AMENDMENT NO. 1 TO LIFO RESTRUCTURING AGREEMENT
This Amendment No. 1 to LIFO 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 LIFO
Restructuring Agreement (as hereinafter defined)
(together with Borrower, collectively, the "Credit Parties");
(c) the lending institutions parties hereto (the "LIFO Banks");
and
(d) KEYBANK NATIONAL ASSOCIATION, as agent for the LIFO Banks
("LIFO Agent" and together with the LIFO Banks, collectively,
the "LIFO Lenders").
RECITALS:
A. The Credit Parties, the Guarantors and the LIFO Lenders are parties
to the LIFO Restructuring Agreement, dated as of July 15, 2002 (as the same may
from time to time be amended, restated or otherwise modified, the "LIFO
Restructuring Agreement").
B. The Credit Parties, the Guarantors and the LIFO Lenders desire to
amend the LIFO 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 LIFO Restructuring Agreement.
AGREEMENT:
In consideration of the premises and mutual covenants herein and for
other valuable considerations, the Credit Parties and the LIFO Lenders agree as
follows:
1. New Definitions. Section 1.1 of the LIFO Restructuring
Agreement is hereby amended to add the following new definitions thereto:
"Domestic Adjusted EBITDA" means Domestic EBITDA other than
Domestic EBITDA attributable to CTC Company (as defined in the LIFO
Credit Agreement).
"Domestic Fixed Charges" means, for any period, on a
Consolidated basis (but excluding Foreign Subsidiaries and CTC Company,
as defined in the LIFO Credit Agreement as in effect on the date
hereof) 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
LIFO Credit Agreement as in effect on the date hereof), and (c)
Consolidated Capital Expenditures (as defined in the LIFO 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(e) hereof.
2. Amendment to Mandatory Prepayment Provisions. Section 3.5
of the LIFO Restructuring Agreement is hereby amended and restated in its
entirety as follows:
3.5. Mandatory Prepayments.
---------------------
(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 Subordinated 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 Subordinated
Lender Obligations, on a pro rata basis; provided, however, that any
voluntary prepayment of the Subordinated 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 Subordinated
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.
2
(c) The Borrowing Base shall be reduced by an amount equal to
the sum of all Additional Prepayments made at or prior to the time the
Borrowing Base is calculated.
3. Monthly Reporting. Section 3.6 of the LIFO 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 LIFO Lenders a monthly financial reporting
package that includes the items set forth on Exhibit B hereto, and is
otherwise in form and detail satisfactory to the LIFO Lenders.
4. Amendment to Financial Covenants. Section 3.8 of the LIFO
Restructuring Agreement is hereby amended and restated in its entirety as
follows:
3.8 Financial Covenants. The LIFO Lenders and Borrower agree
that the financial covenants set forth below shall replace the
financial covenants set forth in Section 4.7(b), (c) and (d) of the
LIFO Credit Agreement. Borrower shall comply at all times with each of
the following:
(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.
3
(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.
5. Special Reserve Funds. Section 3.10 of the LIFO
Restructuring Agreement is hereby amended to add the following new subpart (e)
thereto:
(e) 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(b) above 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 Subordinated Lender Obligations
and the LIFO Lender Obligations in accordance with the terms of the
Subordinated 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.
6. Consent. The LIFO Lender Documents prohibit the sale, lease,
transfer or other disposition of assets by the Companies except as specifically
permitted in such LIFO Lender Documents. Borrower has advised the LIFO 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
4
the LIFO Lenders consent to the sale of the Specified Property notwithstanding
the restrictions set forth in the LIFO Lender Documents. By signing this
Amendment, the LIFO Lenders hereby consent to the sale of the Specified Property
on the terms and conditions described by Borrower to the LIFO Lenders on the
conditions that (i) no Termination Event shall exist under the LIFO
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 LIFO 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.
7. Consent to Restructuring Amendment. Each of the LIFO
Lenders party hereto consents to and acknowledges the terms of Amendment No.
1 to the Subordinated Lender Restructuring Agreement (the "Subordinated
Lender Restructuring Amendment") which is being entered into concurrently
herewith.
8. New Exhibit. The LIFO Restructuring Agreement is hereby
amended by adding a new Exhibit B (Monthly Reporting Package) thereto in the
form of Exhibit B attached hereto.
9. 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 and the
LIFO Lenders;
(b) the Subordinated Lender Restructuring Amendment has been
executed by the parties thereto;
(c) Borrower has paid all legal fees and expenses of the LIFO
Agent; and
(d) Borrower has provided such other items and has satisfied such other
conditions as may be reasonably required by the LIFO Lenders.
10. Representations and Warranties. Each Credit Party hereby represents
and warrants to the LIFO 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 LIFO
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 LIFO Restructuring Agreement or any LIFO
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.
5
11. LIFO Restructuring Agreement Unaffected. Each reference that is
made in the LIFO Restructuring Agreement shall hereafter be construed as a
reference to the LIFO Restructuring Agreement as amended hereby. This Amendment
is a LIFO Lender Document. Except as herein otherwise specifically provided, all
provisions of the LIFO Restructuring Agreement shall remain in full force and
effect and be unaffected hereby.
12. 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.
13. 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 AND EACH LIFO LENDER, 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 LIFO 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.
14. 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.
6
15. 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.
7
16. 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 LIFO 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
8
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
9
LIFO LENDERS:
KEYBANK NATIONAL ASSOCIATION,
as LIFO Agent and a LIFO Bank
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
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
10
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
11
Exhibit B
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"
12