EXHIBIT 10.1
SIXTH AMENDMENT TO CREDIT AND SECURITY AGREEMENT
AND WAIVER OF DEFAULTS
This Amendment, dated as of December 8, 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; (iv) a Fourth Amendment to Credit and Security Agreement and
Waiver of Defaults dated as of March 24, 2004; and (v) a Fifth Amendment to
Credit and Security Agreement and Waiver of Defaults dated as of June 3, 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. In addition, Section 1.1 of the Credit
Agreement is amended by adding or amending, as the case may be, the following
definitions:
"Maximum Line" means $3,260,000 unless said amount is reduced pursuant to
Section 2.12, in which event it means such lower amount.
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
------ --------------------------
December 31, 2004 $280,000
January 31, 2005 $280,000
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February 28, 2005 $280,000
March 31, 2005 $286,000
April 30, 2005 $286,000
May 31, 2005 $286,000
June 30, 2005 $292,000
July 31, 2005 $292,000
August 31, 2005 $306,000
September 30, 2005 $306,000
October 31, 2005 $306,000
November 30, 2005 $306,000
December 31, 2005 and thereafter $306,000 "
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
------ ------------------
Twelve months ended December 31, 2004 <$5,250,000>
Three months ended March 31, 2005 $ 22,000
Six months ended June 30, 2005 $ 45,000
Nine months ended September 30, 2005 $ 102,000
Twelve months ended December 31, 2005 $ 212,000 "
4. Section 6.2(c). Section 6.2(c) of the Credit Agreement is amended and
restated in its entirety to read as follows:
"(c) CAPITAL EXPENDITURES. The Borrower will not incur or contract
to incur Capital Expenditures of more than $50,000 in the aggregate during the
fiscal year ending December 31, 2005."
5. Section 6.27. Section 6.27 of the Credit Agreement is amended and
restated in its entirety to read as follows:
"Section 6.27 Advances to Corporate Guarantors. The Borrower will
not make any advances to any Corporate Guarantor. Repayments to Corporate
Guarantors on existing advances (including, without limitation, payments on
subordinated debt or subordinated debt converted into equity) shall not exceed
75% of fiscal year-to-date Net Income. Repayments to Corporate Guarantors on
existing advances shall not be made if the Borrower is in default of any
financial covenant, or if such repayment would result in a default of any
financial covenant."
6. Exhibit A. Exhibit A of the Credit Agreement is amended and restated in
its entirety and replaced with Exhibit A attached hereto.
7. Exhibit B. Exhibit B of the Credit Agreement is amended and restated in
its entirety and replaced with Exhibit B attached hereto.
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8. 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.
9. 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 November 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.
10. Accommodation Fee. The Borrower shall pay the Lender, upon demand by
the Lender, a fully earned, non-refundable fee in the amount of $2,000 in
consideration of the Lender's execution and delivery of this Amendment.
11. Conditions Precedent. This Amendment, and the waiver set forth in
Paragraph 9 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 Revolving Note, properly executed by the Borrower.
(b) 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.
(c) Such other matters as the Lender may require.
12. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:
(a) The Borrower has all requisite power and authority to execute
this Amendment and the Revolving Note and to perform all of its obligations
thereunder, and this Amendment and the Revolving Note have been duly executed
and delivered by the Borrower and constitute the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their terms.
(b) The execution, delivery and performance by the Borrower of this
Amendment and the Revolving Note 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.
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(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.
13. 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.
14. No Other Waiver. Except as set forth in Paragraph 9 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.
15. 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.
16. 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 and the fee
required under Paragraph 10 hereof.
17. 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.
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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/ Xxxx X. Xxxxxxxxxx
--------------------------- ----------------------------
Name: Xxxxx Xxxxxxx Name: Xxxx X. Xxxxxxxxxx
Its: Commercial Banking Officer Its: Secretary
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Exhibit A to Credit and Security Agreement
AMENDED AND RESTATED REVOLVING NOTE
$3,260,000 Denver, Colorado
December 8, 2004
For value received, the undersigned, METRETEK, INCORPORATED, a Florida
corporation (the "Borrower"), hereby promises to pay on the Termination Date
under the Credit Agreement (defined below), to the order of XXXXX FARGO BUSINESS
CREDIT, INC., a Minnesota corporation (the "Lender"), at its main office in
Denver, Colorado, or at any other place designated at any time by the holder
hereof, in lawful money of the United States of America and in immediately
available funds, the principal sum of Three Million Two Hundred Sixty Thousand
Dollars ($3,260,000) or, if less, the aggregate unpaid principal amount of all
Revolving Advances made by the Lender to the Borrower under the Credit Agreement
(defined below) together with interest on the principal amount hereunder
remaining unpaid from time to time, computed on the basis of the actual number
of days elapsed and a 360-day year, from the date hereof until this Note is
fully paid at the rate from time to time in effect under the Credit and Security
Agreement dated as of September 6, 2002 (as amended, supplemented or restated
from time to time, the "Credit Agreement") by and between the Lender and the
Borrower. The principal hereof and interest accruing thereon shall be due and
payable as provided in the Credit Agreement. This Note may be prepaid only in
accordance with the Credit Agreement.
This Note has been executed and delivered in substitution for and not in
repayment of (i) the Revolving Note of the Borrower dated September 6, 2002 and
(ii) the Amended and Restated Revolving Note of the Borrower dated September 24,
2003, and is issued pursuant, and is subject, to the Credit Agreement, which
provides, among other things, for acceleration hereof. This Note is the
Revolving Note referred to in the Credit Agreement. This Note is secured, among
other things, pursuant to the Credit Agreement and the Security Documents as
therein defined, and may now or hereafter be secured by one or more other
security agreements, mortgages, deeds of trust, assignments or other instruments
or agreements.
The Borrower shall pay all costs of collection, including reasonable
attorneys' fees and legal expenses if this Note is not paid when due, whether or
not legal proceedings are commenced.
Presentment or other demand for payment, notice of dishonor and protest
are expressly waived.
METRETEK, INCORPORATED
By:_________________________
Xxxx X. Xxxxxxxxxx
Secretary
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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; (v) a Fifth Amendment to Credit and Security Agreement and
Waiver of Defaults dated as of June 3, 2004; and (vi) a Sixth Amendment to
Credit and Security Agreement and Waiver of Defaults dated as of December 8,
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 (i)
software development and (ii) 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
------ --------------------------
December 31, 2004 $280,000
January 31, 2005 $280,000
February 28, 2005 $280,000
March 31, 2005 $286,000
April 30, 2005 $286,000
May 31, 2005 $286,000
June 30, 2005 $292,000
July 31, 2005 $292,000
August 31, 2005 $306,000
September 30, 2005 $306,000
October 31, 2005 $306,000
November 30, 2005 $306,000
December 31, 2005 and thereafter $306,000 "
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
------ ------------------
Twelve months ended December 31, 2004 <$5,250,000>
Three months ended March 31, 2005 $ 22,000
Six months ended June 30, 2005 $ 45,000
Nine months ended September 30, 2005 $ 102,000
Twelve months ended December 31, 2005 $ 212,000 "
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, 2005, for Capital Expenditures, $__________________ in the
aggregate, which [ ] satisfies [ ] does not satisfy the requirement that such
expenditures not exceed $50,000 in the aggregate during such year.
4. SALARIES. As of the Reporting Date, the Borrower [ ] is [ ] is not in
compliance with Section 6.8 of the Credit Agreement concerning salaries.
5. ADVANCES TO CORPORATE GUARANTORS. Pursuant to Section 6.27 of the
Credit Agreement, for the year-to-date period ending on the Reporting Date, the
Borrower has repaid Corporate Guarantors on existing advances, during the fiscal
year ended December 31, 2005,
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$_________________ in the aggregate, which [ ] satisfies [ ] does not satisfy
the requirement that such advances not exceed 75% of fiscal year-to-date Net
Income during such year.
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 15 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/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
------------------------ --------------------------
Name: Xxxx X. Xxxxxxxxxx Name: Xxxx X. Xxxxxxxxxx
Its: Secretary Its: Secretary
POWERSECURE, INC. SOUTHERN FLOW COMPANIES, INC.
By: /s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
------------------------ --------------------------------
Name: Xxxx X. Xxxxxxxxxx Name: Xxxx X. Xxxxxxxxxx
Its: Secretary Its: Secretary
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 15 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/ Xxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxxxx
Its: Secretary
