Exhibit 10.1





Exhibit 10.1




Execution Version




FIRST AMENDMENT




TO




CREDIT AGREEMENT




dated as of July 27, 2011




among




Key Energy Services, Inc.,

as Borrower,




The Guarantors,




JPMorgan Chase Bank, N.A., 

as Administrative Agent,




Bank of America, N.A.,

as Syndication Agent,




Capital One, N.A.,

Wells Fargo Bank, N.A.,

Credit Agricole Corporate and Investment Bank,

and

DnB NOR Bank ASA,

as Co-Documentation Agents,




and




The Lenders Party Hereto




 


 









 







FIRST AMENDMENT TO CREDIT AGREEMENT




THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”) dated as of July 27,
2011, is among Key Energy Services, Inc., a Maryland corporation (the “Borrower”); each of
the undersigned guarantors (the “Guarantors”, and together with the Borrower, the
“Obligors”); JPMorgan Chase Bank, N.A., as administrative agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”) for the lenders
party to the Credit Agreement referred to below (collectively, the “Lenders”); and the
undersigned Lenders.



R E C I T A L S




A. The Borrower, the Administrative Agent and the Lenders are parties to that certain Credit
Agreement dated as of March 31, 2011 (the “Credit Agreement”), pursuant to which the
Lenders have made certain extensions of credit available to the Borrower.



B. The Guarantors are parties to that certain Guarantee and Collateral Agreement dated as of
March 31, 2011 made by each of the Grantors (as defined therein) in favor of the Administrative
Agent (the “Guaranty”).



C. The Borrower has requested and the Lenders have agreed to amend certain provisions of the
Credit Agreement.



D. NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:



Section 1. Defined Terms. Each capitalized term used herein but not otherwise defined
herein has the meaning given such term in the Credit Agreement. Unless otherwise indicated, all
references to Sections and Articles in this First Amendment refer to Sections and Articles of the
Credit Agreement. As used herein, the term “Amended Credit Agreement” means the Credit Agreement,
as amended by this First Amendment.




Section 2.



2.1 Amendment to Section 2.06(d)(ii)(A). Section 2.06(d)(ii)(A) is hereby amended by
replacing the reference to “$500,000,000” therein with “$650,000,000”.



2.2 Amendments to Section 9.01(d). Section 9.01(d) is hereby amended in its entirety
to read as follows: 



“(d) Capitalization Ratio. The Borrower will not, as of the last day of any fiscal
quarter, allow its ratio of Consolidated Total Funded Indebtedness to Total Capitalization to be
more than the percentage specified for such fiscal quarter as indicated in the table below:



	 	 	 	 	 
	Fiscal Quarter Ending	 	Ratio	 
	June 30, 2011 through March 31, 2012
	 	 	50	%
	June 30, 2012 and September 30, 2012
	 	 	47.5	%
	December 31, 2012 and thereafter
	 	 	45	%





”
 


 









 





2.3 Amendment and restatement of Annex I. Annex I to the Credit Agreement is hereby
amended and restated in its entirety to read as set forth on Annex I attached hereto.



2.4 Co-Documentation Agents. Credit Agricole Corporate and Investment Bank and DnB
NOR Bank ASA are each hereby added to the Credit Agreement as a “Co-Documentation Agent”, and each
reference to the term “Co-Documentation Agents” wherever it appears in the Amended Credit Agreement
shall refer collectively to Capital One, N.A., Wells Fargo Bank, N.A., Credit Agricole Corporate
and Investment Bank, and DnB NOR Bank ASA, in such capacities.



Section 3. Conditions Precedent. This First Amendment shall not become effective
until the date on which each of the following conditions is satisfied (or waived in accordance with
Section 12.02 of the Credit Agreement) (the “Effective Date”):



3.1 The Administrative Agent and the Lenders shall have received all fees and other amounts
due and payable, if any, in connection with this First Amendment on or prior to the Effective Date.



3.2 The Administrative Agent shall have received from the Majority Lenders, the Borrower, and
each of the other Obligors, counterparts (in such number as may be requested by the Administrative
Agent) of this First Amendment signed on behalf of such Persons.



3.3 The Administrative Agent shall have received such other documents as the Administrative
Agent or special counsel to the Administrative Agent may reasonably request.



3.4 No Default shall have occurred and be continuing, after giving effect to the terms of this
First Amendment.



Notwithstanding the foregoing, the amendment and restatement of Annex I to the Credit
Agreement contemplated by Section 2.3 of this First Amendment shall not become effective until the
Commitment Increase Time (as defined below).



Section 4. Miscellaneous.



4.1 Commitment Increase Pursuant to Section 2.06(d).




(a) The Borrower has requested pursuant to Section 2.06(d) of the Amended Credit
Agreement that the aggregate amount of the Commitments be increased to $550,000,000 (the
“Commitment Increase”), effective as of the Effective Date, immediately after giving
effect to the amendments contemplated by this First Amendment (the “Commitment Increase
Time”). In connection with the requested Commitment Increase, the Borrower, JPMorgan
Chase Bank, N.A., Bank of America, N.A., Wells Fargo Bank, N.A., Capital One, N.A., Royal
Bank of Canada, Comerica Bank, Morgan Stanley Bank, N.A., Credit Suisse AG, Cayman Islands
Branch, The Bank of Nova Scotia, Amegy Bank, Deutsche Bank Trust Company Americas, and
Compass Bank, have each executed and delivered to the Administrative Agent a Commitment
Increase Certificate, and the Borrower, Credit Agricole Corporate and Investment Bank
and DnB NOR Bank ASA, each have executed and delivered to the Administrative Agent an
Additional Lender Certificate, in each case, in accordance with the provisions of Section
2.06(d) of the Amended Credit Agreement.


 


2









 






(b) Accordingly, effective as of the Commitment Increase Time: (i) the aggregate amount
of the Commitments shall be increased to $550,000,000; (ii) the Commitment of each Lender
(including each Additional Lender referred to in clause (iii) of this paragraph) shall,
without any further action, be the Commitment specified for such Lender in the attached
Annex I; and (iii) Credit Agricole Corporate and Investment Bank and DnB NOR Bank ASA are
each hereby added as an Additional Lender with the Commitment specified for it in the
attached Annex I, and each such Additional Lender shall become a party to the Credit
Agreement as a “Lender” and have all of the rights and obligations of a Lender under the
Credit Agreement and the other Loan Documents. Each Lender or Additional Lender, as the
case may be, shall make any payments required to be made by it pursuant to the last sentence
of Section 2.06(d)(iii) on the Effective Date. Pursuant to Section 2.06(d)(ii)(C) of the
Amended Credit Agreement, if any Eurodollar Borrowings are outstanding as of the Commitment
Increase Time, then the Borrower shall pay any compensation required by Section 5.02 of the
Amended Credit Agreement. The Administrative Agent accepts the Commitment Increase
Certificates and Additional Lender Certificates referred to above and has recorded the
information contained therein in the Register maintained by the Administrative Agent
pursuant to Section 12.04(c) of the Amended Credit Agreement, as required by Section
2.06(d)(iv) of the Amended Credit Agreement.



4.2 Confirmation. The provisions of the Credit Agreement, as amended by this First
Amendment, shall remain in full force and effect following the effectiveness of this First
Amendment.



4.3 Ratification and Affirmation; Representations and Warranties. Each Obligor
hereby: (a) acknowledges the terms of this First Amendment; (b) ratifies and affirms its
obligations under, and acknowledges, renews and extends its continued liability under, each Loan
Document to which it is a party and agrees that each Loan Document to which it is a party remains
in full force and effect, except as expressly amended hereby, after giving effect to the amendments
contained herein; (c) agrees that from and after the Effective Date each reference to the Credit
Agreement in the Guaranty and the other Loan Documents shall be deemed to be a reference to the
Credit Agreement, as amended by this First Amendment; and (d) represents and warrants to the
Lenders that as of the date hereof, after giving effect to the terms of this First Amendment: (i)
all of the representations and warranties contained in each Loan Document to which it is a party
are true and correct in all material respects, unless such representations and warranties are
stated to relate to a specific earlier date, in which case, such representations and warranties
shall continue to be true and correct in all material respects as of such earlier date and (ii) no
Default has occurred and is continuing. 



4.4 Loan Document. This First Amendment is a “Loan Document” as defined and described
in the Credit Agreement and all of the terms and provisions of the Credit Agreement relating to
Loan Documents shall apply hereto.


 


3









 





4.5 Counterparts. This First Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, and all of such counterparts taken together shall be
deemed to constitute one and the same instrument. Delivery of this First Amendment by facsimile or
email transmission shall be effective as delivery of a manually executed counterpart hereof.



4.6 NO ORAL AGREEMENT. THIS FIRST AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.



4.7 GOVERNING LAW. THIS FIRST AMENDMENT (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF) SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.



[SIGNATURES BEGIN NEXT PAGE]



 


4









 





IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as
of the date first written above.



	 	 	 	 	 	 	 	 	 
	BORROWER:	 	KEY ENERGY SERVICES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ J. Marshall Dodson	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	J. Marshall Dodson	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	GUARANTORS:	 	KEY ENERGY SERVICES, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ J. Marshall Dodson	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	J. Marshall Dodson	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	KEY ENERGY SERVICES CALIFORNIA, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ J. Marshall Dodson	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	J. Marshall Dodson	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	KEY ENERGY SERVICES (MEXICO), LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ J. Marshall Dodson	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	J. Marshall Dodson	 	 
	 

	 	 	 	Title:
	 	Vice President and Treasurer	 	 






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	ADMINISTRATIVE AGENT:	 	JPMORGAN CHASE BANK, N.A., as
Administrative Agent, Issuing Bank and
Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Robert Traband	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Robert Traband	 	 
	 

	 	 	 	Title:
	 	Managing Director	 	 






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	LENDERS:	 	BANK OF AMERICA, N.A., as 

Syndication Agent
and Lender	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Gary L. Mingle	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:
	 	Gary L. Mingle	 	 
	 

	 	 	 	Title:
	 	Senior Vice-President	 	 






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	 	CAPITAL ONE, N.A., as
Co-
Documentation Agent and Lender

 	 
	 	By:  	/s/ Don Backer
 	 
	 	 	Name:  	Don Backer 	 
	 	 	Title:  	Senior Vice President 	 



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	 	WELLS FARGO BANK, N.A., as
Co-
Documentation Agent and Lender

 	 
	 	By:  	/s/ Sarah Sandercock
 	 
	 	 	Name:  	Sarah Sandercock 	 
	 	 	Title:  	Director 	 



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	 	CREDIT AGRICOLE CORPORATE AND 

INVESTMENT BANK, as Co-

Documentation Agent and Lender

 	 
	 	By:  	/s/ David Gurghigian
 	 
	 	 	Name:  	David Gurghigian 	 
	 	 	Title:  	Managing Director 	 
	 	 	 
	 	By:  	                                                          /s/ Michael Willis
 	 
	 	 	Name:  	Michael Willis 	 
	 	 	Title:  	Managing Director 	 



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	 	DNB NOR BANK ASA, as Co-

Documentation Agent and Lender

 	 
	 	By:  	/s/ Kristie Li
 	 
	 	 	Name:  	Kristie Li 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                                                          /s/ Philip F. Kurpiewski
 	 
	 	 	Name:  	Philip F. Kurpiewski 	 
	 	 	Title:  	Senior Vice President 	 



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	 	COMERICA BANK, as Lender

 	 
	 	By:  	/s/ Cyd Dillahunty
 	 
	 	 	Name:  	Cyd Dillahunty 	 
	 	 	Title:  	Vice President — Texas Division 	 



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	 	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as
Lender

 	 
	 	By:  	/s/ Nupur Kumar
 	 
	 	 	Name:  	Nupur Kumar 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                                                          /s/ Rahul Parmar
 	 
	 	 	Name:  	Rahul Parmar 	 
	 	 	Title:  	Associate 	 



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	 	MORGAN STANLEY BANK, N.A., as Lender

 	 
	 	By:  	/s/ Sherrese Clarke
 	 
	 	 	Name:  	Sherrese Clarke 	 
	 	 	Title:  	Authorized Signatory 	 



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	 	ROYAL BANK OF CANADA, as Lender

 	 
	 	By:  	/s/ Jay T. Sartain
 	 
	 	 	Name:  	Jay T. Sartain 	 
	 	 	Title:  	Authorized Signatory 	 



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	 	THE BANK OF NOVA SCOTIA, as Lender

 	 
	 	By:  	/s/ John Frazell
 	 
	 	 	Name:  	John Frazell 	 
	 	 	Title:  	Director 	 



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	 	AMEGY BANK, as Lender

 	 
	 	By:  	/s/ G. Scott Collins
 	 
	 	 	Name:  	G. Scott Collins	 
	 	 	Title:  	Vice President 	 



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	 	COMPASS BANK, as Lender

 	 
	 	By:  	/s/ Stuart Murray
 	 
	 	 	Name:  	Stuart Murray 	 
	 	 	Title:  	Senior Vice President 	 



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	 	DEUTSCHE BANK TRUST COMPANY AMERICAS, as
Lender

 	 
	 	By:  	/s/ Michael Getz
 	 
	 	 	Name:  	Michael Getz 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                                                          /s/ Erin Morrissey
 	 
	 	 	Name:  	Erin Morrissey 	 
	 	 	Title:  	Director 	 



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ANNEX I

LIST OF COMMITMENTS




	 	 	 	 	 	 	 	 	 
	Name of Lender	 	Commitment	 	 	Applicable Percentage	 
	JPMorgan Chase Bank, N.A.
	 	$	55,500,000.00	 	 	 	10.09	%
	Bank of America, N.A.
	 	$	50,000,000.00	 	 	 	9.09	%
	Wells Fargo Bank, N.A.
	 	$	45,000,000.00	 	 	 	8.18	%
	Capital One, N.A.
	 	$	45,000,000.00	 	 	 	8.18	%
	Credit Agricole Corporate and
Investment Bank
	 	$	45,000,000.00	 	 	 	8.18	%
	DnB NOR Bank ASA
	 	$	45,000,000.00	 	 	 	8.18	%
	Royal Bank of Canada
	 	$	37,500,000.00	 	 	 	6.82	%
	Comerica Bank
	 	$	37,500,000.00	 	 	 	6.82	%
	Morgan Stanley Bank, N.A.
	 	$	37,500,000.00	 	 	 	6.82	%
	Credit Suisse AG, Cayman Islands Branch
	 	$	37,500,000.00	 	 	 	6.82	%
	The Bank of Nova Scotia
	 	$	37,500,000.00	 	 	 	6.82	%
	Amegy Bank
	 	$	20,000,000.00	 	 	 	3.64	%
	Deutsche Bank Trust Company Americas
	 	$	20,000,000.00	 	 	 	3.64	%
	Compass Bank
	 	$	20,000,000.00	 	 	 	3.64	%
	HSBC Bank USA, N.A.
	 	$	17,000,000.00	 	 	 	3.09	%
	 
	 	 	 	 	 	 	 	 
	TOTAL
	 	$	550,000,000.00	 	 	 	100.0	%






Annex I to First Amendment