Fort Worth, Texas 76102 June 15, 2016 MAALT, L.P. GHMR OPERATIONS, L.L.C. Attention: Gary B. Humphreys Fort Worth, Texas 76119 Re: Fourth Amendment to Loan Agreement Ladies and Gentlemen:
Exhibit 10.18.12
000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
June 15, 2016
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
Attention: Xxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Re: Fourth Amendment to Loan Agreement
Ladies and Gentlemen:
This letter (this “Amendment”) amends the Loan Agreement dated June 15, 2014, among MAALT, L.P., a Texas limited partnership, and GHMR OPERATIONS, L.L.C., a Texas limited liability company (collectively “Borrowers”); DENETZ LOGISTICS, L.L.C., a Texas limited liability company, XXXX X. XXXXXXXXX, XXXXXX X. XXXXXXXXX, and the Trust Guarantors (as defined below) (collectively “Guarantors”); and PLAINSCAPITAL BANK (“Lender”), as amended by the First Amendment dated February 11, 2015, the Second Amendment dated June 15, 2015, and the Third Amendment dated February 9, 2016 (collectively the “Loan Agreement”). Capitalized terms below have the meanings assigned in the Loan Agreement.
1. Revolving Loan. Borrowers have requested that Lender renew and extend the Revolving Loan, and Lender has agreed on the terms set forth in this Amendment. Subsection (a) of Section lA of the Loan Agreement is hereby amended to read as follows:
“(a) Subject to the terms and conditions set forth in the Loan Agreement and the other Loan Documents, Lender agrees to make a revolving loan to MAALT in the maximum principal amount of $2,000,000.00 (the “Revolving Loan”) on the terms set forth in the promissory note attached as Exhibit E to this Amendment (the “Revolving Note”), for the purposes set forth in the Loan Agreement. Subject to the terms and conditions of the Loan Agreement, MAALT may borrow, repay, and reborrow on a revolving basis from time to time during the period commencing on the date of this Amendment and continuing through 11:10 a.m. (Fort Worth, Texas time) on June 15, 2017 (the “Termination Date”), such amounts as MAALT may request under the Revolving Loan; provided, however, the total principal amount outstanding at any time shall not exceed the lesser of (i) the aggregate sums permitted under the Borrowing Base, or (ii) $2,000,000.00. All sums advanced under the Revolving Loan, together with all accrued but unpaid interest thereon, shall be due and payable in full on the Termination Date.”
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 2 of 8
2. Financial Covenants. The financial covenants in Section 7 of the Loan Agreement are hereby amended to read as follows:
“7. Financial Covenants. Until the Loans and all other Secured Obligations are fully paid and satisfied and any commitment of Lender under the Loan Agreement is terminated, MAALT shall, unless Lender otherwise consents in writing, maintain the following financial covenants:
(a) MAALT shall maintain at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2016, a Debt Service Coverage Ratio greater than or equal to 1.2 to 1.0, calculated for the prior four fiscal quarters on a rolling basis. As used in the Loan Agreement, the following terms have the meanings assigned below:
(i) “Debt Service Coverage Ratio” is defined as the ratio of (1) EBIDA for the prior four fiscal quarters on a rolling basis, less the amount of all Permitted Distributions made by MAALT during such period, divided by (2) the sum of the current maturities of long term debt from the previous fiscal year end, plus interest expense for the prior four fiscal quarters.
(ii) “EBIDA” is defined as the sum of MAALT’s net income for the applicable period, plus, without duplication and to the extent deducted in the calculation of net income for such period, (1) depreciation, amortization, and other non-cash charges, and (2) interest expense.
(b) MAALT shall maintain at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2016, a Quarterly Debt Service Coverage Ratio greater than or equal to 1.0 to 1.0, calculated for the prior fiscal quarter. As used in the Loan Agreement, the following terms have the meanings assigned below:
(i) “Quarterly Debt Service Coverage Ratio” is defined as the ratio of (1) EBIDA for the most-recent fiscal quarter, less the amount of all Permitted Distributions made by MAALT during such period, divided by (2) the sum of the current maturities of long term debt from the previous fiscal quarter ended, divided by four, plus interest expense for the most recent fiscal quarter.
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 3 of 8
(c) MAALT shall maintain at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2016, a Leverage Ratio less than or equal to 2.0 to 1.0. As used in the Loan Agreement, the following terms have the meanings assigned below:
(i) “Leverage Ratio” is defined as the ratio of (1) MAALT’s total liabilities, divided by (2) Tangible Net Worth.
(ii) “Tangible Net Worth” is defined as MAALT’s total assets, minus MAALT’s intangible assets, including, without limitation, all notes receivable from partners, members, and affiliates, minus MAALT’s total liabilities, excluding any liabilities that have not been subordinated in Proper Form.
(d) MAALT shall maintain at the end of each fiscal quarter, commencing with the fiscal quarter ending June 30, 2016, a Cash Flow Leverage Ratio less than or equal to 4.0 to 1.0 for the fiscal quarters ending June 30, 2016, September 30, 2016, December 31, 2016, and March 31, 2017, and less than or equal to 3.0 to 1.0 for the fiscal quarter ending June 30, 2017, and each fiscal quarter thereafter, calculated for the prior four fiscal quarters on a rolling basis. As used in the Loan Agreement, the following terms have the meanings assigned below:
(i) “Cash Flow Leverage Ratio” is defined as the ratio of (1) Senior Debt, divided by (2) EBIDA for the prior four fiscal quarters on a rolling basis, less the amount of all Permitted Distributions made by MAALT during such period.
(ii) “Senior Debt” is defined as the sum of the aggregate principal amount outstanding on the Loans, plus the aggregate principal amount outstanding owed by MAALT with respect to all other obligations for borrowed money, excluding any borrowings that have been subordinated in Proper Form, plus all capital lease obligations of MAALT.
Unless otherwise specified, all accounting and financial terms and covenants set forth above are to be determined according to Accounting Principles, consistently applied.”
3. Compliance Certificate. Subparagraph (5) of Subsection (a) of Section 8 of the Loan Agreement is hereby amended to read as follows:
“(5) With the annual and quarterly financial statements required for MAALT under the Loan Agreement, a Compliance Certificate in the form of Exhibit B attached to this Amendment, signed by authorized officers of Borrowers and certifying compliance with the financial covenants and other matters in the Loan Agreement;”
4. Conditions Precedent. The obligation of Lender to enter into this Amendment and renew and extend the Revolving Loan is subject to Borrower’s satisfaction, in Lender’s sole discretion, of the following conditions precedent:
(a) Borrower shall be in compliance in all material respects with the conditions set forth in Subsection (a) of Section 4 of the Loan Agreement as of the date of this Amendment, and all representations and warranties set forth in Section 5 of the Loan Agreement must be true in all material respects as of the date of this Amendment.
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 4 of 8
(b) the negotiation, execution, and delivery of Loan Documents in Proper Form, including, but not limited to, the following:
| (i) | this Amendment; |
| (ii) | the Revolving Note; |
| (iii) | Ratification of Guaranties signed by General Partner, Company Guarantors, and the Trusts; |
| (iv) | a Borrowing Resolution from MAALT. |
(c) a Material Adverse Change shall not have occurred.
5. Confirmations. (a) As security for the Notes, Borrowers previously executed the Security Documents. Borrowers ratify and confirm the Security Documents, acknowledge that they are valid, subsisting, and binding, and agree that the Security Documents secure payment of the Notes (including the Term Note, the Revolving Note, and the Second Term Note), the Loans (including the Term Loan, the Revolving Loan, and the Second Term Loan), and all other Secured Obligations.
(b) In connection with the Notes, Guarantors executed the Guaranties. Guarantors ratify and confirm the Guaranties, acknowledge that the Guaranties are valid, subsisting, and binding upon Guarantors, and agree that the Guaranties guarantee payment of the Notes (including the Term Note, the Revolving Note, and the Second Term Note), the Loans (including the Term Loan, the Revolving Loan, and the Second Term Loan), and all other Secured Obligations.
(c) Borrowers hereby represents to Lender that all representations and warranties set forth in Section 5 of the Loan Agreement are true and correct in all material respects as of the date of execution of this Amendment; and that Borrower is in compliance in all material respects as of the date of execution of this Amendment with all covenants set forth in Section 6 of the Loan Agreement, all financial covenants set forth in Section 7 of the Loan Agreement, and all reporting requirements set forth in Section 8 of the Loan Agreement.
6. Validity and Defaults. The Loan Agreement, as amended, remains in full force and effect. Borrowers and Guarantors acknowledge that the Loan Agreement, the Notes, the Security Documents, the Guaranties, and the other Loan Documents are valid, subsisting, and binding upon Borrowers and Guarantors; no uncured breaches or defaults exist under the Loan Agreement, as amended; and no event has occurred or circumstance exists which, with the passing of time or giving of notice, will constitute a default or breach under the Loan Agreement, as amended. Borrowers and Guarantors ratify the Loan Agreement, as amended.
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 5 of 8
7. Regulation B — Notice of Joint Intent. Federal Regulation B (Equal Credit Opportunity Act) requires Lender to obtain evidence of Borrowers’ intention to apply for joint credit. Borrowers’ and Guarantors’ signatures below shall evidence such intent. Borrowers’ and Guarantors’ intent shall apply to future related extensions of joint credit and joint guaranty.
8. Counterparts. This Amendment and the related Loan Documents may be executed in counterparts, and Lender is authorized to attach the signature pages from the counterparts to copies for Lender and Borrowers and filing counterparts. At Lender’s option, this Amendment and the related Loan Documents may also be executed by Borrowers and Guarantors in remote locations with signature pages faxed or scanned and e-mailed to Lender. Borrowers and Guarantors agree that the faxed and scanned signatures are binding upon Borrowers and Guarantors, and Borrowers and Guarantors further agree to promptly deliver the original signatures for this Amendment and the related Loan Documents by overnight mail or expedited delivery. It will be an Event of Default if Borrowers or Guarantors fail to promptly deliver all required original signatures.
9. Captions. Captions are for convenience only and should not be used in interpreting this Amendment.
10. Final Agreement. (a) In connection with the Loans, Borrowers, Guarantors, and Lender have executed and delivered this Amendment, the Loan Agreement, and the Loan Documents (collectively the “Written Loan Agreement”).
(b) It is the intention of Borrowers, Guarantors, and Lender that this paragraph be incorporated by reference into each of the Loan Documents. Borrowers, Guarantors, and Lender each warrant and represent that their entire agreement with respect to the Loans is contained within the Written Loan Agreement, and that no agreements or promises have been made by, or exist by or among, Borrowers, Guarantors, and Lender that are not reflected in the Written Loan Agreement.
(c) THE LOAN AGREEMENT, AS AMENDED, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 6 of 8
If the foregoing correctly sets forth your understanding of our agreement, please sign and return one copy of this Amendment.
| Yours very truly,
PLAINSCAPITAL BANK | ||
| By: | /s/ Xxxxxx Xxxxx | |
| Xxxxxx Xxxxx, Senior Vice President | ||
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 7 of 8
Accepted and agreed to
this day of August, 2016:
BORROWERS:
| MAALT, L.P.,
a Texas limited partnership | ||
| By: | Denetz Logistics, L.L.C., a Texas limited liability company, its general partner | |
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Xxxx X. Xxxxxxxxx, Manager |
| GHMR OPERATIONS, L.L.C., a Texas limited liability company | ||
| By: | /s/ Xxxx X. Xxxxxxxxx | |
| Xxxx X. Xxxxxxxxx, Manager | ||
MAALT, L.P.
GHMR OPERATIONS, L.L.C.
June 15, 2016
Page 8 of 8
| GUARANTORS:
DENETZ LOGISTICS, L.L.C., a Texas limited liability company | ||
| By: | /s/ Xxxx X. Xxxxxxxxx | |
| Xxxx X. Xxxxxxxxx, Manager | ||
| /s/ Xxxx X. Xxxxxxxxx |
| XXXX X. XXXXXXXXX |
| /s/ Xxxxxx X. Xxxxxxxxx |
| XXXXXX X. XXXXXXXXX |
Exhibits and Schedules
Exhibit B - Compliance Certificate
Exhibit E - Revolving Note
