Exhibit 10.32
EXECUTION COPY
FIRST AMENDMENT
FIRST AMENDMENT, dated as of August 7, 2003 (this "Amendment"), with
respect to the Credit Agreement, dated as of November 22, 2002 (the "Credit
Agreement"), among NATIONAL WATERWORKS HOLDINGS, INC., a Delaware corporation
("Holdings"), NATIONAL WATERWORKS, INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to the Credit Agreement (the "Lenders"), X.X. XXXXXX
SECURITIES INC. and XXXXXXX SACHS CREDIT PARTNERS L.P., as co-syndication
agents, GENERAL ELECTRIC CAPITAL CORPORATION and ANTARES CAPITAL CORPORATION, as
co-documentation agents, and UBS AG, STAMFORD BRANCH, as administrative agent
(the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make, and have made, certain loans and other extensions of credit to the
Borrower.
WHEREAS, pursuant to the second paragraph of Section 10.1 of the Credit
Agreement, the Credit Agreement may be amended with the written consent of the
Administrative Agent, the Borrower and the Lenders providing replacement term
loans to provide for the refinancing of all outstanding Tranche B Term Loans.
WHEREAS, on the Replacement Tranche B Effective Date (as defined
below), the Replacement Tranche B Term Loans (as defined below) will be borrowed
and the proceeds thereof will be used to prepay the Tranche B Term Loans.
WHEREAS, the Borrower has requested that certain other provisions of
the Credit Agreement be modified in the manner provided for in this Amendment.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, and in consideration of the premises, the
parties hereto hereby agree as follows:
SECTION I AMENDMENTS
1.1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement shall have their defined meanings when used herein.
1.2. Amendments to Section 1.1.
(a) Section 1.1 of the Credit Agreement is hereby amended by adding the
following new definitions, to appear in alphabetical order:
"Holdings Note Indenture": any indenture, certificate of designation or
similar agreement or instrument entered into by or binding upon
Holdings in connection with the issuance of the Original Holdings Notes
or any Refinancing Holdings Notes, together with all instruments and
other agreements entered into by Holdings in connection therewith.
"Holdings Notes": the Original Holdings Notes or any Refinancing
Holdings Notes.
"Original Holdings Notes": any notes of Holdings issued on or after the
Replacement Tranche B Effective Date in one or more series from time to
time pursuant to one or more Holdings Note Indentures, provided that
(a) each series of such notes shall (i)(x) be issued at a discount and
not require the payment of interest in cash thereon prior to the fifth
anniversary of the Replacement Tranche B Effective Date or (y) permit
the payment of any interest thereon prior to such fifth anniversary in
kind (it being understood that a "catch-up" payment in an amount
sufficient to avoid such notes having significant original issue
discount as described in Section 163(i)(2) of the Code, may be required
to be made in or after the year following such fifth anniversary), (ii)
be issued in a maximum aggregate amount such that the aggregate
principal amount thereof that would appear on a balance sheet of
Holdings as of the date of such issuance, prepared in accordance with
GAAP, shall not exceed the amount which would cause the Consolidated
Leverage Ratio as calculated as of the end of the last fiscal quarter
prior to the issuance of such notes for which financial statements are
available on a pro forma basis to include such aggregate principal
amount in Consolidated Total Debt (notwithstanding that such notes
shall be issued by Holdings and not the Borrower) and to exclude
therefrom any Indebtedness repaid with the Net Cash Proceeds of such
notes to exceed 5.50 to 1, (iii) not have a scheduled maturity or
provide for any scheduled payments of principal thereon prior to the
date six months after the then Final Maturity Date, (iv) not be
guaranteed by or have any recourse to the assets of the Borrower or any
of its Subsidiaries and (v) have representations, covenants and default
provisions that are either (x) no more restrictive with respect to the
Borrower and its Subsidiaries than the Senior Subordinated Notes or (y)
otherwise are reasonably acceptable to the Administrative Agent and (b)
on the date of the issuance of such notes, no Default or Event of
Default shall have occurred and be continuing. Any Original Holdings
Notes shall include any accretion in the principal amount thereof and
any pay-in-kind notes issued for the payment of interest thereon
pursuant to the relevant Holdings Note Indenture. The Original Holdings
Notes may take the form of Disqualified Capital Stock and, in such
event, references above to payments of interest shall be deemed to
refer to required or regularly scheduled dividend payments, references
to notes shall be deemed to refer to capital stock, references to
scheduled maturity and scheduled payments of principal shall be deemed
to refer to scheduled mandatory redemption and references to principal
amount shall be deemed to refer to liquidation value.
"Refinancing Holdings Notes": any notes of Holdings issued after the
date of issuance of the Original Holdings Notes in one or more series
from time to time to refinance then outstanding Original Holdings Notes
or Refinancing Holdings Notes, provided that each series of such notes
shall (a)(i) be issued at a discount and not require the payment of
interest in cash thereon prior to the fifth anniversary of the
Replacement Tranche B Effective or (ii) permit the payment of any
interest thereon prior to such fifth anniversary in kind (it being
understood that a "catch-up" payment in an amount sufficient to avoid
such notes having significant original issue discount as described in
Section 163(i)(2) of the Code, may be required to be made in or after
the year following such fifth anniversary), (b) be issued in a maximum
aggregate principal amount such that the Net Cash Proceeds thereof do
not exceed the then aggregate principal amount (or then accreted value)
of, and accrued and unpaid interest and fees and expenses on, the
Original Holdings Notes or the Refinancing Holdings Notes refinanced
thereby, (c) not have a scheduled maturity or provide for any scheduled
payments of principal thereon prior to the date six months after the
then Final Maturity Date, (d) not be guaranteed by or have
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any recourse to the assets of the Borrower or any of its Subsidiaries
and (e) have representations, covenants and default provisions that are
either (i) no more restrictive with respect to the Borrower and its
Subsidiaries than the Senior Subordinated Notes or (ii) otherwise are
reasonably acceptable to the Administrative Agent. Any Refinancing
Holdings Notes shall include any accretion in the principal amount
thereof and any pay-in-kind notes issued for the payment of interest
thereon pursuant to the relevant Holdings Note Indenture. The
Refinancing Holdings Notes may take the form of Disqualified Capital
Stock and, in such event, references above to payments of interest
shall be deemed to refer to required or regularly scheduled dividend
payments, references to notes shall be deemed to refer to capital
stock, references to scheduled maturity and scheduled payments of
principal shall be deemed to refer to scheduled mandatory redemption
and references to principal amount shall be deemed to refer to
liquidation value.
"Replacement Tranche B Effective Date": the Replacement Tranche B
Effective Date, as defined in the First Amendment dated as of August 7,
2003 to this Agreement.
"Replacement Tranche B Term Commitment": as to any Replacement Tranche
B Term Lender, the obligation of such Replacement Tranche B Term Lender
to make a Replacement Tranche B Term Loan to the Borrower in a
principal amount not to exceed the amount set forth under the heading
"Replacement Tranche B Term Commitment" opposite such Replacement
Tranche B Term Lender's name on Schedule 1.1AA. The original aggregate
amount of the Replacement Tranche B Term Commitments is $245,000,000.
"Replacement Tranche B Term Lender": each Lender that has a Replacement
Tranche B Term Commitment or that holds a Replacement Tranche B Term
Loan.
"Replacement Tranche B Term Loan": as defined in Section 2.1.
"Replacement Tranche B Term Loan Maturity Date": November 22, 2009.
"Replacement Tranche B Term Percentage": as to any Replacement Tranche
B Term Lender at any time, the percentage which such Replacement
Tranche B Term Lender's Replacement Tranche B Term Commitment then
constitutes of the aggregate Replacement Tranche B Term Commitments
(or, at any time after the Replacement Tranche B Effective Date the
percentage which the aggregate principal amount of such Replacement
Tranche B Term Lender's Replacement Tranche B Term Loans then
outstanding constitutes of the aggregate principal amount of the
Replacement Tranche B Term Loans then outstanding).
(b) The definition of "Applicable Margin" in Section 1.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"Applicable Margin": (a) for Replacement Tranche B Term Loans and
Revolving Loans, for each Type of Loan, the rate per annum set forth
under the relevant column heading below and (b) for Incremental
Extensions of Credit, such per annum rates as shall be agreed to by the
Borrower and the applicable Incremental Lenders as shown in the
applicable Incremental Facility Activation Notice.
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ABR Loans Eurodollar Loans
Revolving 2.00% 3.00%
Loans and
Swingline
Loans
Replacement
Tranche B
Term Loans 1.75% 2.75%
; provided, that on and after the first Adjustment Date occurring after
the completion of two full fiscal quarters of the Borrower after the
Closing Date, the Applicable Margin with respect to Revolving Loans and
Swingline Loans will be determined pursuant to the Pricing Grid.
(c) The definition of "Capital Stock" in Section 1.1 of the Credit
Agreement is hereby amended by adding ", excluding any Holdings Notes in the
form of convertible notes" before the period at the end of the last sentence
thereto.
(d) The definition of "Commitment" in Section 1.1 of the Credit
Agreement is hereby amended in its entirety to read as follows: "Commitment": as
to any Lender, the sum of the Replacement Tranche B Term Commitment, Incremental
Commitment and the Revolving Commitment of such Lender.
(e) The definition of "Eurodollar Rate" in Section 1.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such
day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
--------------------
1.00-Eurocurrency Reserve Requirements
(f) The definition of "Excess Cash Flow" in Section 1.1 of the Credit
Agreement is hereby amended by (a) deleting the word "and" at the end of
subsection (b)(vii) thereof and inserting a comma in lieu thereof, (b) inserting
the word "and" at the end of subsection (b)(viii) thereof and (c) adding the
following new subsection (b)(ix) immediately after subsection (b)(viii):
"(ix) the aggregate amount of payments permitted to be made in respect
of such fiscal year by the Borrower to Holdings pursuant to Section
7.6(g)."
(g) The definition of "Facility" in Section 1.1 of the Credit Agreement
is hereby amended in its entirety to read as follows:
"Facility": each of (a) the Replacement Tranche B Term Commitments of
all Lenders and the Replacement Tranche B Term Loans made thereunder
(the "Replacement Tranche B Term Facility"), (b) the Incremental
Commitments of all Lenders having the same Incremental Facility Closing
Date and the Incremental Extensions of Credit made thereunder (each, an
"Incremental Facility"), and (c) the Revolving Commitments of all
Lenders and the Revolving Extensions of Credit made thereunder (the
"Revolving Facility").
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(h) The definition of "Final Maturity Date" in Section 1.1 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"Final Maturity Date": at any time, the last to occur of (a) the
Replacement Tranche B Term Loan Maturity Date or (b) any Incremental
Maturity Date.
(i) The definition of "Incremental Maturity Date" in Section 1.1 of the
Credit Agreement is hereby amended in its entirety to read as follows:
"Incremental Maturity Date": with respect to the Incremental Extensions
of Credit to be made pursuant to any Incremental Facility Activation
Notice, the maturity date specified in such Incremental Facility
Activation Notice, which date shall be on or after the Replacement
Tranche B Term Loan Maturity Date.
(j) The definition of "Specified Change of Control" is hereby amended
in its entirety to read as follows:
"Specified Change of Control": a "Change of Control" (or any other
defined term having a similar purpose) as defined in (i) the Senior
Subordinated Note Indenture or (ii) the Holdings Note Indenture.
(k) The definition of "Term Loan Lenders" in Section 1.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"Term Loan Lenders": the collective reference to the Replacement
Tranche B Term Lenders and the Incremental Lenders that hold term
loans.
(l) The definition of "Term Loans" in Section 1.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"Term Loans": the collective reference to the Replacement Tranche B
Term Loans and the Incremental Extensions of Credit that are term
loans.
1.3. Amendments to Section 2.1.
(a) Section 2.1 of the Credit Agreement is hereby amended by inserting
the following new paragraph (a)A immediately following paragraph (a):
"(a)A. Subject to the terms and conditions hereof, each Replacement
Tranche B Term Lender severally agrees to make a term loan (a
"Replacement Tranche B Term Loan") to the Borrower on the Replacement
Tranche B Effective Date in an amount not to exceed the amount of the
Replacement Tranche B Term Loan Commitment of such Replacement Tranche
B Term Lender."
(b) Clause (B) of the proviso in Section 2.1(b) is hereby amended by
inserting the phrase ", the repayment of Indebtedness with the proceeds
therefrom," immediately after the text "Incremental Extensions of Credit" the
first place such text appears in such clause (B).
(c) Clause (C) of the proviso in Section 2.1(b) is hereby amended in
its entirety to read as follows:
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"(C) in the case of Incremental Extensions of Credit, the Applicable
Margin (which, for such purposes only, shall be deemed to include all
upfront or similar fees or original issue discount payable to all
Lenders providing such Incremental Extensions of Credit, amortized over
the maturity of such Incremental Extensions of Credit, but exclusive of
any arrangement, structuring or other fees payable in connection
therewith that are not shared with all Lenders providing such
Incremental Extensions of Credit) determined as of the applicable
Incremental Facility Closing Date shall not be greater than 0.25% above
the Applicable Margin then in effect for Replacement Tranche B Term
Loans (which, for such purposes only, shall be deemed to include all
upfront or similar fees or original issue discount payable to all
Replacement Tranche B Lenders as of the applicable Incremental Facility
Closing Date, amortized over the maturity of such Replacement Tranche B
Term Loans, but exclusive of any arrangement, structuring or other fees
payable in connection therewith that are not shared with all Tranche B
Term Lenders) (or, in the case of any Incremental Trade Credit
Facility, Revolving Extensions of Credit (which, for such purposes
only, shall be deemed to include any upfront fees or original issue
discount paid to all Revolving Lenders as of the applicable Incremental
Facility Closing Date, amortized over the maturity of such Revolving
Extensions of Credit, but exclusive of any arrangement, structuring or
other fees payable in connection therewith that are not shared with all
Revolving Lenders))"
(d) Clause (E) of the proviso in Section 2.1(b) is hereby amended by
(a) deleting the reference to "$50,000,000" therein and (b) adding
"$100,000,000" in lieu thereof.
1.4. Amendment to Section 2.2. Section 2.2 of the Credit Agreement is
hereby amended in its entirety to read as follows:
"2.2 Procedure for Term Loan Borrowing. The Borrower shall
give the Administrative Agent irrevocable notice (which notice must be
received by the Administrative Agent prior to 11:00 A.M., New York City
time, (a) three Business Days prior to the anticipated Closing Date
(or, in the case of any Term Loans to be made after the Closing Date
pursuant to Section 2.1(c), the requested Borrowing Date) in the case
of Eurodollar Loans, or (b) one Business Day prior to the anticipated
Closing Date (or, if applicable, the requested Borrowing Date), in the
case of ABR Loans) requesting that the relevant Term Loan Lenders make
Term Loans on such date and specifying the amount to be borrowed. Upon
receipt of such notice the Administrative Agent shall promptly notify
each relevant Term Loan Lender thereof. Not later than 12:00 Noon, New
York City time, on the requested Borrowing Date each relevant Term Loan
Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the Term Loan
or Term Loans to be made by such Lender. The Administrative Agent shall
credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available
to the Administrative Agent by the relevant Term Loan Lenders in
immediately available funds. The requested Borrowing Date for the
Replacement Tranche B Term Loans shall be the Replacement Tranche B
Effective Date. The Borrower irrevocably authorizes the Administrative
Agent to deduct from such account of the Borrower the proceeds of the
Replacement Tranche B Term Loans and apply such proceeds to the
prepayment of the Tranche B Term Loans."
1.5. Amendment to Section 2.3. Section 2.3 of the Credit Agreement is
hereby amended by inserting the following new paragraph (a)A immediately
following paragraph (a):
"(a)A. The Replacement Tranche B Term Loan of each Replacement
Tranche B Term Lender shall mature in 25 consecutive quarterly
installments and on the Replacement Tranche B
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Term Loan Maturity Date, each of which shall be in an amount equal to such
Replacement Tranche B Term Lender's Replacement Tranche B Term Percentage
multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
September 30, 2003 $2,500,000
December 31, 2003 $2,500,000
March 31, 2004 $3,750,000
June 30, 2004 $3,750,000
September 30, 2004 $3,750,000
December 31, 2004 $3,750,000
March 31, 2005 $3,750,000
June 30, 2005 $3,750,000
September 30, 2005 $3,750,000
December 31, 2005 $3,750,000
March 31, 2006 $5,000,000
June 30, 2006 $5,000,000
September 30, 2006 $5,000,000
December 31, 2006 $5,000,000
March 31, 2007 $6,250,000
June 30, 2007 $6,250,000
September 30, 2007 $6,250,000
December 31, 2007 $6,250,000
March 31, 2008 $6,250,000
June 30, 2008 $6,250,000
September 30, 2008 $6,250,000
December 31, 2008 $6,250,000
March 31, 2009 $35,000,000
June 30, 2009 $35,000,000
September 30, 2009 $35,000,000
November 22, 2009 $35,000,000"
1.6. Amendment to Section 2.11. Section 2.11(b) of the Credit Agreement
is hereby amended in its entirety to read as follows:
"(b) If the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from its issuance of Capital Stock in a public offering or in
a private placement that is underwritten, placed or initially purchased
by one or more investment banks (which, for the avoidance of doubt,
shall not include any member of the Sponsor Group), an amount equal to
the Prepayment Percentage (as of the date of such issuance) of such Net
Cash Proceeds shall be applied on the date of such issuance to the
prepayment of the Loans as set forth in Section 2.11(e)."
1.7. Amendment to Section 2.17. The first sentence of Section 2.17(b)
of the Credit Agreement is hereby amended in its entirety to read as follows:
"Each scheduled payment by the Borrower on account of principal of and
interest on the Term Loans of any Facility shall be made pro rata among
the applicable Term Loan
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Lenders according to the respective outstanding principal amounts of
the Term Loans of such Facility held by such Term Loan Lenders, and
each prepayment by the Borrower pursuant to Section 2.10 or 2.11 on
account of principal of and interest on the Term Loans shall be made
pro rata according to the respective outstanding principal amounts of
Term Loans then held by the Term Lenders."
1.8. Amendment to Section 4.16. Section 4.16 of the Credit Agreement is
hereby amended by adding ", except that no such proceeds shall be used to make
dividend payments to Holdings permitted by Section 7.6(h)" before the period at
the end of the last sentence thereto.
1.9. Addition of Section 4.16A. Section 4 of the Credit Agreement is
hereby amended by adding the following section following Section 4.16 thereof:
"4.16A Replacement Tranche B Term Loan Proceeds. The proceeds of the
Replacement Tranche B Term Loans shall be used on the Replacement
Tranche B Effective Date to prepay the Tranche B Term Loans."
1.10. Amendment to Section 7.2. Section 7.2 of the Credit Agreement is
hereby amended by (a) deleting the word "and" at the end of paragraph (j)
thereof, (b) inserting the word "and" and the end of paragraph (k) thereof and
(c) adding the following new paragraph (l) immediately after paragraph (k):
"(l) Indebtedness of Holdings in respect of the Holdings Notes."
1.11. Amendments to Section 7.6.
(a) The first parenthetical of the first paragraph of Section 7.6 is
hereby amended by inserting the phrase "and, in the case of dividends on
Disqualified Capital Stock, dividends payable solely in shares of such
Disqualified Capital Stock" immediately after the text "equivalent equity
interests".
(b) Section 7.6 of the Credit Agreement is hereby amended by (a)
deleting the word "and" at the end of paragraph (e) thereof and (b) adding the
following new paragraphs (g), (h) and (i) immediately after paragraph (f):
"(g) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, (i) the Borrower may make
payments to Holdings at any time and from time to time, in respect of
any fiscal year of the Borrower, in an aggregate amount equal to the
reduction in the consolidated or combined income tax liability of
Holdings and its Subsidiaries for such fiscal year from the
consolidated or combined income tax liability that would have existed
had the Holdings Notes not been issued and (ii) Holdings may, and
shall, use the amounts received by it from such payments to make any
"catchup" payment in an amount sufficient to avoid such notes having
significant original issue discount as described in Section 163(i)(2)
of the Code, to make interest payments that would reduce the amount of
any such "catch-up" payment, to make payments in respect of original
issue discount, whether or not accreted, or to retire Holdings Notes
previously issued for the payment of interest on account of Holdings
Notes;
(h) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower may pay dividends
or other payments to Holdings after the fifth anniversary of the
Replacement Tranche B Effective Date to permit Holdings to, and
Holdings may, make interest payments, dividends and other distributions
scheduled or permitted by the terms thereof to be paid currently in
cash on
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the Holdings Notes and not otherwise financed by payments contemplated
by paragraph (g) of this Section (including any "catch-up" payment
payable in or after the sixth year following the Replacement Tranche B
Effective Date, in an amount sufficient to avoid such Holdings Notes
having significant original issue discount as described in Section
163(i)(2) of the Code), provided that, on the date of payment of any
such dividend or other payment from Borrower to Holdings described in
this Section 7.6(h), the Consolidated Senior Leverage Ratio as of the
last day of the most recently completed fiscal quarter of the Borrower,
calculated on a pro forma basis to include any net additional
Indebtedness incurred or paid since such last day (including any such
Indebtedness incurred to finance such payment), does not exceed 1.75 to
1.00; and
(i) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, Holdings may pay dividends or
make other distributions on, or repurchase or redeem, shares of its
Qualified or Disqualified Capital Stock in an aggregate amount equal to
the Net Cash Proceeds of (A) the issuance of any Original Holdings
Notes or (B) the issuance of any Refinancing Holdings Notes, to the
extent such Refinancing Holdings Notes refinance Holdings Notes in the
form of Disqualified Capital Stock or (C) the issuance of Qualified
Capital Stock."
(c) Section 7.6(c) of the Credit Agreement is hereby amended by (a)
deleting the reference to "$1,000,000" therein and (b) adding "$1,500,000" in
lieu thereof.
1.12. Amendment to Section 7.9. Section 7.9 of the Credit Agreement is
hereby amended in its entirety to read as follows:
"7.9 Optional Payments and Modifications of Certain Debt Instruments.
(a) Except as contemplated by Section 7.6, make or offer to make any
optional or voluntary payment, prepayment, repurchase or redemption of
or otherwise optionally or voluntarily defease or segregate funds with
respect to the Senior Subordinated Notes, the Holdings Notes (except
with the Net Cash Proceeds of the issuance of any Refinancing Holdings
Notes or any Capital Stock of Holdings and except with Capital Stock)
or any subordinated debt incurred pursuant to Section 7.2(g) (provided
that Senior Subordinated Notes may be repurchased so long as (i) before
and after giving effect to such repurchase, no Default or Event of
Default shall have occurred or be continuing, (ii) after giving effect
to such repurchase, the Consolidated Leverage Ratio for the most
recently completed four fiscal quarters of the Borrower is not more
than 4:00 to 1:00, and (iii) the aggregate principal amount of such
repurchases shall not exceed the sum of (A) $25,000,000, plus (B) the
aggregate amount of Excess Cash Flow that is not required to prepay the
Term Loans); (b) amend, modify, waive or otherwise change, or consent
or agree to any amendment, modification, waiver or other change to, any
of the terms of the Senior Subordinated Notes, the Holdings Notes or
any of the terms of any subordinated debt incurred pursuant to Section
7.2(g) (other than any such amendment, modification, waiver or other
change that (i) would extend the maturity or reduce the amount of any
payment of principal thereof or reduce the rate or extend any date for
payment of interest thereon or (ii) make the provisions thereof, in the
opinion of the Agents, less restrictive to Holdings, the Borrower or
its Subsidiaries and, in the case of each of clause (i) and (ii), does
not involve the payment of a consent fee in excess of $5,000,000); (c)
amend, modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of
any other Disqualified Capital Stock (other than any such amendment,
modification, waiver or other change that (i) would extend the
scheduled redemption date or reduce the amount of any scheduled
redemption payment
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or reduce the rate or extend any date for payment of dividends thereon
or (ii) make the provisions thereof, in the opinion of the Agents, less
restrictive to Holdings, the Borrower or its Subsidiaries and, in the
case of each of clause (i) and (ii), does not involve the payment of a
consent fee in excess of $5,000,000), (d) amend, modify, waive or
otherwise change, or consent or agree to any amendment, modification,
waiver or other change to, any of the terms of any Permitted Investor
Stock (other than any such amendment, modification, waiver or other
change that would not reasonably be expected to be materially adverse
to the rights and interests of the Lenders hereunder and does not
involve the payment of a consent fee in excess of $5,000,000); (e)
designate any Indebtedness (other than obligations of the Loan Parties
pursuant to the Loan Documents) as "Designated Senior Debt" (or any
other defined term having a similar purpose) for the purposes of the
Senior Subordinated Note Indenture"; or (f) except as contemplated by
Section 7.6, pay in cash any dividends or interest payment on the
Holdings Notes that may be paid in kind or use cash to retire Holdings
Notes previously issued for the payment of interest on account of
Holdings Notes ."
1.13. Amendment to Section 7.10. Section 7.10 is hereby amended by
inserting the phrase "except in the case of payments permitted by Section 7.6,"
at the beginning of clause (c) thereto.
1.14. Amendment to Section 7.14. Section 7.14 of the Credit Agreement
is hereby amended in its entirety to read as follows:
"7.14 Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of any
Group Member to create, incur, assume or suffer to exist any Lien upon
any of its property or revenues, whether now owned or hereafter
acquired, other than (a) this Agreement and the other Loan Documents,
(b) any agreements governing (i) any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any
prohibition or limitation shall only be effective against the assets
financed thereby) and (ii) any Indebtedness permitted under Sections
7.2(f), (g), (i) or (j), (c) any document governing any Lien permitted
under Section 7.3 so long as such restriction is limited to the assets
subject to such Lien (except as it relates to assets financed by the
same financing source), (d) the Holdings Notes (so long as the
prohibition or limitation therein does not restrict Liens created under
the Loan Documents), (e) customary provisions in leases, licenses, and
similar arrangements in the ordinary course of business, (f) customary
provisions in agreements for the Disposition of assets pending the
consummation of such Disposition, and (g) as imposed by any Requirement
of Law."
1.15. New Schedule.
(a) The following language is added immediately following "Schedule
1.1A" in the schedules listed on page (iv) of the Credit Agreement:
"Schedule 1.1AA Replacement Tranche B Term Commitments"
(b) Schedule 1.1AA, attached hereto as Exhibit A, is hereby added to
the Credit Agreement immediately following Schedule 1.1A.
1.16. Replacement of Terms. The following sections and exhibits of the
Credit Agreement are hereby amended to replace "Tranche B Term Loan", "Tranche B
Term Loans", "Tranche B Lenders", "Tranche B Term Loan Maturity Date" and
"Tranche B Term Percentage" with "Replacement Tranche B
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Term Loan", "Replacement Tranche B Term Loans", "Replacement Tranche B Term
Lenders" "Replacement Tranche B Term Loan Maturity Date" and "Replacement
Tranche B Term Percentage", respectively:
(a) Section 2.1 (b);
(b) Section 2.3(b);
(c) Section 2.17;
(d) Exhibit K; and
(e) Exhibit L.
SECTION II MISCELLANEOUS
2.1. Conditions to Effectiveness of Amendment. Subject to the
provisions of Section 2.2 hereof, this Amendment shall become effective as of
the date first set forth above upon satisfaction of the following conditions
precedent (the effective date of this Amendment, the "Replacement Tranche B
Effective Date"):
(a) Loan Documents:
(i) Amendment. The Administrative Agent shall have
received counterparts of this Amendment duly executed
and delivered, by the Borrower, the Administrative
Agent and the Replacement Tranche B Term Lenders; and
(ii) Reaffirmation of Guarantee and Collateral Agreement.
The Administrative Agent shall have received a
reaffirmation of the Guarantee and Collateral
Agreement (the "Reaffirmation"), executed and
delivered by an authorized officer of Holdings, the
Borrower and each Subsidiary Guarantor, the form of
which is attached hereto as Exhibit B.
(b) Consents, Licenses and Approvals. The Administrative Agent shall
have received a certificate of a Responsible Officer of the Borrower stating
that all consents, authorizations, notices and filings required in connection
with this Amendment, the Replacement Tranche B Term Loan Facility, the security,
collateral and guarantees for the Replacement Tranche B Loan Facility (except
for consents, authorizations, notices and filings which the failure to obtain or
make would not reasonably be expected to have a Material Adverse Effect) are in
full force and effect or have the status described therein, and the
Administrative Agent shall have received evidence thereof reasonably
satisfactory to it.
(c) Legal Opinions. The Administrative Agent shall have received an
executed legal opinion of O'Melveny & Xxxxx LLP, counsel to each of Holdings and
the Borrower, reasonably satisfactory in form and substance to the
Administrative Agent.
(d) Closing Certificate. The Administrative Agent shall have received a
certificate from each Loan Party, dated the Replacement Tranche B Effective
Date, substantially in the form of Exhibit C to the Credit Agreement, with
appropriate insertions and attachments and modifications to reflect this
Amendment.
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(e) Corporate Proceedings of the Loan Parties. The Administrative Agent
shall have received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the board of directors of each Loan
Party authorizing, as applicable, (i) the execution, delivery and performance of
this Amendment, any Replacement Tranche B Term Notes, the Reaffirmation and the
other Loan Documents to which such Loan Party will become a party as of the
Replacement Tranche B Effective Date and (ii) the Extensions of Credit to such
Loan Party (if any) contemplated hereunder, certified by the Secretary or an
Assistant Secretary of such Loan Party as of the Replacement Tranche B Effective
Date, which certificate shall be in form and substance reasonably satisfactory
to the Administrative Agent and shall state that the resolutions thereby
certified have not been amended, modified (except as any later such resolution
may modify any earlier such resolution), revoked or rescinded and are in full
force and effect.
(f) Incumbency Certificates of the Loan Parties. The Administrative
Agent shall have received a certificate of each Loan Party, dated the
Replacement Tranche B Effective Date, as to the incumbency and signature of the
officers of such Loan Party executing any Loan Document, reasonably satisfactory
in form and substance to the Administrative Agent, executed by a Responsible
Officer and the Secretary or any Assistant Secretary of such Loan Party.
(g) Payment of Fees and Expenses. The Administrative Agent shall have
received payment for all fees required to be paid, and all expenses for which
invoices have been presented (including the reasonable fees and expenses of
legal counsel), in connection with this Amendment.
2.2. Further Conditions Regarding Certain Provision to the Amendment.
The definitions of "Holdings Note Indenture", "Holdings Notes", "Original
Holdings Notes", "Refinancing Holdings Notes" and "Tax Sharing Agreement" in
Section 1.2(a) of this Amendment, and Sections 1.2(e), 1.2(i), 1.6, 1.7, 1.9,
1.10, 1.11 and 1.12 of this Amendment shall become effective as of the date
first set forth above upon satisfaction of the following conditions precedent:
(a) The Replacement Tranche B Effective Date shall have occurred;
(b) The Replacement Tranche B Term Loans shall have been made; and
(c) The Administrative Agent shall have received counterparts of this
Amendment duly executed and delivered, or consented to in a manner satisfactory
to the Administrative Agent, by the Required Lenders, determined after giving
effect to the making of the Replacement Tranche B Term Loans and the use of the
proceeds thereof to prepay the Tranche B Term Loans.
2.3. Representations and Warranties.
(a) The Borrower represents and warrants to each Lender that as of the
effective date of this Amendment: (i) this Amendment constitutes the legal,
valid and binding obligation of the Borrower, enforceable against it in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or
similar laws affecting creditors' rights generally, by general equitable
principles (whether enforcement is sought by proceedings in equity or at law)
and an implied covenant of good faith and fair dealing; (ii) the representations
and warranties made by the Loan Parties in the Loan Documents are true and
correct in all material respects on and as of the date hereof (except to the
extent that such representations and warranties are expressly stated to relate
to an earlier date, in which case such representations and warranties shall have
been true and correct in all material respects on and as of such earlier date);
and (iii) no Default or Event of Default shall have occurred and be continuing
as of the date hereof.
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(b) (i) The audited consolidated balance sheets of the Borrower and its
Subsidiaries as at December 31, 2002, and the related consolidated statements of
income and of cash flows for the fiscal year ended December 31, 2002, reported
on by and accompanied by an unqualified report from KPMG LLP, copies of each of
which have heretofore been furnished to the Administrative Agent and each
Replacement Tranche B Lender, present fairly, in all material respects, the
consolidated financial condition of the Borrower and its Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the fiscal year then ended. The unaudited consolidated balance sheet
of the Borrower and its Subsidiaries as at March 31, 2003, and the related
unaudited consolidated statements of income and cash flows for the three-month
period ended on such date, present fairly, in all material respects, the
consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to normal year-end audit adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein and, in the case of the unaudited financial
statements referred to in the preceding sentence, except for the absence in
footnotes) and the applicable rules and regulation of the Securities Act. As of
December 31, 2002, neither Holdings nor any of its Subsidiaries has any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most recent
financial statements as of and for the fiscal year ended December 31, 2002.
(ii) Since December 31, 2002 (i) there have not been any
events or states of fact which individually or in the aggregate would have a
Material Adverse Effect, and (ii) no change has occurred or is threatened which
individually or in the aggregate has had or is continuing to have a material
adverse effect on the prospects of the Borrower and its Subsidiaries taken as a
whole.
2.4. Mortgages. With respect to each of the Mortgages, to the extent
reasonably requested by the Administrative Agent, within sixty (60) days
following the Replacement Tranche B Effective Date, the Loan Party signatory
thereto shall execute and deliver a mortgage amendment, which has the effect of
including all obligations of the Loan Parties in respect of the Replacement
Tranche B Term Loans as secured obligations under such Mortgage, and cause an
appropriate endorsement to the title policy (if any) issued in respect thereto
by the relevant title insurance company to be furnished to the Administrative
Agent, in each case in a form reasonably satisfactory to the Administrative
Agent.
2.5. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment on any number of separate counterparts (including by
facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Amendment signed by all the parties shall be lodged with the Borrower and the
Administrative Agent. The execution and delivery of the Amendment by any Lender
shall be binding upon each of its successors and assigns (including Transferees
of its commitments and Loans in whole or in part prior to effectiveness hereof)
and binding in respect of all of its commitments and Loans, including any
acquired subsequent to its execution and delivery hereof and prior to the
effectiveness hereof.
2.6. Continuing Effect; No Other Amendments. Except as expressly
amended, modified and supplemented hereby, the provisions of the Credit
Agreement are and shall remain in full force and effect. This Amendment shall
not constitute a Amendment of any other provision of the Credit Agreement not
expressly referred to herein and shall not be construed as a Amendment or
consent to any further or future action on the part of the Borrower that would
require a Amendment or consent of the Required Lenders or Lenders, as the case
may be, or the Administrative Agent. This Amendment shall constitute a Loan
Document.
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2.7. Payment of Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable expenses
incurred to date in connection with this Amendment and the other Loan Documents,
including, without limitation, the reasonable fees and disbursements of legal
counsel to the Administrative Agent.
2.8. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[REST OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective proper and duly authorized
officers as of the day and year first above written.
NATIONAL WATERWORKS, INC.
By: /s/ Xxxxxxxx Xxxxxxxxx
___________________________________
Name: Xxxxxxxx Xxxxxxxxx
Title: Chief Financial Officer
15
NATIONAL WATERWORKS HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
_____________________________
Name: Xxxxx X. Xxxxxxx, Xx.
Title: President and Chief
Executive Officer
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UBS AG, STAMFORD BRANCH, as Administrative Agent
and as a Lender
By: /s/ Xxxxxx Xxxxxx
___________________________________________
Name: Xxxxxx Xxxxxx
Title: Executive Director
By: /s/ Xxxxx Feliciand
___________________________________________
Name: Xxxxx Feliciand
Title: Associate Director LPRM
17
JPMORGAN SECURITIES INC., as Co-Syndication
Agent
By: /s/ Xxxxxx X. Xxxxxxx
___________________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
18
XXXXXXX SACHS CREDIT PARTNERS L.P., as Co-
Syndication Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxxxx
_____________________________________
Name: Xxxxxx Xxxxxxxxx
Title: Authorized Signatory
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UBS AG, Stamford Branch
__________________________________________
as a Replacement Tranche B Term Lender
By: /s/ Xxxxxx Xxxxxx
___________________________________
Name: Xxxxxx Xxxxxx
Title: Executive Director
By: /s/ Xxxxx Feliciand
___________________________________
Name: Xxxxx Feliciand
Title: Associate Director LPRM
20
Antares Capital Corporation
__________________________________________
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
______________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Managing Director
Credit Lyonnais New York Branch
__________________________________________
as a Lender
By: /s/ Xxxx Xxxxxxxx
______________________________________
Name: Xxxx Xxxxxxxx
Title: Vice President
The Governor and Company of
The Bank of Ireland
__________________________________________
as a Lender
By: /s/ X. Xxxxxx
______________________________________
Name: X. Xxxxxx
Title: Authorised Signatory
By: /s/ X. Xxxxxx
______________________________________
Name: X. Xxxxxx
Title: Authorised Signatory
Transamerica Business Capital CORP.
__________________________________________
as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
______________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Senior Vice President
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EXHIBIT A
Replacement Tranche B Term Commitments
Name Replacement Tranche B
Term Commitments
UBS AG, Stamford Branch $245,000,000.00
TOTAL $245,000,000.00
22
EXHIBIT B
REAFFIRMATION AGREEMENT August __, 2003
Reference is made to the Credit Agreement, dated as of November 22,
2002 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among NATIONAL WATERWORKS HOLDINGS, INC., a Delaware
corporation ("Holdings"), NATIONAL WATERWORKS, INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions or entities from
time to time parties to the Credit Agreement (the "Lenders"), X.X. XXXXXX
SECURITIES INC. and XXXXXXX SACHS CREDIT PARTNERS L.P., as co-syndication
agents, GENERAL ELECTRIC CAPITAL CORPORATION and ANTARES CAPITAL CORPORATION, as
co-documentation agents, and UBS AG, STAMFORD BRANCH, as administrative agent
(the "Administrative Agent").
Each of [ ], as guarantors under the Guarantee and Collateral
Agreement, dated as of [ ], 2002, made by the undersigned corporations in favor
of the Administrative Agent, for the benefit of the Lenders (the "Guarantee and
Collateral Agreement"), hereby (a) consents to the transactions contemplated by
the First Amendment, dated as of August __, 2003, to the Credit Agreement (the
"Amendment"), and (b) acknowledges and agrees that the guarantees (and grants of
collateral security therefor) contained in such Guarantee and Collateral
Agreement are, and shall remain, in full force and effect after giving effect to
the Amendment. The Borrower, as grantor and pledgor under the Guarantee and
Collateral Agreement, hereby acknowledges and agrees that its grant of
collateral security contained in the Guarantee and Collateral Agreement remains
in full force and effect after giving effect to the Amendment.
NATIONAL WATERWORKS, INC.
By: ___________________________________
Name:
Title:
NATIONAL WATERWORKS HOLDINGS, INC.
By: ___________________________________
Name:
Title:
_______________________________________
as a Subsidiary Guarantor
By: ___________________________________
Name:
Title:
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