Exhibit

4.14




 




THIRD

AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT




 




THIS

THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (the “Amendment”)

is entered into as of the 20th day of

December, 2002, by and between  PIONEER DRILLING SERVICES, LTD., a Texas limited

partnership, formerly known as Pioneer

Drilling Co., Ltd., (Borrower”), and THE FROST

NATIONAL BANK, a national banking association (“Lender”) and

joined in by PIONEER DRILLING COMPANY, a Texas corporation, formerly known

as South Texas Drilling & Exploration, Inc. (“Pioneer”).




 




R E C I T A L S




 




A.            On March 19, 2002, Borrower and Lender entered into that

certain First Amended and Restated Loan Agreement (as amended from time, the “Loan

Agreement”) concerning the terms, conditions and covenants of certain

Credit Facilities.  On July 3, 2002, Borrower and Lender amended

the Loan Agreement by execution of that certain First Amendment to First

Amended and Restated Loan Agreement.  On

July 20, 2002, Borrower and Lender amended the Loan Agreement by execution of

that certain First Amendment to First Amended and Restated Loan Agreement.




 




B.            Borrower and Lender have agreed to make certain

modifications to the Loan Agreement as hereinafter more fully set forth.




 




C.            All capitalized terms not otherwise defined in this Third

Amendment shall have the same meanings as are set forth in the Agreement.




 




NOW, THEREFORE, for and

in consideration of the mutual covenants and promises herein contained, Lender

and Borrower agree as follows:




 




AGREEMENTS




 




1.             Section 8, subsection (e) is deleted in its entirety and

the following is substituted in its place:




 




(e)           Indebtedness.  Create,

incur or assume any indebtedness for borrowed money or issue or assume any

other note, debenture, bond or other evidences of indebtedness, or guarantee

any such indebtedness or such evidences of indebtedness of others, other than

(i) borrowings from Lender, (ii) borrowings from lenders other than

Lender, except that during the term of the Loan, Borrower shall be permitted to

incur or have outstanding indebtedness to other lenders provided that the

aggregate principal balance of all such debt outstanding at any time shall not

exceed $17,500,000.00 (exclusive of the subordinated debt in




 





























 




the

total amount of $28,000,000.00 described in that certain Subordination

Agreement dated as of July 3, 2002 (the “Convertible Subordinated Debentures”)

and (iii) the Convertible Subordinated Debentures.




 




2.             The last sentence contained in the definition of

Leverage Ratio in Section 9, subsection (a) is hereby deleted and the following

is substituted in its place:




 




Beginning

with the fiscal quarter ending on March 31, 2003, Borrower shall be in

compliance with the foregoing covenant as of the end of each fiscal quarter of

Borrower calculated on a rolling four quarters basis.




 




3.             The definition of Cash Flow Coverage Ratio in Section 9,

subsection (b) and the two sentences immediately following such definition are

deleted and the following is substituted in its place:




 




Net Income +

Interest + Taxes + Depreciation


+ Amortization – Distributions or Dividends


– Maintenance Capital Expenditures (each for the preceding four fiscal

quarters)


Consolidated Interest Expense +

scheduled maturities of principal indebtedness +


cash taxes paid (each for the preceding four fiscal quarters)




 




As

used herein, “scheduled maturities of principal indebtedness” shall

exclude amounts due from Borrower on that certain $6,000,000 Advance Facility

at its maturity on June 30, 2003.




 




As

used herein, “Maintenance Capital Expenditures” shall mean: Amounts

actually paid for the routine maintenance of equipment, to the extent such

maintenance is required to keep that equipment in operating condition.




 




Beginning

with the fiscal quarter ending on March 31, 2003, Borrower shall be in

compliance with the foregoing covenant as of the end of each fiscal quarter of

Borrower calculated on a rolling four quarters basis.




 




4.             Subsection (e) of Section 11

is deleted in its entirety and the following is substituted in its place:




 




(e)           The occurrence of any event which

permits the acceleration of the maturity of any indebtedness in excess of

$100,000.00 owing by Borrower to any third party under any agreement or

understanding, or any default in the terms, conditions or covenants of that

certain Term Loan and Security Agreement dated on or about December 20, 2002




 




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between

Borrower and Merrill Lynch Capital or any documents executed in connection

therewith and any renewals thereof.




 




5.             Except as specifically modified or amended herein, all

terms, provisions and requirements of the Agreement shall remain as written, and as amended from time to

time.  Borrower hereby reaffirms all

covenants, conditions, representations and warranties contained in the

Agreement, as amended by this Third Amendment.




 




[Balance of

Page Intentionally Left Blank]




 




[Signature

Appears on Next Page]




 




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IN

WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be duly

executed as of the date first above written.




 




 




	

  BORROWER:


  	

   


  	

  LENDER:


  
	

   


  	

   


  	

   


  
	

  PIONEER DRILLING SERVICES, LTD., a Texas

  limited partnership formerly known as Pioneer

  Drilling Co., Ltd., a Texas limited

  partnership


  	

   


  	

  THE FROST NATIONAL BANK


  a national banking

  association


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

  By:


  	

   


  	

   


  
	

  By:


  	

  PDC Mgmt. Co., a Texas

  corporation, General Partner


  	

   


  	

  Printed

  Name:


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

  Title:


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Printed

  Name:


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

  Title:


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  AGREED

  TO:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  PIONEER DRILLING COMPANY, a Texas corporation, formerly known as South

  Texas Drilling & Exploration, Inc., a Texas corporation (executing for

  purposes of joining in certain specific provisions, as noted above)


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

   


  	

   


  	

   


  
	

  Printed

  Name:


  	

   


  	

   


  	

   


  	

   


  
	

  Title:


  	

   


  	

   


  	

   


  	

   


  
																





 




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