SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 29, 1999
---------------------------------
(Date of earliest event reported)
Birmingham Steel Corporation
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(Exact Name of Registrant as Specified in its charter)
Delaware 1-9820 13-3213634
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(State or Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
1000 Urban Center Drive, Suite 300, Birmingham, Alabama 35242-2516
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(Address of principal executive offices, including zip code)
(205) 970-1200
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events.
On September 29, 1999, Birmingham Steel Corporation (the
"Company") announced that it reached an agreement in principle with its
existing bank lenders to provide continued revolver financing in the amount
of up to $235 million through December 28, 1999 subject to the execution of
definitive documentation and various terms and conditions. Separately, the
Company announced on the same day that it had filed for a statutory 15-day
extension for the filing of its 1999 Annual Report on Form 10-K. The
Company expects that its Form 10-K will be filed on or before October 13,
1999. A copy of the press release issued by the Company, along with a copy
of the Company's credit facility and all amendments thereto, are attached
hereto as exhibits and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
Exhibit No. Description
----------- -----------
10.1 Credit Agreement dated March 17, 1997 (the "Credit
Agreement") (incorporated by reference to Exhibit 10.1
to Form 10-Q for quarter ended March 31, 1997).
10.2 First Amendment to Credit Agreement dated June 23, 1998.
10.3 Second Amendment to Credit Agreement dated September 30,
1998 (incorporated by reference to Exhibit 10.1 to Form
10-Q for quarter ended December 31, 1998).
10.4 Third Amendment to Credit Agreement dated July 27, 1999.
10.5 Fourth Amendment to Credit Agreement dated September 28,
1999.
99.1 Press Release issued by the Company on September 29,
1999.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
BIRMINGHAM STEEL CORPORATION
By: /s/ Kevin E. Walsh
----------------------------------
Name: Kevin E. Walsh
Title: Executive Vice President
and Chief Financial Officer
Dated: September 30, 1999
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.1 Credit Agreement dated March 17, 1997 (the "Credit
Agreement") (incorporated by reference to Exhibit 10.1
to Form 10-Q for quarter ended March 31, 1997).
10.2 First Amendment to Credit Agreement dated June 23, 1998.
10.3 Second Amendment to Credit Agreement dated September 30,
1998 (incorporated by reference to Exhibit 10.1 to Form
10-Q for quarter ended December 31, 1998).
10.4 Third Amendment to Credit Agreement dated July 27, 1999.
10.5 Fourth Amendment to Credit Agreement dated September 28,
1999.
99.1 Press Release issued by the Company on September 29,
1999.
EXHIBIT 10.2
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") dated as
of June 23, 1998 by and among BIRMINGHAM STEEL CORPORATION (the
"Borrower"), each of the financial institutions a party hereto (the
"Lenders"), and NATIONSBANK, N.A., sucessor to NationsBank, N.A. (South),
as Agent (the "Agent").
WHEREAS, the Borrower, the Lenders and the Agent have entered into
that certain Credit Agreement dated as of March 17, 1997 (the "Credit
Agreement");
WHEREAS, the Borrower, the Lenders and the Agent desire to amend
certain provisions of the Credit Agreement on the terms and conditions
contained herein; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the
parties hereto hereby agree as follows:
Section 1. Specific Amendments to Credit Agreement. The parties
hereto agree that the Credit Agreement is amended as follows:
(a) The Credit Agreement is amended by deleting from the definition
of the term "Consolidated Net Income" contained in Section 1.1 the word
"and" appearing immediately before clause (g) of such definition and adding
to the end of such definition the following:
"and (h) pre-operating/start-up costs as would be set forth on an
income statement of the Borrower and its Restricted Subsidiaries for
such period prepared in accordance with GAAP"
(b) The Credit Agreement is amended by deleting clause (ii) from
Section 12.5.(d) in its entirety and substituting in its place the
following:
(ii) any partial assignment shall be in an amount at least equal to
$5,000,000 and after giving effect to such assignment the assigning
Lender retains a Commitment, or if the Commitments have been
terminated, holds Notes having an aggregate outstanding principal
balance, of at least $5,000,000;
Section 2. Representations. The Borrower represents and warrants to
the Agent and the Lenders that:
(a) Authorization. The Borrower has the right and power, and has
taken all necessary action to authorize it, to execute and deliver this
Amendment and to perform its obligations hereunder and under the Credit
Agreement, as amended by this Amendment, in accordance with their
respective terms. This Amendment has been duly executed and delivered by a
duly authorized officer of the Borrower and each of this Amendment and the
Credit Agreement, as amended by this Amendment, is a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its respective terms except as may be limited by
bankruptcy, insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and general
principles of equity.
(b) Compliance with Laws, etc. The execution and delivery by the
Borrower of this Amendment and the performance by the Borrower of this
Amendment and the Credit Agreement, as amended by this Amendment, in
accordance with their respective terms and the borrowings hereunder do not
and will not, by the passage of time, the giving of notice, or otherwise:
(i) require any Governmental Approval or violate any Applicable Law
relating to the Borrower or any Subsidiary; (ii) conflict with, result in a
breach of or constitute a default under the certificate of incorporation or
the bylaws of the Borrower, or any indenture, agreement or other instrument
to which the Borrower or any Subsidiary is a party or by which the Borrower
or any Subsidiary or any of its respective properties may be bound; or
(iii) result in or require the creation or imposition of any Lien upon or
with respect to any property now owned or hereafter acquired by the
Borrower or any Subsidiary.
(c) No Default. No Default or Event of Default has occurred and is
continuing as of the date hereof nor will exist immediately after giving
effect to this Amendment.
Section 3. Reaffirmation of Representations. The Borrower hereby
repeats and reaffirms all representations and warranties made by the
Borrower to the Agent and the Lenders in the Credit Agreement and the other
Loan Documents to which it is a party on and as of the date hereof with the
same force and effect as if such representations and warranties were set
forth in this Amendment in full.
Section 4. Certain References. Each reference to the Credit Agreement
in any of the Loan Documents shall be deemed to be a reference to the
Credit Agreement as amended by this Amendment.
Section 5. Expenses. The Borrower shall reimburse the Agent and each
Lender upon demand for all costs and expenses (including attorneys' fees)
incurred by the Agent or such Lender in connection with the preparation,
negotiation and execution of this Amendment and the other agreements and
documents executed and delivered in connection herewith.
Section 6. Effectiveness. Upon receipt by the Agent of a counterpart
of this Amendment duly executed by the Borrower and the Requisite Lenders,
this Amendment shall be deemed effective as of the Effective Date.
Section 7. Benefits. This Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and assigns.
Section 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 9. Effect. Except as expressly herein amended, the terms and
conditions of the Credit Agreement and the other Loan Documents remain in
full force and effect. The amendments contained herein shall be deemed to
have prospective application only, unless otherwise specifically stated
herein.
Section 10. Counterparts. This Amendment may be executed in any
number of counterparts, each of which shall be deemed to be an original and
shall be binding upon all parties, their successors and assigns.
Section 11. Definitions. All capitalized terms not otherwise defined
herein are used herein with the respective definitions given them in the
Credit Agreement.
[Signatures on Next Page]
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT DATED AS OF
JUNE 23, 1998 WITH BIRMINGHAM STEEL CORPORATION]
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to Credit Agreement to be executed as of the date first above
written.
THE BORROWER:
BIRMINGHAM STEEL CORPORATION
By:______________________________
Name:_______________________
Title:______________________
THE AGENT AND THE LENDERS:
NATIONSBANK, N.A., successor to NationsBank, N.A.
(South), as Agent and as a Lender
By:______________________________
Name:_______________________
Title:______________________
PNC BANK, NATIONAL ASSOCIATION, as Co-Agent and
as a Lender
By:______________________________
Name:_______________________
Title:______________________
THE BANK OF NOVA SCOTIA, as Co-Agent as a Lender
By:______________________________
Name:_______________________
Title:______________________
[Signatures continue on the following page]
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT DATED AS OF
JUNE 23, 1998 WITH BIRMINGHAM STEEL CORPORATION]
BANK OF AMERICA NT&SA, successor of Bank of
America Illinois
By:______________________________
Name:_______________________
Title:______________________
THE BANK OF TOKYO - MITSUBISHI, LTD
ATLANTA AGENCY
By:______________________________
Name:_______________________
Title:______________________
CIBC INC.
By:______________________________
Name:_______________________
Title:______________________
AMSOUTH BANK
By:______________________________
Name:_______________________
Title:______________________
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:______________________________
Name:_______________________
Title:______________________
[Signatures continue on the following page]
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT DATED AS OF
JUNE 23, 1998 WITH BIRMINGHAM STEEL CORPORATION]
LTCB TRUST COMPANY
By:______________________________
Name:_______________________
Title:______________________
THE FIRST NATIONAL BANK OF CHICAGO
By:______________________________
Name:_______________________
Title:______________________
FIRST AMERICAN NATIONAL BANK
By:______________________________
Name:_______________________
Title:______________________
THE SANWA BANK, LIMITED
By:______________________________
Name:_______________________
Title:______________________
[Signatures continue on the following page]
[SIGNATURE PAGE TO FIRST AMENDMENT TO CREDIT AGREEMENT DATED AS OF
JUNE 23, 1998 WITH BIRMINGHAM STEEL CORPORATION]
UNION BANK OF SWITZERLAND, NEW YORK BRANCH
By:______________________________
Name:_______________________
Title:______________________
By:______________________________
Name:_______________________
Title:______________________
EXHIBIT 10.4
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT dated as of July 27, 1999
(this "Agreement"), by and among BIRMINGHAM STEEL CORPORATION (the
"Borrower"), each of the financial institutions party hereto, and BANK OF
AMERICA, N.A. successor to NationsBank, N.A. (South), as Agent (the
"Agent").
WHEREAS, the Borrower, the Lenders and the Agent have entered into
that certain Credit Agreement dated as of March 17, 1997, as amended as of
June 23, 1998 and as of September 30, 1998 (as so amended, the "Credit
Agreement");
WHEREAS, the Borrower has advised the Agent, the Lenders and the
Swingline Lender that the Borrower may not be able to make certain
certifications regarding the Borrower's compliance with Section 9.1.(b) of
the Credit Agreement with respect to the Four-Quarter Period ended June 30,
1999; and
WHEREAS, while the Borrower is in the process of compiling and
evaluating its final financial data for such Four-Quarter Period, the
Borrower desires that the Agent, the Lenders and the Swingline Lender
continue to make Revolving Loans and Swingline Loans to the Borrower, as
applicable, and to issue Letters of Credit for the account of the Borrower,
pursuant to the Credit Agreement, subject to the terms and conditions of
this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by all of the parties hereto,
all of the parties hereto agree as follows:
Section 1. Agreement Regarding Certain Conditions Precedent to Credit
Events and Continuations. Subject to the terms and conditions of this
Agreement, the Agent, the Lenders and the Swingline Lender each agrees that
the condition precedent imposed under Section 5.2. of the Credit Agreement
to the occurrence of any Credit Event that no Default or Event of Default
shall have occurred and be continuing and that the representations and
warranties made or deemed made by the Borrower in the Loan Documents be
true and correct, as well as the condition precedent to a Continuation or
Conversion of a Loan that no Default or Event of Default shall have
occurred and be continuing as imposed under Sections 2.9. and 2.10.
respectively, shall be suspended during the Applicable Period (as defined
below) solely to the extent such conditions cannot be satisfied because of
the existence of the following:
(a) the issue concerning the Borrower's compliance with Section
9.1.(b) of the Credit Agreement for the Four-Quarter Period ended
June 30, 1999;
(b) any issue concerning the Borrower's compliance with
interest coverage ratios contained in the following agreements: (i)
those certain Note Purchase Agreements dated as of September 1, 1993
executed by the Borrower in favor of the purchasers of the Borrower's
7.28% Senior Notes due December 15, 2005 in the aggregate amount of
$130,000,000 and (ii) those certain Note Purchase Agreements dated as
of September 15, 1995 executed by the Borrower in favor of the
purchasers of the Borrower's (x) 6.96% Series A Senior Notes due
December 15, 2002 in the aggregate amount of $76,000,000; (y) 7.07%
Series B Senior Notes due December 15, 2005 in the aggregate amount
of $14,000,000; and (z) 7.17% Series C Senior Notes due December 15,
2005 in the aggregate amount of $60,000,000; and
(c) any issue concerning the Borrower's or a Restricted
Subsidiary's compliance with interest coverage ratios in the
following agreements: (i) that certain Reimbursement Agreement dated
as of September 1, 1995, as amended, among the Borrower, American
Steel and Wire Corporation and Bank of America, N.A., successor to
Bank of America Illinois, (ii) that certain Reimbursement Agreement
dated as of August 15, 1995, as amended, between the Borrower and PNC
Bank, National Association, successor to PNC Bank, Kentucky, Inc.,
and (iii) that certain Reimbursement Agreement dated as of October 1,
1996, as amended, between the Borrower and PNC Bank, National
Association, successor to PNC Bank, Kentucky, Inc.
Section 2. Duration of Applicable Period. The agreement of the Agent,
the Lenders and the Swingline Lender contained in the immediately preceding
Section shall remain in effect during the period (the "Applicable Period")
from the date this Agreement first becomes effective to the first to occur
of the following: (a) September 30, 1999 and (b) the date on which the
Agent shall have received from Lenders comprising the Requisite Lenders
written notice that such Lenders have elected to terminate their agreement
contained in the immediately preceding Section. The Borrower acknowledges
and agrees that each Lender may make such an election in such Lender's sole
and absolute discretion. The Agent shall give prompt notice to the Borrower
of the receipt of any such notice from Lenders comprising the Requisite
Lenders but the Agent's failure to do so shall not have any effect on the
validity or effectiveness of any such election or termination of such
agreement. In addition, the Applicable Period shall also terminate without
any such election or notice or any other action by the Agent, the Lenders,
the Swingline Lender or any other Person upon the occurrence of any Event
of Default specified in Section 10.1.(e) or (f) of the Credit Agreement.
Section 3. Limitation on Outstandings. During the Applicable Period
and notwithstanding any term of the Credit Agreement or any other Loan
Document, the Borrower agrees that at no time shall it permit the aggregate
principal amount of all outstanding Revolving Loans, together with the
aggregate principal amount of all outstanding Bid Rate Loans, the aggregate
principal amount of all outstanding Swingline Loans and the aggregate
amount of all Letter of Credit Liabilities (all such amounts collectively
referred to as the "Outstanding Credit"), to exceed $235,000,000. If at any
time the Outstanding Credit exceeds $235,000,000, the Borrower shall
immediately pay to the Agent for the account of the Lenders, or the
Swingline Lender, as the case may be, the amount of such excess.
Section 4. Amendments to Credit Agreement. The parties hereto agree
that the Credit Agreement is amended as follows:
(a) The Credit Agreement is amended by deleting from Section 1.1 the
definitions of the terms "Applicable Facility Fee" and "Applicable Margin"
in their entirety and substituting in their places the following:
"APPLICABLE FACILITY FEE" means one-half of one percent (0.50%).
"APPLICABLE MARGIN" means two percent (2.0%).
(b) The Credit Agreement is amended by deleting the first sentence of
Section 2.5.(b) in its entirety and substituting in its place the
following:
Accrued interest on each Loan shall be payable (i) in the case of all
Loans (including Swingline Loans), monthly on the last day of each
calendar month, (ii) in the case of a LIBOR Loan or a Bid Rate Loan,
on the last day of each Interest Period therefor, (iii) in the case
of any LIBOR Loan, upon the payment, prepayment or Continuation
thereof or the Conversion of such Loan to a Loan of another Type (but
only on the principal amount so paid, prepaid or Converted) and (iv)
in the case of any Loan, upon the payment or prepayment thereof in
full.
The amendments contained in this Section shall become effective upon the
effectiveness of this Agreement and shall be deemed to have prospective
application only. The termination of the Applicable Period shall have no
effect whatsoever on the effectiveness of such amendments.
Section 5. Representations and Warranties of the Borrower. To induce
the Agent, the Lenders and the Swingline Lender to enter into this
Agreement, the Borrower represents and warrants to each of them as follows
as of the date hereof:
(a) No Default or Event of Default has occurred and is continuing;
provided, however, no representation or warranty is made in this subsection
solely to the extent such representation or warranty cannot be made because
of the existence of any of the issues referred to in Section 1(a) through
(c) above;
(b) The representations and warranties made or deemed made by the
Borrower in the Loan Documents to which it is a party, are true and correct
with the same force and effect as if made on and as of the date hereof
except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties were true and accurate on and as of such earlier date) and
except for changes in factual circumstances specifically and expressly
permitted under the Credit Agreement; provided, however, no representation
or warranty is made in this subsection solely to the extent such
representation or warranty cannot be made because of the existence of any
of the issues referred to in Section 1(a) through (c) above;
(c) The Borrower has the right and power, and has taken all necessary
action to authorize it, to execute, deliver and perform this Agreement, and
to perform the Credit Agreement as amended by this Agreement, in accordance
with their respective terms. This Agreement has been duly executed and
delivered by the duly authorized officers of the Borrower and each of this
Agreement and the Credit Agreement as amended by this Agreement is a legal,
valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with its respective terms except as may be limited
by bankruptcy, insolvency or other laws of general application relating to
or affecting the enforcement of creditors' rights generally and general
principles of equity; and
(d) The execution and delivery of this Agreement, and the performance
of each of this Agreement and the Credit Agreement as amended by this
Agreement, in accordance with its respective terms, do not and will not, by
the passage of time, the giving of notice, or otherwise: (i) require any
Governmental Approval or violate any Applicable Law relating to the
Borrower or any Subsidiary; (ii) conflict with, result in a breach of or
constitute a default under the certificate of incorporation or the bylaws
of the Borrower, or any indenture, agreement or other instrument to which
the Borrower or any Subsidiary is a party or by which the Borrower or any
Subsidiary or any of its respective properties may be bound; or (iii)
result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by the Borrower or
any Subsidiary.
Section 6. No Third Party Beneficiaries. Except for the Borrower, the
Lenders, the Swingline Lender and the Agent, no Person is intended to be a
beneficiary of this Agreement and no other Person shall be authorized to
rely upon the contents of this Agreement.
Section 7. No Waiver. The parties hereto confirm and agree that none
of the following is, nor shall any of the following be deemed or construed
in any way to be, a waiver of any Default or Event of Default under the
Agreement or any of the other Loan Documents: (a) the existence of this
Agreement; (b) the amendments effected pursuant to Section 4 above; or (c)
the Agent, any Lender or the Swingline Lender permitting any Credit Event
to occur after the effectiveness of this Agreement. In addition, each
Lender confirms its continuing obligations (i) to the Agent under Section
2.3.(j) regarding drawings on Letters of Credit honored by the Agent and
not reimbursed by the Borrower and (ii) to the Swingline Lender under
Section 2.4.(e) of the Credit Agreement to pay to the Swingline Lender such
Lender's Commitment Percentage of Swingline Loans as provided in such
Section.
Section 8. Effectiveness. This Agreement shall become effective only
upon its execution and delivery by the Borrower, the Requisite Lenders, the
Swingline Lender and the Agent, and shall be deemed to be effective as of
the date first written above.
Section 9. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Georgia.
Section 10. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall constitute an original,
but all of which taken together shall be one and the same instrument.
Section 11. Defined Terms. Terms not otherwise defined in this
Agreement which are defined in the Credit Agreement are used herewith with
the respective meanings given them in the Credit Agreement.
[Signatures on Following Page]
IN WITNESS WHEREOF, the parties hereto have caused this Third
Amendment to Credit Agreement to be executed as of the date first above
written.
THE BORROWER:
BIRMINGHAM STEEL CORPORATION
By:______________________________
Name:_______________________
Title:______________________
THE AGENT AND THE LENDERS:
BANK OF AMERICA, N.A., successor to
NationsBank, N.A. (South), as Agent, as a
Lender and as Swingline Lender
By:______________________________
Name:_______________________
Title:______________________
PNC BANK, NATIONAL ASSOCIATION, as
Co-Agent and as a Lender
By:______________________________
Name:_______________________
Title:______________________
THE BANK OF NOVA SCOTIA, as Co-Agent and
as a Lender
By:______________________________
Name:_______________________
Title:______________________
[Signatures continued on the following page]
[SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT
DATED AS OF JULY 27, 1999 WITH BIRMINGHAM STEEL CORPORATION]
THE BANK OF TOKYO - MITSUBISHI, LTD
ATLANTA AGENCY
By:______________________________
Name:_______________________
Title:______________________
CIBC INC.
By:______________________________
Name:_______________________
Title:______________________
AMSOUTH BANK
By:______________________________
Name:_______________________
Title:______________________
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:______________________________
Name:_______________________
Title:______________________
GENERAL ELECTRIC CAPITAL CORPORATION
By:______________________________
Name:_______________________
Title:______________________
[Signatures continue on the following page]
[SIGNATURE PAGE TO THIRD AMENDMENT TO CREDIT AGREEMENT
DATED AS OF JULY 27, 1999 WITH BIRMINGHAM STEEL CORPORATION]
THE FIRST NATIONAL BANK OF CHICAGO
By:______________________________
Name:_______________________
Title:______________________
FIRST AMERICAN NATIONAL BANK
By:______________________________
Name:_______________________
Title:______________________
THE SANWA BANK, LIMITED
By:______________________________
Name:_______________________
Title:______________________
UNION BANK OF SWITZERLAND, NEW YORK BRANCH
By:______________________________
Name:_______________________
Title:______________________
By:______________________________
Name:_______________________
Title:______________________
EXHIBIT 10.5
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT dated as of September
28, 1999 (this "Agreement"), by and among BIRMINGHAM STEEL CORPORATION (the
"Borrower"), each of the financial institutions party hereto, and BANK OF
AMERICA, N.A., successor to NationsBank, N.A. (South), as Agent (the
"Agent").
WHEREAS, the Borrower, the Lenders and the Agent have entered into
that certain Credit Agreement dated as of March 17, 1997, as amended as of
June 23, 1998, as of September 30, 1998 and as of July 27, 1999 (as so
amended, the "Credit Agreement"); and
WHEREAS, to induce the Agent, the Lenders and the Swingline Lender
to forbear from exercising their rights and remedies under the Credit
Agreement in respect of the matters referred to below, the Borrower is
willing to agree as provided in this Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by all of the parties
hereto, all of the parties hereto agree as follows:
Section 1. Agreement to Forbear. Subject to the terms and
conditions of this Agreement, the Agent, the Lenders and the Swingline
Lender each agrees that during the Applicable Period (as defined below) it
will not, solely by reason of the existence of the following Default and
Events of Default (collectively, the "Existing Defaults"), exercise any
right or remedy available to the Lender under or in respect of the Credit
Agreement or the other Loan Documents:
(a) the Events of Default resulting from the Borrower's
failure to comply with subsections (a), (b) and (c) of Section
9.1.(b) of the Credit Agreement for the Four-Quarter Period ended
June 30, 1999;
(b) the Default resulting from the Borrower's failure to
deliver to the Lenders the annual audited financial statements
required to be delivered to them under Section 8.2. of the Credit
Agreement within 90 days following the end of the Borrower's
fiscal year ending June 30, 1999;
(c) any Event of Default under Section 10.1.(c) resulting
from a misrepresentation by the Borrower under Section 6.1.(k):
(i) regarding the financial statements referred to therein, solely
to the extent resulting from the Borrower's restatement of such
financial statements to the extent permitted to do so in
accordance with Accounting Principles Board Opinion No. 30 ("APB
30") and (ii) that there has been no material adverse change in
the financial condition, operations, or business of the Borrower
and its consolidated Subsidiaries taken as a whole since June 30,
1996; and
(d) any Event of Default under Section 10.1.(d)(iii) of
the Credit Agreement to the extent resulting solely from the
following:
(i) the Borrower's failure to comply with
interest coverage ratios and minimum net worth covenants
contained in: (A) those certain Note Purchase Agreements
dated as of September 1, 1993, as amended and in effect
immediately prior to the date hereof (collectively, the
"1993 Note Purchase Agreements") executed by the Borrower
in favor of the purchasers of the Borrower's 7.28% Senior
Notes due December 15, 2005 in the aggregate amount of
$130,000,000 and (B) those certain Note Purchase
Agreements dated as of September 15, 1995, as amended and
in effect immediately prior to the date hereof (the "1995
Note Purchase Agreements", together with the 1993 Note
Purchase Agreements, the "Note Agreements") executed by
the Borrower in favor of the purchasers of the Borrower's
(x) 6.96% Series A Senior Notes due December 15, 2002 in
the aggregate amount of $76,000,000; (y) 7.07% Series B
Senior Notes due December 15, 2005 in the aggregate
amount of $14,000,000; and (z) 7.17% Series C Senior
Notes due December 15, 2005 in the aggregate amount of
$60,000,000;
(ii) the Borrower's failure to deliver, as and
when required under Section 9.1(b) of the Note Purchase
Agreements, the annual financial statements for the
Borrower's fiscal year ending June 30, 1999, the related
opinion of its accountants, and the certificates referred
to in such Section; or
(iii) the failure of the Borrower or American
Steel & Wire Corporation ("American") to:
(A) comply with the interest coverage
ratio and minimum net worth covenant contained
in that certain Reimbursement Agreement dated as
of September 1, 1995, as amended and in effect
immediately prior to the date hereof (the
"American Wire Reimbursement Agreement"), among
the Borrower, American and Bank of America,
N.A., successor to Bank of America Illinois;
(B) deliver, as and when required under
Section 5.9(b) of the American Wire
Reimbursement Agreement, the annual financial
statements for the Borrower's fiscal year ending
June 30, 1999;
(C) comply with the interest coverage
ratio and minimum net worth covenant contained
in that certain Reimbursement Agreement dated as
of August 15, 1995, as amended and in effect
immediately prior to the date hereof (the "1995
PNC Reimbursement Agreement"), between the
Borrower and PNC Bank, National Association,
successor to PNC Bank, Kentucky, Inc.;
(D) deliver, as and when required under
Section 5.9(b) of the 1995 PNC Reimbursement
Agreement, the annual financial statements for
the Borrower's fiscal year ending June 30, 1999;
(E) comply with the interest coverage
ratio and minimum net worth covenant contained
in that certain Reimbursement Agreement dated as
of October 1, 1996, as amended and in effect
immediately prior to the date hereof (the "1996
PNC Reimbursement Agreement"), between the
Borrower and PNC Bank, National Association,
successor to PNC Bank, Kentucky, Inc.; or
(F) deliver, as and when required under
Section 5.9(b) of the 1996 PNC Reimbursement
Agreement, the annual financial statements for
the Borrower's fiscal year ending June 30, 1999;
or
(iv) the occurrence of a default under any
agreement governing any Material Debt of the Borrower or
any Subsidiary to the extent resulting solely from the
facts, circumstances and events described in subsections
(a) though (d) of this Section 1.
The Borrower acknowledges that the agreement of the Agent, the Lenders and
the Swingline Lender contained in this Section: (x) is expressly limited as
described above and applies only with respect to the Existing Defaults; (y)
will terminate immediately upon any Person exercising any right or remedy
available to it as a result of the failure of the Borrower (or American, as
applicable) to comply with any of the terms of such agreements and (z) will
not apply with respect to any of such agreements unless and until the
Borrower shall have delivered to the Requisite Lenders, evidence
satisfactory to them, that the other parties to such agreement have either
waived or agreed to forbear from exercising all rights and remedies to the
extent permitted to do so by the failure of the Borrower (and American, as
applicable) to comply with the provisions referred to above of such
agreement or by virtue of the existence of any of the Existing Defaults.
Section 2. Duration of Applicable Period. The agreement of the
Agent, the Lenders and the Swingline Lender contained in the immediately
preceding Section shall remain in effect during the period (the "Applicable
Period") from the date this Agreement first becomes effective to the first
to occur of the following: (a) December 28, 1999 and (b) the Borrower shall
fail to deliver to the Lenders the financial statements and opinion of
accountants as and when required under Section 6 of this Agreement. In
addition, the Applicable Period shall also terminate without any such
election or notice or any other action by the Agent, the Lenders, the
Swingline Lender or any other Person upon the occurrence of any Event of
Default specified in Section 10.1.(e) or (f) of the Credit Agreement or any
other Default or Event of Default other than the Existing Defaults.
Section 3. Limitation on Outstandings. During the Applicable
Period and notwithstanding any term of the Credit Agreement or any other
Loan Document, the Borrower agrees that at no time shall it permit the
aggregate principal amount of all outstanding Revolving Loans, together
with the aggregate principal amount of all outstanding Bid Rate Loans, the
aggregate principal amount of all outstanding Swingline Loans and the
aggregate amount of all Letter of Credit Liabilities (all such amounts
collectively referred to as the "Outstanding Credit"), to exceed
$235,000,000. If at any time the Outstanding Credit exceeds $235,000,000,
the Borrower shall immediately pay to the Agent for the account of the
Lenders, or the Swingline Lender, as the case may be, the amount of such
excess.
Section 4. Amendments to Credit Agreement. The parties hereto
agree that the Credit Agreement is amended as follows:
(a) Section 1.1 of the Credit Agreement is amended by adding the
definitions of the following terms thereto in the appropriate alphabetical
order:
"AVAILABLE CASH" means the aggregate amount of all
available cash, cash equivalents and other funds on deposit in,
held in or credited, to any deposit account, savings account,
investment account or other similar account maintained by the
Borrower or any Restricted Subsidiary with any financial
institution or any other Person.
"OUTSTANDING CREDIT" has the meaning given that term in
Section 2.8.(b)(i).
(b) The Credit Agreement is amended by deleting Section 2.8.(b) in
its entirety and substituting in its place the following:
(b) Mandatory.
(i) Outstandings in Excess of Commitments. If at
any time the aggregate principal amount of all
outstanding Revolving Loans, together with the aggregate
amount of all Letter of Credit Liabilities, the aggregate
principal amount of all outstanding Swingline Loans and
the aggregate principal amount of all outstanding Bid
Rate Loans (all such amounts collectively referred to as
the ("Outstanding Credit"), exceeds the aggregate amount
of the Commitments in effect at such time, the Borrower
shall immediately pay to the Agent for the accounts of
the Lenders the amount of such excess.
(ii) Excess Available Cash. If at any time the
aggregate amount of Available Cash shall exceed
$5,000,000, then the Borrower shall immediately pay to
the Agent for the account of the Lenders, or the
Swingline Lender, as the case may be, the amount of such
excess.
(iii) Application of Mandatory Prepayments. Any
payment received by the Agent as a result of the
immediately preceding clauses (i) or (ii), shall be
applied first to pay all amounts of principal outstanding
on the Swingline Loans and then to pay all amounts of
principal outstanding on the other Loans and any
Reimbursement Obligations pro rata in accordance with
Section 3.2. Subject to the immediately following clause
(iv), if the Borrower is required to pay any outstanding
LIBOR Loans by reason of this subsection (b) prior to the
end of the applicable Interest Period therefor, the
Borrower shall pay all amounts due under Section 4.4.
(iv) Investment of Certain Payments. With
respect to any payment received by the Agent as a result
of the immediately preceding clause (ii), if (x) in the
judgment of the Agent such payment was received late
enough in the day that the application of such payment
would not be practicable on such day or (y) the amount of
such payment exceeds the amount of outstanding Swingline
Loans and other Loans which can be prepaid without any
amounts being payable under Section 4.4, then the Agent
shall invest such payment, in the case of clause (x), or
such excess, in the case of clause (y), in such cash
equivalents or other investments as the Agent shall
determine in its sole discretion until the Agent has
determined that the application of such payment (or
excess) is practicable or will not result in any amounts
being payable under Section 4.4. All such investments
shall be held in the name of, and be under the sole
dominion and control of, the Agent.
(c) The Credit Agreement is amended by deleting Exhibit B thereto
and substituting in its place Exhibit B attached hereto.
(d) The Credit Agreement is amended by deleting Exhibit E thereto
and substituting in its place Exhibit E attached hereto.
The amendments contained in this Section shall become effective upon the
effectiveness of this Agreement and shall be deemed to have prospective
application only. Upon the termination of the Applicable Period such
amendments shall be deemed to be null and void.
Section 5. Delivery of Weekly Cash Budget. No later than 5:00 p.m.
on October 5, 1999, the Borrower agrees to deliver to the Agent a budget
setting forth for each calendar week from the date hereof through and
including the last week of the month of October 1999, the projected cash
needs of the Borrower for each such week, such budget to be in form and
detail satisfactory to the Requisite Lenders.
Section 6. Extension of Time for Delivery of Audited Financial
Statements. The Borrower agrees to deliver to each Lender no later than
5:00 p.m., October 13, 1999, the following: (a) the financial statements
required to be delivered under Section 8.2. of the Credit Agreement for the
Borrower's fiscal year ended June 30, 1999, including all required
certifications, and accompanied by an unqualified opinion of the Borrower's
current independent certified public accountants containing no explanatory
paragraphs regarding the Borrower's or the Subsidiaries' status as a going
concern and (b) the Compliance Certificate, and the related letter from the
Borrower's independent accountants, both required under Section 8.3. of the
Credit Agreement to be delivered with such financial statements.
Section 7. Termination of Applicable Period under Third Amendment.
Upon, and simultaneously with, the effectiveness of this Agreement, the
Applicable Period (as defined in the Third Amendment) shall be terminated.
Section 8. Representations and Warranties of the Borrower. To
induce the Agent, the Lenders and the Swingline Lender to enter into this
Agreement, the Borrower represents and warrants to each of them as follows
as of the date hereof:
(a) Except for the Existing Defaults, no Default or Event of
Default has occurred and is continuing;
(b) The representations and warranties made or deemed made by the
Borrower in the Loan Documents to which it is a party, are true and correct
with the same force and effect as if made on and as of the date hereof
except to the extent that such representations and warranties expressly
relate solely to an earlier date (in which case such representations and
warranties were true and accurate on and as of such earlier date) and
except for changes in factual circumstances specifically and expressly
permitted under the Credit Agreement; provided, however, no representation
or warranty is made in this subsection solely to the extent such
representation or warranty cannot be made because of the existence of the
Existing Defaults;
(c) The Borrower has the right and power, and has taken all
necessary action to authorize it, to execute, deliver and perform this
Agreement, and to perform the Credit Agreement as amended by this
Agreement, in accordance with their respective terms. This Agreement has
been duly executed and delivered by the duly authorized officers of the
Borrower and each of this Agreement and the Credit Agreement as amended by
this Agreement is a legal, valid and binding obligation of the Borrower
enforceable against the Borrower in accordance with its respective terms
except as may be limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and general principles of equity; and
(d) The execution and delivery of this Agreement, and the
performance of each of this Agreement and the Credit Agreement as amended
by this Agreement, in accordance with its respective terms, do not and will
not, by the passage of time, the giving of notice, or otherwise: (i)
require any Governmental Approval or violate any Applicable Law relating to
the Borrower or any Subsidiary; (ii) conflict with, result in a breach of
or constitute a default under the certificate of incorporation or the
bylaws of the Borrower, or any indenture, agreement or other instrument to
which the Borrower or any Subsidiary is a party or by which the Borrower or
any Subsidiary or any of its respective properties may be bound; or (iii)
result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by the Borrower or
any Subsidiary.
Section 9. No Third Party Beneficiaries. Except for the Borrower,
the Lenders, the Swingline Lender and the Agent, no Person is intended to
be a beneficiary of this Agreement and no other Person shall be authorized
to rely upon the contents of this Agreement.
Section 10. No Waiver. The parties hereto confirm and agree that
none of the following is, nor shall any of the following be deemed or
construed in any way to be, a waiver of any Default or Event of Default
under the Agreement or any of the other Loan Documents, including without
limitation, any of the Existing Defaults: (a) the existence of this
Agreement and the agreement of the Lenders, the Agent and the Swingline
Lender to forbear as provided herein; (b) the amendments effected pursuant
to Section 4 above; or (c) the Agent, any Lender or the Swingline Lender
permitting any Credit Event to occur after the effectiveness of this
Agreement. In addition, each Lender confirms its continuing obligations (i)
to the Agent under Section 2.3.(j) regarding drawings on Letters of Credit
honored by the Agent and not reimbursed by the Borrower and (ii) to the
Swingline Lender under Section 2.4.(e) of the Credit Agreement to pay to
the Swingline Lender such Lender's Commitment Percentage of Swingline Loans
as provided in such Section.
Section 11. Effectiveness. This Agreement shall become effective
only upon its execution and delivery by the Borrower, the Requisite
Lenders, the Swingline Lender and the Agent, and shall be deemed to be
effective as of the date first written above.
Section 12. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Georgia.
Section 13. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall constitute an original,
but all of which taken together shall be one and the same instrument.
Section 14. Severability. If any provision of this Agreement shall
be determined to be invalid, then only such provision shall be invalid and
all other provisions of this Agreement shall remain effective and binding.
Section 15. Defined Terms. Terms not otherwise defined in this
Agreement which are defined in the Credit Agreement are used herewith with
the respective meanings given them in the Credit Agreement.
[Signatures on Following Page]
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to Credit Agreement to be executed as of the date first above
written.
THE BORROWER:
BIRMINGHAM STEEL CORPORATION
By:_________________________________
Name:__________________________
Title:_________________________
THE AGENT AND THE LENDERS:
BANK OF AMERICA, N.A., successor to
NationsBank, N.A.(South), as Agent,
as a Lender and as Swingline
Lender
By:_________________________________
Name:__________________________
Title:_________________________
PNC BANK, NATIONAL ASSOCIATION, as
Co-Agent and as a Lender
By:_________________________________
Name:__________________________
Title:_________________________
THE BANK OF NOVA SCOTIA, as Co-Agent
and as a Lender
By:_________________________________
Name:__________________________
Title:_________________________
[Signatures continued on the following page]
[SIGNATURE PAGE TO FOURTH AMENDMENT TO CREDIT AGREEMENT
DATED AS OF SEPTEMBER 28, 1999 WITH BIRMINGHAM STEEL CORPORATION]
THE BANK OF TOKYO - MITSUBISHI, LTD
ATLANTA AGENCY
By:_________________________________
Name:__________________________
Title:_________________________
CIBC INC.
By:_________________________________
Name:__________________________
Title:_________________________
AMSOUTH BANK
By:_________________________________
Name:__________________________
Title:_________________________
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:_________________________________
Name:__________________________
Title:_________________________
By:_________________________________
Name:__________________________
Title:_________________________
[Signatures continue on the following page]
[SIGNATURE PAGE TO FOURTH AMENDMENT TO CREDIT AGREEMENT
DATED AS OF SEPTEMBER 28, 1999 WITH BIRMINGHAM STEEL CORPORATION]
GENERAL ELECTRIC CAPITAL CORPORATION
By:_________________________________
Name:__________________________
Title:_________________________
BANK ONE, N.A., successor to The First
National Bank of Chicago
By:_________________________________
Name:__________________________
Title:_________________________
FIRST AMERICAN NATIONAL BANK
By:_________________________________
Name:__________________________
Title:_________________________
THE SANWA BANK, LIMITED
By:_________________________________
Name:__________________________
Title:_________________________
[Signatures continue on the following page]
[SIGNATURE PAGE TO FOURTH AMENDMENT TO CREDIT AGREEMENT
DATED AS OF SEPTEMBER 28, 1999 WITH BIRMINGHAM STEEL CORPORATION]
UBS AG, SAMFORD BRANCH, successor to
Union Bank of Switzerland,
New York Branch
By:_________________________________
Name:__________________________
Title:_________________________
By:_________________________________
Name:__________________________
Title:_________________________
EXHIBIT 99.1
BIRMINGHAM STEEL CORPORATION
POST OFFICE BOX 1208
BIRMINGHAM, AL 35201
PHONE (205) 970-1200
CONTACT: J. DANIEL GARRETT
VICE PRESIDENT-FINANCE & CONTROL
(205)970-1213
BIRMINGHAM STEEL REACHES INTERIM $235 MILLION FINANCING ACCORD
EXTENSION FILED FOR FILING OF FORM 10-K ANNUAL REPORT
BIRMINGHAM, Ala., Sept. 29, 1999 -- Birmingham Steel Corporation (NYSE: BIR)
today announced that it reached an agreement in principle with its existing
bank lenders to provide continued revolver financing in an amount up to
$235 million through December 28, 1999, subject to the execution of
definitive documentation and various terms and conditions. Separately, the
Company announced today that it has filed for a statutory 15-day extension
for the filing of its 1999 Annual Report on Form 10-K. The Company expects
that its Form 10-K will be filed on or before October 13, 1999. As of
September 28, 1999, there was approximately $216 million outstanding under
the Company's revolver and $280 million outstanding under the senior note
indentures.
On August 18, 1999, the Company announced a strategic
restructuring which includes, among other things, the sale of the Company's
Special Bar Quality division and its 50% ownership interest in American
Iron Reduction, LLC. Following the announcement of the restructure, on
September 15, 1999, the Company announced FY99 earnings of $1.19 per share
(excluding start-up expenses) from its Core Operations (Kanakee and Joliet,
Illinois; Birmingham, Alabama; Jackson, Mississippi; Seattle, Washington;
Cartersville, Georgia; and its various scrap operations exclusive of
Pacific Coast Recycling). In connection with the strategic reorganization,
the Company also announced for FY99 after-tax charges of $191.3 million
primarily related to discontinued operations.
The Company said that modifications to certain of its principal
debt agreements on a longer term basis are required as a result of the 1999
operating losses attributable to the SBQ division as well as the Company's
recent decision to pursue the restructuring. The Company confirmed that
negotiations are continuing with its principal creditors including its bank
lenders and senior noteholders on these matters. The Company said that its
Form 10-K could not be filed yesterday without unreasonable effort or
expense in the absence of an extension because the Company's audited
financial statements for 1999 should reflect the longer-term modifications
being sought from its principal lenders.
The interim financing accord announced today provides continued
financing through December 28, 1999 on a daily basis under the revolving
credit facility up to an aggregate balance of $235 million to bridge the
Company's financing requirements pending the completion of the longer-term
financing arrangements. Among the requirements under the interim financing
agreement is that the Company receive an unqualified opinion of its
independent auditors with no explanatory paragraphs by October 13, 1999,
which condition can be waived by a majority of the lenders under the
revolver facility. Following execution, the interim financing agreement
will also be filed with the Securities and Exchange Commission.
Except for historical information, the matters described in this
press release are forward-looking statements within the meaning of the
safe-harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially, including
economic conditions, market demand factors, equipment breakdowns or
failures, Birmingham Steel's success in implementing the restructuring
plan, the successful outcome of the continuing negotiations on longer-term
modifications to the Company's principal debt agreements and the continued
cooperation and forbearance of the Company's major creditor constituencies
in the interim, the Company's continued compliance with its interim
financing arrangements and its principal debt agreements as and when
modified, as well as other risks described from time to time in the
Company's periodic and special filings with the Securities and Exchange
Commission. Any forward-looking statements contained in this document speak
only as of the date hereof, and the Company disclaims any intent or
obligation to update such forward-looking statements.
-END-
