Fourth AMENDMENT TO THE CREDIT AGREEMENT
FOURTH AMENDMENT, dated as of May 29, 2003 (this "Fourth
Amendment"), to the Credit Agreement, dated as of September 30, 1999 (as
amended, supplemented, or otherwise modified from time to time, the "Credit
Agreement"), among TENNECO AUTOMOTIVE INC., a Delaware corporation (the
"Borrower"), the several lenders from time to time parties thereto (the
"Lenders"), JPMORGAN CHASE BANK (formerly known as The Chase Manhattan Bank), a
New York banking corporation, as administrative agent for the Lenders (in such
capacity, the "Administrative Agent"), and the other financial institutions
named therein as agents for the Lenders (in such capacity, collectively, the
"Other Agents").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Administrative
Agent and the Other Agents are parties to the Credit Agreement;
WHEREAS, the Borrower has notified the Lenders of its
intention to issue its senior secured second lien notes from time to time (as
hereinafter further defined, the "Second Lien Notes");
WHEREAS, the Borrower has requested that the Lenders amend the
Credit Agreement as set forth herein;
WHEREAS, the Lenders, the Administrative Agent and the Other
Agents are willing to agree to such amendment to the Credit Agreement, subject
to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the Borrower, the Lenders, the Administrative Agent
and the Other Agents hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms which are defined in the Credit Agreement are used herein as therein
defined.
2. Amendments to Credit Agreement. (a) Section 1.1 of the
Credit Agreement is amended as follows:
(i) by deleting the definition of "Excess Cash Flow" and
substituting therefor the following:
"Excess Cash Flow": for any fiscal year of the
Borrower, the excess, if any, of (a) the sum, without duplication, of
(i) Consolidated Net Income for such fiscal year, (ii) an amount equal
to the amount of all non-cash charges (including depreciation and
amortization) deducted in arriving at such Consolidated Net Income,
(iii) decreases in Consolidated Working Capital for such fiscal year,
(iv) an amount equal to the aggregate net non-cash loss on the
Disposition of property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course
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of business), to the extent deducted in arriving at such Consolidated
Net Income, (v) an amount equal to the aggregate net increase in
Consolidated Working Capital attributable to foreign currency
translation adjustments of the Borrower and its Subsidiaries during
such fiscal year, (vi) an amount equal to the aggregate net non-cash
increase in Consolidated Working Capital of the Borrower and its
Subsidiaries during such fiscal year, and (vii) an amount equal to the
non-cash, non-current deferred income tax expense deducted in arriving
at Consolidated Net Income, over (b) the sum, without duplication, of
(i) an amount equal to the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount
actually paid by the Borrower and its Subsidiaries in cash during such
fiscal year on account of Capital Expenditures (excluding the principal
amount of Indebtedness incurred in connection with such expenditures,
any such expenditures financed with the proceeds of any Reinvestment
Deferred Amount and any Capital Expenditures with respect to which the
Borrower delivered a certificate pursuant to the immediately following
clause (iii) in connection with the calculation of Excess Cash Flow for
the last fiscal year), (iii) the aggregate amount of Capital
Expenditures that the Borrower or any of its Subsidiaries became
obligated to make but that are not made during such fiscal year,
provided that the Borrower shall deliver a certificate to the
Administrative Agent not later than 90 days after the end of such
fiscal year, signed by a Responsible Officer of the Borrower and
certifying that such Capital Expenditure will be made in the following
fiscal year and the aggregate amount of all such Capital Expenditures
shall not exceed the limitations set forth in Section 7.7 for such
fiscal year, (iv) the net amount of all prepayments of Revolving Loans
and Swingline Loans and other revolving credit facilities during such
fiscal year and all optional prepayments of the Term Loans during such
fiscal year, (v) the aggregate amount of all regularly scheduled
principal payments of Funded Debt (including the Term Loans) of the
Borrower and its Subsidiaries made during such fiscal year, (vi)
increases in Consolidated Working Capital for such fiscal year, (vii)
an amount equal to the aggregate net cash gains on the Disposition of
property by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business) to
the extent included in arriving at such Consolidated Net Income, (viii)
an amount equal to Investments permitted by Section 7.8 made by the
Borrower and its Subsidiaries during such fiscal year, (ix) an amount
equal to the aggregate net cash gains on the Disposition of property by
the Borrower and its Subsidiaries consisting of Asset Sales the Net
Cash Proceeds of which are required to be applied during such fiscal
year to the prepayment of Term Loans pursuant to Section 2.11, (x) an
amount equal to the aggregate net decrease in Consolidated Working
Capital attributable to foreign currency translation adjustments of the
Borrower and its Subsidiaries during such fiscal year, (xi) an amount
equal to the aggregate net non-cash decrease in Consolidated Working
Capital of the Borrower and its Subsidiaries during such fiscal year
and (xii) an amount equal to non-cash, non-current deferred income tax
benefit included in arriving at Consolidated Net Income.
(ii) by adding the phrase ", the Intercreditor
Agreement" immediately after the phase "Security Documents" in
the definition of "Loan Documents"; and
(iii) adding the following defined terms in proper
alphabetical order:
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"First Priority Claims": as defined in the
Intercreditor Agreement.
"Fourth Amendment Effective Date": the Effective
Date, as defined in the Fourth Amendment dated as of May 29,
2003 to this Agreement.
"Intercreditor Agreement": the Intercreditor
Agreement, dated as of the Fourth Amendment Effective Date,
entered into among the collateral agent for the Second Lien
Note Holders, the Administrative Agent and the Borrower as the
same may be amended, supplemented or otherwise modified from
time to time.
"Permitted Second Lien Notes Refinancings": as
defined in Section 7.2
"Second Lien Note Holders": holders of the Second
Lien Notes from time to time.
"Second Lien Note Indenture": the Indenture, dated as
of the Fourth Amendment Effective Date, entered into by the
Borrower and certain of its Subsidiaries in connection with
the issuance of the Second Lien Notes together with all
instruments and other agreements entered into by the Borrower
or such Subsidiaries in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to
time.
"Second Lien Notes": the senior secured notes of the
Borrower to be issued in one or more series pursuant to the
Second Lien Note Indenture.
"Second Priority Claims": as defined in the
Intercreditor Agreement.
"Second Priority Collateral Documents": as defined in
the Intercreditor Agreement.
(b) Section 2.11 of the Credit Agreement is amended by adding the
following paragraph at the end thereof:
(f) Notwithstanding any other provisions of the Loan
Documents to the contrary, Net Cash Proceeds of the issuance
of the Second Lien Notes shall be applied as follows: (i) with
respect to the Second Lien Notes issued on the Fourth
Amendment Effective Date, (A) first, such Net Cash Proceeds
will be applied to prepay $199,100,000 (or, if such Net Cash
Proceeds are less than $199,100,000, such lesser amount of Net
Cash Proceeds) of the Tranche A Term Loans in direct order of
maturity; (B) second, following the payment described in
clause (i)(A), an amount up to the next $52,200,000, if any,
of such Net Cash Proceeds will be applied to prepay the
Tranche B Term Loans and the Tranche C Term Loans on a pro
rata basis, in direct order of maturity; (C) third, following
the payments in clauses (i)(A) and (i)(B), an amount up to
next $100,000,000 if any, of such Net Cash Proceeds, will be
applied to prepay outstanding Revolving Loans; and (D) fourth,
following the payments in clauses (i)(A), (i)(B) and (i)(C),
the balance of such Net Cash Proceeds, if any, will be applied
in accordance with this Agreement as if such Net Cash Proceeds
resulted in a mandatory prepayment
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pursuant to Section 2.11(a); and (ii) with respect to all
other Second Lien Notes, such Net Cash Proceeds will be
applied in accordance with this Agreement as if such Net Cash
Proceeds resulted in a mandatory prepayment pursuant to
Section 2.11(a).
(c) Section 2 of the Credit Agreement is amended by adding the
following at the end thereof:
2.23 Intercreditor Agreement. The Lenders (a) authorize the
Administrative Agent to execute, deliver and perform the Intercreditor
Agreement on their behalf, and (b) acknowledge that certain items of
the Collateral will from time to time be made subject to a Lien to
secure the Second Lien Notes and certain related obligations, subject
to the terms of the Intercreditor Agreement.
(d) Section 4.19(a) of the Credit Agreement is amended by adding after
the phrase "and the proceeds thereof" which appears in the second sentence the
phrase "to the extent a security interest can be perfected by filings or other
action required thereunder".
(e) Section 4 of the Credit Agreement is amended by adding the
following at the end thereof:
4.24 First Priority Claims. The Borrower Obligations and the Guarantor
Obligations (as such terms are defined in the Guarantee and Collateral
Agreement) constitute First Priority Claims (as defined in the
Intercreditor Agreement and the Second Lien Note Indenture), and the
Liens on the Collateral securing the Borrower Obligations and the
Guarantor Obligations constitute First Priority Liens (as defined in
the Second Lien Note Indenture).
(f) Section 6.10 of the Credit Agreement is amended by adding the
following paragraphs at the end thereof:
(e) Not permit any Subsidiary to guarantee payment of
any of the Second Priority Claims unless and until such
Subsidiary has guaranteed payment of the First Priority Claims
pursuant to the Guarantee and Collateral Agreement.
(f) Except as required by the terms of the Indenture
or the Second Priority Collateral Documents, prior to taking
any action to create or perfect any Lien on any Collateral
securing the Second Priority Claims provide the Administrative
Agent at least five Business Days prior notice of such action,
and promptly following the taking of any action to create or
perfect any Lien on any Collateral securing the Second
Priority Claims notify the Administrative Agent in writing of
such action; provided that no such notice of the type
described in this paragraph (f) shall be required during the
first 60 days following the Fourth Amendment Effective Date.
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(g) Upon request of the Administrative Agent from
time to time promptly provide the Administrative Agent with
information regarding any property of the Borrower and its
Subsidiaries which secures or purports to secure any Second
Priority Claims and the actions taken to create or perfect the
applicable Liens, to the extent such information is reasonably
available to the Borrower or its Subsidiaries and is not
subject to any legal or similar privilege.
(g) Section 7.2 of the Credit Agreement is amended by adding after the
phrase "Hedge Agreements" in clause (g) the phrase "(including Guarantee
Obligations of the Loan Parties in respect of Hedge Agreements entered into by
Tenneco Management (Europe) Limited or any Subsidiary that succeeds Tenneco
Management (Europe) Limited in the performance of international treasury
management functions)".
(h) Section 7.2 of the Credit Agreement is amended by (i) deleting the
word "and" from the end of clause (j), (ii) deleting the period at the end of
clause (k) and substituting therefor the phrase "; and" and (iii) adding the
following new clause at the end thereof:
(l) (i) Indebtedness of the Borrower in respect of the Second
Lien Notes and any refinancings, refundings, renewals or extensions
thereof on terms and conditions no more restrictive to the Borrower and
its Subsidiaries unless approved by the Administrative Agent
("Permitted Second Lien Notes Refinancing"), provided, that (A) the
Borrower shall not, in any case, increase, or shorten the maturity of,
the principal amount thereof, or make any payment which effectively
reduces the outstanding principal amount thereof and (B) the Borrower's
and the Subsidiary Guarantors' obligations under the Permitted Second
Lien Notes Refinancing shall constitute Second Priority Claims, and any
collateral security therefor shall be subordinated to collateral
securing the First Priority Claims, as set forth in the Intercreditor
Agreement, and (ii) Guarantee Obligations of any Subsidiary Guarantor
in respect of such Indebtedness.
(i) Section 7.3 of the Credit Agreement is amended by (i) deleting the
word "and" from the end of clause (n), (ii) deleting the period at the end of
clause (o) and substituting therefor the phrase "; and" and (iii) adding the
following new clause at the end thereof:
(p) Liens on the Collateral securing Indebtedness of the
Borrower or any Subsidiary incurred pursuant to Section 7.2(l),
provided that such Liens are, at all times prior to repayment in full
in cash of the Obligations and termination of the Revolving
Commitments, subordinate to Liens created under the Loan Documents
securing the First Priority Claims pursuant to the terms of the
Intercreditor Agreement.
(j) Section 7.5 of the Credit Agreement is amended by (i) adding in
clause (g) after the phrase "(a)-(f) above" the phrase "or (h)-(m) below", (ii)
deleting the word "and" from the end of clause (j), (iii) deleting the period at
the end of clause (k) and substituting therefor a semi-colon and (iv) adding the
following at the end thereof:
(l) Tenneco International Holding Corp. ("TIHC") may transfer
or contribute ownership of Tenneco Holdings Denmark to Tenneco
Automotive Iberica; and
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(m) the Disposition of property as an Investment made pursuant
to Section 7.8(h) in any Joint Venture or in any Person who, prior to
the Investment, is not a Subsidiary and who becomes, as a result of the
Investment, a Subsidiary that is not a Wholly-Owned Subsidiary.
(k) Section 7.7 of the Credit Agreement is amended by inserting after
the phrase "Joint Ventures" the phrase "and in any Person who, prior to the
Investment, is not a Subsidiary and who becomes, as a result of the Investment,
a Subsidiary that is not a Wholly-Owned Subsidiary".
(l) Section 7.8(h) of the Credit Agreement is amended by inserting
after the phrase "Joint Ventures" the phrase "and in any Person who, prior to
the Investment, is not a Subsidiary and who becomes, as a result of the
Investment, a Subsidiary that is not a Wholly-Owned Subsidiary".
(m) Section 7.9 of the Credit Agreement is amended by deleting the last
sentence thereof and substituting therefor the following:
Notwithstanding the foregoing or anything in Section 7.16, the Borrower
may purchase and cancel or redeem its Senior Subordinated Notes and
Second Lien Notes in connection with an exchange of such Notes for
shares of common stock issued by the Borrower after the Fourth
Amendment Effective Date.
(n) Section 7 of the Credit Agreement is amended by adding the
following at the end thereof:
7.16 Optional Payments and Modifications of Second Lien Notes.
(a) Except for Permitted Second Lien Notes Refinancings, make or offer
to make any optional or voluntary payment, prepayment, repurchase or
redemption of or otherwise optionally or voluntarily defease or
segregate funds with respect to the Second Lien Notes, or (b) amend,
modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of
the Second Lien Notes or the Second Lien Note Indenture (other than any
such amendment, modification, waiver or other change that (i) (A) would
extend the maturity or reduce the amount of any payment of principal
thereof or reduce the rate or extend any date for payment of interest
thereon and (B) does not involve the payment of a consent fee or (ii)
is not adverse to the holders of the First Priority Claims).
(o) Section 8 of the Credit Agreement is amended by adding in paragraph
(e) the phrase "or the Second Lien Note Indenture" immediately after the phrase
"Senior Subordinated Note Indenture".
(p) Section 8 of the Credit Agreement is amended by (i) deleting the
word "or" after clause (k), (ii) adding the word "or" at the end of clause (l),
and (iii) adding the following paragraph immediately after paragraph (l):
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(m) any Lien securing or purporting to secure the Second
Priority Claims shall cease, for any reason, to be subordinated to the
Lien created under the Loan Documents securing or purporting to secure
the First Priority Claims, as provided in the Intercreditor Agreement,
or any Loan Party, any Affiliate of any Loan Party, the trustee in
respect of the Second Lien Notes or the holders of at least 25% in
aggregate principal amount of the Second Lien Notes shall so assert; or
the Borrower or any of its Subsidiaries shall make any payment,
prepayment, repurchase or redemption of or on the Second Lien Notes
other than scheduled payments of interest or pursuant to a Permitted
Second Lien Notes Refinancing;
3. Representations and Warranties. The Borrower hereby
confirms that the representations and warranties set forth in Section 4 of the
Credit Agreement, as amended by this Fourth Amendment, are true and correct in
all material respects as if made as of the Fourth Amendment Effective Date
(except such representations and warranties as are made as of a particular date,
which such representations and warranties shall be true and correct in all
material respects as if made as of such date). The Borrower represents and
warrants that, after giving effect to this Fourth Amendment, no Default or Event
of Default has occurred and is continuing.
4. Effectiveness. This Fourth Amendment shall become effective
as of the date of receipt by the Administrative Agent of (a) counterparts of
this Fourth Amendment executed by the Borrower, the Required Lenders and the
Majority Facility Lenders under each of the Tranche A Term Facility, the Tranche
B Term Facility and the Tranche C Term Facility and (b) payment for all fees
required to be paid and all expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel) (the "Effective
Date").
5. Amendment of Security Documents. The Lenders authorize the
Administrative Agent to enter into amendments to and supplements of the Security
Documents (in forms reasonably satisfactory to the Administrative Agent) in
order to (a) allow (i) Hedge Agreements entered into by Tenneco Management
(Europe) Limited or any Subsidiary that succeeds Tenneco Management (Europe)
Limited in the performance of international treasury management functions with
any Lender or affiliate of a Lender and (ii) cash management obligations owed by
Tenneco or its subsidiaries to Lenders and their affiliates to be secured by the
Collateral and guaranteed pursuant to the Security Documents, (b) update the
Security Documents for changes in law, including changes in the Uniform
Commercial Code, (c) add additional Collateral thereunder and (d) effect other
similar changes. In furtherance of the foregoing, the parties hereto agree that,
upon or following the effectiveness of this Fourth Amendment, the Guarantee and
Collateral Agreement (including the schedules and annexes thereto) may be
amended, amended and restated, or otherwise modified as the Borrower and the
Administrative Agent shall agree from time to time for the purposes of (i)
updating the terms of the Guarantee and Collateral Agreement to conform to
changes in law, including revisions to Article 9 of the Uniform Commercial Code,
(ii) refining the representations, warranties and covenants contained therein
with respect to the description of and perfection of security interests in
foreign and ancillary intellectual property collateral and (iii) conforming the
representation in Section 4.2 thereof in a manner consistent with the
representation set forth in Section 4.19(a) of the Credit Agreement, as amended
by this Fourth Amendment.
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6. Continuing Effect of the Credit Agreement. This Fourth
Amendment shall not constitute an amendment of any provision of the Credit
Agreement not expressly referred to herein and shall not be construed as a
waiver or consent to any further or future action on the part of the Borrower
that would require a waiver or consent of the Lenders, the Administrative Agent
or the Other Agents. Except as expressly amended hereby, the provisions of the
Credit Agreement are and shall remain in full force and effect. Sections 2(d)
and 5 of this Fourth Amendment shall be deemed to be in effect for all
applicable periods prior to the Effective Date.
7. Counterparts. This Fourth Amendment may be executed by the
parties hereto in any number of separate counterparts (including telecopied
counterparts), each of which shall be deemed to be an original, and all of which
taken together shall be deemed to constitute one and the same instrument.
8. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
TENNECO AUTOMOTIVE INC.
By:
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Name:
Title:
JPMORGAN CHASE BANK, as
Administrative Agent and as a Lender
By:
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Name:
Title:
CITICORP USA, INC., as Syndication
Agent and as a Lender
By:
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Name:
Title:
FOURTH AMENDMENT dated as of May 29,
2003 to the Tenneco Automotive Inc.
Credit Agreement dated as of
September 30, 1999
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[LENDER]
By:
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Name:
Title:
Each of the undersigned agrees to the
foregoing Fourth Amendment and confirms
that its obligations under the Loan Documents
to which it is a party remain in full force
and effect after giving effect to such Fourth
Amendment:
TENNECO AUTOMOTIVE OPERATING COMPANY INC.
TENNECO INTERNATIONAL HOLDING CORP.
TENNECO GLOBAL HOLDINGS INC.
THE PULLMAN COMPANY
TMC TEXAS INC.
CLEVITE INDUSTRIES INC.
By:
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Name:
Title:
