**Exhibit 10**

 

**FIRST AMENDMENT TOREVOLVING CREDIT AND TERM LOAN AGREEMENT**

 

This First Amendment to Revolving Credit and TermLoan Agreement (this “First Amendment”) is made and entered into as of the 29thday of May, 2004, by and among Continental Materials Corporation, a Delawarecorporation (“Borrower”), LaSalle Bank National Association, a national bankingassociation, as administrative agent and as a lender (LaSalle in its capacityas administrative agent referred to in this Agreement as “Agent” and in itscapacity as a lender as “LaSalle”) and Fifth Third Bank (Chicago), a Michiganbanking corporation, as a lender (“Fifth Third”) (LaSalle and Fifth Third areeach referred to individually in this First Amendment as a “Lender” andcollectively as the “Lenders”).

 

**W I T N E S S E T H****:**

 

**WHEREAS,** prior hereto,Lenders provided certain loans, extensions of credit and other financialaccommodations to Borrower pursuant to (a) that certain Revolving Credit andTerm Loan Agreement dated as of September 5, 2003, by and among Lenders,Borrower and Agent (the “Credit Agreement”), and (b) the other documents,agreements and instruments referenced in the Credit Agreement or executed anddelivered pursuant thereto;

 

**WHEREAS,** Borrower desiresLenders to (a) extend the Termination Date to July 31, 2006, and (b)increase the permitted amount of Borrower’s capital stock which may bepurchased by Borrower to a total amount not to exceed $2,750,000 in theaggregate (collectively, the “Additional Financial Accommodations”); and

 

**WHEREAS,** Lenders arewilling to provide the Additional Financial Accommodations, but solely on theterms and subject to the provisions set forth in this First Amendment and theother agreements, documents and instruments referenced herein or executed and deliveredpursuant hereto.

 

**NOW, THEREFORE**, in considerationof the foregoing, the mutual promises and understandings of the parties heretoset forth herein, and other good and valuable consideration, the receipt andsufficiency of such consideration is hereby acknowledged, the parties heretohereby agree as set forth in this First Amendment.

 

I.                                         **Definitions****:**

 

A.                                   **Useof Defined Terms**.  Except asexpressly set forth in this First Amendment, all terms which have an initialcapital letter where not required by the rules of grammar are defined in theCredit Agreement.

 

B.                                     **AmendedDefinitions**.  Section 1.1 of the CreditAgreement is hereby amended by deleting the definition of “Termination Date”and substituting therefor the following:

 

“Termination Date” shall mean July 31,2006.

 

II.                                     **Amendment to Credit Agreement**.  Effective as of the date of this FirstAmendment, the Credit Agreement is hereby amended by deleting Section 6.7of the Credit Agreement in its entirety and substituting the followingtherefor:

 

“SECTION 6.7                    CAPITAL STRUCTUREAND DIVIDENDS.

 

Neither Borrower nor anySubsidiary shall purchase or redeem, or obligate itself to purchase or redeem,any shares of Borrower’s capital stock, of any class, issued and

 

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outstanding from time to time, provided, however,that Borrower may purchase an amount of Borrower’s capital stock in a totalamount not to exceed $2,750,000 in the aggregate (as determined for the periodbeginning May 29, 2004 and ending on the Termination Date); or declare or payany dividend (other than dividends payable in its own common stock or toBorrower) or make any other distribution in respect of such shares other thanto Borrower. Borrower shall continue to own, directly or indirectly, the same(or greater) percentage of the stock of each Subsidiary that it held on thedate of this Agreement, and no Subsidiary shall issue any additional securitiesother than to Borrower.”

 

III.                                 **ConditionsPrecedent**. Lenders’ obligation to provide the Additional Financial Accommodationsto Borrower is subject to the full and timely performance of the followingcovenants prior to or contemporaneously with the execution of this FirstAmendment:

 

A.           Borrower executing and delivering, orcausing to be executed and delivered to Agent and Lenders, the followingdocuments, each of which shall be in form and substance acceptable to Agent andLenders:

 

(i)                                     A fully executedoriginal of a Company General Certificate executed and delivered by Borrower toAgent and Lenders;

 

(ii)                                  A fully executeoriginal Reaffirmation of Guaranties executed and delivered to Agent andLenders by each of the Borrower’s Subsidiaries that executed the SubsidiaryGuaranties; and

 

(iii)                               such otheragreements, documents and instruments as Agent or Lenders may reasonablyrequest;

 

B.             No Event ofDefault or Unmatured Event of Default exists under the Credit Agreement, asamended by this First Amendment, or the other Loan Documents;

 

C.             No claims,litigation, arbitration proceedings or governmental proceedings not disclosedin writing to Agent prior to the date hereof shall be pending or known to bethreatened against Borrower and no known material development not so disclosedshall have occurred in any claims, litigation, arbitration proceedings orgovernmental proceedings so disclosed which in the opinion of Agent is likelyto materially and adversely affect the financial position or business ofBorrower or the capability of Borrower to pay its obligations and liabilitiesto Lenders; and

 

D.            There shall havebeen no material or adverse change in the business, financial condition orresults of operations since the date of Borrower’s most recently deliveredfinancial statements to Agent and Lenders.

 

IV.                                 **Conflict**.  If, and to the extent, the terms andprovisions of this First Amendment contradict or conflict with the terms andprovisions of the Credit Agreement, the terms and provisions of this FirstAmendment shall govern and control; provided, however, to the extent the termsand provisions of this First Amendment do not contradict or conflict with theterms and provisions of the Credit Agreement, the Credit Agreement, as amendedby this First Amendment, shall remain in and have its intended full force andeffect, and Lenders, Borrower and the Agent hereby affirm, confirm and ratifythe same.

 

V.                                     **Severability****.** Wherever possible, each provision of thisFirst Amendment shall be interpreted in such manner as to be valid andenforceable under applicable law, but if any provision of this First Amendmentis held to be invalid or unenforceable by a court of competent jurisdiction,such provision shall be severed herefrom and such invalidity orunenforceability shall not affect any other provision of this First Amendment,the balance of which shall remain in and have its intended full force andeffect.  Provided, however, if suchprovision may be modified so as to be valid and enforceable as a matter of law,such provision shall be deemed to be modified so as to be valid and enforceableto the maximum extent permitted by law.

 

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VI.                                 **Reaffirmation**.  Borrower hereby reaffirms and remakes all ofits representations, warranties, covenants, duties, obligations and liabilitiescontained in the Credit Agreement, as amended hereby.

 

VII.                             **Fees,Costs and Expenses****.**  Borrower agrees to pay, upon demand, allfees, costs and expenses of Lenders, including, but not limited to, reasonableattorneys’ fees, in connection with the preparation, execution, delivery andadministration of this First Amendment and the other agreements, documents andinstruments executed and delivered in connection herewith or pursuant hereto.

 

VIII.                         **Choiceof Law**.  This First Amendment shall begoverned by and construed in accordance with the laws of the State of Illinois,regardless of the laws that might otherwise govern under applicable principlesof conflicts of law as to all matters, including matters of validity,construction, effect, performance and remedies.

 

 

**IN WITNESS WHEREOF,** Lenders, Borrowerand Agent have caused this First Amendment to be executed and delivered bytheir duly authorized officers as of the date first set forth above.

 

 
|   | **CONTINENTAL  MATERIALS CORPORATION**  |
|--------|-----------------------------------------|
|   |                                    |   |
|   |                                    |   |
|   | By:                                     |   |   |
|   |                                    | Joseph J. Sum, Vice President |
|   |                                    |   |
|   | **LASALLE  BANK NATIONAL ASSOCIATION**, |
|   | as Agent and a Lender                   |
|   |                                    |   |
|   |                                    |   |
|   | By:                                     |   |   |
|   | Its:                                    |   |   |
|   |                                    |   |
|   | **FIFTH  THIRD BANK (CHICAGO),**        |
|   | as a Lender                             |
|   |                                    |   |
|   |                                    |   |
|   | By:                                     |   |   |
|   | Its:                                    |   |   |

 

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