SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): May 7, 1999
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AMERICAN ECO CORPORATION
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(Exact name or registrant as specified in its charter)
Ontario, Canada 0-10621 52-1742490
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(State or other jurisdiction of (Commission (IRS Employer
incorporation or organization) File Number) Identification
No.)
154 University Avenue, Toronto, Ontario M5H 3Y9
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(416) 340-2727
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N/A
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(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS.
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On May 7, 1999, American Eco Corporation, ("American
Eco"), together with its principal subsidiaries (each, a
"Borrower," and collectively, the "Borrowers") entered into a
Credit Agreement with General Electric Capital Corporation, as
lender and agent (the "Agent"), for any additional lenders from
time to time under the Credit Agreement (the "Lenders"). The
Credit Agreement provides for a revolving credit facility (the
"Revolver") of up to $30 million, which includes a $2.5 million
letter of credit subfacility.
The proceeds of the Revolver will be used by the
Borrowers for working capital and other general corporate
purposes, as well as for acquisitions meeting the criteria
established in the Credit Agreement or as otherwise permitted by
the Lenders.
Under the Revolver, each Borrower (or the Borrower
group of which it is a member) may make borrowings based upon the
sum of up to (a) 85% of its eligible accounts receivable (other
than eligible incomplete cost plus contract accounts receivable);
and (b) 50% of its eligible incomplete cost plus contract
accounts receivable, in each case, less any reserves established
by the Agent.
The Revolver has a two-year term, subject to two
automatic one year extensions at the mutual discretion of the
Borrowers and the Lenders. Borrowing under the Revolver by US
Borrowers will accrue interest at a rate equal to 2% above the
latest month-end 30-day commercial paper rate for high-grade
unsecured notes sold through dealers by major corporations, in
multiples of $1,000, as from time to time reported in The Wall
Street Journal. Borrowing under the Revolver by Canadian
Borrowers will accrue interest at a rate equal to 2% above the
rate of interest per annum determined by the Agent, from month to
month, by reference to the average rate quoted on the Reuters
Monitor Screen (Page CDOR) applicable to 30-day Canadian dollar
bankers' acceptances. Letters of credit issued pursuant to the
Credit Agreement will be subject to a fee of 1% of the face
amount thereof, plus any costs and expenses incurred by the
Lenders in arranging for the issuance or guaranty of such letters
of credit and any charges assessed by the issuing banks.
The obligations of the Borrowers under the Credit
Agreement are secured by, among other things, (a) Guarantees
entered into by American Eco and certain of its United States and
Canadian subsidiaries; (b) Security Agreements entered into by
American Eco and certain of its United States and Canadian
subsidiaries of their receivables, inventory and general
intangibles, and (c) Patent, Trademark and Copyright Security
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Agreements entered into by certain United States subsidiaries of
American Eco.
The Credit Agreement and certain of the related
security documents are filed as exhibits hereto and are
incorporated by reference herein. The descriptions herein of the
Credit Agreement and such related documents do not purport to be
complete and are qualified in their entirety by the provisions of
such agreement and documents.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits.
10.1.1 Credit Agreement, dated as of May 7, 1999, by
and among American Eco, the Borrowers
identified therein, the other Credit Parties
signatory thereto, the Lenders signatory
thereto from time to time and General Electric
Capital Corporation (the "Agent"), as Agent and
Lender (without schedules or exhibits).
10.1.2 Annex A to the Credit Agreement.
10.2.1 US $30 million Revolving Note, dated May 7, 1999,
issued by AEC Funding Corp.
10.2.2 US $30 million Revolving Note, dated May 7, 1999,
issued by the Borrowers (other than AEC Funding
Corp.).
10.3 Security Agreement, dated as of May 7, 1999, among
American Eco, certain of its United States
subsidiaries and the Agent.
10.4 Security Agreement, dated as of May 7, 1999, between
American Eco and the Agent.
10.5 Guaranty, dated as of May 7, 1999, by and among
certain United States subsidiaries of American Eco
and the Agent.
10.6 Guarantee, dated as of May 7, 1999, between
American Eco and the Agent.
99.1 Press Release dated May 18, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
AMERICAN ECO CORPORATION
Dated: May 18, 1999 By: /s/ Michael E. McGinnis
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Name: Michael E. McGinnis
Title: President
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Exhibit Index
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Exhibit Description
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10.1.1 Credit Agreement, dated as of May 7, 1999, by
and among American Eco, the Borrowers
identified therein, the other Credit Parties
signatory thereto, the Lenders signatory
thereto from time to time and General Electric
Capital Corporation (the "Agent"), as Agent and
Lender (without schedules or exhibits).
10.1.2 Annex A to the Credit Agreement.
10.2.1 US $30 million Revolving Note, dated May 7, 1999,
issued by AEC Funding Corp.
10.2.2 US $30 million Revolving Note, dated May 7, 1999,
issued by the Borrowers (other than AEC Funding
Corp.).
10.3 Security Agreement, dated as of May 7, 1999, among
American Eco, certain of its United States
subsidiaries and the Agent.
10.4 Security Agreement, dated as of May 7, 1999, between
American Eco and the Agent.
10.5 Guaranty, dated as of May 7, 1999, by and among
certain United States subsidiaries of American Eco
and the Agent.
10.6 Guarantee, dated as of May 7, 1999, between
American Eco and the Agent.
99.1 Press Release dated May 18, 1999.