EXHIBIT 10.17
CONFORMED VERSION
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated as of December 26, 2001, is
entered into among AMTROL Holding Inc., a Delaware corporation ("HOLDING"),
AMTROL Inc., a Rhode Island corporation ("AMTROL"), Water Soft Inc., a Rhode
Island corporation ("WATER SOFT" and, together with AMTROL, each individually a
"BORROWER" and collectively the "BORROWERS"), and certain subsidiaries of the
Parent identified on the signature pages hereof as Guarantor (together with
Holdings each a "GUARANTOR" and collectively the "GUARANTORS").
W I T N E S S E T H :
WHEREAS, contemporaneously herewith, Borrowers, Guarantors, certain
lenders identified on the signature pages thereof (the "LENDERS"), and Foothill
Capital Corporation, a California corporation, as arranger and administrative
agent for the Lenders (in such capacity, together with its successors, if any,
in such capacity, the "AGENT", and together with the Lenders, collectively, the
"LENDER GROUP") are entering into that certain Loan and Security Agreement,
dated as of December 26, 2001 (as amended, restated, supplemented, or otherwise
modified from time to time, the "LOAN AGREEMENT");
WHEREAS, Borrowers are jointly and severally liable for the
repayment of the Obligations (as defined in the Loan Agreement) owing by
Borrowers to the Lender Group under the Loan Agreement and each of the other
Loan Documents (as defined in the Loan Agreement), and Guarantors have
guaranteed the repayment of such Obligations (Borrowers and Guarantors are
hereinafter referred to individually as an "OBLIGOR" and collectively as the
"OBLIGORS"); and
WHEREAS, in order to induce each member of the Lender Group to enter
into the Loan Agreement and to effect an equitable sharing of Obligors' risks
thereunder and to establish certain rights and obligations of contribution among
the Obligors with respect to the Secured Obligations (as defined below), each of
the Obligors wishes to enter into this Agreement.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. DEFINED TERMS. Any and all initially capitalized terms used
herein shall have the meanings ascribed thereto in the Loan Agreement, unless
specifically defined herein.
(a) The following terms, as used in this Agreement, shall
have the following meanings:
"AGENT" shall have the meaning set forth in the
recitals to this Agreement.
"AGREEMENT" shall mean this Contribution Agreement,
together with any and all future addition, alterations, amendments, changes,
extensions, modifications, renewals, substitutions, or supplements hereto or
hereof.
"BORROWER" and "BORROWERS" shall have the respective
meanings ascribed thereto in the recitals hereto.
"GUARANTOR" and "GUARANTORS" shall have the respective
meanings ascribed thereto in the recitals hereto.
"LENDER GROUP" shall have the meaning set forth in the
recitals to this Agreement.
"LENDERS" shall have the meaning set forth in the
recitals to this Agreement.
"LOAN AGREEMENT" shall have the meaning set forth in the
recitals hereto.
"NET WORTH" shall have the meaning ascribed thereto in
Section 2 hereof.
"OBLIGOR" and "OBLIGORS" shall have the respective
meanings ascribed thereto in the recitals hereto.
"PAYMENT PERCENTAGE" shall have the meaning ascribed
thereto in Section 2 hereof.
"SECURED OBLIGATIONS" shall mean all liabilities,
obligations, or undertakings owing by Obligors to the Lender Group of any kind
or description arising out of or outstanding under, advanced or issued pursuant
to, or evidenced by the Loan Agreement or any of the other Loan Documents
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest (including any
interest that, but for the provisions of the Bankruptcy Code would have accrued)
and any and all costs, fees (including attorneys fees), and expenses (including
any fees and expenses that, but for the provisions of the Bankruptcy Code would
have accrued) which Obligors are required to pay pursuant to any of the
foregoing, by law, or otherwise.
(b) Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular and to the singular
include the plural, the part includes the whole, the term "including" is not
limiting, and the term "or" has, except where otherwise indicated, the inclusive
meaning represented by the phrase "and/or." The words "hereof," "herein,"
"hereby," "hereunder," and other similar terms in this Agreement refer to this
Agreement as a whole and not exclusively to any particular provision of this
Agreement. Article, section, subsection, exhibits and schedule references are to
this Agreement unless otherwise specified. All of the exhibits or schedules
attached to this Agreement shall be deemed incorporated herein by reference.
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2. RIGHT OF CONTRIBUTION. If any Obligor makes a payment in respect of
the Secured Obligations that is less than its Payment Percentage (as calculated
below) of the Secured Obligations, then, upon indefeasible payment in full in
cash of the Secured Obligations, the Obligor making such proportionately smaller
payment shall pay to the other Obligors that amount which is necessary such that
the net payments made by all Obligors in respect of the Secured Obligations are
shared among Obligors pro rata according to their respective Payment
Percentages. If any Obligor receives any payment that is greater than its
Payment Percentage (as calculated below) of the Secured Obligations, then the
Obligor receiving such proportionately greater payment shall pay to the other
Obligors that amount which is necessary such that the payments received by all
Obligors shall be shared among all Obligors pro rata according to their
respective Payment Percentages.
Each Obligor's Payment Percentage shall be the percentage calculated by
dividing (a) the Net Worth of such Obligor by (b) the sum of the Net Worth of
all of the Obligors, which Payment Percentage is subject to redetermination or
adjustment as hereinafter set forth. Notwithstanding anything to the contrary
contained herein, (i) the Guarantors shall have no contribution obligations
under this Section 2 unless a Guarantor makes a payment in respect of the
Secured Obligations, and (ii) the Net Worth of each Guarantor shall be included
in the calculation of each Obligor's Payment Percentage only to the extent a
Guarantor makes a payment in respect of the Secured Obligations.
For purposes of the calculation (and any recalculation) of any particular
Obligor's Payment Percentage, such Obligor's "Net Worth" shall mean the amount,
calculated as of the date such Obligor became a signatory to this Agreement, by
which the sum of all of such Obligor's assets is greater than the sum of all of
such Obligor's debts, at fair valuations, and after giving effect to the
inclusion and exclusion of the matters included and excluded in determining
whether a debtor is insolvent according to Section 548 of Title 11 of the United
States Code; PROVIDED, HOWEVER, that for the purpose of determining the "Net
Worth" of any Obligor, no value shall be given to such Obligor's equity interest
in any other Obligor.
This Section 2 shall constitute a continuing offer to all Persons who, in
reliance upon such provisions, become holders of, or continue to hold, any of
the Secured Obligations, and such provisions are made for the benefit of the
holders of any of the Secured Obligations, and such holders are made obligees
hereunder and any of them may enforce the provisions of this Section 2.
3. RIGHT OF CONTRIBUTION CONSTITUTES AN ASSET. Each of the Obligors
hereto acknowledge that the right to contribution hereunder shall constitute an
asset of the Obligor to which such right is owing, but shall not be considered
part of such Obligor's "Net Worth" for the purposes of the calculation of such
Obligor's Payment Percentage pursuant to Section 2 hereof.
4. REPRESENTATIONS AND WARRANTIES. Each party hereto represents and
warrants to each other party hereto and to their respective successors and
assigns that:
(a) the execution, delivery, and performance by each party hereto
of this Agreement are within such party's powers, have been duly authorized by
all necessary action, require no action by or in respect of, or filing with, any
Governmental Authority and do
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not contravene or constitute a default under any provision of law or regulation
applicable to it or of the Governing Documents of such party or of any
agreement, judgment, injunction, order, decree, or other instrument binding upon
such party or result in the creation or imposition of any lien on any asset of
such party; and
(b) this Agreement constitutes the legal, valid and binding
agreement of each party hereto, enforceable against such party in accordance
with its terms, except as enforcement thereof may be affected by: (i)
bankruptcy, insolvency, reorganization, or other similar laws affecting
enforcement of creditors' rights generally; (ii) general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law) and (iii) the fact that rights to contribution thereunder may be limited by
federal or state securities laws.
5. NO WAIVERS; REMEDIES. No failure or delay by any Obligor in
exercising any right, power, or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies herein provided shall be cumulative and
non-exclusive of any rights or remedies provided by law. This Agreement shall
not limit any right which any Obligor may have against any other Person which is
not a party hereto.
6. AMENDMENTS. Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed by the
parties hereto and is made with the consent of the Lenders.
7. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
8. CHOICE OF LAW AND VENUE. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
EACH OBLIGOR AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT SHALL BE TRIED AND DETERMINED IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION LOCATED IN NEW YORK COUNTY IN THE STATE OF NEW YORK TO
THE MAXIMUM EXTENT PERMITTED BY LAW. EACH OBLIGOR HEREBY EXPRESSLY WAIVES ANY
RIGHT EACH MAY HAVE TO THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION.
9. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH
OBLIGOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION, CAUSE
OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS
AGREEMENT, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
DEALINGS OF OBLIGORS WITH RESPECT TO THIS AGREEMENT, OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE
OF WHETHER SOUNDING IN CONTRACT, TORT,
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OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OBLIGOR HEREBY AGREES
THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING SHALL BE
DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN EVIDENCE
OF THE CONSENT OF THE OTHER PARTY OR PARTIES TO THE WAIVER OF ITS RIGHT TO TRIAL
BY JURY.
10. HEADINGS. Headings used in this Agreement are for convenience of
reference only and shall neither constitute a part of this Agreement for any
other purpose nor affect the construction of this Agreement.
11. NO INCONSISTENT REQUIREMENTS. In the event of a direct conflict
between the terms and provisions contained in this Agreement and the terms and
provisions contained in the Loan Agreement, it is the intention of the parties
hereto that such terms and provisions in such documents shall be read together
and construed, to the fullest extent possible, to be in concert with each other.
In the event of any actual, irreconcilable conflict that cannot be resolved as
aforesaid, the terms and provisions of the Loan Agreement shall control and
govern.
12. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall constitute an original, and all of which,
taken together, shall constitute one agreement with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when a counterpart hereof shall have been signed by all
the parties hereto.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
as of the date first above written.
AMTROL INC.,
a Rhode Island corporation
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: Executive Vice President and C.F.O.
WATER SOFT INC.,
a Rhode Island corporation
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
Title: President
AMTROL HOLDINGS, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
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Title: Assistant Treasurer
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AMTROL INTERNATIONAL
INVESTMENTS INC.,
a Rhode Island corporation
By: /s/ Xxxxx X. Xxxxxxxxxxx
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Name: Xxxxx X. Xxxxxxxxxxx
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Title: President
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