EXHIBIT 99.1
SEVENTH AMENDMENT TO LOAN AGREEMENT
This Seventh Amendment To Loan Agreement ("Amendment") effective as of
October 31, 2000 (the "Amendment Effective Date") is made and entered into by
and among Boots & Xxxxx International Well Control, Inc., a Delaware corporation
(the "Borrower"), the financial institutions (each, together with its successors
and assigns, a "Lender" and collectively, the "Lenders") from time to time a
party to the Loan Agreement (as hereinafter defined), and Specialty Finance Fund
I, LLC, a Delaware limited liability Borrower ("Specialty"), as successor to
Comerica Bank-Texas, a Texas banking association ("Comerica"), as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Agent").
RECITALS:
Whereas, the Borrower, the Lenders, and the Agent are parties to a Loan
Agreement dated as of October 28, 1998, as amended by the First Amendment to
Loan Agreement dated as of March 31, 1999, Second Amendment to Loan Agreement
dated as of May 15, 1999, Third Amendment to Loan Agreement dated as of April
21, 0000, Xxxxxx Xxxxxxxxx to Loan Agreement dated as of May 31, 2000, Fifth
Amendment to Loan Agreement dated as of May 31, 2000 and Sixth Amendment to Loan
Agreement dated as of June 15, 2000 (as amended, the "Loan Agreement");
Whereas, Comerica resigned as agent under the Loan Agreement and Specialty,
as the only remaining Lender, appointed itself as agent thereunder pursuant to
that certain letter dated September 27, 2000 among Comerica, Specialty and the
Borrower; and
Whereas, the Borrower, the Lender, and the Agent have agreed, on the terms
and conditions herein set forth, that the Loan Agreement be amended in certain
respects;
Now, Therefore, For Good and valuable consideration, including the mutual
agreements of the parties hereto, the receipt and sufficiency of which is hereby
acknowledged, it is agreed:
Section 1. Definitions. Terms used herein which are defined in the
Loan Agreement shall have the same meanings when used herein unless otherwise
provided herein.
Section 2. Agreements of Parties. Notwithstanding the terms of the
Loan Agreement, as amended hereby, the Borrower, the Agent and the Lender hereby
agree that:
(a) the outstanding principal balance of the Notes shall bear
interest from and after the Amendment Effective Date at the Base Rate, or
the Past Due Rate, as applicable. The Borrower shall not have the option to
designate or convert to a Eurodollar Rate;
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(b) without the prior approval of the Agent and Lender (to be
given or withheld in their sole and absolute discretion), the Borrower
shall not request any additional borrowings or the issuance of a Letter of
Credit;
(c) notwithstanding the requirements of the Loan Agreement,
accrued and unpaid interest on the unpaid principal balance of the Loans
due and payable on any Interest Payment Date may be capitalized and added
to the amounts outstanding under the Notes and shall constitute additional
principal amounts outstanding thereunder, with the effect and result that
until otherwise agreed upon in writing, interest payable in respect of the
Loans may be paid by the Borrower in kind;
(d) the Borrower shall not be liable to pay any revolving loan
commitment fee set forth in Section 2.4(a).
(e) the outstanding aggregate principal amount of the Loans and
accrued and unpaid interest thereon outstanding under the Loan Agreement
immediately prior to December 29, 2000 (the "Effective Date") is
$9,487,300.00.
(f) immediately following the Effective Date and after giving
effect to the satisfaction of the conditions set forth in Section 7, the
outstanding principal amount due and owing under the Loan Agreement will be
$1,000,000.00.
Section 3. Amendments to the Loan Agreement. On and after the
Amendment Effective Date, the Loan Agreement shall be amended as follows:
(a) The definition of "Base Rate" set forth in Section 1.1 of the
Loan Agreement is hereby amended to read in its entirety as follows:
""Base Rate" means for any day a rate per annum equal to the lesser of
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(a) the Prime Rate for that day plus one percent (1%) or (b) the Ceiling
Rate."
(b) The definition of "Maturity Date" set forth in Section 1.1 of
the Loan Agreement is hereby amended to read in its entirety as follows:
""Maturity Date" means the maturity of the Revolving Notes, October
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31, 2002."
(c) The following definition shall be included in alphabetical
order in Section 1.1 of the Loan Agreement to read in its entirety as
follows and to apply exclusively to Section 9.1(o) hereof:
""Series E Preferred Stock" shall mean the $5,000,000 aggregate face
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value, Series E, Cumulative Senior Preferred Stock, par value $0.00001 per
share of the Borrower."
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(d) The following definitions shall be included in alphabetical
order in Section 1.1 of the Loan Agreement to read in their entirety as
follows and to apply exclusively to Sections 8.1, 8.2, 8.17, 8.18 and 8.19
hereof:
""Affiliate" shall mean any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, the
Borrower, except a Subsidiary. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Capitalized Lease Obligation" shall mean any rental obligation which,
under GAAP, would be required to be capitalized on the books of the
Borrower or any Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with such principles.
"Consolidated Interest Expense" shall mean, with respect to any
period, the sum (without duplication) of the following (in each case,
eliminating all offsetting debits and credits between the Borrower and its
Subsidiaries and all other items required to be eliminated in the course of
the preparation of consolidated financial statements of the Borrower and
its Subsidiaries in accordance with GAAP): (i) all interest and prepayment
charges in respect of Indebtedness of the Borrower and its Subsidiaries
(including imputed interest in respect of Capitalized Lease Obligations and
net costs of Swaps) deducted in determining consolidated net income for
such period, together with all interest capitalized or deferred during such
period and not deducted in determining consolidated net income for such
period, and (ii) all debt discount and expense amortized or required to be
amortized in the determination of Consolidated Net Income for such period.
"Consolidated Net Income" shall mean, with respect to any period, the
net income (or loss) of the Borrower and its Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Borrower and its
Subsidiaries and all other items required to be eliminated in the course of
the preparation of consolidated financial statements of the Borrower and
its Subsidiaries, in accordance with GAAP.
"EBITDA" shall mean, for any period, the sum of (i) Consolidated Net
Income, plus (ii) to the extent deducted in the determination of
Consolidated Net Income, (a) all provisions for federal, state and other
income tax, (b) Consolidated Interest Expense and (c) provisions for
depreciation and amortization, provided, however, that so long as the
Borrower shall have delivered to the Agent financial information regarding
a Permitted Acquisition which discloses the prior operating results
thereof, the pro forma effect of such acquisition during such 12-month
period shall be permitted to be included in EBITDA for the Borrower or a
Subsidiary as if such acquisition occurred on the first day of such period.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Executive Officer" shall mean the chairman of the board, chief
executive officer, president, chief operating officer, chief financial
officer or chief accounting officer of the Borrower.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to
any indebtedness, lease, dividend or other obligation of another,
including, without limitation, any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the
ordinary course of business) or discounted or sold with recourse by such
Person, or in respect of which such Person is otherwise directly or
indirectly liable, including, without limitation, any such obligation in
effect guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or
for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to the
outstanding principal amount of the obligation guaranteed or such lesser
amount to which the maximum exposure of the guarantor shall have been
specifically limited.
"Indebtedness" shall mean, with respect to any Person or consolidated
group of Persons, without duplication, (i) all items (excluding items of
contingency reserves or of reserves for deferred income taxes) which in
accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person or
consolidated group of Persons (but excluding accounts payable in the
ordinary course of business) as of the date on which Indebtedness is to be
determined; (ii) all indebtedness secured by any Lien on, or payable out of
the proceeds of production from, any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured
thereby shall have been assumed; (iii) redemption obligations in respect of
mandatorily redeemable preferred stock; (iv) Swaps; (v) unfunded pension
liabilities; (vi) obligations as an account party in respect of letters of
credit; and (vii) Guarantees of Indebtedness of other Persons of the types
described in the foregoing clauses (i) through (vi).
"Lien" shall mean any mortgage, pledge, priority, security interest,
encumbrance, contractual deposit arrangement, lien (statutory or otherwise)
or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any
production payment, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code
of any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
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"New Senior Credit Facility" shall mean any credit instrument or
agreement at any time and from time to time entered into by the Borrower
with any financial institution or institutions within the limitations of
Section 8.2(ii), as the same may from time to time be supplemented,
amended, renewed, extended, refunded or replaced.
"Permitted Acquisition" shall have the meaning set forth in the
Prudential Letter.
"Permitted Disposition" shall have the meaning set forth in the
Prudential Letter.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, a limited liability company, an
unincorporated organization and a government or any department or agency
thereof.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.
"Prudential" shall mean The Prudential Insurance Company of America.
"Prudential Letter" shall mean that certain letter dated as of
December 28, 2000 from the Borrower to Prudential.
"Senior Debt" shall mean Indebtedness for borrowed money, principal,
interest, premium, if any, and all other obligations owing pursuant to (i)
this Agreement and (ii) the New Senior Credit Facility.
"Subordinated Note Restructuring Agreement" shall mean that certain
Subordinated Note Restructuring Agreement between the Borrower and
Prudential dated as of December 28, 2000.
"Subsidiary" shall mean (i) any corporation, at least 50% of the total
combined voting power of all classes of Voting Stock of which shall, at the
time as of which any determination is being made, be owned by the Borrower,
either directly or through Subsidiaries (including, without limitation, the
Acquired Borrower), and (ii) any partnership, limited liability Borrower,
joint venture or similar entity if at least a 50% interest in the profits
or capital thereof is owned by the Borrower, either directly or through
Subsidiaries (unless such entity can and does ordinarily take major
business actions without the prior approval, direct or indirect, of the
Borrower), provided, however, that notwithstanding anything to the contrary
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contained in the foregoing, the term Subsidiary shall not Include ITS
Supply Corporation or its subsidiaries so long as ITS Supply Corporation is
engaged in a proceeding under any Bankruptcy Law.
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"Swaps" shall mean with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount
of the obligation under any Swap shall be the amount determined in respect
thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had terminated at the
end of such fiscal quarter, and in making such determination, if any
agreement relating to such Swap provides for the netting of amounts payable
by and to such Person thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in each such
case, the amount of such obligation shall be the net amount so determined.
"Total Debt" shall mean the total Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis; provided that Total Debt shall not
include trade payables and current Indebtedness (other than for borrowed
money) incurred in, and deposits and advances accepted in, the ordinary
course of business.
"Voting Stock" shall mean securities or other equity interests of any
class or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election or removal of corporate
directors or persons (such as general partners or managers) performing
similar functions in the case of business entities other than
corporations."
(e) Sections 8.1 and 8.2 of the Loan Agreement are hereby amended
in their entirety to read as follows:
"8.1 Liens. Create, assume or suffer to exist any Lien upon
any of its properties or assets, whether now owned or hereafter acquired,
(i) Liens on property of the Borrower and its Subsidiaries
outstanding on the December 28, 2000 described in the Prudential
Letter, including, without limitation, those securing the Senior Debt;
(ii) Liens to secure debt financing permitted by Section
8.2(ii).
(iii) statutory Liens incidental to the conduct of business
or the ownership of properties of the Borrower and its Subsidiaries
(including Liens in connection with worker's compensation,
unemployment insurance and other like laws (other than ERISA Liens),
warehousemen's and mechanic's liens and statutory landlord's liens)
and Liens to secure the performance of bids, tenders or purchase,
construction or sales contracts, or to secure statutory obligations,
property taxes and assessments or governmental charges, surety or
appeal bonds or other Liens of like general nature which in each case
are incurred in the ordinary course of business and not in connection
with the borrowing of money, the obtaining of advances or credit or
the payment of the deferred purchase price of property and which do
not in any event materially impair the value or use of the property
encumbered thereby in the operation of the business of the Borrower
and its Subsidiaries; provided in each case, that the obligation
secured is not overdue;
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(iv) any Lien created to secure all or any part of the
purchase price, or to secure Indebtedness incurred or assumed to pay
all or any part of the purchase price, of property acquired by the
Borrower or its Subsidiaries after the December 28, 2000, provided,
that all of such Liens may not secure in excess of an aggregate of
$8,000,000 of Indebtedness, and provided, further, that all such
Indebtedness is supported by a contract with a credit-worthy
sovereign, nationally-owned or major independent integrated oil and
gas Borrower that provides for payment in full of such Indebtedness as
principal and interest thereon is scheduled to be paid, and which the
Borrower demonstrates to you will allow it to maintain compliance with
the ratio tests of Sections 8.17, 8.18 and 8.19 hereof, and, provided,
further, that all such Liens shall be confined solely to the item or
items of property so acquired; and
(v) any Lien incurred in connection with a Permitted
Acquisition that is limited to the assets or business unit acquired
(and the product, proceeds and accretions thereto, including, without
limitation, the cash and accounts receivable generated by any such
business unit and any assets acquired by such business unit) securing
any Indebtedness permitted by Section 8.2(vii).
8.2 Limitation on Indebtedness. Create, incur, assume or
permit to exist any Indebtedness other than:
(i) Indebtedness incurred pursuant to the Subordinated Note
Restructuring Agreement, as evidenced by the Notes outstanding
thereunder, and the subordinated guaranty obligations of the
Borrower's Subsidiaries with respect thereto;
(ii) Senior Debt owing pursuant to the New Senior Credit
Facility, provided that the principal amount of Indebtedness owing
pursuant thereto shall not be in excess of $6,000,000, (which Senior
Debt may be incurred whether or not the Borrower is in compliance with
the tests pursuant to Sections 8.17, 8.18 and 8.19 up to and through
September 30, 2001), and the senior guaranty obligations of the
Borrower's Subsidiaries with respect thereto;
(iii) trade payables and current Indebtedness (other than for
borrowed money) incurred in, and deposits and advances accepted in,
the ordinary course of business;
(iv) Indebtedness of the Borrower and its Subsidiaries
outstanding on December 28, 2000 and described in the Prudential
Letter, including, without limitation, the Senior Debt owning pursuant
to this Agreement, but not including any refinancing of such
Indebtedness, other than a refinancing of the Senior Debt;
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(v) Indebtedness secured by the Liens permitted pursuant to
clause (iv) of Section 8.1;
(vi) Indebtedness of up to $15,000,000 (or such greater
amount as is acceptable to the Agent based on a case-by-case review by
the Agent of contract opportunities that may exceed such maximum)
incurred in connection with interim project financing, supported by a
contract with a credit-worthy sovereign, nationally-owned or major
independent integrated oil and gas company, with such Indebtedness to
be retired within the term of such contract at or prior to project
conclusion with the collection of associated receivables, for specific
purpose large-scale well control events provided, that if such
Indebtedness is recourse to the Borrower, it may be incurred if the
Borrower demonstrates to the Agent it will maintain compliance with
the ratio tests of Sections 8.17, 8.18 and 8.19; and
(vii) Indebtedness in connection with the Permitted
Acquisition so long as after giving effect thereto no Default or Event
of Default shall occur and be continuing and on a pro forma basis the
Company is (and is projected to be) in compliance with Section 8.17
hereof."
(f) Section 8 of the Loan Agreement is hereby amended by adding at
the end thereof the following additional sections to read in their entirety
as follows:
"8.17 Total Debt to EBITDA Ratio. Permit the ratio of Total
Debt to EBITDA for each of the rolling twelve month periods most recently
ended, commencing with the twelve month period ended on the earlier of (i)
the last day of the month containing the closing date of the Permitted
Acquisition and (ii) December 31, 2001, to be greater than the 3.25 to 1.
8.18 EBITDA to Consolidated Interest Expense. Permit the
ratio of EBITDA to Consolidated Interest Expense, for each of the rolling
twelve month periods most recently ended, commencing with the twelve month
period ended on the earlier of (i) the last day of the month containing the
closing date of the Permitted Acquisition and (ii) December 31, 2001, to be
less than 2.9 to 1.
8.19 Year-to-date EBITDA Levels. Permit EBITDA from January
1, 2001 to the last day of each period set forth below, to be less than the
minimum amount set forth opposite such period below:
Period Minimum Amount
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March 31, 2001 $350,000
June 30, 2001 $1,200,000
September 30, 2001 $2,500,000"
(g) Section 9.1 of the Loan Agreement is hereby amended in its
entirety to read as follows:
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9.1 Events of Default. If any one or more of the following
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events (herein called "Events of Default" shall occur, then Agent shall (at
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the direction of the Majority Lenders) do any or all of the following: (1)
without notice to Borrower or any other Person, declare the Revolving Loan
Commitments terminated (whereupon the Revolving Loan Commitments shall be
terminated) and/or accelerate the Revolving Loan Termination Date to a date
as early as the date of termination of the Revolving Loan Commitments; (2)
terminate any Letter of Credit allowing for such termination, by sending a
notice of termination as provided therein and require Borrower to provide
Cover for outstanding Letters of Credit; (3) declare the principal amount
then outstanding of and the unpaid accrued interest on the Loans and
Reimbursement Obligations and all fees and all other amounts payable
hereunder, under the Notes and under the other Loan Documents to be
forthwith due and payable, whereupon such amounts shall be and become
immediately due and payable, without notice (including, without limitation,
notice of acceleration and notice of intent to accelerate), presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by Borrower; provided that in the case of the occurrence
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of an Event of Default with respect to any Obligor referred to in clause
(g), (h), (i), (j), or (k) of this Section 9.1, the Revolving Loan
Commitments shall be automatically terminated and the principal amount then
outstanding of and unpaid accrued interest on the Loans and the
Reimbursement Obligations and all fees and all other amounts payable
hereunder, under the Notes and under the other Loan Documents shall be and
become automatically and immediately due and payable, without notice
(including, without limitation, notice of acceleration and notice of intent
to accelerate), presentment, demand, protest or other formalities of any
kind, all of which are hereby expressly waiver by Borrower, and (4)
exercise any or all other rights and remedies available to Agent or any of
the Lenders under the Loan Documents, at law or in equity:
(a) the Borrower defaults in the payment of any principal of
any Note, when the same shall become due, either by the terms thereof
or otherwise as herein provided; or
(b) the Borrower defaults in the payment of any interest on
any Note and such default is continuing for more than five Business
Days after the date due; or
(c) the Borrower or any Subsidiary (a) defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for money borrowed
(or any Capitalized Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any obligation
issued or assumed as full or partial payment for property whether or
not secured by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit) in an
aggregate amount in excess of $1,000,000 beyond any period of grace
provided with respect thereto or (b) fails to perform or observe any
other agreement, term or condition contained in any agreement under
which any such obligation is created (or if any other event thereunder
or under any such agreement shall occur and be continuing) and the
effect of such failure or other event is to cause or permit the holder
of obligation to cause such obligation to become due (or to be
repurchased by the Borrower or any Subsidiary) prior to any stated
maturity; or
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(d) any representation or warranty made by the Borrower or
any of its Subsidiaries herein or in any of the other Loan Documents,
or by the Borrower or any of its officers in any writing furnished in
connection with or pursuant to this Restructuring Agreement shall be
false in any material respect on the date as of which made; or
(e) the Borrower fails to perform or observe any term,
covenant or agreement contained in Section 8 (other then Sections
8.17, 8.18 and 8.19 which is addressed in Section 9.1(o) below); or
(f) the Borrower or any Subsidiary fails to perform or
observe any other agreement, covenant, term or condition contained
herein, or in any of the other Loan Documents and such failure
continues unremedied for a period of 30 days after (a) written notice
thereof is given by the Agent or any Lender to the Borrower, or (b)
the Borrower otherwise obtains knowledge of such default, whichever is
earlier; or
(g) the Borrower or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(h) any decree or order for relief in respect of the Borrower
or any Subsidiary is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution
or liquidation or similar law, whether now or hereafter in effect (the
"Bankruptcy Law"), of any jurisdiction; or
(i) the Borrower or any Subsidiary petitions or applies to
any Tribunal for, or consents to, the appointment of, or taking
possession by, a trustee, receiver, custodian, liquidator or similar
official of the Borrower or any Subsidiary, or of any substantial part
of the assets of the Borrower or any Subsidiary, or commences a
voluntary case under the Bankruptcy Law of the United States or any
proceedings (other than proceedings for the voluntary liquidation and
dissolution of a Subsidiary) relating to the Borrower or any
Subsidiary under the Bankruptcy Law of any other jurisdiction; or
(j) any such petition or application is filed, or any such
proceedings are commenced, against the Borrower or any Subsidiary and
the Borrower or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition
in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 60 days; or
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(k) any order, judgment or decree is entered in any
proceedings against the Borrower decreeing the dissolution of the
Borrower and such order, judgment or decree remains unstayed and in
effect for more than 30 days; or
(l) any order, judgment or decree is entered in any
proceedings against the Borrower or any Subsidiary decreeing a
split-up of the Borrower or such Subsidiary which requires the
divestiture of assets representing 10% or more of the consolidated net
worth of the Borrower and the Subsidiaries on a consolidated basis, or
the divestiture of assets or stock of a Significant Subsidiary, and
such order, judgment or decree remains unstayed and in effect for more
than 30 days; or
(m) any judgment or order, or series of judgments or orders,
in an amount in excess of $500,000 (excluding any item described in
the Prudential Letter, is rendered against the Borrower or any
Subsidiary and either (i) enforcement proceedings have been commenced
by any creditor upon such judgment or order or (ii) within 60 days
after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within 60 days after the expiration
of any such stay, such judgment is not discharged; or
(n) any Guaranty shall for any reason cease to be valid and
binding on the applicable guarantor or any party to any Guaranty
states to any holder of a Note or asserts in writing that the Guaranty
Agreement is not valid and binding on such guarantor; or
(o) the Borrower fails to perform or observe any covenant
contained in Section 8.17, 8.18 or 8.19 and such default is not waived
or "deemed cured" within a reasonable period of time which shall, for
purposes of this Agreement, be 30 days (for purposes of this Section
9.1(o) only, a default under Sections 8.17 and 8.18 will be "deemed
cured" if the Company raises funds (other than by incurring
Indebtedness) and applies 50% of the proceeds thereof to prepay Senior
Debt and 50% of the proceeds thereof to repurchase Series E Preferred
Stock and if, for purposes of compliance with the covenants of
Sections 8.17 and 8.18, Total Debt were reduced by the amounts used in
such prepayment of Senior Debt and repurchase of Series E Preferred
Stock, the Company would have been in compliance on date of such
default); or
(p) any Security Document after delivery thereof, shall for
any reason, except to the extent permitted by the terms of this
Agreement or such Security Document, ceases to create a valid and
perfected Lien of the first priority (subject to the Permitted Liens),
required thereby on any of the Collateral purported to be covered
thereby and securing that portion of the Obligations which is therein
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designated as being secured, or any Obligor (or any other Person who
may have granted or purported to grant such Lien) will so state in
writing or, after the creation thereof as herein provided, Agent shall
cease to have a first priority Lien (subject to Permitted Liens) upon
the equity interests in and to Subsidiaries of Borrower (or 65% of
such equity interests in the case of Foreign Subsidiaries) securing
the Obligations; or
(q) (i) any Person other than Borrower shall own any equity
interest in any Subsidiary of Borrower or any Person other than Agent
shall acquire any Lien on Borrower's interest in and to the equity
interest in any Subsidiary of Borrower; or (ii) any Change of Control
shall occur.
Section 4. No Reliance by Others. None of the provisions of this
Amendment shall inure to the benefit of Borrower or any other Obligor or any
Person other than Lenders and Agent; consequently, neither Borrower or any other
Obligor shall be, and no Person other than the Lenders and Agent shall be,
entitled to rely upon or raise as a claim or defense, in any manner whatsoever,
the failure of Lenders and Agent to comply with the provisions of this
Amendment. Neither the Agent nor any Lender shall incur any liability to
Borrower or any other Obligor or any other Person for any act or omission of the
other.
Section 5. Limitations. The amendments set forth herein are limited
precisely as written and shall not be deemed to (a) be a consent to, or waiver
or modification of, any other term or condition of the Loan Agreement or any of
the other Loan Documents, or (b) except as expressly set forth herein, prejudice
any right or rights which the Lenders may now have or may have in the future
under or in connection with the Loan Agreement, the Loan Documents or any of the
other documents referred to therein. Except as expressly modified hereby or by
express written amendments thereof, the terms and provisions of the Loan
Agreement, the Notes, and any other Loan Documents or any other documents or
instruments executed in connection with any of the foregoing are and shall
remain in full force and effect. In the event of a conflict between this
Amendment and any of the foregoing documents, the terms of this Amendment shall
be controlling. The representations and warranties made in each Loan Document
are true and correct in all material respects on and as of the Amendment
Effective Date.
Section 6. Representations and Warranties. (a) To induce the Agent and
the Lenders to execute and deliver this Amendment (which representations shall
survive the execution and delivery of this Amendment), the Borrower represents
and warrants to the Agent and the Lenders that:
(i) this Amendment has been duly authorized, executed and
delivered by it and this Amendment constitutes the legal, valid and binding
obligation, contract and agreement of the Borrower enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights generally;
(ii) the Loan Agreement, as amended by this Amendment, constitutes
the legal, valid and binding obligation, contract and agreement of the
Borrower enforceable against it in accordance with its respective terms,
Except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating
to or limiting creditors' rights generally; and
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(iii) the execution, delivery and performance by the Borrower
of this Amendment (1) has been duly authorized by all requisite corporate
action, (2) does not require the consent or approval of any governmental or
regulatory body or agency, and (iii) will not (A) violate (x) any provision
of law, statute, rule or regulation or its certificate of incorporation or
bylaws, (y) any order of any court or any rule, regulation or order of any
other agency or government binding upon it, or (z) any provision of any
material indenture, agreement or other instrument to which it is a party or
by which its properties or assets are or may be bound, including, without
limitation, that certain Subordinated Note Restructuring Agreement dated as
of December 28, 2000 between the Borrower and The Prudential Insurance
Company of America (the "Subordinated Note Restructuring Agreement"), or
(B) result in a breach or constitute (along or with due notice or lapse of
time or both) a default under any indenture, agreement or other instrument
referred to in clause (3)(A)(z) of this Section 6(a)(iii).
(b) Assuming that each of the members of Specialty has represented in
writing that it is an "accredited investor" within the meaning of Rule 501 of
Regulation D promulgated under the Securities Act of 1933, as amended and in
reliance thereon, Specialty is an "accredited investor" within the meaning of
said Rule 501.
Section 7. Conditions to Effectiveness of This Amendment. This
Amendment shall not become effective until, and shall become effective when,
each and every one of the following conditions shall have been satisfied on the
Effective Date:
(a) executed counterparts of this Amendment, duly executed by the
Borrower, the Agent and the Lenders, shall have been delivered to the
Lenders;
(b) the Agent shall have received a copy of the resolutions of the
Board of Directors of the Borrower authorizing the execution, delivery and
performance by the Borrower of this Amendment and the Subordinated Note
Restructuring Agreement, certified by its Secretary or an Assistant
Secretary, in the form annexed hereto as Exhibit A;
(c) the representations and warranties of the Borrower set forth in
Section 6 hereof are true and correct on and with respect to the date
hereof;
(d) the Agent shall have received the favorable opinion of counsel
to the Obligors as to the matters set forth in Sections 7.1(a), 7.1(b) and
7.1(c) hereof and such other matters as you reasonably deem appropriate,
which opinion shall be in form and substance satisfactory to the Lenders;
(e) in satisfaction and payment of an aggregate of $8,487,300.00
of the outstanding principal amount of the Loans due and owing under the
Loan Agreement and accrued and unpaid interest, the Lenders shall have
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received 89,117 shares of the $8,911,665.00 aggregate face value, Series H,
Cumulative Senior Preferred Stock, par value $0.00001 per share (the
"Series H Preferred Stock"), of the Company, with the effect and result
that immediately following the Effective Date, the outstanding principal
amount of the Loans due and owing pursuant to the Loan Agreement shall be
$1,000,000.00;
(f) the Subordinated Note Restructuring Agreement and the related
Subordinated Guaranty Agreement shall be in form and substance acceptable
to the Agent, shall be in full force and effect and a true, correct and
complete copy of each thereof shall have been delivered to the Agent;
(g) the Agent shall have, on behalf of the Lenders, received the
duly executed and recorded Certificate of Designation of the Company
relating to the Series H Preferred Stock in form and substance satisfactory
to the Agent and the Lenders; and
(h) the Agent shall have received a written confirmation from each
Subsidiary (other than Foreign Subsidiaries) of the Borrower which is a
party to a Guaranty affirming its absolute and unconditional obligations
under such Guaranty.
Upon receipt of all of the foregoing, this Amendment shall become
effective.
Section 8. Waiver of Prior Events of Default, Etc. Upon satisfaction
of the conditions set forth in Section 7:
(a) each and every Default or Event of Default arising under the
Loan Agreement or under any document executed or delivered in connection
with the Loan Agreement, existing prior to the Effective Date shall be
hereby and forever waived by the Agent and the Lenders;
(b) the Agent and the Lenders shall be deemed to have, and shall
have, consented to the execution and delivery of the Subordinated Note
Restructuring Agreement; and
(c) the Agent and the Lenders shall be deemed to have, and shall
have, released each of the Foreign Subsidiaries as a party to a Guaranty in
respect of the Loan Agreement and the Obligations outstanding thereunder.
Section 9. Payment of Expenses. The Borrower agrees, whether or not
the transactions hereby contemplated shall be consummated, to reimburse and save
the Agent harmless from and against liability for the payment of all reasonable
substantiated out-of-pocket costs and expenses arising in connection with the
preparation, execution, delivery, amendment, modification, waiver and
enforcement of, or the preservation of any rights under this Amendment,
including, without limitation, the reasonable fees and expenses of Xxxxxxx and
Xxxxxx, special counsel to the Agent, and any other any local or other counsel
for Agent, and all stamp taxes (including interest and penalties, if any),
recording taxes and fees, filing taxes and fees, and other charges which may be
payable in respect of, or in respect of any modification of, the Loan Agreement
and the other Loan Documents. The provisions of this Section shall survive the
termination of the Loan Agreement and the repayment of the Loans.
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Section 10. Governing Law. This Amendment and the rights and
obligations of the parties hereunder and under the Loan Agreement shall be
construed in accordance with and be governed by the laws of the State of Texas
and the United States of America.
Section 11. Descriptive Headings, etc. The descriptive headings of the
several Sections of this Amendment are inserted for convenience only and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
Section 12. Entire Agreement. This Amendment and the documents
referred to herein represent the entire understanding of the parties hereto
regarding the subject matter hereof and supersede all prior and contemporaneous
oral and written agreements of the parties hereto with respect to the subject
matter hereof, including, without limitation, any commitment letters regarding
the transactions contemplated by this Amendment.
Section 13. Counterparts. This Amendment may be executed in any number
of counterparts and by different parties on separate counterparts and all of
such counterparts shall together constitute one and the same instrument.
Complete sets of counterparts shall be lodged with the Borrower and the Agent.
Section 14. Amended Definitions. As used in the Loan Agreement
(including all Exhibits thereto) and all other instruments and documents
executed in connection therewith, on and subsequent to the Amendment Effective
Date the term (i) "Agreement" shall mean the Loan Agreement as amended by this
Amendment, and (ii) references to any and all other Loan Documents shall mean
such documents as amended as contemplated hereby.
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In Witness Whereof, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
Notice pursuant to Tex. Bus. & Comm. Code Sec.26.02
This Amendment and all other Loan Documents executed by any of the parties
before or substantially contemporaneously with the execution hereof together
constitute a written Loan Agreement and represent the final agreement between
the parties between the parties and may not be contradicted by evidence or
prior, contemporaneous or subsequent oral agreements of the parties. There are
no unwritten oral agreements between the parties.
Boots & Xxxxx International Well
Control, Inc., a Delaware corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
Specialty Finance Fund I, LLC, a
Delaware limited liability Borrower (as
successor to Comerica Bank-Texas, a Texas
banking association) as Agent and as a
Lender
By:______________________________________
Name:____________________________________
Title:___________________________________
By:______________________________________
Name:____________________________________
Title:___________________________________
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THE UNDERSIGNED HEREBY JOIN IN THIS AMENDMENT TO EVIDENCE THEIR CONSENT TO
EXECUTION BY BORROWER OF THIS AMENDMENT, TO CONFIRM THAT EACH LOAN DOCUMENT NOW
OR PREVIOUSLY EXECUTED BY THE UNDERSIGNED APPLIES AND SHALL CONTINUE TO APPLY TO
THE LOAN AGREEMENT, AS AMENDED HEREBY, TO ACKNOWLEDGE THAT WITHOUT SUCH CONSENT
AND CONFIRMATION. LENDERS WOULD NOT EXECUTE THIS AMENDMENT AND TO JOIN IN THE
NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SEC.26.02 SET FORTH ABOVE.
ABASCO, INC.,
a Texas corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
Boots & Xxxxx Special Services, Inc.,
a Texas corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
Elmagco, Inc.,
a Delaware corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
Hell Fighters, Inc.,
a Texas corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
IWC Engineering, Inc.,
a Texas corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
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IWC Services, Inc.,
a Texas corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
ITS Supply Corporation,
a Delaware corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
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