EXHIBIT 10.2
CONFORMED COPY
SEVENTH AMENDMENT
SEVENTH AMENDMENT, dated as of March 1, 2000 (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, the Fifth Amendment dated as of May
10, 1999 and the Sixth Amendment dated as of July 14, 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 by inserting in the
appropriate alphabetical order the following new definition of "Production
Payment Transaction":
"'PRODUCTION PAYMENT TRANSACTION': the sale by
Odessa, pursuant to a production payment of a specified
quantity of hydrocarbons to be produced from oil and gas
interests owned by Odessa for an aggregate purchase price of
at least $15,000,000."
Section 3. AMENDMENT TO SUBSECTION 7.2 (LIMITATION ON
INDEBTEDNESS). Subsection 7.2 of the Credit Agreement is hereby amended as
follows:
(a) by deleting from paragraph (c) the reference to
"$10,000,000" and substituting in lieu thereof a reference to
"$20,000,000"; and by adding the following immediately after the
reference to "September 14, 1998":
", plus any amount loaned in connection with the
acquisition of any Foreign Subsidiary listed on Schedule
7.9(c);";
(b) by deleting from paragraph (d) the reference to
"$25,000,000" and substituting in lieu thereof a reference to
"$30,000,000";
(c) by deleting from paragraph (g) the reference to
"$25,000,000" and substituting in lieu thereof a reference to
"$30,000,000";
(d) by deleting from paragraph (j) the reference to
"$25,000,000" and substituting in lieu thereof a reference to
"$30,000,000";
(e) by deleting the word "and" at the end of paragraph (l);
(f) by deleting the period at the end of paragraph (m) and
substituting in lieu thereof a semicolon and the word "and"; and
(g) by adding the following new paragraph (n):
"(n) in the event that the Production Payment
Transaction involves the incurrence of Indebtedness,
Indebtedness represented thereby.
Section 4. AMENDMENTS TO SUBSECTION 7.3 (LIMITATION ON LIENS).
Subsection 7.3 of the Credit Agreement is hereby amended as follows:
(a) by deleting the word "and" at the end of paragraph (k);
(b) by deleting the period at the end of paragraph (l) and
substituting in lie thereof a semicolon and the word "and"; and
(c) by adding the following new paragraph (m):
"(m) Liens on oil and gas properties and stock of
Odessa, arising in connection with the Production Payment
Transaction.".
Section 5. AMENDMENTS TO SUBSECTION 7.6 (LIMITATION ON SALE
OF ASSETS). Subsection 7.6 of the Credit Agreement is hereby amended as follows:
(a) by deleting the word "and" at the end of paragraph (c);
(b) by deleting the word "and" at the end of paragraph (d);
(c) by deleting the period at the end of paragraph (e) and
substituting in lieu thereof a semicolon;
(d) by adding the following new paragraph (f):
"(f) Odessa may consummate the Production Payment
Transaction, PROVIDED that $10,000,000 of the proceeds is used
to prepay the Term Loans; and"; and
(e) by adding the following new paragraph (g):
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"(g) the swap of a portion of the Borrower's
production testing, slickline, wireline and pipe testing
business in Texas and Louisiana in exchange for trucking
assets of substantially equivalent value, PROVIDED that (i)
the fair market value of the assets swapped by the Borrower in
the asset swap is no more than $10,000,000 and (ii) the
Borrower shall comply with the provisions of Section
6.10 with respect to the trucking assets acquired by the
Borrower in the asset swap."
Section 6. AMENDMENT TO SECTION 7.8 (LIMITATION ON CAPITAL
EXPENDITURES). Section 7.8 of the Credit Agreement is hereby amended as follows:
(a) by adding after "Significant Disposition" in Subsection
7.8(a) the words "or the Production Payment Transaction"; and
(b) by adding the following after the reference to "plus (ii)"
in Subsection 7.8(b):
"the amount of any Indebtedness incurred pursuant to
Subsection 7.2(d) during such fiscal year plus (iii)".
Section 7. AMENDMENT TO SECTION 7.9 (LIMITATION ON
INVESTMENTS, LOANS AND ADVANCES). Section 7.9 of the Credit Agreement is hereby
amended as follows:
(a) Subsection 7.9(d) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(d) Permitted Acquisitions after the Merger Loan
Date and the exchange of assets permitted by Subsection 7.6(g)";
(b) Subsection 7.9(e) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(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 any amount invested in the acquisition of any Foreign
Subsidiaries listed on Schedule 7.9(c), plus $20,000,000 (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)),
PROVIDED that, of the amounts of investments in Foreign
Subsidiaries made pursuant to this paragraph after the
effective date of the Seventh Amendment hereto, not more than
$5,000,000 may be loaned to, or invested in, Foreign
Subsidiaries in the form of cash or Cash Equivalents and the
remaining amount which may be loaned to or
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invested in Foreign Subsidiaries shall be in the form of loans
or contributions of supplies, equipment and other non-cash
items;"; and
(c) Subsection 7.9(f) of the Credit Agreement is hereby
amended to read in its entirety as follows:
"(f) as permitted by Subsection 7.2(c)(iii);".
Section 8.AMENDMENT TO SUBSECTION 7.10 (LIMITATION ON OPTIONAL
PAYMENTS AND MODIFICATIONS OF DEBT INSTRUMENTS AND ORGANIZATIONAL DOCUMENTS,
ETC.). Subsection 7.10 of the Credit Agreement is hereby amended by adding the
following new sentence at the end of such Subsection:
"Notwithstanding anything to the contrary contained
in the foregoing, the Borrower may apply to the purchase of
Indebtedness (including the Convertible Subordinated
Debentures, the 1997 Convertible Subordinated Notes and the
Senior Subordinated Notes) the sum of (i) up to $75,000,000 of
the Net Cash Proceeds of any issuance of its Capital Stock,
PROVIDED that the Borrower shall have applied toward
prepayment of the Term Loans the portion of such Net Cash
Proceeds required by Subsection 2.10, and (ii) all the sale
proceeds of the Production Payment Transaction in excess of
the amount to be applied to prepay the Term Loans pursuant to
Section 7.6(f)."
Section 9. INSTRUCTION OF COLLATERAL AGENT. The Lenders hereby
instruct the Collateral Agent to release its Liens on the stock and assets of
Odessa upon receipt by the Collateral Agent of written notice from the Borrower
that the Borrower is ready, willing and able to consummate the Production
Payment Transaction and to comply with the provisions of Subsection 7.6(f).
Section 10. RESIGNATION OF COLLATERAL AGENT; APPOINTMENT OF
SUCCESSOR COLLATERAL AGENT. If Norwest Bank Texas N.A., gives notice of
resignation as Collateral Agent pursuant to Section 9.9 of the Credit Agreement
within ninety (90) days of the Effective Date (as defined below), the Required
Lenders hereby approve the future appointment of PNC Bank, National Association
as the successor Collateral Agent, and the Borrower hereby consents pursuant to
Section 9.9 of the Credit Agreement.
Section 11. 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, (c) from the Borrower, an
amendment fee of 5.0 basis points on the Aggregate Exposure as in effect on the
Effective Date of each Lender consenting to the Amendment, such amendment fee to
be payable to the Administrative Agent for the account of such Lender, on the
Effective Date, and (d) such other corporate documents and resolutions as the
Administrative Agent may request.
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Section 12. 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.
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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: Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
________________________________________
Title: Vice President
BANK POLSKA KASA OPIEKI S.A.,
PEKAO S.A. GROUP, NEW YORK
BRANCH
By: /s/ Xxxxx X. Xxxxx
________________________________________
Title: Vice President
BANK LEUMI, USA
By: /s/ Xxxxx Xxx Hong
_______________________________________
Title: Vice President
BOEING CAPITAL CORPORATION
By:
_______________________________________
Title:
THE CIT GROUP/EQUIPMENT
FINANCING, INC.
By: /s/ Xxxxxx X. X. Xxxxxxx
_______________________________________
Title: Assistant Vice President
KZH CRESCENT LLC
By: /s/ Xxxxx Xxxx
________________________________________
Title: Authorized Agent
KZH CRESCENT-2 LLC
By: /s/ Xxxxx Xxxx
________________________________________
Title: Authorized Agent
KZH CRESCENT-3 LLC
By: /s/ Xxxxx Xxxx
________________________________________
Title: Authorized Agent
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:
________________________________________
Title:
________________________________________
Crescent/Mach I Partners, L.P.
by: TCW Asset Management Company
its investment Manager
By: /s/ Xxxxxxxx X. Xxxxxx
________________________________________
Title: 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/ Xxxxxxxx X. Xxxxxx
________________________________________
Title: Vice President
United Of Omaha Life Insurance Company
By: TCW Asset Management Company,
its Investment Advisor
By: /s/ Xxxx X. Gold
________________________________________
Title: Managing Director
By: /s/ Xxxxxxxx X. Xxxxxx
________________________________________
Title: Vice President
SEQUILS 1. LTD
By: TCW Advisors, Inc. as its Collateral
Manager
By: /s/ Xxxx X. Gold
________________________________________
Title: Managing Director
By: /s/ Xxxxxxxx X. Xxxxxx
________________________________________
Title: Vice President
ELC (CAYMAN) LTD. CDO SERIES
1999-1
By: /s/ Xxxxxx X. Xxxxxx
________________________________________
Title: Senior Vice President
INDOSUEZ CAPITAL FUNDING IV, L.P.
By: Indosuez Capital as Portfolio Advisor
By: /s/ Xxxxxxx Xxxxxx
________________________________________
Title: Vice President
INDOSUEZ CAPITAL FUNDING IIA,
LIMITED
By: Indosuez Capital as Portfolio Advisor
By: /s/ Xxxxxxx Xxxxxx
________________________________________
Title: Vice President
PAMCO CAYMAN LTD.
By: Highland Capital Management, L.P.,
as Collateral Manager
By: /s/ Xxxxx Xxxxxxx, CFA, CPA
________________________________________
Title: President
Highland Capital Management, L.P.
ML CBO IV (Cayman)
By: Highland Capital Management, L.P.
as Collateral Agent
By: /s/ Xxxxx Xxxxxxx, CFA, CPA
________________________________________
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, CFA, CPA
________________________________________
Title: President
Highland Capital Management, L.P.
ML CLO XX PILGRIM AMERICA
(CAYMAN) LTD.
By: Pilgrim Investments, Inc. as its
Investment Manager
By: /s/ Xxxxxxx X. Xxxxxxx, CFA
________________________________________
Title: Assistant Vice President
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By: /s/ Xxxxxxx X. Xxxxxxx, CFA
________________________________________
Title: Assistant Vice President
XXXXXXX XXXXX PRIME RATE
PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management,
L.P., as Investment Advisor
By: /s/ Xxxxx Xxxxxxxx, CFA
________________________________________
Title: Authorized Signatory
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By: /s/ Xxxxx Xxxxxxxx, CFA
________________________________________
Title: Authorized Signatory
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND II, INC.
By: /s/ Xxxxx Xxxxxxxx, CFA
________________________________________
Title: Authorized Signatory
XXXXXXX XXXXX DEBT STRATEGIES
FUND II, INC.
By: /s/ Xxxxx Xxxxxxxx, CFA
________________________________________
Title: Authorized Signatory
XXXXXXX XXXXX DEBT STRATEGIES
FUND III, INC.
By: /s/ Xxxxx Xxxxxxxx, CFA
________________________________________
Title: Authorized Signatory
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxxxxx Xxxxxxx
_______________________________________
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
XXXXXX PRODUCTION PARTNERS, L.P.
By: XXXXXX PRODUCTION
MANAGEMENT, INC., Its sole
general partner,
By: /s/ Xxxxxx x. Xxxxxxxx
_______________________________________
Title: Vice President
