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Exhibit 10.32
FIFTH AMENDMENT TO REVOLVING CREDIT
AND LETTER OF CREDIT ISSUANCE AGREEMENT
This FIFTH AMENDMENT TO REVOLVING CREDIT AND LETTER OF CREDIT ISSUANCE
AGREEMENT is made as of this 10th day of December, 1999 (the "Fifth Amendment")
and entered into by and among THE CARBIDE/GRAPHITE GROUP, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower"),
the financial institutions party thereto as lenders (collectively referred to
herein as the "Lenders"), PNC BANK, NATIONAL ASSOCIATION, in its capacity as the
issuer of letters of credit (in such capacity, the "L/C Issuer") and PNC BANK,
NATIONAL ASSOCIATION, in its capacity as agent for the Lenders and the L/C
Issuer (in such capacity, the "Agent") and further amends that certain Revolving
Credit and Letter of Credit Issuance Agreement dated as of September 25, 1997,
as previously amended by that certain First Amendment to Revolving Credit and
Letter of Credit Issuance Agreement dated as of October 28, 1997 (the "First
Amendment"), the Second Amendment to Revolving Credit Agreement and Waiver dated
as of April 30, 1998 (the "Second Amendment"), the Third Amendment to Revolving
Credit and Letter of Credit Issuance Agreement and Amendment to Revolving Credit
Notes dated as of April 30, 1999 (the "Third Amendment"), the Fourth Amendment
to Revolving Credit and Letter of Credit Issuance Agreement dated as of
September 8, 1999 (the "Fourth Amendment") (the Revolving Credit and Letter of
Credit Issuance Agreement, as amended by the First Amendment, the Second
Amendment, the Third Amendment, and the Fourth Amendment is hereinafter referred
to as the "Original Credit Agreement").
WITNESSETH
WHEREAS, due to the implementation of a plan of inventory reduction by
the Borrower, the Borrower has requested certain amendments to the terms of the
Original Credit Agreement to accommodate such plan; and
WHEREAS, the Agent, the Lenders and the L/C Issuer have agreed to make
such amendments upon the terms and conditions 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 ORIGINAL CREDIT AGREEMENT
SECTION 1.01 AMENDMENTS TO SECTION 1.01 OF THE ORIGINAL CREDIT
AGREEMENT. The following defined terms and the definitions therefor are hereby
added to Section 1.01 of the Original Credit Agreement and inserted in correct
alphabetical order:
Commodity Hedge shall mean any contract or arrangement; the
purpose or substance of which is to protect the Borrower from the risk
of any change in the price of commodities.
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Fifth Amendment shall mean the Fifth Amendment to Revolving
Credit and Letter of Credit Issuance Agreement dated as of the Fifth
Amendment Effective Date.
Fifth Amendment Effective Date shall mean December 10, 1999.
Fifth Amendment Fee shall mean a fee equal to One Hundred
Fifty Thousand Dollars ($150,000), payable pro rata, based on each
Lender's Commitment, to each Lender who approves the Fifth Amendment on
or before December 10, 1999.
Foreign Exchange Hedge shall mean any contract or arrangement;
the purpose or substance of which is to protect the Borrower from the
risk of any change in the price or value of foreign currencies.
SECTION 1.02 MODIFICATION OF EXISTING DEFINED TERM. The definition of
"Lender Obligations" is amended by adding in subsection (iv) thereof,
immediately after the term "Interest Rate Hedge Agreement", the phrase "Foreign
Exchange Hedge or Commodity Hedge".
SECTION 1.03 MODIFICATION OF EXISTING ORIGINAL CREDIT AGREEMENT. The
following Sections of the Original Credit Agreement are amended and restated to
read as follows:
(i) The penultimate sentence of Section 2.01(a) is amended and restated
as follows:
The aggregate amount of the Revolving Credit Commitments prior to
January 31, 2000 shall be $150,000,000, and on and after that date
$140,000,000.
(ii) Add at the conclusion of Subsection 2.03 the following additional
paragraph.
Notwithstanding the foregoing, during the period from the
Fifth Amendment Effective Date to and including October 31, 2000, the
Applicable Commitment Fee for each Lender's Revolving Credit Commitment
shall be 0.375%. Thereafter, so long as, on October 31, 2000, the
Borrower's ratio of EBITDA to Cash Interest Expense (determined on the
basis of the four most recently completed Fiscal Quarters) is equal to
or greater than 3.5 to 1.0, the Applicable Commitment Fee shall be
determined in accordance with the above stated grid. If the Borrower
does not meet or exceed the ratio set forth in the preceding sentence on
October 31, 2000, the Applicable Commitment Fee shall remain at 0.375%
until the Fiscal Quarter end when the Borrower achieves such ratio.
(iii) Add at the conclusion of Subsection 2.08(b)(ii) the following
additional paragraph.
Notwithstanding the foregoing, during the period from the
Fifth Amendment Effective Date to and including October 31, 2000, the
Applicable Euro-Rate Margin on all Revolving Credit Loans outstanding
shall be 2.25%. Thereafter, so long as, on October 31, 2000, the
Borrower's ratio of EBITDA to Cash Interest Expense (determined on the
basis of the four most recently completed Fiscal Quarters) is equal to
or greater than 3.5
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to 1.0, the Applicable Euro-Rate Margin shall be determined in
accordance with the above stated grid. If the Borrower does not meet or
exceed the ratio set forth in the preceding sentence on October 31,
2000, the Applicable Euro-Rate Margin shall remain at 2.25% until the
Fiscal Quarter end when the Borrower achieves such ratio.
(iv) Add at the conclusion of Subsection 2.17(b) the following
additional paragraph.
Notwithstanding the foregoing, during the period from the
Fifth Amendment Effective Date to and including October 31, 2000, the
Applicable Letter of Credit Fee for each Letter of Credit shall be
2.25%. Thereafter, so long as, on October 31, 2000, the Borrower's ratio
of EBITDA to Cash Interest Expense (determined on the basis of the four
most recently completed Fiscal Quarters) is equal to or greater than 3.5
to 1.0, the Applicable Letter of Credit Fee shall be determined in
accordance with the above stated grid. If the Borrower does not meet or
exceed the ratio set forth in the preceding sentence on October 31,
2000, the Applicable Letter of Credit Fee shall remain at 2.25% until
the Fiscal Quarter end when the Borrower achieves such ratio.
(v) Section 7.12 shall be amended and restated in its entirety as
follows:
7.12. Minimum Consolidated Tangible Net Worth. The Borrower
will not at any time (i) after December 10, 1999, through and including
January 31, 2000, permit its Consolidated Tangible Net Worth to be less
than an amount equal to $76,500,000 (less the amount of any purchases
of treasury stock up to $1,300,000 since November 1, 1999); (ii)
$75,500,000 (less the amount of any purchases of treasury stock up to
$2,600,000 since November 1, 1999) from February 1, 2000, through and
including April 30, 2000; and (iii) thereafter the sum of $75,500,000
(less the amount of any purchases of treasury stock up to $4,300,000
between November 1, 1999 and July 31, 2000), plus 50% of the positive
net income for each Fiscal Quarter of the Borrower and its Subsidiaries
ending after May 1, 2000, and determined on a consolidated basis in
accordance with GAAP consistently applied, plus (iv) all increases to
equity from the issuance by the Borrower after the Fifth Amendment
Effective Date of further equity securities or other equity capital
investments.
(vi) Section 7.13 shall be amended and restated in its entirety as
follows:
7.13. Interest Coverage. The Borrower shall not permit its
ratio, measured on a rolling four Fiscal Quarter basis, of EBITDA to
Cash Interest Expense as of the end of each Fiscal Quarter to be less
than (i) 3.25 to 1.0 as of the Fiscal Quarter ending January 31, 2000,
(ii) 2.75 to 1.0 as of the Fiscal Quarter ending Xxxxx 00, 0000, (xxx)
3.0 to 1.0 as of the Fiscal Quarters ending July 31, 2000 and October
31, 2000, (iv) 3.25 to 1.0 as of the Fiscal Quarters ending January 31,
2001 and April 30, 2001, and (v) 3.50 to 1.0 as of the end of each
Fiscal Quarter thereafter beginning with the Fiscal Quarter ending July
31, 2001, provided, however, that for purposes of this Section 7.13,
the Special Reserve may be included in calculating the Borrower's
EBITDA by treating it as an extraordinary or unusual loss pursuant to
item (a)(v) of the definition of EBITDA contained in Section 1.01
hereof; and provided further, however, in determining compliance with
the above financial ratio as of the Fiscal Quarter ending July 31,
2000, the quarterly results of EBITDA and Cash Interest
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Expense for such quarter shall be annualized; as of the Fiscal Quarter
ending October 31, 2000, the quarterly results for the last two
quarters shall be annualized; and as of the Fiscal Quarter ending
January 31, 2001, the quarterly results for the last three quarters
shall be annualized; and for each Fiscal Quarter ending thereafter
compliance shall be determined on a rolling four Fiscal Quarter basis.
(vii) Section 7.14 shall be amended and restated in its entirety as
follows:
7.14 Leverage Ratio. The Borrower shall not permit its Consolidated
Total Indebtedness to EBITDA Ratio during the applicable period or
periods set forth below to be greater than the ratio set forth opposite
each such period or periods:
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CONSOLIDATED TOTAL
PERIOD INDEBTEDNESS TO EBITDA RATIO
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From December 10, 1999 through January 31, 4.50 to 1.0
2000
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From February 1, 2000 through April 30, 2000 4.75 to 1.0
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From May 1, 2000 through April 29, 2002 3.75 to 1.00
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From April 30, 2002 through April 29, 2003 3.50 to 1.00
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On and after April 30, 2003 3.00 to 1.00
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In determining compliance with this Section 7.14, the Special Reserve
may be included in calculating the Borrower's EBITDA by treating it as
an extraordinary or unusual loss pursuant to item (a)(v) of the
definition of EBITDA contained in Section 1.01 hereof; provided,
however, in determining compliance with the above financial ratio as of
the Fiscal Quarter ending July 31, 2000, the quarterly results for such
quarter shall be annualized; as of the Fiscal Quarter ending October
31, 2000, the quarterly results for the last two quarters shall be
annualized; and as of the Fiscal Quarter ending January 31, 2001, the
quarterly results for the last three quarters shall be annualized; and
for each Fiscal Quarter ending thereafter compliance shall be
determined on a rolling four Fiscal Quarter basis.
SECTION 1.04 ADDITIONAL SECTION TO EXISTING ORIGINAL CREDIT AGREEMENT.
Add an additional Section 7.18 to the Agreement as follows:
Section 7.18 Stock Repurchase. From the Fifth Amendment
Effective Date to July 31, 2000, the Borrower shall not purchase or
repurchase any of the Borrower's equity securities from its
shareholders except for, on a non-cumulative basis:
(a) $1,300,000 during the Fiscal Quarter ending
January 31, 2000;
(b) up to $2,600,000 from November 1, 1999 to and
including April 30, 2000, but only so long as the Revolving Credit Loan
(not including any Letters of
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Credit outstanding) shall be less than $113,000,000, after taking into
account any uses of the Revolving Credit Loan to make such purchases;
and
(c) up to $4,300,000 from November 1, 1999 to and
including July 31, 2000, but only so long as the Revolving Credit Loan
(not including any Letters of Credit outstanding) shall be less than
$107,000,000, after taking into account any uses of the Revolving
Credit Loan to make such purchases.
SECTION 1.05 NO OTHER AMENDMENTS. Except as specifically set forth
therein, the amendments to the Original Credit Agreement set forth in Sections
1.01 through 1.04 above do not either implicitly or explicitly alter, waive or
amend, the provisions of the Original Credit Agreement. The amendments set forth
in Sections 1.01 through 1.04 hereof do not 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 Lenders and the
Agents under the Original Credit Agreement with respect to any such violation.
ARTICLE II
BORROWER'S SUPPLEMENTAL REPRESENTATIONS
SECTION 2.01. INCORPORATION BY REFERENCE. As an inducement to the
Agent, the Lenders, and the L/C Issuer to enter into this Fifth Amendment, the
Borrower hereby repeats herein for the benefit of the Agent, the Lenders, and
the L/C Issuer the representations and warranties made by the Borrower in
Article IV of the Original Credit Agreement, as amended hereby, except that, for
purposes hereof such representations and warranties shall be deemed to extend to
and cover this Fifth Amendment.
ARTICLE III
CONDITIONS PRECEDENT
SECTION 3.01 CONDITIONS PRECEDENT. Each of the following shall be a
condition precedent to the effectiveness of this Fifth Amendment:
(i) The Agent shall have received, on or before the Fifth
Amendment Effective Date, the following items, each, unless otherwise indicated,
dated on or before the Fifth Amendment Effective Date and in form and substance
satisfactory to the Agent and its special counsel, Xxxxxx Xxxxxxxxx, P.C.:
(A) A duly executed counterpart original of this
Fifth Amendment executed by the Required Lenders, the Agent and the Borrower;
(B) A certificate from the Secretary of the Borrower
certifying that the Articles of Incorporation and Bylaws of the Borrower
previously delivered to the Agent are true, complete, and correct.
(C) Payment of the Fifth Amendment Fee to the Agent
for the pro rata benefit of the Lenders who execute this Fifth Amendment on or
by December 10, 1999;
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(D) Such other instruments, documents and opinions of
counsel as the Agent shall reasonably require, all of which shall be
satisfactory in form and content to the Agent and its special counsel, Xxxxxx
Xxxxxxxxx, P.C.
(ii) The following statements shall be true and correct on the
Fifth Amendment Effective Date and the Agent shall have received a certificate
signed by an Authorized Officer of the Borrower, dated the Fifth Amendment
Effective Date, stating that:
(A) the representations and warranties made pursuant
to Section 2.01 of this Fifth Amendment and in the other Loan Documents, as
amended hereby, are true and correct on and as of the Fifth Amendment Effective
Date as though made on and as of such date;
(B) no petition by or against the Borrower has at any
time been filed under the United States Bankruptcy Code or under any similar
act;
(C) taking into account the amendments set forth in
this Fifth Amendment, no Event of Default or event which with the giving of
notice, the passage of time or both would become an Event of Default has
occurred and is continuing, or would result from the execution of or performance
under this Fifth Amendment;
(D) taking into account the amendments set forth in
this Fifth Amendment, no Material Adverse Change has occurred which has not been
disclosed to the Agent and the Lenders; and
(E) taking into account the amendments set forth in
this Fifth Amendment, the Borrower has in all material respects performed all
agreements, covenants and conditions required to be performed on or prior to the
date hereof under the Original Credit Agreement and the other Loan Documents.
ARTICLE IV
GENERAL PROVISIONS
SECTION 4.01 RATIFICATION OF TERMS. Except as expressly amended by this
Fifth Amendment, the Original Credit Agreement and each and every
representation, warranty, covenant, term and condition contained therein is
specifically ratified and confirmed. The Borrower hereby confirms that any
collateral for the Lender Obligations, including but not limited to
encumbrances, Liens, security interests, mortgages and pledges granted by the
Borrower or third parties, shall continue unimpaired and in full force and
effect. THE BORROWER EXPRESSLY RATIFIES AND CONFIRMS THE WAIVER OF JURY TRIAL
PROVISION CONTAINED IN THE ORIGINAL CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
SECTION 4.02 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 Original
Credit Agreement, any of the other Loan Documents or the transactions
contemplated thereby may refer to the Original Credit 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 Amendment Effective Date, all references in the Original Credit
Agreement and each
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of the other Loan Documents to the "Agreement" shall be deemed to be references
to the Original Credit Agreement as amended hereby.
SECTION 4.03 INCORPORATION INTO ORIGINAL CREDIT AGREEMENT. This Fifth
Amendment is deemed incorporated into the Original Credit 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 Original Credit
Agreement, the terms and provisions hereof shall control.
SECTION 4.04 COUNTERPARTS. This Fifth Amendment may be executed in
different counterparts, each of which when executed by the Borrower and the
Agent, the Lenders, and the L/C Issuer shall be regarded as an original, and all
such counterparts shall constitute one Fifth Amendment.
SECTION 4.05 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 Original Credit
Agreement, as amended hereby.
SECTION 4.06 TAXES. The Borrower shall pay any and all stamp and other
taxes and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Fifth Amendment and such other
documents and instruments as are delivered in connection herewith and agrees to
save the Agent, the Lenders, and the L/C Issuer harmless from and against any
and all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes and fees.
SECTION 4.04 COSTS AND EXPENSES. The Borrower will pay all costs and
expenses of the Agent (including, without limitation, the reasonable fees and
the disbursements of the Agent's special counsel, Xxxxxx Xxxxxxxxx, 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 4.08 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 PENNSYLVANIA WITHOUT REGARD TO THE PROVISIONS
THEREOF REGARDING CONFLICTS OF LAW.
SECTION 4.09 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto, with the intent to be legally
bound hereby, have caused this Fifth Amendment to Revolving Credit and Letter of
Credit Issuance 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.
ATTEST: BORROWER:
THE CARBIDE/GRAPHITE GROUP,
INC., a Delaware corporation
/s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxxx (SEAL)
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Treasurer Title: VP-Finance and CFO
AGENT AND L/C ISSUER:
PNC BANK, NATIONAL ASSOCIATION
By /s/ Xxxx X. Xxxxxxxxxx (SEAL)
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
LENDERS:
REVOLVING CREDIT PNC BANK, NATIONAL ASSOCIATION
COMMITMENT: $26,000,000.00
RATABLE SHARE: 17.33% By /s/ Xxxx X. Xxxxxxxxxx (SEAL)
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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REVOLVING CREDIT NATIONAL CITY BANK OF
COMMITMENT: $18,000,000.00 PENNSYLVANIA
RATABLE SHARE: 12% By /s/ Xxxxxxx X. Xxxxxx (SEAL)
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
REVOLVING CREDIT THE FIRST NATIONAL BANK OF
COMMITMENT: $13,000,000.00 CHICAGO
RATABLE SHARE: 8.66% By /s/ Xxxxxxx X. XxXxxxxxx (SEAL)
Name: Xxxxxxx X. XxXxxxxxx
Title: First Vice President
REVOLVING CREDIT FIRST UNION NATIONAL BANK
COMMITMENT: $18,000,000.00
RATABLE SHARE: 12% By______________________(SEAL)
Name:
Title:
REVOLVING CREDIT KEYBANK, NATIONAL ASSOCIATION
COMMITMENT: $13,000,000.00
RATABLE SHARE: 8.66% By /s/ Xxxxxxx X. Xxxx, Xx. (SEAL)
Name: Xxxxxxx X. Xxxx, Xx.
Title: Portfolio Officer
REVOLVING CREDIT STANDARD CHARTERED BANK
COMMITMENT: $13,000,000.00
RATABLE SHARE: 8.66% By /s/ Xxxxxx Xxxxxxxx (SEAL)
Name: Xxxxxx Xxxxxxxx
Title: Vice President
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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REVOLVING CREDIT MELLON BANK, N.A.
COMMITMENT: $13,000,000.00
RATABLE SHARE: 8.66% By /s/ Xxxxxx X. Xxxxxxxxxxx (SEAL)
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Assistant Vice President
REVOLVING CREDIT BANK OF AMERICA, N.A.
COMMITMENT: $18,000,000.00
RATABLE SHARE: 12%
By__________________________(SEAL)
Name:
Title:
REVOLVING CREDIT THE CHASE MANHATTAN BANK
COMMITMENT: $18,000,000.00
RATABLE SHARE: 12% By /s/ Xxxx Xxxxxx (SEAL)
Name: Xxxx Xxxxxx
Title: Vice President
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