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EXHIBIT 10.37
NOTE RESTRUCTURING AMENDMENT
TO
NOTE PURCHASE AGREEMENTS
DATED AS OF NOVEMBER 12, 1996
SERV-TECH, INC.
$15,000,000
RESTATED SENIOR NOTES DUE JUNE 15, 2003
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TABLE OF CONTENTS
1. STATUS OF ORIGINAL NOTE PURCHASE AGREEMENT AND PRIOR AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . 3
2. ISSUANCE OF RESTATED SENIOR NOTES IN EXCHANGE FOR ORIGINAL SENIOR NOTES . . . . . . . . . . . . . . . . . . 3
2.1 ISSUANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 REPAYMENT OF PRINCIPAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 MATURITY DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 CALCULATION AND PAYMENT OF MAKE-WHOLE AMOUNT . . . . . . . . . . . . . . . . . . . . . . . 4
3. COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 COLLATERAL SECURITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 PRIORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 RESTRUCTURING FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5. ACKNOWLEDGMENT OF FULL PERFORMANCE; RELEASE; WAIVER OF EXISTING DEFAULTS . . . . . . . . . . . . . . . . . . 7
5.1 FULL PERFORMANCE BY NOTEHOLDERS AND RELEASE . . . . . . . . . . . . . . . . . . . . . . . . 7
5.2 WAIVER OF EXISTING KNOWN DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
6. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 TIME AND PLACE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 DOCUMENTS TO BE DELIVERED AT CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3 CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
7. WARRANTIES AND REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.1 RESTATEMENT OF CERTAIN WARRANTIES AND REPRESENTATIONS . . . . . . . . . . . . . . . . . . . 10
7.2 FINANCIAL STATEMENTS; INDEBTEDNESS; MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . 11
7.3 SUBSIDIARIES AND AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.4 FULL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.5 SALE OF RESTATED SENIOR NOTES IS LEGAL AND AUTHORIZED; OBLIGATIONS ARE ENFORCEABLE . . . . 13
7.6 GOVERNMENTAL CONSENT TO SALE OF RESTATED SENIOR NOTES . . . . . . . . . . . . . . . . . . . 13
7.7 NO DEFAULT AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8. REGISTRATION; EXCHANGE; SUBSTITUTION OF RESTATED SENIOR NOTES . . . . . . . . . . . . . . . . . . . . . . . 13
9. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.1 PRIOR COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.2 CONSOLIDATED NET WORTH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.3 FIXED CHARGE COVERAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.4 LEVERAGE RATIO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.5 FUNDED DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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9.6 RESTRICTED SUBSIDIARY INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
9.7 LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.8 RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . 19
9.9 MERGER, CONSOLIDATION, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.10 TRANSFER OF PROPERTY, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.11 TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.12 CONSOLIDATED EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.13 CONSOLIDATED CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10. INFORMATION AND CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
10.1 ADDITIONAL FINANCIAL AND BUSINESS INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 23
11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
11.1 NATURE OF EVENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
12. TERMS DEFINED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.1 RESTRICTED INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.2 CONSOLIDATED EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.3 CONSOLIDATED CAPITAL EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.4 ▇.▇. ▇▇▇▇▇▇▇▇ NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Exhibits
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Exhibit A - Form of Restated Senior Note
Exhibit B - Property to be Encumbered
Exhibit C - Collateral Documentation List
Exhibit D - Schedule of Restated Senior Notes with Payees
Exhibit E - Form of Closing Opinion from Company's Counsel
Exhibit F - Secretary's Certificate with
- Resolutions
- Amendments to Articles
- Amendments to Bylaws
- Incumbency
Exhibit G - Officer's Closing Certificate
Exhibit H - List of Affiliates for which Good Standing Certificates are Delivered
Annexes
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Annex 1 - Financial Statements
Annex 2 - Indebtedness of Company and Restricted Subsidiaries
Annex 3 - Subsidiaries and Affiliates
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NOTE RESTRUCTURING AMENDMENT
This Note Restructuring Amendment to Note Purchase Agreements (this
"Amendment") is made and entered into as of the 12th of November, 1996, by and
between SERV-TECH, INC. (the "Company") and PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY, TMG LIFE INSURANCE COMPANY, THE SECURITY MUTUAL LIFE INSURANCE
COMPANY, and BERKSHIRE LIFE INSURANCE COMPANY ("Noteholders"), purchasers of
the Company's $15,000,000 of 8.41% Senior Notes due June 15, 2003 (the
"Original Senior Notes") pursuant to certain Note Purchase Agreements dated as
of June 1, 1993 between the Company and each Noteholder (the "Original Note
Purchase Agreements"), as amended by First, Second, Third, Fourth, Fifth and
Sixth Amendments to Note Purchase Agreements, executed as of March 22, 1995,
August 8, 1995, November 13, 1995, March 11, 1996, May, 1996 and August 14,
1996, respectively (together the "Prior Amendments").
RECITALS
A. The Company currently owes $15,000,000 in aggregate principal
amount to the Noteholders as evidenced by the Original Senior Notes.
B. The Company currently owes an aggregate of $19,454,067 (the
"Existing Bank Loan") to Texas Commerce Bank National Association and BankOne
Texas, N.A. (the "Banks"), pursuant to a Credit Agreement dated as of May 15,
1995, as amended and restated by Amendments to Credit Agreement effective as of
July 19, 1995 and August 14, 1996 and as further amended contemporaneously
herewith (the "Credit Agreement") and the notes thereunder (the "Bank Notes").
The Company is also obligated on certain conditions to reimburse TCB for
certain liabilities incurred from time to time by the Company through its use
of cash management services provided by TCB, including any overdrafts by the
Company and amounts of automated clearing house funds that may erroneously be
credited to the Company's account with TCB (the "Cash Management Liabilities").
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C. The Company and certain of its subsidiaries are obligated, on
certain conditions, pursuant to a Guaranty (the "ABN Guaranty") dated as
November 1, 1994, to reimburse ABN AMRO Bank, N.V. ("ABN") with respect to
performance security and advance payment letters of credit (the "ABN Letters of
Credit"), currently in the aggregate amount of $15,195,368.77, issued by ABN
pursuant to its Continuing Reimbursement Agreement with ▇.▇. ▇▇▇▇▇▇▇▇ &
Associates, Inc. dated as of November 1, 1994 as amended by First and Second
Amendments to Continuing Reimbursement Agreement dated July ___, 1995 and April
30, 1996, respectively. (The ABN Guaranty, ABN Letters of Credit, Continuing
Reimbursement Agreement and related documents, as amended to date, are
hereinafter referred to as the "ABN Documents").
D. The Company is now in default and has therefore requested
certain financial accommodations from the Noteholders, the Banks, and ABN by
way of amendment and adjustment to the terms, conditions, and provisions of the
Original Note Purchase Agreement, the Credit Agreement, and the ABN Documents.
E. The Noteholders have agreed to modification of the Original
Note Purchase Agreements and, in connection therewith, to exchange of the
Original Senior Notes for Restated Senior Notes (defined below) all on the
terms and conditions provided for below.
F. Terms capitalized in this Amendment shall have the meanings
assigned to them in the Original Note Purchase Agreement except as otherwise
specifically provided for herein.
AGREEMENT
NOW, THEREFORE, in consideration of these premises and for other good
and valuable consideration, the receipt of which is acknowledged by all
parties, the parties to this Amendment agree as follows:
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1. STATUS OF ORIGINAL NOTE PURCHASE AGREEMENT AND PRIOR AMENDMENTS
1.1 Except as specifically amended or waived below, the Original
Note Purchase Agreements shall continue in full force and effect and references
to "Notes" therein shall instead be read as references to the Restated Senior
Notes.
1.2 At Closing hereunder the Prior Amendments shall be replaced
and superseded in their entirety by this Amendment.
2. ISSUANCE OF RESTATED SENIOR NOTES IN EXCHANGE FOR ORIGINAL SENIOR
NOTES
2.1 ISSUANCE.
The Company has authorized the issuance of Fifteen Million Dollars
($15,000,000) in aggregate principal amount of its Restated Senior Notes due
June 15, 2003 (the "Restated Senior Notes"). The Restated Senior Notes shall
be in the form of Exhibit A hereto, and shall have the terms as herein and
therein provided, and the terms therein provided are incorporated herein by
reference as if set forth herein in full. At Closing hereunder, the Restated
Senior Notes shall be delivered to the Noteholders in exchange for the Original
Senior Notes, which shall be replaced and superseded by Restated Senior Notes
dated November 1, 1996. At Closing the Original Senior Notes shall be marked
"CANCELLED" and returned to the Company.
2.2 INTEREST.
(a) PAYMENT. Accrued and unpaid interest on the Restated
Senior Notes shall be payable on the first Business Day of each month
beginning December 1, 1996.
(b) INTEREST RATE. The Restated Senior Notes shall bear
interest at an annual rate:
(i) From November 1, 1996, through December 31,
1997, of ten and one-half percent (10.50%);
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(ii) From January 1, 1998, through March 31, 1998,
of ten and three-quarters percent (10.75%); and
(iii) For each fiscal quarter beginning after March
31, 1998, at a rate that is one-quarter percent (0.25%) per
annum greater than the rate for the next preceding fiscal
quarter, but not to exceed eleven and one-half percent
(11.50%) per annum.
2.3 REPAYMENT OF PRINCIPAL.
SCHEDULED MANDATORY PRINCIPAL AMORTIZATION PAYMENTS. The
Company shall pay, and there shall become due and payable, Two Hundred
Eight Thousand Three Hundred Thirty-three and 33/100 Dollars
($208,333.33) in principal amount of the Restated Senior Notes on the
first Business Day of each month beginning July 1, 1997, until
maturity or full repayment of the Restated Senior Notes in accordance
with the terms hereof.
2.4 MATURITY DATE.
MATURITY DATE. Unless sooner accelerated pursuant to the terms
thereof or the terms of the Original Note Purchase Agreement as
amended hereby or prepaid in full, all then outstanding principal and
accrued and unpaid interest on the Restated Senior Notes shall be due
and payable in full on June 15, 2003 (the "Maturity Date").
2.5 CALCULATION AND PAYMENT OF MAKE-WHOLE AMOUNT.
(a) ASSUMED 8.41% INTEREST RATE. Notwithstanding the
adjustment to interest rate provided in Section 2.2 above, an interest
rate of 8.41% per annum, payable semi-annually on June 15 and December
15 in each year, shall be assumed for the sole purpose of calculating
any Make-Whole Amount that may come due under the Original Note
Purchase Agreement as amended hereby.
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(b) NO MAKE-WHOLE AMOUNT DUE FROM CHANGE IN SCHEDULED
MANDATORY PRINCIPAL AMORTIZATION PAYMENTS. No Make-Whole Amount shall
ever be due on Closing hereunder or as a result of the change in
scheduled mandatory principal amortization payments from the Original
Senior Notes to the Restated Senior Notes as provided in Section 2.3
above. Otherwise, Make-Whole Amounts shall be due and payable upon
any optional or mandatory prepayment of principal or repayment of
principal upon acceleration or demand prior to the Maturity Date.
3. COLLATERAL
3.1 COLLATERAL SECURITY.
The Restated Senior Notes and all obligations of the Company to the
Noteholders under the Original Note Purchase Agreement as amended hereby shall
be guaranteed by those Affiliates and Subsidiaries of the Company listed on
Annex 3 hereto ("Guarantors") and shall be secured by security agreements,
pledges, mortgages, trust deeds and/or other collateral transfer or assignment
documentation (the "Collateral Security Documentation") to TCB as collateral
agent for the Noteholders, the Banks and ABN encumbering in favor of the
Noteholders, the Banks and ABN substantially all of the material assets of the
Company and its Subsidiaries. Property to be encumbered pursuant to the
Collateral Security Documentation includes, but is not limited to, that
property listed on Exhibit B hereto. The Collateral Security Documentation and
related collateral documentation is listed on Exhibit C hereto.
3.2 PRIORITY.
The liens and security interests to be granted to TCB as collateral
agent for the Noteholders pursuant to Section 3.1 above shall be the same liens
and security interests to be contemporaneously granted in favor of the Banks
and ABN to secure all obligations of the Company to the Banks and ABN for the
Cash Management Liabilities not exceeding $2,000,000.00 at any one time
outstanding and under the Credit Agreement and the ABN
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Documents. Such liens and security interests shall be junior only to liens and
security interests in favor of the Banks granted to secure repayment of a new
revolving line of credit to the Company in an aggregate amount not to exceed $4
million at any one time outstanding (the "Senior Secured Loan"), available
until and maturing on June 30, 1997.
4. FEES AND EXPENSES
4.1 RESTRUCTURING FEE.
At Closing hereunder the Company shall pay to each Noteholder other
than Principal Mutual Life Insurance Company a fee ("Note Restructuring Fee")
in an amount equal to one half percent (0.50%) of the principal balance of each
Restated Senior Note to be issued hereunder to it. A Note Restructuring Fee
shall be paid at such time to Principal Mutual Life Insurance Company in the
amount of six tenths percent (0.60%) of the principal balance of the Restated
Senior Note to be issued hereunder to Principal Mutual Life Insurance Company.
4.2 EXPENSES.
The Company shall pay upon presentation of an invoice therefor the
reasonable fees and expenses incurred by the Noteholders in connection with the
debt restructuring which is the subject of this Amendment, including but not
limited to, the reasonable fees and expenses of outside counsel, reasonable
travel expenses, filing and recording fees, postage, courier, copying,
telecopy, telephone expenses and the like. The Company shall not be
responsible for the fees and expenses of more than one outside law firm for all
Noteholders.
5. ACKNOWLEDGMENT OF FULL PERFORMANCE; RELEASE; WAIVER OF EXISTING
DEFAULTS
5.1 FULL PERFORMANCE BY NOTEHOLDERS AND RELEASE.
By executing this Amendment the Company confirms and acknowledges that
the Noteholders, and each of them, have fully paid the purchase price for the
Original Senior Notes and the Restated Senior Notes and have fully, fairly and
completely performed each and every obligation of the Noteholders to the
Company owing in connection with the Original Senior
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Notes and the Restated Senior Notes. The Company further acknowledges that the
indebtedness evidenced by the Original Senior Notes, before exchanged for the
Restated Senior Notes, and by the Restated Senior Notes, once exchanged for the
Original Senior Notes, is the just indebtedness of the Company, owing to the
Noteholders according to its terms, without defense, setoff or counterclaim.
In consideration of the execution of this Amendment by the Noteholders, the
Company by executing this Amendment releases and waives any claim it might have
as of Closing hereunder against the Noteholders, or any of them, whether known
or unknown, in any way related to the Original Senior Notes, the Original Note
Purchase Agreement, the Restated Senior Notes or this Amendment.
5.2 WAIVER OF EXISTING KNOWN DEFAULTS.
The Company has disclosed in writing to the Noteholders all Events of
Default that may exist under the Original Note Purchase Agreements and the
Original Senior Notes immediately prior to closing under this Amendment. Each
of the Noteholders, in consideration of the agreements of the Company
hereunder, hereby waives each such default or Event of Default. The
Noteholders hereby represent and warrant to the Company that, as of Closing
hereunder, they know of no other default or Event of Default under the Original
Note Purchase Agreements, or the Original Senior Notes, and no default or Event
of Default resulting from the execution and delivery of the Restated Senior
Notes, this Amendment, the Collateral Documentation or any of the other
documentation executed and delivered or transactions effected at Closing. It
is agreed and understood that such waivers of defaults or Events of Default by
the Noteholders shall not constitute a waiver of any other, similar or future
default or Event of Default under the Original Note Purchase Agreements as
amended hereby or the Restated Senior Notes.
6. CLOSING
6.1 TIME AND PLACE.
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The closing ("Closing") of the Company's exchange of the Original
Senior Notes for the Restated Senior Notes will be held on November 13, 1996
(the "Closing Date") at 10:00 a.m., local time, at the office of ▇▇▇▇▇▇▇ &
▇▇▇▇▇, Houston, Texas. At the Closing the Company will exchange the Restated
Senior Notes for the Original Senior Notes held by the Noteholders in the
principal amounts indicated on Exhibit D hereto.
6.2 DOCUMENTS TO BE DELIVERED AT CLOSING.
At the Closing the Company will deliver to the Noteholders or their
agents, duly executed by the Company where appropriate, the following documents
and things:
(a) This Amendment;
(b) The Restated Senior Notes;
(c) Copies of the Collateral Security Documentation;
(d) The Note Restructuring Fee and payment of all
expenses of Noteholders as provided in Section 4.2 above;
(e) Payment of all accrued interest due the Noteholders
through Closing;
(f) The opinion of Liddell, Sapp, Zivley, Hill & ▇▇▇▇▇▇,
L.L.P. addressed to Noteholders substantially in the form of Exhibit
E hereto;
(g) Secretary's Certificate from the Company in the form
of Exhibit F attaching copies of board resolutions authorizing entry
into this Amendment, issuance of the Restated Senior Notes and related
matters; any amendments to Company Articles and Bylaws since June 1,
1993; and as to the incumbency of officers authorized to sign
documents for the Company and Guarantors in connection with Closing;
(h) An Officer's Closing Certificate in the form of
Exhibit G concerning accuracy of warranties of the Company and other
matters at and as of the Closing Date;
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(i) Copies of all amendments or supplements to the Credit
Agreement and all documents relating to the Senior Secured Loan;
(j) Copies of all amendments or supplements to the ABN
Documents; and
(k) Good Standing Certificates for the Company and each
Affiliate listed on Exhibit H hereto.
At the Closing the Noteholders will deliver to the Company or its
agents the Original Senior Notes marked "CANCELLED".
6.3 CONDITIONS TO CLOSING.
The Noteholders' obligation at Closing to exchange the Original Senior
Notes for the Restated Senior Notes is subject to the following conditions
precedent to be met at or prior to Closing and upon Closing such conditions
shall be deemed satisfied or if not satisfied, deemed waived:
(a) The Noteholders shall have received each of the
documents identified in Section 6.2 above, and any other documents
relating thereto which Noteholders may reasonably request, each in
form and content satisfactory to the Noteholders and their counsel;
(b) All amounts due for interest accrued and unpaid
through the date of Closing, the Note Restructuring Fee, and
reimbursement of fees and expenses to the Noteholders under Section
4.2 shall be paid to the Noteholders;
(c) Noteholders shall be satisfied in their sole
discretion with the credit restructuring arrangements reached between
the Company and the Banks and between the Company and ABN;
(d) No default or condition which would constitute a
default with the giving of notice and/or the passage of time, except
those that are the subject of a written waiver as called for in
Section 5.2, shall exist under the Original Note Purchase
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Agreement as amended hereby, the Credit Agreement, as amended, or the
ABN Documents, as amended;
(e) An intercreditor and collateral agency agreement or
agreements, on terms satisfactory to Noteholders, shall be entered
into by and among the Noteholders, the Banks, and ABN relating to the
rights and obligations among said creditors in dealing with the
Company and collateral for the Company's obligations to said
creditors; and
(f) All proceedings taken in connection with the issuance
and exchange of the Restated Senior Notes for the Original Senior
Notes and all documents and papers relating thereto shall be
satisfactory to the Noteholders and their counsel. The Noteholders
and their counsel shall have received copies of such documents and
papers as they may reasonably request in connection therewith, all in
form and substance satisfactory to the Noteholders and their counsel.
7. WARRANTIES AND REPRESENTATIONS
The Company hereby supplements and modifies the warranties and
representations contained in Article 2 of the Original Note Purchase Agreement
as follows:
7.1 RESTATEMENT OF CERTAIN WARRANTIES AND REPRESENTATIONS.
The Company hereby restates as of Closing hereunder, with the
modifications specified below, the warranties and representations contained in
Section 2.4 ("Title to Properties"), Section 2.5 ("Taxes"), Section 2.6
("Pending Litigation"), Section 2.8 ("Corporate Organization and Authority"
except as to the good standing of Mac-Tech, Inc.), Section 2.9 ("Charter
Instruments, Other Agreements"), Section 2.10 ("Restrictions on Company and
Subsidiaries"), Section 2.11 ("Compliance with Laws"), and Section 2.13
("Environmental Compliance") of the Original Note Purchase Agreement.
(a) SECTION 2.4(a). The reference to Annex 3 shall be to
Annex 1 of this Amendment;
(b SECTION 2.5.
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(i) The reference in subsection (a)(ii) to
"fiscal years 1990 through 1992" is replaced
with "fiscal years 1993 through 1995";
(ii) The references to Annex 3 in subsections
(b)(i) and (ii) shall be to Annex 1 of this
Amendment;
(c) SECTION 2.8(d). The reference to Annex 3 shall be to
Annex 3 of this Amendment;
(d) SECTION 2.9. The reference to absence of defaults
and violations of the terms of agreements or instruments is subject to
receiving the waivers to be given in connection with Closing
hereunder; and
(e) SECTION 2.10(b). The reference to Annex 3 shall be
to Annex 2 of this Amendment.
7.2 FINANCIAL STATEMENTS; INDEBTEDNESS; MATERIAL ADVERSE CHANGE.
(a) FINANCIAL STATEMENTS. The Company has provided the
Noteholders with its financial statements described in Annex 1 hereto.
Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied, and
present fairly, in all material respects, the consolidated financial
position of the Company and its consolidated subsidiaries as of such
dates and the results of its operations and cash flows for such
periods.
(b) INDEBTEDNESS. Annex 2 hereto lists all indebtedness
of the Company and the Restricted Subsidiaries as of the Closing Date,
and provides the following information with respect to each item of
such indebtedness: the holder thereof and type thereof; the
outstanding amount; the current portion; and the collateral securing
such indebtedness, if any.
(c) MATERIAL ADVERSE CHANGE. Since June 30, 1996, there
has been no change in the business, prospects, profits, Properties or
condition (financial or
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otherwise) of the Company and its Restricted Subsidiaries taken as a
whole except (i) changes in the ordinary course of business that, in
the aggregate for all such changes, could not reasonably be expected
to have a Material Adverse Effect, and (ii) changes that have been
disclosed in writing to the Noteholders.
7.3 SUBSIDIARIES AND AFFILIATES.
Annex 3 hereto sets forth the information for Subsidiaries and
Affiliates called for in Section 2.3(a) of the Original Note Purchase
Agreement, amended to be accurate as of the Closing Date hereunder.
7.4 FULL DISCLOSURE.
None of the financial statements referred to in Section 7.2 above,
this Amendment, and any written statement furnished by or on behalf of the
Company to the Noteholders in connection with the negotiation or closing of the
sale of the Restated Senior Notes, taken as a whole, contains any untrue
statement of material fact or omits a material fact necessary to make the
statements contained therein and herein not misleading. There is no fact that
the Company has not disclosed to the Noteholders in writing that has had or, so
far as the Company can now reasonably foresee, could reasonably be expected to
have a Material Adverse Effect.
7.5 SALE OF RESTATED SENIOR NOTES IS LEGAL AND AUTHORIZED;
OBLIGATIONS ARE ENFORCEABLE.
The Company hereby represents and warrants to the Noteholders, with
respect to this Amendment and the Restated Senior Notes, each of those matters
set forth in Section 2.14 of the Original Note Purchase Agreement except to the
extent said Section relates to creation of liens against property of the
Company or Subsidiaries.
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7.6 GOVERNMENTAL CONSENT TO SALE OF RESTATED SENIOR NOTES.
The Company hereby represents and warrants to the Noteholders, with
respect to the Restated Senior Notes, each of those matters set forth in
Section 2.15 of the Original Note Purchase Agreement except as required by the
Collateral Documentation.
7.7 NO DEFAULT AT CLOSING.
Upon receipt of the waivers referred to in Section 5.2 above and
waivers from the Banks and ABN to be delivered at Closing, no event has
occurred and no condition exists that upon the execution and delivery of this
Amendment and the exchange of the Restated Senior Notes for the Original Senior
Notes, would constitute a Default or an Event of Default.
8. REGISTRATION; EXCHANGE; SUBSTITUTION OF RESTATED SENIOR NOTES.
The Company hereby makes and restates with respect to the Restated
Senior Notes each of the agreements and undertakings contained in Article 5 of
the Original Note Purchase Agreement with respect to the Original Senior Notes.
9. COVENANTS.
9.1 PRIOR COVENANTS.
The Company reaffirms as of the Closing Date hereunder each of the
covenants, except as specifically amended below, contained in Article 6 of the
Original Note Purchase Agreement and, in connection with entry into this
Amendment and issuance of the Restated Senior Notes makes the following
additional and supplemental covenants.
9.2 CONSOLIDATED NET WORTH.
The Company's covenant concerning consolidated net worth contained in
Section 6.4 of the Original Note Purchase Agreement is replaced in its entirety
with the following:
6.4 CONSOLIDATED NET WORTH.
Through the fiscal quarter ending December 31, 1997,
the Company will not permit Consolidated Net Worth, determined
as of the end of each fiscal quarter of the Company, to be
less than the following amounts:
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================================================================================
Quarter
Ended 12-31-96 3-31-97 6-30-97 9-30-97 12-31-97
--------------------------------------------------------------------------------
Amount $38.5 $39.0 $39.5 $40.0 $40.5
(in millions)
================================================================================
Following the fiscal quarter ending December 31, 1997, the
Company will not at any time permit Consolidated Net Worth,
determined as of the end of the fiscal quarter of the Company
then most recently ended, to be less than the sum of
(a) Forty Million Five Hundred Thousand
Dollars ($40,500,000), plus
(b) the sum of the Fiscal Quarter Net
Worth Increase Amounts for all fiscal quarters of the
Company ended during the period beginning January 1,
1998 and ending at such time.
"Consolidated Net Worth" means total assets minus total
liabilities of the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such Persons in
accordance with GAAP.
"Fiscal Quarter Net Worth Increase Amount" means, for any
fiscal quarter of the Company, the greater of
(i) fifty percent (50%) of
Consolidated GAAP Net Income for such fiscal quarter,
and
(ii) Zero Dollars ($0).
9.3 FIXED CHARGE COVERAGE.
The Company's covenant with respect to fixed charge coverage contained
in Section 6.5 of the Original Note Purchase Agreement is hereby replaced in
its entirety with the following:
6.5 FIXED CHARGE COVERAGE.
Determined as of the end of each fiscal quarter of
the Company beginning December 31, 1996, the Company will not
permit the ratio of
(a) EBITDA for the period of four (4)
consecutive fiscal quarters of the Company then most
recently ended
to
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(b) The sum of required principal
payments on all Debt (excluding obligations in
respect of Capital Leases), plus required interest
payments, all calculated for the preceding four (4)
fiscal quarters
to be less than the following ratios:
================================================================================
4 Quarters
Ended 12-31-96 3-31-97 6-30-97 9-30-97 12-31-97
--------------------------------------------------------------------------------
Ratio 1.34:1 1.46:1 2.32:1 1.82:1 2.50:1
================================================================================
provided however, the non-cash charge related to the ▇.▇.
▇▇▇▇▇▇▇▇ Note shall not be included in making these
calculations.
For each four consecutive fiscal quarters ending each quarter
after December 31, 1997, the Company will not permit such
ratio to be less than 2.25 to 1.
9.4 LEVERAGE RATIO.
The Company's covenant with respect to leverage ratio contained in
Section 6.6 of the Original Note Purchase Agreement is hereby replaced in its
entirety with the following:
6.6 LEVERAGE RATIO.
The Company will not at any time permit the ratio of
(a) Consolidated Debt, determined as of
the end of the fiscal quarter of the Company then
most recently ended,
to
(b) Consolidated Capitalization,
determined as of the end of such fiscal quarter to
exceed the following ratios:
================================================================================
Quarter
Ended 12-31-96 3-31-97 6-30-97 9-30-97 12-31-97
--------------------------------------------------------------------------------
Ratio 0.50:1 0.50:1 0.50:1 0.45:1 0.45:1
================================================================================
For each fiscal quarter ending after December 31, 1997, the
Company shall not permit such ratio to exceed 0.45 to 1.0.
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9.5 FUNDED DEBT.
The Company's covenant with respect to Funded Debt contained in
Section 6.7 of the Original Note Purchase Agreement is hereby replaced in its
entirety with the following:
6.7 FUNDED DEBT.
The Company will not, and will not permit any
Restricted Subsidiary to, at any time after issuance of the
Restated Senior Notes incur or in any other manner become
liable in respect of any Funded Debt (other than Funded Debt
of a Restricted Subsidiary to the Company) except,
(a) guaranties of any Indebtedness of any
Person not to exceed in the aggregate $250,000.00,
provided that such limitation shall not apply to a
guaranty of any Indebtedness of ▇.▇. ▇▇▇▇▇▇▇▇, the
FINCHAA Project or any Indebtedness related thereto
or Indebtedness to the Banks;
(b) Indebtedness secured by Purchase
Money Liens incurred in connection with acquisition
of tangible assets from any third party not to exceed
$250,000.00 in the aggregate during the term hereof;
and
(c) renewals and extensions (in the same
or lesser principal amount on similar terms and
conditions) of any Indebtedness listed in
subparagraphs (a) and (b) of this Section 6.7.
9.6 RESTRICTED SUBSIDIARY INDEBTEDNESS.
The Company's covenant with respect to Restricted Subsidiary
Indebtedness in Section 6.8 of the Original Note Purchase Agreement is hereby
replaced in its entirety with the following:
6.8 RESTRICTED SUBSIDIARY INDEBTEDNESS.
The Company will not at any time permit the sum of
(a) Total Restricted Subsidiary
Indebtedness at such time, plus, without duplication,
(b) the aggregate amount of all (i)
Indebtedness and (ii) other obligations, in each case
outstanding at such time and secured by Liens
permitted by Section 6.9(a),
to exceed ten percent (10%) of Consolidated Capitalization at
such time.
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9.7 LIENS.
The Company's covenant with respect to restriction of Liens contained
in subparagraph 6.9(a) of the Original Note Purchase Agreement is hereby
replaced in its entirety with the following:
(a) LIENS. Neither the Company nor any
Subsidiary will create, incur, assume or suffer to
exist any Lien upon or with respect to any of its
property or assets of any kind whether now owned or
hereafter acquired, except
(i) Liens existing on the date of Closing
and listed on Annex 2 and Liens granted in connection
with Closing in favor of the Noteholders, the Banks
and ABN;
(ii) Liens for taxes, assessments, levies
or other governmental charges not yet due or which
are being contested in good faith by appropriate
proceedings and for which adequate reserves are
maintained in accordance with GAAP;
(iii) Liens in connection with worker's
compensation, unemployment insurance or other social
security, old age pension or public liability
obligations not yet due or which are being contested
in good faith by appropriate proceedings and for
which adequate reserves are maintained in accordance
with GAAP;
(iv) Operators', vendors', carriers',
warehousemen's, repairmen's, mechanics', workers',
materialmen's or other like Liens arising by
operation of law in the ordinary course of business
(or deposits to obtain the release of any such Lien)
and securing amounts not yet due or which are being
contested in good faith by appropriate proceedings
and for which adequate reserves are maintained in
accordance with GAAP;
(v) deposits to secure insurance in the
ordinary course of business;
(vi) deposits to secure the performance of
bids, tenders, contracts (other than contracts for
the payment of money or the deferred purchase price
of goods or services), leases, licenses, franchises,
trade contracts, statutory obligations, surety and
appeal bonds and performance bonds and other
obligations of a like nature incurred in the ordinary
course of business;
(vii) easements, rights of way, covenants,
restrictions, reservations, exceptions,
encroachments, zoning and similar restrictions and
other similar encumbrances (other than to secure the
payment of borrowed money or the deferred purchase
price of goods or services) or title defects, in each
case incurred in the
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ordinary course of business which, in the aggregate,
are not substantial in amount, and which do not in
any case singly or in the aggregate materially
detract from the value or usefulness of the property
subject thereto for the business conducted by the
Company and its Subsidiaries or materially interfere
with the ordinary conduct of the business of the
Company and its Subsidiaries;
(viii) bankers' liens arising by operation
of law;
(ix) inchoate Liens arising under ERISA to
secure contingent liabilities of the Company and its
Subsidiaries;
(x) liens on assets of Subsidiaries to
secure indebtedness to the Company, provided same are
collaterally assigned to the Collateral Agent,
provided further, such liens may be incurred only to
the extent the underlying Indebtedness is otherwise
permitted under the terms of this Amendment; and
(xi) any renewal, extension or replacement
of any Lien referred to in subparagraph (a)(i)
through (x) above; provided, that no Lien arising or
existing as a result of such extension, renewal or
replacement shall be extended to cover any property
not theretofore subject to the Lien being extended,
renewed or replaced and provided further that the
principal amount of the Indebtedness secured thereby
shall not exceed the principal amount of the
Indebtedness so secured at the time of such
extension, renewal or replacement.
9.8 RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS.
The Company's covenant with respect to Restricted Payments and
Restricted Investments contained in Section 6.10 of the Original Note Purchase
Agreement is hereby replaced in its entirety with the following:
6.10 RESTRICTED PAYMENTS AND RESTRICTED
INVESTMENTS.
The Company will not, and will not permit any
Restricted Subsidiary to, declare or make any Restricted
Payment or make any Restricted Investment, except dividends
with respect to ST Piping, Inc. in accordance with contractual
obligations existing on the date hereof.
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22
9.9 MERGER, CONSOLIDATION, ETC.
The Company's covenant with respect to merger and related matters
contained in Section 6.11 of the Original Note Purchase Agreement is hereby
amended by deletion of subparagraph (b) in its entirety.
9.10 TRANSFER OF PROPERTY, ETC.
The Company's covenant with respect to transfers of property, etc.
contained in Section 6.12 of the Original Note Purchase Agreement is hereby
replaced in its entirety with the following:
6.12 TRANSFERS OF PROPERTY, RESTRICTED SUBSIDIARY
STOCK.
(a) TRANSFERS OF PROPERTY. The Company
will not, and will not permit any Restricted
Subsidiary to, sell (including, without limitation,
any sale and subsequent leasing as lessee of such
Property), lease as lessor, transfer or otherwise
dispose of any Property (collectively referred to as
"Transfers"), except:
(i) Transfers of inventory and of
obsolete or worn out Property, in each case in the
ordinary course of business of the Company or such
Restricted Subsidiary;
(ii) Transfers from the Company to a
Wholly-Owned Restricted Subsidiary;
(iii) Transfers from a Restricted
Subsidiary to the Company or to a Wholly-Owned
Restricted Subsidiary;
(iv) any other Transfer of Property at any
time to a Person, other than an Affiliate, for an
Acceptable Consideration if:
(A) the sum of
(1) the greater of (x) the Fair
Market Value of such Property and (y)
the current book value of such
Property, plus
(2) the aggregate of the amounts
representing, in each case, the
greater of the Fair Market Value or
the book value of each other item of
Property of the Company and the
Restricted Subsidiaries Transferred
(other than in Excluded Transfers)
after the Closing Date, would not
exceed ten percent (10%) of
Consolidated Net
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Tangible Assets determined as of the
date of such Transfer;
(B) the sum of
(1) the Operating Income
Contribution Percentage of such
Property plus
(2) the Operating Income
Contribution Percentage of all other
Property of the Company and the
Restricted Subsidiaries Transferred
(other than in Excluded Transfers)
after the Closing Date, would not
exceed ten percent (10%); and
(C) immediately before and after the
consummation of such Transfer, and after
giving effect thereto, no Default or Event of
Default would exist;
provided, that any Transfer of Property shall be excluded for
purposes of the foregoing clauses (iv)(A) and (iv)(B), if,
within two hundred forty (240) days after such Transfer, the
entire proceeds of such Transfer, net of reasonable and
ordinary transaction costs and expenses incurred in connection
with such Transfer, are applied by the Company or such
Restricted Subsidiary to:
(y) invest in new operating assets of a
similar nature of the Company or any Restricted
Subsidiary; or
(z) pay, prior to its scheduled maturity,
ratably to all holders thereof based on the then
outstanding aggregate principal amount thereof,
Qualified Senior Funded Debt, together with any
Make-Whole Amount or premium required to be paid in
connection therewith pursuant to Section 4.2 hereof
or pursuant to any applicable provisions of any other
agreement with respect to Qualified Senior Funded
Debt;
further provided, that any Material Subsidiary organized under
the laws of Germany may sell, transfer or convey any of its
properties and assets for Fair Market Value (whether in one
transaction or in a series of transactions) to any Person if
the proceeds of any such sale, transfer or conveyance are
immediately distributed by such Material Subsidiary to the
Company or a Guarantor and held by the Collateral Agent in an
account at the Collateral Agent which is subject to a lien or
security interest in favor of the Collateral Agent.
(b) TRANSFERS OF RESTRICTED SUBSIDIARY STOCK.
The Company will not, and will not permit any Restricted
Subsidiary to, Transfer any shares of the stock (or any
warrants, rights or options to purchase stock or other
Securities exchangeable for or convertible into stock) of a
Restricted Subsidiary (such stock, warrants, rights, options
and other
20
24
Securities herein called "Restricted Subsidiary Stock"), nor
will any Restricted Subsidiary issue, sell or otherwise
dispose of any shares of its own Restricted Subsidiary Stock,
provided that the foregoing restrictions do not apply to:
(i) the issuance by a Restricted
Subsidiary of shares of its own Restricted Subsidiary
Stock to the Company or a Wholly-Owned Restricted
Subsidiary;
(ii) Transfers (other than leases) by
the Company or a Restricted Subsidiary of shares of
Restricted Subsidiary Stock to the Company or to a
Wholly- Owned Restricted Subsidiary;
(iii) the issuance by a Restricted
Subsidiary of directors' qualifying shares; and
(iv) the Transfer of all of the
Restricted Subsidiary Stock of a Restricted
Subsidiary owned by the Company and the other
Restricted Subsidiaries if:
(A) such Transfer satisfies the
requirements of Section 6.12(a) hereof;
(B) in connection with such Transfer
the entire Investment (whether represented by
stock, Indebtedness, claims or otherwise) of
the Company and the other Restricted
Subsidiaries in such Restricted Subsidiary is
Transferred to a Person other than the
Company or a Restricted Subsidiary not being
simultaneously disposed of;
(C) the Restricted Subsidiary being
disposed of has no continuing Investment in
any other Restricted Subsidiary not being
simultaneously disposed of or in the Company;
and
(D) immediately before and after the
consummation of such Transfer, and after
giving effect thereto, no Default or Event of
Default would exist.
For purposes of determining the book value of Property
constituting Restricted Subsidiary Stock being Transferred as
provided in clause (iv) immediately above, such book value
shall be deemed to be the aggregate book value of the Property
of the Restricted Subsidiary that shall have issued such
Restricted Subsidiary Stock.
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9.11 TRANSACTIONS WITH AFFILIATES.
The Company's covenant with respect to Transactions with Affiliates
contained in Section 6.15 of the Original Note Purchase Agreement is hereby
replaced in its entirety with the following:
6.15 TRANSACTIONS WITH AFFILIATES.
The Company will not, and will not permit any
Restricted Subsidiary to, enter into any transaction,
including, without limitation, the purchase, sale or exchange
of Property or the rendering of any service, with any
Affiliate, except in the ordinary course of and pursuant to
the reasonable requirements of the Company's or such
Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Restricted
Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate.
9.12 CONSOLIDATED EBITDA.
The following covenant shall be added as Section 6.19 of the Original
Note Purchase Agreement concerning achieving earnings:
6.19 CONSOLIDATED EBITDA.
Through the fiscal quarter ending December 31, 1997,
the Company will not at any time permit Consolidated EBITDA
for the period of four (4) consecutive fiscal quarters of the
Company, determined as of the end of each fiscal quarter of
the Company, to be less than the following amounts:
================================================================================
Quarter
Ended 12-31-96 3-31-97 6-30-97 9-30-97 12-31-97
--------------------------------------------------------------------------------
Amount $4.0 $5.0 $7.1 $9.0 $11.0
(in millions)
================================================================================
provided however, the non-cash charge related to the ▇.▇.
▇▇▇▇▇▇▇▇ Note shall not be included in making these
calculations.
Following the fiscal quarter ending December 31, 1997, the
Company shall not permit Consolidated EBITDA for any period of
four (4) consecutive fiscal quarters of the Company to be less
than $11.0 million.
9.13 CONSOLIDATED CAPITAL EXPENDITURES.
The following covenant shall be added as Section 6.20 of the Original
Note Purchase Agreement concerning capital expenditures:
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26
6.20 CONSOLIDATED CAPITAL EXPENDITURES.
Through the fiscal quarter ending December 31, 1997,
the Company will not permit Consolidated Capital Expenditures
for each fiscal quarter to exceed the following amounts:
================================================================================
Quarter
Ended 12-31-96 3-31-97 6-30-97 9-30-97 12-31-97
--------------------------------------------------------------------------------
Amount $250 $250 $250 $500 $500
(in
thousands)
================================================================================
Following the fiscal quarter ending December 31, 1997, the
Company shall not permit Consolidated Capital Expenditures for
any fiscal quarter to exceed $500 thousand.
10. INFORMATION AND CERTIFICATES
The Company agrees that it shall continue to provide to the holders of
the Restated Senior Notes the information, certificates and access for
inspection that was to be provided to holders of the Original Senior Notes
pursuant to Article 7 of the Original Note Purchase Agreement, in addition to
the following.
10.1 ADDITIONAL FINANCIAL AND BUSINESS INFORMATION.
Subparagraphs (l) and (m) are added to Section 7.1 "Financial and
Business Information" as follows:
(l) MONTHLY STATEMENTS -- as soon as
practicable after the end of each monthly fiscal
period in each fiscal year of the Company (other than
the last monthly fiscal period of each fiscal quarter
of the Company) and in any event within forty (40)
days with respect to cash flows and with respect to
other reports within thirty (30) days, duplicate
copies of
(i) a consolidated balance sheet of the
Company and its subsidiaries and of the
Company and the Restricted Subsidiaries as at
the end of such month, and
(ii) consolidated statements of income,
changes in stockholders' equity and cash
flows of the Company and its subsidiaries and
of the Company and the Restricted
Subsidiaries for such month and for the
portion of the fiscal year ending with such
month,
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setting forth in each case in reasonable
detail, prepared in accordance with GAAP,
subject to changes resulting from year-end
adjustments.
(m) DUPLICATE REPORTS --
contemporaneously with transmitting required
financial and/or business reports to the Banks or
ABN, copies of the same.
11. EVENTS OF DEFAULT
Except as waived in Section 5.2 above and as specifically modified
below, all Events of Default and remedies shall apply to the Restated Senior
Notes as provided for the Original Senior Notes in Article 8 of the Original
Note Purchase Agreement.
11.1 NATURE OF EVENTS.
Section 8.1 of the Original Note Purchase Agreements is deleted in its
entirety and replaced with the following:
8.1 NATURE OF EVENTS.
An "Event of Default" shall exist if any of the
following occurs and is continuing:
(a) PRINCIPAL OR MAKE-WHOLE AMOUNT
PAYMENTS -- the Company shall fail to make any
payment of principal or Make-Whole Amount on any
Restated Senior Note on or before the date such
payment is due;
(b) INTEREST PAYMENTS -- the Company
shall fail to make any payment of interest on any
Restated Senior Note on or before the date such
payment is due;
(c) NON PAYMENT DEFAULTS -- the Company
or any Subsidiary shall fail to perform or observe
any covenant or the Company or any Subsidiary shall
fail to comply with any other provision hereof;
(d) DRAFTS ON ABN LETTERS OF CREDIT --
any draft or other demand for payment is made under
any ABN Letter of Credit;
(e) WARRANTIES OR REPRESENTATIONS -- any
warranty, representation or other statement by or on
behalf of the Company contained herein or in any
certificate or instrument furnished in compliance
with or in reference hereto shall have been false or
misleading in any material respect when made;
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(f) DEFAULT ON INDEBTEDNESS OR SECURITY
--
(i) the Company or any Restricted
Subsidiary shall fail to make any payment on any
Indebtedness or any Security when due; or
(ii) any event shall occur or any
condition shall exist in respect of any Indebtedness
or any Security of the Company or any Restricted
Subsidiary, or under any agreement securing or
relating to any such Indebtedness or Security, that
immediately or with any one or more of the passage of
time or the giving of notice:
(A) causes (or permits any one or more
of the holders thereof or a trustee therefor
to cause) such Indebtedness or Security, or a
portion thereof, to become due prior to its
stated maturity or prior to its regularly
scheduled date or dates of payment; or
(B) permits any one or more of the
holders thereof or a trustee therefor to
require the Company or any Restricted
Subsidiary to repurchase such Indebtedness or
Security from such holder and any such holder
or trustee exercises (or attempts to
exercise) such right;
in all respects without giving effect to any
amendment or waiver thereof after the date hereof,
and provided that the aggregate amount of all
obligations in respect of all such Indebtedness and
Securities referred to in this clause (f) exceeds at
any time Five Hundred Thousand Dollars ($500,000);
(g) INVOLUNTARY BANKRUPTCY PROCEEDINGS --
(i) a receiver, liquidator, custodian or
trustee of the Company or any Restricted Subsidiary,
or of all or any part of the Property of either,
shall be appointed by court order and such order
shall remain in effect for more than sixty (60) days,
or an order for relief shall be entered with respect
to the Company or any Restricted Subsidiary, or the
Company or any Restricted Subsidiary shall be
adjudicated a bankrupt or insolvent;
(ii) any of the Property of the Company or
any Restricted Subsidiary shall be sequestered by
court order and such order shall remain in effect for
more than sixty (60) days; or
(iii) a petition shall be filed against the
Company or any Restricted Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law
of any jurisdiction, whether now or hereafter in
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effect, and shall not be dismissed within sixty (60)
days after such filing;
(h) VOLUNTARY PETITIONS -- the Company
or any Restricted Subsidiary shall file a petition in
voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt,
dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or shall consent
to the filing of any petition against it under any
such law;
(i) ASSIGNMENTS FOR BENEFIT OF
CREDITORS, ETC. -- the Company or any Restricted
Subsidiary shall make an assignment for the benefit
of its creditors, or admits in writing its inability,
or fails, to pay its debts generally as they become
due, or shall consent to the appointment of a
receiver, liquidator or trustee of the Company or any
Restricted Subsidiary or of all or any part of the
Property of either; or
(j) UNDISCHARGED FINAL JUDGMENTS -- a
final judgment or final judgments for the payment of
money aggregating in excess of Five Hundred Thousand
Dollars ($500,000) is or are outstanding against any
one or more of the Company and the Restricted
Subsidiaries and any one of such judgments shall have
been outstanding for more than thirty (30) days from
the date of its entry and shall not have been
discharged in full or stayed.
If any action, condition, event or other matter would, at any
time, constitute an Event of Default under any provision of
this Section 8.1, then an Event of Default shall exist,
regardless of whether the same or a similar action, condition,
event or other matter is addressed in a different provision of
this Section 8.1 and would not constitute an Event of Default
at such time under such different provision.
12. TERMS DEFINED
The following terms shall have the added or amended meanings to those
specified in Section 9.1 of the Original Note Purchase Agreement.
12.1 RESTRICTED INVESTMENTS.
The definition of "Restricted Investments" appearing at pages 56 and
57 of the Original Note Purchase Agreement is hereby amended by deleting
subparagraph (h) thereof appearing at page 57.
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12.2 CONSOLIDATED EBITDA.
Consolidated EBITDA - means, for any period, the consolidated pre-tax
income for such period, plus the aggregate amount which was deducted for such
period in determining consolidated pre-tax income in respect of interest
expense (including amortization of debt discount, imputed interest and
capitalized interest), plus depreciation and amortization, plus income
attributable to any minority interest in any Person, for so long as said Person
remains a Guarantor, provided, the calculations of EBITDA for the period up to
and including September 30, 1996, but not thereafter, shall be based on
consolidated, pre-tax income from continuing operations only and shall exclude
all special charges and non-recurring write downs; for periods after September
30, 1996 such calculations shall include all special charges and all
non-continuing operations.
12.3 CONSOLIDATED CAPITAL EXPENDITURES.
Consolidated Capital Expenditures - means all payments for or Debt
incurred in connection with fixed assets or improvements or for replacements,
substitutions or additions thereto, that have a useful life of more than one
year and which are required to be capitalized under GAAP.
12.4 ▇.▇. ▇▇▇▇▇▇▇▇ NOTE.
The ▇.▇. ▇▇▇▇▇▇▇▇ Note - means that certain promissory note to ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ payable by the Company, due November, 1999, bearing 8 percent
interest, given to satisfy the Company's obligation to pay the "short-fall" as
that term is used in paragraph 17 of that certain consulting agreement between
the Company and ▇. ▇. ▇▇▇▇▇▇▇▇ dated August 9, 1995.
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Executed by the Company and the holders of all of the Original Senior
Notes as of the date above first written.
PRINCIPAL MUTUAL LIFE SERV-TECH, INC.
INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------- --------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Counsel Name: ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------- ------------------------------------------
Title: Title: Senior Vice President
------------------------------------------ -----------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Counsel
-------------------------------------------
Title:
------------------------------------------
TMG LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------------
Title: Vice President
------------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Title: Assistant Vice President
------------------------------------------
BERKSHIRE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------------
Title: Investment Officer
------------------------------------------
THE SECURITY MUTUAL LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Title: Vice President
------------------------------------------
Chief Investment Officer
------------------------------------------
32
EXHIBIT A
(FORM OF RESTATED SENIOR NOTE)
SERV-TECH, INC.
Restated Senior Note due June 15, 2003
No. R- (Place of Execution)
$ November 1, 1996
SERV-TECH, INC., a Texas corporation (the "Company"), for value
received, hereby promises to pay to or
registered assigns the principal sum of DOLLARS
($ ) on June 15, 2003 and to pay interest (computed on the basis of
a 360-day year of twelve 30-day months) on the unpaid principal balance thereof
on the first Business Day of each month beginning December 1, 1996 at the rate
of ten and one-half percent (10.50%) from November 1, 1996, through December
31, 1997, at the rate of ten and three quarters percent (10.75%) from January
1, 1998 through March 31, 1998, and at a rate that is one-quarter percent
(0.25%) greater than the rate for the preceding fiscal quarter, but not to
exceed eleven and one-half percent (11.50%) per annum, for each successive
fiscal quarter beginning after March 31, 1998 until the principal amount hereof
shall become due and payable or is fully repaid; and to pay on demand interest
on any overdue principal (including any overdue prepayment of principal) and
Make-Whole Amount, if any, and (to the extent permitted by applicable law) on
any overdue installment of interest, at a rate equal to the lesser of (a) the
highest rate allowed by applicable law and (b) thirteen and one-half percent
(13.50%) per annum.
Payments of principal, Make-Whole Amount, if any, and interest shall be
made in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts to the
registered holder hereof at the address shown in the register maintained by the
Company for such purpose, in the manner provided in the Amended Note Purchase
Agreement (defined below).
This Note is one of an issue of Notes of the Company issued in an
aggregate principal amount limited to Fifteen Million Dollars ($15,000,000)
pursuant to the Company's Note Restructuring Amendment to Note Purchase
Agreements, dated as of November , 1996 (the "Note Restructuring Amendment"),
which amends the Company's separate Note Purchase Agreements, each dated as of
June 1, 1993 (collectively, and as amended by the Note Restructuring Amendment,
the "Amended Note Purchase Agreement"). This Note is entitled to the benefits
of the Amended Note Purchase
33
Agreement and the terms thereof are incorporated herein by reference.
Capitalized terms used herein and not otherwise defined herein have the
meanings specified in the Amended Note Purchase Agreement. As provided in the
Amended Note Purchase Agreement, this Note is subject to prepayment in whole or
in part, in certain cases without a Make-Whole Amount and in other cases with a
Make-Whole Amount. The Company agrees to make required prepayments on account
of such Notes in accordance with the provisions of the Amended Note Purchase
Agreement.
This Note is a registered Note and is transferable only by surrender
thereof at the principal office of the Company as specified in the Amended Note
Purchase Agreement, duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of this Note or its attorney
duly authorized in writing.
Under certain circumstances, as specified in the Amended Note Purchase
Agreement, the principal of this Note (in certain cases together with any
applicable Make-Whole Amount) may be declared due and payable in the manner and
with the effect provided in the Amended Note Purchase Agreement.
THIS NOTE AND THE AMENDED NOTE PURCHASE AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
SERV-TECH, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
-2-
34
EXHIBIT B
PROPERTY TO BE ENCUMBERED
I. PERSONAL PROPERTY. The personal property of Serv-Tech, Inc. and certain
of its subsidiaries (collectively, the "Debtors" and individually, a "Debtor"),
including accounts, inventory, general intangibles, equipment, titled vehicles,
contracts, patents, trademarks, instruments, documents and capital stock, now
owned or hereafter acquired, and the products and proceeds of such collateral.
II. REAL PROPERTY. The real property of certain Debtors, and improvements
thereon, which property is located at:
A. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
B. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
C. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
D. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
E. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
F. ▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇ of ▇▇▇▇▇ ▇▇▇▇▇, Parish of Plaquemines,
Louisiana
G. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ of East Baton
Rouge, Louisiana
H. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
35
SAVE AND EXCEPT THE FOLLOWING:
Chemisolv Holdings, Inc.
Chemisolv, Inc.
Chemisolv, Ltd.
All assets of above companies.
Delta Maintenance, Inc.
Restrictive cash for securing insurance claims.
Seco Industries, Inc.
Restrictive cash for securing insurance claims.
Serv-Tech, Inc.
L.100,000 restrictive cash held for the account of Chemisolv Ltd. by
Royal Bank of Scotland (security for working capital loan).
Restrictive cash for securing insurance claims.
Serv-Tech EPC, Inc.
All assets of a certain division, Constructors and Fabricators.
All rights, contracts, agreements, documents and instruments related directly
or indirectly to the FINCHAA Project.
36
EXHIBIT C
COLLATERAL DOCUMENTATION LIST
I. SECURITY AGREEMENT. A Security Agreement dated as of November 12, 1996,
executed by Serv-Tech, Inc. and certain subsidiaries of Serv-Tech, Inc.
(collectively, the "Debtors" or individually, a "Debtor") for the benefit of
Texas Commerce Bank National Association
II. CERTIFICATES OF TITLE. Certificates of title covering titled vehicles
registered to certain Debtors under the Texas Certificate of Title act or
similar law other jurisdictions
III. UCC FINANCING STATEMENTS. Individual UCC Financing statements in the
name of each Debtor, to be filed centrally in all of the jurisdictions in which
such Debtor has ongoing operations
IV. DEEDS OF TRUST AND MORTGAGES. Deed of trust and mortgages encumbering
the real property of certain Debtors, and improvements thereon, which property
is located at:
A. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
B. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
C. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
D. ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
E. ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
F. ▇▇▇▇ ▇▇▇▇▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇ of ▇▇▇▇▇ ▇▇▇▇▇, Parish of Plaquemines,
Louisiana
G. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ of East Baton
Rouge, Louisiana
H. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
37
EXHIBIT D
SCHEDULE OF RESTATED SENIOR NOTES WITH PAYEES
Note Principal
Payee Registration No. Amount
----- ---------------- -----------
Principal Mutual Life Insurance Company R-_ $12,000,000
Principal Mutual Life Insurance Company R-_ $ 1,000,000
TMG Life Insurance Company R-_ $ 750,000
Berkshire Life Insurance Company R-_ $ 750,000
The Security Mutual Life Insurance Company R-_ $ 500,000
D-1
38
EXHIBIT E
FORM OF CLOSING OPINION FROM
COMPANY'S COUNSEL
39
EXHIBIT F
SECRETARY'S CERTIFICATE
SERV-TECH, INC.
I, _______________________, hereby certify that I am the duly elected,
qualified and acting Secretary of SERV-TECH, INC., a Texas corporation (the
"Company"), and that, as such, I have access to its corporate records and am
familiar with the matters certified herein, and I am authorized to execute and
deliver this certificate in the name and on behalf of the Company, and that:
1. This certificate is being delivered pursuant to SECTION
6.2(g) of the Company's Note Restructuring Amendment to Note Purchase
Agreements, dated as of November __, 1996 (the "Note Restructuring
Amendment"), with the Noteholders listed therein (the "Noteholders").
The terms used in this certificate and not defined herein have the
respective meanings specified in the separate Note Purchase Agreements,
each dated as of June 1, 1993 (collectively, the "Original Note
Purchase Agreement," and, as amended by the Note Restructuring
Agreement, the "Amended Note Purchase Agreement"), with the
Noteholders.
2. Attached hereto as Attachment A is a true and correct
copy of resolutions, and the preamble thereto, adopted by the Board of
Directors on November 7, 1996, and such resolutions and preamble set
forth in Attachment A hereto were duly adopted by the Board of
Directors and are in full force and effect on and as of the date
hereof, not having been amended, altered or repealed, and such
resolutions are filed with the records of the Board of Directors.
3. The documents listed below were executed and delivered
by the Company pursuant to and in accordance with the resolutions set
forth in Attachment A hereto and such documents as executed are
substantially in the form submitted to and approved by the board of
directors of the Company as aforementioned:
(a) The Note Restructuring Amendment, providing for
the amendment of the Original Note Purchase Agreement and the
issuance by the Company of its Restated Senior Notes due June
15, 2003 (the "Restated Senior Notes"); and
(b) the Restated Senior Notes; and
(c) The Security Agreement, Deeds of Trust and
Mortgages, pursuant to which the Company and certain affiliates
of the Company pledge collateral as security for the company's
obligations under the Amended Note Purchase Agreement.
40
4. Except as provided in the documents attached hereto as
Attachment B, the bylaws of the Company have been in full effect in
their present form at all times from June 22, 1993 to the date hereof,
inclusive, without modification or amendment in any respect.
5. Each of the following named persons is and has been a
duly elected, qualified and acting officer of the Company holding the
office or offices set forth below opposite such person's name and has
been duly authorized to execute the Note Restructuring Amendment and
each other document to be executed and delivered in connection with the
execution and delivery of the Note Restructuring Amendment:
Name Office Signature
---- ------ ---------
------------------------------ ------------------------- --------------------
------------------------------ ------------------------- --------------------
6. The signature appearing opposite the name of each such
person set forth above is such person's genuine signature.
7. Attached hereto as Attachment [C] is a good standing
certificate with respect to the Company from the State of Texas dated
October 16, 1996.
8. Except as provided in the documents attached hereto as
Attachment D, there have been no amendments or supplements to or
restatements of the articles of incorporation of the Company from June
22, 1993 to the date hereof, inclusive.
IN WITNESS WHEREOF, I have executed this certificate in the name and on
behalf of the Company on November __, 1996.
SERV-TECH, INC.
By:
---------------------------------
Name:
-------------------------------
Secretary
-2-
41
OFFICER'S CERTIFICATE
SERV-TECH, INC. AFFILIATES
I, ▇▇▇▇▇ ▇▇▇▇, hereby certify that I am the duly elected, qualified and
acting executive officer of each of the undersigned companies (collectively,
the "Companies," or individually, a "Company"), and that, as such, I have
access to their corporate records and am familiar with the matters certified
herein, and I am authorized to execute and deliver this certificate in the name
and on behalf of the Companies, and that:
1. This certificate is being delivered in connection with the
Companies' execution of four separate Guaranty Agreements (the "Guaranty
Agreements"), in favor of Principal Mutual Life Insurance Company, TMG
Life Insurance Company, Berkshire Life Insurance Company and The
Security Mutual Life Insurance Company (collectively, the
"Noteholders"), respectively, pursuant to which the Companies jointly
and severally guarantee the performance of certain obligations of
Serv-Tech, Inc. (the "Borrower") to the Noteholders.
2. Attached hereto as Attachment E are true and correct copies
of resolutions, and the preambles thereto, separately adopted by the
Board of Directors of each Company, and such resolutions and preambles
were duly adopted by each Company's Board of Directors and are in full
force and effect on and as of the date hereof, not having been amended,
altered or repealed, and such resolutions are filed with the records of
each Company's Board of Directors.
3. The Guaranty Agreements were executed and delivered by the
Companies pursuant to and in accordance with the resolutions attached
hereto and, as executed, are substantially in the form submitted to and
approved by the Board of Directors of each Company as aforementioned.
4. The signature appearing above the name of each person named
in the resolutions set forth in Attachment E is such person's genuine
signature.
42
IN WITNESS WHEREOF, I have executed this certificate in the name and on
behalf of the Companies on November __, 1996.
COMPANIES:
ADVANCED REFRACTORY SERVICES, INC.
AMERICAN MECHANICAL SERVICES, INC.
CASTING CONCEPTS, INC.
CON-SEAL, INC.
DM ACQUISITION CORPORATION
ENTERPRISE SERVICE CORPORATION
▇.▇. ▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.
▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇▇ INDUSTRIAL SERVICES CORPORATION
HILL TECHNICAL SERVICES, INC.
MAC-TECH, INC.
ST PIPING, INC.
TOTAL REFRACTORY SYSTEMS, INC.
TURNAROUND MAINTENANCE, INC.
UNITED INDUSTRIAL MATERIALS, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Vice President
SECO INDUSTRIES, INC.
SERV-TECH ENGINEERS, INC.
SERV-TECH EPC, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President of
Finance and Administration
PRS HOLDING, INC.
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
-2-
43
DELTA MAINTENANCE, INC.
PETRO RECOVERY SYSTEMS, INC.
SERV-TECH CONSTRUCTION AND MAINTENANCE, INC.
(FORMERLY SERV TECH EPC - HOUSTON, INC.)
SERV-TECH OF NEW MEXICO, INC.
SERV-TECH SERVICES, INC.
TERMINAL TECHNOLOGIES, INC.
TIPCO ACQUISITION CORP.
By:
---------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇
Title: President
-3-
44
EXHIBIT G
OFFICERS' CLOSING CERTIFICATE
SERV-TECH, INC.
We, __________________________ and _______________________, each hereby
certify that we are, respectively, the _______________________________ and the
________________________________ of SERV-TECH, INC., a Texas corporation (the
"Company"), and that, as such, we have access to its corporate records and are
familiar with the matters certified herein, and we are authorized to execute
and deliver this certificate in the name and on behalf of the Company, and that:
1. This certificate is being delivered pursuant to SECTION
6.2(h) of the Company's Note Restructuring Amendment to Note Purchase
Agreements, dated as of November __, 1996 (the "Note Restructuring
Agreement"), with the Noteholders listed therein (the "Noteholders").
The terms used in this certificate and not defined herein have the
respective meanings specified in the separate Note Purchase Agreements,
each dated as of June 1, 1993 (collectively, the "Note Purchase
Agreement"), with each of the purchasers listed in Annex 1 thereto, as
amended by the Note Restructuring Amendment.
2. Except as disclosed and waived pursuant to SECTION 5.2 of
the Note Restructuring Amendment, the warranties and representations
contained in SECTION 2 of the Note Purchase Agreement and in SECTION 7
of the Note Restructuring Amendment are true in all material respects on
the date hereof with the same effect as though made on and as of the
date hereof.
3. The Company has performed and complied with all agreements
and conditions contained in the Note Purchasing Agreement and the Note
Restructuring Amendment that are required to be performed or complied
with by the Company before or at the date hereof, except as disclosed
and waived.
4. _________________________, from June 22, 1993 to the date
hereof, inclusive, has been and is the duly elected, qualified and
acting Secretary of the Company, and the signature appearing on the
Certificate of Secretary dated the date hereof and delivered to the
Noteholders contemporaneously herewith is such person's genuine
signature.
45
IN WITNESS WHEREOF, we have executed this certificate in the name and
on behalf of the Company on November __, 1996.
SERV-TECH, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-2-
46
EXHIBIT H
LIST OF AFFILIATES FOR WHICH
GOOD STANDING CERTIFICATES
HAVE BEEN DELIVERED
47
FINANCIAL STATEMENTS
SERV-TECH, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, December 31,
1996 1995
----------- ------------
(unaudited)
ASSETS
CURRENT ASSETS;
Cash and cash equivalents........................................................ $ - $ 287,356
Accounts receivable, net......................................................... 31,417,263 31,941,127
Costs and estimated earnings in excess of ▇▇▇▇▇▇▇▇ on uncompleted contracts...... 1,958,757 2,111,396
Inventory........................................................................ 2,255,765 1,700,462
Prepaid expenses................................................................. 1,105,657 768,161
Deferred income taxes............................................................ 4,241,425 4,345,398
Net current assets from discontinued operations.................................. 9,289,150 16,865,749
----------- ------------
Total current assets........................................................... 50,268,017 58,019,649
PROPERTY, PLANT AND EQUIPMENT, NET................................................. 27,009,012 29,325,986
INTANGIBLE ASSETS, NET............................................................. 14,552,276 14,748,088
OTHER ASSETS....................................................................... 2,844,592 1,884,763
DEFERRED INCOME TAXES.............................................................. 433,040 -
NET NON-CURRENT ASSETS, DISCONTINUED OPERATIONS.................................... 1,968,702 3,623,219
----------- ------------
Total assets................................................................... $97,875,639 $107,601,705
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable................................................................. $13,712,242 $ 13,295,347
Accrued liabilities.............................................................. 14,103,082 13,545,808
▇▇▇▇▇▇▇▇ in excess of costs and estimated earnings on uncompleted contracts...... 387,084 359,415
Revolving line of credit......................................................... 14,500,000 6,500,000
Income taxes payable............................................................... - 295,865
Other.............................................................................. 545,507 207,732
----------- ------------
Total current liabilities...................................................... 43,247,915 34,204,167
LONG-TERM DEBT, LESS CURRENT MATURITIES............................................ 15,170,000 15,170,000
DEFERRED INCOME TAXES.............................................................. - 4,812,740
MINORITY INTEREST.................................................................. 534,456 484,952
CONTINGENCIES (Note 5)
STOCKHOLDERS' EQUITY:
Preferred stock, $1 par value; 2,000,000 shares authorized; no shares issued
and outstanding................................................................ - -
Common stock, par value $.50, authorized 20,000,000 shares; issued and
outstanding shares of 6,806,849 and 6,752,671, respectively.................... 3,403,425 3,376,336
Additional paid-in capital....................................................... 43,817,584 43,489,763
Retained earnings (deficit)...................................................... (7,185,958) 7,675,586
Treasury stock, at cost, 120,606 and 193,358 shares, respectively................ (961,816) (1,546,857)
Cumulative translation adjustment................................................ (149,967) (64,982)
----------- ------------
Total stockholders' equity..................................................... 38,923,268 52,929,846
----------- ------------
Total liabilities and stockholders' equity..................................... $97,875,639 $107,601,705
=========== ============
The accompanying notes are an integral part of the consolidated financial
statements.
-3-
48
SERV-TECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(unaudited)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------------- ----------------------------
1996 1995 1996 1995
----------- ----------- ----------- ------------
Revenues ............................................ $ 38,471,348 $45,876,770 $ 71,581,267 $106,201,050
Costs of services ................................... 30,752,085 37,569,722 56,362,019 87,076,932
------------ ----------- ------------- ------------
Gross profit ...................................... 7,719,263 8,307,048 15,219,248 19,124,118
Selling, general and administrative expenses ........ 11,684,617 7,888,115 18,829,266 16,185,301
------------ ----------- ------------ ------------
Operating income (loss) ........................... (3,965,354) 418,933 (3,070,018) 2,938,817
Other income (expense):
Interest expense .................................. (527,704) (501,833) (1,070,268) (914,395)
Interest income .................................. 39,926 12,375 50,730 40,059
Other, net ........................................ (34,825) 44,025 (24,727) 113,342
------------ ----------- ------------- ------------
(522,603) (445,433) (1,044,265) (760,994)
------------ ----------- ------------- -----------
Minority interest ................................... (14,532) (55,891) (49,504) (369,279)
Equity in earnings of affiliates .................... - - - (24,331)
------------ ----------- ------------- ------------
Pre-tax earnings (loss) from continuing operations .. (4,502,489) (82,391) (4,163,887) 1,784,213
Income tax benefit (expense) ........................ 1,175,000 (4,000) 1,036,000 (911,000)
Net income (loss) from continuing operations ........ (3,327,489) (86,391) (3,127,787) 873,213
Income (loss) from discontinued operations,
net of income taxes ............................... (6,178,334) 752,679 (7,407,208) 1,310,397
Estimated loss on disposal of discontinued
operations, net of tax benefit .................... (4,326,546) - (4,326,546) -
------------ ----------- ------------ ------------
Net income (loss) ................................... (13,832,369) 666,288 (14,861,541) 2,183,610
============ =========== ============ ============
Earnings (loss) per share from continuing
operations ........................................ (0.50) (0.01) (0.47) 0.13
Earnings (loss) per share from discontinued
operations ........................................ (1.57) 0.11 (1.76) 0.19
------------ ----------- ------------ ------------
Net income (loss) per share ......................... (2.07) 0.10 (2.23) 0.32
============ =========== ============ ============
Weighted average common shares outstanding .......... 6,672,561 6,734,343 6,650,039 6,726,574
============ =========== ============ ============
The accompanying notes are an integral part of the
consolidated financial statements.
-4-
49
SERVE-TECH, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
for the six months ended June 30, 1996 and 1995
(unaudited)
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) from continuing operations...... $(3,127,787) $ 873,213
Adjustments:
Depreciation and amortization..................... 3,030,054 3,133,559
Provision for losses on accounts and notes
receivable...................................... 48,775 382,648
Deferred income taxes............................. (1,036,000) (532,542)
Non-cash charges.................................. 1,387,207 -
Equity in losses of affiliates.................... - 24,331
Minority interest................................. 49,504 369,279
Other............................................. 94,609 96,781
----------- -----------
446,362 4,347,269
Change in assets and liabilities, not of effect
from acquisitions of businesses:
Accounts receivable............................ 475,089 (6,838,688)
Net change in costs, estimated earnings and
▇▇▇▇▇▇▇▇ on uncompleted contracts............ 180,308 176,677
Inventory...................................... (555,303) (758,065)
Prepaid expenses and other current assets...... (337,495) 268,227
Other assets................................... (959,829) (707,052)
Accounts payable............................... 416,895 3,969,572
Accrued liabilities............................ 355,710 (265,775)
----------- -----------
Net cash provided by operating activities.... 21,737 192,165
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................ (1,085,853) (1,423,125)
Payments to discontinued operations............. (7,100,000) (4,400,000)
Investments in and advances to affiliates....... - (290,263)
Acquisition of businesses, net of cash
acquired...................................... - (625,514)
Intangible assets............................... (328,957) (67,530)
Proceeds from disposition of property, plant
and equipment................................. - 140,000
----------- -----------
Net cash used in investing activities........ (8,514,810) (6,666,432)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt.................. 13,756,450 13,000,000
Principal payments of debt...................... (5,550,733) (7,827,472)
----------- -----------
Net cash provided by financing activities.... 8,205,717 5,172,528
----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS...................................... (287,356) (1,301,739)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD... 287,356 1,301,739
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......... $ - $ -
=========== ===========
The accompanying notes are an integral part of the consolidated financial
statements.
-5-
50
ANNEX 2
INDEBTEDNESS OF COMPANY AND RESTRICTED SUBSIDIARIES**
PAGE 1 OF 6
Continued Operations Balance at Current
Notes Payable: Description 9/30/96 Portion Collateral
-------------------- ----------- ---------- ------- ----------
Associate Leasing Promissory Note $ 8,744 $ 8,744 Secured - Equipment
Associate Leasing Promissory Note 8,744 8,744 Secured - Equipment
Control and Inspection
Services, Inc. Promissory Note 212,500 42,500 Unsecured
Security Mutual Life
Insurance Co. Promissory Note 500,000 0 Secured
Berkshire Life Insurance
Co. Promissory Note 750,000 0 Secured
TMG Life Insurance Co. Promissory Note 750,000 0 Secured
Principal Mutual Life
Insurance Co. Promissory Note 1,000,000 0 Secured
Principal Mutual Life
Insurance Co. Promissory Note 12,000,000 0 Secured
Texas Commerce Bank Advances Under
Loan Agreement 14,500,000 14,500,000 Secured
----------- -----------
SUBTOTAL $29,729,988 $14,559,988
=========== ===========
** Includes Annex 2 Supplement
51
PAGE 2 OF 6
Discontinued Operations Balance at Current
Notes Payable: Description 9/30/96 Portion Collateral
----------------------- ----------- ---------- ------- ----------
▇.▇. ▇▇▇▇▇▇▇▇ Arkel Bonus Promissory Note $ 34,199 $ 34,199 Unsecured
▇.▇. ▇▇▇▇▇▇▇▇ Children Promissory Note 24,500 24,500 Unsecured
▇.▇. ▇▇▇▇▇▇▇▇ (LAFLACA) Promissory Note 102,135 102,135 Unsecured
▇.▇. ▇▇▇▇▇▇▇▇ Promissory Note 20,500 20,500 Unsecured
Safeline Leasing Promissory Note 11,927 8,943 Secured - Equipment
Constructors &
Fabricators, Inc. Promissory Note 1,425,000 237,500 Secured - Accounts
----------- ----------- Receivable, Equipment
SUBTOTAL $ 1,618,261 $ 427,777
=========== ===========
52
PAGE 3 OF 6
Continued Operations Balance at Current
Guaranties: Description 9/30/96 Portion Collateral
-------------------- ----------- ---------- ------- ----------
Royal Bank of Scotland Overdraft Facility for 285,366* 285,366* Restricted Cash from
Chemisolv, Ltd. Serv-Tech, Inc.,
secured by A/R
and equipment
----------- -----------
SUBTOTAL $ 285,366* $ 286,366*
*Exchange rate of 1.563L. to
U.S. $ at 9/30/96
TOTAL $31,633,615 $15,273,131
=========== ===========
53
PAGE 4 OF 6
LETTERS OF CREDIT:
ABN-AMRO Bank
▇. ▇. ▇▇▇▇▇▇▇▇ & Associates, Inc.
Finchaa Project
Letters of Credit @ 9/30/96
U.S $
Beneficiary Description of L/C Commitment L/C No. Issue Date Term Date Commitment
----------- ------------------ ---------- ------- ---------- --------- ----------
Finchaa Sugar Factory Performance-Birr ETB 7,540,406 S601225 11/01/94 40 months $1,391,218.82
Finchaa Sugar Factory Performance-USD $ 7,001,681 S601224 11/01/94 40 months 7,001,681.00
Finchaa Sugar Factory Advance Payment-USD $ 4,845,435 S601241 11/17/94 28 months 4,845,435.00
Finchaa Sugar Factory Advance Payment-Birr ETB10,607,124 S601242 11/17/94 28 months 1,975,033.95
--------------
Total $15,195,368.77
==============
(Exchange Rate of ETB 5.42/$1 approx. @8/31/96)
54
Page 5 of 6
LETTERS OF CREDIT:
Texas Commerce Bank
Revolving Credit Line $35,000,000
September 30, 1996
EXPIRATION DESCRIPTION U.S. $ EXPIRATION
BENEFICIARY APPLICANT DATE OF L/C L/C NO. COMMITMENT COMMITMENT DATE
----------- --------- ---------- ----------- ------- ---------- ---------- ----------
National Union Fire Workers' Comp 11/01/97 w/
Insurance Co. STI Standby Insurance I-412953 $ 382,000.00 $ 382,000.00 renewals
National Union Fire Workers' Comp 06/30/97 w/
Insurance Co. STI Standby Insurance I-420972 224,000.00 224,000.00 renewals
National Union Fire Workers' Comp 11/26/96 w/
Insurance Co. STI Standby Insurance I-429895 790,000.00 790,000.00 renewals
Liberty Mutual Workers' Comp 05/26/97 w/
Insurance Co. STI Standby Insurance I-438893 500,000.00 500,000.00 renewals
National Union Fire Workers' Comp 01/01/97 w/
Insurance Co. STI Standby Insurance I-451142 613,266.00 613,266.00 renewals
Westdeutsche Indus- WIV Guarantee 03/31/97 w/
trienstandhaltungs STI- Standby ▇. ▇▇▇▇▇ I-444335 FF 2,230,000.00 429,300.21 renewals
Eur.
National Union Fire Workers' Comp 06/01/97 w/
Insurance Co. STI Standby Insurance I-447624 1,601,016.00 1,601,016.00 renewals
National Union Fire Workers' Comp 06/01/97 w/
Insurance Co. SECO Standby Insurance I-448690 113,000.00 113,000.00 renewals
Coastal Aruba Performance
Refining Co. NC ST EPC Standby Guarantee I-458218 301,485.00 301,485.00 12/18/96
-------------
$4,954,067.21
55
PAGE 6 OF 6
COMMERCIAL LETTERS OF CREDIT FOR
FINCHAA PROJECT:
Whitney National Bank
September 30, 1996
TYPE ISSUANCE TOTAL EXPIRY AMOUNT
BENEFICIARY APPLICANT L/C DESCRIPTION DATE L/C NO. COMMITMENT DATE REMAINING
----------- --------- ---- ----------- -------- ------- ---------- ------ ---------
Allis Mineral Sys. ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000209 07/13/95 C33280 $ 250,000.00 01/20/96 $ 0.00
Hindustan ▇▇▇▇-
▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000216 07/13/95 C33281 546,442.50 04/21/96 0.00
Varco ▇▇▇▇▇▇ Bldg. ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000206 07/13/95 C33282 133,120.70 02/22/96 0.00
Western States
Machine ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000213 07/13/95 C33283 761,696.90 01/31/96 0.00
▇▇▇▇ Indus., Inc. ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000207 07/13/95 C33284 2,413,610.50 11/15/96 241,361.05
Codistil S/A Dedini ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000241 09/13/95 C33375 2,523,542.00 06/30/96 0.00
Dresser Rand ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000247 10/25/95 C33455 565,122.00 09/06/96 282,561.00
Dearborn Mid-West
Conveyor ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000612 05/17/96 C33808 628,349.75 11/30/96 628,349.75
Paharpur Cooling
Towers Ltd. ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000635 05/17/96 C33807 15,095.00 10/16/96 15,095.00
▇▇▇▇▇▇▇▇▇ Engr. ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000238,205 05/22/96 C33815 1,284,600.00 10/06/96 1,180,740.00
Standard Serv. &
Consultant ▇.▇. ▇▇▇▇▇▇▇▇ Comml PO# FA000657,658,
666 08/23/96 C34017 255,288.75 11/10/96 255,288.75
------------- -------------
TOTAL $9,376,868.10 $2,603,395.55
============= =============
56
ANNEX II SUPPLEMENT
Indebtedness
All indebtedness and obligations of every kind directly or indirectly
arising pursuant to or evidenced by any and all of the following agreements and
instruments, including all attachments, exhibits and schedules to any of them,
as the same may be amended from time to time:
1. Note Restructure Amendment to Note Purchase Agreements dated as of
November 12, 1996 among Serv-Tech, Inc., Principal Mutual Life Insurance
Company, TMG Life Insurance Company, The Security Mutual Life Insurance
Company, and Berkshire Life Insurance Company.
2. Restated Senior Note due June 15, 2003, No. R- , issued as of
November 12, 1996 in the original principal amount of $12,000,000 in favor of
Principal Mutual Life Insurance Company.
3. Restated Senior Note due June 15, 2003, No. R- , issued as of
November 12, 1996 in the original principal amount of $1,000,000 in favor of
Principal Mutual Life Insurance Company.
4. Restated Senior Note due June 15, 2003, No. R- , issued as of
November 12, 1996 in the original principal amount of $750,000 in favor of
Berkshire Life Insurance Company.
5. Restated Senior Note due June 15, 2003, No. R- , issued as of
November 12, 1996 in the original principal amount of $500,000 in favor of
The Security Mutual Life Insurance Company.
6. Restated Senior Note due June 15, 2003, No. R- , issued as of
November 12, 1996 in the original principal amount of $750,000 in favor of
TMG Life Insurance Company.
7. Guaranty dated as of November 12, 1996 by Serv-Tech, Inc. and certain
subsidiaries thereof in favor of Principal Mutual Life Insurance Company.
8. Guaranty dated as of November 12, 1996 by Serv-Tech, Inc. and certain
subsidiaries thereof in favor of TMG Life Insurance Company.
57
9. Guaranty dated as of November 12, 1996 by Serv-Tech, Inc. and certain
subsidiaries thereof in favor of The Security Mutual Life Insurance Company.
10. Guaranty dated as of November 12, 1996 by Serv-Tech, Inc. and certain
subsidiaries thereof of Berkshire Life Insurance Company.
11. First Amended and Restated Credit Agreement $23,500,000 Reducing
Revolving Credit Loan dated as of November 12, 1996 among Serv-Tech, Inc.,
certain subsidiaries thereof, and Texas Commerce Bank National Association.
12. Revolving Credit Note dated November 12, 1996 by Serv-Tech, Inc. issued
to Texas Commerce Bank National Association in the original principal amount of
$12,786,050.
13. Revolving Credit Note dated November 12, 1996 by Serv-Tech, Inc. issued
to Bank One, Texas, NA in the original principal amount of $6,713,950.
14. Security Agreement dated November 12, 1996 by Serv-Tech, Inc. and
certain subsidiaries thereof for the benefit of Texas Commerce Bank National
Association.
15. Deed of Trust, Security Agreement, Fixtures Financing Statement and
Assignment of Rents and Leases dated as of November 12, 1996 from Serv-Tech,
Inc. and certain subsidiaries thereof to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as trustee for the
benefit of Texas Commerce Bank National Association.
16. Deed of Trust, Security Agreement, Fixtures Financing Statement and
Assignment of Rents and Leases dated as of November 12, 1996 from ▇▇▇▇▇▇▇
Industrial Services Corporation thereof to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as trustee for the
benefit of Texas Commerce Bank National Association.
17. Deed of Trust, Security Agreement, Fixtures Financing Statement and
Assignment of Rents and Leases dated as of November 12, 1996 from Total
Refractory Systems, Inc. thereof to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as trustee for the
benefit of Texas Commerce Bank National Association.
18. Mortgage, Security Agreement & Fixtures Financing Statement dated as of
November 12, 1996 from Serv-Tech, Inc. to Texas Commerce Bank National
Association.
2
58
19. Mortgage, Security Agreement & Fixtures Financing Statement dated as of
November 12, 1996 from SECO Industries, Inc. to Texas Commerce Bank National
Association.
20. Intercredit Agreement dated as of November 12, 1996 among Principal
Mutual Life Insurance Company, TMG Life Insurance Company, The Security Mutual
Life Insurance Company, and Berkshire Life Insurance Company.
21. Amended and Restated Continuing Reimbursement Agreement dated as of
November 12, 1996 between ABN AMRO Bank N.V. and ▇.▇. ▇▇▇▇▇▇▇▇ & Associates,
Inc.
22. Amended and Restated Guaranty dated as of November 12, 1996 by
Serv-Tech, Inc. and certain subsidiaries thereof.
59
LIENS
Attached are the known UCC filings for the Company and subsidiaries. The
following exceptions to these filings are listed below.
1. The UCC filing by Litwin Engineers and Constructors, Inc. is to be
terminated. The project was completed last year and all parties paid. We
have requested ▇▇▇▇▇▇ to issue the termination.
2. The UCC filings by Serv-Tech, Inc. (STI) as the Secured Party were placed at
the time STI acquired the ▇▇▇▇▇▇▇ Companies for an existing debt owed to
STI.
3. All of the UCC filings for ▇. ▇. ▇▇▇▇▇▇▇▇ and Associates represents the
activities of the non-core business which was purchased by the ▇▇▇▇▇▇▇▇
principals as indicated by the enclosed Assignment, ▇▇▇▇ of Sale, Conveyance
and Assumption, and Stock Purchase Agreement. This represents assets and
liabilities which were not assumed by Serv-Tech in the ▇▇▇▇▇▇▇▇ acquisition.
Exhibit A to the assignment represents the Assets and Liabilities that were
acquired in the Agreement.
4. All other UCC filings are for various equipment purchases, to include phone
and computer equipment in the ordinary course of business.
60
EXISTING LIENS
Debtor Secured Party Filing UCC
or Lessee or Lessor Jurisdiction Recordation
--------------------------------------------------------------------------------------------------
United Industrial Best Material Handling, Inc. Texas/ No. 93-043792
Materials, Inc. 5450 Navigation Secretary of March 5, 1993
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
Serv-Tech, Inc. MetLife Capital, Limited Texas/ No. 92-200577
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. Partnership Secretary of October 14, 1992;
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ C-97550 the State Amended by
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ No. 92-75812
December 10, 1992
--------------------------------------------------------------------------------------------------
Serv-Tech, Inc. Commercial Equipment Texas/ No. 93-259927
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. Leasing Co., Inc. Secretary of February 8, 1993
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
Serv-Tech, Inc. Toshiba America Texas/ No. 95-058119
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. Information Systems, Inc. Secretary of March 24, 1995
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
Serv-Tech, Inc. Comdisco, Inc. Texas/ No. ▇▇-▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ Secretary of April 12, 1995
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇; the State Amended by;
and Assigned to No. 95-670281
The CIT Group/Equipment June 8, 1995;
Financing, Inc. Assigned to CIT by
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇. ▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ June 8, 1995
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------------
61
--------------------------------------------------------------------------------------------------
Delta Maintenance, Inc. ORIX Credit Alliance, Inc. Louisiana/ No. 09-91303
9191 Veterans ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇. #▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ April 26, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Tax ID No. ▇▇-▇▇▇▇▇▇▇
Tax ID No. ▇▇-▇▇▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇ & Valley Sugar Properties, Inc. Texas/ No. 91-230202
Associates, d.b.a. Belle ▇.▇. ▇▇▇ ▇▇▇ Secretary of December 2, 1991
▇▇▇▇▇▇ Farms, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇ & Valley Sugar Properties, Inc. Texas/ No. 91-230203
Associates, d.b.a. ▇.▇. ▇▇▇ ▇▇▇ Secretary of December 2, 1991
LaFlaca Cane Farms, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇ & Valley Sugar Properties, Inc. Texas/ No. 91-230204
Associates, d.b.a. GHD ▇.▇. ▇▇▇ ▇▇▇ Secretary of December 2, 1991
Corporation . ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
Laflaca Cane Farms, Inc. Valley Sugar Properties, Inc. Texas/ No. 92-146246
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. P.O. Box 120 Secretary of July 23, 1992
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
---------------------------------------------------------------------------------------------------
GHD Corporation Valley Sugar Properties, Inc. Texas/ No. 92-146247
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. P.O. Box 120 Secretary of July 23, 1992
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
---------------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Farms, Inc. Valley Sugar Properties, Inc. Texas/ No. 92-146248
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. P.O. Box 120 Secretary of July 23, 1992
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
---------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇ & Valley Sugar Properties, Inc. Texas/ No. 92-146249
Associates, Inc. ▇.▇. ▇▇▇ ▇▇▇ Secretary of July 23, 1992
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------
62
---------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇ & Valley Sugar Properties, Inc. Texas/ No. 92-146250
Associates, Inc. ▇.▇. ▇▇▇ ▇▇▇ Secretary of July 23, 1992
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, et al.
---------------------------------------------------------------------------------------------------
GHD Corporation, et al. Valley Sugar Properties, Inc. Texas/ No. 93-124581
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. P.O. Box 120 Secretary of June 25, 1992
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
and ▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
---------------------------------------------------------------------------------------------------
GHD Corporation, et al. Valley Sugar Properties, Inc. Texas/ No. 94-230382
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. P.O. Box 120 Secretary of November 28, 1994
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ the State
and ▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
---------------------------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇▇▇▇ & Valley Sugar Properties, Inc. Louisiana/ No. 17-1078198
Associates, Inc. et al. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. East Baton June 5, 1992
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Rouge Parish/
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Clerk of Court
---------------------------------------------------------------------------------------------------
63
ANNEX 3
Subsidiaries and Affiliates
Percentage State/Country Date of Date Acquired, Federal ID Nature of
Subsidiaries and Affiliates of Ownership of Incorporation Incorporation if applicable Number Business
--------------------------- ------------ ---------------- ------------- -------------- ---------- ---------
Advanced Refractory
Services, Inc. 100% Nevada 12/26/91 06/14/94 ▇▇-▇▇▇▇▇▇▇ Refractory services
American Mechanical
Services, Inc. 100% Louisiana 03/08/85 09/06/96 ▇▇-▇▇▇▇▇▇▇ Industrial maintenance
and constructing and
fabricating industrial
equipment
Casting Concepts, Inc. 100% Texas 12/17/93 06/14/94 ▇▇-▇▇▇▇▇▇▇ Fabrication
Chemi-Solv, Inc. 50% Texas 10/05/87 03/14/91 ▇▇-▇▇▇▇▇▇▇ Performance chemical
development and sales -
U.S.
50% - 10/05/87 11/07/94 -
Chemisolv Holdings, Inc. 50% Delaware 03/14/91 03/14/91 ▇▇-▇▇▇▇▇▇▇ Holding company
50% - 03/14/91 11/07/94 -
Chemisolv Limited 50% United Kingdom 06/21/85 03/14/91 N/A Performance chemical
development and sales -
U.K.
50% - 06/21/85 11/07/94 -
Con-Seal, Inc. 100% Nevada 11/07/89 06/14/94 ▇▇-▇▇▇▇▇▇▇ Refractory services
Delta Maintenance, Inc. 100% Louisiana 09/15/72 09/15/92 ▇▇-▇▇▇▇▇▇▇ Turnaround maintenance
services
DM Acquisition Corporation 100% Nevada 09/14/92 N/A ▇▇-▇▇▇▇▇▇▇ Holding company
Enterprise Service Corporation 100% North Carolina 10/01/91 N/A ▇▇-▇▇▇▇▇▇▇ Aviation
▇. ▇. ▇▇▇▇▇▇▇▇ & Associates,
Inc. 100% Louisiana 06/25/68 10/25/94 ▇▇-▇▇▇▇▇▇▇ Sugar mill design,
engineering and
construction management
▇▇▇▇▇▇▇ Corporation 100% Nevada 06/19/84 06/19/94 ▇▇-▇▇▇▇▇▇▇ Holding company
▇▇▇▇▇▇▇ Industrial Services
Corporation 100% Nevada 10/21/91 06/14/94 ▇▇-▇▇▇▇▇▇▇ Holding company
Hill Technical Services, Inc. 30% Texas 02/16/94 05/20/94 ▇▇-▇▇▇▇▇▇▇ Heat treating
70% - 02/16/94 04/01/95 -
Mac-Tech, Inc. 100% Texas 12/09/83 N/A ▇▇-▇▇▇▇▇▇▇ Inactive company
Petro Recovery Systems, Inc. 100% Texas 11/03/88 03/14/91 ▇▇-▇▇▇▇▇▇▇ Inactive company
Petrochem Field Services
de Venezuela, S.A. 100% Venezuela 12/21/92 12/21/92 N/A Turnaround maintenance
services
PRS Holding, Inc. 100% Texas 03/13/91 N/A ▇▇-▇▇▇▇▇▇▇ Holding company
Refinery Maintenance
International Limited 100% United Kingdom 09/20/89 N/A Turnaround maintenance
services - U.K.
SECO Industries, Inc. 100% Louisiana 12/23/65 09/20/91 ▇▇-▇▇▇▇▇▇▇ Electrical and
instrumentation
installation
Serv-Tech Construction
and Maintenance, Inc.
(formerly Serv-Tech
EPC - Houston, Inc.) 100% Texas 04/05/90 07/12/94 ▇▇-▇▇▇▇▇▇▇ Construction services
Serv-Tech de Mexico,
S. de ▇.▇. 100% Mexico 03/24/95 N/A STM9503264GA Limited liability
company - for
operations
Serv-Tech Engineers, Inc. 100% Louisiana 09/28/95 N/A ▇▇-▇▇▇▇▇▇▇ Engineering and design
services
Serv-Tech EPC, Inc. 100% Nevada 12/12/94 N/A ▇▇-▇▇▇▇▇▇▇ Engineering,
procurement and
construction services
Serv-Tech Europe GmbH 100% Germany 02/04/92 N/A N/A Turnaround maintenance
services - Europe
Serv-Tech International
Sales, Inc. 100% Virgin Islands 10/03/94 N/A ▇▇-▇▇▇▇▇▇▇ Foreign sales
corporation -
Virgin Islands
Serv-Tech Mexicana,
S. de ▇.▇. 100% Mexico 03/24/95 N/A STM950375URB Limited liability company-
to hold employees
Serv-Tech of New Mexico, Inc. 100% New Mexico 12/28/87 09/24/91 Applied for Turnaround maintenance
services - New Mexico
Serv-Tech Services, Inc. 100% Texas 11/14/83 N/A ▇▇-▇▇▇▇▇▇▇ Administrative company
Serv-Tech Sudamericana, S.A. 98% Venezuela 07/01/94 N/A N/A Turnaround maintenance
services - Venezuela
Serv-Tech, Inc. Parent Texas 01/30/62 N/A ▇▇-▇▇▇▇▇▇▇ Parent company
ST Piping, Inc. 90% Texas 09/13/90 N/A ▇▇-▇▇▇▇▇▇▇ Specialty welding
services
02/28/92
▇▇▇▇▇▇▇ & Associates, Inc. with Merger
merged into Serv-Tech effective
Engineers, Inc. 100% Nevada 09/28/95 05/11/92 ▇▇-▇▇▇▇▇▇▇ Engineering and
design services
Terminal Technologies, Inc. 100% Texas 12/12/91 N/A ▇▇-▇▇▇▇▇▇▇ Tank cleaning for
product storage tanks
TIPCO Acquisition Corp. 100% Texas 04/16/93 N/A Applied for Holding company
Total Refractory Systems, Inc. 100% Nevada 06/19/84 06/14/94 ▇▇-▇▇▇▇▇▇▇ Refractory services
Turnaround Maintenance, Inc. 100% Nevada 12/26/91 06/14/94 ▇▇-▇▇▇▇▇▇▇ Inactive company
United Industrial
Materials, Inc. 100% Nevada 12/26/91 06/14/94 ▇▇-▇▇▇▇▇▇▇ Distribution materials
and supplies