EXHIBIT 10.6(f)
FIRST AMENDMENT TO SECURITY AGREEMENT
THIS FIRST AMENDMENT is made as of this 12 day of June, 1998 by and
among ENVIRONMENTAL ELEMENTS CORPORATION, a Delaware corporation ("Borrower")
and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a Maryland banking corporation
("Bank").
RECITALS
A. The Bank previously agreed to extend credit to the Borrower pursuant
to a certain Revolving Credit and Letter of Credit Agreement dated November 24,
1993, as amended by a letter agreement dated May 26, 1994 from Xxxxxxxx X.
Xxxxxxxxxx to Xxxxxx X. XxXxxx, and a Second Amendment to Revolving Credit and
Letter of Credit Agreement dated October 25, 1995, and a Third Amendment to
Revolving Credit and Letter of Credit Agreement of even date herewith
(collectively, the "Agreement"), in the form of a line of credit facility in an
original principal amount not to exceed Ten Million Dollars ($10,000,000.00),
which was reduced to Seven Million Dollars ($7,000,000.00), and is currently
being increased to Twelve Million Dollars ($12,000,000.00).
B. The indebtedness under the Agreement is evidenced by a Line of
Credit Promissory Note dated November 24, 1993 from Borrower to Bank, as amended
by a certain First Amendment to Line of Credit Promissory Note dated October 25,
1995, and certain letter agreements between the Bank and the Borrower, and a
certain Second Amendment to Line of Credit Promissory Note of even date herewith
(collectively, the "Note").
C. The repayment of the indebtedness evidenced by the Note is secured
by a Security Agreement dated October 25, 1995 between Borrower and Bank.
D. The Buyer has requested that the Bank extend the term and increase
the amount of such line of credit facility, and the Bank has agreed, and the
parties now wish to amend the Security Agreement.
WITNESSETH
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree that the Security Agreement is hereby modified and amended as follows (the
Security Agreement, as amended, is hereinafter referred to as the "Security
Agreement"):
1. Recitals. The parties acknowledge and agree that the foregoing
Recitals are true and correct, and are incorporated herein by reference.
2. Amendments to Security Agreement.
A. The aggregate amount of the credit facility described in
the Recitals of the Security Agreement and secured by the Security Agreement is
hereby increased from Seven Million Dollars ($7,000,000.00) to Twelve Million
Dollars ($12,000,000.00).
B. All references in the Security Agreement to the "Note"
shall mean the Line of Credit Promissory Note, as heretofore amended and as
amended on even date, and all references to the Loan Agreement shall mean the
Revolving Credit and Letter of Credit Agreement, as heretofore amended and as
amended on even date, as well as any future amendments or modifications thereof.
3. Effect of Amendment. Except as modified and amended herein, the
Security Agreement shall be and remain in full force and effect. In the event of
any conflict between the terms and provisions of the Security Agreement and this
First Amendment, the terms and provisions of this First Amendment shall prevail.
Nothing contained herein shall constitute a novation under the Note.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed and sealed, intending this to be a sealed instrument, as of the date
first above written.
WITNESS/ATTEST: ENVIRONMENTAL ELEMENTS CORPORATION
____________________________ By:_______________________(SEAL)
Name:
Title:
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY
____________________________ By:_______________________(SEAL)
Xxxxxxxx X. Xxxxxxxxxx,
Vice-President
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SECOND AMENDMENT TO LINE OF CREDIT PROMISSORY NOTE
THIS SECOND AMENDMENT (this "Amendment") is made as of this 12 day of
June, 1998 by and among ENVIRONMENTAL ELEMENTS CORPORATION, a Delaware
corporation ("Borrower") and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a
Maryland banking corporation ("Bank").
RECITALS
A. The Bank previously agreed to extend credit to the Borrower pursuant
to a certain Revolving Credit and Letter of Credit Agreement dated November 24,
1993, as amended by a letter agreement dated May 26, 1994 from Xxxxxxxx X.
Xxxxxxxxxx to Xxxxxx X. XxXxxx, and a Second Amendment to Revolving Credit and
Letter of Credit Agreement dated October 25, 1995 (collectively, the
"Agreement"), in the form of a line of credit facility in an original principal
amount not to exceed Ten Million Dollars ($10,000,000.00), which was reduced to
Seven Million Dollars ($7,000,000.00).
B. The indebtedness under the Agreement is evidenced by a Line of
Credit Promissory Note dated November 24, 1993 from Borrower to Bank, as amended
by a First Amendment to Line of Credit Promissory Note dated October 25, 1995,
and as subsequently amended by letter agreements between the Bank and Borrower
(collectively, the "Note").
C. The Borrower has requested that the Bank extend the term and
increase the amount of such line of credit facility, and the Bank has agreed,
subject to the terms and conditions hereinafter described.
WITNESSETH
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree that the Note is hereby modified and amended as follows (the Note, as
amended, is hereinafter referred to as the "Note"):
1. Recitals. The parties acknowledge and agree that the foregoing
Recitals are true and correct, and are incorporated herein by reference.
2. Amendments to Note.
A. The aggregate principal amount of the credit facility
described in the Note is hereby increased from Seven Million Dollars
($7,000,000.00) to Twelve Million Dollars ($12,000,000.00), and all references
to $7,000,000.00 in the Note (as previously amended) are hereby increased to
$12,000,000.00.
B. The maturity date for the term of the Note, as set forth on
Page 1 of the Note, is hereby extended until July 1, 2000. The Bank agrees to
provide to Borrower at least fifty-four (54) weeks' prior written notice if Bank
elects not to renew the term of the Note on July 1, 2000 (or the expiration of
any renewal term thereafter). The foregoing
notice shall not be required if the Bank elects to terminate the credit facility
following a default hereunder or under the Agreement.
C. The interest rate under the Note shall remain equal to the
Bank's Prime Rate plus one-half of one (0.5) percentage point per annum until
such time as the Borrower's net worth is equal to or greater than Seven Million
Five Hundred Thousand Dollars ($7,500,000.00); thereafter, the interest rate
under the Note shall be reduced to the Bank's Prime Rate, as announced from time
to time. For purposes hereof, the Borrower's net worth shall be determined at
the end of each calendar quarter, based on the audited financial statements or
the 10-Q financial reports of the Borrower.
D. All references in the Note to the "Agreement" shall mean
the Revolving Credit and Letter of Credit Agreement, as previously amended and
as amended on even date by the Third Amendment to Revolving Credit and Letter of
Credit Agreement, as well as any future amendments or modifications thereof.
3. Effect of Amendment. Except as heretofore and hereby modified and
amended, the Note shall be and remain in full force and effect. In the event of
any conflict between the terms and provisions of the Note and this Amendment,
the terms and provisions of this Amendment shall prevail. Borrower acknowledges
and confirms that it has no right of set-off or defense of any kind or
description regarding the payment of any principal or interest under the
Agreement or the Note, that it has no claims or causes of action against the
Bank, and that upon execution of the Third Amendment to Revolving Credit and
Letter of Credit Agreement there shall exist no default (or any event which,
with the passing of time or giving of notice would constitute a default) under
the Agreement or the Note. This Amendment shall not extinguish or discharge the
indebtedness evidenced by the Note, nor constitute a novation thereof.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed and sealed, intending this to be a sealed instrument, as of the date
first above written.
WITNESS/ATTEST: ENVIRONMENTAL ELEMENTS CORPORATION
____________________________ By:_______________________(SEAL)
Name:
Title:
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY
____________________________ By:_______________________(SEAL)
Xxxxxxxx X. Xxxxxxxxxx,
Vice-President
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THIRD AMENDMENT TO REVOLVING CREDIT
AND LETTER OF CREDIT AGREEMENT
THIS THIRD AMENDMENT is made as of this 12 day of June, 1998 by and
among ENVIRONMENTAL ELEMENTS CORPORATION, a Delaware corporation ("Borrower")
and MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY, a Maryland banking corporation
("Bank").
RECITALS
A. The Bank previously agreed to extend credit to the Borrower pursuant
to a certain Revolving Credit and Letter of Credit Agreement dated November 24,
1993, as amended by a letter agreement dated May 26, 1994 from Xxxxxxxx X.
Xxxxxxxxxx to Xxxxxx X. XxXxxx, and a Second Amendment to Revolving Credit and
Letter of Credit Agreement dated October 25, 1995 (collectively, the
"Agreement"), in the form of a line of credit facility in an original principal
amount not to exceed Ten Million Dollars ($10,000,000.00), which was
subsequently reduced to Seven Million Dollars ($7,000,000.00).
B. The indebtedness under the Agreement is evidenced by a Line of
Credit Promissory Note dated November 24, 1993 from Borrower to Bank, as
modified by a certain First Amendment to Line of Credit Promissory Note dated
October 25, 1995, certain letter agreements between the Bank and Borrower, and a
certain Second Amendment to Line of Credit Promissory Note of even date herewith
(collectively, "the Note").
C. The repayment of the indebtedness evidenced by the Note is secured
by a Security Agreement dated October 25, 1995 between Borrower and Bank, as
amended by a First Amendment to Security Agreement of even date herewith.
D. The Borrower has requested that the Bank extend the term and
increase the amount of the line of credit facility, and the Bank has agreed,
subject to the terms and conditions hereinafter described.
WITNESSETH
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree that the Amendment is hereby modified and amended as follows (the
Agreement, as amended, is hereinafter referred to as the "Agreement"):
1. Recitals. The parties acknowledge and agree that the foregoing
Recitals are true and correct, and are incorporated herein by reference.
2. Amendments to Original Agreement.
A. The aggregate principal amount of the credit facility
described in the first Recital of the Agreement is hereby increased to Twelve
Million Dollars ($12,000,000.00).
B. The definition of "Note" on Page 3 of the Agreement is
hereby modified to mean the Line of Credit Promissory Note, as heretofore
amended and as amended on even date herewith.
C. The definition of "Other Agreements" on Page 4 of the
Agreement is hereby modified to include this Third Amendment, the Second
Amendment to Line of Credit Promissory Note, and the First Amendment to Security
Agreement of even date herewith between the Borrower and Bank.
D. The definition of "Revolving Credit Commitment" on Page 5
of the Original Agreement is hereby deleted in its entirety and the following is
inserted in its place:
"Revolving Credit Commitment" shall mean, at any given time,
an amount equal to up to Twelve Million Dollars ($12,000,000.00), minus
the amount of any Letters of Credit then issued and outstanding under
this Agreement."
E. Section 2.01 of the Agreement is hereby amended by
extending the Line of Credit Termination Date until July 1, 2000, as may be
extended by the Bank in writing from time to time thereafter. Notwithstanding
the foregoing, the parties acknowledge and agree that the Bank will annually
review the financial status of the Borrower and its performance under the terms
and provisions of the Agreement, and the Bank shall have the right as a result
of such review not to renew the term of the Note, in the Bank's sole discretion,
upon at least fifty-four (54) week's prior written notice to Borrower.
F. Section 2.01 of the Agreement is hereby amended by adding
the following provision at the end of Section 2.1:
Notwithstanding anything to the contrary contained herein, the total
advances at any time under the Line of Credit plus the face amount of
outstanding Letters of Credit shall not exceed the aggregate of the
following: (i) seventy-five percent (75%) of eligible Receivables (i.e.
Receivables of 120 days or less); fifty percent (50%) of retainage owed
to Borrower under existing customer contracts; and fifty percent (50%)
of costs incurred by Borrower under existing customer contracts which
have not yet been billed to such customers, but will be billed in the
ordinary course of business.
G. The second sentence of Section 2.02 of the Agreement is
hereby deleted in its entirety.
H. Section 2.04(A) of the Agreement is hereby deleted in its
entirety and the following is inserted in its place:
The principal amount of all advances made hereunder shall bear
interest at a fluctuating rate equal to the Bank's Prime Rate in
effect from time to time, plus one-half of one (0.5) percentage point
per annum, until such time as the Borrower's net worth is equal to or
greater than Seven Million Five Hundred Thousand Dollars
($7,500,000.00); thereafter, the interest rate shall be reduced to the
Bank's Prime Rate, as announced from time to time. For purposes hereof,
the Borrower's net worth shall be determined at the end of each
calendar quarter, based on the audited financial statements or the 10-Q
financial reports of the Borrower. The interest rate shall be adjusted
as of the effective date of each change in the Bank's Prime Rate.
I. Section 2.06 of the Agreement is hereby deleted in its
entirety and the following is inserted in its place:
The Borrower agrees to pay to the Bank an annual facility fee,
equal to one-half of one percent (0.5%) of the total credit facility
available under the Agreement, which shall be paid quarterly in advance
(i.e. 0.5% of $12,000,000.00 equals $60,000.00, paid quarterly in the
amount of $15,000.00).
J. Section 3.01 of the Agreement is hereby deleted in its
entirety and the following is inserted in its place:
Subject to the terms hereof, the Bank will from time to time
until the Line of Credit Termination Date, make available Letters of
Credit in an aggregate amount not to exceed Tweleve Million Dollars
($12,000,000.00) minus the total principal amount then - outstanding
under the Line of Credit.
K. Section 6.05 of the Agreement is hereby amended by reducing
the required minimum Tangible Net Worth of Borrower to Five Million Seven
Hundred Fifty Thousand Dollars ($5,750,000.00), which shall be reviewed annually
by the Bank.
L. Section 6.06 of the Agreement is hereby deleted in its
entirety.
M. Borrower agrees it shall constitute a default under the
Agreement if the Borrower experiences a net operating loss during any fiscal
year, as determined by the Bank based upon the audited financial statements of
the Borrower.
3. Representations and Warranties. The Borrower hereby confirms that
all of the representations and warranties set forth in Section IV of the
Agreement are accurate, complete and correct as of the date of this Third
Amendment, and are incorporated herein by reference.
4. Effect of Amendment. Except as modified and amended herein, the
Agreement shall be and remain in full force and effect. In the event of any
conflict between the terms and provisions of the Agreement and this Third
Amendment, the terms and provisions of this Third Amendment shall prevail.
Nothing contained herein shall constitute a novation under the Note.
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be executed under seal, intending this to be a sealed instrument, as of the
date first above written.
WITNESS/ATTEST: ENVIRONMENTAL ELEMENTS CORPORATION
____________________________ By:_______________________(SEAL)
Name:
Title:
MERCANTILE-SAFE DEPOSIT AND TRUST COMPANY
____________________________ By:_______________________(SEAL)
Xxxxxxxx X. Xxxxxxxxxx,
Vice-President
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