EXHIBIT 10.14
TWELFTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
JUNE 4, 1997
This Twelfth Amendment to Loan and Security Agreement (the "Amendment") is
made and entered into on this 4th day of June, 1997, 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 8 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 the date of execution of this Amendment, the definition
of "Borrowing Base" contained in Section 1.1 of the Agreement is amended as
follows:
(i) The reference in clause (ii) of paragraph (b) to the
dollar amount "$5,000,000" is hereby deleted and substituted therefor
is the dollar amount "$10,000,000".
(ii) The reference in clause (iii) of paragraph (b) to the
dollar amount "$15,000,000" is hereby deleted and substituted therefor
is the dollar amount "$20,000,000".
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(c) Effective as of the date of execution of this Amendment, the
definition of "Eligible International Accounts" contained in Section 1.1 of the
Agreement is amended and restated to read in its entirety as follows:
"Eligible International Accounts - an Account arising in the ordinary
course of Borrower's business from the sale of goods or rendition of
services to an Account Debtor outside the United States which Lender, in
its good faith credit judgment, deems to be an Eligible International
Account. Without limiting the generality of the foregoing, (i) no Account
which arises from a sale to an Account Debtor outside of the United States
shall be an Eligible International Account unless each of the following is
true and correct of such Account: (a) other than for clause (ix) of such
definition, such Account otherwise constitutes an Eligible Account, and (b)
such Account arises from a sale to an Account Debtor acceptable to Lender,
in its sole discretion, and (ii) to the extent the aggregate amount of
Accounts which arise from a sale or sales to Account Debtor(s) in Nigeria
are in excess of $5,000,000, such Accounts shall in no event constitute
'Eligible International Accounts' to the extent of such excess."
(d) Effective as of the date of execution of this Amendment, the
definition of "Revolving Credit Commitment" contained in Section 1.1 of the
Agreement is amended and restated to read in its entirety as follows:
"Revolving Credit Commitment - $75,000,000.00".
2. INTEREST AND CHARGES. Effective as of the date of the execution of
this Amendment:
(a) Section 3.l (A) of the Agreement is amended as follows:
(i) The reference to the percentage "2.75%" is hereby
deleted and substituted therefor is the percentage "2.25%".
(ii) The reference to the percentage "0.5%" is hereby
deleted and substituted therefor is the percentage "0.25%".
3. TERM OF AGREEMENT.
(a) Effective as of the date of execution of this Amendment, Section
3.3(A) of the Agreement is amended as follows:
(i) The reference to the date "October 31, 1999" is hereby
deleted and substituted therefor is the date "October 31, 2000".
(ii) The reference to the date "August 31, 1999" is hereby
deleted and substituted therefor is the date "August 31, 2000".
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4. CAPITAL EXPENDITURES. Effective as of the date of execution of this
Amendment, Section 9.2(H) of the Agreement is amended and restated to read in
its entirety as follows:
"(H) Make Capital Expenditures or payments on account of Capital
Leases which exceed in the aggregate (i) for the period from November 1, 1996,
through October 31, 1997, $1,650,000, or (ii) $750,000 for any fiscal year
thereafter occurring."
5. OPERATING LEASES. Effective as of the date of execution of this
Amendment, Section 9.2(J) of the Agreement is amended by deleting therefrom the
dollar amount "$2000,000" and substituting therefor the dollar amount
"$750,000."
6. FINANCIAL COVENANTS. Effective as of the date of execution of this
Amendment:
(a) Section 9.3(C) of the Agreement is hereby deleted, and the
following shall be substituted therefor:
"(C) Achieve Net Income plus taxes (to the extent deducted
therefrom), calculated as of the last day of each month, beginning June 30,
1997, for the six-month period ending on such day, of at least $3,000,000.
(b) Section 9.3(D) of the Agreement is hereby deleted, and the
following shall be substituted therefor:
"(D) Maintain Excess Cash Flow, calculated as of the last day of
each month, beginning June 30, 1997, for the six-month period ending on
such day, of at least $ l,000,000."
(c) Section 9.3(E) of the Agreement is hereby deleted, and the
following shall be substituted therefor:
"(E) Achieve Adjusted Net Earnings from operations, plus taxes
(to the extent deducted therefrom), for each fiscal year of Borrower,
beginning with the fiscal year ending October 31, 1997, of at least
$6,000,000."
7. CLOSING FEE. Borrower agrees to pay to Lender on the date of execution
of this Amendment, a closing fee equal to $50,000, which fee shall be deemed
fully earned and nonrefundable as of the date of execution of this Amendment.
8. 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:
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(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;
(ii) Amendment to Sale and Participation Agreement, dated on
or about the date hereof, executed by The CIT Group/Business
Credit, Inc. ("CIT Group") (the "Amendment to Participation
Agreement");
(iii) Modifications to such existing real estate lien
documents as shall be required by Lender, duly executed by
Borrower; and
(iv) 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, if any, pursuant to the provisions of the
Participation Agreement, as amended by the Amendment to Participation Agreement,
in connection with the increase of the CIT Group 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.
(h) Borrower shall have paid to Lender, in immediately available
funds, the closing fee set forth in Section 7 hereof, which closing fee is non-
refundable and shall be deemed fully earned as of the date of execution of this
Amendment.
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9. 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.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
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16. 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.
17. 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 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., an Oklahoma
corporation
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
By: /s/ Xxx X. Xxxxxxxxxxx
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Name: XXX X. XXXXXXXXXXX
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Title: VICE PRESIDENT
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