EXHIBIT 10.1
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
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This Third Amendment to Loan and Security Agreement (this "Third
Amendment") made and entered into as of the 19th day of April, 2004, is by and
between LaSalle Bank National Association, a national banking association
("LENDER"), with an office located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, and Consolidated Oil Well Services, Inc., a Kansas corporation,
having its principal place of business at 000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxx
00000 ("BORROWER").
W I T N E S S E T H:
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WHEREAS, prior hereto, Lender provided certain loans, extensions of credit
and other financial accommodations (the "Financial Accommodations") to Borrower
pursuant to (a) that certain Loan and Security Agreement dated as of January 14,
2002, as amended by that certain First Amendment to Loan and Security Agreement
dated as of February 19, 2003, and that certain Second Amendment to Loan and
Security Agreement dated as of April 25, 2003, each by and between Borrower and
Lender (collectively the "Loan Agreement"), and (b) the other documents,
agreements and instruments referenced in the Loan Agreement or executed and
delivered pursuant thereto;
WHEREAS, Borrower has requested that Lender provide a new term loan to
Lender in the principal amount of $2,213,907.94 to be used by Borrower to
refinance Borrower's existing term debt with Lender and to purchase certain
assets of Blue Star Acid Service, Inc. (the "Additional Financial
Accommodations"); and
WHEREAS, Lender is willing to provide the Additional Financial
Accommodations, but solely on the terms and subject to the provisions set forth
in this Third Amendment and the other agreements, documents and instruments
referenced herein or executed and delivered pursuant hereto.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
understandings of the parties hereto set forth herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Lender and Borrower hereby agree as set forth in this Third
Amendment.
I. DEFINITIONS.
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A. USE OF DEFINED TERMS. Except as expressly set forth in this Third
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Amendment, all terms which have an initial capital letter where not required by
the rules of grammar are used herein as defined in the Loan Agreement.
B. AMENDED DEFINITIONS. Effective as of the date of this Third
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Amendment, Section 1 of the Loan Agreement is hereby amended by deleting the
definition of "Term Loans" set forth in Section 1 and substituting therefor the
following:
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"TERM LOANS" shall mean, collectively, Term Loan A, Term Loan B and
the Capital Expenditure Loans.
C. NEW DEFINITIONS. Effective as of the date of this Third Amendment,
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Section 1 of the Loan Agreement is hereby amended by adding the following new
definitions in the appropriate alphabetical order:
"BLUE STAR" shall mean Blue Star Acid Service, Inc., a Kansas
corporation.
"BLUE STAR ASSET PURCHASE AGREEMENT" shall mean that certain [Asset
Purchase Agreement] dated April 15, 2004, by and between Borrower and Blue
Star.
"TERM LOAN B" shall have the meaning specified in subsection 2(f)
below.
"TERM NOTE B" shall mean that certain Term Note B dated as of April
19, 2004, executed and delivered by Borrower to Lender in the original
principal amount of Two Million Two Hundred Thirteen Thousand Nine Hundred
Seven and 94/100 Dollars ($2,213,907.94), as such Term Note B is amended,
renewed or restated from time to time.
II. LOAN AGREEMENT MODIFICATIONS.
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A. Term Loan B Repayment. Effective as of the date of this Third
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Amendment, the following subsection 2(d)(v) is hereby added to the Loan
Agreement:
"(v) Repayment of Term Loan B. Term Loan B shall be repaid
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as follows: (a) eight (8) successive monthly principal payments of
Ninety-Five Thousand Six Hundred Twenty-Six and 04/100 Dollars ($95,626.04)
each, together with accrued interest to the date of each payment, beginning
April 30, 2004, and continuing on the last day of each calendar month
thereafter through and including November 30, 2004, and (b) a final payment
of all then outstanding Liabilities evidenced by Term Note B on December
31, 2004. If any such payment due date is not a Business Day, then such
payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and
fees due hereunder."
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B. Term Loan B. Effective as of the date of this Third Amendment, the
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following Section 2(f) is hereby added to the Loan Agreement:
"(f) Subject to the terms and conditions of this Agreement and the
Other Agreements, Lender shall make a term loan to Borrower in the
principal amount of Two Million Two Hundred Thirteen Thousand Nine Hundred
Seven and 94/100 Dollars ($2,213,907.94) ("Term Loan B"). The proceeds of
Term Loan B shall be used as follows: (1) $913,907.94 shall be used to
satisfy all principal and interest obligations of Borrower to Lender under
Term Loan A and the Capital Expenditure Loan through April 15, 2004, (2)
$1,200,000 shall be used to purchase certain assets from Blue Star pursuant
to the Blue Star Asset Purchase Agreement, and (3) $100,000 shall be used
to fully satisfy an existing line of credit Blue Star has with its existing
lender. Term Loan B constitutes a "Loan" under this Agreement and shall
bear interest as provided in Paragraph 4(a) below. Term Loan B shall be
evidenced by and repaid in accordance with Term Note B."
C. Capital Expenditure Line of Credit. Effective as of the date of
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this Third Amendment, Lender shall not make and Borrower shall not request any
additional Capital Expenditure Loan advances. Accordingly, Section 2(c) of the
Loan Agreement is hereby amended by deleting Section 2(c) in its entirety and
substituting therefor the following:
"(c) Reserved."
III. CONDITIONS PRECEDENT. Lender's obligation to provide the Additional
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Financial Accommodations to Borrower is subject to the full and timely
performance of the following covenants prior to or contemporaneously with the
execution of this Third Amendment:
A. Borrower executing and delivering, or causing to be executed and
delivered to Lender, the following documents, each of which shall be in form and
substance acceptable to Lender:
(i) An original executed Term Note B;
(ii) An original Secretary's Certificate of even date herewith
executed by the Secretary of Borrower to Lender;
(iii) An original Reaffirmation of Continuing Unconditional
Guaranty of even date herewith from each of Xxxxxxx X. Xxxx
and Infinity, Inc.;
(iv) A fully executed copy of the Blue Star Asset Purchase
Agreement;
(v) Current lien searches from all appropriate jurisdictions for
Blue Star;
(vi) Proof that Borrower is acquiring the assets from Blue Star
pursuant to the Blue Star Asset Purchase Agreement free and
clear of all liens, claims and encumbrances; and
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(vii) such other agreements, documents and instruments as Lender
may reasonably request;
B. No Event of Default or any event which with notice, lapse of time or
both would constitute an Event of Default exists under the Loan Agreement, as
amended by this Third Amendment, or the Other Agreements (hereinafter defined);
C. No claims, litigation, arbitration proceedings or governmental
proceedings not disclosed in writing to Lender prior to the date of hereof shall
be pending or known to be threatened against Borrower and no known material
development not so disclosed shall have occurred in any claims, litigation,
arbitration proceedings or governmental proceedings so disclosed which in the
opinion of Lender is likely to materially or adversely affect the financial
position or business of Borrower or the capability of Borrower to pay its
obligations and liabilities to Lender; and
D. There shall have been no material or adverse change in the business,
financial condition or results of operations since the date of Borrower's most
recently delivered financial statements to Lender.
E. Contemporaneously herewith, Borrower shall pay to Lender a
fully-earned non-refundable loan fee in the amount of twelve thousand and no/100
Dollars ($12,000.00).
IV. CONFLICT. If, and to the extent, the terms and provisions of this Third
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Amendment contradict or conflict with the terms and provisions of the Loan
Agreement, the terms and provisions of this Third Amendment shall govern and
control; provided, however, to the extent the terms and provisions of this Third
Amendment do not contradict or conflict with the terms and provisions of the
Loan Agreement, the Loan Agreement, as amended by this Third Amendment, shall
remain in and have its intended full force and effect, and Lender and Borrower
hereby affirm, confirm and ratify the same.
V. SEVERABILITY. Wherever possible, each provision of this Third Amendment
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shall be interpreted in such manner as to be valid and enforceable under
applicable law, but if any provision of this Third Amendment is held to be
invalid or unenforceable by a court of competent jurisdiction, such provision
shall be severed herefrom and such invalidity or unenforceability shall not
affect any other provision of this Third Amendment, the balance of which shall
remain in and have its intended full force and effect. Provided, however, if
such provision may be modified so as to be valid and enforceable as a matter of
law, such provision shall be deemed to be modified so as to be valid and
enforceable to the maximum extent permitted by law.
VI. REAFFIRMATION. Borrower hereby reaffirms and remakes all of the
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representations, warranties, covenants, duties, obligations and liabilities
contained in the Loan Agreement, as amended hereby.
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VII. FEES, COSTS AND EXPENSES. Borrower agrees to pay, upon demand, all
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fees, costs and expenses of Lender, including, but not limited to, reasonable
attorneys' fees, in connection with the preparation, execution, delivery and
administration of this Third Amendment and the other agreements, documents and
instruments executed and delivered in connection herewith or pursuant hereto.
VIII. RESERVATION OF RIGHTS. Lender continues to reserve all of its rights
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and remedies, including all security interests, assignments and liens pursuant
to the Loan Agreement and the Other Agreements, as well as any rights and
remedies at law, in equity or otherwise. Nothing contained in this Third
Amendment shall be or be deemed a waiver of any presently existing or any
hereafter arising or occurring breach, default or event of default, including,
nor shall preclude the subsequent exercise of any of Lender's rights or
remedies.
IX. CHOICE OF LAW. This Third Amendment has been delivered and accepted in
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Chicago, Illinois, and shall be governed by and construed in accordance with the
laws of the State of Illinois, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law as to all matters,
including matters of validity, construction, effect, performance and remedies.
X. COUNTERPART. This Agreement may be executed in two or more counterparts,
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each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
XI. WAIVER OF JURY TRIAL. BORROWER AND LENDER EACH HEREBY WAIVE THEIR
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RESPECTIVE RIGHT TO TRIAL BY JURY.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Third
Amendment as of the date first written above.
CONSOLIDATED OIL WELL SERVICES, INC., LASALLE BANK NATIONAL ASSOCIATION,
a Kansas corporation a national banking association
By /s/ Xxxxxxx X. Xxxxxxxxx By Xxxxx Xxxxxx
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Title President Title Commercial Loan Officer
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REAFFIRMATION OF CONTINUING UNCONDITIONAL GUARANTY
In connection with that certain Third Amendment to Loan and Security
Agreement of even date herewith (the "Third Amendment") by and between LaSalle
Bank National Association, a national banking association ("Lender"), and
Consolidated Oil Well Services, Inc., a Kansas corporation ("Borrower"), and the
other agreements, documents and instruments referenced in or executed and
delivered pursuant to the Third Amendment, Xxxxxxx X. Xxxx ("Guarantor"), hereby
reaffirms all of his obligations, liabilities, duties, covenants and agreements
to and with Lender pursuant to that certain Continuing Unconditional Guaranty
dated as of January 14, 2002, executed and delivered by Guarantor to Lender (the
"Guaranty").
Guarantor hereby expressly:
A. consents to the execution by Borrower and Lender of the Third
Amendment and the other agreements, documents and instruments executed and
delivered in connection therewith;
B. acknowledges that the "Borrower's Liabilities" (as defined in the
Guaranty) include all of the obligations and liabilities owing from time to time
by Borrower to Lender, including, but not limited to, the obligations and
liabilities of Borrower to Lender under and pursuant to: (1) that certain Loan
and Security Agreement dated as of January 14, 2002, as amended by that certain
First Amendment to Loan and Security Agreement dated as of February 19, 2003,
that certain Second Amendment to Loan and Security Agreement dated as of April
25, 2003, and the Third Amendment, each by and between Borrower and Lender, and
as may be further amended or restated from time to time, (2) that certain
Revolving Note dated as of January 14, 2002, executed and delivered by Borrower
to Lender in a maximum aggregate principal amount not to exceed $2,000,000.00,
(3) that certain Term Note A dated as of January 14, 2002, executed and
delivered by Borrower to Lender in the original principal amount of
$2,902,537.50, (4) that certain Capital Expenditure Note dated as of January 14,
2002, executed and delivered by Borrower to Lender in the original principal
amount of $1,000,000.00, and (5) that certain Term Note B dated as of April 19,
2004, executed and delivered by Borrower to Lender in the principal amount of
$2,213,907.94;
C. reaffirms all of his obligations and liabilities to Lender under the
Guaranty in all respects; and
D. agrees that such obligations and liabilities shall continue in full
force and effect and shall not be discharged, limited, impaired or affected in
any matter whatsoever.
[signature page follows]
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The undersigned further represents that each of the representations and
warranties made by the undersigned in any of the documents executed in
connection with the aforesaid loans to Borrower remain true and correct.
Dated as of: April 19, 2004
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX, Individually
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REAFFIRMATION OF CONTINUING UNCONDITIONAL GUARANTY
In connection with that certain Third Amendment to Loan and Security
Agreement of even date herewith (the "Third Amendment") by and between LaSalle
Bank National Association, a national banking association ("Lender"), and
Consolidated Oil Well Services, Inc., a Kansas corporation ("Borrower"), and the
other agreements, documents and instruments referenced in or executed and
delivered pursuant to the Third Amendment, Infinity, Inc., a Colorado
corporation ("Guarantor"), hereby reaffirms all of its obligations, liabilities,
duties, covenants and agreements to and with Lender pursuant to that certain
Corporate Continuing Unconditional Guaranty dated as of January 14, 2002,
executed and delivered by Guarantor to Lender (the "Guaranty").
Guarantor hereby expressly:
A. consents to the execution by Borrower and Lender of the Third
Amendment and the other agreements, documents and instruments executed and
delivered in connection therewith;
B. acknowledges that the "Borrower's Liabilities" (as defined in the
Guaranty) include all of the obligations and liabilities owing from time to time
by Borrower to Lender, including, but not limited to, the obligations and
liabilities of Borrower to Lender under and pursuant to: (1) that certain Loan
and Security Agreement dated as of January 14, 2002, as amended by that certain
First Amendment to Loan and Security Agreement dated as of February 19, 2003,
that certain Second Amendment to Loan and Security Agreement dated as of April
25, 2003, and the Third Amendment, each by and between Borrower and Lender, and
as may be further amended or restated from time to time, (2) that certain
Revolving Note dated as of January 14, 2002, executed and delivered by Borrower
to Lender in a maximum aggregate principal amount not to exceed $2,000,000.00,
(3) that certain Term Note A dated as of January 14, 2002, executed and
delivered by Borrower to Lender in the original principal amount of
$2,902,537.50, (4) that certain Capital Expenditure Note dated as of January 14,
2002, executed and delivered by Borrower to Lender in the original principal
amount of $1,000,000.00, and (5) that certain Term Note B dated as of April 19,
2004, executed and delivered by Borrower to Lender in the principal amount of
$2,213,907.94;
C. reaffirms all of its obligations and liabilities to Lender under the
Guaranty in all respects; and
D. agrees that such obligations and liabilities shall continue in full
force and effect and shall not be discharged, limited, impaired or affected in
any matter whatsoever.
[signature page follows]
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The undersigned further represents that each of the representations and
warranties made by the undersigned in any of the documents executed in
connection with the aforesaid loans to Borrower remain true and correct.
Dated as of: April 19, 2004
INFINITY, INC., a Colorado corporation
By: /s/ Xxxxxxx X. Xxxx
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Its: President
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TERM NOTE B
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Executed as of the 19th day of
April, 2004 at Chicago, Illinois. No.___________
Amount $2,213,907.94
FOR VALUE RECEIVED, CONSOLIDATED OIL WELL SERVICES, INC., a Kansas
corporation ("BORROWER"), promises to pay to the order of LASALLE BANK NATIONAL
ASSOCIATION, a national banking association (hereinafter, together with any
holder hereof, called "LENDER"), at the main office of Lender, the principal sum
of Two Million Two Hundred Thirteen Thousand Nine Hundred Seven and 94/100
Dollars ($2,213,907.94). Borrower further promises to pay interest on the
outstanding principal amount hereof on the dates and at the rates provided in
the Loan Agreement from the date hereof until payment in full hereof.
This Note was delivered pursuant to that certain Loan and Security
Agreement dated as of January 14, 2002 by and between Borrower and Lender, as it
may be amended from time to time, together with all exhibits thereto (the "LOAN
AGREEMENT"). All terms which are capitalized and used herein (which are not
otherwise defined herein) shall have the meaning ascribed to such term in the
Loan Agreement.
The full and timely payment of the Liabilities is secured by security
interests, liens and encumbrances granted by Borrower to Lender pursuant to the
Loan Agreement and the other agreements, instruments, documents and guaranties
as heretofore, contemporaneously herewith or may hereafter be executed and
delivered to Lender by Borrower and any other persons and entities, from time to
time, as the case may be, evidencing, securing or guarantying the Liabilities
(collectively the "Collateral Documents"), including, without limitation, that
certain Continuing Unconditional Guaranty dated as of January 14, 2002, executed
and delivered by Xxxxxxx X. Xxxx to Lender and that certain Corporate Continuing
Unconditional Guaranty dated as of January 14, 2002, executed and delivered by
Infinity, Inc. to Lender.
THE OUTSTANDING PRINCIPAL BALANCE OF BORROWER'S LIABILITIES TO LENDER UNDER
THIS NOTE SHALL BE PAYABLE BY BORROWER AS FOLLOWS: (a) eight (8) successive
monthly principal payments of Ninety-Five Thousand Six Hundred Twenty-Six and
04/100 Dollars ($95,626.04) each, together with accrued interest to the date of
each payment, beginning April 30, 2004, and continuing on the last day of each
calendar month thereafter through and including November 30, 2004, and (b) a
final payment of all then outstanding Liabilities evidenced by this Note on
December 31, 2004, all without demand therefor or notice thereof from Lender to
Borrower or any other person or entity. If any such payment due date is not a
Business Day, then such payment may be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the amount of
interest and fees due hereunder. The liabilities shall be paid at the main
office of Lender.
Borrower hereby authorizes Lender to charge any account of Borrower
for all sums due hereunder. If payment hereunder becomes due and payable on a
Saturday, Sunday or
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legal holiday under the laws of the United States or the State of Illinois, the
due date thereof shall be extended to the next succeeding business day, and
interest shall be payable thereon at the rate specified during such extension.
Credit shall be given for payments made in the manner and at the times provided
in the Loan Agreement. It is the intent of the parties that the rate of interest
and other charges to Borrower under this Note shall be lawful; therefore, if for
any reason the interest or other charges payable hereunder are found by a court
of competent jurisdiction, in a final determination, to exceed the limit which
Lender may lawfully charge Borrower, then the obligation to pay interest or
other charges shall automatically be reduced to such limit and, if any amount in
excess of such limit shall have been paid, then such amount shall be refunded to
Borrower.
The principal and all accrued interest hereunder may be prepaid by
Borrower, in part or in full, at any time; provided, however, that Borrower
shall pay a prepayment fee as provided in the Loan Agreement, if any.
Borrower waives the benefit of any law that would otherwise restrict
or limit Lender in the exercise of its right, which is hereby acknowledged, to
set-off against the Liabilities, without notice and at any time hereafter, any
indebtedness matured or unmatured owing from Lender to Borrower. Borrower
waives every defense, counterclaim or setoff which Borrower may now have or
hereafter may have to any action by Lender in enforcing this Note and/or any of
the other Liabilities, or in enforcing Lender's rights in the Collateral and
ratifies and confirms whatever Lender may do pursuant to the terms hereof and of
the Loan Agreement and with respect to the Collateral and agrees that Lender
shall not be liable for any error in judgment or mistakes of fact or law.
Borrower, any other party liable with respect to the Liabilities and
any and all endorsers and accommodation parties, and each one of them, if more
than one, waive any and all presentment, demand, notice of dishonor, protest,
and all other notices and demands in connection with the enforcement of Lender's
rights hereunder.
The loan evidenced hereby has been made and this Note has been
delivered at Chicago, Illinois. THIS NOTE SHALL BE GOVERNED AND CONTROLLED BY
THE INTERNAL LAWS OF THE STATE OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING WITHOUT
LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES, and shall be
binding upon Borrower and Borrower's legal representatives, successors and
assigns. If this Note contains any blanks when executed by Borrower, Lender is
hereby authorized, without notice to Borrower to complete any such blanks
according to the terms upon which the loan or loans were granted. Wherever
possible, each provision of this Note shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Note
shall be prohibited by or be invalid under such law, such provision shall be
severable, and be ineffective to the extent of such prohibition or invalidity,
without invalidating the remaining provisions of this Note. The term "Borrower"
as used herein shall mean Borrower and its administrators, successors and
assigns.
To induce Lender to make the loan evidenced by this Note, Borrower (i)
irrevocably agrees that, subject to Lender's sole and absolute election, all
actions arising directly
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or indirectly as a result or in consequence of this Note or any other agreement
with Lender, or the Collateral, shall be instituted and litigated only in courts
having situs in the City of Chicago, Illinois; (ii) hereby consents to the
exclusive jurisdiction and venue of any State or Federal Court located and
having its situs in said city; and (iii) waives any objection based on forum
non-conveniens. IN ADDITION, LENDER AND BORROWER HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION OR PROCEEDING WHICH PERTAINS DIRECTLY OR INDIRECTLY TO THIS NOTE, THE
LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY BORROWER OR LENDER
OR WHICH IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISES OUT OF OR RELATES TO THE
RELATIONSHIP BETWEEN BORROWER AND LENDER. In addition, Borrower agrees that all
service of process shall be made as provided in the Loan Agreement.
As used herein, all provisions shall include the masculine, feminine,
neuter, singular and plural thereof, wherever the context and facts require such
construction and in particular the word "Borrower" shall be so construed.
IN WITNESS WHEREOF, Borrower has executed this Note on the date first
set forth above.
CONSOLIDATED OIL WELL SERVICES, INC., a
Kansas corporation
By /s/ Xxxxxxx X. Xxxxxxxxx
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Name Xxxxxxx X. Xxxxxxxxx
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Title President
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