EXHIBIT 10.17
EIGHTH AMENDMENT TO AND WAIVER
UNDER FIVE-YEAR CREDIT AGREEMENT
This EIGHTH AMENDMENT TO AND WAIVER UNDER FIVE-YEAR CREDIT AGREEMENT (this
"Amendment") made and entered into as of December 19, 2003, by and among
INTERMET CORPORATION, a Georgia corporation ("Intermet"), THE BANK OF NOVA
SCOTIA, a Canadian chartered bank ("Scotia Capital"), acting through its Atlanta
Agency, the other banks and lending institutions listed on the signature pages
hereof, and any assignees of Scotia Capital or such other banks and lending
institutions which become "Lenders" as provided in the Amended Agreement (as
defined below) (Scotia Capital, and such other banks, lending institutions, and
assignees referred to collectively herein as the "Lenders"), and Scotia Capital,
in its capacity as administrative and collateral agent for the Lenders and each
successor administrative or collateral agent for such Lenders as may be
appointed from time to time pursuant to Article IX of the Amended Agreement (the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, Intermet, the Lenders and the Administrative Agent are parties to
that certain $300,000,000 Five-Year Credit Agreement, dated as of November 5,
1999, as amended through March 19, 2003 (as so amended, the "Existing
Agreement," capitalized terms used herein but not otherwise defined herein
having the same respective meanings as in the Existing Agreement); and
WHEREAS, the parties to the Existing Agreement wish to amend the Existing
Agreement (the Existing Agreement as amended by this Amendment being the
"Amended Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, Intermet, the Required Lenders and the Administrative Agent
agree, upon the terms and subject to the conditions set forth herein, as
follows:
SECTION 1. AMENDMENTS. Effective on the Eighth Amendment Date (as defined
below), the Existing Agreement shall be amended as follows:
(a) Definition of Applicable Margin. The definition of "Applicable Margin"
in Section 1.01 of the Existing Agreement shall be amended in its entirety to
read as follows, but only from the Eighth Amendment Date to May 31, 2004, at
which time such definition shall revert to the current definition in the
Existing Agreement:
"'Applicable Margin' shall mean, with respect to all outstanding
Eurodollar Advances and Letter of Credit Obligations, 3.500%.".
(b) Definition of Base Rate Margin. The definition of "Base Rate Margin"
in Section 1.01 of the Existing Agreement shall be amended in its entirety to
read as follows, but only from
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the Eighth Amendment Date to May 31, 2004, at which time such definition shall
revert to the current definition in the Existing Agreement:
"'Base Rate Margin' shall mean, with respect to all outstanding Base
Rate Advances, 2.500%.".
(c) Definition of Confidential Information. A definition of "Confidential
Information" shall be added to Section 1.01 of the Existing Agreement as
follows:
"'Confidential Information' shall mean all information with respect
to the Borrower and its Affiliates that the Borrower furnishes after the
Eighth Amendment Date to the Administrative Agent, Collateral Agent or to
any Lender which is designated in writing to the recipient thereof as
confidential, but does not include any such information that is or becomes
generally available to the public or that is or becomes available to the
Agent or such Lender from a source other than the Borrower or any of its
Affiliates.".
(d) Definition of Consolidated EBITDA. The definition of "Consolidated
EBITDA" in Section 1.01 of the Existing Agreement shall be amended by (x)
deleting the proviso at the end thereof in its entirety and (y) substituting the
following therefor:
"provided that the Borrower may add back to Consolidated EBITDA any
non-cash charges incurred in connection with plant closings,
restructurings and downsizings which do not exceed $30,000,000 in the
aggregate and any non-cash charges relating to the carrying value of
goodwill or deferred tax assets.".
(e) Definition of Eighth Amendment Date. A definition of "Eighth Amendment
Date" shall be added to Section 1.01 of the Existing Agreement as follows:
"'Eighth Amendment Date' shall mean the 'Eighth Amendment Date'
under and as defined in the Eighth Amendment to this Agreement dated as of
December 19, 2003 among the Borrower, the Administrative Agent and the
Required Lenders, and consented to by the Guarantors.".
(f) Section 6.07. Section 6.07 of the Existing Agreement shall be amended
by (x) deleting the word "and" at the end of clause (n) thereof, (y) deleting
the period at the end of clause (o) thereof and substituting "; and" therefor
and (z) adding the following clause (p):
"(p) Monthly Financial Statements. As soon as available and in any
event within 40 days after the end of the month of December 2003, and
within 15 days after the end of the months of January, February, March and
April 2004, balance sheets of the Consolidated Companies as at the end of
such calendar month presented on a consolidated basis and the related
statements of income, shareholders' equity, and cash flows of the
Consolidated Companies for such calendar month and for the portion of the
Borrower's Fiscal Year ended at the end of such calendar month, presented
on a consolidated basis setting forth in each case in comparative form the
figures for the corresponding calendar month and the corresponding portion
of the Borrower's previous Fiscal Year, all in reasonable detail and
certified by the chief financial officer or principal
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accounting officer of the Borrower that such financial statements fairly
present in all material respects the financial condition of the
Consolidated Companies as at the end of such calendar month on a
consolidated basis, and the results of operations and statements of cash
flows of the Consolidated Companies for such calendar month and such
portion of the Borrower's Fiscal Year, in accordance with GAAP
consistently applied (subject to normal year-end audit adjustments and the
absence of certain footnotes).".
(g) Fixed Charge Coverage Ratio. Section 6.08(a) of the Existing Agreement
shall be amended in its entirety to read as follows:
"(a) Fixed Charge Coverage Ratio. Maintain as of the last day of
each Fiscal Quarter set forth below, a Fixed Charge Coverage Ratio equal
to or greater than the Fixed Charge Coverage Ratio set forth opposite such
Fiscal Quarter:
Fiscal Quarter Fixed Charge Coverage Ratio
-------------- ---------------------------
4th Fiscal Quarter 2003 > 1.25:1.0
-
1st Fiscal Quarter 2004 and each
Fiscal Quarter thereafter > 2.00:1.0".
-
(h) Consolidated EBITDA to Consolidated Interest Expense Ratio. Section
6.08(b) of the Existing Agreement shall be amended in its entirety to read as
follows:
"(b) Consolidated EBITDA to Consolidated Interest Expense. Maintain
as of the last day of each Fiscal Quarter set forth below, a minimum ratio
of Consolidated EBITDA to Consolidated Interest Expense, calculated for
the immediately preceding four Fiscal Quarters, of equal to or greater
than the ratio set forth opposite such Fiscal Quarter:
Ratio of
Consolidated
EBITDA
to
Consolidated
Fiscal Quarter Interest Expense
-------------- ----------------
4th Fiscal Quarter 2003 > 2.00:1.0
-
1st Fiscal Quarter 2004 > 2.85:1.0
-
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2nd Fiscal Quarter 2004
and each Fiscal Quarter
thereafter > 3.00:1.0".
-
(i) Funded Debt to Consolidated EBITDA Ratio. Section 6.08(c) of the
Existing Agreement shall be amended in its entirety to read as follows:
"(c) Funded Debt to Consolidated EBITDA. Maintain as of the last day
of each Fiscal Quarter set forth below, a maximum ratio of Funded Debt to
Consolidated EBITDA, calculated for the immediately preceding four Fiscal
Quarters, of less than or equal to the ratio set forth opposite such
Fiscal Quarter:
Ratio of
Funded Debt
to Consolidated
Fiscal Quarter EBITDA
-------------- ------
4th Fiscal Quarter 2003 < 4.50:1.0
-
1st Fiscal Quarter 2004
through 2nd Fiscal
Quarter 2004 < 3.50:1.0
-
3rd Fiscal Quarter 2004 and
each Fiscal Quarter
thereafter < 3.25:1.0
-
; provided that following the closing of the first Permitted
Receivables Purchase Facility, the numerator of such maximum ratio shall
be decreased by 0.50.".
(j) Confidentiality. The following Section 10.16 shall be added to the
Existing Agreement, to provide as follows:
"SECTION 10.16 CONFIDENTIALITY.
(a) The parties hereto expressly agree that the Administrative Agent
and each Lender (and each of their respective employees, representatives
or other agents) may disclose to all persons, without limitation of any
kind, the United States federal income "tax treatment" and "tax structure"
(in each case, within the meaning of Treasury Regulation Section 1.6011-4)
and all materials of any kind (including, without limitation, opinions or
other tax analyses) of the transaction contemplated hereby (if any) that
are provided to the Borrower or which the Borrower provides to the
Administrative Agent and the Lenders (or their respective representatives)
relating to such tax treatment and tax structure, except that, with
respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the
transaction as well as other information, this Section 10.16(a) shall only
apply to such portions of the
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document or similar item that relate to the United States federal income
tax treatment or tax structure of the transaction.
(b) Neither the Administrative Agent, the Collateral Agent or any
Lender shall disclose any Confidential Information to any other Person
without the prior written consent of the Borrower (which consent shall not
be unreasonably withheld), other than (i) to the Administrative Agent's,
the Collateral Agent's or such Lender's Affiliates and their officers,
directors, employees, agents, counsel and other advisors, (ii) as required
by any law, rule or regulation or judicial process, (iii) as requested or
required by any state, federal or foreign authority or examiner regulating
banks or banking or (iv) subject to an agreement containing provisions
similar to those of this clause (b), (x) to any Eligible Assignee of or
participant in, or to any prospective Eligible Assignee of or participant
in, any of the rights or obligations of the Administrative Agent, the
Collateral Agent or any Lender under this Agreement or (y) to any direct
or indirect contractual counterparty or prospective counterparty (or such
contractual counterparty's or prospective counterparty's agents, counsel
and other advisors). Any Person required to maintain the confidentiality
of Confidential Information as provided in this clause (b) shall be
considered to have complied with its obligation to do so if such Person
has exercised the same degree of care to maintain the confidentiality of
such Confidential Information as such Person would accord to its own
confidential information. The obligations of the Administrative Agent, the
Collateral Agent and each Lender under this clause (b) shall not extend
beyond the date which is one (1) year after the date of payment in full of
the Notes and all other Obligations.".
(k) Commitments. The Commitments of each of the Lenders shall be
proportionately and permanently reduced by $35,000,000 in the aggregate, and
Schedule 1 of the Existing Agreement shall be correspondingly amended in its
entirety to read as set forth in Schedule 1 attached hereto.
SECTION 2. WAIVER. The Administrative Agent and the Required Lenders
hereby waive the requirement that there has been no material change since the
date of the most recent financial statements of the Consolidated Companies
described in Section 5.14 of the Amended Agreement for purposes of Section
4.02(c) of the Amended Agreement if such a material change results solely by
reason of Consolidated EBITDA for the Fiscal Quarter ending December 31, 2003
being projected to be, and being, approximately $10,200,000.
SECTION 3. EFFECTIVENESS. The amendments set forth in Section 1 above and
the waiver set forth in Section 2 above shall become effective on the date (the
"Eighth Amendment Date") when the Administrative Agent shall have received each
of the following, all in form and substance satisfactory to the Administrative
Agent:
(a) This Amendment. Counterparts hereof executed by Intermet, the
Guarantors, the Administrative Agent and the Required Lenders.
(b) Fee Letter. A counterpart, executed by Intermet, of the fee letter
dated as of December 15, 2003 from Scotia Capital, along with all fees payable
thereunder.
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(c) Amendment Fee. An amendment fee equal to 0.25% times the Commitment
(as reduced pursuant to this Amendment) of each Lender which signs this
Amendment and returns a counterpart hereof executed by such Lender to Mayer,
Brown, Xxxx & Maw LLP, counsel to the Administrative Agent, no later than noon,
New York time, on December 19, 2003, payable to the Administrative Agent for the
account of each such Lender.
(d) Fees of Counsel. Evidence that Intermet shall have paid all
outstanding fees and expenses of counsel to the Administrative Agent, to the
extent invoiced.
(e) Other Instruments or Documents. Such other instruments or documents as
the Administrative Agent or any Lender may reasonably request in connection with
this Amendment.
SECTION 4. MISCELLANEOUS.
(a) To induce the Administrative Agent and the Required Lenders to enter
into this Amendment, Intermet represents and warrants to the Administrative
Agent and the Lenders that: (i) the representations and warranties contained in
the Credit Documents, as amended and waived by this Amendment, are true and
correct in all material respects as of the date hereof with the same effect as
though made on the date hereof; (ii) after giving effect to this Amendment, no
Default or Event of Default exists; (iii) this Amendment has been duly
authorized by all necessary corporate proceedings and duly executed and
delivered by Intermet and the Guarantors, and the Amended Agreement and each of
the other Credit Documents are the legal, valid and binding obligations of the
Credit Parties party thereto, enforceable against such Credit Parties in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors' rights or by general principles of equity; and
(iv) no consent, approval, authorization, order, registration or qualification
with any governmental authority, regulatory body or securities exchange is
required for, and in the absence of which would adversely affect, the legal and
valid execution and delivery or performance by Intermet and the Guarantors of
this Amendment or the performance by Intermet and the Guarantors of the Amended
Agreement or by any Credit Party of any other Credit Document to which it is a
party.
(b) This Amendment may be executed in any number of counterparts and by
the different parties on separate counterparts and each such counterpart shall
be deemed to be an original, but all such counterparts shall together constitute
one and the same Amendment.
(c) Except as specifically provided above, the Existing Agreement and the
other Credit Documents shall remain in full force and effect and are hereby
ratified and confirmed in all respects. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any right, power or remedy of the Administrative Agent or
the Lenders under the Existing Agreement or any of the other Credit Documents,
nor constitute a waiver or modification of any provision of any of the other
Credit Documents.
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(d) On and after the Eighth Amendment Date, each reference in the Existing
Agreement and related documents to "Five-Year Credit Agreement," "this
Agreement" or words of like import, shall, unless the context otherwise
requires, be deemed to refer to the Amended Agreement.
(e) Intermet agrees to pay on demand all reasonable costs and expenses
incurred at any time by the Administrative Agent (including the reasonable
attorney fees and expenses for the Administrative Agent) in connection with the
preparation, negotiation, execution and administration of this Amendment and all
other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith.
(f) This Amendment shall be binding upon and shall insure to the benefit
of the parties hereto and their respective successors and permitted assigns as
provided in the Amended Agreement.
(g) In case any provision in or obligation under this Amendment or the
other Credit Documents shall be invalid, illegal or unenforceable, in whole or
in part, in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired thereby.
(h) THIS AMENDMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE
SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).
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