SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as of
June 30, 1999 and is made by and among Titanium Metals Corporation, a Delaware
corporation ("Borrower"), the undersigned financial institutions, including
Bankers Trust Company, in their capacities as lenders under the Credit Agreement
(as defined below) (collectively, the "Lenders," and each individually, a
"Lender"), First Union National Bank (formerly known as Corestates Bank, N.A.)
and Fleet Business Credit Corporation (formerly known as Sanwa Business Credit
Corporation), as Co-Agents ("Co-Agents"), and Bankers Trust Company, as
administrative agent ("Administrative Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, Borrower, the Lenders, Co-Agents and Administrative Agent are
party to that certain Credit Agreement, dated as of July 30, 1997, as amended by
that certain First Amendment to Credit Agreement and Waiver dated as of May 15,
1998 (as the same has been and may be hereafter amended, restated, supplemented,
extended or otherwise modified in accordance with the terms thereof, the "Credit
Agreement");
WHEREAS, Borrower has requested that the Administrative Agent and Lenders
agree to the amendment and modification of certain terms of the Credit
Agreement, and the Administrative Agent and Lenders are agreeable to such
amendments and modifications as and to the extent set forth in this Amendment;
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
2. Amendments to Credit Agreement.
(a) The definition of "Applicable Eurodollar Margin" set forth in
Section 1.1 of the Credit Agreement is amended by deleting such existing
definition in its entirety and replacing it with the following new definition:
"'Applicable Eurodollar Margin' means, at any date, the applicable
percentage set forth below opposite the Level of Leverage Ratio as of such date:
LEVEL OF LEVERAGE RATIO APPLICABLE EURODOLLAR
MARGIN
Level I: Leverage Ratio is less .500%
than 1.0 to 1
Level II: Leverage Ratio is
equal to or greater than 1.0 to .750%
1 but less than 1.5 to 1
Level III: Leverage Ratio is
equal to or greater than 1.5 to 1.000%
1 but less than 2.0 to 1
Level IV: Leverage Ratio is
equal to or greater than 2.0 to 1.500%
1 but less than 2.5 to 1
Level V: Leverage Ratio is equal
to or 2.000%
greater than 2.5 to 1
; provided that (a) the Applicable Eurodollar Margin shall be that set forth
above opposite Level I from the Closing Date until the first Adjustment Date
occurring after the Closing Date, (b) the Applicable Eurodollar Margin
determined for any Adjustment Date shall remain in effect until a subsequent
Adjustment Date for which the Leverage Ratio falls within a different Level, and
(c) if the financial statements and related officer's certificate for any fiscal
period are not delivered by the date due pursuant to Sections 7.1(a) and 7.1(b)
or if the financial statements and other required information with respect to a
Significant Acquisition are not delivered in accordance with Section 8.3(i), the
Applicable Eurodollar Margin shall be that set forth above opposite Level V, in
either case, until the next subsequent Adjustment Date. Notwithstanding the
foregoing or anything to the contrary in this Agreement or any other Loan
Document, the Applicable Eurodollar Margin shall be no less than that set forth
above opposite Level IV from July 1, 1999 until the first Adjustment Date
occurring after December 31, 1999."
(b) Section 8.1 of the Credit Agreement is hereby amended by adding
after clause (g) of existing Section 8.1, a new clause (h), as follows:
" (h) Borrower may (i) convey all or any portion of the Pabco Road
Property to Basic Environmental Company, LLC or any successor or affiliate
entity (collectively, "BEC"), and (ii) grant, incur, assume or suffer to
exist, or agree to grant, incur, assume or suffer to exist, Liens in, on,
or with respect to all or any part of the Pabco Road Property in favor of
BEC pending or in connection with any such conveyance; provided, in each
case, that such action is taken on an arm's length basis for valid business
purposes, as determined in good faith by the board of directors of
Borrower, and in a manner acceptable to the Administrative Agent."
(c) Section 8.4 of the Credit Agreement is hereby amended by adding
after clause (h) of existing Section 8.4, a new clause (i), as follows:
" (i) Borrower may make regularly scheduled quarterly dividend
payments on the BUCS in an amount not to exceed $3.4 million per quarter."
(d) Section 9.2 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"9.2 Interest Coverage Ratio. Borrower will not permit the ratio
of (i) Consolidated EBITDA for any four consecutive Fiscal Quarters ending
during any period set forth below to (ii) the sum of (a) Consolidated Interest
Expense and (b) Restricted Payments made in cash, in each case during any such
four consecutive Fiscal Quarters, to be less than the ratio set forth opposite
such period below:
Period Ratio
The first day of the second Fiscal Quarter
of 1997 through the last day of the second
Fiscal Quarter of 1999 3.0 to 1
The first day of the third Fiscal Quarter
of 1999 through the last day of the fourth
Fiscal Quarter of 1999 2.25 to 1
The first day of the first Fiscal Quarter of
2000 through the last day of the second
Fiscal Quarter of 2000 2.5 to 1
The first day of the third Fiscal Quarter of
2000 through the last day of the fourth
Fiscal Quarter of 2000 2.75 to 1
The first day of the first Fiscal Quarter of
2001 and thereafter 3.0 to 1
; provided that the ratio set forth above shall be calculated after giving
effect on a Pro Forma Basis to any Significant Acquisition or Significant
Disposition that occurred during any applicable four Fiscal Quarter period."
(e) Section 9.3 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"9.3 Leverage Ratio. Borrower will not permit the ratio of (i)
Consolidated Debt (excluding, for purposes of this covenant, Indebtedness
evidenced by the BUCS) at the end of any Fiscal Quarter ending during any period
set forth below to (ii) Consolidated EBITDA for the four consecutive Fiscal
Quarters then ended, to be greater than the ratio set forth opposite such period
below:
Period Ratio
The first day of the second Fiscal Quarter
of 1997 through the last day of the fourth
Fiscal Quarter of 2000 3.0 to 1
The first day of the first Fiscal Quarter of
2001 and thereafter 2.5 to 1
; provided that for purposes of this Section 9.3, Consolidated EBITDA shall be
calculated after giving effect on a Pro Forma Basis to any Significant
Acquisition or Significant Disposition that occurred during any applicable four
Fiscal Quarter period."
3. Conditions to Effectiveness. This Amendment shall become effective
(with effect from the date of this Amendment) on the date (the "Amendment
Effective Date") on which each of the following conditions has been satisfied:
(a) Amendment. The Administrative Agent shall have received
counterparts of this Amendment duly executed by Borrower and the Required
Lenders.
(b) Acknowledgment and Agreement. The Administrative Agent shall
have received, with a counterpart for each Lender, the acknowledgment and
agreement (the "Acknowledgment and Agreement") attached to this Amendment, duly
executed by each Subsidiary Guarantor.
(c) Incumbency Certificate. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the Secretary or
Assistant Secretary of each Credit Party, dated as of the Amendment Effective
Date, as to the incumbency and signature of their respective officers executing
this Amendment (including the Acknowledgment and Agreement), together with
satisfactory evidence of the incumbency of each such Secretary or Assistant
Secretary.
(d) Borrower Resolutions. The Administrative Agent shall have
received, with a counterpart for each Lender, copies, duly certified by the
Secretary or an Assistant Secretary of Borrower, of resolutions of Borrower's
Board of Directors authorizing the execution and delivery of this Amendment and
the other agreements, instruments and documents contemplated hereby.
(e) Officer's Certificate. The Administrative Agent shall have
received, with a signed counterpart for each Lender, a certificate executed by a
Responsible Officer of Borrower, dated as of the Amendment Effective Date,
stating that (i) the representations and warranties set forth in Section 4
hereof and in the other Loan Documents are true and correct in all material
respects (or, with respect to representations and warranties qualified by
materiality, in all respects) as of the date of the certificate, (ii) no Event
of Default or Unmatured Event of Default has occurred and is continuing, (iii)
that the conditions of clauses (b) through (f) this Section 3 have been fully
satisfied, (iv) no Liens (except for Permitted Liens) have been placed against
the Collateral or the Mortgaged Property since the respective dates of the
searches of financing statements filed under the UCC and delivered pursuant to
Section 5.1(c) of the Credit Agreement, and (v) the terms and provisions of this
Amendment and the other Loan Documents are enforceable against Borrower and the
other Credit Parties, as applicable, in accordance with their respective terms.
(f) Amendment Fee. Borrower shall have paid to the Administrative
Agent, for the ratable benefit of the Lenders who execute and deliver this
Amendment to the Administrative Agent on or before June 30, 1999 (the "Approving
Lenders"), a fee in the amount of .% of the Total Commitment of the Approving
Lenders. Promptly after the Amendment Effective Date, the Administrative Agent
shall distribute such amount to the Approving Lenders in proportion to their
respective Revolving Commitments.
(g) Other. The Administrative Agent shall have received such other
instruments, documents, agreements and financing statements and Borrower shall
have taken such other actions as the Administrative Agent or Collateral Agent
may reasonably request.
4. Representations and Warranties. Borrower makes the following
representations and warranties:
(a) Each of the representations and warranties contained in the
Credit Agreement and the other Loan Documents shall each be true and correct in
all material respects on and as of the Amendment Effective Date before and after
giving effect to the effectiveness of this Amendment, as though made on and as
of the Amendment Effective Date, except to the extent such representations and
warranties are (i) expressly made as of a specified date in which event such
representations and warranties shall be true and correct as of such specified
date or (ii) qualified by materiality, in which event such representations and
warranties shall be true and correct in all respects.
(b) Each Credit Party has the corporate, partnership or other
requisite power and authority to execute, deliver and perform the terms and
provisions of this Amendment (including the Acknowledgment and Agreement) and
each other agreement, instrument or document executed and delivered in
connection herewith to which it is a party (each, an "Amendment Document" and,
collectively, the "Amendment Documents") and has taken all necessary corporate,
partnership or other action to authorize the execution, delivery and performance
by it of each Amendment Document to which it is a party. Each Credit Party has
duly executed and delivered each Amendment Document to which it is a party.
Each Amendment Document constitutes the legal, valid and binding obligation of
each Credit Party party thereto, enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
(c) As of the date hereof, there exists no Event of Default or
Unmatured Event of Default under the Credit Agreement or any other Loan
Document.
5. Reference to and Effect Upon the Credit Agreement and other Loan
Documents.
(a) Except as otherwise expressly provided herein, the Credit
Agreement and each of the other Loan Documents shall remain in full force and
effect and each is hereby ratified and confirmed.
(b) The execution, delivery and effect of this Amendment shall be
limited precisely as written and shall not be deemed to (i) be a consent to any
waiver of any term or condition or to any amendment or modification of any term
or condition of the Credit Agreement or any other Loan Document, except, upon
the effectiveness, of this Amendment, as specifically amended in Section 2 above
or (ii) prejudice any right, power or remedy which the Administrative Agent,
Collateral Agent or any Lender now has or may have in the future under or in
connection with the Credit Agreement or any other Loan Document. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or any other word or words of
similar import shall mean and be a reference to the Credit Agreement as amended
hereby, and each reference in any other Loan Document to the Credit Agreement or
any word or words of similar import shall be and mean a reference to the Credit
Agreement as amended hereby.
6. Payment of Expenses. Borrower agrees to pay all reasonable out-of-
pocket costs and expenses of Administrative Agent (including reasonable
attorneys' fees) in connection with the negotiation, preparation, printing,
typing, reproduction, execution and delivery of this Amendment as more fully set
forth in Section 12.4 of the Credit Agreement.
7. No Other Amendments; Confirmation. Except as expressly modified or
waived hereby, the provisions of the Credit Agreement, the Notes and the other
Loan Documents are and shall remain in full force and effect.
8. GOVERNING LAW. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.
9. Counterparts This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.
10. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective officers thereunto duly authorized, as of the
date first above written.
TITANIUM METALS CORPORATION
By:_____________________________________
Name:
Title:
BANKERS TRUST COMPANY, as a Lender and as
Administrative Agent and Collateral Agent
By:_____________________________________
Name:
Title:
LENDERS:
FIRST UNION NATIONAL BANK
(FORMERLY KNOWN AS CORESTATES BANK, N.A.),
AS A CO-AGENT
By:_________________________________
Title:________________________________
LENDERS:
FLEET BUSINESS CREDIT CORPORATION
(FORMERLY KNOWN AS SANWA BUSINESS CREDIT
CORPORATION), AS A CO-AGENT
By:_________________________________
Title:________________________________
LENDERS:
BANK OF MONTREAL
By:_________________________________
Title:________________________________
LENDERS:
THE BANK OF NOVA SCOTIA
By:_________________________________
Title:________________________________
LENDERS:
BANQUE NATIONALE DE PARIS
By:_________________________________
Title:________________________________
By:_________________________________
Title:________________________________
LENDERS:
CREDIT LYONNAIS NEW YORK BRANCH
By:_________________________________
Title:________________________________
LENDERS:
THE FIRST NATIONAL BANK OF CHICAGO
By:_________________________________
Title:________________________________
LENDERS:
KEYBANK NATIONAL ASSOCIATION
By:_________________________________
Title:________________________________
LENDERS:
MELLON BANK, N.A.
By:_________________________________
Title:________________________________
LENDERS:
PNC BANK, N.A.
By:_________________________________
Title:________________________________
LENDERS:
SOCIETE GENERALE, SOUTHWEST AGENCY
By:_________________________________
Title:________________________________
By:_________________________________
Title:________________________________
LENDERS:
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:_________________________________
Title:________________________________
LENDERS:
VIA BANQUE
By:_________________________________
Title:________________________________
ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned hereby acknowledges and agrees to this Amendment,
and agrees that the Subsidiary Guaranty or Guarantor Supplement, as the case may
be, the Security Agreement or the Supplement Security Agreement, as the case may
be, the Pledge Agreement or the Supplemental Domestic Pledge Agreement, as the
case may be, and each other Loan Document executed by the undersigned shall
remain in full force and effect and each is hereby ratified and confirmed as of
the Amendment Effective Date.
TIMET CASTINGS CORPORATION
(A DELAWARE CORPORATION)
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TITANIUM HEARTH TECHNOLOGIES, INC.
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TMCA INTERNATIONAL, INC.
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TIMET FINANCE MANAGEMENT COMPANY
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TIMET MILLBURY CORPORATION
(AN OREGON CORPORATION AND FORMERLY KNOWN AS
TIMET CASTINGS CORPORATION)
By:_____________________________________
Name: __________________________________
Title: ___________________________________