Exhibit 10.41
SECOND MODIFICATION AGREEMENT
This Second Modification Agreement (hereinafter the "Agreement") is dated
the 20th day of February, 2001, and is entered into by and between FINTUBE
TECHNOLOGIES, INC., an Oklahoma corporation (hereinafter the "Company"), whose
mailing address is ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
the location of Company's principal place of business and chief executive office
as of the date hereof, the several financial institutions from time to time a
party to the Original Credit Agreement, as that term is defined below
(collectively, the "Lenders") and BANK OF AMERICA, N.A., a national banking
association, as Swing Line Lender and as agent for the Lenders (the "Agent"),
whose address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, and the
various financial institutions who are parties to this Agreement (collectively
with Agent, the "Lenders").
R E C I T A L S:
1. The parties have had a financing arrangement evidenced by that certain
Credit Agreement dated January 3, 2000 (the "Original Credit Agreement"), as
amended by that certain Modification Agreement dated September 26, 2000 (the
"First Modification") (the Original Credit Agreement as amended by the First
Modification is hereinafter referred to as the "Existing Credit Agreement").
2. Borrower has requested that Lender agree to various amendments to the
Existing Credit Agreement, and Lender has agreed, as set forth in this
Agreement.
3. Subject to the terms, conditions and provisions described herein, the
parties now desire to amend, modify, ratify and renew the Existing Credit
Agreement and the other documents and instruments contemplated thereby in the
manner hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
agreements herein contained, the conditions, covenants, representations and
warranties set forth herein, and other good and valuable consideration, the
receipt, sufficiency and adequacy of which are hereby acknowledged, the parties
hereto mutually agree as follows:
1. Definitions. Capitalized terms used but not defined in this Agreement
shall have the meanings given to them in the Existing Credit Agreement.
2. Eligible Accounts. Subparagraph (iii) of the definition of the term
"Eligible Accounts" in the Existing Credit Agreement is amended by adding the
following at the end:
; and provided further that the foregoing limitation shall be
thirty-five percent (35%) as to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation as
long as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation's corporate ratings are
equal to or better than Ba1 by ▇▇▇▇▇'▇ Investor Service and
BB+ by Standard & Poor's Corporation;
3. Borrowing Base Certificate. Exhibit H of the Existing Credit Agreement
is hereby replaced with Exhibit "H" attached hereto.
4. Paragraph 8.17 Fixed Charge Ratio of the Existing Credit Agreement is
hereby replaced with the following:
8.17 Fixed Charge Coverage Ratio. The Company shall not permit
its Fixed Charge Coverage Ratio determined as of the last day of
each fiscal quarter in any period set forth below to be less than
the ratio set forth below for such period:
Period Ratio
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1/1/00 through 9/30/00 1.10:1
10/1/00 through 3/31/01 1.05:1
4/1/01 through 12/30/02 1.10:1
12/31/02 and thereafter 1.25:1
5. Paragraph 8.18 Capital Expenditures of the Existing Credit Agreement is
hereby replaced with the following:
8.18 Capital Expenditures. (a) The Company will not, and will
not permit any of its Subsidiaries to, make any Capital
Expenditures, except that during any fiscal year set forth below the
Company and its Subsidiaries may make Capital Expenditures so long
as the aggregate amount so made by the Company and its Subsidiaries
(on a consolidated basis) during any such fiscal year does not
exceed the amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
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December 31, 2000 $7,500,000
December 31, 2001 $7,000,000
December 31, 2002 $7,000,000
December 31, 2003 $7,000,000
December 31, 2004 $7,000,000
December 31, 2005 $7,000,000
(b) Notwithstanding the foregoing, in the event that the
amount of Capital Expenditures permitted to be made by the Company
and its Subsidiaries pursuant to clause (i) above in any fiscal year
(before giving effect to any increase in such permitted expenditures
amount pursuant to this clause (ii)) is greater than the amount of
such Capital Expenditures made by the Company and its Subsidiaries
during such fiscal year, such excess (the "Rollover Amount") may be
carried forward and used to make Capital Expenditures in the next
succeeding fiscal year.
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6. Fee. In consideration of Lender's consent to the modifications
described in this Agreement, Company shall pay to Agent a fee in the amount of
$26,500.00 upon Company's execution of this Agreement. Company shall also pay
Agent any amounts due under that terms of the fee letter dated January 10, 2001.
7. "Loan Documents" and "Loan Agreement". The term "Loan Documents" as
used in the Existing Credit Agreement, as amended hereby, shall be interpreted
to include this Agreement and all of the other documents heretofore or hereafter
creating, evidencing, securing and/or relating to the indebtedness and
obligations of the Company to the Lender. The term "Credit Agreement" as may be
used in any of the Loan Documents, including but not limited to this Agreement,
shall be amended to mean the Existing Credit Agreement, together with and as
modified by this Agreement.
8. Ratification of Security Interests. Company hereby ratifies, confirms
and reaffirms all security interests, liens and other encumbrances created under
the Existing Credit Agreement in favor of Agent and all other Loan Documents as
security for repayment of any and all of Company's indebtedness to the Lender,
and to secure Company's performance of any and all Loan Documents, all of which
shall continue in full force and effect and with the same priority as security
for repayment and satisfaction of such Indebtedness and all modifications and
renewals thereof.
9. Modification, Ratification, Representations and Warranties. The terms
and provisions of the Existing Credit Agreement and all other Loan Documents
executed in connection therewith shall be deemed amended, modified, and changed
throughout so as to reflect consistently the matters provided herein. As
amended, modified, renewed or changed consistent herewith, the terms and
provisions of the Existing Credit Agreement and all other Loan Documents (except
for those released in accordance with this Agreement) shall remain in full force
and effect.
10. Representations and Warranties. Company represents and warrants to
Lender that (a) there is no event or condition which is, or with notice or lapse
of time or both would be, a default or Event of Default under the Loan
Agreement; (b) the representations and warranties in the Loan Agreement are true
as of the date of this Agreement as if made on the date of this Agreement; (c)
this Agreement does not conflict with any law, agreement or obligation by which
Company is bound; and (d) this Agreement is within Company's powers, has been
duly authorized, and does not conflict with any of Company's organizational
papers.
11. Obligations Unaffected. Except as otherwise specified herein, the
terms and conditions hereof shall in no manner impair, limit, restrict or
otherwise affect the obligations of the Company to the Lender pursuant to and as
evidenced by the Loan Documents. As a material inducement to the Lender to
execute and deliver this Agreement, Company hereby acknowledges that there are
no claims or offsets against, or defenses or counterclaims to, the terms or
provisions of the obligations created or evidenced by the Loan Documents,
including but not limited to the Notes. In the event of a conflict between the
terms and conditions of this Agreement and the terms and conditions of the other
Loan Documents, the terms and conditions of this Agreement shall control.
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12. Costs. Company agrees to pay to Lender on demand all costs, fees and
expenses (including without limitation attorneys' fees and legal expenses)
incurred or accrued by the Lender in connection with the preparation, execution,
delivery, filing and recording of this Agreement, the Security Instruments and
the other Loan Documents, or any amendment, waiver, consent or modification
thereto or thereof, or any enforcement thereof, including without limitation the
Lender's attorneys' fees and expenses.
13. Separability. If any provision of this Agreement and the other Loan
Documents is held invalid or unenforceable for any reason, such invalidity or
unenforceability shall not affect the other provisions hereof, and this
Agreement and the other Loan Documents shall be construed and enforced as if
such provision had not been included herein.
14. Binding Effect. Except as otherwise expressly provided herein, this
Agreement will remain in effect until all of Company's obligations to Lender
under this Agreement have been fully discharged. This Agreement shall be binding
upon Company and Guarantor and their successors and assigns and shall inure to
the benefit of the Lender, its successors and assigns.
15. Headings. The headings used herein are for convenience and
administrative purposes only and do not constitute substantive matters to be
considered in construing the terms and provisions of this Agreement.
16. Entirety. This Agreement and the other documents executed concurrently
or in connection herewith or pursuant hereto, as they modify the Original Credit
Agreement and the other Loan Documents, constitute the entire agreement between
the parties hereto, and may not be changed orally but shall be changed or
modified only in writing and signed by all of the parties hereto.
17. Governing Law; Miscellaneous. This Agreement and the other Loan
Documents, as amended and modified by this Agreement and the attachments hereto,
have been executed, delivered and accepted pursuant to a lending transaction
negotiated, consummated, and to be performed in Tulsa, Tulsa County, Oklahoma,
and are intended to be a contract made under the laws of the State of Oklahoma
and to be construed in accordance with the laws of said State. Nothing in this
Agreement or any of the other Loan Documents is intended to constitute Lender as
a joint venturer with Company or to constitute a partnership.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
FINTUBE TECHNOLOGIES, INC., an
Oklahoma corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: President & CEO
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BANK OF AMERICA, N.A., as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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BANK OF AMERICA, N.A., as a Lender and
as Swing Line Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Title: Senior Vice President
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BANK ONE, TEXAS, N.A., as a Lender and
Documentation Agent
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Director
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F&M BANK & TRUST COMPANY, as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Senior Vice President
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MID-FIRST BANK, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Title: Vice President
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EXHIBIT "H"
BORROWING BASE CERTIFICATE
Required by the Credit Agreement, dated as of January 3, 2000, by and
among Fintube Technologies, Inc., (the "Borrower"), the Lenders party thereto,
and Bank of America, N.A., as Agent (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement are used herein as therein defined.
Report for the quarter ending: ________________
Pursuant to the Credit Agreement, the Borrower hereby certifies as follows
for itself and its Subsidiaries:
AMOUNT OF ELIGIBLE INVENTORY
Inventory balance:
Master Coil $___________
Work in progress $___________
Finished goods $___________
Other Raw Materials $___________
(a) Inventory balance: $__________
Less Ineligible Inventory (aggregate of (i) through (v) shall constitute
"Ineligible Inventory"):
(i) Inventory which is obsolete, not in good $__________
condition, or not currently usable or salable in
the ordinary course of business
(ii) Inventory consisting of supplies including but not $__________
(iii) limited to the tool crib inventory $__________
(iii) Inventory not located in the United States or $__________
Canada
(iv) Inventory located on leased premises leased to the $__________
extent that the lessor of such premises has not
executed a landlord waiver and consent
(v) Inventory with respect to which Agent does not $__________
have a first priority, valid and perfected
security interest
(b) Total Ineligible Inventory (sum of (i) through $__________
(v))
(c) Master Coil Inventory $__________
Value of Eligible Inventory excluding Master Coil valued at the
lower of cost on a standard cost basis or market ((a) minus (b)
minus (c)) $__________
1. 50% of Eligible Inventory Excluding Master Coil $__________
2. 75% of Master Coil Inventory $__________
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AMOUNT OF ELIGIBLE ACCOUNTS
Aggregate of all Accounts
Less Ineligible Accounts (aggregate of (i) through (xii) shall constitute
"Ineligible Accounts"):
(i) Accounts which remain unpaid ninety (90) days $__________
after the original date of the applicable invoice
(ii) all Accounts owing by a single Account Debtor if $__________
twenty-five percent (25%) or more of the balance
owing by such Account Debtor remains unpaid ninety
(90) days after the original date of the
applicable invoice or invoices
(iii) Accounts with respect to which the Account Debtor $__________
represents an amount exceeding fifteen percent
(15%) of all Accounts; provided however, that with
written consent of Agent, such limitation may be
raised to twenty-five percent (25%); and provided
further that the foregoing limitation shall be
thirty-five percent (35%) as to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Corporation as long as ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Corporation's corporate ratings are equal to or
better than Ba1 by ▇▇▇▇▇'▇ Investors Service and
BB+ by Standard & Poor's Corporation;
(iv) Accounts with respect to which the Account Debtor $__________
is a director, officer, employee, Subsidiary or
Affiliate of the Company or Subsidiary
(v) Accounts with respect to which the Account $__________
(vi) Debtor is the USA or any dept., agency or $__________
instrumentality thereof unless such Account has
been assigned to the Agent in accordance with the
Assignment of Claims Act (other than Accounts
existing on or created within the 30 days
following the Closing Date unless the provisions
of this subsection have not been met with respect
to such Account on or before the 90th day
following the Closing Date)
(vi) Accounts with respect to which the Account Debtor $__________
is not a resident of the United States or Canada,
unless the Account Debtor has supplied an
irrevocable letter of credit satisfactory to Agent
sufficient to cover such Account
(vii) Accounts to the extent to which the Account Debtor $__________
has asserted a counterclaim or has a right of
setoff;
(viii) Accounts for which the prospect of payment or $__________
performance by the Account Debtor is or will be
impaired as determined by Agent
(ix) Accounts with respect to which Agent does not have $__________
a first and valid fully perfected security
interest;
(x) Accounts with respect to which the Account Debtor $__________
is the subject of bankruptcy or similar proceeding
or has made an assignment for the benefit of
creditors or whose assets have been conveyed to a
receiver or trustee;
(xi) Accounts with respect to which the Account $__________
Debtor's obligation to pay is conditional upon its
approval or is otherwise subject to any repurchase
obligation or return right
(xii) Accounts to the extent that the Account Debtor's $__________
indebtedness exceeds a credit limit determined by
Agent
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(xiii) Accounts with respect to which the Account Debtor $__________
is located in any State requiring qualification to
do business or similar filing in order to permit
enforcement in such State, unless the Company or
applicable Subsidiary has duly qualified to do
business as a foreign corporation in such State or
made such similar filing with the appropriate
office in such State for the then current year.
Total Ineligible Accounts: $__________
Eligible Accounts $__________
3. 80% of Eligible Accounts $__________
TOTAL BORROWING BASE
4. (Add Lines 1, 2 and 3) $__________
REVOLVING LOANS OUTSTANDING
5. Principal Amount of Revolving Loans Outstanding $__________
LETTERS OF CREDIT
6. Aggregate L/C Obligations not to exceed $7,500,000 $__________
SWING LINE LOANS OUTSTANDING
7. Principal Amount of Swing Line Loans Outstanding $__________
REVOLVING LOAN AVAILABILITY
8. (The lesser of Line 4 or $20,000,000) minus Line 5 $__________
minus Line 6 minus Line 7
The calculation of the Borrowing Base is based upon calculations
made in accordance with the terms of the Credit Agreement.
The Borrower hereby certifies that the foregoing and the attached
schedule(s) (if any) are true and correct. The Borrower hereby certifies and
warrants that, except as contemplated or permitted by the Credit Agreement, on
the date of this certificate, the Eligible Accounts and the Eligible Inventory
reported herein are free and clear of all Liens.
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FINTUBE TECHNOLOGIES, INC.
By:_____________________________________
Name:___________________________________
(Please Print)
Title:__________________________________
Date: __________________
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