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EXHIBIT 10.1
SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
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AND LOAN DOCUMENTS
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THIS SIXTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS
(this "Amendment"), dated as of May 31, 2001 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
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A. Lender, Borrowers and Pledgor entered into a Loan and Security
Agreement dated April 14, 1998 (the "Original Loan Agreement"), as
amended by an Amendment to Loan and Security Agreement and Loan
Documents dated as of June 8, 1999 (the "First Amendment"), and as
further amended by a Second Amendment to Loan and Security Agreement
and Loan Documents dated as of September 13, 1999 (the "Second
Amendment"), and as further amended by a Third Amendment to Loan and
Security Agreement and Loan Documents dated as of December 16, 1999
(the "Third Amendment"), and as further amended by a Fourth Amendment
to Loan and Security Agreement and Loan Documents, dated as of March
22, 2000 (the "Fourth Amendment"), and as further amended by a Fifth
Amendment to Loan and Security Agreement and Loan Documents, dated as
of March 1, 2001 (the "Fifth Amendment" and together with this
Amendment, the First Amendment, the Second Amendment, the Third
Amendment and the Fourth Amendment, the "Loan Agreement") providing for
the Metretek Loans and the Southern Flow Loans, as more fully set forth
in the Loan Agreement.
B. On June 8, 1999, Metretek Technologies changed its name from Xxxxxx
Natural Gas Services, Inc. to Metretek Technologies, Inc.
C. Pursuant to Section 1(q) of the Loan Agreement, the Maturity Date of
the Loan was May 31, 2001 and as of the date hereof, Borrowers have
failed to pay the Loan in full.
D. Borrowers and Lender therefore wish to enter into this Amendment (a) to
extend the Maturity Date; (b) to set forth Borrowers' Refinancing
Commitment; (c) to reduce the maximum available amount of the Loan; (d)
to change certain fees under the Loan Agreement; and (e) to change
certain covenants and conditions in the Loan Agreement.
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AGREEMENT
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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 (capitalized terms used herein
and not defined herein shall have the meanings set forth in the Loan Agreement):
1. AMENDMENTS TO LOAN AGREEMENT.
(a) Section 1, paragraph (q) is hereby revised to read in its
entirety as follows:
""Maturity Date" shall mean the earliest to occur of (i)
September 30, 2001; (ii) the occurrence of any other default or Event of Default
hereunder or under any Other Agreement, (iii) the failure of Borrowers to
perform any obligation required pursuant to the Refinancing Commitment when
required or any other breach by Borrowers of this Agreement (iv) any event that,
with notice or the passage of time or both, would constitute an Event of Default
hereunder or any Other Agreement or (v) a default in Borrowers' obligation to
pay all interest on the Loan as such interest accrues and becomes payable
thereunder, together with all other amounts payable under the documents
evidencing, governing and securing Borrowers' indebtedness to the Lender. Upon
the Maturity Date, the Lender may take any and all action permitted by the
documents evidencing, governing and securing the Loan or by law that the Lender
deems necessary or appropriate to collect such indebtedness and to enforce its
rights under all instruments securing the indebtedness."
(b) Section 1 is hereby amended to add new paragraph (dd) as
follows:
"(dd) "Refinancing Commitment" shall mean Borrowers' agreement
to perform, observe and comply with the following obligations and requirements:
(i) On or prior to June 22, 2001, Borrowers will
deliver to Lender Borrowers' management action plan for refinancing the senior
credit facilities.
(ii) Borrowers shall have received on or before July
27, 2001, proposals, from prospective refinancing sources, for refinancing the
Loan, and shall have provided to Lender on or before that date, in form and
substance satisfactory to Lender, evidence of receipt of such proposals.
(iii) On or before September 14, 2001, Borrowers
shall have received a commitment for refinancing the Loan and shall have
provided to Lender on or before that date, in form and substance satisfactory to
Lender, evidence of receipt of a commitment to refinance the Loan."
(c) Without in any way limiting the rights of the Lender hereunder or
the sole discretion of Lender to elect whether or not to make advances,
Borrowers acknowledge and agree that, effective May 31, 2001, the maximum
available amount of the Loan shall be reduced from $5,000,000 to $3,000,000,
minus the aggregate undrawn amount of the Letters of Credit, and Section 2(a) of
the Loan Agreement is revised effective as of May 31, 2001 by replacing the
phrase "Five Million Dollars ($5,000,000)" with the phrase "Three Million
Dollars ($3,000,000)."
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(d) The rate of interest that Borrowers shall pay to Lender on the
outstanding principal amount of the Loan monthly in arrears, shall increase to
two percent (2.00%) per annum plus the Reference Rate, and Section 3(a) of the
Loan Agreement is revised effective May 31, 2001, by replacing the phrase "one
percent (1.00%)" with the phrase "two percent (2.00%)."
(e) The unused fee is increased to five-tenths of one percent (0.5%),
and Section 3(b) of the Loan Agreement is revised effective May 31, 2001, by
replacing the words "three-eighths of one percent (0.375%)" with the words
"five-tenths of one percent (0.5%)."
(f) Section 12(q)(ii) of the Loan Agreement is revised to read in its
entirety as follows:
"12(q)(ii) Borrowers' 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 be not less than $5,387,000 plus
95% of any new subordinated debt, sale of preferred stock or additional
equity."
(g) Section 12(q)(iv) of the Loan Agreement is revised to read in its
entirety as follows:
"12 (q)(iv) Borrowers, on a combined, consolidated basis,
calculated commencing April 1 2001, and each month thereafter, shall
maintain net profit before taxes, preferred stock dividends,
depreciation, amortization, extraordinary gains and income from
cancellation of debt in amount greater than zero dollars."
2. WAIVER. The required ratio of 2.00 to 1.00 set forth as a financial covenant
of Section 12(q)(v) of the Loan Agreement is waived for the period ending March
31, 2001. Thereafter, Borrowers shall be required to comply with said covenant
on a year to date basis, excluding the period ending March 31, 2001.
The above waiver does not constitute a waiver by Lender of Borrowers'
compliance with such covenant for any other period, other than the period
specifically identified herein, nor shall such waiver constitute 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 Section 12(q)(v). In addition, this waiver is based
solely on the interim financial statements for the period ended March 31, 2001,
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.
3. ADVANCES UNDER THE LOAN. From the date hereof until the Maturity Date,
Borrowers and Pledgor acknowledge and agree that the Lender has no obligation
whatsoever to advance any funds to Borrowers in connection with the Loan.
Borrowers and Pledgor understand and agree that Lender may, in Lender's sole and
absolute discretion, discontinue the advancing of funds under Section 4 of the
Loan Agreement at any time and for any reason or no reason. Lender's advancing
funds from and after the date hereof shall not act as a waiver of Lender's right
to discontinue making advances at any time for any reason whatsoever.
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4. WAIVER OF RIGHTS OF NOTICE AND CURE. In consideration of Lender entering into
this Amendment, Borrower hereby waives all rights it has, if any, under the Loan
Agreement or the Loan Documents (i) to receive notice of an Event of Default and
(ii) to cure defaults and Events of Default under the Loan Agreement.
5. REFINANCING COMMITMENT OF THE BORROWER: In consideration of Lender entering
into this Amendment, Borrowers agree to perform, observe and comply with the
Refinancing Commitment.
6. RELEASE AND DISCHARGE. In consideration of Lender's entering into this
Amendment, Borrowers and Pledgor, together with their successors and assigns,
and all persons claiming by, through or under Borrowers or Pledgor, do hereby
fully and forever release and discharge Lender, its affiliates, successors, all
past and present employees, officers, directors, agents, insurers and assigns
from any and all claims, demands, obligations, actions, liabilities, losses,
costs, expenses and damages of every kind and nature whatsoever, including,
without limitation, attorneys' fees, in law or in equity, whether known or
unknown, which the Lender or any person acting under them may now have, or claim
at any future time to have, based in whole or in part upon any act or omission
to the date hereof, without regard to present, actual knowledge of acts or
omissions, arising from or based upon or in any way related to the Loan or the
making or administration of the Loan.
7. 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.
8. FEES AND EXPENSES. Borrower shall pay or cause to be paid to Lender upon
execution hereof an Amendment fee in the amount of $6,500. Borrower shall also
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, such failure shall constitute an Event of
Default.
9. REPRESENTATIONS AND WARRANTIES. Each Borrower and Pledgor hereby certifies,
represents and warrants to the Lender that as of the date of this Amendment
(taking into consideration the transactions contemplated by this Amendment):
(a) 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;
(b) 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;
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(c) Neither Borrowers nor Pledgor have received notice of and are not
aware of any complaint, investigation, review or audit by the United States
government, or any department, agency or instrumentality thereof other than as
set forth in the Notice of Suspension; and
(d) Without limiting the generality of the foregoing, 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.
10. 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.
11. 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. Except for the matters specifically set forth
herein, this Amendment does not alter, amend, modify or release any right of the
Lender or any obligations of Borrowers or Pledgor in connection with the Loan.
By execution of this Amendment, the Lender is not waiving any principal,
interest, costs or attorneys' fees or any other amounts payable under the
documents governing, evidencing or securing the Loan and is not waiving any
other defaults under the Loan Agreement or any Other Agreement.
12. 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.
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.
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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
