Exhibit 10.1

 

SECOND AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

 

This SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Second
Amendment”) dated as of June 14, 2016 is among EMPIRE RESOURCES, INC., a
Delaware corporation (the “Company”), the undersigned Banks and COÖPERATIEVE
RABOBANK U.A (formerly known as Coöperatieve Centrale Raiffeisen-Boerenleenbank
B.A., “Rabobank Nederland”), NEW YORK BRANCH, as Agent (the “Agent”).
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given to them in the Credit Agreement (as defined below).

 

WITNESSETH:

 

WHEREAS, the Company, the Banks, the Syndication Agent, the Agent, the Issuing
Bank, the Swing Line Bank and the Lead Arranger are parties to the Amended and
Restated Credit Agreement dated as of June 19, 2014 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”);

 

WHEREAS, RB International Finance (USA) LLC (the “Departing Lender”) has
requested to withdraw as a Bank and to be repaid its outstanding Obligations;
and

 

WHEREAS, the Company has requested certain amendments to the Credit Agreement
and the Banks and the Agent are willing to agree to such amendments and the
withdrawal of the Departing Lender from the facility, on the terms and
conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.          Amendments.

 

The Credit Agreement is hereby amended, upon the occurrence of the Effective
Date (as defined in Section 3 below), as follows:

 

(a)          Section 1.01 is amended as follows:

 

(i)          The definition of “Defaulting Bank” is amended by (x) deleting “or”
at the end of clause (c)(v) therein and replacing it with “,” and (y) inserting
the following immediately after clause (c)(vi) therein (before the “;”): “or
(vii) become the subject of a Bail-In Action”.

 

(ii)         The definition of “Eligible Inventory” is amended as follows:

 

(A)         clause (e) is amended and restated in its entirety as follows:

 

“(e) in respect of such Inventory either (i) (A) one or more customers of the
Company has contracted to purchase such Inventory at a predetermined fixed price
under sales contracts entered into by the Company in the ordinary course of
business and (B) upon such delivery an Eligible Receivable will arise or (ii)
such Inventory is hedged by futures contracts (in a manner acceptable to the
Required Banks) in a futures account maintained with a broker acceptable to the
Agent, which futures account shall be subject to no rights of any third party
other than the Agent and customary setoff rights of the applicable broker,”; and

 

- 1 -

 

  

(B)         the proviso (after clause (l)) is amended by deleting “65%” and
replacing it with “75%”.

 

(iii)        The definition of “Monthly Date” is inserted in its proper
alphabetical place as follows:

 

““Monthly Date” means the last Business Day of each month.”

 

(iv)        The definition of “Quarterly Date” is deleted.

 

(v)         The following definitions are hereby inserted in their proper
alphabetical places:

 

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by
the applicable EEA Resolution Authority in respect of any liability of an EEA
Financial Institution.

 

“Bail-In Legislation” means, with respect to any EEA Member Country implementing
Article 55 of Directive 2014/59/EU of the European Parliament and of the Council
of the European Union, the implementing law for such EEA Member Country from
time to time which is described in the EU Bail-In Legislation Schedule.

 

“EEA Financial Institution” means (a) any credit institution or investment firm
established in any EEA Member Country which is subject to the supervision of an
EEA Resolution Authority, (b) any entity established in an EEA Member Country
which is a parent of an institution described in clause (a) of this definition,
or (c) any financial institution established in an EEA Member Country which is a
subsidiary of an institution described in clauses (a) or (b) of this definition
and is subject to consolidated supervision with its parent.

 

“EEA Member Country” means any of the member states of the European Union,
Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” means any public administrative authority or any
person entrusted with public administrative authority of any EEA Member Country
(including any delegee) having responsibility for the resolution of any EEA
Financial Institution.

 

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule
published by the Loan Market Association (or any successor person), as in effect
from time to time.

 

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“Sanctions” means any sanctions imposed or administered by or enforced by OFAC,
the U.S. Department of State, the United Nations Security Council, the European
Union, Her Majesty’s Treasury, the Netherlands, the French Republic or other
relevant sanctions authority.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution
Authority, the write-down and conversion powers of such EEA Resolution Authority
from time to time under the Bail-In Legislation for the applicable EEA Member
Country, which write-down and conversion powers are described in the EU Bail-In
Legislation Schedule.

 

(b)          Section 2.03 is amended as follows:

 

(i)          clause (ii) of the first proviso in the first paragraph is amended
by deleting “$75,000,000” and replacing it with “$65,000,000”; and

 

(ii)         clause (g) is amended and restated in its entirety as follows:

 

“(g) (i)        Letter of Credit Fees. The Company shall pay to the Agent for
the pro rata account of the Banks (other than Defaulting Banks) in accordance
with their respective Revolving Loan Commitment Percentages), the following
fees:

 

(A)         Commercial Letters of Credit. For each commercial Letter of Credit,
a letter of credit fee in an amount equal to 0.125% flat for each 90 day period
or part thereof between the date of issuance and the expiration date thereof, on
the face amount of such Letter of Credit, such letter of credit fee accrued
through and including each Monthly Date to be due and payable no later than the
date which is ten (10) Business Days after delivery by the Agent to the Company
of a monthly invoice therefor;

 

(B)         Standby Letters of Credit. For each standby Letter of Credit, a
letter of credit fee at a rate per annum equal to 2.35% on the average daily
undrawn amount of such standby Letter of Credit during the period from the date
of issuance through and including the date of drawing of the entire amount or
expiration or termination thereof, such letter of credit fee accrued through and
including each Monthly Date to be due and payable no later than the date which
is ten (10) Business Days after delivery by the Agent to the Company of a
monthly invoice therefor;

 

provided that such letter of credit commissions with respect to each Letter of
Credit set forth in clauses (A) and (B) above shall be non-refundable and shall
not be less than $500, and

 

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(ii)         Letter of Credit Fronting Fees. The Company shall pay to each
Issuing Bank a fronting fee with respect to each Letter of Credit issued by such
Issuing Bank, which shall accrue at the rate or rates per annum separately
agreed upon between the Company and the applicable Issuing Bank on the daily
amount of the Letter of Credit Liabilities (excluding any portion thereof
attributable to unreimbursed Reimbursement Obligations) during the period from
and including the Closing Date to but excluding the later of the date of
termination of the Revolving Loan Commitments and the date on which there ceases
to be any Letter of Credit Liabilities with respect to such Issuing Bank, such
fronting fees accrued through and including each Monthly Date to be due and
payable no later than the date which is ten (10) Business Days after delivery by
the Agent to the Company of a monthly invoice therefor;

 

provided that all such fees (under clauses (i) and (ii) above) shall also be
payable (to the extent accrued and not yet paid) on the date on which the
Revolving Loan Commitments terminate and any such fees accruing after the date
on which the Revolving Loan Commitments terminate shall be payable upon the
expiration of the applicable Letter of Credit or, if earlier, the date on which
the Revolving Loan Commitments terminate.

 

In addition, the Company shall pay to the Agent for account of the applicable
Issuing Bank, such Issuing Bank’s standard fees with respect to the amendment or
negotiation of any Letter of Credit or processing of drawings thereunder. Any
other fees payable to an Issuing Bank pursuant to this paragraph shall be
payable within 10 Business Days after demand.”

 

(c)          Section 2.06 is amended and restated in its entirety as follows:

 

“2.06 Commitment Fee. The Company shall pay to the Agent for account of each
Bank a commitment fee on the daily average unused portion of the Revolving Loan
Commitment of such Bank (for which purpose (a) the aggregate amount of any
Letter of Credit Liabilities shall be deemed to be a use of the Revolving Loan
Commitment and (b) the aggregate amount of any Swing Line Loans then outstanding
shall not be deemed to be a use of the Revolving Loan Commitment), for the
period from and including the date of this Agreement to but not including the
earlier of the date the Revolving Loan Commitment is terminated and the
Revolving Credit Commitment Termination Date, at a rate per annum equal to
0.50%. Accrued commitment fees through and including each Monthly Date shall be
due and payable no later than the date which is ten (10) Business Days after
delivery by the Agent to the Company of a monthly invoice therefor, and on the
earlier of the date the Revolving Loan Commitment is terminated and the
Revolving Credit Commitment Termination Date. For purposes of this paragraph,
the Revolving Loan Commitment of a Defaulting Bank shall be deemed to be fully
utilized for as long as such Bank is a Defaulting Bank.”

 

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(d)          Section 7.16 is amended and restated in its entirety as follows:

 

“7.16         OFAC/Money Laundering/Corruption Representations. No Obligor nor,
to the knowledge of any Obligor, any of its employees, directors, officers or
Affiliates is in violation of any Laws relating to Sanctions, bribery,
corruption, terrorism or money laundering (collectively, “Anti-Terrorism Laws”),
including regulations administered by the United States Treasury Department’s
Office of Foreign Asset Control (“OFAC”) and the Executive Order No. 13224 on
Terrorist Financing, effective September 24, 2001 (the “Executive Order”), and
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56. No Obligor nor,
to the knowledge of any Obligor, any of its employees, directors, officers or
Affiliates, or their respective brokers or other agents acting or benefiting in
any capacity in connection with the Loans or Letters of Credit, is any of the
following (each such Person, a “Sanctioned Person”):

 

(a)          a Person or country that is listed in the annex to, or is otherwise
subject in the prohibitions contained in, the Executive Order or the OFAC
regulations, or that is subject to or the target of any Sanctions;

 

(b)          a Person owned or controlled by, or acting for or on the behalf of,
any Person that is listed in the annex to, or is otherwise subject to the
prohibitions contained in, the Executive Order or the OFAC regulations or other
Anti-Terrorism Laws or similar Laws promulgated by the United Nations or Her
Majesty’s Treasury;

 

(c)          a Person with which the Agent or any Bank is prohibited from
dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(d)          a Person that commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order or the OFAC regulations;

 

(e)          a Person that is (i) named on the most current list of “Specially
Designated Nationals and Blocked Persons” published by OFAC at its official
website or any replacement website or other replacement official publication
list or (ii) similarly designated in any comparable list published by the United
Nations or any Governmental Authority of the European Union, the Netherlands,
the United Kingdom or the French Republic; or

 

(f)          a Person located, organized or resident in a country or territory
that is, or whose government is, the subject of Sanctions including, without
limitation, Cuba, Iran, North Korea, Sudan and Syria.

 

No Obligor nor any of its brokers or other agents acting in any capacity in
connection with the Loans or Letters of Credit (x) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Sanctioned Person, (y) deals in, or otherwise engages
in any transaction relating to, any property or interests in property blocked
pursuant to the Executive Order or the OFAC regulations, or (z) engages in or
conspires to engage in any transaction that evades or avoids, or has the purpose
of evading or avoiding, or attempts to violate, any of the prohibitions set
forth in any Anti-Terrorism Law.

 

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No part of the proceeds of the Loans or Letters of Credit will be used, directly
or indirectly, (x) for any payments to any Sanctioned Person, governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, (i) in
order to obtain, retain or direct business or obtain any improper advantage, in
violation of OFAC, Anti-Terrorism Laws, regulations of the European Union or the
United States Foreign Corrupt Practices Act of 1977, as amended or (ii) which
could result in the imposition of Sanctions against any Person (including any
Bank) or (y) to fund any activities or business of or with any Person that, at
the time of funding, is a Person described in any of clauses (a) - (f) above.”

 

(e)          Section 8.10 is amended by deleting “$42,500,000” and replacing it
with “$37,500,000”.

 

(f)          New Section 11.24 is hereby inserted after Section 11.23 as
follows:

 

“11.20 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Notwithstanding anything to the contrary in any Basic Document or in any other
agreement, arrangement or understanding among any of the parties thereto, each
of the Company and the Secured Parties acknowledges that any liability of any
EEA Financial Institution arising under any Basic Document, to the extent such
liability is unsecured, may be subject to the write-down and conversion powers
of an EEA Resolution Authority and agrees and consents to, and acknowledges and
agrees to be bound by:

 

(a)the application of any Write-Down and Conversion Powers by an EEA Resolution
Authority to any such liabilities arising hereunder which may be payable to it
by any party hereto that is an EEA Financial Institution; and

 

(b)the effects of any Bail-in Action on any such liability, including, if
applicable:

 

(i)          a reduction in full or in part or cancellation of any such
liability;

 

(ii)         a conversion of all, or a portion of, such liability into shares or
other instruments of ownership in such EEA Financial Institution, its parent
undertaking, or a bridge institution that may be issued to it or otherwise
conferred on it, and that such shares or other instruments of ownership will be
accepted by it in lieu of any rights with respect to any such liability under
this Agreement or any other Basic Document; or

 

(iii)         the variation of the terms of such liability in connection with
the exercise of the write-down and conversion powers of any EEA Resolution
Authority.”

 

(g)          Schedule A is amended and restated in its entirety as set forth on
Annex I hereto.

 

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(h)          Footnote 4 on Schedule 1 to Exhibit B is amended by deleting “65%”
and replacing it with “75%”.

 

(i)          Section 7 of Exhibit G is hereby amended and restated in its
entirety as follows:

 

“7. SECTION 8.10 – Net Working Capital

 

(a) Base Amount $37,500,000   (b) 25% of Company’s Consolidated Net Income (only
if a positive number) for the fiscal year most recently ended $_________   (c)
Total minimum required Net Working Capital (8(a) plus 8(b)) $_________   (d)
Actual Net Working Capital $_________ Yes     No”

  

SECTION 2.          Departing Bank Provisions; Reallocation.

 

(a)          On the Effective Date (immediately prior to giving effect to this
Second Amendment (and for the avoidance of doubt, each of the parties hereto
acknowledges that the Departing Bank shall not be deemed to have consented to
any of the amendments to the Credit Agreement set forth in Section 1 hereof and
none of such amendments shall be effective until the requirements of this
Section 2(a) have been satisfied)), the Company shall repay in full all
outstanding Loans and other Loan Obligations (including, without limitation, any
amounts payable under Section 5.04 of the Credit Agreement in connection with
such repayment) owing to the Departing Bank and upon such repayment, the
Departing Bank shall cease to be a Bank, the Departing Bank’s Commitment shall
terminate and the Departing Bank’s rights and obligations under the Basic
Documents (and the rights under the Intercreditor Agreement) shall terminate
except for any such rights under Section 11.03 of the Credit Agreement and any
other rights that expressly survive such termination.

 

(b)          All payments made under clause (a) above shall be retained solely
by the Departing Bank and shall not be subject to the pro rata sharing
provisions set forth in the Basic Documents.

 

(c)          On the date hereof, the Agent shall reallocate, if necessary, the
Loan Obligations of all Banks (other than the Departing Bank) such that after
giving effect thereto, each Bank (other than the Departing Bank) shall have Loan
Obligations in accordance with its Revolving Loan Commitment Percentage (after
giving effect to this Second Amendment). Each Bank (other than the Departing
Bank) hereby agrees that in connection with such reallocation it shall be deemed
to have purchased and/or sold, as applicable, by assignment (without recourse)
to or from such other Banks such amounts as necessary to effect the reallocation
set forth above.

 

(d)          The Company hereby agrees that, in connection with the reallocation
set forth in clause (c) above, the Company shall compensate each Bank for any
loss, cost or expense attributable to such reallocation as required by Section
5.04 of the Credit Agreement.

 

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SECTION 3.          Effectiveness of Amendment.

 

This Second Amendment shall become effective on the date (the “Effective Date”)
on which the Agent shall have received:

 

(a)          this Second Amendment duly executed by each of the Company, the
Agent and the Banks, and duly acknowledged by the Guarantor;

 

(b)          such corporate authorization documents and opinions of counsel as
the Banks shall require; and

 

(c)          payment from the Company, in immediately available funds, of an
arranging fee for the sole account of the Agent in an amount set forth in that
certain Fee Letter dated May 11, 2016 executed by the Company and the Agent and
the reasonable fees of counsel to the Agent for which an invoice shall have been
provided.

 

SECTION 4.          Effect of Amendment; Ratification; Representations; etc.

 

(a)          On and after the Effective Date, this Second Amendment shall be a
part of the Credit Agreement, all references to the Credit Agreement in the
Credit Agreement and the other Basic Documents shall be deemed to refer to the
Credit Agreement as amended by this Second Amendment, and the term “this
Agreement”, and the words “hereof”, “herein”, “hereunder” and words of similar
import, as used in the Credit Agreement, shall mean the Credit Agreement as
amended hereby.

 

(b)          Except as expressly set forth herein, this Second Amendment shall
not constitute an amendment, waiver or consent with respect to any provision of
the Credit Agreement and the Credit Agreement is hereby ratified, approved and
confirmed in all respects and remains in full force and effect.

 

(c)          In order to induce the Agent and the Banks to enter into this
Second Amendment, each Company represents and warrants to the Agent and the
Banks that before and after giving effect to the execution and delivery of this
Second Amendment:

 

(i)          the representations and warranties of such Company set forth in the
Credit Agreement and in the other Basic Documents are true and correct in all
material respects as if made on and as of the date hereof, except for those
representations and warranties that by their terms were made as of a specified
date which were true and correct on and as of such date; and

 

(ii)         no Default or Event of Default has occurred and is continuing.

 

(d)          This Second Amendment shall be a Basic Document.

 

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SECTION 5.          Counterparts.

 

This Second Amendment may be executed by one or more of the parties to this
Second Amendment on any number of separate counterparts (including by facsimile
or email transmission of signature pages hereto), and all of said counterparts
taken together shall be deemed to constitute one and the same agreement. A set
of the copies of this Second Amendment signed by all the parties shall be lodged
with the Company and the Agent.

 

SECTION 6.          Severability.

 

Any provision of this Second Amendment which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 

SECTION 7.          GOVERNING LAW.

 

THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.

 

SECTION 8.          WAIVERS OF JURY TRIAL.

 

EACH OF THE COMPANY, THE AGENT AND THE BANKS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SECOND AMENDMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

[Remainder of Page Intentionally Left Blank; Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
duly executed as of the day and year first above written.

 

  

EMPIRE RESOURCES, INC.         By: /s/ Sandra Kahn     Name: Sandra Kahn    
Title: Vice President

 

 

 

 

  COÖPERATIEVE RABOBANK, U.A. (formerly known as Coöperatieve Centrale
Raiffeisen-Boerenleenbank B.A., “Rabobank Nederland”), NEW YORK BRANCH, as Agent
and as a Bank       By: /s/ Paul Moisselin     Name: Paul Moisselin     Title:
Vice President         By: /s/ Jan Hendrik de Graaff     Name: Jan Hendrik de
Graaff     Title: Managing Director

 

 

 

 

  BNP PARIBAS, as a Bank         By: /s/ Bradley Dingwall     Name: Bradley
Dingwall     Title: Director         By: /s/ Deborah P. Whittle     Name:
Deborah P. Whittle     Title: Director

 

 

 

 

  SOCIÉTÉ GÉNÉRALE S.A., as a Bank         By: /s/ Barbara Paulsen     Name:
Barbara Paulsen     Title: Managing Director

 

 

 

 

  ABN AMRO CAPITAL USA LLC, as a Bank         By: /s/ Jamie Matos     Name:
Jamie Matos     Title: Vice President         By: /s/ R. Bisscheroux     Name:
R. Bisscheroux     Title: Director

 

 

 

 

  BROWN BROTHERS HARRIMAN & CO., as a Bank         By: /s/ Michael Vellucci    
Name: Michael Vellucci     Title: SVP

 

 

 

 

  RB INTERNATIONAL FINANCE (USA) LLC, as the Departing Bank         By: /s/
Astrid Wilke     Name: Astrid Wilke     Title: Group Vice President         By:
/s/ Tracey Duffy     Name: Tracey Duffy     Title: Vice President

 

 

 

  

ACKNOWLEDGED AND AGREED:       EMPIRE RESOURCES PACIFIC, LTD.               By:
/s/ Sandra R. Kahn     Name: Sandra R. Kahn     Title: Vice President  

 

 

 

 

Annex I to Second Amendment

to Amended and Restated Credit Agreement

 

SCHEDULE A

TO

EMPIRE RESOURCES, INC.

AMENDED AND RESTATED

CREDIT AGREEMENT

 

Commitments

 

Banks  Commitment   Revolving Loan Commitment
Percentage  Coöperatieve Rabobank U.A., New York Branch  $45,000,000    27.6924%
BNP Paribas  $39,000,000    24.0000% Société Générale S.A.  $24,000,000  
 14.7692% ABN AMRO Capital USA LLC  $37,000,000    22.7692% Brown Brothers
Harriman & Co.  $17,500,000    10.7692% Total  $162,500,000.00    100.0000%