Document:

FRAC-EX10.2_2012.6.30

EXHIBIT 10.2

FIRST AMENDMENT TO CREDIT AGREEMENT

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of May 11, 2012, is made and entered into by and among JPMorgan Chase Bank, N.A. (“Bank”), Platinum Energy Solutions, Inc., a Nevada corporation (“Borrower”), and Platinum Pressure Pumping, Inc., a Delaware corporation (the “Guarantor”).

RECITALS

A.    Bank, Borrower and Guarantor are parties to that certain Credit Agreement, dated as of December 28, 2011  (the “Credit Agreement”).

B.    Bank, Borrower and Guarantor desire to amend the Credit Agreement as herein 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 hereto hereby agree as follows:

ARTICLE I
Definitions

Section 1.1    Definitions.  Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the same definitions assigned to such terms in the Credit Agreement, as amended hereby.

ARTICLE II
Amendments to the Credit Agreement

Section 2.1    Definitions.  

(a)    The definition of “EBITDA” in Section 2.1 of the Credit Agreement shall be deleted in its entirety and the following inserted in lieu thereof:

““EBITDA” means the sum of Borrower's earnings before interest expense, taxes, depreciation expense and amortization expense for the three (3) consecutive months then ending on financial statements beginning January 1, 2012 through March 31, 2012, on an annualized basis, (ii) thereafter, effective as of June 30, 2012, each period of six (6) consecutive months then ending, on an annualized basis, (iii) thereafter, effective as of September 30, 2012, each period of nine (9) consecutive months then ending, on an annualized basis, and (iv) then, effective as of December 31, 2012 and continuing thereafter, each period of twelve (12) consecutive months then ending, on a rolling four quarter basis; provided however, the following shall be added back to the extent applicable to the calculation period: (a) Non-Recurring Expenses, and (b) cash proceeds from the sale of Equity Interests (items (a), (b) and (c), the “EBITDA Add-backs”).”

(b)    The following definition of “Non-Recurring Expenses” shall be added to Section 2.1 of the Credit Agreement:

““Non-Recurring Expenses” mean (i) up to $2.6 million in non-recurring expenses incurred in the first quarter of 2012, and (ii) up to $9 million in non-cash, non-recurring expenses for potential write-offs in 2012 related to equipment deposits, as approved by Bank in its sole discretion.

Section 2.2    Leverage Ratio.  Section 4.13.A of the Credit Agreement is hereby deleted in its entirety and the following inserted in lieu thereof: 

“A.    Leverage Ratio. The Borrower shall maintain at all times a Leverage Ratio of not more than (i) 7.0 to 1.0 measured as of June 30, 2012, (ii) 4.0 to 1.0 measured as of September 30, 2012, and (iii) 3.0 to 1.0 measured quarterly thereafter beginning December 31, 2012.”

Section 2.3    Fixed Charge Coverage Ratio.  Section 4.13.B of the Credit Agreement is hereby deleted in its entirety 

and the following inserted in lieu thereof:

“B.    Minimum Fixed Charge. The Borrower shall maintain at all times a Fixed Charge Coverage Ratio of not less than (i) 1.0 to 1.0 measured as of September 30, 2012, and (ii) 1.25 to 1.0 measured quarterly thereafter beginning December 31, 2012.”

Section 2.4    Minimum Tangible Net Worth.  Section 4.13.C of the Credit Agreement is hereby deleted in its entirety and the following inserted in lieu thereof:

“C.    Minimum Average Daily Cash Position.  The Borrower shall maintain an average daily cash balance (the aggregate daily cash balances for each day during the month divided by the number of days in such month) of at least $5,000,000 for each month, beginning with the month ending May 31, 2012.”

Section 2.5    Minimum EBITDA.  Section 4.13.D of the Credit Agreement is hereby deleted in its entirety.

Section 2.6    Financial Covenants.  The second to last paragraph of Section 4.13 of the Credit Agreement is hereby deleted in its entirety and the following inserted in lieu thereof:

“If the Borrower fails to comply with any covenant contained in Section 4.13 (the “Financial Covenants”), then the Borrower shall have the right, until the expiration of the tenth day subsequent to the date on which the Compliance Certificate in respect of the applicable fiscal quarter in which such failure occurred is required to be delivered pursuant to Section 4.5, to issue Equity Interests for cash or otherwise receive cash contributions from shareholders and, in each such case, to contribute any such cash to the capital of the Borrower (collectively, the “Cure Right”, and such cash amount received by the Borrower, the “Cure Amount”). Upon the receipt by the Borrower of the Cure Amount, EBITDA shall be recalculated to add the Cure Amount, for the immediate applicable fiscal quarter in which such failure occurred and for each of the successive three fiscal quarters.”

Section 2.7    Covenant Calculations.  The EBITDA Add-backs shall be applicable to all applicable covenant calculations.  

ARTICLE III
Conditions Precedent

Section 3.1    Conditions Precedent.  The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent, unless specifically waived in writing by Bank:

(a)    The representations and warranties contained herein and in all other Loan Documents shall be true and correct as of the date hereof as if made on the date hereof;

(b)    No Default or Event of Default (other than the Disclosed Defaults) shall have occurred and be continuing; and 

(c)    All proceedings taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be reasonably satisfactory to Bank and its legal counsel.

ARTICLE IV
Ratifications, Representations, and Warranties

Section 4.1    Ratifications by Borrower.  The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and, except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement are ratified and confirmed and shall continue in full force and effect.  The Credit Agreement as amended by this Amendment shall continue to be legal, valid, binding and enforceable in accordance with its terms.

Section 4.2    Renewal and Extension of Security Interests and Liens.  Borrower hereby renews and regrants the liens and security interests created and granted in the Loan Documents.  Borrower agrees that this Amendment shall in no manner affect or impair the liens and security interests securing the Indebtedness, and that such liens and security interests shall not in any manner be waived, the purposes of this Amendment being to modify the Credit Agreement as herein provided, and to carry forward all 

liens and security interest securing same, which are acknowledged by Borrower to be valid and subsisting.

Section 4.3    Representations and Warranties.  Borrower represents and warrants to Bank as follows: (a) the execution, delivery and performance of this Amendment and any and all Loan Documents executed and/or delivered in connection herewith have been authorized by all requisite company action on the part of Borrower and will not violate the articles of organization or limited liability company agreement of Borrower or any agreement to which Borrower is a party; (b) the representations and warranties contained in the Credit Agreement as amended hereby and in each of the other Loan Documents are true and correct on and as of the date hereof as though made on and as of the date hereof; (c) no default or Event of Default (other than the Disclosed Defaults) under the Credit Agreement has occurred and is continuing; and (d) Borrower is in full compliance with all covenants and agreements contained in the Credit Agreement, as amended hereby.

ARTICLE V
Miscellaneous

Section 5.1    Survival of Representations and Warranties.  All representations and warranties made in the Credit Agreement or any other Loan Document, including without limitation, any Loan Document furnished in connection with this Amendment, shall survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Bank or any closing shall affect such representations and warranties or the right of Bank to rely thereon.

Section 5.2    Reference to Credit Agreement.  Each of the Loan Documents and the Credit Agreement and any and all other agreements, documents or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Credit Agreement shall mean a reference to the Credit Agreement as amended hereby.

Section 5.3    Expenses of Bank.  Borrower agrees to pay on demand all reasonable costs and expenses incurred by Bank directly in connection with the preparation, negotiation and execution of this Amendment and the other Loan Documents executed pursuant hereto and any and all amendments, modifications, and supplements thereto, including, without limitation, the reasonable costs and fees of Bank's legal counsel, and all costs and expenses incurred by Bank in connection with the enforcement or preservation of any rights under the Credit Agreement, as amended hereby, or any other Loan  Document, including, without limitation, the reasonable costs and fees of Bank's legal counsel.

Section 5.4    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.

Section 5.5    Governing Law.  This Amendment and the rights and duties of the parties hereto shall be governed by, and construed in accordance with, the internal laws of the State of New York without regard to principles of conflicts of laws.

Section 5.6    Successors and Assigns.  This Amendment is binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns, heirs, executors, and legal representatives, except that none of the parties hereto other than Bank may assign or transfer any of its rights or obligations hereunder without the prior written consent of Bank.

Section 5.7    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.

Section 5.8    Release.  Each of Borrower and Guarantor, for itself and for its principals, agents, employees, predecessors, successors, assigns, affiliated corporations, and other affiliated entities or persons, hereby voluntarily, knowingly, and unconditionally releases, relinquishes, and forever discharges Bank and Bank's employees, agents, representatives, consultants, attorneys, fiduciaries, officers, directors, partners, predecessors, successors, assigns, subsidiary corporations, parent corporations, and related corporate divisions (collectively, the “Released Parties”) from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages, and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, for or because of any matter or things done, omitted, or suffered to be done by any the Released Parties prior to and including the date of execution hereof, and in any way directly or indirectly arising out of or in any way connected to the Credit Agreement and Loan Documents, including, without limitation, any such claims, suits, damages, cost or liabilities arising out of or relating to a claim of breach of contract, fraud, lender liability or misconduct, breach of fiduciary duty, usury, unfair bargaining position, unconscionably, violation of law, negligence, error or omission in accounting or calculations, misappropriation of funds, tortious conduct or reckless or willful misconduct (all of the foregoing hereinafter called the “Released Matters”).

Section 5.9    Effect of Waiver.  No consent or waiver, express or implied, by Bank to or for any breach of or deviation from any covenant, condition or duty by Borrower, shall be deemed a consent to or waiver of any other breach of the same or any other covenant, condition or duty.

Section 5.10    Headings.  The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.

SECTION 5.11    ENTIRE AGREEMENT.  THIS AMENDMENT, THE LOAN AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED AND DELIVERED IN CONNECTION WITH AND PURSUANT TO THIS AMENDMENT AND THE LOAN AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this First Amendment to Credit Agreement as of the date set forth above.

	
			
	 
	Platinum Energy Solutions, Inc.

	 
	 
	 

	 
	By:
	/s/ L. Charles Moncla, Jr. 

	 
	 
	Name: L. Charles Moncla, Jr. 

	 
	 
	Title:  CEO

	
			
	 
	Platinum Pressure Pumping, Inc.

	 
	 
	 

	 
	By:
	/s/ L. Charles Moncla, Jr. 

	 
	 
	Name: L. Charles Moncla, Jr. 

	 
	 
	Title:  CEO

	
			
	 
	JPMorgan Chase Bank, N.A.

	 
	 
	 

	 
	By:
	/s/ Ed Hebert  

	 
	 
	Name: Ed Hebert

	 
	 
	Title:ex101.htm

Exhibit 10.1

 

SETTLEMENT AGREEMENT AND MUTUAL GENERAL RELEASE

 

 

This Settlement Agreement and Mutual General Release ("Agreement") is made as of the 8th day of August, 2012, by and between OXIS International, Inc., a Delaware corporation ("OXIS"), and Bristol Investment Fund, Ltd. (“Bristol”).  Each of the above named entities is herein after referred to as "the parties". The parties enter into this Agreement in recognition of the following:

 

	
  

	
A.

	
In or around October 2010 Bristol attempted to sell shares of common stock of OXIS which it was entitled to receive upon conversion of certain convertible debentures (the “Debentures”) of OXIS (the “Transaction”). Such shares were not timely delivered because OXIS had failed to pay its transfer agent and such transfer agent’s corresponding refusal to provide the shares in street name.

	
  

	
B.

	
Under the terms of the Debentures, OXIS would be liable to pay as liquidated damages $100 per day for each $1,000 of principal of the Debentures that OXIS failed to deliver during the first five days and $200 per day for each $1,000 of principal for every additional day. The total principal amount of Debentures to be converted and sold by Bristol equaled $2,058,895, which would have resulted in roughly $4,736,000 in liquidated damages being owed by OXIS.

	
  

	
C.

	
In an attempt not to burden OXIS with these costs, Bristol pursued certain claims against third parties to recover its losses while reserving its right to pursue liquidated damages against OXIS. Bristol was unsuccessful in pursuing its claims against third parties and has sent a demand letter to OXIS to recover its costs and losses.

	
  

	
D.

	
Certain disputes have arisen among the parties concerning their respective legal rights and obligations, which disputes have resulted, and are likely to continue to result, in litigation, and create the potential of future litigation if they are not resolved.

	
  

	
E.

	
Bristol had entered into an unrelated agreement with Theorem Group LLC (“Theorem”) whereby Theorem would receive one half of any settlement received by Bristol in this matter. Theorem sold its interest in any collection of the dispute to Merit Capital Limited (“Merit”).

	
  

	
F.

	
The parties, recognizing the expense, vagaries, and uncertainties of protracted litigation, have agreed to resolve their disputes, to compromise their claims, and to memorialize their respective rights, duties, responsibilities and obligations.

 

In full satisfaction of any and all disputes and claims, and in consideration of the exchange of full, general, and mutual releases, and upon the terms and conditions, the premises and promises, and the covenants stated below, the parties agree as follows:

 

  

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I.                 Undertakings of OXIS.

 

Within 10 days of the execution of this Agreement by all parties, OXIS shall pay Bristol (half of which payment would redound to Merit) a total of $1,119,778 as payment in full for the losses suffered and all costs incurred by Bristol in connection with the Transaction. Payment of such $1,119,778 shall be made as follows: OXIS shall issue restricted common stock to each of Bristol and Merit, in an amount such that each Bristol and Merit shall hold no more than 9.99% of the outstanding shares of OXIS (including any shares that each may hold as of the date of issuance). The shares so issued represent $417,475.65 of the $1,119,778 payment (27,831,710 shares at $0.015 per share, of which 9,168,750 will be retained by Bristol and 18,662,960 will be issued to Merit). The remaining balance of the payment shall be made in the form of two convertible promissory notes in the respective amounts of $422,357.75 for Bristol and $279,944.60 for Merit (collectively, the “Notes”) with a maturity of December 1, 2017 having an 8% annual interest rate, with interest only accruing until January 1, 2013, and then level payments of $3,750 each beginning January 1, 2013 until paid in full on December 1, 2017. In the event a default in the monthly payments on the Notes has occurred and is continuing each holder of the Notes shall be permitted to convert the unpaid principal and interest of the Notes into shares of OXIS at $.01 cents per share.  In the absence of such continuing default no conversion of the Notes will be permitted. OXIS will have the right to repay the Notes in full at any time without penalty. The form of each Note is attached as Exhibits A and B hereto.

 

II.                 General Releases

A.           Bristol hereby releases and forever discharges OXIS from "any and all claims" it may have against OXIS, from the beginning of time to and including the effective date of this Agreement arising out of the Transaction.

B.           The term "any and all claims" as used in subparagraph A above, means and includes, but is not limited to, all claims of any kind, whether known or unknown, in law or in equity, anticipated or unanticipated, past or present, contingent or fixed, matured or inchoate, as of the effective date of this Agreement

III.                 Representations and Warranties

The parties to this Agreement covenant, represent, warrant, and agree as follows:

A.           The parties and each of them hereby acknowledge that they have been represented by counsel of their choice throughout the negotiations which resulted in the drafting, review and execution of this Agreement. The parties each acknowledge that it has executed this Agreement voluntarily, without coercion or duress of any kind, and upon the advice of counsel.

  

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B.           The parties have read this Agreement and understand its contents.

C.           The parties have made such investigation of the facts pertaining to this Agreement, and of all the terms thereof and matters pertaining thereto, as they have deemed necessary.

D.           Each party to this Agreement has cooperated in the drafting and preparation of this Agreement. Hence, in any construction to be made of this Agreement, it shall not be construed against any party on the basis of authorship.

E.           All signatories to this Agreement represent that they are duly authorized and have the full power and authority to enter into this Agreement.

F.           Each of the parties to this Agreement represents and warrants that it has not sold, pledged, assigned, impaired or otherwise transferred to any third party any interest in any claim it may have against another party to this Agreement which is being released under this Agreement, and each agrees to indemnify and hold the other harmless from any liability, including actual costs of defense, resulting from having assigned or transferred such interest to a third party.

G.           All representations, warranties and rights hereunder, shall be binding upon and inure to the benefit of their respective successors and assigns.

H.           Bristol represents that as of the date of this Agreement they own 6,727,500 shares of OXIS.. Bristol further represents that it will acquire the restricted shares delivered under this Agreement for investment and not for resale except in accordance with applicable Federal and state securities laws.

IV.                 Nature of the Agreement

The terms of this Agreement are contractual and not mere recitals. This Agreement may be amended only by a written instrument executed by all of the parties to this Agreement or their respective successors. In addition, the headings that are used herein are for the convenience of the Parties and do not form any part of the contractual terms of this Agreement.

V.                 Costs Attendant to Settlement

Each party to this Agreement shall bear its respective costs with respect to the negotiation, drafting, execution, and performance of this Agreement and all acts required to be undertaken by the terms thereof.

  

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VI.                 Third Party Beneficiaries of this Agreement

 

To the extent that this Agreement inures to the benefit of persons or entities not named parties or signatories hereto, this Agreement is hereby declared to be made for their respective benefits and shall be directly enforceable by each of them.

VII.                 Additional Acts

The parties shall execute and deliver all documents and perform all further acts that may be reasonably necessary and useful to effectuate the purposes and provisions of this Agreement.

VIII.                 Severability

In the event any provision of this Agreement is finally held to be void or otherwise unenforceable by the highest court of competent jurisdiction to address the matter, all remaining provisions shall remain in full force and effect.

IX.                 Inconsistent Acts

The parties to this Agreement agree to forbear and refrain from doing any act or exercising any right, whether existing now or in the future, which act or exercise is inconsistent with this Agreement.

X.                 Modification or Revocation

This Agreement may not be modified or revoked except by a written instrument executed by all of the parties to this Agreement.

XI.                 Entire Agreements and Counterparts

This Agreement contains the entire agreement and understandings between the parties. There are no prior or contemporaneous oral agreements or undertakings, nor any other written agreements between the parties. This Agreement may be executed and delivered in counterparts by facsimile transmission or otherwise, each of which shall be deemed an original.

  

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XII.                 Governing Law.

All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof.  Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by the Agreement (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”).  Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith (including with respect to the enforcement hereof), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement.  If any party shall commence an action or proceeding to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

XIII.                 Notices

Any and all notices permitted or required pursuant to the terms of this Agreement shall be in writing and shall be transmitted via prepaid United States mail, sent certified mail, return receipt requested, addressed as follows:

A. As to OXIS, any and all such notices shall be addressed to:

David Saloff

President and CEO

OXIS International, Inc.

468 N. Camden Drive, 2nd Floor

Beverly Hills, CA 90212

  

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B. As to Bristol, any and all such notices shall be addressed to:

Bristol Investment Fund, Ltd.

c/o Bristol Capital Advisors, LLC

10960 Wilshire Boulevard, Suite 1050

Los Angeles, California 90024

Attention: Amy Wang, Esq,

Any said notice shall be effective upon receipt. Any change in the above persons or addresses to which notices under this Agreement are to be sent shall be accomplished by,

and effective immediately upon, the service of notice of such change upon the other party hereto in accordance with the terms hereof.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement, on the date first appearing above.

OXIS INTERNATIONAL, INC.

By:__________________________________

President

 

BRISTOL INVESTMENT FUND, LTD.

 

By:______________________________

Title:

6

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