Exhibit 10.1
INTERNATIONAL STEEL GROUP INC.
THIRD AMENDMENT TO
CREDIT AND GUARANTY AGREEMENT
This THIRD AMENDMENT TO CREDIT AND GUARANTY AGREEMENT, dated
as of March 21, 2004 (this "AMENDMENT"), is entered into by and among
INTERNATIONAL STEEL GROUP INC., a Delaware corporation (the "COMPANY"), ISG
ACQUISITION INC., ISG CLEVELAND INC., ISG HENNEPIN INC., ISG INDIANA HARBOR
INC., ISG WARREN INC., ISG RIVERDALE INC., ISG PLATE LLC (F/K/A ISG PLATE INC.),
ISG PIEDMONT LLC (F/K/A ISG PIEDMONT INC.), ISG BURNS HARBOR LLC (F/K/A ISG
BURNS HARBOR INC.), ISG SPARROWS POINT LLC (F/K/A ISG SPARROWS POINT INC.), ISG
STEELTON LLC (F/K/A ISG STEELTON INC.), and ISG LACKAWANNA LLC (F/K/A ISG
LACKAWANNA INC.) (each a "BORROWER" and collectively, the "BORROWERS"), the
CREDIT SUPPORT PARTIES listed on the signature pages hereto, the Lenders listed
on the signature pages hereto, UBS AG, STAMFORD BRANCH, as Administrative Agent
(together with its permitted successors in such capacity, "ADMINISTRATIVE
AGENT"), GOLDMAN SACHS CREDIT PARTNERS L.P., as Syndication Agent (in such
capacity, "SYNDICATION AGENT"), THE CIT GROUP/BUSINESS CREDIT, INC., as
Collateral Agent (together with its permitted successor in such capacity,
"COLLATERAL AGENT"), FLEET CAPITAL CORPORATION, as Co-Documentation Agent and
LASALLE BANK NATIONAL ASSOCIATION, as Co-Documentation Agent, and is made with
reference to that certain Credit and Guaranty Agreement, dated as of May 7, 2003
(as amended through the date hereof, the "CREDIT AGREEMENT"). Capitalized terms
used herein not otherwise defined herein or otherwise amended hereby shall have
the meanings ascribed thereto in the Credit Agreement.
RECITALS:
WHEREAS, the Company and the Borrowers have requested that the
Lenders agree to make amendments to certain provisions of the Credit Agreement
in connection with the Company's proposed purchase of substantially all of the
assets of Weirton Steel Corporation, FW Holdings, Inc. and Weirton Venture
Holdings Corporation, pursuant to that certain Amended and Restated Asset
Purchase Agreement dated as of February 25, 2004;
WHEREAS, the Lenders have agreed to amend certain provisions
of the Credit Agreement, in each case in the manner, and on the terms and
conditions, provided for herein.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION I. AMENDMENTS TO CREDIT AGREEMENT
Upon satisfaction of the conditions set forth in Section III herein,
the Credit Agreement shall be amended as follows in this Section I:
A. AMENDMENTS TO SECTION 1: DEFINITIONS
(i) The definitions of "CONSOLIDATED CAPITAL
EXPENDITURES", "PERMITTED ACQUISITION" and "LETTER OF CREDIT SUBLIMIT"
in Section 1.1 of the Credit Agreement are hereby amended and restated
in their entirety to read as follows:
"'CONSOLIDATED CAPITAL EXPENDITURES' means, for any
period, the aggregate of all expenditures of the Company and its
Subsidiaries during such period determined on a consolidated basis
that, in accordance with GAAP, are or should be included in "purchase
of property and equipment" or similar items reflected in the
consolidated statement of cash flows of the Company and its
Subsidiaries (other than any expenditures of the Company and its
Subsidiaries in connection with the Weirton Acquisition); provided,
that payments in respect of the lease between ISG Burns Harbor Inc., as
lessee, and DTE Burns Harbor, L.L.C., as lessor, of the No.1 coke
battery located at ISG Burns Harbor Inc.'s steel-making plant in the
town of Burns Harbor, Indiana shall not be deemed to be Consolidated
Capital Expenditures hereunder."
"'LETTER OF CREDIT SUBLIMIT' means the lesser of (i)
$100,000,000 and (ii) the aggregate unused amount of the Revolving
Commitments then in effect."
"'PERMITTED ACQUISITION' means any acquisition by the
Company or any of its wholly-owned Subsidiaries, whether by purchase,
merger or otherwise, of all or substantially all of the assets of, all
of the Capital Stock of, or a business line or unit or a division of,
any Person; provided,
(a) immediately prior to, and after giving effect
thereto, no Default or Event of Default shall have occurred and be
continuing or would result therefrom;
(b) all transactions in connection therewith shall be
consummated, in all material respects, in accordance with all
applicable laws and in conformity with all applicable Governmental
Authorizations;
(c) in the case of the acquisition of Capital Stock,
all of the Capital Stock (except for any such Securities in the nature
of directors' qualifying shares required pursuant to applicable law)
acquired or otherwise issued by such Person or any newly formed
Subsidiary of the Company in connection with such acquisition shall be
owned 100% by the Company and/or one or more Guarantor Subsidiaries
thereof, and the Company shall have taken, or caused to be taken, as of
the date such Person becomes a Subsidiary of the Company, each of the
actions set forth in Sections 5.10, as applicable;
2
(d) the Company and its Subsidiaries shall be in
compliance with the financial covenants set forth in Section 6.8 on a
pro forma basis after giving effect to such acquisition as of the last
day of the Fiscal Quarter most recently ended, for which financial
statements have been delivered pursuant to Section 5.1(b) or Section
5.1(c) (as determined in accordance with Section 6.8(f)); provided,
that with respect to the Weirton Acquisition, the Company shall only be
required to demonstrate pro forma compliance with the financial
covenants set forth in Section 6.8 in accordance with the modified pro
forma compliance statements delivered to the Administrative Agent and
the Lenders on the Third Amendment Effective Date;
(e) the Company shall have delivered to
Administrative Agent at least fifteen (15) Business Days prior to such
proposed acquisition, a Compliance Certificate evidencing compliance
with Section 6.8 as required under clause (d) above, together with all
relevant financial information with respect to such acquired assets,
including, without limitation, the aggregate consideration for such
acquisition and any other information required to demonstrate
compliance with Section 6.8; and
(f) any Person or assets or division as acquired in
accordance herewith (y) shall be in substantially the same business or
lines of business in which the Company and/or its Subsidiaries are
engaged in as of the Closing Date or that are related or complimentary
thereto (other than the coal mine business) and (z) shall have
generated positive cash flow for the four quarter period most recently
ended prior to the date of such acquisition.
Notwithstanding any of the foregoing to the contrary, it is understood
and agreed that the Company shall not be required to comply with the
requirements set forth in clauses (e) and (f)(z) above with respect to
the Weirton Acquisition."
(ii) Section 1.1 of the Credit Agreement is hereby
further amended by adding the following definitions in proper
alphabetical sequence:
"'ISG WEIRTON' means ISG Weirton Inc., a Delaware
corporation."
"'THIRD AMENDMENT' means that certain Third Amendment
and Limited Waiver to Credit and Guaranty Agreement dated as of March
[__], 2003, among the Company, Borrowers, Administrative Agent,
Syndication Agent, Collateral Agent, Documentation Agent and the
financial institutions and the Credit Support Parties listed on the
signature pages thereto."
"'THIRD AMENDMENT EFFECTIVE DATE' means the Third
Amendment Effective Date, as defined in the Third Amendment."
"'WEIRTON ACQUISITION' means ISG Weirton's purchase
of substantially all of the assets of Weirton Steel Corporation, FW
Holdings, Inc. and Weirton Venture Holdings Corporation."
3
B. AMENDMENTS TO SECTION 5: AFFIRMATIVE COVENANTS
(i) Section 5 of the Credit Agreement is hereby
amended by deleting Section 5.10(a) in its entirety and replacing it
with the following:
"(a) Domestic Subsidiaries. In the event that any
Person becomes a Domestic Subsidiary of the Company (other than a
Specified Subsidiary), the Company shall (i) promptly cause such
Domestic Subsidiary to become a Guarantor hereunder and a Grantor under
the Pledge and Security Agreement by executing and delivering to
Administrative Agent and Collateral Agent a Counterpart Agreement, and
(ii) take all such actions and execute and deliver, or cause to be
executed and delivered, all such documents, instruments, agreements,
and certificates as are similar to those described in Sections 3.1(b),
3.1(h), 3.1(j) and 3.1(m); provided that, if any such Person becomes a
material operating Subsidiary of the Company, it shall become a
"Borrower" hereunder, pursuant to the execution and delivery of a
joinder agreement in form and substance reasonably acceptable to each
Agent, directly by as well as complying with (ii) above; provided,
further, that notwithstanding any of the foregoing to the contrary, any
Subsidiaries acquired or created in connection with the Weirton
Acquisition (including ISG Weirton) shall only be required to become
Guarantors hereunder and shall upon the acquisition or creation of such
Subsidiaries (or promptly thereafter) cause each such Subsidiary to
become a Guarantor hereunder and a Grantor under the Pledge and
Security Agreement by executing and delivering to the Administrative
Agent and Collateral Agent a Counterpart Agreement."
(ii) Section 5 of the Credit Agreement is hereby
further amended by deleting Section 5.11 in its entirety and replacing
it with the following:
"5.11. [RESERVED.]"
(iii) Section 5 of the Credit Agreement is hereby
further amended to add the following paragraph at the conclusion of
Section 5.15:
"Notwithstanding any of the foregoing to the
contrary, none of the Company, ISG Weirton or any other Subsidiary of
the Company shall be required to comply with the requirements set forth
in this Section 5.15 in connection with the Weirton Acquisition."
C. AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS
Section 6 of the Credit Agreement is hereby amended
to delete Section 6.1(i) in its entirety and replace it with the
following:
"(i) Indebtedness incurred by the Company or any of
its Subsidiaries, including any guaranties by the Company's
Subsidiaries of such Indebtedness incurred by the Company; provided,
that, (i) such Indebtedness shall only be secured by Liens permitted
pursuant to Section 6.2(o) hereof, (ii) any such Indebtedness shall
have a
4
maturity date no earlier than six (6) months after the Tranche B Term
Loan Maturity Date (provided that if such Indebtedness is used to
prepay the Tranche B Term Loans in full, then such maturity date shall
be no earlier than six (6) months after the Revolving Commitment
Termination Date), (iii) such Indebtedness shall not provide for any
scheduled payment or mandatory prepayment of principal earlier than six
(6) months after the Tranche B Term Loan Maturity Date (provided that
if such Indebtedness is used to prepay the Tranche B Term Loans in
full, then such Indebtedness shall not provide for any scheduled or
mandatory prepayment of principal earlier than six (6) months after the
Revolving Commitment Termination Date), (iv) such Indebtedness shall
not cross-default to other Indebtedness (but may cross-accelerate), (v)
interest rate and other terms shall be reasonably acceptable to the
Administrative Agent and Syndication Agent, and (vi) no Default or
Event of Default shall have occurred and be continuing as of the date
of incurrence, provided further, that the entire net cash proceeds
thereof shall be used by to repay Loans outstanding hereunder and
applied in accordance with Section 2.15(b) of this Agreement;"
SECTION II. CONDITIONS PRECEDENT TO EFFECTIVENESS
The amendments set forth in Section I hereof shall be
effective on and as of the date hereof (the "THIRD AMENDMENT EFFECTIVE DATE")
upon the satisfaction, or waiver by the Requisite Lenders, on or after the date
hereof, of the following conditions:
(i) The Company, the Borrowers, the other Credit
Parties and the Requisite Lenders shall have indicated their consent by
the execution and delivery of the signature pages hereof to the
Administrative Agent.
(ii) The Administrative Agent shall have received a
certificate from the Company, certifying that as of the Third Amendment
Effective Date, the representations and warranties contained in Section
III herein and in the other Credit Documents are true and correct in
all material respects on and as of the Third Amendment Effective Date
to the same extent as though made on and as of the Third Amendment
Effective Date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties are true and correct in all material
respects on and as of such earlier date.
(iii) The Administrative Agent shall have received a
certificate from the Company, certifying that as of the Third Amendment
Effective Date (after giving effect to the amendments contained
herein), no event shall have occurred and be continuing that would
constitute an Event of Default or a Default.
(iv) The Administrative Agent and Lenders shall have
received such other documents and information regarding Credit Parties
and the Credit Agreement as the Administrative Agent or Lenders may
have reasonably requested prior to the date hereof.
5
SECTION III. REPRESENTATIONS AND WARRANTIES
A. CORPORATE POWER AND AUTHORITY. Each Credit Party has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, this Amendment.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
Amendment has been duly authorized by all necessary corporate or partnership (as
applicable) action on the part of each Credit Party.
C. BINDING OBLIGATION. This Amendment has been duly executed and
delivered by each Credit Party and constitutes a legal, valid and binding
obligation of each Credit Party enforceable against each Credit Party in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
D. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
DOCUMENTS. The representations and warranties contained in the Credit Documents
are and will be true and correct in all material respects on and as of the Third
Amendment Effective Date (after giving effect to the amendments and waivers
contained herein) to the same extent as though made on and as of that date,
except to the extent such representations and warranties specifically relate to
an earlier date, in which case they were true and correct in all material
respects on and as of such earlier date.
E. ABSENCE OF DEFAULT. No event has occurred and is continuing (after
giving effect to the amendments and waivers contained herein) or will result
from the consummation of the transactions contemplated by this Amendment that
would constitute an Event of Default or a Default.
SECTION IV. ACKNOWLEDGMENT AND CONSENT
Each of the Company, each wholly-owned Domestic Subsidiary of
the Company (other than the Borrowers and the Specified Subsidiaries) and ISG
Real Estate Inc. has (i) guaranteed the Obligations and (ii) (other than ISG
Real Estate Inc.) created Liens in favor of Lenders on the Collateral to secure
the Obligations subject to the terms and provisions of the Credit Agreement.
Each of the Company, ISG Real Estate Inc., and each wholly-owned Domestic
Subsidiary of the Company who has guaranteed the Obligations are collectively
referred to herein as the "CREDIT SUPPORT PARTIES", and the Credit Agreement and
the Collateral Documents are collectively referred to herein as the "CREDIT
SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has
reviewed the terms and provisions of the Credit Agreement and this Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Amendment. Each Credit Support Party hereby confirms that each Credit Support
Document to which it is a party or otherwise bound and all Collateral encumbered
thereby will continue to guarantee or secure, as the case may be, to the fullest
extent possible in accordance with and subject to the Credit Support Documents
the
6
payment and performance of all "Obligations" under each of the Credit Support
Documents, as the case may be (in each case as such terms are defined in the
applicable Credit Support Document), including without limitation the payment
and performance of all such "Obligations" under each of the Credit Support
Documents, as the case may be, in respect of the Obligations of the Company now
or hereafter existing under or in respect of the Credit Agreement and hereby
pledges and assigns to the Collateral Agent, and grants to the Collateral Agent
a continuing lien on and security interest in and to all Collateral as
collateral security for the prompt payment and performance in full when due of
the "Obligations" under each of, and in accordance with and subject to, the
Credit Support Documents to which it is a party (whether at stated maturity, by
acceleration or otherwise).
Each Credit Support Party acknowledges and agrees that all of
the Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Credit Agreement, this Amendment and the Credit Support Documents to which it is
a party or otherwise bound are true and correct in all material respects on and
as of the Third Amendment Effective Date to the same extent as though made on
and as of the Third Amendment Effective Date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party (other than the Company) is not required by the terms
of the Credit Agreement or any other Credit Document to consent to the
amendments to the Credit Agreement effected pursuant to this Amendment and (ii)
nothing in the Credit Agreement, this Amendment or any other Credit Document
shall be deemed to require the consent of such Credit Support Party (other than
the Company) to any future amendments to the Credit Agreement.
SECTION V. MISCELLANEOUS
A. BINDING EFFECT. This Amendment shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder or any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders.
B. SEVERABILITY. In case any provision in or obligation hereunder shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
C. REFERENCE TO CREDIT AGREEMENT. On and after the Third Amendment
Effective Date, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the
7
other Credit Documents to the "Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended by this Amendment.
D. EFFECT ON CREDIT AGREEMENT. Except as specifically amended by this
Amendment, the Credit Agreement and the other Credit Documents shall remain in
full force and effect and are hereby ratified and confirmed.
E. EXECUTION. The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of any Agent
or Lender under, the Credit Agreement or any of the other Credit Documents.
F. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
G. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
H. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. As set forth herein, this Amendment shall become effective upon
the execution of a counterpart hereof by each of the parties hereto and receipt
by the Administrative Agent and the Syndication Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
8
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
COMPANY INTERNATIONAL STEEL GROUP INC.
By: /s/ Rodney Mott
_________________________________
Name: Rodney Mott
Title: President
BORROWERS ISG ACQUISITION INC.
ISG CLEVELAND INC.
ISG HENNEPIN INC.
ISG INDIANA HARBOR INC.
ISG WARREN INC.
ISG RIVERDALE INC.
ISG PLATE LLC
ISG PIEDMONT LLC
ISG BURNS HARBOR LLC
ISG SPARROWS POINT LLC
ISG STEELTON LLC
ISG LACKAWANNA LLC
By: /s/ Rodney Mott
_________________________________
Name: Rodney Mott
Title: President
CREDIT SUPPORT PARTIES
ISG RAILWAYS INC.
ISG/EGL HOLDING COMPANY
ISG CLEVELAND WORKS RAILWAY COMPANY
ISG SOUTH CHICAGO & INDIANA HARBOR RAILWAY COMPANY
ISG VENTURE INC.
ISG SALES INC.
ISG CLEVELAND WEST INC.
ISG CLEVELAND WEST PROPERTIES INC.
ISG TECHNOLOGIES INC.
ISG REAL ESTATE INC.
ISG HIBBING INC.
HIBBING TACONITE HOLDING INC.
ISG PLATE SERVICES LLC
ISG SPARROWS POINT SERVICES LLC
ISG BURNS HARBOR SERVICES LLC
ISG LACKAWANNA SERVICES LLC
ISG STEELTON SERVICES LLC
By: /s/ Rodney Mott
_________________________________
Name: Rodney Mott
Title: President
ADMINISTRATIVE AGENT AND
ISSUING BANK UBS AG, STAMFORD BRANCH
By: /s/ Wilfred V. Saint
_________________________________
Name: Wilfred V. Saint
Title: Director
Banking Products Services, US
By: /s/ Juan Zuniga
_________________________________
Name: Juan Zuniga
Title: Associate Director
Banking Products Services, US
LENDER AND SWING LINE LENDER UBS AG, CAYMAN ISLANDS BRANCH
By: /s/ Wilfred V. Saint
_________________________________
Name: Wilfred V. Saint
Title: Director
Banking Products Services, US
By: /s/ Juan Zuniga
_________________________________
Name: Juan Zuniga
Title: Associate Director
Banking Products Services, US
JOINT LEAD ARRANGER, JOINT
BOOKRUNNER, SYNDICATION AGENT
AND A LENDER GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ Elizabeth Fischer
_________________________________
Name: Elizabeth Fischer
Title: Authorized Signatory
COLLATERAL AGENT THE CIT GROUP/BUSINESS CREDIT,
AND A LENDER INC.
By: /s/ George Louis McKinley
_________________________________
Name: George Louis McKinley
Title: Vice President
CO-DOCUMENTATION AGENT
AND A LENDER FLEET CAPITAL CORPORATION
By: /s/ Michael Kerneklian
_________________________________
Name: Michael Kerneklian
Title: Vice President
CO-DOCUMENTATION AGENT LASALLE BANK NATIONAL
AND A LENDER ASSOCIATION
By: /s/ Keith J. Cable
_________________________________
Name: Keith J. Cable
Title: Vice President