Document:

Exhibit 10.43

 

Execution Copy

 

WARBURG
PINCUS PRIVATE EQUITY VIII, L.P.

466 Lexington Avenue

New York, NY 10017

 

 

March 4, 2005

 

 

Allos Therapeutics, Inc.

11080 CirclePoint Road

Westminster, CO 80020

Attention: Chief Executive
Officer

 

Gentlemen:

 

In connection with the
acquisition of shares of Series A Exchangeable Preferred Stock, par value
$0.001 per share (the “Preferred Stock”), of Allos Therapeutics, Inc., a
Delaware corporation (the “Company”), by Warburg Pincus Private Equity
VIII, L.P., a Delaware limited partnership (the “Purchaser”), Warburg
Pincus & Co., a New York general partnership and the sole general partner
of the Purchaser (“WP”), and Warburg Pincus LLC, a New York limited
liability company and the sole manager of the Purchaser (“WP LLC” and,
collectively, WP LLC, WP and the Purchaser are referred to herein as, the “Purchaser
Group”), the Company and the Purchaser Group agree as follows:

 

1.             Definitions.  For purposes of this letter agreement, the
following terms have the respective meanings set forth below:

 

“Affiliates”
shall mean any fund, whether existing now or in the future, of which WP (or any
entity controlled by WP) is a general partner or WP LLC (or any entity
controlled by WP LLC) is a manager.

 

“Beneficially
Owns” (including the terms “Beneficial Ownership”, “Beneficially
Owned” or “Beneficially Owning”) shall mean beneficial ownership
within the meaning of Rule 13d-3 under the Exchange Act.

 

“Board”
shall mean the Board of Directors of the Company.

 

“Change
of Control” shall mean (i) a consolidation, merger, reorganization or other
form of acquisition of or by the Company in which the Company’s stockholders
immediately prior to the transaction retain less than 50% of the voting power
of or economic interest in the surviving or resulting entity (or its parent)
immediately after the transaction, (ii) a sale of the Company’s assets in
excess of a

 

 

majority of the Company’s
assets (valued at fair market value as determined in good faith by the Board),
(iii) the acquisition by any person, other than the Purchaser Group and its
Affiliates, of more than 50% of the Company’s outstanding voting securities, or
(iv) during any period of 24 consecutive months, individuals who at the
beginning of such period were directors of the Company (together with any new
directors whose election or appointment was approved by the directors then in
office) cease for any reason to constitute a majority of the directors of the
Board or the board of directors of the surviving or resulting entity (or its parent).

 

“Independent
Directors” shall mean those directors that the Board has determined to be
independent within the meaning of NASD Marketplace Rule 4200(15) (or any
successor rule).

 

2.             Standstill.

 

(a)           For a period of
four years from the date hereof (the “Standstill Period”), no member of
the Purchaser Group or any of their respective Affiliates shall, without the
prior written consent of a majority of the Independent Directors who are not
affiliated with the Purchaser Group, in any manner acquire, agree or seek to
acquire, or make any proposal or offer (other than to a member of the Board or
senior management of the Company by means that would not cause public
dissemination thereof) to acquire, whether directly or indirectly:

 

(i)            any material
assets of the Company or

 

(ii)           Beneficial
Ownership of any shares of Common Stock, par value $0.001 per share, of the
Company (“Common Stock”), voting equity securities of the Company or any
securities convertible or exchangeable into or exercisable for any such shares
of Common Stock or other securities (including derivatives), in excess of 44%
of (x) the outstanding Common Stock, plus (y) the Common Stock issuable upon
the exchange of the Company’s outstanding Preferred Stock (including any
quarterly accruing dividends thereon) (the “Exchange Shares”), calculated as if
such Exchange Shares had been issued pursuant to an exchange as of immediately
following the original issuance of each such share of outstanding Preferred
Stock (collectively, the “Permitted Shares”).

 

(b)           For so long as
Purchaser or its Affiliates Beneficially Own more than (i) 580,000 shares of
Preferred Stock acquired pursuant to the Securities Purchase Agreement dated as
of the date hereof by and between the Company and the Purchaser (the “Securities
Purchase Agreement”), or (ii) 10% of the Company’s outstanding Common
Stock, no member of the Purchaser Group or any of their respective Affiliates
shall, without the prior written consent of a majority of the Independent
Directors who are not affiliated with the Purchaser Group:

 

(i)            propose to any
person (other than to a member of the Board or senior management of the Company
by means that would not cause public dissemination thereof) or effect, seek to
effect or enter into, whether alone or in concert with others, any merger,
tender offer, consolidation, acquisition, scheme, business combination or other

 

2

 

extraordinary transaction in
which the Company or any of its subsidiaries is a constituent corporation or
party (a “Business Combination”);

 

(ii)           solicit proxies or
shareholder consents or participate in any such solicitation for any purpose
relating to the election or removal of directors of the Company;

 

(iii)          support,
solicit proxies or shareholder consents or participate in any such solicitation
or vote in favor of any Business Combination, or propose to any person or
effect, seek to effect or enter into, whether alone or in concert with others,
any Business Combination, in which the Purchaser Group, in the event the
Preferred Stock has been exchanged for Common Stock in accordance with the
terms thereof, receives or would be entitled to receive consideration on a per
share basis which is greater than the consideration to be received on a per share
basis by the other holders of Common Stock; provided,
however, that in the event the Preferred Stock remains outstanding
at the time of a Change of Control, nothing contained herein shall limit or
otherwise prevent the Purchaser Group from receiving the consideration per
share for their shares of Preferred Stock that they Beneficially Own in
accordance with the terms of such Preferred Stock;

 

(iv)          form, join,
encourage, influence, advise or participate in a “group” (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) in connection with any of the foregoing;

 

(v)           make, or take any
action (including a request to waive or amend any provision of this agreement)
that would cause the Company to make, a public announcement regarding any
intention of the Purchaser Group or any of their respective Affiliates to take
an action which would be prohibited by any of the foregoing.

 

(c)           Notwithstanding
the foregoing, the provisions of this Section 2 shall only be in effect so long
as the Company is not in material breach of its obligations under this
Agreement or under Section 5.4 of the Securities Purchase Agreement with
respect to the Purchaser Group.

 

3.             No Effect on
Directors. 
Notwithstanding any of the foregoing, the provisions set forth in
Section 2 shall in no way limit the ability of any individual who is serving as
a director of the Company to take any actions (or to refrain from taking any
actions) in their capacity as directors of the Company.

 

4.             Voting Agreement.  In the event the Purchaser Group and their
Affiliates Beneficially Own more than 33% of the Company’s outstanding Common
Stock, any shares of Common Stock entitled to vote for the election of
directors Beneficially Owned by the Purchaser Group and their Affiliates in
excess of 33% of the shares of Common Stock then outstanding, with respect to
the election or removal of directors only, shall be voted either, solely at the
Purchaser Group’s election (a) as recommended by the Board or (b)(i) in an
election, in the same proportion with the votes of shares of Common Stock voted
in such election (excluding shares

 

3

 

with
respect to which the votes were withheld, abstained or otherwise not cast)  and not Beneficially Owned by the Purchaser
Group (excluding withheld shares and abstentions) or (ii) in a removal vote, in
the same proportions as all outstanding shares of Common Stock not Beneficially
Owned by the Purchaser Group (including shares with respect to which the votes
were withheld, abstained or otherwise not cast), whether at an annual or
special meeting of stockholders of the Company, by written consent or
otherwise.  The Purchaser Group shall
retain its right to vote (or to withhold its vote) all of its shares on all
other matters.

 

5.             Waiver of
Section 203.  The Company
represents and warrants to the Purchaser Group that the Board has taken all
action necessary to approve the acquisition of the Preferred Stock pursuant to
the Securities Purchase Agreement for the purposes of the provisions of Section
203 of the General Corporation Law of the State of Delaware (“Section 203”)
solely as it relates to the acquisition by the Purchaser Group of beneficial
ownership of the Common Stock (the “Waiver”); provided, however,
such Waiver provides that, to the fullest extent permitted by law, it shall no
longer be applicable if, subsequent to becoming an “interested stockholder” (as
defined in Section 203), the Purchaser Group no longer has beneficial ownership
of 15% or more of the Common Stock as a result of any sale or disposition of
beneficial ownership of Common Stock by the Purchaser Group.

 

6.             Amendments to
Rights Agreement.  The Company
represents and warrants to the Purchaser Group that the Rights Agreement, dated
May 6, 2003, by and between the Company and Mellon Investor Services LLC, as
rights agent (the “Rights Agreement”), has been duly amended to exclude
the Purchaser Group from the definition of the term “Acquiring Person” as such
term may relate to the acquisition by the Purchaser Group (including by “affiliates”
and “associates”, as such terms are defined in Rule 12b-2 under the Exchange
Act, of the Purchaser Group) of Beneficial Ownership of the Permitted Shares
described in Section 2(a)(ii) hereof.  During the Standstill Period, so long as the
Purchaser Group is not in material breach of its obligations under this
Agreement, the Company shall not amend or modify the definition of “Acquiring
Person” in the Rights Agreement, if, as a result of such amendment or
modification, the Purchaser Group would be deemed to be an “Acquiring Person”
thereunder.  During the Standstill
Period, so long as the Purchaser Group is not in material breach of its
obligations under this Agreement, the Company shall not adopt a new rights
agreement or an agreement having substantially the same effect of the Rights
Agreement if the Purchaser Group would be considered an “Acquiring Person” (or
would have the same or substantially similar effect of an “Acquiring Person”
under the Rights Agreement).

 

7.             Representations.  Each party represents to the other that: (a)
this letter agreement has been duly authorized by all necessary corporate or
partnership action, as the case may be; and (b) this letter agreement is a
valid and binding agreement of such party, enforceable against it in accordance
with its terms.

 

8.             Specific
Enforcement; Legal Effect.  The
parties hereto agree that any breach of this letter agreement would result in
irreparable injury to other party and that money damages would not be an
adequate remedy for such breach. 
Accordingly, without prejudice to the rights and remedies otherwise
available under applicable law, either party shall be entitled to

 

4

 

specific performance and equitable relief by way of
injunction or otherwise if the other party breaches or threatens to breach any
of the provisions of this letter agreement. 
It is further understood and agreed that no failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder.  If any term,
provision, covenant or restriction in this letter agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions of this letter agreement
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, provided that the parties hereto shall negotiate in good faith
to attempt to place the parties in the same position as they would have been in
had such provision not been held to be invalid, void or unenforceable.  This letter agreement contains the entire
agreement between the parties hereto concerning the matters addressed
herein.  No modification of this letter
agreement or waiver of the terms and conditions hereof shall be binding upon
either party hereto, unless approved in writing by each such party; provided,
however, that no waiver or amendment shall be effective as against the
Company unless such waiver or amendment is approved in writing by the vote a
majority of the independent members of the Board who are not affiliated with
the Purchaser Group.  This Agreement
shall be governed by and construed in accordance with the law of the State of
Delaware without regard to principles of conflicts of law that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

 

9.             Termination.  This agreement shall continue in full force
and effect from the date hereof until such time as the Purchaser Group holds
less than 10% of (i) the Company’s outstanding Common Stock, plus (ii) the
Exchange Shares, calculated as if such Exchange Shares had been issued pursuant
to an exchange as of immediately following the original issuance of each share
of outstanding Preferred Stock.

 

10.           Counterparts.  This letter agreement may be executed in
counterpart (including by facsimile), each of which shall be deemed an
original.

 

[Remainder
of Page left blank intentionally]

 

5

 

If you are in agreement with the terms set forth above, please sign
this letter agreement in the space provided below and return an executed copy
to the undersigned.

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARBURG
  PINCUS PRIVATE EQUITY

  
	
   

  	
   

  	
  VIII,
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:  WARBURG PINCUS & CO.,

  
	
   

  	
  General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  /s/ Jonathan Leff

  	
   

  
	
   

  	
  Name:

  	
  Jonathan Leff

  
	
   

  	
  Title:

  	
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
  Confirmed
  and Agreed:

  	
   

  
	
   

  	
   

  
	
  ALLOS
  THERAPEUTICS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  Michael E. Hart

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Michael E.
  Hart

  	
   

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  	
   

  
										

 

 

STANDSTILL AGREEMENTEXHIBIT 10.1
                                                                    ------------

                            AMENDMENT FIVE TO AMENDED
                          AND RESTATED CREDIT AGREEMENT

     THIS AMENDMENT FIVE TO AMENDED AND RESTATED CREDIT AGREEMENT ("Amendment")
is made and entered into as of this 28th day of February, 2005 (the "Effective
Date"), by and among NORTH AMERICAN GALVANIZING & COATINGS, INC., a Delaware
corporation formerly known as Kinark Corporation ("NAGC"), and NORTH AMERICAN
GALVANIZING COMPANY, a Delaware corporation ("NAG") (NAGC and NAG are herein
collectively referred to as "Borrowers" and separately as "Borrower"), and
JPMORGAN CHASE BANK, N.A. (as successor by merger to Bank One, NA (Main Office
Columbus)) ("Bank").

                             INTRODUCTORY STATEMENT

     A.   Reference is made to the Amended and Restated Credit Agreement dated
November 26, 2001, by and among Borrowers and Bank, as amended by the Amendment
One to the Amended and Restated Credit Agreement dated October 28, 2002, the
Amendment Two to the Amended and Restated Credit Agreement dated January 28,
2003, the Amendment Three to the Amended and Restated Credit Agreement dated
September 26, 2003, and the Amendment Four to the Amended and Restated Credit
Agreement dated December 15, 2004 (as amended, the "Credit Agreement"), pursuant
to which exists a: (i) Revolving Commitment of $7,000,000.00, and (ii)
Consolidated Term Loan with an outstanding principal balance of approximately
$2,906,018.17. Terms used herein shall have the meaning ascribed to them in the
Credit Agreement, unless otherwise defined herein.

     B.   Borrowers have requested Bank to: (i) increase the Revolving Credit
Facility from $7,000,000 to $8,000,000; (ii) extend the Revolving Credit
Facility's maturity date to three years from the Effective Date, while
maintaining its sub-limit of $1,000,000 for the issuance of letters of credit,
subject to the same borrowing base availability; (iii) increase the Consolidated
Term Loan by $2,095,371 from approximately $2,906,018.17 to $5,001,389.17,
assessing a 0.5% fee on the new money advanced at closing; (iv) extend the
Consolidated Term Loan's maturity date to three years from the Effective Date;
(v) accept as additional mortgaged collateral Borrowers' Canton, Ohio facility
that will be purchased contemporaneous to the Effective Date; and (vi) modify
and extend the Bond Letter of Credit in the amount of $6,963,000.00 with an
expiry date that coincides with the Revolving Note and the Consolidated Term
Note; and Bank has agreed to accommodate Borrowers' request, subject to the
following:

                                    AGREEMENT

     For valuable consideration received the parties agree to the following:

1.   Loan Documents. Borrowers agree to execute and deliver any certificates,
documents and agreements reasonably required by Bank to verify the
enforceability and priority of all rights conferred upon Bank; and Borrowers
irrevocably authorize Bank to electronically file documentation it deems
necessary to maintain first and prior liens in the Collateral with all necessary
and appropriate filing offices.
<PAGE>

2.   Amendments to Credit Agreement.

     2.1. Revolving Credit Facility. (i) The term "Revolving Commitment Period"
is hereby amended to replace the date "December 15, 2007" with "February 28,
2008"; (ii) the term "Revolving Commitment" means, as of any determination date,
the lesser of the sum of $8,000,000 or the Borrowing Base in effect on such
date; (iii) Section 2.1.3's reference of a $1,000,000 sub-limit to be used for
the issuance of letters of credit shall remain the same; (iv) Section 2.8.3's
reference to a maturity date is hereby amended to replace the date "December 15,
2007" with "February 28, 2008"; and (v) the Maturity Date of the Revolving Note
is hereby extended to February 28, 2008, as further evidenced by the $8,000,000
Promissory Note ("$8,000,000 Revolving Note") in form and content as set forth
on Schedule "2.1" hereto.

     2.2  Consolidated Term Note. (i) The amended term "Consolidated Term Loan"
is hereby amended to replace the date "December 15, 2007" with "February 28,
2008"; (ii) the amended term "Consolidated Term Note" means that certain
Promissory Note dated February 28, 2005 in the stated principal amount of
$2,906,018.17, with a Maturity Date extended from December 15, 2007 to February
28, 2008, as further evidenced by the $5,001,389.17 Promissory Note
("$5,001,389.17 Consolidated Term Note") in form and content as set forth on
Schedule "2.2" hereto; (iii) Section 2.8.1 shall be modified to require
Borrowers to make principal and interest payments in consecutive monthly
installments on the last day of each calendar month, with each monthly principal
installment to be in the amount of $59,540.35 (representing a seven-year
straight-line amortization calculation on a three-year term loan), plus accrued
interest The entire remaining principal balance of the Consolidated Term Note,
together with all accrued and unpaid interest thereon, will be due and payable
in full on February 28, 2008; and (iv) Borrowers shall remit to Bank at closing
a fee of $10,477 representing a 0.5% fee on the new money advanced.

     2.3  Mortgaged Property. (i) The term "Mortgaged Property" has previously
included the facilities at St. Louis, Missouri, Houston Texas and Hurst, Texas.
"Mortgaged Property" is hereby expanded to include the facility at Canton, Ohio,
the acquisition of which is the subject matter and principal purpose of this
Amendment. Accordingly, Borrowers shall execute the Mortgage associated with the
Canton, Ohio property in form and content as set forth on Schedule "2.3" hereto.

     2.4  Bond L/C. The term "Bond L/C" is hereby amended to evidence that the
originally issued Bond L/C (No. STI 15477) currently has a face amount of
$6,963,000.00 and has an expiry date of February 28, 2008.

3.   Ratification of Guaranty. Each Guarantor, whether with respect to a
Guaranty pursuant to Section 3.6 of the Credit Agreement or with respect to a
specific Guaranty Agreement executed and delivered pursuant to Section 3.7 of
the Credit Agreement, hereby (i) acknowledges and accepts the modifications to
and extensions of the Revolving Note and the Consolidated Term Note, (ii) hereby
ratifies and confirms their respective guaranty obligations, (iii) acknowledges
that the Guarantor Documents continue in full force and effect, unabated and
uninterrupted, and remain valid and binding obligations of the undersigned,
enforceable in accordance with their turns, (iv) agrees to execute and deliver
the documents required of them under the terms of this Amendment, and (v) agree
to be bound by, and hereby join in, the release of the Bank set FORTH HEREIN.
<PAGE>

4.   Conditions of Lending.

     4.1. Effective Date. This Agreement shall be effective as of the EFFECTIVE
Date, subject to the Borrowers' satisfaction of all of the conditions set forth
in Section 4.2. The delivery of the Loan Documents shall be made on or as of the
Effective Date at such time and place as the parties shall mutually agree.

     4.2. Conditions Precedent. The effectiveness of this Credit Agreement is
subject to the Borrowers' satisfaction of the following conditions precedent at
or as of the Effective Date:

          4.2.1. Loan Documents. This Agreement, the extended $8,000,000.00
     Revolving Note, the extended $5,001,389.17 Consolidated Term Note, the
     Mortgage, and any other Loan Documents requested by Bank shall have been
     duly and validly authorized, executed and delivered to Bank by the
     appropriate parties thereto, all in form and substance satisfactory to
     Bank.

          4.2.2. Incumbency Certificates. If requested, the Bank shall have
     received a certificate executed by the duly elected and acting corporate
     secretary of each of the Loan Parties stating the names and titles and
     containing specimen signatures of the officers authorized to execute and
     deliver Loan Documents on behalf of such Loan Party.

          4.2.3. Lien Searches. The Bank shall have received certified responses
     to UCC lien search requests reflecting that there are no effective UCC
     financing statements on file in any filing offices in the States of
     Oklahoma and Delaware (or any other state in which any of the Loan Parties
     is organized or in which it owns any tangible personal property) naming any
     of the Loan Parties as debtor, other than financing statements relating to
     Permitted Liens.

          4.2.4. Other Matters. The Borrowers shall have provided the Bank with
     such reports, information, financial statements, and other documents as the
     Bank has reasonably requested to evidence the Borrowers' compliance with
     the terms and conditions of this Agreement and the Loan Documents.

          4.2.5. Release of Bank. Each of the Borrowers and Guarantors hereby
     releases the Bank from any and all claims, known or unknown, which may have
     arisen in connection with the Credit Agreement on or prior to the date on
     which this Amendment has been executed and delivered.

          4.2.6. Fees. The Borrowers shall have paid all fees provided for in
     this Agreement, to the extent such fees are dues and payable at or as of
     the Effective Date. Further, the Borrowers agree to pay the reasonable fees
     and out-of-pocket expenses of The Drummond Law Firm, counsel to the Bank,
     incurred in connection with the preparation of this Amendment and the
     consummation of the transactions contemplated hereby and thereby, in the
     amount of at least $3,500.00.
<PAGE>

          4.2.7. No Defaults. There shall not have occurred or be continuing any
     Default or Event of Default.

          4.2.8. Legal Matters. All legal matters incident to this Amendment and
     the transactions contemplated hereby shall be satisfactory to the Bank and
     its counsel.

          4.2.9. Appraisal and Environmental Audit. Bank shall have received and
     be satisfied with a (i) FIRREA conforming real estate appraisal on the
     Canton, Ohio facility, and (ii) Phase I environmental audits on the Canton,
     Ohio and the Hurst, Texas properties.

5.   Cross-Collateralization. The Borrowers acknowledge and agree that all
Collateral from time to time securing the Indebtedness of the Borrowers arising
under or in connection with the Credit Agreement (and all documents and
instruments executed or issued or to be executed or issued pursuant hereto or in
connection with the Facilities or the Collateral) shall also secure the prompt
payment and performance of all other liabilities, obligations and indebtedness
of the Borrowers to the Bank, of every kind and description, whether now
existing or hereafter incurred, direct or indirect, absolute or contingent, due
or to become due, matured or unmatured, and whether or not of the same or a
similar class or character and whether or not currently contemplated by the Bank
or the Borrowers, including (i) all liabilities, obligations and indebtedness of
NAGC or NAG to the Bank arising out of or relating to the several notes,
including costs and expenses of collection, (ii) any overdrafts by Borrowers on
any deposit account maintained with the Bank, (iii) any and all obligations,
contingent or otherwise, of Borrowers to the Bank (or any of its Affiliates),
and (iv) any and all extensions or renewals of any of the foregoing (hereinafter
collectively referred to as the "Borrowers' Indebtedness"), whether or not the
Borrowers' Indebtedness is expressly described or referred to in the applicable
Loan Documents.

6.   Cross-Default. The Borrowers acknowledge, agree and reconfirm that the
Credit Agreement, as amended, shall be cross-defaulted with any other obligation
of either Borrower to Bank, such that the occurrence or existence of an Event of
Default under the Credit Agreement will also create an event of default under
any current or future credit agreement or lending obligation of either Borrower.

7.   U.S. Patriot Act Notice. Bank hereby notifies Borrowers, Guarantors and
other parties related to this Agreement (cumulatively referred to as "Parties")
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "Patriot Act"), it is or may be
required to obtain, verify and record information that identifies any of the
Parties related to this Agreement, which information includes the name and
address of any of the Parties and other information that will allow Bank to
identify the Parties in accordance with the Patriot Act.

8.   Reaffirmation. The Borrowers confirm that all representations and
warranties made by them in Section 6 of the Credit Agreement are and will be
true and correct on the Effective Date (with the dates in Section 6.6 being
changed to read December 31, 2003, and December 31, 2004, respectively), and all
of such representations and warranties are hereby remade and restated as the
date hereof and shall survive the execution and delivery of this Amendment.
<PAGE>

9.   Additional Representations and Warranties. Each of the Borrowers further
represents and warrants to the Bank that:

     9.1. Each of the Borrowers has all requisite power and authority and has
been duly authorized to execute, deliver and perform its obligations under this
Amendment and the documents and instruments contemplated hereunder
(collectively, the "Amendment Documents") and the Credit Agreement (as amended
by this Amendment).

     9.2. The Amendment Documents and the Credit (as amended by this Amendment)
are valid and legally binding obligations of the Borrowers, enforceable in
accordance with their respective terms, except as limited by applicable
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally.

     9.3. The execution, delivery and performance of the Amendment Documents and
the Credit Agreement (as amended by this Amendment) by each of the Borrowers
does not and will not (a) conflict with, result in a breach of the terms,
conditions or provisions of, constitute a default under, or result in any
violation of the governing documents of either of the Borrowers, or any
agreement, instrument, undertaking, judgment, decree, order, writ, injunction,
statute, law, rule or regulation to which either of the Borrowers is SUBJECT or
by which the assets and property of either of the Borrowers (including the
Collateral) are bound or affected, (b) result in the creation or imposition of
any Lien on any assets or property now or hereafter owned by either of the
Borrowers pursuant to the provisions of any mortgage, indenture, security
agreement, contract, undertaking or other agreement to which either of the
Borrowers is a party, other than the obligations of the Borrowers to the Bank
created by the Credit Documents, (c) require any authorization, consent,
license, approval or authorization of, or other action by, notice or declaration
to, registration with, any Governmental Authority or, to the extent any such
consent or other action may be required, it has been validly procured or duly
taken, or (d) result in the occurrence of a Material Adverse Effect.

10.  Effect of Amendment. The terms of this Amendment shall be incorporated into
and form a part of the Credit Agreement. Except as amended, modified and
supplemented by this Amendment, the Credit Agreement, as previously amended,
shall continue in full force and effect in accordance with its original stated
terms, all of which are hereby reaffirmed in every respect as of the date
hereof. In the event of any irreconcilable inconsistency between the terms of
this Amendment and the terms of the Credit Agreement or any other Loan Document,
the terms of this Amendment shall control and govern, and the agreements shall
be interpreted so as to carry out and give full effect to the intent of this
Amendment. All references to the "Credit Agreement" appearing in any of the Loan
Documents shall hereafter be deemed references to the Credit Agreement as
amended, modified and supplemented by this Amendment. Each of the Borrowers
hereby reaffirms all Loan Documents to which it is a party, and acknowledges
that such Loan Documents will continue in full force and effect, unabated and
uninterrupted, and will remain its valid and binding obligations, enforceable in
accordance with their terms.
<PAGE>

11.  Construction; Applicable Law. This Amendment and the other Loan Documents
are contracts made under, and shall be construed in accordance with, the laws of
the State of Oklahoma. Nothing in this Amendment shall be construed to
constitute the Bank as a joint venturer with the Borrowers or to constitute a
partnership among the parties. The descriptive headings of the Sections of this
Amendment are for convenience only and shall not be used in the construction of
the content of this Amendment.

12.  Binding Effect. This Amendment and the other Loan Documents shall be
binding on, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns; PROVIDED, that without the prior, written
consent of the Bank, neither of the Borrowers will assign or transfer any of its
interests, rights or obligations arising out of or relating to the Loan
Documents. No third party shall be considered as an intended beneficiary of this
Amendment or have any rights hereunder.

13.  Severability. In the event any one or more of the provisions contained in
this Amendment or the other Loan Documents shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect and in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
thereof.

14.  Entire Amendment; Conflicting Provisions. This Amendment and the Loan
Documents constitute the entire Amendment of the parties hereto with respect to
the Facilities and all matters arising out of or related thereto. The Schedules
attached hereto are incorporated herein for all purposes. In the event of any
conflict between or among the provisions of this Amendment and the provisions of
any other Loan Documents, the provisions of this Amendment shall control.

                            [Signature Page Follows]
<PAGE>

     IN WITNESS WHEREOF, the Bank and the Borrowers have caused this Amendment
to be duly executed effective as of the date first above written.

                                        NORTH AMERICAN GALVANIZING &
                                        COATINGS, INC., a Delaware corporation,
                                        formerly known as Kinark Corporation, as
                                        Borrower and Guarantor

                                        By /s/ Paul R. Chastain
                                           -------------------------------------
                                           Paul R. Chastain, Vice President

                                        NORTH AMERICAN GALVANIZING COMPANY, a
                                        Delaware corporation, as Borrower and
                                        Guarantor

                                        By /s/ Paul R. Chastain
                                           -------------------------------------
                                           Paul R. Chastain, Vice President

                                        JPMORGAN CHASE BANK, N.A.

                                        By /s/ Matthew P. Clifton
                                           -------------------------------------
                                           Matthew P. Clifton, Assistant Vice
                                           President

                                        "Subsidiary Guarantors"

                                        NAGalv-Ohio, Inc.
                                        a Delaware corporation

                                        By /s/ Paul R. Chastain
                                           -------------------------------------
                                           Paul R. Chastain, Vice President

                                        PREMIER COATINGS, INC.,
                                        an Oklahoma corporation

                                        By /s/ Paul R. Chastain
                                           -------------------------------------
                                           Paul R. Chastain, Vice President

<PAGE>

                                        REINFORCING SERVICE, INC.,
                                        an Oklahoma Corporation

                                        By /s/ Paul R. Chastain
                                           -------------------------------------
                                           Paul R. Chastain, Vice President

                                        ROGERS GALVANIZING COMPANY-KANSAS CITY,
                                        an Oklahoma corporation

                                        By /s/ Paul R. Chastain
                                           -------------------------------------
                                           Paul R. Chastain, Vice President

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