EXHIBIT 10.15
THIRD AMENDMENT TO
CREDIT AGREEMENT
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THIS
THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as of October 18, 2002,
between SCP POOL CORPORATION, a Delaware corporation (the "Borrower"), BANK
ONE, NA, as administrative agent (in such capacity, the "Administrative Agent") and
the Required Lenders signatory hereto party to the Credit Agreement referred to
below.
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BACKGROUND
| A. |
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The
Borrower, the Administrative Agent and the Lenders are parties to that certain
Credit Agreement dated as of November 27, 2001, as amended by that certain First
Amendment to Credit Agreement dated as of January 10, 2002, and that certain Second
Amendment to Credit Agreement dated as of September 5, 2002 (as the same has been and
may be amended, modified, supplemented, or restated from time to time, the "Credit
Agreement"; terms defined in the Credit Agreement and not otherwise defined herein
shall be used herein as defined in the Credit Agreement). |
| B. |
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The
Borrower has requested certain amendments to the Credit Agreement, and the
Administrative Agent and the Required Lenders have agreed to such amendments, subject
to the terms and conditions contained herein. |
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NOW,
THEREFORE, in consideration of the covenants, conditions and agreements hereafter
set forth, and for other good and valuable consideration, the receipt and adequacy of
which are all hereby acknowledged, the parties hereto covenant and agree as follows:
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| 1. |
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AMENDMENTS
TO THE CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows: |
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(a) |
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Addition
to Article I of the Credit Agreement. Effective as of the date hereof, Article I of
the Credit Agreement is amended by adding the following definition in
alphabetical order: |
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"Collateral Subsidiary"
means any Subsidiary which at any time has either (i) total assets
with a book value (determined in accordance with Agreement Accounting Principles)
equal to or greater than five percent (5%) of the Borrower's
Consolidated Net Worth, (ii) annual revenue (determined in
accordance with Agreement Accounting Principles) equal to or greater
than five percent (5%) of the annual revenue of the Borrower
and its Subsidiaries on a consolidated basis (determined in
accordance with Agreement Accounting Principles) or (iii) delivered
the documents described in Section 6.21. |
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(b) |
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Amendment
to Section 6.2. Effective as of the date hereof, the last sentence of Section 6.2
of the Credit Agreement is amended and restated to read in its entirety as
follows: |
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The Borrower
will not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances to purchase or carry any "margin stock" (as defined in
Regulation U), except as may otherwise be permitted under
Section 6.10 so long as the Borrower shall have executed and
delivered with the applicable Borrowing Notice or Swing Line Borrowing
Notice, as the case may be, a completed Federal Reserve Form U-1
dated as of the applicable Credit Extension Date. |
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(c) |
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Amendment
to Section 6.10 of the Credit Agreement. Effective as of the date hereof, Section 6.10
of the Credit Agreement is amended and restated in its entirety to read as
follows: |
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6.10 |
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Dividends.
The Borrower will not, nor will it permit any Subsidiary to,
declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital
stock) or redeem, repurchase or otherwise acquire or retire any of
its capital stock at any time outstanding, except that (i) any Subsidiary may
declare and pay dividends or make distributions to the Borrower or to
a Wholly-Owned Subsidiary which is a Collateral Subsidiary
(either directly or indirectly through one or more
Subsidiaries), and (ii) the Borrower may repurchase its capital stock
so long as at the time of such repurchase and after giving effect
thereto (a) no Default or Unmatured Default shall have occurred and
be continuing, (b) the Leverage Ratio shall not be greater than 2.0 to 1.0,
(c) the ratio of Consolidated Indebtedness to Consolidated Total
Capitalization shall not be greater than 0.5 to 1.0, and (d) neither
(A) the Available Aggregate Commitment nor (B) the amount equal to
the Borrowing Base minus the Aggregate Outstanding Credit Exposure shall be
less than $10,000,000. |
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(d) |
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Amendment
to Section 6.11(vi). Effective as of the date hereof, Section 6.11(vi) of Credit
Agreement is amended and restated in its entirety to read as follows: |
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(vi) |
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(a) Intercompany
Indebtedness between or among the Borrower and its Collateral
Subsidiaries organized under the laws of the United States of
America, and (b) so long as no Default or Unmatured Default has
occurred and is continuing or will result therefrom,
intercompany Indebtedness between or among the Borrower and its
Subsidiaries organized under the laws of a jurisdiction located
outside the United States of America or its Subsidiaries which are
not Collateral Subsidiaries which, together with the transactions permitted under
Section 6.14(iv), does not exceed $10,000,000 in the aggregate
during the term of this Agreement. |
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(e) |
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Amendment
to Section 6.15(ix). Effective as of the date hereof, Section 6.15(ix) of the
Credit Agreement is amended by deleting therefrom the reference to
"Subsidiary" and by inserting the reference to "Collateral Subsidiary" in lieu
thereof. |
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(f) |
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Amendment
to Section 6.18.2. Effective as of the date hereof, Section 6.18.2 of the Credit
Agreement is amended and restated in its entirety to read as follows: |
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6.18.2 |
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Leverage
Ratio. The Borrower will not permit the Leverage Ratio, determined
as of the end of each of its fiscal quarters, to be greater than (a) 2.0
to 1.0 for each fiscal quarter beginning with the fiscal quarter
ending December 31, 2002 through and including the fiscal quarter
ending June 30, 2003, and (b) 2.5 to 1.0 for each fiscal quarter thereafter. |
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(g) |
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Amendment
to Section 6.18.3. Effective as of the date hereof, Section 6.18.3 of the Credit
Agreement is amended and restated in its entirety to read as follows: |
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6.18.3 |
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Minimum
Net Worth. The Borrower will at all times maintain Consolidated Net
Worth of not less than (a) during the period beginning the fiscal
quarter ending September 30, 2002 through and including the fiscal
quarter ending June 30, 2003, the sum of $116,401,600, plus 75% of
the net proceeds of any equity issuances by the Borrower received in each fiscal
quarter beginning with the quarter ending September 30, 2002 and
(b) thereafter, the sum of (i) the greater of (x) $116,401,600 or
(y) 80% of the Consolidated Net Worth of the Borrower for the fiscal
quarter ending June 30, 2003, plus (ii) 50% of Consolidated Net Income earned in
each fiscal quarter beginning with the quarter ending September 30,
2003 (without deduction for losses), plus (iii) 75% of the net
proceeds of any equity issuances by the Borrower received in each
fiscal quarter beginning with the quarter ending September 30, 2003. |
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(h) |
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Amendment
to Section 6.21 of the Credit Agreement. Effective as of the date hereof, Section 6.21
of the Credit Agreement is amended by (a) deleting therefrom all references
to "Subsidiary" and by inserting references to "Collateral Subsidiary" in
lieu thereof and (b) adding to the end of Section 6.21 of the Credit Agreement
the following: |
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Collateral Subsidiaries
shall in any event at all times be comprised of Subsidiaries which,
when aggregated with the total assets of the Borrower, in the
aggregate have total assets with book value (determined in accordance
with Agreement Accounting Principles) equal to or greater than
ninety-five percent (95%) of the total consolidated assets of the Borrower and
the Subsidiaries. |
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NO
WAIVER. Nothing contained herein shall be construed as a waiver by the Administrative
Agent and the Lenders of any covenant or provision of the Credit Agreement, the other
Loan Documents, this Amendment, or of any other contract or instrument among the
Borrower, the Administrative Agent and the Lenders, and the failure of the
Administrative Agent or any Lender at any time or times hereafter to require strict
compliance by the Borrower of any provision thereof shall not waive, affect or
diminish any right of the Administrative Agent and the Lenders to thereafter demand
strict compliance therewith. The Administrative Agent and the Lenders hereby reserve
all rights granted under the Credit Agreement, the other Loan Documents, this
Amendment and any other contract or instrument among the Borrower, the Administrative
Agent and the Lenders. |
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| 3. |
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REPRESENTATIONS
AND WARRANTIES TRUE; NO DEFAULT. By its execution and delivery hereof, the
Borrower represents and warrants to the Administrative Agent that, as of the date hereof: |
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(a) |
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after
giving effect to this Amendment, the representations and warranties contained in
the Credit Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof as made on and as of such date,
except for any representations and warranties made as of a specific date,
which shall be true and correct or shall have been true, as applicable, in all
material respects as of such specific date; and |
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(b) |
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after
giving effect to this Amendment, no event has occurred and is continuing which
constitutes a Default or an Unmatured Default. |
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CONDITIONS
OF EFFECTIVENESS. This Amendment shall not be effective until each of the
following conditions precedent shall have been satisfied: |
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(a) |
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The
Administrative Agent shall have received all of the following, each dated
(unless otherwise indicated) the date of this Amendment, in form and
substance reasonably satisfactory to the Administrative Agent: |
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(i) |
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This
Amendment executed by the Borrower, the Administrative Agent and the Required
Lenders and acknowledged by the Guarantors. |
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(ii) |
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Such
other documents as the Administrative Agent may reasonably request. |
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(b) |
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No
Default. No Default shall have occurred and be continuing. |
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(c) |
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Representations
and Warranties. All of the representations and warranties contained in Article V of
the Credit Agreement, as amended hereby and in the other Loan Documents shall
be true and correct on and as of the date of this Amendment with the same
force and effect as if such representations and warranties had been made on
and as of such date, except to the extent such representations and warranties speak to
a specific date. |
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REFERENCE
TO CREDIT AGREEMENT. Upon the effectiveness of this Amendment, each reference in the
Credit Agreement to "this Agreement," "hereunder," or words of like import shall mean
and be a reference to the Credit Agreement, as affected and amended by this Amendment. |
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COUNTERPARTS;
EXECUTION VIA FACSIMILE. This Amendment may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Amendment may be validly executed and
delivered by facsimile or other electronic transmission. |
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GOVERNING
LAW; BINDING EFFECT. This Amendment shall be governed by and construed in accordance
with the laws of the State of Texas and shall be binding upon the Borrower, the
Administrative Agent, the Required Lenders and their respective successors and assigns. |
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| 8. |
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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 purpose. |
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LOAN
DOCUMENT. This Amendment is a Loan Document and is subject to all provisions of
the Credit Agreement applicable to Loan Documents, all of which are incorporated in
this Amendment by reference the same as if set forth in this Amendment verbatim. |
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NO
ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. |
[Balance of page
intentionally left blank.]
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IN
WITNESS WHEREOF, the Borrower, the Required Lenders and the Administrative Agent have
executed this Amendment as of the date first above written.
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By:
/S/ XXXXXX X. XXXXX DE LA MESA
Xxxxxx X. Xxxxx de la Mesa
President and Chief Executive Officer
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Signature Page
ADMINISTRATIVE AGENT
AND LENDER:
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as
Administrative Agent and as a Lender
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By:
/S/ XXXX X. XXXXX
Xxxx X. Xxxxx
Director
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Signature Page
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as
Documentation Agent and as a Lender
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By:
/S/ XXXXXXXXX XXXXXXXX
Xxxxxxxxx Xxxxxxxx
Vice President
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Signature Page
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FLEET
CAPITAL CORPORATION,
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as
Syndication Agent and as a Lender
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By:
/S/ XXX XXXXXX
Xxx Xxxxxx
Vice President
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Signature Page
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By:
/S/ XXXXX XXXXXX
Xxxxx Xxxxxx
Associate
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By:
/S/ XXXX XXXXXXX
Xxxx Xxxxxxx
Vice President
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Signature Page
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By:
/S/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
Senior Vice President
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Signature Page
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By:
/S/ XXXXX XXXXXX
Xxxxx Xxxxxx
Corporate Banking
Officer
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Signature Page
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Guarantors
hereby consent and agree to this Amendment and agree that, subsequent to the
execution of this Amendment, the Guaranty shall remain in full force and effect and
shall continue to be the legal, valid and binding obligation of Guarantors
enforceable against Guarantors in accordance with its terms. In addition,
Guarantors hereby agree that the Security Agreement and other Loan Documents they are
parties to, shall remain in full force and effect and shall continue to (i) secure the
Secured Obligations and (ii) be the legal, valid and binding obligations of Guarantors
and enforceable against Guarantors in accordance with their respective terms.
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SCP
DISTRIBUTORS LLC
ALLIANCE PACKAGING,
INC. SCP INTERNATIONAL, INC.
FORT XXXXX POOLS, INC.
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By:
/S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
Chief Financial Officer,
Secretary
and Treasurer of
each of the above entities
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SCP
PROPERTY CO.
SCP NORTHPARK LLC
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By:
/S/ XXXXXXX XXXXXX
Xxxxxxx Xxxxxx
Secretary of each of the
above entities
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SUPERIOR
POOL PRODUCTS LLC
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By:
/S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
Secretary and Treasurer
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By:
SCP Distributors LLC,
as its sole member
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By:
/S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
Chief Financial Officer, Secretary and
Treasurer
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Signature Page
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By:
SCP Distributors LLC,
as
its general partner
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By:
/S/ XXXXX X. XXXXXXX
Xxxxx X. Xxxxxxx
Chief Financial Officer, Secretary and
Treasurer
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Signature Page
