**Exhibit 4.5**

 

**FIRST AMENDMENT TO FORBEARANCE AGREEMENT**

 

**THIS FIRST AMENDMENTTO FORBEARANCE AGREEMENT** (the “Agreement”) ismade and entered into as of January 24, 2003, by and between GENERAL ELECTRICCAPITAL CORPORATION, for itself and as agent for certain participants (“Lender”)and ATCHISON CASTING CORPORATION, a Kansas corporation (“Borrower”).

 

**RECITALS**

 

A.                                   Borrowerand Lender are parties to that certain Master Security Agreement dated as ofDecember 29, 1999, as amended by that certain Amendment No. 1 to MasterSecurity Agreement and Other Related Documents (“Amendment No. 1”) datedas of February 25, 2000 (which, among other things, amended the effective dateof such Master Security Agreement to December 28, 1999; such Master SecurityAgreement, as amended by Amendment No. 1, and as amended by that certainForbearance Agreement and Second Amendment to Master Security Agreement andNote, dated as of October 17, 2002 (the “Forbearance Agreement”), and asamended from time to time, is herein referred to as the “Master Agreement”).  Capitalized terms used herein and nototherwise defined shall have the same definition as set forth in theForbearance Agreement or the Master Agreement.

 

B.                                     TheForbearance Period has terminated as the result of a Variance BasedTermination.

 

C.                                     Lenderand Borrower desire to amend the Forbearance Agreement pursuant to the terms ofthe Agreement.

 

**AGREEMENT**

 

Inconsideration of the Recitals and of the mutual promises and covenantscontained herein, Lender and Borrower agree as follows:

 

1.                                       **Amendmentto Forbearance Agreement.** The Forbearance Agreement is amended as follows:

 

(a)  Section 1 of the ForbearanceAgreement is hereby deleted and the following is inserted therefor:

 

“1.  During the period (the “ForbearancePeriod”) commencing on the Effective Date and ending on the earlier tooccur of (a) the date that any Forbearance Default (as defined in Section 7hereof) occurs or (b) the Final Forbearance Date (as defined in Section 3below), Lender will forbear in the exercise of its rights and remedies underthe Loan Documents with respect to the Existing Defaults and any other Eventsof Default (collectively, the “Designated Defaults”), except asset forth in the following sentence. Notwithstanding anything herein to the contrary, the Designated Defaultsshall not include (x) those Events of Default of the type or nature identifiedin Section 7(b), (c), (e) (but only to the extent the samerelates to the maintenance or protection of Collateral), (g), (i),(j), (k) and (m) of the Master Agreement, (y) any defaultin

 

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theperformance of obligations of the Borrower under this Agreement, and (z) anydefault under the Mortgages arising out of Borrower’s failure to maintain orprotect the Real Estate Collateral.”

 

(b)  Section 3 of the ForbearanceAgreement and all of its subsections are hereby deleted and the following isinserted therefor:

 

“3.  Final Forbearance Date.  The term “Final Forbearance Date”, asused in this Agreement shall mean June 29, 2003.”

 

(c)  Section 7 of the ForbearanceAgreement and all of its subsections are hereby deleted and the following isinserted therefor:

 

“7.  **Default.**  Each of the following shall constitute a “ForbearanceDefault” hereunder:

 

(a)                                  **Events ofDefault**.  The existenceof any

 

(i)  Event of Default whichoccurs as a result of Borrower’s **(A)** insolvency or bankruptcy, or **(B)**failure to make any payment as and when due under or pursuant to the MasterAgreement, Note or any other Loan Document; or

 

(ii)  Event of Default ordefault under any Loan Document (other than a Designated Default, and otherthan those Events of Default described in Section 7(a)(i) above),provided that any such Event of Default or default shall not constitute aForbearance Default if the same is capable of being cured and is cured withinthirty (30) days of the date of first occurrence; or

 

(b)                                 **HarrisFacilities Become Due**. If any of the Harris Facilities or the obligations owed to the HarrisLenders under or pursuant to the Harris Facilities, are accelerated orotherwise become due and payable in full for any reason.”

 

2.                                       **ConditionsPrecedent to Effectiveness of Agreement.**  The provisions set forth in Section 1of this Agreement shall not be effective unless and until each of the followingconditions shall have been satisfied in Lender’s sole discretion or waived byLender, for whose sole benefit such conditions exist:

 

(a)                                  **Costs andExpenses**.  Borrower shallhave paid to the Lender by wire transfer of good funds, its costs and expenses(including Lender’s attorneys fees) incurred in connection with the preparationof this Agreement and any other outstanding costs and expenses owing byBorrower to Lender under the Loan Documents as of the date this Agreement isexecuted.

 

(b)                                 **Executionand Delivery**.  Borrowershall have executed and delivered this Agreement.

 

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3.                                       **Representationsand Warranties.**  Borrowerhereby represents and warrants to Lender as follows:

 

(a)                                  **Recitals.**  The Recitals in this Agreement are true andcorrect in all respects.

 

(b)                                 **Incorporationof Representations.**  Allrepresentations and warranties of Borrower in the Master Agreement areincorporated herein in full by this reference and are true and correct in allmaterial respects as of the date hereof; provided, however, that Schedule2(f) of the Master Agreement is hereby replaced and updated by Schedule2(f) attached to this Agreement.

 

(c)                                  **CorporatePower; Authorization.** Borrower has the corporate power, and has been duly authorized by allrequisite corporate action, to execute and deliver this Agreement and toperform its obligations hereunder and thereunder.  This Agreement has been duly executed and delivered by Borrower.

 

(d)                                 **Enforceability.**  This Agreement is the legal, valid andbinding obligations of Borrower, enforceable against Borrower in accordancewith its respective terms.

 

(e)                                  **NoViolation.**  Borrower’sexecution, delivery and performance of this Agreement does not and will not (i)violate any law, rule, regulation or court order to which Borrower is subject;(ii) conflict with or result in a breach of Borrower’s Articles ofIncorporation or Bylaws or any agreement or instrument to which Borrower isparty or by which it or its properties are bound; or (iii) result in thecreation or imposition of any lien, security interest or encumbrance on anyproperty of Borrower, whether now owned or hereafter acquired, other than liensin favor of Lender.

 

(f)                                    **ObligationsAbsolute.**  The obligationof Borrower to repay the Loan, together with all interest accrued thereon, isabsolute and unconditional, and there exists no right of set off or recoupment,counterclaim or defense of any nature whatsoever to payment of the Obligations.

 

4.                                       **Effectand Construction of Agreement.** Except as expressly provided herein, the Loan Documents, including theMaster Agreement and the Forbearance Agreement (as amended hereby) shall remainin full force and effect in accordance with their respective terms, and thisAgreement shall not be construed to:

 

(i)                                     impairthe validity, perfection or priority of any lien or security interest securingthe Indebtedness;

 

(ii)                                  waiveor impair any rights, powers or remedies of Lender under the Loan Documentsupon termination of the Forbearance Period, with respect to the DesignatedDefaults or otherwise; or

 

(iii)                               constitutean agreement by Lender or require Lender to extend the Forbearance Period, orgrant additional forbearance periods, or extend the term of the Note or thetime for payment of any of the Indebtedness, except as expressly set forthherein.

 

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In the event of anyinconsistency between the terms of this Agreement and the Loan Documents, thisAgreement shall govern.  Borroweracknowledges that it has consulted with counsel and with such other experts andadvisors as it has deemed necessary in connection with the negotiation,execution and delivery of this Agreement. This Agreement shall be construed without regard to any presumption orrule requiring that it be construed against the party causing this Agreement orany part hereof to be drafted.

 

5.                                       **Expenses.**  Borrower agrees to pay all costs, fees andexpenses of Lender (including the fees of Lender’s counsel) incurred by Lenderin connection with the negotiation, preparation, administration and enforcementof this Agreement.

 

6.                                       **Miscellaneous.**

 

(a)                                  **Agreementas Debt Document**.  Lenderand Borrower agree that this Agreement is a Debt Document, as defined in theMaster Agreement.

 

(b)                                 **FurtherAssurance.**  Borroweragrees to execute such other and further documents and instruments as Lendermay request to implement the provisions of this Agreement.

 

(c)                                  **Benefitof Agreement.**  ThisAgreement shall be binding upon and inure to the benefit of and be enforceableby the parties hereto, their respective successors and assigns.  No other person or entity shall be entitledto claim any right or benefit hereunder, including, without limitation, thestatus of a third-party beneficiary of this Agreement.

 

(d)                                 **Integration.**  This Agreement, together with the LoanDocuments, including the Master Agreement and the Forbearance Agreement,constitutes the entire agreement and understanding among the parties relatingto the subject matter hereof, and supersedes all prior proposals, negotiations,agreements and understandings relating to such subject matter.  In entering this Agreement, Borroweracknowledges that it is relying on no statement, representation, warranty,covenant or agreement of any kind made by the Lender or any employee or agentof the Lender, except for the agreements of Lender set forth herein.

 

(e)                                  **Severability.**  The provisions of this Agreement areintended to be severable.  If anyprovisions of this Agreement shall be held invalid or unenforceable in whole orin part in any jurisdiction, such provision shall, as to such jurisdiction, beineffective to the extent of such invalidity or enforceability without in anymanner affecting the validity or enforceability of such provision in any otherjurisdiction or the remaining provisions of this Agreement in any jurisdiction.

 

(f)                                    **GoverningLaw.**  This Agreementshall be governed by and construed in accordance with the internal substantivelaws of the State of New York, without regard to the choice of law principlesof such state.

 

(g)                                 **VENUE;JURISDICTION; JURY TRIAL WAIVER.**  **LENDER, AND BORROWER EACH HEREBY IRREVOCABLY WAIVE THEIR RIGHT TO TRIALBY JURY IN ANY CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THEMASTER AGREEMENT, AND/OR THE LOAN DOCUMENTS.**

 

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(h)                                 **Counterparts;Telecopied Signatures.** This Agreement may be executed in any number of counterparts and bydifferent parties to this Agreement on separate counterparts, each of which,when so executed, shall be deemed an original, but all such counterparts shallconstitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall bedeemed to be an original signature hereto.

 

(i)                                     **Survival.**  All representations, warranties, covenants,agreements, undertakings, waivers and releases of Borrower contained hereinshall survive the termination of the Forbearance Period and payment in full ofthe Indebtedness of Borrower under the Loan Documents.

 

(j)                                     **Amendment.**  No amendment, modification, rescission,waiver or release of any provision of this Agreement shall be effective unlessthe same shall be in writing and signed by the parties hereto.

 

7.                                       **Releaseof Claims and Waiver.** Borrower hereby releases, remises, acquits and forever discharges Lenderand Lender’s employees, agents, representatives, consultants, attorneys,fiduciaries, servants, officers, directors, partners, predecessors, successorsand assigns, subsidiary corporations, parent corporations, and relatedcorporate divisions (all of the foregoing hereinafter called the “ReleasedParties”), from any and all actions and causes of action, judgments,executions, suits, debts, claims, demands, liabilities, obligations, damagesand expenses of any and every character, known or unknown, direct and/or indirect,at law or in equity, of whatsoever kind or nature, whether heretofore orhereafter arising, for or because of any matter or things done, omitted orsuffered to be done by any of the Released Parties prior to and including thedate of execution hereof, and in any way directly or indirectly arising out ofor in any way connected to this Agreement and the Loan Documents, including butnot limited to, claims relating to any settlement negotiations (all of theforegoing hereinafter called the “Released Matters”).  Borrower acknowledges that the agreements inthis paragraph are intended to be in full satisfaction of all or any allegedinjuries or damages arising in connection with the Released Matters.  Borrower represents and warrants to Lenderthat it has not purported to transfer, assign or otherwise convey any right,title or interest of Borrower in any Released Matter to any other Person andthat the foregoing constitutes a full and complete release of all ReleasedMatters.

 

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IN WITNESSWHEREOF, the parties hereto have executed this Agreement as of the day and yearfirst above written.

 
|   |   | GENERAL  ELECTRIC CAPITAL CORPORATION |
|--------|--------|---------------------------------------|
|   |   |                                  |
|   |   |                                  |
|   |   | By:                                   | /s/ Kevin G.  Wortman |   |
|   |   |                                  | Name: Kevin  G. Wortman |
|   |   |                                  | Title: SVP,  Strategic Asset Financing |
|   |   |                                  |
|   |   | ATCHISON  CASTING CORPORATION         |
|   |   |                                  |
|   |   |                                  |
|   |   | By:                                   | /s/ Kevin T.  McDermed |   |
|   |   |                                  | Name Kevin  T. McDermed |
|   |   |                                  | Title: V.P.  & Treasurer |
|        |        |                                       |  |  |  |

 

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