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Exhibit 10.38
NINTH AMENDMENT
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This Ninth Amendment (this "Amendment") is entered into as of
this 28th day of September, 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
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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 by the Eighth
Amendment to the Amended and Restated Credit Agreement dated as of May 2, 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.
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(a) SECTION 1.01 OF THE AGREEMENT IS HEREBY AMENDED BY
INSERTING THE FOLLOWING DEFINITIONS IN APPROPRIATE ALPHABETICAL ORDER:
"AERO-MOD TRANSACTION" shall mean the sale by the Company of
all of the outstanding capital stock of Aero-Mod Incorporated, a Delaware
corporation ("Aero-Mod"), and Waterlink Operational Services, Inc., a Delaware
corporation ("WOSI"), in a single transaction as described more specifically on
Annex A to the Ninth Amendment.
"NINTH AMENDMENT" shall mean the Ninth Amendment to this
Agreement, dated as of September 28, 2000.
"NINTH AMENDMENT EFFECTIVENESS DATE" shall mean the date upon
which the Agent advises the Company that the Ninth Amendment has become
effective.
(b) THE DEFINITIONS OF "2000 TL COMMITMENT" AND "INTEREST
PAYMENT DATE" IN SECTION 1.01 OF THE AGREEMENT ARE HEREBY AMENDED BY DELETING
EACH IN ITS ENTIRETY AND INSERTING THE FOLLOWING IN LIEU THEREOF:
"2000 TL COMMITMENT" means from and after the Ninth 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 Ninth
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Amendment; PROVIDED, that on November 15, 2000, the 2000 TL Commitment,
and the 2000 TL Commitment of each Bank, shall be reduced to zero.
"INTEREST PAYMENT DATE" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Offshore Rate
Loan and, as to any Base Rate Loan, the last Business Day of each
calendar month; PROVIDED, HOWEVER, that if any Interest Period exceeds
three months, the date that falls three months after the beginning of
such Interest Period and after each Interest Payment Date thereafter is
also an Interest Payment Date.
(c) THE DEFINITION OF "EBIT" IN SECTION 1.01 OF THE AGREEMENT
IS HEREBY AMENDED BY REPLACING THE PERIOD AT THE END OF SUBCLAUSE (C) WITH A
SEMI-COLON FOLLOWED BY THE WORD "AND", AND ADDING THE FOLLOWING SUBCLAUSE (D)
THERETO:
"(D) for all purposes for any period which includes the fourth
fiscal quarter of the Company's 2000 fiscal year or the first fiscal
quarter of the Company's 2001 fiscal year, there shall be excluded in
determining EBIT any expense or loss related to the Aero-Mod
Transaction, which serves to reduce Net Income of the Company and/or
its Subsidiaries in such fiscal quarter, PROVIDED, HOWEVER, that the
aggregate amount of such expenses or losses shall not exceed
$1,700,000."
(d) THE DEFINITION OF "EBITDA" IN SECTION 1.01 OF THE
AGREEMENT IS HEREBY AMENDED BY REPLACING THE PERIOD AT THE END OF SUBCLAUSE (C)
WITH A SEMI-COLON FOLLOWED BY THE WORD "AND", AND ADDING THE FOLLOWING SUBCLAUSE
(D) THERETO:
"(D) for all purposes for any period which includes the fourth
fiscal quarter of the Company's 2000 fiscal year or the first fiscal
quarter of the Company's 2001 fiscal year, there shall be excluded in
determining EBITDA any expense or loss related to the Aero-Mod
Transaction, which serves to reduce Net Income of the Company and/or
its Subsidiaries in such fiscal quarter, PROVIDED, HOWEVER, that the
aggregate amount of such expenses or losses shall not exceed
$1,700,000."
(e) CLAUSE (b) OF SECTION 2.09 OF THE AGREEMENT IS HEREBY
AMENDED BY DELETING IT IN ITS ENTIRETY AND REPLACING IT WITH THE
FOLLOWING IN LIEU THEREOF:
"(b) ASSET DISPOSITIONS. If the Company or any of its
Subsidiaries shall at any time or from time to time make or agree to make a
Disposition then (i) the Company shall promptly provide written notice to the
Agent of such proposed Disposition (including the amount of the estimated Net
Proceeds to be received by the Company in respect thereof) and (ii) promptly
upon receipt by the Company or its Subsidiary of the Net Proceeds of such
Disposition the Company shall FIRST, prepay Term Loans in an aggregate amount
equal to the amount of such Net Proceeds, to be applied to the Scheduled
Repayments in inverse order of maturity (PROVIDED, that in the event that the
Aero-Mod Transaction is consummated (x) on or prior to September 29, 2000, Net
Proceeds from the Aero-Mod Transaction shall be applied FIRST, to repay in full
the
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Scheduled Repayment due on September 29, 2000, SECOND, to repay $1,000,000 of
the Scheduled Repayment due on November 15, 2000, THIRD, to repay the Scheduled
Repayments in inverse order of maturity, FOURTH, to prepay Swing Line Loans
(without any reduction in the Swing Line Loan Commitment) and FIFTH, to prepay
Revolving Loans (without any reduction in the Revolving Loan Commitment) and (y)
after September 29, 2000 and on or before November 15, 2000, Net Proceeds from
the Aero-Mod Transaction shall be reduced by $700,000, then applied FIRST, to
repay $1,000,000 of the Scheduled Repayment due on November 15, 2000, SECOND, to
the Scheduled Repayments in inverse order of maturity, THIRD, prepay Swing Line
Loans (without any reduction in the Swing Line Loan Commitment) and FOURTH,
prepay Revolving Loans (without any reduction in the Revolving Loan
Commitment))."
(f) 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
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September 29, 2000 $ 700,000
November 15, 2000 1,000,000
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
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 November 15, 2000
the aggregate principal amount of Term Loans outstanding on such date
that were borrowed under the 2000 TL Commitment.
Any amendment to this SECTION 2.10(a) shall require the consent of all of the
Banks.".
(g) CLAUSE (b)(iii) OF SECTION 3.01 OF THE AGREEMENT IS HEREBY
AMENDED BY DELETING IT IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING IN
LIEU THEREOF:
"(iii) the expiry date of any requested Letter of Credit is
after the Revolving Termination Date;".
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(h) CLAUSE (f) OF SECTION 8.05 OF THE AGREEMENT IS HEREBY
AMENDED BY DELETING THE DOLLAR AMOUNT "$15,000,000" CONTAINED THEREIN AND
REPLACING IT WITH THE DOLLAR AMOUNT "$6,500,000."
(i) CLAUSE (b) OF SECTION 8.11 OF THE AGREEMENT IS HEREBY
AMENDED BY DELETING THE FOLLOWING PROVISO IN ITS ENTIRETY:
"; PROVIDED, HOWEVER, that the Company may make a one time
prepayment on any Subordinated Debt in an aggregate amount up to
$250,000".
(j) CLAUSE (a) OF SECTION 10.04 OF THE AGREEMENT AND SECTION
10.05 OF THE AGREEMENT ARE EACH HEREBY AMENDED TO INSERT THE FOLLOWING
PARENTHETICAL AFTER THE PHRASE "MAJORITY BANK" EACH TIME SUCH PHRASE APPEARS
THEREIN:
"(or all of the Banks if required by SECTION 11.01)".
(k) CLAUSE (a) OF SECTION 11.01 OF THE AGREEMENT IS HEREBY
AMENDED BY DELETING IT IN ITS ENTIRETY AND REPLACING IT WITH THE FOLLOWING IN
LIEU THEREOF:
"(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to SECTION 8.02) or
increase the amount of the L/C Commitment;".
SECTION 2. CONSENT
(a) Notwithstanding anything to the contrary contained in the
Agreement, the Banks hereby consent to the consummation of the Aero-Mod
Transaction, and hereby authorize the Agent and the Collateral Agent to take any
action each deems desirable to release Aero-Mod and WOSI from each Collateral
Document to which such Person is a party, release the Lien held by the
Collateral Agent on the capital stock of Aero-Mod and WOSI and return the
capital stock of Aero-Mod and WOSI to the Company.
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.
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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. EFFECTIVENESS. This Amendment shall become
effective as of the date first written above upon the delivery to the Agent of
executed signature pages (including by facsimile transmission) to this Amendment
signed by the Company and the Banks.
[signature pages follow]
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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: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Chief Financial Officer
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BANK OF AMERICA, N.A., as Agent
By: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
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BANK OF AMERICA, N.A., Individually as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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COMERICA BANK
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Assistant Vice President
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[TO NINTH AMENDMENT]
▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
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PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Vice President
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UNION BANK OF CALIFORNIA, N.A.
By: /s/ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title: Vice President
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[TO NINTH AMENDMENT]
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SCHEDULE I
2000 TL COMMITMENT ALLOCATION
Bank Amount Pro Rata Share
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Bank of America, N.A. $2,000,000 100%
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ANNEX A
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Proposed terms of sale of the stock of Aero-Mod Incorporated ("Aero-Mod") and
Waterlink Operational Services, Inc. ("WOSI"):
FORM OF TRANSACTION: Sale of 100% of the outstanding capital stock of
Aero-Mod and WOSI.
PURCHASE PRICE: $3.6 million cash at closing
FINANCIAL DATA: Projected FY 2000 Revenues - $6.2 million
Projected FY 2000 EBITDA - $(25,000)
Projected September 30, 2000 book value - $5.2 mil
