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EXHIBIT 10.1
AGREEMENT TO AMEND LOAN AND SECURITY AGREEMENT AND DEFER DIVIDENDS
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Agreement dated this 31 day of August 2001 (the "Amendment") to:
(i) amend that certain Loan and Security Agreement dated as of December
17, 1997 (the "Loan and Security Agreement"), by and between Xxxxxx, Xxxxxxx
Strategic Partners Fund L.P., a limited partnership organized under the laws of
the State of Delaware ("Xxxxxx Xxxxxxx"), Strategic Associates L.P., a limited
partnership organized under the laws of the State of Delaware ("Strategic
Associates"), Newpark Resources, Inc., a Delaware corporation ("Newpark"), Xxxxx
X. Xxxxx, an individual whose address is c/o Stone Energy, 000 Xxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxx, XX 00000 ("Stone"), Environmental Safeguards, Inc., a
Nevada corporation ("EVSF" or the "Company"), National Fuel & Energy, Inc., a
Wyoming corporation and wholly-owned subsidiary of EVSF ("NFE"), and OnSite
Technology, L.L.C., a limited liability company organized under the laws of the
State of Oklahoma ("OnSite"); and
(ii) defer payment of dividends on the Company's Series D Convertible
Preferred Stock which were received by Xxxxxx Xxxxxxx, Strategic Associates,
Newpark and Stone in exchange for the Company's Series C Preferred Shares.
RECITALS
WHEREAS, pursuant to the Loan and Security Agreement, and on the terms
and conditions set forth therein, Xxxxxx Xxxxxxx, Strategic Associates, Newpark,
and Stone (each a "Lender" and collectively the "Lenders") agreed to make
certain loans to EVSF, NFE, and OnSite (each a "Borrower" and collectively the
"Borrowers");
WHEREAS, pursuant to the Series B Convertible Preferred and Series C
Preferred Stock Purchase Agreement dated as of December 17, 1997 (the "Stock
Purchase Agreement"), and on the terms and conditions set forth therein, Xxxxxx
Xxxxxxx, Strategic Associates, Newpark, and Stone (each a "Purchaser" and
collectively the "Purchasers") agreed to purchase shares of the Company's Series
B Convertible Preferred and Series C Preferred Stock;
WHEREAS, pursuant to the Agreement to Exchange Shares and Amend Loan
and Security Agreement dated September 1, 2000 (the "Exchange Agreement"), the
Purchasers exchanged their shares of the Company's Series C Preferred Stock for
the Company's Series D Convertible Preferred Shares;
WHEREAS, pursuant to the Agreement to Defer Dividends and Amend Loan
and Security Agreement dated as of March 1, 2001 (the "Deferral Agreement"), the
Lenders, Borrowers, Purchasers and the Company agreed, among other things, to
defer certain payments due to the Lenders under the Loan and Security Agreement
and further agreed to defer certain dividends due on the Series D Convertible
Preferred Shares;
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WHEREAS, the Lenders and the Borrowers wish to defer certain payments
due to the Lenders under the Loan and Security Agreement;
WHEREAS, the Purchasers and the Company wish to defer certain dividends
due on the Series D Convertible Preferred Shares;
WHEREAS, the Lenders and the Borrowers desire to amend the Loan and
Security Agreement, as more fully set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. All capitalized terms used herein shall have the meanings assigned
to them in the Loan and Security Agreement unless expressly defined otherwise in
this Amendment.
2. Except as otherwise specifically provided herein, all terms and
conditions of the Loan and Security Agreement shall apply to the interpretation
and enforcement of this Amendment as if explicitly set forth herein.
3. Amendments to the Loan and Security Agreement
3.1 The Deferrals. Section 2.2(b) of the Loan and Security Agreement,
as amended in the Exchange Agreement and further amended by the Deferral
Agreement, is hereby further amended by deleting Section 2.2(b) and replacing it
in its entirety with the following:
"(b) If not earlier paid, or if not accelerated for payment, each loan
shall be payable to each Lender (for its Pro Rata Share), with notice of such
payment to the Agent, quarterly in arrears in substantially equal periodic
installments consisting of principal plus interest accrued at the rate set forth
in the Note, on the fifth (5th) day of each March, June, September and December
(each an "Interest Payment Date"), commencing on March 5, 1998, with the entire
remaining principal balance of the Loan and all interest accrued thereon due and
payable on the Maturity Date, subject, however, to the following deferrals (each
a "Deferral" and collectively the "Deferrals"): (i) the payment of principal and
interest due on March 5, 2001, including all amounts previously deferred
pursuant to the Exchange Agreement and the Deferral Agreement shall instead
become due on December 31, 2001; (ii) the payment of principal and interest due
on June 5, 2001, including all amounts previously deferred pursuant to the
Exchange Agreement and the Deferral Agreement shall instead become due on
December 31, 2001; (iii) the payment of principal and interest due on September
5, 2001 shall instead become due on December 31, 2001; and (iv) the payment of
principal and interest due on December 5, 2001 shall instead become due on
December 31, 2001. Notwithstanding the foregoing in the event that on December
31, 2001, EVSF continues to engage in good faith negotiations for the sale of
EVSF, or a subsidiary, or substantially all of its assets, or substantially all
of the assets of its subsidiaries ("Financing Transaction"), then all of the
Deferrals shall be extended to March 31, 2002.. The payments subject to these
Deferrals shall bear interest at the rate set forth in Section 2.2(a) above and
not at the Default Rate. No late charges, as described in Section 2.4, shall
accrue with respect to either of the Deferrals"
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4. .Deferral of Series D Convertible Preferred Dividends The parties
agree to defer payment of the following Dividends on the Series D Convertible
Preferred Stock until December 31, 2001: (i) the Special Dividend that is
referenced in Section 3.4 of the Exchange Agreement; (ii) the dividend that is
due five (5) days after the close of the quarter ending March 31, 2001; and
(iii) the dividend that is due five (5) days after the close of the quarter
ending September 30, 2001 (collectively "Dividend Deferrals"). Notwithstanding
the foregoing in the event that on December 31, 2001, EVSF continues to engage
in good faith negotiations for a Financing Transaction, then all of the Dividend
Deferrals shall be extended to March 31, 2002.
5. Closing.
5.1 Date and Place of Closing. Subject to the conditions stated in this
Amendment, the consummation of the transactions contemplated hereby (the
"Closing") shall be held on or before September 1, 2001, or such other date as
is mutually satisfactory to the parties hereto (the "Closing Date"). The Closing
shall be held at such time and place as the parties hereto may agree in writing.
5.2 Conditions to the Borrower's Closing. The obligations of Borrowers
hereunder are subject to the following conditions, each of which must be
satisfied or waived by Borrowers prior to Closing:
(a) Representations and Warranties True. Borrowers shall be
satisfied that all representations and warranties of the Lenders contained in
this Amendment are true in all material respects at and as of the Closing as if
such representations and warranties were made at and as of the Closing, and that
the Lenders shall have performed and satisfied all material agreements in all
material respects as required by this Amendment to be performed and satisfied by
the Lenders at or prior to the Closing.
5.3 Conditions to Lender's Closing. The obligations of the Lenders
hereunder are subject to the following conditions, each of which must be
satisfied or waived by the Lenders prior to closing:
(a) Resolutions. Prior to or at Closing, the Lenders shall
have received resolutions of the Board of Directors of the Company authorizing
and approving the transactions contemplated by this Amendment, certified by the
respective Secretary or Assistant Secretary of the Company.
(b) Representations and Warranties True. Lenders shall be
satisfied that all representations and warranties of the Borrowers contained in
this Amendment shall be true in all material respects as at and as of the
Closing as if such representations and warranties were made at and as of the
Closing, and that the Borrowers have performed and satisfied all material
agreements in all material respects as required by this Amendment to be
performed and satisfied by the Borrowers at or prior to the Closing.
6. Representations and Warranties
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6.1 Representations and Warranties of the Borrowers. The Borrowers
represent and warrant as of the date hereof and as of the Closing Date as
follows:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties regarding the Borrowers set forth in Section 5 of
the Loan and Security Agreement was true, complete and accurate in all material
respects when made. Except as set forth on Schedule 6.1 to the Exchange
Agreement and on Schedule A to this Amendment, since the dates on which such
representations and warranties were made, no event has occurred that has had a
material adverse effect on the business, assets, financial condition or
operations of the Borrowers and that would cause any such representations or
warranty, if made as of the date of this Amendment, to be materially false.
(b) No Conflict. The Borrowers have all requisite power and
authority to carry on their business as presently conducted, to enter into this
Amendment and to perform their obligations hereunder. The consummation of the
transactions contemplated by this Amendment will not violate, or be in conflict
with, any material provision of the certificates of incorporation of any of the
Borrowers or any material provision of any agreement or instrument to which any
of the Borrowers are a party or by which either of them are bound (except for
any provision in any agreement relating to required consents to transfer)
noncompliance with which would have a materially adverse effect upon the Lenders
or upon any of the transactions contemplated by this Amendment, or, to the
knowledge of the Borrowers, any judgment, decree, order, statute, rule or
regulation applicable to the Borrowers (subject to required approvals of
Federal, state, or other governmental agencies).
(c) Authorization. The execution, delivery and performance of
this Amendment and the transactions contemplated hereby and have been duly and
validly authorized by all requisite action on the part of the Borrowers.
(d) Enforceability. This Amendment has been duly executed and
delivered on behalf of the Borrowers. This Amendment constitutes legal, valid
and binding obligations of the Borrowers enforceable in accordance with their
respective terms, except that such enforcement may be subject to bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights.
6.2 Representations and Warranties of the Lenders. The Lenders
represent and warrant as of the date hereof and as of the Closing Date as
follows:
(a) No Conflict. The Lenders have all requisite power and
authority to carry on their business as presently conducted, to enter into this
Amendment and to perform their obligations hereunder. The consummation of the
transactions contemplated by this Amendment will not violate, or be in conflict
with, any material provision of the certificates of incorporation of any of the
Lenders or any material provision of any agreement or instrument to which any of
the Lenders are a party or by which either of them are bound (except for any
provision in any agreement relating to required consents to transfer)
noncompliance with which would have a materially adverse effect upon the
Borrowers or upon any of the transactions contemplated by this Amendment, or, to
the knowledge of the Lenders, any judgment, decree, order, statute, rule
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or regulation applicable to the Lenders (subject to required approvals of
Federal, state, or other governmental agencies).
(b) Authorization. The execution, delivery and performance of
this Amendment and the transactions contemplated hereby have been duly and
validly authorized by all requisite action on the part of the Lenders.
(c) Enforceability. This Amendment has been duly executed and
delivered on behalf of the Lenders. This Amendment constitutes a legal, valid
and binding obligation of the Lenders, enforceable in accordance with its terms,
except that such enforcement may be subject to bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights.
7. THIS AMENDMENT IS TO BE CONSTRUED UNDER THE LAWS OF THE STATE OF
MARYLAND.
9. This Amendment shall be of no force and effect until receipt and
execution of this Amendment by the Borrowers. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which shall
be deemed one instrument, by facsimile signature of any of the parties, each of
which shall be deemed an original for all purposes.
10. Except as expressly amended hereby, the Loan and Security Agreement
remains in full force and effect. Any references to the Loan and Security
Agreement shall refer to the Agreement as amended hereby.
IN WITNESS WHEREOF, the undersigned have executed this Amendment under
seal as of the date first set forth above.
BORROWERS:
ENVIRONMENTAL SAFEGUARDS, INC. (EVSF)
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
NATIONAL FUEL & ENERGY, INC.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
ONSITE TECHNOLOGY LLC
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: President
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LENDERS/PURCHASERS:
XXXXXX, XXXXXXX STRATEGIC PARTNERS FUND LLP
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: General Partner of Xxxxxx Xxxxxxx
Strategic Partners L.P., its
General Partner
STRATEGIC ASSOCIATES L.P.
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: General Partner of Xxxxxx Xxxxxxx
Strategic Partners L.P., its
General Partner
NEWPARK RESOURCES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: V.P.-Finance and C.F.O.
/s/Xxxxx X. Xxxxx
XXXXX X. XXXXX
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SCHEDULE A TO AMENDMENT
Section references are to the Representations and Warranties contained in the
Loan and Security Agreement. Except as set forth below, since the dates on which
such representations and warranties were made, no event has occurred that has
had a material adverse effect on the business, assets, financial conditions or
operations of the Company and that would cause any such representations or
warranty if made as of the date of this Amendment to be materially false:
5.4 Schedule 5.4 should be replaced with the following:
NONE
5.10 Schedule 5.10 should be deleted and replaced with the following:
OnSite Arabia, Inc.
Umm Seqeim Xxxx Xxxxxx 000
X.X. Xxx 00000
Xxxxx XXX
OnSite Arabia, Inc.
Al Masaood OISS
Airbift Building Souk Branch
First Floor Khalifya Street
Abu Dhabi UAE
5.12 Schedule 5.12 should be deleted and replaced with the following:
NONE
5.20 The following changes should be made to the schedules to the Loan and
Security Agreement:
Schedules 5 & 6 should be revised as follows
o ITD Units No. 4 and 1 are at the National Oil Well (formerly
Xxxxxxx-Xxxxxxx) facility in Galena Park, Texas; Unit 4 is
currently scheduled for transport to the Promotora Ambiental del
Sureste S.A. de C.V facility in Villahermosa Mexico
o ITD Units 5 and 6 are currently located at the Residuos
Industriales Multiquim S.A. de C.V facility in Villahermosa,
Mexico
o ITD Unit No. 9 is at the SAMFOR S.A. facility in Xxxxxxxxx,
Xxxxx, Xxxxxxxxx
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o ITD Unit No. 10 is at Ashley Transport in Aberdeen, Scotland
Schedule 7 should be replaced with the information from Schedules 5&6
above,
Schedule 12-Delete Political Risk Coverage from Schedule
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