Exhibit 10.7
FIRST AMENDMENT TO CREDIT AGREEMENT
     This First Amendment to Credit Agreement is dated May 29, 2009, by and
among ATI Funding Corporation, a Delaware corporation (“ATI Funding”), TDY
Holdings, LLC, a Delaware limited liability company (“TDYH”) (ATI Funding and
TDYH are each, a “Borrower” and collectively, the “Borrowers”), the Guarantors
(as defined in the Credit Agreement (as hereinafter defined)) party hereto, the
Lenders (as hereinafter defined) party hereto and PNC Bank, National Association
(“PNC Bank”) as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”) (the “First Amendment”).
W I T N E S S E T H:
     WHEREAS, the Borrowers, the Guarantors, PNC Bank and various other
financial institutions party thereto (PNC Bank and such other financial
institutions are each, a “Lender” and collectively, the “Lenders”) and the
Administrative Agent entered into that certain Credit Agreement, dated July 31,
2007 (as amended, restated, modified or supplemented from time to time, the
“Credit Agreement”); and
     WHEREAS, the Borrowers and the Guarantors desire to amend certain
provisions of the Credit Agreement and the Lenders and the Administrative Agent
shall permit such amendments pursuant to the terms and conditions set forth
herein.
     NOW, THEREFORE, in consideration of the premises contained herein and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:
     1. All capitalized terms used herein that are defined in the Credit
Agreement shall have the same meaning herein as in the Credit Agreement unless
the context clearly indicates otherwise.
     2. Section 1.1 of the Credit Agreement is hereby amended to delete
therefrom the following definition:
     Leverage Ratio (Pricing)
     3. Section 1.1 of the Credit Agreement is hereby amended by restating the
following definitions in their entirety as set forth below:
     Base Rate shall mean, for any day, a rate per annum equal to the highest of
(i) the Prime Rate in effect on such day, (ii) the Federal Funds Open Rate in
effect on such day plus one half of one percent (0.50%) and (iii) the Daily
LIBOR Rate plus one percent (1.00%).
     Consolidated EBIT for any period of determination shall mean the sum of
(i) net income (or loss) (excluding extraordinary gains or losses including,
without limitation, those items created by

 

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mandated changes in accounting treatment), plus (ii) net interest expense,
(iii) plus all charges against or minus credits to income for federal, state and
local taxes, (iv) plus or minus, as applicable, any other non-cash non-recurring
items of gain or loss with respect to such fiscal period not already excluded
hereunder, (v) plus or minus, as applicable, any non-cash pension expense or
income, provided, however, that voluntary pension contributions shall not be
included in calculating pension expense or income, in each case of ATI and its
Subsidiaries for such period determined and consolidated in accordance with
GAAP.
     Consolidated Net Indebtedness shall mean (a) Consolidated Total
Indebtedness minus (b) (i) cash that is not subject to a Lien, plus
(ii) Permitted Investments that are not subject to a Lien, minus (iii) Fifty
Million and 00/100 Dollars ($50,000,000.00), in each case determined and
consolidated for ATI and its Subsidiaries in accordance with GAAP.
     Leverage Ratio shall mean as of the date of determination, the ratio of
(A) Consolidated Net Indebtedness on such date to (B) Consolidated EBITDA
(i) for the four (4) fiscal quarters ending if such date is a fiscal quarter end
or (ii) for the four (4) fiscal quarters most recently ended if such date is not
a fiscal quarter end.
     Loan Documents shall mean this Agreement, the Administrative Agent’s
Letter, the First Amendment Administrative Agent’s Letter, the Guaranty
Agreements, the Intercompany Subordination Agreement, the Notes, the Letters of
Credit and any other instruments, certificates or documents delivered in
connection herewith or therewith, as the same may be amended, modified or
supplemented from time to time in accordance herewith or therewith, and Loan
Document shall mean any of the Loan Documents.
     4. Section 1.2 of the Credit Agreement is hereby further amended by
inserting the following defined terms in appropriate alphabetical order:
     Daily Libor Rate shall mean, for any day, the rate per annum determined by
the Administrative Agent by dividing (x) the Published Rate by (y) a number
equal to 1.00 minus the Libor Rate Reserve Percentage.
     First Amendment Administrative Agent’s Letter shall mean that certain
Administrative Agent’s fee letter dated the First Amendment Closing Date by and
between the Borrowers, the Administrative Agent and PNC Capital Markets LLC, a
Pennsylvania limited liability company.

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     First Amendment Closing Date shall mean May 29, 2009.
     Prime Rate shall mean the base commercial lending rate of PNC Bank as
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by PNC Bank as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC Bank to any particular class or category of customers of
PNC Bank.
     Published Rate shall mean, the rate of interest published each Business Day
in The Wall Street Journal “Money Rates” listing under the caption “London
Interbank Offered Rates” for a one (1) month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the
eurodollar rate for a one (1) month period as published in another publication
determined by the Administrative Agent).
     5. The references to “three hundred sixty five (365) or three hundred sixty
six (366) days, as the case may be,” in Section 3.1.1(i) of the Credit Agreement
and Section 3.1.2 of the Credit Agreement are hereby deleted in their entirety
and in their stead are inserted the following: “three hundred sixty (360) days”.
     6. Schedule 1.1(A) to the Credit Agreement is hereby deleted in its
entirety and in its stead is inserted Schedule 1.1(A) attached hereto.
     7. Exhibit 7.3.3 to the Credit Agreement is hereby deleted in its entirety
and in its stead is inserted Exhibit 7.3.3 attached hereto.
     8. The provisions of Sections 2 through 7 of this First Amendment shall not
become effective until the Administrative Agent has received the following
items, each in form and substance acceptable to the Administrative Agent and its
counsel:
     (a) this First Amendment, duly executed by each of the Loan Parties and the
Required Lenders;
     (b) the documents listed in the Preliminary Closing Agenda set forth on
Exhibit A attached hereto and made a part hereof and evidence reasonably
satisfactory to the Administrative Agent that all conditions set forth in such
Preliminary Closing Agenda have been satisfied;
     (c) payment of all fees and expenses owed to the Lenders, the
Administrative Agent, and the Administrative Agent’s counsel in connection with
this First Amendment; and

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     (d) such other documents as may be reasonably requested by the
Administrative Agent.
     9. Each Loan Party hereby reconfirms and reaffirms all representations and
warranties, agreements and covenants made by it pursuant to the terms and
conditions of the Credit Agreement, except as such representations and
warranties, agreements and covenants may have heretofore been amended, modified
or waived in writing in accordance with the Credit Agreement.
     10. Each Loan Party acknowledges and agrees that each and every document,
instrument or agreement, which at any time has secured the Obligations
including, without limitation, the Guaranty Agreements, hereby continues to
secure the Obligations.
     11. Each Loan Party hereby represents and warrants to the Lenders and the
Administrative Agent that (i) such Loan Party has the legal power and authority
to execute and deliver this First Amendment, (ii) the officers of such Loan
Party executing this First Amendment have been duly authorized to execute and
deliver the same and bind such Loan Party with respect to the provisions hereof,
(iii) the execution and delivery hereof by such Loan Party and the performance
and observance by such Loan Party of the provisions hereof and of the Credit
Agreement and all documents executed or to be executed therewith, do not violate
or conflict with the organizational agreements of such Loan Party or any law
applicable to such Loan Party or result in a breach of any provision of or
constitute a default under any other agreement, instrument or document binding
upon or enforceable against such Loan Party, and (iv) this First Amendment, the
Credit Agreement and the documents executed or to be executed by such Loan Party
in connection herewith or therewith constitute valid and binding obligations of
such Loan Party in every respect, enforceable in accordance with their
respective terms.
     12. Each Loan Party represents and warrants that (i) no Event of Default
exists under the Credit Agreement, nor will any occur as a result of the
execution and delivery of this First Amendment or the performance or observance
of any provision hereof, (ii) the schedules attached to and made a part of the
Credit Agreement, are true and correct in all material respects as of the date
hereof, except as such schedules may have heretofore been amended or modified or
updated in writing in accordance with the Credit Agreement, and (iii) it
presently has no known claims or actions of any kind at law or in equity against
any Lender or the Administrative Agent arising out of or in any way relating to
the Credit Agreement or the other Loan Documents.
     13. Each reference to the Credit Agreement that is made in the Credit
Agreement or any other document executed or to be executed in connection
therewith shall hereafter be construed as a reference to the Credit Agreement as
amended hereby.
     14. The agreements contained in this First Amendment are limited to the
specific agreements made herein. Except as amended hereby, all of the terms and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect. This First Amendment amends the Credit Agreement and is
not a novation thereof.

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     15. This First Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts each of which, when so
executed, shall be deemed to be an original, but all such counterparts shall
constitute but one and the same instrument.
     16. This First Amendment shall be governed by, and shall be construed and
enforced in accordance with, the Laws of the Commonwealth of Pennsylvania
without regard to the principles of the conflicts of law thereof. Each Loan
Party hereby consents to the jurisdiction and venue of the Court of Common Pleas
of Allegheny County, Pennsylvania and the United States District Court for the
Western District of Pennsylvania with respect to any suit arising out of or
mentioning this First Amendment.
[INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, and intending to be legally bound, the parties hereto
have caused this First Amendment to be duly executed by their duly authorized
officers the day and year first above written.

              BORROWERS:
 
        WITNESS:   ATI FUNDING CORPORATION
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   President
 
        WITNESS:   TDY HOLDINGS, LLC
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   President
 
            GUARANTORS:
 
        WITNESS:   ALLEGHENY TECHNOLOGIES INCORPORATED
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   OREGON METALLURGICAL CORPORATION
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   ALLEGHENY LUDLUM CORPORATION
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President

 

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          WITNESS:   ATI PROPERTIES, INC.
 
       
     /s/ Jamie Bishop
  By:   /s/ Patrick J. Viccaro
 
       
 
  Name:   Patrick J. Viccaro
 
  Title:   Vice President
 
        WITNESS:   TDY INDUSTRIES, INC.
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   ALC FUNDING CORPORATION
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   President
 
        WITNESS:   JEWEL ACQUISITION, LLC
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   JESSOP STEEL, LLC
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President

 

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          WITNESS:   INTERNATIONAL HEARTH MELTING, LLC
 
       
 
  By:   OREGON METALLURGICAL CORPORATION
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   ROME METALS, LLC
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   TI OREGON, INC.
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   TITANIUM WIRE CORPORATION
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   ATI CANADA HOLDINGS, INC.
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President

 

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          WITNESS:   ALLEGHENY TECHNOLOGIES INTERNATIONAL, INC.
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   AII INVESTMENT CORP.
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   President
 
        WITNESS:   ENVIRONMENTAL, INC.
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   AII ACQUISITION, LLC
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President
 
        WITNESS:   ATI TITANIUM LLC
 
       
     /s/ Jamie Bishop
  By:   /s/ Dale G. Reid
 
       
 
  Name:   Dale G. Reid
 
  Title:   Vice President

 

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              AGENTS AND LENDERS:
 
            PNC BANK, NATIONAL ASSOCIATION, as     a Lender and as
Administrative Agent
 
       
 
  By:   /s/ David B. Gookin
 
       
 
  Name:   David B. Gookin
 
  Title:   Senior Vice President
 
            CITIBANK, N.A., as a Lender and as Co-Syndication Agent
 
       
 
  By:   /s/ Raymond G. Dunning
 
       
 
  Name:   Raymond G. Dunning
 
  Title:   Vice President
 
            JPMORGAN CHASE BANK, N.A., as a
Lender and as Co-Syndication Agent
 
       
 
  By:   /s/ Pablo Ogarrio
 
       
 
  Name:   Pablo Ogarrio
 
  Title:   Vice President
 
            BANK OF AMERICA N.A., for itself, as
a Lender and as Co-Documentation Agent, and
as successor by merger to LASALLE BANK
NATIONAL ASSOCIATION, as a Lender
 
       
 
  By:   /s/ W. Thomas Barnett
 
       
 
  Name:   W. Thomas Barnett
 
  Title:   Senior Vice-President

 

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              BANK OF TOKYO-MITSUBISHI UFJ
TRUST COMPANY, as a Lender and as Co-Documentation Agent
 
       
 
  By:   /s/ Ravneet Mumick
 
       
 
  Name:   Ravneet Mumick
 
  Title:   Vice President
 
            CREDIT SUISSE, CAYMAN ISLANDS
BRANCH, as a Lender and as a Co-Managing
Agent
 
       
 
  By:   /s/ Alain Daoust
 
       
 
  Name:   Alain Daoust
 
  Title:   Director
 
       
 
  By:   /s/ Christopher Reo Day
 
       
 
  Name:   Christopher Reo Day
 
  Title:   Associate
 
            WACHOVIA BANK, NATIONAL
ASSOCIATION, as a Lender and as Co-Managing Agent
 
       
 
  By:   /s/ Patrick J. Kaufmann
 
       
 
  Name:   Patrick J. Kaufmann
 
  Title:   Senior Vice President
 
            NATIONAL CITY BANK, as a Lender and as Co-Managing Agent
 
       
 
  By:   /s/ Debra W. Riefner
 
       
 
  Name:   Debra W. Riefner
 
  Title:   Senior Vice-President

 

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              THE BANK OF NEW YORK, as a Lender and as Co-Managing Agent
 
       
 
  By:   /s/ William M. Feathers
 
       
 
  Name:   William M. Feathers
 
  Title:   Vice President
 
            MORGAN STANLEY BANK, as a Lender
 
       
 
  By:   /s/ Melissa James
 
       
 
  Name:   Melissa James
 
  Title:   Authorized Signatory
 
            HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender
 
       
 
  By:   /s/ Frank M. Eassa
 
       
 
  Name:   Frank M. Eassa
 
  Title:   Assistant Vice President

 

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SCHEDULE 1.1(A)
PRICING GRID—
VARIABLE PRICING AND FEES BASED ON LEVERAGE RATIO
(PRICING EXPRESSED IN BASIS POINTS)

                                                                      Revolving
                        Revolving   Credit         Commitment   Letter of  
Credit Base   LIBOR Rate Level   Leverage Ratio   Fee   Credit Fee   Rate Spread
  Spread I  
Less than or equal to 1.0 to 1.0
    25.0       150.0       50.0       150.0   II  
Greater than 1.0 to 1.0 but less than or equal to 1.5 to 1.0
    30.0       175.0       75.0       175.0   III  
Greater than 1.5 to 1.0 but less than or equal to 2.0 to 1.0
    37.5       200.0       100.0       200.0   IV  
Greater than 2.0 to 1.0
    50.0       225.0       200.0       225.0  

     For purposes of determining the Applicable Margin, the Applicable
Commitment Fee Rate and the Applicable Letter of Credit Fee Rate:
     (a) The Applicable Margin, the Applicable Commitment Fee Rate and the
Applicable Letter of Credit Fee Rate shall be based on Level I of the Pricing
Grid above as of the First Amendment Closing Date.
     (b) The Applicable Margin, the Applicable Commitment Fee Rate and the
Applicable Letter of Credit Fee Rate shall be recomputed as of the end of each
fiscal quarter ending after the First Amendment Closing Date based on the
Leverage Ratio as of such quarter end. Any increase or decrease in the
Applicable Margin, the Applicable Commitment Fee Rate or the Applicable Letter
of Credit Fee Rate computed as of a quarter end shall be effective on the date
on which the Compliance Certificate evidencing such computation is due to be
delivered under Section 7.3.3 [Compliance Certificate].
     (c) If, as a result of any restatement of or other adjustment to the
financial statements of ATI or for any other reason, ATI or the Lenders
determine that (i) the Leverage Ratio as calculated by ATI as of any applicable
date was inaccurate and (ii) a proper calculation of the Leverage Ratio would
have resulted in higher pricing for such period, the Borrowers shall immediately
and retroactively be obligated to pay to the Administrative Agent for the
account of the applicable Lenders, promptly on demand by the Administrative
Agent (or, after the occurrence of an actual or deemed entry of an order for
relief with respect to the Borrowers
SCHEDULE 1.1(A) — 1

 

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under the Bankruptcy Code of the United States, automatically and without
further action by the Administrative Agent, any Lender or the Issuing Lender),
an amount equal to the excess of the amount of interest and fees that should
have been paid for such period over the amount of interest and fees actually
paid for such period. This paragraph shall not limit the rights of the
Administrative Agent, any Lender or the Issuing Lender, as the case may be,
under Section 2.10 [Letter of Credit Subfacility] or 3.3 [Interest After
Default] or 8 [Default]. The Borrowers’ obligations under this paragraph shall
survive the termination of the Commitments and the repayment of all other
Obligations hereunder.
SCHEDULE 1.1(A) — 2

 

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EXHIBIT 7.3.3
FORM OF
QUARTERLY COMPLIANCE CERTIFICATE
                                                                     , 20__
PNC Bank, National Association, as Administrative Agent
One PNC Plaza
249 Fifth Avenue
Pittsburgh, PA 15222
Ladies and Gentlemen:
     I refer to the Credit Agreement, dated July 31, 2007, by and among ATI
Funding Corporation, a Delaware corporation (“ATI Funding”) and TDY Holdings,
LLC, a Delaware limited liability company (“TDYH”) (ATI Funding and TDYH are
each, a “Borrower” and collectively, the “Borrowers”), the Guarantors (as
defined in the Credit Agreement) party thereto, the Lenders (as defined in the
Credit Agreement) party thereto, and PNC Bank, National Association, in its
capacity as administrative agent for the Lenders (hereinafter referred to in
such capacity as the “Agent”), as amended by that certain First Amendment to
Credit Agreement, dated May ___, 2009, by and among the Borrowers, the
Guarantors, certain Lender party thereto and the Agent (as it may be further
amended, restated, modified or supplemented, the “Credit Agreement”). Unless
otherwise defined herein, terms defined in the Credit Agreement are used herein
with the same meanings.
     I,                                                             , [Chief
Executive Officer/Preside nt/Chief Financial Officer/Chief Accounting Officer]
in such capacity on behalf of Allegheny Technologies Incorporated, a Delaware
corporation (“ATI”), do hereby certify on behalf of ATI and each of the other
Loan Parties, as of the fiscal quarter/year ended
                                        , 20___ (the “Report Date”), as follows:
1. CHECK ONE:

  o   The audited annual financial statements of ATI and its Subsidiaries being
delivered to the Lenders with this Compliance Certificate are (a) true, complete
and correct, (b) present fairly the financial position of ATI and its
Subsidiaries and their results of operations and cash flows for the fiscal year
set forth above determined and consolidated for ATI and its Subsidiaries in
accordance with GAAP consistently applied and (c) comply with the reporting
requirements for such financial statements as set forth in Section 7.3.2 of the
Credit Agreement.

OR

  o   The quarterly financial statements of ATI and its Subsidiaries being
delivered to the Lender with this Compliance Certificate are (a) true, complete
and correct, (b) present fairly the financial position of ATI and its
Subsidiaries and

 

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PNC Bank, National Association, as Administrative Agent
Page 2

      their results of operations and cash flows for the fiscal quarter set
forth above determined and consolidated for ATI and its Subsidiaries in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and (c) comply with the reporting requirements for such financial
statements as set forth in Section 7.3.1 of the Credit Agreement.

2.   The representations and warranties of the Loan Parties contained in
Section 5 of the Credit Agreement and in each of the other Loan Documents to
which they are a party are true on and as of the date hereof (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties are true and correct in all
material respects on and as of the specific dates or times referred to therein).
The Loan Parties are in compliance with, and since the date of the previously
delivered Compliance Certificate have performed and complied with all covenants
and conditions contained in the Credit Agreement.

3.   In accordance with Section 5.2 [Updates to Schedules], attached hereto as
Exhibit A are updates to the schedules to the Credit Agreement (the “Updated
Schedules”). Notwithstanding the foregoing, the Loan Parties hereby acknowledge
and agree that no schedule shall be deemed to have been amended, modified or
superseded by the Updated Schedules, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured by the Updated Schedules, unless and until
the Required Lenders, in their sole and absolute discretion, shall have accepted
in writing the Updated Schedules.

4.   No Event of Default or Potential Default exists on the date hereof; no
Event of Default or Potential Default has occurred or is continuing since the
date of the previously delivered Compliance Certificate; no Material Adverse
Change has occurred since the date of the previously delivered Compliance
Certificate.

    [NOTE: If any Event of Default, Potential Default, Material Adverse Change
has occurred or is continuing, set forth on an attached sheet the nature thereof
and the action which the Loan Parties have taken, are taking or propose to take
with respect thereto.]

5. Maximum Leverage Ratio (Section 7.2.9). The ratio of (i) Consolidated Net
Indebtedness to (ii) Consolidated EBITDA is                      to 1.0 for the
period equal to the four (4) consecutive fiscal quarters of ATI and its
Subsidiaries ending as of the Report Date, which is not greater than the
permitted ratio of 3.25 to 1.0.

  (A)   Consolidated Net Indebtedness as of the Report Date equals
$                    , and is computed as follows:

                      (i)  
Consolidated Total Indebtedness
$              
 
             
 
            (ii)  
cash that is not subject to a Lien
$              
 
             
 
            (iii)  
Permitted Investments that are not subject to a Lien
$              
 
     

 

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PNC Bank, National Association, as Administrative Agent
Page 3

                      (iv)  
Fifty Million and 00/100 Dollars
$   50,000,000.00          
 
            (v)  
Item (A)(ii) plus Item A(iii) minus Item (A)(iv)
$              
 
             
 
            (vi)  
Item (A)(i) minus Item (A)(v) equals Consolidated Net Indebtedness
$              
 
     

  (B)   Consolidated EBITDA as of the Report Date equals $                    ,
and is computed as follows:

                      (i)  
net income (or loss) (excluding extraordinary gains or losses including, without
limitation, those items created by mandated changes in accounting treatment)
$              
 
             
 
            (ii)  
net interest expense
$              
 
             
 
            (iii)  
all charges against income for federal, state and local taxes
$              
 
             
 
            (iv)  
any other non-cash non-recurring items of loss with respect to such fiscal
period not already excluded hereunder
$              
 
             
 
            (v)  
any non-cash pension expense
$              
 
             
 
            (vi)  
Sum of Items 5(B)(i) through 5(B)(v)
$              
 
             
 
            (vii)  
all credits to income for federal, state and local taxes
$              
 
             
 
            (viii)  
any other non-cash non-recurring items of gain with respect to such fiscal
period not already excluded hereunder
$              
 
             
 
            (ix)  
any non-cash pension income
$              
 
             
 
            (x)  
Sum of Items 5(B)(vii) through 5(B)(ix)
$              
 
             
 
            (xi)  
Item 5(B)(vi) minus Item 5(B)(x) equals Consolidated EBIT
$              
 
             
 
            (xii)  
depreciation and amortization
$              
 
             
 
            (xiii)  
Sum of Items 5(B)(xi) and 5(B)(xii) equals Consolidated EBITDA
$              
 
     

  (C)   the ratio of Item 5(A) to Item 5(B)(xiii) equals the Leverage Ratio

 

--------------------------------------------------------------------------------

 

PNC Bank, National Association, as Administrative Agent
Page 4
6. Minimum Interest Coverage Ratio (Section 7.2.10). The ratio of
(i) Consolidated EBIT to (ii) interest expense is                      to 1.0
for the period equal to the four (4) consecutive fiscal quarters of ATI and its
Subsidiaries ending as of the Report Date, which is not less than the permitted
ratio of 2.0 to 1.0.

  (A)   Consolidated EBIT as of the Report Date equals $                     as
is referenced in Item 5(B)(xi) above.     (B)   interest expense as of the
Report Date equals $                    .     (C)   the ratio of Item 6(A) to
Item 6(B) equals the Interest Coverage Ratio.

[INTENTIONALLY LEFT BLANK]

 

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the undersigned has executed this Certificate this ___
day of                     , 20__.

          WITNESS:  Allegheny Technologies Incorporated
    __________________________  By:           Name:           Title:        

 

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EXHIBIT A
PRELIMINARY CLOSING AGENDA
     This preliminary closing agenda contains the documents to be delivered in
connection with a first amendment to the credit facility provided to ATI Funding
Corporation, a Delaware corporation (“ATI Funding”), and TDY Holdings, LLC, a
Delaware limited liability company (“TDYH”) (ATI Funding and TDYH are each, a
“Borrower” and collectively, the “Borrowers”), by PNC Bank, National Association
(“PNC Bank”), and various other financial institutions from time to time (PNC
Bank and such other financial institutions are each, a “Lender” and
collectively, the “Lenders”), PNC Bank, as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”), and PNC Capital Markets LLC, a
Pennsylvania limited liability company, as lead arranger (the “Lead Arranger”)
(the “Credit Facility”).

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
 
           
1.
  First Amendment to Credit Agreement (the “Credit Agreement”), by and among the
Borrowers, Oregon Metallurgical Corporation, an Oregon corporation (“Oremet”),
Allegheny Ludlum Corporation, a Pennsylvania corporation (“ALC”), ATI
Properties, Inc., a Delaware corporation (“ATIP”), TDY Industries, Inc., a
California corporation (“TDY”), ALC Funding Corporation, a Delaware corporation
(“ALC Funding”), Jessop Steel, LLC, a Pennsylvania limited liability company
(“Jessop LLC”), Jewel Acquisition, LLC, a Delaware limited liability company
(“Jewel”), Allegheny Technologies Incorporated, a Delaware corporation (“ATI”),
International Hearth Melting, LLC, an Oregon limited liability company (“IHM”),
Rome Metals, LLC, a Pennsylvania limited liability company (“Rome”), TI Oregon,
Inc., an Oregon corporation (“TIO”), Titanium Wire Corporation, a Pennsylvania
corporation (“Titanium Wire”), ATI Canada Holdings, Inc., a Delaware corporation
(“ATICH”), Allegheny Technologies International, Inc., a California corporation
(“ATII”), AII Investment Corp., a Delaware corporation (“AIC”), Environmental,
Inc., a California corporation (“EI”), AII Acquisition, LLC, a Pennsylvania
limited liability company (“AII LLC”), ATI Titanium LLC, a Delaware limited
liability company (“ATIT”) (Oremet, ALC, ATIP, TDY, ALC Funding, Jessop LLC,
Jewel, ATI, IHM, Rome, TIO, Titanium Wire, ATICH, ATII, AIC, EI, AII LLC and
ATIT are each, a “Guarantor” and collectively, the “Guarantors”) (the Borrowers
and the Guarantors are each, a “Loan Party” and collectively, the “Loan
Parties”), the Lenders and the Administrative Agent (the “First Amendment”).  
Administrative Agent   Complete

 

--------------------------------------------------------------------------------

 

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
2.
  Revised Schedule to the Credit Agreement.        
 
           
 
  a.     Schedule 1.1(A) — Pricing Grid.   Administrative Agent   Complete
 
           
3.
  Revised Exhibit to the Credit Agreement:        
 
           
 
  a.     Exhibit 7.3.3 — Quarterly Compliance Certificate.   Administrative
Agent   Complete
 
           
 
  ORGANIZATIONAL DOCUMENTS        
 
           
 
  ATI Funding        
 
           
4.
  Certificate of Secretary of ATI Funding as to (i) resolutions of its Board of
Directors authorizing ATI Funding to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Certificate
of Incorporation or By-Laws.   Borrowers   Complete
 
           
5.
  Good Standing Certificate of ATI Funding from the Secretary of State of the
State of Delaware.   Borrowers   Complete
 
           
 
  TDYH        
 
           
6.
  Certificate of an Officer/Manager of TDYH as to (i) resolutions of its
Managers/Members authorizing TDYH to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Certificate
of Formation or Limited Liability Company Agreement.   Borrowers   Complete
 
           
7.
  Good Standing Certificate of TDYH from the Secretary of State of the State of
Delaware.   Borrowers   Complete
 
           
 
  Oremet        
 
           
8.
  Certificate of Secretary of Oremet as to (i) resolutions of its Board of
Directors authorizing Oremet to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Articles of
Incorporation or Bylaws.   Borrowers   Complete
 
           
9.
  Good Standing Certificate of Oremet from the Secretary of State of the State
of Oregon.   Borrowers   Complete

 

--------------------------------------------------------------------------------

 

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
 
           
 
  ALC        
 
           
10.
  Certificate of Secretary of ALC as to (i) resolutions of its Board of
Directors authorizing ALC to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Certificate of
Incorporation or Bylaws.   Borrowers   Complete
 
           
11.
  Good Standing Certificate of ALC from the Secretary of State of the
Commonwealth of Pennsylvania.   Borrowers   Complete
 
           
 
  ATIP        
 
           
12.
  Certificate of Secretary of ATIP as to (i) resolutions of its Board of
Directors authorizing ATIP to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Certificate of
Incorporation or Bylaws.   Borrowers   Complete
 
           
13.
  Good Standing Certificate of ATIP from the Secretary of State of the State of
Delaware.   Borrowers   Complete
 
           
 
  TDY        
 
           
14.
  Certificate of Secretary of TDY as to (i) resolutions of its Board of
Directors authorizing TDY to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Articles of
Incorporation or Bylaws.   Borrowers   Complete
 
           
15.
  Good Standing Certificate of TDY from the Secretary of State of the State of
California.   Borrowers   Complete
 
           
 
  ALC Funding        
 
           
16.
  Certificate of Secretary of ALC Funding as to (i) resolutions of its Board of
Directors authorizing ALC Funding to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Certificate
of Incorporation or Bylaws.   Borrowers   Complete
 
           
17.
  Good Standing Certificate of ALC Funding from the Secretary of State of the
State of Delaware.   Borrowers   Complete

 

--------------------------------------------------------------------------------

 

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
 
           
 
  Jewel        
 
           
18.
  Certificate of an Officer/Manager of Jewel as to (i) resolutions of its
Managers/Members authorizing Jewel to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Certificate
of Formation or Limited Liability Company Agreement.   Borrowers   Complete
 
           
19.
  Good Standing Certificate of Jewel from the Secretary of State of the State of
Delaware.   Borrowers   Complete
 
           
 
  ATI        
 
           
20.
  Certificate of Secretary of ATI as to (i) resolutions of its Board of
Directors authorizing ATI to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Certificate of
Incorporation or Bylaws.   Borrowers   Complete
 
           
21.
  Good Standing Certificate of ATI from the Secretary of State of the State of
Delaware.   Borrowers   Complete
 
           
 
  Jessop LLC        
 
           
22.
  Certificate of an Officer/Manager of Jessop LLC as to (i) resolutions of its
Managers/Members authorizing Jessop LLC to enter into the First Amendment and
all related documents, (ii) incumbency, and (iii) no amendments to its
Certificate of Formation or Limited Liability Company Agreement.   Borrowers  
Complete
 
           
23.
  Good Standing Certificate of Jessop LLC from the Secretary of State of the
Commonwealth of Pennsylvania.   Borrowers   Complete
 
           
 
  IHM        
 
           
24.
  Certificate of an Officer/Manager of IHM as to (i) resolutions of its
Managers/Members authorizing IHM to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Articles of
Organization or Operating Agreement.   Borrowers   Complete
 
           
25.
  Good Standing Certificate of IHM from the Secretary of State of the State of
Oregon.   Borrowers   Complete

 

--------------------------------------------------------------------------------

 

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
 
           
 
  Rome        
 
           
26.
  Certificate of an Officer/Manager of Rome as to (i) resolutions of its
Managers/Members authorizing Rome to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Certificate
of Formation and Operating Agreement.   Borrowers   Complete
 
           
27.
  Good Standing Certificate of Rome from the Secretary of State of the
Commonwealth of Pennsylvania.   Borrowers   Complete
 
           
 
  TIO        
 
           
28.
  Certificate of Secretary of TIO as to (i) resolutions of its Board of
Directors authorizing TIO to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Articles of
Incorporation or Bylaws.   Borrowers   Complete
 
           
29.
  Good Standing Certificate of TIO from the Secretary of State of the State of
Oregon.   Borrowers   Complete
 
           
 
  Titanium Wire        
 
           
30.
  Certificate of Secretary of Titanium Wire as to (i) resolutions of its Board
of Directors authorizing Titanium Wire to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Articles of
Incorporation or Bylaws.   Borrowers   Complete
 
           
31.
  Good Standing Certificate of Titanium Wire from the Secretary of State of the
Commonwealth of Pennsylvania.   Borrowers   Complete
 
           
 
  AIC        
 
           
32.
  Certificate of Secretary of AIC as to (i) resolutions of its Board of
Directors authorizing AIC to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Certificate of
Incorporation or Bylaws.   Borrowers   Complete
 
           
33.
  Good Standing Certificate of AIC from the Secretary of State of the State of
Delaware.   Borrowers   Complete

 

--------------------------------------------------------------------------------

 

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
 
           
 
  ATICH        
 
           
34.
  Certificate of Secretary of ATICH as to (i) resolutions of its Board of
Directors authorizing ATICH to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Certificate of
Incorporation or Bylaws.   Borrowers   Complete
 
           
35.
  Good Standing Certificate of ATICH from the Secretary of State of the State of
Delaware.   Borrowers   Complete
 
           
 
  ATII        
 
           
36.
  Certificate of Secretary of ATII as to (i) resolutions of its Board of
Directors authorizing ATII to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Articles of
Incorporation or Bylaws.   Borrowers   Complete
 
           
37.
  Good Standing Certificate of ATII from the Secretary of State of the State of
California.   Borrowers   Complete
 
           
 
  EI        
 
           
38.
  Certificate of Secretary of EI as to (i) resolutions of its Board of Directors
authorizing EI to enter into the First Amendment and all related documents,
(ii) incumbency, and (iii) no amendments to its Articles of Incorporation or
Bylaws.   Borrowers   Complete
 
           
39.
  Good Standing Certificate of EI from the Secretary of State of the State of
California.   Borrowers   Complete
 
           
 
  AII LLC        
 
           
40.
  Certificate of an Officer/Manager of AII LLC as to (i) resolutions of its
Managers/Members authorizing AII LLC to enter into the First Amendment and all
related documents, (ii) incumbency, and (iii) no amendments to its Certificate
of Formation and Operating Agreement.   Borrowers   Complete
 
           
41.
  Good Standing Certificate of AII LLC from the Secretary of State of the
Commonwealth of Pennsylvania.   Borrowers   Complete

 

--------------------------------------------------------------------------------

 

                      Responsible     No.   LOAN DOCUMENTS   Party   Status
 
           
 
  ATIT        
 
           
42.
  Certificate of Secretary of ATIT as to (i) resolutions of its Board of
Directors authorizing ATIT to enter into the First Amendment and all related
documents, (ii) incumbency, and (iii) no amendments to its Certificate of
Formation or Limited Liability Company Agreement.   Borrowers   Complete
 
           
43.
  Good Standing Certificate of ATIT from the Secretary of State of the State of
Delaware.   Borrowers   Complete
 
           
 
  RELATED DOCUMENTS        
 
           
44.
  Opinions of Counsel to the Loan Parties in form and substance satisfactory to
the Administrative Agent.   Borrowers   Complete
 
           
45.
  Updated projected consolidated financial statements of ATI and its
subsidiaries, in form and substance satisfactory to the Administrative Agent.  
Borrowers   Complete
 
           
46.
  Officer’s Certificate of each Loan Party, as of the closing date of the First
Amendment, regarding no material adverse change, the accuracy of representations
and warranties, compliance with covenants, no defaults, etc.   Administrative
Agent/
Borrowers   Complete
 
           
47.
  Administrative Agent’s Fee Letter.   Administrative Agent   Complete