Exhibit 10.1
SIXTH AMENDMENT TO
REVOLVING CREDIT AND SECURITY
AGREEMENT
THIS SIXTH AMENDMENT TO REVOLVING
CREDIT AND SECURITY AGREEMENT (this “ Amendment
”) is made and entered into effective as of the 29th day of
July, 2008 (the “ Effective Date ”) and
effective as of June 30, 2008 with respect to
Section 2.08 hereof, by and among UNION DRILLING, INC., a
corporation organized under the laws of the State of Delaware
(“ Union Drilling ” and/or “
Borrower ”), 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, and to the date hereof, the “
Credit Agreement ”);
B Thornton Drilling Company, a
Delaware corporation, merged with and into Union Drilling on or
about December 31, 2006, with Union Drilling being the
survivor of such merger (the “ Thornton Merger
”);
C Union Drilling Texas, LP, a Texas
limited partnership, merged with and into Union Drilling on or
about January 1, 2007, with Union Drilling being the survivor
of such merger (the “ Union LP Merger Transaction
”, together with the Thornton Merger, the “ Merger
Transactions ”);
D (i) On or about August 7,
2007, the Bylaws of Borrower were amended and restated in the form
attached hereto as Exhibit A and (ii) on or about
November 22, 2005 the Certificate of Incorporation of Borrower
was amended and restated in the form attached hereto as
Exhibit B (the “ Amendments to Organizational
Documents ”); and
E Borrower, Lenders and Agent desire
to amend the Credit Agreement and the Other Documents and to
consent to the Amendments to Organizational Documents, 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
1.01 Capitalized terms used in this Amendment are
defined in the Credit Agreement, as amended hereby, unless
otherwise stated.
ARTICLE II
AMENDMENT
The Credit Agreement is, effective
as of the date hereof and subject to satisfaction of the conditions
precedent set forth in Section 3.01 of this Amendment, hereby
amended as follows:
2.01 Amendment to
Section 1.1; Amendment of Certain Defined Terms
. The definitions of “
Change of Control ”, “ Fixed Charge Coverage
Ratio ” and “ Pledge Agreements ”
contained in Section 1.1 of the Credit Agreement are
hereby amended as follows:
“‘ Change of
Control ’ shall mean the occurrence of any of the
following events subsequent to the Closing Date: any
“person” or “group” (as such terms are
defined in Sections 13(d) and 14(d) of the Exchange Act) other than
the Permitted Investors, shall own, directly or indirectly, Equity
Interests in Borrower representing a majority of the aggregate
ordinary voting power represented by the issued and outstanding
Equity Interests of Borrower, respectively (including for the
purposes of the calculation of percentage ownership, any Equity
Interests into which any Equity Interests of Borrower held by any
of such “person” or “group” that are
convertible or for which any such Equity Interests of Borrower or
of any other Person may be exchanged and any Equity Interests
issuable to such “person” or “group” upon
exercise of any warrants, options or similar rights which may at
the time of calculation be held by such “person” or
“group”) or to have the power, directly or indirectly,
to vote or direct the voting securities having a majority of the
ordinary voting power for the election of directors of
Borrower.
‘ Fixed Charge Coverage
Ratio ’ shall mean and include, with respect to any
fiscal period, the ratio of (a) consolidated EBITDA minus
non-financed Net Capital Expenditures made by Borrower during such
period ( provided that Net Capital Expenditures shall
only be included in this ratio, (i) if the amount of such Net
Capital Expenditures is more than zero and (ii) if Net Capital
Expenditures are incurred at any time after the first occurrence of
which Borrower has average Undrawn Availability less than
$30,000,000 for two consecutive months) to (b) all Senior Debt
Payments payable on a current basis in respect such period, plus
cash taxes, dividends and distributions paid, each calculated on a
consolidated basis.
‘ Pledge Agreements
’ shall mean any pledge agreement between Agent and Borrower
or any Person holding any Equity Interests in any Subsidiary of
Borrower, as the same be amended, modified, supplemented or
restated from time to time.”
2.02 Amendment to
Section 1.1; Addition of Certain Defined Terms
. Effective as of the date hereof,
the following definitions are hereby added to
Section 1.1 of the Credit Agreement to read as
follows:
“‘ Amended and
Restated Certificate of Incorporation ’ shall mean that
certain Amended and Restated Certificate of Incorporation of
Borrower filed with the Delaware Secretary of State on
November 22, 2005.
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‘ Amended and Restated
Bylaws ’ shall mean that certain Amended and Restated
Bylaws of Borrower adopted by Borrower’s board of directors
on or about August 7, 2007.
‘ Permitted Dividends
’ shall mean the payment of cash dividends by Borrower to its
stockholders so long as (i) no Default or Event of Default has
occurred or would result therefrom, (ii) Undrawn Availability
on a pro forma basis for the immediately preceding thirty
(30) day period, and the immediately following thirty
(30) day period, from the date such cash dividend is made by
Borrower would exceed $30,000,000, and (iii) such cash
dividends are made in accordance with its Amended and Restated
Certificate of Incorporation.
‘ Permitted Common Stock
Repurchases ’ shall mean the repurchase or redemption by
Borrower of its common stock so long as (i) no Default or
Event of Default has occurred or would result therefrom,
(ii) Undrawn Availability on a pro forma basis for the
immediately preceding thirty (30) day period, and the
immediately following thirty (30) day period, from the date
such repurchase is made by Borrower would exceed $30,000,000, and
(iii) so long as such repurchase or redemption is made in
compliance with Regulation U.
‘ Sixth Amendment
’ shall mean that certain Sixth Amendment to Revolving Credit
and Security Agreement dated as of Sixth Amendment Closing Date
executed by and among Borrower, PNC and the Lenders.
‘ Sixth Amendment Closing
Date ’ shall mean July 29, 2008.”
2.03 Amendment to
Section 1.1; Deletion of A Certain Defined Term
. Effective as of the date hereof,
the definition of “ General Partner ” contained
in Section 1.1 of the Credit Agreement is hereby
deleted in its entirety.
2.04 Amendment to
Section 2.2 .
Effective as of the date hereof, Section 2.2 of the
Credit Agreement is hereby amended as follows:
“2.22 Use of Proceeds
.
(a) Borrower shall apply the
proceeds of Advances to (i) pay fees and expenses relating to
this transaction, (ii) provide for the working capital needs
of its businesses as conducted on the Sixth Amendment Closing Date
and its general corporate purposes, (iii) reimburse drawings
under Letters of Credit and (iv) for the purpose of financing
the Borrower’s repurchase or redemption of shares of common
stock of the Borrower to the extent permitted by
Section 7.7 of this Agreement and so long as not more
than twenty-five percent (25%) of the value of the
consolidated assets of Borrower is now, or will at any time be,
represented by margin stock. As used in this Section, the term
“ margin stock ”
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and “ purpose of buying or
carrying ” shall have the respective meanings ascribed to
them in Regulation U of The Board of Governors of the Federal
Reserve System, as amended).
(b) Without limiting the generality
of Section 2.22(a) above, neither Borrower nor any other
Person which may in the future become party to this Agreement or
the Other Documents as Borrower, intends to use nor shall they use
any portion of the proceeds of the Advances, directly or
indirectly, for any purpose in violation of the Trading with the
Enemy Act.”
2.05 Amendment to
Section 4.10 .
Effective as of the date hereof, Section 4.10 of the
Credit Agreement is hereby amended as follows:
“4.10 Inspection of
Premises . At all reasonable times Agent and each Lender shall
have full access to and the right to audit, check, inspect and make
abstracts and copies from each Borrower’s books, records,
audits, correspondence and all other papers relating to the
Collateral and the operation of Borrower’s business. Agent,
any Lender and their agents may enter upon any of Borrower’s
premises at any time during business hours and at any other
reasonable time, and from time to time, for the purpose of
inspecting the Collateral and any and all records pertaining
thereto and the operation of Borrower’s business;
provided , however , so long as no Default or Event
of Default shall have occurred and be continuing, Agent shall
provide Borrower with reasonable advance notice of such inspection,
provided , further , (i) so long as no Default
or Event of Default shall have occurred and be continuing and
(ii) so long as average Undrawn Availability is not less than
$30,000,000 for any three consecutive month period, Agent agrees
that it will only conduct field examinations of the
Borrower’s Collateral on a yearly basis.”
2.06 Amendment to Article
IV . Effective as of
the date hereof, Article IV of the Credit Agreement is
hereby amended by adding a new Section 4.22 thereto to
read as follows:
“4.22 Collateral .
Lender represents that it in good faith is not relying upon any
“ margin stock ” (as defined in Regulation U of
the Board of Governors of the Federal Reserve System, as amended)
as Collateral in the extension or maintenance of the credit
provided for in this Agreement. Notwithstanding the provisions of
this Agreement, Lender hereby releases any security interest or
other Lien it may have upon any shares of capital stock of the
Borrower which are owned by the Borrower (whether held by the
Borrower as treasury stock or otherwise).”
2.07 Amendment to
Section 5.15 .
Effective as of the date hereof, Section 5.15 of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
“5.15 Margin
Regulations . Borrower is not engaged, nor will it engage,
principally or as one of its important activities, in the business
of extending credit for the purpose of “purchasing” or
“carrying” any “margin stock” within
the
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respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in
effect. No part of the proceeds of any Advance will be used for
“purchasing” or “carrying” “margin
stock” as defined in Regulation U of such Board of Governors
(other than repurchases or redemptions by the Borrower of common
stock of the Borrower to the extent permitted by Section 7.7
of this Agreement) so long as not more than twenty-five percent
(25%) of the value of the consolidated assets of Borrower is
now, or will at any time be represented by margin stock. On the
Sixth Amendment Closing Date and on the date the Borrower redeems
any of the common stock of Borrower, Borrower shall furnish to
Lender a statement in conformity with the requirements of the
Federal Reserve Form U-1 referred to in Regulation
U.”
2.08 Amendment to
Section 7.6 .
Effective as of June 30, 2008, 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 if a Default or Event
of Default has occurred or would result therefrom; provided that
for the period commencing on January 1, 2008 through
June 30, 2008 the aggregate amount of all Net Capital
Expenditures for Borrower shall not be in excess of
$60,000,000.”
2.09 Amendment to
Section 7.7 .
Effective as of the date hereof, Section 7.7 of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
“7.7 Dividends .
Declare, pay or make any dividend or distribution on any shares of
the common stock or preferred stock of Borrower or any Subsidiary
of Borrower other than (i) dividends or distributions payable
in its stock, or spl
