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SIXTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND LOAN DOCUMENTS
THIS SIXTEENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS (this
"Amendment"), dated as of December 29, 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 fifteenth amendments (as
amended, the "Loan Agreement"). Defined terms used herein and not
defined herein shall have the meaning set forth in the Loan Agreement
(as amended).
B. The Loans are secured by the Collateral.
C. Under the Fourteenth and Fifteenth Amendments to Loan Agreement,
Borrower was required to make a payment on December 26, 1999 in
connection with a permanent reduction in the Maximum Loan Availability.
Borrower has failed to make such payment and such failure constitutes
an Event of Default (the "Payment Default").
E. Borrower has requested that Lender waive the Payment Default and modify
the Set Reduction Amount and extend the Maturity Date and Lender has
agreed to do so subject to the terms and conditions set forth herein.
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. Waiver of Payment Default. Subject to Borrower's performance of all of
the obligations hereunder and under the Loan Agreement, including
without limitation, the payment of all amounts due under the Loan
Agreement, including without limitation the amounts described in
paragraph 2(c) below, Lender agrees to waive the Payment Default; on
the conditions that: (a) if Borrower fails to perform any of its
obligations, Lender's waiver shall be null and void and of no force and
effect whatsoever; (b) Lender is not waiving any other defaults or
Events of Default that may have occurred or may hereinafter occur, and
(c) Lender's waiver of the Payment Default or any other defaults or
failure to or delay in exercising any rights or remedies shall not be
deemed a waiver of any subsequent Event of Default or a waiver of its
right to execute its rights or remedies at any time.
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2. Loan Amount Modification.
(a) Section 1 of the Loan Agreement is hereby amended by amending and
restating Section 1(u) of the Loan Agreement to read as follows:
1(u) "Maximum Loan Availability" shall mean the lesser of
(a) $l,500,000 minus the Required Reductions or (b)
the Revolving Loan Availability, minus (a) the
aggregate undrawn face amount of all Letters of
Credit and (b) the aggregate amount of all Revolver
Reductions.
(b) Section 1 of the Loan Agreement is hereby amended by amending and
restating Section 1(hh) of the Loan Agreement (added pursuant to the
Fourteenth Amendment) to read as follows:
1(hh) "Required Reductions" shall mean the sum of (a) the
Set Reduction Amount, plus (b) the Collection
Reduction Amount.
(c) Section 1 of the Loan Agreement is hereby further amended by
amending and restating Section 1 (ii) of the Loan Agreement (added
pursuant to the Fourteenth Amendment) to read as follows:
1(ii) "Set Reduction Amount" shall mean the following
amounts commencing on the initial dates and
continuing during the periods opposite such figures:
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December 29, 1999 through $250,000
January 6, 2000
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January 7, 2000 through $750,000
January 13, 2000
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January 14, 2000 through $1,000,000
January 20, 2000
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January 21, 2000 through $1,300,000
January 27, 2000
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(c) Section 1 of the Loan Agreement is hereby further amended by
amending and restating Section 1(jj) of the Loan Agreement
(added pursuant to the Fourteenth Amendment) to read as
follows:
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1(jj) "Collection Reduction Amount" shall mean an amount
equal to 20% of the amount of Accounts collected or
payments received on Accounts from December 29, 1999
up to and including the business days prior to the
date such amount is determined.
(d) Borrower acknowledges that the purpose of the Required
Reductions and Revolving Reductions is to cause the Revolving
Loan to be fully repaid on or before January 28, 2000.
Accordingly, the definition of "Maturity Date" set forth in
Section 1(t) of the Loan Agreement is amended in its entity to
read as follows:
"Maturity Date" shall mean the earlier of (a) the date the
Liabilities are accelerated pursuant to Section 14 or (b)
January 28, 2000.
(c) Borrower acknowledges that on each date that there is a
decrease in the Maximum Loan Availability as a result of an
increase in the Set Reduction Amount, the Collection Reduction
Amount or the Revolver Reduction Amount, Borrower must repay
the amount by which the outstanding amount of the Revolving
Loan exceeds the revised Maximum Loan Availability, including
without limitation as a result of the increases in the Set
Reduction Amount which takes place on December 30, 1999,
January 7, 2000, January 14, 2000, and January 21, 2000, and
acknowledges that payments are due on such dates.
(d) Borrower agrees that the Borrower's failure to pay any amounts
due under the Loan Agreement, including without limitation,
any amounts described in paragraph 2(c) above shall constitute
an Event of Default under the Loan Agreement and Lender shall
be entitled to exercise all remedies in connection therewith.
3. Assignment of Claims. As a condition of Lender's waiver of the
Defaults, Borrower agrees, immediately upon request of Lender to
execute all assignments, confirmations and other agreements necessary
to comply with the Assignment of Claims Act with respect to Contract
numbers DACA45-97-D0022, F04699-D-0024, and F41624-97-D-8010 and any
other contracts requested by Lender.
4. 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.
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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.
5. Amendment Fee. As a condition to Lender's performing its obligations
under this Amendment, Borrower shall pay to Lender an amendment fee
equal to $15,000 payable immediately upon the execution of this
Amendment. Such amendment fee shall be fully earned as of the date
hereof, but $10,000 of such fee will be refunded to Borrower upon
payment in full of the Loan and all other amounts due Lender on or
prior to January 28, 2000.
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 the Defaults) 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 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.
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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 and supercedes the Forbearance Letter, which
Forbearance Letter is no longer of any force or effect. 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.
EXECUTED as of the date first set forth above.
BORROWER
CET ENVIRONMENTAL SERVICES,
INC., a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: CFO
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LENDER:
NATIONAL BANK OF CANADA, a
Canadian chartered bank
By:
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▇▇▇▇▇ ▇. ▇▇▇▇
Vice President
By:
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Name:
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Title:
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