Exhibit
10.1


Execution
Version


THIRD
AMENDMENT TO CREDIT AGREEMENT


DATED AS OF JULY 27, 2007


This THIRD AMENDMENT
TO CREDIT AGREEMENT (together with all Exhibits, Schedules and
Annexes hereto, this “Amendment”) is among KEY
ENERGY SERVICES, INC.,  a Delaware corporation (the “Borrower”),
the Guarantors signatory hereto, the LENDERS
(as defined in the Credit Agreement), and LEHMAN
COMMERCIAL PAPER INC., as administrative agent for the Lenders (in
such capacity, the “Administrative Agent”) and as Collateral Agent for the
Lenders and other Secured Parties (in such capacity, the “Collateral Agent”).


PRELIMINARY
STATEMENTS


A.                                   The
Borrower, the Lenders, the Administrative Agent, Wells Fargo Foothill, Inc., as
Revolving Administrative Agent, Lehman Brothers Inc., as sole lead arranger and
sole bookrunner, and the other agents party thereto, entered into a Credit
Agreement dated as of July 29, 2005 (together with all Annexes, Exhibits and
Schedules thereto, and as heretofore amended, the “Credit Agreement”).  Capitalized terms used and not otherwise
defined in this Amendment shall have the meanings given them in the Credit
Agreement.


B.                                     The
Borrower has requested that the Lenders amend the Credit Agreement as set forth
herein, subject to the terms and conditions contained in this Amendment.


NOW, THEREFORE, in
consideration of the premises and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:


1.                                       Amendments
to Credit Agreement.  Subject to the
satisfaction of the conditions set forth in Section 2 hereof, the Credit
Agreement is amended as follows:


(a)                                  the
definition of “Report Date” contained in Section 1.1 of the Credit
Agreement is hereby amended and restated as follows:


“Report Date”:  October 31, 2007, provided that with respect
to all financial statements other those set forth in 6.1(a)(ii) for the fiscal
periods ending March 31, 2007 and June 30, 2007, the Report Date shall be
August 31, 2007.


(b)                                 Section
7.6(d) of the Credit Agreement is hereby amended and restated as follows:


(d)                                 the
Borrower may repurchase its common stock at market prices in an aggregate
amount not to exceed $300,000,000 in the aggregate during the term of this
Agreement so long as (i) (x) if such repurchase is prior to the Financial
Reporting Compliance Date, the Borrower’s Consolidated Leverage Ratio (based on
the most recent twelve-month period for which financial statements are
available) is not greater than 1.75 to 1.00 or (y) if the repurchase is after the
Financial Reporting Compliance Date, the Borrower’s Consolidated Leverage Ratio
(based on the most recent twelve month period for which financial statements
are available) is not greater than 2.50 to 1.00 and (ii) no Default or Event of
Default exists and is continuing, or would result therefrom; and













(c)                                  Section
7.8(g) of the Credit Agreement is hereby amended and restated in its entirety
as follows:


(g)(1)                   in addition to Investments otherwise
expressly permitted by this Section, Investments by the Borrower or any of its
Wholly Owned Subsidiaries constituting acquisitions of Persons or ongoing
businesses engaged primarily in one or more lines of businesses permitted under
Section 7.15 (“Permitted Acquisitions”); provided that:


(i)                                     immediately
prior to and after giving effect to any such Permitted Acquisition, no Default
or Event of Default shall exist and be continuing and the Borrower shall have
certified same to the Administrative Agent in writing;


(ii)                                  if
such Permitted Acquisition is structured as a stock acquisition, or a merger or
consolidation, then either (A) the Person so acquired becomes a Wholly Owned
Subsidiary or (B) such Person is merged with and into either the Borrower or a
Wholly Owned Subsidiary of the Borrower (with the Borrower or such Wholly Owned
Subsidiary being the surviving corporation in such merger);


(iii)                               all of the provisions of
Section 6.10 have been or will be complied with in all material respects in
respect of such Permitted Acquisition; and


(iv)                              after
giving pro forma effect to the proposed Permitted Acquisition, the Borrower
shall be in compliance with the financial covenants set forth in Section 7.1;


(g)(2)                   any Stock Repurchases permitted
under Section 7.6 and any purchases of Indebtedness not restricted by Section
7.9;


2.                                       Conditions
to Effectiveness.  The effectiveness
of all the amendments contained in Section 1 of this Amendment are conditioned
upon satisfaction of the following conditions precedent (the date on which all
such conditions precedent have been satisfied being referred to herein as the “Amendment
Effective Date”):


(a)                                  the
Administrative Agent shall have received signed, written authorization from the
Required Lenders to execute this Amendment, and shall have received
counterparts of this Amendment signed by each of the Borrower, the Guarantors
and the Administrative Agent;


(b)                                 each
of the representations and warranties contained in Section 3 below shall be
true and correct in all material respects on and as of the Amendment Effective
Date;


(c)                                  the Borrower shall have paid to each of the
Lenders authorizing the execution this Amendment by 5:00 p.m. July 27, 2007, an
amendment fee equal to the product of 0.25% multiplied by the
amount of each such Lender’s Commitment;


(d)                                 the
Administrative Agent shall have received all fees and other amounts due and
payable on or prior to the Amendment Effective Date, including, to the extent
invoiced, reimbursement or other payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder or any other Loan Document;
and



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(e)                                  the
Administrative Agent shall have received such other documents, instruments,
certificates and approvals as it may reasonably request.


3.                                       Representations
and Warranties.  The Borrower
represents and warrants to the Administrative Agent and the Lenders as follows:


(a)                                  Authority.  The Borrower has the corporate power and
authority, and the legal right, to make, deliver and perform this Amendment and
to perform its obligations hereunder and under the Loan Documents (as amended hereby).  Each of the Guarantors has the corporate or
other organizational power and authority, and the legal right, to make, deliver
and perform this Amendment.  The
execution, delivery and performance by the Borrower and Guarantors of this
Amendment and the Loan Documents (as amended hereby) and the transactions
contemplated hereby and thereby have been authorized by all necessary corporate
or other organizational action of such Person. 
No material consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability of this Amendment.


(b)                                 Enforceability.  This Amendment has been duly executed and delivered
on behalf of each Loan Party that is party thereto.  Each of this Amendment and each Loan Document
as amended hereby (i) constitutes a legal, valid and binding obligation of each
Loan Party hereto, enforceable against each such Loan Party in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law) and (ii) is
in full force and effect.  Neither the
execution, delivery or performance of this Amendment or the performance of the
Loan Documents (as amended hereby), nor the performance of the transactions
contemplated hereby or thereby, will adversely affect the validity, perfection
or priority of the Collateral Agent’s Lien on any of the Collateral or its
ability to realize thereon.  This
Amendment is effective to amend the Credit Agreement as provided herein.


(c)                                  Guaranty
Obligations.  Each of the signatories
hereto who have executed this Amendment under the caption “Guarantors” is a
Guarantor of the Obligations of the Borrower under the Credit Agreement and
hereby (i) acknowledges that notwithstanding the execution and delivery of
this Amendment, the obligations of each of the undersigned Guarantors are not
impaired or affected and all guaranties given to the holders of Obligations and
all Liens granted as security for the Obligations continue in full force and
effect, and (ii) confirms and ratifies its obligations under the Guarantee
and Collateral Agreement and each other Loan Document executed by it.


(d)                                 Representations
and Warranties.  After giving effect
to this Amendment, the representations and warranties contained in the Credit
Agreement and the other Loan Documents (other than any such representations and
warranties that, by their terms, are specifically made as of an earlier date)
are true and correct in all material respects on and as of the date hereof as
though made on and as of the date hereof.


(e)                                  No
Conflicts.  Neither the execution,
delivery and performance of this Amendment, nor the performance of and
compliance with the terms and provisions hereof or of the Loan Documents (as
amended hereby) by any Loan Party will, at the time of such performance, (i)
violate any Requirement of Law or any material Contractual Obligation of any
Loan Party or (ii) result in, or require, the creation or imposition of any
Lien (other than Liens created by the Loan Documents) on any of their
respective properties or revenues pursuant to any Requirement of Law or any
such Contractual Obligation.



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(f)                                    No
Default.  After giving effect to this
Amendment, no event has occurred and is continuing that constitutes a Default or
Event of Default.


4.                                       Reference
to and Effect on Credit Agreement.


(a)                                  Upon
and after the effectiveness of this Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import
referring to the Credit Agreement, and each reference in the other Loan
Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement as amended hereby.  This
Amendment is a Loan Document.


(b)                                 Except
as specifically amended above, the Credit Agreement and the other Loan
Documents are and shall continue to be in full force and effect and are hereby
in all respects ratified and confirmed. 
Without limiting the generality of the foregoing, the Security Documents
and all of the Collateral described therein do and shall continue to secure the
payment of all Obligations under and as defined therein.


(c)                                  The
execution, delivery and effectiveness of this Amendment shall not, except as
expressly provided herein, operate as a waiver of any right, power or remedy of
any Secured Party under any of the Loan Documents, nor, except as expressly
provided herein, constitute a waiver or amendment of any provision of any of
the Loan Documents.


5.                                       Counterparts.  This Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a
signature page to this Amendment by facsimile or electronic transmission (in
pdf format) shall be effective as delivery of a manually executed counterpart
of this Amendment.


6.                                       Severability.  Any provision of this Amendment that 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.


7.                                       Governing
Law.  This Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.


[Signature
pages follow]



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IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be executed by their
respective officers thereunto duly authorized, as of the date first written
above.


	
  

  	
  ADMINISTRATIVE AGENT AND COLLATERAL

  AGENT:

  
	
   

  	
   

  
	
   

  	
  LEHMAN COMMERCIAL PAPER INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  KEY ENERGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: William M. Austin

  
	
   

  	
  Title: Senior Vice President and Chief Financial
  Officer

  



 


[Signature Page to
Third Amendment]











Execution
Version


 


	
  

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  KEY ENERGY DRILLING, INC.

  
	
   

  	
  ODESSA EXPLORATION INCORPORATED

  
	
   

  	
  UNITRACK SERVICES HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: William M.
  Austin

  
	
   

  	
  Title: Vice
  President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KEY ENERGY SERVICES, LLC

  
	
   

  	
  KEY ENERGY PRESSURE PUMPING SERVICES, LLC

  
	
   

  	
  KEY ENERGY FISHING & RENTAL SERVICES, LLC

  
	
   

  	
  KEY ENERGY SHARED SERVICES, LLC*

  
	
   

  	
  MISR KEY ENERGY INVESTMENTS, LLC

  
	
   

  	
  MISR KEY ENERGY SERVICES, LLC

  
	
   

  	
  KEY ELECTRIC WIRELINE SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: William M.
  Austin

  
	
   

  	
  Title: Vice
  President and Assistant Treasurer

  



 


	
  

  	
  *Executing in the
  capacity of President

  



 


[Signature
Page to Third Amendment]