EXHIBIT 10.2.1

EXECUTION VERSION

DEFERRAL AGREEMENT
 
This DEFERRAL AGREEMENT (this “Agreement”), dated as of May 14, 2009, is entered
into by and among Barzel Finco Inc. (f/k/a Novamerican Steel Finco Inc.) (the
“Issuer”), Barzel Industries Inc. (f/k/a Symmetry Holdings Inc.) (the “Parent”;
and together with the Issuer and the other subsidiaries of the Parent, the
“Company”), JPMorgan Chase Bank, N.A. (“JPM”) and CIBC World Markets Inc.
(“CIBC”; and together with JPM, the “Noteholders”).
 
W I T N E S S E T H:
 
WHEREAS, the Issuer, the Parent and The Bank of New York Mellon, as trustee (the
“Trustee”), have entered into that certain Indenture, dated as of November 15,
2007 (as amended, modified or supplemented prior to the date hereof, and
together with all exhibits thereto, the “Indenture”), in respect of the Issuer’s
$315,000,000 principal amount of 11.5% Senior Secured Notes due 2015 (the
“Notes”);
 
WHEREAS, the Noteholders together hold 100% of the aggregate principal amount of
the Notes outstanding and have retained Stroock & Stroock & Lavan LLP
(“Stroock”) as restructuring counsel and Loughlin Meghji + Company as financial
advisor (“LM+Co”; and together with Stroock, the “Advisors”), for the purpose of
entering into discussions with the legal and financial advisors to the Issuer;
 
WHEREAS, an interest payment under the Securities (as defined in the Indenture)
is due on May 15, 2009 (the “Interest Payment”);
 
WHEREAS, the Issuer’s failure to make such Interest Payment pursuant to Section
4.01 of the Indenture on or before May 15, 2009 will (subject to the expiration
of the applicable grace period under Section 6.01 of the Indenture) constitute
an “Event of Default” under Section 6.01 of the Indenture and permit holders of
at least 25% in principal amount of the outstanding Securities to accelerate the
maturity of the Notes, declare all amounts under the Notes and the Indenture
immediately due and payable and exercise all other rights and remedies under the
Indenture;
 
WHEREAS, the Issuer has requested that the Noteholders consent to defer payment
of the Interest Payment until the Deferral Termination Date (as defined below)
and to direct the Trustee in writing to not exercise any rights and remedies on
the Noteholders’ behalf regarding the Interest Payment until such Deferral
Termination Date;
 
WHEREAS, the Noteholders are willing to grant the Issuer’s request for such
consent to a deferral, and to give to the Trustee such written directions, as
described in the preceding paragraph on the terms and subject to the conditions
contained herein; and
 
WHEREAS, the Company has advised the Noteholders that it intends to enter into a
transaction (the “Transaction”) pursuant to which the Company will seek to
effect either (i) a recapitalization or restructuring of a substantial portion
of the equity and/or debt securities and/or other indebtedness of the Company,
(ii) a disposition of all or a majority of the outstanding equity securities of
the Company and/or all or a majority of the assets or operations of the
 

 
 

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Company, or (iii) a refinancing of the indebtedness of the Company and/or the
placement, raising or issuance of equity, equity-linked or debt securities in
connection with the Company.
 
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
subject to the terms and conditions set forth below, the parties hereto hereby
agree as follows:
 
1.           Defined Terms.  Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Indenture.  Each of the following capitalized terms shall have the meaning set
forth below:
 
“Deferral Period” means the period beginning on the Effective Date and
continuing through the Deferral Termination Date.
 
“Deferral Termination Date” means the earliest date of occurrence of a Deferral
Termination Event.
 
“Deferral Termination Event” means any of the following events:
 
(a) the acceleration of the maturity of any obligations under the Credit
Agreement followed by written notice from the Noteholders sent to the Company
electing to treat such acceleration as a “Deferral Termination Event”;
 
(b) the occurrence of a Default or an Event of Default under the Indenture other
than the failure to make the Interest Payment;
 
(c) the breach of, or failure of the Issuer to comply with Section 5 of this
Agreement, without the need for prior written notice, unless cured within one
(1) day in the case of Section 5(a); or
 
(d) 5:00 pm EDT on August 14, 2009.
 
“Financial Forecast” means the financial projections prepared by the Company and
agreed upon by the Advisors in good faith showing detailed income statement,
balance sheet and cash flow statement projections both (a) on a monthly basis
through the end of fiscal year 2009, and (b) on an annual basis through the end
of fiscal year 2014.
 
“Ordinary Course Operating and Statutory Liens” means any of the Liens described
in clauses (1)-(5), (8) or (11)-(17) of the definition of Permitted Liens.
 
2.           Deferral and Agreement.  Effective as of the Effective Date (as
herein defined), notwithstanding anything to the contrary set forth in the
Indenture, the Noteholders hereby consent to waive compliance by the Issuer with
any provision of the Indenture and the Securities regarding the Interest Payment
during the Deferral Period.  The Issuer agrees to make the Interest Payment on
such Deferral Termination Date, along with interest accruing on the Interest
Payment at the interest rate applicable to the principal amount under the
Indenture and the Securities plus 2.00% per annum, to the extent lawful, with
such interest to be payable on the Deferral Termination Date.  Interest shall
accrue on the outstanding principal amount under the Indenture and the
Securities during the Deferral Period at the rate provided in the Indenture and
 

 
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the Securities plus 2.00% per annum, to the extent lawful, with such interest to
be payable on November 15, 2009.  The Noteholders hereby direct the Trustee not
to exercise any rights and remedies on the Noteholders’ behalf regarding the
Interest Payment until such Deferral Termination Date or as directed otherwise
by the Noteholders.  For the avoidance of doubt, until the Deferral Termination
Date, the non-payment of the Interest Payment due on May 15, 2009 in accordance
with this Agreement shall not constitute a default under the Indenture.
 
3.           Limit of Deferral and Consent.  Other than departures therefrom
consented to by the Noteholders hereunder, all of the provisions of the
Indenture shall continue to be, and shall remain, in full force and effect in
accordance with their terms, and all rights and remedies of the Noteholders and
the Trustee arising under the Indenture are hereby expressly preserved.  Except
as expressly set forth herein, no failure to exercise nor any delay in
exercising, on the part of the Issuer, the Noteholders or the Trustee, of any
right, remedy, power or privilege under the Indenture or otherwise shall operate
as a waiver thereof.  No waiver shall be effective unless in writing.  The
Issuer, the Noteholders and the Trustee hereby agree that, during the pendency
of this Agreement, all statutes of limitations and similar laws, rules and
equitable theories with respect to the time in which the Trustee or any
Noteholder, on the one hand, or the Issuer, on the other hand, may bring any
claim or action against the other shall be tolled and that the passage of such
time shall not otherwise operate to the detriment of the Issuer, the Trustee or
any Noteholder with respect to such right.
 
4.           Effectiveness.  This Agreement shall become effective as of the
date (the “Effective Date”), on which each of the following shall have occurred:
 
(a)           each of the parties hereto shall have executed and delivered a
counterpart to this Agreement;
 
(b)           the Issuer shall have delivered a 13-week cash flow forecast in
form and substance reasonably satisfactory to the Noteholders;
 
(c)           the Issuer shall have delivered to the Advisors a certificate
signed by an officer of the Issuer certifying that, to the Company’s knowledge,
no additional Liens exist as of the Effective Date (other than those Liens
existing on February 27, 2009) to the extent such Liens apply to assets or
property of the Company with a fair market value equal to or greater than
$500,000, other than Ordinary Course Operating and Statutory Liens;
 
(d)           the Company shall have executed, and delivered to the Noteholders
a copy of, an agreement with a financial advisor providing financial advisory
and investment banking services with respect to the Transaction, such agreement
to be in form and substance satisfactory to the Noteholders in their sole and
absolute discretion;
 
(e)           no Default or Event of Default shall have occurred or be
continuing as of the Effective Date; and
 
(f)           the Company shall have paid all outstanding fees and expenses of
the Advisors.
 
5.           Covenants.
 

 
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(a)           During the Deferral Period, the Company agrees to:
 
(i)           deliver to the Noteholders and the Advisors on each Wednesday, a
13-week cash flow forecast in form and substance reasonably satisfactory to the
Noteholders, which forecast shall cover the period commencing the week following
such Wednesday;
 
(ii)           deliver to the Noteholders and the Advisors on each Wednesday, a
report of the actual results from, together with a comparison against the
forecast for (except no comparison shall be required for the first Wednesday
following the date hereof, for which no forecast was delivered the previous
week), the immediately preceding week;
 
(iii)           deliver to the Noteholders and the Advisors by the 25th of each
month, monthly unaudited financial statements (including an income statement,
balance sheet and cash flow statement for the month and fiscal year to date)
from the preceding fiscal month in form and substance reasonably satisfactory to
the Advisors;
 
(iv)           deliver to the Noteholders and the Advisors by the 25th of each
month, a variance analysis in form and substance reasonably satisfactory to the
Advisors comparing the Financial Forecast to the actual results from the
previous fiscal month, with an explanation of significant variances in income
statement items, balance sheet items (including working capital) and cash flow
items (including capital expenditures);
 
(v)           deliver to the Noteholders and the Advisors by May 22, 2009 the
Financial Forecast; and
 
(vi)           deliver such other documents to the Noteholders or the Advisors
as either may reasonably request.
 
(b)           During the Deferral Period, the Company agrees not to:
 
(i)           grant or permit to exist any Lien, other than the Liens in effect
on the Effective Date or Ordinary Course Operating and Statutory Liens, without
the prior written consent of the Noteholders;
 
(ii)           sell, lease, transfer or otherwise dispose of (in one or series
of related transactions) any asset of the Company other than in the ordinary
course without the prior written consent of the Noteholders; or
 
(iii)           make any Restricted Payment, management incentive fee, earn-out
payment or bonus payment without the prior written consent of the Noteholders.
 
(c)           The Company agrees to use its best efforts to consummate the
Transaction, and
 

 
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(i)           provide weekly (or more frequently if requested) updates to the
Noteholders and the Advisors on the status of such Transaction;
 
(ii)           provide all material documentation relating to such Transaction,
including without limitation, copies of any proposal or term sheet, letter of
intent, purchase agreement and any material correspondences prepared or
delivered by or to the Company and/or sent to or received from a potential
Transaction party in connection with such Transaction that relates to bid prices
or valuations; provided, however, that in the event that the Noteholders express
an intent to acquire the assets of the Company through foreclosure or other
credit bid basis, then materials prepared by the Company’s financial advisors
solely for the Company and which would in the financial advisor’s opinion chill
the bidding process shall be excluded from this subsection (ii);
 
(iii)           provide the Noteholders and the Advisors with reasonable access
to the legal and financial advisors to the Company who shall furnish information
regarding such Transaction (including potential buyer lists, descriptions of
transaction structure and consideration to be received) and its status;
provided, however, such access to the Company’s legal advisors shall not be
construed to be a waiver of the Company’s attorney/client privilege with such
legal advisors; and
 
(iv)           provide, or cause the legal and financial advisors to the Company
with respect to the Transaction to provide, such other information as the
Noteholders or the Advisors may reasonably request with respect to the
Transaction;
 
provided, however, that anything to the contrary notwithstanding, nothing
contained herein shall be deemed a consent by the Noteholders to the Transaction
if such consent would otherwise be required by the Indenture or this Agreement.
 
6.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
 
7.           Costs and Expenses.  The Issuer agrees to pay on demand all costs
and expenses of the Noteholders and the Trustee in connection with the
preparation, execution and delivery of this Agreement, including the reasonable
fees, costs and expenses of the Advisors to the Noteholders with respect thereto
and to Pryor Cashman LLP as advisors to the Trustee with respect thereto.
 
8.           Notices.  All notices and other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered personally, mailed certified or
registered mail (return receipt requested) with postage prepaid, sent by
facsimile, or sent by next day or overnight mail or courier, addressed or sent
to the following address or facsimile number:
 
(i)           If to the Company, addressed to:

 
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Barzel Industries Inc.
Barzel Finco Inc.
320 Norwood Park South, 2nd Floor
Norwood, MA 02062
Facsimile No:  (781) 486-9120
Attention:   Corrado De Gasperis
    Karen Narwold, Esq.
 
with a copy to:
 
Kelley Drye & Warren LLP
400 Atlantic Street
Stamford, CT 06901
Facsimile No.:  (203) 327-2669
Attention:   Ridgway Barker, Esq.
 
(ii)           If to JPM, addressed to:
 
JPMorgan Chase Bank, N.A.
277 Park Avenue, 8th Floor
New York, NY 10172
Facsimile No:  (212) 622-4556
Attention:     Douglas Jenks
 
with a copy to:
 
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Facsimile No.:  (212) 806-6006
Attention:     Andrew DeNatale, Esq.
 
(iii)           If to CIBC, addressed to:
 
CIBC World Markets
425 Lexington Avenue
New York, NY 10017
Facsimile No:  (212) 856-3991
Attention:     Lindsay Gordon
 
   with a copy to:
 
Stroock & Stroock & Lavan LLP
180 Maiden Lane
New York, NY 10038
Facsimile No.:  (212) 806-6006
Attention:     Andrew DeNatale, Esq.

 
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(iv)           If to the Trustee, addressed to:
The Bank of New York Mellon
101 Barclay Street, Floor 8W
New York, New York 10286
Facsimile No.:  (212) 815-5704
Attention:     Christopher Greene
 
with a copy to:
 
Pryor Cashman LLP
410 Park Avenue
New York, NY 10022
Facsimile No.:  (212) 798-6307
Attention:     Ron Sarubbi, Esq.
 

Such addresses and facsimile numbers may be changed, from time to time, by means
of a notice given in the manner provided in this Section 8.
 
All such notices, requests, demands and other communications shall be deemed to
have been received (i) if delivered personally, on the day delivered, (ii) if
mailed registered or certified mail (return receipt requested), on the next
Business Day after the day on which the written receipt of such mail is signed,
(iii) if sent by facsimile, on the day sent by facsimile, and (iv) if sent by
next day or overnight mail or courier, on the day delivered.
 
9.           Headings.  All headings in this Agreement are included only for
convenience and ease of reference and shall not be considered in the
construction and interpretation of any provision hereof.
 
10.           Binding Nature and Benefit.  This Agreement shall be binding upon
and inure to the benefit of each party hereto and their respective successors
and assigns.
 
11.           Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes, but
all of which together shall constitute one and the same instrument.
 
12.           No Modifications.  Except as expressly modified hereby, the terms
and conditions of the Indenture shall continue unchanged and remain in full
force and effect.
 
[Signature pages follow]
 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first written above.

     
BARZEL INDUSTRIES INC.
               
By: 
/s/ Corrado De Gasperis
       
Name:
Title
                         
BARZEL FINCO INC.
               
By: 
/s/ Corrado De Gasperis
       
Name:
Title
                         
JPMORGAN CHASE BANK, N.A.
               
By: 
/s/ Douglas A. Jenks
       
Name:  Douglas A. Jenks
Title     Managing Director
                         
CIBC WORLD MARKETS INC.
               
By: 
/s/ E. Lindsay Gordon
       
Name:  E. Lindsay Gordon
Title     Authorized  Signatory

Acknowledged:

THE BANK OF NEW YORK MELLON, AS TRUSTEE
         
By:
/s/ Gary S. Bush
     
Name:  Gary S. Bush
Title     Vice President
   

[Signature page to Deferral Agreement]