GUARANTY
The CIT Group/Credit Finance, Inc. 10 South LaSalle Street
Chicago, Illinois 60603
Re: Yale E. Key, Inc., Key Energy Drilling, Inc. d/b/a Clint
Hurt Drilling and WellTech Eastern, Inc. (the "Borrowers")
Ladies and Gentlemen:
Reference is made to the financing arrangements
between The CIT Group/Credit Finance, Inc. ("Lender") and
Borrowers, pursuant to which Lender may extend loans, advances
and other financial accommodations to Borrowers as set forth
in the Third Amended and Restated Loan and Security Agreement
dated of even date herewith between Borrowers and Lender and
various other agreements, documents and instruments now or
at any time executed and/or delivered in connection
therewith or otherwise related thereto, including, but not
limited to, this Guaranty (all of the foregoing, as the same
now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced, being collectively
referred to herein as the "Financing Agreements").
Due to the close business and financial relationships
between Borrowers and the undersigned ("Guarantor"), in
consideration of the benefits which will accrue to Guarantor,
and as an inducement for and in consideration of Lender at any
time providing or extending loans, advances and other
financial accommodations to Borrowers, whether pursuant to
the Financing Agreements or otherwise, Guarantor hereby,
irrevocably and unconditionally, (a) guarantees and agrees to be
liable for the prompt indefeasible and full payment and
performance of all revolving loans, term loans, letters of
credit, bankers' acceptances, merchandise purchase
guaranties or other guaranties or indemnities for each
Borrower's account and all other obligations, liabilities and
indebtedness of every kind, nature or description owing by
any Borrower to Lender and/or its affiliates, including
principal, interest, charges, fees and expenses, however
evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether arising under any of the
Financing Agreements or otherwise, whether now existing or
hereafter arising, whether arising before, during or after
the initial or any renewal term of the Financing
Agreements or after the commencement of any case with
respect to any Borrower under the United States Bankruptcy
Code or any similar statute, whether direct or indirect,
absolute or contingent, joint or several, due or not due,
primary or secondary, liquidated or unliquidated, secured or
unsecured, original, renewed or extended, and whether
arising directly or howsoever acquired by Lender including
from any other entity outright, conditionally or as collateral
security, by assignment, merger with any other entity,
participations or interests of Lender in the obligations of
Borrowers to others, assumption, operation of law, subrogation
or otherwise and (b) agrees to pay to Lender on demand the
amount of all expenses (including, without limitation,
attorneys fees and legal expenses) incurred by Lender in
connection with the preparation, execution, delivery, recording,
administration, collection, liquidation, enforcement and
defense of any Borrower's obligations, liabilities and
indebtedness as aforesaid to Lender, Lender's rights in any
collateral or under this Guaranty and all other Financing
Agreements or in any way involving claims by or against
Lender directly or indirectly arising out of or related to
the relationship between each Borrower and Lender, Guarantor
and Lender, or any other Obligor (as hereinafter defined) and
Lender, whether such expenses are incurred before, during
or after the initial or any renewal term of the Financing
Agreements or after the commencement of any case with
respect to any Borrower, Guarantor or any other Obligor under
the United States Bankruptcy Code or any similar statute (all
of which being collectively referred to herein as the
"Guaranteed Obligations").
Notice of acceptance of this Guaranty, the making of
loans, advances and extensions of credit or other financial
accommodations to, and the incurring of any expenses by or in
respect of, Borrowers, and presentment, demand, protest,
notice of protest, notice of nonpayment or default and all
other notices to which any Borrower or Guarantor are or may
be entitled are hereby waived. Guarantor also waives notice
of, and hereby consents to, (i) any amendment, modification,
supplement, renewal, restatement or extensions of time of
payment of or increase or decrease in the amount of any of
the Guaranteed Obligations or to the Financing Agreements and
any collateral, and the guarantee made herein shall apply to the
Guaranteed Obligations as so amended, modified, supplemented,
renewed, restated or extended, increased or decreased, (ii)
the taking, exchange, surrender and releasing of collateral or
guarantees now or at any time held by or available to Lender for
the obligations of any Borrower or any other party at any
time liable for or in respect of the Guaranteed
Obligations (individually and collectively, the "Obligors"),
(iii) the exercise of, or refraining from the exercise of
any rights against any Borrower, Guarantor or any other
Obligor or any collateral, and (iv) the settlement,
compromise or release of, or the waiver of any default with
respect to, any Guaranteed Obligations. Guarantor agrees
that the amount of the Guaranteed Obligations shall not be
diminished and the liability of Guarantor hereunder shall not
be otherwise impaired or affected by any of the foregoing.
This Guaranty is a guaranty of payment and not of
collection. Guarantor agrees that Lender need not attempt to
collect any Guaranteed Obligations from the Borrowers or any
other Obligor or to realize upon any collateral, but may
require Guarantor to make immediate payment of the Guaranteed
Obligations to Lender when due or at any time thereafter.
Lender may apply any amounts received in respect of the
Guaranteed Obligations to any of the Guaranteed Obligations,
in whole or in part (including reasonable attorneys fees and
legal expenses incurred by Lender with respect thereto or
otherwise chargeable to any Borrower or Guarantor) and in such
order as Lender may elect, whether or not then due.
No invalidity, irregularity or unenforceability of
all or any part of the Guaranteed Obligations shall affect,
impair or be a defense to this Guaranty, nor shall any
other circumstance which might otherwise constitute a defense
available to, or legal or equitable discharge of any Borrower in
respect of any of the Guaranteed Obligations or Guarantor in
respect of this Guaranty, affect, impair or be a defense to
this Guaranty. Without limitation of the foregoing, the
liability of Guarantor hereunder shall not be discharged or
impaired in any respect by reason of any failure by Lender
to perfect or continue perfection of any lien or security
interest in any collateral for the Guaranteed Obligations or
any delay by Lender in perfecting any such lien or security
interest. As to interest, fees and expenses, whether arising
before
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or after the commencement of any case with respect to any
Borrower under the United States Bankruptcy Code or any similar
statute, Guarantor shall be liable therefor, even if any
Borrower's liability for such amounts does not, or ceases to,
exist by operation of law.
This Guaranty is absolute, unconditional and
continuing. Payment by Guarantor shall be made to Lender at
its office from time to time on demand as Guaranteed
Obligations become due. One or more successive or concurrent
actions may be brought hereon against Guarantor either in the
same action in which the Borrowers or any of them, or any other
Obligors are sued or in separate actions.
Payment of all amounts now or hereafter owed to
Guarantor by Borrowers or any other Obligor is hereby
subordinated in right of payment to the indefeasible
payment in full to Lender of the Guaranteed Obligations and
is hereby assigned to Lender as security therefor. Guarantor
hereby irrevocably and unconditionally waives and relinquishes
all surety defenses including, but not limited to, all
statutory, contractual, common law, equitable and all other
claims against each Borrower, any collateral for the Guaranteed
Obligations or other assets of each Borrower or any
other Obligor, for subrogation, reimbursement,
exoneration, contribution, indemnification, setoff or other
recourse in respect of sums paid or payable to Lender by
Guarantor hereunder, and Guarantor hereby further
irrevocably and unconditionally waives and relinquishes any
and all other benefits which Guarantor might otherwise directly
or indirectly receive or be entitled to receive by reason of any
amounts paid by or collected or due from Guarantor, any
Borrower or any other Obligor upon the Guaranteed Obligations or
realized from their property.
All sums at any time owed by Lender to Guarantor or
to the credit of Guarantor and any property of Guarantor on
which Lender at any time has a lien or security interest or of
which Lender at any time has possession, shall secure payment
and performance of all Guaranteed Obligations and all other
obligations of Guarantor to Lender however arising.
In case proceedings be instituted by or against
any Borrower or Guarantor or any other Obligor in
bankruptcy or insolvency, or for reorganization,
arrangement, receivership, or the like, or if any Borrower or
Guarantor or any other Obligor calls a meeting of
creditors or makes any assignment for the benefit of
creditors, or upon the occurrence of any event which
constitutes a default or event of default under the Financing
Agreements, the liability of Guarantor for the entire
Guaranteed Obligations shall mature, even if the liability of
Borrowers or any other Obligor therefor does not.
Guarantor shall continue to be liable hereunder until
one of Lender's officers actually receives a written
termination notice by certified mail; but the giving of such
notice shall not relieve Guarantor from liability for any
Guaranteed Obligations incurred before termination or for
post-termination collection expenses and interest pertaining
to any Guaranteed Obligations arising before termination.
Guarantor agrees that this Guaranty shall remain
in full force and effect or be reinstated, as the case may be,
if at any time payment of any of the Guaranteed Obligations
is rescinded or otherwise restored by Lender to Borrowers or
to any other person, who made such payment, or to the creditors
or creditors representative of Borrowers or such other person.
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Lender's books and records showing the account
between Lender and Borrowers shall be admissible in evidence
in any action or proceeding as prima facie proof of the items
therein set forth, and any written statements rendered by
Lender to Borrowers, to the extent to which no written
objection is made within sixty (60) days after the date
thereof, shall be considered correct and be binding on
Guarantor as an account stated for purposes of this Guaranty.
No delay on Lender's part in exercising any rights
hereunder or failure to exercise the same shall constitute a
waiver of such rights. No notice to, or demand on, Guarantor
shall be deemed to be a waiver of the obligation of
Guarantor to take further action without notice, or demand as
provided herein. No waiver of any of Lender's rights hereunder,
and no modification or amendment of this Guaranty, shall be
deemed to be made by Lender unless the same shall be in writing,
duly signed on Lender's behalf, and each such waiver, if any,
shall apply only with respect to the specific instance
involved and shall in no way impair Lender's rights or the
obligations of Guarantor to Lender in any other respect at any
other time.
This Guaranty is binding upon Guarantor, its successors
and assigns and shall benefit Lender and its successors,
endorses, transferees and assigns. If the undersigned are
more than one, this Guaranty shall be binding jointly and
severally upon them and their respective successors and
assigns and the term "Guarantor" wherever used herein shall
mean all the undersigned and any one or more of them and their
successors and assigns. All references to Borrowers and Lender
herein shall include their respective successors and
assigns. THIS INSTRUMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE IN
WHICH THE OFFICE OF LENDER SET FORTH ABOVE IS LOCATED.
GUARANTOR AND LENDER WAIVE ALL RIGHTS TO TRIAL BY JURY
IN ANY ACTION OR PROCEEDING INSTITUTED BY EITHER OF THEM
AGAINST THE OTHER WHICH PERTAINS DIRECTLY OR INDIRECTLY
TO THIS GUARANTY, ANY ALLEGED TORTIOUS CONDUCT BY GUARANTOR
OR LENDER, OR, IN ANY WAY, DIRECTLY OR INDIRECTLY, ARISING OUT
OF OR RELATED TO THE RELATIONSHIP BETWEEN GUARANTOR AND
LENDER OR BORROWERS AND LENDER. IN NO EVENT WILL LENDER BE
LIABLE FOR LOST PROFITS OR OTHER SPECIAL OR CONSEQUENTIAL
DAMAGES.
Guarantor waives all rights to interpose any
claims, deductions, setoffs or counterclaims of any kind,
nature or description in any action or proceeding instituted
by Lender with respect to this Guaranty or any matter arising
herefrom or relating hereto, except compulsory counterclaims.
GUARANTOR HEREBY IRREVOCABLY SUBMITS AND CONSENTS TO
THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN THE STATE IN WHICH THE OFFICE OF LENDER DESIGNATED
ABOVE IS LOCATED WITH RESPECT TO ANY ACTION OR PROCEEDING
ARISING OUT OF THIS GUARANTY OR ANY MATTER ARISING HEREFROM
OR RELATING HERETO. ANY SUCH ACTION OR PROCEEDING COMMENCED
BY GUARANTOR AGAINST LENDER WILL BE LITIGATED ONLY IN A FEDERAL
COURT LOCATED IN THE DISTRICT, OR A
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STATE COURT IN THE STATE AND COUNTY, IN WHICH THE OFFICE OF
LENDER SET FORTH ABOVE IS LOCATED AND GUARANTOR WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO
VENUE IN CONNECTION THEREWITH.
In any such action or proceeding, Guarantor waives
personal service of the summons and complaint or other process
and papers therein and agrees that any process or notice of
motion or other application to any of said Courts or a judge
thereof, or any notice in connection with any proceedings
hereunder may be served (i) inside or outside such State by
registered or certified mail, return receipt requested,
addressed to Guarantor at the address set forth below or
which Guarantor has previously advised Lender in writing and as
indicated in the records of Lender, and service or notice so
served shall be deemed complete five (5) days after the same
shall have been posted or (ii) in such other manner as may be
permissible under the rules of said Courts.
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Guarantor has executed and
delivered this Guaranty as of the ______ day of May, 1996.
KEY ENERGY GROUP, INC.
a Maryland corporation
By:
Francis D. John
President
Address: 257 Livingstone Avenue
New Brunswick, New Jersey 08901
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STATE OF TEXAS
ss. ss.
COUNTY OF HARRIS ss.
On this ______ day of May, 1996, before me personally
appeared Francis D. John, President of Key Energy Group, Inc., a
Maryland corporation, proved to me to be the person whose name
is subscribed to foregoing instrument, and that he executed
the foregoing instrument as the act and deed, and by the
order of the Board of Directors of said corporation.
Notary Public in and for
The State of Texas
Name (Print):
Commission Expires:
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