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EXHIBIT 10.15
FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND LOAN DOCUMENTS
THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS
(this "Amendment"), dated as of March 22, 2000 is between NATIONAL BANK OF
CANADA, a Canadian chartered bank ("Lender"), METRETEK TECHNOLOGIES, INC. (f/k/a
Xxxxxx Natural Gas Services, Inc.), a Delaware corporation ("Metretek
Technologies"), METRETEK, INCORPORATED, a Florida corporation ("Metretek Inc."),
and SOUTHERN FLOW COMPANIES, INC., a Delaware corporation ("Southern Flow")
(each, a "Borrower", and collectively, "Borrower" or "Borrowers"), and SIGMA VI,
INC., a Florida corporation ("Pledgor").
Recitals
A. Lender, Borrowers and Pledgor entered into a Loan and Security
Agreement dated April 14, 1998, as amended by an Amendment to Loan
and Security Agreement and Loan Documents dated as of June 8, 1999,
and as further amended by a Second Amendment to Loan and Security
Agreement and Loan Documents dated as of September 13, 1999, and as
further amended by a Third Amendment to Loan and Security Agreement
and Loan Documents dated as of December 16, 1999 (as amended, the
"Loan Agreement"), providing for the Metretek Loans and the Southern
Flow Loans, as more fully set forth in the Loan Agreement. Defined
terms used herein and not defined herein shall have the meaning set
forth in the Loan Agreement. On June 8, 1999, Metretek Technologies
changed its name from Xxxxxx Natural Gas Services, Inc. to Metretek
Technologies, Inc.
B. The Loans are secured by the Collateral.
C. The purpose of this Amendment is (a) for Lender to waive certain
defaults under the Loan Agreement and (b) for Borrower and Lender to
amend certain covenants and conditions in the Loan Agreement.
Agreement
IN CONSIDERATION of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender, Borrowers and
Pledgor agree as follows:
1. Waiver.
(a) Lender hereby waives the Event of Default which has occurred as a
result of the violation of Section 12(q)(iv) of the Loan Agreement (for the
period ending December 31, 1999 only).
(b) Lender hereby waives the Event of Default which has occurred as a
result of the violation of Section 12(q)(v) of the Loan Agreement (for the
period ending December 31, 1999 only).
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The above waivers do not constitute a waiver by Lender of Borrowers' compliance
with such covenants for any other period, or a waiver of any other Event of
Default or event that with notice, the passage of time, or both would constitute
an Event of Default under the Loan Agreement, or a waiver of any future
violations under Sections 12(q)(iv) and 12(d)(v). In addition, this waiver is
based solely on the interim financial statements for the period ended December
31, 1999, previously provided to Lender (the "Interim Financials"). If the
information set forth in the Interim Financials is inaccurate or incorrect in
any respect, Lender reserves the right to withdraw this waiver at any time.
2. Revision to Loan Agreement. The Loan Agreement is hereby amended as
follows:
a. Collections. Section 8 of the Loan Agreement is hereby amended by
adding the following clause to subsection 8(a):
Notwithstanding anything to the contrary in the foregoing, Metretek
and Southern Flow shall be entitled to withdraw funds from their
respective Blocked Account directly for deposit into their operating
account at any time that (i) there is no Event of Default or event
that with notice or the passage of time or both might constitute an
Event of Default, and (ii) the aggregate outstanding balance of the
Metretek Loans and the Southern Flow Loans plus the aggregate
undrawn face amount of the Letters of Credit is less than $500,000.
The ability of Metretek and Southern Flow to directly withdraw funds
from their respective Blocked Account is conditioned upon Lender
receiving confirmation from the depository bank holding each Blocked
Account with respect to such instructions. At such time as Lender
requests, Borrower shall provide such additional information and
take all actions necessary to cause the Blocked Account Agreement to
be reinstated.
b. Schedules and Reports. Section 9 of the Loan Agreement is hereby
amended and restated in its entirety to read as follows:
9. SCHEDULES AND REPORTS.
(a) Metretek and Southern Flow shall each deliver to
Lender on a monthly basis or more frequently as reasonably requested by Lender,
(1) a collateral report (the "Collateral Report") containing (A) an aging of
Accounts, and (B) a schedule of Inventory (identifying raw materials and
finished goods separately) owned by each of Metretek and Southern Flow and in
each of Metretek and Southern Flow's possession valued at FIFO cost, together
with information on all sales of or other reduction of and all additions to
Inventory, all returns of Inventory, all credits issued by each of Metretek and
Southern Flow and all complaints and claims against each of Metretek and
Southern Flow in connection with Inventory subsequent to the immediately
preceding Collateral Report, and (C) such additional information as Lender shall
require; (2) an aging of Metretek's and Southern Flow's accounts payable; (3) a
report calculating Metretek's and Southern Flow's Loan Availability as of the
date of the Collateral Report; and (4) such other reports or information as
Lender may reasonably require.
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(b) Each of Metretek and Southern Flow shall also
furnish copies of any other reports or information concerning Metretek's and
Southern Flows Accounts and Inventory included, described in or referred to in
the Collateral Reports, including, without limitation, but only if specifically
requested by Lender, copies of all invoices prepared in connection with
Accounts. Lender, through its officers, employees or agents, shall have the
right, at any time and from time to time in Lender's name, in the name of a
nominee of Lender or in either of Metretek and Southern Flow's name, to verify
the validity, amount or any other matter relating to any of the Accounts, by
mail, telephone, telegraph or otherwise. Borrowers shall reimburse Lender, on
demand, for all costs, fees and expenses incurred by Lender in this regard.
(c) All schedules, certificates, reports and assignments
and other items delivered by any Borrower to Lender hereunder shall be executed
by an authorized representative of such Borrower and shall be in such form and
contain such information as Lender shall specify.
c. Covenants. The Loan Agreement is hereby amended by amending
subsections (ii), (iv) and (v) of section 12(q) in their entirety, (Financial
Covenants) to read as follows:
12(q)(ii) Metretek Technologies' consolidated combined minimum tangible
net worth (as such term is defined in accordance with GAAP and including
(A) all subordinate debt which has been approved by Lender in its sole
discretion, and (B) Series B Preferred Stock (whether or not properly
includable under GAAP)) shall not be less than $17,000,000. Borrower's
compliance with this subsection (ii) shall be determined without regard to
any losses which Borrower may have incurred (whether in the current or
prior fiscal years) in connection with the Web Project up to a total
amount of $7,000,000, and such losses shall be disregarded in such
calculation.
12(q)(iv) Borrower, on a consolidated basis, shall maintain net profit
before taxes and before extraordinary gains (as such terms are defined in
accordance with GAAP) determined on a combined basis of at least $400,000
for each fiscal year. Borrower's compliance with the subsection (iv) shall
be determined without regard to any expenditures (net of any income
derived from the Web Project) which Borrower may have incurred during the
current fiscal year in connection with the Web Project (up to a total
amount of $7,000,000 for all expenditures, net of income, incurred by
Borrower in the current fiscal year and all prior fiscal years).
12(q)(v) The ratio of Borrower's consolidated earnings before interest,
taxes, depreciation, amortization and extraordinary gains to interest
expense (as such terms are defined in accordance with GAAP) and determined
on a combined basis shall not be less than 2.0 to 1.0 for each fiscal
year. Borrower's compliance with this subsection (v) shall be determined
without regard to any expenditures (net of any income derived from the Web
Project) which Borrower may have incurred during the current fiscal year
in connection with the Web Project (up to a total amount of $7,000,000 for
all expenditures, net of income, incurred by Borrower in the current
fiscal year and all prior fiscal years).
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3. Loan Documents.
a. Lender, Borrowers and Pledgor agree that any and all notes or other
documents executed in connection with the Loans (collectively, the
"Loan Documents") are hereby amended to reflect the amendments set
forth herein and that no further amendments to any Loan Documents
are required to reflect the foregoing.
b. All references in any document to the Loan Agreement or any other
Loan Document shall refer to the Loan Agreement or such Loan
Document as amended pursuant to this Amendment.
4. Fees and Expenses. Borrower shall pay or cause to be paid all of the
expenses incurred by the Lender in connection with the transactions contemplated
by this Amendment, including, without limitation, the reasonable fees and
disbursements of Lender's attorneys and their staff, and any recording and
filing fees, charges and expenses. If Borrower fails to pay such fees within 15
days after written request by Lender, such failure shall constitute an Event of
Default.
5. Representations and Warranties. Each Borrower and Pledgor hereby certifies
to the Lender that as of the date of this Amendment (taking into consideration
the transactions contemplated by this Amendment), all of such Borrower's or
Pledgor's representations and warranties contained in the Loan Agreement and all
Loan Documents are true, accurate and complete in all material respects, and no
Event of Default or event that with notice or the passage of time or both would
constitute an Event of Default (other than as waived by Lender pursuant to this
Amendment) has occurred under the Loan Agreement or any Loan Document. Without
limiting the generality of the foregoing, each Borrower and Pledgor represents
and warrants that the execution and delivery of this Amendment has been
authorized by all necessary action on the part of such Borrower or Pledgor, that
the person executing this Amendment on behalf of such Borrower is duly
authorized to do so and that this Amendment constitutes the legal, valid,
binding and enforceable obligation of such Borrower or Pledgor.
6. Additional Documents. Each Borrower and Pledgor shall execute and deliver
to Lender at any time and from time to time such additional amendments to the
Loan Agreement and the Loan Documents as the Lender may request to confirm and
carry out the transactions contemplated hereby or to confirm, correct and
clarify the security for the Loan.
7. Continuation of the Loan Agreement Etc. Except as specified in this
Amendment, the provisions of the Loan Agreement and the Loan Documents shall
remain in full force and effect, and if there is a conflict between the terms of
this Amendment and those of the Loan Agreement or the Loan Documents, the terms
of this Amendment shall control.
8. Miscellaneous.
a. This Amendment shall be governed by and construed under the laws of
the State of Colorado and shall be binding upon and inure to the
benefit of the parties hereto and their successors and permissible
assigns.
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b. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall
constitute one instrument.
c. This Amendment and all documents to be executed and delivered
hereunder may be delivered in the form of a facsimile copy,
subsequently confirmed by delivery of the originally executed
document.
d. This Amendment constitutes the entire agreement between Borrowers,
Pledgor and the Lender concerning the subject matter of this
Amendment. This Amendment may not be amended or modified orally, but
only by a written agreement executed by each Borrower and Pledgor
and the Lender and designated as an amendment or modification of the
Loan Agreement as amended by this Amendment.
REMAINDER OF PAGE INTENTIONALLY BLANK
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EXECUTED as of the date first set forth above.
BORROWERS:
METRETEK TECHNOLOGIES, INC., a
Delaware corporation (f/k/a Xxxxxx Natural
Gas Services, Inc.)
By: /s/ A. Xxxxxxx Xxxxxxx
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A. Xxxxxxx Xxxxxxx
Executive Vice President
METRETEK, INCORPORATED, a Florida
Corporation
By: /s/ A. Xxxxxxx Xxxxxxx
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A. Xxxxxxx Xxxxxxx
Executive Vice President
SOUTHERN FLOW COMPANIES, INC., a
Delaware corporation
By: /s/ A. Xxxxxxx Xxxxxxx
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A. Xxxxxxx Xxxxxxx
Executive Vice President
PLEDGOR:
SIGMA VI, INC., a Florida corporation
By: /s/ A. Xxxxxxx Xxxxxxx
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A. Xxxxxxx Xxxxxxx
Executive Vice President
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LENDER:
NATIONAL BANK OF CANADA, a
Canadian chartered bank
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Vice President
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
Vice President
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