Document:

Exhibit 10.33

 

Execution Copy

 

FIRST AMENDMENT TO
CREDIT AGREEMENT

 

This FIRST AMENDMENT TO
CREDIT AGREEMENT dated this 24th day of March, 2004 (this “Amendment”),
is made by and among UFP Technologies, Inc., a Delaware corporation, Moulded
Fibre Technology, Inc., a Maine corporation, Simco Industries, Inc., a Michigan
corporation, and Simco Automotive Trim, Inc., a Michigan corporation
(collectively, the “Borrowers”), and Fleet Capital Corporation (the “Lender”).

 

WHEREAS, the Borrowers
and the Lender are parties to a Credit and Security Agreement dated as of
February 28, 2003 (the “Credit Agreement”); and

 

WHEREAS, the Borrowers
and the Lender desire to amend certain provisions of the Credit Agreement, all
subject to the terms, conditions and limitations set forth herein;

 

NOW, THEREFORE, in
consideration of the foregoing and the agreements contained herein, the parties
hereby agree as follows:

 

1.             Capitalized Terms.

 

Capitalized terms used
herein which are defined in the Credit Agreement have the same meanings herein
as therein, except to the extent that such meanings are amended hereby.

 

2.             October 1,
2003 Amendments.

 

Subject to the
satisfaction of the terms and conditions set forth in Section 6 hereof,
the Borrowers and the Lender agree that the Credit Agreement is hereby amended,
effective as of October 1, 2003, as follows:

 

(a)           Amendments to Section 1.1 of the
Credit Agreement.  The
definition of “Tangible Net Worth” contained in Section 1.1 of the Credit
Agreement is deleted in its entirety and replaced with the following new
definition:

 

“Tangible Net Worth”
means, at any time, an amount for the Credit Parties (determined on a
consolidated basis without duplication in accordance with GAAP) equal to (a)
the book net worth of the Credit Parties at such time, minus (b) the
aggregate amount at such time of all investments in, and all receivables, fees,
loans and other amounts due from, Affiliates, minus (c) the total
book value at such time of all intangible assets, including without limitation,
such items as goodwill, customer lists, Patents, Copyrights and Trademarks, and
rights (including rights under licenses) with respect to the foregoing.

 

(b)           Amendment to Subsection (b) of
Section 8.10 of the Credit Agreement.  Subsection (b) of Section 8.10 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:

 

(b)           Tangible Net Worth.  The Credit Parties shall not permit the
Tangible Net Worth (determined on a consolidated basis without duplication in
accordance with GAAP) at any time during the periods 

 

 

set forth below to be
less than the required Tangible Net Worth set forth below opposite such
periods:

 

	
  Period

  	
   

  	
  Required Tangible Net Worth

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  October 1,
  2003 through March 31, 2004

  	
   

  	
  $5,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  for each
  succeeding fiscal quarter of the Credit Parties

  	
   

  	
  The required Tangible
  Net Worth of the Credit Parties as at the end of the immediately preceding
  fiscal quarter plus 33% of the quarterly net income of the Credit
  Parties for the fiscal quarter most recently ended; provided that the
  required Tangible Net Worth shall not be reduced by net losses of the Credit
  Parties

  	
   

  

 

3.             December 31,
2003 Amendments.

 

Subject to the
satisfaction of the terms and conditions set forth in Section 6 hereof,
the Borrowers and the Lender agree that the Credit Agreement is hereby amended,
effective as of December 31, 2003, as follows:

 

(a)           Amendments to Section 1.1 of the
Credit Agreement. 
Section 1.1 of the Credit Agreement is amended as follows:

 

(i)            The definition of
“Fixed Charge Coverage Ratio” contained in Section 1.1 of the Credit
Agreement is deleted in its entirety and replaced with the following new
definition:

 

“‘Fixed
Charge Coverage Ratio’ means, for any period, the ratio of:

 

(a)           (i) EBITDA of the Credit Parties for such period,
plus

 

(ii) the following add-backs for non-recurring expenses
in the amounts of:

 

(x) for the fiscal quarter ending December 31,
2003, the actual expenses incurred by the Borrowers during such period relating
to the closing of the California Molded Fiber Plant and the transfer of
equipment therefrom to the Borrowers’ Clinton, Iowa plant; provided that such
amount shall not exceed, in the aggregate, the applicable amount specified in Schedule A
to the First Amendment, and

 

(y) for the fiscal quarter ending December 31,
2003, capital expenditures incurred by the Borrowers relating to the
modification of the Borrowers’ Clinton, Iowa plant for purposes of
accommodating equipment transferred from the California Molded Fiber Plant,
provided that the amount of such capital expenditures shall not exceed, in the
aggregate, the applicable amount specified in Schedule A to the
First Amendment, minus

 

2

 

(iii) the aggregate amount of all Non-Financed Capital
Expenditures during such period, minus

 

(iv) the aggregate amount paid, or required to be paid
(without duplication), in cash in respect of the current portion of all income
taxes for such period, minus

 

(v) for each fiscal quarter of fiscal year 2004, and
each quarter thereafter, the amount of (A) actual lease payments in respect of
the California Molded Fiber Plant during such quarter minus (B) the
actual amount of rental income earned by the Borrowers during such quarter as a
result of the sub-lease of the California Molded Fiber Plant, minus

 

(vi) the aggregate amount of dividends and distributions
permitted to be paid under Section 8.6 and actually paid in cash during
such period, to

 

(b)
the sum for the Credit Parties (determined on a consolidated basis without duplication
in accordance with GAAP), of

 

(i) the aggregate amount of Interest Expense for such
period, plus

 

(ii) the aggregate amount of regularly scheduled
payments of principal in respect of Indebtedness for borrowed money (including
the principal component of any payments in respect of Capital Lease
Obligations) paid or required to be paid during such period.

 

For
purposes of calculating Fixed Charge Coverage Ratio at any time, the Credit
Parties shall be permitted to offset (without duplication) the income taxes
described in subsection (a)(iv) above with state or federal income tax
refunds received by the Credit Parties during such period, but only in an
amount less than or equal to the amount described in subsection (a)(iv)
for such period.

 

(ii)           Section 1.1 of the
Credit Agreement is amended by the addition thereto, in appropriate
alphabetical order, of the following definitions:

 

“‘California Molded
Fiber Plant’ means the Credit Parties’ plant located in Visalia,
California, and formerly used for the production of Molded Fiber.”

 

“‘First Amendment’
means the First Amendment to Credit Agreement dated as of
March     , 2004 among the Borrowers and the Lender.”

 

“‘First Amendment
Effective Date’ means the date upon which all of the conditions set forth
in Section 6 of the First Amendment are satisfied, or are waived by the
Lender in accordance with Section 10.2 of this Agreement.”

 

“‘Operating Cash Flow’
means, for any period, (a) EBITDA of the
Credit Parties for such period minus (b) the aggregate amount of all
Non-

 

3

 

Financed
Capital Expenditures during such period minus (c) the aggregate amount
paid in cash in respect of the current portion of all income taxes for such
period minus (d) the aggregate amount of dividends and distributions
permitted to be paid under Section 8.6 and actually paid in cash during
such period minus (e) the aggregate amount of rent in respect of the
California Molded Fiber Plant paid in cash during such period.”

 

(b)           Amendments to Section 8.10 of the
Credit Agreement. 
Subsections (a), (c) and (d) of Section 8.10 of the Credit
Agreement are deleted in their entirety and replaced with the following new
Subsections (a), (c) and (d) respectively:

 

“(a)         Fixed Charge Coverage
Ratio. The Credit Parties shall not permit the Fixed Charge Coverage Ratio
for each fiscal period set forth below to be less than the ratio set opposite
such period:

 

	
  Period

  	
   

  	
  Minimum Fixed

  Charge Coverage

  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2003
  through December 31, 2003

  	
   

  	
  1.00 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004
  through June 30, 2004

  	
   

  	
  0.07 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  January 1, 2004
  through September 30, 2004

  	
   

  	
  0.60 to 1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Any
  period of four consecutive fiscal quarters ending on or after
  December 31, 2004.

  	
   

  	
  1.00 to 1.00”

  	
   

  

 

 

“(c)         Operating Cash Flow.  The Credit Parties shall not permit
Operating Cash Flow for the fiscal quarter ending March 31, 2004 to be
less than ($300,000).”

 

“(d)         Capital Expenditures.  The Credit Parties shall not, and shall not
permit any Subsidiary to, make any Capital Expenditures (including, without
limitation, incurring any Capital Lease Obligations) which, in the aggregate
for the Credit Parties and all Subsidiaries, exceed $3,750,000 at any time
during any fiscal year.”

 

(c)           Amendment of Exhibit D to the Credit Agreement.  Exhibit D to the Credit Agreement is
hereby replaced with the new form of Exhibit D attached thereto.

 

4.             Effective Date
Amendments.

 

Subject to the
satisfaction of the terms and conditions set forth in Section 6 hereof,
the Borrowers and the Lender agree that the Credit Agreement is hereby amended,
effective as of the date of this Amendment, as follows:

 

(a)           Amendments to Section 1.1 of the
Credit Agreement. 
Section 1.1 of the Credit Agreement is hereby amended as follows:

 

4

 

(i)            The definition of
“Applicable Margin” and “Applicable Unused Fee Rate” contained in
Section 1.1 of the Credit Agreement is hereby deleted in its entirety and
replaced with the following new definition:

 

“‘Applicable Margin’
and ‘Applicable Unused Fee Rate’ means, for any Type of Loans (a) for
the Initial Payment Period (as defined below) the following percentages per
annum:

 

	
   

  	
   

  	
  Applicable
  Margin (% per annum)

  	
   

  	
  Applicable

  Unused Fee Rate

  	
   

  
	
  Class of Loans

  	
   

  	
  Base Rate
  Loans

  	
   

  	
  Eurodollar
  Loans

  	
   

  	
  (% per
  annum)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Revolving
  Loans

  	
   

  	
  0.00

  	
  %

  	
  2.25

  	
  %

  	
  0.25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term
  Loan

  	
   

  	
  0.25

  	
  %

  	
  2.50

  	
  %

  	
  Not Applicable

  	
   

  

 

and (b)   for any Payment Period (as
defined below) other than the Initial Payment Period, the respective rates
indicated below for Loans of such Type opposite the applicable Adjusted Fixed
Charge Coverage Ratio indicated below (or as provided in the final paragraph of
this definition, for part of a Payment Period):

 

	
   

  	
   

  	
   

  	
   

  	
  Applicable
  Unused

  	
   

  
	
   

  	
   

  	
  Applicable
  Margin (% per annum)

  	
   

  	
  Fee Rate

  	
   

  
	
  Adjusted Fixed

  	
   

  	
  Revolving
  Loans

  	
   

  	
  Term Loan

  	
   

  	
  (% per annum)

  	
   

  
	
  Charge Coverage 

  Ratio

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar

  Loans

  	
   

  	
  Base Rate

  Loans

  	
   

  	
  Eurodollar

  Loans

  	
   

  	
  Revolving

  Loans

  	
   

  	
  Term

  Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater
  than or equal to

  1.50 to 1.00

  	
   

  	
  0.00

  	
  %

  	
  1.75

  	
  %

  	
  0.00

  	
  %

  	
  2.00

  	
  %

  	
  0.25

  	
  %

  	
  Not

  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater
  than or equal to

  1.25 to 1.00 but less

  than 1.50 to 1.00

  	
   

  	
  0.00

  	
  %

  	
  2.00

  	
  %

  	
  0.00

  	
  %

  	
  2.25

  	
  %

  	
  0.25

  	
  %

  	
  Not

  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater
  than or equal to

  1.00 to 1.00 but less

  than 1.25 to 1.00

  	
   

  	
  0.00

  	
  %

  	
  2.25

  	
  %

  	
  0.25

  	
  %

  	
  2.50

  	
  %

  	
  0.25

  	
  %

  	
  Not

  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Greater
  than or equal to

  0.80 to 1.00 but less

  than 1.00 to 1.00

  	
   

  	
  0.50

  	
  %

  	
  3.00

  	
  %

  	
  0.50

  	
  %

  	
  3.00

  	
  %

  	
  0.50

  	
  %

  	
  Not

  Applicable

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less
  than 0.80 to 1.00

  	
   

  	
  1.25

  	
  %

  	
  Not 

  Available

  	
   

  	
  1.25

  	
  %

  	
  Not

  Available

  	
   

  	
  0.50

  	
  %

  	
  Not

  Applicable

  	
   

  

 

For purposes hereof, a “Payment
Period” means (i) initially, the period commencing on the First Amendment
Effective Date to and including the

 

5

 

fifth Business Day after
the date of delivery of the financial statements required by
subsection 7.1(b) and the Compliance Certificate required by
subsection 7.1(c) for the fiscal period of the Credit Parties ended
December 31, 2003 (the “Initial Payment Period”), and (ii)
thereafter, the period commencing on the day immediately succeeding the last
day of the prior Payment Period to but not including the fifth Business Day
after the earlier of (x) the due date of the next Compliance Certificate
required to be delivered by the Borrowers to the Lender pursuant to
subsection 7.1(c) concurrently with the delivery by the Borrowers of the
financial statements required by subsection 7.1(b) to be delivered to the
Lender for the periods ended March 31st, June 30th,
September 30th and December 31st of each year,
or (y) the date of the actual receipt by the Lender of such Compliance
Certificate.  Subject to and in
accordance with the final paragraph of this definition, the Applicable Margin
and Applicable Unused Fee Rate shall be effective for each Payment Period (or
in the circumstances described in the final paragraph of this definition, such
portion of a Payment Period).

 

The Applicable Margin and
Applicable Unused Fee Rate for any Payment Period except the Initial Payment
Period shall be determined on the basis of the Compliance Certificates required
to be delivered to the Lender pursuant to subsection 7.1(c) concurrently
with the delivery by the Borrowers of the corresponding financial statements
required by subsection 7.1(b) to be delivered to the Lender for the
periods ended March 31st, June 30th,
September 30th and December 31st of each year, setting
forth, among other things, a calculation of the Adjusted Fixed Charge Coverage
Ratio as at the last day of the fiscal quarter immediately preceding such
Payment Period.

 

Anything in this
Agreement to the contrary notwithstanding, the Applicable Margin and Applicable
Unused Fee Rate shall be the rates applicable when the Adjusted Fixed Charge
Coverage Ratio is less than 0.80 to 1.00 if the Compliance Certificate required
to be delivered by subsection 7.1(c) and the financial statements required
by subsection 7.1(b), respectively, shall not be delivered within five
Business Days after the same shall be due (but only with respect to the portion
of such Payment Period prior to the delivery of such certificate).”

 

(ii)           The definition of
“Borrowing Base” contained in Section 1.1 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following new definition:

 

“‘Borrowing Base’
means, at the relevant time of reference thereto, an amount determined by the
Lender by reference to the most recent Borrowing Base Certificate/Collateral
Update Certificate delivered to the Lender pursuant to Section 2.1(b)
which is equal to the sum of:

 

(a)  85% of Eligible Accounts, plus

 

(b)  the lesser of:

 

(i)  the sum of:

 

6

 

(A)
50% of Eligible Raw Material Inventory,

 

plus

 

(B) 50%
of Eligible Finished Goods Inventory,

 

and

 

(ii)  $3,500,000, minus

 

(c)  the Availability Reserve, minus

 

(d)  reserves for foreign exchange and interest
rate derivative exposure and such other reserves as the Lender in its
reasonable credit judgment  shall deem appropriate from time to time;

 

In determining the Borrowing
Base from time to time, the Lender may, but shall not be required to, rely upon
reports or analyses generated by the Credit Parties (including, without
limitation, Borrowing Base Certificates/Collateral Update Certificates) and
reports or analyses generated by or on behalf of the Lender.  Notwithstanding anything to the contrary set
forth herein, the Lender may in its reasonable credit judgment at any time and
from time to time, adjust the percentages of Eligible Accounts, Eligible Raw
Materials Inventory, Eligible Finished Goods Inventory and undrawn amount of
Documentary LCs included within the Borrowing Base.”

 

(iii)          Section 1.1 of the
Credit Agreement is hereby amended by the addition thereto, in appropriate
alphabetical order, of the following definitions:

 

“‘Adjusted Fixed
Charge Coverage Ratio’ means, at any
date, the ratio of:

 

(a)           (i) EBITDA of the Credit Parties for the
period of twelve consecutive months ending on or most recently ended prior to
such date, plus

 

(ii) the following add-backs for non-recurring expenses
in the amounts of:

 

(w) for the fiscal quarter ending December 31,
2003, actual expenses incurred by the Borrowers relating to the closing of the
California Molded Fiber Plant and the transfer of equipment therefrom to the
Borrower’s Clinton, Iowa plant in an amount not to exceed, in the aggregate,
the applicable amount specified in Schedule A to the First
Amendment,

 

(x) for the fiscal quarter ending December 31,
2003, capital expenditures at the Borrower’s Clinton, Iowa plant for purposes
of accommodating equipment transferred from the California Molded Fiber Plant
in an amount not to exceed, in the aggregate, the applicable amount specified
in Schedule A to the First Amendment,

 

7

 

(y) for the fiscal quarter ending March 31, 2004,
the amount (not to exceed $250,000 in the aggregate) of (A) miscellaneous
operating expenses actually incurred by the Borrowers to prepare the California
Molded Fiber Plant for subleasing plus (B) capital expenditures at the
Borrower’s Clinton, Iowa plant for purposes of accommodating equipment
transferred from the California Molded Fiber Plant plus (C)
miscellaneous operating expenses actually incurred by the Borrowers relating to
the transfer of equipment from the California Molded Fiber Plant to the
Borrower’s Clinton, Iowa plant, and

 

(z) for each fiscal quarter of fiscal year 2004, and
each quarter thereafter, the amount (not to exceed $42,000 in the aggregate in
any fiscal quarter) of (A) actual lease payments in respect of the California
Molded Fiber Plant during such quarter minus (B) the actual amount of
rental income earned by the Borrowers during such quarter as a result of the
sub-lease of the California Molded Fiber Plant, minus

 

(iii) the aggregate amount of all Non-Financed Capital
Expenditures during such period, minus

 

(iv) the aggregate amount paid, or required to be paid
(without duplication), in cash in respect of the current portion of all income
taxes for such period, minus

 

(v) for each fiscal quarter of fiscal year 2004, and
each quarter thereafter, the amount of (A) actual lease payments in respect of
the California Molded Fiber Plant during such quarter minus (B) the
actual amount of rental income earned by the Borrowers during such quarter as a
result of the sub-lease of the California Molded Fiber Plant, minus

 

(vi) the aggregate amount of dividends and distributions
permitted to be paid under Section 8.6 and actually paid in cash during
such period, to

 

(b)
the sum for the Credit Parties (determined on a consolidated basis without
duplication in accordance with GAAP), of:

 

(i) the aggregate amount of Interest Expense for such
period, plus

 

(ii) the aggregate amount of regularly scheduled
payments of principal in respect of Indebtedness for borrowed money (including
the principal component of any payments in respect of Capital Lease
Obligations) paid or required to be paid during such period.

 

For
purposes of calculating Adjusted Fixed Charge Coverage Ratio, the Credit
Parties shall be permitted to offset (without duplication) the income taxes
described in subsection (a)(iv) above with state or federal income tax
refunds received by the Credit Parties during such period, but only in an
amount less than or equal to the amount described in subsection (a)(iv)
for such period.”

 

8

 

“‘Availability Reserve’
means a reserve against the Borrowing Base, initially in the amount of
$500,000, and thereafter adjusted periodically by the Lender in its reasonable
discretion, based on fixed asset appraisals conducted by the Lender.  In no event shall the Availability Reserve
be less than $500,000 at any time.”

 

(b)           Amendment to Section 2.1 of the
Credit Agreement. 
Section 2.1 of the Credit Agreement is amended by deleting
subsection (b) thereof in its entirety, and replacing it with the
following new subsection (b):

 

“(b)  Funding of Revolving Loans.  The Borrower shall deliver to the Lender on
each Business Day not later than 1:00 p.m., Boston, Massachusetts time, by
facsimile or electronic mail transmission, a Borrowing Base Certificate in
substantially the form of Exhibit B-1 hereto, setting forth the
Borrowing Base as of the close of business on the immediately preceding
Business Day.  So long as no Default or
Event of Default shall have occurred and be continuing or shall result
therefrom, on each Business Day not later than 3:30 p.m. Boston, Massachusetts
time, the Lender shall make a Revolving Loan to the Borrowers in an amount
equal to the amount requested by the Borrowers in the Borrowing Base
Certificate delivered to the Lender that Business Day, by crediting such amount
to one or more accounts of the Borrowers maintained with the Lender; provided
that Revolving Loans made to finance the reimbursement of an LC Disbursement
under any Letter of Credit as provided in Section 2.4(e) shall be remitted
by the Lender to the Issuing Lender.”

 

(c)           Amendment to Section 2.3 of the
Credit Agreement. 
Section 2.3 of the Credit Agreement is amended by the addition
thereto of the following new subsection (h):

 

“(h)         Unavailability of
Eurodollar Loan Option.  During any
period when the Pricing Ratio shall be (or shall be deemed to be pursuant to
the last paragraph of the definition of “Applicable Margin”) less than 0.80 to
1.00, the Borrower shall not be permitted to request any Eurodollar Borrowings
(and any Eurodollar Requests submitted by the Borrowers shall be ineffective),
and all then outstanding Eurodollar Borrowings shall automatically be converted
into Base Rate Borrowings (and the Borrowers shall be liable to the Lender for
any breakage fees due under Section 2.3(g) in connection with such
conversion).”

 

(d)           Amendment to Section 6.2 of the
Credit Agreement. 
Section 6.2 of the Credit Agreement is amended by deleting
subsection (c) thereof in its entirety, and replacing it with the
following new subsection (c):

 

“(c)  Borrowing Base Certificate.  A Designated Financial Officer shall have
executed and delivered to the Lender a Borrowing Base Certificate substantially
in the form of Exhibit B-1 annexed hereto, which Borrowing Base
Certificate shall show Excess Availability as of the close of business on the
immediately preceding Business Day of not less than $1 (after giving effect to
the funding of such requested Loan or the issuance of such requested Letter of
Credit).”

 

9

 

(e)           Amendment to Section 7.1 of the
Credit Agreement. 
Section 7.1 of the Credit Agreement is hereby amended by deleting
subsections (f) and (g) thereof in their entirety, and replacing them with the
following new subsections (f) and (g), respectively:

 

“(f)  as soon as available and in any event no
later than 1:00 p.m. (Boston time) of each Business Day, a Borrowing Base
Certificate in the form attached hereto as Exhibit B-1, with respect to
the Collateral of the Borrowers as of the close of business on the previous
Business Day, together with such other information relating to the Collateral
as the Lender shall reasonably request, and accompanied by such supporting
detail and documentation as the Lender shall reasonably request;

 

(g)  as soon as available and in any event within
twenty (20) days after the end of each month with respect to such month (or
more frequently if requested by the Lender), (i) a Collateral Update
Certificate in the form attached hereto as Exhibit B-2, (ii) an Accounts
Receivable/Loan Reconciliation Report in the form attached hereto as Exhibit
B-3, (iii) a summary of inventory by type and location, (iv) an
accounts receivable aging report, and (v) such other information relating to
the Collateral as the Lender shall reasonably request, in each case,
accompanied by such supporting detail and documentation as the Lender shall
reasonably request;”

 

(f)            Amendment of Exhibits B-1 and B-2 to
the Credit Agreement.  Exhibits
B-1 and B-2 to the Credit Agreement are hereby replaced with the new
forms of Exhibits B-1 and B-2 respectively attached thereto.

 

5.             No Default;
Representations and Warranties, etc.

 

The Borrowers hereby
represent, warrant and confirm that: (a) the representations and warranties of
the Credit Parties contained in Article 5 of the Credit Agreement are true
and correct on and as of the date hereof as if made on such date (except to the
extent that such representations and warranties expressly relate to an earlier
date); (b) after giving effect to this Amendment, the Borrowers are in
compliance with all of the terms and provisions set forth in the Credit
Agreement and the other Loan Documents; (c) after giving effect to this
Amendment, no Default has occurred and is continuing; and (d) the
execution, delivery and performance by the Borrowers of this Amendment (i) have
been duly authorized by all necessary action on the part of the Borrowers, (ii)
will not violate any applicable law or regulation or the organizational
documents of any Borrower, (iii) will not violate or result in a default under
any indenture, agreement or other instrument binding on any Borrower or any of
its assets, and (iv) do not require any consent, waiver or approval of or by
any Person (other than the Lender) which has not been obtained.  The Borrowers further represent, warrant and
confirm that the financial covenant compliance certificate for the fiscal quarter
ending December 31, 2003, which is attached hereto as Schedule A,
contains true and correct entries for the Borrowers’ (x) actual charges and
expenses associated with the closing of the California Molded Fiber Plant and
the transfer of equipment therefrom to the Borrowers’ Iowa plant, and (y)
capital expenditures at the Borrowers’ Iowa plant to accommodate such
equipment, in each case for the fiscal quarter ending December 31, 2003.

 

10

 

6.             Conditions to
Effectiveness.

 

The effectiveness of this
Amendment shall be subject to the satisfaction of the following conditions
precedent:

 

(a)           the Lender shall have
received counterparts of this Amendment duly executed by each of the Borrowers;

 

(b)           the Lender shall have
received a Certificate of the Secretary of each of the Borrowers, certifying
that this Amendment has been duly authorized by the Boards of Directors of such
Borrower;

 

(c)           the Lender shall have
received the Credit Parties’ audited financial statements for the fiscal year
ending December 31, 2003 as required by Section 7.1(a) of the Credit
Agreement, and the same shall not be inconsistent with the information
previously provided to the Lender by the Borrowers; and

 

(d)           the Lender shall have
received: (i) a favorable written opinion (addressed to the Lender and dated as
of the date hereof) of Lynch, Brewer, Hoffman & Fink, LLP, counsel to the
Borrowers, with respect to this Amendment and such other matters as the Lender
may reasonably request.

 

7.             Miscellaneous.

 

(a)           Except as specifically
amended hereby, all of the terms and provisions of the Credit Agreement, the
other Loan Documents and all related documents, shall remain in full force and
effect.

 

(b)           This Amendment may be
executed in any number of counterparts, each of which, when executed and
delivered, shall be an original, but all counterparts shall together constitute
one instrument.  Delivery of an executed
signature page hereto by facsimile transmission shall be effective as delivery
of a manually executed counterpart hereof.

 

(c)           This Amendment shall be
governed by the laws of The Commonwealth of Massachusetts and shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

(d)           The Borrowers shall
reimburse the Lender for all reasonable costs and expenses, including
reasonable legal fees and disbursements, incurred by the Lender in connection
with this Amendment and the transactions contemplated hereby.

 

[Remainder of Page
Left Intentionally Blank]

 

11

 

IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed by their
respective authorized officers as of the day and year first above written.

 

	
   

  	
  BORROWERS

  
	
   

  	
   

  
	
   

  	
  UFP TECHNOLOGIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  MOULDED FIBRE
  TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  SIMCO INDUSTRIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  SIMCO AUTOMOTIVE TRIM,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Ronald J. Lataille

  	
   

  
	
   

  	
  Name:

  	
  Ronald J. Lataille

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDER

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL
  CORPORATION, as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Daniel P. Corcoran

  	
   

  
	
   

  	
  Name:

  	
  Daniel P. Corcoran

  
	
   

  	
  Title:

  	
  Senior Vice PresidentExhibit
10.10

 

AMENDED
AND RESTATED

EMPLOYMENT AGREEMENT

 

This
Employment Agreement (this “Agreement”) is made by and between INVESTools Inc.,
a Delaware corporation (the “Company”), and Lee K. Barba (“Employee”) effective
as of December 6, 2001 (the “Effective Date”).

 

WHEREAS,
the Company is desirous of employing Employee in an executive capacity on the
terms and conditions, and for the consideration, hereinafter set forth for the
period provided herein commencing upon the Effective Date, and Employee is desirous
of employment with the Company on such terms and conditions and for such
consideration.

 

NOW,
THEREFORE, for and in consideration of the mutual promises, covenants and
obligations contained herein, the Company and Employee agree as follows:

 

ARTICLE I

EMPLOYMENT AND DUTIES

 

Section 1.1                                      The
Company agrees to employ Employee and Employee agrees to be employed by the
Company, subject to the terms and conditions of this Agreement, beginning as of
the Effective Date and continuing for the term hereof.

 

Section 1.2                                      From
and after the Effective Date, the Company shall employ Employee in the position
of Executive Vice President of the Company, or in such other positions as the
parties mutually may agree.

 

Section 1.3                                      Employee
agrees to serve in the position referred to in Section 1.2 hereof and to
perform diligently and to the best of his abilities the duties and services
pertaining to such office as set forth in the Bylaws of the Company in effect
on the Effective Date, as well as such additional duties and services
appropriate to such office as the Board of Directors of the Company (the “Board
of Directors”) may reasonably assign to Employee from time to time.

 

Section 1.4                                      Employee
agrees, during the period of his employment by the Company, to devote his full
business time, energy and best efforts to the business and affairs of the
Company and its affiliates and not to engage, directly or indirectly, in any
other business or businesses, whether or not similar to that of the Company,
except with the prior written consent of the Board of Directors. The foregoing
notwithstanding, the parties recognize and agree that Employee may engage in
passive personal investments and charitable or public service activities and
serve on the board of directors of corporations to the extent that such
activities do not conflict with the business and affairs of the Company or
interfere with Employee’s performance of his duties and obligations hereunder.

 

ARTICLE II

TERM AND TERMINATION OF EMPLOYMENT

 

Section 2.1                                      Unless
sooner terminated pursuant to other provisions hereof, the Company agrees to
employ Employee for a three-year period beginning on the Effective Date,

 

 

and thereafter
automatically extend the term of this Agreement for successive one-year periods
unless and until such time as either party shall give written notice to the
other at least 15 days prior to the expiration of the then current term
that no such automatic extension shall occur, in which event Employee’s
employment shall terminate on the expiration of the then current term.

 

Section 2.2                                      Notwithstanding
the provisions of Section 2.1 hereof, the Company shall have the right to
terminate Employee’s employment under this Agreement at any time in accordance
with the following provisions:

 

(a)          upon Employee’s death;

 

(b)         upon Employee’s becoming incapacitated or
disabled by accident, sickness or other circumstance which impairment (despite
reasonable accommodation) renders him mentally or physically incapable of
performing the duties and services required of him hereunder for a period of at
least 120 consecutive days or for a period of 180 business days during any
12-month period;

 

(c)          for cause, which for purposes of this
Agreement shall mean each of the following:

 

(i)                  a material act or material acts of
dishonesty or disloyalty by Employee adversely affecting the Company;

 

(ii)               Employee’s breach of any of his
obligations of this Agreement;

 

(iii)            Employee’s gross negligence or willful
misconduct in performance of the duties and services required of him pursuant
to this Agreement; or

 

(iv)           Employee’s conviction of a felony, or
Employee’s conviction of a misdemeanor involving moral turpitude.

 

(d)         by “Constructive Termination,” which for
purposes of this Agreement shall mean each of the following:

 

(i)                  a material diminution of Employee’s
responsibilities, including, without limitation, title and reporting
relationship;

 

(ii)               relocation of any New York, New York
office of the Company without the consent of Employee; or

 

(iii)            a material reduction in Employee’s
compensation and benefits received hereunder.

 

(e)          in the sole discretion of the Board of
Directors without cause; provided, however, in such case the
Company shall give 15 days prior written notice to Employee of its
intention to terminate Employee’s employment with the Company and shall
continue to provide compensation to Employee in accordance with the terms set
forth in Section 4.1(e) hereof.

 

Section 2.3                                      Employee
shall have the right to terminate his employment under this

 

 

Agreement at
any time in accordance with the following provisions:

 

(a)          a breach by the Company of any of its
obligations under this Agreement which, if correctable, remains uncorrected for
30 days following written notice specifying such breach given by Employee
to the Company; or

 

(b)         in the sole discretion of Employee, provided,
however, in such case Employee shall give 15 days prior written
notice to the Company of his intention to terminate his employment with the
Company.

 

Section 2.4                                      If
the Company desires to terminate Employee’s employment hereunder as provided in
Section 2.2 hereof or Employee desires to terminate Employee’s employment
hereunder as provided in Section 2.3 hereof, it or he shall do so by
giving written notice to the other party that it or he has elected to terminate
Employee’s employment hereunder and stating the effective date and reason, if
any, for such termination. In the event of such termination, the provisions of
Articles IV through IX hereof shall continue to apply in accordance with their
terms. Any question as to whether and when there has been a termination of
Employee’s employment, and the cause of such termination, shall be determined
by the Board of Directors in its sole discretion.

 

ARTICLE III

COMPENSATION AND BENEFITS

 

Section 3.1                                      Compensation.  During the term of this Agreement, the Company shall provide
compensation to Employee in the following forms:

 

(a)          Base Salary.  Employee shall receive an annual base salary of $350,000, which
amount shall be subject to annual review by the Board of Directors and/or the
Compensation Committee of the Company for possible increases.

 

(b)         Bonus.

 

(i)                  Employee shall participate in, and
receive an annual bonus pursuant to, the Company’s Executive Committee Annual
Bonus Plan.

 

(ii)               Employee shall participate in, and receive
an annual bonus pursuant to, the Company’s Management Incentive Bonus Plan.

 

(c)          Stock Options.

 

(i)                  Upon approval of the Company’s Board
of Directors, Employee will be granted options to purchase an aggregate of
1,200,000 shares of the Company’s common stock at an exercise price equal to
the per share Fair Market Value (as hereinafter defined) on the date of
grant.  The options will be granted
pursuant to a stock option agreement(s) to be executed by Employee and the
Company as of the date hereof, which stock option agreement(s) will provide,
among other things, that (A) not more than $100,000 worth of the options
granted to Employee (valued at Fair Market Value on the date of grant) first
exercisable in any calendar year will

 

 

be treated as incentive stock options and the excess, if any, will be
treated as non-qualified options and (B) the options will vest in four equal
annual installments beginning one year from the date of this Agreement; provided,  however,
that all options granted to Employee hereunder shall vest immediately upon a
Change of Control (as hereinafter defined).

 

“Fair
Market Value” means (i) if the Company’s common stock is not listed or admitted
to trade on a national securities exchange and if bid and ask prices for the
common stock are not furnished through NASDAQ or a similar organization, the
value established by the Compensation Committee of the Board of Directors (the
“Compensation Committee”), in its sole discretion; (ii) if the Company’s common
stock is listed or admitted to trade on a national securities exchange or a
national market system, the closing price of the common stock, as published in
the Wall Street Journal, so
listed or admitted to trade on such day or, if there is no trading of the
common stock on such date, then the closing price of the common stock on the
next preceding date on which there was trading in such shares; or (iii) if the
common stock is not listed or admitted to trade on a national securities
exchange or a national market system, the mean between the bid and asked price
for the common stock on such date, as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or a similar organization if NASDAQ is
no longer reporting such information.

 

(ii)               In addition, Employee shall be eligible
to receive future stock option grants, as determined by the Compensation
Committee.

 

Section 3.2                                      Benefits. 
During the term of this Agreement, Employee shall be afforded the
following benefits as incidences of his employment:

 

(a)          Business and Entertainment Expenses.  Subject to the Company’s standard policies
and procedures with respect to expense reimbursement as applied to its
executive employees generally, the Company will reimburse Employee for, or pay
on behalf of Employee, reasonable and appropriate expenses incurred by Employee
for business related purposes, including dues and fees to approved industry and
professional organizations, and reasonable costs of entertainment incurred in
connection with business development.

 

(b)         Club Membership.  The Company shall reimburse Employee for membership dues at
social or country clubs designated by Employee as mutually agreed by the
Company and Employee.

 

(c)          Other. 
Employee and, to the extent applicable, Employee’s family, dependents
and beneficiaries, shall be allowed to participate in all benefits, plans and
programs, including improvements or modifications of the same, which are now,
or may hereafter be, available to executive employees of the Company generally.
Such benefits, plans and programs may include, without limitation, a profit
sharing plan, a thrift plan, a health insurance or health care plan, life
insurance, disability insurance or a pension plan. The Company shall not,
however, by reason of this paragraph be obligated to institute, maintain, or
refrain from changing, amending or discontinuing,

 

 

any such benefit plan or program, so long as such changes are similarly
applicable to executive employees of the Company generally.

 

Section 3.3                                      Payroll. 
Employee shall receive all compensation pursuant to this Agreement in
accordance with the Company’s Houston, Texas customary payroll practices with
respect to time and manner of payment.

 

ARTICLE IV

EFFECT OF TERMINATION ON COMPENSATION

 

Section 4.1                                      By
the Company.

 

(a)          Termination Upon Death.  In the event of Employee’s death during the
term of this Agreement, this Agreement will terminate upon the first day of the
month following the Employee’s date of death, and all of Employee’s rights and
benefits provided for in this Agreement will terminate as of such date; provided,
however, that Employee’s estate will be paid Employee’s annual
salary and pro rata bonus through the date of death for a period of six months
after such death occurs and, provided, further, all stock options
referenced in Section 3.1(c) shall vest on Employee’s death, and
Employee’s estate may exercise such options for a period of one year from the
date of termination.

 

(b)         Termination Upon Disability.  If Employee’s employment hereunder is
terminated by the Company pursuant to Section 2.2(b) hereof prior to the
expiration of the then current term, all of Employee’s rights and benefits
provided for in this Agreement will terminate as of such date; provided,
however, that Employee will be paid Employee’s annual salary and pro
rata bonus through the date of termination for a period of six months after
such termination occurs and, provided, further, all stock options
referenced in Section 3.1(c) shall vest effective as of the termination
date, and Employee may exercise such options for a period of one year from the
date of termination.

 

(c)          Termination for Cause.  Employer shall be entitled to terminate
Employee’s employment at any time for cause, as defined by Section 2.2(c).
In the event of termination for cause, all of Employee’s rights and benefits
provided for in this Agreement shall terminate, except as to any accrued and
unpaid base salary provided for in Section 3.1(a).

 

(d)         Termination After Change of Control.  If, within 24 months following a Change
of Control (as hereinafter defined), the Company or its successor terminates
Employee’s employment without cause or by Constructive Termination, Employee
shall receive $637,500 per year for a period of two years.  All unvested stock options referenced in
Section 3.1(c) shall vest effective as of the date of termination and
Employee may exercise such options for a period of 90 days from the date
of termination. Employee shall receive his accrued and unpaid salary and any
accrued and unpaid pro rata bonus through the date of termination, and Employee
will continue to participate in any

 

 

benefits referenced in Section 3.2(c) for a period of two years
from the date of termination; provided, however, to the extent that any
benefit under Section 3.2(c) cannot be continued during a period when
Employee is not an employee of the Company, the Company shall pay Employee an
amount in cash equal to the economic value of such benefit, such value to be
determined as of the time of termination.

 

In the event that Employee is deemed to have received
an excess parachute payment (as such term is defined in Section 280G(b) of
the Internal Revenue Code of 1986, as amended (the “Code”)) which is subject to
excise taxes (“Excise Taxes”) imposed by Section 4999 of the Code with
respect to compensation paid to Employee pursuant to this Agreement, the
Company shall make a Bonus Payment (as defined below) to Employee when Employee
receives any excess parachute payments. 
“Bonus Payment” means a cash payment equal to the sum of (i) all
Excise Taxes payable by Employee plus (ii) any additional Excise Tax or
federal or state income taxes imposed with respect to the Bonus Payment.

 

“Change of Control” means the happening of any of the
following events:

 

(i)                  The acquisition by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”),
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 50% or more of either (A) the then outstanding
shares of common stock of the Company or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors; provided, however, that the following
acquisitions shall not constitute a Change of Control under this subsection
(i): (x) any acquisition directly from the Company (excluding an
acquisition by virtue of the exercise of a conversion privilege), (y) any
acquisition by the Company, or (z) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; or

 

(ii)               Individuals who, as of the effective
date hereof, constitute the Board of Directors (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the effective
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or

 

(iii)            Approval by the stockholders of the Company
of a complete liquidation or dissolution of the Company or the sale or other
disposition of all or substantially

 

 

all of the assets of the Company.

 

(e)          Other Events Upon Termination.  If Employee’s employment hereunder shall be
terminated by the Company without cause or by Constructive Termination other
than within 24 months following a Change of Control, Employee shall
receive in accordance with the Company’s then current payroll practices an
amount equal to the sum of (i) Employee’s annual base salary for the year
in which such termination occurs and (ii) the greater of (A) the
target bonuses for each of the four quarters in the year in which such
termination occurs and (B) the actual bonus earned by Employee for the
four fiscal quarters immediately preceding such termination, payable for a
period of time equal to the longer of (i) two years and (ii) the
period of time remaining under the then current term of this Agreement (such
longer period, the “Severance Period”). Employee shall receive his accrued and
unpaid salary and any accrued and unpaid pro rata bonus through the date of
termination, and Employee will continue to participate in any benefits
referenced in Section 3.2(c) for the Severance Period; provided,
however, to the extent that any benefit under Section 3.2(c)
cannot be continued during a period when Employee is not an employee of the
Company, the Company shall pay Employee an amount in cash equal to the economic
value of such benefit, such value to be determined as of the time of
termination. In addition, all stock options referenced in Section 3.1(c)
shall vest effective as of the date of termination, and Employee may exercise
such options for a period of three months from the date of termination.

 

Section 4.2                                      Section 4.2  By Employee.

 

(a)          Breach of Agreement by Company.  If Employee’s employment hereunder shall be
terminated by Employee pursuant to the provisions set forth in
Section 2.3(a) hereof prior to the expiration of the then current term of
this Agreement, Employee shall receive in accordance with the Company’s then
current payroll practices an amount equal to the sum of (i) Employee’s
annual base salary for the year in which such termination occurs and (ii) the
greater of (A) the target bonuses for each of the four quarters in the
year in which such termination occurs and (B) the actual bonus earned by
Employee for the four fiscal quarters immediately preceding such termination,
payable for a period of time equal to the longer of (i) two years and
(ii) the period of time remaining under the then current term of this
Agreement. Employee shall receive his accrued and unpaid salary and any accrued
and unpaid pro rata bonus through the date of termination, and Employee will
continue to participate in any benefits referenced in Section 3.2(c) for
the Severance Period; provided, however, to the extent that any
benefit under Section 3.2(c) cannot be continued during a period when
Employee is not an employee of the Company, the Company shall pay Employee an
amount in cash equal to the economic value of such benefit, such value to be
determined as of the time of termination. In addition, all stock options
referenced in Section 3.1(c) shall vest effective as of the date of
termination, and Employee may exercise such options for a period of three
months from the date of termination.

 

(b)         Voluntary Resignation.  If Employee’s employment hereunder shall be
terminated by

 

 

Employee pursuant to the provisions set forth in Section 2.3(b)
hereof prior to the expiration of the then current term, then, upon such
termination, subject to COBRA, all compensation and all benefits to Employee
hereunder shall terminate contemporaneously with the termination of such
employment; provided,
however, Employee shall not receive a bonus for the year during
which Employee’s employment terminated or any subsequent year.

 

ARTICLE V

CONFIDENTIAL INFORMATION

 

Section 5.1                                      Company Information.  Employee acknowledges that the Company’s
business is highly competitive and that the Company’s books, records and
documents, technical information concerning its products, equipment, services
and processes, procurement procedures and pricing techniques and the names of
and other information (e.g., credit and financial data) concerning the
Company’s customers and business associates all comprise confidential business
information and trade secrets of the Company (collectively, “Confidential
Information”) which are valuable,
special, and unique assets of the Company which the Company uses in its
business to obtain a competitive advantage over the Company’s competitors which
do not know or use this information. Employee further acknowledges that
protection of the Confidential Information against unauthorized disclosure and
use is of critical importance to the Company in maintaining its competitive
position. Accordingly, Employee hereby agrees that he will not, at any time
during or after his employment by the Company, make any unauthorized disclosure
of any Confidential Information or make any use thereof, except for the benefit
of, and on behalf of, the Company. For the purposes of this Article 5, the
term “Company” shall also include affiliates of the Company.

 

Section 5.2                                      Third Party Information.  Employee acknowledges that, as a result of
his employment by the Company, he may from time to time have access to, or
knowledge of, confidential business information or trade secrets of third
parties, such as customers, suppliers, partners, joint venturers, and the like,
of the Company. Employee agrees to preserve and protect the confidentiality of
such third-party confidential information and trade secrets to the same extent,
and on the same basis, as the Confidential Information.

 

Section 5.3                                      Return of Documents.  All written materials, records and other
documents made by, or coming into the possession of, Employee during the period
of his employment by the Company which contain or disclose the Confidential
Information shall be and remain the property of the Company. Upon request, and
in any event upon termination of Employee’s employment by the Company, for any
reason, he promptly shall deliver the same, and all copies, derivatives and
extracts thereof, to the Company.

 

ARTICLE VI

INVENTIONS, DISCOVERIES AND COPYRIGHTS

 

Section 6.1                                      Inventions and Discoveries.  Employee agrees promptly and freely to
disclose to the Company, in writing, any and all ideas, conceptions,
inventions, improvements, and discoveries, whether patentable or not, which are
conceived or made by Employee, solely or

 

 

jointly with
another, during the period of his employment by the Company and which are
related to the business or activities of the Company. Employee agrees to assign
and hereby does assign to the Company all his interest in such ideas, conceptions,
inventions, improvements, and discoveries. Employee agrees that, whenever
requested to do so by the Company, he shall assist in the preparation of any
document that the Company shall deem necessary and shall execute any and all
applications, assignments or other instruments that the Company shall deem
necessary, in its sole discretion, to apply for and obtain protection,
including patent protection, for such ideas, conceptions, inventions,
improvements and discoveries in all countries of the world. The obligations in
the preceding sentence shall continue beyond the termination of Employee’s
employment regardless of the reason for such termination.

 

Section 6.2                                      Copyrights.  If during Employee’s employment by the Company, Employee creates
any original work of authorship (each, a “Work”) fixed in any tangible medium
of expression which is the subject matter of copyright (e.g.,
written presentations, computer programs, videotapes, drawings, maps, models,
manuals or brochures) relating to the Company’s business, products, or
services, whether a Work is created solely by Employee or jointly with others,
the Company shall be deemed the author of a Work if the Work is prepared by
Employee in the scope of his employment; or, if the Work is not prepared by Employee
within the scope of his employment but is specially ordered by the Company as a
contribution to a collective work, as a part of a motion picture or other
audiovisual work, as a translation, as a supplementary work, as a compilation
or as an instructional text, then the Work shall be considered to be a work
made for hire and the Company shall be the author of the Work. In the event a
Work is not prepared by Employee within the scope of his employment or is not a
Work specially ordered and deemed to be a work made for hire, then Employee
hereby agrees to assign, and by these presents, does assign, to the Company all
of Employee’s worldwide right, title and interest in and to such Work and all
rights of copyright therein. Both during the period of Employee’s employment by
the Company and thereafter, Employee agrees to assist the Company and its
nominee, at any time, in the protection of the Company’s worldwide right, title
and interest in and to the work and all rights of copyright therein, including but
not limited to, the execution of all formal assignment documents requested by
the Company or its nominee and the execution of all lawful oaths and
applications for registration of copyright in the United States and foreign
countries.

 

Section 6.3                                      Employee
represents that he has not heretofore made any invention or discovery or
prepared any work which is the subject matter of copyright related to the
Company’s business which he wishes to exclude from the provisions of
Section 6.1 and Section 6.2 hereof. As used in this Article VI,
the “Company” shall include affiliates of the Company.

 

ARTICLE VII

NON-COMPETITION

 

Section 7.1                                      The
restrictive covenants contained in this Article VII and in
Article VIII hereof are supported by consideration to Employee hereunder.
As a material incentive for the Company to enter into this Agreement, Employee
hereby agrees that he will not at any time during his employment by the Company
and for a period commencing on the date of termination

 

 

of his
employment and continuing until the expiration of 24 months (the
“Non-Competition Period”),
directly or indirectly, for himself or for others, in any state of the United
States, or in any foreign country where the Company or any of its affiliates is
then conducting any business:

 

(a)          engage in any business that is directly
competitive with activities conducted by the Company (or any of the Company’s
subsidiaries or divisions), which activities conducted by the Company (or any
of the Company’s subsidiaries or divisions) represent in the aggregate greater
than 25% of the Company’s proforma consolidated revenues in 2001;

 

(b)         render advice or services to, or otherwise
assist, any other person or entity who is engaged, directly or indirectly, in
any business that is directly competitive with activities conducted by the
Company (or any of the Company’s subsidiaries or divisions), which activities
conducted by the Company (or any of the Company’s subsidiaries or divisions)
represent in the aggregate greater than 25% of the Company’s proforma
consolidated revenues in 2001; or

 

(c)          transact any business in any manner
pertaining to suppliers or customers of the Company or any affiliate which, in
any manner, would have, or is likely to have, an adverse effect upon the
Company or any affiliate.

 

The
foregoing shall not prohibit Employee’s continued participation in those
activities in which he is engaged on the date hereof and which have been
disclosed to the Company.

 

Notwithstanding
the foregoing, in the event of termination of this Agreement pursuant to
Section 4.1(d), 4.1(e) or 4.2(a), the prohibitions of this
Article VII shall no longer apply at such time as Employee waives his
right to receive any further payments under Section 4.1(d), 4.1(e) or
4.2(a), as the case may be.

 

Section 7.2                                      Employee
understands that the foregoing restrictions may limit his ability to engage in
a business similar to the Company’s business in specific areas of the world for
the Non-Competition Period, but acknowledges that he will receive sufficiently
high remuneration and other benefits from the Company hereunder to justify such
restriction. In addition to any remedies provided under applicable law, the
Company and Employee agree that during the period the Company is paying
compensation and benefits to Employee pursuant to Articles III or IV hereof,
the Company’s remedy for breach of the provisions of this Article VII
shall include, but shall not be limited to, the termination of all compensation
and all benefits to Employee otherwise provided under this Agreement.

 

Section 7.3                                      It
is expressly understood and agreed that the Company and Employee consider the
restrictions contained in Section 7.1 hereof to be reasonable and
necessary for the purposes of preserving and protecting the good will and
proprietary information of the Company, nevertheless, if any of the aforesaid
restrictions is found by a court having jurisdiction to be unreasonable, over
broad as to geographic area or time or otherwise unenforceable, the parties
intend for the restrictions therein set forth to be modified by such court so
as to be reasonable and enforceable and, as so modified by the court, to be
fully enforced.

 

 

ARTICLE VIII

SOLICITATION OF EMPLOYEES

 

During
the term of his employment by the Company and thereafter for the
Non-Competition Period, Employee shall not, on his own behalf or on behalf of
any other person, partnership, entity, association, or corporation, hire or
seek to hire any non-clerical or non-secretarial employee of the Company or in
any other manner attempt directly or indirectly to influence, induce, or
encourage any non-clerical or non-secretarial employee of the Company to leave
the employment of the Company, nor shall he use or disclose to any person,
partnership, entity, association, or corporation any information concerning the
names, addresses or personal telephone numbers of any employees of the Company.

 

ARTICLE IX

MISCELLANEOUS

 

Section 9.1                                      Notices.  For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

 

	
  If to the Company to:

  	
  INVESTools
  Inc.

  5959 Corporate Drive, Suite 2000

  Houston, TX 77036

  Attention: Chairman of the Compensation
  Committee

  
	
   

  	
   

  
	
  If to Employee to:

  	
  Lee
  K. Barba

  P.O. Box 587

  Bangall, New York 12506

  

 

or
to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.

 

Section 9.2                                      Applicable Law, Jurisdiction and Venue.  This Agreement is entered into under, and
shall be governed for all purposes by, the laws of the State of Texas. Any suit
by the Company to enforce any right hereunder or to obtain a declaration of any
right or obligation hereunder may, at the sole option of the Company, be
brought (i) in any court of competent jurisdiction in the State of Texas
or (ii) in any court of competent jurisdiction where jurisdiction may be
had over Employee. Employee hereby expressly consents to the jurisdiction of
the foregoing courts for such purposes and to the appointment of the Secretary
of State for the State of Texas as his agent for service of process.

 

Section 9.3                                      No Waiver.  No failure by either party hereto at any time to give notice of
any breach by the other party of, or to require compliance with, any condition
or provision of this Agreement shall (i) be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time or (ii) preclude insistence upon strict compliance in the future.

 

 

Section 9.4                                      Severability.  If a court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then the invalidity or
unenforceability of that provision shall not affect the validity or
enforceability of any other provision of this Agreement, and all other
provisions shall remain in full force and effect.

 

Section 9.5                                      Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which together will
constitute one and the same Agreement.

 

Section 9.6                                      Withholding of Taxes.  The Company may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as may be
required pursuant to any law or governmental regulation or ruling.

 

Section 9.7                                      Headings. 
The paragraph headings have been inserted for purposes of convenience
and shall not be used for interpretive purposes.

 

Section 9.8                                      Affiliate.  As used in this Agreement, “affiliate” shall mean any person or
entity which directly or indirectly through one or more intermediaries owns or
controls, is owned or controlled by, or is under common ownership or control
with, the Company.

 

Section 9.9                                      Assignment.  This Agreement, and the rights and obligations of the parties
hereunder, are personal and neither this Agreement, nor any right, benefit or
obligation of either party hereto, shall be subject to voluntary or involuntary
assignment, alienation or transfer, whether by operation of law or otherwise,
without the prior written consent of the other party except that vested rights
to payment shall be subject to devise, and shall descend in accordance with
applicable laws of inheritance.

 

Section 9.10                                Legal Fees.  If, prior to a Change of Control, either party institutes any
legal action to enforce his or its rights under, or to recover damages for
breach of this Agreement, the Company shall pay up to an aggregate of $10,000
of Employee’s actual expenses incurred in pursuit or defense of such legal
action.

 

If,
following a Change of Control, either party institutes any legal action to
enforce his or its rights under, or to recover damages for breach of this
Agreement, the “prevailing party” in such action shall be entitled to recover
from the other party any actual expenses for attorney’s fees and disbursements
incurred by him or it. For these purposes, a party shall be considered a “prevailing
party” if and only if the parties agree to such characterization of a party as
a “prevailing party” or a final order of a court specifically recites that such
party is a “prevailing party.”

 

Section 9.11                                Term. 
This Agreement has a term co-extensive with the term of employment as
defined in Section 2.1 hereof. Termination of this Agreement pursuant to
the provisions of Section 2.1 hereof shall not affect any right or
obligation of either party hereto which is accrued or vested prior to or upon
such termination or the rights and set forth in Articles IV, V, VI and VII
hereof.

 

Section 9.12                                Entire Agreement.  This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises,

 

 

representations,
warranties and agreements between the parties with respect to employment of
Employee by the Company. Each party to this Agreement acknowledges that no
representation, inducement, promise or agreement, oral or written, has been made
by either party, or by anyone acting on behalf of either party, which is not
embodied herein, and that no agreement, statement, or promise relating to the
employment of Employee by the Company, which is not contained in this
Agreement, shall be valid or binding. Any modification of this Agreement will
be effective only if it is in writing and signed by the party to be charged.

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the Effective Date.

 

	
   

  	
  INVESTools
  Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Paul A. Helbling

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:  Paul A. Helbling

  
	
   

  	
   

  
	
   

  	
  Title:  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Lee K. Barba

  	
   

  
	
   

  	
  Lee
  K. Barba

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