on any day, an amount
equal to the quotient of (a) the sum of the end of
day Borrowing Availability for each day during the
most recently ended Fiscal Quarter, divided by (b)
the number of days in such Fiscal Quarter, all as
determined by Agent.
(j) Annex G to the Credit Agreement is amended by deleting
each reference to "$25,000,000" in paragraph (a) of such Annex G and
replacing such reference with a reference to "$40,000,000."
(k) Annex J to the Credit Agreement is deleted in its entirety
and replaced by Annex J attached as Exhibit A hereto.
3. Conditions to Effectiveness. The effectiveness of this Amendment is
expressly conditioned on satisfaction of each condition set forth in this
Section 3 on or prior to the date hereof:
(a) Documentation. Agent shall have received (on behalf of
itself and the Lenders) the following documentation all of which shall
be in form and substance satisfactory to Agent:
(i) duly executed originals of this Amendment
from each Credit Party and the Lenders;
(ii) duly executed originals of a Revolving Note
in favor of each Lender;
(iii) duly executed original opinion of counsel to
Borrower;
(iv) duly executed acknowledgement and
reaffirmation by each Guarantor; and
(v) all other agreements, certificates and other
documents as Agent may reasonably request to
accomplish the purposes of this Amendment.
(b) Fees.
(i) Borrower shall have paid an amendment fee to
Agent, for the ratable benefit of Lenders
(allocated according to each Lender's
Commitments immediately prior to the
effectiveness of this Amendment), in an
amount equal to $75,000;
(ii) Borrower shall have paid a closing fee to
Agent, for the benefit of those Lenders
whose Revolving Loan Commitment will
increase pursuant to this Amendment
(allocated according to the increase in each
Lender's Commitments), in an amount equal to
0.10% of such increase; and
(iii) Borrower shall have paid the fee to Agent
specified in the fee letter of even date
herewith between Agent and Borrower.
4. Reference to and Effect on Loan Documents.
(a) Ratification. Except as specifically provided in this
Amendment, the Credit Agreement and the other Loan Documents shall
remain in full force and effect and each Credit Party hereby ratifies
and confirms each such Loan Document.
(b) No Waiver. Except as specifically provided in this
Amendment, the execution, delivery and effectiveness of this Amendment
shall not operate as a waiver or forbearance of any right, power or
remedy of Agent or any Lender under the Credit Agreement or any of the
other Loan Documents, or constitute a consent, waiver or modification
with respect to any provision of the Credit Agreement or any of the
other Loan Documents. Upon the effectiveness of this Amendment each
reference in (a) the Credit Agreement to "this Agreement," "hereunder,"
"hereof," or words of similar import and (b) any other Loan Document to
"the Agreement" shall, in each case and except as otherwise
specifically stated therein, mean and be a reference to the Credit
Agreement as amended hereby.
5. Miscellaneous.
(a) Successors and Assigns. This Amendment shall be binding on
and shall inure to the benefit of the Credit Parties, Agent and Lenders
and their respective successors and assigns, except as otherwise
provided herein. No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder
without the prior express written consent of Agent and Lenders. The
terms and provisions of this Amendment are for the purpose of defining
the relative rights and obligations of the Credit Parties, Agent and
Lenders
with respect to the transactions contemplated hereby and there shall be
no third party beneficiaries of any of the terms and provisions of this
Amendment.
(b) Entire Agreement. This Amendment, including all schedules
and other documents attached hereto or incorporated by reference herein
or delivered in connection herewith, constitutes the entire agreement
of the parties with respect to the subject matter hereof and supersedes
all other understandings, oral or written, with respect to the subject
matter hereof.
(c) Fees and Expenses. As provided in Section 11.3 of the
Credit Agreement, the Borrower agrees to pay on demand all fees, costs
and expenses incurred by Agent in connection with the preparation,
execution and delivery of this Amendment.
(d) Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
(e) Severability. Wherever possible, each provision of this
Amendment shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Amendment
shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining
provisions of this Amendment.
(f) Conflict of Terms. Except as otherwise provided in this
Amendment, if any provision contained in this Amendment is in conflict
with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Amendment shall govern and
control.
(g) Counterparts. This Amendment may be executed in any number
of separate counterparts, each of which shall collectively and
separately constitute one agreement. Delivery of an executed signature
page to this Amendment by telecopy shall be effective as delivery of a
manually executed signature page to this Amendment.
(h) Incorporation of Credit Agreement. The provisions
contained in Sections 11.9 and 11.13 of the Credit Agreement are
incorporated herein by reference to the same extent as if reproduced
herein in their entirety, except with reference to this Amendment
rather than the Credit Agreement.
(i) Acknowledgment. Each Credit Party hereby acknowledges its
status as a Credit Party and affirms its obligations under the Credit
Agreement and represents and warrants that there are no liabilities,
claims, suits, debts, liens, losses, causes of action, demands, rights,
damages or costs, or expenses of any kind, character or nature
whatsoever, known or unknown, fixed or contingent (collectively, the
"Claims"), which any Credit Party may have or claim to have against
Agent or any Lender, or any of their respective affiliates, agents,
employees, officers, directors, representatives, attorneys, successors
and assigns (collectively, the "Lender Released Parties"), which might
arise out of or be connected with any act of commission or
omission of the Lender Released Parties existing or occurring on or
prior to the date of this Amendment, including, without limitation, any
Claims arising with respect to the Obligations or any Loan Documents.
In furtherance of the foregoing, each Credit Party hereby releases,
acquits and forever discharges the Lender Released Parties from any and
all Claims that any Credit Party may have or claim to have, relating to
or arising out of or in connection with the Obligations or any Loan
Documents or any other agreement or transaction contemplated thereby or
any action taken in connection therewith from the beginning of time up
to and including the date of the execution and delivery of this
Amendment. Each Credit Party further agrees forever to refrain from
commencing, instituting or prosecuting any lawsuit, action or other
proceeding against any Lender Released Parties with respect to any and
all Claims which might arise out of or be connected with any act of
commission or omission of the Lender Released Parties existing or
occurring on or prior to the date of this Amendment, including, without
limitation, any Claims arising with respect to the Obligations or any
Loan Documents.
[Signature page follows]
IN WITNESS WHEREOF, this Amendment has been duly executed as
of the date first written above.
REPUBLIC ENGINEERED PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxxxx
----------------------------
Title: Executive Vice President &
----------------------------
Chief Financial Officer
----------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By: /s/ Duly Authorized Signatory
---------------------------------
Duly Authorized Signatory
UBS LOAN FINANCE LLC, as Lender
By: /s/ Xxxxxxx X. Saint
---------------------------------
Name: Xxxxxxx X. Saint
----------------------------
Title: Director Banking Products
----------------------------
Services, US
----------------------------
BANK ONE, NA (MAIN OFFICE CHICAGO),
as a Documentation Agent and as
Lender
By: /s/ Xxxx Xxxxxxxxx
---------------------------------
Name: Xxxx Xxxxxxxxx
----------------------------
Title: Director
----------------------------
XXXXXXX XXXXX CAPITAL, A DIVISION OF
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as a Documentation
Agent and as Lender
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------
Title: Vice President
----------------------------
Signature Page to First Amendment to Credit Agreement
Exhibit A
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Lender: Revolving Loan Commitment:
------- --------------------------
General Electric Capital Corporation $ 143,750,000
(including a Swing Line Commitment
of $25,000,000)
UBS Loan Finance LLC $ 31,250,000
Bank One, NA $ 43,750,000
Xxxxxxx Xxxxx Capital, a Division
of Xxxxxxx Xxxxx Business Financial Services Inc. $ 31,250,000
Total: $ 250,000,000
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