EXHIBIT 99.1
THIRD AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIRD AMENDMENT AND WAIVER, dated as of February 17, 2005 (this
"Amendment"), to the Amended and Restated Credit Agreement, dated as of December
12, 2003 (amending and restating the Credit Agreement dated as of September 30,
1999) (as amended, supplemented, or otherwise modified from time to time, the
"Credit Agreement"), among TENNECO AUTOMOTIVE INC., a Delaware corporation (the
"Borrower"), the several lenders from time to time parties thereto (the
"Lenders"), JPMORGAN CHASE BANK, N.A., a national banking association (as
successor to JPMorgan Chase Bank), as administrative agent for the Lenders (in
such capacity, the "Administrative Agent"), and the other financial institutions
named therein as agents for the Lenders (in such capacity, collectively, the
"Other Agents").
WITNESSETH:
WHEREAS, the Borrower, the Lenders and the Administrative Agent and
the Other Agents are parties to the Credit Agreement;
WHEREAS, the Borrower has requested that the Credit Agreement be
amended as set forth herein;
WHEREAS, the Lenders, the Administrative Agent and the Other Agents
are willing to agree to such amendment and waiver of the Credit Agreement,
subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the Borrower, the Lenders, the Administrative Agent
and the Other Agents hereby agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms
which are defined in the Credit Agreement, as amended hereby, are used herein as
therein defined.
2. Tranche B Term Facility.
(a) The Borrower will optionally prepay (the "Prepayment")
$40,000,000 of the Tranche B Term Loans on the Third Amendment Effective Date
(and such prepayment shall be applied to the remaining installments of the
Tranche B Term Loans in the direct order of maturity as specified in Section
2.19(b) of the Credit Agreement). On the Third Amendment Effective Date the
Tranche B Term Lenders (including Lenders which are Tranche B Term Lenders
immediately prior to the Third Amendment Effective Date but who will not
continue as Tranche B Term Lenders immediately after the Third Amendment
Effective Date) shall assign their Tranche B Term Loans at par to the
Administrative Agent or its designees. Pursuant to such assignment, the Tranche
B Term Loans will be purchased at par and assumed by the Administrative Agent
and its designees and assigned by the Administrative Agent among the Tranche B
Term Lenders in order to reflect the allocation of Tranche B Term Loans set
forth on Schedule 1.1A hereto. By receiving such purchase price and/or by
executing this Amendment, the Tranche B Term Lenders shall automatically be
deemed to have both assigned
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their Tranche B Term Loans to the Administrative Agent and assumed their Tranche
B Term Loans allocated as set forth on Schedule 1.1A from the Administrative
Agent pursuant to the terms of the form of Assignment and Acceptance attached to
the Credit Agreement as Exhibit E, and accordingly no other action by the
Tranche B Term Lenders shall be required in connection therewith. The Tranche B
Term Lenders shall make such payments at the times and in the amounts as
directed by the Administrative Agent in order to give effect to assignments and
funding of assignments pursuant to this paragraph. In making payments pursuant
to the arrangements described in this paragraph the Administrative Agent may net
payments and may make entries on its books and in the Register reasonably
determined by it in order to give effect to the transactions described in this
paragraph. The provisions of this paragraph are intended to facilitate the
maintenance of the perfection and priority of existing security interests in and
Liens on the Collateral.
(b) Nothing herein contained shall be construed as a
substitution, novation, payment, prepayment or extinguishment of the Tranche B
Term Loans (other than the Prepayment), which shall continue to remain
outstanding after the Third Amendment Effective Date. Notwithstanding any
provision of this Agreement, the provisions of Sections 2.20, 2.21, 2.22 and
10.5 of the Credit Agreement as in effect immediately prior to the Third
Amendment Effective Date will continue to be effective as to all matters arising
out of or in any way related to facts or events existing or occurring prior to
the Third Amendment Effective Date or related to the transactions described in
this Third Amendment.
(c) On the Third Amendment Effective Date the interest rate
for the Tranche B Term Loans will be determined in accordance with Section 2.14
of the Credit Agreement (as if the Third Amendment Effective Date was the last
day of an Interest Period).
(d) The Borrower hereby irrevocably directs the Administrative
Agent to take such action as is deemed necessary or appropriate to effectuate
the assignments and funding in Section 2(a) above. The Borrower also agrees to
pay to the Administrative Agent on the Third Amendment Effective Date by
intrabank transfer of immediately available funds all accrued interest, fees and
any other amounts owing by it in respect of the Tranche B Term Loans as of such
date (including any amounts payable pursuant to Section 2.22 of the Credit
Agreement as a result of the assignments and funding described in Section 2(a)).
(e) The aggregate principal amount of all Revolving Loans, all
Swingline Loans and all Letters of Credit outstanding under the Credit Agreement
on the Third Amendment Effective Date shall continue to be outstanding under the
Credit Agreement.
3. Tranche B-1 Facility.
(a) On the Third Amendment Effective Date the Tranche B-1
Lenders (including Lenders which are Tranche B-1 Lenders immediately prior to
the Third Amendment Effective Date but who will not continue as Tranche B-1
Lenders immediately after the Third Amendment Effective Date) shall assign their
Tranche B-1 Credit Linked Deposit Amounts at par to the Administrative Agent or
its designees. Pursuant to such assignment, the Tranche B-1 Credit Linked
Deposit Amounts will be purchased at par and assumed by the Administrative Agent
and its designees and assigned by the Administrative Agent among the Tranche B-1
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Lenders in order to reflect the allocation of Tranche B Credit Linked Deposit
Amounts set forth on Schedule 1.1A hereto. By receiving such purchase price
and/or by executing this Amendment, the Tranche B-1 Lenders shall automatically
be deemed to have both assigned their Tranche B-1 Credit Linked Deposit Amounts
to the Administrative Agent and assumed their Tranche B-1 Credit Linked Deposit
Amounts allocated as set forth on Schedule 1.1A from the Administrative Agent
pursuant to the terms of the form of Assignment and Acceptance attached to the
Credit Agreement as Exhibit E, and accordingly no other action by the Tranche
B-1 Lenders shall be required in connection therewith. The Tranche B-1 Lenders
shall make such payments at the times and in the amounts as directed by the
Administrative Agent in order to give effect to assignments and funding of
assignments pursuant to this paragraph. In making payments pursuant to the
arrangements described in this paragraph the Administrative Agent may net
payments and may make entries on its books and in the Register reasonably
determined by it in order to give effect to the transactions described in this
paragraph. The Administrative Agent shall establish a Tranche B-1 Credit Linked
Account at JPMCB for each Tranche B-1 Lender which does not have one. The
provisions of this paragraph are intended to facilitate the maintenance of the
perfection and priority of existing security interests in and Liens on the
Collateral.
(b) Nothing herein contained shall be construed as a
substitution, novation, payment, prepayment or extinguishment of the Tranche B-1
Credit Linked Deposit Amounts or the Tranche B-1 Loans, which shall continue to
remain outstanding after the Third Amendment Effective Date. Notwithstanding any
provision of this Agreement, the provisions of Sections 2.20, 2.21 and 2.22 and
10.5 of the Credit Agreement as in effect immediately prior to the Third
Amendment Effective Date will continue to be effective as to all matters arising
out of or in any way related to facts or events existing or occurring prior to
the Third Amendment Effective Date or related to the transactions described in
this Third Amendment. All Tranche B-1 Letters of Credit outstanding immediately
prior to the Third Amendment Effective Date shall remain outstanding on and
after the Third Amendment Effective Date in accordance with their terms and
shall be participated in by the Tranche B-1 Lenders in accordance with their
then respective Tranche B-1 Percentages.
(c) The Borrower hereby irrevocably directs the Administrative
Agent to take such action as is deemed necessary or appropriate to effectuate
the assignments and funding described in Section 3(a) above. The Borrower also
agrees to pay to the Administrative Agent on the Third Amendment Effective Date
by intrabank transfer of immediately available funds all accrued interest, fees
and any other amounts owing by it in respect of the Tranche B-1 Credit Linked
Deposit Amounts, the Tranche B-1 Loans and the Tranche B-1 Letters of Credit as
of such date (including any amounts payable pursuant to Section 2.22 of the
Credit Agreement as a result of the assignments and funding described in Section
3(a)).
(d) The Tranche B-1 Eurodollar Rate for the period from and
including the Third Amendment Effective Date to the last day of the calendar
month in which the Third Amendment Effective Date occurs shall be a rate
determined by the Administrative Agent for such period in a manner consistent
with the definition of Eurodollar Base Rate. The Administrative Agent will pay
to each Tranche B-1 Lender a return pursuant to Section 2.4(d) of the Credit
Agreement on the Third Amendment Effective Date for the period of the then
elapsed calendar month. On March 2, 2005 the Administrative Agent will pay the
return pursuant to
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Section 2.4(d) of the Credit Agreement for the portion of February 2005 accrued
after the Third Amendment Effective Date.
4. Amendments to Credit Agreement.
(a) Section 1.1 of the Credit Agreement is hereby amended by:
(i) adding the following new or substitute definitions in proper
alphabetical order:
"Applicable Margin": for (a) each Type of Loan, the rate per annum
set forth under the relevant column heading below:
ABR Loans Eurodollar Loans
--------- ----------------
Revolving Loans and Swingline Loans 2.25% 3.25%
Tranche B Term Loans 1.25% 2.25%
; and (b) for each Tranche B-1 Loan, at a rate per annum equal to 2.25%;
provided that from and after the first Adjustment Date occurring after the
first anniversary of the Closing Date, the Applicable Margin with respect
to Revolving Loans and Swingline Loans will be determined pursuant to the
Pricing Grid. Notwithstanding the foregoing, (i) the Applicable Margins for
the Tranche B Term Loans and the Tranche B-1 Loans (as determined in clause
(a) or (b) above, respectively), shall be reduced by .25% per annum
following the end of each fiscal quarter for which the Consolidated
Leverage Ratio is less than 3.0 to 1.0, as provided in the last paragraph
of Annex A, or at any time that the Borrower's senior secured long-term
debt ratings are (A) BB- or better from Standard & Poor's Ratings Group (or
any successor thereto) and B1 or better from Moody's Investors Service,
Inc. (or any successor thereto) or (B) Ba3 or better from Moody's Investors
Service, Inc. (or any successor thereto) and B+ or better from Standard &
Poor's Ratings Group (or any successor thereto) and (ii) the Applicable
Margin for Tranche B-1 Loans which are deemed to be ABR Loans pursuant to
Section 2.4(f) shall be 1.00% per annum less than the Applicable Margin for
Tranche B-1 Loans.
"Third Amendment": the Third Amendment dated as of February 17, 2005
to this Agreement.
"Third Amendment Effective Date": the date on which the conditions
set forth in Section 7 of the Third Amendment shall have been satisfied,
which date is February 24, 2005.
(ii) deleting the last four sentences of the definition of
"Consolidated EBITDA" and substituting therefor the following:
In addition, Consolidated EBITDA for each fiscal quarter of the Borrower
shall be increased by the amount of cash restructuring charges and related
expenses associated with restructurings undertaken by the Borrower and/or
its Subsidiaries in the United States and/or internationally included in
the calculation of
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Consolidated Net Income for such fiscal quarter, provided that the
aggregate amount of such cash restructuring charges announced and taken, in
each case, after the Third Amendment Effective Date shall not exceed
$60,000,000. For purposes of the foregoing sentence, "cash" restructuring
charges and related expenses shall be deemed to include any accrual of or
reserve for cash restructuring charges and related expenses for any future
period. In addition, for purposes of Section 7.1 of this Agreement,
Consolidated EBITDA for each fiscal quarter of the Borrower's 2004, 2005
and 2006 fiscal years shall be increased (but not by more than $11,000,000
in the aggregate for all of the Borrower's 2004 fiscal year and by not more
than $15,000,000 in the aggregate for all of the Borrower's 2005 and 2006
fiscal years combined) by the amount of aftermarket acquisition costs of
the Borrower and its Subsidiaries to the extent such costs otherwise reduce
Consolidated EBITDA for such fiscal quarter. In addition, in the event that
any Permitted Sale/Leaseback results in the Borrower or a Subsidiary
entering into an operating lease, then Consolidated EBITDA for any period
shall be deemed to be increased by the amount of lease payments under such
operating lease made during such period.
(iii) adding the following at the end of the definition of
"Consolidated Net Income":
Notwithstanding the foregoing, any reduction to Consolidated Net Income
otherwise required by the Borrower's adoption of FAS 123R shall be
disregarded in calculating Consolidated Net Income.
(iv) by (x) deleting the word "and" which appears before clause
(a)(vii) of the definition of "Excess Cash Flow" and substituting a comma
therefor and by adding the following at the end of clause (a)(vii):
and (viii) pension expenses of the Borrower and its Subsidiaries in
such period,
and (y) deleting the word "and" which appears before clause
(b)(xii) of the definition of "Excess Cash Flow" and substituting a comma
therefor and by adding the following at the end of such definition:
(xiii) pension contributions paid in cash by the Borrower and its
Subsidiaries during such period, and (xiv) amounts expended to
purchase and cancel or redeem the Borrower's Second Lien Notes as
permitted by clause (ii) of the last sentence of Section 7.15.
(v) by deleting the word "reduced" from the definition of each of
"Tranche B Term Loans" and "Tranche B-1 Credit Linked Deposit Amount" and
substituting therefor in each such definition the word "adjusted".
(b) Section 2.6(c) of the Credit Agreement is amended by
deleting the amounts "$55,000,000" and "$275,000,000" and substituting therefor
the amounts "$80,000,000" and "$300,000,000," respectively.
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(c) Section 2.10(b) of the Credit Agreement is amended by
substituting the following therefor:
(b) Optional prepayments of the Tranche B Term Loans and optional
reductions of the Total Tranche B-1 Credit Linked Deposit Amount effected
after the Third Amendment Effective Date and on or prior to the first
anniversary of the Third Amendment Effective Date with the proceeds of a
substantially concurrent issuance or incurrence of Indebtedness in
connection with refinancing of all or any portion of the Tranche B Term
Loans or the Tranche B-1 Credit Linked Deposit Amounts (other than in
connection with an increase in the Revolving Commitments pursuant to
Section 2.6(c)) shall be accompanied by a prepayment fee equal to 1.0% of
the aggregate amount of any such prepayment or reduction, payable on the
date of any such prepayment or reduction.
(d) Section 2.13 of the Credit Agreement is amended by adding
the following paragraph (f) at the end thereof:
(f) In addition to the foregoing, in the event that the Revolving
Commitments are at any time increased by more than $55,000,000 pursuant to
Section 2.6(c), the Total Tranche B-1 Credit Linked Deposit Amount shall be
concurrently permanently reduced by an amount equal to such excess (less
the amount of any reduction of the Total Tranche B-1 Credit Linked Deposit
Amount made after the Third Amendment Effective Date other than pursuant to
this paragraph (f)) on the terms set forth in Section 2.13(d).
(e) Section 7.2(c) of the Credit Agreement is amended by
deleting the amount "$70,000,000" and substituting therefor the amount
"$90,000,000".
(f) Section 7.8 of the Credit Agreement is amended by deleting
the amount "$25,000,000" from clause (j) and substituting therefor the amount
"$50,000,000."
(g) Section 7.15 of the Credit Agreement is amended by
deleting the last sentence therefrom and substituting therefor the following:
Notwithstanding the foregoing, as long as no Default or Event of Default
has occurred and is continuing (i) the Borrower may purchase and cancel or
redeem its Second Lien Notes from the Net Cash Proceeds of Permitted
Refinancing Indebtedness or from the Net Cash Proceeds of shares of common
stock of the Borrower issued substantially concurrently therewith and (ii)
on and after January 1, 2008 the Borrower may purchase and cancel or redeem
its Second Lien Notes; provided that (x) the aggregate consideration paid
by the Borrower pursuant to this clause (ii) shall not exceed $125,000,000
plus related fees and expenses and (y) after giving effect thereto, the
Consolidated Leverage Ratio (calculated on a pro forma basis to give effect
to such purchase, cancellation and redemption and the financing thereof) as
of the last day of the immediately preceding fiscal quarter would be less
than 3.0 to 1.0.
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(h) Section 10.2 of the Credit Agreement is amended by
deleting the name "Paul Novas" and substituting therefore the name "John Kunz"
and by deleting the name "Timothy Donovan" and substituting therefore the name
"Jeff Zimmerman."
(i) The Lenders waive any obligation of the Borrower to make a
prepayment pursuant to Section 2.13(c) from Excess Cash Flow for fiscal year
2004.
5. Amendment to Schedule 1.1A. Schedule 1.1A to the Credit Agreement
is hereby amended to the extent necessary to reflect the information contained
on Schedule 1.1A to this Amendment.
6. Representations and Warranties. The Borrower hereby confirms that
the representations and warranties set forth in Section 4 of the Credit
Agreement, as amended by this Amendment, are true and correct in all material
respects as if made as of the Third Amendment Effective Date (except such
representations and warranties as are made as of a particular date, which such
representations and warranties shall be true and correct in all material
respects as if made as of such date). The Borrower represents and warrants that,
after giving effect to this Amendment, no Default or Event of Default has
occurred and is continuing.
7. Effectiveness. This Third Amendment shall become effective as of
the date the conditions below are satisfied (the "Third Amendment Effective
Date"):
(a) Third Amendment. The Administrative Agent shall have
received this Third Amendment executed and delivered by the Administrative
Agent, the Borrower, each Tranche B Term Lender and Tranche B-1 Lender listed on
Schedule 1.1A and Lenders party to the Credit Agreement constituting the
"Required Lenders" thereunder (or, in the case of any Lender, a lender addendum
or joinder agreement in a form specified by the Administrative Agent).
(b) Fees. The Lenders, the Administrative Agent and their
affiliates shall have received all fees required to be paid on or before the
Third Amendment Effective Date, and all expenses required to be paid on or
before the Third Amendment Effective Date for which invoices have been timely
presented on or before the Third Amendment Effective Date.
(c) Confirmation of Security Documents. The Administrative
Agent shall have received the Acknowledgment and Confirmation, substantially in
the form of Exhibit A hereto, executed and delivered by an authorized officer of
the Borrower and each other Loan Party.
(d) Closing Certificate. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Third Amendment Effective
Date, substantially in the form of Exhibit C to the Credit Agreement, with
appropriate insertions and attachments.
(e) Legal Opinions. The Administrative Agent shall have
received the legal opinion of Mayer, Brown, Rowe & Maw LLP, counsel to the
Borrower, in form and substance reasonably satisfactory to the Administrative
Agent.
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8. Prepayment Notice. The Required Lenders hereby waive the
requirements of Section 2.12 of the Credit Agreement to the extent, but only to
the extent, such Section requires more than one Business Day's notice of the
Prepayment.
9. Waiver of Fee by Administrative Agent. The Administrative Agent
hereby waives the registration and processing fees of Section 10.6(f) of the
Credit Agreement in connection with, but only in connection with, the
assignments and assumptions set forth in Sections 2 and 3 of this Amendment.
10. Continuing Effect of the Credit Agreement. This Amendment shall
not constitute an amendment or waiver of any provision of the Credit Agreement
not expressly referred to herein and shall not be construed as a waiver or
consent to any further or future action on the part of the Borrower that would
require a waiver or consent of the Lenders, the Administrative Agent or the
Other Agents. Except as expressly amended hereby, the provisions of the Credit
Agreement are and shall remain in full force and effect.
11. Counterparts. This Amendment may be executed by the parties
hereto in any number of separate counterparts (including telecopied
counterparts), each of which shall be deemed to be an original, and all of which
taken together shall be deemed to constitute one and the same instrument.
12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.
TENNECO AUTOMOTIVE INC.
By: _____________________________
Name:
Title:
JPMORGAN CHASE BANK, N.A., as
Administrative Agent and as a Lender
By: ____________________________
Name:
Title:
THIRD AMENDMENT AND WAIVER
dated as of February 17,
2005 to the Tenneco
Automotive Inc. Amended and
Restated Credit Agreement,
dated as of December 12,
2003 (amending and
restating the Credit
Agreement dated as of
September 30, 1999)
----------------------------
[LENDER]
By: ________________________
Name:
Title:
Schedule 1.1A
Tranche B Tranche B-1 Credit
Lender Term Loans Linked Deposit Amounts
- ------ ------------------ ----------------------
$356,000,000.00 $180,000,000.00
EXHIBIT A
FORM OF ACKNOWLEDGMENT AND CONFIRMATION
1. Reference is made to Third Amendment and Waiver, dated as of
February 17, 2005 (the "Third Amendment"), to the Amended and Restated Credit
Agreement, dated as of December 12, 2003 (amending and restating the Credit
Agreement dated as of September 30, 1999) (as the same may be further amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Tenneco Automotive Inc., a Delaware corporation, the several banks and
other financial institutions or entities from time to time party thereto (the
"Lenders"), and JPMorgan Chase Bank, as administrative agent (in such capacity,
the "Administrative Agent"). Unless otherwise defined herein, capitalized terms
which are defined in the Credit Agreement, as amended by the Third Amendment,
are used herein as therein defined.
2. Each of the parties hereto hereby agrees, with respect to each
Security Document to which it is a party that all of its obligations,
liabilities and indebtedness under such Security Document shall remain in full
force and effect on a continuous basis, unimpaired, uninterrupted and
undischarged, after giving effect to the Third Amendment, including its
guarantee of the obligations, liabilities and indebtedness of the other Loan
Parties under the Credit Agreement.
3. Each of the parties hereto hereby represents and warrants to the
Administrative Agent and each Lender that all of the Liens and security
interests created and arising under such Security Document remain in full force
and effect on a continuous basis, and the perfected status and priority of each
such Lien and security interest continues in full force and effect on a
continuous basis, unimpaired, uninterrupted and undischarged, after giving
effect to the Third Amendment, as collateral security for its obligations,
liabilities and indebtedness under the Credit Agreement and under its guarantees
in the Security Documents.
4. The Borrower hereby agrees all of the obligations, liabilities
and indebtedness of the Borrower under the Credit Agreement are continued in
full force and effect on a continuous basis, unimpaired, uninterrupted and
undischarged, after giving effect to the Third Amendment.
5. The Guarantors hereby acknowledge and agree to all of the terms
of the Third Amendment.
6. THIS ACKNOWLEDGMENT AND CONFIRMATION SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
7. This Acknowledgment and Confirmation may be executed by one or
more of the parties hereto on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
[rest of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Acknowledgement and Consent to be duly executed and delivered by their proper
and duly authorized officers as of the day and year first above written.
TENNECO AUTOMOTIVE INC.
TENNECO AUTOMOTIVE OPERATING COMPANY INC.
TENNECO INTERNATIONAL HOLDING CORP.
TENNECO GLOBAL HOLDINGS INC.
THE PULLMAN COMPANY
TMC TEXAS INC.
CLEVITE INDUSTRIES INC.
By: __________________________________
Name:
Title: