AMENDMENT TO CREDIT AGREEMENT
This Amendment to Credit Agreement (the "Amendment") is made and
entered into as of June 29, 2001, by and among:
(1) Commonwealth Industries, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware (the "Parent") and the
successor by merger to CI Holdings, Inc.;
(2) CA Lewisport, Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware and formerly known as
Commonwealth Aluminum Lewisport, Inc., and as Commonwealth Aluminum Corporation
("Old Lewisport");
(3) CI Holdings, Inc., a corporation duly organized and validly
existing under the laws of the State of Delaware and formerly known as Alflex
Corporation ("CI Holdings");
(4) Commonwealth Aluminum Concast, Inc., a corporation duly organized
and validly existing under the laws of the State of Ohio ("CACI");
(5) Commonwealth Aluminum Corporation, a corporation duly organized and
validly existing under the laws of the State of Delaware ("CAC");
(6) Alflex Corporation, a corporation duly organized and validly
existing under the laws of the State of Delaware ("New Alflex");
(7) Commonwealth Aluminum Lewisport, LLC, a limited liability company
duly formed and validly existing under the laws of the State of Delaware ("New
Lewisport");
(8) Commonwealth Aluminum Metals, LLC, a limited liability company duly
formed and validly existing under the laws of the State of Delaware ("Metals";
each of CAC, CACI, Old Lewisport, CI Holdings, New Alflex, New Lewisport and
Metals is sometimes hereafter referred to as a "Borrower" and collectively as
the "Borrowers");
(9) The Subsidiaries of the Parent identified by the caption
"Subsidiary Guarantors" on the signature pages hereto (the "Subsidiary
Guarantors"; the Subsidiary Guarantors, the Parent and the Borrowers are
sometimes hereafter referred to collectively as the "Obligors");
(10) Bank One, Indiana, NA, for itself and as administrative agent for
the Lenders (as hereafter defined) (the "Administrative Agent").
PRELIMINARY STATEMENTS:
A. Parent, each of the Borrowers, each of the Subsidiary Guarantors and each of
the Lenders are parties to a certain Second Amended and Restated Credit
Agreement dated as of December 19, 1997, as amended by Amendment No. 1 to Credit
Agreement dated December 22, 1998, an Agreement of Resignation, Appointment and
Acceptance dated August 18, 1999, a Amendment dated as of October 29, 1999, a
Amendment dated as of December 31, 1999, and a letter agreement dated as of
December 27, 2000 (as amended from time to time, the "Credit Agreement").
B. Parent, each of the Borrowers, each of the Subsidiary Guarantors and the
Administrative Agent (as successor to National Westminster Bank PLC pursuant to
the Agreement of Resignation, Appointment and Acceptance dated August 18, 1999)
are parties to a certain Amended and Restated Pledge and Security Agreement
dated as of November 29, 1996, as amended by Amendment No. 1 dated as of
December 19, 1997, by a Amendment dated as of October 29, 1999, and by a
Amendment dated as of December 31, 1999 (as amended, the "Pledge Agreement").
C. The Obligors have requested that the Lenders agree to amend the Credit
Agreement in certain respects.
D. The Lenders are willing to do so, but only upon the terms and subject to
the conditions set forth in this Amendment.
NOW THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to be
legally bound hereby, covenant and agree as follows:
1. Definitions.
-----------
All terms with their initial letters capitalized herein, but not
otherwise defined herein, shall have the meanings given such terms in the Credit
Agreement.
2. Amendments to the Credit Agreement.
----------------------------------
(a) Amendment to Section 1.01. The definition of "Fixed Charges Ratio"
set forth in Section 1.01 of the Credit Agreement is hereby amended and modified
so that, as amended and modified, it shall read in its entirety as follows:
"'Fixed Charges Ratio' shall mean, as at any date, the ratio
of (a) EBITDA for the then-current Calculation Period, to (b)
the sum of (i) Total Interest Expense for such period, plus
(ii) taxes actually paid during such period, plus (iii)
Maintenance Capital Expenditures. For purposes hereof,
`Maintenance Capital Expenditures' shall mean, for any period,
an amount equal to the Capital Expenditures for such period,
less all amounts included therein on account of expenditures
associated with the acquisition or construction of fixed
assets, plant and equipment acquired or constructed
exclusively to (x) increase or expand capacity at one of the
Obligors' facilities, (y) improve the capabilities of, or add
one or more new capabilities to, one of the Obligors'
facilities, and (z) reduce the operating cost of, or the
capital invested in, one of the Obligors' facilities."
(b) Amendment to Section 1.01. The definition of "EBITDA" set forth in
Section 1.01 of the Credit Agreement is hereby amended and modified so that, as
amended and modified, it shall read in its entirety as follows:
"'EBITDA' shall mean for any period the sum, for the Parent and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) net income for such period, plus
(b) the amount of Total Interest for such period, plus (c) income and other
taxes paid during such period, plus (d) depreciation and amortization for such
period, plus (e) extraordinary losses for such period, plus (f) in the case of
any period during calendar year 2002, an amount equal to the amount deducted, on
account of impairment of goodwill, in calculating net income for such period in
accordance with GAAP, minus (g) extraordinary gains for such period, minus (h)
interest received during such period.
(c) Amendment to Subsection 2.01(a)(ii). Subsection
2.01(a)(ii) of the Credit Agreement is hereby modified and amended so that, as
modified and amended, it shall read in its entirety as follows:
"In addition to the Revolving Credit Loans provided for under
Section 2.01(a)(i) hereof, each Revolving Credit Lender
severally agrees, on the terms and conditions of this
Agreement, to make loans to each of the Borrowers in Dollars
during the Revolving Credit Borrowing Period in an aggregate
unpaid principal amount at any one time outstanding (as to all
such Borrowers) up to but not exceeding the amount of the
Revolving Credit Commitment of such Lender as in effect from
time to time, provided, that in no event shall the sum of:
(x) the aggregate principal amount of all Revolving
Credit Loans (including all Swingline Loans),
together with the amount of all Letter of Credit
Liabilities, plus
(y) the aggregate amount of the Reserved Commitments
exceed an amount equal to the lesser of:
(aa) the aggregate amount of the Revolving Credit
Commitments as in effect from time to time, or
(ab) the Borrowing Base as of the end of the most
recently ended quarterly fiscal period of the Parent.
For purposes of this Agreement, `Borrowing Base' shall mean
Sixty-Five Million Dollars ($65,000,000), until such time as
the Obligors and the Majority Lenders otherwise agree in
writing. The Administrative Agent and each of the Obligors
agrees to use commercially reasonable efforts to complete a
field audit of the Obligors by July 31, 2001, and following
such audit, the Administrative Agent agrees to promptly
recommend to the Lenders a definition of Borrowing Base based
upon levels of inventory. "
(d) Amendment to Section 2.02. Section 2.02 of the Credit Agreement is
hereby amended and modified so that, as amended and modified, it shall read in
its entirety as follows:
"2.02 Borrowings. Each Borrower shall give the Administrative
Agent (or, in the case of Swingline Loans, shall give the
Swingline Lender) notice of each borrowing by it hereunder as
provided in Section 4.05 hereof, accompanied by a certificate
of the Parent's Responsible Officer stating that, after giving
effect to the requested borrowing and to the best of his
knowledge after reasonable inquiry, the sum of:
(a) the aggregate principal amount of all Revolving
Credit Loans (including all Swingline Loans),
together with the amount of all Letter of Credit
Liabilities, plus
(b) the aggregate amount of the Reserved Commitments
will not exceed an amount equal to the amount the Borrowing
Base would be if the Borrowing Base were calculated using
then-current inventory values."
(e) New Subsection 9.01(h). A new subsection 9.01(h) is hereby added
to the Credit Agreement, which subsection shall provide in its entirety as
follows:
"(h) as soon as available and in any event within 45 days
after the end of each quarterly fiscal period of each fiscal
year of the Parent, a certificate of the Parent's Responsible
Officer, in a form acceptable to the Administrative Agent in
its sole discretion, calculating the Borrowing Base for such
quarterly fiscal period."
(f) Amendment to Section 9.10. Section 9.10(a) and (b) of the Credit
Agreement is hereby modified and amended so that, as modified and amended, it
shall read in its entirety as follows:
"9.10 Certain Financial Covenants.
(a) Leverage Ratio. The Parent will not permit the
Total Leverage Ratio to exceed the following respective ratios at any time
during the following respective periods:
Period Ratio
From and including
the Restatement Effective Date
to and including
December 30, 1998 3.50 to 1.00
From and including
December 31, 1998
To and including
December 30, 1999 3.25 to 1.00
From and including
December 31, 1999
To and including
December 30, 2000 3.00 to 1.00
From and including
December 31, 2000
To and including
March 31, 2001 2.75 to 1.00
From and including
April 1, 2001
to and including
December 31, 2001 [3.50] to 1.00
From and including
January 1, 2002
to and including
March 31, 2002 [3.25] to 1.00
From and including
April 1, 2002
to and including
June 30, 2002 [3.00] to 1.00
From and including
July 1, 2002
and at all times thereafter [2.50] to 1.00
(b) Interest Coverage Ratio. The Parent will not
permit the Total Interest Coverage Ratio to be less than the following
respective ratios at any time during the following respective periods:
Periods: Ratios:
From the Restatement Effective Date
through December 30, 1998 2.00 to 1.00
From December 31, 1998
through September 29, 1999 2.25 to 1.00
From September 30, 1999
through December 30, 1999 2.50 to 1.00
From December 31, 1999
through December 30, 2000 3.00 to 1.00
From December 31, 2000
through March 31, 2001 2.75 to 1.00
From April 1, 2001
through December 31, 2001 [2.00] to 1.00
From January 1, 2002
through March 31, 2002 [2.50] to 1.00
From April 1, 2002
and at all times thereafter [3.00] to 1.00"
3. Affirmation of Representations and Warranties. Each of the Obligors
hereby affirms that the representations and warranties contained in the Credit
Agreement and in the Pledge Agreement are true and accurate as of the Effective
Date and as of the date of the execution and delivery of this Amendment. Each
further represents and warrants that each has the power to enter into and
perform this Amendment. The making and performance by the Obligors of this
Amendment has been duly authorized by all necessary action and will not:
(i) violate any provision of law or of any of the
Obligors' certificates of incorporation or formation, or
bylaws or limited liability company agreements,
(ii) result in the breach of, or constitute a default under,
any agreement or instrument to which any of the Obligors is a
party or by which any of the Obligors or any of their
respective property may be bound or affected, or
(iii) result in the creation of any lien, charge or
encumbrance upon any property or assets of any of the
Obligors.
No consent, approval, authorization, declaration, exemption or other action by,
or notice to, any court or governmental or administrative agency or tribunal is
or will be required in connection with the execution, delivery, performance,
validity or enforcement of this Amendment or any other agreement, instrument or
document to be executed and delivered pursuant hereto.
4. No Impairment and Ratification. Each Guarantor consents to the
entering into of this Amendment by each of the Borrowers and the other
Guarantors. Each of the Obligors agrees that neither this Amendment nor anything
contained herein or in any other document or instrument delivered in connection
herewith shall diminish or impair any Guarantor's liability in any respect under
its Guaranty. Each Guarantor further agrees that its Guaranty is, by the
execution and delivery of this Amendment, ratified, confirmed and reaffirmed in
its entirety, and acknowledged to continue in full force and effect.
5. Ratification. Except as expressly amended by this Amendment, the
Credit Agreement, the Pledge Agreement and the Guaranties are and shall be
unchanged. All of the terms, provisions, covenants, agreements, conditions,
schedules and exhibits thereof or thereto shall remain and continue in full
force and effect and are hereby incorporated by reference, and hereby ratified,
reaffirmed and confirmed by the Obligors and the Lenders in all respects on and
as of the effective date of this Amendment. Each of the Obligors acknowledges
and agrees that all liens, security interests, and pledges heretofore given to
the Lenders to secure their respective indebtedness to the Lenders shall also
secure all obligations arising hereunder.
6. Conditions.
----------
The Lenders' agreements and consents in this Amendment are and shall
be subject to the prior satisfaction of the following conditions precedent:
(a) Execution and Delivery of this Amendment.
------------------------------------------
All of the parties to this Amendment shall have executed and delivered a
counterpart hereof.
(b) Evidence of Existence and Authorization.
---------------------------------------
The Administrative Agent shall have received for all Obligors, copies of
resolutions relating to the execution and delivery of this Amendment, all
certified as true, correct and complete by the Secretary or an Assistant
Secretary of each Obligor.
(c) Legal Opinion.
--------------
The Administrative Agent shall have received the legal opinion of
Lenna MacDonald, substantially in the form of Exhibit A attached hereto and
incorporated herein by this reference ---------
(e) Fees. The Parent shall have paid all amounts due the
Administrative Agent under the fee letter dated as of ____________, 2000,
between the Parent and the Administrative Agent.
(f) Proceedings Satisfactory. All proceedings taken in
connection with the transactions contemplated herein shall be satisfactory to
the Lenders and their counsel. The Lenders and their counsel shall have received
copies of such documents as they may request in connection therewith, all in
form and substance satisfactory to the Lenders and their counsel.
7. General Provisions.
------------------
(a) Entire Agreement. This Agreement, the Credit Agreement, the Pledge Agreement
and the other documents to which the Obligors are parties pursuant to the Credit
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and thereof. No change, modification, addition or
termination of this Agreement shall be enforceable unless in writing and signed
by the party against whom enforcement is sought.
(b) Definitions. Terms used and not otherwise defined in this Amendment shall
have the meanings given to them in the Credit Agreement, as amended from time to
time.
(c) Benefit. This Agreement shall be binding upon the Obligors and their
respective successors and assigns and shall inure to the benefit of the Lenders
and their respective successors and assigns.
(d) Waiver. No waiver of the provisions hereof shall be effective unless in
writing and signed by the party to be charged with such waiver. No waiver shall
be deemed a continuing waiver or a waiver in respect of any breach or default,
whether of a similar or a different nature, unless expressly so stated in
writing.
(e) Governing Law.
--------------
The validity, construction, interpretation and enforcement of this
Agreement shall be construed in accordance with the laws of the State of
New York without regard to its conflict of laws.
(f) Severability. If any provision of this Agreement or its application shall be
deemed invalid, illegal or unenforceable in any respect, the validity,
construction, interpretation and enforceability of all other applications of
that provision and of all other provisions and applications hereof shall not in
any way be affected or impaired.
(g) Further Assurances. From time to time at another party's request and without
further consideration, the parties shall execute and deliver such further
instruments and documents, and take such other action as the requesting party
may reasonably request, in order to complete more effectively the transactions
contemplated in this Agreement.
(h) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement. This Agreement may be
executed by each party on separate copies, which copies, when combined so as to
include the signatures of all parties, shall constitute a single counterpart of
this Agreement.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement, effective as of the date set out
in the preamble of this Agreement.
"Parent" Commonwealth Industries, Inc.
By:
------------------------------------------------------
Title:
------------------------------------------------------
"Borrowers" CA Lewisport, Inc.
By:
------------------------------------------------------
Title:
------------------------------------------------------
CI Holdings, Inc.
By:
------------------------------------------------------
Title:
------------------------------------------------------
Commonwealth Aluminum Concast, Inc.
By:
------------------------------------------------------
Title:
------------------------------------------------------
Commonwealth Aluminum Corporation
By:
------------------------------------------------------
Title:
------------------------------------------------------
Alflex Corporation
By:
------------------------------------------------------
Title:
------------------------------------------------------
Commonwealth Aluminum Lewisport, LLC
By:
------------------------------------------------------
Title:
------------------------------------------------------
Commonwealth Aluminum Metals, LLC
By:
------------------------------------------------------
Title:
------------------------------------------------------
"Subsidiary Guarantors" Commonwealth Aluminum Sales Corporation
By:
------------------------------------------------------
Title:
------------------------------------------------------
Alflex E1 LLC, by its sole
member, CI Holdings, Inc.
By:
------------------------------------------------------
Title:
------------------------------------------------------
"Lenders" Bank One, Indiana, NA
By:
------------------------------------------------------
Title:
------------------------------------------------------
Each of the following Lenders hereby consents to this Amendment:
PNC Bank, National Association
By:
------------------------------------------------------
Title:
------------------------------------------------------
ABN AMRO Bank N.V.
By:
------------------------------------------------------
Title:
------------------------------------------------------
Bank of Montreal
By:
------------------------------------------------------
Title:
------------------------------------------------------
Credit Agricole Indosuez
By:
------------------------------------------------------
Title:
------------------------------------------------------
Mellon Bank, N.A.
By:
------------------------------------------------------
Title:
------------------------------------------------------
The Industrial Bank of Japan, Limited
By:
------------------------------------------------------
Title:
------------------------------------------------------
Firstar Bank, NA
By:
------------------------------------------------------
Title:
------------------------------------------------------