EXHIBIT 10.1.1
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Agreement") is
entered into as of the 29th day of January, 2001 between COAST BUSINESS CREDIT,
a division of Southern Pacific Bank, a California corporation ("Coast"), with
offices at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx 00000
and BLACK WARRIOR WIRELINE CORP., a Delaware corporation ("Borrower"), with
chief executive offices located at 0000 Xxxxxxx 00 Xxxxx, Xxxxxxxx, Xxxxxxxxxxx
00000.
RECITALS
A. Borrower and Coast have heretofore entered into a certain Loan and
Security Agreement dated as of January 24, 2000 (as the same has been and may be
hereafter amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"), pursuant to which, among other things, Coast has
agreed, subject to the terms and conditions set forth in the Credit Agreement,
to make loans and financial accommodations to Borrower.
B. Pursuant to the Credit Agreement, Coast received a Continuing
Guaranty and a Principal and Interest Payment Guaranty of SJMB, L.P., and
others, which guarantees were secured by a certain Stock Pledge Agreement by
SJMB, L.P. of capital stock owned by it in Xxxxxxx & Xxxx, Inc. and the proceeds
of the sale thereof.
C. The Credit Agreement further provided that in the event of a sale of
such capital stock, the amount of $10,000,000.00 of the sales proceeds would be
pledged in cash to Coast in a manner satisfactory to Coast to secure the
guaranties of SJMB, L.P. and others to Coast.
D. SJMB, L.P. entered into an agreement for the sale of its stock
interest in Xxxxxxx & Xxxx, Inc. and that as a result of such sale, after
satisfaction in full of various third party obligations of SJMB, L.P. the net
remaining cash proceeds were $8,200,000. SJMB, L.P. requested, and Coast agreed,
to accept said cash proceeds in lieu of the $10,000,000 of cash proceeds which
SJMB, L.P., was obligated to deliver to Coast.
E. SJMB, L.P., has now requested that in lieu of the cash deposit of
$8,200,000 with Coast, it provide an unconditional, irrevocable commercial
letter of credit in the amount of $8,200,000 and Coast is willing to accept said
letter of credit in lieu of the cash deposit upon the terms and conditions
hereinafter set forth.
F. Coast is willing to modify the terms of the Credit Agreement and
related documents to reflect acceptance of an unconditional, irrevocable,
commercial letter of credit in the amount of $8,200,000 in lieu of the cash
proceeds from the sale of SJMB, L.P.'s interest in Xxxxxxx & Xxxx, Inc. in lieu
of the prior requirements upon the terms and conditions hereinafter set forth.
G. Borrower has requested that Coast agree to further modify the Credit
Agreement in certain additional respects, and Coast is willing to accommodate
such request pursuant to the terms and conditions of this Amendment.
H. The following Events of Default have occurred and are continuing
under the Credit Agreement: (a) Borrower failed to make a principal payment on
account of Term Loan A as required by Section 2.1(b) of the Credit Agreement in
an amount equal to 50% of projected less actual Excess Cash Flow for the three
month period ending July 31, 2000, which payment was due on August 31, 2000, and
(b) Borrower is not in compliance with the following covenants:(i) as of June
30, 2000, the covenant as to Minimum Tangible Net Worth set forth in Section
8.1(a) of the Credit Agreement; (ii) for the quarter ending June 30, 2000, the
covenant as to Debt Service Coverage Ratio set forth in Section 8.1(b) of the
Credit Agreement; and (iii) the limitation on capital expenditures set forth in
Section 8.5(b) of the Credit Agreement (collectively, the "Existing Defaults").
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations and warranties hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intended to be legally bound hereby, the parties hereto
mutually agree as follows:
1. Recitals. All the foregoing recitals are incorporated herein
as though set forth at length.
2. Defined Terms. All capitalized terms used herein but not
elsewhere defined shall have the respective meanings ascribed to such terms in
the Credit Agreement, as amended by this Amendment.
3. Amendments to Credit Agreement. The Credit Agreement is
amended as follows:
3.1 Amendments regarding sale of stock in Xxxxxxx & Xxxx,
Inc.
3.1.1 Subparagraph 22 of Section 5.14 of the Schedule
to Credit Agreement is hereby amended by deleting "Ten Million Dollars
($10,000,000.00)" in the fourth line thereof and substituting "Eight Million Two
Hundred Thousand Dollars ($8,200,000.00)" in lieu thereof.
3.1.2 Coast acknowledges receipt of said $8,200,000
and has released its security interest in the shares of Xxxxxxx & Xxxx, Inc.
pledged to it as reflected in that certain Security Agreement - Stock Pledge,
dated as of January 24, 2000.
3.1.3 Said $8,200,000 has been deposited with Coast
as collateral for performance of the obligations of SJMB, L.P. and others under
its Continuing Guaranty to Coast dated January 24, 2000. However, upon receipt
of an unconditional, irrevocable, commercial letter of credit ("Letter of
Credit") issued by Southwest Bankcorporation of Texas or another financial
institution, and in form and substance, acceptable to Coast in its sole and
absolute discretion, in the amount of $8,200,000.00, the cash deposit of
$8,200,000.00 shall be returned to SJMB, L.P. The Letter of Credit shall not
expire prior to twelve (12) months from the date thereof and shall be renewable
for additional twelve (12) month periods until April 30, 2006 no later than
thirty (30) days prior to its scheduled expiration date. Upon failure of the
Letter of Credit to be renewed at least thirty (30) days prior to its scheduled
expiration date, or upon the occurrence of an uncured default under the
Continuing Guaranty, Coast may draw upon the entire balance of the Letter of
Credit and apply it to the obligations due Coast under the Guaranty, the Credit
Agreement or other Loan Documents. In the event that all obligations due Coast
under the Guaranty, Credit Agreement or other Loan Documents are paid in full,
the Letter of Credit shall be returned to SJMB, L.P.
3.1.4 Simultaneously with the execution of this
Agreement, SJMB, L.P. and the other Guarantors shall execute and deliver First
Amendments to Guaranty and such other documents as Coast may reasonably request,
in form and substance acceptable to Coast in its sole and absolute discretion.
3.2 Other Amendments to Credit Agreement.
3.2.1 Excess Cash Flow. Notwithstanding the
provisions of Section 2.1(b) of the Credit Agreement, Coast hereby agrees that
the obligation of Borrower to make principal payments on Term Loan A in the
amount of fifty percent (50%) of Borrower's Excess Cash Flow for the immediately
preceding month shall be modified, solely on the following terms and conditions:
a. No principal payments of Excess Cash Flow
shall be made when due to Coast for the months of August, 2000, to and
including, June, 2001.
b. All principal payments of Excess Cash
Flow deferred as set forth above shall be paid in full to Coast on or before
June 30, 2001.
c. In the event that the controlling
shareholders of Borrower do not complete a sale of all or substantially all of
the assets of Borrower, or the ownership interests therein, in an amount
sufficient to pay all obligations due Coast under or related to the Credit
Agreement and the Loan Documents on or before June 30, 2001, if the deferred
Excess Cash Flow payments set forth in subsection a. above have not been paid to
Coast by the Borrower on or before July 20, 2001, St. Xxxxx Capital Partners,
L.P. shall, on or before said date, make, or cause to be made, an additional
equity investment in Borrower in an amount sufficient to pay in full to Coast
the aggregate amount of Excess Cash Flow due Coast for the period August, 2000,
to and including, June, 2001, but not paid to Coast as set forth above in
subsection a. Failure of said equity investment to be made or said deferred
Excess Cash Flow payments to be paid in full to Coast on or before July 20,
2001, shall be an Event of Default.
d. St. Xxxxx Capital Partners, L.P., by its
execution of this Amendment, hereby agrees to be bound by the terms of this
Section 3.2.1, and agrees to execute any additional documents Coast deems
necessary or appropriate to evidence its obligations hereunder.
3.2.2 Tangible Net Worth.
a. For the purposes of determining
Borrower's compliance with Section 8.1(a) of the Credit Agreement for the
quarter ending September 30, 2000 only, Tangible Net Worth may be less than that
of the previous quarter; provided, however, that the Tangible Net Worth for said
quarter ending September 30, 2000 must still increase by an amount equal to 80%
of Borrower's net income for said quarter, as presently required, and in no
event shall Tangible Net Worth as of September 30, 2000 be less than
$5,000,000.00.
b. For the purposes of determining
Borrower's compliance with Section 8.1(a) of the Credit Agreement for the
quarters ending December 31, 2000 and March 31, 2001 only, Tangible Net Worth
may be less than that of the previous quarter; provided, however, that the
Tangible Net Worth as of September 30, 2000 must have increased by $1,000,000.00
on June 30, 2001. In determining Tangible Net Worth, accrued interest on debt of
Borrower that is subordinated to Borrower's obligations to Coast shall be
considered as additional equity.
3.2.3 Debt Service Coverage Ratio. For the purposes
of determining Borrower's compliance with Section 8.1(b) of the Credit
Agreement, the Debt Service Coverage Ratio for the quarter ending September 30,
2000 only shall be 1.0:1.0. Thereafter, Debt Service Coverage Ratio for each
quarter shall be 1.25:1.0. In determining the Debt Service Coverage Ration,
there shall be excluded from the denominator any interest on debt of Borrower
that by its terms is accrued in lieu of being paid in cash when due.
3.2.4 Actual Revenue and EBITDA. Section 8.1(c) of
the Credit Agreement is hereby deleted in its entirety.
3.2.5 Capital Expenditures Limits. With respect to
Section 8.5(b) of the Credit Agreement, the limit on capital expenditures of
$50,000.00 per month set forth in the Schedule thereto is hereby deleted.
3.2.6 Other Documents and Agreements.
a. Section 5-14(11) of the Credit Agreement
is hereby amended by, beginning on the second line thereof, deleting the balance
of said section after "L.P.".
b. Section 5.14(22) of the Credit Agreement
is hereby amended by deleting the following language from the first sentence
thereof:
"provided, however, that if Borrower complies with the
covenant regarding Revenues and EBITDA during the applicable twelve (12)
consecutive months as set forth in Subsection (c) of Section 8.1 below, such
pledged amount will be reduced to $4,000,000.00."
3.2.7 Waiver and Amendment Fee; Costs. Upon execution
and delivery of this Amendment, Borrower shall be obligated to pay a Waiver and
Amendment Fee to Coast in the amount of $200,000, which fee shall be deemed
fully earned upon the effectiveness of this Agreement. The Waiver and Amendment
Fee shall be paid to Coast upon the earlier to occur of (a) June 30, 2001 or (b)
the sale of all or substantially all of the assets of Borrower, or the ownership
interests therein. In addition, Borrower agrees to pay all fees, costs and
expenses incurred by Coast in documenting this modification, including the fees
and expenses of Coasts's legal counsel.
3.2.8 Letter of Credit Fee. Upon execution and
delivery of this Amendment, the Letter of Credit and the First Amendments to
Guaranty, Borrower shall be obligated to pay a Letter of Credit Fee to Coast in
the amount of $5,000 per month, which fee shall be deemed fully earned at said
time. The Letter of Credit Fee shall accrue and be paid to Coast in full upon
the earlier to occur of (a) June 30, 2001 or (b) payment in full of all
obligations of Borrower to Coast.
4. Conditions to Effectiveness. The effectiveness of this Amendment
shall be subject to the satisfaction of the following conditions in a manner,
form and substance reasonably satisfactory to Coast:
4.1 Delivery of Documents. This Amendment, the Letter of
Credit and the First Amendments to Guaranty shall have been delivered to Coast,
duly authorized and executed by Borrower and Coast, together with such other
instruments, documents, certificates, consents, waivers, opinions and financing
statements as Coast may reasonably request.
4.2 Performance; No Default. Borrower shall have performed and
complied with all agreements and conditions contained in the Loan Documents to
be performed by or complied with by Borrower prior to the date hereof, and,
other than the Existing Defaults, no Event of Default or Default shall have
occurred and be continuing.
Upon this Amendment becoming effective the Existing Defaults shall be deemed
waived. This is a limited waiver only for the Existing Defaults and only for the
period specified therein and shall not be deemed to constitute a waiver of any
other Event of Default or any future breach of the Agreement or any of the other
Loan Documents.
5. Representations and Warranties. Borrower hereby confirms to Coast
that the representations and warranties set forth in Section 6 of the Credit
Agreement (as the same may have been modified or supplemented by, and giving
effect to, the reports and disclosures provided to Coast by or on behalf of
Borrower prior to the date hereof) are true and correct in all material respects
as of the date hereof, and shall be deemed to be remade as of the date hereof.
Borrower further represents and warrants to Coast as follows:
a. All financial statements and other information delivered to
Coast by or on behalf of Borrower in connection with the Loan Documents and this
Amendment, were true and correct as of the respective dates thereof, and the
financial condition of Borrower and its Subsidiaries has not materially altered
as of the date of this Amendment from that presented by the latest such
financial statements and other information provided to Coast.
b. The Obligations of Borrower under the Loan Documents are
absolute and unconditional, and there exists no right of set-off or recoupment,
counterclaim or defense of any nature whatsoever to payment and performance of
Borrower's Obligations to Coast.
c. There are no proceedings pending, threatened against, or
affecting Borrower in any court, before any governmental authority, or
arbitration board or tribunal which may now or in the future have a Material
Adverse Effect.
d. Borrower hereby ratifies and reaffirms the Loan Documents
to which it is a party (as amended hereby), and represents that all of the
foregoing are the valid, binding and enforceable obligations of Borrower .
e. All of the representations and warranties of Borrower
contained in the Loan Documents (as the same may have been modified or
supplemented by, and giving effect to, the reports and disclosures provided to
Coast by or on behalf of Borrower prior to the date hereof), are true and
correct, in all material respects, as of the date hereof and, as so modified or
supplemented, are hereby reaffirmed and ratified.
f. Other than the Existing Defaults, no Default or Event of
Default has occurred and is continuing.
g. This Amendment and the documents and instruments executed
in connection herewith have been authorized by all necessary action and, when
executed, will be the legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms.
h. Borrower's execution, delivery and performance of this
Amendment do not and will not (i) violate any law, rule, regulation or court
order to which Borrower is subject; (ii) conflict with or result in a breach of
Borrower's Articles of Incorporation or Bylaws or any agreement or instrument to
which Borrower is party or by which it or its properties are bound, or (iii)
result in the creation or imposition of any lien, security interest or
encumbrance on any property of Borrower, whether now owned or hereafter
acquired, other than liens in favor of Coast.
6. No Further Amendments. Except as amended hereby, the Credit
Agreement and each of the other Loan Documents shall remain in full force and
effect in accordance with their respective terms. Borrower acknowledges and
agrees that other than as specifically set forth herein, Coast does not waive,
diminish or limit any term or condition contained in the Credit Agreement or any
of the other Loan Documents. Coast's agreement to the terms of this Amendment or
any other amendment shall not be deemed to establish or create a custom or
course of dealing between Coast, on the one hand, and Borrower, on the other
hand.
7. Counterparts; Telecopy Execution. This Amendment may be executed in
one or more counterparts, each of which shall be deemed to be an original, and
all of which, when taken together, shall constitute one and the same instrument.
Delivery of an executed counterpart of this Amendment by telefacsimile shall be
equally as effective as delivery of a manually executed counterpart of this
Amendment. Any party delivering an executed counterpart of this Amendment by
telefacsimile shall also deliver a manually executed counterpart of this
Amendment, but the failure to deliver a manually executed counterpart shall not
affect the validity, enforceability, and binding effect of this Amendment.
8. Entire Agreement. The Credit Agreement, the other Loan Documents and
this Amendment embody the entire agreement and understanding between Borrower
and Coast, and supersede all prior agreements and understandings between said
parties relating to the subject matter thereof. The parties each warrant to the
other that no promise, inducement, representation, or agreement that has not
been expressed herein or is not otherwise set forth in such agreements has been
made to them in connection with the deliberations or negotiations leading up to
the execution of this Amendment.
9. Further Assurances. Borrower covenants and agrees that it will at
any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as reasonably may be required by Coast in order to
effectuate fully the intent of this Amendment.
10. Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of California, without regard to conflict of
laws principles.
11. Severability. In the event that any provision of this Amendment is
deemed to be invalid by reason of the operation of any law or by reason of the
interpretation placed thereon by any court or governmental authority, this
Amendment shall be construed as not containing such provision and the invalidity
of such provision shall not affect the validity of any other provisions hereof,
and any and all other provisions hereof which otherwise are lawful and valid
shall remain in full force and effect.
12. Headings and Recitals. The paragraph headings used in this
Amendment are for convenience of reference only and in no way define, describe
or limit the scope or intent of this Amendment. The foregoing recitals are
hereby incorporated herein by this reference thereto.
13. No Strict Construction. The language used in this Amendment shall
be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
party hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
BORROWER:
BLACK WARRIOR WIRELINE CORP., a
Delaware corporation
By:
--------------------------------
President or Vice President
By:
--------------------------------
Secretary or Assistant Secretary
COAST:
COAST BUSINESS CREDIT, a division
of Southern Pacific Bank
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
The foregoing First Amendment to Loan and Security Agreement is hereby approved
and accepted and all obligations of the undersigned under that certain Principal
and Interest Payment Guaranty dated January 24, 2000 as modified by the First
Amendment to Guaranty, and that certain Continuing Guaranty dated January 24,
2000, as modified by the First Amendment to Guaranty, as the case may be, are
hereby ratified and confirmed.
Dated: As of January 29, 2001.
GUARANTORS:
SJMB, L.P., a Delaware limited
partnership
By: SJMB, L.L.C., a Delaware
limited liability company, its
general partner
By:
-----------------------
Name:
-----------------------
Title:
-----------------------
ST. XXXXX CAPITAL PARTNERS, L.P.,
a Delaware limited partnership
By: St. Xxxxx Capital Corp., a
Delaware corporation, its general
partner
By:
-----------------------
Name:
-----------------------
Title:
-----------------------
---------------------------------
Xxxxx Xxxxxxxxxx, an individual
