EXHIBIT 4C
SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT
SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT, dated as of
September 28, 2001 ("Amendment"), by and among BRUSH ENGINEERED MATERIALS INC.,
an Ohio corporation (the "PARENT"), and BRUSH XXXXXXX INC., an Ohio corporation
and a wholly owned subsidiary of the Parent ("BRUSH XXXXXXX") (the Parent and
Brush Xxxxxxx are herein each a "COMPANY" or a "BORROWER" and collectively,
together with each of their respective successors and assigns, the "COMPANIES"
or the "BORROWERS"), the lending institutions listed that are parties to this
Amendment (herein, together with its or their successors and assigns, each a
"LENDER" and collectively the "LENDERS"), and NATIONAL CITY BANK, a national
banking association, as one of the Lenders, as the Lender under the Swing Line
Revolving Facility (herein, together with its successors and assigns, the "SWING
LINE LENDER"), and as administrative agent (the "ADMINISTRATIVE AGENT"):
WITNESSETH THAT:
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WHEREAS, the Borrowers, the Lenders (or their predecessors, as
the case may be), the Swing Line Lender and the Administrative Agent entered
into a Credit Agreement, dated as of June 30, 2000, as amended by a First
Amendment to Credit Agreement dated as of March 30, 2001 (the "CREDIT
AGREEMENT"), under which the Lenders, subject to certain conditions, agreed to
lend to the Borrowers up to $65,000,000 from time to time in accordance with the
terms thereof; and
WHEREAS, the parties desire to amend the Credit Agreement as
set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. EFFECT OF AMENDMENT; DEFINITIONS.
The Credit Agreement shall be and hereby is amended as
provided in Section 2 hereof. Except as expressly amended in Section 2 hereof,
the Credit Agreement shall continue in full force and effect in accordance with
its respective provisions on the date hereof. As used in the Credit Agreement,
the terms "Credit Agreement", "Agreement", "this Agreement", "herein",
"hereinafter", "hereto", "hereof", and words of similar import shall, unless the
context otherwise requires, mean the Credit Agreement as amended and modified by
this Amendment.
2. AMENDMENTS.
(A) Section 1.1 of the Credit Agreement shall be amended by
deleting the existing definitions of "Consolidated Income Tax Expense",
"Guarantors" and "Security Documents" and inserting the following in lieu
thereof:
""CONSOLIDATED INCOME TAX EXPENSE" shall mean, for any period, all
provisions for taxes based on the net income of the Borrowers and the
Subsidiaries (including, without limitation, any additions to such taxes, and
any penalties and interest with respect thereto), all as determined for the
Borrowers and the Subsidiaries on a consolidated basis in accordance with GAAP;
provided, that if the aggregate net amount of those taxes for any period in
question is a negative figure, the Consolidated Income Tax Expense for the
period in question shall be treated as zero for purposes of this Agreement.
"GUARANTORS" shall mean each of Xxxxxxxx Advanced Materials Inc., a New
York corporation, Circuits Processing Technologies, Inc., a California
corporation, Brush International, Inc., an Ohio
corporation, and Technical Materials, Inc., an Ohio corporation, Brush Ceramic
Products Inc., an Arizona corporation, Zentrix Technologies Inc., an Arizona
corporation, and Brush Resources Inc., a Utah corporation, and their respective
successors and assigns, and any other Subsidiary that in accordance with Section
8.12(b) executes and delivers to the Administrative Agent a Guaranty Agreement
in substantially the form attached as Exhibit G, and its respective successors
and assigns.
"SECURITY DOCUMENTS" shall mean the Pledge Agreement, the Guaranties,
the Security Agreement, the Subsidiary Security Agreement and each other
document pursuant to which any Lien or security interest is granted by any
Borrower or any Subsidiary to the Administrative Agent as security for any of
the Obligations."
(B) Section 1.1 of the Credit Agreement shall be amended by
inserting the following definitions in proper alphabetical order:
""SECURITY AGREEMENT" shall mean the Security Agreement, dated as of
September 28, 2001, by Brush Xxxxxxx and the Parent in favor of National City
Bank, as Collateral Agent, as the same may be amended, restated, modified or
supplemented from time to time.
SUBSIDIARY SECURITY AGREEMENT shall mean the Security Agreement, dated
as of September 28, 2001, by the Guarantors in favor of National City Bank, as
Collateral Agent, as the same may be amended, restated, modified or supplemented
from time to time."
(C) Section 2.8(h) of the Credit Agreement shall be amended by
deleting the Pricing Grid Table set forth therein and inserting the following in
lieu thereof:
"PRICING GRID TABLE
(EXPRESSED IN BASIS POINTS)
-------------------------------------------- --------------------------- ---------------------- --------------------
RATIO OF APPLICABLE EURODOLLAR APPLICABLE PRIME APPLICABLE
CONSOLIDATED TOTAL DEBT MARGIN FOR GENERAL RATE MARGIN FACILITY FEE RATE
TO REVOLVING LOANS
CONSOLIDATED EBITDAR
-------------------------------------------- --------------------------- ---------------------- --------------------
Greater than or equal to 4.00 to 1.00 300.00 75.00 50.00
-------------------------------------------- --------------------------- ---------------------- --------------------
(greater than) 3.50 to 1.00 and
(less than) 4.00 to 1.00 250.00 50.00 40.00
-------------------------------------------- --------------------------- ---------------------- --------------------
(greater than) 3.00 to 1.00 and
(less than or equal to) 3.50 to 1.00 200.00 25.00 30.00
-------------------------------------------- --------------------------- ---------------------- --------------------
(greater than) 2.50 to 1.00 and
(less than or equal to) 3.00 to 1.00 175.00 -0- 30.00
-------------------------------------------- --------------------------- ---------------------- --------------------
(less than or equal to) 2.50 to 1.00 150.00 -0- 25.00
-------------------------------------------- --------------------------- ---------------------- --------------------
Notwithstanding the above provisions, from September 28, 2001, through
and including September 30, 2001, and thereafter until changed hereunder in
accordance with the provisions set forth above, for all purposes of this
Agreement, the Applicable Prime Rate Margin will be 75 basis points per
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annum, the Applicable Eurodollar Margin for General Revolving Loans will be 300
basis points per annum, and the Applicable Facility Fee Rate shall be 50 basis
points per annum."
(D) Section 9.3 of the Credit Agreement shall be amended by
(i) deleting the word "and" at the end of subsection (c), (ii) inserting "; and"
in lieu of the period at the end of subsection (d), and (iii) inserting the
following as subsection (e):
"(e) SALE OR DISCOUNT OF CERTAIN FOREIGN RECEIVABLES: sales, without
recourse, by any Foreign Subsidiary of Brush International, Inc., conducted in
the ordinary course of its business, of its accounts receivable, provided that
such sales are consistent with the customary practices of the applicable country
and that such sales do not exceed an amount greater than $5,000,000 in the
aggregate at any given time."
(E) Section 9.7 of the Credit Agreement shall be amended by
deleting the same and inserting the following in lieu thereof :
"9.7. RATIO OF CONSOLIDATED TOTAL DEBT TO CONSOLIDATED TOTAL ADJUSTED
CAPITAL AND MINIMUM EBITDAR. The Borrowers will not at any time permit the
ratio, expressed as a percentage, of (x) the amount of Consolidated Total Debt
to (y) Consolidated Total Adjusted Capital, to exceed (i) 50% from the date of
this Agreement through and including September 30, 2001, (ii) 43% for the period
commencing October 1, 2001, through and including December 31, 2001; (iii) 45%
for the period commencing January 1, 2002, through and including September 30,
2002; and (iv) 50% on and after October 1, 2002. In addition, the Borrowers will
not at any time permit the Consolidated EBITDAR, at the end of each fiscal
quarter ending on the dates described below, and with respect to the fiscal
quarters ending on June 30, September 30 and December 31, 2002, on a cumulative
basis for the respective longer periods indicated in the parenthesis below, to
be less than the amount set forth opposite that fiscal quarter:
Fiscal Quarter Ended Minimum Consolidated Ebitdar
-------------------- ----------------------------
March 31, 2002 (3 months) $ 3,780,000
June 30, 2002 (6 months) $ 12,330,000
September 30, 2002 (9 months) $ 21,960,000
December 31, 2002 (12 months) $ 31,770,000"
3. WAIVERS.
(A) Subject to the conditions set forth in Section 5 herein,
the Administrative Agent, the Swing Line Lender and the Lenders hereby waive the
Borrowers' failure to comply with Section 9.8 of the Credit Agreement, regarding
the Ratio of Consolidated Total Debt to Consolidated EBITDAR, for each of the
Testing Periods ending September 30, 2001, December 31, 2001, March 31, 2002,
June 30, 2002, and September 30, 2002. Such waiver shall apply only to the
Borrowers' compliance with such Section for and at the Testing Periods ending on
the dates set forth in the immediately preceding sentence and not to any past or
future Testing Period and not to any other covenants and agreements contained in
the Credit Agreement or the other related Credit Documents.
(B) Subject to the conditions set forth in Section 5 herein,
the Administrative Agent, the Swing Line Lender and the Lenders hereby waive the
Borrowers' failure to comply with Section 9.9 of the Credit Agreement, regarding
the Consolidated Fixed Charge Coverage
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Ratio, for each of the Testing Periods ending December 31, 2001, March 31, 2002,
June 30, 2002, and September 30, 2002. Such waiver shall apply only to the
Borrowers' compliance with such Section for and at the Testing Periods ending on
the dates set forth in the immediately preceding sentence and not to any past or
future Testing Period and not to any other covenants and agreements contained in
the Credit Agreement or the other related Credit Documents.
4. REPRESENTATIONS AND WARRANTIES.
(A) Each Borrower hereby represents and warrants to the
Lenders, the Swing Line Lender and the Administrative Agent that all
representations and warranties set forth in the Credit Agreement, as amended
hereby, are true and correct in all material respects, and that this Amendment,
the Security Agreement and the Subsidiary Security Agreement have been executed
and delivered by duly authorized officers of the Borrowers and the Guarantors
that are parties thereto and constitutes the legal, valid and binding obligation
of the Borrowers and Guarantors that are parties thereto, enforceable against
each of them in accordance with their respective terms.
(B) Each Borrower hereby represents and warrants to the
Lenders, the Swing Line Lender and the Administrative Agent that the execution,
delivery and performance by the Borrowers of this Amendment and the Security
Agreement, and their performance of the Credit Agreement, and the execution,
delivery and performance by the Guarantors of the Subsidiary Security Agreement
has been authorized by all requisite corporate action and will not (1) violate
(a) any order of any court, or any rule, regulation or order of any other agency
of government, (b) the Articles of Incorporation, the Code of Regulations or any
other instrument of corporate governance of the Borrowers or the Guarantors, as
applicable, or (c) any provision of any indenture, agreement or other instrument
to which either of the Borrowers or any of the Guarantors is a party, or by
which either of the Borrowers or any of the Guarantors or any of their
properties or assets are or may be bound; (2) be in conflict with, result in a
breach of or constitute, alone or with due notice or lapse of time or both, a
default under any indenture, agreement or other instrument referred to in (1)(c)
above; or (3) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever.
5. CONDITIONS PRECEDENT.
When the following conditions precedent have been met, this
Amendment shall be effective as of September 28, 2001:
(A) The Borrowers shall have executed and delivered to
Administrative Agent the Security Agreement in form and substance satisfactory
to Administrative Agent pursuant to which the obligations of the Borrowers under
the Credit Agreement and other obligations of the Borrowers to the Lenders under
Synthetic Leases, swap agreements and reimbursement agreements are secured by
all of the personal property of the Borrowers, subject to the exceptions set
forth therein.
(B) The Guarantors shall have executed and delivered to
Administrative Agent one or more Subsidiary Security Agreements in form and
substance satisfactory to Administrative Agent pursuant to which the obligations
of Guarantors under their respective Guaranties are secured by all of the
personal property of Guarantors, subject to the exceptions set forth therein.
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(C) Each Borrower's secretary or treasurer shall have
certified to each Lender (i) a copy of resolutions duly adopted by that
Borrower's board of directors in respect of this Amendment and the Security
Agreement, (ii) true and correct copies of that Borrower's current Articles of
Incorporation and Code of Regulations, (iii) the names and true signatures of
the officers of that Borrower authorized to sign this Amendment and the Security
Agreement on behalf of the Borrower, and (iv) that, after giving effect to the
amendments and waivers set forth herein, no "Event of Default" or "Default" (as
those terms are defined in the Credit Agreement) exists.
(D) Each Guarantor's secretary or treasurer shall have
certified to each Lender (i) a copy of resolutions duly adopted by that
Guarantor's board of directors in respect of the Subsidiary Security Agreements
to which it is a party, (ii) true and correct copies of that Guarantor's current
Articles of Incorporation or Certificate of Incorporation and Code of
Regulations or Bylaws, (iii) the names and true signatures of the officers of
that Guarantor authorized to sign the Subsidiary Security Agreements to which it
is a party on behalf of that Guarantor, and (iv) that, after giving effect to
the amendments and waivers set forth herein, no "Event of Default" or "Default"
(as those terms are defined in the Credit Agreement) exists.
(E) Counsel for the Borrowers and Guarantors shall have
rendered to each Lender a written opinion as to the enforceability of this
Amendment, the Security Agreement and the Subsidiary Security Agreements, in
form and substance satisfactory to the Lenders.
(F) The Borrowers shall have delivered or caused to be
delivered certificates of good standing for each of the Borrowers and Guarantors
issued by the Secretary of State, or other appropriate office, of the state of
its incorporation.
(G) The Borrowers shall have caused all Guarantors to execute
and deliver to the Administrative Agent a Reaffirmation of Guaranty in form and
substance satisfactory to the Administrative Agent.
(H) The Borrowers shall have delivered or caused to be
delivered such other documents as Administrative Agent or any of the Lenders may
reasonably request.
6. MISCELLANEOUS.
(A) This Amendment shall be construed in accordance with and
governed by the laws of the State of Ohio, without reference to principles of
conflict of laws. The Borrowers jointly and severally agree to pay (i) in
connection with this Amendment, an amendment fee in an aggregate amount equal to
$97,500, to be allocated pro rata among the Lenders executing this Amendment on
the basis of their respective Commitments, and (ii) on demand all costs and
expenses of the Lenders and the Administrative Agent, including reasonable
attorneys' fees and expenses, incurred in connection with the preparation,
execution and delivery of this Amendment, the Security Agreement and the
Subsidiary Security Agreements.
(B) This Amendment is executed in accordance with and subject
to Section 12.12 of the Credit Agreement. Except as expressly set forth in
Section 3, the execution, delivery and performance by the Lenders, the Swing
Line Lender and the Administrative Agent of this Amendment shall not constitute,
or be deemed to be or construed as, a waiver of any right, power or remedy of
the Lenders, the Swing Line Lender or the Administrative Agent, or a waiver of
any provision of the Credit Agreement. Except as expressly set forth in Xxxxxxx
0, xxxx of the
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provisions of this Amendment shall constitute, or be deemed to be or construed
as, a waiver of any "Event of Default" or any "Default," as those terms are
defined in the Credit Agreement.
(C) The Borrowers acknowledge and agree that, as of the date
hereof, all of the Borrowers' outstanding loan obligations to the Lenders and
the Administrative Agent under the Credit Agreement and the Credit Documents are
owed without any offset, deduction, defense or counterclaim of any nature
whatsoever, and the Borrowers hereby waive any such offset, deduction, defense
and counterclaim of any nature whatsoever with respect thereto arising out of
acts or omissions occurring on or prior to the date hereof.
(D) This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the day and year first above written.
Address: BRUSH XXXXXXX INC.
00000 Xx. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000 By:
-------------------------------------
Title:
----------------------------------
Address: BRUSH ENGINEERED MATERIALS INC.
00000 Xx. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Fax: (000) 000-0000 By:
-------------------------------------
Title:
----------------------------------
Address: NATIONAL CITY BANK,
Deliveries: for itself and as Agent
Large Corporate Division
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000 By:
--------------------------------------
Fax: (000) 000-0000 Title:
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Mail:
Large Corporate Division, Loc. #2070
X.X. Xxx 0000
Xxxxxxxxx, Xxxx 00000
FIFTH THIRD BANK, an Ohio banking
corporation, f/k/a FIFTH THIRD BANK,
NORTHEASTERN OHIO
Address:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 By:
-------------------------------------
Fax: (000) 000-0000 Title:
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Address: XXXXXX TRUST AND SAVINGS BANK
X.X. Xxx 000 (000/00X)
Xxxxxxx, Xxxxxxxx 00000-0000 By:
-------------------------------------
Fax: (000) 000-0000 Title:
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Address: FIRSTAR BANK, N.A.
0000 Xxxxxx Xxxxxx, XX 0000
Xxxxxxxxx, Xxxx 00000 By:
-------------------------------------
Fax: (000) 000-0000 Title:
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MANUFACTURERS AND TRADERS
Address: TRUST COMPANY
Xxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000 By:
-------------------------------------
Fax: (000) 000-0000 Title:
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Address: LASALLE BANK NATIONAL
ASSOCIATION
0000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000 By:
-------------------------------------
Fax: (000) 000-0000 Title:
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