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EXHIBIT 4.1
THIRD AMENDMENT
TO REVOLVING CREDIT AGREEMENT
and
WAIVER REGARDING DISPOSITION OF ASSETS HELD BY TEXOMA
TANK COMPANY, INC.
This THIRD AMENDMENT TO REVOLVING CREDIT AGREEMENT is made and entered
into as of March 26, 1999 (this "Amendment") by and among (a) ITEQ, INC., a
Delaware corporation (the "Borrower"), (b) THE GUARANTORS, (c) 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, "BKB"), and the other lending institutions which become parties to
the Credit Agreement defined below (together with BKB, the "Banks"), (d)
DEUTSCHE BANK AG, as documentation agent (the "Documentation Agent"), and (e)
BANKBOSTON, N.A., 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 that certain 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 wishes to cause substantially all of the assets
of Texoma Tank Company, Inc., a wholly-owned Subsidiary of the Borrower
("Texoma"), to be sold;
WHEREAS, the Borrower, the Guarantors, the Banks, the Documentation
Agent and the Agent have agreed to amend the Credit Agreement as hereinafter
set forth;
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:
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SECTION 1. AMENDMENTS AND WAIVERS UNDER THE CREDIT AGREEMENT.
SECTION 1.1 AMENDMENT TO SECTION 1.1 OF THE CREDIT AGREEMENT
The following new definitions are hereby added to Section 1.1 of the
Credit Agreement
"Texoma. Texoma Tank Company, Inc., a wholly-owned Subsidiary of the
Borrower."
"Texoma Asset Sale. The sale by Texoma of substantially all of
Texoma's assets pursuant to the Texoma Asset Purchase Agreement."
"Texoma Asset Purchase Agreement. The Asset Purchase Agreement, dated
as of March 26, 1999, pursuant to which Texoma sells to United Rentals (North
America), Inc. or one of its affiliates substantially all of Texoma's assets,
in form and substance reasonably satisfactory to the Agent."
SECTION 1.2 AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT.
The Total Commitment is hereby reduced pursuant to Section 2.2 of the
Credit Agreement to $135,000,000 and the dollar figure "$145,000,000" in the
first sentence of Section 2.1 of the Credit Agreement is hereby replaced with
the dollar figure "$135,000,000".
SECTION 1.3 WAIVER UNDER SECTION 7.4 OF THE CREDIT AGREEMENT.
Under Section 7.4 of the Credit Agreement the Borrower may not permit
any of its Subsidiaries to dispose of assets other than the sale of equipment
in the ordinary course of business. The Borrower has requested the Agent and
the Banks to consent to the sale by Texoma of substantially all of Texoma's
assets (the "Texoma Asset Sale"). The Banks and the Agent hereby consent to the
Texoma Asset Sale and the release of all liens and security interests held by
the Banks and the Agent on Texoma's assets that are sold pursuant to the Texoma
Asset Sale, and the Banks and the Agent hereby waive Section 7.4 of the Credit
Agreement to the extent that Section 7.4 prohibits the Texoma Asset Sale,
provided that the net cash proceeds received by the Borrower in consideration
for the Texoma Asset Sale are not less than $12,000,000, provided further that
such net cash proceeds be immediately applied to repay the Revolving Credit
Loans, provided further that no Default or Event of Default (other than any
Default or Event of Default that is expressly waived under this Section 1.3) is
occurring at the time of the Texoma Asset Sale or would occur as a result
thereof, and provided further that the Texoma Asset Sale takes place before
April 30, 1999.
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SECTION 1.4 AMENDMENT TO SECTION 7 OF THE CREDIT AGREEMENT.
The following new Section 7.10 is added to the Credit Agreement:
"SECTION 7.10 TEXOMA TANK COMPANY. The Borrower will not permit Texoma
to have any material assets after the effectiveness of the Texoma Asset Sale
unless the Agent, for the benefit of the Banks and the Agent, shall have a
first priority perfected security interest therein."
SECTION 1.5 AMENDMENT TO SECTION 8.1 OF THE CREDIT AGREEMENT.
Section 8.1 of the Credit Agreement is hereby replaced in its entirety
with the following new Section 8.1:
"SECTION 8.1 FUNDED DEBT TO CAPITALIZATION RATIO. The Borrower
shall not at any time before the application of the net proceeds from
the Texoma Asset Sale to the Revolving Credit Loans permit the ratio
of (a) Funded Debt to (b) the sum of Funded Debt plus Net Worth to
exceed 55%. The Borrower shall not at any time after the application
of the net proceeds of the Texoma Asset Sale to the Revolving Credit
Loans permit the ratio of (a) Funded Debt to (b) the sum of Funded
Debt plus Net Worth to exceed 54%."
SECTION 2. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date on which the following conditions shall have been
satisfied:
2.1 LOAN DOCUMENTS. Each of this Amendment and all related
documents shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and
shall be in form and substance reasonably satisfactory to the Agent.
2.2 CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by the Borrower and each
Guarantor of this Amendment, and each of the related documents to
which it is or is to become a party, shall have been duly and
effectively taken, and evidence thereof reasonably satisfactory to the
Agent shall have been provided to the Agent.
2.3 PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Amendment and all other
documents incident hereto shall be reasonably satisfactory in
substance and in form to the Banks and to the Agent.
2.4 CLOSING OF TEXOMA ASSET SALE. The Texoma Asset Purchase
Agreement shall have been executed and delivered by the parties
thereto and shall be in full force and effect in substantially the
same form delivered to the Agent prior to the effectiveness of this
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Amendment, such similarity to extend to terms governing the
obligations of Texoma thereunder and all other material terms.
SECTION 3. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:
(a) REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. Each
of the representations and warranties of the Borrower contained in the
Credit Agreement as amended hereby or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement as
amended 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
Amendment, no Default or Event of Default has occurred and is
continuing.
(b) AUTHORITY, NO CONFLICTS, ETC. The execution, delivery and
performance of this Amendment 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 Amendment 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.
SECTION 4. RATIFICATION, ETC. Except as expressly amended hereby, 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 Amendment and the Credit
Agreement shall hereafter be read and construed together as a single document,
and all references in the Credit Agreement, any other Loan Document or any
agreement or instrument related to the Credit Agreement shall hereafter refer
to the Credit Agreement as amended by this Amendment.
SECTION 5. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, which together shall constitute one instrument.
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SECTION 6. GOVERNING LAW. THIS AMENDMENT 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
an instrument under seal to be effective as of the date first above written.
THE BORROWER:
ITEQ, INC.
By: /s/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. XxXxxx
Chief Financial Officer
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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/k/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.)
XXXXXX MANUFACTURING CO., INC. (f/k/a XXXXXX HOLDING COMPANY, successor by
merger to XXXXXX TANK & MFG. CO., INC., XXXXXX TANK INTERNATIONAL, INC.,
XXXXXX POWER, INC., and XXXXXX TANK & VESSEL, INC.)
By: /s/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. XxXxxx
Chief Financial Officer
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THE LENDERS:
BANKBOSTON, N.A.,
individually and as Agent
By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, Director
DEUTSCHE BANK AG,
individually and as Documentation Agent
By: /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx
Title: Vice President
By: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: Vice President
BANK OF SCOTLAND
By: /s/ XXXXX XXXX TAT
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Name: Xxxxx Xxxx Tat
Title: Senior Vice President
BANK ONE, TEXAS, N.A.
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: Vice President
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XXXXXXX (x/x/x Xxxxxx Xxxxxxx)
By: /s/ XXXXX XXXXXXX
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Name: Xxxxx Xxxxxxx
Title: Vice President
By: /s/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
Title: Vice President
COMERICA BANK
By: /s/ XXXXXXXX X. XXXXXXXXX III
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Name: Xxxxxxxx X. Xxxxxxxxx III
Title: Vice President
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By: /s/ XXXXXXX XXXXXXX
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Name: Xxxxxxx Xxxxxxx
Title: Vice President & Manager
HIBERNIA NATIONAL BANK
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
Title: Portfolio Manager
NATIONSBANK, N.A. (successor by merger
to NationsBank of Texas, N.A.)
By: /s/ FOREST XXXXX XXXXXXXX
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Name: Forest Xxxxx Xxxxxxxx
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ A. XXXXX XXXXXXXXX
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Name: A. Xxxxx Xxxxxxxxx
Title: Vice President
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CHASE BANK TEXAS, NATIONAL ASSOCIATION
(f/k/a Texas Commerce Bank, N.A.)
By: /s/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: Senior Vice President & Credit Executive
