Execution Copy
AMENDMENT, CONSENT AND WAIVER
TO
SUBORDINATED NOTE RESTRUCTURING AGREEMENT
Amendment, Consent and Waiver (this "Amendment"), dated as of March
29, 2002, to the Subordinated Note Restructuring Agreement, dated as of December
28, 2000 (as amended to the date hereof, the "Restructuring Agreement"), among
Boots & Xxxxx International Well Control Inc., a Delaware corporation, (the
"Company") and The Prudential Insurance Company of America ("Prudential").
Capitalized terms used herein but not defined herein are used as defined in the
Restructuring Agreement.
W i t n e s s e t h:
Whereas, the Company and Prudential are party to the Restructuring
Agreement pursuant to which Prudential agreed to cancel and terminate certain
11.28% Notes and the Warrant in consideration for the Company's fulfillment of
its obligations set forth in the Restructuring Agreement and the issuance by the
Company of Replacement Notes, the Replacement Warrant, the New Warrant, and the
Preferred Stock;
Whereas, the Company has notified Prudential that the Company may not
be in compliance with certain financial covenants under Sections 7.1(a) and
7.1(b) of the Restructuring Agreement (collectively, the "Specified Covenants")
for the twelve month period ended March 31, 2002 (the "Specified Period"), which
would constitute Events of Default pursuant to Section 8.1(xviii) of the
Restructuring Agreement if not waived or deemed cured as provided therein (such
Events of Default, the "Prospective Events of Default");
Whereas, the Company entered into an Account Transfer and Purchase
Agreement dated as of June 18, 2001 with KBK Financial, Inc. ("KBK") under which
KBK financed certain of the Company's accounts receivables and the Company
granted to KBK a security interest in certain of the Company's assets, in breach
of Sections 7.3 (a) and 7.3(b) of the Restructuring Agreement;
Whereas, the Company has requested that Prudential (a) waive the
Prospective Events of Default and compliance with the Specified Covenants for
the Specified Period, effective as of the date hereof and (b) amend Sections
1.2, 7.3(a), 7.3(b) and 11 of the Restructuring Agreement as set forth herein;
and
Whereas, Prudential agrees, subject to the limitations and conditions
set forth herein, to (a) waive the Prospective Events of Default and compliance
with the Specified Covenants for the Specified Period and (b) amend the
Restructuring Agreement as set forth herein.
Now, Therefore, in consideration of the premises and the covenants and
obligations contained herein the parties hereto agree as follows:
SECTION 1. CONSENT AND WAIVER
(a) Effective as of the date hereof, subject to the satisfaction (or
due waiver) of the conditions set forth in Section 3 (Conditions to the
Continued Effectiveness of this Amendment) hereof, Prudential hereby waives the
following:
(i) the Prospective Events of Default; provided, however, that
the waiver set forth in this clause (i) shall not excuse any failure to comply
after the date hereof with the Restructuring Agreement as amended hereby; and
(ii) compliance for the Specified Period with the Specified
Covenants.
SECTION 2. AMENDMENTS TO THE RESTRUCTURING AGREEMENT
The Restructuring Agreement is, effective as of the date hereof and subject
to the satisfaction (or due waiver) of the conditions set forth in Section 3
(Conditions to the Continued Effectiveness of this Amendment) hereof, hereby
amended as follows:
(a) AMENDMENTS TO SECTION 1 (CASH PAYMENTS)
(i) Section 1.2 (Credit Facility Payment) of the Restructuring
Agreement is hereby amended by inserting the following text at the end thereof:
"; provided, that if the Company incurs any Indebtedness after
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December 28, 2000 under the Existing Credit Facility, the Company shall pay a
one-time $100,000 fee in immediately available funds (the "FEE") to you by wire
transfer to the account specified above on the earlier to occur of May 15, 2002;
or the closing of $1,500,000 in aggregate principal amount of such Indebtedness;
and provided, further, that if the Company is required to pay the Fee and such
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Fee is paid to you, the Credit Facility Payment shall be reduced to $400,000."
(b) AMENDMENTS TO SECTION 7 (NEGATIVE COVENANTS)
(i) Section 7.3(a) (Liens) of the Restructuring Agreement is
hereby amended by deleting the "and" at the end of clause (iv) thereof,
replacing the period at the end of clause (v) thereof with the text "; and" and
inserting a new clause (vi) at the end thereof to read in its entirety as
follows:
"(vi) Liens relating to accounts sold pursuant to the KBK Agreement."
(ii) Clause (ii) of Section 7.3(b) (Limitations on Indebtedness)
of the Restructuring Agreement is hereby amended and restated in its entirety to
read as follows:
"(ii) Senior Debt owing pursuant to the New Senior Credit Facility or
the Existing Senior Credit Facility; provided, that as a condition to (A) the
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Company's execution and delivery of the New Senior Credit Facility $1,000,000
principal amount outstanding under the Existing Credit Facility shall be
converted to Series H Stock and (B) the Company incurring additional
Indebtedness after December 28, 2000 in excess of $1,500,000 in principal amount
under the Existing Credit Facility, $250,000 principal amount outstanding under
the Existing Credit Facility shall be converted to Series H Stock; and (C) the
Company incurring additional Indebtedness after December 28, 2000 in excess of
$2,000,000 principal amount under the Existing Credit Facility, an additional
$750,000 principal amount outstanding under the Existing Credit Facility shall
be converted to Series H Stock; and provided, further, that the principal amount
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of Indebtedness owing pursuant thereto shall not be in excess of $6,000,000,
(which Senior Debt may be incurred whether or not the Company is in compliance
with the tests pursuant to Section 7.1 up to and through September 30, 2001),
and the senior guaranty obligations of the Company's Subsidiaries with respect
thereto;"
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(iii) Section 7.3(b) (Limitations on Indebtedness) of the
Restructuring Agreement is hereby amended by deleting the "and" at the end of
clause (vi) thereof, replacing the period at the end of clause (vii) thereof
with the text "; and" and inserting a new clause (viii) at the end thereof to
read in its entirety as follows:
"(viii) Indebtedness incurred pursuant to the KBK Agreement up to an
aggregate outstanding principal amount of $5,000,000."
(c) AMENDMENTS TO SECTION 11 (DEFINITIONS)
The following definitions are hereby inserted in Section 11.1 of the
Restructuring Agreement in the appropriate place to preserve the alphabetical
order of the definitions in such section:
"FEE" shall have the meaning specified in Section 1.2.
"KBK AGREEMENT" means the Account Transfer and Purchase Agreement
dated as of June 18, 2001, between KBK Financial, Inc. and the Company.
SECTION 3. CONDITIONS TO THE CONTINUED EFFECTIVENESS OF THIS AMENDMENT
This Amendment shall be effective as of the date hereof, provided that each
of the following conditions shall have been satisfied by the Company on or
before the date specified below (the "Termination Date") or duly waived by
Prudential:
(a) on or before April 30, 2002;
(i) Certain Documents. Prudential shall have received each of the
following, each dated on or before the Termination Date (unless otherwise agreed
by Prudential), in form and substance satisfactory to Prudential:
(ii) this Amendment, duly executed by the Company and each
domestic subsidiary of the Company, with the exception of ITS Supply
Corporation, (collectively, the "Domestic Subsidiaries");
(iii) a subordinated note in the aggregate principal amount of
$67,627.07 from the Company, in form and substance acceptable to Prudential, for
the payment of certain outstanding legal fees which the Company is required to
pay to Prudential pursuant to the Restructuring Agreement;
(iv) a certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of each officer of the
Company who has been authorized to execute and deliver this Amendment or other
document required hereunder to be executed and delivered by or on behalf of the
Company; and
(v) such additional documentation as Prudential may reasonably
require and;
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(b) on or before the earlier of May 15, 2002, or the closing of
additional Indebtedness after December 28, 2000, in aggregate principal amount
of $1,500,000 under the Existing Credit Facility, Prudential shall have received
the amount of $18,333 payable by wire transfer to Prudential in immediately
available funds for the reimbursement of certain fees and expenses incurred by
Prudential in connection with the Restructuring Agreement
(c) Corporate and Other Proceedings. All corporate and other
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Amendment shall be
satisfactory in all respects to Prudential;
(d) Representations and Warranties. Each of the representations and
warranties contained in Article IV (Representations and Warranties) of the
Restructuring Agreement, the other Note Documents or in any certificate,
document or financial or other statement furnished at any time under or in
connection therewith are true and correct in all material respects on and as of
the date hereof and the Termination Date, in each case as if made on and as of
such date and except to the extent that such representations and warranties
specifically relate to a specific date, in which case such representations and
warranties shall be true and correct in all material respects as of such
specific date; provided, however, that references therein to the "Agreement"
shall be deemed to refer to the Restructuring Agreement as amended by this
Amendment and after giving effect to the consents and waivers set forth herein;
(e) No Default or Event of Default. After giving effect to this
Amendment, no Default or Event of Default (except for those that may have been
duly waived) shall have occurred and be continuing, either on the date hereof or
on the Termination Date;
(f) No Litigation. No litigation shall have been commenced against any
Transaction Party, either on the date hereof or the Termination Date, seeking to
restraint or enjoin (whether temporarily, preliminarily or permanently) the
performance of any action by any Transaction Party required or contemplated by
this Amendment or the Restructuring Agreement or any Note Document, in either
case as amended hereby; and
(g) Fees and Expenses Paid. The Company shall have paid all
Obligations due, after giving effect to this Amendment, on or before the
Termination Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
On and as of the date hereof, after giving effect to this Amendment, the
Company hereby represents and warrants to Prudential as follows:
(a) this Amendment has been duly authorized, executed and delivered by
the Company and each Domestic Subsidiary of the Company and constitutes a legal,
valid and binding obligation of the Company and each Domestic Subsidiary of the
Company, enforceable against the Company and each Domestic Subsidiary of the
Company in accordance with its terms and the Restructuring Agreement as amended
by this Amendment and constitutes the legal, valid and binding obligation of the
Company and each Domestic Subsidiary of the Company, enforceable against the
Company and each Domestic Subsidiary of the Company in accordance with its
terms;
(b) each of the representations and warranties contained in Article IX
(Representations, Covenants and Warranties) of the Restructuring Agreement, the
other Note Documents or in any certificate, document or financial or other
statement furnished at any time under or in connection therewith are true and
correct in all material respects on and as of the date hereof, in each case as
if made on and as of such date and except to the extent that such
representations and warranties specifically relate to a specific date, in which
case such representations and warranties shall be true and correct in all
material respects as of such specific date; provided, however, that references
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therein to the "Agreement" shall be deemed to refer to the Restructuring
Agreement as amended hereby and after giving effect to the consents and waivers
set forth herein;
(c) no Default or Event of Default has occurred and is continuing
(except for those that are duly waived); and
(d) no litigation has been commenced against any Transaction Party
seeking to restraint or enjoin (whether temporarily, preliminarily or
permanently) the performance of any action by any Transaction Party required or
contemplated by this Amendment, the Restructuring Agreement or any Note
Document, in each case as amended hereby (if applicable).
SECTION 5. RELEASE
In further consideration for Prudential's execution of this Agreement, the
Company and each other Transaction Party hereby release Prudential and its
respective Affiliates, officers, employees, directors, agents and advisors
(collectively, the "Releasees") from any and all claims, demands, liabilities,
responsibilities, disputes, causes of action (whether at law or equity) and
obligations of any nature whatsoever, whether liquidated or unliquidated, known
or unknown, matured or unmatured, fixed or contingent that any of the
Transaction Parties may have against any Releasee and that arise from or relate
to the Obligations, any Note Document or any document, dealing or other matter
in connection with any of the Note Documents, and any third party liable in
whole or in part for any of the Obligations, in each case to the extent arising
(a) on or prior to the date hereof or the Termination Date or (b) out of, or
relating to, actions, dealings or other matters occurring on or prior the date
hereof or the Termination Date (including, without limitation, any actions or
inactions of any Releasee prior to the date hereof or the Termination Date).
SECTION 6. REFERENCE TO THE EFFECT ON THE NOTE DOCUMENTS
(a) As of the date hereof, each reference in the Restructuring
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like
import, and each reference in the other Note Documents to the Restructuring
Agreement (including, without limitation, by means of words like "thereunder",
"thereof" and words of like import), shall mean and be a reference to the
Restructuring Agreement as amended hereby, and this Amendment and the
Restructuring Agreement shall be read together and construed as a single
instrument. Each of the table of contents and lists of Exhibits and Schedules of
the Restructuring Agreement shall be amended to reflect the changes made in this
Amendment as of the date hereof.
(b) Except as expressly amended hereby or specifically waived above,
all of the terms and provisions of the Restructuring Agreement and all other
Note Documents are and shall remain in full force and effect and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of Prudential under any of the Note Documents, nor constitute a
waiver or amendment of any other provision of any of the Note Documents or for
any purpose except as expressly set forth herein.
(d) This Amendment is a Note Document.
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SECTION 7. CONSENT OF DOMESTIC SUBSIDIARIES
Each Domestic Subsidiary of the Company hereby consents to this
Amendment and agrees that the terms hereof shall not affect in any way its
obligations and liabilities under the Note Documents (as amended and otherwise
expressly modified hereby), all of which obligations and liabilities shall
remain in full force and effect and each of which is hereby reaffirmed (as
amended and otherwise expressly modified hereby).
SECTION 8. EXECUTION IN COUNTERPARTS
This Amendment may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed counterpart by
telecopy shall be effective as delivery of a manually executed counterpart of
this Amendment.
SECTION 9. GOVERNING LAW
This Amendment shall be governed by and construed in accordance with
the law of the State of New York.
SECTION 10. SECTION TITLES
The section titles contained in this Amendment are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto, except when used to reference a
section. Any reference to the number of a clause, sub-clause or subsection of
any Note Document immediately followed by a reference in parenthesis to the
title of the section of such Note Document containing such clause, sub-clause or
subsection is a reference to such clause, sub-clause or subsection and not to
the entire section; provided, however, that, in case of direct conflict between
the reference to the title and the reference to the number of such section, the
reference to the title shall govern absent manifest error. If any reference to
the number of a section (but not to any clause, sub-clause or subsection
thereof) of any Note Document is followed immediately by a reference in
parenthesis to the title of a section of any Note Document, the title reference
shall govern in case of direct conflict absent manifest error.
SECTION 11. NOTICES
All communications and notices hereunder shall be given as provided in
the Restructuring Agreement or, as the case may be, the Subordinated Guaranty
Agreement.
SECTION 12. SEVERABILITY
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The fact that any term or provision of this Agreement is held invalid,
illegal or unenforceable as to any person in any situation in any jurisdiction
shall not affect the validity, enforceability or legality of the remaining terms
or provisions hereof or the validity, enforceability or legality of such
offending term or provision in any other situation or jurisdiction or as applied
to any person
SECTION 13. SUCCESSORS
The terms of this Amendment shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and assigns.
SECTION 14. WAIVER OF JURY TRIAL
Each of the parties hereto irrevocably waives trial by jury in any action
or proceeding with respect to this Amendment or any other Note Document.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers and general partners thereunto duly
authorized, effective as of the date first written above.
Boots & Xxxxx International Well Control, Inc.,
By:
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Name:
Title:
The Prudential Insurance Company of America,
By:
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Name:
Title:
Acknowledged and Agreed to effective the 29th day
of March 2002 by:
Domestic Subsidiaries:
Abasco, Inc.
By:
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Name:
Title:
Boots & Xxxxx Special Services, Inc.
By:
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Name:
Title:
Elmagco, Inc.
By:
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Name:
Title:
Hell Fighters, Inc.
By:
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Name:
Title:
[Signature Page to amendment, Consent and Waiver to Restructuring Agreement]
IWC Engineering, Inc.
By:
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Name:
Title:
IWC Services, Inc.
By:
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Name:
Title:
[Signature Page to amendment, Consent and Waiver to Restructuring Agreement]
