Exhibit 10.21
AMENDMENT NO. 3
AND LIMITED WAIVER
AMENDMENT NO. 3 AND LIMITED WAIVER, dated as of June 19, 2003, among
EMPIRE RESOURCES, INC., a corporation duly organized and validly existing under
the laws of the State of Delaware (the "Company"); each of the existing lenders
that is a signatory hereto (individually, a "Continuing Bank" and, collectively,
the "Continuing Banks"); BROWN BROTHERS HARRIMAN & CO., as a new lender (the
"New Bank" and together with the Continuing Banks, the "Banks"); and JPMORGAN
CHASE BANK, as agent for the Banks (in such capacity, together with its
successors in such capacity, the "Agent").
The Company, the Continuing Banks and the Agent are parties to a Credit
Agreement, dated as of December 21, 2000 (as heretofore modified and
supplemented and in effect on the date hereof, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for extensions of credit
to be made by said Banks to the Company. The New Bank now wishes to become party
to the Credit Agreement and the Company, the Banks and the Agent now wish to
amend the Credit Agreement in certain respects and, accordingly, the parties
hereto hereby agree as follows:
Section 1. Definitions. Except as otherwise defined in this Amendment
No. 3 and Limited Waiver, terms defined in the Credit Agreement are used herein
as defined therein.
Section 2. New Bank; Non-Pro-Rata Reduction in Bank Outstanding
Principal Amount and Commitment; Banks' Commitments. Subject to the occurrence
of the Amendment Effective Date (as defined below) and effective on such date:
2.01. Each of the parties hereto agrees that the New Bank is a "Bank"
party to the Credit Agreement with all of the rights and obligations of a "Bank"
under the Credit Agreement, and each reference to "Bank" in the Credit Agreement
and all other Basic Documents shall for all purposes include the New Bank. The
New Bank hereby agrees to be bound by all of the terms and provisions of the
Credit Agreement applicable to "Banks".
2.02. Each of the parties hereto agrees that the Company may (i) prepay
any outstanding principal amount owed to Standard Chartered Bank under the
Credit Agreement without prepaying any outstanding principal amount owed to any
other Bank, (ii) use proceeds of the Loans to make the prepayments contemplated
in clause (i) hereof and (iii) terminate the Commitment of Standard Chartered
Bank without terminating or reducing the Commitment of any other Bank, in each
case upon delivery of notice in accordance with Section 4.05 of the Credit
Agreement.
2.03. Each of the parties hereto agrees that the aggregate Commitment
of the Banks as of the date hereof shall be reduced to $50,000,000 and shall be
allocated among the Banks in the following respective amounts:
Bank Commitment
JPMorgan Chase Bank $25,000,000
Citicorp USA, Inc. $15,000,000
Brown Brothers Harriman & Co. $10,000,000
2.04. Each Bank shall make its portion of the Loans contemplated in
clause (ii) of Section 2.02 in an amount that will result in the aggregate
outstanding principal amount of all Loans being allocated pro rata among the
Banks according to the amounts of their respective Commitments.
2.05. The New Bank (i) represents and warrants to the Administrative
Agent and each Continuing Bank that it has received a copy of the Credit
Agreement and each other Basic Document, (ii) agrees that it has, independently
and without reliance on the Administrative Agent or any Continuing Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Company and its Subsidiaries and decision to enter
into the Credit Agreement and this Amendment No. 3 and Limited Waiver, and (iii)
confirms its obligations under Section 10.06 of the Credit Agreement.
2.06. The Company agrees to execute and deliver a new Note to Citicorp
USA, Inc. reflecting the increase in Commitment for such Bank upon delivery to
the Company by such Bank of the Note, dated December 21, 2000, issued to such
Bank by the Company.
Section 3. Amendment. Subject to the occurrence of the Amendment
Effective Date and effective on such date, the Credit Agreement shall be amended
as follows:
3.01. Section 1.01 of the Credit Agreement (Definitions) shall be
amended by inserting each of the following definitions in the appropriate
alphabetical sequence:
"Amendment No. 3" shall mean Amendment No. 3 and Limited
Waiver, dated as of June 19, 2003, among the Company, the Banks and the
Agent.
"Guarantors" shall mean each Subsidiary of the Company that
executes and delivers a Subsidiary Guarantee.
"Obligors" shall mean, collectively, the Company and the
Guarantors.
"Non-Dormant Subsidiary" shall mean any Subsidiary of the
Company that is not listed on Schedule III hereto.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which at least a majority
of the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or
not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall
have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled
by such Person or one or more Subsidiaries of such Person or by such
Person and one or more Subsidiaries of such Person.
"Subsidiary Guarantee" shall have the meaning assigned to such
term in Section 8.19 hereof.
3.02. The definition of "Commitment" in Section 1.01 of the Credit
Agreement (Definitions) shall be amended by replacing the words "on the
signature pages hereof" with the words "in Section 2.03 of Amendment No. 3".
3.03. The definition of "Eurodollar Base Rate" in Section 1.01 of the
Credit Agreement (Definitions) shall be amended by replacing the words "two
Business Days prior" with the words "three Business Days prior".
3.04. The definition of "Margin Stock" in Section 1.01 of the Credit
Agreement (Definitions) shall be amended by inserting "T," immediately before
the letter "U" located therein.
3.05. The definition of "Material Adverse Effect" in Section 1.01 of
the Credit Agreement (Definitions) shall be amended by (x) inserting "and its
Non-Dormant Subsidiaries (on a consolidated basis)," immediately following the
first occurrence of the word "Company" therein and (y) inserting "or any of its
Non-Dormant Subsidiaries," immediately following the second occurrence of the
word "Company" therein.
3.06. The definition of "Regulations A, D, U and X" in Section 1.01 of
the Credit Agreement (Definitions) shall be amended by inserting "T,"
immediately before the letter "U" located therein and in the defined term itself
(in all cases where such defined term appears throughout the Credit Agreement).
3.07. The definition of "Revolving Credit Commitment Termination Date"
in Section 1.01 of the Credit Agreement (Definitions) shall be amended by
replacing the date "June 30, 2003" with the date "June 30, 2006".
3.08. The definition of "Security Documents" in Section 1.01 of the
Credit Agreement (Definitions) shall be amended by inserting the words "the
Subsidiary Guarantees," immediately after the occurrence of the words "the
Security Agreement," located therein.
3.09. The definition of "Tangible Net Worth" in Section 1.01 of the
Credit Agreement (Definitions) shall be amended by replacing the words "in
Affiliates" in clause (d)(i) thereof with the words "other than Permitted
Investments".
3.10. Section 1.02 of the Credit Agreement (Accounting Terms and
Determinations) shall be amended by inserting the following clause (c) at the
end thereof:
(c) Any and all financial information delivered pursuant to
Section 8.01(a) and (b) shall be prepared on a consolidated basis for
the Company and its Subsidiaries. Any and all calculations made
hereunder for purposes of determining compliance with the financial
covenants set forth in Sections 8.09 through 8.12 shall be on a
consolidated basis for the Company and its Subsidiaries.
3.11. Section 4.01(a) of the Credit Agreement (Payments) shall be
amended by replacing the words "all payments made by the Company" with the words
"all payments made by the Obligors".
3.12. Section 4.07(b) of the Credit Agreement (Sharing of Payments)
shall be amended by replacing the first occurrence of the words "the Company"
with the words "any Obligor" and each subsequent occurrence of the words "the
Company" with the words "such Obligor".
3.13. Section 4.07(d) of the Credit Agreement (Sharing of Payments)
shall be amended by replacing the words "the Company" with the words "any
Obligor".
3.14. Section 6.02 of the Credit Agreement (Initial and Subsequent
Extensions of Credit) shall be amended by replacing the words "the Bank" located
in the parenthetical in the last sentence thereof with the words "the Agent".
3.15. Section 8.01(d)(z) of the Credit Agreement (Financial Statements
Etc.) shall be amended by replacing the text therein with "[Intentionally
Omitted]".
3.16. Section 8.02 of the Credit Agreement (Litigation) shall be
amended by inserting the words "or any of its Subsidiaries" (x) immediately
after the words "affecting the Company" in the first sentence thereof and (y)
immediately before the words "and notice of any alleged violation" in the second
sentence thereof.
3.17. Section 8.03(f) of the Credit Agreement (Existence, Etc.) shall
be amended by inserting the parenthetical "(which such notice shall not be
required at any time an Event of Default has occurred and is continuing)"
immediately after the words "upon reasonable prior notice".
3.18. Section 8.04 of the Credit Agreement (Insurance) shall be amended
(x) by inserting the words ", and will cause its Non-Dormant Subsidiaries to,"
immediately after the occurrence of the words "Company will" in the first
sentence thereof, (y) by inserting the words "or its Non-Dormant Subsidiaries',
as the case may be," immediately after the occurrence of the word "Company's" in
the first sentence thereof and (z) by deleting the words "by the Company" from
clause (b) of the third sentence thereof.
3.19. Section 8.05 of the Credit Agreement (Prohibition of Fundamental
Changes) shall be amended by deleting the sentence "The Company will not create
or establish any Subsidiaries after the date hereof".
3.20. Section 8.06 of the Credit Agreement (Limitation on Liens) shall
be amended by inserting "and will not allow any of its Subsidiaries to create,
incur, assume or suffer to exist any Lien upon any of their respective Property"
immediately after the first occurrence of the word "Property" located therein.
3.21. Section 8.07 of the Credit Agreement (Indebtedness) shall be
amended by inserting ", and will not allow any of its Subsidiaries to,"
immediately after the words "Company will not" located therein.
3.22. Section 8.08 of the Credit Agreement (Investments) shall be
amended by (w) replacing the word "The" with the words "If a Default shall have
occurred and be continuing, the", (x) inserting the words ", nor will it permit
any of its Subsidiaries to" immediately after the words "Company will not", (y)
inserting an "and" at the end of clause (a) thereof and replacing the semi-colon
at the end of clause (b) thereof with a period and (z) deleting clauses (c)
through (e).
3.23. Section 8.14 of the Credit Agreement (Dividend Payments) shall be
amended by (x) replacing the word "The" with the words "If a Default shall have
occurred and be continuing, the", (y) inserting the words ", nor will it permit
any of its Subsidiaries to" immediately after the words "Company will not" and
(z) inserting a period immediately after the words "make any Dividend Payment at
any time" and deleting all language that follows in such Section.
3.24. Section 8.15(a) of the Credit Agreement (Transactions with
Affiliates) shall be amended by replacing the text therein with "[Intentionally
Omitted]".
3.25. Section 8.16 of the Credit Agreement (Use of Proceeds) shall be
amended by inserting "T," immediately before the letter "U" located therein.
3.26. Section 8 of the Credit Agreement (Covenants of the Company)
shall be amended by inserting the following Section 8.19 at the end thereof:
8.19 Additional Guarantors. The Company will take such action,
and will cause each of its domestic Subsidiaries to take such action,
from time to time as shall be necessary to ensure that all domestic
Subsidiaries of the Company duly execute and deliver a Guarantee in
favor of the Agent in form and substance satisfactory to the Agent (a
"Subsidiary Guarantee"). Without limiting the generality of the
foregoing, in the event it or any of its Subsidiaries shall form or
acquire any new domestic Subsidiary, the Company or the respective
Subsidiary will cause such new domestic Subsidiary to become a
"Guarantor" hereunder pursuant to a written instrument in form and
substance satisfactory to each Bank and the Agent, and to deliver such
proof of corporate action, incumbency of officers, opinions of counsel
and other documents as is consistent with those delivered by the
Company pursuant to Section 6.01 hereof upon the Closing Date or as any
Bank or the Agent shall have requested.
3.27. Section 9(b) of the Credit Agreement (Events of Default) shall be
amended by inserting the words "or any of its Subsidiaries shall default in the
payment when due of any principal of or interest on any of its material
indebtedness" immediately after the words "material indebtedness" located
therein.
3.28. Section 9(c) of the Credit Agreement (Events of Default) shall be
amended by inserting the words "or any of its Subsidiaries" immediately after
the words "the Company".
3.29. Section 9(d) of the Credit Agreement (Events of Default) shall be
amended by replacing the words "or the Company shall default in the performance
of any of its other obligations" with the words "or any Obligor shall default in
the performance of any of its other obligations".
3.30. Section 9(e) of the Credit Agreement (Events of Default) shall be
amended by inserting the words "or any of its Subsidiaries" immediately after
the words "The Company".
3.31. Section 9(f) of the Credit Agreement (Events of Default) shall be
amended by inserting the words "or any of its Subsidiaries" immediately after
the words "The Company".
3.32. Section 9(g) of the Credit Agreement (Events of Default) shall be
amended by inserting the words "or any of its Subsidiaries" immediately after
each occurrence of the words "the Company".
3.33. Section 9(h) of the Credit Agreement (Events of Default) shall be
amended by (x) replacing the amount "$50,000" located therein with the amount
"$500,000" and (y) inserting the words "or any of its Subsidiaries" immediately
after each occurrence of the words "the Company".
3.34. Section 9(j) of the Credit Agreement (Events of Default) shall be
amended by (a) inserting at the beginning of such clause an "(i)", (b) replacing
the number "42" therein with the number "50.1" and (c) inserting at the end of
such clause the words "or (ii) Nathan Kahn shall cease to be President of the
Company".
3.35. Section 10.01(c) of the Credit Agreement (Appointment, Powers and
Immunities) shall be amended by inserting ", unless so directed by the Required
Lenders" immediately at the end thereof.
3.36. Section 10.03 of the Credit Agreement (Defaults) shall be amended
(i) by inserting "(other than payment Defaults)" immediately following the first
occurrence of the word "Default" in the first
sentence thereof and (ii) by inserting "or becomes aware of a payment Default"
immediately following the occurrence of the word "Default" in the second
sentence thereof.
3.37. Section 10.08 of the Credit Agreement (Resignation or Removal of
Agent) shall be amended by inserting "(in the case of any successor Agent that
is not a Bank at such time)" immediately following the word "subject" in the
second sentence of such Section.
3.38. Clause (b) of the proviso located in Section 11.04 of the Credit
Agreement (Amendments, Etc.) shall be amended by replacing the occurrence of
"Section 11" therein with "Section 10".
Section 4. Limited Waiver. Effective on the Waiver Effective Date (as
defined below) and so long as no Default shall have occurred and be continuing
on such date, the Company hereby requests and each of JPMorgan Chase Bank, as a
Bank and Citicorp USA Inc., as a Bank agree to waive the limitation on the
declaration of Dividends set forth in Section 8.14 of the Credit Agreement
(Dividend Payments) solely for the extent necessary to permit the declaration of
Dividends in the amount of $380,000.00 on June 19, 2003.
Section 5. Representations and Warranties. The Company represents and
warrants to the Banks as of the Waiver Effective Date and the Amendment
Effective Date that (x) the representations and warranties set forth in Section
7 of the Credit Agreement and in Article III the Security Agreement are true and
complete on the date hereof as if made on and as of the date hereof and as if
each reference in said Section 7 to "this Agreement" included reference to this
Amendment No. 3 and Limited Waiver, except (i) changes resulting from
transactions contemplated by or permitted by the Credit Agreement, and (ii)
those applicable to a specific date or period and (y) no Default has occurred
and is continuing.
Section 6. Conditions Precedent. As provided in Sections 2 and 3 above,
the provisions and amendments to the Credit Agreement set forth in said Sections
2 and 3 shall become effective, as of June 30, 2003 (the "Amendment Effective
Date"), upon (i) the execution of this Amendment No. 3 and Limited Waiver by the
Company, each of the Banks and the Agent, (ii) the due execution and delivery of
a Note by the Company to the New Bank, (iii) the delivery by the Company of
board of director resolutions approving this Amendment No. 3 and Limited Waiver
and the transactions contemplated herein, in form and substance satisfactory to
the Agent and (iv) the payment by the Company of the fees and expenses set forth
in (x) the Upfront Fee Letter, dated May 9, 2003, between the Agent and the
Company and (y) the Structuring Fee Letter, dated May 9, 2003, between the Agent
and the Company. As provided in Section 4 above, the limited waiver set forth
therein shall become effective as of the date first written above (the "Waiver
Effective Date") upon the execution of this Amendment No. 3 and Limited Waiver
by the Company, JPMorgan Chase Bank and Citicorp USA, Inc.
Section 7. Miscellaneous. Except as herein provided, the Credit
Agreement shall remain unchanged and in full force and effect. This Amendment
No. 3 and Limited Waiver may be executed in any number of counterparts, all of
which taken together shall constitute one and the same amendatory instrument and
any of the parties hereto may execute this Amendment No. 3 and Limited Waiver by
signing any such counterpart. This Amendment No. 3 and Limited Waiver shall be
governed by, and construed in accordance with, the law of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3
and Limited Waiver to be duly executed and delivered as of the day and year
first above written.
EMPIRE RESOURCES, INC.
By /s/ Sandra R. Kahn
---------------------------
Sandra R. Kahn
Vice President
JPMORGAN CHASE BANK,
as Agent
By /s/ Thomas S. Drake
---------------------------
Thomas S. Drake
Vice President
BROWN BROTHERS HARRIMAN & CO.
By /s/ Michael Vellucci
--------------------------
Name: Michael Vellucci
Title: Vice President
Address for Notices:
140 Broadway
New York, NY 10005
Attention: Michael Vellucci
Fax: 212-493-8998
E-mail: Michael.vellucci@bbh.com
CITICORP USA, INC.
By /s/ Mitch Palminteri
---------------------------
Name:Mitch Palminteri
Title:Vice President
JPMORGAN CHASE BANK
By s/s Thomas S. Drake
---------------------------
Thomas S. Drake
Vice President