1
Exhibit 10(ff)
SECOND AMENDMENT TO MASTER LEASE AGREEMENT AND AMENDMENT TO
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DISBURSEMENT SCHEDULES
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THIS SECOND AMENDMENT TO MASTER LEASE AGREEMENT AND AMENDMENT
TO DISBURSEMENT SCHEDULES, dated as of January 26, 1999 ("Amendment"), by and
between Brush Xxxxxxx Inc., an Ohio corporation ("Lessee"), and National City
Bank, for itself and as agent for certain participants ("Lessor"),
WITNESSETH THAT:
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WHEREAS, Lessee and Lessor entered into a Master Lease
Agreement, dated as of December 30, 1996, as amended by the First Amendment to
Master Lease Agreement, dated as of September 2, 1997 (together with all
Exhibits and Schedules thereto, the "Lease Agreement"), under which Lessor
agreed to lease to Lessee certain equipment to be used by Lessee at its Elmore,
Ohio facility, subject to certain conditions and in accordance with the terms
thereof; and
WHEREAS, the parties desire to amend the Lease Agreement as
set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein, the parties hereto agree as
follows:
1. Effect of Amendment; Definitions.
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The Lease Agreement shall be and hereby is amended as provided
in Section 2 hereof. Except as expressly amended in Section 2 hereof, the Lease
Agreement shall continue in full force and effect in accordance with its
respective provisions on the date hereof. As used in the Lease Agreement, the
terms "Master Lease Agreement", "Lease Agreement", "Agreement", "this
Agreement", "herein", "hereinafter", "hereto", "hereof", and words of similar
import shall, unless the context otherwise requires, mean the Lease Agreement as
amended and modified by this Amendment.
2. Amendments.
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(A) Section XIX(j) of the Lease Agreement shall be amended by
deleting the same and inserting the following in lieu thereof:
"(j) Any Rent, Interim Rent or other amount not paid
to Lessor when due hereunder (after any applicable grace period
therefor) shall bear interest, both before and after any judgment or
termination hereof, at the lesser of the Daily Lease Rate Factor then
in effect plus two percent (2%) per annum or the maximum rate allowed
by law. In addition, after the occurrence and during the continuance of
a Default, the Daily Lease Rate Factor shall be increased by an amount
equal to two percent (2%) per annum."
(B) Section XXIII(b) of the Lease Agreement shall be amended
by deleting the same and inserting the following in lieu thereof:
"(b) Lessee will not suffer or permit the Companies'
Funded Indebtedness at any time to exceed an amount equal to the
Leverage Multiplier (as hereinafter defined) times the Companies'
EBITDA for the four consecutive fiscal quarters most recently ended,
all as determined on a consolidated basis. As used herein, "LEVERAGE
MULTIPLIER" means (i) from the date of this Agreement to March 31,
1999, inclusive, 4.75, (ii) from April 1, 1999, to June 30, 1999,
inclusive, 4.50, (iii) from July 1, 1999, to September 30, 1999,
inclusive, 4.00, (iv) from October 1, 1999, to December 31, 1999,
inclusive, 3.75, (v) from January 1, 2000, to March 31, 2000,
inclusive, 3.25, and (vi) on and after April 1, 2000, 3.00."
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(C) Section XXV of the Lease Agreement shall be amended by
deleting the definition of "MAXIMUM ACQUISITION COST" set forth therein and
inserting the following in lieu thereof:
"MAXIMUM ACQUISITION COST means with respect to the aggregate
Acquisition Cost of the Equipment under all of the Schedules,
$55,500,000;"
(D) Exhibit Xx. 0, Xxxxxxx Xx. 0, Xxxxxxx Xx. 0 and Exhibit
No. 4 to the Lease Agreement are deleted and Exhibit Xx. 0, Xxxxxxx Xx. 0,
Xxxxxxx Xx. 0 and Exhibit No. 4 attached to this Amendment are inserted in lieu
thereof.
(E) Each Disbursement Schedule executed and delivered by
Lessee on or prior to the date hereof shall be amended by deleting Paragraphs
B.2., B.3, B.4 and B.8 and inserting the following in lieu thereof:
"2. Daily Lease Rate Factor: From the date of this Schedule to
January 25, 1999, LIBOR Rate plus sixty (60) basis points
per annum, and on and after January 26, 1999, LIBOR Rate
plus the Applicable Margin per annum
3. Basic Term: The thirty-three month period commencing on
the Basic Term Commencement Date.
4. Basic Term Commencement Date: March 15, 1999.
8. Last Delivery Date: February 15, 1999."
(F) Each Disbursement Schedule executed and delivered by
Lessee on or prior to the date hereof shall be amended by inserting in Paragraph
C the following definition in alphabetical order:
"`Applicable Margin' shall mean the particular rate per annum
determined by Lessor in accordance with the pricing grid table which
appears below, based on the ratio of the Companies' Funded Indebtedness
to the Companies' EBITDA, as computed in accordance with the pricing
grid table and the following provisions:
If the Ratio of the Companies' Funded The Applicable Margin is:
Indebtedness to the Companies' EBITDA is:
Greater than or equal to 4.50 to 1.00 2.00%
Less than 4.50 to 1.00, but greater
than or equal to 4.00 to 1.00 1.75%
Less than 4.00 to 1.00, but greater
than or equal to 3.50 to 1.00 1.375%
Less than 3.50 to 1.00, but greater
than or equal to 3.00 to 1.00 1.00%
Less than 3.00 to 1.00, but greater
than or equal to 2.50 to 1.00 0.80%
Less than 2.50 to 1.00, but greater
than or equal to 2.00 to 1.00 0.70%
Less than 2.00 to 1.00 0.65%
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(A) Initially, from January 26, 1999, until changed hereunder
in accordance with the following provisions, the Applicable Margin will be 2.00%
per annum. Commencing with the fiscal quarter of Lessee ending on or nearest to
March 31, 1999, and continuing with each fiscal quarter thereafter, Lessor will
determine the Applicable Margin in accordance with the foregoing pricing grid
table, based on the ratio of (x) the Funded Indebtedness of the Companies as of
the end of the fiscal quarter, to (y) the EBITDA of the Companies for the four
consecutive fiscal quarters ended on the last day of the fiscal quarter, as
identified in the pricing grid table. Changes in the Applicable Margin based
upon changes in such ratio shall become effective on the first day of the month
following the receipt by Lessor pursuant to Section IV(b)(i) or (ii) of the
financial statements of Lessee and it Subsidiaries, accompanied by the
certificate and calculations referred to in Section IV(b)(iii), demonstrating
the computation of such ratio, based upon the ratio in effect at the end of the
applicable period covered (in whole or in part) by such financial statements.
(B) Notwithstanding the above provisions, during any period
when an Event of Default has occurred and is continuing, the Applicable Margin
shall be the highest rate per annum indicated therefor in the foregoing pricing
grid table, regardless of the ratio of Funded Indebtedness to EBITDA at such
time. Notwithstanding the above provisions, but subject to the preceding
sentence, during any period when Borrower has failed to timely deliver its
consolidated financial statements referred to in subsection IV(b)(i) or (ii),
accompanied by the certificate and calculations referred to in subsection
IV(b)(iii), the Applicable Margin shall be the rate per annum indicated for the
level in the foregoing pricing grid table that is one level higher than the
level that is otherwise then currently in effect, regardless of the ratio of
Funded Indebtedness to EBITDA at such time.
(C) Any changes in the Applicable Margin shall be determined
by Lessor in accordance with the above provisions and Lessor will promptly
provide notice of such determinations to Lessee. Any such determination by
Lessor pursuant to the above provisions shall be conclusive and binding absent
manifest error. The Applicable Margin is subject in all respects to compliance
by Lessee with Section XXIII(b) of the Lease, and this schedule of levels for
the Applicable Margin is not intended to waive or otherwise excuse a violation
of Section XXIII(b) of the Lease; if that Section is violated, the Daily Lease
Rate Factor will increase as set forth in Section XIX(j) of the Lease."
3. Representations and Warranties.
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(A) Lessee hereby represents and warrants to Lessor that all
representations and warranties set forth in the Lease Agreement and the
Disbursement Schedules, as amended hereby, are true and correct in all material
respects, and that this Amendment has been executed and delivered by a duly
authorized officer of Lessee and constitute the legal, valid and binding
obligation of Lessee, enforceable against Lessee in accordance with their
respective terms.
(B) The execution, delivery and performance by Lessee of this
Amendment and its performance of the Lease Agreement and the Disbursement
Schedules, as amended hereby, have been authorized by all requisite corporate
action and will not (1) violate (a) any order of any court, or any rule,
regulation or order of any other agency of government, (b) the Articles of
Incorporation, the Code of Regulations or any other instrument of corporate
governance of Lessee, or (c) any provision of any indenture, agreement or other
instrument to which Lessee is a party, or by which Lessee or any of its
properties or assets are or may be bound; (2) be in conflict with, result in a
breach of or constitute, alone or with due notice or lapse of time or both, a
default under any indenture, agreement or other instrument referred to in (1)(c)
above; or (3) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever.
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4. Miscellaneous.
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(A) This Amendment shall be construed in accordance with and
governed by the laws of the State of Ohio, without reference to principles of
conflict of laws. Lessee agrees to pay to Lessor a fee in an amount equal to
$45,000 at the time this Amendment is executed and delivered by Lessor and to
pay on demand all costs and expenses of Lessor, including reasonable attorneys'
fees and expenses, in connection with the preparation, execution and delivery of
this Amendment.
(B) The execution, delivery and performance by Lessor of this
Amendment shall not constitute, or be deemed to be or construed as, a waiver of
any right, power or remedy of Lessor, or a waiver of any provision of the Lease
Agreement. None of the provisions of this Amendment shall constitute, or be
deemed to be or construed as, a waiver of any "Default" or "Potential Default,"
as those terms are defined in the Lease Agreement.
(C) This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
(D) Lessee hereby acknowledges and consents to the following
financial institution being a Participant in the Lease, in addition to the
financial institutions that have been Participants and that acknowledge, consent
and agree to this Amendment: Fifth Third Bank, Northeastern Ohio.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be duly executed as of the day and year first above written.
LESSOR: LESSEE:
NATIONAL CITY BANK, BRUSH XXXXXXX INC.
FOR ITSELF AND AS AGENT FOR
CERTAIN PARTICIPANTS
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxxxx
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Title: Vice President and Senior Lending Officer Title: Treasurer and Secretary
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THE FOREGOING WAIVER AGREEMENT is hereby acknowledged,
consented and agreed to by each of the undersigned by their respective duly
authorized officers as of the day and year first above written.
Address: FIFTH THIRD BANK, NORTHEASTERN
OHIO
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 By:
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Title:
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Address: BANK ONE, NA
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000 By:
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Title:
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Address: XXXXXX TRUST AND SAVINGS BANK
X.X. Xxx 000 (000/00X)
Xxxxxxx, Xxxxxxxx 00000-0000 By: /s/ Xxxxx Xxxxxxxx
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Title: Vice President
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Address: NBD BANK
000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000 By: /s/ Xxxxxxx X. Xxxxxx
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Title: Vice President
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EXHIBIT NO. 1
DISBURSEMENT SCHEDULE
SCHEDULE NO. ______
DATED THIS ________ DAY OF _____________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
Lessor & Mailing Address: Lessee & Mailing Address:
NATIONAL CITY BANK, BRUSH XXXXXXX INC.
FOR ITSELF AND AS AGENT FOR 00000 Xx. Xxxxx Xxxxxx
XXXXXXX PARTICIPANTS Xxxxxxxxx, Xxxx 00000
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
This Disbursement Schedule is executed pursuant to, and incorporates by
reference the terms and conditions of, and capitalized terms not defined herein
shall have the meanings assigned to them in, the Master Lease Agreement
identified above ("Agreement;" said Agreement and this Schedule being
collectively referred to as "Lease"). This Disbursement Schedule, incorporating
by reference the Agreement, constitutes a separate instrument of lease.
A. Disbursement Equipment.
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Pursuant to the terms of the Lease, Lessor agrees to fund disbursements in
respect of the Disbursement Equipment listed on Annex A attached hereto and made
a part hereof.
B. Financial Terms.
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1. Capitalized Lessor's Cost: $___________________________________
(on the date of this Schedule).
2. Daily Lease Rate Factor: LIBOR Rate plus the Applicable Margin per
annum.
3. Basic Term: The thirty-three month period commencing on the Basic
Term Commencement Date.
4. Basic Term Commencement Date: March 15, 1999.
5. Equipment Location: Lessee's plant at 00000 X. Xxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxxx 00000.
6. Lessee Federal Tax ID No.: 00-0000000
7. Maximum Lease Term: The Term shall not exceed twelve (12) years.
8. Last Delivery Date: February 15, 1999.
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C. Interim Term and Interim Rent.
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1. Interim Rent. For the period from and including the Disbursement
Commencement Date to the Basic Term Commencement Date ("Interim Lease Term"),
rent ("Interim Rent") shall accrue on the Capitalized Lessor's Cost in an amount
equal to the product of the Daily Lease Rate Factor times the Capitalized
Lessor's Cost of the Disbursement Equipment times the number of days in the
Interim Interest Period. Interest shall be calculated on the basis of a 360 day
year for the actual number of days elapsed. Interim Rent shall accrue during
each Interim Interest Period and, at the end of each Interim Interest Period,
shall be added to and become part of the Lessor's Capitalized Cost outstanding
under this Disbursement Schedule, unless otherwise paid as provided in the
Agreement.
2. Disbursement Equipment. Lessee represents, warrants and covenants as
follows with respect to the Disbursement Equipment listed on Annex A attached
hereto:
(i) To the best of its knowledge, the Disbursement Equipment will be
completed, shipped and delivered to Lessee, and installed at the
Equipment Location on or prior to the Last Delivery Date;
(ii) Each item of Disbursement Equipment constitutes a portion or
unit of the Equipment described on Annex A attached hereto; and
(iii) The Purchase Order or Purchase Orders relating to that
Disbursement Equipment require the disbursement of funds in an
amount equal to the Capitalized Lessor's Cost, and Lessee has
received invoices for those funds.
As used in this Schedule, the following terms shall have the following
meanings:
"APPLICABLE MARGIN" shall mean the particular rate per annum determined
by Lessor in accordance with the pricing grid table which appears below, based
on the ratio of the Companies' Funded Indebtedness to the Companies' EBITDA, as
computed in accordance with the pricing grid table and the following provisions:
If the Ratio of the Companies' Funded The Applicable Margin is:
Indebtedness to the Companies' EBITDA is:
Greater than or equal to 4.50 to 1.00 2.00%
Less than 4.50 to 1.00, but greater
than or equal to 4.00 to 1.00 1.75%
Less than 4.00 to 1.00, but greater
than or equal to 3.50 to 1.00 1.375%
Less than 3.50 to 1.00, but greater
than or equal to 3.00 to 1.00 1.00%
Less than 3.00 to 1.00, but greater
than or equal to 2.50 to 1.00 0.80%
Less than 2.50 to 1.00, but greater
than or equal to 2.00 to 1.00 0.70%
Less than 2.00 to 1.00 0.65%
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(A) Initially, from January 26, 1999, until changed hereunder in
accordance with the following provisions, the Applicable Margin will be 2.00%
per annum. Commencing with the fiscal quarter of Lessee ending on or nearest to
March 31, 1999, and continuing with each fiscal quarter thereafter, Lessor will
determine the Applicable Margin in accordance with the foregoing pricing grid
table, based on the ratio of (x) the Funded Indebtedness of the Companies as of
the end of the fiscal quarter, to (y) the EBITDA of the Companies for the four
consecutive fiscal quarters ended on the last day of the fiscal quarter, as
identified in the pricing grid table. Changes in the Applicable Margin based
upon changes in such ratio shall become effective on the first day of the month
following the receipt by Lessor pursuant to Section IV(b)(i) or (ii) of the
financial statements of Lessee and it Subsidiaries, accompanied by the
certificate and calculations referred to in Section IV(b)(iii), demonstrating
the computation of such ratio, based upon the ratio in effect at the end of the
applicable period covered (in whole or in part) by such financial statements.
(B) Notwithstanding the above provisions, during any period when an
Event of Default has occurred and is continuing, the Applicable Margin shall be
the highest rate per annum indicated therefor in the foregoing pricing grid
table, regardless of the ratio of Funded Indebtedness to EBITDA at such time.
Notwithstanding the above provisions, but subject to the preceding sentence,
during any period when Borrower has failed to timely deliver its consolidated
financial statements referred to in subsection IV(b)(i) or (ii), accompanied by
the certificate and calculations referred to in subsection IV(b)(iii), the
Applicable Margin shall be the rate per annum indicated for the level in the
foregoing pricing grid table that is one level higher than the level that is
otherwise then currently in effect, regardless of the ratio of Funded
Indebtedness to EBITDA at such time.
(C) Any changes in the Applicable Margin shall be determined by Lessor
in accordance with the above provisions and Lessor will promptly provide notice
of such determinations to Lessee. Any such determination by Lessor pursuant to
the above provisions shall be conclusive and binding absent manifest error. The
Applicable Margin is subject in all respects to compliance by Lessee with
Section XXIII(b) of the Lease, and this schedule of levels for the Applicable
Margin is not intended to waive or otherwise excuse a violation of Section
XXIII(b) of the Lease; if that Section is violated, the Daily Lease Rate Factor
will increase as set forth in Section XIX(j) of the Lease.
"INTERIM INTEREST PERIOD" or "INTEREST PERIOD" shall mean the period
beginning on the date of this Schedule and ending on the same day of each month
thereafter during the Interim Lease Term.
"INTEREST RATE" shall mean that percentage per annum calculated as the
sum of the LIBOR Rate redetermined monthly, plus sixty (60) basis points.
"LIBOR RATE" shall mean, with respect to any Interim Interest Period
occurring during the term of the Lease, an interest rate per annum equal at all
times during such Interim Interest Period to the quotient of (1) the rate per
annum as determined by Lessor at which deposits of U.S. Dollars in immediately
available and freely transferable funds are offered at 11:00 a.m. (London,
England time) two (2) Business Days before the commencement of such Interim
Interest Period to major banks in the London interbank market for a period of
one (1) month and in an amount equal or comparable to the Capitalized Lessor's
Cost, divided by (2) a number equal to 1.00 minus the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of the LIBOR Reserve
Requirements current on the date three (3) Business Days prior to the first day
of the Interim Interest Period.
"LIBOR RESERVE REQUIREMENTS" shall mean the daily average for the
applicable Interest Period of the maximum rate applicable to Lessor or its
Participants at which reserves (including, without limitation, any supplemental,
marginal and emergency reserves) are imposed during such Interest Period by the
Board of Governors of the Federal Reserve System (or any successor) on
"Eurocurrency liabilities", as
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defined in such Board's Regulation D (or in respect of any other category of
liabilities that include deposits by reference to which the interest rates on
Eurodollar loans is determined or any category of extensions of credit or other
assets that include loans by non-United States offices of any lender to United
States residents), having a term equal to such Interest Period, subject to any
amendments of such reserve requirement by such Board or its successor, taking
into account any transitional adjustments thereto.
If at any time Lessor or any Participant (or, without duplication, the
bank holding company of which such Participant is a subsidiary) determines that
either adequate and reasonable means do not exist for ascertaining the LIBOR
Rate, or it becomes impractical for Lessor or any Participant to obtain funds to
make or maintain the financing hereunder with interest at the LIBOR Rate, or
Lessor or any Participant reasonably determines that, as a result of changes to
applicable law after the date of execution of the Agreement, or the adoption or
making after such date of any interpretations, directives or regulations
(whether or not having the force of law) by any court, governmental authority or
reserve bank charged with the interpretation or administration thereof, it shall
be or become unlawful or impossible to make, maintain, or fund the transaction
hereunder at the LIBOR Rate, then Lessor promptly shall give notice to Lessee of
such determination and Lessor and Lessee shall negotiate in good faith a
mutually acceptable alternative method of calculating the Interest Rate and
shall execute and deliver such documents as reasonably may be required to
incorporate such alternative method of calculating the Interest Rate in this
Schedule, within thirty (30) days after the date of Lessor's notice to Lessee.
If the parties are unable mutually to agree to such alternative method of
calculating the Interest Rate in a timely fashion, (a) effective on the
commencement of the next succeeding Interest Period or the date that it becomes
impractical for Lessor or any Participant to maintain the financing hereunder
with interest at the LIBOR Rate as aforesaid, as the case may be, the Interest
Rate shall become a floating rate equal to the Federal Funds Rate plus sixty
(60) basis points, and (b) on the Rent Payment Date next succeeding the
expiration of such thirty (30) day period Lessee shall purchase all (but not
less than all) of the Disbursement Equipment described on all Disbursement
Schedules executed pursuant to the Agreement and shall pay to Lessor, in cash,
the purchase price for the Disbursement Equipment so purchased, determined as
hereinafter provided. (As used herein, "Federal Funds Rate" means the rate of
interest, as reasonably determined by Lessor, paid by or available to Lessor for
the purchase of "federal funds" at the time or times in question on a daily
overnight basis.) The purchase price of the Disbursement Equipment shall be an
amount equal to all amounts disbursed by Lessor in respect of that Disbursement
Equipment, together with all rent and other sums then due on such date, plus all
taxes and charges upon sale and all other reasonable and documented expenses
incurred by Lessor in connection with such sale. Upon satisfaction of the
conditions specified in this Paragraph, Lessor will transfer, on an AS IS, WHERE
IS BASIS, all of Lessor's interest in and to the Disbursement Equipment. Lessor
shall not be required to make and may specifically disclaim any representation
or warranty as to the condition of the Disbursement Equipment and other matters
(except that Lessor shall warrant that it conveyed whatever interest it received
in such Disbursement Equipment free and clear of any Lien created by Lessor).
Lessor shall execute and deliver to Lessee such Uniform Commercial Code
statements of termination as reasonably may be required in order to terminate
any interest of Lessor in and to the Disbursement Equipment.
3. Lessee shall pay to Lessor, for the account of each Participant,
from time to time, the amounts as such Participant may determine to be necessary
to compensate it for any costs which such Participant determines are
attributable to its making or maintaining its interest in the Lease and the
Disbursement Equipment (the "Interest") or any reduction in any amount
receivable by such Participant in respect of any such Interest (such increases
in costs and reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change (as defined below) which:
(i) changes the basis of taxation of any amounts payable to Lessor
for the account of such Participant in respect of such Interest
(other than taxes imposed on or measured by the overall net income
of such Participant in respect of the interest by the jurisdiction
in which such Participant has its principal office or its lending
office); or
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(ii) imposes or modifies any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets
of, or any deposits with or other liabilities of, such Participant;
or
(iii) imposes any other condition affecting this Lease or any
Interest.
For purposes hereof, "Regulatory Change" shall mean any change after the date of
this Lease in United States federal, state or foreign law or regulations
(including, without limitation, Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as amended or supplemented from time
to time) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks including any Participant or
under any United States federal, state or foreign law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof. In
addition, whenever Lessee shall revoke any Disbursement Funding Notice or shall
for any other reason fail to take a disbursement pursuant thereto or shall fail
otherwise to comply therewith, then, in each case on the demand of Lessor or any
Participant, Lessee shall pay that Person such amount as will compensate it for
any loss, cost or loss of profit incurred by it by reason of its liquidation or
reemployment of deposits or other funds.
Without limiting the effect of the foregoing Paragraph (but without
duplication), Lessee shall pay to Lessor, for the account of each Participant,
from time to time on request such amounts as such Participant may determine to
be necessary to compensate such Participant (or, without duplication, the bank
holding company of which such Participant is a subsidiary) for any costs which
it determines are attributable to the maintenance by such Participant (or any
lending office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law) of any court or governmental or monetary authority (i) following any
Regulatory Change or (ii) implementing any risk-based capital guideline or
requirement (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) heretofore or hereafter issued by
any government or governmental or supervisory authority implementing at the
national level the Basle Accord (including, without limitation, the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 208, Appendix A; 00 X.X.X. Xxxx 000, Xxxxxxxx X) and the
Final Risk-Based Capital Guidelines of the Office of the Comptroller of the
Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect of such
Participant's Interest (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of such
Participant (or any lending office or bank holding company) to a level below
that which such Participant (or any lending office or bank holding company)
could have achieved but for such law, regulation, interpretation, directive or
request). For purposes of this Paragraph, "Basle Accord" shall mean the
proposals for risk-based capital framework described by the Basle Committee on
Banking Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, modified and supplemented and in effect from time to time
or any replacement thereof.
Each Participant shall notify Lessee of any event occurring after the
date of this Lease that will entitle such Participant to compensation under the
preceding two Paragraphs as promptly as practicable, but in any event within
thirty (30) days, after such Participant obtains actual knowledge thereof;
provided, that (i) if such Participant fails to give such notice within thirty
(30) days after it obtains actual knowledge of such an event, such Participant
shall, with respect to compensation payable pursuant to the preceding two
Paragraphs in respect of any costs resulting from such event, only be entitled
to payment under the referenced Paragraphs for costs incurred from and after the
date thirty (30) days prior to the date that such Participant does give such
notice, and (ii) such Participant will designate a different lending office for
the Interest if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Participant, be
disadvantageous to such Participant. Each Participant will furnish to Lessee a
certificate setting forth the basis and amount of each request by such
Participant for
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compensation under the preceding two Paragraphs. Determinations and allocations
by each Participant for purposes of the preceding two Paragraphs shall be
conclusive, absent manifest error.
D. Insurance.
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1. Public Liability: $1,000,000 total liability per occurrence and
$2,000,000 in the aggregate, with excess liability in umbrella form of
$10,000,000 per occurrence and in the aggregate, with a maximum deductible
amount of (a) $1,500,000 per occurrence or (b) an amount equal to $1,500,000 per
occurrence plus the amount of any reserves specifically allocated by Lessee for
this type of liability that are satisfactory to Lessor, but in no event greater
than $2,500,000 per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
full replacement cost of each unit of Disbursement Equipment or the amounts
disbursed by Lessor in respect of each unit of Disbursement Equipment, with a
maximum deductible amount of $1,000,000 per occurrence.
This Schedule is not binding or effective with respect to the Agreement
or Equipment until executed on behalf of Lessor and Lessee by an authorized
representative of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
NATIONAL CITY BANK, BRUSH XXXXXXX INC.
FOR ITSELF AND AS AGENT FOR
CERTAIN PARTICIPANTS
By: By:
------------------------- -------------------------
Name: Name:
------------------------- -------------------------
Title: Title:
------------------------- -------------------------
-6-
12
ANNEX A
TO
DISBURSEMENT SCHEDULE NO. ______
DATED THIS ______ DAY OF ______________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
DESCRIPTION OF DISBURSEMENT EQUIPMENT
Type and
Serial Model of Number Cost per
Vendor Numbers Equipment of Units Unit
------ -------- --------- -------- --------
Initials: __________ __________
Lessor Lessee
13
EXHIBIT NO. 2
EQUIPMENT SCHEDULE
SCHEDULE NO. ______
DATED THIS ________ DAY OF _____________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
Lessor & Mailing Address: Lessee & Mailing Address:
NATIONAL CITY BANK, BRUSH XXXXXXX INC.
FOR ITSELF AND AS AGENT FOR 00000 Xx. Xxxxx Xxxxxx
XXXXXXX PARTICIPANTS Xxxxxxxxx, Xxxx 00000
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
This Equipment Schedule is executed pursuant to, and incorporates by reference
the terms and conditions of, and capitalized terms not defined herein shall have
the meanings assigned to them in, the Master Lease Agreement identified above
("Agreement;" said Agreement and this Schedule being collectively referred to as
"Lease"). This Equipment Schedule, incorporating by reference the Agreement,
constitutes a separate instrument of lease.
A. Equipment.
----------
Pursuant to the terms of the Lease, Lessor agrees to acquire and lease
to Lessee the Equipment listed on Annex A attached hereto and made a part
hereof.
B. Financial Terms.
----------------
1. Capitalized Lessor's Cost: $__________________________________
(being an amount equal to funds disbursed and Interim Rent
accrued and unpaid in respect of the Equipment and its parts
and components during the Interim Lease Period).
2. Daily Lease Rate Factor: LIBOR Rate plus the Applicable Margin
per annum.
3. Basic Term: The thirty-three month period commencing on the
Basic Term Commencement Date.
4. Basic Term Commencement Date: March 15, 1999.
5. Equipment Location: Lessee's plant in 00000 X. Xxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxx, Xxxx 00000.
6. Lessee Federal Tax ID No.: 00-0000000
7. Lessee agrees and acknowledges that the Capitalized Lessor's
Cost of the Equipment as stated on the Schedule is equal to
the fair market value of the Equipment on the date hereof.
8. Renewal Term: Each Renewal Term will consist of a one-year
period, and subject to Section XVIII(b), Lessee may elect up
to seven (7) Renewal Terms.
9. Maximum Lease Term: The Term shall not exceed twelve (12)
years.
14
10. Stipulated Loss Values: See Annex D.
11. Termination Values: See Annex D.
12. Assumed Interest Rate: __________% (which will be determined
three (3) Business Days before the date of execution of this
Schedule).
13. Last Delivery Date: February 15, 1999.
C. Term and Rent.
--------------
1. Basic Term and Renewal Term Rent. Commencing on the Basic Term
Commencement Date and payable, in arrears, on the same day of each quarter
thereafter (each, a "Rent Payment Date") during the Basic Term ("Basic Term
Rent") and any Renewal Term ("Renewal Term Rent"), Lessee shall pay as Rent
quarterly installments of (a) interest on the unamortized portion of the unpaid
Capitalized Lessor's Cost as of the immediately preceding Rent Payment Date
(after application of the Rent paid on such date) at the Interest Rate for the
Interest Period following such immediately preceding Rent Payment Date and (b)
of principal in the principal amounts described on the Amortization Schedule
attached as Annex E. Interest shall be calculated on the basis of a 360 day year
for the actual number of days elapsed. Said Rent consists of principal and
interest components, such principal components being as provided in the
Amortization Schedule attached hereto as Annex E.
As used herein, the following terms shall have the following meanings:
"APPLICABLE MARGIN" shall mean the particular rate per annum determined
by Lessor in accordance with the pricing grid table which appears below, based
on the ratio of the Companies' Funded Indebtedness to the Companies' EBITDA, as
computed in accordance with the pricing grid table and the following provisions:
If the Ratio of the Companies' Funded The Applicable Margin is:
Indebtedness to the Companies' EBITDA is:
Greater than or equal to 4.50 to 1.00 2.00%
Less than 4.50 to 1.00, but greater
than or equal to 4.00 to 1.00 1.75%
Less than 4.00 to 1.00, but greater
than or equal to 3.50 to 1.00 1.375%
Less than 3.50 to 1.00, but greater
than or equal to 3.00 to 1.00 1.00%
Less than 3.00 to 1.00, but greater
than or equal to 2.50 to 1.00 0.80%
Less than 2.50 to 1.00, but greater
than or equal to 2.00 to 1.00 0.70%
Less than 2.00 to 1.00 0.65%
(A) Initially, from January 26, 1999, until changed hereunder in
accordance with the following provisions, the Applicable Margin will be 2.00%
per annum. Commencing with the fiscal
-2-
15
quarter of Lessee ending on or nearest to March 31, 1999, and continuing with
each fiscal quarter thereafter, Lessor will determine the Applicable Margin in
accordance with the foregoing pricing grid table, based on the ratio of (x) the
Funded Indebtedness of the Companies as of the end of the fiscal quarter, to (y)
the EBITDA of the Companies for the four consecutive fiscal quarters ended on
the last day of the fiscal quarter, as identified in the pricing grid table.
Changes in the Applicable Margin based upon changes in such ratio shall become
effective on the first day of the month following the receipt by Lessor pursuant
to Section IV(b)(i) or (ii) of the financial statements of Lessee and it
Subsidiaries, accompanied by the certificate and calculations referred to in
Section IV(b)(iii), demonstrating the computation of such ratio, based upon the
ratio in effect at the end of the applicable period covered (in whole or in
part) by such financial statements.
(B) Notwithstanding the above provisions, during any period when an
Event of Default has occurred and is continuing, the Applicable Margin shall be
the highest rate per annum indicated therefor in the foregoing pricing grid
table, regardless of the ratio of Funded Indebtedness to EBITDA at such time.
Notwithstanding the above provisions, but subject to the preceding sentence,
during any period when Borrower has failed to timely deliver its consolidated
financial statements referred to in subsection IV(b)(i) or (ii), accompanied by
the certificate and calculations referred to in subsection IV(b)(iii), the
Applicable Margin shall be the rate per annum indicated for the level in the
foregoing pricing grid table that is one level higher than the level that is
otherwise then currently in effect, regardless of the ratio of Funded
Indebtedness to EBITDA at such time.
(C) Any changes in the Applicable Margin shall be determined by Lessor
in accordance with the above provisions and Lessor will promptly provide notice
of such determinations to Lessee. Any such determination by Lessor pursuant to
the above provisions shall be conclusive and binding absent manifest error. The
Applicable Margin is subject in all respects to compliance by Lessee with
Section XXIII(b) of the Lease, and this schedule of levels for the Applicable
Margin is not intended to waive or otherwise excuse a violation of Section
XXIII(b) of the Lease; if that Section is violated, the Daily Lease Rate Factor
will increase as set forth in Section XIX(j) of the Lease."
"INTEREST PERIOD" shall mean the period beginning on the Basic Term
Commencement Date and ending on the next Rent Payment Date, and each subsequent
quarterly period.
"INTEREST RATE" shall mean that percentage per annum calculated as the
sum of the LIBOR Rate redetermined quarterly, plus sixty (60) basis points.
"LIBOR RATE" shall mean, with respect to any Interest Period occurring
during the term of the Lease, an interest rate per annum equal at all times
during such Interest Period to the quotient of (1) the rate per annum as
determined by Lessor at which deposits of U.S. Dollars in immediately available
and freely transferable funds are offered at 11:00 a.m. (London, England time)
two (2) Business Days before the commencement of such Interest Period to major
banks in the London interbank market for a period of three (3) months and in an
amount equal or comparable to the Capitalized Lessor's Cost, divided by (2) a
number equal to 1.00 minus the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of the LIBOR Reserve Requirements current on
the date three (3) Business Days prior to the first day of the Interest Period.
"LIBOR RESERVE REQUIREMENTS" shall mean the daily average for the
applicable Interest Period of the maximum rate applicable to Lessor or its
Participants at which reserves (including, without limitation, any supplemental,
marginal and emergency reserves) are imposed during such Interest Period by the
Board of Governors of the Federal Reserve System (or any successor) on
"Eurocurrency liabilities", as defined in such Board's Regulation D (or in
respect of any other category of liabilities that include deposits by reference
to which the interest rates on Eurodollar loans is determined or any category of
extensions of credit or other assets that include loans by non-United States
offices of any lender to United
-3-
16
States residents), having a term equal to such Interest Period, subject to any
amendments of such reserve requirement by such Board or its successor, taking
into account any transitional adjustments thereto.
If at any time Lessor or any Participant (or, without duplication, the
bank holding company of which such Participant is a subsidiary) determines that
either adequate and reasonable means do not exist for ascertaining the LIBOR
Rate, or it becomes impractical for Lessor or any Participant to obtain funds to
make or maintain the financing hereunder with interest at the LIBOR Rate, or
Lessor or any Participant reasonably determines that, as a result of changes to
applicable law after the date of execution of the Agreement, or the adoption or
making after such date of any interpretations, directives or regulations
(whether or not having the force of law) by any court, governmental authority or
reserve bank charged with the interpretation or administration thereof, it shall
be or become unlawful or impossible to make, maintain, or fund the transaction
hereunder at the LIBOR Rate, then Lessor promptly shall give notice to Lessee of
such determination and Lessor and Lessee shall negotiate in good faith a
mutually acceptable alternative method of calculating the Interest Rate and
shall execute and deliver such documents as reasonably may be required to
incorporate such alternative method of calculating the Interest Rate in this
Schedule, within thirty (30) days after the date of Lessor's notice to Lessee.
If the parties are unable mutually to agree to such alternative method of
calculating the Interest Rate in a timely fashion, (a) effective on the
commencement of the next succeeding Interest Period or the date that it becomes
impractical for Lessor or any Participant to maintain the financing hereunder
with interest at the LIBOR Rate as aforesaid, as case may be, the Interest Rate
shall become a floating rate equal to the Federal Funds Rate plus sixty (60)
basis points, and (b) on the Rent Payment Date next succeeding the expiration of
such thirty (30) day period Lessee shall purchase all (but not less than all) of
the Equipment described on all Schedules executed pursuant to the Agreement and
shall pay to Lessor, in cash, the purchase price for the Equipment so purchased,
determined as hereinafter provided. (As used herein, "Federal Funds Rate" means
the rate of interest, as reasonably determined by Lessor, paid by or available
to Lessor for the purchase of "federal funds" at the time or times in question
on a daily overnight basis.) The purchase price of the Equipment shall be an
amount equal to the Stipulated Loss Value of such Equipment calculated in
accordance with Annex D as of the date of payment, together with all rent and
other sums then due on such date, plus all taxes and charges upon sale and all
other reasonable and documented expenses incurred by Lessor in connection with
such sale. Upon satisfaction of the conditions specified in this Paragraph,
Lessor will transfer, on an AS IS, WHERE IS BASIS, all of Lessor's interest in
and to the Equipment. Lessor shall not be required to make and may specifically
disclaim any representation or warranty as to the condition of the Equipment and
other matters (except that Lessor shall warrant that it conveyed whatever
interest it received in such Equipment free and clear of any Lien created by
Lessor). Lessor shall execute and deliver to Lessee such Uniform Commercial Code
statements of termination as reasonably may be required in order to terminate
any interest of Lessor in and to the Equipment.
2. If the Rent Payment Date or any Rent Payment Date is not a Business
Day, the Rent otherwise due on such date shall be payable on the immediately
preceding Business Day.
3. Lessee shall pay to Lessor, for the account of each Participant,
from time to time the amounts as such Participant may determine to be necessary
to compensate it for any costs which such Participant determines are
attributable to its making or maintaining its interest in the Lease and the
Equipment (the "Interest") or any reduction in any amount receivable by such
Participant in respect of any such Interest (such increases in costs and
reductions in amounts receivable being herein called "Additional Costs"),
resulting from any Regulatory Change (as defined below) which:
(i) changes the basis of taxation of any amounts payable to Lessor
for the account of such Participant in respect of such Interest
(other than taxes imposed on or measured by the overall net income
of such Participant in respect of the interest by the jurisdiction
in which such Participant has its principal office or its lending
office); or
-4-
17
(ii) imposes or modifies any reserve, special deposit or similar
requirements relating to any extensions of credit or other assets
of, or any deposits with or other liabilities of, such Participant;
or
(iii) imposes any other condition affecting this Lease or any
Interest.
For purposes hereof, "Regulatory Change" shall mean any change after the date of
this Lease in United States federal, state or foreign law or regulations
(including, without limitation, Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as amended or supplemented from time
to time) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks including any Participant or
under any United States federal, state or foreign law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
Without limiting the effect of the foregoing Paragraph (but without
duplication), Lessee shall pay to Lessor, for the account of each Participant,
from time to time on request such amounts as such Participant may determine to
be necessary to compensate such Participant (or, without duplication, the bank
holding company of which such Participant is a subsidiary) for any costs which
it determines are attributable to the maintenance by such Participant (or any
lending office or such bank holding company), pursuant to any law or regulation
or any interpretation, directive or request (whether or not having the force of
law) of any court or governmental or monetary authority (i) following any
Regulatory Change or (ii) implementing any risk-based capital guideline or
requirement (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) heretofore or hereafter issued by
any government or governmental or supervisory authority implementing at the
national level the Basle Accord (including, without limitation, the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System (12 C.F.R. Part 208, Appendix A; 00 X.X.X. Xxxx 000, Xxxxxxxx X) and the
Final Risk-Based Capital Guidelines of the Office of the Comptroller of the
Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect of such
Participant's Interest (such compensation to include, without limitation, an
amount equal to any reduction of the rate of return on assets or equity of such
Participant (or any lending office or bank holding company) to a level below
that which such Participant (or any lending office or bank holding company)
could have achieved but for such law, regulation, interpretation, directive or
request). For purposes of this Paragraph, "Basle Accord" shall mean the
proposals for risk-based capital framework described by the Basle Committee on
Banking Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital Standards" dated
July 1988, as amended, modified and supplemented and in effect from time to time
or any replacement thereof.
Each Participant shall notify Lessee of any event occurring after the
date of this Lease that will entitle such Participant to compensation under the
preceding two Paragraphs as promptly as practicable, but in any event within
thirty (30) days, after such Participant obtains actual knowledge thereof;
provided, that (i) if such Participant fails to give such notice within thirty
(30) days after it obtains actual knowledge of such an event, such Participant
shall, with respect to compensation payable pursuant to the preceding two
Paragraphs in respect of any costs resulting from such event, only be entitled
to payment under the referenced Paragraphs for costs incurred from and after the
date thirty (30) days prior to the date that such Participant does give such
notice, and (ii) such Participant will designate a different lending office for
the Interest if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such Participant, be
disadvantageous to such Participant. Each Participant will furnish to Lessee a
certificate setting forth the basis and amount of each request by such
Participant for compensation under the preceding two Paragraphs. Determinations
and allocations by each Participant for purposes of the preceding two Paragraphs
shall be conclusive, absent manifest error.
-5-
18
D. Insurance.
----------
1. Public Liability: $1,000,000 total liability per occurrence and
$2,000,000 in the aggregate, with excess liability in umbrella form of
$10,000,000 per occurrence and in the aggregate, with a maximum deductible
amount of (a) $1,500,000 per occurrence or (b) an amount equal to $1,500,000 per
occurrence plus the amount of any reserves specifically allocated by Lessee for
this type of liability that are satisfactory to Lessor, but in no event greater
than $2,500,000 per occurrence.
2. Casualty and Property Damage: An amount equal to the higher of the
Stipulated Loss Value or the full replacement cost of the Equipment, with a
maximum deductible amount of $1,000,000 per occurrence.
E. Fixed Purchase Price and Residual Risk Amount
---------------------------------------------
Fixed Purchase Price Residual Risk Amount
(Percent of Capitalized (Percent of Capitalized
End of Lessor's Cost) Lessor's Cost)
------ ----------------------- -----------------------
Basic Term 100.0000% 13.2500%
Renewal Term 1 92.1681% 11.4000%
Renewal Term 2 83.7655% 10.5000%
Renewal Term 3 74.7508% 9.5000%
Renewal Term 4 64.8705% 8.6500%
Renewal Term 5 54.0542% 7.3000%
Renewal Term 6 42.4499% 6.2500%
Renewal Term 7 30.0000% 4.7000%
The Fixed Purchase Price and Residual Risk Amount are each expressed as a
percentage of the Capitalized Lessor's Cost of the Equipment.
This Schedule is not binding or effective with respect to the Agreement
or Equipment until executed on behalf of Lessor and Lessee by an authorized
representative of Lessor and Lessee, respectively.
IN WITNESS WHEREOF, Lessee and Lessor have caused this Schedule to be
executed by their duly authorized representatives as of the date first above
written.
LESSOR: LESSEE:
NATIONAL CITY BANK, BRUSH XXXXXXX INC.
FOR ITSELF AND AS AGENT FOR
CERTAIN PARTICIPANTS
By: By:
--------------------------- ---------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
-6-
19
ANNEX A
TO
SCHEDULE NO. ______
DATED THIS ______ DAY OF ______________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
DESCRIPTION OF EQUIPMENT
Type and
Serial Model of Number Cost per
Vendor Numbers Equipment of Units Unit
------ -------- --------- -------- --------
Initials: __________ __________
Lessor Lessee
20
ANNEX B
TO
SCHEDULE NO. ______
DATED THIS ______ DAY OF _______________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
ASSIGNMENT OF PURCHASE ORDERS
[See Exhibit No. 6 to Master Lease Agreement]
21
ANNEX C
TO
SCHEDULE NO. ______
DATED THIS _______ DAY OF __________________, 199___
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
CERTIFICATE OF ACCEPTANCE
To: National City Bank,
for Itself and as Agent for Certain Participants
Pursuant to the provisions of the above Schedule and Master Lease
Agreement (collectively, the "LEASE"; capitalized terms used but not defined
herein have the meanings ascribed thereto in the Lease), Lessee hereby certifies
and warrants that (a) all equipment listed in the attached invoice or invoices
(the "Equipment") is in good condition, installed (if applicable), and in
working order; and (b) Lessee accepts the Equipment for all purposes of the
Lease, each Purchase Order relating to the Equipment and all attendant
documents.
Lessee does further certify that as of the date hereof (i) no Default
or Potential Default has occurred; and (ii) the representations and warranties
made by Lessee pursuant to or under the Lease are true and correct on the date
hereof.
BRUSH XXXXXXX INC.
By:
------------------------------
Name:
------------------------------
Authorized Representative
Dated: _________________, 199__
22
ANNEX D
TO
SCHEDULE NO. _________
DATED THIS ______ DAY OF ______________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
STIPULATED LOSS AND TERMINATION VALUE TABLE
NO. OF RENT PAYMENT DATE STIPULATED LOSS AND
(after Basic Term Commencement Date) TERMINATION VALUE*
1 100.0000%
2 100.0000%
3 100.0000%
4 100.0000%
5 100.0000%
6 100.0000%
7 100.0000%
8 100.0000%
9 100.0000%
10 100.0000%
11 100.0000%
12 98.0934%
13 96.1529%
14 94.1780%
15 92.1681%
16 90.1225%
17 88.0407%
18 85.9219%
19 83.7655%
20 81.5709%
21 79.3374%
22 77.0642%
23 74.7508%
24 72.3963%
25 70.0000%
26 67.4578%
27 64.8705%
28 62.2373%
29 59.5574%
30 56.8300%
31 54.0542%
32 51.2292%
33 48.3540%
34 45.4279%
35 42.4499%
36 39.4190%
37 36.3344%
38 33.1950%
39 30.0000%
Initials: ________ _________
Lessor Lessee
------------------------
*The Stipulated Loss Value and Termination Value for any unit of
Equipment shall be equal to the Capitalized Lessor's Cost of such unit
multiplied by the appropriate percentage derived from the above table. In the
event that the Lease is for any reason extended, then the last percentage figure
shown above shall control throughout any such extended term.
23
ANNEX E
TO
SCHEDULE NO. _________
DATED THIS _____ DAY OF ______________, 199__
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
AMORTIZATION SCHEDULE
NO. OF RENT
PAYMENT DATE PERCENT OF PERCENT OF
(after Basic Term PRINCIPAL REMAINING PRINCIPAL
Commencement Date) PAYABLE* BALANCE*
1 0.0000% 100.0000%
2 0.0000% 100.0000%
3 0.0000% 100.0000%
4 0.0000% 100.0000%
5 0.0000% 100.0000%
6 0.0000% 100.0000%
7 0.0000% 100.0000%
8 0.0000% 100.0000%
9 0.0000% 100.0000%
10 0.0000% 100.0000%
11 0.0000% 100.0000%
12 1.9066% 98.0934%
13 1.9405% 96.1529%
14 1.9749% 94.1780%
15 2.0099% 92.1681%
16 2.0456% 90.1225%
17 2.0818% 88.0407%
18 2.1188% 85.9219%
19 2.1564% 83.7655%
20 2.1946% 81.5709%
21 2.2335% 79.3374%
22 2.2732% 77.0642%
23 2.3135% 74.7508%
24 2.3545% 72.3963%
25 2.3963% 70.0000%
26 2.5422% 67.4578%
27 2.5873% 64.8705%
28 2.6332% 62.2373%
29 2.6799% 59.5574%
30 2.7274% 56.8300%
31 2.7758% 54.0542%
32 2.8250% 51.2292%
33 2.8751% 48.3540%
34 2.9261% 45.4279%
35 2.9780% 42.4499%
36 3.0309% 39.4190%
37 3.0846% 36.3344%
38 3.1393% 33.1950%
39 3.1950% 30.0000%
Initials: ________ _________
Lessor Lessee
------------------------
*The Principal, and the Outstanding Principal Balance as of any Rent
Payment Date payment (assuming the principal payments due on each Rental Payment
Date are paid when due), shall be equal to the Capitalized Lessor's Cost of the
Equipment multiplied by the appropriate percentage derived from the above table.
24
ANNEX F
TO
SCHEDULE NO. _________
DATED THIS ______ DAY OF ______________, 199___
TO MASTER LEASE AGREEMENT DATED AS OF December 30, 1996
RETURN PROVISIONS: In addition to the provisions provided for in
Section X of this Lease, and provided that Lessee has elected not to exercise
its purchase option pursuant to Section XVIII(d) of the Lease, Lessee shall, at
its expense:
(a) at least one hundred eighty (180) days and not more than three
hundred sixty-five (365) days prior to expiration or earlier termination of the
Lease, provide to Lessor a detailed inventory of all components of the
Equipment. The inventory should include, but not be limited to, a listing of
models and serial numbers for all components comprising the Equipment;
(b) at least one hundred eighty (180) days prior to expiration or
earlier termination of the Lease, upon receiving reasonable notice from Lessor,
provide or cause the vendor(s) or manufacturer(s) to provide to Lessor the
following documents: (i) one set of service manuals, blueprints, process flow
diagrams and operating manuals including replacements and/or additions thereto,
such that all documentation is completely up-to-date; (ii) one set of documents,
detailing Equipment configuration, operating requirements, maintenance records,
and other mechanical data concerning the set-up and operation of the Equipment,
including replacements and/or additions thereto, such that all documentation is
completely up-to-date;
(c) at least one hundred eighty (180) days prior to expiration or
earlier termination of the Lease, upon receiving reasonable notice from Lessor,
make the Equipment available for on-site operational inspections by potential
purchasers, under power, and provide personnel, power and other requirements
necessary to demonstrate electrical and mechanical systems for each item of the
Equipment;
(d) at least ninety (90) days prior to expiration or earlier
termination of the Lease, cause the manufacturer's representative or qualified
equipment maintenance provider, acceptable to Lessor (the "Authorized
Inspector"), to perform a comprehensive physical inspection, including testing
all material and workmanship of the Equipment and if during such inspection,
examination and test, the Authorized Inspector finds any of the material or
workmanship to be defective or the Equipment not operating within the
manufacturer's specifications, then Lessee shall repair or replace such
defective material and, after corrective measures are completed, Lessee will
provide for a follow-up inspection of the Equipment by the Authorized Inspector
as outlined in the preceding Paragraph;
(e) have each item of Equipment returned with an in-depth field service
report detailing said inspection as outlined in Subsection (d) above. The report
shall certify that the Equipment has been properly inspected, examined and
tested and is operating within the manufacturer's specifications;
(f) permit Lessor to videotape the Equipment "under power" at Lessee's
or at any facility where any Equipment is located at a time during normal
working hours mutually agreeable to Lessor and Lessee prior to deinstallation;
(g) have any repairs made to the Equipment in a professional and
workmanlike manner. Any Equipment enhancements or additions will revert to
Lessor upon expiration or earlier termination of the Lease and shall not affect,
in an adverse manner, the Fair Market Value of the Equipment at Lease
expiration. Such additions or enhancements shall be made only with prior written
approval of Lessor (whose approval shall not unreasonably be withheld);
-1-
25
(h) have the Equipment returned in good appearance with adequate
protective coatings over all surfaces as originally painted or coated, and the
Equipment shall be free from rust, and shall be in good, complete working order;
(i) have the Equipment cleaned (including the removal of all beryllium)
and approved by the necessary governmental agencies which regulate the use and
operation of such Equipment so as to be available for immediate use;
(j) properly remove all Lessee installed markings which are not
necessary for the operation, maintenance or repair of the Equipment; and
(k) provide for the deinstallation and packing of the Equipment to
include, but not be limited to, the following: (i) all process fluids shall be
removed from the Equipment and disposed of in accordance with the then current
waste disposal laws and regulations. At no time are materials which could be
considered hazardous waste by any regulatory authority to be shipped with
machinery; (ii) all internal fluids such as lube oil and hydraulic fluid are to
be filled to operating levels; filler caps are to be secured and disconnected
hoses are to be sealed to avoid spillage; (iii) the manufacturer's
representative shall deinstall and match xxxx all Equipment in accordance with
the specifications of the manufacturer; (iv) the Equipment shall be packed
properly and in accordance with the manufacturer's recommendations; (v) Lessee
shall provide for the transportation of the Equipment in a manner consistent
with the manufacturer's recommendations and practices to any locations within
the United States of America as Lessor shall direct; and shall have the
Equipment unloaded at such locations; and (vi) Lessee shall obtain and pay for a
policy of transit insurance for the redelivery period in an amount equal to the
replacement value of the Equipment, and Lessor shall be named as the loss payee
on all such policies of insurance.
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EXHIBIT NO. 3
COMPLIANCE CERTIFICATE
----------------------
-----------, ----
To: National City Bank, for itself and as
Agent for certain Participants
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Subject: Master Lease Agreement, dated as of December 30, 1996, as
amended, between National City Bank, for itself and as Agent
for certain Participants, as lessor, and Brush Xxxxxxx Inc.,
as lessee (the "Lease Agreement")
Greetings:
Pursuant to Section IV(b)(iii) of the Lease Agreement and in
my capacity as the chief financial officer of Brush Xxxxxxx Inc., I hereby
certify that to the best of my knowledge and belief (capitalized terms used, but
not defined herein shall have the meanings ascribed thereto in the Lease
Agreement):
1. The financial statements of the Companies accompanying this
letter are true and complete and fairly present in all Material
respects their consolidated financial condition as of ________________,
_____ (the "Closing Date") and the consolidated results of their
operations for the fiscal period then ending,
2. No Default or Potential Default under the Lease Agreement
exists *[except for those which, together with our intentions in
respect thereof, are set forth in Exhibit One to this Certificate], and
3. As indicated by the calculations below, the Companies are
*[not] in full compliance with Sections XXIII(a) through (d),
inclusive.
[* - In (b) and (c), delete the bracketed language if inapplicable.]
(a) The actual amount of the Companies' TANGIBLE NET WORTH at
the Closing Date is equal to or is greater than the required amount.
$170,696,000
plus $__________ 40% of $_________ annual earnings accumulated from
December 31, 1996 to the end of the
preceding fiscal year (see Section
XXIII(a))
sum $__________ required amount
$__________ actual Tangible Net Worth as of the Closing Date
(b) The FUNDED INDEBTEDNESS of the Companies does not exceed
an amount equal to the LEVERAGE MULTIPLIER times the Companies' EBITDA for the
four consecutive fiscal quarters most recently ended -- the LEVERAGE MULTIPLIER
being (i) from the date of this Agreement to March 31, 1999,
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27
inclusive, 4.75, (ii) from April 1, 1999, to June 30, 1999, inclusive, 4.50,
(iii) from July 1, 1999, to September 30, 1999, inclusive, 4.00, (iv) from
October 1, 1999, to December 31, 1999, inclusive, 3.75, (v) from January 1,
2000, to March 31, 2000, inclusive, 3.25, and (vi) on and after April 1, 2000,
3.00.
$______________ Funded Indebtedness
divided by $______________ EBITDA
$______________ EBIT
$______________ Depreciation
$______________ Amortization
quotient _______________
(c) The ratio of (i) the aggregate of the Companies' EBITDA
for the four consecutive fiscal quarters most recently ended, to (ii) the
aggregate Interest Expense of the Companies for that period, to be less 5.00 to
1:00, all as determined on a consolidated basis.
ratio of $______________ EBITDA
$______________ EBIT
$______________ Depreciation
$______________ Amortization
to $______________ Interest Expense
ratio __________ to __________
(d) The FUNDED INDEBTEDNESS of the Companies does not exceed
an amount equal to the REQUIRED MULTIPLIER times the sum of the Companies'
FUNDED INDEBTEDNESS plus the Companies' TANGIBLE NET WORTH -- the REQUIRED
MULTIPLIER being (i) from the date of the Lease Agreement to December 31, 2000,
inclusive, 0.50, and (ii) on and after January 1, 2001, 0.45.
$______________ Funded Indebtedness
divided by $______________ Funded Indebtedness plus Tangible Net Worth
quotient _______________
BRUSH XXXXXXX INC.
By:
------------------------------
Title:
------------------------------
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EXHIBIT NO. 4
LIST OF EQUIPMENT AND ACQUISITION COST
============= ================================ =========================================== =========================
TOTAL
PURCHASE ORDER NO. ACQUISITION
EQUIPMENT AND VENDOR COST
------------- -------------------------------- ------------------------------------------- =========================
1. Walking Beam Furnace EX90006/Seco-Warwick $2,200,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
2. Hot Mill EX90003/Xxxxxx Engineering $12,400,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
3. Xxxx Aging Furnace EX90012/RAD-CON Inc. $1,550,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
4. Slab Mill EX90007/Integrated Industrial Systems $7,350,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
5. Finish Pickle Line EX90010/SMS Process Lines $7,100,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
6. Four-High Rolling Mill EX90002/Xxxxxx Engineering $9,200,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
7. Anneal/Pickle Line 1. EX90009/SMS Process $13,400,000.00
Lines
Anneal/Pickle Line
2. EX90008/Drever Company
Cont. Anneal Line
------------- -------------------------------- ------------------------------------------- -------------------------
8. Degreasing Line EX90011/SMS Process Lines $2,300,000.00
------------- -------------------------------- ------------------------------------------- -------------------------
TOTAL $55,500,000.00
============= ================================ =========================================== =========================
