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EXHIBIT 10.40
FIFTH AMENDMENT
This Fifth Amendment (this "Amendment") is entered into as of
this 29th day of June, 1999 among Waterlink, Inc. (the "Company"), Bank of
America National Trust and Savings Association, as Agent (the "Agent"), and the
financial institutions from time to time party thereto (the "Banks"). Unless
otherwise specified herein, capitalized terms used in this Amendment shall have
the meanings ascribed to them by the Agreement (as defined below).
RECITALS
WHEREAS, the Company, the Agent and the Banks are party to
that certain Amended and Restated Credit Agreement, dated as of June 27, 1997
and as amended and restated as of May 19, 1998 (as amended, supplemented,
restated or otherwise modified from time to time, the "Agreement");
WHEREAS, the Company, the Agent and the Banks wish to enter
into certain amendments to the Agreement, each as more fully set forth herein;
NOW THEREFORE, in consideration of the mutual execution hereof
and other good and valuable consideration, the parties hereto agree as follows:
SECTION 1. Amendments.
(a) Section 1.01 of the Agreement is hereby amended by
inserting the following new definitions in appropriate alphabetical
order:
"Blocked Amount" shall mean (i) at any time on and
after the Compliance Date, zero and (ii) at any other time, an amount equal to
the sum of (x) $3,127,987.98 plus (y) an amount equal to the sum of (a) on the
date of expiration, the amount of each Letter of Credit to expire after June 29,
1999 minus (b) on the date of issuance, the amount of each Letter of Credit
issued after June 29, 1999 (provided, that the amount resulting pursuant to this
clause (b) shall not at any time exceed the amount resulting pursuant to the
immediately preceding clause (a)); provided, however, that the Company shall be
permitted to utilize, and the amount of the Blocked Amount shall be reduced, to
the extent that, and in the amount supported thereby, the Company delivers to
the Banks the Xxxxxxxx Guaranty and/or any other guaranty acceptable to the
Agent and the Majority Banks.
"Xxxxxxxx Guaranty" shall mean the guaranty to be
issued by Xxxxxxxx Venture Partners III, L.P. in support, inter alia, of the
Obligations attributable to the Blocked Amount.
"Compliance Date" has the meaning provided in the
Fifth Amendment to this Agreement, dated as of June 29, 1999.
(b) Section 2.01 of the Agreement is hereby amended by
deleting clause (b) contained therein and inserting in lieu thereof the
following new clause (b):
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"(b) The Revolving Credit. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to the Company (each such
loan, a "Revolving Loan") from time to time on any Business Day during the
period from the Special Funding Date to the Revolving Termination Date, in an
aggregate amount not to exceed at any time outstanding the amount set forth on
Schedule 2.01 (such amount, as the same may be reduced under Section 2.07, or as
a result of one or more assignments under Section 10.08, the Bank's "Revolving
Loan Commitment"); provided, however, that, after giving effect to any Borrowing
of Revolving Loans (exclusive of Revolving Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans), the Effective Amount of all outstanding
Revolving Loans, the Effective Amount of all Swing Line loans and the Effective
Amount of all L/C Obligations, shall not at any time exceed an amount equal to
the combined Revolving Loan Commitments less the Blocked Amount; and provided
further, that the Effective Amount of the Revolving Loans of any Bank plus the
participation of such Bank in the Effective Amount of all Swing Line Loans and
the Effective Amount of all L/C Obligations shall not at any time exceed an
amount equal to such Bank's Revolving Loan Commitment less such Bank's Pro Rata
Share of the Blocked Amount. Within the limits of each Bank's Revolving Loan
Commitment, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.01(b), prepay under Section 2.08 and reborrow
under this Section 2.01(b)."
SECTION 2. Waiver.
(a) Notwithstanding the requirements of Sections 8.15, 8.16,
8.17, 8.18 and 8.19 of the Agreement, the Banks hereby waive compliance by the
Company with the requirements of said Sections 8.15, 8.16, 8.17, 8.18 and 8.19
of the Agreement; provided, however, that the waiver contained in this Section
2(a) shall be immediately withdrawn on the earlier of (i) the date upon which
operating income of the Company, as reported in the monthly financial
information package delivered to the Banks no later than the 20th day of each
calendar month relating to the immediately preceding calendar month, as of the
end of any calendar month commencing July, 1999 is less than $700,000, (ii) so
long as no Event of Default has occurred and is continuing at such time, the
date upon which the Company is in compliance, or is deemed to be in compliance,
with Sections 8.15, 8.16, 8.17, 8.18 and 8.19 of the Agreement (such date, the
"Compliance Date") and (iii) October 8, 1999.
(b) In consideration of the waiver granted by the Banks
pursuant to Section 2(a) of this Amendment, the Company hereby agrees to pay an
additional .50% with respect to each Applicable Margin in effect on the date
hereof (other than with respect to the Commitment Fee), such additional
percentage to be applicable on the date hereof to but excluding the date upon
which the Blocked Amount is removed from Section 2.01(b) of the Agreement.
SECTION 3. Reference to and Effect Upon the Agreement.
(a) Except as specifically amended above, the Agreement shall
remain in full force and effect and is hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy of the
Bank under the Agreement, nor constitute a waiver of any provision of the
Agreement, except as specifically set forth herein.
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Upon the effectiveness of this Amendment, each reference in the Agreement to
"this Agreement", "hereunder", "hereof", "herein" or words of similar import
shall mean and be a reference to the Agreement as amended hereby.
SECTION 4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
SECTION 5. Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purposes.
SECTION 6. Counterparts. This Amendment may be executed in any
number of counterparts (including by facsimile transmission), each of which when
so executed shall be deemed an original but all such counterparts shall
constitute one and the same instrument.
SECTION 7. Effectiveness. This Amendment shall become
effective as of the date first written above upon the delivery of (i) an
amendment fee to the Agent (for distribution to the Banks on the basis of each
such Bank's Pro Rata Share) in an amount of $50,000, (ii) the executed Xxxxxxxx
Guaranty and (iii) executed signature pages (including by facsimile
transmission) to this Amendment signed by the Company and the Majority Banks.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment by
its duly authorized officer as of the date first written above.
WATERLINK, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Title: Chief Financial Officer
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: /s/ Xxxxxxxx X. Xxxx
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Title: Assistant Vice President
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, Individually as a Bank
By: /s/ Xxxxx Xxxxxxxx
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Title: Senior Vice President
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COMERICA BANK
By:
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Title:
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FIFTH THIRD BANK, CENTRAL OHIO
By: /s/ Xxxxxxx X. Xxxxxx
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Title: Vice President
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XXXXXX TRUST AND SAVINGS BANK
By:
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Title:
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxx
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Title: Vice President
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UNION BANK OF CALIFORNIA, N.A.
By: /s/ A. Xxxxx Xxxxxxxxx
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Title: Vice President
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