FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made as
of the 31 st day of December, 1998, among KEMET CORPORATION, a Delaware
corporation (the "Borrower"), WACHOVIA BANK, N.A. as Agent (successor by
merger to Wachovia Bank of Georgia, N.A. and hereinafter referred to as the
"Agent") under the Credit Agreement (as herein defined) and the BANKS listed
on the signature pages hereto.
Background:
The Borrower, the Agent and the Banks have entered into a certain Credit
Agreement dated as of October 18, 1996, as amended by a First Amendment to
Credit Agreement dated as of August 30, 1997, as further amended by a Second
Amendment to Credit Agreement dated as of March 31, 1998 and as further
amended by a Third Amendment to Credit Agreement dated as of September 9, 1998
(as amended, the "Credit Agreement").
The Borrower, the Agent and the Banks wish to further amend the Credit
Agreement in certain respects, as hereinafter provided.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used herein which are not
otherwise defined herein shall have the respective meanings assigned to them
in the Credit Agreement.
SECTION 2. Amendments. The Credit Agreement is hereby amended as follows:
SECTION 2.1. Amendment to Definitions. The definitions in Section 1.01 are
hereby amended by deleting the definition of "Commitment" in its entirety and
inserting in place thereof the following:
"Commitment" means, with respect to each Bank, (i) the amount set forth
opposite the name of such Bank on the signature pages of that certain Fourth
Amendment to Credit Agreement dated as of December 31, 1998 among the
Borrower, the Agent and the Banks listed on the signature pages thereof, or
(ii) as to any Bank which enters into an Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's
Commitment after giving effect to such Assignment and Acceptance, in each case
as such amount may be reduced from time to time pursuant to Sections 2.08 and
2.09.
SECTION 2.2. Amendment to Section 2.06. Section 2.06(a) is hereby amended
and restated in its entirety to read as follows:
(a) "Applicable Margin" shall be determined quarterly based upon (i) the
ratio of Earnings Before Interest, Leases and Taxes to Consolidated Fixed
Charges (calculated as of the last day of each Fiscal Quarter beginning with
the Fiscal Quarter ending December 31, 1998 and in the manner set forth in
Section 5.05) and (ii) the ratio of Consolidated Funded Debt to Consolidated
Total Capital (calculated as of the last day of each Fiscal Quarter beginning
with the Fiscal Quarter ending December 31, 1998 and in the manner set forth
in Section 5.03), as follows:
If the ratio of Earnings Before Interest, Leases and Taxes to
Consolidated Fixed Charges is greater than or equal to 3.00 to 1.00, then the
Applicable Margin shall be determined as follows:
Ratio of Consolidated Funded Base
Rate Euro-Dollar
Debt to Consolidated Total Capital
Loans Loans
Greater than or equal to
.40
0% .55%
Greater than or equal to .25
but less than
.40
0% .45%
Less than
.25
0% .325%
If the ratio of Earnings Before Interest, Leases and Taxes to
Consolidated Fixed Charges is less than 3.00 to 1.00, then the Applicable
Margin shall be determined as follows:
Ratio of Consolidated Funded Base
Rate Euro-Dollar
Debt to Consolidated Total Capital
Loans Loans
Greater than or equal to
.40
0% 1.00%
Greater than or equal to .25
but less than
.40
0% .70%
Less than .25
0% .475%
The Applicable Margin shall be determined effective as of the date (herein,
the "Rate Determination Date") which is 45 days after the last day of the
Fiscal Quarter as of the end of which the foregoing ratio is being determined,
based on the quarterly financial statements for such Fiscal Quarter, and the
Applicable Margin so determined shall remain effective from such Rate
Determination Date until the date which is 45 days after the last day of the
Fiscal Quarter in which such Rate Determination Date falls (which latter date
shall be a new Rate Determination Date); provided that (i) for the period from
and including the Closing Date to but excluding the Rate Determination Date
next following the Fiscal Quarter ending December 31, 1996, the Applicable
Margin shall be (A) 0% for Base Rate Loans, and (B) .20% for Euro-Dollar
Loans, (ii) in the case of each Applicable Margin determined on the Rate
Determination Date which is 45 days after the fourth and final Fiscal Quarter
of a Fiscal Year, such Applicable Margin shall be redetermined based upon the
annual audited financial statements for the Fiscal Year ended on the last day
of such final Fiscal Quarter and if such Applicable Margin (as so
redetermined) shall be different from the Applicable Margin determined on the
related Rate Determination Date, such Applicable Margin (as so redetermined)
shall be effective retroactive to the related Rate Determination Date, and
(iii) if on any Rate Determination Date the Borrower shall have failed to
deliver to the Banks the financial statements required to be delivered
pursuant to Section 5.01(b) with respect to the Fiscal Quarter most recently
ended prior to such Rate Determination Date, then for the period beginning on
such Rate Determination Date and ending on the earlier of (A) the date on
which the Borrower shall deliver to the Banks the financial statements
required to be delivered pursuant to Section 5.01(b) with respect to such
Fiscal Quarter or any subsequent Fiscal Quarter, or (B) the date on which the
Borrower shall deliver to the Banks annual financial statements required to be
delivered pursuant to Section 5.01(a) with respect to the Fiscal Year which
includes such Fiscal Quarter or any subsequent Fiscal Year, the Applicable
Margin shall be determined as if the ratio of Earnings Before Interest, Leases
and Taxes to
Consolidated Fixed Charges was less than 3.00 to 1.00 and the ratio of
Consolidated Funded Debt to Consolidated Total Capital was greater than or
equal to .40 at all times during such period. Any change in the Applicable
Margin on any Rate Determination Date shall result in a corresponding change,
effective on and as of such Rate Determination Date, in the interest rate
applicable to each Syndicated Loan outstanding on such Rate Determination
Date.
SECTION 2.3. Amendment to Section 2.07. Section 2.07(a) is hereby
amended and restated in its entirety to read as follows:
(a) The Borrower shall pay to the Agent for the ratable account of
each Bank a facility fee equal to the product of: (i) the aggregate of the
daily average amounts of such Bank's Commitment (irrespective of usage), times
(ii) a per annum percentage equal to the Applicable Facility Fee Rate. Such
facility fee shall accrue from and including the Closing Date to but excluding
the Termination Date. Facility fees shall be payable quarterly in arrears on
the Facility Fee Payment Date next following each Facility Fee Determination
Date and on the Termination Date; provided that should the Commitments be
terminated at any time prior to the Termination Date for any reason, the
entire accrued and unpaid facility fee shall be paid on the date of such
termination. The "Applicable Facility Fee Rate" shall be determined quarterly
based upon (i) the ratio of Earnings Before Interest, Leases and Taxes to
Consolidated Fixed Charges (calculated as of the last day of each Fiscal
Quarter beginning with the Fiscal Quarter ending December 31, 1998 and in the
manner set forth in Section 5.05) and (ii) the ratio of Consolidated Funded
Debt to Consolidated Total Capital (calculated as of the last day of each
Fiscal Quarter beginning with the Fiscal Quarter ending December 31, 1998 and
in the manner set forth in Section 5.03), as follows:
If the ratio of Earnings Before Interest, Leases and Taxes to
Consolidated Fixed Charges is greater than or equal to 3.00 to 1.00, then the
Applicable Facility Fee Rate shall be determined as follows:
Ratio of Consolidated Funded
Applicable Facility
Debt to Consolidated Total Capital
Fee Rate
Greater than or equal to
.40 .20%
Greater than or equal to .25
but less than
.40
.15%
Less than .25
.125%
If the ratio of Earnings Before Interest, Leases and Taxes to
Consolidated Fixed Charges is less than 3.00 to 1.00, then the Applicable
Facility Fee Rate shall be determined as follows:
Ratio of Consolidated Funded
Applicable Facility
Debt to Consolidated Total Capital
Fee Rate
Greater than or equal to
.40 .25%
Greater than or equal to .25
but less than
.40
.175%
Less than
.25
.15%
The Applicable Facility Fee Rate shall be determined effective as of the date
(herein, the "Facility Fee Determination Date") which is 45 days after the
last day of the Fiscal Quarter as of the end of which the foregoing ratio is
being determined, based on the quarterly financial statements for such Fiscal
Quarter, and the Applicable Facility Fee Rate so determined shall remain
effective from such Facility Fee Determination Date until the date which is 45
days after the last day of the Fiscal Quarter in which such Facility Fee
Determination Date falls (which latter date shall be a new Facility Fee
Determination Date); provided that (i) for the period from and including the
Closing Date to but excluding the Facility Fee Determination Date next
following the Fiscal Quarter ending December 31, 1996, the Applicable
Facility Fee Rate shall be .10%; (ii) in the case of each Applicable Facility
Fee Rate determined on the Facility Fee Determination Date which is 45 days
after the fourth and final Fiscal Quarter of a Fiscal Year, such Applicable
Facility Fee Rate shall be redetermined based upon the annual audited
financial statements for the Fiscal Year ended on the last day of such final
Fiscal Quarter and if such Applicable Facility Fee Rate (as so redetermined)
shall be different from the Applicable Facility Fee Rate determined on the
related Facility Fee Determination Date, such Applicable Facility Fee Rate (as
so redetermined) shall be effective retroactive to the related Facility Fee
Determination Date, and (iii) if on any Facility Fee Determination Date the
Borrower shall have failed to deliver to the Banks the financial statements
required to be delivered pursuant to Section 5.01(b) with respect to the
Fiscal Quarter most recently ended prior to such Facility Fee Determination
Date, then for the period beginning on such Facility Fee Determination Date
and ending on the earlier of (A) the date on which the Borrower shall deliver
to the Banks the financial statements required to be delivered pursuant to
Section 5.01(b) with respect to such Fiscal Quarter or any subsequent Fiscal
Quarter, and (B) the date on
which the Borrower shall deliver to the Banks annual financial statements
required to be delivered pursuant to Section 5.01(a) with respect to the
Fiscal Year which includes such Fiscal Quarter or any subsequent Fiscal Year,
the Applicable Facility Fee Rate shall be determined as if the ratio of
Earnings Before Interest, Leases and Taxes to Consolidated Fixed Charges was
less than 3.00 to 1.00 and the ratio of Consolidated Funded Debt to
Consolidated Total Capital was greater than or equal to .40 at all times
during such period.
SECTION 2.4. Amendment to Section 5.03. Section 5.03 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
SECTION 5.03. Ratio of Consolidated Funded Debt to Consolidated Total
Capital. The ratio of Consolidated Funded Debt to Consolidated Total Capital
shall not at any time exceed .45 to 1.00.
SECTION 2.5. Amendment to Section 5.04. Section 5.04 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
SECTION 5.04. Minimum Consolidated Net Worth. Consolidated Net Worth will at
no time be less than the greater of (x) $245,000,000, or (y) 85% of
Consolidated Net Worth as of September 30, 1998, minus the aggregate amount of
Capital Stock repurchased by the Borrower or any Consolidated Subsidiary after
the Closing Date, plus the sum of (i) 50% of the cumulative Reported Net
Income of the Borrower and its Consolidated Subsidiaries during any period
after September 30, 1998 (taken as one accounting period), calculated
quarterly but excluding from such calculations of Reported Net Income for
purposes of this clause (i) any quarter in which the Reported Net Income of
the Borrower and its Consolidated Subsidiaries is negative, and (ii) 50% of
the cumulative Net Proceeds of Capital Stock received during any period after
September 30, 1998, calculated quarterly.
SECTION 2.6. Amendment to Section 5.05. Section 5.05 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:
SECTION 5.05. Ratio of Earnings Before Interest, Leases and Taxes to
Consolidated Fixed Charges. At the end of each Fiscal Quarter, the ratio of
Earnings Before Interest, Leases and Taxes for the Fiscal Quarter then ending
and the three Fiscal Quarters immediately preceding the Fiscal Quarter then
ending to Consolidated Fixed Charges for the Fiscal Quarter then ending and
the three Fiscal Quarters immediately preceding the Fiscal Quarter then ending
shall be greater than (a) 3.00 to 1.00 from and including the Fiscal Quarter
ending December 31, 1996 to but excluding the Fiscal Quarter ending September
30, 1998, (b) 2.50 to 1.00 from and including the Fiscal Quarter ending
September 30, 1998 to but excluding the Fiscal Quarter ending December 31,
1998, (c) 2.00 to 1.00 from and including the Fiscal Quarter ending December
31, 1998 to but excluding the Fiscal Quarter ending Xxxxx 00, 0000, (x) 1.25
to 1.00 from and including the Fiscal Quarter ending March 31, 1999 to but
excluding the Fiscal Quarter ending September 30, 1999,
(e) 1.50 to 1.00 from and including the Fiscal Quarter ending September 30,
1999 to but excluding the Fiscal Quarter ending June 30, 2000, and (f) 1.75 to
1.00 for all Fiscal Quarters ending on or after June 30, 2000.
SECTION 2.7. Amendment to Section 9.05. Section 9.05(a) of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
(a) Any provision of this Agreement, the Notes or any other Loan
Documents may be amended or waived if, but only if, such amendment or waiver
is in writing and is signed by the Borrower and the Required Banks (and, if
the rights or duties of the Agent are affected thereby, by the Agent);
provided that no such amendment or waiver shall, unless signed by all the
Banks, (i) change the Commitment of any Bank or subject any Bank to any
additional obligation (other than as contemplated by Section 2.05(b)), (ii)
change the principal of or reduce the rate of interest on any Loan or reduce
any fees hereunder, (iii) change the date fixed for any payment of principal
of or interest on any Loan or any fees hereunder, (iv) change the amount of
principal, or reduce the rate or amount of interest or fees due on any date
fixed for the payment thereof, (v) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Notes, or the percentage of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement, (vi) change the
manner of application of any payments made under this Agreement or the Notes,
(vii) release or substitute all or any substantial part of the collateral (if
any) held as security for the Loans, or (viii) release any guaranty given to
support payment of the Loans.
SECTION 2.8. Change in Commitments. The Banks listed on the signature pages
to the Credit Agreement are hereby amended to exclude PNC Bank, N.A., reducing
its Commitment from $15,000,000 to $0. The parties hereto agree that the
outstanding Syndicated Loans made by PNC Bank, N.A. shall be paid in full on
the date hereof, together with all accrued interest and fees payable to PNC
Bank, N.A., and PNC Bank, N.A. shall be released from all the rights, duties
and obligations of a Bank under the Credit Agreement from and after such
payment, provided that PNC Bank, N.A. shall be entitled to compensation
pursuant to Section 8.05 of the Credit Agreement in connection with the
prepayment of the Euro-Dollar Loans made by it, with such compensation to be
paid by the Borrower within five days of request by PNC Bank, N.A.
SECTION 3. Conditions to Effectiveness. The effectiveness of this Amendment
and the obligations of the Banks hereunder are subject to the following
conditions, unless the Banks waive such conditions:
(a) receipt by the Agent from each of the parties hereto of either (i) a duly
executed counterpart of this Amendment signed by such party or (ii) a
facsimile transmission stating that such party has duly executed a counterpart
of this Amendment and sent such counterpart to the Agent;
(b) receipt by the Agent of the amendment fee provided for in Section 8 of
this Amendment;
(c) receipt by the Agent of new Money Market Notes (the "New Notes") for the
account of each Bank listed on the signature pages hereto (other than PNC
Bank, N.A.) in the form of Exhibit A to this Amendment;
(d) no material adverse change shall have occurred in the financial markets
since November 18, 1998; and
(e) the fact that the representations and warranties of the Borrower
contained in Section 5 of this Amendment shall be true in all material
respects on and as of the date hereof.
SECTION 4. No Other Amendment. Except for the amendment set forth above, the
text of the Credit Agreement shall remain unchanged and in full force and
effect. This Amendment is not intended to effect, nor shall it be construed
as, a novation. The Credit Agreement and this Amendment shall be construed
together as a single instrument and any reference to the "Agreement" or any
other defined term for the Credit Agreement in the Credit Agreement, the Notes
or any certificate, instrument or other document delivered pursuant thereto
shall mean the Credit Agreement as amended hereby and as it may be amended,
supplemented or otherwise modified hereafter.
SECTION 5. Representations and Warranties. The Borrower hereby represents
and warrants in favor of the Agent and the Banks as follows:
(a) After giving effect to this Amendment, no Default or Event of Default
under the Credit Agreement has occurred and is continuing on the date hereof;
(b) The Borrower has the corporate power and authority to enter into this
Amendment and to do all acts and things as are required or contemplated
hereunder to be done, observed and performed by it;
(c) This Amendment and the New Notes have been duly authorized, validly
executed and delivered by one or more authorized officers of the Borrower and
each of this Amendment, the New Notes and the Credit Agreement, as amended
hereby, constitutes the legal, valid and binding obligation of the Borrower
enforceable against it in accordance with its terms; provided, that the
enforceability of each of this Amendment, the New Notes and the Credit
Agreement, as amended hereby, is subject to general principles of equity and
to bankruptcy, insolvency and similar laws affecting the enforcement of
creditors' rights generally;
(d) The execution and delivery of this Amendment, the New Notes and the
Borrower's performance hereunder and under the Credit Agreement as amended
hereby do not and will not require the consent or
approval of any regulatory authority or governmental authority or agency
having jurisdiction over the Borrower other than those which have already been
obtained or given, nor be in contravention of or in conflict with the Articles
of Incorporation or Bylaws of the Borrower, or the provision of any statute,
or any judgment, order or indenture, instrument, agreement or undertaking, to
which the Borrower is a party or by which its assets or properties are or may
become bound; and (e) Since March 31, 1998, there has been no event, act
condition or occurrence having a Material Adverse Effect.
SECTION 6. Counterparts. This Amendment may be executed in multiple
counterparts, each of which shall be deemed to be an original and all of
which, taken together, shall constitute one and the same agreement.
SECTION 7. Governing Law. This Amendment shall be deemed to be made pursuant
to the laws of the State of Georgia with respect to agreements made and to be
performed wholly in the State of Georgia and shall be construed, interpreted,
performed and enforced in accordance therewith.
SECTION 8. Amendment Fee. On the date that this Amendment becomes
effective, the Borrower shall pay to the Agent for the ratable account of each
Bank an amendment fee equal to the product of such Bank's Commitment
(irrespective of usage) as of such date multiplied by .10%.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed under seal by their respective authorized officers as of the day and
year first above written.
BORROWER:
KEMET
CORPORATION
By:
/S/ D. R. Cash [SEAL]
Title:
Senior Vice President-Administration
and
Treasurer
[Remainder of this page intentionally left blank]
Commitment: WACHOVIA BANK,
N.A. (successor by merger
$65,000,000 to Wachovia
Bank of Georgia, N.A. and Wachovia
Bank
of South Carolina, N.A. and formerly known
as
Wachovia Bank of North Carolina, N.A.),
as
Agent and as a Bank
By:
/S/ Xxxxxxxx Xxxxx [SEAL]
Title:
Vice President
[Remainder of this page
intentionally left blank]
Commitment: ABN AMRO BANK N.V.
ATLANTA AGENCY,
$30,000,000 as Co-Agent and
Bank
By:
/S/ Xxxxx X. Xxxxxx [SEAL]
Title:
Group Vice President
By:
/S/ Xxxxxx X. Xxxxxx [SEAL]
Title:
Vice President
[Remainder of this page intentionally left
blank]
Commitment: SUNTRUST BANK,
ATLANTA
$15,000,000
By:
/S/ Xxxxxxxx X. Xxxxxxx [SEAL]
Title:
Vice President
By:
/S/ Xxxx Xxxxxxx [SEAL]
Title:
Banking Officer
[Remainder of this page
intentionally left blank]
Commitment: FIRST UNION
NATIONAL BANK (formally
$25,000,000 known as First
Union National Bank of South Carolina)
By:
/S/ Xxxxxxx X. Xxxxx [SEAL]
Title:
Vice President
[Remainder of this page intentionally left
blank]
Commitment: PNC BANK,
NATIONAL ASSOCIATION
$0.00
By:
/S/ Xxxx X. Xxxxx [SEAL]
Title:
Vice President
[Remainder of this page intentionally
left blank]
Commitment: BANK OF AMERICA
NT & SA
$15,000,000
By:
/S/ Xxxxx Xx Xxxxx [SEAL]
Title:
Managing Director
[Remainder of this page intentionally
left blank]
EXHIBIT
A
MONEY MARKET NOTE
$150,000,000
Atlanta, Georgia
December 31, 1998
For value received, KEMET CORPORATION, a Delaware corporation (the
"Borrower"), promises to pay to the order of
(the "Bank"), for the account of its Lending Office, the principal sum of One
Hundred Fifty Million and No/100 Dollars ($150,000,000), or such lesser amount
as shall equal the unpaid principal amount of each Money Market Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below,
on the dates and in the amounts provided in the Credit Agreement. The
Borrower promises to pay interest on the unpaid principal amount of this Money
Market Note on the dates and at the rate or rates provided for in the Credit
Agreement. Interest on any overdue principal of and, to the extent permitted
by law, overdue interest on the principal amount hereof shall bear interest at
the Default Rate, as provided for in the Credit Agreement. All such payments
of principal and interest shall be made in lawful money of the United States
in Federal or other immediately available funds at the office of Wachovia Bank
of Georgia, N.A., 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, or such
other address as may be specified from time to time pursuant to the Credit
Agreement.
All Money Market Loans made by the Bank, the respective maturities
thereof, the interest rates from time to time applicable thereto and all
repayments of the principal thereof shall be recorded by the Bank and, prior
to any transfer hereof, endorsed by the Bank on the schedule attached hereto,
or on a continuation of such schedule attached to and made a part hereof;
provided that the failure of the Bank to make, or any error of the Bank in
making, any such recordation or endorsement shall not affect the obligations
of the Borrower hereunder or under the Credit Agreement.
This note is one of the Money Market Notes referred to in the Credit Agreement
dated as of October 18, 1996 among the Borrower, the banks listed on the
signature pages thereof and their successors and assigns and Wachovia Bank of
Georgia, N.A., as Agent, and ABN AMRO Bank N.V. Atlanta Agency, as Co-Agent
(as the same may be amended or modified from time to time, the "Credit
Agreement"). This Note replaces the Money Market Note of the Borrower dated
October 18, 1996 executed and delivered in connection with the original
execution of the Credit Agreement and is one of the "Money Market Notes"
referred to in the Credit Agreement. Terms defined in the Credit Agreement
are used herein with the same meanings. Reference is made to the Credit
Agreement for provisions for the prepayment and the repayment hereof and the
acceleration of the maturity hereof.
The Borrower hereby waives presentment, demand, protest, notice of demand,
protest and nonpayment and any other notice required by law relative hereto,
except to the extent as otherwise may be expressly provided for in the Credit
Agreement.
The Borrower agrees, in the event that this note or any portion hereof is
collected by law or through an attorney at law, to pay all reasonable costs of
collection, including, without limitation, reasonable attorneys' fees.
IN WITNESS WHEREOF, the Borrower has caused this Money Market Note to be duly
executed under seal, by its duly authorized officer as of the day and year
first above written.
KEMET CORPORATION
By: /S/ D. R. Cash
[SEAL]
Title: Senior Vice President
- Administration
and Treasurer
