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EXHIBIT 4.6
SEVENTH AMENDMENT
TO REVOLVING CREDIT AGREEMENT
This SEVENTH AMENDMENT TO REVOLVING CREDIT AGREEMENT is made and
entered into as of November 15, 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.
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 heretofore amended, the "Credit Agreement"),
pursuant to which the Banks have extended credit to the Borrower on the terms
set forth therein;
WHEREAS, the Borrower and the Guarantors have requested the Banks and
the Agent to amend certain provisions of the Credit Agreement; and
WHEREAS, the Banks and the Agent have agreed to honor such request upon
the terms and subject to the conditions contained herein;
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 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:
"September 1999 Special Charge. An amount equal to the lesser of (i)
the aggregate amount of any loss or losses on discontinued operations of any of
Trusco Tank, Inc., Reliable Steel, Inc., Xxxxxx Manufacturing Co., Inc. and the
HMT and BMT divisions of ITEQ Storage Systems, Inc. for the month of September,
1999, and for the fiscal quarter ended September 30, 1999, taken in accordance
with generally accepted accounting principles on account of the proposed sale or
sales of such businesses by the Borrower and its Subsidiaries and (ii)
$16,287,000. "
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"September 1999 Waiver. The Limited Waiver Regarding Disposition of
Certain Assets and Certain Financial Covenants dated as of September 30, 1999,
as modified prior to the Seventh Amendment Effective Date, among the Borrower,
the Guarantors, the Banks, the Documentation Agent and the Agent."
"Seventh Amendment. The Seventh Amendment to Revolving Credit Agreement
dated as of November 15, 1999, among the Borrower, the Guarantors, the Banks,
the Documentation Agent and the Agent."
"Seventh Amendment Effective Date. The date on which the conditions set
forth in Section 3 of the Seventh Amendment are satisfied."
(b) The definition of "Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization or EBITDA" in Section 1.1 is hereby amended by
adding, at the end of such definition, the following new sentence:
"Solely for the month of September, 1999, and for the fiscal
quarter ended September 30, 1999, the term includes an addition for an
amount equal to the September 1999 Special Charge to the extent that
the September 1999 Special Charge would have otherwise been deducted in
the computation of EBITDA for such periods."
(c) The definition of "Interest Period" in Section 1.1 is hereby
amended by inserting, after each of clauses (a) and (b), the following words:
"if made prior to November 10, 1999, or, if the Loan and
Letter of Credit Request is made on and after November 10, 1999, ending
one (1) month thereafter."
(d) The definition of "Net Worth" in Section 1.1 is hereby amended by
inserting the following sentence at the end of the definition:
"The term includes an addition for an amount equal to the
September 1999 Special Charge to the extent that the September 1999
Special Charge would have otherwise been deducted from stockholders'
equity in the computation of Net Worth."
SECTION 1.2 AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT. Section
2.1 is hereby amended as follows.
(a) The Total Commitment is permanently reduced to $115,000,000.
(b) The first dollar figure in the first sentence of Section 2.1 of the
Credit Agreement, is, on the date hereof, the sum of $118,221,980.97 after
taking into account adjustments for asset sales proceeds applied thereto under
the September 1999 Waiver (as defined in Section 1.1). Such dollar figure is
further reduced to $115,000,000.
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(c) The parties hereto acknowledge that the second dollar figure in the
first sentence of Section 2.1 of the Credit Agreement, is, on the date hereof,
the sum of $107,221,980.97, after taking into account adjustments for asset
sales proceeds applied thereto under the September 1999 Waiver (as defined in
Section 1.1).
SECTION 1.3 AMENDMENT TO SECTION 8.3 OF THE CREDIT AGREEMENT. Section
8.3 of the Credit Agreement is hereby amended by deleting the section in its
entirety and replacing it with the following section:
"SECTION 8.3 INTEREST COVERAGE RATIO. As of the end of any
fiscal quarter of the Borrower commencing with the fiscal quarter
ending December 31, 1999, the ratio of (i) EBITDA minus Capital
Expenditures for (A) the two fiscal quarters ending December 31, 1999,
(B) the three consecutive fiscal quarters ending March 31, 2000, and
(C) any period of four consecutive fiscal quarters ending thereafter to
(ii) Consolidated Total Interest Expense for such period of 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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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 1.4 AMENDMENT TO SECTION 8.4 OF THE CREDIT AGREEMENT. Section
8.4 of the Credit Agreement is hereby amended by inserting the following
sentence at the end of such section:
"For purposes of computing the foregoing ratio, there shall be
excluded from the computation of consolidated current liabilities, to
the extent otherwise included therein, (a) the amount of any the
Obligations and (b) any liabilities arising from the operations of the
Borrower and its Subsidiaries proposed to be discontinued, as referred
to in the definition of `September 1999 Special Charge,' and comprising
amounts included in the September 1999 Special Charge."
SECTION 1.5 AMENDMENT TO SECTION 8.6 OF THE CREDIT AGREEMENT Section
8.6 of the Credit Agreement is hereby amended by deleting the section in its
entirety and replacing it with the following section:
"SECTION 8.6 MINIMUM EBITDA REQUIREMENTS.
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(a) The Borrower shall not cause or permit EBITDA to be less
than (i) $4,850,000 for the fiscal quarter ending on December 31, 1999,
or (ii) $5,000,000 for any fiscal quarter ending on or after March 31,
2000. The minimum EBITDA covenant contained in the foregoing clause (i)
shall not be effective until February 1, 2000. The covenant shall
become effective, and EBITDA for such quarter shall be determined, on
February 1, 2000.
(b) The Borrower shall not cause or permit EBITDA, plus, for
any month, any noncash losses incurred in that month in connection with
the Clinton Sale, to be less than (i) $0 for the month of September
1999, (ii) $0 for the month of October 1999, (iii) $100,000 for the
month of November 1999 and (iv) $100,000 for the month of December
1999. The term "Clinton Sale," as used in Section 8.6(b) has the same
meaning in Section 8.6(b) as in the September 1999 Waiver.
(c) On or before November 25, 1999, the Borrower shall, in
accordance with Section 6.4(c) of the Credit Agreement, deliver a
Compliance Certificate demonstrating compliance with Section 8.6(b) as
it applies as of the end of October 1999. On or before December 25,
1999, the Borrower shall, in accordance with Section 6.4(c) of the
Credit Agreement, deliver a Compliance Certificate demonstrating
compliance with Section 8.6(b) as it applies as of the end of November
1999. On or before January 25, 2000, the Borrower shall, in accordance
with Section 6.4(c) of the Credit Agreement, deliver a Compliance
Certificate demonstrating compliance with Section 8.6(b) as it applies
as of the end of December 1999."
SECTION 1.6 AMENDMENT TO SECTION 8.7 OF THE CREDIT AGREEMENT Section
8.7 of the Credit Agreement is hereby amended by deleting the words "December
14, 1998" and replacing them with the words "February 1, 2000."
SECTION 2. AMENDMENT FEES. The Borrower hereby agrees to pay to the
Agent, for the account of each Bank that executes this Amendment, an amendment
fee equal to $25,000 (the "Amendment Fee"). The Amendment Fee shall be shared
pro rata by the Banks that execute this Amendment in accordance with their
Commitments. The Amendment Fee shall be nonrefundable and fully earned as of the
date hereof.
SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective as of November 15, 1999, subject to the satisfaction of the following
conditions on or prior to such date:
3.1 AMENDMENT. This Amendment shall have been duly executed
and delivered by the Borrower, the Guarantors, the Majority Banks and
the Agent.
3.2 AMENDMENT FEE, ETC. The Amendment Fee shall have been paid
to the Agent for the account of each of the Banks that executes this
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Amendment. The Borrower shall have paid all unpaid fees and expenses of
Xxxxxxx Xxxx LLP, the Agent's counsel, and of PricewaterhouseCoopers
LLP, financial consultant to the Agent's counsel, to the extent that
copies of invoices therefore have been presented to the Borrower.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:
SECTION 4.1 REPRESENTATIONS AND WARRANTIES IN CREDIT
AGREEMENT. Each of the representations and warranties of the Borrower
contained in the Credit Agreement as modified hereby or in any document
or instrument delivered pursuant to or in connection with the Credit
Agreement as modified 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.
SECTION 4.2 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. BANK GROUP FINANCIAL CONSULTANT. The Borrower and the
Guarantors acknowledge that, in connection with Xxxxxxx Xxxx LLP's
representation of the Agent on matters relating to the Credit Agreement and the
other Loan Documents, Xxxxxxx Xxxx LLP will continue to retain
PricewaterhouseCoopers LLP as a financial consultant and that, pursuant to
Section 15 of the Credit Agreement, the fees and expenses of
PricewaterhouseCoopers LLP shall be for the account of, and shall continue to be
paid by, the Borrower.
SECTION 6. RATIFICATION, ETC.
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(a) The provisions of Section 2.1 of the September 1999 Waiver (as
defined in Section 1.1) shall continue in full force and effect. The provisions
of Sections 2.2, 2.3 and 2.4 of the September 1999 Waiver are superseded by the
amendments contained in this Amendment.
(b) Except as expressly modified 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, together with 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 modified by this Amendment. This Amendment is a Loan Document.
SECTION 7. RELEASE. In order to induce the Agent and the Banks to enter
into this Amendment, each of the Borrower and the Guarantors acknowledges and
agrees that: (i) neither the Borrower nor any Guarantor has any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (ii) neither the Borrower nor any Guarantor has
any offset right, counterclaim or defense of any kind against any of their
respective obligations, indebtedness or liabilities to the Agent or any Bank;
and (iii) each of the Agent and the Banks has heretofore properly performed and
satisfied in a timely manner all of its obligations to the Borrower and each
Guarantor. The Borrower and the Guarantors wish to eliminate any possibility
that any past conditions, acts, omissions, events, circumstances or matters
would impair or otherwise adversely affect any of the Agent's and the Banks'
rights, interests, contracts, collateral security or remedies. Therefore, each
of the Borrower and the Guarantors unconditionally releases, waives and forever
discharges (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the Agent or any Bank to either the Borrower and any
Guarantor, except the obligations to be performed by the Agent or any Bank on or
after the date hereof as expressly stated in this Amendment, the Credit
Agreement and the other Loan Documents, and (B) all claims, offsets, causes of
action, suits or defenses of any kind whatsoever (if any), whether arising at
law or in equity, whether known or unknown, which the Borrower or any Guarantor
might otherwise have against the Agent, any Bank or any of its directors,
officers, employees or agents, in either case (A) or (B), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.
SECTION 8. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, which together shall constitute one instrument.
SECTION 9. 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
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SAID JURISDICTION, WITHOUT REFERENCE TO CONFLICTS OF LAW, AND IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT.
[Signature pages to 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/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chairman
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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/x/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.)
G.L.M. ACQUISITION, L.L.C.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: Chairman
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THE LENDERS:
BANKBOSTON, N.A.,
individually and as Agent
By: /s/ Xxxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice Pres.
DEUTSCHE BANK AG,
individually and as Documentation Agent
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
By: /s/ X. X. Xxxxxxx
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Name: X. X. Xxxxxxx
Title: Managing Director
BANK OF SCOTLAND
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Asst. Vice President
BANK ONE, TEXAS, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
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XXXXXXX (x/x/x Xxxxxx Xxxxxxx)
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
COMERICA BANK
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Vice President
THE FUJI BANK, LIMITED
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President & Manager
HIBERNIA NATIONAL BANK
By:
-------------------------------------
Name:
Title:
BANK OF AMERICA, N.A., (f/k/a NationsBank, N.A.)
By: /s/ Xxxxxxx X. Xxxxxxxxxxx, III
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxxx, III
Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Xxxxx Xxxxx XxXxxxxx
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Name: Xxxxx Xxxxx XxXxxxxx
Title: Vice President
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XXXXX XXXX TEXAS, NATIONAL ASSOCIATION
(f/k/a Texas Commerce Bank, N.A.)
By: /s/ Xxxxx X. Shilcutt
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Name: Xxxxx X. Shilcutt
Title: Vice President
