Document:

Exhibit
4.18

 

CONSENT TO INCREASED CAPITAL EXPENDITURES

 

This CONSENT
TO INCREASED CAPITAL EXPENDITURES (this “Consent”) is dated as of
June    , 2004 and is by and among EARLE M. JORGENSEN HOLDING COMPANY, INC., a  Delaware
corporation (“Holding”), EARLE M. JORGENSEN
COMPANY, a Delaware corporation (“Borrower”) the financial
institutions party to the Credit Agreement (each a “Lender” and, collectively,
“Lenders”) and DEUTSCHE BANK TRUST COMPANY
AMERICAS (formerly known as Bankers Trust Company), as Agent for the
Lenders (in such capacity, “Agent”).

 

RECITALS

 

WHEREAS, Holding, Borrower, Lenders, Agent and Deutsche Bank Securities, Inc.,
as Lead Arranger and Sole Book Runner, have entered into that certain Second
Amended and Restated Credit Agreement dated as of March 3, 1993, amended and
restated as of March 24, 1998 and further amended and restated as of April 12,
2002 (as amended, supplemented or otherwise modified to date, the “Credit
Agreement”; capitalized terms used herein without definition shall have the
meanings ascribed to such terms in the Credit Agreement); and

 

WHEREAS, Borrower has requested that Agent and the Lenders consent to an
increase in the amount of permitted Capital Expenditures in fiscal year 2005;
and

 

WHEREAS, Agent and the Lenders are, on the terms and conditions set forth
herein, willing to grant such consent.

 

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and upon execution and delivery hereof by Holding, Borrower, Agent and Required
Lenders, the parties to the Credit Agreement hereby agree as follows:

 

AGREEMENT

 

Section 1.              CONSENT

 

Effective upon the Consent
Effective Date (as defined in Section 2 below), Agent and Lenders hereby
consent to an increase in the Capital Expenditures permitted by Section 8.4 of
the Credit Agreement to $20,000,000 for the fiscal year beginning April 1,
2004, in addition to any “excess” available under the proviso contained
in such Section 8.4.

 

Section 
2.             CONDITIONS
TO EFFECTIVENESS

 

This Consent shall become
effective (the date of satisfaction of the following condition being referred
to herein as the “Consent Effective Date”) upon the execution and delivery to
Agent of a counterpart hereof by Holding and Borrower, the Required Lenders and
Agent; provided, however, that Holding, Borrower and/or any Lender may deliver its counterpart
signature page hereto by telecopy to Agent or Agent’s counsel, which delivery
shall be binding

 

 

on Holding, Borrower and/or
such Lender. Holding, Borrower and any such Lender delivering the signature
page by telecopy shall promptly provide Agent or Agent’s counsel with an
adequate number (as determined by Agent) of originally executed signature pages
hereto..

 

	
  Section 3.

  	
  MISCELLANEOUS PROVISIONS

  
	
   

  	
   

  
	
   

  	
  3.01          Effect on and Ratification of the Credit
  Agreement and Credit Documents.

  

 

A.            The execution, delivery and effectiveness of
this Consent shall not, except as expressly provided herein, operate as a
modification or waiver of any provision of the Credit Agreement or of any
right, power or remedy of Agent or any Lender under the Credit Agreement.

 

B.            As specifically modified hereby, the
Credit Agreement and other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed.

 

3.02        Headings.   Section headings in this Consent are
included herein for convenience of reference only and shall not constitute a
part of this Consent for any other purpose or be given any substantive effect.

 

3.03        Counterparts.    This Consent may be executed in any number
of counterparts, and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same
instrument.   Delivery of an executed
counterpart hereof by telecopy shall be effective as delivery of an executed
original hereof.

 

3.04        Applicable
Law.   THIS CONSENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE AND
WITHOUT REGARD TO CONFLICT OF LAWS.

 

 

[Signature Pages Follow]

 

2

 

IN WITNESS WHEREOF,
this Consent to Increased Capital Expenditures has been duly executed on behalf
of each of the undersigned as of the date first written above.

 

 

	
   

  	
  EARLE M. JORGENSEN HOLDING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William
  S. Johnson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William S.
  Johnson

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VP & CFO

  	
   

  

 

 

	
   

  	
  EARLE M. JORGENSEN COMPANY

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ William
  S. Johnson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  William S.
  Johnson

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VP & CFO

  	
   

  

 

 

S-1

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS,

  as Agent

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Albert
  Fischetti

  	
   

  
	
   

  	
   

  	
  Name:

  	
  ALBERT
  FISCHETTI

  	
   

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  	
   

  

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS,

  as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Albert
  Fischetti

  	
   

  
	
   

  	
   

  	
  Name:

  	
  ALBERT
  FISCHETTI

  	
   

  
	
   

  	
   

  	
  Title:

  	
  DIRECTOR

  	
   

  

 

S-2

 

	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.

  as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Renee
  Singer

  	
   

  
	
   

  	
   

  	
  Name:

  	
  RENEE SINGER

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VICE
  PRESIDENT, TEAM LEADER

  	
   

  
						

 

S-3

 

	
   

  	
  CONGRESS FINANCIAL CORPORATION

  as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Herbert
  C. Korn

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Herbert C.
  Korn

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VP

  	
   

  

 

S-4

 

	
   

  	
  BANK OF AMERICA BUSINESS CAPITAL

  (as successor to Fleet Capital Corporation),
as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

S-5

 

	
   

  	
  WELLS FARGO FOOTHILL (formerly known as Foothill Capital
  Corporation),

  as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Dennis
  King

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Dennis King

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  	
   

  

 

S-6

 

	
   

  	
  GMAC COMMERCIAL CREDIT, LLC,

  as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Daniel
  L. Murray

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Daniel L.
  Murray

  	
   

  
	
   

  	
   

  	
  Title:

  	
  First Vice
  President

  	
   

  

 

S-7

 

	
   

  	
  LA SALLE NATIONAL BANK,
as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Wayne D.
  Hillock

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Wayne D.
  Hillock

  	
   

  
	
   

  	
   

  	
  Title:

  	
  SVP

  	
   

  

 

S-8

 

	
   

  	
  MANUFACTURERS BANK,
as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Tom
  Larson

  	
   

  
	
   

  	
   

  	
  Name:

  	
  TOM LARSON

  	
   

  
	
   

  	
   

  	
  Title:

  	
  VICE
  PRESIDENT

  	
   

  

 

S-9

 

	
   

  	
  FLEET CAPITAL CORPORATION,

  as a Lender

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Matthew
  Van Steenhuvse

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Matthew Van
  Steenhuvse

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice
  President

  	
   

  

 

S-10Exhibit 10.25

 

[Execution
Copy]

 

TERMINATION
OF MERGER AGREEMENT AND EXCHANGE AGREEMENT

 

THIS TERMINATION OF
MERGER AGREEMENT AND EXCHANGE AGREEMENT (this “Agreement”) is dated as of July
30, 2004, by and between Earle M. Jorgensen Holding Company, Inc. (“Holding”)
and Earle M. Jorgensen Company (“Company”). 
All terms not otherwise defined herein shall have such meanings as are
set forth in the Merger Agreement (as defined below).

 

WHEREAS, Holding, the
Company and EMJ Metals LLC entered into that certain Merger Agreement (the
“Merger Agreement”) dated as of December 18, 2003, pursuant to which the
parties agreed, among other things, that at the Effective Time (a) Holding
would be merged with and into EMJ Metals LLC and the separate corporate
existence of Holding shall cease and EMJ Metals LLC shall be the surviving
entity and (b) all issued and outstanding shares of Holding’s common stock,
Holding’s 13% Cumulative Preferred Stock, $0.01 par value, and Holding’s
Variable Rate Cumulative Preferred Stock, $0.01 par value would be converted
into shares of common stock (the “Common Stock”), par value $0.001 per share of
the Company;

 

WHEREAS, Holding, the
Company and certain stockholders and noteholders of Holding entered into that
certain Exchange Agreement (the “Exchange Agreement”) dated as of December 18,
2003, pursuant to which the parties agreed, among other things, that KIA IV
would exchange its Series A Variable Rate Senior Notes and each of its Holding
Warrants for Common Stock;

 

WHEREAS, Section 12.1 of the
Merger Agreement provides, among other things, that the Company or Holding may
terminate the Merger Agreement if the Merger shall not have been consummated by
May 31, 2004;

 

WHEREAS, Section 7.1 of
the Exchange Agreement provides that the Exchange Agreement shall terminate
upon the earlier to occur of (a) the Effective Time and (b) termination of the
Merger Agreement;

 

WHEREAS, Section 9.5 of
the Merger Agreement provides, among other things, that from the date of the
Merger Agreement through the Effective Time, neither Holding nor the Company
shall declare, set aside or pay any dividend or other distribution or payment
in cash, stock or property in respect of its shares of capital stock;

 

WHEREAS, Section 9.6 of
the Merger Agreement provides that KIA IV agrees to waive until the Effective
Time, or if earlier, the date that the Merger Agreement is terminated its right
to declare Holding in default and accelerate payment of all amount due on the
Series A Variable Rate Senior Notes on account of the failure to pay any
interest or any other amounts due from December 1, 2003 through the Effective
Time.

 

WHEREAS, Holding and the
Company collectively desire to terminate the Merger Agreement with the effect
of also terminating the Exchange Agreement.

 

 

NOW, THEREFORE, in
consideration of the foregoing premises and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties hereby agree as follows:

 

1.             Termination of Merger Agreement.  Pursuant to Section 12.1 of the Merger
Agreement, the parties hereby agree that, effective immediately, the Merger
Agreement is terminated in its entirety, shall be of no further force or effect
and the rights and obligations of all parties thereto will be terminated and
cancelled, including, without limitation, the covenants contained in Section
9.5 and Section 9.6 of the Merger Agreement.

 

2.             Counterparts. 
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

 

[Remainder of page intentionally left blank;

Signature page follows]

 

2

 

IN WITNESS WHEREOF, the
parties hereto have executed this Agreement to be effective as of the date
first written above.

 

	
   

  	
  EARLE M.
  JORGENSEN COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William S.
  Johnson

  	
   

  
	
   

  	
  Its:

  	
  Vice President
  and Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EARLE M.
  JORGENSEN HOLDING COMPANY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  :

  	
  By:

  	
  /s/ William S.
  Johnson

  	
   

  
	
   

  	
  Its:

  	
  Vice President
  and Chief Financial Officer

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