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EXHIBIT 10.2
DECEMBER 1998 AMENDMENT TO THE CREDIT AGREEMENT
AND WAIVER AND CONSENT
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DECEMBER 1998 AMENDMENT TO THE CREDIT AGREEMENT AND WAIVER AND CONSENT
(this "Amendment"), dated as of December 29, 1998, among Pool Energy Services
Co. ("PESCO"), Pool Company (formerly Pool Energy Holding, Inc. and the
successor by merger to Pool Company (the "Borrower")), and various banks party
to the hereinafter defined Credit Agreement. All capitalized terms defined in
the Credit Agreement shall have the same meaning when used herein unless
otherwise defined herein.
W I T N E S S E T H:
WHEREAS, PESCO, Pool Energy Holdings, Inc., Pool Company, various
Banks, SBC Warburg Dillon Read Inc., as Arranger, Credit Lyonnais New York
Branch, as Administrative Agent, and Swiss Bank Corporation, Stamford Branch, as
Documentation Agent (the "Documentation Agent"), entered into an Amended and
Restated Credit Agreement, dated as of March 26, 1998 (the "Credit Agreement");
and
WHEREAS, UBS AG, New York Branch, is the successor by merger to the
Documentation Agent; and
WHEREAS, the parties hereto wish to amend the Credit Agreement as
herein provided; and
WHEREAS, the Banks party hereto are willing to grant the waivers of and
consents with respect to the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Amendments to the Credit Agreement. (a) Section 2.02 of the Credit
Agreement is hereby amended by deleting the amount "$15,000,000" and replacing
it with the amount "$25,000,000".
(b) Section 9.10 of the Credit Agreement is hereby amended by deleting
the ratio "0.45:1.00" and replacing it with the ratio "0.50:1.00".
(c) The definition of "Contingent Obligation" in Section 11.01 of the
Credit Agreement is hereby amended by deleting the word "and" immediately before
clause (L) therein, replacing it with a comma, and adding the following at the
end of the first sentence of such definition:
and (M) any guarantees by PESCO of any Short Term Overdraft Borrowings
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(d) The definition of "Funded Debt" in Section 11.01 of the Credit
Agreement is hereby amended by deleting the word "or" immediately before clause
(c) therein, replacing it with a comma, and adding the following at the end of
such definition:
or (d) any Short Term Overdraft Borrowings
(e) The definition of "1998 Indenture" in Section 11.01 of the Credit
Agreement is hereby amended in its entirety to read as follows:
"1998 Indenture" shall mean the Indenture, dated as of March 31, 1998,
among PESCO, the guarantors named therein and Marine Midland Bank, as trustee,
with respect to PESCO's Series A and Series B 8-5/8% Senior Subordinated Notes
due 2008.
(f) Section 11.01 of the Credit Agreement is hereby amended by adding
the following defined terms thereto in proper alphabetical order:
"Ranger Rigs" shall mean the United States Coast Guard
documented vessels Pool Ranger V, official no. 642308, and Pool Ranger
VI, official no. 640547.
"Short Term Overdraft Borrowings" shall mean up to $6,000,000
aggregate amount of indebtedness outstanding at any time under one or
more short term overdraft credit facilities entered into by the
Borrower and/or any Domestic Subsidiary, provided, however, that any
Short Term Overdraft Borrowing outstanding for more than two Business
Days shall cease to be a Short Term Overdraft Borrowing and, thus,
become Funded Debt.
2. Consents and Waivers. The Required Banks hereby grant the following
consents and waivers with respect to the Credit Agreement:
(a) The Banks party hereto hereby consent to (i) the acquisition by the
Borrower of the Ranger Rigs at the stipulated purchase price set forth in the
relevant sale/leaseback documentation, (ii) the Borrower entering into a new
operating lease sale/leaseback transaction with respect to the Ranger Rigs
similar to the sale/leaseback transaction presently in effect (the "New
Sale/Leaseback") and (iii) the use by the Borrower of the proceeds from the New
Sale/Leaseback for the acquisition of capital assets and/or business additions.
In addition, the Banks party hereto hereby waive the applicability of and
compliance by the Borrower with the provisions of Sections 3.03(a), 3.03(b),
4.02(d), 4.02(f) and 9.02 of the Credit Agreement with respect to the New
Sale/Leaseback, agree that the New Sale/Leaseback shall not be included in the
determination of the aggregate value of asset sales permitted pursuant to
Section 9.02(iv) of the Credit Agreement and agree that the provisions of clause
(G) of the definition of Contingent Obligation in Section 11.01 of the Credit
Agreement shall apply to the New Sale/Leaseback. Upon entering into the New
Sale/Leaseback, it is anticipated that the Borrower will recognize a gain of
approximately $14,900,000 and incur federal capital gains tax liability of up to
$6,100,000. Such capital gains tax will be payable with respect to the year in
which the New Sale/Leaseback occurs, while the gain for accounting purposes will
be recognized over six years. In connection therewith, PESCO, the Borrower and
the Banks party hereto agree
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that the gain from the New Sale/Leaseback, and the capital gains tax payable
with respect thereto, shall both be spread over a period of six years, with
1/6th of the gain being deemed recognized, and 1/6th of the capital gain tax
being deemed paid, on the last day of each year from 1998 through 2003,
inclusive. Without limiting the generality of the foregoing, PESCO, the Borrower
and the Banks party hereto agree that (A) Consolidated EBIT shall include the
amounts of gain determined pursuant to the preceding sentence, notwithstanding
the fact that the definition of Consolidated EBIT in Section 11.01 of the Credit
Agreement would otherwise not give effect to extraordinary gains or gains from
sale of assets other than in the ordinary course of business, and (B) the
"amount of all cash taxes paid", as such term is used in the definition of
"Fixed Charge Coverage Ratio" in Section 11.01 of the Credit Agreement, for
years 1998 through 2003, inclusive, shall include the portion of capital gains
tax deemed paid in such years pursuant to the preceding sentence.
(b) Anything contained in the Credit Agreement (and, in particular, in
Section 9.01, 9.04 or 9.05 thereof) to the contrary notwithstanding, (i) a
"back-to-back" loan investment transaction whereby any Foreign Subsidiary incurs
indebtedness and uses the proceeds thereof to repay existing inter-company
indebtedness owing to another Subsidiary of PESCO, and a Subsidiary of PESCO
(other than the Borrower) simultaneously deposits an amount equal to such
indebtedness with the relevant lender to effectively secure the relevant loan,
shall not in and of itself constitute a Default or an Event of Default, (ii) any
indebtedness incurred by any Foreign Subsidiary in connection with any such
transaction shall not constitute Funded Debt and (iii) any guarantee of any such
indebtedness by PESCO shall not constitute a Contingent Obligation.
3. Amendment, Consent and Waiver Fee. Provided the Required Banks and
all Issuing Banks execute this Amendment on or prior to December 29, 1998, the
Borrower agrees to pay each Bank that executes this Amendment on or prior to
December 29, 1998 an amendment, consent and waiver fee equal to 0.10% of such
Bank's Revolving Loan Commitment. Such fee shall be paid by the Borrower on or
prior to December 31, 1998.
4. Representations and Warranties. In order to induce the Required
Banks to enter into this Amendment, each of PESCO and the Borrower hereby
represents and warrants that:
(a) no Default or Event of Default will exist as of the date hereof and
after giving effect to this Amendment; and
(b) as of the date hereof, after giving effect to this Amendment, all
representations, warranties and agreements of PESCO or the Borrower contained in
the Credit Agreement will be true and correct in all material respects.
5. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS
THEREOF.
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6. Agreement Not Otherwise Amended. This Amendment is limited precisely
as written and shall not be deemed to be an amendment, consent, waiver or
modification of any other term or condition of the Credit Agreement or any of
the instruments or agreements referred to therein, or prejudice any right or
rights which the Banks, the Arranger, the Administrative Agent, the
Documentation Agent or any of them now have or may have in the future under or
in connection with the Credit Agreement or any of the instruments or agreements
referred to therein. Except as expressly modified hereby, the terms and
provisions of the Credit Agreement shall continue in full force and effect.
Whenever the Credit Agreement is referred to in the Credit Agreement or any of
the instruments, agreements or other documents or papers executed and delivered
in connection therewith, it shall be deemed to be a reference to the Credit
Agreement as modified hereby.
7. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective duly authorized officers as of
the date first above written.
POOL ENERGY SERVICES CO.
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
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Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President,
Finance
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
POOL COMPANY
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇
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Name: ▇. ▇. ▇▇▇▇▇▇▇▇
Title: Senior vice President,
Finance
By /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇
Title: Treasurer
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CREDIT LYONNAIS NEW YORK BRANCH
By /s/ RATOUIS
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Name: Ratouis
Title: Senior Vice President
UBS AG, NEW YORK BRANCH
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Executive Director
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Associate Director
BANK ONE, TEXAS, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
MARINE MIDLAND BANK
By /s/ LINCOLN ▇▇▇▇▇▇▇
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Name: Lincoln ▇▇▇▇▇▇▇
Title: Regional Manager
ARAB BANKING CORPORATION (B.S.C.)
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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THE BANK OF NOVA SCOTIA
By /s/ F.C.H. ▇▇▇▇▇
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Name: F.C.H. ▇▇▇▇▇
Title: Senior Manager
Loan Operations
BANQUE NATIONALE DE PARIS,
HOUSTON AGENCY
By /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: Assistant Vice President
DEN NORSKE BANK ASA
By
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Name:
Title:
By
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Name:
Title:
THE FUJI BANK, LIMITED,
HOUSTON AGENCY
By
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Name:
Title:
GULF INTERNATIONAL BANK B.S.C.
By
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Name:
Title:
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HIBERNIA NATIONAL BANK
By /s/ ▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇
Title: Senior Vice President
NATEXIS BANQUE BFCE
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
and Regional Manager
By /s/ N. ▇▇▇▇ ▇▇▇▇▇▇
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Name: N. ▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Vice President
NATIONAL BANK OF ALASKA
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BENZ
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Benz
Title: Vice President
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