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On August 17, 1981, CDC entered into a sale and leaseback
financing transaction (the equipment lease agreement) with
Greyhound Leasing & Financial Corp. (Greyhound). Pursuant to
this transaction, CDC sold two rigs to Greyhound and then leased
the rigs from Greyhound under capital leases which expired in
1988.
During the first quarter of 1982, CDC entered into a safe
harbor lease agreement with Texas Oilfield Supply (TOS) for the
sale of tax benefits on three rigs. TOS was an equipment supply
company with which CDC contracted for the purchase of major
components used in the fabrication of its rig fleet.
On January 26, 1982, CDC entered into a new $90 million loan
agreement ($70 million term and $20 million revolving credit
agreement) with Penn Square Bank, N.A., Chase Manhattan Bank,
N.A., Continental-Illinois, Seattle-First, and other banks (the
bank group). Pursuant to the loan agreement, CDC granted the
bank group liens on and security interests in (1) 13 drilling
rigs; (2) drilling equipment, drill pipe, machines and equipment;
(3) CDC's inventory of parts and supplies; (4) CDC's accounts
receivable from its drilling rigs; and (5) CDC's contract rights.
CDC entered into a restated loan agreement with the bank group on
February 1, 1983. The restated loan agreement between CDC and
the bank group required CDC to maintain a cash collateral
account, referred to as a special collateral account (SCA). CDC
was required to deposit 75 percent of its monthly cash-flow into
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