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Exhibit 10.33
May 22, 2000
The Carbide/Graphite Group, Inc.
One Gateway Center, 19th Floor
Pittsburgh, PA 15222-1416
Attention: Mr. William M. Thalman
Treasurer
Re: The Revolving Credit and Letter of Credit Issuance
Agreement dated as of September 25, 1997, as amended,
(the "Credit Agreement"), among The Carbide/Graphite
Group, Inc., a Delaware corporation (the "Borrower"),
the financial institutions party thereto
(collectively, the "Lenders"; and individually, a
"Lender") and PNC Bank, National Association as the
agent for the Lenders (in such capacity, the "Agent")
Dear Mr. Thalman:
This letter is issued in connection with the Credit Agreement
referenced above, and your letter dated May 16, 2000, in which the Borrower
requests a waiver of certain covenant violations under the Credit Agreement, as
more fully set forth below. The capitalized terms not otherwise defined herein
shall have the meaning given to those terms in the Credit Agreement.
1. Description of Violation, Waiver, Amendments and Certain
Consequences. The Borrower has notified the Agent that the Borrower has failed
to comply as of April 30, 2000, with the financial covenants set forth at
Sections 7.12, 7.13 and 7.14 of the Credit Agreement, and continues to violate
Section 7.12 on each day since April 30, 2000.
The Borrower has requested that, subject to the terms and
conditions of this letter agreement and only for the period herein described,
the Required Lenders and the Agent waive the violations of Sections 7.12, 7.13
and 7.14 of the Credit Agreement as of April 30, 2000. The Required Lenders, the
Agent and the Borrower agree that notwithstanding any terms of the Credit
Agreement to the contrary (including Section 7.12 of the Credit Agreement), (i)
that the Borrower will not at any time prior to October 31, 2000, permit its
Consolidated Tangible Net Worth to be less than $70,000,000.00 (and on October
31, 2000, the minimum Consolidated Tangible Net Worth requirement shall be
governed by the Terms of Section 7.12 of the Credit Agreement unaffected by the
terms hereof); (ii) that on and after the date hereof the Euro-Rate Margin under
the Euro-Rate Option shall be three percent (3.00%) per annum; (iii) that on and
after the date hereof, the Borrower shall not be permitted to purchase or
repurchase any of the Borrower's equity securities from it shareholders; and
(iv) that on and after June 30, 2000, the Revolving Credit Commitments of the
Lenders shall be reduced from $140,000,000 to $135,000,000.
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The Carbide/Graphite Group, Inc.
ATTN: Mr. William M. Thalman, Treasurer
May 22, 2000
Page 2
In consideration for the execution and delivery of this Waiver
Letter, the Borrower also agrees (i) to deliver to the Agent for the benefit of
the Lenders a copy of any appraisals of the plant, property and equipment of the
Borrower completed for the benefit of The Chase Manhattan Bank and/or the
Borrower in connection with a proposed refinancing of the Credit Agreement by a
bank syndicate lead by The Chase Manhattan Bank or its affiliate within three
(3) Business Days of the receipt of such appraisals, and (ii) in the event that
the Borrower fails to close a loan transaction with a bank syndicate led with
The Chase Manhattan Bank or its affiliate by August 15, 2000, which refinances
the Credit Agreement, the Borrower will immediately undertake in good faith to
renegotiate the terms of the Credit Agreement on terms acceptable to the Agent
and the Required Lenders.
2. Representations and Warranties. To induce the Lender to execute and
deliver this letter, the Borrower hereby represents and warrants to the Agent
that except as noted in the preceded paragraph, (a) all the representations and
warranties of the Borrower contained in the Credit Agreement and any of the
other Loan Documents are true and correct in all material respects as to the
Borrower on and as of the date of its execution hereof, as though made on and as
such date, and (b) that no event has occurred and is continuing or would result
from the execution and delivery of this letter, which constitutes or would
constitute a Default or an Event of Default under the Credit Agreement, except
as described herein and waived hereby.
3. Extent of Waiver. Except as expressly described above, this waiver
shall not constitute (a) a modification or an alteration of any of the terms,
conditions or covenants of the Credit Agreement, all of which remain in full
force and effect, or (b) a waiver, release or limitation upon the Agent's or any
Lender's exercise of any of its rights and remedies thereunder, all of which are
hereby expressly reserved. This waiver shall not relieve or release the Borrower
in any way from any of its duties, obligations, covenants or agreements under
the Credit Agreement or from the consequences of any Default or Event of Default
thereunder, except as expressly described above. This waiver shall not obligate
the Agent or any Lender, or be construed to require the Agent or any Lender, to
waive any other Events of Default or Defaults under the Credit Agreement,
whether now existing or which may occur after the date of this waiver.
Except as expressly waived or amended hereby, the Credit
Agreement and each and every representation, warranty, agreement, covenant, term
and condition contained therein or in any other Loan Document is specifically
ratified and confirmed. Nothing in this letter agreement shall be deemed or
construed to be a waiver or release of, or a limitation upon, the Agent's or any
Lender's exercise of any of its rights and remedies under the Credit Agreement
or the other Loan Documents except as expressly set forth herein.
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The Carbide/Graphite Group, Inc.
ATTN: Mr. William M. Thalman, Treasurer
May 22, 2000
Page 3
4. Monthly Reports and Compliance Certificate. Beginning from the date
of this waiver and continuing each month thereafter, the Borrower shall deliver
to Agent for the benefit of the Lenders within 30 days after the end of the
proceeding month, (A) a consolidated balance sheet for the Borrower and its
Subsidiaries, (B) a consolidated statement of income for the Borrower and its
Subsidiaries, and (C) a consolidated statement of cash flow for the Borrower and
its Subsidiaries, all such statements to be prepared in reasonable detail and
certified, subject to changes resulting from year-end adjustments, by the chief
financial officer of the Borrower. In addition, the Borrower shall deliver to
the Agent by August 21, 2000, the Borrower's Compliance Certificate as set forth
in Section 6.02 (iii) of the Credit Agreement for the period ending July 31,
2000.
5. Amendment Fee. In consideration of the execution and delivery of
this waiver letter, the Borrower shall pay to each Lender which approves and
executes this waiver on or before May 24, 2000 a fee equal to ten (10) basis
points (1/10th of 1%) times each such approving Lender's Commitment. Such
payment shall be due and payable on the date of the effectiveness of this Waiver
Letter and shall be paid in immediately available funds to the Agent for the
account of each Lender which approves and executes this Waiver Letter.
6. Effectiveness of Waiver. This waiver shall not become effective
until the Agent is in receipt of a counterpart of this letter duly executed by
the Borrower and by the Required Lenders and the payment in full by the Borrower
of the Amendment Fee referred to in paragraph 5 above for the benefit of the
Lenders.
7. Counterparts. This waiver letter may be executed in several
counterparts and by each party on a separate counterpart, each of which, when so
executed and delivered, shall be an original, but all of which together shall
constitute but one and the same instrument. Delivery of an executed counterpart
by telecopier shall be as effective as delivery of a manually executed
counterpart hereof.
Very truly yours,
PNC BANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ LOUIS K. McLINDEN, JR. (SEAL)
---------------------------------
Name: Louis K. McLinden, Jr.
---------------------------------
Title: Vice President
---------------------------------
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The Carbide/Graphite Group, Inc.
ATTN: Mr. William M. Thalman, Treasurer
May 22, 2000
Page 4
With the intent to be legally bound hereby,
the foregoing is hereby acknowledged,
accepted and agreed to this 22nd day of
May, 2000.
THE CARBIDE/GRAPHITE GROUP, INC.,
a Delaware corporation
By: /s/ WILLIAM M. THALMAN
-----------------------------
Name: William M. Thalman
-----------------------------
Title: Treasurer
-----------------------------
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The Carbide/Graphite Group, Inc.
ATTN: Mr. William M. Thalman, Treasurer
May 22, 2000
Page 5
Each of the undersigned Lenders hereby consent to the terms of the
foregoing waiver letter and authorizes the Agent to execute and deliver this
waiver letter to the Borrowers.
LENDERS:
REVOLVING CREDIT PNC BANK, NATIONAL ASSOCIATION
COMMITMENT: $24,266,666.68
RATABLE SHARE: 17.33% By: /s/ LOUIS K. McLINDEN, JR. (SEAL)
------------------------------------
Name: Louis K. McLinden, Jr.
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Title: Vice President
------------------------------------
REVOLVING CREDIT NATIONAL CITY BANK OF
COMMITMENT: $16,800,000.00 PENNSYLVANIA
RATABLE SHARE: 12% By: /s/ WILLIAM S. HARRIS (SEAL)
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Name: William S. Harris
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Title: Vice President
------------------------------------
REVOLVING CREDIT BANK ONE
COMMITMENT: $12,133,333.33
RATABLE SHARE: 8.66% By: /s/ GARY C. WILSON (SEAL)
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Name: Gary C. Wilson
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Title: Senior Vice President
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REVOLVING CREDIT FIRST UNION NATIONAL BANK
COMMITMENT: $16,800,000.00
RATABLE SHARE: 12% By: /s/ PATRICK J. KAUFMAN (SEAL)
------------------------------------
Name: Patrick J. Kaufman
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Title: Vice President
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[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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The Carbide/Graphite Group, Inc.
ATTN: Mr. William M. Thalman, Treasurer
May 22, 2000
Page 6
REVOLVING CREDIT KEYBANK, NATIONAL ASSOCIATION
COMMITMENT: $12,133,333.33
RATABLE SHARE: 8.66% By: /s/ LAWRENCE A. MACK (SEAL)
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Name: Lawrence A. Mack
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Title: Senior Vice President
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REVOLVING CREDIT STANDARD CHARTERED BANK
COMMITMENT: $12,133,333.33
RATABLE SHARE: 8.66% By: /s/ JOE LANGLOIS (SEAL)
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Name: Joe Langlois
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Title: Vice President
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REVOLVING CREDIT MELLON BANK, N.A.
COMMITMENT: $12,133,333.33
RATABLE SHARE: 8.66% By: /s/ ROBERT J. REICHENBACH (SEAL)
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Name: Robert J. Reichenbach
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Title: Assistant Vice President
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REVOLVING CREDIT BANK OF AMERICA, N.A.
COMMITMENT: $16,800,000.00
RATABLE SHARE: 12% By: /s/ EILEEN C. HIGGINS (SEAL)
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Name: Eileen C. Higgins
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Title: Vice President
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REVOLVING CREDIT THE CHASE MANHATTAN BANK
COMMITMENT: $16,800,000.00
RATABLE SHARE: 12% By: /s/ JOHN MALONE (SEAL)
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Name: John Malone
------------------------------------
Title: Vice President
------------------------------------
