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EXHIBIT 10.2
Amendment No. 2 to Credit Agreement among Essef Corporation,
National City Bank and ABN Amro Bank N.V.
dated as of May 1, 1997
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AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT, dated as of May 1, 1998 ("this
Amendment"), among ESSEF CORPORATION, an Ohio corporation (herein, together
with its successors and assigns, the "BORROWER"); the financial institutions
listed on the signature pages hereof (the "LENDERS"); NATIONAL CITY BANK, a
national banking association, as Administrative Agent (the "ADMINISTRATIVE
AGENT") for the Lenders under the Credit Agreement; and ABN AMRO BANK N. V., as
Syndication Agent under the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders named therein, the Administrative Agent and the
Syndication Agent entered into the Credit Agreement, dated as of April 28,
1997, as amended by Amendment No. 1 thereto, dated as of July 1, 1997 (herein,
as so amended, referred to as the "CREDIT AGREEMENT"; with the terms defined
therein, or the definitions of which are incorporated therein, being used
herein as so defined).
(2)
(3) The parties hereto desire to increase the Total General Revolving
Commitment from U.S.$135,000,000 to U.S.$185,000,000, with such increase being
allocated among the Lenders in proportion to their existing General Revolving
Commitments, and to make certain other changes in the terms and provisions of
the Credit Agreement, all as more fully set forth below.
(4)
(5) NOW, THEREFORE, the parties hereby agree as follows:
(6)
2. SECTION AMENDMENTS.
3.
3.1. REVISED COMMITMENT AMOUNTS. Effective on the Effective Date (as
hereinafter defined), the Total General Revolving Commitment is increased from
U.S.$135,000,000 to U.S.$185,000,000, the Total Swing Line Revolving Commitment
is increased from U.S.$5,000,000 to U.S.$10,000,000, the respective Commitments
of the Lenders shall be as specified in Annex I hereto, and Annex I to the
Credit Agreement shall be replaced and superseded by Annex I hereto.
3.2.
3.3. LOAN PRICING. Effective on the Effective Date, section 2.8(g) of the
Credit Agreement is amended and restated in its entirety to read as follows,
and the revisions reflected below shall be fully applicable to any Eurocurrency
Loans outstanding on and after the Effective Date (with any Eurocurrency Loans
which are outstanding on the Effective Date continuing to bear interest at the
rate or rates in effect prior to the Effective Date of this Amendment for any
period up to but excluding the Effective Date of this Amendment):
3.4.
(g) As used herein, the term "APPLICABLE EUROCURRENCY MARGIN",
as applied to any Loan which is a Eurocurrency Loan, means the
particular rate per annum determined by the Administrative Agent in
accordance with the Pricing Grid Table which appears below, based on
the Borrower's ratio of Total Indebtedness to EBITDA as referred to
in section 9.7 and such Pricing Grid Table, and following provisions:
(A) INITIAL PRICING. Initially, until changed hereunder in
accordance with the following provisions, the Applicable
Eurocurrency Margin will be the rate per annum determined by the
Administrative Agent on the basis of the certificate of the
Borrower referred to in section 3.3 of Amendment No. 2, which
certificate contains a computation of the Borrower's ratio of
Total Indebtedness to EBITDA as referred to in
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section 9.7, as adjusted on a PRO FORMA basis to reflect the
completion of any Specified Acquisition as to which a closing
has taken place, and such Pricing Grid Table.
(i) PRICING CHANGES BASED ON COMPLETION OF A SPECIFIED
ACQUISITION. If the Borrower completes after the effective date
of Amendment No. 2 any Specified Acquisition, it will within 10
Business Days following closing of the particular Specified
Acquisition deliver to the Administrative Agent a certificate of
a responsible financial officer of the Borrower containing
calculations in reasonable detail as to the computation of the
Borrower's ratio of (x) Total Indebtedness outstanding on the
date such Specified Acquisition was completed, to (y) EBITDA for
the Testing Period ended on the last day of the most recent
fiscal quarter of the Borrower, adjusted, to the extent
necessary, to reflect on a PRO FORMA basis, consistent with the
PRO FORMA requirements contained in section 9.2(f), the
completion of all Specified Acquisitions as to which a closing
has taken place, as if such Specified Acquisition had been
completed and any Indebtedness incurred or assumed in connection
therewith had been outstanding for the entire Testing Period
used in the computation of such ratio. Such certificate shall be
used by the Administrative Agent in the determination of any
change in the Applicable Eurocurrency Margin which may be
justified by the contents of such certificate. Any such change
in the Applicable Eurocurrency Margin shall be determined by the
Administrative Agent promptly and notified to the Borrower and
the Lenders, with the effective date of such change to be such
date as may be specified by the Administrative Agent upon not
less than two Business Days' prior notice to the Borrower and
the Lenders. Changes in the Applicable Eurocurrency Margin made
pursuant to this paragraph (ii) with reference to the Borrower's
EBITDA for a Testing Period ended with a particular fiscal
quarter shall control over any changes in the Applicable
Eurocurrency Margin which would otherwise be made pursuant to
paragraph (iii) below with reference to the same Testing Period.
(i) PRICING CHANGES BASED ON FINANCIAL STATEMENTS. Beginning
with the fiscal quarter of the Borrower ended on or nearest to
June 30, 1998, and continuing with each fiscal quarter
thereafter, the Administrative Agent will determine the
Applicable Eurocurrency Margin for any Loan in accordance with
the Pricing Grid Table, based on the Borrower's ratio of (x)
Total Indebtedness as of the end of its fiscal quarter, to (y)
EBITDA for the Testing Period then ended, as referred to in
section 9.7 and identified in such Table. Changes in the
Applicable Eurocurrency Margin based upon changes in such ratio
shall become effective on the first day of the month following
the receipt by the Administrative Agent pursuant to section
8.1(a) or (b) of the financial statements of the Borrower,
accompanied by the certificate and calculations referred to in
section 8.1(c), demonstrating the computation of such ratio,
based upon the ratio in effect at the end of the applicable
period covered (in whole or in part) by such financial
statements.
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(i) PRICING CHANGES IF FINANCIAL STATEMENTS NOT TIMELY. If any
financial statements referred to in section 8.1(a) or (b), or
the related certificate referred to in section 8.1(d), are not
timely delivered, the Administrative Agent may determine the
Applicable Eurocurrency Margin based upon a good faith estimate
by the Borrower of such ratio as in effect at the end of the
applicable period to be covered (in whole or in part) by such
financial statements, PROVIDED, that if upon delivery of such
delinquent financial statements and related certificate, such
financial statements indicate that such good faith estimate was
incorrect and, as a result thereof, the Applicable Eurocurrency
Margin for any Revolving Loans was too low at such
determination, the Applicable Eurocurrency Margin for such
Revolving Loans shall be increased, as appropriate, with
retroactive effect to the date of the change made on the basis
of such determination, and the Borrower will immediately pay to
the Administrative Agent, for the account of the Lenders having
Commitments in respect of the Facility under which such
Revolving Loans were incurred all additional interest due by
reason of such increased Applicable Eurocurrency Margin.
(i) DETERMINATION AND NOTICE OF PRICING CHANGES, ETC. Any
changes in the Applicable Eurocurrency Margin shall be
determined by the Administrative Agent in accordance with the
above provisions and the Administrative Agent will promptly
provide notice of such determinations to the Borrower and the
Lenders. Any such determination by the Administrative Agent
pursuant to this section 2.8(g) shall be conclusive and binding
absent manifest error.
PRICING GRID TABLE
(EXPRESSED IN BASIS POINTS)
============================================= ================================== ===================================
APPLICABLE APPLICABLE
TOTAL INDEBTEDNESS/EBITDA RATIO EUROCURRENCY MARGIN FACILITY FEE RATE
============================================= ================================= ===================================
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Greater than 4.00 to 1.00 100 37.5
--------------------------------------------- -------------------------------- ----------------------------------
Greater than 3.50 to 1.00 but less than
or equal to 4.00 to 1.00 82.5 30
--------------------------------------------- -------------------------------- ----------------------------------
Greater than 3.00 to 1.00 but less than
or equal to 3.50 to 1.00 75 25
--------------------------------------------- -------------------------------- ----------------------------------
Greater than 2.75 to 1.00 but less than
or equal to 3.00 to 1.00 50 25
--------------------------------------------- -------------------------------- ----------------------------------
Greater than 2.25 to 1.00 but less than
or equal to 2.75 to 1.00 42.5 20
--------------------------------------------- -------------------------------- ----------------------------------
Greater than 1.75 to 1.00 but less than
or equal to 2.25 to 1.00 32.5 17.5
--------------------------------------------- -------------------------------- ----------------------------------
Greater than 1.25 to 1.00 but less than
or equal to 1.75 to 1.00 27.5 12.5
--------------------------------------------- -------------------------------- ----------------------------------
Less than or equal to 1.25 to 1.00 22.5 10
--------------------------------------------- -------------------------------- ----------------------------------
1.1. FACILITY FEE PROVISIONS. Effective on the Effective Date, section 4.1(a)
of the Credit Agreement is amended and restated in its entirety to read as
follows, and the revisions reflected below shall be fully applicable from and
after the Effective Date, but with any Facility Fee accruing for any period
ending prior to the Effective Date being payable at the rate in effect prior to
the Effective Date of this Amendment:
1.2.
(a) The Borrower agrees to pay to the Administrative Agent a
Facility Fee ("FACILITY FEE") for the account of each
Non-Defaulting Lender which has a General Revolving Commitment,
for the period from and including the Effective Date to but not
including the date the Total General Revolving Commitment has
been terminated, on the average daily amount of the Total
General Revolving Commitment, whether used or unused, at the
Applicable Facility Fee Rate, payable quarterly in arrears on
the first Business Day of each April, July, October and January,
commencing on the first Business Day of July 1997.
As used herein, the term "APPLICABLE FACILITY FEE RATE"
means the particular rate per annum determined by the
Administrative Agent in accordance with the Pricing Grid Table
which appears in section 2.8(g), based on the Borrower's ratio
of Total Indebtedness to EBITDA as referred to in section 9.7
and such Pricing Grid Table, and following provisions:
(A) INITIAL PRICING. Initially, until changed hereunder in
accordance with the following provisions, the Applicable
Facility Fee Rate will be the rate per annum determined by
the Administrative Agent on the basis of the certificate of
the Borrower referred to in section 3.3 of Amendment No. 2,
which certificate contains a computation of the Borrower's
ratio of Total Indebtedness to EBITDA as referred to in
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section 9.7, as adjusted on a PRO FORMA basis to reflect
the completion of any Specified Acquisition as to which a
closing has taken place, and such Pricing Grid Table.
(i) PRICING CHANGES BASED ON COMPLETION OF A SPECIFIED
ACQUISITION. If the Borrower completes after the effective
date of Amendment No. 2 any Specified Acquisition, it will
within 10 Business Days following closing of the particular
Specified Acquisition deliver to the Administrative Agent a
certificate of a responsible financial officer of the
Borrower containing calculations in reasonable detail as to
the computation of the Borrower's ratio of (x) Total
Indebtedness outstanding on the date such Specified
Acquisition was completed, to (y) EBITDA for the Testing
Period ended on the last day of the most recent fiscal
quarter of the Borrower, adjusted, to the extent necessary,
to reflect on a PRO FORMA basis, consistent with the PRO
FORMA requirements contained in section 9.2(f), the
completion of all Specified Acquisitions as to which a
closing has taken place, as if such Specified Acquisition
had been completed and any Indebtedness incurred or assumed
in connection therewith had been outstanding for the entire
Testing Period used in the computation of such ratio. Such
certificate shall be used by the Administrative Agent in
the determination of any change in the Applicable Facility
Fee Rate which may be justified by the contents of such
certificate. Any such change in the Applicable Facility Fee
Rate shall be determined by the Administrative Agent
promptly and notified to the Borrower and the Lenders, with
the effective date of such change to be such date as may be
specified by the Administrative Agent upon not less than
two Business Days' prior notice to the Borrower and the
Lenders. Changes in the Applicable Facility Fee Rate made
pursuant to this paragraph (ii) with reference to the
Borrower's EBITDA for a Testing Period ended with a
particular fiscal quarter shall control over any changes in
the Applicable Facility Fee Rate which would otherwise be
made pursuant to paragraph (iii) below with reference to
the same Testing Period.
(i) PRICING CHANGES BASED ON FINANCIAL STATEMENTS.
Beginning with the fiscal quarter of the Borrower ended on
or nearest to June 30, 1998, and continuing with each
fiscal quarter thereafter, the Administrative Agent will
determine the Applicable Facility Fee Rate in accordance
with the Pricing Grid Table, based on the Borrower's ratio
of (x)Total Indebtedness as of the end of its fiscal
quarter, to (y) EBITDA for the Testing Period then ended,
as referred to in section 9.7 and identified in such Table.
Changes in the Applicable Facility Fee Rate based upon
changes in such ratio shall become effective on the first
day of the month following the receipt by the
Administrative Agent pursuant to section 8.1(a) or (b) of
the financial statements of the Borrower, accompanied by
the certificate and calculations referred to in section
8.1(c), demonstrating the computation of such ratio, based
upon the ratio in effect at the end of the applicable
period covered (in whole or in part) by such financial
statements.
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(i) PRICING CHANGES IF FINANCIAL STATEMENTS NOT TIMELY. If
any financial statements referred to in section 8.1(a) or
(b), or the related certificate referred to in section
8.1(d), are not timely delivered, the Administrative Agent
may determine the Applicable Facility Fee Rate based upon a
good faith estimate by the Borrower of such ratio as in
effect at the end of the applicable period to be covered
(in whole or in part) by such financial statements,
PROVIDED, that if upon delivery of such delinquent
financial statements and related certificate, such
financial statements indicate that such good faith estimate
was incorrect and, as a result thereof, the Applicable
Facility Fee Rate was too low at such determination, the
Applicable Facility Fee Rate shall be increased, as
appropriate, with retroactive effect to the date of the
change made on the basis of such determination, and the
Borrower will immediately pay to the Administrative Agent
for the account of the Lenders all additional Facility Fee
due by reason of such increased Applicable Facility Fee
Rate.
(i) DETERMINATION AND NOTICE OF PRICING CHANGES, ETC. Any
changes in the Applicable Facility Fee Rate shall be
determined by the Administrative Agent in accordance with
the above provisions and the Administrative Agent will
promptly provide notice of such determinations to the
Borrower and the Lenders. Any such determination by the
Administrative Agent pursuant to this section 4.1(a) shall
be conclusive and binding absent manifest error.
(a) EXTENSION OF MATURITY. Effective on the Effective Date, the date "April 30,
2002" contained in the definition of the term "Maturity Date" in section 1.1 of
the Credit Agreement is changed to "April 30, 2003"; and the date "February 1,
2000" contained in section 4.4 of the Credit Agreement is changed to "February
1, 2001".
(b)
(c) REDUCTION OF TOTAL GENERAL REVOLVING COMMITMENT. Effective on the Effective
Date, the amount "$100 million" which appears in section 4.3(c) of the Credit
Agreement is changed to "$135 million".
(d)
(e) Effective on the Effective Date, section 4.3(d) of the Credit Agreement is
amended and restated to read in its entirety as follows:
(f)
(i) (d) The Borrower will, pursuant to section 4.2 or this section
4.3(d), without premium or penalty, permanently reduce the Total General
Revolving Loan Commitment by at least $7,000,000, on or before September
30, 1999, at least an additional $10,000,000, on or before September 30,
2000, at least an additional $14,000,000, on or before September 30,
2001, and at least an additional $19,000,000, on or before September 30,
2002. Any such reduction shall apply to proportionately and permanently
reduce the General Revolving Loan Commitment of each of the affected
Lenders, and any partial reduction of the Total General Revolving Loan
Commitment pursuant to this section 4.3(d) shall be in an amount which is
an
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integral multiple of $500,000. The Borrower will provide prompt written
notice to the Administrative Agent at its Notice Office (which notice
the Administrative Agent shall promptly transmit to each of the Lenders)
of any reduction of the Total General Revolving Loan Commitment pursuant
to this section 4.3(d), specifying the date and amount of the reduction.
1.1. TOTAL INDEBTEDNESS/EBITDA RATIO. Effective on the Effective Date, section
9.7 of the Credit Agreement is amended and restated to read in its entirety as
follows:
1.2.
(i) 9.7. TOTAL INDEBTEDNESS/EBITDA RATIO. The Borrower will not at any
time permit the ratio of the amount of Total Indebtedness outstanding at
such time to EBITDA for any Testing Period ending during any period or on
any date shown below to exceed the ratio shown below for any applicable
period or date:
========================================= =======================================
PERIOD RATIO
========================================= =======================================
12/31/97 through 6/29/98 4.25 to 1.00
----------------------------------------- ---------------------------------------
6/30/98 through 9/30/98 4.00 to 1.00
----------------------------------------- ---------------------------------------
10/1/98 through 12/31/98 3.50 to 1.00
----------------------------------------- ---------------------------------------
Testing Period ended 3/31/99 3.75 to 1.00
----------------------------------------- ---------------------------------------
4/1/99 through 9/30/99 3.50 to 1.00
----------------------------------------- ---------------------------------------
Thereafter 3.00 to 1.00
========================================= =======================================
A. CHANGES CONCERNING CERTAIN DEFINITIONS. Effective on the Effective Date,
section 1.1 of the Credit Agreement is amended by adding definitions of the
terms "Amendment No. 2" and "Specified Acquisitions" in appropriate alphabetic
order, and by amending and restating the definition of the term "Permitted
Acquisition", as specified below:
B.
"AMENDMENT NO. 2" shall mean Amendment No. 2 to Credit
Agreement, dated as of May 1, 1998, among the Borrower, the Lenders
party thereto, and the Administrative Agent.
"PERMITTED ACQUISITIONS" shall mean and include, exclusive of
expenditures (including the purchase of adjacent land) to expand then
existing facilities owned by the Borrower or any Subsidiary on the
Effective Date or acquired pursuant to a Permitted Acquisition, and
exclusive of any loans, advances or investments otherwise permitted
pursuant to section 9.5: (i)
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acquisitions (whether by purchase, lease or otherwise) of facilities
and businesses operated by persons who are not Subsidiaries of the
Borrower, and (ii) acquisitions of equity or other similar interests
in such persons; PROVIDED, that, unless the Required Lenders
otherwise consent, with respect to any transaction referred to in the
foregoing clauses (i) and (ii), no such transaction shall be
considered a Permitted Acquisition if
(A) such transaction is actively opposed by the
Board of Directors (or similar governing body) of the selling
person or the person whose equity interests are to be
acquired;
(B) the aggregate consideration for such transaction
(and any related contemporaneous acquisition transaction with
the same or related persons), including the principal amount
of any assumed Indebtedness and (without duplication) any
Indebtedness of any acquired person or persons, exceeds
$30,000,000; PROVIDED that this condition shall not apply to
any transaction completed after October 1, 1999 if at the
time such transaction is completed the ratio of the
Borrower's (x) Total Indebtedness to (y) EBITDA for the
Testing Period then ended, has not exceeded 3.00 to 1.00 for
each of the two consecutive fiscal quarters most recently
ended for which financial information has been furnished to
the Lenders; or
(C) as a result thereof the Borrower or any
Subsidiary acquires any equity interest in any person and
such person does not by virtue of such transaction become a
Subsidiary of the Borrower.
"SPECIFIED ACQUISITION" shall mean any of the three
acquisition transactions identified to the Lenders at the time
Amendment No. 2 became effective, PROVIDED no such acquisition
transaction shall be considered a Specified Acquisition, unless (i)
such transaction is completed in compliance with all applicable
material legal requirements, (ii) such transaction is for aggregate
consideration, exclusive of adjustments for changes in the acquired
working capital, not in excess of the amount identified to the Lenders
at the time Amendment No. 2 became effective, and (iii) after giving
effect to such transaction on a PRO FORMA basis, the PRO FORMA ratio
of the Borrower's Total Indebtedness to EBITDA does not exceed 4.15 to
1.00, as such PRO FORMA ratio may be computed in a manner consistent
with the PRO FORMA requirements contained in section 9.2(f).
A. CONSOLIDATIONS, MERGERS, ACQUISITIONS OR SALES OF ASSETS. Effective on the
Effective Date, clauses (d) and (f) of section 9.2 of the Credit Agreement are
changed, so that after giving effect to such changes, section 9.2 of the Credit
Agreement reads in its entirety as follows:
B.
9.2. CONSOLIDATION, MERGER OR SALE OF ASSETS, ETC. The
Borrower will not, and will not permit any Subsidiary to, wind up,
liquidate or dissolve its affairs, or enter into any
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transaction of merger or consolidation or sell or otherwise dispose
of any of its property or assets (but excluding any sale or
disposition of obsolete or excess furniture, fixtures or equipment or
excess vacant land in the ordinary course of business), or purchase,
lease or otherwise acquire (in one transaction or a series of related
transactions) all or any part of the property or assets of any person
(excluding any purchases, leases or other acquisitions of property or
assets in, and for use in, the ordinary course of business) or agree
to do any of the foregoing at any future time, EXCEPT that the
following shall be permitted:
1. CAPITAL EXPENDITURES: capital expenditures by the Borrower and its
Subsidiaries for furniture, fixtures, equipment, improvements to Real
Property, or for the acquisition of improved or unimproved facilities
or Real Property other than on a "going concern" basis;
1. SALES OF RECEIVABLES: sales of receivables in transactions
permitted by section 9.4(d);
1. PERMITTED INVESTMENTS: the investments permitted pursuant to
section 9.5;
a) CERTAIN ACQUISITIONS: the following: the General Aquatics
Acquisition as contemplated by the Acquisition Documents; and the
Specified Acquisitions;
a) CERTAIN INTERCOMPANY MERGERS, ETC.: if no Default or Event of
Default shall have occurred and be continuing or would result
therefrom, the merger or consolidation of any Wholly-Owned Subsidiary
with or into the Borrower or another Wholly-Owned Subsidiary, so long
as in any merger or consolidation involving the Borrower the Borrower
is the surviving or continuing corporation, or the liquidation or
dissolution of any Subsidiary, or the transfer or other disposition
of any property by the Borrower to any Wholly-Owned Subsidiary or by
any Wholly-Owned Subsidiary to the Borrower or any other Wholly-Owned
Subsidiary of the Borrower;
a) PERMITTED ACQUISITIONS: if no Default or Event of Default shall
have occurred and be continuing or would result therefrom, the
Borrower or any Subsidiary may make Permitted Acquisitions, PROVIDED
that at least five Business Days prior to the date of any such
Permitted Acquisition which involves consideration (including the
amount of any assumed Indebtedness and (without duplication) any
outstanding Indebtedness of any person which becomes a Subsidiary as
a result of such Permitted Acquisition) of $10,000,000 or more, the
Borrower shall have delivered to the Administrative Agent an
officer's certificate executed on behalf of the Borrower by an
Authorized Officer of the Borrower, which certificate shall contain
the date such
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Permitted Acquisition is scheduled to be consummated, contain the
estimated purchase price of such Permitted Acquisition, contain a
description of the property and/or assets acquired in connection with
such Permitted Acquisition, demonstrate that at the time of making
any such Permitted Acquisition the covenants contained in sections
9.7 and 9.8 shall be complied with on a PRO FORMA basis as if the
properties and/or assets so acquired had been owned by the Borrower,
and the Indebtedness assumed and/or incurred to acquire and/or
finance same has been outstanding, for the four fiscal quarter period
immediately preceding such acquisition (without giving effect to any
credit for unobtained or unrealized gains in connection with such
Permitted Acquisition, but taking into account such adjustments to
the overhead of such properties and assets as may reasonably
determined and specified by the Borrower to reflect the overhead
generally applicable to similar properties and assets owned by the
Borrower and its Subsidiaries, as and to the extent the
Administrative Agent determines (acting on instructions from the
Required Lenders) such adjustments to be reasonable and appropriate
under the particular circumstances), and if requested by the
Administrative Agent, attach thereto a true and correct copy of the
then proposed purchase agreement, merger agreement or similar
agreement, partnership agreement and/or other contract entered into
in connection with such Permitted Acquisition; and the aggregate
consideration for such transaction and all other Permitted
Acquisitions completed after May 1, 1998 and on or before September
30, 1999 (exclusive of the Specified Acquisitions permitted under
section 9.2(d) hereof), including the principal amount of any assumed
Indebtedness and (without duplication) any Indebtedness of any
acquired person or persons, does not exceed $40,000,000;
(1) PERMITTED DISPOSITIONS: if no Default or Event of Default shall
have occurred and be continuing or would result therefrom, the
Borrower or any of its Subsidiaries may sell any property, land or
building (including any related receivables or other intangible
assets) to any person which is not a Subsidiary of the Borrower, or
sell the entire capital stock (or other equity interests) and
Indebtedness of any Subsidiary owned by the Borrower or any other
Subsidiary to any person which is not a Subsidiary of the Borrower,
or permit any Subsidiary to be merged or consolidated with a person
which is not an Affiliate of the Borrower, or consummate any other
Asset Sale with a person who is not a Subsidiary of the Borrower;
PROVIDED that the consideration for such transaction represents fair
value (as determined by management of the Borrower), all such assets,
capital stock (or other equity interests) and Indebtedness or
Subsidiary so disposed of during any fiscal year of the Borrower
shall not have an aggregate fair value which is greater than an
amount equal to 5% of the Total Net Assets of the Borrower as at the
end of its most recently completed fiscal year prior thereto for
which financial statements have been delivered pursuant to section
8.1(a), all such assets, capital stock (or other equity interests)
and Indebtedness or Subsidiary so disposed of after March 31, 1997
shall not at any time on a cumulative
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basis have an aggregate fair value which is greater than an amount
equal to 10% of the Total Net Assets of the Borrower as at the end of
its most recently completed fiscal year prior thereto for which
financial statements have been delivered pursuant to section 8.1(a),
in the case of any such transaction involving consideration in excess
of $10,000,000, at least five Business Days prior to the date of
completion of such transaction the Borrower shall have delivered to
the Administrative Agent an officer's certificate executed on behalf
of the Borrower by an Authorized Officer of the Borrower, which
certificate shall contain a description of the proposed transaction,
the date such transaction is scheduled to be consummated, the
estimated purchase price or other consideration for such transaction,
financial information pertaining to compliance with the preceding
clauses (B) and (C), and which shall (if requested by the
Administrative Agent) include a certified copy of the draft or
definitive documentation pertaining thereto, and contemporaneously
therewith, the Borrower prepays Loans as and to the extent
contemplated by section 5.2(c); and PROVIDED, FURTHER, that the
restrictions contained in this section 9.2(g) shall not apply to, and
there shall be excluded from any computations under this section
9.2(g), any isolated sales or other dispositions of assets having a
value less than $500,000, the sale of certain currently-owned Real
Property located in Daytona Beach, Florida, and any dispositions of
certain property, assets and business identified to the Lenders in a
letter dated as of the date hereof which makes reference to this
section 9.2(g); and
1. LEASES: the Borrower or any of its Subsidiaries may enter into
leases of property or assets not constituting Permitted Acquisitions
in the ordinary course of business not otherwise in violation of this
Agreement.
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I. SECTION REPRESENTATIONS AND WARRANTIES.
II.
III. The Borrower represents and warrants as follows:
IV.
a) CURRENT FINANCIAL STATEMENTS, ETC. The Borrower has furnished to the
Lenders and the Administrative Agent complete and correct copies of the
audited consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of September 30, 1997 and September 30, 1996 and the related
audited consolidated statements of income, shareholders' equity, and cash
flows of the Borrower and its consolidated subsidiaries for the fiscal years
then ended, accompanied by the report thereon of Deloitte & Touche LLP; and
the condensed consolidated balance sheets of the Borrower and its consolidated
subsidiaries as of December 31, 1997 and December 31, 1996, and the related
condensed consolidated statements of income and of cash flows of the Borrower
and its consolidated subsidiaries for the three months ended December 31, 1997
and December 31, 1996, as included in the Borrower's Report on Form 10-Q filed
with the SEC. All such financial statements have been prepared in accordance
with GAAP, consistently applied (except as stated therein), and fairly present
the financial position of the Borrower and its consolidated subsidiaries as of
the respective dates indicated and the consolidated results of their
operations and cash flows for the respective periods indicated, subject in the
case of any such financial statements which are unaudited, to normal audit
adjustments, none of which will involve a Material Adverse Effect.
A. AUTHORIZATION, VALIDITY AND BINDING EFFECT. This Amendment has been duly
authorized by all necessary corporate action on the part of the Borrower, has
been duly executed and delivered by a duly authorized officer or officers of
the Borrower, and constitutes the valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms.
B.
C. REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The representations and
warranties of the Borrower contained in the Credit Agreement, as amended
hereby, are true and correct on and as of the date hereof as though made on and
as of the date hereof, except to the extent that such representations and
warranties expressly relate to a specified date, in which case such
representations and warranties are hereby reaffirmed as true and correct when
made.
D.
E. NO EVENT OF DEFAULT, ETC. No condition or event has occurred or exists
which constitutes or which, after notice or lapse of time or both, would
constitute an Event of Default.
F.
G. COMPLIANCE. The Borrower is in full compliance with all covenants and
agreements contained in the Credit Agreement, as amended hereby, and the other
Credit Documents to which it is a party.
H.
I.
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II. SECTION EFFECTIVENESS OF AMENDMENTS.
III.
IV. This Amendment shall become effective if and when, on a date (the
"EFFECTIVE DATE") on or prior to June 15, 1998, the following conditions shall
have been satisfied:
V.
A. EXECUTION OF AMENDMENT. This Amendment shall have been executed by the
Borrower and the Administrative Agent and counterparts hereof as so executed
shall have been delivered to the Administrative Agent; the Acknowledgment and
Consent appended hereto shall have been executed by the Credit Parties named
therein, and counterparts thereof as so executed shall have been delivered to
the Administrative Agent; and the Administrative Agent shall have been notified
by the Lenders party hereto that such Lenders have executed this Amendment
(which notification may be by facsimile or other written confirmation of such
execution).
A. FEES. The Borrower shall have paid to the Administrative Agent for its own
account and for the account of the Lenders all fees which the Borrower has
agreed to pay in connection with this Amendment.
B.
C. CERTIFICATE OF THE BORROWER. Not later than two Business Days prior to the
Effective Date, the Borrower shall have delivered to the Administrative Agent a
certificate of a responsible financial officer of the Borrower containing
calculations in reasonable detail as to the computation of the Borrower's ratio
of (x) Total Indebtedness as of the date of such certificate, to (y) EBITDA for
the Testing Period ended on the last day of the most recent fiscal quarter of
the Borrower, adjusted to reflect on a PRO FORMA basis, consistent with the PRO
FORMA requirements contained in section 9.2(f) of the Credit Agreement, as
amended hereby, the completion of any of the Specified Acquisitions as to which
a closing has or will take place on or prior to the Effective Date, as if such
Specified Acquisition had been completed and any Indebtedness incurred or
assumed in connection therewith had been outstanding for the entire Testing
Period used in the computation of such ratio. Such certificate shall be used by
the Administrative Agent in the determination of the initial Applicable
Eurocurrency Margin referred to in section 2.8(g) of the Credit Agreement, as
amended hereby, and the initial Facility Fee Rate referred to in section 4.1(a)
of the Credit Agreement, as amended hereby, and the Administrative Agent shall
notify the Borrower and the Lenders of such determination on the Effective
Date.
D.
E. CORPORATE RESOLUTIONS AND APPROVALS. The Administrative Agent shall have
received, in sufficient quantity for the Administrative Agent and the Lenders,
certified copies of the resolutions of the Board of Directors of the Borrower,
approving this Amendment and any other documents contemplated hereby to which
the Borrower is or may become a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
the execution, delivery and performance by the Borrower of this Amendment and
such other documents to which it is or may become a party.
F.
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G. INCUMBENCY CERTIFICATE. The Administrative Agent shall have received, in
sufficient quantity for the Administrative Agent and the Lenders, a certificate
of the Secretary or an Assistant Secretary of the Borrower, certifying the
names and true signatures of the officers of the Borrower authorized to sign
this Amendment and the other documents contemplated hereby to which the
Borrower is a party and any other documents to which the Borrower is a party
which may be executed and delivered in connection herewith.
H.
I. OPINION OF COUNSEL. On the Effective Date, the Administrative Agent shall
have received an opinion, addressed to the Administrative Agent and each of the
Lenders and dated the Effective Date, from Squire, Xxxxxxx & Xxxxxxx LLP,
special counsel to the Borrower, substantially in the form of Exhibit A hereto
and covering such other matters incident to the transactions contemplated
hereby as the Administrative Agent may reasonably request, such opinion to be
in form and substance satisfactory to the Administrative Agent.
J.
II. SECTION NOTICE OF EFFECTIVE DATE.
III.
After this Amendment becomes effective as provided herein, the
Administrative Agent will promptly furnish a copy of this Amendment to each
Lender and the Borrower and confirm the specific Effective Date hereof.
I. SECTION RATIFICATIONS.
II.
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Credit
Agreement, and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Credit Agreement are ratified and confirmed and
shall continue in full force and effect.
I. SECTION MISCELLANEOUS.
II.
A. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and inure to
the benefit of the Borrower, each Lender and the Administrative Agent and their
respective permitted successors and assigns.
A. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment shall survive the execution and delivery of
this Amendment, and no investigation by the Administrative Agent or any Lender
or any subsequent Loan or issuance of a Letter of Credit shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
B.
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C. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and all other
agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
D. EXPENSES. As provided in the Credit Agreement, but without limiting any
terms or provisions thereof, the Borrower agrees to pay on demand all costs and
expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, and execution of this Amendment, including without
limitation the costs and fees of the Administrative Agent's special legal
counsel, regardless of whether this Amendment becomes effective in accordance
with the terms hereof, and all costs and expenses incurred by the
Administrative Agent or any Lender in connection with the enforcement or
preservation of any rights under the Credit Agreement, as amended hereby.
E.
F. SEVERABILITY. Any term or provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
G.
H. APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Ohio.
I.
J. HEADINGS. The headings, captions and arrangements used in this Amendment
are for convenience only and shall not affect the interpretation of this
Amendment.
K.
L. ENTIRE AGREEMENT. This Amendment is specifically limited to the matters
expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
M.
N. COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
O.
P.
[The balance of this page is intentionally blank;
the next page is the signature page.]
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IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered as of the date first above written.
ESSEF CORPORATION CORESTATES BANK, N. A.
By:______________________________ By:______________________________
Vice President-Finance Vice President
NATIONAL CITY BANK, FLEET NATIONAL BANK
individually and as Administrative Agent
By:______________________________
By:______________________________ Vice President
Vice President
ABN AMRO BANK N. V., XXXXXX TRUST AND SAVINGS BANK
Individually and as Syndication Agent
By:______________________________ By:______________________________
Title: Vice President
And:_____________________________
Title:
THE BANK OF NEW YORK PNC BANK, NATIONAL ASSOCIATION
By:______________________________ By:______________________________
Vice President Vice President
BANK ONE, N. A. SOCIETE GENERALE,
Chicago Branch
By:______________________________
Vice President By:______________________________
Vice President
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ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and
effect of sections 6 and 10 of the Subsidiary Guaranty (as such term is defined
in the Credit Agreement referred to in the Amendment No. 2 to Credit Agreement
(the "AMENDMENT"), to which this Acknowledgment and Consent is appended), each
of the undersigned hereby unconditionally and irrevocably (i) acknowledges
receipt of a copy of the Credit Agreement and the Amendment, and (ii) consents
to all of the terms and provisions of the Credit Agreement as amended by the
Amendment.
Capitalized terms which are used herein without definition shall have
the respective meanings ascribed thereto in the Credit Agreement referred to
herein. This Acknowledgment and Consent is for the benefit of the Lenders, the
Administrative Agent, and the Syndication Agent, any other person who is a
third party beneficiary of the Subsidiary Guaranty, and their respective
successors and assigns. No term or provision of this Acknowledgment and Consent
may be modified or otherwise changed without the prior written consent of the
Administrative Agent, given as provided in the Credit Agreement. This
Acknowledgment and Consent shall be binding upon the successors and assigns of
each of the undersigned. This Acknowledgment and Consent may be executed by any
of the undersigned in separate counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Acknowledgment and Consent as of the date of the Amendment
referred to herein.
ENPAC Corporation
ADVANCED STRUCTURES, INC.
PAC-FAB, INC.
PUREX POOL SYSTEMS, INC.
COMPOOL, INC.
XXXXXXX TECHNOLOGY CORPORATION
GENERAL ACQUATICS CORPORATION
XXXXXXX AND SYLVAN POOLS CORPORATION
By:________________________________________
Vice President and/or Treasurer
or Assistant Treasurer of each
of the above corporations
