1
Exhibit 10.1(f)
AMENDMENT NO. 3
TO
SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Amendment (this "AMENDMENT") dated as of May 6, 1999, among
Republic Engineered Steels, Inc., a Delaware corporation (the "BORROWER"),
Republic Technologies International Marketing, LLC, a Delaware limited liability
company ("RTI"), BankBoston, N.A. ("BKB"), Bank of America National Trust and
Savings Association (successor to BankAmerica Business Credit, Inc. and referred
to herein as "B of A"), Congress Financial Corporation ("CONGRESS" and, together
with BKB and B of A, the "Banks") and BKB as agent (the "AGENT") for the Banks
amends the Second Amended and Restated Revolving Credit Agreement dated as of
April 25, 1997, as amended by Amendment No. 1 dated as of August 20, 1997 and by
Amendment No. 2 dated as of July 31, 1998 (as so amended, the "CREDIT
AGREEMENT"), among the Borrower, the Banks and the Agent. Terms not otherwise
defined herein which are defined in the Credit Agreement shall have the
respective meanings herein assigned to such terms in the Credit Agreement. Terms
not otherwise defined herein or in the Credit Agreement but which are defined in
section 1 of this Amendment shall have the respective meanings in this Amendment
assigned to such terms in section 1.
WHEREAS, the Borrower has requested that the Agent and the Banks agree
to amend the terms of the Credit Agreement in certain respects, and to waive
certain terms of the Credit Agreement, in order to permit the Borrower to enter
into a joint venture with Bar Technologies Inc., a Delaware corporation
("BARTECH") by forming RTI; and
WHEREAS, the Agent and the Banks are willing to so amend and, where
applicable, grant a waiver of, the terms of the Credit Agreement in such
respects as hereinafter more fully set forth, upon the terms and subject to the
conditions contained herein;
NOW, THEREFORE, in consideration of the mutual agreements contained in
the Credit Agreement, herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. AMENDMENT TO SECTION 1 OF THE CREDIT AGREEMENT.
SECTION 1.1. NEW DEFINITIONS. Section 1 of the Credit Agreement is
hereby amended by inserting the following new definitions in proper alphabetical
order:
"ACKNOWLEDGMENT AND CONSENT REGARDING MEMBERSHIP PLEDGE
AGREEMENT. That Acknowledgment and Consent regarding Membership Pledge
Agreement, dated on or prior to the Third Amendment Effective Date,
among the Borrower, RTI, BarTech and the Agent, in form and substance
satisfactory to the Banks and the Agent."
"ASSIGNED RTI ACCOUNT RECEIVABLE. Any Account Receivable of
the Borrower that has been assigned or otherwise transferred to it by
RTI."
"BARTECH. Bar Technologies Inc., a Delaware corporation."
"BARTECH LENDERS. The financial institutions from time party
to the Credit Agreement, dated as of April 2, 1996, amended and
restated as of April 25, 1996, and further amended and
2
2
restated as of September 5, 1997, among BarTech, B&L, The Chase
Manhattan Bank as agent and as collateral agent, Chase Manhattan Bank
Delaware as fronting bank and such financial institutions."
"BKB ACCOUNT. Account No. 00000000 maintained by the
Borrower with BKB."
"B&L. Bliss & Xxxxxxxx Steel Company, an Illinois corporation
and Subsidiary of BarTech."
"MEMBERSHIP PLEDGE AGREEMENT. That Membership Pledge
Agreement, dated on or prior to the Third Amendment Effective Date, by
the Borrower in favor of the Agent, in form and substance satisfactory
to the Banks and the Agent, pursuant to which the Borrower pledges its
membership interests in RTI to the Agent for the benefit of the Banks
and the Agent."
"XXXXX CASH ACCOUNTS. Account # 185010138286 with NBD Bank
Indiana, Account # 000-0000-0 with National Bank of Maryland, Account #
0311008032 with First Savings Bank of Hegewisch, Account # 550-79213
with BankBoston, N.A. Connecticut, and any other depository bank
account of the Borrower or RTI designated as such by the Agent."
"RTI. Republic Technologies International Marketing, LLC, a
Delaware limited liability company formed pursuant to the RTI
Agreement."
"RTI AGREEMENT The Limited Liability Company Agreement of
Republic Technologies International Marketing, LLC, dated as of March
1, 1999, between BarTech and the Borrower, in the form delivered to the
Banks and the Agent on or before the Third Amendment Effective Date."
"RTI GUARANTY. The Guaranty, dated on or prior to the Third
Amendment Effective Date, made by RTI in favor of the Banks and the
Agent pursuant to which RTI guaranties to the Banks and the Agent the
payment and performance of the Obligations and in form and substance
satisfactory to the Banks and the Agent."
"RTI SECURITY AGREEMENT. The Security Agreement dated on or
prior to the Third Amendment Effective Date, between RTI and the Agent
and in form and substance satisfactory to the Agent."
"SWEPT LOCKBOXES. Lockbox nos. 642462 and 641398 with PNC
Bank, 78162, 77250 and 78147 with NBD Bank, N.A. and 21384 and 73673
with First Chicago NBD Bank, or any other lockboxes designated as such
by the Agent and with respect to which lockbox agreements have been
established in form and substance satisfactory to the Banks and the
Agent."
"SWEPT ACCOUNTS. Those Blocked Accounts numbered #100183416
with Bank One, Akron, N.A., #00000000 with PNC Bank, #03572-93 with NBD
Bank, N.A. and #54-90030 with First Chicago NBD Bank, or any other
Blocked Accounts designated as such by the Agent and with respect to
which Agency Agreements have been established in form and substance
satisfactory to the Banks and the Agent."
"THIRD AMENDMENT. Amendment No. 3 hereto dated as of May 6,
1999, among the Borrower, RTI, the Agent and the Banks."
3
3
"THIRD AMENDMENT EFFECTIVE DATE. The date on which the
conditions to the effectiveness of the Third Amendment (such conditions
being set forth in Section 12 thereof) shall have been satisfied."
SECTION 1.2. AMENDMENTS TO EXISTING DEFINITIONS. The following
definitions are hereby amended as follows:
(a) The definition of "Applicable Margin" in the Credit Agreement is
hereby amended and restated as follows:
"APPLICABLE MARGIN. The Applicable Margin for Base Rate Loans
shall be 0.75%. The Applicable Margin for Eurodollar Rate Loans shall
be 2.75%. The Applicable Margin for the Letter of Credit Fee shall be
2.75%."
(b) The definition of "Collateral" is hereby amended by adding after
the words "rights and interests of the Borrower" and "Investments of the
Borrower" the words "and RTI". The definition of "Collateral" is hereby further
amended by adding after the words "machinery and equipment" the words "of the
Borrower".
(c) The definition of "Eligible Accounts Receivable" is hereby amended
as follows:
(i) The definition of "Eligible Accounts Receivable" is hereby amended
by inserting before the final comma at the end of clause (ii)(A) the following
proviso:
", PROVIDED that, for the purposes of this definition, American Axle
and Manufacturing, Inc. ("AMERICAN AXLE") shall not be considered an Affiliate
of the Borrower during the period of twenty eight days following the Third
Amendment Effective Date, nor shall it be considered an Affiliate of the
Borrower at any time thereafter if an agreement is in effect at such time
respecting the arms-length nature of the Borrower's Accounts Receivable with
American Axle and respecting such other matters related to the Borrower's
Accounts Receivable with American Axle as the Banks and the Agent shall
reasonably require, such agreement to be in form and substance satisfactory to
the Banks and the Agent"
(ii) The definition of "Eligible Accounts Receivable" is hereby amended
by adding to the end of clause (iii) thereof (but before the semi-colon at the
end of such clause) the following text:
"and, if such Account Receivable is an Assigned RTI Account Receivable,
none of RTI, BarTech, or any of BarTech's Subsidiaries has reimbursed
the Borrower for such Assigned RTI Account Receivable pursuant to the
RTI Agreement".
(iii) The definition of "Eligible Accounts Receivable" is hereby
amended by adding the following text immediately before the final period of such
definition:
"PROVIDED that no Assigned RTI Account Receivable shall be an Eligible
Account Receivable (A) unless the Agent shall have received a
commercial finance examination satisfactory to the Agent with respect
to RTI, BarTech and B&L (the Agent reserving the right to cause its
examiners to conduct additional commercial finance examinations of RTI,
BarTech or any of BarTech's Subsidiaries at any time and from time to
time, and, if the Agent's examiners cannot complete such examination
promptly or if the results of any such examination are in any respect
unsatisfactory to the Agent, the Agent shall have the right to
determine immediately that any Assigned RTI Accounts Receivable are not
Eligible Accounts Receivable) and (B) until evidence
4
4
satisfactory to the Agent of the assignment of such Account Receivable
to the Borrower has been provided to the Agent in the applicable
Borrowing Base Report".
(d) The definition of "Security Documents" is hereby amended by
inserting the words "the RTI Security Agreement, the RTI Guaranty, the
Membership Pledge Agreement, the Acknowledgement and Consent regarding
Membership Pledge Agreement" after the words "The Security Agreement," therein.
SECTION 2. AMENDMENT TO SECTION 3 OF THE CREDIT AGREEMENT. Section 3 of
the Credit Agreement is hereby amended by adding the following new Sections 3.4
and 3.5 to the end thereof:
"3.4 AUTOMATIC REPAYMENTS OF REVOLVING CREDIT LOANS PRIOR TO
EVENT OF DEFAULT.
"3.4.1 CREDIT FOR FUNDS TRANSFERRED FROM SWEPT
ACCOUNTS. Prior to the occurrence of an Event of Default as to
which the account officers of the Agent active upon the
Borrower's account have actual knowledge, (i) all funds and
cash proceeds in the form of a wire transfer transferred to
the Agent from the Swept Accounts as contemplated by section
8.13.2(c) shall be credited on the same Business Day as the
Agent's receipt of such amounts (or up to such later date as
the Agent determines that good collected funds have been
received), and applied as contemplated by section 3.4.2, and
(ii) all funds and cash proceeds in the form of an automated
clearing house transfer transferred to the Agent from the
Swept Accounts as contemplated by section 8.13.2(c) shall be
credited, on the next Business Day following the Agent's
receipt of such amounts (or up to such later date as the Agent
determines that good collected funds have been received), and
applied as contemplated by section 3.4.2. For purposes of the
foregoing provisions of this section 3.4, the Agent shall not
be deemed to have received any such funds or cash proceeds on
any day unless received by the Agent before 2:30 p.m. (Boston
time) on such day. The Borrower further acknowledges and
agrees that any such provisional credits or credits in respect
of wire or automatic clearing house funds transfers shall be
subject to reversal if final collection in good funds of the
related item is not received by, or final settlement of the
funds transfer is not made in favor of, the Agent in
accordance with the Agent's customary procedures and practices
for collecting provisional items or receiving settlement of
funds transfers.
3.4.2 APPLICATION OF AUTOMATIC PAYMENTS PRIOR TO
EVENT OF DEFAULT.
(a) Prior to the occurrence of an Event of Default of
which the account officers of the Agent active on the
Borrower's account have knowledge, all funds transferred to
the Agent for application against the Obligations and for
which the Borrower has received credits shall be applied to
the Obligations as follows:
(i) first, to pay amounts then due and
payable under this Credit Agreement, the Revolving
Credit Notes and the other Loan Documents;
(ii) second, to reduce Revolving Credit
Loans made by the Agent pursuant to section 2.8.2 and
for which Settlement has not then been made;
(iii) third, to reduce other Revolving
Credit Loans which are Base Rate Loans;
5
5
(iv) fourth, to reduce Revolving Credit
Loans which are Eurodollar Rate Loans; and
(v) fifth, except as otherwise required by
section 4.2(b) and (c), to the BKB Account.
(b) All prepayments of Eurodollar Rate Loans prior to
the end of an Interest Period shall obligate the Borrower to
pay any breakage costs associated with such Eurodollar Rate
Loans in accordance with section 5.9.
(c) All prepayments of the Revolving Credit Loans
pursuant to this section 3.4.2 shall be allocated among the
Banks making such Revolving Credit Loans, in proportion, as
nearly as practicable, to the respective unpaid principal
amount of such Revolving Credit Loans outstanding, with
adjustments to the extent practicable to equalize any prior
payments or repayments not exactly in proportion. Prior to any
Settlement Date, however, all prepayments of the Revolving
Credit Loans shall be applied in accordance with this section
3.4.2, first to outstanding Revolving Credit Loans of the
Agent.
3.5 AUTOMATIC REPAYMENTS OF REVOLVING CREDIT LOANS AFTER EVENT
OF DEFAULT. Following the occurrence and during the continuance of an
Event of Default of which the account officers of the Agent active on
the Borrower's account have knowledge, all funds transferred to the
Agent from the Swept Accounts for which the Borrower has received
credits shall be applied to the Obligations in accordance with
section 13.4."
SECTION 3. AMENDMENT TO SECTION 6 OF THE CREDIT AGREEMENT. Section 6
of the Credit Agreement is hereby amended by adding the following sentence to
the end thereof:
"The Obligations shall also be guaranteed pursuant to the terms of the
RTI Guaranty. The obligations of RTI under the RTI Guaranty shall be in
turn secured by a perfected first priority security interest (subject
only to Permitted Liens entitled to priority under applicable law) in
all of the assets of RTI, whether now owned or hereafter acquired,
pursuant to the terms of the Security Documents to which RTI is a
party."
SECTION 4. AMENDMENTS TO SECTION 8 OF THE CREDIT AGREEMENT.
(a) Section 8.2 of the Credit Agreement is hereby amended by adding the
following sentence to the end thereof: "RTI will maintain its chief executive
office in Akron, Ohio, or at such other place in the United States of America as
the Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon RTI in respect of the Loan Documents to
which RTI is a party may be given or made."
(b) Section 8.4(i) of the Credit Agreement is hereby amended by
inserting after the text "(B) so long as the Excess Availability is less than
$35,000,000 or if an Event of Default shall have occurred and be continuing" the
text "or upon the Agent's request".
(c) Section 8.13.1 is hereby amended and restated as follows:
"SECTION 8.13.1. BANK ACCOUNTS. Each of the Borrower and RTI
shall, and shall cause each of its Subsidiaries to, require all account
debtors (including, without limitation, account debtors with respect to
all Assigned RTI Accounts Receivable) to make payments to the Swept
Lockboxes or Swept Accounts. The Borrower and RTI, as applicable, shall
maintain lockbox
6
6
agreements with the Blocked Account Banks which maintain Swept
Lockboxes, pursuant to which lockbox agreements all checks, drafts or
other items or amounts in such Swept Lockboxes shall be deposited by
such Blocked Account Bank in the Swept Accounts maintained by such
Blocked Account Bank. Each of Borrower and RTI shall, and shall cause
each of its Subsidiaries to, together with the employees, agents and
other Persons acting on behalf of the Borrower, RTI or any such
Subsidiary, receive and hold in trust for the Agent and the Banks all
payments constituting proceeds of Accounts Receivable (including,
without limitation, Assigned RTI Accounts Receivable) or other
Collateral which, not withstanding the foregoing, come into their
possession or under their control and, immediately upon receipt
thereof, deposit such payments in the form received, with any
appropriate endorsements, in one of the Swept Accounts."
(d) Section 8.13.2(b) is hereby amended and restated as follows:
(b) The Borrower and RTI each expressly agrees that (i)
following notice to the Blocked Account Banks (A) of the existence and
continuance of a Default or an Event of Default (B) or that the Excess
Availability is less than $35,000,000 the Agent may at anytime require
that, from and after the date specified in such notice, all monies
deposited in the Blocked Accounts be transferred on a daily basis to a
cash concentration account with the Agent, which monies shall be
credited against Obligations (or such monies shall be applied directly
to pay down the Obligations without such monies being transferred first
to such a cash concentration account) and (ii) in the event such
transfer is required, upon the request of the Agent, the Borrower and
RTI will take any steps necessary, to effect such transfer, including,
without limitation, the execution and delivery of amendments to each of
the Agency Agreements. From time to time, upon the Agent's reasonable
request, the Borrower shall furnish to the Agent copies of all bank
statements and other notices received by it with respect to the Blocked
Accounts.
(e) The following new section 8.13.2(c) is hereby added to the Credit
Agreement :
"(c) The Borrower and RTI each expressly agree that, as of the
Third Amendment Effective Date, all monies deposited in the Swept
Accounts shall be applied on a daily basis to the Obligations, and the
Borrower and RTI each shall take any steps reasonably deemed by the
Agent to be necessary or advisable to effect such application,
including, without limitation, the execution and delivery of lockbox
agreements and amendments to each of the Agency Agreements. The
Borrower and RTI further agree that, as of Third Amendment Effective
Date and thereafter, (i) the Xxxxx Cash Accounts shall contain,
considered together and in the aggregate, no more than $20,000, (ii)
there shall be no deposits into the Borrower's Account No. 361161864
with NBD Bank, N.A. other than from the BKB Account and (iii) there
shall be no deposits into the Borrower's Account Nos. 00000000 and
00415896 with National Bank of Detroit - Dearborn other than from the
Borrower's Account No. 361161864 with NBD Bank, N.A. The Banks and the
Agent hereby agree that at such time the arrangements specified in this
clause (c) are established to their satisfaction, all requirements in
the Credit Agreement requiring any repayment of the Revolving Credit
Loans pursuant to section 3.4 or section 3.5 or any request for a
Revolving Credit Loan to be greater than a minimum amount or to be a
multiple of any amount shall be waived."
SECTION 5. AMENDMENT TO SECTION 9 OF CREDIT AGREEMENT.
(a) section 9.2 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of clause (xiii), inserting "; and" and deleting the
period at the end of clause (xiv) and inserting the following new subsection:
7
7
(xv) any liens consisting of the sale or transfer of Assigned
RTI Accounts Receivable to BarTech or B&L pursuant to the terms of the
RTI Agreement after the applicable account debtor to whom steel
products were shipped by BarTech or B&L (such shipment having given
rise to such Assigned RTI Account Receivable) refused to accept
delivery of such steel products or otherwise later rejected such steel
products on the basis of the quality of such steel products or their
failure otherwise to conform to such Person's purchase order, PROVIDED
that BarTech or B&L, as applicable, has reimbursed the Borrower for
such Assigned RTI Accounts Receivable in an amount equal to 99% of the
principal amount of such Assigned RTI Accounts Receivable (together
with interest thereon at the rate paid by the Borrower hereunder).
(b) section 9.3 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of subsection (n), replacing the period at the end of
subsection (o) with the text "; and" and inserting the following new subsection
(p):
"(p) Investments consisting of the purchase of Assigned RTI
Accounts Receivable from RTI pursuant to the RTI Agreement and not
otherwise prohibited by the Credit Agreement or any of the other Loan
Documents and Investments consisting of the Borrower's ownership of
Membership Interests in RTI, PROVIDED that nothing in this clause (p)
shall be deemed to permit any other contribution, capital call or other
payment to RTI made as a consequence of or in connection with the
Borrower's ownership of such Membership Interests or otherwise."
(c) Section 9.6 of the Credit Agreement is hereby amended by inserting
the following at the end of such Section:
"This Section 9.6 shall not be deemed to prohibit the sale or
transfer of Assigned RTI Accounts Receivable to BarTech or B&L pursuant
to the terms of the RTI Agreement after the applicable account debtor
to whom steel products were shipped by BarTech or B&L (such shipment
having given rise to such Assigned RTI Account Receivable) refused to
accept delivery of such steel products or otherwise later rejected such
steel products on the basis of the quality of such steel products or
their failure otherwise to conform to such Person's purchase order,
PROVIDED that BarTech or B&L, as applicable, has reimbursed the
Borrower for such Assigned RTI Accounts Receivable in an amount equal
to 99% of the principal amount of such Assigned RTI Accounts Receivable
(together with interest thereon at the rate paid by the Borrower
hereunder).
(d) Section 9 of the Credit Agreement is hereby amended by adding the
following new section 9.16 and section 9.17 thereto:
"SECTION 9.16 RTI AGREEMENT. The Borrower shall not amend,
restate or otherwise modify or waive any provisions of the RTI
Agreement without the prior written consent of the Majority Banks and
the Agent."
"SECTION 9.17 RTI SUBSIDIARIES AND EMPLOYEES. RTI shall have
no Subsidiaries or employees."
SECTION 6. AMENDMENT TO SECTION 13 OF THE CREDIT AGREEMENT. Section
13.1 of the Credit Agreement is hereby amended as follows:
(a) by amending each of Sections 13.1(c), (d), (e), (k), (l), (n), or
(p) to include "or RTI" immediately after each reference to "the Borrower", "the
Borrower or any Subsidiary", or "the Borrower or any of its Subsidiaries";
8
8
(b) by amending each of Sections 13.1(f), (g), (h), and (i) to include
"or RTI" immediately after each reference to "the Borrower or any of its
Subsidiaries or Holdings" or "the Borrower or any Subsidiary of the Borrower or
Holdings";
(c) by amending Sections 13.1(r) and (s) by adding the words "or RTI"
after the words "the Borrower or any of its Subsidiaries" and by replacing the
text "the Borrower or such Subsidiary" with the text "the Borrower, such
Subsidiary or RTI".
SECTION 7. AMENDMENT TO SECTION 15.5.3 OF THE CREDIT AGREEMENT. The
text "the provisions of section 14" in Section 15.5.3 of the Credit Agreement is
hereby replaced with the text "the provisions of section 14 of the Credit
Agreement or section 7 of the Guaranty".
SECTION 8. AMENDMENT TO SECTION 20 OF THE CREDIT AGREEMENT. The word
"and" at the end of clause (b) of the first sentence of Section 20 of the Credit
Agreement is hereby deleted. The period at the end of clause (c) of the first
sentence of Section 20 of the Credit Agreement is hereby replaced with a
semicolon. The following new clause (d) is added to the Credit Agreement:
"(d) if to RTI, at 0000 Xxxxxxx Xxxxxxx, Xxxxx, XX 00000, or such other
address for notice as RTI shall last have furnished in writing to the Person
giving notice."
SECTION 9. AMENDMENTS TO SECTION SECTION 7, 8, 9, 17, 18, 21, 25, AND
26 TO THE CREDIT AGREEMENT FOR THE PURPOSE OF INCLUDING RTI.
It is hereby agreed that the preambles to Sections 7, 8 and 9 of the
Credit Agreement are each amended by adding after the word "Borrower" in each
place where such word appears in such preambles the words "and, where
applicable, RTI".
It is hereby further agreed that (A) when the term "Subsidiary" or
"Subsidiaries" is used to refer to the Subsidiaries of the Borrower in Sections
7.1.1, 7.6, 7.7, 7.8, 7.9, 7.10, 7.12, 7.15, 7.18, 7.19, 7.20, 8.5.1, 8.5.2,
8.5.4, 15.4, 16, 17, 18, 19.2 or 26 of the Credit Agreement, such term in such
Sections of the Credit Agreement shall also refer to and include RTI and (B) the
term "Borrower" in Sections 7.1.2, 7.1.3, 7.2, 7.4.1, 7.13, 7.22, 8.3, 8.4(a),
(b), (c), (f), (g), (j), 8.6, 8.7, 8.8, 8.9, 8.10, 8.11, 8.13.1, 8.13.2(a),
8.14(d), 8.15, 9.5, 9.6, 9.7, 9.9, 9.10, 9.13, 9.14, 21 or 25 of the Credit
Agreement shall refer to each of Republic Engineered Steels, Inc. and RTI such
that each such representation, covenant and term applies with equal force to and
is made by each of Republic Engineered Steels, Inc. and RTI, provided that
(i) any reference to the Borrower or a Subsidiary as a
"corporation," as "being incorporated," as having
stockholders, or as having any other characteristic particular
to corporations, shall, insofar as such reference includes
RTI, be deemed to be a reference to RTI as a "limited
liability company," "being organized," as having "members" or
as having the equivalent characteristic particular to limited
liability companies, as applicable;
(ii) any representation that any action, event or fact does not
have a material adverse effect on the Borrower and its
Subsidiaries, taken as a whole, shall be deemed to be a
representation that such action, event or fact does not have a
material adverse effect on either (i) the Borrower and its
Subsidiaries (not including RTI), taken as a whole or (ii) the
Borrower and its Subsidiaries and RTI, taken as a whole;
(iii) any covenant that is conditioned upon any action, event or
fact having or not having material adverse effect on the
Borrower and its Subsidiaries, taken as a whole, shall be
9
9
deemed to be a covenant that is conditioned upon such action,
event or fact having or not having a material adverse effect
on either (i) the Borrower and its Subsidiaries (not including
RTI), taken as a whole or (ii) the Borrower and its
Subsidiaries and RTI, taken as a whole;
(iv) any reference to the "Balance Sheet Date" shall be, insofar as
such reference relates to RTI, be a reference to the Third
Amendment Effective Date;
(v) Section 7.15 shall not be deemed to prohibit the transactions
entered into in connection with the RTI Agreement;
(vi) notwithstanding the first sentence of section 8.6, RTI may be
a limited liability company; and
(vii) notwithstanding anything to the contrary in section 8.7(a),
all proceeds of business interruption insurance of RTI shall
be paid to the Agent.
SECTION 10. AMENDMENT TO SCHEDULES TO CREDIT AGREEMENT.
(a) SCHEDULE 1 to the Credit Agreement is hereby replaced with SCHEDULE
1 attached hereto. Each Bank's Commitment is hereby and thereby increased PRO
RATA to the amounts set forth in SCHEDULE 1 attached hereto, and the Total
Commitment is hereby and thereby increased from $115,000,000 to $135,000,000.
(b) On December 31, 1999, if the Total Commitment is not less than or
equal to $115,000,000 on such date, the Total Commitment shall be automatically
reduced to $115,000,000. Simultaneously with such reduction of the Total
Commitment, each Bank's Commitment shall be accordingly reduced on a PRO RATA
basis and SCHEDULE 1 to the Credit Agreement shall be replaced with a new
SCHEDULE 1 reflecting such reductions.
(c) SCHEDULES 7.19 and 7.20 to the Credit Agreement are hereby replaced
with SCHEDULES 7.19 and 7.20 attached hereto.
SECTION 11. REPRESENTATIONS, WARRANTIES AND COVENANTS; NO DEFAULT;
AUTHORIZATION. Each of the Borrower and RTI hereby represents, warrants and
covenants to the Agent and the Banks as follows:
(a) Each of the representations and warranties of each of the Borrower
and RTI contained in the Credit Agreement was true as of the date as of which it
was made and is true as and at the date of this Amendment, and no Default or
Event of Default has occurred and is continuing as of the date of this
Amendment;
(b) This Amendment has been duly authorized, executed and delivered by
each of the Borrower and RTI and is in full force and effect; and
(c) Upon the execution and delivery of this Amendment by the respective
parties hereto, this Amendment shall constitute the legal, valid and binding
obligation of each of the Borrower and RTI, enforceable in accordance with its
terms, except that the enforceability thereof may be subject to any applicable
bankruptcy, reorganization, insolvency or other laws affecting creditors' rights
generally.
SECTION 12. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment, including the amendments and limited waivers and consents contained
herein, shall be subject to the satisfaction of the following conditions:
10
10
(a) This Amendment, the Membership Pledge Agreement, the RTI Agreement,
the RTI Guaranty, the Acknowledgment and Consent regarding Membership Pledge
Agreement and the RTI Security Agreement shall have been duly executed and
delivered by the respective parties hereto and thereto and shall be in full
force and effect.
(b) The Banks and the Agent shall have reviewed the final terms of the
RTI Agreement, and the RTI Agreement and all related documentation shall be in
form and substance satisfactory to the Banks and the Agent.
(c) The Agent shall have received from RTI a copy, certified by a duly
authorized officer of RTI to be true and complete on the Third Amendment
Effective Date, of each of (a) its certificate of formation as in effect on such
date of certification, and (b) its limited liability company agreement as in
effect on such date.
(d) The Agent shall have received from RTI a certificate from the
Secretary of State, or other appropriate authority of the jurisdiction of its
organization, evidencing its good standing in such jurisdiction and in each
other jurisdiction in which a failure to so qualify could have a material
adverse effect on the business or financial condition of RTI.
(e) All company and corporate action necessary for the valid execution,
delivery and performance by the Borrower and/or RTI, as applicable, of the
Amendment, the RTI Agreement and the other Loan Documents executed on the Third
Amendment Effective Date to which such Person is a party shall have been duly
and effectively taken, and evidence thereof satisfactory to the Banks shall have
been provided to the Agent.
(f) The Agent shall have received from RTI an incumbency certificate,
dated as of the Third Amendment Effective Date, signed by a duly authorized
officer of RTI, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
RTI, each of the Loan Documents to which it is a party and (b) to give notices
and to take other action on its behalf under the Loan Documents.
(g) The Security Documents shall be effective to create in favor of the
Agent a legal, valid and enforceable first (except for Permitted Liens entitled
to priority under applicable law) security interest in and lien upon the
Collateral (including the Collateral owned by RTI). All filings, recordings,
deliveries of instruments and other actions necessary or desirable in the
opinion of the Agent to protect and preserve such security interests shall have
been duly effected. The Agent shall have received evidence thereof in form and
substance satisfactory to the Agent.
(h) The Agent shall have received from RTI a completed and fully
executed Perfection Certificate and the results of UCC searches with respect to
RTI, indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Agent.
(i) The Agent shall have received a certificate of insurance from an
independent insurance broker dated as of the Third Amendment Effective Date,
identifying insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the insurance obtained with respect to RTI in
accordance with the Security Documents.
(j) The Agent shall have received from the Borrower a Borrowing Base
Report dated as of the Third Amendment Effective Date or such other date prior
thereto reasonably near to the Third Amendment Effective Date satisfactory to
the Banks and the Agent.
11
11
(k) Each of the Banks and the Agent shall have received a favorable
legal opinions addressed to the Banks and the Agent, dated as of the Third
Amendment Effective Date.
(l) There shall be no Default or Event of Default after giving effect
to the RTI Agreement, this Amendment or any of the other Loan Documents executed
and delivered simultaneously herewith.
(m) The Borrower shall have paid to the Agent, for the PRO RATA benefit
of the Banks, the "Amendment Fee" referred to in the Fee Letter, of even date
herewith, among the Borrower, the Banks and the Agent.
(n) The Agent shall have received a consolidated balance sheet of
BarTech and each of BarTech's Subsidiaries as at December 31, 1998, and a
consolidated statement of income of BarTech and each of BarTech's Subsidiaries
for the fiscal year then ended, certified by the independent certified public
accountants of BarTech. Such balance sheet and statement of income have been
prepared in accordance with generally accepted accounting principles and fairly
present the financial condition of BarTech and each of BarTech's Subsidiaries as
at the close of business on the date thereof and the results of operations for
the fiscal year then ended.
(o) The Agent shall have received evidence of the consent by BarTech,
B&L and the BarTech Lenders of the assignment of the Assigned RTI Account
Receivables to the Borrower and the security interest of the Agent in favor of
the Banks and the Agent therein.
(p) The Agent and the Majority Banks shall have received an executed
Agency Agreements, substantially in the form of EXHIBIT I attached hereto, with
each of the Blocked Account Banks that maintain Swept Accounts, and the Agent
and the Majority Banks shall otherwise be satisfied with the cash management
system of RTI and the Borrower.
SECTION 13. RATIFICATION, ETC. Except as expressly amended hereby, the
Credit Agreement, the other Loan Documents and all documents, instruments and
agreements related thereto are hereby ratified and confirmed in all respects.
All references in the Credit Agreement, any other Loan Document or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
SECTION 14. NO IMPLIED WAIVER. Except as expressly provided herein,
nothing contained herein shall constitute a waiver of, impair or otherwise
affect any Obligations, any other obligations of the Borrower or any right of
the Agent or any Bank consequent thereon.
SECTION 15. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
SECTION 16. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS OF LAW).
SECTION 17. EXPENSES. The Borrower hereby agrees to pay to the Agent,
on demand, all reasonable out of pocket expenses incurred or sustained by the
Agent in connection with this Amendment (including reasonable legal fees and
disbursements).
12
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as a sealed instrument as of the date first above written.
REPUBLIC ENGINEERED
STEELS, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------
Name: Xxxx X. Xxxxxx
Title: Vice President of Finance and Treasurer
REPUBLIC TECHNOLOGIES
INTERNATIONAL MARKETING, LCC
By: /s/ Xxxxxx X. Xxxxxxx
REPUBLIC ENGINEERED
STEELS, INC., as Member
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President and Chief Operating Officer
and
BAR TECHNOLOGIES INC., as Member
By: /s/ Xxxxxx X. Xxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
BANKBOSTON, N.A.,
individually and as Agent
By: /s/ M. Isbaih
--------------
Name: Xxxxxx Isbaih
Title:VP
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION (successor to
BANKAMERICA BUSINESS CREDIT, INC.)
By:____________________________
Name:
Title:
13
2
CONGRESS FINANCIAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Sr. Vice Pres.
