Attached files
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| 8-K - BRONCO DRILLING COMPANY INC. 8-K - Bronco Drilling Company, Inc. | body_8k.htm |
BRONCO
DRILLING COMPANY, INC.
Corporate
Headquarters
16217
N. May Avenue
Edmond,
OK 73013
CONFIDENTIAL
January
29, 2010
Via
Overnight Courier and Email
Banco
Inbursa S.A., Institución de Banca Múltiple, Grupo Financiero
Inbursa
Paseo de
las Palmas No. 736,
Col.
Lomas de Chapultepec,
C.P.
11000 Mexico, D.F.
Attn:
Luis R. Frias Humphrey
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Re:
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Credit
Agreement (the “Credit
Agreement”), dated as of September 18, 2009, among Bronco Drilling
Company, Inc., a Delaware corporation (“Bronco”), the
Guarantors, Banco Inbursa S.A., Institución de Banca Múltiple, Grupo
Financiero Inbursa, as Lender and as Issuing Bank (“Inbursa”).
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Dear Mr.
Frias:
As you
know, the sharp decline in oil and natural gas prices and deterioration of the
global economy significantly decreased demand for contract oil and gas
drilling. As illustrated in Exhibit 1, the precipitous drop in
operating rigs last year significantly decreased our EBITDA; the key covenant
metric utilized in the current Credit Agreement. However, we believe
our core United States market has stabilized and see demand for our services
increasing. Looking forward we believe Bronco has the opportunity to
best serve its stockholders and Inbursa’s interests by focusing all efforts on
increasing utilization and margins as well as reducing costs. To help
us achieve that end, we hereby respectfully request that Inbursa consent to
waive Bronco’s compliance with certain provisions of Credit Agreement as set
forth herein. Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.
By your
execution of this letter, Inbursa, as Lender and Issuing Bank agrees, for good
and valuable consideration, to waive (a) Borrower’s compliance with
the covenant contained in Section 6.15 of the Credit Agreement from the date
hereof until the quarter ended June 30, 2010 and (b) any Default or Event of
Default that may occur as a result of the Borrower’s non-compliance with the
covenant contained in Section 6.15 of the Credit Agreement from the date hereof
until the quarter ended June 30, 2010.
Except as
provided herein, the Credit Agreement and the Loan Documents remain in full
force and effect as originally executed. The express waivers set
forth herein are limited to the extent described herein and shall not be
construed to be a permanent waiver of Section 6.15 of the Credit
Agreement.
Thank you
for your attention to this matter.
Yours
truly,
BRONCO
DRILLING COMPANY, INC. AND EACH GUARANTOR
By:/s/ MATT
PORTER
Matt
Porter, CFO
AGREED
AND ACCEPTED:
BANCO
INBURSA S.A., INSTITUCIÓN DE BANCA
MÚLTIPLE,
GRUPO FINANCIERO INBURSA, as
Lender
and Issuing Bank
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By:/s/ LUIS R. FRIAS
HUMPHREY
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Luis
R. Frias Humphrey, Attorney in Fact
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Date: February 9,
2010
*For purposes hereof, EBITDA is
calculated pursuant to the definition of Consolidated EBITDA under the Credit
Agreement, which differs from our calculation of EBITDA for financial reporting
purposes.