**Exhibit 10.1**

** **

**Execution Version**

 

**THIRD AMENDMENT TO CREDIT AGREEMENT**

 

THISTHIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of November 12,2010, is entered into by and among CONTINENTAL MATERIALS CORPORATION, aDelaware corporation (the “Company”), the financial institutions thatare or may from time to time become parties to the Credit Agreement referencedbelow (together with their respective successors and assigns, the “Lenders”and each, a “Lender”) and THE PRIVATEBANK AND TRUST COMPANY, an Illinoisstate chartered bank as Administrative Agent for each Lender (the “AdministrativeAgent”).  Capitalized terms usedherein and not otherwise defined shall have the meanings given to such terms inthe Credit Agreement referenced below.

 

WHEREAS,the Lender previously made available to the Company a credit facility pursuantto the terms and conditions of that certain Credit Agreement, dated as of April 16,2009, by and among the Company, the Lender and the Administrative Agent, asamended by that certain First Amendment to Credit Agreement, dated as of November 18,2009, by and among the Company, the Lender and the Administrative Agent (the “FirstAmendment”), and as further amended by that certain Waiver and SecondAmendment to Credit Agreement, dated as of April 15, 2010, by and amongthe Company, the Lender and the Administrative Agent (the “Second Amendment”)(as further amended, restated or supplemented from time to time, the “CreditAgreement”);

 

WHEREAS,pursuant to the Credit Agreement, the Lender previously (i) made availableto the Company a revolving credit facility in the amount of $20,000,000(reduced to $13,500,000 from and after October 1, 2010 pursuant to theSecond Amendment), and (ii) funded a term loan in the original principal amountof $10,000,000; and

 

WHEREAS,the parties to this Amendment desire to amend the Credit Agreement to, amongother things, (i) extend the maturity date of the Revolving Loan and TermLoan to December 31, 2011, and (ii) modify the Minimum Adjusted EBITDAcovenant set forth in Section 11.13.1 of the Credit Agreement, ineach case, all on the terms and conditions set forth herein.

 

NOW,THEREFORE, in consideration of the premises, to induce the Lender andAdministrative Agent to enter into this Amendment, and for other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, it is hereby agreed by the parties hereto as follows:

 

Section 1.  Incorporation of Recitals.  The foregoing recitals are herebyincorporated into and made a part of this Amendment.

 

Section 2.  Amendment of the Credit Agreement.  It is hereby agreed and understood that,subject to the complete fulfillment and performance of the conditions precedentset forth in Section 5 of this Amendment, the Credit Agreement ishereby amended and modified as follows:

 

A.                                   Section 1.1.  Section 1.1of the Credit Agreement is hereby amended as follows:

 

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(1)                                  The definition of “Term Loan Maturity Date” is hereby deleted inits entirety and replaced with the following:

 

“TermLoan Maturity Date means the earlier of (a) December 31, 2011 or (b) theTermination Date.”

 

(2)                                  The definition of “Termination Date” is hereby deleted in itsentirety and replaced with the following:

 

“TerminationDate means the earlier to occur of (a) December 31, 2011 or (b) suchother date on which the Commitments terminate pursuant to Section 6or Section 13.”

 

B.                                     Section 11.13.1.  Section 11.13.1(Minimum Adjusted EBITDA) of the Credit Agreement is hereby deleted in itsentirety and replaced with the following:

 

“11.13.1                              Minimum Adjusted EBITDA.  Not permit Adjusted EBITDA for anyComputation Period to be less than the applicable amount set forth below forsuch Computation Period:

 
| **Computation  Period Ending** | ** ** | **Adjusted EBITDA** | ** ** |
|-------------------------------------|------------|--------------------------|------------|
| ** **                          | ** ** | ** **               | ** ** |
| January 1, 2011                |       | $                        | 250,000    |   |
|                                |       |                     |       |
| April 2, 2011                  |       | $                        | (600,000   | ) |
|                                |       |                     |       |
| July 2, 2011                   |       | $                        | 2,100,000  |   |
|                                |       |                     |       |
| October 1, 2011                |       | $                        | 2,000,000  |   |
|                                |       |                     |       |
| December 31, 2011              |       | $                        | 500,000    | ” |

 

Section 3.  Revolving Loan Note and Term Loan Note.  It is hereby agreed and understood that theRevolving Loan Note and the Term Loan Note remain in full force and effect andthat the Obligations evidenced thereby remain due and payable on the terms setforth therein and in the Credit Agreement (as modified by this Amendment).

 

Section 4.  Amendment of the Loan Documents.  It is hereby agreed and understood by theAdministrative Agent, each Lender and the Company that, subject to the completefulfillment and performance of the conditions precedent set forth in Section 5of this Amendment and effective as of the effective date of this Amendment,each reference to the Credit Agreement, the Revolving Loan, the Term Loan, theRevolving Loan Note, the Term Loan Note, and/or any other defined terms or anyLoan Documents in any Loan Documents shall be deemed to be a reference to anysuch defined terms or such agreements as such terms or agreements are amendedor modified by this Amendment.  Anybreach of any representation, warranty, covenant 

 

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or agreement contained in this Amendment shall bedeemed to be an Event of Default for all purposes of the Credit Agreement.

 

Section 5.  Conditions Precedent.  The effectiveness of this Amendment and theobligations of the Administrative Agent and each Lender hereunder are subjectto the satisfaction, or waiver by the Administrative Agent, of the followingconditions precedent on or before the date hereof (unless otherwise provided oragreed to by the Administrative Agent) in addition to the conditions precedentspecified in Section 12.2 of the Credit Agreement:

 

A.                                   The Company shall have paid and/or reimbursedall reasonable fees, costs and expenses relating to this Amendment and owed tothe Lender pursuant to the Credit Agreement in connection with this Amendment.

 

B.                                     The Company shall have delivered, or caused tobe delivered, original fully completed, dated and executed originals of (i) thisAmendment, and (ii) such other certificates, instruments, agreements ordocuments as the Administrative Agent may reasonably request (each of theforegoing certificates, instruments, agreements and documents described in thisSection 5(B) (other than this Amendment) which constitute LoanDocuments are hereinafter referred to collectively as the “Other Documents”).

 

C.                                     The following statements shall be true andcorrect and the Company, by executing and delivering this Amendment to theLender and the Administrative Agent, hereby certifies that the followingstatements are true and correct as of the date hereof:

 

(1)                                  Other than as expressly contemplated by this Amendment, since the date ofthe most recent financial statements furnished by the Company to theAdministrative Agent (which financial statements were true and correct in allmaterial respects and otherwise conformed to the requirements set forth in theCredit Agreement for such financial statements), there shall have been nochange which has had or will have a material adverse effect on the business,operations, properties or financial condition of the Loan Parties taken as awhole;

 

(2)                                  The representations and warranties of the Company set forth in the CreditAgreement and the other Loan Documents (as amended by this Amendment) are trueand correct in all respects on and as of the date of this Amendment with thesame effect as though made on and as of such date, except to the extent suchrepresentations and warranties expressly relate to an earlier date, and noUnmatured Event of Default or Event of Default has occurred and is continuing;and

 

(3)                                  No consents, licenses or approvals are required in connection with theexecution, delivery and performance by the Company of this Amendment or theOther Documents or the validity or enforceability against the Company of thisAmendment or the Other Documents which have not been obtained and delivered tothe Lender.

 

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Section 6.  Miscellaneous.

 

A.                                   Except as expressly amended and modified bythis Amendment, the Credit Agreement and the other Loan Documents are and shallcontinue to be in full force and effect in accordance with the terms thereof.

 

B.                                     This Amendment may be executed by the partieshereto in counterparts, and all of such counterparts taken together shall bedeemed to constitute one and the same instrument.

 

C.                                     This Amendment shall be construed inaccordance with and governed by the internal laws, and not the laws ofconflict, of the State of Illinois.

 

D.                                    The headings contained in this Amendment arefor ease of reference only and shall not be considered in construing thisAmendment.

 

[SIGNATURE PAGES FOLLOW]

 

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INWITNESS WHEREOF, the parties hereto have caused this Third Amendment to CreditAgreement to be duly executed as of the day and year first above written.

 
|   | **COMPANY:**                          |
|--------|---------------------------------------|
|   | ** **                            |
|   | CONTINENTAL  MATERIALS CORPORATION    |
|   |                                  |
|   | By:                                   |   |
|   |                                  | Joseph  J. Sum |
|   |                                  | Chief  Financial Officer |
|   |                                  |   |
|   |                                  |
|   | **ADMINISTRATIVE  AGENT AND LENDER:** |
|   | ** **                            |
|   | ** **                            |
|   | THE  PRIVATEBANK AND TRUST COMPANY    |
|   |                                  |
|   | By:                                   |   |
|   |                                  | Steven  M. Cohen |
|   |                                  | Managing  Director & Senior Vice President |

 

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