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THIRD AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIS THIRD AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this "Agreement"),
dated as of June 30, 1999, by and among IRON DYNAMICS, INC., an Indiana
corporation (the "Borrower") , the lenders listed on the signature pages hereof
and MELLON BANK, N.A., a national banking association, as agent for the Lenders
under the Credit agreement referred to below ( the "Agent").
RECITALS:
WHEREAS the Borrower, certain lenders, the Agent and Mellon Bank, N.A., as
Issuing Bank, entered into a Credit Agreement, dated as of December 31, 1997, as
amended by the Amendment and Waiver, dated as of June 10, 1998 and by the Second
Amendment to Credit Agreement, dated as of March 15, 1999 (as so amended, the
"Credit Agreement"), pursuant to which the Lenders have agreed to extend credit
to the Borrower;
WHEREAS, the Borrower has requested the Lenders to effect certain
amendments and waivers to the Credit Agreement and the Required Lenders are
willing to do so to the extent provided herein;
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings assigned thereto in the Credit Agreement.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby agree as follows:
Section 1. Amendments to Credit Agreement.
(a) Section 6.03 (h) of the Credit Agreement is hereby amended by (i) changing
the words "Unsecured Indebtedness of the Borrower to SDI in an aggregate
principal amount not exceeding $10,000,000 at any time outstanding", which
appears at the beginning thereof, to read "Unsecured Indebtedness of the
Borrower to SDI in an aggregate principal amount not exceeding $25,000,000
at any time outstanding" and (ii) adding at the end thereof the following:
Such documentation, in the form of each of Exhibits FF and GG
hereto, shall provide that the subordinated promissory note
evidencing such Indebtedness and the rights of SDI thereunder
shall not be sold or transferred by SDI without the prior written
consent of the required Lenders except to (i) the Lenders and/or
the Agent, as provided in the SDI Subordination Agreement and
(ii) the lenders and/or the agents party to the Credit Agreement
(Amended and Restated) dated as of June 30, 1994 and amended and
restated as of June 30, 1997, entered into by SDI, the Lenders
party thereto from time to time, Mellon Bank, N.A., as agent and
as issuing bank, and certain co-agents named therein.
(b) Exhibit FF (Subordinated Promissory Note) to the Credit Agreement is hereby
amended by substituting therefore Exhibit FF (consisting of a form of
subordinated promissory note and a form of letter agreement from SDI with
respect thereto) attached hereto.
(c) For the purpose of extending the deadline for achieving the Preliminary
Acceptance Date, the date "June 30, 1999" appearing in each of the
following Sections of the Credit Agreement is hereby changed to "March 31,
2000":
Section 3.26, titled "Project Compliance With Laws; Permits"
Section 5.01 (j) (viii), titled "Notice of Certain Events"
Section 5.14, titled "Construction of the Project"
Section 6.19, titled "Change Orders"
Section 7.01 (q) and 7.01 (v), titled "Events of Default"
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(d) For the purpose of extending the deadline for achieving the Final
Acceptance Date, the date "March 31, 2000" appearing in each of the
following Sections of the Credit Agreement is hereby changed to "December
31, 2000"
Section 5.01 (j) (viii), titled "Notice of Certain Events"
Section 5.14, titled "Construction of the Project"
Section 6.19, titled "Change Orders"
Section 7.01 (q) and 7.01 (v), titled "Events of Default"
(e) The date "December 31, 2000" appearing in Section 5.14 of the Credit
Agreement is hereby changed to "September 30, 2001".
(f) Section 6.01 (c) of the Credit Agreement is hereby amended to read in its
entirety as follows:
(c) Negative EBITDA. During the period from January 1, 1998
through December 31, 2000 cumulative negative EBITDA of the
Borrower at the end of any fiscal quarter shall not exceed the
sum of (i) $7,000,000 and (ii) an amount, not to exceed
$8,000,000, which is equal to the amount by which the aggregate
principal amount of unsecured Indebtedness of the Borrower to SDI
outstanding at the end of such quarter (or, in the case of the
quarter ending June 30, 1999, outstanding on July 31, 1999) as a
result of advances by SDI in accordance with Section 6.03 (h)
hereof exceeds $10,000,000; provided, that if, on any date in any
fiscal quarter commencing with the fiscal quarter in which the
Preliminary Acceptance Date occurs, the amount of unsecured
Indebtedness to SDI outstanding in accordance with Section 6.03
(h) hereof is less than $25,000,000, the maximum amount of
cumulative negative EBITDA (the EBITDA Cap") permitted by the
preceding terms of this Section 6.01 (c) at the end of such
quarter will be reduced by an amount equal to (A) the difference
between $25,000,000 and the principal amount of such unsecured
Indebtedness to SDI outstanding at the end of such quarter minus
amounts by which the EBITDA Cap previously has been so reduced
under this proviso divided by (B) four minus the number of fiscal
quarters in which the EBITDA Cap previously has been so reduced.
In the event that the amount of such unsecured Indebtedness to
SDI increases subsequent to one or more such reductions to the
EBITDA Cap, the amount of such increase shall be restored to the
EBITDA Cap on a one-for-one basis up to the amount of such
previous reductions. In no event shall the EBITSA Cap be reduced
below $7,000,000.
(g) Section 6.01 (d) if the Credit Agreement is hereby amended to read in its
entirety as follows:
(d) Funded Indebtedness to EBITDA. The ratio of (x) Funded
Indebtedness minus the amount of funded Indebtedness of the
Borrower to SDI outstanding in accordance with Section 6.03 (h)
hereof, minus the amount on deposit in the Debt Service Reserve
Account to (y) EBITDA for each Measurement Period ending in the
calendar years 1999 or 2000 shall be not greater than 4.0 to 0 on
the last day of each such Measurement Period and for each
Measurement Period ending after the calendar year 2000, shall be
not greater than 4.0 to 1 on the last day of each such
Measurement Period.
(h) The definition of "EBITDA" appearing in Section 1.01 of the Credit
Agreement is hereby amended by adding thereto, prior to the words "all as
determined in accordance with GAAP", the following:
Plus (j) the amount of insurance deductibles paid, to the extent
included in determining such Net Income, and minus (k) insurance
proceeds received to the extent included (and not offset by a
corresponding loss) in determining such Net Income,
(i) Section 1.01 of the Credit Agreement is hereby amended by amending the
definitions of "Financial Covenant Date" and "Measurement Period" appearing
therein to read, in each case in its entirety, as follows:
"Financial Covenant Date" shall mean the earlier of (a) the last
day of the first fiscal quarter after the Final Acceptance Date
and (b) March 31, 2001.
"Measurement Period" (i) for purposes of Section 6.01 shall have
meaning set forth in Section 6.01 (b) and (ii) for all other
purposes shall mean a period of four consecutive calendar
quarters.
(j) Section 9.14 of the Credit Agreement is hereby amended by adding thereto a
new Subsection 9.14 (f) to read in its entirety as follows:
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(f) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender") may grant to a special
purpose funding vehicle (an "SPC") the option to fund all or
part of any Loan that such Granting Lender would otherwise
be obligated to fund pursuant to this Agreement: provided
that (i) nothing herein shall constitute a commitment by any
SPC to fund any Loan, and (ii) if an SPC elects not to
exercise such option or otherwise fails to fund any part of
such Loan, the Granting Lender shall be obligated to fund
such Loan pursuant to the terms hereof. The funding of a
Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan
were funded by the Granting Lender. Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or
payment under this agreement for which a Lender would
otherwise be liable for so long as, and to the extent, the
Granting Lender provides such indemnity or makes such
payment. This Section 9.14 (f) may not be amended without
the prior written consent of each Granting Lender, all or
any part of whose Loans is being funded by an SPC at the
time of such amendment.
(k) Article III of the Credit Agreement is hereby amended by adding thereto a
new Section 3.33 to read in its entirety as follows, and by its execution
hereof the Borrower hereby represents and warrants as follows:
3.33. Year 2000. The Borrower has reviewed the areas within its
business and operations which could be adversely affected
by, and has developed or is developing a program to address
on a timely basis, the "Year 2000 Problem" (that is, the
risk that computer applications used by the Borrower may be
unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date on
or after December 31, 1999), and have made related
appropriate inquiry of material suppliers and vendors. Based
on such review, program and inquiry, the Borrower believes
that the "Year 2000 Problem" will not have a Material
Adverse Effect on the Borrower. From time to time, at the
request of the Agent the Borrower shall provide to the Agent
such updated information or documentation as is requested
regarding the status of Borrower's efforts to address the
"Year 2000 Problem".
Section 2. Consent to Amendment of Subordinated Promissory Note. The Agent
and the Required Lenders hereby consent to the amendment, in the manner
described in Sections 1 (a) and 1 (b) if this Agreement, of the
Subordinated Promissory Note (the "Subordinated Promissory Note") dated as
of March 15, 1999 from the Borrower to SDI and the attachment thereof to
the Subordination Agreement (the "SDI Subordination Agreement"), dated as
of March 15, 1999, made by the Borrower and SDI in favor of the Lenders and
the Agent.
Section 3. Waiver With Respect to Mechanics Lien. The Required Lenders
hereby waive any Event of Default and any Potential Default which may have
arisen pursuant to Section 7.01 (j) of the Credit Agreement as a result of
the recording on November 19, 1998 in the office of the Recorder DeKalb
County, Indiana, of a Notice of Intention to Hold Mechanics Lien by Xxxx
Contracting Company, Inc. (such lien, the "Xxxx Mechanics Lien"), provided,
that, as of and after July 15, 1999, such waiver shall terminate and have
no further effect if on such date the Agent shall not have received a copy
of a surety bond providing for the payment of all obligations (up to
$1,500,000) relating to such Xxxx Mechanics Lien and a stipulation and
order providing for release of the real estate and improvements of the
Borrower and SDI from the Xxxx Mechanics Lien, together with evidence that
each thereof has been duly recorded, and in each case in form and substance
satisfactory to the Agent.
Section 4. Directions to Agent. The Required Lenders hereby direct the
Agent to execute and deliver the Agreement.
Section 5. Miscellaneous. (a) This Agreement shall become effective, as of
its date, upon (i) the execution and delivery hereof by the Required
Lenders, the Borrower and the Agent and (ii) the delivery to the Agent of a
fully executed copy of the SDI Subordination Agreement in the form of
Exhibit GG to the Credit Agreement, to which there has been attached a copy
of the Subordinated Promissory Note delivered by IDI to SDI in the form of
part of Exhibit FF attached to the Agreement, and of the letter agreement
which is part of Exhibit FF Attached to the Agreement.
(b) The Credit Agreement, as amended or modified by this Agreement, is in
all respects ratified, approved and confirmed and shall, as so amended
and modified, remain in full force and effect. From and after the date
hereof, all references to the "Agreement" in the Credit Agreement and
in the other Loan Documents shall be deemed to be references to the
Credit Agreement as amended and modified by this Agreement.
(c) This Agreement shall be deemed to be a contract under the laws of the
State of New York and for all purposes shall be governed by and
construed and enforced in accordance with the laws of said State.
(d) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed an original, but all such counter parts
shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this agreement as of the date first
above written.
IRON DYNAMICS, INC.
By: s/s Xxxxx Xxxxxxxx
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Title: Vice President
Mellon Bank
By: s/s Xxxx Xxxxx
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Title: Vice President
Kreditanstalt fur Wiederaufbau
By: s/s Illegible
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Title: First Vice President &
Senior Project Manager
National City Bank, Indiana
By: s/s Xxxxxx Xxxxx
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Title: Senior Vice President
LaSalle Bank National Association
By: s/s Illegible
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Title: Assistant Vice President
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this agreement as of the date first
above written.
IRON DYNAMICS, INC.
By: s/s Xxxxx Xxxxxxxx
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Title: Vice President
Mellon Bank
By: s/s Xxxx Xxxxx
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Title: Vice President
Kreditanstalt fur Wiederaufbau
By: s/s Illegible
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Title: First Vice President &
Senior Project Manager
National City Bank, Indiana
By: s/s Xxxxxx Xxxxx
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Title: Senior Vice President
National City Bank, Indiana
f/k/a Fort Xxxxx National Bank
By: s/s Xxxxxx Xxxxx
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Title: Senior Vice President
LaSalle Bank National Association
By: s/s Illegible
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Title: Assistant Vice President
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