SECOND AMENDMENT TO FINANCING AGREEMENT
THIS SECOND AMENDMENT TO FINANCING AGREEMENT (this "Amendment"), dated as
of January 31, 2002, among HydroChem Industrial Services, Inc. ("Borrower"),
HydroChem Holding, Inc. ("Holding"), HydroChem International, Inc.
("International"), HydroChem Industrial Cleaning, Inc. ("Cleaning"; Holding,
International, and Cleaning are collectively referred to herein as "Guarantors"
and each individually as a "Guarantor"; Borrower and Guarantors are collectively
referred to herein as the "Restricted Persons" and each individually as a
"Restricted Person"), the several Lenders (as such term is defined in the
hereinafter described Financing Agreement) parties to this Amendment, and The
CIT Group/Business Credit, Inc. as Agent for the Lenders (in such capacity, the
"Agent").
R E C I T A L S:
A. Borrower, Guarantors, the Agent, and the several Lenders parties thereto
entered into that certain Financing Agreement dated as of October 25, 2001 (as
the same may be amended, modified, restated, supplemented, renewed, extended,
increased, rearranged and/or substituted from time to time, the "Financing
Agreement"). Capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Financing Agreement.
B. Borrower and Guarantors have requested that the Lenders agree to amend
the Financing Agreement as more fully described hereinbelow.
C. The several Lenders parties to this Amendment (which Lenders constitute
the Required Lenders required under the Financing Agreement to effect the
amendment intended hereby) are willing to agree to such amendment, subject to
the performance and observance in full of each of the covenants, terms and
conditions, and in reliance upon all of the representations and warranties of
the Borrower and the Guarantors, set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants, terms,
conditions, representations and warranties herein contained, the parties hereto
agree hereby as follows:
Section 1. AMENDMENTS TO FINANCING AGREEMENT. Subject to the covenants,
terms and conditions set forth herein and in reliance upon the representations
and warranties of the Borrower and the Guarantors herein contained, the
Borrower, the Guarantors, and the several Lenders parties to this Amendment
(which Lenders constitute the Required Lenders required under the Financing
Agreement to effect the following amendments) hereby agree to amend the
Financing Agreement, effective as of the Amendment Effective Date (as
hereinafter defined) as follows:
(a) Dilution Percentage. The definition of Dilution Percentage contained in
Section 1 of the Financing Agreement is hereby amended in its entirety to read
as follows:
"Dilution Percentage shall mean, as of any time of calculation, the then
sum of the Restricted Persons' returns, credits, allowances, discounts,
write-offs, contras, off-sets, and deductions (excluding any non-dilutive
credits given by any Restricted Person in connection with a re-▇▇▇▇ by such
Restricted Person no later than ten (10) Business Days from the date of the
original invoice) divided by the then sum of (i) all sales of the Grantors'
Inventory plus (ii) all sales of the Grantors' services, in each case in the
ordinary course of business and all calculated on a rolling ninety (90) day
average, as determined by Agent from time to time."
(b) Excess Availability. The definition of Excess Availability contained in
Section 1 of the Financing Agreement is hereby amended in its entirety to read
as follows:
"Excess Availability means, at any time of determination and without
duplication, the amount which is equal to (a) the then applicable Borrowing Base
minus (b) the aggregate outstanding principal balance of the Revolving Loans and
the aggregate face amount of all Letters of Credit."
(c) Representations, Warranties, and Covenants. Section 7.8 of the
Financing Agreement is hereby amended by adding thereto the following sentence
at the end of such section:
"In addition and without limitation of the foregoing, the Company will
promptly, and in any event within ten (10) Business Days after any officer of a
Restricted Person obtains knowledge thereof, provide notice to the Lenders of
(i) any litigation or governmental investigation or proceeding pending against
any Restricted Person or (ii) any other event, change or circumstance which has
had, or could reasonably be expected to have, a material adverse effect on the
Restricted Persons' financial condition taken as a whole or on any Restricted
Person's ability to perform any of its obligations under the Loan Documents."
(d) Line of Credit Fee. Section 8.6 of the Financing Agreement is hereby
amended in its entirety to read as follows:
"8.6 Upon the last Business Day of each month, commencing on November 30,
2001, the Company shall pay to the Agent for the benefit of each Lender the Line
of Credit Fee in accordance with the Fee Letter."
(e) Loan Facility Fee. Section 8.7 of the Financing Agreement is hereby
amended in its entirety to read as follows:
"To induce the Agent to enter into this Financing Agreement and to extend
to the Company the Revolving Loan, Letters of Credit Guaranties and the Term
Loans the Company has paid to the Agent for the benefit of each Lender a Loan
Facility Fee in accordance with the Fee Letter."
(f) Confidentiality. Section 14.14 of the Financing Agreement is hereby
amended in its entirety to read as follows:
"14.14 Lenders agree to maintain the confidentiality of any non-public
information provided by Restricted Persons to them, in the ordinary course of
their business, provided that the foregoing confidentiality provision shall
terminate one (1) year after the termination date of this Financing Agreement,
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and provided further that any such Lenders may disclose such information (i) to
any applicable bank regulatory and auditor personnel, (ii) to any Affiliate or
legal counsel of such Lender (provided that such Lender shall be responsible for
any breach of this Section 14.14 by such Lender, its Affiliates, and its legal
counsel), and (iii) as may otherwise be required under applicable law."
Section 2. CONDITIONS PRECEDENT. The parties hereto agree that this
Amendment and the amendments to the Financing Agreement contained herein shall
not be effective until the satisfaction of each of the following conditions
precedent:
(a) Execution and Delivery of this Amendment. The Agent shall have received
a copy of this Amendment executed and delivered by each of the Restricted
Persons and by Lenders constituting Required Lenders.
(b) Representations and Warranties. Each of the representations and
warranties made in this Amendment shall be true and correct on and as of the
Amendment Effective Date as if made on and as of such date, both before and
after giving effect to this Amendment.
Section 3. REPRESENTATIONS AND WARRANTIES. To induce the Agent and the
several Lenders parties hereto to enter into this Amendment and to agree to the
amendments contained herein, each of the Borrower and each Guarantor represents
and warrants to the Agent and the Lenders as follows:
(a) No Contravention, etc. The execution, delivery and performance by the
Restricted Persons of this Amendment have been duly authorized by all necessary
corporate action and do not and will not (i) contravene the terms of any charter
document of any Restricted Person, (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing any
contractual obligation to which any Restricted Person is a party or any order,
injunction, writ or decree of any governmental authority to which any Restricted
Person is a party or its property is subject, or (iii) violate any requirement
of law.
(b) Governmental Authorization. No approval, consent, exemption,
authorization or other action by, or notice to, or filing with or approvals
required under state blue sky securities laws or by any governmental authority
is necessary or required in connection with the execution, delivery, performance
or enforcement of this Amendment.
(c) Binding Effect. This Amendment, the Financing Agreement as amended
hereby, and the other Loan Documents constitute the legal, valid and binding
obligation of the Restricted Persons, enforceable in accordance with their
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
(d) No Default. No Default or Event of Default exists under any of the Loan
Documents. As of the date hereof, no Restricted Person is in default under or
with respect to (i) its charter documents or (ii) any material contractual
obligation of such Restricted Person. The execution, delivery and performance of
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this Amendment shall not result in any default under any contractual obligation
of any Restricted Person in any respect.
(e) Full Disclosure. As of the date hereof, all information that has been
made available to Agent or the Lenders by or on behalf of the Restricted Persons
in connection with the transactions contemplated herein is true and correct in
all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
maintained therein not materially misleading in light of the circumstances under
which such statements were made.
(f) Representations and Warranties. The representations and warranties set
forth in the Financing Agreement and the other Loan Documents are true and
correct on and as of the Amendment Effective Date, except to the extent that any
such representation or warranty relates to a specific date, both before and
after giving effect to the amendments contemplated in this Amendment, as if such
representations and warranties were being made on and as of the Amendment
Effective Date.
Section 4. MISCELLANEOUS
(a) Ratification and Confirmation of Loan Documents, etc. Except for the
specific amendments expressly set forth in this Amendment, the terms,
provisions, conditions and covenants of the Financing Agreement and the other
Loan Documents remain in full force and effect and are hereby ratified and
confirmed, and the execution, delivery and performance of this Amendment shall
not in any manner operate as a waiver of, consent to or amendment of any other
term, provision, condition or covenant of the Financing Agreement or any other
Loan Document. Without limiting the generality of the foregoing, nothing in this
Amendment shall be deemed (i) to constitute a waiver of compliance or consent to
noncompliance by any of the Restricted Persons with respect to any other term
provision, condition or covenant of the Financing Agreement or other Loan
Documents; (ii) to prejudice any right or remedy that Agent or the Lenders may
now have or may have in the future under or in connection with the Financing
Agreement or any other Loan Document; or (iii) to constitute a waiver of
compliance or consent to noncompliance by any of the Restricted Persons with
respect to the terms, provisions, conditions and covenants of the Financing
Agreement made the subject hereof. As a material inducement to Agent the Lenders
to execute this Amendment, the Restricted Persons hereby (i) acknowledge and
confirm the continuing existence, validity and effectiveness of the Liens
granted under the Loan Documents, (ii) agree that the execution, delivery and
performance of this Amendment shall not in any way release, diminish, impair,
reduce or otherwise affect such Liens, and (iii) acknowledge and agree that the
Liens granted under the Loan Documents secure the payment of the Obligations
under the Loan Documents, in the same priority as on the date such Liens were
created and perfected, and the performance and observance by the Restricted
Persons of the covenants, agreements and conditions to be performed and observed
by the Restricted Persons under the Financing Agreement and the other Loan
Documents, respectively.
(b) Fees and Expenses. The Borrower and the Guarantors jointly and
severally agree to pay on demand all costs and expenses of the Agent in
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connection with the preparation, reproduction, execution, and delivery of this
Amendment and any other documents prepared in connection herewith, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Agent.
(c) Headings. Section and subsection 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 or be given any substantive effect.
(d) APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
(e) Counterparts and Amendment Effective Date. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective when (i) each of the conditions precedent set forth in Section 2 of
this Amendment have been satisfied and (ii) the Agent has received counterparts
of this Amendment executed by the Borrower, each of the Guarantors and the
Lenders constituting Required Lenders (the "Amendment Effective Date").
(f) Affirmation of Guarantees. Notwithstanding that such consent is not
required thereunder, the undersigned Guarantors hereby consent to the execution
and delivery of this Amendment and reaffirm their respective obligations under
each of their respective Guaranties.
(g) Loan Document. This Amendment is a Loan Document and all of the
provisions of the Financing Agreement which apply to Loan Documents apply
hereto.
(h) FINAL AGREEMENT. THIS AMENDMENT, TOGETHER WITH THE FINANCING AGREEMENT
AND 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.
[The remainder of this page is intentionally left blank; signature pages
follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers
effective as of the Amendment Effective Date.
HYDROCHEM INDUSTRIAL SERVICES, INC.,
as Borrower
By: /s/ Pelham ▇. ▇. ▇▇▇▇▇
----------------------
Pelham ▇. ▇. ▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
HYDROCHEM HOLDING, INC., as a Guarantor
By: /s/ Pelham ▇. ▇. ▇▇▇▇▇
----------------------
Pelham ▇. ▇. ▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
HYDROCHEM INTERNATIONAL, INC., as a Guarantor
By: /s/ Pelham ▇. ▇. ▇▇▇▇▇
----------------------
Pelham ▇. ▇. ▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
HYDROCHEM INDUSTRIAL CLEANING, INC., as a
Guarantor
By: /s/ Pelham ▇. ▇. ▇▇▇▇▇
----------------------
Pelham ▇. ▇. ▇▇▇▇▇
Executive Vice President and
Chief Financial Officer
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THE CIT GROUP/BUSINESS CREDIT, INC., as
Agent and a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇.▇. ▇▇▇▇▇▇ CHASE BANK, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Duly Authorized Signatory
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