{"id":41029,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/forbearance-agreement-comerica-bank-and-boots-amp-amp-coots.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"forbearance-agreement-comerica-bank-and-boots-amp-amp-coots","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/forbearance-agreement-comerica-bank-and-boots-amp-amp-coots.html","title":{"rendered":"Forbearance Agreement &#8211; Comerica Bank and Boots &#038; Coots International Well Control Inc."},"content":{"rendered":"<pre>                             FORBEARANCE AGREEMENT\n\n\n         This Agreement (the \"AGREEMENT\") by and among the undersigned entities\nidentified as Bank and Obligors is entered into effective this 21st day of\nDecember, 1999.\n\n         The parties hereto agree as follows:\n\n         1. At the specific request of the Obligors, Bank hereby agrees to\nforbear from exercising any remedy available to Bank upon the occurrence of an\nEvent of Default or Default (as such terms are defined in the Loan Agreement\ndescribed and identified on SCHEDULE 1 hereof, as are all defined terms used\nherein unless otherwise specifically defined herein) under the Loan Documents\n(described and identified on SCHEDULE 1 hereto) until the earlier of (a) a\nTriggering Event (hereinafter defined) or (b) April 30, 2000 (the earlier of\nwhich to occur is herein referred to as the Termination Date).\n\n         2. In consideration of the forbearance agreed to in Paragraph 1 hereof\nthe Obligors hereby agree to enter into and deliver to Bank on the effective\ndate of this Agreement, a Release and Covenant Not to Sue (the \"RELEASE\") in\nthe form of ANNEX 1 hereto.\n\n         3. As a material inducement to Bank to enter into the forbearance\nprovided in Paragraph 1 hereof, the Obligors agree to deliver the following\nfinancial reports to the Bank:\n\n                  a. on or before the 20th of each month with respect to the\n         prior month (1) monthly financial statements; (2) monthly comparison\n         of Budget against actual results for such time period broken down by\n         each operating unit and Subsidiary; and (3) the Baylor Management\n         Report (herein so called);\n\n                  b. on or before the 10th of each month with respect to the\n         prior month (1) an accounts payable aging detailed by each unit or\n         Subsidiary; (2) accounts receivable aging broken down by each unit or\n         Subsidiary; and (3) a backlog report for each unit or Subsidiary;\n\n                  c. on Wednesday of each calendar week, a rolling forecast of\n         twelve week cash requirements for the next twelve weeks;\n\n                  d. on or before the 5th business day of each month, a\n         Borrowing Base Certificate in the form attached hereto as ANNEX 2 as\n         of the last day of the preceding month; and\n\n                  e. within one business day of preparation, a copy of any\n         reports prepared by Conway, Del Genio, Gries &amp; Co., LLC (the\n         \"Consultants\"), consultants to the Obligors when and as received by\n         Borrower. Borrower shall not be required to continue the employment of\n         Consultants, but may terminate said employment at any time in\n         Borrower's sole discretion.\n\n         4. From and after the effective date hereof, the interest rate on the\nObligations shall accrue at the Base Rate plus three percent (3%); provided\nthat such accrued interest shall be payable on the first day of each month at a\nrate equal to the Base Rate plus one percent (1%) with the differential of two\npercent (2%) due on the Termination Date. Borrower hereby covenants and agrees\nto pay such interest on such dates.\n\n\nFORBEARANCE AGREEMENT - Page 1\n\n\n   2\n\n\n\n         5. Obligors shall pay Bank a Forbearance Fee (herein so called) of\n$100,000.00 due on the Termination Date, provided, however, that in the event\nBank is paid in full on or before February 29, 2000, such fee shall be reduced\nby fifty percent (50%).\n\n         6. Bank hereby agrees to negotiate in good faith to enter into\nmutually satisfactory terms and documentation to effectuate the Prudential\nInsurance Company of America (\"PRUDENTIAL\") proposal to provide a credit\nfacility to the Obligors (the \"NEW LIQUIDITY\"), provided that (1) Obligors\nshall be prohibited from paying any amounts on such New Liquidity to Prudential\nin the event that Obligors are in breach of any covenant contained in the\nTransaction Documents; (2) the principal of the New Liquidity shall be repaid\nonly from the net proceeds received by any of the Obligors from any equity\noffering after the date hereof; (3) Prudential shall agree not to receive any\npayment on its 11.28% Senior Subordinated Notes due July 23, 2006 outstanding\nin an aggregate principal amount of $30,000,000 while any portion of the\nObligations are outstanding; and (4) the Obligors shall only pay the\nConsultants from fundings by Prudential. The Obligors hereby covenant and agree\nto comply with the prohibitions contained in the immediately preceding\nsentence.\n\n         7. As conditions precedent to the effectiveness of this Agreement,\nObligors hereby agree to:\n\n                  a. Pay to Bank all accrued fees and expenses incurred by\n         Bank's advisors with respect to the Events of Default under the Loan\n         Documents, specifically being $135,000.00 to Bank to reimburse it for\n         such amounts due Munsch Hardt Kopf &amp; Harr, P.C. and to E &amp; Y\n         Restructuring, L.L.C. Such $135,000.00 shall be payable $100,000.00\n         upon execution of this Agreement, and $8,750.00 per month (on the 21st\n         day of each month commencing January 21, 2000) until paid in full;\n\n                  b. Execute and deliver to Bank each of the Transaction\n         Documents; and\n\n                  c. Cause their counsel, Greenberg, Peden, Siegmyer &amp; Oshman,\n         P.C., to deliver to them an opinion upon which Bank can rely opining\n         as to the enforceability of this Agreement and the Release in the form\n         of ANNEX 3.\n\n         8. In the event upon delivery of any Borrowing Base Certificate as\nrequired by paragraph 3 hereof, the Obligors shall be overadvanced under the\nBorrowing Base, Borrower hereby covenants that Borrowers shall pay such\noveradvance within five (5) business days from the due date of such Borrowing\nBase Certificate.\n\n         9. Obligors hereby covenant that (1) Obligors shall raise at least\ngross proceeds of $10 million in a equity offering and be in receipt of a firm\ncommitment for same, subject only to customary due diligence, on or before\nFebruary 29, 2000; and (2) Obligors shall cause the Consultants to allow Bank\nto participate in any communication by Consultants to any person not employed\nby the Obligors.\n\n         10. Borrower hereby covenants that Borrowers shall pay interest, at\nthe pay rate as provided for in paragraph 4 hereof, on the Obligations under\nthe Loan Documents on the first day of each month and shall pay any\nreimbursable expense incurred by Bank hereunder within three (3) days of\nreceipt of notice of the amount thereof.\n\n         11. This Agreement and the Release, (collectively, the \"TRANSACTION\nDOCUMENTS\") embodies the entire agreement of the parties and there are no\ncontemporaneous oral agreements which in any way modify the same.\n\n\nFORBEARANCE AGREEMENT - Page 2\n\n\n   3\n\n         12. Each party hereto represents to each other party herein that:\n\n                  a. Such party is a corporation duly organized, legally\n         existing, and in good standing under the laws of the jurisdiction of\n         its incorporation, except as may be specified in that certain legal\n         opinion of even date herewith issued by Thompson Knight Brown Parker &amp; Leahy L.L.P. which is addressed to Obligors; and\n\n                  b. The Transaction Documents provided for herein to be\n         delivered at the closing hereunder, will, when executed and delivered,\n         constitute the legal, valid, and binding obligation of such party.\n\n         13. The Obligors agree to cooperate with Bank and its representatives\nand to allow same to be present on the Obligors premises at all reasonable\nbusiness hours for the purpose of monitoring all aspects of the Obligors\nbusiness and the Obligors, their officers and employees shall extend the\nreasonable cooperation commensurate with sound management of the Obligors\nbusiness in permitting the Bank and its representatives to observe and gather\ninformation about the Obligors business, provided, however, the Bank shall\nexercise no control over the Obligors.\n\n         14. For purposes hereof the term \"TRIGGERING EVENT\" shall mean the\noccurrence of any one of the following:\n\n                  a. A material judgment adverse to any Obligor shall be\n         entered in any legal proceeding and such judgment shall not be stayed\n         within five (5) days after the entry of such judgment;\n\n                  b. The Obligors, or any of them, shall (i) execute an\n         assignment for the benefit of creditors, or (ii) become or be\n         adjudicated a bankrupt or insolvent, or (iii) admit in writing its\n         inability to pay its debts generally as they become due, or (iv) apply\n         for or agree by consent to the appointment of a supervisor,\n         conservator, receiver, trustee, or liquidator of it or of all or a\n         substantial part of its assets, or (v) file a voluntary petition\n         seeking reorganization or an arrangement with creditors, or to take\n         advantage of or seek any other relief under any debtor relief laws,\n         (vi) be the subject of an involuntary bankruptcy case commenced under\n         11 U.S.C. Section 303 (the United States Bankruptcy Code); or (vii)\n         file an answer admitting the material allegations of or consenting to,\n         or default in, a petition filed against it in any proceeding under any\n         debtor relief laws, or (vii) institute or voluntarily be or become a\n         party to any other judicial proceedings intended to effect a discharge\n         of its debts, in whole or in part, or a postponement of the maturity\n         or the collection thereof, or a suspension of any of the rights of the\n         Bank granted in any of the Transaction Documents or Loan Documents;\n\n                  c. An order, judgment, or decree shall be entered by any\n         court of competent jurisdiction approving a petition seeking\n         reorganization of Obligors, or any of them, or appointing a\n         supervisor, conservator, receiver, trustee, or liquidator of any such\n         Obligor or of all or any substantial part of its assets, and such\n         order, judgment, or decree is not permanently stayed or reversed\n         within thirty (30) calendar days after the entry thereof, or (ii) a\n         petition is filed against any Obligor seeking reorganization, an\n         arrangement with creditors, or any other relief under any debtor\n         relief laws, and such petition is not discharged within thirty (30)\n         calendar days after the filing thereof;\n\n                  d. The breach by Obligors, or any of them, of any covenant\n         contained in this Agreement; or\n\n\nFORBEARANCE AGREEMENT - Page 3\n\n   4\n\n                  e. The occurrence of any return item or not sufficient funds\n         event for more than five (5) days during any monthly time period.\n\n         15. The Obligors hereby affirm their obligations under the Loan\nDocuments.\n\n         16. Except as specifically provided in this Agreement, the terms of\nthe Loan Documents shall remain unchanged except that the Transaction Documents\nshall be included within the \"LOAN DOCUMENTS\". Except as expressly set forth in\nthis Agreement, nothing herein shall be deemed to constitute a waiver by the\nBank of any rights or remedies available under any of the Loan Documents or\nunder applicable law.\n\n         17. The Obligors hereby agree to reimburse the Bank upon demand for\nthe out-of-pocket expenses of the Bank incurred in connection with enforcement\nof the Bank's rights and remedies under the Loan Documents, including, without\nlimitation, the fees and the disbursements of Munsch Hardt Kopf &amp; Harr, P.C.,\ncounsel for the Bank, in connection with the negotiation, preparation,\nexecution and administration of the Transaction Documents or enforcement of the\nTransaction Documents and in advising the Bank as to its rights and its\nremedies under any of the Loan Documents or this Agreement and the fees and\nexpenses of E&amp;Y Restructuring, L.L.C. The Obligors hereby affirm that all\namounts for which Company is responsible under this paragraph 17 are additional\nObligations as provided for in the Loan Documents.\n\n         18. This Agreement shall be governed by, and construed in accordance\nwith, the laws of the State of Texas and applicable laws of the United States\nof America.\n\n         19. This Agreement may be executed in two or more counterparts, and it\nshall not be necessary that any one counterparts be executed by all of the\nparties hereto. Each fully or partially executed counterpart shall be deemed an\noriginal, but all such counterparts taken together shall constitute but one and\nthe same instrument. The manual signature of any party hereto that is\ntransmitted to any other party by facsimile shall be deemed for all purposes to\nbe an original signature.\n\n         20. Time is of the essence.\n\n         21. Obligors intend pursuant to the Loan Documents to grant Bank a\nsecurity interest or lien on each and every asset of each Obligor and in\nfurtherance thereof, the Obligors hereby covenant and agree to grant Bank, upon\nits request, a lien or security interest on any asset which is not currently\nsubject to a lien or security interest in favor of the Bank pursuant to\ndocumentation consistent with the Loan Documents. The foregoing covenant shall\nnot apply with respect to more than sixty-five percent (65%) of Obligor's stock\nin any controlled foreign corporation.\n\nFORBEARANCE AGREEMENT - Page 4\n\n\n   5\n\n         This Agreement is executed effective as of the date referenced above\nby duly authorized representatives of each of the entities signatory hereto.\n\n                                          BANK:\n\n                                          COMERICA BANK-TEXAS\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          OBLIGORS:\n\n                                          BOOTS &amp; COOTS INTERNATIONAL WELL\n                                          CONTROL, INC.\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          ABASCO, INC.\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          IWC ENGINEERING, INC.\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\nFORBEARANCE AGREEMENT - Page 5\n\n   6\n\n                                          IWC SERVICES, INC.\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          HELL FIGHTERS, INC.\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          CODE 3, INC.\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          ITS SUPPLY CORPORATION\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          ELMAGCO, INC.\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n\n\nFORBEARANCE AGREEMENT - Page 6\n\n   7\n\n                                          BAYLOR CONTROLS, INC.\n\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\n                                          BAYLOR ELECTRONICS, INC.\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n                                          BAYLOR COMPANY\n\n                                          By:\n                                             -----------------------------------\n                                          Name:\n                                               ---------------------------------\n                                          Title:\n                                                --------------------------------\n\n\nFORBEARANCE AGREEMENT - Page 7\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6924,7154],"corporate_contracts_industries":[9415,9413],"corporate_contracts_types":[9560,9567],"class_list":["post-41029","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-boots---coots-international-well-control-inc","corporate_contracts_companies-comerica-inc","corporate_contracts_industries-financial__banks","corporate_contracts_industries-energy__services","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41029","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41029"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41029"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41029"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41029"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}