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Exhibit 4.6
SECOND AMENDMENT TO CREDIT AGREEMENT
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THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of May 30,
1997, (this "Second Amendment"), is by and among OLYMPIC STEEL, INC., an Ohio
corporation ("Borrower"), and NATIONAL CITY BANK ("NCB") and the other Banks
signatory hereto or that become parties to the Credit Agreement hereafter
identified by amendment or supplement thereto ("Banks") and NATIONAL CITY BANK,
as agent for the Banks (in that capacity, "NCB-Agent").
RECITALS
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A. Borrower, the Banks and NCB-Agent have entered into a
Credit Agreement, dated as of October 4, 1996 (the "Agreement"), pursuant to
which Borrower may obtain, among other things, (i) loans ratably from the Banks
that are on a revolving credit basis and (ii) subject LCs issued by NCB in which
the Banks agree to ratably share the obligations in respect thereof, in each
case until the expiration date.
B. Borrower, the Banks and NCB-Agent have entered into the
First Amendment to Credit Agreement, dated as of January 24, 1997 (the "First
Agreement"), in order to increase the amount of the commitments by the Banks for
subject revolving credit loans and additional subject LCs by Ten Million Dollars
($10,000,000) and to permit Borrower to make certain joint venture investments
and guarantees of indebtedness of the joint venture entities.
C. Borrower, the Banks and NCB-Agent desire to again amend the
Agreement by this Second Amendment to Credit Agreement (the "Second Amendment")
in order to increase the amount of the commitments by the Banks for subject
revolving credit loans and additional subject LCs by Eight Million Dollars
($8,000,000), to add a commitment by Banks for new Series A term loans in the
amount of Seventeen Million Dollars ($17,000,000), to permit certain borrowing
from other lenders, to permit the Borrower to allow certain of its property to
become encumbered by liens in favor of other lenders and to extend the
expiration date to June 30, 2000.
AGREEMENT
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Accordingly, the parties have agreed and do hereby agree as
follows:
1. Clause (a)(i) of section 1B SUMMARY OF THE AGREEMENT shall be
deleted in its entirety and the following shall be inserted in place thereof:
(i) subject loans ratably from the Banks that are either
on a revolving credit basis or a term loan basis and
2. Subsection 2A.01 SUBJECT REVOLVING LOANS AND LETTERS OF CREDIT
AMOUNTS of the Agreement shall be deleted in its entirety and the following
shall be substituted in place thereof:
2A.01 SUBJECT REVOLVING CREDIT LOANS AND LETTERS OF CREDIT
AMOUNTS -- The aggregate amount of the commitments by the Banks for
subject revolving credit loans and additional subject LCs shall be
Sixty-Eight Million Dollars ($68,000,000). The aggregate amount of the
subject commitments for additional subject LCs shall not exceed Five
Million Dollars ($5,000,000). The aggregate amount of the subject
commitments for the subject revolving credit loans and additional
subject
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LCs may be reduced from time to time pursuant to subsection 2A.03 and
the subject commitments may be terminated pursuant to Section 5B. The
aggregate amount of the subject commitments by the Banks for existing
subject LCs as of May 30, 1997 is Nine Million, Eight Hundred Forty
Thousand, Eight Hundred Thirty-Six Dollars ($9,840,836) but that amount
may be reduced from time to time pursuant to subsection 2A.03 and the
subject commitments may be terminated pursuant to Section 5B. The
amount of each Bank's subject commitment to make subject revolving
credit loans to Borrower and to participate in respect of additional
subject LCs and existing subject LCs (subject to such reduction or
termination), and the proportion (expressed as a percentage) that it
bears to all of the subject commitments, is set forth opposite the
Bank's name on SCHEDULE 2A.01 hereto dated May 30, 1997.
3. The Agreement is amended by adding the following a new subsection
2A.01.1 SERIES A TERM LOANS immediately following subsection 2A.01 thereof:
2A.01.1 SERIES A TERM LOANS-- (a) The aggregate amount of the
series A subject term loans shall be an amount up to, but not
exceeding, Seventeen Million Dollars ($17,000,000). The series A
subject term loans shall be made and disbursed not more frequently than
once each calendar month and the aggregate amount thereof shall not
exceed eighty percent (80%) of costs reasonably incurred and paid by
Borrower for construction of a temper mill facility in Bettendorf, Iowa
(the "Iowa Mill Project"). With each request for a series A subject
term loan advance, Borrower shall submit to NCB-Agent evidence of such
costs so incurred and paid and such other information as NCB-Agent may
request with respect to the Iowa Mill Project including, without
limitation, the estimated cost of completing the same. The subject
commitments for any amount of the series A subject term loans not
disbursed on or before December 30, 1998 shall automatically and
immediately expire on December 31, 1998 without any notice to Borrower.
(b) Beginning May 30, 1999, the outstanding principal amount
of the series A subject term loans shall be reduced annually prior to
the expiration date by an amount equal to ten percent (10%) of the
aggregate amount thereof outstanding and disbursed prior to December
31, 1998 (for example, if the aggregate amount of the series A subject
term loans disbursed is $17,000,000, then the amount of each principal
reduction prior to the expiration date shall be $1,700,000). A
principal payment of the series A subject term loans shall be made on
each May 30 commencing on May 30, 1999 with a final payment of the
entire outstanding amount of the series A subject term loans being due
and payable on the expiration date.
(c) The amount of each Bank's subject commitment to make
series A subject term loans (which is subject to termination pursuant
to Section 5B), and the proportion (expressed as a percentage) that it
bears to all of the subject commitments relating thereto is set forth
opposite the Bank's name below.
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Bank Series A Subject Term Loan Percentage
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National City Bank $6,800,000 40%
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Mellon Bank, N.A. $5,100,000 30%
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Comerica Bank $5,100,000 30%
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Total $17,000,000 100%
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(d) Anything contained in this subsection 2A.01.1 to the
contrary notwithstanding, no term loan shall be made or disbursed by
any of the Banks prior to compliance by Borrower with the conditions
set forth in section 2B of this Agreement.
4. Subsection 2A.02 TERM of the Credit Agreement shall be deleted in
its entirety and the following shall be substituted in place thereof:
2A.02 TERM -- The portion of the subject commitment created by
the Agreement prior to amendment, the First Amendment and the Second
Amendment has or shall become effective as of the date of the initial
Agreement, the date of the First Amendment and the date of the Second
Amendment, respectively, and the subject commitment in the aggregate
shall remain in effect until June 30, 2000 (the "expiration date")
EXCEPT that (i) a later expiration date may be established from time to
time pursuant to subsection 2A.05, (ii) the subject commitments shall
end in any event upon any earlier reduction thereof to zero pursuant to
subsection 2A.03 or any earlier termination pursuant to Section 5B,
(iii) the commitment relating to any existing LC shall remain in effect
until the stated expiration date thereof, even if such date is later
than the expiration date; and (iv) the commitments for the series A
subject term loans not disbursed on or prior to December 30, 1998 will
expire automatically and immediately on December 31, 1998. The series A
term loans shall be disbursed pursuant to subsection 2A.01.1(a).
5. Subsection 2A.03 OPTIONAL REDUCTIONS of the Agreement shall be
deleted in its entirety and the following shall be substituted in place thereof:
2A.03 OPTIONAL REDUCTIONS -- Borrower shall have the right, at
all times and without the payment of a premium, to permanently reduce
the subject commitments for either the (i) subject revolving credit
loans and/or (ii) the subject term loans, in whole or in part, by
giving NCB-Agent notice in the form of EXHIBIT 2A.03 attached hereto
(to be given not later than 12:00 noon of the Banking day next
preceding the effective date of the reduction and either to be given in
writing or to be promptly confirmed in writing) of the aggregate amount
by which the subject commitments are to be reduced and the effective
date thereof.
(a) No such reduction shall reduce any Bank's subject
commitment to a lesser amount than the difference of:
(1) that Bank's subject commitment as in
effect at that time less
(2) the aggregate unpaid principal balance
of that Bank's subject loans then
outstanding and its ratable share of any
outstanding subject LCs.
(b) Each such reduction of the subject commitments
shall aggregate Five Hundred Thousand Dollars ($500,000) or
any multiple thereof.
(c) Each reduction shall be allocated ratably among
the subject commitments.
(d) Concurrently with each reduction Borrower shall
make a principal payment on each Bank's subject loans then
outstanding in a principal amount equal to the excess, if any,
of the then aggregate unpaid principal balance of that Bank's
subject loans over that Bank's subject commitment as so
reduced. Subsection 2B.11 and Section 6C shall apply to each
such prepayment.
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6. Subsection 2A.04 COMMITMENT FEE of the Agreement shall be deleted in
its entirety and the following shall be substituted in place thereof:
2A.04 COMMITMENT FEE -- Each Bank shall, so long as its
subject commitment remains in effect, earn a commitment fee
(a) based on the average daily difference between the
amount of that Bank's subject commitment for revolving credit
loans, term loans and additional subject LCs from time to time
in effect and the then aggregate unpaid principal balance of
the subject revolving credit loans and term loans then owing
to that Bank and the outstanding amount of additional subject
LCs,
(b) computed at the rate of one-fourth of one percent
(1/4%) per annum and
(c) payable in arrears by Borrower to NCB-Agent for
the account of the Banks quarterannually as of the last
business day of March, June, September and December and at the
end of the subject commitment.
7. The introductory paragraph of section 2B SUBJECT LOANS, subsection
2B.01 SUBJECT NOTES and subsection 2B.02 LOAN MIX of the Agreement shall be
deleted in their entirety and the following shall be substituted in place
thereof:
2B. SUBJECT LOANS -- Each Bank (for itself only and not for
the others) agrees, subject to the conditions of this Agreement, that
so long as that Bank's subject commitment remains in effect, it will
grant Borrower the subject loans up to the amounts specified to be
loaned by it in subsections 2A.01 and 2A.01.1 pursuant to this
Agreement as Borrower may from time to time request; PROVIDED, however,
that each Bank's obligations to make the subject term loans shall arise
only when (and not before) Borrower has complied or caused compliance
with each of the following conditions:
(a) Borrower shall have executed and delivered the
environmental indemnity agreement to be executed and delivered
pursuant to subsection 2EE.03.
(b) Borrower shall have caused to be delivered to
NCB-Agent such a policy of title insurance or a commitment
therefor or endorsements thereto with respect to the land and
buildings of Borrower to be subject to a mortgage securing the
subject term loans and in such amount as the Banks may
reasonably require.
(c) Borrower shall have executed and delivered the
security documents to be executed and delivered pursuant to
subsection 2EE.02 and such documents, including all of the
mortgages required by such subsection, shall have been filed
for record.
(d) Borrower's counsel shall have rendered to each
Bank a written opinion in respect of the matters referred to
in subsections 4B.01, 4B.02, 4B.03 and 4B.04 as the same
relate to the portions of this Second Amendment and the
Agreement as so amended that relate to the subject term loans
and the documents to be or previously delivered to NCB-Agent
or the Banks pursuant to this Second Amendment, in form and
substance satisfactory to each Bank.
(e) Borrower shall have obtained a phase I
environmental report with respect to the land that is to be
part of the Iowa Mill Project from a qualified
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environmental expert acceptable to the Banks and shall have
delivered such report to NCB-Agent.
2B.01 SUBJECT NOTES -- Each Bank's subject revolving credit
loan and participation in respect of additional subject LCs and
existing subject LCs shall be evidenced by subject notes executed and
delivered by Borrower, payable to the order of that Bank aggregating in
the principal amount equal to the dollar amount of that Bank's
aggregate subject commitment therefor set forth in Section 2A.01. Each
subject note shall be in the form and substance of EXHIBIT 2B.01 with
the blanks appropriately filled. Each of the subject term loans by each
Bank shall be evidenced by a separate subject note executed and
delivered by Borrower, payable to the order of the Bank in principal
amount equal to the dollar amount of the Bank's subject commitment
therefor; each such note shall be in form and substance of EXHIBIT
2B.01T with the blanks appropriately filled.
(a) Whenever Borrower obtains a series of subject
loans pursuant to this Agreement, each Bank shall
make an appropriate entry into a loan account
maintained in that Bank's books and records. Each
entry shall be prima facie evidence of the data so
entered; but such entries shall not be a condition to
Borrower's obligation to pay.
(b) No holder of any subject note shall transfer a
subject note, or seek a judgment or file a proof of
claim based on a subject note without in each case
first endorsing the subject note to reflect the true
amount owing thereon.
2B.02 LOAN MIX -- The subject loans at any one time
outstanding shall consist of prime rate loans or LIBOR loans or any
combination thereof as Borrower may from time to time duly elect;
PROVIDED, that the subject term loans shall at all times consist of
only prime rate loans or only LIBOR loans.
8. The first sentence of subsection 2B.07(a) is amended by adding the
words "and term loans" immediately following the words "revolving credit loans".
9. The Agreement is amended by adding the following new section 2EE
immediately following section 2E thereof:
2EE. SECURITY FOR SUBJECT TERM LOANS -- The subject term loans shall be
secured in accordance with the following:
2EE.01 SUBJECT TERM LOANS -- Payment of the subject term loans
shall be secured by a first priority lien and security interest in all
of Borrower's land, buildings and equipment located in Bettendorf,
Iowa.
2EE.02 SECURITY DOCUMENTS -- Borrower agrees to execute and
deliver to NCB-Agent such mortgages, security agreements, UCC financing
statements and other documents to effect the provisions of Section 2EE
as NCB-Agent, or a majority of the Banks, may from time to time
reasonably request including, without limitation, such as are
identified on EXHIBIT 2EE.02. Borrower agrees to pay the reasonable and
necessary out of pocket expenses of NCB-Agent incurred with the filing
and perfection of the security interests and liens to be granted
pursuant to this Section 2EE.
2EE.03 ENVIRONMENTAL INDEMNITY -- Borrower agrees to execute
and deliver to NCB-Agent an agreement protecting the Banks and
NCB-Agent from liability
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for environmental claims relating to the property subject to mortgages
that are to secure the subject term loans. Such agreement shall be in
form and substance reasonably satisfactory to the Banks and NCB-Agent.
10. The Agreement is amended by adding the following section 2FF
immediately following section 2F thereof:
2FF. GUARANTY OF SUBSIDIARIES OF SUBJECT TERM LOANS.
2FF.01 OSLI AND OSMI GUARANTY OF PAYMENT OF SUBJECT TERM LOANS
-- Borrower shall cause its wholly-owned subsidiaries, OSLI and OSMI,
to unconditionally guarantee payment of the subject term loans pursuant
to a guaranty of payment, through a supplement to the subject guaranty
in the form attached hereto as EXHIBIT 2FF.01S, executed and delivered
to the Banks by OSLI and OSMI and pursuant to such additional
supplements to the subject guarantee as NCB-Agent may require with
respect to increases in the subject commitments for the subject
revolving credit and term loans.
11. Subsection 3D.02 BORROWINGS of the Agreement shall be deleted in
its entirety and the following shall be substituted in place thereof:
3D.02 BORROWINGS -- Borrower will not, nor permit OSLI or OSMI
to create, assume or have outstanding at any time any indebtedness for
borrowed money (or become a guarantor in respect to any indebtedness
for borrowed money) the incurrence of which would create a default
under this Agreement, including, without limitation, a default under
section 3B.01 or 3B.02.
12. Subprovision (c) of subsection 3D.03 LIENS of the Credit Agreement
is amended by deleting the word "or" at the end of item (ix) thereof,
substituting ", or" for the period at the end of item (x) thereof and adding the
following new item (xi) immediately following item (x) thereof:
(xi) any mortgage, security interest or other lien that is
confined to real property or equipment that is not
already encumbered by a lien in favor of the Banks
and the value of which in the aggregate, excluding
any such property or equipment that secures any
indebtedness in respect of leases. does not at any
time exceed twenty-five percent (25%) of the net
worth of Borrower less the amount of Borrower's
intangible assets, on a consolidated basis.
13. Subsection 3D.04 FIXED ASSETS of the Agreement shall be deleted in
its entirety and the following shall be substituted in place thereof:
3D.04 FIXED ASSETS -- Borrower will not, nor permit OSLI or
OSMI to, invest (net after trade-ins, if any) in any fiscal year in
fixed assets and leasehold improvements during any fiscal year
(commencing with the year 1997) more than fifteen million dollars
($15,000,000) but excluding for this purpose any investment (including
any investment of the proceeds of the subject term loans) in fixed
assets related to the Iowa Mill Project or the purchase of fixed assets
from Southeastern Metal Processing, Inc. or Southeastern Transshipping
Realty.
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14. Subsection 7B.07 ACTIONS REQUIRING CONSENT OF A MAJORITY OF THE
BANKS of the Agreement shall be deleted in its entirety and the following shall
be substituted in lieu thereof:
7B.07 ACTIONS REQUIRING CONSENT OF A MAJORITY OF THE BANKS --
The approval of a majority of the Banks is required to amend or waive
any of the provisions of Sections 3A, 3B, 3C and 3D of this Agreement,
except subsection 3D.03(c)(xi).
15. Subsection 7B.08 ACTIONS REQUIRING CONSENT OF ALL BANKS of the
Credit Agreement shall be deleted in its entirety and the following shall be
substituted in lieu thereof:
7B.08 ACTIONS REQUIRING CONSENT OF ALL BANKS --
Notwithstanding any other provisions of this Agreement, all of the
Banks must approve any waiver or amendment to this Agreement which
would (i) extend the expiration date; (ii) extend the date on which any
subject indebtedness is due; (iii) reduce any interest rate,
commission, commitment fee or other amount payable by Borrower
hereunder; (iv) increase any Bank's subject commitment; (v) change the
percentage of the Banks whose approval is required to take any action
hereunder; (vi) change any of the provisions of subsections 2D.02 and
5A.04; (vii) release any collateral securing the subject loans; (viii)
release or modify the subject guaranty; or (ix) change any of the
provisions of subsection 3D.03(c)(xi).
16. Section 9 DEFINITIONS of the Agreement is amended by adding the
following new definitions thereto:
EQUIPMENT means, collectively, all goods, merchandise,
machinery and equipment and other personal property used or
purchased for use primarily in Borrower's business (excluding
inventory) wherever located;
RELATED WRITING means any note, mortgage, guaranty, security
agreement, other lien instrument, financial statement, audit
report, notice, legal opinion, credit request, officer's
certificate or other writing of any kind which is executed by
Borrower or OSLI or OSMI, or certified or signed by one or
more of its officers, auditors or counsel, and is delivered to
the Banks and NCB-Agent or any thereof pursuant to this
Agreement or any related writing and includes, without
limitation, the subject notes and the other writings referred
to in Sections 2A, 2B, 2C, 2D, 2E, 3A and 4A;
SERIES A SUBJECT TERM LOANS means the term loans obtained
pursuant to subsection 2A.01.1 of this Agreement;
SUBJECT GUARANTY means the guaranty of payment executed and
delivered by OSLI or OSMI pursuant to subsection 2F.01, as
supplemented from time to time.
SUBJECT NOTE means a note executed and delivered hereunder by
Borrower and being in the form and substance of Exhibit 2B.01
or 2B.OIT with the blanks appropriately filled;
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SUBJECT TERM LOAN means a subject loan obtained by Borrower
that is not a subject revolving credit loan.
17. Exhibits 2A.03, 2A.05 and 2B.01 to the Agreement shall be deleted
in their entirety and replaced by the attached new Exhibits 2A.03, 2A.05 and
2B.01, respectively, and the attached new Exhibits 2B.01T, 2EE.02 and 2FF.01 S
are hereby added to the Agreement.
18. Prior to or at the execution and delivery of this Second Amendment,
Borrower shall have complied or caused compliance with each of the following:
(a) Borrower shall have executed and delivered to each Bank a
subject revolving credit loan note in principal amount equal to the dollar
amount of such Bank's aggregate subject commitment therefor in Subsection 2A.01
in the form comparable to EXHIBIT 2B.01 of the Agreement with the blanks
appropriated completed.
(b) Borrower shall have executed and delivered series A
subject term loan notes to each Bank in accordance with subsection 2B.01.
(c) OSLI and OSMI shall each have executed and delivered to
NCB-Agent a supplement to its subject guaranty in the form attached as EXHIBIT
2FF.01S.
(d) Borrower's secretary shall have certified to each Bank
resolutions duly adopted by Borrower's board of directors in respect of this
Second Amendment and the matters contemplated hereby and authorizing execution,
delivery and performance of this Second Amendment and the subject notes and the
security and other documents to be delivered by Borrower pursuant to this Second
Amendment.
(e) The secretary of OSLI and OSMI shall have certified to
each Bank resolutions duly adopted by OSLI's and OSMI's boards of directors
authorizing the execution, delivery and performance of the supplements to the
subject guaranties to be delivered pursuant to this Second Amendment.
19. Following completion of the Iowa Mill Project, Borrower shall
promptly obtain an appraisal of the land, buildings and equipment that are part
of the Iowa Mill Project from an appraiser or appraisers acceptable to Bank and
shall deliver such appraisal to NCB-Agent.
20. From and after the effective date of this Second Amendment,
references in the Agreement and the subject notes (as each of the foregoing has
been amended by the First Amendment and this Second Amendment or pursuant to
such amendments) to (i) the Agreement shall be deemed to be references to the
Agreement as amended by the First Amendment and this Second Amendment (unless
otherwise expressly indicated) and (ii) the subject notes shall be deemed to
include the supplemental revolving credit and series A subject term loan notes
executed and delivered pursuant hereto.
21. Borrower restates and reaffirms all of its representations and
warranties set forth in Section 4B of the Agreement as of the date hereof.
22. This Second Amendment and the modifications set forth herein shall
be and become effective as of the date hereof.
23. This Second Amendment may be executed in one or more counterparts,
each counterpart to be executed by Borrower, by NCB-Agent and by one or more or
all of the Banks. Each such executed counterpart shall be deemed to be an
executed original for all purposes but
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all such counterparts taken together shall constitute one agreement, which
agreement constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof.
24. This Second Amendment may be executed by representatives of the
Banks using facsimile signatures and facsimilied signature pages shall in all
respects be binding on all parties hereto and thereto as if such signature pages
were originally delivered. Original signature pages for all facsimilied
signature pages shall be delivered to the parties hereto not later than June 6,
1997.
IN WITNESS WHEREOF, the parties have executed this Second Amendment as
of the date first above written.
NATIONAL CITY BANK, AGENT OLYMPIC STEEL, INC.
By: /s/ Donald B. Hayes, Jr. By: /s/ Richard T. Marabito
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Donald B. Hayes, Jr. Richard T. Marabito
Vice President Treasurer
NATIONAL CITY BANK
By: /s/ Donald B. Hayes, Jr.
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Donald B. Hayes, Jr.
Vice President
COMERICA BANK
By: /s/ Brian T. Dragon
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Brian T. Dragon
Account Officer
MELLON BANK, N.A.
By: /s/ Richard K. James
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Richard K. James
Vice President
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