EXHIBIT 4.1
LIMITED WAIVER
TO
REVOLVING CREDIT AGREEMENT
This LIMITED WAIVER TO CREDIT AGREEMENT is made and entered into as of
February 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:
SS.1. DEFINITIONS. As used in this Waiver, the following terms have the
meanings set forth below:
AMEREX. Amerex Industries, Inc., a Delaware corporation.
AMEREX ASSETS. The assets of Amerex to be sold.
AMEREX SALE. The sale by the Borrower or one or more of its Subsidiaries
of the Amerex Assets.
XXXXXXXX. Xxxxxxxx Xxxxx Xxxxxx & Xxxxx LLP.
XXXXXXXX ENGAGEMENT LETTER. The letter agreement dated May 3, 2000,
between the Borrower and Xxxxxxxx, as modified by the addendum letter dated June
14, 2000, between the Borrower and Xxxxxxxx,
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and without giving effect to any further amendments thereto unless approved by
the Agent and the Majority Banks.
NET CASH PROCEEDS. For the Amerex Sale, the gross cash proceeds of the
Amerex Sale MINUS, the sum of (a) the amount of the transaction fee payable by
the Borrower to Xxxxxxxx under the Xxxxxxxx Engagement Letter for the Amerex
Sale, and (b) the reasonable amount of any other fees and expenses charged to
the Borrower and constituting the direct transaction costs of the Amerex Sale.
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.
REQUISITE BANKS. For the purposes ofss.ss.2 and 4, the Requisite Banks are
the Majority Banks. For purposes ofss.3, the Requisite Banks are all of the
Banks.
SS.2. LIMITED SUSPENSION OF CERTAIN FINANCIAL COVENANTS.
(a) Subject to the satisfaction of the conditions precedent set forth in
ss.5 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 February 15, 2001 until 5
p.m., Boston time, on March 15, 2001 (or such earlier date as this Waiver may
expire pursuant to ss.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 Xxxxx 00, 0000,
(xx) 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.
(b) At the earliest of (i) 5:00 p.m., Boston time, on Xxxxx 00, 0000, (xx)
any condition set forth in ss.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 March 15, 2001), and (iv) the Agent, at any time on
or after March 5, 2001, giving written notice to the Borrower and
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the Guarantors of the termination of the suspension of the Borrower's
obligations to comply with the Specified Covenants, the provisions of ss.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 ss.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 Event of Default under the Credit
Agreement other than, during the limited period described in ss.2(a), with
respect to the Specified Covenants.
SS.3. LIMITED WAIVER REGARDING SALES OF CERTAIN ASSETS.
(a) The Banks and the Agent hereby consent to the Amerex Sale, to the
release by the Agent of the Agent's security interest in the Amerex Assets
applicable to the Amerex Sale, PROVIDED that, for the Amerex Sale, each of the
following conditions are met:
(i) 100% of the Net Cash Proceeds of the Amerex Sale, if not paid
directly to the Agent by the buyer, shall, upon receipt by the Borrower or
any Subsidiary of such Net Cash Proceeds, be forthwith paid to the Agent
for application to the Obligations;
(ii) the gross cash proceeds of the Amerex Sale shall be no less
than $2,850,000 for the Amerex Sale and the Net Cash Proceeds shall be no
less than $2,285,000;
(iii) the Agent is released (or other arrangements completely
satisfactory to the Agent are made by which the Banks are released from
their participations therein) from any Letter of Credit issued for the
benefit of Amerex and the then Letter of Credit Commitment shall be
permanently and automatically reduced pursuant to ss.3.1(d) of the Credit
Agreement, such reduction to be effective at the time of such release;
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(iv) each of the then Total Commitment and the then Revolver
Commitment (and if applicable, the then Letter of Credit Commitment),
shall be permanently and automatically reduced pursuant to ss.2.12 of the
Credit Agreement, such reduction to be effective at the time at which such
Net Cash Proceeds are first received by the Borrower or any Subsidiary (or
by the Agent on its or their behalf);
(v) the Agent's security interest under the Security Documents shall
attach, on a first perfected basis, to any non-cash proceeds of the Amerex
Sale, the Borrower hereby agreeing to, and to cause any applicable
Subsidiary to:
(A) deliver any such non-cash proceeds consisting of
instruments or investment property, together with indorsements and
stock powers executed in blank, to the Agent to hold as Collateral
under the Security Documents,
(B) permit the Agent to notify any escrow agent of the Agent's
security interest, for the benefit of the Banks and the Agent, in
any Escrow Funds (as defined in the Eighth Amendment), and cause the
escrow agent to agree, at the time of the establishment of the
escrow, using irrevocable instructions satisfactory to the Agent, to
deliver the Escrow Funds, to the Agent, without further consent of
the Borrower or such Subsidiary, for application to the Obligations,
to such extent and at such time as delivery would otherwise be
available to the Borrower or such Subsidiary under the terms of the
escrow; and
(C) take any other action as may be necessary or, in the
opinion of the Agent, advisable for the Agent to perfect and to
maintain its perfection and priority of such security interest,
(vi) the Agent and its counsel shall have reviewed and shall be
reasonably satisfied with the terms and conditions of the purchase and
sale agreement for the Amerex Sale, any escrow arrangements, and all
related documents as well as the identity of the buyer thereunder to the
extent not previously disclosed to the Banks and the Agent; and
(vii) unless otherwise waived in writing by the Majority Banks,
after otherwise giving effect to this Waiver, no Default or Event of
Default shall have occurred and shall be continuing at the time of
completion of the Amerex Sale or would occur as a result thereof.
(b) Upon satisfaction of the conditions set forth in ss.3(a) for the
Amerex Sale, the Agent is instructed by the Banks to provide such Uniform
Commercial Code or other releases and confirmations of releases of the
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Agent's security interest in the Amerex Assets sold under the Amerex Sale. The
Agent shall be entitled to assume that any factual condition set forth in
ss.3(a), not evident from the Agent's own books and records, has been met unless
the officers of the Agent active upon the Borrower's account have actual
knowledge that such condition has not been met.
(c) Solely with respect to provisions concerning the Amerex Sale, the
provisions of this ss.3 supersede ss.3 of the Limited Waiver dated as of
December 28, 2000 entered into by the Borrower, the Guarantors, the Banks and
the Agent.
SS.4. LIMITED SUSPENSION OF CLOSING FEE. Subject to the satisfaction of
the conditions precedent set forth in ss.5 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 February 15, 2001 until 5
p.m., Boston time, on March 15, 2001; PROVIDED, that each of the conditions set
forth in ss.2(a) are satisfied throughout such period.
SS.5. CONDITIONS TO EFFECTIVENESS. This Waiver shall not become effective
unless on or prior to 5:00 p.m., Boston time, on February 15, 2001:
(a) this Waiver shall have been executed and delivered by the Borrower,
the Guarantors, the Requisite 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.
SS.6. REPRESENTATIONS AND WARRANTIES.
SS.6.1. 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.
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SS.6.2. 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 any
judgment, order, writ, injunction, license or permit applicable to the Borrower
or Guarantors so as to materially adversely affect the assets, business or any
activity of the Borrower or Guarantors, and (iv) do not conflict with any
provision of the corporate charter or bylaws of the Borrower or 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 Guarantors enforceable against each in accordance with the
respective terms and provisions hereof.
SS.6.3. 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.
SS.7. 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.
SS.8. 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
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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.
SS.9. COUNTERPARTS. This Waiver may be executed in any number of
counterparts, which together shall constitute one instrument.
SS.10. 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:/S/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: President and CEO
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.
AMEREX INDUSTRIES, 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: /S/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: President
THE LENDERS:
FLEET NATIONAL BANK,
(f/k/a BankBoston, N.A.)
individually and as Agent
By: /S/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: Vice President
DEUTSCHE BANK AG,
individually and as Documentation Agent
By: /S/ XXXX XXXXX
Name: Xxxx Xxxxx
Title: Managing Director
By: /S/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Associate
BANK OF SCOTLAND
By: /S/ XXXXXX XXXXXX
Name: Xxxxxx Xxxxxx
Title: Vice President
BANK ONE, TEXAS, N.A.
By: /S/ C. XXXXXX XXXXXX
Name: C. Xxxxxx Xxxxxx
Title: First Vice President
BNP XXXXXXX (x/x/x Xxxxxxx f/k/a Banque Paribas)
By: /S/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
By: /S/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: Vice President
COMERICA BANK
By: /S/ XXXXX XXXXXX
Name: Xxxxx Xxxxxx
Title: Senior Vice President
THE FUJI BANK, LIMITED
By: /S/ XXXX XXXXXX
Name: Yugi Tanaka
Title: Vice President & Manager
HIBERNIA NATIONAL BANK
By: /S/ XXXXX XXXXXXXX
Name: Xxxxx Xxxxxxxx
Title: Vice President
BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.)
By: /S/ XXXXXXX X. XXXXX
Name: Xxxxxxx X. Xxxxx
Title: Principal
UNION BANK OF CALIFORNIA, N.A.
By: /S/ XXXX XXXXXXX
Name: Xxxx Xxxxxxx
Title: Vice President
CHASE MANHATTAN BANK
(f/k/a Chase Bank of Texas, N.A. f/k/a Texas Commerce Bank, N.A.)
By: /S/ XXXXX X. SHILCUTT
Name: Xxxxx X. Shilcutt
Title: Vice President
