FOURTH AMENDMENT TO
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REVOLVING CREDIT AND SECURITY AGREEMENT
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THIS FOURTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this
"Amendment") is made and entered into effective as of the 27th day of September,
2006 (the "Effective Date"), by and between UNION DRILLING, INC., a corporation
organized under the laws of the State of Delaware ("Union Drilling"), XXXXXXXX
DRILLING COMPANY, a corporation originally organized under the laws of the
Delaware, and successor to Xxxxxxxx Drilling Company, a corporation organized
under the laws of the State of Colorado ("Thornton"), and UNION DRILLING TEXAS,
LP, a Texas limited partnership ("UDT") (Union Drilling, Thornton and UDT,
individually and collectively, jointly and severally, "Borrower" and/or
"Borrowers"), PNC BANK, NATIONAL ASSOCIATION ("PNC"), as agent for the financial
institutions (collectively "Lenders" and each a "Lender"), which are now or
which hereafter become a party to the Credit Agreement (defined below) (PNC, in
such capacity, "Agent") and Lenders.
PRELIMINARY STATEMENTS
A Borrower, Lenders and Agent are parties to that certain Revolving
Credit and Security Agreement dated March 31, 2005 (as amended, supplemented or
modified from time to time, the "Credit Agreement"); and
B Borrower, Lenders and Agent desire to amend the Credit Agreement
and the Other Documents (as defined in the Credit Agreement, as amended hereby)
and Agent and Lenders are willing to do so subject to the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
ARTICLE I
DEFINITIONS
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1.01 Capitalized terms used in this Amendment are defined in the Credit
Agreement, as amended hereby, unless otherwise stated.
ARTICLE II
AMENDMENT
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2.01 AMENDMENT TO SUBSECTION 2.1(A)(II). Effective as of the date
hereof, Subsection 2.1(a)(ii) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(ii) (1) up to 75%, subject to the provisions of Section
2.1(b) hereof, of the Forced Liquidation Value of the Eligible Rig
Fleet Equipment and (2) up to 60%, subject to the provisions of Section
2.1(b) hereof, of the acquisition costs of the Rig Fleet Equipment not
categorized in the most recent FLV Appraisal but acquired after the
most recent FLV Appraisal, so long as such Rig Fleet
Equipment satisfies the definition of Eligible Rig Fleet Equipment in
all other respects ("Rig Fleet Advance Rate" and together with the
Receivables Advance Rate, collectively, the "Advance Rates"); minus
2.02 AMENDMENT TO SECTION 7.6. Effective as of the date hereof, Section
7.6 of the Credit Agreement is hereby amended and restated in its entirety as
follows:
"7.6 Capital Expenditures. Contract for, purchase or make any
expenditure or commitments for Net Capital Expenditures in any fiscal
year in an aggregate amount for all Borrowers in excess of $125,000,000
for fiscal year 2006 and $10,000,000 for each fiscal year thereafter,
provided, however, (i) the annual allowance for the fiscal year 2007
and each fiscal year thereafter may be increased by the amount of
Permitted Equity Issuance Proceeds for such fiscal year, to the extent
not expended upon Permitted Acquisitions not constituting Capital
Expenditures and (ii) the annual allowance that is unused during any
applicable fiscal year may be carried over and used in the immediately
following fiscal year"
ARTICLE III
CONDITIONS PRECEDENT
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3.01 CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment
is subject to the satisfaction of the following conditions precedent, unless
specifically waived in writing by Agent:
(a) Agent shall have received this Amendment duly executed by
Borrowers, in form and substance satisfactory to Agent and its legal
counsel.
(b) The representations and warranties contained herein and in
the Credit Agreement and the Other Documents, as each is amended
hereby, shall be true and correct as of the date hereof, as if made on
the date hereof;
(c) No Default or Event of Default shall have occurred and be
continuing, unless such Default or Event of Default has been
specifically waived in writing by Agent and Lenders; and
(d) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents,
instruments and other legal matters incident thereto shall be
satisfactory to Agent and its legal counsel and Borrower shall deliver
to Agent a Secretary's Certificate, in form and substance satisfactory
to Agent evidencing the same.
ARTICLE IV
NO WAIVER
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4.01 NO WAIVER. Nothing contained in this Amendment shall be construed
as a waiver by Agent or Lenders of any covenant or provision of the Credit
Agreement, the Other Documents, this Amendment, or of any other contract or
instrument among Borrowers, Agent
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and Lenders, and the failure of Agent and/or Lenders at any time or times
hereafter to require strict performance by Borrower of any provision thereof
shall not waive, affect or diminish any right of Agent and Lenders to thereafter
demand strict compliance therewith. Agent and Lenders hereby reserve all rights
granted under the Credit Agreement, the Other Documents, this Amendment and any
other contract or instrument among Borrowers, Lenders and Agent.
ARTICLE V
RATIFICATIONS, REPRESENTATIONS AND WARRANTIES
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5.01 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Credit Agreement and the Other Documents, and, except as expressly
modified and superseded by this Amendment, the terms and provisions of the
Credit Agreement and the Other Documents are ratified and confirmed and shall
continue in full force and effect. Each Borrower, Lenders and Agent agree that
the Credit Agreement and the Other Documents, as amended hereby, shall continue
to be legal, valid, binding and enforceable in accordance with their respective
terms.
5.02 REPRESENTATIONS AND WARRANTIES. Each Borrower hereby represents
and warrants to Agent and Lenders that (a) the execution, delivery and
performance of this Amendment and any and all Other Documents executed and/or
delivered in connection herewith have been authorized by all requisite corporate
action on the part of such Borrower and will not violate the Articles of
Incorporation or Bylaws or other organization documents or governing documents
of such Borrower; (b) the representations and warranties contained in the Credit
Agreement, as amended hereby, and the Other Documents are true and correct on
and as of the date hereof and on and as of the date of execution hereof as
though made on and as of each such date; (c) no Default or Event of Default
under the Credit Agreement, as amended hereby, has occurred and is continuing,
unless such Default or Event of Default has been specifically waived in writing
by Agent and Lenders; (d) each Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement and the Other Documents, as
amended hereby; and (e) each Borrower has not amended its Articles of
Incorporation or its Bylaws or other organization or governing documents since
the date of the Credit Agreement.
ARTICLE VI
MISCELLANEOUS PROVISIONS
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6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in the Loan Agreement or the Other Documents, including,
without limitation, any document furnished in connection with this Amendment,
shall survive the execution and delivery of this Amendment and the Other
Documents, and no investigation by Agent or any closing shall affect the
representations and warranties or the right of Agent and Lenders to rely upon
them.
6.02 REFERENCE TO CREDIT AGREEMENT. Each of the Credit Agreement and
the Other Documents, and any and all other agreements, documents or instruments
now or hereafter executed and delivered pursuant to the terms hereof or pursuant
to the terms of the Credit Agreement, as amended hereby, are hereby amended so
that any reference in the Credit
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Agreement and such Other Documents to the Credit Agreement shall mean a
reference to the Credit Agreement as amended hereby.
6.03 EXPENSES OF AGENT. Each Borrower agrees to pay on demand all
reasonable costs and expenses incurred by Agent and Lenders in connection with
any and all amendments, modifications, and supplements to the Other Documents,
including, without limitation, the costs and fees of Agent's legal counsel, and
all costs and expenses incurred by Agent in connection with the enforcement or
preservation of any rights under the Credit Agreement, as amended hereby, or any
of the Other Documents, including, without, limitation, the costs and fees of
Agent's and Lenders' legal counsel.
6.04 SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
6.05 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall
inure to the benefit of Agent, Lenders and each Borrower and their respective
successors and assigns, except that no Borrower may assign or transfer any of
its rights or obligations hereunder without the prior written consent of Agent
and Lenders.
6.06 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
6.07 EFFECT OF WAIVER. No consent or waiver, express or implied, by
Agent and/or Lenders to or for any breach of or deviation from any covenant or
condition by any Borrower shall be deemed a consent to or waiver of any other
breach of the same or any other covenant, condition or duty.
6.08 HEADINGS. The headings, captions, and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
6.09 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER AGREEMENTS EXECUTED
PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
6.10 FINAL AGREEMENT. THE CREDIT AGREEMENT AND THE OTHER DOCUMENTS,
EACH AS AMENDED HEREBY, REPRESENT THE ENTIRE EXPRESSION OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREOF ON THE DATE THIS AMENDMENT IS EXECUTED. THE
CREDIT AGREEMENT AND THE OTHER DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO
MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS
AMENDMENT SHALL BE MADE,
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EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER, LENDERS AND AGENT.
6.11 RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY ANY LOANS OR EXTENSIONS OF CREDIT FROM LENDERS TO BORROWERS
UNDER THE CREDIT AGREEMENT OR THE OTHER DOCUMENTS OR TO SEEK AFFIRMATIVE RELIEF
OR DAMAGES OF ANY KIND OR NATURE FROM AGENT OR LENDERS WITH RESPECT TO MATTERS
RELATING TO THE CREDIT AGREEMENT OR THE OTHER DOCUMENTS. EACH BORROWER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASES AND FOREVER DISCHARGES AGENT AND LENDERS,
THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE
CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND
LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR UNANTICIPATED,
SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT LAW OR IN
EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS AMENDMENT IS
EXECUTED, WHICH BORROWERS MAY NOW OR HEREAFTER HAVE AGAINST AGENT, LENDERS,
THEIR PREDECESSORS, AGENTS, EMPLOYEES, SUCCESSORS AND ASSIGNS, IF ANY, AND
IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT, VIOLATION
OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY LOANS OR EXTENSIONS OF
CREDIT FROM LENDERS TO BORROWERS UNDER THE CREDIT AGREEMENT OR THE OTHER
DOCUMENTS, INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING, TAKING,
RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST LAWFUL RATE
APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE CREDIT AGREEMENT
OR ANY OF THE OTHER DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS
AMENDMENT.
[Remainder of Page Intentionally Blank; Signature Pages Follow]
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment as of the date first above-written.
BORROWERS:
UNION DRILLING, INC.
By: /s/ Xxx Xxxxxxxxxxx
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Name: Xxx Xxxxxxxxxxx
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Title: C.F.O.
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XXXXXXXX DRILLING COMPANY
By: /s/ Xxx Xxxxxxxxxxx
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Name: Xxx Xxxxxxxxxxx
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Title: C.F.O.
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UNION DRILLING TEXAS, LP
By: Union Drilling Texas GP, LLC, its
general partner
By: /s/ Xxx Xxxxxxxxxxx
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Name: Xxx Xxxxxxxxxxx
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Title: C.F.O.
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AGENT AND LENDER:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: Vice President
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LENDERS:
M&I BUSINESS CREDIT, INC.
(f/k/a DIVERSIFIED BUSINESS CREDIT, INC.)
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President
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N M ROTHSCHILD & SONS LIMITED
By: /s/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
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Title: Director
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By: /s/ Xxxxx XxXxxxx
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Name: Xxxxx XxXxxxx
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Title: Assistant Director
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NATIONAL CITY BANK OF PENNSYLVANIA
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
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Title: Vice President
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