Exhibit 4f
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT ("this Fifth Amendment") is
made and entered into as of the 7th day of March, 2003, by and among BRUSH
ENGINEERED MATERIALS INC., an Ohio corporation (the "Parent"), and BRUSH XXXXXXX
INC., an Ohio corporation and a wholly owned subsidiary of the Parent ("Brush
Xxxxxxx" and, collectively with the Parent, the "Borrowers", with each being a
"Borrower"); the LENDERS listed on the signature pages of this Fifth Amendment
(collectively, the "Lenders"); and NATIONAL CITY BANK, a national banking
association, as one of the Lenders, as the Lender under the Swing Line Revolving
Facility (herein, together with its successors and assigns, the "Swing Line
Lender"), and as Administrative Agent for the Lenders (the "Administrative
Agent") under the Credit Agreement (hereinafter defined).
RECITALS:
A. The Borrowers, the Lenders, the Swing Line Lender and the
Administrative Agent, are parties to that certain Credit Agreement dated as of
June 30, 2000, as amended by a First Amendment dated as of March 30, 2001, a
Second Amendment dated as of September 28, 2001, a Third Amendment dated as of
December 31, 2001, and a Fourth Amendment dated as of January 29, 2003
(collectively, the "Credit Agreement"), pursuant to which, among other things,
the Lenders agreed, subject to the terms and conditions thereof, to lend to the
Borrowers up to Sixty-five Million Dollars ($65,000,000) from time to time.
B. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
C. As of the close of business on March 6, 2003, the aggregate unpaid
principal balance
of the General Revolving Credit Loans was $30,840,000, the
aggregate unpaid principal balance of the Swing Line Revolving Loans was
$4,210,000, and the aggregate undrawn amount of Letters of Credit outstanding
was $3,311,300.
D. Subject to the terms and conditions of this Fifth Amendment, the
Borrowers, the Lenders, the Swing Line Lender and the Administrative Agent have
agreed to amend the Credit Agreement as hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual agreements hereinafter set forth, the parties hereby agree as follows:
1. AMENDMENTS TO THE CREDIT AGREEMENT. Subject to the terms and
conditions of this Fifth Amendment, including, without limitation, Section 2,
below, the Credit Agreement is hereby amended as follows:
A. The following definitions are added to Section 1.1 (Definitions)
of the Credit Agreement in proper alphabetical order:
"EXCESS CASH FLOW" shall mean for any period, an amount (but
in no event less than $-0-) equal to Consolidated EBITDA for such
period, minus the aggregate of (i) Consolidated Interest Expense for
such period, (ii) scheduled or mandatory repayments, prepayments and
redemptions of principal Indebtedness, on a consolidated basis, due and
payable during such period (other than the Loans), (iii) Consolidated
Capital Expenditures permitted by this Agreement and made during such
period (other than Consolidated Capital Expenditures made with the
proceeds of Indebtedness, other than Loans), and (iv) payments made
during such period with respect to taxes based on the net income of the
Borrowers and the Subsidiaries (including, without limitation, any
additions to such taxes, and any penalties and interest with respect
thereto).
"LIQUIDITY RESERVE" shall mean, upon the effectiveness of the
Fifth Amendment to this Agreement, Five Million Dollars ($5,000,000)
and on any date thereafter, an amount equal to (i) $5,000,000, plus
(ii) the aggregate amount of all Mandatory Reductions effective on or
prior to such date.
"MANDATORY REDUCTIONS" shall mean, collectively, the aggregate
of any and all
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reductions in the Total General Revolving Commitment
effective after the effectiveness of the Fifth Amendment to this
Agreement (a) pursuant to clause (i) of the first sentence of section
4.2(b) of this Agreement by reference to any mandatory prepayment of
Loans made pursuant to section 5.2(d) of this Agreement and (b)
pursuant to clause (ii) of the first sentence of section 4.2(b) of this
Agreement by reference to Excess Cash Flow for the Parent's fiscal year
ending December 31, 2003.
B. The definitions of "Borrowing Base", "Cash Proceeds", "Maturity
Date", and "Net Cash Proceeds" in Section 1.1 (Definitions) of the Credit
Agreement are amended and restated in their entirety to provide, respectively,
as follows:
"ASSET SALE" shall mean the sale, transfer or other
disposition (including by means of Sale and Lease-Back Transactions,
and by means of mergers, consolidations, and liquidations of a
corporation, partnership or limited liability company of the interests
therein of a Borrower or any Subsidiary, but excluding sales of
Inventory in the ordinary course of business of a Borrower or any
Subsidiary) by a Borrower or any Subsidiary to any person of any of
their respective assets.
"BORROWING BASE" shall mean at any time and from time to time,
an amount equal to (a) the aggregate of:
(i) an amount equal to eighty-five percent (85%) of the
face value of the Eligible Accounts at such time, as
reflected on the most recent Borrowing Base
Certificate,
(ii) the lesser of (a) $40,000,000 and (b) an amount equal
to fifty percent (50%) of the value (at the lower of
cost or market value) of the Eligible Inventory at
such time, as reflected on the most recent Borrowing
Base Certificate; and
(iii) the Equipment Amount at such time,
minus, (b) the Liquidity Reserve at such time.
"CASH PROCEEDS" shall mean, with respect to any event or
transaction of the type described in any of clauses (a), (b) and (c) of
the definition of Net Cash Proceeds, the aggregate cash payments
(including any cash received by way of deferred payment pursuant to a
note receivable issued in connection with such event or transaction,
other than the portion of such deferred payment constituting interest,
but only as and when so received) received by the Borrowers and/or any
Subsidiary from such event or transaction.
"MATURITY DATE" shall mean April 5, 2004, or such earlier date
on which the Total Commitment is terminated.
"NET CASH PROCEEDS" shall mean, (a) with respect to any Asset
Sale, the Cash Proceeds resulting therefrom net of (i) reasonable and
customary expenses of sale incurred
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in connection with such Asset Sale (including, without limitation,
sales commissions and legal, accounting, broker and investment banking
fees), and other reasonable and customary fees and expenses incurred,
and all state, and local taxes paid or reasonably estimated by the
Parent to be payable by such person, as a consequence of such Asset
Sale and the payment of principal, premium and interest of Indebtedness
(other than the Obligations) secured by the asset which is the subject
of the Asset Sale and required to be, and which is, repaid under the
terms thereof as a result of such Asset Sale and (ii) incremental
income taxes paid or payable as a result thereof, (b) with respect to
any sale or issuance of equity or debt securities or other incurrence
of Indebtedness by a Credit Party, the Cash Proceeds resulting
therefrom net of reasonable and customary fees and expenses incurred as
a consequence of such sale, issuance or incurrence (including, without
limitation, sales and underwriter's commissions, up-front fees and
placement fees), and (c) with respect to any destruction, governmental
taking or other involuntary disposition of property, the Cash Proceeds
resulting therefrom net of reasonable and customary fees and expenses
incurred as a consequence of such disposition and the claim for and
collection of such Cash Proceeds, and all state, and local taxes paid
or reasonably estimated by the Parent to be payable by such person, as
a consequence of such disposition and the payment of principal, premium
and interest of Indebtedness (other than the Obligations) secured by
the asset which is the subject of such disposition and required to be,
and which is, repaid under the terms thereof as a result of such
disposition.
C. The definition of "Permitted Master Copper Lease Agreements" in
Section 1.1 (Definitions) of the Credit Agreement is amended by deleting
therefrom the words and sum "an amount greater than $15,000,000" and inserting
therein the sum "$10,000,000" in their stead.
D. The definition of "Permitted Precious Metal Consignments" in
Section 1.1 (Definitions) of the Credit Agreement is amended by deleting
therefrom the sum "$70,000,000" and inserting therein the sum "$50,000,000" in
its stead.
E. Clause (ii) of Section 2.1(a) (General Revolving Facility) is
amended and restated in its entirety to provide as follows:
(ii) shall be made only in U.S. Dollars or in the case of Eurodollar
Loans, may be made in an Alternative Currency, so long as such Loan in
an Alternative Currency (A) is in replacement of a then maturing
outstanding Loan in an Alternative Currency, (B) is in the same or a
lesser principal amount as the Loan that it replaces, and (C) is in the
same Alternative Currency as the Loan that it replaces,
F. Section 2.8(h) (Interest Margins) of the Credit Agreement is amended
and restated
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in its entirety to provide as follows:
(h) INTEREST MARGINS. As used herein, the term "APPLICABLE PRIME
RATE MARGIN", as applied to any Loan which is a Prime Rate Loan, means
two hundred fifty (250) basis points per annum; and the term
"APPLICABLE EURODOLLAR MARGIN", as applied to any General Revolving
Loan which is a Eurodollar Loan, means four hundred (400) basis points
per annum.
G. Clause (i) of Section 2A.1(b) (Letters of Credit) of the Credit
Agreement is amended by deleting therefrom the sum "$5,000,000" and inserting
therein the sum "$10,000,000" in its stead.
H. The following provision is added as a new Section 3.4 of the Credit
Agreement immediately following Section 3.3 and preceding Section 4:
3.4 INCREMENTAL FEES. The Borrowers agree to pay to the
Administrative Agent, for the account of each Non-Defaulting Lender
that has a General Revolving Commitment, a fee (each an "Incremental
Fee") (i) on each of June 30, 2003 and September 30, 2003, in an amount
equal to twelve and one-half (12.5) basis points, times the General
Revolving Commitment of such Non-Defaulting Lender on such date,
whether used or unused, and (ii) on February 28, 2004, in an amount
equal to twenty-five (25) basis points, times the General Revolving
Commitment of such Non-Defaulting Lender on December 31, 2003, whether
used or unused; provided, however, that (i) although the Incremental
Fee payable on February 28, 2004 shall be deemed earned in full on
December 31, 2003, if Consolidated EBITDAR for the Parent's fiscal year
ending December 31, 2003 is at least $28,000,000, payment of one-half
(1/2) of such Incremental Fee shall be waived by each Lender, (ii) no
Incremental Fee shall be payable on any of the foregoing dates if,
prior to such date, the Liquidity Reserve has been increased by
Mandatory Reductions aggregating at least $10,000,000, and (iii) if,
pursuant to Section 10.2, below, the maturity of the Loans and other
Obligations is accelerated, all of the foregoing scheduled Incremental
Fees not theretofore paid shall be due and payable in full upon such
acceleration and shall be computed on the General Revolving Commitment
of each Non-Defaulting Lender on such date of acceleration.
I. Section 4.2(b) (Mandatory Termination/Adjustments of Commitments,
etc.) of the Credit Agreement is amended and restated in its entirety to provide
as follows:
(b) The Total General Revolving Commitment shall be permanently
reduced, without premium or penalty, (i) at the time that any mandatory
prepayment of General Revolving Loans would be made pursuant to section
5.2(d) if General Revolving Loans were then outstanding in the full
amount of the Total General Revolving Commitment then in effect (and no
Swing Line Revolving Loans were then outstanding), in an amount equal
to the required prepayment of principal of General Revolving Loans
which would be required
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to be made in such circumstance and (ii) on and after the date that is
fifteen (15) days after the date on which the Borrowers deliver to the
Lenders and the Administrative Agent the audited financial statements
of the Parent and its Subsidiaries for their fiscal year ending
December 31, 2003 pursuant to Section 8.1(a) of this Agreement, in an
amount equal to seventy-five percent (75%) of Excess Cash Flow for the
Parent's fiscal year ending December 31, 2003. Any such reduction shall
apply to reduce proportionately and permanently the General Revolving
Commitment of each of the Lenders. Unless the Borrowers theretofore
have provided notice to the Administrative Agent pursuant to any other
provision of this Agreement, the Borrowers will provide at least three
Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Administrative Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the
Lenders), of any reduction of the Total General Revolving Commitment
pursuant to this section 4.2(b), specifying the date and amount of the
reduction.
J. Section 5.2(d) (Certain Proceeds of Asset Sales) of the of the
Credit Agreement is amended and restated in its entirety to provide as follows:
(d) CERTAIN PROCEEDS OF ASSET SALES, EQUITY SALES, DEBT AND OTHER
DISPOSITIONS.
(i) If at any time, a Borrower or any Subsidiary receives:
(A) Net Cash Proceeds of an Asset Sale (or series of
related Asset Sales) in an aggregate amount greater than $250,000, then
on the date of receipt thereof, an amount equal to 100% of the Net Cash
Proceeds in excess of such amount from such Asset Sale (or such series)
shall, immediately upon receipt, be paid to the Administrative Agent
and applied as a mandatory prepayment of principal of first, Swing Line
Revolving Loans and, SECOND, after Swing Line Revolving Loans have been
paid in full, General Revolving Loans (provided that if a Default or
Event of Default shall then exist, all Net Cash Proceeds from such
Asset Sale (or such series) shall be prepaid and applied as aforesaid);
(B) Net Cash Proceeds of any sale or issuance of equity or
debt securities or other incurrence of Indebtedness (other than (I)
Obligations, (II) credit or metals availability under Permitted
Precious Metal Consignments, (III) Guaranty Obligations permitted by
this Agreement, (IV) all net obligations of a Borrower or any
Subsidiary under any Hedge Agreement, (V) Indebtedness of a Borrower or
any Subsidiary to any Borrower or any Subsidiary, (VI) Indebtedness
permitted pursuant to section 9.4(c) of this Agreement, and (VII) other
Indebtedness in principal amount as to any incurrence or series of
related incurrences of not more than $100,000), then on the date of
receipt thereof, an amount equal to 100% of the Net Cash Proceeds
shall, immediately upon receipt, be paid to the Administrative Agent
and applied as a mandatory prepayment of principal of FIRST, Swing Line
Revolving Loans and, SECOND, after Swing Line Revolving Loans have been
paid in full, General Revolving Loans; and
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(C) Net Cash Proceeds of any destruction, governmental taking
or other involuntary disposition of property in an amount greater than
$500,000, then on the date of receipt thereof, an amount equal to 100%
of the Net Cash Proceeds in excess of such amount from such disposition
shall, immediately upon receipt, be paid to the Administrative Agent
and applied as a mandatory prepayment of principal of FIRST, Swing Line
Revolving Loans and, SECOND, after Swing Line Revolving Loans have been
paid in full, General Revolving Loans (provided that if a Default or
Event of Default shall then exist, all Net Cash Proceeds from such
disposition shall be prepaid and applied as aforesaid).
(ii) Any and all prepayments of Loans under paragraph (i),
above, that consist in whole or in part of Eurodollar Loans shall be
accompanied, as to each such Eurodollar Loan, by all accrued and unpaid
interest thereon and by any amounts payable pursuant to section 2.11 of
this Agreement.
K. Clause (ii) of Section 8.1(i) (Monthly Financial Statements;
Borrowing Base Certificate; Inspection) of the Credit Agreement is amended and
restated in its entirety to provide as follows:
(ii) (A) As soon as available and in any event on or before the last
Business Day of each calendar week, commencing March 14, 2003, (I) a
certificate reflecting the calculation of each Credit Party's Eligible
Accounts and Eligible Inventory, in form and content reasonably
satisfactory to the Administrative Agent (each a "Borrowing Base
Certificate") and (II) a rolling report of the Parent's projected cash
receipts and cash disbursements, on a consolidated basis, for the
ensuing thirteen (13) week period in form and content reasonably
satisfactory to the Administrative Agent, including without limitation,
projected Borrowing Base, and General Revolving Loan availability as of
the last Business Day of each week covered by such report, and a
variance analysis of the Parent's actual cash receipts and cash
disbursements, on a consolidated basis, for the most recently ended
past period covered in the most recent such report in form and content
reasonably satisfactory to the Administrative Agent; (B) as soon as
available and in any event within twenty (20) days after the close of
each of the monthly accounting periods in each fiscal year of the
Parent (I) a summary aged trial balance of each Credit Party's Accounts
dated as of such month end, and (II) an Inventory record as of such
month end; and (C) promptly following the request of the Administrative
Agent, any of: a reconciliation to the respective general ledger
balance and a detailed aged trial balance of all then existing Accounts
specifying the names, face value and dates of invoices for each Account
Debtor obligated on an Account so listed and an Inventory trial balance
for each Credit Party, broken down into such detail and with such
categories as the Administrative Agent shall reasonably require
(including, but not limited to, a report indicating the type, location
and amount of raw materials and finished goods and all other
information deemed reasonably necessary by the Administrative Agent to
determine the Eligible Inventory of such Credit Party).
L. The following two sentences are added to the end of Section 8.2 of
the Credit
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Agreement:
Without limiting the generality of the foregoing, the Parent shall
cause each Credit Party (i) to permit the Administrative Agent, and its
officers, employees, and field auditors, appraisers and other agents,
to make such field examinations, appraisals, inspections, reviews,
evaluations and test verifications and counts of the Accounts,
Inventory and other Collateral of any Credit Party (each an
"Examination" and, collectively, "Examinations") as the Administrative
Agent may from time to time request (provided that such Examinations
shall be in accordance with such Credit Party's applicable safety
procedures and regulations and, so long as no Default or Event of
Default then exists, shall be made upon reasonable prior written notice
to the Parent, during normal business hours and at reasonable
frequency) and (ii) to furnish all such reasonable assistance and
information as the Administrative Agent or any such officer, employee,
field auditor, appraiser or other agent may reasonably require in
connection therewith. The Borrowers shall reimburse the Administrative
Agent promptly for all reasonable costs and expenses incurred by the
Administrative Agent in connection with each such Examination; provided
that so long as no Default or Event of Default then exists, the
Borrowers shall not be required to reimburse the Administrative Agent
for the costs and expenses of more than one (1) Examination in any
fiscal quarter of the Parent.
M. Section 9.2(b) (Acquisitions) of the Credit Agreement is amended and
restated in its entirety to provide as follows:
(b) ACQUISITIONS. [Intentionally Deleted].
N. Clause (A) of the first proviso of Section 9.2(c) (Permitted
Dispositions) is amended and restated in its entirety to provide as follows:
(A) the consideration for such transaction represents fair value
(as determined by management of the Parent and approved by the
Administrative Agent and the Required Lenders in writing, which
approval shall not be withheld or delayed unreasonably), and at least
90% of such consideration consists of cash (with any instrument
evidencing any deferred portion of consideration being deposited in
pledge with the Collateral Agent pursuant to, as the case may be, the
Security Agreement or the Subsidiary Security Agreement),
O. Section 9.2(e) (Capital Expenditures) of the Credit Agreement is
amended and restated in its entirety to provide as follows:
(e) CAPITAL EXPENDITURES. The Borrowers and the Subsidiaries shall
not make any Consolidated Capital Expenditure if, after giving effect
to such Consolidated Capital Expenditure, the aggregate of all
Consolidated Capital Expenditures made (i) during the
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fiscal year of the Parent ending December 31, 2003 would exceed
$10,000,000 or (ii) during the fiscal quarter ending March 31, 2004
would exceed $3,000,000.
P. Section 9.4(j) (Additional Unsecured Debt of the Borrowers) of the
Credit Agreement is amended by deleting therefrom the sum "$5,000,000" and
inserting therein the sum "$3,000,000" in its stead.
Q. Section 9.5(e) (Advances, Investments, Loans and Guaranty
Obligations) of the Credit Agreement is amended and restated in its entirety to
provide as follows:
(e) the loans, advances, investments and guarantees in respect of
Indebtedness of persons other than Wholly-Owned Subsidiaries of the
Borrowers on the date of the Fifth Amendment to this Agreement and
described in Annex V hereto and any refinancing, extension, renewal or
refunding thereof;
R. Section 9.5(k) (Advances, Investments, Loans and Guaranty
Obligations) of the Credit Agreement is amended by deleting therefrom the sum
"$10,000,000" and inserting therein the sum "$1,000,000" in its stead.
S. Section 9.7 of the Credit Agreement (Ratio of Consolidated Total
Debt to Consolidated Total Adjusted Capital and Interest Coverage Ratio) is
amended and restated in its entirety to provide as follows:
9.7 INTEREST COVERAGE RATIO. The Borrowers shall not permit the
Interest Coverage Ratio for the Testing Period ending on any of the
following dates to be less than the ratio set forth below opposite such
date:
Testing Period Ending Minimum Ratio
--------------------- -------------
June 30, 2003 1.20 to 1
September 30, 2003 1.25 to 1
December 31, 2003 1.35 to 1
March 31, 2004 1.50 to 1;
provided, however, that for the purposes of this Section 9.7 only, in
computing the Interest Coverage Ratio for the Testing Period ending
June 30, 2003, Consolidated EBITDAR shall be deemed to mean an amount
equal to Consolidated EBITDAR for the period January 1, 2003 through
June 30, 2003, times two (2); and, in computing the Interest Coverage
Ratio
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for the Testing Period ending September 30, 2003, Consolidated EBITDAR
shall be deemed to mean an amount equal to Consolidated EBITDAR for the
period January 1, 2003 through September 30, 2003, times one and
one-third (1 1/3).
T. Section 9.8 of the Credit Agreement (Ratio of Consolidated Total
Debt to Consolidated EBITDAR) is amended and restated in its entirety to provide
as follows:
9.8 RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED EBITDAR.
The Borrowers shall not permit the ratio of (i) the amount of
Consolidated Total Debt as of the end of any Testing Period ending on
and after December 31, 2003 to (ii) Consolidated EBITDAR for such
Testing Period, to exceed 5.00 to 1.
U. Section 9.9 (Consolidated Fixed Charge Coverage Ratio) of the Credit
Agreement is amended and restated in its entirety to provide as follows:
9.9. MINIMUM EBITDAR. The Borrowers shall not at any time permit the
Consolidated EBITDAR for the Testing Period ending on any of the
following dates to be less than the amount set forth opposite such
date:
Testing Period Ending Minimum EBITDAR
--------------------- ---------------
March 31, 2003 $ 8,500,000
June 30, 2003 $10,500,000
September 30, 2003 $14,000,000
December 31, 2003 $22,000,000
March 31, 2004 $24,000,000.
V. Section 9.10 (Consolidated Tangible Net Worth) of the Credit
Agreement is amended and restated in its entirety to provide as follows:
9.10 CONSOLIDATED TANGIBLE NET WORTH. The Borrowers shall not permit
the Consolidated Tangible Net Worth to be less than (i) $185,000,000 as
of December 31, 2002 or (ii) $180,000,000 at any time thereafter.
W. The following provision is added as new a Section 9.19 of the Credit
Agreement immediately following Section 9.18 and before Section 10:
9.19 CONSULTANT ACCESS. Each Borrower hereby agrees to instruct and
authorize, and to cause each Subsidiary to instruct and authorize, FTI
Consultants, Inc. (the "Consultant") to provide to the Administrative
Agent and each Lender, promptly upon the request of the Administrative
Agent or any Lender, true and complete copies of such reports,
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analyses and other information relating to any one or more of the
Credit Parties, or otherwise arising from or in connection with such
Consultant's engagement, as the Administrative Agent or any Lender may
from time to time reasonably request and to discuss with the
Administrative Agent and the Lenders, promptly upon the written request
of the Administrative Agent or any Lender to the Consultant (with a
copy of any such notice to the Parent), all aspects of the business and
property of any one or more of the Credit Parties and all of the
Consultant's findings, opinions and conclusions, whether tentative or
final; PROVIDED that any Credit Party potentially affected by any such
discussions, shall be entitled to have one or more representatives
present to observe such discussions.
X. Section 10.1(e) (Cross Default Under Other Agreements; Precious
Metals Consignments) of the Credit Agreement is amended by adding the following
clause to the end thereof, immediately following the word "or" at the end of
clause (ii) thereof:
(iii) there shall occur a "Default" as that term is defined and used in
the Master Lease Agreement, dated as of December 30, 1996, as amended,
between NCB, for itself and certain participants, as lessor, and Brush
Xxxxxxx, as lessee; or
Y. Section 10.1(f) (Judgments) of the Credit Agreement is amended by
deleting therefrom the sum "$5,000,000" and inserting the sum "$1,000,000" in
its stead.
Z. Section 10.1(i) (Material Adverse Change) of the Credit Agreement is
amended and restated in its entirety to provide as follows:
(i) MATERIAL ADVERSE CHANGE: [Intentionally Deleted].
AA. The following sentence is added to the end of Section 10.3
(Application of Liquidation Proceeds):
Notwithstanding anything to the contrary in this Section 10.3 or
any other provision of this Agreement, the provisions contained in
any Mortgage encumbering real property in the State of New York
with respect to application of proceeds or other payments to the
Indebtedness secured by such Mortgage shall prevail over the
provisions of this Agreement.
BB. Annex I (Information as to Lenders) to the Credit Agreement is
replaced in full by the Amended and Restated Annex I attached as Attachment 1
hereto.
CC. Annex V (Description of Existing Advances, Loans, Investments
and Guaranties) to
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the Credit Agreement is replaced in full by the Amended and Restated Annex V
attached as Attachment 2 hereto.
2. DELIVERY DATE; CONDITIONS PRECEDENT. The modifications to the Credit
Agreement set forth in Section 1, above, are subject to the Borrowers'
performance of the following (the date on which all have been performed being
the "Delivery Date"):
A. Each Borrower's secretary or treasurer shall have certified to each
Lender (i) a copy of the resolutions duly adopted by that Borrower's board of
directors in respect of this Amendment and the other Credit Documents
contemplated hereby; (ii) true and correct copies of that Borrower's current
Charter or Articles of Incorporation and By-laws or Code of Regulations (or, if
applicable, that no modifications thereof have been made since they were most
recently certified to the Lenders); (iii) the names and true signatures of the
officers of that Borrower authorized to sign this Fifth Amendment on behalf of
that Borrower; (iv) that, after giving effect to the amendments set forth
herein, no Event of Default or Default exists; and (v) that the representations
and warranties of the Borrowers under the Credit Agreement are reaffirmed as of
the Delivery Date, subject only to variance therefrom acceptable to the
Administrative Agent.
B. Each Guarantor's secretary or treasurer shall have certified to each
Lender (i) a copy of the resolutions duly adopted by that Guarantor's board of
directors in respect of this Amendment and the other Credit Documents
contemplated hereby; (ii) true and correct copies of that Guarantor's current
Charter or Articles of Incorporation and By-laws or Code of Regulations (or, if
applicable, that no modifications thereof have been made since they were most
recently certified to the Lenders); (iii) the names and true signatures of the
officers of that Guarantor authorized to sign this Amendment on behalf of that
Guarantor; and (iv) that, after giving effect to the amendments set forth
herein, no Event of Default or Default exists.
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C. Counsel to the Borrowers and the Guarantors shall have delivered to
each Lender a written opinion as to the due authorization, execution, delivery
and enforceability of this Fifth Amendment and the other documents described in
paragraphs E through H, inclusive, of this Section 3, in form and substance
satisfactory to the Administrative Agent; provided that no opinion with respect
to the enforceability of any document described in paragraph G below shall be
required.
D. The Borrowers shall have paid to the Administrative Agent in
immediately available funds, for the ratable benefit of the Lenders, an
amendment fee in the amount of One Hundred Ninety-two Thousand Five Hundred
Dollars ($192,500).
E. All of the parties to the Collateral Agency Agreement shall have
executed and delivered to Administrative Agent a Third Amendment to
Intercreditor and Collateral Agency Agreement in the form of Attachment 3
hereto.
F. Each of the Guarantors shall have executed an amendment of its
Guaranty and of the Subsidiary Security Agreement in the form of, respectively,
Attachment 4 and Attachment 5 hereto.
G. Each Guarantor that has granted to the Collateral Agent a Mortgage
shall have executed and delivered to the Administrative Agent an amendment to
such Mortgage in the form of Attachment 6 hereto and shall, at the Borrowers'
expense, accompany such amendment with an endorsement to the ALTA loan policy of
title insurance in respect of such Mortgage in form and substance reasonably
satisfactory to the Administrative Agent.
H. Brush International, Inc. shall have executed and delivered to the
Administrative Agent a confirmation of the Foreign Subsidiary Pledge Agreement
in the form of Attachment 7 hereto.
I. All of the parties to the Synthetic Lease shall have executed and
delivered an amendment thereto in form and substance satisfactory to the
Administrative Agent, and all
13
conditions to its effectiveness shall have been satisfied.
J. The Borrowers shall have delivered or caused to be delivered such
other documents as Administrative Agent or any of the Lenders may reasonably
request.
3. No Other Modifications; Same Indebtedness. Except as expressly
provided in this Fifth Amendment, all of the terms and conditions of the Credit
Agreement and the other Credit Documents remain unchanged and in full force and
effect. The modifications effected by this Fifth Amendment and by the other
instruments contemplated hereby shall not be deemed to provide for or effect a
repayment and re-advance of any of the Loans now outstanding, it being the
intention of both the Borrowers and the Lenders hereby that the indebtedness
owing under the Credit Agreement, as amended by this Fifth Amendment, be and
hereby is the same Indebtedness as that owing under the Credit Agreement
immediately prior to the effectiveness hereof.
4. Confirmation of Obligations; Release.
(a) Each Borrower hereby confirms that the Borrowers are indebted to
the Lenders, the Swing Line Lender and the Letter of Credit Issuer, as their
interests may appear, for the Loans evidenced by the Notes and for the Letters
of Credit in the amounts and as of the date set forth in Recital C, above, and
are also obligated to the Lenders, the Swing Line Lender, the Administrative
Agent and the Letter of Credit Issuer in respect of other Obligations as set
forth in the Credit Agreement and the other Credit Documents. Each Borrower
further acknowledges and agrees that as of the date hereof, it has no claim,
defense or set-off right against any Lender, the Swing Line Lender, the
Administrative Agent or the Letter of Credit Issuer of any nature whatsoever,
whether sounding in tort, contract or otherwise, and as of the date hereof has
no claim, defense or set-off of any nature whatsoever to the enforcement by the
Lenders, the Swing Line Lender, the Administrative Agent and the Letter of
Credit Issuer of the full amount of the Loans and other
14
Obligations of the Borrowers under the Credit Agreement and the other Credit
Documents.
(b) Notwithstanding the foregoing, to the extent that any claim,
cause of action, defense or set-off against any Lender, the Swing Line Lender,
the Administrative Agent or the Letter of Credit Issuer or the enforcement by
any of them of the Credit Agreement, any Note, any other Credit Document, of any
nature whatsoever, known or unknown, fixed or contingent, does nonetheless exist
or may exist on the date hereof, in consideration of the Lenders' and the
Administrative Agent's entering into this Fifth Amendment, each Borrower
irrevocably and unconditionally waives and releases fully each and every such
claim, cause of action, defense and set-off which exists or may exist on the
date hereof.
5. Governing Law; Binding Effect. This Fifth Amendment shall be
governed by and construed in accordance with the laws of the State of Ohio and
shall be binding upon and inure to the benefit of the Borrowers, the Lenders,
the Administrative Agent and the Swing Line Lender and their respective
successors and assigns.
6. Counterparts. This Fifth Amendment may be executed in separate
counterparts, each of which shall be deemed to be an original, and all of which
together shall be deemed a fully executed agreement.
7. Miscellaneous.
A. The Borrowers jointly and severally agree to pay on demand all costs
and expenses of the Lenders and the Administrative Agent, including reasonable
attorneys' fees and expenses, incurred in connection with the preparation,
execution and delivery of this Fifth Amendment and the other documents
contemplated hereby, including, without limitation, the Third Amendment to
Intercreditor and Collateral Agency Agreement.
B. This Fifth Amendment is executed in accordance with and subject to
Section 12.12
15
of the Credit Agreement. The execution, delivery and performance by the
Lenders, the Swing Line Lender and the Administrative Agent of this Fifth
Amendment shall not constitute, or to be deemed to be or construed as, a waiver
of any right, power or remedy of the Lenders, the Swing Line Lender or the
Administrative Agent, or a waiver of any provision of the Credit Agreement,
except as expressly stated herein. None of the provisions of this Fifth
Amendment shall constitute, or to be deemed to be or construed as, a waiver of
any Event of Default or any Default.
8. Waiver of Jury Trial. EACH OF THE PARTIES TO THIS FIFTH AMENDMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AMENDMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS FIFTH AMENDMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATION IN THIS SECTION.
[No additional provisions are on this page;
the next page is the signature page.]
16
IN WITNESS WHEREOF, the Borrowers, the Lenders, the Administrative
Agent and the Swing Line Lender have hereunto set their hands as of the date
first above written.
BORROWERS: ADMINISTRATIVE AGENT:
--------- --------------------
BRUSH XXXXXXX INC. NATIONAL CITY BANK,
AS ADMINISTRATIVE AGENT
By:_______________________________ By:_________________________________
----------------, -------------- ----------------, --------------
BRUSH ENGINEERED MATERIALS INC.
By:________________________________
----------------, ---------------
[Signatures continued on the following page]
17
LENDERS:
FIFTH THIRD BANK, an Ohio banking
corporation, f/k/a FIFTH THIRD BANK,
NORTHEASTERN OHIO
By: ______________________________
----------------, --------------
NATIONAL CITY BANK, as Lender
and Swing Line Lender
By: ______________________________
----------------, --------------
XXXXXX TRUST AND SAVINGS BANK
By: ______________________________
----------------, --------------
U.S. BANK NATIONAL ASSOCIATION,
f/k/a Firstar Bank, N.A.
By: ______________________________
----------------, --------------
MANUFACTURERS AND TRADERS
TRUST COMPANY
By: ______________________________
----------------, --------------
LASALLE BANK NATIONAL ASSOCIATION
By: ______________________________
----------------, --------------
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