Exhibit 10.24

 

SEVENTH AMENDMENT

TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

This SEVENTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this
“Amendment”) is dated as of October 20, 2003, and effective as of September 29,
2003, and entered into by and between UNIVERSAL STAINLESS & ALLOY PRODUCTS,
INC., a corporation organized and existing under the laws of the state of
Delaware (the “Borrower”), and PNC BANK, NATIONAL ASSOCIATION (the “Bank”), and
amends that certain Second Amended and Restated Credit Agreement dated as of
January 30, 1998, by and between the Borrower and the Bank (the Second Amended
and Restated Credit Agreement, as amended prior to the date hereof, is
hereinafter referred to as the “Existing Credit Agreement”).

 

W I T N E S S E T H :

 

WHEREAS, the Borrower and the Bank entered into the Existing Credit Agreement;
and

 

WHEREAS, upon the request of the Borrower, the Bank has agreed to modify the
Existing Credit Agreement, all as more particularly set forth herein.

 

NOW THEREFORE, in consideration of the foregoing premises, the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and with the intent to
be legally bound hereby, the parties hereto agree as follows:

 

ARTICLE I

AMENDMENTS TO EXISTING CREDIT AGREEMENT

 

Section 1.01 Amendments to Section 1.1 of the Existing Credit Agreement.

 

(a) The following defined terms and the definitions therefor are hereby added to
Section 1.1 of the Existing Credit Agreement and inserted in correct
alphabetical order:

 

Account Debtor: Any Person who is or may become obligated under or with respect
to an Account.

 

Borrowing Base: The sum of (i) 70% of the book value of the Borrower’s and
Dunkirk’s Qualified Accounts, plus (ii) 40% of Value of the Borrower’s and
Dunkirk’s Qualified Inventory; provided, however that the principal amount of
all credit extended hereunder against Qualified Inventory shall not exceed at
any time the lesser of (x) $3,250,000 plus 50% of the outstanding Term Loan or
(y) 50% of the Borrowing Base. The advance percentages shown above may be
modified by the Bank from time to time in

 

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its sole discretion, as a result of the audit and appraisal described in Section
2.1a or otherwise. In addition, the Borrowing Base shall be reduced by the
amount then outstanding under the Borrower’s $15,000,000 Amended and Restated
Term Note dated December 31, 1998 (currently, approximately $4,400,000).

 

Borrowing Base Certificate: A borrowing base certificate substantially in the
form of Exhibit “A” to the Seventh Amendment which has been executed by an
Authorized Officer and delivered to the Bank.

 

Dunkirk: Dunkirk Specialty Steel, LLC, a Delaware limited liability company and
subsidiary of Borrower and Guarantor of the Indebtedness issued hereunder.

 

Outstanding Revolving Credit Amount: The sum of the aggregate principal amount
of outstanding Loans, plus the aggregate Stated Amounts of all outstanding
Letters of Credit, including any unreimbursed draws on Letters of Credit which
have not yet been converted to Loans.

 

Qualified Account: Any Account of the Borrower or Dunkirk which the Bank, in its
sole discretion exercised in good faith, determines to have met all of the
following requirements, which requirements may be revised by the Bank in its
sole discretion exercised in good faith from time to time after giving prior
notice to the Borrower:

 

(i) The Account represents a complete bona fide transaction for goods sold or
services rendered (including conversion services rendered but excluding any
amounts in the nature of a service charge added to the amount due on an invoice
because the invoice has not been paid when due) which requires no further act
under any circumstances on the part of the Borrower or Dunkirk to make such
Account payable by the Account Debtor;

 

(ii) The Account arises from an arm’s-length transaction in the ordinary course
of the Borrower’s or Dunkirk’s business between the Borrower or Dunkirk and an
Account Debtor which is not (A) an Affiliate or Subsidiary of the Borrower or
Dunkirk, (B) a Person controlled by a Subsidiary or Affiliate of the Borrower or
Dunkirk, (C) an officer, director, stockholder or employee of the Borrower or
Dunkirk or (D) a member of the family of an officer, director, stockholder or
employee of the Borrower or Dunkirk;

 

(iii) The Account shall not (A) be or have been unpaid more than 120 days from
the original invoice date, or (B) be payable by an Account Debtor (1) more than
50% of whose Accounts (in Dollar value) are not deemed Qualified Accounts or (2)
whose Accounts constitute 15% or more of the aggregate amount of all outstanding
Accounts unless such Account Debtor is specifically identified on Schedule 5.2
hereto. Such Schedule 5.2 may be revised from time to time in accordance with
Section 5.2i hereof. In no event shall Accounts of any Account Debtor listed on
Schedule 5.2 exceed 40% or more of the aggregate amount of all outstanding
Accounts. When applying the tests set forth in clause (2)

 

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immediately above and the immediately preceding sentence, only those Accounts
which exceed by Dollar value the respective percentage thresholds shall not be
Qualified Accounts;

 

(iv) The goods the sale of which gave rise to the Account (A) were shipped or
delivered or provided to the Account Debtor on an absolute sale basis and not on
a consignment sale basis, a guaranteed sale basis, a sale-or-return basis or on
the basis of any other similar understanding or (B) were provided to the Account
Debtor on a bill and hold basis; provided that the aggregate of all such bill
and hold Accounts which shall be Qualified Accounts shall not at any time exceed
$1,000,000, and no part of such goods has been returned or rejected;

 

(v) The Account is not evidenced by Chattel Paper or an Instrument of any kind
and has not been reduced to judgment;

 

(vi) The Account Debtor with respect to the Account (A) is Solvent, (B) is not
the subject of any bankruptcy or insolvency proceedings of any kind or of any
other proceeding or action, threatened or pending, which might have a materially
adverse effect on his or its business, operations or properties, (C) has not
made an assignment for the benefit of his or its creditors, (D) has not
suspended business, dissolved or consented to or suffered the appointment of a
receiver, trustee, liquidator or custodian for him or it or for all or a
significant portion of his or its assets or affairs and (E) is not, in the sole
discretion of the Bank exercised in good faith, deemed ineligible for credit for
other reasons (including, without limitation, unsatisfactory past experience of
the Borrower or Dunkirk or the Bank with such Account Debtor or the
unsatisfactory reputation of such Account Debtor);

 

(vii) The Account Debtor is not located outside of the continental United States
of America, unless the Borrower or Dunkirk has delivered to the Bank any or all
letters of credit and/or cash against documents relating to such Account or
evidence of insurance, as requested by the Bank and deemed adequate and
acceptable by the Bank;

 

(viii) The Account Debtor is not the government of the United States of America,
or any Governmental Authority thereof, unless the Assignment of Claims Act of
1940 (31 U.S.C §3727 et seq.), as amended from time to time, or applicable
similar or successor legislation, has been fully complied with to the Bank’s
satisfaction so that the Bank has a valid, perfection first priority lien and
security interest in such Account;

 

(ix) The Account is a valid, legally enforceable obligation of the Account
Debtor with respect thereto and is not subject to any dispute, condition,
contingency, offset, recoupment, reduction, claim for credit, allowance,
adjustment, counterclaim or defense on the part of such Account Debtor, and the
Account is not otherwise subject to any right of setoff to the extent of any of
the

 

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foregoing, and no facts or circumstances exist which may provide a basis for any
of the foregoing; provided, however, to the extent that such Account is subject
to an allowance adjustment or reduction in an amount that does not exceed 35% of
such Account, such Account shall be a Qualified Account in an amount equal to
such Account, less such allowance, adjustment or reduction;

 

(x) The Account is subject to a valid, perfected first priority lien and
security interest in favor of the Bank and is not subject to any other
Encumbrance whatsoever;

 

(xi) The Account is evidenced by an invoice or other documentation in form
acceptable to the Bank and arises from a contract which is in form and substance
satisfactory to the Bank;

 

(xii) The Borrower and Dunkirk has observed and complied with all Governmental
Rules of the state in which the Account Debtor is located or the Account is
payable, which laws, if not observed and complied with, would deny to the
Borrower or Dunkirk access to the courts of such state;

 

(xiii) The Account is not subject to any provision prohibiting its assignment or
requiring notice of or consent to such assignment;

 

(xiv) The goods or services giving rise to the Account were not, at the time of
sale thereof, subject to any Encumbrance except a first priority lien and
security interest in favor of the Bank;

 

(xv) The Account is payable in freely transferable Dollars;

 

(xvi) The Borrower or Dunkirk has not made any agreement with the Account Debtor
for any deduction therefrom, except agreements relating to (A) discounts or
allowances which are made in the ordinary course of business for prompt payment
and which discounts or allowances are reflected in the calculation of the face
value of each invoice related to such Account and (B) discounts or allowances
permitted by item (ix) of this definition;

 

(xvii) The Borrower or Dunkirk has not made any agreement with the Account
Debtor to extend the time of payment of such Account;

 

(xviii) The Account does not arise from a retail sale of goods to a Person who
is purchasing the same primarily for personal, family or household purposes;

 

(xix) No covenant, representation or warranty contained in this Agreement or any
of the other Loan Documents with respect to such Account has been breached; and

 

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(xx) The Account would not be disqualified for any other reason generally
accepted in the commercial finance business.

 

In addition to the foregoing requirements, Accounts of any Account Debtor which
are otherwise Qualified Accounts shall be reduced to the extent of any accounts
payable (including, without limitation, the Bank’s good faith estimate of any
contingent liabilities) owing by the Borrower or Dunkirk to such Account Debtor,
which accounts payable are known as “contras”.

 

Qualified Inventory: Any Inventory of the Borrower or Dunkirk which the Bank, in
its sole discretion exercised in good faith, determines to have met all of the
following requirements, which requirements may be revised by the Bank in its
sole discretion exercised in good faith from time to time after giving prior
notice to the Borrower:

 

(i) The Inventory is either (A) finished goods, (B) work-in-process, or (C) raw
materials, including but not limited to scrap metals and alloys; but excluding
in all cases Inventory which (1) consists of steel rolls or ingot molds used in
the processing of steel; or (2) has been shipped, delivered, provided to,
purchased or sold by the Borrower or Dunkirk on a bill-and-hold basis, a
consignment sale basis, a guaranteed sale basis, a sale-or-return basis, or any
other similar basis or understanding other than an absolute sale;

 

(ii) The Inventory (A) is located in the continental United States at the
premises listed on Schedule 1 to the Security Agreement and, for each of such
premises which are leased by the Borrower or Dunkirk as tenant, a duly executed
Landlord’s Waiver satisfactory to the Bank has been executed by the landlord,
delivered to the Bank and (B) is not in transit or, if the Inventory is in
transit, the Bank has determined in its sole discretion that the Bank has a
valid, perfected first priority lien and security interest in such Inventory;
provided, however, that in no event will the Bank advance in excess of
$1,000,000 at any one time outstanding on Inventory in transit;

 

(iii) Except as set forth in Schedule 1 to the Security Agreement, the Inventory
is not stored with a third party processor, bailee, warehouseman, consignee or
similar party;

 

(iv) The Inventory is not packaging material or supplies, unless such materials
or supplies have already been incorporated into the finished goods;

 

(v) The Inventory is subject to a valid, perfected first priority lien and
security interest in favor of the Bank and is not subject to any other
Encumbrance whatsoever;

 

(vi) The Inventory meets all applicable standards imposed by any Governmental
Authority;

 

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(vii) None of the Inventory, the manufacturing of which is subject to such laws,
has been manufactured in violation of any Federal minimum wage or overtime laws,
including without limitation the Fair Labor Standards Act, 29 U.S.C. §215(a)(1)
or any similar or successor legislation;

 

(viii) No covenant, representation or warranty contained in this Agreement or
any of the other Loan Documents with respect to such Inventory has been
breached; and

 

(ix) The Inventory is not, and should not be, disqualified for any other reason
generally accepted in the commercial finance business.

 

Seventh Amendment: The Seventh Amendment to Second Amended and Restated Credit
Agreement entered into by and between the Borrower and the Bank and dated as of
October 20, 2003, and effective nunc pro tunc as of September 29, 2003.

 

Seventh Amendment Effective Date: This term shall have the meaning given to it
in Section 3.02 of the Seventh Amendment.

 

Value: When used in the context of the Borrower’s and Dunkirk’s Qualified
Inventory, shall mean the lower of cost (determined on a first-in-first-out
basis) or market.

 

(b) The following defined terms and the definitions therefor are hereby amended
and restated in their entirety as follows:

 

Consolidated Total Indebtedness: The Indebtedness of the Borrower and its
Subsidiaries on a Consolidated basis, net of excess cash balances, all as
determined in accordance with GAAP consistently applied. Any reference herein to
the term “Consolidated Indebtedness” shall have the same meaning as
“Consolidated Total Indebtedness” set forth herein.

 

Revolving Credit Commitment: The obligation of the Bank to make available to the
Borrower an amount which, when added to the aggregate Stated Amounts of all
Letters of Credit, (including any unreimbursed draws on Letters of Credit which
have not yet been converted to Loans) does not exceed the lesser of (i)
$6,500,000 or (ii) the Borrowing Base.

 

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Section 1.02 Amendment to Subsection 2.1 of the Existing Credit Agreement.
Subsections 2.1a and 2.1b of the Existing Credit Agreement are hereby amended
and restated to read as follows:

 

2.1 Revolving Credit Commitment.

 

2.1a Loans. The Bank agrees, subject to the terms and conditions hereof and
relying upon the representations and warranties herein set forth, that the
Borrower shall have the right to borrow, repay and reborrow, from the date
hereof until the Revolving Credit Termination Date, an aggregate principal
amount which, together with the aggregate Stated Amounts of all outstanding
Letters of Credit, including any unreimbursed draws thereunder which have not
been converted to Loans, shall not exceed the lesser of $6,500,000, or the
Borrowing Base in the aggregate at any one time outstanding. In the event of any
advance under the Revolving Credit Commitment, the Bank may, at its option,
conduct an audit and appraisal of the Borrower’s Accounts and Inventory (at the
sole cost of the Borrower) to evidence compliance with the Borrowing Base and
modify, in the Bank’s sole discretion, the advance rates for borrowing against
Qualified Accounts, Qualified Inventory, or both.

 

2.1b Mandatory and Voluntary Reductions of Revolving Credit Commitment.

 

(i) Borrowing Base. In the event that at any time either the Bank’s Loan Account
or the Borrowing Base Certificate (in the form of Exhibit “A” to the Seventh
Amendment) most recently delivered by the Borrower to the Bank shows that the
Outstanding Revolving Credit Amount exceeds the Borrowing Base, the Borrower
shall repay, simultaneously with the delivery of any such Borrowing Base
Certificate to the Bank or upon demand by the Bank, whichever is earlier, an
amount which is sufficient to reduce the aggregate outstanding principal amount
of Loans so that, after such payment, the Outstanding Revolving Credit Amount
does not exceed the Borrowing Base.

 

(ii) Voluntary Reductions. Upon at least ten Business Days’ prior written notice
to the Bank, the Borrower may from time to time permanently reduce the Revolving
Credit Commitment, and, to the extent of such reduction, the portion of the
Revolving Credit Commitment shall no longer be available for borrowing.
Simultaneously with any such voluntary permanent reduction, the Borrower shall
make a payment of the outstanding Loans equal to the excess, if any, of (A) the
Outstanding Revolving Credit Amount over (B) the lesser of (i) the Revolving
Credit Commitment, as so reduced, and (ii) the Borrowing Base. Each such
reduction shall be in a minimum principal amount of $500,000 or, if in excess of
$500,000, in integral multiples of $250,000. Notice of a reduction, once given,
shall be irrevocable.

 

(iii) Application of Payments. Any and all Revolving Credit Commitment
reductions or mandatory or voluntary prepayments made pursuant to any particular
item of this Section 2.1b shall be made in addition to, and not in lieu of, any
and all Revolving Credit Commitment reductions and mandatory and voluntary
prepayments required to be made pursuant to any other item of this Section 2.1b.
All such mandatory and voluntary prepayments shall be

 

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accompanied by all accrued and unpaid interest thereon, and all amounts due
pursuant to Section 2.4, if any.

 

Section 1.04 Amendment to Subsection 5.2 of the Existing Credit Agreement.
Subsection 5.2 of the Existing Credit Agreement is hereby amended to insert new
Subsections 5.2h, 5.1i, 5.2j and 5.2k as follows:

 

5.2h Borrowing Base Certificate. On the Seventh Amendment Closing Date and
thereafter no later than the fifteenth day of each month, the Borrower shall
deliver to the Bank a completed Borrowing Base Certificate executed by an
Authorized Officer and containing such additional information as may be
requested by the Bank from time to time, for the month just ended.

 

5.2i Receivables and Payables Aging Reports. Semiannually or more frequently as
may be requested by the Bank from time to time, within 15 days thereof, a report
detailing the aging of the Borrower’s accounts payable and accounts receivable
for such month, in form and substance satisfactory to the Bank.

 

5.2j Inventory Reports. Semiannually or more frequently as may be requested by
the Bank from time to time, within 15 days thereof, a report detailing the Value
and turnover of the Borrower’s Inventory for such month, in form and substance
satisfactory to the Bank.

 

5.2k Schedule of Major Account Debtors. On or prior to the Seventh Amendment
Closing the Borrower shall submit to the Bank for the Bank’s approval, which
approval shall not be unreasonably withheld, a listing of major Account Debtors.
Schedule 5.2 attached to the Seventh Amendment hereto identifies major Account
Debtors as of the Seventh Amendment Closing Date. The Borrower may revise and
update Schedule 5.2 from time to time by submitting to the Bank for the Bank’s
approval, which approval shall not be unreasonably withheld, a revised listing
of the major Account Debtors.

 

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Section 1.05 Amendment to Subsection 6.4(ii) of the Existing Credit Agreement.
Subsection 6.4(ii) of the Existing Credit Agreement is hereby amended and
restated to read as follows:

 

(ii) Minimum Consolidated Tangible Net Worth. At all times during the term
hereof, the Borrower’s Consolidated Tangible Net Worth shall not be less than:

 

Period

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Minimum Consolidated

Tangible Net Worth

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From the Closing Date to and including December 30, 2003    $45,000,000 From
December 31, 2003 to and including March 30, 2004    An amount equal to the sum
of (a) the Minimum Consolidated Tangible Net Worth as set forth immediately
above plus (b) 50% of Consolidated Net Income (if positive) for the Fiscal
Quarter ending December 31, 2003 From March 31, 2004 through June 30, 2004 and
for each successive fiscal period thereafter, each such fiscal period beginning
with the last date of a Fiscal Quarter and continuing to the penultimate day of
the next Fiscal Quarter.    An amount equal to the sum of (a) the required
Minimum Consolidated Tangible Net Worth for the immediately preceding period
plus (b) 50% of Consolidated Net Income (if positive) earned during the Fiscal
Quarter ending on the first day of the period being tested.

 

Section 1.06 Amendment to Subsection 6.4(iii) of the Existing Credit Agreement.
Subsection 6.4(iii) of the Existing Credit Agreement is hereby amended and
restated to read as follows:

 

(iii) Leverage. Beginning with the Fiscal Quarter ending June 30, 2005, and as
at the end of each Fiscal Quarter thereafter, the Borrower’s ratio of
Consolidated Total Indebtedness to EBITDA shall not exceed 2.50:1.00.

 

Section 1.07 Amendment to Subsection 6.4(iv) of the Existing Credit Agreement.
Subsection 6.4(iv) of the Existing Credit Agreement is hereby amended and
restated to read as follows:

 

(iv) Consolidated Debt Service Ratio. Beginning with the Fiscal Quarter ending
June 30, 2005, and as at the end of each Fiscal Quarter thereafter, the ratio of
the Borrower’s EBITDA to Consolidated Debt Service shall not be less than
2.0:1.0.

 

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Section 1.08 Amendment to Section 6.4 of the Existing Credit Agreement. Section
6.4 of the Existing Credit Agreement is hereby amended by amending and restating
Section 6.4(v) in its entirety, which shall read as follows:

 

(v) Minimum EBITDA. Beginning with the Fiscal Quarter ending September 30, 2003,
and as at the end of each Fiscal Quarter thereafter, the Borrower shall maintain
a minimum EBITDA of at least $100,000.

 

Section 1.09 No Other Amendments. The amendments to the Existing Credit
Agreement set forth herein do not either implicitly or explicitly alter, waive
or amend, except as expressly provided in this Amendment, the provisions of the
Existing Credit Agreement. The amendments set forth herein do not waive, now or
in the future, compliance with any other covenant, term or condition to be
performed or complied with nor do they impair any rights or remedies of the Bank
under the Existing Credit Agreement with respect to any such violation. Nothing
in this Amendment shall be deemed or construed to be a waiver or release of, or
a limitation upon, the Bank’s exercise of any of its rights and remedies under
the Existing Credit Agreement or any other document or instrument delivered in
connection therewith, whether arising as a consequence of any Events of Default
which may now exist or otherwise, and all such rights and remedies are hereby
expressly reserved.

 

ARTICLE II

BORROWER’S SUPPLEMENTAL REPRESENTATIONS

 

Section 2.01 Incorporation by Reference. As an inducement to the Bank to enter
into this Amendment, (i) the Borrower hereby repeats and remakes herein, for the
benefit of the Bank, the representations and warranties made by the Borrower in
Sections 4.1 through 4.23, inclusive, of the Existing Credit Agreement, as
amended hereby, except that for purposes hereof such representations and
warranties shall be deemed to extend to and cover this Amendment and are remade
as of the Seventh Amendment Effective Date, and (ii) the Borrower hereby
represents and warrants that on and as the Seventh Amendment Effective Date that
no Default or Event of Default has occurred and is continuing.

 

ARTICLE III

CONDITIONS PRECEDENT

 

Section 3.01 Conditions Precedent. Each of the following shall be a condition
precedent to the effectiveness of this Amendment:

 

(a) The Bank shall have received, on or before the Seventh Amendment Effective
Date, the following items, each, unless otherwise indicated, dated on or before
the Seventh Amendment Effective Date and in form and substance satisfactory to
the Bank:

 

(i) A duly executed counterpart original of this Amendment;

 

(ii) A certificate from the Secretary of the Borrower certifying that the
Articles of Incorporation and Bylaws of the Borrower previously delivered to the
Bank are true, complete, and correct;

 

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(iii) A certificate from the Secretary of the Borrower certifying the corporate
resolutions of the Borrower authorizing the execution and delivery of this
Amendment and the officers of the Borrower authorized to execute and deliver
this Amendment on behalf of the Borrower; and

 

(iv) A Guaranty and Security Agreement duly executed by Dunkirk, and such other
documents, certificates and agreements relating to Dunkirk as the Bank shall
reasonably require in its sole discretion.

 

(v) Such other instruments, documents and opinions of counsel as the Bank shall
reasonably require, all of which shall be satisfactory in form and content to
the Bank

 

(b) The following statements shall be true and correct on the Sixth Amendment
Effective Date, and the Borrower shall deliver to the Bank a certificate
certifying that:

 

(i) after giving effect to this Seventh Amendment, the representations and
warranties made pursuant to this Amendment and in the other Loan Documents, as
amended hereby, are true and correct on and as of the Seventh Amendment
Effective Date as though made on and as of such date;

 

(ii) no petition by or against the Borrower or any Subsidiary of the Borrower
has at any time been filed under the United States Bankruptcy Code or under any
similar act;

 

(iii) after giving effect to this Seventh Amendment, no Event of Default or
event which with the giving of notice, the passage of time or both would become
an Event of Default has occurred and is continuing, or would result from the
execution of or performance under this Amendment;

 

(iv) after giving effect to this Seventh Amendment, no material adverse change
in the properties, business, operations, financial condition or prospects of the
Borrower has occurred which has not been disclosed in writing to the Bank; and

 

(v) after giving effect to this Seventh Amendment, the Borrower has in all
material respects performed all agreements, covenants and conditions required to
be performed on or prior to the date hereof under the Existing Credit Agreement
and the other Loan Documents.

 

Section 3.02 Seventh Amendment Effective Date. Upon completion of the conditions
set forth in Section 3.01 of this Seventh Amendment, the effective date of this
Seventh Amendment is deemed to be September 29, 2003, nunc pro tunc.

 

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ARTICLE IV

GENERAL PROVISIONS

 

Section 4.01 Ratification of Terms. Except as expressly amended by this
Amendment, the Existing Credit Agreement and each and every representation,
warranty, covenant, term and condition contained therein is specifically
ratified and confirmed. The Borrower hereby confirms that any collateral for the
Obligations, including but not limited to liens, Encumbrances, security
interests, mortgages and pledges granted by the Borrower or third parties, shall
continue unimpaired and in full force and effect. THE BORROWER EXPRESSLY
RATIFIES AND CONFIRMS THE CONFESSION OF JUDGMENT AND WAIVER OF JURY TRIAL
PROVISIONS CONTAINED IN THE EXISTING CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

 

Section 4.02 References. All notices, communications, agreements, certificates,
documents or other instruments executed and delivered after the execution and
delivery of this Amendment in connection with the Existing Credit Agreement, any
of the other Loan Documents or the transactions contemplated thereby may refer
to the Existing Credit Agreement without making specific reference to this
Amendment, but nevertheless all such references shall include this Amendment
unless the context requires otherwise. From and after the Sixth Amendment
Effective Date, all references in the Existing Credit Agreement and each of the
other Loan Documents to the Existing Credit Agreement shall be deemed to be
references to the Existing Credit Agreement, as amended hereby.

 

Section 4.03 Incorporation Into Existing Credit Agreement. This Amendment is
deemed incorporated into the Existing Credit Agreement. To the extent that any
term or provision of this Amendment is or may be deemed expressly inconsistent
with any term or provision of the Existing Credit Agreement, the terms and
provisions hereof shall control.

 

Section 4.04 Counterparts. This Amendment may be executed in different
counterparts, each of which when executed by the Borrower and the Bank shall be
regarded as an original, and all such counterparts shall constitute one
amendment.

 

Section 4.05 Capitalized Terms. Except for proper nouns and as otherwise defined
herein, capitalized terms used herein as defined terms shall have the same
meanings herein as are ascribed to them in the Existing Credit Agreement, as
amended hereby.

 

Section 4.06 Taxes. The Borrower shall pay any and all stamp and other taxes and
fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Amendment and such other documents and
instruments as are delivered in connection herewith and agrees to save the Bank
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes and fees.

 

Section 4.07 Costs and Expenses. The Borrower will pay all costs and expenses of
the Bank (including, without limitation, the reasonable fees and the
disbursements of the Bank’s counsel, Tucker Arensberg, P.C.) in connection with
the preparation, execution and delivery of this Amendment and the other
documents, instruments and certificates delivered in connection herewith.

 

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Section 4.08 GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THE PROVISIONS THEREOF REGARDING
CONFLICTS OF LAW.

 

Section 4.09 Headings. The headings of the sections in this Amendment are for
purposes of reference only and shall not be deemed to be a part hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto, with the intent to be legally bound
hereby, have caused this Seventh Amendment to Second Amended and Restated Credit
Agreement to be duly executed by their respective proper and duly authorized
officers as a document under seal, as of October 20, 2003, and effective nunc
pro tunc as of September 29, 2003.

 

ATTEST:

      UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

 

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      By:  

 

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(SEAL)

Name:

  Paul A. McGrath      

Name:

  Richard M. Ubinger    

Title:

  Secretary      

Title:

  Chief Financial Officer             PNC BANK, NATIONAL ASSOCIATION         By:
 

 

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Name:

  David B. Gookin                

Title:

  Vice President    

 

- 14 -

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EXHIBIT A

 

Borrowing Base Certificate

 

- 15 -

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SCHEDULE 5.2

 

Major Account Debtors

 

1. Carpenter Technology Corporation, and its subsidiaries

 

2. General Electric