Exhibit Number 2(i)
Further Amendments to Definitive Agreements
dated as of July 24, 1986,
among
ECL Steel Inc.,
Inland Steel Electrogalvanizing Corporation,
Pre Finish Metals (EG) Incorporated,
Bethlehem Steel Corporation,
Inland Steel Company,
Inland Steel Industries, Inc.,
Pre Finish Metals Incorporated
and
Materials Sciences Corporation
Dated as of July 24, 1986
EGL Steel Inc. and Inland Steel Electrogalvanizing
Bethlehem Steel Corporation Corporation
000 Xxxx Xxxxx Xxxxxx Inland Steel Company
Xxxxxxxxx, Xxxxxxxxxxxx 00000 Inland Steel Industries, Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Pre Finish Metals (EG) Incorporated and
Pre Finish Metals Incorporated and
Material Sciences Corporation
0000 Xxxx Xxxxx Xxxxxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Re: Further Amendments to Definitive Agreements
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Dear Sirs:
Reference is made to the Partnership Agreement dated as of August 30,
1984 by and among EGL Steel Inc., Inland Steel Electrogalvanizing Corporation
and Pre Finish Metals (EG) Incorporated, pursuant to which Xxxxxxxxx Coatings,
An Illinois Partnership was formed, and to the various Definitive Agreements, as
amended, referred to therein. All capitalized terms in this letter agreement
which are defined in Appendix A to such Definitive Agreements, as amended
hereby, shall have the meaning herein as therein provided.
This letter agreement is a condition precedent to the closing of the
Project Lenders' Loans (as herein defined). Accordingly, the Partnership and
each of the Partners and their respective Guarantors hereby agree to the
following amendments to the Definitive Agreements:
Partnership Agreement
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1. Section 5.1, as previously amended, is hereby further amended to
read as follows:
May 17, 1999
Page 2
"5.1 Initial Term. The term of the Partnership ("Term")
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shall commence on the date hereof and shall continue until
June 30, 1998 unless (a) extended in accordance with
Section 5.2 hereof or (b) ended earlier by dissolution of
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the Partnership in accordance with Article XV hereof."
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2. The penultimate paragraph of Section 6.3 is hereby amended to
change the amount "$727,350" to "$750,000" and the amount $1,454,700" to
"$1,500,000".
3. Section 6.3, as previously amended is hereby amended to add at
the end of the penultimate paragraph and before the last paragraph thereof the
following:
"If the 'New Mortgage Financing' as defined in the
Sublease is not renewed after six years due to the failure
of any of the conditions set forth in subparagraphs (d),
(e), (f) or (g) of Section 1.01 of the note under the real
------------
estate portion of the Permanent Financing, and substitute
mortgage financing is thereafter procured as contemplated
by Section 30 of the Sublease, then to the extent that the
'Basic Rent' payable as a result of such substitute
financing exceeds the sum of the 'Equity Portion of the
Basic Rent' (as such quoted terms are defined in the
Sublease) plus principal and interest on the balance of
such note at then current mortgage rates (the 'Increased
Cost'), PFM EG shall be responsible to the Partnership for
such Increased Cost. If such 'New Mortgage Financing' is
not so renewed due to a failure of the condition set forth
in subparagraph (b) of Section 1.01 under such note, then
EGL Steel and Inland EG shall be jointly and severally
responsible to the Partnership for the resulting Increased
Cost. If for any other reason substitute mortgage financing
is procured in accordance with Section 30 of the Sublease
due to any default under any of the 'Loan Documents' (as
defined in such note) caused directly or indirectly by EGL
Steel, Inland EG, PFM EG, any of their respective
Guarantors or any combination thereof, then such defaulting
party or parties shall be responsible to the Partnership
for the resulting Increased Cost to be shared if more than
one such party is involved in an equitable manner.
The Sublease shall have a term extending to the end of
the Term of the Partnership, provided, however, that (1) if
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the Term of the Partnership is extended beyond June 30,
1998, then at the option of the Partnership, PFM shall
extend the term of the Sublease for up to six consecutive
additional terms of five years each to and including June
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May 17, 1999
Page 3
29, 2028 (the 'Extended Terms'), but not more than the
extended Term of the Partnership, and (2) if the
Partnership shall at the end of the Partnership Term assign
its rights under the Sublease to a party in which PFM has
no ownership interest, then at the option of such assignee,
PFM shall extend the term of the Sublease for one or more
of the Extended Terms, provided that concurrently with the
exercise of such option the assignee shall deliver to PFM a
written agreement reasonably satisfactory to PFM to pay to
PFM a reasonable fee for remaining as lessee under the
amended PFM Lease and as lessor under the Sublease based on
the credit standing of the assignee and the duration of the
Extended Terms. The amount of such fee shall be determined
by agreement of PFM and such assignee or, at the option of
either of them, by arbitration proceedings substantially
identical to those contemplated in Article XIV. If the
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Partnership or the assignee shall exercise any such option
to extend the term of the Sublease for an Extended Term, it
shall give written notice thereof to PFM not later than
nine months prior to the expiration of the then existing
term of the Sublease. Notwithstanding the foregoing, (a) if
PFM has no ownership interest in such assignee, PFM, the
Partnership and such assignee shall use their best efforts
to obtain the approval of the lessor under the amended PFM
Lease to an assignment of the amended PFM Lease to the
assignee and a termination and cancellation of the
Sublease, with the effect that PFM would be relieved of all
liability thereafter arising under the amended PFM Lease
and the Sublease would terminate, and (b) PFM shall have no
obligation to extend the term of the Sublease if the term
thereof shall have expired or be terminated pursuant to any
provision thereof or if PFM shall not have received notice
of exercise of the option to extend as specified above."
4. Article VI is hereby amended to add at the end of Section 5.3
thereof the following:
"6.3A Performance of Credit Agreements. (A) If upon
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the occurrence of a Designated Event relating to any
Partner or its Guarantor(s), the Project Lenders shall
apply any funds held under the Cash Collateral Agreement to
the payment of the series of Notes and/or Promissory Notes
(as such terms are defined in the Credit Agreements)
relating to such defaulting Partner and its Guarantor(s)
under the Credit Agreements, such defaulting Partner or its
Guarantor(s), jointly and severally, shall within two
business days
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May 17, 1999
Page 4
after such application of funds reimburse to each of the
other Partners the amount of such funds so applied that was
paid by such other Partner to the "Accounts" as defined in
the Cash Collateral Agreement and all interest accrued
therein to the date of such application.
(b) If upon the occurrence of a Designated Event
relating to any Partner or its Guarantor(s) the series of
Notes and/or Promissory Notes (as such terms are defined in
the Credit Agreements) relating to such defaulting Partner
and its Guarantor(s) under the Credit Agreements shall be
accelerated and become forthwith due and payable, such
defaulting Partner or its Guarantor(s), jointly and
severally, shall within two business days after such
acceleration either (i) pay for the benefit of the
Partnership and in accordance with the guaranty of its
Guarantor(s) to the Project Lenders all principal, interest
and other amounts remaining due and payable under the
series of Notes and/or Promissory Notes so accelerated, or
(ii) cause such acceleration to be withdrawn or otherwise
annulled by a written instrument signed by the Project
Lenders who took such action in form and substance
reasonably satisfactory to all other Partners. In the event
that such defaulting Partner and its Guarantor(s) shall
fail to perform their obligations under the preceding
sentence within the time specified therein, then at all
times thereafter any other Partner or both other Partners
(acting in proportion to their Financial Interests or such
other proportion as such other Partners shall agree) shall
be deemed to be authorized by the defaulting partner and
its Guarantor(s) to take from time to time any one or both
of the following actions:
(i) If the "Designated Event" involves a monetary default referred to
in paragraph (h) or (i) of Section 6.02 of each of the Credit Agreements,
to pay such sums as shall be necessary to cure such monetary default; and
(ii) In any case, to give to the Project Lenders notice of repayment
pursuant to Section 2.10(b) of the Term Loan Agreement and Section 2.08(b)
of the Restated Credit Facility Agreement and thereafter to repay the
series of Notes or Promissory Notes so accelerated and the corresponding
series of Promissory Notes or Notes under the other Credit Agreement, as
contemplated by such Section 2.10(b) and Section 2.08(b)."
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May 17, 1999
Page 5
The defaulting Partner or its Guarantor(s), jointly and severally, shall
reimburse to the other Partner or Partners making such payment or payments all
monies so expended upon demand therefor in accordance with Section 17.5.
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"(c) Upon the payment by such defaulting Partner (or its Guarantor(s)) of
the amounts required by paragraph (a) or (b) of this Section within the time
specified therein, the defaulting Partner or Guarantor(s) making such payments
(i) shall be deemed to have made a Parent Loan to the Partnership in the amount
of the principal of the Notes and/or Promissory Notes so retired and bearing
interest and having payment terms, subordination and security corresponding to
the balance of the Parent Loans then outstanding and (ii) shall be entitled to
an appropriate promissory note of the Partnership to evidence such Parent Loan.
(d) Upon any failure of the defaulting Partner or its Guarantor(s) to make
any reimbursement required by under paragraphs (a) or (b) of this Section 6.3A
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within the time specified therein, then at all times thereafter the other
Partner or Partners, at its or their joint option and in proportion to the
amounts of reimbursement due to each of them, if any, shall be entitled to
purchase the entire Partner's Interest of the defaulting Partner (except, at the
option of the purchasing Partner or Partners, the Parent Loans of its
Guarantor(s)) in accordance with Section 13.3A. In addition, the defaulting
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Partner hereby agrees to indemnify and hold harmless the Partnership, the other
Partners and their respective Guarantor(s) from and against any and all loss,
cost or damage, including but not limited to reasonable attorneys' fees and
expenses, incurred by the Partnership, such other Partners and their respective
Guarantor(s) as a result of any "Designated Event" under any of the Project
Lender Loans caused by such Partner or its Guarantor(s), whether or not
resulting in the application of funds held under the Cash Collateral Agreement
or the acceleration of any Notes or Promissory Notes, including but not limited
to any loss, cost and damage incurred as a result of any actions taken by such
partners or their Guarantor(s) to cure such Designated Event."
5. Section 10.2(b) is hereby amended by adding at the end thereof
the following:
"Notwithstanding the foregoing, (1) this Section 10.2(b) shall not
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apply to the portion of the Permanent Financing consisting of the
Parent Loans and (2) payments to such reserve may be made directly by
the Primary Purchasers pursuant to the Coating Agreements and by the
Operator pursuant to the Operating Agreement in lieu of such payments
by the Partnership."
6. Section 10.2(c) is hereby amended to read as follows:
"(c) Subject to any requirements of the Project Lenders' Loans,
the Operating Partner shall receive an Operator's Fee for all coating
services rendered by it in its capacity as Operator in accordance with
the Operating Agreement and in
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May 17, 1999
Page 6
connection therewith the Operator may cause the Partnership to apply
funds received on Per Ton Financing Payments pursuant to Section 6.10
------------
of the Coating Agreements to the payment of the Fixed Portion of the
Operator's Fee payable pursuant to Section 6.2 of the Operating
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Agreement."
7. The first paragraph of Section 13.3 is hereby amended by adding
at the end thereof the following:
"Notwithstanding the foregoing, this right of refusal shall be subject
to the rights provided to Partners pursuant to Section 13.3A."
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8. The second paragraph of Section 13.3 is hereby amended by adding
at the end thereof the following:
"Notwithstanding the foregoing, if the consummation of such purchase
shall be subject to the review or approval of any court, such period
of sixty days shall be extended until the expiration of ten days after
the completion of such court proceedings."
9. Article XIII is hereby amended by adding at the end of Section
13.3 thereof the following:
"13.3A Defaulting Partner's Interest. (a) Notwithstanding the
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foregoing provisions of this Article XIII, if any defaulting Partner
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and its Guarantor(s) shall fail to make any reimbursement payment
described in paragraphs (a) or (b) of Section 6.3A by the time
------------
specified therein, the other Partner or Partners, in proportion to the
amounts of reimbursement due each of them, if any, shall have the
first right to purchase the entire Partner's Interest of such
defaulting Partner (except, at the option of the purchasing Partner or
Partners, the Parent Loans of its Guarantor(s)) in the same manner and
at the same price as provided in Section 13.3, provided, however, that
------------ -------- -------
at the option of the purchasing Partner or Partners, the reimbursement
payment and any and all other indemnification payments then known to
be due to the purchasing Partner or Partners pursuant to Section 6.3A
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and remaining unpaid as of the closing of such purchase shall be set
off, dollar for dollar, against the purchase price for such Partner's
Interest. Upon the purchasing Partner or partners giving the written
notice of exercise of such right to purchase, (i) the defaulting
Partner shall have no further interest in the Partnership other than
(A) the right to receive the purchase price for its Partner's Interest
in accordance with this Article XIII and (B) any Parent Loans which
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the purchasing Partner or Partners elect not to purchase and (ii) the
remaining Partners and their Guarantor(s) shall promptly (A) amend the
Definitive Agreements to adjust
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May 17, 1999
Page 7
the Financial and Voting Interests of the remaining Partners so that
each purchasing Partner receives that fraction of the Financial and
Voting Interests of the defaulting Partner which is equal to the
fraction of the total reimbursement payable by the defaulting Partner
that was due to such purchasing Partner and (B) negotiate in good
faith and enter into such additions, deletions and other amendments to
the Definitive Agreements as shall be necessary or appropriate to
equitably share the burdens caused by the absence of the bankrupt
Partner and its Guarantor(s) and to take into account all related
changed circumstances, provided, that to the extent of any
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disagreement with respect thereto, either of the remaining Partners
may elect to have the disagreement resolved in accordance with the
informal dispute resolution procedures set forth in Article XIV.
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(b) Anything in clause (ii) of the immediately preceding
paragraph to the contrary notwithstanding, if the Designated Event
which resulted in the obligation to make reimbursement payments
pursuant to Section 6.3A causes the Partnership to dissolve by
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operation of law, each of the remaining Partners agrees for the
benefit of the other remaining Partner (and not for the benefit of the
bankrupt Partner) to promptly form a successor partnership for the
purposes set forth in Article II and in connection therewith the
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remaining Partners and their Guarantor(s), subject to any approvals
required by the Project Lenders, shall negotiate in good faith and
enter into or reaffirm agreements substantially similar to the
Definitive Agreements to carry on the business theretofore conducted
by the Partnership, but excluding in each case the bankrupt Partner
and its Affiliates, together with such additions, deletions or other
amendments thereto as shall be necessary or appropriate to share the
burdens caused by the absence of the bankrupt Partner and its
Guarantor(s) and to take into account all related changed
circumstances; provided that to the extent of any disagreement with
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respect thereto, either of the remaining Partners may elect to have
the disagreement resolved in accordance with the dispute resolution
procedures set forth in Article XIV.
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(c) If pursuant to paragraph (a) of this Section 13.3A, the
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purchasing Partner or Partners shall elect not to purchase the Parent
Loans of the Guarantors of the defaulting Partner, such Parent Loans
shall continue as obligations of the Partnership (or in circumstances
contemplated by paragraph (b) of this Section 13.3A, assumed by the
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successor partnership formed in accordance therewith) and paid or
otherwise performed in accordance with the terms thereof."
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May 17, 1999
Page 8
10. Section 13.4 is hereby amended to read as follows:
"13.4 Survival of Restrictions. The restrictions on transfer
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and the right of first refusal contained in this Article XIII shall
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survive any termination of this Partnership Agreement, including any
dissolution of the Partnership contemplated by paragraph (b) of
Section 13.3A, and shall continue to be binding on each of the
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partners and their respective successors and assigns until such time
as the Partnership shall be wound up and liquidated in accordance with
Article XV."
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11. Section 15.2 is hereby amended by adding at the end thereof the
following:
"(h) Notwithstanding the foregoing, the provisions of Article
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XIII shall take precedence over this Section 15.2 in the case of
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dissolution of the Partnership by operation of law in the
circumstances contemplated by paragraph (b) of Section 13.3A, provided
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that the Partner's Interest of the bankrupt Partner (other than the
Parent Loans of its Guarantor(s)) is purchased by one or more of the
other Partners pursuant to Article XIII."
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Coating Agreements
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1. Article II is hereby amended to add at the end thereof the
following:
"Notwithstanding the foregoing, (a) the Partnership shall have no
obligation to sell to Purchaser coating services under this Agreement
during any period that Purchaser or its Subsidiary shall be in default
under its obligations under Section 6.3A of the Partnership Agreement or
------------
Section 6.12 of the Parent Agreement and (b) the Partnership may, at any
------------
time after any other Partner gives the notice of exercise of the right to
purchase the Partner's Interest of the Subsidiary of Purchaser pursuant to
Section 13.A of the Partnership Agreement, terminate by notice to Purchaser
------------
all of Purchaser's rights and obligations under this Agreement arising
after the giving of such notice of termination."
2. Section 6.1 is hereby amended to add at the end thereof the
following:
"Notwithstanding the foregoing, each payment by Purchaser into the Project
Lenders' Account shall be deemed to have been made fifty percent (50%)
pursuant to Section 6.2 and fifty percent (50%) pursuant to Section 6.9
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hereof."
3. The second sentence of Section 4.3(a) is hereby deleted and the
following added:
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May 17, 1999
Page 9
"Each Coating Fee Advance shall be paid monthly on or before the last
business day of each calendar month of the Phase-in Period, commencing
April 30, 1986 and ending September 30, 1986 in such a manner that the
payment funds are available to the Partnership not later than the end of
such month. Notwithstanding the foregoing, commencing with the Coating Fee
Advance due on July 31, 1986, Purchaser shall pay a part of each Coating
Fee Advance equal to twenty-five percent (25%) of the Periodic Financing
Costs accrued by the Partnership under the Project Lenders' Loans and the
Sublease during the particular Reporting Period directly to the Project
Lenders' Account at the same time and in the same manner specified in this
Section 4.3 for payment, in lieu of paying such part to the Partnership as
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hereinabove provided."
4. Section 5.4 is hereby amended to change the references to
"Section 7.5" of the Operating Agreement to "Section 7.4" of such agreement.
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5. The first sentence of Section 6.2 is hereby amended by deleting
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the clause "commencing with the calendar month in which the Commissioning Date
occurs" and by inserting in lieu thereof the words "commencing with the month of
October, 1986".
6. Section 6.2 is hereby further amended to add at the end thereof
the following:
"Notwithstanding the foregoing, commencing with the Fixed Portion of the
Coating Fee due on October 31, 1986, Purchaser shall pay a part of each
Fixed Portion of the Coating Fee equal to twenty-five percent (25%) of the
Periodic Financing Costs accrued by the Partnership under the Project
Lenders' Loans and the Sublease during the particular Reporting Period
directly to the Project Lenders' Account at the same time and in the same
manner specified in this Section 6.3 for payment, in lieu of paying such
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part to the Partnership as hereinabove provided."
7. Section 6.9 is hereby amended to add at the end thereof the
following:
"Notwithstanding the foregoing, commencing with the Reporting Period ended
July 31, 1986, Purchaser shall pay a part of each Fixed Financing Costs
Payment equal to twenty-five percent (25%) of the Periodic Financing Costs
accrued by the Partnership under the Project Lenders' Loans and Sublease
during the particular Reporting Period directly to the Project Lenders'
Account at the same time and in the same manner specified in this Section
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6.9 for payment, in lieu of paying such part to the Partnership as
---
hereinabove provided."
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May 17, 1999
Page 10
8. Section 7.7 is hereby amended to add at the end thereof the
following:
"Notwithstanding the foregoing, the Partnership may assign its rights
hereunder to an agent of the Project Lenders as contemplated by to Section
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1 of the Security Agreement."
-
Operating Agreement
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1. Section 2.3 is hereby amended to add at the end thereof the
following:
"Notwithstanding the foregoing, the Partnership may, at any time after the
giving of the notice of exercise of the right to purchase the Partner's
Interest of the Operator pursuant to Section 13.3A of the Partnership
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Agreement, terminate by notice to Operator all of Operator's rights and
obligations under this Agreement arising after the giving of such notice of
termination."
2. Section 3.5 is hereby deleted and replaced with the following:
"3.5 Financing Costs. (a) Operator agrees to pay to the Project
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Lenders' Account, commencing with the Reporting Period ended July 31, 1986
and at the end of each Reporting Period thereafter, all Periodic Financing
Costs accrued by the Partnership under the Project Lenders' Loans and the
Sublease during the particular Reporting Period in excess of the total of
the parts of the Fixed Financing Costs Payments and the Fixed Portions of
the Coating Fee (or, in the case of the Phase-in Period, the Coating Fee
Advances) which under Sections 6.9 and 6.2 (or Section 4.3) of the Coating
------------ --- -----------
Agreements, the Primary Purchasers are required to pay to the Project
Lenders' Account with respect to the particular Reporting Period, provided
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that in the event that one or both of the Primary Purchasers should fail to
pay any amount which they are so required to pay to the Project Lenders'
Account, Operator shall be responsible for and shall pay to the Project
Lenders' Account an amount equal to fifty percent (50%) of the amount which
such Primary Purchasers shall have so failed to pay thereto, and no more.
(b) In addition, Operator agrees to pay to the Partnership,
commencing with the Reporting Period ended July 31, 1986 and at the end of
each Reporting Period thereafter, (i) all Financing Costs accrued by the
Partnership with respect to the Parent Loans during the particular
Reporting Period in excess of the total of the parts of the Fixed Financing
Cost Payments and Per Ton Financing Costs Payments which under Sections 6.9
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and 6. are required to pay to the Partnership with respect to (A) the
----
particular Reporting Period and (B) the production of EG Product for the
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May 17, 1999
Page 11
Primary Purchasers during such Reporting Period, and (ii) an amount
equal to the excess, if any, of (A) the parts of the Fixed Portions
of the Coating Fee (or, in the case of the Phase-in Period, the
Coating Fee ____ Advances) which under Section 6.2 (or Section )
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of the Coating Agreements, the Primary Purchasers paid to the Project
Lenders' Account with respect to the particular Reporting Period,
over (B) _____ Per Ton Financing Costs Payments which under Section
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6.10 of the Coating Agreements, the Primary Purchasers paid to the
----
Partnership with respect to the production of EG Product for the
Primary Purchasers during such Reporting Period, provided that in no
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event shall Operator be responsible for more than fifty percent (50%)
of the total Financing Costs accrued by the Partnership with respect
to the Parent Loans during the particular Reporting Period."
3. Paragraph (a) of Section 3.8 is hereby amended to read as
follows:
"3.8 Insurance. (a) Subject to paragraph (b) hereof, Operator
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will purchase and maintain such insurance on its EG Facility, and the
operations conducted thereat, as is commercially reasonable in the
circumstances."
4. Section 6.3(b) is hereby amended to add at the end thereof the
following:
"Notwithstanding the foregoing, the Partnership may, at its option,
during any period that Operator shall be in default under its
obligations under Section 6.3A of the Partnership Agreement, wi___
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from the Variable Portion Fee Per Ton of EG Product the amount
specified in clause (viii) of Exhibit (representing the assumed
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profit to Operator) pay such amount to the Partners or Guarantors
whom such obligations are owed, until such time all such obligations
have been paid."
5. Section 7.3(b) is hereby amended to change the reference to
"Section 7.5" to "Section 7.4".
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6. Section 11.7 is hereby amended to add to the end thereof the
following:
"Notwithstanding the foregoing, the Partnership _____ assign its
rights hereunder to an agent of the Project Lenders as contemplated
by Section 1 of the Security Agreement."
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May 17, 1999
Page 12
Construction Agreement
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1. Section 12 is hereby amended to add a___ thereof the
following:
"Notwithstanding the foregoing, the Partnership _____ assign its
rights hereunder to an agent of the Project Lenders as contemplated
by Section 1 of the Security Agreement."
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Parent Agreement
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1. Section 2.1 is hereby amended to add _____ thereof the following
new paragraph (e):
"(e) Guaranty of Inland Industries. Inland Industries, as direct
-----------------------------
obligor and not merely ___ surety, hereby irrevocably and
unconditionally guarantees only to the Partnership, the other
Guarantors and their Subsidiaries and their respective successors and
assigns" (i) the full, _____ and complete performance and/or payment
when _____ (including but not limited to principal, ________
interest, fees, expenses, or other payment or obligation) to be
performed or paid by Inland ______, Inland EG (including any
Affiliate of Inland ____ Inland EG to whom any Partner's Interest shall
_____ sold, transferred or assigned pursuant to Section 13.2 of the
------------
Partnership Agreement) pursuant to any of the Definitive Agreements
to which either of them is a party; and (ii) the payment, upon _____
of all reasonable costs and expenses (including time to time in
effect, affecting creditors' rights attorneys' fees and expenses) as
shall have been expended or incurred by the Partnership, the other
Guarantors or their respective Subsidiaries, in the enforcement of
any agreement, obligation or duty to be performed by Inland or by
Inland EG pursuant to any of the Definitive Agreements to which
either of them is a party."
2. Article IV is hereby amended as follows:
"ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF INLAND AND INLAND INDUSTRIES
Inland Industries and Inland hereby jointly and severally
represent and warrant to Bethlehem, PFM and MSC as follows:
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May 17, 1999
Page 13
Section 4.1 Power and Authority. Each of Inland
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Industries, Inland and Inland EG: (a) is a corporation duly
incorporated, validly existing and in good standing under
the laws of the state of its incorporation; (b) is duly
qualified to transact business in all jurisdictions where
such qualification is required; and (c) has the corporate
power and authority to (i) own, lease and operate its
properties and carry on its business (including all aspects
of this Agreement or its participation in the Partnership),
(ii) execute and deliver each Definitive Agreement to which
it is a party, and (iii) perform and observe the terms and
conditions of such respective agreements.
Section 4.2 Due Authorization. Each of Inland
----------- -----------------
Industries, Inland and Inland EG has taken all requisite
corporate action to authorize the execution and delivery of
the Definitive Agreements and the performance and
observance of the terms and conditions thereof. Each of the
Definitive Agreements required to be executed and delivered
by Inland Industries, Inland and Inland EG has been duly
authorized, executed and delivered by Inland Industries,
Inland or Inland EG, as the case may be, and constitutes
the legal, valid and binding obligation of Inland
Industries, Inland or Inland EG, as the case may be,
enforceable in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium, reorganization or similar laws,
from generally and limitations on the availability of
equitable remedies), assuming the due execution and
delivery thereof by the other parties thereto.
Section 4.3 No Violation. Neither the execution or
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delivery of any Definitive Agreement required to be
executed and delivered by Inland Industries, Inland or
Inland EG, as the case may be, nor the consummation of the
transactions contemplated thereunder will (i) violate any
provisions of the Certificate of Incorporation or By-laws
of each of them, (ii) violate, result in the termination
of, or constitute a default under the terms of, any
mortgage, bond, indenture, agreement, lease or other
instrument or obligation to which either of them is a party
or by which either of their respective properties or assets
may be bound, in each case which would materially and
adversely affect the ability of Inland Industries, Inland
or Inland EG to perform their respective obligations under
this Agreement or any other Definitive Agreement, (iii)
result in the creation of any lien,
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May 17, 1999
Page 14
charge or encumbrance upon any of their respective
properties pursuant to the terms of any such mortgage,
bond, indenture, agreement, lease or other instrument or
obligation, in each case which would materially and
adversely affect the ability of Inland Industries, Inland
or Inland EG to perform their respective obligations under
this Agreement or any other Definitive Agreement, (iv)
violate any judgment, order, injunction, decree, or award
of any court, administrative agency or governmental body
against, or binding upon, either of them or upon their
respective businesses or properties, or (v) to the best
knowledge of Inland Industries or Inland constitute a
violation of either of them or Inland EG of any law or
regulation of any jurisdiction insofar as such law or
regulation relates to any of them or to their respective
businesses or properties.
Section 4.4 Consents, etc. To the best knowledge of
----------- -------------
Inland Industries or Inland, no authorization, consent,
approval, license, exemption of or filing or registration
with any governmental department or agency is or will be
necessary for the execution and delivery of any of the
Definitive Agreements by Inland Industries, Inland or
Inland EG.
Section 4.5 Disclosures; No Omissions. (a) As of the
----------- -------------------------
date hereof, none of the representations and warranties of Inland
Industries and Inland in this Agreement contains any untrue statement
of a material fact or omits to state a material fact necessary to make
the representations and warranties herein, in the light of the
circumstances under which they are made, not misleading.
(b) Inland Industries and Inland acknowledge that
Inland has given to the other Guarantors information about
itself and other information consisting of projections and
estimates about the proposed construction and operation of
the EG Facility which have been included in the Definitive
Agreements or have materially affected the provisions
contained therein. A portion of such information,
projections and estimates relate to matters with respect to
which Inland lacks material information; and while Inland
Industries and Inland expressly disclaim any representation
or warranty with respect to the accuracy or completeness of
such information, projections and estimates (other than as
expressly set forth in this Agreement), Inland Industries
and Inland nevertheless do hereby represent and warrant to
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May 17, 1999
Page 15
the other Guarantors that Inland (i) has given such
information, projections and estimates to the other
Guarantors in good faith based, in the reasonable judgment
of Inland, on whatever material information is known to it
as of the date hereof and (ii) has provided to the other
Guarantors all information known to it as of the date
hereof necessary, in the reasonable judgment of Inland, to
make such information, projections and estimates not
materially misleading."
3. Article VI is hereby amended by adding at the end thereof the
following:
"Section 6.12 Certain Indemnification. If a
------------ -----------------------
"Designated Event" (as defined in Section 6.02 of each of
the Credit Agreements) relating to any Guarantor or its
Subsidiary shall occur, whether or not resulting in the
application of funds held under the Cash Collateral
Agreement or the acceleration of any Notes or Promissory
Notes, such Guarantor shall promptly reimburse the other
Guarantors and their Subsidiaries for all moneys expended
and otherwise indemnify and hold harmless the Partnership,
the other Guarantors and their respective Subsidiaries from
and against any and all loss, cost or damage, including but
not limited to reasonable attorneys' fees and expenses,
incurred by the Partnership, such other Guarantors and
their respective Subsidiaries as result of such "Designated
Event," including but not limited to any and all moneys
expended and loss, cost and damage incurred as a result of
any actions taken by such Guarantors and their Subsidiaries
pursuant to Section 6.3A of the Partnership Agreement to
------------
cure such Designated Event or to pay such accelerated Notes
and/or Promissory Notes."
4. Section 7.4 is hereby amended to provide that the address for
notices to Inland Industries shall be the same as the address for notices to
Inland.
5. Section 7.5 is hereby amended to add at the end thereof the
following:
"Without limiting the generality of the foregoing, each
Guarantor agrees that it will not directly or indirectly
sell, lease, transfer or otherwise dispose of all or any
substantial part of its assets to any Affiliate, unless
such Affiliate becomes jointly and severally liable under
this Agreement."
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May 17, 1999
Page 16
Appendix A
----------
1. Appendix A to the Definitive Agreements is hereby amended to add
the following:
"CABV" shall mean Creditanstalt-Bankverein, a bank incorporated
under Austrian law.
"Cash Collateral Agreement" shall mean that certain Cash
Collateral Agreement dated as of July 24, 1986, as amended from time
to time, among EGL Steel, Inland EG, PFM EG, the banks parties to the
Term Loan Agreement, CABV, Creditanstalt, as agent for the Project
Lenders, and Toledo Trust Company, as custodian of such agent.
"Credit Agreements" shall mean the Term Loan Agreement dated as
of July 23, 1986 among the Partnership, Creditanstalt, and Toledo
Trust Company (the "Term Loan Agreement") and the Amended and Restated
Credit Facility Agreement dated as of July 23, 1986 between the
Partnership and CABV (the "Restated Credit Facility Agreement").
"Designated Event" shall mean the events described in Section
6.02 of each of the Credit Agreements.
"Inland Industries" shall mean Inland Steel Industries, Inc., a
Delaware corporation.
"Periodic Financing Costs" shall mean the periodic payments of
(a) principal, interest and insurance fees with respect to the Project
Lenders' Loans and (b) 'Basic Rent' as defined in the Sublease.
"Project Lenders" shall mean Creditanstalt, CABV and Toledo
Trust Company.
"Project Lenders' Account" shall mean account no. 00-0000-00
established at Toledo Trust Company pursuant to Section 10 of the
----------
Security Agreement.
"Project Lenders' Loans" shall mean the portion of the Permanent
Financing Agreement represented by the Credit Agreements.
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May 17, 1999
Page 17
"Security Agreement" shall mean that certain Security Agreement
dated July 24, 1986, as amended from time to time, among the
Partnership, the Project Lenders, Creditanstalt, as agent, and Toledo
Trust Company, as paying agent."
"Sublease" shall mean the portion of the Permanent Financing
Agreement represented by the Sublease dated as of May 30, 1986 between
PFM and the Partnership."
2. The definition of the term "Financing Costs" is hereby amended to
add at the end thereof the following sentence
"Such term shall include all principal, interest, rent, fees and costs
payable by the Partnership under the Project Lender"s Loans, the
Sublease and the Parent Loans including, without limitation, the
insurance fees specified by Section 2.05 of the Restated Credit
Facility Agreement."
3. The definitions of the terms "Fiscal Quarter," "Fiscal Semi-
Annual Period," "Fiscal Year," "Guarantor" and "Reporting Period" are hereby
amended to read as follows:
"Fiscal Quarter" shall mean each of the periods of three
calendar months ended on the last day of May, August, November and
February of each Fiscal Year.
"Fiscal Semi-Annual Period" shall mean each of the periods of
six calendar months ended on the last day of August and February of
each Fiscal Year.
"Fiscal Year" shall mean the period commencing on the first day
of March of each calendar year and ending on the last day of February
of the next successive calendar year.
"Guarantor" shall mean: (a) with respect to EGL Steel,
Bethlehem; (b) with respect to Inland EG, Inland and Inland
Industries; and (c) with respect to PFM (EG), PFM and MSC.
"Reporting Period" shall mean a calendar month.
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May 17, 1999
Page 18
In order to evidence such amendments, please sign a counterpart
of this letter at the place indicated below, and return such counterpart to
the undersigned.
Very truly yours,
WALBRDIGE COATINGS, AN ILLINOIS
PARTNERSHIP
By: PRE FINISH METALS (EG)
INCORPORATED
By:____________________________
By: EGL STEEL INC.
General Partner
By:____________________________
By:____________________________
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May 17, 1999
Page 19
By: INLAND STEEL ELECTROGALVANIZING
CORPORATION
General Partner
By:____________________________
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May 17, 1999
Page 20
Agreed as of the ______ day of July, 1986
EGL STEEL INC. PRE FINISH METALS (EG) INCORPORATED
By: _____________________________ By: _______________________________
Treasurer
By: _____________________________
BETHLEHEM STEEL CORPORATION PRE FINISH METALS INCORPORATED
By: _____________________________ By: _______________________________
Vice President and Treasurer
By: _____________________________
Senior Vice President
INLAND STEEL ELECTRO- MATERIAL SCIENCES CORPORATION
GALVANIZING CORPORATION
By: _____________________________ By: ________________________________
INLAND STEEL COMPANY
By: _____________________________
INLAND STEEL INDUSTRIES, INC.
By: _____________________________
20
