FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT
EXHIBIT
10.17
FIRST
AMENDMENT TO CREDIT AND SECURITY AGREEMENT
THIS
FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (this "Amendment"),
dated
as of May 11, 2006, is made by and between IWC
SERVICES, LLC,
a Texas
limited liability company ("Borrower")
and
XXXXX
FARGO BANK,
National Association ("Lender"),
acting through its XXXXX
FARGO BUSINESS CREDIT
operating division.
RECITALS
Borrower,
Boots & Xxxxx International Well Control, Inc. ("BNC")
and
Lender are parties to the Credit and Security Agreement dated as of March 3,
2006 (the "Credit
Agreement").
Borrower
has requested that certain amendments and waivers be made to the Credit
Agreement, which Lender is willing to make pursuant to the terms and conditions
set forth herein.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:
1. Consent
to Assignment of Certain Intellectual Property Rights. As
of the Effective Date,
Lender consents to HWCES' execution and delivery of the Assignment, identical
in
form and content to Exhibit A attached hereto (the "HWCES
Assignment"),
notwithstanding any limitation in the Credit Agreement regarding a Credit
Party's disposition of assets (including, without limitation, any notification
requirement or other restriction under Sections
6.1(m)
or
6.17
of the
Credit Agreement). To the extent that Lender's lien securing the Obligations
now
encumbers the Intellectual Property Rights to be transferred pursuant to the
HWCES Assignment, Lender agrees that its lien and security interest shall be
released there from as of the Effective Date.
2. Amendment
to Section 6.8 of the Credit Agreement. As
of the Effective Date,
Section
6.8
of the
Credit Agreement shall be amended and restated, in its entirety, to read as
follows:
Salaries.
BNC and
Borrower will not, and will not permit any other Credit Party to, pay excessive
or unreasonable salaries, bonuses, royalties, license fees, commissions,
consultant fees or other compensation; or increase the salary, bonus,
commissions, consultant fees or other compensation of any Director, Officer
or
consultant, or any member of their respective families, either individually
or
for all such Persons in the aggregate, if such increase would have or could
be
reasonably expected to have a Material Adverse Effect.
3. Amendment
to Article V of the Credit Agreement. As
of the Effective Date,
Section
5.24
shall be
added to the end of Article
V
of the
Credit Agreement to read as follows:
Section
5.24 Houseboat.
The
boat
owned by IWC Services, as successor by merger to HWC, registered under Louisiana
Registration Number LA-7368-FJ (the "Houseboat"),
has
not constituted or qualified as a "vessel" under the United States Ship Mortgage
Act. Further, the Houseboat has not been subject to the jurisdiction of the
United States Surface Transportation Board. No filing other than the filing
of
Lender's financing statement against IWC Services with the Secretary of State
of
the State of Texas is necessary for Lender have a valid and perfected security
interest in the Houseboat.
4. Amendment
to Article VI of the Credit Agreement. As
of the Effective Date,
Section 6.30 shall be added to the end of Article
VI
of the
Credit Agreement to read as follows:
Section
6.30 Houseboat.
BNC and
Borrower may not, and will not permit any of the Credit Parties to, cause the
Houseboat to constitute or qualify as a "vessel" under the United States Ship
Mortgage Act or to become subject to the jurisdiction of the United States
Surface Transportation Board.
5. Amendment
to Post-Closing Agreement. As
of the Effective Date,
the table on Exhibit A to the Post-Closing Agreement shall be amended and
restated, in its entirety, as follows:
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Requirement
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Delivery
Date
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Deliver
to Lender evidence of the satisfaction, and release of all presently
effective judgments and Liens encumbering BNC's and its Domestic
Subsidiary's assets (other than those Liens in favor of Lender) and
deliver to Lender new judgment and lien search reports from the
appropriate jurisdictions for BNC and each of its Domestic Subsidiaries
reflecting the satisfaction and release of those judgments and Liens.
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May
31, 2006
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Deliver
to Lender an access and lien waiver agreement from the lessor of
the
mobile trailers located at BNC's Houston, Texas headquarters whereby
the
lessor agrees to waive all liens against the contents of the trailers
and
permit Lender to retrieve the contents following the repossession
of the
trailers or the termination of the applicable rental agreement.
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May
18, 2006
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Deliver
to Lender (i) an original of the certificate evidencing 65.1% of
all
issued and outstanding Equity Interests in HWC Limited C.A. and reflecting
HWC Limited as the owner of such Equity Interests along with the
appropriate transfer powers duly executed in blank and (ii) transfer
powers duly executed in blank in connection with the pledge of 65%
of all
issued and outstanding Equity Interests in Boots & Xxxxx Services de
Mexico S. de X.X. de C.V. by Boots & Xxxxx Services, Inc. and IWC
Services, LLC, the two owners of such Equity Interests.
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May
18, 2006
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6. No
Other Changes. Except
as explicitly
amended by this Amendment, all of the terms and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and
effect.
7. Conditions
Precedent. This
Amendment shall be
effective when Lender shall have received an executed original hereof, together
with each of the following, each in substance and form acceptable to Lender
in
its sole discretion (the date on which these conditions are satisfied shall
be
the "Effective Date"):
(a) Originals
of the Acknowledgment and Agreement of Guarantors and the Acknowledgment and
Agreement of Subordinated Creditor set forth at the end of this Amendment,
duly
executed by each Guarantor and the Subordinated Creditor.
(b) Such
other matters as Lender may require in its Permitted Discretion.
8. Representations
and Warranties. Borrower hereby represents
and
warrants to Lender as follows:
(a) Borrower
and each Guarantor have all requisite power and authority to execute this
Amendment and the Acknowledgement and Agreement of Guarantors, as applicable
and
to perform all of their obligations under this Amendment and the Acknowledgement
and Agreement of Guarantors, and this Amendment and the Acknowledgement and
Agreement of Guarantors have been duly executed and delivered by Borrower and
the Guarantors, as applicable, and constitute the legal, valid and binding
obligations of such parties, enforceable in accordance with their respective
terms.
(b) The
execution, delivery and performance by Borrower and Guarantors of this Amendment
and the Acknowledgement and Agreement of Guarantors have been duly authorized
by
all necessary action and do not (i) require any authorization, consent or
approval by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) violate any provision of any law,
rule or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to Borrower or any Guarantor, or any governing
document of Borrower or any Guarantor, or (iii) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement, lease or instrument to which Borrower or any Guarantor is
a
party or by which it or its properties may be bound or
affected.
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(c) The
Intellectual Property Rights to be transferred pursuant to me HWCES Assignment
are not necessary for the conduct of Borrower's or any other Credit Party's
business operations, and no Material Adverse Effect will occur after giving
effect to the HWCES Assignment.
(d) All
of
the representations and warranties contained in Article V of the Credit
Agreement are correct on and as of the date hereof as though made on and as
of
such, date, except to the extent that such representations and warranties relate
solely to an earlier date.
9. References. All
references in the
Credit Agreement to "this Agreement" shall be deemed to refer to the Credit
Agreement as amended hereby; and any and all references in the Security
Documents to the Credit Agreement shall be deemed to refer to the Credit
Agreement as amended hereby.
10.
No
Other Waiver. Except
as set forth in
Section 1 hereof, the execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default
or
Event of Default under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by Lender, whether
or
not known to Lender and whether or not existing on the date of this
Amendment.
11.
Release. BORROWER,
AND EACH
GUARANTOR BY SIGNING THE ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS SET FORTH
BELOW, EACH HEREBY ABSOLUTELY AND UNCONDITIONALLY RELEASES AND FOREVER
DISCHARGES LENDER, AND ANY AND ALL PARTICIPANTS, PARENT CORPORATIONS, SUBSIDIARY
CORPORATIONS, AFFILIATED CORPORATIONS, INSURERS, INDEMNITORS, SUCCESSORS AND
ASSIGNS THEREOF, TOGETHER WITH ALL OF THE PRESENT AND FORMER DIRECTORS,
OFFICERS, ATTORNEYS, AGENTS AND EMPLOYEES OF ANY OF THE FOREGOING, FROM ANY
AND
ALL CLAIMS, DEMANDS OR CAUSES OF ACTION OF ANY KIND, NATURE OR DESCRIPTION,
WHETHER ARISING IN LAW OR EQUITY OR UPON CONTRACT OR TORT OR UNDER ANY STATE
OR
FEDERAL LAW OR OTHERWISE, WHICH BORROWER OR SUCH GUARANTOR HAS HAD, NOW HAS
OR
HAS MADE CLAIM TO HAVE AGAINST ANY SUCH PERSON FOR OR BY REASON OF ANY ACT,
OMISSION, MATTER, CAUSE OR THING WHATSOEVER ARISING FROM THE BEGINNING OF TIME
TO AND INCLUDING THE EFFECTIVE DATE, WHETHER SUCH CLAIMS, DEMANDS AND CAUSES
OF
ACTION ARE MATURED OR UNMATURED OR KNOWN OR UNKNOWN, INCLUDING,
WITHOUT LIMITATION, ALL CLAIMS, DEMANDS OR CAUSES OF ACTION ARISING IN WHOLE
OR
PART FROM THE NEGLIGENCE OR STRICT LIABLITY OF LENDER OR ANY OTHER RELEASED
PARTY.
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12.
Severability. If
any term or provision
of this Amendment is adjudicated to be invalid under applicable laws or
regulations, such provision shall be inapplicable to the extent of such
invalidity without affecting the validity or enforceability of the remainder
of
this Amendment which shall be given effect so far as possible.
13.
Binding
Effect. This
Amendment shall be
binding upon and inure to the benefit of Borrower and Lender and their
respective successors and assigns, except that Borrower shall not have the
right
to assign any rights thereunder or any interest therein without Lender's prior
written consent.
15.
Costs
and Expenses. Borrower
hereby reaffirms
its agreement under the Credit Agreement to pay or reimburse Lender on demand
for all costs and expenses incurred by Lender in connection with the Loan
Documents, including without limitation all reasonable fees and disbursements
of
legal counsel. Without limiting the generality of the foregoing, Borrower
specifically agrees to pay all fees and disbursements of counsel to Lender
for
the services performed by such counsel in connection with the preparation of
this Amendment and the documents and instruments incidental hereto. Borrower
hereby agrees that Lender may, at any time or from time to time in its sole
discretion and without further authorization by Borrower, make a loan to
Borrower under the Credit Agreement, or apply the proceeds of any loan, for
the
purpose of paying any such fees, disbursements, costs and expenses.
16.
Miscellaneous. This
Amendment, the
Acknowledgment and Agreement of Guarantors and the Acknowledgment and Agreement
of Subordinated Creditor (i) may be executed in any number of counterparts,
each
of which when so executed and delivered shall be deemed an original and all
of
which counterparts, taken together, shall constitute one and the same instrument
and (ii) AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES, AND THERE ARE
NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. Capitalized terms used in
this Amendment and the Acknowledgments attached hereto have the meanings given
to them in the Credit Agreement unless otherwise specified. This Amendment
shall
be governed and construed in accordance with the laws of the State of
Texas.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed
as of the date first written above to be effective as of the Effective
Date.
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IWC
SERVICES, LLC, a Texas limited liability
company
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By:
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/s/ Xxxxxx Xxxxxxx | |
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Name:
Xxxxxx Xxxxxxx
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Title:
Vice President
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XXXXX
FARGO BANK, NATIONAL ASSOCIATION,
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acting
through its Xxxxx Fargo Business Credit operating
division
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By:
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/s/ Xxxx X Xxxx | |
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Name:
Xxxx X. Xxxx
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Title:
Vice President
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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed
as of the date first written above to be effective as of the Effective
Date.
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IWC
SERVICES, LLC, a Texas limited liability
company
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By:
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/s/ Xxxxx Xxxxxxxxxx | |
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Name:
Xxxxx Xxxxxxxxxx
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Title:
President and CEO
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XXXXX
FARGO BANK, NATIONAL ASSOCIATION
acting
through its Xxxxx Fargo
Business Credit operating division
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By:
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/s/ Xxxx X. Xxxx | |
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Name:
Xxxx X. Xxxx
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Title:
Vice President
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ACKNOWLEDGMENT
AND AGREEMENT OF GUARANTORS
Each
undersigned, each a guarantor of the indebtedness and other obligations of
Borrower
to Lender pursuant to a separate Guaranty each dated as of March 3, 2006
(each a
"Guaranty"),
hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents
to the
terms
(including without limitation the release set forth in Section
8
of the
Amendment) and execution
thereof; (iii) reaffirms its obligations to Lender pursuant to the terms
of its
Guaranty; and (iv) acknowledges that Lender may amend, restate, extend, renew
or
otherwise modify the Credit Agreement and any indebtedness or agreement of
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the liability of the undersigned under its Guaranty
for
all of Borrower's present and future indebtedness and otter obligations to
Lender.
BOOTS
& XXXXX INTERNATIONAL WELL CONTROL, INC.
BOOTS
& XXXXX SERVICES, INC.
BOOTS
& XXXXX SPECIAL SERVICES, INC.
ELMAGCO,
INC.
HELL
FIGHTERS, INC.
HWC
LIMITED
IWC
ENGINEERING, INC.
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By:
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/s/Xxxxxx
Xxxxxxx
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Name:
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Xxxxxx
Xxxxxxx
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Title:
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Senior
Vice President and Chief Financial Officer of Boots & Xxxxx and Boots
& Xxxxx International Well Control, Inc. Vice President of each other
entity above
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ACKNOWLEDGMENT
AND AGREEMENT OF SUBORDINATED CREDITORS
The
undersigned, a subordinated creditor of BNC pursuant to each Senior Subordinated
Promissory Note, hereby (i) acknowledges receipt of the foregoing Amendment;
(ii) consents to the
terms
and execution thereof; (iii) reaffirms the terms of each Senior Subordinated
Promissory
Note; and (iv) acknowledges that Lender may amend, restate, extend, renew
or
otherwise
modify the Loan Documents and any indebtedness or agreement of Borrower or
enter
into any agreement or extend additional or other credit accommodations (in
each
case subject to any
limitations set forth in the respective Senior Subordinated Promissory Note),
without notifying
or obtaining the consent of the undersigned except as may be expressly required
under the
terms
of each Senior Subordinated Promissory Note.
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OIL
STATES ENERGY SERVICES, INC.
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(formerly
known as HWC Energy Services, Inc.)
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By:
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/s/ Xxxxx X. Xxxxx | ||
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Name:
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Xxxxx
X. Xxxxx
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Title:
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Vice
President and Assistant Secretary
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Exhibit:
A to First Amendment to Credit and Security Agreement
ASSIGNMENT
WHEREAS,
HWCES International, a Cayman Islands corporation (hereinafter "ASSIGNOR"),
is
the
owner of the right, title and interest in certain United States patents
(hereinafter "Patents") and is the
owner
of the right, title and interest in certain Canadian patent applications
(hereinafter "Applications"),
which Patents and Applications are listed in Schedule
A
attached
hereto;
WHEREAS,
Oil States Energy Services, Inc., a Delaware corporation formerly known as
HWC
Energy Services, Inc., having a business address of c/o Oil States
International, Inc, Three Xxxxx Center, 000
Xxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (hereinafter "ASSIGNEE"), and ASSIGNOR
previously
entered into that certain Assignment dated as of February 28, 2006 (the "Initial
Assignment"),
pursuant to which ASSIGNOR assigned to ASSIGNEE the entire right, title and
interest in
and to
certain United States and Canadian patents and patent applications listed
in a
schedule thereto;
WHEREAS,
ASSIGNOR and ASSIGNEE intended for the Patents and the Applications to
have
been
assigned from ASSIGNOR to ASSIGNEE pursuant to the terms of the Initial
Assignment;
WHEREAS,
the Patents and the Applications were inadvertently excluded from the schedule
of assigned patents and patent applications attached to the Initial
Assignment;
WHEREAS,
ASSIGNOR and ASSIGNEE now desire to evidence their agreement that all
right,
title and interest in and to the Patents and Applications, and in and to
the
inventions disclosed therein
(the "Inventions"), be assigned to ASSIGNEE;
NOW,
THEREFORE, for and in consideration of One Dollar ($1.00) each and for other
good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by ASSIGNOR
and ASSIGNEE, effective as of the 28th day of February, 2006,
ASSIGNOR has assigned, sold,
transferred and set over and by these presents does assign, sell transfer
and
set over unto said ASSIGNEE
the entire right, title and interest in and to (a) said Inventions and worldwide
rights therein; (b)
said
Applications, including all divisions, continuations and substitutions thereof;
and (c) all Patents,
including United States and Canadian patents which shall have issued on said
Inventions, including
all reissues, renewals and extensions thereof, for the United States, its
territories and possessions
and all foreign countries, including the right to file corresponding
applications for Letters Patent
on
said Inventions in any and all foreign countries, and to claim priority under
any and all treaties
and conventions to which the United States of America and Canada are signatories
including the Paris Convention for the Protection of Industrial Property
for
such corresponding applications, or any
division, continuation or substitution thereof, the same to be held and enjoyed
by said ASSIGNEE, its
assigns and successors, as fully and entirely as the same would have been
held
and enjoyed by ASSIGNOR,
had this assignment not been made.
ASSIGNOR
hereby authorizes and requests that all Letters Patent based on said
Applications and each division, continuation, substitution, reissue, renewal
and
extension thereof be issued to said ASSIGNEE,
its successors and assigns.
The
terms
and conditions of this Assignment shall inure to the benefit of ASSIGNEE,
its
successors,
assigns and other legal representatives, and shall be binding upon ASSIGNOR,
its
successor,
assigns and other legal representatives.
[Signature
page follows]
IN
WITNESS WHEREOF, this Assignment has been duly executed on the date as indicated
below.
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ASSIGNOR:
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HWCES
INTERNATIONAL
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By:
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/s/ Xxx X. Xxxx | ||
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Name:
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Xxx X. Xxxx | ||
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Title:
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President | ||
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Date:
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June
27th, 0000
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XXXXX
XX XXXXX
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§
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§
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XXXXXX
XX XXXXXX
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§
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Xx
the
above date, the above named person acting in the capacity of President
of
HWCES
International,
appeared before me, and known by me to be the same person described in and
who
executed
the foregoing instrument, and acknowledged that he executed the same, of
his own
free will and
with
the authority and for the purposes set forth.
| /s/ Xxxxxxxx X. Xxxx | ||||
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Notary
Public in and for
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THE
STATE OF TEXAS
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ASSIGNEE:
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OIL
STATES ENERGY SERVICES, INC.
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By:
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/s/ Xxxxx X. Xxxxx | |||
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Name:
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Xxxxx
X. Xxxxx
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Title:
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Vice
President and Assistant Secretary
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Date:
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May
12,
2006
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STATE
OF TEXAS
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§
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§
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COUNTY
OF XXXXXX
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§
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On
the
above date, the above named person acting in the capacity of Vice President
and
Assistant
Secretary of Oil States Energy Services, Inc., personally appeared before
me,
and known by me
to be
the same person described in and who executed the foregoing instrument, and
acknowledged that he executed the same, of his own free will and with the
authority and for the purposes set forth.
| /s/ Xxxxx Xxxxxx | |
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Notary
Public in and for
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THE
STATE OF TEXAS
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SCHEDULE
A
CANADIAN
PATENT APPLICATIONS
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Application
No.
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Filing
Date
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Title
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2,512,128
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July
14, 2005
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High
Pressure Threaded Union With Metal-To-Metal Seal, And Metal
Ring Gasket For Same
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2,512,263
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July
15, 2005
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Cup
Tool For A High Pressure Mandrel And Method Of Using Same
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2,512,264
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July
15, 2005
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Slip
Spool Assembly And Method Of Using Same
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U.S.
PATENTS
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Patent
No.
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Issue
Date
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Title
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5,012,865
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May
7, 1991
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Annular
and Concentric Flow Wellhead Isolation Tool
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5,261,487
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November
16, 1993
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Packoff
Nipple
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5,285,852
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February
15, 1994
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Wellhead
Isolation Tool and Method of Use Thereof
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5,396,956
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March
14, 1995
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Wellhead
Isolation Tool Sealing Nipple Testing Apparatus And Method of
Pressure
Testing Isolation Tool
Sealing Nipple Seals When in Position On A Well
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