UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 14, 2010 (January 13, 2010)
BEST ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
Nevada | 000-53260 | 02-0789714 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) |
5433 Westheimer Road; Suite 825 Houston, Texas | 77056 | |||
(Address of principal executive offices) | (Zip Code) |
(713) 933-2600
(Registrant’s telephone number,
including area code)
(Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement
(a) On January 13, 2010, Best Energy Services, Inc. (the “Company”), Bob Beeman Drilling Company, a wholly owned subsidiary of the Company (“BBD”), Best Well Service, Inc., a wholly owned subsidiary of the Company (“BWS”), and PNC Bank, National Association, as agent for the lenders (“PNC”), entered into that certain Waiver and Amendment No. 5 to Revolving Credit, Term Loan and Security Agreement (the “Fifth Amendment”). The Fifth Amendment amended the Revolving Credit, Term Loan and Security Agreement dated February 14, 2008 between the Company, BBD, BWS and PNC, as subsequently amended by that certain Waiver and Amendment No. 1 dated April 15, 2009, that certain Waiver and Amendment No. 2 dated August 19, 2009, that certain Amendment No. 3 dated October 20, 2009 and that certain Amendment No. 4 dated November 9, 2009 (the “Loan Agreement”) as follows: (1) the amount available under the revolving credit line was temporarily increased by $1,900,000 from the date of the Fifth Amendment until the earlier of (i) January 30, 2010 and (ii) the date on which the Company completes an equity offering that yields net cash proceeds to the Company of at least $2.1 million (a “Successful Equity Offering”), after which time this additional availability will reduce to zero; (2) the fixed charge coverage ratio covenant was eliminated for the twelve months ended September 30, 2010 and December 31, 2010 and was reduced for subsequent periods to 1.00 to 1.00; (3) the minimum EBITDA covenant was amended to lower the minimum EBITDA levels for the periods covered by such covenant; and (4) the minimum rig utilization covenant was amended to measure rig utilization by the daily average number of rigs earning revenue during a measurement period and setting the minimum levels for such measurement periods. In addition, the Fifth Amendment conditionally waived the existing defaults that had occurred and were continuing as of the date of the Fifth Amendment. The condition for this waiver is the completion of a Successful Equity Offering. In the Fifth Amendment, PNC expressly reserves all of its rights and remedies under the Loan Agreement, the other documents and agreements entered into in connection with the Loan Agreement and at law, subject to the conditional waiver described above. In addition, the Fifth Amendment requires the Company to complete a Successful Equity Offering no later than January 31, 2010. The foregoing description of the Fifth Amendment is qualified in its entirety by reference to the Fifth Amendment, a copy of which is attached to this Current Report as an exhibit and incorporated herein by reference. In consideration of the Fifth Amendment, the Company will (i) pay to its lenders a cash fee of $10,000, payable $5,000 on the date of the Fifth Amendment and $5,000 on February 12, 2010, (ii) pay to its lenders a cash fee of $50,000 if the Company completes a Successful Equity Offering that generates gross cash proceeds to the Company of at least $3,000,000, (iii) concurrently with the completion of a Successful Equity Offering, issue to PNC a warrant to purchase 1,250,000 shares of the Company’s common stock at an exercise price of $0.10 per share and (iv) amend the warrants currently held by PNC entitling PNC to acquire 750,000 shares of the Company’s common stock to reduce the exercise price thereof to $0.10 per share.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information provided under Item 1.01 is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits
(a) Exhibits
10.1 | Waiver and Amendment No. 5 to Revolving Credit, Term Loan and Security Agreement dated as of January 13, 2010 by and among Best Energy Services, Inc., Bob Beeman Drilling Company, Best Well Service, Inc. and PNC Bank, National Association, as agent for the lenders. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: January 14, 2010
BEST ENERGY SERVICES, INC. | ||
By: | /s/ Mark G. Harrington | |
Mark G. Harrington | ||
Chief Executive Officer |
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EXHIBIT INDEX
Exhibit No. | Description |
Waiver and Amendment No. 5 to Revolving Credit, Term Loan and Security Agreement dated as of January 13, 2010 by and among Best Energy Services, Inc., Bob Beeman Drilling Company, Best Well Service, Inc. and PNC Bank, National Association, as agent for the lenders. |