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EXHIBIT 4.02
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 gain, (losses) from the sale
of assets (other than the sale of assets in the ordinary course of
business) or unrealized currency gains (losses); plus
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(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 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, delivery 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 defenses
counterclaim or offset.
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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:
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Xxxx Xxxxxxx
Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and
as a Lender
By:
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Name:
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Title:
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XXXXXXX ASSOCIATES, L.P.
a Delaware limited partnership
By:
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Xxxx X. Xxxxxx,
General Partner
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