Exhibit 10.1

 

Execution Version

 

WAIVER AND AMENDMENT NO. 16 TO AMENDED AND RESTATED CREDIT AGREEMENT

 

This Waiver and Amendment No. 16 to Amended and Restated Credit Agreement (this
“Agreement”) dated as of June 13, 2017 (the “Effective Date”), is among Select
Energy Services, LLC, a Delaware limited liability company (the “Borrower”), the
subsidiaries of the Borrower party hereto (collectively, the “Subsidiary
Guarantors”), SES Holdings, LLC, a Delaware limited liability company and the
parent company of the Borrower (the “Parent Company”; together with the
Subsidiary Guarantors, collectively, the “Affiliate Guarantors”; and the
Affiliate Guarantors together with the Borrower, collectively, the “Guarantors”
and each a “Guarantor”), Wells Fargo Bank, National Association, as
administrative agent (in such capacity, the “Administrative Agent”), issuing
lender (in such capacity, the “Issuing Lender”) and swing line lender (in such
capacity, the “Swing Line Lender”), and the Lenders (as defined below).

 

INTRODUCTION

 

A.            The Borrower, the Administrative Agent, the Issuing Lender, the
Swing Line Lender and lenders party thereto from time to time (the “Lenders”)
are parties to that certain Amended and Restated Credit Agreement dated as of
May 3, 2011, as heretofore amended (as so amended, the “Credit Agreement”; the
defined terms of which are used herein unless otherwise defined herein).

 

B.            On May 30, 2017, the Borrower acquired certain water transfer
assets, and related intellectual property, from Data Automated Water System, LLC
and JVH and Associates, LLC (the “Acquisition”). Such Acquisition was not in
compliance with Section 6.4(c)(ii)(B) of the Credit Agreement (the “Existing
Default”).

 

C.            Each Credit Party acknowledges that the Existing Default
constitutes an Event of Default arising under the Credit Agreement.

 

D.            Furthermore, the Borrower has requested that, subject to the terms
and conditions of this Agreement, the Lenders agree to (i) permanently waive the
Subject Defaults (as defined below) and (ii) amend certain provisions of the
Credit Agreement as set forth below.

 

THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Borrower, the Administrative Agent, the Issuing Lender, the Swing Line Lender
and the other parties hereto hereby agree as follows:

 

Section 1.              Defined Terms; Other Definitional Provisions.  As used
in this Agreement, each of the terms defined in the opening paragraph and the
Recitals above shall have the meanings assigned to such terms therein.  Each
term defined in the Credit Agreement and used herein without definition shall
have the meaning assigned to such term in the Credit Agreement, as amended
hereby, unless expressly provided to the contrary. Article, Section, Schedule,
and Exhibit references are to Articles and Sections of and Schedules and
Exhibits to this Agreement, unless otherwise specified.  The words “hereof”,
“herein”, and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement.  The term “including” means “including, without
limitation,”.  Paragraph headings have been inserted in this Agreement as a
matter of convenience for reference only and it is agreed that such paragraph
headings are not a part of this Agreement and shall not be used in the
interpretation of any provision of this Agreement.

 

--------------------------------------------------------------------------------

 

Section 2.              Waiver.

 

2.1          Each Credit Party hereby acknowledges the existence of the Existing
Default and each Default or Event of Default that may have arisen out of (a) any
failure, if any, to deliver notice of the Existing Default (the “Notice
Default”) and (b) any representation or warranty, if any, made by any Credit
Party that no Default had occurred and was continuing (but only to the extent
such representation or warranty was untrue solely due to the Existing Default or
the Notice Default) (the “Representation Defaults”, and together with the Notice
Defaults and the Existing Default, the “Subject Defaults”).  Subject to the
terms and conditions of this Agreement, the Lenders hereby permanently waive the
Subject Defaults.

 

2.2          The waiver by the Lenders described in this Section 2 is limited to
the Subject Defaults.  Such waiver is limited to the extent expressly described
herein and shall not be construed to be a consent to, or, except to the extent
set forth herein, a waiver of, noncompliance with Section 6.4 of the Credit
Agreement, or any other terms, provisions, covenants, warranties or agreements
contained in the Credit Agreement or in any of the other Credit Documents.  The
Lenders expressly reserve the right to exercise any rights and remedies
available to them in connection with any other present or future Defaults with
respect to the Credit Agreement or any other provision of any Credit Document
other than the Subject Defaults.  The description herein of the Subject Defaults
is based upon the information provided to the Lenders on or prior to the date
hereof and shall not be deemed to exclude the existence of any other Defaults. 
The failure of the Lenders to give notice to any Credit Party of any such other
Defaults is not intended to be nor shall be a waiver thereof.  Each Credit Party
hereby agrees and acknowledges that the Lenders require and will require strict
performance by the Credit Parties of all of their respective obligations,
agreements and covenants contained in the Credit Agreement and the other Credit
Documents, and no inaction or action by the Administrative Agent, Issuing
Lender, the Swing Line Lender, or any Lender regarding any Default (including
but not limited to the Subject Defaults) is intended to be or shall be a waiver
thereof other than the waiver of the Subject Defaults expressly provided for in
Section 2 of this Agreement.  Other than the waiver of the Subject Defaults
expressly provided for in Section 2 of this Agreement, each Credit Party hereby
also agrees and acknowledges that no course of dealing and no delay in
exercising any right, power, or remedy conferred to any Lender in the Credit
Agreement or in any other Credit Documents or now or hereafter existing at law,
in equity, by statute, or otherwise shall operate as a waiver of or otherwise
prejudice any such right, power, or remedy (collectively, the “Lender Rights”). 
For the avoidance of doubt, each Credit Party also agrees and acknowledges that
neither the waiver provided in this Agreement nor any other waiver provided by
the Lenders prior to the date hereof shall operate as a waiver of or otherwise
prejudice any of the Lender Rights other than the waiver of the Subject Defaults
expressly provided for in Section 2 of this Agreement.

 

Section 3.              Amendment to Credit Agreement.  Section 6.4(c)(ii) of
the Credit Agreement is hereby amended and restated in its entirety as follows:

 

(ii) after the satisfaction of the Covenant Changeover Condition: either
(A) such Acquisition is an Equity Funded Acquisition or a Pipeline Acquisition,
or (B) before and after giving effect to such Acquisition, Availability is no
less than $25,000,000.

 

Section 4.              Borrower’s Representations and Warranties.  Borrower
represents and warrants to the Administrative Agent and each Lender that:
(a) after giving effect to this Agreement, the representations and warranties
contained in the Credit Agreement, and the representations and warranties
contained in the other Credit Documents are true and correct in all material
respects (provided that to the extent any representation and warranty is
qualified as to “Material Adverse Change” or otherwise as to “materiality”, such
representation and warranty is true and correct in all respects) on and as of
the

 

2

--------------------------------------------------------------------------------

 

Effective Date as if made on as and as of such date except to the extent that
any such representation or warranty expressly relates solely to an earlier date,
in which case such representation or warranty is true and correct in all
material respects (provided that to the extent any representation and warranty
is qualified as to “Material Adverse Change” or otherwise as to “materiality”,
such representation and warranty is true and correct in all respects) as of such
earlier date; (b) after giving effect to this Agreement, no Default has occurred
and is continuing; (c) the execution, delivery and performance of this Agreement
are within the corporate power and authority of the Borrower and have been duly
authorized by appropriate corporate action and proceedings; (d) this Agreement
constitutes the legal, valid, and binding obligation of Borrower enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the rights of
creditors generally and general principles of equity; (e) there are no
governmental or other third party consents, licenses and approvals required in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Security Documents
are valid and subsisting and secure the Borrower’s obligations under the Credit
Documents.

 

Section 5.              Guarantors Representations and Warranties.  Each
Guarantor represents and warrants to the Administrative Agent and each Lender
that: (a) after giving effect to this Agreement, its representations and
warranties contained in the Guaranty Agreement to which such Guarantor is a
party and the representations and warranties contained in the other Credit
Documents to which such Guarantor is a party are true and correct in all
material respects on and as of the Effective Date as if made on as and as of
such date except to the extent that any such representation or warranty
expressly relates solely to an earlier date, in which case such representation
or warranty is true and correct in all material respects as of such earlier
date; (b) after giving effect to this Agreement, no Default has occurred and is
continuing under any Credit Document to which such Guarantor is a party; (c) the
execution, delivery and performance of this Agreement are within the corporate,
limited liability company, or partnership power and authority of such Guarantor
and have been duly authorized by appropriate corporate, limited liability
company, or partnership action and proceedings; (d) this Agreement constitutes
the legal, valid, and binding obligation of such Guarantor enforceable in
accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the rights of
creditors generally and general principles of equity; (e) there are no
governmental or other third party consents, licenses and approvals required in
connection with the execution, delivery, performance, validity and
enforceability of this Agreement; and (f) the Liens under the Security Documents
to which such Guarantor is a party are valid and subsisting and secure such
Guarantor’s and the Borrower’s obligations under the Credit Documents.

 

Section 6.              Conditions to Effectiveness.  This Agreement shall
become effective on the Effective Date and enforceable against the parties
hereto upon the occurrence of the following conditions precedent on or before
the Effective Date:

 

6.1          Agreement.  The Administrative Agent shall have received multiple
original counterparts of this Agreement duly executed by the Borrower, the
Guarantors, the Administrative Agent, and the Lenders constituting the Majority
Lenders.

 

6.2          Payment of Fees.  The Borrower shall have paid all fees and
expenses of the Administrative Agent’s outside legal counsel and other
consultants pursuant to all invoices presented for payment on or prior to the
Effective Date.

 

3

--------------------------------------------------------------------------------

 

Section 7.              Acknowledgments and Agreements.

 

7.1          Borrower acknowledges that on the date hereof all outstanding
Obligations are payable in accordance with their terms and Borrower waives any
defense, offset, counterclaim or recoupment with respect thereto.

 

7.2          The failure of the Lenders to give notice to any Credit Party of
any Default or Event of Default is not intended to be, nor shall it be, a waiver
thereof.  Each Credit Party hereby agrees and acknowledges that the Secured
Parties require and will require strict performance by the Credit Parties of all
of their respective obligations, agreements and covenants contained in the
Credit Agreement, as amended hereby, and the other Credit Documents (including
any action or circumstance which is prohibited or limited during the existence
of a Default or Event of Default), and no inaction or action by any Secured
Party regarding any Default or Event of Default is intended to be or shall be a
waiver thereof.  Each Credit Party hereby also agrees and acknowledges that no
course of dealing and no delay in exercising any right, power, or remedy
conferred to any Secured Party in the Credit Agreement or in any other Credit
Documents or now or hereafter existing at law, in equity, by statute, or
otherwise shall operate as a waiver of or otherwise prejudice any such right,
power, or remedy.

 

7.3          The Administrative Agent, the Issuing Lender, the Swing Line Lender
and the Lenders hereby expressly reserve all of their rights, remedies, and
claims under the Credit Documents.  Except as expressly provided in this
Agreement, nothing in this Agreement shall constitute a waiver or relinquishment
of (a) any Default or Event of Default under any of the Credit Documents other
than the waiver expressly provided in Section 2 above as to the Subject
Defaults, (b) any of the agreements, terms or conditions contained in any of the
Credit Documents, (c) any rights or remedies of the Administrative Agent, the
Issuing Lender, the Swing Line Lender or any Lender with respect to the Credit
Documents, or (d) the rights of the Administrative Agent, the Issuing Lender,
the Swing Line Lender or any Lender to collect the full amounts owing to them
under the Credit Documents.

 

7.4          The Parent Company, the Borrower, each Guarantor, Administrative
Agent, Issuing Lender and each other party hereto does hereby adopt, ratify, and
confirm the Credit Agreement, as amended hereby, and acknowledges and agrees
that the Credit Agreement, as amended hereby, is and remains in full force and
effect, and the Parent Company, the Borrower and the Guarantors acknowledge and
agree that their respective liabilities and obligations under the Credit
Agreement, as amended hereby, and the Guaranty, as amended, are not impaired in
any respect by this Agreement.  Nothing contained herein shall be construed as a
novation or termination of the Obligations.

 

7.5          From and after the Effective Date, all references to the Credit
Agreement and the Credit Documents shall mean the Credit Agreement and such
Credit Documents as amended by this Agreement.  This Agreement is a Credit
Document for the purposes of the provisions of the other Credit Documents. 
Without limiting the foregoing, any breach of representations, warranties, and
covenants under this Agreement shall be a Default or Event of Default, as
applicable, under the Credit Agreement.

 

Section 8.              Reaffirmation of the Guaranty.  Each Guarantor hereby
ratifies, confirms, acknowledges and agrees that its obligations under the
Guaranty are in full force and effect and that such Guarantor continues to
unconditionally and irrevocably guarantee the full and punctual payment of, when
due, whether at stated maturity or earlier by acceleration or otherwise, all of
the Guaranteed Obligations (as defined in the Guaranty), as such Guaranteed
Obligations may have been amended by this Agreement, and its execution and
delivery of this Agreement does not indicate or establish an approval or consent
requirement by such Guarantor under the Guaranty in connection with the
execution and delivery of

 

4

--------------------------------------------------------------------------------

 

amendments, consents or waivers to the Credit Agreement, the Notes or any of the
other Credit Documents.

 

Section 9.              Reaffirmation of Security Documents.  Each Credit Party
(a) represents and warrants to the Administrative Agent and each Lender that it
has no defenses to the enforcement of any Security Document to which it is a
party, (b) reaffirms the terms of and its obligations (and the Liens granted by
it) under each Security Document to which it is a party (including, as to the
Parent Company, Liens encumbering the Equity Interests of Affirm and Peak), and
agrees that each such Security Document will continue in full force and effect
to secure the Secured Obligations as the same may be amended, supplemented, or
otherwise modified heretofore, hereby and from time to time hereafter, and such
other amounts in accordance with the terms of such Security Document, and
(c) acknowledges, represents, warrants and agrees that the liens and security
interests granted by it pursuant to the Security Documents are valid and
subsisting and create a security interest to secure the Secured Obligations and
are first priority, fully enforceable, non-avoidable and duly perfected Liens as
required therein.

 

Section 10.            Counterparts.  This Agreement may be signed in any number
of counterparts, each of which shall be an original and all of which, taken
together, constitute a single instrument.  This Agreement may be executed by
facsimile signature and all such signatures shall be effective as originals.

 

Section 11.            Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted pursuant to the Credit Agreement.

 

Section 12.            Invalidity.  In the event that any one or more of the
provisions contained in this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.

 

Section 13.            Governing Law.  This Agreement shall be deemed a contract
under, and shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York without regard to conflicts of laws principles
(other than Sections 5-1401 and 5-1402 of the General Obligations Law of the
State of New York).

 

Section 14.            Patriot Act.  Each Lender that is subject to the PATRIOT
Act and the Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies each Credit Party that pursuant to the requirements of the
PATRIOT Act it is required to obtain, verify and record information that
identifies such Credit Party, which information includes the name and address of
such Credit Party and other information that will allow such Lender or the
Administrative Agent, as applicable, to identify such Credit Party in accordance
with the PATRIOT Act.

 

Section 15.            Entire Agreement. THIS AGREEMENT, THE CREDIT AGREEMENT AS
AMENDED BY THIS AGREEMENT, THE NOTES, AND THE OTHER CREDIT DOCUMENTS CONSTITUTE
THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

 

THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[The remainder of this page has been left blank intentionally.]

 

5

--------------------------------------------------------------------------------

 

EXECUTED to be effective as of the date first above written.

 

 

BORROWER:

 

 

 

SELECT ENERGY SERVICES, LLC

 

 

 

 

By:

/s/ John D. Schmitz

 

 

John D. Schmitz

 

 

Chief Executive Officer

 

 

 

 

GUARANTORS:

 

 

 

AFFIRM OILFIELD SERVICES, LLC

 

INTERNATIONAL WESTERN COMPANY, INC.

 

LONE STAR LLC

 

PEAK OILFIELD SERVICES, LLC

 

SELECT WATER REUSE, LLC

 

SELECT WESTERN COMPANY OF TEXAS, INC.

 

SES HOLDINGS, LLC

 

 

 

 

Each By:

/s/ John D. Schmitz

 

 

John D. Schmitz

 

 

Chief Executive Officer

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

ADMINISTRATIVE AGENT/LENDERS:

 

 

 

WELLS FARGO BANK,

 

NATIONAL ASSOCIATION

 

as Administrative Agent, Swing Line Lender,

 

Issuing Lender, Revolving Lender, and

 

Term Lender

 

 

 

 

By:

/s/ Timothy P. Gebauer

 

Name:

Timothy P. Gebauer

 

Title:

Director

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

BANK OF AMERICA, N.A.

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Tyler Ellis

 

Name:

Tyler Ellis

 

Title:

Director

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

ZB, N.A. DBA AMEGY BANK

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Rachel Pletcher

 

Name:

Rachel Pletcher

 

Title:

Vice President

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

COMERICA BANK

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ David Balderach

 

Name:

David Balderach

 

Title:

Senior Vice President

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

REGIONS BANK

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Lynn Johnston

 

Name:

Lynn Johnston

 

Title:

Senior Vice President

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

JPMORGAN CHASE BANK, N.A.

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Darren Vanek

 

Name:

Darren Vanek

 

Title:

Authorized Signatory

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

CITIBANK, N.A.

 

as a Revolving Lender and Term Lender

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

DEUTSCHE BANK AG NEW YORK BRANCH

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Marcus Tarkington

 

Name:

Marcus Tarkington

 

Title:

Director

 

 

 

 

By:

/s/ Peter Cucchiara

 

Name:

Peter Cucchiara

 

Title:

Vice President

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Bryan J. Matthews

 

Name:

Bryan J. Matthews

 

Title:

Authorized Signatory

 

 

 

 

By:

/s/ Peter J. Winstanley

 

Name:

Peter J. Winstanley

 

Title:

Authorized Signatory

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

CADENCE BANK, N.A.

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Tim Ashe

 

Name:

Time Ashe

 

Title:

Assistant Vice President

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

ROYAL BANK OF CANADA

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Kristan Spivey

 

Name:

Kristan Spivey

 

Title:

Authorized Signatory

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------

 

 

UBS AG, STAMFORD BRANCH

 

as a Revolving Lender and Term Lender

 

 

 

 

By:

/s/ Darlene Arias

 

Name:

Darlene Arias

 

Title:

Director

 

 

 

 

By:

/s/ Houssem Daly

 

Name:

Houssem Daly

 

Title:

Associate Director

 

Signature Page to

Waiver and Amendment No. 16 to Amended and Restated Credit Agreement

(Select Energy Services, LLC)

 

--------------------------------------------------------------------------------