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EXHIBIT 4(K)
EIGHTH AMENDMENT TO CREDIT AGREEMENT
This Eighth Amendment to Credit Agreement (this "AMENDMENT") is made as of July
24, 1997 by and among Ferro Corporation (the "BORROWER") the four banks
(collectively the "BANKS" and each a "BANK") executing and delivering this
Amendment and National City Bank as the agent (in that capacity the "Agent") of
the Banks for purposes of the Credit Agreement referred to below, as that Credit
Agreement may be amended from time to time:
WHEREAS:
I. The Borrower, the Banks and the Agent are parties to a Credit
Agreement dated as of August 22, 1990, as amended by an Amendment Agreement made
as of May 31, 1991, as further amended by a Second Amendment to Credit Agreement
made as of July 30, 1991, as further amended by a Third Amendment to Credit
Agreement made as of December 31, 1991, as further amended by a Fourth Amendment
to Credit Agreement made as of July 21, 1992, as further amended by a Fifth
Amendment to Credit Agreement made as of August 20, 1993, as further amended by
a Sixth Amendment to Credit Agreement made as of June 22, 1995, and as further
amended by a Seventh Amendment to Credit Agreement made as of October 25, 1995
(that Credit Agreement as so amended the "EXISTING CREDIT AGREEMENT") providing
for, among other things, Commitments pursuant to which Advances in the aggregate
unpaid principal sum of not more that one hundred fifty million dollars
($150,000,000) are available to the Borrower upon certain terms and conditions
until the Termination Date;
II. The Borrower has requested the Banks and the Agent to agree to
amend Section 1.01 (captioned "Certain Defined Terms") of the Existing Credit
Agreement, Section 5.01(c) (captioned "Tangible Net Worth") of the Existing
Credit Agreement, Section 5.01(d) (captioned "Tangible Net Worth Ratio") of the
Existing Credit Agreement, and Section 5.01(e) of the Existing Credit Agreement
(captioned "Interest Coverage Ratio"); and
III. The Banks and the Agent are willing to so agree, subject to
the terms and conditions of this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and (in the case of the Banks and the Agent), in
reliance upon the representations and warranties of the Borrower herein
contained, the Borrower, the Banks and the Agent hereby agree as follows:
A. Except as otherwise provided in paragraph B, each term used in this Amendment
that is defined in the Existing Credit Agreement shall have the meaning in this
Amendment that is ascribed to that term in the Existing Credit Agreement.
B. Section 1.01 (captioned "Certain Defined Terms") of the Existing Credit
Agreement is amended, effective as of April 30, 1997, by inserting the following
definitions in alphabetical order:
"AFTER-TAX REALIGNMENT EXPENSE" means a non-recurring charge, in
an amount not greater than one hundred million twenty thousand dollars
($100,020,000), against the consolidated income of the Borrower and its
subsidiaries for the quarter-annual fiscal period ending June 30,
1997."
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"REALIGNMENT EXPENSE" means a non-recurring charge, in an amount
not greater than one hundred fifty-two million seven hundred ninety
thousand dollars ($152,790,000), against the consolidated income of the
Borrower and its subsidiaries for the quarter-annual fiscal period
ending June 30, 1997."
C. Section 5.01(c) (captioned "Tangible Net Worth") of the Existing Credit
Agreement is amended and restated, effective as of April 30, 1997, as follows:
"(c) TANGIBLE NET WORTH. Maintain an excess of (i) the sum of
consolidated total tangible assets plus an amount equal to the
After-Tax Realignment Expense over (ii) consolidated total liabilities
(including Guaranties) of the Borrower and its subsidiaries of not less
than the Required Net Worth. The "Required Net Worth" shall initially
be two hundred thirty-five million dollars ($235,000,000) and shall
increase as of December 31 of each year, commencing December 31, 1997,
by an amount equal to twenty-five percent (25%) of the consolidated net
income (if any) of the Borrower and its subsidiaries for the fiscal
year ending on such December 31."
D. Section 5.01(d) (captioned "Tangible Net Worth Ratio") of the Existing Credit
Agreement is amended and restated, effective as of April 30, 1997, as follows:
"(d) TANGIBLE NET WORTH RATIO." Maintain a ratio (expressed as a
decimal fraction) of
(i) consolidated total liabilities (including
Guaranties but excluding the Transition Obligation) to
(ii) the aggregate of consolidated tangible net
worth, plus an amount (in no case greater than fifty-five
million dollars ($55,000,000)) equal to the goodwill acquired
by Borrower from Synthetic Products Company ("SYNPRO"), a
Delaware corporation, as a part of Borrower's acquisition of
all or substantially all of the assets of Synpro, plus an
amount equal to the After-Tax Realignment Expense,
of not more than 1.85."
E. Section 5.01(e) (captioned "Interest Coverage Ratio") of the Existing Credit
Agreement is amended and restated, effective as of April 30, 1997, as follows:
"(e) INTEREST COVERAGE RATIO. Maintain for each period of four
consecutive fiscal quarters beginning with the period of four fiscal quarters
ending June 30, 1997, a ratio of (i) consolidated net income (before interest
income, interest expense, income taxes, and the Realignment Expense) of the
Borrower and its subsidiaries for such period to (ii) consolidated interest
expense (net of interest income) for such period of not less than 2.5 to 1.0."
F. The Borrower hereby represents and warrants to each Bank and the Agent that
no event, condition or other thing has occurred and is continuing, or will occur
after giving effect to this Amendment, which constitutes, or which with the
giving of notice or the lapse of any grace period or both would constitute,
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an Event of Default. The representation and warranty made pursuant to this
paragraph F shall survive the execution and delivery of this Amendment.
G. The Borrower, the Banks and the Agent do hereby ratify and confirm all of the
terms and conditions of the Existing Credit Agreement not specifically amended
by this Amendment and all such terms and conditions remain in full force and
effect.
H. This Amendment may be executed in one or more counterparts, each counterpart
to be executed by the Borrower, by the Agent and by one or more or all of the
Banks. Any party to the Existing Credit Agreement may deliver an executed
signature page to this Amendment by telecopy to the Agent at the telecopier
number set forth below the Agent's signature, and that party shall be deemed to
have executed and delivered that signature page with the intent to be bound by
this Amendment, PROVIDED, that each party to this Amendment shall, on the
Agent's request, deliver to the Agent such number of counterparts bearing the
original signature of that party as the Agent may request in order that each
party may ultimately have a counterpart bearing the original signature of each
party to this Amendment. Each party to this Amendment hereby assents to the
foregoing procedure for executing and delivering this Amendment and agrees that
all such counterparts taken together shall constitute but one agreement, which
agreement constitutes the entire agreement between the parties to this Amendment
in respect of its subject matter.
Ferro Corporation Citibank, N.A.
By: /s/ D. Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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X.Xxxxxx Xxxxxx Xxxxxx X. Xxxxxx
Treasurer V.P./S.C.O.
National City Bank, Agent Bank Boston, NT
The First National Bank of Boston (a.k.a. The First national Bank of Boston)
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxxx Xxxxxx
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Xxxxxxx X. Xxxxxxx Xxxxxxxx Xxxxxx
Vice President Director
Telecopier: (000) 000-0000
National City Bank KeyBank National Association (formerly
known as Society National Bank)
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
Vice President --------------------------
Xxxxxxx X. Xxxxx
Vice President
