PEARL RIVER, NY – August 14, 2018 – Hudson Technologies, Inc. (NASDAQ: HDSN) today announced that it has entered into an interim Waiver and Second Amendment to its Term Loan Credit and Security Agreement (the “Second Amendment”).
The Second Amendment amended the Term Loan Credit and Security Agreement dated October 10, 2017 (the “Term Loan Agreement”), to waive compliance with the existing total leverage ratio financial covenant at June 30, 2018, as amended. The Second Amendment also provides that on October 15, 2018, the Company and the Borrowers shall provide a certificate setting forth the total leverage ratio as of the four fiscal quarter period ending September 30, 2018.
In addition, the Second Amendment also: (i) increases the interest rate by 300 basis points effective July 1, 2018; (ii) waives the existing prepayment premium in the Term Loan Agreement in the event the term loan is repaid in full prior to March 31, 2020; (iii) adds an exit fee equal to three percent (3.00%) of the outstanding principal balance of the term loans on the date of the Second Amendment (provided, that payment of the exit fee is waived in the event that the term loan is repaid in full prior to January 1, 2020, and provided further that the exit fee is reduced to one-and-one-half percent (1.50%) in the event that the term loan is repaid in full on or after January 1, 2020 but prior to March 31, 2020); (iv) restricts acquisitions and other equity investments prior to September 30, 2018; (v) waived the requirement to deliver the Company’s Form 10-Q for the quarter ended June 30, 2018 by August 14, 2018; and (vi) required payment of a one-time waiver fee equal to one percent (1.00%) of the outstanding term loans.
Additional details regarding the Second Amendment can be found in the Form 8-K to be filed with the Securities and Exchange Commission tomorrow, August 15, 2018.
Timing of 10-Q Filing
Discussions are continuing with the term loan lenders with respect to an amendment of the Term Loan’s existing total leverage ratio financial covenant and certain other terms. As a result of potential balance sheet impact of foregoing discussions, the Company was not in a position to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 by August 14, 2018 as expected.
The Company is working diligently to resolve these matters and management believes that the Company will be in a position to file the aforementioned 10-Q not later than September 30, 2018.
Kevin J. Zugibe, Chairman and Chief Executive Officer of Hudson Technologies commented, “We are working with our lenders to provide an amendment for all necessary quarters that could be affected by the 2018 refrigerant price correction. While we expected to have concluded the amendment process by now, we believe we have a path forward to its resolution.”