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Exhibit 10.2
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement, dated as
of December 19, 1997 (this "AGREEMENT"), is by and between GRANT GEOPHYSICAL,
INC., a Delaware corporation (herein called the "BORROWER"), and XXXXXXX
ASSOCIATES, L.P., a Delaware limited partnership (herein called the "LENDER").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to that certain Loan
and Security Agreement dated as of October 1, 1997 (as amended and modified from
time to time, the "SECURED LOAN AGREEMENT"; capitalized terms used but not
otherwise defined herein shall have the meanings as set forth in the Secured
Loan Agreement); and
WHEREAS, the Borrower and the Lender desire to amend the
Secured Loan Agreement to (i) create a $15,800,000 term loan facility, the
proceeds of which will be used to fund a cash tender offer for all the
outstanding shares of common stock of Solid State Geophysical, Inc. not held by
Borrower or any Affiliate and (ii) modify certain terms and conditions of the
Secured Loan Agreement with respect to the creation of such term loan facility;
NOW, THEREFORE, in consideration of the foregoing recitals,
the actions contemplated therein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. AMENDMENTS TO SECURED LOAN AGREEMENT
On the date this Agreement becomes effective, after
satisfaction by the Borrower of each of the conditions set forth in Section 4
hereof:
1.1 THE DEFINITION OF "LIABILITIES" AND SUBSECTIONS 2.4, 4.2,
7.4, 10.5, 10.9, 10.14 AND 10.18 of the Secured Loan Agreement hereby are
amended by (i) replacing each reference in such subsections to "Revolving
Loan(s)" to "Loan(s)" and (ii) replacing each reference in such subsections to
"Revolving Note(s)" to Note(s)."
1.2 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
amended by adding a new definition of "DEBT OFFERING" to such subsection as
follows:
"DEBT OFFERING" shall mean any issuance by Borrower, whether
public or private, of debt securities, excluding borrowings by Borrower
under commercial bank or similar facilities or debt securities issued
to Lender or any Affiliate thereof.
1.3 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
amended by adding a new definition of "LOANS" to such subsection as follows:
"LOANS" shall mean, collectively, the Revolving Loans and the
Term Loan.
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1.4 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by adding a new definition of "NOTES" to such subsection as
follows:
"NOTES" means, collectively, the Revolving Notes and the Term
Note.
1.5 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by adding a new definition of "TERM LOAN" to such subsection as
follows:
"TERM LOAN" has the meaning set forth in SECTION 2.8.
1.6 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by adding a new definition of "TERM NOTE" to such subsection as
follows:
"TERM NOTE" has the meaning set forth in SECTION 2.8.
1.7 SUBSECTION 1.1 of the Secured Loan Agreement hereby is
further amended by deleting the reference to "$5,000,000" in the definition of
"TOTAL FACILITY" and replacing it with "$20,800,000".
1.8 SUBSECTION 2.2(A) of the Secured Loan Agreement hereby is
amended by deleting such subsection in its entirety and replacing it as follows:
(A) OPTIONAL PREPAYMENTS. Borrower may prepay the Loans
without premium or penalty in whole or in part, provided that (i)
Borrower shall give Lender not less than one (1) Business Day's prior
notice thereof, specifying the Loans to be prepaid and the date and
amount of prepayments, (ii) each partial prepayment shall be made in a
principal amount of $25,000 or an integral multiple thereof, (iii)
prepayments on the Term Loan will be applied to the outstanding
principal amount of the Term Loan in the inverse order of maturity,
until reduced to zero and (iv) if such prepayment prepays all Revolving
Loans in full and is accompanied by the termination in whole of all
Revolving Loans or if such prepayment prepays the Term Loan in full,
Borrower shall pay Lender accrued interest on such Loans to the date of
prepayment. Amounts repaid on Revolving Loans pursuant to this
SUBSECTION 2.2(A) may be reborrowed subject to SUBSECTION 2.1.
1.9 SUBSECTION 2.2(B) of the Secured Loan Agreement hereby is
amended by deleting such subsection in its entirety and replacing it as follows:
(B) MANDATORY PREPAYMENTS:
(i) EXCESS CASH FLOW. Borrower agrees to automatically make an
Excess Cash Flow Payment, if any, by 1:00 p.m. on October 3, 1997 and
by 1:00 p.m. on every Friday thereafter (if any such Friday is not a
Business Day then any payment required to be made on such day shall be
made by 1:00 p.m. on the preceding Thursday). Any Excess Cash Flow
Payments shall be applied to reduce the principal amount of the
Revolving
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Loans then outstanding; PROVIDED, HOWEVER, that if the amount of any
Excess Cash Flow Payment exceeds the principal amount of the Revolving
Loans then outstanding, such excess will be applied to reduce the Term
Loan in the inverse order of maturity, until reduced to zero; PROVIDED,
FURTHER, HOWEVER, that if the amount of any Excess Cash Flow Payment
exceeds the principal amount of the Revolving Loans then outstanding
and the principal amount of the Term Loan then outstanding, such excess
plus any interest and fees then owing to Lender shall be deducted from
such Excess Cash Flow Payment. Amounts repaid pursuant to this
SUBSECTION 2.2(B)(I) (to the extent such amounts prepay Revolving
Loans) may be reborrowed subject to SUBSECTION 2.1.
(ii) FOREIGN EXCESS CASH FLOW. In the event of the occurrence
and continuation of an Event of Default, Lender may require Borrower to
make one or more Foreign Excess Cash Flow Payments on such date or
dates as Lender shall determine. Any Foreign Excess Cash Flow Payment
shall be applied to reduce the principal amount of the Revolving Loans
then outstanding, until reduced to zero and then to the Term Loan in
the inverse order of maturity, until reduced to zero. Amounts repaid
pursuant to this SUBSECTION 2.2(B)(II) (to the extent such amounts
prepay Revolving Loans) shall reduce the Maximum Revolving Facility by
such amounts and may not be reborrowed.
(iii) DEBT OFFERING PROCEEDS. Upon Borrower's receipt of
proceeds from any Debt Offering, Borrower agrees to pay to Lender from
such proceeds an amount equal to the outstanding amount of the Term
Loan. Amounts repaid pursuant to this SUBSECTION 2.2(B)(III) may not be
reborrowed.
1.10 SECTION 2 of the Secured Loan Agreement hereby is amended
by adding a new Subsection 2.8 to such section as follows:
2.8 TERM LOAN. Subject to the provisions of SECTION 4 below,
on December 17, Lender will make a term loan to Borrower (the "TERM
LOAN") in the original principal amount of $15,800,000. The Liabilities
in connection with the Term Loan will be evidenced by and payable in
accordance with the terms of a promissory note (the "TERM NOTE") made
in favor of Lender, dated as of December 17, 1997, and in the form of
EXHIBIT G. The Term Loan is payable in full on the Maturity Date.
Notwithstanding anything in the Term Note or this Agreement to the
contrary, the Liabilities in connection with the Term Loan become
immediately due and payable as provided in SUBSECTION 9.1 and, without
notice or demand, upon termination of this Agreement under SUBSECTION
2.6. No portion of the Term Loan that has been repaid may be
reborrowed.
1.11 SECTION 7.9 of the Secured Loan Agreement hereby is
amended by deleting such subsection in its entirety and replacing it as follows:
7.9 USE OF PROCEEDS. Borrower shall use the proceeds of the
Revolving Loans for general working capital purposes. Borrower shall
use the proceeds of the Term Loan solely to fund a cash tender offer by
a subsidiary of Borrower for all of the outstanding
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shares of common stock of Solid State Geophysical, Inc. not held by
Borrower or any Affiliate thereof and to cover the costs and expenses
incurred in connection with such cash tender offer.
SECTION 2. AMENDMENT TO RELATED DOCUMENTS
2.1 AMENDMENT TO EXHIBITS. On the date this Agreement becomes
effective, EXHIBIT 1 hereto will be added as Exhibit G to the Secured Loan
Agreement.
2.2 AMENDMENT AND REAFFIRMATION OF GUARANTY. On the date this
Agreement becomes effective, each Guaranty and Security Agreement dated as of
the Closing Date (the "GUARANTIES"), and made by each Subsidiary in favor of
Lender will be reaffirmed pursuant to the First Consent and Reaffirmation of
Guaranty and Security Agreement executed by each Subsidiary in favor of the
Lender substantially in the form of EXHIBIT 2 hereto (the "REAFFIRMATION OF
GUARANTIES").
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make
all future Loans under the Secured Loan Agreement, as amended hereby, the
Borrower represents and warrants to the Lender that:
(a) DUE AUTHORIZATION, ETC. The execution, delivery
and performance by the Borrower of this Agreement is within
its corporate powers, have been duly authorized by all
necessary corporate action (including, without limitation,
shareholder approval), have received all necessary consents
and governmental approval (if any shall be required), and does
not and will not contravene or conflict with any requirement
of law or contractual obligation binding upon such entity.
This Agreement and the Term Note (as defined below) are the
legal, valid and binding obligations of the Borrower and the
Reaffirmation of Guaranties are the legal, valid and binding
obligation of each Subsidiary a party thereto, enforceable
against the Borrower and each Subsidiary, respectively, in
accordance with their respective terms.
(b) CERTAIN AGREEMENTS. On the date hereof, all
representations and warranties of the Borrower set forth in
the Secured Loan Agreement and the Financing Agreements are
true and correct in all material respects, without any waiver
or modification thereof and no default of any party exists
under any Financing Agreement.
SECTION 4. CONDITIONS TO EFFECTIVENESS
The obligation of the Lender to make the amendments
contemplated by this Agreement and the effectiveness thereof, are subject to the
following:
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(a) NO DEFAULT. As of the date hereof, no Default or
Event of Default under the Secured Loan Agreement has occurred
and is continuing or will result from the amendments set forth
herein.
(b) REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Borrower contained in
this Agreement and the Secured Loan Agreement, as amended
hereby, and the Financing Agreements, as amended hereby, shall
be true and correct as of the date hereof.
(c) DOCUMENTS. The Lender shall have received all of
the following, each duly executed and dated the date hereof
(or such earlier date as shall be satisfactory to the Lender)
in form and substance satisfactory to the Lender:
(i) FIRST AMENDMENT. This Agreement.
(ii) TERM NOTE. The Term Note dated as of
the date of this Amendment (the "TERM NOTE"), made by
Borrower in favor of Lender in the original principal
amount of $15,800,000, substantially in the form of
EXHIBIT 1 hereto.
(iii) REAFFIRMATION OF GUARANTIES. The First
Reaffirmation of Guaranty from each Subsidiary,
substantially in the form of EXHIBIT 2 hereto.
(iv) SECRETARY'S CERTIFICATE. A certificate
of the Secretary of the Borrower as to (i) no
amendments or modifications to the Borrower's
Certificate of Incorporation or By-Laws since October
1, 1997 and (ii) resolutions of the Board of
Directors of the Borrower authorizing or ratifying
the execution, delivery and
performance of this Agreement.
(v) CONSENTS, ETC. Certified copies of all
documents evidencing any necessary corporate action,
consents and governmental approvals (if any) with
respect to this Agreement or any other document
provided for hereunder.
(vi) OTHER. Such other documents as Borrower
may reasonably request.
SECTION 5. MISCELLANEOUS
5.1 CAPTIONS. The recitals to this Agreement (except for
definitions) and the section captions used in this Agreement are for convenience
only, and shall not affect the construction of this Agreement.
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5.2 GOVERNING LAW; SEVERABILITY. THIS AGREEMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES. WHEREVER POSSIBLE EACH PROVISION OF THIS
AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER
APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT SHALL BE PROHIBITED BY OR
INVALID UNDER SUCH LAW, SUCH PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF
SUCH PROHIBITION OR INVALIDITY, WITHOUT INVALIDATING THE REMAINDER OF SUCH
PROVISION OR THE REMAINING PROVISIONS OF THIS AGREEMENT.
5.3 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Agreement.
5.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Borrower and the Lender and their respective successors and assigns,
and shall inure to the sole benefit of the Borrower and the Lender and the
successors and assigns of the Borrower and the Lender. The Borrower shall have
no right to assign its rights or delegate its duties under this Agreement.
5.5 REFERENCES. From and after the date hereof, each reference
in the Secured Loan Agreement or any other Financing Agreement to "this
Agreement," "hereunder," "hereof," "herein," or words of like import, and each
reference in the Secured Loan Agreement or any other Financing Agreement to
another Financing Agreement to the Secured Loan Agreement or to any term,
condition or provision contained "thereunder," "thereof," "therein," or words of
like import, shall mean and be a reference to the Secured Loan Agreement or such
other Financing Agreement, as applicable (or such term, condition or provision,
as applicable), as amended, supplemented or otherwise modified by this Agreement
and the Reaffirmation of Guaranties, as applicable.
5.6 CONTINUED EFFECTIVENESS. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do not
serve to effect a novation as to the Secured Loan Agreement, any Revolving Note,
the Guaranies or any of the Financing Agreements provided to furnish security
therefor. The parties hereto expressly do not intend to extinguish the Secured
Loan Agreement, any Revolving Note, the Guaranties or any Financing Agreement.
Instead, it is the express intention of the parties hereto to reaffirm the
indebtedness created under the Secured Loan Agreement, which is evidenced by the
Revolving Note and reaffirm that such indebtedness is secured by the various
Financing Agreements. The Secured Loan Agreement, as amended hereby, the
Revolving Note, and all other Financing Agreements, as amended, remain in full
force and effect.
5.7 COSTS, EXPENSES AND TAXES. The Borrower affirms and
acknowledges that SUBSECTION 10.3 of the Secured Loan Agreement applies to this
Agreement and the transactions and agreements and documents contemplated
hereunder.
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Delivered at New York, New York, as of the day and year first
above written.
GRANT GEOPHYSICAL, INC., a Delaware
corporation
By: /s/ Xxxxx X. Xxxxx, Xx.
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Name: Xxxxx X. Xxxxx, Xx.
Title: President and Chief Executive Officer
XXXXXXX ASSOCIATES, L.P., a Delaware
limited partnership
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: General Partner
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