Exhibit 10.68
AMENDMENT TO INTERCREDITOR AGREEMENT
THIS AMENDMENT TO INTERCREDITOR AGREEMENT ("this Amendment") is made and
entered into effective as of the 31st day of July, 2002, by and among FLEET
CAPITAL CORPORATION, a Rhode Island corporation, in its capacity as Agent and as
a lender under the Senior Loan Agreement (as hereinafter defined) (in each such
capacity, "Senior Lender"), EQUUS II INCORPORATED, a Delaware corporation
("Junior Lender"), PETROCON ENGINEERING, INC., a Texas corporation ("Borrower"),
and each of the following (hereinafter, together with Borrower, referred to
individually as a "Loan Party" and collectively as the "Loan Parties"): ENGLOBAL
CORPORATION, formerly known as INDUSTRIAL DATA SYSTEMS CORPORATION, a Nevada
corporation, INDUSTRIAL DATA SYSTEMS, INC., a Texas corporation, IDS
ENGINEERING, INC., a Texas corporation, THERMAIRE, INC., a Texas corporation,
CONSTANT POWER MANUFACTURING, INC., a Texas corporation, IDS ENGINEERING
MANAGEMENT, LC, a Texas limited liability company, TRIANGLE ENGINEERS AND
CONSTRUCTORS, INC., a Texas corporation, PETROCON SYSTEMS, INC., a Texas
corporation, PETROCON ENGINEERING OF LOUISIANA, INC., a Louisiana corporation,
R.P.M. ENGINEERING, INC., a Louisiana corporation, PETROCON CONSTRUCTION
RESOURCES, INC., a Texas corporation, PETROCON TECHNOLOGIES, INC., a Texas
corporation, and ALLIANCE ENGINEERING ASSOCIATES, INC., a Texas corporation.
RECITALS
A. Borrower is indebted to Senior Lender pursuant to that certain Loan and
Security Agreement, dated as of June 15, 1999, between Borrower, certain
subsidiaries of Borrower, and Senior Lender (as amended, restated, extended or
otherwise modified from time to time, including, without limitation, as amended
and restated by that certain Second Amended and Restated Loan and Security
Agreement, dated December 21, 2001, executed by Senior Lender, Borrower, et al.,
and as amended by that certain First Amendment to Second Amended and Restated
Loan and Security Agreement, dated March 26, 2002, executed by Senior Lender,
Borrower, et al., the "Senior Loan Agreement"). All of Borrower's and each other
Loan Party's obligations pursuant to the Senior Loan Agreement and the other
Senior Debt Documents (as defined in the hereinafter defined Intercreditor
Agreement) are secured by liens on and security interests in substantially all
of the now existing and hereafter acquired real and personal property of
Borrower and each other Loan Party (the "Collateral").
B. Borrower is indebted to Junior Lender pursuant to that certain
Promissory Note, dated on or about December 21, 2001, in the original principal
amount of $3,000,000 (as amended, restated, extended or otherwise modified from
time to time, and including all notes issued in replacement of, or in
substitution for, the foregoing, collectively, the "Junior Term Note"), made by
Borrower to Junior Lender. All of Borrower's obligations pursuant to the Junior
Term Note are secured by liens on and security interests in the Collateral.
C. Junior Lender, Senior Lender, and the Loan Parties have entered into
that certain Intercreditor Agreement, dated December 21, 2001 (the
"Intercreditor Agreement"), to set forth the relative rights and priorities of
the respective parties under the Junior Debt Documents (as
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AMENDMENT TO INTERCREDITOR AGREEMENT
defined in the Intercreditor Agreement) and Senior Debt Documents (including,
without limitation, the relative priorities of each party's liens and security
interests in and to the Collateral).
D. Senior Lender and the Loan Parties are executing on or about the date
hereof that certain Second Amendment to Second Amended and Restated Loan and
Security Agreement and Amendment to Other Loan Documents (the "Second Amendment
to Senior Loan Agreement"), whereby, among other things, the Senior Loan
Agreement and the revolving credit facility established thereby are each
extended through June 30, 2005.
E. The consent of Junior Lender is required for such extension pursuant to
Section 10.1 of the Intercreditor Agreement, and Junior Lender has agreed to
give such consent.
F. The parties hereto desire to amend Section 4 of the Intercreditor
Agreement.
G. Accordingly, Senior Lender, Junior Lender and the Loan Parties desire to
amend the Intercreditor Agreement and enter into the agreements as hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE I
Definitions
1.01 Capitalized terms used in this Amendment are defined in the
Intercreditor Agreement, as amended hereby, unless otherwise stated.
ARTICLE II
Amendment to Intercreditor Agreement and Consent by
Junior Lender to Second Amendment to Senior Loan Agreement
2.01 Permitted Payments to Junior Lender. Effective as of the date hereof,
Section 4 of the Intercreditor Agreement is hereby amended and restated to read
in its entirety as follows:
"SECTION 4. Permitted Payments to Junior Lender. Except as otherwise
provided in this Agreement, an Obligated Party may pay to Junior Lender
when due, on a non-accelerated basis, payments of Junior Costs and Expenses
and regularly scheduled payments of principal and interest on the Junior
Term Note (in each case without giving effect to any amendment thereof not
consented to in writing by Senior Lender); provided, however, except as
permitted pursuant to the last sentence of this Section 4, in no event
shall any Obligated Party pay, or Junior Lender take and retain, (i) any
prepayment of principal on the Junior Term Note until the Senior Debt shall
have been paid in full in cash or (ii) any scheduled payment of principal
on the Junior Term Note until the Senior Term Loan shall have been paid in
full in cash. Notwithstanding the foregoing, once each fiscal quarter
Borrower may, if it chooses to do so, make
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AMENDMENT TO INTERCREDITOR AGREEMENT
a prepayment of principal on the Junior Term Note in an amount up to but
not exceeding the Excess Availability (as hereinafter defined), provided
each of the following is true: (i) the Average Daily Availability (as
defined in the Senior Loan Agreement) for the preceding fiscal quarter
exceeded $2,000,000 (the amount in excess of $2,000,000 being referred to
herein as the `Excess Availability'), (ii) no Senior Event of Default
exists on the date of such prepayment, and (iii) after making such
prepayment, the Availability (as defined in the Senior Loan Agreement) on
such date exceeds $2,000,000."
2.02 Consent by Junior Lender to Second Amendment to Senior Loan Agreement.
Effective as of the date hereof, Junior Lender hereby consents to the execution
by Senior Lender and Loan Parties of the Second Amendment to Senior Loan
Agreement and to the consummation of the transactions contemplated therein,
including the extension of the Senior Loan Agreement and the revolving credit
facility established thereby through June 30, 2005.
ARTICLE III
Ratifications
3.01 Ratifications. The terms and provisions set forth in this Amendment
shall modify and supersede all inconsistent terms and provisions set forth in
the Intercreditor Agreement, and except as expressly modified and superseded by
this Amendment, the terms and provisions of the Intercreditor Agreement are
ratified and confirmed and shall continue in full force and effect. Senior
Lender, Junior Lender and the Loan Parties agree that the Intercreditor
Agreement, as amended hereby, shall continue to be legal, valid, binding and
enforceable in accordance with its terms.
ARTICLE IV
Miscellaneous Provisions
4.01 Survival of Representations and Warranties. All representations and
warranties made in the Intercreditor Agreement shall survive the execution and
delivery of this Amendment.
4.02 Severability. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
4.03 Binding Obligations; Successors and Assigns. This Amendment shall be
immediately binding upon Junior Lender, the Loan Parties and Senior Lender and
their respective successors and assigns, and shall inure to the benefit of the
successors and assigns of Junior Lender, the Loan Parties and Senior Lender.
4.04 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
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AMENDMENT TO INTERCREDITOR AGREEMENT
4.05 Headings. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
4.06 Applicable Law. This Amendment will be construed in accordance with
and governed by the law of the State of Texas.
4.07 Final Agreement. The Intercreditor Agreement, as amended hereby,
represents the entire expression of the parties with respect to the subject
matter hereof on the date this amendment is executed. No modification,
rescission, waiver, release or amendment of any provision of this Amendment
shall be made, except by a written agreement signed by Senior Lender, Junior
Lender and the Loan Parties.
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AMENDMENT TO INTERCREDITOR AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
Intercreditor Agreement to be duly executed by their proper and duly authorized
officers as of the day and year first above written.
FLEET CAPITAL CORPORATION
By: /s/ Dan Hughes
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Name: Dan A. Hughes
Title: Vice President
EQUUS II INCORPORATED
By: /s/ Randall B. Hale
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Name: Randall B. Hale
Title: Vice President
PETROCON ENGINEERING, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
ENGLOBAL CORPORATION, formerly known as
INDUSTRIAL DATA SYSTEMS CORPORATION
By: /s/ William A. Coskey
------------------------------------
Name: William A. Coskey
Title: President
IDS ENGINEERING, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
THERMAIRE, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
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AMENDMENT TO INTERCREDITOR AGREEMENT
CONSTANT POWER MANUFACTURING, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
INDUSTRIAL DATA SYSTEMS, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
IDS ENGINEERING MANAGEMENT, LC
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
TRIANGLE ENGINEERS AND CONSTRUCTORS,
INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
PETROCON SYSTEMS, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
PETROCON ENGINEERING OF LOUISIANA, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
R.P.M. ENGINEERING, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
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AMENDMENT TO INTERCREDITOR AGREEMENT
PETROCON CONSTRUCTION RESOURCES, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
PETROCON TECHNOLOGIES, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
ALLIANCE ENGINEERING ASSOCIATES, INC.
By: /s/ Robert W. Raiford
------------------------------------
Name: Robert W. Raiford
Title: CFO
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