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EXHIBIT 10.1
As of July 31, 1996
International Sea Drilling Ltd. and Pool Company
c/o Pool Company
00000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attention: X. X. Xxxxxxxxx, Treasurer
Re: (a) First Amendment to ISDL Term Loan Agreement, (b) Second
Amendment to Pool Company Restated Revolving Credit Agreement,
and (c) Restated Term Loan Agreement
Gentlemen:
Reference is made to (a) the Term Loan Agreement dated as of November
30, 1995 (the "ISDL AGREEMENT"), among International Sea Drilling Ltd.
("ISDL"), NationsBank of Texas, N.A., National Bank of Canada and National Bank
of Alaska (collectively, "LENDERS"), and NationsBank of Texas, N.A., as agent
("AGENT"), (b) the Restated Credit Agreement dated as of November 30, 1995, as
modified by the First Amendment and Waiver dated as of April 3, 1996 (the
"REVOLVING CREDIT AGREEMENT"), among Pool Company, Lenders and Agent, and (c)
the Restated Term Loan Agreement dated as of November 30, 1995, as modified by
the First Amendment and Waiver dated as of April 3, 1996 (the "TERM LOAN
AGREEMENT"), among Pool Company, Lenders, and Agent. Unless otherwise
indicated, all capitalized terms herein are used as defined in the ISDL
Agreement, the Revolving Credit Agreement and the Term Loan Agreement.
ISDL has advised Agent that it needs to guarantee payroll transfers of
up to $400,000, to allow for Rig 489 employees to be paid by ISDL. In
addition, Pool Company has advised Agent and Lenders that it wishes to purchase
the remaining 51% of Antah Drilling Sdn. Bhd., a Malaysia company ("ADSB") with
proceeds from PESCO's recent offering of 4.6 million shares of its common stock
which was completed on July 9, 1996 (the "PUBLIC OFFERING"). Pool Company has
also advised Agent and Lenders that it intends to use the remaining proceeds
from such offering to, among other things, acquire 51% of a new joint venture
company in Argentina (the "ARGENTINA COMPANY"), replenish funds used to acquire
certain assets of Western Oil Well Service Co., and upgrade Rig No. 455 (which
will then be redesignated as Rig No. 18) in connection with a new contract in
the Gulf of Mexico. Therefore, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, ISDL, Pool Company,
Agent and Lenders agree as follows:
1. ISDL Debt. SECTION 7.11 of the ISDL Agreement is hereby
amended by deleting the word "and" before CLAUSE (e) and adding the following
at the end of such section:
, and (f) payroll transfer guarantees of up to $400,000 to
allow for Rig 489 employees to be paid by Borrower.
2. Financial Statements for Unconsolidated Affiliates. SECTION
7.3(i)(ii) of the Revolving Credit Agreement and SECTION 7.3(b)(ii) of the Term
Loan Agreement are hereby amended to read in its entirety as follows:
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and Pool Company
July 31, 1996
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(ii) Unaudited or audited (to the extent prepared)
Financial Statements showing the financial conditions and
results of operations of the Borrower's unconsolidated
affiliates, including, but not limited to, Pool Arabia, Ltd.,
ADSB (until the Borrower's acquisition of the remaining 51% of
ADSB), and Intairdril Oman L.L.C.
3. Pool Company Debt. SECTION 7.11 of the Revolving Credit
Agreement and SECTION 7.11 of the Term Loan Agreement are hereby amended by
deleting the word "and" before CLAUSE (p) and adding the following at the end
of each such section:
, (q) term Debt of ADSB in a principal amount of up to
$23,902,000 prior to October 1, 1996, and up to $14,600,000
from October 1, 1996, through January 31, 1997, and a guaranty
by Borrower of such Debt, (r) ADSB letters of credit and
guarantees of up to RM500,000 (approximately $197,000) and
A$80,000 (approximately $64,000) existing on July 31, 1996,
and future ADSB letters of credit and guarantees of up to
$1,000,000 (or its equivalent in other currencies) in the
aggregate, in each case through January 31, 1997, (s) Debt of
ADSB under a foreign exchange line of credit of RM2,000,000
(approximately $778,000) through January 31, 1997, and (t)
payroll transfer guarantees of up to $400,000 by ISDL to allow
for Rig 489 employees to be paid by ISDL.
4. Capital Expenditures. SECTION 7.13 of the Revolving Credit
Agreement and SECTION 7.13 of the Term Loan Agreement are hereby amended by
deleting the word "and" before CLAUSE (e), inserting the word "and" after
CLAUSE (e) and adding the following at the end of each such section:
(f) Capital Expenditures made from the net proceeds of the
Public Offering, including, but not limited to, the following:
(i) the acquisition of the remaining 51% of ADSB,
(ii) the acquisition of 51% of the Argentina
Company,
(iii) the acquisition of certain assets of Western
Oil Well Service Co., and
(iv) approximately $7,600,000 to upgrade Rig 455
(which will then be redesignated as Rig 18) for a new contract
in the Gulf of Mexico.
5. Acquisitions, Mergers, and Dissolutions. SECTION 7.15 of the
Revolving Credit Agreement and SECTION 7.15 of the Term Loan Agreement are
hereby amended by deleting the word "and" before CLAUSE (i) and adding the
following at the end of each such section:
and (j) acquisitions made from the net proceeds of the Public
Offering, including, but not limited to, the acquisition of
the remaining 51% of ADSB, and the acquisition of 51% of the
Argentina Company.
6. Loans, Advances, and Investments. SECTION 7.16 of the
Revolving Credit Agreement and SECTION 7.16 of the Term Loan Agreement are
hereby amended by deleting the word "and" before CLAUSE (r) and adding the
following at the end of each such section:
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and Pool Company
July 31, 1996
Page 3
and (s) investments of the net proceeds of the Public
Offering, including, but not limited to, the acquisition of
the remaining 51% of ADSB for approximately $9,100,000, and
the acquisition of 51% of the Argentina Company for
approximately $10,900,000.
7. Other Definitions. SECTION 10.3 of the Revolving Credit
Agreement and SECTION 10.3 of the Term Loan Agreement are hereby amended by
adding the following definitions:
ADSB means Antah Drilling Sdn. Bhd., a Malaysia company.
ARGENTINA COMPANY means a joint venture company to be formed
under the Laws of Argentina, of which Borrower intends to acquire 51%
with proceeds from the Public Offering.
ISDL means International Sea Drilling Ltd., a Cayman Islands
corporation.
PUBLIC OFFERING means PESCO's offering of 4.6 million shares
of its common stock, which was completed on July 9, 1996.
8. Joint Venture. SECTION 10.3 of the Revolving Credit Agreement
and SECTION 10.3 of the Term Loan Agreement are hereby further amended by
adding the following at the end of the definition of "JOINT VENTURE" in each
such section:
, but shall include, however, the Argentina Company.
9. Subsidiary. SECTION 10.3 of the Revolving Credit Agreement
and SECTION 10.3 of the Term Loan Agreement are hereby further amended by
adding the following at the end of the definition of "SUBSIDIARY" in each such
section:
, and also excluding the Argentina Company.
10. Liens. The definitions of "PERMITTED LIENS" in SECTION 10.3
of the Revolving Credit Agreement and SECTION 10.3 of the Term Loan Agreement
are hereby amended by deleting the word "and" before CLAUSE (s) and adding the
following at the end of each such definition:
, and (t) Liens on Rigs 488 and 489 owned by ADSB and Liens on
ADSB's contracts with ESSO Malaysia and ESSO Australia Ltd.,
all of which Liens secure the term Debt described in SECTION
7.11(q).
11. Pool Xxxxxxx. It is contemplated that the name of Pool
Xxxxxxx, Limited, a Trinidad and Tobago corporation, will be changed to Pool
International (Trinidad) Limited. When that occurs, all references in any of
the Loan Papers described in the Revolving Credit Agreement, the Term Loan
Agreement or the ISDL Agreement to "Pool Xxxxxxx, Limited," shall be amended to
refer to "Pool International (Trinidad) Limited."
12. Conditions. This instrument shall not be effective until it
has been duly executed and delivered by all parties named below.
13. Covenants. ISDL and Pool Company covenant to deliver to Agent
as soon as such items are available after the date of this instrument such
additional documentation as Agent may reasonably request related hereto,
including, without limitation, the following:
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and Pool Company
July 31, 1996
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(a) subject to such transactions being consummated, true
and complete copies of the purchase agreements relating to the
purchase of the ADSB stock and the stock of the Argentina Company, and
any other related documents and agreements (which Pool Company hereby
designates as "Material Agreements" for purposes of the Revolving
Credit Agreement and the Term Loan Agreement); and
(b) subject to the acquisition of the remaining 51% of
ADSB being consummated, stock certificates and stock powers from Pool
Company covering 66% of the stock of ADSB in accordance with SECTION
7.29(a) of the Revolving Credit Agreement and SECTION 7.28(a) of the
Term Loan Agreement.
14. Representations and Warranties. ISDL and Pool Company each
represents and warrants that it possesses all requisite power and authority to
execute, deliver and comply with the terms of this instrument, which has been
duly authorized and approved by all necessary corporate action and for which no
consent of any person is required, and agrees to furnish Agent with evidence of
such authorization and approval upon request.
15. Fees and Expenses. Pool Company agrees to pay the reasonable
fees and expenses of counsel to Agent for services rendered in connection with
the preparation, negotiation and execution of this instrument.
16. Loan Paper; Effect. This instrument is a Loan Paper and,
therefore, is subject to the applicable provisions of SECTION 12 of the ISDL
Agreement, SECTION 12 of the Revolving Credit Agreement and SECTION 12 of the
Term Loan Agreement, all of which are incorporated herein by reference the same
as if set forth herein verbatim. Except as amended in this instrument, the
Loan Papers are and shall be unchanged and shall remain in full force and
effect. In the event of any inconsistency between the terms of the ISDL
Agreement, the Revolving Credit Agreement and the Term Loan Agreement as hereby
modified (the "AMENDED AGREEMENTS") and any other Loan Papers, the terms of the
Amended Agreements shall control and such other document shall be deemed to be
amended hereby to conform to the terms of the Amended Agreements. ISDL and
Pool Company each hereby releases Agent and Lenders from any liability for
actions or failures to act in connection with the Loan Papers prior to the date
hereof.
17. No Waiver of Defaults. This instrument does not constitute a
waiver of Lenders' right to insist upon future compliance with each term,
covenant, condition and provision of the Loan Papers, and the Loan Papers shall
continue to be binding upon, and inure to the benefit of, ISDL, Pool Company,
Guarantors, Lenders, Agent, and their respective successors and assigns.
18. Multiple Counterparts. This instrument may be executed in
more than one counterpart, each of which shall be deemed an original, but all
of which when taken together shall constitute one instrument.
19. Final Agreement. THE LOAN PAPERS, AS AMENDED HEREBY,
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
If the foregoing terms and conditions are acceptable, please indicate
your acceptance by signing in the space provided below, whereupon this letter
shall become an agreement binding upon and inuring to the benefit of Agent,
Lenders, ISDL and Pool Company and their respective successors and assigns.
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International Sea Drilling Ltd.
and Pool Company
July 31, 1996
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Very truly yours,
NATIONSBANK XX XXXXX, X.X., XXXXXXXX XXXX XX XXXXXX,
as Agent and a Lender as a Lender
By: /s/ XXXXX X. XXXXXX By: /s/ XXXXX X. XXXXX
-------------------------------- -----------------------------------
Xxxxx X. Xxxxxx Xxxxx X. Xxxxx
Senior Vice President Group Vice President
NATIONAL BANK OF ALASKA
as a Lender By: /s/ XXXX XXXXX
-----------------------------------
Name: Xxxx Xxxxx
----------------------------------
Title: Vice President
---------------------------------
By: /s/ XXXXXXXX XXXXXX BENZ
--------------------------------
Xxxxxxxx Xxxxxx Benz
Vice President
Accepted and agreed to as of the day and year first set forth in the
foregoing letter.
INTERNATIONAL SEA DRILLING LTD.
POOL COMPANY
By: /s/ X. X. XXXXXXXX
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X. X. Xxxxxxxx
Senior Vice President-Finance of
each of the above Borrowers
By: /s/ X. X. XXXXXXXXX
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X. X. Xxxxxxxxx
Treasurer of each of the
above Borrowers
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and Pool Company
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GUARANTORS' CONSENT AND AGREEMENT
As an inducement to Agent and Lenders to execute, and in consideration
of Agent's and Lenders' execution of the foregoing, the undersigned hereby
consent thereto and agree that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the respective obligations and
liabilities of each of the undersigned under the Guaranty described in the
Revolving Credit Agreement (and, in the case of Pool Energy Services Co., Pool
Energy Holding, Inc., and Pool Company, the Guaranty described in the ISDL
Agreement) executed by the undersigned, or any agreements, documents or
instruments executed by any of the undersigned to create liens, security
interests or charges to secure any of the indebtedness under the Loan Papers
(as described in the Revolving Credit Agreement, the Term Loan Agreement or the
ISDL Agreement), all of which obligations and liabilities are, and shall
continue to be, in full force and effect. This consent and agreement shall be
binding upon the undersigned, and the respective successors and assigns of
each, and shall inure to the benefit of Agent and Lenders, and respective
successors and assigns of each.
POOL ENERGY SERVICES CO.
POOL ENERGY HOLDING, INC.
POOL COMPANY
POOL COMPANY (HOUSTON) INC.
POOL COMPANY (TEXAS) INC.
ASSOCIATED PETROLEUM SERVICES, INC.
POOL PRODUCTION SERVICES, INC.
POOL ALASKA, INC.
POOL AMERICAS, INC.
POOL INTERNATIONAL, INC.
POOL-AUSTRALIA, INC.
THE INTERNATIONAL AIR DRILLING
COMPANY
POOL HORIZONTAL DRILLING SERVICES CO.
POOL CALIFORNIA ENERGY SERVICES, INC.
BIG 10 FISHING TOOL COMPANY, INC.
WESTEX PRODUCTION SERVICE, INC.
By: /s/ X. X. XXXXXXXX
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X. X. Xxxxxxxx
Senior Vice President-Finance of each
of the above Obligors
By: /s/ X. X. XXXXXXXXX
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X. X. Xxxxxxxxx
Treasurer of each of the above Obligors
