FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") dated as
of February 2, 1999, is by and between Hydrochem Industrial Services, Inc., a
Delaware corporation (the "Borrower") and Bank One, Texas, National Association
(the "Lender").
WITNESSETH:
WHEREAS, the Borrower and the Lender have entered into that certain
Loan Agreement dated as of July 17, 1998, pursuant to which the Lender agreed to
make a loan to the Borrower pursuant to the terms thereof (the "Loan
Agreement"); and
WHEREAS, the Borrower and the Lender desire to amend the Loan Agreement
as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, the Borrower and the Lender hereby agree as
follows:
1. Amendments to Loan Agreement.
(a) Section 1.1 of the Loan Agreement (Definitions) is hereby
amended effective as of September 30, 1998, as follows:
(i) The definition of "Capital Expenditures" is
amended by adding the clause ", and related furniture, office equipment,
computers and computer software" after the word Project in the sixth line
thereof.
(ii) The definition of "EBITDA" is hereby amended
and restated in its entirety as follows: "`EBITDA' means for the applicable
period, earnings before depreciation, amortization, interest expense, taxes and
extraordinary gains, plus certain restructuring and special charges accrued in
1998 up to a maximum of $1,000,000."
(b) Section 2.3(b)(i) of the Loan Agreement (Term Loan
Repayment) is amended to reflect September 30, 2006 as the "Term Loan Maturity
Date."
(c) Section 6.12 of the Loan Agreement (Restrictions on
Fundamental Changes) is hereby amended by adding the clause "and except for the
purchase of the assets and assumption of certain liabilities of Valley Systems,
Inc. and Valley Systems of Ohio, Inc." at the end thereof.
(d) Section 6.13 of the Loan Agreement (Liens) is hereby
amended by adding the clause "and except for Liens on assets of Valley Systems,
Inc. or Valley Systems of Ohio, Inc. existing at the time of the purchase of the
assets of such entities" after the word "Indenture" in the fifth line thereof.
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(e) Section 6.19 of the Loan Agreement (Minimum Consolidated
Net Worth) is hereby amended and restated in its entirety effective December 31,
1998, as follows:
"Section 6.19. Minimum Consolidated Net Worth The Borrower shall not
permit its Consolidated Net Worth to be less than the greater of (i)
$13,000,000, or (ii) ninety-five percent (95%) of its actual net worth
as of December 31, 1998, plus fifty percent (50%) of positive net
income since December 31, 1998, plus one hundred percent (100%) of the
net proceeds of any stock issuance."
2. Waiver. The Lender hereby waives the Borrower's non-compliance with
Section 6.20 (Fixed Charge Coverage Ratio) for the fiscal quarter ending
December 31, 1998, only.
3. Reaffirmation of Representations and Warranties. To induce the
Lender to enter into this Amendment, the Borrower hereby reaffirms, as of the
date hereof, its representations and warranties in their entirety contained in
the Loan Agreement and in all other documents executed pursuant thereto (except
to the extent such representations and warranties relate solely to an earlier
date in which case they shall have been true and accurate in all material
respects as of such earlier date) and additionally represents and warrants as
follows:
(a) The execution and delivery of this Amendment and the
performance by the Borrower of its obligations under this Amendment and the Loan
Agreement as amended hereby are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, have received all
necessary governmental and other approvals (if any shall be required), and do
not and will not contravene or conflict with the governance documents of the
Borrower or any provision of law, any presently existing requirement or
restriction imposed by any judicial, arbitral, regulatory or governmental
instrumentality or constitute a default under, or result in the creation or
imposition of any Lien other than a Permitted Lien upon any property or assets
of the Borrower or the Guarantor under, any agreement, instrument or indenture
by which the Borrower or the Guarantor is bound;
(b) This Amendment has been duly executed and delivered on
behalf of the Borrower and this Amendment and the Loan Agreement, as amended
hereby, are the legal, valid and binding obligations of the Borrower,
enforceable in accordance with their terms subject as to enforcement only to
bankruptcy, insolvency, reorganization, moratorium or other similar laws and
equitable principles affecting the enforcement of creditors' rights generally;
and
(c) No Default or Event of Default has occurred and is
continuing after giving effect to this Amendment.
4. Conditions. The effectiveness of this Amendment is subject to the
following conditions, all in form and substance satisfactory to the Lender:
(a) The Lender shall have received:
(i) Consent of Guarantor. The Guarantor shall
consent to this Amendment by executing and delivering to the Lender the Consent
and Acknowledgment attached hereto;
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(ii) Certificate of Officer of Borrower. A
certificate of the Secretary or Assistant Secretary and the President or
Vice President of the Borrower containing specimen signatures of the
persons authorized to execute this Amendment on the Borrower's behalf and any
other documents provided for herein, together with (x) copies of resolutions
of the Board of Directors of the Borrower authorizing the execution and
delivery of this Amendment and of all other legal documents or proceedings taken
by the Borrower in connection with the execution and delivery of this Amendment,
and (y) copies of the Borrower's Certificate of Incorporation, certified by the
Secretary of State of Delaware, and Bylaws, to the extent amended since July 17,
1998; and
(iii) Certificate of Existence and Good Standing.
A certificate of existence and good standing from the Secretary of State of the
State of Delaware with respect to the Borrower.
(b) All legal matters incident to the execution and delivery
of this Amendment shall be satisfactory to the Lender.
5. Reaffirmation of Loan Agreement. This Amendment shall be deemed to
be an amendment to the Loan Agreement, and the Loan Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Loan Agreement herein and in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the Loan
Agreement as amended hereby.
6. Defined Terms. Except as amended hereby, terms used herein when
defined in the Loan Agreement shall have the same meanings herein unless the
context otherwise requires.
7. Governing Law; Arbitration; Submission to Jurisdiction.
(a) The Loan Agreement, as amended hereby, and the other Loan
Documents, and the rights and duties of the parties thereto, shall be construed
in accordance with and governed by the internal laws of the State of Texas.
(b) EACH PARTY HERETO HEREBY WAIVES ITS RIGHT TO RESOLVE
DISPUTES, CLAIMS, AND CONTROVERSIES ARISING FROM THE LOAN AGREEMENT, AS AMENDED
HEREBY, ANY OTHER LOAN DOCUMENT OR ANY MATTER IN CONNECTION THEREWITH,
INCLUDING, WITHOUT LIMITATION, CONTRACT DISPUTES AND TORT CLAIMS, THROUGH ANY
COURT PROCEEDING OR LITIGATION AND ACKNOWLEDGES THAT ALL SUCH DISPUTES, CLAIMS
AND CONTROVERSIES SHALL BE RESOLVED PURSUANT TO THIS SECTION, EXCEPT THAT
EQUITABLE RELIEF AND CERTAIN OTHER RIGHTS AND REMEDIES SET FORTH BELOW MAY BE
SOUGHT FROM ANY COURT OF COMPETENT JURISDICTION. The Borrower represents to the
Lender and the Lender represents to the Borrower that this waiver is made
knowingly and voluntarily after consultation with and upon advice of counsel and
is a material part of this Agreement. All such disputes,claims and controversies
shall be resolved by binding arbitration pursuant to the commercial rules of the
American Arbitration Association ("AAA"). Any arbitration proceeding held
pursuant to this
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arbitration provision shall be conducted in Houston, Texas or at any other place
selected by mutual agreement of the Lender and the Borrower. No act to take or
dispose of any collateral shall constitute a waiver of this arbitration
agreement or be prohibited by this arbitration agreement. This arbitration
provision shall not limit the right of either party during any dispute, claim or
controversy to seek, use, and employ ancillary or preliminary rights and/or
remedies, judicial or otherwise, for the purposes of realizing upon, preserving,
protecting, foreclosing upon or proceeding under forcible entry and detainer for
possession of, any real or personal property, and any such action shall not be
deemed an election of remedies. Such remedies include, without limitation,
obtaining injunctive relief or a temporary restraining order, invoking a power
of sale under any deed of trust or mortgage, obtaining a writ of attachment or
imposition of a receivership or exercising any rights relating to personal
property, including exercising the right of set-off or taking or disposing of
such property with or without judicial process pursuant to the uniform
commercial code. Any disputes, claims or controversies concerning the lawfulness
or reasonableness of an act or exercise of any right or remedy concerning any
collateral, including any claim to rescind, reform or otherwise modify any
agreement relating to the collateral, shall also be arbitrated; provided,
however that no arbitrator shall have the right or the power to enjoin or
restrain any act of either party. Judgment upon any award rendered by any
arbitrator may be entered in any court having jurisdiction. The statute of
limitations, estoppel, waiver, laches and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable in
any arbitration proceeding, and the commencement of an arbitration proceeding
shall be deemed the commencement of any action for these purposes. The Federal
Arbitration Act (Title 9 of the United States Code) shall apply to the
construction, interpretation, and enforcement of this arbitration provision.
(c) To the fullest extent permitted by applicable law, each of
the Borrower and the Lender agrees that any court proceeding or litigation
permitted by Section 7(b) may be brought and maintained in the courts of the
State of Texas sitting in Xxxxxx County or the United States District Court for
the Southern District of Texas. To the fullest extent permitted by applicable
law, each of the Borrower and the Lender hereby expressly and irrevocably
submits to the jurisdiction of the courts of the State of Texas and the United
States District Court for the Southern District of Texas for the purpose of any
such litigation as set forth above and irrevocably agrees to be bound by any
judgment rendered thereby in connection with such litigation. To the fullest
extent permitted by applicable law, each of the Borrower and the Lender further
irrevocably consents to the service of process, by registered mail, postage
prepaid or by personal service within or without the State of Texas. To the
fullest extent permitted by applicable law, each of the Borrower and the Lender
hereby expressly and irrevocably waives any objection which it may have or
hereafter may have to the laying of venue of any such litigation brought in any
such court referred to above and any claim that any such litigation has been
brought in an inconvenient forum. To the extent that the Borrower or the Lender
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service of notice, attachment prior to
judgment, attachment in aid of execution or otherwise) with respect to itself or
its property, each of the Borrower and the Lender hereby irrevocably waives to
the fullest
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extent permitted by applicable law, such immunity in respect of its obligations
under this Agreement.
(D) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HERETO VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY (BY ITS
ACCEPTANCE HEREOF) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY COURT PROCEEDING
OR LITIGATION PERMITTED BY SECTION 7(B) AND WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, ANY OTHER
RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN THE LENDER, THE BORROWER, AND/OR
THE GUARANTOR, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR DISPUTE TO THE
EXTENT PERMITTED BY SECTION 7(B) SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDER TO PROVIDE THE LOAN.
8. Counterparts. This Amendment may be executed in any number of
counterparts, and by the different parties on different counterpart signature
pages, each of which when executed shall be deemed an original but all such
counterparts taken together shall constitute one and the same Amendment.
9. Severability. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10. Headings. Section headings used in this Amendment are for reference
only and shall not affect the construction of this Amendment.
11. Notice of Entire Agreement. This Amendment, together with the other
Loan Documents, constitute the entire understanding among the Borrower and the
Lender and supersedes all earlier or contemporaneous agreements, whether written
or oral, concerning the subject matter of the Amendment and the other Loan
Documents. THIS WRITTEN AMENDMENT TOGETHER WITH THE OTHER LOAN DOCUMENTS
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their duly authorized officers as of the day and
year first above written.
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BORROWER:
HYDROCHEM INDUSTRIAL SERVICES, INC., a
Delaware corporation
By: /s/ Selby F. Little, III
----------------------------
Name: Selby F. Little, III
Title: Executive Vice President and Chief
Financial Officer
LENDER:
BANK ONE, TEXAS, NATIONAL ASSOCIATION,
By: /s/ Xxxx X. Xxxx, Xx.
-------------------------
Name: Xxxx X. Xxxx, Xx.
Title: Vice President
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CONSENT AND ACKNOWLEDGMENT
The undersigned Guarantor, by its signature hereto, acknowledges and
agrees to the terms and conditions of that certain First Amendment to Loan
Agreement (the "Amendment") dated as of February 2, 1999, by and between
Hydrochem Industrial Services, Inc., a Delaware corporation (the "Borrower") and
Bank One, Texas, National Association (the "Lender"). The undersigned
acknowledges and reaffirms its obligations under its Guaranty (the "Guaranty")
and agrees that the Guaranty shall remain in full force and effect. Although the
undersigned Guarantor has been informed by the Borrower of the matters set forth
in the Amendment, and the undersigned has acknowledged and agreed to same, the
undersigned understands and agrees that the Lender has no duty to notify the
Guarantor or to seek the Guarantor's acknowledgment or agreement, and nothing
contained herein shall create such a duty as to any transactions hereafter.
Dated as of February 2, 1999.
HYDROCHEM INTERNATIONAL, INC., a
Delaware corporation
By: /s/ Selby F. Little, III
----------------------------
Name: Selby F. Little, III
Title: Executive Vice President and Chief
Financial Officer
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