THIRD AMENDMENT
THIRD AMENDMENT, dated as of April 8, 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 and the Second Amendment dated as of
December 29, 1998 (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 from clause (g) of the definition of "Consolidated
EBITDA" the reference to "non-recurring transaction expenses" and
substituting in lieu thereof a reference to "(i) non-recurring business
expenses and (ii) non-recurring transaction expenses, in the case of clause
(ii),";
(b) by deleting the definition of "Pricing Grid" in its entirety and
substituting in lieu thereof the following:
"'PRICING GRID': the pricing grid set forth on Annex I.";
(c) by deleting the definitions of "Consolidated Leverage Ratio" and
"Minimum Equity Event", each in its entirety;
(d) by inserting in the appropriate alphabetical order the following
new definition of "Consolidated Debt-to-Capitalization Ratio":
"'CONSOLIDATED DEBT-TO-CAPITALIZATION RATIO': on the date of any
determination thereof, the ratio (expressed as a percentage) of (a)
the difference between (i) Consolidated Total Debt on such date and
(ii) the amount of cash and Cash Equivalents in excess of $5,000,000
held by the Borrower and its Subsidiaries on such date (the difference
between the foregoing clause (i) and clause (ii), "ADJUSTED
CONSOLIDATED TOTAL DEBT"), to (b) the sum of (i) Adjusted Consolidated
Total Debt on such date and (ii) Consolidated Net Worth on such
date.";
(e) by inserting in the appropriate alphabetical order the
following new definition of "$125,000,000 Equity Issuance Date":
2
"'$125,000,000 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 $125,000,000 (but less than
$150,000,000) 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.";
(f) by inserting in the appropriate alphabetical order the
following new definition of "$150,000,000 Equity Issuance Date":
"'$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 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.";
(g) by deleting sub-clause (x) from clause (i) of the proviso
contained in the definition of "Permitted Acquisitions" and inserting
in lieu thereof the following new sub-clause (x):
"(x) the Consolidated Debt-to-Capitalization Ratio shall not
exceed the lesser of 60% and the ratio set forth in subsection
7.1(a) applicable to the Borrower at the time of such
acquisition"; and
(h) by deleting clause (ii) from the proviso contained in the
definition of "Permitted Acquisitions" and inserting in lieu thereof
the following new clause (ii):
"(ii) after giving effect to such acquisition, the Consolidated
Debt-to-Capitalization Ratio is not increased and such
acquisition is funded solely with the Borrower's Capital Stock."
Section 3. AMENDMENTS TO SUBSECTION 2.10 (MANDATORY PREPAYMENTS AND
COMMITMENT REDUCTIONS). Subsection 2.10 of the Credit Agreement is hereby
amended as follows:
(a) 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):
"(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) until the amount of Net Cash Proceeds
received from all such issuances of Capital Stock from and after the
Closing Date aggregate $75,000,000, 100% of the Net Cash Proceeds thereof,
and (ii) thereafter, (x) in the case of cash proceeds received on the
$125,000,000 Equity Issuance Date or the $150,000,000 Equity Issuance Date,
55% of the Net Cash Proceeds thereof, and (y) otherwise, 75% of the Net
3
Cash Proceeds thereof, 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."
(b) The first sentence of Subsection 2.10(c) of the Credit Agreement
is hereby amended by deleting the proviso contained therein in its entirety
and substituting in lieu thereof the following new proviso:
"PROVIDED that if the Consolidated Debt-to-Capitalization Ratio as of
the last day of the fiscal year immediately prior to such Excess Cash Flow
Application Date shall be less than 60%, the Borrower shall be required to
apply only 50% of such Excess Cash Flow toward such prepayment of the Term
Loans."
Section 4. AMENDMENT TO SUBSECTION 6.12 (INTEREST RATE PROTECTION
COVENANT). Subsection 6.12 of the Credit Agreement is hereby amended by deleting
therefrom the introductory phrase "Within 180 days after the Closing Date" and
substituting in lieu thereof the phrase "On or prior to May 15, 1999".
Section 5. 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 (I.E, without giving
effect to Section 5 of this Amendment) EXCEPT that the amendment contained in
Section 2(a) hereof shall be deemed to be in effect on April 7, 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 $125,000,000 Equity Issuance Date or the $150,000,000 Equity
Issuance Date shall have occurred, in which case the following
clause (ii) or (iii), respectively, shall apply), (ii) under the
column headed "$125,000,000 Issuance" below, if the $125,000,000
Equity Issuance Date shall have occurred, or (iii) under the
4
column headed "$150,000,000 Issuance" below, if the $150,000,000
Equity Issuance Date shall have occurred:
Consolidated Debt-to-Capitalization Ratio
$125,000,000 $150,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 90.0% 78.0% 75.0%
September 30, 1999 90.0% 78.0% 75.0%
December 31, 1999 90.0% 78.0% 75.0%
March 31, 2000 90.0% 78.0% 75.0%
June 30, 2000 78.0% 78.0% 75.0%
September 30, 2000 78.0% 78.0% 75.0%
December 31, 2000 78.0% 78.0% 75.0%
March 31, 2001 78.0% 78.0% 75.0%
June 30, 2001 78.0% 78.0% 75.0%
September 30, 2001 76.0% 75.0% 72.5%
December 31, 2001 76.0% 75.0% 72.5%
March 31, 2002 76.0% 75.0% 72.5%
June 30, 2002 76.0% 75.0% 72.5%
September 30, 2002 72.5% 72.5% 70.0%
December 31, 2002 72.5% 72.5% 70.0%
March 31, 2003 72.5% 72.5% 70.0%
June 30, 2003 72.5% 72.5% 70.0%
September 30, 2003 72.5% 72.5% 70.0%
December 31, 2003 70.0% 70.0% 65.0%
March 31, 2004 70.0% 70.0% 65.0%
June 30, 2004 70.0% 70.0% 65.0%
September 30, 2004 70.0% 70.0% 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
$125,000,000 Equity Issuance Date or the $150,000,000 Equity Issuance
Date shall have occurred, in which case the following clause (ii) or
(iii), respectively, shall apply), (ii) under the column headed
"$125,000,000 Issuance" below, if the $125,000,000 Equity Issuance
Date shall have occurred, or (iii) under the column headed
"$150,000,000 Issuance" below, if the $150,000,000 Equity Issuance
Date shall have occurred:
5
Consolidated Interest Coverage Ratio
$125,000,000 $150,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 1.25 to 1.00 1.35 to 1.00 1.35 to 1.00
September 30, 1999 1.15 to 1.00 1.20 to 1.00 1.20 to 1.00
December 31, 1999 1.20 to 1.00 1.35 to 1.00 1.35 to 1.00
March 31, 2000 1.40 to 1.00 1.45 to 1.00 1.45 to 1.00
June 30, 2000 1.50 to 1.00 1.75 to 1.00 1.75 to 1.00
September 30, 2000 1.75 to 1.00 1.75 to 1.00 1.75 to 1.00
December 31, 2000 1.75 to 1.00 1.75 to 1.00 1.75 to 1.00
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 2.00 to 1.00 2.25 to 1.00
December 31, 2001 2.25 to 1.00 2.25 to 1.00 2.50 to 1.00
March 31, 2002 2.50 to 1.00 2.50 to 1.00 2.75 to 1.00
June 30, 2002 2.50 to 1.00 2.50 to 1.00 2.75 to 1.00
September 30, 2002 2.50 to 1.00 2.50 to 1.00 3.00 to 1.00
December 31, 2002 2.75 to 1.00 2.75 to 1.00 3.25 to 1.00
March 31, 2003 3.00 to 1.00 3.00 to 1.00 3.50 to 1.00
June 30, 2003 3.00 to 1.00 3.00 to 1.00 3.50 to 1.00
September 30, 2003 3.00 to 1.00 3.00 to 1.00 3.50 to 1.00
December 31, 2003 3.00 to 1.00 3.00 to 1.00 3.50 to 1.00
March 31, 2004 3.00 to 1.00 3.00 to 1.00 3.50 to 1.00
June 30, 2004 3.00 to 1.00 3.00 to 1.00 3.50 to 1.00
September 30, 2004 3.00 to 1.00 3.00 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 $125,000,000 Equity Issuance Date or the $150,000,000
Equity Issuance Date shall have occurred, in which case the following
clause (ii) or (iii), respectively, shall apply), (ii) under the column
headed "$125,000,000 Issuance" below, if the $125,000,000 Equity Issuance
Date shall have occurred, or (iii) under the column headed "$150,000,000
6
Issuance" below, if the $150,000,000 Equity Issuance Date shall have
occurred::
Consolidated Senior Leverage Ratio
$125,000,000 $150,000,000
Date Base Case Issuance Issuance
---- --------- -------- --------
June 30, 1999 6.00 to 1.00 4.75 to 1.00 4.50 to 1.00
September 30, 1999 6.00 to 1.00 4.75 to 1.00 4.50 to 1.00
December 31, 1999 6.00 to 1.00 4.50 to 1.00 4.25 to 1.00
March 31, 2000 4.75 to 1.00 4.00 to 1.00 3.75 to 1.00
June 30, 2000 3.50 to 1.00 3.50 to 1.00 3.25 to 1.00
September 30, 2000 3.25 to 1.00 3.25 to 1.00 2.75 to 1.00
December 31, 2000 3.00 to 1.00 3.00 to 1.00 2.50 to 1.00
March 31, 2001 2.75 to 1.00 2.75 to 1.00 2.50 to 1.00
June 30, 2001 2.75 to 1.00 2.75 to 1.00 2.25 to 1.00
September 30, 2001 2.25 to 1.00 2.25 to 1.00 2.00 to 1.00
December 31, 2001 2.25 to 1.00 2.25 to 1.00 2.00 to 1.00
March 31, 2002 2.25 to 1.00 2.25 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 from clause (i)(x) of Subsection 7.1(d) the reference
to "$135,000,000" and substituting in lieu thereof a reference to
"$110,000,000".
(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:
7
Consolidated
Date EBITDA
---- ------
June 30, 1999 $85,000,000
September 30, 1999 $80,000,000
December 31, 1999 $85,000,000
March 31, 2000 $105,000,000
June 30, 2000 $115,000,000
September 30, 2000 $120,000,000
December 31, 2000 $125,000,000
March 31, 2001 $130,000,000
June 30, 2001 $135,000,000
September 30, 2001 $140,000,000
December 31, 2001 $145,000,000
March 31, 2002 $150,000,000
June 30, 2002 $150,000,000
September 30, 2002 $150,000,000
December 31, 2002 $150,000,000
March 31, 2003 $150,000,000
June 30, 2003 $150,000,000
September 30, 2003 $150,000,000
December 31, 2003 $150,000,000
March 31, 2004 $150,000,000
June 30, 2004 $150,000,000
September 30, 2004 $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."
8
Section 6. AMENDMENTS TO SUBSECTION 7.7 (LIMITATION ON RESTRICTED
PAYMENTS). Subsection 7.7 of the Credit Agreement is hereby amended as follows:
(a) by deleting clause (a) thereof in its entirety and redesignating
the existing clauses (b) and (c) thereof as the new clauses (a) and (b),
respectively; and
(b) by deleting clause (iii) from the proviso contained therein and
inserting in lieu thereof the following new clause (iii):
"(iii) after giving PRO FORMA effect to such payment and conversion as
if it had occurred on the last day of the most recently ended fiscal
quarter, the Consolidated Debt-to-Capitalization Ratio would not
exceed 40%."
Section 7. AMENDMENT TO SUBSECTION 7.10 (LIMITATION ON OPTIONAL
PAYMENTS AND MODIFICATIONS, ETC.). Subsection 7.10 of the Credit Agreement is
hereby amended by deleting the first proviso contained therein and inserting in
lieu thereof the following new proviso:
"PROVIDED that the Borrower may not repurchase, redeem or defease
such Convertible Subordinated Debentures at any time when the
Consolidated Debt-to-Capitalization Ratio is or, after giving effect
to such repurchase or redemption, would be, greater than 50%."
Section 8. DELETION OF ANNEX II TO CREDIT AGREEMENT (PRICING GRID B).
Annex II to the Credit Agreement is hereby deleted in its entirety.
Section 9. AMENDMENT TO ANNEX I TO CREDIT AGREEMENT (PRICING GRID A).
Annex I to the Credit Agreement is hereby amended by deleting such Annex I in
its entirety and substituting in lieu thereof Annex I to this Amendment.
Section 10. 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 11. 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
9
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 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.
10
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
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
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/ 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 Credit 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 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/ Xxx Xxxxxxxx
--------------------------------
Title:
--------------------------------
MERRILL SENIOR FLOATING RATE
FUND, INC.
By: /s/ Xxx Xxxxxxxx
--------------------------------
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
Annex I
PRICING GRID
==================================================================================================================================
REVOLVING LOANS
==================================================================================================================================
Level Pricing Ratio Applicable Margin for Loans Applicable Margin for Loans Commitment
which are Eurodollar Loans which are Base Rate Loans Fee Rate
----------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 3.0 to 1.0 2.25 0.75 0.25
----------------------------------------------------------------------------------------------------------------------------------
II greater than 3.0 to 1.0 but less 2.50 1.00 0.375
than or equal to 3.5 to 1.0
----------------------------------------------------------------------------------------------------------------------------------
III greater than 3.5 to 1.0 but less 2.75 1.25 0.375
than or equal to 4.0 to 1.0
----------------------------------------------------------------------------------------------------------------------------------
IV greater than 4.0 to 1.0 but less 3.00 1.50 0.50
than or equal to 4.5 to 1.0
----------------------------------------------------------------------------------------------------------------------------------
V greater than 4.5 to 1.0 but 3.25 1.75 0.50
less than or equal to 5.0 to 1.0
----------------------------------------------------------------------------------------------------------------------------------
VI greater than 5.0 to 1.0 3.50 2.00 0.50
==================================================================================================================================
==================================================================================================================================
TRANCHE A TERM LOANS
==================================================================================================================================
Level Pricing Ratio Applicable Margin for Loans Applicable Margin for Loans Commitment
which are Eurodollar Loans which are Base Rate Loans Fee Rate
----------------------------------------------------------------------------------------------------------------------------------
I less than or equal to 3.0 to 1.0 2.25 0.75 0.25
----------------------------------------------------------------------------------------------------------------------------------
II greater than 3.0 to 1.0 but less 2.50 1.00 0.375
than or equal to 3.5 to 1.0
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III greater than 3.5 to 1.0 but less 2.75 1.25 0.375
thank or equal to 4.0 to 1.0
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IV greater than 4.0 to 1.0 but less 3.00 1.50 0.50
than or equal to 4.5 to 1.0
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V greater than 4.5 to 1.0 but less 3.25 1.75 0.50
than or equal to 5.0 to 1.0
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VI greater than 5.0 to 1.0 3.50 2.00 0.50
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TRANCHE B TERM LOANS
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Level Pricing Ratio Applicable Margin for Loans Applicable Margin for Loans Commitment
which are Eurodollar Loans which are Base Rate Loans Fee Rate
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I less than or equal to 3.0 to 1.0 4.00 2.50 0.25
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II greater than 3.0 to 1.0 but less 4.00 2.50 0.375
than or equal to 3.5 to 1.0
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III greater than 3.5 to 1.0 but less 4.00 2.50 0.375
thank or equal to 4.0 to 1.0
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IV greater than 4.0 to 1.0 but less 4.00 2.50 0.50
than or equal to 4.5 to 1.0
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V greater than 4.5 to 1.0 but less 4.00 2.50 0.50
than or equal to 5.0 to 1.0
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VI greater than > 5.0 to 1.0 4.00 2.50 0.50
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