Exhibit 10.36
EXECUTION COPY
FIFTEENTH AMENDMENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTEENTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT (the "AGREEMENT") is being executed and delivered as of October 1,
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
Final Maturity 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,
and effective as of the date hereof, 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 the definitions of
"FINAL MATURITY DATE," "NET PROCEEDS," "NET WORTH," "STRATEGIC MILESTONES" and
"SUBORDINATED DEBT" and to replace such definitions with the following
definition:
"FINAL MATURITY DATE" means October 1, 2003.
"NET PROCEEDS" means proceeds in cash, checks or
other cash equivalent financial instruments (including Cash
Equivalents) as and when received by the Person (a) in connection with
the consummation of a Disposition, net of (i) the direct costs
relating to the consummation of such Disposition (excluding amounts
payable to the Company or any Affiliate of the Company), (ii) sale, use
or other transaction taxes paid or payable as a result of the
consummation thereof, and (iii) amounts required to be applied to repay
principal, interest and prepayment premiums and penalties on
Indebtedness secured by a Lien on the assets which are the subject of
such Disposition to the extent such Indebtedness and Lien is not
prohibited by this Agreement; and (b) in connection with the collection
of proceeds with respect to a Disposition after the consummation
thereof (whether as a result of the release of funds to the Company or
any of its Subsidiaries from an escrow, as a result of earnout
payments, or otherwise), or the collection of proceeds of an income tax
refund, net of the direct costs incurred in connection with the
realization or collection of such proceeds.
"NET WORTH" means (a) the consolidated shareholders'
equity of the Company and its Subsidiaries as determined in accordance
with GAAP, PLUS (b) the amount of non-cash charges incurred with
respect to the Company's write down of goodwill after August 31, 2002,
PLUS (c) the amount of non-cash foreign exchange translation charges
incurred after August 31, 2002 and attributable to the Company's UK
operations and PLUS (d) up to $3,000,000 of unfunded pension
liabilities incurred as liabilities or charged against income after
August 31, 2002 and otherwise resulting in a reduction to consolidated
shareholders' equity.
"STRATEGIC MILESTONES" means each of the following:
(a) on or before January 1, 2003, the Company shall have caused the UK
Financing to be consummated, shall have received not less than
$1,000,000 of Net Proceeds or Net Issuance Proceeds from such
transaction, as the case may be, and shall have applied such proceeds
in accordance with Section 2.09 hereof, (b) on or before June 30, 2003,
the board of directors of the Company shall have approved a reasonably
feasible plan to repay the Obligations in cash or other immediately
available funds on or prior to the Final Maturity Date, and the Company
shall have presented such plan to the Agent and the Banks, on or before
June 30, 2003, (c) on or before July 31, 2003, the Company shall have
commenced diligent and reasonable efforts to refinance the Obligations
in cash or other immediately available funds, or to sell substantially
all of the Company's businesses, and (d) on or before August 31, 2003,
the Company shall have provided the Agent and the Banks with reasonable
evidence that it has achieved material progress in its efforts to
refinance the Obligations in cash or other immediately available funds,
or to sell substantially all of the Company's businesses.
"SUBORDINATED DEBT" means Indebtedness permitted to
be incurred by the Company pursuant to clauses (g), (i), (l) and (n) of
Section 8.05.
(b) SECTION 1.01 is further amended to add the following new
definitions in their respective alphabetical locations:
"FIFTEENTH AMENDMENT" means the Fifteenth Amendment
to this Agreement dated as of October 1, 2002.
2
"FIFTEENTH AMENDMENT EFFECTIVENESS DATE" means the
date upon which the Agent advised the Company that the Fifteenth
Amendment has become effective.
"UK FINANCING" means a factoring or secured financing
arrangement entered into by Sutcliffe Xxxxxxxx Ltd. involving the sale
or encumbrance of its accounts receivable and related rights having a
net book value not greater than $2,000,000 (in Dollar equivalents),
subject to terms and provisions approved in writing by the Agent.
(c) SECTION 1.01 is further amended to delete the reference to "San
Francisco, California" in the definition of "BASE RATE" set forth in such
section and to replace such reference with a reference to "Charlotte, North
Carolina."
(d) SECTION 1.01 is further amended to delete in its entirety the
language "in excess of $465,000" which appears at the end of the definition of
"COLLATERAL VALUE TO DEBT RATIO".
(e) SECTION 1.01 is further amended to add the following provision to
the end of the definition of "EXCESS CASH FLOW:"
; and MINUS (e) all advance payments or deposits received by the
Company and its Subsidiaries in connection with a customer order or
contract to the extent such payments or deposits exceed the cost of
materials ordered in connection with said order or contract.
(f) SECTION 1.01 is further amended to delete in its entirety the
definition of "SOLVENT".
(g) SECTION 2.03(a) is amended to delete CLAUSE (i) thereof (the second
CLAUSE (i) of such section) in its entirety and to replace such clause with the
reference: "[intentionally omitted]."
(h) SECTION 2.05(a) is amended to delete the reference therein to
"Swing Line Termination Date" and to replace such reference with a reference to
"Fourteenth Amendment Effective Date."
(i) SECTION 2.09(b) is deleted in its entirety and replaced with the
following provision:
(b) ASSET DISPOSITION PROCEEDS; TAX REFUNDS; ORDER OF
APPLICATION OF PROCEEDS. If the Company or any of its Subsidiaries
shall at any time or from time to time make or agree to make a
Disposition, receive the proceeds of any Disposition (whether as a
result of the release of funds to the Company or any of its
Subsidiaries from an escrow, as a result of any earnout payments, or
otherwise), or receive the proceeds of any income tax refund, then (i)
the Company shall promptly provide written notice to the Agent of such
proposed Disposition or income tax refund (including the amount of the
estimated Net Proceeds to be received by the Company in respect
thereof) and (ii) promptly upon receipt by the Company or any of its
Subsidiaries of the Net Proceeds of such Disposition or income tax
refund, the Company shall make a payment to the Agent
3
in an amount equal to such Net Proceeds for application to the Loans
and L/C Obligations and other obligations of the Company as follows:
(1) FIRST, to the payment of any accrued and unpaid interest with
respect to the Term Loan, the payment of which had been deferred
pursuant to the PROVISO of Section 2.11(b), (2) SECOND, to the payment
of any accrued and unpaid interest with respect to the Revolving Loan,
the payment of which had been deferred pursuant to the PROVISO of
Section 2.11(b), (3) THIRD, to prepay the Scheduled Repayments with
respect to the Term Loan in the inverse order of their respective
maturities, (4) FOURTH, to prepay outstanding Revolving Loans and all
unreimbursed drawings under Letters of Credit and L/C Borrowings (and
the Revolving Loan Commitments shall be thereupon permanently reduced
in an amount equal to such prepayment), (5) FIFTH, to Cash
Collateralize outstanding Letters of Credit (and the Revolving Loan
Commitments shall be thereupon permanently reduced in an amount equal
to such payment applied to so Cash Collateralize such Letters of
Credit, but without any reduction in the L/C Commitment except to the
extent the Revolving Loan Commitment would otherwise be reduced to an
amount less than the L/C Commitment) and (6) SIXTH, to repay any and
all other outstanding Obligations and other liabilities secured
pursuant to the Collateral Documents.
(j) SECTION 2.09(c)(ii) is deleted in its entirety and replaced with
the following provision:
(ii) promptly upon receipt by the Company or any of its Subsidiaries of
the Net Issuance Proceeds of such issuance, the Company shall make a
payment to the Agent in an amount equal to 75% of such Net Issuance
Proceeds for application to the Loans and L/C Obligations and other
obligations of the Company in the manner set forth in clauses (3)
through (6) of Section 2.09(b)(ii) (and the Revolving Loan Commitments
shall be reduced and Letters of Credit Cash Collateralized in the
manner described in such section); PROVIDED, HOWEVER, THAT,
notwithstanding the foregoing, no such payments, reductions or cash
collateralization under this Section 2.09(c) shall be required after
the Fifteenth Amendment Effectiveness Date with respect to the first
$1,000,000 of Net Issuance Proceeds received by the Company and its
Subsidiaries after the Fifteenth Amendment Effective Date from the
issuance of equity interests (other than as provided in the first
parenthetical of this Section 2.09(c)) and the issuance or incurrence
of Indebtedness for borrowed money (other than as permitted pursuant to
clauses (a) through (m) of Section 8.05).
(k) SECTION 2.09(d)(ii) is deleted in its entirety and replaced with
the following provision:
(ii) promptly upon receipt by the Company or any of its Subsidiaries of
the Net Issuance Proceeds of such issuance or incurrence, the Company
shall make a payment to the Agent in an amount equal to 75% of such Net
Issuance Proceeds for application to the Loans and L/C Obligations and
other obligations of the Company in the manner set forth in clauses (3)
through (6) of Section 2.09(b)(ii) (and the Revolving Loan Commitments
shall be reduced and Letters of Credit Cash Collateralized in the
manner described in such section); PROVIDED, HOWEVER, THAT,
notwithstanding the foregoing, (A) no such payments, reductions or cash
collateralization under this Section 2.09(d) shall be required
4
after the Fifteenth Amendment Effectiveness Date with respect to the
first $1,000,000 of Net Issuance Proceeds received by the Company and
its Subsidiaries after the Fifteenth Amendment Effective Date from the
issuance of equity interests (other than as provided in the first
parenthetical of Section 2.09(c)) and the issuance or incurrence of
Indebtedness for borrowed money (other than as permitted pursuant
clauses (a) through (m) of Section 8.05) and (B) all of the Net
Issuance Proceeds received with respect to the UK Financing shall be
applied to the Loans and L/C Obligations and other obligations of the
Company in the manner set forth in clauses (1) through (6) of Section
2.09(b)(ii) (and the Revolving Loan Commitments shall be reduced and
Letters of Credit Cash Collateralized in the manner described in such
section).
(l) 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 September 30, 2002, the Company shall
prepay the Loans and L/C Obligations and other obligations of the
Company in an amount equal to 75% of Excess Cash Flow for such fiscal
quarter and apply such amount in the manner set forth in clauses (1)
through (6) of Section 2.09(b)(ii) (and the Revolving Loan Commitments
shall be reduced and Letters of Credit Cash Collateralized in the
manner described in such section).
(m) SECTION 2.10(a)(i) is deleted in its entirety and replaced with the
following provision:
(a)(i) Until such time as the Term Loan is repaid in
full, the Company shall repay the outstanding principal balance thereof
(A) in the amount of $100,000 on the last Business Day of each of the
first two months of each calendar quarter ending after the Fifteenth
Amendment Effective Date, (B) in the amount of $150,000 on the last
Business Day of the last month of each calendar quarter ending after
the Fifteenth Amendment Effective Date and (C) on the Final Maturity
Date in an amount equal to the then remaining outstanding principal
balance thereof (each, a "Scheduled Repayment"). Following the payment
in full of the Term Loan and to the extent such amounts have not been
applied to the repayment of the Term Loan, the Company shall repay the
outstanding Revolving Loan and all unreimbursed drawings under Letters
of Credit and L/C Borrowings, and then Cash Collateralize such Letters
of Credit in the amounts and on the dates described in clauses (A) and
(B) of this Section 2.10(a)(i), until such time as such Obligations are
paid in full or fully Cash Collateralized (and upon and to the extent
of each such payment and amount Cash Collateralized, the Revolving Loan
Commitments shall be permanently reduced).
(n) SECTION 2.12(a) is amended to delete the date "May 19, 1998" and to
replace such date with the date "October 1, 2002."
(o) SECTION 2.12 is amended to add the following provision to the end
of such section:
5
(f) FIFTEENTH AMENDMENT FEES.
(i) The Company shall pay to the Agent, for the
benefit of the Banks, an amendment fee with respect to the Fifteenth
Amendment in an aggregate amount equal to $182,218.62 which fee shall
be fully-earned and nonrefundable as of the Fifteenth Amendment
Effective Date, and shall be payable in five consecutive monthly
installments of $36,443.72 each on the last Business Day of November,
2002 and of each of the four succeeding calendar months ending
thereafter.
(ii) The Company shall pay to the Agent, for the
benefit of the Banks, a closing fee with respect to the Fifteenth
Amendment in an aggregate amount equal to $500,000, which fee shall be
fully earned and (except as provided below) nonrefundable as of the
Fifteenth Amendment Effective Date, and shall be payable in full on the
Final Maturity Date; PROVIDED, HOWEVER, THAT such fee shall be forgiven
in its entirety if the Obligations are paid in full in cash or other
immediately available funds on or before September 22, 2003.
(p) Each of SECTIONS 6.16 and 7.13 are deleted in their entirety and
replaced with the following provision:
[intentionally omitted].
(q) SECTION 7.01(d) is deleted in its entirety.
(r) ARTICLE VII is amended to delete in their entirety each of SECTIONS
7.16, 7.17 and 7.18 of such article. -
(s) SECTION 8.01 is amended to delete clause (i) of such section in its
entirety and to replace such clause with the following clause:
(i) Liens encumbering accounts receivable and
related rights of Sutcliffe Xxxxxxxx Ltd. granted to secure
Indebtedness permitted hereunder and incurred in connection with the UK
Financing;
(t) SECTION 8.02 is amended to delete the word "and" at the end of
CLAUSE (c) of such section, to change the period at the end of CLAUSE (d)
thereof to a semicolon followed by the word "and," and to add the following new
clause to the end of such section:
(e) dispositions by Sutcliffe Xxxxxxxx Ltd. of
accounts receivable and related rights pursuant to the UK Financing.
(u) SECTION 8.04 is amended to delete in its entirety CLAUSE (d) of
such section and to replace such clause with the reference "[intentionally
omitted];".
(v) SECTION 8.05 is amended to delete the word "and" at the end of
CLAUSE (k) of such section, to change the period at the end of CLAUSE (l)
thereof to a semicolon, and to add the following provisions to the end of such
section:
6
(m) Indebtedness incurred pursuant to the UK
Financing and not exceed $2,000,000 in aggregate principal amount (or
Dollar equivalents) at any time outstanding; and
(n) unsecured Indebtedness of the Company not to
exceed $2,000,000 in aggregate principal amount incurred after the
Fifteenth Amendment Effective Date and subordinated to the Obligations
in a manner approved in writing by the Agent.
(w) SECTION 8.11(b) is amended to delete the phrase ", with respect to
any Subordinated Debt incurred pursuant to SECTION 8.05(g)," set forth in such
section.
(x) SECTIONS 8.16 through 8.20 are deleted in their entirety and
replaced with the following:
8.16. MINIMUM EBITDA. The Company shall not permit
its EBITDA for any period set forth below to be less than the
applicable corresponding amount set forth below opposite such period:
Date Minimum Amount
---- --------------
June 1, 2002 through
September 30, 2002 $2,220,000
June 1, 2002 through
October 31, 2002 $2,505,000
June 1, 2002 through
November 30, 2002 $2,880,000
June 1, 2002 through
December 31, 2002 $3,220,000
June 1, 2002 through
January 31, 2003 $3,520,000
June 1, 2002 through
February 28, 2003 $3,835,000
June 1, 2002 through
March 31, 2003 $4,185,000
June 1, 2002 through
April 31, 2003 $4,650,000
June 1, 2002 through
May 31, 2003 $5,135,000
7
Twelve months ending
June 30, 2003 $5,035,000
Twelve months ending
July 31, 2003 $5,205,000
Twelve months ending
August 31, 2003 $5,125,000.
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
September 30, 2002, to be less than 0.40 to 1.00.
8.18 WEEKLY NET BOOK RECEIVABLES. The Company shall
not permit the sum of (a) the combined net book value of its
consolidated accounts receivable, as of the last Business Day of any
week ended after the Fifteenth Amendment Effective Date PLUS (b) the
aggregate amount of any 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 $8,800,000.
8.19 NET WORTH. The Company shall not permit
its Net Worth, as of the last calendar day of any month set forth below
to be less than the corresponding amount set forth below opposite such
month:
Period Minimum
------ -------
August, 2002 $4,168,495
September, 2002 $4,215,000
October, 2002 $4,095,000
November, 2002 $4,060,000
December, 2002 $3,995,000
January, 2003 $3,890,000
February, 2003 $3,800,000
March, 2003 $3,750,000
April, 2003 $3,815,000
May, 2003 $3,900,000
June, 2003 $3,995,000
8
July, 2003 $4,145,000
August, 2003 $4,360,000.
8.20. CAPITAL EXPENDITURES. The Company shall not,
and shall not permit any of its Subsidiaries to, incur Capital
Expenditures during its fiscal year ending September 30, 2003 if the
aggregate amount of such Capital Expenditures during such fiscal year
through any date of determination hereunder would be in excess of the
lesser of: (i) $1,250,000 and (ii) the sum of (A) $869,650 plus (B) 25%
of any positive Excess Cash Flow for the period commencing October 1,
2002 and ending on the last day (taken as a single accounting period)
of the fiscal quarter most recently ended thereafter as of such date of
determination and with respect to which the Company shall have provided
the Agent with its financial statements under Section 7.01(b) (or
Section 7.01(c) in the case of the last such fiscal quarter).
(y) SECTION 9.01(f) is amended to delete the phrase "ceases or fails to
be solvent," set forth in CLAUSE (i) of such section.
(z) SECTION 9.01(p) is deleted in its entirety and replaced with the
following provision:
(p) STRATEGIC MILESTONES. The Company shall have
failed to timely achieve any of the Strategic Milestones; or
(aa) 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:
(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;
(b) originally-executed (or facsimiles of originally-executed)
counterparts of that certain fee letter of even date herewith between the
Company and the Agent, executed and delivered by a duly authorized officer of
the Company;
(c) a certificate of the secretary or assistant secretary of the
Company, in form and substance acceptable to the Agent, certifying (i) the
currency and authenticity of the resolutions of the board of directors of the
Company authorizing its execution, performance and delivery of this Agreement
and of the Credit Agreement as to be amended hereby, (ii) the names, signatures
and incumbency of the officers of the Company and (iii) the currency and
authenticity of the certificate of incorporation and bylaws of the Company;
(d) legal opinion of Xxxxxxx, Xxxxxxxxxxx Xxxxxx & Xxxxxxx LLP, counsel
to the Company, addressed to the Agent and the Banks, and in form and substance
acceptable to the
9
Agent, addressing matters relating to this Agreement and the Credit Agreement as
amended by this Agreement; and
(e) 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 (i) extend the maturity date and all remaining
principal payments due thereunder to a date not earlier that October 15, 2003
and (ii) waive any existing defaults under such notes.
The parties hereto have agreed that the amendments
contemplated by SECTION 1 hereof shall be effective as of October 1, 2002
notwithstanding the fact that the foregoing conditions described in this section
will not be satisfied until after such date. Accordingly, subject to the
satisfaction of the foregoing conditions: (i) each of the Lenders hereby further
waives the Event of Default which occurred as of October 1, 2002 as a result of
the Company's failure to repay the Obligations on such date as required by the
Credit Agreement as in effect on such date (prior to the effectiveness of this
Agreement) and (ii) all of the parties hereto agree that, from and after the
effectiveness of this Agreement, the Credit Agreement and other Loan Documents
shall be construed as if this Agreement actually became effective on October 1,
2002. In addition, subject to the satisfaction of the foregoing conditions, each
of the Lenders hereby waive the Company's noncompliance with SECTION 7.02(A)
with respect to its financial statements for its fiscal year ending September
30, 2001.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANT. (a) 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 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.
(b) The Company hereby represents and warrants that (a) except
as described on ANNEX 2 to this Agreement, there are no actions, suits,
proceedings, claims or disputes pending, or to the best knowledge of the
Company, threatened or contemplated, at law, in equity, in arbitration or before
any Governmental Authority, against the Company, or any of its Subsidiaries or
any of their respective properties, (b) none of the actions, suits, proceedings,
claims or disputes described in ANNEX 2 hereof: (i) purport to affect or pertain
to this Agreement, the Credit Agreement or any other Loan Document, or any of
the transactions contemplated hereby or thereby; or (ii) if determined adversely
to the Company or its Subsidiaries, could reasonably be expected to have a
Material Adverse Effect, and (c) no injunction, writ, temporary restraining
order or any order of any nature has been issued by any court or other
Governmental Authority purporting to enjoin or restrain the execution, delivery
or performance of this Agreement, the Credit Agreement or any other Loan
Document, or directing
10
that the transactions provided for herein or therein not be consummated as
herein or therein provided.
(c) The Company agrees to (i) provide access to its properties
and otherwise cooperate with the Agent with respect to an appraisal of the fixed
assets and real property interests of the Company and its Subsidiaries, at such
times and by such appraisers are selected by the Agent, in its reasonable
discretion, and (ii) promptly reimburse the Agent for the fees and expenses
incurred by the Agent in connection with such appraisals.
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 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
11
(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.
* * * *
12
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 TECHNOLOGIES, INC.
XXXXXXXX & XXXXXXXXX CORPORATION (a/k/a Xxxxxxxx Sutcliffe Corporation)
C'TREAT OFFSHORE, INC. (f/k/a Chemitreat Services, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Financial Officer
FIFTEENTH AMENDMENT
SIGNATURE PAGE
BANK OF AMERICA, N.A., as Agent and
Collateral Agent
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------------------
Title: Vice President
-----------------------------------------
BANK OF AMERICA, N.A., Individually as a Bank
and as Issuing Bank
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------------------
Title: Vice President
-----------------------------------------
COMERICA BANK
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------------
Title: Vice President
-----------------------------------------
FIFTH THIRD BANK, CENTRAL OHIO
By: /s/ Xxxxx Xxxxx
--------------------------------------------
Title: Assistant Vice President
-----------------------------------------
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Title: Vice President
-----------------------------------------
FIFTEENTH AMENDMENT
SIGNATURE PAGE
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxx
------------------------------------------------
Title: Vice President
---------------------------------------------
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxxxxxxx Xxxxxxxxx
------------------------------------------------
Title: Vice President
---------------------------------------------
FIFTEENTH AMENDMENT
SIGNATURE PAGE
FIFTEENTH AMENDMENT
SIGNATURE PAGE
(Annex 1 to Fifteenth 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 Xxxxxxxx 0.00(x), (x),
(x), (x), (x), (x), (x), (x), (x) and (n), 8.15, 8.16, 8.17, 8.18, 8.19 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.
2
SCHEDULE 1
COMPUTATIONS
I. SECTION 8.05 INDEBTEDNESS
1. Aggregate outstanding principal amount of Indebtedness (8.05(c)): $________
2. Aggregate outstanding principal amount of Indebtedness (8.05(d)): $_________
Permitted: $500,000
3. Aggregate outstanding principal amount of Indebtedness (8.05(f)): $_________
Permitted: $500,000
4. Aggregate outstanding principal amount of Indebtedness (8.05(g)): $_________
Permitted: $3,000,000
5. Aggregate outstanding principal amount of Indebtedness (8.05(i)): $_________
6. Aggregate outstanding principal amount of Indebtedness (8.05(j)): $_________
7. Aggregate outstanding principal amount of Indebtedness (8.05(k)): $_________
8. Aggregate outstanding principal amount of Indebtedness (8.05(l)): $_________
Permitted: $1,000,000
9. Aggregate outstanding principal amount of Indebtedness (8.05(m)): $________
Permitted: $_______
10. Aggregate outstanding principal amount of Indebtedness (8.05(n)):$________
Permitted: $_______
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 $____________
(g) sum of (e) and (f) $____________
(h) ratio of (d) to (g) ____ to 1.00.
III. SECTION 8.16 MINIMUM EBITDA
1. ______ months ending: ____________, ____.
2. Consolidated EBITDA for such period: $__________
Required: $__________
IV. SECTION 8.17 PAYABLES TO INVENTORY AND EXCESS COSTS
1. Date of Determination: ____________, ____.
2. Required: 0.40 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
2
V. SECTION 8.18 WEEKLY NET BOOK RECEIVABLES
1. Date of Determination: _______________, ___.
2. Required: $8,800,000
3. Actual:
(a) net book receivables $____________
(b) cash collateral $_____________
(d) sum of (a) and (b) $_____________
VI. SECTION 8.19 NET WORTH
1. Date of Determination: _______________, ___.
2. Required: $________
3. Actual:
(a) shareholders' equity $_____________
(b) goodwill write downs $_____________
(c) foreign exchange charge $_____________
(d) sum of (a) through (c) $____________
VII. SECTION 8.20 CAPITAL EXPENDITURES
1. Period of Determination: ___________, ____ through ___________, ____.
2. Maximum Permitted in Period: $_____________
Capital Expenditures Actually Incurred during Period $_____________.
3
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
(Annex 2 to Fifteenth Amendment)
PENDING LITIGATION, ETC.
1. On or about July 7, 0000, Xxxxxxxxx Technologies, Inc.
received a letter from the owner of a facility in W. Palm
Beach, Florida leased by the Company describing a potential
release of certain contaminants from an adjacent site. This
"notice" letter suggested that the Company could have
potential liability for this matter. In 2002, the Company sold
the operations related to this facility, including an
assignment of the lease. The transaction included certain
indemnification obligations by the Company to the purchaser,
including of certain environmental liabilities. An additional
letter from the owner of the site regarding the Company's
potential liability was sent to counsel for the Company on
August 30, 2002. Additional facts surrounding this situation
are being tracked by the Company. At this time, no litigation
has been filed. On September 19, 2002, the Company made a
claim for indemnification by the owner of this site for any
environmental liabilities related to the W. Palm Beach site.
2. WATERLINK SYSTEMS, INC. V. WATERLINK, INC., Opposition No.
108,046, now pending with the Trademark Trial and Appeal Board
of the United States Patent and Trademark Office.
