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EXHIBIT 10.3
FOURTH AMENDMENT AND MODIFICATION
TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FOURTH AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT
(the "AMENDMENT") is made effective as of the 11th day of April, 1997 by and
among FWA DRILLING COMPANY, INC. ("FWA") INTERNATIONAL PETROLEUM SERVICE
COMPANY ("IPSCO"), TRIAD DRILLING COMPANY ("TRIAD"), UNIVERSAL WELL SERVICES,
INC. ("UNIVERSAL"), USC, INCORPORATED, formerly known as UNION SUPPLY COMPANY
("UNION"), UTI ENERGY CORP. ("UTI"), UTICO, INC. ("UTICO"), PANTHER DRILLING,
INC., formerly known as VIERSEN & XXXXXXX DRILLING COMPANY ("VIERSEN") and
MELLON BANK, N.A. ("BANK"). FWA, IPSCO, Triad, Universal and Union are
hereinafter sometimes collectively referred to as the "BORROWERS" and
individually as a "BORROWER". UTI, UTICO and Viersen are hereinafter sometimes
collectively referred to as the "GUARANTORS" and individually as a "GUARANTOR".
The Borrowers and the Guarantors are hereinafter sometimes collectively
referred to as the "OBLIGORS" and individually as an "OBLIGOR".
BACKGROUND
A. Pursuant to the terms of the certain Amended and Restated Loan
and Security Agreement dated December 7, 1995, as amended, by and among
Obligors and Bank (the "Loan Agreement"), Bank agreed, inter alia, to extend to
Borrowers a line of credit up to a maximum outstanding principal amount of
Eight Million Four Hundred Thousand Dollars ($8,400,000.00).
B. Concurrently with the transactions contemplated under this
Amendment, Bank is extending to Obligors the Senior Secured Term Loan, as
defined herein.
C. Obligors have requested and Bank has agreed to amend the terms
of the Loan Agreement in accordance with the terms and conditions hereof.
D. Capitalized terms used herein and not otherwise defined herein
shall have such meaning as provided in the Loan Agreement. Certain terms are
defined in Section 29 of this Amendment.
NOW THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. THE LINE. Section 1.1 of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:
"1.1 LINE OF CREDIT. Bank will establish for
Borrowers for and during the period from the date hereof and until June 30,
1998 (the "CONTRACT PERIOD"), subject to the terms and conditions hereof, a
revolving line of credit (the "LINE") pursuant to which Bank will from time to
time make loans or other extensions of credit to Borrowers in an aggregate
amount not exceeding at any time the lesser of (a) the sum of (i) an amount up
to eighty percent (80%) of the amount of each Borrower's Eligibles, plus (ii)
an amount up to fifty percent (50%) of the amount of each Borrower's Eligible
Unbilled Receivables, plus (iii) an amount up to thirty percent (30%) of the
Value of each Borrower's Eligible Inventory, or (b) Twelve Million Dollars
($12,000,000.00). Notwithstanding the foregoing, the maximum amount of
advances against Borrowers' Eligible Unbilled Receivables shall at no time
exceed One Million Dollars ($1,000,000.00) in the aggregate. Within the
limitations in this Agreement and subject to the individual sub-limits set
forth in this Agreement, Borrowers may borrow, repay and reborrow under the
Line. The Line shall be subject to all terms and conditions set forth in all
of the
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Loan Documents which terms and conditions are incorporated herein. Borrowers'
obligation to repay the loans and extensions of credit under the Line shall be
evidenced by Borrowers' amended and restated promissory note (the "Line Note")
in the face amount of Twelve Million Dollars ($12,000,000.00), which shall be
in the form attached hereto as Exhibit "A", with the blanks appropriately
filled in.
Notwithstanding anything herein or elsewhere to the contrary,
Eligible Unbilled Receivables shall not include any accounts receivable arising
from drilling services performed or to be performed utilizing any Drilling
Equipment (as hereinafter deemed) in which Bank does not have a valid perfected
first priority security interest or with respect to which Bank has not received
an intercreditor agreement containing notice of default, opportunity to cure
and standstill protection provisions from all other lienholders in form and
content acceptable to Bank."
2. AMENDED AND RESTATED LINE NOTE. Contemporaneously
with their execution of this Amendment, Borrowers shall execute and deliver to
Bank an Amended and Restated Line Note (the "Amended and Restated Line Note")
in the form attached hereto as EXHIBIT "A", evidencing the Borrowers obligation
to repay the Line as amended by this Amendment. EXHIBIT "A" attached to the
Loan Agreement is hereby deleted and replaced with EXHIBIT "A" hereto.
Hereafter, all references in the Loan Agreement or any of the other Loan
Documents to the "LINE NOTE" shall be deemed to be references to the Amended
and Restated Line Note. The indebtedness evidenced by the prior Line Note
remains outstanding as of the date hereof. Borrowers acknowledge and agree
that the Amended and Restated Line Note merely re- evidences the indebtedness
evidenced by the prior Line Note, increases the maximum principal amount
thereof, and is given in substitution and not in payment of such prior Line
Note.
3. LOAN FEE. Section 3.4 of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:
"3.4 LOAN FEE. Borrowers shall pay to Bank an
annual loan fee equal to three-eighths of one percent (3/8%) of the total
amount (drawn and undrawn) of the Line, as it may be increased from time to
time. Such fee shall be payable quarterly in advance."
4. COLLATERAL. Sections 4.1(c), (d) and (g) of the Loan
Agreement are hereby amended and restated in their entirety to read as follows,
a new Subsection (h) of Section 4.1 is hereby added and each Obligor hereby
grants Bank a security interest in the following:
"(c) All of such Obligor' s right, title and
interest in and to present and future general intangibles (including but not
limited to tax refunds and rebates, manufacturing and processing rights,
designs, patent rights and applications therefor, trademarks and registration
or applications therefor, trade names, brand names, logos, inventions,
copyrights and all application and registrations therefor), licenses, permits,
approvals, software and computer programs, license rights, royalties, trade
secrets, methods, processes, know-how, formulas, drawings, specifications,
descriptions, label designs, plans, blueprints, patterns and all memoranda,
notes and records with respect to any research and development, and all
products and proceeds of any of the foregoing."
"(d) All of such Obligor's present and future
machinery, equipment, furniture, fixtures, motor vehicles, tools, dies, jigs,
molds, drilling rigs, xxxxx and production equipment, pipe, engines, fittings,
computers, pumps, barrels, stores and other articles of tangible personal
property of every type together with 211 parts, substitutions, accretions,
accessions, attachments, accessories, additions, components and replacements
thereof, all documents of title covering any of such goods or
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inventory and all manuals of operation, maintenance or repair, and all products
and proceeds of any of the foregoing."
"(g) All present and future deposits, funds,
instruments, documents, policies, evidences and certificates of insurance,
securities, investment property, chattel paper and other assets of such Obligor
or in which such Obligor has an interest and all proceeds thereof, including
without limitation, those now or at any time hereafter on deposit with or in
the possession or control of Bank or owing by Bank to such Obligor or in
transit by mail or carrier to Bank or in the possession of any other Person
acting on Bank's behalf, without regard to whether Bank received the same in
pledge, for safekeeping, as agent for collection or otherwise, or whether Bank
has conditionally released the same, and in all assets of such Obligor in which
Bank now has or may at any time hereafter obtain a lien, mortgage, or security
interest for any reason.
"(h) All proceeds of the foregoing."
The collateral described in revised Sections 4.1 (c). (d), (g)
and (h) shall be included within the defined term "Collateral".
The security interest granted in Section 4 of the Loan
Agreement shall include, without limitation: (i) drilling rigs, inventory and
other equipment and assets and all proceeds thereof, in which CIT previously
held a security interest under the CIT Loan Documents, (ii) any assets (other
than real property, if any) which previously secured that certain promissory
note in the original principal amount of Eight Million Dollars ($8,000,000.00)
dated August 14, 1996 made by UTI payable to the order of the Xxx X. Xxxxxxx,
Xx. Revocable Trust (the "Viersen Note") and all other documents m connection
therewith (collectively, the "Viersen Loan Documents") and (iii) the assets
acquired by Triad from Southland pursuant to the Southland Acquisition
Agreement. The Obligors represent and warrant that the obligations of Obligors
under the CIT Loan Documents and the Viersen Loan Documents (collectively, the
"Prior Obligation Documents") have been paid in full or will be paid at the
closing hereunder by Obligors and that the Prior Obligation Documents upon
payment in full will be terminated and of no further force or effect.
5. LIMITATION ON INDEBTEDNESS. Section 6.3 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:
"6.3 Limitation on Indebtedness. (a) No Obligor
will have at any time outstanding to any Person other than Bank, any
Indebtedness for borrowed money, Capitalized Lease Obligations, or any
outstanding letters of credit, except:
(i) Accounts payable incurred in the
ordinary course of that Obligor's business and accrued expenses arising out of
transactions (other than borrowings) in the ordinary course of that Obligor's
business;
(ii) Existing Indebtedness for borrowed
money and Capitalized Lease Obligations described on Schedule 6.3;
(iii) Future purchase money Indebtedness
and Capitalized Lease Obligations in an amount not to exceed (i) $2,500,000
incurred within the 12 month period ending April 10, 1998, (ii) $4,000,000
incurred within the 12 month period ending April 10, 1999, and (iii) $5,000,000
incurred within the 12 month period ending April 10, 2000, provided that the
aggregate
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amount of such purchase money Indebtedness and Capitalized Lease Obligations
incurred after the date of this Amendment shall in no event exceed $10,000,000
in the aggregate;
(iv) The Subordinated Term Loan; and
(v) Intercompany Indebtedness owed by
one Obligor to another, provided that such Indebtedness is subordinated to the
Bank Indebtedness on terms acceptable to Bank.
Any of such permitted Indebtedness may not be refunded or
refinanced without the consent of the Bank.
(b) In the event that any Indebtedness for
borrowed money or the capitalized portion (as determined in accordance with
GAAP) of any Capitalized Lease Obligations in excess of $500,000 contains
financial covenants which are more restrictive with respect to any Obligor than
the financial covenants of this Agreement and the other Loan Documents,
Obligors agree to notify Bank promptly and agree to enter into a modification
to this Agreement and the Loan Documents, as applicable, to include such more
restrictive financial covenants as Bank may elect.
(c) No intercreditor agreements shall be required
if the purchase money Indebtedness or Capitalized Lease Obligations permitted
under Subsection (a)(iii) above is:
(i) a full recourse liability in an
amount less than $500,000, individually, provided that such full recourse
liabilities do not exceed $1,500,000 in the aggregate; or
(ii) a liability for which recourse to
any Obligor is limited solely to the asset financed.
With respect to all other permitted purchase money
Indebtedness and Capitalized Lease Obligations, Obligors shall obtain from the
applicable lender or lessor an intercreditor agreement acceptable to Bank,
providing the Bank with notice of any default, a forty-five (45) day period in
which to cure such default and containing a forty-five (45) day standstill
provision during which the lender or lessor agrees not to exercise any rights
or remedies against any Obligor or the financed asset."
6. WARRANTIES. Section 6.5 of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:
"6.5 Guaranties. Except for the guaranties
contemplated under this Agreement and under the Subordinated Debt Loan
Documents and except for customary guaranties and indemnities executed in
connection with permitted acquisitions hereunder, no Obligor will directly or
indirectly guarantee, endorse (other than for collection or deposit in the
ordinary course of business), discount, sell with recourse or for less than the
face value or agree (contingently or otherwise) to purchase or repurchase or
otherwise acquire, or otherwise become directly or indirectly liable for, or
agree (contingently or otherwise) to supply or advance funds (whether by loan,
stock purchase, capital contribution or otherwise) in respect of, any
Indebtedness, obligations or liabilities of any Person other than another
Obligor."
7. DISPOSITION OF ASSETS. Section 6.6 of the Loan
Agreement is hereby amended and restated to read in it entirety as follows:
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"6.6 Disposition of Assets. (a) No Obligor will
sell, lease, transfer or otherwise dispose of all, substantially all, or any
portion of its property or assets, except for (i) drilling contracts and day
rate drilling contracts for inventory, equipment, and drilling rigs in the
ordinary course of business for fair consideration, (ii) sales of inventory
(other than drilling rigs) in the ordinary course for fair consideration, and
(iii) the sale for fair consideration of equipment or other fixed assets
(including drilling rigs) having a net book value of not more than One Million
Dollars ($1,000,000.00) in the aggregate in any fiscal year, and sales, leases
or transfers of property or as sets from one Obligor to another.
(b) Notwithstanding the foregoing, Obligors may
sell, lease, transfer or otherwise dispose of fixed assets with a book value in
excess of $1,000,000.00 in the aggregate in any fiscal year as part of a
transfer to an unrelated third party in a bona fide, arms-length transaction,
provided that (i) the Obligor gives Bank at least ten (10) Business Days prior
written notice together with a copy of the sale agreement, xxxx of sale or
other applicable agreement, (ii) the sale is for a cash purchase price at least
equal to the reasonable fair market value of such assets, and (iii) the
proceeds of such sale are paid to Bank as a prepayment on the Senior Secured
Term Loan with any balance applied as a permanent reduction of the Line.
(c) Notwithstanding anything herein or elsewhere
to the contrary, Universal may sell all or any part of its assets, or UTI may
sell all of the capital stock of Universal, to an unrelated third party in a
bona fide, arms-length sale, provided that (i) Universal gives Bank at least
ten (10) Business Days prior written notice of any such sale together with a
copy of the sale agreement and a summary of the business terms of such sale,
(ii) the sale is for a cash purchase price at least equal to the reasonable
fair market value of Universal's assets, (iii) the proceeds of such sale remain
subject to the restrictions on liens and encumbrances in Section 6.9, and (iv)
within twelve (12) months after the date such sale is closed, Universal or UTI,
as applicable, utilizes the proceeds the Senior Secured Term Loan or to
purchase for itself or on behalf of another Obligor new assets to be used in
one of Obligors' Lines of Business."
8. MERGERS; CONSOLIDATIONS; BUSINESS ACQUISITIONS;
SUBSIDIARIES. Section 6.7 of the Loan Agreement is hereby amended and restated
to read in its entirety as follows:
"6.7 Mergers; Consolidations; Business
Acquisitions; Subsidiaries. No Obligor will into or consolidate with any
Person, acquire any material portion of the stock merge ownership interests,
assets or business of any Person, permit any Person to merge into it, or form
any new Subsidiaries, other than the Southland Acquisition by Triad.
Notwithstanding the foregoing, any of the Obligors may (a) acquire the stock or
assets of other operating entities provided that the purchase price therefor
(including all assumed liabilities, seller financing or other debt, equity
interests issued or other consideration, but not including payments for
bona-fide employment contracts) does not exceed Five Million Dollars
($5,000,000.00) in the aggregate in any fiscal year, or Ten Million Dollars
($10,000,000.00) in the aggregate for all such acquisitions (in each case not
including the Southland Acquisition), and (b) acquire working interests or
other ownership interests in oil or gas xxxxx with an aggregate acquisition
cost not to exceed Five Hundred Thousand Dollars ($500,000.00) in any one
fiscal year. Notwithstanding the foregoing, any Obligor may merge into another
Obligor or transfer its assets to any other Obligor. All entities acquired by
any Obligor and any Subsidiary formed by an Obligor shall become borrowers or
guarantors of the Bank Indebtedness at Bank's option and on terms acceptable to
Bank."
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9. DEFAULT UNDER OTHER INDEBTEDNESS. Section 6.14 of
the Loan Agreement is hereby amended and restated to read in its entirety as
follows:
"6.14 Default Under Other Indebtedness. If any
Indebtedness of any Obligor is declared or becomes due and payable before its
expressed maturity by reason of default or otherwise or to the knowledge of an
Obligor, the holder of any such Indebtedness shall have the right (or upon the
giving of notice or the passage of time, or both, shall have the right) to
declare such Indebtedness to be so due and payable, Obligors will immediately
give Bank written notice of such declaration, acceleration or right of
declaration."
10. CAPITAL STOCK; DIVIDENDS. Section 6.18 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:
"6.18 Capital Stock; No Dividends. UTI will not
redeem, repurchase or otherwise make or pay any distribution or dividend upon,
or payment or distribution to acquire, any of its capital stock or other Equity
Securities (as defined in the New Loan Agreement). Notwithstanding the
foregoing, UTI may redeem, acquire or repurchase its Equity Securities (a) to
pay purchase price reductions or in settlement of indemnity claims required in
connection with any acquisition permitted under Section 6.7 in which UTl issues
its common stock or other Equity Securities as part of the purchase price, (b)
in connection with the terms of UTI's existing employee benefit plans in the
ordinary course of UTI's business, provided that the amount expended for such
stock purchases related to the benefit plans does not exceed $1,000,000 in any
one fiscal year or $2,000,000 in the aggregate, and (c) in connection with any
exercise of stock options, warrants or other rights to acquire Equity
Securities that do not result in the distribution of cash by UTI other than for
fractions of a unit of any Equity Securities.
11. MAINTENANCE OF MANAGEMENT. Section 6.17 of the Loan
Agreement is hereby amended and restated to read in its entirety as follows:
"6.17 Maintenance of Management. Obligors will
cause their business to be continuously managed by Xxxxxx X. Drum and P. Xxxxx
Xxxxxx (collectively the "Current Managers") or such other persons (serving in
such management positions) as may be reasonably satisfactory to Bank. Obligors
will notify Bank promptly in writing of any change in their board of directors
or executive officers.
12. TRANSACTIONS WITH AFFILIATES. Section 6.19 of the
Loan Agreement is hereby amended and restated to read in its entirety as
follows
"6.19 Transactions with Affiliates. No Obligor
will enter into directly or indirectly any transaction or material group of
related transactions (including without limitation the purchase, lease, sale or
exchange of properties of any kind or the rendering of any service) with any
Affiliate (other than another Obligor) except in the ordinary course and
pursuant to the reasonable requirements of each Obligor's business and upon
fair and reasonable terms no less favorable to such Obligor than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate. No Obligor will make any loans or extensions of credit to any of
its Affiliates (that are not Obligors) shareholders, directors or officers.
Each Obligor will cause all of its Indebtedness at any time owed to its
Affiliates (that are not Obligors), shareholders, directors and officers to be
subordinated in all respects to all present and future Bank Indebtedness and
will not make any payments thereon, except as approved by Bank in writing.
Notwithstanding the foregoing, the restrictions set forth above in this Section
6.19 will not apply to (a) the payment of reasonable and customary regular fees
to directors of UTI who are
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not employees of UTI; (b) loans and advances to officers, directors and
employees of Obligors for travel, entertainment and moving and other relocation
expenses made in direct furtherance and in the ordinary course of business of
Obligors; (c) any other transaction with any employee, officer or director of
Obligors pursuant to employee benefit or compensation arrangements entered into
in the ordinary course of business and approved by the Board of Directors of
Obligors; or (iv) customary investment banking or similar transactions with an
Affiliate, provided that compensation paid to such Affiliate and related
expenses and reimbursements are in customary amounts as would be determined in
arm's- length negotiations. Obligors agree to give Bank prompt notice of each
Affiliate transaction involving cash or other compensation in excess of
$500,000 (not including Equity Securities issued as compensation).
13. UGID NOTE. Section 6.26 of the Loan Agreement is
hereby deleted. Obligors may prepay the outstanding principal balance of the
UGID Note and all accrued unpaid interest thereon.
14. DRILLING RIGS AND RELATED COLLATERAL.
(a) Representations. Obligors represent and
warrant to Bank as follows:
(i) All drilling rigs and related
drilling equipment (collectively, the "Drilling Equipment") used by Obligors in
drilling operations on their own behalf or on behalf of their customers are
owned by the entities described on Schedule 2 attached hereto. Schedule 2 of
the Drilling Equipment and the states in which the Drilling Equipment is
located. None of the Drilling Equipment consists of, is located upon or will
be part of any vehicle for which a certificate of title is issued.
(ii) Such Drilling Equipment is free and
clear of all other liens and encumbrances.
(b) Covenants. Obligors agree as follows:
(i) Bank may at any reasonable time
inspect the Drilling Equipment.
(ii) The Drilling Equipment shall at all
times remain separately identifiable personal property and shall not become
affixed to any real property so as to become a fixture.
(iii) If requested by Bank in writing,
Obligors will attach to the Drilling Equipment in which Bank has a security
interest, a notice satisfactory to Bank, disclosing Bank's security interest in
such Drilling Equipment.
(iv) Obligors will not move any of the
Drilling Equipment in which Bank has a security interest, out of any of the
states in which such Drilling Equipment is currently located as described in
Schedule 2 attached hereto or any of the other states in which Bank has filed
UCC financing statements sufficient to perfect Bank's security interest, naming
the owner of such Drilling Equipment, as debtor, and describing such Drilling
Equipment as collateral, unless such Obligor gives the Bank at least ten (10)
Business Days prior written notice and, with such written notice, also provides
Bank with duly executed financing statements to perfect Bank's security
interest in such Drilling Equipment upon filing in such new state.
(v) Obligors will not permit any
certificates of title to exist or to be issued for any of the Drilling
Equipment, unless the Bank's security interest is duly noted thereon, the
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certificate of title is delivered to Bank and Obligors take all other actions
which Bank deems necessary or advisable to protect and perfect Bank's security
interest in the Drilling Equipment.
15. FINANCIAL COVENANTS. Article 7 of the Loan Agreement
shall be and is hereby amended to read, in its entirety, as follows:
"7.1 Total Funded Debt to EBITDA. Obligors will
maintain a ratio of Total Funded Debt to EBITDA of not more than the following:
Measured as of Required Maximum
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(a) 6/30/97 2.65 to 1.0
(b) 9/30/97 2.50 to 1.0
(c) 12/31/97 2.25 to 1.0
(d) 3/31/98 2.25 to 1.0
(e) 6/30/98 2.0 to 1.0
(f) 9/30/98 2.0 to 1.0
(g) 12/31/98 2.0 to 1.0
(h) 3/31/99 and as of the
end of each fiscal
quarter thereafter 1.50 to 1.0
Compliance as of 6/30/97 shall be calculated based
upon Obligors' EBITDA for the fiscal quarter ending 6/30/97 multiplied by four
(4). Compliance as of 9/30/97 shall be calculated based upon Obligors' EBITDA
for the two (2) fiscal quarters ending 9/30/97 multiplied by two (2). After
9/30/97 compliance will be calculated on a rolling four quarter basis for the
12 month period then ended.
For purposes of this covenant, "EBITDA" for any
period means Net Income of Obligors for such period, plus Taxes paid by
Obligors in such period, plus Interest Expenses paid by Obligors in such
period, plus depreciation, depletion and amortization expenses of Obligors for
such period, all determined in accordance with GAAP. For purposes of this
covenant, "Total Funded Debt" means as of the date of determination, on a
consolidated basis for all Obligors, the sum of (i) all Indebtedness for
borrowed money of Obligors, plus (ii) the undrawn available amount of all
letters of credit issued for the account of any Obligor, plus (iii) the
capitalized portion (as defined by GAAP) of all Capitalized Lease Obligations
of Obligors, plus (iv) all indebtedness, obligations and liabilities of others
which any Obligor has directly or indirectly guarantied (excluding customary
indemnity obligations in connection with permitted business acquisitions) or
with respect to which any Obligor is otherwise directly or indirectly liable.
7.2 Debt Service Coverage Ratio. Obligors will
maintain a Debt Service Coverage Ratio of not less than 1.15 to 1.00 for the 12
month period ending June 30, 1997 and for each 12-month period ending as of the
end of each fiscal quarter thereafter.
7.3 Interest Coverage Ratio. Obligors will
maintain an Interest Coverage Ratio of not less than (a) 2.00 to 1.00 for the
12 month period ending June 30, 1997; and (b) 2.75 to 1.00 for the 12 month
period ending September 30, 1997 and for each 12 month period ending as of the
end of each fiscal quarter thereafter.
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7.4 Capital Expenditures. Obligors will not
cause, suffer or permit Obligors' aggregate annual Capital Expenditures to
exceed Six Million Dollars ($6,000,000.00) in any fiscal year (not including
the expenditures related to the Southland Acquisition). Such permitted Capital
Expenditures are on a non-cumulative basis as to unused portions for any fiscal
year.
7.5 Changes to Financial Covenants. The Bank may
condition extension of the Line after the Contract Period upon revision of the
foregoing financial covenants as Bank in its sole discretion may require."
16. EVENTS OF DEFAULT. Subsections 12.1(c) and (s) of
the Loan Agreement are hereby amended and restated to read in their entirety as
follows:
"(c) The failure of any Obligor to pay any
Indebtedness for borrowed money in excess of Two Hundred Fifty Thousand Dollars
($250,000.00) due to any third Person (including without limitation the
Subordinated Term Loan) or the existence of any other event of default under
any loan, security agreement, mortgage or other agreement providing for loans
or credit extensions in excess of Two Hundred Fifty Thousand Dollars
($250,000.00) pertaining thereto binding an Obligor after the expiration of any
notice and/or grace periods permitted in such documents;"
(s) Any change in the stock ownership of any
Obligor (other than (i) a change in stock ownership of UTI, (ii) a change in
stock ownership of Universal permitted under Section 6.6 hereof, or (iii) other
than as permitted under Section 6.20), any issuance of stock, debentures,
warrants or other Equity Securities of any Obligor (other than (i) any issuance
of stock, debentures, warrants or other Equity Securities of UTI and (ii) other
than as permitted under Section 6.20) or any pledge of the stock of any Obligor
(other than UTI) to any person other than the Bank;"
17. BANK INDEBTEDNESS. Section 14.3 of the Loan
Agreement is amended and restated in its entirety to read as follows:
"14.3 "Bank Indebtedness" shall mean all
obligations and Indebtedness of any Obligor to Bank, whether now or hereafter
owing or existing, including, without limitation, all obligations under the
Loan Documents, all obligations to reimburse Bank for payments made by Bank
pursuant to any letter of credit issued for the account or benefit of any
Borrowers by Bank, all other obligations or undertakings now or hereafter made
by or for the benefit of any Obligor to or for the benefit of Bank under any
other agreement, promissory note or undertaking now existing or hereafter
entered into by any Obligor with Bank, including, without limitation, all
obligations of any Obligor to Bank under the Senior Secured Term Loan and any
documents executed in connection therewith, or under any guaranty or surety
agreement, including, without limitation, the Surety Agreement, and all
obligations of any Obligor to immediately pay to Bank the amount of any
overdraft on any deposit account maintained with Bank, together with all
interest and other sums payable in connection with any of the foregoing."
18. CROSS DEFAULT. Notwithstanding anything to the
contrary contained in the Loan Documents, the occurrence of an event of default
under (i) the New Loan Agreement or any other documents executed in connection
therewith, (ii) any of the Subordinated Debt Loan Documents, or (iii) the
Subordination Agreement shall constitute an Event of Default under the Line and
the other Loan Documents. Following the occurrence of such Event of Default,
Bank may, at Bank's option and without further notice to any Obligor, exercise
any and all rights available to Bank under any of the Loan Documents, at law,
in equity or otherwise.
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19. CROSS COLLATERALIZATION. In addition to Obligors'
obligations to Bank under the Line and the other Loan Documents, Obligors agree
that the Collateral shall also secure Obligors' obligations to Bank under the
New Loan Agreement.
20. REPRESENTATIONS. Obligors hereby represent and
warrant to Bank as follows:
(a) Financial Statements. Obligors have
furnished to Bank the audited consolidated and consolidating financial
statements of Obligors certified without qualification by independent public
accountants for the fiscal year ending as of December 31, 1996 and all
management and comment letters from such accountants in connection therewith.
Such financial statements (together with the related notes and comments), are
materially correct and complete, fairly present the financial condition and the
assets and liabilities of Obligors at such date, and have been prepared in
accordance with GAAP in all material respects.
(b) No Material Adverse Change in Financial
Condition. There has been no material adverse change in the financial
condition of Obligors taken as a whole since December 31, 1996.
(c) Solvency. After giving effect to the
transactions contemplated by the Loan Documents, the Southland Acquisition
Agreement, the New Loan Agreement and the Subordinated Debt Loan Documents, (a)
the fair market value of the assets of each Obligor is in excess of the total
amount of its liabilities (including, without limitation, contingent
liabilities); (b) the present fair saleable value of the assets of each Obligor
is greater than its probable liability on its existing debts as such debts
become absolute and matured; (c) each Obligor is able and expects to be able to
pay its debts (including, without limitation, contingent debts and other
commitments) as they mature; and (d) each Obligor has capital sufficient to
carry on its business as conducted and as proposed to be conducted.
21. COVENANTS. Obligors will comply with the following:
(a) Subordinated Term Loan. Obligors will close
the financing contemplated under the Subordinated Debt Loan Documents and
utilize the funds thereunder for payment of the purchase price of the Southland
Acquisition. Obligors will not amend, modify or restate any of the provisions
of the Subordinated Term Loan or any of the Subordinated Debt Loan Documents,
in any way which in Bank's judgment would adversely affect the Bank
Indebtedness, the Collateral, the Subordination Agreement, any Obligor's
business, operations or financial condition, or any rights or remedies of Bank.
Without limitation, no modification shall be made which increases the interest
rate, fees or other sums payable in connection with the Subordinated Term Loan
or under the Subordinated Debt Loan Documents, shortens or accelerates the
maturity or due date of any payments under the Subordinated Term Loan, grants
any security interest to secure all or any part of the Subordinated Term Loan,
makes any financial covenant or ratio more restrictive, or results in any
situation in which a default could occur under the Subordinated Term Loan
without such event constituting an Event of Default hereunder.
The provisions in the Subordination Agreement
permitting the Subordinated Lender to enter into amendments or modifications of
the Subordinated Debt Loan Documents with respect to interest rate increases
and fees shall not be deemed to be a consent or agreement by Bank to any
increase in the interest rate of the Subordinated Term Loan or any new or
increased fees payable in connection with the Subordinated Term Loan. Such
amendments or modifications shall still require the consent by Bank. Obligors
will give Bank a copy of any proposed amendment, modification or restatement of
any Subordinated Debt Loan Document at least ten (10) days
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prior to the execution thereof. Obligors will not enter into any such
amendment, modification or restatement, if Bank has notified Obligors that it
would be a violation of this Section 21(a).
No Obligor will, directly or indirectly, repurchase, redeem,
or defease prior to the date when due or otherwise make any prepayment prior to
the date when due, or effect any prepayment that is optional on the part of
such Obligor, on any of the Subordinated Term Loan or any other Indebtedness
for borrowed money, without the prior written consent of Bank, except that no
such consent is required for and UTI is permitted to effect (A) any transaction
in which UTI's capital stock is exchanged for Indebtedness owed by any of the
Obligors, including any cashless warrant exercise arrangements in which
warrants are exercised without cash payment by the Person so exercising, or
exchange of indebtedness owed by any of the Obligors for capital stock of UTI,
(B) prepayment permitted by Section 13 hereof, (C) mandatory prepayments
required under the terms of the Subordinated Debt Loan Documents) and (D)
prepayment of Indebtedness owed to Bank in accordance with Section 3.7 of the
Loan Agreement or otherwise required hereunder. Obligors will give Bank a copy
of each notice of default or other substantive notice received by any Obligor
from any Subordinated Lender, as soon as possible but no later than two (2)
Business Days after such Obligor's receipt. Obligors will also deliver to Bank
a copy of each compliance certificate or other report or certificate delivered
by any Obligor to any Subordinated Lender simultaneously with delivery to such
Subordinated Lender. Nothing contained in this Section 21(a) shall limit,
restrict, waive or adversely affect any of Bank's rights or remedies under the
Subordination Agreement.
Promptly upon becoming aware of the existence of any default
or event of default under the Subordinated Debt Loan Documents, Obligors will
give Bank written notice specifying the nature thereof and describing what
action the Obligors are taking a propose to take with respect thereto.
(b) Southland Acquisition. Obligors will not
amend or modify the Southland Acquisition Agreement or any documents collateral
thereto or waive any of their rights thereunder.
(c) Change of Control. Promptly and in any event
within ten (10) Business Days after the occurrence of any Change of Control,
the Obligors will give written notice of such transaction or event to Bank,
which notice shall state the date of such Change of Control, shall describe
such Change of Control in reasonable detail and shall contain an offer to
prepay the unpaid balance of the Line and the Senior Secured Term Loan, all
interest thereon and all sums due in connection therewith and to terminate this
Loan Agreement on the date specified therein (the "Change in Control Prepayment
Date"), which shall be a Business Day not less than one (1) Business Day prior
to the date upon which Obligors have offered to prepay the Subordinated Term
Loan as a result of such Change of Control pursuant to the terms of
Subordinated Debt Loan Documents. Bank shall have the option to require the
Obligors to prepay all or any part of the Line, the Senior Secured Term Loan
and all interest thereon and to terminate this Loan Agreement, and Obligors
hereby, jointly and severally, agree to make such prepayment and to terminate
this Loan Agreement. Such option may be exercised by Bank by written notice to
the Obligors given no later than ten (10) days prior to the Change in Control
Prepayment Date, specifying the amount to be prepaid. On the Change in Control
Prepayment Date, Obligors shall pay such amount to Bank and, if requested by
Bank, shall execute a termination for this Loan Agreement; provided that,
notwithstanding its exercise of the option herein provided, Bank may at any
time prior to the Change in Control Prepayment Date waive or revoke in whole or
in part by written notice to Obligors the exercise of its option hereunder.
22. RELEASE OF COLLATERAL. Bank hereby agrees that at
the sole cost and expense of Obligors, Bank will release its lien against each
Obligor's drilling rigs and related drilling equipment in
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which Bank has a security interest, promptly upon satisfaction of all of the
following conditions: (a) the Senior Secured Term Loan has been repaid in full,
together with all interest thereon and all fees and other sums payable in
connection therewith, and (b) no Event of Default has occurred and is then
continuing. Bank also agrees that in the event that any Obligor obtains
purchase money financing permitted under Section 6.3 (c) of the Loan Agreement,
as amended, and the purchase money lender requires that there be no other lien
encumbering the financed asset, then Bank will release its lien on such
financed asset upon Obligors' request.
23. CONDITIONS. The obligation of Bank to enter into
this Amendment or to make any further advances under the Line is subject to the
following conditions (any of which may be waived by Bank):
(a) Loan Documents. Obligors and all other
required person and entities will have executed and delivered to Bank this
Amendment, the Amended and Restated Line Note, Amended and Restated Guaranty
and Suretyship Agreements from the Guarantors, Amended and Restated
Subordination Agreements from the Obligors and such other documents as Bank may
require.
(b) Representations and Warranties. All
representations and warranties of Obligors set forth in the Loan Documents, as
amended hereby, the New Loan Agreement, and the Subordinated Debt Loan
Documents are and will be true at and as of the date hereof, except for such
representations and warranties that are by their express terms limited to a
specific prior date.
(c) No Default. No condition or event shall
exist or have occurred which would constitute an Event of Default hereunder
under the New Loan Agreement or the Subordinated Debt Loan Documents (or would,
upon the giving of notice or the passage of time or both, constitute such an
Event of Default).
(d) Proceedings and Documents. All proceedings
taken by Obligors in connection with the transactions contemplated by this
Amendment and all documents incident to such transactions shall be satisfactory
in form and substance to Bank and Bank' s counsel, and Bank shall have received
all documents or other evidence which it reasonably may request in connection
with such proceedings and transactions.
(e) Subordinated Term Loan Closing. Closing
shall have been completed under the Subordinated Debt Loan Documents, Obligors
shall have received the $24,500,000 in proceeds thereunder and Obligors shall
have utilized such funds to complete closing of the Southland Acquisition.
Bank shall have received signed copies of all Subordinated Debt Loan Documents
and the signed Subordination Agreement all of which must be in form and content
acceptable to Bank in its sole discretion. The Subordinated Term Loan must be
unsecured and shall be subordinate to the Bank Indebtedness.
(f) Delivery of Other Documents. The following
documents shall have been delivered by or on behalf of Obligors to Bank, all of
which must be in form an content satisfactory to Bank:
(i) Authorization Documents. Evidence
of authorization of Obligors' execution, delivery and full performance of this
Amendment, the Loan Documents and all other documents and actions required
hereunder.
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(ii) Southland Acquisition Agreement. A
copy of the fully executed Southland Acquisition Agreement and all exhibits and
schedules thereto, and all documents collateral thereto.
(iii) Appraisal. An appraisal of all
Drilling Equipment which appraisal shall be in form, content and amount
acceptable to the Bank.
(iv) Other Documents. Such other
documents as may be required to be submitted to Bank by the terms hereof or any
of the Loan Documents, or as the Bank in its discretion deems advisable.
(g) Senior Secured Term Loan. Bank shall have
received from Obligors the duly executed New Loan Agreement and all documents
collateral thereto, all of which must be in form and content satisfactory to
Bank and closing shall have been completed thereunder.
(h) Non-Waiver of Rights. By completing the
closing hereunder, or by making advances hereunder, Bank does not thereby waive
a breach of any warranty or representation made by any Obligor hereunder or any
agreement, document or instrument delivered to Bank or otherwise referred to
herein, and any claims and rights of Bank resulting from any breach or
misrepresentation by any Obligor are specifically reserved by Bank.
24. AMENDED SCHEDULES. Schedules 5.3, 5.4, 5.7, 5.14,
5.16, 5.18, 6.3, 6.4 and 6.9 to the Loan Agreement are hereby replaced with the
amended Schedules 5.3, 5.4, 5.7, 5.14, 5.16, 5.18, 6.3, 6.4 and 6.9 attached to
this Amendment.
25. CHALLENGE TO ENFORCEMENT. Obligors acknowledge and
agree that they do not have any defense, set-off, counterclaim or challenge
against the payment of any sums owing under the Loan Documents, or the
enforcement of any of the terms or conditions thereof.
26. CONFIRMATION OF COLLATERAL. Nothing contained herein
shall be deemed to be a compromise, satisfaction, accord and satisfaction,
novation or release of any of the Loan Documents, or any rights or obligations
thereunder, or a waiver by Bank of any of its rights under the Loan Documents
or at law or in equity. All liens, security interest, rights and remedies
granted to the Bank in the Loan Documents (as amended) are hereby ratified,
confirmed and continued.
27. GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
Obligors represent, warrant and covenant, as applicable, which representations,
warranties and covenants shall survive until all Bank Indebtedness and all
other obligations of Obligors to Bank are paid and satisfied in full, as
follows:
(a) All representations and warranties of
Obligors set forth in the Loan Documents, as amended hereby, except for such
representations and warranties that are by their express terms limited to a
specific prior date, are true and correct as of the date hereof and are hereby
confirmed and restated.
(b) No condition or event exists or has occurred
which would constitute an Event of Default under the Loan Documents (or would,
upon the giving of notice or the passage of time or both, constitute an event
of default).
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(c) The execution and delivery of this Amendment
by Obligors and all documents and agreements to be executed and delivered
pursuant to the terms hereof;
(i) have been duly authorized by all
requisite corporate action of Obligors;
(ii) will not violate or result in the
breach of or constitute a default (upon the passage of time, delivery of notice
or both) under any applicable statute, law, rule, regulation or ordinance or
any indenture, mortgage, loan or other document or agreement to which any
Obligor is a party or by which any of them is bound or affected; or
(iii) will not result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon any
of the property or assets of any Obligor, except liens in favor of the Bank.
(d) Obligors ratify and confirm all of their
obligations under the Loan Documents, including without limitation all
obligations of the Guarantors under their respective surety agreements in favor
of Bank which the Guarantors agree shall continue to secure all of the
Borrowers' obligations under the Loan Documents, as modified hereby and all
Bank Indebtedness.
28. INCORPORATION BY REFERENCE. (a) All of the
representations, warranties, covenants and conditions set forth in the New Loan
Agreement are hereby incorporated into this Agreement by reference with the
same effect as if they were set forth in this Agreement in their entirety. Such
representations, warranties, covenants and conditions shall be terminated and
of no further force or effect upon repayment of the Term Loan in full and
termination of the New Loan Agreement. Such termination shall not affect any
representations, warranties, covenants or conditions set forth specifically
(rather than incorporated reference) in this Loan Agreement (as amended) or any
of the Loan Documents.
(b) All representations, warranties, covenants,
restrictions and conditions set forth in the Subordinated Debt Loan Documents
are hereby incorporated by reference with the same effect as if they were set
forth in this Agreement in their entirety, provided that such representations,
warranties, covenants and conditions shall terminate upon repayment in full of
the Subordinated Term Loan.
(c) Obligors and the Bank hereby acknowledge and
agree that they have received a report entitled Phase I and Environmental
Assessment covering real property in Victoria, Texas, (the "Report"), prepared
by Southern Ecology Management, Inc. and Xxxxxx Environmental Service, Inc.
(the "Consultants") pursuant to which the Consultants describe certain matters
that may affect the environmental remediation obligations of UTI and Triad
following the closing of the Southland Acquisition. The representations and
warranties of the Obligors with respect to compliance with environmental laws
set forth in this Amendment and in the New Loan Agreement in each of such
documents are hereby qualified by the terms and content of the Report. The
Obligors represent and warrant that compliance with the terms and
recommendations in the Report will not materially and adversely affect the
business, financial condition or results of operations of the Obligors taken as
a whole.
29. NEW DEFINITIONS. Capitalized terms not otherwise
defined herein or in the Loan Agreement shall have the following meanings:
(a) "CIT" means the CIT Group/Equipment
Financing, Inc.
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(b) "Change of Control" shall mean the occurrence
of both of the following: (a) Remy Capital Partners III and its Affiliates as a
group (collectively, Remy") shall cease to be the largest beneficial owner of
the total voting power of all issued and outstanding shares of the capital
stock of UTI (or successor thereto) entitled to vote generally in the election
of directors; and (b) any Person or group (within the meaning of Rule 13d-5 as
in effect on the date hereof under the Securities Exchange Act of 1934, as
amended) shall be the beneficial owner, directly or indirectly, through a
purchase, merger, consolidation or other acquisition transaction of more than
35% of the total voting power of all issued and outstanding shares of the
capital stock of UTI (or successor thereto) entitled to vote generally in the
election of directors; provided, however, that a Person shall not be deemed to
have beneficial ownership of the shares of UTI solely by reason of one or more
of (i) the granting of a proxy or agreement to such Person to vote in a
particular manner in connection with a transaction of the type described in
clause (b), (ii) the granting of a revocable proxy to such Person in connection
with a matter to be considered by stockholders of UTI, (iii) that Person's
ownership of a right to purchase or acquire stock in connection with such
Person's purchase of stock of UTI from UTI or Remy, or (iv) by reason of the
ownership of an underwriter of shares of the capital stock of UTI in connection
with a public offering of such shares; provided, further, that, in the case of
subclauses (i), (ii) and (iii), no payment or consideration in the form of cash
or property shall have been received in connection with such grants or
purchases.
(c) "Lines of Business" means (a) the provision
of drilling or workover services, (b) the provision of other oilfield services
to Persons in the oil and gas industry, and (c) the manufacture, production,
distribution or sale of any products for use in the oil and gas industry.
(d) "New Loan Agreement" means the Loan and
Security Agreement between Obligors and Bank of even date pursuant to which the
Senior Secured Term Loan is being extended.
(e) "Note Purchase Agreement" means the Note
Purchase Agreement executed as part of the Subordinated Term Loan.
(f) "Senior Secured Term Loan" means the
$25,000,000 term loan being extended by Bank to Obligors pursuant to the New
Loan Agreement.
(g) "Southland" means Southland Drilling Company,
Ltd., a Texas limited partnership.
(h) "Southland Acquisition" means the acquisition
by Triad of substantially all of the assets of Southland in accordance with
the terms of the Southland Acquisition.
(i) Southland Acquisition Agreement" means the
Asset Purchase Agreement dated March 5, 1997 between UTI and Southland.
(j) "Subordinated Debt Loan Documents" means all
of the documents executed and delivered in connection with the Subordinated
Term Loan, including without limitation, the Note Purchase Agreement, the
Notes, the Subordination Agreement and the Warrant Agreement.
(k) "Subordinated Lenders" means collectively
Canpartners Investment IV, LLC and its permitted successors and assigns.
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(l) "Subordinated Term Loan" means the
subordinated term loan in the face amount of $25,000,000 to be extended by the
Subordinated Lenders to certain of the Obligors in accordance with the terms of
the Subordinated Debt Loan Documents, the terms of which must be acceptable to
Bank.
(m) "Subordination Agreement" means the
Subordination and Intercreditor Agreement among Obligors, the Subordinated
Lenders and Bank, in form and content acceptable to Bank.
30. ASSIGNMENT OR SALE BY BANK. Section 17.6 is hereby
amended and restated to read in its entirety as follows:
"17.6 Assignment or Sale by Bank. Bank may sell,
assign or participate all or a portion of its interest in the Loan Documents
and in connection therewith may make available to any prospective purchaser,
assignee or participant any information relative to any Obligor in its
possession, provided that there are at no time more than six (6) other
co-lenders or participants and provided further that, the amount of each
co-lender's or participant's interest in the commitments under the Line and the
original balance of their respective interests in the Senior Secured Term Loan
are not less than $5,000,000 in the aggregate at the time of assignment or
purchase."
31. INDEMNIFICATION. Obligors, jointly and severally
shall indemnify, defend and hold Bank, and its directors, agents, employees and
counsel, harmless from and against any and all losses, claims, damages,
liabilities, deficiencies, judgments, penalties, costs or expenses imposed on,
incurred by or asserted against any of them in connection with any litigation,
investigation, claim or proceeding commenced or threatened related to the
negotiation, preparation, execution, delivery, enforcement, performance or
administration of this Amendment, the Loan Agreement any other Loan Documents,
the New Loan Agreement, any documents executed in connection with the New Loan
Agreement or any undertaking or proceeding related to any of the transactions
contemplated hereby or any act, omission to act, event or transaction related
or attendant thereto, including, without limitation, anything related in any
way to any claim by CIT against Obligors or the Bank related to the
transactions contemplated hereunder or in connection with the CIT Loan
Documents, and including, without limitation, amounts paid in settlement, court
costs, and the fees and expenses of counsel except that Borrowers shall not be
required to indemnify, defend or hold harmless Bank from or against any such
loss, claim, damage, liability, deficiency, judgment, penalty or cost to the
extent that the undertaking to indemnify, pay and hold harmless set forth in
this section may be unenforceable because it violates any law or public policy,
or results from Bank's gross negligence or wilful misconduct. Borrowers shall
pay the maximum portion which it is permitted to pay under applicable law to
Bank in satisfaction of indemnified matters under this section. The foregoing
indemnity shall survive the payment of the Bank of the Bank Indebtedness and
the termination or non-renewal of this Agreement.
32. AMENDED, RESTATED AND CONSOLIDATED LOAN AGREEMENT.
Obligors agree that they will execute and deliver to Bank, an Amended,
Restarted and Consolidated Loan and Security Agreement, consistent with and
setting forth the terms of the Loan Agreement, as hereby amended and the New
Loan Agreement, together with such other collateral documents and agreements,
opinions of counsel and other related items as Bank may request within 60 days
after the date of this Amendment. Obligors agree upon request from Bank to
provide Bank with opinions of counsel in form and content acceptable to Bank
from reputable counsel licensed to practice in Ohio, Louisiana and such other
states in which any Drilling Rigs are located, confirming that the choice of
law provisions in the Loan Documents are enforceable in such states, describing
the requirements for perfection of the Bank's security interest in the Drilling
Rigs located in such states, and covering such other matters as Bank may
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reasonably require. Such opinions may be required by Bank after closing
hereunder, shall be obtained by Obligors at their cost and expense, shall be
addressed to Bank and shall be provided to Bank with reasonable promptness
after Bank's request.
33. NO WAIVER. Except as otherwise provided herein,
nothing contained and no actions taken by Bank in connection herewith shall
constitute nor shall they be deemed to be a waiver, release or amendment of or
to any rights, remedies, or privileges afforded to Bank under the Loan
Documents or under the Uniform Commercial Code. Nothing herein shall
constitute a waiver by Bank of Obligors' compliance with the terms of the Loan
Documents, nor shall anything contained herein constitute an agreement by Bank
to enter into any further amendments with Obligors.
34. INCONSISTENCIES. To the extent of any inconsistency
between the terms and conditions of this Amendment and the terms and conditions
of the other Loan Documents, the New Loan Agreement or the Subordinated Debt
Loan Documents, the terms and conditions of this Amendment shall prevail. All
terms and conditions of the Loan Documents not inconsistent herewith shall
remain in full force and effect and are hereby ratified and confirmed by
Obligors.
35. CONSTRUCTION. All references to the Loan Agreement
therein or in any other Loan Documents shall be deemed to be a reference to the
Loan Agreement as hereby amended.
36. BINDING EFFECT. This Amendment shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
37. GOVERNING LAW. This Amendment shall be governed and
construed in accordance with the laws of the Commonwealth of Pennsylvania,
without regard to any rules or principles regarding conflict of laws or any
canon of construction which interprets agreements against the draftsman.
38. SUCCESSORS AND ASSIGNS. This Amendment and all
rights and powers granted hereby will bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
39. HEADINGS. The headings of the sections of this
Amendment are inserted for shall not be deemed to constitute a part of this
Amendment.
40. LIMITATIONS AFTER DEFAULT. To the extent that any of
the covenants set forth in the Loan Agreement (as amended) permit exceptions
for any general prohibitions or requirements, such exceptions are permitted
only provided that (a) no Event of Default has occurred and is continuing, and
(b) any action taken by any Obligor which would have constituted a permitted
exception would not cause or result in an Event of Default.
41. WAIVER OF RIGHT TO TRIAL BY JURY. OBLIGORS AND BANK
WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (a) ARISING UNDER ANY OF THE LOAN DOCUMENTS, INCLUDING THIS AMENDMENT OR
(b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
OBLIGORS OR BANK WITH RESPECT TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE, OBLIGORS AND BANK AGREE AND CONSENT THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH
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ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF OBLIGORS AND BANK TO THE WAIVER
OF THEIR RIGHT TO TRIAL BY JURY. OBLIGORS ACKNOWLEDGE THAT THEY HAVE HAD THE
OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT THEY FULLY
UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND
KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
INTERNATIONAL PETROLEUM SERVICE
COMPANY
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
TRIAD DRILLING COMPANY
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
UNIVERSAL WELL SERVICES, INC.
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
USC, INCORPORATED, formerly known as
UNION SUPPLY COMPANY
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
UTI ENERGY CORP.
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
UTICO, INC.
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
FWA DRILLING COMPANY, INC.
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
[SIGNATURES CONTINUED ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
PANTHER DRILLING, INC., formerly known
as VIERSEN & XXXXXXX DRILLING
COMPANY
By: /s/ P. XXXXX XXXXXX
-------------------------------------------
P. Xxxxx Xxxxxx, Vice President
[Corporate Seal]
MELLON BANK, N.A.
By: /s/ XXXXXXX X. XXXXXXX
-------------------------------------------
Xxxxxxx X. Xxxxxxx, Asst. Vice President
[Corporate Seal]
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