EXHIBIT 10.3(1)
FIRST AMENDMENT AND WAIVER TO
THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
First Amendment and waiver, dated as of December 21, 2001, to Third Amended
and Restated Revolving Credit Agreement (the "First Amendment"), by and among
IONICS, INCORPORATED, a Massachusetts corporation (the "Borrower"), FLEET
NATIONAL BANK and the other lending institutions listed on Schedule 1 to the
Credit Agreement (as hereinafter defined) (the "Banks"), amending certain
provisions of the Third Amended and Restated Revolving Credit Agreement, dated
as of June 29, 2001 (as amended and in effect from time to time, the "Credit
Agreement") by and among the Borrower, the Banks and FLEET NATIONAL BANK as
agent for the Banks (in such capacity, the "Agent"). Terms not otherwise defined
herein which are defined in the Credit Agreement shall have the same respective
meanings herein as therein.
WHEREAS, the Borrower and the Banks have agreed to modify and waive certain
terms and conditions of the Credit Agreement as specifically set forth in this
First Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ss.1. Amendments to Section 1 of the Credit Agreement. Section 1.1 of the
Credit Agreement is hereby amended as follows:
(a) The definition of "Revolving Credit Loan Maturity Date" contained in
Section 1.1 of the Credit Agreement is hereby amended by deleting the date
"December 31, 2004" which appears in such definition and substituting in place
thereof the words "April 30, 2002, unless extended in accordance with ss.2.11,
and then such date as set forth in such extension notice."
(b) Section 1.1 of the Credit Agreement is further amended by inserting the
following definitions in the appropriate alphabetical order:
Bottled Water Business. Those assets of the Borrower, Ionics (U.K.)
Limited ("IUK") and Aqua Cool, S.A. constituting the Borrower's bottled
water business in the U.S., U.K. and France and as more fully set forth in
the Purchase Agreements.
Extension Date. April 30, 2002.
Nestle Disposition. The sale by the Borrower, IUK and Ionics France,
S.A. ("IF") on the Nestle Disposition Closing Date of the Bottled Water
Business to certain Affiliates of Nestle, S.A. for a cash purchase price of
not less than $200,000,000 less up to $40,000,000 (the "Like Kind Exchange
Amount") which Like Kind Exchange Amount will be placed with an
accommodation party on the Nestle Disposition Closing Date solely in
connection with a possible consummation of a purchase of "like kind" assets
(as described in the Code) by the Borrower (the "Like Kind Exchange"). The
$200,000,000 cash purchase price less the Like Kind Exchange Amount will be
paid to the Borrower, IUK and IF on the Nestle Disposition Closing Date
pursuant to the terms of the Purchase Agreements.
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Nestle Disposition Closing Date. The date on which all the conditions
to closing set forth in the Purchase Agreements have been satisfied, the
purchase price of not less than $200,000,000 less the Like Kind Exchange
Amount has been received by the Borrower, IUK and IF and the Nestle
Disposition has been consummated.
Purchase Agreements. Collectively, (a) the Master Agreement, dated as
of November 30, 2001, between the Borrower and the Perrier Group of
America, Inc., (b) the United States Asset Purchase Agreement, dated as of
November 30, 2001, between the Borrower and Great Springs Waters of
America, Inc., (c) the offer letter, dated November 30, 2001, from
Springbar Water Coolers Limited for the purchase of IUK's Bottled Water
Business, and (d) the Share Purchase Agreement, dated November 30, 2001,
between Societe Francaise des Eaux Regionales and IF for the purchase of
all of the capital stock of Aqua Cool, S.A.
ss.2. Amendments to Section 2 of the Credit Agreement. Section 2 of the
Credit Agreement is hereby amended by inserting immediately after the text in
ss.2.10 the following new ss.2.11:
2.11. Extension of Revolving Credit Loan Maturity Date. The Total
Commitment shall terminate and all Revolving Credit Loans shall become
finally due and payable on the Revolving Credit Loan Maturity Date,
provided, however, that such Total Commitment and Revolving Credit Loan
Maturity Date may be extended for such time as the Borrower may request in
writing (but in no event later than December 31, 2004), as provided in this
ss.2.11 and at each Bank's sole discretion, upon the written request of the
Borrower. A written request, if any, for the extension of the then current
Revolving Credit Loan Maturity Date along with updated projections for the
term of the requested extension shall be given by the Borrower to the Agent
and the Banks not less than twenty (20) days prior to the Extension Date
and shall provide the Banks with a request for a specific extension time.
Except as expressly provided in this ss.2.11, no extension of the then
current Revolving Credit Loan Maturity Date pursuant to this ss.2.11 shall
be effective unless all of the Banks shall have approved such extension by
written notice to the Agent. If on or prior to ten (10) days prior to the
Extension Date, all of the Banks consent to such extension by written
notice to the Agent, the Revolving Credit Loan Maturity Date automatically
shall be extended to that date which has been requested by the Borrower in
its written request to the Banks.
ss.3. Amendments to Section 3 of the Credit Agreement. Section 3 of the
Credit Agreement is hereby amended by deleting the text of ss.3.2.2 in its
entirety and restating it as follows:
3.2.2. Proceeds. Concurrently with the receipt by the Borrower or any
of its Subsidiaries of (a) Net Cash Sale Proceeds from Asset Sales (other
than (i) the sale of inventory or the disposition of obsolete assets, in
each case in the ordinary course of business consistent with past practices
and (ii) the Net Cash Sale Proceeds from the Nestle Disposition) or (b) Net
Cash Proceeds from any Equity Issuances, the Borrower shall pay to the
Agent for the respective accounts of the Banks an amount equal to (i) one
hundred percent (100%) of such Net Cash Sale Proceeds from any Asset Sale
by the Borrower or any of its domestic Subsidiaries in excess of $500,000
in the aggregate in any fiscal year and from any Asset Sale by any foreign
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Subsidiary of the Borrower in excess of $5,000,000 in the aggregate in any
fiscal year, and (ii) seventy-five percent (75%) of such Net Cash Proceeds,
in each case, to be applied against the outstanding amount of the Revolving
Credit Loans. In addition, no later than two (2) Business Days following
the Nestle Disposition Closing Date, the Borrower shall pay to the Agent
for the respective accounts of the Banks an amount which is necessary to
reduce the sum of the outstanding Revolving Credit Loans plus the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations to an aggregate
amount of not more than $40,000,000, such amount to be applied against the
outstanding amount of the Revolving Credit Loans (and, to the extent
necessary, to cash collateralize any issued and outstanding Letters of
Credit).
ss.4. Amendments to Section 8 of the Credit Agreement. Section 8 of the
Credit Agreement is hereby amended by inserting the word "domestic" in ss.8.13
immediately before each reference to the word "Subsidiary" in such ss.8.13. For
purposes of clarification, the word "domestic" was inadvertently omitted from
ss.8.13 on the Closing Date. Therefore, upon execution of this First Amendment
the foregoing amendment to such ss.8.13 shall be deemed to be effective as of
the Closing Date.
ss.5. Amendments to Section 9 of the Credit Agreement. Section 9 of the
Credit Agreement is hereby amended as follows:
(a) Section 9.3 of the Credit Agreement is hereby amended by
deletingss.9.3(c) in its entirety and restating it as follows:
(c) Investments in (i) securities commonly known as "commercial
paper" issued by a corporation organized and existing under the laws
of the United States of America or any state thereof or any OECD
country (including, without limitation, corporate bonds, Eurodollar
issues of United States corporations and Dollar denominated issues of
corporations organized under the laws of an OECD country) that at the
time of purchase have been rated and the ratings for which are not
less than "P 1" if rated by ▇▇▇▇▇'▇ Investors Service, Inc., and not
less than "A 1" if rated by Standard and Poor's Rating Group (or, for
securities of issuers with a long-term credit rating, ratings for
which are not less than "A-" if rated by Standard and Poor's Rating
Group and not less than A3 if rated by ▇▇▇▇▇'▇ Investors Services,
Inc.; and (ii) asset-backed securities which at the time of purchase
have been rated and the ratings for which are not less than "AAA" if
rated by Standard and Poor's Rating Group or "Aaa" if rated by ▇▇▇▇▇'▇
Investors Service, Inc.
(b) Section 9.5.1(d) of the Credit Agreement is hereby amended by adding
the following new text to such ss.9.5.1(d) immediately before the word "and" at
the end of such ss.9.5.1(d):
including, in the event that the Like Kind Exchange (as defined in the
definition of Nestle Disposition) satisfies all of the terms and
conditions set forth in the definition of "Permitted Acquisition", the
Like Kind Exchange
(c) Section 9.5.2 of the Credit Agreement is hereby amended by
deletingss.9.5.2. in its entirety and restating it as follows:
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9.5.2. Disposition of Assets. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than (a) the sale of inventory and the
disposition of obsolete assets, in each case in the ordinary course of
business consistent with past practices, (b) the disposition of the stock
of or other equity interests in foreign Subsidiaries of the Borrower the
aggregate fair market value of which shall not exceed $1,000,000 per single
transaction or $5,000,000 in any fiscal year, (c) the disposition of assets
as contemplated by Schedule 9.5.2, (d) the Nestle Disposition, provided (i)
no Event of Default has occurred and is continuing or would exist as a
result thereof, (ii) the gross proceeds received by the Borrower and its
Subsidiaries is not less than $200,000,000 minus the Like Kind Exchange
Amount; (iii) such disposition has been consummated by not later than April
30, 2002; (iv) the Borrower has demonstrated to the satisfaction of the
Agent, no less than three (3) Business Days prior to the consummation of
the Nestle Disposition Closing Date, based on a pro forma Compliance
Certificate, compliance on an actual (to the extent any such financial
covenant is tested at all times) and pro forma basis with ss.10 hereof
immediately prior to giving effect to the Nestle Disposition for the fiscal
quarter ended December 31, 2001 (or, to the extent any such financial
covenant is tested at all times, as of the date of such Nestle Disposition
without giving effect thereto); and (v) the Borrower has certified to the
Agent that the Borrower and its Subsidiaries are and, after giving effect
to the Nestle Disposition will be, solvent, on a consolidated and
consolidating basis; and (e) the disposition of other assets of the
Borrower and its Subsidiaries (including assets which are no longer
necessary to the business of the Borrower or any of its Subsidiaries) the
aggregate fair market value of which shall not exceed $1,000,000 in any
fiscal year.
ss.6. Amendment to Schedule I to the Credit Agreement. Schedule I to the
Credit Agreement is hereby amended by deleting such Schedule I and substituting
Schedule I attached hereto therefor.
ss.7. Limited Waiver. Upon the execution of this Amendment by all parties,
the Banks hereby waive compliance with those provisions of ss.9.5.2 of the
Credit Agreement solely to permit the Borrower, IUK and IF to enter into the
Purchase Agreements.
ss.8. Conditions to Effectiveness. Except as otherwise set forth in ss.ss.4
and 7, this First Amendment shall not become effective until the Agent receives
(a) a counterpart of this First Amendment, executed by the Borrower, each of the
Guarantors, the Agent, and the Majority Banks, (b) receipt by the Agent of a
copy of the Purchase Agreements and (c) evidence satisfactory in form and
substance to the Agent of consummation of the Nestle Disposition, including but
not limited to, confirmation of payment of the cash purchase price of not less
than $200,000,000 to the Borrower, IUK and IF minus the Like Kind Exchange
Amount.
ss.9. Representations and Warranties. The Borrower hereby repeats, on and
as of the date hereof, each of the representations and warranties made by it in
ss.7 of the Credit Agreement (except to the extent of changes resulting from
transactions contemplated or permitted by this First Amendment, the Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and to the extent that such representations and warranties relate expressly to
an earlier date), provided, that all references therein to the Credit Agreement
shall refer to such Credit Agreement as amended hereby. In addition, the
Borrower hereby represents and warrants that the execution and delivery by the
Borrower and its Subsidiaries of this First Amendment and the performance by the
Borrower and its Subsidiaries of all of its agreements and obligations under the
Credit Agreement as amended hereby are within the corporate or other authority
of each of the Borrower and its Subsidiaries and have been duly authorized by
all necessary corporate or other action on the part of the Borrower and its
Subsidiaries.
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ss.10. Ratification, Etc. Except as expressly amended hereby, the Credit
Agreement and all documents, instruments and agreements related thereto,
including, but not limited to the other Loan Documents, are hereby ratified and
confirmed in all respects and shall continue in full force and effect. The
Credit Agreement and this First Amendment shall be read and construed as a
single agreement. All references in the Credit Agreement or any related
agreement or instrument to the Credit Agreement shall hereafter refer to the
Credit Agreement as amended hereby.
ss.11. No Waiver. Except as set forth in ss.7, nothing contained herein
shall constitute a waiver of, impair or otherwise affect any Obligations, any
other obligation of the Borrower or any rights of the Agent or the Banks
consequent thereon.
ss.12. Counterparts. This First Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
ss.13. Governing Law. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS
(WITHOUT REFERENCE TO CONFLICT OF LAWS).
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as a document under seal as of the date first above written.
IONICS, INCORPORATED
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Chief Financial Officer
FLEET NATIONAL BANK
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President
BANK OF AMERICA, N.A.
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Title: Vice President
JPMORGAN CHASE BANK
f/k/a The Chase Manhattan Bank
By: /s/A. ▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
MELLON BANK, N.A.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇
----------------
Title: Vice President
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RATIFICATION OF GUARANTY
Each of the undersigned Guarantors hereby acknowledges and consents to the
foregoing First Amendment as of December 21, 2001, and agrees that the Guaranty
to which such Guarantor is a party remains in full force and effect, and each of
the Guarantors confirms and ratifies all of its obligations thereunder.
AQUA DESIGN, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
FIDELITY PUREWATER, INC.
By: /s/▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Treasurer
FIDELITY WATER SYSTEMS, INC.
By: /s/▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Treasurer
IONICS KOREA, INC.
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
IONICS LIFE SCIENCES, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
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IONICS ULTRAPURE WATER CORPORATION
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇
---------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Secretary
RESOURCES CONSERVATION CO. INTERNATIONAL
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇
---------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Secretary
SEPARATION TECHNOLOGY INC.
By: /s/Ark ▇. ▇▇▇▇
--------------
Name: Ark ▇. ▇▇▇▇
Title: President
▇▇▇▇▇▇▇ INSTRUMENTS, INC.
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇
---------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Secretary
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SCHEDULE 1
Bank Commitments and Commitment Percentages
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Domestic and LIBOR Revolving Credit Revolving Credit
Lending Office Commitment Commitment Percentage
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Fleet National Bank $25,000,000.01 50.00000%
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President
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Bank of America, N.A. $8,333,333.33 16.66667%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇-▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------------- ----------------------
JPMorgan Chase Bank $8,333,333.33 16.66667%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
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Mellon Bank, N.A. $8,333,333.33 16.66667%
One Boston Place
AIM 024 ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇. ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Vice President
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TOTAL $50,000,000 100.00000%
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