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EXHIBIT 10.3
AMENDMENT TO LOAN AND SECURITY AGREEMENT
[DXP Acquisition, Inc., d/b/a Strategic Acquisition, Inc.]
THIS AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
made and entered into this 29th day of April, 1998, to be effective as of the
respective date herein indicated, by and between DXP ACQUISITION, INC., D/B/A
STRATEGIC ACQUISITION, INC., a Nevada corporation ("Borrower") and FLEET
CAPITAL CORPORATION, a Rhode Island corporation ("Lender").
RECITALS
A. Borrower and Lender have entered into that certain Loan and
Security Agreement, dated as of June 16, 1997 (the "Loan Agreement").
B. Borrower and Lender desire to amend the Loan Agreement and the
other Loan Documents as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
AGREEMENT
ARTICLE I
DEFINITIONS
1.01 Capitalized terms used in this Amendment are defined in the
Loan Agreement, as amended hereby, unless otherwise stated.
ARTICLE II
AMENDMENTS TO LOAN AGREEMENT
Effective as of the respective date herein indicated, the Loan
Agreement is hereby amended as follows:
2.01 AMENDMENT TO SECTION 1.1; ADDITION OF CERTAIN DEFINITIONS.
Effective as of the date of execution of this Amendment, Section 1.1 of the
Loan Agreement is hereby amended by adding the following new definitions
thereto, to be inserted in their proper alphabetical order:
"ACQUISITION TERM LOAN - shall have the same meaning as in the
Sepco Loan Agreement.
CAPITALIZED LEASE OBLIGATION - any Indebtedness represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP."
DOMESTIC MARGIN - at all times up to and including June 30,
1998-0.50% per annum. Thereafter, 0.00% per annum.
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 1
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EBITDA - for any fiscal period of Borrower, means the sum of
(i) the Adjusted Net Earnings From Operations of Parent and its
Subsidiaries for such period, plus (ii) non-cash charges of Parent and
its Subsidiaries in respect to depreciation and amortization for such
period, plus (iii) Tax Expense of Parent and its Subsidiaries for such
period, plus (iv) Interest Expense of Parent and its Subsidiaries for
such period, all of the above being determined on a consolidated basis
in accordance with GAAP.
EURODOLLAR ADJUSTMENT DATE - initially, July 1, 1998, and
thereafter, the first Business Day of the calendar month during which
Lender receives the Compliance Certificate required by Section 9.1(J)
hereof having a calculation date as of the last day of September,
December, March or June, as the case may be (referred to in this
Agreement as a 'Quarterly Compliance Certificate'), beginning with the
Compliance Certificate having the calculation date as of September 30,
1998.
EURODOLLAR MARGIN - (i) for all Eurodollar Loans outstanding
during the period ending on June 30, 1998, 2.00% per annum, and
thereafter (ii) for all Eurodollar Loans outstanding during the period
beginning on a Eurodollar Adjustment Date and ending on the day
preceding the subsequent Eurodollar Adjustment Date, the applicable
percent per annum set forth in the pricing table below opposite the
ratio of (i) the aggregate principal amount of all Senior Debt
outstanding on the calculation date of the applicable Compliance
Certificate to (ii) the EBITDA calculated for the trailing twelve
calendar month period ending on the calculation date of the applicable
Compliance Certificate (which EBITDA may contain adjustments for the
Target Company EBITDA of any Target Company purchased by Sepco with an
Acquisition Term Loan during the relevant twelve calendar month
period, provided that any such adjustment must be consented to by
Lender, which consent shall be given or withheld by Lender in its sole
discretion, and such adjustment must also be calculated in a manner
satisfactory to Lender, in Lender's sole discretion).
PRICING TABLE
RATIO OF SENIOR DEBT EURODOLLAR
TO EBITDA MARGIN
------------------------------------ --------------
(i) Greater than 4.50 to (i) 2.50%
1.00
(ii) Equal to or less than 4.50 to (ii) 2.25%
1.00, but greater than 4.00
to 1.00
(iii) Equal to or less than 4.00 to (iii) 2.00%
1.00, but greater than 3.50
to 1.00
(iv) Equal to or less than 3.50 to (iv) 1.75%
1.00, but greater than 3.00
to 1.00
(v) Equal to or less than 3.00 to (v) 1.50%
1.00
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 2
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If Borrower shall fail to deliver a Quarterly Compliance
Certificate by the date required pursuant to Section 9.1(J) of this
Agreement, then effective as of the date such Quarterly Compliance
Certificate becomes delinquent, the applicable Eurodollar Margin shall
be conclusively presumed to equal the highest applicable Eurodollar
Margin specified in the pricing table set forth above, such automatic
adjustment to remain in effect until the first Business Day of the
calendar month during which such delinquent Quarterly Compliance
Certificate is delivered. From and after the first Business Day of
the calendar month during which such delinquent Quarterly Compliance
Certificate is delivered and until the next Eurodollar Adjustment
Date, the Eurodollar Margin shall be determined by reference to such
delinquent Quarterly Compliance Certificate and the pricing table set
forth above.
FIXED CHARGE RATIO - for any fiscal period of Borrower means,
the ratio of (i) an amount equal to (a) the sum of (1) the Adjusted
Net Earnings From Operations of Parent and its Subsidiaries for such
period, plus (2) non-cash charges of Parent and its Subsidiaries in
respect to depreciation and amortization for such period, plus (3)
Interest Expense of Parent and its Subsidiaries for such period, minus
(4) Capital Expenditures made by Parent and its Subsidiaries during
such period, to (ii) Fixed Charges of Parent and its Subsidiaries for
such period, all of the above being determined on a consolidated basis
in accordance with GAAP.
FIXED CHARGES - for any fiscal period of Borrower means the
sum of scheduled principal payments required to be made by Parent and
its Subsidiaries during such period in respect to Indebtedness, plus
(ii) Interest Expense of Parent and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP.
INTEREST EXPENSE - with respect to any fiscal period, the
interest expense incurred for such period as determined in accordance
with GAAP plus Letter of Credit and LC Guaranty fees owing for such
period.
MONEY BORROWED - means (i) Indebtedness arising from the
lending of money by any Person to Parent or any Subsidiary of Parent,
(ii) Indebtedness, whether or not in any such case arising from the
lending by any Person of money to Parent or any Subsidiary of Parent
(A) which is represented by notes payable or drafts accepted that
evidence extensions of credit, (B) which constitutes obligations
evidenced by bonds, debentures, notes or similar instruments or (C)
upon which interest charges are customarily paid (other than accounts
payable) or that was issued or assumed as full or partial payment for
Property; (iii) Indebtedness that constitutes a Capitalized Lease
Obligation; (iv) reimbursement obligations with respect to letters of
credit or guaranties of letters of credit; and (v) Indebtedness of
Parent or any Subsidiary of Parent under any guaranty of obligations
that would constitute Indebtedness for Money Borrowed under clauses
(i) through (iv) hereof, if owed directly by Parent or such Subsidiary
of Parent.
SENIOR DEBT means all Money Borrowed, excluding Subordinated
Debt.
SENIOR INTEREST COVERAGE RATIO - for any fiscal period of
Borrower means the ratio of (i) an amount equal to the sum of (a) the
Adjusted Net Earnings From Operations of Parent and its Subsidiaries
for such period, plus (b) Tax Expense of Parent and its Subsidiaries
for such period, plus (c) Interest Expense of Parent and its
Subsidiaries for such period in respect of Senior Debt, to (ii)
Interest Expense of Parent and its
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Subsidiaries for such period in respect of Senior Debt, all as
determined on a consolidated basis in accordance with GAAP.
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 3
STOCK OFFERING - the secondary stock offering of capital stock
in Parent which is expected to raise approximately $25,000,000 in net
proceeds for Parent.
TARGET COMPANY - shall have the same meaning as in the Sepco
Loan Agreement.
TARGET COMPANY EBITDA - shall have the same meaning as in the
Sepco Loan Agreement.
TAX EXPENSE - with respect to any fiscal period, the tax
expense incurred for such period as determined in accordance with
GAAP."
2.02 AMENDMENT TO DEFINITION OF "BORROWING BASE" IN SECTION 1.1.
Effective as of the date of execution of this Amendment, the definition of
"Borrowing Base" contained in Section 1.1 of the Loan Agreement is hereby
amended by deleting therefrom the phrase "Twelve Million Dollars ($12,000,000)"
and substituting therefor the phrase "Seven Million Five Hundred Thousand
Dollars ($7,500,000)."
2.03 AMENDMENT TO DEFINITIONS OF "COMMITMENT" IN SECTION 1.1.
Effective as of the date of execution of this Amendment, the definition of
"Commitment" contained in Section 1.1 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:
"Commitment - Seven Million Five Hundred Thousand Dollars
($7,500,000.00)."
2.04 AMENDMENT TO SECTION 3.1(A). Effective as of the date of
execution of this Amendment, the first two sentences of Section 3.1(A) of the
Loan Agreement are amended and restated to read in their entirety as follows:
"(A) Interest shall accrue on the principal amount of the
Revolving Credit Loans outstanding at the end of each day, at the
following rates per annum (individually called, as applicable, an
'Applicable Annual Rate'): (i) Eurodollar Loans shall bear interest
at a rate per annum equal to the applicable Eurodollar Margin plus the
Eurodollar Base Rate for the Eurodollar Interest Period applicable
thereto and (ii) all other Revolving Credit Loans shall bear interest
at a rate per annum equal to the applicable Domestic Margin plus the
Base Rate. Revolving Credit Loans shall bear interest at a rate per
annum equal to the applicable Domestic Margin plus the Base Rate
unless the Borrower provides a Eurodollar Borrowing Notice to the
Lender in accordance with Section 3.7(A) irrevocably electing that all
or a portion of the Revolving Credit Loans are to bear interest at a
Eurodollar Base Rate."
2.05 AMENDMENT TO SECTION 3.1(B). Effective as of the date of
execution of this Amendment, Section 3.1(B) of the Loan Agreement is hereby
amended by amending and restating clause (ii) of such Section 3.1(B) in its
entirety as follows:
"(ii) unless preempted by federal law, the Applicable
Annual Rate or Default Rate, as applicable, from time to time in
effect hereunder may not exceed the applicable
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'weekly ceiling' (as such term is defined in Chapter 303 of the Texas
Finance Code [Vernon's Texas Codes Annotated], as amended from time to
time) from time to time in effect."
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 4
2.06 AMENDMENT TO SECTION 3.3. Effective as of the date of
execution of this Amendment, Section 3.3 of the Loan Agreement is amended as
follows:
"(i) Section 3.3(A) is amended by deleting therefrom the
reference to the date "January 2, 1999" and substituting therefor the
date "January 2, 2000."
(ii) Section 3.3(D) is amended and restated to read in its
entirety as follows:
"(D) At the effective date of any termination of
this Agreement, Borrower shall pay to Lender (in addition to
the then outstanding principal, accrued interest and other
charges owing under this Agreement and any of the Other
Agreements), as liquidated damages for the loss of the bargain
and not as a penalty, an amount equal to $50,000 if
termination occurs at any time prior to January 2, 2000 or
during any Renewal Term thereafter. If termination occurs on
the last day of the Original Term or the last day of any
Renewal Term, no termination charge shall be payable. In
addition, no termination charge shall be payable hereunder if
the Sepco Loan Agreement is terminated on the same effective
date as the termination of this Agreement and the $50,000
termination charge payable by Sepco under the Sepco Loan
Agreement has been paid by Sepco."
2.07 AMENDMENT TO SECTION 9.3. Effective as of the date of
execution of this Amendment, Section 9.3 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
"9.3. Specific Financial Covenants. During the term of
this Agreement, and thereafter for so long as there are any
Obligations to Lender, Borrower covenants that, unless otherwise
consented to by Lender in writing, Parent and its Subsidiaries shall:
(A) Maintain, on a consolidated basis in
accordance with GAAP, as of the end of each fiscal quarter,
beginning with the fiscal quarter ending on June 30, 1998, for
the twelve calendar month period ending on such date, a Fixed
Charge Ratio of not less than 1.50 to 1.00.
(B) Achieve, on a consolidated basis in
accordance with GAAP, on the last day of each fiscal quarter
set forth below, for the twelve calendar month period ending
on such date, a Senior Interest Coverage Ratio equal to or
greater than the ratio set forth below for the twelve calendar
month period ending on the date corresponding thereto:
DATE RATIO
---- -----
(i) June 30, 1998 (i) 2.75 to 1.00
(ii) September 30, 1998 (ii) 2.75 to 1.00
(iii) December 31, 1998 (iii) 2.75 to 1.00
(iv) Each March 31, June 30, (iv) 3.00 to 1.00
September 30, and December 31
thereafter occurring
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 5
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(C) Maintain, on a consolidated basis in
accordance with GAAP, as of the last day of each fiscal
quarter set forth below (the 'Calculation Date'), a ratio of
(i) the Senior Debt of Parent and its Subsidiaries on such
Calculation Date, to (ii) an amount equal to (a) the EBITDA of
Parent and its Subsidiaries for the twelve calendar month
period ending on such Calculation Date, minus (b) Capital
Expenditures made by Parent and its Subsidiaries during such
period, of not greater than the ratio set forth below on the
Calculation Date corresponding thereto:
CALCULATION DATE RATIO
---------------- -----
(i) June 30, 1998 (i) 4.50 to 1.00
(ii) September 30, 1998 (ii) 4.50 to 1.00
(iii) December 31, 1998 (iii) 4.50 to 1.00
(iv) Each March 31, June 30, (iv) 4.00 to 1.00
September 30, and December 31
thereafter occurring
Notwithstanding the foregoing, beginning with the first
Calculation Date to occur after the consummation of the Stock
Offering, and continuing on each subsequent Calculation Date,
the relevant maximum ratio shall be 3.00 to 1.00."
2.08 AMENDMENT TO SECTION 11.1(P). Effective as of the date of
execution of this Amendment, Section 11.1(P) of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
"(P) Borrower and/or Sepco ceases to be a Subsidiary of
Parent, unless due to the merger of Borrower and/or Sepco into Parent,
with Parent being the surviving entity;"
2.09 AMENDMENT TO SECTION 11.1; ADDITION OF A NEW SECTION 11.1(S).
Effective as of the date of execution of this Amendment, Section 11.1 of the
Loan Agreement is amended by adding thereto a new Section 11.1(R), to read in
its entirety as follows:
"(S) Each of Borrower, American MRO, Bayou, Sepco, and
Pelican State Supply Company, Inc. have not by October 1, 1998, been
merged into Parent, with Parent being the surviving entity, upon terms
and conditions and pursuant to documentation satisfactory to Lender."
2.10 AMENDMENT TO SECTION 12.10. Effective as of the date of
execution of this Amendment, Section 12.10 of the Loan Agreement is amended by
deleting therefrom the reference to:
"Xxxxxx & Xxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq."
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 6
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and substituting therefor the following:
"Xxxxxx Xxxxx, L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Facsimile No. (000) 000-0000"
2.11 AMENDMENT TO SECTION 12.16. Effective as of the date of
execution of this Amendment, Section 12.16 of the Loan Agreement is hereby
amended and restated to read in its entirety as follows:
"12.16. Nonapplicability of Chapter 303 of Texas Finance
Code. Borrower and Lender hereby agree that the provisions of Chapter
346 of the Texas Finance Code [Vernon's Texas Codes Annotated] (which
regulates certain revolving loan accounts and revolving triparty
accounts) shall not apply to this Agreement or any of the other Loan
Documents."
ARTICLE III
NO WAIVERS
3.01 Nothing contained herein shall be construed as a waiver by
Lender of any covenant or provision of the Loan Agreement, the other Loan
Documents, this Amendment or of any other contract or instrument between
Borrower and Lender, and the failure of Lender at any time or times hereafter
to require strict performance by Borrower of any provision thereof shall not
waive, affect or diminish any right of Lender to thereafter demand strict
compliance therewith. Lender hereby reserves all rights granted under the Loan
Agreement, the other Loan Documents, this Amendment and any other contract or
instrument between Borrower and Lender.
ARTICLE IV
CONDITIONS PRECEDENT
4.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment is subject to the satisfaction of the following conditions precedent
in a manner satisfactory to Lender, unless specifically waived in writing by
Lender:
(a) Lender shall have received each of the following,
each in form and substance satisfactory to Lender, in its sole
discretion, and, where applicable, each duly executed by each party
thereto, other than Lender:
(i) This Amendment, duly executed by Lender,
together with the relevant Consent, Ratification, and
Amendment, respectively duly executed by Sepco Industries,
Inc., Bayou Pumps, Inc., American MRO, Inc., Pelican State
Supply Company, Inc. and DXP Enterprises, Inc.;
(ii) All other documents Lender may request with
respect to any matter relevant to this Amendment or the
transactions contemplated hereby;
(b) The representations and warranties contained herein
and in the Loan Agreement and the other Loan Documents, as each is
amended hereby, shall be true and correct as of the date hereof, as if
made on the date hereof;
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 7
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(c) No Default or Event of Default shall have occurred
and be continuing, unless such Default or Event of Default has been
otherwise specifically waived in writing by Lender; and
(d) All corporate proceedings taken in connection with
the transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to Lender and its legal counsel.
ARTICLE V
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
5.01 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and the other Loan Documents, and, except as
expressly modified and superseded by this Amendment, the terms and provisions
of the Loan Agreement and the other Loan Documents are ratified and confirmed
and shall continue in full force and effect. Each Borrower and Lender agree
that the Loan Agreement and the other Loan Documents, as amended hereby, shall
continue to be legal, valid, binding and enforceable in accordance with their
respective terms.
5.02 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents
and warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other Loan Documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the Articles of Incorporation or
Bylaws of Borrower; (b) attached hereto as Annex A is a true, correct and
complete copy of presently effective resolutions of Borrower's Board of
Directors authorizing the execution, delivery and performance of this Amendment
and any and all other Loan Documents executed and/or delivered in connection
herewith, certified by the Assistant Secretary of Borrower; (c) the
representations and warranties contained in the Loan Agreement, as amended
hereby, and any other Loan Documents are true and correct on and as of the date
hereof and on and as of the date of execution hereof as though made on and as
of each such date; (d) no Default or Event of Default under the Loan Agreement,
as amended hereby, has occurred and is continuing, unless such Default or Event
of Default has been specifically waived in writing by Lender; (e) Borrower is
in full compliance with all covenants and agreements contained in the Loan
Agreement and the other Loan Documents, as amended hereby; and (f) Borrower has
not amended its Articles of Incorporation or its Bylaws since the date of the
Loan Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in the Loan Agreement or any other Loan
Documents, including, without limitation, any document furnished in connection
with this Amendment, shall survive the execution and delivery of this Amendment
and the other Loan Documents, and no investigation by Lender or any closing
shall affect the representations and warranties or the right of Lender to rely
upon them.
6.02 REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and
the other Loan Documents, and any and all other Loan Documents, documents or
instruments now or hereafter executed and delivered pursuant to the terms
hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are
hereby amended so that any reference in the Loan Agreement and such other Loan
Documents to the Loan Agreement shall mean a reference to the Loan Agreement as
amended hereby.
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 8
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6.03 EXPENSES OF LENDER. As provided in the Loan Agreement,
Borrower agrees to pay on demand all costs and expenses incurred by Lender in
connection with the preparation, negotiation, and execution of this Amendment
and the other Loan Documents executed pursuant hereto and any and all
amendments, modifications, and supplements thereto, including, without
limitation, the costs and fees of Lender's legal counsel, and all costs and
expenses incurred by Lender in connection with the enforcement or preservation
of any rights under the Loan Agreement, as amended hereby, or any other Loan
Documents, including, without, limitation, the costs and fees of Lender's legal
counsel.
6.04 SEVERABILITY. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Lender and Borrower and their respective
successors and assigns, except that Borrower may not assign or transfer any of
its rights or obligations hereunder without the prior written consent of
Lender.
6.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
6.07 EFFECT OF WAIVER. No consent or waiver, express or implied,
by Lender to or for any breach of or deviation from any covenant or condition
by Borrower shall be deemed a consent to or waiver of any other breach of the
same or any other covenant, condition or duty.
6.08 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS
EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
6.10 FINAL AGREEMENT. THE LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS
EXECUTED. THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS AMENDED HEREBY,
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
PROVISION OF THIS AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED
BY BORROWER AND LENDER.
6.11 RELEASE. BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES
OF ANY KIND OR NATURE FROM LENDER. BORROWER HEREBY
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 9
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VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH BORROWER MAY NOW OR HEREAFTER HAVE AGAINST LENDER, ITS
PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY "LOANS", INCLUDING,
WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING, RESERVING,
COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN AGREEMENT OR
OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS AMENDMENT.
IN WITNESS WHEREOF, this Amendment has been executed and is effective
as of the date first above-written.
"BORROWER"
DXP ACQUISITION, INC.,
D/B/A STRATEGIC ACQUISITION, INC.
By: /s/ XXXX X. XXXXXXX
------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Senior V.P./Finance
------------------------
"LENDER"
FLEET CAPITAL CORPORATION
By: /s/ H. XXXXXXX XXXXX
------------------------
Name: H. Xxxxxxx Xxxxx
------------------------
Title: VP
------------------------
ANNEXES:
A-1 - Certified Resolutions of DXP Acquisition, Inc., d/b/a Strategic
Acquisition, Inc.
AMENDMENT TO LOAN AND SECURITY AGREEMENT - PAGE 10
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ANNEX A-1
CERTIFIED RESOLUTIONS OF
DXP ACQUISITION, INC.,
D/B/A STRATEGIC ACQUISITION, INC.'S BOARD OF DIRECTORS
RESOLVED: That any officer of DXP Acquisition, Inc., d/b/a Strategic
Acquisition, Inc., a Nevada corporation (the "Corporation"), acting alone, by
his signature be, and the same hereby is, authorized and directed, in the name
of and on behalf of the Corporation (a) to amend the Corporation's existing
Loan and Security Agreement by and between the Corporation and Fleet Capital
Corporation, a Rhode Island corporation ("Lender"), (b) to execute and deliver
to Lender with such changes in the terms and provisions thereof as the officer
executing same shall, in his sole discretion, deem advisable, (i) a certain
proposed Amendment to Loan and Security Agreement to be executed by Corporation
and Lender, a draft of which has been reviewed and discussed by the Board of
Directors of the Corporation, and (ii) such other Loan Documents, instruments,
statements and writings as the officer or officers executing the same may deem
desirable or necessary in connection therewith, and (c) to perform such other
acts as the officer or officers performing such acts on behalf of the
Corporation may deem desirable or necessary in connection therewith; and be it
FURTHER RESOLVED: That said agreements will benefit the Corporation,
both directly and indirectly, and are in the best interests of the Corporation;
and be it
FURTHER RESOLVED: That said agreements and other statements in
writing executed in the name and on behalf of the Corporation by any officer of
the Corporation shall be presumed conclusively to be the instruments, the
execution of which is authorized by these resolutions; and be it
FURTHER RESOLVED: That the officers of the Corporation be, and the
same hereby are, authorized and directed to execute, in the name of and on
behalf of the Corporation, security agreements, financing statements,
assignments, collateral reports, loan statements, confirmations of delivery,
lien statements, pledge certificates, release certificates, removal reports,
guaranties, cross- collateralization agreements and such other writings and to
take such other actions as are necessary in their dealings with Lender, and any
such papers executed and any such actions taken by any of them prior to this
time are approved, ratified and confirmed; and be it
FURTHER RESOLVED: That the Secretary or any Assistant Secretary of
the Corporation, by the signature of any one or more of them, be, and the same
hereby are, authorized and directed to attest the execution by the Corporation
of the papers signed pursuant to these resolutions, to affix the seal of the
Corporation thereto, if required by Lender, and to certify to Lender the
adoption of these resolutions.
CERTIFICATION
The undersigned hereby certifies that the within and foregoing
resolutions are in effect as of the date hereof, without modification, and that
the person signing the within and foregoing Amendment on behalf of the
Corporation is the duly elected officer stated below his name, that he is
authorized to sign such Amendment, and that his signature thereon is genuine.
DATED: April 29, 1998.
/s/ XXXX X. XXXXXXX
----------------------------------------
[Assistant] Secretary of the Corporation
CONSENT AND RATIFICATION TO
AMENDMENT TO LOAN AND SECURITY - Page 1
12
CONSENT, RATIFICATION, AND AMENDMENT
The undersigned, SEPCO INDUSTRIES, INC., has executed that certain
Continuing Guaranty Agreement, dated June 16, 1997 (the "Guaranty"), in favor
of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"). The
undersigned hereby (i) consents and agrees to the terms of the Amendment to
Loan and Security Agreement, dated as of April 29, 1998 (the "Loan Amendment"),
by and between DXP Acquisition, Inc., d/b/a Strategic Acquisition, Inc., a
Nevada corporation, and Lender, a copy of which has been reviewed by the
undersigned, and (ii) agrees that the Guaranty shall remain in full force and
effect and shall continue to be the legal, valid and binding obligation of the
undersigned enforceable against it in accordance with its terms. Furthermore,
the undersigned hereby agrees and acknowledges that (a) the obligations,
indebtedness and liabilities arising in connection with the Loan Amendment
comprise some, but not all, of the "Obligations" as such term is used in the
Guaranty, (b) the Guaranty is an "Other Agreement", as such term is defined in
the Loan Agreement, (c) the Guaranty is not as of this date subject to any
claims, defenses or offsets, (d) nothing contained in the Loan Agreement or any
Other Agreement entered into prior to or as of the date hereof shall adversely
affect any right or remedy of Lender under the Guaranty, and (e) the execution
and delivery of the Loan Amendment shall in no way reduce, impair or discharge
any obligations of the undersigned as guarantor pursuant to the Guaranty and
shall not constitute a waiver by Lender of any of Lender's rights against the
undersigned.
Dated: April 29, 1998.
SEPCO INDUSTRIES, INC.
By: /s/ XXXX X. XXXXXXX
------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Senior V.P./Finance
------------------------
CONSENT AND RATIFICATION TO
AMENDMENT TO LOAN AND SECURITY - Page 1
13
CONSENT, RATIFICATION, AND AMENDMENT
The undersigned, AMERICAN MRO, INC., has executed that certain
Continuing Guaranty Agreement, dated June 16, 1997 (the "Guaranty"), in favor
of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"). The
undersigned hereby (i) consents and agrees to the terms of the Amendment to
Loan and Security Agreement, dated as of April 29, 1998 (the "Loan Amendment"),
by and between DXP Acquisition, Inc., d/b/a Strategic Acquisition, Inc., a
Nevada corporation, and Lender, a copy of which has been reviewed by the
undersigned, and (ii) agrees that the Guaranty shall remain in full force and
effect and shall continue to be the legal, valid and binding obligation of the
undersigned enforceable against it in accordance with its terms. Furthermore,
the undersigned hereby agrees and acknowledges that (a) the obligations,
indebtedness and liabilities arising in connection with the Loan Amendment
comprise some, but not all, of the "Obligations" as such term is used in the
Guaranty, (b) the Guaranty is an "Other Agreement", as such term is defined in
the Loan Agreement, (c) the Guaranty is not as of this date subject to any
claims, defenses or offsets, (d) nothing contained in the Loan Agreement or any
Other Agreement entered into prior to or as of the date hereof shall adversely
affect any right or remedy of Lender under the Guaranty, and (e) the execution
and delivery of the Loan Amendment shall in no way reduce, impair or discharge
any obligations of the undersigned as guarantor pursuant to the Guaranty and
shall not constitute a waiver by Lender of any of Lender's rights against the
undersigned.
Dated: April 29, 1998.
AMERICAN MRO, INC.
By: /s/ XXXX X. XXXXXXX
------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Senior V.P./Finance
------------------------
CONSENT AND RATIFICATION TO
AMENDMENT TO LOAN AND SECURITY - Page 1
14
CONSENT, RATIFICATION, AND AMENDMENT
The undersigned, BAYOU PUMPS, INC., has executed that certain
Continuing Guaranty Agreement, dated June 16, 1997 (the "Guaranty"), in favor
of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"). The
undersigned hereby (i) consents and agrees to the terms of the Amendment to
Loan and Security Agreement, dated as of April 29, 1998 (the "Loan Amendment"),
by and between DXP Acquisition, Inc., d/b/a Strategic Acquisition, Inc., a
Nevada corporation, and Lender, a copy of which has been reviewed by the
undersigned, and (ii) agrees that the Guaranty shall remain in full force and
effect and shall continue to be the legal, valid and binding obligation of the
undersigned enforceable against it in accordance with its terms. Furthermore,
the undersigned hereby agrees and acknowledges that (a) the obligations,
indebtedness and liabilities arising in connection with the Loan Amendment
comprise some, but not all, of the "Obligations" as such term is used in the
Guaranty, (b) the Guaranty is an "Other Agreement", as such term is defined in
the Loan Agreement, (c) the Guaranty is not as of this date subject to any
claims, defenses or offsets, (d) nothing contained in the Loan Agreement or any
Other Agreement entered into prior to or as of the date hereof shall adversely
affect any right or remedy of Lender under the Guaranty, and (e) the execution
and delivery of the Loan Amendment shall in no way reduce, impair or discharge
any obligations of the undersigned as guarantor pursuant to the Guaranty and
shall not constitute a waiver by Lender of any of Lender's rights against the
undersigned.
Dated: April 29, 1998.
BAYOU PUMPS, INC.
By: /s/ XXXX X. XXXXXXX
------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Senior V.P./Finance
------------------------
CONSENT AND RATIFICATION TO
AMENDMENT TO LOAN AND SECURITY - Page 1
15
CONSENT, RATIFICATION, AND AMENDMENT
The undersigned, PELICAN STATE SUPPLY COMPANY, INC., has executed that
certain Continuing Guaranty Agreement, dated June 16, 1997 (the "Guaranty"), in
favor of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"). The
undersigned hereby (i) consents and agrees to the terms of the Amendment to
Loan and Security Agreement, dated as of April 29, 1998 (the "Loan Amendment"),
by and between DXP Acquisition, Inc., d/b/a Strategic Acquisition, Inc., a
Nevada corporation, and Lender, a copy of which has been reviewed by the
undersigned, and (ii) agrees that the Guaranty shall remain in full force and
effect and shall continue to be the legal, valid and binding obligation of the
undersigned enforceable against it in accordance with its terms. Furthermore,
the undersigned hereby agrees and acknowledges that (a) the obligations,
indebtedness and liabilities arising in connection with the Loan Amendment
comprise some, but not all, of the "Obligations" as such term is used in the
Guaranty, (b) the Guaranty is an "Other Agreement", as such term is defined in
the Loan Agreement, (c) the Guaranty is not as of this date subject to any
claims, defenses or offsets, (d) nothing contained in the Loan Agreement or any
Other Agreement entered into prior to or as of the date hereof shall adversely
affect any right or remedy of Lender under the Guaranty, and (e) the execution
and delivery of the Loan Amendment shall in no way reduce, impair or discharge
any obligations of the undersigned as guarantor pursuant to the Guaranty and
shall not constitute a waiver by Lender of any of Lender's rights against the
undersigned.
Dated: April 29, 1998.
PELICAN STATE SUPPLY COMPANY, INC.
By: /s/ XXXX X. XXXXXXX
------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Senior V.P./Finance
------------------------
CONSENT AND RATIFICATION TO
AMENDMENT TO LOAN AND SECURITY - Page 1
16
CONSENT, RATIFICATION AND AMENDMENT
The undersigned, DXP ENTERPRISES, INC., has executed (x) that certain
Continuing Guaranty Agreement, dated June 16, 1997 (the "Guaranty"), in favor
of FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Lender"), and (y)
that certain Stock Pledge Agreement, dated as of June 16, 1997, executed by the
undersigned and Fleet (the "Security Agreement"). The undersigned hereby (i)
consents and agrees to the terms of the Amendment to Loan and Security
Agreement, dated as of April 29, 1998 (the "Loan Amendment"), by and between
DXP Acquisition, Inc., d/b/a Strategic Acquisition, Inc., a Nevada corporation,
and Lender, a copy of which has been reviewed by the undersigned, and (ii)
agrees that each of the Guaranty and the Security Agreement shall remain in
full force and effect and shall continue to be the legal, valid and binding
obligation of the undersigned, enforceable against it in accordance with its
terms. Furthermore, the undersigned hereby agrees and acknowledges that (a)
the obligations, indebtedness and liabilities arising in connection with the
Loan Amendment comprise some, but not all, of the "Obligations", as such term
is used in the Guaranty, and some, but not all, of the "Secured Obligations",
as such term is used in the Security Agreement, (b) each of the Guaranty and
the Security Agreement is an "Other Agreement", as such term is defined in the
Loan Agreement, (c) neither the Guaranty nor the Security Agreement is, as of
the date hereof, subject to any claims, defenses or offsets, (d) nothing
contained in the Loan Agreement or any Other Agreement entered into prior to or
as of the date hereof shall adversely affect any right or remedy of Lender
under the Guaranty or under the Security Agreement, and (e) the execution and
delivery of the Loan Amendment shall in no way reduce, impair or discharge any
obligations of the undersigned as guarantor pursuant to the Guaranty or as
debtor pursuant to the Security Agreement and shall not constitute a waiver by
Lender of any of Lender's rights against the undersigned.
Dated: April 29, 1998.
DXP ENTERPRISES, INC.
By: /s/ XXXX X. XXXXXXX
------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Senior V.P./Finance
------------------------
CONSENT AND RATIFICATION TO
AMENDMENT TO LOAN AND SECURITY - Page 1
