**Exhibit10.2(a)**

 

FIRST AMENDMENT TO

 

LOAN AND SECURITYAGREEMENT

 

THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”)is entered into as of and effective as of October 31, 2002, (the “EffectiveDate”), by and among BANK OF AMERICA, NATIONAL ASSOCIATION, asadministrative agent (“Administrative Agent”) for the other lendersidentified on the signature pages hereof (the “Lenders”), and METALSUSA, INC. and each of its subsidiaries (the “Subsidiaries”) which areparties hereto (collectively, the “Borrowers”).

 

RECITALS

 

(a)                                  Borrowers,Administrative Agent and the Lenders are parties to that certain Loan andSecurity Agreement dated as of October 31, 2002 (as amended through thedate hereof, the “Agreement”; terms defined in the Agreement and nototherwise defined herein shall be used herein as defined in the Agreement).

 

(b)                                 Borrowers,Administrative Agent, and the Lenders desire to amend the Agreement to providefor certain modifications as set forth herein, all subject to the terms andconditions contained herein.

 

NOW, THEREFORE, in consideration of the covenants, conditions andagreements hereafter set forth, and for other good and valuable consideration,the receipt and adequacy of which are all hereby acknowledged, the partieshereto covenant and agree as follows:

 

# 1.                                       AMENDMENTTO THE AGREEMENT.  Effective as ofthe Effective Date, the Agreement is hereby amended as follows:

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## 1.1                                 Amendmentto Section 1.1 of the Agreement.  Section1.1 of the Agreement is amended as follows:

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### (a)                                  Thefollowing definition of Material Adverse Change is added as a new definition toSection 1.1 of the Agreement:

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“MaterialAdverse Change” means any of the following occurrences, whether singularly,or together:

 

(1)                                  Anydeterioration in the consolidated net worth of the Borrowers that exceedstwenty five percent (25%) of the net worth reflected on the consolidatedFinancial Statements delivered by the Borrowers to the Agent in respect of theprevious reporting period.

 

(2)                                  Inany calendar year, the loss by the Borrowers of a customer, the sales to whomfor the immediately preceding calendar year

 

 

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accountedfor ten percent (10%) or more of the Borrowers’ total sales volume for theimmediately preceding calendar year.

 

(3)                                  Theoccurrence of a labor strike, walkout, work stoppage, or similar labor dispute,which affects, without duplication, fifteen percent (15%) or more of thecombined workforce of the Borrowers.

 

(4)                                  Therate of product return (as a result of product defect) relating to sales forthe Borrowers (taken as a whole) for any month exceeds ten percent (10%) ofBorrowers’ gross sales for the same month; provided, however, if suchrate of product return (as a result of product defect) for any month exceedsten percent (10%) of Borrowers’ gross sales for the same month because ofdefective product delivered by Borrowers, or any Borrower, to an individualcustomer (as opposed to multiple customers), such an event will not constitutea Material Adverse Change.

 

(5)                                  Anyof the President, Chief Executive Officer, Chief Financial Officer, or ChiefOperating Officer of the Parent is convicted of a criminal offense related toactions taken (or omitted to be taken) by such officer in such officer’scapacity as an officer of the Parent.

 

(6)                                  Aforce majeure event occurs which results in a loss of ten percent (10%) or moreof Borrowers’ gross revenues if such loss of revenues is not fully covered byinsurance (exclusive of any deductibles).

 

### (b)                                 Theexisting definition of “Material Adverse Effect” is restated in its entirety toread as follows:

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“MaterialAdverse Effect” means (a) a Material Adverse Change, (b) the inability ofthe Borrowers, taken as a whole, to meet the debt service obligations known tomature within sixty (60) days of any determination date, under any financingagreements to which they are a party, wherein such debt service obligationsexceeds the average Availability of the Borrowers taken as a whole over the ten(10) Business Days immediately preceding the determination date, or (c) aruling by a court of competent jurisdiction which upholds a claim contestingthe legality, validity, binding effect, or enforceability against any Borrowerof any material Loan Document to which it is a party.

 

## 1.2                                 Amendmentto Section 2.2(i)(i) of the Agreement.  Section 2.2(i)(i) of the Agreement is amended andrestated in its entirety to read as set forth below:

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(i)                                     Subjectto the limitations set forth in the provisos contained in this Section 2.2(i)and Section 13.2, the Agent is hereby authorized by the Borrowers

 

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and the Lenders, from time to time in the Agent’s sole discretion,(A) after the occurrence of a Default or an Event of Default, or(B) at any time that any of the other applicable conditions precedent setforth in Article 10 have not been satisfied, to make Base RateRevolving Loans to any Borrower on behalf of the Lenders which the Agent, inits reasonable business judgment, deems necessary or desirable (1) topreserve or protect the Collateral, or any portion thereof, (2) to enhancethe likelihood of, or maximize the amount of, repayment of the Revolving Loansand other Obligations, or (3) to pay any other amount chargeable to theBorrowers pursuant to the terms of this Agreement, including costs, fees, andexpenses as described in Section 15.7 (any of the advancesdescribed in this Section 2.2(i) being hereinafter referred to as “AgentAdvances”); provided that Agent Advances outstanding and unpaid atno time will exceed $10,000,000 in the aggregate, and provided furtherthat the Required Lenders may at any time revoke the Agent’s authorizationcontained in this Section 2.2(i) to make Agent Advances, any suchrevocation to be in writing and to become effective prospectively upon theAgent’s receipt thereof;

 

## 1.3                                 Amendmentto Section 2.3(h)(i) of the Agreement. Section 2.3(h)(i) of the Agreement is amended and restated in itsentirety to read as set forth below:

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#### (i)                                     Indemnification.  IN ADDITION TO AMOUNTS PAYABLE AS ELSEWHEREPROVIDED IN THIS SECTION 2.3, EACH BORROWER HEREBY AGREES TOPROTECT, INDEMNIFY, PAY, AND SAVE THE LENDERS AND THE AGENT HARMLESS FROM ANDAGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES, DAMAGES, LOSSES, COSTS,CHARGES, AND EXPENSES (INCLUDING ATTORNEYS COSTS) WHICH ANY LENDER OR THE AGENT(OTHER THAN THE BANK IN ITS CAPACITY AS THE LETTER OF CREDIT ISSUER) MAY INCUROR BE SUBJECT TO AS A CONSEQUENCE, DIRECT OR INDIRECT, OF THE ISSUANCE OF ANYLETTER OF CREDIT OR THE PROVISION OF ANY CREDIT SUPPORT OR ENHANCEMENT INCONNECTION THEREWITH (INCLUDING SUCH CLAIMS, DEMANDS, LIABILITIES, DAMAGES,LOSSES, COSTS, CHARGES AND EXPENSES RESULTING FROM THE NEGLIGENCE OF SUCHLENDER OR THE AGENT, BUT EXCLUDING, HOWEVER, ANY SUCH CLAIMS, DEMANDS,LIABILITIES, DAMAGES, LOSSES, COSTS, CHARGES, AND EXPENSES RESULTING FROM THEGROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH LENDER OR THE AGENT).  THE AGREEMENT IN THIS SECTION 2.3(h)(i)SHALL SURVIVE PAYMENT OF ALL OBLIGATIONS. NOTHING CONTAINED IN THIS AGREEMENT IS INTENDED TO LIMIT ANY BORROWER’SRIGHTS, IF ANY, WITH RESPECT TO THE LETTER OF CREDIT ISSUER WHICH ARISE AS ARESULT OF THE LETTER OF CREDIT APPLICATION AND RELATED DOCUMENTS EXECUTED BYAND BETWEEN ANY BORROWER AND THE LETTER OF CREDIT ISSUER.

 

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## 1.4                                 Amendmentto Section 4.6 of the Agreement. Section 4.6 of the Agreement is amended and restated in its entirety toread as set forth below:

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Section 4.6                                      Apportionment,Application, and Reversal of Payments. Except as otherwise expressly provided by this Agreement, aggregateprincipal and interest payments shall be apportioned ratably among the Lenders(according to the unpaid principal balance of the Revolving Loans to which suchpayments relate held by each Lender) and payments of the fees shall, asapplicable, be apportioned ratably among the Lenders.  All payments shall be remitted to the Agent and all such paymentsnot relating to principal or interest of specific Revolving Loans, or notconstituting payment of specific fees, and all proceeds of any Borrower’sAccounts or any other Collateral received by the Agent, shall be applied,ratably, subject to the provisions of this Agreement, first, to pay anyfees, indemnities, or expense reimbursements, then due to the Agent from theBorrowers; second, to pay any fees or expense reimbursements then due tothe Lenders from the Borrowers; third, to pay interest due in respect ofthe Revolving Loans; fourth, to pay or prepay principal of the Non-RatableLoans and the Agent Advances; fifth, to pay or prepay principal of theRevolving Loans (other than the Non-Ratable Loans and the AgentAdvances), unpaid reimbursement obligations in respect of Letters of Credit andCredit Support; and sixth, to the payment of any other Obligation due tothe Agent or any Lender by the Borrowers. Notwithstanding anything to the contrary contained in this Agreement,unless so directed by a Borrower, or unless an Event of Default is inexistence, neither the Agent nor any Lender shall apply any payment which itreceives to any LIBOR Rate Revolving Loan except (a) on the expirationdate of the Interest Period applicable to any such LIBOR Rate Revolving Loan,or (b) in the event, and only to the extent, that there are no outstandingBase Rate Revolving Loans.  The Agentshall promptly distribute to each Lender, pursuant to the applicable wiretransfer instructions received from each Lender in writing, such funds as itmay be entitled to receive, subject to a Settlement delay as provided for in Section 2.2(j).  The Agent and the Lenders shall have thecontinuing and exclusive right to apply and reverse and reapply any and allsuch proceeds and payments to any portion of the Obligations.

 

## 1.5                                 Amendmentto Section 9.14 of the Agreement. Section 9.14 of the Agreement is amended and restated in itsentirety to read as follows:

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Section 9.14  Prepayment of Debt.  No Borrower shall voluntarily prepay anyFunded Debt, except the Obligations in accordance with the terms of thisAgreement, provided that for so long as no Default is in existence orwould result therefrom, and so long as before and after giving effect to suchprepayment, the Availability (calculated for purposes hereof utilizing 100% ofthe total Borrowing Base, without applying the Maximum Revolver Amount limit)is greater than or equal to $20,000,000 (a) a Borrower may voluntarily prepayDebt owing by such Borrower to another Borrower, (b) if the Fixed ChargeCoverage Ratio is greater

 

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than or equal to 1.0 to 1.0, a Borrower may voluntarily prepay CapitalLeases and other purchase money Funded Debt, (c) a Borrower may voluntarilyprepay Capital Leases and other purchase money Funded Debt in connection withany refinancing of such Capital Leases and other purchase money Funded Debt orreplacement of the Fixed Assets subject to such prepaid financing with newFixed Assets usable in such Borrower’s business and subject to additionalCapital Leases or other purchase money Funded Debt; and (d) a Borrower mayvoluntarily prepay Debt secured by assets sold.

 

## 1.6                                 Amendmentto Section 15.11(a) of the Agreement. Section 15.11(a) of the Agreement is amended and restated in itsentirety to read as follows:

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(a)                                  EACHBORROWER AGREES TO DEFEND, INDEMNIFY, AND HOLD THE AGENT-RELATED PERSONSAND EACH LENDER AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,COUNSEL, AGENTS, AND ATTORNEYS-IN-FACT (EACH, AN “INDEMNIFIED PERSON”)HARMLESS FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, CHARGES, EXPENSES, ANDDISBURSEMENTS (INCLUDING ATTORNEY COSTS) OF ANY KIND OR NATURE WHATSOEVER WHICHMAY AT ANY TIME (INCLUDING AT ANY TIME FOLLOWING REPAYMENT OF THE REVOLVINGLOANS AND THE TERMINATION, RESIGNATION, OR REPLACEMENT OF THE AGENT ORREPLACEMENT OF ANY LENDER) BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST ANYSUCH PERSON IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANYDOCUMENT CONTEMPLATED BY OR REFERRED TO HEREIN, OR THE TRANSACTIONSCONTEMPLATED HEREBY, OR ANY ACTION TAKEN OR OMITTED BY ANY SUCH PERSON UNDER ORIN CONNECTION WITH ANY OF THE FOREGOING, INCLUDING WITH RESPECT TO ANYINVESTIGATION, LITIGATION, OR PROCEEDING (INCLUDING ANY INSOLVENCY PROCEEDINGOR APPELLATE PROCEEDING) RELATED TO OR ARISING OUT OF THIS AGREEMENT, ANY OTHERLOAN DOCUMENT, OR THE REVOLVING LOANS OR THE USE OF THE PROCEEDS THEREOF,WHETHER OR NOT ANY INDEMNIFIED PERSON IS A PARTY THERETO INCLUDING ANY SUCHLIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,SUITS, COSTS, CHARGES, EXPENSES AND REIMBURSEMENTS RESULTING FROM THENEGLIGENCE OF SUCH INDEMNIFIED PERSON (ALL THE FOREGOING, COLLECTIVELY, THE “INDEMNIFIEDLIABILITIES”); PROVIDED THAT THE BORROWERS SHALL HAVE NO OBLIGATIONHEREUNDER TO ANY INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIESRESULTING SOLELY FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCHINDEMNIFIED PERSON OR ITS RESPECTIVE AFFILIATES.

 

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THE AGREEMENTS IN THIS SECTION 15.11 SHALL SURVIVE PAYMENTOF ALL OTHER OBLIGATIONS.

 

# 2.                                       ACKNOWLEDGMENTOF THE BORROWERS.  The Borrowersacknowledge and agree that the Lenders executing this Amendment have done so intheir sole discretion and without any obligation to consent to any other orfuture amendments to the Agreement.  TheBorrowers further acknowledge and agree that any action taken or not taken bythe Lenders or the Administrative Agent prior to, on or after the date hereofshall not constitute a waiver or modification of any term, covenant orprovision of any Loan Document.

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# 3.                                       REPRESENTATIONSAND WARRANTIES.  By its executionand delivery hereof, the Borrowers represent and warrant to the Lenders that,as of the date hereof the representations and warranties contained in theAgreement and the other Loan Documents are true and correct on and as of thedate hereof as if made on and as of such date, and no event has occurred and iscontinuing which constitutes a Default or an Event of Default.

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# 4.                                       CONDITIONSOF EFFECTIVENESS.  This Amendmentshall be effective as of the Effective Date upon execution by the MajorityLenders and the other parties hereto, so long as all corporate actions ofBorrowers taken in connection herewith and the transactions contemplated herebyshall be satisfactory in form and substance to Administrative Agent andLenders, and Administrative Agent shall have received such other documents,certificates, and instruments as Administrative Agent shall reasonably requireprior to the Agent’s receipt of this Amendment executed by the Majority Lendersand the other parties hereto.

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# 5.                                       REFERENCETO AGREEMENT.  Upon theeffectiveness of this Amendment, each reference in the Agreement to “thisAgreement,” “hereunder,” or words of like import shall mean and be a referenceto the Agreement, as affected and amended by this Amendment.

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# 6.                                       COUNTERPARTS;EXECUTION VIA FACSIMILE.  ThisAmendment may be executed in one or more counterparts, each of which shall bedeemed an original, but all of which together shall constitute one and the sameinstrument.  This Amendment may bevalidly executed and delivered by facsimile or other electronic transmission.

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# 7.                                       GOVERNINGLAW: BINDING EFFECT.  This Amendmentshall be governed by and construed in accordance with the laws of the State ofTexas and shall be binding upon the Borrower, the Administrative Agent, eachLender and their respective successors and assigns.

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# 8.                                       HEADINGS.  Section headings in this Amendment areincluded herein for convenience of reference only and shall not constitute apart of this Amendment for any other purpose.

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# 9.                                       LOANDOCUMENT.  This Amendment is a LoanDocument and is subject to all provisions of the Agreement applicable to LoanDocuments, all of which are incorporated in this Amendment by reference thesame as if set forth in this Amendment verbatim.

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# 10.                                 ACKNOWLEDGEMENTOF LENDERS.  Each Lenderacknowledges that as of the date of this Amendment, and giving effect to thisAmendment, it’s respective Commitment is as set forth opposite its respectivesignature to this Amendment.

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# 11.                                 FEESAND EXPENSES.  Borrowers agree topay all reasonable out-of-pocket fees and expenses in connection with the LoanDocuments, including this Amendment, including without limitation, appraisalfees, filing and recording fees, legal and other professional fees andexpenses, if any, incurred on or prior to the date of this Amendment byAdministrative Agent, including, without limitation, the fees and expenses ofWinstead Sechrest & Minick P.C.

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# 12.                                 NOORAL AGREEMENTS.  THIS WRITTENAGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEENTHE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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[REMAINDER OF PAGEINTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment asthe date first above written.

 
|   | BORROWERS:                             |
|--------|----------------------------------------|
|   |                                   |
|   | METALS  USA, INC.                      |
|   |                                   |
|   |                                   |
|   | By:                                    | /s/  TERRY L. FREEMAN |
|   | Name:                                  | Terry L.  Freeman |
|   | Title:                                 | Senior  Vice President and |
|   |                                   | Chief  Financial Officer |
|   |                                   |
|   |                                   |
|   | AGENT:                                 |
|   |                                   |
|   | BANK  OF AMERICA, NATIONAL ASSOCIATION |
|   |                                   |
|   |                                   |
|   | By:                                    | /s/  ROBERT SCALZITTI |
|   | Name:                                  | Robert  Scalzitti |
|   | Title:                                 | Vice  President |
|        |                                        |  |  |

 

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|   | ALLMET  BUILDING PRODUCTS, L.P.                 |
|--------|-------------------------------------------------|
|   |                                            | By: | Allmet  GP, Inc., its General Partner |
|   |                                            |   |   |
|   | ALLMET  GP, INC.                                |
|   | ALLMET  LP, INC.                                |
|   | CORNERSTONE  BUILDING PRODUCTS, INC.            |
|   | CORNERSTONE  METALS CORPORATION                 |
|   | CORNERSTONE  PATIO CONCEPTS, L.L.C.             |
|   |                                            | By: | Metals  USA, Inc., its sole Member |
|   |                                            |   |   |
|   | INTERSTATE  STEEL SUPPLY CO. OF MARYLAND,       |
|   |                                            | INC. |   |
|   | INTSEL  GP, INC.                                |
|   | INTSEL  LP, INC.                                |
|   | i-SOLUTIONS  DIRECT, INC.                       |
|   | JEFFREYS  REAL ESTATE CORPORATION               |
|   | LEVINSON  STEEL GP, INC.                        |
|   | LEVINSON  STEEL LP, INC.                        |
|   | METALS  RECEIVABLES CORPORATION                 |
|   | METALS  USA BUILDING PRODUCTS SOUTHEAST,        |
|   |                                            | INC. |   |
|   | METALS  USA CARBON FLAT ROLLED, INC.            |
|   | METALS  USA FINANCE CORP.                       |
|   | METALS  USA FLAT ROLLED CENTRAL, INC.           |
|   | METALS  USA MANAGEMENT CO., L.P.                |
|   |                                            | By: | MUSA  GP, Inc., its General Partner |
|   |                                            |   |   |
|   | METALS  USA PLATES AND SHAPES, NORTHEAST, L.P.  |
|   |                                            | By: | Levinson  Steel GP, Inc., its General Partner |
|   |                                            |   |   |
|   | METALS  USA PLATES AND SHAPES SOUTHCENTRAL,     |
|   |                                            | INC. |   |
|   | METALS  USA PLATES AND SHAPES SOUTHEAST, INC.   |
|   | METALS  USA PLATES AND SHAPES SOUTHWEST,        |
|   | LIMITED  PARTNERSHIP                            |
|   |                                            | By: | Intsel  GP, Inc., its General Partner |
|   |                                            |   |   |
|   | METALS  USA REALTY COMPANY                      |
|   | METALS  USA SPECIALTY METALS NORTHCENTRAL, INC. |
|   | MUSA  GP, INC.                                  |
|   | MUSA  LP, INC.                                  |
|   | NATIONAL  MANUFACTURING, INC.                   |
|   | QUEENSBORO,  L.L.C.                             |
|   |                                            | By: | Metals  USA Plates and Shapes Southeast, Inc., |
|   |                                            |   | its  sole Member |
|   |                                            |
|   | TEXAS  ALUMINUM INDUSTRIES, INC.                |
|   | VALLEY  ALUMINUM CO.                            |
|   | VALLEY  ALUMINUM OF NEVADA, INC.                |
|   | WESTERN  AWNING COMPANY, INC.                   |
|   |                                            |
|   |                                            |
|   | By:                                             | /s/  TERRY L. FREEMAN |
|   | Name:                                           | Terry L.  Freeman |
|   | Title:                                          | Vice  President of each of the above-listed entities |
|        |                                                 |  |  |  |

 

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