SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT
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SIXTH
AMENDMENT
TO
SECOND
AMENDED AND RESTATED REVOLVING CREDIT
AND
SECURITY AGREEMENT
THIS
SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY
AGREEMENT (this “Amendment”) is
entered into as of February 11, 2009, by and among GEOKINETICS INC., a Delaware
corporation (“Geokinetics”),
GEOKINETICS PROCESSING, INC. (formerly known as GEOPHYSICAL DEVELOPMENT
CORPORATION), a Texas corporation (“Processing”),
GEOKINETICS USA, INC. (formerly known as QUANTUM GEOPHYSICAL, INC.), a Texas
corporation (“USA”), GEOKINETICS
EXPLORATION INC., an entity organized under the laws of Canada (“Exploration”),
GEOKINETICS INTERNATIONAL HOLDINGS, INC. (formerly known as GRANT GEOPHYSICAL,
INC.), a Delaware corporation (“International
Holdings”), GEOKINETICS INTERNATIONAL, INC. (formerly known as GRANT
GEOPHYSICAL (INT’L), INC.), a Texas corporation (“International”),
GEOKINETICS MANAGEMENT, INC. (formerly known as GRANT GEOPHYSICAL CORP.), a
Texas corporation (“Management”),
GEOKINETICS SERVICES CORP., a Texas corporation (“Geokinetics
Services”), and ADVANCED SEISMIC TECHNOLOGY, INC., a Texas corporation
(“Advanced
Seismic”, and together with Geokinetics, Processing, USA, Exploration,
International Holdings, International, Management and Geokinetics Services, each
a “Borrower”
and collectively, the “Borrowers”), PNC
BANK, NATIONAL ASSOCIATION (“PNC”), the various
financial institutions named therein or which hereafter become a party thereto,
(together with PNC, collectively, “Lenders”) and PNC, as
agent for the Lenders (in such capacity, “Agent”).
BACKGROUND
WHEREAS,
Borrowers, Agent and Lenders are parties to a Second Amended and Restated
Revolving Credit and Security Agreement, dated as of May 25, 2007 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Loan
Agreement”), pursuant to which Agent and Lenders provide Borrowers with
certain financial accommodations.
WHEREAS,
Borrowers have requested that the Lenders amend the Loan Agreement as provided
herein, subject to the terms and conditions set forth herein;
WHEREAS,
subject to the satisfaction of the conditions set forth herein, Agent and the
Lenders are willing to amend the Loan Agreement as provided
herein;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized
terms not otherwise defined herein shall have the meanings given to them in the
Loan Agreement.
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2. Amendments
to Section 1.2. Effective as of
the date hereof, the following definitions set forth in Section 1.2 of
the Loan Agreement are hereby amended and restated in their entirety to read as
follows:
“ ‘Alternate Base Rate’
shall mean, for any day, a rate per annum equal to the highest of (i) the
Base Rate in effect on such day and (ii) the Federal Funds Open Rate in
effect on such day plus 1/2 of 1% and (iii) the Daily LIBOR Rate plus one
percent (1%).
For the
purposes of this definition, “Daily LIBOR Rate”
shall mean, for any day, the rate per annum determined by the Agent by dividing
(x) the Published Rate by (y) a number equal to 1.00 minus the percentage
prescribed by the Federal Reserve for determining the maximum reserve
requirements with respect to any eurocurrency funding by banks on such
day. “Published Rate” shall
mean the rate of interest published each Business Day in The Wall Street Journal
“Money Rates” listing under the caption “London Interbank Offered Rates” for a
one month period (or, if no such rate is published therein for any reason, then
the Published Rate shall be the eurodollar rate for a one-month period as
published in another publication determined by the Agent).”
“ ‘Senior Debt Payments”
shall mean and include all cash actually expended by any Borrower to make
(a) interest payments on any Advances hereunder, plus (b) payments for
all fees, commissions and charges set forth herein and with respect to any
Advances, plus (c) capitalized lease payments, plus (d) payments with
respect to any other Indebtedness for borrowed money.”
“ ‘Undrawn
Availability Event” shall mean such time as
Undrawn Availability falls below $7,000,000 at any reporting date under
this Agreement.”
3. Amendment
to Section 2.1. Effective as of
the date hereof, Section 2.1(a)(iii)
of the Loan Agreement is hereby amended and restated in its entirety to read as
follows:
“(iii) up
to the amount equal to the lesser of:
(A) 80%
of the Net Orderly Liquidation Value of Eligible Equipment that has been
appraised pursuant to the most recent appraisal (whether initiated by Agent or
requested by Borrowers pursuant to Section 9.19) acceptable to Agent (less any
Eligible Equipment that has been sold), or
(B) (I)
$55,000,000 minus (II) the amount equal to $916,667 multiplied by the number of
calendar months ended, beginning June 30, 2009, (the “Equipment Cap Reduction”)
(the remainder of (I) minus (II), the “Equipment Advance Rate” and together with
the Domestic Advance Rate and the Foreign Advance Rate, the “Advance Rates”),
minus”
4. Amendment
to Section 7.5. Effective as of the date hereof, Section 7.5 of the
Loan Agreement is hereby amended and restated in its entirety to read as
follows:
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“7.5.
Loans.
Make advances, loans or extensions of credit to any Person, including any
Parent, Subsidiary or Affiliate except with respect to (a) the extension of
commercial trade credit in connection with the sale of Inventory or services in
the Ordinary Course of Business (b) loans to its employees in the Ordinary
Course of Business not to exceed the aggregate amount of $100,000 at any time
outstanding, (c) loans to other Borrowers provided that (1)
such loans shall be evidenced by a demand note (collectively, the “Intercompany Notes”),
which Intercompany Notes shall be in form and substance reasonably satisfactory
to Agent and shall be pledged and delivered to Agent pursuant to the applicable
Pledge Agreement as additional collateral security for the Obligations;
(2) Borrowers shall record all intercompany transactions on their Books and
Records in a manner reasonably satisfactory to Agent; (3) the obligations of any
Borrower under any such Intercompany Notes shall be subordinated to the
Obligations of Borrowers hereunder in a manner reasonably satisfactory to Agent;
(4) at the time any such intercompany loan or advance is made by a Borrower to
any other Borrower and after giving effect thereto, such Borrowers shall be
solvent and (5) no Default or Event of Default would occur and be continuing
after giving effect to any such proposed intercompany loan and (d) loans to
Foreign Subsidiaries provided that (1)
such loans shall be evidenced by Intercompany Notes, which
Intercompany Notes shall be in form and substance reasonably satisfactory to
Agent and shall be pledged and delivered to Agent pursuant to the applicable
Pledge Agreement as additional collateral security for the Obligations;
(2) Borrowers shall record all intercompany transactions on their Books and
Records in a manner reasonably satisfactory to Agent; (3) the obligations of any
Borrower under any such Intercompany Notes shall be subordinated to the
Obligations of Borrowers hereunder in a manner reasonably satisfactory to Agent;
(4) at the time any such intercompany loan or advance is made by a Borrower to
any Foreign Subsidiary and after giving effect thereto, such Borrowers shall be
solvent; (5) no Default or Event of Default would occur and be continuing after
giving effect to any such proposed intercompany loan; and (6) no Undrawn
Availability Event has occurred or would result from such proposed intercompany
loan; provided,
further, however, if an
Undrawn Availability Event has occurred, Agent, in its sole discretion, may
permit Borrowers to make loans to Foreign Subsidiaries pursuant to subclause (d)
of this Section 7.5 provided that (x)
after giving effect to any such loan, net advances to Foreign Subsidiaries are
positive (i.e., the total amount of all advances made by Borrowers to Foreign
Subsidiaries is less than the amount of funds paid or transferred by Foreign
Subsidiaries to Borrowers) and (y) Agent has received from Borrowers a cash flow
forecast in form and substance satisfactory to Agent in its sole discretion and
Agent has notified Borrowers after reviewing such cash flow forecast that
Borrowers may make such loans to Foreign
Subsidiaries. Notwithstanding the foregoing, with respect to
intercompany loans made to Foreign Subsidiaries pursuant to clause (d) of this
Section 7.5 that are existing on the Fourth Amendment Effective Date, the
Intercompany Notes evidencing such intercompany loans shall not be required to
be delivered to Agent until the earlier of (x) the date upon which any such
Intercompany Notes are executed or (y) the 90th day following the Fourth
Amendment Effective Date unless such 90 day period is extended by the Agent in
its sole discretion.
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5. Amendment
to Section 7.7. Effective as of the date hereof, Section 7.7 of the
Loan Agreement is hereby amended by replacing “$6,000,000” with “$7,000,000” in
such section.
6. Amendment
to Section 7.17. Effective as of
the date hereof, Section 7.17 of the
Loan Agreement is hereby amended by replacing “$6,000,000” with “$7,000,000” in
such section.
7. Amendment
to Section 9.10. Effective as of
the date hereof, Section 9.10 of the
Loan Agreement is hereby amended and restated in its entirety to read as
follows:
“
9.10. Borrowing
Base Certificate.
Deliver to Agent on or before the last Business Day of (i) each month,
calculated as of the last day of the prior month, a Borrowing Base
Certificate in form and substance satisfactory to Agent (which shall not be
binding upon Agent or restrictive of Agent’s rights under this Agreement),
including reporting of sales, collection, credits, Equipment purchases
(including invoices for such Equipment) based on hard costs, Equipment sales
(including a reference to the appraised Net Orderly Liquidation Value and sales
price), the Cash Balance (as evidenced by documentation satisfactory to Agent in
its sole discretion for such prior month), a calculation of Undrawn Availability
and information under Section 9.2 requested by Agent and (ii) each week, if
an Undrawn Availability Event has occurred, a Borrowing Base
Certificate in form and substance satisfactory to Agent (which shall not be
binding upon Agent or restrictive of Agent’s rights under this Agreement),
including reporting of sales, collection, credits, Equipment purchases
(including invoices for such Equipment) based on hard costs, Equipment sales
(including a reference to the appraised Net Orderly Liquidation Value and sales
price) and information under Section 9.2 requested by Agent.”
8. Conditions
of Effectiveness of Amendment. The effectiveness
of this Amendment is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by the Agent:
(a) The Agent
shall have received the following documents or items, each in form and substance
satisfactory to the Agent and its legal counsel:
(1) this
Amendment, duly executed by each Borrower; and
(2) all other
documents Agent may reasonably request with respect to any matter relevant to
this Amendment or the transactions contemplated hereby.
(b) The
representations and warranties contained herein and in the Loan Agreement and
the Other Documents, as each is amended hereby, shall be true and correct in all
material respects as of the date hereof, as if made on the date
hereof;
(c) Each
document (including any Uniform Commercial Code financing statement) required by
the Loan Agreement, any related agreement or under law or reasonably requested
by the Agent to be filed, registered or recorded in order to create, in favor of
Agent, a perfected security interest in or lien upon the Collateral shall have
been properly filed, registered or recorded in each jurisdiction in which the
filing, registration or recordation thereof is so required or
requested, and Agent shall have received an acknowledgment copy, or other
evidence satisfactory to it, of each such filing, registration or recordation
and satisfactory evidence of the payment of any necessary fee, tax or expense
relating thereto;
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(d) No
Default or Event of Default shall have occurred and be continuing or shall be in
existence after giving effect to this Amendment;
(e) All fees
and expenses due and owing by Borrowers to Agent shall have been paid in full;
and
(f) All
corporate proceedings taken in connection with the transactions contemplated by
this Amendment and all documents, instruments and other legal matters incident
thereto shall be satisfactory to the Agent and its legal counsel.
9. No
Consent. Nothing
contained herein shall be construed as a waiver by Agent or Lenders of any
covenant or provision of the Loan Agreement, the Other Documents, this
Amendment, or of any other contract or instrument between the Borrowers, Lenders
and Agent, and the failure of Agent or Lenders at any time or times hereafter to
require strict performance by the Borrowers of any provision thereof shall not
waive, affect or diminish any right of Agent or Lenders to thereafter demand
strict compliance therewith. Agent and Lenders hereby reserve all
rights granted under the Loan Agreement, the Other Documents, this Amendment and
any other contract or instrument among the Borrowers, Lenders and
Agent.
10. Representations
and Warranties. Each Borrower
hereby represents and warrants to Agent and Lenders as of the date of this
Amendment as follows: (A) it is duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
organization; (B) the execution, delivery and performance by it of this
Amendment, the Loan Agreement and all Other Documents executed and/or delivered
in connection herewith are within its powers, have been duly authorized, and do
not contravene (i) its articles of organization, operating agreement, or
other organizational documents, or (ii) any applicable law; (C) no
consent, license, permit, approval or authorization of, or registration, filing
or declaration with any Governmental Body or other Person, is required in
connection with the execution, delivery, performance, validity or enforceability
of this Amendment, the Loan Agreement or any of the Other Documents executed
and/or delivered in connection herewith by or against it; (D) this
Amendment, the Loan Agreement and all Other Documents executed and/or delivered
in connection herewith have been duly executed and delivered by it;
(E) this Amendment, the Loan Agreement and all Other Documents executed
and/or delivered in connection herewith constitute its legal, valid and binding
obligation enforceable against it in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally or by general principles of equity; (F) after
giving effect to this Amendment, it is not in default under the Loan Agreement
or any of the Other Documents and no Default or Event of Default exists, has
occurred and is continuing or would result by the execution, delivery or
performance of this Amendment; and (G) the representations and warranties
contained in the Loan Agreement and the Other
Documents are true and correct in all material respects as of the date hereof as
if then made, except for such representations and warranties limited by their
terms to a specific date.
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11. Effect on
the Agreement. Except as
specifically amended, consented and/or waived hereby, the Loan Agreement and the
Other Documents shall remain in full force and effect and are hereby ratified
and confirmed as so amended. Except as expressly set forth herein,
this Amendment shall not be deemed to be a waiver, amendment or modification of
any provisions of the Loan Agreement or any Other Document or any right, power
or remedy of Agent or Lenders, nor constitute a waiver of any provision of the
Loan Agreement or any Other Document, or any other document, instrument and/or
agreement executed or delivered in connection therewith or of any Default or
Event of Default under any of the foregoing, in each case whether arising before
or after the date hereof or as a result of performance hereunder or
thereunder. This Amendment also shall not preclude the future
exercise of any right, remedy, power, or privilege available to Agent and/or
Lenders whether under the Loan Agreement, the Other Documents, at law or
otherwise. All references to the Loan Agreement shall be deemed to
mean the Loan Agreement as modified hereby. This Amendment shall not
constitute a novation or satisfaction and accord of the Loan Agreement and/or
the Other Documents, but shall constitute an amendment thereof. The
parties hereto agree to be bound by the terms and conditions of the Loan
Agreement and the Other Documents as amended by this Amendment, as though such
terms and conditions were set forth herein. Each reference in the
Loan Agreement to “this Agreement,” “hereunder,” “hereof,” “herein” or words of
similar import shall mean and be a reference to the Loan Agreement as amended by
this Amendment, and each reference herein or in any Other Document to the “Loan
Agreement” or “Credit Agreement” shall mean and be a reference to the Loan
Agreement as amended and modified by this Amendment.
12. Governing
Law. This Amendment
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to any conflicts
of laws principles thereto that would call for the application of the laws of
another jurisdiction.
13. Headings. Section headings
in this Amendment are included herein for convenience of reference only and
shall not constitute a part of this Amendment for any other
purpose.
14. Counterparts;
Facsimile. This Amendment
may be executed by the parties hereto in one or more counterparts, each of which
shall be deemed an original and all of which when taken together shall
constitute one and the same agreement. Any signature delivered by a party by
facsimile transmission shall be deemed to be an original signature
hereto.
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15. Release. EACH OF THE
BORROWERS HEREBY ACKNOWLEDGES THAT THE BORROWERS’ PAYMENT OBLIGATIONS ARE
ABSOLUTE AND UNCONDITIONAL WITHOUT ANY RIGHT OF RECISSION, SETOFF, COUNTERCLAIM,
DEFENSE, 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 THE AGENT OR ANY LENDER. THE BORROWERS HEREBY
VOLUNTARILY AND KNOWINGLY RELEASE
AND FOREVER DISCHARGE AGENT AND EACH LENDER AND ITS PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”),
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 BORROWERS MAY NOW OR HEREAFTER HAVE AGAINST THE
RELEASED PARTIES, 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, THE EXERCISE OF ANY RIGHTS AND
REMEDIES UNDER THE LOAN AGREEMENT OR OTHER DOCUMENTS, AND NEGOTIATION FOR AND
EXECUTION OF THIS AMENDMENT.
[Signatures
follow.]
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IN
WITNESS WHEREOF, this Amendment has been duly executed as of the day and year
first written above.
PNC BANK,
NATIONAL ASSOCIATION,
as Agent
and as a Lender
By:
Name:
Title:
LASALLE
BUSINESS CREDIT, LLC,
as a
Lender
By:
Name:
Title:
XXXXX
FARGO FOOTHILL, INC.,
as a
Lender
By:
Name:
Title:
SIEMENS
FINANCIAL SERVICES, INC.,
as a
Lender
By:
Name:
Title:
By:
Name:
Title:
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ACKNOWLEDGED
AND AGREED:
as
Borrowing Agent and as a Borrower
By:
Xxxx
Xx
Vice
President
GEOKINETICS
PROCESSING, INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
GEOKINETICS
USA, INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
GEOKINETICS
EXPLORATION INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
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GEOKINETICS
INTERNATIONAL HOLDINGS, INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
GEOKINETICS
INTERNATIONAL, INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
GEOKINETICS
MANAGEMENT, INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
ADVANCED
SEISMIC TECHNOLOGY, INC.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
GEOKINETICS
SERVICES CORP.,
as a
Borrower
By:
Xxxx
Xx
Vice
President
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Addresses
for Notices:
0000 Xxxx
Xxxx Xxxx.
Xxxxx
000
Xxxxxxx,
Xxxxx 00000
Attention:
Xxxx Xx
Telephone: (000)
000-0000
Fax:
(000) 000-0000
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