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EXECUTION COPY
Exhibit 10.53
AMENDMENT, CONSENT AND WAIVER dated as of
May 5, 1999 (this "Amendment"), to the Credit
Agreement dated as of April 2, 1996, amended and
restated as of April 25, 1996, and as further amended
and restated as of September 5, 1997 (the "Credit
Agreement"), among BAR TECHNOLOGIES INC., a Delaware
corporation ("BarTech"), BLISS & ▇▇▇▇▇▇▇▇ STEEL
COMPANY, an Illinois corporation ("BLSC" and,
together with BarTech, the "Borrowers"), the lenders
party thereto (the "Lenders"), THE CHASE MANHATTAN
BANK (formerly known as Chemical Bank), a New York
banking corporation, as administrative agent (in such
capacity, the "Administrative Agent") and collateral
agent (in such capacity, the "Collateral Agent") for
the Lenders, and CHASE MANHATTAN BANK DELAWARE
(formerly known as Chemical Bank Delaware), a
Delaware banking corporation, as fronting bank (in
such capacity, the "Fronting Bank").
A. Pursuant to the Credit Agreement, the Lenders and the
Fronting Bank have extended credit to the Borrowers, and have agreed to extend
credit to the Borrowers, in each case pursuant to the terms and subject to the
conditions set forth therein.
B. Pursuant to a Limited Liability Company Agreement dated as
of March 1, 1999 (the "RTI Agreement"), BarTech and Republic Engineered Steels,
Inc., a Delaware corporation ("RES"), have formed Republic Technologies
International Marketing, LLC, a Delaware limited liability company ("RTI"), for
the purpose of engaging in joint marketing, advertising, promotion and sales
activities. BarTech holds a 50.0% voting and membership interest and an initial
33-1/3% economic allocation in RTI and RES holds a 50% voting and membership
interest and an initial 66-2/3% economic allocation in RTI.
C. Pursuant to the RTI Agreement, BarTech (on behalf of itself
and BLSC) and RES agreed (among other things), except as otherwise provided
therein, (a) to market, advertise and promote their respective steel products to
their existing and potential customers exclusively through RTI and (b) to sell
their respective steel products exclusively through RTI. As more fully described
in the RTI Agreement, (a) all customer orders (other than customer orders for
products of BarTech's Canadian Drawn Steel Company Inc. subsidiary ("Canadian
Orders")) for the Borrowers' and RES's products ("Company Orders") will be
placed with RTI, (b) pursuant to the allocation procedures set forth in the RTI
Agreement, RTI will determine which of the Borrowers or RES will produce the
products to fill each Company Order, (c) the applicable Borrower or RES will
ship the inventory so ordered directly to the customer that placed the
applicable Company Order with RTI, (d) within one Business Day (such term and
all other terms used but not defined herein having the meanings assigned to such
terms in the Credit Agreement as amended hereby) after the date of shipment by
the applicable Borrower of inventory ordered pursuant to a Company Order (and
the related release of the security interest held for the benefit of the Lenders
in such inventory shipped by such Borrower), RES will pay to such Borrower in
full in cash not less than 99.0% of the purchase price for such products, (e)
simultaneously with the release of the security interest held for the benefit of
the Lenders or the RES Lenders (as defined herein) in any
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inventory shipped pursuant to a Company Order, a security interest will
simultaneously and automatically attach in any receivables payable by any
customer (other than RES or RTI) to the Borrowers or by any customer to RES or
RTI that are created pursuant to such Company Order (all such receivables,
"Receivables") in favor of the RES Lenders (but not the Lenders) and (f)
simultaneously with the creation of any Receivables (whether such Receivables
arose in connection with the shipment of inventory by RES or by the Borrowers),
RTI will automatically assign and transfer to RES all its rights in respect of
such Receivables and the Company Order pursuant to which such Receivables arose.
Payments by customers for inventory shipped pursuant to Company Orders will be
made directly to RES (or to RTI as collection agent for RES and then forwarded
to RES), but not to the Borrowers. All rights of the Borrowers in respect of
Canadian Orders will be retained by the Borrowers, and all payments in respect
of inventory produced and shipped by the Borrowers to fill Canadian Orders will
be made to the Borrowers. In order to support the payment obligations of RES to
the Borrowers described herein, (a) the aggregate principal amount of the RES
Credit Agreement (as defined herein) shall be increased (through December 31,
1999) from $115,000,000 to $135,000,000 and (b) the RES Letter of Credit shall
be issued under the RES Credit Agreement. The foregoing arrangements and the
other arrangements set forth in the RTI Agreement are collectively referred to
herein as the "RTI Joint Venture Arrangements".
D. The Borrowers have requested that the Lenders (a) amend
certain provisions of the Credit Agreement in order to permit the implementation
of certain of the RTI Joint Venture Arrangements, (b) consent to the amendment
of the Facility Pledge Agreement in order to require the pledge by BarTech to
the Collateral Agent, for the benefit of the Secured Parties, of its membership
interest in RTI and (c) grant certain limited waivers of compliance by the
Borrowers with certain provisions of the Credit Agreement in connection with the
implementation of certain of the RTI Joint Venture Arrangements.
E. The Lenders are willing to agree to such amendments and
grant such consent and waivers, in each case pursuant to the terms and subject
to the conditions set forth herein.
Accordingly, in consideration of the mutual agreements
contained in this Amendment and other good and valuable consideration, the
sufficiency and receipt of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Amendments to Section 1.01. (a) The term
"Applicable Percentage" in Section 1.01 of the Credit Agreement is hereby
deleted.
(b) The definition of the term "Borrowing Base" in Section
1.01 of the Credit Agreement is hereby amended to read in its entirety as
follows:
"'Borrowing Base' shall mean, at any time, an amount
equal to (a) 85% of Eligible Accounts Receivable plus (b) 65%
of Eligible Inventory (excluding raw materials) plus (c) 25%
of Eligible Inventory consisting of raw materials. The
Borrowing Base shall be computed weekly in accordance with
Section 5.04(e). The Borrowing Base at any time in effect
shall be determined by reference to the Borrowing Base
Certificate most recently delivered hereunder."
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(c) The definition of the term "Interim Standby Base Amount"
in Section 1.01 of the Credit Agreement is hereby amended by redesignating
clause (iii) as clause (iv) and by adding a new clause (iii) to read in its
entirety as follows:
"(iii) any accounts receivable owed by RES or RTI
pursuant to the RTI Agreement, and".
(d) The definition of the term "Interim Standby Borrowing
Amount" in Section 1.01 of the Credit Agreement is hereby amended by replacing
the word "monthly" in the second sentence thereof with the word "weekly".
(e) The definition of the term "Total A/R and Inventory" in
Section 1.01 of the Credit Agreement is hereby amended by redesignating clause
(iii) as clause (iv) and by adding a new clause (iii) to read in its entirety as
follows:
"(iii) any accounts receivable owed by RES or RTI
pursuant to the RTI Agreement, and".
(f) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "Concentration Account" in the appropriate alphabetical
order, to read in its entirety as follows:
"'Concentration Account' shall have the meaning given
to such term in the Master Security Agreement."
(g) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "Eligible Accounts Receivable" in the appropriate
alphabetical order, to read in its entirety as follows:
"'Eligible Accounts Receivable' shall mean, at any
time, GAAP Accounts Receivable, excluding (i) any accounts
receivable that is not subject to a perfected first priority
security interest in favor of the Collateral Agent for the
benefit of the Secured Parties (as defined in the Security
Agreements) or that is subject to any other Lien, except Liens
expressly permitted by Section 6.02 (provided that Eligible
Accounts Receivable shall be reduced to the extent of the
obligations secured by such Liens), (ii) any accounts
receivable owed by RES or RTI pursuant to the RTI Agreement,
and (iii) any accounts receivable owed by any officer,
employee or Affiliate of BarTech or any Subsidiary."
(h) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "Eligible Inventory" in the appropriate alphabetical order,
to read in its entirety as follows:
"'Eligible Inventory' shall mean, at any time, GAAP
Inventory, excluding (i) any inventory that is not subject to
a perfected first priority security interest in favor of the
Collateral Agent for the benefit of the Secured Parties (as
defined in the Security Agreements) or that is subject to any
other Lien, except Liens expressly permitted by Section 6.02
(provided that Eligible Inventory shall be reduced to the
extent of the obligations secured by such Liens) and (ii) any
inventory that is
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(A) located at a storage or manufacturing facility leased by a
Borrower or a Guarantor or in a contract warehouse and (B) not
covered by an agreement, in form and substance satisfactory to
the Collateral Agent, waiving the lessor's or contract
warehouseman's Lien, if any, and providing the Collateral
Agent with access to such inventory, provided that such
inventory shall be excluded only to the extent that such
inventory in the aggregate exceeds 2% of Eligible Inventory,
and provided further that the applicable Borrower or Guarantor
shall have used its reasonable efforts to obtain such waiver
and consent from each such landlord or contract warehouseman."
(i) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "RES" in the appropriate alphabetical order, to read in its
entirety as follows:
"'RES' shall mean Republic Engineered Steels, Inc., a
Delaware corporation."
(j) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "RES Credit Agreement" in the appropriate alphabetical
order, to read in its entirety as follows:
"'RES Credit Agreement' shall mean the Second Amended
and Restated Revolving Credit Agreement dated as of April 25,
1997, as amended, among RES, BankBoston, N.A., the other
lending institutions listed on Schedule I thereto and Congress
Financial Corporation (New England) and BankBoston, N.A., as
agent for itself and such other lending institutions."
(k) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "RES Letter of Credit" in the appropriate alphabetical
order, to read in its entirety as follows:
"'RES Letter of Credit' shall mean one or more
irrevocable standby letters of credit issued by BankBoston,
N.A. under the RES Credit Agreement, for the benefit of the
Collateral Agent on behalf of the Secured Parties (as defined
in the Security Agreements), under which drawings of all
amounts due and payable to the Borrowers by RES may be made
upon presentation to BankBoston, N.A. of a certificate of the
Collateral Agent to the effect that any amount due and payable
by RES to either Borrower pursuant to the RTI Agreement has
not been paid within five Business Days after such amount
became due and payable."
(l) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "RES Letter of Credit Base Amount" in the appropriate
alphabetical order, to read in its entirety as follows:
"'RES Letter of Credit Base Amount' shall mean
$1,500,000; provided, however, that if, during any period of
fifteen consecutive days, there shall be three or more days on
which the Borrowers make shipments of inventory pursuant to
the RTI Agreement that have an aggregate
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purchase price invoiced or to be invoiced by RTI or RES to
customers that exceeds the RES Letter of Credit Base Amount
then in effect, then on the date that is three days after the
end of such fifteen consecutive day period the RES Letter of
Credit Base Amount shall be increased to an amount equal to
the highest aggregate purchase price invoiced by RTI or RES to
customers for all shipments of inventory made by the Borrowers
on any day in such fifteen consecutive day period."
(m) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "RTI" in the appropriate alphabetical order, to read in its
entirety as follows:
"'RTI' shall mean Republic Technologies International
Marketing, LLC, a Delaware limited liability company in which
BarTech holds a 50.0% voting and membership interest and, as
of March 1, 1999, holds a 33-1/3% economic allocation, and RES
holds a 50.0% voting and membership interest and, as of March
1, 1999, holds a 66-2/3% economic allocation."
(n) Section 1.01 of the Credit Agreement is hereby amended to
add the defined term "RTI Agreement" in the appropriate alphabetical order, to
read in its entirety as follows:
"'RTI Agreement' shall mean the Limited Liability
Company Agreement of RTI dated as of March 1, 1999, between
BarTech and RES."
SECTION 2. Amendments to Section 2.06. (a) Clause (i) of
Section 2.06(a) of the Credit Agreement is hereby amended and restated to read
in its entirety as follows:
"(i) with respect to ABR Revolving Loans, the
Alternate Base Rate for the Interest Period in effect for such
Borrowing plus 2.50% and".
(b) Clause (i) of Section 2.06(b) of the Credit Agreement is
hereby amended and restated to read in its entirety as follows:
"(i) with respect to Eurodollar Revolving Loans, the
Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus 3.50% and".
SECTION 3. Amendments to Section 2.09. Section 2.09 of the
Credit Agreement is hereby amended by redesignating paragraphs (b), (c), (d) and
(e) as
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paragraphs (c), (d), (e) and (f), respectively, and by adding a new paragraph
(b) to read in its entirety as follows:
"(b) The Total Revolving Credit Commitment and the Total
Interim Standby Obligations shall be automatically and permanently
reduced at 5:00 p.m., New York City time, on the following dates to the
following amounts:
Total Revolving Credit Total Interim
---------------------- -------------
Commitment After Standby Obligations
---------------- -------------------
Date of Reduction Reduction After Reduction
----------------- --------- ---------------
April 30, 1999 $87,500,000 $12,500,000
May 31, 1999 83,000,000 8,000,000
June 30, 1999 77,000,000 2,000,000
July 31, 1999 71,500,000 0
SECTION 4. Amendment to Article III. Article III of the Credit
Agreement is hereby amended by adding a new Section 3.24 to read in its entirety
as follows:
"SECTION 3.24. Payments under RTI Agreement. The
Borrowers have received all payments owed to them by RES and
RTI pursuant to the RTI Agreement as and when required by
Section 6.05(b)."
SECTION 5. Amendments to Section 5.04. (a) Paragraph (e) of
Section 5.04 of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
"(e) as soon as practicable and in any event within
two Business Days after the end of each week, (i)(A) a
Borrowing Base Certificate showing the Borrowing Base and (B)
an Interim Standby Borrowing Amount Certificate showing the
Interim Standby Borrowing Amount, in each case as of the close
of business on the last day of such week, each such
Certificate to be certified as complete and correct on behalf
of BarTech by a Financial Officer of BarTech, and (ii) such
other supporting documentation and additional reports with
respect to the Borrowing Base and the Interim Standby
Borrowing Amount as the Administrative Agent or any Lender
shall reasonably request;".
(b) Paragraph (l) of Section 5.04 of the Credit Agreement is
hereby amended by deleting the word "and" at the end thereof.
(c) Section 5.04 of the Credit Agreement is hereby further
amended by redesignating paragraph (m) as paragraph (o) and by adding a new
paragraph (m) to read in its entirety as follows:
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"(m) promptly, (i) upon the failure by RES or RTI to
make any payments to the Borrowers required by Section
6.05(b), a notice of such failure and (ii) upon becoming aware
of any information as to any actual, threatened, or potential
suspension, termination, unavailability of, or other adverse
development with respect to, the RES Letter of Credit or the
existence of any default or event of default under the RES
Credit Agreement, a notice setting forth such information in
reasonable detail;".
(d) Section 5.04 of the Credit Agreement is hereby further
amended by adding a new paragraph (n) to read in its entirety as follows:
"(n) (i) within one Business Day after the end of
each week, if the aggregate purchase price invoiced by RTI to
customers for all shipments of inventory made by the Borrowers
pursuant to the RTI Agreement on any day of such week exceeded
one-third of the RES Letter of Credit Base Amount then in
effect, notice of such aggregate purchase price for each such
day and (ii) as soon as practicable, and in any event within
10 days, after the end of each month, a written report, in
form and substance reasonably satisfactory to the
Administrative Agent, detailing for such month, all shipments
of inventory made by the Borrowers, all payments received by
the Borrowers from RES or RTI, any requests for reimbursement
made by RES or RTI to the Borrowers and all remittances made
by the Borrowers to RES or RTI, in each case pursuant to the
RTI Agreement, and such other information and supporting
documentation relating thereto as the Administrative Agent or
any Lender shall reasonably request; and".
SECTION 6. Addition of Section 5.14. Article V of the Credit
Agreement is hereby further amended by adding a new Section 5.14 to read in its
entirety as follows:
"SECTION 5.14. Suspension or Termination of RTI
Agreement. At any time upon the request of the Administrative
Agent or the Required Lenders, if (a) RES or RTI shall fail to
make any payments to the Borrowers as and when required by
Section 6.05(b), (b) the RES Letter of Credit shall expire or
be suspended, terminated or unavailable for any reason
whatsoever or less than the RES Letter of Credit Base Amount
shall be available for disbursement thereunder (after giving
effect to all disbursements made under the RES Letter of
Credit at or prior to such time), or (c) the aggregate amount
of reimbursements requested of the Borrowers by RES or RTI
pursuant to the RTI Agreement on account of the failure of
customers to make full payments for shipments of inventory by
the Borrowers is, in the opinion of the Administrative Agent
or the Required Lenders, adverse to the Lenders in any
material respect, the Borrowers shall immediately (i) suspend
or terminate, as directed by the Administrative Agent or the
Required Lenders, the RTI Agreement in accordance with Section
3.6 of the RTI Agreement, (ii) cease to make any shipments of
inventory pursuant to customer orders under the RTI Agreement,
(iii) cease to transfer or assign to RES or RTI any accounts
receivable or other rights pursuant to the RTI Agreement and
(iv) offset all amounts then due and payable by RES or RTI to
the Borrowers under
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the RTI Agreement against any amounts then due and payable by
the Borrowers to RES or RTI under the RTI Agreement. If the
RTI Agreement is suspended (and not terminated) by the
Borrowers at the direction of the Administrative Agent or the
Required Lenders pursuant to clause (i) of the preceding
sentence, the Borrowers may, subject to any further request by
the Administrative Agent or the Required Lenders pursuant to
the preceding sentence, resume the activities prohibited by
clauses (ii), (iii) and (iv) of the preceding sentence upon
receipt by them of written notice from the Administrative
Agent or the Required Lenders, as applicable, that such
suspension may be discontinued."
SECTION 7. Amendments to Section 6.01. (a) Paragraph (o) of
Section 6.01 of the Credit Agreement is hereby amended by deleting the word
"and" at the end thereof.
(b) Paragraph (p) of Section 6.01 of the Credit Agreement is
hereby amended by replacing the period at the end thereof with ";and".
(c) Section 6.01 of the Credit Agreement is hereby further
amended by adding a new paragraph (q) to read in its entirety as follows:
"(q) Indebtedness, if any, of BarTech or BLSC
represented by obligations to repurchase accounts receivable
from RES under the RTI Agreement."
SECTION 8. Amendments to Section 6.02. (a) Paragraph (r) of
Section 6.02 of the Credit Agreement is hereby amended by deleting the word
"and" at the end thereof.
(b) Section 6.02 of the Credit Agreement is hereby further
amended by redesignating paragraph (s) as paragraph (t) and by adding a new
paragraph (s) to read in its entirety as follows:
"(s) as permitted by Section 6.05(b) and other Liens,
if any, arising under the RTI Agreement; and".
SECTION 9. Amendment to Section 6.04. Paragraph (h) of Section
6.04 of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
"(h) investments, other than investments listed in
paragraph (a) through (g) of this Section 6.04, (i) existing
on the Closing Date and set forth on Schedule 6.04 and (ii)
BarTech's holding of a 50.0% voting and membership interest
and a 33-1/3% economic allocation in RTI and the other
transactions specifically provided for in the RTI Agreement;".
SECTION 10. Amendments to Section 6.05. (a) Paragraph (a) of
Section 6.05 of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
"(a) the purchase and sale of inventory in the
ordinary course of business by BarTech or any Subsidiary
(other than the sale of inventory to
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RES, RTI or any of their subsidiaries pursuant to the RTI
Agreement or otherwise) or the acquisition of any asset in the
ordinary course of business, in each case subject to Sections
6.04 and 6.11."
(b) Section 6.05 of the Credit Agreement is hereby further
amended by redesignating paragraphs (b), (c), (d), (e), (f), (g) and (h) as
paragraphs (c), (d), (e), (f), (g), (h) and (i), respectively, and by adding a
new paragraph (b) to read in its entirety as follows:
"(b) (i) the sale of inventory pursuant to the RTI
Agreement and (ii) the assignment and transfer of accounts
receivable payable to the Borrowers by customers (other than
RES or RTI) pursuant to the RTI Agreement, provided that (w)
the Borrowers shall be paid in full in cash, by means of wire
transfer to a Concentration Account, not less than 99.0% of
the purchase price invoiced or to be invoiced by RTI to
customers for such inventory within one Business Day after the
date of shipment of such inventory, (x) the Borrowers shall
have received full payment of all amounts then due and payable
pursuant to this Section 6.05(b) in respect of all prior sales
of inventory pursuant to this Section 6.05(b) and (y) the RES
Letter of Credit shall be in full force and effect and not
less than the RES Letter of Credit Base Amount shall be
available for disbursement thereunder".
(c) The first parenthetical of the proviso immediately
following paragraph (i) of Section 6.05 of the Credit Agreement which reads,
"(other than pursuant to clauses (a) through (c) above)", is hereby amended to
read "(other than pursuant to clauses (a) through (d) above)".
SECTION 11. Amendment to Section 6.07. Paragraph (b) of
Section 6.07 of the Credit Agreement is hereby amended by redesignating clauses
(vi), (vii) and (viii) as clauses (vii), (viii) and (ix), respectively, and by
adding a new clause (vi) to read in its entirety as follows:
"(vi) the transactions permitted under Section
6.05(b) and other transactions specifically provided for in
the RTI Agreement, provided that the Borrowers shall not
reimburse any amounts under Section 3.2(e) of the RTI
Agreement unless the related receivable is or will be assigned
and transferred to the applicable Borrower free of any Lien
other than any Lien created under the Master Security
Agreement".
SECTION 12. Amendment to Section 6.09. Paragraph (c) of
Section 6.09 of the Credit Agreement is hereby amended and restated to read in
its entirety as follows:
"(c) Permit (i) any waiver, supplement, modification,
amendment, termination or release that is in any manner
adverse in any material respect to the Lenders of (A) the
certificate of incorporation or bylaws of BarTech or any
Subsidiary, (B) the Subscription Agreement, (C) the
Stockholders' Agreement, (D) the Merger Agreement, (E) the
1997 Subscription Agreement or (F) any instrument or agreement
pursuant to which any Indebtedness of BarTech or any
Subsidiary is outstanding to any person in an aggregate
principal amount in excess of $250,000, or
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(ii) any waiver, supplement, modification, amendment,
termination or release whatsoever of the RTI Agreement, the
Allocation Procedures (as defined in the RTI Agreement) or the
RES Letter of Credit (except for amendments providing for an
increase in the principal amount or an extension of the term
thereof)."
SECTION 13. Amendments to Article VII. (a) Paragraph (k) of
Article VII of the Credit Agreement is hereby amended by deleting the word "or"
at the end thereof.
(b) Paragraph (l) of Article VII of the Credit Agreement is
hereby amended by adding the word "or" at the end thereof.
(c) Article VII of the Credit Agreement is hereby further
amended by adding a new paragraph (m) as follows:
"(m) (i) default shall be made in any payment under
the RES Letter of Credit, (ii) the RES Letter of Credit shall
be suspended, terminated or unavailable for any reason
whatsoever or (iii) there shall be less than the RES Letter of
Credit Base Amount available for disbursement under the RES
Letter of Credit at any time (after giving effect to all
disbursements made under the RES Letter of Credit at or prior
to such time);".
SECTION 14. Amendments to Section 9.09. Paragraph (b) of
Section 9.09 of the Credit Agreement is hereby amended by deleting the words
"Applicable Percentage" and by adding the words "Eligible Accounts Receivable"
and "Eligible Inventory" in the appropriate alphabetical order, in each case in
clause (iv) thereof.
SECTION 15. Amendments to Exhibits L. Exhibit L to the Credit
Agreement is hereby amended and restated in its entirety to read as set forth in
Annex III.
SECTION 16. Consent. The Lenders hereby consent to the
amendment of the Facility Pledge Agreement in order to require the pledge by
BarTech to the Collateral Agent, for the benefit of the Secured Parties, of its
membership interest in RTI, pursuant to an amendment in a form reasonably
satisfactory to the Administrative Agent.
SECTION 17. Waiver. The Lenders hereby waive any failure of
the Borrowers to comply with Section 6.02 or Section 6.05 of the Credit
Agreement, in each case to the extent and only to the extent arising from sales
of inventory or assignments and transfers of accounts receivable to RES and RTI
by the Borrowers pursuant to the RTI Agreement that occurred prior to the date
hereof.
SECTION 18. Representations and Warranties. Each Borrower
represents and warrants to the Administrative Agent, to the Fronting Bank and to
each of the Lenders that:
(a) This Amendment has been duly authorized, executed and
delivered by such Borrower and constitutes its legal, valid and binding
obligation, enforceable
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in accordance with its terms except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
(b) After giving effect to this Amendment, the representations
and warranties set forth in Article III of the Credit Agreement are
true and correct in all material respects with the same effect as if
made on the date hereof, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) The execution, delivery and performance by such Borrower
of this Amendment (i) have been duly authorized by all requisite
corporate and, if required, stockholder action and (ii) will not (A)
violate (x) any provision of law, statute, rule or regulation, or of
the certificate or articles of incorporation or other constitutive
documents or by-laws of such Borrower or, in the case of BarTech, any
Subsidiary, (y) any order of any Governmental Authority or (z) any
provision of any indenture, agreement or other instrument to which such
Borrower and, in the case of BarTech, any Subsidiary is a party or by
which any of them or any of their property is or may be bound or (B) be
in conflict with, result in a breach of or constitute (alone or with
notice or lapse of time or both) a default under, or give rise to any
right to accelerate or to require the prepayment, repurchase or
redemption of any obligation under any such indenture, agreement or
other instrument, where any such conflict, violation, breach or default
referred to in clause (ii) of this Section 18(c), individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(d) Before and after giving effect to this Amendment, no Event
of Default or Default has occurred and is continuing.
SECTION 19. Conditions to Effectiveness. This Amendment shall
become effective as of the date first above written when:
(a) The Administrative Agent shall have received counterparts
of this Amendment that, when taken together, bear the signatures of the
Borrowers and all the Lenders.
(b) The Administrative Agent shall have received, on behalf of
itself, the Lenders and the Fronting Bank, a favorable written opinion
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ and McDonald, Hopkins, ▇▇▇▇▇ & ▇▇▇▇▇,
counsel for the Borrowers, substantially to the effect set forth in
Annex I and Annex II hereto, respectively, (i) dated the date hereof,
(ii) addressed to the Fronting Bank, the Administrative Agent and the
Lenders and (iii) covering such other matters relating to the Loan
Documents and the RTI Joint Venture Arrangements as the Administrative
Agent shall reasonably request. Each of the Borrowers hereby instructs
its counsel to deliver such opinions.
(c) All legal matters incident to this Amendment, the
borrowings and extensions of credit hereunder, the other Loan Documents
and the RTI Joint Venture Arrangements shall be reasonably satisfactory
to the Lenders, the Fronting Bank and Cravath, Swaine & ▇▇▇▇▇, counsel
for the Administrative Agent and the Collateral Agent.
12
12
(d) The Collateral Agent shall have received each document
(including each Uniform Commercial Code financing statement) required
by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Collateral
Agent for the benefit of the Secured Parties (as defined in the
Security Agreements) a valid, legal and perfected first-priority
security interest in and lien on any accounts receivable that may be
assigned or transferred to the Borrowers by RES pursuant to Section
3.2(e) of the RTI Agreement.
(e) The Administrative Agent shall have received (i) a copy of
the certificate of formation, including all amendments thereto, of RTI,
certified as of a recent date by the Secretary of State of the State of
Delaware, and a certificate as to the good standing of RTI as of a
recent date from such Secretary of State; (ii) a certificate of the
Secretary or Assistant Secretary of RTI dated the date hereof and
certifying (A) that attached thereto is a true and complete copy of the
RTI Agreement as in effect on the date hereof and (B) that the
certificate of formation of RTI has not been amended since the date of
the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above; (iii) a certificate of another
officer of RTI as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other similar documents as the Lenders or
Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative Agent, may
reasonably request.
(f) The Administrative Agent shall have received (i) a copy of
the certificate or articles of incorporation, including all amendments
thereto, of each Borrower, certified as of a recent date by the
Secretary of State of the state of its organization, and a certificate
as to the good standing of each Borrower as of a recent date from such
Secretary of State; (ii) a certificate of the Secretary or Assistant
Secretary of each Borrower dated the date hereof and certifying (A)
that attached thereto is a true and complete copy of the by-laws of
such Borrower as in effect on the date hereof and at all times since a
date prior to the date of the resolutions described in clause (B)
below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Borrower
authorizing the execution, delivery and performance of this Amendment
and the RTI Agreement, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C)
that the certificate or articles of incorporation of such Borrower have
not been amended since the date of the last amendment thereto shown on
the certificate of good standing furnished pursuant to clause (i)
above, and (D) as to the incumbency and specimen signature of each
officer executing this Amendment or any other document delivered in
connection herewith on behalf of such Borrower; (iii) a certificate of
another officer as to the incumbency and specimen signature of the
Secretary or Assistant Secretary executing the certificate pursuant to
(ii) above; and (iv) such other similar documents as the Lenders or
Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative Agent, may
reasonably request.
(g) The Administrative Agent shall have received a certificate
of each Borrower, dated the date hereof and signed by a Financial
Officer of and on behalf of each Borrower, confirming the accuracy of
the representations and warranties set forth in Section 18 of this
Amendment.
13
13
(h) The Administrative Agent shall have received (i) (A) a
Borrowing Base Certificate showing the Borrowing Base and (B) an
Interim Standby Borrowing Amount Certificate showing the Interim
Standby Borrowing Amount, in each case as of the close of business on
April 30, 1999, such Certificate to be certified as complete and
correct on behalf of BarTech by a Financial Officer of BarTech, and
(ii) such other supporting documentation and additional reports with
respect to the Borrowing Base and the Interim Standby Borrowing Amount
as the Administrative Agent shall reasonably request.
(i) The amendments (the "Other Credit Agreement Amendments")
to the (i) Second Amended and Restated Revolving Credit Agreement dated
as of April 25, 1997 (the "RES Credit Agreement"), among RES,
BankBoston, N.A. ("Bank Boston"), the other lending institutions listed
therein and Congress Financial Corporation (New England)(collectively,
the "RES Lenders") and BankBoston, as agent for itself and such other
lending institutions, and (ii) the Credit Agreement dated as of
September 8, 1998 (the "RES Holding Credit Agreement"), among RES
Holding Corporation, a Delaware corporation, the financial institutions
listed therein (the "RES Holding Lenders"), The Chase Manhattan Bank
("Chase"), as administrative agent and collateral agent for the RES
Holding Lenders, and DLJ Capital Funding, Inc., as documentation agent
for the RES Holding Lenders, required in connection with the
implementation of the RTI Joint Venture Arrangements shall have been
executed and delivered in form and substance reasonably satisfactory to
the Administrative Agent and copies thereof delivered to the
Administrative Agent along with such other documents, opinions or
certificates relating thereto as the Administrative Agent may
reasonably request.
(j) The Administrative Agent shall be satisfied that all
conditions to the effectiveness of the Other Credit Agreement
Amendments shall have been satisfied and there shall be no default or
event of default under the RES Credit Agreement or the RES Holding
Credit Agreement.
(k) The RES Letter of Credit shall have been issued, shall be
in form and substance reasonably satisfactory to the Administrative
Agent and Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative
Agent, not less than the RES Letter of Credit Base Amount shall be
available for disbursement thereunder, and the Collateral Agent shall
have a perfected first priority security interest therein and the right
to make drawings thereunder.
(l) The First Amendment, dated as of May 5, 1999, to the
Facility Pledge Agreement shall have been duly executed by the parties
thereto and delivered to the Collateral Agent and shall be in full
force and effect.
(m) The Administrative Agent shall have been reimbursed or
paid by BarTech for all out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of
Cravath, Swaine & ▇▇▇▇▇, counsel for the Administrative Agent.
SECTION 20. Credit Agreement. Except as specifically amended
hereby, the Credit Agreement shall continue in full force and effect in
accordance with the
14
14
provisions thereof as in existence on the date hereof. After the date hereof,
any reference to the Credit Agreement shall mean the Credit Agreement as amended
hereby.
SECTION 21. Loan Document. This Amendment shall be a Loan
Document for all purposes.
SECTION 22. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 23. Counterparts. This Amendment may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract. Delivery of an executed counterpart of a signature
page of this Amendment by telecopy shall be effective as delivery of a manually
executed counterpart of this Amendment.
15
15
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers, all as of the
date and year first above written.
BAR TECHNOLOGIES INC.,
by /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V.P. of Finance and Treasurer
BLISS & ▇▇▇▇▇▇▇▇ STEEL
COMPANY,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
THE CHASE MANHATTAN BANK, as
Administrative Agent and Collateral Agent,
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CHASE MANHATTAN BANK
DELAWARE, as Fronting Bank,
by /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
16
SIGNATURE PAGE TO
AMENDMENT DATED AS OF
May 5, 1999
To Approve the Amendment:
Name of Institution THE CHASE MANHATTAN BANK
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
17
SIGNATURE PAGE TO
AMENDMENT DATED AS OF
May 5, 1999
To Approve the Amendment:
Name of Institution: MITSUI LEASING CAPITAL CORPORATION
by
/s/ R. ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name: R. ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
18
SIGNATURE PAGE TO
AMENDMENT DATED AS OF
May 5, 1999
To Approve the Amendment:
Name of Institution: BANKBOSTON, N.A.
by
/s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
19
SIGNATURE PAGE TO
AMENDMENT DATED AS OF
May 5, 1999
To Approve the Amendment:
Name of Institution: FLEET BUSINESS CREDIT CORPORATION
(FORMERLY KNOWN AS SANWA
BUSINESS CREDIT CORPORATION)
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
20
SIGNATURE PAGE TO
AMENDMENT DATED AS OF
May 5, 1999
To Approve the Amendment:
Name of Institution: KZH APPALOOSA LLC
by: The Chase Manhattan Bank
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
21
SIGNATURE PAGE TO
AMENDMENT DATED AS OF
May 5, 1999
To Approve the Amendment:
Name of Institution: SOCIETE GENERALE
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Managing Director
22
EXCUTION COPY
FIRST AMENDMENT, dated as of May 5, 1999
(this "Amendment"), to the Facility Pledge Agreement
dated as of April 2, 1996, and amended and restated
as of September 5, 1997, among BLACKSTONE CAPITAL
PARTNERS II MERCHANT BANKING FUND L.P., a Delaware
limited partnership, BLACKSTONE OFFSHORE CAPITAL
PARTNERS II L.P., a Cayman Island limited
partnership, and BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P., a Cayman Island limited
partnership (collectively, the "Funds"); BRW STEEL
HOLDINGS L.P., a Delaware limited partnership
("BRWSH"); BRW STEEL OFFSHORE HOLDINGS L.P.; a
Delaware limited partnership ("BRWSH II" and,
together with BRWSH, the "Partnerships"); BAR
TECHNOLOGIES INC., a Delaware corporation
("BarTech"); BLISS & ▇▇▇▇▇▇▇▇ STEEL COMPANY, an
Illinois corporation and a wholly owned subsidiary of
BarTech ("BLSC" and, together with BarTech, the
"Borrowers"); each other subsidiary of BarTech listed
on Schedule I thereto (each such subsidiary and BLSC
individually a "Subsidiary Pledgor" and collectively,
the "Subsidiary Pledgors"); each of the members of
management of BarTech listed on Schedule II thereto
(collectively, the "Management Stockholders" and,
together with the Funds, the Partnerships, BarTech
and the Subsidiary Pledgors, the "Pledgors"); and THE
CHASE MANHATTAN BANK (formerly known as Chemical
Bank), a New York banking corporation, as collateral
agent (in such capacity, the "Collateral Agent") for
the Secured Parties (as defined therein).
Reference is made to (a) the Credit Agreement dated as of April 2,
1996, amended and restated as of April 25, 1996, and as further amended and
restated as of September 5, 1997 (as amended or modified from time to time, the
"Credit Agreement"), among the Borrowers, the financial institutions party
thereto, as lenders (the "Lenders"), The Chase Manhattan Bank (formerly known as
Chemical Bank), as agent (in such capacity, the "Administrative Agent"), and
Chase Manhattan Bank Delaware (formerly known as Chemical Bank Delaware), as
fronting bank (in such capacity, the "Fronting Bank"). Capitalized terms used
herein and not defined herein shall have the meanings assigned to such terms in
the Facility Pledge Agreement and the Credit Agreement.
The Borrowers and the other Pledgors have requested that the
Secured Parties amend certain provisions of the Facility Pledge Agreement. The
Secured Parties are willing to do so, subject to the terms and conditions of
this Amendment.
Accordingly, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the sufficiency and receipt
of which are hereby acknowledged, the Pledgors and the Collateral Agent, on
behalf of itself and each other Secured Party (and each of their respective
successors or assigns), hereby agree as follows:
SECTION 1. Amendment to Section 2.01. Clause (a) (until the
first proviso thereof) of Section 2.01 of the Facility Pledge Agreement is
hereby amended and restated to read in its entirety as follows:
"(a) the shares of capital stock and membership interests
owned by it listed on Schedule III and any shares of capital stock of
BarTech or any Subsidiary or membership interests of RTI obtained in
the future by such Pledgor and the certificates representing all such
shares and membership interests (the "Pledged Stock");".
SECTION 2. Amendment to Schedule III. Schedule III to the
Facility Pledge Agreement is hereby amended and restated in its entirety to read
as set forth in Annex I hereto.
23
2
SECTION 3. No Other Amendments. Except as specifically stated
herein, the Facility Pledge Agreement shall continue in full force and effect in
accordance with the provisions thereof.
SECTION 4. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 5. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be an original but all of which,
when taken together, shall constitute but one instrument. Delivery of an
executed counterpart of a signature page of this Amendment by telecopy shall be
effective as delivery of a manually executed counterpart of this Amendment.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment as of the day and year first above written.
BRW STEEL HOLDINGS, L.P.,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
BRW STEEL OFFSHORE HOLDINGS, L.P.,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Authorized Signatory
BAR TECHNOLOGIES INC.,
by
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: V.P. Finance and Treasurer
BLISS & ▇▇▇▇▇▇▇▇ STEEL COMPANY,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
24
3
BLISS & ▇▇▇▇▇▇▇▇ INDUSTRIES INC.,
by
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Treasurer
BLACKSTONE CAPITAL PARTNERS
II MERCHANT BANKING FUND L.P.,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
BLACKSTONE OFFSHORE CAPITAL
PARTNERS II L.P.,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
BLACKSTONE FAMILY INVESTMENT
PARTNERSHIP II L.P.,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Member
THE CHASE MANHATTAN BANK,
as Collateral Agent,
by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
25
ANNEX I
Schedule III to the
Facility Pledge Agreement
CAPITAL STOCK
-------------
None.
MEMBERSHIP INTEREST
-------------------
BarTech holds a 50.0% membership interest and voting interest
and an initial 33- 1/3% economic allocation in RTI.
DEBT SECURITIES
---------------
None.