EXHIBIT 10.1
Execution Copy
WAIVER AGREEMENT
This WAIVER AGREEMENT
(“Agreement”) dated as of June 9, 2008
(“Effective Date”) is among Pioneer Drilling Company, a
Texas corporation (“Borrower”), the Guarantors (as
defined below), the Lenders (as defined below) signatory hereto,
and Wells Fargo Bank, N.A., as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”), as
issuing lender (in such capacity, the “Issuing
Lender”), and as swing line lender (in such capacity, the
“Swing Line Lender”).
RECITALS
A. The Borrower is party to that
certain Credit Agreement dated as of February 29, 2008 (the
“Credit Agreement”) among the Borrower, the lenders
party thereto from time to time (the “Lenders”), the
Administrative Agent, the Issuing Lender, and the Swing Line
Lender.
B. The Borrower has requested
that the Lenders (i) acknowledge the existence of a Default
(as defined in the Credit Agreement), and (ii) provide for a
waiver for such Default as set forth below, and the Lenders
signatory hereto have agreed, subject to the terms and conditions
of this Agreement, to such acknowledgement and waiver.
NOW THEREFORE, in consideration of
the benefits to be derived by the parties hereto and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
Section 1. Defined
Terms; Etc . As used in this Agreement, each of the
capitalized terms defined in the opening paragraph and the Recitals
above shall have the meanings assigned to such terms therein. Each
capitalized term defined in the Credit Agreement and used herein
without definition shall have the meaning assigned to such term in
the Credit Agreement, unless expressly provided to the contrary.
Article, Section, Schedule, and Exhibit references are to Articles
and Sections of and Schedules and Exhibits to this Agreement,
unless otherwise specified. The words “hereof”,
“herein”, and “hereunder” and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement.
Section 2.
Waiver . The Borrower hereby acknowledges the
existence of a Default arising from the Borrower’s failure to
timely deliver internally prepared Financial Statements within
60 days after the end of the fiscal quarter ending on
March 31, 2008 certified by a Financial Officer of the
Borrower as fairly presenting in all material respects the
financial condition of the Borrower, together with a duly completed
Compliance Certificate, in each case as required under
Section 5.2(b) of the Credit Agreement (the “Existing
Default”). Subject to the terms and conditions of this
Agreement, the Lenders hereby waive the Existing Default; provided
however that (a) the Borrower complies with the requirements
of Section 5.2(b) of the Credit Agreement for the fiscal
quarter ending on March 31, 2008 on or before August 13,
2008, and (b) until such time as the Borrower complies with the
requirements of Section 5.2(b) of the Credit Agreement for the
fiscal quarter ending on March 31, 2008, (i) the sum of
the aggregate outstanding amount of all Revolving Advances
plus the Letter of Credit Exposure plus the aggregate
outstanding amount of all Swing Line Advances shall not exceed
$350,000,000 at any
time
(provided, however, that the Commitment Fee shall continue to be
calculated based on the Total Commitment) and (ii) the
Applicable Margin shall be determined at Level V. In addition, as a
result of and in connection with the Existing Default, the Lenders
hereby waive the requirement that the Borrower make the
representation set forth in Section 4.4(a) with respect to the
audited financial statements for the Borrower and its Restricted
Subsidiaries (other than the Wedge Entities) dated as of
December 31, 2007 being true and correct in all material
respects and presenting fairly in all material respects the
consolidated financial condition of the Borrower and its Restricted
Subsidiaries (other than the Wedge Entities) as of the date thereof
(the “Financial Statement Representation”) until the
earlier of (A) the date of the Borrower’s compliance
with the requirements of Section 5.2(b) of the Credit
Agreement for the fiscal quarter ending on March 31, 2008 and
(B) August 13, 2008. The waivers by the Lenders described
in this Section 2 are contingent upon the satisfaction of the
conditions precedent set forth in Section 4 below and are
limited to the Existing Default and the Financial Statement
Representation. Such waiver shall not be construed to be a
permanent waiver of the Sections covered by the Existing Default or
the Financial Statement Representation or any other terms,
provisions, covenants, warranties or agreements contained in the
Credit Agreement or in any of the other Credit Documents. The
description herein of the Existing Default is based upon the
information provided to the Lenders on or prior to the date hereof
and shall not be deemed to exclude the existence of any other
Defaults or Events of Default. The failure of the Lenders to give
notice to the Borrower or the Guarantors of any such other Defaults
or Events of Default is not intended to be nor shall be a waiver
thereof.
Section 3.
Representations and Warranties . The Borrower
and each Guarantor hereby represents and warrants that:
(a) after giving effect to this Agreement, the representations
and warranties of such Person contained in the Credit Agreement
(other than the Financial Statement Representation) and the
representations and warranties of such Person contained in the
other Credit Documents are true and correct in all material
respects on and as of the Effective Date as if made on as and as of
such date, except to the extent that any such representation or
warranty expressly relates solely to an earlier date, in which case
such representation or warranty is true and correct in all material
respects as of such earlier date; (b) after giving effect to
this Agreement, no Default has occurred and is continuing;
(c) the execution, delivery and performance of this Agreement
are within the corporate, limited liability company or partnership
power and authority of such Person and have been d
