EXHIBIT 10.9
SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
[May 12, 1994]
This Seventh Amendment to Loan and Security Agreement (the "Amendment") is
made and entered into effective as of May 12, 1994, by and between RED MAN PIPE
& SUPPLY CO., an Oklahoma corporation ("Borrower"), and BARCLAYS BUSINESS
CREDIT, INC., a Connecticut corporation ("Lender").
PRELIMINARY STATEMENTS:
1. Borrower and Lender have entered into that certain Loan and Security
Agreement dated as of May 3, 1991, as heretofore amended (as amended, the
"Agreement").
2. Borrower and Lender desire to amend the Agreement and the other
Agreements as hereinafter set forth.
AGREEMENTS:
NOW, THEREFORE, in consideration of the agreements herein contained,
subject to the terms and conditions set forth herein, Borrower and Lender hereby
agree as follows, and agree that, subject to satisfaction of the provisions of
Section 8 hereof, the amendments specified below shall be effective from and
after the date hereof and shall be incorporated into the Agreement and shall
supersede those provisions in the Agreement referenced as follows:
1. DEFINITIONS.
(a) Terms used herein and defined in the Agreement shall have the
meanings set forth in the Agreement except as otherwise provided herein.
(b) The definition of "Borrowing Base" contained in Section 1.1 of the
Agreement is hereby deleted, and the following shall be substituted
therefor:
"Borrowing Base - as at any date of determination thereof, an
amount equal to the lesser of:
(a) the Commitment as of such date, minus the outstanding
principal amount of the Term Loan as of such date; or
(b) an amount up to:
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(i) ninety percent (90%) of the net amount (after deduction of
such reserves as Lender deems proper and necessary in its sole
discretion, including a reserve for sales tax payables) of Eligible
Accounts outstanding at such date;
PLUS
(ii) the lesser of (A) $1,500,000 or (B) ninety percent (90%) of
the net amount (after deduction of such reserves as Lender deems
proper and necessary in its sole discretion, including a reserve for
sales tax payables) of Eligible International Accounts outstanding at
such date;
PLUS
(iii) the lesser of (A) $10,000,000 or (B) sixty percent
(60%) of the value (after deduction of such reserves as Lender deems
proper and necessary in its sole discretion) of Eligible Inventory at
such date consisting of tubular goods held for sale in the ordinary
course of Borrower's business, calculated on the basis of the lower of
cost or market;
PLUS
(iv) the lesser of (A) $6,000,000 or (B) forty percent (40%) of
the value (after deduction of such reserves as Lender deems proper and
necessary in its sole discretion) of Eligible Inventory at such date
consisting of consumable supplies held for sale in the ordinary course
of Borrower's business, calculated on the basis of the lower of cost
or market;
MINUS (subtract from the sum of clauses (i), (ii), (iii) and (iv)
above)
(iv) an amount equal to the sum of (A) the face amount of all LC
Guaranties and Letters of Credit issued by Lender or Affiliates of
Lender and outstanding at such date and (B) any amounts which Lender
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may be obligated to pay in the future for the account of Borrower
pursuant to this Agreement, the other Agreements or otherwise.
For purposes hereof, the net amount of Eligible Accounts or Eligible
International Accounts, as the case may be, at any time shall be the face
amount of such Eligible Accounts or such Eligible International Accounts,
less any and all returns, discounts (which may, at Lender's option, be
calculated on shortest terms), credits, allowances or excise taxes of any
nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time."
(c) The definitions of "Supply Inventory Advance Rate" and "Supply
Inventory Maximum" contained in Section 1.1 of the Agreement are hereby deleted
in their entirety.
2. EXHIBITS. All references in the Agreement (as amended hereby) to
Exhibit "J" shall hereafter be deemed to be references to Exhibit "J" attached
hereto.
3. CONDITIONS. The obligation of Lender to be bound by the provisions of
this Amendment shall be subject to the fulfillment of the following conditions
precedent on or before the date hereof.
(a) Lender shall have received the following, duly executed by each
party thereto, other than Lender:
(i) this Amendment; and
(ii) all other documents Lender may reasonably request with
respect to any matter relevant to this Amendment or the transactions
contemplated hereby.
(b) Borrower and Guarantor shall have performed and complied with all
agreements and conditions contained in the Agreement and the other
Agreements which are required to be performed or complied with by Borrower
or Guarantor before or on the date hereof.
(c) The representations and warranties contained in the Agreement, as
amended hereby, and the other Agreements shall be true and correct in all
material respects as of the date hereof, with the same force and effect as
though made on and as of this date.
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(d) No material adverse change shall have occurred in the business
operations, financial condition or prospects of Borrower or Guarantor, and
no material adverse litigation shall be pending or, to the knowledge of
Borrower or Guarantor, threatened, against Borrower or Guarantor.
(e) All corporate and legal proceedings and all documents required to
be completed and executed by the provisions of, and all instruments to be
executed in connection with the transactions contemplated by, this
Amendment and any related agreements shall be satisfactory in form and
substance to Lender.
4. NO WAIVER. 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 the 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 Agreement, the other
Agreements, this Amendment and any other contract or instrument between Borrower
and Lender.
5. REPRESENTATIONS AND WARRANTIES. 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 Borrower and will not violate the Certificate of Incorporation or
Bylaws of Borrower; (b) 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; (c) no Default or Event of Default
under the 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; and (d) Borrower is in full compliance with all covenants and
agreements contained in the Loan Agreement and the other Agreements, as amended
hereby.
6. 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.
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7. EXPENSES. Borrower shall pay all out-of-pocket expenses arising in
connection with the preparation, execution, delivery and administration of this
Amendment, including, but not limited to, all reasonable legal fees and expenses
incurred by Lender.
8. CONTINUED EFFECT. Except to the extent amended hereby, all terms,
provisions and conditions of the Agreement and all of the other Agreements shall
continue in full force and effect and shall remain enforceable and binding in
accordance with their resPective terms.
9. FURTHER ASSURANCES. Borrower shall, at Lender's request, promptly
execute or cause to be executed and delivered to Lender any and all documents,
instruments or agreements deemed necessary by Lender to continue perfection of
Lender's Liens, to facilitate collection of the Collateral or otherwise to give
effect to or carry out the terms or intent of this Amendment.
10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall for all purposes be deemed an original and all
of which are identical. All parties need not execute the same counterpart.
11. FINAL AGREEMENT. THIS WRITTEN AMENDMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND 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.
12. RELEASE. 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. 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 THE 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
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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.
EXECUTED to be effective as of the date first above written.
RED MAN PIPE & SUPPLY CO.
By: /s/ Xxx Xxxxx
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Name: Xxx Xxxxx
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Title: V.P.-Finance
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BARCLAYS BUSINESS CREDIT, INC.
By: /s/ Xxx X. Xxxxxxxxxxx
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Name: Xxx X. Xxxxxxxxxxx
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Title: Group Vice President
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The undersigned Guarantor, having guaranteed to Lender the payment of the
obligations, as such term is defined in the Unconditional Limited Guaranty (the
"Guaranty") executed by Guarantor on May 3, 1991, hereby acknowledges, confirms,
and agrees that (i) the execution and delivery of this Amendment does not alter,
affect, diminish, release or reduce his liability under the Guaranty, and (ii)
the Guaranty is in full force and effect to secure the obligations described
therein.
/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
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