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EXHIBIT 10.1
AMENDMENT NO. 4
TO
CREDIT AGREEMENT
THIS AMENDMENT NO. 4 TO CREDIT AGREEMENT ("Amendment") is dated as of
December 31, 1998, by and among METAL MANAGEMENT, INC., a Delaware corporation
("MTLM"), each of the corporations and other entities set forth on Annex 1
hereto (MTLM and each of such corporations and other entities sometimes
hereinafter are referred to individually as a "BORROWER" and collectively as
"Borrowers"); MTLM, acting in its capacity as funds administrator for itself and
the other Borrowers (in such capacity, the "Funds Administrator"); BT COMMERCIAL
CORPORATION, a Delaware corporation (in its individual capacity, hereinafter
referred to as "BTCC") and the other financial institutions signatories hereto
as lenders (BTCC and each of such other financial institutions hereinafter are
referred to individually as a "Lender" and collectively as "Lenders"); and BTCC,
acting in its capacity as agent (in such capacity, hereinafter referred to as
the "AGENT") for itself and the other Lenders. Capitalized terms used herein but
not otherwise defined herein shall have the respective meanings assigned to such
terms in the Credit Agreement.
WITNESSETH:
WHEREAS, the Borrowers, the Funds Administrator, the Agent and the Lenders
have entered into that certain Credit Agreement dated as of March 31, 1998, as
amended (the "Credit Agreement"), pursuant to which the lenders have agreed to
make certain loans and other financial accommodations to or for the account of
the Borrowers;
WHEREAS, the respective Borrowers have requested that the Agent and the
Lenders further amend the Credit Agreement; and
WHEREAS, the Agent and the Lenders have agreed to further amend the Credit
Agreement on the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises set forth above, the terms
and conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the respective parties
hereto hereby agree as follows:
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1. Amendment to Credit Agreement. Effective as of the date hereof, upon
satisfaction of the conditions precedent set forth in SECTION 2 below, and in
reliance upon the representations and warranties of the respective Borrowers and
the Funds Administrator set forth herein, the Credit Agreement is hereby amended
as follows:
1.1 The Credit Agreement is hereby amended by inserting the following
defined terms into Section 1.1 thereof, in each case in the appropriate
alphabetical order:
Applicable Margin shall mean (i) with respect to any Prime Rate Loan,
one and one-half percent (1.5%) and (ii) with respect to any LIBOR Rate
Loan, two and one-half percent (2.5%) (such percentage amounts being
hereinafter referred to as "Pricing Level I"); provided, that,
notwithstanding the foregoing:
(a) if the Interest Coverage Ratio determined as of September 30,
1999 is equal to or greater than 1.0 to 1.0 (i) for the three-month
period ending on such date, the "Applicable Margin" shall be determined
by reference to Pricing Level I and (ii) for the six-month period ending
on such date, the "Applicable Margin" shall mean (x) with respect to any
Prime Rate Loan, one and one-quarter percent (1.25%) and (Y) with
respect to any LIBOR Rate Loan, two and one-quarter percent (2.25%)
(such percentage amounts being hereinafter referred to as "Pricing Level
II");
(b) if the Interest Coverage Ratio determined as of December 31,
1999 is equal to or greater than 1.0 to 1.0 (i) for the three-month
period ending on such date, the "Applicable Margin" shall be determined
by reference to Pricing Level I, (ii) for the six-month period ending on
such date, the "Applicable Margin" shall be determined by reference to
Pricing Level II, and (iii) for the nine-month period ending on such
date, the "Applicable Margin" shall mean (x) with respect to any Prime
Rate Loan, one percent (1.00%) and (Y) with respect to any LIBOR Rate
Loan, two percent (2.00%) (such percentage amounts being hereinafter
referred to as "Pricing Level III"); and
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(c) if the Interest Coverage Ratio determined as of March 31,
2000, and the last day of each fiscal quarter of the Consolidated Entity
Ending thereafter, is equal to or greater than 1.0 to 1.0 (i) for the
three-month period ending on such date, the "Applicable Margin" shall be
determined by reference to Pricing Level I, (ii) for the six-month
period ending on such date, the "Applicable Margin" shall be determined
by reference to Pricing Level II, (iii) for the nine-month period ending
on such date, the "Applicable Margin" shall be determined by reference
to Pricing Level III and (iv) for the twelve-month period ending on such
date, the "Applicable Margin" shall mean (x) with respect to any Prime
Rate Loan, one-half of one percent (0.50%) and (Y) with respect to any
LIBOR Rate Loan, one and three-quarters percent (1.75%) (such percentage
amounts being hereinafter referred to as "Pricing Level IV").
For purposes of the foregoing CLAUSES (a) through (d), (a) the Interest
Coverage Ratio shall be determined as of each date set forth therein
(each a "Pricing Determination Date") and shall be certified in a
Pricing Certificate delivered to the Agent within thirty (30) days after
such Pricing Determination Date, (b) the Applicable Margin determined on
the basis of the Interest Coverage Ratio certified as of any Pricing
Determination Date in any Pricing Certificate shall be effective for a
period (each a "Pricing Period") that commences on the 31st day after
such Pricing Determination Date and ends on the 30th day after the next
following Pricing Determination Date, and (c) if and whenever the Funds
Administrator fails to deliver a Pricing Certificate for any Pricing
Period prior to the commencement of such Pricing Period, then for each
day of such Pricing Period until the first Business Day following the
Business Day on which such Pricing Certificate is delivered to
Administrative Agent, the Applicable Margin shall be determined by
reference to Pricing Level I; provided, that, notwithstanding the
foregoing, if on each day during the thirty (30) day period ending on
any Pricing Date there shall have been unused availability under the
Borrowing Base of no less than $40,000,000, then the Applicable Margin
in effect for the period commencing on such Pricing Date through but
excluding the immediately
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succeeding Pricing Date shall be determined by reference to Pricing
Level IV.
Pricing Certificate means a certificate in substantially the form of
Exhibit H, signed by the Chief Financial Officer of the Consolidated
Entity.
1.2 The Credit Agreement is hereby amended by deleting therefrom
Sections 4.1(a) AND (b) in their entirety and substituting therefor the
following language:
(a) Interest on the unpaid principal amount of Revolving Loans
which are Prime Rate Loans shall be payable monthly in arrears, on the
first Business Day of each month, at an interest rate per annum equal to
the Prime Lending Rate PLUS the Applicable Margin with respect to such
Loans, calculated on the unpaid principal amount of Revolving Loans at
the close of business each day during the immediately preceding month.
The rate hereunder shall change each day the Prime Lending Rate changes.
(b) Interest on the unpaid principal amount of Revolving Loans
which are LIBOR Rate Loans shall be payable on the earliest to occur of
(i) the last day of each Interest Period with respect to such LIBOR Rate
Loans, (ii) ninety (90) days following the commencement of the
applicable Interest Period for such LIBOR Rate Loans, (iii) the date of
conversion of such LIBOR Rate Loans (or a portion thereof) to a Prime
Rate Loan (on the portion so converted) and (iv) the maturity of such
LIBOR Rate Loans, at an interest rate per annum equal during the
Interest Period for such LIBOR Rate Loans to the LIBOR Rate for the
Interest Period in effect for such LIBOR Rate Loans PLUS the Applicable
Margin with respect to such Loans. After maturity of such LIBOR Rate
Loans (whether by acceleration or otherwise), interest shall be payable
upon demand. The Agent upon determining the LIBOR Rate for any Interest
Period shall promptly notify the Funds Administrator and the Lenders by
telephone (confirmed promptly in writing) or in writing thereof. Each
determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent demonstrable error.
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1.3 The Credit Agreement is hereby amended by deleting therefrom Section
8.1 in its entirety and substituting therefor the following language:
8.1 Minimum Interest Coverage Ratio.
(a) Minimum EBITDA. The Borrowers shall not permit EBITDA, (i)
determined as of December 31, 1998, for the nine-month period ending as
of such date, to be less than negative Three Million Two Hundred Fifty
Thousand and No/100 Dollars ($3,250,000) and (ii) determined as of
March 31, 1999, for the twelve-month period ending as of such date, to
be less than Two Million and No/100 Dollars ($2,000,000).
(b) Minimum Interest Coverage Ratio. The Borrowers shall not
permit the Interest Coverage Ratio to be less than 1.0 to 1.0, as
determined as of: (i) June 30, 1999, for the three (3) month period
ending as of such date; (ii) September 30, 1999, for the six (6) month
period ending as of such date; (iii) December 31, 1999, for the nine (9)
month period ending as of such date; and (iv) March 31, 2000 and the end
of each fiscal quarter of the Consolidated Entity ending thereafter, in
each case for the twelve (12) month period ending as of such date.
1.4 The Credit Agreement is hereby amended by deleting therefrom Clause
(b) of the first paragraph of Section 8.7 and substituting therefor the
following language:
(b) make any optional or mandatory payment of principal of or interest
on, or any optional or mandatory prepayment of principal of or interest
on, or redemption (including, without limitation, by making payments to
a sinking or analogous fund) or repurchase of, in each case any
Indebtedness subordinated to the Obligations, including, without
limitation, Indebtedness evidenced by the Subordinated Notes; provided,
that, notwithstanding the foregoing:
1.5 Section 8.7 of the Credit Agreement is hereby amended by deleting
therefrom clause (iii) in its entirety and substituting therefor the
following language:
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(iii) so long as in each case before and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing (1) Borrowers may make regularly scheduled payments of
interest on Indebtedness (other than Indebtedness evidenced by the
Subordinated Notes) and (2) prepay Indebtedness (other than Indebtedness
evidenced by the Subordinated Notes) in an aggregate principal amount
not exceeding $5,000,000 in any fiscal year of the Consolidated Entity
for all Borrowers combined;
1.6 Section 8.7 of the Credit Agreement is hereby amended by (a)
inserting therein the following language immediately following clause (iv)
thereof and (b) renumbering clause "(v)" thereof as clause "(vi)":
(v) MTLM may make regularly scheduled payments of interest on the
Subordinated Notes, so long as, in the case of each such payment:
(1) immediately before and after giving effect thereto, no
Default or Event of Default shall have occurred and be
continuing, and
(2) on each day during the thirty (30) day period ending on
the date on which such interest payment is made, there shall have
been unused availability under the Borrowing Base of no less than
the sum of (x) the amount of such interest payment and (Y)
$20,000,000; and
1.7 The Credit Agreement is hereby amended by adding thereto as Exhibit
H the form of Pricing Certificate attached hereto as Exhibit A.
2. Conditions Precedent. This Amendment shall become effective as of the
date hereof, upon satisfaction of each of the following conditions:
(a) the Agent shall have received six (6) copies of this Amendment,
duly executed by the Majority Lenders, each of the Borrowers and the Funds
Administrator; and
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(b) the Agent shall have received in immediately available funds for
the ratable account of the Lenders a fee in the amount of $150,000.
3. Representations, Warranties and Covenants.
3.1 Each of the Borrowers and the Funds Administrator hereby
represents and warrants to the Agent and each of the Lenders that, after
giving effect to this Amendment:
(a) All representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all
material respects on and as of the date of this Amendment, in each
case as if then made, other than representations and warranties that
expressly relate solely to an earlier date (in which case such
representations and warranties remain true and accurate on and as of
such earlier date);
(b) No Default or Event of Default has occurred which is
continuing;
(c) This Amendment, and the Credit Agreement, as amended hereby,
constitute legal, valid and binding obligations of the Borrowers and
the Funds Administrator, respectively, and are enforceable against
each of the Borrowers and the Funds Administrator in accordance with
their respective terms; and
(d) The execution and delivery by the Borrowers and the Funds
Administrator of this Amendment does not require the consent or
approval of any Person, except such consents and approvals as have
been obtained.
4. Reference to and Effect On the Credit Agreement and the Other Credit
Documents.
4.1 Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of like import, and each reference in each of the other Credit
Documents to the "Credit Agreement" shall in each case mean and be a
reference to the Credit Agreement as amended hereby.
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4.2 Except as expressly set forth herein, (i) the execution and delivery
of this Amendment shall in no way affect any of the respective rights,
powers or remedies of the Agent or any of the Lenders with respect to any
Event of Default nor constitute a waiver of any provision of the Credit
Agreement or any of the other Credit Documents and (ii) all of the
respective terms and provisions of the Credit Agreement, the other Credit
Documents and all other documents, instruments, amendments and agreements
executed and/or delivered by any of the Borrowers and/or the Funds
Administrator pursuant thereto or in connection therewith shall remain in
full force and effect and are hereby ratified and confirmed in all
respects. The execution and delivery of this Amendment by the Agent and
each of the Lenders shall in no way obligate the Agent or any of the
Lenders, at any time hereafter, to consent to any other amendment or
modification of any term or provision of the Credit Agreement or any of the
other Credit Documents, whether of a similar or different nature.
5. Governing Law. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.
6. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
7. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Any such counterpart
which may be delivered by facsimile transmission shall be deemed the equivalent
of an originally signed counterpart and shall be fully admissible in any
enforcement proceedings regarding this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the date first set forth above.
BT COMMERCIAL CORPORATION, in its
individual capacity as a Lender
and in its capacity as Agent
By:
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Name:
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Title:
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XXXXXX FINANCIAL, INC.
By:
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Name:
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Title:
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SANWA BUSINESS CREDIT CORPORATION
By:
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Name:
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Title:
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FLEET CAPITAL CORPORATION
By:
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Name:
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Title:
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LASALLE NATIONAL BANK
By:
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Name:
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Title:
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CONGRESS FINANCIAL CORP. (CENTRAL)
By:
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Name:
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Title:
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FINOVA CAPITAL CORPORATION
By:
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Name:
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Title:
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Amendment No. 4 to
Credit Agreement
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NATIONAL CITY COMMERCIAL FINANCE,
INC.
By:
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Name:
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Title:
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PNC BUSINESS CREDIT
By:
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Name:
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Title:
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IBJ XXXXXXXX BUSINESS CREDIT
CORPORATION
By:
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Name:
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Title:
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NATIONAL BANK OF CANADA
By:
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Name:
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Title:
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BANKBOSTON, N.A.
By:
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Name:
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Title:
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METAL MANAGEMENT, INC., a Delaware
corporation, in its individual
capacity as a Borrower and in its
capacity as Funds Administrator
By:
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Name:
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Title:
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Amendment No. 4 to
Credit Agreement
11
AEROSPACE METALS, INC.
AMERICAN SCRAP PROCESSING, INC.
BRIQUETTING CORPORATION OF AMERICA
C SHREDDING CORP.
CALIFORNIA METALS RECYCLING, INC.
CIM TRUCKING, INC.
COMETCO CORP.
XXXXX BUILDING CORPORATION
XXXXX IRON & METAL, INC.
EMCO TRADING, INC.
FERREX TRADING CORPORATION
FIRMA, INC.
FIRMA PLASTIC CO., INC.
HOUSTON COMPRESSED STEEL CORP.
HOUTEX METALS COMPANY, INC.
THE XXXXX CORPORATION
X. XXXXXX IRON & METAL, INC.
KANKAKEE SCRAP CORPORATION
MAC LEOD METALS CO.
METAL MANAGEMENT ARIZONA, INC.
METAL MANAGEMENT REALTY, INC.
PAULDING RECYCLING,INC.
PROLER SOUTHWEST INC.
PROLER STEELWORKS L.L.C.
SALT RIVER RECYCLING, L.L.C.
SCRAP PROCESSING, INC.
SUPERIOR FORGE, INC.
TROJAN TRADING CO.
USA SOUTHWESTERN CARRIER, INC.
138 SCRAP ACQUISITION CORP.
R & P HOLDINGS, INC.
R & P REAL ESTATE, INC.
XXXXXXX XXXXXXXXX COMPANY
METAL MANAGEMENT GULF COAST, INC.
XXXXXX RECYCLING WEST, INC..
NAPORANO IRON & METAL CO.
NIMCO SHREDDING CO.
XXXXXXX XXXXXXXXX & SONS, INC.
TORRINGTON SCRAP COMPANY
XXXXXXXXX ACQUISITION CORP.
NICROLOY ACQUISITION CORP.
FPX, INC.
PERLCO, L.L.C.
By:
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Name:
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Title:
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RESERVE IRON & METAL LIMITED
PARTNERSHIP
By: X. XXXXXX IRON & METAL, INC.,
its general partner
By:
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Name:
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Title:
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Amendment No. 4 to
Credit Agreement
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ANNEX 1
TO
AMENDMENT NO. 4
DATED AS OF DECEMBER 31, 1998
OTHER BORROWERS
1. AEROSPACE METALS, INC.
2. AMERICAN SCRAP PROCESSING, INC.
3. BRIQUETTING CORPORATION OF AMERICA
4. C SHREDDING CORP.
5. CALIFORNIA METALS RECYCLING, INC.
6. CIM TRUCKING, INC.
7. COMETCO CORP.
8. XXXXX BUILDING CORPORATION
9. XXXXX IRON & METAL, INC.
10. EMCO TRADING, INC.
11. FERREX TRADING CORPORATION
12. FIRMA, INC.
13. FIRMA PLASTIC CO., INC.
14. HOUSTON COMPRESSED STEEL CORP.
15. HOUTEX METALS COMPANY, INC.
16. THE XXXXX CORPORATION
17. X. XXXXXX IRON & METAL, INC.
18. KANKAKEE SCRAP CORPORATION
19. MAC LEOD METALS CO.
20. METAL MANAGEMENT ARIZONA, INC.
21. METAL MANAGEMENT REALTY, INC.
22. PAULDING RECYCLING,INC.
23. PROLER SOUTHWEST INC.
24. PROLER STEELWORKS L.L.C.
25. SALT RIVER RECYCLING, L.L.C.
26. SCRAP PROCESSING, INC.
27. SUPERIOR FORGE, INC.
28. TROJAN TRADING CO.
29. USA SOUTHWESTERN CARRIER, INC.
30. RESERVE IRON & METAL LIMITED PARTNERSHIP
31. 138 SCRAP ACQUISITION CORP.
32. R & P HOLDINGS, INC.
33. R & P REAL ESTATE, INC.
34. XXXXXXX XXXXXXXXX COMPANY
35. METAL MANAGEMENT GULF COAST, INC.
36. XXXXXX RECYCLING WEST, INC..
37. NAPORANO IRON & METAL CO.
38. NIMCO SHREDDING CO.
39. XXXXXXX XXXXXXXXX & SONS, INC.
40. TORRINGTON SCRAP COMPANY
41. XXXXXXXXX ACQUISITION CORP.
42. NICROLOY ACQUISITION CORP.
43. FPX, INC.
44. PERLCO, L.L.C.
Amendment No. 4 to
Credit Agreement
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EXHIBIT A
TO
AMENDMENT NO. 4
TO
CREDIT AGREEMENT
FORM OF PRICING CERTIFICATE
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BT Commercial Corporation, as
Agent for the Lenders parties to the
Credit Agreement referred to below
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
RE: Loans to Metal Management, Inc. and Subsidiaries/Pricing
Ladies and Gentlemen:
We refer to that certain Credit Agreement, dated as of March 31, 1998 (as
amended, restated, supplemented or otherwise modified and in effect from time to
time, the "Credit Agreement") among METAL MANAGEMENT, INC., a Delaware
corporation ("MTLM") and certain of its subsidiaries (each individually a
"Borrower" and collectively the "Borrowers"); MTLM, in its capacity as funds
administrator and borrowing representative for itself and the other Borrowers
(MTLM, in such capacity, the "Funds Administrator"); BT COMMERCIAL CORPORATION,
individually as a Lender and in its capacity as Agent (in such capacity "Agent")
for itself and any other Lenders from time to time parties thereto. Capitalized
terms used but not otherwise defined herein are used herein as defined in the
Credit Agreement.
1. I, _____________________ , am the Chief Financial Officer
of the Consolidated Entity.
Amendment No. 4 to
Credit Agreement
14
BT Commercial Corporation,
as Agent
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Page 14
2. I am delivering this certificate pursuant to the definition of
"Applicable Margin" set forth in Section 1.1 of the Credit Agreement.
3. The Interest Coverage Ratio determined as of the Pricing Determination
Date occurring on ________ __, ____(1) was ____ to ____. Accordingly, for the
Pricing Period that commences on the 31st day after such Pricing Determination
Date, the "Applicable Margin" shall be determined by reference to Pricing
Level ____.
4. On behalf of each Borrower, I acknowledge (and waive notice of) your
acceptance hereof and reliance hereon. This Pricing Certificate constitutes a
Credit Document.
IN WITNESS WHEREOF, I have executed this Pricing Certificate this ____ day
of ___________, ____.
Very truly yours,
METAL MANAGEMENT, INC., a
Delaware corporation
By:
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Name:
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Title:
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(1) Insert most recent Pricing Determination Date (last day of fiscal quarter).
Amendment No. 4 to
Credit Agreement
