Exhibit 10.11
AMENDMENT NUMBER ONE
TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated effective as of August 12, 1999 is entered into by and
among Grant Geophysical, Inc., a Delaware corporation ("Borrower"),
Foothill Capital Corporation, a California corporation ("Foothill"), and
Xxxxxxx Associates, L.P., a Delaware limited partnership ("EALP"), in light
of the following:
WHEREAS, Borrower, EALP and Foothill are parties to that certain Loan
and Security Agreement (the "Loan and Security Agreement") dated as of May
11, 1999; and
WHEREAS, Borrower and EALP have requested that certain provisions of
the Loan and Security Agreement be amended, and Foothill has agreed to
amend such provisions in accordance with the terms hereof, so as to provide
for the following:
(a) the inclusion of cash proceeds from issuance of preferred
stock in the calculation of EBITDA of Borrower, and
(b) the allowance of EALP to receive interest payments on
subordinated indebtedness of Borrower purchased by EALP.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, conditions, and provisions as hereinafter set forth, the parties
hereto agree as follows:
1. DEFINITIONS. Initially capitalized terms used herein have the
meanings defined in the Loan and Security Agreement unless otherwise
defined herein.
"SUBORDINATED NOTES" means the 9-3/4% Senior Notes due
2008 issued by Borrower on February 18, 1998, in the aggregate
principal amount of $100,000,000.
2. AMENDMENT TO THE DEFINITION OF EBITDA. SECTION 1.1 of the Loan
and Security Agreement is hereby amended by amending the definition of
"EBITDA" to read in full as follows:
"EBITDA" of any Person for any period shall mean the
sum of:
(a) the net income (or net loss) from operations of
such Person and its Subsidiaries on a consolidated basis (determined
in accordance with GAAP) for such period, without giving effect to any
extraordinary or unusual gains (losses) or gains (losses) from the
sale of assets (other than the sale of assets in the ordinary course
of business) or unrealized currency gains (losses); PLUS
(b) the amount of any cash equity investment in such
Person for such period, including any cash equity investment made in
consideration for the issuance of preferred stock of such Person; PLUS
(c) to the extent that any of the items referred to in
any of clauses (i) through (iii) below were deducted in calculating
such net income:
(i) consolidated interest expense of such Person
for such period;
(ii) income tax expense of such Person and its
Subsidiaries with respect to their operations for such period;
and
(iii) the amount of all non-cash charges
(including, without limitation, depreciation and amortization),
if any, of such Person and its Subsidiaries for such period.
3. AMENDMENT TO CERTAIN PROVISIONS REGARDING SUBORDINATION BY EALP.
SECTION 17.16 of the Loan and Security Agreement is hereby amended by
deleting subsection (d) thereof in its entirety and adding and inserting in
its place the following new subsection (d):
(d) If any money or other property (except for payments
of interest on the EALP Term Note and interest on the Subordinated
Notes owned and held by EALP, as such interest accrues and becomes due
and payable prior to the occurrence of a Default) is received by EALP
for application on the EALP Obligations before the Foothill
Obligations are paid in full, in cash, EALP will hold such money and
other property in trust for Foothill and, promptly after receipt,
deliver such money and other property to Foothill. After the
occurrence and during the continuance of a Default, then the exception
for payments of interest on the EALP Term Note and on the Subordinated
Notes owned and held by EALP, which exception is set forth
parenthetically in the preceding sentence, shall not apply. Upon cure
of the Default within the period(s) of time provided for in Article 8,
above, then EALP may receive payments of interest on the EALP Term
Note and interest on the Subordinated Notes owned and held by EALP, as
such interest accrues and becomes due and payable.
4. REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Foothill as follows:
(a) The execution, delivers and performance by Borrower of this
Amendment have been duly authorized by all necessary corporate and other
action and do not and will not require any registration with, consent or
approval or. notice to or action be, any Person in order to be effective
and enforceable.
(b) The Loan and Security Agreement, as amended by this
Amendment, constitutes the legal, valid and binding obligation of Borrower,
enforceable against Borrower in accordance with its terms, without defense,
counterclaim or offset.
5. CONSENT REGARDING RISING STAR RECEIVABLE. Reference is made to
that certain Account (the "Rising Star Receivable") owing to Borrower by
Rising Star Energy, Limited Partnership #1 ("Rising Star") on a geological
survey in Midland and Upton Counties, Texas, involving phases of a survey
identified as "Azalea," "South Azalea," and "Azalea Extension," all as more
further described in Supplemental Agreement No. 1, dated September 24,
1998, between Borrower and Rising Star. Foothill and EALP agree to
subordinate the security interest in the Rising Star Receivable granted
under the Loan and Security Agreement to the interest of a transferee
and/or factor of the Rising Star Receivable, who provides value to Borrower
in exchange for such transfer and or factoring of the Rising Star
Receivable.
6. MISCELLANEOUS.
(a) Except as herein expressly amended, all terms, covenants and
provisions of the Loan and Security Agreement are and shall remain in full
force and effect and all references therein to the Loan and Security
Agreement shall henceforth refer to the Loan and Security Agreement as
amended by this Amendment. This Amendment shall be deemed incorporated
into, and a part of, the Loan and Security Agreement.
(b) This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts.
(c) This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
(d) This Amendment, together with the Loan and Security
Agreement and the other Loan Documents, contains the entire and exclusive
agreement of the parties hereto with reference to the matters discussed
herein and therein. This Amendment supersedes all prior drafts and
communications with respect thereto. This Amendment may not be amended
except in writing executed by both of the parties hereto.
(e) If any term or provision of this Amendment shall be deemed
prohibited by or invalid under any applicable law, such provision shall be
invalidated without affecting the remaining provisions of this Amendment or
the Loan and Security Agreement, respectively.
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IN WITNESS HEREOF, this Amendment has been executed and delivered as
of the date first set forth above.
GRANT GEOPHYSICAL, INC.,
a Delaware corporation
By: /S/ XXXX XXXXXXX
Xxxx Xxxxxxx,
Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and
as a Lender
By:___________________________________
Name:_________________________________
Title:__________________________________
XXXXXXX ASSOCIATES, L.P.
a Delaware limited partnership
By: /S/ XXXX X. XXXXXX
Xxxx X. Xxxxxx,
General Partner
