EXHIBIT 10.17
MAVERICK TUBE CORPORATION
FIRST 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 (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 the definition of Fixed
Charge Coverage Ratio and to modify certain other terms and conditions of the
Credit Agreement, all on the terms and conditions set forth in this Amendment.
Section 1. Amendments 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 4.1 of the Credit Agreement shall be amended by adding
thereto the following definitions:
"Consolidated Net Income Available for Fixed Charges" shall mean, for
any period, earnings before interest and taxes plus depreciation and
amortization plus operating lease expenses less capital expenditures
(excluding, in any event, (i) any expenditures arising from the PMAC
Acquisition to the extent and only to the extent such expenditures were
contemplated by the terms of the Acquisition Documents and (ii) capital
expenditures incurred in connection with the PMAC Acquisition during
the Borrower's Fiscal Year 1999 in an amount not in excess of
$5,600,000) plus, for the Borrower's fiscal quarters ending September
30, 1998, December 31, 1998, March 31, 1999 and June 30, 1999, software
and development related charges incurred during the fourth fiscal
quarter of the Borrower's Fiscal Year 1998 in an amount not in excess
of $1,600,000, all determined on a consolidated basis for the Borrower
and its Subsidiaries in accordance with generally accepted accounting
principles, consistently applied.
"Fixed Charges" shall mean, for any period, interest expense plus
operating lease expenses and all principal payments under Capitalized
Leases plus current scheduled maturities of all indebtedness for
borrowed money other than the Revolving Credit Loans, all determined on
a consolidated basis for the Borrower and its Subsidiaries in
accordance with generally accepted accounting principles, consistently
applied.
1.2. The definition of "Fixed Charge Coverage Ratio" appearing in
Section 4.1 of the Credit Agreement shall be amended in its entirety and so
amended shall be restated to read as follows:
"Fixed Charge Coverage Ratio" shall mean, at any time the same is to be
determined, the ratio of (a) Consolidated Net Income Available for
Fixed Charges, for the four most recently completed fiscal quarters of
the Borrower, to (b) Fixed Charges, for the same four fiscal quarters
of the Borrower.
1.3. Section 7.12 of the Credit Agreement shall be amended in its
entirety and as amended shall be restated to read as follows:
Minimum Fixed Charge Coverage Ratio. The Borrower, as of the close of
any fiscal quarter of the Borrower, will not permit its Fixed Charge
Coverage ratio to be less than (i) 1.0 to 1 for each of the Borrower's
fiscal quarters ended September 30, 1998, December 31, 1998, March 31,
1999 and June 30, 1999, and (ii) 1.25 to 1 for each fiscal quarter of
the Borrower thereafter.
1.4. Schedule I to the Compliance Certificate of the Credit Agreement
shall be amended in its entirety and as so amended shall be restated to read as
set forth on Exhibit A hereto.
Section 2. Conditions Precedent.
The effectiveness of this Amendment is subject to the satisfaction of all of the
following 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 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.
2.5. The Agent shall have received payment by the Borrower of an
amendment fee in the amount of $5,000 for the ratable benefit of the Banks.
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 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 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 limitation 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 10, 1998.
MAVERICK TUBE CORPORATION
By /s/ Xxxxx Xxxxxxxxx
Its President
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 Xxxxx
Its Vice President
MERCANTILE BANK NATIONAL ASSOCIATION
By /s/ Xxxxx Xxxxxx
Its Vice President
