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EXHIBIT 10.6
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (hereinafter called this "Amendment")
is entered into on August 15, 1996, to be effective as of August 15, 1996,
between ▇▇▇▇▇▇ Industries, Inc., a Nevada corporation (the "Borrower") and
▇▇▇▇▇ Fargo Bank (Texas), National Association, formerly First Interstate Bank
of Texas, N.A. (the "Bank").
W I T N E S S E T H:
WHEREAS, the Borrower and First Interstate Bank of Texas, N.A. entered
into a Credit Agreement dated as of October 20, 1995 (hereinafter called the
"Agreement"), whereby, upon the terms and conditions therein stated, the Bank
agreed to make available to the Borrower a credit facility upon the terms and
conditions set forth in the Agreement; and
WHEREAS, the Borrower has dissolved or sold ▇▇▇▇▇▇-Process Systems, Inc.
and U.S. Turbine, Inc., each of which was a subsidiary of Borrower and each of
which guaranteed the payment of the credit facility represented by the
Agreement; and
WHEREAS, the Borrower has requested that the Bank agree to certain
amendments to the Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, the parties to this Amendment hereby agree as
follows:
SECTION 1. Terms Defined in Agreement. An used in this Amendment,
except as may otherwise be provided herein, all capitalized terms which are
defined in the Agreement shall have the same meaning herein as therein, all of
such terms and their definitions being incorporated herein by reference.
SECTION 2. Amendments to Agreement. Subject to the conditions precedent
set forth in Section 3 hereof, the Agreement is hereby amended as follows:
(a) The definition of "Stated Maturity Date" is hereby deleted from
Section 8.1 of the Agreement and the following definition is substituted in
lieu thereof:
"STATED MATURITY DATE" shall mean August 15, 1998.
(b) The definition of "Termination Date" is hereby deleted from Section
8.1 of the Agreement and the following definition is substituted in lieu
thereof:
"TERMINATION DATE" shall mean August 15, 1998.
SECTION 3. Conditions of Effectiveness.
(a) The Bank has relied upon the representations and warranties
contained in this Amendment in agreeing to the amendments to the Agreement set
forth herein and the amendments to the Agreement set forth herein are
conditioned upon and subject to the accuracy of each and every representation
and warranty of the Borrower made or referred to herein, and performance by the
Borrower of its obligations to be performed under the Agreement on or before
the date of this Amendment (except to the extent amended herein).
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(b) The amendments to the Agreement set forth herein are further
conditioned upon receipt by the Bank of
(i) A fully executed Amended and Restated Revolving Promissory Note
in the form attached hereto as Exhibit "A";
(ii) certificates of the Secretary or Assistant Secretary of the
Borrower and each Guarantor setting forth resolutions of its
respective Board of Directors in form and substance reasonably
satisfactory to the Bank with respect to this Amendment.
SECTION 4. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Bank, with full knowledge that the Bank is
relying on the following representations and warranties in executing this
Amendment, as follows:
(a) The Borrower has corporate power and authority to execute,
deliver and perform this Amendment, and all corporate action on the part of the
Borrower requisite for the due execution, delivery and performance of this
Amendment has been duly and effectively taken.
(b) The Agreement as amended by this Amendment and the Loan Documents
and each and every other document executed and delivered in connection with
this Amendment to which the Borrower or any of its Subsidiaries is a party
constitute the legal, valid and binding obligations of the Borrower and any of
its Subsidiaries to the extent it is a party thereto, enforceable against such
Person in accordance with their respective terms.
(c) This Amendment does not and will not violate any provisions of
the articles or certificate of incorporation or bylaws of the Borrower, or any
contract, agreement, instrument or requirement of any Governmental Authority to
which the Borrower is subject. The Borrower's execution of this Amendment will
not result in the creation or imposition of any lien upon any properties of the
Borrower, other than those permitted by the Agreement and this Amendment.
(d) The Borrower's execution, delivery and performance of this
Amendment do not require the consent or approval of any other Person,
including, without limitation, any regulatory authority or governmental body of
the United States of America or any state thereof or any political subdivision
of the United States of America or any state thereof.
(e) The Borrower has performed and complied with all agreements and
conditions contained in the Agreement required to be performed or complied with
by the Borrower prior to or at the time of delivery of this Amendment.
(f) After giving effect to this Amendment, no Default or Event of
Default exists and all of the representations and warranties contained in the
Agreement and all instruments and documents executed pursuant thereto or
contemplated thereby are true and correct in all material respects on and as of
this date.
(g) Nothing in this Section 4 of this Amendment is intended to amend
any of the representations or warranties contained in the Agreement or of the
Loan Documents to which the Borrower or any of the Subsidiaries is a party.
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SECTION 5. Reference to and Effect on the Agreement.
(a) Upon the effectiveness of Sections 1 and 2 hereof, on and after
the date hereof, each reference in the Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import, shall mean and be a
reference to the Agreement as amended hereby.
(b) Except as specifically amended by this Amendment, the Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
SECTION 6. No Waiver. Except as specifically amended hereby, the
Borrower agrees that no Event of Default and no Default has been waived or
remedied by the execution of this Amendment by the Bank and any such Default or
Event or Default heretofore arising and currently continuing shall continue
after the execution and delivery hereof.
SECTION 7. Extent of Amendments. Except as otherwise expressly provided
herein, the Agreement and the other Loan Documents are not amended, modified or
affected by this Amendment. The Borrower ratifies and confirms that (i) except
as expressly amended hereby, all of the terms, conditions, covenants,
representations, warranties and all other provisions of the Agreement remain in
full force and effect and (ii) each of the other Loan Documents are and remain
in full force and effect in accordance with their respective terms.
SECTION 8. WAIVERS AND RELEASE OF CLAIMS. As additional consideration
to the execution, delivery, and performance of this Amendment by the parties
hereto and to induce the Bank to enter into this Amendment, the Borrower
represents and warrants that (a) the Borrower knows of no defenses,
counterclaims or rights of setoff to the payment of any indebtedness of the
Borrower to the Bank, and (b) the Borrower for itself, its Subsidiaries, their
respective representatives, agents, officers, directors, employees,
shareholders, and successors and assigns, hereby fully, finally, completely,
generally and forever releases, discharges, acquits, and relinquishes the Bank
and their respective representatives, agents, officers, directors, employees,
shareholders, and successors and assigns, from any and all claims, actions,
demands, and causes of action of whatever kind or character, whether joint or
several, whether known or unknown, for any and all injuries, harm, damages,
penalties, costs, losses, expenses, attorneys' fees, and/or liability
whatsoever and whenever incurred or suffered by any of them prior to the
execution of this Amendment. Notwithstanding any provision of this Amendment,
the Agreement or any other Loan Document, this Section 8 shall remain in full
force and effect and shall survive the delivery of the Notes, this Amendment
and the other Loan Documents and the making, extension, renewal, modification,
amendment or restatement of any thereof.
SECTION 9. Guaranties. Each of the Guarantors hereby consents to and
accepts the terms and conditions of this Amendment, agrees to be bound by the
terms and conditions hereof and ratifies and confirms that its continuing
Guaranty Agreement, executed and delivered to the Bank on October 20, 1995,
guaranteeing payment of the obligations, is and remains in full force and
effect and secures payment of, among other things, the Note as renewed,
rearranged and extended hereby.
SECTION 10. Execution and Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which taken together shall constitute but one and the
same instrument. Delivery of an executed counterpart of the signature page of
this Amendment by facsimile shall be equally as effective as delivery of a
manually executed counterpart of this Amendment.
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SECTION 11. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Texas.
SECTION 12. Headings. Section headings in this Amendment are included
herein for convenience and reference only and shall not constitute a part of
this Amendment for any other purpose.
SECTION 13. Arbitration Program. The parties agree to be bound by the
terms and provisions of the current Arbitration Program of First Interstate
Bank of Texas, N.A., which is incorporated by reference herein and is
acknowledged as received by the parties pursuant to which any and all disputes
arising hereunder, under the Agreement, under any of the other Loan Documents,
or under any of the documents and instruments contemplated thereby, or
pertaining hereto or thereto, shall be resolved by mandatory binding
arbitration upon the request of any party.
SECTION 14. NO ORAL AGREEMENTS. THE AGREEMENT (AS AMENDED BY THIS
AMENDMENT) AND THE OTHER LOAN DOCUMENTS, REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized.
BORROWER:
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▇▇▇▇▇▇ INDUSTRIES, INC
By:
/s/ ▇. ▇. ▇▇▇▇▇
---------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President
BANK:
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▇▇▇▇▇ FARGO BANK (TEXAS), NATIONAL ASSOCIATION
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CONSENTED AND AGREED TO THIS 3 day of September, 1996:
▇▇▇▇▇▇ ELECTRICAL MANUFACTURING COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇
---------------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President
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DELTA-UNIBUS CORP. ▇▇▇▇▇▇-▇▇▇▇ COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇. ▇. ▇▇▇▇▇ Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President
UNIBUS, INC. TRACTION POWER SYSTEMS, INC
By: /s/ ▇. ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇. ▇. ▇▇▇▇▇ Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President
▇▇▇▇▇▇-INNOVATIVE BREAKER TRANSDYN CONTROLS, INC.
TECHNOLOGIES, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇
------------------------------ ------------------------------
Name: ▇. ▇. ▇▇▇▇▇ Name: ▇. ▇. ▇▇▇▇▇
Title: Vice President Title: Vice President
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FIRST AMENDED AND RESTATED REVOLVING PROMISSORY NOTE
$15,000,000.00 AUGUST 15, 1996
FOR VALUE RECEIVED, after date, without grace, in the manner, on the dates and
in the amounts so herein stipulated, the undersigned, ▇▇▇▇▇▇ INDUSTRIES, INC.,
a Nevada corporation, acting by and through its duly authorized officer,
("Borrower") , PROMISES TO PAY TO THE ORDER OF ▇▇▇▇▇ FARGO BANK (TEXAS),
NATIONAL ASSOCIATION, FORMERLY FIRST INTERSTATE BANK OF TEXAS, N.A. ("Lender"),
in Houston, ▇▇▇▇▇▇ County, Texas, the sum of FIFTEEN MILLION AND N0/100 DOLLARS
($15,000,000.00) or, if less, the aggregate unpaid principal amount of advances
made by Lender to Borrower pursuant to this Note, in lawful money of the United
States of America, which shall be legal tender in payment of all debts and
dues, public and private, at the time of payment, and to pay interest on the
unpaid principal amount from date until maturity at a rate equal to the Stated
Rate (as hereinafter defined), not to exceed the maximum non-usurious interest
rate permitted by applicable law from time to time in effect as such law may be
interpreted, amended, revised, supplemented or enacted ("Maximum Rate"),
provided that if at any time the Stated Rate exceeds the Maximum Rate then
interest hereon shall accrue at the Maximum Rate. In the event the Stated Rate
subsequently decreases to a level which would be less than the Maximum Rate or
if the Maximum Rate applicable to this Note should subsequently be changed,
then interest hereon shall accrue at a rate equal to the applicable Maximum
Rate until the aggregate amount of interest so accrued equals the aggregate
amount of interest which would have accrued at the Stated Rate without regard
to any usury limit, at which time interest hereon shall again accrue at the
Stated Rate. As used herein, the Stated Rate shall mean, in the absence of
Borrower's exercise of a Eurodollar Rate Election (as defined in the Credit
Agreement) , the Prime Rate plus the applicable Base Rate Margin as set forth
below:
RATIO OF-FUNDED INDEBTEDNESS TO BASE RATE MARGIN
EBITDA FOR THE PRECEDING FOUR (4)
FISCAL QUARTERS
less than 1.75 to 1.00 0%
1.75 to 1.00 or greater 0.25%
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In the event the Borrower exercises its right to select the Eurodollar Rate (as
defined in the Credit Agreement) , (i) such selection shall be in accordance
with the provisions of the Credit Agreement and (ii) the Stated Rate as to the
Eurodollar Rate Advance (as defined in the Credit Agreement) shall be the
Eurodollar Rate plus the applicable Libor Margin as set forth below:
RATIO OF-FUNDED INDEBTEDNESS TO LIBOR MARGIN
EBITDA FOR THE PRECEDING FOUR (4)
FISCAL QUARTERS
less than or equal to 1.25 to 1.00 1.00%
greater than 1.25 to 1.00,
but less than 1.50 to 1.00 1.25%
equal to or greater than 1.50 to 1.00,
but less than 1.75 to 1.00 1.50%
equal to or greater than 1.75 to 1.00,
but less than 2.00 to 1.00 1.75%
equal to or greater than 2.00 to 1.00 2.25%
The adjustment in the applicable Base Rate Margin and/or Libor Margin of this
Note shall be effective on the first of the month following receipt of
quarterly financial statements pursuant to Section 3.1 and Compliance
Certificate pursuant to Section 5.10 of the Credit Agreement indicating the
Ratio of Funded Indebtedness to EBITDA for the preceding four (4) fiscal
quarters (as such terms are defined in the Credit Agreement), provided that if,
for any reason, the applicable financial statements are delivered after the 1st
of the month approximately sixty (60) days following the end of the fiscal
quarter, the adjustment in Base Rate Margin or Libor Margin shall be
retroactive to the 1st of such month based upon the financial statements when
delivered.
Interest shall be due and payable monthly as it accrues on the first day of
each and every month, beginning November 1, 1995, and continuing regularly
thereafter until August 15, 1998, when the entire balance of principal and
accrued interest shall be due and payable.
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This Note is the Revolving Note referred to in, is subject to, and is entitled
to the benefits of, the Credit Agreement dated as of October 20, 1995, as
amended by a First Amendment to Credit Agreement, dated of even date herewith,
between Borrower and Lender, as that Credit Agreement, as amended, may be
further amended, modified or supplemented from time to time (the "Credit
Agreement"). The Credit Agreement contains, among other things, provisions for
the acceleration of the maturity hereof upon the occurrence of certain stated
events. All capitalized terms used herein which are defined in the Credit
Agreement shall have the same meaning as in the Credit Agreement.
It is agreed that time is of the essence of this agreement. Upon the
occurrence of an Event of Default, Lender may accelerate and declare this Note
immediately due and payable as provided in the Credit Agreement. Any failure
to exercise this option shall not constitute a waiver by Lender of the right to
exercise the same at any other time.
Upon the occurrence of an Event of Default under Section 6.1 of the Credit
Agreement or in the event this Note is declared due interest shall accrue in
accordance with the provisions of Section 1.9 of the Credit Agreement, but in
no event to exceed the Maximum Rate.
Borrower hereby agrees to pay all expenses incurred, including reasonable
attorneys' fees, all of which shall become a part of the principal hereof, if
this Note is placed in the hands of an attorney for collection or if collected
by suit or through any probate, bankruptcy or any other legal proceedings.
Interest charges will be calculated on amounts advanced hereunder on the actual
number of days these amounts are outstanding in accordance with the Credit
Agreement. It is the intention of the parties hereto to comply with all
applicable usury laws; accordingly, it is agreed that notwithstanding any
provision to the contrary in this Note, or in any of the documents securing
payment hereof or otherwise relating hereto, no such provision shall require
the payment or permit the collection of interest in excess of the Maximum Rate.
If any excess of interest in such respect is provided for, or shall be
adjudicated to be so provided for, in this Note or in any of the documents
securing payment hereof or otherwise relating hereto, then in such event (1)
the provisions of this paragraph shall govern and control, (2) neither
Borrower, endorsers or guarantors, nor their heirs, legal representatives,
successors or assigns nor any other party liable for the payment hereof, shall
be obligated to pay the amount of such interest to the extent that it is in
excess of the Maximum Rate, (3) any such excess which may have been collected
shall be either applied as a credit against the then unpaid principal amount
hereof or refunded to Borrower, and (4) the provisions of this Note and any
documents securing payment of this Note shall be automatically reformed so that
the effective rate of interest shall be reduced to the Maximum Rate. For the
purpose of determining the Maximum Rate, all interest payments with respect to
this Note shall be amortized, prorated and spread throughout the full term of
the Note so that the effective rate of interest on account of this Note is
uniform throughout the term hereof.
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Borrower agrees that the Maximum Rate to be charged or collected pursuant to
this Note shall be the applicable indicated rate ceiling as defined in TEX.
REV. CIV. STAT. ▇▇▇. Art. 5069-1.04, provided that Lender may rely on other
applicable laws, including without limitation laws of the United States, for
calculation of the Maximum Rate if the application thereof results in a greater
Maximum Rate. Except as provided above, the provisions of this Note shall be
governed by the laws of the State of Texas.
Each maker, surety, guarantor and endorser (i) waives demand, grace, notice,
presentment for payment, notice of intention to accelerate the maturity hereof,
notice of acceleration of the maturity hereof and protest, (ii) agrees that
this Note and the liens securing its payment may be renewed, and the time of
payment extended from time to time, without notice and without releasing any of
the foregoing, and (iii) agrees that without notice or consent from any maker,
surety, guarantor, or endorser, Lender may release any collateral which may
from time to time be pledged to secure repayment of this Note, or may release
any party who might be liable for this Note.
Subject to the provisions of the Credit Agreement, Borrower may prepay this
Note, in whole or in part, at any time prior to maturity without penalty, and
interest shall cease on any amount prepaid.
As used in this Note, the term "Prime Rate" shall mean the variable rate of
interest announced by Lender from time to time as its prime rate of interest
and, without notice to the maker of this Note or any other person, such rate of
interest shall change as and when changes in that prime rate of interest are
announced. The Prime Rate is set by Lender as a general reference rate of
interest, taking into account such factors as Lender may deem appropriate, it
being understood that many of Lender's commercial or other loans are priced in
relation to such rate, that it is not necessarily the lowest or best rate of
interest actually charged on any loan, and that Lender may make various
commercial or other loans at rates of interest having no relationship to the
Prime Rate. If at any time the "Prime Rate" of ▇▇▇▇▇ Fargo Bank (Texas),
National Association, formerly First Interstate Bank of Texas, N.A. is no
longer available, then the owner of this Note ("Owner") will designate a
different "Prime Rate" as announced by a national banking association of
owner's choice.
The principal of this Note represents funds which Lender will advance to
Borrower from time to time upon request of Borrower. Any part of the principal
may be repaid by Borrower and thereafter reborrowed, provided the outstanding
principal amount of this Note shall never exceed the face amount of this Note.
Each advance shall constitute a part of the principal hereof and shall bear
interest from the date of the advance. The provisions of TEX. REV. CIV.
STAT. ▇▇▇. Art. 5069-15.01, et seq, as may be amended, shall not apply to
this Note or to any of the security documents executed in connection with this
Note.
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This First Amended and Restated Revolving Promissory Note is given in renewal
and extension and not in novation of the Revolving Promissory Note dated
October 20, 1995, in the amont of $15,000,000.00 executed by Borrower payable
to First Interstate Bank of Texas, N.A.
Borrower represents and warrants that this loan is for business, commercial,
investment or similar purposes and not primarily for personal, family,
household or agricultural use, as such terms are used in Chapter One of the
Texas Credit Code.
▇▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇. ▇. ▇▇▇▇▇
--------------------------------
Name: ▇. ▇. ▇▇▇▇▇
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Title: Vice President
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"BORROWER"
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