FIRST AMENDMENT TO CREDIT AGREEMENT
FIRST AMENDMENT, dated as of December 3, 1997 (this "Amendment"), to the Amended
and Restated Credit Agreement, dated as of June 6, 1997, as amended and restated
through November 6, 1997 (the "Credit Agreement"), among Key Energy Group, Inc.,
a Maryland corporation (the "Borrower"), the several Lenders from time to time
parties thereto, PNC Bank, National Association, as Administrative Agent and
Norwest Bank Texas, N.A., as Collateral Agent.
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the Collateral
Agent are parties to the Credit Agreement;
WHEREAS, the Borrower has requested that the Lenders increase the aggregate
amount of the Commitments under the Credit Agreement to $250,000,000 and to
amend certain terms in the Credit Agreement in the manner provided for herein;
and
WHEREAS, the Administrative Agent and the Lenders are willing to agree to
increase the aggregate amount of the Commitments under the Credit Agreement to
$250,000,000 and are willing to agree to the requested amendments;
NOW THEREFORE, in consideration of the premises and mutual covenants hereinafter
set forth, the parties hereto hereby agree as follows:
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.
2. Assignment and Transfer; Increase in Commitments; Amendment to Schedule 1.1;
Joinder of Lenders. (a) PNC Bank, National Association, the "Transferor Lender")
hereby irrevocably sells, assigns and transfers to each Purchasing Lender
identified on Schedule I hereto (each a "Purchasing Lender" and collectively,
the "Purchasing Lenders") without recourse to the Transferor Lender, and each
Purchasing Lender hereby irrevocably purchases and assumes from the Transferor
Lender without recourse to the Transferor Lender, as of the First Amendment
Effective Date (as defined below), the interests described in Schedule I hereto
in and to the Transferor Lender's rights and obligations under the Credit
Agreement with respect to those credit facilities contained in the Credit
Agreement as are set forth on Schedule I hereto, such that after giving effect
to such sale, assignment and transfer, the Commitments and the Commitment
Percentages of the Transferor Lender and the Purchasing Lenders shall be as set
forth on Exhibit A hereto.
(b) The Transferor Lender (i) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that such Transferor Lender has
not created any adverse claim upon the interest being assigned by it hereunder
and that such interest is free and clear of any such adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, any of its Subsidiaries or any other
obligor or the performance or observance by the Borrower, any of its
Subsidiaries or any other obligor of any of their respective obligations under
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (iii) attaches the Note held
by it and (A) requests that the Administrative Agent, upon request by any
Purchasing Lender, exchange the attached Note for a new Note payable to such
Purchasing Lender in the aggregate face amount of its Commitment as set forth on
Exhibit A hereto and (B) requests that the Administrative Agent exchange the
attached Note for a new Note payable to the Transferor Lender, in an amount
which reflects the assignments being made hereby.
(c) Each Purchasing Lender (i) represents and warrants that it is legally
authorized to enter into this Amendment; (ii) confirms that it has received a
copy of the Credit Agreement, together with copies of the financial statements
referred to in subsection 4.1 or delivered pursuant to subsection 6.1 thereof
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Amendment; (iii) agrees
that it will, independently and without reliance upon the Transferor Lender, the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (iv) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; and (v) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
2.16(b) of the Credit Agreement.
(d) In connection with the foregoing assignments and transfers and subject to
the terms and conditions hereof, the Borrower, the Transferor Lender, the
Purchasing Lenders and the Administrative Agent hereby agree that the
Commitments of the Lenders shall be increased, on and as of the First Amendment
Effective Date and subject to the terms and conditions hereof and of the Credit
Agreement, to $250,000,000 and, in order to effect such increase in the
Commitments, the Borrower, the Transferor Lender, the Purchasing Lenders and the
Administrative Agent hereby agree that Schedule 1.1A to the Credit Agreement
shall be amended by deleting such Schedule in its entirety and substituting in
lieu thereof a new Schedule to read in its entirety as set forth in Exhibit A
hereto.
(e) All principal payments that would otherwise be payable from and after the
First Amendment Effective Date to or for the account of the Transferor Lender
and the Purchasing Lenders pursuant to the Credit Agreement and the Notes shall,
instead, be payable to or for the account of the Transferor Lender and the
Purchasing Lenders in accordance with their respective interests as reflected in
Exhibit A hereto.
(f) All interest, fees and other amounts that would otherwise accrue for the
account of the Transferor Lender and the Purchasing Lenders from and after the
First Amendment Effective Date shall, instead, accrue for the account of, and be
payable to, the Transferor Lender and the Purchasing Lenders in accordance with
their respective interests as reflected in Exhibit A hereto.
(g) The Transferor Lender and Purchasing Lenders hereby confirm and agree that,
from and after the First Amendment Effective Date, all participation of the
Lenders in respect of Letters of Credit pursuant to subsection 3.4(a) shall be
based upon the Commitment Percentages of the Lenders as reflected in Exhibit A
hereto.
(h) Each of the Transferor Lender and Purchasing Lenders agrees that, at any
time and from time to time upon the written request of the other Transferor
Lender or any other Purchasing Lender, it will execute and deliver such further
documents and do such further acts and things as such other party may reasonably
request in order to effect the sale, assignment and transfer set forth in this
Section 2.
(i) From and after the First Amendment Effective Date, (a) each Purchasing
Lender shall be a party to the Credit Agreement and, to the extent provided in
this Amendment, have the rights and obligations of a Lender thereunder and under
the other Loan Documents and shall be bound by the provisions thereof and (b)
the Transferor Lender shall, to the extent provided in this Amendment,
relinquish its rights and be released from its obligations under the Credit
Agreement.
3. Amendment of Subsection 1.1. Subsection 1.1 of the Credit Agreement is hereby
amended as follows:
(a) by adding the following new definition in the proper alphabetical order:
"First Amendment Effective Date": December 3, 1997.
(b) by deleting clause (i) (x) in the proviso to the definition of "Permitted
Acquisitions" and substituting in lieu thereof the following clause:
(x) the Consolidated Leverage Ratio shall not be more than the lesser of 3.75 to
1.00 or the ratio set forth in subsection 7.1(a) applicable to the Borrower at
the time of such acquisition.
4. Amendment of Subsection 2.7. Subsection 2.7 of the Credit Agreement is hereby
amended by deleting the words "Section 7.6(e)" in paragraph (c) thereof, and
substituting in lieu thereof the words: "Section 7.6(d)".
5. Amendment of Subsection 2.9. Subsection 2.9 of the Credit Agreement is hereby
amended by inserting the word "time" at the end of such subsection.
6. Amendment of Subsection 2.17. Subsection 2.17 of the Credit Agreement is
hereby amended by inserting at the end of clause (c) of such subsection the
following phrase:
, or the assignment of any Eurodollar Loan on a day which is not the last day of
an Interest Period with respect thereto as a result of the replacement of a
Lender pursuant to Subsection 2.20.
7. Amendment of Subsection 7.5. Subsection 7.5 of the Credit Agreement is hereby
amended by deleting the words "Section 2.9(c)" in paragraph (c) thereof, and
substituting in lieu thereof the phrase: "Section 2.7(c), to the extent
applicable".
8. Amendment of Subsection 7.10. Subsection 7.10 of the Credit Agreement is
hereby amended by deleting in its entirety the exception appearing immediately
before the proviso therein, and substituting in lieu thereof the following
exception:
except that, after 90% of the original outstanding principal amount of
Convertible Subordinated Debentures have been converted into common stock of the
Borrower, the Borrower may, at any time when no Default or Event of Default has
occurred and is continuing, repurchase or redeem the remaining outstanding
Convertible Subordinated Debentures and, after 90% of the original outstanding
principal amount of 1997 Convertible Subordinated Notes have been converted into
common stock of the Borrower, the Borrower may, at any time when no Default or
Event of Default has occurred and is continuing, repurchase or redeem the
remaining outstanding 1997 Convertible Subordinated Notes;
9. Waiver of Subsection 10.6(f). In connection with the assignments and
transfers effected by Section 2 hereof, the Administrative Agent and the Lenders
hereby waive compliance by the Transferor Lender and the Purchasing Lenders with
the requirements of subsection 10.6(f) of the Credit Agreement to the extent and
only to the extent that such subsection would require the payment of a
registration and processing fee in connection such assignments and transfers.
10. Conditions to Effectiveness of this Amendment. The effectiveness of this
Amendment is subject to the satisfaction of the following conditions precedent:
(a) Amendment. The Administrative Agent shall have received this Amendment,
executed and delivered by a duly authorized officer of the Borrower, the
Transferor Lender and each of the Purchasing Lenders set forth on Schedule I
hereto and (ii) the attached Acknowledgement and Consent, executed and delivered
by a duly authorized officer of each of the signatories thereto.
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on the date hereof or after giving effect to the amendment
contemplated hereby.
(c) Representations and Warranties. Except to the extent that they are made as
of a specific date, each of the representations and warranties made by any Loan
Party in or pursuant to the Loan Documents shall be true and correct in all
material respects on and as of the date hereof as if made on and as of the date
hereof.
(d) Corporate Proceedings of Loan Parties. The Administrative Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions of the
Board of Directors of each Loan Party authorizing (i) the execution, delivery
and performance of this Amendment, and (ii) in the case of the Borrower, the
borrowings contemplated hereunder, certified by its Secretary or Assistant
Secretary as of the First Amendment Effective Date, which certificate shall
state that the resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate.
. The Administrative Agent shall have received, with a copy for each
Lender, a certificate of the Secretary or an Assistant Secretary of each
Loan Party dated the First Amendment Effective Date, as to the incumbency
and signature of the officers of each Loan Party executing this Amendment,
together with evidence of the incumbency of such Secretary or Assistant
Secretary.
11. Miscellaneous.
(a) Effect. Except as expressly amended hereby, all of the representations,
warranties, terms, covenants and conditions of the Loan Documents shall remain
unamended and not waived and shall continue to be in full force in effect.
(b) Counterparts. This Amendment may be executed by one or more of the parties
to this Amendment on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument. A set of the copies of this Amendment
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.
(c) Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(d) Integration. This Amendment and the other Loan Documents represent the
agreement of the Loan Parties, the Administrative Agent, the Collateral Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent, the Collateral Agent or any Lender relative to the subject matter hereof
not expressly set forth or referred to herein or in the other Loan Documents.
(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 GROUP, INC.
By: /s/ Stephen E. McGregor
Title: Executive Vice President
PNC BANK, NATIONAL ASSOCIATION
as Administrative Agent and as the
Transferor Lender
By: /s/ Thomas A. Majeski
Title: Vice President
NORWEST BANK TEXAS, N.A.
as Collateral Agent and as a
Purchasing Lender
By: /s/ Mark D. McKinney
Title: Senior Vice President
THE BANK OF NEW YORK, as a
Purchasing Lender
By: /s/ Catherine G. Goff
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT, as a
Purchasing Lender
By: /s/ Paul Travers
Title: Vice President
By: /s/ John Sykes
Title: Assistant Vice President
CREDIT LYONNAIS NEW YORK BRANCH, as a
Purchasing Lender
By: /s/ Philipe Soustra
Title: Senior Vice President
HIBERNIA NATIONAL BANK, as a Purchasing
Lender
By: /s/ Byron P. Kives
Title: Assistant Vice President
LEHMAN COMMERCIAL PAPER INC.,
as a Purchasing Lender
By: /s/ Michele Swanson
Title: Authorized Signatory
COMMERCIAL LOAN FUNDING TRUST I,
as a Purchasing Lender
By: LEHMAN COMMERCIAL PAPER INC., not in its individual
capacity but solely as Administrative Agent
By: /s/ Michele Swanson
Title: Authorized Signatory
BANK ONE, TEXAS, N.A., as a Purchasing Lender
By: /s/ W.M. Mark Crammer
Title: Vice President
CORESTATES BANK, N.A., as a Purchasing Lender
By: /s/ Laura J. Rowley
Title: Assistant Vice President
DEN NORSKE BANK ASA, as a Purchasing Lender
By: /s/ Charles E. Hall
Title: Senior Vice President
By: /s/ Byron L. Cooley
Senior Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as a Purchasing Lender
By: /s/ George R. Schanz
Title: Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.,
as a Purchasing Lender
By: /s/ John Urban
Title: Authorized Signatory
FUJI BANK, as a Purchasing Lender
By: /s/ Kenichi Tatara
Title: Vice President & Manager
THE BANK OF NOVA SCOTIA, as a Purchasing Lender
By: /s/ F.C.H. Ashby
Title: Senior Manager Loan Operations
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned corporations, as a guarantor under that certain Master
Guarantee and Collateral Agreement, dated as of June 6, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Guarantee"), made by
each of such corporations in favor of the Collateral Agent, 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 Agreement) 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 Acknowledgement and Consent is attached.
YALE E. KEY, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
WELLTECH EASTERN, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
TST PARAFFIN SERVICE COMPANY, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
KEY ENERGY DRILLING, INC.
d/b/a CLINT HURT DRILLING
By: /s/ Stephen E. McGregor
Title: Vice President
KALKASKA OILFIELD SERVICES, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
ODESSA EXPLORATION INCORPORATED
By: /s/ Stephen E. McGregor
Title: Vice President
PHOENIX WELL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
WELL-CO OIL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
PATRICK WELL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
MOSLEY WELL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
RAM OILWELL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
ROWLAND TRUCKING CO., INC.
By: /s/ Stephen E. McGregor
Title: Vice President
LANDMARK FISHING & RENTAL, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
BRW DRILLING, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
DUNBAR WELL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
FRONTIER WELL SERVICE, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
KEY ROCKY MOUNTAIN, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
KEY FOUR CORNERS, INC.
By: /s/ Stephen E. McGregor
Title: Vice President
SCHEDULE I TO
FIRST AMENDMENT
TRANSFERS
Purchasing Lenders Commitment Assigned Loan Assigned L/C Participations
Assigned
Credit Lyonnais
New York Branch $22,500,000 $6,480,000 $100,054.17
Hibernia National
Bank $22,500,000 $6,480,000 $100,054.17
The Bank of New York $19,500,000 $5,616,000 $86,713.61
BHF-BANK
Aktiengellschaft $19,500,000 $5,616,000 $86,713.61
The First National
Bank of Chicago $19,500,000 $5,616,000 $86,713.61
Goldman Sachs
Credit Partners L.P. $19,500,000 $5,616,000 $86,713.61
The Fuji Bank, Ltd. $19,500,000 $5,616,000 $86,713.61
The Bank of
Nova Scotia $13,750,000 $3,960,000 $61,144.22
Bank One,
Texas, N.A. $13,750,000 $3,960,000 $61,144.22
Corestates Bank, N.A. $13,750,000 $3,960,000 $61,144.22
Den norske Bank ASA $13,750,000 $3,960,000 $61,144.22
Commercial Loan
Funding Trust I $10,000,000 $2,880,000 $44,468.52
Lehman Commercial
Paper Inc. $ 3,750,000 $1,080,000 $16,175.70
Norwest Bank
Texas, N.A. $13,750,000 $3,960,000 $61,144.22
Total $225,000,000 $64,800,000 $1,000,541.71
EXHIBIT A TO
FIRST AMENDMENT
Schedule 1.1
Commitments; Lending Offices and Addresses
Bank Commitment Commitment Percentage
PNC Bank $25,000,000 10.00%
249 Fifth Avenue
Pittsburgh, Pennsylvania 15222-2707
Attention: Mr. Thomas Majeski
Telecopy: (412) 762-2571
Telephone: (412) 762-2431
Credit Lyonnais New York Branch $22,500,000 9.00%
c/o its representative office at:
1000 Louisiana, Suite 5360
Houston, TX 77002
Attention: Tom Byargeon
Telecopy: (713) 751-0307
Telephone: (713) 753-8706
Hibernia National Bank $22,500,000 9.00%
313 Carondelet Street
Suite 1300
New Orleans, LA 70130
Attention: Byron Kives
Telecopy: (504) 533-5464
Telephone: (504) 533-6425
The Bank of New York $19,500,000 7.80%
Energy Industries Division
One Wall Street, 19th Floor
New York, NY 10286
Attention: Catherine Goff
Telecopy: (212) 635-7923/7924
Telephone: (212) 635-7889
BHF-BANK Aktiengellschaft $19,500,000 7.80%
590 Madison Avenue
New York, NY 10022-2540
Attention: Paul Travers
Telecopy: (212) 756-5536
Telephone: (212) 756-5570
The First National Bank of Chicago $19,500,000 7.80%
One First National Plaza
Mail Suite 0362
Chicago, IL 60670-0362
Attention: George Schanz
Telecopy: (312) 732-3055
Telephone: (312) 732-1214
Goldman Sachs Credit Partners L.P. $19,500,000 7.80%
85 Broad Street
New York, N.Y. 10004
Attention: Edmund Kearns
Telecopy: (212) 357-0271
Telephone: (212) 902-4109
The Fuji Bank, Ltd. $19,500,000 7.80%
1 Houston Center
Suite 4100
Houston, TX 77010
Attention: Mark Polasek
Telecopy: (713) 759-0048
Telephone: (713) 650-7863
The Bank of Nova Scotia $13,750,000 5.50%
1100 Louisiana Street
Suite 3000
Houston, TX 77002
Attention: Jamie Conn
Telecopy: (713) 752-2425
Telephone: (713) 759-3426
Bank One, Texas, N.A. $13,750,000 5.50%
1717 Main Street
Dallas, TX 75201
Attention: Wm. Mark Cranmer
Telecopy: (214) 290-2627
Telephone: (214) 290-2212
Corestates Bank, N.A. $13,750,000 5.50%
1345 Chestnut Street
FC 1-8-3-14
Philadelphia, PA 19106
Attention: Melissa Landay
Telecopy: (215) 973-7820
Telephone: (215) 973-8276
Den norske Bank ASA $13,750,000 5.50%
Three Allen Center
333 Clay Street
Suite 4890
Houston, TX 77002
Attention: Byron Cooley
Telecopy: (713) 757-1167
Telephone: (713) 844-9258
Commercial Loan Funding Trust I $10,000,000 4.00%
c/o Texas Commerce National Associates
600 Travis Street - 8th Floor
Houston, TX 77002-8039
Attention: Susan Williams
Telecopy: (713) 216-2101
Telephone: (713) 216-5192
Lehman Commercial Paper Inc. $ 3,750,000 1.50%
3 World Financial Center, 10th Floor
New York, NY 10285
Attention: Michelle Swanson
Telecopy: (212) 528-0819
Telephone: (212) 526-0330
Norwest Bank Texas, N.A. $13,750,000 5.50%
500 West Texas Avenue
Midland, TX 79701
Attention: Mark D. McKinney
Telecopy: 915-685-5441
Telephone: 915-685-5149
Total $250,000,000 100.00%