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Exhibit
10.1
SIXTH CONSENT AND
EIGHTH AMENDMENT
TO AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT
THIS SIXTH CONSENT AND EIGHTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT
(this “Amendment”) is made and entered into this 24
th
day of December, 2007, by and
among PNA Group, Inc., a Delaware corporation and successor by
merger to Travel Merger Corporation (“PNA”), Smith
Pipe & Steel Company, an Arizona corporation
(“Smith”), Infra-Metals Co., a Georgia corporation
(“Infra-Metals”), Feralloy Corporation, a Delaware
corporation (“Feralloy”), Delta Steel, L.P., a Texas
limited partnership (“Delta Steel”), Delta GP, L.L.C.,
a Texas limited liability company (“Delta GP”), Delta
LP, L.L.C., a Delaware limited liability company (“Delta
LP”), Delnor Corporation, a Texas corporation
(“Delnor”), Metals Supply Company, Ltd., a Texas
limited partnership (“Metals Supply”), and MSC
Management, Inc., a Texas corporation (“MSC”; PNA,
Smith, Infra-Metals, Feralloy, Delta Steel, Delta GP, Delta LP,
Delnor, Metals Supply and MSC are hereinafter referred to
collectively as “Borrowers” and each individually as a
“Borrower”); the Lenders (as defined in the Credit
Agreement (defined below)) party hereto; and Bank of America, N.A.,
a national banking association, as collateral and administrative
agent for the Lenders (together with its successors in such
capacity, “Administrative Agent”).
Recitals
:
Administrative Agent,
Lenders, and Borrowers are parties to a certain Amended and
Restated Credit and Security Agreement dated May 9, 2006, as
amended by that certain First Consent Letter and First Amendment to
Amended and Restated Credit and Security Agreement dated
May 31, 2006, as further amended and supplemented by that
certain Joinder Agreement and Supplement to Amended and Restated
Credit and Security Agreement dated May 31, 2006, as further
amended by that certain Second Consent Letter and Second Amendment
to Amended and Restated Credit and Security Agreement dated
June 23, 2006, as further amended by that certain Third
Amendment to Amended and Restated Credit and Security Agreement
dated July 13, 2006, as further amended and supplemented by
that certain Joinder Agreement for Revolver Commitment dated
July 13, 2006, as further amended by that certain Third
Consent Letter and Fourth Amendment to Amended and Restated Credit
and Security Agreement dated August 10, 2006, as further
amended and supplemented by that certain Joinder Agreement and
Supplement to Amended and Restated Credit and Security Agreement
dated as of August 10, 2006, as further amended by that
certain Fifth Amendment to Amended and Restated Credit and Security
Agreement dated November 15, 2006, as further amended by that
certain Fourth Consent Letter and Sixth Amendment to Amended and
Restated Credit and Security Agreement dated January 29, 2007,
and as further amended by that certain letter agreement (which
letter agreement is the fifth consent and seventh amendment to the
Amended and Restated Credit and Security Agreement) dated
March 23, 2007 (and as further amended, restated, supplemented
or otherwise modified at any time, the “Credit
Agreement”), pursuant to which Lenders have made certain
loans and other financial accommodations to Borrowers.
Borrowers have advised
Administrative Agent and Lenders that, concurrently with the
execution of this Amendment, (i) PNA intends to form a new
wholly-owned subsidiary organized as a limited liability company
under the laws of the State of Delaware (“NewLLC”)(such
transaction is referred to hereinafter as the “Sub
Formation”); and (ii) NewLLC and PNA intend to acquire
all of the existing partnership interests in Precision Flamecutting
and Steel, L.P., a Texas limited partnership (“PFS”),
pursuant to a Purchase Agreement dated December 24, 2007 (the
“Purchase Agreement”), with Edwin J. Jennings III, in
his individual capacity, The Edwin J. Jennings III 1998 Trust, and
TEJJIII, L.L.C., a Texas limited liability company (collectively,
the “Sellers”)(such transaction is referred to
hereinafter as the “Acquisition”; the Sub Formation and
the Acquisition are referred to hereinafter collectively as the
“Proposed Transactions”). Borrowers have requested that
Administrative Agent and Lenders consent to, and upon the terms and
subject to the conditions contained herein Administrative Agent and
Lenders are willing to consent to, the Proposed
Transactions.
In connection with the
Proposed Transactions, Borrowers have also requested that
Administrative Agent and Lenders agree to, and upon the terms and
subject to the conditions contained herein Administrative Agent and
Lenders are willing to agree to, certain amendments to the Credit
Agreement.
NOW, THEREFORE, for TEN
DOLLARS ($10.00) in hand paid and other good and valuable
consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Definitions
. Each capitalized term used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such
term in the Credit Agreement.
2. Consent .
Subject to the satisfaction of each of the conditions precedent set
forth in Section 4 hereof and the other terms contained
herein, Administrative Agent and Lenders hereby consent to the
Proposed Transactions.
3. Amendments to Credit
Agreement . Subject to the consummation of the Proposed
Transactions and the receipt by Administrative Agent of one or more
duly executed counterparts of this Amendment from Required Lenders
and each Borrower, the Credit Agreement is hereby amended as
follows:
(a) By adding to
Section 1.1 , in proper alphabetical sequence, the
following new definitions:
NewLLC - as defined in
that certain Sixth Consent and Eighth Amendment to Amended and
Restated Credit and Security Agreement, dated December 24,
2007, by and among Borrowers, Lenders and Administrative
Agent.
PFS - Precision
Flamecutting and Steel, L.P., a Texas limited
partnership.
(b) By deleting
Section 12.1.12 in its entirety and by substituting
therefor the following:
12.1.12. Change of
Ownership . New Parent shall cease to own beneficially and of
record at least 100% of the Equity Interests of NewCo; NewCo shall
cease to own beneficially and of record at least 100% of the Equity
Interest of PNA; PNA shall cease to own beneficially and of record
at least 100% of the Equity Interests of NewLLC, Infra-Metals,
Feralloy, Delta GP, Delta LP and MSC; PNA and NewLLC shall cease to
own beneficially and of record at least 100% of the Equity
Interests of PFS; PNA and MSC shall cease to own beneficially and
of record at least 100% of the Equity Interests of Metals Supply;
Delta GP and Delta LP shall cease to own beneficially and of record
at least 100% of the Equity Interests of Delta Steel; Delta Steel
shall cease to own beneficially and of record at least 100% of the
Equity Interests of Smith and Delnor; any “change of
control” (as defined in the Indenture governing the Debt
incurred under Section 10.2.3(vii) of the Credit Agreement)
shall occur; or any “change of control” (as defined in
the Indenture governing the NewCo Notes) shall occur.
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4. Conditions Precedent
to Consent . The effectiveness of the consent set forth in
Section 2 hereof is subject to the satisfaction of each of the
following conditions precedent, in form and substance satisfactory
to Administrative Agent, unless satisfaction thereof is
specifically waived in writing by Administrative Agent:
(a) PFS shall, at the time of
the Acquisition, carry on a business that is the same as or
related, ancillary or complementary to the business carried on by
Borrowers, or own assets used or useful in a business that is the
same as or related, ancillary or complementary to the business
carried on by Borrowers;
(b) After giving effect to
the consent and amendments contained herein, both before and after
giving effect to the Proposed Transactions, each Obligor shall then
be Solvent and no Default or Event of Default shall then exist
(including, without limitation, under Section 12.1.6 of the
Credit Agreement as it relates to Debt incurred pursuant to
Section 10.2.3(ii) of the Credit Agreement);
(c) Administrative Agent
shall have received and reviewed a copy of the executed Purchase
Agreement, including all exhibits and schedules thereto, which
Purchase Agreement shall provide for a purchase price for the
Acquisition not to exceed $57,000,000 (excluding any post-closing
working capital adjustment), including all deferred payments of
purchase price and all payments to be held and disbursed pursuant
to any escrow agreement, and such Purchase Agreement shall be
satisfactory to Administrative Agent in all respects (it being
acknowledged that the draft of the Purchase Agreement dated
December 24, 2007, heretofore delivered by Borrowers to
Administrative Agent is satisfactory to Administrative
Agent);
(d) Administrative Agent
shall have received copies of any and all material third-party
consents and notices required in order for Sellers to consummate
the Acquisition;
(e) Borrowers shall have
delivered to Administrative Agent such audited financial statements
(or, if not available, unaudited financial statements, or, if
unaudited financial statements are not available, other financial
information satisfactory to Administrative Agent) for PFS as have
been delivered by Sellers to Borrowers as provided in the Purchase
Agreement;
(f) Administrative Agent
shall have received and reviewed copies of the charter, certificate
or articles of incorporation or organization of each of New LLC and
PFS, in each case certified by the Secretary of State or other
appropriate official of the jurisdiction of such entity’s
state of organization, and copies of all other Organization
Documents and all amendments thereto; and such copies shall be
satisfactory to Administrative Agent in all respects;
(g) Administrative Agent
shall have received and reviewed a copy of the resolutions adopted
by the managing member, board of directors or general partner of
each of NewLLC and PFS, in each case duly authorizing and
empowering such entity to enter into, execute, deliver and perform
its obligations under each of the Credit Documents contemplated
hereby to be delivered by such entity in connection herewith, and
duly certified by the Secretary or Assistant Secretary of such
entity; and such copies shall be satisfactory to Administrative
Agent in all respects;
(h) Administrative Agent
shall have received and reviewed good standing certificates for
each of NewLLC and PFS, in each case issued by the Secretary of
State or other
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appropriate official of such
entity’s jurisdiction of organization and each jurisdiction
where the conduct of such entity’s business activities or
ownership of its property necessitates qualification and in which
the failure to be so qualified would have a Material Adverse
Effect; and such certificates and applications shall be
satisfactory to Administrative Agent in all respects;
(i) Borrowers shall have
executed and delivered to Administrative Agent, contemporaneously
with the consummation of the Proposed Transactions, counterparts or
amendments to the applicable Pledge Agreements and such other
certificates, stock powers, agreements, documents and instruments
as Administrative Agent reasonably requests, in each case in form
and substance satisfactory to Administrative Agent, pursuant to
which such Persons shall pledge to Administrative Agent, for itself
and for the benefit of the Secured Parties, as security for the
Obligations, 100% of the capital stock of, or other Equity
Interests in, each of NewLLC and PFS;
(j) Borrowers, NewLLC and PFS
shall have executed and delivered to Administrative Agent,
contemporaneously with the consummation of the Proposed
Transactions, a joinder agreement to the Credit Agreement (the
“Joinder Agreement”), by which NewLLC and PFS become
Borrowers thereunder and secure the Obligations, and such Security
Documents, other documents, agreements and instruments as
Administrative Agent reasonably requests, in each case in form and
substance satisfactory to Administrative Agent;
(k) NewLLC and PFS shall have
executed and delivered to Administrative Agent, contemporaneously
with the consummation of the Proposed Transactions, an allonge to
each Note outstanding under the Credit Agreement, duly executed and
delivered by each of NewLLC and PFS;
(l) Borrowers shall have
delivered to Administrative Agent Lien search reports in form and
substance satisfactory to Administrative Agent, and, upon
consummation of the Proposed Transactions and the filing of the
financing statements contemplated by clause (n) below,
Administrative Agent shall have, for itself and for the benefit of
the Secured Parties, a first priority Lien on all personal property
of each of NewLLC and PFS, subject only to Permitted
Liens;
(m) Administrative Agent
shall have received duly executed UCC-3 termination statements,
mortgage satisfactions and such other instruments, or duly executed
payoff letters authorizing Borrowers or Administrative Agent to
record, or obligating the applicable secured party to
record,
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