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EXHIBIT 10.1.4
FOURTH AMENDMENT TO CREDIT AGREEMENT
FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of July 13, 1998 (this
"Amendment"), among AMTROL HOLDINGS, INC., a Delaware corporation ("Holdings"),
AMTROL INC., a Rhode Island corporation (the "Borrower"), the various financial
institutions party to the Credit Agreement referred to below (the "Banks"),
MORGAN STANLEY SENIOR FUNDING, INC., as Documentation Agent (in such capacity,
the "Documentation Agent"), and BANKERS TRUST COMPANY, as Administrative Agent
(in such capacity, the " Administrative Agent"). All capitalized terms used
herein and not otherwise defined shall have the respective meanings provided
such terms in the Credit Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Banks, the Documentation Agent and
the Administrative Agent are parties to a Credit Agreement, dated as of November
13, 1996 (as amended, modified or supplemented to the date hereof, the "Credit
Agreement"); and
WHEREAS, subject to the terms and conditions of this Amendment, the
parties hereto wish to amend the Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed:
I. AMENDMENT TO CREDIT AGREEMENT.
1. Section 4.02(A)(c) of the Credit Agreement is hereby amended by (x)
inserting the text "(i)" immediately following the text "PROVIDED that"
appearing in the first sentence of said Section and (y) inserting the text "and
(ii) up to an additional $3,000,000 of the Net Cash Proceeds from the sales of
Designated Assets constituting Asset Sales" immediately following the text "from
Asset Sales" appearing in the first sentence of said Section. --------
2. Notwithstanding anything to the contrary contained in Sections
3.03(e), 4.02(A)(e) and 4.02(B)(a) of the Credit Agreement, $10,250,000 of the
proceeds from the issuance by Holdings of Holdings Common Stock and $10,250,000
of the proceeds from the issuance by Holdings of Holdings Preferred Stock, in
each case to Cypress and certain Management Investors on the Fourth Amendment
Effective Date (as defined below), shall not be required to be applied as a
mandatory repayment of principal of the then outstanding Term Loans or to
permanently reduce the Total Revolving Commitment as otherwise required by the
relevant terms of said Sections, so long as (i) at least $8,700,000 of the
aggregate proceeds of such issuances are applied as a mandatory repayment of
principal of outstanding A Term Loans on the
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EXHIBIT 10.1.4
Fourth Amendment Effective Date, (ii) $11,800,000 of the aggregate proceeds of
such issuances are utilized to repay outstanding Revolving Loans on the Fourth
Amendment Effective Date and (iii) the mandatory repayment of A Term Loans
required pursuant to clause (i) above is applied (x) FIRST, to reduce the then
remaining Scheduled Repayments of the A Term Facility in direct order of
maturity for the fiscal quarters ended September 30, 1998 and December 31, 1998
and (y) SECOND, to reduce the then remaining Scheduled Repayments of the A Term
Facility on a PRO RATA basis (based upon the then remaining Scheduled Repayments
of the A Term Facility).
3. Section 7.01(e) of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing immediately prior to the text "(y) in the
case" in said Section and inserting a comma in lieu thereof and (ii) inserting
the following new clause (z) at the end of said Section:
"and (z) in the case of the certificate delivered pursuant to
Sections 7.01(a) and (b) for any fiscal year or quarter, as the case
may be, ended on or prior to the fiscal quarter ended March 31, 2000,
shall set forth the amount and type of each permitted non-recurring
charge (as set forth in Annex X) taken in each fiscal quarter
constituting a part of the Test Period ending on the last day of the
fiscal year or quarter covered by such financial statements and applied
to reduce Consolidated EBITDA for such Test Period".
4. Section 8.02(f) of the Credit Agreement is hereby amended by
deleting the date "December 31, 1998" appearing in said Section and inserting
the date "December 31, 2000" in lieu thereof.
5. Section 8.09(a) of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (v) of said Section, (ii)
deleting the period at the end of clause (vi) of said Section and inserting the
text ";and" at the end of said clause and (iii) inserting the following new
clause (vii) at the end of said Section:
"(vii) Holdings may pay regularly scheduled Dividends on the
Holdings Preferred Stock pursuant to the terms thereof and the
certificate of designation therefor through the issuance of additional
shares of Holdings Preferred Stock."
6. Section 8.11 of the Credit Agreement is hereby amended by deleting
the table appearing in said Section in its entirety and inserting in lieu
thereof the following new table:
"Fiscal Quarter Ending Closest To: Ratio
---------------------------------- -----
December 31, 1996 1.60:1.0
March 31, 1997 1.60:1.0
June 30, 1997 1.60:1.0
September 30, 1997 1.60:1.0
December 31, 1997 1.55:1.0
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EXHIBIT 10.1.4
March 31, 1998 1.55:1.0
June 30, 1998 1.35:1.0
September 30, 1998 1.35:1.0
December 31, 1998 1.35:1.0
March 31, 1999 1.35:1.0
June 30, 1999 1.35:1.0
September 30, 1999 1.45:1.0
December 31, 1999 1.50:1.0
March 31, 2000 1.50:1.0
June 30, 2000 1.55:1.0
September 30, 2000 1.60:1.0
December 31, 2000 1.65:1.0
March 31, 2001 1.70:1.0
June 30, 2001 1.75:1.0
September 30, 2001 1.80:1.0
December 31, 2001 1.85:1.0
March 31, 2002 1.85:1.0
June 30, 2002 1.90:1.0
September 30, 2002 1.95:1.0
December 31, 2002 2.00:1.0
March 31, 2003 2.10:1.0
June 30, 2003 2.15:1.0
September 30, 2003 2.25:1.0
December 31, 2003 2.30:1.0
March 31, 2004 2.35:1.0
June 30, 2004 2.50:1.0".
7. Section 8.12 of the Credit Agreement is hereby amended by deleting
the table appearing in said Section in its entirety and inserting in lieu
thereof the following new table:
"Fiscal Quarter Ending Closest To: Ratio
---------------------------------- -----
December 31, 1996 6.25:1.0
March 31, 1997 6.25:1.0
June 30, 1997 6.25:1.0
September 30, 1997 6.25:1.0
December 31, 1997 6.40:1.0
March 31, 1998 6.60:1.0
June 30, 1998 7.80:1.0
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EXHIBIT 10.1.4
September 30, 1998 7.80:1.0
December 31, 1998 7.80:1.0
March 31, 1999 7.80:1.0
June 30, 1999 7.75:1.0
September 30, 1999 7.25:1.0
December 31, 1999 6.75:1.0
March 31, 2000 6.50:1.0
June 30, 2000 6.50:1.0
September 30, 2000 6.25:1.0
December 31, 2000 5.85:1.0
March 31, 2001 5.85:1.0
June 30, 2001 5.85:1.0
September 30, 2001 5.50:1.0
December 31, 2001 5.25:1.0
March 31, 2002 5.25:1.0
June 30, 2002 5.25:1.0
September 30, 2002 4.75:1.0
December 31, 2002 4.50:1.0
March 31, 2003 4.50:1.0
June 30, 2003 4.50:1.0
September 30, 2003 4.40:1.0
December 31, 2003 4.20:1.0
March 31, 2004 3.80:1.0
June 30, 2004 3.25:1.0".
8. Section 8.13 of the Credit Agreement is hereby amended by deleting
the table appearing in said Section in its entirety and inserting in lieu
thereof the following new table:
"Fiscal Quarter Ending Closest To: Amount
---------------------------------- ------
December 31, 1996 $27,800,000
March 31, 1997 $26,640,000
June 30, 1997 $26,640,000
September 30, 1997 $26,640,000
December 31, 1997 $26,640,000
March 31, 1998 $27,330,000
June 30, 1998 $25,000,000
September 30, 1998 $25,000,000
December 31, 1998 $25,000,000
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EXHIBIT 10.1.4
March 31, 1999 $25,000,000
June 30, 1999 $25,000,000
September 30, 1999 $26,000,000
December 31, 1999 $27,000,000
March 31, 2000 $27,000,000
June 30, 2000 $28,000,000
September 30, 2000 $28,500,000
December 31, 2000 $29,500,000
March 31, 2001 $30,000,000
June 30, 2001 $31,000,000
September 30, 2001 $32,000,000
December 31, 2001 $33,000,000
March 31, 2002 $33,000,000
June 30, 2002 $34,000,000
September 30, 2002 $34,500,000
December 31, 2002 $35,000,000
March 31, 2003 $36,000,000
June 30, 2003 $37,000,000
September 30, 2003 $37,500,000
December 31, 2003 $38,500,000
March 31, 2004 $39,000,000
June 30, 2004 $39,500,000".
9. The definition of "Consolidated EBITDA" appearing in Section 10 of
the Credit Agreement is hereby amended by inserting the following proviso at the
end of said definition:
", PROVIDED FURTHER that Consolidated EBITDA for each Test Period
ending on or prior to March 31, 2000 shall mean the sum of (x)
Consolidated EBITDA for such Test Period as determined without regard
to this proviso PLUS (y) to the extent Consolidated EBITDA for any such
Test Period has been reduced (whether directly or through reductions to
Consolidated Net Income) by an amount not to exceed the remainder of
(x) the sum of the permitted non-recurring charges as set forth in
Annex X hereto LESS (y) the sum of the relevant non-recurring charges
(or portion thereof) taken or to be taken in a fiscal quarter not
constituting a part of such Test Period, the amount of each such
reduction for each such Test Period".
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EXHIBIT 10.1.4
10. Section 10 of the Credit Agreement is hereby further amended by
inserting the following new definition in said Section in appropriate
alphabetical order:
"Holdings Preferred Stock" shall mean Holdings' Preferred
Stock , par value $.01 per share, issued pursuant to the Certificate of
Designations, dated as of July 31, 1998, as the same may be amended,
modified or supplemented from time to time in accordance with the terms
hereof and thereof, which Preferred Stock shall not be mandatorily
redeemable prior to the twelfth anniversary of its initial date of
issuance.
11. Notwithstanding anything to the contrary contained in Section 8.15
of the Credit Agreement or in the Pledge Agreement, the Banks hereby agree that
Holdings and its Subsidiaries shall not be required to pledge to the Pledgee
under the Pledge Agreement the stock of AMTROL Holding Portugal, SGPS,
Unipessoal, Lda., AMTROL Holding Netherlands B.V., AMTROL Europe Ltd. or AMTROL
Holding GmbH until 60 days following the Fourth Amendment Effective Date and
then only to the extent required to be pledged pursuant to the terms of the
Pledge Agreement. The Banks hereby waive any Event of Default which may have
arisen under Section 9.03 or 9.07 of the Credit Agreement as a result of the
failure by Holdings and its Subsidiaries to pledge the stock of AMTROL Holding
Portugal, SGPS, Unipessoal, Lda., AMTROL Europe Ltd. and AMTROL Holding GmbH to
the Pledgee pursuant to, and in accordance with the terms of, the Pledge
Agreement prior to the Fourth Amendment Effective Date.
12.. Annex VII to the Credit Agreement is hereby amended by deleting
said Annex in its entirety and replacing the same with new Annex VII in the form
attached hereto as Annex VII.
13. The Credit Agreement is hereby amended by adding Annex X in the
form attached hereto immediately after Annex IX appearing in the Credit
Agreement.
II. MISCELLANEOUS PROVISIONS.
1. In order to induce the Banks to enter into this Amendment, each of
Holdings and the Borrower hereby represents and warrants that:
(a) no Default or Event of Default exists as of the Fourth
Amendment Effective Date, after giving effect to this Amendment; and
(b) all of the representations and warranties contained in the
Credit Agreement or the other Credit Documents are true and correct in
all material respects on the Fourth Amendment Effective Date, after
giving effect to this Amendment, with the same effect as though such
representations and warranties had been made on and as of the Fourth
Amendment Effective Date (it being understood that any representation
or warranty made as of a specific date shall be true and correct in all
material respects as of such specific date).
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2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "Fourth
Amendment Effective Date") when (i) Holdings, the Borrower and the Required
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Administrative Agent at its Notice Office and (ii)
Holdings shall have issued Holdings Preferred Stock and Holdings Common Stock to
Cypress and certain Management Investors generating cash proceeds of
$20,500,000.
6. From and after the Fourth Amendment Effective Date, all references
in the Credit Agreement and each of the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement as modified
hereby.
* * *
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EXHIBIT 10.1.4
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
AMTROL HOLDINGS, INC.
By:
--------------------------------------
Name:
Title:
AMTROL INC.
By:
--------------------------------------
Name:
Title:
BANKERS TRUST COMPANY, Individually
and as Administrative Agent
By:
--------------------------------------
Name:
Title:
MORGAN STANLEY SENIOR FUNDING, INC.,
Individually and as Documentation Agent
By:
--------------------------------------
Name:
Title:
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EXHIBIT 10.1.4
BANKBOSTON, N.A.
By:
--------------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
--------------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
--------------------------------------
Name:
Title:
CITIZENS FINANCIAL GROUP INC
By:
--------------------------------------
Name:
Title:
FIRST SOURCE FINANCIAL LLP
By First Source Financial Inc.,
Its manager
By:
--------------------------------------
Name:
Title:
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EXHIBIT 10.1.4
FLEET NATIONAL BANK
By:
--------------------------------------
Name:
Title:
SOCIETE GENERALE
By:
--------------------------------------
Name:
Title:
AMARA-1 FINANCE LTD.
By:
--------------------------------------
Name:
Title:
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EXHIBIT 10.1.4
CERES FINANCE LTD.
By:
--------------------------------------
Name:
Title:
KZH HOLDING CORPORATION III
By:
--------------------------------------
Name:
Title:
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EXHIBIT 10.1.4
DESIGNATED ASSETS
Designated Assets % of Cash Proceeds
----------------- ------------------
Plano, Texas Facility 100%
Peru, Indiana At least 60%
Houses and land assets with 100%
a fair market value not in
excess of $2,500,000
Real property in Nashville, 100%
Tennessee with a fair market value
not in excess of $1,500,000
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EXHIBIT 10.1.4
NON-RECURRING CHARGES/CONSOLIDATED EBITDA ADJUSTMENTS
Non-Recurring Charges
---------------------
Production relocation costs
not to exceed: $ 4,500,000
Workers compensation
costs not to exceed: $ 600,000
Management
reorganization costs not to
exceed: $ 4,000,000
Incremental HotWater
Maker returns not to
exceed: $ 4,500,000
Failed acquisition costs not
to exceed: $ 150,000
Obsolete inventory write-down
not to exceed: $ 2,000,000
Costs and expenses relating
to product liability lawsuit
not to exceed: $ 250,000
Incremental plant closing
costs not to exceed: $ 4,450,000
-----------
$20,450,000