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EXHIBIT 10.01
AMENDMENT NO. TWO TO CREDIT AGREEMENT
This Amendment No. Two to Credit Agreement (this "Amendment") dated as
of September 8, 1998, is entered into between Reliance Steel & Aluminum Co.
("Borrower") and Bank of America National Trust and Savings Association
("Bank").
RECITALS
A. The Bank and Borrower are parties to a certain Credit Agreement dated
as of October 22, 1997, as modified by an amendment dated as of April 16, 1998
(as amended, the "Agreement").
B. The Bank and Borrower desire to amend the Agreement for the purpose
of, among other things, adding a facility for cash advances in the commitment
amount of $25,000,000.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment
shall have the meanings given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
2.1 The following definitions are added to Section 1.1 of the
Agreement in alphabetical order:
"`Base Rate Loan' means a Loan which bears interest based on the
Base Rate.
"`Borrowing' and `Borrow' each mean a borrowing hereunder
consisting of Loans of the same type made on the same day and, other
than in the case of Base Rate Loans, having the same Interest Period.
"`Borrowing Date' means the date that a Loan is made by the
Bank, which shall be a Business Day.
"`Commitments' means the Loan Commitment and the L/C Commitment.
"`Continuation' and `Continue' each mean, with respect to any
Loan other than a Base Rate Loan, the continuation of such Loan as the
same type of Loan in the same principal amount, but with a new Interest
Period and an interest rate determined as of the first day of such new
Interest Period. Continuations must occur on the last day of the
Interest Period for such Loan.
"`Conversion' and `Convert' each mean, with respect to any Loan,
the conversion of one type of Loan into another type of Loan. With
respect to Loans other than Base Rate Loans, Conversions must occur on
the last day of the Interest Period for such Loan.
"`Interest Payment Date' means, (a) with respect to any Base
Rate Loan, the last Business day of each month and the Loan Maturity
Date, and (b) with respect to
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any other type of Loan, (i) any date that such Loan is prepaid in whole
or in part, (ii) the last day of each Interest Period applicable to, or
the maturity of, such Loan; provided, however, that if any Interest
Period or the maturity of any such Loan exceeds one month, the date that
falls on the last Business Day of each month within such Interest Period
shall also be an Interest Payment Date, and (iii) the Loan Maturity
Date.
"'Interest Period' means, as to any Loans other than Base Rate
Loans, the period commencing on the date specified by Borrower in its
Request for Extension of Credit and ending one, two, or three months
thereafter, as selected by Borrower in the Request for Extension of
Credit relating thereto; provided that:
(a) The first day of any Interest Period shall be a Business
Day;
(b) Any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next
succeeding Business Day unless, in the case of an Offshore Rate
Loan, such Business Day falls in another calendar month, in
which case such Interest Period shall end on the immediately
preceding Business Day;
(c) No Interest Period shall extend beyond the Loan Maturity
Date.
"'L/C Commitment' means, for the Bank, the amount of
$10,000,000.
"'L/C Maturity Date' means the date that is five years after the
Closing Date, but not later than December 31, 2002.
"'Loan' means any advance made or to be made by the Bank to
Borrower as provided in Section 2.
"'Loan Commitment' means, for the Bank, the amount of
$25,000,000.
"'Loan Maturity Date' means December 15, 1998.
"'Minimum Amount' means, with respect to each of the following
actions, the following amounts set forth opposite such action (a
reference to "Minimum Amount" shall also be deemed a reference to the
multiples in excess thereof set forth below):
Minimum
Multiples
Minimum in excess of
Type of Action Amount Minimum Amount
-------------- ------- --------------
Borrowing of, prepayment of or $5,000,000 $100,000
Conversion into, Base Rate Loans
Borrowing of, prepayment of, $5,000,000 $100,000
Continuation of, or Conversion
into, Offshore Rate Loans
"'Offshore Rate' means, for any Interest Period with respect to
Offshore Rate Loans comprising part of the same Borrowing, the per annum
rate of interest
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(rounded upward to the next 1/16th of 1%) determined by the Bank (whose
determination shall be conclusive in the absence of manifest error) as
follows:
Offshore Rate = Offshore Base Rate
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
'Eurodollar Reserve Percentage' means for any day for any
Interest Period the maximum reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day (whether
or not applicable to the Bank) under regulations issued from time to
time by the FRB for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently referred to
as `Eurocurrency liabilities'). The Offshore Rate for any outstanding
Offshore Rate Loans shall be adjusted automatically as of the effective
date of any change in the Eurodollar Reserve Percentage.
`Offshore Base Rate' means, as Borrower may elect in its Request
for Extension of Credit, either (a) the interest rate per annum (rounded
upward to the next 1/16 of 1%) at which deposits in Dollars are offered
by the Bank's applicable Lending Office to major banks in the Offshore
Rate Designated Market at or about 11:00 a.m. local time in the Offshore
Rate Designated Market, two Business Days before the first day of the
applicable Interest Period in an aggregate amount approximately equal to
the amount of the Loan made by Bank with respect to such Offshore Rate
Loan and for a period of time comparable to the number of days in the
applicable Interest Period or (b) the interest rate per annum (rounded
upward, if necessary to the next 1/16 of 1%) at which deposits in
Dollars are offered by the Bank to major banks in the Cayman Islands
offshore interbank market at or about 11:00 a.m. local time, on the
first day of the applicable Interest Period in an aggregate amount
approximately equal to the amount of the Loan and for a period of time
comparable to the number of days in the applicable Interest Period.
The determination of the Eurodollar Reserve Percentage and the Offshore
Base Rate by the Bank shall be conclusive in the absence of manifest
error.
"`Offshore Rate Designated Market' means, with respect to any
Offshore Rate Loan, (a) the London eurodollar market or the Cayman
Islands offshore Dollar interbank market, as elected by Borrower, (b) if
major banks in the London eurodollar market are at the relevant time not
accepting deposits of Dollars or if the Bank determines in good faith
that the London eurodollar market does not represent at the relevant
time the effective pricing to the Bank for deposits of Dollars in the
London eurodollar market, the Cayman Islands offshore Dollar interbank
market or (c) if major banks in the Cayman Islands offshore Dollar
interbank market are at the relevant time not accepting deposits of
Dollars or if the Bank determines in good faith that the Cayman Islands
offshore Dollar interbank market does not represent at the relevant time
the effective pricing to the Bank for deposits of Dollars in the Cayman
Islands offshore Dollar interbank market, such other Offshore Market as
may from time to time be selected by the Bank with the approval of
Borrower.
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"`Offshore Rate Loan' means a Loan that bears interest based on
the Offshore Rate.
"`Request for Extension of Credit' means a written request
substantially in the form of Exhibit D or telephonic request followed by
such written request, duly completed and signed by a Responsible
Officer, in each case delivered to the Bank by Requisite Notice.
"`type' of Loan means (a) a Base Rate Loan or (b) an Offshore
Rate Loan with an Interest Period of one, two, or three months
thereafter, as selected by Borrower in the Request for Extension of
Credit relating thereto."
2.2 The definition of "Applicable Amount" in Section 1.1 of the
Agreement is amended in full to read as follows:
"`Applicable Amount' means, for any Pricing Period, the per
annum amounts set forth below under Applicable Amount opposite the
applicable Pricing Level; provided, however, that until the Bank's
receipt of the second quarterly Compliance Certificate after the Closing
Date required under Section 6.2(a), such interest rates, fees and
commissions shall be those indicated for Pricing Level 3:
Applicable Amount
(in basis points per annum)
Pricing --------------------------------------------------------------
Level Standby Letters of Credit Offshore Rate + Base Rate +
----- ------------------------- --------------- -----------
1 27.50 35.00 0
2 32.50 35.00 0
3 37.50 35.00 0
4 45.00 35.00 0
5 62.50 35.00 0"
2.3 The definition of "Commitment" in Section 1.1 of the
Agreement is deleted in its entirety.
2.4 The definition of "Extension of Credit" in Section 1.1 of the
Agreement is amended in full to read as follows:
"`Extension of Credit' means (a) the Borrowing of any Loans, (b)
the Conversion or Continuation of any Loans or (c) the issuance,
renewal, increase, continuation, amendment or other credit action with
respect to any Letter of Credit (collectively, the `Extensions of
Credit')."
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2.5 The definition of "Maturity Date" in Section 1.1 of the
Agreement is deleted in its entirety.
2.6 The definition of "Outstanding Obligations" in Section 1.1 of
the Agreement is amended in full to read as follows:
"`Outstanding Obligations' means, as of any date, and giving
effect to making any Extensions of Credit requested on such date and all
payments, repayment and prepayments made on such date, the sum of (a)
the aggregate outstanding principal of all Loans, and (b) all Letter of
Credit Usage."
2.7 The definition of "Requisite Time" in Section 1.1 of the
Agreement is amended in full to read as follows:
"`Requisite Time' means, with respect to any of the actions
listed below, the time set forth opposite such action (all times are
California time) on or prior to the date (the "relevant date") of such
action:
Action Time Date
------ ---- ----
Borrowing or prepayment
of Base Rate Loans 9:00 a.m. Relevant date
Borrowing of, continuation 10:00 a.m. If the Offshore Base Rate
of, prepayment of or is based on the London
conversion into eurodollar market, 3
Offshore Rate Loans Business Days prior to
relevant date; if the
Offshore Base Rate is
based on the Cayman
Islands offshore
interbank market, the
relevant date
Letter of Credit action 10:00 a.m. 5 Business Days
prior to relevant date
Funds made available by 11:00 a.m. Relevant date"
Borrower to Bank
2.8 Sections 2 and 3 of the Agreement are amended in full to read
as follows:
"Section 2
"COMMITMENTS; INTEREST, FEES, PAYMENT PROCEDURES
"2.1 Loans.
"(a) Subject to the terms and conditions set forth in this
Agreement, the Bank agrees to make, Convert and Continue Loans during
the Availability Period as Borrower may request; provided, however, that
the Outstanding Loans of the Bank shall not exceed the Bank's Loan
Commitment. Subject to the foregoing and other terms and
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conditions hereof, Borrower may borrow, Convert, Continue, prepay and
reborrow Loans as set forth herein without premium or penalty.
"(b) Loans made by the Bank shall be evidenced by one or
more loan accounts or records maintained by the Bank in the ordinary
course of business. Upon the request of the Bank, the Bank's Loans may
be evidenced by one or more promissory notes, instead of or in addition
to loan accounts. (The Bank may endorse on the schedules annexed to its
promissory note(s) the date, amount and maturity of its Loans and
payments with respect thereto.) Such loan accounts, records or
promissory notes shall be conclusive absent manifest error of the amount
of such Loans and payments thereon. Any failure so to record or any
error in doing so shall not, however, limit or otherwise affect the
obligation of Borrower to pay any amount owing with respect to the
Loans.
"(c) Borrower shall use the proceeds of Loans for general
corporate purposes, including without limitation financing working
capital and acquisitions.
"2.2 Borrowings, Conversions and Continuations of Committed
Loans.
"(a) Borrower may irrevocably request a Borrowing,
Conversion or Continuation of Loans in a Minimum Amount therefor by
delivering a duly completed Request for Extension of Credit therefor by
Requisite Notice to the Bank not later than the Requisite Time therefor.
All Borrowings, Conversions or Continuations shall constitute Base Rate
Loans unless properly and timely otherwise designated as set forth in
the preceding sentence.
"(b) Promptly following receipt of a Request for Extension
of Credit, the Bank shall make the funds for its Loan available to the
Borrower not later than the Requisite Time therefor on the Business Day
specified in such Request for Extension of Credit upon satisfaction or
waiver of the applicable conditions set forth in Section 4.
"(c) Unless the Bank otherwise consents, Loans with no
more than 5 different Interest Periods shall be outstanding at any one
time.
"(d) No Loans other than Base Rate Loans may be requested
or continued during the existence of an Event of Default. During the
existence of an Event of Default, the Bank may determine that any or all
of the then outstanding Loans other than Base Rate Loans shall be
Converted to Base Rate Loans. Such Conversion shall be effective upon
notice to Borrower from the Bank and shall continue so long as such
Event of Default continues to exist.
"(e) If a Loan is to be made on the same date that another
Loan is due and payable, Borrower or the Bank, as the case may be, shall
make available to the other the net amount of funds giving effect to
both such Loans and the effect for purposes of this Agreement shall be
the same as if separate transfers of funds had been made with respect to
each such Loan.
"2.3 Letters of Credit.
"(a) Subject to the terms and conditions hereof, at any
time and from time to time from the Closing Date through the L/C
Maturity Date, the Bank shall issue, supplement, modify, amend, renew,
or extend such commercial and standby Letters of
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Credit as Borrower may request; provided, however, that the aggregate
outstanding Letter of Credit Usage shall not exceed the L/C Commitment
at any time. Each Letter of Credit shall be in a form reasonably
acceptable to the Bank. Unless the Bank otherwise consents in writing
and subject to permitting "evergreen" Letters of Credit as provided in
subsection (b) below, the term of any Letter of Credit shall not exceed
the earlier of 12 months from the date of issuance or the L/C Maturity
Date.
"(b) Borrower may irrevocably request the issuance,
supplement, modification, amendment, renewal, or extension of a Letter
of Credit by delivering a duly completed Letter of Credit Application
therefor to the Bank by Requisite Notice not later than the Requisite
Time therefor; provided, however, that for such requests the Required
Notice must be in writing. Standby Letters of Credit may have automatic
extension or renewal provisions ("evergreen" Letters of Credit) so long
as the Bank has the right to terminate such evergreen Letters of Credit
no less frequently than annually within a notice period (the "Letter of
Credit Evergreen Notice Period") to be agreed upon at the time each such
Letter of Credit is issued. This Agreement shall control in the event of
any conflict with any Letter of Credit Application.
"(c) Borrower agrees to pay to the Bank an amount equal to
any payment made by the Bank with respect to each Letter of Credit
within one Business Day after demand made by the Bank therefor, together
with interest on such amount from the date of any payment made by the
Bank at the Default Rate. The principal amount of any such payment shall
be used to reimburse the Bank for the payment made by it under the
Letter of Credit.
"(d) Once an evergreen Letter of Credit is issued,
Borrower shall not be required to request that the Bank permit the
renewal thereof. If such Letter of Credit could be issued within the
Letter of Credit Evergreen Notice Period, the Bank shall permit the
renewal such evergreen Letter of Credit at such time.
"(e) The obligation of Borrower to pay to the Bank the
amount of any payment made by the Bank under any Letter of Credit shall
be absolute, unconditional, and irrevocable. Without limiting the
foregoing, Borrower's obligations shall not be affected by any of the
following circumstances:
"(i) any lack of validity or enforceability of the
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto;
"(ii) any amendment or waiver of or any consent to
departure from the Letter of Credit, this Agreement, or any
other agreement or instrument relating thereto, with the
consent of Borrower;
"(iii) the existence of any claim, setoff, defense, or
other rights which Borrower may have at any time against the
Bank, any beneficiary of the Letter of Credit (or any
persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the
Letter of Credit, this Agreement, or any other agreement or
instrument relating thereto, or any unrelated transactions;
"(iv) any demand, statement, or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
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whatsoever so long as any such document appeared to comply
with the terms of the Letter of Credit;
"(v) payment by the Bank in good faith under the Letter
of Credit against presentation of a draft or any
accompanying document which does not strictly comply with
the terms of the Letter of Credit;
"(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any Property
purported to be represented by documents presented in
connection with any Letter of Credit or for any difference
between any such Property and the character, quality,
quantity, condition, or value of such Property as described
in such documents;
"(vii) the time, place, manner, order or contents of
shipments or deliveries of Property as described in
documents presented in connection with any Letter of Credit
or the existence, nature and extent of any insurance
relative thereto;
"(viii)the solvency or financial responsibility of any
party issuing any documents in connection with a Letter of
Credit;
"(ix) any failure or delay in notice of shipments or
arrival of any Property;
"(x) any error in the transmission of any message
relating to a Letter of Credit not caused by the Bank, or
any delay or interruption in any such message;
"(xi) any error, neglect or default of any
correspondent of the Bank in connection with a Letter of
Credit;
"(xii) any consequence arising from acts of God, wars,
insurrections, civil unrest, disturbances, labor disputes,
emergency conditions or other causes beyond the control of
the Bank;
"(xiii)so long as the Bank in good faith determines
that the document appears to comply with the terms of the
Letter of Credit, the form, accuracy, genuineness or legal
effect of any contract or document referred to in any
document submitted to the Bank in connection with a Letter
of Credit; and
"(xiv) where the Bank has acted in good faith and
observed general banking usage, any other circumstances
whatsoever.
"(h) The Uniform Customs and Practice for Documentary
Credits, as published in its most current version by the International
Chamber of Commerce, shall be deemed a part of this Section and shall
apply to all Letters of Credit to the extent permitted by applicable
Laws.
"(i) With respect to each standby Letter of Credit,
Borrower shall pay to the Bank a per annum standby letter of credit fee
in an amount equal to the Applicable Amount times the average daily
maximum amount available to be drawn on such outstanding standby Letter
of Credit, computed and payable in arrears on each Quarterly
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Payment Date, commencing December 31, 1997, through the date upon which
the outstanding Letter of Credit shall expire, with the final payment to
be made on such expiration date (provided that the minimum fee for each
standby Letter of Credit shall be $500 per annum). Borrower shall also
pay to the Bank, from time to time on demand, the Bank's standard
processing fees, costs and charges with respect to each standby Letter
of Credit. The Letter of Credit issuance fee and the standby letter of
credit fee are nonrefundable.
"(j) With respect to each commercial Letter of Credit,
Borrower shall pay to the Bank from time to time, on demand, the Bank's
normal issuance, negotiation, presentation, amendment and other
processing fees, and other standard costs and charges, relating to
commercial Letters of Credit as from time to time in effect.
"(k) As of the Closing Date, the Bank has issued for the
account of Borrower the following standby letters of credit (the
"Existing Letters of Credit"):
Letter of
Credit Number Face Amount Expiration Date
------------- ----------- ---------------
214833 $375,000 April 1, 1998
216483 $188,570.90 April 1, 1998
217917 $2,247,000 April 1, 1998
217918 $1,350,000 April 1, 1998
With respect to the Existing Letter of Credit, from and after the
Closing Date the Letter of Credit fee for the account of the Bank will
accrue and the undrawn amount thereof shall constitute Letter of Credit
Usage.
"2.4 Prepayments.
"(a) Upon Requisite Notice to the Bank not later than the
Requisite Time therefor, Borrower may at any time and from time to time
voluntarily prepay Committed Loans in the Minimum Amount therefor.
"(b) If for any reason the Outstanding Loan Obligations
exceed the Loan Commitment as in effect or as reduced or because of any
limitation set forth in this Agreement or otherwise, Borrower shall
immediately prepay Loans and/or deposit cash to be held by the Bank in
an interest-bearing cash collateral account as collateral for Letter of
Credit Usage hereunder in an aggregate amount equal to such excess.
"(c) Any prepayment of a Loan other than a Base Rate Loan
shall be accompanied by all accrued interest thereon, together with the
costs set forth in Section 3.6.
"2.5 Voluntary Reduction or Termination of Commitments. Upon
Requisite Notice to the Bank not later than the Requisite Time therefor,
Borrower shall have the right, at any time and from time to time,
without penalty or charge, to permanently and irrevocably reduce the
Commitments in a Minimum Amount therefor, or terminate the then unused
portion of the Commitments, provided, that any such reduction or
termination shall be accompanied by payment of all accrued and unpaid
commitment fees with respect to the portion of the Commitments being
reduced or terminated.
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"2.6 Principal and Interest.
"(a) If not sooner paid, Borrower shall pay, and promises
to pay, the outstanding principal amount of each Loan on the Loan
Maturity Date.
"(b) Subject to subsection (c), Borrower shall pay
interest on the unpaid principal amount of the Loans (before and after
default, before and after maturity, before and after judgment, and
before and after the commencement of any proceeding under any Debtor
Relief Law) from the date borrowed until paid in full (whether by
acceleration or otherwise) on each Interest Payment Date for each type
of Loan at a rate per annum equal to the applicable interest rate
determined in accordance with the definition thereof, plus, if
applicable, the Applicable Amount.
"(c) If any amount payable by Borrower under any Loan
Document is not paid when due (without regard to any applicable grace
periods), it shall thereafter bear interest at a fluctuating interest
rate per annum at all times equal to the Default Rate. Accrued and
unpaid interest on past due amounts including, without limitation,
interest on past due interest) shall be compounded monthly, on the last
day of each calendar month, to the fullest extent permitted by
applicable Laws and payable upon demand.
"2.7 Computation of Interest and Fees. Computation of interest
on Base Rate Loans shall be calculated on the basis of a year of 365 or
366 days, as the case may be, and the actual number of days elapsed;
computation of interest on all other types of Loans and all fees under
this Agreement shall be calculated on the basis of a year of 360 days
and the actual number of days elapsed, which results in a higher yield
to the Bank than a method based on a year of 365 or 366 days. Interest
shall accrue on each Loan for the day on which the Loan is made;
interest shall not accrue on a Loan, or any portion thereof, for the day
on which the Loan or such portion is paid. Any Loan that is repaid on
the same day on which it is made shall bear interest for one day.
Notwithstanding anything in this Agreement to the contrary, interest in
excess of the maximum amount permitted by applicable Laws shall not
accrue or be payable hereunder, and any amount paid as interest
hereunder which would otherwise be in excess of such maximum permitted
amount shall instead be treated as a payment of principal.
"2.8 Manner and Treatment of Payments Between the Bank and
Borrower.
"(a) Unless otherwise provided herein, all payments by
Borrower hereunder shall be made to the Bank not later than the
Requisite Time for such type of payment. All payments received after
such Requisite Time shall be deemed received on the next succeeding
Business Day. All payments shall be made in immediately available funds
in lawful money of the United States of America.
"(b) Upon satisfaction of any applicable terms and
conditions set forth herein, the Bank shall promptly make any amounts
payable to Borrower, by crediting the Designated Deposit Account. The
Bank's determination of any amount payable hereunder shall be conclusive
in the absence of manifest error.
"(c) Subject to the definition of "Interest Period," if
any payment to be made by Borrower or any other Borrower Party shall
come due on a day other than a Business Day, payment shall instead be
considered due on the next succeeding
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Business Day and the extension of time shall be reflected in computing
interest and fees.
"2.9 Funding Sources. Nothing in this Agreement shall be deemed
to obligate the Bank to obtain the funds for any Loan in any particular
place or manner or to constitute a representation by the Bank that it
has obtained or will obtain the funds for any Loan in any particular
place or manner.
"2.10 Extension of L/C Maturity Date. At the request of Borrower
and with the written consent of the Bank (which may be given or withheld
in the sole and absolute discretion of the Bank) pursuant to this
Section the L/C Maturity Date may be extended for one-year periods,
provided no Default or Event of Default has occurred and is continuing
at the time of such request. Not earlier than three months prior to the
each anniversary of the Closing Date, nor later than any anniversary of
the Closing Date, Borrower may request by Requisite Notice made to the
Bank a one year extension of the L/C Maturity Date. Such request shall
include a certificate signed by a Responsible Officer stating that (a)
the representations and warranties contained in Section 5 shall be true
and correct on and as of the date of such certificate and (b) no Default
or Event of Default has occurred and is continuing. The Bank shall,
within 15 Business days of its receipt of such notice, notify Borrower
whether it consents to or declines such request. If the Bank has
consented, then the L/C Maturity Date shall be extended for one year.
"Section 3
"TAXES, YIELD PROTECTION AND ILLEGALITY
"3.1 Taxes. Each payment of any amount payable by Borrower or
any other Borrower Party under this Agreement or any other Loan Document
shall be made free and clear of, and without reduction by reason of, any
Applicable Taxes. To the extent that Borrower is obligated by applicable
Laws to make any deduction or withholding on account of Applicable Taxes
from any amount payable to the Bank under this Agreement, Borrower shall
promptly notify the Bank of such fact and (a) make such deduction or
withholding and pay the same to the relevant Governmental Authority and
(b) pay such additional amount directly to the Bank as is necessary to
result in the Bank receiving a net after-Applicable Tax amount equal to
the amount to which the Bank would have been entitled under this
Agreement absent such deduction or withholding. Within 30 days after the
date of any payment by Borrower of any amounts pursuant to this section,
Borrower shall furnish to the Bank the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment
satisfactory to the Bank.
"3.2 Increased Costs. If the Bank determines that any Laws or
guidelines (whether or not having the force of law), or compliance
therewith, have the effect of increasing its cost of agreeing to make or
making, to issue or participating in, funding or maintaining any Loans
or Letters of Credit, then Borrower shall, upon demand by the Bank, pay
to the Bank additional amounts sufficient to compensate the Bank for
such increased cost.
"3.3 Capital Adequacy. If the Bank determines that any Laws
regarding capital adequacy, or compliance by the Bank (or its Lending
Office) or any corporation controlling the Bank, with any request,
guideline or directive regarding capital adequacy (whether or not having
the force of law) of any Governmental Authority not imposed as a result
of the Bank's or such corporation's failure to comply with any other
Laws, affects or would affect the amount of capital required or expected
to be maintained by the Bank
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or any corporation controlling the Bank or the Issuing Bank and (taking
into consideration the Bank's or such corporation's policies with
respect to capital adequacy and the Bank's desired return on capital)
determines in good faith that the amount of such capital is increased,
or the rate of return on capital is reduced, as a consequence of its
obligations under this Agreement, then upon demand of the Bank, Borrower
shall pay to the Bank, from time to time as specified in good faith by
the Bank, additional amounts sufficient to compensate the Bank in light
of such circumstances, to the extent reasonably allocable to such
obligations under this Agreement.
"3.4 Illegality. If the Bank determines that any Laws has made
it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for the Bank or its applicable Lending Office to make,
maintain or fund Offshore Rate Loans, or materially restricts the
authority of the Bank to purchase or sell, or to take deposits of,
Dollars in the Offshore Rate Designated Market, or to determine or
charge interest rates based upon the Offshore Rate, then, on notice
thereof by the Bank to Borrower, any obligation of the Bank to make
Offshore Rate Loans shall be suspended until the Bank notifies the
Borrower that the circumstances giving rise to such determination no
longer exist. Upon receipt of such notice, Borrower shall, upon demand
from the Bank, prepay or Convert all Offshore Rate Loans, either on the
last day of the Interest Period thereof, if the Bank may lawfully
continue to maintain such Offshore Rate Loans to such day, or
immediately, if the Bank may not lawfully continue to maintain such
Offshore Rate Loan. The Bank agrees to designate a different Lending
Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of the Bank, otherwise be materially
disadvantageous to the Bank.
"3.5 Inability to Determine Rates. If, in connection with any
Request for Extension of Credit, the Bank determines that (a) Dollar
deposits are not being offered to the Bank in the Offshore Rate
Designated Market for the applicable amount and Interest Period of the
requested Loan, (b) adequate and reasonable means do not exist for
determining the underlying interest rate (other than the Base Rate) for
the Loans requested therein, or (c) such underlying interest rates do
not adequately and fairly reflect the cost to the Bank of funding the
Loan, the Bank will promptly so notify Borrower. Thereafter, the
obligation of the Bank to make or maintain Loans based upon such
affected interest rate shall be suspended until the Bank revokes such
notice. Upon receipt of such notice, Borrower may revoke any pending
Request for Extension of Credit for such type of Loan or, failing that,
be deemed to have converted such Request for Extension of Credit into a
request for Base Rate Loans in the amount specified in therein.
"3.6 Breakfunding Costs. Upon Continuation, Conversion, payment
or prepayment of any Loan other than a Base Rate Loan on a day other
than the last day in the applicable Interest Period (whether voluntary,
mandatory, automatic, by reason of acceleration, or otherwise and
including any such action required under this Section 3), or upon the
failure of Borrower (for a reason other than the failure of the Bank to
make a Loan) to borrow, Continue or Convert any Loan other than a Base
Rate Loan on the date or in the amount specified in any Request for
Extension of Credit, then Borrower shall, upon demand made by the Bank,
reimburse the Bank and hold the Bank harmless from any loss or expense
which the Bank may sustain or incur as a consequence thereof, including
any such loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to
terminate the deposits from which such funds were obtained.
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"3.7 Matters Applicable to all Requests for Compensation.
"(a) The Bank shall provide reasonable detail to Borrower
regarding the manner in which the amount of any payment to the Bank
under this Section 3 has been determined, concurrently with demand for
such payment. The Bank's determination of any amount payable under this
Section 3 shall be conclusive in the absence of manifest error.
"(b) For purposes of calculating amounts payable under
this Section 3 any Loan shall be deemed to have been funded at the
applicable interest rate set forth in the definition thereof whether or
not such Loan was, in fact, so funded.
"(c) All of Borrower's obligations under this Section 3
shall survive termination of the Commitments and payment in full of all
Outstanding Obligations."
2.9 The form of Request for Extension of credit attached hereto
as Exhibit D is added to the Agreement as Exhibit D thereto.
2.10 Schedule 5.16 attached to the Agreement is amended to read
as set forth on Schedule 5.16 attached hereto.
3. Representations and Warranties. Borrower represents and warrants to
the Bank that: (a) there is no event which is, or with notice or lapse of time
or both would be, a default under the Agreement, (b) the representations and
warranties in the Agreement are true as of the date of this Amendment as if made
on the date of this Amendment, except with respect to the Schedule 5.16, a
revised copy of which is attached to this Amendment, (c) this Amendment is
within Borrower's powers, has been duly authorized, and does not conflict with
any of Borrower's organizational papers, and (d) this Amendment does not
conflict with any law, agreement, or obligation by which Borrower is bound.
4. Conditions. This Amendment will be effective when the Bank receives
the following items, in form and content acceptable to the Bank:
4.1 A duly executed counterpart of this Amendment signed by
Borrower and the Bank.
4.2 A copy of resolutions adopted by Borrower's board of
directors authorizing the obligations to be incurred by Borrower under the
Agreement, as modified by this Amendment, duly certified by a Responsible
Officer of Borrower.
4.3 A reaffirmation of the Master Subsidiary Guaranty, executed
by each guarantor thereunder.
4.4 A copy of resolutions adopted by the board of directors of
each guarantor under the Master Subsidiary Guaranty authorizing the obligations
thereunder as increased under the terms of this Amendment, duly certified by a
Responsible Officer of each such guarantor.
5. Effect of Amendment. Except as provided in this Amendment, all of the
terms and conditions of the Agreement shall remain in full force and effect.
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6. Counterparts. This Amendment may be executed in as many counterparts
as necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original but
all such counterparts shall constitute but one and the same agreement.
This Amendment is executed as of the date first above written.
RELIANCE STEEL & ALUMINUM CO., a
California corporation
By:________________________________
Title:_______________________________
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:________________________________
Xxxxxx X. Xxxxxx
Title: Vice President
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EXHIBIT D
REQUEST FOR EXTENSION OF CREDIT
Date:____________
To: Bank of America National Trust
and Savings Association
Ladies and Gentlemen:
Reference is being made to that certain Credit Agreement dated as of
October 22, 1997, between Reliance Steel & Aluminum Co., a California
corporation (the "Borrower") and Bank of America National Trust and Savings
Association (as extended, renewed, amended or restated from time to time, the
"Agreement;" the terms defined therein being used herein as therein defined).
The undersigned hereby requests (select one):
____ A Borrowing of Loans
____ A Conversion or Continuation of Loans
1. On ____________________, ______
2. In the amount of $_____________
3. Comprised of ______________________________________________________
[type of Loan requested and, if an Offshore Rate Loan,
whether the Offshore Rate Designated Market is to be
the London eurodollar market or the Cayman Islands
offshore Dollar interbank market]
4. If applicable: with an Interest Period of ____ months/days.
The foregoing request complies with the requirements of Section 2.1 of the
Agreement. The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the above date, before and after
giving effect and to the application of the proceeds therefrom:
(a) the representations and warranties of Borrower contained in
Section 5 of the Agreement are true and correct in all material respects as
though made on and as of the above date (except to the extent such
representations and warranties expressly refer to an earlier date, in which
case they are true and correct as of such earlier date); and
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(b) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Extension of Credit.
RELIANCE STEEL & ALUMINUM CO.
By:
---------------------------
Title:
------------------------
2
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REAFFIRMATION OF MASTER SUBSIDIARY GUARANTY
Each of the undersigned (individually a "Guarantor" and, collectively,
"Guarantors") hereby unconditionally reaffirms all of its obligations under
that certain Master Subsidiary Guaranty dated October 22, 1997 (the
"Guaranty"), executed by the undersigned in favor of Bank of America National
Trust and Savings Association ("Bank"), pursuant to which Guarantors guaranteed
all of the obligations of Reliance Steel & Aluminum Co. ("Borrower") owing to
Bank under that certain Credit Agreement dated October 22, 1997, as amended
from time to time, including without limitation that certain Amendment No. Two
to Credit Agreement dated as of September 8, 1998, under which, among other
things, the total amount of loan and letter of credit commitments were
increased to $35,000,000. Each Guarantor further acknowledges and agrees that
the Guaranty is in full force and effect, remains valid and binding against each
Guarantor, and is enforceable against each Guarantor in accordance with its
terms.
Dated: _____________________
CCC STEEL, INC., SISKIN STEEL & SUPPLY
COMPANY, INC., SERVICE STEEL AEROSPACE
CORP., VALEX CORP., AMI METALS, INC.,
GEORGIA STEEL SUPPLY COMPANY, PHOENIX
CORPORATION, XXXXXXX XXXXXXXX STEEL
CO., INC., AND CHATHAM STEEL CORPORATION
By: _______________________
Xxxxxx X. Xxxx
Title: Vice President of CCC Steel Inc., Siskin
Steel & Supply Company, Inc., Phoenix
Corporation, Xxxxxxx Xxxxxxxx Steel Co.,
Inc. and Chatham Steel Corporation and
Chief Financial Officer of Service Steel
Aerospace Corp., Valex Corp., AMI Metals,
Inc., and Georgia Steel Supply Company
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SCHEDULE 5.16
SUBSIDIARIES
# OF SHARES
JURISDICTION FORM OF # OF SHARES OWNED AND
NAME OF ORGANIZATION LEGAL ENTITY OUTSTANDING BY WHOM
---- --------------- ------------ ----------- -----------
AMI Metals, Inc. TN Corporation 1,400 1,400
by Borrower
CCC Steel, Inc. DL Corporation 3,625.8 3,625.8
by Borrower
MetalCenter, Inc. CA Corporation 2,965,812 2,965,812
Service Steel DL Corporation 100 100
Aerospace Corp. by Borrower
Siskin Steel & TN Corporation 88,000 88,800
Supply voting common by Borrower
Company, Inc.
3,691,116 3,691,116
non-voting by Borrower
common
Valex Corp. CA Corporation 187,500 (a) 3,000
by Xxx Xxxxxx
(b) 184,500
by Borrower
Georgia Steel GA Corporation 16,000 16,000
Supply Company Class A Class A
500 500
Class B Class B
64,000 64,000
Class C Class C
by Siskin Steel &
Supply
Company, Inc.
Xxxxxxx Xxxxxxxx CA Corporation 100 100
Steel Co., Inc. by Borrower
Phoenix GA Corporation 6,229 6,229
Corporation by Borrower
