AMENDMENT NO. 2
dated as of June 1, 2009 (this “ Amendment ”),
to the Credit Agreement dated as of November 15, 2007, among Barzel
Industries Inc. (formerly known as Novamerican Steel Inc. and
Symmetry Holdings Inc.), a Delaware corporation (“
Parent ”), Barzel Finco Inc. (formerly known as
Novamerican Steel Finco Inc.), a Delaware corporation (“
US Borrower ”), Barzel Industries Canada Inc.
(formerly known as Novamerican Steel Canada Inc. and Novamerican
Steel Inc.), a Canadian corporation (“ Canadian
Borrower ”), the Lenders party thereto, JPMorgan Chase
Bank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A.,
Toronto Branch, as Canadian Agent, and CIT Business Credit Canada
Inc. and The CIT Group/Business Credit, Inc., as Syndication Agents
(the “ Credit Agreem ent”).
WHEREAS, Parent wishes to terminate the
Revolving Commitments of each Lender other than JPMorgan Chase
Bank, N.A. (“ JPMCB ”) and reduce the Revolving
Commitment of JPMCB to US$20,000,000 and JPMCB is willing to
continue its Revolving Commitment at such reduced level;
WHEREAS, CIBC Inc. (“ CIBC ”)
wishes to become a Lender and JPMCB is willing to assign to CIBC
one-third of its Revolving Commitment;
WHEREAS, in connection therewith the parties
wish to amend the Credit Agreement as provided herein;
NOW, THEREFORE, in consideration of the above
premises and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. DEFINED TERMS .
EACH CAPITALIZED TERM USED AND NOT DEFINED HEREIN, INCLUDING IN THE
RECITALS HERETO, SHALL HAVE THE MEANING ASSIGNED TO IT IN THE
CREDIT AGREEMENT.
SECTION 2. AMENDMENTS .
EFFECTIVE AS OF THE AMENDMENT EFFECTIVE DATE (AS DEFINED BELOW) THE
REVOLVING COMMITMENT OF EACH LENDER OTHER THAN JPMCB SHALL BE
REDUCED TO ZERO, THE REVOLVING COMMITMENT OF JPMCB SHALL BE REDUCED
TO US$20,000,000 AND EACH LENDER OTHER THAN JPMCB SHALL CEASE TO BE
A LENDER UNDER THE CREDIT AGREEMENT AND EACH OF SUCH LENDERS’
RESPECTIVE OBLIGATIONS AND LIABILITIES UNDER THE CREDIT AGREEMENT
SHALL TERMINATE. EFFECTIVE IMMEDIATELY AFTER SUCH REDUCTIONS THE
FOLLOWING SECTIONS OF THE CREDIT AGREEMENT SHALL BE AMENDED AS SET
FORTH BELOW:
(a) Section
1.01 shall be amended by replacing the definition of
“Aggregate Borrowing Base” with the
following:
“ Aggregate Borrowing Base ”
means, at any time the sum at such time of the US Borrowing Base
and the Canadian Borrowing Base (after the elimination of any
duplication in Reserves).
and each
reference in the Agreement to clause (b) of such definition shall
be deleted.
(b) Section
1.01 shall be amended by replacing the definition of
“Applicable Rate” with the following:
“ Applicable Rate ” means,
for any day, (a) with respect to any Loan or BA, (i) in the case of
the ABR/Canadian Prime Spread, 4.00%, and (ii) in the case of the
Eurocurrency Spread/BA Stamping Fee, 5.00% and (b) with respect to
the commitment fees payable hereunder, 0.75% per annum.
(c) Section
1.01 shall be amended by amending the definition of
“Availability Block” to replace the reference therein
to “US$15,000,000” with a reference to
“US$7,500,000”.
(d) Section
1.01 shall be amended by amending the definition of
“Borrowing Base Certificate” to insert at the end
thereof the following proviso: “; provided that the
Administrative Agent may in its discretion waive the updating of
any component of any Borrowing Base Certificate that it believes
cannot be timely updated without unreasonable cost or
effort”.
(e) Section
1.01 shall be amended by amending the definition of
“Borrowing Minimum” to replace the reference therein to
“US$5,000,000” with a reference to
“US$1,000,000” and the reference therein to
“Cdn.$5,000,000” with a reference to
“Cdn.$1,000,000”.
(f) Section
1.01 shall be amended by inserting in the appropriate alphabetical
location the following new definitions:
“ Budgets ” collectively
means the Initial Budget and the 13-week Budgets.
“ Initial Budget ” means that
certain weekly cash forecast prepared by the Borrowers in form,
scope and detail satisfactory to the Lenders, which shall reflect
the Borrowers’ good faith projection of all cash receipts and
disbursements in connection with the operation of their businesses
for the period commencing the week of March 6, 2009, through the
week of November 27, 2009, a certified copy of which was delivered
to the Lenders on the Amendment Effective Date under Amendment No.
2 to this Agreement.
“ 13-week Budgets ”
collectively means the 13-week budgets prepared each week by the
Borrowers in form, scope and detail satisfactory to the Lenders,
each of which shall reflect the Borrowers’
good faith
projection of all cash receipts and disbursements in connection
with the operation of their businesses for the next 13 week period
commencing after the date such budget is delivered to the
Lenders.
“ Permitted Variances ” has
the meaning assigned to such term in Section 5.11(b).
(g) Section
1.01 shall be amended by amending the definition of “Required
Lenders” to insert at the end thereof the following proviso:
“; provided that “Required Lenders” shall
include both JPMCB and CIBC Inc. at all times that both (a) JPMCB
and its Affiliates alone would otherwise constitute the Required
Lenders and (b) the Revolving Commitment held by CIBC Inc. and its
Affiliates is not less than 10% of the aggregate Revolving
Commitments.
(h) Section
1.01 shall be amended by amending the definition of
“Revolving Maturity Date” to replace the reference
therein to “November 15, 2012” with a reference to
“September 30, 2010”.
(i) Section
2.01 shall be amended by (1) replacing clause (iv) thereof with the
following: “(iv) the sum of the Revolving Exposures exceeding
the excess of (A) the lesser of (1) the Aggregate Borrowing Base
then in effect and (2) the aggregate Revolving Commitments then in
effect over (B) the Availability Block”, (2) deleting the
word “or” after clause (iv) and (3) inserting at the
end thereof the following new clause (vi): “or (vi) the
aggregate principal amount of Loans and BAs requested by the
Borrower to be drawn or accepted during any week causing the
aggregate Borrowings and BA Drawings to exceed at any time the sum
of (A) the projected aggregate Borrowings and BA Drawings balance
for such week as reflected in the then-current 13-week Budget under
this Agreement, plus (B) the Permitted Variances for such
week”.
(j) Section
2.03 shall be amended by replacing clause (b) thereof with the
following: “(b) in the case of an ABR Borrowing or a Canadian
Prime Borrowing, not later than 11:00 a.m., Local Time, on the date
of the proposed Borrowing”.
(k) Section
2.04(a) shall be amended by (1) replacing the reference therein to
“US$15,000,000” with a reference to
“US$5,000,000” and (2) inserting at the end of the
first sentence thereof the following proviso: “; and
provided further that no Protective Advance shall be
made without the approval of CIBC Inc. at any time that CIBC
Inc.’s approval is required to constitute the Required
Lenders if as a result of such Protective Advance the Revolving
Exposures would exceed the excess of (x) the lesser of (1) the
Aggregate Borrowing Base then in effect and (2) the aggregate
Revolving Commitments then in effect over (y) the Availability
Block”.
(l) Section
2.05 shall be amended by inserting at the end thereof the following
new paragraph (d): “(d) Notwithstanding any other provision
of this
Agreement, no
Borrower shall request, and the Swingline Lender shall not make to
any Borrower, any Swingline Loan until this paragraph (d) shall
have been amended to permit such request and advance in accordance
with Section 9.02.”
(m) Section
2.06(b) shall be amended by (1) replacing the reference in clause
(i) thereof to “US$25,000,000” with a reference to
“US$1,000,000” and (2) replacing clause (vi) thereof
with the following: “(vi) the sum of the Revolving Exposures
shall not exceed the excess of (A) the lesser of (1) the Aggregate
Borrowing Base then in effect and (2) the aggregate Revolving
Commitments then in effect over (B) the Availability
Block”.
(n) Section
2.12(b) shall be amended by replacing clause (iii) thereof with the
following: “the sum of the Revolving Exposures exceeds the
sum of (x) the excess of (1) the lesser of (I) the Aggregate
Borrowing Base then in effect and (II) the aggregate Revolving
Commitments then in effect over (2) the Availability Block and (y)
the Protective Advance Exposure then
outstanding,”.
(o) Section
3.04(d) shall be amended by (1) replacing the reference therein to
“November 25, 2006” with a reference to “February
28, 2009” and (2) inserting at the end thereof the following
phrase: “, it being understood that for purposes of this
Section 3.04(d), the forecasts contained in the Initial Budget
shall not constitute a material adverse change in the prospects of
Parent, the Borrowers and the Subsidiaries, taken as a whole, nor
shall results consistent with the Initial Budget constitute a
material adverse change in the business, assets, operations or
condition, financial or otherwise, of Parent, the Borrowers and the
other Subsidiaries, taken as a whole”.
(p) Section
4.02(c) shall be amended by replacing clause (ii) thereof with the
following: “(iv) the sum of the Revolving Exposures shall not
exceed the excess of (A) the lesser of (1) the Aggregate Borrowing
Base then in effect and (2) the aggregate Revolving Commitments
then in effect over (B) the Availability Block”.
(q) Section
4.02 shall be amended by inserting immediately after paragraph (c)
thereof the following new paragraph (d):
(d) After
the Amendment Effective Date under Amendment No. 2 to this
Agreement, at the time of and immediately after giving effect to
such Borrowing or BA Drawing or the issuance, amendment, renewal or
extension of such Letter of Credit, as applicable, the Borrowers
shall be in compliance with clause (iii) of Section 5.01(f) and the
Borrowers’ aggregate outstanding Borrowings and BA Drawings
after giving effect thereto shall not exceed the amount permitted
under Section 5.11(b) based on the then-current 13-week Budget
under this Agreement.
(r) Section
5.01(f) shall be amended by (1) deleting clause (i) thereof, (2)
replacing clause (ii) thereof with the following: “(i) 5:00
p.m., New York City
time, on the
Wednesday of each week (or if such Wednesday is not a Business Day,
on the next succeeding Business Day), a Borrowing Base Certificate
as of the immediately preceding Saturday”; (3) renumbering
clause (iii) thereof as clause (ii) and (4) inserting at the end
thereof the following new clause (iii): “and (iii) 5:00 p.m.,
New York City time, on the Wednesday of each week (or if such
Wednesday is not a Business Day, on the next succeeding Business
Day), (A) a 13-week Budget that rolls forward the then existing
13-week Budget to include the week immediately succeeding the
thirteen weeks covered by the then existing 13-week Budget, (B) a
report that sets forth the actual receipts and disbursements of the
Borrowers during the immediately preceding week and includes a
summary of all deposits in transit and reflects aggregate cash
balances in, and all outstanding checks drawn against, all accounts
of the Borrowers and their Subsidiaries with financial and other
institutions as of the immediately preceding Saturday and (C) a
comparison of actual performance for the preceding week to each of
(i) the Initial Budget and (ii) the 13-week Budget previously
provided and an explanation for any material variances, each in
form satisfactory to the Lenders and accompanied by a certificate
of the Chief Financial Officer or the Chief Executive Officer to
the effect that such report and comparison are accurate and
complete and that such Budget has been prepared in good faith and
based upon assumptions believed to be reasonable at the time when
prepared (it being agreed that each such 13-week Budget shall be
deemed to have been accepted by the Lenders, and shall thereafter
be the then-current 13-week Budget under this Agreement, if either
(x) each Lender shall have advised the Administrative Agent in
writing that such Lender accepts such 13-week Budget or (y) such
13-week Budget shall have been delivered at or prior to the time
specified in this clause (iii) and no Lender shall have advised the
Administrative Agent in writing at or prior to 5:00 p.m., New York
City time, on the Friday immediately succeeding the Wednesday on
which such delivery shall have been required (or if either such
Wednesday or such Friday is not a Business Day, on the next
succeeding Business Day following such Friday) that the 13-week
Budget so delivered is not satisfactory to such Lender in form,
substance or otherwise);
(s) Section
5.01 shall be amended by (1) deleting the word “and” at
the end of subparagraph (i) thereof, (2) re-lettering subparagraph
(j) thereof as subparagraph (k) and (3) inserting the following new
subparagraph (j): “(j) when required to be delivered under
the Deferral Agreement dated as of May 14, 2009, among Barzel
Industries Inc., the US Borrower and the holders of the Senior
Notes, all items required to be delivered under Section
5(a)(i)-(iv) and Section 5(c)(i)-(iv) thereof, in each case, as in
effect on the Amendment Effective Date under Amendment No. 2 to
this Agreement (whether or not such Deferral Agreement shall be in
effect and, if in effect, without regard to the form of such
Deferral Agreement then in effect); and”.
(t) Section
5.09(b) shall be amended by replacing the first sentence thereof
with the following sentence:
Each of Parent
and the Borrowers will, and will cause each of the Subsidiaries to,
permit any representatives designated by the Administrative Agent
(including any consultants, accountants, lawyers and appraisers
retained by the Administrative Agent) to conduct evaluations and
appraisals as requested by the Administrative Agent at any time of
the Borrowers’ computation of the Borrowing Base and the
assets included therein and such other assets and properties of the
Borrowers or any other Subsidiary as the Administrative
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