E x e c u t i o n C o p y
SIXTEENTH AMENDMENT TO CREDIT AGREEMENT
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THIS SIXTEENTH AMENDMENT TO CREDIT AGREEMENT (this
"Amendment"), dated as of March 26, 1999, is by and between
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KAISER ALUMINUM & CHEMICAL CORPORATION, a Delaware
corporation (the "Company"), KAISER ALUMINUM CORPORATION, a
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Delaware corporation (the "Parent Guarantor"), the various
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financial institutions that are or may from time to time
become parties to the Credit Agreement referred to below
(collectively, the "Lenders" and, individually, a "Lender"),
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and BANKAMERICA BUSINESS CREDIT, INC., a Delaware
corporation, as agent (in such capacity, together with its
successors and assigns in such capacity, the "Agent") for
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the Lenders. Capitalized terms used, but not defined,
herein shall have the meanings given to such terms in the
Credit Agreement, as amended hereby.
W I T N E S S E T H:
WHEREAS, the Company, the Parent Guarantor, the
Lenders and the Agent are parties to the Credit Agreement,
dated as of February 15, 1994, as amended by the First
Amendment to Credit Agreement, dated as of July 21, 1994,
the Second Amendment to Credit Agreement, dated as of March
10, 1995, the Third Amendment to Credit Agreement and
Acknowledgement, dated as of July 20, 1995, the Fourth
Amendment to Credit Agreement, dated as of October 17, 1995,
the Fifth Amendment to Credit Agreement, dated as of
December 11, 1995, the Sixth Amendment to Credit Agreement,
dated as of October 1, 1996, the Seventh Amendment to Credit
Agreement, dated as of December 17, 1996, the Eighth
Amendment to Credit Agreement, dated as of February 24,
1997, the Ninth Amendment to Credit Agreement and
Acknowledgment, dated as of April 21, 1997, the Tenth
Amendment to Credit Agreement and Assignment, dated as of
June 25, 1997, the Eleventh Amendment to Credit Agreement
and Limited Waivers, dated as of October 20, 1997, the
Twelfth Amendment to Credit Agreement, dated as of January
13, 1998, the Thirteenth Amendment to Credit Agreement,
dated as of July 20, 1998, the Fourteenth Amendment to
Credit Agreement, dated as of December 11, 1998, and the
Fifteenth Amendment to Credit Agreement, dated as of
February 23, 1999 (the "Credit Agreement"); and
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WHEREAS, the parties hereto have agreed to amend
the Credit Agreement as herein provided;
NOW, THEREFORE, the parties hereto agree as
follows:
Section 1. Amendments to Credit Agreement.
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1.1 Amendments to Article I: Definitions and
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Accounting Terms.
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Subsection 1.1 of the Credit Agreement is hereby
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amended by amending the definition of "Minimum Net Worth"
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contained therein to read in its entirety as follows:
"'Minimum Net Worth' means (a) for each Fiscal
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Quarter of the Company ending on or prior to
December 31, 1998 (commencing with the Fiscal
Quarter ending September 30, 1996), $500,000,000
plus 50% of Net Income (but not loss) for each
such Fiscal Quarter and (b) for each Fiscal
Quarter of the Company ending after 1998,
$600,000,000 plus 50% of Net Income (but not loss)
for each such Fiscal Quarter."
1.2 Amendments to Article IX: Covenants.
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A. Section 9.2.4(a) of the Credit Agreement is
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hereby amended by deleting the proviso contained therein and
substituting the following therefor: "provided that for
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purposes of this Section 9.2.4(a), the calculation of Net
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Worth shall exclude the effect of any non-cash charges, up
to an aggregate amount of $70,000,000, in respect of the
Micromill project, including (without limitation) any write-
down of Micromill project assets located at the Center for
Technology in Pleasanton, California, and at the Micromill
facility near Reno, Nevada."
B. Section 9.2.4(b) of the Credit Agreement is
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hereby amended to read in its entirety as follows:
"(b) Interest Coverage Ratio. The Company shall
not permit the Interest Coverage Ratio (i) for the one
Fiscal Quarter period ending March 31, 1996 to be less
than 1.1 to 1.0, (ii) for the two Fiscal Quarter period
ending June 30, 1996 to be less than 1.2 to 1.0,
(iii) for the three Fiscal Quarter period ending
September 30, 1996 to be less than 0.5 to 1.0, (iv) for
the four Fiscal Quarter period ending December 31, 1996
to be less than 0.3 to 1.0, (v) for the one Fiscal
Quarter period ending June 30, 1997 to be less than 0.2
to 1.0, (vi) for the two Fiscal Quarter period ending
September 30, 1997 to be less than 0.4 to 1.0,
(vii) for the three Fiscal Quarter period ending
December 31, 1997 to be less than 0.6 to 1.0 and
(viii) for the four Fiscal Quarter period ending on the
last day of each of the Fiscal Quarters set forth below
to be less than the correlative ratio indicated:
Date
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Ratio
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First Fiscal Quarter of 1998
0.80 to
1.00
Second Fiscal Quarter of 1998
1.20 to
1.00
Third Fiscal Quarter of 1998
1.60 to
1.00
Fourth Fiscal Quarter of 1998
1.10 to
1.00
First Fiscal Quarter of 1999
No Test
Second Fiscal Quarter of 1999
No Test
Third Fiscal Quarter of 1999
No Test
Fourth Fiscal Quarter of 1999
No Test
First Fiscal Quarter of 2000
0.50 to
1.00
Second Fiscal Quarter of 2000
0.50 to
1.00
Third Fiscal Quarter of 2000
0.50 to
1.00
Fourth Fiscal Quarter of 2000
0.50 to
1.00
First Fiscal Quarter of 2001
0.75 to
1.00
Second Fiscal Quarter of 2001
1.00 to
1.00
; provided that for purposes of calculating the
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Interest Coverage Ratio under this Section 9.2.4(b),
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EBITDA shall exclude the effect of any non-cash
charges, up to an aggregate amount of $70,000,000, in
respect of the Micromill project, including (without
limitation) any write-down of Micromill project assets
located at the Center for Technology in Pleasanton,
California, and at the Micromill facility near Reno,
Nevada."
C. Section 9.2.8 of the Credit Agreement is
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hereby amended by deleting the term "$35,000,000"
contained therein and substituting the term
"$45,000,000" therefor.
Section 2. Conditions to Effectiveness.
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This Amendment shall become effective as of the
date hereof only when the following conditions shall have
been satisfied and notice thereof shall have been given by
the Agent to the Parent Guarantor, the Company and each
Lender (the date of satisfaction of such conditions and the
giving of such notice being referred to herein as the
"Sixteenth Amendment Effective Date"):
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A. The Agent shall have received for each Lender
counterparts hereof duly executed on behalf of the Parent
Guarantor, the Company, the Agent and the Required Lenders
(or notice of the approval of this Amendment by the Required
Lenders satisfactory to the Agent shall have been received
by the Agent).
B. The Agent shall have received:
(1) Resolutions of the Board of Directors or
of the Executive Committee of the Board of Directors of the
Company and the Parent Guarantor approving and authorizing
the execution, delivery and performance of this Amendment,
certified by their respective corporate secretaries or
assistant secretaries as being in full force and effect
without modification or amendment as of the date of
execution hereof by the Company or the Parent Guarantor, as
the case may be;
(2) A signature and incumbency certificate
of the officers of the Company and the Parent Guarantor
executing this Amendment;
(3) For each Lender, an opinion, addressed
to the Agent and each Lender, from Kramer Levin Naftalis &
Frankel LLP, in form and substance satisfactory to the
Agent;
(4) Such other information, approvals,
opinions, documents or instruments as the Agent may
reasonably request; and
(5) For the pro rata benefit of the Lenders,
a fee in the amount of $500,000.
Section 3. Company's Representations and
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Warranties.
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In order to induce the Lenders and the Agent to
enter into this Amendment and to amend the Credit Agreement
in the manner provided herein, the Parent Guarantor and the
Company represent and warrant to each Lender and the Agent
that, as of the Sixteenth Amendment Effective Date, after
giving effect to the effectiveness of this Amendment, the
following statements are true and correct in all material
respects:
A. Authorization of Agreements. The execution
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and delivery of this Amendment by the Company and the Parent
Guarantor and the performance of the Credit Agreement as
amended by this Amendment (the "Amended Agreement") by the
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Company and the Parent Guarantor are within such Obligor's
corporate powers and have been duly authorized by all
necessary corporate action on the part of the Company and
the Parent Guarantor, as the case may be.
B. No Conflict. The execution and delivery by
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the Company and the Parent Guarantor of this Amendment and
the performance by the Company and the Parent Guarantor of
the Amended Agreement do not:
(1) contravene such Obligor's Organic
Documents;
(2) contravene the Senior Indenture, the New
Senior Indenture, the Additional New Senior Indentures, or
the Subordinated Indenture or contravene any other
contractual restriction where such a contravention has a
reasonable possibility of having a Materially Adverse Effect
or contravene any law or governmental regulation or court
decree or order binding on or affecting such Obligor or any
of its Subsidiaries; or
(3) result in, or require the creation or
imposition of, any Lien on any of such Obligor's properties
or any of the properties of any Subsidiary of such Obligor,
other than pursuant to the Loan Documents.
C. Binding Obligation. This Amendment has been
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duly executed and delivered by the Company and the Parent
Guarantor and this Amendment and the Amended Agreement
constitute the legal, valid and binding obligations of the
Company and the Parent Guarantor, enforceable against the
Company and the Parent Guarantor in accordance with their
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally and by
general principles of equity.
D. Governmental Approval, Regulation, etc. No
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authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory
body or any other Person is required for the due execution,
delivery or performance of this Amendment by the Company or
the Parent Guarantor.
E. Incorporation of Representations and
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Warranties from Credit Agreement. Each of the statements
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set forth in Section 7.2.1 of the Credit Agreement is true
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and correct.
Section 4. Acknowledgement and Consent.
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The Company is a party to the Company Collateral
Documents, in each case as amended through the date hereof,
pursuant to which the Company has created Liens in favor of
the Agent on certain Collateral to secure the Obligations.
The Parent Guarantor is a party to the Parent Collateral
Documents, in each case as amended through the date hereof,
pursuant to which the Parent Guarantor has created Liens in
favor of the Agent on certain Collateral and pledged certain
Collateral to the Agent to secure the Obligations of the
Parent Guarantor. Certain Subsidiaries of the Company are
parties to the Subsidiary Guaranty and/or one or more of the
Subsidiary Collateral Documents, in each case as amended
through the date hereof, pursuant to which such Subsidiaries
have (i) guarantied the Obligations and/or (ii) created
Liens in favor of the Agent on certain Collateral. The
Company, the Parent Guarantor and such Subsidiaries are
collectively referred to herein as the "Credit Support
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Parties", and the Company Collateral Documents, the Parent
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Collateral Documents, the Subsidiary Guaranty and the
Subsidiary Collateral Documents are collectively referred to
herein as the "Credit Support Documents".
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Each Credit Support Party hereby acknowledges that
it has reviewed the terms and provisions of the Credit
Agreement as amended by this Amendment and consents to the
amendment of the Credit Agreement effected as of the date
hereof pursuant to this Amendment.
Each Credit Support Party acknowledges and agrees
that any of the Credit Support Documents to which it is a
party or otherwise bound shall continue in full force and
effect. Each Credit Support Party hereby confirms that each
Credit Support Document to which it is a party or otherwise
bound and all Collateral encumbered thereby will continue to
guaranty or secure, as the case may be, the payment and
performance of all obligations guaranteed or secured
thereby, as the case may be.
Each Credit Support Party (other than the Company
and the Parent Guarantor) acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in
this Amendment, such Credit Support Party is not required by
the terms of the Credit Agreement or any other Loan Document
to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the
Credit Agreement, this Amendment or any other Loan Document
shall be deemed to require the consent of such Credit
Support Party to any future amendments to the Credit
Agreement.
Section 5. Miscellaneous.
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A. Reference to and Effect on the Credit
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Agreement and the Other Loan Documents.
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(1) On and after the Sixteenth Amendment
Effective Date, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words
of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a
reference to the Amended Agreement.
(2) Except as specifically amended by this
Amendment, the Credit Agreement and the other Loan Documents
shall remain in full force and effect and are hereby
ratified and confirmed.
B. Applicable Law. THIS AMENDMENT SHALL BE
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DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO SUCH LAWS RELATING TO CONFLICTS OF LAWS.
C. Headings. The various headings of this
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Amendment are inserted for convenience only and shall not
affect the meaning or interpretation of this Amendment or
any provision hereof.
D. Counterparts. This Amendment may be executed
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by the parties hereto in several counterparts and by the
different parties on separate counterparts, each of which
shall be deemed to be an original and all of which shall
constitute together but one and the same instrument;
signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that
all signature pages are physically attached to the same
document.
E. Severability. Any provision of this
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Amendment which is prohibited or unenforceable in any
jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions of this Amendment or affecting the
validity or enforceability of such provisions in any other
jurisdiction.
IN WITNESS WHEREOF, this Amendment has been duly
executed and delivered as of the day and year first above
written.
KAISER ALUMINUM CORPORATION KAISER ALUMINUM &
CHEMICAL CORPORATION
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
BANKAMERICA BUSINESS CREDIT, BANKAMERICA BUSINESS
INC., as Agent CREDIT, INC.
By:/s/Michael J. Jasaitis By:/s/Michael J. Jasaitis
Name: Michael J. Jasaitis Name: Michael J. Jasaitis
Its: Vice President Its: Vice President
BANK OF AMERICA NATIONAL TRUST THE CIT GROUP/BUSINESS
AND SAVINGS ASSOCIATION CREDIT, INC.
By:/s/Michael Balok By:/s/Neal T. Legan
Name Printed: Michael Balok Name Printed:Neal T.
Legan
Its: Managing Director Its: Vice President
CONGRESS FINANCIAL CORPORATION HELLER FINANCIAL, INC.
(WESTERN)
By:/s/Kristine Metchikian By:/s/T. Bukowski
Name Printed: Kristine Metchikian Name Printed: T. Bukowski
Its: Vice President Its:Senior Vice President
LA SALLE NATIONAL BANK TRANSAMERICA BUSINESS
CREDIT CORPORATION
By:/s/Douglas C. Colletti By:/s/R. L. Heinz
Name Printed:Doublas C. Colletti Name Printed:R. L. Heinz
Its: First Vice President Its:Senior Vice President
ABN AMRO BANK N.V.
San Francisco International Branch
By: ABN AMRO North America,
Inc., as agent
By: /s/Michael M. Tolentino
Name Printed: Michael M. Tolentino
Its: Vice President
By: /s/Jeffrey A. French
Name Printed: Jeffrey A. French
Its: Group Vice President
ACKNOWLEDGED AND AGREED TO:
AKRON HOLDING CORPORATION KAISER ALUMINUM &
CHEMICAL INVESTMENT, INC.
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
KAISER ALUMINUM PROPERTIES, KAISER ALUMINUM TECHNICAL
INC. SERVICES, INC.
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
OXNARD FORGE DIE COMPANY, INC. KAISER ALUMINIUM
INTERNATIONAL, INC.
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
KAISER ALUMINA AUSTRALIA KAISER FINANCE
CORPORATION CORPORATION
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
ALPART JAMAICA INC. KAISER JAMAICA
CORPORATION
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
KAISER BAUXITE COMPANY KAISER EXPORT COMPANY
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
KAISER MICROMILL HOLDINGS, LLC KAISER SIERRA
MICROMILLS, LLC
By:/s/Ronald L. Reman By:/s/David A. Cheadle
Name Printed: Ronald L. Reman Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
KAISER TEXAS SIERRA MICROMILLS, KAISER TEXAS MICROMILL
LLC HOLDINGS, LLC
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer
KAISER BELLWOOD CORPORATION KAISER TRANSACTION CORP.
By:/s/David A. Cheadle By:/s/David A. Cheadle
Name Printed: David A. Cheadle Name Printed: David A.
Cheadle
Its: Assistant Treasurer Its: Assistant Treasurer