Exhibit 10.18
THIRD AMENDMENT TO SECURED CREDIT AGREEMENT
Xxxxxx Trust and Savings Bank
Chicago, Illinois
Mercantile Bank National Association
St. Louis, Missouri
Ladies and Gentlemen:
Reference is hereby made to that certain Secured Credit Agreement dated as
of September 18, 1998 (as heretofore amended the "Credit Agreement") among the
undersigned, Maverick Tube Corporation, a Delaware corporation (the "Borrower"),
you (the "Banks") and Xxxxxx Trust and Savings Bank, as agent for the Banks (the
"Agent"). All defined terms used herein shall have the same meaning as in the
Credit Agreement unless otherwise defined herein.
The Borrower, the Agent and the Banks wish to amend certain financial
covenants contained in the Credit Agreement and to modify certain other terms
and conditions of the Credit Agreement, all on terms and conditions set forth in
this Amendment.
SECTION 1. AMENDMENT TO CREDIT AGREEMENT
Upon satisfaction of all of the conditions precedent set forth in Section 2
hereof, the Credit Agreement shall be amended as follows:
1.1 Section 7.10 of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:
Section 7.10. Consolidated Tangible Net Worth. The Borrower will
maintain Consolidated Tangible Net Worth in an amount not less
than (1) $70,000,000 at all times from the date hereof through
September 30, 1998 and (b) at all times during each fiscal
quarter of the Borrower thereafter, in an amount not less than
the Minimum Required Amount. For the purposes hereof, the term
"minimum Required Amount" shall mean an amount equal to the sum
of (i) the Minimum Required Amount required to be maintained by
the Borrower during the immediately preceding fiscal quarter,
plus (ii) 75% of the Borrower's Consolidated Net Income (but not
less than zero) for such fiscal quarter then ended, plus (iii)
for the fiscal quarter of the Borrower ending on December 31,
1999, an amount equal to $26,175,000.
1.2 Section 7.26 of the Credit Agreement is hereby amended in its
entirety and as so amended shall be restated to read as follows:
Section 7.26. Capital Expenditures. The Borrower will not, and
will not permit a Subsidiary to, expend or become obligated for
capital expenditures (as defined and classified in accordance
with Generally accepted accounting principles consistently
applied but in any events including the liability of the Borrower
and its Subsidiaries in respect of Capitalized Leases) in any
fiscal year in an amount in the aggregate for the Borrower and
all of its Subsidiaries in excess of (i) for the Borrower's
fiscal year ended September 30, 1999, an amount equal to
$13,000,000, (ii) for the Borrower's fiscal year ended September
30, 2000, an amount equal to $50,000,000 and (iii) for each
fiscal year of the Borrower ending thereafter, an amount equal to
$8,000,000.
SECTION 2. CONDITIONS PRECEDENT
The effectiveness of this Amendment is subject to the satisfaction of all
of the followings conditions precedent:
2.1 The Borrower, the Agent and the Banks shall have executed this
Amendment (such execution may be in several counterparts and the
several parties hereto may execute on separate counterparts).
2.2 A guarantor's Consent for the benefit of the Banks shall have
been executed and delivered by each Guarantor to the Agent, a
form of which is attached hereto.
2.3 The Borrower shall be in full compliance with all of the terms
and conditions of the Loan Documents and no Event of Default or
Potential Default shall have occurred and be continuing
thereunder or shall result after giving effect to this Amendment.
2.4 Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to each of the Banks and their
legal counsel.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Borrower, by its execution of this Amendment, hereby certifies and
warrants the following:
(a) each of the representations and warranties set forth in Section 5
of the Credit Agreement is true and correct as of the date hereof
as if made on the date hereof, except that the representations
and warranties made under Section 5.2 shall be deemed to refer to
the most recent annual report furnished to the Banks by the
Borrower; and
(b) the Borrower is in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or
Potential Default has occurred and is continuing thereunder.
SECTION 4. MISCELLANEOUS
4.1 The Borrower has heretofore executed and delivered to the Agent
the Security Agreement and the Borrower hereby agrees that
notwithstanding the execution and delivery hereof, such Security
Agreement shall be and remain in full force and effect and that
any rights and remedies of the Agent thereunder, obligations of
the Borrower thereunder and any liens or security interests
created or provided for thereunder shall be and remain in full
force and effect, shall not be affected, impaired or discharged
thereby and shall remain in full force and effect, shall not be
affected, impaired or discharged thereby and shall secure all of
its indebtedness, obligations and liabilities to the Agent and
the Banks under the Credit Agreement as amended hereby. Nothing
herein contained shall in any manner affect or impair the
priority of the liens and security interests created and provided
for by the Security Agreement as to the indebtedness which would
be secured thereby prior to giving effect hereto.
4.2 Reference to this specific Amendment need not be made in any
note, document, letter, certificate, any security agreement, or
any communication issued or made pursuant to or with respect to
the Credit Agreement, any reference to the Credit Agreement being
sufficient to refer to the Credit Agreement as amended hereby.
4.3 This Amendment may be executed in any number of counterparts, and
by the different the different parties on different counterparts,
all of which taken together shall constitute one and the same
agreement. Any of the parties hereby may execute this agreement
by signing any such counterpart and each of such counterparts
shall for all purposes be deemed to be an original. This
agreement shall be governed by the internal laws of the State of
Illinois.
4.4 The Borrower agrees to pay all reasonable costs and expenses,
including without limitations attorneys fees, incurred by the
Agent and each of the Banks in connection with the preparation,
negotiation, execution and delivery of this Amendment and the
other documents contemplated hereby.
Upon acceptance hereof by the Agent and the Banks in the manner hereinafter set
forth, this Amendment shall be a contract between us for the purposes
hereinabove set forth.
Dated as of December 8, 1999
MAVERICK TUBE CORPORATION
By: /s/ Xxxxx X. Xxxxx
-------------------------
Its: Chief Financial Officer
Accepted and agreed to as of the day and year last above written
XXXXXX TRUST AND SAVINGS BANK
Individually and as Agent
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Its: Vice President
MERCANTILE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxx
-------------------------
Its: Vice President
