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EXHIBIT 10.1
THIRD AMENDMENT TO
LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT AND LOAN DOCUMENTS
(this "Amendment"), dated as of December 16, 1999 but effective for all purposes
as of December 8, 1999, is between NATIONAL BANK OF CANADA, a Canadian chartered
bank ("Lender"), METRETEK TECHNOLOGIES, INC. (f/k/a Marcum Natural Gas Services,
Inc.), a Delaware corporation ("Metretek Technologies"), METRETEK, INCORPORATED,
a Florida corporation ("Metretek Inc."), and SOUTHERN FLOW COMPANIES, INC., a
Delaware corporation (each, a "Borrower", and collectively, "Borrower" or
"Borrowers"), and SIGMA VI, INC., a Florida corporation ("Pledgor").
Recitals
A. Lender, Borrowers and Pledgor entered into a Loan and Security
Agreement dated April 14, 1998, as amended by an Amendment to Loan and
Security Agreement and Loan Documents dated as of June 8, 1999, and as
further amended by a Second Amendment to Loan and Security Agreement
and Loan Documents dated as of September 13, 1999 (as amended, the
"Loan Agreement"), providing for the Metretek Loans and the Southern
Flow Loans, as more fully set forth in the Loan Agreement. Defined
terms used herein and not defined herein shall have the meaning set
forth in the Loan Agreement. On June 8, 1999, Metretek Technologies
changed its name from Marcum Natural Gas Services, Inc. to Metretek
Technologies, Inc.
B. The Loans are secured by the Collateral.
C. Metretek Technologies has advised Lender that Metretek Technologies
proposes to enter into a transaction pursuant to which it will issue
and sell 7,000 units in Metretek Technologies and that each unit will
consist of 200 shares of Common Stock, one share of a newly designated
Series B Preferred Stock (convertible into Common Stock), and 100
Common Stock Purchase Warrants. The transaction (the "Transaction") is
set forth more fully in a memo dated December 7, 1999 from Paul R.
Hess, Esq. to Robert H. Bach, Esq., as modified by a memorandum dated
December 16, 1999, (collectively the "Memo").
D. The purpose of this Amendment is (a) for Lender to waive certain
defaults under the Loan Agreement arising out of the Transaction, and
(b) for Borrower and Lender to amend certain covenants and conditions
in the Loan Agreement as a result of the Transaction.
Agreement
IN CONSIDERATION of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Lender, Borrowers and Pledgor agree as follows:
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1. Waiver.
(a) Lender hereby waives the violation of Section 12(k) of the Loan
Agreement (which would occur unless Lender executed and delivered this
Amendment) arising solely as a result of the issuance of shares and warrants
contemplated by the Transaction as described in the Memo.
(b) Lender hereby waives the violation of Section 12(o) of the Loan
Agreement (which would occur unless Lender executed and delivered this
Amendment) arising solely as a result of Metretek Technologies amending their
organizational documents in connection with the Transaction as described in the
Memo.
(c) Lender hereby waives any Event of Default that may occur under
Section 14(j) of the Loan Agreement arising solely as a result of any change of
control that may be caused by the issuance of shares and warrants contemplated
by the Transaction as described in the Memo.
Nothing herein is intended to or shall waive any other Event of Default under
the Loan Agreement arising out of the Transaction or otherwise or any event that
with notice, the passage of time or both may become an Event of Default under
the Loan Agreement arising out of the Transaction or otherwise.
2. Revision to Loan Agreement. The Loan Agreement is hereby amended as follows:
a. Definitions. The Loan Agreement is hereby amended by adding a new
definition of Series B Preferred Stock as Section 1(dd) to read as follows:
"Series B Preferred Stock" means the 7,000 shares of Series B
Preferred Stock issued in connection with the Transaction as
described in the Memo.
b. Covenants. The Loan Agreement is hereby amended by amending section
12(l) (and subsections (ii) and (iii) of section 12(q) in their entirety,
(Financial Covenants) to read as follows:
12(l) No Borrower shall declare or pay any dividend or other
distribution (whether in cash or in kind) of any kind on any class of
its stock except (i) as set forth in Section 13 below, (ii) for the
transactions described on Exhibit F attached hereto, and (iii) pursuant
to the terms of the Series B Preferred Stock (provided that there is no
Event of Default).
12(q)(ii) Metretek Technologies' consolidated combined minimum tangible
net worth (as such term is defined in accordance with GAAP and
including (A) all subordinate debt which has been approved by Lender in
its sole discretion, and (B) Series B Preferred Stock (whether or not
properly includable under GAAP)) shall not be less than the amounts set
forth below for the period set forth below:
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- --------------------------------------- -------------------------------------
Financial Period Minimum Tangible Net Worth
- --------------------------------------- -------------------------------------
from the date hereof up to and $7,050,000
including 12/30/99
- --------------------------------------- -------------------------------------
12/31/99 $7,400,000
1/1/00 up to and including 12/31/00 $7,400,000 plus 90% of Marcum's net
income for the fiscal year ended
12/31/99
- --------------------------------------- -------------------------------------
1/1/01 $7,400,000 plus 90% of Marcum's net
up to and including 12/31/01 income for the fiscal year ended
12/31/99 plus 90% of Marcum's net income
for the fiscal year ended 12/31/00
- --------------------------------------- -------------------------------------
12(q)(iii) The ratio of Metretek Technologies' consolidated combined
total liabilities to tangible net worth (as such terms are defined in
accordance with GAAP and including (A) all subordinated debt which has
been approved by Lender in its sole discretion, and (B) any Series B
Preferred Stock (whether or not properly includable under GAAP)) shall
not exceed 2.00 to 1.0 at any time.
3. Loan Documents.
a. Lender, Borrowers and Pledgor agree that any and all notes or
other documents executed in connection with the Loans
(collectively, the "Loan Documents") are hereby amended to
reflect the amendments set forth herein and that no further
amendments to any Loan Documents are required to reflect the
foregoing.
b. All references in any document to the Loan Agreement or any
other Loan Document shall refer to the Loan Agreement or such
Loan Document as amended pursuant to this Amendment.
4. Fees and Expenses. Borrower shall pay or cause to be paid all of the expenses
incurred by the Lender in connection with the transactions contemplated by this
Amendment, including, without limitation, the reasonable fees and disbursements
of Lender's attorneys and their staff, and any recording and filing fees,
charges and expenses. If Borrower fails to pay such fees within 15 days after
written request by Lender, such failure shall constitute an Event of Default.
5. Representations and Warranties. Each Borrower and Pledgor hereby certifies to
the Lender that as of the date of this Amendment (taking into consideration the
transactions contemplated by this Amendment), all of such Borrower's or
Pledgor's representations and warranties contained in the Loan Agreement and all
Loan Documents are true, accurate and complete in all material respects, and no
Event of Default or event that with notice or the passage of time or both would
constitute an Event of Default (other than as waived by Lender pursuant to this
Amendment) has occurred under the Loan
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Agreement or any Loan Document. Without limiting the generality of the
foregoing, each Borrower and Pledgor represents and warrants that the execution
and delivery of this Amendment has been authorized by all necessary action on
the part of such Borrower or Pledgor, that the person executing this Amendment
on behalf of such Borrower is duly authorized to do so and that this Amendment
constitutes the legal, valid, binding and enforceable obligation of such
Borrower or Pledgor.
6. Additional Documents. Each Borrower and Pledgor shall execute and deliver to
Lender at any time and from time to time such additional amendments to the Loan
Agreement and the Loan Documents as the Lender may request to confirm and carry
out the transactions contemplated hereby or to confirm, correct and clarify the
security for the Loan.
7. Continuation of the Loan Agreement, Etc. Except as specified in this
Amendment, the provisions of the Loan Agreement and the Loan Documents shall
remain in full force and effect, and if there is a conflict between the terms of
this Amendment and those of the Loan Agreement or the Loan Documents, the terms
of this Amendment shall control.
8. Miscellaneous.
a. This Amendment shall be governed by and construed under the
laws of the State of Colorado and shall be binding upon and
inure to the benefit of the parties hereto and their
successors and permissible assigns.
b. This Amendment may be executed in two or more counterparts,
each of which shall be deemed an original and all of which
together shall constitute one instrument.
c. This Amendment and all documents to be executed and delivered
hereunder may be delivered in the form of a facsimile copy,
subsequently confirmed by delivery of the originally executed
document.
d. This Amendment constitutes the entire agreement between
Borrowers, Pledgor and the Lender concerning the subject
matter of this Amendment. This Amendment may not be amended or
modified orally, but only by a written agreement executed by
each Borrower and Pledgor and the Lender and designated as an
amendment or modification of the Loan Agreement as amended by
this Amendment.
e. This Third Amendment is in substitution of and replaces in its
entirety the Third Amendment to Loan and Security Agreement
and loan documents dated as of December 8, 1999 (and effective
as of that date), which Third Amendment dated as of December
8, 1999 (and effective as of that date), shall hereinafter be
null and void.
REMAINDER OF PAGE INTENTIONALLY BLANK
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EXECUTED as of the date first set forth above.
BORROWERS:
METRETEK TECHNOLOGIES, INC., a Delaware
corporation (f/k/a Marcum Natural Gas
Services, Inc.)
By: /s/ A. Bradley Gabbard
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A. Bradley Gabbard
Executive Vice President
METRETEK, INCORPORATED, a Florida
corporation
By: /s/ A. Bradley Gabbard
--------------------------------
A. Bradley Gabbard
Executive Vice President
SOUTHERN FLOW COMPANIES, INC., a Delaware
corporation
By: /s/ A. Bradley Gabbard
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A. Bradley Gabbard
Executive Vice President
PLEDGOR:
SIGMA VI, INC., a Florida corporation
By: /s/ A. Bradley Gabbard
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A. Bradley Gabbard
Executive Vice President
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LENDER:
NATIONAL BANK OF CANADA, a Canadian
chartered bank
By: /s/ Raymond L. Yager
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Raymond L. Yager
Vice President