Document:

ex10-1_1365217.htm

 

 

EXHIBIT 10.1.2

EXECUTION COPY

AMENDMENT NO. 3 dated as of July 17, 2009 (this “Amendment”), to the Credit Agreement dated as of November 15, 2007, among Barzel Industries Inc. (formerly known as Novamerican Steel Inc. and Symmetry Holdings Inc.), a Delaware corporation (“Parent”),
Barzel Finco Inc. (formerly known as Novamerican Steel Finco Inc.), a Delaware corporation (“US Borrower”), Barzel Industries Canada Inc. (formerly known as Novamerican Steel Canada Inc. and Novamerican Steel Inc.), a Canadian corporation (“Canadian Borrower”), the Lenders party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, JPMorgan Chase Bank,
N.A., Toronto Branch, as Canadian Agent, and CIT Business Credit Canada Inc. and The CIT Group/Business Credit, Inc., as Syndication Agents (the “Credit Agreement”).

 

WHEREAS, the parties wish to amend the Credit Agreement as provided herein;

 

NOW, THEREFORE, in consideration of the above premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1.           Defined Terms. Each capitalized term used and not defined herein, including in the recitals hereto, shall have the meaning assigned to it in the Credit Agreement.

 

SECTION 2.           Amendments of the Loan Documents. Effective as of the Amendment Effective Date (as defined below):

 

(a)           Section 1.01 of the Credit Agreement shall be amended by amending the definition of “Availability Block” to replace the reference therein to “US$7,500,000” with a reference to “US$1,500,000”.

 

(b)           Section 9.20(a)(i) of the Credit Agreement is amended by replacing the phrase “concentration accounts maintained with the Administrative Agent” with the phrase “concentration accounts maintained in the name of the Administrative Agent”.

 

(c)           The definition of “Obligations” contained in the Guarantee and Collateral Agreement shall be amended by inserting at the end thereof the following new clause (iii): “or (iii) owed to Bank of America, N.A., or to any of its Affiliates in respect of (A)
any Letter of Credit set forth on Schedule I to Amendment No. 3 to the Credit Agreement or any LC Disbursement in respect of any such Letter of Credit or (B) in respect of any Cash Management Services Obligations arising in respect of any Cash Management Services described on Schedule II to Amendment No. 3 to the Credit Agreement or other Cash Management Services the inclusion of which in the Obligations is approved in

 

  

  

  

writing by the Administrative Agent after the Amendment Effective Date for Amendment No. 3 to this Agreement”.

 

(d)           Each “Application of Proceeds” provision contained in any Security Document shall be amended (i) to insert before the FIRST application of proceeds contained therein a new FIRST application: “FIRST, to payment in full of all Obligations owed to Bank of
America, N.A., or to any of its Affiliates in respect of any Letter of Credit or LC Disbursement or in respect of any Cash Management Services Obligations” and (ii) to renumber the references therein to “FIRST” as “SECOND”, “SECOND” as “THIRD”, “THIRD” as “FOURTH”, “FOURTH” as “FIFTH” and “FIFTH” as “SIXTH”.

 

SECTION 3.           Agreements with Bank of America. Effective as of the Amendment Effective Date:

 

(a)           Bank of America, N.A. (i) will not, and will not permit its Affiliates to, issue or at any time have outstanding any Letter of Credit other than those set forth on Schedule I hereto (and extensions and renewals thereof that do not result in any increase in the LC Exposure)
(the amount of all obligations of each Loan Party owed to Bank of America, N.A. or to any of its Affiliates in respect of any such Letter of Credit or any LC Disbursement in respect of any such Letter of Credit, the “Bank of America, N.A. LC Exposure”), and if any letter of credit is issued in breach of this Section 3(a)(i), such letter of credit shall not constitute a Letter of Credit under the Credit Agreement and no obligation in
respect thereof shall be secured by the Collateral; (ii) will, and will cause its Affiliates to, provide the Cash Management Services described on Schedule II hereto on substantially the terms and conditions in effect as of the date hereof, in each case except to the extent approved in writing by the Administrative Agent (the amount of all obligations of each Loan Party owed to Bank of America, N.A. or to any of its Affiliates in respect of such Cash Management Services, together with the Bank of America, N.A.
LC Exposure, the “Bank of America, N.A. Exposure”); provided, however, that Bank of America, N.A. or its Affiliates may terminate any such Cash Management Services at its commercially reasonable discretion upon delivery to the Administrative Agent of at least 30 days prior written notice, with such notice being given as set forth below; and (iii) will, and will cause its Affiliates to, at all times maintain the accounts specified in
Schedule III and maintain and comply with the deposit account control agreements entered into in respect such accounts; provided, however, that Bank of America, N.A. or its Affiliates may at any time after October 1, 2009 terminate its obligations under this clause (iii) at its commercially reasonable discretion upon delivery to the Administrative Agent of prior written notice to such
effect. Notices shall be given to:

 

JPMorgan Chase Bank, N.A., Loan and Agency Services Group, 1111 Fannin, 10th Floor, Houston, Texas 77002, Attention of Monica Espitia (Fax No. (713) 427-6307), with a copy to JPMorgan Chase Bank, N.A., 270 Park Avenue, New York, New York 10017, Attention of Robert Kaulius (Fax No. (646) 534-2288).

 

 

  

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(b)           The changes to the Loan Documents effected pursuant to Sections 2(c) and (d) of this Amendment may not be amended or modified without the written consent of Bank of America, N.A., provided that 30 days after
the Administrative Agent delivers to Bank of America, N.A. or its Affiliates notice stating that Bank of America, N.A. or its Affiliates is not in compliance with the agreements set forth in clause (a)(iii) of this Section 3, clause (iii) of the definition of “Obligations” contained in the Guarantee and Collateral Agreement shall be automatically amended by (1) deleting the lettering “(A)” and (2) deleting “or (B) in respect of any Cash Management Services Obligations arising in
respect of any Cash Management Services described on Schedule II to Amendment No. 3 to the Credit Agreement or other Cash Management Services the inclusion of which in the Obligations is approved in writing by the Administrative Agent after the Amendment Effective Date for Amendment No. 3 to this Agreement”.

(c)           Section 1.01 of the Credit Agreement may not be amended to amend the definition of “Availability Block” if, as a result of such amendment, the reference therein is to an amount less than “US$1,500,000” without the written consent of Bank of America,
N.A, provided that 30 days after the Administrative Agent delivers to Bank of America, N.A. or its Affiliates notice that Bank of America, N.A. and its Affiliates are not in compliance in all material respects with the agreements set forth in paragraph (a)(i) and (iii) of this Section 3, Section 1.01 of the Credit Agreement may be amended to amend the definition of “Availability Block” so that, as a result of such amendment, the reference
therein is to an amount not less than the Bank of America, N.A. LC Exposure, or less with the written consent of Bank of America, N.A.

 

(d)           For so long as any Bank of America, N.A. Exposure is outstanding and has not been reduced to zero, (i) Parent and the Borrowers will, simultaneously with the delivery to the Administrative Agent pursuant to Section 5.01(f) of this Agreement of any Borrowing Base Certificate,
deliver to Bank of America, N.A. and its Affiliates a copy of such Borrowing Base Certificate and (ii) the Administrative Agent shall advise Bank of America, N.A. of its receipt of notice from Parent or a Borrower under Section 5.02 of the Credit Agreement that any Default or Event of Default has occurred and is continuing, with any such Borrowing Base Certificate and notification of Default or Event of Default being delivered to:

 

Bank of America, N.A., Mail Code: MA5-503-07-19, 1 Federal Street, Boston, Massachusetts 02110, Attention of Gregory Kress (Fax no. (617) 346-1130);

 

provided that any failure to deliver to Bank of America, N.A. any Borrowing Base Certificate or notification of Default or Event of Default by Parent and the Borrowers or the Administrative Agent, respectively, shall not in any manner affect the parties’ obligations under
this Amendment.

 

SECTION 4.           Representations and Warranties. Each of the Parent and the Borrowers hereby represents and warrants to the Administrative agent and the Lenders that as of the date hereof and as of the Amendment Effective
Date that, before and after giving effect to this Amendment:

 

 

  

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(a)           no Default has occurred and is continuing; and

 

(b)           the representations and warranties of each Loan Party set forth in the Loan Documents (other than the representation and warranty set forth in Section 3.04(d)) are true and correct in all material respects.

 

SECTION 5.           Effectiveness. This Amendment shall become effective on the date (the “Amendment Effective Date”) on which the Administrative
Agent shall have received counterparts hereof duly executed and delivered by Parent, the Borrowers, the Subsidiary Parties identified on Schedule IV hereto, the Required Lenders and Bank of America, N.A..

 

SECTION 6.           No Amendments or Other Waivers; Confirmation.

 

(a)           Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Administrative Agent, the Lenders or the Issuing Banks under the Credit Agreement or any
other Loan Document and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle any Loan Party to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in
the Credit Agreement or any other Loan Document in similar or different circumstances. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. This Amendment shall constitute a Loan Document.

 

(b)           On and after the effective date of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of like import, and each reference to the Credit Agreement in any other
Loan Document, shall be deemed a reference to the Credit Agreement as modified hereby.

 

SECTION 7.           Governing Law; Counterparts.

 

(a)           This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

 

(b)           This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, and all such counterparts together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment
by facsimile transmission or other electronic imaging means shall be as effective as delivery of a manually executed counterpart hereof.

 

  

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SECTION 8.           Headings. The headings of this Amendment are for purposes of reference only and shall not limit or otherwise affect the meaning hereof.

 

[Signature pages to follow]

  

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed by their respective authorized officers as of the day and year first above written.

	  	  	  	
BARZEL INDUSTRIES INC.,

	  	  	  	  	  
	  	  	  	
by 
	
/s/ Karen G. Narwold

	  	  	  	  	
Name:  Karen G. Narwold

Title:    Vice President

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
BARZEL FINCO INC.,

	  	  	  	  	  
	  	  	  	
by 
	
/s/ Karen G. Narwold

	  	  	  	  	
Name:  Karen G. Narwold

Title:    Vice President

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
BARZEL INDUSTRIES CANADA INC.,

	  	  	  	  	  
	  	  	  	
by 
	
/s/ Karen G. Narwold

	  	  	  	  	
Name:  Karen G. Narwold

Title:    Vice President

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
Barzel Holdings Inc.,

Barzel Industries U.S. Inc.,

American Steel and Aluminum Corporation

Nova Tube and Steel, Inc.,

Novamerican Tube Holdings, Inc.,

Nova Tube Indiana, LLC

632422 N.B. Ltd.,

	  	  	  	  	  
	  	  	  	  	
by
	
/s/ Karen G. Narwold

	  	  	  	  	  	
Name:  Karen G. Narwold

Title:    Vice President

	  	  	  	  	  
	  	  	  	  	  

  

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JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent

	  	  	  	  	  
	  	  	  	
by 
	
/s/ Paul J. O’Neill

	  	  	  	  	
Name:  Paul J. O’Neill

Title:    Sr. Vice President

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
CIBC INC.,

	  	  	  	  	  
	  	  	  	
by 
	
/s/ Lindsay Gordon

	  	  	  	  	
Name:  Lindsay Gordon

Title:    CIBC Inc. Agent

  

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Acknowledged and Agreed with respect to Section 3,

 

	
BANK OF AMERICA, N.A.
	  	  
	  	
by
	  	  	  	  
	  	  	
/s/ Gregory Kress
	  	  	  
	  	  	
Name: Gregory Kress
	  	  	  
	  	  	
Title:   Senior Vice President
	  	  	  

  

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SCHEDULE I TO

AMENDMENT NO. 3

UNDER THE CREDIT AGREEMENT

DATED AS OF NOVEMBER 15, 2007, OF

BARZEL INDUSTRIES INC.

 

Bank of America, N.A. Letters of Credit

 

	
Letter of Credit No.
	
Beneficiary
	
Amount
	
Issue Date
	
Expiration Date

	
ASL-7420618-110AS1
	
National Union Fire Insurance Co. of Pittsburgh, PA, et. al.
	
$380,000.00
	
3/18/2003
	
Evergreen

	
ASL-3013705-170AS1
	
National Union Fire Insurance Co. of Pittsburgh, PA, et. al.
	
$116,000
	
3/25/2004
	
Evergreen

	
ASL-7420454-110AS1
	
National Union Fire Insurance Co. of Pittsburgh, PA, et. al.
	
$120,000
	
3/8/2006
	
Evergreen

	
ASL-7420491-110AS1
	
National Union Fire Insurance Co. of Pittsburgh, PA, et. al.
	
$267,000
	
3/21/2005
	
Evergreen

  

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SCHEDULE II TO

AMENDMENT NO. 3

UNDER THE CREDIT AGREEMENT

DATED AS OF NOVEMBER 15, 2007, OF

BARZEL INDUSTRIES INC.

 

Cash Management Services

 

ACCOUNT RECONCILEMENT PROCESSING/POSITIVE PAY

 

AUTOMATED CLEARING HOUSE

 

INFORMATION REPORTING

 

WHOLESALE LOCKBOX

 

PAPER DISBURSEMENT SERVICES/IMAGE

 

DEPOSIT ACCOUNT SERVICES

 

WIRE TRANSFER

 

DEPOSIT INVESTMENT PRODUCT (OVERNIGHT SWEEP)

 

BANKCARD MERCHANT SERVICES

 

  

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SCHEDULE III TO

AMENDMENT NO. 3

UNDER THE CREDIT AGREEMENT

DATED AS OF NOVEMBER 15, 2007, OF

BARZEL INDUSTRIES INC.

 

Specified Accounts

 

	
Account Name/Company
	
Accounts
	
Lockbox Addresses

	
Nova Tube and Steel Inc.
	
9428392245
	
PO Box 3166

	  	  	
Boston, MA 02241-3166

	
American Steel & Aluminum
	
9428393440
	
PO Box 3060

	
Corporation
	  	
Boston, MA 02241-3060

	
American Steel & Aluminum
	
9428390178
	
PO Box 3096

	
Corporation
	  	
Boston, MA 02241-3096

	
American Steel & Aluminum
	
9428390186
	
PO Box 3036

	
Corporation
	  	
Boston, MA 02241-3036

	
American Steel & Aluminum
	
9428390215
	
PO Box 3102

	
Corporation
	  	
Boston, MA 02241-3102

	
American Steel & Aluminum
	
9428390194
	
PO Box 3251

	
Corporation
	  	
Boston, MA 02241-3251

	
American Steel & Aluminum
	
9428390207
	
PO Box 3483

	
Corporation
	  	
Boston, MA 02241-3483

	
American Steel & Aluminum
	
9428390223
	
PO Box 3087

	
Corporation
	  	
Boston, MA 02241-3087

	
American Steel & Aluminum
	
9428390231
	
PO Box 3220

	
Corporation
	  	
Boston, MA 02241-3220

	
American Steel & Aluminum
	
9428392253
	
PO Box 3115

	
Corporation
	  	
Boston, MA 02241-3115

	
American Steel & Aluminum
	
4615683083
	  
	
Corporation
	  	  
	
Barzel Industries Canada Inc. /
	
47996211
	  
	
Industries Barzel Canada Inc.
	  	  
	
Barzel Industries Canada Inc. /
	
47996112
	  
	
Industries Barzel Canada Inc.
	  	  

  

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SCHEDULE IV TO

AMENDMENT NO. 3

UNDER THE CREDIT AGREEMENT

DATED AS OF NOVEMBER 15, 2007, OF

BARZEL INDUSTRIES INC.

 

Subsidiary Parties

 

1.           Barzel Holdings Inc. (formerly known as Novamerican Steel Holdings Inc.)

 

2           Barzel Industries U.S. In. (formerly known as Integrated Steel Industries, Inc.)

 

3           American Steel and Aluminum Corporation

 

4           Nova Tube and Steel, Inc.

 

5           Novamerican Tube Holdings, Inc.

 

6           Nova Tube Indiana, LLC

 

7           632422 N.B. Ltd.

 

  

12ex10-21_1352994.htm

EXHIBIT 10.2.1

EXECUTION VERSION

DEFERRAL AGREEMENT

 

This DEFERRAL AGREEMENT (this “Agreement”), dated as of May 14, 2009, is entered into by and among Barzel Finco Inc. (f/k/a Novamerican Steel Finco Inc.) (the “Issuer”),
Barzel Industries Inc. (f/k/a Symmetry Holdings Inc.) (the “Parent”; and together with the Issuer and the other subsidiaries of the Parent, the “Company”), JPMorgan Chase Bank, N.A. (“JPM”) and CIBC World Markets Inc. (“CIBC”;
and together with JPM, the “Noteholders”).

 

W I T N E S S E T H:

 

WHEREAS, the Issuer, the Parent and The Bank of New York Mellon, as trustee (the “Trustee”), have entered into that certain Indenture, dated as of November 15, 2007 (as amended, modified or supplemented prior to the date
hereof, and together with all exhibits thereto, the “Indenture”), in respect of the Issuer’s $315,000,000 principal amount of 11.5% Senior Secured Notes due 2015 (the “Notes”);

 

WHEREAS, the Noteholders together hold 100% of the aggregate principal amount of the Notes outstanding and have retained Stroock & Stroock & Lavan LLP (“Stroock”) as restructuring counsel and Loughlin Meghji + Company
as financial advisor (“LM+Co”; and together with Stroock, the “Advisors”), for the purpose of entering into discussions with the legal and financial advisors to the Issuer;

 

WHEREAS, an interest payment under the Securities (as defined in the Indenture) is due on May 15, 2009 (the “Interest Payment”);

 

WHEREAS, the Issuer’s failure to make such Interest Payment pursuant to Section 4.01 of the Indenture on or before May 15, 2009 will (subject to the expiration of the applicable grace period under Section 6.01 of the Indenture) constitute an “Event of Default” under Section 6.01
of the Indenture and permit holders of at least 25% in principal amount of the outstanding Securities to accelerate the maturity of the Notes, declare all amounts under the Notes and the Indenture immediately due and payable and exercise all other rights and remedies under the Indenture;

 

WHEREAS, the Issuer has requested that the Noteholders consent to defer payment of the Interest Payment until the Deferral Termination Date (as defined below) and to direct the Trustee in writing to not exercise any rights and remedies on the Noteholders’ behalf regarding the Interest Payment
until such Deferral Termination Date;

 

WHEREAS, the Noteholders are willing to grant the Issuer’s request for such consent to a deferral, and to give to the Trustee such written directions, as described in the preceding paragraph on the terms and subject to the conditions contained herein; and

 

WHEREAS, the Company has advised the Noteholders that it intends to enter into a transaction (the “Transaction”) pursuant to which the Company will seek to effect either (i) a recapitalization or restructuring of a substantial
portion of the equity and/or debt securities and/or other indebtedness of the Company, (ii) a disposition of all or a majority of the outstanding equity securities of the Company and/or all or a majority of the assets or operations of the

 

 

  

  

Company, or (iii) a refinancing of the indebtedness of the Company and/or the placement, raising or issuance of equity, equity-linked or debt securities in connection with the Company.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and subject to the terms and conditions set forth below, the parties hereto hereby agree as follows:

 

1.           Defined Terms.  Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed to such terms in the Indenture.  Each of the following capitalized terms shall
have the meaning set forth below:

 

“Deferral Period” means the period beginning on the Effective Date and continuing through the Deferral Termination Date.

 

“Deferral Termination Date” means the earliest date of occurrence of a Deferral Termination Event.

 

“Deferral Termination Event” means any of the following events:

 

(a) the acceleration of the maturity of any obligations under the Credit Agreement followed by written notice from the Noteholders sent to the Company electing to treat such acceleration as a “Deferral Termination Event”;

 

(b) the occurrence of a Default or an Event of Default under the Indenture other than the failure to make the Interest Payment;

 

(c) the breach of, or failure of the Issuer to comply with Section 5 of this Agreement, without the need for prior written notice, unless cured within one (1) day in the case of Section
5(a); or

 

(d) 5:00 pm EDT on August 14, 2009.

 

“Financial Forecast” means the financial projections prepared by the Company and agreed upon by the Advisors in good faith showing detailed income statement, balance sheet and cash flow statement projections both (a) on a monthly basis through the end of fiscal
year 2009, and (b) on an annual basis through the end of fiscal year 2014.

 

“Ordinary Course Operating and Statutory Liens” means any of the Liens described in clauses (1)-(5), (8) or (11)-(17) of the definition of Permitted Liens.

 

2.           Deferral and Agreement.  Effective as of the Effective Date (as herein defined), notwithstanding anything to the contrary set forth in the Indenture, the Noteholders hereby consent to waive compliance
by the Issuer with any provision of the Indenture and the Securities regarding the Interest Payment during the Deferral Period.  The Issuer agrees to make the Interest Payment on such Deferral Termination Date, along with interest accruing on the Interest Payment at the interest rate applicable to the principal amount under the Indenture and the Securities plus 2.00% per annum, to the extent lawful, with such interest to be payable on the Deferral Termination Date.  Interest shall accrue on
the outstanding principal amount under the Indenture and the Securities during the Deferral Period at the rate provided in the Indenture and

 

  

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the Securities plus 2.00% per annum, to the extent lawful, with such interest to be payable on November 15, 2009.  The Noteholders hereby direct the Trustee not to exercise any rights and remedies on the Noteholders’ behalf regarding the Interest Payment until such Deferral Termination Date or as directed otherwise by the Noteholders.  For
the avoidance of doubt, until the Deferral Termination Date, the non-payment of the Interest Payment due on May 15, 2009 in accordance with this Agreement shall not constitute a default under the Indenture.

 

3.           Limit of Deferral and Consent.  Other than departures therefrom consented to by the Noteholders hereunder, all of the provisions of the Indenture shall continue to be, and shall remain, in full force
and effect in accordance with their terms, and all rights and remedies of the Noteholders and the Trustee arising under the Indenture are hereby expressly preserved.  Except as expressly set forth herein, no failure to exercise nor any delay in exercising, on the part of the Issuer, the Noteholders or the Trustee, of any right, remedy, power or privilege under the Indenture or otherwise shall operate as a waiver thereof.  No waiver shall be effective unless in writing.  The Issuer,
the Noteholders and the Trustee hereby agree that, during the pendency of this Agreement, all statutes of limitations and similar laws, rules and equitable theories with respect to the time in which the Trustee or any Noteholder, on the one hand, or the Issuer, on the other hand, may bring any claim or action against the other shall be tolled and that the passage of such time shall not otherwise operate to the detriment of the Issuer, the Trustee or any Noteholder with respect to such right.

 

4.           Effectiveness.  This Agreement shall become effective as of the date (the “Effective Date”), on which each of the following
shall have occurred:

 

(a)           each of the parties hereto shall have executed and delivered a counterpart to this Agreement;

 

(b)           the Issuer shall have delivered a 13-week cash flow forecast in form and substance reasonably satisfactory to the Noteholders;

 

(c)           the Issuer shall have delivered to the Advisors a certificate signed by an officer of the Issuer certifying that, to the Company’s knowledge, no additional Liens exist as of the Effective Date (other than those Liens existing on February 27, 2009) to the extent such
Liens apply to assets or property of the Company with a fair market value equal to or greater than $500,000, other than Ordinary Course Operating and Statutory Liens;

 

(d)           the Company shall have executed, and delivered to the Noteholders a copy of, an agreement with a financial advisor providing financial advisory and investment banking services with respect to the Transaction, such agreement to be in form and substance satisfactory to the
Noteholders in their sole and absolute discretion;

 

(e)           no Default or Event of Default shall have occurred or be continuing as of the Effective Date; and

 

(f)           the Company shall have paid all outstanding fees and expenses of the Advisors.

 

5.           Covenants.

 

  

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(a)           During the Deferral Period, the Company agrees to:

 

(i)           deliver to the Noteholders and the Advisors on each Wednesday, a 13-week cash flow forecast in form and substance reasonably satisfactory to the Noteholders, which forecast shall cover the period commencing the week following such Wednesday;

 

(ii)           deliver to the Noteholders and the Advisors on each Wednesday, a report of the actual results from, together with a comparison against the forecast for (except no comparison shall be required for the first Wednesday following the date hereof, for which no forecast was delivered
the previous week), the immediately preceding week;

 

(iii)           deliver to the Noteholders and the Advisors by the 25th of each month, monthly unaudited financial statements (including an income statement, balance sheet and cash flow statement for the month and fiscal year to date) from the preceding fiscal month in form and substance
reasonably satisfactory to the Advisors;

 

(iv)           deliver to the Noteholders and the Advisors by the 25th of each month, a variance analysis in form and substance reasonably satisfactory to the Advisors comparing the Financial Forecast to the actual results from the previous fiscal month, with an explanation of significant
variances in income statement items, balance sheet items (including working capital) and cash flow items (including capital expenditures);

 

(v)           deliver to the Noteholders and the Advisors by May 22, 2009 the Financial Forecast; and

 

(vi)           deliver such other documents to the Noteholders or the Advisors as either may reasonably request.

 

(b)           During the Deferral Period, the Company agrees not to:

 

(i)           grant or permit to exist any Lien, other than the Liens in effect on the Effective Date or Ordinary Course Operating and Statutory Liens, without the prior written consent of the Noteholders;

 

(ii)           sell, lease, transfer or otherwise dispose of (in one or series of related transactions) any asset of the Company other than in the ordinary course without the prior written consent of the Noteholders; or

 

(iii)           make any Restricted Payment, management incentive fee, earn-out payment or bonus payment without the prior written consent of the Noteholders.

 

(c)           The Company agrees to use its best efforts to consummate the Transaction, and

 

  

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(i)           provide weekly (or more frequently if requested) updates to the Noteholders and the Advisors on the status of such Transaction;

 

(ii)           provide all material documentation relating to such Transaction, including without limitation, copies of any proposal or term sheet, letter of intent, purchase agreement and any material correspondences prepared or delivered by or to the Company and/or sent to or received
from a potential Transaction party in connection with such Transaction that relates to bid prices or valuations; provided, however, that in the event that the Noteholders express an intent to acquire the assets of the Company through foreclosure or other credit bid basis, then materials prepared by the Company’s financial advisors solely for the Company and which would in the
financial advisor’s opinion chill the bidding process shall be excluded from this subsection (ii);

 

(iii)           provide the Noteholders and the Advisors with reasonable access to the legal and financial advisors to the Company who shall furnish information regarding such Transaction (including potential buyer lists, descriptions of transaction structure and consideration to be received)
and its status; provided, however, such access to the Company’s legal advisors shall not be construed to be a waiver of the Company’s attorney/client privilege with such legal advisors; and

 

(iv)           provide, or cause the legal and financial advisors to the Company with respect to the Transaction to provide, such other information as the Noteholders or the Advisors may reasonably request with respect to the Transaction;

 

provided, however, that anything to the contrary notwithstanding, nothing contained herein shall be deemed a consent by the Noteholders to the Transaction if such consent would otherwise be required by the Indenture
or this Agreement.

 

6.           Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

 

7.           Costs and Expenses.  The Issuer agrees to pay on demand all costs and expenses of the Noteholders and the Trustee in connection with the preparation, execution and delivery of this Agreement, including
the reasonable fees, costs and expenses of the Advisors to the Noteholders with respect thereto and to Pryor Cashman LLP as advisors to the Trustee with respect thereto.

 

8.           Notices.  All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered personally, mailed
certified or registered mail (return receipt requested) with postage prepaid, sent by facsimile, or sent by next day or overnight mail or courier, addressed or sent to the following address or facsimile number:

 

	
(i)           If to the Company, addressed to:

  

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Barzel Industries Inc.

Barzel Finco Inc.

320 Norwood Park South, 2nd Floor

Norwood, MA 02062

Facsimile No:  (781) 486-9120

Attention:   Corrado De Gasperis

    Karen Narwold, Esq.

 

	
with a copy to:

 

	
Kelley Drye & Warren LLP

400 Atlantic Street

Stamford, CT 06901

Facsimile No.:  (203) 327-2669

Attention:   Ridgway Barker, Esq.

 

	
(ii)           If to JPM, addressed to:

 

	
JPMorgan Chase Bank, N.A.

277 Park Avenue, 8th Floor

New York, NY 10172

Facsimile No:  (212) 622-4556

Attention:     Douglas Jenks

 

	
with a copy to:

 

	
Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, NY 10038

Facsimile No.:  (212) 806-6006

Attention:     Andrew DeNatale, Esq.

 

	
(iii)           If to CIBC, addressed to:

 

	
CIBC World Markets

425 Lexington Avenue

New York, NY 10017

Facsimile No:  (212) 856-3991

Attention:     Lindsay Gordon

 

	
   with a copy to:

 

	
Stroock & Stroock & Lavan LLP

180 Maiden Lane

New York, NY 10038

Facsimile No.:  (212) 806-6006

Attention:     Andrew DeNatale, Esq.

  

6

  

	
(iv)           If to the Trustee, addressed to:

	
The Bank of New York Mellon

101 Barclay Street, Floor 8W

New York, New York 10286

Facsimile No.:  (212) 815-5704

Attention:     Christopher Greene

 

	
with a copy to:

 

	
Pryor Cashman LLP

410 Park Avenue

New York, NY 10022

Facsimile No.:  (212) 798-6307

Attention:     Ron Sarubbi, Esq.

 

Such addresses and facsimile numbers may be changed, from time to time, by means of a notice given in the manner provided in this Section 8.

 

All such notices, requests, demands and other communications shall be deemed to have been received (i) if delivered personally, on the day delivered, (ii) if mailed registered or certified mail (return receipt requested), on the next Business Day after the day on which the written receipt of such mail is signed, (iii) if sent by facsimile,
on the day sent by facsimile, and (iv) if sent by next day or overnight mail or courier, on the day delivered.

 

9.           Headings.  All headings in this Agreement are included only for convenience and ease of reference and shall not be considered in the construction and interpretation of any provision hereof.

 

10.           Binding Nature and Benefit.  This Agreement shall be binding upon and inure to the benefit of each party hereto and their respective successors and assigns.

 

11.           Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original for all purposes, but all of which together shall constitute one and the same instrument.

 

12.           No Modifications.  Except as expressly modified hereby, the terms and conditions of the Indenture shall continue unchanged and remain in full force and effect.

 

[Signature pages follow]

 

  

7

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.

	  	  	  	
BARZEL INDUSTRIES INC.

	  	  	  	  	  
	  	  	  	
By: 
	
/s/ Corrado De Gasperis

	  	  	  	  	
Name:

Title

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
BARZEL FINCO INC.

	  	  	  	  	  
	  	  	  	
By: 
	
/s/ Corrado De Gasperis

	  	  	  	  	
Name:

Title

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
JPMORGAN CHASE BANK, N.A.

	  	  	  	  	  
	  	  	  	
By: 
	
/s/ Douglas A. Jenks

	  	  	  	  	
Name:  Douglas A. Jenks

Title     Managing Director

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	
CIBC WORLD MARKETS INC.

	  	  	  	  	  
	  	  	  	
By: 
	
/s/ E. Lindsay Gordon

	  	  	  	  	
Name:  E. Lindsay Gordon

Title     Authorized  Signatory

Acknowledged:

	
THE BANK OF NEW YORK MELLON, AS TRUSTEE
	  	  
	  	  	  
	
By:
	
/s/ Gary S. Bush
	  	  
	  	
Name:  Gary S. Bush

Title     Vice President
	  	  

[Signature page to Deferral Agreement]

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