EXHIBIT 10.8
AMENDMENT NO. 2 TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
MAGNESIUM CORPORATION OF AMERICA
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
July 3, 1996
Congress Financial Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Gentlemen:
Congress Financial Corporation ("Lender") and Magnesium Corporation of
America ("Borrower") have entered into certain financing arrangements
pursuant to the Amended and Restated Loan and Security Agreement, dated as of
August 4, 1993, between Lender and Borrower, as previously amended pursuant
to the Amendment No. 1 to Amended and Restated Loan and Security Agreement,
dated January 31, 1996 (the "Amendment No. 1"), between Lender and Borrower
(as amended hereby and as the same may be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement",
and together with all agreements, documents and instruments at any time
executed and/or delivered in connection therewith or related thereto,
collectively, the "Financing Agreements"). All capitalized terms used herein
shall have the meaning assigned thereto in the other Financing Agreements,
unless otherwise defined herein.
Renco Metals, Inc., owner of all of the issued and outstanding shares of
common stock of Borrower ("Renco Metals"), is purchasing up to all of the
Existing Senior Notes (as defined below) pursuant to the Tender Offer (as
defined below) as described in the Tender Offer Agreements (as defined
below);
Renco Metals is also issuing $150,000,000 of the New RMI Notes (as
defined below), which will be guaranteed by Borrower and ▇▇▇▇▇ Industries,
Inc., a wholly owned subsidiary of Renco Metals ("▇▇▇▇▇"), and some of the
proceeds of such notes are to be used by Renco Metals to repurchase up to all
of the Existing Senior Notes pursuant to the Tender Offer;
Borrower has requested that Lender, among other things, (a) consent to
the purchase by Renco Metals of the Existing Senior Notes tendered for such
purchase pursuant to the Tender Offer, (b) permit Borrower to execute and
deliver the unsecured guarantee by Borrower of the indebtedness of Renco
Metals evidenced by the New RMI Notes, (c) agree to amend certain
provisions of the Loan Agreement to permit the foregoing transactions and (d)
agree to extend the term of the Financing Agreements and further amend the
Loan Agreement, and Lender is willing to consent to such purchase of the
Existing Senior Notes, permit such unsecured guarantee, and agree to such an
extension to the Financing Agreements and to such amendments to the Loan
Agreement, subject to the terms and conditions contained herein. By this
Amendment, Lender and Borrower desire and intend to evidence such amendments.
In consideration of the foregoing, and other good and valuable
consideration, and the respective agreements and covenants contained herein,
the parties hereto agree as follows:
1. DEFINITIONS.
(a) ADDITIONAL DEFINITIONS. As used herein, the following terms
shall have the respective meanings given to them below and the Loan Agreement
shall be deemed and is hereby amended to include, in addition and not in
limitation, each of the following definitions:
(i) "EXCESS AVAILABILITY" shall mean the amount, as
determined by Lender, calculated at any time, equal to: (a) the lesser of (i)
the amount of Loans available to Borrower as of such time based on the
applicable Lending Formulas multiplied by the Net Amount of Eligible Accounts
and the Value of Eligible Inventory, as determined by Lender, and subject to
the sublimits and reserves from time to time established by Lender hereunder
and (ii) the Maximum Credit, MINUS (b) the sum of: (i) the amount of all then
outstanding and unpaid Obligations, plus (ii) the aggregate amount of all
trade payables of Borrower which are more than thirty (30) days past due as
of such time.
(ii) "NEW RMI INDENTURE" shall mean the Indenture, dated as of
July 1, 1996, by and among Renco Metals, as obligor, Borrower and ▇▇▇▇▇
Industries, Inc. as guarantors, and Fleet National Bank, as Indenture Trustee
with respect to the New RMI Notes, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(iii) "NEW RMI NOTES" shall mean the 11.5% Senior Notes due
2003 issued by Renco Metals pursuant to the New RMI Indenture in the
aggregate principal amount of $150,000,000, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
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(iv) "TENDER OFFER" shall mean the offer by Renco Metals to
purchase for cash up to all of the Existing Senior Notes at a price of
112.75% of the aggregate principal amount thereof, plus accrued and unpaid
interest, pursuant to the Tender Offer Agreements.
(v) "TENDER OFFER AGREEMENTS" shall mean, individually and
collectively, the Offer to Purchase and Consent Solicitation Statement, dated
May 24, 1996, as amended on June 18, 1996, with respect to the repurchase by
Renco Metals of the Existing Senior Notes, and all other agreements,
documents and instruments related thereto, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(vi) "EXISTING SENIOR NOTES" shall mean the 12% Senior Notes
due 2000, issued by Renco Metals, dated as of August 4, 1993, pursuant to the
Existing Indenture payable to the order of the holders thereof in the
original principal amount of $75,000,000, on the terms and conditions set
forth in Exhibit A to the Loan Agreement, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.
(vii) "EXISTING INDENTURE" shall mean the Indenture, dated as
of August 1, 1993, by and among Renco Metals, as obligor, Borrower and ▇▇▇▇▇
Industries, Inc., as guarantors, and Fleet National Bank, as indenture
trustee with respect to the Existing Senior Notes, and the Supplemental
Indenture, dated July 1, 1996 (the "Supplemental Indenture"), as the same now
exist or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced.
(b) AMENDMENTS TO DEFINITIONS.
(i) All references to the term "Senior Notes" in the Loan
Agreement and in any of the other Financing Agreements shall be deemed and
each such reference is hereby amended to mean the "Existing Senior Notes" as
such term is defined herein.
(ii) All references to the term "Indenture" in the Loan
Agreement and in any of the other Financing Agreements shall be deemed and
each such reference is hereby amended to mean the "Existing Indenture" as
such term is defined herein.
(iii) Sections 1.32 and 1.57 of the Loan Agreement, are hereby
deleted in their entirety and the following substituted therefor:
"[Intentionally omitted]".
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(c) INTERPRETATION. For purposes of this Amendment, unless
otherwise defined herein, all terms used herein, including, but not limited
to, those terms used and/or defined in the recitals hereto, shall have the
respective meanings assigned thereto in the Loan Agreement.
2. CONSENTS. Subject to the terms and conditions contained herein,
Lender hereby consents to: (a) the purchase by Renco Metals of up to all of
the Existing Senior Notes pursuant to the Tender Offer and (b) the amendment
to the Existing Indenture as set forth in the Supplemental Indenture.
3. INTEREST RATE. All references in Section 1.33 of the Loan
Agreement to "one and three-quarter percent (1 3/4%) per annum" and "three
and three-quarter (3-3/4%) percent per annum" are each hereby deleted and the
following substituted therefor: "one (1%) percent per annum" and "three (3%)
percent per annum", respectively.
4. MAXIMUM CREDIT. Section 1.41 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"1.41 "Maximum Credit" shall mean $33,000,000."
5. INVENTORY ADVANCE RATE. Section 3.1(a)(iii) of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:
"(iii) thirty (30%) percent of the Value of Eligible Inventory
consisting of Supplies (or such greater or lesser percentage
thereof as Lender may determine from time to time).
6. INVENTORY SUBLIMIT. Section 3.1(b) of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"(b) Notwithstanding anything to the contrary contained herein or
in any of the other Financing Agreements, except in Lender's
discretion, the aggregate unpaid principal amount of the Loans
outstanding at any time based on Eligible Inventory, regardless
of the amounts of such Eligible Inventory, shall not exceed
$12,000,000 and the aggregate unpaid principal amount of the Loans
outstanding at any time based on Eligible Inventory consisting of
Supplies, regardless of the amounts of such Eligible Inventory,
shall not exceed $3,000,000."
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7. LETTER OF CREDIT ACCOMMODATIONS.
(a) The reference in Section 3.2(e) of the Loan Agreement to
"three (3%) percent per annum" is hereby deleted and the following
substituted therefor: "one and one-half (1 1/2%) percent per annum".
(b) The reference in Section 3.2(f) of the Loan Agreement to
"$3,000,000" is hereby deleted and the following substituted therefor:
"$5,000,000".
8. UNUSED LINE FEE. The reference in Section 3.5(c) of the Loan
Agreement to "$15,000,000" is hereby deleted and the following substituted
therefor: "$25,000,000".
9. NET WORTH COVENANTS. Section 7.19 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"7.19 CONSOLIDATED NET WORTH. Borrower and its subsidiaries shall,
at all times, maintain a Consolidated Net Worth of not less than
negative $112,000,000."
10. INDEBTEDNESS. Section 7.3 of the Loan Agreement is hereby amended
by adding the following new Section (l) immediately after Section 7.3(k)
thereof:
"(l) Indebtedness of Borrower to Renco Metals, outstanding as of
the date hereof in the amount of $62,227,168.45, which
Indebtedness is, in all respects, subject and subordinate in
right of payment to the right of Lender to receive the prior
indefeasible payment in full of all of the Obligations; PROVIDED,
THAT, Borrower shall not make any payments in respect of such
Indebtedness except to the extent permitted under Section 7.6."
11. GUARANTEES.
(a) Section 7.5(c) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefore:
"(c) the unsecured guarantee by Borrower of the Indebtedness
of Renco Metals evidenced by the Existing Senior Notes (as in
effect on the date hereof) in an aggregate principal amount
equal to the sum of $75,000,000 minus the aggregate principal
amount of Existing Senior Notes purchased by Renco Metals in
the Tender Offer pursuant to the terms of the
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Tender Offer Agreements; PROVIDED, THAT: (i) Borrower shall not,
directly or indirectly, (a) amend, modify, alter or change the
terms of such guarantee or consent to any of the same as to the
Existing Senior Notes or any agreements, documents or
instruments executed and/or delivered in connection therewith,
including, but not limited to, the Existing Indenture, or
(b) except as permitted under Section 7.6(i), redeem, retire,
defease, purchase or otherwise acquire such indebtedness
prior to its maturity date, or set aside or otherwise deposit
or invest any sums for such purpose, and (ii) Borrower
shall furnish to Lender all notices, demands or other
material either received from any of the holders of the
Existing Senior Notes or any representative of the holders
(including, but not limited to, the trustee), promptly
after receipt thereof, or sent by Borrower, or on its behalf,
to any of the holders or the Existing Senior Notes, or any
representative of the holders (including, but not limited to,
the trustee) concurrently with the sending thereof, as the
case may be;"
(b) Section 7.5 of the Loan Agreement is hereby amended by adding
the following new Section (h) immediately after Section 7.5(g) thereof:
"(h) the unsecured guarantee by Borrower of the Indebtedness
of Renco Metals evidenced by the New RMI Notes (as in effect
on the date hereof); PROVIDED, THAT: (i) Borrower shall not,
directly or indirectly, (a) amend, modify, alter or change
the terms of such guarantee or consent to any of the same as
to the New RMI Notes or any agreements, documents or
instruments executed and/or delivered in connection
therewith, including, but not limited to, the New RMI
Indenture, or (b) execept as permitted under Section 7.6(i),
redeem, retire, defease, purchase or otherwise acquire such
indebtedness prior to its maturity date, or set aside or
otherwise deposit or invest any sums for such purpose, and
(ii) Borrower shall furnish to Lender all notices, demands or
other material either received from any of the holders of the
New RMI Notes or any representative of such
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holders, including, but not limited to, the
trustee), promptly after receipt thereof, or
sent by Borrower, or on its behalf, to any of
the holders of the New RMI Notes, or any
representative of such holders (including,
but not limited to, the trustee) concurrently
with the sending thereof, as the case may
be;"
12. TRANSACTIONS WITH AFFILIATES.
(a) Section 7.6(g) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
"(g) Borrower may make payments to or on behalf of Renco
Metals, on or about January 15 and July 15 of each year;
PROVIDED, THAT, (i) all proceeds of each such payment by
Borrower to or on behalf of Renco Metals shall be used to pay
the regularly scheduled interest due and payable on or about
the date of such payment under the terms of the Existing
Senior Notes (as in effect on the date hereof), (ii) the
amount of each such payment by Borrower to or on behalf of
Renco Metals shall not exceed an amount equal to: (A) the
amount of the regularly scheduled payments of interest under
the Existing Senior Notes (as in effect on the date hereof)
due and payable on or about the date of such payment by
Borrower to or on behalf of Renco Metals MINUS (B) any
amounts paid by ▇▇▇▇▇ to or on behalf of Renco Metals in
respect of such interest then due, and (iii) no Event of
Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default
shall have occurred and be continuing at the time of or after
giving effect to the payment of any such amounts;".
(b) Section 7.6 of the Loan Agreement is hereby amended by adding
the following new Sections (h) and (i) immediately after Section 7.6(g) thereof:
"(h) Borrower may make payments to or on behalf of Renco
Metals, on or about January 1 and July 1 of each year;
PROVIDED, THAT, (i) all proceeds of each such payment by
Borrower to or on behalf of Renco Metals shall be used to pay
the regularly scheduled interest due and payable on or about
the date of such payment under the terms of the New RMI Notes
(as in effect on the date hereof), (ii) the amount of each
such payment by Borrower to or
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on behalf of Renco Metals shall not exceed an amount equal
to: (A) the amount of the regularly scheduled payments of
interest under the New RMI Notes (as in effect on the date
hereof) due and payable on or about the date of such payment
by Borrower to or on behalf of Renco Metals MINUS (B) any
amounts paid by ▇▇▇▇▇ to or on behalf of Renco Metals in
respect of such interest then due, and (iii) no Event of
Default, or act, condition or event which with notice or
passage of time or both would constitute an Event of Default
shall have occurred and be continuing at the time of or after
giving effect to the payment of any such amounts; and
(i) Borrower may make certain payments to or
on behalf of Renco Metals; PROVIDED, THAT, (i) all proceeds
of each such payment by Borrower to or on behalf of Renco
Metals shall be used to pay any mandatory redemptions of the
Existing Senior Notes and the New RMI Notes (as each is in
effect on the date hereof) required by the Existing Indenture
and the New RMI Indenture (as each is in effect on the date
hereof) in the event of (A) certain Asset Sales (as defined
in the Existing Indenture and the New RMI Indenture as each
is in effect on the date hereof) of Borrower other than the
Collateral, and (B) a Change of Control (as defined in the
Existing Indenture and the New RMI Indenture as each is in
effect on the date hereof), (ii) the amount of each such
payment by Borrower to or on behalf of Renco Metals shall not
exceed an amount equal to: (A) the amount of the mandatory
redemptions of the Existing Senior Notes and the New RMI
Notes required to be paid by Renco Metals MINUS (B) any
amounts paid by ▇▇▇▇▇ to or on behalf of Renco Metals in
respect of such payments, and (iii) no Event of Default, or
act, condition or event which with notice or passage of time
or both would constitute an Event of Default shall have
occurred and be continuing at the time of or after giving
effect to the payment of any such amounts".
(c) Notwithstanding anything to the contrary contained in Section
7.6 or 7.7 of the Loan Agreement, but subject to the terms and conditions
contained herein, Borrower may (i) declare and pay, out of legally available
funds therefor, a one (1) time dividend as of the date hereof to Renco Metals
or to Renco Group on behalf of Renco Metals in an amount not to exceed an
amount equal to: (A) $75,028,175.21 MINUS (B) any amounts paid by ▇▇▇▇▇
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to Renco Metals or to Renco Group on behalf of Renco Metals in respect of
such a dividend payment as of the date hereof and (ii) pay to certain
officers of Borrower an amount up to $5,251,972.27 pursuant to existing net
worth appreciation agreements between such officers and Borrower.
13. RENEWAL DATE. The reference in Section 10.1(a) of the Loan
Agreement (as previously amended) to "five (5) years from the date hereof"
shall be deleted in its entirety and the following substituted therefor: "six
(6) years from the date hereof".
14. EARLY TERMINATION FEE. Notwithstanding anything to the contrary
contained in Section 10.1(e) of the Loan Agreement or any of the other
Financing Agreements (including Amendment No. 1), if Lender terminates the
Loan Agreement or the other Financing Agreements upon the occurrence of an
Event of Default or at the request of Borrower prior to the Renewal Date (as
amended herein), Borrower hereby agrees to pay to Lender for the account of
Lender, upon the effective date of such termination, an early termination fee
in an amount equal to:
(i) $660,000, if such termination is effective prior to the fourth
anniversary of the Loan Agreement; or
(ii) $330,000, if such termination is effective after the fourth
anniversary of the Loan Agreement but prior to the Renewal Date or
the anniversary of the Renewal Date in any subsequent year
thereafter.
15. AUDIT FEE LIMIT. Notwithstanding anything to the contrary
contained in Section 10.2(a)(vi) of the Loan Agreement, so long as no Event
of Default, or act, condition or event which with notice or passage of time
or both would constitute an Event of Default shall exist or have occurred,
Borrower shall not be required to reimburse Lender with respect to costs
(exclusive of out-of-pocket expenses) incurred by Lender for field
examinations of the Collateral and Borrower's operations in excess of $10,000
per calendar year. The foregoing shall not be construed to limit any other
provisions of the Financing Agreements regarding costs and expenses to be
paid by Borrower to Lender.
16. NOTICE. Notwithstanding anything to the contrary contained in
Section 10.5 of the Loan Agreement, all notices, requests and demands to or
upon Borrower are to be given to the following address:
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Magnesium Corporation of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with copies to:
The Renco Group, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
17. REPORTING REQUIREMENTS. In addition to, and not in limitation of,
all such financial and other information as Lender shall reasonably request
relating to the Collateral and the assets, businesses and operations of
Borrower, Borrower shall provide Lender a borrowing base certificate, in form
and substance satisfactory to Lender, setting forth Borrower's calculation of
the Loans and Letter of Credit Accommodations available to Borrower pursuant
to the terms and conditions contained in the Loan Agreement as of the
previous day each such certificate is due, based on the following schedule:
(a) on a semi-monthly basis, if (i) the Obligations are at all
times during such period less than $10,000,000, (ii) Borrower has Excess
Availability, as determined by Lender, at any time during such period, in an
amount equal to or greater than $15,000,000 and (iii) no Event of Default, or
act, condition or event which with notice or passage of time or both would
constitute an Event of Default, shall have occurred and be continuing during
such period;
(b) on a weekly basis, if (i) the Obligations are at all times
during such period equal to or greater than $10,000,000 but less than
$20,000,000, (ii) Borrower shall have Excess Availability, as determined by
Lender, at any time during such period, in an amount greater than $7,500,000
but less than $15,000,000; (iii) no Event of Default, or act, condition or
event which with notice or passage of time or both would constitute an Event
of Default, shall have occurred and be continuing during such period; and
(c) on a daily basis, at all other times.
18. FACILITY INCREASE FEE. Borrower hereby agrees to pay Lender a
Facility Increase Fee in the amount of $130,000, simultaneously with the
execution of this Amendment, which fee is fully earned as of the date hereof.
Such fee may, at Congress' option, be charged directly to any account of
Borrower maintained by Lender.
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19. REPRESENTATIONS, WARRANTIES AND COVENANTS. In addition to the
continuing representations, warranties and covenants heretofore or hereafter
made by Borrower to Lender pursuant to the other Financing Agreements,
Borrower hereby represents, warrants and covenants with and to Lenders as
follows (which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof and shall be incorporated
into and made a part of the Financing Agreements):
(a) TENDER OFFER AND CANCELLATION OF EXISTING SENIOR NOTES.
(i) The Tender Offer Agreements and the transactions
contemplated thereunder have been duly executed, delivered and performed in
accordance with their terms by the respective parties thereto in all
respects, including the fulfillment (not merely the waiver, except as may be
disclosed to Agent and consented to in writing by Agent) of all conditions
precedent set forth therein and giving effect to the terms of the Tender
Offer Agreements, the portion of the Existing Senior Notes tendered by the
holders of the Existing Senior Notes and accepted by Renco Metals have been
purchased by Renco Metals and all obligations, liabilities and indebtedness
of Renco Metals evidenced by or arising under such tendered Existing Senior
Notes have been satisfied.
(ii) All actions and proceedings required by the Tender Offer
Agreements, applicable law and regulation have been taken and the
transactions required thereunder had been duly and validly taken and
consummated.
(iii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of
the transactions described in the Tender Offer Agreements and no governmental
action or proceeding has been threatened or commenced seeking any injunction,
restraining order or other order which seeks to void or otherwise modify the
transactions described in the Tender Offer Agreements.
(iv) Borrower has delivered, or caused to be delivered, to
Lender, true, correct and complete copies of the Tender Offer Agreements.
(b) NEW RMI NOTES.
(i) The New RMI Notes have been duly authorized, issued and
delivered by Renco Metals and all agreements, documents and instruments
related thereto, including, but not limited to, the New RMI Indenture, have
been duly authorized, executed and delivered and the transactions
contemplated thereunder performed in accordance with their terms by the
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respective parties thereto in all respects, including the fulfillment (not
merely the waiver) of all conditions precedent set forth herein. All actions
and proceedings required by the New RMI Notes and the agreements, documents
and instruments related thereto, applicable law or regulation have been taken
and the transactions required thereunder have been duly and validly taken and
consummated. Neither the execution and deliver of New RMI Notes or any of
the instruments and documents to be delivered pursuant thereto, nor the
consummation of the transactions therein contemplated, nor compliance with
the provisions thereof, has violated or will violate any law or regulation or
any order or decree of any court or governmental instrumentality in any
respect or does or will conflict with or result in the breach of, or
constitute a default in any respect under, any indenture, mortgage, deed of
trust, agreement or instrument to which either Borrower or Renco Metals is or
was a party or may be bound, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of the property of Borrower or Renco
Metals or violate any provision of the Certificate of Incorporation or
By-Laws of Borrower or Renco Metals.
(ii) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of
the issuance of the New RMI Notes and the transactions described therein and
no governmental or other action or proceeding has been threatened or
commenced, seeking any injunction, restraining order or other order which
seeks to void or otherwise modify the issuance of the New RMI Notes.
(iii) Borrower has delivered, or caused to be delivered, to
Lender, a true, correct and complete specimen of the New RMI Notes and copies
of all other agreements, documents and instruments existing as of the date
relating thereto.
(c) NO DEFAULT. No Event of Default exists on the date of this
Amendment (after giving effect to the amendments to the Loan Agreement made
by this Amendment).
(d) CORPORATE POWER AND AUTHORITY. This Amendment has been duly
executed and delivered by Borrower and is in full force and effect as of the
date hereof, and the agreements and obligations of Borrower contained herein
constitute legal, valid and binding obligations of Borrower enforceable
against Borrower in accordance with their respective terms.
20. CONDITIONS PRECEDENT. The effectiveness of the consents and other
terms and conditions contained herein shall be subject to the receipt by
Lender of each of the following, in form and substance satisfactory to Lender:
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(a) evidence that: (i) the New RMI Notes and all agreements,
documents and instruments relating thereto have been duly authorized,
executed and delivered by the parties thereto in accordance with their terms
and (ii) Renco Metals has received from or on behalf of the initial holder of
the New RMI Notes cash or other immediately available funds in the aggregate
amount of $150,000,000, minus any underwriting discount with respect thereto,
constituting the net proceeds from the issuance of the New RMI Notes;
(b) evidence that the proceeds received by Renco Metals from or on
behalf of the holders of the New RMI Notes have been applied as set forth in
the Form S-1 Registration Statement filed by Renco Metals with the Securities
and Exchange Commission on May 24, 1996, as amended, including that some of
the proceeds have been applied to repurchase all of the Existing Senior Notes
tendered by such holders pursuant to the Tender Offer; and
(c) an original of this Amendment, duly authorized, executed and
delivered by Borrower.
21. ADDITIONAL EVENTS OF DEFAULT. The parties hereto acknowledge,
confirm and agree that the failure of Borrower to comply with the covenants,
conditions and agreements contained herein or in the New RMI Indenture shall
constitute an Event of Default under the Financing Agreements (subject to the
applicable cure period, if any, with respect thereto provided for in the
Loan Agreement as in effect on the date hereof).
22. EFFECT OF THIS AGREEMENT. Except as modified pursuant hereto, no
other changes or modifications in the Loan Agreement or the other Financing
Agreements are intended or implied and the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
affective date hereof. To the extent of conflict between the terms of this
Amendment and the other Financing Agreements, the terms of this Amendment
shall control.
23. GOVERNING LAW. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in
accordance with the laws of the State of New York.
24. BINDING EFFECT. This Amendment shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
25. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one
and the same agreement. In making proof of this Amendment, it shall not be
necessary to produce or
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account for more than one counterpart thereof signed by each of the parties
hereto.
26. FURTHER ASSURANCES. The parties hereto shall execute and deliver
such additional documents and take such additional action as may be necessary
or desirable to effectuate the provisions and purposes of this Agreement.
Please sign the enclosed counterpart of this Amendment in the space
provided below, whereupon this Amendment, as so accepted by Lender, shall
become a binding agreement between Borrower and Lender.
Very truly yours,
MAGNESIUM CORPORATION OF AMERICA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------
Title: Vice President
---------------------------
AGREED:
CONGRESS FINANCIAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇. Last
--------------------------
Title: Vice President
-----------------------
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