EXHIBIT 10.1
AMENDMENT NO. 1
TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of August 1, 2005 (the "Agreement") relating to the Credit Agreement referenced
below, is by and among WOLVERINE TUBE, INC., a Delaware corporation (the
"Company"), certain of its Subsidiaries identified as Subsidiary Borrowers on
the signature pages hereto and any additional Subsidiaries of the Company which
become parties to the Credit Agreement in accordance with the terms thereof
(collectively referred to as the "Subsidiary Borrowers" and individually
referred to as a "Subsidiary Borrower") (hereinafter, the Company and the
Subsidiary Borrowers are collectively referred to as the "Borrowers" or referred
to individually as a "Borrower"), each of the financial institutions identified
as Lenders on the signature pages hereto (the "Lenders" and each individually, a
"Lender"), and WACHOVIA BANK, NATIONAL ASSOCIATION, ("Wachovia"), acting in the
manner and to the extent described in Article XIII of the Credit Agreement (in
such capacity, the "Administrative Agent"). Terms used but not otherwise defined
herein shall have the meanings provided in the Credit Agreement and the
provisions of Sections 1.2 and 1.3 of the Credit Agreement related to the
definitions shall apply herein.
W I T N E S S E T H
WHEREAS, a $35,000,000 credit facility has been extended to the
Borrowers pursuant to the terms of that certain Amended and Restated Credit
Agreement dated as of April 28, 2005 (as amended, modified or otherwise
supplemented from time to time, the "Credit Agreement") among the Borrowers, the
Lenders, and the Administrative Agent;
WHEREAS, the Borrowers have requested that certain covenants be
adjusted and certain other amendments be made as contemplated herein and the
Lenders agree to amend such covenants and certain other provisions pursuant to
the terms and conditions herein;
WHEREAS, the Borrowers have requested an increase in the maximum amount
of LOC Obligations permitted under the Credit Agreement; and
WHEREAS, the undersigned Lenders have agreed to amend the Credit
Agreement as set forth herein;
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
(A) AMENDMENTS.
1. Section 1.1 of the Credit Agreement is hereby amended
by adding the following new definitions in the appropriate alphabetical
order:
"Eligible Equipment" means the Equipment of each of
the Credit Parties which (A) is owned solely by such Credit
Party and with respect to which such Credit Party has good,
valid and marketable title, (B) is maintained on property that
is either owned or leased by such Credit Party (provided that,
with respect to Equipment stored on property not owned by such
Credit Party, such Credit Party shall have delivered in favor
of the Administrative Agent, an Acknowledgment Agreement from
the landlord, warehouseman, filler, processor, packer or
customer with regard to any such location, except that such
Equipment will not be excluded solely as a result of the
failure to obtain any such Acknowledgement Agreement for a
period of 90 days following August 1, 2005; and provided,
further, that with respect to leased locations for which an
Acknowledgement Agreement has not been obtained from the
landlord, such Equipment may be included as Eligible Equipment
(so long as it meets the other criteria set forth elsewhere
herein), but the Agent shall have the right to impose rent
reserves against such Equipment in its sole discretion); (C)
is subject to a valid, enforceable and first priority Lien in
favor of the Administrative Agent; (D) is located in the
United States; and (E) is in good working condition and able
to be used for its intended purpose, and which otherwise
conforms to the warranties contained herein.
"Equipment" means all owned or hereafter acquired
machinery, machine tools, motors, equipment, furniture,
furnishings, fixtures, vehicles (including motor vehicles and
trailers not subject to a certificate of title), tools, parts,
goods (other than consumer goods, Farm Products, or
Inventory), wherever located, including, (a) any interest of a
Credit Party in any of the foregoing, (b) all attachments,
accessories, accessions, replacements, substitutions,
additions and improvements to any of the foregoing, and (c)
all products and proceeds of the foregoing.
2. Each of the following definitions in Section 1.1 of
the Credit Agreement is hereby deleted and replaced with the following
definitions:
"Borrowing Base" means a dollar amount equal to the
sum of (a) up to 85% of Eligible Accounts Receivable of the
Credit Parties, plus (b) the sum of (i) up to 60% of Eligible
Inventory of all Credit Parties other than Wolverine Joining
Technologies, LLC consisting of raw materials and finished
goods inventory and (ii) the lesser of (A) $3,000,000 or (B)
up to 60% of Eligible Inventory of Wolverine Joining
Technologies, LLC consisting of raw materials and finished
goods inventory, plus (c) the lesser of (A) up to 25% of the
net book value of Eligible Equipment of the Credit Parties,
determined in accordance with GAAP, and (B) $8,000,000 minus
(d) reserves established from time to time by the
Administrative Agent in its sole discretion.
"Consolidated EBITDA" means, for any applicable
period of computation, without duplication, the sum of (i)
Consolidated Net Income for such period, but excluding
therefrom all extraordinary items of income (determined in
accordance with GAAP), plus (ii) the aggregate amount of
depreciation and amortization charges made in calculating
Consolidated Net Income for such period, plus (iii) aggregate
Consolidated Interest Expense for
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such period, plus (iv) the aggregate amount of all income
taxes reflected on the consolidated statements of income of
the Consolidated Parties for such period, plus (v) for the
10th, 11th and 12th Production Months of 2005, any
backwardation losses in excess of $1,300,000 but in no event
greater than $3,000,000, in the aggregate, plus (vi)(A)
non-cash restructuring charges not to exceed $12,000,000 in
the aggregate through December 31, 2006 and (B) cash
restructuring charges not to exceed $6,000,000 in the
aggregate through December 31, 2006. Except as otherwise
provided herein, the applicable period of computation shall be
for the twelve (12) consecutive months ending as of the date
of determination.
3. Section 2.2 of the Credit Agreement is hereby amended
by deleting clause (i) of subsection (a) thereof and replacing it with
the following:
(i) the aggregate amount of LOC Obligations shall not
at any time exceed $18,000,000,
4. Subsection (f) and (g) of Section 5.2 are hereby
deleted and replaced by the following:
(f) 2008 Senior Note Indenture. Immediately after
giving effect to the making of a Loan or the issuance of a
Letter of Credit, the Company shall not be in violation of the
terms of the 2008 Senior Note Indenture and shall demonstrate
in writing compliance with Section 4.3(i) of the 2008 Senior
Note Indenture;
(g) 2009 Senior Note Indenture. Immediately after
giving effect to the making of a Loan or the issuance of a
Letter of Credit, the Company shall not be in violation of the
terms of the 2009 Senior Note Indenture and shall demonstrate
in writing compliance with Section 4.11(i) of the 2009 Senior
Note Indenture;
5. Section 7.1 of the Credit Agreement is hereby amended
by adding the following new subsections (j), (k), (l) and (m) and
re-lettering the existing subsection (j) as "(n)":
(j) As soon as available and in any event within
thirty (30) days after the end of each Production Month of the
Consolidated Parties, a certificate of a Senior Financial
Officer of the Company demonstrating compliance with each of
Section 4.3(i) of the 2008 Senior Note Indenture and Section
4.11(i) of the 2009 Senior Note Indenture by calculation
thereof as of the end of each such Production Month (the
certificate for the 12th Production Month of each year may be
based on interim financials, provided, that as soon as audited
financial statements are available, if there are any
discrepancies between the interim financials and audited
financials affecting the calculations referred to hereinabove,
a corrected certificate shall be resubmitted promptly to the
Administrative Agent and the Lenders).
(k) (i) As soon as available and in any event within
thirty (30) days after the end of each Production Month of the
Consolidated Parties, commencing with the Production Month
ending closest to July 31, 2005, a detailed monthly budget for
the Consolidated Parties for the immediately succeeding three
month period,
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certified by a Senior Financial Officer of the Company and
(ii) as soon as available and in any event within thirty (30)
days after the end of each Production Month of the
Consolidated Parties, commencing with the Production Month
ending closest to August 31, 2005, a detailed weekly cash
budget for the Consolidated Parties for the immediately
succeeding thirteen week period, certified by a Senior
Financial Officer of the Company; provided, however, that such
weekly cash budget need not include budget items related to
non-U.S. Subsidiaries other than with respect to payments made
by U.S. Subsidiaries to non-U.S. Subsidiaries.
(l) As soon as available and in any event not later
than September 30, 2005, a report prepared by the Company
assessing the Company's copper base inventory hedging program,
including an analysis of current risks and alternative
strategies, in form and substance satisfactory to the Agent.
(m) Not later than 12:00 Noon on the 25th day of each
Production Month (or if such day is not a Business Day, then
on the next succeeding Business Day) and within three (3)
Business Days following the date of any Asset Disposition or
Casualty Loss in excess of $1,000,000, or if requested by the
Administrative Agent, promptly upon request, the Borrowers
shall deliver a listing of Eligible Equipment of each Credit
Party, in form and substance satisfactory to the Agent.
6. Section 8.3 of the Credit Agreement is hereby amended
and replaced in its entirety as follows:
8.3 MINIMUM CONSOLIDATED EBITDA
(a) For the second fiscal quarter of 2005,
Consolidated EBITDA for the Consolidated Parties shall be
greater than or equal to $19,250,000, calculated on a rolling
four quarter basis.
(b) Commencing with the Production Month of the
Consolidated Parties ending closest to September 30, 2005,
Consolidated EBITDA for the Consolidated Parties shall be
greater than or equal to the following amounts for the
indicated Production Month, calculated on a rolling
twelve-month basis:
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Minimum Consolidated
Production Month EBITDA
----------------------------------------------------------------------
9th Production Month 2005 $15,000,000
----------------------------------------------------------------------
10th Production Month 2005 $10,000,000
----------------------------------------------------------------------
11th Production Month 2005 $10,000,000
----------------------------------------------------------------------
12th Production Month 2005 $10,000,000
----------------------------------------------------------------------
1st Production Month 2006 $10,000,000
----------------------------------------------------------------------
2nd Production Month 2006 $10,000,000
----------------------------------------------------------------------
3rd Production Month 2006 $15,750,000
----------------------------------------------------------------------
4th Production Month 2006 $18,000,000
----------------------------------------------------------------------
5th Production Month 2006 $20,000,000
----------------------------------------------------------------------
6th Production Month 2006 $22,000,000
----------------------------------------------------------------------
7th Production Month 2006 $24,000,000
----------------------------------------------------------------------
8th Production Month 2006 $26,000,000
----------------------------------------------------------------------
9th Production Month 2006 $28,000,000
----------------------------------------------------------------------
(c) Commencing with the fiscal quarter of the
Consolidated Parties ending closest to December 31, 2006, and
for each fiscal quarter thereafter, Consolidated EBITDA for
the Consolidated Parties shall be greater than or equal to
$32,000,000, calculated on a rolling four quarter basis.
7. Section 8.4 of the Credit Agreement is hereby
deleted.
8. Each of the Schedules attached to the Credit
Agreement is hereby deleted and replaced by the corresponding Schedule
attached to this Agreement.
(B) SECURITY AGREEMENT.
(a) Notwithstanding any other provision herein or in any other
Credit Document to the contrary, the Credit Parties agree that solely
for the purposes of the Security Agreement, the Trigger Event (as
defined in the Security Agreement) shall be deemed to have occurred on
August 1, 2005.
(b) Notwithstanding any other provision herein or in any other
Credit Document, aircraft owned or leased by the Credit Parties shall
be excluded from Collateral.
(C) CONSENTS.
The Administrative Agent and the Lenders hereby consent to the various
amendments described in Section (E)(5) and (6) hereof.
(D) REPRESENTATIONS AND WARRANTIES. Each Credit Party hereby represents
and warrants that (i) the representations and warranties contained in Article VI
of the Credit Agreement are true and correct in all material respects on and as
of the date hereof as though made on and as of such date (except for those
representations and warranties which by their terms relate solely to an earlier
date) and after giving effect to the transactions contemplated herein, (ii) no
Default or Event of Default exists under the Credit Agreement on and as of the
date hereof and after giving effect to the transactions contemplated herein,
(iii) it has the corporate, limited liability company or limited partnership
power and authority to execute and
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deliver this Agreement and to perform its obligations hereunder and has taken
all necessary organizational action to authorize the execution, delivery and
performance by it of this Agreement; (iv) it has duly executed and delivered
this Agreement, and this Agreement constitutes its legal, valid and binding
obligation enforceable in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
the rights of creditors generally or by general principles of equity and (v)
neither the execution and delivery of this Agreement, nor the consummation of
the transactions contemplated therein, nor performance of and compliance with
the terms and provisions thereof will violate or conflict in any material
respect with any material provision of its articles or certificate of
incorporation or certificate of limited partnership or certificate of formation,
bylaws, agreement of limited partnership or limited liability company agreement
or violate, contravene or conflict in any material respect with contractual
provisions of, or cause an event of default under, any indenture, including
without limitation the 2008 Senior Note Indenture and 2009 Senior Note
Indenture, loan agreement, mortgage, deed of trust, contract or other agreement
or instrument to which it is a party or by which it may be bound.
(E) EFFECTIVENESS. This Agreement shall become effective upon
satisfaction of all of the following conditions precedent:
1. Executed Agreement. The Administrative Agent shall have
received a fully executed counterpart of this Agreement from each
party hereto.
2. Secretary's Certificates. The Administrative Agent shall
have received a secretary's certificates from each Borrower dated as of
the date hereof either substantially in the form required by Section
5.1(d) of the Credit Agreement, mutatis mutandis, or a bring-down
certificate if no change has occurred to the secretary's certificate
since the last delivery thereof to the Administrative Agent, in
accordance with the Credit Agreement, and, in each case, otherwise in
form and substance acceptable to the Administrative Agent.
3. Legal Opinions. The Administrative Agent shall have
received a legal opinion from Borrowers' outside counsel in form and
substance reasonably acceptable to the Administrative Agent.
4. Amendment Fee. The Administrative Agent shall have received
an amendment fee of $75,000.
5. Permitted Securitization Amendment. The Administrative
Agent shall have received a copy of an original fully executed
amendment to the Receivables Purchase Agreement dated as of April 28,
2005 which evidences the Permitted Securitization, upon terms
reasonably satisfactory to the Administrative Agent, which amendment
shall be in full force and effect and not subject to any unsatisfied
conditions precedent.
6. Consignment Agreement, Etc. The Administrative Agent shall
have received (a) an original fully executed amendment to the
Consignment Intercreditor Agreement and (b) a copy of an original fully
executed amendment to the Consignment Agreement, in form and substance
satisfactory to the Administrative Agent.
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7. Other Conditions Precedent. The Borrowers shall have
completed all proceedings taken in connection with the transactions
contemplated by this Agreement and delivered to the Administrative
Agent all other documentation and other items incident thereto, and
each shall be satisfactory to the Administrative Agent and its legal
counsel, Mayer, Brown, Rowe & Maw, LLP.
(F) NO OTHER MODIFICATION. Except to the extent specifically provided
to the contrary in this Agreement, all terms and conditions of the Credit
Agreement (including Exhibits and Schedules thereto) and the other Credit
Documents shall remain in full force and effect, without modification or
limitation. This Agreement shall not operate as a consent to any other action or
inaction by the Borrowers or any other Credit Party, or as a waiver or amendment
of any right, power, or remedy of any Lender or the Administrative Agent under
the Credit Agreement or any other Credit Document nor constitute a consent to
any such action or inaction, or a waiver or amendment of any provision contained
in the Credit Agreement or any other Credit Document except as specifically
provided herein. Each of the Credit Parties acknowledges, confirms and agrees
that the Credit Documents to which it is a party remain in full force and effect
as of the date hereof and continue to secure all Obligations of each such Credit
Party to any Lender or the Administrative Agent, and novation of any kind is
hereby expressly disclaimed.
(G) RELEASE. In consideration of entering into this Agreement, each
Credit Party (a) represents and warrants to each Agent and each Lender that as
of the date hereof there are no causes of action, claims, actions, proceedings,
judgments, suits, demands, damages or offsets against or defenses or
counterclaims to its Obligations or Secured Obligations under the Credit
Documents and furthermore, such Credit Party waives any and all such causes of
action, claims, actions, proceedings, judgments, suits, demands, damages,
offsets, defenses or counterclaims whether known or unknown, arising prior to
the date of this Agreement and (b) releases each Agent and each Lender and each
of their respective Affiliates, Subsidiaries, officers, employees,
representatives, agents, counsel and directors from any and all actions, causes
of action, claims, actions, proceedings, judgments, suits, demands, damages and
liabilities of whatever kind or nature, in law or in equity, now known or
unknown, suspected or unsuspected to the extent that any of the foregoing arises
from any action or failure to act with respect to any Credit Document, on or
prior to the date hereof.
(H) GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of North Carolina,
without regard to the principles governing conflicts of laws thereof.
(I) INCORPORATION BY REFERENCE OF CERTAIN PROVISIONS. THE PROVISIONS IN
SECTIONS 14.5, 14.6, 14.8, 14.9, 14.10, 14.12, 14.13, 14.14, 14.15, 14.19 AND
14.24 OF THE CREDIT AGREEMENT ARE HEREBY INCORPORATED BY REFERENCE HEREIN,
MUTATIS MUTANDIS.
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Each of the parties hereto has caused a counterpart of this Agreement
to be duly executed and delivered as of the date first above written.
COMPANY:
WOLVERINE TUBE, INC.
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: Senior V.P. & CFO & Secretary
SUBSIDIARY BORROWERS:
--------------------
TF INVESTOR, INC.
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: V.P. & Treasurer
TUBE FORMING HOLDINGS, INC.
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: VP & Treasurer
TUBE FORMING, L.P.
By: Tube Forming Holdings, Inc.,
its General Partner
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: VP & Treasurer
WOLVERINE FINANCE, LLC
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: Vice-Manager & Treasurer
SMALL TUBE MANUFACTURING, LLC
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: VP & Treasurer
WOLVERINE JOINING TECHNOLOGIES, LLC
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: VP & Treasurer
WOLVERINE CHINA INVESTMENTS, LLC
By: Wolverine Tube, Inc.,
its Managing Member
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: Sr VP & Secretary & CFO
WT HOLDING COMPANY, INC.
By: /s/ Thomas B. Sabol
Name: Thomas B. Sabol
Title: VP & Treasurer
LENDERS:
WACHOVIA BANK,
NATIONAL ASSOCIATION, in its capacity
as Administrative Agent and as a Lender
By: /s/ Laurie D. O'Fallon
Name: Laurie D. O'Fallon
Title: Director
(signature pages end)
ATTACH REPLACEMENT SCHEDULES
EXHIBIT G
Form of Borrowing Base Certificate