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EXHIBIT 4(d)
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT ("Amendment") is made as of
October 31, 1997 by and between MPW Industrial Services, Inc. ("MPW, Inc."), MPW
Industrial Services, Ltd. ("MPW, Ltd."), MPW Management Services Corp. ("MPW
Corp."), Weston Engineering, Inc. ("Weston"), Pro Kleen Industrial Services,
Inc. ("Pro Kleen"), Aquatech Environmental, Inc. ("Aquatech", which, together
with the foregoing parties, being referred to herein collectively as the
"Original Borrowers", and individually as an "Original Borrower"), MPW
Industrial Services Group, Inc. ("MPW Group"), ESI International, Inc.,
successor in interest to MPW Filtration Acquisition Corp. by virtue of name
change ("ESII"), ESI North, Limited ("ESI") and Bank One, NA, successor by
merger to Bank One, Columbus, NA, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
("Bank One").
WHEREAS, MPW, Inc., MPW, Ltd., MPW Corp., Weston and Aquatech are
hereinafter referred to collectively as the "Original Companies" and
individually as an "Original Company"; each of the Original Companies, MPW
Group, ESII and ESI are hereinafter collectively referred to as the "Companies"
and individually as a "Company"; and the Original Borrowers, MPW Group, ESII and
ESI are hereinafter collectively referred to as the "Borrowers" and individually
as a "Borrower"; and
WHEREAS, the Original Borrowers and Bank One entered into a loan
agreement dated as of June 30, 1996 (the "Loan Agreement"); and
WHEREAS, the Original Borrowers and Bank One entered into that certain
First Amendment to Loan Agreement dated as of September 26, 1997 (the "First
Amendment"); and
WHEREAS, the Loan Agreement as previously amended by the First
Amendment is hereinafter referred to as the "Credit Agreement"; and
WHEREAS, the parties to the Credit Agreement desire to have MPW Group,
ESII and ESI become parties (as both Companies and Borrowers) to the Credit
Agreement by this Amendment; and
WHEREAS, the parties hereto desire to further amend the Credit
Agreement as set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. The capitalized terms not defined herein shall have the
meaning ascribed in the Credit Agreement.
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2. The Credit Agreement is hereby amended by inserting a new
Section 3.6 which shall read as follows:
3.6 ESI ACQUISITION LOAN.
3.6.1 LOAN. Bank One agrees to lend to Borrowers the sum of Three
Million Dollars ($3,000,000) (the "ESI Loan").
3.6.2 ESI ACQUISITION NOTE. Borrowers shall execute and deliver to
Bank One the promissory note executed by duly authorized
officers thereof in the form of Exhibit 3.6 attached hereto
(the "ESI Acquisition Note").
3. The Credit Agreement is hereby amended by deleting Section 6.1
in its entirety and inserting in lieu thereof and instead therefor the
following:
6.1 ORGANIZATION & AUTHORITY TO EXECUTE LOAN DOCUMENTS.
6.1.1 BORROWERS, OTHER THAN ESI. Borrowers, other than ESI, are duly
organized and existing corporations under the laws of the
jurisdictions of their incorporation and are qualified to do
business in all states where such qualification is necessary,
except such jurisdiction, if any, where failure to be
qualified will not have a material adverse effect on the
Borrowers taken as a whole; the execution hereof by the
Borrowers, other than ESI, has been duly authorized by all
necessary corporate action; there is no prohibition, either by
law, in their articles of incorporation, code of regulations,
by-laws or in any agreement to which the Borrowers, other than
ESI, are a party, which in any way prohibits or would be
violated by the execution and carrying out of this Agreement
in any respect; this Agreement has been duly executed and is
the valid and binding obligation of the Borrowers jointly and
severally; and, the Notes issued and delivered to Bank One as
payee pursuant to the provisions hereof will also be valid and
binding obligations of Borrowers, jointly and severally.
6.1.2 ESI. ESI is a duly organized and existing limited liability
company under the laws of the jurisdiction of its organization
and is qualified to do business in all states where such
qualification is necessary, except such jurisdiction, if any,
where failure to be qualified will not have a material adverse
affect on the Borrowers taken as a whole; the execution hereof
by ESI has been duly authorized by all necessary action; there
is no prohibition, either by law, in its certificate of
formation, limited liability company agreement, operating
agreement, by-laws or other governing instruments which in any
way
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prohibits or would be violated by the execution and carrying
out of this Agreement in any respect; this Agreement has been
duly executed and is the valid and binding obligation of ESI;
and, the Notes issued and delivered to Bank One as payee
pursuant to the provisions hereof will also be valid and
binding obligations of ESI.
4. The Credit Agreement is hereby amended by deleting Section 6.3
in its entirety and inserting in lieu thereof and instead therefor the
following:
6.3 NO GUARANTIES OF OTHERS' OBLIGATIONS. None of the Borrowers
have made material investments in, advances to or guaranties
of the obligations of any Person except as disclosed in the
Financial Statements described in Sections 7.1 and 7.2, or as
set forth in Sections 3.3, 3.5 and 3.6, or as disclosed in
Article II of Schedule A attached hereto.
5. The Credit Agreement is hereby amended by deleting Section 6.5
in its entirety and inserting in lieu thereof and instead therefor the
following:
6.5 NO UNDISCLOSED LIABILITIES. Borrowers have no material
liabilities, direct or contingent, except as disclosed in the
Financial Statements described in Sections 7.1 and 7.2 or
disclosed on Schedule A attached hereto.
6. The Credit Agreement is hereby amended by deleting Section 6.7
in its entirety and inserting in lieu thereof and instead therefor the
following:
6.7 GOOD TITLE TO ASSETS AND NO UNDISCLOSED LIENS. Borrowers have
good and marketable title to all the property and assets
reflected as being owned by them in the Financial Statements
described in Sections 7.1 and 7.2, subject to no liens, other
than liens reflected on either Schedule A attached hereto or
on said Financial Statements or Permitted Liens, except
property and assets disposed of since such date in the
ordinary course of business.
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7. The Credit Agreement is hereby amended by deleting Section 7.7
in its entirety and inserting in lieu thereof and instead therefor the
following:
7.7 CHANGES IN ORGANIZATION DOCUMENTS. Borrowers shall promptly
provide Bank One with written notice after changes are made of
any amendments to or changes in their articles/certificate of
incorporation, charter, articles of organization, certificate
of formation, limited liability company agreement, operating
agreement, code of regulations, by-laws and/or other governing
instruments, including such changes as might affect the
structure, condition, operation or management of Borrowers and
Borrowers' obligations to Bank One under the terms of this
Agreement and shall make such amended articles of
incorporation, charter, articles of organization, certificate
of formation, limited liability company agreement, operating
agreement, code of regulations, by-laws and/or other governing
instruments available for inspection by Bank One upon demand.
8. The Credit Agreement is hereby amended by deleting Section
7.13 in its entirety and inserting in lieu thereof and instead therefor the
following:
7.13 MAINTAIN AND PRESERVE ASSETS AND MANAGEMENT. Borrowers shall
use reasonable efforts in good faith to maintain and preserve
in good working order and condition, ordinary wear and tear
excepted, all of Borrowers' properties necessary for the
conduct of their business, if failure to maintain and preserve
such properties would over a substantial period of time
materially and adversely affect the Borrowers taken as a
whole. In addition, MPW Group shall maintain a management team
for the management of the Borrowers which is reasonably
similar, in terms of collective expertise and experience, as
is existing at the time of the execution of this Agreement.
9. The Credit Agreement is hereby amended by deleting Section
7.19, in its entirety and inserting in lieu thereof and instead therefor the
following:
7.19 PAYMENT IN FULL UPON TRANSFER OF CERTAIN STOCK. In the event
all or any part of the shares or other interests in any
Borrower owned of record or beneficially by ▇▇▇▇▇ ▇. ▇▇▇▇▇ are
sold, assigned, transferred in trust, pledged, mortgaged,
disposed of, or otherwise encumbered or transferred other than
as described in Schedule A without the prior written consent
of Bank One, Borrowers shall within ten (10) calendar days of
such event, pay to Bank One all amounts due and owing from
Borrowers to Bank One under this Agreement
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and the Notes and depositing in cash with Bank One a sum equal
to aggregate stated amounts of any then outstanding Letter(s)
of Credit.
10. The Credit Agreement is hereby amended by deleting Section 8.1
in its entirety and inserting in lieu thereof and instead therefor the
following:
8.1 ENCUMBERING ASSETS. Create, incur, assume or permit to
continue any mortgage, pledge, encumbrance, lien or charge of
any kind upon or security interest in any of its property or
assets, whether now owned or hereafter acquired, except for
(i) a mortgage on the principal facility of ESI in Nashville,
Tennessee securing a promissory note of ESI with a current
outstanding balance as of October 31, 1997 of not more than
$480,000 and (ii) Permitted Liens.
11. The Credit Agreement is hereby amended by deleting Section 8.2
in its entirety and inserting in lieu thereof and instead therefor the
following:
8.2 INCURRING OTHER DEBT. Create, incur, assume or suffer to exist
any Funded Debt or Current Debt except (i) debt represented by
the Notes issued hereunder; (ii) other indebtedness to Bank
One; (iii) Funded Debt which, in the sole opinion of counsel
for Bank One, is satisfactorily subordinated to all
indebtedness owing Bank One; (iv) unsecured indebtedness to
trade creditors arising out of the ordinary course of each
Borrower's business; (v) an aggregate amount not to exceed
$500,000 for purchase money debt, project financing and
assumed liabilities of any acquired business; (vi) any
intercompany debt; and (vii) existing and currently
anticipated capitalized leases between Borrowers and ▇▇▇▇▇ ▇.
▇▇▇▇▇ or the Black Family Limited Partnership as shown on the
Combined Financial Statements dated as of, and for the period
ended on, June 30, 1997; (viii) Executive Option Liabilities;
and (ix) existing Funded Debt set forth on Schedule A attached
hereto.
12. The Credit Agreement is hereby amended by deleting Section 8.3
in its entirety and inserting in lieu thereof and instead therefor the
following:
8.3 GUARANTY OF OTHERS' DEBTS. Assume, guarantee, endorse,
contingently agree to purchase or otherwise become liable upon
the obligation of any Person (except intercompany guarantees
or guarantees existing on the date of this agreement, and the
assumption of the Funded Debt listed and delineated on
Schedule A attached hereto) in an amount in excess of
$500,000.
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13. The Credit Agreement is hereby amended by deleting Section 8.4
in its entirety and inserting in lieu thereof and instead therefor the
following:
8.4 MERGER OF CONSOLIDATION. Except as described on Schedule A,
merge or consolidate with any other corporation or any other
business entity except that Borrowers may merge or consolidate
with each other.
14. The Credit Agreement is hereby amended by deleting Section 8.5
in its entirety and inserting in lieu thereof and instead therefor the
following:
8.5 TRANSFER OF SUBSTANTIAL PORTION OF ASSETS. Liquidate or sell,
lease, transfer or otherwise dispose of (except intercompany
transactions) all or any substantial part of its assets other
than (i) in the ordinary course of business without the prior
written approval of Bank One, which shall not be unreasonably
withheld, and (ii) upon the payment in full of the Airplane
Loan, the sale of the airplane owned by MPW, Inc. to ▇▇▇▇▇ ▇.
▇▇▇▇▇ at a price of $3,600,000. All cash proceeds from any
such sale, lease or transfer (other than intercompany
transactions) shall be remitted by Borrowers to Bank One to be
applied to the Notes.
15. The Credit Agreement is hereby amended by deleting Section 8.6
in its entirety and inserting in lieu thereof and instead therefor the
following:
8.6 DISPOSING OF NOTES/ACCOUNTS RECEIVABLE. Discount or sell
(except through intercompany transactions) any of its notes or
accounts receivable.
16. The Credit Agreement is hereby amended by deleting Section
8.11 in its entirety and inserting in lieu thereof and instead therefor the
following:
8.11 DISTRIBUTIONS. Declare or pay any dividends, purchase, redeem,
retire or otherwise acquire for value any of their capital
stock now or hereafter outstanding including return of any
capital to their shareholders or interest holders or make any
distribution of assets to their shareholders or interest
holders, otherwise than (i) pursuant to MPW, Inc.'s 1994 Stock
Option Plan and 1991 Stock Option Plan, and (ii) as described
on Schedule A attached hereto.
17. The Credit Agreement is hereby amended by inserting a new
Section 8.13 which shall read as follows:
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8.13 Prepay, anticipate, collateralize or secure, directly or
indirectly, any obligation of any Borrower (i) to any Payee
(as defined in subpart (b) of Article II of Schedule A
attached hereto),or (ii) to any other Person with respect to
obligations the payment of which is subordinated to the
payment of obligations of any Borrower to Bank One, without
the express prior written consent of Bank One, or as permitted
by the terms of the Subordination Agreement referenced in
subpart (b) of Article II of Schedule A attached hereto.
18. The Credit Agreement is hereby amended by inserting a new
paragraph 9.10 which shall read as follows:
9.10 Any Payee shall fail to observe or perform any covenant,
condition or agreement to be observed or performed pursuant to
the terms of the Subordination Agreement dated October 29,
1997 referred to at Article II of Schedule A attached hereto.
19. The definition of the term "Combined" in Section 10.1 of the
Credit Agreement is hereby amended and restated to read as follows:
"Combined" shall include all Companies and all Subsidiaries
and shall mean, in reference to financial statements and
reports, any covenants, representations, warranties, or
agreements of Companies under this Agreement, or Definitions
in this section, that the same are prepared or determined on a
consolidated basis in accordance with generally accepted
accounting principles applied on a consistent basis; provided,
however, that the interim financial statements and reports
referred to in Section 7.2 shall (i) not require footnotes,
and (ii) be subject to year end audit adjustments.
20. The definition of the term "Combined Tangible Net Worth" in
Section 10.1 of the Credit Agreement is hereby amended and restated to read as
follows:
"Combined Tangible Net Worth" shall mean the Combined net
worth of Borrowers (after eliminating all intercompany
accounts and all effects of the Executive Option Noncash
Expense), (i) less all combined Intangible Assets of
Borrowers, and (ii) plus, for the period from October 29, 1997
through and including December 30, 1997, the outstanding
principal amount of the subordinated notes payable to the
Payees as referred to at subpart (b) of Article II of Schedule
A attached hereto. Net worth and Intangible Assets shall be
determined in accordance with generally accepted accounting
principles applied
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on a consistent basis provided, however, that Combined
Tangible Net Worth shall include no appraisal surplus of any
type or description.
21. The definition of the term "Loans" in Section 10.1 of the
Credit Agreement is hereby amended and restated to read as follows:
"Loans" means, jointly and severally, the Airplane Loan, the
Conversion Option Loan, the Equipment Loan, the Revolving
Credit Loan, the Weston Acquisition Loan and the ESI
Acquisition Loan.
22. The definition of the term "Notes" in Section 10.1 of the
Credit Agreement is hereby amended and restated to read as follows:
"Notes" means, jointly and severally, the Aircraft Note, the
Conversion Option Note, the Equipment Note, the Revolving
Credit Note, the Weston Acquisition Note and the ESI Note.
23. The definition of the term "Term Loan" in Section 10.1 of the
Credit Agreement is hereby amended and restated to read as follows:
"Term Loan" means, jointly and severally, the Airplane Loan,
the Conversion Option Loan, the Equipment Loan, the Weston
Acquisition Loan and the ESI Acquisition Loan.
24. The definition of the term "Term Note" in Section 10.1 of the
Credit Agreement is hereby amended and restated to read as follows:
"Term Note" means, jointly and severally, the Aircraft Note,
the Conversion Option Note, the Equipment Note, the Weston
Acquisition Note and the ESI Acquisition Note.
25. MPW Group, ESII and ESI are hereby made parties, both as
Companies and Borrowers, to the Credit Agreement, and all references to the
terms "Company", "Companies", "Borrower" and "Borrowers," respectively, in the
Credit Agreement shall include MPW Group, ESII and ESI.
26. Exhibits 2.1.3A, 2.3.2A, 3.1, 3.2 and 3.3 of the Credit
Agreement are hereby amended and restated to read as set forth in Exhibits
2.1.3B, 2.3.2B, 3.1A, 3.2A and 3.3A attached to this Amendment, and Schedule A
and Exhibit 3.6 attached to this Amendment shall be added to the Credit
Agreement as Schedule A and Exhibit 3.6 thereto. Borrowers shall execute and
deliver to Bank One promissory notes in the form of Exhibits 2.1.3B, 3.1A, 3.2A,
3.3A and 3.6 attached to this Amendment.
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27. Conditions to Bank One's Obligations. The obligations of Bank
One to enter into this Amendment and be bound by the terms hereof are subject to
Bank One receiving the following, each in form and substance satisfactory to
Bank One and its counsel:
(a) Documents. All documents and instruments referenced in
this Amendment, duly executed by the parties thereto.
(b) Certified Resolutions. Certified copies of resolutions
duly adopted by the governing body of each Borrower, authorizing the
execution and delivery of this Amendment and all documents and
instruments referred to herein to which each is a party.
(c) Secretary's Certificate. Signed copy of a certificate of
the secretary, assistant secretary or other appropriate officer/member
of each Borrower, which shall certify the names of the officers of the
such Borrower authorized to sign this Amendment and the other documents
or certificates of the Borrower to be executed and delivered pursuant
hereto. Bank One may conclusively rely upon such certificate until it
shall receive a further certificate of such respective secretary,
assistant secretary or other appropriate officer/member (A) cancelling
or amending the prior certificate, and (B) submitting the signatures of
the officers named in such further certificate.
(d) Opinions. Opinions of legal counsel to the Borrowers
covering such matters and in form and substance satisfactory to Bank
One.
(e) Other Requirements. Such other certificates, documents and
other items as Bank One, in its reasonable discretion, deems necessary
or desirable.
28. Borrowers represent and warrant that (a) the representations
and warranties contained in the Credit Agreement are true and correct in all
material respects as of the date of this Amendment, (b) no condition, act or
event could constitute an Event of Default under the Credit Agreement exists,
and (c) no condition, event, act or omission has occurred, which, with the
giving of notice or passage of time, would constitute an Event of Default under
the Credit Agreement.
29. Borrowers agree to pay (i) all fees and out-of-pocket
disbursements incurred by Bank One in connection with this Amendment, including
legal fees incurred by Bank One in the preparation, consummation, administration
and enforcement of this Amendment, and (ii) a fee to Bank One in the amount of
$5,000 in connection with this Amendment and the transactions contemplated
thereby.
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30. This Amendment shall become effective only after it is fully
executed by the Borrowers and Bank One. Except as modified by this Amendment,
the Credit Agreement shall remain in full force and effect in accordance with
its terms.
31. This Amendment is a modification only and not a novation.
Except for the above-quoted modification(s), the Credit Agreement, any agreement
or security document, and all the terms and conditions thereof, shall be and
remain in full force and effect with the changes herein deemed to be
incorporated therein. This Amendment is to be considered attached to the Credit
Agreement and made a part thereof. This Amendment shall not release or affect
the liability of any guarantor, surety or endorser of the Credit Agreement or
release any owner of collateral securing the Credit Agreement. The validity,
priority and enforceability of the Credit Agreement shall not be impaired
hereby. To the extent that any provision of this Amendment conflicts with any
term or condition set forth in the Credit Agreement, or any agreement or
security document executed in conjunction therewith, the provisions of this
Amendment shall supersede and control.
32. Borrowers acknowledge and agree that this Amendment is limited
to the terms outlined above, and shall not be construed as an amendment of any
other terms or provisions of the Credit Agreement; Borrowers hereby specifically
ratify and affirm the terms and provisions of the Credit Agreement. This
Amendment shall not establish a course of dealing or be construed as evidence of
any willingness on Bank One's part to grant other or future amendments, should
any be requested.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the day and year first above written.
Bank One, NA MPW Industrial Services, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Vice President Its: Controller
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Date: October 31, 1997 Date: October 31, 1997
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MPW Industrial Services, Ltd. MPW Management Services Corp.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Controller Its: Controller
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Date: October 31, 1997 Date: October 31, 1997
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Weston Engineering, Inc. Pro Kleen Industrial Services,
Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Its: Controller Its: Vice President & CFO
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Date: October 31, 1997 Date: October 31, 1997
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Aquatech Environmental Services, Inc. MPW Industrial Services Group,
Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Vice President & Treasurer Its: Controller
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Date: October 31, 1997 Date: October 31, 1997
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ESI International, Inc. ESI North, Limited
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Controller Its: Controller
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Date: October 31, 1997 Date: October 31, 1997
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