Document:

EXHIBIT
4.1

 

SECOND AMENDMENT TO CREDIT
AGREEMENT

 

THIS
SECOND AMENDMENT TO CREDIT AGREEMENT (the “Second Amendment”) is entered
into effective as of the 29th day of March, 2005, by and among PIONEER DRILLING SERVICES, LTD., a Texas limited partnership
(“Borrower”); PIONEER DRILLING COMPANY,
a Texas corporation; PDC MGMT. CO.,
a Texas corporation; PDC INVESTMENT CORP.,
a Delaware corporation; THE FROST NATIONAL BANK,
a national banking association (in its individual capacity, “Frost Bank”),
for itself, as Lender, as Lead Arranger, and as Agent for Lenders; ZIONS FIRST NATIONAL BANK, a national banking association,
as Lender; and BANK OF SCOTLAND, a Scottish
banking corporation acting through its New York Branch, as Lender.

 

R E C I T A L S

 

A.            On October 29, 2004, Borrower,
Credit Parties, Agent and Lender entered into that certain Credit Agreement,
concerning the terms, conditions and covenants of certain credit facilities,
which Credit Agreement was amended by that certain First Amendment to Credit
Agreement dated November 29, 2004, by and among Borrower, Credit Parties, Agent
and Lender (as amended, the “Credit Agreement”).

 

B.            Pursuant to Section 1.1(b) of the
Credit Agreement, Lenders made and Borrower obtained the following Acquisition
Loans:

 

(1)                                  Acquisition
Loan No. 1 (herein so called) in the amount of $28,000,000.00 (Closing Date –
November 29, 2004);

 

(2)                                  Acquisition
Loan No. 2 (herein so called) in the amount of $7,200,000.00 (Closing Date –
December 14, 2004); and

 

(3)                                  Acquisition
Loan No. 3 (herein so called) in the amount of $4,800,000.00 (Closing Date –
February 10, 2005).

 

The total amount of all
Acquisition Loans outstanding as of the date of this Second Amendment is
$38,466,666.67 and $1,533,333.33 remains available for under advance to Borrower
under the Acquisition Facility Commitment.

 

C.            Borrower has elected to repay a portion of the
outstanding Acquisition Loans and requested the Credit Agreement be amended to
permit Borrower to re-borrow all amounts that have been repaid by Borrower.

 

D.            In addition, Borrower has requested and Lender has agreed
to expand the Credit Agreement definition of allowable investments to allow for
a wider range of liquid investments that Borrower may use to manage its excess
cash.

 

E.             All capitalized terms not otherwise defined in this
Second Amendment shall have the same meanings as are set forth in the Credit
Agreement.

 

NOW, THEREFORE, for  and in consideration of the mutual covenants
and promises herein contained, Agent, Lenders and Borrower agree as follows:

 

AGREEMENTS

 

1.                                       Voluntary
Prepayments.   Pursuant to Section 1.3(a) of the Credit
Agreement, Borrower shall prepay Acquisition Loan No. 1 in part and Acquisition
Loan No. 2 and Acquisition No. 3 in full on the effective date of this Second
Amendment.  The total amount of the
foregoing prepayments shall be $20,000,000.00, and shall be applied as follows:

 

 

(A)                              Acquisition
Loan No. 1 — $8,366,666.66 principal prepayment;

 

(B)           Acquisition Loan No. 2 — $6,900,000.00
loan payoff; and

 

(C)                                Acquisition
Loan No. 3 — $4,733,333,34 loan payoff.

 

For purposes of this
Second Amendment and the aforementioned prepayment, Lenders hereby waive the
application of the fourth grammatical sentence of Section 1.3(a) of the Credit
Agreement.

 

2.                                       Acquisition
Credit Facility.   Lenders hereby
agree that, effective as of the date hereof, and after application of the
prepayments set forth in Paragraph 1 above, the Acquisition Facility
Commitment shall be restated, reconstituted, modified and amended to be
$38,466,666.67 in the aggregate, of which (a) $18,466,666.67 remains advanced,
outstanding and unpaid as of the date hereof and (b) $20,000,000.00 remains
available for advance until the Acquisition Commitment Termination Date.  Until the Acquisition Commitment Termination
Date, Borrower may borrow all amounts that remain available under the
Acquisition Facility (i.e., $20,000,000.00), as restated, reconstituted,
modified and amended, in accordance with the terms of the Credit Agreement.

 

3.                                       Investments,
Loans and Advances.   Section 6.2 of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:

 

Except as otherwise
expressly permitted by this Section 6.2, no Credit Party shall make or
permit to exist any investment in, or make, accrue or permit to exist loans or
advances of money to, any Person, through the direct or indirect lending of
money, holding of securities or otherwise (an “Investment”), except
that:  (a) Borrower may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor’s Accounts in the ordinary course of
business, so long as the aggregate amount of such Accounts so settled by
Borrower does not exceed $500,000; (b) each Credit Party may maintain its
existing investments in its Subsidiaries as of the Closing Date; and (c)
Borrower may make investments in the following (“Eligible Cash Equivalents”)
(i) marketable direct obligations issued or unconditionally guaranteed by
the United States of America or any agency thereof maturing within one year
from the date of acquisition thereof, (ii) commercial paper maturing no
more than one year from the date of creation thereof and currently having the
highest rating obtainable from either Standard & Poor’s Ratings Group or
Moody’s Investors Service, Inc., (iii) certificates of deposit maturing no more
than one year from the date of creation thereof issued by commercial banks
incorporated under the laws of the United States of America, each having
combined capital, surplus and undivided profits of not less than $300,000,000
and having a senior unsecured rating of “A” or better by a nationally
recognized rating agency (an “A Rated Bank”) or from any Agent or any
Lender, (iv) time deposits maturing no more than 30 days from the date of
creation thereof with A Rated Banks, (v) mutual funds that invest solely in one
or more of the investments described in clauses (i) through (iv) above,
and or (vi) other Eligible Cash Equivalents that are expressly deemed
acceptable by Agent, (d) other investments not exceeding $500,000 in the
aggregate at any time outstanding; (e) Investments in a Credit Party or any of
their Subsidiaries that have executed and delivered a guaranty of the Obligations
in form and substance satisfactory to Agent (each such Subsidiary being herein
referred to as a “Subsidiary Guarantor”); (f) Investments, if as a
result of such Investment (i) such other Person becomes a Subsidiary Guarantor
or (ii) such other Person is merged or consolidated with or into, or transfers
or conveys all or substantially all of its properties and assets to, a Credit
Party or a Subsidiary Guarantor; (g) Investments arising in connection with
interest rate swap, cap or collar agreements, currency exchange contracts or
commodity hedging agreements, in each case entered into with any Lender in the
ordinary course of business and not for speculative purposes; (h) Investments
in stock, obligations or securities received in settlement of debts owing to a
Credit Party as a result of bankruptcy or insolvency proceedings as to debt
owing to such Credit Party that arose in the ordinary course of business of
such Credit Party; (i) Investments in the form of loans among the Credit
Parties and the Subsidiary Guarantors; and (j) any security or Investment made
as a result of the receipt of non-cash consideration from an Asset Sale
permitted under Section 6.8; and (k) advances and extensions of credit
in the nature of accounts receivable arising from the sale or lease of goods or
services in the ordinary course of business.

 

2

 

4.                                       No
Other Amendment.   Except as
specifically modified or amended herein, all terms, provisions and requirements
of the Credit Agreement shall remain as written, and as amended from time to
time.

 

5.                                       Reaffirmation.   Borrower hereby ratifies, restates and
reaffirms all covenants, conditions, representations and warranties contained
in (a) the Credit Agreement, as amended by this Second Amendment, and (b) all
other Loan Documents.

 

6.                                       Credit
Party/Guarantor Ratification.   Credit Parties and Guarantors hereby ratify,
restate, and reaffirms each of the provisions of the Credit Agreement and the
Guaranty Agreement it executed on and as of the date hereof and that Guarantor’s
liability under its Guaranty shall not be reduced, altered, limited, lessened
or in any way affected by the execution and delivery of this Second
Amendment.  The parties intend that this
Second Amendment shall not constitute a novation.

 

7.                                       Expenses.
  Borrower covenants and agrees to pay
all costs and expenses of Agent and Lender in connection with this Second
Amendment, including, but not limited to, Agent’s and Lender’s attorneys’ fees,
recording or filing costs or expenses, and similar items.

 

8.                                       Counterparts.
  This Second Amendment may be executed
in counterpart originals, no one of which need contain the signature of all
parties, but all of which together shall constitute one and the same
instrument.

 

9.             Release of Agent and Lenders.   Borrower hereby acknowledges and agrees that,
as of the date hereof, there exists no right of offset, defense, counterclaim,
claim, or objection in favor of such Borrower as against Lenders with respect
to the Credit Agreement or any other aspect of the transactions contemplated
thereby, or alternatively, that any such right of offset, defense,
counterclaim, claim, or objection is hereby expressly waived.  In connection with the foregoing, Borrower
hereby releases and discharges Agent and Lenders, and their respective parents,
subsidiaries, affiliates, directors, officers, employees, attorneys, agents,
successors, and assigns from any and all rights, claims, demands, actions,
causes of action, suits, proceedings, agreements, contracts, judgments,
damages, debts or liabilities, of any kind or character, including without
limitation such claims and defenses as fraud, mistake, duress, and usury,
whether in law or in equity, known or unknown, choate or inchoate, it has had,
now has, or hereafter may have, arising under or in any manner relating to,
whether directly or indirectly, the Credit Agreement or any other aspect of the
transactions contemplated thereby from the beginning of time until the date
hereof.

 

10.           Cooperation,
Further Assurances.   Borrower agrees
to cooperate with Agent so that the interests of Lenders are protected and the
intent of the Loan Documents and this Amendment can be effectuated.  Borrower agrees to execute whatever further
documents and to provide whatever further assurances Agent or Lenders may
reasonably request or deem necessary to effectuate the terms of this Amendment.

 

11.           Governing
Law.   This Second Amendment and all
other Loan Documents shall be governed by, and construed in accordance with,
the laws of the State of Texas, excluding those laws relating to the resolution
of conflicts between laws of different jurisdictions.

 

12.           Headings.
  The headings preceding the text of the
paragraphs of this Second Amendment have been inserted solely for convenience
of reference and shall neither constitute a part of this Second Amendment nor
affect its meaning, interpretation, or effect.

 

[No Further Text on This Page]

 

3

 

NOTICE TO COMPLY WITH
STATE LAW

 

For the purpose of this Notice, the term “WRITTEN
AGREEMENT” shall include the document set forth above, together with each and
every other document relating to and/or securing the same loan transaction,
regardless of the date of execution.

 

NOTICE
OF FINAL AGREEMENT

 

THIS
WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.

 

THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

[Balance
of Page Intentionally Left Blank]

 

[Signature(s)
on Following Page(s)]

 

4

 

IN
WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
duly executed as of the date first above written.

 

	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  
	
   

  	
  PIONEER
  DRILLING SERVICES, LTD., a Texas limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PDC Mgmt. Co., a
  Texas corporation, General Partner

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Wm. Stacy
  Locke

  	
   

  
	
   

  	
   

  	
  Wm. Stacy Locke,
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  	
   

  
	
   

  	
   

  
	
   

  	
  THE FROST NATIONAL BANK, a national banking association, as Agent and Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Casey
  Shaeffer

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ZIONS FIRST NATIONAL BANK, a national banking association, as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas C. Etzell

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK OF SCOTLAND, a Scottish banking corporation acting through its New
  York Branch, as Lender

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Karen Weich

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice
  President

  
															

 

5

 

The
following Persons are signatories to this Second Amendment in their capacity as
Credit Parties and Guarantors and not as Borrowers.

 

	
   

  	
  HOLDING COMPANY:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PIONEER
  DRILLING COMPANY, a Texas Corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wm. Stacy
  Locke

  	
   

  
	
   

  	
   

  	
  Wm. Stacy Locke,
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PDC
  MGMT. CO., a Texas corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wm Stacy
  Locke

  	
   

  
	
   

  	
   

  	
  Wm. Stacy Locke,
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PDC INVESTMENT CORP., a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wm Stacy Locke

  	
   

  
	
   

  	
   

  	
  Wm. Stacy Locke,
  President and Chief Executive Officer

  
									

 

6Exhibit
10.1

 

FIRST AMENDMENT

TO STOCK OPTION AGREEMENT

 

THIS FIRST AMENDMENT TO STOCK OPTION AGREEMENT (the “First  Amendment”)
is made effective as of March 2,
2005, between VitaCube Systems Holdings, Inc.,
a Nevada corporation (the “Corporation”) and Earnest Mathis, Jr. (“Optionee”).

 

EXPLANATORY STATEMENT

 

A.                                    The Corporation and Optionee previously
entered into a Stock Option Agreement dated March 2, 2005 (the “Stock
Option Agreement”) whereby the Optionee was granted an Option to acquire
from the Corporation, at an initial purchase price of $3.00 per share, 275,000
fully paid and nonassessable shares of common stock of the Corporation.

 

B.                                    The Corporation and Optionee desire to amend
the Stock Option Agreement to increase the initial purchase price of the shares
of common stock subject to the Agreement to $3.20 per share effective as of March 2,
2005.

 

NOW THEREFORE, in
consideration of foregoing Explanatory Statement that is made a substantive
part of this First Amendment, the mutual promises and covenants contained
herein and other good and valuable consideration, the sufficiency of which is
hereby acknowledged, it is agreed as follows:

 

1.                                      Incorporation of the Stock Option
Agreement. The Stock
Option Agreement is hereby incorporated into this First Amendment by reference,
and the provisions of the Stock Option Agreement shall be applicable except as
modified by this First Amendment. In the event of any conflict between the
provisions of the Stock Option Agreement and this First Amendment, the
provisions of this First Amendment shall control.

 

2.                                      Increase in Initial Purchase
Price of Shares of Common Stock. The initial purchase price of $3.00 per share set forth in Section 1
of the Stock Option Agreement is hereby amended to state that the initial
purchase price shall be $3.20 per share effective as of March 2, 2005.

 

3.                                      Counterparts
and Facsimile Signatures.
This First
Amendment may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument and a facsimile signature shall be deemed an original signature for
all purposes.

 

This First Amendment has been executed as of the
date set forth above.

 

	
  CORPORATION:

  	
  OPTIONEE:

  
	
   

  	
   

  
	
  VitaCube Systems Holdings, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
      /s/ Mary Pat O’Halloran

  	
   

  	
        /s/ Earnest
  Mathis

  	
   

  
	
   

  	
  Mary Pat O’Halloran,

  Chief Financial Officer

  	
  Earnest Mathis, Jr.

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