Exhibit 4.5




 




FOURTH AMENDMENT TO LOAN AGREEMENT




 




THIS FOURTH AMENDMENT TO LOAN

AGREEMENT (the “Amendment”) is

entered into as of the 20th day of December, 2002, by and between PIONEER DRILLING COMPANY, a Texas

corporation, formerly known as South Texas Drilling & Exploration, Inc. (“Borrower”),

and THE

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

and joined in by PIONEER DRILLING SERVICES, LTD., a Texas limited partnership,

formerly known as Pioneer Drilling Co., Ltd., (“Pioneer” or “Partnership”).




 




R E C I T A L S




 




A.            On

August 11, 2000, Borrower and Lender entered into that certain Loan Agreement,

as amended by that certain First Amendment to Loan Agreement dated effective

December 31, 2000 and that certain Second Amendment to Loan Agreement dated as

of July 3, 2002 (as amended, the “Loan Agreement”) concerning the terms,

conditions and covenants of a certain Term Loan (as defined in the Agreement).  On

October 31, 2002, Borrower and Lender amended the Loan Agreement by execution

of that certain Third Amendment to Loan Agreement and Note Modification

Agreement.




 




B.            The Term Loan is evidenced by, and

Lender is the sole owner and holder of, that one certain Promissory Note (the “Note”)

dated August 11, 2000, executed by Borrower and payable to the order of Lender

in the original principal face amount of NINE MILLION AND NO/100 DOLLARS

($9,000,000.00), as amended from time to time.




 




C.            Borrower and Lender have agreed to make certain modifications to the Loan Agreement as

hereinafter more fully set forth.




 




D.            All capitalized terms not otherwise defined in this

Fourth Amendment shall have the same meanings as are set forth in the Loan

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:




 




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 Partnership on the 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.




 




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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 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 between the Partnership 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 Loan Agreement and Note shall remain

as written, and as amended from time to time. 

Borrower hereby reaffirms all covenants, conditions, representations and

warranties contained in the Loan Agreement and Note, as amended by this

Amendment.




 




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IN

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

duly executed as of the date first above written.




 




	

  BORROWER:


  	

   


  	

  LENDER:


  
	

   


  	

   


  	

   


  
	

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

  Texas Drilling & Exploration, Inc., a Texas corporation


  	

   


  	

  THE FROST NATIONAL BANK


  a

  national banking association


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

  By:


  	

   


  
	

  By:


  	

   


  	

   


  	

  Name:


  	

   


  
	

  Name:


  	

   


  	

   


  	

  Title:


  	

   


  
	

  Title:


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  AGREED

  TO:


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  PIONEER DRILLING SERVICES, LTD., a Texas limited partnership formerly known as Pioneer Drilling Co.,

  Ltd., a Texas limited partnership

  (executing for purposes of joining in certain specific provisions, as noted

  above)


  	

   


  	

   


  
	

   


  	

   


  	

   


  
	

  By:


  	

  PDC

  Mgmt. Co., a Texas corporation, General Partner


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

   


  	

  By:


  	

   


  	

   


  	

   


  
	

   


  	

  Name:


  	

   


  	

   


  	

   


  
	

   


  	

  Title:


  	

   


  	

   


  	

   


  
													





 




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