EXHIBIT 10.13
ELEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
JUNE 14, 1996
This Eleventh Amendment to Loan and Security Agreement (the "Amendment") is
made and entered into on this 14th day of June, 1996, to be effective as of the
respective date herein indicated, by and between RED MAN PIPE & SUPPLY CO., an
oklahoma corporation ("Borrower"), and FLEET CAPITAL CORPORATION, a Rhode Island
corporation, successor-in-interest by merger to Fleet Capital Corporation, a
Connecticut corporation, formerly known as Shawmut Capital Corporation,
successor-in-interest to Barclays Business Credit, Inc. ("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 from time
to time, 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 6 hereof, the amendments specified below shall be effective from and
after the respective date herein indicated 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) Effective as of May 1, 1996, the definition of "Base Rate"
contained in Section 1.1 of the Agreement is amended by deleting the words
"Fleet National Bank of Connecticut," and substituting therefor the words "Fleet
National Bank".
(c) Effective as of the date of execution of this Amendment, the
definition of "Borrowing Base" contained in Section 1.1 of the Agreement is
amended and restated to read in its entirety as follows:
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"Borrowing Base - as at any date of determination thereof, an amount
equal to the lesser of:
(a) the Revolving Credit Loan Commitment as of such date; or
(b) an amount up to:
(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) $5,000,000 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) $15,000,000 or (B) sixty percent (60%)
of the value of (after deduction of such reserves as Lender deems
proper and necessary, in its sole discretion) of Eligible
Inventory at such date consisting of oil country 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) $25,000,000 or (B) fifty percent (50%) 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 and of Eligible
Inventory at such date consisting of line pipe 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)
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(v) 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 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."
(d) Effective as of the date of execution of this Amendment, the
definitions of "Eurodollar Base Rate," "Eurodollar Loans," "Real Propertv" and
"Term Note" contained in Section 1.1 of the Agreement are hereby deleted, and
the following shall be substituted therefor:
"Eurodollar Base Rate" - with respect to a Eurodollar Loan, a rate per
annum (rounded upwards, if necessary, to the next higher 1/8 of 1%) equal to the
quotient of the following: (a) the rate (rounded to the nearest 1/8 of 1% or, if
there is no nearest 1/8 of 1%, the next higher 1/8 of 1%) at which deposits in
U.S. dollars, in immediately available funds, approximately equal in principal
amount to the then outstanding principal balance of all Revolving Credit Loans
are offered to Bank for a one month period in the London interbank foreign
currency deposits market at approximately 11 :00 a.m. (London time) on any day
within the term of this Agreement, or if such day is not a Business Day, on the
previous next preceding Business Day, divided bv (b) the difference of l.00
minus the Eurodollar Reserve Requirement. Each determination by Lender of any
Eurodollar Base Rate shall, in the absence of manifest error, be conclusive, and
at Borrower's request, Lender shall demonstrate the basis for such
determination. The foregoing notwithstanding, in the event deposits of U.S.
dollars in amounts approximately equal to the outstanding principal balance of
all Revolving Credit Loans for a one month period are not offered to Bank in the
London interbank foreign currency deposits markets, then the numerator of the
'Eurodollar Base Rate' shall be the thirty (30) day London interbank offered
rate as published from time to time by the Wall Street Journal, or if not
published in the Wall Street Journal, as published in the Financial Times of
London.
"Eurodollar Loan" - a Revolving Credit Loan which bears interest at a rate
based upon the Eurodollar Base Rate."
"Real Property - those certain parcels of real property to be purchased by
Borrower from Xxxxxxx Realty Corporation in connection with the advance under
the Term Loan, and more particularly described on Exhibit 'L' attached hereto."
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"Term Note - the term note to be executed by Borrower on or about the Term
Loan Closing Date in favor of Lender to evidence the Term Loan, which shall be
in substantially the same form of Exhibit 'K' attached to the Eleventh
Amendment."
(e) Effective as of the date of execution of this Arnendment, the
definition of "Commitment" contained in Section 1.1 of the Agreement is deleted
and hereafter all references in the Amendment and the other Agreements to
"Commitment" shall be deemed references to the "Revolving Credit Loan
Commitment."
(f) Effective as of the date of execution of this Amendment, Section
1.1 of the Agreement is hereby amended to include the following definition:
"Eleventh Amendment - that certain Eleventh Amendment to Loan and Security
Agreement, executed by Borrower and Lender."
"Revolving Credit Loan Commitment - $65,000,000.00."
(g) Effective as the date of execution of this Amendment, Section 1.1
of the Agreement is amended by deleting therefrom the definition "Eurodollar
Interest Period."
2. SUBSTITUTION OF FLEET NATIONAL BANK FOR REFERENCES TO FLEET NATIONAL
BANK OF CONNECTICUT. Effective as of May 1, 1996, all references to the words
"Fleet National Bank of Connecticut" contained in the Agreement are deleted and
substituted therefor are the words "Fleet National Bank."
3. THE LOANS. Effective as of the date of execution of this Amendment:
(a) Section 2.1 (B) of the Agreement is hereby amended and restated to
read in its entirety as follows:
"(B) Subject to the terms and conditions of this Agreement, Lender
agrees to make a term loan to Borrower in the aggregate principal amount of
$1,550,000, which shall bear interest and be repayable in accordance with the
terms of the Term Note and shall be secured by the Collateral. The Term Loan may
be advanced in one advance, and the proceeds of such advance shall be used by
Borrower solely for the purpose of purchasing the Real Property. The advance
shall be for an amount not to exceed the purchase price of such Real Property."
(b) Section 2.1 (D) of the Agreement is hereby deleted in its
entirety.
4. INTEREST AND CHARGES. Effective as of the date of the execution of
this Amendment:
(a) Section 3.1(A) of the Agreement is amended and restated to read as
follows:
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"The principal amount of the Term Loan outstanding from day-to-day shall
bear interest, calculated daily at a fluctuating rate per annum, equal to the
lesser of (i) l.0% above the Base Rate (the 'Annual Term Rate') or (ii) the
Maximum Legal Rate. The principal amount of the Revolving Credit Loans
outstanding from day-to-day shall bear interest, calculated daily, at the
following rates per annum (individually called, as applicable an 'Annual
Revolving Rate'): (i) each Eurodollar Loan shall bear interest at a rate per
annum equal to the lesser of (a) 2.75% (or such lesser percentage as may be
provided by subsection (H) hereof) above the Eurodollar Base Rate or (b) the
Maximum Legal Rate, and (ii) each Base Rate Loan shall bear interest at the
lesser of (a) a fluctuating rate per annum equal to 0.5% above the Base Rate, or
(b) the Maximum Legal Rate. Borrower shall deliver to Lender a notice electing
to have the Revolving Credit Loans made hereunder accrue at the Eurodollar Base
Rate or the Base Rate (plus, in each case, the percentages set forth above), and
Borrower may subsequently change the manner in which interest accrues on the
Revolving Credit Loans (from Eurodollar Base Rate to Base Rate or from Base Rate
to Eurodollar Base Rate) by written notice to Lender, each such change being
effective three (3) Business Days after receipt of such notice by Lender. All
outstanding Revolving Credit Loans shall accrue interest in the same manner.
Borrower may not elect to have a portion of the Revolving Credit Loans accrue
interest based upon the Eurodollar Base Rate, and a portion accrue interest
based upon the Base Rate (plus, in each case, the percentages set forth above).
Until Lender receives the first such notice hereunder, all Revolving Credit
Loans shall be Base Rate Loans. Notwithstanding anything herein to the contrary,
unless otherwise agreed by Lender, the becoming due of any obligations (other
than requested Revolving Credit Loans) shall be deemed irrevocably to be a
request by Borrower for a Base Rate Loan on the due date on the amount then so
due."
(b) Section 3.1(B) of the Agreement is amended and restated to read as
follows:
"The interest rate on each Base Rate Loan shall be increased or decreased,
as the case may be, by an amount equal to any increase or decrease in the Base
Rate, with such adjustments to be effective as of the opening of business on the
day that any such change in the Base Rate becomes effective. The Base Rate in
effect on the date hereof shall be the Base Rate effective as of the opening of
business on the date hereof, but if this Agreement is executed on the day that
is not a Business Day, the Base Rate in effect on the date hereof shall be the
Base Rate effective as of the opening of business on the last Business Day
immediately preceding the date hereof. The interest rate on each Eurodollar Loan
shall be increased or decreased, as the case may be, by an amount equal to any
increase or decrease in the Eurodollar Base Rate, with such adjustments to be
effective as of the opening of business on the day that any such change in the
Eurodollar Base Rate becomes effective. The Eurodollar Base Rate in effect on
the date hereof shall be the Eurodollar Base Rate effective as of the opening of
business on the date hereof, but if this Agreement is executed on a day that is
not a Business Day, the Eurodollar Base Rate in effect on the date hereof shall
be the Eurodollar Base Rate effective as of the opening of business on the last
Business Day immediately preceding the date hereof.
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Interest on the Loans shall be calculated daily, based on the actual days
elapsed over a 360 day year. Further, for the purpose of computing interest, all
items of payment received by Lender shall be applied by Lender (subject to final
payment of all drafts and other items received in form other than immediately
available funds) against the obligations on the first Business Day after
receipt. The determination of when a payment is received by Lender will be made
in accordance with Section 3.5."
(c) Section 3.1(H) of the Agreement is amended by deleting from
Subsection thereof the phrase "for the Eurodollar Interest Period applicable
thereto".
(d) Section 3.7(A) and Section 3.7(B) of the Agreement are hereby
deleted in their entirety.
(e) Section 3.7(D) of the Agreement is amended by deleting therefrom
the phrase "any payment of a Eurodollar Loan occurs on a date which is not the
last day of the applicable Eurodollar Interest Period, whether because of
acceleration, prepayment or otherwise, or".
5. CONDITIONS TO ADVANCES UNDER TERM LOAN. Effective as of the date of
execution of this Amendment, Section l0.3 of the Agreement is hereby amended by
deleting the present subsection (F) of such Section l0.3, and substituting
therefor the following subsections (F), (G) and (H):
"(F) Lender shall have received a current, fair market appraisal of
the Real Property, prepared by an appraiser satisfactory to Lender, in its
sole discretion, in an amount and in form and substance satisfactory to
Lender, in its sole discretion;
(G) Lender shall have received a current, complete Phase I
environmental site assessment regarding the Real Property, performed by a
qualified environmental engineer or specialist acceptable to Lender, in its
sole discretion, such environmental site assessment to be in form and
substance satisfactory to Lender, in its sole discretion, together with
such other satisfactory environmental studies, reports, and reviews as
shall be required by Lender, in its sole discretion; and
(H) The Term Loan Closing Date must occur before August 31, 1996."
6. 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 all of the following, each in form and
substance satisfactory to Lender, in its sole discretion, and each duly executed
by each party thereto, other than Lender:
(i) This Amendment;
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(ii) Sale and Participation Agreement, dated on or about the date
hereof, executed by the CIT Group/Business Credit, Inc. ("CIT Group")
(the "Participation Agreement"); and
(iii) All other documents Lender may request with respect to any
matter relevant to this Amendment or the transactions contemplated
hereby.
(b) Lender shall have received from CIT Group the payment required to
be made by CIT Group to Lender pursuant to the provisions of the Participation
Agreement in connection with the purchase by CIT Group of a participation in the
Loans.
(c) No Event of Default shall have occurred and be continuing and no
Default shall exist, unless such Event of Default or Default has been
specifically waived in writing by Lender.
(d) Borrower 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 before or on the date
hereof.
(e) 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.
(f) No material adverse change shall have occurred in the business
operations, financial condition or prospects of Borrower, and no material
adverse litigation shall be pending or, to the knowledge of Borrower,
threatened, against Borrower.
(g) 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.
7. 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.
8. 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
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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.
9. 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.
10. EXPENSES. Borrower shall pay all out-of-pocket expenses of Lender and
CIT Group arising in connection with the preparation, execution, and delivery of
this Amendment and the Participation Agreement, including, but not limited to,
all reasonable legal fees and expenses incurred by Lender and CIT Group;
provided, however, that Borrower's liability to Lender for such out-of-pocket
expenses of Lender shall be limited to $5,000.00 and that Borrower's liability
to CIT for such out-of-pocket expenses of CIT shall be limited to $5,000.00.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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"
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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 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: CFO
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FLEET CAPITAL CORPORATION, a Rhode Island
corporation, successor-in-interest by merger
to Fleet Capital Corporation, a Connecticut
corporation
By: /s/ Xxx X. Xxxxxxxxxxx
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Name: Xxx X. Xxxxxxxxxxx
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Title: Vice President
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