$240,000 August 3, 1999
PROMISSORY NOTE
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FOR VALUE RECEIVED, the undersigned, THOMAS K. GRUNDMAN ("MAKER"), who
currently resides at 106 Sherbourne Drive, McMurray, PA 15217 (the "MCMURRAY
RESIDENCE") promises to pay to KEY ENERGY SERVICES, INC., a Maryland
corporation, with its address at Two Tower Center, 20th Floor, East
Brunswick, N.J. 08816 ("PAYEE"), principal in the aggregate amount of
$240,000, with interest accruing at 6L% per annum in accordance with the
terms of this Note.
Maker hereby agrees to be bound by all the terms contained in this Note.
1. PAYMENT DATE AND INSTRUCTIONS. Payment of the principal balance
outstanding under this Note together with all interest thereon accruing
through the date of such payment shall be made on the earlier of (i) the date
of the closing of Maker's sale of the McMurray Residence (or within five days
thereafter), (ii) the date on which the Maker's employment relationship with
the Payee pursuant to that certain Employment Agreement dated as of July 1,
1999 between Maker and Payee (the "Employment Agreement") is terminated
either (A) by the Maker for any reason other than Good Reason (as defined in
the Employment Agreement) or (B) by the Payee for Cause (as defined in the
Employment Agreement), (or within five days thereafter) or (iii) January 1,
2000. Payment upon this Note shall be made in immediately available funds
and in lawful currency of the United States of America by check or checks
payable to Payee at the address set forth in the first paragraph hereof or by
wire transfer in accordance with wire tra
2. PREPAYMENT. This Note may be prepaid by the Maker, in whole or in
part, at any time without premium or penalty.
3. RIGHTS OF PAYEE UNAFFECTED BY EXTENSIONS. No delay or omission on
the part of Payee in exercising any right hereunder shall operate as a waiver
of such right or of any other right of Payee, nor shall any delay, omission
or waiver on any one occasion be deemed a bar to or waiver of the same or any
other right on any other occasion. No single or partial exercise by Payee of
any power hereunder shall preclude any other or future exercise thereof or
the exercise of any other power.
4. EVENTS OF DEFAULT. Each of the following shall constitute an event
of default hereunder:
a. If Maker fails to render payment of interest and principal
under this Note when such payment is due and payable if such default shall
continue unremedied for ten (10) days;
b. If Maker makes an assignment for the benefit of creditors or
admits his inability to pay his debts generally as they become due; or
c. If any action or proceeding is commenced by or against Maker
under the Federal Bankruptcy Act or under any other present or future state
or Federal law for the relief of debtors or for the appointment of a receiver
or trustee or the issuance of an attachment of substantially all the assets
of Maker, and is not stayed, satisfied or discharged within sixty (60) days.
Upon the occurrence of any such Event of Default, Payee may (unless all
defaults shall theretofore have been remedied) at its option declare this
Note to be immediately due and payable, and the entire unpaid balance of this
Note then outstanding shall be and become immediately due and payable without
presentment, demand, protest or other notice of any kind (all of which are
hereby expressly waived by Maker) and Payee may exercise any and all rights
and remedies under this Note and may proceed to protect and enforce its
rights under this Note and/or applicable law, by action at law, in equity, or
other appropriate proceeding. Following a demand for payment hereunder,
interest will be assessed on the outstanding principal and interest at a rate
of 8 1/8% per annum, and such default rate of interest shall also be charged
on the amounts owed by the Maker to the Payee pursuant to any judgments
entered in favor of Payee pursuant to this Note.
5. PAYMENT BY MAKER OF COSTS OF COLLECTION. Maker shall pay on demand
of Payee all reasonable out-of-pocket costs of collection, including
reasonable attorneys' fees, incurred by Payee in enforcing collection of this
Note on default.
6. AMENDMENT. No provision of this Note shall be modified except by a
written instrument executed by Maker and by Payee expressly referring to this
Note and to the provision modified.
7. BINDING EFFECT; ASSIGNMENT. This Note shall be binding upon Maker
and Payee and their respective successors and assigns. Neither Maker nor
Payee shall have any right to assign any rights or obligations hereunder
without the prior written consent of the other party hereto.
8. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW JERSEY (WITHOUT REGARD TO THE
CHOICE OF LAW RULES THEREOF).
9. JURISDICTION AND VENUE. MAKER AGREES TO THE JURISDICTION OF ANY
DISTRICT OR FEDERAL COURT WITHIN THE STATE OF NEW JERSEY, AND WAIVES ANY
OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER.
10. Judicial Proceedings; Waivers. THE MAKER AND THE PAYEE ACKNOWLEDGE
AND AGREE THAT (i) ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR
COUNTERCLAIM, BROUGHT OR INSTITUTED BY THE PAYEE OR THE MAKER OR ANY
SUCCESSOR OR ASSIGN OF THE PAYEE OR THE MAKER, ON OR WITH RESPECT TO THIS
NOTE OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO, OR THERETO, SHALL BE
TRIED ONLY BY A COURT AND NOT BY A JURY AND EACH PARTY WAIVES THE RIGHT TO
TRIAL BY JURY; (ii) EACH WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN
ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; AND (iii) THIS SECTION 10 IS A SPECIFIC AND MATERIAL ASPECT OF THIS
NOTE AND THE PAYEE WOULD NOT EXTEND CREDIT TO THE MAKER IF THE WAIVERS SET
FORTH IN THIS SECTION WERE NOT A PART OF THIS NOTE.
11. SEVERABILITY OF PROVISIONS. The provisions of this Note are hereby
declared to be severable, and if any provision or the application of any
provision to any entity or in any circumstances shall be held to be invalid
or unconstitutional, such invalidity or unconstitutionality shall not be
construed to affect the validity or constitutionality of any of the remaining
provisions as applied to entities, or in circumstances, other than those as
to which it is held invalid.
IN WITNESS WHEREOF, this Note has been duly executed by Maker as of the
date first above written.
By: /s/ Thomas K. Grundman
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Thomas K. Grundman