EXHIBIT 4k
FIRST AMENDMENT TO LOAN AGREEMENT
This FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered on February 1, 2005, and made effective as of December 22, 2004 (the
"Effective Date"), by and among Brush Engineered Materials Inc., an Ohio
corporation (the "Borrower"), each of the other Credit Parties (as defined in
the Loan Agreement (as defined below)), the Required Lender (as defined in the
Loan Agreement), and Guggenheim Corporate Funding, LLC, as collateral agent (the
"Agent").
BACKGROUND
A. The Borrower, the other Credit Parties, the Required Lender and the
Agent are party to that certain Loan Agreement, dated as of December 4,
2003 (as may be amended, restated, modified or supplemented from time
to time, the "Loan Agreement").
B. The Borrower, the other Credit Parties, the Required Lender and the
Agent desire to amend certain provisions of the Loan Agreement as set
forth in and pursuant to the terms and conditions of this Amendment.
C. Capitalized terms used but not defined in this Amendment shall have the
meanings given to them in the Loan Agreement.
TERMS OF AMENDMENT
NOW, THEREFORE, for valuable consideration received to their mutual
satisfaction, the parties hereby agree as follows:
1. Amendments to Section 1 of the Loan Agreement.
(a) The definitions of "Maximum Bank One Debt" and "Permitted
Precious Metals Agreements" set forth in Section 1 of the Loan
Agreement are hereby deleted in their entirety and replaced
with the following:
"Maximum Bank One Debt" means the sum of (i)
the aggregate outstanding principal amount of Bank
One Revolving Loans and letter of credit
accommodations made or issued pursuant to the Bank
One Debt Documents, Rate Management Obligations and
Banking Services Obligations equal to the lesser of
(A) (1) $117,500,000 less (2) the aggregate
outstanding principal amount of the Bank One Term
Loans outstanding on the date hereof as reduced from
time to time by voluntary principal payments and
prepayments of such Bank One Term Loans pursuant to
the terms of the Bank One Debt Documents and (B) 105%
of Availability in effect as of the date of the last
Advance or
issuance of a Letter of Credit (as such terms are
defined in the Bank One Credit Agreement) plus (ii)
the aggregate outstanding principal amount of the
Bank One Term Loans made pursuant to the Bank One
Debt Documents equal to the principal amount of the
Bank One Term Loans outstanding on the date hereof as
reduced from time to time by voluntary or scheduled
principal payments and prepayments of such Bank One
Term Loans pursuant to the terms of the Bank One Debt
Documents.
"Permitted Precious Metals Agreements" means
precious metals agreements and arrangements (whether
styled as debt, a lease, a consignment or otherwise)
entered into from time to time by any Credit Party,
but only to the extent that the aggregate Dollar
Equivalent of the precious metals subject thereto
does not exceed $65,000,000. For purposes of this
definition, "precious metals" shall include, without
limitation, gold, silver, platinum, palladium and
copper (even though copper is not generally deemed to
be a precious metal).
(b) The definition of "Kazakhstan Contract" set forth in Section 1
of the Loan Agreement is hereby deleted in its entirety and
replaced with the following:
"Beryllium Contracts" means any and all
agreements or other arrangements (however styled) for
the purchase, procurement or other acquisition of
Beryllium, in whatever form (including, without
limitation, Xxxxx ore, Copper Beryllium Master Alloy,
Vacuum Cast Beryllium Ingot and Vacuum Hot Pressed
Beryllium Billet), entered into from time to time by
any Credit Party, but only to the extent that the
Dollar Equivalent of any Indebtedness related thereto
does not exceed $20,000,000 during any consecutive
12-month period.
The foregoing definition shall be inserted in Section 1 of the
Loan Agreement in appropriate alphabetical order. Any and all
references in the Loan Agreement to "Kazakhstan Contract" are
hereby replaced with references to "Beryllium Contracts".
2. Amendments to Section 5.2 of the Loan Agreement.
(a) Section 5.2(b)(viii) of the Loan Agreement is hereby amended
by deleting the text "$15,000,000" appearing therein and
replacing such text with "25,000,000".
(b) Section 5.2(b)(ix) of the Loan Agreement is hereby amended by
deleting the text "$1,000,000" appearing therein and replacing
such text with "5,000,000".
(c) Section 5.2(e)(iii) of the Loan Agreement is hereby amended by
deleting the text "$250,000" appearing therein and replacing
such text with "1,000,000".
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(d) Section 5.2(f)(7) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:
(7) other Investments not to exceed
$2,500,000 each, and $7,500,000 in the aggregate
during the term of this Agreement; provided, however,
that the foregoing $2,500,000 limitation on each
Investment shall not apply and the $7,500,000
aggregate limitation for all Investments shall be
deemed to be $20,000,000 as long as Availability (as
defined in the Bank One Credit Agreement) equals or
exceeds $20,000,000 immediately prior to and
immediately after giving effect to any such
Investment;
(e) Section 5.2(f)(8) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:
(8) Acquisitions in which the cash portion
of the purchase price does not exceed $2,500,000 per
Acquisition and $7,500,000 in the aggregate for all
Acquisitions during any Fiscal Year (it being
understood that there shall be no limit on
Acquisitions using common stock of the Borrower);
provided, however, that the foregoing $2,500,000
limitation on each Acquisition shall not apply and
the $7,500,000 aggregate limitation for Acquisitions
shall be deemed to be $15,000,000 as long as
Availability (as defined in the Bank One Credit
Agreement) equals or exceeds $20,000,000 immediately
prior to and immediately after giving effect to any
such Acquisition;
(f) Section 5.2(n)(ii) of the Loan Agreement is hereby deleted in
its entirety and replaced with the following:
(ii) Fixed Charge Coverage Ratio. Permit the
Fixed Charge Coverage Ratio, determined as of the end
of each of its Fiscal Quarters for the then
most-recently ended four Fiscal Quarters, to be less
than (a) 1.25 to 1.00 on the Closing Date through
September 30, 2005 and (b) 1.50 to 1.00 at all times
thereafter. Notwithstanding the foregoing, as long as
Availability (as defined in the Bank One Credit
Agreement) is not less than $20,000,000 for 3
consecutive Business Days or any 5 Business Days in
any Fiscal Quarter, the Credit Parties shall not be
required to maintain or report to the Collateral
Agent or any other Lender the foregoing Fixed Charge
Coverage Ratio for such Fiscal Quarter.
3. References to Export-Import Loan Deleted. All references to the
"Export-Import Loan" and the "Export-Import Loan Documents" are hereby
deleted from the Loan Agreement, and any provision of the Loan
Agreement containing any such reference shall, as of the Effective
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Date, be read as if such reference was not contained therein and be
amended mutatis mutandis to accommodate such deletions in the context
of such provisions.
4. Representations and Warranties. Each Credit Party represents and
warrants to the Collateral Agent and the Required Lender that: (a) such
Credit Party has the power and authority to execute and deliver this
Amendment; (b) the execution and delivery by such Credit Party of this
Amendment, and the performance of its obligations hereunder, have been
duly authorized by proper proceedings; and (c) this Amendment
constitutes a legal, valid and binding obligation of such Credit Party,
enforceable against such Credit Party in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally
and except as the same may be subject to general principles of equity.
The Required Lender represents and warrants that, as of the date hereof
and as of the Effective Date, it holds greater than 50% of the
aggregate principal amount of all Loans outstanding under the Loan
Agreement, and the Required Lender and the Collateral Agent are
executing this Amendment pursuant to Section 10.1(d) of the Loan
Agreement.
5. Effectuation. Upon the full execution of this Amendment and without any
further action required by the parties hereto, the amendments to the
Loan Agreement contemplated by this Amendment shall be deemed effective
as of the Effective Date. There are no conditions precedent or
subsequent to the effectiveness of this Amendment.
6. Consideration. As consideration for this Amendment, the Credit Parties
shall reimburse the Collateral Agent for its reasonable, out-of-pocket
costs, fees and expenses incurred in connection with the review and
negotiation of this Amendment, including, without limitation,
reasonable attorney's fees.
7. Continued Effectiveness of Loan Agreement. Except as specifically
amended herein, directly or by reference, all of the provisions of the
Loan Agreement are confirmed and ratified, and shall remain as
originally written.
8. Governing Law. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York
applicable to contracts made and performed in such state, without
regard to the principles thereof regarding conflict of laws.
9. No Impairment of Security Interests. The parties hereto agree that this
Amendment shall in no manner affect or impair the liens and security
interests evidenced by the Loan Agreement and/or any other instruments
evidencing, securing or related to the Obligations.
10. Counterparts; Facsimile Signatures. This Amendment may be executed in
counterparts and all such counterparts shall constitute one agreement
binding on all the parties, notwithstanding that the parties are not
signatories to the same counterpart. The parties may execute this
Amendment by facsimile, and all such facsimile signatures shall have
the same force and effect as manual signatures delivered in person.
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IN WITNESS WHEREOF, the Borrower, the other Credit Parties, the
Collateral Agent and the Required Lender have caused this Amendment to be duly
executed and delivered by their respective representatives as of the date first
written above.
CREDIT PARTIES:
BRUSH ENGINEERED MATERIALS INC. BEM SERVICES, INC.
By: By:
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Name: Name:
-------------------------- -----------------------------
Title: Title:
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BRUSH INTERNATIONAL, INC. BRUSH XXXXXXX INC.
By: By:
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Name: Name:
-------------------------- -----------------------------
Title: Title:
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ZENTRIX TECHNOLOGIES INC. BRUSH RESOURCES INC.
By: By:
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Name: Name:
-------------------------- -----------------------------
Title: Title:
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BRUSH CERAMIC PRODUCTS INC. CIRCUITS PROCESSING TECHNOLOGY, INC.
By: By:
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Name: Name:
-------------------------- -----------------------------
Title: Title:
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TECHNICAL MATERIALS, INC. XXXXXXXX ADVANCED MATERIALS INC.
By: By:
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Name: Name:
-------------------------- -----------------------------
Title: Title:
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XXXXXXXX ACQUISITION, LLC BRUSH XXXXXXX (SINGAPORE) PTE LTD.
By: By:
---------------------------- -------------------------------
Name: Name:
-------------------------- -----------------------------
Title: Title:
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COLLATERAL AGENT:
GUGGENHEIM CORPORATE FUNDING, LLC,
as Collateral Agent
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Managing Director
REQUIRED LENDER:
HERAULT INTERNATIONAL, LTD., as the
Required Lender
By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
Manager
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