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FOURTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND LOAN DOCUMENTS
THIS FOURTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS
(this "Amendment"), dated as of November 5, 1999, is between NATIONAL BANK OF
CANADA, a Canadian chartered bank ("Lender"), and CET ENVIRONMENTAL SERVICES,
INC., a California corporation ("Borrower").
Recitals
A. Lender and Borrower entered into a Loan and Security Agreement dated
May 29, 1997, as amended by the first through thirteenth amendments (as
amended, the "Loan Agreement"). Defined terms used herein and not
defined herein shall have the meaning set forth in the Loan Agreement.
B. The Loans are secured by the Collateral.
C. Pursuant to a letter from Lender to Borrower dated September 21, 1999,
Lender notified Borrower of numerous Events of Default under the Loan
Agreement, and in connection therewith, Lender provided to Borrower a
forbearance letter dated September 23, 1999 as amended by a letter
dated October 5, 1999 from Lender to Borrower (as amended, the
"Forbearance Letter").
D. The Borrower and Lender desire to enter into this Amendment in order to
make certain other revisions to the Loan Agreement.
Agreement
IN CONSIDERATION of the foregoing and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
1. Maximum Loan Availability. Without in any way limiting the rights of
the Lender under this Agreement or the Forbearance Letter, or the sole
discretion of Lender to elect whether or not to make Advances, Section
1(u) of the Loan Agreement is hereby amended and restated in its
entirety to read as follows:
"Maximum Loan Availability" shall mean (1) the lesser of (a)
$3,500,000 minus the Required Reductions or (b) the Revolving
Loan Availability minus (2) the sum of (a) the outstanding
principal amount of all Equipment Loans, (b) the aggregate
undrawn face amount of all Letters of Credit and (c) the
aggregate amount of all Revolver Reductions.
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On each date that the Maximum Loan Availability is determined,
Borrower shall pay to Lender the amount by which the
outstanding amount of the Revolving Loan plus the aggregate
undrawn face amount of all Letters of Credits exceeds the
revised Maximum Loan Availability.
2. Additional Definitions. Section 1 of the Loan Agreement is hereby
further amended by adding a new section 1(hh), 1(ii), and 1(jj) to read
as follows:
1(hh) "Required Reductions" shall mean the greater of (a)
the Set Reduction Amount, or (b) the Collection
Reduction Amount.
1(ii) "Set Reduction Amount" shall mean the following
amounts for the periods opposite such figures:
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November 5, 1999 through $0
November 14, 1999
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November 15, 1999 through $500,000
November 28, 1999
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November 29, 1999 through $1,250,000
December 11, 1999
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December 12, 1999 through $2,000,000
December 25, 1999
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December 26, 1999 through $2,750,000
January 5, 2000
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1(jj) "Collection Reduction Amount" shall mean an amount
equal to 15% of the amount of Accounts collected or
payments received on Accounts from November 5, 1999
up to and including the business day prior to the
date such amount is determined.
3. Collateral Reports Section 9(a) of the Loan Agreement is hereby amended
by amending and restating the first sentence of such section to read as
follows:
Borrower shall deliver to Lender, (a) from November 5, 1999
through November 30, 1999, on a bi-weekly basis, on Tuesday
and Friday of each week, for the period from the prior
reporting date to the day prior to the current reporting date,
and (b) from December 1, 1999 and thereafter, on a daily
basis, for the prior day, a collateral report (the "Collateral
Report") describing the aging of the Accounts, all Eligible
Accounts created or acquired by Borrower subsequent to
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the immediately preceding Collateral Report, information in
connection with any Account which has ceased to be an Eligible
Account since the most recent Collateral Report, and
information on all amounts collected by Borrower on Accounts
subsequent to the immediately preceding Collateral Report;
provided that Lender reserves the right to require such report
on a more frequent basis at any time requested by Lender.
4. Additional Covenants of Borrower. Section 12 of the Loan Agreement is
hereby amended by amending and restating Section 12(v) in its entirety
to read as follows:
(v) Immediately upon the receipt of any proceeds derived from the
sale of any assets of Borrower other than Inventory, Borrower
shall pay such proceeds to Lender to be applied first to any
unpaid principal or interest (in such order as Lender shall
determine) on the Term Loan, and, upon full satisfaction of
the Term Loan, to be applied to the Revolving Loan as
permanent reductions ("Revolver Reductions") to the Maximum
Loan Availability. Such Revolver Reductions shall be in
addition to the other scheduled reductions described in
Section 1(u) above. Notwithstanding the foregoing, Borrower
shall pay all outstanding amounts due under the Term Loan on
or before November 22, 1999, regardless of whether Borrower
receives adequate proceeds from the sale of assets to do so.
5. Loan Documents.
a. Lender and Borrower agree that any and all notes or other
documents executed in connection with the Loans (collectively,
the "Loan Documents") are hereby amended to reflect the
amendments set forth herein and that no further amendments to
any Loan Documents are required to reflect the foregoing.
b. All references in any document to the Loan Agreement or any
other Loan Document shall refer to the Loan Agreement or such
Loan Document as amended pursuant to this Amendment.
6. Representations and Warranties. Borrower hereby certifies to the Lender
that as of the date of this Amendment (taking into consideration the
transactions contemplated by this Amendment), all of Borrower's
representations and warranties contained in the Loan Agreement and all
Loan Documents are true, accurate and complete in all material
respects, and no Event of Default (other than as set forth in the
Forbearance Letter) or event that with notice or the passage of time or
both would constitute an Event of Default has occurred under the Loan
Agreement or any Loan Document. Without limiting the generality of the
foregoing, Borrower represents and warrants that the execution and
delivery of this Amendment has been authorized by all necessary action
on the part of Borrower, that the person executing this Amendment on
behalf of Borrower is duly
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authorized to do so and that this Amendment constitutes the legal,
valid, binding and enforceable obligation of Borrower.
7. Additional Documents. Borrower shall execute and deliver to Lender at
any time and from time to time such additional amendments to the Loan
Agreement and the Loan Documents as the Lender may request to confirm
and carry out the transactions contemplated hereby or to confirm,
correct and clarify the security for the Loan.
8. Continuation of the Loan Agreement, Etc. Except as specified in this
Amendment, the provisions of the Loan Agreement and the Loan Documents
(as previously amended) shall remain in full force and effect, and if
there is a conflict between the terms of this Amendment and those of
the Loan Agreement or the Loan Documents (as previously amended), the
terms of this Amendment shall control.
9. Miscellaneous.
a. This Amendment shall be governed by and construed under the
laws of the State of Colorado and shall be binding upon and
inure to the benefit of the parties hereto and their
successors and permissible assigns.
b. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original and all of which
together shall constitute one instrument.
c. This Amendment and all documents to be executed and delivered
hereunder may be delivered in the form of a facsimile copy,
subsequently confirmed by delivery of the originally executed
document.
d. This Amendment constitutes the entire agreement between
Borrower and the Lender concerning the subject matter of this
Amendment. This Amendment may not be amended or modified
orally, but only by a written agreement executed by Borrower
and the Lender and designated as an amendment or modification
of the Loan Agreement as amended by this Amendment.
e. Execution of this Amendment is not intended to and shall not
constitute a waiver by the Lender of any Event of Default or
event that with notice or the passage of time, or both, would
constitute an Event of Default, including, without limitation,
any Events of Default set forth in the Forbearance Letter.
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EXECUTED as of the date first set forth above.
BORROWER:
CET ENVIRONMENTAL SERVICES,
INC., a California corporation
By:
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Name:
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Title:
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LENDER:
NATIONAL BANK OF CANADA, a
Canadian chartered bank
By:
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Xxxxx X. Xxxx
Vice President
By:
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Name:
----------------------
Title:
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