FIRST AMENDMENT
THIS FIRST AMENDMENT dated as of August 13, 1999 (this "Amendment")
amends the Amended and Restated Credit Agreement dated as of August 1, 1997
(the "Credit Agreement") among PENTAIR, INC., EUROPENTAIR GMBH, PENTAIR
CANADA, INC., BANK OF AMERICA, N.A. (formerly Bank of America National Trust
and Savings Association) as U.S. Dollar Administrative Agent, U.S. BANK
NATIONAL ASSOCIATION, as a Bank and as Overnight Administrative Agent, XXXXXX
GUARANTY TRUST COMPANY OF NEW YORK, as a Bank and as a G-7 Currency
Administrative Agent, and NBD BANK, THE BANK OF TOKYO-MITSUBISHI, LTD, ABN
AMRO BANK N.V. and DRESDNER BANK AG, as Banks, and various affiliates of the
Banks which are parties to the Canadian Facility. Terms defined in the Credit
Agreement are, unless otherwise defined herein or the context otherwise
requires, used herein as defined therein.
WHEREAS, the Borrowers, the Banks and the Agents have entered into
the Credit Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement in
certain respects as more fully set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 AMENDMENTS. Effective on (and subject to the occurrence
of) the First Amendment Effective Date (as defined below), the Credit
Agreement shall be amended as set forth below:
1.1 ADDITION OF DEFINITIONS. The following definitions are added to
Section 1.1 in appropriate alphabetical sequence:
"DAILY PRICING MARGIN" - see the attached Pricing Grid.
"EBITDA" means, for any period, the sum of the consolidated
net income of Pentair for such period excluding the effect of (i) the
special $38,000,000 restructuring charge taken in the first fiscal
quarter of 1999 and (ii) any extraordinary or non-recurring gains and
any extraordinary or non-recurring non-cash losses in such period
PLUS, to the extent deducted in determining such consolidated net
income, Interest Expense, income tax expense, depreciation and
amortization for such period.
"INTEREST COVERAGE RATIO" means, for any period, the ratio of
(i) EBITDA plus rent expense for such period to (ii) Interest Expense
plus rent expense for such period.
"FACILITY FEE RATE" - see the attached Pricing Grid.
"LEVERAGE RATIO" means, as of any date, the ratio of (a) the
sum (without duplication) of (i) all Debt of Pentair and its
Consolidated Subsidiaries, plus (ii) all Synthetic Lease Obligations of
Pentair and its Consolidated Subsidiaries, plus (iii) the outstanding
investments in all receivables sold pursuant to Sales of Receivables,
all determined on a consolidated basis, to (b) EBITDA for the period of
four consecutive fiscal quarters most recently ended on or before such
date for which financial statements have been delivered pursuant to
Section 12.1; PROVIDED that for purposes of calculating EBITDA pursuant
to this CLAUSE (B), the consolidated net income of any Person or
business unit acquired by the Company or any Subsidiary during such
period (plus, to the extent deducted in determining such consolidated
net income, interest expense, income tax expense, depreciation and
amortization of such Person or business unit) shall be included on a
PRO FORMA basis for such period (assuming the consummation of each such
acquisition and the incurrence or assumption of any Debt in connection
therewith occurred on the first day of such period) in accordance with
Article 11 of Regulation S-X of the Securities and Exchange Commission.
"SYNTHETIC LEASE OBLIGATIONS" means obligations under
operating leases (as determined pursuant to Statement of Financial
Accounting Standards No. 13) of properties which are reported for
United States income tax purposes as owned by Pentair or a Consolidated
Subsidiary, capitalized as if such operating leases were capital leases
in accordance with generally accepted accounting principles.
1.2 AMENDMENT TO DEFINITION OF CD MARGIN. The definition of CD Margin
is amended in its entirety to read as follows:
"CD MARGIN" - see the attached Pricing Grid.
1.3 AMENDMENT TO DEFINITION OF DAILY PRICING RATE. The
definition of Daily Pricing Rate is amended in its entirety to
read as follows:
"DAILY PRICING RATE" means for any day a rate per annum
(rounded upward, if necessary, to the nearest 1/16 of 1%) determined
pursuant to the following formula, which rate shall continue in effect
until the next succeeding Business Day:
Daily LIBO Rate
----- Pricing = 100 - Eurocurrency PLUS Daily
Rate Reserve Percentage
Pricing Margin
1.4 Amendment to Definition of Eurocurrency Margin. The
definition of Eurocurrency Margin is amended in its entirety to read as
follows:
"EUROCURRENCY MARGIN" - see that attached Pricing Grid.
1.5 DELETION OF DEFINITIONS. The definitions of "Adjusted Debt to
Total Capital Ratio" and "Debt to Total Capital Ratio" are deleted from
Section 1.1.
1.6 AMENDMENT TO FACILITY FEE RATE. Clause (a) of Section 2.6
is amended in its entirety to read as follows:
(a) During the term of this Agreement, the Borrowers shall pay
to the U.S. Dollar Administrative Agent for the account of each Bank a
Facility Fee on such Bank's Commitment in U.S. Dollars at a rate per
annum equal to the Facility Fee Rate.
1.7 ADJUSTMENTS TO PRICING. Section 2.14 is amended in its entirety to
read as follows:
SECTION 2.14 ADJUSTMENTS TO MARGINS AND FACILITY FEES.
Beginning on the date of the effectiveness of the First Amendment to
this Agreement, the CD Margin shall be 0.675%, the Daily Pricing Margin
shall be 0.575%, the Eurocurrency Margin shall be 0.55% and the
Facility Fee Rate shall be 0.20%. Thereafter, each of the foregoing
shall be adjusted, to the extent applicable, in accordance with the
attached Pricing Grid, 50 days (or, in the case of the last fiscal
quarter of any fiscal year, 95 days) after the end of each fiscal
quarter of Pentair based on the Leverage Ratio as of the last day of
such fiscal quarter; PROVIDED that if Pentair fails to deliver the
financial statements and compliance certificate required by Section
12.1(a) or (b) and Section 12.1(c) by the 50th (or, if applicable, the
95th) day after any fiscal quarter, the Leverage Ratio shall be deemed
to be greater than 3.5 to 1 until such statements and certificate are
delivered; PROVIDED, FURTHER, that if Pentair has received a rating on
its senior, unsecured long-term debt from both Xxxxx'x Investors
Service, Inc. and Standard & Poor's Ratings Group, THEN the CD
Margin, the Daily Pricing Margin, the Eurocurrency Margin and the
Facility Fee Rate, (collectively the "Pricing") shall be determined on
a daily basis in accordance with the attached Pricing Grid by reference
to such ratings (and if there is a split in such ratings, the Pricing
shall be determined based on the lower of such ratings (unless Level IV
on the attached Pricing Grid applies)).
1.8 LEVERAGE RATIO. Section 12.2 is amended in its entirety to
read as follows:
SECTION 12.2 MAXIMUM LEVERAGE RATIO. Pentair shall not at any
time permit the Leverage Ratio to exceed the applicable ratio set forth
below during any period set forth below:
FISCAL QUARTER ENDING: LEVERAGE RATIO
Prior to 6/29/00 3.90 to 1.0
6/30/00 through 12/30/00 3.25 to 1.0
12/31/00 and thereaftera 3.00 to 1.0.
1.9 INTEREST COVERAGE RATIO. Section 12.4 is amended in
its entirety to read as follows:
SECTION 12.4 MINIMUM INTEREST COVERAGE RATIO. Pentair shall
not permit the Interest Coverage Ratio (i) for any Computation Period
ending prior to March 31, 2000 to be less than 2.50 to 1 and (ii) for
any Computation Period ending on or after March 31, 2000 to be less
than 3.00 to 1. For purposes of the foregoing, a "Computation Period"
is any period of four consecutive fiscal quarters of Pentair ending on
the last day of a fiscal quarter.
1.10 PRICING GRID. The Pricing Grid attached hereto is
added to the Credit Agreement as an attachment thereto.
SECTION 2 REPRESENTATIONS AND WARRANTIES. Each Borrower represents and
warrants to the Banks that (a) each of the representations and warranties set
forth in the Credit Agreement is true and correct as of the date of the
execution and delivery of this Amendment by the Borrowers, with the same
effect as if made on such date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they were true
and correct as of such earlier date), (b) the execution and delivery by each
Borrower of this Amendment and the performance by each Borrower of its
obligations under the Credit Agreement, as amended hereby (as so amended, the
"Amended Credit Agreement"), (i) are within the powers of the Borrowers, (ii)
have been duly authorized by all necessary action on the part of the
Borrowers, (iii) have received all necessary governmental approval and (iv)
do not and will not contravene or conflict with (A) any provision of law or
the certificate of incorporation or by-laws or other organizational documents
of any Borrower or (B) any agreement, judgment, injunction, order, decree or
other instrument binding upon any Borrower or any Subsidiary of Pentair and
(c) the Amended Credit Agreement is the legal, valid and binding obligation
of the Borrowers enforceable against the Borrowers in accordance with its
terms, except as enforceability may be limited by bankruptcy, insolvency or
other similar laws of general application affecting the enforcement of
creditors' rights or by general principles of equity limiting the
availability of equitable remedies..
SECTION 3 EFFECTIVENESS. This Amendment shall become effective on
the date (the "First Amendment Effective Date") when the U.S. Dollar
Administrative Agent shall have
received each of the following documents:
(a) counterparts of this Amendment executed by each of
the Borrowers, the U.S. Dollar Administrative Agent, the G-7
Currency Administrative Agent, the Overnight Administrative
Agent and the Required Banks;
(b) a certificate of the secretary or an assistant secretary
of each of the Borrowers as to:
(i) resolutions of the board of directors of each of
the Borrowers authorizing the execution and delivery of this
Amendment and the performance by each of the Borrowers of its
obligations under the Amended Credit Agreement; and
(ii) the incumbency and signatures of those of its
officers authorized to execute and deliver this
Amendment;
(c) the legal opinion of Xxxxxx & Efron, counsel for the
Borrowers, substantially in the form of EXHIBIT A hereto; and
(d) such other documents as the Banks may reasonably request.
SECTION 4 MISCELLANEOUS.
4.1 CONTINUING EFFECTIVENESS, ETC. As herein amended, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the First Amendment Effective Date, all
references in the Credit Agreement and the Notes to "Credit Agreement",
"Agreement" or similar terms shall refer to the Amended Credit Agreement.
4.2 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
4.3 EXPENSES. The Borrowers agree to pay the reasonable costs and
expenses of the Agents (including attorney's fees and expenses) in connection
with the preparation, execution and delivery of this Amendment.
4.4 GOVERNING LAW. This Amendment shall be a contract made under and
governed by the internal laws of the State of Minnesota applicable to
contracts made and to be performed entirely within such State.
4.5 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon the
Borrowers,
the Banks and the Agents and their respective successors and assigns, and
shall inure to the benefit of the Borrowers, the Banks and the Agents and the
respective successors and assigns of the Banks and the Agents.
Delivered at Minneapolis, Minnesota as of the day and year first
above written.
PENTAIR, INC., for itself, as guarantor
and as agent for the Borrowers
By: /s/ Xxxxxxx X. Xxxxxx
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Title: CFO
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PENTAIR CANADA, INC.
By: /s/ Xxx X. Xxxx
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Title: Secretary
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EUROPENTAIR GmbH
By: /s/ Xxx X. Xxxx
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Title: Drokurist
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BANK OF AMERICA, N.A.,
as U.S. Dollar Administrative Agent
By: /s/ Xxxx Xxxxxxx
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Title: Vice President
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U.S. BANK NATIONAL ASSOCIATION,
as Overnight Administrative Agent
By: /s/ Xxxx X. Xxxxx
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Title: Senior Vice President
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XXXXXX GUARANTY TRUST
COMPANY
OF NEW YORK, as G-7 Currency
Administrative
Agent
By: /s/ Xxxxxx Xxxxxxxxx
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Title: Vice President
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BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxx
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Title: Managing Director
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U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxx X. Xxxxx
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Title: Senior Vice President
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XXXXXX GUARANTY TRUST
COMPANY
OF NEW YORK
By: /s/ Xxxxxx Xxxxxxxxx
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Title: Vice President
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NBD BANK
By: /s/ Xxxx X. Xxxxx
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Title: Sr. Vice President
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THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
By: /s/ Xxxxxxx Xxxxxx
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Title: Vice President and Manager
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ABN AMRO BANK N.V., CHICAGO BRANCH
By: n/a
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Title:
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By: n/a
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Title:
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DRESDNER BANK AG CHICAGO
AND GRAND CAYMAN BRANCHES
By: n/a
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Title:
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By: n/a
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Title:
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