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Exhibit 10.6
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Agreement")
is dated as of February 29, 2000, among the financial institutions listed on the
signature pages hereof (such financial institutions, together with their
respective successors and assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders"), BANK OF AMERICA, NATIONAL
ASSOCIATION, a national banking association ("Bank of America") with an office
at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, as a Lender and as agent
for the Lenders (in its capacity as agent, the "Agent"), and WEIRTON STEEL
CORPORATION, a Delaware corporation, with offices at 000 Xxxxx Xxxxxxx Xxxxx,
Xxxxxxx, Xxxx Xxxxxxxx 00000-0000 (the "Borrower").
RECITALS
A. The Borrower, the Agent, and the Lenders are parties to a Loan and
Security Agreement dated as of October 29, 1999 (as amended, restated, modified,
substituted, extended, and renewed from time to time, the "Financing
Agreement"). The Financing Agreement provides for some of the agreements between
the Borrower, the Agent and the Lenders in respect of the "Loans" (as defined in
the Financing Agreement), consisting of advances under a Revolving Line of
Credit Facility of up to $100,000,000.
B. The parties wish to amend certain provisions of the Financing
Agreement to reflect the parties' respective agreements.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrower,
the Agent and the Lenders agree as follows:
1. The Borrower, the Agent and the Lenders agree that the Recitals
above are a part of this Agreement. Unless otherwise expressly defined in this
Agreement, terms defined in the Financing Agreement shall have the same meaning
under this Agreement.
2. The Borrower represents and warrants to the Lender as follows:
(a) The Borrower (a) is duly incorporated and organized and
validly existing in good standing under the laws of the state of its
incorporation, (b) is qualified to do business as a foreign corporation and is
in good standing in the jurisdictions set forth on Schedule 8.3 as of the
Closing Date, which are the only jurisdictions in which qualification is
necessary in order for it to own or lease its property and conduct its business,
except for those jurisdictions where failure to do so shall not have a Material
Adverse Effect, and (c) has all requisite power and authority to conduct its
business and to own its property.
(b) The Borrower has the corporate power and authority to
execute, deliver and perform this Agreement and the other Loan Documents, to
incur the Obligations, and to grant to
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the Agent Lens upon and security interests in the Collateral. The Borrower has
taken all necessary corporate action (including without limitation, obtaining
approval of its stockholders if necessary) to authorize its execution, delivery,
and performance of this Agreement and the other Loan Documents to which it is a
party. This Agreement and the other Loan Documents have been duly executed and
delivered by the Borrower, and constitute the legal, valid and binding
obligations of the Borrower, enforceable against it in accordance with their
respective terms. The Borrower's execution, delivery, and performance of this
Agreement and the other Loan Documents do not and will not conflict with, or
constitute a violation or breach of, or constitute a default under, or result in
the creation or imposition of any Lien upon the property of the Borrower or any
of its Subsidiaries, by reason of the terms of (a) any contract, mortgage, Lien,
lease, agreement, indenture, or instrument to which the Borrower is a party or
which is binding upon it, (b) any Requirement of Law applicable to the Borrower
or any of its Subsidiaries, or (c) the certificate or articles of incorporation
or by-laws of the Borrower or any of its Subsidiaries.
(c) The Financing Agreement, as amended by this Agreement, and
each of the other Financing Documents remains in full force and effect, and each
constitutes the valid and legally binding obligation of the Borrower,
enforceable in accordance with its terms without defense, setoff or counterclaim
except as such enforceability may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and except as such
enforceability may be limited by principles of equity generally, whether a suit
is brought at law or in equity.
(d) All of the Borrower's representations and warranties
contained in the Financing Agreement and the other Financing Documents are true
and correct on and as of the date of the Borrower's execution of this Agreement.
(e) No Event of Default and no event which, with notice, lapse
of time or both would constitute an Event of Default, has occurred and is
continuing under the Financing Agreement or the other Financing Documents.
3. In Section 1.1, the definition of "Eligible Inventory" is hereby
amended to read as follows:
"Eligible Inventory" means Inventory, valued at the lower of
cost (on a first-in first-out basis) or market, that constitutes raw
materials, work-in-process and first quality finished goods and that,
unless the Agent otherwise elects: (a) is not, in the Agent's
reasonable opinion, obsolete, slow moving, or unmerchantable; (b) is
located at premises owned by the Borrower or on premises otherwise
reasonably acceptable to the Agent, provided, however, that Inventory
located on premises leased to the Borrower shall not be Eligible
Inventory unless the Borrower shall have delivered to the Agent a
written waiver, duly executed on behalf of the appropriate landlord and
in the form attached to this Agreement as EXHIBIT G or otherwise in
form and substance acceptable to the Agent, of all Liens which the
landlord for such premises may be entitled to assert against such
Inventory, and provided, further, that Inventory that is the subject of
merchandise Letters of Credit and in transit will be considered by the
Agent for inclusion among the Eligible Inventory if the Agent is
reasonably satisfied that all documents of title necessary to secured
possession of the subject Inventory upon
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delivery and upon payment under the applicable Letter of Credit are in
the possession and control of the Agent; (c) upon which the Agent for
the benefit of the Lenders has a first priority perfected security
interest; (d) is not spare parts, packaging and shipping materials,
supplies, xxxx-and-hold Inventory, returned or defective Inventory, or
Inventory delivered to the Borrower on consignment; and (e) the Agent,
in the exercise of its reasonable commercial discretion, deems eligible
as the basis for revolving loans based on such collateral and credit
criteria as the Agent may from time to time establish. If any Inventory
at any time ceases to be Eligible Inventory, such Inventory shall
promptly be excluded from the calculation of Eligible Inventory. By way
of clarification, and not limitation, of the foregoing, Eligible
Inventory, and the value thereof, shall not include standard costing
reserves on raw materials, work-in-process and finished goods;
supplies; inventory over one (1) year old; non-consumable by-products;
estimated values of fuel oil and gas; and outside storage reserves
equal to 1 month of outside storage costs.
4. Section 2.2(a) of the Financing Agreement is hereby amended in its
entirety as follows:
(a) Subject to the satisfaction of the conditions precedent
set forth in ARTICLE X (Conditions of Lending), each Lender severally
agrees, upon the Borrower's request from time to time on any Business
Day during the period from the Closing Date to the Termination Date, to
make revolving loans (the "Revolving Loans") to the Borrower, in
amounts not to exceed (except for Bank of America with respect to
Non-Ratable Loans and except for the Agent with respect to Agent
Advances) such Lender's Pro Rata Share of the least of (x) the
Borrower's Availability and (y) the Maximum Revolver Amount minus the
Aggregate Revolver Outstandings and (z) fifty percent (50%) of value of
the Inventory of the Borrower as reflected on the consolidated
financial statements of the Borrower minus the Aggregate Revolver
Outstandings. The Lenders, however, in their discretion, may elect to
make Revolving Loans or participate (as provided for in Section 2.3(f)
(Participations)) in the Letters of Credit in excess of the
Availability on one or more occasions, but if they do so, neither the
Agent nor the Lenders shall be deemed thereby to have changed the
limits of the Maximum Revolver Amount or the Availability or to be
obligated to exceed such limits on any other occasion. If Availability
is zero ($0) or less (or would be zero ($0) or less after giving effect
to Pending Revolving Loans), the Lenders may refuse to make or
otherwise restrict the making of Revolving Loans as the Lenders
determine until such deficiency has been eliminated, subject to the
Agent's authority, in its sole discretion, to make Agent Advances
pursuant to the terms of Section 2.2(i) (Agent Advances). Any amount by
which the Aggregate Revolver Outstandings exceed (x) the Borrower's
Availability or (y) the Maximum Revolver Amount or (z) fifty percent
(50%) of value of the Inventory of the Borrower as reflected on the
consolidated financial statements of the Borrower shall be due and
payable on demand by the Agent in the exercise of its sole and absolute
discretion from time to time or at the direction of the Majority
Lenders.
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5. The proviso at the end of Section 2.2(g)(i) of the Loan Agreement is
hereby amended to read as follows:
...provided, however, that the amount of Revolving Loans so made on any
date shall in no event exceed the Availability on such date or cause
the Aggregate Revolver Outstandings to exceed the lesser of the Maximum
Revolver Amount or fifty percent (50%) of value of the Inventory of the
Borrower as reflected on the consolidated financial statements of the
Borrower.
6. Section 2.2(h)(i) of the Loan Agreement is hereby amended to read as
follows:
(i) In the event the Agent shall elect,
with the consent of Bank of America, to have the terms of this
subsection Section 2.2(h) apply to a requested Borrowing as described
in Section 2.2(f), Bank of America shall make a Revolving Loan in the
amount of such Borrowing (any such Revolving Loan made solely by Bank
of America pursuant to this subsection (i) being referred to as a
"Non-Ratable Loan" and such Revolving Loans being referred to
collectively as "Non-Ratable Loans") available to the Borrower on the
Funding Date applicable thereto by transferring same day funds to an
account of the Borrower, designated in writing by the Borrower and
acceptable to the Agent. Each Non-Ratable Loan is a Revolving Loan
hereunder and shall be subject to all the terms and conditions
applicable to other Revolving Loans except that all payments thereon
shall be payable to Bank of America solely for its own account (and for
the account of the holder of any participation interest with respect to
such Revolving Loan). The Agent shall not request Bank of America to
make any Non-Ratable Loan if (A) the Agent shall have received written
notice from any Lender that one or more of the applicable conditions
precedent set forth in ARTICLE X will not be satisfied on the requested
Funding Date for the applicable Borrowing, or (B) the requested
Borrowing would exceed the Availability on such Funding Date or cause
the Aggregate Revolver Outstandings to exceed the lesser of the Maximum
Revolver Amount or fifty percent (50%) of value of the Inventory of the
Borrower as reflected on the consolidated financial statements of the
Borrower. Bank of America shall not otherwise be required to determine
whether the applicable conditions precedent set forth in ARTICLE X have
been satisfied or the requested Borrowing would exceed the Availability
or cause the Aggregate Revolver Outstandings to exceed the lesser of
the Maximum Revolver Amount or fifty percent (50%) of value of the
Inventory of the Borrower as reflected on the consolidated financial
statements of the Borrower on the Funding Date applicable thereto prior
to making, in its sole discretion, any Non-Ratable Loan.
7. Clause (C) of Section 2.2(i)(i) of the Loan Agreement is hereby
amended to read as follows:
...(C) the Aggregate Revolver Outstandings would exceed the lesser of
the Maximum Revolver Amount or fifty percent (50%) of value of the
Inventory of
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the Borrower as reflected on the consolidated financial statements of
the Borrower
8. Section 10.2(b) of the Loan Agreement is hereby amended to read as
follows:
(b) Availability. Without implying any limitation on the
provisions of Section 9.12 (Minimum Availability), the amount of the
Availability shall be sufficient to make such Revolving Loan without
exceeding the Availability and the amount of such Revolving Loan shall
not cause the Aggregate Revolver Outstandings to exceed the lesser of
the Maximum Revolver Amount or fifty percent (50%) of value of the
Inventory of the Borrower as reflected on the consolidated financial
statements of the Borrower, provided, however, that the foregoing
conditions precedent are not conditions to each Lender participating in
or reimbursing Bank of America for such Lenders' Pro Rata Share of any
Non-Ratable Loan Advance as provided in Section 2.2(h) (Making of
Non-Ratable Loans) or the Agent for such Lenders' Pro Rata Share of any
Agent Advance as provided in Section 2.2(i) (Agent Advances) and
provided further, that the Agent shall be entitled to rely on the
Borrower's Borrowing Base Certificate in determining whether such
conditions have been met.
9. Clause (i) of Section 13.3 of the Loan Agreement is hereby amended
to read as follows:
(i) increase the Maximum Revolver Amount and Unused
Letter of Credit Subfacility or allow the Aggregate Revolver
Outstandings to exceed fifty percent (50%) of value of the Inventory
of the Borrower as reflected on the consolidated financial statements
of the Borrower;
10. The Borrower hereby issues, ratifies and confirms the
representations, warranties and covenants contained in the Financing Agreement,
as amended hereby, including, without limitation, the security interests,
collateral assignments and mortgages and other Liens granted therein. The
Borrower agrees that this Agreement is not intended to and shall not cause a
novation with respect to any or all of the Obligations.
11. The Borrower shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Agent and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of the Agent's
counsel and all recording fees, taxes and charges.
12. This Agreement may be executed in any number of duplicate originals
or counterparts, each of such duplicate originals or counterparts shall be
deemed to be an original and taken together shall constitute but one and the
same instrument. The parties agree that their respective signatures may be
delivered by facsimile. Any party who chooses to deliver its signature by
facsimile agrees to provide a counterpart of this Agreement with its inked
signature promptly to each other party.
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Signature Page to
First Amendment to
Loan and Security Agreement
dated February 29, 1999
IN WITNESS WHEREOF, the Borrower, the Agent, and the Lenders have
executed this Agreement under seal as of the date and year first written above.
"BORROWER"
WEIRTON STEEL CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
"AGENT"
Bank of America, National Association, as
the Agent
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President
"LENDERS"
Commitment: $100,000,000 Bank of America, National Association, as a
Lender
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President
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