EXHIBIT 4.2
FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Fourth Amendment to Amended and Restated Credit Agreement (the
"AMENDMENT") dated as of November 5, 1999 among Atchison Casting Corporation
(the "BORROWER"), the Banks, and Harris Trust and Savings Bank, as Agent;
W I T N E S S E T H:
WHEREAS, the Borrower, Guarantors, Banks and Harris Trust and Savings
Bank, as Agent, have heretofore executed and delivered an Amended and Restated
Credit Agreement dated as of April 3, 1998 (as amended through the Third
Amendment thereto dated August 20, 1999, the "CREDIT AGREEMENT"); and
WHEREAS, the Borrower intends to incur at least $20,000,000 in
aggregate principal amount of Subordinated Debt; and
WHEREAS, the Banks' and Agent are relying on the Borrower's desire to
incur such Subordinated Debt in amending Section 7.15(e) of the Credit
Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement as
provided herein;
NOW, THEREFORE, for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree that the
Credit Agreement shall be and hereby is amended as follows:
1. The definition of "DOMESTIC RATE MARGIN" appearing in Section
1.3(a) of the Credit Agreement is hereby amended in its entirety and as so
amended shall read as follows:
"DOMESTIC RATE MARGIN" means (A) 0% per annum for any
Pricing Period for which Level I Status exists and (B) 0.25%
per annum for any Pricing Period for which either Level II
Status or Level III Status exists.
2. The definition of "EUROCURRENCY MARGIN" appearing in Section 1.3(b)
of the Credit Agreement is hereby amended in its entirety and as so amended
shall read as follows:
"EUROCURRENCY MARGIN" means (A) 1.60% per annum for
any Pricing Period for which Level I Status exists, (B) 1.85%
per annum for any Pricing Period for which Level II Status
exists, and (C) 2.10% per annum for any Pricing Period for
which Level III Status exists.
3. Section 1.13(a) of the Credit Agreement is hereby amended by
inserting immediately prior to the "." at the end thereof the following:
; PROVIDED, HOWEVER, that the proceeds of the issuance of up
to $20,000,000 of Subordinated Debt on or prior to January 31,
2000 shall be applied as a mandatory repayment of principal of
the Revolving Loans with any amounts of such Subordinated Debt
in excess thereof to be applied as a mandatory repayment of
principal of the Term Loans to be applied 50% in the order of
maturity and 50% in the inverse order of maturity.
4. The definition of "FIXED CHARGES" appearing in Section 4.1
of the Credit Agreement is hereby amended in its entirety and as so amended
shall read as follows:
"FIXED CHARGES" means, as applied to any Person for
any period, the sum of (a) Interest Expense of such Person for
such period, PLUS (b) the aggregate amount of Current
Maturities required to be made by the Borrower and its
Subsidiaries PLUS (c) 15% of the aggregate principal amount of
Revolving Loans outstanding on the last day of such period;
PROVIDED THAT if the Borrower issues at least $20,000,000 in
aggregate principal amount of Subordinated Debt on or prior to
January 31, 2000 clause (c) shall only be effective from and
after July 1, 2000; PROVIDED FURTHER that if the Borrower does
not issue at least $20,000,000 in aggregate principal amount
of Subordinated Debt on or prior to January 31, 2000 clause
(c) above shall be effective for all calculations at all times
after October 1, 1999.
5. Section 7.15(c) of the Credit Agreement is hereby amended in its
entirety and as so amended shall read as follows:
(c) RATIO OF CONSOLIDATED TOTAL DEBT TO TOTAL
CAPITALIZATION. The Borrower will not on any date permit
Consolidated Total Debt to exceed 55% of Total Capitalization.
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6. Section 7.15(e) of the Credit Agreement is hereby amended in
its entirety and as so amended shall read as follows:
(e) FIXED CHARGE COVERAGE RATIO. (i) If the Borrower
issues at least $20,000,000 in aggregate principal amount of
Subordinated Debt on or prior to January 31, 2000, the
Borrower will not, as of the last day of each fiscal quarter
of the Borrower ending during each of the periods specified
below permit the Fixed Charge Coverage Ratio to be less than :
FROM AND INCLUDING TO AND FIXED CHARGE COVERAGE
INCLUDING RATIO SHALL NOT BE LESS
THAN:
December 31, 1999 June 30, 2000 1.10
July 1, 2000 Thereafter 1.25
(ii) If the Borrower does not issue at least
$20,000,000 in aggregate principal amount of Subordinated Debt
on or prior to January 31, 2000, the Borrower will not, as of
the last day of each fiscal quarter of the Borrower ending
during each of the periods specified below permit the Fixed
Charge Coverage Ratio to be less than :
FROM AND INCLUDING TO AND FIXED CHARGE COVERAGE
INCLUDING RATIO SHALL NOT BE LESS THAN:
December 31, 1999 March 30, 2000 1.10
March 31, 2000 March 30, 2001 1.25
March 31, 2001 Thereafter 1.50
7. Section 7.18(d) of the Credit Agreement is hereby amended in its
entirety and as so amended shall be as follows:
(d) the Borrower and its Subsidiaries may make and
own Investments in any Subsidiary of the Borrower or, from and
after May 1, 2000 make and own or enter into any agreement to
make or own Investments, in any Person which simultaneously
therewith becomes a Subsidiary provided that such Person is
engaged primarily in the foundry business or in businesses
reasonably related thereto and (A) at least 7 days before
consummation of such acquisition, the Borrower delivers to the
Agent a certificate of the Chief Financial Officer, Controller
or Treasurer of the Borrower certifying that immediately upon
and following the consummation of such acquisition, the
Borrower, on a PRO FORMA basis (assuming such acquisition had
been consummated on the first day of the most recently ended
period of four fiscal quarters for which financial statements
have been or are required to have
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been delivered pursuant to Section 7.6), the Borrower would
have a Fixed Charge Coverage Ratio (which for purposes of
this Section 7.18(d) Fixed Charges shall at all times be
calculated including clause (c) of the definition of Fixed
Charges) of at least 1.50 to 1.00 (which certificate shall
set forth calculations supporting such statement) and (B)
either (i) at the time of such acquisition and after giving
effect thereto the Borrower's ratio of Consolidated Total
Debt to Total Capitalization does not exceed 40% (the "40%
THRESHOLD") or (ii) once the 40% Threshold has been exceeded
in that fiscal year, the total aggregate principal amount
expended for all acquisitions thereafter in such fiscal year
does not exceed 25% of the Stockholder's Equity of the
Borrower as of the last day of the immediately preceding
fiscal year of the Borrower PLUS 25% of the net proceeds (net
proceeds for such purposes to mean gross proceeds less
reasonable underwriting discounts and commissions and other
reasonable costs directly incurred and payable as a result
thereof) received by the Borrower from the issuance of
additional equity or Subordinated Debt during the fiscal year
of the proposed acquisition; PROVIDED that the Borrower will
not, and will not permit any of its Subsidiaries to, directly
or indirectly (through a Subsidiary or otherwise) increase
its Investment in Fonderie d'Autun, a French corporation,
above the amount outstanding on August 20, 1999 without the
consent of the Required Banks; and
8. If the Borrower (i) has not on or before December 15, 1999
received written commitments in form and substance acceptable to
the Required Banks from a lender or lenders acceptable to the
Required Banks to advance not less than $20,000,000 in aggregate
principal amount of Subordinated Debt to the Borrower or (ii)
has not actually received at least $20,000,000 in aggregate
principal amount of such Subordinated Debt on or before January
31, 2000, then the Borrower shall within 60 days of December 15,
1999 or January 31, 2000, as applicable, provide (a) prior,
perfected and enforceable liens in all right title and interest
of the Borrower and of each Subsidiary in all cash and cash
equivalents, accounts, chattel paper, general intangibles,
instruments, investment property, documents, inventory,
equipment and real property of every kind and description
whether now owned or hereafter acquired and all proceeds thereof
(collectively, the "COLLATERAL"). The liens in the Collateral
shall be granted to the Agent for the ratable account of the
Banks and shall be valid and perfected first liens subject to
such exceptions as the Required Banks may agree. The Borrower
covenants and agrees that it shall and shall cause each
Subsidiary to execute such documents and instruments as the
Agent or the Required Banks shall from time to time request and
do such acts and things as the Agent or the Required Banks may
reasonably request in order to provide for or protect or perfect
the lien of the Agent in the Collateral as required herein.
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9. The Borrower represents and warrants to each Bank and the Agent
that (a) each of the representations and warranties set forth in Section 5 of
the Credit Agreement is true and correct on and as of the date of this Amendment
as if made on and as of the date hereof and as if each reference therein to the
Credit Agreement referred to the Credit Agreement as amended hereby; (b) after
giving effect to this Amendment, no Default and no Event of Default has occurred
and is continuing; and (c) without limiting the effect of the foregoing, the
Borrower's execution, delivery and performance of this Amendment have been duly
authorized, and this Amendment has been executed and delivered by duly
authorized officers of the Borrower.
10. This Amendment shall become effective upon satisfaction of the
following conditions precedent:
(i) the Borrower, the Required Banks, and the Agent shall
have executed and delivered this Amendment and the Guarantors shall
have executed the consent attached hereto; and
(ii) the Agent shall have an amendment fee in the amount
of $100,000 to be shared by the Banks PRO RATA based on their each such Bank's
Percentage.
This Amendment may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each of which
when so executed shall be an original but all of which shall constitute one and
the same instrument. Except as specifically amended and modified hereby, all of
the terms and conditions of the Credit Agreement and the other Credit Documents
shall remain unchanged and in full force and effect. All references to the
Credit Agreement in any document shall be deemed to be references to the Credit
Agreement as amended hereby. All capitalized terms used herein without
definition shall have the same meaning herein as they have in the Credit
Agreement. This Amendment shall be construed and governed by and in accordance
with the internal laws of the State of Illinois.
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Dated as of the date first above written.
ATCHISON CASTING CORPORATION
By: /s/ Kevin T. McDermed
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Title: V.P. & Treasurer
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HARRIS TRUST AND SAVINGS BANK, in its
individual capacity as a Bank
and as Agent
By: /s/ Len E. Myer
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Title: Vice President
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COMMERCE BANK, N.A.
By: /s/ Dennis R. Block
---------------------------------
Title: Senior Vice President
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MERCANTILE BANK
By: /s/ Barry P. Sullivan
---------------------------------
Title: Vice President
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KEY BANK NATIONAL ASSOCIATION
By: /s/ Daniel Lally
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Title: Assistant Vice President
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COMERICA BANK
By: /s/ Jeffrey Peck
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Title: Vice President
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HIBERNIA NATIONAL BANK
By:
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Title:
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NATIONAL WESTMINSTER BANK PLC
Nassau Branch
By: /s/ C.A. Parsons
--------------------------------
Title: Corporate Director
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New York Branch
By: /s/ C.A. Parsons
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Title: Corporate Director
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NORWEST BANK MINNESOTA, N.A.
By: /s/ R. Duncan Sinclair
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Title: V.P.
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