EXHIBIT 10
AMENDMENT NO. 4
DATED AS OF JULY 14, 2000
TO
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF FEBRUARY 11, 1998
THIS AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT
("AMENDMENT") is made as of this 14th day of July, 2000 by and among METALS USA,
INC., (the "BORROWER"), the financial institutions parties thereto as lenders
(the "LENDERS"), BANK ONE, NA, having its principal office in Chicago, Illinois
(formerly known as The First National Bank of Chicago), as Agent (the "AGENT")
under that certain Amended and Restated Credit Agreement dated as of February
11, 1998 by and among the Borrower, the Lenders and the Agent, as amended by
Amendment No. 1 thereto dated as of November 25, 1998, Amendment No. 2 thereto
dated as of April 21, 1999 and Amendment No. 3 thereto dated as of February 8,
2000 (as amended, the "CREDIT AGREEMENT"). Capitalized terms used herein and not
otherwise defined herein shall have the meaning given to them in the Credit
Agreement.
WITNESSETH
WHEREAS, the Borrower, the Lenders and the Agent are parties to the
Credit Agreement; and
WHEREAS, the Borrower has requested a further amendment to the Credit
Agreement;
WHEREAS, the Borrower, the Lenders and the Agent have agreed to further
amend the Credit Agreement on the terms and conditions set forth herein and to
amend the other Loan Documents on the terms and conditions set forth herein.
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
Borrower, the Lenders and the Agent have agreed to the following amendments to
the Credit Agreement and the Loan Documents.
1. AMENDMENT TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS. Effective as of
the date of this Amendment and subject to satisfaction of the conditions
precedent set forth in Section 2
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below (the "AMENDMENT EFFECTIVE DATE"), the Credit Agreement and the other Loan
Documents are hereby amended as follows:
1.1 SECTION 1.1 OF THE CREDIT AGREEMENT IS AMENDED TO ADD THE
FOLLOWING DEFINITION IN THE APPLICABLE ALPHABETICAL
LOCATION:
"BASE EBITDA" MEANS, FOR ANY PERIOD, ON A CONSOLIDATED BASIS
FOR THE BORROWER AND ITS SUBSIDIARIES, THE SUM OF THE AMOUNTS FOR
SUCH PERIOD, WITHOUT DUPLICATION, OF:
(I) NET INCOME, PLUS
(II) INTEREST EXPENSE, PLUS
(III) CHARGES AGAINST INCOME FOR FOREIGN, FEDERAL, STATE AND LOCAL
TAXES, TO THE EXTENT DEDUCTED IN COMPUTING NET INCOME, PLUS
(IV) DEPRECIATION EXPENSE, TO THE EXTENT DEDUCTED IN COMPUTING
NET INCOME, PLUS
(V) AMORTIZATION EXPENSE, INCLUDING, WITHOUT LIMITATION,
AMORTIZATION OF GOODWILL, OTHER INTANGIBLE ASSETS AND
TRANSACTION COSTS, TO THE EXTENT DEDUCTED IN COMPUTING NET
INCOME, PLUS
(VI) OTHER NON-CASH CHARGES CLASSIFIED AS LONG-TERM DEFERRALS IN
ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES, TO THE
EXTENT DEDUCTED IN COMPUTING NET INCOME, MINUS
(VII) NET EXTRAORDINARY GAINS, PLUS
(VIII) NON-CASH EXTRAORDINARY LOSSES (AND ANY NON-CASH NONRECURRING
UNUSUAL LOSSES ARISING IN OR OUTSIDE OF THE ORDINARY COURSE
OF BUSINESS NOT INCLUDED IN EXTRAORDINARY LOSSES DETERMINED
IN ACCORDANCE WITH AGREEMENT ACCOUNTING PRINCIPLES) BUT ONLY
TO THE EXTENT SUCH AMOUNTS WERE NOT UTILIZED TO OFFSET GAINS
IN CALCULATING NET EXTRAORDINARY GAINS,
BASE EBITDA SHALL BE CALCULATED FOR ANY PERIOD BY INCLUDING THE ACTUAL
AMOUNT FOR THE APPLICABLE PERIOD ENDING ON SUCH DAY.
1.2 SECTION 2.12(D) OF THE CREDIT AGREEMENT IS AMENDED TO DELETE
THE CHART CONTAINED IN CLAUSE (II) THEREOF IN ITS ENTIRETY
AND TO SUBSTITUTE THE FOLLOWING THEREFOR:
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<TABLE>
<CAPTION>
-------------------- ------------------ ------------------ ----------------- ------------------ ------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
-------------------- ------------------ ------------------ ----------------- ------------------ ------------------
LEVERAGE RATIO LESS THAN OR GREATER THAN GREATER THAN GREATER THAN GREATER THAN
EQUAL TO 2.50 TO 2.50 TO 1.00 AND 3.00 TO 1.00 3.50 TO 1.00 AND 4.00 TO 1.00
1.00 LESS THAN OR AND LESS THAN LESS THAN OR
EQUAL TO 3.00 TO OR EQUAL TO 3.5 EQUAL TO 4.00 TO
1.00 TO 1.00 1.00
-------------------- ------------------ ------------------ ----------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C>
APPLICABLE
COMMITMENT
FEE PERCENTAGE 0.25% 0.25% 0.30% 0.50% 0.50%
-------------------- ------------------ ------------------ ----------------- ------------------ ------------------
APPLICABLE
EURODOLLAR
RATE MARGIN AND
APPLICABLE L/C FEE
PERCENTAGE 1.25% 1.375% 1.625% 1.875% 2.125%
-------------------- ------------------ ------------------ ----------------- ------------------ ------------------
APPLICABLE
FLOATING RATE
MARGIN 0% 0% 0% 0.25% 0.25%
-------------------- ------------------ ------------------ ----------------- ------------------ ------------------
</TABLE>
1.3 SECTION 7.4(A) OF THE CREDIT AGREEMENT IS AMENDED TO DELETE
THE TERMS THEREOF IN THEIR ENTIRETY AND TO SUBSTITUTE THE
FOLLOWING THEREFOR:
(A) FIXED CHARGE COVERAGE RATIO. THE BORROWER SHALL MAINTAIN A RATIO
("FIXED CHARGE COVERAGE RATIO") OF (I) THE SUM OF (A) BASE EBITDA,
MINUS (B) RESTRICTED PAYMENTS MADE PURSUANT TO SECTION 7.3(F)(V) TO
(II) INTEREST EXPENSE IN EACH CASE FOR THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES OF AT LEAST (1) 2.60 TO 1.00 FOR EACH
FISCAL QUARTER COMMENCING WITH THE FISCAL QUARTER ENDING JUNE 30,
2000 THROUGH THE FISCAL QUARTER ENDING SEPTEMBER 30, 2001; (2) 2.80
TO 1.00 FOR EACH FISCAL QUARTER COMMENCING WITH THE FISCAL QUARTER
ENDING DECEMBER 31, 2001 THROUGH THE FISCAL QUARTER ENDING MARCH 31,
2002; AND (3) 3.00 TO 1.00 FOR EACH FISCAL QUARTER THEREAFTER. IN
EACH CASE THE FIXED CHARGE COVERAGE RATIO SHALL BE DETERMINED AS OF
THE LAST DAY OF EACH FISCAL QUARTER FOR THE FOUR-QUARTER PERIOD
ENDING ON SUCH DAY. FOR PURPOSES OF THE CALCULATION OF INTEREST
EXPENSE, SUCH AMOUNT SHALL BE CALCULATED FOR ANY SUCH PERIOD BY
INCLUDING ONLY THE ACTUAL AMOUNT FOR THE APPLICABLE PERIOD ENDING ON
SUCH DAY.
1.4 SECTION 7.4(B) OF THE CREDIT AGREEMENT IS AMENDED TO DELETE
THE TERMS THEREOF IN THEIR ENTIRETY AND TO SUBSTITUTE THE
FOLLOWING THEREFOR:
(B) TOTAL DEBT TO EBITDA RATIO. THE BORROWER SHALL NOT AT ANY
TIME PERMIT THE RATIO (THE "LEVERAGE RATIO") OF (I) TOTAL DEBT OF
THE BORROWER AND ITS CONSOLIDATED SUBSIDIARIES TO (II) EBITDA OF THE
BORROWER AND ITS CONSOLIDATED SUBSIDIARIES, TO BE GREATER THAN (1)
4.50 TO 1.00 FOR EACH FISCAL QUARTER COMMENCING WITH THE FISCAL
QUARTER ENDING JUNE 30, 2000 THROUGH THE FISCAL QUARTER ENDING MARCH
31, 2001; (2) 4.25 TO 1.00 FOR EACH FISCAL QUARTER COMMENCING WITH
THE FISCAL QUARTER ENDING JUNE 30, 2001 THROUGH THE FISCAL QUARTER
ENDING MARCH 31, 2002; AND (3) 4.00 TO 1.00 FOR EACH FISCAL QUARTER
THEREAFTER. THE LEVERAGE RATIO SHALL BE CALCULATED, IN EACH CASE,
DETERMINED AS OF THE LAST DAY OF EACH FISCAL QUARTER (COMMENCING
WITH THE FISCAL QUARTER ENDING
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JUNE 30, 2000 AND EACH FISCAL QUARTER THEREAFTER) BASED UPON (A) FOR
TOTAL DEBT, TOTAL DEBT AS OF THE LAST DAY OF EACH SUCH FISCAL
QUARTER; AND (B) FOR EBITDA, EBITDA FOR THE TWELVE-MONTH PERIOD
ENDING ON SUCH DAY, CALCULATED AS SET FORTH IN THE DEFINITION
THEREOF.
2. CONDITIONS OF EFFECTIVENESS. The provisions of Section 1 of this
Amendment shall not become effective unless:
(a) this Amendment shall have been executed by the Borrower, the Agent and
the Required Lenders;
(b) the Agent shall have received from each of the applicable Subsidiaries
a reaffirmation in the form attached as EXHIBIT A hereto together with such
other documents, instruments and agreements in connection with the Guaranty and
the Pledge Agreements as shall be reasonably requested by the Agent; and
(c) the Agent shall have received from the Borrower for the pro rata
benefit of those Lenders which provide written approval of the terms of this
Amendment on or prior to 5:00 p.m. (CST), July 17, 2000 (the "Approving
Lenders"), a modification fee of 0.125% (12.5 basis points) payable on the
aggregate amount of the Commitments of the Approving Lenders, payable to the
Agent on the date the Required Lenders sign the Proposed Amendments.
3. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower hereby
represents and warrants as follows:
(a) The Borrower has the legal power and authority to execute and deliver
this Amendment and the officers of the Borrower executing this Amendment have
been duly authorized to execute and deliver the same and bind the Borrower with
respect to the provisions hereof.
(b) This Amendment and the Credit Agreement as previously executed and as
amended hereby, constitute legal, valid and binding obligations of the Borrower,
enforceable against it in accordance with their terms (except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditor's rights generally).
(c) Upon the effectiveness of this Amendment, the Borrower hereby
reaffirms all covenants, representations and warranties made in the Credit
Agreement and the other Loan Documents to the extent the same are not amended
hereby, agrees that all such covenants, representations and warranties shall be
deemed to have been remade as of the effective date of this Amendment.
(d) There exists no Default or Unmatured Default.
4. REFERENCE TO THE EFFECT ON THE CREDIT AGREEMENT.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each
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reference in the Credit Agreement to "this Credit Agreement," "hereunder,"
"hereof," "herein" or words of like import shall mean and be a reference to the
Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement and all
other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power of
remedy of the Agent or the Lenders, nor constitute a waiver of any provision of
the Credit Agreement or any other documents, instruments and agreements executed
and/or delivered in connection therewith.
5. GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, ANY
LENDER, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AMENDMENT, THE CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE
WITH THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF NEW YORK.
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, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. A facsimile signature page hereto sent to the Agent or the Agent's
counsel shall be effective as a counterpart signature provided each party
executing such a facsimile counterpart agrees to deliver originals to the Agent
thereof.
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IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first above written.
METALS USA, INC., AS THE BORROWER
By: /S/ KEITH E. ST CLAIR
---------------------
Print Name: Keith E. St. Clair
Title: Senior Vice President and Chief Financial Officer
BANK ONE, NA
(MAIN OFFICE CHICAGO)
(FORMERLY KNOWN AS THE FIRST NATIONAL BANK OF
CHICAGO), INDIVIDUALLY AND AS AGENT
By: /S/ GREG SMOTHERS
-----------------
Print Name: Greg Smothers
Title: Vice President
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EXHIBIT A
TO
AMENDMENT NO. 4
FORM OF REAFFIRMATION OF SUBSIDIARY GUARANTY
REAFFIRMATION
Each of the undersigned hereby acknowledges receipt of a copy of
Amendment No. 4 to the Amended and Restated Credit Agreement dated as of
February 11, 1998, by and among Metals USA, Inc., the Lenders and the Agent, as
amended by Amendment No. 1 thereto dated as of November 25, 1998, Amendment No.
2 thereto dated as of April 21, 1999 and Amendment No. 3 thereto dated as of
February 8, 2000 (as so amended, the "Credit Agreement") which Amendment No. 4
is dated as of July 14, 2000 (the "Amendment"). Capitalized terms used in this
Reaffirmation and not defined herein shall have the meanings given to them in
the Credit Agreement. Without in any way establishing a course of dealing by the
Agent or any Lender, the undersigned reaffirms the terms and conditions of the
Guaranty dated as of February 11, 1998 executed by it (either originally or by
an addendum thereto) and acknowledges and agrees that such Guaranty and each and
every other Loan Document executed by the undersigned in connection with the
Credit Agreement remain in full force and effect and are hereby ratified,
reaffirmed and confirmed. All references to the Credit Agreement contained in
the above-referenced documents shall be a reference to the Credit Agreement as
so amended by the Amendment and as the same may from time to time hereafter be
amended, modified or restated.
Aerospace Specification Metals, Inc.
Aerospace Specification Metals-U.K., Inc.
Affiliated Metals Company
Allmet Building Products, LP
Allmet GP, Inc.
Allmet LP, Inc.
Aluminum Building Systems, Inc.
Cornerstone Building Products, Inc.
Cornerstone Metals Corporation
Federal Bronze Alloys, Inc.
Flagg Steel, Inc.
Forest Manufacturing, Inc.
Fullerton Metals Company
Harvey Titanium, LTD.
Independent Metals, L.L.C.
Interstate Steel Supply Company of Maryland
Intsel Southwest Limited Partnership
Intsel, G.P.
Intsel, L.P.
(LIST OF SIGNING ENTITIES CONTINUED ON THE NEXT PAGE)
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Jeffreys Real Estate Corporation
Jeffreys Steel Company, Inc.
Levinson Steel GP, Inc.
Levinson Steel LP, Inc.
Meier Metal Servicecenters, Inc.
Metal Ventures L.L.C.
Metalmart, Inc.
Metals Aerospace International, Inc.
Metals USA Finance Corp.
Metals USA Service Corp.
Metals USA-Canton, L.L.C.
MUI Texas, Inc.
MUSA, GP
MUSA, LP
National Manufacturing, Inc.
Pacific Metal Company
Professional Metals , Inc.
Queensboro, L.L.C.
Royal Aluminum, Inc.
Sierra Pacific Steel, Inc.
Southern Alloy of America, Inc.
Steel Manufacturing, L.L.C.
Steel Service Systems, Inc.
Texas Aluminum Industries, Inc.
The Levinson Steel Company, LP
Uni-Steel, Inc.
Valley Aluminum Co.
Valley Aluminum of Nevada, Inc.
Wayne Steel, Inc.
Western Awning Company, Inc.
Wilkof-Morris Steel Corporation
Williams Steel & Supply Co., Inc.
Wolf Brothers Acq. Corp.
Wolf Brothers, LLC
WSS Transportation, Inc.
In each case:
By: /S/ KEITH E. ST. CLAIR
Title: Sr. Vice President and CFO
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