FOURTH AMENDMENT
FOURTH AMENDMENT, dated as of April 15, 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 and the Third Amendment dated as of April 8, 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 as defined terms are so used
as so defined.
Section 2. AMENDMENTS TO SUBSECTION 1.1 (DEFINITIONS). Subsection 1.1
of the Credit Agreement is hereby amended as follows:
(a) by deleting the definition of "$125,000,000 Equity Issuance Date"
in its entirety;
(b) by deleting the definition of "$150,000,000 Equity Issuance Date"
in its entirety and substituting in lieu thereof the following new
definition:
"'$150,000,000 EQUITY ISSUANCE DATE': any date occurring after
April 7, 1999 and on or prior to May 15, 1999 on which the Borrower
shall have received at least $150,000,000 (but less than $175,000,000)
of gross cash proceeds from the issuance of its Capital Stock to a
Person or to Persons that, prior to such issuance, are not Affiliates
of the Borrower.";
(c) by inserting in the appropriate alphabetical order the following
new definition of "$175,000,000 Equity Issuance Date":
"'$175,000,000 EQUITY ISSUANCE DATE': any date occurring after
April 7, 1999 and on or prior to May 15, 1999 on which the Borrower
shall have received at least $175,000,000 of gross cash proceeds from
the issuance of its Capital Stock to a Person or to Persons that,
prior to such issuance, are not Affiliates of the Borrower.";
(d) by inserting in the appropriate alphabetical order the following
new definition of "Consolidated Fixed Charge Coverage Ratio":
2
"'CONSOLIDATED FIXED CHARGE COVERAGE RATIO': for any period, the
ratio of (a) the sum of (i) Consolidated EBITDA of the Borrower and
its Subsidiaries for such period and (ii) Consolidated Liquidity as of
the end of the last day of such period to (b) the sum of (i)
Consolidated Interest Expense for such period, (ii) the aggregate
amount of Capital Expenditures made by the Borrower and its
Subsidiaries during such period and (iii) the aggregate amount of
principal payments scheduled to be made during the twelve months
following the last day of such period in respect of Indebtedness of
the Borrower or any of its Subsidiaries (including scheduled principal
payments in respect of the Term Loans); PROVIDED that for purposes of
calculating Consolidated EBITDA of the Borrower and its Subsidiaries
for any period of four full fiscal quarters, the Consolidated EBITDA
of any Person acquired by the Borrower or its Subsidiaries which upon
such acquisition becomes a Consolidated Subsidiary or is merged into
the Borrower or a Subsidiary (including, without limitation, Xxxxxx
and its Subsidiaries) during such period shall be included on a PRO
FORMA basis for such period of four full fiscal quarters (assuming the
consummation of each such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day
of such period of four full fiscal quarters and assuming only such
cost reductions as are related to such acquisition and are realizable
on or before the date of calculation) if the consolidated balance
sheet of such acquired Person and its consolidated Subsidiaries as at
the end of the period preceding the acquisition of such Person and the
related consolidated statements of income and stockholders' equity and
of cash flows for such period (i) have been previously provided to the
Administrative Agent and the Lenders and (ii) either (A) have been
reported on without a qualification arising out of the scope of the
audit (other than a "going concern" or like qualification or
exception) by independent certified public accountants of nationally
recognized standing or (B) have been found acceptable by the
Administrative Agent."; and
(e) by inserting in the appropriate alphabetical order the following
new definition of "Consolidated Liquidity":
"'CONSOLIDATED LIQUIDITY': at any date, the sum of (a) the amount
of cash and Cash Equivalents in excess of $5,000,000 held by the
Borrower and its Subsidiaries on such date and (b) the aggregate
Available Revolving Commitments of all Lenders on such date."
Section 3. AMENDMENT TO SUBSECTION 2.10(b) (MANDATORY PREPAYMENTS AND
COMMITMENT REDUCTIONS - EQUITY ISSUANCES). Subsection 2.10(b) of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following new Subsection 2.10(b):
3
"(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 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, shall be applied on
the date of such issuance or incurrence 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."
Section 4. AMENDMENTS TO SUBSECTION 7.1 (FINANCIAL CONDITION
COVENANTS). Subsection 7.1 is hereby amended as follows (PROVIDED that, for
purposes of application of each of the financial covenants set forth in
Subsection 7.1 of the Credit Agreement with respect to the fiscal quarter ended
March 31, 1999, such Subsection 7.1 shall be applied in accordance with the
terms and provisions thereof as in effect on April 7, 1999 (except that the
amendment contained in Section 2(a) of the Third Amendment referred to in the
preamble to this Amendment shall be deemed to be in effect on March 31, 1999):
(a) by deleting Subsection 7.1(a) in its entirety and substituting in
lieu thereof the following:
"7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED DEBT-TO-CAPITALIZATION RATIO. Permit the
Consolidated Debt-to-Capitalization Ratio as of any date set
forth below to exceed the percentage set forth below opposite
such date (i) under the column headed "Base Case" below (unless
the $150,000,000 Equity Issuance Date or the $175,000,000 Equity
Issuance Date shall have occurred, in which case the following
clause (ii) or (iii), respectively, shall apply), (ii) under the
column headed "$150,000,000 Issuance" below, if the $150,000,000
Equity Issuance Date shall have occurred, or (iii) under the
column headed "$175,000,000 Issuance" below, if the $175,000,000
Equity Issuance Date shall have occurred:
4
Consolidated Debt-to-Capitalization Ratio
$150,000,000 $175,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 90.0% 75.0% 79.0%
September 30, 1999 90.0% 75.0% 79.0%
December 31, 1999 90.0% 75.0% 79.0%
March 31, 2000 90.0% 75.0% 79.0%
June 30, 2000 78.0% 75.0% 79.0%
September 30, 2000 78.0% 75.0% 79.0%
December 31, 2000 78.0% 75.0% 79.0%
March 31, 2001 78.0% 75.0% 75.0%
June 30, 2001 78.0% 75.0% 75.0%
September 30, 2001 76.0% 72.5% 72.5%
December 31, 2001 76.0% 72.5% 72.5%
March 31, 2002 76.0% 72.5% 72.5%
June 30, 2002 76.0% 72.5% 72.5%
September 30, 2002 72.5% 70.0% 70.0%
December 31, 2002 72.5% 70.0% 70.0%
March 31, 2003 72.5% 70.0% 70.0%
June 30, 2003 72.5% 70.0% 70.0%
September 30, 2003 72.5% 70.0% 70.0%
December 31, 2003 70.0% 65.0% 65.0%
March 31, 2004 70.0% 65.0% 65.0%
June 30, 2004 70.0% 65.0% 65.0%
September 30, 2004 70.0% 65.0% 65.0%
---------
(b) by deleting Subsection 7.1(b) in its entirety and substituting in
lieu thereof the following:
"(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
Consolidated Interest Coverage Ratio for any period of four
consecutive fiscal quarters of the Borrower ending as of any date set
forth below to be less than the ratio set forth below opposite such
date (i) under the column headed "Base Case" below (unless the
$150,000,000 Equity Issuance Date or the $175,000,000 Equity Issuance
Date shall have occurred, in which case the following clause (ii) or
(iii), respectively, shall apply), (ii) under the column headed
"$150,000,000 Issuance" below, if the $150,000,000 Equity Issuance
Date shall have occurred, or (iii) under the column headed
"$175,000,000 Issuance" below, if the $175,000,000 Equity Issuance
Date shall have occurred:
5
Consolidated Interest Coverage Ratio
$150,000,000 $175,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 1.25 to 1.00 1.35 to 1.00 N/A
September 30, 1999 1.15 to 1.00 1.20 to 1.00 N/A
December 31, 1999 1.20 to 1.00 1.35 to 1.00 N/A
March 31, 2000 1.40 to 1.00 1.45 to 1.00 N/A
June 30, 2000 1.50 to 1.00 1.75 to 1.00 N/A
September 30, 2000 1.75 to 1.00 1.75 to 1.00 N/A
December 31, 2000 1.75 to 1.00 1.75 to 1.00 N/A
March 31, 2001 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
June 30, 2001 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
September 30, 2001 2.00 to 1.00 2.25 to 1.00 2.25 to 1.00
December 31, 2001 2.25 to 1.00 2.50 to 1.00 2.50 to 1.00
March 31, 2002 2.50 to 1.00 2.75 to 1.00 2.75 to 1.00
June 30, 2002 2.50 to 1.00 2.75 to 1.00 2.75 to 1.00
September 30, 2002 2.50 to 1.00 3.00 to 1.00 3.00 to 1.00
December 31, 2002 2.75 to 1.00 3.25 to 1.00 3.25 to 1.00
March 31, 2003 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
June 30, 2003 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
September 30, 2003 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
December 31, 2003 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
March 31, 2004 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
June 30, 2004 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
September 30, 2004 3.00 to 1.00 3.50 to 1.00 3.50 to 1.00
; PROVIDED, that for the purposes of determing the ratio described
above for the fiscal quarter of the Borrower ending June 30, 1999,
Consolidated Interest Expense shall be deemed to equal Consolidated
Interest Expense for the period commencing October 1, 1998 and ending
June 30, 1999, multiplied by 4/3.";
(c) by deleting Subsection 7.1(c) in its entirety and substituting in
lieu thereof the following:
"(c) CONSOLIDATED SENIOR LEVERAGE RATIO. Permit the Consolidated
Senior Leverage Ratio as of any date set forth below to exceed the
ratio set forth below opposite such date (i) under the column headed
"Base Case" below (unless the $150,000,000 Equity Issuance Date or the
$175,000,000 Equity Issuance Date shall have occurred, in which case
the following clause (ii) or (iii), respectively, shall apply), (ii)
under the column headed "$150,000,000 Issuance" below, if the
$150,000,000 Equity Issuance Date shall have occurred, or (iii) under
the column headed "$175,000,000 Issuance" below, if the $175,000,000
Equity Issuance Date shall have occurred:
6
Consolidated Senior Leverage Ratio
$150,000,000 $175,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 6.00 to 1.00 4.50 to 1.00 N/A
September 30, 1999 6.00 to 1.00 4.50 to 1.00 N/A
December 31, 1999 6.00 to 1.00 4.25 to 1.00 N/A
March 31, 2000 4.75 to 1.00 3.75 to 1.00 N/A
June 30, 2000 3.50 to 1.00 3.25 to 1.00 N/A
September 30, 2000 3.25 to 1.00 2.75 to 1.00 N/A
December 31, 2000 3.00 to 1.00 2.50 to 1.00 N/A
March 31, 2001 2.75 to 1.00 2.50 to 1.00 2.50 to 1.00
June 30, 2001 2.75 to 1.00 2.25 to 1.00 2.25 to 1.00
September 30, 2001 2.25 to 1.00 2.00 to 1.00 2.00 to 1.00
December 31, 2001 2.25 to 1.00 2.00 to 1.00 2.00 to 1.00
March 31, 2002 2.25 to 1.00 2.00 to 1.00 2.00 to 1.00
June 30, 2002 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
September 30, 2002 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
December 31, 2002 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
March 31, 2003 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
June 30, 2003 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
September 30, 2003 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
December 31, 2003 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
March 31, 2004 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
June 30, 2004 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00
September 30, 2004 2.00 to 1.00 2.00 to 1.00 2.00 to 1.00";
(d) by deleting Subsection 7.1(d) in its entirety and substituting in
lieu thereof the following:
"(d) CONSOLIDATED NET WORTH. Permit the Consolidated Net Worth of
the Borrower and Subsidiaries to be less than the sum of (i) (x) if
the $175,000,000 Equity Issuance Date shall have occurred,
$195,000,000, and (y) otherwise, the difference between (A)
$110,000,000 and (B) the amount (in the aggregate for the following
clauses (I), (II) and (III), taken together, not to exceed
$15,000,000) of (I) non-recurring transaction expenses incurred in
connection with the consummation of the Acquisition, (II) related
financing and restructuring charges and (III) writeoff of goodwill and
7
licensing agreements, PLUS (ii) 75% of Consolidated Net Income of the
Borrower and its Subsidiaries (to the extent a positive number) for
each fiscal quarter completed after the Closing Date commencing with
the fiscal quarter ending December 31, 1998, PLUS (iii) 75% of the Net
Cash Proceeds of any offerings or issuances of Capital Stock of the
Borrower or any of its Subsidiaries after the Closing Date (other than
the Net Cash Proceeds of any Capital Stock issued on the $175,000,000
Equity Issuance Date), PLUS (iv) 75% of the increase in the
Consolidated Net Worth of the Borrower and its Subsidiaries resulting
from any conversion of the 1997 Convertible Subordinated Notes or any
future convertible indebtedness of the Borrower and its
Subsidiaries.";
(e) by deleting Subsection 7.1(e) in its entirety and substituting in
lieu thereof the following:
"(e) CONSOLIDATED EBITDA. Permit the Consolidated EBITDA of the
Borrower and its Subsidiaries for any period of four consecutive
fiscal quarters of the Borrower ending on any date set forth below to
be less than the amount set forth below opposite such date (i) under
the column headed "Base Case" below (unless the $150,000,000 Equity
Issuance Date or the $175,000,000 Equity Issuance Date shall have
occurred, in which case the following clause (ii) or (iii),
respectively, shall apply), (ii) under the column headed "$150,000,000
Issuance" below, if the $150,000,000 Equity Issuance Date shall have
occurred, or (iii) under the column headed "$175,000,000 Issuance"
below, if the $175,000,000 Equity Issuance Date shall have occurred:
$150,000,000 $175,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 $85,000,000 $85,000,000 $50,000,000
September 30, 1999 $80,000,000 $80,000,000 $50,000,000
December 31, 1999 $85,000,000 $85,000,000 $50,000,000
March 31, 2000 $105,000,000 $105,000,000 $50,000,000
June 30, 2000 $115,000,000 $115,000,000 $50,000,000
September 30, 2000 $120,000,000 $120,000,000 $50,000,000
December 31, 2000 $125,000,000 $125,000,000 $50,000,000
March 31, 2001 $130,000,000 $130,000,000 $130,000,000
June 30, 2001 $135,000,000 $135,000,000 $135,000,000
September 30, 2001 $140,000,000 $140,000,000 $140,000,000
December 31, 2001 $145,000,000 $145,000,000 $145,000,000
March 31, 2002 $150,000,000 $150,000,000 $150,000,000
8
June 30, 2002 $150,000,000 $150,000,000 $150,000,000
September 30, 2002 $150,000,000 $150,000,000 $150,000,000
December 31, 2002 $150,000,000 $150,000,000 $150,000,000
March 31, 2003 $150,000,000 $150,000,000 $150,000,000
June 30, 2003 $150,000,000 $150,000,000 $150,000,000
September 30, 2003 $150,000,000 $150,000,000 $150,000,000
December 31, 2003 $150,000,000 $150,000,000 $150,000,000
March 31, 2004 $150,000,000 $150,000,000 $150,000,000
June 30, 2004 $150,000,000 $150,000,000 $150,000,000
September 30, 2004 $150,000,000 $150,000,000 $150,000,000
; PROVIDED that for purposes of calculating Consolidated EBITDA of the
Borrower and its Subsidiaries for any such period of four consecutive
fiscal quarters, the Consolidated EBITDA of any Person acquired by the
Borrower or its Subsidiaries which upon such acquisition becomes a
Consolidated Subsidiary or is merged into the Borrower or a Subsidiary
(including, without limitation, Xxxxxx and its Subsidiaries) during
such period shall be included on a PRO FORMA basis for such period of
four full fiscal quarters (assuming the consummation of each such
acquisition and the incurrence or assumption of any Indebtedness in
connection therewith occurred on the first day of such period of four
full fiscal quarters and assuming only such cost reductions as are
related to such acquisition and are realizable on or before the date
of calculation) if the consolidated balance sheet of such acquired
Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders' equity and of cash flows for
such period (i) have been previously provided to the Administrative
Agent and the Lenders and (ii) either (A) have been reported on
without a qualification arising out of the scope of the audit (other
than a "going concern" or like qualification or exception) by
independent certified public accountants of nationally recognized
standing or (B) have been found acceptable by the Administrative
Agent.";
(f) by adding a new Subsection 7.1(f) as follows:
"(f) CONSOLIDATED LIQUIDITY. From and after the $175,000,000
Equity Issuance Date (if any) until January 1, 2001, permit
Consolidated Liquidity on the last day of any fiscal quarter of the
Borrower commencing with the fiscal quarter ending June 30, 1999 to be
less than $25,000,000."; and
(g) by adding a new Subsection 7.1(g) as follows:
9
"(g) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters of the Borrower ending as of any date set
forth below to be less than the ratio set forth below opposite such
date:
Consolidated
Fixed Charge
Date Coverage Ratio
---- --------------
June 30, 1999 1.25 to 1.00
September 30, 1999 1.15 to 1.00
December 31, 1999 1.00 to 1.00
March 31, 2000 1.00 to 1.00
June 30, 2000 1.00 to 1.00
September 30, 2000 1.00 to 1.00
December 31, 2000 1.00 to 1.00"
Section 5. 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
(and, in the case of Section 3 of this Amendment, the Required Prepayment
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 6. 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).
10
(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 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.
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/ Xxxxxxx X. XxXxxxxx
--------------------------------
Title: Executive Vice President and
Chief Financial Officer
--------------------------------
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Senior Vice President
--------------------------------
NORWEST BANK TEXAS, N.A.
By: /s/ Xxxx Xxxxxxxx
--------------------------------
Title: Vice President
--------------------------------
BANK POLSKA KASA OPIEKI S.A.,
PEKAO S.A. GROUP, NEW YORK
BRANCH
By: /s/ Xxxxxxx El-Xxxxx
--------------------------------
Title: Vice President
--------------------------------
BANK LEUMI, USA
By: /s/ Xxxxx Xxx Hong
--------------------------------
Title: Vice President
--------------------------------
BOEING CAPITAL CORPORATION
By: /s/ Xxx Xxxxxxxxxxx
--------------------------------
Title: Senior Documentation Officer
--------------------------------
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By: /s/ Xxxx X. Xxxxx
--------------------------------
Title: Assistant Vice President
--------------------------------
KZH HIGHLAND-2 LLC
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Title: Authorized Agent
--------------------------------
KZH PAMCO LLC
By: /s/ Xxxxxxxx Xxxxxx
--------------------------------
Title: Authorized Agent
--------------------------------
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxxx Xxxxxxx, CFA, CPA
--------------------------------
Title: President
--------------------------------
XXX CAPITAL FUNDING, L.P.
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxxx Xxxxxxx, CFA, CPA
--------------------------------
Title: President of Highland Capital
Management, L.P.
--------------------------------
ML CLO IV (Cayman)
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxxx Xxxxxxx, CFA, CPA
--------------------------------
Title: President of Highland Capital
Management, L.P.
--------------------------------
ML CLO XX PILGRIM AMERICA
(CAYMAN) LTD.
By: Pilgrim Investments, Inc. as its
Investment Manager
By:
--------------------------------
Title:
--------------------------------
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By:
--------------------------------
Title:
--------------------------------
XXXXXXX XXXXX PRIME RATE
PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By:
--------------------------------
Title:
--------------------------------
MERRILL SENIOR FLOATING RATE
FUND, INC.
By:
--------------------------------
Title:
--------------------------------
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, ackowledges 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/ Xxxxxxx X. XxXxxxxx
----------------------------------------
Name: Xxxxxxx 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/ Xxxxxxx X. XxXxxxxx
----------------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
