Amendment No. 7 to Credit Agreement among Metal Management, Inc., Lenders, and BT Commercial Corporation (May 31, 2000)

Summary

This amendment updates the existing credit agreement between Metal Management, Inc. (MTLM), its subsidiaries, BT Commercial Corporation (as agent and lender), and other lenders. The amendment revises key terms such as interest rate margins, extends the loan expiration date to March 31, 2004, and modifies provisions related to mergers, stock repurchases for employee incentive plans, and financial covenants. The changes become effective once all parties sign and required fees are paid. The agreement confirms that all other terms remain in effect and enforceable.

EX-10.8 4 0004.txt AMENDMENT NO. 7 TO CREDIT AGREEMENT 1 EXHIBIT 10.8 AMENDMENT NO. 7 TO CREDIT AGREEMENT THIS AMENDMENT NO. 7 TO CREDIT AGREEMENT ("AMENDMENT") is dated as of May 31, 2000, by and among METAL MANAGEMENT, INC., a Delaware corporation ("MTLM"), each of the corporations and other entities set forth on EXHIBIT A hereto (MTLM and each of such corporations and other entities sometimes hereinafter are referred to individually as a "BORROWER" and collectively as "BORROWERS"); MTLM, acting in its capacity as funds administrator for itself and the other Borrowers (in such capacity, the "FUNDS ADMINISTRATOR"); BT COMMERCIAL CORPORATION, a Delaware corporation (in its individual capacity, hereinafter referred to as "BTCC"), and the other financial institutions signatories hereto as lenders (BTCC and each of such other financial institutions hereinafter are referred to individually as a "LENDER" and collectively as "LENDERS"); and BTCC, acting in its capacity as agent (in such capacity, hereinafter referred to as the "AGENT") for itself and the other Lenders. Capitalized terms used herein but not otherwise defined herein shall have the respective meanings assigned to such terms in the Credit Agreement. WITNESSETH: WHEREAS, the Borrowers, the Funds Administrator, the Agent and the Lenders have entered into that certain Credit Agreement dated as of March 31, 1998, as amended (the "CREDIT AGREEMENT"), pursuant to which the Lenders have agreed to make certain loans and other financial accommodations to or for the account of the Borrowers; WHEREAS, the respective Borrowers have requested that the Agent and the Lenders further amend the Credit Agreement; and WHEREAS, the Agent and the Lenders have agreed to further amend the Credit Agreement on the terms and subject to the conditions hereinafter set forth; 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 respective parties hereto hereby agree as follows: AMENDMENT TO CREDIT AGREEMENT. Effective as of the date hereof, upon satisfaction of the conditions precedent set forth in SECTION 2 below, and in reliance upon the representations and warranties of the respective Borrowers and the Funds Administrator set forth herein, the Credit Agreement is hereby amended as follows: 1.1 The definition of the term "Applicable Margin" set forth in SECTION 1.1 of the Credit Agreement is hereby deleted in its entirety and the following language is hereby substituted therefor: APPLICABLE MARGIN shall mean (I) with respect to any Prime Rate Loan, one 2 and one-half percent (1.50%) and (II) with respect to any LIBOR Rate Loan, two and one-half percent (2.50%). 1.2 The definition of the term "Expiration Date" set forth in SECTION 1.1 of the Credit Agreement is hereby deleted in its entirety and the following language is hereby substituted therefor: EXPIRATION DATE means March 31, 2004. 1.3 The following defined term is hereby inserted in SECTION 1.1 of the Credit Agreement in the appropriate alphabetical order: SEVENTH AMENDMENT EFFECTIVE DATE means May 31, 2000. 1.4 SECTION 6.11 of the Credit Agreement is hereby amended by deleting the words "the Closing Date" set forth in the first line thereof and substituting therefor the words "the Seventh Amendment Effective Date." 1.5 SECTION 7.4 of the Credit Agreement is hereby amended by deleting the parenthetical set forth therein in its entirety and substituting therefor the following language: (except that any Borrower or any wholly-owned Subsidiary of any Borrower may merge with, or be dissolved into, any other Borrower, PROVIDED, THAT the Agent receives five (5) Business Days' prior written notice thereof) 1.6 SECTION 8.6 of the Credit Agreement is hereby amended by deleting CLAUSE (C) thereof in its entirety and substituting therefor the following language: (C) in connection with the merger or dissolution of any Borrower or any wholly-owned Subsidiary of any Borrower into any other Borrower, 1.7 SECTION 8.7 of the Credit Agreement is hereby amended by deleting CLAUSE (V) thereof in its entirety and substituting therefor the following language: (V) MTLM may make regularly scheduled payments of interest on the Subordinated Notes, so long as, in the case of each such payment, immediately before and after giving effect thereto, no Default or Event of Default shall have occurred and be continuing; 1.8 SECTION 8.7 of the Credit Agreement is hereby amended by (I) inserting the following language therein immediately following CLAUSE (VI) thereof and (II) redesignating CLAUSE (VII) thereof as clause "(viii)": (VII) so long as, in each case, before and after giving effect to each such 2 3 repurchase, no Default or Event of Default shall have occurred and be continuing, MTLM may repurchase shares of its capital stock for the purpose of redistributing such shares to management and other employees of the respective Credit Parties pursuant to a management stock option plan or similar employee incentive program duly established by the Board of Directors of MTLM (an "EMPLOYEE INCENTIVE PLAN"); PROVIDED, that (1) the aggregate consideration paid in connection with all such repurchases shall not exceed $2,000,000 and (2) concurrently with the making of any such repurchase, the Funds Administrator shall have delivered to the Agent a certificate executed by a Responsible Officer of the Funds Administrator, certifying (X) the total consideration paid in connection with such repurchase, together with a brief description thereof, and (Y) that the shares of capital stock so repurchased were repurchased solely for the purpose of redistributing such shares to management and other employees of the respective Credit Parties pursuant to an Employee Incentive Plan; and 1.9 SECTION 8.8(G)(II) of the Credit Agreement is hereby amended by deleting the reference to "1.0 to 1.0" set forth therein and substituting therefor a reference to "1.4 to 1.0." 1.10 ANNEX I of the Credit Agreement is hereby deleted in its entirety and EXHIBIT B attached hereto ("AMENDED ANNEX I") is hereby substituted therefor. Each of the Lenders hereby acknowledges and agrees that, upon effectiveness of this Amendment, such Lender's Commitment shall be as set forth on Amended Annex I. 1.11 PART 6.10(A), 6.10(B) AND 6.11 OF SCHEDULE B (DISCLOSURE SCHEDULES) to the Credit Agreement are hereby deleted in their entirety and the respective Schedules attached as EXHIBIT C hereto are hereby substituted therefor. CONDITIONS PRECEDENT. This Amendment shall become effective as of the date hereof, upon satisfaction of each of the following conditions: (A) the Agent shall have received a copy of this Amendment, duly executed and delivered by the all of the Lenders, each of the Borrowers and the Funds Administrator; and (B) the Agent shall have received in immediately available funds payment of all Fees due and payable under the Credit Documents on or prior to the date hereof. REPRESENTATIONS, WARRANTIES AND COVENANTS. 3.1 Each of the Borrowers and the Funds Administrator hereby represents and warrants to the Agent and each of the Lenders that, after before and after giving effect to this Amendment: (A) All representations and warranties contained in the Credit Agreement and the other Credit Documents are true and correct in all material 3 4 respects on and as of the date of this Amendment, in each case as if then made, other than representations and warranties that expressly relate solely to an earlier date (in which case such representations and warranties remain true and accurate on and as of such earlier date); (B) No Default or Event of Default has occurred which is continuing; (C) This Amendment, and the Credit Agreement, as amended hereby, constitute legal, valid and binding obligations of the Borrowers and the Funds Administrator, respectively, and are enforceable against each of the Borrowers and the Funds Administrator in accordance with their respective terms; and (D) The execution and delivery by the Borrowers and the Funds Administrator of this Amendment does not require the consent or approval of any Person, except such consents and approvals as have been obtained. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS. 4.1 Upon the effectiveness of this Amendment, each reference in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or words of like import, and each reference in each of the other Credit Documents to the "Credit Agreement" shall in each case mean and be a reference to the Credit Agreement as amended hereby. 4.2 Except as expressly set forth herein, (I) the execution and delivery of this Amendment shall in no way affect any of the respective rights, powers or remedies of the Agent or any of the Lenders with respect to any Event of Default nor constitute a waiver of any provision of the Credit Agreement or any of the other Credit Documents and (II) all of the respective terms and provisions of the Credit Agreement, the other Credit Documents and all other documents, instruments, amendments and agreements executed and/or delivered by any of the Borrowers and/or the Funds Administrator pursuant thereto or in connection therewith shall remain in full force and effect and are hereby ratified and confirmed in all respects. The execution and delivery of this Amendment by the Agent and each of the Lenders shall in no way obligate the Agent or any of the Lenders, at any time hereafter, to consent to any other amendment or modification of any term or provision of the Credit Agreement or any of the other Credit Documents, whether of a similar or different nature. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES. 4 5 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. COUNTERPARTS. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Any such counterpart which may be delivered by facsimile transmission shall be deemed the equivalent of an originally signed counterpart and shall be fully admissible in any enforcement proceedings regarding this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW] 5 6 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the date first set forth above. BT COMMERCIAL CORPORATION, in its individual capacity as a Lender and in its capacity as Agent By: /s/ Steve Friedlander ----------------------------- Name: Steve Friedlander Title: Vice President BANKERS TRUST COMPANY, in its capacity as successor Agent By: /s/ Sam Cardone ----------------------------- Name: Sam Cardone Title: Director 7 HELLER FINANCIAL, INC. By: /s/ Albert J. Forzano ------------------------------ Name: Albert J. Forzano Title: Vice President 8 FLEET CAPITAL CORPORATION By: /s/ Robert J. Lund ----------------------------- Name: Robert J. Lund Title: Vice President 9 LASALLE NATIONAL BANK By: /s/ Michael J. Vercota ----------------------------- Name: Michael J. Vercota Title: Assistant Vice President 10 CONGRESS FINANCIAL CORP. (CENTRAL) By: /s/ Andrew J. Heinz ----------------------------- Name: Andrew J. Heinz Title: Vice President 11 FINOVA CAPITAL CORPORATION By: /s/ Bruce J. Mettel ----------------------------- Name: Bruce J. Mettel Title: Vice President 12 PNC BUSINESS CREDIT By: /s/ James M. Steffy ----------------------------- Name: James M. Steffy Title: Vice President 13 IBJ WHITEHALL BUSINESS CREDIT CORPORATION By: /s/ Manuel R. Borges ------------------------------ Name: Manuel R. Borges Title: Assistant Vice President 14 NATIONAL BANK OF CANADA By: /s/ Leroy A. Irvin ----------------------------- Name: Leroy A. Irvin Title: Vice President & Manager By: /s/ Thomas W. Buda, Jr. ----------------------------- Name: Thomas W. Buda, Jr. Title: Vice President 15 METAL MANAGEMENT, INC., a Delaware corporation, in its individual capacity as a Borrower and in its capacity as Funds Administrator By: /s/ Robert C. Larry ----------------------------- Name: Robert C. Larry Title: EVP and CFO 16 CALIFORNIA METALS RECYCLING, INC. CIM TRUCKING, INC. FERREX TRADING CORPORATION FIRMA, INC. FIRMA PLASTIC CO., INC. FPX, INC. HOUSTON COMPRESSED STEEL CORPORATION HOUTEX METALS COMPANY, INC. MAC LEOD METALS CO. MTLM ARIZONA, INC. METAL MANAGEMENT AEROSPACE, INC. METAL MANAGEMENT ALABAMA, INC. METAL MANAGEMENT ARIZONA, L.L.C. METAL MANAGEMENT CONNECTICUT, INC. METAL MANAGEMENT INDIANA, INC. METAL MANAGEMENT GULF COAST, INC. METAL MANAGEMENT MEMPHIS, L.L.C. METAL MANAGEMENT MIDWEST, INC. METAL MANAGEMENT MISSISSIPPI, L.L.C. METAL MANAGEMENT NORTHEAST, INC. METAL MANAGEMENT OHIO, INC. METAL MANAGEMENT PITTSBURGH, INC. METAL MANAGEMENT REALTY, INC. METAL MANAGEMENT SERVICES, INC. METAL MANAGEMENT STAINLESS & ALLOY, INC. METAL MANAGEMENT WEST, INC. METAL MANAGEMENT WEST COAST HOLDINGS, INC. METAL MANAGEMENT S&A HOLDINGS, INC. PROLER SOUTHWEST INC. P. JOSEPH IRON & METAL, INC. TROJAN TRADING CO. By: /s/ Robert C. Larry -------------------------------- Name: Robert C. Larry Title: Vice President 17 RESERVE IRON & METAL LIMITED PARTNERSHIP By: P. JOSEPH IRON & METAL, INC., its general partner By: /s/ Robert C. Larry ----------------------------- Name: Robert C. Larry Title: VP 18 EXHIBIT A TO AMENDMENT NO.7 DATED AS OF MAY 31, 2000 OTHER BORROWERS 1. CALIFORNIA METALS RECYCLING, INC. 2. CIM TRUCKING, INC. 3. FERREX TRADING CORPORATION 4. FIRMA, INC. 5. FIRMA PLASTIC CO., INC. 6. FPX, INC. 7. HOUSTON COMPRESSED STEEL CORPORATION 8. HOUTEX METALS COMPANY, INC. 9. MAC LEOD METALS CO. 10. MTLM ARIZONA, INC. 11. METAL MANAGEMENT AEROSPACE, INC. 12. METAL MANAGEMENT ALABAMA, INC. 13. METAL MANAGEMENT ARIZONA, L.L.C. 14. METAL MANAGEMENT CONNECTICUT, INC. 15. METAL MANAGEMENT INDIANA, INC. 16. METAL MANAGEMENT GULF COAST, INC. 17. METAL MANAGEMENT MEMPHIS, L.L.C. 18. METAL MANAGEMENT MIDWEST, INC. 19. METAL MANAGEMENT MISSISSIPPI, L.L.C. 20. METAL MANAGEMENT NORTHEAST, INC. 21. METAL MANAGEMENT OHIO, INC. 22. METAL MANAGEMENT PITTSBURGH, INC. 23. METAL MANAGEMENT REALTY, INC. 24. METAL MANAGEMENT SERVICES, INC. 25. METAL MANAGEMENT STAINLESS & ALLOY, INC. 26. METAL MANAGEMENT WEST, INC. 27. METAL MANAGEMENT WEST COAST HOLDINGS, INC. 28. METAL MANAGEMENT S&A HOLDINGS, INC. 29. P. JOSEPH IRON & METAL, INC. 30. PROLER SOUTHWEST INC. 31. RESERVE IRON & METAL LIMITED PARTNERSHIP 32. TROJAN TRADING CO. 19 EXHIBIT B TO AMENDMENT NO.7 DATED AS OF MAY 31, 2000 AMENDED ANNEX I TO CREDIT AGREEMENT ATTACHED. 20 ANNEX I TO CREDIT AGREEMENT DATED AS OF MARCH 31, 1998 LIST OF LENDERS; COMMITMENT AMOUNTS; APPLICABLE LENDING OFFICES 1. BT COMMERCIAL CORPORATION 233 South Wacker Drive Suite 8400 - Sears Tower Chicago, IL 60606 COMMITMENT AMOUNT: $61,670,000 DOMESTIC LENDING OFFICE: 233 South Wacker Drive Suite 8400 - Sears Tower Chicago, IL 60606 LIBOR LENDING OFFICE: 233 South Wacker Drive Suite 8400 - Sears Tower Chicago, IL 60606 2. CONGRESS FINANCIAL CORP. (CENTRAL) 150 South Wacker Drive Suite 2200 Chicago, IL 60606-4401 COMMITMENT AMOUNT: $30,000,000 DOMESTIC LENDING OFFICE: 150 South Wacker Drive Suite 2200 Chicago, IL 60606-4401 LIBOR LENDING OFFICE: 150 South Wacker Drive Suite 2200 Chicago, IL 60606-4401 3. FINOVA CAPITAL CORPORATION 311 Wacker Drive Suite 4400 Chicago, IL 60606-6618 COMMITMENT AMOUNT: $20,000,000 21 DOMESTIC LENDING OFFICE: 311 Wacker Drive Suite 4400 Chicago, IL 60606-6618 LIBOR LENDING OFFICE: 311 Wacker Drive Suite 4400 Chicago, IL 60606-6618 4. FLEET CAPITAL CORPORATION 20800 Swenson Drive Suite 350 Waukesha, WI 53186 COMMITMENT AMOUNT: $31,665,000 DOMESTIC LENDING OFFICE: 20800 Swenson Drive Suite 350 Waukesha, WI 53186 LIBOR LENDING OFFICE: 20800 Swenson Drive Suite 350 Waukesha, WI 53186 5. HELLER BUSINESS CREDIT 150 East 42nd Street, 7th Floor New York, NY 10017 COMMITMENT AMOUNT: $25,000,000 DOMESTIC LENDING OFFICE: 150 East 42nd Street, 7th Floor New York, NY 10017 LIBOR LENDING OFFICE: 150 East 42nd Street, 7th Floor New York, NY 10017 6. IBJ WHITEHALL BUSINESS CREDIT One State Street, 6th Floor New York, NY 10004 COMMITMENT AMOUNT: $15,000,000 DOMESTIC LENDING OFFICE: One State Street, 6th Floor New York, NY 10004 LIBOR LENDING OFFICE: One State Street, 6th Floor New York, NY 10004 22 7. LASALLE BANK NATIONAL ASSOCIATION 135 South LaSalle Street Suite 305 SE Chicago, IL 60603 COMMITMENT AMOUNT: $31,665,000 DOMESTIC LENDING OFFICE: 135 South LaSalle Street Suite 305 SE Chicago, IL 60603 LIBOR LENDING OFFICE: 135 South LaSalle Street Suite 305 SE Chicago, IL 60603 8. NATIONAL BANK OF CANADA 225 West Washington Street Suite 1100 Chicago, IL 60606 COMMITMENT AMOUNT: $15,000,000 DOMESTIC LENDING OFFICE: 225 West Washington Street Suite 1100 Chicago, IL 60606 LIBOR LENDING OFFICE: 225 West Washington Street Suite 1100 Chicago, IL 60606 9. PNC BUSINESS CREDIT Two PNC Plaza, 18th Floor 620 Liberty Avenue Pittsburgh, PA 15222 COMMITMENT AMOUNT: $20,000,000 DOMESTIC LENDING OFFICE: Two PNC Plaza, 18th Floor 620 Liberty Avenue Pittsburgh, PA 15222 LIBOR LENDING OFFICE: Two PNC Plaza, 18th Floor 620 Liberty Avenue Pittsburgh, PA 15222 23 EXHIBIT C TO AMENDMENT NO.7 DATED AS OF MAY 31, 2000 AMENDED SCHEDULE S TO CREDIT AGREEMENT ATTACHED.