Exhibit 10.16
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT ("Amendment") is made and
entered into as of September 30, 2000 (the "Effective Date"), by and between
NESCO, Inc., an Oklahoma corporation (the "Borrower"), and Bank One, Oklahoma,
NA, a national banking association (the "Lender"), with reference to the
following:
A. The Borrower and the Lender are parties to that certain Credit
Agreement dated as of May 12, 2000, as amended by that certain First Amendment
to Credit Agreement dated as of August 4, 2000 (as amended, the "Credit
Agreement").
B. The Borrower has requested that the Lender approve a temporary
increase in the Working Capital Revolving Credit Commitment from $8,000,000 to
$10,500,000.
C. The Lender has agreed to the requested temporary increase in the
Working Capital Revolving Commitment, subject to the terms and conditions set
forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereby amend the Credit Agreement, effective as of the Effective Date,
as follows:
1. DEFINITIONS. Capitalized terms used herein (including capitalized terms
used in the recitals above) but not otherwise defined have the respective
meanings assigned to them in the Credit Agreement.
2. MODIFICATION OF WORKING CAPITAL REVOLVING CREDIT FACILITY.
A. TEMPORARY INCREASE IN WORKING CAPITAL REVOLVING CREDIT COMMITMENT.
The Lender agrees to increase the Working Capital Revolving Credit Commitment
(and thereby increase the amount available for borrowing under the Working
Capital Revolving Credit Facility) from $8,000,000 to $10,500,000 for the period
beginning on the Effective Date and ending December 31, 2000 (the "Temporary
Increase Period"). At the expiration of the Temporary Increase Period, the
Working Capital Revolving Credit Commitment will return to $8,000,000. If the
Outstanding Working Capital Credit Exposure at the expiration of the Temporary
Increase Period exceeds $8,000,000, the Borrower will be required to make an
immediate prepayment on the outstanding Working Capital Loans in an amount equal
to such excess. In order to implement such temporary increase, the definition of
the term "Working Capital Revolving Credit Commitment" appearing in Section 1.1
of the Credit Agreement is amended to read as follows:
"Working Capital Revolving Credit Commitment" means (i) until
December 31, 2000, the sum of $10,500,000, and (ii) from and after
January 1, 2001, the sum of $8,000,000 or such other amount to which
the Working Capital Revolving Credit Commitment may be modified from
time to time pursuant to the
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terms hereof. As the context requires, "Working Capital Revolving
Credit Commitment" also refers to the obligation of the Lender to make
Working Capital Revolving Loans and Working Capital Term Loans to the
Borrower and to issue Facility LC's under the Working Capital
Revolving Loan Facility.
B. USE OF PROCEEDS. Proceeds of Working Capital Revolving Loans made
during the Temporary Increase Period may be used by the Borrower for any one or
more of the permitted purposes stated in clauses (i), (ii) and (iii) of Section
2.2.1 of the Credit Agreement, but may not be used for the purpose stated in
clause (iv) of Section 2.2.1 thereof.
C. MANDATORY PREPAYMENT. Notwithstanding the provisions of Section
2.3.4 of the Credit Agreement, the Borrower agrees that the net proceeds from
any sale or sales by the Borrower or any of its Subsidiaries of a Substantial
Portion of its Properties during the Temporary Increase Period (including the
net proceeds of any Sale and Leaseback Transaction) shall be paid to the Lender
within three (3) Business Days after receipt thereof and shall be applied as
follows (to the extent of available proceeds): (i) the first $2,000,000 in
aggregate net proceeds shall be applied to the principal installments payable
under Section 2.3.2 of the Credit Agreement with respect to the Term Loans
(application to be made in the inverse order of maturity); (ii) the next
$2,500,000 in aggregate net proceeds shall be applied in reduction of the
outstanding Working Capital Revolving Loans (with application to be made first
to the outstanding Working Capital Revolving Loans which are not NAC Project
Loans and then to any outstanding NAC Project Loans); and (iii) any remaining
net proceeds shall be applied in the order of application set forth in Section
2.3.4 of the Credit Agreement. All other terms and provisions of Section 2.3.4
of the Credit Agreement shall remain in full force and effect. Nothing contained
in this Section 2.C shall nullify the provisions of the Credit Agreement
requiring the consent of the Lender to (a) any sale by the Borrower or any of
its Subsidiaries of a Substantial Portion of its Properties, or (b) any Sale and
Leaseback Transaction.
D. OTHER UNDERSTANDINGS. The parties acknowledge and agree that (i) the
term "Obligations" as used in the Credit Agreement and any other Loan Documents
will include all Working Capital Revolving Loans made during the Temporary
Increase Period and remaining outstanding under the Working Capital Revolving
Credit Facility, and (ii) during the Temporary Increase Period, the commitment
fee payable under Section 2.12(i) of the Credit Agreement will be based on the
daily unused portion of the Working Capital Revolving Credit Commitment (as
temporarily increased hereby) and the Acquisition Loan Commitment.
E. REPLACEMENT WORKING CAPITAL REVOLVING NOTE. The Borrower agrees to
make, execute and deliver to the Lender a replacement Working Capital Revolving
Note (the "Replacement Working Capital Revolving Note"), substantially in the
form attached hereto as Exhibit "D-1A," in increase and replacement of and
substitution for the Working Capital Revolving Note delivered at the Closing.
F. FEE. In consideration of the temporary increase in the Working
Capital Revolving Credit Commitment, the Borrower agrees to pay the Lender a
one-time fee of $15,000.
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3. CONDITIONS PRECEDENT. This Amendment shall become effective as of the
Effective Date, subject to the Borrower's satisfaction of the following
conditions precedent (in addition to the conditions precedent set forth in
Article IV of the Credit Agreement):
A. EXECUTION OF DOCUMENTS. This Amendment and the Replacement Working
Capital Revolving Note shall have been duly and validly authorized, executed and
delivered to the Lender by the Borrower.
B. RESOLUTIONS. The Bank shall have received a copy of the resolutions
of the Board of Directors of the Borrower authorizing the temporary increase in
the Working Capital Revolving Credit Commitment and the execution, delivery and
performance of this Amendment, the Credit Agreement (as amended by this
Amendment) and the Replacement Working Capital Revolving Note.
C. ACCURACY OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Borrower in the Credit Agreement and the other Loan
Documents and in Section 5 hereof shall be true and correct in all material
respects as of the Effective Date (except to the extent any of such
representations and warranties with respect to the financial condition of the
Borrower refer to an earlier specified date).
D. NO DEFAULT. There shall not have occurred any Default or Unmatured
Default as of the Effective Date, and the Borrower shall be current in payment
of all principal, interest and fees due and owing to the Lender as of the
Effective Date.
E. FEE. The Borrower shall have paid the fee referred to in Section 2.F
above.
4. REPRESENTATIONS AND WARRANTIES. All representations and warranties of
Borrower contained in Article V of the Credit Agreement are hereby remade and
restated as the date hereof and shall survive the execution and delivery of this
Amendment. The Borrower further represents and warrants as follows:
A. AUTHORITY. The Borrower has all requisite power and authority and
has been duly authorized to increase the amount of the Working Capital Revolving
Credit Commitment, to borrow under the Working Capital Revolving Credit Facility
(as increased hereby), and to execute, deliver and perform its obligations under
this Amendment, the Credit Agreement (as amended by this Amendment) and the
Replacement Working Capital Revolving Note.
B. BINDING OBLIGATIONS; ENFORCEABILITY. This Amendment, the Credit
Agreement (as amended by this Amendment) and the Replacement Working Capital
Revolving Note are valid and legally binding obligations of the Borrower,
enforceable in accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally.
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C. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and delivery
by the Borrower of this Amendment and the Replacement Working Capital Revolving
Note, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions thereof, will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on the
Borrower or any of its Subsidiaries, or (ii) the Borrower's or any Subsidiary's
articles or certificate of incorporation, partnership agreement, certificate of
partnership, articles or certificate of organization, by-laws, or operating or
other management agreement, as the case may be, or (iii) the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder, or result in, or
require, the creation or imposition of any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by the
Borrower or any of its Subsidiaries, is required to be obtained by the Borrower
or any of its Subsidiaries in connection with the execution and delivery of this
Amendment, the borrowings and other credit extensions under the Credit Agreement
(as amended hereby), the payment and performance by the Borrower of the
Obligations, or the legality, validity, binding effect or enforceability of this
Amendment, the Credit Agreement (as amended by this Amendment) or the
Replacement Working Capital Revolving Note.
D. NO MATERIAL ADVERSE CHANGE. Since ______, 2000 (the date of the
latest financial statements of the Borrower which have been delivered to the
Lender), there has been no adverse change in the business, Property, prospects,
condition (financial or otherwise) or results of operations of the Borrower and
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
5. MISCELLANEOUS.
A. EFFECT OF AMENDMENT. The terms of this Amendment shall be
incorporated into and form a part of the Credit Agreement. Except as amended,
modified and supplemented by this Amendment, the Credit Agreement and all other
Loan Documents shall continue in full force and effect in accordance with their
original stated terms, all of which are hereby reaffirmed in every respect as of
the date hereof. In the event of any irreconcilable inconsistency between the
terms of this Amendment and the terms of the Credit Agreement, the terms of this
Amendment shall control and govern, and the agreements shall be interpreted so
as to carry out and give full effect to the intent of this Amendment. All
references to the "Credit Agreement" appearing in any of the Loan Documents
shall hereafter be deemed references to the Credit Agreement as amended,
modified and supplemented by this Amendment, and all references to the "Working
Capital Revolving Note" appearing in the Credit Agreement and any of the other
Loan Documents shall hereafter be deemed references to the Replacement Working
Capital Revolving Note.
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B. EXHIBITS. The form of Replacement Working Capital Revolving Note
attached hereto as Exhibit D-1A is hereby substituted for Exhibit D-1 to the
Credit Agreement and incorporated therein by this reference.
C. DESCRIPTIVE HEADINGS. The descriptive headings of the several
sections of this Amendment are inserted for convenience only and shall not be
used in the construction of the content of this Amendment.
D. GOVERNING LAW. This Amendment shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of Oklahoma.
E. REIMBURSEMENT OF EXPENSES. The Borrower agrees to pay the reasonable
fees and out-of-pocket expenses of Xxxxx & Xxxxxxx, counsel to the Lender,
incurred in connection with the preparation of this Amendment and the
consummation of the transactions contemplated hereby.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement as of the date first above written.
NESCO, INC.
By:
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Name: Xxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive Officer
BANK ONE, OKLAHOMA, NA,
By:
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Name: Xxxxxxx X. Xxxxx
Title: Vice President
CONSENT OF SUBSIDIARIES
Each of the undersigned hereby (i) acknowledges and consents to the
execution and delivery of the above and foregoing Second Amendment to Credit
Agreement, (ii) confirms that the Security Agreement and the Subsidiary
Guaranty, each previously executed or subscribed to by the undersigned, will
continue in full force and effect as security for payment and performance of all
of the "Secured Obligations," as such term is used in the Security Agreement,
and the "Guaranteed Obligations," as such term is used in the Subsidiary
Guaranty, and (iii) ratifies and reaffirms each of the Security Agreement and
the Subsidiary Guaranty. Capitalized terms used in
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this Consent and not otherwise defined have the respective meanings assigned
to them in the Credit Agreement referred to in the above and foregoing Second
Amendment to Credit Agreement.
LAB ONE ANALYTICAL, INC.
By:
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Name: Xxxx X. Xxxxxxxxx
Title: Chairman
FUEL RECOVERY SYSTEMS, INC.,
an Oklahoma corporation
By:
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Name: Xxxx X. Xxxxxxxxx
Title: Chairman and President
THH ALPHA, INC.,
a North Carolina corporation
By:
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Name: Xxxx X. Xxxxxxxxx
Title: President
CAROLINA DRILLING SERVICES, INC.,
a North Carolina corporation
By:
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Name: Xxxx X. Xxxxxxxxx
Title: President
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SUMMIT ENVIRONMENTAL SERVICES, INC.,
an Oklahoma corporation
By:
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Name:
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Title:
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NESCO ACCEPTANCE CORPORATION,
an Oklahoma corporation
By:
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Name:
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Title:
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XXXXXXX APPRAISAL SERVICES, INC.
By:
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Name:
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Title:
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