Document:

Unassociated Document

    
      

    

    Exhibit
      4.1

     

    REGISTRATION
      RIGHTS AGREEMENT

    

    This
      Registration Rights Agreement (the “Agreement”) is dated as of March 3, 2006, by
      and between BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC., a Delaware
      corporation (the “Corporation”), and HWC ENERGY SERVICES, INC., a
      Texas
      corporation (including its successors and any assignee of rights hereunder
      permitted by Section 17 hereof, “HWC”).

     

    WHEREAS,
      in connection with, and as partial consideration for, the Corporation’s
      acquisition of the Target Subsidiaries pursuant to the terms of the Transaction
      Agreement, HWC will receive shares of Common Stock of the Corporation in a
      transaction exempt from registration under the Securities Act; and

     

    WHEREAS,
      the Corporation and HWC deem it to be in their respective best interests to
      enter into this Agreement to set forth the rights and obligations of the parties
      in connection with public offerings and resales of such shares.

     

    ACCORDINGLY,
      in consideration of the premises and mutual covenants and obligations
      hereinafter set forth, the Corporation and HWC hereby agree as
      follows:

     

    
      	 	
              SECTION
                1.

            	
              DEFINITIONS. 

            

    

     

    As
      used
      in this Agreement, the following terms have the following meanings:

     

    (a)     “Closing
      Date” means the closing date of the transactions contemplated by the Merger
      Agreement.

     

    (b)     “Commission”
      means the Securities and Exchange Commission or any other Federal agency at
      the
      time administering the Securities Act.

     

    (c)  “Common
      Stock” means the Common Stock, par value $0.00001, of the
      Corporation.

     

    (d)     “Exchange
      Act” means the Securities Exchange Act of 1934 or any successor Federal statute,
      and the rules and regulations of the Commission promulgated thereunder, all
      as
      the same shall be in effect from time to time.

     

    (e)     “Miscellaneous
      Shares” means at any time those shares of Common Stock which do not constitute
      Primary Shares or Registrable Shares.

     

    (f)     “Person”
      shall be construed broadly and shall include an individual, a partnership,
      a
      corporation, an association, a joint stock company, a limited liability company,
      a trust, a joint venture, an unincorporated organization and a governmental
      entity or any department, agency or political subdivision thereof.

     

    (g)     “Primary
      Shares” means at any time the authorized but unissued shares of Common Stock and
      shares of Common Stock held by the Corporation in its treasury.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (h)     “Registrable
      Shares” means (i) the 26,462,137 shares of Common Stock acquired by HWC pursuant
      to the Merger Agreement, (ii) any other securities of the Corporation into
      or
      for which the Registrable Shares may be exchanged, converted or reclassified
      or
      which may be issued or issuable with respect to the Registrable Shares or such
      other securities by way of a stock dividend or stock split or in connection
      with
      a combination of shares, recapitalization, merger, consolidation or other
      reorganization or otherwise, (iii) any shares of Common Stock acquired
      subsequent thereto, and (iv) any securities received in respect of the
      foregoing, in each case in clauses (i) through (iv) which at any time are held
      by HWC. As to any particular Registrable Shares, once issued, such Registrable
      Shares shall cease to be Registrable Shares when (A) they have been registered
      under the Securities Act, the registration statement in connection therewith
      has
      been declared effective, and the Registrable Shares have been disposed of
      pursuant to and in the manner described in such effective registration
      statement, (B) the Registrable Shares are sold or distributed pursuant to Rule
      144, or (C) the Registrable Shares have ceased to be outstanding.

     

    (i)     “Rule
      144” means Rule 144 promulgated under the Securities Act or any successor rule
      thereto.

     

    (j)    “Securities
      Act” means the Securities Act of 1933 or any successor Federal statute, and the
      rules and regulations of the Commission thereunder, all as the same shall be
      in
      effect from time to time.

     

    (k)     “Shelf
      Registration Statement” means the Initial Shelf Registration Statement or any
      Subsequent Shelf Registration Statement.

     

    (l)     “Transaction
      Agreement” means that certain Transaction Agreement dated as of November 21,
      2005 by and among the Corporation, HWC Acquisition LLC, HWC Merger Corporation,
      Hydraulic Well Control, LLC and HWC.

     

    (m)     “Target
      Subsidiaries” means HWCES International, a Cayman Islands corporation, HWC
      Limited, a Louisiana corporation, and Hydraulic Well Control, LLC, a Delaware
      limited liability company. 

     

    

      
        	 	
                SECTION
                  2.

              	
                REQUIRED
                  SHELF REGISTRATION. 

              

      

       

    

    (a)     The
      Corporation shall file with the SEC a shelf registration statement covering
      the
      Registrable Shares for an offering to be made on a continuous or delayed basis
      pursuant to Rule 415 promulgated under the Securities Act (the “Initial Shelf
      Registration Statement”) by HWC in the manner designated by it (including,
      without limitation, a plan of distribution specified by HWC which shall provide
      HWC broad latitude in the manner of disposing of the Registrable Shares,
      including through block trades, “bought deals,” traditional underwritten
      offerings, ordinary brokerage sales and sales outside the Shelf Registration
      Statement pursuant to Rule 144). The Corporation shall not permit any
      securities other than the Registrable Shares to be included in the Initial
      Shelf
      Registration Statement or any Subsequent Shelf Registration Statement.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (b)     The
      Corporation will cause, by the 30th
      day
      after the Closing Date, the Initial Shelf Registration Statement to be prepared
      and filed with the Commission and use its reasonable best efforts to have such
      Initial Shelf Registration Statement declared effective by the Commission as
      soon as practicable thereafter. The Corporation shall use its reasonable best
      efforts to keep the Initial Shelf Registration Statement continuously effective
      under the Securities Act (the “Effectiveness Period”) until the earlier of
      (i) the later of (A) the date which is 24 months from the Closing Date and
      (B) such time as HWC ceases to own at least 5% of the outstanding shares of
      Common Stock of the Corporation, and (ii) the later of (x) the fourth
      anniversary of the Closing Date and (y) the earliest date that HWC may then
      dispose of all its Registrable Shares without restriction under Rule 144(k)
      promulgated under the Securities Act). Notwithstanding the foregoing, the
      Corporation’s obligations under this Section 2(b) shall immediately terminate
      upon the sale of all Registrable Shares covered by any Shelf Registration
      Statement in the manner set forth and as contemplated in such Shelf Registration
      Statement.

     

    (c)     If
      the
      Initial Shelf Registration Statement or any Subsequent Shelf Registration
      Statement ceases to be effective for any reason at any time during the
      Effectiveness Period (other than because of the sale of all of the securities
      registered thereunder), the Corporation shall, in addition to fulfilling its
      obligations under Section 2(d) below, within five Business Days of such
      cessation of effectiveness or, if such cessation is reasonably foreseeable,
      prior to such cessation, as appropriate either (i) amend such Shelf Registration
      Statement in a manner to obtain the withdrawal of the order suspending the
      effectiveness thereof (ii) or file an additional shelf registration statement
      pursuant to Rule 415 promulgated under the Securities Act (each, a
“Subsequent Shelf Registration Statement”) covering all of the Registrable
      Shares covered by and not sold under the Initial Shelf Registration Statement
      or
      an earlier Subsequent Shelf Registration Statement. If a Subsequent Shelf
      Registration Statement is filed, the Corporation will cause the Subsequent
      Shelf
      Registration Statement to be declared effective under the Securities Act as
      soon
      as practicable after such filing and to keep such Subsequent Shelf Registration
      Statement continuously effective during the remainder of the Effectiveness
      Period.

     

    (d)     The
      Corporation shall promptly supplement and amend each Shelf Registration
      Statement if required by the rules, regulations or instructions applicable
      to
      the registration form used for such Shelf Registration Statement, if required
      by
      the Securities Act, or if reasonably requested by HWC or by any underwriter
      of
      the Registrable Shares acting on behalf of HWC. Notwithstanding the foregoing,
      the Corporation shall not be obligated to prepare more than three supplements
      or
      amendments for use in traditional underwritten public offerings of Registrable
      Shares under the Shelf Registration Statement which would involve a “road show”
or similar activity on the part of management of the Corporation (a “Traditional
      Underwritten Public Offering”) nor more than one such supplement or amendment in
      any twelve month period. Additionally, the Corporation may delay for a period
      of
      up to 60 days the filing or effectiveness of any supplement or amendment to
      the
      Shelf Registration Statement required in connection with an underwritten public
      offering if at the time of such request (i) the Corporation is engaged, or
      intends to engage within 60 days of the time of such request, in a firm
      commitment underwritten public offering of Primary Shares in which the holders
      of Registrable Shares may include Registrable Shares pursuant to Section 3
      and
      such plans or intentions have been approved by the Board of Directors of the
      Corporation prior to the time of such request (and the Corporation notifies
      HWC
      as soon as practicable after such request but in no event later than the second
      business day after such request) or (ii) on account of a suspension in
      accordance with Section 6 hereof. 

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (e)     Any
      Shelf
      Registration Statement filed in accordance with this Agreement shall be on
      such
      appropriate registration form of the Commission (i) as shall be selected by
      the
      Corporation and as shall be reasonably acceptable to HWC and (ii) as shall
      permit the disposition of the Registrable Shares in accordance with Section
      2(a). 

    

      
        	 	
                SECTION
                  3.

              	
                PIGGYBACK
                  REGISTRATION. 

              

      

    

     

    If
      the
      Corporation at any time proposes for any reason to register Primary Shares
      or
      Miscellaneous Shares under the Securities Act (other than on Form S-4 or Form
      S-8 promulgated under the Securities Act or any successor forms thereto), it
      shall promptly give written notice to HWC of its intention to so register such
      shares. Upon the written request, delivered to the Corporation within 30 days
      after delivery of any such notice by the Corporation, of HWC to include in
      such
      registration Registrable Shares held by HWC (which request shall specify the
      number of Registrable Shares requested to be included in such registration),
      the
      Corporation shall use its reasonable best efforts, subject to any limitations
      contained in registration rights agreements existing as of the date hereof,
      to
      cause all such Registrable Shares to be included in such registration on the
      same terms and conditions as the securities otherwise being sold in such
      registration; provided, however, that if the managing underwriter advises the
      Corporation that the inclusion of all Registrable Shares requested to be
      included in such registration would interfere with the successful marketing
      (including pricing) of the shares proposed to be registered, then the Primary
      Shares, Registrable Shares, and Miscellaneous Shares proposed to be included
      in
      such registration shall be included in the following
      order: (x) first, the Primary Shares; and (y) second, the Registrable Shares
      and
      Miscellaneous Shares
      sought
      to be included in the registration on a pro rata basis (based, for each holder
      of such shares, on the percentage derived by dividing (A) the number of
      Registrable Shares or Miscellaneous Shares beneficially owned by such holder
      on
      a fully diluted basis; by (B) the aggregate number of Registrable Shares and
      Miscellaneous Shares beneficially owned by all such holders on a fully diluted
      basis).

    

      
        	 	
                SECTION
                  4.

              	
                HOLDBACK
                  AGREEMENT. 

              

      

    

     

    If
      the
      Corporation at any time shall register shares of Common Stock under the
      Securities Act (including any registration pursuant to Sections 2 or 3) for
      sale
      to the public in an underwritten public offering, HWC shall not sell publicly,
      make any short sale of, grant any option for the purchase of, or otherwise
      dispose publicly of, any Common Stock (other than those shares of Common Stock
      included in such registration pursuant to Sections 2 or 3) without the prior
      written consent of the Corporation, for a period designated by the Corporation
      in writing to HWC, which period shall begin not more than 10 days prior to
      the
      date of the final prospectus pursuant to which such public offering shall be
      made and shall not last more than 90 days after the date of such final
      prospectus (but in no event longer than the period to which the Corporation
      and
      all executive officers and directors of the Corporation have agreed). The
      Corporation shall obtain the agreement of any person permitted to sell shares
      of
      Common Stock in a registration to be bound by and to comply with this Section
      4
      as if such person was a party to this Agreement. The Corporation will not seek
      to register shares that would trigger the provisions of this Section 4 for
      at
      least 90 days after the effectiveness of the Initial Shelf Registration
      Statement. Notwithstanding the foregoing, the provisions of this Section 4
      shall
      not apply to any stockholder that could then dispose of all of its Registrable
      Shares without restriction under Rule 144(k) promulgated under the
      Securities Act.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    
      	 	
              SECTION
                5.

            	
              PREPARATION
                AND FILING. 

            

    

     

    (a)     If
      and
      whenever the Corporation effects the registration of any Registrable Shares,
      the
      Corporation shall, as expeditiously as practicable and subject to the
      limitations set forth herein, effect such registration so as to permit the
      sale
      of the applicable Registrable Shares in accordance with the intended method
      or
      methods of distribution thereof and in conformity with any required time periods
      set forth herein, and in connection therewith (but not in limitation thereof)
      the Corporation shall:

     

    (i)     furnish,
      at least five business days before filing any Shelf Registration Statement
      that
      registers such Registrable Shares or any prospectus contained therein, or any
      amendments or supplements thereto and in connection therewith, furnish to HWC
      and to one counsel selected by HWC (such counsel is referred to herein as “HWC’s
      Counsel”), copies of all such documents proposed to be filed (it being
      understood that such five-business-day period need not apply to successive
      drafts of the same document proposed to be filed so long as such successive
      drafts are supplied to HWC’s Counsel in advance of the proposed filing by a
      period of time that is customary and reasonable under the circumstances), which
      documents will be subject to the review and comment of HWC and HWC’s Counsel,
      make such changes as are reasonably requested by HWC or HWC’s Counsel and,
      following such changes, file with the Commission such documents;

     

    (ii)     prepare
      and file with the Commission such amendments and supplements to such
      registration statement and the prospectus used in connection therewith as may
      be
      (A) reasonably requested by HWC (to the extent such request relates to
      information relating to HWC); (B) necessary to keep such registration statement
      effective for the period required under this Agreement (extended by any period
      during which such registration statement or related prospectus is not available
      for sales) or until all of such Registrable Shares have been disposed of (if
      earlier); and (C) necessary to comply with the provisions of the Securities
      Act
      with respect to the sale or other disposition of such Registrable
      Shares;

     

    (iii)     notify
      in
      writing HWC’s Counsel promptly of (A) the filing or effectiveness, as
      applicable, of such registration statement or prospectus or any amendment or
      supplement thereto; (B) the receipt by the Corporation of any notification
      with
      respect to any comments by the Commission with respect to such registration
      statement or prospectus or any amendment or supplement thereto or any request
      by
      the Commission for the amending or supplementing thereof or for additional
      information with respect thereto; (C) the receipt by the Corporation of any
      notification with respect to the issuance by the Commission of any stop order
      suspending the effectiveness of such registration statement or prospectus or
      any
      amendment or supplement thereto or the initiation or threatening of any
      proceeding for that purpose; and (D) the receipt by the Corporation of any
      notification with respect to the suspension of the qualification of such
      Registrable Shares for sale in any jurisdiction or the initiation or threatening
      of any proceeding for such purposes; 

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (iv)     make
      every reasonable effort to prevent or obtain at the earliest possible moment
      the
      withdrawal of any stop order with respect to such registration statement or
      other order suspending the use of any preliminary or final
      prospectus;

     

    (v)     cooperate
      with HWC and HWC’s Counsel in connection with any filings required to be made
      with the NASD;

     

    (vi)     use
      its
      reasonable efforts to register or qualify such Registrable Shares under such
      other securities or blue sky laws of such United States jurisdictions as HWC
      may
      reasonably request and do any and all other acts and things which may be
      reasonably necessary or advisable to enable HWC to consummate the disposition
      in
      such United States jurisdictions of the Registrable Shares; provided, however,
      that the Corporation will not be required to qualify generally to do business,
      subject itself to general taxation, or consent to general service of process
      in
      any jurisdiction where it would not otherwise be required to do so but for
      this
      clause (vi) or to make any changes in its bylaws or Certificate of
      Incorporation;

     

    (vii)     furnish
      to HWC such number of copies of any prospectus, including a preliminary
      prospectus, and such other documents as HWC may reasonably request in order
      to
      facilitate the public sale or other disposition of such Registrable
      Shares;

     

    (viii)   use
      its
      reasonable efforts to cause such Registrable Shares to be registered with or
      approved by such other governmental agencies or authorities as may be necessary
      by virtue of the business and operations of the Corporation to enable HWC to
      consummate the disposition of such Registrable Shares; 

     

    (ix)    notify
      HWC on a timely basis at any time when a prospectus relating to such Registrable
      Shares is required to be delivered under the Securities Act within the
      appropriate period mentioned in clause (ii) of this Section 5(a), of the
      happening of any event as a result of which the applicable registration
      statement or the prospectus included in such registration statement, as then
      in
      effect, includes an untrue statement of a material fact or omits to state a
      material fact required to be stated therein or necessary to make the statements
      therein not misleading (in the case of such prospectus or any preliminary
      prospectus, in light of the circumstances under which they were made) and,
      at
      the request of HWC, prepare and furnish to HWC a reasonable number of copies
      of
      a supplement to or an amendment of such prospectus or preliminary prospectus
      as
      may be necessary so that, as thereafter delivered to the offerees of such
      shares, such prospectus or preliminary prospectus shall not include an untrue
      statement of a material fact or omit to state a material fact required to be
      stated therein or necessary to make the statements therein not misleading in
      light of the circumstances under which they were made;

     

    (x)     subject
      to the execution of customary confidentiality agreements in form and substance
      reasonably satisfactory to the Corporation, make available upon reasonable
      notice and during normal business hours, for inspection by HWC, any underwriter
      participating in any disposition pursuant to such registration statement and
      any
      attorney, accountant or other agent retained by HWC or any underwriter
      (collectively, the “Inspectors”), all pertinent financial and other records,
      pertinent corporate documents and properties of the Corporation (collectively,
      the “Records”), as shall be reasonably necessary to enable them to exercise
      their due diligence responsibility, and cause the Corporation’s officers,
      directors and employees to supply all information (together with the Records,
      the “Information”) reasonably requested by any such Inspector in connection with
      such registration statement;

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (xi)    use
      its
      reasonable best efforts to obtain from its independent certified public
      accountants comfort letters and bring-down comfort letters in customary form
      and
      at customary times and covering matters of the type customarily covered by
      such
      letters; 

     

    (xii)   use
      its
      reasonable best efforts to obtain from its counsel an opinion or opinions in
      customary form, at customary times and covering customary matters and naming
      HWC
      as an additional addressee or party that may rely thereon;

     

    (xiii)    use
      its
      reasonable best efforts to comply with all applicable rules and regulations
      of
      the Commission and make generally available to its securityholders consolidated
      earnings statements satisfying the provisions of Section 11(a) of the Securities
      Act and Rule 158 promulgated thereunder (or any similar rule promulgated under
      the Securities Act) no later than 45 days after the end of any 12-month period
      (or 90 days after the end of any 12-month period if such period is a fiscal
      year), commencing on the first day of the first fiscal quarter of the
      Corporation after the effective date of a registration statement, which
      statements shall cover said 12-month periods;

     

    (xiv)    provide
      a
      transfer agent and registrar (which may be the same entity and which may be
      the
      Corporation) for such Registrable Shares;

     

    (xv)     not
      later
      than the effective date of the applicable registration statement, provide a
      CUSIP number for all Registrable Shares and provide the applicable transfer
      agent with printed certificates for the Registrable Shares which certificates
      shall be in a form eligible for deposit with The Depository Trust
      Company;

     

    (xvi)     issue
      certificates evidencing any Registrable Shares to be sold pursuant to any
      registration statement contemplated by Section 2 or Section 3 hereof and not
      bearing any restrictive legends; 

     

    (xvii)    list
      such
      Registrable Shares on any national securities exchange or automated quotation
      system on which any shares of the Common Stock are listed; or, if the Common
      Stock is not listed on a national securities exchange, use its reasonable
      efforts to qualify such Registrable Shares for inclusion on the automated
      quotation system of the National Association of Securities Dealers, Inc. (the
      “NASD”), or any national securities exchange;

     

    (xviii)     in
      connection with any underwritten public offering initiated pursuant to Section
      2(a), cooperate and participate in the marketing of such offering as if such
      registration was an underwritten primary registration (including causing its
      appropriate executive officers to participate in an appropriate “road show”);
      and

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (xix)    enter
      into such agreements (including an underwriting agreement in form, scope and
      substance as is customary in underwritten offerings, including customary lock-up
      provisions) and, whether or not the distribution is an underwritten public
      offering, take all such other actions reasonably requested by HWC or the
      underwriters, if any, to expedite or facilitate the disposition of the
      Registrable Shares. 

     

    (b)     HWC,
      upon
      receipt of any notice from the Corporation of any event of the kind described
      in
      Section 5(a)(ix) hereof, shall forthwith discontinue disposition of the
      Registrable Shares pursuant to the registration statement covering such
      Registrable Shares until its receipt of the copies of the supplemented or
      amended prospectus contemplated by Section 5(a)(ix) hereof, and, if so directed
      by the Corporation, such holder shall deliver to the Corporation all copies,
      other than permanent file copies then in such holder’s possession, of the
      prospectus covering such Registrable Shares at the time of receipt of such
      notice. 

    

      
        	 	
                SECTION
                  6.

              	
                SUSPENSION
                  PERIOD.

              

      

    

     

    (a)     Subject
      to the provisions of this Section 6 and a good faith determination by a majority
      of the Board of Directors of the Corporation that it is in the best interests
      of
      the Corporation to suspend the use of any Shelf Registration Statement following
      the effectiveness of such Shelf Registration Statement (and the filings with
      any
      international, federal or state securities commissions), the Corporation, by
      written notice to HWC, may direct HWC to suspend sales of the Registrable Shares
      pursuant to such Shelf Registration Statement for such times as the Corporation
      reasonably may determine is necessary and advisable (but in no event for more
      than 60 days in any 12-month period and in no event may the Corporation give
      such notice during the 14 days following the second business day following
      receipt by the Corporation of notice by HWC that HWC desires to promptly sell
      Registrable Shares), if the Corporation is engaged in confidential negotiations
      or other confidential business activities or upon the occurrence of an event,
      in
      each case (x) that would require additional disclosure of material non-public
      information by the Corporation in such Shelf Registration Statement (or such
      filings) not otherwise required to be disclosed under applicable law and which
      has not been so disclosed, (y) as to which the Company has a bona fide business
      purpose for preserving confidentiality, or (z) that renders the Company unable
      to comply with Commission requirements, in each case under circumstances that
      would make it impractical or inadvisable to promptly amend or supplement such
      Shelf Registration Statement on a post-effective basis, as applicable. Upon
      the
      earlier to occur of (i) the Corporation delivering to HWC an End of Suspension
      Notice, as hereinafter defined, and (ii) the end of the maximum permissible
      suspension period, the Corporation shall promptly amend or supplement such
      Shelf
      Registration Statement on a post-effective basis, if necessary, or take such
      action as is necessary to permit the resumed use of such Shelf Registration
      Statement by HWC in compliance with applicable law. The Corporation may suspend
      the effectiveness and use of any Piggyback Registration Statement at any time
      for an unlimited amount of time.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (b)    In
      the
      case of an event that causes the Corporation to suspend the use of a
      Registration Statement (a “Suspension
      Event”), the Corporation shall give written notice (a “Suspension Notice”) to
      HWC to suspend sales of the Registrable Shares included on such Registration
      Statement, and such notice shall state that such suspension shall continue
      only
      for so long as the Suspension Event or its effect is continuing and the
      Corporation is using its best efforts and taking all reasonable steps to
      terminate suspension of the effectiveness of such Shelf Registration Statement
      as promptly as possible. HWC shall not effect any sales of the Registrable
      Shares pursuant to such Shelf Registration Statement at any time after it has
      received a Suspension Notice from the Corporation and prior to receipt of an
      End
      of Suspension Notice (as defined below) with respect to such Shelf Registration
      Statement. If so directed by the Corporation, HWC will deliver to the
      Corporation (at the expense of the Corporation) all copies other than permanent
      file copies then in HWC’s possession of the prospectus covering the Registrable
      Shares at the time of receipt of the Suspension Notice. HWC may recommence
      effecting sales of the Registrable Shares pursuant to such Shelf Registration
      Statement following further notice to such effect (an “End of Suspension
      Notice”) from the Corporation, which End of Suspension Notice shall be given by
      the Corporation to HWC in the manner described above promptly following the
      conclusion of any Suspension Event and its effect.

    

      
        	 	
                SECTION
                  7.

              	
                EXPENSES.

              

      

    

     

    All
      expenses (other than discounts, fees and commissions of underwriters, selling
      brokers, dealer managers, sales agents and similar securities industry
      professionals, expenses of HWC’s Counsel, and applicable transfer taxes, if any,
      which shall be borne by HWC) incurred by the Corporation in complying with
      this
      Agreement, including, without limitation, all registration and filing fees
      (including all expenses incident to filing with the NASD), fees and expenses
      of
      complying with securities and blue sky laws, printing expenses, and fees and
      expenses of the Corporation’s counsel and accountants shall be paid by the
      Corporation.

    

      
        	 	
                SECTION
                  8.

              	
                INDEMNIFICATION.

              

      

    

     

    (a)    The
      Corporation shall indemnify and hold harmless HWC and its officers, directors,
      employees, partners, attorneys and agents, each underwriter, broker or any
      other
      Person acting on behalf of HWC, and each other Person, if any, who controls
      (within the meaning of the Securities Act or the Exchange Act) any of the
      foregoing Persons (collectively, the “HWC Indemnified Persons”) against any
      losses, claims, damages, liabilities or expenses, joint or several (or actions
      in respect thereof), to which any HWC Indemnified Person may become subject
      under the Securities Act or otherwise, insofar as such losses, claims, damages,
      liabilities or expenses (or actions in respect thereof) arise out of or are
      based upon (i) an untrue statement or allegedly untrue statement of a material
      fact contained in the registration statement under which such Registrable Shares
      were registered under the Securities Act, any preliminary prospectus or final
      prospectus contained therein or otherwise filed with the Commission, any
      amendment or supplement thereto, any document incorporated by reference therein,
      any “issuer free writing prospectus” (as defined in Rule 433 promulgated under
      the Securities Act) or any “issuer information” filed or required to be filed
      pursuant to Rule 433(d) under the Securities Act (in each case relating to
      the
      Registrable Shares) or any other document incident to registration or
      qualification of such Registrable Shares, (ii) the omission or alleged omission
      to state therein a material fact required to be stated therein or necessary
      to
      make the statements therein not misleading or, with respect to any preliminary
      prospectus or final prospectus, necessary to make the statements therein in
      light of the circumstances under which they were made not misleading, or (iii)
      any violation by the Corporation of the Securities Act or state securities
      or
      blue sky laws applicable to the Corporation and relating to action or inaction
      required of the Corporation in connection with such registration or
      qualification under the Securities Act or such state securities or blue sky
      laws
      (collectively, “Losses”); and shall reimburse each HWC Indemnified Person for
      any legal or other expenses reasonably incurred by any of them in connection
      with investigating or defending any such Loss; provided, however, that the
      Corporation shall not be liable in any such case to the extent that any such
      Loss (including any legal or other expenses incurred) arises out of or is based
      upon an untrue statement or allegedly untrue statement or omission or alleged
      omission made in said registration statement, preliminary prospectus, final
      prospectus, amendment, supplement, issuer free writing prospectus or document
      incident to registration or qualification of any Registrable Shares in reliance
      upon and in conformity with written information furnished to the Corporation
      by
      HWC or such underwriter, or an agent or representative thereof, specifically
      for
      use in the preparation thereof. This indemnity shall be in addition to any
      liability the Corporation may otherwise have.

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (b)   HWC
      shall
      indemnify and hold harmless the Corporation, each director of the Corporation,
      each officer of the Corporation who shall sign such registration statement
      and
      each Person who controls (within the meaning of the Securities Act or the
      Exchange Act) any of the foregoing Persons against any Loss, to the extent,
      but
      only to the extent, that such Loss is caused by any information furnished in
      writing by HWC to the Corporation specifically for inclusion in any preliminary
      prospectus relating to the Registrable Shares. The liability of HWC under this
      Section 8(b) shall in no event exceed the amount by which the proceeds received
      by HWC from sales of Registrable Shares giving rise to such obligations exceed
      the amount of any Loss that HWC has otherwise been required to pay by reason
      of
      such untrue statement or omission. This indemnity shall be in addition to any
      liability HWC may otherwise have.

     

    (c)    Promptly
      after receipt by an indemnified party (an “Indemnified Party”) of notice of the
      commencement of any action involving a claim referred to in the preceding
      paragraphs of this Section 8, such Indemnified Party will, if a claim in respect
      thereof is to be made against an indemnifying party (an “Indemnifying Party”),
      give written notice to the latter of the commencement of such action; provided,
      however, that the failure to so notify the Indemnifying Party shall not relieve
      it of any obligation or liability which it may have hereunder or otherwise
      except to the extent it is materially prejudiced by such failure. In case any
      such action is brought against an indemnified party, the Indemnifying Party
      will
      be entitled to participate in and to assume the defense thereof, jointly with
      any other Indemnifying Party similarly notified to the extent that it may wish,
      with counsel reasonably satisfactory to such Indemnified Party, and after notice
      from the Indemnifying Party to such Indemnified Party of its election so to
      assume the defense thereof, the Indemnifying Party shall not be responsible
      for
      any legal or other expenses subsequently incurred by the Indemnified Party
      in
      connection with the defense thereof (other than reasonable costs of
      investigation); provided, however, that the Indemnified Party shall have the
      right to select and employ separate counsel and to participate in the defense
      of
      such claim, but the fees and expenses of such counsel shall be at the expense
      of
      the Indemnified Party unless (A) the Indemnifying Party has agreed in writing
      to
      pay such fees or expenses, (B) the Indemnifying Party shall have failed to
      assume the defense of such claim within a reasonable time after having received
      notice of such claim from the Indemnified Party and to employ counsel reasonably
      satisfactory to the Indemnified Party, or (C) in the reasonable judgment of
      the
      Indemnified Party, based upon advice of its counsel, a conflict of interest
      may
      exist between the Indemnified Party and the Indemnifying Party with respect
      to
      such claims or the Indemnified Party has defenses separate and apart from the
      defenses of the Indemnifying Party with respect to such claims (in which case,
      if the Indemnified Party notifies the Indemnifying Party in writing that the
      Indemnified Party intends to employ separate counsel at the expense of the
      Indemnifying Party, the Indemnifying Party shall not have the right to assume
      the defense of such claim on behalf of such Person). If such defense is assumed
      by the Indemnifying Party, the Indemnifying Party shall not be subject to any
      liability for any settlement made without its consent, but such consent may
      not
      be unreasonably withheld; provided, that an Indemnifying Party shall not be
      required to consent to any settlement involving the imposition of equitable
      remedies or involving the imposition of any material obligations on such
      Indemnifying Party other than financial obligations for which such Indemnified
      Party will be indemnified hereunder. If the Indemnifying Party assumes the
      defense, the Indemnifying Party shall have the right to settle such action
      without the consent of the Indemnified Party; provided, that the Indemnifying
      Party shall be required to obtain such consent (which consent may be withheld
      in
      the Indemnified Party’s sole discretion) if the settlement includes any
      admission of wrongdoing on the part of the Indemnified Party or any equitable
      remedies or restriction on the Indemnified Party or its officers, directors
      or
      employees or if the Indemnified Party reasonably believes that the Indemnifying
      Party may not be able to satisfy its obligations thereunder. No Indemnifying
      Party shall consent to entry of any judgment or enter into any settlement which
      does not include as an unconditional term thereof the giving by the claimant
      or
      plaintiff to each Indemnified Party of an unconditional release from all
      liability in respect of such claim or litigation. The Indemnifying Party shall
      not, in connection with any proceeding or related proceedings in the same
      jurisdiction, be liable for the reasonable fees, disbursements and other charges
      of more than one separate firm admitted to practice in such jurisdiction at
      any
      one time from all Indemnified Parties unless the employment of more than one
      counsel has been authorized in writing by the Indemnifying Party, in each of
      which cases the Indemnifying Party shall be obligated to pay the reasonable
      fees
      and expenses of such additional counsel or counsels. The indemnification
      provided for under this Agreement shall remain in full force and effect
      regardless of any investigation made by or an behalf of the Indemnified Party
      or
      any officer, director or controlling Person of such Indemnified Party and shall
      survive the transfer of securities.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (d)   If
      the
      indemnification provided for in this Section 8 is held by a court of competent
      jurisdiction to be unavailable to an Indemnified Party with respect to any
      Loss
      or is insufficient to hold it harmless as contemplated by Section 8(a) or
      Section 8(b), then the Indemnifying Party, in lieu of indemnifying such
      Indemnified Party hereunder, shall contribute to the amounts paid or payable
      by
      such Indemnified Party as a result of such Loss in such proportion as is
      appropriate to reflect the relative fault of the Indemnifying Party on the
      one
      hand and of the Indemnified Party on the other in connection with the statements
      or omissions which resulted in such Loss as well as any other relevant equitable
      considerations. The relative fault of the Indemnifying Party and of the
      Indemnified Party shall be determined by reference to, among other things,
      whether the untrue or alleged untrue statement of a material fact or the
      omission or alleged omission to state a material fact relates to information
      supplied by the Indemnifying Party or by the Indemnified Party and the parties’
relative intent, knowledge, access to information and opportunity to correct
      or
      prevent such statement or omission. Notwithstanding anything in this Section
      8(d) to the contrary, no Indemnifying Party (other than the Corporation) shall
      be required pursuant to this Section 8(d) to contribute any amount in excess
      of
      the amount by which the net proceeds received by such Indemnifying Party from
      the sale of Registrable Shares in the offering to which the Losses of the
      Indemnified Parties relate exceed the amount of any damages that such
      Indemnifying Party has otherwise been required to pay by reason of such untrue
      statement or omission. The parties hereto agree that it would not be just and
      equitable if contribution pursuant to this Section 8(d) were determined by
      pro
      rata allocation or by any other method of allocation that does not take account
      of the equitable considerations referred to in the third preceding sentence.
      No
      person guilty of fraudulent misrepresentation (within the meaning of Section
      11(f) of the Securities Act) shall be entitled to contribution from any Person
      who was not guilty of such fraudulent misrepresentation. If indemnification
      is
      available under this Section 8, the Indemnifying Parties shall indemnify each
      Indemnified Party to the full extent provided in Sections 8(a) and 8(b) hereof
      without regard to the relative fault of said Indemnifying Parties or Indemnified
      Party.

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    

      
        	 	
                SECTION
                  9.

              	
                UNDERWRITING
                  AGREEMENT. 

              

      

      
         

        Notwithstanding
          the provisions of Section 8, to the extent that HWC shall enter into an
          underwriting or similar agreement, which agreement contains provisions
          covering
          one or more issues addressed in such Section, the provisions contained
          in such
          agreement addressing such issue or issues shall control with respect to
          HWC and
          the other parties to such agreement; provided, however, that any such agreement
          to which the Corporation is not a party shall not be binding upon the
          Corporation. 

      

    

    

      
        	 	
                SECTION
                  10.

              	
                SELECTION
                  OF UNDERWRITER.

              

      

    

     

    If
      any of
      the Registrable Shares covered by any Shelf Registration Statement are to be
      sold in a Traditional Underwritten Public Offering, the investment banker or
      bankers and manager or managers that will manage the offering will be selected
      by HWC with the consent of the Corporation, which consent shall not be
      unreasonably withheld.

    

      
        	 	
                SECTION
                  11.

              	
                INFORMATION
                  FROM HWC.

              

      

      
         

        HWC
          shall
          furnish to the Corporation such written information regarding HWC and the
          distribution proposed by HWC as the Corporation may reasonably request
          in
          writing and as shall be reasonably required in connection with any registration,
          qualification or compliance referred to in this
          Agreement.

      

    

     

    
      	 	
              SECTION
                12.

            	
              EXCHANGE
                ACT COMPLIANCE. 

            

    

     

    The
      Corporation shall comply with all of the reporting requirements of the Exchange
      Act required to be complied with by it and shall comply with all other public
      information reporting requirements of the Commission required to be complied
      with by it which are conditions to the availability of Rule 144 for the sale
      of
      the Common Stock. The Corporation shall cooperate with HWC in supplying such
      information as may be necessary for HWC to complete and file any information
      reporting forms presently or hereafter required by the Commission as a condition
      to the availability of Rule 144. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    
      	 	
              SECTION
                13.

            	
              MERGERS,
                ETC. 

            

    

     

    The
      Corporation shall not, directly or indirectly, enter into any merger,
      consolidation or reorganization in which the Corporation shall not be the
      surviving corporation unless the surviving corporation shall, prior to such
      merger, consolidation or reorganization, agree in writing to assume the
      obligations of the Corporation under this Agreement, and for that purpose
      references hereunder to “Registrable Shares” shall be deemed to include the
      shares of common stock or other securities, if any, which HWC would be entitled
      to receive in exchange for the Registrable Shares under any such merger,
      consolidation or reorganization, provided that, to the extent HWC receives
      securities that are by their terms convertible into shares of common stock
      or
      other securities of the issuer thereof, then any such shares of common stock
      or
      other securities as are issued or issuable upon conversion of said convertible
      securities shall be included within the definition of “Registrable
      Shares.”

     

    
      	 	
              SECTION
                14.

            	
              NO
                CONFLICT OF RIGHTS. 

            

    

     

    The
      Corporation shall not, after the date hereof, grant any registration rights
      which conflict with or are superior to the registration rights granted hereby.
      

     

    
      	 	
              SECTION
                15.

            	
              TERMINATION. 

            

    

     

    This
      Agreement shall terminate and be of no further force or effect when there shall
      no longer be any securities outstanding that meet the definition of “Registrable
      Shares”; provided, however, that Sections 7, 8, 20 and 24 shall not be so
      terminated but shall survive without limitation. 

     

    
      	 	
              SECTION
                16.

            	
              SUCCESSORS
                AND ASSIGNS. 

            

    

     

    This
      Agreement shall bind and inure to the benefit of the Corporation and HWC and,
      subject to Section 17, the respective successors and assigns of the Corporation
      and HWC.

     

    
      	 	
              SECTION
                17.

            	
              ASSIGNMENT. 

            

    

     

    HWC
      may
      assign its rights hereunder to any transferee of Registrable Shares constituting
      5% or more of the outstanding Common Stock of the Corporation at the time of
      such transfer; provided, however, that such transferee shall, as a condition
      to
      the effectiveness of such assignment, be required to execute a counterpart
      to
      this Agreement agreeing to be treated as a party to this Agreement, whereupon
      such transferee shall have the benefits of and shall be subject to the
      restrictions contained in this Agreement as if such transferee had originally
      been a party hereto.

     

    
      	 	
              SECTION
                18.

            	
              SEVERABILITY. 

            

    

     

    It
      is the
      desire and intent of the parties hereto that the provisions of this Agreement
      be
      enforced to the fullest extent permissible under the laws and public policies
      applied in each jurisdiction in which enforcement is sought. Accordingly, if
      any
      particular provision of this Agreement shall be adjudicated by a court of
      competent jurisdiction to be invalid, prohibited or unenforceable for any
      reason, such provision, as to such jurisdiction, shall be ineffective, without
      invalidating the remaining provisions of this Agreement or affecting the
      validity or enforceability of this Agreement or affecting the validity or
      enforceability of such provision in any other jurisdiction. Notwithstanding
      the
      foregoing, if such provision could be more narrowly drawn so as not to be
      invalid, prohibited or unenforceable in such jurisdiction, it shall, as to
      such
      jurisdiction, be so narrowly drawn, without invalidating the remaining
      provisions of this Agreement or affecting the validity or enforceability of
      such
      provision in any other jurisdiction.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    
      	 	
              SECTION
                19.

            	
              ENTIRE
                AGREEMENT.

            

    

     

    This
      Agreement, the Merger Agreement, and the other writings referred to herein
      or
      delivered pursuant hereto, contain the entire agreement among the parties with
      respect to the subject matter thereof and supersede all prior and
      contemporaneous arrangements or understandings with respect thereto.

     

    
      	 	
              SECTION
                20.

            	
              NOTICES. 

            

    

     

    All
      communications hereunder to any party shall be deemed to be sufficient if
      contained in a written instrument delivered in person or sent by facsimile
      transmission (with receipt confirmed), nationally-recognized overnight courier
      or first class registered or certified mail, return receipt requested, postage
      prepaid, addressed to such party at its address below or such other address
      as
      such party may hereafter designate in writing: 

    

      
        	 	
                (a)

              	
                if
                  to the Corporation, to:

              

      

       

      
        	 	
                Boots
                  & Coots International Well Control,
                  Inc.

              

      

      
        	 	
                11615
                  N. Houston Rosslyn

              

      

      
        	 	
                Houston,
                  Texas 77086

              

      

      
        	 	
                Attention:
                  General Counsel

              

      

      
        	 	
                Telephone:
                  (281)
                  931-8884

              

      

      
        	 	
                Facsimile:
                  

              

      

      

      
        	 	
                (b)

              	
                with
                  a copy (which shall not constitute notice)
                  to:

              

      

       

      
        	 	
                Thompson
                  & Knight LLP

              

      

      
        	 	
                333
                  Clay Street, Suite 3300

              

      

      
        	 	
                Houston,
                  Texas 77002

              

      

      
        	 	
                Attention:
                  William T. Heller, IV

              

      

      
        	 	
                Telephone:
                  (713) 951-5807

              

      

      
        	 	
                Facsimile:
                  (713) 654-1871

              

      

      

      
        	 	
                (c)

              	
                if
                  to HWC, to:

              

      

       

      
        	 	
                HWC
                  Energy Services, Inc.

              

      

      
        	 	
                333
                  Clay Street, Suite 4620

              

      

      
        	 	
                Houston,
                  Texas 77002

              

      

      
        	 	
                Attention:
                  Cindy B. Taylor

              

      

      
        	 	
                Telephone:
                  (713) 652-0582

              

      

      
        	 	
                Facsimile:
                  (713) 652-0499

              

      

      
        
          
          

        

        
          -14-

          
            

          

        

        
          
          

        

      

      
        	 	
                (d)

              	
                with
                  copies (which shall not constitute notice)
                  to:

              

      

      

      
        	 	
                Oil
                  States International, Inc.

              

      

      
        	 	
                13111
                  Northwest Freeway, Suite 200

              

      

      
        	 	
                Houston,
                  Texas 77040

              

      

      
        	 	
                Attention:
                  Vice President - Legal

              

      

      
        	 	
                Telephone:
                  (713) 510-2436

              

      

      
        	 	
                Facsimile:
                  (713) 510-2222

              

      

      

      
        	 	
                and

              

      

      

      
        	 	
                Vinson
                  & Elkins LLP

              

      

      
        	 	
                1001
                  Fannin Street, Suite 2300

              

      

      
        	 	
                Houston, TX 77002

              

      

      
        	 	
                Attention:
                  Scott N. Wulfe

              

      

      
        	 	
                Telephone:
                  (713) 758-2750

              

      

      
        	 	
                Facsimile:
                  (713) 615-5637

              

      

    

     

    All
      such
      notices, requests, consents and other communications shall be deemed to have
      been delivered (i) in the case of personal delivery, on the date of such
      delivery, (ii) in the case of delivery by facsimile transmission, on the date
      of
      confirmation of receipt, (iii) in the case of dispatch by nationally-recognized
      overnight courier, on the next business day following such dispatch and (iv)
      in
      the case of mailing, on the third business day after the posting
      thereof.

    

      
        	 	
                SECTION
                  21.

              	
                MODIFICATIONS;
                  AMENDMENTS; WAIVERS. 

              

      

       

    

    The
      terms
      and provisions of this Agreement may not be modified or amended, nor may any
      provision be waived, except pursuant to a writing signed by the Corporation
      and
      HWC. 

    

      
        	 	
                SECTION
                  22.

              	
                COUNTERPARTS;
                  FACSIMILE SIGNATURES. 

              

      

       

    

    This
      Agreement may be executed in any number of counterparts, and each such
      counterpart hereof shall be deemed to be an original instrument, but all such
      counterparts together shall constitute but one agreement. Facsimile counterpart
      signatures to this Agreement shall be acceptable at the Closing (as defined
      in
      the Merger Agreement) if the originally executed counterpart is delivered within
      a reasonable period thereafter.

    

      
        	 	
                SECTION
                  23.

              	
                HEADINGS. 

              

      

    

     

    The
      headings of the various sections of this Agreement have been inserted for
      convenience of reference only and shall not be deemed to be a part of this
      Agreement. 

     

    
      	 	
              SECTION
                24.

            	
              GOVERNING
                LAW; JURISDICTION.

            

    

     

    (a)    This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware applicable to contracts made and to be performed wholly
      therein.

     

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    (b)    The
      parties hereto agree that the appropriate, exclusive and convenient forum for
      any disputes between any of the parties hereto arising out of this Agreement
      or
      the transactions contemplated hereby shall be in any state or federal court
      in
      Houston, Texas, and each of the parties hereto irrevocably submits to the
      jurisdiction of such courts solely in respect of any legal proceeding arising
      out of or related to this Agreement. The parties further agree that the parties
      shall not bring suit with respect to any disputes arising out of this Agreement
      or the transactions contemplated hereby in any court or jurisdiction other
      than
      the above specified courts; provided,
      however,
      that
      the foregoing shall not limit the rights of the parties to obtain execution
      of
      judgment in any other jurisdiction. The parties further agree, to the extent
      permitted by law, that a final and unappealable judgment against a party in
      any
      action or proceeding contemplated above shall be conclusive and may be enforced
      in any other jurisdiction within or outside the United States by suit on the
      judgment, a certified or exemplified copy of which shall be conclusive evidence
      of the fact and amount of such judgment. Except to the extent that a different
      determination or finding is mandated due to the applicable law being that of
      a
      different jurisdiction, the parties agree that all judicial determinations
      or
      findings by a state or federal court in Houston, Texas with respect to any
      matter under this Agreement shall be binding.

     

    (c)    To
      the
      extent that any Party hereto has or hereafter may acquire any immunity from
      jurisdiction of any court or from any legal process (whether through service
      or
      notice, attachment prior to judgment, attachment in aid of execution, execution
      or otherwise) with respect to itself or its property, each such party hereby
      irrevocably (i) waives such immunity in respect of its obligations with respect
      to this Agreement and (ii) submits to the personal jurisdiction of any court
      described in Section 24(b).

     

    (d)    THE
      PARTIES HERETO AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL
      BY
      JURY IN ANY ACTION TO ENFORCE OR INTERPRET THE PROVISIONS OF THIS
      AGREEMENT.

     

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, THE undersigned have duly executed this Registration Rights
      Agreement as of the date first written above. 

     

    
      	 	
              BOOTS
                & COOTS INTERNATIONAL WELL CONTROL, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 
	 	 	 
	 	 	 
	 	 	 
	 	
              HWC
                ENERGY SERVICES, INC.

            
	 	 	 
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    -17-Unassociated Document

    
      
        

      

    

    Exhibit
      10.1

     

    Execution
      Copy

     

    
      

      

    

     

    CREDIT
      AND SECURITY AGREEMENT

     

    BY
      AND AMONG

     

    BOOTS
      & COOTS INTERNATIONAL WELL CONTROL, INC.,

    IWC
      SERVICES, LLC,

     

    AND

     

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION

     

    Acting
      through its WELLS FARGO BUSINESS CREDIT operating division

     

    March
      3, 2006

     

     

    
      

      

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    TABLE
      OF CONTENTS

     

    
      	
              ARTICLE
                I DEFINITIONS

            	
              1

            
	 	 
	
              Section
                1.1

            	
              Definitions

            	
              1

            
	
              Section
                1.2

            	
              Other
                Definitional Terms; Rules of Interpretation

            	
              21

            
	 	 	 
	
              ARTICLE
                II AMOUNT AND TERMS OF THE CREDIT FACILITY

            	
              22

            
	 	 
	
              Section
                2.1

            	
              Revolving
                Advances

            	
              22

            
	
              Section
                2.2

            	
              Procedures
                for Requesting Advances

            	
              22

            
	
              Section
                2.3

            	
              LIBOR
                Rate Advances.

            	
              23

            
	
              Section
                2.4

            	
              Letters
                of Credit.

            	
              24

            
	
              Section
                2.5

            	
              Special
                Account

            	
              25

            
	
              Section
                2.6

            	
              Equipment
                Term Advance.

            	
              25

            
	
              Section
                2.7

            	
              Payment
                of Equipment Term Note

            	
              25

            
	
              Section
                2.8

            	
              Interest;
                Default Interest Rate; Application of Payments; Participations;
                Usury.

            	
              26

            
	
              Section
                2.9

            	
              Fees.

            	
              27

            
	
              Section
                2.10

            	
              Time
                for Interest Payments; Payment on Non-Business Days; Computation
                of
                Interest and Fees.

            	
              29

            
	
              Section
                2.11

            	
              Lockbox
                and Collateral Account; Sweep of Funds.

            	
              30

            
	
              Section
                2.12

            	
              Term

            	
              30

            
	
              Section
                2.13

            	
              Voluntary
                Prepayment; Reduction of the Maximum Facility Amount; Termination
                of a
                Credit Facility by Borrower

            	
              31

            
	
              Section
                2.14

            	
              Mandatory
                Prepayment

            	
              31

            
	
              Section
                2.15

            	
              Revolving
                Advances to Pay Obligations

            	
              31

            
	
              Section
                2.16

            	
              Use
                of Proceeds

            	
              31

            
	
              Section
                2.17

            	
              Liability
                Records

            	
              32

            
	 	 	 
	
              ARTICLE
                III SECURITY INTEREST; OCCUPANCY; SETOFF

            	
              32

            
	 	 
	
              Section
                3.1

            	
              Grant
                of Security Interest

            	
              32

            
	
              Section
                3.2

            	
              Notification
                of Account Debtors and Other Obligors

            	
              32

            
	
              Section
                3.3

            	
              Assignment
                of Insurance

            	
              32

            
	
              Section
                3.4

            	
              Occupancy.

            	
              33

            
	
              Section
                3.5

            	
              License

            	
              33

            
	
              Section
                3.6

            	
              Financing
                Statement

            	
              33

            
	
              Section
                3.7

            	
              Setoff

            	
              34

            
	
              Section
                3.8

            	
              Collateral

            	
              34

            
	 	 	 
	
              ARTICLE
                IV CONDITIONS OF LENDING

            	
              35

            
	 	 
	
              Section
                4.1

            	
              Conditions
                Precedent to the Initial Advances and Letter of Credit

            	
              35

            
	
              Section
                4.2

            	
              Conditions
                Precedent to All Advances and All Issuances of a Letter of
                Credit

            	
              38

            
	 	 	 
	
              ARTICLE
                V REPRESENTATIONS AND WARRANTIES

            	
              39

            
	 	 
	
              Section
                5.1

            	
              Existence
                and Power; Name; Chief Executive Office; Inventory and Equipment
                Locations; Federal Employer Identification Number and Organizational
                Identification Number

            	
              39

            

    

    

    
      
        
          
          

        

        
          -i-

          
            

          

        

        
          
          

        

      

    

     

    
      	
              Section
                5.2

            	
              Capitalization

            	
              39

            
	
              Section
                5.3

            	
              Authorization
                of Borrowing under the Loan Documents and Senior Subordinated Loan
                Documents and consummation of the HWC Transactions; No Conflict as
                to Law
                or Agreements

            	
              39

            
	
              Section
                5.4

            	
              Legal
                Agreements

            	
              40

            
	
              Section
                5.5

            	
              Subsidiaries

            	
              40

            
	
              Section
                5.6

            	
              Financial
                Condition; No Adverse Change

            	
              40

            
	
              Section
                5.7

            	
              Litigation

            	
              40

            
	
              Section
                5.8

            	
              Regulation
                U

            	
              40

            
	
              Section
                5.9

            	
              Taxes

            	
              41

            
	
              Section
                5.10

            	
              Titles
                and Liens

            	
              41

            
	
              Section
                5.11

            	
              Intellectual
                Property Rights.

            	
              41

            
	
              Section
                5.12

            	
              Plans

            	
              42

            
	
              Section
                5.13

            	
              Default

            	
              42

            
	
              Section
                5.14

            	
              Environmental
                Matters.

            	
              42

            
	
              Section
                5.15

            	
              Submissions
                to Lender

            	
              43

            
	
              Section
                5.16

            	
              Financing
                Statements

            	
              43

            
	
              Section
                5.17

            	
              Rights
                to Payment

            	
              43

            
	
              Section
                5.18

            	
              Deposit
                Accounts, Tort Claims and Investment Property

            	
              44

            
	
              Section
                5.19

            	
              No
                Labor Disputes

            	
              44

            
	
              Section
                5.20

            	
              Compliance
                with Laws

            	
              44

            
	
              Section
                5.21

            	
              Brokers

            	
              44

            
	
              Section
                5.22

            	
              Insurance

            	
              44

            
	
              Section
                5.23

            	
              Existing
                Indebtedness and Guaranties

            	
              44

            
	
              Section
                5.24

            	
              Affiliate
                Agreements

            	
              44

            
	
              Section
                5.25

            	
              Investment
                Company Act

            	
              45

            
	
              Section
                5.26

            	
              Public
                Utility Holding Company Act

            	
              45

            
	
              Section
                5.27

            	
              Interests
                in Real Property

            	
              45

            
	
              Section
                5.28

            	
              Senior
                Subordinated Loan Documents and the HWC Transaction
                Documents

            	
              45

            
	
              Section
                5.29

            	
              Snubbing
                Units

            	
              45

            
	
              Section
                5.30

            	
              Financial
                Solvency

            	
              46

            
	
              Section
                5.31

            	
              Personal
                Property Evidenced by a Certificate of Title

            	
              46

            
	 	 	 
	
              ARTICLE
                VI COVENANTS

            	
              46

            
	 	 
	
              Section
                6.1

            	
              Reporting
                Requirements

            	
              47

            
	
              Section
                6.2

            	
              Financial
                Covenants.

            	
              50

            
	
              Section
                6.3

            	
              Permitted
                Liens; Financing Statements.

            	
              51

            
	
              Section
                6.4

            	
              Indebtedness

            	
              52

            
	
              Section
                6.5

            	
              Guaranties

            	
              52

            
	
              Section
                6.6

            	
              Investments
                and Subsidiaries

            	
              52

            
	
              Section
                6.7

            	
              Dividends;
                Distributions and Equity

            	
              53

            
	
              Section
                6.8

            	
              Salaries

            	
              53

            
	
              Section
                6.9

            	
              Books
                and Records; Collateral Examination, Inspection and
                Appraisals

            	
              53

            
	
              Section
                6.10

            	
              Account
                Verification

            	
              54

            
	
              Section
                6.11

            	
              Compliance
                with Laws.

            	
              54

            
	
              Section
                6.12

            	
              Payment
                of Taxes and Other Claims

            	
              55

            
	
              Section
                6.13

            	
              Maintenance
                of Properties.

            	
              55

            

    

    

    
      
        
          
          

        

        
          -ii-

          
            

          

        

        
          
          

        

      

    

     

    
      	
              Section
                6.14

            	
              Insurance

            	
              55

            
	
              Section
                6.15

            	
              Preservation
                of Existence

            	
              56

            
	
              Section
                6.16

            	
              Delivery
                of Instruments; New Deposit Accounts

            	
              56

            
	
              Section
                6.17

            	
              Sale
                or Transfer of Assets; Suspension of Business Operations

            	
              56

            
	
              Section
                6.18

            	
              Consolidation
                and Merger; Asset Acquisitions

            	
              57

            
	
              Section
                6.19

            	
              Sale
                and Leaseback

            	
              57

            
	
              Section
                6.20

            	
              Restrictions
                on Nature of Business

            	
              57

            
	
              Section
                6.21

            	
              Accounting

            	
              58

            
	
              Section
                6.22

            	
              Discounts

            	
              58

            
	
              Section
                6.23

            	
              Plans

            	
              58

            
	
              Section
                6.24

            	
              Place
                of Business; Name

            	
              58

            
	
              Section
                6.25

            	
              Constituent
                Documents

            	
              58

            
	
              Section
                6.26

            	
              Senior
                Subordinated Loan Documents, Securities Repurchase Agreement and
                HWC
                Transaction Documents

            	
              58

            
	
              Section
                6.27

            	
              Transactions
                with Affiliates

            	
              59

            
	
              Section
                6.28

            	
              Snubbing
                Units

            	
              59

            
	
              Section
                6.29

            	
              Performance
                by Lender

            	
              59

            
	 	 	 
	
              ARTICLE
                VII EVENTS OF DEFAULT, RIGHTS AND REMEDIES

            	
              60

            
	 	 
	
              Section
                7.1

            	
              Events
                of Default

            	
              60

            
	
              Section
                7.2

            	
              Rights
                and Remedies

            	
              62

            
	
              Section
                7.3

            	
              Certain
                Notices

            	
              63

            
	 	 	 
	
              ARTICLE
                VIII MISCELLANEOUS

            	
              63

            
	 	 
	
              Section
                8.1

            	
              No
                Waiver; Cumulative Remedies; Compliance with Laws; No
                Marshaling

            	
              63

            
	
              Section
                8.2

            	
              Amendments,
                Etc

            	
              64

            
	
              Section
                8.3

            	
              Notices;
                Communication of Confidential Information; Requests for
                Accounting

            	
              64

            
	
              Section
                8.4

            	
              Further
                Documents

            	
              64

            
	
              Section
                8.5

            	
              Costs
                and Expenses

            	
              65

            
	
              Section
                8.6

            	
              Indemnity

            	
              65

            
	
              Section
                8.7

            	
              Participants

            	
              66

            
	
              Section
                8.8

            	
              Execution
                in Counterparts; Telefacsimile Execution

            	
              66

            
	
              Section
                8.9

            	
              Retention
                of Borrower’s Records

            	
              66

            
	
              Section
                8.10

            	
              Binding
                Effect; Assignment; Complete Agreement; Sharing
                Information

            	
              66

            
	
              Section
                8.11

            	
              Severability
                of Provisions

            	
              67

            
	
              Section
                8.12

            	
              Headings

            	
              67

            
	
              Section
                8.13

            	
              Governing
                Law; Jurisdiction, Venue; Waiver of Jury Trial

            	
              67

            
	
              Section
                8.14

            	
              Non-applicability
                of Chapter 346

            	
              67

            
	
              Section
                8.15

            	
              BNC’s
                and Borrower’s Waiver of Rights Under Texas Deceptive Trade Practices
                Act

            	
              67

            

    

    

    
      
        
          
          

        

        
          -iii-

          
            

          

        

        
          
          

        

      

    

    

    CREDIT
      AND SECURITY AGREEMENT

     

    Dated
      as
      of March 3, 2006

     

    BOOTS
      & COOTS INTERNATIONAL WELL CONTROL, INC.,
      a
      Delaware corporation (“BNC”),
      IWC
      SERVICES, LLC,
      a Texas
      limited liability company, d/b/a Boots & Coots Services and successor by
      conversion from IWC Services, Inc., a Texas corporation (“IWC
      Services”)
      and
WELLS
      FARGO BANK,
      National Association (“Lender”),
      acting through its WELLS
      FARGO BUSINESS CREDIT
      operating division, hereby agree as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

    Section
      1.1     Definitions.  
      Except as otherwise expressly provided in this Agreement, the following terms
      shall have the meanings given them in this Section:

    

    “Accounts”
means
      all of Borrower’s accounts, as such term is defined in the UCC, including each
      and every right of Borrower to the payment of money, whether such right to
      payment now exists or hereafter arises, whether such right to payment arises
      out
      of a sale, lease or other disposition of goods or other property, out of a
      rendering of services, out of a loan, out of the overpayment of taxes or other
      liabilities, or otherwise arises under any contract or agreement, whether such
      right to payment is created, generated or earned by Borrower or by some other
      Person who subsequently transfers such Person’s interest to Borrower, whether
      such right to payment is or is not already earned by performance, and howsoever
      such right to payment may be evidenced, together with all other rights and
      interests (including all Liens) which Borrower may at any time have by law
      or
      agreement against any account debtor or other obligor obligated to make any
      such
      payment or against any property of such account debtor or other obligor; all
      including but not limited to all present and future accounts, contract rights,
      loans and obligations receivable, chattel papers, bonds, notes and other debt
      instruments, tax refunds and rights to payment in the nature of general
      intangibles.

     

    “Accounts
      Advance Rate”
means
      up to eighty-five percent (85%), or such lesser rate as Lender in its sole
      discretion may deem appropriate from time to time, provided
      that, as
      of any date of determination, the Accounts Advance Rate shall be reduced by
      one
      (1) percentage point for each percentage by which Dilution is in excess of
      4%.

     

    “Advance”
means
      a
      Revolving Advance or the Equipment Term Advance.

     

    “Affiliate”
or
      “Affiliates”
means
      any Person controlled by, controlling or under common control with Borrower
      or
      BNC, including any Subsidiary of Borrower or BNC. For purposes of this
      definition, “control,” when used with respect to any specified Person, means the
      power to direct the management and policies of such Person, directly or
      indirectly, whether through the ownership of voting securities, by contract
      or
      otherwise.

     

    “Agreement”
means
      this Credit and Security Agreement.

     

    “Approved
      Foreign Account Debtor”
means
      each of Sonatrach Division Production - Algeria, C. petrobas, ONGC, E.N.S.P.
      -
      Algeria, and Total E & P - Congo.

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    “Approved
      Credit Limit”
means
      the amount corresponding to the applicable Approved Foreign Account Debtor
      set
      forth in the table below:

     

    
      	
               Approved
                Foreign Account Debtor

               

            	
              Approved
                Credit Limit

               

            
	
              Sonatrach
                Division Production - Algeria

               

            	
              $3,000,000

               

            
	
              C.
                petrobas

               

            	
              $500,000

               

            
	
              ONGC

               

            	
              $300,000

               

            
	
              E.N.S.P.
                - Algeria

               

            	
              $1,250,000

               

            
	
              Total
                E & P - Congo 

               

            	
              $1,000,000

               

            

    

    

     

    “Assumed
      Maturity Date”
means,
      with respect to the Equipment Term Note, the fifth anniversary of the date
      of
      this Agreement.

     

    “Availability”
means
      the amount, if any, by which the Borrowing Base exceeds the sum of (i) the
      outstanding principal balance of the Revolving Note, and (ii) the L/C Amount.
      

     

    “Bank
      Guarantee”
has
      the
      meaning set forth in Section
      6.3.
      

     

    “Bankruptcy
      Code”
means
      Title 11 of the United States Code (11 U.S.C. § 101 et seq.), as
      amended.

     

    “BNC”
has
      the
      meaning ascribed to that term in the first paragraph.

     

    “BNC
      Merger”
means
      the consummation of the merger of HWC Acquisition into Borrower, with Borrower
      being the surviving entity. 

     

    “Book
      Net Worth”
means
      the aggregate of the common and preferred shareholders’ equity in BNC and its
      Subsidiaries, on a consolidated basis, determined in accordance with
      GAAP.

     

    “Borrower” means
      IWC
      Services.

     

    “Borrowing
      Base”
means
      at any time the least of:

     

    (a)     The
      Maximum Line Amount;

     

    (b)     The
      maximum principal amount of “Superior Debt” in effect from time to time under
      the Senior Subordinated Promissory Note; or

     

    (c)     Subject
      to change from time to time in Lender’s sole discretion, the sum
      of:

     

    (i)     The
      product of the Accounts Advance Rate times Eligible Accounts, plus

     

    
      
        
          
          

        

        
          Page
            2

          
            

          

        

        
          
          

        

      

    

    

    (ii)   The
      lesser of (A) the product of the Unbilled Accounts Advance Rate times Eligible
      Unbilled Accounts or (B) $2,500,000, less

     

    (iii)   The
      Borrowing Base Reserve, less

     

    (iv)   The
      VAT
      Tax Reserve, less

     

    (v)    Obligations
      that Borrower owes to Lender that have not yet been advanced on the Revolving
      Note, and the dollar amount that Lender in its Permitted Discretion then
      determines to be a reasonable determination of Borrower’s credit exposure with
      respect to Wells Fargo Bank Affiliate Obligations.

     

    “Borrowing
      Base Reserve”
means,
      as of any date of determination, such amounts (expressed as either a specified
      amount or as a percentage of a specified category or item) as Lender may from
      time to time establish and adjust in reducing Availability (a) to reflect
      events, conditions, contingencies or risks which, as determined by Lender in
      its
      sole discretion, do or may affect (i) the Collateral or its value,
      (ii) the assets, business or prospects of Borrower, or (iii) the
      security interests and other rights of Lender in the Collateral (including
      the
      enforceability, perfection and priority thereof), (b) to reflect Lender’s
      judgment in its sole discretion that any collateral report or financial
      information furnished by or on behalf of Borrower to Lender is or may have
      been
      incomplete, inaccurate or misleading in any material respect, (c) in
      respect of any state of facts that Lender determines constitutes a Default
      or an
      Event of Default, or (d) in respect of any judgment liens appearing on current
      lien and judgment search results for a Credit Party that have not been paid
      in
      full and released of record. 

     

    “Business
      Day”
means
      a
      day on which the Federal Reserve Bank of New York is open for business and,
      if
      such day relates to a LIBOR Advance, a day on which dealings are carried on
      in
      the London interbank eurodollar market. 

     

    “Capital
      Expenditures”
means
      for a period, any expenditure of money during such period for the lease,
      purchase or other acquisition of any capital asset.

     

    “Change
      of Control”
      means
      the
      occurrence of any of the following events:

     

    (a)     Any
      Person or “group” (as such term is used in Sections 13(d) and 14(d) of the
      Securities Exchange Act of 1934) becomes the “beneficial owner” (as defined in
      Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that
      a
      Person will be deemed to have “beneficial ownership” of all securities that such
      Person has the right to acquire, whether such right is exercisable immediately
      or only after the passage of time), directly or indirectly, of more than fifteen
      percent (15%) of the voting power of all classes of capital stock of BNC
      (however, if Oil States continues to beneficially own any of the capital stock
      issued in BNC pursuant to the HWC Transactions, then Oil States shall not be
      deemed a “beneficial owner” for purposes of this clause(a));

     

    (b)     IWC
      Services or any other Domestic Subsidiary of BNC (other than an Inactive
      Subsidiary that has merged into another Domestic Subsidiary in accordance with
      this Agreement) ceases to be a wholly-owned Subsidiary of BNC;

     

    
      
        
          
          

        

        
          Page
            3

          
            

          

        

        
          
          

        

      

    

    

    (c)     During
      any consecutive two-year period, individuals who at the beginning of such period
      constituted the board of Directors of BNC (together with any new Directors
      who
      were appointed by Oil States pursuant to the HWC Transaction Documents or whose
      election to such board of Directors, or whose nomination for election by the
      Owners of BNC, was approved by a vote of two thirds of the Directors then still
      in office who were either Directors at the beginning of such period or whose
      election or nomination for election was previously so approved) cease for any
      reason to constitute a majority of the board of Directors of BNC then in office;
      or 

     

    (d)     Jerry
      Winchester shall cease to actively manage BNC’s and its Subsidiaries day-to-day
      business activities and shall not be replaced within ninety (90) days by a
      Person having senior management level experience in Borrower’s industry
      acceptable to Lender. 

     

    “Collateral”
means
      all of Borrower’s Accounts, Intellectual Property Rights, chattel paper and
      electronic chattel paper, deposit accounts, documents, Equipment, General
      Intangibles, goods, instruments, Inventory, Investment Property,
      letter-of-credit rights, letters of credit, all sums on deposit in any
      Collateral Account, and any items in any Lockbox or in any deposit account
      associated therewith; together with (i) all substitutions and replacements
      for and products of any of the foregoing; (ii) in the case of all goods,
      all accessions; (iii) all accessories, attachments, parts, equipment and
      repairs now or hereafter attached or affixed to or used in connection with
      any
      goods; (iv) all warehouse receipts, bills of lading and other documents of
      title now or hereafter covering such goods; (v) all collateral subject to
      the Lien of any Security Document; (vi) all proceeds of claims of Borrower
      for recovery or avoidance, as the case may be, of obligations, transfers of
      property, or interests in property, offsets, lawful currency or its equivalents,
      and other types or kinds of property (or the value thereof) recoverable or
      avoidable under Chapter 5 of the Bankruptcy Code or under other applicable
      law; (vii) any money, or other assets of Borrower that now or hereafter come
      into the possession, custody, or control of Lender; (viii) the Special Account
      and all sums on deposit in the Special Account; (viii) proceeds of any and
      all of the foregoing items; (ix) books and records of Borrower, including
      all mail or electronic mail addressed to Borrower; and (x) all of the
      foregoing, whether now owned or existing or hereafter acquired or arising or
      in
      which Borrower now has or hereafter acquires any rights.

     

    “Collateral
      Account”
means
      the “Lender Account” as defined in the Wholesale Lockbox and Collection Account
      Agreement.

     

    “Collateral
      Assignment of Transaction Agreement”
means
      that certain Collateral Assignment of Transaction Agreement executed as of
      the
      date hereof by BNC, HWC Acquisition and HWC Merger Corporation in favor of
      Lender and consented to by Seller.

     

    “Collateral
      Assignment of Securities Repurchase Agreement”
means
      that certain Collateral Assignment of Securities Repurchase Agreement executed
      as of the date hereof by BNC in favor of Lender and consented to by Halliburton
      Energy Services, Inc.

     

    “Commitment”
means
      Lender’s commitment to make Advances to, and to issue Letters of Credit for the
      account of, Borrower pursuant to this Agreement.

     

    “Constituent
      Documents”
means,
      with respect to any Person, as applicable, such Person’s certificate of
      incorporation, articles of incorporation, by-laws, certificate of formation,
      articles of organization, limited liability company agreement, management
      agreement, operating agreement, shareholder agreement, partnership agreement
      or
      similar document or agreement governing such Person’s existence, organization or
      management or concerning disposition of ownership interests of such Person
      or
      voting rights among such Person’s owners.

     

    
      
        
          
          

        

        
          Page
            4

          
            

          

        

        
          
          

        

      

    

    

    “Credit
      Facility”
means
      the credit facility under which Revolving Advances, the Equipment Advance and
      Letters of Credit may be made available to Borrower by Lender under Article
      II.

     

    “Credit
      Party”
means
      BNC, Borrower or any BNC’s or Borrower’s Subsidiaries, and “Credit
      Parties”
means,
      collectively, BNC, Borrower and those Subsidiaries.

     

    “Current
      Maturities of Long Term Debt”
means
      the amount of BNC’s and its Subsidiaries’ current maturities of long-term debt
      on a consolidated basis determined in accordance with GAAP. 

     

    “Cut-off
      Time”
means
      11:00 a.m. San Antonio, Texas time.

     

    “Debt”
means
      of a Person as of a given date, all items of indebtedness or liability which
      in
      accordance with GAAP would be included in determining total liabilities as
      shown
      on the liabilities side of a balance sheet for such Person and shall also
      include the aggregate payments required to be made by such Person at any time
      under any lease that is considered a capitalized lease under GAAP.

     

    “Debt
      Service Coverage Ratio”
means,
      at any time of determination, the ratio of (i) the sum of (A) EBITDA
      of BNC and its Subsidiaries on a consolidated basis for the twelve (12) calendar
      months preceding the determination date (including the calendar month in which
      the determination date occurs) minus (B) Unfinanced Capital Expenditures of
      BNC and its Subsidiaries on a consolidated basis for the twelve (12) calendar
      months preceding the determination date (including the calendar month in which
      the determination date occurs) to (ii) (a) the Interest Expense for the
      twelve (12) calendar months preceding the determination date (including the
      calendar month in which the determination date occurs) plus (b) the Current
      Maturities of Long Term Debt of BNC and its Subsidiaries as of the determination
      date (provided
      the
      foregoing clause (ii)(b) shall not include for purposes of this definition
      the
      final principal payment due to Lender on Maturity Date for the repayment of
      outstanding principal amount of the Equipment Advance).

     

    “Default”
means
      an event that, with giving of notice or passage of time or both, would
      constitute an Event of Default.

     

    “Default
      Period”
means
      any period of time beginning on the day a Default or Event of Default occurs
      and
      ending on the date identified by Lender in writing as the date that such Default
      or Event of Default has been cured or waived.

     

    “Default
      Rate”
means,
      with respect to a Note, an annual interest rate in effect during a Default
      Period or following the Termination Date, which interest rate shall be equal
      to
      the lesser of (a) three percent (3%) over the applicable Floating Rate, or
      LIBOR Rate, as the case may be, and (b) the maximum lawful rate of interest,
      as
      each rate may change from time to time.

     

    
      
        
          
          

        

        
          Page
            5

          
            

          

        

        
          
          

        

      

    

    

    “Dilution”
means,
      as of any date of determination, a percentage, based upon the experience of
      the
      trailing twelve (12) month period ending on the date of determination, which
      is
      the result of dividing (a) actual bad debt write-downs, Receivables
      Discounts, advertising allowances, credits, or other dilutive items with respect
      to the Accounts as determined by Lender in its sole discretion during such
      period, by (b) Borrower’s net sales during such period (excluding
      extraordinary items) plus the amount of clause (a).

     

    “Director”
means
      a
      board member of a Person.

     

    “Distribution”
means,
      with respect to any Indebtedness, debt, liability or obligation, (a) any payment
      or distribution by any Person of cash, securities or other property, by set-off,
      off set or otherwise, on account of such Indebtedness, debt, liability or
      obligation, (b) any redemption, purchase or other acquisition of such
      Indebtedness or obligation by any Person or (c) the granting of any Lien or
      security interest to or for the benefit of the holders of such Indebtedness
      or
      obligation in or upon any property of any Person.

     

    “Domestic
      Subsidiary”
means
      any Subsidiary of BNC or Borrower organized under the laws of the United States
      or any political subdivision thereof.

     

    “EBITDA”
shall
      mean Net Income for the applicable period plus, to the extent deducted in
      calculating Net Income, Interest Expense, taxes paid, option expenses as a
      result of Financial Accounting Standards 123R, depreciation and amortization,
      all as allocable to such period and as determined in accordance with GAAP and
      without duplication. 

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time.

     

    “ERISA
      Affiliate”
means
      any trade or business (whether or not incorporated) that is a member of a group
      which includes a Credit Party and which is treated as a single employer under
      Section 414 of the IRC.

     

    “Eligible
      Accounts”
means
      all unpaid Accounts arising from the sale or lease of goods or the performance
      of services, net of any credits, but excluding any such Accounts having any
      of
      the following characteristics:

     

    (i)
     That
      portion of Accounts unpaid 90 days or more after the invoice date;

     

    (ii)     That
      portion of Accounts related to goods or services with respect to which a Credit
      Party has received notice of a claim or dispute, which a Lien has been filed
      against the account debtor’s property on behalf of a subcontractor who provided
      goods or performed services for Borrower, which are subject to a claim of offset
      or a contra account, or which reflect a reasonable reserve for warranty claims
      or returns;

     

    (iii)     That
      portion of Accounts not yet earned by the final delivery of goods or rendition
      of services, as applicable, by Borrower to the customer, including progress
      billings, and that portion of Accounts for which an invoice has not been sent
      to
      the applicable account debtor;

     

    
      
        
          
          

        

        
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            6

          
            

          

        

        
          
          

        

      

    

    

    (iv)    Accounts
      constituting (i) proceeds of copyrightable material unless such
      copyrightable material shall have been registered with the United States
      Copyright Office, or (ii) proceeds of patentable inventions unless such
      patentable inventions have been registered with the United States Patent and
      Trademark Office;

     

    (v)     Accounts
      not covered by clause (vii) below owed by any unit of government, whether
      foreign or domestic (provided,
      however,
      that
      there shall be included in Eligible Accounts that portion of Accounts owed
      by
      such units of government for which Borrower has provided evidence satisfactory
      to Lender that (A) Lender has a first priority perfected security interest
      and (B) such Accounts may be enforced by Lender directly against such unit
      of government under all applicable laws);

     

    (vi)   Accounts
      denominated in any currency other than United States dollars;

     

    (vii)   Accounts
      owed by an account debtor located outside the United States (including, without
      limitation, an Approved Foreign Account Debtor) which (i) are not (A) backed
      by
      a transferable bank letter of credit naming Lender as beneficiary or assigned
      to
      Lender, in Lender’s possession or control, and with respect to which a control
      agreement concerning the letter-of-credit rights is in effect, and acceptable
      to
      Lender in all respects, in its sole discretion, or (B) covered by a foreign
      receivables insurance policy acceptable to Lender in its sole discretion, and
      (ii) do not exceed the credit limit for such account debtor established by
      Lender in its sole discretion (or with respect to an Approved Foreign Account
      Debtor, the applicable Approved Credit Limit);

     

    (viii)   Accounts
      owed by an account debtor that is insolvent, the subject of bankruptcy
      proceedings or has gone out of business, or if Lender believes, in its sole
      discretion, that collection of such Account is insecure or that such Account
      may
      not be paid by reason of the customer’s financial inability to pay;

     

    (ix)     Accounts
      owed by an Owner of BNC (having “beneficial ownership” of more than five percent
      (5%) of the voting power of all classes of capital stock of BNC on a
      fully-diluted basis), Subsidiary, Affiliate, Officer or employee of
      Borrower;

     

    (x)     Accounts
      not subject to a duly perfected security interest in Lender’s favor or which are
      subject to any Lien in favor of any Person other than Lender;

     

    (xi)    That
      portion of Accounts that has been restructured, extended, amended or
      modified;

     

    (xii)   That
      portion of Accounts that constitutes advertising charges, shipping or freight
      charges, contract retainage amounts, bonded receivables, finance charges,
      service charges or sales or excise taxes;

     

    (xiii)   Accounts
      with respect to which Borrower has not instructed the account debtor to pay
      the
      Account to the Collateral Account; 

     

    (xiv)   Accounts
      owed by debtors located in countries not acceptable to Lender in its sole
      discretion; 

     

    
      
        
          
          

        

        
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            7

          
            

          

        

        
          
          

        

      

    

    

    (xv)     Accounts
      owed by an account debtor (other than by an Approved Foreign Account Debtor),
      regardless of whether otherwise eligible, to the extent that the aggregate
      balance of such Accounts exceeds 15% of the aggregate amount of all Accounts;
      

     

    (xvi)    Accounts
      owed by an Approved Foreign Account Debtor to the extent the aggregate balance
      of such Accounts exceeds its applicable Approved Credit Limit; 

     

    (xvii)   Accounts
      owed by an account debtor, regardless of whether otherwise eligible, if 35%
      or
      more of the total amount of Accounts due from such account debtor is ineligible
      under clauses (i), (ii), or (x) above; 

     

    (xviii)   That
      portion of Accounts attributable to work performed at Borrower’s request by or
      on behalf of a sub-contractor or another Person who is not an employee of
      Borrower to the extent the sub-contractor or other Person has not received
      payment in full for that work; and 

     

    (xix)     Accounts,
      or portions thereof, otherwise deemed ineligible by Lender in its sole
      discretion. 

     

    “Eligible
      Equipment”
means
      the Equipment that Lender, in its sole discretion, shall not deem ineligible,
      based on such considerations as Lender may deem appropriate, including whether
      the Equipment is subject to a perfected, first priority security interest in
      favor of Lender and no other Lien (other than a Permitted Lien). In addition,
      the Equipment shall not constitute Eligible Equipment if the Equipment
      (i) is a vehicle or other rolling stock, (ii) does not conform in all
      material respects to all standards imposed by any governmental body which has
      regulatory authority over such goods or the use or sale thereof, (iii) is
      located in a jurisdiction not acceptable to Lender, (iv) is subject to any
      agreement that limits, conditions or restricts Borrower’s or Lender’s right to
      sell or otherwise dispose of such Equipment, unless Lender is a party to such
      agreement; (v) is situated at a location not owned by Borrower, unless the
      owner or occupier of such location has executed in favor of Lender a lien waiver
      and access agreement or is a customer and has entered into a contract with
      Borrower that has been collaterally assigned to Lender, in each case acceptable
      to Lender in its sole discretion, (vi) is covered by a negotiable document
      of title, (vii) is not covered by insurance to the extent required under
      this Agreement, or (viii) is not operable, has not been refurbished or is
      not otherwise in good working condition.

     

    “Eligible
      Unbilled Accounts”
means
      all Accounts that would otherwise constitute Eligible Accounts but for Borrower
      not yet having received approval from the applicable governmental authority
      as
      to the work and services performed that gives rise to the Account. However,
      if
      (i) Borrower has received the approval, (ii) the governmental authority denies
      the approval or (iii) Borrower does not unconditionally receive the approval
      within ninety (90) days of the creation of the Account, then the Account shall
      not constitute an Eligible Unbilled Account.

     

    “Environmental
      Law”
means
      any federal, state, local or other governmental statute, regulation, law or
      ordinance dealing with the protection of human health and the
      environment.

     

    “Equipment”
means
      all of Borrower’s equipment, as such term is defined in the UCC, whether now
      owned or hereafter acquired, including all present and future machinery,
      vehicles, furniture, fixtures, manufacturing equipment, shop equipment, office
      and record-keeping equipment, parts, tools, supplies, and including specifically
      the goods described in any equipment schedule or list herewith or hereafter
      furnished to Lender by Borrower. Without limiting the foregoing, each Snubbing
      Unit shall constitute Equipment.

     

    
      
        
          
          

        

        
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            8

          
            

          

        

        
          
          

        

      

    

    

    “Equipment
      Term Advance” has
      the
      meaning set forth in Section 2.6(a).

     

    “Equipment
      Term Note”
means
      Borrower’s promissory note, payable to the order of Lender in substantially the
      form of Exhibit
      B
      hereto,
      as the same may be renewed and amended from time to time, and all replacements
      thereto.

     

    “Equity
      Interests”
shall
      mean, with respect to any Person, its equity ownership interests, its common
      stock and any other capital stock or other equity ownership units of such Person
      authorized from time to time, and any other shares, options, interests,
      participations or other equivalents (however designated) of or in such Person,
      whether voting or nonvoting, including, without limitation, common stock,
      options, warrants, preferred stock, phantom stock, membership units (common
      or
      preferred), stock appreciation rights, membership unit appreciation rights,
      convertible notes or debentures, stock purchase rights, membership unit purchase
      rights and all securities convertible, exercisable or exchangeable, in whole
      or
      in part, into any one or more of the foregoing.

     

    “Event
      of Default”
has
      the
      meaning set forth in Section
      7.1.

     

    “Financial
      Covenants”
means,
      collectively, the covenants set forth in Section
      6.2.

    

    “Floating
      Rate”
means
      (i) with respect to Floating Rate Advances evidenced by the Revolving Note,
      an annual interest rate equal the lesser of (x) to the sum of the Prime
      Rate plus the applicable Revolving Loan Margin, and (y) the maximum lawful
      rate of interest, and (ii) with respect to the Floating Rate Advances
      evidenced by the Equipment Term Note, an annual interest rate equal to the
      lesser of (x) the sum of the Prime Rate plus the applicable Term Loan
      Margin, and (y) the maximum lawful rate of interest, which interest
      rates shall, in each case, change when and as the Prime Rate, or the maximum
      lawful rate, as applicable, changes. 

     

    “Floating
      Rate Advance”
means
      each Advance for which Borrower has requested that it bear interest by reference
      to the Prime Rate in accordance with Article
      II.

     

    “Foreign
      Subsidiary”
means
      any Subsidiary that is not organized under the laws of the United States or
      any
      political subdivision thereof.

     

    “Funding
      Date”
has
      the
      meaning set forth in Section
      2.1.

     

    “GAAP”
means
      generally accepted accounting principles, applied on a basis consistent with
      the
      accounting practices applied in the financial statements described in
Section
      5.6.

     

    “General
      Intangibles”
means
      all of Borrower’s general intangibles, as such term is defined in the UCC,
      whether now owned or hereafter acquired, including all present and future
      Intellectual Property Rights, customer or supplier lists and contracts, manuals,
      operating instructions, permits, franchises, the right to use Borrower’s name,
      and the goodwill of Borrower’s business.

     

    
      
        
          
          

        

        
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            9

          
            

          

        

        
          
          

        

      

    

    

    “Guaranty”
means
      each unconditional continuing guaranty or unconditional continuing guaranty
      by
      BNC and each Domestic Subsidiary (other than Borrower) (each being a
“Guarantor”)
      in
      favor of the Lender (collectively, the “Guaranties”).

     

    “Hazardous
      Substances”
means
      pollutants, contaminants, hazardous substances, hazardous wastes, petroleum
      and
      fractions thereof, and all other chemicals, wastes, substances and materials
      listed in, regulated by or identified in any Environmental Law.

     

    “HWC”
means
      Hydraulic Well Control, LLC, a Delaware limited liability company.

     

    “HWC
      Acquisition”
means
      HWC Acquisition, LLC, a Delaware limited liability company.

     

    “HWC
      Limited”
means
      HWC Limited, a Louisiana corporation.

     

    “HWC
      Merger Corporation”
means
      HWC Merger Corporation, a Delaware corporation.

     

    “HWC
      Transactions”
means,
      collectively, the transactions contemplated by the Transaction Agreement,
      including (i) the transfer of all issued and outstanding capital stock in HWCES
      and HWC Limited to HWC Acquisition, (ii) the merger of HWC Merger Corporation
      into HWC, with HWC being the surviving entity and thereafter, the merger of
      HWC
      into HWC Acquisition, HWC Acquisition being the surviving entity, and (iii)
      the
      making of the Senior Subordinated Loans.

     

    “HWC
      Transaction Documents”
means
      all documents executed or delivered in connection with the HWC
      Transactions.

     

    “HWCES”
means
      HWCES International, a Cayman Island corporation.

     

    “Inactive
      Subsidiary”
means
      each of Boots & Coots Special Services, Inc., a Texas corporation, Elmagco,
      Inc., a Delaware corporation, Hell Fighters, Inc., a Texas corporation and
      IWC
      Engineering, Inc., a Texas corporation, each of which has no current business
      operations but if any such Person commences business activity in the future,
      it
      shall cease to be an “Inactive Subsidiary”.

     

    “Indebtedness”
has
      the
      meaning set forth in Section
      6.4.

     

    “Indemnified
      Liabilities”
has
      the
      meaning set forth in Section
      8.6.

     

    “Indemnitees”
has
      the
      meaning set forth in Section
      8.6.
      

     

    “IRC”
means
      the Internal Revenue Code of 1986, as amended from time to time.

     

    “Infringement”
or
      “Infringing”
when
      used with respect to Intellectual Property Rights means any infringement or
      other violation of Intellectual Property Rights.

     

    “Intellectual
      Property Rights”
means
      all actual or prospective rights arising in connection with any intellectual
      property or other proprietary rights, including all rights arising in connection
      with copyrights, patents, service marks, trade dress, trade secrets, trademarks,
      trade names or mask works.

     

    
      
        
          
          

        

        
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            10

          
            

          

        

        
          
          

        

      

    

    

    “Interest
      Expense”
means
      BNC’s and its Subsidiaries’ total gross interest expense on a consolidated basis
      during the applicable period (excluding interest income), and shall in any
      event
      include (i) interest expensed (whether or not paid) on all Debt,
      (ii) the amortization of debt discounts, (iii) the amortization of all
      fees payable in connection with the incurrence of Debt to the extent included
      in
      interest expense, and (iv) the portion of any capitalized lease obligation
      allocable to interest expense.

     

    “Interest
      Period”
means
      the period that commences on (and includes) the Business Day on which either
      a
      LIBOR Rate Advance is made or continued pursuant to Sections 2.2(a)
      or
2.3(b),
      or on
      which a Floating Rate Advance is converted to a LIBOR Rate Advance pursuant
      to
Section
      2.3(a),
      and
      ending on (but excluding) the Business Day numerically corresponding to such
      date that is one, two, three, six, or twelve months thereafter as designated
      by
      Borrower, during which period all or a portion of the outstanding principal
      balance of the LIBOR Rate Advance shall bear interest determined in relation
      to
      LIBOR; provided,
      however,
      that:

     

    (a)     No
      Interest Period may be selected for an Advance for a principal amount less
      than
      One Million Dollars ($1,000,000), and no more than six (6) different
      Interest Periods may be outstanding at any one time;

     

    (b)     If
      an
      Interest Period would otherwise end on a day which is not a Business Day, then
      the Interest Period shall end on the next Business Day thereafter, unless that
      Business Day is the first Business Day of a month, in which case the Interest
      Period shall end on the last Business Day of the preceding month;

     

    (c)     No
      Interest Period applicable to a Revolving Advance may end later than the
      Maturity Date; and

     

    (d)     In
      no
      event shall Borrower select Interest Periods with respect to Advances that,
      in
      the aggregate, would require payment of a contracted funds breakage fee under
      Section
      2.9(g)
      in order
      to make required principal payments.

     

    “Interest
      Payment Date”
has
      the
      meaning set forth in Section
      2.10(a).

     

    “Inventory”
means
      all of Borrower’s inventory, as such term is defined in the UCC, whether now
      owned or hereafter acquired, whether consisting of whole goods, spare or
      maintenance parts or components, supplies or materials, whether acquired, held
      or furnished for sale, for lease or under service contracts or for manufacture
      or processing, and wherever located.

     

    “Investment
      Property”
means
      all of Borrower’s investment property, as such term is defined in the UCC,
      whether now owned or hereafter acquired, including but not limited to all
      securities, security entitlements, securities accounts, commodity contracts,
      commodity accounts, stocks, bonds, mutual fund shares, money market shares
      and
      U.S. Government securities.

     

    “IWC
      Services”
has
      the
      meaning ascribed to that term in the first paragraph.

     

    
      
        
          
          

        

        
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    “L/C
      Amount”
means
      the sum of (i) the aggregate face amount of any issued and outstanding Letters
      of Credit and (ii) the unpaid amount of the Obligation of
      Reimbursement.

     

    “L/C
      Application”
means
      an application for the issuance of standby letters of credit pursuant to the
      terms of a Standby Letter of Credit Agreement, in form acceptable to Lender.
      

     

    “Letter
      of Credit”
is
      defined in Section
      2.4(a).

     

    “LIBOR”
means
      the rate per annum (rounded upward, if necessary, to the nearest whole 1/8
      of
      1%) determined pursuant to the following formula:

     

    
      	 	
              LIBOR
                =

            	
              Base
                LIBOR

            	 
	 	 	
              100%
                - LIBOR Reserve Percentage

            	 

    

     

    (i)     “Base
      LIBOR”
means
      the rate per annum for United States dollar deposits quoted by Lender as the
      Inter-Bank Market Offered Rate, with the understanding that such rate is quoted
      by Lender for the purpose of calculating effective rates of interest for loans
      making reference thereto, on the first day of a Interest Period for delivery
      of
      funds on said date for a period of time approximately equal to the number of
      days in such Interest Period and in an amount approximately equal to the
      principal amount to which such Interest Period applies. Borrower understands
      and
      agrees that Lender may base its quotation of the Inter-Bank Market Offered
      Rate
      upon such offers or other market indicators of the Inter-Bank Market as Lender
      in its discretion deems appropriate including, but not limited to, the rate
      offered for U.S. dollar deposits on the London Inter-Bank Market.

     

    (ii)     “LIBOR
      Reserve Percentage”
means
      the reserve percentage prescribed by the Board of Governors of the Federal
      Reserve System (or any successor) for “Eurocurrency Liabilities” (as defined in
      Regulation D of the Federal Reserve Board, as amended), adjusted by Lender
      by a
      commensurate amount for expected changes in such reserve percentage during
      the
      applicable Interest Period.

     

    “LIBOR
      Rate”
means
      (i) with respect to LIBOR Rate Advances evidenced by the Revolving Note, an
      annual interest rate equal the lesser of (x) to the sum of the LIBOR plus
      the applicable Revolving Loan Margin, and (y) the maximum lawful rate of
      interest, and (ii) with respect to the LIBOR Rate Advances evidenced by the
      Equipment Term Note, an annual interest rate equal to the lesser of (x) the
      sum of the LIBOR plus the applicable Term Loan Margin, and (y) the maximum
      lawful rate of interest.

     

    “LIBOR
      Rate Advance”
means
      an Advance for which Borrower has requested that it bear interest by reference
      to LIBOR in accordance with Article
      II.

     

    “Licensed
      Intellectual Property”
has
      the
      meaning as set forth in Section
      5.11(c).

     

    “Lien”
means
      any security interest, mortgage, deed of trust, pledge, lien, charge,
      encumbrance, title retention agreement or analogous instrument or device,
      including the interest of each lessor under any capitalized lease and the
      interest of any bondsman under any payment or performance bond, in, of or on
      any
      assets or properties of a Person, whether now owned or subsequently acquired
      and
      whether arising by agreement or operation of law.

     

    
      
        
          
          

        

        
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            12

          
            

          

        

        
          
          

        

      

    

    

    “Loan
      Documents”
means
      this Agreement, the Notes, any L/C Applications, the Guaranties, the
      Subordination Agreement, the Security Documents, and the Post-Closing Agreement,
      together with every other agreement, note, document, contract or instrument
      to
      which Borrower now or in the future may be a party and which is required by
      Lender, as all of those documents may be amended, restated or extended from
      time
      to time.

     

    “Lockbox”
means
      “Lockbox” as defined in the Wholesale Lockbox and Collection Account
      Agreement.

     

    “Material
      Adverse Effect”
      means
      any
      of the following:

     

    (i)     A
      material adverse effect on the business, operations, results of operations,
      prospects, assets, liabilities or financial condition of a Credit Party other
      than a Inactive Subsidiary;

     

    (ii)    A
      material adverse effect on the ability of a Credit Party to perform its
      obligations under the Loan Documents;

     

    (iii)    A
      material adverse effect on the ability of Lender to enforce the Obligations
      or
      to realize the intended benefits of the Security Documents, including a material
      adverse effect on the validity or enforceability of any Loan Document, or on
      the
      status, existence, perfection, priority (subject to Permitted Liens) or
      enforceability of any Lien securing payment or performance of the Obligations;
      or

     

    (iv)    Any
      claim
      against a Credit Party or threat of litigation which if determined adversely
      to
      a Credit Party would be likely to cause such Credit Party to be liable to pay
      an
      amount exceeding $250,000 in excess of any applicable insurance coverage and
      the
      applicable deductible for that coverage or would result in the occurrence of
      an
      event described in clauses (i), (ii) and (iii) above.

     

    “Maturity
      Date”
means
      the Renewal Date, or any anniversary thereof as provided in Section
      2.12
      hereof.

     

    “Maximum
      Facility Amount”
means
      $20,000,000.

     

    “Maximum
      Line Amount”
means
      $10,300,000 unless this amount is reduced pursuant to Sections
      2.9(f)
      and
(g)
      and
2.13,
      in
      which event it means such lower amount.

     

    “Mobile
      Snubbing Units”
shall
      mean Snubbing Units and Snubbing Unit Accessories that are attached or affixed
      to, or comprise an integral part of a vehicle, trailer or carrier.

     

    “Multiemployer
      Plan”
means
      a
      multiemployer plan (as defined in Section 4001(a)(3) of ERISA) to which a Credit
      Party or any ERISA Affiliate contributes or is obligated to
      contribute.

     

    
      
        
          
          

        

        
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            13

          
            

          

        

        
          
          

        

      

    

    

    “Net
      Cash Proceeds”
means
      in connection with any asset sale, the cash proceeds (including any cash
      payments received by way of deferred payment whether pursuant to a note,
      installment receivable or otherwise, but only as and when actually received)
      from such asset sale, net of (i) attorneys’ fees, accountants’ fees,
      investment banking fees, brokerage commissions and amounts required to be
      applied to the repayment of any portion of the Debt secured by a Lien not
      prohibited hereunder on the asset which is the subject of such sale, and
      (ii) taxes paid or reasonably estimated to be payable as a result of such
      asset sale.

     

    “Net
      Forced Liquidation Value”
means
      a
      professional opinion of the estimated most probable Net Cash Proceeds which
      could typically be realized at a properly advertised and conducted public
      auction sale without reserve, held under forced sale conditions and under
      economic trends current within 60 days of the appraisal. The opinion may
      consider physical location, difficulty of removal, adaptability, specialization,
      marketability, physical condition, overall appearance and psychological
      appeal.

     

    “Net
      Income”
means
      for the applicable period after-tax net income from continuing operations,
      including extraordinary losses but excluding extraordinary gains, all as
      determined in accordance with GAAP.

     

    “Net
      Orderly Liquidation Value”
means
      a
      professional opinion of the estimated most probable Net Cash Proceeds which
      could typically be realized at a properly advertised and professionally managed
      liquidation sale, conducted under orderly sale conditions for an extended period
      of time (usually six to nine months), under the economic trends existing at
      the
      time of the appraisal. 

     

    “Note”
means
      the Revolving Note or the Equipment Term Note, and “Notes”
means
      the Revolving Note and the Equipment Term Note.

     

    “Notice
      of Non-Renewal”
has
      the
      meaning set forth in Section
      2.12.

     

    “Obligation
      of Reimbursement”
means
      the obligation of Borrower to reimburse Lender pursuant to the terms of the
      Standby Letter of Credit Agreement and
      any
      applicable L/C Application.

     

    “Obligations”
means
      each Note, the Obligation of Reimbursement and each and every other debt,
      liability and obligation of every type and description which a Credit Party
      may
      now or at any time hereafter owe to Lender, whether such debt, liability or
      obligation now exists or is hereafter created or incurred, whether it arises
      in
      a transaction involving Lender alone or in a transaction involving other
      creditors of a Credit Party, and whether it is direct or indirect, due or to
      become due, absolute or contingent, primary or secondary, liquidated or
      unliquidated, or sole, joint, several or joint and several, and including all
      indebtedness of a Credit Party arising under any Loan Document or guaranty
      between a Credit Party and Lender, whether now in effect or subsequently entered
      into, and all Wells Fargo Bank Affiliate Obligations.

     

    “Officer”
means
      an officer of Borrower.

     

    “Offshore”
means
      located on or over lands that constitute the Outer Continental Shelf of the
      United States of America. 

     

    
      
        
          
          

        

        
          Page
            14

          
            

          

        

        
          
          

        

      

    

    

    “OFAC”
has
      the
      meaning set forth in Section
      6.11(c).

     

    “Oil
      States”
means
      Oil States International, Inc., a Delaware corporation. 

     

    “Overadvance”
means
      the amount, if any, by which the sum of (i) outstanding principal balance of
      the
      Revolving Note and (ii) the L/C Amount, is in excess of the then-existing
      Borrowing Base. 

     

    “Owned
      Intellectual Property”
has
      the
      meaning set forth in Section
      5.11(a).

     

    “Owner”
means
      with respect to a Person, each Person having legal or beneficial title to an
      ownership interest in the subject Person or a right to acquire such an
      interest.

     

    “Patent
      and Trademark Security Agreement”
means
      each and every Patent and Trademark Security Agreement now or hereafter executed
      by a Credit Party in favor of Lender dated the same date as this
      Agreement.

     

    “Pension
      Plan”
means
      a
      pension plan (as defined in Section 3(2) of ERISA) maintained for employees
      of a
      Credit Party or any ERISA Affiliate and covered by Title IV of
      ERISA.

     

    “Permitted
      Discretion”
means
      a
      determination or judgment made in good faith in the exercise of reasonable
      (from
      the perspective of a secured lender) credit or business judgment.

     

    “Permitted
      Lien”
and
      “Permitted
      Liens”
have
      the meanings set forth in Section
      6.3(a).

     

    “Permitted
      Subordinated Debt Payments”
has
      the
      meaning set forth in the Senior Subordinated Promissory Notes.

     

    “Person”
means
      any individual, corporation, partnership, joint venture, limited liability
      company, association, joint-stock company, trust, unincorporated organization
      or
      government or any agency or political subdivision thereof.

     

    “Plan”
means
      an employee benefit plan (as defined in Section 3(3) of ERISA) maintained for
      employees of a Credit Party or any ERISA Affiliate.

     

    “Pledge
      Agreement”
means,
      collectively, each pledge agreement executed by BNC, Borrower and each of BNC’s
      other Domestic Subsidiaries in favor of Lender with respect to the pledge of
      their respective Equity Interests in each Subsidiary (other than Boots &
Coots/IWC de Venezuela, S.A., a Venezuelan corporation).

     

    “Post-Closing
      Agreement”
means
      that certain Agreement Regarding Post-Closing Matters, dated as of the date
      hereof, entered into between Borrower and Lender. 

     

    “Premises”
means
      all locations where Borrower conducts its business or has any rights of
      possession, including the locations legally described in Exhibit
      D
      attached
      hereto.

     

    “Prime
      Rate”
means
      at any time the rate of interest most recently announced by Lender at its
      principal office as its Prime Rate, with the understanding that the Prime Rate
      is one of Lender’s base rates (but not necessarily its best rate), and serves as
      the basis upon which effective rates of interest are calculated for those loans
      making reference thereto, and is evidenced by the recording thereof in such
      internal publication or publications as Lender may designate. Each change in
      the
      rate of interest shall become effective on the date each Prime Rate change
      is
      announced by Lender. 

     

    
      
        
          
          

        

        
          Page
            15

          
            

          

        

        
          
          

        

      

    

    

    “Rate
      Management Transaction”
means
      any transaction (including an agreement with respect thereto) now existing
      or
      hereafter entered by a Credit Party which is a rate swap, basis swap, forward
      rate transaction, commodity swap, commodity option, equity or equity index
      swap,
      equity or equity index option, bond option, interest rate option, foreign
      exchange transaction, cap transaction, floor transaction, collar transaction,
      forward transaction, currency swap transaction, cross-currency rate swap
      transaction, currency option or any other similar transaction (including any
      option with respect to any of these transactions) or any combination thereof,
      whether linked to one or more interest rates, foreign currencies, commodity
      prices, equity prices or other financial measures.

     

    “Receivables
      Discount”
means
      any credit issued as a result of equipment downtime or delays attributable
      to
      workmanship or in settlement of disputed invoice amounts, but shall not include
      any trade discounts issued in association with bid proposals or issued as
      incentives for payment terms or other inducements. 

     

    “Registration
      Rights Agreement”
means
      that certain Registration Rights Agreement dated as of the date hereof between
      BNC and Seller. 

     

    “Reportable
      Event”
means
      a
      reportable event (as defined in Section 4043 of ERISA), other than an event
      for
      which the 30-day notice requirement under ERISA has been waived in regulations
      issued by the Pension Benefit Guaranty Corporation.

     

    “Renewal
      Date”
has
      the
      meaning set forth in Section
      2.12.

     

    “Revolving
      Advance”
has
      the
      meaning set forth in Section
      2.1.

     

    “Revolving
      Loan Margin”
means,
      from the date hereof until the date of the first adjustment described below,
      the
      rate per annum applicable to Level 1 as reflected on the grid below, and
      thereafter, a rate per annum determined by reference to the following
      grid:

     

    
      	
              Level

            	
              Senior
                Debt to EBITDA Ratio

            	
              Revolving
                Loan

              Margin
                for

              LIBOR
                Rate Advances

               

            	
              Revolving
                Loan

              Margin
                for Floating Rate

              Advances

               

            
	
              1

               

            	
              Less
                than or equal to 1.50 to 1.00

               

            	
              2.50%

               

            	
              0.00%

               

            
	
              2

               

            	
              Greater
                than or equal to 1.51 to 1.00 but less than or equal to 2.00 to
                1.00

            	
              2.75%

               

            	
              0.50%

               

            
	
              3

               

            	
              Greater
                than or equal to 2.01 to 1.00 

               

            	
              3.00%

               

            	
              1.00%

               

            

    

    

    
      
        
          
          

        

        
          Page
            16

          
            

          

        

        
          
          

        

      

    

     

    Adjustments,
      if any, in the applicable Revolving Loan Margin shall be implemented quarterly,
      on a prospective basis, as of the first day of the fiscal quarter following
      the
      date of delivery to Lender of the unaudited or annual audited (as applicable)
      financial statements covering the fiscal quarter then ended evidencing the
      need
      for an adjustment, commencing with the financial statements for the period
      ending March 31, 2006. Failure to timely deliver such financial statements
      shall, in addition to any other remedy provided for in this Agreement
      (including, without limitation, imposing the Default Rate), result in an
      increase in the applicable Revolving Loan Margin to the highest level set forth
      in the foregoing grid, until the first day of the first fiscal quarter following
      the delivery of those financial statements demonstrating that such an increase
      is not required.

     

    If
      amended or restated financial statements change the previously calculated
      Revolving Loan Margin, Lender may reduce or increase the Revolving Loan Margin
      from the date of receipt of such amended or restated financial statements,
      to
      the beginning of the appropriate fiscal quarter to which the restated statements
      relate or to the beginning of the fiscal quarter in which any Event of Default
      has occurred, as Lender in its sole discretion deems appropriate. 

     

    “Revolving
      Note”
means
      Borrower’s revolving promissory note, payable to the order of Lender in
      substantially the form of Exhibit
      A
      hereto,
      as same may be renewed and amended from time to time, and all replacements
      thereto.

     

    “Securities
      Repurchase Agreement”
means
      the Amended and Restated Securities Repurchase and Waiver Agreement, dated
      as of
      February 28, 2006, entered into between BNC and Halliburton Energy Services,
      Inc. 

     

    “Security
      Agreement”
means,
      collectively, each security agreement executed by BNC and each Domestic
      Subsidiary (other than Borrower) in favor of Lender.

     

    “Security
      Documents”
means
      this Agreement, the Pledge Agreement, the Wholesale Lockbox and Collection
      Account Agreement, the Security Agreement, the Patent and Trademark Security
      Agreement, and
      any
      other document delivered to Lender from time to time to secure the
      Obligations.

     

    “Security
      Interest”
has
      the
      meaning set forth in Section
      3.1.

     

    “Seller”
means
      HWC Energy Services, Inc., a Delaware corporation.

     

    “Senior
      Debt to EBITDA Ratio”
means,
      as of any date of determination, the ratio of (i) the then outstanding
      principal balance of the Notes, to (ii) EBITDA for BNC and its Subsidiaries
      on a consolidated basis for twelve (12) calendar months then ended on the
      determination date; provided,
      however,
      that
      for purposes of calculating the Senior Debt to EBITDA Ratio through and
      including the fiscal quarter ending September 30, 2006, (a) EBITDA arising
      for
      the fiscal quarter ending March 31, 2006 shall be an amount equal to the amount
      of EBITDA for the first fiscal quarter for the quarter then ended multiplied
      by
      four, (b) EBITDA arising for the fiscal quarter ending June 30, 2006 shall
      be an
      amount equal to EBITDA for the six months then ended multiplied by two, and
      (c)
      EBITDA arising for the fiscal quarter ending September 30, 2006 shall be an
      amount equal to EBITDA for the nine months then ended divided by three and
      multiplied by four. 

     

    
      
        
          
          

        

        
          Page
            17

          
            

          

        

        
          
          

        

      

    

    

    “Senior
      Subordinated Guarantees”
means,
      collectively, all guarantees made by a Domestic Subsidiary of BNC of the Senior
      Subordinated Loans, as presently in effect and without giving effect to any
      amendment thereto. 

     

    “Senior
      Subordinated Loans”
means,
      collectively, (i) the $10,000,000 unsecured, subordinate purchase money loan
      made by Seller to BNC pursuant to the Transaction Agreement, and (ii) the
      $5,000,000 unsecured, subordinate purchase money loan made by Seller to BNC
      pursuant to the Transaction Agreement, as the principal balance of either note
      may be increased on account of a Working Capital Adjustment. 

     

    “Senior
      Subordinated Loan Documents”
means,
      collectively, all documents or instruments executed or delivered in connection
      with the Senior Subordinated Loans, including the Senior Subordinated Notes
      and
      the Senior Subordinated Guarantees, as those documents or instruments are
      presently in effect and without giving effect to any amendment thereto.

     

    “Senior
      Subordinated Promissory Note”
means
      each of the Senior Subordinated Promissory Notes. 

     

    “Senior
      Subordinated Promissory Notes”
means,
      collectively, (i) the Senior Subordinated Promissory Note made by BNC in favor
      of Seller, dated as of the date hereof, in the original principal amount of
      $10,000,000, and (ii) the Senior Subordinated Promissory Note made by BNC in
      favor of Seller, dated as of the date hereof, in the original principal amount
      of $5,000,000, as those notes are presently in effect and without giving effect
      to any amendment thereto other than any increase in the principal balance of
      either note on account of a Working Capital Adjustment. 

     

    “Special
      Account”
means
      a
      specified cash collateral account maintained with Lender or another financial
      institution acceptable to Lender in connection with Letters of Credit, as
      contemplated by Section
      2.5.

     

    “Snubbing
      Unit Accessories”
means
      all pumps, fuel tanks, drilling equipment, piperacks, porta lathe cutters,
      machinery, other equipment and parts necessary or useful for the operation
      of
      any hydraulic well control unit.

     

    “Snubbing
      Unit Agreement”
means
      a
      written agreement between Borrower and its customer pursuant to which Borrower
      agrees to provide well-control services requested from time to time by the
      customer, including the use by the customer of one or more Snubbing Units.
      

     

    “Snubbing
      Units”
means
      all hydraulic well control units and hydraulic workover units owned by Borrower,
      together with all Snubbing Unit Accessories that are installed on or affixed
      to
      such equipment, and a “Snubbing
      Unit”
means
      one of the Snubbing Units.

     

    “Standby
      Letter of Credit Agreement”
means
      an agreement governing the issuance of standby letters of credit by Lender
      entered into between Borrower, as applicant and Lender, as issuer. 

     

    “Subordinated
      Creditor”
means
      Seller or any other Person now or in the future who agrees to subordinate
      Indebtedness of Borrower held by that Person to the payment of the
      Obligations.

     

    
      
        
          
          

        

        
          Page
            18

          
            

          

        

        
          
          

        

      

    

    

    “Subordination
      Agreement”
means
      the subordination provisions set forth in each Senior Subordinated Promissory
      Note in favor of Lender.

     

    “Subsidiary”
means
      any Person of which more than 50% of the outstanding ownership interests having
      general voting power under ordinary circumstances to elect a majority of the
      board of directors or the equivalent of such Person, regardless of whether
      or
      not at the time ownership interests of any other class or classes shall have
      or
      might have voting power by reason of the happening of any contingency, is at
      the
      time directly or indirectly owned by BNC, by Borrower and one or more other
      Subsidiaries, or by one or more other Subsidiaries (or would be directly or
      indirectly owned by BNC after giving effect to the transactions contemplated
      by
      the HWC Transactions and the BNC Merger).

     

    “Termination
      Date”
means
      the earliest of (i) the Maturity Date, (ii) the date Borrower
      terminates a Credit Facility, or (iii) the date Lender demands payment of
      the Obligations, following an Event of Default, pursuant to its remedies under
      Section
      7.2.

     

    “Term
      Loan Margin”
means,
      from the date hereof until the date of the first adjustment described below,
      the
      rate per annum applicable to Level 1 as reflected on the grid below, and
      thereafter, a rate per annum determined by reference to the following
      grid:

     

    
      	
              Level

               

            	
              Senior
                Debt to EBITDA Ratio

               

            	
              Term
                Loan Margin

              for
                LIBOR Rate

              Advances

               

            	
              Term
                Loan Margin

              for
                Floating Rate

              Advances

               

            
	
              1

               

            	
              Less
                than or equal to 1.50 to 1.00

               

            	
              3.00%

               

            	
              0.50%

               

            
	
              2

               

            	
              Greater
                than or equal to 1.51 to 1.00 but less than or equal to 2.00 to
                1.00

               

            	
              3.25%

               

            	
              1.00%

               

            
	
              3

               

            	
              Greater
                than or equal to 2.01 to 1.00

               

            	
              3.50%

               

            	
              1.50%

               

            

    

     

    Adjustments,
      if any, in the applicable Term Loan Margin shall be implemented quarterly,
      on a
      prospective basis, as of the first day of the fiscal quarter following the
      date
      of delivery to Lender of the unaudited or annual audited (as applicable)
      financial statements covering the fiscal quarter then ended evidencing the
      need
      for an adjustment, commencing with the financial statements for the period
      ending March 31, 2006. Failure to timely deliver such financial statements
      shall, in addition to any other remedy provided for in this Agreement
      (including, without limitation, imposing the Default Rate), result in an
      increase in the applicable Term Loan Margin to the highest level set forth
      in
      the foregoing grid, until the first day of the first fiscal quarter following
      the delivery of those financial statements demonstrating that such an increase
      is not required. 

     

    If
      amended or restated financial statements change the previously calculated Term
      Loan Margin, Lender may reduce or increase the applicable Term Loan Margin
      from
      the date of receipt of such amended or restated financial statements, to the
      beginning of the appropriate fiscal quarter to which the restated statements
      relate or to the beginning of the fiscal quarter in which any Event of Default
      has occurred, as Lender in its sole discretion deems appropriate.

     

    
      
        
          
          

        

        
          Page
            19

          
            

          

        

        
          
          

        

      

    

    

    “Texas
      Finance Code”
has
      the
      meaning set forth in Section
      2.8.

     

    “Transaction
      Agreement”
means
      that certain Transaction Agreement entered on November 21, 2005 among Seller,
      HWC Acquisition, HWC Merger Corporation, HWC and BNC, together with that certain
      letter agreement among the same parties dated March 3, 2006. 

     

    “UCC”
means
      the Uniform Commercial Code as in effect in the state designated in this
      Agreement as the state whose laws shall govern this Agreement, or in any other
      state whose laws are held to govern this Agreement or any portion of this
      Agreement.

     

    “Unbilled
      Accounts Advance Rate”
means
      up to sixty percent (60%), or such lesser rate as Lender in its sole discretion
      may deem appropriate from time to time, provided
      that, as
      of any date of determination, the Unbilled Accounts Advance Rate shall be
      reduced by one (1) percentage point for each percentage by which Dilution is
      in
      excess of 4%.

     

    “Unfinanced
      Capital Expenditures”
means
      Capital Expenditures paid in cash (other than cash that constitutes the proceeds
      of Indebtedness). However, Capital Expenditures incurred using the proceeds
      of a
      Revolving Advance shall not constitute Unfinanced Capital Expenditures for
      purposes of this definition. 

     

    “Unused
      Amount”
has
      the
      meaning set forth in Section
      2.9(b).
      

     

    “Unused
      Line Fee Rate”
means,
      from the date hereof until the date of the first adjustment described below,
      the
      rate per annum applicable to Level 1 as reflected on the grid below, and
      thereafter, a rate per annum determined by reference to the following
      grid:

     

    
      	
              Level

               

            	
              Senior
                Debt to EBITDA Ratio

               

            	
              Unused
                Line Fee Rate

               

            
	
              1

            	
              Less
                than or equal to 1.50 to 1.00

               

            	
              0.25%

               

            
	
              2

            	
              Greater
                than or equal to 1.51 to 1.00 but less than or equal to 2.00 to
                1.00

            	
              0.38%

               

            
	
              3

            	
              Greater
                than or equal to 2.01 to 1.00 

               

            	
              0.50%

               

            

    

     

    Adjustments,
      if any, in the Unused Line Fee Rate shall be implemented quarterly, on a
      prospective basis, as of the first day of the fiscal quarter following the
      date
      of delivery to Lender of the quarterly unaudited or annual audited (as
      applicable) financial statements evidencing the need for an adjustment,
      commencing with the financial statements for the period ending March 31,
      2006. Failure to timely deliver such financial statements shall, in addition
      to
      any other remedy provided for in this Agreement (including, without limitation,
      imposing the Default Rate), result in an increase in the Unused Line Fee Rate
      to
      the highest level set forth in the foregoing grid, until the first day of the
      first fiscal quarter following the delivery of those financial statements
      demonstrating that such an increase is not required. 

     

    
      
        
          
          

        

        
          Page
            20

          
            

          

        

        
          
          

        

      

    

    

    If
      amended or restated financial statements change the previously calculated Unused
      Line Fee Rate, Lender may reduce or increase the Unused Line Fee Rate from
      the
      date of receipt of such amended or restated financial statements, to the
      beginning of the appropriate fiscal quarter to which the restated statements
      relate or to the beginning of the fiscal quarter in which any Event of Default
      has occurred, as Lender in its sole discretion deems appropriate.

     

    “VAT
      Tax Reserve”
means
      the lesser of (i) $175,000, and (ii) the amount by which the accrued, but unpaid
      VAT Taxes exceed the aggregate value of the Accounts on which VAT Taxes would
      be
      payable. 

     

    “VAT
      Taxes”
means
      all taxes, assessments and other impositions imposed by a Venezuelan
      governmental authority. 

     

    “Wells
      Fargo Bank Affiliate Obligations”
means
      all obligations, liabilities, contingent reimbursement obligations, fees, and
      expenses owing by a Credit Party to any Person that is owned in material part
      by
      Lender, and that relates to any service or facility extended to a Credit Party
      or its Subsidiaries, including: (a) credit cards, (b) credit card
      processing services, (c) debit cards, (d) purchase cards, as well as
      any other services or facilities from time to time specified by Lender, whether
      direct or indirect, absolute or contingent, due or to become due, and whether
      existing now or in the future,
      and (e)
      treasury management services (including, without limitation, controlled
      disbursement, automated clearinghouse transactions, return items, overdrafts,
      interstate depository network services and Rate Management Transactions), as
      well as any other services or facilities from time to time specified by Lender,
      whether direct or indirect, absolute or contingent, due or to become due, and
      whether existing now or in the future.

     

    “Wholesale
      Lockbox and Collection Account Agreement”
means
      the Wholesale Lockbox and Collection Account Agreement between Borrower and
      Lender, dated on or about March 1, 2006.

     

    “Working
      Capital Adjustment”
means
      a
      payment made in respect of Working Capital (as defined in the Transaction
      Agreement) in accordance with Section
      2.1
      the
      Transaction Agreement.

     

    Section
      1.2     Other
      Definitional Terms; Rules of Interpretation.  
      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. All accounting terms not otherwise
      defined herein have the meanings assigned to them in accordance with GAAP.
      All
      terms defined in the UCC and not otherwise defined herein have the meanings
      assigned to them in the UCC. References to Articles, Sections, subsections,
      Exhibits, Schedules and the like, are to Articles, Sections and subsections
      of,
      or Exhibits or Schedules attached to, this Agreement unless otherwise expressly
      provided. The words “include”, “includes” and “including” shall be deemed to be
      followed by the phrase “without limitation”. Unless the context in which used
      herein otherwise clearly requires, “or” has the inclusive meaning represented by
      the phrase “and/or”. Defined terms include in the singular number the plural and
      in the plural number the singular. Reference to any agreement (including the
      Loan Documents), document or instrument means such agreement, document or
      instrument as amended or modified and in effect from time to time in accordance
      with the terms thereof (and, if applicable, in accordance with the terms hereof
      and the other Loan Documents), except where otherwise explicitly provided,
      and
      reference to any promissory note includes any promissory note which is an
      extension or renewal thereof or a substitute or replacement therefor. Reference
      to any law, rule, regulation, order, decree, requirement, policy, guideline,
      directive or interpretation means as amended, modified, codified, replaced
      or
      reenacted, in whole or in part, and in effect on the determination date,
      including rules and regulations promulgated thereunder.

     

    
      
        
          
          

        

        
          Page
            21

          
            

          

        

        
          
          

        

      

    

    

    ARTICLE
      II

     

    AMOUNT
      AND TERMS OF THE CREDIT FACILITY

     

    Section
      2.1     Revolving
      Advances.
      Lender
      agrees, subject to the terms and conditions of this Agreement, to make advances
      (“Revolving
      Advances”)
      to
      Borrower from time to time from the date that all of the conditions set forth
      in
Article IV are satisfied (the “Funding
      Date”)
      to and
      until (but not including) the Termination Date in an amount not in excess of
      the
      Maximum Line Amount. Lender shall have no obligation to make a Revolving Advance
      to the extent that the amount of the requested Revolving Advance exceeds
      Availability. Borrower’s obligation to pay the Revolving Advances shall be
      evidenced by the Revolving Note and shall be secured by the Collateral. Within
      the limits set forth in this Section 2.1, Borrower may borrow, prepay pursuant
      to Section 2.13, and reborrow.

     

    Section
      2.2    Procedures
      for Requesting Advances. 
       Borrower shall comply with the following procedures in requesting
      Revolving Advances:

     

    (a)     Type
      of Advances. Each
      Advance shall be funded as either a Floating Rate Advance or a LIBOR Rate
      Advance, as Borrower shall specify in a request delivered to Lender conforming
      to the requirements of Section
      2.2(b);
      Floating Rate Advances and LIBOR Rate Advances may be outstanding at the same
      time. Each request for a LIBOR Rate Advance shall be in multiples of $100,000,
      with a minimum request of at least $1,000,000. LIBOR Rate Advances shall not
      be
      available during Default Periods.

     

    (b)     Time
      for Requests.
      Borrower shall request each Advance not later than the Cut-off Time on the
      Business Day immediately preceding the Business Day
      on
      which the Advance is to be made. Each request that conforms to the terms of
      this
      Agreement shall be effective upon receipt by Lender, shall be in writing or
      by
      telephone or telecopy transmission, and shall be confirmed in writing by
      Borrower if so requested by Lender, by (i) an Officer of Borrower; (ii) a Person
      designated as Borrower’s agent by an Officer of Borrower in a writing delivered
      to Lender; or (iii) a Person whom Lender reasonably believes to be an Officer
      of
      Borrower or such a designated agent, which confirmation shall specify whether
      the Advance shall be a Floating Rate Advance or a LIBOR Rate Advance and, with
      respect to any LIBOR Rate Advance, shall specify the principal amount of the
      LIBOR Rate Advance and the Interest Period applicable thereto. Borrower shall
      repay all Advances even if Lender does not receive such confirmation and even
      if
      the Person requesting an Advance was not in fact authorized to do so. Any
      request for an Advance, whether written or telephonic, shall be deemed to be
      a
      representation by Borrower that the conditions set forth in Section
      4.2
      have
      been satisfied as of the time of the request.

     

    (c)     Disbursement.
      Upon
      fulfillment of the applicable conditions set forth in Article
      IV,
      Lender
      shall disburse the proceeds of the requested Advance by crediting the same
      to
      Borrower’s demand deposit account maintained with Wells Fargo Bank unless Lender
      and Borrower shall agree in writing to another manner of
      disbursement.

     

    
      
        
          
          

        

        
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        Section
          2.3    LIBOR
          Rate Advances.

      

    

     

    (a)     Converting
      Floating Rate Advances to LIBOR Rate Advances; Procedures.
      So long
      as no Default Period is in effect and no Notice of Non-Renewal has been given,
      Borrower may convert all or any part of the principal amount of any outstanding
      Floating Rate Advance into a LIBOR Rate Advance by requesting that Lender
      convert same no later than the Cut-off Time on the Business Day immediately
      preceding the Business Day on which Borrower wishes the conversion to become
      effective. Each request that conforms to the terms of this Agreement shall
      be
      effective upon receipt by Lender and shall be confirmed in writing by Borrower
      if Lender so requests by any Officer or designated agent identified in
Section
      2.2(b)
      or
      Person reasonably believed by Lender to be such an Officer or designated agent,
      which request shall specify the Business Day on which the conversion is to
      occur, the total amount of the Floating Rate Advance to be converted, and the
      applicable Interest Period. Each such conversion shall occur on a Business
      Day,
      and the aggregate amount of Floating Rate Advances converted to LIBOR Rate
      Advances shall be in multiples of $100,000, with a minimum conversion amount
      of
      at least $1,000,000.

     

    (b)     Procedures
      at End of an Interest Period.
      Unless
      Borrower requests a new LIBOR Rate Advance in accordance with the procedures
      set
      forth below, or prepays the principal of an outstanding LIBOR Rate Advance
      at
      the expiration of an Interest Period, Lender shall automatically and without
      request of Borrower convert each LIBOR Rate Advance to a Floating Rate Advance
      on the last day of the relevant Interest Period. So long as no Default exists
      and no Notice of Non-Renewal has been given, Borrower may cause all or any
      part
      of any maturing LIBOR Rate Advance to be renewed as a new LIBOR Rate Advance
      by
      requesting that Lender continue the maturing Advance as a LIBOR Rate Advance
      no
      later than the Cut-off Time on the Business Day immediately
      preceding the Business Day constituting
      the first day of the new Interest Period. Each such request shall be confirmed
      in writing by Borrower upon Lender’s request by any Officer or designated agent
      identified in Section
      2.2(b),
      which
      confirmation shall be effective upon receipt by Lender, and which shall specify
      the amount of the expiring LIBOR Rate Advance to be continued and the applicable
      Interest Period. Each new Interest Period shall begin on a Business Day and
      the
      amount of each LIBOR Rate Advance shall be in multiples of $100,000, with a
      minimum Advance of at least $1,000,000.

     

    (c)     Setting
      and Notice of Rates.
      Lender
      shall, with respect to any request for a LIBOR Rate Advance under Section
      2.2
      or a
      conversion or renewal of a LIBOR Rate Advance under this Section
      2.3,
      provide
      Borrower with a LIBOR quote for each Interest Period identified by Borrower
      on
      the Business Day on which the request was made, if the request is received
      by
      Lender prior to the Cut-off Time, or for requests received by Lender after
      the
      Cut-off Time, on the next Business Day or on the Business Day on which Borrower
      has requested that the LIBOR Rate Advance be made effective. If Borrower does
      not immediately accept a LIBOR quote, the quoted rate shall expire and any
      subsequent request from Borrower for a LIBOR quote shall be subject to
      redetermination by Lender of the applicable LIBOR for the LIBOR Rate
      Advance.

     

    (d)     Taxes
      and Regulatory Costs.
      Borrower shall pay Lender with respect to any Advance, upon demand and in
      addition to any other amounts due or to become due hereunder, any and all (i)
      withholdings, interest equalization taxes, stamp taxes or other taxes (except
      income and franchise taxes) imposed by any domestic or foreign governmental
      authority and related in any manner to LIBOR, and (ii) future, supplemental,
      emergency or other changes in the LIBOR Reserve Percentage, assessment rates
      imposed by the Federal Deposit Insurance Corporation, or similar requirements
      or
      costs imposed by any domestic or foreign governmental authority or resulting
      from compliance by Lender with any request or directive (whether or not having
      the force of law) from any central bank or other governmental authority and
      related in any manner to LIBOR to the extent they are not included in the
      calculation of LIBOR. In determining which of the foregoing are attributable
      to
      any LIBOR option available to Borrower hereunder, any reasonable allocation
      made
      by Lender among its operations shall be conclusive and binding upon
      Borrower.

     

    
      
        
          
          

        

        
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        Section
          2.4    Letters
          of Credit.

      

    

     

    (a)    Lender
      agrees, subject to the terms and conditions of this Agreement, to issue, at
      any
      time after the Funding Date and before the Termination Date, one or more
      irrevocable standby letters of credit (each, a “Letter
      of Credit”)
      for
      Borrower’s account. Lender will not issue any Letter of Credit if the face
      amount of the Letter of Credit to be issued would exceed the lesser of:

     

    
      	 	
              (i)

            	
              $1,000,000
                less the L/C Amount, or

            

    

     

    
      	 	
              (ii)

            	
              Availability.

            

    

     

    Each
      Letter of Credit, if any, shall be issued pursuant to a separate L/C Application
      made by Borrower to Lender, which must be completed in a manner satisfactory
      to
      Lender. The terms and conditions set forth in each such L/C Application shall
      supplement the terms and conditions of the Standby Letter of Credit
      Agreement.

     

    (b)    No
      Letter
      of Credit shall be issued with an expiry date later than one (1) year from
      the
      date of issuance or the Maturity Date in effect as of the date of issuance,
      whichever is earlier. 

     

    (c)    Any
      request for issuance of a Letter of Credit shall be deemed to be a
      representation by Borrower that the conditions set forth in Section
      4.2
      have
      been satisfied as of the date of the request.

     

    (d)    If
      a
      draft is submitted under a Letter of Credit when Borrower is unable, because
      a
      Default Period exists or for any other reason, to obtain a Revolving Advance
      to
      pay the Obligation of Reimbursement, Borrower shall pay to Lender on demand
      and
      in immediately available funds, the amount of the Obligation of Reimbursement
      together with interest, accrued from the date of the draft until payment in
      full
      at the Default Rate. Notwithstanding Borrower’s inability to obtain a Revolving
      Advance for any reason, Lender is irrevocably authorized, in its sole
      discretion, to make a Revolving Advance in an amount sufficient to discharge
      the
      Obligation of Reimbursement and all accrued but unpaid interest
      thereon.

     

    Section
      2.5     Special
      Account.  
      If a Credit Facility is terminated for any reason while any Letter of Credit
      is
      outstanding, Borrower shall thereupon pay Lender in immediately available funds
      for deposit in the Special Account an amount equal to the L/C Amount plus any
      anticipated fees and costs. If Borrower fails to promptly make any such payment
      in the amount required under this Agreement, then Lender may make a Revolving
      Advance against a Credit Facility in an amount sufficient to fulfill this
      obligation and deposit the proceeds to the Special Account. The Special Account
      shall be an interest bearing account either maintained with Lender or with
      a
      financial institution acceptable to Lender. Any interest earned on amounts
      deposited in the Special Account shall be credited to the Special Account.
      Lender may apply amounts on deposit in the Special Account at any time or from
      time to time to the Obligations in Lender’s sole discretion. Borrower may not
      withdraw any amounts on deposit in the Special Account as long as Lender
      maintains a security interest therein. Lender agrees to transfer any balance
      in
      the Special Account to Borrower when the Obligations have been paid in full,
      the
      Commitment has been terminated and all Letters of Credit have either expired
      or
      been terminated. 

     

    
      
        
          
          

        

        
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        Section
          2.6    Equipment
          Term Advance.

      

    

     

    (a)     Lender
      agrees, subject to the terms and conditions of this Agreement, to make a single
      advance to Borrower on the Funding Date (the “Equipment
      Term Advance”)
      in an
      amount not exceeding the least of (i) $9,700,000, (ii) 70% of the Net
      Orderly Liquidation Value, or (iii) 80% of the Net Forced Liquidation
      Value, as that amount is determined by an independent appraisal acceptable
      to
      Lender in its sole discretion, of the Eligible Equipment. Borrower’s obligation
      to pay the Equipment Term Advance shall be evidenced by the Equipment Term
      Note
      and shall be secured by the Collateral as provided in Article
      III.

     

    (b)     Upon
      fulfillment of the applicable conditions set forth in Article
      IV,
      Lender
      shall deposit the proceeds of the requested Equipment Term Advance by crediting
      the same to Borrower’s demand deposit account specified in Section
      2.2(b)
      unless
      Lender and Borrower shall agree in writing to another manner of disbursement.
      Upon Lender’s request, Borrower shall promptly confirm each telephonic request
      for the Equipment Term Advance by executing and delivering an appropriate
      confirmation certificate to Lender. Borrower shall be obligated to repay the
      Equipment Term Advance notwithstanding Lender’s failure to receive such
      confirmation and notwithstanding the fact that the Person requesting the same
      was not in fact authorized to do so. Any request for an Equipment Term Advance,
      whether written or telephonic, shall be deemed to be a representation by
      Borrower, upon which Lender may rely, that Borrower is in compliance with the
      conditions set forth in Article
      IV
      as of
      the time of the request.

     

    Section
      2.7     Payment
      of Equipment Term Note.  
      The outstanding principal balance of the Equipment Term Note shall be due and
      payable as follows:

     

    (a)     Beginning
      on March 31, 2006, and on the last day of each month thereafter, in equal
      monthly installments in an amount sufficient to fully amortize the principal
      balance of the Equipment Term Note over an assumed term ending on the Assumed
      Maturity Date.

     

    (b)     If
      Lender
      at any time obtains an appraisal of the Equipment as permitted under
Section
      6.9(d)
      herein,
      and the appraisal shows the aggregate outstanding principal balance of the
      Equipment Term Note to exceed the lesser of (i) 70% of the Net Orderly
      Liquidation Value, or (ii) 80% of the Net Forced Liquidation Value, of the
      then Eligible Equipment, then Borrower, upon demand by Lender, shall immediately
      prepay the Equipment Term Note in the amount of such excess, together with
      any
      prepayment fee and other fees owed pursuant to Sections
      2.9(f)
      and
(g).
      

     

    
      
        
          
          

        

        
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    (c)     All
      prepayments of principal with respect to the Equipment Term Note shall be
      applied to the most remote principal installment or installments then
      unpaid.

     

    (d)     On
      the
      earlier of the Termination Date or the Assumed Maturity Date, the entire unpaid
      principal balance of the Equipment Term Note, and all unpaid interest accrued
      thereon, shall in any event be immediately due and payable without notice or
      demand therefor.

     

    Section
      2.8     Interest;
      Default Interest Rate; Application of Payments; Participations;
      Usury. 

     

    (a)     Interest.
      Except
      as provided in Section
      2.3,
      Section
      2.8(b)
      and
Section
      2.8(e),
      the
      principal amount of each Advance shall bear interest at the Floating
      Rate.

     

    (b)     Default
      Interest Rate.
      At any
      time during any Default Period or following the Termination Date, in Lender’s
      sole discretion and without waiving any of its other rights or remedies, the
      principal of the Notes shall bear interest at the Default Rate or such lesser
      rate as Lender may determine, effective as of the first day of any Default
      Period begins through the last day of such Default Period, or any shorter time
      period that Lender may determine. The decision of Lender to impose a rate that
      is less than the Default Rate or to not impose the Default Rate for the entire
      duration of the Default Period shall be made by Lender in its sole discretion
      and shall not be a waiver of any of its other rights and remedies, including
      its
      right to retroactively impose the full Default Rate for the entirety of any
      such
      Default Period or following the Termination Date. 

     

    (c)     Application
      of Payments.
      Payments shall be applied to the Obligations on the Business Day of receipt
      by
      Lender in Lender’s general account, but the amount of principal paid shall
      continue to accrue interest at the interest rate applicable under the terms
      of
      this Agreement from the calendar day Lender receives the payment, and continuing
      through the end of the first Business Day following receipt of the
      payment.

     

    (d)     Participations.
      If any
      Person shall acquire a participation in the Advances or the Obligation of
      Reimbursement, Borrower shall be obligated to Lender to pay the full amount
      of
      all interest calculated under this Section
      2.8,
      along
      with all other fees, charges and other amounts due under this Agreement,
      regardless if such Person elects to accept interest with respect to its
      participation at a lower rate than that calculated under this Section
      2.8,
      or
      otherwise elects to accept less than its pro-rata share of such fees, charges
      and other amounts due under this Agreement.

     

    (e)     Usury.
      In any
      event no rate change shall be put into effect that would result in a rate
      greater than the highest rate permitted by law. Notwithstanding anything to
      the
      contrary contained in any Loan Document, all agreements which either now are
      or
      which shall become agreements between Borrower and Lender are hereby limited
      so
      that in no contingency or event whatsoever shall the total liability for
      payments in the nature of interest, additional interest and other charges exceed
      the applicable limits imposed by any applicable usury laws. If any payments
      in
      the nature of interest, additional interest and other charges made under any
      Loan Document are held to be in excess of the limits imposed by any applicable
      usury laws, it is agreed that any such amount held to be in excess shall be
      considered payment of principal hereunder, and the indebtedness evidenced hereby
      shall be reduced by such amount so that the total liability for payments in
      the
      nature of interest, additional interest and other charges shall not exceed
      the
      applicable limits imposed by any applicable usury laws, in compliance with
      the
      desires of Borrower and Lender. This provision shall never be superseded or
      waived and shall control every other provision of the Loan Documents and all
      agreements between Borrower and Lender, or their respective successors and
      assigns. Unless preempted by federal law or as permitted under the sentence
      immediately following this sentence, the Floating Rate, the LIBOR Rate or the
      Default Rate, as applicable, from time to time in effect under this Agreement
      may not exceed the “weekly ceiling” from time to time in effect under Chapter
      303 of the Texas Finance Code (Vernon’s Texas Code Annotated), as amended from
      time to time (the “Texas
      Finance Code”).
      If
      the applicable state or federal law is amended in the future to allow a greater
      rate of interest to be charged under this Agreement than is presently allowed
      by
      applicable state or federal law, then the limitation of interest hereunder
      shall
      be increased to the maximum rate of interest allowed by applicable state or
      federal law as amended, which increase shall be effective hereunder on the
      effective date of such amendment, and all interest charges owing to Lender
      by
      reason thereof shall be payable in accordance with Section
      2.8
      hereof.

     

    
      
        
          
          

        

        
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        Section
          2.9    Fees. 

      

    

     

    (a)     Closing
      Fee.
      Borrower shall pay Lender a fully earned and non-refundable closing fee of
      $50,000, due and payable upon the execution of this Agreement.

     

    (b)     Unused
      Line Fee.
      For the
      purposes of this Section
      2.9(b),
      “Unused
      Amount”
means
      the Maximum Line Amount reduced by outstanding Revolving Advances plus the
      L/C
      Amount. Borrower agrees to pay to Lender an unused line fee at the applicable
      Unused Line Fee Rate on the average daily Unused Amount from the date of this
      Agreement to and including the Termination Date, due and payable monthly in
      arrears on the first day of the month and on the Termination Date. 

     

    (c)     Collateral
      Exam Fees.
      Borrower shall pay Lender fees in connection with any collateral exams, audits
      or inspections (including all exams occurring before the date of this Agreement)
      conducted by or on behalf of Lender of any Collateral or Borrower’s operations
      or business at the rates established from time to time by Lender as its
      collateral exam fees (which fees are currently $106.25 per hour per collateral
      examiner), together with all actual out-of-pocket costs and expenses incurred
      in
      conducting any such collateral examination or inspection.

     

    (d)     Letter
      of Credit Fees.
      Borrower shall pay to Lender a fee with respect to each Letter of Credit, if
      any, accruing on a daily basis and computed at an annual rate of two and
      75/100ths percent (2.75%) of the aggregate amount that may then be drawn,
      assuming compliance with all conditions for drawing (the “Aggregate
      Face Amount”),
      from
      and including the date of issuance of such Letter of Credit until such date
      as
      such Letter of Credit shall terminate by its terms or be returned to Lender,
      due
      and payable monthly in arrears on the first day of each month and on the date
      that the Letter of Credit shall terminate by its terms or be returned to Lender;
      provided,
      however,
      effective as of the first day any Default Period begins through the last day
      of
      such Default Period, or any shorter time period that Lender may determine,
      in
      Lender’s sole discretion and without waiving any of its other rights and
      remedies, such fee shall increase to five
      and
      75/100ths percent (5.75%) of the Aggregate Face Amount. The foregoing fee shall
      be in addition to any and all fees, commissions and charges imposed by Lender
      with respect to or in connection with such Letter of Credit.

     

    
      
        
          
          

        

        
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    (e)     Letter
      of Credit Administrative Fees.
      Borrower shall pay all administrative fees charged by Lender, upon Lender’s
      request, in connection with the honoring of drafts under any Letter of Credit,
      amendments thereto, transfers thereof and all other activity with respect to
      the
      Letters of Credit at the then current rates published by Lender for such
      services rendered on behalf of customers of Lender generally.

     

    (f)     Termination
      and Maximum Facility Amount Reduction Fees.
      If
      (i) Lender terminates a Credit Facility during a Default Period, or
      (ii) Borrower terminates or reduces a Credit Facility on a date before the
      Maturity Date (other than by, with respect to the Equipment Term Note, making
      the required principal payments under Section
      2.7(a)
      of this
      Agreement), then Borrower shall pay Lender as liquidated damages (and not as
      a
      penalty), a termination fee in an amount equal to the reduction of the Maximum
      Facility Amount as reduced by the principal payments actually made by Borrower
      on the Equipment Term Note pursuant to Section 2.7(a)
      (for the
      purpose of calculating the reduction with respect with to the revolving facility
      component of the Maximum Facility Amount, such reduction shall equal the average
      of the outstanding principal balance of the Revolving Note measured on the
      last
      day of each of preceding twelve calendar months) multiplied by the applicable
      percentage determined as follows: (A) three percent (3%) if the termination
      or reduction occurs on or before the first anniversary of the Funding Date;
      (B) two percent (2%) if the termination or reduction occurs after the first
      anniversary of the Funding Date, but on or before the second anniversary of
      the
      Funding Date; and (C) one percent (1%) if the termination or reduction
      occurs after the second anniversary of the Funding Date, but before the Maturity
      Date.

     

    (g)     Contracted
      Funds Breakage Fees.
      In
      addition to payment of the fees under Section
      2.9(f),
      Borrower shall pay to Lender the following amount in connection with any
      prepayment of the principal amount of the Notes, whether such prepayment is
      voluntary or by acceleration: 

     

    (i)     If
      the
      principal amount of any LIBOR Rate Advance is prepaid, Borrower shall pay to
      Lender immediately upon demand a contracted funds breakage fee equal to the
      sum
      of the discounted monthly differences for each month from the month of
      prepayment through the month in which such Interest Period matures, calculated
      as follows for each such month:

     

    
      	 	
              (A)

            	
              Determine
                the amount of interest which would have accrued each month on the
                amount
                prepaid at the LIBOR Rate applicable to such amount had it remained
                outstanding until the last day of the applicable Interest
                Period.

            

    

     

    
      	 	
              (B)

            	
              Subtract
                from the amount determined in (A) above the amount of interest which
                would
                have accrued for the same month on the amount prepaid for the remaining
                term of such Interest Period at LIBOR in effect on the date of prepayment
                for new loans made for such term in a principal amount equal to the
                amount
                prepaid.

            

    

     

    

    
      
        
          
          

        

        
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              (C)

            	
               If
                the result obtained in (B) for any month is greater than zero, discount
                that difference by LIBOR used in (B)
                above.

            

    

     

    (ii)    Borrower
      acknowledges that a prepayment may result in Lender incurring additional costs,
      expenses or liabilities, and that it is difficult to ascertain the full extent
      of such costs, expenses or liabilities. Borrower therefore agrees to pay the
      above-described prepayment fee and agrees that said prepayment fee represents
      a
      reasonable estimate of the prepayment costs, expenses or liabilities of
      Lender.

     

    (h)     Waiver
      of Termination and Prepayment Fees. Borrower
      will be excused from the payment of termination and prepayment fees otherwise
      due under Section
      2.9(f)
      and
Section
      2.9(g)
      if such
      termination or prepayment is made because of refinancing through another
      division of Lender that closes more than eighteen months (18) after the Funding
      Date. 

     

    (i)     Overadvance
      Fees.
      Borrower shall pay an Overadvance fee in the amount of $500 for
      each
      day or portion thereof during which an Overadvance exists, regardless of how
      the
      Overadvance arises or whether or not the Overadvance has been agreed to in
      advance by Lender. The acceptance of payment of an Overadvance fee by Lender
      shall not be deemed to constitute either consent to the Overadvance or a waiver
      of the resulting Event of Default, unless Lender specifically consents to the
      Overadvance in writing and waives the Event of Default on whatever conditions
      Lender deems appropriate.

     

    (j)     Other
      Fees and Charges; Payment of Fees.
      Lender
      may from time to time impose additional fees and charges as consideration for
      Revolving Advances made in excess of Availability or for other events that
      constitute an Event of Default or a Default hereunder, including fees and
      charges for the administration of Collateral by Lender, and fees and charges
      for
      the late delivery of reports, which may be assessed in Lender’s sole discretion
      on either an hourly, periodic, or flat fee basis, and in lieu of or in addition
      to imposing interest at the Default Rate. 

     

    Section
      2.10     Time
      for Interest Payments; Payment on Non-Business Days; Computation of Interest
      and
      Fees. 

     

    (a)     Time
      For Interest Payments.
      Accrued
      and unpaid interest accruing on each Floating Rate Advance shall be due and
      payable in arrears on the first day of each month and on the Termination Date
      (each an “Interest
      Payment Date”),
      or if
      any such day is not a Business Day, on the next succeeding Business Day.
      Interest will accrue from the most recent date to which interest has been paid
      or, if no interest has been paid, from the date of advance to the Interest
      Payment Date. Interest accruing on each LIBOR Rate Advance shall be due and
      payable on the last day of the applicable Interest Period; provided,
      however,
      for
      Interest Periods that are longer than one month, interest shall nevertheless
      be
      due and payable monthly on the last day of each month and on the last day of
      the
      Interest Period.

     

    (b)     Payment
      on Non-Business Days.
      Whenever any payment to be made hereunder shall be stated to be due on a day
      which is not a Business Day, such payment may be made on the next succeeding
      Business Day, and such extension of time shall in such case be included in
      the
      computation of interest on the Advances or the fees hereunder, as the case
      may
      be.

     

    
      
        
          
          

        

        
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    (c)     Computation
      of Interest and Fees.
      Interest accruing on the outstanding principal balance of the Advances and
      fees
      hereunder outstanding from time to time shall be computed on the basis of actual
      number of days elapsed in a year of 360 days.

     

    
      
        Section
          2.11    Lockbox
          and Collateral Account; Sweep of Funds.

      

    

     

    
      
        (a)    Lockbox
          and Collateral Account.

      

    

     

    (i)     Borrower
      shall instruct all account debtors to pay all Accounts directly to the Lockbox.
      If, notwithstanding such instructions, Borrower receives any payments on
      Accounts, Borrower shall deposit such payments into the Collateral Account.
      Borrower shall also deposit all other cash proceeds of Collateral regardless
      of
      source or nature directly into the Collateral Account. Until so deposited,
      Borrower shall hold all such payments and cash proceeds in trust for and as
      the
      property of Lender and shall not commingle such property with any of its other
      funds or property. All deposits in the Collateral Account shall constitute
      proceeds of Collateral and shall not constitute payment of the
      Obligations.

     

    (ii)     All
      items
      deposited in the Collateral Account shall be subject to final payment. If any
      such item is returned uncollected, Borrower will immediately pay Lender, or,
      for
      items deposited in the Collateral Account, the bank maintaining such account,
      the amount of that item, or such bank at its discretion may charge any
      uncollected item to Borrower’s commercial account or other account. Borrower
      shall be liable as an endorser on all items deposited in the Collateral Account,
      whether or not in fact endorsed by Borrower.

     

    (b)     Sweep
      of Funds.
      Lender
      shall from time to time, in accordance with the Wholesale Lockbox and Collection
      Account Agreement, cause funds in the Collateral Account to be transferred
      (at
      Borrower’s expense) to Lender’s general account for payment of the Obligations,
      after giving effect to a collection period of at least two Business Days, in
      addition to any period imposed after such transfer pursuant to Section
      2.8(c).
      Amounts
      deposited in the Collateral Account shall not be subject to withdrawal by
      Borrower, except after payment in full and discharge of all Obligations.

     

    Section
      2.12     Term. 
       This Agreement and the other Loan Documents shall become effective as of
      the Funding Date and shall continue in full force and effect until and including
      March 3, 2010 (the “Renewal
      Date”);
      however, (i) if the Notice of Non-Renewal (as defined below) has not been
      given, or this Agreement has not been otherwise terminated, and (ii) the
      maturity date of each Senior Subordinated Promissory Note and all other terms
      of
      those notes (including, without limitation, the subordination provisions) have
      been extended in writing by BNC and Subordinated Creditor for an additional
      year, this Agreement, the other Loan Documents and all Liens and Security
      Interests relating thereto shall automatically renew, without the necessity
      of
      any further documentation or action, on a year to year basis thereafter and
      otherwise on the same terms and conditions set forth in this Agreement and
      the
      other Loan Documents. Lender or Borrower may terminate this Agreement and the
      other Loan Documents (other than those provisions that expressly survive the
      termination of this Agreement or any Loan Document, which provisions shall
      survive in accordance with their respective terms) effective on the Renewal
      Date
      or on the anniversary of the Renewal Date by giving to the other party at least
      30 days’ prior written notice, or such additional notice as may be required
      under Section 2.13 (the “Notice
      of Non-Renewal”),
      provided this Agreement and all other Loan Documents must be terminated
      simultaneously. Any notice requesting termination of this Agreement shall
      constitute a request to terminate both this Agreement and the other Loan
      Documents. 

     

    
      
        
          
          

        

        
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    Section
      2.13     Voluntary
      Prepayment; Reduction of the Maximum Facility Amount; Termination of a Credit
      Facility by Borrower.  
      Except as otherwise provided in this Agreement, Borrower may prepay the Advances
      in whole at any time or from time to time in part. Borrower may terminate a
      Credit Facility or reduce the Maximum Facility Amount at any time if it
      (i) gives Lender at least 90 days advance written notice prior to the
      proposed Termination Date, and (ii) pays Lender applicable termination and
      Maximum Facility Amount reduction fees in accordance with Section 2.9(f)
      and the contracted funds breakage fees of Section 2.9(g). Any reduction
      in the Maximum Line Amount shall be in multiples of $100,000, and with a minimum
      reduction of at least $500,000. If Borrower terminates a Credit Facility or
      reduces the Maximum Line Amount to zero, all Obligations shall be immediately
      due and payable, and if Borrower gives Lender less than the required 90 days
      advance written notice, then the interest rate applicable to borrowings
      evidenced by Revolving Note shall be the Default Rate for the period of time
      commencing 90 days prior to the proposed Termination Date through the date
      that
      Lender actually receives such written notice. If Borrower does not wish Lender
      to consider renewal of the Credit Facility on the next Maturity Date, then
      Borrower shall give Lender at least 90 days written notice before the Maturity
      Date that it will not be requesting renewal. If Borrower fails to give Lender
      such timely notice, then the interest rate applicable to borrowings evidenced
      by
      the Revolving Note shall be the Default Rate for the period of time commencing
      90 days prior to the Maturity Date through the date that Lender actually
      receives such written notice. 

     

    Section
      2.14     Mandatory
      Prepayment.  
      Without notice or demand, if Overadvance exists, Borrower shall immediately
      (i)
      first, prepay the Revolving Advances to the extent necessary to eliminate the
      Overadvance; and (ii) if prepayment in full of the Revolving Advances is
      insufficient to eliminate the Overadvance, pay to Lender in immediately
      available funds for deposit in the Special Account an amount equal to the
      remaining excess. Any payment received by Lender under this Section 2.14
      or under Section 2.13 may be applied to the Obligations, in such order
      and in such amounts as Lender in its sole discretion may
      determine from time to time.

     

    Section
      2.15     Revolving
      Advances to Pay Obligations.  
      Notwithstanding the terms of Section 2.1, Lender may, in its discretion
      at any time or from time to time, without Borrower’s request and even if the
      conditions set forth in Article IV would not be satisfied, make a
      Revolving Advance in an amount equal to the portion of the Obligations from
      time
      to time due and payable, and may deliver the proceeds of any such Revolving
      Advance to any affiliate of Lender in satisfaction of any Wells Fargo
      Bank
      Affiliate Obligations. 

     

    Section
      2.16     Use
      of
      Proceeds.  
      Borrower shall use the proceeds of Advances for the purposes (in the following
      order) of repaying Borrower’s existing lenders, repurchasing certain capital
      stock and warrants in BNC pursuant to the Securities Repurchase Agreement,
      funding ordinary working capital needs, paying fees and expenses incurred in
      connection with the transaction contemplated
      by this Agreement, and consummating the acquisition and merger transactions
      contemplated by the Transaction Agreement.

     

    
      
        
          
          

        

        
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    Section
      2.17     Liability
      Records.  
      Lender may maintain from time to time, at its discretion, records as to the
      Obligations. All entries made on any such record shall be presumed correct
      until
      Borrower establishes the contrary. Upon Lender’s demand, Borrower will admit and
      certify in writing the exact principal balance of the Obligations that Borrower
      then asserts to be outstanding. Any billing statement or accounting rendered
      by
      Lender shall be conclusive and fully binding on Borrower unless Borrower gives
      Lender specific written notice of exception within 30 days after
      receipt.

     

    ARTICLE
      III

     

    SECURITY
      INTEREST; OCCUPANCY; SETOFF

     

    Section
      3.1     Grant
      of Security Interest. 
       Borrower hereby pledges, assigns and grants to Lender for the benefit of
      itself and as agent for any affiliate of Lender that may provide credit or
      services to Borrower that constitute Wells Fargo Bank Affiliate Obligations,
      a
      lien and security interest (collectively referred to as the “Security
      Interest”)
      in the
      Collateral, as security for the payment and performance of the Obligations.
      Upon
      request by Lender, Borrower will grant Lender, for the benefit of itself and
      as
      agent for any affiliate of Lender that may provide credit or services to
      Borrower that constitute Wells Fargo Bank Affiliate Obligations, a security
      interest in all commercial tort claims that Borrower may have against any
      Person. 

     

    Section
      3.2     Notification
      of Account Debtors and Other Obligors.  
      Lender may at any time (after the occurrence and during the continuance of
      a
      Default) notify any account debtor or other Person obligated to pay the amount
      due that such right to payment has been assigned or transferred to Lender for
      security and shall be paid directly to Lender. Borrower will join in giving
      such
      notice if Lender so requests. At any time after Borrower or Lender gives such
      notice to an account debtor or other obligor, Lender may, but need not, in
      Lender’s name or in Borrower’s name, demand, sue for, collect or receive any
      money or property at any time payable or receivable on account of, or securing,
      any such right to payment, or grant any extension to, make any compromise or
      settlement with or otherwise agree to waive, modify, amend or change the
      obligations (including collateral obligations) of any such account debtor or
      other obligor. Lender may, in Lender’s name or in Borrower’s name, as Borrower’s
      agent and attorney-in-fact, notify the United States Postal Service to change
      the address for delivery of Borrower’s mail to any address designated by Lender,
      otherwise intercept Borrower’s mail, and receive, open and dispose of Borrower’s
      mail, applying all Collateral as permitted under this Agreement and holding
      all
      other mail for Borrower’s account or forwarding such mail to Borrower’s last
      known address.

     

    Section
      3.3     Assignment
      of Insurance.  
      As additional security for the payment and performance of the Obligations,
      Borrower hereby assigns to Lender any and all monies (including proceeds of
      insurance and refunds of unearned premiums) due or to become due under, and
      all
      other rights of Borrower with respect to, any and all policies of insurance
      now
      or at any time hereafter covering the Collateral or any evidence thereof or
      any
      business records or valuable papers pertaining thereto, and Borrower hereby
      directs the issuer of any such policy to pay all such monies directly to Lender.
      At any time a Default Period exists or the time period for taking any action
      described in this sentence will expire or lapse within thirty (30) days and
      Borrower has not taken such action before such time, Lender may (but need not),
      in Lender’s name or in Borrower’s name, execute and deliver proof of claim,
      receive all such monies, endorse checks and other instruments representing
      payment of such monies, and adjust, litigate, compromise or release any claim
      against the issuer of any such policy. Any monies received as payment for any
      loss under any insurance policy mentioned above (other than liability insurance
      policies) or as payment of any award or compensation for condemnation or taking
      by eminent domain, shall be paid over to Lender to be applied, at the option
      of
      Lender, either to the prepayment of the Obligations or shall be disbursed to
      Borrower under staged payment terms reasonably satisfactory to Lender for
      application to the cost of repairs, replacements, or restorations. Any such
      repairs, replacements, or restorations shall be effected with reasonable
      promptness and shall be of a value at least equal to the value of the items
      or
      property destroyed prior to such damage or destruction.

     

    
      
        
          
          

        

        
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            32

          
            

          

        

        
          
          

        

      

    

    

    
      
        Section
          3.4      Occupancy.

      

    

     

    (a)     Borrower
      hereby irrevocably grants to Lender the right to non-exclusive possession of
      the
      Premises at any time during a Default Period without notice or
      consent.

     

    (b)     Lender
      may use the Premises only to hold, process, manufacture, sell, use, store,
      liquidate, realize upon or otherwise dispose of goods that are Collateral and
      for other purposes that Lender may in good faith deem to be related or
      incidental purposes.

     

    (c)     Lender’s
      right to hold the Premises shall cease and terminate upon the earlier of
      (i) payment in full and discharge of all Obligations and termination of the
      entire Credit Facility, and (ii) final sale or disposition of all items
      constituting Collateral at the Premises and delivery of all such items to
      purchasers.

     

    (d)     Lender
      shall not be obligated to pay or account for any rent or other compensation
      for
      the possession, occupancy or use of any of the Premises; provided,
      however,
      that if
      Lender does pay or account for any rent or other compensation for the
      possession, occupancy or use of any of the Premises, Borrower shall reimburse
      Lender promptly for the full amount thereof. In addition, Borrower will pay,
      or
      reimburse Lender for, all taxes, fees, duties, impositions, charges and expenses
      at any time incurred by or imposed upon Lender by reason of the execution,
      delivery, existence, recordation, performance or enforcement of this Agreement
      or the provisions of this Section
      3.4.

     

    Section
      3.5     License.  
      Without limiting the generality of any other Security Document, Borrower hereby
      grants to Lender a non-exclusive, worldwide and royalty-free license to use
      or
      otherwise exploit all Intellectual Property Rights of Borrower for the purpose
      of: (a) completing the manufacture of any in-process materials during any
      Default Period so that such materials become saleable Inventory, all in
      accordance with the same quality standards previously adopted by Borrower for
      its own manufacturing and subject to Borrower’s reasonable exercise of quality
      control; and (b) selling, leasing or otherwise disposing of any or all
      Collateral during any Default Period.

     

    Section
      3.6     Financing
      Statement.  
      Borrower authorizes Lender to file from time to time, such financing statements
      against collateral described as “all personal property” or “all assets” or
      describing specific items of collateral including commercial tort claims as
      Lender deems necessary or useful to perfect the Security Interest. All financing
      statements filed before the date hereof to perfect the Security Interest were
      authorized by Borrower and are hereby re-authorized. A carbon, photographic
      or
      other reproduction of this Agreement or of any financing statements signed
      by
      Borrower is sufficient as a financing statement and may be filed as a financing
      statement in any state to perfect the security interests granted hereby. For
      this purpose, Borrower represents and warrants that the following information
      is
      true and correct:

     

    
      
        
          
          

        

        
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            33

          
            

          

        

        
          
          

        

      

    

    

    Name
      and
      address of Debtor:

    

    IWC
      Services, LLC

    c/o
      Boots
& Coots International Well Control, Inc.

    11615
      N.
      Houston - Rosslyn Road

    Houston,
      Texas 77086

    Federal
      Employer Identification No. 76-0475739

    Organizational
      Identification No. 136090400

    

    Name
      and
      address of Secured Party:

    Wells
      Fargo Bank, National Association

    MAC-T5698-030

    40
      NE
      Loop 410, Suite 340

    San
      Antonio, Texas 78216

     

    Section
      3.7     Setoff.  
      Lender may at any time or from time to time after the occurrence and during
      the
      continuance of a Default Period, at its sole discretion and without demand
      and
      without notice to anyone, setoff any liability owed to Borrower by Lender,
      whether or not due, against any Obligation, then due. In addition, each other
      Person holding a participating interest in any Obligations shall have the right
      to appropriate or setoff any deposit or other liability then owed by such Person
      to Borrower, whether or not due, and apply the same to the payment of said
      participating interest, as fully as if such Person had lent directly to Borrower
      the amount of such participating interest.

     

    Section
      3.8     Collateral.  
      This Agreement does not contemplate a sale of accounts, contract rights or
      chattel paper, and, as provided by law, Borrower is entitled to any surplus
      and
      shall remain liable for any deficiency. Lender’s duty of care with respect to
      Collateral in its possession (as imposed by law) shall be deemed fulfilled
      if it
      exercises reasonable care in physically keeping such Collateral, or in the
      case
      of Collateral in the custody or possession of a bailee or other third Person,
      exercises reasonable care in the selection of the bailee or other third Person,
      and Lender need not otherwise preserve, protect, insure or care for any
      Collateral. Lender shall not be obligated to preserve any rights Borrower may
      have against prior parties, to realize on the Collateral at all or in any
      particular manner or order or to apply any cash proceeds of the Collateral
      in
      any particular order of application. Lender has no obligation to clean-up or
      otherwise prepare the Collateral for sale. Borrower waives any right it may
      have
      to require Lender to pursue any third Person for any of the
      Obligations.

     

    ARTICLE
      IV

     

    CONDITIONS
      OF LENDING

     

    Section
      4.1     Conditions
      Precedent to the Initial Advances
      and
      Letter of Credit.  
      Lender’s obligation to make the initial Advances or to cause any Letters of
      Credit to be issued shall be subject to the condition precedent that Lender
      shall have received all of the following, each properly executed by the
      appropriate party and in form and substance satisfactory to Lender:

     

    
      
        
          
          

        

        
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            34

          
            

          

        

        
          
          

        

      

    

    

    
      	 	
              (a)

            	
              This
                Agreement.

            

    

     

    
      	 	
              (b)

            	
              The
                Notes.

            

    

     

    (c)    A
      Standby
      Letter of Credit Agreement, and L/C Application for each Letter of Credit that
      Borrower wishes to have issued thereunder.

     

    
      	 	
              (d)

            	
              The
                Guaranties.

            

    

     

    
      	 	
              (e)

            	
              The
                Collateral Assignment of Transaction Agreement.

            

    

     

    
      	 	
              (f)

            	
              The
                Collateral Assignment of Securities Repurchase
                Agreement.

            

    

     

    (g)   The
      Pledge Agreements (along with the original stock certificates pledged
      thereunder, with stock powers endorsed in blank); provided,
      however,
      neither
      BNC, Borrower nor any of its other Domestic Subsidiaries shall be required
      to
      pledge more than sixty-five percent (65%) of the voting Equity Interests of
      any
      Foreign Subsidiary.

     

    
      	 	
              (h)

            	
              The
                Wholesale Lockbox and Collection Account
                Agreement.

            

    

     

    (i)     Control
      agreements with each bank at which a Credit Party maintains deposit accounts,
      except those listed on Schedule
      5.18.

     

    
      
        (j)    A
          Patent
          and Trademark Security Agreement.

      

    

     

    
      
        (k)    A
          true,
          correct and complete copy of the Transaction Agreement.

      

    

     

    (l)     A
      true,
      correct and complete copy of the Securities Repurchase Agreement. 

     

    (m)   A
      true,
      correct and complete copy of the Senior Subordinated Promissory Notes.

     

    
      
        (n)    All
          other
          Loan Documents.

      

    

     

    (o)    A
      true
      and correct copy of any and all leases pursuant to which Borrower is leasing
      the
      Premises, together with a landlord’s disclaimer and consent with respect to each
      such lease.

     

    (p)    A
      true
      and correct copy of any and all mortgages pursuant to which Borrower has
      mortgaged the Premises, together with a mortgagee’s disclaimer and consent with
      respect to each such mortgage.

     

    (q)    A
      true
      and correct copy of any and all agreements pursuant to which Borrower’s property
      is in the possession of any Person other than Borrower, together with, in the
      case of any goods held by such Person for resale, (i) a consignee’s
      acknowledgment and waiver of Liens, (ii) UCC financing statements
      sufficient to protect Borrower’s and Lender’s interests in such goods, and
      (iii) UCC searches showing that no other secured party has filed a
      financing statement against such Person and covering property similar to
      Borrower’s other than Borrower, or if there exists any such secured party,
      evidence that each such secured party has received notice from Borrower and
      Lender sufficient to protect Borrower’s and Lender’s interests in Borrower’s
      goods from any claim by such secured party.

     

    
      
        
          
          

        

        
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            35

          
            

          

        

        
          
          

        

      

    

    

    (r)     An
      acknowledgment and waiver of Liens from each warehouse in which Borrower is
      storing Inventory.

     

    (s)     A
      true
      and correct copy of any and all agreements pursuant to which Borrower’s property
      is in the possession of any Person other than Borrower, together with,
      (i) an acknowledgment and waiver of Liens from each subcontractor who has
      possession of Borrower’s goods from time to time, (ii) UCC financing
      statements sufficient to protect Borrower’s and Lender’s interests in such
      goods, and (iii) UCC searches showing that no other secured party has filed
      a financing statement covering such Person’s property other than Borrower, or if
      there exists any such secured party, evidence that each such secured party
      has
      received notice from Borrower and Lender sufficient to protect Borrower’s and
      Lender’s interests in Borrower’s goods from any claim by such secured
      party.

     

    (t)     An
      acknowledgment and agreement from each licensor in favor of Lender, together
      with a true, correct and complete copy of all license agreements.

     

    (u)     Current
      searches of appropriate filing offices showing that (i) no Liens have been
      filed and remain in effect against BNC, Borrower or any other Domestic
      Subsidiary except Permitted Liens or Liens held by Persons who have agreed
      in
      writing that upon receipt of proceeds of the initial Advances, they will
      satisfy, release or terminate such Liens in a manner satisfactory to Lender,
      and
      (ii) Lender has duly filed all financing statements necessary to perfect
      the Security Interest, to the extent the Security Interest is capable of being
      perfected by filing.

     

    (v)     A
      certificate of BNC’s, Borrower’s and each Domestic Subsidiary’s Secretary or
      Assistant Secretary certifying that attached to such certificate are
      (i) the resolutions of each such Credit Party’s Directors and, if required,
      Owners, authorizing the execution, delivery and performance of the Loan
      Documents, (ii) true, correct and complete copies of each such Credit
      Party’s Constituent Documents, and (iii) examples of the signatures of each
      such Credit Party’s Officers or agents authorized to execute and deliver the
      Loan Documents and other instruments, agreements and certificates, including
      Advance requests, on each such Credit Party’s behalf.

     

    (w)     A
      current
      certificate issued by each Secretary of State where BNC, Borrower and each
      other
      Domestic Subsidiary is organized, certifying that each such Credit Party is
      in
      existence and good standing in its state of organization.

     

    (x)     Evidence
      that BNC, Borrower and each other Domestic Subsidiary is duly licensed or
      qualified to transact business in all jurisdictions in the United States of
      America where the character of the property owned or leased or the nature of
      the
      business transacted by it makes such licensing or qualification
      necessary.

     

    
      
        
          
          

        

        
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            36

          
            

          

        

        
          
          

        

      

    

    

    (y)     A
      certificate of an Officer of Borrower confirming, in his corporate capacity,
      the
      representations and warranties set forth in Article
      V.

     

    (z)     An
      opinion of counsel for BNC, Borrower and the other Domestic Subsidiaries,
      addressed to Lender, covering, among other things, the due authorization,
      execution and enforceability of the Loan Documents to which such Credit Parties
      are party, which shall be satisfactory to Lender in its sole
      discretion.

     

    (aa)   Certificates
      of the insurance required hereunder, with all hazard insurance containing a
      lender’s loss payable endorsement in Lender’s favor and with all liability
      insurance naming Lender as an additional insured.

     

    (bb)   Payment
      of the fees and commissions due under Section
      2.9
      through
      the date of the initial Advance or issuance of the first Letter of Credit and
      expenses incurred by Lender through such date and required to be paid by
      Borrower under Section
      8.5,
      including all legal expenses incurred through the Funding Date.

     

    (cc)    Evidence
      that after making the initial Revolving Advance, satisfying all obligations
      owed
      to BNC’s or Borrower’s existing lenders, satisfying all trade payables older
      than 60 days from invoice date, book overdrafts and closing costs, Availability
      shall be not less than $2,500,000.

     

    (dd)    A
      Customer Identification Information form and such other forms and verification
      as Lender may need to comply with the U.S.A. Patriot Act. 

     

    (ee)    Satisfactory
      credit and background checks on key officers of BNC, Affiliates of BNC, HWC
      and
      each Owner having an Equity Interest in any such entity greater than
      20%.

     

    (ff)    Receipt
      of pay-off letters from BNC’s and Borrower’s existing lenders being repaid
      providing (with respect to a secured lender) that upon payment of a certain
      amount such lender agrees that its security interests shall terminate and Lender
      shall be entitled to file the appropriate terminations for such interests,
      with
      such letter being in form and substance satisfactory to Lender in its sole
      discretion.

     

    (gg)    Receipt
      of all documents, materials and other information, confirmation or verification
      requested by Lender in connection with its due diligence examination of BNC’s
      and its Subsidiaries’ business operations, financial condition and properties,
      including, but not limited to, (i) all corporate records of BNC and its
      Subsidiaries, including but not limited to the applicable organizational
      documents of BNC and its Subsidiaries, (ii) all documents, agreements and
      contracts evidencing borrowings, assets pledged to secure such borrowings,
      guaranties, and documents, agreements and contracts evidencing all other
      material financing agreements, (iii) all documents, agreements and contracts
      with respect to compensation or bonus plans and outstanding director or officer
      loans and all documents, agreements and contracts with respect to employee
      benefits, salaries or labor disputes, (iv) all documents, agreements and
      contracts with respect to pending or threatened litigation, claims,
      administrative proceedings or environmental matters and (v) all material
      agreements of BNC or any of its Subsidiaries, including without limitation,
      leases, supplier contracts, merchant agreements, shareholder agreements,
      licenses and any and all agreements restricting BNC or any of its Subsidiaries
      from borrowing money or granting security interests in Collateral, and the
      results of such due diligence review shall have been satisfactory to Lender
      in
      its sole discretion. 

     

    
      
        
          
          

        

        
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            37

          
            

          

        

        
          
          

        

      

    

    

    (hh)    Absence
      of the occurrence of any event that has had or could reasonably be expected
      to
      result in a Material Adverse Effect on the financial condition of BNC or
      Borrower since the date of the financial statements dated August 31, 2005
      delivered to Lender. 

     

    (ii)     
       Satisfactory
      inspection of the Premises and examination and audit of BNC’s and Borrower’s
      books and records.

     

    (jj)     
       Evidence
      that Lender has a perfected first priority security interest in the Collateral,
      including, without limitation, any Collateral that is located
      Offshore.

     

    (kk)     Receipt
      and satisfactory review of BNC’s and HWC’s prepared projections (i.e., balance
      sheet and income statement projections by month) for the period from September
      2005 to December 2006 reflecting the proposed debt structure and the pro forma
      balance sheet.

     

    (ll)     
       All
      instruments, documents and chattel paper constituting Collateral, duly endorsed
      or assigned to Lender,

     

    (mm)   Satisfactory
      resolution of any actual or potential fraudulent conveyance issues arising
      from
      the transactions contemplated by this Agreement, the Securities Repurchase
      Agreement or the Transaction Agreement. 

     

    (nn)    Evidence
      that the HWC Transactions, the BNC Merger and the transactions contemplated
      under the Securities Repurchase Agreement have been consummated.

     

    (oo)     Evidence
      that IWC Services, Inc., a Texas corporation has been converted into a Texas
      limited liability company named “IWC Services, LLC”. 

     

    (pp)     The
      Funding Date occurring not later than April 1, 2006. 

     

    (qq)     Such
      other documents as Lender in its sole discretion may require.

     

    Section
      4.2     Conditions
      Precedent to All Advances
      and
      All Issuances of a Letter of Credit. 
       Lender’s obligation to make each Advance or to cause the issuance of a
      Letter of Credit shall be subject to the further conditions precedent
      that:

     

    (a)     the
      representations and warranties contained in Article
      V
      are
      correct on and as of the date of such Advance or issuance of a Letter of Credit
      as though made on and as of such date, except to the extent that such
      representations and warranties relate solely to an earlier date; 

     

    (b)     all
      requirements under the Post-Closing Agreement have been satisfied as and when
      due; and

     

    (c)     no
      event
      has occurred and is continuing, or would result from such Advance or issuance
      of
      a Letter of Credit that constitutes a Default or an Event of
      Default.

     

    
      
        
          
          

        

        
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    ARTICLE
      V

     

    REPRESENTATIONS
      AND WARRANTIES

     

    BNC
      and
      Borrower jointly and severally represent and warrant to Lender as
      follows:

     

    Section
      5.1     Existence
      and Power; Name; Chief Executive Office; Inventory and Equipment Locations;
      Federal Employer Identification Number and Organizational Identification
      Number.
      Each
      Credit Party is a duly organized, validly existing and in good standing under
      the laws of the jurisdiction of its organization and is duly licensed or
      qualified to transact business in all jurisdictions where the character of
      the
      property owned or leased or the nature of the business transacted by it makes
      such licensing or qualification necessary and where the failure to be so
      licensed or qualified would have a Material Adverse Effect. BNC, Borrower and
      each other Domestic Subsidiary have all requisite power and authority to conduct
      its business, to own its properties and to execute and deliver, and to perform
      all of its obligations under, the Loan Documents. During their respective
      existence, BNC and Borrower have done business solely under the names set forth
      in Schedule 5.1. BNC’s and Borrower’s chief executive office and
      principal place of business is located at the address set forth in Schedule
      5.1, and all of that BNC’s and Borrower’s records relating to its business
      or the Collateral are kept at that location. All Inventory and Equipment is
      located at that location or at one of the other locations listed in Schedule
      5.1. Borrower’s federal employer identification number and organization
      identification number are correctly set forth in Section
      3.6.

     

    Section
      5.2     Capitalization.
      Schedule 5.2 constitutes a correct and complete list of all Persons
      holding ownership interests and rights to acquire ownership interests that
      if
      fully exercised would cause such Person to hold more than ten percent (10%)
      of
      all ownership interests of BNC on a fully diluted basis, and an organizational
      chart showing the ownership structure of BNC’s Subsidiaries, including
      Borrower.

     

    Section
      5.3     Authorization
      of Borrowing under the Loan Documents and Senior Subordinated Loan Documents
      and
      consummation of the HWC Transactions; No Conflict as to Law or
      Agreements.
      The
      execution, delivery and performance by each Credit Party of the HWC Transaction
      Documents, Securities Repurchase Agreement, Senior Subordinated Loan Documents,
      the Loan Documents to which it is a party and the borrowings from time to time
      under the Loan Documents and the Senior Subordinated Loan Documents and the
      consummation of the transactions under the HWC Transaction Documents and the
      Securities Repurchase Agreement have been duly authorized by all necessary
      action and do not and will not (i) require any consent or approval of a Credit
      Party’s Owners, except such approval and consent as has been obtained,
      accomplished or given prior to the date hereof; (ii) require any authorization,
      consent or approval by, or registration, declaration or filing with, or notice
      to, any governmental department, commission, board, bureau, agency or
      instrumentality, domestic or foreign, or any third party, except such
      authorization, consent, approval, registration, declaration, filing or notice
      as
      has been obtained, accomplished or given prior to the date hereof; (iii) violate
      any provision of any law, rule or regulation (including Regulation X of the
      Board of Governors of the Federal Reserve System) or of any order, writ,
      injunction or decree presently in effect having applicability to a Credit Party
      or of such Credit Party’s Constituent Documents; (iv) result in a breach of or
      constitute a default under any indenture or loan or credit agreement or any
      other material agreement, lease or instrument to which a Credit Party is a
      party
      or by which it or its properties may be bound or affected; or (v) result in,
      or
      require, the creation or imposition of any Lien (other than the Security
      Interest) upon or with respect to any of the properties now owned or hereafter
      acquired by a Credit Party.

     

    
      
        
          
          

        

        
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    Section
      5.4     Legal
      Agreements.  
      This Agreement constitutes and, upon due execution by Borrower and BNC, the
      other Loan Documents will constitute the legal, valid and binding obligations
      of
      each Credit Party to which it is party, enforceable against Borrower and the
      other Credit Parties in accordance with their respective terms. 

     

    Section
      5.5     Subsidiaries.  
      Except as set forth in Schedule 5.5 hereto, BNC and Borrower have no
      other Subsidiaries. The Inactive Subsidiaries conduct no business operations
      and
      do not own or hold assets of any kind. 

     

    Section
      5.6     Financial
      Condition; No Adverse Change.  
      BNC and Borrower have furnished to Lender its audited financial statements
      for
      its fiscal year ended December 31, 2004 and unaudited financial statements
      for
      the fiscal-year-to-date period ended January 31, 2006 and those statements
      fairly present BNC’s and its Subsidiaries’ financial condition on a consolidated
      basis on the dates thereof and the results of its operations and cash flows
      for
      the periods then ended and were prepared in accordance with GAAP. Since the
      date
      of the most recent financial statements, there has been no change in BNC’s or
      Borrower’s business, properties or condition (financial or otherwise) that has
      had a Material Adverse Effect.

     

    Section
      5.7     Litigation.  
      There are no actions, suits or proceedings pending or, to BNC’s or Borrower’s
      knowledge, threatened against or affecting a Credit Party or any of its
      Affiliates or the properties of a Credit Party or any of its Affiliates before
      any court or governmental department, commission, board, bureau, agency or
      instrumentality, domestic or foreign, which, if determined adversely to a Credit
      Party or any of its Affiliates, would have a Material Adverse Effect. Seller
      has
      agreed to indemnify BNC and its Affiliates from the matters disclosed in
Schedule 10.2 to the Transaction Agreement. 

     

    Section
      5.8     Regulation
      U.  
      No Credit Party has engaged in the business of extending credit for the purpose
      of purchasing or carrying margin stock (within the meaning of Regulation U
      of
      the Board of Governors of the Federal Reserve System), and no part of the
      proceeds of any Advance will be used to purchase or carry any margin stock
      or to
      extend credit to others for the purpose of purchasing or carrying any margin
      stock.

     

    Section
      5.9     Taxes.  
      Each Credit Party and its Affiliates have paid or caused to be paid to the
      proper authorities when due all federal, state and local taxes required to
      be
      withheld by each of them. Each Credit Party and its Affiliates have filed all
      federal, state and local tax returns which to the knowledge of the Officers
      of
      such Credit Party or any Affiliate, as the case may be, are required to be
      filed, and each Credit Party and its Affiliates have paid or caused to be paid
      to the respective taxing authorities all taxes as shown on said returns or
      on
      any assessment received by any of them to the extent such taxes have become
      due.

     

    Section
      5.10    Titles
      and Liens.  
      Borrower has good, indefeasible and marketable title to all Collateral and
      all
      of its other assets free and clear of all Liens other than Permitted Liens.
      No
      financing statement naming any Credit Party as debtor is on file in any office
      except to perfect only Permitted Liens.

     

    
      
        
          
          

        

        
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              Section
                5.11

            	
              Intellectual
                Property Rights. 

            

    

     

    (a)     Owned
      Intellectual Property.
      Schedule
      5.11
      is a
      complete list of all patents, applications for patents, trademarks, applications
      to register trademarks, service marks, applications to register service marks,
      mask works, trade dress and copyrights for which a Credit Party is the owner
      of
      record (the “Owned
      Intellectual Property”).
      Except as disclosed on Schedule
      5.11,
      (i) each Credit Party owns the Owned Intellectual Property free and clear
      of all restrictions (including covenants not to sue a third party), court
      orders, injunctions, decrees, writs or Liens, whether by written agreement
      or
      otherwise, (ii) no Person other than a Credit Party owns or has been
      granted any right in the Owned Intellectual Property, (iii) all Owned
      Intellectual Property is valid, subsisting and enforceable, and (iv) each
      Credit Party has taken all commercially reasonable action necessary to maintain
      and protect the Owned Intellectual Property.

     

    (b)    Intellectual
      Property Rights Licensed from Others.
      Schedule
      5.11
      is a
      complete list of all agreements under which a Credit Party has licensed
      Intellectual Property Rights from another Person (“Licensed
      Intellectual Property”)
      other
      than readily available, non-negotiated licenses of computer software and other
      intellectual property used solely for performing accounting, word processing
      and
      similar administrative tasks (“Off-the-shelf
      Software”)
      and a
      summary of any ongoing payments a Credit Party is obligated to make with respect
      thereto. Except as disclosed on Schedule
      5.11
      and in
      written agreements, copies of which have been given to Lender, each Credit
      Party’s licenses to use the Licensed Intellectual Property are free and clear of
      all restrictions, Liens, court orders, injunctions, decrees, or writs, whether
      by written agreement or otherwise. Except as disclosed on Schedule
      5.11,
      no
      Credit Party is obligated or under any liability whatsoever to make any payments
      of a material nature by way of royalties, fees or otherwise to any owner of,
      licensor of, or other claimant to, any Intellectual Property
      Rights.

     

    (c)     Other
      Intellectual Property Needed for Business.
      Except
      for Off-the-shelf Software and as disclosed on Schedule
      5.11,
      the
      Owned Intellectual Property and the Licensed Intellectual Property constitute
      all Intellectual Property Rights used or necessary to conduct each Credit
      Party’s business as it is presently conducted or as the Credit Party reasonably
      foresees conducting it.

     

    (d)     Infringement.
      Except
      as disclosed on Schedule
      5.11,
      no
      Credit Party has knowledge of, and has not received any written claim or notice
      alleging, any Infringement of another Person’s Intellectual Property Rights
      (including any written claim that a Credit Party must license or refrain from
      using the Intellectual Property Rights of any third party) nor, to BNC’s or
      Borrower’s knowledge, is there any threatened claim or any reasonable basis for
      any such claim.

     

    Section
      5.12     Plans.  
      Except as disclosed to Lender in writing prior to the date hereof, neither
      any
      Credit Party nor any ERISA Affiliate (i) maintains or has maintained any
      Pension Plan, (ii) contributes or has contributed to any Multiemployer Plan
      or (iii) provides or has provided post-retirement medical or insurance
      benefits with respect to employees or former employees (other than benefits
      required under Section 601 of ERISA, Section 4980B of the IRC or applicable
      state law). Neither any Credit Party nor any ERISA Affiliate has received any
      notice or has any knowledge to the effect that it is not in full compliance
      with
      any of the requirements of ERISA, the IRC or applicable state law with respect
      to any Plan. No Reportable Event exists in connection with any Pension Plan.
      Each Plan that is intended to qualify under the IRC is so qualified, and no
      fact
      or circumstance exists which may have an adverse effect on the Plan’s
      tax-qualified status. Neither any Credit Party nor any ERISA Affiliate has
      (i) any accumulated funding deficiency (as defined in Section 302 of ERISA
      and Section 412 of the IRC) under any Plan, whether or not waived,
      (ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal,
      partial withdrawal, reorganization or other event under any Multiemployer Plan
      or (iii) any liability or knowledge of any facts or circumstances which
      could result in any liability to the Pension Benefit Guaranty Corporation,
      the
      Internal Revenue Service, the Department of Labor or any participant in
      connection with any Plan (other than routine claims for benefits under the
      Plan).

     

    
      
        
          
          

        

        
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    Section
      5.13    Default.  
      Each Credit Party is in compliance with all provisions of all agreements,
      instruments, decrees and orders to which it is a party or by which it or its
      property is bound or affected, the breach or default of which could have a
      Material Adverse Effect.

     

    
      
        Section
          5.14    Environmental
          Matters. 

      

    

     

    (a)    Except
      as
      disclosed on Schedule
      5.14,
      to
      BNC’s or Borrower’s knowledge there are not present in, on or under the Premises
      any Hazardous Substances in such form or quantity as to create any material
      liability or obligation for either a Credit Party or Lender under the common
      law
      of any jurisdiction or under any Environmental Law, and no Hazardous Substances
      have ever been stored, buried, spilled, leaked, discharged, emitted or released
      in, on or under the Premises in such a way as to create any such material
      liability. 

     

    (b)    Except
      as
      disclosed on Schedule
      5.14,
      to
      BNC’s or Borrower’s knowledge no Credit Party has disposed of Hazardous
      Substances in such a manner as to create any material liability under any
      Environmental Law.

     

    (c)    Except
      as
      disclosed on Schedule
      5.14,
      to
      BNC’s or Borrower’s knowledge there have not existed in the past, nor are there
      any threatened or impending requests, claims, notices, investigations, demands,
      administrative proceedings, hearings or litigation relating in any way to the
      Premises or any Credit Party, alleging material liability under, violation
      of,
      or noncompliance with any Environmental Law or any license, permit or other
      authorization issued pursuant thereto. 

     

    (d)    Except
      as
      disclosed on Schedule
      5.14,
      to
      BNC’s or Borrower’s knowledge each Credit Party’s businesses are and have in the
      past always been conducted in accordance with all Environmental Laws and all
      licenses, permits and other authorizations required pursuant to any
      Environmental Law and necessary for the lawful and efficient operation of such
      businesses are in each Credit Party’s possession and are in full force and
      effect, nor has any Credit Party been denied insurance on grounds related to
      potential environmental liability. No permit required under any Environmental
      Law is scheduled to expire within 12 months and there is no threat that any
      such
      permit will be withdrawn, terminated, limited or materially
      changed.

     

    (e)    Except
      as
      disclosed on Schedule
      5.14,
      to
      BNC’s or Borrower’s knowledge the Premises are not and never have been listed on
      the National Priorities List, the Comprehensive Environmental Response,
      Compensation and Liability Information System or any similar federal, state
      or
      local list, schedule, log, inventory or database.

     

    
      
        
          
          

        

        
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    (f)    BNC
      and
      Borrower have delivered to Lender all environmental assessments, audits,
      reports, permits, licenses and other documents describing or relating in any
      way
      to the Premises or any Credit Party’s businesses.

     

    Section
      5.15     Submissions
      to Lender.  
      All financial and other information provided to Lender by or on behalf of BNC
      or
      Borrower in connection with BNC’s and Borrower’s request for the credit
      facilities contemplated hereby (i) is true and correct in all material
      respects, (ii) does not omit any material fact necessary to make such
      information not misleading and, (iii) as to projections, valuations or
      pro-forma financial statements, present a good faith opinion as to such
      projections, valuations and pro-forma condition and results.

     

    Section
      5.16     Financing
      Statements.  
      Borrower has authorized the filing of financing statements sufficient when
      filed
      to perfect the Security Interest and the other security interests created by
      the
      Security Documents. When such financing statements are filed in the offices
      noted therein, Lender will have a valid and perfected security interest in
      all
      Collateral that is capable of being perfected by filing financing statements.
      No
      filing is or will be necessary with the United States Department of Interior
      Mineral Management Service to perfect the Security Interest (including, without
      limitation, any Security Interest with respect to a Snubbing Unit located
      Offshore). None of the Collateral is or will become a fixture on real estate,
      or
      is or will constitute immovable property, as applicable, unless a sufficient
      fixture filing has been previously filed in favor of Lender and remains in
      effect with respect thereto. Article 9 of the UCC governs exclusively with
      respect to the grant, perfection and enforcement of a security interest and
      Lien
      upon any Snubbing Unit, including, without limitation, those Snubbing Units
      that
      may be located Offshore from time to time. 

     

    Section
      5.17     Rights
      to Payment.  
      Each right to payment and each instrument, document, chattel paper and other
      agreement constituting or evidencing Collateral is (or, in the case of all
      future Collateral, will be when arising or issued) the valid, genuine and
      legally enforceable obligation, subject to no defense, setoff or counterclaim,
      of the account debtor or other obligor named therein or in Borrower’s records
      pertaining thereto as being obligated to pay such obligation. 

     

    Section
      5.18     Deposit
      Accounts, Tort Claims and Investment Property.  
      Except for the Collateral Account and the deposit accounts disclosed on
Schedule 5.18, BNC and Borrower have no other deposit accounts. BNC
      and Borrower have no knowledge of any commercial tort claims that it may have
      against another Person. BNC and Borrower have no Investment Property, except
      for
      their ownership of the Equity Interests in the Subsidiaries set forth on
Schedule 5.2.

     

    Section
      5.19    No
      Labor Disputes. 
       All employees of each Credit Party are employed at will, and no such
      employees are represented by a union. No Credit Party is a party to any
      agreement for the provision of labor from any outside agency. No Credit Party
      is
      a party to any collective bargaining agreement. Each Credit Party has complied
      in all material respects with all laws related to the employment of employees.
      No Credit Party has received any written notice of any claim that it has not
      complied in any material respect with any laws relating to the employment of
      employees, including, without limitation, any provisions thereof relating to
      wages, hours, collective bargaining, the payment of Social Security and similar
      taxes, equal employment opportunity, employment discrimination, the WARN Act,
      employee safety, or that it is liable for any arrearages of wages or any taxes
      or penalties for failure to comply with any of the foregoing.

     

    
      
        
          
          

        

        
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    Section
      5.20     Compliance
      with Laws.  
      Each Credit Party is in compliance with all material laws, rules, regulations,
      orders and decrees applicable to it and its properties.

     

    Section
      5.21     Brokers.  
      Except for the amounts to be paid to Growth Capital Partners, L.P. pursuant
      to
      the letter agreement dated March 24, 2004 with BNC and to be paid to Oak Hollow
      Consulting, L.L.C. pursuant to the Consulting Agreement between Oak Hollow
      Consulting, L.L.C. and BNC dated August 16, 2002, all of which amounts will
      be
      paid in full on the date hereof, no Credit Party has incurred, nor will incur,
      directly or indirectly, as a result of any action taken or permitted to be
      taken
      by or on behalf of a Credit Party, any liability for brokerage or finders’ fees
      or agents’ commissions or similar charges in connection with the execution and
      performance of the transactions contemplated by this Agreement.

     

    Section
      5.22     Insurance. 
       Schedule 5.22 attached hereto lists all insurance policies of the
      Credit Parties. Those policies (i) are in amounts and have coverages that,
      in
      the judgment of BNC and Borrower, are reasonable and adequate in amount and
      (ii)
      are in amounts and have coverages as required by any agreement to which a Credit
      Party is a party or by which any of its assets or properties is bound. Each
      policy listed in Schedule 5.22 is valid and binding and in full force and
      effect, and no Credit Party has received any notice of cancellation or
      termination in respect of any such policy or is in default thereunder, and
      no
      Credit Party has knowledge of any reason or state of facts that could reasonably
      be expected to lead to the cancellation of such policies.

     

    Section
      5.23     Existing
      Indebtedness and Guaranties.  
      The Credit Parties have no Indebtedness (other than the Senior Subordinated
      Loans and as disclosed on Schedule 6.4), and none of the Credit Parties
      are a party to any guaranty (other than the Guaranties or as disclosed on
Schedule 6.4). 

     

    Section
      5.24     Affiliate
      Agreements.  
      Except as disclosed on Schedule 5.24, no Owner of BNC (having
“beneficial ownership” of more than five percent (5%) of the voting power of all
      classes of capital stock of BNC on a fully-diluted basis) or any Person related
      by blood, marriage or adoption to any such Person or any Affiliate is a party
      to
      any agreement, contract, commitment or transaction with a Credit Party or has
      any material interest in any material property used by a Credit
      Party.

     

    Section
      15.25     Investment
      Company Act.  
      Neither any Credit Party nor an Affiliate of a Credit Party is required to
      be
      registered as an “investment company” within the meaning of the Investment
      Company Act of 1940, as amended.

     

    Section
      5.26     Public
      Utility Holding Company Act.  
      No Credit Party is a “holding company” or a “subsidiary company” of a “holding
      company” or an “affiliate” of a “holding company” or a “public utility” within
      the meaning of the Public Utility Holding Company Act of 1935, as
      amended.

     

    
      
        
          
          

        

        
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    Section
      5.27     Interests
      in Real Property.  
      Except for the Premises that Borrower owns or leases and listed on
Exhibit D, neither BNC nor Borrower owns, leases or has an option to
      purchase any real property.

     

    Section
      5.28     Senior
      Subordinated Loan Documents and the HWC Transaction Documents.  
      BNC and Borrower have delivered to Lender true, correct and complete copies
      of
the
      Senior Subordinated Loan Documents, the Securities Repurchase Agreement and
      the
      HWC Transaction Documents.

     

    Section
      5.29     Snubbing
      Units.  
      A complete record of all Snubbing Units as of the date of this Agreement
      (including (w) identification of the serial number of each Snubbing Unit
      and the owner thereof, (x) identification of the location of each Snubbing
      Unit (by jurisdiction), (y) a notation of whether or not the Snubbing Unit
      located at a customer’s working job site pursuant to a written contract) and (z)
      whether such Snubbing Unit is a Mobile Snubbing Unit and, if so, annotation
      of
      whether such Mobile Snubbing Unit is covered by a certificate of title and
      the
      jurisdiction of issuance thereof) is set forth in Schedule 5.29
      hereto. No Snubbing Unit that constitutes Eligible Equipment is located outside
      the control and jurisdiction of the United States of America. Borrower has
      an
      express right of access to the Snubbing Units wherever located pursuant to
      the
      related Snubbing Unit Agreement, and without limiting the foregoing, Borrower
      has the right to enter on property where a Snubbing Unit is located and to
      remove such Snubbing Unit therefrom without interference from, or imposition
      of
      any Lien on such Snubbing Unit by, any owner, landlord, tenant or other Person
      with an interest in such property. Each Snubbing Unit is (a) a movable good,
      of
      a type normally used in more than one jurisdiction and not designed to be
      permanently used in any one location; (b) not a fixture, or immoveable property,
      as the case may be, under the laws of any jurisdiction in which a Snubbing
      Unit
      may be located; (c) not part of a “vessel”, as defined under applicable maritime
      law; and (d) not subject to, and is not being utilized pursuant to, a maritime
      contract. The Snubbing Units (including the Mobile Snubbing Units) are not
      “motor vehicles” under any statute, law, regulation or rule of any jurisdiction
      in which any of the Snubbing Units is located and are not certificated as motor
      vehicles under the laws of any jurisdiction. Borrower has delivered to Lender
      a
      true, correct and complete copy of its and HWC’s Snubbing Unit Agreement
      forms.

     

    Section
      5.30     Financial
      Solvency.  
      Both before and after giving effect to the transactions contemplated in the
      Loan
      Documents (including the making of any loan or Advance under this Agreement),
      neither any Credit Party nor any of its Affiliates:

     

    (a)     Was
      or
      will be insolvent, as that term is used and defined in Section 101(32) of the
      Bankruptcy Code and Section 2 of the Uniform Fraudulent Transfer Act, provided
      the foregoing representation excludes any Credit Party that is an Inactive
      Subsidiary;

     

    (b)     Has
      unreasonably small capital or is engaged or about to engage in a business or
      a
      transaction for which any remaining assets of such Credit Party or such
      Affiliate are unreasonably small, provided the foregoing representation excludes
      any Credit Party that is an Inactive Subsidiary;

     

    (c)     By
      executing, delivering or performing its obligations under the Loan Documents
      or
      other documents to which it is a party or by taking any action with respect
      thereto, intends to, nor believes that it will, incur debts beyond its ability
      to pay them as they mature, provided the foregoing representation excludes
      any
      Credit Party that is an Inactive Subsidiary;

     

    
      
        
          
          

        

        
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    (d)     By
      executing, delivering or performing its obligations under the Loan Documents
      or
      other documents to which it is a party or by taking any action with respect
      thereto, intends to hinder, delay or defraud either its present or future
      creditors; and

     

    (e)     At
      this
      time contemplates filing a petition in bankruptcy or for an arrangement or
      reorganization or similar proceeding under any law of any jurisdiction, nor,
      to
      the best knowledge of BNC and Borrower, is the subject of any actual, pending
      or
      threatened bankruptcy, insolvency or similar proceedings under any law of any
      jurisdiction.

     

    Section
      5.31     Personal
      Property Evidenced by a Certificate of Title.  
      Schedule 5.31 sets forth a true, correct and complete list of all motor
      vehicles or other personal property evidenced by a certificate of title owned
      by
      Borrower. 

     

    Section
      5.32     Contracts
      and Agreements.   No Credit Party is (a) a party to any
      judgment, order or decree or any agreement, document or instrument, or subject
      to any restriction, which would have a Material Adverse Effect on its ability
      to
      execute and deliver, or perform under, any Loan Document or to pay and perform
      the Obligations or (b) a party or subject to any agreement, document or
      instrument with respect to, or obligation to pay any, service or management
      fee
      with respect to, the ownership, operation, leasing or performance of any of
      its
      business. 

     

    ARTICLE
      VI

     

    COVENANTS

     

    Until
      the
      last to occur of the following events: (i) the Obligations have been paid
      and performed in full and (ii) the entire Credit Facility has been
      terminated, Borrower and BNC jointly and severally will comply with the
      following requirements, unless Lender shall otherwise consent in
      writing:

     

    Section
      6.1     Reporting
      Requirements.  
      BNC and Borrower will deliver, or cause to be delivered, to Lender each of
      the
      following, which shall be in form and detail acceptable to Lender:

     

    (a)     Annual
      Financial Statements.
      As soon
      as available, and in any event within 90 days after the end of each fiscal
      year
      of BNC, BNC’s audited financial statements with the unqualified opinion of
      independent certified public accountants selected by BNC and reasonably
      acceptable to Lender, which annual financial statements shall include BNC’s
      balance sheet as at the end of such fiscal year and the related statements
      of
      BNC’s income, retained earnings and cash flows for the fiscal year then ended,
      prepared on a consolidated basis to include any Affiliates, all in reasonable
      detail and prepared in accordance with GAAP, together with (i) copies of
      all management letters prepared by such accountants; (ii) a report signed
      by such accountants stating that in making the investigations necessary for
      said
      opinion they obtained no knowledge, except as specifically stated, of any
      Default or Event of Default and all relevant facts in reasonable detail to
      evidence, and the computations as to, whether or not BNC is in compliance with
      the Financial Covenants; and (iii) a certificate of BNC’s chief financial
      officer stating that such financial statements have been prepared in accordance
      with GAAP, fairly represent BNC’s and its Subsidiaries financial position and
      the results of their operations, and whether or not such Officer has knowledge
      of the occurrence of any Default or Event of Default and, if so, stating in
      reasonable detail the facts with respect thereto.

     

    
      
        
          
          

        

        
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            46

          
            

          

        

        
          
          

        

      

    

    

    (b)     Monthly
      Financial Statements.
      As soon
      as available and in any event within 30 days after the end of each month, the
      unaudited/internal balance sheet and statements of income and retained earnings
      of BNC and its Subsidiaries as at the end of and for such month and for the
      year
      to date period then ended, prepared, if Lender so requests, on a consolidating
      and consolidated basis to include any Affiliates, in reasonable detail and
      stating in comparative form the figures for the corresponding date and periods
      in the previous year, all prepared in accordance with GAAP, subject to year-end
      audit adjustments and which fairly represent BNC’s and its Subsidiaries
      financial position and the results of their operations; and accompanied by
      a
      certificate of BNC’s chief financial officer, substantially in the form of
Exhibit
      C
      hereto
      stating (i) that such financial statements have been prepared in accordance
      with GAAP, subject to year-end audit adjustments, and fairly represent BNC’s and
      its Subsidiaries financial position and the results of their operations,
      (ii) whether or not such Officer has knowledge of the occurrence of any
      Default or Event of Default not theretofore reported and remedied and, if so,
      stating in reasonable detail the facts with respect thereto, and (iii) all
      relevant facts in reasonable detail to evidence, and the computations as to,
      whether or not BNC and Borrower are in compliance with its covenants under
      this
      Agreement.

     

    (c)     Collateral
      Reports.
      Within
      15 days after the end of each month or more frequently if Lender so requires,
      Borrower’s accounts receivable and its accounts payable (listing all receivables
      and payables and the aging of each), in form and substance satisfactory to
      Lender in its sole discretion, which specifies, among other things, a detailed
      Inventory report, an Inventory certification report, and a calculation of
      Borrower’s ineligible Accounts, Eligible Unbilled Accounts, and Eligible
      Accounts, as of the end of such month or shorter time period. 

     

    (d)     Projections.
      No
      later than 30 days before the last day of each fiscal year, the Credit Parties’
projected balance sheets, income statements, statements of cash flow and
      Borrower’s projected Availability for each month of the succeeding fiscal year,
      each in reasonable detail. Such items will be certified by the Officer who
      is
      BNC’s chief financial officer as being the most accurate projections available
      and identical to the projections used by a Credit Party for internal planning
      purposes and be delivered with a statement of underlying assumptions and such
      supporting schedules and information as Lender may in its discretion
      require.

     

    (e)     Supplemental
      Reports.
      Weekly,
      or more frequently if Lender so requires, Borrower’s “daily collateral reports”,
      Snubbing Unit status report that identifies, among other things, the location
      of
      each Snubbing Unit, receivables schedules, sales reports and journals, cash
      receipt journals, copies of deposit tickets, collection reports, copies of
      credit memos, reports of Inventory levels, copies of invoices to account
      debtors, signed
      and dated shipment documents and delivery receipts for goods sold to said
      account debtors. Within 15 days after the end of each month or more frequently
      if Lender so requires, a report detailing the amount of accrued, but unpaid,
      VAT
      Taxes.

     

    (f)     Litigation.
      Within
      five (5) Business Days after the commencement thereof, notice in writing of
      all
      litigation and of all proceedings before any governmental or regulatory agency
      affecting a Credit Party (i) of the type described in Section
      5.14(c)
      or
      (ii) which seek a monetary recovery against a Credit Party in excess of
      $250,000.

     

    
      
        
          
          

        

        
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    (g)     Defaults.
      When
      any Officer of a Credit Party becomes aware of the probable occurrence of any
      Default or Event of Default, and no later than 3 Business Days after such
      Officer becomes aware of such Default or Event of Default, notice of such
      occurrence, together with a detailed statement by a responsible Officer of
      the
      Credit Party of the steps being taken by the Credit Party to cure the effect
      thereof.

     

    (h)     Plans.
      As soon
      as possible, and in any event within 30 days after a Credit Party knows or
      has
      reason to know that any Reportable Event with respect to any Pension Plan has
      occurred, a statement signed by the Officer who is BNC’s chief financial officer
      setting forth details as to such Reportable Event and the action which such
      Credit Party proposes to take with respect thereto, together with a copy of
      the
      notice of such Reportable Event to the Pension Benefit Guaranty Corporation.
      As
      soon as possible, and in any event within 10 days after a Credit Party fails
      to
      make any quarterly contribution required with respect to any Pension Plan under
      Section 412(m) of the IRC, Borrower and BNC will deliver to Lender a statement
      signed by the Officer who is BNC’s chief financial officer setting forth details
      as to such failure and the action which such Credit Party proposes to take
      with
      respect thereto, together with a copy of any notice of such failure required
      to
      be provided to the Pension Benefit Guaranty Corporation. As soon as possible,
      and in any event within ten days after a Credit Party knows or has reason to
      know that it has or is reasonably expected to have any liability under Sections
      4201 or 4243 of ERISA for any withdrawal, partial withdrawal, reorganization
      or
      other event under any Multiemployer Plan, BNC and Borrower will deliver to
      Lender a statement of BNC’s chief financial officer setting forth details as to
      such liability and the action which such Credit Party proposes to take with
      respect thereto.

     

    (i)     Disputes.
      Promptly upon knowledge thereof, notice of (i) any disputes or claims by
      Borrower’s customers, (ii) credit memos, and (iii) any goods returned
      to or recovered by Borrower, where the amount involved in clauses (i), (ii)
      or
      (iii) is more than $25,000 in each occurrence. 

     

    (j)     Officers
      and Directors.
      Promptly upon knowledge thereof, notice of any change in the Persons
      constituting a Credit Party’s Officers and Directors.

     

    (k)     Collateral.
      Promptly upon knowledge thereof, notice of any loss of, or material damage
      to,
      any Collateral or any substantial adverse change in any Collateral or the
      prospect of payment thereof where the amount involved is more than
      $25,000.

     

    (l)     Commercial
      Tort Claims.
      Promptly upon knowledge thereof, notice of any commercial tort claims it may
      bring against any Person, including the name and address of each defendant,
      a
      summary of the facts, an estimate of the Credit Party’s damages, copies of any
      complaint or demand letter submitted by a Credit Party, and such other
      information as Lender may request.

     

    (m)    Intellectual
      Property.

     

    (i)     30
      days
      prior written notice of a Credit Party’s intent to acquire material Intellectual
      Property Rights; except for transfers permitted under Section
      6.17,
      BNC and
      Borrower will give Lender 30 days prior written notice of a Credit Party’s
      intent to dispose of material Intellectual Property Rights and upon request
      shall provide Lender with copies of all proposed documents and agreements
      concerning such rights.

     

    
      
        
          
          

        

        
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    (ii)     Promptly
      upon knowledge thereof, notice of (A) any Infringement of its Intellectual
      Property Rights by others, (B) claims that a Credit Party is Infringing
      another Person’s Intellectual Property Rights and (C) any threatened
      cancellation, termination or material limitation of its Intellectual Property
      Rights.

     

    (iii)     Promptly
      upon receipt, copies of all registrations and filings with respect to its
      Intellectual Property Rights.

     

    (n)     Reports
      to Owners.
      Promptly upon their distribution, copies of all financial statements, reports
      and proxy statements which a Credit Party may send to its Owners, excluding
      any
      material provided to Owner in their capacity as Directors of BNC.

     

    (o)     SEC
      Filings.
      Promptly after the sending or filing thereof, copies of all regular and periodic
      reports which a Credit Party shall file with the Securities and Exchange
      Commission, or any national securities exchange.

     

    (p)     Tax
      Returns.
      As soon
      as possible, and in any event no later than five (5) Business Days after they
      are due to be filed, copies of the state and federal income tax returns and
      all
      schedules thereto of a Credit Party.

     

    (q)     Violations
      of Law.
      Promptly upon knowledge thereof, BNC and Borrower shall give Lender written
      notice of a Credit Party’s violation of any law, rule or regulation, the
      non-compliance with which could have a Material Adverse Effect on a Credit
      Party.

     

    (r)     Other
      Reports.
      From
      time to time, with reasonable promptness, any and all receivables schedules,
      Inventory reports, collection reports, Snubbing Unit status reports, deposit
      records, equipment schedules, copies of invoices to account debtors, shipment
      documents and delivery receipts for goods sold, and such other material,
      reports, records or information as Lender may request and is customary for
      transactions of the type contemplated by this Agreement. 

     

    
      
        Section
          6.2       Financial
          Covenants. 

      

    

     

    (a)     Minimum
      Book Net Worth. BNC
      and
      its Subsidiaries will on a consolidated basis maintain, during each period
      described below, the applicable Minimum Book Net Worth, determined as of the
      end
      of each fiscal month in such period, in an amount not less than the amount
      set
      forth for each such fiscal period (numbers appearing between “< >“ are
      negative):

     

    
      	
              Period

            	
              Minimum
                Book Net Worth

            
	
              March
                31, 2006 through December 31, 2006

            	
              90%
                of the Book Net Worth calculated as of March 1, 2006 on the basis
                of a pro
                forma balance sheet giving effect to the HWC Transactions and the
                BNC
                Merger delivered to Lender reflecting the Book Net Worth as of that
                date
                (which balance sheet shall be delivered to Lender on or before April
                15,
                2006) but in no event shall 90% of the Book Net Worth be less than
                $25,000,000

            

    

     

    
      
        
        

      

      
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          49

        
          

        

      

      
        
        

      

    

     

    
      	
              Period

            	
              Minimum
                Book Net Worth

            
	
              For
                each fiscal year ending thereafter and continuing until the Maturity
                Date

            	
              The
                greater of (i) the Minimum Book Net Worth required pursuant to this
                Section
                6.2(a)
                for the immediately preceding fiscal year, and (ii) 85% of the Book
                Net
                Worth calculated as of last day of the preceding fiscal year based
                on the
                unaudited or annual audited (as applicable) financial statements
                covering
                the preceding fiscal year. 

               

              If
                amended or restated financial statements change the previously calculated
                applicable Minimum Book Net Worth, Lender may reduce or increase
                the
                applicable Minimum Book Net Worth from the date of receipt of such
                amended
                or restated financial statements, to the beginning of the then current
                fiscal year or to the beginning of the fiscal month of the then current
                year, as Lender in its sole discretion deems
                appropriate.

            

    

     

    (b)     Minimum
      Debt Service Coverage Ratio.
      BNC and
      its Subsidiaries will on a consolidated basis maintain, as of each fiscal
      quarter end commencing with the fiscal quarter ending March 31, 2006, a Debt
      Service Coverage Ratio of not less than 1.50 to 1.0.

     

    (c)     Capital
      Expenditures.
      BNC and
      its Subsidiaries, including Borrower, will not incur or contract to incur
      Capital Expenditures (whether financed or Unfinanced Capital Expenditures)
      of
      more than $3,000,000 in the aggregate during any fiscal year.

     

    
      
        Section
          6.3      Permitted
          Liens; Financing Statements. 

      

    

     

    (a)     BNC
      and
      Borrower will not, and will not permit any other Credit Party to, create, incur
      or suffer to exist any Lien upon or of any of its assets, now owned or hereafter
      acquired, to secure any indebtedness; excluding, however, from the operation
      of
      the foregoing, the following (each a “Permitted
      Lien”;
      collectively, “Permitted
      Liens”):

     

    (i)     In
      the
      case of any of BNC’s or Borrower’s property which is not Collateral, covenants,
      restrictions, rights, easements and minor irregularities in title which do
      not
      materially interfere with BNC’s or Borrower’s business or operations as
      presently conducted;

     

    
      
        
          
          

        

        
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    (ii)     Liens
      in
      existence on the date hereof and listed in Schedule
      6.3
      hereto,
      securing indebtedness for borrowed money permitted under Section
      6.4
      and
      renewals and extensions (but not increases, refinancings, or other amendments
      affecting more than the extension of the term of the indebtedness) of such
      indebtedness;

     

    (iii)     The
      Security Interest and Liens created by the Security Documents; and

     

    (iv)     Purchase
      money Liens relating to the acquisition of machinery and equipment of Borrower
      not exceeding the lesser of cost or fair market value thereof, not exceeding
      $2,000,000 in the aggregate during any fiscal year, and so long as no Default
      Period is then in existence and none would exist immediately after such
      acquisition;

     

    (v)    
 Liens
      imposed by law for taxes that are not yet due or are being contested in
      compliance with Section 6.12;

     

    (vi)     carriers’,
      warehousemen’s, mechanics’, materialmen’s repairmen’s and other like Liens
      imposed by law, arising in the ordinary course of business and securing
      obligations that are not overdue or are being contested in compliance with
      Section 6.12,
      and in
      any event, no action to exercise or enforce such Lien has been
      commenced;

     

    (vii)     pledges
      and deposits made in the ordinary course of business in compliance with workers’
compensation, unemployment insurance and other social security laws or
      regulations; and

     

    (viii)    deposits
      to secure the performance of bids, trade contracts, leases, statutory
      obligations, surety and appeal bonds, performance bonds and other obligations
      (other than obligations for the repayment of Indebtedness, but excluding from
      this exception the deposit account reflected on Schedule
      5.18
      securing
      a bank guarantee issued on behalf of Amegy Bank N.A. to ICICI Bank Limited
      on
      behalf of BNC (the “Bank
      Guarantee”))
      of
      like nature, in each case arising in the ordinary course of business and not
      being secured by the Collateral.

     

    (b)    BNC
      and
      Borrower will not amend any financing statements in favor of Lender except
      as
      permitted by law. Any authorization by Lender to any Person to amend financing
      statements in favor of Lender shall be in writing.

     

    Section
      6.4    Indebtedness.  
      BNC and Borrower will not, and will not permit any other Credit Party to, incur,
      create, assume or permit to exist any indebtedness or liability on account
      of
      deposits or advances or any indebtedness for borrowed money or letters of credit
      issued on a Credit Party’s behalf, or any other indebtedness or liability
      evidenced by notes, bonds, debentures or similar obligations (collectively,
      “Indebtedness”),
      except:

     

    
      	 	
              (a)

            	
              Indebtedness
                arising hereunder;

            

    

     

    
      	 	
              (b)

            	
              Indebtedness
                arising under the Senior Subordinated
                Loans;

            

    

     

    
      
        
          
          

        

        
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            51

          
            

          

        

        
          
          

        

      

    

    

    (c)     Indebtedness
      of Borrower in existence on the date hereof and listed in Schedule
      6.4
      hereto
      and extensions or renewals (but not increases, refinancings or other amendments
      affecting more than the extension of the term of the indebtedness) of any such
      Indebtedness;

     

    (d)     Indebtedness
      relating to Permitted Liens; and

     

    (e)     Indebtedness
      of any wholly-owned Subsidiary to Borrower or any other wholly-owned Subsidiary
      of BNC (other than Borrower) that is not evidenced by a promissory note, is
      not
      secured, and is fully and deeply subordinated to the Obligations.

     

    Section
      6.5     Guaranties.  
      BNC and Borrower will not, and will not permit any other Credit Party to,
      assume, guarantee, endorse or otherwise become directly or contingently liable
      in connection with any obligations of any other Person, except:

     

    (a)     The
      Guaranties from time to time in effect pursuant to this Agreement;

     

    (b)     The
      endorsement of negotiable instruments by a Credit Party for deposit or
      collection or similar transactions in the ordinary course of business;

     

    (c)     Guaranties,
      endorsements and other direct or contingent liabilities in connection with
      the
      obligations of other Persons, in existence on the date hereof and listed in
      Schedule
      6.4
      hereto;
      and 

     

    (d)     Senior
      Subordinated Guarantees by all existing and future Domestic Subsidiaries.

     

    Section
      6.6      Investments
      and Subsidiaries.  
      BNC and Borrower will not, and will not permit any other Credit Party to, make
      or permit to exist any loans or advances to, or make any investment or acquire
      any interest whatsoever in, any other Person or Affiliate, including any
      partnership or joint venture, nor purchase or hold beneficially any stock or
      other securities or evidence of indebtedness of any other Person or Affiliate,
      except:

     

    (a)     Investments
      in direct obligations of the United States of America or any agency or
      instrumentality thereof whose obligations constitute full faith and credit
      obligations of the United States of America having a maturity of one year or
      less, commercial paper issued by U.S. corporations rated “A-1” or “A-2” by
      Standard & Poor’s Ratings Services or “P-1” or “P-2” by Moody’s Investors
      Service or certificates of deposit or bankers’ acceptances having a maturity of
      one year or less issued by members of the Federal Reserve System having deposits
      in excess of $100,000,000 (which certificates of deposit or bankers’ acceptances
      are fully insured by the Federal Deposit Insurance Corporation);

     

    (b)     Travel
      advances or loans to Borrower’s Officers and employees not exceeding at any one
      time (i) an aggregate of $15,000 per occurrence per Person, or (ii) $150,000
      in
      the aggregate outstanding at any time;

     

    
      
        (c) 
              Prepaid
          rent not exceeding one month or security deposits; and

      

    

     

    
      
        
          
          

        

        
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    (d)     Current
      investments in the Subsidiaries in existence on the date hereof and listed
      in
Schedule
      5.5
      hereto.

     

    BNC
      and
      Borrower will cause each of its Domestic Subsidiaries that is formed after
      the
      Funding Date to become a Guarantor and will cause all Equity Interests in any
      Subsidiary to be duly pledged to Lender, subject to the limitations set forth
      in
Section
      8.4.
      

     

    Section
      6.7     Dividends;
      Distributions
      and
      Equity. 
       BNC and Borrower will not (a) declare or pay any dividends (other than
      dividends payable solely in stock of BNC) on any class of its stock, or make
      any
      payment on account of the purchase, redemption or other retirement of any shares
      of such stock, or other securities or evidence of its indebtedness or make
      any
      Distribution in respect thereof, either directly or indirectly, except for
      (i)
      payments made to Lender on account of the Credit Facility, (ii) Distributions
      made to wholly-owned Subsidiaries of Borrower, (iii) Permitted Subordinated
      Debt
      Payments made in accordance with the Senior Subordinated Promissory Notes,
      and
      (iv) Distributions in cash to Seller in an aggregate amount not to exceed
      $6,500,000 on account of the Working Capital Adjustment, provided that such
      cash
      Distributions may not be made unless Lender has first received and approved
      documentation (satisfactory to Lender in its Permitted Discretion) supporting
      the amount of the Working Capital Adjustment and (b) sell or issue any Equity
      Interests in BNC or Borrower (other than issuances of Equity Interests in BNC
      (i) pursuant to a Working Capital Adjustment, (ii) as contemplated by the
      Securities Repurchase Agreement or (iii) as contemplated by the Registration
      Rights Agreement in connection with the issuance, registration and sale of
      the
      Equity Interests issued pursuant to the Transaction Agreement and beneficially
      owned by Oil States). 

     

    Section
      6.8     Salaries.  
      BNC and Borrower will not, and will not permit any other Credit Party to, pay
      excessive or unreasonable salaries, bonuses, royalties, license fees,
      commissions, consultant fees or other compensation; or increase the salary,
      bonus, commissions, consultant fees or other compensation of any Director,
      Officer or consultant, or any member of their families, by more than 10% in
      any
      one year, either individually or for all such Persons in the aggregate, or
      pay
      any such increase from any source other than profits earned in the year of
      payment.

     

    
      
        Section
          6.9      Books
          and Records; Collateral Examination, Inspection and Appraisals.
          

      

    

     

    (a)     BNC
      and
      Borrower will keep, and will cause the other Credit Party’s to keep, accurate
      books of record and account for itself pertaining to the Collateral and
      pertaining to such Credit Party’s business and financial condition and such
      other matters as Lender may from time to time request in which true and complete
      entries will be made in accordance with GAAP and, upon Lender’s request, will
      permit any officer, employee, attorney, accountant or other agent of Lender
      to
      audit, review, make extracts from or copy any and all company and financial
      books and records of a Credit Party at all times during ordinary business hours,
      to send and discuss with account debtors and other obligors requests for
      verification of amounts owed to Borrower, and to discuss a Credit Party’s
      affairs with any of its Directors, Officers, employees or agents. 

     

    (b)     BNC
      and
      Borrower hereby irrevocably authorize all accountants and third parties to
      disclose and deliver to Lender or its designated agent, at Borrower’s expense,
      all financial information, books and records, work papers, management reports
      and other information in their possession regarding a Credit Party.

     

    
      
        
          
          

        

        
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            53

          
            

          

        

        
          
          

        

      

    

    

    (c)     BNC
      and
      Borrower will permit, and will cause the other Credit Parties to permit, Lender
      or its employees, accountants, attorneys or agents, to examine and inspect
      any
      Collateral or any other property of a Credit Party at any time during ordinary
      business hours. 

     

    (d)     Lender
      may also, from time to time obtain at Borrower’s expense, an appraisal of
      Collateral by an appraiser acceptable to Lender in its sole discretion;
provided,
      however,
      Borrower shall only be obligated to reimburse Lender for one appraisal per
      year
      if no Event of Default exists at the times of ordering, receiving and seeking
      reimbursement for the appraisal.

     

    
      
        Section
          6.10    Account
          Verification.
          

      

    

     

    (a)     Lender
      or
      its agent may at any time and from time to time send or require Borrower to
      send
      requests for verification of accounts or notices of assignment to account
      debtors and other obligors. Lender or its agent may also at any time and from
      time to time telephone account debtors and other obligors to verify
      accounts.

     

    (b)     BNC
      and
      Borrower shall pay when due each account payable due to a Person holding a
      Permitted Lien (as a result of such payable) on any Collateral. 

     

    
      
        Section
          6.11    Compliance
          with Laws. 

      

    

     

    (a)     BNC
      and
      Borrower shall, and shall cause the other Credit Parties to, comply with the
      requirements of applicable laws and regulations, the non-compliance with which
      would materially and adversely affect its business or its financial condition,
      and BNC and Borrower shall use and keep the Collateral, and require that others
      use and keep the Collateral, only for lawful purposes, without violation of
      any
      federal, state or local law, statute or ordinance.

     

    (b)     Without
      limiting the foregoing undertakings, BNC and Borrower specifically agrees that
      it will, and will cause the other Credit Parties to, comply with all applicable
      Environmental Laws and obtain and comply with all permits, licenses and similar
      approvals required by any Environmental Laws, and will not generate, use,
      transport, treat, store or dispose of any Hazardous Substances in such a manner
      as to create any material liability or obligation under the common law of any
      jurisdiction or any Environmental Law.

     

    (c)     BNC
      and
      Borrower shall, and shall cause the other Credit Parties to, (i) ensure
      that neither BNC, Borrower nor any other Credit Party transacts business with
      a
      Person on the Specially Designated Nationals and Blocked Person List or other
      similar lists maintained by the Office of Foreign Assets Control (“OFAC”),
      the
      Department of the Treasury or included in any Executive Orders, (ii) not
      use or permit the use of the proceeds of the Credit Facility or any other
      financial accommodation from Lender to violate any of the foreign asset control
      regulations of OFAC or other applicable law, (iii) comply with all
      applicable Bank Secrecy Act laws and regulations, as amended from time to time,
      and (iv) otherwise comply with the USA Patriot Act as required by federal
      law and Lender’s policies and practices.

     

    Section
      6.12     Payment
      of Taxes and Other Claims.  
      BNC and Borrower will, and will cause the other Credit Parties to, pay or
      discharge, when due, (a) all taxes, assessments and governmental charges
      levied or imposed upon it or upon its income or profits, upon any properties
      belonging to a Credit Party (including the Collateral) or upon or against the
      creation, perfection or continuance of the Security Interest, prior to the
      date
      on which penalties attach thereto, (b) all federal, state and local taxes
      required to be withheld by a Credit Party, and (c) all lawful claims for
      labor, materials and supplies which, if unpaid, might by law become a Lien
      upon
      any properties of a Credit Party, provided that a Credit Party shall not be
      required to pay any such tax, assessment, charge or claim whose amount,
      applicability or validity is being contested in good faith by appropriate
      proceedings and for which proper reserves have been made.

     

    
      
        
          
          

        

        
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        Section
          6.13     Maintenance
          of Properties. 

      

    

     

    (a)     BNC
      and
      Borrower will, and will cause the other Credit Parties to, keep and maintain
      the
      Collateral and all of its other properties necessary or useful in its business
      in good condition, repair and working order (normal wear and tear excepted)
      and
      will from time to time replace or repair any worn, defective or broken parts.
      BNC and Borrower will, and will cause the other Credit Parties to, take all
      commercially reasonable steps necessary to protect and maintain a Credit Party’s
      Intellectual Property Rights.

     

    (b)     BNC
      and
      Borrower will defend the Collateral against all Liens, claims or demands of
      all
      Persons (other than Lender or any holder of the Permitted Lien) claiming the
      Collateral or any interest therein. BNC and Borrower will keep all Collateral
      free and clear of all Liens except Permitted Liens. BNC and Borrower will,
      and
      will cause the other Credit Parties to, take all commercially reasonable steps
      necessary to prosecute any Person infringing a Credit Party’s Intellectual
      Property Rights and to defend such Credit Party against any Person accusing
      such
      Credit Party of infringing any Person’s Intellectual Property
      Rights.

     

    (c)     BNC
      and
      Borrower will cause each Snubbing Unit to be kept numbered with identifying
      numbers as set forth on Schedule
      5.29
      hereto.
      BNC and Borrower will not change the identifying number of any Snubbing Unit
      without prior written consent from Lender.

     

    Section
      6.14     Insurance.  
      BNC and Borrower will, and will cause the other Credit Parties to, obtain and
      at
      all times maintain insurance with insurers acceptable to Lender, in such
      amounts, on such terms (including any deductibles) and against such risks as
      may
      from time to time be required by Lender, but in all events in such amounts
      and
      against such risks as is usually carried by companies engaged in similar
      business and owning similar properties in the same general areas in which
      Borrower operates (including water damage, domestic transit coverage, collapse
      coverage and coverage of fire with respect to each Snubbing Unit in an amount
      equal to or greater than the Net Orderly Liquidation Value of each Snubbing
      Unit
      with a deductible not greater than $10,000 per occurrence). Without limiting
      the
      generality of the foregoing, Borrower will at all times keep all of its tangible
      Collateral insured against risks of fire (including so-called extended
      coverage), theft, collision (for Collateral consisting of motor vehicles) and
      such other risks and in such amounts as Lender may reasonably request, with
      any
      loss payable to Lender to the extent of its interest, and all policies of such
      insurance shall contain a lender’s loss payable endorsement for Lender’s
      benefit. All policies of liability insurance required hereunder shall name
      Lender as an additional insured.

     

    
      
        
          
          

        

        
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    Section
      6.15     Preservation
      of Existence.  
      BNC and Borrower will, and will cause the other Credit Parties to, preserve
      and
      maintain its existence and all of its rights, privileges and franchises
      necessary or desirable in the normal conduct of its business and shall conduct
      its business in an orderly, efficient and regular manner.

     

    Section
      6.16     Delivery
      of Instruments;
      New
      Deposit Accounts.  
      BNC and Borrower will promptly deliver to Lender in pledge all instruments,
      documents, chattel paper and other Investment Property constituting Collateral,
      duly endorsed or assigned by BNC or Borrower upon the creation of such items.
      Borrower will utilize its Snubbing Unit Agreement form previously reviewed
      and
      approved by Lender when leasing a Snubbing Unit and will cause such form to
      include a conspicuous notation stating that all of Borrower’s rights to payment
      and any security interest arising under the Snubbing Unit Agreement form have
      been pledged to Lender. Upon opening any deposit accounts (other than the
      deposit accounts described on Schedule 5.18), BNC and Borrower will
      immediately deliver notice to Lender of the existence of such account and will,
      upon Lender’s request, deliver to Lender the appropriate control agreements to
      assure Lender a perfected Security Interest in such account. BNC and Borrower
      will not, and will not permit any other Credit Party to, allow (i) the petty
      cash deposit account described on Schedule 5.18 maintained with Hibernia
      Bank to have an outstanding balance in excess of $10,000 (provided that, during
      the thirty (30) day period following the date hereof, the outstanding balance
      may exceed $10,000 but may not exceed at any point $50,000), or (ii) the deposit
      accounts described on Schedule 5.18 maintained with Amegy Bank N.A. to
      have an aggregate, outstanding balance in excess of $500,000. Upon termination
      or expiration of the Bank Guarantee, BNC and Borrower will cause the deposit
      account previously securing the Bank Guarantee to be closed and all funds
      remaining in that deposit account to be promptly deposited into the Collateral
      Account. 

     

    Section
      6.17     Sale
      or Transfer of Assets; Suspension of Business Operations.  
      BNC and Borrower will not, and will not permit any other Credit Party to, sell,
      lease, assign, transfer or otherwise dispose of (i) the stock of any
      Subsidiary (other than Director’s qualifying shares issued in BNC or shares of a
      Foreign Subsidiary (that do not dilute or affect Lender’s pledge of the Equity
      Interests in the Foreign Subsidiary) required or deemed advisable to be issued
      to a foreign national in connection with any Foreign Subsidiary), (ii) all
      or a substantial part of its assets (a “substantial
      part”
shall
      be triggered if the value of any contemplated sale, lease, assignment, transfer
      or other disposition when aggregated all other similar transactions occurring
      in
      any fiscal year would exceed five percent (5%) of the then applicable Book
      Net
      Worth), or (iii) any Collateral or any interest therein (whether in one
      transaction or in a series of transactions) to any other Person other than
      the
      sale of Inventory in the ordinary course of business or the disposition of
      Equipment (other than Eligible Equipment or any other Equipment financed with
      an
      Equipment Term Advance) that is used, obsolete, worn out or surplus (the
      proceeds of which shall be paid to reduce the Obligations unless used
      immediately for the purchase of like Equipment) and will not liquidate, dissolve
      or suspend business operations, except that any Subsidiary that is an Inactive
      Subsidiary may liquidate or dissolve if (i)  BNC determines in good faith
      that such liquidation or dissolution is in the best interests of BNC, (ii)
      the
      liquidation or dissolution shall not have a Material Adverse Effect, and
      (iii) any assets of the Inactive Subsidiary are distributed to Borrower.
      For purposes of the preceding sentence, no Snubbing Unit shall be deemed part
      of
      Borrower’s Inventory. BNC and Borrower will not, and will not permit the other
      Credit Parties to, transfer any part of a Credit Party’s ownership interest in
      any Intellectual Property Rights and will not permit any agreement under which
      such Credit Party has licensed Licensed Intellectual Property to lapse, except
      that a Credit Party may transfer such rights or permit such agreements to lapse
      if it shall have reasonably determined that the applicable Intellectual Property
      Rights are no longer useful in its business. If BNC or Borrower transfers any
      Intellectual Property Rights for value, BNC and Borrower will pay over the
      proceeds to Lender for application to the Obligations. BNC and Borrower will
      not
      license any other Person to use any of Borrower’s Intellectual Property Rights,
      except that Borrower may grant licenses in the ordinary course of its business
      in connection with sales of Inventory or provision of services to its customers.
      Borrower will not, and will not permit any other Credit Party, to transfer
      any
      assets of a Credit Party to an Inactive Subsidiary. 

     

    
      
        
          
          

        

        
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    Section
      6.18     Consolidation
      and Merger; Asset Acquisitions.  
      Except for the BNC Merger, Borrower will not, and will not permit any other
      Credit Party to, consolidate with or merge into any Person, or permit any other
      Person to merge into it, or acquire (in a transaction analogous in purpose
      or
      effect to a consolidation or merger) all or substantially all the assets of
      any
      other Person; except that, if at the time thereof and immediately after giving
      effect thereto no Event of Default shall have occurred and be continuing,
      (i) any wholly-owned and Domestic Subsidiary of BNC may merge into Borrower
      in a transaction in which Borrower is the surviving corporation, and
      (ii) any wholly-owned Domestic Subsidiary (other than Borrower) may merge
      into another wholly-owned Domestic Subsidiary. BNC and Borrower shall cause
      the
      BNC Merger to be consummated not later than March 6, 2006. 

     

    Section
      6.19     Sale
      and Leaseback. 
       BNC and Borrower will not, and will not permit any other Credit Party to,
      enter into any arrangement, directly or indirectly, with any other Person
      whereby a Credit Party shall sell or transfer any real or personal property,
      whether now owned or hereafter acquired, and then or thereafter rent or lease
      as
      lessee such property or any part thereof or any other property which a Credit
      Party intends to use for substantially the same purpose or purposes as the
      property being sold or transferred.

     

    Section
      6.20     Restrictions
      on Nature of Business.  
      BNC and Borrower will not, and will not permit any other Credit Party to, engage
      in any line of business materially different from that presently engaged in
      by a
      Credit Party and will not purchase, lease or otherwise acquire assets not
      related to its business. No Inactive Subsidiary may commence business operations
      without Lender’s express, prior and written consent. 

     

    Section
      6.21     Accounting.  
      BNC and Borrower will not, and will not permit any other Credit Party to, adopt
      any material change in accounting principles other than as required by GAAP.
      BNC
      and Borrower will not, and will not permit any other Credit Party to, adopt,
      permit or consent to any change in its fiscal year.

     

    Section
      6.22     Discounts. 
       After notice from Lender given during the existence and continuance of a
      Default and then only, Borrower will not grant any discount, credit or allowance
      to any customer of Borrower or accept any return of goods sold. Borrower will
      not at any time modify, amend, subordinate, cancel or terminate the obligation
      of any account debtor or other obligor of Borrower, except in the normal course
      of business and then only if such action is dictated by commercial
      considerations in Borrower’s good faith judgment and such action need not be
      reported pursuant to Section 6.1(i).

     

    
      
        
          
          

        

        
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    Section
      6.23     Plans.  
      Unless disclosed to Lender pursuant to Section 5.12, neither any Credit Party
      nor any ERISA Affiliate will (i) adopt, create, assume or become a party to
      any Pension Plan, (ii) incur any obligation to contribute to any
      Multiemployer Plan, (iii) incur any obligation to provide post-retirement
      medical or insurance benefits with respect to employees or former employees
      (other than benefits required by law) or (iv) amend any Plan in a manner
      that would materially increase its funding obligations.

     

    Section
      6.24     Place
      of Business; Name.  
      BNC and Borrower will not, and will not permit any other Credit Party to,
      transfer its chief executive office or principal place of business to a location
      outside the state where its chief executive office or principal place of
      business is presently located, or move, relocate, close or sell any business
      location. BNC and Borrower will not permit any tangible Collateral or any
      records pertaining to the Collateral to be located in any state or area in
      which, in the event of such location, a financing statement covering such
      Collateral would be required to be, but has not in fact been, filed in order
      to
      perfect the Security Interest. BNC and Borrower will not, and will not permit
      any other Credit Party to, change its name or jurisdiction of
      organization.

     

    Section
      6.25     Constituent
      Documents. 
       BNC and Borrower will not, and will not permit any other Credit Party to,
      amend its Constituent Documents if such amendment would be adverse in any way
      to
      Lender or would affect Lender’s Lien or the classification of the Equity
      Interests as “securities” under Article 8 of the UCC.

     

    Section
      6.26     Senior
      Subordinated Loan Documents, Securities Repurchase Agreement and HWC Transaction
      Documents.  
      BNC and Borrower shall immediately deliver to Lender a true, correct and
      complete copy of any notice it or any Subsidiary receives in connection with
      the
      Senior Subordinated Loans, the Securities Repurchase Agreement or the HWC
      Transaction Documents, including notices of default, and BNC and Borrower shall
      immediately notify Lender in writing of the name and address of any subsequent
      holder of a Senior Subordinated Loan upon learning of a sale, assignment or
      other transfer of any Senior Subordinated Loan. BNC and Borrower will (i) timely
      comply with, and will cause its Subsidiaries to timely comply with, all of
      their
      respective obligations relating to the Senior Subordinated Loans, subject to
      the
      terms of the Subordination Agreement, (ii) timely enforce all of its material
      rights and remedies under the Senior Subordinated Loan Documents, the Securities
      Repurchase Agreement and the HWC Transaction Documents in accordance with their
      respective terms, (iii) not, and will not permit any of its Subsidiaries to,
      amend, waive or terminate any provision of the Senior Subordinated Loan
      Documents, the Securities Repurchase Agreement or the HWC Transaction Documents
      without the express written consent of Lender, and (iv) not make any
      Distribution under the Senior Subordinated Loan Documents or the HWC Transaction
      Documents, except in each case Permitted Subordinated Debt Payments made in
      accordance with the terms of the Senior Subordinated Promissory Notes.

     

    Section
      6.27     Transactions
      with Affiliates. 
       BNC and Borrower may not, and will not permit any of the Credit Parties
      to, enter into or consummate any transaction of any kind with any of its
      Affiliates other than: (a) salary, bonus and other compensation and
      employment arrangements as permitted under Section 6.8, (b) as set forth on
      Schedule 5.24, or (c) other transactions and payments under and pursuant to
      written agreements entered into by and between a Credit Party and one or more
      of
      its Affiliates that reflect and constitute transactions and payments on overall
      terms at least as favorable to the Credit Party as would be the case in an
      arm’s
      length transaction between unrelated parties of equal bargaining power; however,
      except as expressly permitted under this Agreement, no Credit Party may enter
      into or consummate any transaction or agreement pursuant to which it becomes
      a
      party to any mortgage, note, indenture or guarantee evidencing any indebtedness
      of any of its Affiliates or otherwise to become responsible or liable, as a
      guarantor, surety or otherwise, pursuant to an agreement for any indebtedness
      of
      any such Affiliate.

     

    
      
        
          
          

        

        
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    Section
      6.28     Snubbing
      Units.  
      Borrower shall at all times have access to the Snubbing Units wherever located
      pursuant to a Snubbing Unit Agreement, and Borrower shall have the right to
      enter on property where a Snubbing Unit is located and to remove such Snubbing
      Unit therefrom without interference from, or imposition of any Lien on such
      Snubbing Unit by, any owner, landlord, tenant or other Person with an interest
      in such property. No Snubbing Unit that constitutes Eligible Equipment may
      ever
      be located outside the control and jurisdiction of the United States of America.
      BNC and Borrower shall ensure that each Snubbing Unit never (a) constitutes
      a
      fixture, or immoveable property, as the case may be, under the laws of any
      jurisdiction in which a Snubbing Unit may be located, (b) constitutes part
      of a
“vessel”, as defined under applicable maritime law, (c) becomes subject to, or
      is being utilized pursuant to, a maritime contract, (d) constitutes a “motor
      vehicle” under any statute, law, regulation or rule of any jurisdiction in which
      any Snubbing Unit is located, and (e) is certificated as a motor vehicle under
      the laws of any jurisdiction. Each Snubbing Unit that Lender has financed under
      the Equipment Term Advance shall at all times constitute Eligible Equipment.
      Borrower will use commercially reasonable efforts to timely enforce and realize
      upon all rights and remedies it may have from time to time under applicable
      law,
      including all Lien rights under Chapter 56 of the Texas Property Code, as
      amended and in effect, or other analogous rights under the laws of the
      jurisdiction where Borrower has provided materials and services pursuant to
      a
      Snubbing Unit Agreement. 

     

    Section
      6.29     Performance
      by Lender.  
      If BNC or Borrower, or both of them, at any time fails to perform or observe
      any
      of the foregoing covenants contained in this Article VI or elsewhere
      herein, and if such failure shall continue for a period of ten calendar days
      after Lender gives BNC or Borrower written notice thereof (or in the case of
      the
      agreements contained in Section 6.11 and Section 6.13, immediately
      upon the occurrence of such failure, without notice or lapse of time), Lender
      may, but need not, perform or observe such covenant on behalf and in the name,
      place and stead of Borrower (or, at Lender’s option, in Lender’s name) and may,
      but need not, take any and all other actions which Lender may reasonably deem
      necessary to cure or correct such failure (including the payment of taxes,
      the
      satisfaction of Liens, the performance of obligations owed to account debtors
      or
      other obligors, the procurement and maintenance of insurance, the execution
      of
      assignments, security agreements and financing statements, and the endorsement
      of instruments); and Borrower shall thereupon pay to Lender on demand the amount
      of all monies expended and all costs and expenses (including reasonable
      attorneys’ fees and legal expenses) incurred by Lender in connection with or as
      a result of the performance or observance of such agreements or the taking
      of
      such action by Lender, together with interest thereon from the date expended
      or
      incurred at the Default Rate. To facilitate Lender’s performance or observance
      of such covenants of BNC and Borrower, BNC and Borrower hereby irrevocably
      appoint Lender, or Lender’s delegate, acting alone, as BNC’s and Borrower’s
      attorney in fact (which appointment is coupled with an interest) with the right
      (but not the duty) from time to time to create, prepare, complete, execute,
      deliver, endorse or file in the name and on behalf of BNC and Borrower, or
      both
      of them, any and all instruments, documents, assignments, security agreements,
      financing statements, applications for insurance and other agreements and
      writings required to be obtained, executed, delivered or endorsed by BNC and
      Borrower hereunder.

     

    
      
        
          
          

        

        
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    ARTICLE
      VII

     

    EVENTS
      OF DEFAULT, RIGHTS AND REMEDIES

     

    Section
      7.1     Events
      of Default.  
      “Event
      of Default”,
      wherever used herein, means any one of the following events:

     

    (a)     Default
      in the payment of any Obligations when they become due and payable and such
      Default continuing unremedied for more than three (3) Business
      Days;

     

    (b)     Default
      in the performance, or breach, of any covenant or agreement of BNC or Borrower
      contained in this Agreement or any other Loan Document, provided with respect
      to
      Default of Sections 6.1,
      6.11, 6.12
      and
6.13,
      such
      Default continues unremedied for more than two (2) Business Days and with
      respect to a Default of Sections 6.10
      and
6.26
      (other
      than with respect to any action affecting the Senior Subordinated Loan
      Documents, for which there shall be no cure), such Default continues unremedied
      for more than fifteen (15) days;

     

    (c)     Any
      Guarantor shall repudiate, purport to revoke or fail to perform any obligation
      under its Guaranty, any individual Guarantor shall die or any other Guarantor
      shall cease to exist (other than an Inactive Subsidiary that has not recommenced
      operations and has been dissolved or liquated in accordance with this Agreement)
      shall cease to exist;

     

    (d)     An
      Overadvance arises as the result of any reduction in the Borrowing Base, or
      arises in any manner on terms not otherwise approved of in advance by Lender
      in
      writing; 

     

    (e)     A
      Change
      of Control shall occur;

     

    (f)     Any
      Financial Covenant shall become inapplicable due to the lapse of time and the
      failure to amend any such covenant to cover future periods;

     

    (g)     A
      Credit
      Party shall be or become insolvent, or admit in writing its inability to pay
      its
      debts as they mature, or make an assignment for the benefit of creditors; or
      a
      Credit Party shall apply for or consent to the appointment of any receiver,
      trustee, or similar officer for it or for all or any substantial part of its
      property; or such receiver, trustee or similar officer shall be appointed
      without the application or consent of the affected Credit Party, as the case
      may
      be; or a Credit Party shall institute (by petition, application, answer, consent
      or otherwise) any bankruptcy, insolvency, reorganization, arrangement,
      readjustment of debt, dissolution, liquidation or similar proceeding relating
      to
      it under the laws of any jurisdiction; or any such proceeding shall be
      instituted (by petition, application or otherwise) against a Credit Party
      (except that any Inactive Subsidiary may, in accordance with this Agreement,
      dissolve or liquidate before it re-commences operations); or any judgment,
      writ,
      warrant of attachment or execution or similar process shall be issued or levied
      against a substantial part of the property of a Credit Party;

     

    
      
        
          
          

        

        
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    (h)     A
      petition shall be filed against a Credit Party under the Bankruptcy Code naming
      the Credit Party as debtor and such petition shall continue undismissed for
      sixty (60) days, or a petition shall be filed by a Credit Party under the
      Bankruptcy Code naming such Credit Party as debtor; 

     

    (i)     Any
      representation or warranty made by BNC or Borrower, or both of them, in this
      Agreement or by a Credit Party (or any of their respective Officers) in any
      agreement, certificate, instrument or financial statement or other statement
      contemplated by or made or delivered pursuant to or in connection with this
      Agreement or any such guaranty shall prove to have been incorrect in any
      material respect when deemed to be effective;

     

    (j)     The
      rendering against a Credit Party of an arbitration award, final judgment, decree
      or order for the payment of money in excess of $100,000 (or that award, final
      judgment, decree or order would when aggregated with all other unsatisfied
      awards, final judgments, decrees or orders for the payment of money exceed
      $100,000) and the continuance of such arbitration award, judgment, decree or
      order unsatisfied and in effect for any period of 30 consecutive days without
      a
      stay of execution;

     

    (k)     A
      default
      under any bond, debenture, note or other evidence of material indebtedness
      of a
      Credit Party (including the Senior Subordinated Loans) owed to any Person other
      than Lender, or under any indenture or other instrument under which any such
      evidence of indebtedness has been issued or by which it is governed, or under
      any material lease or other contract, and the expiration of the applicable
      period of grace, if any, specified in such evidence of indebtedness, indenture,
      other instrument, lease or contract;

     

    (l)     Any
      Reportable Event, which Lender determines in good faith might constitute grounds
      for the termination of any Pension Plan or for the appointment by the
      appropriate United States District Court of a trustee to administer any Pension
      Plan, shall have occurred and be continuing 30 days after written notice to
      such
      effect shall have been given to a Credit Party by Lender; or a trustee shall
      have been appointed by an appropriate United States District Court to administer
      any Pension Plan; or the Pension Benefit Guaranty Corporation shall have
      instituted proceedings to terminate any Pension Plan or to appoint a trustee
      to
      administer any Pension Plan; or any Credit Party or any ERISA Affiliate shall
      have filed for a distress termination of any Pension Plan under Title IV of
      ERISA; or any Credit Party or any ERISA Affiliate shall have failed to make
      any
      quarterly contribution required with respect to any Pension Plan under Section
      412(m) of the IRC, which Lender determines in good faith may by itself, or
      in
      combination with any such failures that Lender may determine are likely to
      occur
      in the future, result in the imposition of a Lien on a Credit Party’s assets in
      favor of the Pension Plan; or any withdrawal, partial withdrawal, reorganization
      or other event occurs with respect to a Multiemployer Plan which results or
      could reasonably be expected to result in a material liability of a Credit
      Party
      to the Multiemployer Plan under Title IV of ERISA;

     

    (m)     A
      Credit
      Party shall, except as expressly permitted by the terms of this Agreement,
      liquidate, dissolve, terminate or suspend its business operations or otherwise
      fail to operate its business in the ordinary course, merge with another Person;
      or sell or attempt to sell all or substantially all of its assets, without
      Lender’s prior written consent;

     

    
      
        
          
          

        

        
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    (n)     Default
      in the payment of any amount owed by a Credit Party to Lender other than any
      indebtedness arising hereunder and the expiration of the applicable period
      of
      grace, if any, specified in such evidence of indebtedness;

     

    (o)     A
      Credit
      Party shall take or participate in any action that is prohibited under the
      provisions of any Senior Subordinated Promissory Note or make any payment on
      account of the indebtedness evidenced by the Senior Subordinated Promissory
      Notes that any Person is not entitled to receive under the provisions of the
      Senior Subordinated Promissory Notes (as initially in effect and without giving
      effect to any amendment thereto) or under this Agreement;

     

    (p)     Any
      breach, default or event of default by or attributable to any Affiliate under
      any agreement between such Affiliate and Lender shall occur and such breach,
      default or event of default would have a Material Adverse Effect;
      or

     

    (q)     The
      indictment of any Director or Officer of a Credit Party for a felony offence
      under state or federal law.

     

    Section
      7.2     Rights
      and Remedies.  
      During any Default Period, Lender may exercise any or all of the following
      rights and remedies:

     

    (a)     Lender
      may, by notice to Borrower, declare the Commitment to be terminated, whereupon
      the same shall forthwith terminate;

     

    (b)     Lender
      may, by notice to Borrower, declare the Obligations to be forthwith due and
      payable, whereupon all Obligations shall become and be forthwith due and
      payable, without presentment, notice of dishonor, notice of intent to
      accelerate, notice of acceleration, protest or further notice of any kind,
      all
      of which Borrower hereby expressly waives;

     

    (c)     Lender
      may, without notice to Borrower and without further action, apply any and all
      money owing by Lender to Borrower to the payment of the
      Obligations;

     

    (d)     Lender
      may exercise and enforce any and all rights and remedies available upon default
      to a secured party under the UCC, including the right to take possession of
      Collateral, or any evidence thereof, proceeding without judicial process or
      by
      judicial process (without a prior hearing or notice thereof, which Borrower
      hereby expressly waives) and the right to sell, lease or otherwise dispose
      of
      any or all of the Collateral (with or without giving any warranties as to the
      Collateral, title to the Collateral or similar warranties), and, in connection
      therewith, Borrower will on demand assemble the Collateral and make it available
      to Lender at a place to be designated by Lender which is reasonably convenient
      to both parties;

     

    (e)     Lender
      may make demand upon Borrower and, immediately upon such demand, Borrower will
      pay to Lender in immediately available funds for deposit in the Special Account
      pursuant to Section
      2.5
      an
      amount equal to the aggregate maximum amount available to be drawn under all
      Letters of Credit then outstanding, notwithstanding that the conditions for
      drawing thereunder may not yet have been satisfied;

     

    
      
        
          
          

        

        
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    (f)     Lender
      may exercise and enforce its rights and remedies under the Loan Documents;
      

     

    (g)     Lender
      may without regard to any waste, adequacy of the security or solvency of BNC
      or
      Borrower, or both of them, apply for the appointment of a receiver of the
      Collateral, to which appointment BNC and Borrower hereby consent, whether or
      not
      foreclosure proceedings have been commenced under the Security Documents and
      whether or not a foreclosure sale has occurred; and 

     

    (h)     Lender
      may exercise any other rights and remedies available to it by law or
      agreement.

     

    Notwithstanding
      the foregoing, upon the occurrence of an Event of Default described in
Section
      7.1(g)
      or
      (h),
      the
      Obligations shall be immediately due and payable automatically without
      presentment, demand, protest or notice of any kind. If Lender sells any of
      the
      Collateral on credit, the Obligations will be reduced only to the extent of
      payments actually received. If the purchaser fails to pay for the Collateral,
      Lender may resell the Collateral and shall apply any proceeds actually received
      to the Obligations. Lender may apply the proceeds of Collateral to the
      Obligations in whatever order and manner as Lender may elect in its sole
      discretion.

    

      Section
        7.3     Certain
        Notices. 
         If notice to Borrower of any intended disposition of Collateral or any
        other intended action is required by law in a particular instance, such notice
        shall be deemed commercially reasonable if given (in the manner specified
        in
Section 8.3) at least ten calendar days before the date of intended
        disposition or other action.

       

    

    ARTICLE
      VIII

     

    MISCELLANEOUS

     

    Section
      8.1     No
      Waiver; Cumulative Remedies; Compliance with Laws;
      No
      Marshaling.  
      No failure or delay by Lender in exercising any right, power or remedy under
      the
      Loan Documents shall operate as a waiver thereof; nor shall any single or
      partial exercise of any such right, power or remedy preclude any other or
      further exercise thereof or the exercise of any other right, power or remedy
      under the Loan Documents. The remedies provided in the Loan Documents are
      cumulative and not exclusive of any remedies provided by law. Lender may comply
      with any applicable state or federal law requirements in connection with a
      disposition of the Collateral and such compliance will not be considered
      adversely to affect the commercial reasonableness of any sale of the Collateral.
      Borrower consents and agrees that Lender shall be under no obligation to marshal
      any of Borrower’s assets or Lender’s Liens against or in payment of any or all
      of the Obligations.

     

    Section
      8.2     Amendments,
      Etc.  
      No amendment, modification, termination or waiver of any provision of any Loan
      Document or consent to any departure by Borrower therefrom or any release of
      a
      Security Interest shall be effective unless the same shall be in writing and
      signed by Lender, and then such waiver or consent shall be effective only in
      the
      specific instance and for the specific purpose for which given. No notice to
      or
      demand on Borrower in any case shall entitle Borrower to any other or further
      notice or demand in similar or other circumstances.

     

    
      
        
          
          

        

        
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    Section
      8.3     Notices;
      Communication of Confidential Information; Requests for
      Accounting.  
      Except as otherwise expressly provided herein, all notices, requests, demands
      and other communications provided for under the Loan Documents shall be in
      writing and shall be (a) personally delivered, (b) sent by first class
      United States mail, (c) sent by overnight courier of national reputation,
      (d) transmitted by telecopy, or (e) sent as electronic mail, in each
      case delivered or sent to the party to whom notice is being given to the
      business address, telecopier number, or e mail address set forth below next
      to
      its signature or, as to each party, at such other business address, telecopier
      number, or e mail address as it may hereafter designate in writing to the other
      party pursuant to the terms of this Section. All such notices, requests, demands
      and other communications shall be deemed to be an authenticated record
      communicated or given on (a) the date received if personally delivered,
      (b) when deposited in the mail if delivered by mail, (c) the date
      delivered to the courier if delivered by overnight courier, or (d) the date
      of transmission if sent by telecopy or by e mail, except that notices or
      requests delivered to Lender pursuant to any of the provisions of Article II
      shall not be effective until received by Lender. All notices, financial
      information, or other business records sent by either party to this Agreement
      may be transmitted, sent, or otherwise communicated via such medium as the
      sending party may deem appropriate and commercially reasonable; provided,
      however, that the risk that the confidentiality or privacy of such notices,
      financial information, or other business records sent by either party may be
      compromised shall be borne exclusively by Borrower. All requests for an
      accounting under Section 9.210 of the UCC (i) shall be made in a writing
      signed by a Person authorized under Section 2.2(a), (ii) shall be
      personally delivered, sent by registered or certified mail, return receipt
      requested, or by overnight courier of national reputation, (iii) shall be
      deemed to be sent when received by Lender and (iv) shall otherwise comply
      with the requirements of Section 9.210 of the UCC. Borrower requests that Lender
      respond to all such requests that on their face appear to come from an
      authorized individual and releases Lender from any liability for so responding.
      Borrower shall pay Lender the maximum amount allowed by law for responding
      to
      such requests. 

     

    Section
      8.4     Further
      Documents.  
      Borrower will from time to time execute, deliver, endorse and authorize the
      filing of any and all instruments, documents, conveyances, assignments, security
      agreements, financing statements, control agreements and other agreements and
      writings that Lender may reasonably request in order to secure, protect, perfect
      or enforce the Security Interest or Lender’s rights under the Loan Documents
      (but any failure to request or assure that Borrower executes, delivers, endorses
      or authorizes the filing of any such item shall not affect or impair the
      validity, sufficiency or enforceability of the Loan Documents and the Security
      Interest, regardless of whether any such item was or was not executed, delivered
      or endorsed in a similar context or on a prior occasion); provided, however,
      Borrower shall not be required to pledge more than sixty-five percent (65%)
      of
      the voting Equity Interests of any Foreign Subsidiary, to the extent such a
      pledge of additional Equity Interests would result in material and adverse
      tax
      consequences to Borrower under Section 956 of the IRC as determined by Lender
      in
      its sole discretion.

     

    Section
      8.5     Costs
      and Expenses.  
      Borrower shall pay on demand all costs and expenses, including reasonable
      attorneys’ fees, closing costs, appraisal fees, UCC search and recording fees,
      costs of individual and corporate credit reports, surveys, and real estate
      title
      searches, environmental assessment fees and Collateral auditing fees, incurred
      by Lender in connection with the Obligations, this Agreement, the Loan
      Documents, and any other document or agreement related hereto or thereto, and
      the transactions contemplated hereby, including all such costs, expenses and
      fees incurred in connection with the negotiation, preparation, execution,
      amendment, administration, performance, collection and enforcement of the
      Obligations and all such documents and agreements and the creation, perfection,
      protection, satisfaction, foreclosure or enforcement of the Security
      Interest.

     

    
      
        
          
          

        

        
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            64

          
            

          

        

        
          
          

        

      

    

    

    Section
      8.6     Indemnity. 
       In addition to the payment of expenses pursuant to Section 8.5, Borrower
      and BNC shall indemnify, defend and hold harmless Lender, and any of its
      participants assigns, parent corporations, subsidiary corporations, affiliated
      corporations, successor corporations, and all present and future officers,
      directors, employees, attorneys and agents of the foregoing (the “Indemnitees”)
      from
      and against any of the following (collectively, “Indemnified
      Liabilities”):

     

    (i)     Any
      and
      all transfer taxes, documentary taxes, assessments or charges made by any
      governmental authority by reason of the execution and delivery of the Loan
      Documents or the making of the Advances;

     

    (ii)     Any
      claims, loss or damage to which any Indemnitee may be subjected if any
      representation or warranty contained in Section
      5.14
      proves
      to be incorrect in any respect or as a result of any violation of the covenant
      contained in Section
      6.11(b);
      and

     

    (iii)     Any
      and
      all other liabilities (INCLUDING ALL STRICT LIABILITIES), losses, damages,
      penalties, judgments, suits, claims, costs and expenses of any kind or nature
      whatsoever (including the reasonable fees and disbursements of counsel) in
      connection with the foregoing and any other investigative, administrative or
      judicial proceedings, whether or not such Indemnitee shall be designated a
      party
      thereto, which may be imposed on, incurred by or asserted against any such
      Indemnitee, in any manner related to or arising out of or in connection with
      the
      making of the Advances and the Loan Documents or the use or intended use of
      the
      proceeds of the Advances. 

     

    If
      any
      investigative, judicial or administrative proceeding arising from any of the
      foregoing is brought against any Indemnitee, upon such Indemnitee’s request,
      Borrower and BNC, or counsel designated by Borrower and BNC and satisfactory
      to
      the Indemnitee, will resist and defend such action, suit or proceeding to the
      extent and in the manner directed by the Indemnitee, at Borrower’s and BNC’s
      sole costs and expense. Each Indemnitee will use its best efforts to cooperate
      in the defense of any such action, suit or proceeding. If the foregoing
      undertaking to indemnify, defend and hold harmless may be held to be
      unenforceable because it violates any law or public policy, Borrower and BNC
      shall nevertheless make the maximum contribution to the payment and satisfaction
      of each of the Indemnified Liabilities that is permissible under applicable
      law.
IT
      IS THE INTENTION OF BORROWER AND BNC, AND BORROWER AND BNC AGREE, THAT THE
      INDEMNITIES CONTAINED IN THIS AGREEMENT SHALL APPLY WITH RESPECT TO THE
      INDEMNIFIED MATTERS, WHICH MAY BE IN WHOLE OR IN PART CAUSED BY OR MAY ARISE
      OUT
      OF THE SOLE, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OR ANY STRICT LIABILITY
      OF
      ANY INDEMNITEE;
      HOWEVER,
      SUCH INDEMNITIES SHALL NOT EXTEND TO AN OTHERWISE INDEMNIFIED MATTER TO THE
      EXTENT THAT IT ARISES OUT OF THE INDEMNITEE’S GROSS NEGLIGENCE OR WILLFUL
      MISCONDUCT.
      Borrower’s and BNC’s obligation under this Section
      8.6
      shall
      survive the termination of this Agreement and the discharge of Borrower’s and
      BNC’s other obligations hereunder.

     

    
      
        
          
          

        

        
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            65

          
            

          

        

        
          
          

        

      

    

    

    Section
      8.7     Participants. 
       Lender and its participants, if any, are not partners or joint venturers,
      and Lender shall not have any liability or responsibility for any obligation,
      act or omission of any of its participants. All rights and powers specifically
      conferred upon Lender may be transferred or delegated to any of Lender’s
      participants, successors or assigns.

     

    Section
      8.8     Execution
      in Counterparts; Telefacsimile Execution.  
      This Agreement and other Loan Documents may be executed in any number of
      counterparts, each of which when so executed and delivered shall be deemed
      to be
      an original and all of which counterparts, taken together, shall constitute
      but
      one and the same instrument. Delivery of an executed counterpart of this
      Agreement by telefacsimile shall be equally as effective as delivery of an
      original executed counterpart of this Agreement. Any party delivering an
      executed counterpart of this Agreement by telefacsimile also shall deliver
      an
      original executed counterpart of this Agreement but the failure to deliver
      an
      original executed counterpart shall not affect the validity, enforceability,
      and
      binding effect of this Agreement.

     

    Section
      8.9     Retention
      of Borrower’s Records.  
      Lender shall have no obligation to maintain any electronic records or any
      documents, schedules, invoices, agings, or other papers delivered to Lender
      by
      Borrower or in connection with the Loan Documents for more than 30 days after
      receipt by Lender. If there is a special need to retain specific records,
      Borrower must inform Lender of its need to retain those records with
      particularity, which must be delivered in accordance with the notice provisions
      of Section 8.3 within 30 days of Lender taking control of same.

     

    Section
      8.10    Binding
      Effect; Assignment; Complete Agreement; Sharing Information.  
      The Loan Documents shall be binding upon and inure to the benefit of BNC,
      Borrower and Lender and their respective successors and assigns, except that
      BNC
      and Borrower shall not have the right to assign any rights thereunder or any
      interest therein without Lender’s prior written consent. To the extent permitted
      by law, BNC and Borrower waive and will not assert against any assignee any
      claims, defenses or set-offs that BNC or Borrower could assert against Lender.
      This Agreement shall also bind all Persons who become a party to this Agreement
      as a borrower. This Agreement, together with the Loan Documents, comprises
      the
      complete and integrated agreement of the parties on the subject matter hereof
      and supersedes all prior agreements, written or oral, on the subject matter
      hereof, AND
      WITHOUT LIMITING THE FOREGOING, BNC AND BORROWER AGREE THAT THIS
      AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG
      THE
      PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
      SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
      AGREEMENTS AMONG THE PARTIES.
      To the
      extent that any provision of this Agreement contradicts other provisions of
      the
      Loan Documents, this Agreement shall control. Without limiting Lender’s right to
      share information regarding BNC, Borrower and their respective Affiliates with
      Lender’s participants, accountants, lawyers and other advisors, Lender may share
      any and all information they may have in their possession regarding BNC,
      Borrower and their respective Affiliates, and BNC and Borrower waive any right
      of confidentiality they may have with respect to such sharing of
      information.

     

    
      
        
          
          

        

        
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            66

          
            

          

        

        
          
          

        

      

    

    

    Section
      8.11     Severability
      of Provisions.  
      Any provision of this Agreement that is prohibited or unenforceable shall be
      ineffective to the extent of such prohibition or unenforceability without
      invalidating the remaining provisions hereof.

     

    Section
      8.12     Headings.  
      Article, Section and subsection 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.

     

    Section
      8.13     Governing
      Law; Jurisdiction, Venue; Waiver of Jury Trial.  
      The Loan Documents shall be governed by and construed in accordance with the
      substantive laws (other than conflict laws) of the State of Texas. The parties
      hereto hereby (i) consent to the personal jurisdiction of the state and
      federal courts located in the State of Texas in connection with any controversy
      related to this Agreement; (ii) waive any argument that venue in any such
      forum is not convenient; (iii) agree that any litigation initiated by
      Lender, BNC or Borrower in connection with this Agreement or the other Loan
      Documents may be venued in either the state or federal courts located in the
      City of San Antonio, County of Bexar, Texas;
      and (iv) agree that a final judgment in any such suit, action or proceeding
      shall be conclusive and may be enforced in other jurisdictions by suit on the
      judgment or in any other manner provided by law. 

     

    Section
      8.14     Non-applicability
      of Chapter 346.  
      Borrower and Lender hereby agree that, except for the opt-out provisions of
      Section 346.004 thereof, the provisions of Chapter 346 of the Texas
      Finance Code (regulating certain revolving credit loans and revolving tri-party
      accounts) shall not apply to this Agreement or any of the other Loan
      Documents.

     

    Section
      8.15     BNC’s
      and Borrower’s Waiver of Rights Under Texas Deceptive Trade Practices
      Act. 
       BNC AND BORROWER HEREBY WAIVE ANY RIGHTS UNDER THE DECEPTIVE TRADE
      PRACTICES—CONSUMER PROTECTION ACT, SECTION § 17.41 ET
      SEQ.
      TEXAS
      BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND
      PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF BNC’S AND BORROWER’S OWN
      SELECTION, BNC AND BORROWER VOLUNTARILY CONSENT TO THIS WAIVER. BNC AND BORROWER
      EXPRESSLY WARRANT AND REPRESENT THAT EACH PERSON (A) IS NOT IN A SIGNIFICANTLY
      DISPARATE BARGAINING POSITION RELATIVE TO LENDER, AND (B) HAS BEEN REPRESENTED
      BY LEGAL COUNSEL IN CONNECTION WITH THE TRANSACTIONS CONTEMPLATED BY THIS
      AGREEMENT.

     

    
      	
              BNC,
                BORROWER AND LENDER WAIVE ANY
                RIGHT TO TRIAL BY JURY IN ANY ACTION AT LAW OR IN EQUITY OR IN ANY
                OTHER
                PROCEEDING BASED ON OR PERTAINING TO THIS AGREEMENT OR ANY OTHER
                LOAN
                DOCUMENT. 

            

    

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
          
          

        

        
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            67

          
            

          

        

        
          
          

        

      

    

     

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
      by
      their respective officers thereunto duly authorized as of the date first above
      written.

     

    
      	
              Boots
                & Coots International Well Control, Inc.

            	
              BOOTS
                & COOTS INTERNATIONAL 

            
	
              11615
                N. Houston - Rosslyn Road

            	
              WELL
                CONTROL, INC., a Delaware 

            
	
              Houston,
                Texas 77086

            	
              corporation

            
	
              Telecopier:
                (281) 447-7613

            	 
	
              Attention:
                Brian Keith, General Counsel

            	
              By:

            	 
	
              e-mail:
                Bkeith@bncg.com

            	
              Name:
                Jerry Winchester

            
	 	
              Title:
                President and CEO

            
	 	 
	
              IWC
                Services, LLC

            	
              IWC
                SERVICES, LLC, a Texas limited 

            
	
              c/o
                Boots & Coots International Well Control, 

            	
              liability
                company

            
	
              Inc.

            	 
	
              11615
                N. Houston - Rosslyn Road

            	
              By:
                

            	 
	
              Houston,
                Texas 77086

            	
              Name:
                Jerry Winchester

            
	
              Telecopier:
                (281) 447-7613

            	
              Title:
                President and CEO

            
	
              Attention:
                Brian Keith, General Counsel

            	 
	
              e-mail:
                Bkeith@bncg.com

            	 
	 	 
	 	 
	
              Wells
                Fargo Bank, National Association, 

            	
              WELLS
                FARGO BANK, NATIONAL 

            
	
              acting
                through its Wells Fargo Business Credit 

            	
              ASSOCIATION,
                acting through its Wells Fargo 

            
	
              operating
                division

            	
              Business
                Credit operating division

            
	
              MAC-T5698-030

            	 
	
              40
                NE Loop 410, Suite 340

            	
              By:

            	 
	
              San
                Antonio, Texas 78216

            	
              Name:
                Mark L. Odle

            
	
              Telecopier:
                (210) 856-8989

            	
              Title:
                Vice President 

            
	
              Attention:
                Mark Odle

            	 
	
              e-mail:
                Mark.L.Odle@wellsfargo.com

            	 

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Table
      of Exhibits and Schedules

     

    
      	
              Exhibit
                A

            	
              Form
                of Revolving Note

            

    

     

    
      	
              Exhibit
                B

            	
              Form
                of Equipment Term Note

            

    

     

    
      	
              Exhibit
                C

            	
              Compliance
                Certificate

            

    

     

    
      	
              Exhibit
                D

            	
              Premises

            

    

     

    
      	
              Schedule
                5.1

            	
              Trade
                Names, Chief Executive Office, Principal Place of Business, and Locations
                of Collateral

            

    

     

    
      	
              Schedule
                5.2

            	
              Capitalization
                and Organizational Chart

            

    

     

    
      	
              Schedule
                5.5

            	
              Subsidiaries

            

    

     

    
      	
              Schedule
                5.7

            	
              Litigation
                Matters 

            

    

     

    
      	
              Schedule
                5.11

            	
              Intellectual
                Property Disclosures

            

    

     

    
      	
              Schedule
                5.14

            	
              Environmental
                Matters

            

    

     

    
      	
              Schedule
                5.18

            	
              Deposit
                Accounts

            

    

     

    
      	
              Schedule
                5.22

            	
              Insurance
                Policies 

            

    

     

    
      	
              Schedule
                5.24

            	
              Affiliate
                Agreements

            

    

     

    
      	
              Schedule
                5.29

            	
              Snubbing
                Unit Schedule

            

    

     

    
      	
              Schedule
                5.31

            	
              Personal
                Property Evidenced by a Certificate of
                Title

            

    

     

    
      	
              Schedule
                6.3

            	
              Permitted
                Liens

            

    

     

    
      	
              Schedule
                6.4

            	
              Permitted
                Indebtedness and Guaranties

            

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    Exhibit
      A to Credit and Security Agreement

     

    REVOLVING
      NOTE

     

    
      	
              $10,300,000
                U.S.

            	
              March
                3, 2006

            

    

     

    For
      value
      received, the undersigned, IWC SERVICES, LLC, a Texas limited liability company
      (“Borrower”),
      hereby promises to pay on the Termination Date under the Credit Agreement
      (defined below), to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (the
      “Lender”),
      acting through its Wells Fargo Business Credit operating division, at its office
      at 40 NE Loop 410, Suite 340, San Antonio, Texas 78216, or at any other place
      designated at any time by the holder hereof, in lawful money of the United
      States of America and in immediately available funds, the principal sum of
      Ten
      Million Three Hundred Thousand Dollars ($10,300,000) or the aggregate unpaid
      principal amount of all Revolving Advances made by Lender to Borrower under
      the
      Credit Agreement (defined below), together with interest on the principal amount
      hereunder remaining unpaid from time to time, computed on the basis of the
      actual number of days elapsed and a 360-day year, from the date hereof until
      this Note is fully paid at the rate from time to time in effect under the Credit
      and Security Agreement dated the same date as this Note (as the same may
      hereafter be amended, supplemented, restated or extended from time to time,
      the
“Credit
      Agreement”)
      by and
      among Lender, BNC and Borrower. The principal hereof and interest accruing
      thereon shall be due and payable as provided in the Credit Agreement. This
      Note
      may be prepaid only in accordance with the Credit Agreement.

     

    This
      Note
      is issued pursuant, and is subject, to the Credit Agreement, which provides,
      among other things, for acceleration hereof. This Note is the Revolving Note
      referred to in the Credit Agreement. This Note is secured, among other things,
      pursuant to the Credit Agreement and the Security Documents as therein defined,
      and may now or hereafter be secured by one or more other security agreements,
      mortgages, deeds of trust, assignments or other instruments or agreements.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of Texas. 

     

    Borrower
      shall pay all costs of collection, including reasonable attorneys’ fees and
      legal expenses if this Note is not paid when due, whether or not legal
      proceedings are commenced. 

     

    Presentment
      or other demand for payment, notice of dishonor and protest are expressly
      waived.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

    

     

    
      	 	
              IWC
                SERVICES, LLC, a Texas limited liability company

            
	 	 	 
	 	
              By:
                

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Exhibit
      B to Credit and Security Agreement

     

    EQUIPMENT
      TERM NOTE

     

    
      	
              $9,700,000
                U.S.

            	
              March
                3, 2006

            

    

     

    For
      value
      received, the undersigned, IWC SERVICES, LLC, a Texas limited liability company
      (“Borrower”),
      hereby promises to pay on the Termination Date under the Credit Agreement
      (defined below), to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (the
      “Lender”),
      acting through its Wells Fargo Business Credit operating division, at its office
      at 40 NE Loop 410, Suite 340, San Antonio, Texas 78216, or at any other place
      designated at any time by the holder hereof, in lawful money of the United
      States of America and in immediately available funds, the principal sum of
      Nine
      Million Seven Hundred Thousand Dollars ($9,700,000) or the aggregate unpaid
      principal amount of all Equipment Term Advances made by Lender to Borrower
      under
      the Credit Agreement (defined below), together with interest on the principal
      amount hereunder remaining unpaid from time to time, computed on the basis
      of
      the actual number of days elapsed and a 360-day year, from the date hereof
      until
      this Note is fully paid at the rate from time to time in effect under the Credit
      and Security Agreement dated the same date as this Note (as the same may
      hereafter be amended, supplemented or restated from time to time, the
“Credit
      Agreement”)
      by and
      among Lender, BNC and Borrower. The principal hereof and interest accruing
      thereon shall be due and payable as provided in the Credit Agreement. This
      Note
      may be prepaid only in accordance with the Credit Agreement.

     

    This
      Note
      is issued pursuant, and is subject, to the Credit Agreement, which provides,
      among other things, for acceleration hereof. This Note is the Equipment Term
      Note referred to in the Credit Agreement.

     

    This
      Note
      is secured, among other things, pursuant to the Credit Agreement and the
      Security Documents as therein defined, and may now or hereafter be secured
      by
      one or more other security agreements, mortgages, deeds of trust, assignments
      or
      other instruments or agreements. This Note shall be governed by and construed
      in
      accordance with the laws of the State of Texas. 

     

    Borrower
      shall pay all costs of collection, including attorneys’ fees and legal expenses
      in the event this Note is not paid when due, whether or not legal proceedings
      are commenced. 

     

    Presentment
      or other demand for payment, notice of dishonor and protest are expressly
      waived.

     

    [SIGNATURE
      PAGE FOLLOWS]

     

    
      
        
          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

    

     

    
      	 	
              IWC
                SERVICES, LLC, a Texas limited liability company

            
	 	 	 
	 	
              By:
                

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Exhibit
      C to Credit and Security Agreement

     

    COMPLIANCE
      CERTIFICATE

     

    
      	
              To:

            	
              Wells
                Fargo Business Credit

            

    

    
      	
              Date:

            	
              [___________________,
                200____]

            

    

    
      	
              Subject:

            	
              Financial
                Statements

            

    

     

    In
      accordance with our Credit and Security Agreement dated as of March 3,
      2006 (as
      amended from time to time, the “Credit
      Agreement”),
      attached are the consolidated financial statements of IWC SERVICES, LLC, a
      Texas
      limited liability company (“Borrower”)
      and
      BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC. as of and for [_________________,
      200__ _] (the
      “Reporting
      Date”)
      and
      the year-to-date period then ended (the “Current
      Financials”).
      All
      terms used in this certificate have the meanings given in the Credit
      Agreement.

     

    I
      certify
      that the Current Financials have been prepared in accordance with GAAP, subject
      to year-end audit adjustments, and fairly present BNC’s and its Subsidiaries’
financial condition as of the date thereof.

     

    I
      further
      hereby certify as follows: Events
      of Default.
      (Check
      one):

     

    
      	 	
              *

            	
              The
                undersigned does not have knowledge of the occurrence of a Default
                or
                Event of Default under the Credit Agreement except as previously
                reported
                in writing to Lender.

            

    

     

    
      	 	
              *

            	
              The
                undersigned has knowledge of the occurrence of a Default or Event
                of
                Default under the Credit Agreement not previously reported in writing
                to
                Lender and attached hereto is a statement of the facts with respect
                to
                thereto. Borrower acknowledges that pursuant to Section
                2.8(b)
                of
                the Credit Agreement, Lender may impose the Default Rate at any time
                during the resulting Default Period.

            

    

     

    Material
      Adverse Change in Litigation Matters of Credit Parties.
      I
      further hereby certify as follows (check one):

     

    
      	 	
              *

            	
              The
                undersigned has no knowledge of any material adverse change to the
                litigation exposure of any Credit Party or any of their respective
                Affiliates.

            

    

     

    
      	 	
              *

            	
              The
                undersigned has knowledge of material adverse changes to the litigation
                exposure of any Credit Party or any of their respective Affiliates
                not
                previously disclosed in Schedule
                5.7.
                Attached to this Certificate is a statement of the facts with respect
                thereto.

            

    

     

    Financial
      Covenants.
      I
      further hereby certify as follows (check and complete each of the
      following):

     

    1.     Minimum
      Debt Service Coverage Ratio.
      Pursuant to Section
      6.2(b)
      of the
      Credit Agreement, as of the Reporting Date, BNC’s and its Subsidiaries’ Debt
      Service Coverage Ratio on a consolidated basis was [______
      _] to
      1.00,
      which *
      satisfies *
      does not
      satisfy the requirement that such ratio be no less than 1.50 to 1.00 on the
      Reporting Date.

     

    
      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

    

    

    2.     Minimum
      Book Net Worth.
      Pursuant to Section
      6.2(a)
      of the
      Credit Agreement, as of the Reporting Date, BNC’s and its Subsidiaries’ Book Net
      Worth on a consolidated basis was $____________ , which *
      satisfies *
      does not
      satisfy the requirement that such amount be not less than the
      applicable amount set forth in the table below (numbers appearing between “<
>“ are negative) on the Reporting Date:

     

    
      	
              Period

            	
              Minimum
                Book Net Worth

            
	
              March
                31, 2006 through December 31, 2006

            	
              90%
                of the Book Net Worth calculated as of March 1, 2006 on the basis
                of a pro
                forma balance sheet giving effect to the HWC Transactions and the
                BNC
                Merger delivered to Lender reflecting the Book Net Worth as of that
                date
                (which balance sheet shall be delivered to Lender on or before April
                15,
                2006) but in no event shall 90% of the Book Net Worth be less than
                $25,000,000

            
	 	 
	
              For
                each fiscal year ending thereafter and continuing until the Maturity
                Date

            	
              The
                greater of (i) the Minimum Book Net Worth required pursuant to
                Section
                6.2(a)
                for the immediately preceding fiscal year, and (ii) 85% of the Book
                Net
                Worth calculated as of last day of the preceding fiscal year based
                on the
                unaudited or annual audited (as applicable) financial statements
                covering
                the preceding fiscal year. 

            

    

    

     

    3.     Capital
      Expenditures.
      Pursuant to Section
      6.2(c)
      of the
      Credit Agreement, for the year-to-date period ending on the Reporting Date,
      the
      Credit Parties have expended or contracted to expend during the fiscal year
      ended [_______________,
      200___,_]
      for
      Capital Expenditures, [_$___________________]
      in the
      aggregate, which *
      satisfies *
      does not
      satisfy the requirement that such expenditures not exceed $3,000,000 in the
      aggregate during such year.

     

    4.     Salaries.
      As of
      the Reporting Date, the Credit Parties have not paid excessive or unreasonable
      salaries, bonuses, commissions, consultant fees or other compensation, or
      increased the salary, bonus, commissions, consultant fees or other compensation
      of any Director, Officer or consultant, or any member of their families, by
      more
      than 10% over the amount paid in the BNC’s and Borrower’s previous fiscal year,
      either individually or for all such persons in the aggregate, and has not paid
      any increase from any source other than profits earned in the year of payment,
      and as a consequence *
      is
*
      is not
      in compliance with Section 6.8 of the Credit Agreement.

     

    
      
        
          
          

        

        
          C-2

          
            

          

        

        
          
          

        

      

    

    

    Attached
      hereto are all relevant facts in reasonable detail to evidence, and the
      computations of the financial covenants referred to above. These computations
      were made in accordance with GAAP.

     

    
      	 	
              BOOTS
                & COOTS INTERNATIONAL WELL CONTROL, INC.

            
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:
                Chief Financial Officer

            
	 	 	 
	 	
              IWC
                SERVICES, LLC

            
	 	 	 
	 	
              By:

            	 
	 	
              Name:

            	 
	 	
              Title:

            	 

    

     

    
      
        
          
          

        

        
          C-3

          
            

          

        

        
          
          

        

      

    

     

    Exhibit
      D to Credit and Security Agreement

     

    PREMISES

     

    The
      Premises referred to in the Credit and Security Agreement are legally described
      as follows:

     

    [To
      be completed by Borrower]

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