EXHIBIT 10.1.1

 

RELEASE OF GUARANTY OBLIGATIONS

 

THIS RELEASE OF GUARANTY OBLIGATIONS (this “Release”) is made and entered into
effective as of September 30, 2004, by Wells Fargo Bank, N.A., as administrative
agent (the “Administrative Agent”) in favor of Varco I/P, Inc., Tubo-FGS,
L.L.C., Tuboscope (Holding U.S.), Inc., Fiber Glass Systems Holdings, L.L.C.,
Fiber Glass Systems, L.P., Varco, L.P., Tuboscope Pipeline Services, Inc.,
Environmental Procedures, Inc., TVI Holdings, L.L.C., Varco US Holdings, Inc.,
Advanced Wirecloth, Inc., and Tulsa Equipment Manufacturing Company
(collectively, the “Guarantors”).

 

WITNESSETH:

 

WHEREAS, reference is made to that certain Credit Agreement dated as of June 30,
2004 among Varco International, Inc. (the “Borrower”), the banks named therein
(the “Banks”), the Administrative Agent, Bank One, N.A. and Comercia Bank, as
Co-Syndication Agents, and Credit Suisse First Boston, as Documentation Agent
(the “Credit Agreement”; the defined terms of which are used herein unless
otherwise defined herein); and further

 

WHEREAS, the Guarantors are parties to that certain Subsidiary Guaranty and
Contribution Agreement dated as of June 30, 2004 (the “Guaranty”), which
guarantees the payment and performance of the obligations of the Borrower under
the Credit Agreement; and further

 

WHEREAS, Section 8.7 of the Credit Agreement provides that if the holders of the
Senior Notes provide a full and unconditional release of all guaranties made by
the Borrower’s Subsidiaries for the benefit of such holders, then the Banks and
Administrative Agent shall release the Guarantors from their respective
obligations under the Guaranty; and further

 

WHEREAS, concurrently with the effectiveness of this Release and pursuant to (a)
the Fifth Supplemental Indenture dated as of September 30, 2004, among the
Borrower, the Guarantors named therein and The Bank of New York Trust Company,
N.A., as trustee under the Indenture dated as of February, 25, 1998, (b) the
First Supplemental Indenture dated as of September 30, 2004, among the Borrower,
the Guarantors named therein and The Bank of New York Trust Company, N.A., as
trustee under the Indenture dated as of November 19, 2002, and (c) the Third
Supplemental Indenture dated as of September 30, 2004, among the Borrower, the
Guarantors named therein and The Bank of New York Trust Company, N.A., as
trustee under the Indenture dated as of May 1, 2001 (collectively, the “Senior
Note Releases”), the holders of such Senior Notes will provide a full and
unconditional release of all guaranties made by the Borrower’s Subsidiaries in
favor of such holders; and further

 

WHEREAS, Section 8.7 of the Credit Agreement authorizes the Administrative Agent
to execute and deliver to the Borrower on the behalf of the Banks any
agreements, documents or instruments, as shall be necessary or appropriate to
effect such release; and further

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WHEREAS, Section 9.1(e) of the Credit Agreement confirms that the release of any
Guarantor from its obligations under the Guaranty in accordance with Section 8.7
of the Credit Agreement does not require approval of the Banks.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained, effective upon the full and unconditional release of all guaranties
made by the Borrower’s Subsidiaries for the benefit of the holders of the Senior
Notes as provided in the Senior Note Releases, the Administrative Agent, on
behalf of the Banks as permitted under Section 8.7 of the Credit Agreement,
hereby releases and discharges the Guarantors from all present and future
obligations and liabilities under the Guaranty. Notwithstanding the foregoing,
this is a release of the Guarantors only, and nothing in this Release shall be
construed to be a release of any obligations of the Borrower in connection with
the Credit Agreement or any other Credit Document executed in connection
therewith.

 

THIS RELEASE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF TEXAS.

 

IN WITNESS WHEREOF, the Administrative Agent, on behalf of the Banks, has caused
this Release to be duly executed under seal by its officer thereunto duly
authorized, as of the date first above written.

 

WELLS FARGO BANK, N.A., as
Administrative Agent By:  

/s/ Eric R. Hollingsworth

   

Eric R. Hollingsworth

   

Vice President