Exhibit 10.66
AMENDMENT NO. 5 TO LOAN AGREEMENT
DATED OCTOBER 25, 1996
BY AND BETWEEN TANKNOLOGY-NDE INTERNATIONAL, INC.,
TANKNOLOGY/NDE CORPORATION,
TANKNOLOGY-NDE CONSTRUCTION SERVICES, INC.,
PROECO, INC. AND 2368692 CANADA, INC.
AND
BANK ONE, TEXAS, N.A.
This Amendment No. 5 ("Fifth Amendment") to the Loan Agreement, by and
among TANKNOLOGY-NDE INTERNATIONAL, INC. (formerly known as NDE ENVIRONMENTAL
CORPORATION) ("NDE"), a Delaware corporation, TANKNOLOGY/NDE CORPORATION, a
Delaware corporation, PROECO, INC., a Delaware corporation, 2368692 CANADA, INC.
(formerly known as TANKNOLOGY CANADA (1988) INC.), a Canadian federal
corporation, TANKNOLOGY-NDE CONSTRUCTION SERVICES, INC., a Delaware corporation,
and OUTBOUND SERVICES, INC., a California corporation (collectively, "Borrower")
and BANK ONE, TEXAS, N.A., a national banking association (the "Bank") is
entered into this 5th day of November 1998.
W I T N E S S E T H:
WHEREAS, Borrower and Bank entered into the Loan Agreement on October 25,
1996, as amended by the First Amendment dated April 10, 1997, the Second
Amendment dated May 20, 1997, the Third Amendment dated December 23, 1997 and
the Fourth Amendment dated June 26, 1998 (the "Loan Agreement");
WHEREAS, NDE has purchased all the outstanding common stock of Outbound
Services, Inc. ("OSI") pursuant to that certain Stock Purchase Agreement dated
August 7, 1998, by and among NDE, OSI and the stockholders of OSI identified in
the signature page of the Stock Purchase Agreement (the "OSI Stock Purchase
Agreement") (the selling stockholders of OSI hereinafter referred to as the
"Sellers");
WHEREAS, for consideration under the OSI Stock Purchase Agreement, NDE:
(i) executed that certain promissory note dated August 7, 1997 in the face
amount of $750,000 made payable to the order of Sellers (the "OSI
Unsecured Note");
(ii) granted Sellers certain non-transferable rights to purchase up to an
aggregate of 500,000 fully paid and nonassessable shares of NDE's
common stock as more fully described in that certain Warrant Agreement
dated August 7, 1998, by and among NDE and Sellers (the "OSI Warrant
Agreement");
-1-
(iii) paid Sellers $700,000.00 in cash;
(iv) transferred stock certificates to Sellers for 250,000 shares of NDE
common stock;
(v) agreed to either guarantee or advance funds to OSI for OSI to pay
certain indebtedness of OSI in an amount not to exceed $335,000.00;
and
(vi) agreed to invest at least $500,000.00 in additional working capital in
OSI.
WHEREAS, OSI engages in the Maintenance Service Business--a type of
business unrelated to Borrower's business prior to the closing of the OSI Stock
Purchase Agreement;
WHEREAS, Borrower desires that OSI become a co-Borrower under the Revolving
Note;
WHEREAS, Borrower desires to include OSI's accounts receivable and
inventory in the Borrowing Base calculation;
WHEREAS, Borrower has requested that Bank waive Borrower's non-compliance
with certain covenants, insofar as such non-compliance is the result of NDE's
(i) acquisition of all the outstanding stock of OSI, (ii) indebtedness to the
Sellers evidenced by the OSI Unsecured Note, (iii) payment to Sellers of
$700,000.00 in cash, (iv) granting of stock warrants under the OSI Warrant
Agreement, (v) transfer of stock certificates to Sellers for 250,000 shares of
NDE common stock, (vi) agreement to either guarantee or advance funds to OSI for
the payment of certain indebtedness, (vii) agreement to invest at least
$500,000.00 in additional working capital in OSI, and (viii) Borrower's
engagement in the Maintenance Service Business, all in accordance with the terms
and provisions hereof;
WHEREAS, Bank is willing to agree to the foregoing in accordance with, and
subject to, the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the promises herein contained, and each
intending to be legally bound hereby, the parties agree as follows:
I. Amendments to Loan Agreement.
General. By its execution of the Fifth Amendment, OSI's signature block is
hereby deemed added to the other signature blocks at the end of the Loan
Agreement, and, unless specified otherwise, is hereafter a co-Borrower under the
Loan Agreement, as hereby amended, and does hereby assume, ratify, accept and
confirm all such obligations as co-Borrower under the Loan Documents.
-2-
Article I, DEFINITIONS, is amended by adding the following definitions:
"Borrower" shall have the meaning ascribed to it in the introductory
paragraph of the Fifth Amendment.
"Fifth Amendment" means Amendment No. 5 to this Loan Agreement, executed by
Borrower and Bank on November 5, 1998.
"Maintenance Service Business" shall mean activities related to providing
facility and equipment maintenance service management including maintenance
call receiving, maintenance contractor management, maintenance cost and
service performance analysis for third parties.
"OSI" shall mean Outbound Services, Inc., a California corporation.
"OSI Stock Purchase Agreement" means that certain Stock Purchase Agreement
dated August 7, 1998, by and among NDE, OSI and the selling stockholders
("Sellers") of OSI identified in the signature page of the Stock Purchase
Agreement.
"OSI Unsecured Note" shall mean that certain promissory note dated August
7, 1998 executed by NDE in the face amount of $750,000 made payable to the
order of Sellers.
"OSI Warrant Agreement" means that certain Warrant Agreement dated August
7, 1998, by and among NDE and Sellers wherein NDE granted Sellers certain
non-transferable rights to purchase up to an aggregate of 500,000 fully
paid and nonassessable shares of NDE's common stock as more fully described
therein.
"Revolving Note" means that certain promissory note in the original face
amount of $9,000,000.00 dated of even date with the Fifth Amendment made by
the Borrower payable to the order of the Bank in the form attached as
Exhibit "A-1" to the Fifth Amendment, together with all deferrals,
renewals, extensions, amendments, modifications or rearrangements thereof,
which promissory note shall evidence certain advances to the Borrower by
the Bank pursuant to Section 2.01 of the Loan Agreement.
"Sellers" means those selling stockholders of OSI stock pursuant to the OSI
Stock Purchase Agreement.
Article II, THE LOAN, is modified by adding the following new sections:
2.18 Obligations of OSI. Notwithstanding anything contained herein to
the contrary, while OSI is deemed a co-Borrower for all other purposes
(except as otherwise noted herein), OSI is not a Borrower with respect
to the Term Note.
-3-
Article IV, REPRESENTATIONS AND WARRANTIES, is modified by adding the
following new section:
4.19 Representations and Warranties of OSI. With respect to any
representations and warranties made by OSI with respect to the Notes,
such representations and warranties shall be applicable only to the
Revolving Note.
Article V, AFFIRMATIVE COVENANTS, of the Loan Agreement is hereby amended
by revising the following Section in its entirety to read as follows:
5.19 Adjusted Liabilities to Adjusted Net Worth. Maintain a ratio of
Adjusted Liabilities to Adjusted Net Worth of not more than 2.25 to
1.0 through March 31, 1999; thereafter 2.00 to 1.0 through June 30,
1999; thereafter 1.75 to 1.0 through March 31, 2000; thereafter 1.25
to 1.0 through September 30, 2000; and thereafter 1.0 to 1.0.
Article V, AFFIRMATIVE COVENANTS, is modified by adding the following new
section:
5.35 Affirmative Covenants of OSI. With respect to any affirmative
covenants made by OSI with respect to the Notes, such affirmative
covenants shall be applicable only to the Revolving Note.
Article VI, NEGATIVE COVENANTS, is modified by adding the following new
section:
6.17 Negative Covenants of OSI. With respect to the any negative
covenants made by OSI with respect to the Notes, such negative
covenants shall be applicable only to the Revolving Note.
Section 6.01 Other Indebtedness, as amended by the Third Amendment, is
hereby further amended by moving the word "and" immediately preceding subsection
(J) to the end of such subsection and is further amended by adding the following
subsection thereto:
"(K) indebtedness as evidenced by the OSI Unsecured Note."
Section 6.14 Capital Expenditures Limitation, as amended by the Third and
Fourth Amendments, is hereby further amended by replacing the clause therein
which reads "$3,000,000.00 in the 1998 fiscal year" with "$6,800,000.00 in the
1998 fiscal year".
"Exhibit A-1," the form of Revolving Note attached to the Loan Agreement,
as replaced pursuant to the Third Amendment and the Fourth Amendment is hereby
replaced with Exhibit "X- 0" xxxxxxxx to this Fifth Amendment.
-4-
"Exhibit B," the form of Compliance Certificate attached to the Loan
Agreement, as amended by the Third and Fourth Amendments, is hereby replaced
with Exhibit "B" attached to this Fifth Amendment.
"Schedule 1.01(a), Collateral" attached to the Loan Agreement, as amended
by the Second, Third and Fourth Amendments, is hereby amended by adding the
following information to the end of the section entitled "Tanknology-NDE
International, Inc.", subpart "(a)":
", Outbound Services, Inc., a California corporation",
and is further amended by adding the following information at the end of that
schedule:
"Outbound Services, Inc.
(a) Accounts Receivables
(b) Inventory"
"Schedule 3.10, Collateral Documents" attached to the Loan Agreement, as
amended by the Fourth Amendment, is hereby amended by adding the following
information to each identified subpart:
1. Stock Powers executed by Tanknology-NDE International, Inc.:
"e. Outbound Services, Inc.;
2. Security Agreements:
"e. Outbound Services, Inc. dated November 5, 1998"
3. Financing Statements:
"Outbound Services, Inc.
TEXAS: Secretary of State"
"Schedule 4.01, Jurisdiction Information, etc." attached to the Loan
Agreement is hereby amended by adding the following information to the end of
that schedule:
"Outbound Services, Inc.
State of Incorporation: California"
"Schedule 4.09, Existing Indebtedness" attached to the Loan Agreement is
hereby amended by adding the following information to the end of that schedule:
$750,000 promissory note dated August 7, 1998 executed by NDE and made
payable to the order of Sellers, as defined in the Loan Agreement, as
amended.
-5-
II. Certain Waivers. Bank hereby waives non-compliance by the Borrower with
the covenants set forth in Sections 6.01, 6.04, 6.07, 6.08 and 6.11 of the Loan
Agreement, but only to the extent that such non-compliance was the result of the
Borrower's acquisition of all the outstanding stock of OSI pursuant to the terms
under the OSI Stock Purchase Agreement. Notwithstanding anything that may be
contained herein to the contrary, no waiver or any other provision contained
herein shall serve to subordinate any of Borrower's Obligations to Bank to any
of Borrower's Obligations to any third party, including, but not limited to, any
of NDE's obligations to the Sellers.
III. Certain Consents. Bank hereby consents to (i) the acquisition by NDE
of, and the additional capital investment by NDE of up to $500,000 in, OSI as a
wholly owned subsidiary of NDE, and (ii) the issuance of 500,000 shares of NDE
stock warrants pursuant to the OSI Stock Purchase Agreement.
IV. Conditions to the Effectiveness of the Fifth Amendment. As a condition
to the effectiveness of the Fifth Amendment by Bank, Borrower has satisfied the
following conditions:
A. Receipt of Amended and Restated Revolving Note, Fifth Amendment and
Certificate of Compliance. The Bank shall have received the Amended and
Restated Revolving Note (the form which is attached hereto as Exhibit
"A-1"), multiple counterparts of this Fifth Amendment as requested by the
Bank and the Compliance Certificate duly executed by an authorized officer
for each Borrower (the form of which is attached hereto as Exhibit "B");
B. Collateral Documents. As security for the payment of the Revolving
Note and the performance of the obligations of OSI under the Loan
Agreement, Bank shall have received the duly executed and acknowledged
Collateral Documents described on Schedule 1 attached hereto.
C. Receipt of Certified Copy of Corporate Proceedings and Certificate
of Incumbency. The Bank shall have received from each Borrower copies of
all resolutions of its board of directors with respect to the transactions
set forth in this Fifth Amendment and the execution of this Fifth
Amendment, such copy or copies to be certified by the Secretary or an
Assistant Secretary as being true and correct and in full force and effect
as of the date hereof. In addition, the Bank shall have received from each
Borrower a certificate of incumbency signed by the Secretary or an
Assistant Secretary setting forth (a) the names of the officers executing
this Fifth Amendment, (b) the office(s) to which such Persons have been
elected and in which they presently serve and (c) an original specimen
signature of each such person.
D. Borrower's Opinion of Counsel. Bank shall have received from
counsel for Borrower a written opinion in form satisfactory to Bank
covering the matters set forth on Exhibit "D" attached to the Fifth
Amendment.
-6-
E. Delivery of OSI's Stock Certificate. Bank shall have received the
stock certificate of Outbound Services, Inc. pursuant to the Third
Amendment to Pledge and Security Agreement by and between Borrower and Bank
dated of even date herewith as part of the security for Borrower's
obligations under the Loan Agreement.
F. Satisfaction of Conditions to Fifth Amendment. Upon the
satisfaction of the conditions to the effectiveness of this Fifth
Amendment, as set forth in this Article IV hereof, Borrower shall execute
and deliver to Bank a Certificate of Compliance, and if Bank has been
reasonably satisfied that such conditions have been fulfilled, Bank shall
contemporaneously provide a letter to Borrower stating "Bank One, Texas,
N.A. is satisfied that the conditions set forth in Article IV of the Fifth
Amendment to that certain Loan Agreement dated October 25, 1996, among the
Bank and Tanknology-NDE International, Inc. et al. have been fulfilled,"
whereupon this Fifth Amendment shall become effective.
V. Reaffirmation of Representations and Warranties. To induce Bank to enter
into this Fifth Amendment, Borrower hereby reaffirms, as of the date hereof, its
representations and warranties contained in Article IV of the Loan Agreement, as
amended, and in all other documents executed pursuant thereto, and additionally
represents and warrants as follows:
A. The execution and delivery of this Fifth Amendment and the
performance by Borrower of its obligations under this Fifth Amendment are
within the Borrower's corporate power, have received all necessary
governmental approval (if any shall be required), and do not and will not
contravene or conflict with any provision of law or of any agreement
binding upon the Borrower.
B. The Loan Agreement as amended by this Fifth Amendment represents
the legal, valid and binding obligations of Borrower, enforceable against
Borrower in accordance with its terms subject as to enforcement only to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and general
principles of equity.
C. No Event of Default or Unmatured Event of Default has occurred and
is continuing as of the date hereof.
VI. Defined Terms. Except as amended hereby, terms used herein that are
defined in the Loan Agreement shall have the same meanings herein.
VII. Reaffirmation of Loan Agreement. This Fifth Amendment shall be deemed
to be an amendment to the Loan Agreement, and the Loan Agreement, as amended
hereby, is hereby ratified, approved and confirmed in each and every respect.
All references to the Loan Agreement herein and in any other document,
instrument, agreement or writing shall hereafter be deemed to refer to the Loan
Agreement as amended hereby.
-7-
VIII. Entire Agreement. The Loan Agreement, as hereby amended, embodies the
entire agreement between Borrower and Bank, and supersedes all prior proposals,
agreements and understandings relating to the subject matter hereof. Borrower
certifies that it is relying on no representation, warranty, covenant or
agreement except for those set forth in the Loan Agreement as hereby amended and
the other documents previously executed or executed of even date herewith.
IX. Governing Law. THIS FIFTH AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. This Fifth Amendment has been entered into in Xxxxxx
County, Texas, and it shall be performable for all purposes in Xxxxxx County,
Texas. Courts within the State of Texas shall have jurisdiction over any and all
disputes between Borrower and Bank, whether in law or equity, including, but not
limited to, any and all disputes arising out of or relating to this Fifth
Amendment or any other Loan Document; and venue in any such dispute whether in
federal or state court shall be laid in Xxxxxx County, Texas.
X. Severability. Whenever possible each provision of this Fifth Amendment
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Fifth Amendment shall be prohibited
by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Fifth Amendment.
XI. Execution in Counterparts. This Fifth Amendment may be executed in any
number of counterparts and by the different parties on separate counterparts,
and each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same agreement.
XII. Section Captions. Section captions used in this Fifth Amendment are
for convenience of reference only, and shall not affect the construction of this
Fifth Amendment.
XIII. Successors and Assigns. This Fifth Amendment shall be binding upon
the Borrower and Bank and their respective successors and assigns, and shall
inure to the benefit of the Borrower and Bank, and the respective successors and
assigns of Bank.
XIV. Non-Application of Chapter 346 of Texas Finance Code. The provisions
of Chapter 346 of the Texas Finance Code are specifically declared by the
parties hereto not to be applicable to the Loan Agreement as hereby amended or
any of the other Loan Documents or to the transactions contemplated hereby.
XV. Notice. THIS FIFTH AMENDMENT TOGETHER WITH THE LOAN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. `
-8-
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
be duly executed as of the day and year first above written.
BORROWER:
TANKNOLOGY-NDE INTERNATIONAL, INC.
(formerly known as NDE ENVIRONMENTAL
CORPORATION)
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
TANKNOLOGY/NDE CORPORATION
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
TANKNOLOGY-NDE CONSTRUCTION
SERVICES, INC.
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
PROECO, INC.
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
2368692 CANADA, INC. (formerly known as
TANKNOLOGY CANADA (1988) INC.)
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
President
OUTBOUND SERVICES, INC.
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
-9-
BANK:
BANK ONE, TEXAS, N.A.
By: //s// JO XXXXX XXXXXXXXX
------------------------------------
Jo Xxxxx Xxxxxxxxx
Vice President
-10-
Schedule 1
1. Stock Power executed by Tanknology-NDE International, Inc. with respect to
its shares of Outbound Services, Inc., a wholly owned subsidiary.
2. Third Amendment to Stock Pledge and Security Agreement between
Tanknology-NDE International, Inc. and Bank One, Texas.
3. Security Agreement between Outbound Services, Inc. and Bank One, Texas.
4. Financing Statement
Outbound Services, Inc.
TEXAS: Secretary of State
-1-
EXHIBIT "A-1"
AMENDED AND RESTATED REVOLVING NOTE
$9,000,000.00 November 5, 1998
FOR VALUE RECEIVED, TANKNOLOGY-NDE INTERNATIONAL, INC. (formerly known as
NDE ENVIRONMENTAL CORPORATION) ("NDE"), a Delaware corporation, TANKNOLOGY/NDE
CORPORATION, a Delaware corporation, PROECO, INC., a Delaware corporation,
2368692 CANADA, INC. (formerly known as TANKNOLOGY CANADA (1988) INC.), a
Canadian federal corporation, TANKNOLOGY-NDE CONSTRUCTION SERVICES, INC., a
Delaware corporation, and OUTBOUND SERVICES, INC., a California corporation, all
of the foregoing having an address at 0000 Xxxxx Xxxxx, Xxxx. 000, Xxxxxx, Xxxxx
00000 (collectively, "Borrower") unconditionally promise to pay to the order of
BANK ONE, TEXAS, NATIONAL ASSOCIATION, (herein called "Bank"), at its offices at
000 Xxxxxx, Xxxxxxx, Xxxxx 00000, the principal sum of NINE MILLION DOLLARS
($9,000,000.00) or, if less, the aggregate unpaid principal amount of all
Revolving Loans (as defined in the Loan Agreement) made by the Bank to the
Borrower pursuant to the Loan Agreement, as shown in the records of the Bank,
outstanding on such date.
The undersigned also promise to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Loan Agreement; provided,
however, that in no event shall such interest exceed the Maximum Rate (as
hereinafter defined).
"Maximum Rate" means the Maximum Rate of non-usurious interest permitted
from day to day by Applicable Law.
"Applicable Law" means that law in effect from time to time and applicable
to this Revolving Note which lawfully permits the charging and collection of the
highest permissible lawful, non-usurious rate of interest on this Revolving
Note. To the extent federal law permits Bank to contract for, charge or receive
a greater amount of interest, Bank will rely on federal law instead of the Texas
Finance Code, as supplemented by Texas Credit Title, for the purpose of
determining the Maximum Rate. Additionally, to the maximum extent permitted by
applicable law now or hereafter in effect, Bank may, at its option and from time
to time, implement any other method of computing the Maximum Rate under the
Texas Finance Code, as supplemented by Texas Credit Title, or under other
applicable law, by giving notice, if required, to Borrower as provided by
applicable law now or hereafter in effect. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it is not the
intention of Bank to accelerate the maturity of any interest that has not
------------
Initial for
Identification
A-1
accrued at the time of such acceleration or to collect unearned interest at the
time of such acceleration.
In no event shall Chapter 346 of the Texas Finance Code (which regulates
certain revolving loan accounts and revolving tri-party accounts) apply to this
Note. To the extent that Chapter 303 of the Texas Finance Code is applicable to
this Note, the "weekly ceiling" specified in such Chapter 303 is the applicable
ceiling; provided that, if any applicable law permits greater interest, the law
permitting the greatest interest shall apply.
In no event shall the aggregate of the interest on this Note, plus any
other amounts paid in connection with the loan evidenced by this Note which
would under Applicable Law be deemed "interest," ever exceed the maximum amount
of interest which, under Applicable Law, could be lawfully charged on this Note.
The Bank and the Borrower specifically intend and agree to limit contractually
the interest payable on this Note to not more than an amount determined at the
Maximum Rate. Therefore, none of the terms of this Note or any other instruments
pertaining to or securing this Note shall ever be construed to create a contract
to pay interest at a rate in excess of the Maximum Rate, and neither the
Borrower nor any other party liable herefor shall ever be liable for interest in
excess of that determined at the Maximum Rate, and the provisions of this
paragraph shall control over all provisions of this Note or of any other
instruments pertaining to or securing this Note. If any amount of interest taken
or received by the Bank shall be in excess of the maximum amount of interest
which, under Applicable Law, could lawfully have been collected on this Note,
then the excess shall be deemed to have been the result of a mathematical error
by the parties hereto and shall be refunded promptly to the Borrower. All
amounts paid or agreed to be paid in connection with the indebtedness evidenced
by this Note which would under Applicable Law be deemed "interest" shall, to the
extent permitted by Applicable Law, be amortized, prorated, allocated and spread
throughout the full term of this Note.
This Note is the Revolving Note referred to in and is entitled to the
benefits of a certain Loan Agreement, dated as of October 25, 1996, as amended
by that First Amendment dated April 10, 1997, that Second Amendment dated May
20, 1997, that Third Amendment dated December 23, 1997, the Fourth Amendment
dated June 26, 1998 and the Fifth Amendment dated of even date herewith (as the
same may be further amended, modified, supplemented, extended, rearranged and/or
restated from time to time, the "Loan Agreement"), entered into by and among
Tanknology-NDE International, Inc., (f/k/a NDE Environmental Corporation) et
al., as Borrower, and Bank One, Texas, National Association and secured by the
Collateral Documents (as such term is defined in the Loan Agreement). Reference
is hereby made to the Loan Agreement for a statement of the prepayment rights
and penalties and obligations of the Borrower, a description of the properties
and assets mortgaged, encumbered and assigned, the nature and extent of the
security and the rights of the parties to the Collateral Documents in respect of
such security, and for a statement of the terms and conditions under which the
due date of this Note may be accelerated. Upon the occurrence of any Event of
Default as specified in the Loan Agreement, the principal balance hereof and the
------------
Initial for
Identification
A-2
interest accrued hereon may be declared to be forthwith due and payable in
accordance with the Loan Agreement, and any indebtedness of the holder hereof to
the Borrower may be appropriated and applied hereon.
In addition to and not in limitation of the foregoing, the undersigned
further agrees, subject only to any limitation imposed by applicable law, to pay
all reasonable expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder of this Note in endeavoring to collect any
amounts payable hereunder which are not paid when due, whether by acceleration
or otherwise.
All parties hereto, whether as makers, endorsees, or otherwise, severally
waive presentment for payment, demand, protest, notice of intent to accelerate,
notice of acceleration and notice of dishonor.
This Note is issued in substitution for, and in replacement, modification,
rearrangement, renewal and extension of, but not in extinguishment of, the
outstanding principal indebtedness evidenced by that certain note of
Tanknology-NDE International, Inc. (f/k/a NDE Environmental Corporation),
Tanknology/NDE Corporation, ProEco, Inc., 2368692 Canada, Inc. (f/k/a/
Tanknology Canada (1988) Inc.) and Tanknology-NDE Construction Services, Inc.,
dated June 26, 1998, payable to the order of Bank One, Texas, N.A. in the
original principal sum of $9,000,000.00, (the "Prior Note"); it being
acknowledged and agreed by Borrower that the indebtedness evidenced by this Note
constitutes an extension and renewal of the outstanding principal indebtedness
evidenced by the Prior Note, and that all security interests and other liens
which secure the repayment of the Prior Note shall continue to secure the
indebtedness evidenced by this Note.
THIS NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE
OF TEXAS AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
EXECUTED this 5th day of November, 1998.
MAKER:
TANKNOLOGY-NDE INTERNATIONAL, INC.
(formerly known as NDE ENVIRONMENTAL
CORPORATION)
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
A-3
TANKNOLOGY/NDE CORPORATION
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
PROECO, INC.
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
2368692 CANADA, INC. (formerly known as
TANKNOLOGY CANADA (1988) INC.)
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
President
TANKNOLOGY-NDE CONSTRUCTION
SERVICES, INC.
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
OUTBOUND SERVICES, INC.
By: //s// XXX XXXXX XXXXXXX
------------------------------------
Xxx Xxxxx Xxxxxxx
Chairman of the Board
A-4
EXHIBIT "B"
Compliance Certificate
I, ______________________, the ___________________________ of
TANKNOLOGY-NDE INTERNATIONAL, INC. (the "Company"), pursuant to Section 5.05 of
the Loan Agreement dated as of October 25, 1996, as amended by the First
Amendment dated April 10, 1997, the Second Amendment dated May 20, 1997, the
Third Amendment dated December 23, 1997, the Fourth Amendment dated June 26,
1998, and the Fifth Amendment dated November 5, 1998 by and among BANK ONE,
TEXAS, N.A. ("Bank") and the Company et al. (the "Agreement") do hereby certify,
as of the date hereof, that to my knowledge:
1. No Event of Default (as defined in the Agreement) has occurred and is
continuing, and no Unmatured Event of Default (as defined in the
Agreement) has occurred and is continuing except for the following
events (include actions taken to cure such situations):
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
--------------------------;
2. No material adverse change has occurred in the condition, financial or
otherwise, of the Company since ________________;
3. Except as otherwise stated in the Schedule, if any, attached hereto,
each of the representations and warranties of the Company contained in
Article IV of the Agreement is true and correct in all respects; and
B-1
4. The Company's financial condition for the month ending __________ is
as follows:
Financial Covenant Time Period Required Ratio Actual Ratio
================================= ============== ============================================================= ==============
(a) Net Worth Term of Loan Not less than the Consolidated Net Worth as of 12/31/97,
with allowable cumulative interim losses during fiscal year
1998 of not more than $1,000,000.00 (tested as of the end of
each calendar quarter), and as of 12/31/98, and thereafter,
maintain at least the Consolidated Net Worth in effect
12/31/97 plus 70% of Borrower's Net Income (if positive)
after 12/31/98.
(b) Capital Expenditures Term of Loan Not more than $6,800,000 for fiscal 1998 and $2,000,000 for
each year thereafter.
(c) Debt Service Coverage Ratio Term of Loan Not less than 1.2 to 1.0
(d) Adjusted Liabilities to Term of Loan 9/30/98 - 3/31/99 not more than 2.25 to 1.0; 4/1/99
Adjusted Net Worth 6/30/99 not more than 2.00 to 1.0; 7/1/99 - 3/31/2000 not
more than 1.75 to 1.0; 4/1/2000 - 9/30/2000 not more
than 1.25 to 1.0; and after 9/30/2000 not more than 1.0
to 1.0.
================================= ============== ============================================================= ==============
This certificate is executed this ___ day of ___________ 199__.
TANKNOLOGY-NDE INTERNATIONAL, INC.
------------------------------------
By: ________________________________
Its: _______________________________
B-2
EXHIBIT "C"
There is no Exhibit C attached to this Fifth Amendment.
C-1
EXHIBIT "D"
Form of Opinion of Counsel for Borrower
Xxxxx & Xxxxx, L.L.P.
(1) OSI is a corporation duly organized, existing, and in good standing
under the Laws of its state of incorporation [naming such states] and is
qualified to transact business and is in good standing in those states where the
nature of business or property owned by it requires qualification, as set forth
in Schedule 4.01 of the Loan Agreement, as amended, attached to this Fifth
Amendment and made a part hereof, and, to the knowledge of such counsel, is not
required to be qualified as a foreign corporation in any other jurisdiction;
(2) OSI has the power to execute and deliver the Fifth Amendment, to borrow
money thereunder, to grant the Collateral required thereunder, to execute and
deliver the Collateral Documents, and to perform its obligations thereunder;
(3) All corporate actions by OSI and all consents and approvals of any
Persons necessary to the validity of the Fifth Amendment and each other document
to be delivered hereunder have been duly taken or obtained, and the Fifth
Amendment and the Collateral Documents, and such other documents do not conflict
with any provision of the charter or by-laws of OSI, or of any applicable Laws,
or any other agreement binding OSI or its property of which, after reasonable
inquiry, such counsel has knowledge; and
(4) The Fifth Amendment and Collateral Documents to be delivered hereunder
have been duly executed by, and each is a valid and binding obligation of OSI;
each of the foregoing documents is in all respects sufficient to achieve its
purported function and is enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium, or other similar
laws affecting creditors' rights generally or by general equitable principles.
D-1
