EXHIBIT 10.1(b)
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of August 6, 2002
(this "Amendment"), is among STEEL DYNAMICS, INC. (the "Borrower"), the Lenders
(as defined below) signatories hereto, JPMORGAN CHASE BANK, as administrative
agent for the Lenders (in such capacity, the "Administrative Agent") and XXXXXX
XXXXXXX SENIOR FUNDING, INC., as Arranger and Syndication Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, certain financial institutions and other
Persons (such capitalized term and other capitalized terms used in these
recitals to have the meanings set forth or defined by reference in Part I below)
from time to time parties thereto (collectively, the "Lenders"), JPMorgan Chase
Bank, as Collateral Agent, the Administrative Agent, General Electric Capital
Corporation, as Documentation Agent, and Xxxxxx Xxxxxxx Senior Funding, Inc., as
Arranger and Syndication Agent, are parties to the Credit Agreement, dated as of
March 26, 2002 (the "Existing Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders amend the
Existing Credit Agreement as set forth below; and
WHEREAS, the Lenders have agreed, subject to the terms and
conditions hereinafter set forth, to amend the Existing Credit Agreement in
certain respects (the Existing Credit Agreement, as so amended or otherwise
modified by this Amendment, being referred to as the "Credit Agreement");
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration (the receipt and sufficiency of which is hereby
acknowledged), the parties hereto hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. The following terms (whether or
not underscored) when used in this Amendment shall have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Administrative Agent" is defined in the preamble.
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the third recital.
"Existing Credit Agreement" is defined in the first recital.
"First Amendment Effective Date" is defined in Subpart 3.1.
"Lenders" is defined in the first recital.
SUBPART 1.2. Other Definitions. Terms for which meanings are
provided in the Existing Credit Agreement are, unless otherwise defined herein
or the context otherwise requires, used in this Amendment with such meanings.
PART II
AMENDMENTS
Effective on (and subject to the occurrence of) the First Amendment
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part; except as so amended or otherwise modified by this Amendment,
the Existing Credit Agreement and the Loan Documents shall continue in full
force and effect in accordance with their terms.
SUBPART 2.1. Amendment to Article I. Article I of the Existing
Credit Agreement is hereby amended in accordance with Subparts 2.1.1 and 2.1.2.
SUBPART 2.1.1. Section 1.01 of the Existing Credit Agreement
is hereby amended by (a) deleting the reference to "$10,000,000" appearing
in the definition of "Letter of Credit Facility" and inserting a reference
to "$15,000,000" in replacement therefor and (b) inserting immediately
after the phrase "any capital expenditures" in clause (iv) of the
definition of "Fixed Charge Coverage Ratio" the phrase "(other than the
Capital Expenditures referred to in clauses (i) and (ii) of the proviso to
Section 5.02(p))".
SUBPART 2.1.2. Section 1.01 of the Existing Credit Agreement
is hereby further amended by inserting the following new definitions
therein in the appropriate alphabetical order:
"First Amendment" means the First Amendment, dated as of
August 6, 2002, to this Agreement among the Borrower, the
Administrative Agent, Xxxxxx Xxxxxxx Senior Funding, Inc. and the
Lenders parties thereto.
"First Amendment Effective Date" is defined in Subpart 3.1 of
the First Amendment.
"Pittsboro Mill" means that certain mini-mill in Pittsboro,
Indiana to be acquired from Qualitech Steel SBQ LLC in connection
with the Pittsboro Mill Acquisition.
"Pittsboro Mill Acquisition" means the acquisition by a new
wholly owned Subsidiary of the Borrower of all of the assets of a
special bar quality mini-mill in Pittsboro, Indiana from Qualitech
Steel SBQ LLC for aggregate consideration of no more than
$45,000,000 in cash, all as further described in the letter dated
August 5, 2002 from the Borrower to the Lenders, a copy of which is
attached hereto as Annex A (the "Pittsboro Mill Letter").
SUBPART 2.2. Amendment to Article V. Article V of the Existing
Credit Agreement is hereby amended in accordance with Subparts 2.2.1 through
2.2.5.
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SUBPART 2.2.1. Clause (f) of Section 5.02 of the Existing Credit
Agreement is hereby amended by (a) deleting the reference to "$5,000,000"
appearing in sub-clause (i)(A) thereof and inserting a reference to "$6,500,000"
in replacement therefor, (b) deleting the reference to "$5,000,000" appearing in
sub-clause (vii)(A) thereof and inserting a reference to "$15,000,000" in
replacement therefor and (c) deleting the reference to "$5,000,000" appearing in
sub-clause (vii)(B) thereof and inserting a reference to "$15,000,000" in
replacement therefor.
SUBPART 2.2.2. Clause (f) of Section 5.02 of the Existing Credit
Agreement is hereby further amended by (a) deleting the punctuation xxxx "."
appearing at the end of sub-clause (viii) thereof and inserting the punctuation
xxxx ";" in replacement therefor and (b) inserting at the end thereof the
following new sub-clauses (ix), (x) and (xi):
"(ix) equity Investments by the Borrower in a newly formed wholly owned
Subsidiary in an aggregate amount of no more than $115,000,000 for the purpose
of making the Pittsboro Mill Acquisition in an amount not to exceed $45,000,000
and making Capital Expenditures relating to the Pittsboro Mill for conversion
thereof into a facility for the manufacture of merchant bar and reinforcing bar
products and related purposes in an aggregate amount not to exceed $70,000,000,
all subject to the Borrower's obligations under Section 5.01(j) of the Credit
Agreement and to the limitations contained in the proviso to Section 5.02(p) of
the Credit Agreement;
(x) the Pittsboro Mill Acquisition; and
(xi) an Investment of no more than $2,500,000 by the Borrower in the form
of a subordinated loan by the Borrower to NMBS, evidenced by a subordinated
promissory note, a copy of which is attached hereto as Annex B."
SUBPART 2.2.3. Clause (h) of Section 5.02 of the Existing Credit
Agreement is amended by inserting immediately before the period at the end
thereof the following phrase:
"other than certain leases relating to the Pittsboro Mill described and subject
to the terms set forth in Annex C to the First Amendment".
SUBPART 2.2.4. Clause (p) of Section 5.02 of the Existing Credit
Agreement is hereby amended by inserting at the end thereof the following new
proviso:
"provided, however, that for the Fiscal Years ending on December 31, 2002 and
December 31, 2003 (i) an additional Capital Expenditure of no more than
$45,000,000 may be made with respect to the Pittsboro Mill Acquisition, (ii)
additional aggregate Capital Expenditures of no more than $70,000,000 may be
made with respect to the Pittsboro Mill if (and only if) at the time and after
giving effect to each such Capital Expenditures, the aggregate Revolving Credit
Advances do not exceed 50% of the aggregate Revolving Credit Commitments at such
time and (iii) additional aggregate Capital Expenditures of no more than
$30,000,000 may be made with respect the addition of a paint line within the
Borrower's flat roll mill in Xxxxxx, Indiana."
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SUBPART 2.2.5. Clause (q) of Section 5.02 of the Existing Credit
Agreement is amended by deleting the reference to "Section 5.02(f)(i) or
(vii)" appearing in clause (i) thereof and inserting a reference to
"Section 5.02(f)(i), (vii) or (ix)" in replacement therefor.
SUBPART 2.3. Amendment to Schedules. Schedule 4.01(u) of the
Existing Credit Agreement is hereby amended by deleting paragraph 13 thereof.
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Effectiveness. This Amendment and the amendments
contained herein shall become effective on the date (the "First Amendment
Effective Date") when each of the conditions set forth in this Part shall have
been fulfilled to the satisfaction of the Administrative Agent provided that
such conditions are in any event fulfilled no later than October 31, 2002.
SUBPART 3.1.1. Execution of Counterparts. The Administrative
Agent and the Arranger shall have received counterparts of this Amendment,
duly executed and delivered on behalf of the Borrower, the Administrative
Agent and the Required Lenders.
SUBPART 3.1.2. Amendment Fee. The Administrative Agent shall
have received, for the account of (a) each Lender which shall have
executed this Amendment before 12:00 p.m. (New York time) on August 9,
2002, an amendment fee in an aggregate amount equal to .25% of the
aggregate amount of each such Lender's Advances and Commitments and (b)
each Lender which shall have executed this Amendment after 12:00 p.m. (New
York time) on August 9, 2002 and before 5:00 p.m. (New York time) on
August 13, 2002, an amendment fee in an aggregate amount equal to .15% of
the aggregate amount of each such Lender's Advances and Commitments.
SUBPART 3.1.3. Expenses. The Borrower shall have paid all
expenses (including the fees and expenses of Shearman & Sterling) incurred
in connection with the preparation, negotiation and execution of this
Amendment and foregoing matters relating to the Credit Agreement from and
after the closing thereof to the extent invoiced.
SUBPART 3.1.4. Pittsboro Mill Acquisition. No litigation shall
be pending that enjoins or seeks to enjoin the Pittsboro Mill Acquisition
or which otherwise seeks to prevent the Borrower from obtaining clear
title to the Pittsboro Mill assets unless (a)(i) in the event that and
during such time as there is pending litigation enjoining or seeking to
enjoin the Borrower's acquisition of the Pittsboro Mill, or if for any
other reason the Borrower's right and title to the Pittsboro Mill assets
is the subject of pending litigation, the Borrower shall have ensured that
if and to the extent consummated, closing of the Pittsboro Mill
Acquisition shall be structured, in a manner satisfactory to the
Administrative Agent and the Arranger, so as to segregate and preserve
both the Pittsboro Mill assets and the consideration paid by the Borrower
therefor; and such structure shall be maintained until such time as the
Borrower's clear title to the Pittsboro Mill assets has been finally
favorably adjudicated or otherwise favorably settled without material
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increased cost (a "Final Determination") and (ii) until such time of a
Final Determination, the Borrower shall not place any non-cancelable
orders (nor any cancelable orders the cancellation of which would involve
any material costs) for or otherwise expend any material Capital
Expenditures related to the Pittsboro Mill Acquisition or (b) consented to
by the Required Lenders.
SUBPART 3.1.5. Legal Details, etc. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to
the Administrative Agent and the Arranger and Shearman & Sterling as
counsel. The Administrative Agent, the Arranger and counsel shall have
received all information and such counterpart originals or such certified
or other copies or such materials as the Administrative Agent, the
Arranger or counsel may reasonably request, and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory
to the Administrative Agent, the Arranger and counsel.
PART IV
MISCELLANEOUS; REPRESENTATIONS AND COVENANTS
SUBPART 4.1. Continuing Effectiveness, etc. As amended hereby, the
Credit Agreement shall remain in full force and effect and is hereby ratified
and confirmed in all respects. After the First Amendment Effective Date, all
references in the Credit Agreement and each other Loan Document to the
"Agreement" or "Credit Agreement", as applicable, shall refer to the Existing
Credit Agreement, after giving effect to this Amendment, and this Amendment
shall be a Loan Document for all purposes. The Borrower hereby confirms its
obligations under Section 8.04 of the Credit Agreement to pay all fees and
expenses of the Administrative Agent and the Arranger (including reasonable fees
and out-of-pocket expenses of Shearman & Sterling) in connection with this
Amendment and other ongoing administration of the Credit Agreement as provided
in Section 8.04 of the Credit Agreement since the last invoice it received.
SUBPART 4.2. Guarantee Obligations and Give Security. The Borrower
hereby confirms its obligations under Section 5.01(j) of the Credit Agreement
to, and to cause any new Subsidiary formed in connection with the Pittsboro Mill
Acquisition (as defined in Subpart 2.1.2 of this Amendment) to, guarantee
obligations and give security in connection and with respect to the Pittsboro
Mill Acquisition as such obligations are described in Section 5.01(j) of the
Credit Agreement.
SUBPART 4.3. Counterparts. This Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original but all such
counterparts shall together constitute one and the same Amendment.
SUBPART 4.4. Governing Law. THIS AMENDMENT SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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SUBPART 4.5. Successors and Assigns. This Amendment shall be binding
upon the Borrower, the Lenders and the Agents and their respective successors
and assigns, and shall inure to their successors and assigns.
SUBPART 4.6. Representations and Warranties. In order to induce the
Lenders to execute and deliver this Amendment, the Borrower represents and
warrants to the Agents, the Lenders and the Issuing Bank that, after giving
effect to the terms of this Amendment, the following statements are true and
correct: (a) the representations and warranties set forth in Article IV of the
Existing Credit Agreement and in the other Loan Documents are true and correct
on the First Amendment Effective Date as if made on the First Amendment
Effective Date and after giving effect to the First Amendment (unless stated to
relate solely to an earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date); (b) no Default has occurred and is continuing; (c) that the Pittsboro
Mill Letter contains statements that are true and complete in all material
respects with respect to the Pittsboro Mill Acquisition and does not omit to
state any material fact necessary to make the statements made therein not
misleading and (d) the acquisition agreement for the Pittsboro Mill Acquisition
contains unqualified representations and warranties from the seller thereunder
providing that the consummation of such acquisition will not violate or
otherwise breach agreements to which such seller is a party.
SUBPART 4.7. Modifications to this Amendment. This Amendment can be
amended, waived or otherwise modified by instrument in writing signed by the
Borrower and the Required Lenders.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed and delivered by their respective authorized officers as of the day
and year first above written.
STEEL DYNAMICS, INC.
By: /s/ Xxxxx X. Xxxxxxxxxxxx
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Title: Vice President
LENDERS:
JPMORGAN CHASE BANK,
as Administrative Agent and Collateral Agent and
as a Lender
By: /s/ Xxxxx X. Xxxxxx
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Title: Managing Director
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Arranger and Syndication Agent and as a
Lender
By: Xxxxxxx X. X'Xxxxx
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Title: Vice President
[Other Lenders' Signature pages are omitted]
