AMENDMENT NO. 1 TO RESTRUCTURING AGREEMENT
This Amendment No. 1 to Restructuring Agreement (this "Amendment")
is made as of October 31, 2002, by and among:
(a) AMCAST INDUSTRIAL CORPORATION, an Ohio corporation
("Borrower");
(b) the Guarantors, as defined in the Restructuring Agreement
(as hereinafter defined) (together with Borrower, collectively, the
"Credit Parties");
(c) the Restructuring Lenders, as defined in the Restructuring
Agreement; and
(d) the Collateral Agent, as defined in the Restructuring
Agreement.
RECITALS:
A. The Credit Parties, the Guarantors, the Restructuring Lenders and
the Collateral Agent are parties to the Restructuring Agreement, dated as of
July 15, 2002 (as the same may from time to time be amended, restated or
otherwise modified, the "Restructuring Agreement").
B. The Credit Parties, the Guarantors, the Restructuring Lenders and
the Collateral Agent desire to amend the Restructuring Agreement to modify
certain provisions thereof and to consent and agree to certain other items as
set forth herein.
C. Each capitalized term used herein shall be defined in
accordance with the Restructuring Agreement.
AGREEMENT:
In consideration of the premises and mutual covenants herein and for
other valuable considerations, the Credit Parties, the Restructuring Lenders and
the Collateral Agent agree as follows:
1. New Definitions. Section 1.1 of the Restructuring
Agreement is hereby amended to add the following new definitions thereto:
"Cash Collateral Account" has the meaning given to such term
in the LIFO Restructuring Agreement.
"Domestic Adjusted EBITDA" means Domestic EBITDA other than
Domestic EBITDA attributable to CTC Company (as defined in the Existing
Credit Agreement).
"Domestic Fixed Charges" means, for any period, on a
Consolidated basis (but excluding Foreign Subsidiaries and CTC Company,
as defined in the Existing Credit Agreement) and in accordance with
GAAP, the aggregate of (a) cash interest expense (including, without
limitation, the "imputed interest" portion of capital leases,
synthetics leases and asset securitizations, if any), (b) principal
payments on Funded Indebtedness (as defined in the Existing Credit
Agreement as in effect on the date hereof), and (c) Consolidated
Capital Expenditures (as defined in the Existing Credit Agreement as in
effect on the date hereof).
"Fixed Charge Deficit" means the deficiency created when
Domestic Fixed Charges for the most recently completed fiscal quarter
of Borrower exceed (i) Domestic Adjusted EBITDA for such quarter, plus
(ii) the aggregate amount of cash on deposit in the Cash Collateral
Account (other than the Special Reserve Funds) on the last day of such
quarter.
"Fixed Charge Coverage Ratio" means, for any time period, the
ratio of (a) Domestic Adjusted EBITDA for such period, to (b) Domestic
Fixed Charges for such period.
"Fixed Charge Surplus" means the surplus created when Domestic
Adjusted EBITDA for the most recently completed fiscal quarter of
Borrower, plus the aggregate amount of cash on deposit in the Cash
Collateral Account (other than the Special Reserve Funds) on the last
day of such quarter exceeds Domestic Fixed Charges for such quarter.
"Special Reserve Funds" has the meaning specified in Section
3.10(b) hereof.
2. Amendment to Section 3.2. Section 3.2 of the Restructuring
Agreement is hereby amended and restated in its entirety as follows:
3.2 Loans and Letters of Credit. Notwithstanding anything to
the contrary herein or in any Restructuring Lender Document, during the
Restructuring Period, Borrower shall not request any loan, letter of
credit or other extension of credit from any Restructuring Lender
pursuant to any of the Restructuring Lender Documents, and no
Restructuring Lender shall make any such loan, issue any such letter of
credit or grant any other extension of credit to Borrower; provided,
however, that (a) Borrower may request an extension of an existing
letter of credit or the issuance of a new or replacement letter of
credit so long as the aggregate outstanding face amount of all letters
of credit outstanding under the Restructuring Lender Documents is not
at any time in excess of the aggregate outstanding face amount of all
letters of credit that are available to Borrower under the
Restructuring Lender Documents prior to giving effect to this
Agreement, and (b) Borrower may request the conversion of, and the
Existing Credit Agreement Banks may convert, any outstanding LIBOR Loan
(as defined in the Existing Credit Agreement) to a Prime Rate Loan (as
defined in the Existing Credit Agreement) at the end of the Interest
Period (as defined in the Existing Credit Agreement) applicable to such
LIBOR Loan, and Borrower may request the continuation of, and the
Existing Credit Agreement Banks may continue, any outstanding LIBOR
Loan (provided that Borrower shall not select an Interest Period
greater than one month).
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3. Amendment to Mandatory Prepayment Provisions. Section 3.5
of the Restructuring Agreement is hereby amended and restated in its entirety
as follows:
3.5. Mandatory Prepayments.
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(a) In addition to any mandatory prepayment provisions in any
of the Creditor Documents, Borrower shall pay to the applicable
Creditors, as a mandatory prepayment on their respective LIFO Lender
Obligations and, if applicable, the Restructuring Lender Obligations,
the following amounts (collectively, the "Additional Prepayments") that
shall be applied to such obligations as set forth below:
(i) on February 28, 2003, $4,000,000; and
(ii) on August 31, 2003, an amount equal to
$3,500,000 plus the amount of Special Reserve Funds held in the Cash
Collateral Account on such date.
(b) Each Additional Prepayment shall be applied, first, to the
LIFO Lender Obligations, if any, and, second, to the Restructuring
Lender Obligations, on a pro rata basis; provided, however, that any
voluntary prepayment of the Restructuring Lender Obligations made
pursuant to the next sentence shall reduce the amounts of the
Additional Prepayments in forward order of maturity. In addition, it is
understood and agreed that any voluntary prepayment of the
Restructuring Lender Obligations that is caused by an obligation of the
Borrower to prepay Existing Credit Agreement Obligations as a result of
currency fluctuations relating to the conversion or continuation of a
LIBOR Loan (as defined in the Existing Credit Agreement) that is
denominated in Euros (including any prepayment of the Noteholder
Obligations and the Line of Credit Lender Obligations made so that the
holders of such obligations share ratably in the aggregate amount
prepaid) shall be a "Permitted Payment" for purposes of the
Subordination Agreement.
4. Monthly Reporting. Section 3.6 of the Restructuring
Agreement is hereby amended and restated in its entirety as follows:
3.6 Additional Financial Reporting. Commencing on and after
October 31, 2002, within thirty (30) days after the end of each month,
Borrower will deliver to the Restructuring Lenders a monthly financial
reporting package that includes the items set forth on Exhibit F
hereto, and is otherwise in form and detail satisfactory to the
Restructuring Lenders.
5. Amendment to Financial Covenants. Section 3.8 of the
Restructuring Agreement is hereby amended and restated in its entirety as
follows:
3.8 Financial Covenants. The Restructuring Lenders and
Borrower agree that the financial covenants set forth below shall
replace the financial covenants set forth in Section 5.7(b), (c) and
(d) of the Existing Credit Agreement and Section 5.7 of the Note
Agreements. Borrower shall comply at all times with each of the
following:
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(a) Fixed Charge Coverage Ratio. Borrower shall not
suffer or permit at any time the Fixed Charge Coverage Ratio
to be less than (i) .48 to 1.00 for the fiscal quarter of
Borrower ending on or about November 30, 2002, (ii) .55 to
1.00 for the fiscal quarter of Borrower ending on or about
February 28, 2003 and the previous fiscal quarter, (iii) .76
to 1.00 for the fiscal quarter of Borrower ending on or about
May 31, 2003 and the two previous fiscal quarters, and (iv)
.86 to 1.00 for the fiscal quarter of Borrower ending on or
about August 31, 2003 and the three previous fiscal quarters.
(b) Consolidated EBITDA. Borrower shall not suffer or
permit at any time Consolidated EBITDA (as defined in the
Existing Credit Agreement as in effect on the date hereof),
for the most recently completed four fiscal quarters of
Borrower, to be less than (i) $30,938,000 for the four fiscal
quarter period of Borrower ending on or about August 31, 2002,
(ii) $25,900,000 for the four fiscal quarter period of
Borrower ending on or about November 30, 2002, (iii)
$27,000,000 for the four fiscal quarter period of Borrower
ending on or about February 28, 2003, (iv) $29,300,000 for the
four fiscal quarter period of Borrower ending on or about May
31, 2003, and (v) $36,100,000 for the four fiscal quarter
period of Borrower ending on or about August 31, 2003.
(c) Domestic EBITDA. Borrower shall not suffer or
permit at any time Domestic EBITDA, for the most recently
completed four fiscal quarters of Borrower, to be less than
(i) $31,670,000 for the four fiscal quarter period of Borrower
ending on or about August 31, 2002, (ii) $28,200,000 for the
four fiscal quarter period of Borrower ending on or about
November 30, 2002, (iii) $29,800,000 for the four fiscal
quarter period of Borrower ending on or about February 28,
2003, (iv) $30,200,000 for the four fiscal quarter period of
Borrower ending on or about May 31, 2003, and (v) $34,400,000
for the four fiscal quarter period of Borrower ending on or
about August 31, 2003.
(d) Consolidated Capital Expenditures. Borrower shall
not suffer or permit at any time Consolidated Capital
Expenditures (as defined in the Existing Credit Agreement as
in effect on the date hereof), for the most recently completed
fiscal year of Borrower, to be greater than (i) $22,755,000
for the fiscal year of Borrower ending on or about August 31,
2002, and (ii) $20,591,000 for the fiscal year of Borrower
ending on or about August 31, 2003.
Provided, however, that any of the financial covenants set forth above
will be adjusted to reflect the impact on such covenants for any fiscal
quarter (and any testing period including such fiscal quarter)
following the sale by any Company of any business unit sold prior to
such fiscal quarter of Borrower.
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6. Special Reserve Funds. Section 3.10 of the Restructuring
Agreement is hereby amended and restated in its entirety as follows:
3.10 Assignment of Commitments; Special Reserve Funds.
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(a) Assignment of Commitments. Notwithstanding anything in the
Existing Credit Agreement to the contrary, the Existing Banks shall be
permitted to assign all or any portion of their respective Commitments
(and all Existing Credit Agreement Obligations then owing to them)
without the consent of Borrower.
(b) Special Reserve Funds. On and after October 31, 2002,
Borrower shall maintain at least $6,000,000 of immediately available
funds in the Cash Collateral Account, which funds shall be (i) in
addition to all other amounts Borrower is required to maintain pursuant
to Section 3.10 of the LIFO Restructuring Agreement and (ii) designated
by the LIFO Agent as the "Special Reserve Funds" (such funds being
referred to herein as the "Special Reserve Funds"). Borrower shall not
use the Special Reserve Funds except as set forth herein. If, after the
end of any fiscal quarter of Borrower, a Fixed Charge Deficit exists,
then Borrower may use the Special Reserve Funds for the payment of
interest and scheduled principal payments with respect to the
Restructuring Lender Obligations and the LIFO Lender Obligations in
accordance with the terms of the Restructuring Lender Documents and the
LIFO Lender Documents. In addition, if at any time the amount of
Special Reserve Funds is less than $6,000,000, then Borrower will
deposit into the Cash Collateral Account any amounts that exist at the
end of any fiscal quarter as a result of a Fixed Charge Surplus up to
$6,000,000.
7. Consent. The Restructuring Lender Documents prohibit the sale,
lease, transfer or other disposition of assets by the Companies except as
specifically permitted in such Restructuring Lender Documents. Borrower has
advised the Restructuring Lenders that, in connection with settlement of a
dispute, Borrower intends to sell to The Vaughn Group a software upgrade (the
"Specified Property") currently owned by Borrower and used with an IBM AS/400
computer. Borrower has requested that the Restructuring Lenders consent to the
sale of the Specified Property notwithstanding the restrictions set forth in the
Restructuring Lender Documents. By signing this Amendment, the Restructuring
Lenders hereby consent to the sale of the Specified Property on the terms and
conditions described by Borrower to the Restructuring Lenders on the conditions
that (i) no Termination Event shall exist under the Restructuring Agreement
prior to or immediately after such sale of the Specified Property, and (ii) the
proceeds of such sale shall be applied in accordance with the Subordination
Agreement. The Collateral Agent is hereby authorized and instructed to
authenticate and deliver any UCC partial release or other document necessary, in
the opinion of the Collateral Agent, to effect the release of the Specified
Property.
8. Consent to LIFO Restructuring Amendment. Each of the
Restructuring Lenders party hereto consents to and acknowledges the terms
of Amendment No. 1 to the LIFO Restructuring Agreement (the "LIFO
Restructuring Amendment") which is being entered into concurrently herewith.
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9. New Exhibit. The Restructuring Agreement is hereby amended
by adding a new Exhibit F (Monthly Reporting Package) thereto in the form of
Exhibit F attached hereto.
10. Conditions Precedent. This Amendment shall become
effective upon the satisfaction of the following conditions precedent:
(a) this Amendment has been executed by the Credit Parties,
the Restructuring Lenders and the Collateral Agent;
(b) the LIFO Restructuring Amendment has been executed by the
parties thereto;
(c) Borrower has paid all legal fees and expenses of the Existing
Credit Agreement Agent; and
(d) Borrower has provided such other items and has satisfied such other
conditions as may be reasonably required by the Restructuring Lenders.
11. Representations and Warranties. Each Credit Party hereby represents
and warrants to the Restructuring Lenders that (a) such Credit Party has the
legal power and authority to execute and deliver this Amendment; (b) the
officials executing this Amendment have been duly authorized to execute and
deliver the same and bind such Credit Party with respect to the provisions
hereof; (c) the execution and delivery hereof by such Credit Party and the
performance and observance by such Credit Party of the provisions hereof do not
violate or conflict with the organizational agreements of such Credit Party or
any law applicable to such Credit Party or result in a breach of any provision
of or constitute a default under any other agreement, instrument or document
binding upon or enforceable against such Credit Party; (d) no Termination Event
has occurred under the Restructuring Agreement, nor will any occur immediately
after the execution and delivery of this Amendment or by the performance or
observance of any provision hereof; (e) none of the Credit Parties nor any of
their respective Subsidiaries has any claim or offset against, or defense or
counterclaim to, any of its obligations or liabilities under the Restructuring
Agreement or any Restructuring Lender Document; and (f) this Amendment
constitutes a valid and binding obligation of such Credit Party in every
respect, enforceable in accordance with its terms.
12. Restructuring Agreement Unaffected. Each reference that is
made in the Restructuring Agreement shall hereafter be construed as a reference
to the Restructuring Agreement as amended hereby. This Amendment is a
Restructuring Lender Document. Except as herein otherwise specifically
provided, all provisions of the Restructuring Agreement shall remain in full
force and effect and be unaffected hereby.
13. Captions. The recitals to this Amendment (except for
definitions) and the section captions used in this Amendment are for
convenience only and do not affect the construction of this Agreement.
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14. RELEASE. AS A CONDITION PRECEDENT TO THE EFFECTIVENESS OF THIS
AMENDMENT, AND IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN AND FOR
OTHER GOOD AND VALUABLE CONSIDERATION, EACH CREDIT PARTY HEREBY HOLDS HARMLESS,
RELEASES, ACQUITS AND FOREVER DISCHARGES THE EXISTING CREDIT AGREEMENT AGENT,
THE COLLATERAL AGENT AND EACH RESTRUCTURING LENDER THAT IS A PARTY HERETO, THE
RESPECTIVE PARTICIPANTS, SUBSIDIARIES, AFFILIATES, OFFICERS, DIRECTORS, AGENTS,
EMPLOYEES, SERVANTS, ATTORNEYS AND REPRESENTATIVES, AS WELL AS THE RESPECTIVE
HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS OF ANY AND ALL OF THEM
(COLLECTIVELY, THE "RELEASED PARTIES") FROM ANY AND ALL CLAIMS, DEMANDS, DEBTS,
ACTIONS, CAUSES OF ACTION, SUITS, CONTRACTS, AGREEMENTS, OBLIGATIONS, ACCOUNTS,
DEFENSES, OFFSETS AND LIABILITIES OF ANY KIND OR CHARACTER WHATSOEVER, KNOWN OR
UNKNOWN, SUSPECTED OR UNSUSPECTED, IN CONTRACT OR IN TORT, AT LAW OR IN EQUITY,
THAT ANY SUCH CREDIT PARTY EVER HAD, NOW HAVE, OR MIGHT HEREAFTER HAVE AGAINST
ANY RELEASED PARTY, JOINTLY OR SEVERALLY, FOR OR BY REASON OF ANY MATTER, CAUSE
OR THING WHATSOEVER OCCURRING BEFORE THE DATE OF THIS AMENDMENT, INCLUDING
WITHOUT LIMITATION, ANY OF THE FOREGOING THAT RELATE TO, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, THIS AMENDMENT OR ANY RESTRUCTURING LENDER DOCUMENT. IN
ADDITION, EACH CREDIT PARTY AGREES NOT TO COMMENCE, JOIN IN OR PROSECUTE ANY
SUIT OR OTHER PROCEEDING THAT IS ADVERSE TO ANY OF THE RELEASED PARTIES ARISING
DIRECTLY OR INDIRECTLY FROM ANY OF THE FOREGOING MATTERS. THE CREDIT PARTIES
AGREE TO INDEMNIFY AND HOLD HARMLESS THE RELEASED PARTIES FROM ANY LOSS OR
DAMAGES, CLAIMS, COSTS AND ATTORNEY FEES OR EXPENSES ARISING OUT OF OR IN
CONNECTION WITH THIS AMENDMENT OR ANY RESTRUCTURING LENDER DOCUMENT.
15. Counterparts This Amendment may be executed in any number of
counterparts, by different parties hereto in separate counterparts and by
facsimile signature, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
16. Governing Law. The rights and obligations of all parties
hereto shall be governed by the laws of the State of Ohio, without regard to
principles of conflicts of laws.
[Remainder of page intentionally left blank.]
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17. JURY TRIAL WAIVER. EACH OF THE UNDERSIGNED, TO THE EXTENT PERMITTED
BY LAW, HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG THEM, OR ANY OF
THEM, ARISING OUT OF, IN CONNECTION WITH, RELATED TO OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THE RESTRUCTURING
AGREEMENT, THIS AMENDMENT OR ANY DOCUMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT IN ANY WAY
AFFECT, WAIVE, LIMIT, AMEND OR MODIFY THE ABILITY OF ANY OF THE UNDERSIGNED TO
PURSUE REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION
CONTAINED IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG THE
UNDERSIGNED.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
BORROWER:
AMCAST INDUSTRIAL CORPORATION
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President, Finance
GUARANTORS:
ELKHART PRODUCTS CORPORATION
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
AMCAST AUTOMOTIVE OF INDIANA,
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
AS INTERNATIONAL, INC.
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
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IZUMI, INC.
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
AMCAST CASTING TECHNOLOGIES, INC.
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
AMCAST INDUSTRIAL FINANCIAL
SERVICES, INC.
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
AMCAST INVESTMENT SERVICES
CORPORATION
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
CASTING TECHNOLOGY COMPANY
By: Amcast Casting Technologies, Inc.,
a General Partner
By: /s/ Francis J. Drew
Name: Francis J. Drew
Title: Vice President
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RESTRUCTURING LENDERS:
KEYBANK NATIONAL ASSOCIATION,
as Existing Credit Agreement Agent,
an Existing Credit Agreement Bank, a
Line of Credit Lender and as the
Collateral Agent
By: /s/ Dale A. Clayton
Name: Dale A. Clayton
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Stephen C. Brennan
Name: Stephen C. Brennan
Title: Vice President
BANK ONE INDIANA, N.A.
By: /s/ Richard Babcock
Name: Richard Babcock
Title: First Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ Frederik W. Aase
Name: Frederik W. Aase
Title: Vice President
and /s/ Joseph D. Catarina
Name: Joseph D. Catarina
Title: Vice President
NATIONAL CITY BANK
By: /s/ Neal J. Hinker
Name: Neal J. Hinker
Title: Senior Vice President
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U.S. BANK NATIONAL ASSOCIATION
(successor to Firstar Bank, N.A.),
as an Existing Credit Agreement Bank
and a Line of Credit Lender
By: /s/ Greg Wilson
Name: Greg Wilson
Title: VP
COMERICA BANK
By: /s/ Sarah N. Riggs
Name: Sarah N. Riggs
Title: Account Officer
INTESABCI - NEW YORK BRANCH
By:
Name:
Title:
and
Name:
Title:
UNICREDITO ITALIANO SPA
By:
Name:
Title:
and
Name:
Title:
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SAN PAOLO IMI S.p.A.
By: /s/ Luca Sacchi
Name: Luca Sacchi
Title: VP
and /s/ Carlo Persico
Name: Carlo Persico
Title: General Manager
PRINCIPAL LIFE INSURANCE
COMPANY
By: /s/ Debra Svoboda Epp
Name: Debra Svoboda Epp
Title: Counsel
and /s/ Christopher J. Henderson
----------------------------
Name: Christopher J. Henderson
Title: Counsel
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Jeffrey J. Leuken
Name: Jeffrey J. Leuken
Title: Its Authorized Representative
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Exhibit F
Description of Monthly Reporting Package
1. Consolidated operating statements (Month & YTD) vs. Plan vs. prior year
by facility
2. 13 week running cash flow report
3. Income statements by facility-trend report
4. Balance sheets by facility-trend report
5. Accounts Receivables - borrowing base -consolidated and by facility
6. Cash call weekly trend reports by facility. Tracks inventory ,
past dues, labor cost, capital expenditures and headcount
7. Cash call end of month report -tracks by facility: receivables,
payables, capital expenditures and performance cash flow.
8. Capital Expenditures - formal Amcast report
9. Cost Reductions -formal Amcast report
10. Manning status-formal Amcast report
11. Past due receivable trend report- consolidated, by facility
12. Profit drivers- formal Amcast report
13. Report of major new projects, concerns, etc -"State of Amcast"
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