Exhibit 10.1
THIRD AMENDMENT TO CREDIT
AGREEMENT
THIS THIRD AMENDMENT TO CREDIT
AGREEMENT (the “ Amendment ”) is made and
entered into effective as of July 10, 2009, by and between TX
ENERGY SERVICES, LLC, a Delaware limited liability company (“
TX Energy ”), C.C. FORBES, LLC, a Delaware limited
liability company (“ C.C. Forbes ”), and
SUPERIOR TUBING TESTER, LLC, a Delaware limited liability company
(“ Superior ,” together with TX Energy and C.C.
Forbes, the “ Borrowers ,” and individually, a
“ Borrower ”), FORBES ENERGY SERVICES LLC, a
Delaware limited liability company, as a Guarantor (the “
Company ”), FORBES ENERGY CAPITAL INC., a Delaware
corporation, as a Guarantor (“ Energy Capital ”)
and FORBES ENERGY SERVICES LTD., a company formed under the laws of
Bermuda, as a Guarantor (the “ New Parent ,”
together with Company and Energy Capital, collectively, the “
Guarantors ”), and CITIBANK, N.A., a national
association (“ Lender ”).
R
E C I
T A L S :
WHEREAS, Borrowers and Lender
entered into a Credit Agreement dated April 10, 2008 (which as
the same may have been or may hereafter be amended from time to
time is herein called the “ Credit Agreement ”;
the terms defined therein being used herein as therein defined
unless otherwise defined herein); and
WHEREAS, Borrowers and Lender desire
to amend the Credit Agreement to amend certain other terms and
provisions of the Credit Agreement.
A
G R E
E M E N T :
1. Amendment to the Credit
Agreement . Effective the date hereof, and subject to the
satisfaction of the conditions precedent set forth in
Section 2 hereof, the Credit Agreement is hereby:
(a) Amended to delete the definition
of “Material Adverse Change” in Section 1.1 in its
entirety and replace it with the following:
“ “ Material Adverse
Change ” means a material and adverse change, from the
state of affairs presented in the Initial Financial Statements or
as represented or warranted in any Loan Document, to (a) the
Consolidated financial condition of Parent or any New Parent,
whichever is then the ultimate parent company, and its Consolidated
Subsidiaries, (b) the Consolidated business, assets,
operations, properties or prospects, considered as a whole of
Parent or any New Parent, whichever is then the ultimate parent
company, (c) Borrowers’ and the Guarantors’
ability, taken as a whole, to timely pay the Obligations, or
(d) the enforceability of the material terms of any material
Loan Documents against the Restricted Persons. For the avoidance of
doubt, a Material Adverse Change shall not include any non-cash
charge or loss from the impairment write-downs or write-offs of
non-current assets required to be made in accordance with GAAP or
any non-cash item classified as an extraordinary, unusual or
nonrecurring gain, loss or charge, including any non-cash deferred
tax expense related to the effect of recognizing deferred tax items
upon a change in tax status.”
(b) Amended to add the following
sentence to the end of Section 1.3:
“Whenever the context may
require, the term “ Borrower ” used in the
singular form shall be deemed to include within its use the plural
form.”
(c) Amended to delete
Section 6.2(a) in its entirety and replace it with the
following:
“Within the time periods
specified in the SEC’s rules and regulations, including
extensions thereto, for the related Report on Form 10-K, but in no
event later than 90 days after the end of each Fiscal Year,
complete Consolidated financial statements of Parent or New Parent,
whichever is then the ultimate parent company, and its Consolidated
Subsidiaries together with all notes thereto, prepared in
reasonable detail in accordance with GAAP, together with an
unqualified opinion, based on an audit using generally accepted
auditing standards, by PricewaterhouseCoopers or other independent
certified public accounting firm of recognized standing selected by
Borrower and acceptable to Lender, stating that such Consolidated
financial statements have been so prepared. These financial
statements shall contain a Consolidated balance sheet as of the end
of such Fiscal Year and Consolidated statements of earnings, of
cash flows, and of changes in owners’ equity for such Fiscal
Year, each setting forth in comparative form the corresponding
figures for the preceding Fiscal Year. In addition, concurrent with
the delivery of such financial statements, Parent or New Parent,
whichever is then the ultimate parent company, will furnish an
opinion by such accountants independently assessing Parent’s
or New Parent’s, whichever is then the ultimate parent
company, internal controls over financial reporting in accordance
with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard
No. 2, and Section 404 of the Sarbanes-Oxley Act of 2002
expressing a conclusion that contains no statement that there is a
material weakness in such internal controls, except for such
material weaknesses as to which Lender does not object; provided
however, for the Fiscal Year ending 2008 the material weaknesses
set forth on Section 6.2 of the Disclosure Schedule shall be
permitted. Within 10 business days after the delivery of the
financial statements required above, Parent or any New Parent,
whichever is then the ultimate parent company, will furnish or
cause to be furnished company prepared consolidating financial
statements containing a consolidating balance sheet as of the end
of such Fiscal Year and consolidating statements of earnings and of
changes in owner’s equity for such Fiscal Year, each setting
forth in comparative form the corresponding figures for the
preceding Fiscal Year.”
2
(d) Amended to delete
Section 6.2(b) in its entirety and replace it with the
following:
“As soon as available after
the end of each Fiscal Quarter, and in any event within the time
periods specified in the SEC’s rules and regulations,
including extensions thereto, for the related Report on Form 10-Q
or 10-K, as applicable, but in no event later than 45 days after
the end of each Fiscal Quarter, Consolidated balance sheet as of
the end of such Fiscal Quarter and Consolidated statements of
earnings and cash flows for such Fiscal Quarter and for the period
beginning on the first day of the then current Fiscal Year to the
end of such Fiscal Quarter of Parent or any New Parent, whichever
is then the ultimate parent company, and its Consolidated
Subsidiaries, all in reasonable detail and prepared in accordance
with GAAP, subject to changes resulting from normal year-end
adjustments and the absence of footnotes. In addition, Parent will,
together with each such set of financial statements and each set of
financial statements furnished under subsection (a) of this
section, furnish a certificate in the form of Exhibit D (herein
called the “ Compliance Certificate ”) signed by
a Responsible Officer of Borrower and Parent or any New Parent,
whichever is then the ultimate parent company, stating that such
financial statements are accurate and complete in all material
respects (subject to normal year-end adjustments and the absence of
footnotes), stating that he/she has reviewed the Loan Documents,
containing calculations showing compliance (or non-compliance) at
the end of such Fiscal Quarter with the requirements of
Section 8.2 and stating that no Default exists at the end of
such Fiscal Quarter or at the time of such certificate or
specifying the nature and period of existence of any such Default.
Within 10 business days after the delivery of the financial
statements required above, Parent or any New Parent, whichever is
then the ultimate parent company, will furnish or cause to be
furnished company prepared consolidating balance sheet as of the
end of such Fiscal Quarter and consolidating statements of earnings
for such Fiscal Quarter and for the period beginning on the first
day of the then current Fiscal Year to the end of such Fiscal
Quarter of Parent or any New Parent, whichever is then the ultimate
parent company, and its Consolidated Subsidiaries, all in
reasonable detail and prepared in accordance with GAAP, subject to
changes resulting from normal year-end adjustments and the absence
of footnotes.”
(e) Amended to delete
Section 7.5(d) in its entirety and replace it with the
following:
“(d) Dispositions of equipment
so long as (i) at least seventy-five percent (75%) of the
purchase price for such asset shall be paid solely in cash or Cash
Equivalents, (ii) no Default or Event of Default shall exist
prior to or after giving effect to such sale, and (iii) within
365 days of receipt of such net cash proceeds the net cash proceeds
of such sale shall have been applied (1) to prepay the
Obligations and other Indebtedness under any credit facility
permitted under Section 7.1, and if the Indebtedness repaid is
revolving credit Indebtedness, such Restricted Person will be
required to correspondingly reduce commitments with respect
thereto, (2) to acquire (including by merger or consolidation)
all or substantially all of the assets of, or Equity
