1
EXHIBIT 10.1
FIFTH AMENDMENT AND MODIFICATION
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT AND MODIFICATION TO AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT (the "AMENDMENT") is made effective as of
November 12, 1999 by and among INTERNATIONAL PETROLEUM SERVICE COMPANY, a
Pennsylvania corporation ("IPSCO"), UNIVERSAL WELL SERVICES, INC., a Delaware
corporation ("UNIVERSAL"'), UTICO HARD ROCK BORING, INC., a Delaware corporation
formerly known as USC, Incorporated ("HRB"), UTI DRILLING, L.P., a Texas limited
partnership ("UTI L.P."), SUITS DRILLING COMPANY, an Oklahoma corporation
("SUITS DRILLING"), UTI MANAGEMENT SERVICES, L.P., a Texas limited partnership
("MANAGEMENT SERVICES"), NORTON DRILLING SERVICES, INC., a Delaware corporation
("NORTON"), NORTON DRILLING COMPANY, a Delaware corporation ("NORTON
OPERATING"), UTI ENERGY CORP., a Delaware corporation ("UTI"), UTICO, INC., a
Delaware corporation ("UTICO"), and MELLON BANK, N.A. ("BANK"). IPSCO,
Universal, HRB, UTI L.P., SUITS Drilling, Management Services, Norton and Norton
Operating are hereinafter sometimes collectively referred to as the "BORROWERS"
and individually as a "BORROWER." UTI and UTICO are hereinafter sometimes
collectively referred to as the "GUARANTORS" and individually as a "GUARANTOR."
The Borrowers and the Guarantors are hereinafter sometimes collectively referred
to as the "OBLIGORS" and individually as an "OBLIGOR."
BACKGROUND
A. Pursuant to the terms of that certain Amended and Restated Loan and
Security Agreement dated June 19, 1998, as amended by (i) that certain First
Amendment and Modification to Amended and Restated Loan and Security Agreement
dated August 31, 1998, (ii) that certain Second Amendment and Modification to
Amended and Restated Loan and Security Agreement dated December 31, 1998, (iii)
that certain Third Amendment and Modification to Amended and Restated Loan and
Security Agreement dated June 30, 1999, and (iv) that certain Fourth Amendment
and Modification to Amended and Restated Loan and Security Agreement dated July
26, 1999 (as amended, the "LOAN AGREEMENT"), Bank agreed, inter alia, to extend
to Borrowers a revolving line of credit in a maximum outstanding principal
amount of up to Thirty Million Dollars ($30,000,000.00).
B. Obligors have requested and Bank has agreed to amend the terms of
the Loan Agreement in accordance with the terms and conditions hereof.
NOW THEREFORE, the parties hereto, intending to be legally
bound, agree as follows:
1. DEFINITION. The definition of "Acquisition Purchase Price
Limit" in SECTION 15 of the Loan Agreement shall be amended to read in its
entirety, as follows:
2
"ACQUISITION PURCHASE PRICE LIMIT means as follows:
(a)$40,000,000.00 if the Obligors' Total Funded Debt
to EBITDA Ratio at such time is less than 1.0 to 1.0.
(b)$35,000,000 if the Obligors' Total Funded Debt to
EBITDA Ratio at such time is greater than or equal to 1.0 to
1.0.
Notwithstanding the foregoing, the Acquisition
Purchase Price Limit shall be unlimited as to dollar amount if
100% of the purchase price to be paid as part of the
applicable acquisition is paid by the issuance of Equity
Securities of an Obligor."
2. INTEREST COVERAGE RATIO. SECTION 8.3 of the Loan Agreement
shall be amended to read, in its entirety, as follows:
"8.3 INTEREST COVERAGE RATIO. Obligors will maintain
an Interest Coverage Ratio of not less than (a) 4.0 to 1.0 as
of the end of each fiscal quarter through the fiscal quarter
ending December 31, 1998; (b) 2.7 to 1.0 as of the end of the
fiscal quarter ending March 31, 1999; (c) 0.5 to 1.0 as of the
end of the fiscal quarter ending June 30, 1999; (d) (-0.22) to
1.0 as of the end of the fiscal quarter ending September 30,
1999; and (e) 4.0 to 1.0 as of the end of each fiscal quarter
thereafter. The Interest Coverage Ratio will be calculated on
a rolling four (4) quarters basis for the four (4) full fiscal
quarters then ended."
3. AMENDMENT FEE. In consideration for the Bank entering into
this Amendment, Obligors agree to pay to Bank an amendment fee equal to Fifteen
Thousand Dollars ($15,000.00). Such fee shall be fully earned and shall be due
and payable upon execution of this Letter Agreement. Such fee shall not be
refundable in whole or in part.
4. CHALLENGE TO ENFORCEMENT. Obligors acknowledge and agree
that they do not have any defense, set-off, counterclaim or challenge against
the payment of any sums owing under the Loan Documents, or the enforcement of
any of the terms or conditions thereof.
5. CONFIRMATION OF COLLATERAL. Nothing contained herein shall
be deemed to be a compromise, satisfaction, accord and satisfaction, novation or
release of any of the Loan Documents, or any rights or obligations thereunder,
or a waiver by Bank of any of its rights under the Loan Documents or at law or
in equity. All liens, security interests, rights and remedies granted to the
Bank in the Loan Documents are hereby ratified, confirmed and continued.
2
3
6. REPRESENTATIONS, WARRANTIES AND COVENANTS. Obligors
represent, warrant and covenant, as applicable, which representations,
warranties and covenants shall survive until all Bank Indebtedness and all other
obligations of Obligors to Bank are paid and satisfied in full, as follows:
6.1 All representations and warranties of
Obligors set forth in the Loan Documents, as amended hereby, are true and
correct as of the date hereof.
6.2 No condition or event exists or has occurred
which would constitute an Event of Default under the Loan Documents (or would,
upon the giving of notice or the passage of time or both, constitute an Event of
Default).
6.3 The execution and delivery of this Amendment
by Obligors and all documents and agreements to be executed and delivered
pursuant to the terms hereof:
(a) have been duly authorized by all
requisite corporate or limited partnership action, as the case may be, by
Obligors;
(b) will not conflict with or result in
the breach of or constitute a default (upon the passage of time, delivery of
notice or both) under any applicable statute, law, rule, regulation or ordinance
or any indenture, mortgage, loan or other material document or agreement to
which any Obligor is a party or by which any of them is bound or affected; and
(c) will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the property or assets of any Obligor, except liens in favor of the Bank.
6.4 Obligors agree that none of their
obligations under any of the Loan Documents shall in any way be adversely
affected by this Amendment.
6.5 Obligors ratify and confirm all of their
obligations under the Loan Documents.
7. NO WAIVER. Except as otherwise provided herein, nothing
contained and no actions taken by Bank in connection herewith shall constitute
nor shall they be deemed to be a waiver, release or amendment of or to any
rights, remedies, or privileges afforded to Bank under the Loan Documents or
under the Uniform Commercial Code. Nothing herein shall constitute a waiver by
Bank of Obligors' compliance with the terms of the Loan Documents, nor shall
anything contained herein constitute an agreement by Bank to enter into any
further amendments with Obligors.
8. INCONSISTENCIES. To the extent of any inconsistency between
the terms and conditions of this Amendment and the terms and conditions of the
other Loan Documents, the terms
3
4
and conditions of this Amendment shall prevail. All terms and conditions of the
Loan Documents not inconsistent herewith shall remain in full force and effect
and are hereby ratified and confirmed by Obligors.
9. CONSTRUCTION. All references to the Loan Agreement therein
or in any other Loan Documents shall be deemed to be a reference to the Loan
Agreement as hereby amended.
10. COSTS AND EXPENSES. Obligors agree to pay all of Bank's
legal fees and expenses in connection with the review, preparation, negotiation,
documentation and closing of this Amendment. Nothing contained in this Amendment
shall limit in any manner whatsoever Bank's right to reimbursement under any of
the Loan Documents.
11. BINDING EFFECT. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective permitted
successors and assigns.
12. GOVERNING LAW. This Amendment has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth, without regard to
any rules or principles regarding conflicts of law or any rule or canon of
construction which interprets agreements against the draftsman.
13. HEADINGS. The headings of the Sections of this Amendment
are inserted for convenience only and shall not be deemed to constitute a part
of this Amendment.
14. COUNTERPARTS. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart. Signatures delivered via facsimile transmission shall be
deemed original signatures hereto.
15. DEFINED TERMS. Capitalized terms used in this Amendment
and not defined herein shall have the respective meaning assigned to such terms
in the Loan Agreement.
16. WAIVER OF RIGHT TO TRIAL BY JURY. OBLIGORS AND BANK WAIVE
ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a)
ARISING UNDER ANY OF THE LOAN DOCUMENTS, INCLUDING THIS AMENDMENT OR (b) IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF OBLIGORS OR BANK
WITH RESPECT TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE,
OBLIGORS AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGORS AND BANK TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY.
4
5
OBLIGORS ACKNOWLEDGE THAT THEY HAVE HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL
REGARDING THIS SECTION, THAT THEY FULLY UNDERSTAND ITS TERMS, CONTENT AND
EFFECT, AND THAT THEY VOLUNTARILY AND KNOWINGLY AGREE TO THE TERMS OF THIS
SECTION.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first above written.
BORROWERS:
INTERNATIONAL PETROLEUM
SERVICE COMPANY, a Pennsylvania
corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
UNIVERSAL WELL SERVICES, INC., a
Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
UTICO HARD ROCK BORING, INC., a
Delaware corporation, formerly
known as USC, Incorporated
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
UTI DRILLING, L.P., a Texas limited
partnership
BY: UTICO HARD ROCK BORING, INC.,
a Delaware corporation, its
sole general partner
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Xxxx X. Xxxxxxx,
Vice President
5
6
SUITS DRILLING COMPANY, an Oklahoma
corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
UTI MANAGEMENT SERVICES, L.P., a
Texas limited partnership
BY: UTICO HARD ROCK BORING, INC.,
a Delaware corporation, its
sole general partner
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Xxxx X. Xxxxxxx,
Vice President
NORTON DRILLING SERVICES, INC., a
Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
NORTON DRILLING COMPANY, a Delaware
corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
GUARANTORS:
UTI ENERGY CORP., a Delaware
corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
6
7
UTICO, INC., a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Xxxx X. Xxxxxxx, Vice President
BANK:
MELLON BANK, N.A.
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Xxxxxxx Xxxxx, Vice President
7
