Fourth Amendment to Loan and Security Agreement



 






Exhibit 4.2




FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT

AND LOAN DOCUMENTS




          This Fourth Amendment to Loan and Security Agreement, dated as of June ___, 2005 (this
“Amendment”), is entered into by and among Jacuzzi Brands, Inc., a Delaware corporation (“Parent”),
the other borrowers named on the signature page hereto (together with Parent, each a “Borrower”
and, collectively, “Borrowers”), Fleet Capital Corporation, a Rhode Island corporation, as
administrative agent and collateral agent (in such capacity, “Administrative Agent”) under the Loan
and Security Agreement referred to below, Silver Point Finance, LLC, as agent for the Term Loan B
Lenders (in such capacity, “Term Loan B Agent”) under the Loan and Security Agreement referred to
below, the Revolving Credit Lenders under the Loan and Security Agreement referred to below and the
Term Loan B Lenders under the Loan and Security Agreement referred to below.




RECITALS




     A. Borrowers, Administrative Agent, Term Loan B Agent, the Revolving Credit Lenders and the
Term Loan B Lenders are parties to that certain Loan and Security Agreement, dated as of July 15,
2003 (as amended by the First Amendment thereto, dated as of October 10, 2003, the Second Amendment
thereto, dated as of June 30, 2004, the Third Amendment thereto, dated as of June 17, 2005, and as
from time to time hereafter further amended, restated, supplemented or otherwise modified and in
effect, the “Loan Agreement”), pursuant to which the Revolving Credit Lenders and the Term Loan B
Lenders have made and the Revolving Credit Lenders will hereafter continue to make loans and
advances and other extensions of credit to Borrowers.



     B. Borrowers, Administrative Agent, Term Loan B Agent, the Revolving Credit Lenders and the
Term Loan B Lenders desire to amend the Loan Agreement as and to the extent set forth herein and
pursuant to, and subject to, the terms and conditions set forth in this Amendment.



     C. This Amendment shall constitute a Loan Document and these Recitals shall be construed as
part of this Amendment. Capitalized terms used herein without definition are so used as defined in
the Loan Agreement and Appendix A thereto.



          NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained and the Revolving Credit Lenders and Term Loan B Lenders continuing to make Loans
available under the terms of the Loan Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:




1. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows:




     1.1. The Trademark Advance Limit is immediately reduced to $0.



     1.2. Subsection 8.2.9 of the Loan Agreement is amended as follows:



 









 





          (a) By deleting the words “clauses (i) and (j)” from clause (h) thereof and replacing them
with the words “clauses (i) through (k)”;




          (b) By deleting the word “and” at the end of clause (i) thereof;




          (c) By replacing the period at the end of clause (j) with a semicolon and inserting the word
“and” after such semicolon; and




          (d) By inserting the following as a new clause (k) of such subsection:




“(k) the sale or other disposition of all the capital stock of Rexair Holdings, Inc. owned
by JUSI Holdings, Inc. (the “Rexair Sale”), as more fully described in the Agreement and
Plan of Merger, dated May 8, 2005, among Parent, JUSI Holdings, Inc. Rhone Sweep Holdings
LLC, Rhone Sweep Acquisition LLC, Rhone Sweep Acquisition Inc., Rhone Sweep Acquisition Sub
LLC and Rexair Holdings, Inc. (the “Rexair Merger Agreement”), subject to the following
conditions:



(i) the Rexair Sale shall be consummated substantially in accordance with the Rexair
Merger Agreement, including the annexes and schedules thereto, in the form delivered
to the Administrative Agent prior to the date of the Fourth Amendment to this
Agreement, with such amendments and modifications to the Rexair Merger Agreement as
shall be reasonably satisfactory to the Administrative Agent;



(ii) the allocation of the net proceeds of the Rexair Sale shall be as set forth on
Exhibit A to the Fourth Amendment to this Agreement; and



(iii) the Administrative Agent shall have received a legal opinion of Davis, Polk &
Wardwell, special counsel to Borrowers, as to such matters related to the Rexair
Sale, as the Administrative Agent shall reasonably request.”



     1.3. Subject to the consummation of the Rexair Sale, Exhibit 8.3 is amended by deleting from
the Consolidated Fixed Charge Coverage Ratio covenant chart, the following covenant test periods:
“For the Four Quarters ended June 30, 2005 and each September 30, December 31, March 31 and June 30
thereafter” and the covenant test ratio for such periods and replacing them with the following:



	 	 	 
	Period	 	Ratio 
	For the Four Quarters ended June 30, 2005

	 	1.15 to 1.0
	For the Quarter ended September 30, 2005

	 	1.15 to 1.0
	For the Two Quarters ended December 31, 2005

	 	1.15 to 1.0
	For the Three Quarters ended March 31, 2006

	 	1.15 to 1.0
	For the Four Quarters ended June 30, 2006
	 	 
	and each September 30, December 31, March 31
	 	 
	and June 30 thereafter

	 	1.15 to 1.0






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2. Additional Agreements.




     2.1. It is anticipated that, following the Rexair Sale described above and the application of
the net proceeds thereof, all Obligations under the Term Loan B will be repaid in full. If, and
only if, the Term Loan B Agent and the Term Loan B Lenders receive payment in full in cash of all
outstanding Obligations owing to them from the net proceeds of the Rexair Sale (including, without
limitation, any prepayment fees payable to the Term Loan B Lenders), then, upon such receipt of
payment, the Term Loan B Agent and the Term Loan B Lenders shall no longer have any rights or
obligations under the Loan Agreement and the other Loan Documents, except with respect to such
provisions of the Loan Agreement and the other Loan Documents that expressly survive the payment in
full of the Obligations and/or the termination of the Loan Agreement.



     2.2. Notwithstanding the provisions of subsection 3.4.2 of the Credit Agreement, if any Net
Asset Sale Proceeds from the Rexair Sale described above remain after application to repay the Term
Loan B in full and to pay down to $0 the then outstanding Swing Line Loans and the Revolving Credit
Loans, such remaining Net Asset Sale Proceeds shall not be applied to cash collateralize any then
issued and outstanding Letters of Credit, Acceptance and LC Guaranties so long as the amount of the
Borrowing Base at the time of such application exceeds the LC and Acceptance Amount.



     2.3. Pursuant to the Loan Agreement and the Loan Documents (including without limitation, the
Guaranty Agreement), upon the consummation of the Rexair Sale, each of Rexair and Rexair Holdings
shall be released and discharged from any and all liability it may incur or have incurred for the
performance of any obligations of any Borrower under any of the Loan Documents.



3. Representations and Warranties.




     3.1. The execution, delivery and performance of this Amendment and the Rexair Sale have been
or will be duly authorized by all necessary corporate or other relevant action and do not and will
not (i) contravene the charter, articles or certificate of incorporation, memorandum of
association, partnership agreement, certificate of formation, by-laws, limited liability agreement,
operating agreement or other organizational documents (as the case may be) of any Borrower or any
of its Subsidiaries; (ii) violate, or cause any Borrower or any of its Subsidiaries to be in
default under, any provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award in effect having applicability to any Borrower or any of its
Subsidiaries, the violation of which could reasonably be expected to have a Material Adverse
Effect; (iii) result in a breach of or constitute a default under any indenture or loan or credit
agreement, including, without limitation, the New Senior Secured Notes Indenture, or any other
agreement, lease or instrument to which any Borrower or any of its Subsidiaries is a party or by
which it or its Properties may be bound or affected, the breach of or default under which could
reasonably be expected to have a Material Adverse Effect; or (iv) result in, or require, the
creation or imposition of any Lien (other than Permitted Liens) upon or with respect to any of the
Properties now owned or hereafter acquired by any Borrower or any of its Subsidiaries.



     3.2. This Amendment is a legal, valid and binding obligation of each Borrower and each of its
Subsidiaries party hereto, enforceable against it in accordance with its respective



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terms subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws affecting creditors’ rights generally, and subject to general principles
of equity, regardless of whether considered in a proceeding in equity or at law.



4. Conditions to Effectiveness. The effectiveness of this Amendment is expressly
conditioned upon the satisfaction of each of the following conditions precedent in a manner
acceptable to Administrative Agent:




     4.1. Administrative Agent’s receipt of counterparts of this Amendment, duly executed by
Borrowers, Administrative Agent, Term Loan B Agent, Majority Lenders and Majority Term Loan B
Lenders, and duly acknowledged by each of the Guarantors.



     4.2. After giving effect to this Amendment, no Default or Event of Default shall have occurred
and be continuing or would result from the effectiveness of this Amendment or the consummation of
any of the transactions contemplated hereby.



5. Reference to and Effect Upon the Loan Agreement and other Loan Documents.




     5.1. The Loan Agreement, the Notes and each other Loan Document shall remain in full force and
effect and each is hereby ratified and confirmed by Borrowers and each other Loan Party. Without
limiting the foregoing, the Liens granted pursuant to the Security Documents shall continue in full
force and effect and the guaranties of the Guarantors shall continue in full force and effect.



     5.2. The execution, delivery and effect of this Amendment shall be limited precisely as
written and shall not be deemed to (a) be a consent to any waiver of any term or condition of, or
to any amendment or modification of, any term or condition (except as specifically set forth
herein) of the Loan Agreement or any other Loan Document or (b) prejudice any right, power or
remedy which the Administrative Agent or any Lender now has or may have in the future under or in
connection with the Loan Agreement, the Notes or any other Loan Document.



     5.3. Each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”
or any other word or words of similar import shall mean and be a reference to the Loan Agreement as
amended hereby, and each reference in any other Loan Document to the Loan Agreement or any word or
words of similar import shall be and mean a reference to the Loan Agreement as amended hereby.



6. Counterparts. This Amendment may be executed in any number of counterparts, each of
which when so executed shall be deemed an original but all such counterparts shall constitute one
and the same instrument. A counterpart signature page delivered by fax transmission shall be as
effective as delivery of an originally executed counterpart.




7. Costs and Expenses. As provided in Section 2.8 of the Loan Agreement, Borrowers shall
pay the fees, costs and expenses incurred by Administrative Agent and Term Loan B Agent in
connection with the preparation, execution and delivery of this Amendment (including, without
limitation, reasonable attorneys’ fees).




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8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF NEW
YORK.




9. 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 purpose.




[SIGNATURE PAGES FOLLOW]





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     IN WITNESS WHEREOF, this Amendment has been duly executed as of the date first written above.



	 	 	 
	 

	 	BORROWERS:
	 
	 

	 	JACUZZI BRANDS, INC.
	 

	 	BATHCRAFT, INC.
	 

	 	ELJER PLUMBINGWARE, INC.
	 

	 	GATSBY SPAS, INC.
	 

	 	JACUZZI, INC.
	 

	 	JUSI HOLDINGS, INC.
	 

	 	REDMONT, INC.
	 

	 	REXAIR, INC.
	 

	 	SUNDANCE SPAS, INC.
	 

	 	ZURN PEX, INC.
	 

	 	USI AMERICAN HOLDINGS, INC.
	 

	 	ZURCO, INC.
	 

	 	ZURN INDUSTRIES, INC.






	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ STEVEN C. BARRE 
	 

	 	 

	 

	 	Name:	 	Steven C. Barre 
	 

	 	 

	 

	 	Title:	 	Senior Vice President,
General Counsel and Secretary 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








     Each of the undersigned Guarantors hereby acknowledges the foregoing Amendment and ratifies
and confirms that each of the Loan Documents to which it is a party shall remain in full force and
effect (subject, in the case of Rexair Holdings, Inc. to the provisions of Section 2.3, which shall
become effective immediately upon consummation of the Rexair Sale).



	 	 	 
	 

	 	Asteria Company (f/k/a Elite Bath Company)
	 

	 	Bruckner Manufacturing Corp. (f/k/a Farberware Inc.)
	 

	 	Carlsbad Corp. (f/k/a Odyssey Sports, Inc.)
	 

	 	Compax Corp.
	 

	 	Eljer Industries, Inc.
	 

	 	Environmental Energy Company
	 

	 	Gary Concrete Products, Inc.
	 

	 	HL Capital Corp.
	 

	 	Jacuzzi Whirlpool Bath, Inc.
	 

	 	KLI, Inc. (f/k/a Keller Ladders, Inc.)
	 

	 	Krikles Canada U.S.A., Inc. (f/k/a Selkirk Canada
	 

	 	U.S.A., Inc.)
	 

	 	Krikles Europe U.S.A., Inc. (f/k/a Selkirk Europe
	 

	 	U.S.A., Inc.)
	 

	 	Krikles, Inc. (f/k/a Selkirk, Inc.)
	 

	 	Lokelani Development Corporation
	 

	 	Luxor Industries Inc.
	 

	 	Maili Kai Land Development Corporation
	 

	 	Mobilite, Inc.
	 

	 	Nissen Universal Holdings Inc.
	 

	 	Outdoor Products LLC
	 

	 	PH Property Development Company
	 

	 	PLC Realty Inc. (f/k/a Prescolite Lite Controls,
	 

	 	Inc.)
	 

	 	Sanitary - Dash Manufacturing Co., Inc.
	 

	 	SH 1 Inc.
	 

	 	Strategic Capital Management, Inc.
	 

	 	Strategic Membership Company
	 

	 	Streamwood Corporation (f/k/a Quantum Performance
	 

	 	Films, Inc.)
	 

	 	TA Liquidation Corp. (f/k/a Tommy Armour Golf
	 

	 	Company)
	 

	 	Trimfoot Co.
	 

	 	TT Liquidation Corp.
	 

	 	UGE Liquidation Inc. (f/k/a W.K. 25, Inc.)
	 

	 	USI Atlantic Corp.
	 

	 	USI Capital, Inc.
	 

	 	USI Funding, Inc.
	 

	 	USI Properties, Inc.
	 

	 	USI Realty Corp.
	 

	 	Zurn (Cayman Islands), Inc.






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT





 









 








	 	 	 
	 

	 	Zurn Constructors, Inc. (f/k/a Advanco Constructors,
	 

	 	Inc.)
	 

	 	Zurn EPC Services, Inc. (f/k/a National Energy
	 

	 	Production Corporation)
	 

	 	Zurnacq of California, Inc.






	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ STEVEN C. BARRE 
	 

	 	 

	 

	 	Name:	 	Steven C. Barre 
	 

	 	 

	 

	 	Title:	 	Vice President and Assistant Secretary 
	 

	 	 






	 	 	 	 	 	 	 
	 	 	JBI HOLDINGS LIMITED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ STEVEN C. BARRE 
	 

	 	 

	 

	 	Name:	 	Steven C. Barre 
	 

	 	 

	 

	 	Title:	 	Director 
	 

	 	 

	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JEFFREY B. PARK 
	 

	 	 

	 

	 	Name:	 	Jeffrey B. Park 
	 

	 	 

	 

	 	Title:	 	Director 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 	 	 
	 	 	FLEET CAPITAL CORPORATION, as Administrative Agent
and as a Revolving Credit Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ DAVID RITCHAY 
	 

	 	 

	 

	 	Name:	 	David Ritchay 
	 

	 	 

	 

	 	Title:	 	Senior Vice President 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 	 	 
	 	 	SILVER POINT FINANCE LLC, as Term Loan B Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ FREDERICK H. FOGEL 
	 

	 	 

	 

	 	Name:	 	Frederick H. Fogel 
	 

	 	 

	 

	 	Title:	 	Authorized Signatory 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 	 	 
	 	 	FIELD POINT I, LTD., as a Term Loan B Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ FREDERICK H. FOGEL 
	 

	 	 

	 

	 	Name:	 	Frederick H. Fogel 
	 

	 	 

	 

	 	Title:	 	Authorized Signatory 
	 

	 	 

	 
	 	 	 	 	 	 
	 	 	FIELD POINT II, LTD., as a Term Loan B Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ FREDERICK H. FOGEL 
	 

	 	 

	 

	 	Name:	 	Frederick H. Fogel 
	 

	 	 

	 

	 	Title:	 	Authorized Signatory 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 





	 	 	 	 	 	 	 
	 	 	WINGATE CAPITAL LTD., as a Term
Loan B Lender	 	 
	 	 	By: Citadel Limited Partnership, Portfolio Manager	 	 
	 	 	By: GLB Partners, L.P., its General Partner	 	 
	 	 	By: Citadel Investment
Group, L.L.C.	 	 
	 

	 	        its General Partner	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ MATTHEW HINERFELD
	 

	 	 

	 

	 	Name:	 	Matthew Hinerfeld
	 

	 	 

	 

	 	Title:	 	Deputy General Counsel
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT





 









 








	 	 	 	 	 	 	 
	 	 	WATCH TOWER CLO I, PLC as a Term Loan B Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ MATTHEW HINERFELD
	 

	 	 

	 

	 	Name:	 	Matthew Hinerfeld
	 

	 	 

	 

	 	Title:	 	Deputy General Counsel
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 





	 	 	 	 	 	 	 
	 	 	CREDIT SUISSE FIRST BOSTON, acting through its Cayman

Islands Branch, as a Revolving Credit Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ VANESSA GOMEZ
	 

	 	 

	 

	 	Name:	 	Vanessa Gomez
	 

	 	 

	 

	 	Title:	 	Vice President
	 

	 	 

	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ RIANKA MOHAN
	 

	 	 

	 

	 	Name:	 	Rianka Mohan
	 

	 	 

	 

	 	Title:	 	Associate
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 
	 	 	BANK ONE, NA, as a Revolving Credit Lender  
	 
	 	 	 	 
	 

	 	By:	 	/s/ KANDY ABRAMS
	 

	 	 

	 

	 	Name:	 	Kandy Abrams
	 

	 	 

	 

	 	Title:	 	Vice President
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 	 	 
	 	 	UBS AG, STAMFORD BRANCH, as a Revolving Credit Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ WILFRED V. SAINT 	 	 
	 

	 	 

	 

	 	Name:	 	Wilfred V. Saint 	 	 
	 

	 	 

	 

	 	Title:	 	Director, Banking Product Services, US 	 	 
	 

	 	 

	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ SALLOZ SIKKA 	 	 
	 

	 	 

	 

	 	Name:	 	Salloz Sikka 	 	 
	 

	 	 

	 

	 	Title:	 	Associate Director, Banking Product Services, US 	 	 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT





 









 








	 	 	 	 	 	 	 
	 	 	HSBC BUSINESS CREDIT (USA), INC., as a Revolving
Credit Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ DAN BUENO 	 	 
	 

	 	 

	 

	 	Name:	 	Dan Bueno 	 	 
	 

	 	 

	 

	 	Title:	 	Vice President 	 	 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 	 	 
	 	 	LASALLE BUSINESS CREDIT, LLC., as a Revolving Credit
Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ JEFFREY G. SAPERSTEIN 	 	 
	 

	 	 

	 

	 	Name:	 	Jeffrey G. Saperstein 	 	 
	 

	 	 

	 

	 	Title:	 	Vice President 	 	 
	 

	 	 






JACUZZI BRANDS: FOURTH
AMENDMENT TO LOAN AGREEMENT


 









 










	 	 	 	 	 	 	 
	 	 	THE CIT GROUP/BUSINESS CREDIT, INC., as a Revolving
Credit Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ EVELYN KUSOLD 	 	 
	 

	 	 

	 

	 	Name:	 	Evelyn Kusold 	 	 
	 

	 	 

	 

	 	Title:	 	Assistant Vice President 	 	 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








	 	 	 	 	 	 	 
	 	 	WEBSTER BUSINESS CREDIT CORPORATION, as a Revolving
Credit Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ OTTO BRUNKE 	 	 
	 

	 	 

	 

	 	Name:	 	Otto Brunke 	 	 
	 

	 	 

	 

	 	Title:	 	Assistant Vice President 	 	 
	 

	 	 






JACUZZI BRANDS: FOURTH AMENDMENT TO LOAN AGREEMENT




 









 








EXHIBIT A TO FOURTH AMENDMENT TO

LOAN AND SECURITY AGREEMENT




ALLOCATION OF PROCEEDS OF REXAIR SALE




See attached chart.