AMENDMENT TO CREDIT AGREEMENT
AGREEMENT made by and between The Chase Manhattan Bank,
successor by merger to The Chase Manhattan Bank, N.A., which was
successor by merger to Chase Lincoln First Bank, N.A., a banking
corporation organized under the laws of the State of New York
("Bank") and Exolon-ESK Company, a corporation organized and
existing under the laws of the State of Delaware ("Company").
WITNESSETH
The Company and the Bank are parties to a Credit Agreement
dated December 22, 1992, as amended by amendments dated
December 21, 1995, June 28, 1996 and September 30, 1996
(collectively "Agreement").
The Company and the Bank wish to amend the Agreement further
as set forth herein.
1. Definitions. Section 1.1 of the Agreement shall be
amended as follows:
a. The definition of "Conversion Date" shall be
deleted and replaced with the following:
"Conversion Date" - January 2, 2000, on which date
the Company may convert all or any portion of the Revolving
Credit to Term Loan A.
b. The following definition of "Debt" shall be added
to the agreement:
"Debt" - with respect to any Person:
(a) indebtedness of such Person for borrowed money;
(b) indebtedness for the deferred purchase of property or
services (except trade payables in the ordinary course of
business); (d) guaranties, endorsements (other than for
collection in the ordinary course of business) and other
contingent obligations to purchase, to provide funds for
payment, to supply funds to invest in any Person or
otherwise to insure a creditor against loss; (d) obligations
secured by any lien on property of such Person; and
(e) obligations of such Person under capital leases.
c. The definition of "Measurement Date" shall be
deleted and replaced with the following:
"Measurement Date" - The last day of each fiscal
quarter for the Company.
d. The following definition of "Funded Debt" shall be
added to the agreement:
"Funded Debt" - with respect to any Person, all
Debt of such Person for money borrowed which by its terms
matures more than one year from the date as of which such
Funded Debt is incurred, and any Debt of such Person for
money borrowed maturing within one year from such date which
is renewable or extendable at the option of the obligor to a
date beyond one year from such date (whether or not
theretofore renewed or extended), including, without
limitation, any indebtedness incurred pursuant to this
Credit Agreement and the Company's reimbursement obligations
pursuant to the Letter of Credit Reimbursement Agreement
between the Company and the Bank dated as of December 1,
1996, as the same may be amended or supplemented from time
to time.
2. Revolving Note. Exhibit C to the Agreement shall be
deleted and replaced with the form of Replacement Revolving Note
attached hereto.
3. Term Note. Section 2.1.e. of the Agreement shall be
amended so that the third sentence thereof is deleted and the
following shall be inserted in its place:
"The Term Note evidencing Term Loan A shall be payable
to the order of the Bank at 0000 Xxxx Xxxxx Xxxxx,
Xxxxxxx, Xxx Xxxx 00000, Attention: Middle Market
Banking Department in sixteen (16) quarterly principal
installments, each equal to the lesser of $250,000 or
2.5% of the principal balance of the Revolving Note
converted on the Conversion Date, commencing
February 1, 2000 and payable on the first day of each
May, August, November and February thereafter to and
including August 1, 2003 and one (1) final principal
installment on November 1, 2003 in an amount equal to
the then unpaid principal balance of the Term Note,
together with interest thereon."
4. Commitment Fee. The following Section 2.1.f. shall be
added to the Agreement:
2.1.f. Commitment Fee. The Company agrees to pay to
the Bank a fee computed at the rate of 15 basis points
(based on a 360 day year) for the period from and including
the date hereof and terminating on the Conversion Date. The
commitment fee payable to the Bank shall be computed on the
average daily unused portion of the total Revolving Credit
made available hereunder and shall be payable on the last
day of each of the Company's fiscal quarters commencing the
first such date subsequent to the date hereof and thereafter
until and including the Conversion Date.
5. Revolving Note Interest. Section 2.5.a of the
Agreement shall be deleted and the following Section 2.5.a shall
be inserted in its place:
2.5.a. Revolving Note. The Revolving Note shall bear
interest from the date hereof until maturity (whether by
acceleration or otherwise) on the balance of the principal
thereof from time to time unpaid at a per annum rate equal
to the Prime Rate plus any adjustment as determined
according to the formula set forth below.
The Company shall have the option, exercisable from
time to time to convert the interest rate on all or portions
of the principal of the Revolving Note in an amount not less
than $500,000 and divisible by $100,000 to LIBOR, plus the
adjustment as determined according to the formula set forth
below, provided that no Event of Default or Default exists.
To exercise the option to convert to LIBOR, the Company
shall comply with the LIBOR Procedure. Any portion of the
Revolving Note converted to LIBOR shall not be permitted to
be repaid or reborrowed during the LIBOR Period without
payment of the premium provided in Section 2.6. At the end
of each LIBOR Period, the interest rate on the Revolving
Note shall automatically convert to the rate based upon the
Prime Rate unless the Company shall exercise its option to
elect a new LIBOR pursuant to the terms of this Section
2.5.a. The option to convert the interest rate to LIBOR
shall not be exercisable during any LIBOR Period with
respect to any portion of the Revolving Credit subject to
the LIBOR for such period.
The interest rates specified above shall be subject to
an increase as of each Measurement Date in the event that
the Company's ratio of Funded Debt to earnings before
interest, taxes, depreciation and amortization ("EBITDA")
computed for the twelve months preceding the Measurement
Date on a rolling basis is as follows:
If Funded Debt to LIBOR margin Prime Rate margin
EBITDA is: shall be: shall be:
Greater than or
equal to 2.10:1 200 basis points 1/2%
Between 2.10:1
and 1.60:1 150 basis points Zero
Less than 1.60:1 100 basis points Zero
Interest on the Revolving Note shall be payable on the
first day of each month.
6. Borrowed Money/Leases. Subsection (iv) of Section 6.1
of the Agreement shall be deleted and the following
subsection (iv) shall be inserted in its place:
(iv) Indebtedness evidenced by capital leases requiring
payments not exceeding the amount set forth in Section 6.6
of this Agreement.
7. Capital Expenditures. Section 6.9 of the Agreement
shall be deleted in its entirety and the following Section 6.9
shall be inserted in its place:
6.9 Capital Expenditures. Make or incur any capital
expenditures for fixed or capital assets in any period which
is coincidental with any of the Company's fiscal years that
are, in the aggregate, in excess of the Company's
depreciation expense in that year.
8. Current Ratio. Section 6.13 of the Agreement shall be
deleted in its entirety and the following Section 6.13 shall be
inserted in its place:
6.13 Current Ratio. Permit the ratio of current
assets to current liabilities, each computed on a
Consolidated basis as of each Measurement Date for the
twelve months preceding the Measurement Date on a rolling
basis, to be less than 2.5 to 1 at any time.
9. Tangible Net Worth. Section 6.14 of the Agreement is
deleted in its entirety.
10. Debt-Equity Ratio. Section 6.15 of the Agreement shall
be deleted and the following Section 6.15 shall be inserted in
its place:
6.15 Debt-Equity Ratio. Permit the ratio of total
liabilities to tangible net worth, each computed on a
Consolidated Basis as of each Measurement Date for the
twelve months preceding the Measurement Date on a rolling
basis to be greater than 1.50 to 1.
11. Earnings Coverage. Section 6.16 of the Agreement shall
be deleted and the following Section 6.16 shall be inserted in
its place:
6.16 Earnings Coverage. Permit the ratio of earnings
before taxes and interest to interest expense for any twelve
month period, computed on a Consolidated Basis as of each
Measurement Date for the twelve months preceding the
Measurement Date on a rolling basis to be less than 3.0
to 1.
12. Working Capital. Section 6.17 of the Agreement is
deleted in its entirety.
13. Cash Flow Coverage. Section 6.18 of the Agreement
shall be deleted and the following Section 6.18 shall be inserted
in its place:
6.18 Cash Flow Coverage. Permit the ratio of cash flow
for the preceding twelve months to the current maturities of
long-term Indebtedness due and payable during such period,
each computed as of each Measurement Date on a Consolidated
Basis and on a rolling basis to be less than 3.5 to 1.
14. Environmental Remediation. The following is added as a
new Section 7.1(j):
(j) Environmental Remediation. Fail to satisfy on or
before September 15, 1997, to the satisfaction of the Bank,
in its sole discretion, all of the recommendations set forth
in Section 9.0 of the Phase I Environmental Site Assessment
performed by Maxim-Empire Soils Investigations, Inc. dated
January 1996.
Except as amended hereby, the Company hereby ratifies
and confirms the Agreement and agrees that the Agreement remains
in full force and effect, subject to no offset, claim,
counterclaim or defense. No further amendment, modification or
waiver of any other provision of the Agreement shall be valid and
enforceable unless set forth in a writing and signed by the
Company and the Bank.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the 1st day of December, 1996.
EXOLON-ESK COMPANY
By ____________________________
Xxxxxxx X. Xxxxxx
Vice President and Chief
Financial Officer
THE CHASE MANHATTAN BANK
BY ____________________________
Xxxx X. Xxxxx
Vice President
EXHIBIT C
REPLACEMENT
REVOLVING NOTE
$10,000,000.00 Buffalo, New York
December 26, 1996
FOR VALUE RECEIVED, the undersigned, EXOLON-ESK COMPANY
("Company"), unconditionally promises to pay on or before
January 2, 2000 to the order of The Chase Manhattan Bank
(successor by merger to The Chase Manhattan Bank, N.A. which was
successor by merger to Chase Lincoln First Bank, N.A.) ("Bank")
at its office at 0000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxx Xxxx 00000,
Attention: Middle Market Banking Department, or at the holder's
option, at such other place as may be designated by the holder,
the principal sum equal to the lesser of (a) TEN MILLION DOLLARS
($10,000,000.00) or (b) the aggregate unpaid principal amount of
all Loans made by Bank to Company pursuant to the Credit
Agreement, dated December 22, 1992 between Company and Bank, as
amended, as the same may from time to time be amended,
supplemented or otherwise modified ("Credit Agreement"). All
capitalized terms used in this Revolving Note and not otherwise
defined shall have the meanings set forth in the Credit
Agreement.
This Revolving Note shall bear interest on the balance
of principal from time to time unpaid from the date hereof until
maturity (whether by acceleration or otherwise) at rates and on
the dates determined in accordance with Subsection 2.5.a of the
Credit Agreement. Interest shall be calculated on the basis of
one three hundred sixtieth (1/360th) of interest rate hereof in
effect for each calendar day such balance of principal is unpaid.
After maturity, whether by acceleration or otherwise, this
Revolving Note shall bear interest at a rate per annum equal to
two percent (2%) in excess of Bank's Prime Rate as defined below;
provided, however, in no event shall the rate of interest on this
Revolving Note exceed the maximum rate authorized by applicable
law. Bank's "Prime Rate" means the fluctuating base rate of
interest announced by Bank from time to time to be the prime rate
regardless of whether such prime rate shall be the lowest rate
actually charged by Bank on commercial borrowings of 90-119 day
maturity. Payments of both principal and interest are to be made
in lawful money of the United States of America in immediately
available funds.
Bank may inscribe on the schedule annexed hereto and
any continuation thereof ("Schedule"), the amount and the date of
the making of each Loan or each conversion of a portion of the
Revolving Credit from an interest rate based on Prime Rate to an
interest rate based on LIBOR, whether interest on the Loan or
portion of the Credit converted is to be calculated based on
Prime Rate or LIBOR, the dates on which each LIBOR Period shall
begin and end, all payments on account of principal, the dates
thereof and the outstanding principal balance of this Revolving
Note from time to time unpaid. Each entry set forth on the
Schedule shall be prima facie evidence of the facts so set forth.
No failure by Bank to make, and no error by Bank in making, any
inscription on the Schedule shall affect Company's obligation to
repay the full principal amount advanced by Bank to or for the
account of Company, or Company's obligation to pay interest
thereon at the agreed upon rate.
If any installment of this Revolving Note is not paid
when due, whether because such installment becomes due on a
Saturday, Sunday or a holiday or for any other reason, Company
will pay interest thereon at the aforesaid rate until the date of
actual receipt of such installment by the holder of this
Revolving Note.
No failure by the holder hereof to exercise, and no
delay in exercising, any right or power hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise by
the holder of any right or power hereunder preclude any other or
further exercise thereof or the exercise of any other right or
power. The rights and remedies of the holder as herein specified
are cumulative and not exclusive of any other rights or remedies
which the holder may otherwise have.
No modification, rescission, waiver, release or
amendment of any provision of this Revolving Note shall be made
except by a written agreement subscribed by duly authorized
officers of Company and the holder hereof.
Company hereby waives diligence, presentment, protest
and demand, and also notice of protest, demand, dishonor and
nonpayment of this Revolving Note.
This Revolving Note is the Revolving Note referred to
in the Credit Agreement, to which reference is hereby made with
respect to collateral, interest rate options, and rights of
prepayment and acceleration of the principal hereof on the
occurrence of certain events.
The Company agrees to pay all costs and expenses
incurred by the holder in preserving the holder's rights,
enforcing this Revolving Note or in collecting the indebtedness
evidenced hereby, including, without limitation, if the holder
retains counsel for any such purposes, actual attorneys' fees and
expenses.
This Revolving Note shall be construed under, and
governed by, the internal laws of the State of New York without
regard to principles of conflicts of laws.
This Note is in renewal and substitution of, but not in
payment of, a Replacement Revolving Note of the Company to the
Bank dated September 30, 1996.
EXOLON-ESK COMPANY
By:_________________________
Xxxxxxx X. Xxxxxx
Vice President and
Chief Financial Officer
SCHEDULE
LOANS AND PAYMENTS OF PRINCIPAL
BASIS OF
DATE LOAN AMOUNT OF INTEREST AMOUNT
MADE, LOAN MADE, RATE OF AGGREGATE NOTATION
CON- CONTINUED (PRIME LIBOR PRINCIPAL UNPAID MADE BY
TINUED OR OR RATE OR PERIOD PAID OR PRINCIPAL AND
CONVERTED CONVERTED LIBOR) DATES PREPAID BALANCE DATE
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