Exhibit 4.1(h)
1997 Amendment Agreement
, 1997
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SWVA, Inc.
17th Street and 2nd Avenue
Huntington, WV 25726
Gentlemen:
We refer to the Financing Agreement between us dated December 30, 1986, as
amended (the "Financing Agreement"). Capitalized terms used herein and
defined in the Financing Agreement shall have the meanings set forth in said
Financing Agreement unless otherwise specifically defined herein.
You have requested that we extend to you an additional credit facility with
respect to financing your new capital expenditures program and that various
provisions of the Financing Agreement be amended. We have agreed to the
foregoing subject to, and in accordance with, the terms, provisions and
conditions hereof.
Effective immediately pursuant to mutual understanding, the Financing
Agreement shall be, and hereby is, amended as follows:
1) The definitions of "Anniversary Date", "Term Loans", "Promissory Notes",
"Early Termination Fee", and "Prepayment Discount Rate" in Section 1 of the
Financing Agreement shall be, and each hereby is, deleted and the following
shall be, and hereby is substituted in lieu thereof:
"ANNIVERSARY DATE shall mean January 1, 2001."
"TERM LOANS shall mean the CAPEX Term Loans and the Additional CAPEX Term
Loans made and to be made by CITBC to the Company pursuant to, and
repayable in accordance with, the provisions of Section 3 of the Financing
Agreement."
"PROMISSORY NOTES shall mean the notes in the forms of Exhibits B and
C attached hereto, delivered by the Company to CITBC to evidence the Term
Loans pursuant to, and repayable in accordance with the provisions of
Section 3 of this Financing Agreement."
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"EARLY TERMINATION FEE shall: i) mean the fee CITBC is entitled to
charge the Company in the event the Company terminates the Line of
Credit or this Financing Agreement on a date prior to January 1, 1999;
and ii) be determined by multiplying the average daily loan balance
under the Revolving Loan for the period from the date of this
Financing Agreement to the Early Termination Date by one and one-half
percent (1 1/2%) for the number of days from the Early Termination
Date to January 1, 1999."
PREPAYMENT DISCOUNT RATE shall mean the sum of (i) the yield equal to
the quarterly bid yield to maturity of a U.S. Treasury Note or Bond
issued within three (3) months prior to the date prepayment of any
Treasury Rate Loan (as shown under the column heading "Ask Yld." for
"Govt. Bonds & Notes" in the Treasury Bonds, Notes & Bills" section of
The Wall Street Journal - Eastern Edition published on the second
(2nd) business day prior to the date of prepayment) with a remaining
term equal to the Weighted Average Life to Maturity, plus (ii) three
percent (3%) for any part of the Term Loans that bears interest at the
Treasury Rate.
2) The definition of "Going Public Fee" shall be, and hereby is, deleted from
Section 1 of the Financing Agreement and the following definitions shall be, and
each hereby is, added to Section 1 of the Financing Agreement in the proper
alphabetical order:
"ADDITIONAL CAPEX TERM LOANS shall mean the term loans made and to be
made to the Company by CITBC in the aggregate principal amount of up
to $23,000,000, as more fully described in Section 3 of this Financing
Agreement."
"ADDITIONAL CAPEX TERM LOAN LINE OF CREDIT shall mean the commitment
of CITBC to make Additional CAPEX Term Loans to the Company pursuant
to Section 3 of this Financing Agreement in the aggregate amount not
to exceed $23,000,000."
"CHASE BANK RATE shall mean the rate of interest per annum announced
by The Chase Manhattan Bank, or its successor in interest, from time
to time as its prime rate in effect at its principal office in the
County, City and State of New York. (The prime rate is not intended
to be the lowest rate of interest charged by The Chase Manhattan Bank
to its borrowers)."
3) Section 3, Paragraphs 6 and 7 of the Financing Agreement shall be, and each
hereby is amended in its entirety to read as follows:
"6. The Company may, at its option, prepay all or any part of the
principal of the Term Loans, before maturity, provided that on each
prepayment the Company shall pay accrued interest on the principal so
prepaid to the date of such prepayment."
"7. Each Mandatory Prepayment or voluntary prepayment shall be applied
to the last maturing installments of principal of the CAPEX Term Loans
until paid in full and then to the last maturing installments of the
Additional CAPEX Term Loans until paid in full."
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4) Section 3, Paragraph 3 of the Financing Agreement shall be, and hereby is,
amended by the addition thereto of the following new paragraphs d and e:
"3.(d) Within the available and unused Additional CAPEX Term Loan Line
of Credit and upon receipt of a Promissory Note, in the form of
Exhibit C attached hereto, from the Company in the amount of the
Additional CAPEX Term Loan, CITBC will extend to the Company an
Additional CAPEX Term Loan, provided: a) the Company is not then in
breach or violation of this Financing Agreement, and b) all of the
conditions listed below are fulfilled to the sole but reasonable
satisfaction of CITBC. The conditions are as follows:
i) Additional CAPEX Term Loan proceeds are to be used exclusively to
pay for, or reimburse the Company for, the acquisition by the
Company of newly acquired capital improvements (other than Real
Estate) which are not subject to Purchase Money Liens or any
other lien or security interest;
ii) the Company must give CITBC fifteen (15) days prior written
notice of its intention to enter into an Additional CAPEX Term
Loan and draw down the Additional CAPEX Term Loans no later than
July 1, 1998;
iii) the Company shall be entitled to four (4) Additional Capex Term
Loans per calendar year but no more than one (1) Additional CAPEX
Term Loan in any fiscal quarter;
iv) no Additional CAPEX Term Loan may exceed eighty percent (80%) of
the total acquisition costs of the capital improvements (other
than Real Estate) exclusive of assembly costs, installation
expenses, maintenance, shipping costs, taxes and import or custom
charges for which the Additional CAPEX Term Loan is sought; and
v) each Additional CAPEX Term Loan must be in increments of
$250,000.00 or whole multiples thereof and may not exceed in the
aggregate the Additional CAPEX Term Loan Line of Credit.
(e) Each Additional CAPEX Term Loan will be repaid to CITBC by the
Company in equal quarterly installments of principal computed on a ten
(10) year amortization schedule, which installments shall commence on
July 1, 1998 and thereafter on the first business day of each October,
January, April and July thereafter until paid in full. To the extent
repaid, Additional CAPEX Term Loans may not be reborrowed under this
Section 3 of the Financing Agreement."
5) Section 7, Paragraph 2 of the Financing Agreement shall be, and each
hereby is, amended in its entirety to read as follows:
"2.(a) Interest on the Term Loans shall be payable monthly as of the
end of each month on the unpaid balance or on payment in full prior to
maturity in an amount
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equal to the (i) Chase Bank Rate, on a per annum
basis on the outstanding balance of all Term Loans (other than Libor
Loans), and (ii) one and three-quarters percent (1 3/4%) plus Libor,
on a per annum basis, on any Term Loans which are Libor Loans on the
average of the net balances owing by the Company to CITBC in the
Company's account at the close of each day during the month. The
Company may elect to use Libor as to any then outstanding Term Loans
provided x) there is then no Event of Default, y) the Company has so
advised CITBC of its election to use Libor and the Libor Period
selected no later than three (3) business days preceding the first day
of a Libor Period and z) the election and Libor shall be effective,
provided there is then no Event of Default, on the fourth business day
following said notice. The Libor elections must be for $1,000,000 or
more and there shall be no more than 3 elections to use Libor to
compute interest at any one time under paragraphs 1 and 2 of this
Section 7. If no such election is timely made or can be made or if
Libor can not be determined, then CITBC shall use the Chase Bank Rate
to compute interest. In the event of any change in said Chase Bank
Rate, the rate under clause "(i)" above shall change, as of the first
of the month following any change, so as to remain equal to the Chase
Bank Rate. The rates hereunder shall be calculated based on a 360 day
year. CITBC shall be entitled to charge the Company's account at the
rate provided for herein when due until all Obligations have been paid
in full. (b)(i) In lieu of interest computed at the rates specified in
Paragraph "(a)" above, the Company shall have the option to elect a
fixed rate of interest on all or a portion of the Additional CAPEX
Term Loans during a one hundred and eighty (180) days period
commencing on July 1, 1998 (the "Election Period"), such interest rate
(x) shall be applied only to the then outstanding balance of the
Additional CAPEX Term Loans, and (y) shall be equal to the Treasury
Rate plus three percent (3%). Such fixed rate election may be
exercised only once during such Election Period. In addition, if the
first day for which interest is payable on the Additional CAPEX Term
Loans subject to a fixed interest rate is other than the first day of
a calendar month, the amount of such interest payable pursuant to
Paragraph 2 of this Section 7 with respect to such Additional CAPEX
Term Loans for the initial month for which such fixed interest rate is
calculated shall be prorated for the number of days of such month that
such Addition CAPEX Term Loans are outstanding.
(ii) Provided that (x) there is then no Event of Default and (y) the
Company has given a notice in accordance with this Paragraph 2(b)(ii),
the Company may convert all or a portion of the Additional CAPEX Term
Loans from a variable interest rate to a Treasury Rate - provided,
however, (A) that such fixed rate shall be applicable only to the then
outstanding Additional CAPEX Term Loans and (B) any such conversion
must be made within one hundred and eighty (180) days after July 1,
1998 and (C) the Treasury Rate shall be applicable for a period up to
but not exceeding 3 years. Whenever the Company desires to convert a
variable interest rate to a Treasury Rate, the Company must notify
CITBC of its election no later than thirty (30) calendar days
preceding the first day of the next succeeding month. If no such
election is timely made or can be made or upon expiration of the
applicable duration of any such Treasury Rate Loan, CITBC shall use
the Chase Bank Rate in lieu of the Treasury Rate. Each notice of
election hereunder shall (1) identify the Additional CAPEX Term Loans
to be converted and the aggregate outstanding principal balance
thereof, (2) specify
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the effective date of the conversion and the duration of such conversion,
and (3) specify the principal amount of such Additional CAPEX Term Loans
to be converted, and, in the case of any such notice given other than in
writing , shall be immediately followed by a written confirmation thereof
by the Company; provided, however, that if such written confirmation
differs in any material respect from the action taken by CITBC prior to
receiving such written confirmation and based upon a nonwritten notice,
the records of CITBC shall control absent manifest error.
(iii) Subject to the applicable provisions relating to prepayment of
the Term Loans, the Company may prepay the Treasury Rate Loans at any
time provided that upon such prepayment it pays to CITBC the
Make-Whole Premium in immediately available funds.
(iv) Interest on the Additional CAPEX Term Loans for which a fixed
rate election has been made shall be payable as of the end of each
month on the unpaid balance thereof or on payment in full prior to
maturity in an amount equal to such applicable fixed rate on any
Additional CAPEX Term Loans which are the Treasury Rate Loans computed
on the average of the net balances thereof owing by the Company to
CITBC in the Company's account at the close of each day during the
month. Such rate shall be calculated on a 360 day year. CITBC shall
be entitled to charge the Company's account at such rate when due
until all Obligations have been paid in full."
7) Section 10 of the Financing Agreement shall be, and hereto is, amended by
deleting the "proviso" at the end of the fourth sentence thereof.
8) It is further agreed that:
(a) The term "Obligations" as used in the Financing Agreement shall
also include, without limitation, all present and future
indebtedness, liabilities and obligations of the Company to CITBC
pursuant to the Additional CAPEX Term Loans.
(b) The form of Promissory Note attached hereto shall be annexed to
the Financing Agreement as Exhibit C and shall evidence the
Additional CAPEX Term Loans.
(c) The Additional CAPEX Term Loans shall (i) incur interest at the
rate specified in Section 7, Paragraph 2 of the Financing
Agreement and (ii) be secured by all Collateral.
(d) All references to "Chemical Bank Rate" in the Financing Agreement
shall be, and hereby are, amended to read "Chase Bank Rate".
(e) The Company acknowledges and agrees that CITBC may make
assignments and/or sell participation in the loans and extensions
of credit made and to be made to the Company under the Financing
Agreement (as amended hereby) on such terms and conditions as
CITBC shall in its sole discretion determine. The Company
further acknowledges that in doing so, CITBC may grant to such
co-lenders or participants certain rights which would require
CITBC to obtain the co-lender's or participant's consent prior to
executing certain waivers
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and/or amendments, and prior to taking certain other actions with
respect to the provisions of the Financing Agreement, provided that
such co-lenders and participants shall not be granted independent
rights to conduct audits and/or examinations of the Company's books
and records and/or Collateral but shall have the right to accompany
CITBC on any such audits or examinations at the participant's cost and
expense.
(f) The extension of Additional CAPEX Term Loans shall be conditioned
upon the fulfillment of the following conditions precedent to
CITBC's reasonable satisfaction:
(i) The Company simultaneously executing and delivering to CITBC
the Promissory Note referred to in Paragraph 8(b) above and
Mortgages and/or Deeds of Trust granting to CITBC first mortgage
liens upon the Company's Real Estate to secure the Additional
CAPEX Term Loans.
(ii) Our receipt of certified resolutions authorizing the
execution, delivery and performance of the transactions
contemplated by this amendment.
(iii) Parent signing below to confirm that the term "Obligations"
as defined and used in the Guaranty and Pledge Agreement executed
by Parent in favor of CITBC shall also include, without
limitation, all indebtedness, liabilities and obligations of the
Company to CITBC arising in connection with the Additional CAPEX
Term Loans.
(iv) Marshall Steel, Inc. ("Marshall") signing below to confirm
that the term "Obligations" as defined and used in the Guaranty,
Security Agreement and Negative Pledge Agreement executed by
Marshall in favor of CITBC shall also include, without
limitation, all present and future indebtedness, liabilities and
obligations of the Company to CITBC arising in connection with
the Additional CAPEX Term Loans.
(v) CITBC's receipt of title insurance and a current survey (in
form and substance satisfactory to CITBC) with respect to the
Real Estate to be subject to the Mortgages and/or Deeds of Trust
referred to in paragraph 8(f)(i).
(vi) The absence of any Event of Default under the Financing
Agreement.
(g) By signing below you confirm your agreement to (i) pay to us an
Accommodation and Documentation Fee equal to $28,750 in the
aggregate upon execution of this amendment, and (ii) reimburse us
for all of our Out-of-Pocket Expenses incurred in connection with
this amendment and the transactions contemplated hereby. All such
amounts may, at our option, be charged to your loan amount under
the Financing Agreement when due.
Except as set forth herein no other change in the terms or provisions of the
Financing Agreement is intended or implied. If the foregoing is in
accordance with your understanding, kindly so indicate by signing and
returning the enclosed copy of this letter.
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Parent and Marshall have signed below to confirm their respective agreements to
subparagraphs (iii) and (iv) of paragraph 8(f) above.
THE CIT GROUP/BUSINESS
CREDIT, INC.
By:
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Title:
Read and Agreed to:
SWVA, INC.
By:
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Title:
Confirmed:
STEEL OF WEST VIRGINIA, INC.
By:
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Title:
MARSHALL STEEL, INC.
By:
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Title:
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