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EXHIBIT 4.2
FOURTH AMENDMENT
TO REVOLVING CREDIT AGREEMENT
and
LIMITED WAIVER REGARDING FINANCIAL COVENANTS
This FOURTH AMENDMENT TO REVOLVING CREDIT AGREEMENT AND LIMITED WAIVER
REGARDING FINANCIAL COVENANTS is made and entered into as of June 16, 1999 (this
"Amendment") by and among (a) ITEQ, INC., a Delaware corporation (the
"Borrower"), (b) THE GUARANTORS, (c) BANKBOSTON, N.A., a national banking
association having its principal place of business at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (acting in its individual capacity, "BKB"), and the
other lending institutions which become parties to the Credit Agreement defined
below (collectively, the "Banks"), (d) DEUTSCHE BANK AG, as documentation agent
(the "Documentation Agent"), and (e) BANKBOSTON, N.A., 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 that certain 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, the Guarantors, the Banks, the Documentation
Agent and the Agent have agreed to amend the Credit Agreement and waive certain
provisions thereof as hereinafter set forth;
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. AMENDMENTS AND WAIVERS UNDER THE CREDIT AGREEMENT.
SECTION 1.1 DEFINITIONS.
The following new definitions are hereby inserted in Section 1.1 of
Credit Agreement:
"Fourth Amendment. The Fourth Amendment to Revolving Credit
Agreement and Limited Waiver Regarding Financial Covenants, dated as of
the Fourth Amendment Effective Date, among the Borrower, the Guarantors,
the Banks, the Documentation Agent and the Agent."
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"Fourth Amendment Effective Date. The date on which the
conditions set forth in Section 3 of the Fourth Amendment are
satisfied."
SECTION 1.2 AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT.
(a) The Total Commitment is hereby reduced pursuant to Section 2.2 of
the Credit Agreement to $125,000,000 and the dollar figure "$135,000,000" in the
first sentence of Section 2.1 of the Credit Agreement is hereby replaced with
the dollar figure "$125,000,000".
(b) Section 2.1 of the Credit Agreement is hereby further amended by
inserting the following language at the end of the first sentence of such
Section but before the final period thereof:
", provided further that the outstanding amount of Revolving
Credit Loans (including Swing Line Loans) shall not exceed a maximum
aggregate amount outstanding of $112,500,000 at any time during the
period commencing on the Fourth Amendment Effective Date and ending on
July 31, 1999"
SECTION 1.3 AMENDMENT TO SECTION 3.1(a) OF THE CREDIT AGREEMENT.
Section 3.1(a) of the Credit Agreement is hereby amended by inserting
the following words at the end of the first sentence thereof: "provided further,
however, that during the period commencing on the Fourth Amendment Effective
Date and ending on July 31, 1999 the Maximum Drawing Amount plus unpaid
Reimbursement Obligations shall not exceed $5,000,000".
SECTION 1.4 AMENDMENT TO SECTION 6.4 OF THE CREDIT AGREEMENT.
Section 6.4 of the Credit Agreement is hereby amended by deleting the
word "and" at the end of clause (e) thereof, redesignating clause (f) thereof as
clause (g) and by inserting the following new clause (f) therein:
"(f) on or before June 18, 1999, a forecast of operations
for each fiscal quarter ending on or after the Fourth Amendment
Effective Date and on or before December 31, 2000; and"
SECTION 1.5 AMENDMENT TO SECTION 8.5 OF THE CREDIT AGREEMENT.
Section 8.5 of the Credit Agreement is hereby amended by deleting the
word "or" immediately before clause (c) thereof and by inserting after such
clause (c) the following new clause (d):
"or (d) $1,500,000 during the Borrower's fiscal quarter ending
on June 30, 1999"
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SECTION 1.6 LIMITED WAIVER UNDER SECTION 8 OF THE CREDIT AGREEMENT.
Under Section 8 of the Credit Agreement the Borrower is required to
comply with certain financial covenants. The Borrower has requested the Agent
and the Banks to make certain waivers with respect to the Borrower's compliance
with Sections 8.1, 8.2, 8.3, 8.4, 8.6 and 8.7 of the Credit Agreement. The Banks
and the Agent hereby agree to waive Sections 8.1, 8.2, 8.3, 8.4, 8.6 and 8.7 of
the Credit Agreement, such waiver to be effective until July 30, 1999; provided
that effective as of July 31, 1999 the Borrower shall be required to comply with
Sections 8.2, 8.3 and 8.6 of the Credit Agreement (such Sections of the Credit
Agreement referred to herein as the "Periodically Measured Financial Covenants")
as such Periodically Measured Financial Covenants may apply to any (i) fiscal
quarter, (ii) period of four consecutive fiscal quarters or (iii) other fiscal
time or period ending on or subsequent to (but not before) June 30, 1999;
provided further that effective as of July 31, 1999 the Borrower shall be
required to comply with Sections 8.1, 8.4 and 8.7 of the Credit Agreement (such
Sections of the Credit Agreement referred to herein as the "All-times Financial
Covenants") as such All-times Financial Covenants may apply to any point in time
occurring on or subsequent to (but not before) June 30, 1999; provided further
that on or before July 31, 1999 the Borrower shall, in accordance with Section
6.4(c) of the Credit Agreement, be required to deliver a Compliance Certificate
demonstrating compliance with the covenants contained in Sections 6, 7 and 8 of
the Credit Agreement, including, without limitation, with (a) the Periodically
Measured Financial Covenants as they may apply to any (i) fiscal quarter, (ii)
period of four consecutive fiscal quarters or (iii) other fiscal time or period
ending on June 30, 1999 and (b) the All-times Financial Covenants as they apply
on June 30, 1999.
SECTION 2. AMENDMENT FEES. The Borrower hereby agrees to pay to the
Agent for the account of each Bank party hereto an amount equal to 0.075% of the
Commitment of such Bank as such Commitment is in effect on the date hereof (such
amounts referred to herein as the "Amendment Fees").
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective on the date on which the following conditions shall have been
satisfied:
3.1 LOAN DOCUMENTS. Each of this Amendment and all related
documents shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect and shall be in form
and substance satisfactory to the Agent.
3.2 CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by the Borrower and each
Guarantor of this Amendment and each of the related documents to which
it is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Agent shall have been
provided to the Agent.
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3.4 PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Amendment and all other
documents incident hereto shall be reasonably satisfactory in substance
and in form to the Banks and to the Agent.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:
(a) REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. Each
of the representations and warranties of the Borrower contained in the
Credit Agreement as amended hereby or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement as
amended 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.
(b) 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 5. RATIFICATION, ETC. Except as expressly amended hereby, 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 and the Credit Agreement
shall hereafter be read and construed together as a single document, and all
references in the Credit Agreement, any other Loan Document or any agreement or
instrument related to the Credit Agreement shall hereafter refer to the Credit
Agreement as amended by this Amendment.
SECTION 6. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, which together shall constitute one instrument.
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SECTION 7. 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.
[Signature Pages Follow]
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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/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. XxXxxx
Chief Financial Officer
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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.)
XXXXXX MANUFACTURING CO., INC.
(f/k/a XXXXXX HOLDING COMPANY,
successor by merger to XXXXXX TANK &
MFG. CO., INC., XXXXXX TANK
INTERNATIONAL, INC., XXXXXX POWER,
INC., and XXXXXX TANK & VESSEL, INC.)
By: /s/ XXXXXXXX X. XXXXXX
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Xxxxxxxx X. XxXxxx
Chief Financial Officer
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THE LENDERS:
BANKBOSTON, N.A.,
individually and as Agent
By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxxx X. Xxxxxxx, Director
DEUTSCHE BANK AG,
individually and as Documentation Agent
By: /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx
Title: Vice President
By: /s/ XXXXXXX XXXXXXXX
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Name: Xxxxxxx Xxxxxxxx
Title: Vice President
BANK OF SCOTLAND
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
Title: Senior Vice President
BANK ONE, TEXAS, N.A.
By: /s/ XXXX XXXXXXXX
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Name: Xxxx Xxxxxxxx
Title: Vice President
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XXXXXXX (x/x/x Xxxxxx Xxxxxxx)
By: /s/ XXXXX XXXXXXX
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Name: Xxxxx Xxxxxxx
Title: Vice President
By: /s/ XXXXXXX X. XXXXXX
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Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
COMERICA BANK
By: /s/ XXXXXXXX X. XXXXXXXXX III
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Name: Xxxxxxxx X. Xxxxxxxxx, III
Title: Vice President
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:
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Name:
Title:
HIBERNIA NATIONAL BANK
By: /s/ XXXXXX XXXXXXX
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Name: Xxxxxx Xxxxxxx
Title: Portfolio Manager
NATIONSBANK, N.A. (successor by merger
to NationsBank of Texas, N.A.)
By: /s/ XXXXXXX X. XXXXXXX, XX.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By: /s/ A. XXXXX XXXXXXXXX
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Name: A. Xxxxx Xxxxxxxxx
Title: Vice President
CHASE BANK TEXAS, NATIONAL ASSOCIATION
(f/k/a Texas Commerce Bank, N.A.)
By: /s/ XXXXX X. DOLPHIN
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Name: Xxxxx X. Dolphin
Title: SVP
