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EXHIBIT 4.20
LIMITED WAIVER AND EIGHTH AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
This LIMITED WAIVER AND EIGHTH AMENDMENT TO CREDIT AGREEMENT is made
and entered into as of April 3, 2000 (this "Amendment"), among (a) ITEQ, INC., a
Delaware corporation (the "Borrower"), (b) THE GUARANTORS signatories hereto as
guarantors, (c) FLEET NATIONAL BANK (f/k/a BankBoston, N.A.), a national banking
association having a place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000 (acting in its individual capacity, "Fleet"), and the other
lending institutions which are or become parties to the Credit Agreement defined
below (together with Fleet, the "Banks"), (d) DEUTSCHE BANK AG, as documentation
agent (the "Documentation Agent"), and (e) FLEET NATIONAL BANK, as agent for the
Banks (acting in such capacity, the "Agent"). Capitalized terms used herein
without definition shall have the meanings assigned to such terms in the Credit
Agreement defined below.
WHEREAS, the Borrower, the Guarantors, the Banks, the Documentation
Agent and the Agent have entered into the Revolving Credit Agreement, dated as
of October 28, 1997 (as amended and in effect from time to time, the "Credit
Agreement"), pursuant to which the Banks have extended credit to the Borrower on
the terms set forth therein;
WHEREAS, the Borrower has requested that the Banks and the Agent
suspend or waive certain covenants and amend other provisions contained in the
Credit Agreement and other Loan Documents; and
WHEREAS, the Banks and the Agent have agreed to honor such requests
upon the terms and subject to the conditions contained herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
SECTION 1. TEMPORARY SUSPENSION OF CERTAIN PROVISIONS OF THE CREDIT
AGREEMENT.
(a) Subject to the satisfaction of the conditions precedent set forth
in Section 9 and in consideration and reliance upon the agreements of the
Borrower and the Guarantors contained herein, the Banks and the Agent hereby
agree temporarily to suspend the Borrower's obligation to comply with Sections
8.1, 8.2, 8.3, 8.4, 8.5, 8.6 and 8.7 and, only with respect to the period ended
Xxxxxxxx 00, 0000, xxxxxxxxxx (x), (x) and (c) of Section 6.4 (the "Specified
Covenants") of the Credit Agreement from February 29, 2000 until 5 p.m., Boston
time, on June 29, 2000; provided, that each of the following conditions are
satisfied throughout such period:
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(i) the Borrower will not make or permit any Subsidiary to
make, Capital Expenditures or enter into Capitalized Leases and
operating leases with rental obligations, in an aggregate amount
greater than $1,000,000 for all such Capital Expenditures, Capitalized
Leases and rental obligations for the period from January 1, 2000 to
June 29, 2000,
(ii) the Borrower will not cause or permit the combined
monthly EBITDA for any period of two-consecutive months to be less than
the combined minimum EBITDA for such two-month period set forth below:
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TWO - MONTH PERIOD MINIMUM EBITDA
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February and March 2000 $455,000
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March and April 2000 $438,000
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April and May 2000 $746,000
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(iii) the Borrower shall have provided to the Banks and the
Agent, within 20 days following the end of each of the two-month
periods set forth above, a certificate signed by the Borrower's chief
financial officer certifying as to the Borrower's compliance with each
of the conditions for such period as set forth herein, together with
the details thereof as reasonably requested by the Agent; and
(iv) the Borrower shall deliver to the Banks as soon as
available its financial statements for the fiscal period ended December
31, 1999.
(b) At 5:00 p.m., Boston time, on June 29, 2000, or at such earlier
time as any condition set forth in Section 1(a) is not met or any other Event of
Default under the Credit Agreement shall occur (other than the Borrower's
failure to comply with the Specified Covenants through June 29, 2000), the
provisions of Section 1(a) shall expire and be of no further force or effect,
and the Banks and the Agent shall thereupon have all of the rights and remedies
set forth in the Credit Agreement and the other Loan Documents as if the
Borrower's compliance with the Specified Covenants had never been suspended.
(c) The waiver set forth in Section 1(a) shall apply only to the
Specified Covenants. No waiver with respect to any other Default or Event of
Default, whether presently existing or hereafter arising, is granted hereby. Any
obligation to make Swing Line Loans, to make Revolving Credit Loans or to issue,
extend or renew Letters of Credit shall, at all times, be subject to the
satisfaction of all of the terms and conditions of the Credit Agreement,
including, without limitation, the conditions precedent set forth in the Credit
Agreement. The Banks and the Agent shall, at all times, retain all of the rights
and remedies in respect of any Default or Event of Default under the Credit
Agreement other than, during the limited period described in Section 1(a), with
respect to the Specified Covenants.
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SECTION 2. AMENDMENT TO CREDIT AGREEMENT.
SECTION 2.1 DEFINITIONS.
(a) The following new definitions are hereby inserted in Section 1.1 of
the Credit Agreement in their appropriate alphabetical order:
"Agency Account Agreements. See Section 6.21(b)."
"Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report,
which is equal to the aggregate of:
(a) 65% of that amount which is (i) the total sum,
for each of four weeks ended prior to the date on which the
Borrowing Base Report is due, of the amount of the outstanding
Accounts Receivable of the Borrower and the Guarantors not
more than 60 days overdue as of the last Business Day of each
such week, minus, for such week, reserves and write-offs
therefor taken by the Borrower and the Guarantors in
accordance with their past practices and generally accepted
accounting principles consistently applied by the Borrower and
the Guarantors divided by (ii) four; and
(b) $46,000,000."
"Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in a form and containing details
satisfactory to the Agent."
"Cash Flow Statements. On a consolidated basis for the Borrower and its
Subsidiaries, a rolling 13-week cash flow forecast in a form satisfactory to the
Agent prepared by the Borrower showing comparisons of actual to forecast
performance for prior weekly periods."
"Eighth Amendment. The Limited Waiver and Eighth Amendment to Revolving
Credit Agreement dated as of April 3, 2000, among the Borrower, the Guarantors,
the Banks, the Documentation Agent and the Agent."
"Eighth Amendment Effective Date. The date on which the conditions set
forth in Section 9 of the Eighth Amendment are satisfied."
"Excess Line Fee. See Section 4.1(d)."
"Fleet. Fleet National Bank, a national banking association, in its
individual capacity."
"Fleet Concentration Account. See Section 6.21(b)."
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"Interim Concentration Account. See Section 6.21(b)."
"Letter of Credit Commitment. $2,110,000, as such amount may be reduced
from time to time."
"Local Accounts. See Section 6.21(b)."
"Revolver Commitment. $54,450,327, as such amount may be reduced from
time to time."
(b) The definition of Agent's Head Office is hereby amended by deleting
the word "Head" and replacing it with the word "Boston."
(c) The definition of Applicable Commitment Rate is hereby amended and
restated in its entirety as follows: "Applicable Commitment Rate. The applicable
rate with respect to the Commitment Fee is 0.5%."
(d) The definition of Base Rate is hereby deleted in its entirety and
replaced with the following:
"Base Rate. The higher of (a) the variable annual rate of interest so
designated from time to time by Fleet as its "prime rate", such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer or (b) one-half of one percent (1/2%) above the
overnight federal funds effective rate, as published by the Board of the Federal
Reserve System, as in effect from time to time. Changes in the Base Rate
resulting from any changes in Fleet's "prime rate" shall take place immediately
without notice or demand of any kind on the effective day of such change."
(e) The definition of BKB is hereby deleted.
(f) The definition Guarantors is hereby amended by adding the following
phrase to the end thereof ", and the "New Guarantors" (as such term is defined
in the Eighth Amendment").
(g) The definition of Issuing Bank is hereby amended and restated in
its entirety to read as follows:
"Issuing Bank. Fleet."
(h) The definition of Mortgages is hereby amended and restated in its
entirety to read as follows:
"Mortgages. The several mortgages and deeds of trust, or other
instruments, whether dated or to be dated on, prior to or after the Closing
Date, from the Borrower and its Subsidiaries to the Agent with respect to the
fee interests of the
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Borrower and its Subsidiaries in the Real Property and in form and substance
satisfactory to the Banks and the Agent."
SECTION 2.2. AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT. Section
2.1 of the Credit Agreement is hereby amended as follow.
(a) The Total Commitment is permanently reduced to $57,670,000.
(b) Starting from the words "provided that" in line 7 to the end of the
first sentence is amended and restated as follow:
"provided that (i) the outstanding aggregate amount of Swing Line
Loans, Revolving Credit Loans, unpaid Reimbursement Obligations, and the Maximum
Drawing Amount shall not exceed $57,670,000 at any time, as such amount may be
reduced from time to time (the "Total Commitment"), and (ii) the outstanding
Swing Line Loans and Revolving Credit Loans shall not exceed the lesser of (i)
the Revolver Commitment and (ii) the Borrowing Base at any time."
SECTION 2.3. AMENDMENT TO SECTION 2.2 OF THE CREDIT AGREEMENT. Section
2.2(c) is hereby inserted in appropriate section order as follow:
"(c) Any reduction or termination in the Revolver Commitment or the
Letter of Credit Commitment shall be permanent and may not be reinstated."
SECTION 2.4. AMENDMENT TO SECTIONS 2.4 AND 2.5 OF THE CREDIT AGREEMENT.
The Borrower shall no longer be permitted the option for Revolving Credit Loans
to bear interest by reference to the Eurodollar Rate after February 29, 2000.
Section 2.4 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
"SECTION 2.4. INTEREST ON LOANS. The outstanding principal
amount of the Revolving Credit Loans (including Swing Line Loans) shall
bear interest at the rate per annum equal to the Base Rate plus the
Applicable Base Rate Margin on Base Rate Loans. Interest shall be
payable monthly in arrears on the first Business Day of each calendar
month and on the Maturity Date for all Loans."
SECTION 2.5. AMENDMENT TO SECTION 2.10 OF THE CREDIT AGREEMENT. Section
2.10 of the Credit Agreement is hereby amended by inserting the item "(a)" after
the phrase "If any time" and inserting the following at the end of the section,
but before the period:
", and (b) the sum of the Swing Line Loans and the Revolving Credit
Loans shall exceed the lesser of the Revolver Commitment and the Borrowing Base,
the amount of such excess will be immediately paid to the Agent for application
to the Obligations until such excess has been reduced to zero."
SECTION 2.6. AMENDMENT TO SECTION 3.1(a) OF THE CREDIT AGREEMENT.
Section 3.1(a) of the Credit Agreement starting from the words "provided,
however" in line 9 of the paragraph to the end of the first sentence of such
paragraph is amended and restated as follow:
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"provided, however, that after giving effect to such request, the
Maximum Drawing Amount plus all unpaid Reimbursement Obligations shall not
exceed the Letter of Credit Commitment."
SECTION 2.7. AMENDMENT TO SECTION 4.1 OF THE CREDIT AGREEMENT. Section
4.1(a) of the Credit Agreement is hereby amended and restated in its entirety
and a new Section 4.1(d) is hereby inserted in appropriate section order as
follow:
"(a) COMMITMENT FEE. The Borrower agrees to pay to the Agent, for the
respective account of each Bank, a fee (the "Commitment Fee") calculated at the
Applicable Commitment Fee Rate on the daily unused portion of the Revolver
Commitment and the Letter of Credit Commitment. The Commitment Fee shall be
payable in arrears on the last day of each calendar month, with a final payment
on the Maturity Date."
"(d) EXCESS LINE FEE. The Borrower agrees to pay to the Agent, for the
ratable accounts of the Banks, an excess line fee in arrears, on the last day of
each calendar month, on the average daily amount by which the Revolver
Commitment exceeds $51,780,327 (the "Excess Line Fee"). The Excess Line Fee
shall be calculated on such average daily amount at the monthly rate of one
percent (1%)."
SECTION 2.8. AMENDMENT TO SECTION 6 OF THE CREDIT AGREEMENT. Section 6
of the Credit Agreement is hereby amended, restated, modified or added as
follows
(a) Section 6.4 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of Section 6.4(f), replacing the period at the end of
Section 6.4(g) with a semi-colon, and inserting the following subsections in
appropriate section order therein:
"(h) on second Business Day of each calendar week a Cash Flow
Statement in a form and containing details satisfactory to the Agent,
together with, in the case of the second Cash Flow Statement during any
calendar month, evidence satisfactory to the Agent that the Cash Flow
Statement has been reviewed by Xxxxxx Xxxxxxxx & Co. for accuracy,
completeness, appropriateness of the methodology and controls and
reasonableness of assumptions; and
(i) on the second Business Day of each calendar week a
Borrowing Base Report as of the last day of the immediately preceding
calendar week."
(b) The following new subsections are inserted in Section 6 of the
Credit Agreement in appropriate section order: -
"SECTION 6.20. MANDATORY COMMITMENT REDUCTION. The Borrower hereby
agrees that the Total Commitment and the Revolver Commitment shall both be
reduced by an amount equal to (a) 100% of the Net Cash Proceeds of asset sales
and casualty insurance proceeds received by the Borrower or any Subsidiary other
than, so long as no Event of Default has occurred, sales of obsolete equipment
from and after March 27, 2000 and not exceeding $50,000 in the aggregate, (b)
100% of the
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Net Cash Proceeds of any new debt offerings by the Borrower or any
Subsidiary, exclusive or any purchase money debt, and (c) 50% of the Net Cash
Proceeds of any equity offerings by the Borrower or any Subsidiary. For purposes
of this section, Net Cash Proceeds shall have the same meaning assigned to such
term in the Limited Waiver dated as of January 24, 2000 entered into by the
Borrower and the Banks."
"SECTION 6.21. CASH MANAGEMENT SYSTEM. (a) The Borrower or any
Guarantor (other than the International Guarantors) may maintain one or more
disbursement accounts (the "Specified Accounts") for which the Agent does not
have lock box or agency account arrangement and if, such accounts are maintained
with the Agent or any Bank, the Agent or such Bank will have waived any right of
setoff to reduce the Obligations with the sum maintained in the Specified
Accounts. The Borrower and the Guarantors (other than the International
Guarantors) may at all times maintain in the Specified Accounts up to the total
sum of $1,500,000 to be used for general working capital purposes. The Borrower
hereby agrees to provide the account information in respect of the Specified
Accounts (other than the Specified Accounts maintained with the Agent or any
Bank) to the Agent, in form and substance satisfactory to the Agent, including,
without limitation, weekly account balances of the Specified Accounts.
(b) Except for the Specified Accounts, the Borrower and the Guarantors
(other than the International Guarantors) shall establish with the Agent a cash
management system satisfactory to the Agent by no later than April 17, 2000. The
Borrower and the Guarantors shall (i) establish a depository account (the "Fleet
Concentration Account") under the control of the Agent for the benefit of the
Banks and the Agent, in the name of the Borrower, (ii) instruct all account
debtors and other obligors, pursuant to notices of assignment and instruction
letters in form and substance satisfactory to the Agent, to remit all cash
proceeds of Accounts Receivable to local depository accounts ("Local Accounts")
or concentration depository accounts ("Interim Concentration Accounts") with
financial institutions which have entered into agency account agreements and, if
applicable, lock box agreements (collectively, "Agency Account Agreements") in
form and substance satisfactory to the Agent, or the Fleet Concentration
Account, (iii) direct all depository institutions with Local Accounts to cause
all funds held in each such Local Account to be transferred no less frequently
than once each day to, and only to, an Interim Concentration Account or the
Fleet Concentration Account, (iv) direct all depository institutions with
Interim Concentration Accounts to cause all funds of the Borrower and its
Guarantors held in such Interim Concentration Accounts to be transferred daily
to, and only to, the Fleet Concentration Account, and (v) at all times ensure
that immediately upon the Borrower's or any of its Guarantors' receipt of any
funds constituting or cash proceeds of any Collateral, all such amounts shall
have been deposited in a Local Account, an Interim Concentration Account or the
Fleet Concentration Account. Good funds credited to the Fleet Concentration
Account will be applied as follows, unless (i) an Event of Default specified in
Section 12(g) or (h) has occurred or (ii) any other Event of Default has
occurred and the Agent is enforcing its rights with respect thereto, in which
case all such funds shall be applied in accordance with Section 12.4 of the
Credit Agreement:
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(A) first, to interest and the amounts (exclusive of
principal amount) due and owing on the Swing Line Loans and
the Revolving Credit Loans,
(B) second, so long as no Default or Event of Default
has occurred and is continuing and to the extent that the
aggregate credit balance in the Specified Accounts does not
exceed $1,500,000, to the Specified Accounts as from time to
time instructed by the Borrower,
(C) third, to principal on the Swing Line Loans,
(D) fourth, to principal on the Revolving Credit
Loans,
(E) fifth, to cash collateralize the Reimbursement
Obligations in an amount equal to 110% of the Maximum Drawing
Amounts of all Letters of Credit outstanding, and
(F) sixth, to all other Obligations.
SECTION 2.9. AMENDMENT TO SECTION 7.1 OF THE CREDIT AGREEMENT. Section
7.1 of the Credit Agreement is hereby amended by deleting the word "and" at the
end of subsection (h) and inserting the word "; and" at the end of subsection
(i) in lieu of the period and inserting the following new subsection in
appropriate section order therein"
"(j) Indebtedness incurred for working capital purposes by the
International Subsidiaries that are not International Guarantors."
SECTION 2.10. AMENDMENT TO SECTION 7.2 OF THE CREDIT AGREEMENT. Section
7.2 of the Credit Agreement is hereby amended by deleting the word "and" at the
end of subsection (i) and inserting the word "; and" at the end of subsection
(j) in lieu of the period and inserting the following new subsection in
appropriate section order therein:
"(k) Liens incurred by International Subsidiaries that are not
International Guarantors securing Indebtedness incurred by such International
Subsidiary and permitted by Section 7.1(j)."
SECTION 2.11. AMENDMENT TO SECTION 12 OF THE CREDIT AGREEMENT. Section
12 of the Credit Agreement is hereby amended by inserting after Section 12.3 the
following new Section 12.4:
"12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that
following the occurrence or during the continuance of any Default or
Event of Default, the Agent or any Bank, as the case may be, receives
any monies in connection with the enforcement of any the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as
follows:
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(a) First, to the payment of, or (as the
case may be) the reimbursement of the Agent for or in
respect of all reasonable costs, expenses,
disbursements and losses which shall have been
incurred or sustained by the Agent in connection with
the collection of such monies by the Agent or for any
amount owing to the Agent or Fleet as cash management
bank, for the exercise, protection or enforcement by
the Agent of all or any of the rights, remedies,
powers and privileges of the Agent under this Credit
Agreement or any of the other Loan Documents or in
respect of the Collateral or in support of any
provision of adequate indemnity to the Agent against
any taxes or liens which by law shall have, or may
have, priority over the rights of the Agent to such
monies;
(b) Second, to all other Obligations in such
order or preference as the Majority Banks may
determine; provided, however, that (i) distributions
shall be made (A) pari passu among Obligations with
respect to the Agent's fee and all other Obligations
and (B) with respect to each type of Obligation owing
to the Banks, such as interest, principal, fees and
expenses, among the Banks pro rata, and (ii) the
Agent may in its discretion make proper allowance to
take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in
full or other provisions for payment in full
satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations
required to be paid pursuant to Section 9-504(1)(c)
of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) Fourth, the excess, if any, shall be
returned to the Borrower or to such other Persons as
are entitled thereto."
SECTION 2.12. AMENDMENT TO SECTION 15.2 OF THE CREDIT AGREEMENT.
Section 15.2 of the Credit Agreement is hereby amended by inserting after the
end of item (i) the following proviso as item (ii) and sequentially renumbering
the subsequent items accordingly:
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"(ii) the reversal or withdrawal of any provisional credits granted by
the Agent upon the transfer of funds from lock box, bank agency or concentration
accounts or in connection with the provisional honoring of checks or other
items,".
SECTION 3. ADDITIONAL SECURITY. (a) In addition to the Obligations
being guaranteed by the current Guarantors, the Obligations shall be further
guaranteed pursuant to documents in a form satisfactory to the Agent by Air-Cure
(Canada) Technologies, Ltd. and G.L.M. Tanks & Equipment Ltd. (the "New
Guarantors").
(b) The Obligations and the guaranteed obligations of the Guarantors
(such term hereinafter includes the New Guarantors) shall, to the extent not
already accomplished, be secured by a first perfected security interest in all
existing and after-acquired tangible and intangible personal property of the
Borrowers and the Guarantors and first perfected mortgages and deeds of trust in
all existing and after-acquired fee real property of the Borrower and the
Guarantors, all pursuant to documents in a form satisfactory to the Agent.
(c) The Collateral security shall include (i) mortgages and deeds of
trust over all fee real estate interests of the Borrower and the Guarantors,
(ii) all intellectual property of the Borrower and the Guarantors, and (iii) a
pledge of 100% of the capital stock of all U.S. Subsidiaries or to the extent a
pledge by the Borrower or any Guarantor of the capital stock of its
International Subsidiary would result in income recognition by the Borrower or
the Guarantor for U.S. income tax purposes, then 65% of the stock of such
International Subsidiary.
SECTION 4. INVESTMENT BANKER. The Borrower hereby agrees to (a)
promptly and in any event by no later than April 30, 2000, identify and engage
an investment banking firm of recognized standing and reasonably satisfactory to
the Majority Banks to explore the strategic business alternatives available to
the Borrower, and (b) on or prior to June 15, 2000, arrange for such investment
banking firm to make a presentation to the Banks and the Agent as to such firm's
recommendations in respect of the strategic business alternatives available to
the Borrower and plans to work with the Borrower to timely implement such
recommendations.
SECTION 5. COMMERCIAL FINANCE EXAMINATION. The Borrower and the
Guarantors agree to permit the Agent to conduct a commercial finance
examination, on the premises of the Borrower or any Guarantor and at other
locations where assets of the Borrower or any Guarantor are located, with
respect to the inventory and accounts receivable components of the Collateral
and the Borrowing Base, and with respect to other aspects of the assets,
liabilities and financial condition of the Borrower or the Guarantor as the
Agent may so elect. The Agent shall be permitted to use either internal or third
party examiners. The Borrower and the Guarantors acknowledge, agree and confirm
that (a) any reports or analyses generated by any examiner are not property of
the Borrower or any Guarantor, (b) none of the Borrower and the Guarantors shall
assert any claim to any such report or analyses and (c) pursuant to Section 15.1
of the Credit Agreement, the fees and expenses of such examiner are for the
account of the Borrower. So long as no Event of Default has
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occurred and is continuing, the Agent agrees that the fees of the examiner shall
not exceed the total sum of $9,250 plus reasonable expenses.
SECTION 6. LIQUIDATION ANALYSIS. The Borrower and the Guarantors hereby
agree to (a) permit PricewaterhouseCoopers LLP ("PWC"), on behalf of counsel to
the Agent, to formulate a liquidation analysis of the Borrower and the
Guarantors and (b) cooperate with PWC in such liquidation analysis. The Borrower
and the Guarantors acknowledge, agree and confirm that (a) any reports or
analyses generated by PWC are not property of the Borrower or any Guarantor, (b)
none of the Borrower and the Guarantors shall assert any claim to any such
report or analyses and (c) pursuant to Section 15.1 of the Credit Agreement, the
fees and expenses of PWC are for the account of the Borrower. So long as no
Event of Default has occurred and is continuing, the Agent agrees that the fees
of PWC for the liquidation analysis shall not exceed the total sum of $130,000
plus reasonable expenses.
SECTION 7. BANKS' CONSIDERATION. The Banks shall entertain and consider
the requests by the Borrower (a) to permit the Borrower to sell the secured
promissory note made payable to the Borrower in respect of the Xxxxxx Sale (as
defined in Section 3(a) of the Limited Waiver dated as of January 24, 2000 (the
"Waiver")) to a buyer reasonably acceptable to the Agent, with the proceeds of
such sale to be applied to reduce the Revolver Commitment, and (b) for the Agent
to issue an Escrow Letter of Credit (as defined in Section 3(a) of the Waiver),
outside of the Letter of Credit Commitment, with the Revolver Commitment to be
reduced by the Maximum Drawing Amount of such Escrow Letter of Credit.
SECTION 8. CLOSING FEE. The Borrower hereby agrees to pay to the Agent,
for the account of the Banks, a closing fee equal to $50,000 in the aggregate
(the "Closing Fee"). The Closing Fee shall be shared pro rata by the Banks in
accordance with their Commitments. The Closing Fee shall be nonrefundable and
fully earned as of the date hereof.
SECTION 9. CONDITIONS TO EFFECTIVENESS. This Amendment shall not become
effective unless on or prior to 5:00 p.m., Boston time, April 3, 2000,
(a) the Agent and the Banks shall have received and be satisfied with
the Borrower's pro forma consolidated and consolidating cash flow statements for
the period to June 30, 2000,
(b) this Amendment shall have been executed and delivered by the
Borrower, the Guarantors, the Majority Banks and the Agent and, in case of the
each of the New Guarantors, a guaranty satisfactory to the Agent shall have been
executed and delivered,
(c) the Borrower shall have paid the Closing Fee to the Agent for the
account of each of the Banks,
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(d) the Agent shall have received evidence satisfactory to it as to the
perfection and priority of all additional security interests, mortgages and
deeds of trust and other instruments described in Section 3 above,
(e) the Agent shall have received evidence satisfactory to it of
appropriate corporate or other entity actions approving the terms and conditions
set forth herein, and
(d) the Borrower shall have reimbursed the Agent for, or paid directly,
all fees, costs, and expenses incurred by the Agent's counsel and PWC and for
which invoices have been delivered.
SECTION 10. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:
SECTION 10.1. REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. Each
of the representations and warranties of the Borrower contained in the Credit
Agreement as modified hereby or in any document or instrument delivered pursuant
to or in connection with the Credit Agreement as modified hereby are true as of
the date hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and changes occurring in the
ordinary course of business which singly or in the aggregate are not materially
adverse, or to the extent that such representations and warranties relate solely
and expressly to an earlier date) and, taking into account this Amendment, no
Default or Event of Default has occurred and is continuing.
SECTION 10.2. AUTHORITY, NO CONFLICTS, ETC. The execution, delivery and
performance of this Amendment and the transactions contemplated hereby (i) are
within the corporate authority of the Borrower and the Guarantors, (ii) have
been duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any material breach or contravention of any provision
of law, statute, rule or regulation to which the Borrower or any Guarantor is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or Guarantors so as to materially adversely affect the assets,
business or any activity of the Borrower or Guarantors, and (iv) do not conflict
with any provision of the corporate charter or bylaws of the Borrower or
Guarantors or any agreement or other instrument binding upon them. The
execution, delivery and performance of this Amendment will result in valid and
legally binding obligations of the Borrower and Guarantors enforceable against
each in accordance with the respective terms and provisions hereof.
SECTION 10.3. CERTAIN SUBSIDIARIES. The Borrower represents, warrants
and covenants that its Subsidiaries ITEQ Tank Management, LLC, ITEQ Tank, LLC
and ITEQ Tank Construction, LLC have no assets and are not conducting any
business and will not acquire any assets or conduct any business.
SECTION 11. RATIFICATION, ETC. This Amendment is limited to the waiver
and amendments to the Credit Agreement set forth herein and upon the terms and
subject to the conditions contained herein. Except as expressly stated herein,
the
13
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Waiver, the Credit Agreement, the other Loan Documents and all documents,
instruments and agreements related thereto are hereby ratified and confirmed in
all respects and shall continue in full force and effect. This Amendment is a
Loan Document.
SECTION 12. RELEASE. In order to induce the Agent and the Banks to
enter into this Amendment, each of the Borrower and the Guarantors acknowledges
and agrees that: (i) neither the Borrower nor any Guarantor has any claim or
cause of action against the Agent or any Bank (or any of its respective
directors, officers, employees or agents); (ii) neither the Borrower nor any
Guarantor has any offset right, counterclaim or defense of any kind against any
of their respective obligations, indebtedness or liabilities to the Agent or any
Bank; and (iii) each of the Agent and the Banks has heretofore properly
performed and satisfied in a timely manner all of its obligations to the
Borrower and each Guarantor. The Borrower and the Guarantors wish to eliminate
any possibility that any past conditions, acts, omissions, events, circumstances
or matters would impair or otherwise adversely affect any of the Agent's and the
Banks' rights, interests, contracts, collateral security or remedies. Therefore,
each of the Borrower and the Guarantors unconditionally releases, waives and
forever discharges (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the Agent or any Bank to either the Borrower and any
Guarantor, except the obligations to be performed by the Agent or any Bank on or
after the date hereof as expressly stated in this Amendment, the Credit
Agreement and the other Loan Documents, and (B) all claims, offsets, causes of
action, suits or defenses of any kind whatsoever (if any), whether arising at
law or in equity, whether known or unknown, which the Borrower or any Guarantor
might otherwise have against the Agent, any Bank or any of its directors,
officers, employees or agents, in either case (A) or (B), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.
SECTION 13. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, which together shall constitute one instrument.
SECTION 14. GOVERNING LAW. THIS AMENDMENT SHALL BE A CONTRACT UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, SHALL FOR ALL PURPOSES BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SAID JURISDICTION,
WITHOUT REFERENCE TO CONFLICTS OF LAW, AND IS INTENDED TO TAKE EFFECT AS A
SEALED INSTRUMENT.
14
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
an instrument under seal to be effective as of the date first above written.
THE BORROWER:
ITEQ, INC.
By: /s/ XXXXXXX X. XXXX
-------------------------------
Name: Xxxxxxx X. Xxxx
Title: President & CEO
15
THE GUARANTORS:
ITEQ MANAGEMENT COMPANY
EXELL, INC. (a Delaware corporation which is
successor by merger to EXELL, INC., a Texas
corporation)
ITEQ TANK SERVICES, INC. (successor by
merger to HMT TANK SERVICE, INC.)
RELIABLE STEEL, INC.
AIR-CURE DYNAMICS, INC.
AMEREX INDUSTRIES, INC.
XXXXXXXX, INC.
INTEREL ENVIRONMENTAL
TECHNOLOGIES, INC.
ALLIED INDUSTRIES, INC.
ITEQ CONSTRUCTION SERVICES, INC.
(f/k/a HMT CONSTRUCTION SERVICES,
INC.)
ITEQ INTELLECTUAL PROPERTIES, INC.
(f/k/a AIX INTELLECTUAL PROPERTIES,
INC.)
ITEQ INVESTMENTS, INC. (f/k/a
ASTROTECH INVESTMENTS, INC.)
TEXOMA TANK COMPANY, INC.
ITEQ STORAGE SYSTEMS, INC. (f/k/a
XXXXX-MINNEAPOLIS TANK &
FABRICATING CO., successor by merger to
HMT, INC., HMT SENTRY SYSTEMS, INC.
and TRUSCO TANK, INC.)
G.L.M. ACQUISITION, L.L.C.
AIR-CURE (CANADA) TECHNOLOGIES, LTD.
G.L.M. TANKS & EQUIPMENT LTD.
By: /s/ XXXXXXX X. XXXX
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: President & CEO
16
THE LENDERS:
FLEET NATIONAL BANK
(f/k/a BankBoston, N.A.),
individually and as Agent
By: /s/ XXXXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: Director
DEUTSCHE BANK AG,
individually and as Documentation Agent
By:
------------------------------------------
Name:
Title:
By:
------------------------------------------
Name:
Title:
BANK OF SCOTLAND
By: /s/ XXXXX XXXXX
------------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
BANK ONE, TEXAS, N.A.
By: /s/ XXXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
00
XXXXXXX (x/x/x Xxxxxx Xxxxxxx)
By: /s/ XXXXX XXXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
By: /s/ XXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
COMERICA BANK
By: /s/ X. XXXXXXXX XXXXXX
------------------------------------------
Name: X. Xxxxxxxx Xxxxxx
Title: Account Officer
THE FUJI BANK, LIMITED
By: /s/ XXXXXXX XXXXXXX
------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President & Manager
HIBERNIA NATIONAL BANK
By: /s/ XXXXXXXXXXX XXXXX
------------------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Vice President
BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.)
By: /s/ XXXXXXX X. XXXXXXXXXXX, XX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx, XX
Title: Managing Director
00
XXXXX XXXX XX XXXXXXXXXX, N.A.
By:
------------------------------------------
Name:
Title:
CHASE BANK TEXAS, NATIONAL ASSOCIATION
(f/k/a Texas Commerce Bank, N.A.)
By: /s/ XXXXX X. SHILCUTT
------------------------------------------
Name: Xxxxx X. Shilcutt
Title: Vice President
