Document:

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                                                                    EXHIBIT 10.1

                   APRIL 2001 AMENDMENT TO SECOND AMENDED AND
                      RESTATED LOAN AND SECURITY AGREEMENT
                      AND MODIFICATION TO OTHER AGREEMENTS

         THIS APRIL 2001 AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT AND MODIFICATION TO OTHER AGREEMENTS (this "Amendment") is
made and entered into this 16th day of April, 2001, to be effective as of the
respective date herein indicated, by and among SEPCO INDUSTRIES, INC., a Texas
corporation ("Sepco"), BAYOU PUMPS, INC., a Texas corporation ("Bayou") and
AMERICAN MRO, INC., a Nevada corporation ("American") (Sepco, Bayou and American
being hereinafter individually and collectively referred to as "Borrower", as
governed by the provisions of Section 1.4, Section 1.5, and Section 1.6 of the
Loan Agreement, as hereinafter defined), and FLEET CAPITAL CORPORATION, a Rhode
Island corporation ("Lender"), successor-in-interest by merger to Fleet Capital
Corporation, a Connecticut corporation (Fleet Capital Corporation, a Connecticut
corporation, having been, formerly known as Shawmut Capital Corporation, and
having been the successor-in-interest by assignment to Barclays Business Credit,
Inc., a Connecticut corporation).

                                    RECITALS

         A. Sepco and Barclays Business Credit, Inc., have entered into that
certain Second Amended and Restated Loan and Security Agreement, dated as of
April 1, 1994, as amended by that certain First Amendment to Second Amended and
Restated Loan and Security Agreement and Secured Promissory Note, dated May,
1995, executed by Sepco and Fleet Capital Corporation, a Connecticut corporation
(at that time known as Shawmut Capital Corporation), and as amended by that
certain Second Amendment to Second Amended and Restated Loan and Security
Agreement, entered into on April 3, 1996, executed by Sepco and Fleet Capital
Corporation, a Connecticut corporation, and as amended by that certain Third
Amendment to Second Amended and Restated Loan and Security Agreement, dated
September 9, 1996, executed by Sepco, Bayou and Lender, and as amended by that
certain Fourth Amendment to Second Amended and Restated Loan and Security
Agreement, dated October 24, 1996, executed by Lender and Borrower, and as
amended by that certain letter agreement dated November 4, 1996, entered into by
Lender and Borrower, and as amended by that certain Fifth Amendment to Second
Amended and Restated Loan and Security Agreement, dated June 2, 1997, executed
by Lender and Borrower, and as amended by that certain Sixth Amendment to Second
Amended and Restated Loan and Security Agreement and Amendment to Other
Agreements executed by Borrower and Lender, and as amended by that certain
Seventh Amendment to Second Amended and Restated Loan and Security Agreement,
entered into on June 30, 1998, executed by Borrower and Lender, and as amended
by that certain Eighth Amendment to Second Amended and Restated Loan and
Security Agreement and Modification to Other Agreements, entered into on October
20, 1998, executed by Borrower and Lender, and as amended by that certain letter
agreement dated April 30, 1999, executed by Borrower and Lender, and as amended
by that certain letter agreement, dated May 13, 1999, executed by Borrower and
Lender, and as amended by that certain August 1999 Amendment to Second Amended
and Restated Loan and Security Agreement and Modification to Other Agreements,
entered into on August 13, 1999, executed by Borrower and Lender, and as amended
by that certain August 2000

<PAGE>   2

Amendment to Second Amended and Restated Loan and Security Agreement and
Modification to Other Agreements, executed by Borrower and Lender, and as
amended by that certain November 2000 Amendment to Second Amended and Restated
Loan and Security Agreement and Modification to Other Agreements, entered into
on November 13, 2000, executed by Borrower and Lender (as amended, the "Loan
Agreement").

         B. Lender, effective May 1, 1996, as successor-in-interest by merger to
Fleet Capital Corporation, a Connecticut corporation, succeeded to, and today
remains the present holder of, all right, title and interest of Fleet Capital
Corporation, a Connecticut corporation, in the Loan Agreement and each of the
Other Agreements.

         C. Borrower and Lender desire to further amend the Loan Agreement and
the Other 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:

                                    AGREEMENT

                                    ARTICLE I
                                   DEFINITIONS

         1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.

                                   ARTICLE II
                           AMENDMENTS AND MODIFICATION

         Effective as of the respective date herein indicated, the Loan
Agreement and the Other Agreements are hereby respectively amended as follows:

         2.01 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; ADDITION OF NEW
DEFINITION. Effective as of the date of execution of this Amendment, Section 1.1
of the Loan Agreement is hereby amended by adding the following new definition
thereto, to be inserted in its proper alphabetical order:

                  "APRIL 2001 AMENDMENT - that certain April 2001 Amendment to
         Second Amendment and Restated Loan and Security Agreement, executed by
         Lender and Borrower."

         2.02 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT OF THE
DEFINITION OF "BORROWING BASE". Effective as of the date of execution of this
Amendment, the definition of "Borrowing Base" contained in Section 1.1 of the
Loan Agreement is hereby amended by deleting therefrom the reference to the
phrase "Thirty Million Eight Hundred Thousand Dollars ($30,800,000)", and
substituting therefor the phrase "Twenty-Seven Million Eight Hundred Thousand
Dollars ($27,800,000)."

<PAGE>   3

         2.03 AMENDMENT TO SECTION 1.1 OF THE LOAN AGREEMENT; AMENDMENT AND
RESTATEMENT OF THE DEFINITION OF "COMMITMENT". Effective as of the date of
execution of this Amendment, the definition of "Commitment" contained in Section
1.1 of the Loan Agreement is hereby amended and restated to read in its entirety
as follows:

                  "COMMITMENT" - shall mean Twenty-Seven Million Eight Hundred
         Thousand Dollars ($27,800,000)."

         2.04 AMENDMENT TO DEFINITION OF "TERM NOTE" IN SECTION 1.1 OF THE LOAN
AGREEMENT. Effective as of the date of execution of this Amendment, the
definition of "Term Note" in Section 1.1 of the Loan Agreement is hereby amended
and restated to read in its entirety as follows:

                  "TERM NOTE - that certain Secured Promissory Note, dated March
         1, 1994, in the original principal amount of $1,329,277.37, executed by
         Sepco, and payable to the order of Lender, as renewed, extended,
         modified and restated from time to time, including, without limitation,
         as modified and extended by (i) the Third Amendment Modification
         Agreements (which Third Amendment Modification Agreements, among other
         things, modified the Term Note to reflect the increase of the Term Loan
         to $5,000,000), (ii) the Sixth Amendment (which Sixth Amendment, among
         other things, modified the Term Note to reflect the increase of the
         Term Loan to $9,887,000), (iii) the Seventh Amendment (which Seventh
         Amendment, among other things, modified the Term Note to reflect the
         increase of the Term Loan to $12,387,000), (iv) that certain May 1999
         Amendment to Second Amended and Restated Loan and Security Agreement
         and Modification to Other Agreements executed by Borrower (which
         document, among other things, modified the Term Note to extend the
         maturity of the Term Loan until April 1, 2000), (v) that certain August
         1999 Amendment to Second Amended and Restated Loan and Security
         Agreement and Modification to Other Agreements, executed by Borrower
         and Lender (which document, among other things, modified the Term Note
         to extend the maturity of the Term Loan until April 1, 2001), (vi) that
         certain August 2000 Amendment to Second Amended and Restated Loan and
         Security Agreement and Modification to Other Agreements, executed by
         Lender and Borrower (which document, among other things, modified the
         Term Note to extend the maturity of the Term Loan until June 1, 2001),
         (vii) that certain November 2000 Amendment to Second Amended and
         Restated Loan and Security Agreement and Modification to Other
         Agreements, executed by Lender and Borrower which document, among other
         things, modified the Term Note to extend the maturity of the Term Loan
         until October 1, 2001), and (viii) that certain April 2001 Amendment to
         Second Amended and Restated Loan and Security Agreement and
         Modification to Other Agreements, executed by Lender and Borrower
         (which document, among other things, modified the Term Note to reflect
         the increase of the Term Loan on the date of such document from
         $8,547,730.06 to $9,002,730.06 and to extend the maturity of the Term
         Loan until April 1, 2002)."

         2.05 AMENDMENT TO SECTION 2.2 OF THE LOAN AGREEMENT. Effective as of
the date of execution of this Amendment, Section 2.2 of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:

<PAGE>   4

                  "2.2 TERM LOAN. The parties hereto agree that (i) effective as
         of April 1, 1994, Lender made to Sepco that certain term loan in the
         original principal amount of $1,329,277.37, evidenced by that certain
         Secured Promissory Note, dated April 1, 1994, in the original principal
         amount of $1,329,277.37, executed by Sepco and payable to the order of
         Lender, and (ii) as of the date of execution of the Third Amendment,
         the unpaid principal amount of such term loan was $82,231.76, and that
         in connection with the Third Amendment, at the request of Sepco, Lender
         converted $4,917,768.24 of the principal amount of Revolving Credit
         Loans made to Sepco by Lender outstanding on the date of execution of
         the Third Amendment to a term loan, which term loan was combined and
         consolidated with the outstanding principal amount of the term loan
         made to Sepco on April 1, 1994, such that the combined term loan was in
         the aggregate principal amount of $5,000,000, and (iii) as of the date
         of execution of the Sixth Amendment, the unpaid principal amount of
         such term loan was $4,887,000.00, and that in connection with the Sixth
         Amendment, at the request of Sepco, Lender made on the date of
         execution of the Sixth Amendment an additional $5,000,000 term loan to
         Sepco, the proceeds of which were used to replace working capital used
         by Sepco to acquire assets of Tri-Electric Supply, Ltd., and that such
         additional $5,000,000 term loan was combined and consolidated with the
         existing term loan, such that the combined and consolidated term loan
         was in the aggregate principal amount of $9,887,000.00, and (iv) as of
         the date of execution of the Seventh Amendment, the unpaid principal
         amount of such term loan was $9,887,000.00, and that in connection with
         the Seventh Amendment, at the request of Sepco, Lender on the date of
         execution of the Seventh Amendment provided to Sepco an additional
         $2,500,000 term loan, the proceeds of which were used to purchase the
         real property legally described on Exhibit A to the Seventh Amendment,
         and that such additional $2,500,000 term loan was combined and
         consolidated with the outstanding principal amount of the existing term
         loan such that the combined and consolidated term loan (after the full
         principal amount of the new $2,500,000 term loan was funded) was in the
         aggregate principal amount of $12,387,000. Sepco further agrees,
         represents and warrants that as of the date of execution of the April
         2001 Amendment, the unpaid principal amount of such term loan is
         $8,547,730.06, and that there are no claims or offsets against, or
         defenses or counterclaims to, payment of such amount to Lender. Sepco
         further agrees, represents and warrants that it has requested that
         Lender make on the date of execution of the April 2001 Amendment, an
         additional $455,000 term loan to Sepco, and that such $455,000 term
         loan be combined and consolidated with the existing term loan, such
         that the combined and consolidated term loan shall be in the aggregate
         principal amount of $9,002,730.06 (such combined and consolidated term
         loan being referred to in this Agreement as the 'Term Loan'). Subject
         to the terms and conditions of this Agreement, Lender agrees to make
         the Term Loan to Sepco, and in connection therewith to advance on the
         date of execution of the April 2001 Amendment an additional
         $455,000.00. The Term Loan shall be repayable in accordance with the
         terms of the Term Note, and shall be secured by the Collateral. The
         parties hereto agree that the Term Loan represents a portion of the
         'Sepco Obligations' referred to and defined in Section 1.5 of this
         Agreement. If Sepco sells any of its Equipment or real Property, or if
         any of the other Property owned by Sepco is taken by condemnation,
         Sepco shall pay to Lender, unless otherwise agreed to by Lender, as and
         when received by Sepco and as a mandatory prepayment of the Term Loan
         (or, at Lender's option, such of the other Obligations as Lender may
         elect), a sum equal to

<PAGE>   5

         the proceeds received by Sepco from such sale or condemnation, less any
         state or federal income tax directly attributable thereto."

         2.06 AMENDMENT TO SECTION 2.2(A) OF THE LOAN AGREEMENT. Effective as of
the date of execution of this Amendment, Section 2.2(A) of the Loan Agreement is
amended by deleting therefrom the reference to the date "September 30, 2001" and
substituting therefor the date "March 31, 2002."

         2.07 AMENDMENT TO SECTION 3.3(A) OF THE LOAN AGREEMENT. Effective as of
the date of execution of this Amendment, Section 3.3(A) of the Loan Agreement is
hereby amended by deleting therefrom the reference to the date "October 1, 2001"
and substituting therefor the date "April 1, 2002."

         2.08 AMENDMENT TO SECTION 9.2(I) OF THE LOAN AGREEMENT. Effective as of
the date of execution of this Amendment, Section 9.2(I) of the Loan Agreement is
amended and restated to read in its entirety as follows:

                  "(I) Permit Capital Expenditures made by DXP and its
         Subsidiaries (including, without limitation, by way of capitalized
         leases) to exceed in the aggregate $1,250,000 during the period
         beginning April 1, 2001 and continuing through March 31, 2002."

         2.09 AMENDMENT TO SECTION 9.3(F) OF THE LOAN AGREEMENT. Effective as of
the date of execution of this Amendment, Section 9.3(F) of the Loan Agreement,
is amended and restated to read in its entirety as follows:

                  "(F) Maintain, on a consolidated basis in accordance with
         GAAP, EBITDA of DXP and its Subsidiaries for the month indicated below
         in an amount not less than the amount indicated below:

                  <TABLE>
                  <CAPTION>
                    Month                                     Minimum EBITDA
                    -----                                     --------------
                  <S>                                         <C>
                  March, 2001                                    $   555,000
                  April, 2001                                    $   460,000
                  May, 2001                                      $   500,000
                  June, 2001                                     $   480,000
                  July, 2001                                     $   590,000
                  August, 2001                                   $   640,000
                  September, 2001                                $   540,000
                  October, 2001                                  $   825,000
                  November, 2001                                 $   725,000
                  December, 2001                                 $   695,000
                  January, 2002                                  $   695,000
                  February, 2002                                 $   695,000"
                  </TABLE>

<PAGE>   6

         2.10 AMENDMENT TO PRINCIPAL BALANCE OF TERM NOTE. Effective as of the
date of execution of this Amendment, Borrower and Lender hereby amend the Term
Note such that (i) each reference in the Term Note to the dollar amount
"$12,387,000.00" is deleted and substituted therefor is the dollar amount
"$9,002,730.06," and (ii) the reference to the phrase "TWELVE MILLION THREE
HUNDRED EIGHTY-SEVEN THOUSAND AND NO/100 DOLLARS" is deleted and substituted
therefor is the phrase "NINE MILLION TWO THOUSAND SEVEN HUNDRED THIRTY AND
06/100 DOLLARS".

         2.11 AMENDMENT TO PAYMENT TERMS IN THE TERM NOTE. Borrower and Lender
hereby agree that effective as of the date of execution of this Amendment, the
last paragraph on page two of the Term Note is amended and restated to read in
its entirety as follows:

                  "The principal amount of and accrued interest on this Note
         shall be due and payable on the dates and in the manner hereinafter set
         forth:

                           (a) interest shall be due and payable monthly, in
                  arrears, on the first day of each month, continuing until such
                  time as the full principal balance, together with all other
                  amounts owing hereunder, shall have been paid in full;

                           (b) the principal shall be due and payable in monthly
                  installments of ONE HUNDRED THIRTY-THREE THOUSAND ONE HUNDRED
                  TWENTY AND NO/100 DOLLARS ($133,120.00) and each shall be due
                  and payable on May 1, 2001, and on the first day of each month
                  thereafter to and including the first day of March, 2002; and

                           (c) the entire unpaid principal balance hereof,
                  together with any and all other amounts due hereunder, shall
                  be due and payable on April 1, 2002."

         2.12 EXTENSION OF MATURITY OF ACQUISITION TERM LOANS NOTE. Effective as
of the date of execution of this Amendment, the maturity of the Acquisition Term
Loans Note is hereby renewed and extended until April 1, 2002.

         2.13 AMENDMENT TO PAYMENT TERMS IN THE ACQUISITION TERM LOANS NOTE.
Borrower and Lender hereby agree that effective as of the date of execution of
this Amendment, the last paragraph on page two of the Acquisition Term Loans
Note is amended as follows:

                  (a) The reference to the phrase "first day of September, 2001"
         is hereby deleted and substituted therefor is the phrase "first day of
         March, 2002."

<PAGE>   7

                  (b) The reference to the date "October 1, 2001" is hereby
         deleted and substituted therefor is the date "April 1, 2002."

                                   ARTICLE III
                                 LIMITED WAIVER

         3.01 Borrower has informed Lender (i) that Borrower violated several
times during calendar year 2000 and for the months of January, 2001 and
February, 2001 the financial covenant contained in Section 9.3(D) of the Loan
Agreement, and (ii) that Borrower violated for the month of January, 2001 and
for the month of February, 2001, the financial covenant contained in Section
9.3(F) of the Loan Agreement, and (iii) that an Event of Default currently
exists pursuant to Section 11.1(S) of the Loan Agreement due to the present
existence of "Events of Default," as such term is defined in that certain Loan
and Security Agreement, dated June 16, 1997, executed by Lender and DXP
Acquisition, Inc., d/b/a Strategic Acquisition, Inc., and Borrower has requested
that Lender waive (i) each such violation of Section 9.3(D) of the Loan
Agreement which occurred during calendar year 2000 and for the months of
January, 2001 and February, 2001, and (ii) each such violation of Section 9.3(F)
of the Loan Agreement for the months of January, 2001 and February, 2001, and
(iii) such Event of Default. Subject to the satisfaction of the conditions
precedent set forth in Section 4.01 of this Amendment and to the other terms,
conditions and provisions of this Amendment, the Lender hereby waives (i) each
of the above-described violations of Section 9.3(D) of the Loan Agreement which
occurred during calendar year 2000 and for the months of January, 2001 and
February, 2001, and (ii) each of the above-described violations of Section
9.3(F) of the Loan Agreement for the months of January, 2001 and February, 2001,
and (iii) the above-described Event of Default; provided, however, that the
waiver described in this Section 3.01 of this Amendment is strictly limited to
the Sections of the Loan Agreement and to the Event of Default described above
and to the specific occurrences described above. Except as otherwise
specifically provided for in this Amendment, nothing contained herein shall be
construed as a waiver by Lender of any covenant or provision of or Event of
Default under the Loan Agreement, the Other Agreements, this Amendment or of any
other contract or instrument between Borrower and Lender, and the failure of
Lender at any time or times hereafter to require strict performance by Borrower
of any provision thereof shall not waive, affect or diminish any right of Lender
to thereafter demand strict compliance therewith. Lender hereby reserves all
rights granted under the Loan Agreement, the Other Agreement, this Amendment and
any other contract or instrument between Borrower and Lender.

                                   ARTICLE IV
                              CONDITIONS PRECEDENT

         4.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
is subject to the satisfaction of the following conditions precedent in a manner
satisfactory to Lender, unless specifically waived in writing by Lender:

                  (a) Lender shall have received each of the following, each in
         form and substance satisfactory to Lender, in its sole discretion, and,
         where applicable, each duly executed by each party thereto, other than
         Lender:

                           (i) This Amendment, duly executed by Borrower,
                  together with the relevant Consent, Ratification, and
                  Amendment, respectively duly executed by David R. Little,
                  individually, David C. Vinson, Trustee for Kacey Joyce Little,
                  Nicholas

<PAGE>   8

                  David Little and Andrea Rae Little 1988 Trusts, DXP
                  Enterprises, Inc. ("Parent"), DXP Acquisition, Inc., d/b/a
                  Strategic Acquisition, Inc. and Pelican State Supply Company,
                  Inc.;

                           (ii) Such extensions and modifications to existing
                  real estate lien documentation as shall be required by Lender,
                  in its sole discretion, duly executed by the relevant fee
                  title owner of the real property covered by such real estate
                  lien documentation; and

                           (iii) All other documents Lender may request with
                  respect to any matter relevant to this Amendment or the
                  transactions contemplated hereby;

                  (b) Evidence satisfactory to Lender, in its sole discretion,
         that the existing loan by Lender to David R. Little has been paid off
         in full;

                  (c) The representations and warranties contained herein and in
         the Loan Agreement and the Other Agreements, as each is amended hereby,
         shall be true and correct as of the date hereof, as if made on the date
         hereof;

                  (d) No Default or Event of Default shall have occurred and be
         continuing, unless such Default or Event of Default has been otherwise
         specifically waived in writing by Lender; and

                  (e) All corporate proceedings taken in connection with the
         transactions contemplated by this Amendment and all documents,
         instruments and other legal matters incident thereto shall be
         satisfactory to Lender and its legal counsel.

                                    ARTICLE V
               RATIFICATIONS, REPRESENTATIONS AND WARRANTIES; FEE

         5.01 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and the Other Agreements, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the Loan
Agreement and the Other Agreements are ratified and confirmed and shall continue
in full force and effect. Each Borrower and Lender agree that the Loan Agreement
and the Other Agreements, as amended hereby, shall continue to be legal, valid,
binding and enforceable in accordance with their respective terms.

         5.02 REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents
and warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all Other Agreements executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of such Borrower and will not violate the Articles of Incorporation or
Bylaws of such Borrower; (b) attached hereto as Annex A is a true, correct and
complete copy of presently effective resolutions of each Borrower's Board of
Directors authorizing the execution, delivery and performance of this Amendment
and any and all Other Agreements executed and/or delivered in connection
herewith, certified by the Assistant Secretary of Borrower; (c) the
representations and warranties contained in the Loan Agreement, as amended
hereby, and any Other Agreement are true and correct on and as of the date
hereof and on and as of the date of execution hereof as though made on and as of
each such date; (d) no Default or Event of Default under the

<PAGE>   9

Loan Agreement, as amended hereby, has occurred and is continuing, unless such
Default or Event of Default has been specifically waived in writing by Lender;
(e) each Borrower is in full compliance with all covenants and agreements
contained in the Loan Agreement and the Other Agreements, as amended hereby; (f)
Sepco has not amended its Articles of Incorporation or its Bylaws since the date
of the Loan Agreement, (g) Bayou has not amended its Articles of Incorporation
or its Bylaws since the date of incorporation of Bayou and (h) American has not
amended its Articles of Incorporation or its Bylaws since the date of
incorporation of American.

                                   ARTICLE VI
                            MISCELLANEOUS PROVISIONS

         6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in the Loan Agreement or any Other Agreement, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the Other
Agreements, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.

         6.02 REFERENCE TO LOAN AGREEMENT. Each of the Loan Agreement and the
Other Agreements, and any and all other agreements, documents or instruments now
or hereafter executed and delivered pursuant to the terms hereof or pursuant to
the terms of the Loan Agreement, as amended hereby, are hereby amended so that
any reference in the Loan Agreement and such Other Agreements to the Loan
Agreement shall mean a reference to the Loan Agreement as amended hereby.

         6.03 EXPENSES OF LENDER. As provided in the Loan Agreement, each
Borrower agrees to pay on demand all costs and expenses incurred by Lender in
connection with the preparation, negotiation, and execution of this Amendment
and the Other Agreements executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including, without limitation, the costs
and fees of Lender's legal counsel, and all costs and expenses incurred by
Lender in connection with the enforcement or preservation of any rights under
the Loan Agreement, as amended hereby, or any Other Agreements, including,
without, limitation, the costs and fees of Lender's legal counsel.

         6.04 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.

         6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Lender and each Borrower and their respective successors
and assigns, except that no Borrower may assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.

         6.06 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.

<PAGE>   10

         6.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant or condition by
any Borrower shall be deemed a consent to or waiver of any other breach of the
same or any other covenant, condition or duty.

         6.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.

         6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS.

         6.10 FINAL AGREEMENT. THE LOAN AGREEMENT AND THE OTHER AGREEMENTS, EACH
AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT
TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE LOAN
AGREEMENT AND THE OTHER AGREEMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY EACH BORROWER
AND LENDER.

         6.11 RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM LENDER. EACH BORROWER HEREBY VOLUNTARILY AND KNOWINGLY
RELEASES AND FOREVER DISCHARGES LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF
ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN,
ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR
CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE
THE DATE THIS AMENDMENT IS EXECUTED, WHICH ANY BORROWER MAY NOW OR HEREAFTER
HAVE AGAINST LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND
ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF
CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM
ANY "LOANS", INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING,
TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST
LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN
AGREEMENT OR OTHER AGREEMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS
AMENDMENT.

<PAGE>   11

         IN WITNESS WHEREOF, this Amendment has been executed and is effective
as of the date first above-written.

                                       "BORROWER"
                                        --------

                                       SEPCO INDUSTRIES, INC.

                                       By: /s/ Mac McConnell
                                          ------------------
                                       Name Mac McConnell
                                       Title: Vice President

                                       BAYOU PUMPS, INC.

                                       By: /s/ Mac McConnell
                                          ------------------
                                       Name Mac McConnell
                                       Title: Vice President

                                       AMERICAN MRO, INC.

                                       By: /s/ Mac McConnell
                                          ------------------
                                       Name Mac McConnell
                                       Title: Vice President

                                       "LENDER"
                                        ------

                                       FLEET CAPITAL CORPORATION

                                       By: /s/ H Michael Wills
                                          --------------------
                                       Name H Michael Wills
                                       Title: Senior Vice President<PAGE>   1

                                   EXHIBIT 4.7

                               INPUT/OUTPUT, INC.
                      NON-EMPLOYEE DIRECTORS' RETAINER PLAN

         WHEREAS, the Board of Directors (the "Board") deems it to be in the
best interest of Input/Output, Inc., a Delaware corporation (the "Company"), to
permit the members of the Board of Directors of the Company who are not
employees of the Company to receive all or any portion of their annual retainer
from the Company for service as director in shares of common stock, par value
$0.01 per share, of the Company ("Common Stock");

NOW, THEREFORE, BE IT

                 RESOLVED, at the direction of the Board, the Company
         shall pay an annual stipend of $15,000, as such amount may be
         amended from time to time at the discretion of the Board, to
         each director who is not an employee of the Company (each, a
         "Non-Employee Director"); furthermore, each Non-Employee
         Director serving as chairman of a standing committee of the
         Board shall be entitled to receive an additional annual
         stipend of $3,000, as such amount may be amended from time to
         time at the discretion of the Board, for such service in such
         capacity; such annual stipend amounts (and any such other
         amount(s), as determined from time to time by the Board)
         payable to each Non-Employee Director are herein referred to
         (collectively, where applicable) as the "Annual Retainer" for
         that director; and, be it

                 FURTHER RESOLVED, that effective for calendar years
         beginning on or after January 1, 2001, and subject to the
         following terms and conditions, each Non-Employee Director may
         elect that all or any designated portion of his Annual
         Retainer be paid to him in shares of Common Stock ("Shares")
         in lieu of cash:

                           (i) Each Non-Employee Director
                  desiring to receive Shares must elect and
                  designate (each an "Election") on or before
                  the last day of each calendar year which, if
                  any, portion of his Annual Retainer
                  (expressed in whole dollars) for the
                  succeeding calendar year will be paid to him
                  in Shares; provided however, that for the
                  Annual Retainer to be paid with respect to
                  the seven months commencing June 1, 2001,
                  such Election may be made on or before May
                  15, 2001; and that for any newly-elected or
                  newly-appointed Non-Employee Director, such
                  initial Election may be made within ten (10)
                  days after his becoming a member of the
                  Board; any such Election so made shall
                  remain in effect with respect to such
                  calendar year and for subsequent calendar
                  years unless and until that Election is
                  revoked or modified prior to January 1st of
                  the particular calendar year as to which
                  such revocation or modification pertains;

<PAGE>   2

                           (ii) The Company shall cause to be
                  issued to each Non-Employee Director who has
                  made an Election and who has continued to
                  hold office for the portion of the calendar
                  year through the date of payment of the
                  Annual Retainer, a stock certificate
                  representing Shares equal to (i) the
                  designated portion of the Annual Retainer to
                  be paid in Shares divided by (ii) the Fair
                  Market Value (as defined below) per Share as
                  of the close of business on the payment
                  date; such issuance shall be made within ten
                  (10) business days after such payment date,
                  whereupon the Non-Employee Director shall
                  become a stockholder of the Company with
                  respect to such Shares;

                           (iii) The payment date of the Annual
                  Retainer for each year shall be the date of
                  the Annual Meeting of the Stockholders of
                  the Company, except for the year beginning
                  January 1, 2001, in which case, the payment
                  date shall be May 15, 2001;

                           (iv) No fractional Shares shall be
                  issued to any Non-Employee Director; any
                  fraction of a Share resulting from any
                  Election shall be paid in cash; and

                           (v) Any Shares to be issued to
                  Non-Employee Directors pursuant to these
                  resolutions shall be transferred from the
                  available shares of Common Stock held in the
                  treasury of the Company; and, be it

                  FURTHER RESOLVED, that for purposes of these resolutions:

                           (i) the "Proper Officers" shall
                  mean any of the Company's Chief Executive
                  Officer, President and any Vice President;
                  and

                           (ii) "Fair Market Value" shall mean
                  the per share fair market value of Common
                  Stock as determined by such methods or
                  procedures as shall be established from time
                  to time by the Committee; unless otherwise
                  determined by the Committee in good faith,
                  the per share Fair Market Value of Common
                  Stock as of a particular date shall mean (i)
                  the closing sales price per share of Common
                  Stock on the national securities exchange or
                  national quotation service on which the
                  Common Stock is principally traded or
                  quoted, for the last preceding date on which
                  there was

<PAGE>   3

                  a sale of such Common Stock on such exchange
                  or quoted on such quotation service, or (ii)
                  if the shares of Common Stock are then
                  traded in an over-the-counter market for
                  which closing price information is not
                  generally available, the average of the
                  closing bid and asked prices for the shares
                  of Common Stock in such over-the-counter
                  market for the last preceding date on which
                  there was a sale of such Common Stock in
                  such market, or (iii) if the shares of
                  Common Stock are not then listed on a
                  national securities exchange or national
                  quotation service or traded in an
                  over-the-counter market, such value as the
                  Committee, in its sole discretion, shall
                  determine; and, be it

                  FURTHER RESOLVED, that the arrangement covered by these
         resolutions shall be referred to as the "Input/Output, Inc.
         Non-Employee Directors' Retainer Plan;" (the "Plan") and that the
         approval of such Plan by the Board shall be deemed the approval by the
         board of directors of the issuer of the transactions involving grants,
         awards or other acquisitions from such issuer as prescribed under Rule
         16b-3(d)(1) promulgated by the Securities and Exchange Commission under
         the Securities Exchange Act of 1934; and, be it

                  FURTHER RESOLVED, that the Proper Officers be and hereby are
         authorized and directed to reserve for issuance under the Plan,
         pursuant to the terms and subject to the conditions set forth in the
         Plan, 100,000 shares of Common Stock; and, be it

                  FURTHER RESOLVED, that the Board of Directors of the Company
         may cancel, terminate, amend or modify the Plan in any respect at any
         time for any reason, provided that any such termination, amendment or
         modification to the Plan shall not adversely affect in any material way
         any outstanding Election in effect for the then-current calendar year,
         without the written consent of such electing Non-Employee Director;
         and, be it

                  FURTHER RESOLVED, that the Proper Officers be and hereby are
         authorized to prepare or cause to be prepared, to execute on behalf of
         the Company and to file a registration statement on Form S-8 (together
         with schedules and exhibits thereto, the "Registration Statement") with
         the Securities and Exchange Commission (the "Commission") to register
         under the Securities Act of 1933, as amended (the "Act"), 100,000
         shares (the "Shares") of Common Stock issuable or deliverable from time
         to time under the Plan; that the Proper Officers and directors of the
         Company be and hereby are authorized and directed to prepare or cause
         to be prepared, to execute and to file with the Commission any and all
         necessary amendments to the Registration Statement required under the
         Act, together with all exhibits and documents or supplemental
         information relating thereto, all in such form as may be approved by
         the officers and directors of the Company executing the same; and that
         any such action heretofore taken in connection therewith be and hereby
         is approved, adopted, ratified and confirmed; and, be it

                  FURTHER RESOLVED, that each officer and director of the
         Company required to execute the Registration Statement or any
         amendment(s) thereto to be filed with the Commission be and hereby are
         authorized to execute a power of attorney appointing Messrs. Timothy J.
         Probert or C. Robert Bunch, or either of

<PAGE>   4

         them, as his true and lawful attorneys to do any and all acts and
         things in his name and on his behalf in his capacity as a director or
         officer, and to execute any and all instruments for him and in his
         name, which said attorneys and agents, or either of them, may deem
         necessary or advisable to enable the Company to comply with the Act,
         and any rules, regulations and requirements of the Commission, in
         connection with the filing of the Registration Statement, including
         specifically without limitation, power and authority to sign any and
         all amendments thereto for him; and that any such action heretofore
         taken in connection therewith be and hereby is approved, adopted,
         ratified and confirmed; and, be it

                  FURTHER RESOLVED, that C. Robert Bunch be and hereby is
         appointed the Company's agent for service in connection with the
         registration of the Shares under the Act as contemplated by the
         foregoing resolutions; and, be it

                  FURTHER RESOLVED, that the Proper Officers be and hereby are
         authorized and directed to take any and all actions which any one or
         all of them may deem necessary or advisable to effect the registration
         or qualification of all or part of the Shares for offer and sale under
         the securities or Blue Sky laws of any of the states or territories of
         the United States of America, and in connection therewith, to execute,
         acknowledge, verify, deliver, file and publish all such applications,
         reports, issuer's covenants, resolutions, consents to service of
         process or appointments of the state or other appropriate officials for
         the purpose of receiving and accepting service of process on the
         Company and such other documents as may be required under such laws,
         and to take any and all further actions which they may deem necessary
         or advisable to maintain any such registration or qualification for as
         long as they deem the same to be in the best interest of the Company;
         and that any such action heretofore taken in connection therewith be
         and hereby is approved, adopted, ratified and confirmed; and, be it

                  FURTHER RESOLVED, that the form of any additional resolution
         required in connection with the appropriate qualification or
         registration of the Shares for offer and sale under such securities or
         Blue Sky laws be and hereby is approved and adopted; provided that the
         Proper Officers, on the advice of counsel, consider the adoption
         thereof necessary or advisable, in which case, the Secretary of the
         Company is hereby directed to insert as an appendix hereto a copy of
         such resolution, which shall thereupon be deemed to have been adopted
         by this Board of Directors with the same force and effect as if it were
         set out verbatim herein; and, be it

                  FURTHER RESOLVED, that the Proper Officers, and such other
         appropriate officers of the Company, be and hereby are authorized and
         directed to make, execute, provide and deliver any and all documents,
         applications, certificates, representations, payments, notices and
         other instruments, agreements and documents, and to take any and all
         other action which, in the opinion of the Proper Officers, are or may
         be necessary, advisable or appropriate

<PAGE>   5

         in connection with, or to consummate any of the transactions
         contemplated in the foregoing resolutions, all of which actions to be
         taken, or previously taken, be and hereby are ratified and confirmed in
         all respects.

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