Exhibit 10.1
FIFTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
AND WAIVER OF DEFAULTS
This Amendment, dated as of June 3, 2004, is made by and between
METRETEK, INCORPORATED, a Florida corporation (the "Borrower"), and XXXXX FARGO
BUSINESS CREDIT, INC., a Minnesota corporation (the "Lender").
RECITALS
The Borrower and the Lender are parties to a Credit and Security
Agreement dated as of September 6, 2002, as amended by (i) a First Amendment to
Credit and Security Agreement and Waiver of Defaults dated as of March 26, 2003;
(ii) a Second Amendment to Credit and Security Agreement dated as of September
24, 2003; (iii) a Third Amendment to Credit and Security Agreement dated as of
November 13, 2003; and (iv) a Fourth Amendment to Credit and Security Agreement
and Waiver of Defaults dated as of March 24, 2004 (as so amended, the "Credit
Agreement"). Capitalized terms used in these recitals have the meanings given to
them in the Credit Agreement unless otherwise specified.
The Borrower has requested that certain amendments be made to the
Credit Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:
1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined therein,
unless otherwise defined herein.
2. Section 6.2(a). Section 6.2(a) of the Credit Agreement is amended
and restated in its entirety to read as follows:
"(a) MINIMUM TANGIBLE NET WORTH. The Borrower will maintain,
during each period described below, its Tangible Net Worth, less (i)
software development and (ii) intercompany indebtedness owing from all
Corporate Guarantors to Borrower, determined as at the end of each
month, at an amount not less than the amount set forth opposite such
period (numbers appearing between "< >" are negative):
Period Minimum Tangible Net Worth
------------------ --------------------------
May 31, 2004 $650,000
June 30, 2004 $550,000
July 31, 2004 $500,000
August 31, 2004 $500,000
September 30, 2004 $500,000
October 31, 2004 $500,000
November 30, 2004 $500,000
December 31, 2004
and thereafter $500,000"
3. Section 6.2(b). Section 6.2(b) of the Credit Agreement is amended
and restated in its entirety to read as follows:
"(b) MINIMUM NET INCOME. The Borrower will achieve during each
period described below, its Net Income, of not less than the amount set
forth opposite such period (numbers appearing between "< >" are
negative):
Period Minimum Net Income
------------------ ------------------
May 31, 2004 <$800,000>
June 30, 2004 <$900,000>
July 31, 2004 <$950,000>
August 31, 2004 <$950,000>
September 30, 2004 <$950,000>
October 31, 2004 <$950,000>
November 30, 2004 <$950,000>
December 31, 2004 <$950,000>"
4. Exhibit B. Exhibit B of the Credit Agreement is amended and restated
in its entirety and replaced with Exhibit B attached hereto.
5. No Other Changes. Except as explicitly amended by this Amendment,
all of the terms and conditions of the Credit Agreement shall remain in full
force and effect and shall apply to any advance or letter of credit thereunder.
6. Waiver of Defaults. The Borrower is in default under Section 6.2(a)
Minimum Tangible Net Worth and Section 6.2(b) Minimum Net Income of the Credit
Agreement as of April 30, 2004 (collectively, the "Existing Defaults"). Upon the
terms and subject to the conditions set forth in this Amendment, the Lender
hereby waives the Existing Defaults. This waiver shall be effective only in this
specific instance and for the specific purpose for which it is given, and this
waiver shall not entitle the Borrower to any other or further waiver in any
similar or other circumstances.
7. Conditions Precedent. This Amendment, and the waiver set forth in
Paragraph 6 hereof, shall be effective when the Lender shall have received an
executed original hereof, together with each of the following, each in substance
and form acceptable to the Lender in its sole discretion:
(a) The Acknowledgment and Agreement of Guarantors and the
Acknowledgment and Agreement of Subordinated Creditor set forth at the
end of this Amendment, duly executed by each Guarantor and Subordinated
Creditor.
(b) Such other matters as the Lender may require.
8. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:
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(a) The Borrower has all requisite power and authority to
execute this Amendment and to perform all of its obligations hereunder, and this
Amendment has been duly executed and delivered by the Borrower and constitutes
the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms.
(b) The execution, delivery and performance by the Borrower of
this Amendment has been duly authorized by all necessary corporate action and
does not (i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule or regulation or of any
order, writ, injunction or decree presently in effect, having applicability to
the Borrower, or the articles of incorporation or by-laws of the Borrower, or
(iii) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrower is a party or by which it or its properties may be bound or affected.
(c) All of the representations and warranties contained in
Article V of the Credit Agreement are correct on and as of the date hereof as
though made on and as of such date, except to the extent that such
representations and warranties relate solely to an earlier date.
9. References. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.
10. No Other Waiver. Except as set forth in Paragraph 6 hereof, the
execution of this Amendment and acceptance of any documents related hereto shall
not be deemed to be a waiver of any Default or Event of Default under the Credit
Agreement or breach, default or event of default under any Security Document or
other document held by the Lender, whether or not known to the Lender and
whether or not existing on the date of this Amendment.
11. Release. The Borrower, and each Guarantor by signing the
Acknowledgment and Agreement of Guarantors set forth below, and the Subordinated
Creditor by signing the Acknowledgment and Agreement of Subordinated Creditor
set forth below, each hereby absolutely and unconditionally releases and forever
discharges the Lender, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or
federal law or otherwise, which the Borrower or such Guarantor or such
Subordinated Creditor has had, now has or has made claim to have against any
such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.
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12. Costs and Expenses. The Borrower hereby reaffirms its agreement
under the Credit Agreement to pay or reimburse the Lender on demand for all
costs and expenses incurred by the Lender in connection with the Loan Documents,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. The Borrower
hereby agrees that the Lender may, at any time or from time to time in its sole
discretion and without further authorization by the Borrower, make a loan to the
Borrower under the Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.
13. Miscellaneous. This Amendment and the Acknowledgment and Agreement
of Guarantors and the Acknowledgment and Agreement of Subordinated Creditor may
be executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original and all of which counterparts, taken
together, shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
XXXXX FARGO BUSINESS CREDIT, INC. METRETEK, INCORPORATED
By: /s/ Xxxxx Xxxxxxx By: /s/ A. Xxxxxxx Xxxxxxx
-------------------------------- --------------------------------
Name: Xxxxx Xxxxxxx Name: A. Xxxxxxx Xxxxxxx
Its: Commercial Banking Officer Its: Chief Financial Officer
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Exhibit B to Credit and Security Agreement
COMPLIANCE CERTIFICATE
To: Xxxxx Fargo Business Credit, Inc.
Date: __________________, 200___
Subject: Financial Statements
In accordance with our Credit and Security Agreement dated as of
September 6, 2002, as amended by (i) a First Amendment to Credit and Security
Agreement and Waiver of Defaults dated as of March 26, 2003; (ii) a Second
Amendment to Credit and Security Agreement dated as of September 24, 2003; (iii)
a Third Amendment to Credit and Security Agreement dated as of November 13,
2003; (iv) a Fourth Amendment to Credit and Security Agreement and Waiver of
Defaults dated as of March 24, 2004; and (iv) a Fifth Amendment to Credit and
Security Agreement and Waiver of Defaults dated as of June 3, 2004 (as so
amended, the "Credit Agreement"), attached are the financial statements of
Metretek, Incorporated (the "Borrower") as of and for ________________, 200__
(the "Reporting Date") and the year-to-date period then ended (the "Current
Financials"). All terms used in this certificate have the meanings given in the
Credit Agreement.
I certify that the Current Financials have been prepared in accordance
with GAAP, subject to year-end audit adjustments, and fairly present the
Borrower's financial condition as of the date thereof.
Events of Default. (Check one):
[ ] The undersigned does not have knowledge of the occurrence of a
Default or Event of Default under the Credit Agreement except
as previously reported in writing to the Lender.
[ ] The undersigned has knowledge of the occurrence of a Default
or Event of Default under the Credit Agreement not previously
reported in writing to the Lender and attached hereto is a
statement of the facts with respect to thereto. The Borrower
acknowledges that pursuant to Section 2.8(c) of the Credit
Agreement, the Lender may impose the Default Rate at any time
during the resulting Default Period.
Financial Covenants. I further hereby certify as follows:
1. MINIMUM TANGIBLE NET WORTH. Pursuant to Section 6.2(a) of the Credit
Agreement, as of the Reporting Date the Borrower's Tangible Net Worth, less (a)
software development and (b) intercompany indebtedness owing from all Corporate
Guarantors to Borrower, was $____________ which[ ] satisfies[ ] does not satisfy
the requirement that such
amount be not less than $_____________ on the Reporting Date as set forth in the
table below (numbers appearing between "< >" are negative):
Period Minimum Tangible Net Worth
-------------------------------- --------------------------
May 31, 2004 $650,000
June 30, 2004 $550,000
July 31, 2004 $500,000
August 31, 2004 $500,000
September 30, 2004 $500,000
October 31, 2004 $500,000
November 30, 2004 $500,000
December 31, 2004 and thereafter $500,000
2. MINIMUM NET INCOME. Pursuant to Section 6.2(b) of the Credit
Agreement, the Borrower's Net Income for the ________ period ending on the
Reporting Date, was $____________, which[ ] satisfies[ ] does not satisfy the
requirement that such amount be not less than $_____________ during such period
as set forth in the table below (numbers appearing between "< >" are negative):
Period Minimum Net Income
------------------ ------------------
May 31, 2004 <$800,000>
June 30, 2004 <$900,000>
July 31, 2004 <$950,000>
August 31, 2004 <$950,000>
September 30, 2004 <$950,000>
October 31, 2004 <$950,000>
November 30, 2004 <$950,000>
December 31, 2004 <$950,000>
3. CAPITAL EXPENDITURES. Pursuant to Section 6.2(c) of the Credit
Agreement, for the year-to-date period ending on the Reporting Date, the
Borrower has expended or contracted to expend during the fiscal year ended
December 31, 2004, for Capital Expenditures, $__________________ in the
aggregate, which [ ] satisfies [ ] does not satisfy the requirement that such
expenditures not exceed $700,000 in the aggregate during such year.
4. SALARIES. As of the Reporting Date, the Borrower [ ] is [ ] is not
in compliance with Section 6.8 of the Credit Agreement concerning salaries.
5. ADVANCES TO CORPORATE GUARANTORS. Pursuant to Section 6.27 of the
Credit Agreement, for the year-to-date period ending on the Reporting Date, the
Borrower has advanced to Corporate Guarantors or has repaid Corporate Guarantors
on existing advances, during the fiscal year ended December 31, 2004,
$_________________ in the aggregate, which [ ] satisfies [ ] does not satisfy
the requirement that such advances not exceed $400,000 in the aggregate during
such year.
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Attached hereto are all relevant facts in reasonable detail to
evidence, and the computations of the financial covenants referred to above.
These computations were made in accordance with GAAP.
By:_________________________________
Its Chief Financial Officer
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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS
The undersigned, each a guarantor of the indebtedness of Metretek,
Incorporated (the "Borrower") to Xxxxx Fargo Business Credit, Inc. (the
"Lender") pursuant to a separate Guaranty dated as of September 6, 2002 (the
"Guaranty"), each hereby (i) acknowledges receipt of the foregoing Amendment;
(ii) consents to the terms (including without limitation the release set forth
in Paragraph 11 of the Amendment) and execution thereof; (iii) reaffirms its
obligations to the Lender pursuant to the terms of its Guaranty; and (iv)
acknowledges that the Lender may amend, restate, extend, renew or otherwise
modify the Credit Agreement and any indebtedness or agreement of the Borrower,
or enter into any agreement or extend additional or other credit accommodations,
without notifying or obtaining the consent of the undersigned and without
impairing the liability of the undersigned under its Guaranty for all of the
Borrower's present and future indebtedness to the Lender.
METRETEK CONTRACT MANUFACTURING METRETEK TECHNOLOGIES, INC.
COMPANY, INC.
By: /s/ A. Xxxxxxx Xxxxxxx By: /s/ A. Xxxxxxx Xxxxxxx
------------------------------- ----------------------------------
Name: A. Xxxxxxx Xxxxxxx Name: A. Xxxxxxx Xxxxxxx
Its: Chief Financial Officer Its: Executive Vice President
POWERSECURE, INC. SOUTHERN FLOW COMPANIES, INC.
By: /s/ A. Xxxxxxx Xxxxxxx By: /s/ A. Xxxxxxx Xxxxxxx
------------------------------- ----------------------------------
Name: A. Xxxxxxx Xxxxxxx Name: A. Xxxxxxx Xxxxxxx
Its: Chief Financial Officer Its: Chief Financial Officer
ACKNOWLEDGMENT AND AGREEMENT OF SUBORDINATED CREDITOR
The undersigned, a subordinated creditor of Metretek, Incorporated (the
"Borrower") to Xxxxx Fargo Business Credit, Inc. (the "Lender") pursuant to a
Subordination Agreement dated as of September 6, 2002 (the "Subordination
Agreement"), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
consents to the terms (including without limitation the release set forth in
Paragraph 11 of the Amendment) and execution thereof; (iii) reaffirms its
obligations to the Lender pursuant to the terms of its Subordination Agreement;
and (iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Loan Documents and any indebtedness or agreement of the
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the obligations of the undersigned under its Subordination
Agreement.
METRETEK TECHNOLOGIES, INC.
By: /s/ A. Xxxxxxx Xxxxxxx
---------------------------------
Name: A. Xxxxxxx Xxxxxxx
Its: Executive Vice President
