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Exhibit 10.2


 


FIRST
AMENDMENT


 


FIRST AMENDMENT, dated as of
October 28, 2005 (this “First Amendment”), to the Credit Agreement,
dated as of February 11, 2005 (the “Credit Agreement”), among PQ
Corporation, a Delaware corporation (the “Borrower”), Niagara Holdings, Inc.,
a Delaware corporation (“Holdings”), the Lenders party hereto from time
to time, UBS AG, Stamford Branch, as administrative agent (in such capacity,
the “Administrative Agent”), JPMorgan Chase Bank, N.A., as syndication
agent, Credit Suisse First Boston, acting through its Cayman Islands branch and
General Electric Capital Corporation,
as co-documentation agents, and J.P. Morgan Securities Inc. and UBS Securities
LLC, as joint lead arrangers and joint book runners.


 


W I  T  N  E  S
S  E  T  H:


 


WHEREAS, Holdings and the Borrower have requested
the amendments to the Credit Agreement described herein, and the parties hereto
are willing to agree to such amendments upon the terms and subject to the
conditions set forth herein;


 


NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:


 


SECTION 1.           Defined
Terms.  Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein shall have the
meanings given to them in the Credit Agreement.


 


SECTION 2.           Amendments
to Section 1.1 (Definitions)


 


(a)  The following
definitions shall be added to Section 1.01 of the Credit Agreement in
alphabetical order:


 


“First Amendment” shall mean the First
Amendment to this Agreement, dated as of October 28, 2005.


 


“First Amendment Effective Date” shall
mean the date on which the conditions precedent set forth in Section 5 of
the First Amendment shall have been satisfied, which date is November 17,
2005.


 


“Holdings Notes” shall mean the notes
in the initial aggregate principal amount of $25 million issued by Holdings to
certain investors.


 


(b)           The definitions of “Applicable Margin” of “Interest
Expense” in Section 1.1 of the Credit Agreement are hereby replaced with
the following:


 


“Applicable Margin”: (i) with respect to any Revolving
Facility Loan, a per annum rate determined pursuant to the Pricing Grid, and (ii) with
respect to any Term Loan, the applicable rate per annum set forth below:  


 


	
  Level

  	
   

  	
  Index Debt Rating

  	
   

  	
  Eurocurrency Loans

  	
   

  	
  Base Rate Loans

  
	
  I

  	
   

  	
  > B+/B1

  	
   

  	
  2.00%

  	
   

  	
  1.25%

  
	
  II

  	
   

  	
  < B+/B1

  	
   

  	
  2.25%

  	
   

  	
  1.50%

  



 





















 


For purposes of the foregoing table, (i) if
the ratings established or deemed to have been established by Moody’s and
S&P for the Index Debt shall fall within different Levels, the Applicable
Rate shall be based on the lower of the two ratings (i.e., the higher Level
number); and (ii) if the ratings established or deemed to have been
established by Moody’s and S&P for the Index Debt shall be changed (other
than as a result of a change in the rating system of Moody’s or S&P), such
change shall be effective on the date that is three Business Days after the
date on which the Administrative Agent has received notice of such change.  The Borrower hereby agrees to give the Administrative
Agent notice of any such change within three Business Days after the
effectiveness thereof.  Each change in
the Applicable Rate shall apply during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change.  If the
rating system of Moody’s or S&P shall change, or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
the Borrower and the Lenders under the Term Facility shall negotiate in good
faith to amend this definition to reflect such changed rating system or the
unavailability of ratings from such rating agency and, pending the
effectiveness of any such amendment, the Applicable Rate shall be determined by
reference to the rating most recently in effect prior to such change or
cessation.  “Index Debt” shall mean the
senior, secured, long-term indebtedness for borrowed money of the Borrower.


 


“Interest Expense” shall
mean, with respect to any person for any period, the sum of (a) gross
interest expense of such person for such period on a consolidated basis,
including (i) the amortization of debt discounts, (ii) the
amortization of all fees (including fees with respect to Swap Agreements)
payable in connection with the incurrence of Indebtedness to the extent
included in interest expense, (iii) the portion of any payments or
accruals with respect to Capital Lease Obligations allocable to interest
expense and (iv) in the case of the Borrower, any dividends or
distributions made to Holdings for the purpose of paying interest expense on
Indebtedness of Holdings, (b) capitalized interest of such person and (c) commissions,
discounts, yield and other fees and charges incurred in connection with any
Permitted Receivables Financing which are payable to any person other than the
Borrower or a Subsidiary Loan Party. For purposes of the foregoing, gross
interest expense shall be determined after giving effect to any net payments
made or received
and costs incurred by the Borrower and the Subsidiaries with respect to Swap
Agreements.


 


SECTION 3.           Amendments
to Section 2.11 (Prepayment of Loans). 
Section 2.11(a) of the Credit Agreement is hereby amended as
follows:


 


(a) by adding “and except as provided below” at the end of the
parenthetical; and


 


(b) by adding the following sentence at the end
thereof:


 


“All voluntary prepayments
of Term Borrowings effected on or prior to the first anniversary of the First
Amendment Effective Date with the proceeds of a substantially concurrent
issuance or incurrence of new term loans under this Agreement having terms and
conditions substantially the same as those of the Term Loans shall be
accompanied by a prepayment fee equal to 1.00% of the aggregate amount of such
prepayments if the Applicable Margin (or similar interest rate spread)
applicable to such new term loans is or, upon the satisfaction of certain
conditions, could be less than the Applicable Margin applicable to the Term
Loans immediately prior to such First Amendment Effective Date (as determined
by comparing the Applicable Margin in respect of the Term Loans immediately
prior to such First Amendment 


 


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Effective Date to the Applicable Margin (or similar
interest spread) in respect of such new term loans, with such comparison
including, in each case, the applicable grid and related definitions).”


 


SECTION 4.           Amendments
to Section 6.06 (Dividends and Distributions).  Section 6.06 of the Credit Agreement is
hereby amended by adding new paragraphs (f) and (g) to the end
thereof as follows:


 


“(f)  within 30 days after the First
Amendment Effective Date, the Borrower may pay dividends to Holdings in order
to enable Holdings to pay dividends to its equity holders in an aggregate
amount not to exceed the sum of $30 million from cash on hand, $25 million from
proceeds of Revolving Facility Loans and $30 million from proceeds of
Incremental Extensions of Credit; and


 


(g)  the Borrower may pay dividends in
order to enable Holdings to pay interest expense on the Holdings Notes in an
aggregate amount not to exceed $4 million per annum so long as at the
time of such dividend and after giving effect thereto, no Default or Event of
Default has occurred and is continuing (it being understood that any such payments shall be deducted when
calculating the amount available for the Borrower to make payments pursuant to
the basket set forth in paragraph (e) above).”


 


SECTION 5.           Conditions
to Effectiveness.  This First
Amendment shall become effective as of the date set forth above (the “First
Amendment Effective Date”) upon the satisfaction of the following
conditions precedent:


 


(a)           First Amendment.  The
Administrative Agent shall have received (i) this First Amendment,
executed and delivered by the Administrative Agent, Holdings and the Borrower,
and (ii) consent letters from Lenders sufficient to authorize the
amendments to the Credit Agreement effected by this First Amendment.


 


(b)           Fees.  The Administrative Agent shall
have received evidence reasonably satisfactory to it that all fees and other
amounts due and payable to the Administrative Agent or the Lenders on or prior
to the First Amendment Effective Date, including, to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses (including fees, charges
and disbursements of counsel) required to be reimbursed or paid by any Loan
Party hereunder or under any other Loan Document.


 


SECTION 6.           Representations
and Warranties.  The Borrower
represents and warrants to the Administrative Agent and the Lenders that as of
the First Amendment Effective Date, after giving effect to this First
Amendment, no Default or Event of Default has occurred and is continuing and
the representations and warranties made by the Borrower in or pursuant to the
Credit Agreement or any other Loan Document are true and correct in all
material respects on and as of the First Amendment Effective Date as if made on
such date (except to the extent that any such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties were true and correct in all material respects on and as of such
earlier date).


 


SECTION 7.           Continuing
Effect of the Credit Agreement. This First Amendment shall not constitute
an amendment or waiver of or consent to any provision of the Credit Agreement
not expressly referred to herein and shall not be construed as an amendment,
waiver or consent to any action on the part of the Borrower that would require
an amendment, waiver or consent of the Administrative Agent or the Lenders
except as expressly stated herein. Except as expressly amended hereby, the


 


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provisions of the Credit Agreement are and shall remain in full force
and effect in accordance with its terms. 
This First Amendment shall constitute a Loan Document.


 


SECTION 8.           Counterparts.
This First Amendment may be executed by one or more of the parties to this
First Amendment on any number of separate counterparts (including by
facsimile), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.


 


SECTION 9.         GOVERNING
LAW.  THIS FIRST AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS FIRST AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.


 


[The remainder of this page is
intentionally left blank.]


 


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IN WITNESS WHEREOF, the
parties hereto have caused this First Amendment to be duly executed and
delivered by their respective proper and duly authorized officers as of the day
and year first above written.


 


 


	
   

  	
  NIAGARA HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Cox

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  James P. Cox

  
	
   

  	
   

  	
  Title:  

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PQ CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James P. Cox

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  James P. Cox

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UBS LOAN FINANCE LLC,

  
	
   

  	
  as Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Saldoz Sikka

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Saldoz Sikka

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
  Banking Products

  
	
   

  	
   

  	
   

  	
  Services, US

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joselin Fernandes

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Joselin Fernandes

  
	
   

  	
   

  	
  Title:

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
  Banking Products

  
	
   

  	
   

  	
   

  	
  Services, US

  
						



 





















 


EXHIBIT A


 


LENDER CONSENT LETTER


 


PQ CORPORATION


CREDIT AGREEMENT


 


To:          UBS
AG, Stamford Branch


677 Washington Blvd.


Stamford, CT 06901


 


Ladies
and Gentlemen:


 


Reference is made to the Credit Agreement, dated as
of February 11, 2005 (the “Credit Agreement”), among PQ
Corporation, a Delaware corporation (the “Borrower”), Niagara Holdings, Inc.,
a Delaware corporation (“Holdings”), the Lenders party hereto from time
to time, UBS AG, Stamford Branch, as administrative agent (in such capacity,
the “Administrative Agent”), JPMorgan Chase Bank, N.A., as syndication
agent, Credit Suisse First Boston, acting through its Cayman Islands branch and
General Electric Capital Corporation,
as co-documentation agents, and J.P. Morgan Securities Inc. and UBS Securities
LLC, as joint lead arrangers and joint book runners.  Unless otherwise defined herein, capitalized
terms used herein and defined in the Credit Agreement are used herein as
therein defined.


 


Holdings and the Borrower have requested that the
Lenders consent to amend the Credit Agreement on the terms and conditions
described in the First Amendment to the Credit Agreement, to which a form of
this Lender Consent Letter is attached as Exhibit A.


 


Pursuant to Section 9.08 of the Credit
Agreement, the undersigned Lender hereby agrees to all of the terms and
conditions of such First Amendment.


 


	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (NAME OF LENDER)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
						



 


Dated
as of October 28, 2005