FOURTH AMENDMENT TO CREDIT AGREEMENT
Agreement is made as of this 7th day of August, 1998 among STARMET
CORPORATION, a Massachusetts corporation (f/k/a Nuclear Metals, Inc.)
("StarMet"), STARMET POWDERS, LLC, a Delaware limited liability corporation
("Powders"), STARMET AEROCAST, LLC, a Delaware limited liability corporation
("AeroCast"), STARMET COMMERCIAL CASTINGS, LLC, a Delaware limited liability
corporation ("ComCast"), STARMET NMI CORPORATION, a Massachusetts corporation
("NMI"), STARMET CMI CORPORATION, a Delaware corporation (f/k/a Carolina Metals,
Inc.) ("CMI"), STARMET HOLDINGS CORPORATION, a Massachusetts corporation
("Holdings"), NMI FOREIGN SALES CORPORATION, a U.S. Virgin Island corporation
("FSC", and together with StarMet, Powders, AeroCast, ComCast, NMI, CMI and
Holdings, (the "Borrowers") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts chartered trust company ("Bank").
WHEREAS, the Borrowers and the Bank are parties to an Amended and
Restated Credit Agreement dated as of October 1, 1997 (as amended, the "Credit
Agreement"); and
WHEREAS, the parties have agreed to certain modifications;
NOW, THEREFORE, the parties agree as follows:
1. Section 1.01. The Credit. Section 1.01 of the Credit Agreement is
hereby amended by deleting the reference to "$9,550,000" in the third line and
"$9,550,000" in the last line and replacing both references with "$11,050,000".
2. Section 1.02(a). Amount. Section 1.02(a) of the Credit Agreement is
hereby amended by deleting the provision at the end of Section 1.02(a) and
substituting therefor the following:
"provided that the aggregate of all Advances outstanding at any time
less the maximum aggregate liability of the Borrowers under any
outstanding letters of credit issued prior to the date hereof or
pursuant to this Credit Agreement shall not exceed (i) $11,050,000
through September 30, 1998, (ii) $8,050,000 from October 1, 1998
through December 31, 1998, and (iii) $6,550,000 on January 1, 1999 and
thereafter (such amount as in effect from time to time may be referred
to as the "Maximum Credit")."
3. Section 1.02(b). Revolving Credit Agreement. Section 1.02(b) of the
Credit Agreement is hereby amended by adding the following at the end:
1
"As provided in Section 1.02(a), the Maximum Credit shall reduce from
$11,050,000 to $8,050,000 on October 1, 1998, and from $8,050,000 to
$6,550,000 on January 1, 1999, and any amount in excess of the Maximum
Credit as so reduced shall be paid on or before such dates".
4. Section 1.02(c). The Revolving Credit Note. Section 1.02(c) of the
Credit Agreement is hereby amended by deleting the first sentence in Section
1.02(c) in its entirety and substituting therefor the following:
"Amounts owed to Bank with respect to Advances made by Bank shall be
evidenced by Bank's books and records and may, at the request of the
Bank, be further evidenced by one or more revolving credit notes
(collectively, the "Revolving Credit Note"). As of the date of this
Fourth Amendment, the Advances are evidenced by an Amended and Restated
Revolving Credit Note dated as of the date of this Fourth Amendment in
the principal amount of $11,050,000, which replaces and supersedes all
prior revolving credit notes issued under this Credit Agreement (the
"Restated Note"). Any repayments of principal shall be applied to the
Revolving Credit Note in such order as the Bank in its discretion shall
determine.
5. Section 4.21. Tangible Capital Base. Section 4.21 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"The Tangible Capital Base of the Borrowers on a consolidated basis
shall be not less than $22,500,000 as of September 30, 1998, and
$22,500,000 plus an increase equal to the aggregate of 75% of the
Borrowers' Net Income for each fiscal quarter after September 30, 1998,
in which the Borrowers have positive net income (with no reduction for
fiscal quarters in which the Borrowers incur a loss) determined as of
the end of each fiscal quarter commencing December 31, 1998."
6. Section 4.22. Net Income. The first sentence of Section 4.22 of the
Credit Agreement is hereby amended in its entirety to read as follows:
2
"The Net Income of the Borrowers for the periods set forth below shall
be not less than the amounts set forth opposite such periods:
Period Net Income
------ ----------
Quarter ending September 30, 1998 ($500,000)
Quarter ending December 31, 1998
and thereafter $750,000."
7. Fees. The Borrowers shall pay a closing fee of $50,000 and shall
also pay to the Bank past due performance fees of $100,000 upon execution of
this Fourth Amendment, provided that payment of the $100,000 in past due
performance fees shall be deferred until October 1, 1998, and provided further
that payment of such $100,000 in performance fees shall be forever waived if
(but only if) on October 1, 1998, the Borrower is in compliance with all of its
covenants and agreements with the Bank.
8. Effectiveness. This Fourth Amendment to Credit Agreement shall
become effective upon (a) execution of this Fourth Amendment by the Borrowers
and the Bank, (b) execution by the Borrowers of the Restated Note substantially
in the form of Exhibit A attached hereto, (c) receipt by the Bank of evidence
satisfactory to the Bank that the Borrowers are authorized to execute this
Fourth Amendment and the Restated Note.
9. Miscellaneous.
(a) The Borrowers hereby confirm to the Bank that the
representations and warranties of the Borrowers set forth in Article II
of the Credit Agreement are true and correct as of the date hereof, as
if set forth herein in full.
(b) There is no Event of Default, and no condition which, with
the passage of time or giving of notice or both, would constitute an
Event of Default under the Credit Agreement except as amended or waived
in this Fourth Amendment.
(c) Except as set forth above and in the First Amendment dated
as of December 19, 1997, in the Second Amendment dated as of December
29, 1997, and in the Third Amendment dated as of June 11, 1998, the
Credit Agreement remains in full force and effect.
3
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to
Credit Agreement under seal as of the date first above written.
STARMET CORPORATION
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: VP Finance
STARMET POWDERS, LLC
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET AEROCAST, LLC
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET COMMERCIAL CASTINGS, LLC
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
Signatures continued on next page
0
XXXXXXX XXX CORPORATION
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET CMI CORPORATION
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET HOLDINGS CORPORATION
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
NMI FOREIGN SALES CORPORATION
By:/s/ Xxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STATE STREET BANK AND
TRUST COMPANY
By:/s/ Xxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxx, XX
Title: Vice President
5
EXHIBIT A
AMENDED AND RESTATED
REVOLVING CREDIT NOTE
$11,050,000 August 7, 1998
FOR VALUE RECEIVED, the undersigned, STARMET CORPORATION, STARMET
POWDERS, LLC, STARMET AEROCAST, LLC, STARMET COMMERCIAL CASTINGS, LLC, STARMET
NMI CORPORATION, STARMET CMI CORPORATION, STARMET HOLDINGS CORPORATION, NMI
FOREIGN SALES CORPORATION (the "Borrowers"), hereby jointly and severally,
promise to pay to the order of STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company ("Bank"), in lawful money of the United States of
America in immediately available funds at its office at 000 Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 the principal sum of ELEVEN MILLION FIFTY THOUSAND
DOLLARS ($11,050,000) or such lesser sum as may from time to time be outstanding
under the terms of the Credit Agreement between the Borrowers and Bank of even
date herewith, as amended, modified, supplemented and/or restated from time to
time (the "Credit Agreement").
The Borrowers promise to pay interest on the unpaid principal balance
at the rates and at the times provided in the Credit Agreement. This Note may be
prepaid only in accordance with the terms of the Credit Agreement.
The principal balance of this Note shall be reduced as provided in the
Credit Agreement and the remaining balance shall become due and payable on
February 28, 1999, and earlier upon the occurrence of an Event of Default (as
defined in the Credit Agreement). This Note replaces and supersedes all prior
revolving credit notes issued pursuant to the Credit Agreement. The Borrowers
agree to pay all reasonable legal fees and other costs of collection of this
Note.
No delay or omission on the part of the holder in exercising any right
hereunder shall operate as a waiver of such right, nor shall any waiver on one
occasion be deemed to be an amendment or waiver of any such right with respect
to any future occasion. The Borrowers hereby waive presentment, demand, protest
and notice of every kind and assents to any one or more indulgences, to any
substitution, exchange or release of collateral (if at any time there be
available collateral to the holder of this Note) and to the addition or release
of any other party or persons primarily or secondarily liable.
A-1
This Note shall be governed and construed under the laws of the
Commonwealth of Massachusetts and shall be deemed to be under seal.
STARMET CORPORATION
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: VP Finance
STARMET POWDERS, LLC
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET AEROCAST, LLC
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET COMMERCIAL CASTINGS, LLC
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
Signatures continued on next page
A-2
STARMET NMI CORPORATION
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET CMI CORPORATION
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
STARMET HOLDINGS CORPORATION
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
NMI FOREIGN SALES CORPORATION
WITNESS:
-------------------------------
By:
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Treasurer
A-3
