BB&T
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT

 
9520406872
 
 
Account Number
 

This Second Amendment to First Amended and Restated Loan Agreement (this
“Amendment”) is made as of August 1, 2013 by and among BRANCH BANKING AND TRUST
COMPANY, a North Carolina banking corporation (“Bank”) and the following
entities (collectively, the “Borrowers”):

Synalloy Corporation, a Delaware corporation (“Synalloy”);

Metchem, Inc., a Delaware corporation (“Metchem”);

Synalloy Fabrication, LLC, a South Carolina limited liability company (formerly
named SFR, LLC) (“Synalloy Fabrication”);

Ram-Fab, LLC, a South Carolina limited liability company (“Ram-Fab”);

Synalloy Metals, Inc., a Tennessee corporation (“Synalloy Metals”);

Bristol Metals, LLC, a Tennessee limited liability company (“Bristol”);

Manufacturers Soap & Chemical Company, a Tennessee corporation (“Manufacturers
Soap”);

Manufacturers Chemicals, LLC, a Tennessee limited liability company
(“Manufacturers Chemicals”); and

Palmer of Texas Tanks, Inc., a Texas corporation (“Palmer”);

Syntrans, LLC, a Texas limited liability company (“Syntrans”); and

CRI Tolling, LLC, a South Carolina limited liability company (“CRI Tolling”)

for purposes of amending (without novation, accord nor satisfaction) certain
aspects and provisions of the First Amended and Restated Loan Agreement dated as
of August 21, 2012; as adjoined to add Palmer pursuant to the Palmer Joinder
Agreement dated as of August 21¸ 2012 by the among the parties hereto; and as
amended to effect a temporary extension of the amount available to be drawn
under the revolving Line of Credit pursuant to the First Amendment to First
Amended and Restated Loan Agreement dated as of October 22, 2012 (all of the
foregoing sequentially, cumulatively and collectively, the “Loan Agreement”).

Recitals

In addition to the Term Loan and the Revolving Line, the Borrowers have
requested the Bank and the Bank has agreed, subject to the terms of this
Amendment to (a) extend a new term loan to the Borrowers (the “CRI Acquisition
Loan”) in the principal amount of $4,033,250; (b) amend the definition of
“EBITDA” in the Loan Agreement; and (c) provide for certain other matters as set
forth herein. The purpose of the CRI Acquisition Loan shall be to facilitate the
acquisition by the Borrowers of the real estate known as the CRI land and
building, and equipment assets of CRI along with related closing costs and
expenses (collectively, the “CRI Acquisition”).

Agreement

Section 1. Defined Terms from Loan Agreement

Capitalized terms used in this Amendment without definition retain (except, to
the extent applicable, as amended hereby) the meanings respectfully assigned to
such terms in the Loan Agreement.

Section 2. Recitals and Loan Agreement Incorporated Herein by Reference

Each and all of opening paragraphs, the Recitals, statements, information and
other provisions of this Agreement above constitute an integral part of this
Amendment among the parties and are to be considered binding upon the parties
notwithstanding their being underneath the heading

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BB&T
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT

“Recitals” above. In addition, the statements, recitals, terms, conditions and
agreements of and in the Loan Agreement are hereby incorporated herein by this
reference thereto as if set forth herein in full.

Section 3. CRI Acquisition Term Loan

(a)
Generally

At the request of the Borrowers and for the purposes and as contemplated by the
Recitals above, the Bank does hereby extend the CRI Acquisition Loan to the
Borrowers as a variable rate term loan in the principal amount of $4,033,250.
The Borrower's obligations to repay the CRI Acquisition Loan and interest and
other matters shall be evidenced by the Borrowers' promissory note nominated as
the BB&T Promissory Note dated the date of this Amendment in the original
principal amount of $4,033,250 (the “CRI Acquisition Loan Note”) and maturing
August 1, 2023, when the entire unpaid principal balance then outstanding on the
CRI Acquisition Loan under the CRI Acquisition Loan Note plus accrued interest
thereon shall be paid in full.

(b)    Advances

The CRI Acquisition Loan shall be advanced to the Borrowers (by advancing to
Synalloy acting on behalf of the Borrowers) in two (2) installments as more
particularly set forth herein. The first advance shall be in the amount of
$3,485,000 on the date hereof to finance the real property portion of the CRI
Acquisition, and the second advance shall be in the balance amount of $548,250
on a date not later than September 30, 2013 to finance the equipment portion of
the CRI Acquisition (together and as evidenced by the CRI Acquisition Loan Note,
the “CRI Acquisition Loan Advances”).

(c)
As a “Loan” and “Note” Under the Existing Loan Documents

The CRI Acquisition Loan shall, along with the Term Loan and the Line of Credit,
constitute a “Loan” for purposes of the Loan Agreement and the Loan Documents
(collectively with any other “Loans” now or hereafter applicable thereunder).
All of the obligations of the Borrowers, whether of payment or performance,
under the Line of Credit, the Term Loan, the CRI Acquisition Loan and any
additional Loans, all notes or other instruments evidencing the same, the Loan
Agreement, this Amendment, the other Loan Documents constitute the joint and
several obligations of the Borrowers in nature secured and enjoying the
assurances, guaranties and all other benefits of the Loan Documents. To the
extent necessary to effectuate the foregoing, the Loan Agreement and each of the
Loan Documents are hereby amended as necessary, mutatis mutandis, consistent
with the foregoing and all other matters set forth in this Amendment.

(d)    Good and Sufficient Consideration

Each of the Borrower acknowledges and agrees that the extension by the Bank to
the Borrowers, borrowing on a joint and several basis, of each of the Term Loan,
the Line of Credit and the CRI Acquisition Loan, is for the full and complete
betterment of each of the other Borrowers due to the same being in furtherance
of their enterprises as an entirety and their entity, commercial and other
relationships and affiliations. The foregoing constitutes good and valuable
consideration for the borrowing by each of the Borrowers of such Loans and the
Borrowers to hereby represent and warrant as such to the Bank accordingly.

Section 4. Conditions Precedent

(a)    Closing and Initial CRI Acquisition Loan Advance for Real Property

The closing of the extension of the CRI Acquisition Loan and the extension of
the first of the two CRI Acquisition Loan Advances (for real property) shall be
conditioned upon the receipt by the Bank of all items and the satisfaction of
all conditions set forth in the commitment letter agreement (the “Commitment
Letter”) from and between the Bank and the Borrowers dated July 19, 2013, all in
form and content satisfactory to the Bank, including without limitation the
following:

USA Patriot Act Verification Information: Information or documentation,
including but not limited to the legal name, address, tax identification number,
driver's license, and date of birth (if the Borrower is an individual) of the
Borrowers sufficient for the Bank to verify the identity of the Borrowers in
accordance with the USA Patriot Act. Borrowers shall notify Bank promptly of any
change in such information.
Note(s): The Note(s) evidencing the Loans(s) duly executed by the Borrowers.

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BB&T
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT

Security Agreement(s): Security Agreement(s) in which Borrowers and any other
owner (a “Debtor”) of personal property collateral shall grant to Bank a first
priority security interest in the tangible and intangible personal property
specified therein. (If Bank has or will have a security interest in any
collateral which is inferior to the security interest of another creditor,
Borrowers must fully disclose to Bank any and all such security interests, and
Bank must specifically approve any such security interest which will continue
during the Loan.)
Mortgages: First and exclusive mortgage (the “Mortgage”) on the CRI Property,
subject only to such liens and encumbrances as shall be permitted by the Bank in
writing. The Bank shall be provided (a) a current survey of the CRI Property;
and (b) such other information and documentation of the CRI Property as the Bank
may request.
Negative Pledge Agreement: No pledge agreement on the CRI Property.
UCC Financing Statements: To the extent not already in place, copies of UCC
Financing Statements duly filed in Borrowers' or other owner's state of
incorporation, organization or residence, and in all jurisdictions necessary, or
in the opinion of the Bank desirable, to perfect the security interests granted
in the Security Agreement(s), and certified copies of Information Requests
identifying all previous financing statements on record for the Borrowers or
other owner, as appropriate from all jurisdictions indicating that no security
interest has previously been granted in any of the collateral described in the
Security Agreement(s), unless prior approval has been given by the Bank.
Corporate Resolution: Entity resolutions duly adopted by each of the Borrowers
authorizing the execution, delivery, and performance of this Amendment, the CRI
Acquisition Loan Note and any other applicable Loan Documents on or in a form
provided by or acceptable to Bank.
Articles of Incorporation: A copy of the Articles of Incorporation and all other
charter documents of each of Synalloy, Metchem, Synalloy Metals, Manufacturers
Soap and Palmer all filed with and certified by the Secretary of State of the
State of each corporations incorporation.
By-Laws: A copy of the By-Laws of Synalloy, Metchem, Synalloy Metals,
Manufacturers Soap and Palmer, certified by the Secretary of each corporation as
to their completeness and accuracy.
Declaration of Limited Liability Company: A declaration or resolution from the
members/managers of Synalloy Fabrication, Ram-Fab, Bristol and Manufacturers
Chemicals authorizing the execution, delivery, and performance of the Loan
Documents on or in a form provided by or acceptable to Bank.
Articles of Organization: A copy of the Articles of Organization and all other
organizational documents of Synalloy Fabrication, Ram-Fab, Bristol and
Manufacturers Chemicals, all filed with and certified by the Secretary of State
of each limited liability companies organization.
Operating Agreement: A copy of the Operating Agreement of Synalloy Fabrication,
Ram-Fab, Bristol and Manufacturers Chemicals, certified by each limited
liability companies members/managers as to its completeness and accuracy.
Certificate of Incumbency: A certificate of the Secretary or members/managers of
the Borrowers certifying the names and true signatures of the officers or
members/managers of the Borrowers authorized to sign the Loan Documents.
Certificate of Existence: A certification of the Secretary of State (or other
government authority) of the State of the Borrowers' Incorporation or
Organization as to the existence or good standing of the Borrowers and their
charter documents on file.
Opinion of Counsel: An opinion of counsel for the Borrowers satisfactory to the
Bank and the Bank's counsel.
Assignment of Life Insurance Policy(ies): To the extent not already on file with
the Bank, the assignment of life insurance policy(ies) as collateral in the
approximate amount of $2,900,000 by an insurance company acceptable to the Bank,
covering the individuals with respect to which policies are presently assigned
to the Bank and such additional individuals as the Bank may reasonably request.
Additional Documents: Receipt by the Bank of other approvals, opinions, or
documents as the Bank may reasonably request.

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BB&T
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT

(b)    Closing and Initial CRI Acquisition Loan Advance for Equipment

The extension of the second of the two CRI Acquisition Loan Advances (for
equipment) shall be conditioned upon (i) the satisfaction of the conditions
referenced in Section 4(a) above; and (ii) the receipt by the Bank of all items
and the satisfaction of all conditions as follows, all in form and content
satisfactory to the Bank: The second such CRI Acquisition Loan Advance shall be
made in a single advance in the amount of $548,250 on a date on or prior to
September 30, 2013 and the Borrower represents, warrants and agrees that it
shall satisfy the following conditions for the extension of such second CRI
Acquisition Loan Advance on or prior to such date: Prior to the making by the
Bank to the Borrowers of such second of the two CRI Acquisition Loan Advances
(for equipment), the Bank shall have been furnished (a) copies of one or more
bills of sale from CRI to the Borrower setting forth in reasonable detail the
equipment being transferred to the Borrower; (b) such equipment shall constitute
substantially all of the equipment located at the CRI Project on the date hereof
and be such as to enable the CRI Project to continue in operations as
contemplated by the Borrowers and (c) such additional assurances as the Bank may
reasonably require (such as evidence of insurance, etc.) as would the Bank for
comparable equipment purchase credit facilities.

Section 5. Amendment to Definition of “EBITDA”

The sentence in the first indented paragraph of Section 5 of the Loan Agreement,
defining the term “EBITDA” is hereby restated to read as follows::

EBITDA is defined as the sum of (a) net income for such period plus (b) an
amount which, in the determination of net income for such period, has been
deducted for (i) interest expense (including the interest component under
capital lease obligations) (ii) total federal, state and other income taxes
(iii) depreciation and amortization expense and (iv) non-recurring acquisition
expenses, all as determined with GAAP.

Any references to “EBITDA” set forth in the Loan Agreement, the other Loan
Documents and any related agreement, instrument, filing, document or other
papers shall henceforth be deemed amended, mutatis mutandis, to reflect the
above revision.

Section 6. Swaps.

(a)    Section 8.09 of the Loan Agreement is hereby restated to read as follows:

8.09 Should an Event of Default, Termination Event or similar event or condition
(howsoever nominated) occur under any Swap Agreement(s).

(b)    Notwithstanding anything to the contrary in the Loan Agreement, any
Guaranty or any other Loan Document, no person or entity that does not qualify
as an Eligible Contract Participant (as defined in the Commodity Exchange Act,
as amended) or does not otherwise qualify as an indirect proprietorship pursuant
to the rules of the Commodity Futures Trading Commission shall be deemed a party
to any guaranty of any Swap Agreement with the Bank entered into or modified on
or after October 12, 2012, and shall not be liable for any swap obligations to
BB&T arising from such Swap Agreement. Such exclusion shall have no effect on
any other obligations of any such person or entity to BB&T under this Guaranty.

Section 7. Security. For the avoidance of doubt, all of the obligations of the
Borrowers, whether of payment or performance, under the Line of Credit, the Term
Loan, the CRI Acquisition Loan and any additional Loans shall be and continue
following the effectiveness of this Amendment to be (along with the other
obligations referenced therein), secured by and enjoying the benefits of the
pledges, mortgages, deeds of trust, collateral and other matters and security
set forth in the Loan Documents, including without limitation the Mortgages and
the Security Agreement and the other agreements, instruments, filings and other
papers set forth on Attachment 1 to this Amendment.

Section 8. Bringdown of Representations and Warranties. The Borrowers represent
and warrant to Bank the continued accuracy and completeness, as of the date
hereof, of all representations made in the Loan Documents (including without
limitation Section 2 of the Loan Agreement) and as to Palmer the same by virtue
of the Palmer Joinder Agreement referenced above, taking into account this
Amendment constituting one of the Loan Documents.

Section 9. Fee. In consideration for the matters set forth in this Amendment,
the Borrowers shall pay to the Bank, contemporaneously with the date hereof, a
one-time fee in the amount of 20,166.25.

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BB&T
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT

Section 10. Indemnification

The Borrowers hereby jointly and severally agree to and do hereby indemnify and
defend the Bank, its affiliates, their successors and assigns and their
respective directors, officer, employees and shareholders, and do hereby hold
each of them harmless from and against, any loss, liability, lawsuit,
proceeding, cost expense or damage (including reasonable in-house and outside
counsel fees, whether suit is brought or not) arising from or otherwise relating
to the closing, disbursement, administration, or repayment of the CRI
Acquisition Loan and the other Loans, including without limitation: (i) the
failure to make any payment to the Bank promptly when due, whether under the CRI
Acquisition and the other Notes evidencing CRI Acquisition Loan and the other
the Loans or otherwise; (ii) the breach of any representations or warranties to
the Bank contained in this Amendment, the Loan Documents or in any other loan
documents now or hereafter executed in connection with the CRI Acquisition Loan
and the other Loans; (iii) the violation of any covenants or agreements made for
the benefit of the Bank and contained in any of the Loan Documents; provided,
however, that the foregoing indemnification shall not be deemed to cover any
loss which is finally determined by a court of competent jurisdiction to result
solely from the Bank's gross negligence or willful misconduct; or (iv) any
aspect of the Palmer Acquisition Documents or the transactions contemplated
thereby. The Bank shall have no responsibility or liability whatsoever (in
contact, tort or otherwise) with respect to the Palmer Acquisition Documents or
the transactions contemplated thereby.

Section 11. Miscellaneous.
(a)
Certain Provisions Incorporated by Reference. Without limiting the continued
general applicability of Section 10 (or any other provisions) of the Loan
Agreement, the provisions of Sections 10.02 through Section 10.18 of the Loan
Agreement are incorporated into this Amendment, mutatis mutandis, as if set
forth herein in full.

(b)
Matters as to Amendment. This Amendment constitutes an amendment to the Loan
Agreement (and, to the extent applicable, all other Loan Documents) and except
for the effect of any matters expressly set forth in this Amendment, this
Amendment, the Loan Agreement and each of the Loan Documents is, and shall
continue to be following the effectiveness of this Amendment, in full force and
effect in accordance with the terms thereof, and nothing in this Amendment shall
otherwise be deemed to amend or modify any provision of the Loan Agreement or
the other Loan Documents, each of which shall remain in full force and effect
except as otherwise expressly provided herein or therein. This Amendment is not
intended to be, nor shall it be construed to create, a novation or accord and
satisfaction. This Amendment does not effect the release of any collateral, does
not disturb the perfection or priority of any existing liens, and does not
effect the release of any obligor, guarantor or other party from its
obligations.

(c)
References to Documents. Each reference in the Loan Agreement, this Amendment
and any other Loan Documents shall be the same as may be amended, restated,
increased, decreased, extended, reduced or otherwise modified and effect from
time to time.

(d)
CRI Acquisition and Cap-X Covenant. Section 6.03 of the Loan Agreement provides
that expenditures for fixed assets in any fiscal year shall not exceed, in the
aggregate as to all Borrowers, the sum of $5,500,000. For the purposes of
calculating such expenditures for the fiscal year 2013, the fixed assets
purchased in connection with the Color Resources International transaction will
not be counted toward this capital expenditure covenant.

[The remainder of this page is left blank intentionally]

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BB&T
SECOND AMENDMENT
TO
FIRST AMENDED AND RESTATED LOAN AGREEMENT

(d)
WAIVER OF JURY TRIAL. UNLESS EXPRESSLY PROHIBITED BY APPLICABLE LAW, THE
UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS OR CLAIMS
ARISING OUT OF THIS AMENDMENT OR ANY OF THE LOAN DOCUMENTS EXECUTED IN
CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP BETWEEN THE
UNDERSIGNED AND BANK. THIS PROVISION IS A MATERIAL INDUCEMENT FOR BANK TO MAKE
THE LOAN AND ENTER INTO THIS AMENDMENT. FURTHER, THE UNDERSIGNED HEREBY CERTIFY
THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK'S COUNSEL, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT SEEK TO ENFORCE THIS WAIVER OR RIGHT
TO JURY TRIAL PROVISION. NO REPRESENTATIVE OR AGENT OF BANK, NOR BANK'S COUNSEL,
HAS THE AUTHORITY TO WAIVE, CONDITION OR MODIFY THIS PROVISION.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment under seal as of the date first written above.

Witness (as to the co-Borrowers):

______________________________
SYNALLOY CORPORATION
METCHEM, INC.
SYNALLOY METALS, INC.
MANUFACTURERS SOAP & CHEMICAL COMPANY
RAM-FAB, LLC
MANUFACTURERS CHEMICALS, LLC
BRISTOL METALS, LLC
SYNALLOY FABRICATION, LLC
PALMER OF TEXAS TANKS, INC.
SYNTRANS, LLC
CRI TOLLING, LLC

By:
                                                                                  (SEAL)
Richard D. Sieradzki
Vice President, Finance
of and on behalf of each of
the above-named entities

Witness (as to BB&T):

______________________________
BRANCH BANKING AND TRUST COMPANY

By: ________________________________
        Stan W. Parker
        Senior Vice President

[Signature Page to Second Amendment to First Amended and Restated Loan
Agreement]

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BB&T
ATTACHMENT 1

RELATED LOAN AND SECURITY DOCUMENTS

August 1, 2013

Borrowers: The entities executing as co-Borrowers to the First Amendment to
which this Attachment 1 is Attached to the agreement of instrument to which this
Attachment is attached, on a joint and several basis                  

This page forms a part of the instrument or agreement to which it is attached
and constitutes an integral part thereof.

The agreement or instrument to which this attachment is attached and all loans,
notes, instruments and other liabilities and obligations referenced therein are
all governed, secured, guarantied and/or otherwise related to by, as applicable,
each of the following (each of which is - except as otherwise set forth below -
originally dated on or about August 21, 2012, provided that references to the
following are as the same may be amended, restated, increased, decreased or
otherwise modified and in effect from time to time).

•
First Amended and Restated Loan Agreement dated as of August 21, 2012 (the “Loan
Agreement”) among Branch Banking and Trust Company (“BB&T”) and the multiple
Borrowers referenced above (collectively, the “Borrowers”).

◦
As amended by the First Amendment to First Amended and Restated Loan Agreement
dated as of October 22, 2012 and the Second Amended and Restated Loan Agreement
dated as of August 1, 2013

•
Joinder Agreement dated as of August 21, 2012 among the Borrowers, Lee-Var, Inc.
(whose name has been changed to Palmer of Texas Tanks, Inc., “Palmer”) and the
Bank.

•
The Promissory Note dated on or about August 21, 2012 from the Borrowers to BB&T
in the principal amount of $25,000,000.

•
The Modification, Renewal, Increase and Restatement of Promissory Note dated on
or about August 21, 2012 from the Borrowers to BB&T in the principal amount of
$22,500,000.

◦
As amended by the Modification, Renewal, Increase and Restatement of Promissory
Note dated as of October 2012 from the Borrowers to BB&T.

•
Joinder Agreement dated as of July 31, 2013 among the Borrowers and the Bank.

•
Eligible Contract Participant Guaranty Agreement dated as of July 31, 2013 among
Synalloy Corporation, Syntrans, LLC and CRI Tolling, LLC.

•
The Promissory Note dated August 1, 2013 from the Borrowers to BB&T in the
principal amount of $4,033,250.

•
All Swap Agreements (as defined in the Loan Agreement)

•
Security Agreement dated as of August 1, 2012 among the Borrowers and BB&T.

•
Mortgage of Real Estate dated on or about August 1, 2012 with respect to one or
more parcels of real property located in the State of Arkansas, from one or more
of the applicable Borrowers for the benefit of BB&T.

•
Deed of Trust for Real Estate dated on or about August 1, 2012 with respect to
one or more parcels of real property located in the State of Tennessee, from one
or more of the applicable Borrowers for the benefit of BB&T.

•
Deed of Trust for Real Estate dated on or about August 1, 2012 with respect to
one or more parcels of real property located in the State of Texas, from one or
more of the applicable Borrowers for the benefit of BB&T.

•
Mortgage of Real Estate dated on or about August 1, 2013 with respect to one or
more parcels of real property located in Laurens County, South Carolina, from
one or more of the applicable Borrowers for the benefit of BB&T.

•
Negative Pledge Agreements, each dated on or about July 9, 2010, from the
applicable Borrower(s) named therein for the benefit of BB&T and relating to
real properties in Spartanburg County, SC; Bradley County, TN; Sullivan County,
TN. Also, any other negative pledge agreements or similar documents executed and
delivered by one or more Borrowers, including without limitation in connection
with the Palmer Acquisition.

•
Negative Pledge Agreement dated August 1, 2013, from the applicable Borrower(s)
named therein for the benefit of BB&T and relating to real properties in Laurens
County, SC

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BB&T
ATTACHMENT 1

RELATED LOAN AND SECURITY DOCUMENTS

•
Stock and LLC Interests Pledge Agreement dated the date hereof among the
Borrowers and the Bank.

•
Assignments of Life Insurance Policies, each dated June 30, 2010, for policies
executed by Synalloy Corporation for policies numbered 1820005, 1820003,
1820007, 1820001, 1820009.

•
Any and all other Loan Documents (as defined in the Loan Agreement)