10-Q/A 1 0001.txt AMENDED 10-Q FOR PERIOD ENDED DECEMBER 31, 2000 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q/A (Mark One) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2000 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-9820 BIRMINGHAM STEEL CORPORATION DELAWARE 13-3213634 (State of Incorporation) (I.R.S. Employer Identification No.) 1000 Urban Center Parkway, Suite 300 Birmingham, Alabama 35242 (205) 970-1200 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes x No. Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 31,101,306 Shares of Common Stock of the registrant were outstanding at February 16, 2001. Explanatory Note The Registrant hereby amends its Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2000, previously filed on February 20, 2001, solely to included Exhibits 4.1.2, 4.2.2, 4.5.1, 4.6.1, 10.23.7, 10.25.1 and 10.32 and to amend Part II, Item 6(a) to reflect the inclusion of such Exhibits. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) The following exhibits are filed with this report: 4.1.2 Third Amendment to Note Purchase Agreement dated February 20, 2001 re: Amended and Restated Note Purchase Agreements dated as of October 12, 1999 and $130 million Senior Notes * 4.2.2 Third Amendment to Note Purchase Agreement dated February 20, 2001 re: Amended and Restated Note Purchase Agreements dated as of October 12, 1999 and $150 million Senior Notes * 4.5.1 Fifth Amendment to Reimbursement Agreement, dated February 20, 2001 between Birmingham Steel Corporation and PNC Bank, Kentucky, Inc * 4.6.1 Amendment No. 1 to Warrant Agreement dated February 20, 2001, between Registrant and the warrant holders parties thereto * 10.23.7 Eighth Amendment to Credit Agreement dated February 20, 2001 by and among Birmingham Steel Corporation, the Borrower, the financial institutions party thereto, and Bank of America, N.A. successor to NationsBank N.A. (South), as Agent * 10.25.1 First Amendment to Credit Agreement dated February 20, 2001, between Birmingham Southeast, LLC, the Borrower, the financial institutions party thereto, as lenders, and Bank of America, N.A., as agent * 10.32 Letter agreement dated February 20, 2001 between the Company and the Memphis Leaseholders * * Filed herewith. 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 thereunto duly authorized. Birmingham Steel Corporation March 20, 2001 /s/ J. Daniel Garrett --------------------------- J. Daniel Garrett Chief Financial Officer and Vice President Finance EXHIBITS 4.1.2 Third Amendment to Note Purchase Agreement dated February 20, 2001 re: Amended and Restated Note Purchase Agreements dated as of October 12, 1999 and $130 million Senior Notes. 4.2.2 Third Amendment to Note Purchase Agreement dated February 20, 2001 re: Amended and Restated Note Purchase Agreements dated as of October 12, 1999 and $150 million Senior Notes. 4.5.1 Fifth Amendment to Reimbursement Agreement, dated February 20, 2001 between Birmingham Steel Corporation and PNC Bank, Kentucky, Inc. 4.6.1 Amendment No. 1 to Warrant Agreement dated February 20, 2001, between Registrant and the warrant holders parties thereto. 10.23.7 Eighth Amendment to Credit Agreement dated February 20, 2001 by and among Birmingham Steel Corporation, the Borrower, the financial institutions party thereto, and Bank of America, N.A. successor to NationsBank N.A. (South), as Agent. 10.25.1 First Amendment to Credit Agreement dated February 20, 2001, between Birmingham Southeast, LLC, the Borrower, the financial institutions party thereto, as lenders, and Bank of America, N.A., as agent. 10.32 Letter agreement dated February 20, 2001 between the Company and the Memphis Leaseholders. EXHIBIT 4.1.2 BIRMINGHAM STEEL CORPORATION ---------------------------- THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT ------------------------------------------ Re: Amended and Restated Note Purchase Agreements Dated as of October 12, 1999, and $130,000,000 10.03% SENIOR NOTES DUE DECEMBER 15, 2005 DATED AS OF FEBRUARY 20, 2001 Table of Contents 1. PRELIMINARY STATEMENT...................................................1 1.1 BACKGROUND..........................................................1 1.2 DEFINITIONS.........................................................3 2. AMENDMENTS..............................................................5 2.1 AMENDMENT OF EXISTING NOTE PURCHASE AGREEMENT.......................5 2.2 CONTINUITY AND AFFIRMATION OF OBLIGATIONS...........................5 3. REPRESENTATIONS AND WARRANTIES..........................................5 3.1 CORPORATE EXISTENCE AND POWER.......................................6 3.2 CORPORATE AUTHORITY.................................................6 3.3 BINDING EFFECT......................................................6 3.4 NO CONFLICTS WITH AGREEMENTS, ETC...................................6 3.5 CONSENTS, ETC.......................................................7 3.6 FULL DISCLOSURE.....................................................7 3.7 OUTSTANDING DEBT AND LIENS..........................................8 3.8 PENDING LITIGATION..................................................8 3.9 NO DEFAULTS.........................................................8 3.10 COMPLIANCE WITH LAW................................................9 3.11 TITLE TO PROPERTIES................................................9 3.12 ENVIRONMENTAL COMPLIANCE...........................................9 3.13 RESTRICTIONS ON COMPANY AND SUBSIDIARIES.........................11 3.14 SOLVENCY..........................................................11 4. AMENDMENTS.............................................................11 4.1 INTEREST RATE ADJUSTMENT...........................................12 4.2 FIXED CHARGE COVERAGE RATIO........................................12 4.3 MINIMUM SBQ DIVISION EBITDA........................................12 4.4 MINIMUM CONSOLIDATED EBITDA........................................13 4.5 MINIMUM TANGIBLE NET WORTH.........................................13 4.6 NEW DEFINITIONS....................................................14 4.7 AMENDED DEFINITIONS................................................14 4.8 REQUIRED SCHEDULED PREPAYMENTS......................................14 5. CONDITIONS PRECEDENT...................................................14 5.1 CERTIFICATES.......................................................15 5.2 OPINION OF COUNSEL.................................................15 5.3 AMENDMENT TO 1995 AGREEMENT........................................15 5.4 EIGHTH AMENDMENT TO CREDIT AGREEMENT...............................15 5.5 AMENDMENT TO LETTER OF CREDIT DOCUMENTS............................15 5.6 AMENDMENT TO MEMPHIS LEASE DOCUMENTS...............................16 5.7 FIRST AMENDMENT TO BSE CREDIT AGREEMENT............................16 5.8 PAYMENT OF SPECIAL COUNSEL AND FINANCIAL ADVISOR FEES..............16 5.9 PROCEEDINGS AND DOCUMENTS SATISFACTORY.............................16 5.10 AMENDMENT OF WARRANTS.............................................16 6. MISCELLANEOUS..........................................................17 6.1 EFFECT OF AMENDMENT................................................17 6.2 NO LEGEND REQUIRED.................................................17 6.3 FEES AND EXPENSES..................................................17 6.4 SURVIVAL...........................................................18 6.5 DUPLICATE ORIGINALS; EXECUTION IN COUNTERPART......................18 6.6 RELEASE OF CLAIMS..................................................18 6.7 GOVERNING LAW......................................................19 BIRMINGHAM STEEL CORPORATION THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT Re: Amended and Restated Note Purchase Agreements Dated as of October 12, 1999 and $130,000,000 10.03% SENIOR NOTES DUE DECEMBER 15, 2005 Dated as of February 20, 2001 To the Persons listed on the signature pages hereof Ladies and Gentlemen: BIRMINGHAM STEEL CORPORATION, a Delaware corporation (together with its successors and assigns, the "Company"), hereby agrees with you as follows: 1.PRELIMINARY STATEMENT. -------------------------- 1.1 Background. (a) The Company entered into those certain Note Purchase Agreements dated as of September 1, 1993, as amended by an Amendment to 1993 Note Purchase Agreement dated as of October 18, 1996 and an Amendment to 1993 Note Purchase Agreement dated as of December 14, 1998, with each of the institutions named in Annex 1 thereto, under and pursuant to which the Company issued and sold to such institutions an aggregate principal amount of One Hundred Thirty Million Dollars ($130,000,000) of the Company's 7.28% Senior Notes due December 15, 2005 (the "1993 Notes"). Pursuant to the terms of a Waiver and Third Amendment to Note Purchase Agreement dated as of October 12, 1999 (the "1999 Third Amendment"), the Company entered into those certain Amended and Restated Note Purchase Agreements dated as of October 12, 1999, and the Company subsequently entered into a First Amendment to Note Purchase Agreement dated as of November 12, 1999 and a Second Amendment to Note Purchase Agreement dated as of May 15, 2000 (collectively, as in effect immediately prior to the amendments contemplated hereby, the "Existing Note Purchase Agreement," and as amended hereby, the "Amended Note Purchase Agreement"), with each of the institutions named in Annex 1 thereto, pursuant to which the Company issued to such institutions, in substitution for the 1993 Notes, an aggregate principal amount of One Hundred Thirty Million Dollars ($130,000,000) of the Company's 10.03% Senior Notes due December 15, 2005 (collectively, the "Notes"). (b) The institutions (other than the Company) listed on the signature pages to this Agreement (collectively, the "Noteholders") are the holders of one hundred percent (100%) of the Notes outstanding as of the date hereof. (c) The Company entered into those certain Amended and Restated Note Purchase Agreements dated as of October 12, 1999, with each of the institutions named in Annex 1 thereto (together with their successors and assigns, the "1995 Noteholders"), as amended by a First Amendment to Note Purchase Agreement dated as of November 12, 1999 and a Second Amendment to Note Purchase Agreement dated as of May 15, 2000 (collectively, as in effect immediately prior to the date hereof, the "1995 Existing Note Purchase Agreement"), and by a Third Amendment to Note Purchase Agreement dated as of the date hereof (the "Amendment to 1995 Agreement"; the 1995 Existing Note Purchase Agreement, as amended by the Amendment to 1995 Agreement, is referred to herein as the "1995 Amended Note Purchase Agreement"), under and pursuant to which the Company issued to such institutions, in substitution for Notes in the same amounts issued in 1995, (i) an aggregate principal amount of Seventy-Six Million Dollars ($76,000,000) of the Company's 9.71% Series A Senior Notes due December 15, 2002, (ii) an aggregate principal amount of Fourteen Million Dollars ($14,000,000) of the Company's 9.82% Series B Senior Notes due December 15, 2005, and (iii) an aggregate principal amount of Sixty Million Dollars ($60,000,000) of the Company's 9.92% Series C Senior Notes due December 15, 2005 (collectively, the "1995 Notes"). (d) The Company entered into that certain Credit Agreement dated as of March 17, 1997 (as in effect immediately prior to the date hereof, the "Existing Credit Agreement," and as heretofore amended and as amended by an Eighth Amendment to Credit Agreement dated as of the date hereof (the "Eighth Amendment to Credit Agreement"), the "Amended Credit Agreement"), by and among the Company, the banks party thereto (collectively, the "Banks"), and Bank of America, N.A., as agent (the "Agent"), pursuant to which a Three Hundred Million Dollar ($300,000,000) credit facility has been provided to the Company. (e) Bank of America, N.A. and PNC Bank, National Association (collectively, the "L/C Issuers") have separately provided the Company with two (2) letters of credit (collectively, the "Letters of Credit") which have an aggregate face amount of Forty-One Million Four Hundred Seventy-One Thousand Seven Hundred Eighty-Two Dollars ($41,471,782), which Letters of Credit were issued pursuant to (i) an Amended and Restated Reimbursement Agreement, dated as of October 12, 1999, among the Company, American Steel & Wire Corporation and Bank of America, N.A. (as amended, the "B of A Reimbursement Agreement"), and (ii) a Reimbursement Agreement dated as of October 1, 1996, between PNC Bank, National Association successor to PNC Bank, Kentucky, Inc. and the Company (as amended, "PNC Reimbursement Agreement" and, collectively with the B of A Reimbursement Agreement, the "Existing Reimbursement Agreements"). (f) BSE entered into that certain Credit Agreement dated as of May 15, 2000 with certain of the Noteholders, the 1995 Noteholders, and the Banks, and Bank of America, N.A., as agent (as in effect immediately prior to the date hereof, the "Existing BSE Credit Agreement," and as amended by a First Amendment to Credit Agreement dated as of the date hereof (the "First Amendment to BSE Credit Agreement"), the "Amended BSE Credit Agreement"), pursuant to which a Twenty-Five Million Dollar ($25,000,000) credit facility has been provided to BSE. (g) The Company and the Noteholders have agreed to amend the Existing Note Purchase Agreement to modify certain of the covenants and other provisions of the Existing Note Purchase Agreement, on the terms and conditions set forth herein. 1.2 Definitions. Capitalized terms used but not specifically defined in this Agreement have the respective meanings assigned to them in the Existing Note Purchase Agreement. As used in this Agreement, the following terms have the respective meanings specified below or set forth in the Section hereof following such term: Agent - Section 1.1(d). Agreement, this - means this Third Amendment to Note Purchase Agreement, as it may be amended or otherwise modified from time to time. Amended BSE Credit Agreement - Section 1.1(f). Amended Credit Agreement - Section 1.1(d). Amended Note Purchase Agreement - Section 1.1(a). Amendment to 1995 Agreement - Section 1.1(c). Banks - Section 1.1(d). B of A Reimbursement Agreement - Section 1.1(e). BSE - Birmingham Southeast, LLC. BSE Material Adverse Effect - means a material adverse effect on (a) the business, prospects, profits, Properties or condition (financial or otherwise) of BSE, (b) the ability of BSE to perform its obligations under any of the Financing Documents to which it is a party, or (c) the validity or enforceability of any of the Financing Documents to which BSE is a party. Collateral Agent - means SouthTrust Bank, National Association, in its capacity as collateral agent under the Intercreditor Agreement. Company - the introductory sentence. Effective Date - Section 5. Eighth Amendment to Credit Agreement - Section 1.1(d). Existing BSE Credit Agreement - Section 1.1(f). Existing Credit Agreement - Section 1.1(d). Existing Note Documents - Section 6.6. Existing Note Purchase Agreement - Section 1.1(a). Existing Reimbursement Agreements - Section 1.1(e). Financing Document - Section 3.1. First Amendment to BSE Credit Agreement - Section 1.1(f). Indenture Trustee - has the meaning set forth in the Intercreditor Agreement. L/C Issuers - Section 1.1(e). Letters of Credit - Section 1.1(e). 1993 Notes - Section 1.1(a). 1995 Amended Note Purchase Agreement - Section 1.1(c). 1995 Existing Note Purchase Agreement - Section 1.1(c). 1995 Noteholders - Section 1.1(c). 1995 Notes - Section 1.1(c). 1999 Third Amendment - Section 1.1(a). Noteholders - Section 1.1(b). Notes - Section 1.1(a). Owner Trustee - has the meaning set forth in the Intercreditor Agreement. PNC Reimbursement Agreement - Section 1.1(e). Transaction Documents - has the meaning specified in the Omnibus Collateral Agreement. 2. AMENDMENTS -------------- 2.1 Amendment of Existing Note Purchase Agreement. The amendments set forth herein shall take effect (and shall be deemed to have taken effect) as of the Effective Date. 2.2 Continuity and Affirmation of Obligations. Notwithstanding any other provision of this Agreement or any other document or agreement, the indebtedness of the Company under the Existing Note Purchase Agreement and the Notes shall not be or be deemed to be paid or discharged or novated hereby and shall continue in full force and effect as amended hereby. 3. REPRESENTATIONS AND WARRANTIES --------------------------------- To induce the Noteholders to enter into this Agreement, (a) the Company represents and warrants to the Noteholders that the representations and warranties made by the Company in Section 3 of the 1999 Third Amendment and by BSE in the Existing BSE Credit Agreement are true as of the date hereof (except to the extent that any such representation in the 1999 Third Amendment or the Existing BSE Credit Agreement relates to a specific other date or as set forth on Schedule 3 hereto or as disclosed to the Noteholders or Nightingale & Associates LLC in writing prior to the date hereof), and (b) the Company makes the additional representations and warranties set forth in this Section 3. The Company agrees and acknowledges that for purposes of Section 10.1(e) of the Existing Note Purchase Agreement, its representations and warranties, as set forth in this Agreement, are and constitute representations and warranties furnished in connection with the Existing Note Purchase Agreement. 3.1 Corporate Existence and Power. Each of the Company and each Restricted Subsidiary has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and each other agreement and document that is being executed or delivered by the Company and/or any such Subsidiary in connection herewith (each of such agreements and documents, including this Agreement, being referred to herein as a "Financing Document"). 3.2 Corporate Authority. The execution, delivery and performance by the Company and each Restricted Subsidiary of each Financing Document to which the Company or such Restricted Subsidiary is a party, and the performance by the Company of the Amended Note Purchase Agreement is within the corporate or limited liability company powers of the Company or such Restricted Subsidiary, as the case may be, and has been duly authorized by all necessary corporate or limited liability company action on the part of the board of directors or management (no action on the part of the stockholders or members of the Company or any such Restricted Subsidiary being required by law, other than such actions which have been duly taken), of the Company or such Restricted Subsidiary. 3.3 Binding Effect. Each Financing Document to which the Company or any Restricted Subsidiary is a party has been duly executed by the Company or such Restricted Subsidiary and each Financing Document and the Amended Note Purchase Agreement, the Security Documents and the BSE Collateral Documents are legal, valid and binding obligations of the Company or such Restricted Subsidiary, as the case may be, enforceable against the Company or such Restricted Subsidiary in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally, or by general principles of equity. 3.4 No Conflicts with Agreements,Etc. Neither the execution and delivery by the Company or any Restricted Subsidiary of any Financing Document to which it is a party, nor the fulfillment of, or compliance with, the terms and provisions of the Amended Note Purchase Agreement, the Notes, the Security Documents, or any of the Financing Documents, will conflict with, or result in a breach or violation of any term, condition or provision of, or constitute a default under, or result in the creation of any Lien on any Property of the Company or such Restricted Subsidiary pursuant to its charter or by-laws or operating agreement, or any contract, agreement, mortgage, indenture, lease or instrument to which it is a party or by which it is bound or to which it or any of its Property is subject, or any order, statute, law, rule or regulation to which it or any of its Property is subject. 3.5 Consents, Etc. No consent, approval or authorization of, or declaration, registration or filing (except as contemplated under Section 4) with, any Governmental Authority or any nongovernmental Person, including, without limitation, any creditor (other than the 1995 Noteholders, the Banks, the L/C Issuer, the Owner Trustee and the Indenture Trustee), or any stockholder or member of the Company or any Restricted Subsidiary, is required in connection with the execution or delivery by the Company or any Restricted Subsidiary of any Financing Document to which it is a party or the performance by the Company or such Restricted Subsidiary of its obligations under any Financing Document, or as a condition to the legality, validity or enforceability of any such Financing Document, except, in each case, those which have been obtained or which are contemplated by the Transaction Documents. 3.6 Full Disclosure. The financial statements and other written statements, certificates and materials provided to the Noteholders pursuant to the Existing Note Purchase Agreement and the written statements, certificates and materials furnished by or on behalf of the Company to you in connection with this Agreement and the transactions contemplated hereby do not contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading in light of the circumstances in which they were made. Except as disclosed (i) in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, (ii) in the other reports filed by the Company with the Securities and Exchange Commission after June 30, 2000, (iii) in press releases issued by the Company prior to the date hereof, or (iv) to you or Nightingale Associates, LLC in writing, there is no fact known to the Company which materially affects adversely or, so far as the Company can now reasonably foresee, will materially affect adversely the business, prospects, profits, Properties or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or the ability of each of the Company and each Restricted Subsidiary to perform its obligations set forth in the Financing Documents to which it is a party or, in the case of the Company, the Amended Note Purchase Agreement or the Notes. The financial statements included in the reports referred to in clauses (i) and (ii) of the preceding sentence fairly present, in all material respects, the financial condition and results of operations of the Company and its Subsidiaries as of the dates thereof and for the periods covered thereby in accordance with generally accepted accounting principles. 3.7 Outstanding Debt and Liens. Except for Debt owed under the BSE Credit Agreement, Schedule 3.8 to the 1999 Third Amendment sets forth a correct and complete schedule and brief description of all Debt of the Company and the Subsidiaries outstanding on the date hereof and all consensual Liens securing such Debt. There are no Liens on any of the Property of the Company or any Restricted Subsidiary except Liens permitted by Section 8.17(a) of the Amended Note Purchase Agreement. 3.8 Pending Litigation. There are no proceedings, actions or investigations pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary in any court or before any Governmental Authority or arbitration board or tribunal (a) challenging, or in any way dealing with, the legality, validity or enforceability of any Financing Document, the Amended Note Purchase Agreement or the Notes or the authority of the Company or any Restricted Subsidiary to enter into or execute any Financing Document, the Amended Note Purchase Agreement or the Notes, or (b) except as disclosed (i) in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, (ii) in the other reports filed by the Company with the Securities and Exchange Commission after June 30, 2000, (iii) in press releases issued by the Company prior to the date hereof, or (iv) to you or Nightingale Associates, LLC in writing, that, in the aggregate for all such proceedings, actions and investigations, could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.9 No Defaults. No event has occurred and is continuing and no condition exists which, upon execution and delivery of this Agreement (and after giving effect to any waivers and amendments that have become effective on or before the date hereof) and the other Transaction Documents, would constitute a Default or Event of Default. Neither the Company nor any Subsidiary is in violation in any respect of any term of any charter instrument or by-law or limited liability company agreement and neither the Company nor any Subsidiary is in default in the payment of principal or interest on any Debt or in default under any instrument or instruments or agreements under and subject to which any Debt has been issued and no event has occurred and is continuing under the provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or both, would constitute a default or an event of default thereunder, which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.10 Compliance with Law. Neither the Company nor any Subsidiary is in violation of any law, ordinance, governmental rule or regulation to which it is subject, except for such violations that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.11 Title to Properties. (a) Each of the Company and the other Subsidiaries has good and marketable title to all real Property, and good title to all of the other Property, reflected in the most recent balance sheet delivered pursuant to Section 9.1 of the Existing Note Purchase Agreement (except as sold or otherwise disposed of in the ordinary course of business), except for such failures to have such good and marketable title as are immaterial to such financial statements and that, in the aggregate for all such failures, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. All such Property is free from Liens not permitted by Section 8.17(a) of the Amended Note Purchase Agreement. (b) Each lease of real Property in the name or for the benefit of the Company or any Subsidiary is valid and subsisting and in full force and effect and good standing, except for such failures to be valid and subsisting and in full force and effect and good standing that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. (c) Each of the Company and the Subsidiaries owns, possesses or has the right to use all of the patents, trademarks, service marks, trade names, copyrights and licenses, and rights with respect thereto, necessary for the present and currently planned future conduct of its business, without any known conflict with the rights of others, except for such failures to own, possess, or have the right to use, that, in the aggregate for all such failures, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.12 Environmental Compliance. Except as disclosed (i) in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, (ii) in the other reports filed by the Company with the Securities and Exchange Commission after June 30, 2000, (iii) in press releases issued by the Company prior to the date hereof, or (iv) to the Noteholders or Nightingale Associates, LLC in writing: (a) Compliance -- each of the Company and the Subsidiaries is in compliance with all Environmental Protection Laws in effect in each jurisdiction where it is presently doing business, and in which the failure so to comply could be reasonably expected to have a Material Adverse Effect or a BSE Material Adverse Effect; (b) Liability -- neither the Company nor any of the Subsidiaries is subject to any liability under any Environmental Protection Laws that, in the aggregate, could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect; and (c) Notices -- neither the Company nor any Subsidiary has received any (i) notice from any Governmental Authority by which any of its present or previously-owned or leased real Properties has been designated, listed, or identified in any manner by any Governmental Authority charged with administering or enforcing any Environmental Protection Law as a Hazardous Substance disposal or removal site, "Super Fund" clean-up site, or candidate for removal or closure pursuant to any Environmental Protection Law, (ii) notice of any Lien arising under or in connection with any Environmental Protection Law that has attached to any revenues of, or to, any of its owned or leased real Properties, or (iii) summons, citation, notice, directive, letter, or other communication, written or oral, from any Governmental Authority concerning any intentional or unintentional action or omission by the Company or such Subsidiary in connection with its ownership or leasing of any real Property resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, dumping, or otherwise disposing of any Hazardous Substance into the environment resulting in any material violation of any Environmental Protection Law, in each case where the effect of the matters that are the subject of any such notice, summons, citation, directive, letter or other communication could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.13 Restrictions on Company and Subsidiaries. Neither the Company nor any Subsidiary: (a) except as set forth in Schedule 3 hereto, is a party to any contract or agreement, or subject to any charter or other corporate or limited liability company restriction that, in the aggregate for all such contracts, agreements, charter and corporate and limited liability company restrictions, could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect; (b) is a party to any contract or agreement that restricts the right or ability of such corporation to incur Debt, other than the Amended Note Purchase Agreement, the 1995 Amended Note Purchase Agreement, the Amended Credit Agreement, any other Transaction Document and the agreements listed in Schedule 3 hereto, the terms of none of which is violated by the execution and delivery by the Company or any Restricted Subsidiary of the Financing Documents to which it is a party, or compliance by the Company or any Restricted Subsidiary with the Financing Documents to which it is a party or, in the case of the Company, the Amended Note Purchase Agreement and the Notes; and (c) has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its Property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 8.17(a) of the Amended Note Purchase Agreement. 3.14 Solvency. After giving effect to the transactions contemplated by the Transaction Documents, (a) the fair value and the fair salable value of the assets of the Company and each Restricted Subsidiary (excluding any Debt due from the Company or such Restricted Subsidiary, as the case may be) will each be in excess of the fair valuation of its total liabilities (including all contingent liabilities), (b) the Company and each Restricted Subsidiary will each be able to pay its debts or other obligations in the ordinary course as they mature, and (c) the Company and each Restricted Subsidiary each has capital not unreasonably small to carry on its business and all business in which it proposes to be engaged. 4. AMENDMENTS -------------- Effective as of the Effective Date, the Existing Note Purchase Agreement is amended as follows: 4.1 Interest Rate Adjustment. Section 1.2(c)(ii) is deleted and the following Section 1.2(c)(ii) is substituted therefor: (ii) SBQ Asset Sale. If the Company shall fail to make the SBQ Asset Sale Prepayment on or prior to January 31, 2001, the unpaid principal amount of the Notes shall bear interest (A) at all times after January 31, 2001 and until (and including) the payment in full thereof, at a rate per annum equal to (x) the interest rate then applicable to the Notes plus (y) one percent (1%), provided, that, notwithstanding the dates that interest is otherwise payable under the Notes, the additional one percent (1%) interest that is payable pursuant to clause (y) of this sentence shall accrue and not be payable in cash (such deferred interest being referred to herein as the "Deferred Portion of the Interest") until the earlier of (1) the date that an SBQ Asset Sale Prepayment is made, and (2) April 1, 2002, and further provided, that from and after the SBQ Asset Sale Prepayment and the payment in full in cash of the Deferred Portion of the Interest, the one percent (1%) referred to in clause (y) above shall be reduced to fifty--one-hundredths percent (.50%), all of which shall be payable in cash each month with all other interest that is payable on the Notes; and (B) on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to the lesser of (1) the highest rate allowed by applicable law, and (2) the interest rate then applicable to the Notes (after giving effect to the adjustment required by clause (A) above) plus two percent (2%). 4.2 Fixed Charge Coverage Ratio. Section 8.11 is deleted and the following Section 8.11 is substituted therefor: 8.11. Intentionally Deleted 4.3 Minimum SBQ Division EBITDA. Section 8.12A is deleted and the following Section 8.12A is substituted therefor: 8.12A. Minimum SBQ Division EBITDA. If the Cleveland Cessation Condition is not satisfied prior to June 30, 2001, the Company will not permit the aggregate amount of SBQ Division EBITDA for any fiscal quarter ending on or June 30, 2001 to be less than $1.00. 4.4 Minimum Consolidated EBITDA. Section 8.12 is deleted and the following Section 8.12 is substituted therefor: 8.12. Minimum Consolidated EBITDA. The Company will not permit the aggregate amount of Consolidated EBITDA for any Applicable EBITDA Period specified in the following table to be less than the amount corresponding to such period in such table: Applicable EBITDA Period Ending Minimum EBITDA ------------------------------- -------------- December 31, 2000 $59,004,000 March 31, 2001 $40,177,000 June 30, 2001 $26,385,000 September 30, 2001 $28,237,000 December 31, 2001 $35,655,000 March 31, 2002 and thereafter $44,427,000 For the purposes of this Section 8.12, the "Applicable EBITDA Period" means, with respect to the calculation of Consolidated EBITDA at the end of any fiscal quarter, the four fiscal quarters then ended. 4.5 Minimum Tangible Net Worth. Section 8.13 is deleted and the following Section 8.13 is substituted therefor: 8.13. Minimum Tangible Net Worth The Company will not permit Consolidated Tangible Net Worth at any time to be less than (i) negative fifty million dollars (-$50,000,000), plus (ii) fifty percent (50%) of Adjusted Net Income (only if greater than Zero Dollars ($0)) of the Company and its Subsidiaries on a consolidated basis for each fiscal quarter of the Company ending after December 31, 2000, minus (iii) the sum of the amounts by which Consolidated Tangible Net Worth is reduced (i.e. the amount by which stockholders' equity is reduced) after December 31, 2000 by any TNW Adjustment plus (iv) all of the Net Proceeds from each Equity Issuance by the Company after December 31, 2000. 4.6 New Definitions. The following definitions are inserted in Section 11.1 in alphabetical order: BSE - Birmingham Southeast, LLC. Deferred Portion of the Interest - Section 1.2(c)(ii)(A). 4.7 Amended Definitions. The definitions in Section 11.1 of the following terms are deleted and the following definitions are substituted therefor: Acceptable SBQ Asset Sale - means a sale by the Company of the SBQ Division (Memphis/Cleveland) as to which the conditions precedent to the release of Collateral set forth in Section 4.9(b) of the Intercreditor Agreement have been satisfied. 4.8 Required Scheduled Prepayments. Section 5.1 is deleted and the following Section 5.1 is substituted therefor: 5.1. Required Scheduled Prepayments. In addition to paying the entire principal amount and the interest due on the Amended Notes outstanding on the maturity date thereof, the Company shall prepay, and there shall become due and payable, Twenty-Six Million Dollars ($26,000,000) principal amount of the Amended Notes (a) on April 1, 2002, and (b) on December 15 in each year beginning on December 15, 2002 and ending on December 15, 2004, inclusive. Each such prepayment shall be at one hundred percent (100%) of the principal amount prepaid, together with interest accrued thereon to the date of prepayment. The principal of the Amended Notes remaining outstanding on December 15, 2005, together with interest accrued thereon, shall become due and payable on December 15, 2005. 5. CONDITIONS PRECEDENT ----------------------- The amendments set forth in Section 4 shall take effect (and shall be deemed to have become effective) as of December 30, 2000 (the "Effective Date") upon the satisfaction of the following conditions: 5.1 Certificates. (a) Company Officer's Certificate. The Company shall have delivered to the Noteholders (or their special counsel) a certificate signed by the Chairman, the Vice Chairman, the President or the Executive Vice President-Chief Financial Officer of the Company, dated the date hereof, certifying that (i) no Default or Event of Default under the Amended Note Purchase Agreement exists and (ii) the representations and warranties set forth in Section 3 (including those incorporated by reference from the 1999 Third Amendment and the Existing BSE Credit Agreement) and in each of the other Financing Documents are true and correct on the date hereof. (b) Company Secretary's Certificate. The Company shall have delivered to the Noteholders a certificate signed by the Secretary or one of the Assistant Secretaries of the Company, dated the date hereof, certifying as true and correct the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of each of the Financing Documents to which the Company is a party. 5.2 Opinion of Counsel. The Noteholders shall have received an opinion (dated as of the date hereof, substantially in the form set forth in Exhibit A, and as to such other matters as the Noteholders may reasonably request) from Burr & Forman LLP, special counsel for the Company and the Restricted Subsidiaries. 5.3 Amendment to 1995 Agreement. The Company and the 1995 Noteholders shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of the fully executed Amendment to 1995 Agreement. 5.4 Eighth Amendment to Credit Agreement. The Company, the Banks and the Agent shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of the fully executed Eighth Amendment to Credit Agreement, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.5 Amendment to Letter of Credit Documents. The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of an Amendment to PNC Reimbursement Agreement, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.6 Amendment to Memphis Lease Documents. The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of an amendment to the Melt Shop Equipment Financing Documents, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.7 First Amendment to BSE Credit Agreement The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of the First Amendment to BSE Credit Agreement, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.8 Payment of Special Counsel and Financial Advisor Fees. Without limiting the provisions of Section 6.3, the Company shall have paid on or before the date hereof the fees, charges and disbursements of the Noteholders' special counsel referred to in Section 5.2, and Nightingale & Associates, LLC, in each case to the extent reflected in statements rendered to the Company on or prior to the date hereof. 5.9 Proceedings and Documents Satisfactory. All opinions, certificates and other instruments and all proceedings taken in connection with the execution and delivery of this Agreement and the transactions contemplated hereby shall be reasonably satisfactory to the Noteholders and their special counsel; and the Noteholders and their special counsel shall have received copies of such documents and papers as may be reasonably requested in connection therewith. 5.10 Amendment of Warrants. The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of Amendment No. 1 to the Warrant Agreement dated as of May 15, 2000 among the Company and the warrantholders which are parties thereto, which amendment shall effect a reduction of the Exercise Price (as defined in such Warrant Agreement) of the Common Stock Purchase Warrants issued pursuant thereto to a per share price of one cent ($.01) (subject to adjustment pursuant to the terms of such Common Stock Purchase Warrants), and which amendment shall be in form and substance satisfactory to the Noteholders and their special counsel. 6. MISCELLANEOUS ---------------- 6.1 Effect of Amendment. If the foregoing is acceptable to you, please note your acceptance in the space provided below. Upon the execution and delivery of this Agreement by each of the Noteholders and the Company, the conditions set forth in Section 5 shall be deemed satisfied or waived and the Existing Note Purchase Agreement shall be deemed to be amended as set forth above. This Agreement shall be binding upon, and shall inure to the benefit of, the permitted successors and assigns of the parties hereto and the holders from time to time of the Notes. 6.2 No Legend Required. Any and all notices, requests, certificates and other instruments including, without limitation, the Notes, may refer to (a) the Note Purchase Agreement or (b) the Note Purchase Agreement dated as of September 1, 1993 or as of October 12, 1999, in each case without making specific reference to this Third Amendment to Note Purchase Agreement, but nevertheless all such references shall be deemed to include this Third Amendment to Note Purchase Agreement unless the context shall otherwise require. - 6.3 Fees and Expenses. Whether or not the transactions herein contemplated shall be consummated, the Company agrees to pay directly all reasonable out-of-pocket travel expenses and other reasonable out-of-pocket expenses of the Noteholders in connection with the preparation, negotiation, execution and delivery of the Financing Documents and the Amended Note Purchase Agreement, and the transactions contemplated hereby and thereby, including, but not limited to, the reasonable fees and disbursements of Bingham Dana LLP, the Noteholders' special counsel, and Nightingale & Associates, LLC, financial advisor to the Noteholders and the 1995 Noteholders, photocopying costs, and so long as any Noteholder shall hold any of the Notes, all such expenses relating to any amendments, waivers or consents pursuant to the provisions of the Amended Note Purchase Agreement, including, without limitation, any amendments, waivers or consents resulting from any work-out, restructuring or similar events relating to the performance by the Company and the Subsidiaries of their respective obligations under the Financing Documents, the Amended Note Purchase Agreement and the Notes. The Company also agrees that it will pay and save each Noteholder harmless against any and all liability with respect to stamp and other similar taxes, if any, which may be payable or which may be determined to be payable in connection with the execution and delivery of the Financing Documents and this Agreement. The Company agrees to protect and indemnify each Noteholder against any liability for any and all brokerage fees and commissions payable or claimed to be payable to any Person retained by the Company, the Restricted Subsidiaries, or any of the Affiliates that are controlled by the Company in connection with the transactions contemplated by this Agreement. 6.4 Survival. All warranties, representations, certifications and covenants made by the Company in this Agreement or in any certificate or other instrument delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by the Noteholders and shall survive the execution of this Agreement, regardless of any investigation made by or on behalf of the Noteholders. All statements in any such certificate or other instrument shall constitute warranties and representations of the Company under this Agreement. 6.5 Duplicate Originals; Execution in Counterpart. Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. This Agreement may be executed in one or more counterparts and shall be effective when at least one counterpart shall have been executed by each party to this Agreement, and each set of counterparts which, collectively, show execution by each such party to this Agreement shall constitute one duplicate original. A facsimile of an executed counterpart shall have the same effect as the original executed counterpart. 6.6 Release of Claims. The Company, for itself and all of its predecessors, successors and assigns, acknowledges, affirms and represents that immediately prior to giving effect to this Agreement, it is legally, validly and enforceably obligated to each of the Noteholders under and pursuant to the Notes and the Existing Note Purchase Agreement and that the Company has no defense, offset, counterclaim or right of recoupment with regard to such obligations. Additionally, the Company for itself and all of its predecessors, successors and assigns, does hereby fully, forever and completely release and discharge each of the Noteholders and all of their respective employees, officers, directors, trustees, shareholders, affiliates, agents, attorneys, representatives, predecessors, successors and assigns (collectively, the "Released Parties"), from any and all claims, demands, liabilities, damages and causes of action of any kind whatsoever, whether based on facts in existence prior to or as of the date hereof, whether known or unknown, which the Company may now have or may have had at any time heretofore or may have at anytime hereafter, whether for contribution or indemnity or otherwise, and whether direct or indirect, fixed or contingent, liquidated or unliquidated, arising out of or related in any way to any of the following: (a) the Notes and the Existing Note Purchase Agreement and all documents relating thereto or executed in connection therewith (the "Existing Note Documents"); and (b) any action, inaction or omission by any of the Released Parties in connection with the Existing Note Documents or the administration thereof. 6.7 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. [Remainder of page intentionally left blank; next page is signature page.] If you are in agreement with the foregoing, please sign the form of acceptance in the space provided below, whereupon the foregoing shall become a binding agreement between you and the Company as of the date first above written. BIRMINGHAM STEEL CORPORATION By: /s/ J. Daniel Garrett ---------------------- Name: J. Daniel Garrett Title: Chief Financial Officer Accepted: PRINCIPAL LIFE INSURANCE COMPANY (f/k/a Principal Mutual Life Insurance Company) By: Principal Capital Management, LLC a Delaware limited liability company, its authorized signatory By: /s/ Debra Svoboda Epp ---------------------- Name: Debra Svoboda Epp Title: Counsel By: /s/ Clint Woods ---------------- Name: Clint Woods Title: Counsel THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/ Robert Bayer ----------------- Name: Robert Bayer Title: Investment Officer JEFFERSON-PILOT LIFE INSURANCE COMPANY By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whalen, II Title: Vice President AMERICAN UNITED LIFE INSURANCE COMPANY By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By: /s/ Wayne T. Hoffman --------------------- Name: Wayne T. Hoffman Title: Senior Vice President - Investments By: /s/ James G. Lowery -------------------- Name: James G. Lowery Title: Assistant Vice President - Investments THE GREAT-WEST LIFE ASSURANCE COMPANY By: /s/ W. J. Sharman ------------------ Name: W. J. Sharman Title: Vice President-Bond Investments By: /s/ H. A. Andres ----------------- Name: H. A. Andres Title: Vice President, Mortgage Investments J. ROMEO & CO. as nominee for MONY LIFE INSURANCE COMPANY By: /s/ Peter Coccia ----------------- Name: Peter Coccia Title: Partner TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA By: /s/ Roi G. Chandy ------------------ Name: Roi G. Chandy Title: Director, Special Situations PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY By: /s/ Christopher Wilkos ----------------------- Name: Christopher Wilkos Title: Vice President, Corporate Portfolio Management THE CANADA LIFE ASSURANCE COMPANY (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner CANADA LIFE INSURANCE COMPANY OF NEW YORK (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner CANADA LIFE INSURANCE COMPANY OF AMERICA (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner BERKSHIRE LIFE INSURANCE COMPANY By: /s/ Ellen I. Whittaker ----------------------- Name: Ellen I. Whittaker Title: Senior Investment Officer PROVIDENT MUTUAL LIFE INSURANCE COMPANY By: /s/ James D. Kestner --------------------- Name: James D. Kestner Title: Vice President AMERITAS LIFE INSURANCE CORP. By: Ameritas Investment Advisors Inc., as Agent By: /s/ Patrick J. Henry --------------------- Name: Patrick J. Henry Title: Vice President - Fixed Income Securities SCHEDULE 3 EXCEPTIONS TO REPRESENTATIONS None. EXHIBIT A (FORM OF OPINION OF SPECIAL COUNSEL TO THE COMPANY AND THE RESTRICTED SUBSIDIARIES] EXHIBIT 4.2.2 BIRMINGHAM STEEL CORPORATION ----------------------- THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT ----------------------- Re: Amended and Restated Note Purchase Agreements Dated as of October 12, 1999, and $76,000,000 9.71% SERIES A SENIOR NOTES DUE DECEMBER 15, 2002 $14,000,000 9.82% SERIES B SENIOR NOTES DUE DECEMBER 15, 2005 $60,000,000 9.92% SERIES C SENIOR NOTES DUE DECEMBER 15, 2005 DATED AS OF FEBRUARY 20, 2001 Table of Contents 1. PRELIMINARY STATEMENT....................................................1 1.1 BACKGROUND...........................................................1 1.2 DEFINITIONS..........................................................3 2. AMENDMENTS...............................................................5 2.1 AMENDMENT OF EXISTING NOTE PURCHASE AGREEMENT........................5 2.2 CONTINUITY AND AFFIRMATION OF OBLIGATIONS............................5 3. REPRESENTATIONS AND WARRANTIES...........................................6 3.1 CORPORATE EXISTENCE AND POWER........................................6 3.2 CORPORATE AUTHORITY..................................................6 3.3 BINDING EFFECT.......................................................7 3.4 NO CONFLICTS WITH AGREEMENTS, ETC....................................7 3.5 CONSENTS, ETC........................................................7 3.6 FULL DISCLOSURE......................................................8 3.7 OUTSTANDING DEBT AND LIENS...........................................8 3.8 PENDING LITIGATION...................................................8 3.9 NO DEFAULTS..........................................................9 3.10 COMPLIANCE WITH LAW.................................................9 3.11 TITLE TO PROPERTIES.................................................9 3.12 ENVIRONMENTAL COMPLIANCE...........................................10 3.13 RESTRICTIONS ON COMPANY AND SUBSIDIARIES..........................11 3.14 SOLVENCY...........................................................12 4. AMENDMENTS..............................................................12 4.1 INTEREST RATE ADJUSTMENT............................................11 4.2 FIXED CHARGE COVERAGE RATIO.........................................13 4.3 MINIMUM SBQ DIVISION EBITDA.........................................13 4.4 MINIMUM CONSOLIDATED EBITDA.........................................13 4.5 MINIMUM TANGIBLE NET WORTH..........................................13 4.6 NEW DEFINITIONS.....................................................14 4.7 AMENDED DEFINITIONS.................................................15 5. CONDITIONS PRECEDENT....................................................15 5.1 CERTIFICATES........................................................15 5.2 OPINION OF COUNSEL..................................................15 5.3 AMENDMENT TO 1993 AGREEMENT.........................................16 5.4 EIGHTH AMENDMENT TO CREDIT AGREEMENT................................16 5.5 AMENDMENT TO LETTER OF CREDIT DOCUMENTS.............................16 5.6 AMENDMENT TO MEMPHIS LEASE DOCUMENTS................................16 5.7 FIRST AMENDMENT TO BSE CREDIT AGREEMENT.............................16 5.8 PAYMENT OF SPECIAL COUNSEL AND FINANCIAL ADVISOR FEES...............16 5.9 PROCEEDINGS AND DOCUMENTS SATISFACTORY..............................17 5.10 AMENDMENT OF WARRANTS..............................................17 6. MISCELLANEOUS...........................................................17 6.1 EFFECT OF AMENDMENT.................................................17 6.2 NO LEGEND REQUIRED..................................................17 6.3 FEES AND EXPENSES...................................................18 6.4 SURVIVAL............................................................18 6.5 DUPLICATE ORIGINALS; EXECUTION IN COUNTERPART.......................18 6.6 RELEASE OF CLAIMS...................................................19 6.7 GOVERNING LAW.......................................................19 BIRMINGHAM STEEL CORPORATION THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT Re: Amended and Restated Note Purchase Agreements Dated as of October 12, 1999 and $76,000,000 9.71% SERIES A SENIOR NOTES DUE DECEMBER 15, 2002 $14,000,000 9.82% SERIES B SENIOR NOTES DUE DECEMBER 15, 2005 $60,000,000 9.92% SERIES C SENIOR NOTES DUE DECEMBER 15, 2005 Dated as of February 20, 2001 To the Persons listed on the signature pages hereof Ladies and Gentlemen: BIRMINGHAM STEEL CORPORATION, a Delaware corporation (together with its successors and assigns, the "Company"), hereby agrees with you as follows: 1. PRELIMINARY STATEMENT. -------------------------- 1.1 Background. (a) The Company entered into those certain Note Purchase Agreements dated as of September 15, 1995, as amended by an Amendment to 1995 Note Purchase Agreement dated as of December 14, 1998, with each of the institutions named in Annex 1 thereto, under and pursuant to which the Company issued and sold to such institutions (i) an aggregate principal amount of Seventy-Six Million Dollars ($76,000,000) of the Company's 6.96% Series A Senior Notes due December 15, 2002, (ii) an aggregate principal amount of Fourteen Million Dollars ($14,000,000) of the Company's 7.07% Series B Senior Notes due December 15, 2005, and (iii) an aggregate principal amount of Sixty Million Dollars ($60,000,000) of the Company's 7.17% Series C Senior Notes due December 15, 2005 (the "1995 Notes"). Pursuant to the terms of a Waiver and Second Amendment to Note Purchase Agreement dated as of October 12, 1999 (the "1999 Second Amendment"), the Company entered into those certain Amended and Restated Note Purchase Agreements dated as of October 12, 1999, and the Company subsequently entered into a First Amendment to Note Purchase Agreement dated as of November 12, 1999 and a Second Amendment to Note Purchase Agreement dated as of May 15, 2000 (collectively, as in effect immediately prior to the amendments contemplated hereby, the "Existing Note Purchase Agreement," and as amended hereby, the "Amended Note Purchase Agreement"), with each of the institutions named in Annex 1 thereto, pursuant to which the Company issued to such institutions, in substitution for the 1995 Notes, (i) an aggregate principal amount of Seventy-Six Million Dollars ($76,000,000) of the Company's 9.71% Series A Senior Notes due December 15, 2002, (ii) an aggregate principal amount of Fourteen Million Dollars ($14,000,000) of the Company's 9.82% Series B Senior Notes due December 15, 2005, and (iii) an aggregate principal amount of Sixty Million Dollars ($60,000,000) of the Company's 9.92% Series C Senior Notes due December 15, 2005 (collectively, the "Notes"). (b) The institutions (other than the Company) listed on the signature pages to this Agreement (collectively, the "Noteholders") are the holders of one hundred percent (100%) of the Notes outstanding as of the date hereof. (c) The Company entered into those certain Amended and Restated Note Purchase Agreements dated as of October 12, 1999, with each of the institutions named in Annex 1 thereto (together with their successors and assigns, the "1993 Noteholders"), as amended by a First Amendment to Note Purchase Agreement dated as of November 12, 1999 and a Second Amendment to Note Purchase Agreement dated as of May 15, 2000 (collectively, as in effect immediately prior to the date hereof, the "1993 Existing Note Purchase Agreement), and by a Third Amendment to Note Purchase Agreement dated as of the date hereof (the "Amendment to 1993 Agreement"; the 1993 Existing Note Purchase Agreement, as amended by the Amendment to 1993 Agreement, is referred to herein as the "1993 Amended Note Purchase Agreement"), under and pursuant to which the Company issued to such institutions, in substitution for Notes in the same amounts issued in 1993, an aggregate principal amount of One Hundred Thirty Million Dollars ($130,000,000) of the Company's 10.03% Senior Notes due December 15, 2005 (collectively, the "1993 Notes"). (d) The Company entered into that certain Credit Agreement dated as of March 17, 1997 (as in effect immediately prior to the date hereof, the "Existing Credit Agreement," and as heretofore amended and as amended by an Eighth Amendment to Credit Agreement dated as of the date hereof (the "Eighth Amendment to Credit Agreement"), the "Amended Credit Agreement"), by and among the Company, the banks party thereto (collectively, the "Banks"), and Bank of America, N.A., as agent (the "Agent"), pursuant to which a Three Hundred Million Dollar ($300,000,000) credit facility has been provided to the Company. (e) Bank of America, N.A. and PNC Bank, National Association (collectively, the "L/C Issuers") have separately provided the Company with two (2) letters of credit (collectively, the "Letters of Credit") which have an aggregate face amount of Forty-One Million Four Hundred Seventy-One Thousand Seven Hundred Eighty-Two Dollars ($41,471,782), which Letters of Credit were issued pursuant to (i) an Amended and Restated Reimbursement Agreement, dated as of October 12, 1999, among the Company, American Steel & Wire Corporation and Bank of America, N.A. (as amended, the "B of A Reimbursement Agreement"), and (ii) a Reimbursement Agreement dated as of October 1, 1996, between PNC Bank, National Association successor to PNC Bank, Kentucky, Inc. and the Company (as amended, "PNC Reimbursement Agreement" and, collectively with the B of A Reimbursement Agreement, the "Existing Reimbursement Agreements"). (f) BSE entered into that certain Credit Agreement dated as of May 15, 2000 with certain of the Noteholders, the 1993 Noteholders, and the Banks, and Bank of America, N.A., as agent (as in effect immediately prior to the date hereof, the "Existing BSE Credit Agreement," and as amended by a First Amendment to Credit Agreement dated as of the date hereof (the "First Amendment to BSE Credit Agreement"), the "Amended BSE Credit Agreement"), pursuant to which a Twenty-Five Million Dollar ($25,000,000) credit facility has been provided to BSE. (g) The Company and the Noteholders have agreed to amend the Existing Note Purchase Agreement to modify certain of the covenants and other provisions of the Existing Note Purchase Agreement, on the terms and conditions set forth herein. 1.2 Definitions. Capitalized terms used but not specifically defined in this Agreement have the respective meanings assigned to them in the Existing Note Purchase Agreement. As used in this Agreement, the following terms have the respective meanings specified below or set forth in the Section hereof following such term: Agent - Section 1.1(d). Agreement, this - means this Third Amendment to Note Purchase Agreement, as it may be amended or otherwise modified from time to time. Amended BSE Credit Agreement - Section 1.1(f). Amended Credit Agreement - Section 1.1(d). Amended Note Purchase Agreement - Section 1.1(a). Amendment to 1993 Agreement - Section 1.1(c). Banks - Section 1.1(d). B of A Reimbursement Agreement - Section 1.1(e). BSE - Birmingham Southeast, LLC. BSE Material Adverse Effect - means a material adverse effect on (a) the business, prospects, profits, Properties or condition (financial or otherwise) of BSE, (b) the ability of BSE to perform its obligations under any of the Financing Documents to which it is a party, or (c) the validity or enforceability of any of the Financing Documents to which BSE is a party. Collateral Agent - means SouthTrust Bank, National Association, in its capacity as collateral agent under the Intercreditor Agreement. Company - the introductory sentence. Effective Date - Section 5. Eighth Amendment to Credit Agreement - Section 1.1(d). Existing BSE Credit Agreement - Section 1.1(f). Existing Credit Agreement - Section 1.1(d). Existing Note Documents - Section 6.6. Existing Note Purchase Agreement - Section 1.1(a). Existing Reimbursement Agreements - Section 1.1(e). Financing Document - Section 3.1. First Amendment to BSE Credit Agreement - Section 1.1(f). Indenture Trustee - has the meaning set forth in the Intercreditor Agreement. L/C Issuers - Section 1.1(e). Letters of Credit - Section 1.1(e). 1993 Notes - Section 1.1(a). 1993 Amended Note Purchase Agreement - Section 1.1(c). 1993 Existing Note Purchase Agreement - Section 1.1(c). 1993 Noteholders - Section 1.1(c). 1993 Notes - Section 1.1(c). 1999 Second Amendment - Section 1.1(a). Noteholders - Section 1.1(b). Notes - Section 1.1(a). Owner Trustee - has the meaning set forth in the Intercreditor Agreement. PNC Reimbursement Agreement - Section 1.1(e). Transaction Documents - has the meaning specified in the Omnibus Collateral Agreement. 2. AMENDMENTS -------------- 2.1 Amendment of Existing Note Purchase Agreement. The amendments set forth herein shall take effect (and shall be deemed to have taken effect) as of the Effective Date. 2.2 Continuity and Affirmation of Obligations. Notwithstanding any other provision of this Agreement or any other document or agreement, the indebtedness of the Company under the Existing Note Purchase Agreement and the Notes shall not be or be deemed to be paid or discharged or novated hereby and shall continue in full force and effect as amended hereby. 3. REPRESENTATIONS AND WARRANTIES --------------------------------- To induce the Noteholders to enter into this Agreement, (a) the Company represents and warrants to the Noteholders that the representations and warranties made by the Company in Section 3 of the 1999 Second Amendment and by BSE in the Existing BSE Credit Agreement are true as of the date hereof (except to the extent that any such representation in the 1999 Second Amendment or the Existing BSE Credit Agreement relates to a specific other date or as set forth on Schedule 3 hereto or as disclosed to the Noteholders or Nightingale & Associates LLC in writing prior to the date hereof), and (b) the Company makes the additional representations and warranties set forth in this Section 3. The Company agrees and acknowledges that for purposes of Section 10.1(e) of the Existing Note Purchase Agreement, its representations and warranties, as set forth in this Agreement, are and constitute representations and warranties furnished in connection with the Existing Note Purchase Agreement. 3.1 Corporate Existence and Power. Each of the Company and each Restricted Subsidiary has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and each other agreement and document that is being executed or delivered by the Company and/or any such Subsidiary in connection herewith (each of such agreements and documents, including this Agreement, being referred to herein as a "Financing Document"). 3.2 Corporate Authority. The execution, delivery and performance by the Company and each Restricted Subsidiary of each Financing Document to which the Company or such Restricted Subsidiary is a party, and the performance by the Company of the Amended Note Purchase Agreement is within the corporate or limited liability company powers of the Company or such Restricted Subsidiary, as the case may be, and has been duly authorized by all necessary corporate or limited liability company action on the part of the board of directors or management (no action on the part of the stockholders or members of the Company or any such Restricted Subsidiary being required by law, other than such actions which have been duly taken), of the Company or such Restricted Subsidiary. 3.3 Binding Effect. Each Financing Document to which the Company or any Restricted Subsidiary is a party has been duly executed by the Company or such Restricted Subsidiary and each Financing Document and the Amended Note Purchase Agreement, the Security Documents and the BSE Collateral Documents are legal, valid and binding obligations of the Company or such Restricted Subsidiary, as the case may be, enforceable against the Company or such Restricted Subsidiary in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally, or by general principles of equity. 3.4 No Conflicts with Agreements, Etc. Neither the execution and delivery by the Company or any Restricted Subsidiary of any Financing Document to which it is a party, nor the fulfillment of, or compliance with, the terms and provisions of the Amended Note Purchase Agreement, the Notes, the Security Documents, or any of the Financing Documents, will conflict with, or result in a breach or violation of any term, condition or provision of, or constitute a default under, or result in the creation of any Lien on any Property of the Company or such Restricted Subsidiary pursuant to its charter or by-laws or operating agreement, or any contract, agreement, mortgage, indenture, lease or instrument to which it is a party or by which it is bound or to which it or any of its Property is subject, or any order, statute, law, rule or regulation to which it or any of its Property is subject. 3.5 Consents, Etc. No consent, approval or authorization of, or declaration, registration or filing (except as contemplated under Section 4) with, any Governmental Authority or any nongovernmental Person, including, without limitation, any creditor (other than the 1993 Noteholders, the Banks, the L/C Issuer, the Owner Trustee and the Indenture Trustee), or any stockholder or member of the Company or any Restricted Subsidiary, is required in connection with the execution or delivery by the Company or any Restricted Subsidiary of any Financing Document to which it is a party or the performance by the Company or such Restricted Subsidiary of its obligations under any Financing Document, or as a condition to the legality, validity or enforceability of any such Financing Document, except, in each case, those which have been obtained or which are contemplated by the Transaction Documents. 3.6 Full Disclosure. The financial statements and other written statements, certificates and materials provided to the Noteholders pursuant to the Existing Note Purchase Agreement and the written statements, certificates and materials furnished by or on behalf of the Company to you in connection with this Agreement and the transactions contemplated hereby do not contain any untrue statement of a material fact or omit a material fact necessary to make the statements contained therein or herein not misleading in light of the circumstances in which they were made. Except as disclosed (i) in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, (ii) in the other reports filed by the Company with the Securities and Exchange Commission after June 30, 2000, (iii) in press releases issued by the Company prior to the date hereof, or (iv) to you or Nightingale Associates, LLC in writing, there is no fact known to the Company which materially affects adversely or, so far as the Company can now reasonably foresee, will materially affect adversely the business, prospects, profits, Properties or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or the ability of each of the Company and each Restricted Subsidiary to perform its obligations set forth in the Financing Documents to which it is a party or, in the case of the Company, the Amended Note Purchase Agreement or the Notes. The financial statements included in the reports referred to in clauses (i) and (ii) of the preceding sentence fairly present, in all material respects, the financial condition and results of operations of the Company and its Subsidiaries as of the dates thereof and for the periods covered thereby in accordance with generally accepted accounting principles. 3.7 Outstanding Debt and Liens. Except for Debt owed under the BSE Credit Agreement, Schedule 3.8 to the 1999 Second Amendment sets forth a correct and complete schedule and brief description of all Debt of the Company and the Subsidiaries outstanding on the date hereof and all consensual Liens securing such Debt. There are no Liens on any of the Property of the Company or any Restricted Subsidiary except Liens permitted by Section 8.17(a) of the Amended Note Purchase Agreement. 3.8 Pending Litigation. There are no proceedings, actions or investigations pending or, to the knowledge of the Company, threatened against or affecting the Company or any Subsidiary in any court or before any Governmental Authority or arbitration board or tribunal (a) challenging, or in any way dealing with, the legality, validity or enforceability of any Financing Document, the Amended Note Purchase Agreement or the Notes or the authority of the Company or any Restricted Subsidiary to enter into or execute any Financing Document, the Amended Note Purchase Agreement or the Notes, or (b) except as disclosed (i) in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, (ii) in the other reports filed by the Company with the Securities and Exchange Commission after June 30, 2000, (iii) in press releases issued by the Company prior to the date hereof, or (iv) to you or Nightingale Associates, LLC in writing, that, in the aggregate for all such proceedings, actions and investigations, could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.9 No Defaults. No event has occurred and is continuing and no condition exists which, upon execution and delivery of this Agreement (and after giving effect to any waivers and amendments that have become effective on or before the date hereof) and the other Transaction Documents, would constitute a Default or Event of Default. Neither the Company nor any Subsidiary is in violation in any respect of any term of any charter instrument or by-law or limited liability company agreement and neither the Company nor any Subsidiary is in default in the payment of principal or interest on any Debt or in default under any instrument or instruments or agreements under and subject to which any Debt has been issued and no event has occurred and is continuing under the provisions of any such instrument or agreement which with the lapse of time or the giving of notice, or both, would constitute a default or an event of default thereunder, which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.10 Compliance with Law. Neither the Company nor any Subsidiary is in violation of any law, ordinance, governmental rule or regulation to which it is subject, except for such violations that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.11 Title to Properties. (a) Each of the Company and the other Subsidiaries has good and marketable title to all real Property, and good title to all of the other Property, reflected in the most recent balance sheet delivered pursuant to Section 9.1 of the Existing Note Purchase Agreement (except as sold or otherwise disposed of in the ordinary course of business), except for such failures to have such good and marketable title as are immaterial to such financial statements and that, in the aggregate for all such failures, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. All such Property is free from Liens not permitted by Section 8.17(a) of the Amended Note Purchase Agreement. (b) Each lease of real Property in the name or for the benefit of the Company or any Subsidiary is valid and subsisting and in full force and effect and good standing, except for such failures to be valid and subsisting and in full force and effect and good standing that, in the aggregate, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. (c) Each of the Company and the Subsidiaries owns, possesses or has the right to use all of the patents, trademarks, service marks, trade names, copyrights and licenses, and rights with respect thereto, necessary for the present and currently planned future conduct of its business, without any known conflict with the rights of others, except for such failures to own, possess, or have the right to use, that, in the aggregate for all such failures, could not reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.12 Environmental Compliance. Except as disclosed (i) in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, (ii) in the other reports filed by the Company with the Securities and Exchange Commission after June 30, 2000, (iii) in press releases issued by the Company prior to the date hereof, or (iv) to the Noteholders or Nightingale Associates, LLC in writing: (a) Compliance -- each of the Company and the Subsidiaries is in compliance with all Environmental Protection Laws in effect in each jurisdiction where it is presently doing business, and in which the failure so to comply could be reasonably expected to have a Material Adverse Effect or a BSE Material Adverse Effect; (b) Liability -- neither the Company nor any of the Subsidiaries is subject to any liability under any Environmental Protection Laws that, in the aggregate, could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect; and (c) Notices -- neither the Company nor any Subsidiary has received any (i) notice from any Governmental Authority by which any of its present or previously-owned or leased real Properties has been designated, listed, or identified in any manner by any Governmental Authority charged with administering or enforcing any Environmental Protection Law as a Hazardous Substance disposal or removal site, "Super Fund" clean-up site, or candidate for removal or closure pursuant to any Environmental Protection Law, (ii) notice of any Lien arising under or in connection with any Environmental Protection Law that has attached to any revenues of, or to, any of its owned or leased real Properties, or (iii) summons, citation, notice, directive, letter, or other communication, written or oral, from any Governmental Authority concerning any intentional or unintentional action or omission by the Company or such Subsidiary in connection with its ownership or leasing of any real Property resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying, dumping, or otherwise disposing of any Hazardous Substance into the environment resulting in any material violation of any Environmental Protection Law, in each case where the effect of the matters that are the subject of any such notice, summons, citation, directive, letter or other communication could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect. 3.13 Restrictions on Company and Subsidiaries. Neither the Company nor any Subsidiary: (a) except as set forth in Schedule 3 hereto, is a party to any contract or agreement, or subject to any charter or other corporate or limited liability company restriction that, in the aggregate for all such contracts, agreements, charter and corporate and limited liability company restrictions, could reasonably be expected to have a Material Adverse Effect or a BSE Material Adverse Effect; (b) is a party to any contract or agreement that restricts the right or ability of such corporation to incur Debt, other than the Amended Note Purchase Agreement, the 1993 Amended Note Purchase Agreement, the Amended Credit Agreement, any other Transaction Document and the agreements listed in Schedule 3 hereto, the terms of none of which is violated by the execution and delivery by the Company or any Restricted Subsidiary of the Financing Documents to which it is a party, or compliance by the Company or any Restricted Subsidiary with the Financing Documents to which it is a party or, in the case of the Company, the Amended Note Purchase Agreement and the Notes; and (c) has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its Property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 8.17(a) of the Amended Note Purchase Agreement. 3.14 Solvency. After giving effect to the transactions contemplated by the Transaction Documents, (a) the fair value and the fair salable value of the assets of the Company and each Restricted Subsidiary (excluding any Debt due from the Company or such Restricted Subsidiary, as the case may be) will each be in excess of the fair valuation of its total liabilities (including all contingent liabilities), (b) the Company and each Restricted Subsidiary will each be able to pay its debts or other obligations in the ordinary course as they mature, and (c) the Company and each Restricted Subsidiary each has capital not unreasonably small to carry on its business and all business in which it proposes to be engaged. 4. AMENDMENTS ------------- Effective as of the Effective Date, the Existing Note Purchase Agreement is amended as follows: 4.1 Interest Rate Adjustment. Section 1.2(e)(ii) is deleted and the following Section 1.2(e)(ii) is substituted therefor: (ii) SBQ Asset Sale. If the Company shall fail to make the SBQ Asset Sale Prepayment on or prior to January 31, 2001, the unpaid principal amount of the Notes of each Series shall bear interest (A) at all times after January 31, 2001 and until (and including) the payment in full thereof, at a rate per annum equal to (x) the interest rate then applicable to the Notes plus (y) one percent (1%), provided, that, notwithstanding the dates that interest is otherwise payable under the Notes, the additional one percent (1%) interest that is payable pursuant to clause (y) of this sentence shall accrue and not be payable in cash (such deferred interest being referred to herein as the "Deferred Portion of the Interest") until the earlier of (1) the date that an SBQ Asset Sale Prepayment is made, and (2) April 1, 2002, and further provided, that from and after the SBQ Asset Sale Prepayment and the payment in full in cash of the Deferred Portion of the Interest, the one percent (1%) referred to in clause (y) above shall be reduced to fifty--one-hundredths percent (.50%), all of which shall be payable in cash each month with all other interest that is payable on the Notes; and (B) on any overdue principal (including any overdue prepayment of principal) and Make-Whole Amount, if any, and (to the extent permitted by applicable law) on any overdue installment of interest, at a rate per annum equal to the lesser of (1) the highest rate allowed by applicable law, and (2) the interest rate then applicable to the Notes (after giving effect to the adjustment required by clause (A) above) plus two percent (2%). 4.2 Fixed Charge Coverage Ratio. Section 8.11 is deleted and the following is substituted therefor: 8.11. Intentionally Deleted. 4.3 Minimum SBQ Division EBITDA. Section 8.12A is deleted and the following is substituted therefor: 8.12A. Minimum SBQ Division EBITDA. If the Cleveland Cessation Condition is not satisfied prior to June 30, 2001, the Company will not permit the aggregate amount of SBQ Division EBITDA for any fiscal quarter ending on or after June 30, 2001 to be less than $1.00. 4.4 Minimum Consolidated EBITDA. Section 8.12 is deleted and the following Section 8.12 is substituted therefor: 8.12. Minimum Consolidated EBITDA. The Company will not permit the aggregate amount of Consolidated EBITDA for any Applicable EBITDA Period specified in the following table to be less than the amount corresponding to such period in such table: Applicable EBITDA Period Ending Minimum EBITDA ------------------------------- -------------- December 31, 2000 $59,004,000 March 31, 2001 $40,177,000 June 30, 2001 $26,385,000 September 30, 2001 $28,237,000 December 31, 2001 $35,655,000 March 31, 2002 and $44,427,000 thereafter For the purposes of this Section 8.12, the "Applicable EBITDA Period" means, with respect to the calculation of Consolidated EBITDA at the end of any fiscal quarter, the four fiscal quarters then ended. 4.5 Minimum Tangible Net Worth. Section 8.13 is deleted and the following Section 8.13 is substituted therefor: 8.13. Minimum Tangible Net Worth The Company will not permit Consolidated Tangible Net Worth at any time to be less than (i) negative fifty million dollars (-$50,000,000), plus (ii) fifty percent (50%) of Adjusted Net Income (only if greater than Zero Dollars ($0)) of the Company and its Subsidiaries on a consolidated basis for each fiscal quarter of the Company ending after December 31, 2000, minus (iii) the sum of the amounts by which Consolidated Tangible Net Worth is reduced (i.e. the amount by which stockholders' equity is reduced) after December 31, 2000 by any TNW Adjustment plus (iv) all of the Net Proceeds from each Equity Issuance by the Company after December 31, 2000. 4.6 New Definitions. The following definitions are inserted in Section 11.1 in alphabetical order: BSE - Birmingham Southeast, LLC. Deferred Portion of the Interest - Section 1.2(e)(ii)(A). 4.7 Amended Definitions. The definitions in Section 11.1 of the following terms are deleted and the following definitions are substituted therefor: Acceptable SBQ Asset Sale - means a sale by the Company of the SBQ Division (Memphis/Cleveland) as to which the conditions precedent to the release of Collateral set forth in Section 4.9(b) of the Intercreditor Agreement have been satisfied. 5. CONDITIONS PRECEDENT ------------------------- The amendments set forth in Section 4 shall take effect (and shall be deemed to have become effective) as of December 30, 2000 (the "Effective Date") upon the satisfaction of the following conditions: 5.1 Certificates. (a) Company Officer's Certificate. The Company shall have delivered to the Noteholders (or their special counsel) a certificate signed by the Chairman, the Vice Chairman, the President or the Executive Vice President-Chief Financial Officer of the Company, dated the date hereof, certifying that (i) no Default or Event of Default under the Amended Note Purchase Agreement exists and (ii) the representations and warranties set forth in Section 3 (including those incorporated by reference from the 1999 Second Amendment and the Existing BSE Credit Agreement) and in each of the other Financing Documents are true and correct on the date hereof. (b) Company Secretary's Certificate. The Company shall have delivered to the Noteholders a certificate signed by the Secretary or one of the Assistant Secretaries of the Company, dated the date hereof, certifying as true and correct the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of each of the Financing Documents to which the Company is a party. 5.2 Opinion of Counsel. The Noteholders shall have received an opinion (dated as of the hereof, substantially in the form set forth in Exhibit A, and as to such other matters as the Noteholders may reasonably request) from Burr & Forman LLP, special counsel for the Company and the Restricted Subsidiaries. 5.3 Amendment to 1993 Agreement. The Company and the 1993 Noteholders shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of the fully executed Amendment to 1993 Agreement. 5.4 Eighth Amendment to Credit Agreement. The Company, the Banks and the Agent shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of the fully executed Eighth Amendment to Credit Agreement, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.5 Amendment to Letter of Credit Documents. The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of an Amendment to PNC Reimbursement Agreement, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.6 Amendment to Memphis Lease Documents. The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of an amendment to the Melt Shop Equipment Financing Documents, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.7 First Amendment to BSE Credit Agreement The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of the First Amendment to BSE Credit Agreement, which shall be in form and substance satisfactory to the Noteholders and their special counsel. 5.8 Payment of Special Counsel and Financial Advisor Fees. Without limiting the provisions of Section 6.3, the Company shall have paid on or before the date hereof the fees, charges and disbursements of the Noteholders' special counsel referred to in Section 5.2, and Nightingale & Associates, LLC, in each case to the extent reflected in statements rendered to the Company on or prior to the date hereof. 5.9 Proceedings and Documents Satisfactory. All opinions, certificates and other instruments and all proceedings taken in connection with the execution and delivery of this Agreement and the transactions contemplated hereby shall be reasonably satisfactory to the Noteholders and their special counsel; and the Noteholders and their special counsel shall have received copies of such documents and papers as may be reasonably requested in connection therewith. 5.10 Amendment of Warrants. The Company shall have delivered to the Noteholders (or their special counsel) a true and correct counterpart of Amendment No. 1 to the Warrant Agreement dated as of May 15, 2000 among the Company and the warrantholders which are parties thereto, which amendment shall effect a reduction of the Exercise Price (as defined in such Warrant Agreement) of the Common Stock Purchase Warrants issued pursuant thereto to a per share price of one cent ($.01) (subject to adjustment pursuant to the terms of such Common Stock Purchase Warrants), and which amendment shall be in form and substance satisfactory to the Noteholders and their special counsel. 6. MISCELLANEOUS ----------------- 6.1 Effect of Amendment. If the foregoing is acceptable to you, please note your acceptance in the space provided below. Upon the execution and delivery of this Agreement by each of the Noteholders and the Company, the conditions set forth in Section 5 shall be deemed satisfied or waived and the Existing Note Purchase Agreement shall be deemed to be amended as set forth above. This Agreement shall be binding upon, and shall inure to the benefit of, the permitted successors and assigns of the parties hereto and the holders from time to time of the Notes. 6.2 No Legend Required. Any and all notices, requests, certificates and other instruments including, without limitation, the Notes, may refer to (a) the Note Purchase Agreement or (b) the Note Purchase Agreement dated as of September 15, 1995 or as of October 12, 1999, in each case without making specific reference to this Third Amendment to Note Purchase Agreement, but nevertheless all such references shall be deemed to include this Third Amendment to Note Purchase Agreement unless the context shall otherwise require. 6.3 Fees and Expenses. Whether or not the transactions herein contemplated shall be consummated, the Company agrees to pay directly all reasonable out-of-pocket travel expenses and other reasonable out-of-pocket expenses of the Noteholders in connection with the preparation, negotiation, execution and delivery of the Financing Documents and the Amended Note Purchase Agreement, and the transactions contemplated hereby and thereby, including, but not limited to, the reasonable fees and disbursements of Bingham Dana LLP, the Noteholders' special counsel, and Nightingale & Associates, LLC, financial advisor to the Noteholders and the 1993 Noteholders, photocopying costs, and so long as any Noteholder shall hold any of the Notes, all such expenses relating to any amendments, waivers or consents pursuant to the provisions of the Amended Note Purchase Agreement, including, without limitation, any amendments, waivers or consents resulting from any work-out, restructuring or similar events relating to the performance by the Company and the Subsidiaries of their respective obligations under the Financing Documents, the Amended Note Purchase Agreement and the Notes. The Company also agrees that it will pay and save each Noteholder harmless against any and all liability with respect to stamp and other similar taxes, if any, which may be payable or which may be determined to be payable in connection with the execution and delivery of the Financing Documents and this Agreement. The Company agrees to protect and indemnify each Noteholder against any liability for any and all brokerage fees and commissions payable or claimed to be payable to any Person retained by the Company, the Restricted Subsidiaries, or any of the Affiliates that are controlled by the Company in connection with the transactions contemplated by this Agreement. 6.4 Survival. All warranties, representations, certifications and covenants made by the Company in this Agreement or in any certificate or other instrument delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by the Noteholders and shall survive the execution of this Agreement, regardless of any investigation made by or on behalf of the Noteholders. All statements in any such certificate or other instrument shall constitute warranties and representations of the Company under this Agreement. 6.5 Duplicate Originals; Execution in Counterpart. Two or more duplicate originals of this Agreement may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. This Agreement may be executed in one or more counterparts and shall be effective when at least one counterpart shall have been executed by each party to this Agreement, and each set of counterparts which, collectively, show execution by each such party to this Agreement shall constitute one duplicate original. A facsimile of an executed counterpart shall have the same effect as the original executed counterpart. 6.6 Release of Claims. The Company, for itself and all of its predecessors, successors and assigns, acknowledges, affirms and represents that immediately prior to giving effect to this Agreement, it is legally, validly and enforceably obligated to each of the Noteholders under and pursuant to the Notes and the Existing Note Purchase Agreement and that the Company has no defense, offset, counterclaim or right of recoupment with regard to such obligations. Additionally, the Company for itself and all of its predecessors, successors and assigns, does hereby fully, forever and completely release and discharge each of the Noteholders and all of their respective employees, officers, directors, trustees, shareholders, affiliates, agents, attorneys, representatives, predecessors, successors and assigns (collectively, the "Released Parties"), from any and all claims, demands, liabilities, damages and causes of action of any kind whatsoever, whether based on facts in existence prior to or as of the date hereof, whether known or unknown, which the Company may now have or may have had at any time heretofore or may have at anytime hereafter, whether for contribution or indemnity or otherwise, and whether direct or indirect, fixed or contingent, liquidated or unliquidated, arising out of or related in any way to any of the following: (a) the Notes and the Existing Note Purchase Agreement and all documents relating thereto or executed in connection therewith (the "Existing Note Documents"); and (b) any action, inaction or omission by any of the Released Parties in connection with the Existing Note Documents or the administration thereof. 6.7 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. [Remainder of page intentionally left blank; next page is signature page.] If you are in agreement with the foregoing, please sign the form of acceptance in the space provided below, whereupon the foregoing shall become a binding agreement between you and the Company as of the date first above written. BIRMINGHAM STEEL CORPORATION By /s/ J. Daniel Garrett ---------------------- Name: J. Daniel Garrett Title: Chief Financial Officer Accepted: PRINCIPAL LIFE INSURANCE COMPANY (f/k/a Principal Mutual Life Insurance Company) By: Principal Capital Management, LLC a Delaware limited liability company, its authorized signatory By: /s/ Debra Svoboda Epp ---------------------- Name: Debra Svoboda Epp Title: Counsel By: /s/ Clint Woods ----------------- Name: Clint Woods Title: Counsel THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/ Robert Bayer ----------------- Name: Robert Bayer Title: Investment Officer NATIONWIDE LIFE INSURANCE COMPANY By: /s/ Mark W. Poeppelman --------------------------------- Name: Mark W. Poeppelman Title: Associate Vice President CONNECTICUT GENERAL LIFE INSURANCE COMPANY By CIGNA Investments, Inc.,its authorized agent By: /s/ Stephen H. Wilson -------------------------------- Name: Stephen H. Wilson Title: Managing Director LIFE INSURANCE COMPANY OF NORTH AMERICA By CIGNA Investments, Inc., its authorized agent By: /s/ Stephen H. Wilson -------------------------------- Name: Stephen H. Wilson Title: Managing Director ACE PROPERTY AND CASUALTY INSURANCE COMPANY By CIGNA Investments,Inc.,its authorized agent By: /s/ Stephen H. Wilson -------------------------------- Name: Stephen H. Wilson Title: Managing Director CENTURY INDEMNITY COMPANY By CIGNA Investments, Inc., its authorized agent By: /s/ Stephen H. Wilson -------------------------------- Name: Stephen H. Wilson Title: Managing Director THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By: /s/ David A. Barras ------------------------------ Name: David A. Barras Title: Its Authorized Representative AMERICAN UNITED LIFE INSURANCE COMPANY By: /s/ Christopher D. Pahlke ------------------------------------ Name: Christopher D. Pahlke Title: Vice President THE STATE LIFE INSURANCE COMPANY By: American United Life Insurance Company, it's Agent By: /s/ Christopher D. Pahlke ------------------------------------ Name: Christopher D. Pahlke Title: Vice President AMERITAS LIFE INSURANCE CORP. By: Ameritas Investment Advisors Inc., as Agent By: /s/ Patrick J. Henry ------------------------------- Name: Patrick J. Henry Title: Vice President-Fixed Income Securities ACACIA LIFE INSURANCE COMPANY By: Ameritas Investment Advisors Inc., as Agent By: /s/ Patrick J. Henry ------------------------------- Name: Patrick J. Henry Title: Vice President - Fixed Income Securities MTL INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Sean M. O'Connell -------------------------------- Name: Sean M. O'Connell Title: Vice President GUARANTEE RESERVE LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Sean M. O'Connell -------------------------------- Name: Sean M. O'Connell Title: Vice President NATIONAL TRAVELERS LIFE COMPANY By: Advantus Capital Management, Inc. By: /s/ Allen Steinkopf ------------------------------ Name: Allen Steinkopf Title: Vice President MINNESOTA LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Allen Steinkopf ------------------------------ Name: Allen Steinkopf Title: Vice President THE RELIABLE LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Allen Steinkopf ------------------------------ Name: Allen Steinkopf Title: Vice President FEDERATED LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Allen Steinkopf ------------------------------ Name: Allen Steinkopf Title: Vice President FEDERATED MUTUAL INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Allen Steinkopf ------------------------------ Name: Allen Steinkopf Title: Vice President SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) By: /s/ John N. Whelihan ------------------------------- Name: John N. Whelihan Title: Vice President, U.S. Private Placements-For President By: /s/ Richard Gordon ----------------------------- Name: Richard Gordon Title: Vice President, U.S. Public Bonds-For Secretary SUN LIFE ASSURANCE COMPANY OF CANADA By: /s/ John N. Whelihan ------------------------------- Name: John N. Whelihan Title: Vice President, U.S. Private Placements - For President By: /s/ Richard Gordon ----------------------------- Name: Richard Gordon Title: Vice President, U.S. Public Bonds - For Secretary SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK By: /s/ John N. Whelihan ------------------------------- Name: John N. Whelihan Title: Vice President, U.S. Private Placements - For President By: /s/ Richard Gordon ----------------------------- Name: Richard Gordon Title: Vice President,U.S.Public Bonds- For Secretary GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY (formerly known as Great Northern Insured Annuity Corporation) By: /s/ Morian C. Mooers ------------------------------- Name: Morian C. Mooers Title: Investment Officer THE LINCOLN NATIONAL LIFE INSURANCE COMPANY By: Delaware Lincoln Investment Advisors, a series of Delaware Management Business Trust, Attorney-in-Fact By: /s/ Annette M. Teders -------------------------------- Name: Annette M. Teders Title: Vice President SCHEDULE 3 EXCEPTIONS TO REPRESENTATIONS None. EXHIBIT A [FORM OF OPINION OF SPECIAL COUNSEL TO THE COMPANY AND THE RESTRICTED SUBSIDIARIES] EXHIBIT 4.5.1 FIFTH AMENDMENT TO REIMBURSEMENT AGREEMENT This FIFTH AMENDMENT TO REIMBURSEMENT AGREEMENT (this "Fifth Amendment") is made as of February 20, 2001, but effective nunc pro tunc as of December 30, 2000, and entered into by and between BIRMINGHAM STEEL CORPORATION, a corporation organized and existing under the laws of the State of Delaware (the "Company"), and PNC BANK, NATIONAL ASSOCIATION (the "Bank"), and amends that certain Reimbursement Agreement dated as of October 1, 1996, as amended to the date hereof, by and between the Company and PNC BANK, KENTUCKY, INC., the Bank's predecessor in interest (the Reimbursement Agreement, as amended to the date hereof, is hereinafter referred to as the "Existing Reimbursement Agreement"). W I T N E S S E T H : WHEREAS, the Company has requested the Bank to amend nunc pro tunc certain terms of the Existing Reimbursement Agreement; and WHEREAS, the Bank has agreed to consent to such amendment, all as more particularly set forth herein. NOW THEREFORE, in consideration of the foregoing premises, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and with the intent to be legally bound hereby, the parties hereto agree as follows: ARTICLE I AMENDMENTS TO EXISTING REIMBURSEMENT AGREEMENT Section 1.01 Changes to Defined Terms. The following definitions are inserted in alphabetical order in Section 1.1 of the Existing Reimbursement Agreement: "Fifth Amendment" means the Fifth Amendment to Reimbursement Agreement dated as of February 20, 2001, but effective nunc pro tunc as of December 30, 2000, by and between the Company and the Bank. "Fifth Amendment Effective Date" means December 30, 2000. "Eighth Amendment to Credit Agreement" means that certain Eighth Amendment to Credit Agreement dated as of February 20, 2001, by and among the Company, the financial institutions party thereto and Bank of America, N.A., as successor to NationsBank, N.A. (South), as Agent. Section 1.02 Amendment of Section 2.3. Section 2.3 of the Existing Reimbursement Agreement is hereby amended and restated in its entirety to read as follows: (a) The Company shall pay to the Bank a fee with respect to the Letter of Credit at a rate per annum equal to the Applicable Margin times the stated amount of the Letter of Credit based on a 365 day year and the actual number of days elapsed, payable quarterly in advance, on January 1, April 1, July 1 and October 1. The preceding notwithstanding, the additional one percent (1%) interest that is payable as a result of the Company's failure to consummate the sale of all of the SBQ Division (Memphis/Cleveland) on or before January 31, 2001 shall accrue and not be payable in cash (such deferred fee being referred to herein as the "Deferred Portion of the Fee") until the earliest of (i) the date that the sale of the SBQ Division is consummated, (ii) April 1, 2002, or (iii) the date of the acceleration of all sums due hereunder; and further provided, that after the payment in full in cash of the Deferred Portion of the Fee, the one percent (1%) referred to above shall be reduced to one-half percent (.50%), all of which shall be payable in cash quarterly along with all other letter of credit fees. Section 1.03 Financial Covenants. Article 5 of the Existing Reimbursement Agreement is amended by amending and restating Subsections 5.18(a), 5.18(b), 5.18(c) and 5.18(f) to read as follows: Section 5.18 Financial Covenants. The Company shall not: (a) [Reserved] (b) Minimum Consolidated EBITDA. Permit the aggregate amount of Consolidated EBITDA to be less than: (i) $40,177,000 for the four fiscal quarters ending March 31, 2001; (ii) $26,385,000 for the four fiscal quarters ending June 30, 2001; (iii) $28,237,000 for the four fiscal quarters ending September 30, 2001; (iv) $35,655,000 for the four fiscal quarters ending December 31, 2001; and (v) $35,655,000 for any four fiscal quarter period ending any time after December 31, 2001. (c) Minimum Tangible Net Worth. Permit Consolidated Tangible Net Worth at any time to be less than (i) negative Fifty Million Dollars ($-50,000,000), plus (ii) fifty percent (50%) of Adjusted Net Income (only if greater than Zero Dollars ($0)) of the Company and its Subsidiaries on a consolidated basis for each fiscal quarter of the Company ending after December 31, 2000, minus (iii) the sum of the amounts by which Consolidated Tangible Net Worth was reduced (i.e., the amount by which stockholders' equity was reduced) after December 31, 2000 by any TNW Adjustment plus (iv) all of the Net Proceeds from each Equity Issuance by the Company after December 31, 2000. (d) SBQ Minimum EBITDA. If the Cleveland Cessation Condition shall not have been satisfied on or prior to June 30, 2001, the Borrower will not permit the aggregate amount of SBQ Division EBITDA for any fiscal quarter ending on or after June 30, 2001 to be less than $1.00. Section 1.04 No Other Amendments or Waivers. The amendments set forth in Sections 1.01 through 1.03 hereof do not either implicitly or explicitly alter, waive or amend, except as expressly provided in this Fifth Amendment, the provisions of the Existing Reimbursement Agreement. The execution and delivery of this Fifth Amendment does not and shall not constitute a reaffirmation or restatement of any of the provisions of Article 4 of the Existing Reimbursement Agreement. The amendments set forth in Sections 1.01 through 1.03 hereof do not amend or waive, now or in the future, compliance with any other covenant, term or condition to be performed or complied with nor do they impair any rights or remedies of the Bank under the Existing Reimbursement Agreement with respect to any such violation. ARTICLE II CONDITIONS PRECEDENT Section 2.01 Conditions Precedent. Each of the following shall be a condition precedent to the effectiveness of this Fifth Amendment: (a) receipt by the Bank of a fully executed counterpart original of this Fifth Amendment. (b) receipt by the Bank of copies of the fully-executed amendments to (or amendments and restatements of) each of the following agreements to be entered into as of the date hereof (the "Amendment Documents"): (i) the Credit Agreement; (ii) the 1993 Note Purchase Agreement; and (iii) the 1995 Note Purchase Agreement. (c) receipt by the Bank of copies of the fully-executed waivers to the Memphis Lease Agreement and the Memphis Equipment Indenture in form and substance satisfactory to the Bank; (d) receipt by the Bank (or its counsel) of a true and correct counterpart of an amendment to the Warrant Agreement, which amendment shall effect a reduction of the Exercise Price (as defined in the Warrant Agreement) of each of the Common Stock Purchase Warrants issued pursuant to the Warrant Agreement to a per share price of one cent ($.01) (subject to adjustment pursuant to the terms of such Common Stock Purchase Warrants), and which amendment shall be in form and substance satisfactory to the Bank and its counsel; (e) receipt by the Bank of evidence that the Agent has determined that the conditions precedent to the effectiveness of the Eighth Amendment to Credit Agreement have been satisfied or waived by the Agent; (f) receipt by the Bank of fully-executed copies of all corporate or other necessary action taken by the Borrower to authorize the execution, delivery and performance of this Fifth Amendment and the other Loan Documents being delivered in connection herewith, certified by the Secretary or Assistant Secretary of the Borrower. (g) receipt by the Bank of an opinion or opinions of counsel to the Borrower and the Restricted Subsidiaries, in form reasonably satisfactory to the Bank, regarding (i) the formation of the Borrower and each Guarantor, (ii) the authority of the Borrower and each Guarantor to execute, deliver and perform this Fifth Amendment, the Existing Reimbursement Agreement as amended by this Fifth Amendment, the other Loan Documents and Amendment Documents being executed and delivered in connection herewith (to the extent a party thereto), (iii) the enforceability of such Loan Documents and Amendment Documents under the laws of the State of Georgia or Alabama, as the case may be, (iv) whether the execution, delivery and performance by the Borrower and such Guarantor of such Loan Document and Amendment Documents violate certain specified agreements to which the Borrower or any Guarantor is a party and (v) such other matters as the Bank may reasonably request; (h) receipt by the Bank of all expenses payable by the Company to the Bank and its counsel and due on or prior to the effectiveness of the Fifth Amendment; and (i) receipt by the Bank of such other documents, agreements and instruments as the Bank may reasonably request. Section 2.02 Fifth Amendment Effective Date. Upon completion of the conditions set forth in Section 2.01 of this Fifth Amendment, the effective date of this Fifth Amendment is deemed to be December 30, 2000, nunc pro tunc. ARTICLE III GENERAL PROVISIONS Section 3.01 References. All notices, communications, agreements, certificates, documents or other instruments executed and delivered after the execution and delivery of this Fifth Amendment in connection with the Existing Reimbursement Agreement, any of the other documents or the transactions contemplated thereby may refer to the Existing Reimbursement Agreement without making specific reference to this Fifth Amendment, but nevertheless all such references shall include this Fifth Amendment unless the context requires otherwise. From and after the Fifth Amendment Effective Date, all references in the Existing Reimbursement Agreement and each of the other documents to the Reimbursement Agreement shall be deemed to be references to the Existing Reimbursement Agreement as amended hereby. Section 3.02 Incorporation Into Existing Reimbursement Agreement. This Fifth Amendment is deemed incorporated into, and made a part of, the Existing Reimbursement Agreement. To the extent that any term or provision of this Fifth Amendment is or may be deemed expressly inconsistent with any term or provision of the Existing Reimbursement Agreement, the terms and provisions hereof shall control. Section 3.03 Counterparts. This Fifth Amendment may be executed in different counterparts, each of which when executed by the Company and the Bank shall be regarded as an original, and all such counterparts shall constitute one Fifth Amendment. Section 3.04 Capitalized Terms. Except for proper nouns and as otherwise defined herein, capitalized terms used herein as defined terms shall have the same meanings herein as are ascribed to them in the Existing Reimbursement Agreement, as amended hereby. Section 3.05 Costs and Expenses. The Company will pay all costs and expenses of the Bank (including, without limitation, the reasonable fees and the disbursements of the Bank's counsel, Tucker Arensberg, P.C.) in connection with the preparation, execution and delivery of this Fifth Amendment and the other documents, instruments and certificates delivered in connection herewith. Section 3.06 GOVERNING LAW. THIS FIFTH AMENDMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF KENTUCKY WITHOUT REGARD TO THE PROVISIONS THEREOF REGARDING CONFLICTS OF LAW. Section 3.07 Headings. The headings of the sections in this Fifth Amendment are for purposes of reference only and shall not be deemed to be a part hereof. Section 3.08 Release of Claims. The Company, for itself and all of its predecessors, successors and assigns, does hereby fully, forever and completely release and discharge the Bank, and all of its employees, officers, directors, shareholders, affiliates, agents, attorneys, representatives, predecessors, successors and assigns, from any and all claims, demands, liabilities, and causes of action of any kind based on facts in existence prior to or as of the date hereof, whether known or unknown, which the Company may now have or may have had at any time heretofore or may have at any time hereafter, whether for contribution or indemnity or otherwise, and whether direct or indirect, fixed or contingent, liquidated or unliquidated, arising out of or related in any way to any of the following: (a) the Existing Reimbursement Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement or any of the other Security Documents; (b) any of the transactions contemplated by the Existing Reimbursement Agreement or this Fifth Amendment, any of the Security Documents or any of the other Transaction Documents (as defined in the Omnibus Agreement); or (c) the exercise by the Bank of any of its rights and remedies under or in respect of the Existing Reimbursement Agreement, this Fifth Amendment, any of the other Security Documents or any of the other Transaction Documents, whether such rights or remedies are provided for in the Existing Reimbursement Agreement, this Fifth Amendment any other Security Document or any other Transaction Document, or under Applicable Law or otherwise. Section 3.09 Severability. If any provision of this Fifth Amendment shall be determined to be invalid, then only such provision shall be invalid and all other provisions of this Fifth Amendment shall remain effective and binding. Section 3.10 Representations and Warranties. The Company hereby represents and warrants that (a) all of its representations and warranties in the Existing Reimbursement Agreement are true and correct; (b) no Default or Event of Default exists under the Existing Reimbursement Agreement; and (c) this Fifth Amendment has been duly authorized, executed and delivered and the Existing Reimbursement Agreement, as amended hereby, constitutes its legal, valid and binding obligation, enforceable in accordance with its terms. Section 3.11 Confirmation. Except as amended hereby, the terms and provisions of the Existing Reimbursement Agreement remain unchanged and in full force and effect. Except as expressly provided herein, this Fifth Amendment shall not constitute an amendment, waiver, consent or release with respect to any provision of the Existing Reimbursement Agreement, a waiver of any Default or Event of Default thereunder, or a waiver or release of any of the Bank's rights and remedies (all of which are hereby reserved). Section 3.12 Indemnification. (a) The Company shall and hereby agrees to indemnify, defend and hold harmless the Bank and its directors, trustees, officers, shareholders, agents, employees and counsel (each referred to herein as an "Indemnified Party") from and against any and all losses, claims, damages, liabilities, deficiencies, judgments or expenses of every kind and nature (including, without limitation, amounts paid in settlement, court costs and the fees and disbursements of counsel incurred in connection with any litigation, investigation, claim or proceeding or any advice rendered in connection therewith) (the foregoing items referred to herein as "Claims and Expenses") incurred by an Indemnified Party arising out of or by reason of any suit, cause of action, claim, arbitration, investigation or settlement, consent decree or other proceeding (the foregoing referred to herein as an "Indemnity Proceeding") which arise out of, or are in any way related directly or indirectly to: (i) the Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement or the Loan Documents or the transactions contemplated thereby; (ii) the issuance of Letter of Credit under the Agreement, (iii) any actual or proposed use by the Borrower of the proceeds of the Bonds; (iv) the Bank's entering into, or benefiting from, the Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement or the Loan Documents; (v) the fact that the Company established the credit facility evidenced by the Agreement in favor of the Company; (vi) the fact that the Bank is creditor of the Company and has or are alleged to have information regarding the financial condition, strategic plans or business operations of the Company and the Subsidiaries; (vii) the fact that the Bank is a material creditor of the Company and is alleged to influence directly or indirectly the business decisions or affairs of the Company and the Subsidiaries or their financial condition; (viii) the exercise of any right or remedy the Bank may have under the Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement or the other related documents; provided, however, that the Company shall not be obligated to indemnify any Indemnified Party for any acts or omissions of such Indemnified Party in connection with matters described in this subparagraph (viii) that constitute gross negligence or willful misconduct; (ix) any violation or non-compliance by the Company or any Subsidiary of any Applicable Law (including any Environmental Law) including, but not limited to, any Indemnity Proceeding commenced by (A) the Internal Revenue Service or state taxing authority or (B) any Governmental Authority or other Person under any Environmental Law, including any Indemnity Proceeding commenced by a Governmental Authority or other Person seeking remedial or other action to cause the Company or its Subsidiaries (or its respective properties) (or the Bank as successors to the Company) to be in compliance with such Environmental Laws. (b) This indemnification shall apply to all Indemnity Proceedings arising out of, or related to, the foregoing whether or not an Indemnified Party is a named party in such Indemnity Proceeding. In this connection, this indemnification shall cover all costs and expenses of any Indemnified Party in connection with any deposition of any Indemnified Party or compliance with any subpoena (including any subpoena requesting the production of documents). This indemnification shall, among other things, apply to any Indemnity Proceeding commenced by other creditors of the Company or any Subsidiary, any shareholder, member or other equity holder of the Company or any Subsidiary (whether such shareholder, member or other equity holder is prosecuting such Indemnity Proceeding in their individual capacity or derivatively on behalf of the Company), any account debtor of the Company or any Subsidiary or by any Governmental Authority. (c) This indemnification shall apply to any Indemnity Proceeding arising during the pendency of any bankruptcy proceeding filed by or against the Company and/or any Subsidiary. (d) An Indemnified Party may conduct its own investigation and defense of, and may formulate its own strategy with respect to, any Indemnity Proceeding covered by this Section and, as provided above, all costs and expenses incurred by the Indemnified Party shall be reimbursed by the Company if (i) such investigation and defense has been specifically authorized in writing by the Company, or (ii) the named parties to any Indemnity Proceeding (including any impleaded parties) include both the Company and such Indemnified Party and representation of both the Company and such Indemnified Party by the same counsel would be inappropriate due to actual or potential conflicts of interests. No action taken by legal counsel chosen by an Indemnified Party in investigating or defending against any such Indemnity Proceeding shall vitiate or in any way impair the obligations and duties of the Company hereunder to indemnify and hold harmless each such Indemnified Party; provided, however, that (i) if the Company is required to indemnify an Indemnified Party pursuant hereto and (ii) the Company has provided evidence reasonably satisfactory to such Indemnified Party that the Company has the financial wherewithal to reimburse such Indemnified Party for any amount paid by such Indemnified Party with respect to such Indemnity Proceeding, such Indemnified Party shall not settle or compromise any such Indemnity Proceeding without the prior written consent of the Company (which consent shall not be unreasonably withheld or delayed). (e) If and to the extent that the obligations of the Company hereunder are unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under Applicable Law. (f) The Company's obligations hereunder shall survive any termination of the Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement and the related documents and the payment in full of the Company Obligations, and are in addition to, and not in substitution of, any other of their obligations set forth in the Agreement this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement or any of the related documents to which it is a party. (g) Notwithstanding the foregoing, the Company shall have no obligation to any Indemnified Party under the provisions of this Section 3.12 with respect to Claims and Expenses incurred or arising after the date (the "Cutoff Date") five years following the indefeasible payment in full of all of the Company Obligations and termination of the Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement and the other related documents in accordance with their terms; provided, however, the foregoing limitation shall not apply to Claims and Expenses (i) in respect of which an Indemnified Party has specifically made written demand for indemnification under this Section 3.12 prior to the Cutoff Date or (ii) relating to alleged criminal acts of the Company, any Subsidiary, or any of their respective officers, directors, employees and agents or claims that the Company or any of its Subsidiaries (x) did not have the power and authority to enter into and perform their obligations under this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement and the other related documents or (y) acted wrongfully in entering into and performing their obligations under the Agreement, this Fifth Amendment, the Omnibus Agreement, the Collateral Agency Agreement and the other related documents. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto, with the intent to be legally bound hereby, have caused this Fifth Amendment to Reimbursement Agreement to be duly executed by their respective proper and duly authorized officers as a document under seal, as of the day and year first above written, but is deemed effective as of December 30, 2000, nunc pro tunc. -------------------------------------------------------------------------------- ATTEST: BIRMINGHAM STEEL CORPORATION By: /s/ Patricia B. Foshee By: /s/ J. Daniel Garrett (SEAL) ---------------------------- ------------------------ Name: Patricia B. Foshee Name: J. Daniel Garrett Title: Treasurer Title: Chief Financial Officer (Birmingham Steel Corporation Seal) PNC BANK, NATIONAL ASSOCIATION By: /s/ Martin E. Mueller (SEAL) --------------------------- Name: Martin E. Mueller Title: Vice President EXHIBIT 4.6.1 BIRMINGHAM STEEL CORPORATION ---------------------------- AMENDMENT NO. 1 TO WARRANT AGREEMENT ------------------------------------ Dated as of February 20, 2001 BIRMINGHAM STEEL CORPORATION. AMENDMENT NO. 1 TO WARRANT AGREEMENT As of February 20, 2001 To each of the Current Warrantholders Named in Annex 1 hereto: Ladies and Gentlemen: Birmingham Steel Corporation, a Delaware corporation (together with any successors and assigns, the "Company"), hereby agrees with each of you as follows: 1. PRIOR ISSUANCE OF WARRANTs, ETC. ----------------------------------- The Company issued and sold to the Warrantholders Common Stock Purchase Warrants evidencing rights to purchase from the Company 3,000,000 shares of Common Stock in the aggregate (subject to adjustment as provided therein) (the "Warrants", such term to include any such Warrants issued in substitution therefor, pursuant to Section 9.3 of the Warrants or otherwise, and any Warrants held by any transferee of any of the Warrants) pursuant to the Warrant Agreement dated as of May 15, 2000, between the Company and the Warrantholders named in Annex 1 thereto (the "Existing Warrant Agreement" and, as may be amended pursuant to this Agreement and as may be further amended, restated or otherwise modified from time to time, the "Warrant Agreement"). All of the Warrants remain outstanding and in effect. The register kept by the Company for the registration and transfer of the Warrants indicates that each of the Persons named in Annex 1 hereto (collectively, the "Current Warrantholders") is currently a holder of Warrants to purchase the aggregate number of shares of common stock of the Company indicated in such Annex. 2. REQUEST FOR CONSENT TO AMENDMENTS ------------------------------------ The Company requests that each of the Current Warrantholders agree to the amendments to the Existing Warrant Agreement provided for by this Agreement (collectively, the "Amendments"). 3.REPRESENTATIONS AND WARRANTIES OF THE COMPANY ----------------------------------------------- 3.1. Restrictions. Neither the Company nor any Subsidiary is a party to any contract or agreement that restricts its right or ability to issue Capital Stock, or Rights in respect of Capital Stock, of the Company, as the case may be, other than the agreements listed on Part 1 of Schedule I to the Existing Warrant Agreement, none of which restricts the amendments set forth herein or the execution and delivery of, or the compliance with, this Agreement by the Company. 3.2. Authorization and Enforceability of Amendments. (a) The execution and delivery by the Company of this Agreement and compliance by the Company with all of the provisions of this Agreement: (i) are within the corporate powers of the Company; and (ii) are legal and do not conflict with, result in any breach of any of the provisions of, constitute a default under, or result in the creation of any lien upon any property of the Company or any Subsidiary under the provisions of: (A) any agreement, charter instrument, bylaw or other instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is or may be bound; (B) any order, judgment, decree, or ruling of any court, arbitrator or governmental authority applicable to the Company or any of its Property; or (C) any statute or other rule or regulation of any governmental authority applicable to the Company or any of its Property. (b) The Company has duly authorized by all necessary action on its part the execution and delivery of, and the compliance with the terms of, this Agreement. This Agreement has been executed and delivered by one or more duly authorized officers of the Company, and constitutes a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except that the enforceability thereof may be limited by applicable bankruptcy, reorganization, arrangement, insolvency, moratorium, or other similar laws affecting the enforceability of creditors' rights generally and subject to the availability of equitable remedies. 3.3. Governmental Consent. (a) Neither the nature of the Company nor any of its businesses or Properties, nor any relationship between the Company and any other Person, nor any circumstance in connection with the execution and delivery of this Agreement nor the performance of the obligations of the Company hereunder is such as to require a consent, approval or authorization of, or pre-filing, registration or qualification with, any governmental authority on the part of the Company as a condition thereto. (b) Neither the execution and delivery of this Agreement nor the performance of the obligations of the Company hereunder: (i) is subject to regulations under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935, as amended, the Transportation Acts of the United States of America (49 U.S.C.), as amended, or the Federal Power Act, as amended; or (ii) violates any provision of any statute or other rule or regulation of any governmental authority applicable to the Company. 4. AMENDMENTS ------------- 4.1. Amendments to Existing Warrant Agreement and Warrants. Subject to Section 4.2, the Existing Warrant Agreement is hereby amended as follows: (a) Section 2.01 of the Existing Warrant Agreement is amended by deleting the words "price per share of three dollars ($3.00)" and substituting therefor the words "price per share of one cent ($0.01)". (b) The form of Warrant Certificate attached to the Existing Warrant Agreement as Exhibit A is hereby amended by changing the words "price per share of $3.00" in the first paragraph thereof to "price per share of $0.01". (c) Each of the Warrants issued pursuant to the Existing Warrant Agreement is hereby amended by changing the words "price per share of $3.00" in the first paragraph thereof to "price per share of $0.01". Subject to Section 4.2, the amendment of the Warrants set forth in this subsection (c) shall be effective automatically and regardless of whether any replacement Warrant is issued to reflect such amendment. However, within ten (10) days after a written request therefor from any Warrantholder at any time, the Company shall issue to such Warrantholder, with respect to each Warrant held by such Warrantholder, a replacement Warrant of like tenor and date, which reflects the amendment made herein. Upon issuance of any such replacement Warrant, the Warrant replaced by it shall be void and shall be promptly surrendered by the Warrantholder to the Company. (d) The following Section 5.07 is added immediately after Section 5.06 of the Existing Warrant Agreement: ss.5.07. Prohibited Actions. The Company will not, by amendment of its certificate of incorporation or through any consolidation, merger, reorganization, transfer of assets, dissolution, issuance or sale of securities or any other voluntary action, avoid the observance or performance of any of the terms of the Warrants or this Agreement. Without limiting the generality of the foregoing, the Company (a) will not permit the par value of any shares of Common Stock receivable upon the exercise of the Warrants to exceed the amount payable therefor upon such exercise, (b) will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock on the exercise of the Warrants from time to time outstanding, and (c) will not take any action which results in any adjustment of the Exercise Price if the total number of shares of Common Stock (or other Acquired Equity Interests) issuable after the action upon the exercise of all of the Warrants would exceed the total number of shares of Common Stock (or other Acquired Equity Interests) then authorized by the Company's certificate of incorporation and available for the purpose of issue upon such exercise. 4.2. Effectiveness of Amendments The Amendments contemplated by Section 4.1 shall, in accordance with Section 9.03 of the Existing Warrant Agreement become effective (the "Effective Date"), if at all, at such time as the Company and the Current Warrantholders shall have indicated their written consent to such Amendments by executing and delivering the applicable counterparts of this Agreement. It is understood that any Current Warrantholder may withhold its consent for any reason or for no reason. It is also understood that the granting of consent hereto by the Company is contingent upon (a) BSE and the lenders under the Loan Agreement entering into a First Amendment to the Loan Agreement contemporaneously herewith, and (b) the Company and the noteholders under each of the Note Purchase Agreements entering into a Third Amendment to each of such Note Purchase Agreements contemporaneously herewith. 4.3. No Other Amendments; Confirmation. Except as expressly provided herein, (a) no terms or provisions of any agreement are modified or changed by this Agreement, (b) the terms of this Agreement shall not operate as a waiver by any Current Warrantholder of, or otherwise prejudice any Current Warrantholder's rights, remedies or powers under, the Existing Warrant Agreement or any other agreement or under any applicable law and (c) the terms and provisions of the Existing Warrant Agreement and each other agreement between the Company and any of the Warrantholders shall continue in full force and effect. 5. DEFINED TERMS ---------------- Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Existing Warrant Agreement. 6. EXPENSES ----------- Whether or not the Amendments become effective, the Company will promptly (and in any event within thirty (30) days of receiving any statement or invoice therefor) pay all fees, expenses and costs relating to this Agreement, including, but not limited to, (a) the cost of reproducing this Agreement and the other documents delivered in connection herewith and (b) the reasonable fees and disbursements of the Current Warrantholders' respective special counsel incurred in connection with the preparation, negotiation and delivery of this Agreement. This Section 6 shall not be construed to limit the Company's obligations under any other agreement between the Company and any of the Warrantholders. 7. MISCELLANEOUS ---------------- 7.1. Part of Warrant Agreement, Future References, etc. This Agreement shall be construed in connection with and as a part of each of the Warrant Agreement and, except as expressly amended by this Agreement, all terms, conditions and covenants contained in the Warrant Agreement are hereby ratified and shall be and remain in full force and effect. Any and all notices, requests, certificates and other instruments executed and delivered after the execution and delivery of this Agreement may refer to the Warrant Agreement without making specific reference to this Agreement, but nevertheless all such references shall include this Agreement unless the context otherwise requires. 7.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE, UNITED STATES OF AMERICA, EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. 7.3. Duplicate Originals, Execution in Counterpart. Two (2) or more duplicate originals hereof may be signed by the parties, each of which shall be an original but all of which together shall constitute one and the same instrument. This Agreement may be executed in one or more counterparts and shall become effective at the time provided in Section 4.4 hereof, and each set of counterparts that, collectively, show execution by the Company and each consenting Current Warrantholder shall constitute one duplicate original. [Remainder of page intentionally left blank; next page is signature page.] If this Agreement is satisfactory to you, please so indicate by signing the applicable acceptance on a counterpart hereof and returning such counterpart to the Company, whereupon this Agreement shall become binding among the Company and you in accordance with its terms. Very truly yours, BIRMINGHAM STEEL CORPORATION By: /s/ J. Daniel Garrett ---------------------- Name: J. Daniel Garrett Title: Chief Financial Officer BANKS: BANK OF AMERICA, N.A., as Agent and as a Lender By: /s/ Jay T. Wampler ------------------- Name: Jay T. Wampler Title: Managing Director PNC BANK, NATIONAL ASSOCIATION By: /s/ Martin E. Mueller ---------------------- Name: Martin E. Mueller Title: Vice President The Bank of Nova Scotia's undersigned approval of this First Amendment to Warrant Agreement is expressly limited to only those provisions which require the written consent of all of the Lenders. THE BANK OF NOVA SCOTIA By: /s/ Daniel A. Costigan ----------------------- Name: Daniel A. Costigan Title: Director THE BANK OF TOKYO - MITSUBISHI, LTD By: /s/ Eugene Nostrame -------------------- Name: Eugene Nostrame Title: Attorney-in-fact CIBC INC. By: /s/ Ronald E. Spitzer ---------------------- Name: Ronald E. Spitzer Title: Executive Director CIBC, Inc. as Agent AMSOUTH BANK By: /s/ Rex Hamilton ----------------- Name: Rex Hamilton Title: Commercial Banking Officer DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, CAYMAN ISLAND BRANCH By: /s/ Gary P. Franke ------------------- Name: Gary P. Franke Title: Vice President By: /s/ Kurt A. Morris ------------------- Name: Kurt A. Morris Title: Vice President BANK ONE, NA By: /s/ Richard Babcock -------------------- Name: Richard Babcock Title: Vice President The Sanwa Bank, Limited By: /s/ John T. Feeney ------------------ Name: John T. Feeney Vice President UBS AG, STAMFORD BRANCH By: /s/ Carlos Junquera -------------------- Name: Carlos Junquera Title: Associate Director Recovery Management By: /s/ Thomas R. Salzano ---------------------- Name: Thomas R. Salzano Title: Director Banking Products Services, US CFE, INC By: /s/ Clifford M. Warren ----------------------- Name: Clifford M. Warren Title: VP PRINCIPAL LIFE INSURANCE COMPANY By: Principal Capital Management, LLC, (f/k/a) Principal Mutual Life Insurance Company a Delaware limited liability company, its authorized signatory By: /s/ Debra Svoboda Epp ---------------------- Name: Debra Svoboda Epp Title: Counsel By: /s/ Clint Woods ---------------- Name: Clint Woods Title: Counsel PRINCIPAL LIFE INSURANCE COMPANY, ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS By: Principal Capital Management, LLC, a Delaware limited liability company, its authorized signatory By: /s/ Debra Svoboda Epp ---------------------- Name: Debra Svoboda Epp Title: Counsel By: /s/ Clint Woods ---------------- Name: Clint Woods Title: Counsel The Canada Life Assurance Company (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner Canada Life Insurance Company of America (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner Canada Life Insurance Company of New York (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY (formerly known as Great Northern Insured Annuity Corporation) By: /s/ Morian C. Mooers --------------------- Name: Morian C. Mooers Title: Investment Officer COLUMBIAN MUTUAL LIFE INSURANCE COMPANY By: /s/ Lance A. Bowe ------------------ Name: Lance A. Bowe Title: Chief Investment Officer JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, Successor in interest to Alexander Hamilton Life Insurance Company of America By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whaley, II Title: Vice President JEFFERSON PILOT LIFEAMERICA INSURANCE COMPANY By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whalen, II Title: Vice President JEFFERSON-PILOT LIFE INSURANCE COMPANY By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whalen, II Title: Vice President THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/ Robert Bayer ----------------- Name: Robert Bayer Title: Investment Officer SUN LIFE ASSURANCE COMPANY OF CANADA By: /s/ John N. Whelihan --------------------- Name: John N. Whelihan Title: Vice President, U.S. Private Placements - for President By: /s/ Richard Gordon ------------------- Name: Richard Gordon Title: Vice President-U.S.Public Bonds- for Secretary SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) By: /s/ John N. Whelihan --------------------- Name: John N. Whelihan Title: Vice President, U.S.Private Placements - for President By: /s/ Richard Gordon ------------------- Name: Richard Gordon Title: Vice President - U.S. Public Bonds - for Secretary SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK By: /s/ John N. Whelihan --------------------- Name: John N. Whelihan Title: Vice President, U.S. Private Placements - for President By: /s/ Richard Gordon ------------------- Name: Richard Gordon Title: Vice President - U.S. Public Bonds -for Secretary CENTURY IDEMNITY COMPANY By CIGNA Investments, Inc.,its authorized agent By: /s/ Stephen H. Wilson ---------------------- Name: Stephen H. Wilson Title: Managing Director ACE PROPERTY AND CASUALTY INSURANCE COMPANY By CIGNA Investment, Inc., its authorized agent By: /s/ Stephen H. Wilson ---------------------- Name: Stephen H. Wilson Title: Managing Director LIFE INSURANCE COMPANY OF NORTH AMERICA By CIGNA Investments, Inc., its authorized agent By: /s/ Stephen H. Wilson ---------------------- Name: Stephen H. Wilson Title: Managing Director CONNECTICUT GENERAL LIFE INSURANCE COMPANY By: CIGNA Investments, Inc., its authorized agent By: /s/ Stephen H. Wilson ----------------------- Name: Stephen H. Wilson Title: Managing Director PROVIDENT MUTUAL LIFE INSURANCE COMPANY By: /s/ James D. Kestner --------------------- Name: James D. Kestner Title: Vice President THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By: /s/ David A. Barras -------------------- Name: David A. Barras Title: Its Authorized Representative GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By: /s/ Wayne T. Hoffman --------------------- Name: Wayne T. Hoffman Title: Senior Vice President-Investments By: /s/ James G. Lowery -------------------- Name: James G. Lowery Title: Assistant Vice President - Investments PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY By: /s/ Christopher Wilkos ----------------------- Name: Christopher Wilkos Title: Vice President, Corporate Portfolio Management AMERICAN UNITED LIFE INSURANCE COMPANY By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President THE STATE LIFE INSURANCE COMPANY By American United Life Insurance Company, Its Agent By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President PIONEER MUTUAL LIFE INSURANCE COMPANY By: American United Life Insurance Company, Its Agent By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President AMERITAS LIFE INSURANCE CORP. By: Ameritas Investment Advisors Inc., as Agent By: /s/ Patrick J. Henry --------------------- Name: Patrick J. Henry Title: Vice President - Fixed Income Securities ACACIA LIFE INSURANCE COMPANY By Ameritas Investment Advisors, Inc., as Agent By: /s/ Patrick J. Henry --------------------- Name: Patrick J. Henry Title: Vice President - Fixed Income Securities THE GREAT-WEST LIFE ASSURANCE COMPANY By: /s/ W. J. Sharman ------------------ Name: W. J. Sharman Title: Vice-President, Bond Investments By: /s/ P. G. Munro ---------------- Name: P. G. Munro Title: Executive Vice-President & Chief Investment Officer NATIONWIDE LIFE INSURANCE COMPANY By: /s/ Mark W. Poeppelman ----------------------- Name: Mark W. Poeppelman Title: Associate Vice President MINNESOTA LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Joseph Gogola ------------------ Name: Joseph Gogola Title: Vice President FEDERATED MUTUAL INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Joseph Gogola ------------------ Name: Joseph Gogola Title: Vice President FEDERATED LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: THE RELIABLE LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: NATIONAL TRAVELERS LIFE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: GUARANTEE RESERVE LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: MTL INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: PROTECTED HOME MUTUAL LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: COLORADO BANKERS LIFE INSURANCE COMPANY By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: THE CATHOLIC AID ASSOCIATION By: Advantus Capital Management, Inc. By: /s/ Loren Haugland ------------------- Name: Loren Haugland, Vice President Title: FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN By: Advantus Capital Management, Inc. By: /s/ Joseph Gogola ------------------ Name: Joseph Gogola Title: Vice President BERKSHIRE LIFE INSURANCE COMPANY By: /s/ Ellen I. Whittaker ----------------------- Name: Ellen I. Whittaker Title: Senior Investment Officer THE LINCOLN NATIONAL LIFE INSURANCE COMPANY By: Delaware Lincoln Investment Advisors, a series of Delaware Management Business Trust, Attorney-in-Fact By: /s/ Annette M. Teders ---------------------- Name: Annette M. Teders Title: Vice President TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA By: /s/ Roi G. Chandy ------------------ Name: Roi G. Chandy Title: Director, Special Situations J. ROMEO & CO. as nominee for MONY LIFE INSURANCE COMPANY By: /s/ Peter Coccia ----------------- Name: Peter Coccia Title: Partner EXHIBIT 10.23.7 Execution Copy EIGHTH AMENDMENT TO CREDIT AGREEMENT THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT dated as of February 20, 2001 (this "Amendment"), 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, the Swingline Lender 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, as of July 27, 1999, as of September 28, 1999, as of October 12, 1999, as of November 12, 1999, and as of May 15, 2000 (as so amended, the "Credit Agreement"); and WHEREAS, the Borrower, the Agent, the Lenders and the Swingline Lender desire to amend the Credit Agreement upon the terms and conditions set forth herein; 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. Amendments to Credit Agreement. Subject to the terms and conditions hereof, including without limitation, satisfaction of the conditions contained in Section 2, 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 definition of the term "Termination Date" in its entirety and substituting in its place the following: "Termination Date" means April 1, 2002. (b) The Credit Agreement is hereby amended by adding to Section 1.1. the definition of the following term in the appropriate alphabetical order: "Eighth Amendment Date" means the date on which all of the conditions precedent set forth in Section 3 of the Eighth Amendment to Credit Agreement dated as of February 20, 2001 by and among the parties hereto, have been satisfied or waived in writing by the Requisite Lenders. (c) The Credit Agreement is hereby amended by adding the following to the end of Section 2.5(b): Notwithstanding the foregoing, (x) until the Agent has received evidence reasonably satisfactory to it that the sale of all of the SBQ Division (Memphis/Cleveland) shall have been consummated, any additional interest which accrues as a result of application of the second sentence of the definition of the term "Applicable Margin" shall only be due and payable upon the consummation of such sale or the date on which all Loans are due and payable in full, whichever shall occur first, and (y) once the Agent has received evidence reasonably satisfactory to it that such sale has been consummated, then interest which accrues as a result of application of the second sentence of the definition of the term "Applicable Margin" shall be payable as otherwise provided in this subsection. (d) The Credit Agreement is amended by deleting clause (ii) of Section 2.8.(b) in its entirety and substituting in its place the following: (ii) Outstandings in Excess of Amount Limitations. Notwithstanding the first sentence of Section 2.1.(a) or Section 2.14., the Borrower agrees that at no time shall it permit the aggregate Outstanding Credit to exceed $290,000,000 (the "Amount Limitation"). If at any time the Outstanding Credit shall exceed the Amount Limitation, 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. (e) The Credit Agreement is hereby amended by deleting Section 2.12(c) and substituting in its place the following: (c) Effect of Reductions of Commitments on Amount Limitation; Reductions From BSE Borrowings. Any reduction in the aggregate amount of Commitments shall result in a simultaneous and equal reduction in the Amount Limitation. In addition, unless all of the Lenders shall consent otherwise in writing, the Amount Limitation shall be reduced by the amount of any Loans (as defined in the BSE Credit Agreement) made after the Eighth Amendment Date. (f) The Credit Agreement is amended by deleting Section 3.6.(a) in its entirety and substituting in its place the following: (a) Facility Fees. The Borrower agrees to pay to the Agent for the account of the Lenders a facility fee on the average daily aggregate available amount of the Commitments (whether or not utilized but excluding any portion of the Commitments not available pursuant to Section 2.8.(b)(ii)) at a per annum rate equal to the Applicable Facility Fee for the period from and including the Agreement Date to but excluding the date the Commitments are terminated or reduced to zero or the Termination Date. Such facility fee shall be payable in arrears on (i) each Quarterly Date, (ii) on the Termination Date, (iii) on the date the Commitments are otherwise terminated or reduced to zero and (iv) thereafter from time to time on demand of the Agent. (g) The Credit Agreement is amended by deleting subsections (a), (b), (c) and (f) of Section 9.1. in their entirety and substituting in their respective places the following: (a) Fixed Charge Coverage Ratio. [Intentionally Omitted] (b) Minimum Consolidated EBITDA. Permit the aggregate amount of Consolidated EBITDA for any Applicable EBITDA Period specified in the following table to be less than the amount corresponding to such period in such table: Applicable EBITDA Period Ending Minimum EBITDA ------------------------------------------ ----------------------- March 31, 2001 $40,177,000 June 30, 2001 $26,385,000 September 30, 2001 $28,237,000 December 31, 2001 $35,655,000 For the purposes of this subsection (b), the term "Applicable EBITDA Period" means with respect to the calculation of Consolidated EBITDA for any fiscal quarter of the Borrower, the Four Quarter Period then ended. (c) Minimum Tangible Net Worth. Permit Consolidated Tangible Net Worth at any time to be less than (i) $(50,000,000), plus (ii) 50% of Adjusted Net Income (only if greater than $0) of the Borrower and its Subsidiaries on a consolidated basis for each fiscal quarter of the Borrower ending after December 31, 2000, minus (iii) the sum of the amounts by which Consolidated Tangible Net Worth was reduced (i.e., the amount by which stockholders' equity was reduced) after December 31, 2000 by any TNW Adjustment, plus (iv) all Net Proceeds from any Equity Issuance after December 31, 2000. (f) SBQ Minimum EBITDA. If the Cleveland Cessation Condition shall not have been satisfied on or prior to June 30, 2001, the Borrower will not permit the aggregate amount of SBQ Division EBITDA for any fiscal quarter ending on or after June 30, 2001 to be less than $1.00. Section 2. Conditions Precedent. The effectiveness of Section 1 of this Amendment is subject to receipt by the Agent (unless receipt thereof is waived in writing by the Requisite Lenders) of each of the following, each in form and substance satisfactory to the Agent: (a) Counterparts of this Amendment executed by each of the parties hereto; (b) Copies of fully-executed amendments to each of the following agreements evidencing such agreements have been amended in a manner comparable to the amendments to the Credit Agreement provided for in Section 1 above or otherwise in a manner satisfactory to the Requisite Lenders, together with evidence that all conditions precedent to the effectiveness thereof have been satisfied (or waived as permitted under the terms thereof): (i) the Existing Note Purchase Agreements; (ii) the Existing Reimbursement Agreement still in effect; (iii) the applicable Lease Documents (as defined in the Collateral Agency Agreement); and (iv) the BSE Credit Agreement; (c) A fully-executed amendment to the Warrant Agreement and each of the Warrants held by the Lenders amending the exercise price of the Warrants to $0.01; (d) Fully-executed copies of all corporate or other necessary action taken by the Borrower to authorize the execution, delivery and performance of this Amendment and the other Loan Documents being delivered in connection herewith, certified by the Secretary or Assistant Secretary of the Borrower. (e) All fees and expenses payable by the Borrower to the Agent and the Lenders on or prior to the effectiveness of this Amendment, including without limitation, all fees and expenses of the Agent's counsel and each Lender's counsel as provided in Section 7 hereof; (f) An opinion or opinions of counsel to the Borrower and the Restricted Subsidiaries, in form reasonably satisfactory to the Agent, regarding (i) the formation of the Borrower and each Guarantor, (ii) the authority of the Borrower and each Guarantor to execute, deliver and perform this Amendment, the Credit Agreement as amended by this Amendment, the other Loan Documents and Amendment Documents being executed and delivered in connection herewith (to the extent a party thereto), (iii) the enforceability of such Loan Documents and Amendment Documents under the laws of the State of Georgia or Alabama, as the case may be, (iv) whether the execution, delivery and performance by the Borrower and such Guarantor of such Loan Document and Amendment Documents violate certain specified agreements to which the Borrower or any Guarantor is a party and (v) such other matters as the Agent may reasonably request; and (g) Such other documents, agreements and instruments as the Agent may reasonably request. Section 3. Representations and Warranties of the Borrower. To induce the Agent, the Lenders and the Swingline Lender to enter into this Amendment, the Borrower represents and warrants to each of them as follows as of the date hereof (and assuming the effectiveness of this Amendment): (a) No Default or Event of Default has occurred and is continuing; (b) The representations and warranties made or deemed made by the Borrower and each Restricted Subsidiary 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; (c) The Borrower and the Restricted Subsidiaries have the right and power, and each has taken all necessary action to authorize it, to execute, deliver and perform this Amendment, and all of the other documents, instruments and agreements being executed by the Borrower or any Restricted Subsidiary in connection with any of the foregoing (collectively, the "Amendment Documents") to the extent such Person is a party thereto, and, with respect to the Borrower, to perform the Credit Agreement as amended by this Amendment, in each case in accordance with their respective terms. This Amendment and the other Amendment Documents to which the Borrower or any Restricted Subsidiary is a party have been duly executed and delivered by the duly authorized officers of the Borrower and its Restricted Subsidiaries, as the case may be, and each of this Amendment, such other Amendment Documents and the Credit Agreement as amended by this Amendment is a legal, valid and binding obligation of the Borrower and each Restricted Subsidiary a party thereto enforceable against such Person 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 Amendment, such other Amendment Documents, and the performance of each of this Amendment, such other Amendment Documents and the Credit Agreement as amended by this Amendment, in accordance with their 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 Restricted Subsidiary, 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 except for Liens granted pursuant to, or contemplated by, the Collateral Agency Agreement. Section 4. 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 Amendment and no other Person shall be authorized to rely upon the contents of this Amendment. Section 5. Effect. Once effective as provided in Section 2, the amendments contained in Section 1 shall be deemed to be effective as of December 31, 2000 and shall have prospective application only from and after such date. Section 6. Release of Claims. The Borrower, for itself and all of its predecessors, successors and assigns, acknowledges, affirms and represents that immediately prior to giving effect to this Amendment, it is legally, validly and enforceably obligated to each of the Agent, the Lenders and the Swingline Lender under and pursuant to the Credit Agreement and each of the other Loan Documents to which the Borrower is a party (the Credit Agreement, together with such other Loan Document, the "Existing Loan Documents") and that the Borrower has no defense, offset, counterclaim or right of recoupment with regard to such obligations, hereby fully, forever and completely releases and discharges each of the Agent, the Lenders and the Swingline Lender and all of their respective employees, officers, directors, trustees, shareholders, affiliates, agents (including, without limitation, Banc of America Securities LLC), attorneys, representatives, predecessors, successors and assigns (collectively, the "Released Parties"), from any and all claims, demands, liabilities, damages and causes of action of any kind whatsoever, whether based on facts in existence prior to or as of the date of the effectiveness of this Amendment, whether known or unknown, which the Borrower may now have or may have had at any time heretofore or may have at anytime hereafter, whether for contribution or indemnity or otherwise, and whether direct or indirect, fixed or contingent, liquidated or unliquidated, arising out of or related in any way to any of the following: (a) any of the Existing Loan Documents; and (b) any action, inaction or omission by any of the Released Parties in connection with any of the Existing Loan Documents or the administration thereof. Section 7. Expenses. The Borrower agrees to pay or reimburse the Agent and each Lender for all of their reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of this Amendment, any of the other Amendment Documents (including due diligence expenses and travel expenses relating to closing), and the consummation of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to the Agent and counsel to each Lender. 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. Counterparts. This Amendment 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 10. Severability. If any provision of this Amendment shall be determined to be invalid, then only such provision shall be invalid and all other provisions of this Amendment shall remain effective and binding. Section 11. Defined Terms. Terms not otherwise defined in this Amendment which are defined in the Credit Agreement are used herein with the respective meanings given them in the Credit Agreement. Section 12. References to Credit Agreement. 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 13. Transaction Documents. The Lenders direct and authorize the Agent to enter into each Amendment Document to which the Agent (in such capacity) is or is to become a party. [Signatures on Following Page] IN WITNESS WHEREOF, the parties hereto have caused this Eighth Amendment to Credit Agreement to be executed as of the date first above written. THE BORROWER: Birmingham Steel Corporation By: /s/ J. Daniel Garrett ---------------------- Name: J. Daniel Garrett Title: Chief Financial Officer 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: /s/ Jay T. Wampler ------------------- Name: Jay T. Wampler Title: Managing Director PNC BANK, NATIONAL ASSOCIATION, as Co-Agent and as a Lender By: /s/ Martin E. Mueller ---------------------- Name: Martin E. Mueller Title: Vice President The Bank of Nova Scotia's undersigned approval of this Eighth Amendment to Credit Agreement is expressly limited to only those provisions which require the written consent of all of the Lenders. THE BANK OF NOVA SCOTIA, as Co-Agent and as a lender By: /s/ Daniel A. Costigan ----------------------- Name: Daniel A. Costigan Title: Director [Signatures Continued on Following Page] [Signature Page to Eighth Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Steel Corporation] THE BANK OF TOKYO - MITSUBISHI, LTD By: /s/ Eugene Nostrame -------------------- Name: Eugene Nostrame Title: Attorney-in-fact CIBC INC. By: /s/ Ronald E. Spitzer ---------------------- Name: Ronald E. Spitzer Title: Executive Director CIBC, Inc. as Agent GOLDMAN SACHS CREDIT PARTNERS L.P. By: /s/ David Sabath ----------------- Name: David Sabath Title: Authorized Signatory DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, CAYMAN ISLAND BRANCH By: /s/ Gary P. Franke ------------------- Name: Gary P. Franke Title: Vice President By: /s/ Kurt A. Morris ------------------- Name: Kurt A. Morris Title: Vice President [Signatures Continued on Following Page] [Signature Page to Eighth Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Steel Corporation] GENERAL ELECTRIC CAPITAL CORPORATION By: /s/ Gregory Hong ----------------- Name: Gregory Hong Title: Duly Authorized Signatory BANK ONE, NA By: /s/ Richard Babcock -------------------- Name: Richard Babcock Title: Vice President THE SANWA BANK, LIMITED By: /s/ John T. Feeney ------------------- Name: John T. Feeney Title: Vice President UBS AG, STAMFORD BRANCH, successor to Union Bank of Switzerland, New York Branch By: /s/ Carlos Junquera -------------------- Name: Carlos Junquera Title: Associate Director Recovery Management By: /s/ Thomas R. Salzano ---------------------- Name: Thomas R. Salzano Title: Director Banking Products Services, US EXHIBIT 10.25.1 Execution Copy FIRST AMENDMENT TO CREDIT AGREEMENT THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of February 20, 2001 (this "Amendment"), by and among Birmingham SOUTHEAST, LLC (the "Borrower"), each of the financial institutions party hereto, and BANK OF AMERICA, N.A., as Agent (the "Agent"). WHEREAS, the Borrower, the Lenders, and the Agent have entered into that certain Credit Agreement dated as of May 15, 2000 (the "Credit Agreement"); and WHEREAS, the Borrower, the Agent, and the Lenders desire to amend the Credit Agreement upon the terms and conditions set forth herein; 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. Amendments to Credit Agreement. Subject to the terms and conditions hereof, including without limitation, satisfaction of the conditions contained in Section 3, the parties hereto agree that the Credit Agreement is amended by deleting from Section 1.1 the definition of the term "Termination Date" in its entirety and substituting in its place the following: "Termination Date" means January 31, 2002; provided, however, if the Lenders shall have received satisfactory evidence that either (a) Chase Manhattan Trust Company, National Association, as Owner Trustee, and First Union National Bank, as Indenture Trustee, have determined that as of January 31, 2002 (i) BSC has placed its Memphis facility (including the "Equipment" under and as defined in Memphis Melt Shop Lease) back into normal and continuous operation and (ii) BSC is otherwise in full compliance with Section 8 of the Memphis Melt Shop Lease, or (b) the parties to the First Amendment to Memphis Melt Shop Lease shall have extended the termination date of the waiver provided for in Section 1 of the First Amendment to Memphis Melt Shop Lease from January 31, 2002 to a later date, then the Termination Date shall be extended to the earlier of (x) April 1, 2002 or (y) the later date referred to in the immediately preceding clause (b). Section 2. No Additional Borrowings. Notwithstanding the terms of Section 2.1(a) of the Credit Agreement or any other provision thereof, the parties hereto agree that the Lenders shall not be obligated to make, and the Borrower shall not have the right to borrow, any additional Revolving Loans under the Credit Agreement at any time on or after February 20, 2001 without the prior written consent of all of the Lenders. Section 3. Conditions Precedent. The effectiveness of Section 1 of this Amendment is subject to receipt by the Agent (unless receipt thereof is waived in writing by the Requisite Lenders) of each of the following, each in form and substance satisfactory to the Agent: (a) Counterparts of this Amendment executed by each of the parties hereto; (b) Copies of fully-executed amendments to each of the following agreements evidencing such agreements have been amended in a manner satisfactory to the Requisite Lenders, together with evidence that all conditions precedent to the effectiveness thereof have been satisfied (or waived as permitted under the terms thereof): (i) the BSC Credit Agreement; (i) the Note Purchase Agreements; (ii) the Existing Reimbursement Agreement (as defined in the BSC Credit Agreement) still in effect; (iii) the applicable Lease Documents (as defined in the Collateral Agency Agreement); and (c) A fully-executed amendment to the Warrant Agreement and each of the Warrants held by the Lenders amending the exercise price of the Warrants to $0.01; (d) Fully-executed copies of all corporate or other necessary action taken by the Borrower to authorize the execution, delivery and performance of the this Amendment and the other Loan Documents being delivered in connection herewith, certified by the Secretary or Assistant Secretary of the Borrower; (d) All fees and expenses payable by the Borrower to the Agent and the Lenders on or prior to the effectiveness of this Amendment, including without limitation, all fees and expenses of the Agent's counsel and each Lender's counsel as provided in Section 8 hereof; (e) An opinion of counsel to the Borrower, in form reasonably satisfactory to the Agent, regarding (i) the formation of the Borrower, (ii) the authority of the Borrower to execute, deliver and perform this Amendment, the Credit Agreement as amended by this Amendment, the other Loan Documents and Amendment Documents being executed and delivered in connection herewith (to the extent a party thereto), (iii) the enforceability of such Loan Documents and Amendment Documents under the laws of the State of Georgia or Alabama, as the case may be, (iv) whether the execution, delivery and performance by the Borrower of such Loan Document and Amendment Documents violate certain specified agreements to which the Borrower is a party and (v) such other matters as the Agent may reasonably request; and (f) Such other documents, agreements and instruments as the Agent may reasonably request. Section 4. Representations and Warranties of the Borrower. To induce the Agent and the Lenders to enter into this Amendment, the Borrower represents and warrants to each of them as follows as of the date hereof (and assuming the effectiveness of this Amendment): (a) 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 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; (c) The Borrower has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform this Amendment, and all of the other documents, instruments and agreements being executed by the Borrower in connection with the foregoing (collectively, the "Amendment Documents") and to perform the Credit Agreement as amended by this Amendment, in each case in accordance with their respective terms. This Amendment and the other Amendment Documents to which the Borrower is a party have been duly executed and delivered by the duly authorized officers of the Borrower, and each of this Amendment, such other Amendment Documents 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; and (d) The execution and delivery of this Amendment, such other Amendment Documents, and the performance of each of this Amendment, such other Amendment Documents and the Credit Agreement as amended by this Amendment, in accordance with their 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 except for Liens granted pursuant to, or contemplated by, the Collateral Agency Agreement. Section 5. No Third Party Beneficiaries. Except for the Borrower, the Lenders, and the Agent, no Person is intended to be a beneficiary of this Amendment and no other Person shall be authorized to rely upon the contents of this Amendment. Section 6. Effect. Once effective as provided in Section 3, the amendments contained in Section 1 shall be deemed to be effective as of December 31, 2000 and shall have prospective application only from and after such date. Section 7. Release of Claims. The Borrower, for itself and all of its predecessors, successors and assigns, acknowledges, affirms and represents that immediately prior to giving effect to this Amendment, it is legally, validly and enforceably obligated to each of the Agent and the Lenders under and pursuant to the Credit Agreement and each of the other Loan Documents (the Credit Agreement, together with such other Loan Document, the "Existing Loan Documents") and that the Borrower has no defense, offset, counterclaim or right of recoupment with regard to such obligations, hereby fully, forever and completely releases and discharges each of the Agent, and the Lenders and all of their respective employees, officers, directors, trustees, shareholders, affiliates, agents, attorneys, representatives, predecessors, successors and assigns (collectively, the "Released Parties"), from any and all claims, demands, liabilities, damages and causes of action of any kind whatsoever, whether based on facts in existence prior to or as of the date of the effectiveness of this Amendment, whether known or unknown, which the Borrower may now have or may have had at any time heretofore or may have at anytime hereafter, whether for contribution or indemnity or otherwise, and whether direct or indirect, fixed or contingent, liquidated or unliquidated, arising out of or related in any way to any of the following: (a) any of the Existing Loan Documents; and (b) any action, inaction or omission by any of the Released Parties in connection with any of the Existing Loan Documents or the administration thereof. Section 8. Expenses. The Borrower agrees to pay or reimburse the Agent and each Lender for all of their reasonable out-of-pocket costs and expenses incurred in connection with the preparation, negotiation and execution of this Amendment, any of the other Amendment Documents (including due diligence expenses and travel expenses relating to closing), and the consummation of the transactions contemplated hereby and thereby, including the reasonable fees and disbursements of counsel to the Agent and counsel to each Lender. Section 9. 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 10. Counterparts. This Amendment 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. Severability. If any provision of this Amendment shall be determined to be invalid, then only such provision shall be invalid and all other provisions of this Amendment shall remain effective and binding. Section 12. Defined Terms. Terms not otherwise defined in this Amendment which are defined in the Credit Agreement are used herein with the respective meanings given them in the Credit Agreement. Section 13. References to Credit Agreement. 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 14. Transaction Documents. The Lenders direct and authorize the Agent to enter into each Amendment Document to which the Agent (in such capacity) is or is to become a party. [Signatures on Following Page] 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 SOUTHEAST, LLC By: /s/ J. Daniel Garrett ---------------------- Name: J. Daniel Garrett Title: Chief Financial Officer THE AGENT AND THE LENDERS: BANK OF AMERICA, N.A., as Agent and as a Lender By: /s/ Jay T. Wampler ------------------- Name: Jay T. Wampler Title: Managing Director PNC BANK, NATIONAL ASSOCIATION By: /s/ Martin E. Mueller ---------------------- Name: Martin E. Mueller Title: Vice President The Bank of Nova Scotia's undersigned approval of this First Amendment to Credit Agreement is expressly limited to only those provisions which require the written consent of all of the Lenders. THE BANK OF NOVA SCOTIA By: /s/ Daniel A. Costigan ----------------------- Name: Daniel A. Costigan Title: Director [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] THE BANK OF TOKYO - MITSUBISHI, LTD By: /s/ Eugene Nostrame --------------------- Name: Eugene Nostrame Title: Attorney-in-fact CIBC INC. By: /s/ Ronald E. Spitzer ---------------------- Name: Ronald E. Spitzer Title: Executive Director CIBC, Inc. as Agent GOLDMAN SACHS CREDIT PARTNERS L.P. By: /s/ David Sabath ----------------- Name: David Sabath Title: Authorized Signatory DG BANK DEUTSCHE GENOSSENSCHAFTSBANK, CAYMAN ISLAND BRANCH By: /s/ Gary P. Franke ------------------- Name: Gary P. Franke Title: Vice President By: /s/ Kurt A. Morris ------------------- Name: Kurt A. Morris Title: Vice President [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] GENERAL ELECTRIC CAPITAL CORPORATION By: /s/ Gregory Hong ----------------- Name: Gregory Hong Title: Duly Authorized Signatory BANK ONE, NA By: /s/ Richard Babcock -------------------- Name: Richard Babcock Title: Vice President THE SANWA BANK, LIMITED By: /s/ John T. Feeney ------------------- Name: John T. Feeney Title: Vice President UBS AG, STAMFORD BRANCH By: /s/ Carlos Junquera -------------------- Name: Carlos Junquera Title: Associate Director Recovery Management By: /s/ Thomas R. Salzano ---------------------- Name: Thomas R. Salzano Title: Director Banking Products Services, US [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] PRINCIPAL LIFE INSURANCE COMPANY By: Principal Capital Management, LLC, a Delaware limited liability company, its authorized signatory By: /s/ Debra Svoboda Epp ---------------------- Name: Debra Svoboda Epp Title: Counsel By: /s/ Clint Woods ---------------- Name: Clint Woods Title: Counsel PRINCIPAL LIFE INSURANCE COMPANY, ON BEHALF OF ONE OR MORE SEPARATE ACCOUNTS By: Principal Capital Management, LLC, a Delaware limited liability company, its authorized signatory By: /s/ Debra Svoboda Epp ------------------------------ Name: Debra Svoboda Epp Title: Counsel By: /s/ Clint Woods ---------------- Name: Clint Woods Title: Counsel The Canada Life Assurance Company (J. Romeo & Co. as nominee) By: /s/ Barbara J. Walsh --------------------- Name: Barbara J. Walsh Title: Partner [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, Successor in interest to Alexander Hamilton Life Insurance Company of America By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whaley, II Title: Vice President JEFFERSON PILOT LIFEAMERICA INSURANCE COMPANY By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whalen, II Title: Vice President JEFFERSON-PILOT LIFE INSURANCE COMPANY By: /s/ Robert E. Whalen, II ------------------------- Name: Robert E. Whalen, II Title: Vice President PIONEER MUTUAL LIFE INSURANCE COMPANY By: American United Life Insurance Company Its Authorized Agent By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES By: /s/ Robert Bayer --------------------- Name: Robert Bayer Title: Investment Officer SUN LIFE ASSURANCE COMPANY OF CANADA By: /s/ James M.A. Anderson ------------------------ Name: James M. A. Anderson Title: Vice President, Investments- for President By: /s/ Richard Gordon ------------------- Name: Richard Gordon Title: Vice President, U.S. Public Bonds - for Secretary [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) By: /s/ James M.A. Anderson ------------------------ Name: James M. A. Anderson Title: Vice President, Investments- for President By: /s/ Richard Gordon ------------------- Name: Richard Gordon Title: Vice President, U.S. Public Bonds - for Secretary SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK By: /s/ James M.A. Anderson ------------------------ Name: James M. A. Anderson Title: Vice President, Investments- for President By: /s/ Richard Gordon ------------------- Name: Richard Gordon Title: Vice President,U.S.Public Bonds- for Secretary ACE PROPERTY AND CASUALTY INSURANCE COMPANY By:CIGNA Investments, Inc., its authorized agent By: /s/ Stephen H. Wilson ---------------------- Name: Stephen H. Wilson Title: Managing Director [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] LIFE INSURANCE COMPANY OF NORTH AMERICA By:CIGNA Investments, Inc.,its authorized agent By: /s/ Stephen H. Wilson ---------------------- Name: Stephen H. Wilson Title: Managing Director CONNECTICUT GENERAL LIFE INSURANCE COMPANY By:CIGNA Investments, Inc.,its authorized agent By: /s/ Stephen H. Wilson ---------------------- Name: Stephen H. Wilson Title: Managing Director THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY By: /s/ David A. Barras -------------------- Name: David A. Barras Title: Its Authorized Representative [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY By: /s/ Wayne T. Hoffman --------------------- Name: Wayne T. Hoffman Title: Senior Vice President Investments By: /s/ Mark Corbett ------------ Name: Mark Corbett Title: Senior Vice President Investments THE STATE LIFE INSURANCE COMPANY By: American United Life Insurance Company, its authorized agent By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President AMERICAN UNITED LIFE INSURANCE COMPANY By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] AMERITAS LIFE INSURANCE CORP By: Ameritas Investment Advisors Inc., its authorized agent By: /s/ Patrick J. Henry --------------------- Name: Patrick J. Henry Title: Vice President - Fixed Income Securities ACACIA LIFE INSURANCE COMPANY By: Ameritas Investment Advisors, Inc., its authorized agent By: /s/ Patrick J. Henry --------------------- Name: Patrick J. Henry Title: Vice President - Fixed Income Securities THE GREAT-WEST LIFE ASSURANCE COMPANY By: /s/ W. J. Sharman ------------------ Name: W. J. Sharman Title: Vice-President, Bond Investments By: /s/ P. G. Munro ---------------- Name: P.G. Munro Title: Executive Vice-President & CIO [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] NATIONWIDE LIFE INSURANCE COMPANY By: /s/ Mark W. Poeppelman ------------------ Name: Mark W. Poeppelman Title: Associate Vice President BERKSHIRE LIFE INSURANCE COMPANY By: /s/ Ellen I. Whittaker ------------------ Name: Ellen I. Whittaker Title: Senior Investment Officer [Signatures Continued on Following Page] [Signature Page to First Amendment to Credit Agreement dated as of February 20, 2001 with Birmingham Southeast, LLC] TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA By: /s/ Roi G. Chandy ------------------ Name: Roi G. Chandy Title: Director, Special Situations EXHIBIT 10.32 February 20, 2001 Birmingham Steel Corporation 1000 Urban Center Drive Birmingham, Alabama Ladies and Gentlemen: The undersigned, (i) Chase Manhattan Trust Company, National Association, as Owner Trustee under the Equipment Lease Agreement, dated as of September 30, 1997, as amended (the "Lease"), between the Owner Trustee and Birmingham Steel Corporation ("BSC"), (ii) First Union National Bank, as Indenture Trustee under the Trust Indenture and Security Agreement, dated as of September 30, 1997, as amended (the "Indenture"), (iii) Bank of America, National Association and Amsouth Leasing Ltd. (collectively, the "Owner Participants") and (iv) the holders of the Equipment Notes issued under the Indenture and identified on the signature pages below are parties (the "Parties") to the leveraged lease financing of the Memphis Melt Shop. Attached hereto as Exhibit 1 is a copy of the Third Amendment to Note Purchase Agreement, dated as of February 20, 2001 (the "Third Amendment"), among BSC and holders of certain 10.03% Senior Notes due December 15, 2005 issued pursuant to the Amended and Restated Note Purchase Agreement, dated as of October 12, 1999, as amended (the "1993 Note Purchase Agreement"), among BSC and such holders. As you know, a number of the covenants contained in the 1993 Note Purchase Agreement have been incorporated into Section 8A of the Lease. The purpose of this letter is to confirm that (i) the amendments to Section 8.11, 8.12, 8.12A and 8.13 of the 1993 Note Purchase Agreement adopted by the Third Amendment shall be incorporated into Section 8A of the Lease and (ii) a portion of the Shutdown Interest accruing on the Equipment Notes (and to be added to Basic Rent) after January 31, 2001 in an amount equal to 1% per annum ( 0.50% per annum after a Facility Restart ) shall not be payable until the earlier of (x) an early termination of the Lease pursuant to Section 10.1 thereof and (y) the first Payment Date occurring after April 1, 2002. For purposes of the preceding sentence, references in the Third Amendment to the Noteholders, the Note Purchase Agreement and the Notes shall, unless the context otherwise requires, be deemed to be references to the Parties, the Lease and the Indenture. In addition, the undersigned hereby confirm their agreement to extend from January 31, 2002 to April 1, 2002 the termination date of the waiver of certain provisions of the Lease and the Indenture which is contained in Section 1 of the Waiver and Amendment No. 1 to the Melt Shop Equipment Financing Documents, dated as of May 15, 2000, among each of the Parties and such Section 1 is hereby amended so that all references therein to January 31, 2002 are hereby changed to April 1, 2002. By execution hereof, (a) each of the holders of the Equipment Notes that are Parties hereby authorizes the execution and delivery of this letter by the Indenture Trustee and (b) each of the Owner Participants hereby authorizes the execution and delivery of this letter by the Owner Trustee. CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION, as Owner Trustee By: /s/ Jack R. Cornwall --------------------- Name: Jack R. Cornwall Title: Vice President FIRST UNION NATIONAL BANK, as Indenture Trustee By: /s/ Robert Ashbaugh -------------------- Name: Robert Ashbaugh Title: Vice President BANK OF AMERICA, NATIONAL ASSOCIATION, as Owner Participant By: /s/ Bryan L. Yoakum -------------------- Name: Bryan L. Yoakum Title: Managing Director AMSOUTH LEASING, LTD., as Owner Participant By: AmSouth Leasing Corporation General Partner By: /s/ Charles F. Kiser --------------------- Name: Charles F. Kiser Title: President TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, as Lender By: /s/ Roi G. Chandy ------------------ Name: Roi G. Chandy Title: Director, Special Situations JEFFERSON PILOT FINANCIAL INSURANCE COMPANY, Successor in interest to ALEXANDER HAMILTON LIFE INSURANCE COMPANY OF AMERICA, as Lender By: /s/ John C. Ingram ------------------- Name: John C. Ingram Title: Executive Vice President JEFFERSON PILOT LIFEAMERICA INSURANCE COMPANY, as Lender By: /s/ John C. Ingram ------------------- Name: John C. Ingram Title: Executive Vice President MINNESOTA LIFE INSURANCE COMPANY, as Lender By: Advantus Capital Management, Inc. By: /s/ Rose A. Lambros -------------------- Name: Rose A. Lambros Title: Vice President FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN, as Lender By: Advantus Capital Management, Inc. By: /s/ Rose A. Lambros -------------------- Name: Rose A. Lambros Title: Vice President THE CATHOLIC AID ASSOCIATION, as Lender By: Advantus Capital Management, Inc. By: /s/ Rose A. Lambros -------------------- Name: Rose A. Lambros Title: Vice President COLUMBIAN MUTUAL LIFE INSURANCE COMPANY, as Lender By: /s/ Lance A. Bowe ------------------ Name: Lance A. Bowe Title: Chief Investment Officer PIONEER MUTUAL LIFE INSURANCE COMPANY, as Lender By: American United Life Insurance Company By: /s/ Christopher D. Pahlke -------------------------- Name: Christopher D. Pahlke Title: Vice President COLORADO BANKERS LIFE INSURANCE COMPANY, as Lender By: Advantus Capital Management, Inc. By: /s/ Rose A. Lambros -------------------- Name: Rose A. Lambros Title: Vice President PROTECTED HOME MUTUAL LIFE INSURANCE COMPANY, as Lender By: Advantus Capital Management, Inc. By: /s/ Rose A. Lambros -------------------- Name: Rose A. Lambros Title: Vice President PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY, as Lender By: /s/ Christopher Wilkos ----------------------- Name: Christopher Wilkos Title: Vice President, Corporate Portfolio Management Acknowledged and Agreed to: BIRMINGHAM STEEL CORPORATION By: /s/ J. Daniel Garrett ---------------------- Name: J. Daniel Garrett Title: Chief Financial Officer