EXHIBIT 10.35
FOURTEENTH AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FOURTEENTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (the "AGREEMENT") is being executed and delivered as of January 15,
2002, by and among Waterlink, Inc., a Delaware corporation (the "COMPANY"), the
"Banks" party to and as defined in the "Credit Agreement" referred to below (the
"BANKS") and Bank of America, N.A. in its capacities as "Agent" for the Banks
under the Credit Agreement and "Collateral Agent" for the Banks pursuant to the
Collateral Documents (the "AGENT"). Capitalized terms used herein and not
defined herein shall have the meanings ascribed to such terms as set forth in
the Credit Agreement referred to and defined below.
W I T N E S S E T H:
WHEREAS, the Company, the Banks and the Agent are parties to
that certain Amended and Restated Credit Agreement dated as of June 27, 1997, as
heretofore further amended (the "CREDIT AGREEMENT"), pursuant to which the Banks
have agreed, subject to the terms and conditions set forth therein, to extend
credit to the Company;
WHEREAS, the Company has requested that the Banks extend the
Term Maturity Date and the Revolving Termination Date and, subject to the terms
and conditions of this Agreement, the Banks have agreed to such requests.
NOW, THEREFORE, in consideration of the foregoing premises,
the terms and conditions stated herein and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Company, the
Banks and the Agent, such parties hereby agree as follows:
SECTION 1. AMENDMENT TO CREDIT AGREEMENT. Subject to the
satisfaction of each of the conditions set forth in SECTION 2 of this Agreement,
the Credit Agreement is hereby amended as follows (unless otherwise specified,
section, article, exhibit and schedule references refer to sections, articles,
exhibits and schedules of the Credit Agreement):
(a) SECTION 1.01 is amended to delete in its entirety CLAUSE
(iii) of the second PROVISO of the definition of "APPLICABLE MARGIN" and to
replace such clause with the following provisions:
(iii) effective from October 1, 2001 to January 14, 2002, the
Applicable Margin shall be, notwithstanding the Level in effect at any
time, 3.50% with respect to Base Rate Loans and (iv) effective from and
after January 15, 2002, the Applicable Margin shall be, notwithstanding
the Level in effect at any time, 4.00% with respect to Base Rate Loans.
(b) SECTION 1.01 is amended to delete the definition of
"EXCESS CASH FLOW" in its entirety and to replace such definition with the
following definition:
"EXCESS CASH FLOW" means, with respect to any fiscal
period of the Company: (a) the Company's Adjusted Net Earnings from
Operations for such period; MINUS (b) the sum of (i) all regularly
scheduled installments of Indebtedness (including all Scheduled
Repayments) which were actually paid in cash by the Company during such
fiscal period, (ii) bank charges and deferred financing fees and bank
agency fees paid in cash during such period, and (iii) Capital
Expenditures which were actually paid in cash by the Company and its
Subsidiaries during such fiscal period to the extent permitted
hereunder, other than any such payments already deducted in the
computation of the Company's Adjusted Net Earnings from Operations;
PLUS (c) the sum of (i) any depreciation and amortization expense
deducted in determining Net Income for such fiscal period, (ii) other
non-cash charges deducted in computing such Net Income, (iii) any
decrease in the Company's current assets other than cash during such
period (other than any decrease in current liabilities as a direct
result of the Company's application of a portion of proceeds from any
Disposition to the satisfaction of current liabilities concurrently
with the consummation of such Disposition), (iv) any increase in the
Company's current liabilities during such period, (v) any net decrease
in cash collateral pledged by the Company and its Subsidiaries to
secure its reimbursement obligations with respect to surety bonds
issued on behalf of the Company and its Subsidiaries in the ordinary
course of business and (vi) any aggregate reduction during such period
in the face amount of outstanding Letters of Credit securing the
Company's and its Subsidiaries reimbursement obligations with respect
to surety bonds issued on behalf of the Company and its Subsidiaries in
the ordinary course of business; MINUS (d) the sum of (i) any increase
in such Company's current assets other than cash during such period;
and (ii) any decrease in such Company's current liabilities during such
period, (iii) any net increase in cash collateral pledged by the
Company and its Subsidiaries to secure its reimbursement obligations
with respect to surety bonds issued on behalf of the Company and its
Subsidiaries in the ordinary course of business and (iv) any net
reduction in the outstanding principal balance of the Revolving Loan
during such period as a result of voluntary repayments of such Loans
made to create availability for the issuance of Letters of Credit
issued during such period to secure the Company's and its Subsidiaries
reimbursement obligations with respect to surety bonds issued on behalf
of the Company and its Subsidiaries in the ordinary course of business.
(c) SECTION 1.01 is amended to delete the definition of
"INTEREST COVERAGE RATIO" in its entirety.
(d) SECTION 1.01 is further amended to delete the date
"January 15, 2002" set forth in each of the definitions of "LIQUIDITY DATE,"
"REVOLVING TERMINATION DATE," "SWING LINE TERMINATION DATE" and "TERM MATURITY
DATE" and to replace each such date with reference to the term "FINAL MATURITY
DATE."
(e) SECTION 1.01 is further amended to add the following new
definitions in their respective alphabetical locations:
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"ADJUSTED NET EARNINGS FROM OPERATIONS" means, with respect to
any fiscal period of the Company, Net Income, LESS any and all of the
following included in such net income: (a) gain or loss arising from
the sale of any capital asset; (b) gain arising from any write-up in
the book value of any asset; (c) earnings of any business entity,
substantially all the assets of which have been acquired in any manner,
or which has merged or otherwise consolidated with and into the Company
or any Subsidiary to the extent realized by such other business entity
prior to the date of such acquisition, merger or consolidation; (d)
earnings of any business entity (other than a Subsidiary) in which the
Company or any Subsidiary has an ownership interest unless (and only to
the extent) such earnings shall actually have been received by the
Company or such Subsidiary in the form of cash distributions; (e)
earnings of any Person to which assets of the Company or any Subsidiary
shall have been sold, transferred or disposed of, or into which the
Company or any Subsidiary shall have been merged, or which has been a
party with the Company or any Subsidiary to any consolidation or other
form of reorganization in which the Company or such Subsidiary is not
the surviving entity, after the date of such transaction; (f) gain
arising from the acquisition of debt or equity securities of the
Company or any Subsidiary or from cancellation or forgiveness of
Indebtedness; and (g) gain arising from extraordinary items including
restructuring charges, as determined in accordance with GAAP, or from
any other non-recurring transaction.
"FINAL MATURITY DATE" means October 1, 2002, provided,
however, that, if, as of May 31, 2002, the Company shall have failed
to satisfy any of the Pure Water Sale Conditions, such term shall
mean May 31, 2002.
"FOURTEENTH AMENDMENT" means the Fourteenth Amendment to this
Agreement dated as of January 15, 2002.
"FOURTEENTH AMENDMENT EFFECTIVENESS DATE" means the date upon
which the Agent advised the Company that the Fourteenth Amendment has
become effective.
"PAYABLES TO INVENTORY AND EXCESS COSTS RATIO" means, as of
any date of determination, the ratio of (a) the Company's accounts
payable, to (b) the sum of the Company's total inventory PLUS costs in
excess of xxxxxxxx, in each case determined in accordance with GAAP on
a consolidated basis.
"PURE WATER SALE CONDITIONS" means, as of any date of
determination, (a) the Company shall have entered into a definitive
sale agreement with respect to all or substantially all of the assets
or equity interests (or both) of its Pure Water Division, (b) such
agreement and transaction shall have been approved in writing by the
Required Lenders, (c) the prospective purchaser with respect to such
agreement shall have delivered in escrow xxxx xxxxxxx money in an
amount and pursuant to such terms as are approved in writing by the
Required Lenders, (d) neither such prospective purchaser's nor the
Company's obligation to consummate such transaction is subject to any
unsatisfied conditions precedent (which has not been waived) with
respect to such purchaser's financing for such transaction, such
purchaser's due diligence with respect to the Pure Water Division, any
governmental approval or governmentally imposed waiting period with
respect to such purchaser or the Company, any board of directors',
shareholders' (or similar bodies') or third party's approval or
consent (other than the Lenders' approval), or any pending or
threatened litigation with respect to such transaction.
(f) SECTION 1.01 is further amended to delete in its entirety
CLAUSE (III) of the definition of "EBITDA" and to replace such clause with the
following provision:
(iii) charges incurred prior to December 1, 2001, not to exceed
$2,400,000 in the aggregate for downsizing of the Company's corporate
staff (including severance obligations) and closing its Cleveland, Ohio
corporate offices,
(g) SECTION 1.01 is further amended to delete in its entirety
the definition of "STRATEGIC MILESTONES" and to replace such definition with the
following definition:
"STRATEGIC MILESTONES" means each of the following, in each
case in a manner substantially consistent with general investment
banking practices employed with respect to such processes as conducted
in the United States: (a) the Company's distribution, on or before
January 31, 2002, of comprehensive offering memoranda to prospective
purchasers or investors providing disclosure necessary for the Company
to offer to sell or otherwise dispose of substantially all of its Pure
Water Division and (b) the Company's
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setting forth a due date, which shall be not later than April 15, 2002,
for such prospective purchasers or investors to submit to the Company
written expressions of interest in purchasing or otherwise acquiring
substantially all of its Pure Water Division.
(h) SECTION 2.04 is amended to delete both references in such
section to the term "Swing Line Termination Date" and to replace such references
with references to the term "Fourteenth Amendment Effective Date."
(i) SECTION 2.09(E) is deleted in its entirety and replaced
with the following provision:
(e) EXCESS CASH FLOW. On the forty-fifth (45th) day
following the end of each fiscal quarter of the Company, commencing
with the fiscal quarter ending March 31, 2002, the Company shall prepay
the Scheduled Repayments in the inverse order of their respective
maturities in amounts equal to 80% of Excess Cash Flow for such fiscal
quarter; PROVIDED, HOWEVER, that if at the time of any such required
prepayment the Company and its Subsidiaries shall have not yet
completed its anticipated repair of the reactivation kiln located at
Xxxxxxxx & Suttcliffe Corporation, and the aggregate amount actually
expended for such repairs through such date is less than $500,000,
then:
(i) subject to the Company's compliance with CLAUSE
(ii) below, the amount otherwise required to be prepaid under
this section and applied as a prepayment of the Scheduled
Repayments with respect to such fiscal quarter period ended
shall be reduced by an amount equal to the lesser of (x) the
amount otherwise required to be so prepaid and applied
hereunder for such period and (y) an amount (not less than
zero) equal to $500,000 MINUS the aggregate amount of such
expenditures actually made by the Company prior to such date
MINUS the aggregate amount of Kiln Reserves maintained by the
Agent at such time under and as defined in CLAUSE (ii) below
(prior to any increase in such reserve on such date with
respect to payments made with respect to the fiscal quarter
then ended); and
(ii) an amount equal to the lesser of (x) the sum of
the reduction determined pursuant to CLAUSE (i) above for such
fiscal quarter ended plus 20% of Excess Cash Flow for such
fiscal quarter ended and (y) the amount determined pursuant to
CLAUSE (i)(y) above, shall be paid by the Company to the Agent
and applied as a repayment of the outstanding principal
balance of the Revolving Loan and maintained by the Agent as a
reserve against availability under the Revolving Loan
Commitment (together with any such amount previously so paid
to the Agent under this clause and then maintained,
collectively, the "KILN RESERVE"), which Kiln Reserve may be
subsequently reduced upon the Company thereafter requesting
Revolving Loans (which are made pursuant to the terms and
conditions of this Agreement) the proceeds of which are
designated by the Company to the Agent as to be applied to the
payment of repair expenditures relating to the reactivation
kiln described above and supported by invoices for such
purposes as presented by the Company and satisfactory to the
Agent.
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(j) SECTION 2.10(a)(i) is deleted in its entirety and replaced
with the following provision:
On each date set forth below, the Company shall be required to repay
the principal amount (or such other amount after giving effect to any
prepayments permitted or required pursuant to this Agreement) of the
Term Loans as is set forth opposite such date (each, a "Scheduled
Repayment"):
Date Amount
---- ------
January 31, 2002 $125,000
February 28, 2002 $125,000
March 31, 2002 $125,000
April 30, 2002 $125,000
May 31, 2002 $125,000
June 30, 2002 $125,000
July 31, 2002 $175,000
August 31, 2002 $175,000
September, 30, 2002 $175,000
Term Maturity Date $11,676,627.03
(k) SECTION 2.12 is amended to add the following provision to
the end of such section:
(e) FOURTEENTH AMENDMENT FEES.
(i) On the earliest to occur of the first Liquidity
Date following the Fourteenth Amendment Effectiveness Date, the
acceleration of the Company's obligations pursuant to SECTION 9.02, and
the Revolving Termination Date, the Company shall pay to the Agent in
cash or other immediately available funds, for distribution to each
Bank based on its Pro Rata Share, an amendment fee in an aggregate
amount equal to 0.50% of the sum of the aggregate Revolving Loan
Commitments plus the aggregate outstanding principal balance of the
Term Loans calculated as of the Fourteenth Amendment Effective Date
(after giving effect to any payments of such principal made on such
date).
(ii) The Company shall pay to the Agent on June 30,
2002, in cash or other immediately available funds, for distribution to
each Bank based on its Pro Rata Share, a term loan fee in an aggregate
amount equal to 0.50% of the outstanding aggregate outstanding
principal balance of the Term Loans calculated as of June 30, 2002
(after giving effect to any payments of such principal made on such
date).
(l) SECTION 5.02 is amended to delete the word "and" which
appears at the end of CLAUSE (b) thereof and to add the following provision to
such section immediately following existing CLAUSE (C) thereof:
(d) COLLATERAL VALUE TO DEBT RATIO COMPLIANCE. The
Agent shall have received a certificate (in form and detail acceptable
to the Agent) demonstrating that,
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after giving effect to the requested Borrowing or issuance of or
amendment to a Letter of Credit, the Collateral Value to Debt Ratio
would be greater than or equal to 0.55 to 1.00, calculated based upon
the Company's net accounts receivable as of the then immediately
preceding Business Day and the Company's inventory and costs in excess
of xxxxxxxx as of the last day of the then most recently ended calendar
month.
(m) SECTION 7.14(e) is amended to delete the date "January 15,
2002" set forth therein, to replace such date with the date "February 15, 2002,"
and to add the following provision to the end of such section:
; PROVIDED, HOWEVER, that, unless and until such accounts become
subject to such blocked account and lockbox agreements (whether with
existing banks or replacement banks), at no time shall the Company
permit the accounts balances thereof to exceed (i) $100,000 with
respect to the Waterlink Technologies, Inc. account currently
maintained in Boca Raton, Florida or (ii) $60,000 with respect to the
C'Treat Offshore, Inc. account currently maintained in Dallas, Texas.
(n) SECTION 7.14 is further amended to add the following
provision to the end of such Section:
(f) On or before February 28, 2002, the Company will
execute and deliver, and cause to be delivered, to the Agent, a
mortgage or deed of trust in favor of the Agent as additional security
for the Obligations with respect to all fee simple interests in real
property of the Company and its Subsidiaries, together with title
insurance policies (in an amount not to exceed the estimated fair
market value of the property and expected appreciation thereof, if any,
in each case as may be reasonably determined by the Agent) and
endorsements, surveys, corporate authorization and incumbency
certificates and legal opinions, in each case in form and substance
reasonably satisfactory to the Agent.
(o) SECTION 8.01 is amended to delete in its entirety CLAUSES
(I) and (J) thereof and to replace each of such clauses with the following
provision:
[intentionally omitted];
(p) SECTION 8.05 is amended to delete CLAUSE (d) thereof in
its entirety and to replace such clause with the following provision:
(d) other Indebtedness in an aggregate amount
outstanding not to exceed $500,000;
(q) SECTION 8.05 is further amended to delete the amount
"$6,500,000" set forth in CLAUSE (f) thereof and to replace such amount with the
amount "$500,000".
(r) SECTION 8.05 is further amended to delete the amount
"$10,000,000" set forth in CLAUSE (g) thereof and to replace such amount with
the amount "$3,000,000".
(s) SECTION 8.15 is amended to delete the ratio "0.50 to 1.00"
set forth therein and to replace such ratio with the ratio "0.55 to 1.00."
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(t) SECTIONS 8.16 through 8.18 are deleted in their entirety
and replaced with the following:
8.16. MINIMUM THREE-MONTH EBITDA. (a) The Company
shall not permit its EBITDA for any three consecutive calendar month
period ending as of any of the dates set forth below to be less than
the applicable corresponding amount set forth below opposite such
dates:
Date Minimum Amount
---- --------------
December 31, 2001 $1,050,000
January 31, 2002 $1,085,000
February 28, 2002 $1,150,000
March 31, 2002 $1,550,000
April 30, 2002 $1,600,000
May 31, 2002 $1,700,000
June 30, 2002 $1,900,000
July 31, 2002 $2,225,000
August 31, 2002 $2,400,000;
PROVIDED, HOWEVER, that, upon the sale or other disposition by the
Company of all or substantially all of any of the Remaining Business
Units, such minimum amounts shall be adjusted in a manner reasonably
determined by the Agent so as to establish a minimum EBITDA amount for
subsequent periods which approximates 85% of the Company's projected
EBITDA for such periods, as projected on the Fourteenth Amendment
Effectiveness Date, after giving effect to the elimination therefrom of
the projected EBITDA of the operations subject to all such
dispositions, as projected as of the Fourteenth Amendment Effectiveness
Date.
(b) The Company shall not permit the consolidating
earnings before interest, taxes and depreciation (calculated in the
same manner as EBITDA, but on a consolidating basis) for either of its
Specialty Products or Pure Water Divisions, for so long as its
operations remain as a division or Subsidiary of the Company, for any
three consecutive calendar month period ending as of any of the dates
set forth below to be less than the applicable corresponding amount set
forth below opposite such dates:
Date Specialty Products Pure Water
---- ------------------ ----------
December 31, 2001 $1,120,000 $175,000
January 31, 2002 $1,050,000 $190,000
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February 28, 2002 $1,150,000 $150,000
March 31, 2002 $1,400,000 $300,000
April 30, 2002 $1,400,000 $350,000
May 31, 2002 $1,350,000 $500,000
June 30, 2002 $1,400,000 $675,000
July 31, 2002 $1,625,000 $775,000
August 31, 2002 $1,800,000 $775,000.
8.17 PAYABLES TO INVENTORY AND EXCESS COSTS. The
Company shall not permit its Payables to Inventory and Excess Costs
Ratio, as of the last day of any calendar month ending on or after
December 31, 2001, to be less than 0.35 to 1.00.
8.18 WEEKLY NET BOOK RECEIVABLES. The Company shall
not permit the sum of (a) the combined net book value of the accounts
receivable with respect to its Pure Water and Specialty Products
Divisions, as of the last Business Day of any week ended after the
Fourteenth Amendment Effective Date PLUS (b) the aggregate amount of
cash collateral pledged by the Company to the Agent pursuant to this
section (and subject to agreements acceptable to the Agent), to be less
than $10,000,000; PROVIDED, HOWEVER, that, upon the sale or other
disposition by the Company of either of such divisions, such minimum
amount shall be adjusted in a manner reasonably determined by the Agent
so as to establish a minimum amount for subsequent periods which
approximates 85% of the Company's projected net book receivables for
such periods, as projected on the Fourteenth Amendment Effectiveness
Date, after giving effect to the elimination therefrom of the projected
net book receivables of the operations subject to all such disposition,
as projected as of the Fourteenth Amendment Effectiveness Date.
(u) SECTION 8.20 is amended to delete CLAUSE (iii) thereof in
its entirety and to replace such clause with the following provisions:
(iii) in each of its 2000 and 2001 fiscal years, in an aggregate amount
not in excess of $6,000,000 and (iv) in its 2002 fiscal year, in an
aggregate amount not in excess of $1,250,000.
(v) EXHIBIT C is deleted in its entirety and replaced with the
exhibit attached hereto as ANNEX 1 to this Agreement.
SECTION 2. EFFECTIVENESS OF THE AMENDMENT AND WAIVER;
CONDITIONS PRECEDENT. The provisions of SECTION 1 of this Agreement shall become
effective as of the date hereof upon the Agent's receipt of each of the
following:
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(a) originally-executed (or facsimiles of originally-
executed) counterparts of this Agreement executed and delivered by duly
authorized officers of the Company, each Guarantor and each of the
Banks; and
(b) evidence satisfactory to the Agent that those certain
Convertible Subordinated Notes dated March 2, 1998 issued by the
Company to the former shareholders of Chemitreat Services, Inc. in an
original aggregate principal amount of $2,250,000 as heretofore
amended, and those certain 13.00% Subordinated Notes dated January 18,
2001 issued by the Company to Xxxxxxxx Venture Partners III, L.P. and
CID Equity Capital V, L.P. in an original aggregate principal amount of
$1,000,000, in each case has been modified in a manner acceptable to
the Agent to extend the maturity date and all remaining principal
payments due thereunder to a date not earlier that October 15, 2002.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Company and
each Guarantor hereby represents and warrants that (a) this Agreement
constitutes its legal, valid and binding obligation, enforceable against each
such party in accordance with its terms and (b) there is no consent, approval or
other requirement known to the Company or such Guarantor which could reasonably
be expected to impair or materially delay the Company's or such Guarantor's
ability to perform its obligations under this Agreement or the Credit Agreement
as proposed to be amended hereby and (c) no Default or Event of Default has
occurred and is continuing.
SECTION 4. REAFFIRMATION, RATIFICATION AND ACKNOWLEDGMENT. (a)
The Company and each of the Guarantors hereby (i) ratifies and reaffirms all of
its payment and performance obligations, contingent or otherwise, and each grant
of security interests and liens in favor of the Agent, under each Loan Document
to which it is a party, (ii) agrees and acknowledges that such ratification and
reaffirmation is not a condition to the continued effectiveness of such Loan
Documents, and (iii) agrees that neither such ratification and reaffirmation,
nor the Agent's nor any Banks' solicitation of such ratification and
reaffirmation, constitutes a course of dealing giving rise to any obligation or
condition requiring a similar or any other ratification or reaffirmation from
the Company or the Guarantors with respect to any subsequent modifications
consent or waiver with respect to the Credit Agreement or other Loan Documents.
The Credit Agreement and each other Loan Document is in all respects hereby
ratified and confirmed and neither the execution, delivery nor effectiveness of
this Agreement shall operate as a waiver of any Default or Event of Default
(whether or not known to the Agent, the Collateral Agent or any Bank) or any
right, power or remedy of the Agent, the Collateral Agent or any Bank of any
provision contained in the Credit Agreement or any other Loan Document, whether
as a result of any Default or Event of Default or otherwise. This Agreement
shall constitute a "Loan Document" for purposes of the Credit Agreement.
(b) The Company and each of the Guarantors hereby acknowledges
and confirms that (i) it does not have any grounds, and hereby agrees not to
challenge (or to allege or to pursue any matter, cause or claim arising under or
with respect to), in any case based upon acts or
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omissions of the Agent or any of the Banks occurring prior to the date hereof or
facts otherwise known to it as of the date hereof, the effectiveness, genuiness,
validity, collectibility or enforceability of the Credit Agreement or any of the
other Loan Documents, the Obligations, the Liens securing such Obligations, or
any of the terms or conditions of any Loan Document (it being understood that
such acknowledgement and confirmation does not preclude the Company or the
Guarantors from challenging the Agent's or any Bank's interpretation of any term
or provision of the Credit Agreement or other Loan Document) and (ii) it does
not possess (and hereby forever waives, remises, releases, discharges and holds
harmless the Banks, the Agent and their respective affiliates, stockholders,
directors, officers, employees, attorneys, agents and representatives and each
of their respective heirs, executors, administrators, successors and assigns
(collectively, the "INDEMNIFIED PARTIES") from and against, and agrees not to
allege or pursue) any action, cause of action, suit, debt, claim, counterclaim,
cross-claim, demand, defense, offset, opposition, demand and other right of
action whatsoever, whether in law, equity or otherwise (which it, all those
claiming by, through or under it, or its successors or assigns, have or may
have) against the Indemnified Parties, or any of them, by reason of, any matter,
cause or thing whatsoever, with respect to events or omissions occurring or
arising on or prior to the date hereof and relating to the Credit Agreement or
any of the other Loan Documents (including, without limitation, with respect to
the payment, performance, validity or enforceability of the Obligations, the
Liens securing the Obligations or any or all of the terms or conditions of any
Loan Document) or any transaction relating thereto; PROVIDED, HOWEVER, THAT
neither the Company nor any Guarantor hereby releases or holds harmless any
Indemnified Party for actions or omissions by any such Indemnified Party
constituting, or losses or expenses directly resulting from, the gross
negligence or willful misconduct of such Indemnified Party.
SECTION 5. MISCELLANEOUS.
(a) EXECUTION IN COUNTERPARTS; GOVERNING LAW This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same instrument. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois.
(b) SECTION TITLES. The section titles contained in this
Agreement are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
(c) AGENT'S EXPENSE. The Company hereby agrees to promptly
reimburse the Agent for all reasonable out-of-pocket expenses, including,
without limitation, attorneys' and paralegals fees, field exam fees and expenses
and consultants fees and expenses, it has heretofore or hereafter incurred or
incurs in connection with the preparation, negotiation, administration and
execution of the Loan Agreement, this Agreement or any document, instrument,
agreement delivered pursuant to the Loan Agreement or this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto duly authorized
as of the date first above written.
WATERLINK, INC.
WATERLINK MANAGEMENT, INC.
WATERLINK SEPARATIONS, INC.
WATERLINK BIOLOGICAL WASTEWATER SYSTEMS, INC.
WATERLINK TECHNOLOGIES, INC.
XXXXXXXX & XXXXXXXXX CORPORATION (a/k/a Xxxxxxxx Sutcliffe Corporation)
C'TREAT OFFSHORE, INC. (f/k/a Chemitreat Services, Inc.)
WATERLINK N.S., INC.
By: ___________________________
Name:
Title:
BANK OF AMERICA, N.A., as Agent and
Collateral Agent
By:________________________________________
Title:_____________________________________
BANK OF AMERICA, N.A., Individually as a
Bank and as Issuing Bank
By:_________________________________________
Title:______________________________________
COMERICA BANK
By:_________________________________________
Title:______________________________________
FIFTH THIRD BANK, CENTRAL OHIO
By:_________________________________________
Title:______________________________________
XXXXXX TRUST AND SAVINGS BANK
By:_________________________________________
Title:______________________________________
PNC BANK, NATIONAL ASSOCIATION
By:_________________________________________
Title:______________________________________
UNION BANK OF CALIFORNIA, N.A.
By:_________________________________________
Title:______________________________________
(Annex 1 to Fourteenth Amendment)
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
------------------------------
Bank of America, N.A., as Agent
for the Banks party to the Credit
Agreement referred to below
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: ________________
Ladies and Gentlemen:
This certificate is furnished to you by Waterlink, Inc. (the
"COMPANY"), pursuant to Section 7.02(b) of that certain Amended and Restated
Credit Agreement, dated as of June 27, 1997, among the Company, the financial
institutions party thereto (the "BANKS"), and Bank of America, N. A., as agent
for such Banks (as the same has been heretofore and may be hereafter further
amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), concurrently with the delivery of the financial statements
required pursuant to Section 7.01 of the Credit Agreement. Terms not otherwise
defined herein are used herein as defined in the Credit Agreement.
The undersigned, on behalf of the Company, hereby certifies
that:
(A) no Default or Event of Default has occurred and is
continuing, except as described in Attachment 1 hereto;
(B) the financial data and computations set forth in Schedule
1 below, evidencing compliance with the covenants set forth in Sections 8.05(d),
(f) and (g), 8.15, 8.16, 8.17 and 8.20 of the Credit Agreement, are true and
correct as of _____________, ____(1) (the "COMPUTATION DATE"); and
(C) if the financial statements of the Company being
concurrently delivered were not prepared in accordance with GAAP, Attachment 2
hereto sets forth any derivations required to conform the relevant data in such
financial statements to the computations set forth below.
____________________
(1) The last day of the accounting period for which financial statements are
being concurrently delivered.
The foregoing certifications, together with the computations
set forth in Schedule 1 hereto and the financial statements delivered with this
Compliance Certificate in support hereof, are made and delivered as of this
_____ day of _____________, ____.
WATERLINK, INC.
By: __________________________________
Name: _________________________
Its: __________________________(2)
______________________
(2) To be executed by a Responsible Officer of the Company.
SCHEDULE 1
----------
COMPUTATIONS
------------
I. Section 8.05 Indebtedness
-------------------------
A. Clause (d)
----------
1. Aggregate principal amount of Indebtedness permitted: $500,000
2. Actual amount of Indebtedness as of the date of determination: $________
B. Clause (f)
----------
1. Aggregate principal amount of Indebtedness permitted: $500,000
2. Actual amount of Indebtedness as of the date of determination: $________
C. Clause (g)
----------
1. Aggregate principal amount of Indebtedness permitted: $3,000,000
2. Actual amount of Indebtedness as of the date of determination: $_________
II. Section 8.15 Collateral Value to Debt Ratio
-------------------------------------------
1. Date of Determination: ____________, ____.
2. Required: 0.55 to 1.00
3. Actual:
(a) net accounts receivable $____________
(b) inventory $____________
(c) costs in excess of xxxxxxxx $____________
(d) sum of (a) through (c) $____________
(e) outstanding Loans $____________
(f) L/C Obligations in excess of $465,072 $____________
(g) sum of (e) and (f) $____________
(h) ratio of (d) to (g) ____ to 1.00.
III. Section 8.16 Three-Month EBITDA
-------------------------------
1. Three months ending: ____________, ____.
2. Consolidated EBITDA for such period: $__________
Required: $__________
3. Consolidating EBITDA for such period for Specialty Products: $__________
Required: $__________
4. Consolidating EBITDA for such period for Pure Water: $__________
Required: $__________
IV. Section 8.17 Payables to Inventory and Excess Costs
---------------------------------------------------
1. Date of Determination: ____________, ____.
2. Required: 0.35 to 1.00
3. Actual:
(a) accounts payable $____________
(b) inventory $____________
(c) costs in excess of xxxxxxxx $____________
(d) sum of (b) and (c) $____________
(e) ratio of (a) to (d) ____ to
V. Section 8.18 Weekly Net Book Receivables
----------------------------------------
1. Date of Determination: _______________, ___.
2. Required: $10,000,000
3. Actual:
(a) net book receivables of Pure Water $____________
(b) net book receivables of Specialty Products $_____________
(c) cash collateral $_____________
(d) sum of (a) through (c) $_____________
VI. Section 8.20 Capital Expenditures
---------------------------------
1. Date of Determination: ___________. ____.
2. Maximum Permitted in Fiscal Year: $_____________
2. Capital Expenditures Incurred Year to Date through
Date of Determination $_____________.
ATTACHMENT 1
------------
DESCRIPTION OF ANY DEFAULTS OR EVENTS OF DEFAULT
------------------------------------------------
ATTACHMENT 2
------------
DERIVATIONS REQUIRED TO CONFORM RELEVANT DATA IF FINANCIAL
STATEMENTS WERE NOT PREPARED IN ACCORDANCE WITH GAAP
----------------------------------------------------
