1
EXHIBIT 10.4
EIGHTH AMENDMENT
----------------
This Eighth Amendment (this "Amendment") is entered into as of this
2nd day of May, 2000 among Waterlink, Inc. (the "Company"), Bank of America,
N.A. (f/k/a Bank of America National Trust and Savings Association), as Agent
(the "Agent"), and the financial institutions from time to time party thereto
(the "Banks"). Unless otherwise specified herein, capitalized terms used in this
Amendment shall have the meanings ascribed to them by the Agreement (as defined
below).
RECITALS
--------
WHEREAS, the Company, the Agent and the Banks are party to that
certain Amended and Restated Credit Agreement, dated as of June 27, 1997 and as
amended and restated as of February 11, 2000 (as amended, supplemented, restated
or otherwise modified from time to time, the "Agreement");
WHEREAS, the Company, the Agent and the Banks wish to enter into
certain amendments to the Agreement, each as more fully set forth herein;
NOW THEREFORE, in consideration of the mutual execution hereof and
other good and valuable consideration, the parties hereto agree as follows:
SECTION 1. AMENDMENTS.
-----------
(a) SECTION 1.01 OF THE AGREEMENT IS HEREBY AMENDED BY INSERTING THE
FOLLOWING DEFINITIONS IN APPROPRIATE ALPHABETICAL ORDER:
"EIGHTH AMENDMENT" shall mean the Eighth Amendment to this
Agreement, dated as of May 2, 2000.
"EIGHTH AMENDMENT EFFECTIVENESS DATE" shall mean the date upon which
the Agent advises the Company that the Eighth Amendment has become
effective.
"2000 TL COMMITMENT" means from and after the Eighth Amendment
Effectiveness Date (a) in the aggregate, up to $2,000,000, and (b) as to
each Bank with a 2000 TL Commitment, its Pro Rata Share as indicated on
Schedule I to the Eighth Amendment; PROVIDED, that on September 29, 2000
(or, if extended pursuant to SECTION 2.10(a)(ii), December 29, 2000), the
2000 TL Commitment, and the 2000 TL Commitment of each Bank, shall be
reduced to zero.
"2000 TL FUNDING DATE" means a Borrowing Date occurring on or after
the Eighth Amendment Effectiveness Date but on or prior to December 28,
2000 on which a Borrowing under the 2000 TL Commitment shall occur.
(b) THE DEFINITIONS OF "AGENT-RELATED PERSONS", "COMMITMENT" AND
"DISPOSITION" IN SECTION 1.01 OF THE AGREEMENT ARE HEREBY AMENDED BY DELETING
EACH IN ITS ENTIRETY AND INSERTING THE FOLLOWING IN LIEU THEREOF:
2
"AGENT-RELATED PERSONS" means, BofA and any successor agent arising
under Section 10.09 and any successor letter of credit issuing bank
hereunder, together with their respective Affiliates (other than Banc of
America Securities), and the officers directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates (other than Banc of
America Securities).
* * *
"COMMITMENT" means, collectively, the Revolving Loan Commitment, the
Term Loan Commitment, the 2000 TL Commitment and the Swing Line
Commitment.
* * *
"DISPOSITION" means (a) the sale, lease, conveyance or other
disposition of Property in excess of $100,000, other than sales or other
dispositions expressly permitted under SECTION 8.02, and (b) the sale,
transfer or agreement to recommend the sale or transfer by the Company or
any Subsidiary of the Company of all or substantially all of any equity
securities of the Company or any Subsidiary of the Company.
(c) CLAUSE (a) OF SECTION 2.01 OF THE AGREEMENT IS HEREBY AMENDED BY
DELETING IT IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING IN LIEU THEREOF:
"(a) THE TERM CREDIT. Each Bank severally agrees, on the terms
and conditions set forth herein, to make, in an amount not to exceed such
Bank's Pro Rata Share of the Term Loan Commitment and the 2000 TL
Commitment, as the case may be, on the Special Funding Date or any 2000
TL Funding Date, as the case may be, a term loan to the Company in an
aggregate principal amount equal to the Term Loan Commitment or the 2000
TL Commitment, as the case may be (collectively, "Term Loan"). Amounts
borrowed as Term Loans which are repaid or prepaid by the Company may not
be reborrowed.".
(d) SECTION 2.03 OF THE AGREEMENT IS HEREBY AMENDED BY DELETING IT
IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING IN LIEU THEREOF:
"2.03 PROCEDURE FOR BORROWING.
------------------------
(a) Each Borrowing (other than an L/C Borrowing or a Borrowing
of Swing Line Loans) shall be made upon the Company's irrevocable written
notice delivered to the Agent in the form of a Notice of Borrowing (which
notice must be received by the Agent prior to 12:00 noon (Chicago time)
(i) three Business Days prior to the requested Borrowing Date, in the
case of Offshore Rate Loans and (ii) on the date of the requested
Borrowing Date, in the case of Base Rate Loans, specifying:
(i) the amount of the Borrowing, which shall be in an aggregate
minimum amount of $500,000, or any multiple of $100,000 in excess
thereof, in the case of Base Rate Loans, and $1,000,000, or any
multiple of $500,000 in excess thereof, in the case of Offshore Rate
Loans; PROVIDED, that any Borrowing
2
3
utilizing the 2000 TL Commitment shall be in an aggregate minimum
amount of $1,000,000, or any multiple of $1,000,000 in excess
thereof;
(ii) whether such Borrowing shall consist of Revolving Loans
and/or Term Loans;
(iii) the requested Borrowing Date, which shall be a Business
Day;
(iv) the Type of Loans comprising the Borrowing; and
(v) the duration of the Interest Period applicable to such Loans
included in such notice. If the Notice of Borrowing fails to specify
the duration of the Interest Period for any Borrowing comprised of
Offshore Rate Loans, such Interest Period shall be three months.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share
of that Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Company at the
Agent's Payment Office by 2:00 p.m. (Chicago time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by
the Agent at such office by crediting the account of the Company on the
books of BofA with the aggregate of the amounts made available to the
Agent by the Banks and in like funds as received by the Agent.
(d) After giving effect to any Borrowing, unless the Agent shall
otherwise consent, there may not be more than five different Interest
Periods in effect.".
(e) CLAUSE (a) OF SECTION 2.10 OF THE AGREEMENT IS HEREBY AMENDED BY
DELETING IT IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING IN LIEU THEREOF:
"(a) (i) TERM LOANS. On each date set forth below, the Company shall
be required to repay the principal amount (or such other amount after
giving effect to any prepayments permitted or required pursuant to this
Agreement) of the Term Loans as is set forth opposite such date (each, a
"Scheduled Repayment"):
DATE AMOUNT
---- ------
September 29, 2000 $2,000,000
December 29, 2000 2,000,000
March 30, 2001 2,000,000
June 29, 2001 2,000,000
September 28, 2001 2,000,000
December 31, 2001 2,500,000
March 29, 2002 2,500,000
June 28, 2002 2,500,000
September 30, 2002 2,500,000
3
4
December 31, 2002 2,500,000
March 31, 2003 2,500,000
Term Maturity Date 20,835,816.30;
(ii) The Company shall repay to the Banks on September 29, 2000
the aggregate principal amount of Term Loans outstanding on such
date that were borrowed under the 2000 TL Commitment; PROVIDED,
HOWEVER, that all of the Banks may consent, in their sole
discretion, to the repayment pursuant to this clause (a)(ii) to
occur on December 29, 2000.
Any amendment to this SECTION 2.10(a) shall require the consent of all of the
Banks.".
(f) Clause (b) of SECTION 2.12 of the Agreement is hereby amended by
deleting it in its entirety and replacing it with the following in lieu thereof:
"(b) COMMITMENT FEES. The Company shall pay to the Agent for the
account of each Bank a commitment fee ("Commitment Fee") on the
average daily unused portion of such Bank's Revolving Loan
Commitment and 2000 TL Commitment, as the case may be, computed on a
quarterly basis in arrears on the last Business Day of each calendar
quarter based upon the daily utilization for that quarter as
calculated by the Agent, equal to the Applicable Margin per annum.
For purposes of calculating utilization under this Section, (x) the
Revolving Loan Commitments shall be deemed used to the extent of the
Effective Amount of Revolving Loans then outstanding PLUS the
Effective Amount of L/C Obligations then outstanding and (y) the
2000 TL Commitment shall be deemed used to the extent of the
Effective Amount of Term Loans made under the 2000 TL Commitment
then outstanding. Such commitment fee shall accrue from the Closing
Date to the Revolving Termination Date and shall be due and payable
quarterly in arrears on the last Business Day of each March, June,
September and December through the Revolving Termination Date, with
the final payment to be made on the Revolving Termination Date;
PROVIDED that, in connection with any reduction or termination of
Revolving Loan Commitments or the 2000 TL Commitment, as the case
may be, under SECTION 2.07, the accrued commitment fee calculated
for the period ending on such date shall also be paid on the date of
such reduction or termination, with the following quarterly payment
being calculated on the basis of the period from such reduction or
termination date to such quarterly payment date. The commitment fees
provided in this Section shall accrue at all times after the
above-mentioned commencement date, including at any time during
which one or more conditions in ARTICLE V are not met.
(c) PREPAYMENT FEE. The Company shall pay to the Agent, for
distribution to each Bank based on its Pro Rata Share of the Term
Loans, a prepayment fee ("Prepayment Fee") in an aggregate amount
equal to .80% of the amount of any prepayment of Term Loans pursuant
to SECTION 2.08 or 2.09. Such Prepayment Fee shall be due and
payable upon the date of any such prepayment of Term Loans.".
(g) SECTION 8.01 OF THE AGREEMENT IS HEREBY AMENDED BY INSERTING THE
FOLLOWING TO THE END OF SUCH SECTION:
4
5
"Any amendment to this SECTION 8.01 shall require the consent of all of the
Banks.".
(h) NOTWITHSTANDING ANY PROVISION CONTAINED IN THE AGREEMENT, ON AND
AFTER THE EIGHTH AMENDMENT EFFECTIVENESS DATE ALL LOANS UNDER THE AGREEMENT
SHALL BE MAINTAINED AS BASE RATE LOANS AND SHALL BEAR INTEREST AT A RATE PER
ANNUM EQUAL TO THE BASE RATE PLUS 1.00%; PROVIDED, THAT ANY LOAN MAINTAINED AS
AN OFFSHORE RATE LOAN AS OF THE EIGHTH AMENDMENT EFFECTIVENESS DATE SHALL BE
PERMITTED TO BE MAINTAINED AS AN OFFSHORE RATE LOAN UNTIL THE END OF THE
RELEVANT INTEREST PERIOD BUT THE APPLICABLE MARGIN THERETO SHALL ON AND AFTER
THE EIGHTH AMENDMENT EFFECTIVENESS DATE BE 3.5%, AFTER WHICH SUCH OFFSHORE RATE
LOAN SHALL BE MAINTAINED AS A BASE RATE LOAN AND SHALL BEAR INTEREST AT A RATE
PER ANNUM EQUAL TO THE BASE RATE PLUS 1.00%.
SECTION 2. WAIVER. Notwithstanding the requirements of SECTIONS
8.15, 8.17, 8.18 and 8.19 of the Agreement, the Banks hereby waive compliance by
the Company with the requirements of said SECTIONS 8.15, 8.17, 8.18 and 8.19 of
the Agreement for the fiscal quarter ending in March, June and September and for
the period until, but not including, the last day of the fiscal quarter ending
in December 2000; provided, HOWEVER, that such waiver contained in this Section
2 shall be immediately withdrawn on the date upon which EBIT of the Company, as
reported in the monthly financial information package delivered to the Banks no
later than the 30th day of each calendar month pursuant to SECTION 7.01(c) of
the Agreement relating to the immediately preceding calendar month, is less
than:
(i) $500,000 for the period from April 1, 2000 to and including
May 31, 2000;
(ii) $1,500,000 for the period from April 1, 2000 to and including
June 30, 2000;
(iii) $1,750,000 for the period from April 1, 2000 to and including
July 31, 2000;
(iv) $2,500,000 for the period from April 1, 2000 to and including
August 31, 2000;
(v) $3,850,000 for the period from April 1, 2000 to and including
September 30, 2000;
(vi) $4,250,000 for the period from April 1, 2000 to and including
October 31, 2000;
(vii) $4,750,000 for the period from April 1, 2000 to and including
November 30, 2000; and
(viii) $6,000,000 for the period from April 1, 2000 to and including
December 31, 2000;
5
6
and; PROVIDED, FURTHER, that any amendment to Section 2 shall require the
consent of each Bank.
SECTION 3. REFERENCE TO AND EFFECT UPON THE AGREEMENT.
-------------------------------------------
(a) Except as specifically amended above, the Agreement shall remain
in full force and effect and is hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of the Bank under
the Agreement, nor constitute a waiver of any provision of the Agreement, except
as specifically set forth herein. Upon the effectiveness of this Amendment, each
reference in the Agreement to "this Agreement", "hereunder", "hereof", "herein"
or words of similar import shall mean and be a reference to the Agreement as
amended hereby.
SECTION 4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
SECTION 5. HEADINGS. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purposes.
SECTION 6. COUNTERPARTS. This Amendment may be executed in any
number of counterparts (including by facsimile transmission), each
of which when so executed shall be deemed an original but all such counterparts
shall constitute one and the same instrument.
SECTION 7. AMENDMENT FEE. The Company hereby agrees to pay to the
Agent (for distribution to the Banks on the basis of each such Bank's Pro Rata
Share) an amendment fee in the amount of .20% of each such Bank's Commitment,
(i) one-half of such fee to be paid on the Eighth Amendment Effectiveness Date
and (ii) the remaining portion of such fee to be paid on September 29, 2000.
SECTION 8. EFFECTIVENESS. This Amendment shall become effective as
of the date first written above upon the delivery (i) to the Agent of the fee
referred to in Section 7(i) hereof, (ii) to the Agent of executed signature
pages (including by facsimile transmission) to this Amendment signed by the
Company and each Bank and (iii) to the Agent an executed engagement letter with
a nationally recognized investment banking firm concerning the development of
strategic options for the Company.
[signature pages follow]
6
7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment by
its duly authorized officer as of the date first written above.
WATERLINK, INC.
By:
------------------------------------------
Title:
---------------------------------------
BANK OF AMERICA, N.A., as Agent
By:
-----------------------------------------
Title:
--------------------------------------
BANK OF AMERICA, N.A., Individually as a Bank
By:
-----------------------------------------
Title:
--------------------------------------
COMERICA BANK
By:
-----------------------------------------
Title:
--------------------------------------
S-1
[TO EIGHTH AMENDMENT]
▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
By:
-----------------------------------------
Title:
--------------------------------------
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By:
-----------------------------------------
Title:
--------------------------------------
PNC BANK, NATIONAL ASSOCIATION
By:
-----------------------------------------
Title:
--------------------------------------
UNION BANK OF CALIFORNIA, N.A.
By:
-----------------------------------------
Title:
--------------------------------------
S-2
[TO EIGHTH AMENDMENT]
9
SCHEDULE I
2000 TL COMMITMENT ALLOCATION
BANK AMOUNT PRO RATA SHARE
---- ------ --------------
Bank of America, N.A. $2,000,000 100%
