Document:

Exhibit 10.1

 

FIRST AMENDMENT TO FORBEARANCE AGREEMENT
 AND
  SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT

 

This First Amendment to Forbearance Agreement and Second Amendment to Loan and Security Agreement (the “Amendment”) is entered into as of April 30, 2012, by and between SQUARE 1 BANK (the “Bank”) and LUCID, INC. (the “Borrower”).

 

RECITALS

 

Borrower and Bank are parties to that certain Loan and Security Agreement dated as of July 20, 2011 (as amended from time to time, with related documents, the “Loan Agreement”). Borrower and Bank are parties to that certain Forbearance Agreement and First Amendment to Loan and Security Agreement dated as of March 30, 2012 (as amended from time to time, the “Forbearance Agreement”). The parties desire to amend the Loan Agreement and the Forbearance Agreement in accordance with the terms of this Amendment.

 

NOW, THEREFORE, the parties agree as follows:

 

1)             Borrower hereby requests that, immediately upon effectiveness of this Amendment, the Cash Collateral Account held at Bank pursuant to Section 6.6(a) of the Loan Agreement be used to repay $500,000 in principal amount of Term Loans. Borrower hereby agrees to cause Northeast LCD Capital, LLC to take all actions requested by Bank to release the funds in the Cash Collateral Account.

 

2)             Section 3 of the Forbearance Agreement is hereby amended and restated, as follows:

 

Forbearance. Borrower acknowledges the existence of the Existing Default under the Loan Agreement. Borrower further acknowledges and agrees that Bank is not in any way agreeing to waive such Existing Default as a result of this Agreement or the performance by the parties of their respective obligations hereunder or thereunder. Subject to the conditions contained herein and performance by Borrower of all of the terms of this Agreement and the Loan Agreement after the date hereof, Bank shall, through May 7, 2012 or until such earlier date that there shall occur any further Event of Default (the “Forbearance Period”), forbear from exercising any remedies that it may have against Borrower as a result of the occurrence of the Existing Default. Such forbearance does not apply to any other Event of Default or other failure by Borrower to perform in accordance with the Loan Agreement or this Agreement. This forbearance shall not be deemed a continuing waiver or forbearance with respect to any Event of Default of a similar nature that may occur after the date of this Agreement.

 

3)             Section 6.6(a) of the Loan Agreement is hereby deleted in its entirety.

 

4)             Section 6.7 of the Loan Agreement is hereby amended and restated, as follows:

 

6.7          Financial Covenants. Borrower shall at all times maintain the following financial ratios and covenants:

 

1

 

(a)           Profitability. Tested monthly and measured on a cumulative basis beginning with the monthly reporting period ending on June 30, 2011, Borrower shall achieve a Profitability of at least the amounts shown in column B the table immediately below for the corresponding monthly reporting periods.

 

	
A
    	
 
    	
B
    	
 
    
	
Monthly Reporting Period
    	
 
    	
Cumulative Minimum Profitability
    	
 
    
	
June 2011
    	
 
    	
$
    	
(3,143,988
    	
)
    
	
July 2011
    	
 
    	
$
    	
(4,396,870
    	
)
    
	
August 2011
    	
 
    	
$
    	
(4,396,870
    	
)
    
	
September 2011
    	
 
    	
$
    	
(4,396,870
    	
)
    
	
October 2011
    	
 
    	
$
    	
(5,176,497
    	
)
    
	
November 2011
    	
 
    	
$
    	
(5,176,497
    	
)
    
	
December 2011
    	
 
    	
$
    	
(5,176,497
    	
)
    
	
January 2012
    	
 
    	
$
    	
(47,159
    	
)
    
	
February 2012
    	
 
    	
$
    	
(47,159
    	
)
    
	
March 2012
    	
 
    	
$
    	
(47,159
    	
)
    
	
April 2012
    	
 
    	
$
    	
(47,159
    	
)
    
	
May 2012
    	
 
    	
$
    	
(47,159
    	
)
    
	
June 2012
    	
 
    	
$
    	
299,744
    	
 
    
	
July 2012
    	
 
    	
$
    	
299,744
    	
 
    
	
August 2012
    	
 
    	
$
    	
299,744
    	
 
    
	
September 2012
    	
 
    	
$
    	
1,184,502
    	
 
    
	
October 2012
    	
 
    	
$
    	
1,184,502
    	
 
    
	
November 2012
    	
 
    	
$
    	
1,184,502
    	
 
    
	
December 2012
    	
 
    	
$
    	
2,673,818
    	
 
    

 

Beginning with 2012, Bank and Borrower hereby agree that, on or before December 1st of each year during the term of this Agreement, Borrower shall provide to Bank a fully-funded budget for the upcoming calendar year, and Bank shall use that budget in good faith to establish minimum Profitability amounts for the upcoming calendar year, with such maximum amounts being incorporated herein by an amendment, which shall be promptly executed by Bank and Borrower.

 

2

 

(b)           Minimum Cash. Borrower shall maintain a balance of unrestricted Cash at Bank of not less than $1,000,000 at all times.

 

5)             The following defined term in Exhibit A to the Loan Agreement is hereby amended and restated, as follows:

 

“Term Loan Maturity Date” means May 7, 2012.

 

6)             Unless otherwise defined, all initially capitalized terms in this Amendment shall be as defined in the Loan Agreement. The Loan Agreement and the Forbearance Agreement, as amended hereby, shall be and remain in full force and effect in accordance with their respective terms, and hereby are ratified and confirmed in all respects. Except as expressly set forth herein, the execution, delivery, and performance of this Amendment shall not operate as a waiver of, or as an amendment of, any right, power, or remedy of Bank under the Loan Agreement or the Forbearance Agreement, as in effect prior to the date hereof. Borrower ratifies and reaffirms the continuing effectiveness of all agreements entered into in connection with the Loan Agreement and the Forbearance Agreement.

 

7)             Borrower represents and warrants that the representations and warranties contained in the Loan Agreement and the Forbearance Agreement are true and correct in all material respects as of the date of this Amendment.

 

8)             This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one instrument.

 

9)             As a condition to the effectiveness of this Amendment, Bank shall have received, in form and substance satisfactory to Bank, the following:

 

a)             this Amendment, duly executed by Borrower;

 

b)             notification to Bank, as described in Section 2.1(b)(iii) of the Loan Agreement, requesting Bank to apply the $500,000 held in the Cash Collateral Account at Bank pursuant to Section 6.6(a) of the Agreement to the outstanding principal amount of Term Loans;

 

c)              payment of a $5,000 facility fee, which may be debited from any of Borrower’s accounts;

 

d)             payment of all Bank Expenses, including Bank’s expenses for the documentation of this Amendment and any other related documents, which may be debited from any of Borrower’s accounts; and

 

e)              such other documents and completion of such other matters, as Bank may reasonably deem necessary or appropriate.

 

[Remainder of the page intentionally left blank]

 

3

 

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first date above written.

 

 

	
 
    	
LUCID, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Karen A. Long
    
	
 
    	
Name:
    	
Karen A. Long
    
	
 
    	
Title:
    	
Controller
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
SQUARE 1 BANK
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ Basil Kushnir
    
	
 
    	
Name:
    	
Basil Kushnir
    
	
 
    	
Title:
    	
AVP — Venture Banking
    

 

[Signature Page to First Amendment to Forbearance Agreement and Second Amendment to
 Loan and Security Agreement]

 

4Exhibit 10.4

 

Helmerich & Payne, Inc.

Annual Bonus Plan for Executive Officers

 

Overview

 

Annual bonus awards are available to certain executive officers to recognize and reward desired performance.  Each year the Human Resources Committee (the “Committee”) reviews and makes any desired changes to the participants, the performance measures, and the specific financial and strategic objectives.  An executive officer’s bonus award opportunity is determined primarily by the individual’s position and level of responsibility.

 

Participation

 

The participants in the Plan are H&P’s executive management team, which includes

 

·                  Hans Helmerich

·                  John Lindsay

·                  Steve Mackey

·                  Juan Pablo Tardio

 

Bonus Award Opportunity

 

Participants are assigned target bonus awards expressed as percentages of base salary.  These bonus awards are earned when performance objectives are achieved.  The award percentages are as follows:

 

	
 
    	
 
    	
Threshold
    	
 
    	
Target
    	
 
    	
Reach
    	
 
    
	
Hans Helmerich
    	
 
    	
40
    	
%
    	
100
    	
%
    	
130
    	
%
    
	
John Lindsay
    	
 
    	
25
    	
%
    	
75
    	
%
    	
100
    	
%
    
	
Steve Mackey
    	
 
    	
25
    	
%
    	
60
    	
%
    	
100
    	
%
    
	
Juan Pablo Tardio
    	
 
    	
25
    	
%
    	
60
    	
%
    	
100
    	
%
    

 

Financial Performance Objectives

 

The financial performance objectives selected align management with shareholders.  When these objectives are met, shareholders will realize greater value in their Company ownership.  A participant’s bonus award will be based upon three disproportionately weighted financial measures being:

 

	
Financial Measure
    	
 
    	
Weighting
    	
 
    
	
Earnings Per Share
    	
 
    	
35
    	
%
    
	
Return on Invested Capital
    	
 
    	
35
    	
%
    
	
Operating EBITDA
    	
 
    	
30
    	
%
    

 

The Board of Directors, at its September quarterly meeting, annually approves an operating and capital budget for the following fiscal year.  Each financial measure is then assigned threshold, target and reach objectives based upon this approved budget.  The target objective is set according to the approved operating budget, with threshold and reach objectives adjusted 20% below and up to 50% above the target objective.  After the end of the fiscal year, actual financial results are then compared to the predetermined objectives for each of the financial measures to determine the amount of any bonus.  In the event actual financial results fall between the threshold and target or the target and reach objectives, then the bonus shall be proportionately increased as a result of the threshold or target objective being exceeded.

 

 

Strategic Performance Objectives

 

The bonus, if any, derived from the Company’s financial performance may then be adjusted by a maximum of 100% as determined by the Committee (“adjustment factor”).  Eighty percent of this adjustment factor is based upon the Committee’s subjective evaluation of the Company’s total shareholder return relative to an industry peer group.  The remaining 20% of this adjustment factor is based upon the Committee’s subjective evaluation of the Company’s goals of continued industry leading safety performance and attaining higher than industry average utilization and premium day rates.

 

Negative Discretion

 

Notwithstanding the provisions of this Annual Bonus Plan for Executive Officers, the Committee shall have the right to reduce or eliminate any bonus otherwise due under this Plan based upon its subjective determination of individual performance.

 

2

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