Exhibit 10.8
AMENDMENT NO. 14
TO AMENDED AND RESTATED CREDIT
AGREEMENT
AND WAIVER
THIS AMENDMENT NO. 14 TO AMENDED AND
RESTATED CREDIT AGREEMENT AND WAIVER, dated as of August 28,
2008 (the “ Agreement ”) relating to the Credit
Agreement referenced below, is by and among WOLVERINE TUBE, INC., a
Delaware corporation (the “ Company ”), certain
of its Subsidiaries identified as Subsidiary Borrowers on the
signature pages hereto and any additional Subsidiaries of the
Company which become parties to the Credit Agreement in accordance
with the terms thereof (collectively referred to as the “
Subsidiary Borrowers ” and individually referred to as
a “ Subsidiary Borrower ”) (hereinafter, the
Company and the Subsidiary Borrowers are collectively referred to
as the “ Borrowers ” or referred to individually
as a “ Borrower ”), each of the financial
institutions identified as Lenders on the signature pages hereto
(the “ Lenders ” and each individually, a
“ Lender ”), and WACHOVIA BANK, NATIONAL
ASSOCIATION, (“ Wachovia ”), acting in the
manner and to the extent described in Article XIII of the
Credit Agreement (in such capacity, the “ Administrative
Agent ” or the “ Agent ”). Terms used
but not otherwise defined herein shall have the meanings provided
in the Credit Agreement and the provisions of Sections 1.2 and 1.3
of the Credit Agreement related to the definitions shall apply
herein.
W I T N E S S E T H
WHEREAS, a $35,000,000 credit
facility has been extended to the Borrowers pursuant to the terms
of that certain Amended and Restated Credit Agreement dated as of
April 28, 2005 (as amended, modified or otherwise supplemented
from time to time, the “ Credit Agreement ”)
among the Borrowers, the Lenders, and the Administrative
Agent;
WHEREAS, the Borrowers have advised
the Administrative Agent that the Borrowers have failed to comply
with Section 8.3 of the Credit Agreement for the period ending
June 29, 2008, resulting in the occurrence of an Event of
Default;
WHEREAS, the Borrowers have
requested that the Lenders waive the foregoing Event of Default and
agree to amend certain of the provisions of the Credit Agreement;
and
WHEREAS, the undersigned Lenders
have agreed to waive the above-described Event of Default and to
amend the Credit Agreement as contemplated herein pursuant to the
terms and conditions herein;
NOW, THEREFORE, in consideration of
these premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
(A) Amendments to Credit
Agreement . Effective
on (and subject to the occurrence of) the Amendment No. 14
Effective Date (as hereinafter defined), the Credit Agreement shall
be amended as follows:
1. The definition of Applicable
Percentage, as set forth in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“ Applicable
Percentage ” shall mean, for any day, for (i) Base
Rate Loans, 1.50%, (ii) Eurodollar Loans, LMIR Loans and
Letter of Credit Fees, 3.00% and (iii) Unused Fees,
0.50%.
2. The definition of Borrowing Base,
as set forth in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety as follows:
“ Borrowing Base
” means a dollar amount equal to the sum of
(a) up to 85% of Eligible Accounts Receivable of the Credit
Parties, plus (b) the sum of (i) up to 60% of
Eligible Inventory of all Credit Parties other than Wolverine
Joining Technologies, LLC consisting of raw materials, finished
goods, and billet inventory and (ii) the lesser of
(A) $3,000,000 or (B) up to 60% of Eligible Inventory of
Wolverine Joining Technologies, LLC consisting of raw materials,
finished goods, and billet inventory, plus (c) the
lesser of (A) up to 25% of the net book value of Eligible
Equipment of the Credit Parties, determined in accordance with
GAAP, and (B) $11,000,000 minus (d) reserves
established from time to time by the Administrative Agent in its
sole discretion, in addition to the existing reserve in the amount
of $3,000,000. It is understood and agreed that the Agent shall
reserve against the Borrowing Base an amount equal to 105% of the
maximum amount that was available to be drawn under any expired or
terminated Consignment Letter of Credit until the 120th day
following the expiration date or termination thereof or, if
earlier, the date on which such Consignment Letter of Credit has
been cash collateralized in accordance with Section 2.8
hereof.
3. The definition of Consolidated
EBITDA, as set forth in Section 1.1 of the Credit Agreement is
hereby amended and restated in its entirety to read as
follows:
“ Consolidated
EBITDA ” means, for any applicable period of computation,
without duplication, the sum of (i) Consolidated Net Income
for such period, but excluding therefrom all extraordinary items of
income (determined in accordance with GAAP), plus
(ii) the aggregate amount of depreciation and amortization
charges made in calculating Consolidated Net Income for such
period, plus (iii) aggregate Consolidated Interest
Expense for such period, plus (iv) the aggregate amount
of all income taxes reflected on the consolidated statements of
income of the Consolidated Parties for such period, minus
(v) for each fiscal month ending after December 31, 2007,
with respect to accrued charges in the original amount of
$8,796,323 in connection with the plant located in Decatur, Alabama
(the “ Decatur Accrued Amount ”), the portion of
the unpaid Decatur Accrued Amount paid in cash during such period
until the Decatur Accrued Amount has been reduced to
$0.00.
4. The definition of Consolidated
Net Income, as set forth in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“ Consolidated Net
Income ” means, for any applicable period of computation,
the net income after taxes of the Consolidated Parties for
such
2
period, as adjusted for
(a) non-cash adjustments to Consolidated Net Income due to the
effect of changes in accounting methods required by GAAP,
(b) the tax adjusted net value of (i) the non-cash
adjustments to Consolidated Net Income on account of gains or
losses resulting from changes in the metal variance account
required by the mark to market of the Copper Hedge, as determined
in accordance with GAAP and (ii) the non cash adjustments to
valuations of inventory that consists of copper covered by the
Copper Hedge resulting from the Company’s mark to market of
inventory levels under the Copper Hedge at the time of testing
(with the submission of the certificate pursuant to
Section 7.1(d), the Company will provide the Administrative
Agent with a reconciliation of these adjustments in a format
similar to that of Exhibit L) and (c) non-cash adjustments to
Consolidated Net Income related to impairment of assets, as
determined in accordance with GAAP.
5. The definition of Consolidated
Scheduled Debt Payments, as set forth in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety to
read as follows:
“ Consolidated Scheduled
Funded Debt Payments ” means, for any applicable period
of computation, the sum of all payments of principal on
Consolidated Funded Debt (other than intercompany Indebtedness)
actually paid by the Company and its Consolidated Subsidiaries
during the applicable measurement period (including the principal
component of payments actually paid on Capital Leases or under any
synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product during the
applicable measurement period).
6. The definition of Fixed Charge
Coverage Ratio, as set forth in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:
“ Fixed Charge Coverage
Ratio ” means, for any applicable period of computation,
the ratio of (i) the sum of (A) Consolidated EBITDA of
the Domestic Consolidated Parties, plus (B) the amount
of net cash received in the United States by Wolverine China
Investments, LLC from a permitted disposition of an interest in
Wolverine Tube (Shanghai) Limited , plus (C) the
aggregate amount of cash which has been distributed by any Foreign
Consolidated Party to any Domestic Consolidated Party and which has
been received by such Domestic Consolidated Party within the
applicable period of computation, less Unfinanced Capital
Expenditures of the Domestic Consolidated Parties, less all
Consolidated Cash Taxes of the Domestic Consolidated Parties paid
during the applicable period, less cash dividends paid by
the Company for the applicable period to (ii) total
Consolidated Fixed Charges plus all payments and
contributions by the Company to The Wolverine Tube, Inc. Retirement
Plan in excess of the Pension Payment. The applicable period of
computation shall, for the purpose of determining compliance with
Section 8.1 hereof, be the cumulative consecutive monthly
period commencing as of August 1, 2008 and ending as of the
date of determination.
3
For avoidance of doubt, for
purposes of calculation of the Fixed Charge Coverage Ratio only,
(a) the calculation of Consolidated Net Income, as used in the
calculation of Consolidated EBITDA, shall include only the income
after taxes and accompanying adjustments of the Domestic
Consolidated Parties, (b) the definition of Consolidated
EBITDA shall include only those adjustments for depreciation and
amortization, Consolidated Interest Expense and income taxes
attributable to the Domestic Consolidated Parties, and (c) the
calculation of Consolidated Fixed Charges, including, without
limitation, the Consolidated Cash Interest Expense and Consolidated
Scheduled Funded Debt components thereof, shall include all of the
Consolidated Parties.
7. The definition of Interest
Determination Date, as set forth in Section 1.1 of the Credit
Agreement is hereby deleted.
8. The definition of Maturity Date,
as set forth in Section 1.1 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
“ Maturity Date
” means February 19, 2009.
9. The definition of Permitted
Investments, as set forth in Section 1.1 of the Credit
Agreement is amended by (A) amending and restating Section
(k) in its entirety as follows:
(k) Investment of cash by a
Domestic Consolidated Party in Wolverine Tubagem (Portugal) LDA
(“ Wolverine Portugal ”) in an aggregate amount
not to exceed $8,000,000 during the fourth calendar quarter of
2008, which investment shall be returned by Wolverine Portugal to
such Domestic Consolidated Party in cash within ten
(10) business days after such initial
investment;
and (B) deleting sections
“(m)” and “(q)” in their entirety and by
substituting “[intentionally omitted]” in their
place and stead, respectively.
10. The definition of Revolving Loan
Commitment as set forth in Section 1.1 of the Credit Agreement
is hereby amended and restated in its entirety as
follows:
“ Revolving Loan
Commitment ” means $25,000,000 (U.S.), as such amount may
be reduced in accordance with Section 2.10.
11. Section 1.1 of the Credit
Agreement is hereby amended by adding the following new definitions
in the appropriate alphabetical order:
“ Domestic Consolidated
Parties ” means such of the Consolidated Parties which
are organized and existing under the laws of the United States or
any state or commonwealth thereof or under the laws of the District
of Columbia.
“ Excess Liquidity
” means the sum of (x) Excess Availability, plus
(y) the amount by which (1) the amount of calculated
funding availability under the
4
Second Amended and Restated
Receivables Purchase Agreement, dated as February 21, 2008
(the “ Receivables Agreement ”) among the SPC,
Wolverine Finance, LLC, the Company, the liquidity banks from time
to time party thereto, The CIT Group/Business Credit, Inc.,
individually and as co-agent, and Wachovia Bank, National
Association, as agent, demonstrated in the most recent Weekly
Report or Settlement Report (as each such term is defined therein),
as the case may be, delivered by the Company thereunder, as
calculated in accordance with the Receivables Agreement in effect
on the date hereof, exceeds (2) the least of (I) the
Purchase Limit, (II) the Net Pool Balance minus Required Reserves
and (III) the product of 85% times the aggregate Outstanding
Balance of Eligible Receivables, minus the Aggregate Invested Amount (as each such term
is defined in the Receivables Agreement.
“ Foreign Consolidated
Parties ” means such of the Consolidated Parties which
are not Domestic Consolidated Parties.
“ Amendment No. 14
Effective Date ” means August 28,
2008.
“ Pension Payment
” means the contribution by the Company to The Wolverine
Tube, Inc. Retirement Plan in the amount of
$6,558,803.00.
12. Section 4.4(b)(i) of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
(i) Revolving Loan
Overadvance . If, at any time the Revolving Loans outstanding
plus the LOC Obligations outstanding plus IRPA
Obligations exceed the lesser of the Borrowing Base and the
Revolving Loan Commitment, then the Borrowers (or the applicable
Borrower) shall immediately make a payment hereunder in an amount
equal to such excess. Payments made under (A) and
(B) shall be applied first pro rata to Base Rate Loans,
second to LMIR Loans, third to Eurodollar Loans in
direct order of Interest Period maturities, and fourth ,
with respect to any Letters of Credit then outstanding, a payment
of cash collateral into a cash collateral account opened by the
Administrative Agent, for the benefit of the lenders with respect
to the undrawn and unexpired amount of such Letters of Credit, up
to the amount of such excess.
13. Section 7.1(i) of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
(i) Borrowing Base
Certificate, etc. Not later than 12:00 Noon on Tuesday of each
week (or if such day is not a Business Day, then on the next
succeeding Business Day) and within three (3) Business Days
following the date of any Asset Disposition or Casualty Loss in
excess of $1,000,000, the Borrowers shall deliver (i) a
borrowing base certificate (the “ Borrowing Base
Certificate ”) in substantially the form of Exhibit
G hereto, duly completed and certified by a Senior Financial
Officer of the Company detailing the Eligible Accounts Receivable,
Eligible Inventory and Eligible Equipment of the Credit Parties as
of the last day of the immediately preceding Production Month;
provided that for
5
purposes of the
valuation of copper Inventory, copper will be valued weekly based
upon pounds on hand as of the last Business Day of the immediately
preceding Production Month at the COMEX Copper High Grade price
published by the New York Mercantile Exchange and Commodities
Exchange, Inc. as of 3:00PM on Friday of the immediately preceding
week and the Eligible Inventory amount set forth in each weekly
Borrowing Base Certificate shall be adjusted accordingly and
(ii) a report, in form acceptable to the Administrative Agent,
of Excess Liquidity as of the last day of the immediately preceding
week. In addition, on the 25 th
day of each
Production Month (or if such day is not a Business Day, then on the
next succeeding Business Day), the Company shall furnish a written
report to the Lenders setting forth (i) the accounts
receivable aged trial balance at the immediately
preceding
