FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER
This FIRST AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment and
Waiver") is dated as of May 15, 1998 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"), Corestates Bank, N.A. and 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 the same
may be amended, restated, supplemented, extended or otherwise modified in
accordance with the terms thereof, the "Credit Agreement");
WHEREAS, Borrower and TIMET Finance Management Company, a Delaware
corporation and a wholly-owned Subsidiary of Borrower ("TIMET Finance"), have
entered into a letter of intent, dated April 13, 1998, with Special Metals
Corporation, a Delaware corporation ("SMC"), relating to the proposed
acquisition (the "SMC Acquisition") by TIMET Finance of either Class A 6.625%
Senior Convertible Preferred Stock of SMC or 6.625% convertible preferred
securities of a trust formed and owned by SMC, in either case having an
aggregate stated value of $125.0 million;
WHEREAS, the SMC Acquisition would constitute an Investment under the
Credit Agreement and, absent the effectiveness of this Amendment and Waiver, be
prohibited by the terms thereof;
WHEREAS, Borrower has requested that the Administrative Agent and Lenders
(i) modify the terms of the Credit Agreement to permit the SMC Acquisition and
make certain related changes to the Credit Agreement and (ii) waive certain
Events of Default existing as of the date hereof, and the Administrative Agent
and Lenders are agreeable to such modifications and waivers, in each case as and
to the extent set forth in this Amendment and Waiver;
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) Section 1.1 of the Credit Agreement is hereby amended by
inserting into existing Section 1.1 each of the following new definitions in
their appropriate alphabetic order:
"First Amendment and Waiver" means the First Amendment to Credit
Agreement and Waiver, dated as of May 15, 1998, by and among Borrower, the
Lenders, Co-Agents and Administrative Agent.
"Pabco Road Property" means the three contiguous parcels of real
property owned by Borrower and located adjacent to and to the east of Pabco
Road northeast of Borrower's main plant in Henderson, Nevada.
"Pledge Agreement Amendment" has the meaning assigned to that term in
the First Amendment and Waiver.
"SMC" means Special Metals Corporation, a Delaware corporation.
"SMC Acquisition" means the acquisition by TIMET Finance Management
Company of SMC Convertible Preferred Securities having an aggregate stated
value of $125.0 million, substantially on the terms set forth in the Term
Sheet attached as Exhibit A to the First Amendment and Waiver .
"SMC Closing Conditions" has the meaning assigned to that term in the
First Amendment and Waiver.
"SMC Convertible Preferred Securities" means (i) Class A 6.625% Senior
Convertible Preferred Stock, par value $.01 per share, of SMC purchased in
the SMC Acquisition, and any common stock or other securities into which
such Class A 6.625% Senior Convertible Preferred Stock may from time to
time be converted or exchanged or (ii) 6.625% convertible preferred
securities of a trust formed and owned by SMC, and any common stock or
other securities into which such 6.625% convertible preferred securities
may from time to time be converted or exchanged.
(b) The definition of "Adjusted Consolidated Net Worth" 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:
"'Adjusted Consolidated Net Worth' of Borrower means, without
duplication, the sum of (i) the total stockholders' equity of Borrower, as
determined from a consolidated balance sheet of Borrower and its
consolidated Subsidiaries prepared in accordance with GAAP plus (ii) the
net book value of the BUCS, as determined from a consolidated balance sheet
of Borrower and its consolidated Subsidiaries prepared in accordance with
GAAP (which shall not, in any event, include accrued interest or dividends
on the BUCS) less (iii) the aggregate amount of all outstanding Investments
made by Borrower and each Domestic Subsidiary and OECD Foreign Subsidiary
of Borrower in any entity which is not a Domestic Subsidiary or an OECD
Foreign Subsidiary of Borrower plus (iv) a portion (not to exceed $80.0
million) of the net book value (or, if less, the net book value) of the SMC
Convertible Preferred Securities purchased by TIMET Finance Management
Company in the SMC Acquisition, as such net book value is determined from a
consolidated balance sheet of Borrower and its consolidated Subsidiaries
prepared in accordance with GAAP (which shall not, in any event, include
accrued dividends on the SMC Convertible Preferred Securities)."
(c) Article II of the Credit Agreement is hereby amended by
inserting, after Section 2.9 of existing Article II, a new Section 2.10, as
follows:
"2.10 Regulation U. (a) The Loans made by each Lender shall,
commencing from the date of the SMC Acquisition and ending on the date on
which none of the Loans is considered "purpose credit" within the meaning
of Regulation T, U or X of the Board, be treated for purposes of Regulation
U as two separate extensions of credit (the "Y Credit" and the "Z Credit"
of such Lender and, collectively, the "Y Credits" and the "Z Credits"), as
follows:
(i) the aggregate amount of the Y Credit of such Lender shall be
an amount equal to such Lender's Pro Rata Share of the maximum loan
value (as determined in accordance with Regulation U) of the SMC
Convertible Preferred Securities pledged pursuant to the Pledge
Agreement Amendment (such SMC Convertible Preferred Securities, the
"Margin Stock Collateral"); and
(ii) the aggregate amount of the Z Credit of such Lender shall be
an amount equal to such Lender's Pro Rata Share of all Loans
outstanding under this Agreement minus such Lender's Y Credit.
In the event that any Margin Stock Collateral is acquired or sold, the
amount of the Y Credit of such Lender shall be adjusted (if necessary), to
the extent necessary through prepayment by the Borrower, to an amount equal
to such Lender's Pro Rata Share of the maximum loan value (determined in
accordance with Regulation U as of the date of such acquisition or sale) of
the Margin Stock Collateral immediately after giving effect to such
acquisition or sale. Nothing contained in this Section 2.10 shall be
deemed to permit any sale of Margin Stock Collateral in violation of the
terms of this Agreement.
(b) Each Lender will maintain its records to identify the Y Credit of
such Lender and the Z Credit of such Lender, and, solely for the purposes
of complying with Regulation U, the Y and Z Credits shall be treated as
separate extensions of credit. Each Lender hereby represents and warrants
that the loan value of the Collateral (other than the Margin Stock
Collateral) is sufficient for such Lender to lend its Pro Rata Share of the
Z Credit.
(c) The benefits of the security in the Margin Stock Collateral
created by the Pledge Agreement Amendment shall be allocated first to the
benefit and security of the payment of the principal of and interest on the
Y Credits of the Lender and of all other amounts payable by Borrower under
this Agreement in connection with the Y Credits (collectively, the "Y
Credit Amounts") and second, only after the payment in full of the Y
Credit Amounts, to the benefit and security of the payment of the principal
of and interest on the Z Credits of the Lenders and of all other amounts
payable by Borrower under this Agreement in connection with Z Credits
(collectively, the "Z Credit Amounts"). The benefits of the security in
the Collateral other than Margin Stock Collateral created by the Security
Documents and the benefits of the indirect security in Collateral other
than Margin Stock Collateral created by this Agreement, shall be allocated
first to the benefit and security of the payment of the Z Credit Amounts
and second, only after the payment in full of the Z Credit Amounts, to the
benefit and security of the payment of the Y Credit Amounts.
(d) Borrower shall furnish to each Lender at the time of each
acquisition and sale of Margin Stock Collateral such information and
documents as the Administrative Agent or such Lender may require to
determine the Y and Z Credits, and at any time and from time to time, such
other information and documents as the Administrative Agent or such Lender
may reasonably require to determine compliance with Regulation U.
(e) Each Lender shall be responsible for its own compliance with and
administration of the provisions of this Section 2.10 and Regulation U, and
the Administrative Agent shall have no responsibility for any
determinations or allocations made or to be made by any Lender as required
by such provisions. The Administrative Agent shall transmit to Borrower on
behalf of a Lender any requests made by such Lender pursuant to subsection
(d) of this Section 2.10 and shall transmit from Borrower to such Lender or
the Lenders any information provided by Borrower in response to inquiries
made under subsection (d) of this Section 2.10 or otherwise required to be
delivered by Borrower to the Lenders pursuant to this Section 2.10."
(d) Section 6.8(b) of the Credit Agreement is hereby amended by (i)
inserting at the beginning of such existing Section 6.8(b) the clause "Except as
specified in the next proceeding sentence," and (ii) inserting the following new
sentence at the end of such existing Section 6.8(b): "Notwithstanding the
foregoing, proceeds of Loans may be used to purchase or carry, and the Lenders
may extend credit for the purpose of purchasing or carrying, the SMC Convertible
Preferred Securities acquired in connection with the SMC Acquisition, provided
that the purpose of such Loan is indicated in the applicable Notice of
Borrowing.
(e) Section 7.4 of the Credit Agreement is hereby amended by deleting
clause (a) of such existing Section 7.4 in its entirety and replacing it with a
new clause (a) as follows: "(a) Continue to engage in the business of
producing, processing, finishing and selling titanium and other metal products,
or a business related thereto;"
(f) Section 7.12 of the Credit Agreement is hereby amended by adding
a new clause (i) after existing clause (h), as follows:
"(i) Pabco Road Property. (i) as promptly as practicable and, in
any event within 90 days after the date of the First Amendment and Waiver,
Borrower shall furnish the Administrative Agent with a survey, in form and
substance satisfactory to Administrative Agent, of the Pabco Road Property,
dated a recent date acceptable to Administrative Agent, certified by a
licensed professional surveyor in a manner satisfactory to Administrative
Agent for the benefit of the Lenders;
(ii) as promptly as practicable and, in any event within 120
days after the date of the First Amendment and Waiver, Borrower shall
furnish the Administrative Agent with a duly executed Mortgage, in form and
substance reasonably satisfactory to the Administrative Agent, covering the
Pabco Road Property, together with evidence that counterparts of such
Mortgage have been delivered to the title insurance company insuring the
Lien of such Mortgage for recording in all places to the extent necessary
or desirable, in the reasonable judgment of the Administrative Agent, to
create a valid and enforceable first priority Lien on the Pabco Road
Property (subject only to Permitted Liens) in favor of Collateral Agent (or
a trustee acting on behalf of Collateral Agent required or desired under
local law), for the benefit of the Secured Creditors;
(iii) as promptly as practicable and, in any event within 120
days after the date of the First Amendment and Waiver, Borrower shall
furnish the Administrative Agent with a Mortgage Policy (or a binding
commitment to see such Mortgage Policy) which shall (A) be issued to
Collateral Agent for the benefit of the Secured Creditors by a title
insurance company satisfactory to Administrative Agent in an amount
reasonably satisfactory to Administrative Agent insuring that the Mortgage
covering the Pabco Road Property is a valid and enforceable first priority
mortgage lien, free and clear of all defects, encumbrances and other Liens
except Permitted Liens, (B) be in form and substance reasonably
satisfactory to Administrative Agent, (C) include, as appropriate, an
endorsement for future advances under this Agreement, the Notes and the
Mortgage and such other endorsements that Administrative Agent in its
discretion may reasonably request, (D) not include an exception for
mechanics' liens, and (E) provide for affirmative insurance and such
reinsurance (including direct access agreements) as Administrative Agent in
its discretion may reasonably request; and
(iv) Borrower shall comply with Section 7.12(e) as if all
Security Documents relating to the Pabco Road Property were 'Additional
Security Documents' for purposes of such Section."
(g) Section 7.12(c) of the Credit Agreement is hereby amended by
inserting at the end of the first sentence of existing Section 7.12(c) an
additional proviso and a new sentence as follow:
"provided, further, that, if the Capital Stock of Loterios S.p.A. is
owned directly by Borrower or a Domestic Subsidiary of Borrower, Borrower
or such Domestic Subsidiary shall not be obligated to pledge such Capital
Stock until the earlier of the following: (A) any date on which the
consolidated total assets of Loterios S.p.A. are more than $50,000,000 or
(B) the request of the Required Lenders; and thereupon, Borrower, at its
own expense, promptly (and in any event within 45 days) shall pledge 65% of
the Capital Stock of Loterios S.p.A. to Collateral Agent, for the benefit
of the Secured Creditors, pursuant to a pledge agreement in form and
substance satisfactory to Collateral Agent. Notwithstanding any provision
herein to the contrary, the Capital Stock of Loterios S.p.A. shall for
purposes of Section 8.7(g)(iii) and otherwise for purposes of this
Agreement be treated as having been pledged to the Collateral Agent for
purposes of this Agreement provided that Borrower and its Subsidiaries have
complied with this Section 7.12(c)."
(h) Section 7.12(c) of the Credit Agreement is hereby further amended
by inserting (i) in the fifth line of existing Section 7.12(c) after the words
"other than" and before the words "a Foreign Subsidiary", the words "Loterios
S.p.A. or" and (ii) in the seventh line of existing Section 7.12(c) after the
word "Subsidiaries" and before the words "owned directly by", the parenthetical
language "(other than Loterios S.p.A.)".
(i) Section 7.12(f) of the Credit Agreement is hereby amended by
deleting such existing Section 7.12(f) in its entirety and replacing it with a
new Section 7.12(f) as follows:
"(f) As promptly as practicable and in any event within 90 days
following the effectiveness of the First Amendment and Waiver, Borrower, at
its own expense, shall (i) pledge 65% of the Capital Stock of TIMET FSC,
Ltd. to Collateral Agent, for the benefit of the Secured Creditors,
pursuant to a pledge agreement in form and substance satisfactory to
Administrative Agent and (ii) cause Administrative Agent to receive, with a
counterpart for each Lender, a legal opinion of Barbados counsel acceptable
to Administrative Agent covering such matters in respect of such pledge
agreement as Administrative Agent reasonably requests."
(j) Section 8.1 of the Credit Agreement is hereby amended by renaming
clauses (e) and (f) of such existing Section 8.1, clauses "(f)" and "(g)",
respectively, and inserting a new clause (e) after existing clause (d) and
before new clause (f), as follows:
"(e) (i) in the case of any Person that after the Closing Date
becomes a Subsidiary of Borrower or is consolidated with or merged with or
into Borrower or a Subsidiary of Borrower in compliance with the terms of
this Agreement, Liens on the property or assets of such Person existing at
the time such Person becomes a Subsidiary or is so consolidated or merged
(and not incurred in anticipation thereof) and (ii) in the case of any
property or asset acquired by Borrower or any Subsidiary of the Borrower
after the Closing Date in compliance with the terms of this Agreement,
Liens existing on such property or asset at the time of such acquisition
(and not incurred in anticipation thereof), whether or not the Indebtedness
secured thereby is assumed by Borrower or such Subsidiary; provided,
however, that, in the case of (i) and (ii) above, (A) no such Lien extends
to or covers any other property or assets of Borrower or any other
Subsidiary, as the case may be, (B) the aggregate principal amount of the
Indebtedness secured by all such Liens in respect of any such property or
assets does not exceed 100% of the fair market value of such property or
assets at the time of such acquisition or, in the case of a Lien in respect
of property or assets existing at the time of such Person becoming a
Subsidiary or being consolidated or merged, the fair market value of such
property or assets at such time, (C) the aggregate principal amount of the
Indebtedness secured by all such Liens does not exceed $10,000,000 at any
one time outstanding, and (D) any and all such Liens secure Indebtedness
permitted to be incurred pursuant to Section 8.2;"
(k) Section 8.1 of the Credit Agreement is hereby further amended by
deleting, in the second line and sixth line of new clause (f), the language
"clauses (c) or (d)" and replacing it in both such lines with the language
"clauses (c), (d) or (e)".
(l) Section 8.4 of the Credit Agreement is hereby amended by adding
after clause (g) of existing Section 8.4, a new clause (h), as follows:
"(h) Borrower's Board of Directors may declare, and Borrower may pay,
quarterly cash dividends on Borrower's Capital Stock not to exceed
$2,000,000 in the aggregate in respect of each fiscal quarter of Borrower."
(m) Section 8.7 of the Credit Agreement is hereby amended by (i)
renaming existing clause (l) of Section 8.7, clause "(n)" and (ii) deleting, in
the first line of new clause (n), the words "through (k) above" and replacing
them with the words "through (m) above".
(n) Section 8.7 of the Credit Agreement is hereby further amended by
inserting after clause (k) of existing Section 8.7, a new clause (l) as follows:
" (1) Borrower may make an Investment in SMC Convertible Preferred
Securities pursuant to the SMC Acquisition; provided, that each of the SMC
Closing Conditions has been satisfied on or prior to the consummation of
such Investment."
(o) Section 8.7 of the Credit Agreement is hereby further amended by
inserting after new clause (l) of Section 8.7, a new clause (m) as follows:
"(m) Borrower may make loans to employees and officers of Borrower and
its Subsidiaries to finance the purchase of common stock of Borrower or
BUCS by such employees and officers, which loans shall not exceed
$1,000,000 in any one calendar year or $5,000,000 in the aggregate at any
one time outstanding; and"
(p) Section 8.11 of the Credit Agreement is hereby amended by
deleting the first sentence of such existing Section 8.11 in its entirety and
replacing it with a new sentence as follows:
"Borrower will not, and will not permit any Subsidiary to, enter into or
acquire any line of business which is not related to the business of
producing, processing, finishing or selling titanium or other metal
products."
(q) Section 8.13 of the Credit Agreement is hereby amended by
replacing the period at the end of clause (iii) thereof with a semi-colon and
adding a new clause (iv) after clause (iii), as follows:
" (iv) agree or consent to any amendment or modification of the
provisions of any indenture, trust declaration, agreement, instrument or
other document entered into in connection with the SMC Acquisition which is
adverse in any material respect to the interests of the Lenders or
Administrative Agent."
(r) Schedule 6.11(c) to the Credit Agreement is hereby amended by
adding to item 1, beneath the information for "Titanium Hearth Technologies",
the following new information:
"Titanium Metals Corporation Three parcels Manufacturing Plant
Fee"
northeast of
main plant
3. Waivers. (a) Under Section 6.11(c) of the Credit Agreement,
Borrower has represented and warranted that Schedule 6.11(c) contains a true and
complete list of each parcel of real property owned or leased by Borrower or the
Subsidiary Guarantors on the Closing Date. The Lenders hereby waive the Events
of Default arising from Borrower's failure to list the Pabco Road Property on
Schedule 6.11(c) prior to the Amendment Effective Date.
(b) Under Section 6.13 of the Credit Agreement, Borrower has,
among other things, represented and warranted that it has granted Mortgages to
secure the Obligations on all parcels of real estate owned by Borrower or any of
its Domestic Subsidiaries and material to the operations of Borrower and its
Domestic Subsidiaries. The Lenders hereby waive the Event of Default arising
from Borrower's failure to grant a Mortgage on the Pabco Road Property prior to
the date of this Amendment and Waiver plus 120 days.
(c) Under Section 7.12(c) of the Credit Agreement, Borrower has
covenanted and agreed, among other things, to pledge (and cause its Domestic
Subsidiaries to pledge) to Collateral Agent, for the benefit of the Secured
Creditors, 65% of the Capital Stock owned by Borrower or a Domestic Subsidiary
of each new Foreign Subsidiary established, created or acquired after the
Closing Date, in each case within ten Business Days of the establishment,
creation or acquisition thereof. The Lenders hereby waive the Event of Default
arising from Borrower's failure to cause its Subsidiary, TMCA International,
Inc., to timely pledge 65% of the Capital Stock of Loterios S.p.A. in compliance
with Section 7.12(c) of the Credit Agreement prior to the Amendment Effective
Date.
(d) Under Section 7.12(f) of the Credit Agreement, prior to giving
effect to this Amendment and Waiver, Borrower covenanted and agreed to, within
90 days following the Closing Date, at its own expense, (i) pledge 65% of the
Capital Stock of TIMET FSC, Ltd. to Collateral Agent, for the benefit of the
Secured Creditors, pursuant to a pledge agreement in form and substance
satisfactory to Administrative Agent and (ii) cause Administrative Agent to
receive, with a counterpart for each Lender, a legal opinion of Barbados counsel
acceptable to Administrative Agent covering such matters in respect of such
pledge agreement as Administrative Agent reasonably requests. The Lenders
hereby waive the Event of Default arising from Borrower's failure to timely
comply with the requirements of Section 7.12(f) of the Credit Agreement prior to
the Amendment Effective Date.
(e) Under Section 7.3(a) of the Credit Agreement, Borrower has
covenanted and agreed to, within three Business Days after an officer of
Borrower or of any of its Subsidiaries obtains knowledge thereof, give written
notice to Administrative Agent of any Event of Default. {tc \l3 "Event of
Default. }The Lenders hereby waive the Event of Default arising from Borrower's
not having timely provided the Administrative Agent with due notice of the
Events of Default arising from Borrower's incorrect representations and
warranties made in Sections 6.11(c) and 6.13 and non-compliance with the
covenants in Sections 7.12(c) and 7.12(f) of the Credit Agreement prior to the
Amendment Effective Date.
(f) The above waivers are only applicable and shall only be effective
in the specific instance, for the specific purpose and for the specific period
for which made. The above waivers are expressly limited to (and predicated
upon) the facts and circumstances referred to in this Amendment and Waiver and
shall not operate (i) as a waiver of or consent to non-compliance with any other
Section or provision of the Credit Agreement or any other Loan Document, (ii) as
a waiver of any right, power or remedy of either Administrative Agent,
Collateral Agent or any Lender under the Credit Agreement or any other Loan
Document or (iii) as a waiver of or consent to any other Event of Default or
Unmatured Event of Default under the Credit Agreement or any other Loan
Document.
4. Conditions to Effectiveness. This Amendment and Waiver shall become
effective (with effect from the date of this Amendment and Waiver) on the date
(the "Amendment Effective Date") on which each of the following conditions has
been satisfied:
(a) Amendment and Waiver. The Administrative Agent shall have
received counterparts of this Amendment and Waiver 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 and
Waiver, 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 the Amendment Effective Date, as
to the incumbency and signature of their respective officers executing this
Amendment and Waiver (including the Acknowledgment and Agreement), the Pledge
Agreement Amendment or any of the other Amendment Documents (as defined below),
together with satisfactory evidence of the incumbency of each such Secretary or
Assistant Secretary.
(d) Borrower Resolutions. Administrative Agent shall have received,
with a counterpart for each Lender, copies, duly certified by the Secretary or
an Assistant Secretary of Borrower, of (i) resolutions of Borrower's Board of
Directors and/or TIMET Finance's Board of Directors authorizing the execution
and delivery of this Amendment and Waiver and the other agreements, instruments
and documents contemplated hereby, and the transactions contemplated hereby,
(ii) all documents evidencing other necessary corporate action, if any, and
(iii) all approvals or consents, if any, necessary with respect to this
Amendment and Waiver and the other agreements, instruments and documents
contemplated hereby, and the transactions contemplated hereby.
(e) Opinion of Counsel. Administrative Agent shall have received,
with a copy for each Lender, the opinion of Xxxxxxx & Xxxxxx L.L.C., legal
counsel to Borrower, and Xxxxxx X. Xxxxxxxxx, General Counsel of the Borrower,
each dated the Amendment Effective Date and otherwise in form and substance
satisfactory to the Administrative Agent and its counsel.
(f) Officer's Certificate. Administrative Agent shall have received,
with a signed counterpart for each Lender, a certificate executed by a
Responsible Officer of Borrower, dated the Amendment Effective Date, stating
that the representations and warranties set forth in Section 6 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, that no Event of Default or
Unmatured Event of Default has occurred and is continuing, that the conditions
of this Section 4 have been fully satisfied and that 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.
(g) Other. 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.
5. SMC Closing Conditions. The Lenders' willingness to permit the SMC
Acquisition is subject to the satisfaction of each of the following conditions
(collectively, the "SMC Closing Conditions"), in addition to each of the
conditions set forth in Section 4 of this Amendment and Waiver:
(a) Pledge Agreement Amendment. The Administrative Agent shall have
received, with a counterpart for each Lender, an amendment to that certain
Supplemental Domestic Pledge Agreement, dated as of August 12, 1997, by and
between TIMET Finance and Collateral Agent, or a new pledge agreement by and
between TIMET Finance and Collateral Agent, in any case duly executed by the
parties thereto and otherwise in form and substance satisfactory to the
Administrative Agent, providing for the pledge of the SMC Convertible Preferred
Securities to Collateral Agent, for the benefit of the Secured Creditors (the
"Pledge Agreement Amendment").
(b) Other SMC Collateral Documents. The Administrative Agent shall
have received, with a counterpart for each Lender, (i) a collateral assignment
of the registration rights and other rights granted by SMC or its other
stockholders to Borrower or TIMET Finance relating to the SMC Convertible
Preferred Securities, duly executed by TIMET Finance and Borrower, in form and
substance satisfactory to the Administrative Agent (the "SMC Collateral
Assignment"), (ii) a consent to and acknowledgment of (A) the SMC Collateral
Assignment and (B) the pledge of the SMC Convertible Preferred Securities
pursuant to the Pledge Agreement Amendment, duly executed by SMC and/or a trust
formed and owned by SMC, as applicable, in form and substance satisfactory to
the Administrative Agent and (iii) such other instruments, documents and
certificates reasonably required by the Administrative Agent to effectuate the
pledge of the SMC Convertible Preferred Securities and the assignment of all of
Borrower's and TIMET Finance's rights relating thereto.
(c) Pledged Securities; Stock Powers. The Administrative Agent shall
have received the certificate or certificates representing the SMC Convertible
Preferred Securities pledged pursuant to the Pledge Agreement Amendment,
together with, if applicable, an undated stock power for each such certificate
executed in blank by a duly authorized officer of TIMET Finance.
(d) Opinion of Counsel. Administrative Agent shall have received,
with a copy for each Lender, the opinion of Xxxxxxx & Xxxxxx L.L.C., legal
counsel to Borrower, and of Xxxxxx X. Xxxxxxxxx, General Counsel of the
Borrower, dated the closing date of the SMC Acquisition confirming (i) the due
authorization, execution and delivery of the Pledge Agreement Amendment and the
SMC Collateral Assignment, (ii) no violation of law or any material contract of
Borrower or any of its Subsidiaries by the SMC Acquisition, the Pledge Agreement
Amendment, the SMC Collateral Assignment and the transactions contemplated by
any of the foregoing, and (iii) such other matters reasonably requested by the
Administrative Agent, all in form and substance satisfactory to the
Administrative Agent and its counsel.
(e) Borrower Resolutions. Administrative Agent shall have received,
with a counterpart for each Lender, copies, duly certified by the Secretary or
an Assistant Secretary of Borrower, of (i) resolutions of Borrower's Board of
Directors and/or TIMET Finance's Board of Directors authorizing the execution
and delivery of the Pledge Agreement Amendment, the SMC Collateral Assignment
and the other agreements, instruments and documents contemplated thereby, and
the transactions contemplated thereby, (ii) all documents evidencing other
necessary corporate action, if any, and (iii) all approvals or consents, if any,
necessary with respect to the Pledge Agreement Amendment, the SMC Collateral
Assignment and the other agreements, instruments and documents contemplated
thereby, and the transactions contemplated thereby.
(f) Margin Regulations. All Loans shall be in full compliance with
all applicable requirements of law, including, without limitation, Regulations
T, U and X, and the Administrative Agent shall have received, for each Lender, a
properly completed and duly executed Form FR U-1.
(g) Credit Conditions. The conditions set forth in Section 5.2 of
the Credit Agreement shall have been satisfied (whether or not a Credit Event
occurs in connection with the SMC Acquisition, except with respect to Section
5.2(c)).
(h) Other. 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.
6. 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 and Waiver, 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 and Waiver (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, after giving effect to the waivers set
forth in Section 3 of this Amendment and Waiver, there exists no Event of
Default or Unmatured Event of Default under the Credit Agreement or any other
Loan Document. Immediately after giving effect to the SMC Acquisition, there
will exist no Event of Default or Unmatured Event of Default under the Credit
Agreement or any other Loan Document.
7. Certain Real Property Collateral Matters. The Lenders hereby
authorize the Collateral Agent to take the following actions, in the manner and
on the terms the Collateral Agent deems appropriate in its sole discretion:
(a) the Collateral Agent may enter into amendments to the Mortgages
covering any of the Mortgaged Properties listed on Schedule 6.11(c), in form and
substance satisfactory to the Collateral Agent, to reflect the results of the
surveys delivered pursuant to Sections 7.12(i) and 7.14 of the Credit Agreement;
and
(b) the Collateral Agent may enter into amendments to the Mortgage
covering the real property of Borrower located in Henderson, Nevada, in form and
substance satisfactory to the Collateral Agent, to cover only the portion of
such property beneficially owned by Borrower or its Subsidiaries and used or
useful in Borrower's or such Subsidiaries' business.
The Lenders acknowledge that the actions taken by the Collateral Agent pursuant
to clauses (a) and (b) above may result in certain property being released from
the coverage of the Mortgages and the termination of the liens thereunder in
favor of the Collateral Agent, for the benefit of the Secured Creditors.
8. 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 and Waiver
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, if any, of this Amendment and Waiver,
as specifically amended in Section 2 above and for the specific waivers set
forth in Section 3 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, if any, of this Amendment and Waiver, 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.
9. Payment of Expenses. Borrower agrees to pay all reasonable out-of-
pocket costs and expenses of Administrative Agent in connection with the
negotiation, preparation, printing, typing, reproduction, execution and delivery
of this Amendment and Waiver as more fully set forth in Section 12.4 of the
Credit Agreement.
10. 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.
11. GOVERNING LAW. THIS AMENDMENT AND WAIVER 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.
12. Counterparts This Amendment and Waiver may be executed by one or
more of the parties to this Amendment and Waiver 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 and Waiver may be
delivered by facsimile transmission of the relevant signature pages hereof.
13. Headings. Section headings in this Amendment and Waiver are included
herein for convenience of reference only and shall not constitute a part of this
Amendment and Waiver for any other purpose.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be duly executed by their respective officers thereunto duly
authorized, as of the date first above written.
TITANIUM METALS CORPORATION
By:
Name: J. Xxxxxx Xxxxxxxxxx, Xx.
Title: Vice President - Finance and Treasurer
BANKERS TRUST COMPANY, as a Lender and as
Administrative Agent and Collateral Agent
By:
Name:
Title:
LENDERS:
CORESTATES BANK, N.A.,
AS A CO-AGENT
By:_________________________________
Title:________________________________
LENDERS:
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:
THE FUJI BANK, LIMITED LOS ANGELES
AGENCY
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, SOUTH WEST AGENCY
By:_________________________________
Title:________________________________
By:_________________________________
Title:________________________________
Each of the undersigned hereby acknowledges and agrees to this Amendment
and Waiver, and agrees that the Subsidiary Guaranty, dated as of July 30, 1997,
the Security Agreement, dated as of July 30, 1997, the Pledge Agreement, dated
as of July 30, 1997 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
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TITANIUM HEARTH TECHNOLOGIES, INC.
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TMCA INTERNATIONAL, INC.
By:_____________________________________
Name: __________________________________
Title: ___________________________________
TIMET FINANCE MANAGEMENT COMPANY
By:_____________________________________
Name: __________________________________
Title: ___________________________________
101683.12
(Attach Exhibit A)
