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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): SEPTEMBER 2, 2005
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METRETEK TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its charter)
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DELAWARE 0-19793 84-11698358
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
303 EAST 17TH AVENUE, SUITE 660
DENVER, COLORADO 80203
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (303) 785-8080
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On September 2, 2005, Metretek Technologies, Inc., a Delaware corporation
(the "Company"), along with its wholly-owned subsidiaries Southern Flow
Companies, Inc. ("Southern Flow"), PowerSecure, Inc. ("PowerSecure") and
Metretek, Incorporated ("Metretek Florida"), entered into a Credit Agreement
(the "Credit Agreement") with First National Bank of Colorado (the "Lender"),
providing for a $4.5 million revolving credit facility (the "Credit Facility").
Southern Flow and PowerSecure are the borrowers under the Credit Facility.
Amounts borrowed under the Credit Facility bear interest at a rate of prime plus
one and a half percent (prime + 1.50%). The Credit Facility matures on September
1, 2007. The Credit Facility refinances the Company's current credit facility
with Wells Fargo Business Credit, Inc. ("Wells Fargo"). The Credit Facility is
expected to be used primarily to fund the operations and growth of PowerSecure,
as well as the operations of Southern Flow and Metretek Florida. The closing of
and funding under the Credit Facility will occur upon and is conditioned upon
the termination of its current credit facility with Wells Fargo Credit Facility,
as described in Item 1.02 of this Report.
The Credit Facility is structured in two parts: a $2.5 million facility for
PowerSecure (the "PowerSecure Facility") and a $2.0 million facility for
Southern Flow (the "Southern Flow Facility"). Borrowings under the PowerSecure
Facility are limited to a borrowing base consisting of the sum of 75% of
PowerSecure's eligible accounts receivable, plus 25% of the sum of PowerSecure's
unbilled accounts receivable less the amount of PowerSecure's unearned revenues
or advanced billings on contracts, plus 25% of PowerSecure's inventory.
Borrowings under the Southern Flow Facility are limited to a borrowing base
consisting of the sum of 80% of Southern Flow's eligible accounts receivable,
plus 20% of Southern Flow's inventory, plus 70% of Metretek Florida's eligible
accounts receivable. As of September 2, 2005, the aggregate borrowing base under
the Credit Facility was approximately $4,350,000.
Upon closing, the obligations of PowerSecure and Southern Flow, as
borrowers, under the Credit Agreement will be secured by security agreements
(the "Security Agreements") by Southern Flow, PowerSecure and Metretek Florida
and will be guaranteed by the Company in a guaranty (the "Guaranty"). The
Security Agreements will grant to the Lender a first priority security interest
in virtually all of the assets of each of the parties to the Credit Agreement.
The Credit Agreement contains customary representations and warranties and
affirmative and negative covenants, including financial covenants pertaining to
minimum cash flow coverage ratios and maximum debt to tangible net worth ratios
of the Company and PowerSecure, minimum current assets to current liabilities
ratios of PowerSecure and Southern Flow, as well as a minimum tangible net worth
by Southern Flow. The Credit Agreement does not contain any financial covenants
pertaining to Metretek Florida. The Credit Agreement contains other customary
covenants that apply to the Company, PowerSecure, Southern Flow and Metretek
Florida, limiting the incurrence of additional indebtedness or liens,
restricting dividends and redemptions of capital stock, restricting their
ability to engage in mergers, consolidations, sales and acquisitions, to make
investments, to issue guarantees of other obligations, to engage in transactions
with affiliates to or make restricted payments and other matters customarily
restricted in secured loan agreements, without the Lender's prior written
consent.
The Credit Agreement contains customary events of default, including
payment defaults, breach of representations and warranties, covenant defaults,
cross-defaults, certain bankruptcy or insolvency
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events, judgment defaults and certain ERISA-related events. The Credit Facility
also contains minimum interest charges and unused credit line and termination
fees.
The foregoing description of the Credit Facility does not purport to be a
complete statement of the parties' rights and obligations under the Credit
Facility and is qualified in its entirety by reference to the text of the Credit
Agreement, the form of Security Agreement and the form of the Guaranty, which
are attached as exhibits hereto and incorporated herein by this reference.
A copy of the Company's press release announcing the Credit Facility is
attached hereto as Exhibit 99.1 and incorporated herein by this reference.
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
On September 6, 2005, in connection with entering the Credit Agreement
described in Item 1.01 above, the Company gave notice of termination of its
credit facility with Wells Fargo (the "Wells Fargo Credit Facility"). Such
termination becomes effective upon the earlier of 30 days after such notice or
such date as Wells Fargo agrees, and upon such termination the Company will
repay the outstanding amount thereunder (which as of September 6, 2005 was
approximately $1,868,000) with a portion of the proceeds of the Credit Facility.
The Wells Fargo Credit Facility was a $3.26 million secured revolving line of
credit that previously constituted the Company's primary credit facility and was
scheduled to expire on September 30, 2006. The Wells Fargo Credit Facility
consisted of three separate credit and security agreements, one between each of
Southern Flow, PowerSecure and Metretek Florida, as borrowers, and Wells Fargo,
as lender, and each credit agreement was guaranteed by the non-borrowers of the
Company, Southern Flow, PowerSecure, Metretek Florida and Metretek Contract
Manufacturing Company, Inc., a subsidiary of Metretek Florida, and secured by
first priority security interests in substantially all of the assets of each
borrower and each guarantor. Upon the termination of the Wells Fargo Credit
Facility, the Company will pay Wells Fargo a termination fee equal to one
percent (1%) of the maximum line of $3,260,000.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information provided above in Item 1.01 is hereby incorporated by
reference into this Item 2.03.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(C) EXHIBITS
10.1 Credit Agreement, dated as of September 2, 2005, among Metretek
Technologies, Inc., PowerSecure, Inc., Southern Flow Companies,
Inc., Metretek, Incorporated and First National Bank of Colorado
10.2 Form of Security Agreement, dated as of September 2, 2005,
between each of PowerSecure, Inc., Southern Flow Companies, Inc.,
Metretek, Incorporated and First National Bank of Colorado
10.3 Form of Guaranty, dated as of September 2, 2005, by Metretek
Technologies, Inc. for the benefit of First National Bank of
Colorado
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99.1 Press Release of Metretek Technologies, Inc., issued September 7,
2005, announcing the First National Bank of Colorado credit
facility.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
METRETEK TECHNOLOGIES, INC.
By: /s/ W. Phillip Marcum
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W. Phillip Marcum
President and Chief Executive Officer
Dated: September 6, 2005
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