Exhibit 10.3
EXECUTION VERSION
FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is dated as
of June 15, 2006 (the "Amendment Closing Date") and is between GOOBER DRILLING
LLC, a Delaware limited liability company (hereinafter referred to as
"Borrower"), the Subsidiaries, if any, of Borrower from time to time signatory
hereto (each a "Guarantor" and, collectively, "Guarantors"), and LEUCADIA
NATIONAL CORPORATION, a New York corporation (hereinafter referred to as
"Lender").
RECITALS
A. In order to (i) fund new Rig equipment purchases and construction
costs and (ii) repay the Bridge Loan and other Existing Debt, Borrower and
Lender entered into that certain Loan Agreement, dated as of April 6, 2006 (as
further amended, restated, modified or supplemented from time to time, the "Loan
Agreement").
B. Pursuant to the Loan Agreement, Lender made available to Borrower a
secured credit facility consisting of up to $80,000,000 of multiple advance term
loans (the "Loan Facility").
C. Borrower desires to fund additional new Rig equipment purchases and
construction costs.
D. Borrower has requested that Lender increase the Loan Facility by
$46,000,000, such that the aggregate Loan Facility consists of up to
$126,000,000 of multiple advance term loans, the proceeds of which have been and
will be used to finance the items described in clauses A. and C. above and for
other purposes permitted under, and otherwise in accordance with and subject to
the terms of, the Loan Agreement.
E. Borrower has requested that Lender amend certain provisions of the
Loan Agreement to accommodate the above mentioned increase in the Loan Facility.
F. Borrower and Lender desire to amend the Loan Agreement on the terms
and conditions as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
AGREEMENT
ARTICLE I
DEFINITIONS
1.01 Capitalized terms used in this Amendment are defined in the Loan
Agreement, as amended hereby, unless otherwise stated.
ARTICLE II
AMENDMENTS TO LOAN AGREEMENT
2.01 AMENDMENT OF REFERENCE TO EXHIBIT A. Effective as of the Amendment
Closing Date, the reference to Exhibit A included in the Loan Agreement Table of
Contents is hereby amended and restated in its entirety to read as follows:
"A $126,000,000 Amended and Restated Promissory Note."
2.02 AMENDMENT TO SECTION 2.1. Effective as of the Amendment Closing
Date, Section 2.1 is hereby amended and restated in its entirety to read as
follows:
"2.1 LOAN. Subject to the terms and conditions of this
Agreement, Lender agrees to make one or more term loans (each,
a "TERM LOAN") to Borrower on the Closing Date and on any
Business Day thereafter prior to June 30, 2007 in an aggregate
principal amount not to exceed $126,000,000 (the Term Loans
being collectively referred to herein as the "LOAN"). The Loan
shall be evidenced by a Promissory Note in the principal
amount of up to One Hundred Twenty Six Million and No/100
Dollars ($126,000,000), substantially in the form of Exhibit
"A" attached hereto and incorporated herein by reference
(hereinafter referred to as the "PROMISSORY NOTE" or the
"NOTE"). The Loan shall be repayable on the Maturity Date and
at the dates and in the amounts set forth below:
DATE AMOUNT
June 30, 2007 $6,000,000
September 30, 2007 $6,000,000
December 31, 2007 $6,000,000
March 31, 2008 $6,000,000
June 30, 2008 $6,000,000
September 30, 2008 $6,000,000
December 31, 2008 $6,000,000
April 6, 2009 The remaining outstanding
principal balance of the Loan
Amounts repaid, or prepaid in accordance with this Section 2.1
and Section 2.3 hereof, on account of the Loan may not be
reborrowed."
2.03 AMENDMENT TO SECTION 2.3.4. Effective as of the Amendment Closing
Date, Section 2.3.4 is hereby amended and restated in its entirety to read as
follows:
"2.3.4 EXCESS CASH FLOW. Beginning with the fourth (4th)
fiscal quarter of 2006 and continuing for each fiscal quarter
thereafter, Borrower shall pay or cause to be paid to Lender,
within thirty (30) days after the end of each such fiscal
quarter, an amount equal to 100% of the Excess Cash Flow for
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such fiscal quarter; provided, however, that (i) the Excess
Cash Flow payment for the fourth (4th) fiscal quarter of 2006
shall be an amount equal to the total Excess Cash Flow for the
fiscal year ending December 31, 2006 less the Rig Construction
Reserve Amount and (ii) the Excess Cash Flow payment for the
fiscal quarter in which Borrower realizes the Debt Goal and,
to the extent applicable, the immediately following fiscal
quarter, shall be reduced on a dollar for dollar basis by the
amount, if any, of the Special Distribution to be paid with
the Monthly Excess Cash Flow attributable to the relevant
month of such fiscal quarter (it being understood that if the
Special Distribution is not made as provided in Section 6.3.8,
then Borrower shall, on the day immediately following the date
on which the Excess Cash Flow payment for the Designated
Quarter was otherwise required to be paid under this Section
2.3.4 (assuming for this purpose that the Borrower had Excess
Cash Flow for the Designated Quarter), pay to Lender an amount
equal to the sum of all amounts previously deducted from
Excess Cash Flow in accordance with this clause (ii) (i.e..,
such payment will be made on the 31st day following the end of
the Designated Quarter))."
2.04 AMENDMENT TO SECTION 5.2.2. Effective as of the Amendment Closing
Date, Section 5.2.2 is hereby amended and restated in its entirety to read as
follows:
"5.2.2 ADDITIONAL MATTERS. Lender shall have received such
additional documents and information as Lender may reasonably
request and, to the extent that any such Subsequent Advance is
to be used to (i) fund Capital Expenditures in respect of Rigs
29, 30, 32, 33, 34, 35 and/or 36, Borrower shall deliver to
Lender a duly executed copy of the Operator Contract for each
such Rig; provided, that each of the Operator Contracts for
Rigs 32, 33, 34, 35 and 36 shall have a term of at least 3
years, or (ii) payoff the Xxxx Deere Debt, Borrower shall
deliver to Lender a payoff letter (including, without
limitation, releases of all Collateral securing such Xxxx
Deere Debt and releases of the Credit Parties and the other
persons liable therefor) in respect of the Xxxx Deere Debt in
form and substance satisfactory to Lender, together with any
and all instruments authorized by the holders of the Xxxx
Deere Debt necessary to give effect to such releases."
2.05 AMENDMENT TO SECTION 6.2.2. Effective as of the Amendment Closing
Date, Section 6.2.2 is hereby amended and restated in its entirety to read as
follows:
"6.2.2 MONTHLY FINANCIAL STATEMENTS; MONTHLY COMPLIANCE
SCHEDULES. Beginning with the first full fiscal month
following the Closing Date and continuing for each fiscal
month thereafter, Borrower shall, within ten (10) days of the
end of each such fiscal month, provide Lender with (a) a
monthly reporting package in form and substance acceptable to
Lender (the "MONTHLY Report") and (b) Monthly Compliance
Schedules; provided, however, Borrower shall only be required
to provide Monthly Compliance Schedules to Lender for each
such fiscal month through the fiscal month ending June 30,
2007."
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2.06 AMENDMENT TO SECTION 6.3.3. Effective as of the Amendment Closing
Date, Section 6.3.3 is hereby amended and restated in its entirety to read as
follows:
"6.3.3 INDEBTEDNESS. Borrower and each other Credit Party
shall not incur additional Indebtedness (except (i) revolving
debt incurred under a revolving credit facility (in form and
substance reasonably acceptable to Lender) in an aggregate
principal amount not to exceed $8,000,000 or additional
amounts upon the Lender's prior written approval, (ii)
Indebtedness described on Schedule 6.3.3 hereto, (iii) capital
lease obligations in an aggregate principal amount not to
exceed $1,500,000 and (iv) purchase money Indebtedness in an
aggregate principal amount not to exceed $1,500,000) without
the prior written consent of Lender."
2.07 AMENDMENT TO SECTION 6.3.5. Effective as of the Amendment Closing
Date, Section 6.3.5 is hereby amended and restated in its entirety to read as
follows:
"6.3.5 CAPITAL EXPENDITURES. Borrower's Capital Expenditures
in respect of the construction and/or acquisition of the Rigs
listed on Schedule 6.3.5, which amounts shall be expended on
or prior to June 30, 2007, shall not exceed $167,000,000 in
the aggregate without the prior written consent of Lender.."
2.08 AMENDMENT TO SECTION 6.3.6. Effective as of the Amendment Closing
Date, Section 6.3.6 is hereby amended and restated in its entirety to read as
follows:
"6.3.6 MAINTENANCE CAPITAL EXPENDITURES. Borrower shall not
incur Capital Expenditures in excess of $3,750,000 in the
aggregate per fiscal year for maintenance of Rigs without the
prior written consent of Lender."
2.09 AMENDMENT TO SECTION 6.3.7. Effective as of the Amendment Closing
Date, Section 6.3.7 is hereby amended and restated in its entirety to read as
follows:
"6.3.7 MINIMUM EBITDA. Borrower and its Subsidiaries on a
consolidated basis shall have, for each fiscal quarter ending
on the date set forth below, EBITDA for the twelve (12) month
period then ended of not less than the following (provided,
that the minimum EBITDA amount for each of the fiscal quarters
ending June 30, 2006, September 30, 2006 and December 31, 2006
shall be a cumulative amount for the period beginning with the
fiscal month ending January 31, 2006 and concluding with the
fiscal month ending on the stated date):
------------------------------------------------------------ ---------------------------------------------------------
DATE MINIMUM EBITDA
------------------------------------------------------------ ---------------------------------------------------------
June 30, 2006 $16,500,000
------------------------------------------------------------ ---------------------------------------------------------
September 30, 2006 $31,500,000
------------------------------------------------------------ ---------------------------------------------------------
December 31, 2006 $50,000,000
------------------------------------------------------------ ---------------------------------------------------------
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------------------------------------------------------------ ---------------------------------------------------------
March 31, 2007 $66,500,000
------------------------------------------------------------ ---------------------------------------------------------
June 30, 2007 $80,500,000
------------------------------------------------------------ ---------------------------------------------------------
September 30, 2007 $91,500,000
------------------------------------------------------------ ---------------------------------------------------------
December 31, 2007 $98,000,000
------------------------------------------------------------ ---------------------------------------------------------
March 31, 2008 $96,500,000
------------------------------------------------------------ ---------------------------------------------------------
June 30, 2008 $92,000,000
------------------------------------------------------------ ---------------------------------------------------------
September 30, 2008 $86,000,000
------------------------------------------------------------ ---------------------------------------------------------
December 31, 2008 $78,000,000
------------------------------------------------------------ ---------------------------------------------------------
March 31, 2009 $71,250,000
------------------------------------------------------------ ---------------------------------------------------------
June 30, 2009 $66,750,000
------------------------------------------------------------ ---------------------------------------------------------
September 30, 2009 $61,500,000
------------------------------------------------------------ ---------------------------------------------------------
December 31, 2009 $55,500,000
------------------------------------------------------------ ---------------------------------------------------------
March 31, 2010 and the last day of each fiscal quarter $48,000,000"
occurring thereafter
------------------------------------------------------------ ---------------------------------------------------------
2.10 AMENDMENT TO SECTION 6.3.8. Effective as of the Amendment Closing
Date, Section 6.3.8 is hereby amended and restated in its entirety to read as
follows:
"6.3.8 RESTRICTED PAYMENTS. Borrower and each other Credit
Party will not make any Restricted Payments to equity holders
or otherwise without the prior written consent of Lender;
provided, however, Borrower shall be allowed to make (i)
Permitted Tax Distributions and (ii) when Borrower's total
outstanding Indebtedness is equal to or less than $40,000,000
(the "DEBT GOAL"), a one-time dividend (the "SPECIAL
DISTRIBUTION") of up to the lesser of (x) $15,000,000 and (y)
the net amount of Excess Cash Flow generated in the three
fiscal months immediately following the Borrower's realization
of the Debt Goal, which dividend shall be paid during the
period commencing on the first day following the last day of
the Fiscal Quarter in which such third fiscal month occurs
(such Fiscal Quarter, the "DESIGNATED QUARTER") and ending on
or prior to the date which is 30 days after the end of the
Designated Quarter; provided further that the Borrower shall
also pay any Excess Cash Flow payment in respect of the
Designated Quarter on such date (unless Excess Cash Flow for
such Designated Quarter is zero, in which case this second
proviso shall not apply)."
2.11 AMENDMENT OF DEFINED TERM "2007 DISTRIBUTION". Effective as of the
Amendment Closing Date, the defined term "2007 Distribution" included in Annex A
to the Loan Agreement is hereby deleted in its entirety.
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2.12 AMENDMENT OF DEFINED TERMS. Effective as of the Amendment Closing
Date, the following defined terms are hereby added to Annex A to the Loan
Agreement in appropriate alphabetical order:
""DEBT GOAL" has the meaning assigned to it in Section 6.3.8."
""DESIGNATED QUARTER" has the meaning assigned to it in
Section 6.3.8."
""MONTHLY EXCESS CASH FLOW" means the amount of Excess Cash
Flow generated in any one of the three fiscal months referred
to in Section 6.3.8."
""SPECIAL DISTRIBUTION" has the meaning assigned to it in
Section 6.3.8."
2.13 AMENDMENT OF DEFINED TERM "RIG CONSTRUCTION RESERVE AMOUNT".
Effective as of the Amendment Closing Date, the defined term "Rig Construction
Reserve Amount" included in Annex A to the Loan Agreement is hereby amended and
restated in its entirety to read as follows:
""RIG CONSTRUCTION RESERVE AMOUNT" means an amount equal to
$146,000,000 less the cumulative amount of Capital
Expenditures listed on the Monthly Compliance Schedule for the
period April 1, 2006 through December 31, 2006."
2.14 AMENDMENT OF DEFINED TERM "WORKING CAPITAL". Effective as of the
Amendment Closing Date, the defined term "Working Capital" included in Annex A
to the Loan Agreement is hereby amended and restated in its entirety to read as
follows:
""WORKING CAPITAL" means, as to any Person, for any date of
determination, the current assets (excluding cash and cash
equivalents) of such Person and its consolidated Subsidiaries
minus the current liabilities (excluding (i) the current
portion of Indebtedness for borrowed money having a maturity
of longer than one year from the date of determination and
(ii) short term Indebtedness for borrowed money) of such
Person and its consolidated Subsidiaries.
2.15 DELETION AND REPLACEMENT OF EXHIBIT A. Effective as of the
Amendment Closing Date, Exhibit A to the Loan Agreement is hereby deleted and
replaced in its entirety with Annex 1 hereto.
2.16 DELETION AND REPLACEMENT OF EXHIBIT H. Effective as of the
Amendment Closing Date, Exhibit H to the Loan Agreement is hereby deleted and
replaced in its entirety with Annex 2 hereto.
2.17 DELETION AND REPLACEMENT OF EXHIBIT I. Effective as of the
Amendment Closing Date, Exhibit I to the Loan Agreement is hereby deleted and
replaced in its entirety with Annex 3 hereto.
2.18 DELETION AND REPLACEMENT OF SCHEDULE 6.3.5. Effective as of the
Amendment Closing Date, Schedule 6.3.5 to the Loan Agreement is hereby deleted
and replaced in its entirety with Annex 4 hereto.
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ARTICLE III
CONDITIONS
3.01 CONDITIONS PRECEDENT. The effectiveness of this Amendment is
subject to the satisfaction of the following conditions precedent in a manner
satisfactory to Lender, unless specifically waived in writing by Lender:
(a) Lender shall have received this Amendment, duly executed
by Borrower and Lender, in form and substance acceptable to Lender.
(b) Lender shall have received an Amended and Restated
Promissory Note in the principal amount of $126,000,000 duly executed
by Borrower, in form and substance acceptable to Lender.
(c) After giving effect to this Amendment, the representations
and warranties contained herein, in the Loan Agreement and the other
Loan Documents, shall be true and correct in all material respects as
of the date hereof, as if made on the date hereof (except to the extent
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all
material respects on and as of such date as if made on and as of such
date).
(d) After giving effect to this Amendment, no Default or Event
of Default shall have occurred and be continuing, unless such Default
or Event of Default has been otherwise specifically waived in writing
by Lender.
(e) Lender shall have received such other documents,
instruments and agreements reasonably required by Lender to be executed
in connection with this Amendment.
(f) Lender shall have received a legal opinion from Borrower's
counsel in form and substance satisfactory to Lender which shall cover
such matters incident to the transactions contemplated by this
Amendment.
(g) Borrower shall pay Lender in full all amounts owing to
Lender in respect of Delinquent Interest Payments (as defined below).
ARTICLE IV
ACKNOWLEDGEMENT, RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
4.01 WAIVER. Lender hereby waives any Default resulting or otherwise
arising solely from Borrower's failure to make any interest payments required
under Section 2.5.3 of the Credit Agreement that were due and payable prior to
the Amendment Closing Date (collectively, "DELINQUENT INTEREST PAYMENTS").
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4.02 ACKNOWLEDGEMENT. Borrower acknowledges that, as of the Amendment
Closing Date, Lender has made $53,086,411 in aggregate principal amount of Term
Loans to Borrower, and that this Amendment is in no way intended to constitute a
novation of the obligations and liabilities of Borrower under the Loan Agreement
(as in effect prior to the Amendment Closing Date) or evidence payment of all or
any portion of the Term Loans outstanding immediately prior to the Amendment
Closing Date.
4.03 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and the other Loan Documents, and, except as
expressly modified and superseded by this Amendment, the terms and provisions of
the Loan Agreement and the other Loan Documents are ratified and confirmed and
shall continue in full force and effect. Borrower and Lender agree that the Loan
Agreement and the other Loan Documents, as amended hereby, shall continue to be
legal, valid, binding and enforceable in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and by general equitable
principles (whether enforcement is sought by proceedings in equity or at law).
4.04 REPRESENTATIONS AND WARRANTIES. Borrower hereby represents and
warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other documents executed and/or delivered in
connection herewith have been authorized by all requisite limited liability
company action on the part of Borrower and will not violate the Limited
Liability Company Agreement of Borrower; (b) the representations and warranties
contained in the Loan Agreement, as amended hereby, and any other Loan Document
are true and correct in all material respects on and as of the date hereof
(except to the extent stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects on and as of such date as if made on and as of such date); (c) after
giving effect to this Amendment, no Default or Event of Default under the Loan
Agreement, as amended hereby, has occurred and is continuing, unless such
Default or Event of Default has been specifically waived in writing by Lender;
and (d) Borrower is in full compliance with all covenants and agreements
contained in the Loan Agreement and the other Loan Documents, as amended hereby.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in the Loan Agreement or any other Loan Document, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the other
documents executed pursuant hereto.
5.02 REFERENCE TO LOAN AGREEMENT AND LOAN. Each of the Loan Agreement
and the other Loan Documents, and any and all other documents or instruments now
or hereafter executed and delivered pursuant to the terms hereof or pursuant to
the terms of the Loan Agreement, as amended hereby, are hereby amended so that
any reference in the Loan Agreement and such other Loan Documents to the Loan
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Agreement and/or the Loan shall mean a reference to the Loan Agreement and/or
the Loan, as amended hereby.
5.03 EXPENSES OF LENDER. As provided in the Loan Agreement, Borrower
agrees to pay on demand all costs and expenses incurred by Lender in connection
with the preparation, negotiation, and execution of this Amendment and the other
documents executed pursuant hereto, including, without limitation, the costs and
fees of Lender's legal counsel.
5.04 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
5.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Lender and Borrower and their respective successors and
assigns, except that Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
5.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument. Delivery of an executed counterpart of this Amendment by facsimile
transmission shall be equally effective as delivery of a manually executed
counterpart of this Amendment.
5.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Lender to or for any breach of or deviation from any covenant or condition by
Borrower shall be deemed a consent to or waiver of any other breach of the same
or any other covenant, condition or duty.
5.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
5.09 APPLICABLE LAW. This Amendment and all other documents executed in
connection herewith shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to its choice of
law provisions that would result in the application of the laws of a different
jurisdiction.
5.10 INTEGRATED AGREEMENT. This Amendment, all other documents executed
in connection herewith and the Annexes attached hereto constitute the entire
agreement between the parties hereto, and there are no other agreements,
understandings, representations or warranties regarding the Loan between the
parties.
5.11 THIRD PARTY BENEFICIARY. Nothing in this Amendment, express or
implied, is intended to confer upon any Person, other than the parties hereto
and their respective successors and assigns, any rights or remedies under or by
reason of this Amendment.
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5.12 WAIVER OF JURY TRIAL. THE PARTIES HERETO, TO THE EXTENT PERMITTED
BY LAW, WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING
ARISING OUT OF, IN CONNECTION WITH OR RELATING TO, THIS AMENDMENT, THE LOAN
AGREEMENT, THE LOAN, THE OTHER LOAN DOCUMENTS AND ANY OTHER TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. THIS WAIVER APPLIES TO ANY ACTION, SUIT OR
PROCEEDING WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE.
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IN WITNESS WHEREOF, this Amendment has been duly executed on
the date first written above.
BORROWER:
GOOBER DRILLING, LLC, a Delaware limited
liability company
By:
---------------------------------------
Xxxx Xxxxx
Its President
LENDER:
LEUCADIA NATIONAL CORPORATION, a New York
corporation
By:
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Xxxxxx X. Xxxx,
Executive Vice President and Treasurer
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