Exhibit 99.1
KEY ENERGY SERVICES, INC.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
May 4, 1999
PNC Investment Corp.
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
PNC Capital Markets
One PNC Plaza
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Dear Sirs:
The undersigned hereby agree to terminate that certain letter
agreement by and between Key Energy Services, Inc. (the "Company") and PNC
Investment Corp., dated April 15, 1999 (the "Purchase Commitment Letter"), and
that certain letter agreement by and between the Company and PNC Capital
Markets, Inc. ("PNC Capital Markets"), dated April 15, 1999 (the "Fee Letter
Agreement"). The undersigned further agree that as a result of such termination,
the Purchase Commitment Letter and the Fee Letter Agreement shall have no
further force or effect.
In lieu of the Fee Letter Agreement, the Company and PNC Capital
Markets hereby agree that the Company shall pay $1.5 million in immediately
available funds to PNC Capital Markets promptly upon consummation of the
offering of 55 million shares of common stock, par value $.10 per share, of the
Company by Friedman, Billings, Xxxxxx & Co., Inc. and Xxxx Xxxxxxxx Xxxxxxx
pursuant to a prospectus supplement to be filed by the Company with the
Securities and Exchange Commission in connection with the Company's effective
Registration Statement on Form S-3 (File No. 333-67665), as consideration for
PNC Capital Markets, Inc. obtaining the purchase commitment from PNC Investment
Corp. set forth in the Purchase Commitment Letter. At the same time, the Company
shall pay $50,000 to PNC Investment Corp. to reimburse expenses in accordance
with paragraph 11 of the Purchase Commitment Letter.
This letter agreement shall become binding when two or more
counterparts, taken together, shall have been executed and delivered (which
deliveries may be made by telefax) by the parties.
Please confirm that the foregoing is our mutual understanding by
signing and returning to us an executed counterpart of this letter agreement.
Very truly yours,
KEY ENERGY SERVICES, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Xxxxxxx X. XxXxxxxx
Executive Vice President
and Chief Financial Officer
Accepted and agreed to this
4th day of May, 1999, by:
PNC CAPITAL MARKETS, INC.
By: /s/ Xxxxx X. Xxxxxxx, III
-------------------------
Xxxxx X. Xxxxxxx, III
Chairman
PNC INVESTMENT CORP.
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President
