EXHIIBIT 4.4
SECOND AMENDMENT TO LOAN AGREEMENT
THIS SECOND AMENDMENT TO LOAN AGREEMENT (this "AMENDMENT") is made and
entered into as of April 21, 1999 by and among INNOVATIVE VALVE TECHNOLOGIES,
INC., a Delaware corporation (the "BORROWER"); each of the Lenders which is or
may from time to time become a party to the Loan Agreement (as defined below)
(individually, a "LENDER" and, collectively, the "LENDERS") and CHASE BANK OF
TEXAS, N. A., a national banking association (previously known as Texas Commerce
Bank National Association), acting as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "AGENT").
RECITALS
A. The Borrower, the Lenders and the Agent executed and delivered that
certain Loan Agreement dated as of July 7, 1998, as amended by instrument dated
as of March 21, 1999. Said Loan Agreement, as amended, supplemented and
restated, is herein called the "LOAN AGREEMENT". Any capitalized term used in
this Amendment and not otherwise defined shall have the meaning ascribed to it
in the Loan Agreement.
B. The Borrower, the Lenders and the Agent desire to amend the Loan
Agreement in certain respects.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein set forth, and further good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Lenders and the Agent do hereby agree as
follows:
SECTION 1. AMENDMENTS TO LOAN AGREEMENT.
(a) The definitions of "MAXIMUM REVOLVING LOAN AVAILABLE AMOUNT" and
"OVER/UNDER ADVANCE AMOUNT" set forth in SECTION 1.1 of the Loan Agreement are
hereby amended to read in their entireties as follows:
MAXIMUM REVOLVING LOAN AVAILABLE AMOUNT means, at any date, an
amount equal to the least of (i) the aggregate of the Revolving Loan
Commitments or (ii) the then effective Borrowing Base or (iii) for any
period, the amount set forth in the table below opposite such period (as
such amounts set forth in the table below may be adjusted from time to
time by the Majority Lenders):
PERIOD AMOUNT
4/21/99 through 5/20/99 $75,500,000
5/21/99 through 6/20/99 $76,500,000
6/21/99 through 7/20/99 $75,000,000
7/21/99 through 8/20/99 $74,000,000
8/21/99 through 9/20/99 $73,500,000
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9/21/99 through 10/20/99 $74,000,000
10/21/99 through 11/20/99 $74,500,000
11/21/99 through 12/20/99 $75,000,000
12/21/99 through 1/20/2000 $74,500,000
1/21/2000 through 2/20/2000 $73,000,000
2/21/2000 through 3/20/2000 $70,500,000
3/21/2000 through the Revolving Loan
Maturity Date $70,500,000
OVER/UNDER ADVANCE AMOUNT means, for any period, the amount set
forth in the table below opposite such period:
PERIOD OVER/UNDER ADVANCE AMOUNT
4/21/99 through 5/20/99 $1,500,000
5/21/99 through 6/20/99 $900,000
6/21/99 through 7/20/99 ($2,100,000)
7/21/99 through 8/20/99 ($300,000)
8/21/99 through 9/20/99 $500,000
9/21/99 through 10/20/99 $2,400,000
10/21/99 through 11/20/99 $1,300,000
11/21/99 through 12/20/99 $1,500,000
12/21/99 through 1/20/2000 $600,000
1/21/2000 through 2/20/2000 $2,000,000
2/21/2000 through 3/20/2000 $1,100,000
3/21/2000 through the Revolving Loan
Maturity Date $0
(b) SECTION 3.2(B)(2)(II) of the Loan Agreement is hereby amended to read
in its entirety as follows:
(ii) Borrower shall from time to time on demand by Agent
prepay the Loans (or provide Cover for Letter of Credit
Liabilities) in such amounts as shall be necessary so that on
each date set forth in the table below the ratio of (x) the
Primary Borrowing Base shown on the most recent Borrowing Base
Certificate delivered pursuant to SECTION 7.2 hereof to (y)
the unpaid principal balance of the Obligations as of such
date is equal to or greater than the percentage specified
opposite such date in the table below:
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DATE MINIMUM PERCENTAGE
4/30/99 51.00%
5/31/99 52.60%
6/30/99 55.80%
7/31/99 54.10%
8/31/99 52.50%
9/30/99 50.40%
10/31/99 52.00%
11/30/99 52.30%
12/31/99 53.30%
1/31/2000 51.70%
2/29/2000 51.30%
3/31/2000 51.30%
(c) SECTION 7.13 of the Loan Agreement is hereby amended to read in its
entirety as follows:
7.13 TURNAROUND CONSULTANT. Borrower shall retain a turnaround
consultant satisfactory to the Majority Lenders, under an acceptable scope
of work, such turnaround consultant to be retained by Borrower within
twenty-one (21) days after the Agent shall have approved the applicable
scope of work. The Agent and the Lenders will be provided access to all
consultant generated information and reports and the applicable consultant
shall report on a semi-monthly basis to Borrower, with a copy to the Agent
and each Lender.
(d) EXHIBIT J to the Loan Agreement (Borrowing Base Certificate) is hereby
amended to read in its entirety as set forth on EXHIBIT J hereto.
SECTION 2. APPROVAL OF PERSON TO PROVIDE VALUATIONS. Borrower has
nominated and Lenders hereby approve Xxxxxxx & Co. as the Person to perform the
valuations required under SECTION 7.2(S) of the Loan Agreement.
SECTION 3. RATIFICATION. Except as expressly amended by this Amendment,
the Loan Agreement and the other Loan Documents shall remain in full force and
effect. None of the rights, title and interests existing and to exist under the
Loan Agreement are hereby released, diminished or impaired, and the Borrower
hereby reaffirms all covenants, representations and warranties in the Loan
Agreement.
SECTION 4. EXPENSES. The Borrower shall pay to the Agent all reasonable
fees and expenses of Agent's legal counsel (pursuant to Section 11.3 of the Loan
Agreement) incurred in connection with the execution of this Amendment.
SECTION 5. CERTIFICATIONS. The Borrower hereby certifies that (a) no
material adverse change in the assets, liabilities, financial condition,
business or affairs of the Borrower has occurred since December 31, 1998 and (b)
except as previously disclosed to Agent and the Lenders in writing,
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no Default or Event of Default has occurred and is continuing or will occur as a
result of this Amendment.
SECTION 6. EFFECTIVENESS. The effectiveness of this Amendment is
contingent upon (a) execution and delivery to each of the Approving Lenders of
certain warrants and registration rights agreements.
SECTION 7. MISCELLANEOUS. This Amendment (a) shall be binding upon and
inure to the benefit of the Borrower, the Lenders and the Agent and their
respective successors, assigns, receivers and trustees; (b) may be modified or
amended only by a writing signed by the required parties; (c) shall be governed
by and construed in accordance with the laws of the State of Texas and the
United States of America; (d) may be executed in several counterparts by the
parties hereto on separate counterparts, and each counterpart, when so executed
and delivered, shall constitute an original agreement, and all such separate
counterparts shall constitute but one and the same agreement and (e) together
with the other Loan Documents, embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, consents and understandings relating to such subject matter.
The headings herein shall be accorded no significance in interpreting this
Amendment.
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SS.26.02
THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN
DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY
CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND 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.
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have caused
this Amendment to be signed by their respective duly authorized officers,
effective as of the date first above written.
INNOVATIVE VALVE TECHNOLOGIES, INC.,
a Delaware corporation
By:/s/XXXXXXX X. XXXXXXXXXX, XX.,
Xxxxxxx X. Xxxxxxxxxx, Xx.,
Vice President
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CHASE BANK OF TEXAS, N. A.,
as Agent and as a Lender
By:/s/ XXXXXX X. XXXXXXXX
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
6
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By:/s/ XXXXX XXXXXXX
Name: Xxxxx Xxxxxxx
Title: Vice President
7
NATIONSBANK, N.A., dba Bank of America,
National Association
By:/s/XXXX X. XXXXX
Name: Xxxx X. Xxxxx
Title: Vice President
8
COMERICA BANK-TEXAS
By:
Name:
Title:
0
XXXXXXXX XXXX XXXX XX XXXXXXXX
By:
Name:
Title:
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The undersigned hereby join in this Amendment to evidence their consent to
execution by Borrower of this Amendment, to confirm that each Loan Document now
or previously executed by the undersigned applies and shall continue to apply to
the Loan Agreement, as amended hereby, to acknowledge that without such consent
and confirmation, Lender would not execute this Amendment and to join in the
notice pursuant to Tex. Bus. & Comm. Code ss.26.02 set forth above.
EACH OF THE SUBSIDIARIES OF
INNOVATIVE VALVE TECHNOLOGIES,
INC.
By:/s/XXXXXXX X. XXXXXXXXXX, XX.,
Xxxxxxx X. Xxxxxxxxxx, Xx.,
Vice President
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BORROWING BASE CERTIFICATE
The undersigned hereby certifies that he is the _______________________ of
INNOVATIVE VALVE TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER"),
and that as such he is authorized to execute this Borrowing Base Certificate on
behalf of the Borrower pursuant to the Loan Agreement (as it may be amended,
supplemented or restated from time to time, the "AGREEMENT") dated as of July 7,
1998, by and among the Borrower, Chase Bank of Texas, National Association, as
Agent, and the Lenders therein named. The undersigned further certifies,
represents and warrants that to his knowledge, after due inquiry, that SCHEDULE
1 attached hereto has been duly completed and is true and correct in all
material respects.
Dated ________________, 199____.
____________________________________
[SIGNATURE OF AUTHORIZED OFFICER]
EXHIBIT J
Borrowing Base Certificate
Dated ________________
Gross Accounts Receivable ______________
Plus:
Costs in excess of billi______________ Less:
Over 90 days Old (_____________)
Foreign (_____________)
Total Eligible A/R ______________
Advance Rate 80%
A/R Borrowing Amount _____________
Gross Inventory ______________
Less:
Foreign (______________)
Costs in excess of
Xxxxxxxx (WIP) (______________)
Total Eligible Inventory _______________
Advance Rate 50%
Inventory Borrowing Amount ______________
Add or Subtract: Allowed Over/(under) Advance ______________
Add: Allowed Stationary Balance ______________
Total Borrowing Base ______________
Total Outstanding including L/C's (____________)
Availability/(required paydown) ______________
SCHEDULE 1
ALLOWED OVER OR ALLOWED REQUIRED OUTSTANDING MAXIMUM
BORROWING (UNDER) ADVANCE STATIONARY LOANS TO BB COVERAGE OBLIGATION
BASE DATE AMOUNTS BALANCE % AND "AS OF" DATE PERIOD AMOUNT
--------- ---------------- ------------- ---------------------- ---------------- -----------
1/31/99 $2.5MM $35,000,000 BEGINNING $71,000,000
2/28/99 $1.7MM $35,000,000 49.24% on 2/28/99 2/21/99 - 3/20/99 $73,800,000
3/31/99 $1.5MM $35,000,000 50.60% on 3/31/99 3/21/99 - 4/20/99 $74,000,000
4/30/99 $.9MM $35,000,000 51.00% on 4/30/99 4/21/99 - 5/20/99 $75,500,000
5/31/99 ($2.1MM) $35,000,000 52.60% on 5/31/99 5/21/99 - 6/20/99 $76,500,000
6/30/99 ($.3MM) $35,000,000 55.80% on 6/30/99 6/21/99 - 7/20/99 $75,000,000
7/31/99 $.5MM $34,000,000 54.10% on 7/31/99 7/21/99 - 8/20/99 $74,000,000
8/31/99 $2.4MM $34,000,000 52.50% on 8/31/99 8/21/99 - 9/20/99 $73,500,000
9/30/99 $1.3MM $34,000,000 50.40% on 9/30/99 9/21/99 - 10/20/99 $74,000,000
10/31/99 $1.5MM $34,000,000 52.00% on 10/31/99 10/21/99 - 11/20/99 $74,500,000
11/30/99 $.6MM $34,000,000 52.30% on 11/30/99 11/21/99 - 12/20/99 $75,000,000
12/31/99 $2.0MM $34,000,000 53.30% on 12/31/99 12/21/99 - 1/20/00 $74,500,000
1/31/00 $1.1MM $33,000,000 51.70% on 1/31/00 1/21/00 - 2/20/00 $73,000,000
2/28/00 ($0MM) $33,000,000 51.30% on 2/28/00 2/21/00 - 3/20/00 $70,500,000
3/31/00 ($0MM) $33,000,000 51.30% on 3/31/00 3/21/00 - 4/20/00 $70,500,000
* Calculated by using the current borrowing base as a percent of the total
outstanding credit facility at the end of the indicated month, (e.g. The March
31, 1999 number of 50.6% is calculated using the 2/28 borrowing base of $37,056
divided by the total outstandings including L/C's under the credit facility of
$73,227.)
SCHEDULE 1
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