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EXHIBIT 4.3
FIFTH AMENDMENT
TO REVOLVING CREDIT AGREEMENT
This FIFTH AMENDMENT TO REVOLVING CREDIT AGREEMENT is made and entered
into as of July 30, 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 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.
(a) The following new definitions are hereby inserted in Section 1.1 of
Credit Agreement in their appropriate alphabetical order:
"Fifth Amendment. The Fifth Amendment to Revolving Credit
Agreement, dated as of the Fifth Amendment Effective Date, among the
Borrower, the Guarantors, the Banks, the Documentation Agent and the
Agent."
"Fifth Amendment Effective Date. The date on which the
conditions set forth in Section 3 of the Fifth Amendment are
satisfied."
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(b) The definition of "Pricing Table" in the Credit Agreement is hereby
amended and restated in its entirety as follows:
"Pricing Table
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APPLICABLE APPLICABLE BASE APPLICABLE APPLICABLE
[ ] EURODOLLAR RATE MARGIN L/C MARGIN COMMITMENT RATE
PRICING RATIO MARGIN (PER ANNUM) (PER ANNUM) (PER ANNUM)
(PER ANNUM)
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Less than 2.50:1 2.00% 0.00% 2.00% 0.375%
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Greater than or equal 2.25% 0.00% 2.25% 0.375%
to 2.50:1 but less
than 3.00:1
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Greater than or equal 2.50% 0.50% 2.50% 0.375%
to 3.00:1 but less
than 3.50:1
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Greater than or equal 2.75% 0.75% 2.75% 0.500%
to 3.50:1 but less
than 4.00:1
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Greater than or equal 3.25% 1.25% 3.25% 0.500%
to 4.00:1
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Any change in the applicable margin shall become effective on
the first day after receipt by the Banks of financial statements
delivered pursuant to Section 6.4(a) or (b) which indicate a change in
the Pricing Ratio. If at any time such financial statements are not
delivered within the time periods specified in Section 6.4(a) or (b),
the applicable margin shall be the highest rate set forth in the
respective column of the Pricing Table, subject to adjustment upon
actual receipt of such financial statements. Notwithstanding anything
herein to the contrary, the Applicable Eurodollar Margin, the
Applicable Base Rate Margin, the Applicable L/C Margin and the
Applicable Commitment Rate shall be, respectively, 3.25%, 1.25%, 3.25%
and 0.50% from the Fifth Amendment Effective Date until the receipt of
the Compliance Certificate and the financial statements required
pursuant to Section 6.4(b) and (c) of the Credit Agreement with respect
to the period ending on March 31, 2000."
(c) The definition of "Pricing Ratio" in the Credit Agreement is hereby
amended by inserting the following language before the final period thereof:
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"provided, however, that the Pricing Ratio as of the end of
the fiscal quarter ending on March 31, 2000 shall be the ratio of (a)
Funded Debt as at the end of such quarter to (b) the product of EBITDA
for the period of three (3) consecutive fiscal quarters ending on such
date times 1.3333."
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 $120,000,000 and the dollar figure "$125,000,000" in the
first sentence of Section 2.1 of the Credit Agreement is hereby replaced with
the dollar figure "$120,000,000".
(b) Section 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 $115,000,000 at any time on or
subsequent to the Fifth Amendment Effective Date"
SECTION 1.3 AMENDMENT TO SECTION 3.1(a) OF THE CREDIT AGREEMENT.
Section Section 3.1(a) of the Credit Agreement is hereby amended by
replacing the dollar figure in the eleventh line thereof with the dollar figure
"$7,500,000".
SECTION 1.4 AMENDMENT TO SECTION 5 OF THE CREDIT AGREEMENT. The
following new Section Section 5.22 is hereby added to the Credit Agreement:
"SECTION 5.22 YEAR 2000 PROBLEM. The Borrower has (i) reviewed
the areas within the Borrower's and its Subsidiaries' businesses and
operations which could be adversely affected by failure to become "Year
2000 Compliant" (i.e. that computer applications, imbedded microchips
and other systems used by the Borrower or any of its Subsidiaries, will
be able properly to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December
31, 1999), (ii) developed a reasonably detailed plan and timetable to
become Year 2000 Compliant in a timely manner, and (iii) committed
adequate resources to support the Year 2000 plan of the Borrower and
its Subsidiaries. Based upon such review, the Borrower reasonably
believes that the Borrower and its Subsidiaries will become "Year 2000
Compliant" in a timely manner except to the extent that failure to do
so will not have any materially adverse effect on the business or
financial condition of the Borrower or any of its Subsidiaries taken as
a whole."
SECTION 1.5 AMENDMENT TO SECTION 8.2 OF THE CREDIT AGREEMENT.
Notwithstanding anything to the contrary in Section 1.6 of the Fourth
Amendment, compliance with Section 8.2 of the Credit Agreement as in effect
prior to
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the effectiveness of this Amendment and as such Section 8.2 applies to the
fiscal quarter of the Borrower ending on or about June 30, 1999 is hereby
waived. Section 8.2 of the Credit Agreement is hereby replaced in its entirety
with the following new Section 8.2:
"SECTION 8.2 LEVERAGE RATIO.
(a) As of the end of the fiscal quarter of the Borrower ending
March 31, 2000, the ratio of (i) Funded Debt as at the end of such
quarter to (ii) the product of EBITDA for the period of three (3)
consecutive fiscal quarters ending on such date times 1.3333 shall not
exceed 5.50:1.00.
(b) As of the end of any fiscal quarter of the Borrower
commencing with the fiscal quarter ending June 30, 2000, the ratio of
(i) Funded Debt as at the end of such quarter to (ii) EBITDA for the
period of four (4) consecutive fiscal quarters ending on such date
(such ratio, measured at any time before or after June 30, 2000,
referred to herein as the "Leverage Ratio") shall not exceed the ratios
set forth in the table below opposite the period in which each such
fiscal quarter ends:
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Period: Ratio:
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April 1, 2000 - June 30, 2000 5.00:1
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July 1, 2000 - December 31, 2000 4.50:1
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January 1, 2001 - March 31, 2001 4.00:1
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April 1, 2001 - September 30, 2001 3.75:1
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October 1, 2001 and thereafter 3.25:1"
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SECTION 1.6 AMENDMENT TO SECTION 8.3 OF THE CREDIT AGREEMENT.
Notwithstanding anything to the contrary in Section 1.6 of the Fourth Amendment,
compliance with Section 8.3 of the Credit Agreement as in effect prior to the
effectiveness of this Amendment and as such Section 8.3 applies to the fiscal
quarter of the Borrower ending on or about June 30, 1999 is hereby waived.
Section 8.3 of the Credit Agreement is hereby replaced in its entirety with the
following new Section 8.3:
"SECTION 8.3 INTEREST COVERAGE RATIO.
As of the end of any fiscal quarter of the Borrower commencing
with the fiscal quarter ending September 30, 1999, the ratio of (i)
EBITDA minus Capital Expenditures for (A) the fiscal quarter ending
September 30, 1999, (B) the two fiscal quarters ending December 31,
1999, (C) the three consecutive
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fiscal quarters ending March 31, 2000 and (D) any period of four
consecutive fiscal quarters ending thereafter to (ii) Consolidated
Total Interest Expense for such period of one, two, three or four
consecutive fiscal quarters, as applicable, shall not be less than the
ratios set forth in the table below opposite the period in which such
period ends:
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Period: Ratio:
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July 1, 1999 - September 30, 1999 1.25:1
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October 1, 1999 - December 31, 1999 1.50:1
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January 1, 2000 - June 30, 2000 1.75:1
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July 1, 2000 and thereafter 2.00:1"
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SECTION 1.7 AMENDMENT TO SECTION 8.5 OF THE CREDIT AGREEMENT. Section
8.5 of the Credit Agreement is hereby replaced in its entirety with the
following new Section 8.5:
"SECTION 8.5 CAPITAL EXPENDITURES. The Borrower will not make,
or permit any Subsidiary to made, in the aggregate, Capital
Expenditures in excess of (a) $1,250,000 in any fiscal quarter
beginning with the fiscal quarter ending on September 30, 1999 and (b)
$4,400,000 in any period of four consecutive quarters beginning with
the period of four consecutive fiscal quarters of the Borrower and its
Subsidiaries ending on June 30, 2000."
SECTION 1.8 AMENDMENT TO SECTION 8.6 OF THE CREDIT AGREEMENT.
Notwithstanding anything to the contrary in Section 1.6 of the Fourth Amendment,
compliance with Section 8.6 of the Credit Agreement as in effect prior to the
effectiveness of this Amendment and as such Section 8.6 applies to the fiscal
quarter of the Borrower ending on or about June 30, 1999 is hereby waived.
Section 8.6 of the Credit Agreement is hereby replaced in its entirety with the
following new Section 8.6:
"SECTION 8.6 MINIMUM QUARTERLY EBITDA. The Borrower shall not
permit EBITDA to be less than (A) $3,800,000 during the fiscal quarter
ending on September 30, 1999, (B) $4,850,000 during the fiscal quarter
ending on December 31, 1999 and (C) $5,000,000 during any fiscal
quarter ending on or after March 31, 2000."
SECTION 1.9 AMENDMENT TO SECTION 12.1 OF THE CREDIT AGREEMENT. Section
12.1 of the Credit Agreement is hereby amended by replacing the period at the
end of Section 12.1(l) with the text "; and" and by inserting the following new
Section 12.1(m):
"(m) if the Agent shall fail, in its reasonable judgment, to
be satisfied with its commercial finance exam of the Borrower completed
on or prior to
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September 15, 1999, provided, however, that if the commercial finance
exam of the Borrower is not completed on or prior to September 15,
1999, it shall be an Event of Default if the Agent shall fail, in its
reasonable judgment, to be satisfied with its commercial finance exam
of the Borrower completed on or about September 29, 1999."
SECTION 2. AMENDMENT FEES. The Borrower hereby agrees to pay to the
Agent, for the account of each Bank which executes this Amendment, an amount
equal to 0.30% of the Commitment of each such Bank as such Commitment is in
effect after giving effect to this Amendment (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.
3.3 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.
3.4 AMENDMENT FEES. The Amendment Fees shall have been paid to
the Agent for the account of each Banks which executes this Amendment.
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.
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(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
as amended heretofore 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.
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.
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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 X. XXXXXXXXXX
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Name: Xxxx X. Xxxxxxxxxx
Title: Managing Director
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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/ XXXXX XXXXXX
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Name: Xxxxx Xxxxxx
Title: VP -- Director
