Document:

Exhibit 10.24

 

FIFTH
AMENDMENT TO TERM LOAN AGREEMENT

 

THIS FIFTH AMENDMENT TO TERM LOAN AGREEMENT
(this “Amendment” or “Fifth Amendment to Loan Agreement”) is entered into by
and between KMG-BERNUTH, INC., a
Delaware corporation (hereinafter referred to as “Borrower”) and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, successor by merger to SouthTrust Bank, an Alabama banking
corporation, successor by conversion to SouthTrust Bank, National Association
(hereinafter referred to as “Bank”) as of the 7th day of June, 2005.

 

W
I T N E S S E T H:

 

WHEREAS, Borrower
and Bank are parties to that certain Term Loan Agreement dated as of June 26,
1998, as amended by that certain First Amendment to Term Loan Agreement dated
as of December 30, 2002, by that certain Second Amendment to Term Loan
Agreement dated as of December 5, 2003, by that certain Third Amendment to
Term Loan Agreement dated as of June 8, 2004, and by that certain Fourth
Amendment to Term Loan Agreement dated as of July 31, 2004 (as so amended
and as hereby amended, the “Loan Agreement”), whereby Borrower became indebted
to Bank for a Term Loan in the original principal amount of $6,000,000.00 and
thereafter amended to a principal amount of $5,050,000.00 and a Term Loan No. 2
in the principal amount of $6,000,000.00 and thereafter amended to a principal
amount of $8,600,000.00 (all of the foregoing capitalized terms together with
all other capitalized terms used herein shall have the respective meanings
assigned thereto in the Loan Agreement, unless otherwise specifically defined
herein); and

 

WHEREAS, upon request of the Borrower, the Bank has
agreed to certain additional amendments to the Loan Agreement, without
limitation, amendments to certain of the financial covenants required by the
Loan Agreement, which amendments are specifically set forth below.

 

NOW, THEREFORE, in consideration of the sum of One and
No/100 Dollar ($1.00) and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereby agree as
follows:

 

1.                                       The parties hereby acknowledge that SouthTrust
Bank has heretofore merged into Wachovia Bank, National Association, and,
accordingly, the Loan Agreement is hereby further amended to provide that any
and all references to “SouthTrust Bank”, “SouthTrust Bank, National Association”
in the Loan Agreement shall be deemed to be “Wachovia Bank, National
Association”.

 

2.                                       Section 1.1 of the Loan Agreement is hereby
amended by adding the following definitions as additional defined terms:

 

“Basic Chemicals” means Basic Chemicals Company, LLC, a Delaware
corporation.

 

“Basic Chemicals Debt” means any amount owing by Borrower to
Basic Chemicals pursuant to the Basic Chemicals Note.

 

“Basic Chemicals Loan Documents” means the Basic Chemicals Note
and any and all agreements, documents, and instruments of any kind executed or
delivered in connection with, or evidencing, securing, guaranteeing or
otherwise relating to the indebtedness owing by Borrower to Basic Chemicals
under the Basic Chemicals Note, together with all modifications and amendments
at any time made to any thereof.

 

1

 

“Basic Chemicals Note” means the promissory note dated June 7,
2005, made by the Borrower payable to Basic Chemicals in an original principal
amount of $10,000,000.00, and includes, provided that there shall have first
been obtained the prior written approval of the Bank, any amendment to such
note and any promissory note given in extension or renewal of, or in
substitution for, such note.

 

3.                                       Section 1.1 of the Loan Agreement is hereby
amended by deleting the definition of “Coverage Ratio” in its entirety and
substituting the following new definition in lieu thereof:

 

“Coverage Ratio” means, for any period, the ratio of (i) the
principal amount of all borrowed debt and capitalized lease obligations of
Borrower and Guarantor as of the end of the applicable period, to (ii) the
sum of EBITDA for the Borrower and Guarantor for the preceding four (4) fiscal
quarters.

 

4.                                       Section 6.1 of the Loan Agreement is hereby
amended by deleting Subsection (F) thereof in its entirety and
substituting the following new Subsection (F) in lieu thereof:

 

(F)                                 The
Borrower will maintain during the term of this Agreement (determined on a
consolidated basis with the Guarantor):

 

(1)                                  A
Fixed Charge Coverage of not less than 1.25 to 1.0 at any time; such Fixed
Charge Coverage to be measured quarterly based on a rolling four-quarter basis.

 

(2)                                  A
Coverage Ratio of not greater than: (a) 3.0 to 1.0 as of July 31,
2005, and October 31, 2005; and (b) 2.75 to 1.0 as of January 31,
2006, and at all times thereafter; said Coverage Ratio to be measured quarterly
based on a rolling four-quarter basis.

 

5.                                       Section 6.2 of the Loan Agreement is hereby amended
by adding thereto the following new Subsection (S):

 

(S)                                 The
Borrower and the Guarantor (on a consolidated basis) will not incur, create,
assume, or permit to exist any future Indebtedness in excess of, in the
aggregate, $2,000,000.00 except:

 

(1)                                  Indebtedness
owing to the Bank;

 

(2)                                  The
Basic Chemicals Debt;

 

(3)                                  Indebtedness
existing as of June 7, 2005; and

 

(4)                                  Trade
indebtedness incurred in the ordinary course of business.

 

6.                                       Section 7.1 of the Loan Agreement is hereby
amended by adding thereto the following new Subsection (N) as an
additional Event of Default:

 

(N)                               There
shall occur any default under the Basic Chemicals Note
and/or any of the other Basic Chemicals Loan Documents.

 

2

 

7.                                       The Loan Agreement is hereby amended by deleting Exhibit ”E”
thereto, which provides the form of the Compliance Certificate, and
substituting in lieu thereof the new Exhibit ”E” attached to this
Amendment.

 

8.                                       Borrower represents and warrants to the Bank that
as of the date hereof:  (a) all
representations and warranties given by the Borrower in Article V of the
Loan Agreement are true and correct, except to the extent affected by this
Amendment; and (b) the Borrower is in full compliance with all of the
covenants of the Borrower contained in Article VI of the Loan Agreement,
except to the extent affected by this Amendment.  The Borrower further represents that the
Borrower has full power and authority to enter into this Amendment and to
consummate the transactions contemplated hereby, and the Borrower agrees to pay
directly, or reimburse the Bank for, all reasonable expenses, including the
reasonable fees and expenses of legal counsel, incurred in connection with the
preparation of the documentation to evidence this Amendment and any documents
executed in connection herewith or in furtherance hereof.

 

9.                                       Except as may be modified or waived by the Bank,
in its sole discretion, the effectiveness of this Amendment shall be subject to
full and complete satisfaction of the following conditions:

 

(a)                                  Payment
of Fees and Expenses.  Bank shall
have received from Borrower payment of any Loan Fee and any and all other fees
and expenses required by the Loan Agreement, as further amended by this
Amendment, and any of the other Loan Documents then due.

 

(b)                                 Basic
Chemicals Loan Documents.  The Bank
shall have received, reviewed and approved the duly executed Basic Chemicals
Note and any other Basic Chemicals Loan Documents.

 

(c)                                  Additional
Documentation.  The Bank shall have
received such additional documentation as may be requested by the Bank, or its
counsel, to satisfy the Bank that this Amendment and each of the documents to
be delivered pursuant hereto or in connection herewith have been duly
authorized, executed and delivered on behalf of the Borrower and constitute the
valid and binding obligations of the Borrower.

 

10.                                 The parties hereby agree that (a) except as
herein expressly modified or as may be modified or amended by any document
executed concurrently herewith, all of the terms, conditions, obligations and
provisions of the Loan Agreement and each of the other Loan Documents shall be
and remain in full force and effect, and the same are hereby ratified and
confirmed in all respects, except that, to the extent that there shall be any
conflict between the terms of this Amendment and any of the terms of any of the
other Loan Documents not modified or amended concurrently herewith, the terms
and provisions of this Amendment shall govern and each of such other Loan
Documents are deemed automatically amended and modified without any further
action upon the execution and delivery of this Amendment; and (b) on and
after the effective date of this Amendment, each reference in the Loan
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of
like import referring to the Loan Agreement, and each reference to the “Agreement”,
the “Loan Agreement”, the “Term Loan Agreement”, “thereunder”, “thereof”, “therein”,
or words of like import intending to refer to the Loan Agreement in any Note or
any of the other Loan Documents shall mean and be a reference to the Loan
Agreement, as hereby and hereafter further amended.

 

11.                                 The undersigned KMG Chemicals, Inc. (the “Guarantor”),
executes this Amendment to expressly evidence its assent to all the terms of
this Amendment, and to further acknowledge and agree that the Guaranty of
Payment dated as of June 26, 1998 (the “Term Loan Guaranty”) and the
Guaranty of Payment dated as of December 5, 2003, as amended by that
certain First Amendment to Guaranty of Payment dated as of June 8, 2004
(as so amended, the “Term Loan No. 2 Guaranty”) delivered by it to the

 

3

 

Bank (the Term Loan Guaranty and the Term Loan No. 2 Guaranty
being herein referred to each singularly as a “Guaranty” and collectively as “Guaranties”)
remain in full force and effect and that the “Obligations” of the Guarantor as
the “Guarantor” under each of the Guaranties shall include, without limitation
except to the extent otherwise provided in any such Guaranty, all obligations
of the Borrower under the Loan Agreement, as amended by this Amendment.

 

12.                                 This Amendment may be executed in several
counterparts, each of which shall be deemed an original, and all of such
counterparts together shall constitute one and the same instrument.  Signature and acknowledgment pages, if any,
may be detached from the counterparts and attached to a single copy of this
document to physically form one document.

 

SIGNATURES FOLLOW ON SEPARATE PAGES

 

4

 

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

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  KMG-BERNUTH,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V. Sobchak

  
	
   

  	
  Its:
    Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
  STATE OF
  TEXAS

  	
  )

  	
   

  
	
  COUNTY OF
  HARRIS

  	
  )

  	
   

  

 

I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that John V. Sobchak, whose name as Vice President and
Chief Financial Officer of KMG-Bernuth, Inc., a Delaware corporation, is
signed to the foregoing Fifth Amendment to Term Loan Agreement, and who is
known to me, acknowledged before me on this day that, being informed of the contents
of said instrument, he, as such officer and with full authority, executed the
same voluntarily for and as the act of said corporation.

 

Given under my hand and official seal this the
                
day of                           ,
2005.

 

	
   

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  Commission Expires:

  

 

5

 

	
   

  	
  BANK:

  
	
   

  	
   

  
	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Alan
  Drennen

  
	
   

  	
  Its:

  	
  Group Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF
  ALABAMA

  	
  )

  	
   

  
	
  COUNTY OF
  JEFFERSON

  	
  )

  	
   

  

 

I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that                                                        ,
whose name as                                                                     
of Wachovia Bank, National Association, a national banking association, is
signed to the foregoing Fifth Amendment to Term Loan Agreement, and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said banking association.

 

Given under my hand and official seal this
the                 
day of                         ,
2005.

 

 

	
   

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  Commission Expires:

  

 

6

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  KMG
  CHEMICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John V.
  Sobchak

  
	
   

  	
  Its:
    Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  STATE OF
  TEXAS

  	
  )

  	
   

  
	
  COUNTY OF
  HARRIS

  	
  )

  	
   

  

 

I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that John V. Sobchak, whose name as Vice President and
Chief Financial Officer of KMG Chemicals, Inc., a Texas corporation, is
signed to the foregoing Fifth Amendment to Term Loan Agreement, and who is
known to me, acknowledged before me on this day that, being informed of the
contents of said instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.

 

Given under my hand and official seal this
the                 
day of                           ,
2005.

 

	
   

  	
  (SEAL)

  
	
   

  	
   

  
	
   

  	
  Notary
  Public

  
	
   

  	
  My
  Commission Expires:

  

 

7

 

EXHIBIT “E”

 

COMPLIANCE
CERTIFICATE

 

	
  To:

  	
  Wachovia
  Bank, National Association

  
	
   

  	
  420 North
  20th Street (Zip Code 35203)

  
	
   

  	
  P.O. Box
  2554 (Zip Code 35290)

  
	
   

  	
  Birmingham,
  Alabama

  
	
   

  	
   

  
	
   

  	
  Date of This
  Report:                                            ,
  20      .

  
	
   

  	
  o         For
  the month ended
                                                ,
  20      .

  
	
   

  	
  o         For
  the fiscal year ended
                                              ,
  20      .

  

 

 

Gentlemen:

 

I, the undersigned officer of KMG-Bernuth, Inc., a Delaware
corporation (the “Borrower”), do hereby certify to you as follows:

 

(1)                                  I
have individually reviewed the provisions of the Term Loan Agreement between
the Borrower and you, dated as of July 26, 1998 (as amended from time to
time, the “Loan Agreement”), and I have caused to be made under my supervision
a review of the activities of the Borrower during the above referenced period
with a view toward determining whether the Borrower has kept, observed,
performed and fulfilled all of its obligations under the Loan Agreement.  To the best of my knowledge, the Borrower has
kept, observed, performed and fulfilled each and every undertaking contained in
the Loan Agreement, and is not at this time in default in the observance or
performance of any of the terms or conditions of the Loan Agreement, and no
Event of Default has occurred and is continuing, and no event has occurred and
is continuing, that, with the giving of notice or the passage of time or both,
would be an Event of Default, except as follows:

 

 

 

(2)                                  I
further certify to you that no material adverse change has occurred in either the
financial condition or the business of the Borrower since the date of the Loan
Agreement, and that all representations and warranties set forth within Article V
of the Loan Agreement are true and correct in all respects as if made on and as
of the date hereof, except as follows:

 

 

 

1

 

(3)                                  During
the period noted above, the Borrower has not changed its name, any of its
places of business, principal executive office, or been the surviving
corporation in a merger, nor has it changed the places where the Collateral is
located except as itemized below:

 

 

 

(4)                                  The
requirements of the financial covenants for the Borrower set forth in Section 6.1(F) of
the Loan Agreement (determined on a consolidated basis with the Guarantor) are
set forth below, together with the calculation thereof for the above referenced
period:

 

	
   

  	
   

  	
   

  	
   

  	
  As Of

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Reporting

  	
   

  
	
   

  	
   

  	
  Required

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed Charge Coverage

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBITDA Coverage Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(5)                                  Terms
capitalized herein have the same meaning as those in the Loan Agreement.

 

	
   

  	
  KMG-BERNUTH,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  

 

2Exhibit 10.25

 

TENTH
AMENDMENT TO

REVOLVING LOAN AGREEMENT

 

THIS TENTH AMENDMENT TO REVOLVING LOAN
AGREEMENT (this “Amendment”), dated as of the 7th day
of June, 2005, is made by and between KMG-BERNUTH,
INC., a Delaware corporation (the “Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking
association, successor by merger to SouthTrust Bank, an Alabama banking
corporation, successor by conversion to SouthTrust Bank, National Association,
formerly known as SouthTrust Bank of Alabama, National Association (the “Bank”).

 

W
I T N E S S E T H:

 

WHEREAS, the
Borrower and the Bank entered into a Revolving Loan Agreement dated August 1,
1996 (the “Loan Agreement”); and

 

WHEREAS, pursuant to
that certain First Amendment to Revolving Loan Agreement dated effective as of December 31,
1996 (the “First Amendment”), the Bank and Borrower amended the Loan Agreement
to extend the Revolving Loan Termination Date until November 30, 1998; and

 

WHEREAS, pursuant to
that certain Second Amendment to Revolving Loan Agreement dated effective as of
September 1, 1997 (the “Second Amendment”), the Bank and Borrower further
amended the Loan Agreement to extend the Revolving Loan Termination Date until January 15,
1999; and

 

WHEREAS, pursuant to
that certain Third Amendment to Revolving Loan Agreement dated effective as of December 31,
1997 (the “Third Amendment”), the Bank and Borrower further amended the Loan
Agreement to, among other things, extend the Revolving Loan Termination Date
until January 15, 2000, and to acknowledge the Bank’s release of the
Guaranty; and

 

WHEREAS, pursuant to
that certain Fourth Amendment to Revolving Loan Agreement dated effective as of
June 26, 1998 (the “Fourth Amendment”), the Bank and Borrower further
amended the Loan Agreement in order to amend certain financial covenants
contained in the Loan Agreement; and

 

WHEREAS, pursuant to
that certain Fifth Amendment to Revolving Loan Agreement dated effective as of January 15,
1999 (the “Fifth Amendment”), the Bank and Borrower further amended the Loan
Agreement to extend the Revolving Loan Termination Date until January 31,
2001, and to reduce the amount of the Loan Fee payable by Borrower to Bank; and

 

WHEREAS, pursuant to
that certain Sixth Amendment to Revolving Loan Agreement dated effective as of January 31,
2000 (the “Sixth Amendment”), the Bank and Borrower further amended the Loan
Agreement to extend the Revolving Loan Termination Date until January 31,
2003; and

 

WHEREAS, pursuant to
that certain Seventh Amendment to Revolving Loan Agreement dated effective as
of January 31, 2001 (the “Seventh Amendment”), the Bank and Borrower
further amended the Loan Agreement to increase the amount of the Revolving Loan
Commitment from $2,500,000.00 to $3,500,000.00 and to extend the Revolving Loan
Termination Date until January 31, 2004; and

 

WHEREAS, pursuant to
that certain Eighth Amendment to Revolving Loan Agreement dated effective as of
July 31, 2002 (the “Eighth Amendment”), the Bank and Borrower further
amended the Loan Agreement to extend the Revolving Loan Termination Date until January 31,
2005; and

 

1

 

WHEREAS, pursuant to
that certain Ninth Amendment to Revolving Loan Agreement dated effective as of December 14,
2004 (the “Ninth Amendment”) (the Loan Agreement as amended by the First
Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment, the
Fifth Amendment, the Sixth Amendment, the Seventh Amendment, the Eighth
Amendment and the Ninth Amendment being hereinafter referred to as the “Loan
Agreement As Amended”), the Bank and Borrower further amended the Loan
Agreement to increase the amount of the Revolving Loan Commitment from
$3,500,000.00 to $5,000,000.00 and to extend the Revolving Loan Termination
Date until December 31, 2007 (except as otherwise herein specifically
provided, all capitalized terms used but not otherwise defined herein shall
have the respective meanings ascribed to them in the Loan Agreement As
Amended); and

 

WHEREAS, the
Borrower desires, and the Bank has agreed, to further modify the Loan Agreement
As Amended in order to provide certain amendments thereto, including, without
limitation, amendments to certain financial covenants, all as more specifically
hereinafter set forth.

 

NOW, THEREFORE, the
Borrower and the Bank hereby modify the Loan Agreement As
Amended as follows:

 

1.                                       The parties hereby acknowledge that SouthTrust
Bank has heretofore merged into Wachovia Bank, National Association, and,
accordingly, the Loan Agreement As Amended is hereby further amended to provide
that any and all references to “SouthTrust Bank”, “SouthTrust Bank, National
Association” or “SouthTrust Bank of Alabama, National Association” in the Loan
Agreement As Amended shall be deemed to be “Wachovia Bank, National Association”.

 

2.                                       Section 1.1 of the Loan Agreement As Amended is hereby amended by adding the following
definitions as additional defined terms:

 

“Basic Chemicals” means Basic Chemicals Company, LLC, a Delaware
corporation.

 

“Basic Chemicals Debt” means any amount owing by Borrower to
Basic Chemicals pursuant to the Basic Chemicals Note.

 

“Basic Chemicals Loan Documents” means the Basic Chemicals Note
and any and all agreements, documents, and instruments of any kind executed or
delivered in connection with, or evidencing, securing, guaranteeing or
otherwise relating to the indebtedness owing by Borrower to Basic Chemicals
under the Basic Chemicals Note, together with all modifications and amendments
at any time made to any thereof.

 

“Basic Chemicals Note” means the promissory note dated June 7,
2005, made by the Borrower payable to Basic Chemicals in an original principal
amount of $10,000,000.00, and includes, provided that there shall have first
been obtained the prior written approval of the Bank, any amendment to such
note and any promissory note given in extension or renewal of, or in
substitution for, such note.

 

3.                                       Section 1.1 of the Loan Agreement As Amended is hereby amended by deleting the definition of “Coverage
Ratio” in its entirety and substituting the following new definition in lieu
thereof:

 

“Coverage Ratio” means, for any period, the ratio of (i) the
principal amount of all borrowed debt and capitalized lease obligations of
Borrower and KMG as

 

2

 

of the end of the applicable period, to (ii) the
sum of EBITDA for the Borrower and KMG for the preceding four (4) fiscal
quarters.

 

4.                                       Section 6.1 of the Loan Agreement As Amended is hereby amended by deleting Subsection (F) thereof
in its entirety and substituting the following new Subsection (F) in
lieu thereof:

 

(F)                                 The
Borrower will maintain during the term of this Agreement (determined on a
consolidated basis with KMG):

 

(1)                                  A
Fixed Charge Coverage of not less than 1.25 to 1.0 at any time; such Fixed
Charge Coverage to be measured quarterly based on a rolling four-quarter basis.

 

(2)                                  A
Coverage Ratio of not greater than: (a) 3.0 to 1.0 as of July 31, 2005,
and October 31, 2005; and (b) 2.75 to 1.0 as of January 31, 2006,
and at all times thereafter; said Coverage Ratio to be measured quarterly based
on a rolling four-quarter basis.

 

(3)                                  A
Borrowing Base such that the balance of the Borrower’s outstanding Revolving
Loan will not, at any time, exceeding its Borrowing Base.

 

5.                                       Section 6.2 of the Loan Agreement As Amended is hereby amended by adding thereto the following
new Subsection (S):

 

(S)                                 The
Borrower and KMG (on a consolidated basis) will not incur, create, assume, or
permit to exist any future Indebtedness in excess of, in the aggregate,
$2,000,000.00 except:

 

(1)                                  Indebtedness
owing to the Bank;

 

(2)                                  The
Basic Chemicals Debt;

 

(3)                                  Indebtedness
existing as of June 7, 2005; and

 

(4)                                  Trade
indebtedness incurred in the ordinary course of business.

 

6.                                       Section 7.1 of the Loan Agreement As Amended is hereby amended by adding thereto the following
new Subsection (L) as an additional Event of Default:

 

(L)                                 There
shall occur any default under the Basic Chemicals Note
and/or any of the other Basic Chemicals Loan Documents.

 

7.                                       The Loan Agreement As Amended is hereby amended by
deleting Exhibit ”K” thereto, which provides the form of the Compliance
Certificate, and substituting in lieu thereof the new Exhibit ”K” attached
to this Amendment.

 

8.                                       Borrower represents and warrants to the Bank that as
of the date hereof:  (a) all
representations and warranties given by the Borrower in Article V of the
Loan Agreement As Amended are true and correct, except to the extent affected
by this Amendment; and (b) the Borrower is in full

 

3

 

compliance with all of the covenants of the Borrower contained in Article VI
of the Loan Agreement As Amended, except to the extent affected by this
Amendment.  The Borrower further
represents that the Borrower has full power and authority to enter into this
Amendment and to consummate the transactions contemplated hereby, and the
Borrower agrees to pay directly, or reimburse the Bank for, all reasonable
expenses, including the reasonable fees and expenses of legal counsel, incurred
in connection with the preparation of the documentation to evidence this
Amendment and any other documents executed in connection herewith or in
furtherance hereof.

 

9.                                       Except as may be modified or waived by the Bank,
in its sole discretion, the effectiveness of this Amendment shall be subject to
full and complete satisfaction of the following conditions:

 

(a)                                  Payment
of Fees and Expenses.  Bank shall
have received from Borrower payment of any Loan Fee and any and all other fees
and expenses required by the Loan Agreement As Amended,
as further amended by this Amendment, and any of the other Loan Documents then
due.

 

(b)                                 Basic
Chemicals Loan Documents.  The Bank
shall have received, reviewed and approved the duly executed Basic Chemicals
Note and any other Basic Chemicals Loan Documents.

 

(c)                                  Additional
Documentation.  The Bank shall have
received such additional documentation as may be requested by the Bank, or its
counsel, to satisfy the Bank that this Amendment and each of the documents to
be delivered pursuant hereto or in connection herewith have been duly
authorized, executed and delivered on behalf of the Borrower and constitute the
valid and binding obligations of the Borrower.

 

10.                                 The parties hereby agree that (a) except as
herein expressly modified or as may be modified or amended by any document
executed concurrently herewith, all of the terms, conditions, obligations and
provisions of the Loan Agreement As Amended and each of the other Loan
Documents shall be and remain in full force and effect, and the same are hereby
ratified and confirmed in all respects, except that, to the extent that there
shall be any conflict between the terms of this Amendment and any of the terms
of any of the other Loan Documents not modified or amended concurrently
herewith, the terms and provisions of this Amendment shall govern and each of
such other Loan Documents are deemed automatically amended and modified without
any further action upon the execution and delivery of this Amendment; and (b) on
and after the effective date of this Amendment, each reference in the Loan
Agreement As Amended to “this Agreement”, “hereunder”, “hereof”, “herein”, or
words of like import referring to the Loan Agreement, and each reference to the
“Agreement”, the “Loan Agreement”, the “Revolving Loan Agreement”, “thereunder”,
“thereof”, “therein”, or words of like import intending to refer to the Loan
Agreement in the Revolving Note or any of the other Loan Documents shall mean
and be a reference to the Loan Agreement As Amended, as hereby and hereafter
further amended.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

4

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first above written.

 

	
  WITNESSES:

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Alan
  Drennen

  
	
   

  	
  Its:

  	
  Group Vice
  President

  
	
   

  	
   

  
	
   

  	
  KMG-BERNUTH,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ John V.
  Sobchak

  
	
   

  	
  Its:

  	
  Vice
  President and CFO

  

 

5

 

EXHIBIT “K”

 

COMPLIANCE
CERTIFICATE

 

	
  To:

  	
  Wachovia
  Bank, National Association

  
	
   

  	
  420 North
  20th Street (Zip Code 35203)

  
	
   

  	
  P.O. Box
  2554 (Zip Code 35290)

  
	
   

  	
  Birmingham,
  Alabama

  
	
   

  	
   

  
	
   

  	
  Date of This
  Report:                                            ,
  20      .

  
	
   

  	
  o         For
  the month ended
                                                ,
  20      .

  
	
   

  	
  o         For
  the fiscal year ended
                                              ,
  20      .

  

 

Gentlemen:

 

I, the undersigned officer of KMG-Bernuth, Inc., a Delaware
corporation (the “Borrower”), do hereby certify to you as follows:

 

(1)                                  I
have individually reviewed the provisions of the Revolving Loan Agreement
between the Borrower and you, dated as of August 1, 1996 (as amended from
time to time, the “Loan Agreement”), and I have caused to be made under my
supervision a review of the activities of the Borrower during the above
referenced period with a view toward determining whether the Borrower has kept,
observed, performed and fulfilled all of its obligations under the Loan
Agreement.  To the best of my knowledge,
the Borrower has kept, observed, performed and fulfilled each and every
undertaking contained in the Loan Agreement, and is not at this time in default
in the observance or performance of any of the terms or conditions of the Loan
Agreement, and no Event of Default has occurred and is continuing, and no event
has occurred and is continuing, that, with the giving of notice or the passage
of time or both, would be an Event of Default, except as follows:

 

 

 

(2)                                  I
further certify to you that no material adverse change has occurred in either
the financial condition or the business of the Borrower since the date of the
Loan Agreement, and that all representations and warranties set forth within Article V
of the Loan Agreement are true and correct in all respects as if made on and as
of the date hereof, except as follows:

 

 

 

1

 

(3)                                  During
the period noted above, the Borrower has not changed its name, any of its
places of business, principal executive office, or been the surviving
corporation in a merger, nor has it changed the places where the Collateral is
located except as itemized below:

 

 

 

(4)                                  The
requirements of the financial covenants for the Borrower set forth in Section 6.1(F) of
the Loan Agreement (determined on a consolidated basis with KMG) are set forth
below, together with the calculation thereof for the above referenced period:

 

	
   

  	
   

  	
   

  	
   

  	
  As Of

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Reporting

  	
   

  
	
   

  	
   

  	
  Required

  	
   

  	
  Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fixed Charge Coverage

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EBITDA Coverage Ratio

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

(5)                                  Terms
capitalized herein have the same meaning as those in the Loan Agreement.

 

	
   

  	
  KMG-BERNUTH,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]