THIRD AMENDMENT TO LOAN AGREEMENT



      THIS THIRD AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and

entered into as of this 1st day of May, 2003, by and among THE CIT

GROUP/BUSINESS CREDIT, INC., a New York corporation (hereinafter "CITBC"), in

its individual capacity as a Lender and as Agent for the Lenders hereinafter

named (hereinafter the "AGENT"), Foothill Capital Corporation, a California

corporation ("FCC"), and any other party hereafter becoming a Lender pursuant to

Section 12.4(b) of the Loan Agreement (as hereinafter defined), each

individually sometimes referred to as a "LENDER" and, collectively, the

"LENDERS"), GREY WOLF DRILLING COMPANY L.P., a Texas limited partnership (the

"BORROWER"), GREY WOLF, INC., a Texas corporation (the "PARENT"), GREY WOLF

HOLDINGS COMPANY, a Nevada corporation ("HOLDINGS"), GREY WOLF LLC, a Louisiana

limited liability company ("GWLLC"), DI ENERGY, INC., a Texas corporation

("ENERGY"), GREY WOLF INTERNATIONAL, INC., a Texas corporation

("INTERNATIONAL"), DI/PERFENSA, INC., a Texas corporation ("PERFENSA"), MURCO

DRILLING CORP., a Delaware corporation ("MURCO") (Parent, Holdings, GWLLC,

Energy, International, Perfensa and Murco are referred to collectively herein as

the "GUARANTORS").



                                    RECITALS



      A.    WHEREAS, pursuant to the terms and subject to the conditions of that

certain Loan Agreement dated as of January 14, 1999 between the parties hereto,

as amended by that certain First Amendment to Loan Agreement dated December 20,

2001 (such Loan Agreement, as the same was previously amended, is hereby amended

and may hereafter be amended from time to time, being hereinafter referred to as

the "Loan Agreement"), the Borrower was granted a $50,000,000 revolving line of

credit which included a letter of credit facility;



      B.    WHEREAS, the indebtedness of the Borrower to the Lenders is

currently evidenced by that certain Revolving Note dated December 20, 2001 (the

"Revolving Note"), executed by the Borrower and payable to CITBC as Agent for

the benefit of the Lenders in the stated principal amount of $75,000,000;



      C.    WHEREAS, payment of the Obligations of the Borrower are supported by

the guarantees of the Guarantors contained in Section 13 of the Loan Agreement;



      D.    WHEREAS, to secure, in part, the indebtedness under the Loan

Agreement and the Revolving Note (and all renewals, extensions, modifications

and/or rearrangements thereof and in connection therewith) and all other

indebtedness, liabilities and obligations of the Borrower and the Guarantors to

the Agent for the benefit of the Lenders, then existing or thereafter arising,

(i) the Borrower and the Guarantors have heretofore executed in favor of the

Agent certain Credit Documents (as defined in the Loan Agreement), including,

without limitation, the Security Documents (as defined in the Loan Agreement),

which Credit Documents shall continue as amended in connection herewith in full

force and effect upon the execution of this Amendment, all of the Credit

Documents to continue to secure the payment by the Borrower



THIRD AMENDMENT TO LOAN AGREEMENT       Page 1



{PAGE}



and the Guarantors of the Obligations (as defined in the Loan Agreement) all as

more fully set forth therein and herein;



      E.    WHEREAS, the Borrower has requested and, pursuant to the terms and

subject to the conditions hereof and in connection herewith, the Agent and the

Lenders have agreed to modify the definition of Permitted Refinancing;



      F.    WHEREAS, in furtherance of the foregoing and to evidence the

agreements of the parties hereto in relation thereto the parties hereto desire

to amend the Loan Agreement as hereinafter provided;



      NOW, THEREFORE, in consideration of the premises herein contained and

other good and valuable consideration, the receipt and sufficiency of which are

hereby acknowledged, the Borrower, the Guarantors, the Agent and the Lenders,

intending to be legally bound, agree as follows:



                                    AGREEMENT



                                    ARTICLE I

                                   DEFINITIONS



      1.01  Capitalized terms used in this Amendment are defined in the Loan

Agreement, as amended hereby, unless otherwise stated.



                                   ARTICLE II

                          AMENDMENTS TO LOAN AGREEMENT



      Effective as of the respective date herein indicated, the Loan Agreement

is hereby amended as follows:



      2.01  AMENDMENT AND RESTATEMENT OF DEFINITION OF "PERMITTED REFINANCING".

Effective as of the date of execution of this Amendment, the definition of

"Permitted Refinancing" set forth in Section 10 of the Loan Agreement is amended

and restated to read in its entirety as follows:



      " `Permitted Refinancing' means a refinancing of all or any portion of the

      Indebtedness evidenced by (i) the Parent's Senior Notes due 2007 issued in

      1997, in the aggregate principal amount of $175,000,000, and (ii) the

      Parent's Senior Notes due 2007 issued in 1998 in the aggregate principal

      amount of $75,000,000 (either with the same payees or different financing

      sources), including a restructure or restatement of such existing

      Indebtedness or a new loan to repay such existing Indebtedness, so long as

      (a) the terms of the refinanced Indebtedness are not materially more

      favorable to the payee(s) and are not less favorable to the Lenders than

      the existing Indebtedness which was refinanced, (b) no Default or Event of

      Default will exist immediately after the completion of such



THIRD AMENDMENT TO LOAN AGREEMENT       Page 2



{PAGE}



      refinancing, and (c) such refinancing Indebtedness is subordinated in

      right of payment to the Obligations at least to the same extent as the

      Indebtedness being refinanced."



                                   ARTICLE III

                              CONDITIONS PRECEDENT



      3.01  CONDITIONS TO EFFECTIVENESS. The effectiveness of this Amendment is

subject to the satisfaction of the following conditions precedent in a manner

satisfactory to Agent, unless specifically waived in writing by Agent:



            (a)   Agent shall have received each of the following, each in form

      and substance satisfactory to Agent, in its sole discretion, and, where

      applicable, each duly executed by each party thereto, other than Agent:



                  (i)   This Amendment, duly executed by the Borrower and the

            Guarantors;



                  (ii)  certified copies of the resolutions of the Board of

            Directors of each of the Borrower and the Guarantors authorizing the

            execution, delivery and performance of this Amendment and any and

            all other Credit Documents executed by any of the Borrower or the

            Guarantors in connection therewith, along with a certificate of

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC