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Exhibit 4.2
AMENDMENT dated of as of July 31, 1997, to the Amended and
Restated Credit Agreement dated as of August 16, 1988, as
amended and restated as of April 30, 1996 (the "Credit
Agreement"), among NORTHWESTERN STEEL AND WIRE COMPANY (as
successor, by merger, to NW Acquisition Corporation), an
Illinois corporation ("NWS"), NORTHWESTERN STEEL AND WIRE
COMPANY (formerly known as H/N Steel Company, Inc.), a
Texas corporation and a direct, wholly owned subsidiary of
NWS (together with NWS, the "Borrowers"), the Lenders (as
defined in Article I of the Credit Agreement), and THE
CHASE MANHATTAN BANK (formerly Chemical Bank), a New York
banking corporation, as issuing bank, as administrative
agent for the Lenders (in such capacity, the
"Administrative Agent") and as collateral agent for the
Lenders.
A. Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement, as amended hereby.
B. The parties hereto have agreed to amend certain provisions of the
Credit Agreement as set forth herein.
Accordingly, in consideration of the mutual agreements herein contained
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments. (a) Article I of the Credit Agreement is hereby
amended by the addition of the following definition in the appropriate
alphabetical position:
"Houston Closure Charges" shall mean the charges of the
approximately $64,000,000 (after tax) recorded by NWS in the fiscal
quarter ended July 31, 1997, in connection with the closure of the
Houston Facility.
(b) Article I of the Credit Agreement is further amended by inserting in
the proviso to the definition of "Adjusted Stockholders' Equity", after the
words "without giving effect to", the words "(a) the Houston Closure Charges
and (b)".
(c) Article I of the Credit Agreement is further amended by inserting at
the end of the definition of "Consolidated Cash Flow Available for Fixed
Charges" the following proviso: "; provided that, for purposes of determining
compliance with Section 6.15 (but not for purposes of determining the
Applicable Margin), "Consolidated Cash Flow Available for Fixed Charges" shall
be determined without giving effect to the Houston Closure Charges."
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(d) Section 6.15 of the Credit Agreement is hereby amended by replacing
the ratio of "2.0 to 1" with the following: "(a) 1.75 to 1.0, as of the end of
the fiscal quarters ending (i) July 31, 1997 and (ii) October 31, 1997, (b)
1.85 to 1.0, as of the end of the fiscal quarter ending January 31, 1998, (c)
1.95 to 1.0, as of the end of the fiscal quarter ending April 30, 1998, or (d)
2.0 to 1.0, as of the end of any fiscal quarter ending on or after July 31,
1998."
SECTION 2. Representations and Warranties. The Borrowers represent and
warrant to each of the Lenders that:
(a) The representations and warranties set forth in the Loan
Documents after giving effect to this Amendment are true and correct in
all material respects with the same effect as if made on the date hereof,
except to the extent such representations and warranties expressly relate
to an earlier date.
(b) NWS and its Subsidiaries after giving effect to this Amendment
are in compliance in all material respects with all the terms and
provisions continued in the Credit Agreement and in the other Loan
Documents required to be observed or performed.
(c) After giving effect to this Amendment, no Event of Default or
event which with notice or lapse of time or both would constitute an
Event of Default has occurred and is continuing.
SECTION 3. Amendment Fee. The Borrowers agree to pay to the
Administrative Agent, for the account of each Lender that executes and delivers
to the Administrative Agent (or its counsel) a counterpart of this Amendment,
an amendment fee equal to 0.25% multiplied by the sum of such Lender's
outstanding Rollover Term Loans and Revolving Credit Commitment (calculated
after giving effect to the reduction of Revolving Credit Commitments
contemplated by Section 4 of this Amendment); provided that the Borrowers shall
not be required to pay such amendment fee (i) to any Lender that has not so
executed and delivered a counterpart of this Amendment on or before September
12, 1997, or (ii) to any Lender unless and until this Amendment becomes
effective. Such amendment fees shall be due and payable (a) at the time that
this Amendment becomes effective, with respect to each Lender that is entitled
to receive an amendment fee at such time, or (b) within two Business Days after
such Lender executes and delivers a counterpart of this Amendment entitling it
to receive such amendment fee, in the case of each other Lender.
SECTION 4. Reduction of Revolving Credit Commitments. The Borrowers
hereby irrevocably elect to permanently reduce the Revolving Credit
Commitments, as provided in Section 2.10(a) of the Credit Agreement, to an
aggregate principal amount of $80,000,000, effective upon the effectiveness of
this Amendment. Such reduction shall be effective upon the effectiveness of
this Amendment without the necessity of any further notice under Section
2.10(a) of the Credit Agreement.
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SECTION 5. Conditions to Effectiveness. This Amendment shall become
effective as of July 31, 1997 only when each of the following conditions has
been satisfied: (a) The Administrative Agent (or its counsel) shall have
received counterparts of this Amendment which, when taken together, bear the
signatures of the Borrowers and the Required Lenders (delivery of an executed
counterpart by telecopy being effective as manual delivery); (b) the
Administrative Agent shall have received payment for the account of each Lender
then entitled thereto of the amendment fees payable under Section 3 of this
Amendment; and (c) the Administrative Agent shall have received payment for the
account of the Lenders whose Revolving Credit Commitments are reduced as
provided in Section 4 of this Amendment of the Commitment Fees on the amount of
the Revolving Credit Commitments so reduced accrued to but excluding the date
on which this Amendment becomes effective. The Administrative Agent shall
notify the Borrowers and the Lenders when this Amendment becomes effective.
SECTION 6. Applicable Law. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. Agreement. Except as expressly set forth herein, the Credit
Agreement shall continue in full force and effect in accordance with the terms
and provisions thereof on the date hereof.
SECTION 8. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers as of the day and year first written
above.
NORTHWESTERN STEEL AND WIRE COMPANY, an
Illinois corporation,
by Timothy J. Bondy
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Name: Timothy J. Bondy
Title: Vice President
NORTHWESTERN STEEL AND WIRE COMPANY, a Texas
corporation,
by Timothy J. Bondy
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Name: Timothy J. Bondy
Title: Vice President
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THE CHASE MANHATTAN BANK, in its capacity as a
Lender and as Administrative Agent, collateral
agent and issuing bank,
by Michael D. Peist
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Name: Michael D. Peist
Title: Vice President
HSBC BUSINESS LOANS, INC.,
by John P. Northington
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Name: John P. Northington
Title: Vice President
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.,
by Anthony R. Clemente
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Name: Anthony R. Clemente
Title: Authorized Signatory
MITSUI NEVITT CAPITAL CORP.,
by Yuichi Kamizawa
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Name: Yuichi Kamizawa
Title: Vice President
THE TRAVELERS INSURANCE COMPANY,
by John Petchler
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Name: John Petchler
Title: Second Vice President
THE TRAVELERS INDEMNITY COMPANY,
by John Petchler
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Name: John Petchler
Title: Second Vice President
THE PHOENIX INSURANCE COMPANY,
by John Petchler
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Name: John Petchler
Title: Second Vice President
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THE TRAVELERS INSURANCE COMPANY (AS TO
SEPARATE ACCOUNT D),
by John Petchler
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Name: John Petchler
Title: Second Vice President
HELLER FINANCIAL, INC.,
by Patrick Hayes
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Name: Patrick Hayes
Title: Vice President
SOCIETE GENERALE,
by John J. Wagner
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Name: John J. Wagner
Title: Vice President
BANK OF AMERICA NT & SA,
by Paul A. O'Mara
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Name: Paul A. O'Mara
Title: Senior Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE,
by:
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Name:
Title: