AMENDMENT NO. 12
TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 12 (this "Agreement") is entered into as of July 12,
2010, by and among BEST ENERGY SERVICES, INC (f/k/a HYBROOK RESOURCES CORP.), a
corporation organized under the laws of the State of Nevada ("Best"), XXX XXXXXX
DRILLING COMPANY, a corporation organized under the laws of the State of Utah
("BBD") and BEST WELL SERVICE, INC., a corporation organized under the laws of
the State of Kansas ("BWS") (Best, BBD and BWS, each a "Borrower", and
collectively "Borrowers"), the financial institutions party hereto
(collectively, the "Lenders" and individually a "Lender") and PNC BANK, NATIONAL
ASSOCIATION ("PNC"), as agent for Lenders (PNC, in such capacity, the "Agent").
BACKGROUND
Borrowers, Lenders and Agent are parties to that certain Revolving Credit, Term
Loan and Security Agreement dated as of February 14, 2008 (as amended, restated,
supplemented or otherwise modified from time to time, the "Loan Agreement")
pursuant to which Agent and Lenders provide Borrowers with certain financial
accommodations.
Borrowers have requested that Agent and Lenders amend certain provisions of the
Loan Agreement as hereafter provided, and Agent and Lenders are willing to do so
on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretfore or hereafter made to or for the account of Borrowers by Agent or
Lenders, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. All capitalized terms not otherwise defined or amended
herein shall have the meanings given to them in the Loan Agreement.
2. Reservation of Rights: Borrowers acknowledge that the Event of Default
set forth on Schedule I hereto (the "Existing Default") has occurred and is
continuing under the Loan Agreement.
(a) As a result of the Existing Default, Agent has the immediate right to
exercise its rights and remedies under the Loan Agreement, the Other Documents
or at law.
(b) To the extent Agent makes any additional Advances after the date
hereof, such Advances shall not constitute either a waiver of, nor agreement to
forbear by Agent with respect to the Existing Default or any future violation or
Event of Default under the Loan Agreement or the Other Documents, including,
without limitation, the Existing Default. No such additional Advances by Agent
shall, directly or indirectly, in any way whatsoever, impair, prejudice or
otherwise adversely effect Agent's right at any time and from time to time to
exercise any right, privilege or remedy in connection with the Loan Agreement or
related documents or amend or alter the provisions of the Loan Agreement or the
Other Documents or
constitute a course of dealing or other basis for altering any Obligation of
Borrowers or any other Person or any right, privilege or remedy of Agent under
the Loan Agreement or the Other Documents.
(c) Although Agent is not presently taking any immediate action with
respect to the Existing Default except as set forth above, Agent hereby reserves
all its rights and remedies under the Loan Agreement, the Other Documents and
applicable law, and its election not to exercise any such right or remedy at the
present time shall not (a) preclude Agent from ceasing at any time to make
Advances, (b) limit in any manner whatsoever Borrowers' obligation to comply
with, and Agent's right to insist on Borrowers' compliance with, each and every
term of the Loan Agreement and the Other Documents or (c) constitute a waiver of
any Event of Default or any right or remedy available to Agent under the Loan
Agreement, the Other Documents or applicable law, and Agent hereby expressly
reserves its rights with respect to the same.
(d) No failure or delay on the part of Agent in exercising any right or
remedy under the Loan Agreement and no course of dealing between Borrowers and
Agent shall operate as a waiver of any such right or remedy nor shall any single
or partial exercise of any right or remedy under the Loan Agreement preclude any
other or further exercise thereof or the exercise of any other right or remedy
under the Loan Agreement. Agent expressly reserves all of its rights and
remedies under the Loan Agreement.
3. Amendments to Loan Agreement. Subject to the satisfaction of Section 4
below, and effective as of July 1, 2010, the Loan Agreement is hereby amended as
follows:
(a) Section 1.2 of the Loan Agreement is hereby amended by inserting the
following defined terms in appropriate alphabetical order:
"Deferred Amortization Amounts" shall mean, for each month commencing on or
after May 1, 2010 through and including December 1, 2010, the difference between
(x) $125,000 and (y) the amount of the scheduled principal payment with respect
to the Term Loan actually made for such month pursuant to Section 2.4 of this
Agreement.
"Term Loan Overadvance Amount" shall mean, on any date, the greater of (A) $0
and (B) difference between (x) the outstanding principal balance of the Term
Loan and (y) 80% of the orderly liquidation value of the Borrowers' Rig Fleet
Equipment and other Equipment, as determined by Agent in its reasonable
discretion after reviewing the most recent OLV Appraisal conducted pursuant to
Section 9.16 of this Agreement.
(b) Section 2.4 of the Loan Agreement is hereby amended by amending and
restating the third sentence thereof to read in its entirety as set forth below:
"The Term Loan shall be, with respect to principal, payable monthly commencing
on May 1, 2009, and on the first day of each month thereafter, as follows: (a)
$97,500 per month, from the Amendment Xx. 0 Xxxxxxxxx Xxxx xxxxxxx Xxxxxxxx 00,
0000, (x) $125,000 per month, from January 1, 2010 through December 31, 2010;
provided, however, that the
Term Loan payment with respect to the months of (x) May 2010 and June 2010 shall
be in the amount of $50,000 payable on May 3, 2010, and June 1, 2010,
respectively and (y) July 2010 and August 2010, shall be in the amount of
$25,000, payable on July 1, 2010 and August 1, 2010, respectively, and (c)
$150,000 per month thereafter, with the balance payable upon expiration of the
Term, subject to acceleration upon the occurrence of an Event of Default under
this Agreement or termination of this Agreement."
(c) Section 2.21(b) of the Loan Agreement is hereby amended to read in its
entirety as set forth below:
"(b) Commencing with the fiscal quarter ending on or about September 30,
2010 and for each fiscal quarter ending thereafter, upon delivery of the
financial statements to Agent referred to in and required by Section 9.8 for
such fiscal quarter but in any event not later than forty-five (45) days after
the end of each such fiscal quarter, Borrowers shall prepay the outstanding
amount of the Advances in an amount equal to 75% of Excess Cash Flow for such
fiscal quarter, which amount shall be applied first, to the outstanding
principal installments of the Term Loan in inverse order of maturity until such
time as the Term Loan has been repaid by an amount equal to the aggregate amount
of all Deferred Amortization Amounts with respect to the Term Loan, second, to
the outstanding principal installments of the Term Loan in inverse order of
maturity until such time as the Term Loan has been repaid by an amount equal to
the Term Loan Overadvance Amount (if any), third, to reduce the Special Advance
Amount on a dollar-for-dollar basis with respect to any such Excess Cash Flow
until the Special Advance Amount is reduced to $0 (without any requirement to
repay Revolving Advances unless required by Section 2.5 after giving effect to
the reduction of the Special Advance Amount), fourth, to the outstanding
principal installments of the Term Loan in inverse order of maturity. In the
event that the applicable financial statement is not so delivered, then a
calculation based upon estimated amounts shall be made by Agent upon which
calculation Borrowers shall make the prepayment required by this Section
2.21(b), subject to adjustment when the applicable financial statement is
delivered to Agent as required hereby. The calculation made by Agent shall not
be deemed a waiver of any rights Agent or Lenders may have as a result of the
failure by Borrowers to deliver such financial statement."
4. Conditions of Effectiveness. This Agreement shall become effective when Agent
shall have received:
(a) four (4) copies of this Agreement executed by the Required Lenders and
each Borrower;
(b) an amendment fee of $5,000, which fee shall be fully-earned, payable
and non-refundable upon the execution of this Agreement by Borrowers and may be
charged to Borrowers' Account as a Revolving Advance;
(c) a common stock purchase warrant for 250,000 shares of common stock of
Best at an exercise price of $0.10 per share in form and substance satisfactory
to Agent and its counsel; and
(d) such other certificates, instruments, documents, agreements and
opinions of counsel as may be required by Agent or its counsel, each of which
shall be in form and substance satisfactory to Agent and its counsel.
5. Representations, Warranties and Covenants. Each Borrower hereby
represents, warrants and covenants as follows:
(a) This Agreement and the Loan Agreement constitute legal, valid and
binding obligations of such Borrower and are enforceable against such Borrower
in accordance with their respective terms.
(b) Upon the effectiveness of this Agreement, each Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended or waived hereby and agrees
that all such covenants, representations and warranties shall be deemed to have
been remade as of the effective date of this Agreement.
(c) The execution, delivery and performance of this Agreement and all other
documents in connection therewith has been duly authorized by all necessary
corporate action, and does not contravene, violate or cause the breach of any
agreement, judgment, order, law or regulation applicable to any Borrower.
(d) No Event of Default or Default has occurred and is continuing or would
exist after giving effect to this Agreement (other than the Existing Default).
(e) No Borrower has any defense, counterclaim or offset with respect to the
Loan Agreement or the Obligations.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of this Agreement, each reference in the Loan
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import shall mean and be a reference to the Loan Agreement as amended hereby.
Except as specifically amended herein, the Loan Agreement, and all other
documents, instruments and agreements executed and/or delivered in connection
therewith, shall remain in full force and effect, and are hereby ratified and
confirmed. This Agreement shall constitute an "Other Document" for all purposes
under the Loan Agreement.
(b) Except as expressly provided herein, the execution, delivery and
effectiveness of this Agreement shall not operate as a waiver of any right,
power or remedy of Agent or any Lender, nor constitute a waiver of any provision
of the Loan Agreement, or any
other documents, instruments or agreements executed and/or delivered under or in
connection therewith.
7. Release. The Borrowers hereby acknowledge and agree that: (a)
neither they nor any of their Affiliates have any claim or cause of action
against Agent or any Lender (or any of Agent's or any Lender's Affiliates,
officers, directors, employees, attorneys, consultants or agents) and (b) Agent
and each Lender have heretofore properly performed and satisfied in a timely
manner all of their respective obligations to the Borrowers under the Loan
Agreement and the Other Documents. Notwithstanding the foregoing, Agent and
each Lender wish (and the Borrowers agree) to eliminate any possibility that any
past conditions, acts, omissions, events or circumstances would impair or
otherwise adversely affect any of Agent's or such Lender's rights, interests,
security and/or remedies under the Loan Agreement and the Other Documents.
Accordingly, for and in consideration of the agreements contained in this
Agreement and other good and valuable consideration, each Borrower (for itself
and its Affiliates and the successors, assigns, heirs and representatives of
each of the foregoing) (each a "Releasor" and collectively, the "Releasors")
does hereby fully, finally, unconditionally and irrevocably release and forever
discharge Agent, each Lender and each of their respective Affiliates, officers,
directors, employees, attorneys, consultants and agents (each a "Released Party"
and collectively, the "Released Parties") from any and all debts, claims,
obligations, damages, costs, attorneys' fees, suits, demands, liabilities,
actions, proceedings and causes of action, in each case, whether known or
unknown, contingent or fixed, direct or indirect, and of whatever nature or
description, and whether in law or in equity, under contract, tort, statute or
otherwise, which any Releasor has heretofore had or now or hereafter can, shall
or may have against any Released Party by reason of any act, omission or thing
whatsoever done or omitted to be done on or prior to the date hereof arising out
of, connected with or related in any way to this Agreement, the Loan Agreement
or any Other Document, or any act, event or transaction related or attendant
thereto, or Agent's or any Lender's agreements contained therein, or the
possession, use, operation or control of any of the assets of agreements
contained therein, or the possession, use, operation or control of any of the
assets of the Borrowers, or the making of any advance, or the management of such
advance or the Collateral.
8. Governing Law. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York (other than those conflict of law rules that would defer to the
substantive law of another jurisdiction).
9. Cost and Expenses. Borrowers hereby agree to pay the Agent, on demand,
all costs and reasonable expenses (including reasonable attorneys' fees and
legal expenses) incurred in connection with this Agreement and any instruments
or documents contemplated hereunder.
10. Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.
11. Counterparts; Facsimile Signatures. This Agreement may be executed by
the parties hereto in one or more counterparts of the entire document or of the
signature pages hereto, each of which shall be deemed an original and all of
which taken together shall constitute
one and the same agreement. Any signature received by facsimile or electronic
transmission shall be deemed an original signature hereto.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first written above.
PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
By:__________________________
Name:
Title:
BEST ENERGY SERVICES, INC.
By:__________________________
Name:
Title:
XXX XXXXXX DRILLING COMPANY
By:__________________________
Name:
Title:
BEST WELL SERVICE, INC.
By:__________________________
Name:
Title:
[Signature Page to Amendment No. 12]
