LIMITED WAIVER
TO
REVOLVING CREDIT AGREEMENT
This LIMITED WAIVER TO CREDIT AGREEMENT is made and entered into as of
March 13, 2001 (this "WAIVER"), among (a) ITEQ, INC., a Delaware corporation
(the "BORROWER"), (b) THE GUARANTORS signatories hereto as guarantors, (c)
FLEET NATIONAL BANK (f/k/a/ BankBoston, N.A.), a national banking association
having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (acting in its individual capacity, "FLEET"), and the
other lending institutions which are or become parties to the Credit
Agreement defined below (together with Fleet, the "BANKS"), (d) DEUTSCHE BANK
AG, as documentation agent (the "DOCUMENTATION AGENT"), and (e) FLEET
NATIONAL BANK, as agent for the Banks (acting in such capacity, the "AGENT").
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Credit Agreement defined below.
WHEREAS, the Borrower, the Guarantors, the Banks, the Documentation
Agent and the Agent have entered into the Revolving Credit Agreement, dated
as of October 28, 1997 (as amended and in effect from time to time, the
"CREDIT AGREEMENT"), pursuant to which the Banks have extended credit to the
Borrower on the terms set forth therein;
WHEREAS, the Borrower has requested that the Banks and the Agent suspend
or waive certain covenants and other provisions contained in the Credit
Agreement and other Loan Documents; and
WHEREAS, the Banks and the Agent have agreed to honor such requests upon
the terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS. As used in this Waiver, the following terms
have the meanings set forth below:
NINTH AMENDMENT. The Limited Waiver and Ninth Amendment dated as of
July 7, 2000 entered into by the Borrower, the Guarantors, the Banks and the
Agent.
SECTION 2. LIMITED SUSPENSION OF CERTAIN FINANCIAL COVENANTS.
(a) Subject to the satisfaction of the conditions precedent set forth
in Section 4 and in consideration and reliance upon the agreements of the
Borrower and the Guarantors contained herein, the Banks and the Agent hereby
agree temporarily to suspend the Borrower's obligation to comply with
Sections 8.1, 8.2, 8.3, 8.4, 8.5, 8.6 and 8.7 of the Credit Agreement and
Section 2(a)(ii) of the Ninth Amendment (the "SPECIFIED COVENANTS") from
March 15, 2001 until 5 p.m.,
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Boston time, on April 2, 2001 (or such earlier date as this Waiver may expire
pursuant to Section 2(b) hereof); PROVIDED, that each of the following
conditions are satisfied throughout such period:
(i) the Borrower will not make or permit any Subsidiary to make,
Capital Expenditures or enter into Capitalized Leases and operating
leases with rental obligations, in an aggregate amount greater than
$750,000 for all such Capital Expenditures, Capitalized Leases and rental
obligations for the period from June 29, 2000 to April 2, 2001,
(ii) the Borrower shall have provided to the Banks and the Agent,
within 10 days following the end of each month, a certificate signed by
the Borrower's chief financial officer certifying as to the Borrower's
compliance with each of the conditions for such month as set forth
herein, together with the details thereof as reasonably requested by the
Agent, and
(iii) the Agent will have no obligation to issue, extend or renew
any Letters of Credit during such period, PROVIDED that the Banks agree
that the Agent may extend, if applicable, the Letter of Credit issued by
the Agent in favor of the National Union Fire Insurance Company of
Pittsburgh, Pennsylvania, in the amount, on the date hereof, of $714,473.
(b) At the earliest of (i) 5:00 p.m., Boston time, on April 2, 2001,
(ii) any condition set forth in Section 2(a) not being met, (iii) the
occurrence of any other Event of Default (other than the Borrower's failure
to comply with the Specified Covenants through April 2, 2001), and (iv) the
Agent, at any time on or after March 15, 2001, giving written notice to the
Borrower and the Guarantors of the termination of the suspension of the
Borrower's obligations to comply with the Specified Covenants, the provisions
of Section 2(a) shall expire and be of no further force or effect, and the
Banks and the Agent shall thereupon have all of the rights and remedies set
forth in the Credit Agreement and the other Loan Documents as if the
Borrower's compliance with the Specified Covenants of the Credit Agreement
and the Ninth Amendment had never been suspended. Such rights and remedies
include the right to declare all of the Obligations due and payable by reason
of the Borrower's failure to comply with the Specified Covenants and to
exercise all rights and remedies against the Borrower, the Guarantors and the
Collateral.
(c) The waiver set forth in Section 2(a) shall apply only to the
Specified Covenants. No waiver with respect to any other Default or Event of
Default, whether presently existing or hereafter arising, is granted hereby.
Any obligation to make Swing Line Loans, to make Revolving Credit Loans or to
issue, extend or renew Letters of Credit shall, at all times, be subject to
the satisfaction of all of the terms and conditions of the Credit Agreement,
including, without limitation, the conditions precedent set forth in the
Credit Agreement. The Banks and the Agent shall, at all times, retain all of
the rights and remedies in respect of any Default or
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Event of Default under the Credit Agreement other than, during the limited
period described in Section 2(a), with respect to the Specified Covenants.
SECTION 3. LIMITED SUSPENSION OF CLOSING FEE. Subject to the
satisfaction of the conditions precedent set forth in Section 4 and in
consideration and reliance upon the agreements of the Borrower and the
Guarantors contained herein, the Banks and the Agent hereby agree temporarily
to suspend the Borrower's obligation to make the Second Payment (as defined
in the Ninth Amendment) of the Closing Fee (as defined in the Ninth
Amendment) from March 15, 2001 until 5 p.m., Boston time, on April 2, 2001;
PROVIDED, that each of the conditions set forth in Section 2(a) are satisfied
throughout such period.
SECTION 4. CONDITIONS TO EFFECTIVENESS. This Waiver shall not become
effective unless on or prior to 5:00 p.m., Boston time, on March 15, 2001:
(a) this Waiver shall have been executed and delivered by the Borrower,
the Guarantors, the Majority Banks and the Agent;
(b) the Agent shall have received evidence satisfactory to it of
appropriate corporate or other entity actions approving the terms and
conditions set forth herein; and
(c) the Borrower shall have reimbursed the Agent for, or paid directly,
all fees, costs, and expenses incurred by the Agent, its counsel and their
professional advisors and for which invoices have been delivered.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
SECTION 5.1. REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. The
Borrower hereby represents and warrants to the Banks and the Agent that each
of the representations and warranties of the Borrower contained in the Credit
Agreement as modified hereby or in any document or instrument delivered
pursuant to or in connection with the Credit Agreement as modified hereby are
true as of the date hereof (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and changes
occurring in the ordinary course of business which singly or in the aggregate
are not materially adverse, or to the extent that such representations and
warranties relate solely and expressly to an earlier date) and, taking into
account this Waiver, no Default or Event of Default has occurred and is
continuing.
SECTION 5.2. AUTHORITY, NO CONFLICTS, ETC. The Borrower hereby
represents and warrants to the Banks and the Agent that the execution,
delivery and performance of this Waiver and the transactions contemplated
hereby (i) are within the corporate authority of the Borrower and the
Guarantors, (ii) have been duly authorized by all necessary corporate
proceedings, (iii) do not conflict with or result in any material breach or
contravention of any provision of law, statute, rule or regulation to which
the Borrower or any Guarantor is subject or
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any judgment, order, writ, injunction, license or permit applicable to the
Borrower or the Guarantors so as to materially adversely affect the assets,
business or any activity of the Borrower or the Guarantors, and (iv) do not
conflict with any provision of the corporate charter or bylaws of the
Borrower or the Guarantors or any agreement or other instrument binding upon
them. The execution, delivery and performance of this Waiver will result in
valid and legally binding obligations of the Borrower and the Guarantors
enforceable against each in accordance with the respective terms and
provisions hereof.
SECTION 5.3. CERTAIN SUBSIDIARIES. The Borrower hereby represents,
warrants and covenants to the Banks and the Agent that its Subsidiaries ITEQ
Management, LLC, ITEQ Tank, LLC and ITEQ Tank Construction, LLC have no
assets and are not conducting any business and will not acquire any assets or
conduct any business other than assets or operations of a DE MINIMIS value
that are in the process of being liquidated or wound down.
SECTION 6. RATIFICATION, ETC. This Waiver is limited to the waivers
and amendments to the Credit Agreement set forth herein and upon the terms
and subject to the conditions contained herein. Except as expressly stated
herein, the Credit Agreement, the other Loan Documents and all documents,
instruments and agreements related thereto are hereby ratified and confirmed
in all respects and shall continue in full force and effect. This Waiver is
a Loan Document.
SECTION 7. RELEASE. In order to induce the Agent and the Banks to
enter into this Waiver, each of the Borrower and the Guarantors acknowledges
and agrees that: (i) neither the Borrower nor any Guarantor has any claim or
cause of action against the Agent or any Bank (or any of its respective
directors, officers, employees or agents); (ii) neither the Borrower nor any
Guarantor has any offset right, counterclaim or defense of any kind against
any of their respective obligations, indebtedness or liabilities to the Agent
or any Bank; and (iii) each of the Agent and the Banks has heretofore
properly performed and satisfied in a timely manner all of its obligations to
the Borrower and each Guarantor. The Borrower and the Guarantors wish to
eliminate any possibility that any past conditions, acts, omissions, events,
circumstances or matters would impair or otherwise adversely affect any of
the Agent's and the Banks' rights, interests, contracts, collateral security
or remedies. Therefore, each of the Borrower and the Guarantors
unconditionally releases, waives and forever discharges (A) any and all
liabilities, obligations, duties, promises or indebtedness of any kind of the
Agent or any Bank to either the Borrower and any Guarantor, except the
obligations to be performed by the Agent or any Bank on or after the date
hereof as expressly stated in this Waiver, the Credit Agreement and the other
Loan Documents, and (B) all claims, offsets, causes of action, suits or
defenses of any kind whatsoever (if any), whether arising at law or in
equity, whether known or unknown, which the Borrower or any Guarantor might
otherwise have against the Agent, any Bank or any of its directors, officers,
employees or agents, in either case (A) or (B), on account of any past or
presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.
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SECTION 8. COUNTERPARTS. This Waiver may be executed in any number of
counterparts, which together shall constitute one instrument.
SECTION 9. GOVERNING LAW. THIS WAIVER SHALL BE A CONTRACT UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SAID
JURISDICTION, WITHOUT REFERENCE TO CONFLICTS OF LAW, AND IS INTENDED TO TAKE
EFFECT AS A SEALED INSTRUMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Waiver as an
instrument under seal to be effective as of the date first above written.
THE BORROWER:
ITEQ, INC.
By:
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Name:
Title:
THE GUARANTORS:
ITEQ MANAGEMENT COMPANY
EXELL, INC. (a Delaware corporation which is
successor by merger to EXELL. INC., a Texas
corporation)
ITEQ TANK SERVICES, INC. (successor by
merger to HMT TANK SERVICE, INC.)
RELIABLE STEEL, INC.
AIR-CURE DYNAMICS, INC.
AII HOLDINGS, INC.
XXXXXXXX, INC.
INTEREL ENVIRONMENTAL
TECHNOLOGIES, INC.
ALLIED INDUSTRIES, INC.
ITEQ CONSTRUCTION SERVICES, INC.
(f/k/a HMT CONSTRUCTION SERVICES,
INC.)
ITEQ INTELLECTUAL PROPERTIES, INC.
(f/x/a AIX INTELLECTUAL PROPERTIES,
INC.)
ITEQ INVESTMENTS, INC. (f/k/a
ASTROTECH INVESTMENTS, INC.)
TEXOMA TANK COMPANY, INC.
ITEQ STORAGE SYSTEMS, INC. (f/k/a
XXXXX-MINNEAPOLIS TANK &
FABRICATING CO., successor by merger to
HMT, INC., HMT SENTRY SYSTEMS, INC.
and TRUSCO TANK, INC.)
G.L.M. ACQUISITION, L.L.C.
AIR-CURE (CANADA) TECHNOLOGIES, LTC.
G.L.M. TANKS & EQUIPMENT LTD.
By:
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Name:
Title:
THE LENDERS:
FLEET NATIONAL BANK,
(f/k/a BankBoston, N.A.)
individually and as Agent
By:
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Name:
Title:
DEUTSCHE BANK AG,
individually and as Documentation Agent
By:
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Name:
Title:
By:
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Name:
Title:
BANK OF SCOTLAND
By:
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Name:
Title:
BANK ONE, TEXAS, N.A.
By:
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Name:
Title:
BNP XXXXXXX (x/x/x Xxxxxxx f/k/a Banque Paribas)
By:
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Name:
Title:
By:
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Name:
Title:
COMERICA BANK
By:
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Name:
Title:
THE FUJI BANK, LIMITED
By:
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Name:
Title:
HIBERNIA NATIONAL BANK
By:
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Name:
Title:
BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.)
By:
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Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:
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Name:
Title:
CHASE MANHATTAN BANK
(f/k/a Chase Bank of Texas, N.A. f/k/a Texas Commerce Bank, N.A.)
By:
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Name:
Title:
