Exhibit 10.1
SECOND AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
          THIS SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT
(this “Amendment”) dated as of October 28, 2005 (the “Effective Date”), is among
VALLEY NATIONAL GASES, INC., a West Virginia corporation (the “Company”), VALLEY
NATIONAL GASES INCORPORATED, a Pennsylvania corporation (“VNGI”), VALLEY
NATIONAL GASES DELAWARE, INC., a Delaware corporation (“VNGDI”), JPMORGAN CHASE
BANK, N.A. (successor by merger to Bank One, N.A. (Main Office Chicago)),
NATIONAL CITY BANK, a national banking association, FIFTH THIRD BANK, and
LASALLE BANK NATIONAL ASSOCIATION, a national banking association (collectively,
the “Lenders”), and JPMORGAN CHASE BANK, N.A., as Administrative Agent (the
“Agent”) for the Lenders from time to time parties to that certain Third Amended
and Restated Credit Agreement, dated as of April 30, 2004, as amended by the
First Amendment to Third Amended and Restated Credit Agreement dated as of
June 24, 2004 (the “Credit Agreement”).
Recital
          Pursuant to Section 2.02(g) of the Credit Agreement, the Company has
requested the Lenders to increase their aggregate Commitments to $90,000,000.00,
and to consent to a New Acquisition not permitted under the Credit Agreement.
Subject to the terms and conditions stated in this Amendment, the Lenders are
willing to increase their respective Commitments and to consent to the proposed
New Acquisition, which requires the Lenders’ approval under the Credit
Agreement.
Amendment
          NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein, and each act performed and to be performed hereunder, the
parties hereto agree as follows:
          1. Definitions. All terms used in this Amendment that are defined in
the Credit Agreement and that are not otherwise defined in this Amendment shall
have the same meanings in this Amendment as are ascribed to such terms in the
Credit Agreement, as amended by this Amendment.
          2. Amendments to Credit Agreement. Effective as of the Effective Date,
the Credit Agreement is amended as follows:
     (a) New Definition. The following new definitions are added to
Section 1.01:

 

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“Reynolds Acquisition” means the acquisition by the Company of 100% of the
issued and outstanding capital stock of Reynolds Welding Supply Co., a Minnesota
corporation, under and pursuant to that certain Purchase and Sale Agreement
dated August 18, 2005, among the Company, as purchaser, and Michael P. Reynolds,
William J. Reynolds, and Thomas J. Reynolds, as sellers.
“Second Amendment” means that certain Second Amendment to Third Amended and
Restated Credit Agreement dated as of October 28, 2005, among the Company, VNGI,
VNGDI, the Lenders, and the Agent.
(b) Maximum Availability. Pursuant to Section 2.02(g), the Maximum Availability
is increased to $90,000,000.00.
(c) Replacement of Schedules. Schedule 1.01-a and the Pricing Schedule to the
Credit Agreement are replaced with Schedule 1.01-a and the Pricing Schedule
attached to this Amendment.
(d) Amendment of Section 2.02(b). The first sentence of Section 2.02(b) is
amended and restated to read as follows:
The obligation of the Company to repay the Revolving Loans shall be evidenced by
promissory notes executed by the Company to each of the Lenders in the form of
Exhibit A attached to the Second Amendment (as the same may be amended,
modified, extended, renewed, supplemented, replaced and/or restated from time to
time and at any time, the “Revolving Notes”).
          3. Consent. The Lenders and the Agent hereby consent to the
acquisition by the Company of 100% of the issued and outstanding capital stock
of Reynolds Welding Supply Co., a Minnesota corporation, under and pursuant to
that certain Purchase and Sale Agreement dated August 18, 2005, among the
Company, as purchaser, and Michael P. Reynolds, William J. Reynolds, and Thomas
J. Reynolds, as sellers, subject to the conditions that:
(a) the purchase price paid by the Company thereunder shall not exceed
$22,000,000.00;
(b) immediately upon consummation of such acquisition, Reynolds Welding Supply
Co. and each of its subsidiaries shall be merged with and into the Company, with
the Company as the surviving entity; and
(c) no Event of Default or Unmatured Event of Default has occurred and is
continuing on the New Acquisition Closing Date of such acquisition.

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The parties agree that the Additional EBITDA Amount attributable to such New
Acquisition for the period of four fiscal quarters ending October 31, 2005,
initially shall be $3,222,000.00.
          4. Representations and Warranties. The Credit Parties jointly and
severally represent and warrant to the Lenders that:
(a) (i) The execution, delivery, and performance of this Amendment by the Credit
Parties have been duly authorized by all necessary corporate action, and do not
and will not violate any provision of any law, rule, regulation, order,
judgment, injunction, or writ presently in effect applying to the Credit
Parties, the articles of incorporation, or by-laws of any of the Credit Parties,
or result in a breach of or constitute a default under any material agreement,
lease, or instrument to which any of the Credit Parties is a party or by which
any of the Credit Parties or any of the properties of any of the Credit Parties
may be bound or affected; (ii) no authorization, consent, approval, license,
exemption, or filing of a registration with any court or governmental
department, agency, or instrumentality, or any other Person, is or will be
necessary for the valid execution, delivery, or performance by any of the Credit
Parties of this Amendment; and (iii) this Amendment is the legal, valid, and
binding obligation of each of the Credit Parties, as a signatory thereto, and is
enforceable against each of the Credit Parties in accordance with its terms.
(b) After giving effect to the amendments contained in this Amendment, the
representations and warranties contained in Article III of the Credit Agreement
are and will be true and correct with the same force and effect as if made on
and as of the date of execution of this Amendment.
(c) After giving effect to the amendments contained in this Amendment, no
Default or Unmatured Default has occurred and is continuing or will exist under
the Credit Agreement.
          5. Conditions. The obligation of the Lenders and the Agent to perform
this Amendment shall be subject to full satisfaction of the following conditions
precedent:
(a) This Amendment shall have been duly executed by each of the Credit Parties
and the Required Lenders and delivered to the Agent.
(b) The Company shall have executed and delivered to the Agent Revolving Notes
substantially in the form of Exhibit A attached hereto, payable to each Lender
and in the principal sum of such Lender’s Commitment as set forth on
Schedule 1.01-a attached to this Amendment.
(c) The Company shall have paid to the Agent, for the account of the Lenders, an
upfront fee of $15,000.00.

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(d) The Company shall have paid all costs and expenses incurred by the Agent in
connection with the negotiation, preparation, and closing of this Amendment and
the other documents and agreements delivered pursuant hereto, including the
reasonable fees and out-of-pocket expenses of Baker & Daniels, special counsel
to the Agent.
(e) The Agent shall have received such additional agreements, documents, and
certifications as may be reasonably requested by the Required Lenders.
          6. Guarantor Consent/Affirmation. VNGI and VNGDI, in their respective
capacities as a Guarantor under the Guaranties, by their execution of this
Amendment, expressly consent to the execution, delivery and performance by the
Company and the Agent of this Amendment, and agree that neither the provisions
of this Amendment nor any action taken or not taken in accordance with the terms
of this Amendment shall constitute a termination, extinguishment, release, or
discharge of any of their respective guaranty obligations or provide a defense,
set off, or counter claim to any of them with respect to any of their respective
guaranty obligations under any of the Guaranties or other Loan Documents. VNGI
and VNDGI each affirms to the Lenders and the Agent that its Guaranty remains in
full force and effect and is its valid and binding obligation.
          7. Binding on Successors and Assigns. All of the terms and provisions
of this Amendment shall be binding upon and inure to the benefit of the Credit
Parties, the Lenders, the Agent, and their respective successors and assigns and
legal representatives.
          8. Governing Law/Entire Agreement/Survival. This Amendment is a
contract made under, and shall be governed by and construed in accordance with,
the laws of the State of Indiana applicable to contracts made and to be
performed entirely within such state and without giving effect to the choice or
conflicts of laws principles of any jurisdiction. This Amendment constitutes and
expresses the entire understanding between the parties with respect to the
subject matter hereof, and supersedes all prior agreements and understandings,
commitments, inducements, or conditions, whether expressed or implied, oral or
written, with respect thereto. All covenants, agreements, undertakings,
representations, and warranties made in this Amendment shall survive the
execution and delivery of this Amendment, and shall not be affected by any
investigation made by any person. The Credit Agreement, as amended hereby,
remains in full force and effect in accordance with its terms and provisions.
          9. Further Agreements and Acknowledgments. The Credit Parties hereby
further acknowledge and agree that:
(a) neither the provisions of this Amendment nor any actions taken or not taken
pursuant to or in reliance upon the terms of this Amendment shall constitute a
novation of any of the Loan Documents, all of which remain in full force and
effect in accordance with their respective terms, as amended to date; and
(b) neither this Amendment, nor any action taken by the Lenders or the Agent
pursuant to this Amendment, shall impair, prejudice, or in any other manner
affect the

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rights of the Lenders with respect to any Collateral or other security which now
or hereafter secures payment or performance of the Obligations or any part
thereof, or establish or be deemed to establish any precedent or course of
dealing with respect to any matter.
          10. Counterparts. This Amendment may be executed, by original or
facsimile signatures, in two or more counterparts, each of which shall
constitute an original, but all of which shall constitute one agreement.
          IN WITNESS WHEREOF, the Credit Parties, the Required Lenders and the
Agent have caused this Amendment to be duly executed and delivered by their
respective authorized signatories as of the date first set forth above.

                  VALLEY NATIONAL GASES, INC.,       a West Virginia corporation
 
           
 
  By:        
 
           
 
           
 
           
 
                VALLEY NATIONAL GASES INCORPORATED     a Pennsylvania
corporation
 
           
 
  By:        
 
           
 
           
 
           
 
                VALLEY NATIONAL GASES DELAWARE,     INC., a Delaware corporation
 
           
 
  By:        
 
           
 
           
 
           

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                      JPMORGAN CHASE BANK, N.A., as Lender and as Agent    
 
               
 
  By:                          
 
                    Printed:    
 
               
 
               
 
  Title:                          

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                      NATIONAL CITY BANK    
 
               
 
  By:                        
 
               
 
  Printed:        
 
             
 
               
 
  Title:                          

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                      FIFTH THIRD BANK    
 
               
 
  By:                        
 
                    Printed:    
 
               
 
               
 
  Title:                          

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                      LASALLE BANK NATIONAL ASSOCIATION    
 
               
 
  By:                        
 
                    Printed:    
 
               
 
               
 
  Title:                          

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EXHIBIT A
FIFTH AMENDED AND RESTATED REVOLVING NOTE

     
U.S. $                                        
  October                    , 2005

          FOR VALUE RECEIVED, on or before April 30, 2009, VALLEY NATIONAL
GASES, INC., a West Virginia corporation (“Maker”), unconditionally promises to
pay to the order of                                          (“Lender”), at 111
Monument Circle, Mail Code IN1-0046, P.O. Box 7700, Indianapolis, Indiana 46277,
Indianapolis, Indiana 46277-0119, the principal sum of
                                                Dollars ($
                    ), or so much of such amount as may be disbursed by Lender
as part of the Advances on the Revolving Loans under the terms of the Credit
Agreement (as hereinafter defined), together with interest thereon at the rates
as provided in the Credit Agreement. Capitalized terms used herein but not
defined herein shall have the meaning ascribed thereto in the Credit Agreement.
          Maker, Valley National Gases Incorporated, a Pennsylvania corporation,
Valley National Gases Delaware, Inc., Lender, other Lenders and JPMorgan Chase
Bank, N.A. (successor by merger to Bank One, N.A. (Main Office Chicago)), as
Administrative Agent, have executed a Third Amended and Restated Credit
Agreement, dated as of April 30, 2004 (as the same hereafter may be amended
and/or restated from time to time, the “Credit Agreement”). This Fifth Amended
and Restated Revolving Note (this “Note”) is one of the “Revolving Notes”
referred to in the Credit Agreement, to which reference is made for the
conditions and procedures under which advances, payments, readvances, and
repayments may be made prior to the maturity of this Note, for the terms upon
which Maker may make prepayments from time to time and at any time prior to the
maturity of this Note and the terms of any prepayment premiums or penalties
which may be due and payable in connection therewith, and for the terms and
conditions upon which the maturity of this Note may be accelerated and the
unpaid balance of principal and accrued interest thereon declared immediately
due and payable. This Note and the other Revolving Notes amend, and as amended,
restate, and replace those certain Fourth Amended and Restated Revolving Notes
executed by Maker, dated as of April 30, 2004.
          Interest accruing on the principal balance of this Note outstanding
from time to time shall be due and payable by Maker on such dates and in
accordance with the terms of the Credit Agreement. All amounts paid on this Note
shall be applied in accordance with the terms of the Credit Agreement.
          If any installment of interest due under the terms of this Note falls
due on a day which is not a Business Day, the due date shall be extended to the
next succeeding Business Day and interest will be payable at the applicable rate
for the period of such extension.
          All amounts payable under this Note shall be payable without relief
from valuation and appraisement laws, and with all collection costs and
attorneys’ fees.

 

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          The holder of this Note, at its option, may make extensions of time
for payment of the indebtedness evidenced by this Note, or approve reductions of
the payments thereon, release of any collateral securing payment of such
indebtedness or accept a renewal note or notes therefor, all without notice to
Maker or any endorser(s) and Maker and all endorsers hereby severally consent to
any such extensions, reductions, releases, and renewals, all without notice, and
agree that any such action shall not release or discharge any of them from any
liability hereunder. Maker and endorser(s), jointly and severally, waive demand,
presentment for payment, protest, notice of protest, and notice of nonpayment or
dishonor of this Note and each of them consents to all extensions of the time of
payment thereof.
          MAKER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BETWEEN OR AMONG MAKER AND LENDER ARISING OUT OF OR IN ANY WAY
RELATED TO THIS NOTE OR ANY OTHER LOAN DOCUMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE LOAN
DOCUMENTS. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS NOTE SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF INDIANA WITHOUT REGARD TO ITS
CHOICE OR CONFLICTS OF LAWS PROVISIONS. MAKER AGREES THAT THE COURTS OF THE
STATE OF INDIANA LOCATED IN INDIANAPOLIS, INDIANA, AND THE FEDERAL COURTS
LOCATED IN THE SOUTHERN DISTRICT OF INDIANA, MARION COUNTY, HAVE EXCLUSIVE
JURISDICTION OVER ANY AND ALL ACTIONS AND PROCEEDINGS INVOLVING THIS NOTE OR ANY
OTHER AGREEMENT MADE IN CONNECTION HEREWITH AND MAKER HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES TO SUBMIT TO THE JURISDICTION OF SUCH COURTS FOR PURPOSES
OF ANY SUCH ACTION OR PROCEEDING. MAKER HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING, INCLUDING ANY CLAIM THAT SUCH COURT IS AN INCONVENIENT
FORUM, AND CONSENTS TO SERVICE OF PROCESS PROVIDED THE SAME IS IN ACCORDANCE
WITH THE TERMS HEREOF. FINAL JUDGMENT IN ANY SUCH PROCEEDING AFTER ALL APPEALS
HAVE BEEN EXHAUSTED OR WAIVED SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR AS OTHERWISE PROVIDED BY LAW.
          Executed and delivered as of the                      day of October,
2005.

                      VALLEY NATIONAL GASES, INC.    
 
               
 
  By:                               Printed:        
 
               
 
  Title:                        

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Schedule 1.01-a

          Lender   Commitment   Commitment Percentage
JPMorgan Chase Bank, N.A.
  $36,300,000   40.33 %
National City Bank
  $26,700,000   29.66 %
Fifth Third Bank
  $15,000,000   16.66 %
LaSalle Bank National Association
  $12,000,000   13.33 %

 

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PRICING SCHEDULE

                  APPLICABLE   LEVEL I   LEVEL II   LEVEL III   LEVEL IV MARGIN
  STATUS   STATUS   STATUS   STATUS  
Eurodollar Rate
   1.00 %    1.25 %     1.50 %    1.875 %
Floating Rate
   0.0 %    0.0 %    0.0 %    0.0 %

                      LEVEL I   LEVEL II   LEVEL III   LEVEL IV     STATUS  
STATUS   STATUS   STATUS  
Applicable Fee Rate
   0.125 %    0.125 %    0.125 %     0.25 %
Applicable L/C Fee Rate
  1.0 %    1.25 %    1.50 %    1.875 %

     For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
          “Financials” means the annual or quarterly financial statements of the
Company delivered pursuant to Section 5.01(b)(1) or (3).
          “Level I Status” exists at any date if, as of the last day of the
fiscal quarter of the Company referred to in the most recent Financials, the
Ratio of Total Funded Debt to EBITDA is less than 2.00 to 1.00.
          “Level II Status” exists at any date if, as of the last day of the
fiscal quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status and (ii) the Ratio of Total Funded
Debt to EBITDA is less than 2.50 to 1.00.
          “Level III Status” exists at any date if, as of the last day of the
fiscal quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status or Level II Status and (ii) the
Ratio of Total Funded Debt to EBITDA is less than 3.00 to 1.00.
          “Level IV Status” exists at any date if the Company has not qualified
for Level I Status, Level II Status or Level III Status.
          “Status” means either Level I Status, Level II Status, Level III
Status or Level IV Status.
          The Applicable Margin, Applicable Fee Rate, and Applicable L/C Fee
Rate shall be determined in accordance with the foregoing table based on the
Company’s Status as reflected in the most recent Financials; provided that from
and after the New Acquisition Closing Date of the Reynolds Acquisition, Level I
Status shall be deemed to exist until the date on which the Applicable Margin,
Applicable Fee Rate, and Applicable L/C Fee Rate are subject to adjustment based
on the Financials for the fiscal quarter ending March 31, 2006 (subject,
however, to the

 

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last sentence of this paragraph). Adjustments, if any, to the Applicable Margin,
Applicable Fee Rate, and Applicable L/C Fee Rate shall be effective five
Business Days after the Agent has received the applicable Financials. If the
Company fails to deliver the Financials to the Agent at the time required
pursuant to Section 5.01(b), then the Applicable Margin, Applicable Fee Rate,
and Applicable L/C Fee Rate shall be the highest Applicable Margin, Applicable
Fee Rate, and Applicable L/C Fee Rate set forth in the foregoing table until
five days after such Financials are so delivered.