Document:

<PAGE>   1
                                                                    EXHIBIT 4.19

                                 LIMITED WAIVER

                           REGARDING CERTAIN COVENANTS
                                       AND
                          DISPOSITION OF CERTAIN ASSETS

     This LIMITED WAIVER is made and entered into as of January 24, 2000 (this
"Waiver"), among (a) ITEQ, INC., a Delaware corporation (the "Borrower"), (b)
THE GUARANTORS signatories hereto as guarantors, (c) BANKBOSTON, N.A., a
national banking association having its principal place of business at 100
Federal Street, Boston, Massachusetts 02110 (acting in its individual capacity,
"BKB"), and the other lending institutions which are or become parties to the
Credit Agreement defined below (together with BKB, the "Banks"), (d) DEUTSCHE
BANK AG, as documentation agent (the "Documentation Agent"), and (e) BANKBOSTON,
N.A., as agent for the Banks (acting in such capacity, the "Agent"). Capitalized
terms used herein without definition shall have the meanings assigned to such
terms in the Credit Agreement defined below.

     WHEREAS, the Borrower, the Guarantors, the Banks, the Documentation Agent
and the Agent have entered into Revolving Credit Agreement, dated as of October
28, 1997 (as amended and in effect from time to time, the "Credit Agreement"),
pursuant to which the Banks have extended credit to the Borrower on the terms
set forth therein;

     WHEREAS, the Borrower has requested that the Banks and the Agent suspend or
waive certain covenants and other provisions contained in the Credit Agreement
and other Loan Documents; and

     WHEREAS, the Banks and the Agent have agreed to honor such requests upon
the terms and subject to the conditions contained herein;

     NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

     SECTION 1.  LIMITED SUSPENSION OF CERTAIN FINANCIAL COVENANTS.

     (a) The Banks and the Agent hereby agree temporarily to suspend the
Borrower's obligation to comply with Sections 8.1, 8.2, 8.3, 8.4, 8.6 and 8.7 of
the Credit Agreement until 5 p.m., Boston time, on February 29, 2000, provided,
that each of the following conditions are met:

          (i) the Borrower's EBITDA for the month of November, 1999, plus any
     non-cash losses incurred in that month in connection with the Clinton Sale
     for that month, is no less than negative $386,000,

          (ii) the Borrower's EBITDA for the month of December, 1999, is no less
     than negative $350,000, exclusive, to the extent otherwise included in the
     computation of EBITDA for the month of December, 1999,
<PAGE>   2

                                      -2-

     of any increase in the Borrower's reserve for discontinued assets
     attributable to the HMT Sale and not exceeding $4,000,000 in the aggregate,

          (iii) the Borrower's EBITDA for the month of January, 2000, is no less
     than negative $350,000, and

          (iv) the Borrower shall have provided to the Banks and the Agent,
     within 25 days following the end of each of December, 1999, and January,
     2000, a certificate signed by the Borrower's chief financial officer
     certifying as to the Borrower's compliance with minimum EBITDA condition
     for that month as set forth in this SECTION.1(a), together with the details
     thereof as reasonably requested by the Agent.

     (b) At 5:00 p.m., Boston time, on February 29, 2000, or at such earlier
time as any condition set forth in SECTION.1(a) is not met, the provisions of
SECTION.1(a) shall expire and be of no further force or effect, and the Banks
and the Agent shall thereupon have all of the rights and remedies set forth in
the Credit Agreement and the other Loan Documents as if the Borrower's
compliance with Sections 8.1, 8.2, 8.3, 8.4, 8.6 and 8.7 of the Credit Agreement
had never been suspended.

     SECTION 2. WAIVER REGARDING CERTAIN INVESTMENT RESTRICTIONS. The Banks and
the Agent hereby waive any provision of Section 7.3 of the Credit Agreement that
would otherwise restrict or prohibit:

     (a) the Borrower's investments in its International Subsidiaries (other
than International Guarantors) made prior to January 11, 2000, provided that,
after giving effect to each such investment when originally made, all of such
investments did not at that time exceed a total amount equal to 7% of
Consolidated Total Assets, and

     (b) an additional investment by the Borrower in Air-Cure Environmental GmbH
("Air-Cure") not to exceed $1,000,000 (or the equivalent thereof in
Deutschmarks), provided that such investment meets each of the following
conditions:

          (i) Air-Cure shall have obtained from an institutional lender in
     Germany (the "German Lender"), reasonably satisfactory to the Agent, a
     working capital line of credit not to exceed $1,000,000 (or the equivalent
     thereof in Deutschmarks),

          (ii) Air-Cure's obligations to the German Lender under the line of
     credit shall be secured by a prior perfected security interest in all or
     substantially all of the existing and after-acquired personal property
     assets of Air-Cure, subject only to such exceptions as are customary under
     German law and are satisfactory to the Agent,

          (iii) the Borrower shall have requested the Agent to issue under the
     Credit Agreement, and the Agent shall have issued, in favor the

<PAGE>   3
                                      -3-

     German Lender a Financial Letter of Credit, in a Maximum Drawing Amount not
     to exceed $1,000,000 (or the equivalent thereof in Deutschmarks),
     supporting Air-Cure's payment obligations to the German Lender under the
     line of credit and requiring, as a condition to draw thereunder,
     presentation of a certificate of the German Lender as to Air-Cure's payment
     default under the line of credit, together with a written assignment by the
     German Lender to the Agent, for the benefit of the Banks and the Agent, of
     all of the German Lender's right, title and interest in the line of credit
     and the collateral security therefor, and

          (iv) the documents evidencing the line of credit, the attachment,
     perfection and priority of the collateral security therefor, the Financial
     Letter of Credit, the draw certificate, the form of assignment, the related
     Letter of Credit Application, and all other documents, certificates and
     opinions relating to thereto and reasonably requested by the Agent shall be
     in form and substance reasonably satisfactory to the Agent and shall be
     executed and delivered by the parties thereto to the reasonable
     satisfaction of the Agent.

     (c) The Borrower agrees that it shall, and shall cause its Subsidiaries to,
continue to comply with the provisions of Section 7.3 of the Credit Agreement,
except as expressly modified in SECTIONS.2 (a) and (b).

     SECTION 3. LIMITED WAIVER REGARDING SALES OF CERTAIN ASSETS.

     (a) As used in this SECTION 3, the following terms have the meanings set
forth below:

     Birmingham. The tank manufacturing operations of the Borrower and its
Subsidiaries located in Birmingham, Alabama.

     Birmingham Assets. The assets of Birmingham to be sold as described on
Exhibit A attached hereto.

     Birmingham Sale. The sale by the Borrower or one or more of its
Subsidiaries of the Birmingham Assets.

     Escrow Funds. For any Subject Sale, any funds constituting the deferred
portion of the purchase price for such Subject Sale to be held in escrow,
whether pending determination of future assets or liabilities or otherwise. The
term includes, if applicable, any interest on such funds.

     Escrow Letter of Credit. For any Subject Sale, a Financial Letter of Credit
issued by the Agent, at the request of the Borrower, in favor of the buyer under
such Subject Sale or in favor of the buyer's nominee.

     Fresno. The shop built operations of the Borrower and its Subsidiaries
located in Fresno, California.

<PAGE>   4
                                      -4-

     Fresno Assets. The assets of Fresno to be sold as described on Exhibit B
attached hereto.

     Fresno Sale. The sale by the Borrower or one or more of its Subsidiaries of
the Fresno Assets.

     Graver. Graver Manufacturing Co., Inc., a Delaware corporation.

     Graver Assets. The assets and, if applicable, the issued and outstanding
capital stock of Graver and ITEQ Aviation, to be sold as described on Exhibit C
attached hereto.

     Graver Sale. The sale by the Borrower or one or more of its Subsidiaries of
the Graver Assets.

     HMT. The so-called HMT divisions of ITEQ Storage.

     HMT Assets. The assets of HMT and, if applicable, the issued and
outstanding capital stock of one or more Subsidiaries of ITEQ Storage or the
Borrower to be sold as described on Exhibit D attached hereto.

     HMT Sale. The sale by the Borrower and one or more of its Subsidiaries of
the HMT Assets.

     ITEQ Aviation. ITEQ Aviation, Inc., a Delaware corporation.

     ITEQ Storage. ITEQ Storage Systems, Inc., a Delaware corporation.

     Net Cash Proceeds. For each Subject Sale, the gross cash proceeds, net of
reasonable direct transaction costs, such as broker's fees, transfer taxes and
professional fees and expenses incurred on account of such Subject Sale. The
term does not include (a) any Escrow Funds or (b) any funds received by the
Agent pursuant to SECTION 3(a)(vi) in exchange for the issuance of an Escrow
Letter of Credit.

     Reliable. Reliable Steel, Inc., a Delaware corporation.

     Reliable Assets. The assets and, if applicable, the issued and outstanding
capital stock of Reliable, to be sold as described on Exhibit E attached hereto.

     Reliable Sale. The sale by the Borrower or one or more of its Subsidiaries
of the Reliable Assets.

     SLO The field erect operations of ITEQ Storage located in San Luis Obispo,
California.

     SLO Assets. The assets of SLO to be sold as described on Exhibit F
attached hereto.

<PAGE>   5
                                      -5-

     SLO Sale. The sale by the Borrower or one or more of its Subsidiaries of
the SLO Assets.

     Subject Assets. The Birmingham Assets, the Fresno Assets, the Graver
Assets, the HMT Assets, the Reliable Assets and the SLO Assets.

     Subject Sales. The Birmingham Sale, the Fresno Sale, the Graver Sale, the
HMT Sale, the Reliable Sale and the SLO Sale.

     (b) The Banks and the Agent hereby consent to each Subject Sale, to the
release by the Agent of the Agent's security interest in the Subject Assets
applicable to such Subject Sale, and to the release from its guaranty of any
Subsidiary which is a Guarantor and all of whose capital stock is being sold as
part of such Subject Assets, provided that, for such Subject Sale, each of the
following conditions are met:

          (i) the Net Cash Proceeds of such Subject Sale shall be no less than
     the amount set forth in the table below opposite such Subject Sale, and
     such Subject Sale shall have been completed by the date set forth in such
     table opposite such Subject Sale:

<TABLE>
<CAPTION>

        ----------------------------- ------------------------------------ --------------------------------
                                       NET CASH PROCEEDS TO BE RECEIVED
               SUBJECT SALES                      AT CLOSING                       COMPLETION DATE
        ----------------------------- ------------------------------------ --------------------------------
<S>                                             <C>                             <C>
          HMT Sale                              $38,500,000                     February 28, 2000
          Graver Sale                           $3,000,000                      February 28, 2000
          SLO Sale                              $8,500,000                      February 28, 2000
          Fresno Sale                           $1,600,000                      June 30, 2000
          Reliable Sale                         $2,500,000                      June 30, 2000
          Birmingham Sale                       $600,000                        June 30, 2000
</TABLE>

          (ii) the Net Cash Proceeds of such Subject Sale, if not paid directly
     to the Agent by the buyer, shall, upon receipt by the Borrower or any
     Subsidiary of such Net Cash Proceeds, be forthwith paid to the Agent for
     application to the Obligations,

          (iii) each of the then Total Commitment and the then maximum permitted
     outstanding amount of the Revolving Credit Loans, as set forth in the first
     sentence of Section 2.1 of the Credit Agreement, shall be permanently and
     automatically reduced by an amount equal to the Net Cash Proceeds of such
     Subject Sale, such reduction to be effective at the time at which such Net
     Cash Proceeds are first received by the Borrower or any Subsidiary,

          (iv) the Agent's security interest under the Security Documents shall
     attach, on a first perfected basis, to any non-cash proceeds of such
     Subject Sale, the Borrower hereby agreeing to, and to cause any applicable
     Subsidiary to,

<PAGE>   6
                                       -6-

               (A) deliver any such non-cash proceeds consisting of instruments
          or investment property, together with indorsements and stock powers
          executed in blank, to the Agent to hold as Collateral under the
          Security Documents,

               (B) permit the Agent to notify any escrow agent of the Agent's
          security interest, for the benefit of the Banks and the Agent, in any
          Escrow Funds, and cause the escrow agent to agree, at the time of the
          establishment of the escrow, using irrevocable instructions
          satisfactory to the Agent, to deliver the Escrow Funds, to the Agent,
          without further consent of the Borrower or such Subsidiary, for
          application to the Obligations, to such extent and at such time as
          delivery would otherwise be available to the Borrower or such
          Subsidiary under the terms of the escrow, and

               (C) take any other action as may be necessary or, in the opinion
          of the Agent, advisable for the Agent to perfect and to maintain its
          perfection and priority of such security interest,

          (v) the Agent and its counsel shall have reviewed and shall be
     reasonably satisfied with the terms and conditions of the purchase and sale
     agreement of such Subject Sale, any escrow arrangements, and all related
     documents as well as the identity of the buyer thereunder to the extent not
     previously disclosed to the Banks and the Agent prior to January 12, 2000,

          (vi) to the extent that any such purchase and sale agreement shall
     provide that payment of any portion of the purchase price is to be deferred
     as Escrow Funds, the Borrower or any applicable Subsidiary shall have used
     reasonable commercial efforts to afford the Agent the option to receive the
     Escrow Funds for application to the then outstanding Revolving Credit Loans
     (or if the Revolving Credit Loans have been paid in full, then application
     to other Obligations) in exchange for the issuance of an Escrow Letter of
     Credit and, if such option is granted to and exercised by the Agent, such
     funds shall have been received by the Agent upon issuance of the Escrow
     Letter of Credit, provided, however, that such efforts shall not be
     required of the Borrower or such Subsidiary, and the Agent may not exercise
     any such option granted, if the Maximum Drawing Amount of all Escrow
     Letters of Credit, including the Maximum Drawing Amount of any such
     proposed Escrow Letter of Credit, would exceed (A) the amount of the Total
     Commitment, minus (B) the then maximum permitted outstanding amount of
     Revolving Credit Loans as set forth in Section 2.1 of the Credit Agreement,
     minus (C) the Letter of Credit sublimit set forth in Section 3.1(a)(i) of
     the Credit Agreement,

          (vii) prior to such Subject Sale, the Banks and the Agent shall have
     received copies of, and shall be satisfied with, the results of

<PAGE>   7
                                      -7-

     appraisals and valuations by professional appraisers and valuation experts,
     to the extent so engaged by the Borrower or any of its Subsidiaries to
     support the sales price reflected in the purchase and sale agreement for
     such Subject Sale, and

          (viii) unless otherwise waived in writing by the Majority Banks, after
     otherwise giving effect to this Waiver, no Default or Event of Default
     shall have occurred and shall be continuing at the time of completion of
     such Subject Sale or would occur as a result thereof.

     (c) Upon satisfaction of the conditions set forth in SECTION 3(b) for a
Subject Sale, the Agent is instructed by the Banks (i) to provide such Uniform
Commercial Code or other releases and confirmations of releases of the Agent's
security interest in the applicable Subject Assets sold under such Subject Sale,
(ii) to provide any releases or confirmations of release of any Guarantor from
its guaranty if all of the capital stock of such Guarantor is comprised in the
Subject Sale sold under such Subject Sale, and (iii) if applicable, to deliver
to the Borrower or its nominee any certificated securities of such Guarantor's
capital stock in the possession or under the control of the Agent. The Agent
shall be entitled to assume that any factual condition set forth in SECTION
3(b), not evident from the Agent's own books and records, has been met unless
the officers of the Agent active upon the Borrower's account have actual
knowledge that such condition has not been met.

     (d) The Agent and the Banks acknowledge and agree that the Letter of Credit
sublimit set forth in Section 3.1(a)(i) of the Credit Agreement, and which is
currently $5,000,000, shall not include the Maximum Drawing Amount of any Escrow
Letter of Credit. The Maximum Drawing Amount of Escrow Letters of Credit shall
otherwise be included in computations of credit availability under the Credit
Agreement when such availability is measured by reference to the Maximum Drawing
Amounts of Letters of Credit. In the event of a drawing under an Escrow Letter
of Credit, the then maximum permitted outstanding amount of Revolving Credit
Loans, as set forth in the first sentence of Section 2.1 of the Credit
Agreement, shall be increased by the amount of such drawing. Any drawing under
an Escrow Letter of Credit shall not increase the Total Commitment.

     (e) The provisions of this SECTION 3 supersede (i) in respect of the
Birmingham Sale, the Limited Waiver Regarding Disposition of Certain Assets and
Certain Financial Covenants dated as of September 30, 1999, and (ii) in respect
of the HMT Sale, the Limited Waiver Regarding Disposition of Assets dated as of
December 8, 1999.

     SECTION 4. WAIVER FEES. The Borrower hereby agrees to pay to the Agent, for
the account of the Banks that execute this Waiver, a waiver fee equal to $15,000
in the aggregate (the "Waiver Fee"). The Waiver Fee shall be shared pro rata by
the Banks that execute this Waiver in accordance with their Commitments. The
Waiver Fee shall be nonrefundable and fully earned as of the date hereof.

<PAGE>   8
                                      -8-

     SECTION 5. CONDITIONS TO EFFECTIVENESS. This Waiver shall not become
effective unless on or prior to 5:00 p.m. Boston time on Monday, January 24,
2000, (a) the Waiver Fee shall have been paid to the Agent for the account of
each of the Banks that execute this Waiver, and (b) this Waiver shall have been
executed and delivered by the Borrower, the Guarantors, the requisite Banks and
the Agent. For purposes of Sections 1 and 2, the requisite Banks are the
Majority Banks. For purposes of Section 3, the requisite Banks are all of the
Banks. Any Exhibit relating to a Subject Sale referred to in Section 3 may be
delivered by the Borrower after this Waiver has become effective, but the
provisions of Section 3 applicable to such Subject Sale will not become
effective until the Agent has received and approved such Exhibit.

     SECTION 6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to the Banks and the Agent as follows:

     SECTION 6.1. REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. Each of
the representations and warranties of the Borrower contained in the Credit
Agreement as modified hereby or in any document or instrument delivered pursuant
to or in connection with the Credit Agreement as modified hereby are true as of
the date hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and changes occurring in the
ordinary course of business which singly or in the aggregate are not materially
adverse, or to the extent that such representations and warranties relate solely
and expressly to an earlier date) and, taking into account this Waiver, no
Default or Event of Default has occurred and is continuing.

     SECTION.6.2. AUTHORITY, NO CONFLICTS, ETC. The execution, delivery and
performance of this Waiver and the transactions contemplated hereby (i) are
within the corporate authority of the Borrower and the Guarantors, (ii) have
been duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any material breach or contravention of any provision
of law, statute, rule or regulation to which the Borrower or any Guarantor is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or Guarantors so as to materially adversely affect the assets,
business or any activity of the Borrower or Guarantors, and (iv) do not conflict
with any provision of the corporate charter or bylaws of the Borrower or
Guarantors or any agreement or other instrument binding upon them. The
execution, delivery and performance of this Waiver will result in valid and
legally binding obligations of the Borrower and Guarantors enforceable against
each in accordance with the respective terms and provisions hereof.

     SECTION 7. RATIFICATION, ETC. This Waiver is limited to the waivers set
forth herein and upon the terms and subject to the conditions contained herein.
Except as expressly stated herein, the Credit Agreement, the other Loan
Documents and all documents, instruments and agreements related thereto are
hereby ratified and confirmed in all respects and shall continue in full force
and effect. This Waiver is a Loan Document.

<PAGE>   9
                                      -9-

     SECTION 8. RELEASE. In order to induce the Agent and the Banks to enter
into this Waiver, each of the Borrower and the Guarantors acknowledges and
agrees that: (i) neither the Borrower nor any Guarantor has any claim or cause
of action against the Agent or any Bank (or any of its respective directors,
officers, employees or agents); (ii) neither the Borrower nor any Guarantor has
any offset right, counterclaim or defense of any kind against any of their
respective obligations, indebtedness or liabilities to the Agent or any Bank;
and (iii) each of the Agent and the Banks has heretofore properly performed and
satisfied in a timely manner all of its obligations to the Borrower and each
Guarantor. The Borrower and the Guarantors wish to eliminate any possibility
that any past conditions, acts, omissions, events, circumstances or matters
would impair or otherwise adversely affect any of the Agent's and the Banks'
rights, interests, contracts, collateral security or remedies. Therefore, each
of the Borrower and the Guarantors unconditionally releases, waives and forever
discharges (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the Agent or any Bank to either the Borrower and any
Guarantor, except the obligations to be performed by the Agent or any Bank on or
after the date hereof as expressly stated in this Waiver, the Credit Agreement
and the other Loan Documents, and (B) all claims, offsets, causes of action,
suits or defenses of any kind whatsoever (if any), whether arising at law or in
equity, whether known or unknown, which the Borrower or any Guarantor might
otherwise have against the Agent, any Bank or any of its directors, officers,
employees or agents, in either case (A) or (B), on account of any past or
presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.

     SECTION 9. COUNTERPARTS. This Waiver may be executed in any number of
counterparts, which together shall constitute one instrument.

     SECTION 10. GOVERNING LAW. THIS WAIVER SHALL BE A CONTRACT UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS, SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SAID JURISDICTION, WITHOUT
REFERENCE TO CONFLICTS OF LAW, AND IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT.

<PAGE>   10

     IN WITNESS WHEREOF, the parties hereto have executed this Waiver as an
instrument under seal to be effective as of the date first above written.

THE BORROWER:

ITEQ, INC.

By:/s/  MARK E. JOHNSON
  ------------------------------
     Name:  Mark E. Johnson
     Title: Chairman

<PAGE>   11

THE GUARANTORS:

ITEQ MANAGEMENT COMPANY
EXELL, INC. (a Delaware corporation which is
 successor by merger to EXELL. INC., a Texas
 corporation)
ITEQ TANK SERVICES, INC. (successor by
 merger to HMT TANK SERVICE, INC.)
RELIABLE STEEL, INC.
AIR-CURE DYNAMICS, INC.
AMEREX INDUSTRIES, INC.
OHMSTEDE, INC.
INTEREL ENVIRONMENTAL
 TECHNOLOGIES, INC.
ALLIED INDUSTRIES, INC.
ITEQ CONSTRUCTION SERVICES, INC.
 (f/k/a HMT CONSTRUCTION SERVICES,
 INC.)
ITEQ INTELLECTUAL PROPERTIES, INC.
 (f/x/a AIX INTELLECTUAL PROPERTIES,
 INC.)
ITEQ INVESTMENTS, INC. (f/k/a
 ASTROTECH INVESTMENTS, INC.)
TEXOMA TANK COMPANY, INC.
ITEQ STORAGE SYSTEMS, INC. (f/k/a
 BROWN-MINNEAPOLIS TANK &
 FABRICATING CO., successor by merger to
 HMT, INC., HMT SENTRY SYSTEMS, INC.
 and TRUSCO TANK, INC.)
GRAVER MANUFACTURING CO., INC.
 (f/k/a GRAVER HOLDING COMPANY,
 successor by merger to GRAVER TANK &
 MFG. CO., INC., GRAVER TANK
 INTERNATIONAL, INC., GRAVER POWER,
  INC., and GRAVER TANK & VESSEL, INC.)
G.L.M. ACQUISITION, L.L.C.

By:/s/  MARK E. JOHNSON
  -----------------------------
     Name:  Mark E. Johnson
     Title: Chairman

<PAGE>   12
THE LENDERS:

BANKBOSTON, N.A.,
 individually and as Agent

By: /s/  VIRGINIA W. DENNETT
  --------------------------------
  Name:  Virginia W. Dennett
  Title: Vice President

DEUTSCHE BANK AG,
 individually and as Documentation Agent

By: /s/  MARGARET S. CHEAVER
  ---------------------------------
  Name:  Margaret S. Cheaver
  Title: Managing Director

By: /s/  ROBERT C. WHEELER
  ---------------------------------
  Name:  Robert C. Wheeler
  Title: Director

BANK OF SCOTLAND

By: /s/  ANNIE GLYNN
  ----------------------------------
  Name:  Annie Glynn
  Title: Senior Vice President

BANK ONE, TEXAS, N.A.

By:  /s/  BRADLEY C. PETERS
  ----------------------------------
  Name:  Bradley C. Peters
  Title: Vice President

<PAGE>   13

PARIBAS (f/k/a Banque Paribas)

By:/s/  SCOTT CLINGAN
  -----------------------------------
  Name:  Scott Clingan
  Title: Director

By: /s/  LARRY ROBINSON
  -----------------------------------
  Name:  Larry Robinson
  Title: Vice President

COMERICA BANK

By: /s/  T. BANCROFT MATTEI
  -----------------------------------
  Name:  T. Bancroft Mattei
  Title: Account Officer

THE FUJI BANK, LIMITED

By: /s/  RAYMOND VENTURA
  -----------------------------------
  Name:  Raymond Ventura
  Title: Vice President & Manager

HIBERNIA NATIONAL BANK

By: /s/  CHRISTOPHER PITRE
  -----------------------------------
  Name:  Christopher Pitre
  Title: Vice President

BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.)

By: /s/  WILLIAM E. LIVINGSTONE, IV
  -----------------------------------
  Name:  William E. Livingstone, IV
  Title: Managing Director

<PAGE>   14

UNION BANK OF CALIFORNIA, N.A.

By: /s/  JOEL STEINER
  -----------------------------------
  Name:  Joel Steiner
  Title: Vice President

CHASE BANK TEXAS, NATIONAL ASSOCIATION (f/k/a Texas Commerce Bank, N.A.)

By:/s/  BRUCE A. SHILCUTT
  -----------------------------------
  Name:  Bruce A. Shilcutt
  Title: Vice President<PAGE>   1
                                                                    EXHIBIT 4.20

                       LIMITED WAIVER AND EIGHTH AMENDMENT
                                       TO
                           REVOLVING CREDIT AGREEMENT

         This LIMITED WAIVER AND EIGHTH AMENDMENT TO CREDIT AGREEMENT is made
and entered into as of April 3, 2000 (this "Amendment"), among (a) ITEQ, INC., a
Delaware corporation (the "Borrower"), (b) THE GUARANTORS signatories hereto as
guarantors, (c) FLEET NATIONAL BANK (f/k/a BankBoston, N.A.), a national banking
association having a place of business at 100 Federal Street, Boston,
Massachusetts 02110 (acting in its individual capacity, "Fleet"), and the other
lending institutions which are or become parties to the Credit Agreement defined
below (together with Fleet, the "Banks"), (d) DEUTSCHE BANK AG, as documentation
agent (the "Documentation Agent"), and (e) FLEET NATIONAL BANK, as agent for the
Banks (acting in such capacity, the "Agent"). Capitalized terms used herein
without definition shall have the meanings assigned to such terms in the Credit
Agreement defined below.

         WHEREAS, the Borrower, the Guarantors, the Banks, the Documentation
Agent and the Agent have entered into the Revolving Credit Agreement, dated as
of October 28, 1997 (as amended and in effect from time to time, the "Credit
Agreement"), pursuant to which the Banks have extended credit to the Borrower on
the terms set forth therein;

         WHEREAS, the Borrower has requested that the Banks and the Agent
suspend or waive certain covenants and amend other provisions contained in the
Credit Agreement and other Loan Documents; and

         WHEREAS, the Banks and the Agent have agreed to honor such requests
upon the terms and subject to the conditions contained herein;

         NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

         SECTION 1. TEMPORARY SUSPENSION OF CERTAIN PROVISIONS OF THE CREDIT
AGREEMENT.

         (a) Subject to the satisfaction of the conditions precedent set forth
in Section 9 and in consideration and reliance upon the agreements of the
Borrower and the Guarantors contained herein, the Banks and the Agent hereby
agree temporarily to suspend the Borrower's obligation to comply with Sections
8.1, 8.2, 8.3, 8.4, 8.5, 8.6 and 8.7 and, only with respect to the period ended
December 31, 1999, paragraphs (a), (b) and (c) of Section 6.4 (the "Specified
Covenants") of the Credit Agreement from February 29, 2000 until 5 p.m., Boston
time, on June 29, 2000; provided, that each of the following conditions are
satisfied throughout such period:

<PAGE>   2
                                      -2-

                  (i) the Borrower will not make or permit any Subsidiary to
         make, Capital Expenditures or enter into Capitalized Leases and
         operating leases with rental obligations, in an aggregate amount
         greater than $1,000,000 for all such Capital Expenditures, Capitalized
         Leases and rental obligations for the period from January 1, 2000 to
         June 29, 2000,

                  (ii) the Borrower will not cause or permit the combined
         monthly EBITDA for any period of two-consecutive months to be less than
         the combined minimum EBITDA for such two-month period set forth below:

                  <TABLE>
                  <CAPTION>
                  -------------------------------------------------
                  TWO - MONTH PERIOD                 MINIMUM EBITDA
                  -------------------------------------------------
                  <S>                                <C>
                  February and March 2000            $455,000
                  -------------------------------------------------
                  March and April 2000               $438,000
                  -------------------------------------------------
                  April and May 2000                 $746,000
                  -------------------------------------------------
                  </TABLE>

                   (iii) the Borrower shall have provided to the Banks and the
         Agent, within 20 days following the end of each of the two-month
         periods set forth above, a certificate signed by the Borrower's chief
         financial officer certifying as to the Borrower's compliance with each
         of the conditions for such period as set forth herein, together with
         the details thereof as reasonably requested by the Agent; and

                  (iv) the Borrower shall deliver to the Banks as soon as
         available its financial statements for the fiscal period ended December
         31, 1999.

         (b) At 5:00 p.m., Boston time, on June 29, 2000, or at such earlier
time as any condition set forth in Section 1(a) is not met or any other Event of
Default under the Credit Agreement shall occur (other than the Borrower's
failure to comply with the Specified Covenants through June 29, 2000), the
provisions of Section 1(a) shall expire and be of no further force or effect,
and the Banks and the Agent shall thereupon have all of the rights and remedies
set forth in the Credit Agreement and the other Loan Documents as if the
Borrower's compliance with the Specified Covenants had never been suspended.

         (c) The waiver set forth in Section 1(a) shall apply only to the
Specified Covenants. No waiver with respect to any other Default or Event of
Default, whether presently existing or hereafter arising, is granted hereby. Any
obligation to make Swing Line Loans, to make Revolving Credit Loans or to issue,
extend or renew Letters of Credit shall, at all times, be subject to the
satisfaction of all of the terms and conditions of the Credit Agreement,
including, without limitation, the conditions precedent set forth in the Credit
Agreement. The Banks and the Agent shall, at all times, retain all of the rights
and remedies in respect of any Default or Event of Default under the Credit
Agreement other than, during the limited period described in Section 1(a), with
respect to the Specified Covenants.

<PAGE>   3
                                      -3-

         SECTION 2.   AMENDMENT TO CREDIT AGREEMENT.

         SECTION 2.1  DEFINITIONS.

         (a) The following new definitions are hereby inserted in Section 1.1 of
the Credit Agreement in their appropriate alphabetical order:

         "Agency Account Agreements.  See Section 6.21(b)."

         "Borrowing Base. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report,
which is equal to the aggregate of:

                           (a) 65% of that amount which is (i) the total sum,
                  for each of four weeks ended prior to the date on which the
                  Borrowing Base Report is due, of the amount of the outstanding
                  Accounts Receivable of the Borrower and the Guarantors not
                  more than 60 days overdue as of the last Business Day of each
                  such week, minus, for such week, reserves and write-offs
                  therefor taken by the Borrower and the Guarantors in
                  accordance with their past practices and generally accepted
                  accounting principles consistently applied by the Borrower and
                  the Guarantors divided by (ii) four; and

                           (b)      $46,000,000."

         "Borrowing Base Report. A Borrowing Base Report signed by the chief
financial officer of the Borrower and in a form and containing details
satisfactory to the Agent."

         "Cash Flow Statements. On a consolidated basis for the Borrower and its
Subsidiaries, a rolling 13-week cash flow forecast in a form satisfactory to the
Agent prepared by the Borrower showing comparisons of actual to forecast
performance for prior weekly periods."

         "Eighth Amendment. The Limited Waiver and Eighth Amendment to Revolving
Credit Agreement dated as of April 3, 2000, among the Borrower, the Guarantors,
the Banks, the Documentation Agent and the Agent."

         "Eighth Amendment Effective Date. The date on which the conditions set
forth in Section 9 of the Eighth Amendment are satisfied."

         "Excess Line Fee.  See Section 4.1(d)."

         "Fleet. Fleet National Bank, a national banking association, in its
individual capacity."

         "Fleet Concentration Account.  See Section 6.21(b)."

<PAGE>   4
                                      -4-

         "Interim Concentration Account. See Section 6.21(b)."

         "Letter of Credit Commitment. $2,110,000, as such amount may be reduced
from time to time."

         "Local Accounts.  See Section 6.21(b)."

         "Revolver Commitment. $54,450,327, as such amount may be reduced from
time to time."

         (b) The definition of Agent's Head Office is hereby amended by deleting
the word "Head" and replacing it with the word "Boston."

         (c) The definition of Applicable Commitment Rate is hereby amended and
restated in its entirety as follows: "Applicable Commitment Rate. The applicable
rate with respect to the Commitment Fee is 0.5%."

         (d) The definition of Base Rate is hereby deleted in its entirety and
replaced with the following:

         "Base Rate. The higher of (a) the variable annual rate of interest so
designated from time to time by Fleet as its "prime rate", such rate being a
reference rate and not necessarily representing the lowest or best rate being
charged to any customer or (b) one-half of one percent (1/2%) above the
overnight federal funds effective rate, as published by the Board of the Federal
Reserve System, as in effect from time to time. Changes in the Base Rate
resulting from any changes in Fleet's "prime rate" shall take place immediately
without notice or demand of any kind on the effective day of such change."

         (e)      The definition of BKB is hereby deleted.

         (f) The definition Guarantors is hereby amended by adding the following
phrase to the end thereof ", and the "New Guarantors" (as such term is defined
in the Eighth Amendment").

         (g) The definition of Issuing Bank is hereby amended and restated in
its entirety to read as follows:

         "Issuing Bank.  Fleet."

         (h) The definition of Mortgages is hereby amended and restated in its
entirety to read as follows:

         "Mortgages. The several mortgages and deeds of trust, or other
instruments, whether dated or to be dated on, prior to or after the Closing
Date, from the Borrower and its Subsidiaries to the Agent with respect to the
fee interests of the

<PAGE>   5
                                      -5-

Borrower and its Subsidiaries in the Real Property and in form and substance
satisfactory to the Banks and the Agent."

         SECTION 2.2. AMENDMENT TO SECTION 2.1 OF THE CREDIT AGREEMENT. Section
2.1 of the Credit Agreement is hereby amended as follow.

         (a) The Total Commitment is permanently reduced to $57,670,000.

         (b) Starting from the words "provided that" in line 7 to the end of the
first sentence is amended and restated as follow:

         "provided that (i) the outstanding aggregate amount of Swing Line
Loans, Revolving Credit Loans, unpaid Reimbursement Obligations, and the Maximum
Drawing Amount shall not exceed $57,670,000 at any time, as such amount may be
reduced from time to time (the "Total Commitment"), and (ii) the outstanding
Swing Line Loans and Revolving Credit Loans shall not exceed the lesser of (i)
the Revolver Commitment and (ii) the Borrowing Base at any time."

         SECTION 2.3. AMENDMENT TO SECTION 2.2 OF THE CREDIT AGREEMENT. Section
2.2(c) is hereby inserted in appropriate section order as follow:

         "(c) Any reduction or termination in the Revolver Commitment or the
Letter of Credit Commitment shall be permanent and may not be reinstated."

         SECTION 2.4. AMENDMENT TO SECTIONS 2.4 AND 2.5 OF THE CREDIT AGREEMENT.
The Borrower shall no longer be permitted the option for Revolving Credit Loans
to bear interest by reference to the Eurodollar Rate after February 29, 2000.
Section 2.4 of the Credit Agreement is hereby amended and restated in its
entirety as follows:

                  "SECTION 2.4. INTEREST ON LOANS. The outstanding principal
         amount of the Revolving Credit Loans (including Swing Line Loans) shall
         bear interest at the rate per annum equal to the Base Rate plus the
         Applicable Base Rate Margin on Base Rate Loans. Interest shall be
         payable monthly in arrears on the first Business Day of each calendar
         month and on the Maturity Date for all Loans."

         SECTION 2.5. AMENDMENT TO SECTION 2.10 OF THE CREDIT AGREEMENT. Section
2.10 of the Credit Agreement is hereby amended by inserting the item "(a)" after
the phrase "If any time" and inserting the following at the end of the section,
but before the period:

         ", and (b) the sum of the Swing Line Loans and the Revolving Credit
Loans shall exceed the lesser of the Revolver Commitment and the Borrowing Base,
the amount of such excess will be immediately paid to the Agent for application
to the Obligations until such excess has been reduced to zero."

         SECTION 2.6. AMENDMENT TO SECTION 3.1(a) OF THE CREDIT AGREEMENT.
Section 3.1(a) of the Credit Agreement starting from the words "provided,
however" in line 9 of the paragraph to the end of the first sentence of such
paragraph is amended and restated as follow:

<PAGE>   6
                                      -6-

         "provided, however, that after giving effect to such request, the
Maximum Drawing Amount plus all unpaid Reimbursement Obligations shall not
exceed the Letter of Credit Commitment."

         SECTION 2.7. AMENDMENT TO SECTION 4.1 OF THE CREDIT AGREEMENT. Section
4.1(a) of the Credit Agreement is hereby amended and restated in its entirety
and a new Section 4.1(d) is hereby inserted in appropriate section order as
follow:

         "(a) COMMITMENT FEE. The Borrower agrees to pay to the Agent, for the
respective account of each Bank, a fee (the "Commitment Fee") calculated at the
Applicable Commitment Fee Rate on the daily unused portion of the Revolver
Commitment and the Letter of Credit Commitment. The Commitment Fee shall be
payable in arrears on the last day of each calendar month, with a final payment
on the Maturity Date."

         "(d) EXCESS LINE FEE. The Borrower agrees to pay to the Agent, for the
ratable accounts of the Banks, an excess line fee in arrears, on the last day of
each calendar month, on the average daily amount by which the Revolver
Commitment exceeds $51,780,327 (the "Excess Line Fee"). The Excess Line Fee
shall be calculated on such average daily amount at the monthly rate of one
percent (1%)."

         SECTION 2.8. AMENDMENT TO SECTION 6 OF THE CREDIT AGREEMENT. Section 6
of the Credit Agreement is hereby amended, restated, modified or added as
follows

         (a) Section 6.4 of the Credit Agreement is hereby amended by deleting
the word "and" at the end of Section 6.4(f), replacing the period at the end of
Section 6.4(g) with a semi-colon, and inserting the following subsections in
appropriate section order therein:

                  "(h) on second Business Day of each calendar week a Cash Flow
         Statement in a form and containing details satisfactory to the Agent,
         together with, in the case of the second Cash Flow Statement during any
         calendar month, evidence satisfactory to the Agent that the Cash Flow
         Statement has been reviewed by Arthur Andersen & Co. for accuracy,
         completeness, appropriateness of the methodology and controls and
         reasonableness of assumptions; and

                  (i) on the second Business Day of each calendar week a
         Borrowing Base Report as of the last day of the immediately preceding
         calendar week."

         (b) The following new subsections are inserted in Section 6 of the
Credit Agreement in appropriate section order: -

         "SECTION 6.20. MANDATORY COMMITMENT REDUCTION. The Borrower hereby
agrees that the Total Commitment and the Revolver Commitment shall both be
reduced by an amount equal to (a) 100% of the Net Cash Proceeds of asset sales
and casualty insurance proceeds received by the Borrower or any Subsidiary other
than, so long as no Event of Default has occurred, sales of obsolete equipment
from and after March 27, 2000 and not exceeding $50,000 in the aggregate, (b)
100% of the

<PAGE>   7
                                      -7-

Net Cash Proceeds of any new debt offerings by the Borrower or any
Subsidiary, exclusive or any purchase money debt, and (c) 50% of the Net Cash
Proceeds of any equity offerings by the Borrower or any Subsidiary. For purposes
of this section, Net Cash Proceeds shall have the same meaning assigned to such
term in the Limited Waiver dated as of January 24, 2000 entered into by the
Borrower and the Banks."

         "SECTION 6.21. CASH MANAGEMENT SYSTEM. (a) The Borrower or any
Guarantor (other than the International Guarantors) may maintain one or more
disbursement accounts (the "Specified Accounts") for which the Agent does not
have lock box or agency account arrangement and if, such accounts are maintained
with the Agent or any Bank, the Agent or such Bank will have waived any right of
setoff to reduce the Obligations with the sum maintained in the Specified
Accounts. The Borrower and the Guarantors (other than the International
Guarantors) may at all times maintain in the Specified Accounts up to the total
sum of $1,500,000 to be used for general working capital purposes. The Borrower
hereby agrees to provide the account information in respect of the Specified
Accounts (other than the Specified Accounts maintained with the Agent or any
Bank) to the Agent, in form and substance satisfactory to the Agent, including,
without limitation, weekly account balances of the Specified Accounts.

         (b) Except for the Specified Accounts, the Borrower and the Guarantors
(other than the International Guarantors) shall establish with the Agent a cash
management system satisfactory to the Agent by no later than April 17, 2000. The
Borrower and the Guarantors shall (i) establish a depository account (the "Fleet
Concentration Account") under the control of the Agent for the benefit of the
Banks and the Agent, in the name of the Borrower, (ii) instruct all account
debtors and other obligors, pursuant to notices of assignment and instruction
letters in form and substance satisfactory to the Agent, to remit all cash
proceeds of Accounts Receivable to local depository accounts ("Local Accounts")
or concentration depository accounts ("Interim Concentration Accounts") with
financial institutions which have entered into agency account agreements and, if
applicable, lock box agreements (collectively, "Agency Account Agreements") in
form and substance satisfactory to the Agent, or the Fleet Concentration
Account, (iii) direct all depository institutions with Local Accounts to cause
all funds held in each such Local Account to be transferred no less frequently
than once each day to, and only to, an Interim Concentration Account or the
Fleet Concentration Account, (iv) direct all depository institutions with
Interim Concentration Accounts to cause all funds of the Borrower and its
Guarantors held in such Interim Concentration Accounts to be transferred daily
to, and only to, the Fleet Concentration Account, and (v) at all times ensure
that immediately upon the Borrower's or any of its Guarantors' receipt of any
funds constituting or cash proceeds of any Collateral, all such amounts shall
have been deposited in a Local Account, an Interim Concentration Account or the
Fleet Concentration Account. Good funds credited to the Fleet Concentration
Account will be applied as follows, unless (i) an Event of Default specified in
Section 12(g) or (h) has occurred or (ii) any other Event of Default has
occurred and the Agent is enforcing its rights with respect thereto, in which
case all such funds shall be applied in accordance with Section 12.4 of the
Credit Agreement:

<PAGE>   8
                                      -8-

                           (A) first, to interest and the amounts (exclusive of
                  principal amount) due and owing on the Swing Line Loans and
                  the Revolving Credit Loans,

                           (B) second, so long as no Default or Event of Default
                  has occurred and is continuing and to the extent that the
                  aggregate credit balance in the Specified Accounts does not
                  exceed $1,500,000, to the Specified Accounts as from time to
                  time instructed by the Borrower,

                           (C) third, to principal on the Swing Line Loans,

                           (D) fourth, to principal on the Revolving Credit
                  Loans,

                           (E) fifth, to cash collateralize the Reimbursement
                  Obligations in an amount equal to 110% of the Maximum Drawing
                  Amounts of all Letters of Credit outstanding, and

                           (F) sixth, to all other Obligations.

         SECTION 2.9. AMENDMENT TO SECTION 7.1 OF THE CREDIT AGREEMENT. Section
7.1 of the Credit Agreement is hereby amended by deleting the word "and" at the
end of subsection (h) and inserting the word "; and" at the end of subsection
(i) in lieu of the period and inserting the following new subsection in
appropriate section order therein"

         "(j) Indebtedness incurred for working capital purposes by the
International Subsidiaries that are not International Guarantors."

         SECTION 2.10. AMENDMENT TO SECTION 7.2 OF THE CREDIT AGREEMENT. Section
7.2 of the Credit Agreement is hereby amended by deleting the word "and" at the
end of subsection (i) and inserting the word "; and" at the end of subsection
(j) in lieu of the period and inserting the following new subsection in
appropriate section order therein:

         "(k) Liens incurred by International Subsidiaries that are not
International Guarantors securing Indebtedness incurred by such International
Subsidiary and permitted by Section 7.1(j)."

         SECTION 2.11. AMENDMENT TO SECTION 12 OF THE CREDIT AGREEMENT. Section
12 of the Credit Agreement is hereby amended by inserting after Section 12.3 the
following new Section 12.4:

                  "12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that
         following the occurrence or during the continuance of any Default or
         Event of Default, the Agent or any Bank, as the case may be, receives
         any monies in connection with the enforcement of any the Security
         Documents, or otherwise with respect to the realization upon any of the
         Collateral, such monies shall be distributed for application as
         follows:

<PAGE>   9
                                      -9-

                                    (a) First, to the payment of, or (as the
                           case may be) the reimbursement of the Agent for or in
                           respect of all reasonable costs, expenses,
                           disbursements and losses which shall have been
                           incurred or sustained by the Agent in connection with
                           the collection of such monies by the Agent or for any
                           amount owing to the Agent or Fleet as cash management
                           bank, for the exercise, protection or enforcement by
                           the Agent of all or any of the rights, remedies,
                           powers and privileges of the Agent under this Credit
                           Agreement or any of the other Loan Documents or in
                           respect of the Collateral or in support of any
                           provision of adequate indemnity to the Agent against
                           any taxes or liens which by law shall have, or may
                           have, priority over the rights of the Agent to such
                           monies;

                                    (b) Second, to all other Obligations in such
                           order or preference as the Majority Banks may
                           determine; provided, however, that (i) distributions
                           shall be made (A) pari passu among Obligations with
                           respect to the Agent's fee and all other Obligations
                           and (B) with respect to each type of Obligation owing
                           to the Banks, such as interest, principal, fees and
                           expenses, among the Banks pro rata, and (ii) the
                           Agent may in its discretion make proper allowance to
                           take into account any Obligations not then due and
                           payable;

                                    (c) Third, upon payment and satisfaction in
                           full or other provisions for payment in full
                           satisfactory to the Banks and the Agent of all of the
                           Obligations, to the payment of any obligations
                           required to be paid pursuant to Section 9-504(1)(c)
                           of the Uniform Commercial Code of the Commonwealth of
                           Massachusetts; and

                                    (d) Fourth, the excess, if any, shall be
                           returned to the Borrower or to such other Persons as
                           are entitled thereto."

         SECTION 2.12. AMENDMENT TO SECTION 15.2 OF THE CREDIT AGREEMENT.
Section 15.2 of the Credit Agreement is hereby amended by inserting after the
end of item (i) the following proviso as item (ii) and sequentially renumbering
the subsequent items accordingly:

<PAGE>   10
                                      -10-

         "(ii) the reversal or withdrawal of any provisional credits granted by
the Agent upon the transfer of funds from lock box, bank agency or concentration
accounts or in connection with the provisional honoring of checks or other
items,".

         SECTION 3. ADDITIONAL SECURITY. (a) In addition to the Obligations
being guaranteed by the current Guarantors, the Obligations shall be further
guaranteed pursuant to documents in a form satisfactory to the Agent by Air-Cure
(Canada) Technologies, Ltd. and G.L.M. Tanks & Equipment Ltd. (the "New
Guarantors").

         (b) The Obligations and the guaranteed obligations of the Guarantors
(such term hereinafter includes the New Guarantors) shall, to the extent not
already accomplished, be secured by a first perfected security interest in all
existing and after-acquired tangible and intangible personal property of the
Borrowers and the Guarantors and first perfected mortgages and deeds of trust in
all existing and after-acquired fee real property of the Borrower and the
Guarantors, all pursuant to documents in a form satisfactory to the Agent.

         (c) The Collateral security shall include (i) mortgages and deeds of
trust over all fee real estate interests of the Borrower and the Guarantors,
(ii) all intellectual property of the Borrower and the Guarantors, and (iii) a
pledge of 100% of the capital stock of all U.S. Subsidiaries or to the extent a
pledge by the Borrower or any Guarantor of the capital stock of its
International Subsidiary would result in income recognition by the Borrower or
the Guarantor for U.S. income tax purposes, then 65% of the stock of such
International Subsidiary.

         SECTION 4. INVESTMENT BANKER. The Borrower hereby agrees to (a)
promptly and in any event by no later than April 30, 2000, identify and engage
an investment banking firm of recognized standing and reasonably satisfactory to
the Majority Banks to explore the strategic business alternatives available to
the Borrower, and (b) on or prior to June 15, 2000, arrange for such investment
banking firm to make a presentation to the Banks and the Agent as to such firm's
recommendations in respect of the strategic business alternatives available to
the Borrower and plans to work with the Borrower to timely implement such
recommendations.

         SECTION 5. COMMERCIAL FINANCE EXAMINATION. The Borrower and the
Guarantors agree to permit the Agent to conduct a commercial finance
examination, on the premises of the Borrower or any Guarantor and at other
locations where assets of the Borrower or any Guarantor are located, with
respect to the inventory and accounts receivable components of the Collateral
and the Borrowing Base, and with respect to other aspects of the assets,
liabilities and financial condition of the Borrower or the Guarantor as the
Agent may so elect. The Agent shall be permitted to use either internal or third
party examiners. The Borrower and the Guarantors acknowledge, agree and confirm
that (a) any reports or analyses generated by any examiner are not property of
the Borrower or any Guarantor, (b) none of the Borrower and the Guarantors shall
assert any claim to any such report or analyses and (c) pursuant to Section 15.1
of the Credit Agreement, the fees and expenses of such examiner are for the
account of the Borrower. So long as no Event of Default has

<PAGE>   11
                                      -11-

occurred and is continuing, the Agent agrees that the fees of the examiner shall
not exceed the total sum of $9,250 plus reasonable expenses.

         SECTION 6. LIQUIDATION ANALYSIS. The Borrower and the Guarantors hereby
agree to (a) permit PricewaterhouseCoopers LLP ("PWC"), on behalf of counsel to
the Agent, to formulate a liquidation analysis of the Borrower and the
Guarantors and (b) cooperate with PWC in such liquidation analysis. The Borrower
and the Guarantors acknowledge, agree and confirm that (a) any reports or
analyses generated by PWC are not property of the Borrower or any Guarantor, (b)
none of the Borrower and the Guarantors shall assert any claim to any such
report or analyses and (c) pursuant to Section 15.1 of the Credit Agreement, the
fees and expenses of PWC are for the account of the Borrower. So long as no
Event of Default has occurred and is continuing, the Agent agrees that the fees
of PWC for the liquidation analysis shall not exceed the total sum of $130,000
plus reasonable expenses.

         SECTION 7. BANKS' CONSIDERATION. The Banks shall entertain and consider
the requests by the Borrower (a) to permit the Borrower to sell the secured
promissory note made payable to the Borrower in respect of the Graver Sale (as
defined in Section 3(a) of the Limited Waiver dated as of January 24, 2000 (the
"Waiver")) to a buyer reasonably acceptable to the Agent, with the proceeds of
such sale to be applied to reduce the Revolver Commitment, and (b) for the Agent
to issue an Escrow Letter of Credit (as defined in Section 3(a) of the Waiver),
outside of the Letter of Credit Commitment, with the Revolver Commitment to be
reduced by the Maximum Drawing Amount of such Escrow Letter of Credit.

         SECTION 8. CLOSING FEE. The Borrower hereby agrees to pay to the Agent,
for the account of the Banks, a closing fee equal to $50,000 in the aggregate
(the "Closing Fee"). The Closing Fee shall be shared pro rata by the Banks in
accordance with their Commitments. The Closing Fee shall be nonrefundable and
fully earned as of the date hereof.

         SECTION 9. CONDITIONS TO EFFECTIVENESS. This Amendment shall not become
effective unless on or prior to 5:00 p.m., Boston time, April 3, 2000,

         (a) the Agent and the Banks shall have received and be satisfied with
the Borrower's pro forma consolidated and consolidating cash flow statements for
the period to June 30, 2000,

         (b) this Amendment shall have been executed and delivered by the
Borrower, the Guarantors, the Majority Banks and the Agent and, in case of the
each of the New Guarantors, a guaranty satisfactory to the Agent shall have been
executed and delivered,

         (c) the Borrower shall have paid the Closing Fee to the Agent for the
account of each of the Banks,

<PAGE>   12
                                      -12-

         (d) the Agent shall have received evidence satisfactory to it as to the
perfection and priority of all additional security interests, mortgages and
deeds of trust and other instruments described in Section 3 above,

         (e) the Agent shall have received evidence satisfactory to it of
appropriate corporate or other entity actions approving the terms and conditions
set forth herein, and

         (d) the Borrower shall have reimbursed the Agent for, or paid directly,
all fees, costs, and expenses incurred by the Agent's counsel and PWC and for
which invoices have been delivered.

         SECTION 10. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Banks and the Agent as follows:

         SECTION 10.1. REPRESENTATIONS AND WARRANTIES IN CREDIT AGREEMENT. Each
of the representations and warranties of the Borrower contained in the Credit
Agreement as modified hereby or in any document or instrument delivered pursuant
to or in connection with the Credit Agreement as modified hereby are true as of
the date hereof (except to the extent of changes resulting from transactions
contemplated or permitted by the Credit Agreement and changes occurring in the
ordinary course of business which singly or in the aggregate are not materially
adverse, or to the extent that such representations and warranties relate solely
and expressly to an earlier date) and, taking into account this Amendment, no
Default or Event of Default has occurred and is continuing.

         SECTION 10.2. AUTHORITY, NO CONFLICTS, ETC. The execution, delivery and
performance of this Amendment and the transactions contemplated hereby (i) are
within the corporate authority of the Borrower and the Guarantors, (ii) have
been duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any material breach or contravention of any provision
of law, statute, rule or regulation to which the Borrower or any Guarantor is
subject or any judgment, order, writ, injunction, license or permit applicable
to the Borrower or Guarantors so as to materially adversely affect the assets,
business or any activity of the Borrower or Guarantors, and (iv) do not conflict
with any provision of the corporate charter or bylaws of the Borrower or
Guarantors or any agreement or other instrument binding upon them. The
execution, delivery and performance of this Amendment will result in valid and
legally binding obligations of the Borrower and Guarantors enforceable against
each in accordance with the respective terms and provisions hereof.

         SECTION 10.3. CERTAIN SUBSIDIARIES. The Borrower represents, warrants
and covenants that its Subsidiaries ITEQ Tank Management, LLC, ITEQ Tank, LLC
and ITEQ Tank Construction, LLC have no assets and are not conducting any
business and will not acquire any assets or conduct any business.

         SECTION 11. RATIFICATION, ETC. This Amendment is limited to the waiver
and amendments to the Credit Agreement set forth herein and upon the terms and
subject to the conditions contained herein. Except as expressly stated herein,
the

<PAGE>   13
                                      -13-

Waiver, the Credit Agreement, the other Loan Documents and all documents,
instruments and agreements related thereto are hereby ratified and confirmed in
all respects and shall continue in full force and effect. This Amendment is a
Loan Document.

         SECTION 12. RELEASE. In order to induce the Agent and the Banks to
enter into this Amendment, each of the Borrower and the Guarantors acknowledges
and agrees that: (i) neither the Borrower nor any Guarantor has any claim or
cause of action against the Agent or any Bank (or any of its respective
directors, officers, employees or agents); (ii) neither the Borrower nor any
Guarantor has any offset right, counterclaim or defense of any kind against any
of their respective obligations, indebtedness or liabilities to the Agent or any
Bank; and (iii) each of the Agent and the Banks has heretofore properly
performed and satisfied in a timely manner all of its obligations to the
Borrower and each Guarantor. The Borrower and the Guarantors wish to eliminate
any possibility that any past conditions, acts, omissions, events, circumstances
or matters would impair or otherwise adversely affect any of the Agent's and the
Banks' rights, interests, contracts, collateral security or remedies. Therefore,
each of the Borrower and the Guarantors unconditionally releases, waives and
forever discharges (A) any and all liabilities, obligations, duties, promises or
indebtedness of any kind of the Agent or any Bank to either the Borrower and any
Guarantor, except the obligations to be performed by the Agent or any Bank on or
after the date hereof as expressly stated in this Amendment, the Credit
Agreement and the other Loan Documents, and (B) all claims, offsets, causes of
action, suits or defenses of any kind whatsoever (if any), whether arising at
law or in equity, whether known or unknown, which the Borrower or any Guarantor
might otherwise have against the Agent, any Bank or any of its directors,
officers, employees or agents, in either case (A) or (B), on account of any past
or presently existing condition, act, omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense, circumstance or
matter of any kind.

         SECTION 13. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, which together shall constitute one instrument.

         SECTION 14. GOVERNING LAW. THIS AMENDMENT SHALL BE A CONTRACT UNDER THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, SHALL FOR ALL PURPOSES BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SAID JURISDICTION,
WITHOUT REFERENCE TO CONFLICTS OF LAW, AND IS INTENDED TO TAKE EFFECT AS A
SEALED INSTRUMENT.

<PAGE>   14

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
an instrument under seal to be effective as of the date first above written.

THE BORROWER:

ITEQ, INC.

By:  /s/  WILLIAM P. REID
     -------------------------------
     Name:  William P. Reid
     Title: President & CEO

<PAGE>   15

THE GUARANTORS:

ITEQ MANAGEMENT COMPANY
 EXELL, INC. (a Delaware corporation which is
   successor by merger to EXELL, INC., a Texas
   corporation)
 ITEQ TANK SERVICES, INC. (successor by
   merger to HMT TANK SERVICE, INC.)
 RELIABLE STEEL, INC.
 AIR-CURE DYNAMICS, INC.
 AMEREX INDUSTRIES, INC.
 OHMSTEDE, INC.
 INTEREL ENVIRONMENTAL
   TECHNOLOGIES, INC.
 ALLIED INDUSTRIES, INC.
 ITEQ CONSTRUCTION SERVICES, INC.
   (f/k/a HMT CONSTRUCTION SERVICES,
   INC.)
 ITEQ INTELLECTUAL PROPERTIES, INC.
   (f/k/a AIX INTELLECTUAL PROPERTIES,
   INC.)
 ITEQ INVESTMENTS, INC. (f/k/a
   ASTROTECH INVESTMENTS, INC.)
 TEXOMA TANK COMPANY, INC.
 ITEQ STORAGE SYSTEMS, INC. (f/k/a
   BROWN-MINNEAPOLIS TANK &
   FABRICATING CO., successor by merger to
   HMT, INC., HMT SENTRY SYSTEMS, INC.
   and TRUSCO TANK, INC.)
 G.L.M. ACQUISITION, L.L.C.
 AIR-CURE (CANADA) TECHNOLOGIES, LTD.
 G.L.M. TANKS & EQUIPMENT LTD.

By:  /s/  WILLIAM P. REID
     ---------------------------------
     Name:  William P. Reid
     Title: President & CEO

<PAGE>   16

THE LENDERS:

FLEET NATIONAL BANK
(f/k/a BankBoston, N.A.),
   individually and as Agent

By:  /s/  VIRGINIA W. DENNETT
     ------------------------------------------
     Name:   Virginia W. Dennett
     Title:  Director

DEUTSCHE BANK AG,
   individually and as Documentation Agent

By:
     ------------------------------------------
     Name:
     Title:

By:
     ------------------------------------------
     Name:
     Title:

BANK OF SCOTLAND

By:  /s/  ANNIE GLYNN
     ------------------------------------------
     Name:   Annie Glynn
     Title:  Senior Vice President

BANK ONE, TEXAS, N.A.

By:  /s/  BRADLEY C. PETERS
     ------------------------------------------
     Name:   Bradley C. Peters
     Title:  Vice President

<PAGE>   17

PARIBAS (f/k/a Banque Paribas)

By:  /s/  LARRY ROBINSON
     ------------------------------------------
     Name:   Larry Robinson
     Title:  Vice President

By:  /s/  ROSINE K. MATTHEWS
     ------------------------------------------
     Name:   Rosine K. Matthews
     Title:  Vice President

COMERICA BANK

By:  /s/  T. BANCROFT MATTEI
     ------------------------------------------
     Name:   T. Bancroft Mattei
     Title:  Account Officer

THE FUJI BANK, LIMITED

By:  /s/  RAYMOND VENTURA
     ------------------------------------------
     Name:   Raymond Ventura
     Title:  Vice President & Manager

HIBERNIA NATIONAL BANK

By:  /s/  CHRISTOPHER PITRE
     ------------------------------------------
     Name:   Christopher Pitre
     Title:  Vice President

BANK OF AMERICA, N.A. (f/k/a NationsBank, N.A.)

By:  /s/  WILLIAM E. LIVINGSTONE, IV
     ------------------------------------------
     Name:   William E. Livingstone, IV
     Title:  Managing Director

<PAGE>   18

UNION BANK OF CALIFORNIA, N.A.

By:
     ------------------------------------------
     Name:
     Title:

CHASE BANK TEXAS, NATIONAL ASSOCIATION
 (f/k/a Texas Commerce Bank, N.A.)

By:  /s/  BRUCE A. SHILCUTT
     ------------------------------------------
     Name:   Bruce A. Shilcutt
     Title:  Vice President

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