KENTUCKY EL ECTRIC STEEL, INC.
___________ ______________________________
FIRST AMEND MENT AGREEMENT
___________ ______________________________
January 30, 1997
To the Noteholders
Whose Names are set forth on
the Signature Pages hereto:
Ladies and Gentlemen:
Reference is made to those certain Note Agreements dated
as of November 1, 1995 (the Note Agreement ) between the undersigned
Kentucky Electric Steel, Inc. (the Company ) and the respective purchasers
of $20,000,000 in the aggregate principal amount of the Company s 7.66%
Senior Notes due November 1, 2005 (the Notes ). The Company has requested
the Noteholders named on the signature pages attached hereto (the
Noteholders ) to agree to an amendment to the Note Agreement; and the
Noteholders have agreed to such amendment on the terms and conditions
hereinafter set forth. (Unless otherwise expressly provided herein,
capitalized terms used herein shall have the same respective meanings as
were assigned to each under the Note Agreement).
In consideration of the foregoing and of the mutual
covenants hereinafter set forth, the Company and the Noteholders agree as
follows:
1. Section 5.7 of the Note Agreement is amended to read in
its entirety as follows:
5.7 Consolidated Adjusted Net Worth. (i) At all times
prior to the earlier of December 26, 1998 and the date on which the
ratio of Consolidated Cash Flow Available for Fixed Charges to Fixed
Charges for the immediately preceding period of four consecutive
fiscal quarters, calculated at the end of such fiscal quarter, is
greater than or equal to 2.0 to 1.0, the Company will keep and
maintain Consolidated Adjusted Net Worth at an amount not less than
$30,000,000; and (ii) at all other times, the Company will keep and
maintain Consolidated Adjusted Net Worth at an amount not less than
$25,000,000.
2. Section 5.9 of the Note Agreement is amended to read in
in its entirety as follows:
5.9 Fixed Charges Coverage Ratio. The Company will keep
and maintain the ratio of its Consolidated Cash Flow Available for
Fixed Charges to Fixed Charges at:
(i) not less than the amounts shown below for each period of
eight consecutive fiscal quarters, calculated as of the end
of each fiscal quarter shown below:
Fiscal Quarter End Ratio
December 28, 1996 2.0 to 1.0
March 29, 1997 1.5 to 1.0
June 28, 1997 1.2 to 1.0
September 27, 1997 1.0 to 1.0
December 27, 1997 1.0 to 1.0
March 29, 1998 1.0 to 1.0
June 27, 1998 1.0 to 1.0
September 26, 1998 1.2 to 1.0
(ii) not less than 2.0 to 1.0 for each period of four consecutive
fiscal quarters thereafter, calculated as of the end of each
such fiscal quarter.
3. Section 6.1(e) of the Note Agreement is amended to read in
its entirety as follows:
(e) (i) At all times prior to the earlier of
December 26, 1998 and the date on which the ratio of
Consolidated Cash Flow Available for Fixed Charges to Fixed
Charges for the immediately preceding period of four consecutive
fiscal quarters, calculated at the end of such fiscal quarter,
is greater than or equal to 2.0 to 1.0, default or the happening
of an event shall occur under any indenture, agreement or other
instrument under which any Debt in an aggregate principal amount
of $2,000,000 or more of the Company or any Subsidiary may be
issued, and, as a consequence of such default or event, such
Debt has become, or has been declared, or one or more Persons
are entitled to declare such Debt to be, due and payable before
its stated maturity or before its regularly scheduled dates of
payment; and (ii) at all other times, default or the happening
of any event shall occur under any indenture, agreement or other
instrument under which any Debt in an aggregate principal amount
of $2,000,000 or more of the Company or any Subsidiary may be
issued and such default or event shall result in the
acceleration of the maturity of any Debt of the Company or any
Subsidiary outstanding thereunder; or
4. The modifications set forth herein shall be effective as of
December 28, 1996 when holders of 66 2/3% in aggregate principal
amount of outstanding Notes shall have signed and returned to
the Company a copy of this First Amendment Agreement.
5. Except as specifically modified hereby, the Note Agreement
shall remain in full force and effect in accordance with the terms
thereof.
6. Each reference in the Note Agreement to the Note
Agreement, the Agreement, this Agreement, herein, hereof, or
other words of like import referring to the Note Agreement shall mean
the Note Agreement as amended by this First Amendment.
KENTUCKY ELECTRIC STEEL, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Agreed and Accepted:
Noteholders:
CONNECTICUT GENERAL
LIFE INSURANCE COMPANY
By: CIGNA Investments, Inc.
By: /s/ Xxxxxxx X. XxXxxxxx
Name: Xxxxxxx X. XxXxxxxx
Title: Managing Director
CONNECTICUT GENERAL
LIFE INSURANCE COMPANY, on behalf of
one or more separate accounts
By: CIGNA Investments, Inc.
By: /s/ Xxxxxxx X. XxXxxxxx
Name: Xxxxxxx X. XxXxxxxx
Title: Managing Director
MODERN WOODMEN OF AMERICA
By: /s/ Xxxx X. Coin
Name: Xxxx X. Coin
Title: Supervisor, Securities Division
