Exhibit 10.2
Execution Version
WAIVER AND SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS WAIVER AND SECOND AMENDMENT TO
CREDIT AGREEMENT (this “ Amendment ”), dated as
of April 15, 2010, is entered into by and among CONTINENTAL
MATERIALS CORPORATION, a Delaware corporation (the “
Company ”), the financial institutions that are or may
from time to time become parties to the Credit Agreement referenced
below (together with their respective successors and assigns, the
“ Lenders ” and each, a “ Lender
”) and THE PRIVATEBANK AND TRUST COMPANY, an Illinois state
chartered bank as Administrative Agent for each Lender (the “
Administrative Agent ”). Capitalized terms used
herein and not otherwise defined shall have the meanings given to
such terms in the Credit Agreement referenced below.
WHEREAS, the Lender previously made
available to the Company a credit facility pursuant to the terms
and conditions of that certain Credit Agreement, dated as of April
16, 2009, by and among the Company, the Lender and the
Administrative Agent, as amended by that certain First Amendment to
Credit Agreement, dated as of November 18, 2009, by and among the
Company, the Lender and the Administrative Agent (the “
First Amendment ”) (as further amended, restated or
supplemented from time to time, the “ Credit Agreement
”);
WHEREAS, pursuant to the Credit
Agreement, the Lender previously (i) made available to the Company
a revolving credit facility in the amount of $20,000,000 (reduced
to $15,000,000 pursuant to the First Amendment), and (ii) funded a
term loan in the original principal amount of
$10,000,000;
WHEREAS, the parties to this
Amendment desire to amend the Credit Agreement to, among other
things, (i) reduce the Revolving Commitment to $13,500,000 from and
after October 1, 2010, (ii) shorten the maturity date of the
Revolving Loan and Term Loan to August 1, 2011, (iii) modify
certain financial covenants, eliminate certain financial covenants
and eliminate the requirement to test the financial covenants on
April 3, 2010, (iv) modify the definition of Borrowing Base to
reduce the inventory cap from $7,500,000 to $6,750,000, (v) modify
the pricing applicable to the Revolving Loan and Term Loan, and
(vi) modify the definition of Eligible Accounts to exclude any
Dating Program Accounts that are more than sixty (60) days past
due, in each case, all on the terms and conditions set forth
herein; and
WHEREAS, as of the date of this
Amendment, there exist Events of Default under and as defined in
the Credit Agreement as a result of the Company’s failure to
comply with the minimum Adjusted EBITDA requirement in Section
11.13.1 of the Credit Agreement and the Fixed Charge Coverage
Ratio requirement in Section 11.13.2 of the Credit
Agreement, in each case, for the period ended January 2, 2010 (the
“ Existing Covenant Defaults ”).
NOW, THEREFORE, in consideration of
the premises, to induce the Lender and Administrative Agent to
enter into this Amendment, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by the parties hereto as
follows:
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