EXHIBIT 10.1
CONFORMED COPY
SIXTH AMENDMENT
SIXTH AMENDMENT, dated as of July 14, 1999 (this "Amendment"),
to the Second Amended and Restated Credit Agreement, dated as of June 6, 1997,
as amended and restated through September 14, 1998 and as amended by the First
Amendment dated as of November 19, 1998, the Second Amendment dated as of
December 29, 1998, the Third Amendment dated as of April 8, 1999, the Fourth
Amendment dated as of April 15, 1999 and the Fifth Amendment dated as of May 10,
1999 (the "Credit Agreement"), among Key Energy Group, Inc. (now known as Key
Energy Services, Inc.), a Maryland corporation (the "Borrower"), the several
Lenders from time to time parties thereto, PNC Bank, National Association
("PNC"), as Administrative Agent, Norwest Bank Texas, N.A., as Collateral Agent
and PNC Capital Markets, Inc., as Arranger.
The parties hereto hereby agree as follows:
Section 1. DEFINED TERMS. Unless otherwise defined herein,
terms which are defined in the Credit Agreement and used herein (and in the
recitals hereto) as defined terms are so used as so defined.
Section 2. AMENDMENT TO SUBSECTION 1.1 (DEFINITIONS).
Subsection 1.1 of the Credit Agreement is hereby amended as follows:
(a) by inserting in the appropriate alphabetical order the
following new definition of "Designated Joint Venture":
"'DESIGNATED JOINT VENTURE': any joint venture,
partnership or other similar entity in each case in which the
Borrower has made an Investment pursuant to subsection 7.9(q)
as a result of which the Borrower has received an ownership
interest."; and
(b) by deleting the definition of "Foreign Subsidiary" in its
entirety and substituting in lieu thereof the following new definition:
"'FOREIGN SUBSIDIARY': any Subsidiary of the Borrower
and any Designated Joint Venture which, in each case, is
organized under the laws of any jurisdiction outside the
United States.";
Section 3. AMENDMENTS TO SUBSECTION 2.3. Subsection 2.3 of the
Credit Agreement is hereby amended by deleting paragraphs (a) and (b) therefrom
and substituting in lieu thereof the following:
"(a) The Tranche A Term Loan of each Tranche A Lender
shall mature in sixteen consecutive quarterly installments
commencing on the date fifteen months after the Closing Date,
each of which shall be in an amount equal to such Lender's
2
Tranche A Term Percentage multiplied by the percentage set
forth below opposite such installment of the Tranche A Term
Loans outstanding on the Merger Date (after giving effect to
any Term Loans made on such date and, in any event, subject to
subsection 2.16(b)):
Principal Amount
Installment of each Installment
----------- -------------------
1 to 4 4%
5 to 8 6%
9 to 12 7%
13 to 16 8%
(b) The Tranche B Term Loan of each Tranche B Lender
shall mature in nineteen consecutive quarterly installments
commencing on the date fifteen months after the Closing Date,
each of which shall be in an amount equal to such Lender's
Tranche B Term Percentage multiplied by the percentage set
forth below opposite such installment of the Trance B Term
Loans outstanding on the Merger Date (after giving effect to
any Term Loans made on such date and, in any event, subject to
subsection 2.16(b)):
Principal Amount
Installments of each Installment
------------ -------------------
1 to 4 0.25%
5 to 8 0.25%
9 to 12 0.25%
13 to 16 0.25%
17 to 18 24.00%
19 48.00%"
Section 4. AMENDMENTS TO SUBSECTION 2.10. Subsection 2.10 of
the Credit Agreement is hereby amended by:
(a) deleting in its entirety paragraph (b) of subsection 2.10
and substituting in lieu thereof the following new paragraph (b):
"(b) Unless the Required Prepayment Lenders shall otherwise
agree, if any Capital Stock shall be issued by the Borrower or any of
its Subsidiaries, an amount equal to (i) 100% of the Net Cash Proceeds
received from all such issuances of Capital Stock
3
from and after the Closing Date up to an aggregate amount equal to
$75,000,000, (ii) 55% of the Net Cash Proceeds received from all such
issuances of Capital Stock from and after the Closing Date in excess of
an aggregate amount equal to $75,000,000 but less than $165,750,000,
and (iii) 25% of the Net Cash Proceeds received from all such issuances
of Capital Stock from and after the Closing Date in excess of an
aggregate amount equal to $165,750,000 (other than any Net Cash
Proceeds received as the result of the issuance of Capital Stock by a
Subsidiary Guarantor or a Foreign Subsidiary (in accordance with
subsection 7.9(e)) to the Borrower or another Subsidiary), shall be
applied on the date of such issuance (or, in the case of Net Cash
Proceeds received as the result of any exercise with respect to
warrants, rights or options to purchase Capital Stock of the Borrower
or any Subsidiary, on each date on which the aggregate amount of Net
Cash Proceeds so received but not previously applied as set forth in
this subsection 2.10(b) equals or exceeds $5,000,000) toward the
prepayment of the Term Loans (or reduction of Term Loan Commitments) as
set forth in Section 2.10(f); PROVIDED that so long as no Event of
Default has occurred or is continuing pursuant to Sections 8(a),
8(e)(i), 8(e)(ii), 8(f) or 8(k), Net Cash Proceeds of Capital Stock
(other than Disqualified Stock) issued by the Borrower may be used to
prepay the Put Facility and to the extent so used shall not be required
to be used as mandatory prepayments or Term Loan Commitment reductions
hereunder."; and
(b) deleting subsection 2.10(d) in its entirety and
substituting in lieu thereof the following new subsection 2.10(d):
"(d) Unless the Required Prepayment Lenders otherwise agree,
if the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any asset sale permitted under Section 7.6(e), then 100%
of such Net Cash Proceeds shall be applied on the date such Net Cash
Proceeds are received toward the prepayment of the Term Loans and the
reduction of the Term Loan Commitments as set forth in Section
2.10(f)."
Section 5. AMENDMENT TO SUBSECTION 4.2 (NO CHANGE). Subsection
4.2 of the Credit Agreement is hereby amended by deleting such subsection in its
entirety and substituting in lieu thereof the following new subsection 4.2:
"(a) From June 30, 1998 through March 31, 1999, there has been
no development or event which has had or could reasonably be expected to have a
Material Adverse Effect other than the lower spending levels by oil and gas
producers attributable to the deterioration of prevailing market prices of oil
and gas sustained during such period. Since March 31, 1999, there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from June 30, 1998 to and
including the date hereof no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of the
Capital Stock of the Borrower been redeemed, retired, purchased or otherwise
acquired for value by the Borrower. Without limiting the representation in the
preceding sentence, from June 30, 1998 to the Merger Date there has been no
development or event which, to the best knowledge of the Borrower, has had or
could reasonably be expected
4
to have a material adverse effect on the business, operations, property,
condition (financial or otherwise) or prospects of Xxxxxx and its Subsidiaries
taken as a whole.
Section 6. AMENDMENT TO SUBSECTION 4.25 (YEAR 2000 MATTERS).
Subsection 4.25 of the Credit Agreement is hereby amended by deleting the
reference to "July 1, 1999" and substituting in lieu thereof a reference to
"September 30, 1999".
Section 7. AMENDMENT TO SUBSECTION 6.9 (FURTHER ASSURANCES).
Subsection 6.9 (b) of the Credit agreement is hereby amended by deleting such
subsection in its entirety and substituting in lieu thereof the following new
subsection 6.9(b):
"(b) Notwithstanding any other provision herein, the Borrower
shall not be deemed to have failed to satisfy the conditions of Section
5.1(p) or 5.2(c) or to be in violation of Section 6.10 or 6.14 for
failure to have caused a duly perfected Lien to be placed on any
Vehicles (other than Excluded Vehicles) covered by a certificate of
title of any State if the aggregate fair market value of such
unperfected Vehicles is less than $5,000,000."
Section 8. AMENDMENT TO SUBSECTION 7.2(c) (LIMITATION ON
INDEBTEDNESS). Subsection 7.2(c) of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting in lieu thereof the
following new subsection 7.2(c):
"(c) Indebtedness (i) of the Borrower to a Wholly Owned
Subsidiary, (ii) of a Domestic Wholly Owned Subsidiary to the Borrower
or any other Subsidiary and (iii) of any Foreign Subsidiary to the
Borrower or any Subsidiary in an aggregate principal amount at any time
outstanding (with respect to all such Foreign Subsidiaries of the
Borrower) not to exceed $10,000,000 in excess of the amount of such
Indebtedness outstanding on September 14, 1998; PROVIDED, that any such
Indebtedness referred to in this clause (c) provided to Odessa shall be
for capital expenditure purposes only."
Section 9. AMENDMENT TO SUBSECTIONS 7.2(d), (g) AND (j)
(LIMITATION ON INDEBTEDNESS). Subsections 7.2(d), (g) and (j) of the Credit
Agreement are hereby amended by deleting each of the references to "$15,000,000"
contained therein and substituting in lieu of each thereof a reference to
"$25,000,000".
Section 10. AMENDMENT TO SUBSECTION 7.4(g) (LIMITATION ON
GUARANTEE OBLIGATIONS). Subsection 7.4(g) of the Credit Agreement is hereby
amended by deleting the reference to "$5,000,000" contained therein and
substituting in lieu thereof a reference to "$7,500,000".
Section 11. AMENDMENTS TO SUBSECTION 7.6 (LIMITATION ON SALE
OF ASSETS). Subsection 7.6 of the Credit Agreement is hereby amended:
(a) by deleting the proviso contained in subsection 7.6(a) and
substituting in lieu thereof the following new proviso:
5
"PROVIDED that (other than inventory and light vehicles)
the aggregate proceeds received from all assets so sold, leased or
disposed of in any fiscal year shall not exceed (i) for the fiscal year
ending June 30, 1999, 10%, and (ii) for each fiscal year thereafter,
5% of the Borrower's Consolidated Net Worth as of the end of the
immediately preceding fiscal year;";
(b) by deleting subsection 7.6(d) in its entirety and
substituting in lieu thereof the following new subsection 7.6(d):
"(d) the sale of Odessa, PROVIDED that the consideration
received by the Borrower and its Subsidiaries in respect of any such
sale shall include cash in an amount greater than or equal to the
greater of (i) 50% of the aggregate consideration received in respect
of such sale and (ii) $15,000,000 (the "SIGNIFICANT DISPOSITION");
and"; and
(c) by adding the following new paragraph (e):
"(e) the sale of any Argentine Subsidiary or all or any
portion of the assets thereof, PROVIDED that, subject to subsection
7.9(q), the consideration received by the Borrower and its Subsidiaries
in respect of any such sale shall be solely in the form of cash."
Section 12. AMENDMENT TO SUBSECTION 7.8 (LIMITATION ON CAPITAL
EXPENDITURES). Subsection 7.8 of the Credit Agreement is hereby amended by
deleting each reference to "$30,000,000" contained therein and substituting in
lieu of each thereof a reference to "$37,500,000".
Section 13. AMENDMENTS TO SUBSECTION 7.9 (LIMITATION ON
INVESTMENTS, LOANS AND ADVANCES). Subsection 7.9 of the Credit Agreement is
hereby amended as follows:
(a) by deleting from the fourth line of the first sentence
thereof the reference to "any Person, except:" and inserting in lieu
thereof a reference to "any Person (any of the foregoing, an
"INVESTMENT"), except:";
(b) by deleting subsection 7.9(e) in its entirety and
substituting in lieu thereof the following new subsection 7.9(e):
"(e) loans by the Borrower or any Subsidiary to, and equity
investments by the Borrower or any Subsidiary in, Foreign Subsidiaries
in an aggregate amount (or, in the case of loans, outstanding principal
amount) at any time not to exceed the amount thereof outstanding on
September 14, 1998, plus $10,000,000 (for all such Foreign
Subsidiaries, taken together, net of the aggregate amount of any
dividends or other distributions received by the Borrower and any such
Subsidiary in respect of such equity investments in Foreign
Subsidiaries and excluding the amount of any such equity investments in
a Designated Joint Venture made in accordance with subsection 7.9(q));"
6
(c) by deleting from subsection 7.9(i) the reference to
"$5,000,000" and substituting in lieu thereof "$7,500,000";
(d) by deleting subsection 7.9(q) in its entirety and
substituting in lieu thereof the following new subsection 7.9(q):
"(q) any Investments occasioned by the transfer or sale of any
or all of the Argentine Subsidiaries or all or any portion of the
assets thereof to any joint venture, partnership or other similar
entity; PROVIDED that such transfer or sale shall be on terms
reasonably satisfactory to the Administrative Agent;"
(e) by deleting the period at the end of subsection 7.9(r) and
inserting in lieu thereof a semicolon;
(f) by adding the following new paragraph (s):
"(s) other Investments not otherwise permitted pursuant to
this subsection 7.9 in an aggregate amount not to exceed $5,000,000;";
(g) by adding the following new paragraph (t):
"(t) any Investments made in connection with the Significant
Disposition; and"; and
(h) by adding the following new paragraph (u):
"(u) deferred compensation (and/or oil and gas interests taken
in lieu of cash payment) at any time owing by customers to (or, in the
case of oil and gas interests, owned by) the Borrower and its
Subsidiaries (in the case of each such arrangement agreed to on or
after July [9], 1999, on terms reasonably satisfactory to the
Administrative Agent) for services rendered to such customers by the
Borrower and its Subsidiaries, so long as the value of such services
(as determined in good faith by the Borrower and its Subsidiaries),
minus the amount of any cash compensation received in respect of such
services and/or oil and gas interests) does not exceed (i) $15,000,000
for all such customers and (ii) $5,000,000 for all such customers whose
long-term debt either (x) has been assigned a rating of less than
"BBB-" by Standard and Poor's Ratings Services ("S&P") or "Baa3" by
Xxxxx'x Investors Service, Inc. ("MOODY'S") or (y) has not been rated
by either S&P or Moody's."
Section 14. AMENDMENT TO SUBSECTION 7.12 (LIMITATION ON SALES
AND LEASEBACKS). Subsection 7.12 of the Credit Agreement is hereby amended by
deleting each reference to "$15,000,000"contained therein and substituting in
lieu of each thereof a reference to "$25,000,000".
7
Section 15. CONDITIONS TO EFFECTIVENESS OF THIS AMENDMENT.
This Amendment shall become effective as of the date (the "Effective Date") that
the Administrative Agent shall have received (a) this Amendment, executed and
delivered by a duly authorized officer of the Borrower and the Required Lenders,
(b) the attached Acknowledgment and Consent, executed and delivered by a duly
authorized officer of each of the signatories thereto, and (c) such other
corporate documents and resolutions as the Administrative Agent may request.
Section 16. MISCELLANEOUS.
(a) REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Administrative Agent and the Lenders that as of the
Effective Date, after giving effect to this Amendment, no Default or
Event of Default has occurred and is continuing, and the
representations and warranties made by the Borrower in or pursuant to
the Credit Agreement or any Loan Documents are true and correct in all
material respects on and as of the Effective Date as if made on such
date (except to the extent that any such representations and warranties
expressly relate to an earlier date, in which case such representations
and warranties were true and correct in all material respects on and as
of such earlier date).
(b) CONTINUING EFFECT OF THE CREDIT AGREEMENT. This Amendment
shall not constitute an amendment or waiver of or consent to any
provision of the Credit Agreement not expressly referred to herein and
shall not be construed as an amendment, waiver or consent to any action
on the part of the borrower that would require an amendment, waiver or
consent to any action on the part of the Borrower that would require an
amendment, waiver or consent of the Agents or the Lenders except as
expressly stated herein. Except as expressly consented to hereby, the
provisions of the Credit Agreement are and shall remain in full force
and effect.
(c) FEES AND EXPENSES. The Borrower agrees to pay or reimburse
the Administrative Agent on demand for all its reasonable out-of-pocket
costs and expenses incurred in connection with the preparation and
execution of this Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative
Agent.
(d) COUNTERPARTS. This Amendment may be executed in any number
of counterparts (including by telecopy) by the parties hereto, each of
which counterparts when so executed shall be an original, but all
counterparts taken together shall constitute one and the same
instrument.
(e) GOVERNING LAW. THIS WAIVER AND AMENDMENT AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
8
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
KEY ENERGY SERVICES, INC. (formerly
known as Key Energy Group, Inc.)
By: /s/ Xxxxxx X. Xxxxxxxx
__________________________________
Title: Executive Vice President and Chief
Financial Officer
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx Xxxxxxx
__________________________________
Title: Vice President
XXXXX FARGO BANK
By:
______________________________________
Title:
____________________________________
BANK POLSKA KASA OPIEKI S.A.,
PEKAO S.A. GROUP, NEW YORK
BRANCH
By: /s/ Hussein B. El-Xxxxx
______________________________________
Title: Vice President
BANK LEUMI, USA
By: /s/ Xxxxx Xxx Hong
______________________________________
Title: Vice President
BOEING CAPITAL CORPORATION
By: /s/ Xxxxx Xxxxxx
______________________________________
Title: Special Credits Officer
THE CIT GROUP/EQUIPMENT
FINANCING, INC.
By:
______________________________________
Title:
KZH HIGHLAND-2 LLC
By: /s/ Xxxxx Xxxx
______________________________________
Title: Authorized Agent
KZH PAMCO LLC
By: /s/ XXXXX XXXX
______________________________________
Title: Authorized Agent
BEAR XXXXXXX INVESTMENT
PRODUCT INC.
By: /s/ Xxxxx Xxxxxxxxx
______________________________________
Title: Authorized Signatory
Crescent/Mach I Partners, L.P.
by: TCW Asset Management Company
its investment Manager
By: /s/ Xxxxxx X. Xxxxxxxx
______________________________________
Title: Senior Vice President
Continental Assurance Company
Separate Account (E)
By: TCW Asset Management Company
as Attorney-in-Fact
By: /s/ Xxxx X. Gold
______________________________________
Title: Managing Director
By: /s/ Xxxxxx X. Xxxxxxxx
______________________________________
Title: Senior Vice President
United Of Omaha Life Insurance Company
By: TCW Asset Management Company,
its Investment Advisor
By: /s/ Xxxxxx X. Xxxxxxxx
______________________________________
Title: Senior Vice President
By: /s/ Xxxxxxxx X. Xxxxxx
______________________________________
Title: Vice President
SEQUILS 1. LTD
By: TCW Advisors, Inc. as its Collateral
Manager
By: /s/ Xxxxxx X. Xxxxxxxx
______________________________________
Title: Senior Vice President
By: /s/ Xxxxxxxx X. Xxxxxx
______________________________________
Title: Vice President
ELC (CAYMAN) LTD. CDO SERIES
1999-1
By: /s/ Xxxx X. Xxxxxxx
______________________________________
Title: President
INDOSUEZ CAPITAL FUNDING IV, L.P.
By: /s/ XXXXXXX XXXXXX
______________________________________
Title: Vice President
INDOSUEZ CAPITAL FUNDING IIA,
LIMITED
By: /s/ XXXXXXX XXXXXX
______________________________________
Title: Vice President
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P., as
Collateral Manager
By: /s/ Xxxxx Xxxxxxx
______________________________________
Title: President
Highland Capital Management, L.P.
ML CBO IV (Cayman)
By: Highland Capital Management, L.P., as
Collateral Agent
By: /s/ Xxxxx Xxxxxxx
______________________________________
Title: President
Highland Capital Management, L.P.
XXX CAPITAL FUNDING, L.P.
By: Highland Capital Management, L.P., as
Collateral Manager
By: /s/ Xxxxx Xxxxxxx
______________________________________
Title: President
Highland Capital Management, L.P.
ML CLO XX PILGRIM AMERICA
(CAYMAN) LTD.
By: Pilgrim Investments, Inc. as its
Investment Manager
By: /s/ Xxxxxx X. Xxxxxx
______________________________________
Title: Vice President
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By: /s/ Xxxxxx X. Xxxxxx
______________________________________
Title: Vice President
XXXXXXX XXXXX PRIME RATE
PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By: /s/ Xxxxx Xxxxxxxx
______________________________________
Title: Authorized Signatory
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By: /s/ Xxxxx Xxxxxxxx
______________________________________
Title: Authorized Signatory
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND II, INC.
By: /s/ Xxxxx Xxxxxxxx
______________________________________
Title: Authorized Signatory
XXXXXXX XXXXX DEBT STRATEGIES
FUND II, INC.
By: /s/ Xxxxx Xxxxxxxx
______________________________________
Title: Authorized Signatory
XXXXXXX XXXXX DEBT STRATEGIES
FUND III, INC.
By: /s/ Xxxxx Xxxxxxxx
______________________________________
Title: Authorized Signatory
ACKNOWLEDGMENT AND CONSENT
Each of the undersigned corporations, as a guarantor under
that certain Amended and Restated Master Guarantee and Collateral Agreement,
dated as of June 6, 1997, as amended and restated through September 14, 1998 (as
amended, supplemented or otherwise modified from time to time, the "GUARANTEE"),
made by each of such corporations in favor of the Collateral Agent, acknowledges
the foregoing amendment and confirms and agrees that the Guarantee is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects and the guarantee and all of the Collateral (as defined in the
Guarantee) do, and shall continue to, secure the payment of all of the
Obligations (as defined in the Guarantee) pursuant to the terms of the
Guarantee. Capitalized terms not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement referred to in the Amendment
to which this Acknowledgment and Consent is attached.
YALE E. KEY, INC.
KEY ENERGY DRILLING, INC.
WELLTECH EASTERN, INC.
ODESSA EXPLORATION INCORPORATED
KALKASKA OILFIELD SERVICES, INC.
WELL-CO OIL SERVICE, INC.
XXXXXXX WELL SERVICE, INC.
XXXXXX WELL SERVICE, INC.
RAM OIL WELL SERVICE, INC.
XXXXXXX TRUCKING CO., INC.
LANDMARK FISHING & RENTAL, INC.
XXXXXX WELL SERVICE, INC.
FRONTIER WELL SERVICE, INC.
KEY ROCKY MOUNTAIN, INC.
KEY FOUR CORNERS, INC.
XXXXX SERVICE CO.
XXXXX WELL SERVICE, INC.
XXXXX TRANSPORTATION, INC.
INDUSTRIAL OILFIELD SUPPLY, INC.
XXXXXX WELL SERVICING, INC.
XXXXXX BROTHERS, INC.
X.X. XXXXXX WELL SERVICE COMPANY
KEY ENERGY SERVICES-SOUTH TEXAS, INC.
XXXXXX OILFIELD SERVICE & SUPPLY, INC.
WELLTECH MID-CONTINENT, INC.
XXXXXX PRODUCTION MANAGEMENT, INC.
XXXXXX PRODUCTION ACQUISITION CORP.
XXXXXX PRODUCTION XXXXXX, INC.
KEY ENERGY SERVICES-CALIFORNIA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
________________________________________
Title: Vice President of each of the
foregoing companies
XXXXXX PRODUCTION PARTNERS, L.P.
By: XXXXXX PRODUCTION
MANAGEMENT, INC., Its sole
general partner,
By: /s/ Xxxxxx X. Xxxxxxxx
________________________________________
Title: Vice President
