SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement (the
"AMENDMENT") dated as of April 23, 1999 among Xxxxxxxx Casting Corporation
(the "BORROWER"), the Banks, and Xxxxxx Trust and Savings Bank, as Agent;
W I T N E S S E T H:
WHEREAS, the Borrower, Guarantors, Banks and Xxxxxx Trust and Savings
Bank, as Agent, have heretofore executed and delivered an Amended and
Restated Credit Agreement dated as of April 3, 1998 (as amended by the First
Amendment thereto dated October 7, 1998, the "CREDIT AGREEMENT"); and
WHEREAS, the parties hereto desire to amend the Credit Agreement as
provided herein;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree that
the Credit Agreement shall be and hereby is amended as follows:
1. The definition of "EUROCURRENCY MARGIN" appearing in Section 1.3(b)
of the Credit Agreement is hereby amended in its entirety and as so amended
shall read as follows:
"EUROCURRENCY MARGIN" means (A) 1.35% per annum for any
Pricing Period for which Level I Status exists, (B) 1.60%
per annum for any Pricing Period for which Level II Status
exists, and (C) 1.85% per annum for any Pricing Period for
which Level III Status exists.
2. Section 5.12(b) of the Credit Agreement is hereby amended in its
entirety and as so amended shall read as follows:
(b) To the best of the Borrower's knowledge, except as
disclosed on Schedule 5.12 hereto, the business and
operations of the Borrower and each Subsidiary comply in all
respects with all Environmental Laws and Environmental
Permits received thereunder, except where the failure to
comply would not (individually or in the aggregate) have a
Material Adverse Effect.
3. Section 7.15(e) of the Credit Agreement is hereby amended in its
entirety and as so amended shall read as follows:
(e) FIXED CHARGE COVERAGE RATIO. (i) If the Borrower
issues at least $60,000,000 of Subordinated Debt on or prior
to June 30, 1999, the Borrower will not, as of the last day
of each fiscal quarter of the Borrower ending during each of
the periods
specified below permit the Fixed Charge Coverage Ratio to be
less than :
FROM AND TO AND FIXED CHARGE
INCLUDING INCLUDING COVERAGE RATIO SHALL
NOT BE LESS THAN:
March 31, 1999 June 29, 1999 1.10
June 30, 1999 Thereafter 1.50
(ii) If the Borrower issues less than $60,000,000 of
Subordinated Debt on or prior to June 30, 1999, the Borrower
will not, as of the last day of each fiscal quarter of the
Borrower ending during each of the periods specified below
permit the Fixed Charge Coverage Ratio to be less than :
FROM AND TO AND FIXED CHARGE
INCLUDING INCLUDING COVERAGE RATIO SHALL
NOT BE LESS THAN:
March 31, 1999 March 30, 2000 1.10
March 31, 2000 March 30, 2001 1.25
March 31, 2001 Thereafter 1.50
4. Section 7.15(f) of the Credit Agreement is hereby amended in its
entirety and as so amended shall read as follows:
(f) CASH FLOW LEVERAGE RATIO. The Borrower will not
on any date permit (i)(A) prior to the date of the issuance
of any Subordinated Debt, the ratio of Consolidated Total
Senior Debt to EBITDA for the four fiscal quarters of the
Borrower then ended to be greater than 3.2 to 1.0, or
(B) from and after the date of the issuance of any
Subordinated Debt, the ratio of Consolidated Total Senior
Debt to EBITDA for the four fiscal quarters of the Borrower
then ended to be greater than 3.0 to 1.0, or (ii) the ratio
of Consolidated Total Debt to EBITDA for the four fiscal
quarters of the Borrower then ended to be greater than 3.5
to 1.0.
5. Section 7.18(d) of the Credit Agreement is hereby amended in its
entirety and as so amended shall be as follows:
(d) the Borrower and its Subsidiaries may make and own
Investments in any Subsidiary of the Borrower or, from and after
May 1, 2000 make and own or enter into any agreement to make or own
Investments, in any Person which simultaneously therewith becomes a
Subsidiary provided that such Person is engaged primarily in the
foundry business or in businesses reasonably related thereto and
(A) concurrently with or before
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consummation of such acquisition, the Borrower delivers to the
Agent a certificate of the Chief Financial Officer, Controller or
Treasurer of the Borrower certifying that immediately upon and
following the consummation of such acquisition, the Borrower, on a
PRO FORMA basis (assuming such acquisition had been consummated on
the first day of the most recently ended period of four fiscal
quarters for which financial statements have been or are required
to have been delivered pursuant to Section 7.6), the Borrower would
have a Fixed Charge Coverage Ratio of at least 1.50 to 1.00 and (B)
either (i) at the time of such acquisition and after giving effect
thereto the Borrower's ratio of Consolidated Total Debt to Total
Capitalization does not exceed 40% (the "40% THRESHOLD") or (ii)
once the 40% Threshold has been exceeded in that fiscal year, the
total aggregate principal amount expended for all acquisitions
thereafter in such fiscal year does not exceed 25% of the
Stockholder's Equity of the Borrower as of the last day of the
immediately preceding fiscal year of the Borrower PLUS 25% of the
net proceeds (net proceeds for such purposes to mean gross proceeds
less reasonable underwriting discounts and commissions and other
reasonable costs directly incurred and payable as a result thereof)
received by the Borrower from the issuance of additional equity or
Subordinated Debt during the fiscal year of the proposed
acquisition; and
6. Schedule 5.6(a) to the Credit Agreement is hereby amended in its
entirety to read as Schedule 5.6(a) attached to this Amendment.
7. A new Schedule 5.12 to the Credit Agreement is hereby added to the
Credit Agreement immediately following Schedule 5.6(a) in the form of
Schedule 5.12 to this Amendment.
8. The Borrower represents and warrants to each Bank and the Agent that
(a) each of the representations and warranties set forth in Section 5 of the
Credit Agreement is true and correct on and as of the date of this Amendment as
if made on and as of the date hereof and as if each reference therein to the
Credit Agreement referred to the Credit Agreement as amended hereby; (b) no
Default and no Event of Default has occurred and is continuing; and (c) without
limiting the effect of the foregoing, the Borrower's execution, delivery and
performance of this Amendment have been duly authorized, and this Amendment has
been executed and delivered by duly authorized officers of the Borrower.
9. This Amendment shall become effective upon satisfaction of the
following conditions precedent:
(i) the Borrower, the Banks, and the Agent shall have executed and
delivered this Amendment and the Guarantors shall have executed the consent
attached hereto;
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(ii) receipt by the Agent of the favorable written opinion of
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP, legal counsel to the Borrower, in form
and substance satisfactory to the Agent; and
(iii) the Administrative Agent shall have received for each Bank an
amendment fee in the amount of 0.10 % of each such Bank's Commitment.
The revisions to the Eurocurrency Margin shall take effect with respect to
any Loan outstanding on June 30, 1999 and on each day thereafter, but any
payment of interest due on or after June 30, 1999 with respect to any Loans
outstanding prior thereto shall be computed on the basis of the Eurocurrency
Margin in effect prior to such effectiveness.
This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each of which
when so executed shall be an original but all of which shall constitute one and
the same instrument. Except as specifically amended and modified hereby, all of
the terms and conditions of the Credit Agreement and the other Credit Documents
shall remain unchanged and in full force and effect. All references to the
Credit Agreement in any document shall be deemed to be references to the Credit
Agreement as amended hereby. All capitalized terms used herein without
definition shall have the same meaning herein as they have in the Credit
Agreement. This Amendment shall be construed and governed by and in accordance
with the internal laws of the State of Illinois.
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Dated as of the date first above written.
XXXXXXXX CASTING CORPORATION
By: /s/ Xxxxx X. XxXxxxxx
---------------------------------
Title: V.P. & Treasurer
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XXXXXX TRUST AND SAVINGS BANK, in its
individual capacity as a Bank and
as Agent
By: /s/ Xxx Xxxx
---------------------------------
Title: Vice President
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COMMERCE BANK, N.A.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Title: Vice President
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MERCANTILE BANK
By: /s/ Xxxxx Xxxxxxxx
---------------------------------
Title: Vice President
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KEY BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxxx
---------------------------------
Title: Vice President
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COMERICA BANK
By: /s/ Xxxx Xxxx
---------------------------------
Title: Vice President
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HIBERNIA NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxxxxx
---------------------------------
Title: Senior Vice President
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NATIONAL WESTMINSTER BANK PLC
Nassau Branch
By: /s/ Xxxxxx Xxxxx
---------------------------------
Title: Senior Corporate Manager
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New York Branch
By: /s/ Xxxxxx Xxxxx
---------------------------------
Title: Senior Corporate Manager
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NORWEST BANK MINNESOTA, N.A.
By: /s/ X. Xxxxxx Xxxxxxxx
---------------------------------
Title: V.P.
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SCHEDULE 5.6(a)
LITIGATION
An accident, involving an explosion and fire, occurred on February 25, 1999
at Xxxx Foundry, a wholly-owned subsidiary of the Borrower located in
Springfield, Massachusetts. Nine employees were injured and there have been
three fatalitites. The damage was confined to the shell molding area and boiler
and other areas of the foundry are operational. Molds are currently being
produced at other foundries until repairs are made. Although no lawsuits have
been filed, a number of attorneys representing the injured employees have
contacted Xxxx Foundry regarding possible litigation. In addition, the
Occupational Safety and Health Administration ("OSHA") has six months from the
date of the accident to issue any citations, sanctions or fines. Such fines and
sanctions, if any, could be material to the Borrower. The Borrower believes
Xxxx Foundry was operating in compliance with OSHA rules and regulations.
Should OSHA issue any citations in connection with this accident, Xxxx Foundry
would vigorously defend itself.
An investigation continues as to the cause of the explosion by OSHA, the
State Fire Xxxxxxxx and the State Police. The Borrower and others are
conducting their own investigations at the same time. The Borrower carries
insurance for property and casualty damages, business interruption, general
liability and workers' compensation. The Borrower recorded a charge of $450,000
($750,000 before tax) during the third quarter of fiscal 1999, primarily
reflecting the deductibles under the Borrower's various insurance policies. At
this time there can be no assurance that the Borrower's ultimate costs and
expenses resulting from the accident will not exceed available insurance
coverage by an amount which could be material to its financial condition or
results of operations.
SCHEDULE 5.12
COMPLIANCE WITH LAWS
Xxxx Foundry Corp. is under investigation for the incident described in
Schedule 5.6(a). The results of the investigation, when known, may conclude
that one or more Environmental Laws were violated in connection with the
incident.