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Exhibit 10.1 (b) 5
FIFTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this
"Agreement"), dated as of March 29, 2000, 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, by
the Second Amendment to Credit Agreement, dated as of March 15, 1999, the Third
Amendment and Waiver to Credit Agreement, dated as of June 30, 1999 and the
Fourth Amendment to Credit Agreement, dated as of December 21, 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) Definitions. Section 1.01 of the Credit Agreement is hereby
amended by amending the definitions of "Financial Covenant Date" and "Revolving
Credit Maturity Date" 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)
June 30, 2001.
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"Revolving Credit Maturity Date" shall mean May 1, 2001.
and by amending the definition of "Project" by adding thereto, prior to the
words "and related improvements" appearing therein, the following:
"and the related hot briquetted iron facility consisting of at least
two briquetters yielding an aggregate of approximately 70 metric tons
per hour of sustained production of hot briquetted iron of a quality
acceptable for use to feed SDI's furnaces"
(b) Preliminary Acceptance Date. For the purpose of extending the
deadline for achieving the Preliminary Acceptance Date, the date "March 31,
2000" appearing in each of the following Sections of the Credit Agreement is
hereby changed to "March 31, 2001":
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"
(c) Applicability of Borrowing Base. For the purpose of determining
the first date on which the Borrowing Base requirement will be applicable, the
words "Following the date that is 90 days after the Preliminary Acceptance
Date" appearing in Section 2.01(a) of the Credit Agreement are hereby amended
to read "Following the Preliminary Acceptance Date".
(d) Final Acceptance Date. For the purpose of extending the deadline
for achieving the Final Acceptance Date, the date "December 31, 2000" appearing
in each of the following Sections of the Credit Agreement is hereby changed to
"September 30, 2001":
Section 5.01(j)(viii), titled "Notice of Certain Events"
Section 5.14, titled "Construction of the Project"
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Section 6.19, titled "Change Orders"
Section 7.01(q) and 7.01(v), titled "Events of Default"
(e) Construction Progress Reports. Section 5.01(o) of the Credit
Agreement is hereby amended by adding at the end thereof the following:
"The furnishing of such reports shall continue from the date of the
Fifth Amendment to this Agreement until the Final Acceptance Date,
including with respect to the addition of briquetters to the Project,
any modification of the submerged arc furnace and any other related or
appropriate items."
(f) Additional Project Information. Section 5.01 of the Credit
Agreement is hereby amended by adding at the end thereof a new Section 5.01(q)
to read as follows:
"(q) Additional Project Information. The Borrower shall promptly
furnish to the Agent, on a weekly basis (or such other basis as the
Agent shall approve), such engineering, financial and other
information, and in such form, as the Agent or the Required Lenders
shall reasonably request from time to time, including but not limited
to advance notice of significant engineering decisions and changes and
weekly production reports (including volumes and compositions) for pig
iron, direct reduced iron and briquettes.
(g) Tangible Net Worth. Section 6.01(a) of the Credit Agreement is
hereby amended by adding at the end thereof the following:
"For purposes of this Section 6.01(a), Tangible Net Worth shall be
calculated by treating the amount of Indebtedness of the Borrower to
SDI outstanding in accordance with Section 6.03(h) hereof as equity of
the Borrower and not a liability of the Borrower."
(h) Negative EBITDA. 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
the Financial Covenant Date cumulative negative EBITDA of the Borrower
at the end of any fiscal quarter shall not exceed $35,000,000."
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(i) Indebtedness of the Borrower to SDI. Section 6.03(h) of the Credit
Agreement is hereby amended by adding at the end thereof the following:
"Any other provision hereof or of the SDI Subordination Agreement or
of the SDI Loan Documentation referred to therein to the contrary not
withstanding, no payment of interest on the principal amount of such
Indebtedness owing to SDI under this Section 6.03(h) shall be paid
prior to the later of (x) October 1, 2000 and (y) the first date
following the date on which the Borrower shall have achieved positive
EBITDA for each of three consecutive months."
Section 2. Amendments Related to IDI Mergers.
(a) Definitions. Section 1.01 of the Credit Agreement is hereby
amended by adding thereto in the proper alphabetical order the following
definitions:
"SDI Investment Company" shall mean a passive investment company
formed or to be formed as a wholly-owned subsidiary of SDI to which
SDI proposes to transfer all of its intellectual property.
"SDI Organizational Restructuring" shall mean the completion, on a
substantially contemporaneous basis and pursuant to documentation in
form and substance satisfactory to the Agent, of each of the following
transactions:
(a) SDI will cause the formation of two Indiana corporations,
each of which will be a wholly-owned Subsidiary of SDI, one of
which ("SDILP") will be named Steel Dynamics LP, Inc. or some
other corporate name chosen by SDI and the other of which
("SDIGP") will be named Steel Dynamics GP, Inc. or some other
corporate name chosen by SDI;
(b) All of the properties, assets (except intellectual
property, the stock of SDI Investment Company and a certain amount
of cash) and operations of SDI (the "SDI Operating Assets") will
be transferred to SDILP in exchange for 100% of the issued and
outstanding shares of SDILP and the assumption by SDILP of all the
liabilities of SDI. SDI will contribute to SOTGP all of its cash
not transferred to SDILP
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in exchange for all of the issued and
outstanding shares of SDIGP;
(c) SDIGP and SDILP will then form Steel Dynamics, LP, an
Indiana limited partnership (the "Partnership"), with SDILP
contributing the SDI Operating Assets (subject to SDI's
liabilities, which will be assumed by the Partnership) in exchange
for a 99% limited partnership interest, and SDIGP contributing its
cash for a 1% general partnership interest, in the Partnership.
All the employees of SDI immediately prior to the consummation of
the Organizational Restructuring will become employees of the
Partnership upon such consummation;
(d) SDI will also form a new Delaware subsidiary corporation,
into which Iron Dynamics, Inc. will be merged, with the survivor
being a wholly-owned Delaware subsidiary of SDI. Immediately
following such merger, such Delaware subsidiary will be merged
into a newly formed Delaware limited liability company ("Iron
Dynamics, LLC"), which will be wholly-owned by the Partnership.
"IDI Mergers" shall mean the completion, in connection with the SDI
Organizational Restructuring, on a substantially contemporaneous basis
and pursuant to documentation in form and substance satisfactory to
the Agent of each of the following transactions:
(a) SDI will also form a new Delaware subsidiary corporation,
into which Iron Dynamics, Inc. will be merged, with the survivor
being a wholly-owned Delaware subsidiary of SDI.
(b) Immediately following such merger, such Delaware
subsidiary will be merged into a newly formed Delaware limited
liability company ("Iron Dynamics, LLC"), which will be
wholly-owned by the Partnership with the result that Iron
Dynamics, LLC, as successor by merger to Iron Dynamics, Inc.,
will be the Borrower under this Agreement.
(b) Ownership and Control of Borrower. On the date of the
effectiveness of the IDI Mergers, Schedule 3.15 to the
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Credit Agreement shall be amended and restated and replaced by Schedule 3.15
attached to this Agreement and made a part hereof.
(c) Preservation of Corporate Status. Section 5.04 of the Credit
Agreement is hereby amended by adding at the beginning thereof the words
"Except for the IDI Mergers,".
(d) Consolidated Tax Return. Section 5.11 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
"5.11. Consolidated Tax Return. The Borrower shall not, and shall
not permit any other Loan Party to, file or consent to the filing of
any consolidated income tax return with any Person other than a Loan
party, SDI, the currently existing subsidiaries of SDI (which are New
Millennium Building Systems, LLC and SDI Investment Company) and the
other subsidiaries of SDI to be formed in connection with the SDI
Organizational Restructuring."
(e) Mergers, Acquisitions, etc. Section 6.09 of the Credit Agreement
is hereby amended by adding at the beginning thereof the words "Except for the
IDI Mergers,".
(f) Dealings With Affiliates. Section 6.12 of the Credit Agreement is
hereby amended by adding at the end thereof a new Section 6.12(e) to read as
follows:
"(e) The IDI Mergers."
(g) Identity of Borrower. Upon the effectiveness of the IDI Mergers,
the Borrower under the Credit Agreement shall become and be Iron Dynamics, LLC
and all references to "Borrower" in the Credit Agreement, the Notes and the
other Loan Documents shall mean Iron Dynamics, LLC.
SECTION 2. WAIVER WITH RESPECT TO EBITDA. The Required Lenders hereby
waive (a) any requirement of Section 6.01(c) of the Credit Agreement with
respect to the cumulative negative EBITDA of the Borrower at the end of the
fiscal quarter ended December 31, 1999, and (b) any Event of Default and any
Potential Default which may have arisen pursuant to Section 7.01(d) of the
Credit Agreement as a result of the failure of the Borrower to comply with such
requirement of Section 6.01(c) at the end of such fiscal quarter in the absence
of the foregoing waiver.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower has furnished
to the Agent and each Lender a detailed
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work schedule for Completion of the Project, including the briquetters,
modifications to the submerged arc furnace and other capital expenditures, and
projections demonstrating the projected financial condition and results of
operations of the borrower (giving effect to such work schedule) for the period
commencing on January 1, 2000 and ending on December 31, 2002, which
projections are accompanied by a written statement of the assumptions and
estimates underlying such projections. Such projections were prepared on the
basis of such assumptions and estimates. Such projections, assumptions and
estimates and such work schedule, as of the date of preparation thereof and as
of the date of this Agreement, are reasonable, are made in good faith,
represent the Borrower's best judgment as to such matters on the date thereof
and do not contain assumptions or methods of calculation which are inconsistent
with the requirements of the Loan Documents as amended by this Agreement.
Nothing contained in this Section constitutes a representation or warranty that
such future financial performance or results of operations will in fact be
achieved.
SECTION 5. DIRECTIONS TO AGENT. The Required Lenders hereby direct the
Agent to execute and deliver this Agreement and each document and instrument
referred to in Section 6 hereof to which the signature of the Agent is
necessary or appropriate.
SECTION 6. EFFECTIVENESS. (a) The terms of this Agreement other than
the terms of Section 2 hereof shall become effective, as of the date of this
Agreement, upon the execution and delivery hereof by the Borrower, the Agent,
each Revolving Credit Lender and such additional Lenders as shall, together
with the Revolving Credit Lenders, constitute the Required Lenders.
(b) The terms of Section 2 of this Agreement shall become effective
upon the first date on which each of the following conditions shall have been
satisfied:
(i) Each of the conditions set forth in Section 6(a) hereof shall
have been satisfied;
(ii) The Agent shall have received, together with copies for each
Lender, an omnibus amendment to the Credit Agreement, the Security
Documents and such other Loan Documents as the Agent shall request,
duly executed and delivered by Iron Dynamics, LLC, whereby Iron
Dynamics, LLC confirms that it is the Borrower under the Credit
Agreement, the Notes and the other Loan Documents, assumes all
obligations, liabilities and duties of the Borrower thereunder,
confirms the Liens thereunder and agrees to be bound thereby;
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(iii) The Agent shall have received replacement Notes duly
executed by and naming Iron Dynamics, LLC as payor thereunder;
(iv) The Agent shall have received such additional financing
statements and/or amendments to financing statements with respect to
the Collateral and naming Iron Dynamics, LLC, as Debtor, as the Agent
shall request;
(v) The Agent shall have received an amendment, in recordable
form, to the lease with respect to the Project Site whereby Steel
Dynamics, LP becomes the lessor thereunder and Iron Dynamics, LLC
confirms that it is the lessee thereunder and each agrees to be bound
thereby;
(vi) The Agent shall have received an amendment, in recordable
form, to the Mortgage with respect to the Project Site whereby Iron
Dynamics, LLC confirms that it is the Mortgagor thereunder, assumes
all obligations, liabilities and duties of the mortgagor thereunder,
confirms the Liens thereunder and agrees to be bound thereby;
(vii) The Agent shall have received a copy of an agreement
whereby SDI and Steel Dynamics, LP each agrees and confirms that all
obligations, liabilities and duties of SDI to the Borrower immediately
prior to the SDI Organizational Restructuring, pursuant to all
agreements and documents between SDI and the Borrower immediately
prior to the SDI Organizational Restructuring, shall survive and
continue as joint and several obligations, liabilities and duties of
SDI and Steel Dynamics, LP to and for the benefit of Iron Dynamics,
LLC;
(viii) The Agent shall have received the agreement in writing of
each of SDI, Steel Dynamics, LP and Iron Dynamics, LLC to, at any time
and from time to time whether before or after the SDI Organizational
Restructuring, upon request of the Agent, duly execute and deliver any
and all such further documents, agreements and instruments and take
any and all such further actions as the Agent may reasonably request
in order to obtain for the Agent and the Lenders the full benefit of
the terms of this Section 5 and the rights, powers and remedies
conveyed under or pursuant to this Section 6;
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(ix) Each of the documents, agreements and instruments referred
to in this Section 6(b) shall be in form and substance satisfactory to
the Agent.
SECTION 7. MISCELLANEOUS. (a) 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.
(b) 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.
(c) This Agreement may be executed in any number of counterparts and
by the different parties hereto 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 instrument.
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/ Xxxxx X Xxxxxxxxxxxx
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Title:
MELLON BANK, N.A., as Lender,
as Issuing Bank and as Agent
By /s/
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Title:
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KREDITANSTALT FUR WIEDERAUFBAU
By
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Title:
By
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Title:
COMERICA BANK
By
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Title:
NATIONAL CITY BANK, INDIANA
By /s/
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Title:
LASALLE BANK NATIONAL ASSOCIATION
By
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Title:
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