EXHIBIT 10.10
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"),
made effective as of the 31 day of January, 2005 (the "Second Amendment
Effective Date"), by and between BRADFORD RESOURCES, LTD., a Pennsylvania
limited partnership (the "Borrower") and CITIZENS BANK OF PENNSYLVANIA, a
Pennsylvania state chartered bank (the "Lender").
BACKGROUND
A. The Borrower and the Lender are parties to that certain Credit
Agreement dated as of June 3, 2004, as amended by that certain First Amendment
to Credit Agreement dated November 30, 2004 (as now and as hereafter amended,
from time to time, the "Credit Agreement") pursuant to which the Lender has made
a standby term loan facility available to the Borrower in a maximum principal
amount of $12,000,000
B. The Borrower has requested the Lender to further amend the Credit
Agreement to increase the standby term loan facility to a maximum principal
amount of $21,500,000 and to make certain other changes to the Credit Agreement,
and the Lender is willing to do so upon the terms and conditions set forth in
this Second Amendment.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
covenant and agree as follows:
SECTION 1. USE OF TERMS; RECITALS
1.1 Capitalized terms used herein (including the Background above)
shall have the same meaning ascribed thereto in the Credit Agreement as amended
hereby unless otherwise specified herein.
1.2 The Borrower acknowledges that the recitals set forth above in the
Background above are true and correct and are incorporated herein by reference.
SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT
2.1 The following definitions as set forth in Schedule One of the
Credit Agreement are amended and restated in their entirety to read on and after
the Second Amendment Effective Date as follows:
"Standby Term Loan Commitment" means Twenty One Million Five
Hundred Thousand Dollars ($21,500,000.00).
"Standby Term Loan Maturity Date" means January 1, 2011.
"Standby Term Loan Note" means the Second Amended and Restated
Standby Term Loan Note dated January __, 2005 in the original principal
amount of Twenty One Million Five Hundred Thousand Dollars
($21,500,000.00) issued by the Borrower to the Lender, in form and
substance satisfactory to the Lender, together with any and all
amendments, restatements, extensions, renewals, refinancings, or
refundings in whole or in part thereof, such note being an amendment
and restatement, AND NOT A NOVATION OR SATISFACTION, of that certain
Amended and Restated Standby Term Loan Note dated November 30, 2004 in
the principal amount of Twelve Million Dollars ($12,000,000) issued by
the Borrower to the Lender.
2.2 The following definitions are added to Schedule One of the Credit
Agreement in the appropriate alphabetical order:
"Second Amendment to Credit Agreement" shall mean the Second
Amendment to Credit Agreement made effective as of January___________,
2005 by and between the Borrower and the Lender.
"Standby Term Loan Portion No. 1" shall have the meaning given
to such term in Section 2.01(i).
"Standby Term Loan Portion No. 1 Maturity Date" shall mean
January 1, 2010.
"Standby Term Loan Portion No. 2" shall have the meaning given
to such term in Section 2.01(ii).
"Standby Term Loan Portion No. 2 Maturity Date" shall mean
January 1, 2011.
2.3 Section 2.01 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
SECTION 2.01 THE STANDBY TERM LOAN. Subject to the terms and
conditions of this Agreement and in reliance upon the representations
and warranties of the Borrower contained in Article V, the Lender
agrees to make a standby term loan available to the Borrower on the
Closing Date (the "Standby Term Loan") in the aggregate principal
amount not to exceed the Standby Term Loan Commitment. The Standby Term
Loan is a term loan that is non-revolving and the Borrower shall not
have the right to borrow, repay and reborrow under the Standby Term
Loan. Advances of the Standby Term Loan (each an "Advance") will be
made available to the Borrower in two portions as follows:
(i) The first portion of the Standby Term Loan to be
made available to the Borrower shall be in an amount up to
$12,000,000 (the "Standby Term Loan Portion No. 1") and shall
be advanced during the period commencing on the Closing Date
and ending on the earlier to occur of (A) the Borrower's draw
of the entire amount of the Standby Term Loan Portion No. 1,
or (ii) December 31, 2004. The Standby Term Loan Portion No. 1
is non-revolving and the Borrower shall not have the right to
borrow, repay and reborrow any portion of the Standby Term
Loan Portion No. 1; and
(ii) The second portion of the Standby Term Loan to
be made available to the Borrower shall be in an amount up to
$9,500,000 (the "Standby Term Loan Portion No. 2") and shall
be advanced during the period commencing on the effective date
of the Second Amendment to Credit Agreement and ending on the
earlier to occur of (A) the Borrower's draw of the entire
amount of the Standby Term Loan Portion No. 2, or (ii) January
1, 2006. The Standby Term Loan Portion No. 2 is non-revolving
and the Borrower shall not have the right to borrow, repay and
reborrow any portion of the Standby Term Loan Portion No. 2.
2.4 Section 2.04 of the Credit Agreement is hereby amended and restated
in its entirety to read on and after the Second Amendment Effective Date as
follows:
SECTION 2.04 REPAYMENT OF THE STANDBY TERM LOAN. (a) STANDBY
TERM LOAN PORTION NO. 1. Interest only on the Standby Term Loan Portion
No. 1 shall be payable from the Closing Date up to but not including
January 1, 2005. Subject to adjustment annually by the Lender in
writing to the Borrower to take into account Hedging Contracts in
effect from time to time, commencing on January 1, 2005 and continuing
on the first day of each consecutive month thereafter through and
including December 1, 2009, the Borrower shall pay to the Lender equal
and consecutive monthly installments of principal in an amount equal to
1/84th of the outstanding principal balance of the Standby Term Loan
Portion No. 1 on January 1, 2005, and a final principal payment due and
payable on Standby Term Loan Portion No. 1 Maturity Date in an amount
equal to the then outstanding principal balance of the Standby Term
Loan Portion No. 1; provided, during the period(s) that the Standby
Term Loan Portion No. 1 is classified as a LIBOR Rate Tranche, (i) the
Standby Term Loan Portion No. 1 shall mature and become payable in full
on the last day of each Interest Period, and (ii) subject to the
provisions of Section 2.05(b) regarding continuation and conversion of
outstanding Tranches, upon such maturity, the Standby Term Loan Portion
No. 1 shall automatically be continued as a LIBOR Rate Tranche with an
equal Interest Period in an amount equal to the expiring LIBOR Rate
Tranche LESS the principal repayments made to the Lender during such
the Interest Period applicable to the expiring LIBOR Rate Tranche,
provided, however, that no portion of the outstanding principal amount
of a LIBOR Rate Tranche may be continued as a LIBOR Rate Tranche when
any Event of Default has occurred and is continuing. If any Event of
Default has occurred and is continuing (if the Lender does not
otherwise elect to exercise any right to accelerate the Standby Term
Loan it is granted under this Agreement), the maturing LIBOR Rate
Tranche shall automatically be continued as a Prime Rate Tranche.
Notwithstanding the foregoing, the outstanding principal balance of the
Standby Term Loan Portion No. 1 shall be due and payable in full on the
Standby Term Loan Portion No. 1 Maturity Date.
(b) STANDBY TERM LOAN PORTION NO. 2. Interest only on
the Standby Term Loan Portion No. 2 shall be payable from the effective
date of the Second Amendment to Credit Agreement up to but not
including January 1, 2006. Subject to adjustment annually by the Lender
in writing to the Borrower to take into account Hedging Contracts in
effect from time to time, commencing on January 1, 2006 and continuing
on the first day of each consecutive month thereafter through and
including December 1, 2010, the Borrower shall pay to the Lender equal
and consecutive monthly installments of principal in an amount equal to
1/84th of the outstanding principal balance of the Standby Term Loan
Portion No. 2 on January 1, 2011, and a final principal payment due and
payable on Standby Term Loan Portion No. 2 Maturity Date in an amount
equal to the then outstanding principal balance of the Standby Term
Loan Portion No. 2; provided, during the period(s) that the Standby
Term Loan Portion No. 2 is classified as a LIBOR Rate Tranche, (i) the
Standby Term Loan Portion No. 2 shall mature and become payable in full
on the last day of each Interest Period, and (ii) subject to the
provisions of Section 2.05(b) regarding continuation and conversion of
outstanding Tranches, upon such maturity, the Standby Term Loan Portion
No. 2 shall automatically be continued as a LIBOR Rate Tranche with an
equal Interest Period in an amount equal to the expiring LIBOR Rate
Tranche LESS the principal repayments made to the Lender during such
the Interest Period applicable to the expiring LIBOR Rate Tranche,
provided, however, that no portion of the outstanding principal amount
of a LIBOR Rate Tranche
may be continued as a LIBOR Rate Tranche when any Event of Default has
occurred and is continuing. If any Event of Default has occurred and is
continuing (if the Lender does not otherwise elect to exercise any
right to accelerate the Standby Term Loan it is granted under this
Agreement), the maturing LIBOR Rate Tranche shall automatically be
continued as a Prime Rate Tranche. Notwithstanding the foregoing, the
outstanding principal balance of the Standby Term Loan Portion No. 2
shall be due and payable in full on the Standby Term Loan Portion No. 2
Maturity Date.
2.5 The meaning ascribed to "Loan Documents" in the Credit Agreement is
hereby amended to the extent necessary to expressly incorporate in such meaning
this Second Amendment.
SECTION 3. SECOND AMENDED AND RESTATED STANDBY TERM LOAN NOTE.
3.1 From and after the Second Amendment Effective Date, the Standby
Term Loan shall be evidenced by a Second Amended and Restated Standby Term Loan
Note in the principal amount of Twenty One Million Five Hundred Dollars
($21,500,000) (the "Second Amended Note"), in form and substance satisfactory to
the Lender, appropriately completed and duly executed by the Borrower. Upon the
Lender's receipt of the appropriately completed and duly executed Second Amended
Note, the previously outstanding Amended and Restated Standby Term Loan Note
dated November __, 2004 issued by the Borrower to the Lender in the principal
amount of Twelve Million Dollars ($12,000,000) (the "Prior Note") shall be
marked amended and restated and replaced by the Second Amended Note. The Second
Amended Note is intended as an amendment and restatement, AND NOT A NOVATION OR
SATISFACTION, of the Prior Note, and all outstanding principal and unpaid
interest and other charges, if any, accrued and owing on the Prior Note shall be
outstanding under the Second Amended Note, and all outstanding principal and
unpaid interest and other charges, if any, accrued and owing on the Prior Note
shall be outstanding under the Second Amended Note, without discharging any
security granted by the Borrower under the Credit Agreement, the Collateral
Documents or otherwise.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 The Borrower hereby ratifies, confirms and reaffirms, without
condition, all the terms and conditions of the Credit Agreement and the other
Loan Documents to which it is a party and agrees that it continues to be bound
by the terms and conditions thereof as amended by this Second Amendment. Except
as specifically amended by this Second Amendment, the Credit Agreement shall
remain in full force and effect in accordance with its terms. This Second
Amendment is not intended to be, nor shall it be construed to create, a novation
or accord and satisfaction of the Borrower's indebtedness and obligations under
the Credit Agreement, and the Credit Agreement as herein modified shall continue
in full force and effect.
4.2 The Borrower hereby ratifies, confirms, reaffirms and restates the
grant and conveyance of all liens and security interests granted by the Borrower
to the Lender in the Collateral pursuant to the Security Agreement, the
Assignment of Equipment Leases and all other Collateral Documents, and such
liens and security interests shall continue to secure the Obligations,
including, without limitation, all Advances of the Standby Term Loan as
increased pursuant to the terms of this Second Amendment.
4.3 The Borrower represents and warrants to the Lender that:
(i) this Second Amendment, the Second Amended Note and each of
the other Loan Documents executed and delivered in connection herewith
(collectively, the "Second Amendment Documents") have been duly
executed and delivered by the
Borrower and constitute the legal, valid and binding obligations of the
Borrower enforceable in accordance with their terms;
(ii) the representations and warranties set forth within
Article V of the Credit Agreement continue to be true and correct in
all material respects as of the Second Amendment Effective Date except
to the extent that (A) such representations and warranties expressly
relate to an earlier date, or (B) such representations and warranties
have changed, and such changes have been consented to in writing by the
Lender and are reflected on revised schedules to the Credit Agreement
attached to this Second Amendment;
(iii) no Event of Default or Potential Default shall have
occurred and be continuing on the Second Amendment Effective Date; and
(iv) no Material Adverse Effect has occurred since the Closing
Date, and no event or events shall have occurred and be continuing on
the Second Amendment Effective Date which, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect.
SECTION 5. CONDITIONS PRECEDENT
5.1 The amendments set forth in this Second Amendment shall become
effective as of the Second Amendment Effective Date provided each of the
following conditions has been satisfied or effectively waived by the Lender:
(a) The representations and warranties set forth in Section 4
of this Second Amendment shall be true and correct as of the Second
Amendment Effective Date.
(b) Contemporaneously with or prior to the execution hereof,
the Borrower shall deliver, or cause to be delivered, to the Lender:
(1) The Second Amended Note duly executed by the
Borrower;
(2) A certificate of the secretary or assistant
secretary of the Borrower dated the Second Amendment Effective
Date and certifying as to (i) true copies of its Articles of
Incorporation and Bylaws, and all amendments thereto, as in
effect on the Second Amendment Effective Date, (ii) true
copies of all action taken by its Board of Directors in
authorizing the execution, delivery and performance of this
Second Amendment, the Second Amended Note, and the other
Second Amendment Documents, and (iii) the names and true
signatures of its officers authorized to execute and deliver
this Second Amendment, the Second Amended Note and the other
Second Amendment Documents;
(3) A copy of the equipment leases and or supplements
relating to the equipment to be purchased by the Borrower with
the proceeds of the Portion No. 2 of the Standby Term Loan and
leased to and Superior Well Services, Ltd.; and
(4) Such other documents required by the Lender and
its counsel in connection with the transactions contemplated
by this Second Amendment.
(c) All legal details and proceedings in connection with the
transactions contemplated by this Second Amendment shall be
satisfactory to counsel for the Lender, and the Lender shall have
received all such originals or copies of such documents as the Lender
may request.
SECTION 6. JOINDER
6.1 Each of the Guarantors joins herein (i) to consent to the execution
of this Second Amendment by the Borrower, and (ii) to ratify, confirm and
reaffirm, without condition, all of the terms and conditions of the Guaranty
Agreement to which it is a party. Each Guarantor specifically confirms that (x)
it continues to be bound by the terms and conditions of the Guaranty Agreement
to which it is a party and its liability thereunder continues in full force and
effect, and (y) the term "Guaranteed Obligations" as used in its Guaranty
Agreement encompasses within the meaning thereof the obligations and
indebtedness of the Borrower to the Lender arising or incurred under the Credit
Agreement, as amended by this Second Amendment, and the Amended Note, including,
without limitation, all Advances of the Standby Term Loan as increased pursuant
to the terms of this Second Amendment. EACH GUARANTOR FURTHER REAFFIRMS AND
HEREBY RESTATES THE PROVISIONS OF THE GUARANTY AGREEMENT TO WHICH IT IS A PARTY
GRANTING THE LENDER THE POWER TO CONFESS JUDGMENT AGAINST SUCH GUARANTOR UPON
THE OCCURRENCE OF CERTAIN EVENTS.
6.2 The Guarantors acknowledge and agree that (i) notwithstanding the
conditions to effectiveness set forth in this Second Amendment, the Guarantors
are not required by the terms of the Credit Agreement or any of the other Loan
Documents to consent to the amendments to the Credit Agreement effected pursuant
to this Second Amendment, and (ii) nothing in the Credit Agreement, this Second
Amendment or any of the other Loan Documents shall be deemed to require the
consent of the Guarantors to any future amendments to the Credit Agreement.
SECTION 7. MISCELLANEOUS
7.1 This Second Amendment shall be construed in accordance with, and
governed by the internal laws of the Commonwealth of Pennsylvania without giving
effect to its conflict of laws principles.
7.2 All notices, communications, agreements, certificates, documents or
other instruments executed and delivered after the execution and delivery of
this Second Amendment may refer to the Credit Agreement and the other Loan
Documents without making specific reference to this Second Amendment, but
nevertheless all such references shall be deemed a reference to the Credit
Agreement and the other Loan Documents as respectively amended by this Second
Amendment unless the context requires otherwise. All references to the Credit
Agreement and the other Loan Documents in any document, instrument or agreement
executed in connection with the Credit Agreement and the other Loan Documents
shall be deemed to refer to the Credit Agreement and the other Loan Documents as
respectively amended by this Second Amendment unless the context requires
otherwise.
7.3 This Second Amendment shall inure to the benefit of, and shall be
binding upon, the respective successors and assigns of the Borrower and the
Lender. The Borrower may not assign any of its rights or obligations hereunder
without the prior written consent of the Lender.
7.4 This Second Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts each of which, when
so executed, shall be deemed an original, but all such counterparts shall
constitute but one and the same instrument. Delivery by telecopier of an
executed counterpart of a signature page to this Second Amendment or any notice,
communication, agreement, certificate, document or other instrument in
connection with the Credit Agreement and the other Loan Documents shall be
effective as delivery of an executed original counterpart thereof.
7.5 The provisions contained in Section 10.09 of the Credit Agreement
are incorporated herein by reference to the same extent as if reproduced herein
in their entirety, except with reference to this Second Amendment rather than
the Credit Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have caused their duly authorized officers to execute and deliver this
Second Amendment to Credit Agreement the day and year first above written.
ATTEST: BRADFORD RESOURCES, LTD., A
PENNSYLVANIA LIMITED PARTNERSHIP
BY: EASTERN MATERIALS CORPORATION, ITS
SOLE GENERAL PARTNER
By: /s/ XXXX X. XXXXXX By: /s/ XXXXX X. XXXXXX (SEAL)
--------------------------- -----------------------------
Name: Name:
Title: [Assistant] Secretary Title:
CITIZENS BANK OF PENNSYLVANIA
By: /s/ XXXXX XXXXXX
--------------------------
Name:
Title:
[GUARANTORS' ACCEPTANCE OF AMENDMENT ON FOLLOWING PAGE]
Accepted and agreed to by the undersigned Guarantors as of this ____
day of January, 2005.
WITNESS: SUPERIOR WELL SERVICES, LTD., a
Pennsylvania limited partnership
By: BUFFALO VALLEY REAL ESTATE COMPANY,
a Pennsylvania corporation, its sole
general partner
By: /s/ XXXX. A XXXXXX (Seal) By: /s/ XXXXX X. XXXXXX (Seal)
--------------------------- ---------------------------------------
Name: Name:
Title: Secretary Title:
XXXXXXXXX CEMENT & SUPPLY
CORPORATION
By: /s/ XXXX X. XXXXXX (Seal) By: /s/ XXXXXXX X. XXXXXX, XX. (Seal)
--------------------------- ---------------------------------------
Name: Name:
Title: Secretary Title:
GLACIAL SAND & GRAVEL COMPANY
By: /s/ XXXXXX X. XXXXXX(Seal) By: /s/ XXXX X. XXXXXX (Seal)
--------------------------- ---------------------------------------
Name: Name:
Title: Secretary Title:
ALLEGHENY MINERAL CORPORATION
By: /S/ XXXX X. XXXXXX (Seal) By: /s/ XXXXXX X. XXXXXX (Seal)
--------------------------- ---------------------------------------
Name: Name:
Title: Secretary Title:
