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EXHIBIT 10.38
POOL COMPANY
POOL ENERGY SERVICES CO.
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August 20, 1997
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Ladies and Gentlemen:
In connection with the Stock Purchase Agreement (the "Agreement") dated
as of June 13, 1995 by and among ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., Golden Pacific Corp., Pool Company, a Texas
corporation ("Pool"), and Pool Energy Services Co., a Texas corporation
("PESCO"), and in order to resolve various issues that have arisen in connection
with the interpretation of Section 2.3(e) of the Agreement and PESCO's claim for
indemnification pursuant to Section 8.1(a)(ii) of the Agreement, this will
confirm that we have agreed as follows:
1. Sales of PESCO Stock
(a) Each of you have the option to sell any or all of the shares of
PESCO Stock that you received at the Closing within the next ninety
(90) days in accordance with the provisions of this letter agreement,
rather than the provisions of Section 2.3(e) of the Agreement.
Notwithstanding the terms of Section 2.3(e) or any other contrary
provision of the Agreement, each of you shall be entitled to retain
all of the proceeds realized upon any such sales of your shares of
PESCO Stock, provided, however, that the outstanding principal amount
of each of your respective Notes shall be reduced as of the month-end
following such sales by an amount (the "Stock Reduction Amount")
equivalent to forty percent (40%) of the net amount of (i) the gross
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proceeds you realize upon the consummation of such sales, minus (ii)
$8.9355 per share sold, minus (iii) the amount of all brokerage
commissions and other similar expenses you incur in consummating such
sales.
(b) PESCO will apply the Stock Reduction Amount adjustments to the last
maturing principal installments on the Notes and such adjustments shall
not be treated as a prepayment of the Notes subject to prepayment
penalties. In order to facilitate calculation of your respective Stock
Reduction Amounts, you will promptly deliver true and complete copies
of all relevant sales confirmations and other related documentation to
PESCO.
(c) Immediately upon receipt of a duly executed certificate in the form
attached hereto as Exhibit A, PESCO will cause its counsel to supply to
its transfer agent such opinions as are necessary to cause the transfer
agent to promptly transfer and/or issue replacement certificates
evidencing your shares free of any restrictive legend or stop transfer
orders.
2. Release of Indemnification Liabilities. If, and only if, all of you
sell all of the shares of PESCO Stock that you received at the Closing
within the next ninety (90) days, then:
(a) Effective as of November 30, 1997, PESCO will reduce the
outstanding principal amount of the Notes by an aggregate amount of
$900,000 (the "Indemnification Reduction Amount") in full settlement
and release of any and all amounts payable to PESCO, Pool or any of
their past, present or former affiliates by any of you pursuant to the
provisions of Sections 8.1(a) and 8.1(c) of the Agreement. PESCO will
divide the Indemnification Reduction Amount among each of your
respective Notes as follows: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ -- $358,083.00, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ -- $241,213.50, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ -- $241,213.50, and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. -- $59,490.00. Such adjustments shall be made to
the last maturing principal installments on the Notes and such
adjustments shall not be treated as a prepayment of the Notes subject
to prepayment penalties; and
(b) Notwithstanding any contrary provision of the Agreement, the Notes,
or any of the agreements related thereto, none of you shall under any
circumstances have any further liability of any kind or nature
whatsoever to PESCO, Pool or any of their past, present or future
affiliates in any way arising out of or relating to the transactions
contemplated by the Agreement, the operations of the Business, or the
terms of the Agreement, the Notes, or any of the agreements related
thereto, except as expressly set forth herein and in Sections 8.1(b),
7.1 and 7.2 of the Agreement.
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3. No Admission. The Indemnification Reduction Amount provided for in
Section 2(a) above represents a compromise and settlement with respect
to an issue currently in dispute and does not constitute an admission
by any party with respect to indemnification amounts that would be due
pursuant to Sections 8.1(a) and 8.1(c) of the Agreement in the absence
of the compromise and settlement contemplated by Section 2 above.
4. No Amendment. Except as expressly set forth herein, nothing herein
shall be deemed to amend, modify or waive any of the terms or
provisions of the Agreement, the Notes, or any of the agreements
related thereto.
As evidence of your agreement with, and consent to, the foregoing,
kindly execute and return the enclosed copy of this letter, which will render it
a binding agreement by and among PESCO and each of you as of the date first set
forth above. This letter agreement may be executed in one or more counterparts
each of which taken together shall constitute but one and the same instrument.
Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the Agreement.
Very truly yours,
/s/ ▇. ▇. ▇▇▇▇▇▇▇▇
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Senior Vice President -- Finance
Pool Company
Pool Energy Services Co.
Accepted and Agreed:
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