EXECUTION COPY
FIFTH AMENDMENT, CONSENT AND WAIVER
UNDER
SUBORDINATED NOTE RESTRUCTURING AGREEMENT
FIFTH AMENDMENT, CONSENT AND WAIVER (this "Fifth Amendment"), dated as
of August 13, 2004, to the Subordinated Note Restructuring Agreement, dated as
of December 28, 2000 (as amended, including by this Fifth Amendment, the
"Restructuring Agreement") among Boots & Xxxxx International Well Control Inc.,
a Delaware corporation, (the "Company") and The Prudential Insurance Company of
America ("Prudential"), as amended by the Amendment, Consent and Waiver dated as
of March 29, 2002, the Second Amendment, Consent and Waiver dated as of June 29,
2002, the Third Amendment, Consent and Waiver dated as of July 1, 2003 and the
Fourth Amendment, Consent and Waiver dated as of November 14, 2003, each among
the Company and Prudential (collectively, the "Prior Amendments"). Capitalized
terms used herein but not defined herein are used as defined in the
Restructuring Agreement.
WITNESSETH:
WHEREAS, the Company and Prudential are parties to the Restructuring
Agreement pursuant to which Prudential agreed to cancel and terminate certain
11.28% Notes and the Original 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 failed to make cash dividend payments on certain
shares of the Company's Series E Cumulative Senior Preferred Stock and Series G
Cumulative Convertible Preferred Stock in the amounts and for the period set
forth on Schedule A hereto (the "Dividend Amount"), which failures constitute
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Events of Default pursuant to Section 8.1(vi) of the Restructuring Agreement if
not waived or deemed cured as provided therein (the "Dividend Payments
Default");
WHEREAS, the Company has requested that Prudential waive the Dividend
Payments Default, subject to the satisfaction of the conditions set forth in
Section 4 (Conditions to the Effectiveness of This Fifth Amendment);
WHEREAS, the aggregate principal amount outstanding under the Notes as
of the date of this Fifth Amendment (the "Old Notes") is $9,635,042;
WHEREAS, the Company and Prudential desire to cancel and terminate the
Old Notes subject to the satisfaction of the conditions set fourth in Section 4
(Conditions to the Effectiveness of This Fifth Amendment), including, but not
limited to, the issuance to Prudential of the Amended and Restated Note (as
defined below);
WHEREAS, the Company desires and Prudential agrees, subject to the
limitations and conditions set forth herein, (a) to waive the Dividend Payments
Default and (b) amend the Restructuring Agreement as set forth herein; and
WHEREAS, the Company desires and Prudential agrees to convert the
Dividend Amount, the Warrants and its outstanding Series E Stock into shares of
the Company's common stock as provided in that certain Exchange Agreement, dated
as of the date hereof by and between the Company and Prudential (the "Exchange
Agreement").
NOW, THEREFORE, in consideration of the premises and the covenants and
obligations contained herein the parties hereto agree as follows:
SECTION 1. WAIVER AND CONSENT
Effective as of the Fifth Amendment Effective Date (as defined below),
Prudential hereby waives the Dividend Payments Default; provided, however, that
the waiver set forth in this Section 1 shall not excuse any failure to comply
after the date hereof under the Restructuring Agreement.
SECTION 2. AMENDED AND RESTATED NOTE
(a) The Company will authorize the amendment and restatement of
the Old Note by an amended and restated senior subordinated Note in the
aggregate principal amount of $9,635,042 in the form of Exhibit A hereto (the
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"Amended and Restated Note"), to be dated July 1, 2004 which shall mature in
twenty two (22) consecutive installments, each of which shall be in the amount
set forth below opposite such installment:
Installment Principal Amount
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August 13, 2004 $ 2,000,000
December 15, 2004 $ 1,635,042
March 31, 2005 $ 300,000
June 30, 2005 $ 300,000
September 30, 2005 $ 300,000
December 31, 2005 $ 300,000
March 31, 2006 $ 300,000
June 30, 2006 $ 300,000
September 30, 2006 $ 300,000
December 31, 2006 $ 300,000
March 31, 2007 $ 300,000
June 30, 2007 $ 300,000
September 30, 2007 $ 300,000
December 31, 2007 $ 300,000
March 31, 2008 $ 300,000
June 30, 2008 $ 300,000
September 30, 2008 $ 300,000
December 31, 2008 $ 300,000
March 31, 2009 $ 300,000
June 30, 2009 $ 300,000
September 30, 2009 $ 300,000
December 31, 2009 $ 300,000
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Installment Principal Amount
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(b) The Amended and Restated Note shall bear interest (computed
on the basis of a 360-day year comprised of twelve 30-day month) (i) on the
unpaid balance thereof at the rate of twelve percent (12.0%) per annum from July
1, 2004, payable (A) quarterly on the last business day of September, December,
March and June in each year, commencing with September 30, 2004, (B) upon the
maturity of any portion of the principal amount thereof as listed on clause (a)
of this Section 2 and (C) if not previously paid in full, on demand from and
after the time the outstanding principal thereunder becomes due and payable
(whether by acceleration or otherwise) and (ii) so long as an Event of Default
is continuing, on the unpaid balance thereof, and any overdue payment of
interest, payable quarterly as aforesaid (or, at the option of the registered
holder thereof, on demand), at a rate per annum from time to time equal to the
lesser of (A) the maximum rate permitted by applicable law or (B) the greater of
(x) 2% above the rate of interest publicly approved by The Bank of New York as
its prime rate or (y) fourteen percent (14.0%).
SECTION 3. AMENDMENTS TO THE RESTRUCTURING AGREEMENT
The Restructuring Agreement is, effective as of the Fifth
Amendment Effective Date, hereby amended as follows:
(a) Section 1.2 (Credit Facility Payment) is deleted in its
entirety.
(b) Section 3.5 (Mandatory Prepayment) is deleted in its entirety.
(c) Section 5.1 (Optional Prepayment of Notes) is amended by
inserting at the end of such section the words "The amount of each principal
prepayment of the Notes shall be applied to reduce the then remaining
installments of the Notes in a reverse order of maturity of such outstanding
installments.".
(d) Section 7.1(a) (Total Debt to EBITDA) is deleted in its
entirety and replaced by inserting a new Section 7.1(a), to read in its entirety
as follows:
"(a) TOTAL DEBT TO EBITDA RATIO. The ratio of Total Debt to
EBITDA, measured on a calendar quarter-end basis for the twelve month period
ending on the last day of each calendar quarter, commencing with the calendar
quarter ending on September 30, 2004, to be greater than 3.0 to 1.0."
(e) Section 7.1(b) (EBITDA to Consolidated Interest Expense) is
deleted in its entirety and replaced by inserting a new Section 7.1(b), to read
in its entirety as follows:
"(b) EBITDA TO CONSOLIDATED INTEREST EXPENSE. The ratio of EBITDA
to Consolidated Interest Expense, measured on a calendar quarter-end basis for
the twelve month period ending on the last day of each calendar quarter, to be
less than (i) commencing with the calendar quarter ending on September 30, 2004
and ending with the calendar quarter ending on
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March 31, 2005, 2.0 to 1.0. and (ii) commencing with the calendar quarter ending
on June 30, 2005 and thereafter, 3.0 to 1.0;"
(f) Section 7.3(b)(ii) (Limitation on Indebtedness) is deleted in
its entirety and replaced by inserting a new Section 7.1(b)(ii), to read in its
entirety as follows:
"(ii) Senior Debt owing pursuant to the New Senior Credit Facility,
provided that the principal amount of Indebtedness owing pursuant thereto shall
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not be at any time in excess of $3,000,000;".
(g) A new Section 7.1(d) is inserted immediately after Section
7.1(c) (Year-to-date EBITDA Levels), to read in its entirety as follows:
"(d) MINIMUM EBITDA. Permit EBITDA measured on a calendar
quarter-end basis for the twelve month period ending on the last day of each
calendar quarter, to be less than (i) commencing with the calendar quarter
ending September 30, 2004 and ending with the calendar quarter ending March 31,
2005, $2,750,000 and (ii) commencing with the calendar quarter ending June 30,
2005 and thereafter $3,000,000.
(h) Section 11 (Definitions) is amended by inserting the
definitions of "Fifth Amendment," "Fifth Amendment Effective Date," and "Amended
and Restated Note," each in its appropriate alphabetical order and each to read
in its entirety as follows:
"FIFTH AMENDMENT" shall mean the Fifth Amendment, Consent and Waiver,
dated as of August 13, 2004, between the Company and Prudential.
"FIFTH AMENDMENT EFFECTIVE DATE" shall have the meaning ascribed to
such term in the Fifth Amendment.
"AMENDED AND RESTATED NOTE" have the meaning ascribed to such term in
the Fifth Amendment.
"NOTE" shall mean each senior subordinated note delivered pursuant to
any provision of this Restructuring Agreement, the Credit Facility Note, each
PIK Note, the Amended and Restated Note and each senior subordinated note
delivered in substitution or exchange for any other Note pursuant to any such
provision.
(i) The definition of the term "Restricted Payment" in Section 11
is amended by inserting immediately after the words "paid-in-kind dividends" in
clause (b) of the proviso thereto the words "or dividends payable in common
stock".
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SECTION 4. CONDITIONS TO THE EFFECTIVENESS OF THIS FIFTH AMENDMENT
This Fifth Amendment shall be effective as of the date hereof,
provided that each of the following conditions shall have been satisfied by the
Company or duly waived by Prudential (the "Fifth Amendment Effective Date"):
(a) Prudential shall have received each of the following, each
executed, dated and delivered (if applicable) on or before August 13, 2004
(unless otherwise agreed by Prudential), in form and substance satisfactory to
Prudential:
(i) This Fifth Amendment, duly executed by the Company and
each Domestic Subsidiary of the Company;
(ii) The Amended and Restated Note, duly executed by the
Company;
(iii) A favorable opinion of Xxxxxxxx & Knight, LLP, counsel
to the Transaction Parties, substantially in the form of ExhibitB attached
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hereto, and addressing such other matters incident to the matters herein
contemplated as Prudential may reasonably request; and;
(iv) Such additional documentation as Prudential may
reasonably require.
(b) By 2:00 P.M. (EDT) on August 13, 2004, Prudential shall have
received (i) the first installment under the Amended and Restated Note and (ii)
all costs and expenses of Prudential incurred in connection with the
transactions contemplated by this Fifth Amendment and the Exchange Agreement,
including reasonable legal fees and expenses relating to such transactions,
reasonable expenses incurred in conducting due diligence investigations and
reviews and other reasonable out-of-pocket expenses incurred by Prudential or
its outside counsel in immediately available funds by wire transfer to the
following account:
Bank of New York
New York, NY
Account Name: Prudential Managed Account
ABA #000-00-000
Acct. #000-0000-000
(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 Fifth Amendment shall be
satisfactory in all respects to Prudential;
(d) Representations and Warranties. Each of the representations
and warranties contained in Article 9 (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 or
in connection therewith, as amended and restated by the additional disclosures
set forth on the disclosure schedules attached hereto as Exhibit C with
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titles corresponding to the specific section in the Restructuring Agreement,
("Disclosure Schedules"), shall be true and correct in all material respects on
and as of the Fifth Amendment Effective Date, in each case, as if made on and as
of the Fifth Amendment Effective 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 the Prior Amendments and after giving effect to the
amendments, consents and waivers set forth herein; and
(e) No Default or Event of Default. After giving effect to this
Fifth Amendment, no Default or Event of Default (except for those that may have
been duly waived) shall have occurred and be continuing.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS
On and as of the date hereof, after giving effect to this Fifth
Amendment, the Company hereby represents, warrants and covenants to Prudential
as follows:
(a) This Fifth 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.
(b) The Amended and Restated Note has been duly authorized,
executed and delivered by the Company, constitutes a legal, valid and binding
obligation of the Company and is enforceable against the Company in accordance
with its terms.
(c) The Restructuring Agreement as amended by the Prior Amendments
and after giving effect to the amendments, consents and waivers set forth herein
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.
(d) Subject to the disclosures set forth on the Disclosure
Schedules, each of the representations and warranties contained in this Fifth
Amendment, Article 9 (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, as if made on and as of the date hereof 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 the Prior Amendments and after giving
effect to the amendments, consents and waivers set forth herein.
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(e) No Default or Event of Default has occurred and is continuing
(except for those that are duly waived).
(f) 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 Fifth Amendment, the Restructuring Agreement or any Note
Document, in each case as amended by the Prior Amendments and after giving
effect to the amendments, consents and waivers set forth herein (if applicable).
SECTION 6. RELEASE
In further consideration for Prudential's execution of this Fifth
Amendment, the Company and each other Transaction Party hereby releases
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 (b) out of, or relating to,
actions, dealings or other matters occurring on or prior the date hereof
(including, without limitation, any actions or inactions of any Releasee prior
to the date hereof).
SECTION 7. EFFECT ON THE NOTE DOCUMENTS
(a) Upon receipt by Prudential of the Amended and Restated Note,
each other Note previously provided to Prudential shall be deemed to have been
cancelled and terminated.
(b) Except as expressly amended or waived above, all of the terms
and provisions of the Restructuring Agreement (including the Affirmative and
Negative Covenants set forth therein) and all other Note Documents are and shall
remain in full force and effect and are hereby ratified and confirmed. THE
COMPANY AND PRUDENTIAL EXPRESSLY AGREE THAT THE PROVISIONS OF SECTION 12.8 OF
THE RESTRUCTURING AGREEMENT APPLY TO THE DISCLOSURE OF INFORMATION BY THE
COMPANY PURSUANT TO THIS FIFTH AMENDMENT.
(c) The execution, delivery and effectiveness of this Fifth
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 Fifth Amendment is a Note Document.
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SECTION 8. CONSENT OF DOMESTIC SUBSIDIARIES
Each Domestic Subsidiary of the Company hereby consents to this Fifth
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 9. EXECUTION IN COUNTERPARTS
This Fifth 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 Fifth Amendment.
SECTION 10. GOVERNING LAW
This Fifth Amendment shall be governed by and construed in accordance
with the law of the State of New York.
SECTION 11. SECTION TITLES
The section titles contained in this Fifth 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 12. 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 13. SEVERABILITY
The fact that any term or provision of this Fifth Amendment is held
invalid, illegal or unenforceable as to any person in any situation in any
jurisdiction shall not affect the
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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 14. SUCCESSORS
The terms of this Fifth Amendment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
assigns.
SECTION 15. WAIVER OF JURY TRIAL
Each of the parties hereto irrevocably waives trial by jury in any
action or proceeding with respect to This Fifth Amendment or any other Note
Document.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused This Fifth
Amendment to be executed by their respective officers and general partners
thereunto duly authorized on 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:
---------------------------------------------
Name:
Title:
Acknowledged and Agreed by:
Domestic Subsidiaries:
Boots & Xxxxx Special Services, Inc.
By:
-------------------------------
Name:
Title:
Elmagco, Inc.
By:
-------------------------------
Name:
Title:
Hell Fighters, Inc.
By:
-------------------------------
Name:
Title:
IWC Engineering, Inc.
By:
-------------------------------
Name:
Title:
IWC Services, Inc.
By:
-------------------------------
Name:
Title:
Boots & Xxxxx Services, Inc.
By:
-------------------------------
Name:
Title:
SCHEDULE A
DIVIDEND AMOUNT
Security Dividend Due Accrual Date
Senior Preferred Series E $312,865.20 8/13/2004
Senior Preferred Series G $264,447.42 12/31/2003
EXHIBIT A
FORM OF AMENDED AND RESTATED NOTE
BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC.
AMENDED AND RESTATED SENIOR SUBORDINATED NOTE
$9,635,042 July 1, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, the undersigned, BOOTS & XXXXX INTERNATIONAL WELL
CONTROL, INC. (the "COMPANY"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA, or registered assigns, the principal sum of NINE
MILLION SIX HUNDRED THIRTY-FIVE THOUSAND FORTY TWO DOLLARS ($9,635,042) in
twenty two (22) consecutive installments in the amounts set forth in the
Restructuring Agreement referred to below, commencing on August 13, 2004 and
continuing until December 31, 2009.
The Company promises to pay interest on the unpaid principal
amount of this Note from the date hereof until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Restructuring Agreement. Interest as aforesaid shall be (a) at a rate of twelve
percent (12%) per annum, (b) be computed on the basis of a 360-day year
comprised of twelve 30-day month and (c) payable (i) quarterly on the last
business day of September, December, March and June in each year, commencing
with September 30, 2004, (ii) upon the maturity of any portion of the principal
amount thereof as listed on clause (a) of Section 2 of the Fifth Amendment and
(iii) if not previously paid in full, on demand from and after the time the
outstanding principal thereunder becomes due and payable (whether by
acceleration or otherwise). So long as an Event of Default is continuing,
interest on the unpaid balance of this Note, and any overdue payment of
interest, payable quarterly as aforesaid (or, at the option of the registered
holder hereof, on demand), shall accrue at a rate per annum from time to time
equal to the lesser of (a) the maximum rate permitted by applicable law or (b)
the greater of (i) 2% above the rate of interest publicly approved by The Bank
of New York at its prime rate or (ii) fourteen percent (14.0%).
Payments of principal of and interest on this Note are to be made at
the main office of The Bank of New York in New York City or at such other place
as the holder hereof shall designate to the Company in writing, in lawful money
of the United States of America.
This Note is issued pursuant to a Subordinated Note Restructuring
Agreement, dated as of December 28, 2000 (as such agreement is amended,
supplemented, restated or otherwise modified from time to time, including by the
Fifth Amendment, the "RESTRUCTURING AGREEMENT"), between the Company and The
Prudential Insurance Company of America, and is entitled to the benefits
thereof. Capitalized terms used and not otherwise defined herein have the
meanings assigned to them in the Restructuring Agreement.
This Note is a registered Note and, as provided in the Restructuring
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of like tenor for a like principal amount will be issued to,
and registered in the name
A-1
of, the transferee. Prior to due presentment for registration of transfer, the
Company may treat the person in whose name this Note is registered as the owner
hereof for the purpose of receiving payment and for all other purposes, and the
Company shall not be affected by any notice to the contrary.
If an Event of Default shall occur following the date hereof, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Restructuring Agreement.
The Company, and the purchaser and the registered holder of this Note
specifically intend and agree to limit contractually the amount of interest
payable under this Note to the maximum amount of interest lawfully permitted to
be charged under applicable law. Therefore, none of the terms of this Note
shall ever be construed to create a contract to pay interest at a rate in excess
of the maximum rate permitted to be charged under applicable law, and neither
the Company nor any other party liable or to become liable hereunder shall ever
be liable for interest in excess of the amount determined at such maximum rate,
and the provisions of Section 12.16 of the Restructuring Agreement shall control
over any contrary provision of this Note.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
BOOTS & XXXXX INTERNATIONAL WELL CONTROL, INC.
By:
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Name:
Title:
A-2
EXHIBIT B
FORM OF OPINION
(Attached)
EXHIBIT C
DISCLOSURE SCHEDULES
(Attached)
