THIRD AMENDMENT (this "Amendment") dated as of August 7, 1998 to
the Amended and Restated Credit Agreement dated as of January 31, 1997
(as amended, the "Credit Agreement"; capitalized terms used and not
otherwise defined herein shall have the meanings assigned to them in
the Credit Agreement), among American Standard Companies Inc.
("Holding"); American Standard Inc. ("ASI"); the Subsidiaries of ASI
listed in Schedule I thereto (the "Subsidiary Borrowers" and, together
with ASI, the "Borrowers"); the financial institutions party thereto
(the "Lenders"); The Chase Manhattan Bank, as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"); Citibank,
N.A., as Documentation Agent (the "Documentation Agent"); and The Bank
of Nova Scotia and Nationsbank, N.A., as Co-Syndication Agents (the
"Co-Syndication Agents" and, together with the Documentation Agent and
the Administrative Agent, the "Agents").
ASI, Holding and the Subsidiary Borrowers have requested that the Credit
Agreement be amended in order to (a) modify the calculations of permitted
charges in connection with programs to establish low cost sourcing by shifting
production to low cost countries, (b) permit Holding to finance the repurchase
of an additional $300,000,000 of shares of its common stock, (c) identify
additional countries for which the sale or discount of receivables by
Subsidiaries is not subject to basket limitations, (d) in the event ASI effects
covenant defeasance of its 10-7/8% Senior Notes, exclude from the definitions of
Consolidated Total Debt and Consolidated Interest Expense, respectively, the (i)
principal amount of the 10-7/8% Senior Notes and (ii) interest on the 10-7/8%
Senior Notes less the accreted earnings attributable to the instruments used to
effect the covenant defeasance of the 10-7/8% Senior Notes, (e) permit Holding
to form or recapitalize special purpose subsidiaries to acquire shares of
corporations owning sales offices in share exchange transactions and (f) permit
ASI to sell certain assets related to distribution of its European plumbing
products for consideration in an aggregate amount not in excess of $50,000,000
without the further consent of the Required Lenders. The Lenders and the Agents
have agreed to such amendments upon the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I. AMENDMENT
SECTION 1.01. Amendment of Section 1.01. Section 1.01 of the Credit
Agreement is hereby amended by amending the definitions of "Consolidated
Interest Expense", "Consolidated Total Debt" and "Special Charges" as described
below:
(a) the definition of "Consolidated Interest Expense" is hereby amended by
inserting the following sentence at the end of such definition:
"Notwithstanding the foregoing, in the event ASI shall effect the
"covenant defeasance option" provided for in Section 8.01(b) of the Senior
Indenture relating to the 10-7/8% Senior Notes, for so long as the 10-7/8%
Senior Notes remain outstanding, there shall be excluded from Consolidated
Interest Expense the amount of interest expense attributable to the 10-7/8%
Senior Notes less the amount of income attributable to the "U.S. Government
Obligations" (as such term is defined in the Senior Indenture relating to
the 10-7/8% Senior Notes) that are deposited by ASI with the trustee under
such Senior Indenture to effect the "covenant defeasance option" provided
for in Section 8.01(b) of such Senior Indenture."
(b) the definition of "Consolidated Total Debt" is hereby amended by
inserting the following sentence at the end of such definition:
"Notwithstanding the foregoing, in the event ASI shall effect the
"covenant defeasance option" provided for in Section 8.01(b) of the Senior
Indenture relating to the 10-7/8% Senior Notes, for so long as the 10-7/8%
Senior Notes remain outstanding, there shall be excluded from Consolidated
Total Debt the outstanding principal amount of the 10-7/8% Senior Notes."
(c) the definition of "Special Charges" is hereby amended to read in its
entirety as follows:
"Special Charges" shall mean any charges incurred in 1997, 1998, 1999 and
2000 in an aggregate amount not to exceed $150,000,000, as reflected in ASI's
financial statements delivered pursuant to paragraphs (a) and (b) of Section
5.01, related to programs to relocate production capabilities to low-cost
sourcing facilities."
SECTION 1.02. Amendment of Section 3.04(a). Section 3.04(a) of the Credit
Agreement is hereby amended by amending clause (C) thereof to read in its
entirety as follows:
"(C) to finance the repurchase by Holding (y) in an aggregate amount not to
exceed $308,000,000 of shares of its common stock and (z) in an additional
aggregate amount not to exceed $300,000,000 of shares of its common stock;
provided that the aggregate amount of repurchases by Holding pursuant to clause
(z) shall not exceed $100,000,000 in each consecutive 12-month period commencing
on July 9, 1998.
SECTION 1.03. Amendment of Section 6.02(a)(ii). Section 6.02(a)(ii) of the
Credit Agreement is hereby amended by amending clause (1) thereof by adding the
following proviso immediately following the word "Lenders" in the sixth line of
Section 6.02(a)(ii):
"provided, that during the period commencing on August 7, 1998 and ending
on June 1, 1999 and subject to the requirement that the written approval of the
Required Lenders shall have been obtained for transfers for consideration in
excess of $50,000,000 in the aggregate during any fiscal year of ASI, ASI or any
Subsidiary may transfer assets of its European plumbing distribution businesses
for consideration in an amount not to exceed $50,000,000 in the aggregate
without obtaining the written approval of the Required Lenders".
SECTION 1.04. Amendment of Section 6.02(a)(iv). Section 6.02(a)(iv) of the
Credit Agreement is hereby amended by amending paragraph (B) thereof by
replacing the reference to "or Spain" appearing in the last line of such
paragraph (B) with ", Spain, Australia, the Peoples Republic of China,
Indonesia, Japan, Malaysia, Phillippines, Singapore, South Korea, Taiwan,
Thailand or Vietnam".
SECTION 1.05. Amendment of Article VI Paragraph B. Paragraph B. of Article
VI of the Credit Agreement is hereby amended by inserting the following sentence
at the end of such paragraph:
"Notwithstanding the foregoing, Holding shall be permitted (a) to form
direct, wholly owned subsidiaries, the sole purpose of which shall be to
acquire from third parties 100% of the shares of capital stock of
corporations owning sales offices engaged in the sale of ASI's Trane air
conditioning products (the "Sales Offices Corporations") or (b) to
recapitalize direct subsidiaries of ASI, the sole purpose of which shall be
to merge with Sales Offices Corporations such that Holding shall own at
least 80% of the capital stock of such subsidiaries; provided, that in no
event (i) shall the total number of subsidiaries formed or recapitalized
pursuant to clauses (a) or (b) exceed three and (ii) shall the aggregate
contributed equity capital of all such subsidiaries exceed $50,000,000."
ARTICLE II. REPRESENTATIONS AND WARRANTIES
Each of Holding, ASI and the other Borrowers hereby represents and warrants
(but, in the case of representations and warranties relating to Credit Parties
and their Subsidiaries, only as to itself and its Subsidiaries, it being
understood that Holding and ASI make all representations and warranties as to
all parties) to each Lender and the Administrative Agent that this Amendment (a)
has been duly authorized, executed and delivered by Holding, ASI and each other
Borrower or Credit Party and constitutes the legal, valid and binding obligation
of each such person enforceable against it in accordance with its terms, except
as enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforceability
of creditors' rights generally and by general principles of equity, and (b) will
not conflict in any respect material to the rights or interests of the Lenders
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute (with notice or lapse of time or both) a default
under, or result in a required prepayment of, or (other than as permitted by the
Credit Agreement as amended hereby or as contemplated by the Security Documents)
result in the creation or imposition of (or the obligation to create or impose)
any Lien upon any of the properties or assets of any Credit Party or any of its
Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust,
agreement or other instrument to which any Credit Party is a party or by which
it may be subject.
ARTICLE III. EFFECTIVENESS
SECTION 3.01. Effectiveness. This Amendment shall become effective when the
following conditions precedent shall have been satisfied:
(a) the Administrative Agent shall have received, on behalf of the Lenders,
an Officer's Certificate of ASI, dated the date of this Amendment, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01 of the Credit Agreement insofar as such conditions precedent relate
to ASI and its subsidiaries;
(b) all legal matters incidental to this Amendment shall be satisfactory to
the Administrative Agent and to Cravath, Swaine & Xxxxx, counsel for the
Administrative Agent; and
(c) the signature lines at the foot of this Amendment shall have been
executed by Lenders sufficient to effect this Amendment under the terms of the
Credit Agreement.
ARTICLE IV. MISCELLANEOUS
SECTION 4.01. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 4.02. Expenses. ASI shall pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent in connection with the preparation,
negotiation, execution, delivery and enforcement of this Amendment, including,
but not limited to, the reasonable fees, charges and disbursements of Cravath,
Swaine & Xxxxx, counsel for the Administrative Agent. The agreement set forth in
this Section 4.02 shall survive the termination of the Credit Agreement.
SECTION 4.03. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers, all as of the
date first above written.
AMERICAN STANDARD COMPANIES INC.,
by
Name:
Title:
AMERICAN STANDARD INC.,
by
Name:
Title:
AMERICAN STANDARD CREDIT INC.,
by
Name:
Title:
WABCO STANDARD GMBH,
by
Name:
Title:
AMERICAN STANDARD (UK) CO.,
by
Name:
Title:
STANDARD EUROPE, a European Economic
Interest Grouping,
by
Name:
Title:
WABCO STANDARD TRANE INC.,
by
Name:
Title:
WABCO STANDARD TRANE B.V.,
by
Name:
Title:
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent,
by
Name:
Title:
CITIBANK, N.A., individually and as
Documentation Agent,
by
Name:
Title:
THE BANK OF NOVA SCOTIA, individually
and as Co-Syndication Agent,
by
Name:
Title:
NATIONSBANK, N.A., individually and as
Co-Syndication Agent,
by
Name:
Title:
BANKERS TRUST COMPANY,
by
Name:
Title:
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS BRANCH,
by
Name:
Title:
by
Name:
Title:
THE BANK OF NEW YORK,
by
Name:
Title:
BANQUE PARIBAS,
by
Name:
Title:
by
Name:
Title:
CIBC INC.,
by
Name:
Title:
COMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE,
by
Name:
Title:
by
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
by
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY,
by
Name:
Title:
THE LONG TERM CREDIT BANK OF JAPAN, LIMITED,
by
Name:
Title:
THE SANWA BANK LIMITED, NEW YORK BRANCH,
by
Name:
Title:
THE SUMITOMO BANK, LTD.,
by
Name:
Title:
THE TORONTO-DOMINION BANK,
by
Name:
Title:
ABN AMRO BANK N.V., NEW YORK BRANCH,
by
Name:
Title:
by
Name:
Title:
ALLIED IRISH BANK plc, CAYMAN ISLANDS BRANCH,
by
Name:
Title:
by
Name:
Title:
ARAB BANKING CORPORATION,
by
Name:
Title:
BANCA COMMERCIALE ITALIANA, NEW YORK BRANCH,
by
Name:
Title:
by
Name:
Title:
BANK OF AMERICA ILLINOIS,
by
Name:
Title:
BANK OF IRELAND,
by
Name:
Title:
BANK OF MONTREAL,
by
Name:
Title:
BANK OF SCOTLAND,
by
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD., NEW YORK BRANCH,
by
Name:
Title:
CREDIT AGRICOLE,
by
Name:
Title:
CREDITO ITALIANO, SpA,
by
Name:
Title:
by
Name:
Title:
FLEET NATIONAL BANK,
by
Name:
Title:
LLOYDS BANK, PLC,
by
Name:
Title:
by
Name:
Title:
XXXXXX BANK LTD.,
by
Name:
Title:
by
Name:
Title:
THE MITSUBISHI TRUST AND BANKING CORPORATION,
by
Name:
Title:
THE MITSUI TRUST AND BANKING COMPANY, LTD.,
by
Name:
Title:
NATIONAL CITY BANK,
by
Name:
Title:
THE ROYAL BANK OF SCOTLAND plc,
by
Name:
Title:
THE SAKURA BANK, LIMITED,
by
Name:
Title:
SOCIETE GENERALE, NEW YORK BRANCH,
by
Name:
Title:
STANDARD CHARTERED BANK,
by
Name:
Title:
by
Name:
Title:
THE SUMITOMO TRUST AND BANKING CO., LTD., NEW YORK BRANCH,
by
Name:
Title:
THE TOKAI BANK, LIMITED, NEW YORK BRANCH,
by
Name:
Title:
UNITED STATES NATIONAL BANK OF OREGON,
by
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.,
by
Name:
Title:
BAYERISCHE VEREINSBANK AG,
by
Name:
Title:
DAI-ICHI KANGYO BANK, LIMITED,
by
Name:
Title:
FIRST UNION NATIONAL BANK,
by
Name:
Title:
FUJI BANK LIMITED,
by
Name:
Title:
TOYO TRUST & BANKING CO., LTD.,
by
Name:
Title:
NATEXIS BANQUE BFCE,
by
Name:
Title:
