SESI, L.L.C. AND EACH OF THE GUARANTORS PARTY HERETO 6 7/8% SENIOR NOTES DUE 2014 INDENTURE Dated as of May 22, 2006 THE BANK OF NEW YORK TRUST COMPANY, N.A. Trustee
Exhibit 4.2
SESI, L.L.C.
AND EACH OF THE GUARANTORS PARTY HERETO
6
7/8% SENIOR NOTES DUE 2014
Dated as of May 22, ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ TRUST COMPANY, N.A.
Trustee
Trustee
CROSS-REFERENCE TABLE*
| Trust Indenture | ||||
| Act Section | Indenture Section | |||
310(a)(1) |
7.10 | |||
(a)(2) |
7.10 | |||
(a)(3) |
N.A. | |||
(a)(4) |
N.A. | |||
(a)(5) |
7.10 | |||
(b) |
7.10 | |||
(c) |
N.A. | |||
311(a) |
7.11 | |||
(b) |
7.11 | |||
(c) |
N.A. | |||
312(a) |
2.05 | |||
(b) |
12.03 | |||
(c) |
12.03 | |||
313(a) |
7.06 | |||
(b)(1) |
N.A. | |||
(b)(2) |
7.06; 7.07 | |||
(c) |
7.06; 12.02 | |||
(d) |
7.06 | |||
314(a) |
4.03; 12.02; 12.05 | |||
(b) |
N.A. | |||
(c)(1) |
12.04 | |||
(c)(2) |
12.04 | |||
(c)(3) |
N.A. | |||
(d) |
N.A. | |||
(e) |
12.05 | |||
(f) |
N.A. | |||
315(a) |
7.01 | |||
(b) |
7.05; 12.02 | |||
(c) |
7.01 | |||
(d) |
7.01 | |||
(e) |
6.11 | |||
316(a) (last sentence) |
2.09 | |||
(a)(1)(A) |
6.05 | |||
(a)(1)(B) |
6.04 | |||
(a)(2) |
N.A. | |||
(b) |
6.07 | |||
(c) |
2.12 | |||
317(a)(1) |
6.08 | |||
(a)(2) |
6.09 | |||
(b) |
2.04 | |||
318(a) |
12.01 | |||
(b) |
N.A. | |||
(c) |
12.01 | |||
| N.A. means not applicable. * This Cross Reference Table is not part of the Indenture. |
TABLE OF CONTENTS
INDENTURE dated as of May 22, 2006 among SESI, L.L.C., a Delaware limited liability company,
the Guarantors (as defined) and The Bank of New York Trust Company, N.A., as trustee.
The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and
for the equal and ratable benefit of the Holders (as defined) of the 6 7/8% Senior Notes due 2014
(the “Notes”):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing
the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and
registered in the name of, the Depositary or its nominee that will be issued in a denomination
equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.
“Additional Assets” means any (1) property or assets (other than Indebtedness and Capital
Stock) used or useful in a Related Business, (2) the Capital Stock of a Person that becomes a
Restricted Subsidiary as a result of the acquisition of such Capital Stock by Superior Energy, the
Company or another Restricted Subsidiary or (3) Capital Stock constituting a minority interest in
any Person that at such time is a Restricted Subsidiary; provided, however, that any such
Restricted Subsidiary described in clauses (2) and (3) above is primarily engaged in a Related
Business.
“Additional Notes” means additional Notes (other than the Initial Notes) issued under this
Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the
Initial Notes.
“Additional Interest” means any and all additional interest payable in accordance with the
Registration Rights Agreement with respect to the Notes.
“Affiliate” of any specified Person means (1) any other Person, directly or indirectly,
controlling or controlled by, or (2) under direct or indirect common control with, such specified
Person. For the purposes of this definition, “control” when used with respect to any Person means
the power to direct the management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the terms “controlling”
and “controlled” have meanings correlative to the foregoing. For purposes of Sections 4.07, 4.10
and 4.11 hereto only, “Affiliate” shall also mean any beneficial owner of Capital Stock
representing 10% or more of the total voting power of the Voting Stock (on a fully diluted basis)
of Superior Energy or of rights or warrants to purchase such Capital Stock (whether or not
currently exercisable) and any Person who would be an Affiliate of any such beneficial owner
pursuant to the first sentence hereof.
“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.
“Applicable Premium” means, with respect to any Note on any redemption date, the greater of:
(1) 1.0% of the principal amount of the Note; or
(2) the excess of: (a) the present value at such redemption date of (i) the redemption
price of the Note at June 1, 2010, (such redemption price being set forth in the table
appearing in Section 3.07 hereof) plus (ii) all required interest payments due on the Note
through June 1, 2010,
1
(excluding accrued but unpaid interest to the applicable redemption date), computed
using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis
points; over (b) the principal amount of the Note, if greater.
“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial
interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream
that apply to such transfer or exchange.
“Asset Disposition” means any sale, transfer or other disposition (or series of related sales,
leases, transfers or dispositions) by Superior Energy, the Company or any Restricted Subsidiary,
including any disposition by means of a sale and leaseback or a merger, consolidation or similar
transaction (each referred to for the purposes of this definition as a “disposition”), of (1) any
shares of Capital Stock of a Restricted Subsidiary (other than directors’ qualifying shares or
shares required by applicable law to be held by a Person other than the Company or a Restricted
Subsidiary), (2) all or substantially all the assets or rights of any division or line of business
of Superior Energy, the Company or any Restricted Subsidiary or (3) any other assets or rights of
Superior Energy, the Company or any Restricted Subsidiary outside of the ordinary course of
business of Superior Energy, the Company or such Restricted Subsidiary (other than, in the case of
clauses (1), (2) and (3) above, (A) a disposition by a Restricted Subsidiary to Superior Energy or
the Company or by Superior Energy, the Company or a Restricted Subsidiary to a Wholly Owned
Subsidiary, (B) for purposes of Section 4.10 hereto only, a disposition that constitutes a
Restricted Payment permitted by Section 4.07 hereto or a Permitted Investment, (C) the trade or
exchange by Superior Energy, the Company or any Restricted Subsidiary of any assets for any similar
assets of another Person, including any cash or cash equivalents necessary in order to achieve an
exchange of equivalent value; provided, however, that the value of the property received by
Superior Energy, the Company or any Restricted Subsidiary in such trade or exchange (including any
cash or cash equivalents) is at least equal to the fair market value (as determined in good faith
by the Board of Directors of Superior Energy, an officer of Superior Energy or an officer of such
Restricted Subsidiary with responsibility for such transaction, which determination shall be
conclusive evidence of compliance with this provision) of the property (including any cash or cash
equivalents) so traded or exchanged, (D) the creation of a Lien, (E) surrender or waiver of
contract rights or the settlement, release or surrender of contract, tort or other claims of any
kind and (F) a disposition of assets in any single transaction or a series of related transaction
that involve assets with a fair market value of less than $5.0 million; provided further, however,
that the sale, transfer or other disposition of all or substantially all of the assets or rights of
Superior Energy, the Company and the Restricted Subsidiaries taken as a whole will be governed by
the Sections 4.14 and 5.01 hereof and not by Section 4.10 hereof.
“Attributable Debt” in respect of a Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest rate borne by the Notes, compounded
annually) of the total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for which such lease
has been extended).
“Average Life” means, as of the date of determination, with respect to any Indebtedness or
Preferred Stock, the quotient obtained by dividing (1) the sum of the products of numbers of years
from the date of determination to the dates of each successive scheduled principal payment of such
Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (2) the sum of all such payments.
“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief
of debtors.
2
“Beneficial
Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under
the Exchange Act, except that in calculating the beneficial ownership of any particular “person”
(as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to
have beneficial ownership of all securities that such “person” has the right to acquire by
conversion or exercise of other securities, whether such right is currently exercisable or is
exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned”
have a corresponding meaning.
“Board of Directors” means:
(1) with respect to a corporation, the board of directors of the corporation or any
committee thereof duly authorized to act on behalf of such board;
(2) with respect to a partnership, the Board of Directors of the general partner of the
partnership;
(3) with respect to a limited liability company, the managing member or members or any
controlling committee of managing members thereof; and
(4) with respect to any other Person, the board or committee of such Person serving a
similar function.
“Broker-Dealer” has the meaning set forth in the Registration Rights Agreement.
“Business Day” means each day other than a Saturday, Sunday or a day on which commercial
banking institutions are authorized or required by law to close in New York City.
“Capital Lease Obligation” means an obligation that is required to be classified and accounted
for as a capital lease for financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount of such obligation
determined in accordance with GAAP; and the Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease prior to the first date upon which such
lease may be terminated by the lessee without payment of a penalty.
“Capital Stock” of any Person means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any debt securities convertible
into such equity.
“Clearstream” means Clearstream Banking, S.A.
“Code” means the Internal Revenue Code of 1986, as amended.
“Company” means SESI, L.L.C., and any and all successors thereto.
“Consolidated Coverage Ratio” as of any date of determination means the ratio of (a) the
aggregate amount of EBITDA for the period of the most recent four consecutive fiscal quarters
ending at least 45 days (or, if less, the number of days after the end of such fiscal quarter as
the consolidated financial statements of Superior Energy and its Subsidiaries, consisting of, at
least, the Company and the Restricted Subsidiaries, shall be provided to the Holders pursuant to
this Indenture) prior to the date of such determination to (b) Consolidated Interest Expense for
such four fiscal quarters; provided, however, that:
3
(1) if Superior Energy, the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio is an
Incurrence of Indebtedness, or both, EBITDA and Consolidated Interest Expense for such
period shall be calculated after giving effect on a pro forma basis to such Indebtedness as
if such Indebtedness had been Incurred on the first day of such period and the discharge of
any other Indebtedness repaid, repurchased, defeased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first day of such
period;
(2) if Superior Energy, the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the beginning of such
period or if any Indebtedness is to be repaid, repurchased, defeased or otherwise discharged
(in each case other than Indebtedness Incurred under any revolving credit facility existing
under a Credit Facility unless such Indebtedness has been permanently repaid and has not
been replaced) on the date of the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio, EBITDA and Consolidated Interest Expense for such period shall
be calculated on a pro forma basis as if such discharge had occurred on the first day of
such period and if the Company or such Restricted Subsidiary has not earned the interest
income actually earned during such period in respect of cash or Temporary Cash Investments
used to repay, repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period Superior Energy, the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the EBITDA for such period
shall be reduced by an amount equal to the EBITDA (if positive) directly attributable to the
assets which are the subject of such Asset Disposition for such period, or increased by an
amount equal to the EBITDA (if negative), directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness of Superior Energy,
the Company or any Restricted Subsidiary repaid, repurchased, defeased or otherwise
discharged with respect to Superior Energy, the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for such period (or, if the Capital
Stock of any Restricted Subsidiary is sold, the Consolidated Interest Expense for such
period directly attributable to the Indebtedness of such Restricted Subsidiary to the extent
the Company and its continuing Restricted Subsidiaries are no longer liable for such
Indebtedness after such sale);
(4) if since the beginning of such period Superior Energy, the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets occurring in connection with a
transaction requiring a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or acquisition occurred on the
first day of such period;
(5) if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary
since the beginning of such period) shall have made any Asset Disposition, any Investment or
acquisition of assets that would have required an adjustment pursuant to clause (3) or (4)
above if made by the Company or a Restricted Subsidiary during such period, EBITDA and
Consolidated Interest Expense for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or acquisition occurred on the first
day of such period; and
4
(6) any other transaction that may be given pro forma effect in accordance with Article
11 of Regulation S-X promulgated by the SEC, as such Regulation is in effect on the Issue
Date, and thereafter, as in effect from time to time.
For purposes of this definition, whenever pro forma effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto and the amount of Consolidated Interest
Expense associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or accounting officer of
Superior Energy. If any Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such Indebtedness shall be calculated as if the rate in effect on the date
of determination had been the applicable rate for the entire period (taking into account any
Interest Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement has a
remaining term in excess of 12 months).
“Consolidated Current Liabilities” as of the date of determination means the aggregate amount
of liabilities of Superior Energy and its consolidated Subsidiaries consisting of the Company and
the Restricted Subsidiaries which may properly be classified as current liabilities (including
taxes accrued as estimated), on a consolidated basis, after eliminating (1) all intercompany items
between the Company and such Restricted Subsidiaries and (2) all current maturities of long-term
Indebtedness, all as determined in accordance with GAAP consistently applied.
“Consolidated Interest Expense” means, for any period, the total interest expense of Superior
Energy and its consolidated Subsidiaries consisting of the Company and the Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the extent incurred by
Superior Energy, the Company or any Restricted Subsidiary, without duplication:
(1) interest expense attributable to Capital Lease Obligations and the interest expense
attributable to leases constituting part of a Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expenses;
(5) commission, discounts and other fees and charges owed with respect to letters of
credit and bankers’ acceptance financing;
(6) net payments pursuant to, and other net costs associated with, Hedging Obligations
(including amortization of fees);
(7) Preferred Stock dividends in respect of all Preferred Stock held by Persons other
than the Company or a Wholly Owned Subsidiary (other than dividends payable solely in
Capital Stock (other than Disqualified Stock) of the Company of such Preferred Stock);
(8) interest incurred in connection with Investments in discontinued operations;
(9) interest accruing on any Indebtedness of any other Person to the extent such
Indebtedness is Guaranteed by (or secured by the assets of) Superior Energy, the Company or
any of the Restricted Subsidiaries; and
5
(10) the cash contributions to any employee stock ownership plan or similar trust to
the extent such contributions are used by such plan or trust to pay interest or fees to any
Person (other than Superior Energy or the Company) in connection with Indebtedness Incurred
by such plan or trust.
“Consolidated Net Income” means, for any period, the net income of Superior Energy and its
consolidated Subsidiaries consisting of the Company and the Restricted Subsidiaries; provided,
however, that there shall not be included in such Consolidated Net Income to the extent included in
computing such net income (without duplication):
(1) any net income of any Person (other than the Company) if such Person is not a
Restricted Subsidiary, except that (A) subject to the exclusion contained in clause (4)
below, the Company’s equity in the net income of any such Person for such period shall be
included in such Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to Superior Energy, the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in the case of a
dividend or other distribution paid to a Restricted Subsidiary, to the limitations contained
in clause (3) below) and (B) Superior Energy’s or the Company’s equity in a net loss of any
such Person for such period shall be included in determining such Consolidated Net Income;
(2) any net income of any Restricted Subsidiary to the extent that, directly or
indirectly, the declaration or payment of dividends or the making of similar distributions
by such Restricted Subsidiary, directly or indirectly, to the Company, of that net income
(or loss) is not at the date of determination permitted without prior government approval
(that has not been obtained) or, directly or indirectly, by operation of the terms of its
organizational documents and all agreements (other than those agreements permitted by
clauses (1), (2), (3), (5) and (6) of Section 4.08 hereto except that Superior Energy’s or
the Company’s equity in a net loss of any such Restricted Subsidiary for such period shall
be included in determining such Consolidated Net Income;
(3) any gain (or loss) realized upon the sale or other disposition of any assets of
Superior Energy or its consolidated Subsidiaries consisting of the Company and the
Restricted Subsidiaries (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and any gain (or loss)
realized upon the sale or other disposition of any Capital Stock of any Person;
(4) extraordinary gains or losses;
(5) any non-cash compensation charges in connection with stock options, restricted
stock grants and similar employee benefit plans; and
(6) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.07 hereto only, there shall be
excluded from Consolidated Net Income any repurchases, repayments or redemptions of Investments,
proceeds realized on the sale of the Investments or return of capital to Superior Energy, the
Company or a Restricted Subsidiary to the extent such repurchases, repayments, redemptions,
proceeds or returns increase the amount of Restricted Payments permitted under such Section 4.07
pursuant to clause (a)(3)(D) thereof.
6
“Consolidated Net Tangible Assets” as of any date of determination, means the total amount of
assets (less accumulated depreciation and amortization, allowances for doubtful receivables, other
applicable reserves and other properly deductible items) which would appear on a consolidated
balance sheet of Superior Energy and its consolidated Subsidiaries consisting of the Company and
the Restricted Subsidiaries, determined on a consolidated basis in accordance with GAAP, and after
giving effect to purchase accounting and after deducting therefrom Consolidated Current Liabilities
and, to the extent otherwise included, the amounts of:
(1) minority interests in such consolidated Subsidiaries held by Persons other than
Superior Energy, the Company or a Restricted Subsidiary;
(2) excess of cost over fair value of assets of businesses acquired, as determined in
good faith;
(3) any revaluation or other write-up in book value of assets subsequent to the Issue
Date as a result of a change in the method of valuation in accordance with GAAP consistently
applied;
(4) unamortized debt discount and expenses and other unamortized deferred charges,
goodwill, patents, trademarks, service marks, trade names, copyrights, licenses,
organization or developmental expenses and other intangible items;
(5) treasury stock;
(6) cash set apart and held in a sinking or other analogous fund established for the
purpose of redemption or other retirement of Capital Stock to the extent such obligation is
not reflected in Consolidated Current Liabilities; and
(7) Investments in and assets of Unrestricted Subsidiaries.
“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in
Section 12.02 hereof or such other address as to which the Trustee may give notice to the Company.
“Credit Agreement” means that certain Amended and Restated Credit Agreement, dated October 31,
2005 and amended as of May 3, 2006, by and among, the Company, Superior Energy, the lenders
referred to therein, Chase Bank, N.A., as Agent, ▇▇▇▇▇ Fargo Bank, N.A., as Syndication Agent, and
Whitney National Bank, as Documentation Agent, providing for up to $250.0 million of revolving
credit borrowings, including any related notes, Guarantees, collateral documents, instruments and
agreements executed in connection therewith, and, in each case, as amended, restated, modified,
renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced
(including by means of sales of debt securities to institutional investors) in whole or in part
from time to time.
“Credit Facilities” means, one or more debt facilities (including, without limitation, the
Credit Agreement) or commercial paper facilities, in each case, with banks or other institutional
lenders providing for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed to borrow from such
lenders against such receivables) or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or
refinanced (including by means of sales of debt securities to institutional investors) in whole or
in part from time to time.
7
“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap
agreement or other similar agreement designed to protect such Person against fluctuations in
currency values.
“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any
successor entity thereto.
“Default” means any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.
“Definitive Note” means a certificated Note registered in the name of the Holder thereof and
issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except
that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges
of Interests in the Global Note” attached thereto.
“Depositary” means, with respect to the Notes issuable or issued in whole or in part in global
form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and
any and all successors thereto appointed as depositary hereunder and having become such pursuant to
the applicable provision of this Indenture.
“Disqualified Stock” means, with respect to any Person, any Capital Stock which by its terms
(or by the terms of any security into which it is convertible or for which it is exchangeable at
the option of the holder) or upon the happening of any event (1) matures or is mandatorily
redeemable pursuant to a sinking fund obligation or otherwise, (2) is convertible or exchangeable
for Indebtedness or Disqualified Stock or (3) is mandatorily redeemable or must be purchased upon
the occurrence of certain events or otherwise, in whole or in part, in each case on or prior to the
first anniversary of the Stated Maturity of the Notes; provided, however, that any Capital Stock
that would not constitute Disqualified Stock but for provisions thereof giving holders thereof the
right to require such Person to repurchase or redeem such Capital Stock upon the occurrence of an
“asset sale” or “change of control” occurring prior to the first anniversary of the Stated Maturity
of the Notes shall not constitute Disqualified Stock if (i) the “asset sale” or “change of control”
provisions applicable to such Capital Stock are not more favorable to the holders of such Capital
Stock than the provisions described under Sections 4.10 and 4.14 hereto and (ii) any such
requirement only becomes operative after compliance with such terms applicable to the Notes,
including the purchase of any Notes tendered pursuant thereto.
“EBITDA” for any period means the sum of Consolidated Net Income, plus the following to the
extent deducted in calculating such Consolidated Net Income:
(1) all income tax expense of Superior Energy, the Company and their consolidated
Restricted Subsidiaries; plus
(2) Consolidated Interest Expense; plus
(3) depreciation, depletion, accretion and amortization expense of Superior Energy, the
Company and their consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid cash item that was paid in a prior period); plus
(4) all other non-cash charges of Superior Energy, the Company and their consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent that it represents
an accrual of or reserve for cash expenditures in any future period); minus
8
(5) non-cash items increasing such Consolidated Net Income for such period, other than
the accrual of revenue in the ordinary course of business,
in each case for such period.
“Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exchange Notes” means the Notes issued in the Exchange Offer pursuant to Section 2.06(f)
hereof.
“Exchange Offer” has the meaning set forth in the Registration Rights Agreement.
“Exchange Offer Registration Statement” has the meaning set forth in the Registration Rights
Agreement.
“Exempt Foreign Subsidiary” means a Foreign Subsidiary that is classified as a “controlled
foreign corporation” under the Code and, on or subsequent to the Issue Date, is not required to
guarantee the Notes pursuant to the circumstances described in Sections 4.16 and 4.18 hereof.
“Foreign Subsidiary” means any Restricted Subsidiary not created or organized in the United
States of America or any State thereof or the District of Columbia and that conducts all of its
operations outside of the United States of America.
“GAAP” means generally accepted accounting principles in the United States of America, which
are in effect from time to time, including those set forth in (1) the opinions and pronouncements
of the Accounting Principles Board of the American Institute of Certified Public Accountants, (2)
statements and pronouncements of the Financial Accounting Standards Board, (3) such other
statements by such other entity as approved by a significant segment of the accounting profession
and (4) the rules and regulations of the SEC governing the inclusion of financial statements
(including pro forma financial statements) in periodic reports required to be filed pursuant to
Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins
and similar written statements from the accounting staff of the SEC.
“Global Note Legend” means the legend set forth in Section 2.06(g)(2) hereof, which is
required to be placed on all Global Notes issued under this Indenture.
“Global Notes” means, individually and collectively, each of the Restricted Global Notes and
the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the
Depository or its nominee, substantially in the form of Exhibit A hereto and that bears the Global
Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached
thereto, issued in accordance with Sections 2.01, 2.06(b)(3), 2.06(b)(4), 2.06(d)(2) or 2.06(f)
hereof.
“Guarantee” means any obligation, contingent or otherwise, of any Person directly or
indirectly guaranteeing any Indebtedness of any Person and any obligation, direct or indirect,
contingent or otherwise, of such Person (1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise) or (2) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness of the payment thereof or
to protect such obligee against loss in
9
respect thereof (in whole or in part); provided, however, that the term “Guarantee” shall not
include endorsements for collection or deposit in the ordinary course of business. The term
“Guarantee” used as a verb has a corresponding meaning. The term “Guarantor” shall mean any Person
Guaranteeing any obligation.
“Guarantor” means Superior Energy and the Subsidiary Guarantors.
“Hedging Agreement” means any oil and natural gas hedging agreement and any other agreement or
arrangement designed to protect Superior Energy, the Company or any Restricted Subsidiary against
fluctuations in oil and natural gas prices.
"Hedging Obligations” of any Person means the obligations of such Person pursuant to any
Interest Rate Agreement, Currency Agreement or Hedging Agreement
“Holder” means a Person in whose name a Note is registered on the Registrar’s books.
“Incur” means issue, assume, Guarantee, incur or otherwise become liable for; provided,
however, that any Indebtedness or Capital Stock of a Person existing at the time such Person
becomes a Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be deemed
to be Incurred by such Person at the time it becomes a Restricted Subsidiary. The term “Incurrence”
when used as a noun shall have a correlative meaning.
“Indebtedness” means, with respect to any Person on any date of determination (without
duplication):
(1) the principal in respect of (A) indebtedness of such Person for money borrowed and
(B) indebtedness evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable, including, in each case, any premium
on such indebtedness to the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all Attributable Debt in respect
of Sale/Leaseback Transactions entered into by such Person;
(3) all obligations of such Person issued or assumed as the deferred purchase price of
property, all conditional sale obligations of such Person and all obligations of such Person
under any title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business);
(4) all obligations of such Person for the reimbursement of any obligor on any letter
of credit, banker’s acceptance or similar credit transaction (other than obligations with
respect to letters of credit securing obligations (other than obligations described in
clauses (1) through (3) above) entered into in the ordinary course of business of such
Person to the extent such letters of credit are not drawn upon or, if and to the extent
drawn upon, such drawing is reimbursed no later than the tenth Business Day following
payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock of such Person or, with respect to
any Subsidiary of such Person, the liquidation preference with respect to, any Preferred
Stock (but excluding, in each case, any accrued dividends);
10
(6) all obligations of the type referred to in clauses (1) through (5) of other Persons
and all dividends of other Persons for the payment of which, in either case, such Person is
responsible or liable, directly or indirectly, as obligor, guarantor or otherwise, including
by means of any Guarantee;
(7) all obligations of the type referred to in clauses (1) through (6) of other Persons
secured by any Lien on any property or asset of such Person (whether or not such obligation
is assumed by such Person), the amount of such obligation being deemed to be the lesser of
the value of such property or assets and the amount of the obligation so secured; and
(8) any Hedging Obligations of such Person;
if and to the extent any of the preceding items (other than the items described in the preceding
clauses (4), (5), (6), (7) and (8)) would appear on the liability side of a balance sheet of the
specified Person prepared in accordance with GAAP. The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date. Indebtedness shall not include obligations
of any Person resulting from its endorsement of negotiable instruments for collection in the
ordinary course of business.
“Indenture” means this Indenture, as amended or supplemented from time to time.
“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through
a Participant.
“Initial Notes” means the first $300,000,000 aggregate principal amount of Notes issued under
this Indenture on the date hereof.
“Institutional Accredited Investor” means an institution that is an “accredited investor” as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.
“Interest Rate Agreement” means in respect of a Person any interest rate swap agreement,
interest rate cap agreement or other financial agreement or arrangement designed to protect such
Person against fluctuations in interest rates.
“Investment” in any Person means any direct or indirect advance, loan (other than advances to
customers in the ordinary course of business that are recorded as accounts receivable on the
balance sheet of the lender) or other extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of any transfer of cash or other property
to others or any payment for property or services for the account or use of others), or any
purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by such
Person. For purposes of the definition of “Unrestricted Subsidiary,” the definition of “Restricted
Payment” and Section 4.07 hereto.
(1) “Investment” shall include the portion (proportionate to Superior Energy’s or the
Company’s equity interest in such Subsidiary) of the fair market value of the net assets of
any Subsidiary of Superior Energy or the Company at the time that such Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, Superior Energy or the Company shall be deemed to
continue to have a permanent “Investment” in an Unrestricted Subsidiary equal to an amount
(if positive) equal to (A) Superior Energy’s or the Company’s “Investment” in such
Subsidiary at the time of such redesignation less (B) the portion (proportionate to Superior
Energy’s or the Company’s equity
11
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined in good faith
by the Board of Directors of Superior Energy.
“Issue Date” means May 22, 2006.
“Letter of Transmittal” means the letter of transmittal to be prepared by the Company and sent
to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.
“Lien” means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in the nature thereof,
any option or other agreement to sell or give a security interest in and any filing of or agreement
to give any financing statement under the Uniform Commercial Code (or equivalent statute) of any
jurisdiction).
“MARAD Financier” means each of (1) the Persons whose loans, whether evidenced by notes or
bonds, to a Special Purpose Vessel Entity are guaranteed, in whole or part, by the Maritime
Administration under Title XI of the Merchant Marine Act of 1936, as amended, and (2) the Maritime
Administration as such guarantor of such loans.
“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc. or any successor to the rating agency business
thereof.
“Net Available Cash” from an Asset Disposition means cash payments received therefrom
(including any cash payments received by way of deferred payment of principal pursuant to a note or
installment receivable or otherwise and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of Indebtedness or other
obligations relating to such properties or assets or received in any other noncash form), in each
case net of:
(1) all accounting, engineering, investment banking, brokerage, legal, title and
recording tax expenses, commission and other fees and expenses incurred, and all Federal,
state, provincial, foreign and local taxes required to be accrued as a liability under GAAP,
as a consequence of such Asset Disposition;
(2) taxes paid or payable after taking into account any reduction in consolidated tax
liability due to available tax credits or deductions and any tax sharing arrangement;
(3) all payments made on any Indebtedness which is secured by any assets subject to
such Asset Disposition, in accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which must by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by applicable law, be repaid out
of the proceeds from such Asset Disposition;
(4) all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition; and
(5) the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or other assets
12
disposed in such Asset Disposition and retained by Superior Energy, the Company or any
Restricted Subsidiary after such Asset Disposition.
“Net Cash Proceeds” means, with respect to any issuance or sale of Capital Stock, the cash
proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or
placement agents’ fees, discounts or commissions and brokerage, consultant and other fees actually
incurred in connection with such issuance or sale and net taxes paid or payable as a result
thereof.
“Non-Recourse Debt” means Indebtedness:
(1) as to which neither the Company nor Superior Energy, nor any Restricted Subsidiary
(A) provides credit support of any kind (including any undertaking, agreement or instrument
that would constitute Indebtedness) beyond pledging its interest in the Unrestricted
Subsidiary or (B) is directly or indirectly liable (subject to customary exceptions such as
indemnifications for collection costs in pledge or security agreements, environmental and
title matters and fraud) for payment on or in respect of such Indebtedness beyond its
interest in the Unrestricted Subsidiary, in each case, other than under one or more
unsecured Guarantees from time to time entered into by Superior Energy to Guarantee the
payment of outstanding borrowed money Indebtedness and related interest, fees, expenses,
indemnification and other costs of a Special Purpose Vessel Entity owed to MARAD Financiers
that finance such Special Purpose Vessel Entity’s acquisition (whether through outright
purchase or the payment of periodic contractual construction costs) of liftboats and other
marine equipment owned solely by such Special Purpose Vessel Entity, provided that all such
Guarantees are incurred in compliance with Sections 4.07 and 4.09 hereof and such Guarantees
solely Guarantee such obligations owed by a Special Purpose Vessel Entity to MARAD
Financiers (each such Guarantee, a “Vessel Guarantee”);
(2) no default with respect to (other than with respect to a Vessel Guarantee, and in
such regard, solely with respect to Superior Energy) which (including any rights that the
holders thereof may have to take enforcement action against an Unrestricted Subsidiary)
would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of
the Company, Superior Energy or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated
maturity; and
(3) as to which the lenders have been notified in writing that they will not have any
recourse to the stock or assets of the Company, Superior Energy or any Restricted
Subsidiary.
“Non-U.S. Person” means a Person who is not a U.S. Person.
“Note Guarantee” means the Guarantee by each Guarantor of the Company’s obligations under this
Indenture and the Notes, executed pursuant to the provisions of this Indenture.
“Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes
and the Additional Notes shall be treated as a single class for all purposes under this Indenture,
and unless the context otherwise requires, all references to the Notes shall include the Initial
Notes and any Additional Notes.
“Obligations” means, with respect to any Indebtedness, all obligations for principal, premium,
interest, penalties, fees, indemnification, reimbursement and other amounts payable pursuant to the
documentation governing such Indebtedness.
13
“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer,
any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.
“Officer’s Certificate” means a certificate signed on behalf of the Company by an Officer of
the Company, who must be the principal executive officer, the principal financial officer, the
treasurer or the principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the
Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or
counsel to the Company, any Subsidiary of the Company or the Trustee.
“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to
DTC, shall include Euroclear and Clearstream).
“Permitted Business Investments” means Investments and expenditures made in the ordinary
course of, and of a nature that is customary in, the oil and gas business as means of actively
exploiting, acquiring, developing, processing, gathering, marketing or transporting oil, natural
gas, other hydrocarbons and minerals through agreements, transactions, interests or arrangements
that permit one to share risks or costs, comply with regulatory requirements regarding local
ownership or satisfy other objectives customarily achieved through the conduct of the oil and gas
business jointly with third parties, including: ownership interests in oil, natural gas, other
hydrocarbon and mineral properties or gathering, transportation, processing, storage or related
systems; and entry into, and Investments and expenditures in the form of or pursuant to, operating
agreements, working interests, royalty interests, mineral leases, processing agreements, farm-in
agreements, farm-out agreements, contracts for the sale, transportation or exchange of oil, natural
gas, other hydrocarbons and minerals, production sharing agreements, development agreements, area
of mutual interest agreements, unitization agreements, pooling arrangements, joint bidding
agreements, service contracts, joint venture agreements, partnership agreements (whether general or
limited), limited liability company agreements, subscription agreements, stock purchase agreements,
stockholder agreements and other similar agreements with third parties (including Unrestricted
Subsidiaries).
“Permitted Investment” means an Investment by Superior Energy, the Company or any Restricted
Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon the making of such
Investment, become a Restricted Subsidiary; provided, however, that the primary business of
such Restricted Subsidiary is a Related Business;
(2) another Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its assets to,
the Company or a Restricted Subsidiary; provided, however, that such person’s primary
business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if created or
acquired in the ordinary course of business and payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade terms may include such
concessionaire
14
trade terms as the Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
(5) payroll, travel and similar advances to cover matters that are expected at the time
of such advances ultimately to be treated as expenses for accounting purposes and that are
made in the ordinary course of business;
(6) loans or advances to employees made in the ordinary course of business consistent
with past practices of the Company or such Restricted Subsidiary;
(7) stock, obligations or securities received in settlement of debts created in the
ordinary course of business and owing to the Company or any Restricted Subsidiary or in
satisfaction of judgments;
(8) Hedging Obligations;
(9) Permitted Business Investments in an aggregate amount not to exceed the greater of
(A) $25.0 million and (B) an amount equal to 2.5% of Consolidated Net Tangible Assets as of
the end of the most recent fiscal quarter ending at least 45 days (or, if less, the number
of days after the end of such fiscal quarter as the consolidated financial statements of
Superior Energy shall be provided to the Holders pursuant to this Indenture) prior to the
date of the Permitted Business Investment;
(10) Guarantees of performance or other obligations (other than Indebtedness) arising
in the ordinary course of business, including obligations under master service and charter
agreements, oil and natural gas exploration, development, joint operating, and related
agreements;
(11) any Person to the extent such investment represents the non-cash portion of the
consideration received for an Asset Disposition as permitted pursuant to Section 4.10
hereof; and
(12) other Investments to the extent paid for with common stock of Superior Energy.
“Permitted Liens” means, with respect to any Person:
(1) pledges or deposits by such Person under worker’s compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or deposits to secure public or statutory obligations of such Person or
deposits of cash or United States government bonds to secure surety or appeal bonds to which
such Person is a party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case Incurred in the ordinary course of business;
(2) Liens imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens, in
each case for sums not yet due or being contested in good faith by appropriate proceedings
or other Liens arising out of judgments or awards against such Person with respect to which
such Person shall then be proceeding with an appeal or other proceedings for review and
Liens arising solely by virtue of any statutory or common law provision relating to banker’s
Liens, rights of set-off or similar rights and remedies as to deposit accounts or other
funds maintained with a creditor depository institution; provided, however, that (A) such
deposit account is not a dedicated cash collateral account and is not subject to
restrictions against access by Superior Energy, the Company or any Restricted Subsidiary in
excess of those set forth by regulations
15
promulgated by the Federal Reserve Board and (B) such deposit account is not intended
by Superior Energy, the Company or any Restricted Subsidiary to provide collateral to the
depository institution;
(3) Liens for property taxes not yet subject to penalties for non-payment or which are
being contested in good faith and by appropriate proceedings;
(4) Liens in favor of issuers of surety bonds, letters of credit and similar
instruments issued pursuant to the request of and for the account of such Person in the
ordinary course of its business; provided, however, that such surety bonds, letters of
credit and similar instruments do not constitute Indebtedness, other than Indebtedness
permitted by clause (8) of paragraph (b) of Section 4.09 hereof.
(5) survey exceptions, encumbrances, easements or reservations of, or rights of others
for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of real property or
Liens incidental to the conduct of the business of such Person or to the ownership of its
properties which were not Incurred in connection with Indebtedness and which do not in the
aggregate materially adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;
(6) Liens securing Indebtedness Incurred to finance the construction, purchase or lease
of, or repairs, improvements or additions to, property, plant or equipment of such Person;
provided, however, that the Lien may not extend to any other property owned by such Person
or any of its Restricted Subsidiaries at the time the Lien is Incurred (other than assets
and property affixed or appurtenant thereto or the proceeds or products of such property,
plant or equipment), and the Indebtedness (other than any interest thereon) secured by the
Lien may not be Incurred more than 180 days after the later of the acquisition, completion
or construction, repair, improvement, addition or commencement of full operation of the
property subject to the Lien;
(7) Liens to secure Indebtedness permitted under the provisions described in clauses
(1), (9) and (13) of paragraph (b) of Section 4.09 hereof and Guarantees of such
Indebtedness to the extent permitted by clause (12) of paragraph (b) of Section 4.09 hereof;
(8) Liens existing on the Issue Date;
(9) Liens on property or shares of Capital Stock of another Person at the time such
other Person becomes a Subsidiary of such Person; provided, however, that the Liens may not
extend to any other property owned by such Person or any of its Restricted Subsidiaries
(other than assets and property affixed or appurtenant thereto);
(10) Liens on property at the time such Person or any of its Subsidiaries acquires the
property, including any acquisition by means of a merger or consolidation with or into such
Person or a Subsidiary of such Person; provided, however, that the Liens may not extend to
any other property owned by such Person or any of its Restricted Subsidiaries (other than
assets and property affixed or appurtenant thereto);
(11) Liens securing Indebtedness or other obligations of a Subsidiary of such Person
owing to such Person or a wholly owned Subsidiary of such Person;
16
(12) Liens securing Hedging Obligations so long as such Hedging Obligations relate to
Indebtedness that is, and is permitted to be under this Indenture, secured by a Lien on the
same property securing such Hedging Obligations;
(13) Liens on Superior Energy’s, the Company’s or a Restricted Subsidiary’s Investment
in another Person securing Indebtedness of that Person as long as any such Indebtedness is
not assumed or otherwise guaranteed by Superior Energy, the Company or any Restricted
Subsidiary; and
(14) Liens to secure any Refinancing (or successive Refinancings) as a whole, or in
part, of any Indebtedness secured by any Lien referred to in the foregoing clauses (6), (8),
(9), (10) or (13); provided, however, that:
(A) such new Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which the original
Lien arose, could secure the original Lien (plus improvements and accessions to,
such property or proceeds or distributions thereof); and
(B) the Indebtedness secured by such Lien at such time is not increased to any
amount greater than the sum of (x) the outstanding principal amount or, if greater,
committed amount of the Indebtedness described under clauses (6), (8), (9), (10) or
(12) at the time the original Lien became a permitted Lien and (y) an amount
necessary to pay any fees and expenses, including premiums, related to such
refinancing, refunding, extension, renewal or replacement.
Notwithstanding the foregoing, “Permitted Liens” will not include any Lien described in clauses
(6), (9) or (10) above to the extent such Lien applies to any Additional Assets acquired directly
or indirectly from Net Available Cash pursuant to Section 4.10 hereof and secures any portion of
Indebtedness Incurred in connection with the acquisition or refinancing of such Additional Asset
which exceeds the amount, and corresponding interest thereon, by which the purchase price of such
asset exceeded such Net Available Cash utilized to acquire such asset. For purposes of this
definition, the term “Indebtedness” shall be deemed to include interest on such Indebtedness.
“Person” means any individual, corporation, partnership, limited liability company, joint
venture, association, joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or any other entity.
“Preferred
Stock”, as applied to the Capital Stock of any Person, means Capital Stock of any
class or classes (however designated) which is preferred as to the payment of dividends or
distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of such Person.
“principal” of a note means the principal of the note plus the premium, if any, payable on the
note which is due or overdue or is to become due at the relevant time.
“Private Placement Legend” means the legend set forth in Section 2.06(g)(1) hereof to be
placed on all Notes issued under this Indenture except where otherwise permitted by the provisions
of this Indenture.
“Public Equity Offering” means an underwritten primary public offering of Capital Stock of
Superior Energy (other than Disqualified Stock) pursuant to an effective registration statement
under the
17
Securities Act (other than a registration statement on Form S-4 or Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of Superior Energy), to the
extent the Net Cash Proceeds are contributed to the Company.
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, repay,
prepay, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for,
such indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.
“Refinancing Indebtedness” means Indebtedness that Refinances any Indebtedness of the Company
or any Restricted Subsidiary existing on the Issue Date or Incurred in compliance with this
Indenture, including Indebtedness that Refinances Refinancing Indebtedness; provided, however, that
(1) such Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being Refinanced, (2) such Refinancing Indebtedness has an Average Life at the time
such Refinancing Indebtedness is Incurred that is equal to or greater than the Average Life of the
Indebtedness being Refinanced and (3) such Refinancing Indebtedness has an aggregate principal
amount (or if Incurred with original issue discount, an aggregate issue price) that is equal to or
less than the aggregate principal amount (or if Incurred with original issue discount, the
aggregate accreted value) then outstanding or committed (plus fees and expenses, including any
premium and defeasance costs) under the Indebtedness being Refinanced; provided further, however,
that Refinancing Indebtedness shall not include (A) Indebtedness of a Subsidiary that Refinances
Indebtedness of the Company or (B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary.
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of May 22,
2006, among the Company, the Guarantors and the other parties named on the signature pages thereof,
as such agreement may be amended, modified or supplemented from time to time and, with respect to
any Additional Notes, one or more registration rights agreements among the Company, the Guarantors
and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from
time to time, relating to rights given by the Company to the purchasers of Additional Notes to
register such Additional Notes under the Securities Act.
“Regulation S” means Regulation S promulgated under the Securities Act.
“Regulation S Global Note” means a Global Note substantially in the form of Exhibit A hereto
bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a denomination equal to the
outstanding principal amount of the Notes sold in reliance on Rule 903 of Regulation S.
“Related Business” means any business in which Superior Energy, the Company or any Restricted
Subsidiary was engaged on the Issue Date and any business related, ancillary or complementary to
any business of Superior Energy, the Company or any Restricted Subsidiary in which any of them was
engaged on the Issue Date.
“Responsible Officer,” when used with respect to the Trustee, means any officer within the
corporate trust administration of the Trustee (or any successor group of the Trustee) or any other
officer of the Trustee customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and familiarity with the
particular subject.
18
“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.
“Restricted Global Note” means a Global Note bearing the Private Placement Legend.
“Restricted Payment” with respect to any Person means:
(1) the declaration or payment of any dividends or any other distributions of any sort
in respect of its Capital Stock (including any payment in connection with any merger or
consolidation involving such Person) or similar payment to the direct or indirect holders of
its Capital Stock (other than dividends or distributions payable solely in its Capital Stock
(other than Disqualified Stock) and dividends or distributions payable solely to Superior
Energy, the Company or a Restricted Subsidiary, and other than pro rata dividends or other
distributions made by a Subsidiary that is not a Wholly Owned Subsidiary to minority
stockholders (or owners of an equivalent interest in the case of a Subsidiary that is an
entity other than a corporation));
(2) the purchase, redemption or other acquisition or retirement for value of any
Capital Stock of Superior Energy or the Company held by an Person or of any Capital Stock of
a Restricted Subsidiary held by any Affiliate of Superior Energy or the Company (other than
a Restricted Subsidiary), including the exercise of any option to exchange any Capital Stock
(other than into Capital Stock of Superior Energy that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value, prior to scheduled maturity, scheduled repayment or scheduled sinking fund
payment of any Subordinated Obligations of such Person (other than the purchase, repurchase
or other acquisition of Subordinated Obligations purchased in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case due within
one year of the date of such purchase, repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted Investment) in any Person.
“Restricted Subsidiary” means, without duplication, any Subsidiary of Superior Energy or the
Company which, at the relevant time of determination, is not an Unrestricted Subsidiary.
“Rule 144” means Rule 144 promulgated under the Securities Act.
“Rule 144A” means Rule 144A promulgated under the Securities Act.
“Rule 903” means Rule 903 promulgated under the Securities Act.
“Rule 904” means Rule 904 promulgated under the Securities Act.
“S&P” means Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency
business thereof.
“Sale/Leaseback Transaction” means an arrangement relating to property owned by Superior
Energy, the Company or a Restricted Subsidiary on the Issue Date or thereafter acquired by Superior
Energy, the Company or a Restricted Subsidiary whereby Superior Energy, the Company or a Restricted
Subsidiary transfers such property to a Person and Superior Energy, the Company or a Restricted
Subsidiary leases it from such Person.
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“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Shelf Registration Statement” means the Shelf Registration Statement as defined in the
Registration Rights Agreement.
“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant
Subsidiary” within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, as such
Regulation is in effect on the date of this Indenture.
“Special Purpose Vessel Entity” means a Wholly Owned Subsidiary (1) whose sole nature of
business and purposes are (A) to purchase, construct or acquire liftboats, and related marine
equipment, supplies and other provisions and to hold, charter and otherwise transfer to Superior
Energy, the Company or any Restricted Subsidiary such liftboats, equipment, supplies and other
provisions, (B) to provide (or arrange for the provision of) necessary services for holding or
making available for charter or other transfer to Superior Energy, the Company or any Restricted
Subsidiary such liftboats, equipment, supplies and other provisions, (C) to enter into agreements
necessary to construct, acquire or finance the acquisition and maintenance of its liftboats and
related marine equipment, supplies and other provisions and to hold, charter or otherwise transfer
such liftboats, equipment, supplies and other provisions to Superior Energy, the Company or any
Restricted Subsidiary, (D) to dividend, loan or otherwise divest proceeds from its ownership of
liftboats and related marine equipment, supplies and other provisions and any other income as
determined by its governing body, and in each case in compliance with the terms and agreements of
its financing agreements entered into in the ordinary course of financing such liftboats,
equipment, supplies and other provisions, including those required by any of its MARAD Financiers
and (E) to engage in any lawful act or activity and to exercise any power under the statutory basis
of its formation which are incidental to and necessary, suitable or convenient for the
accomplishment of the purposes specified in the preceding clauses (A) through (D), and (2) that in
fact, and during the time that it does in fact, charter its liftboats solely to Superior Energy,
the Company or any Restricted Subsidiary, in each case as soon as reasonably and commercially
possible following the time that such liftboats are, mechanically, ready and available for charter
and on terms and provisions acceptable to such hirers based on a “bareboat” charter, which terms
shall include charter payment terms that are fundamentally based on costs and expenses incurred by
such Wholly Owned Subsidiary in connection with the performance of its business and purposes
described in the preceding clause (1) and a base charter term period that ends no earlier than one
year following the stated maturity date of the Notes.
“Stated Maturity” means, with respect to any security, the date specified in such security as
the fixed date on which the final payment of principal of such security is due and payable,
including pursuant to any mandatory redemption provision (but excluding any provision providing for
the repurchase of such security at the option of the holder thereof upon the happening of any
contingency unless such contingency has occurred).
“Subordinated Obligation” means with respect to a Person, any Indebtedness of such Person
(whether outstanding on the Issue Date or thereafter Incurred) which is subordinate or junior in
right of payment to the Notes or a Subsidiary Guarantee of such Person, as the case may be,
pursuant to a written agreement to that effect.
“Subsidiary” means, with respect to any Person, (1) any corporation, limited liability
company, association or other business entity of which more than 50% of the total voting power of
shares of Voting Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by (A) such Person,
20
(B) such Person and one or more Subsidiaries of such Person or (C) one or more Subsidiaries of
such Person, and (2) any partnership (A) the sole general partner or the managing general partner
of which is such Person or a Subsidiary of such Person or (B) the only general partners of which
are such Person or one or more Subsidiaries of such Person (or any combination thereof).
“Subsidiary Guarantor” means ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, L.L.C., Concentric Pipe and Tool Rentals,
L.L.C., Connection Technology, L.L.C., CSI Technologies, LLC, Drilling Logistics, L.L.C., F.&F.
Wireline Service, L.L.C., Fastorq, L.L.C., H.B. Rentals, L.C., International Snubbing Services,
L.L.C., J.R.B. Consultants, Inc., Non-Magnetic Rental Tools, L.L.C., Production Management
Industries, L.L.C., ProActive Compliance, L.L.C., Stabil Drill Specialties, L.L.C., Sub-Surface
Tools, L.L.C., Superior Canada Holding, Inc., Superior Energy Services, L.L.C., Superior Inspection
Services, Inc., SELIM LLC, SEGEN LLC, SE Finance LP, SEMO, L.L.C., SEMSE, L.L.C., SPN Resources,
LLC, Blowout Tools, Inc., Universal Fishing and Rental Tools, Inc., Wild Well Control, Inc. and
Workstrings, L.L.C., and any other Subsidiary of Superior Energy or the Company that Guarantees the
Company’s obligations with respect to the Notes, and in each case, any successor Person; provided
that any Person constituting a Subsidiary Guarantor as described above shall cease to constitute a
Subsidiary Guarantor when its respective Subsidiary Guarantee is released in accordance with the
terms of this Indenture.
“Subsidiary Guarantee” means a Guarantee by a Subsidiary Guarantor of the Company’s
obligations with respect to the Notes.
“Superior Energy” means Superior Energy Services, Inc., a Delaware corporation, and any
successor corporation.
“Superior Energy Guarantee” means the Guarantee by Superior Energy of the Company’s
obligations with respect to the Notes contained in this Indenture.
“Temporary Cash Investments” means any of the following:
(1) any investment in direct obligations of the United States of America or any agency
thereof or obligations guaranteed by the United States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit and money market
deposits maturing within 180 days of the date of acquisition thereof issued by a bank or
trust company which is organized under the laws of the United States of America, any state
thereof or any foreign country recognized by the United States, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess of $50.0 million
(or the foreign currency equivalent thereof) and has outstanding debt which is rated “A” (or
such similar equivalent rating) or higher by at least one nationally recognized statistical
rating organization (as defined in Rule 436 under the Securities Act) or any money-market
fund sponsored by a registered broker dealer or mutual fund distributor;
(3) repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (1) above entered into with a bank meeting the
qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than 90 days after the date of
acquisition, issued by a corporation (other than an Affiliate of the Company) organized and
in existence under the laws of the United States of America or any foreign country
recognized by the United States of America with a rating at the time as of which any
investment therein is made
21
of “P-1” (or higher) according to ▇▇▇▇▇’▇ Investors Service, Inc. or “A-1” (or higher)
according to Standard & Poor’s Ratings Group; and
(5) investments in securities with maturities of six months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof, and rated at
least “A” by Standard & Poor’s Ratings Group or “A” by ▇▇▇▇▇’▇ Investors Service, Inc.
“TIA” means the Trust Indenture Act of 1939, as amended (15 U.S.C. §§ 77aaa-77bbbb).
“Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption
date of United States Treasury securities with a constant maturity (as compiled and published in
the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available
at least two business days prior to the redemption date (or, if such Statistical Release is no
longer published, any publicly available source of similar market data)) most nearly equal to the
period from the redemption date to June 1, 2010; provided, however, that if the period from the
redemption date to June 1, 2010, is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year will be used.
“Trustee” means The Bank of New York Trust Company, N.A. until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means the successor
serving hereunder.
“Unrestricted Definitive Note” means a Definitive Note that does not bear and is not required
to bear the Private Placement Legend.
“Unrestricted Global Note” means a Global Note that does not bear and is not required to bear
the Private Placement Legend.
“Unrestricted Subsidiary” means (i) at any time that it is a Special Purpose Vessel Entity,
Superior Energy Liftboats, L.L.C., and (ii) any other Subsidiary of the Company that is designated
by the Board of Directors of Superior Energy as an Unrestricted Subsidiary pursuant to a board
resolution, but only to the extent that each such Subsidiary described in the preceding clauses (i)
and (ii):
(1) has no Indebtedness to any Person other than (A) Non-Recourse Debt or (B)
Indebtedness owed to the Company, Superior Energy or any Restricted Subsidiary;
(2) is not party to any agreement, contract, arrangement or understanding with the
Company, Superior Energy or any Restricted Subsidiary unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the Company,
Superior Energy or such Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company nor Superior Energy, nor any
Restricted Subsidiary has any direct or indirect obligation (A) to subscribe for additional
Capital Stock or (B) to maintain or preserve such Person’s financial condition or to cause
such Person to achieve any specified levels of operating results; and
(4) has not Guaranteed or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company, Superior Energy or any Restricted Subsidiary.
22
Any such designation by the Board of Directors of Superior Energy shall be evidenced to the
Trustee by filing with the Trustee a certified copy of the board resolution giving effect to such
designation and an Officer’s Certificate of Superior Energy certifying that such designation
complied with the foregoing conditions and was permitted by Section 4.07 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted
Subsidiary or, in addition to such referenced requirements, with respect to Superior Energy
Liftboats, L.L.C. or any other Person that constitutes a Special Purpose Vessel Entity, Superior
Energy Liftboats, L.L.C. or such other Person would at any time fail to constitute the Special
Purpose Vessel Entity, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of
this Indenture, and any Indebtedness of that Subsidiary shall be deemed to be incurred by a
Restricted Subsidiary of the Company as of such date (and, if such Indebtedness is not permitted to
be incurred as of such date under paragraph (a) of Section 4.09 hereof, the Company shall be in
default of such Section 4.09).
The Board of Directors of Superior Energy may at any time designate any Unrestricted
Subsidiary to be a Restricted Subsidiary; provided that the designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such
Unrestricted Subsidiary and the designation shall only be permitted if:
(1) such Indebtedness is permitted under Section 4.09 calculated on a pro forma basis
as if such designation had occurred at the beginning of the four-quarter reference period;
and
(2) no Default would occur or be in existence following such designation.
“U.S. Government Obligations” means direct obligations (or certificates representing an
ownership interest in such obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable at the Company’s option.
“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities
Act.
“Vessel Guarantee” has the meaning set forth in clause (1) of the defined term “Non-Recourse
Debt.”
“Voting Stock” of a Person means all classes of Capital Stock or other interest (including
partnership interests) of such person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.
“Wholly Owned Subsidiary” means a Restricted Subsidiary all the Capital Stock of which (other
than directors’ qualifying shares or shares required by applicable law to be held by a Person other
than the Company or a Wholly Owned Subsidiary) is owned by the Company or one or more Wholly Owned
Subsidiaries.
Section 1.02 Other Definitions.
| Defined in | ||||
| Term | Section | |||
“Affiliate Transaction” |
4.11 | |||
“Asset Sale Offer” |
3.09 | |||
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| Defined in | ||||
| Term | Section | |||
“Authentication Order” |
2.02 | |||
“Change of Control” |
4.14 | |||
“Change of Control Offer” |
4.15 | |||
“Change of Control Payment” |
4.15 | |||
“Change of Control Payment Date” |
4.15 | |||
“Covenant Defeasance” |
8.03 | |||
“DTC” |
2.03 | |||
“Event of Default” |
6.01 | |||
“Initial Lien” |
4.12 | |||
“Legal Defeasance” |
8.02 | |||
“Offer Amount” |
3.09 | |||
“Offer Period” |
3.09 | |||
“Paying Agent” |
2.03 | |||
“Permitted Debt” |
4.09 | |||
“Payment Default” |
6.01 | |||
“Purchase Date” |
3.09 | |||
“Registrar” |
2.03 | |||
“Successor Company” |
5.01 | |||
“Suspended Covenants” |
4.19 | |||
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
“indenture securities” means the Notes;
“indenture security Holder” means a Holder of a Note;
“indenture to be qualified” means this Indenture;
“indenture trustee” or “institutional trustee” means the Trustee; and
“obligor” on the Notes and the Note Guarantees means the Company and the Guarantors,
respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively.
All other terms used in this Indenture that are defined by the TIA, defined by TIA reference
to another statute or defined by SEC rule under the TIA have the meanings so assigned to them.
Section 1.04 Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
24
(3) “or” is not exclusive;
(4) words in the singular include the plural, and in the plural include the singular;
(5) “will” shall be interpreted to express a command;
(6) provisions apply to successive events and transactions; and
(7) references to sections of or rules under the Securities Act will be deemed to
include substitute, replacement of successor sections or rules adopted by the SEC from time
to time.
ARTICLE 2
THE NOTES
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee’s certificate of authentication will be substantially
in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by
law, stock exchange rule or usage. Each Note will be dated the date of its authentication. The
Notes shall be in denominations of $2,000 and integral multiples of $1,000.
The terms and provisions contained in the Notes will constitute, and are hereby expressly
made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution
and delivery of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. However, to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form will be substantially in the form of Exhibit A
hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the
Global Note” attached thereto). Notes issued in definitive form will be substantially in the form
of Exhibit A hereto (but without the Global Note Legend thereon and without the “Schedule of
Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such
of the outstanding Notes as will be specified therein and each shall provide that it represents the
aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the
aggregate principal amount of outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a
Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.06 hereof.
Section 2.02 Execution and Authentication.
At least one Officer must sign the Notes for the Company by manual or facsimile signature.
If an Officer whose signature is on a Note no longer holds that office at the time a Note is
authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature of the Trustee. The
signature will be conclusive evidence that the Note has been authenticated under this Indenture.
25
The Trustee will, upon receipt of a written order of the Company signed by one Officer (an
“Authentication Order”), authenticate Notes for original issue that may be validly issued under
this Indenture, including any Additional Notes plus Notes issued to pay Additional Interest
pursuant to paragraph 2 of the Notes. The aggregate principal amount of Notes outstanding at any
time may not exceed the aggregate principal amount of Notes authorized for issuance by the Company
pursuant to one or more Authentication Orders, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate
Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each
reference in this Indenture to authentication by the Trustee includes authentication by such agent.
An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of
the Company.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be presented for registration of
transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for
payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more additional paying
agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any
additional paying agent. The Company may change any Paying Agent or Registrar without notice to
any Holder. The Company will notify the Trustee in writing of the name and address of any Agent
not a party to this Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries
may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with
respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act
as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the
Paying Agent for the payment of principal, premium or Additional Interest, if any, or interest on
the Notes, and will notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay all money held by
it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating
to the Company, the Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of all Holders and shall otherwise comply with TIA
§ 312(a). If the Trustee is not the Registrar, the Company will furnish to the Trustee at least
seven Business Days before each interest payment date and at such other times as the Trustee may
request in writing, a list in
26
such form and as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA § 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a
whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged
by the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the Depositary that it is unwilling
or unable to continue to act as Depositary or that it is no longer a clearing agency
registered under the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such notice from the Depositary;
(2) the Company in its sole discretion determines that the Global Notes (in whole but
not in part) should be exchanged for Definitive Notes and delivers a written notice to such
effect to the Trustee; or
(3) there has occurred and is continuing a Default or Event of Default with respect to
the Notes.
Upon the occurrence of either of the preceding events in (1) or (2) above, Definitive Notes
shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may
be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every
Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion
thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and
delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a), however, beneficial interests in a
Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and
exchange of beneficial interests in the Global Notes will be effected through the Depositary, in
accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial
interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to
those set forth herein to the extent required by the Securities Act. Transfers of beneficial
interests in the Global Notes also will require compliance with either subparagraph (1) or (2)
below, as applicable, as well as one or more of the other following subparagraphs, as applicable:
(1) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in
any Restricted Global Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in the same Restricted Global Note in accordance with the
transfer restrictions set forth in the Private Placement Legend. Beneficial interests in
any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the transfers
described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In
connection with all transfers and exchanges of beneficial interests that are not subject to
Section 2.06(b)(1) above, the transferor of such beneficial interest must deliver to the
Registrar either:
27
(A) both:
(i) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial interest to be
transferred or exchanged; and
(ii) instructions given in accordance with the Applicable Procedures
containing information regarding the Participant account to be credited with
such increase; or
(B) both:
(i) a written order from a Participant or an Indirect Participant given
to the Depositary in accordance with the Applicable Procedures directing the
Depositary to cause to be issued a Definitive Note in an amount equal to the
beneficial interest to be transferred or exchanged; and
(ii) instructions given by the Depositary to the Registrar containing
information regarding the Person in whose name such Definitive Note shall be
registered to effect the transfer or exchange referred to in (1) above;
Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof,
the requirements of this Section 2.06(b)(2) shall be deemed to have been satisfied upon receipt by
the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of
such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the
requirements for transfer or exchange of beneficial interests in Global Notes contained in this
Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(3) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial
interest in any Restricted Global Note may be transferred to a Person who takes delivery
thereof in the form of a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a beneficial interest in
the 144A Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transferee will take delivery in the form of a beneficial interest in
the Regulation S Global Note, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (2) thereof; and
(C) if the transferee will take delivery in the form of a beneficial interest in
the IAI Global Note, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for
Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any
Restricted
28
Global Note may be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies
with the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of the beneficial
interest to be transferred, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal that it is not
(i) a Broker-Dealer, (ii) a Person participating in the distribution of the Exchange
Notes or (iii) a Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a beneficial interest
in an Unrestricted Global Note, a certificate from such holder in the form
of Exhibit C hereto, including the certifications in item (1)(a) thereof; or
(ii) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note, a certificate from such holder in the form of
Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an
Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal
amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to
Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global
Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.
(1) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If
any holder of a beneficial interest in a Restricted Global Note proposes to exchange such
29
beneficial interest for a Restricted Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global Note
proposes to exchange such beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C hereto, including the
certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in accordance with
Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such beneficial interest is being transferred pursuant to an exemption
from the registration requirements of the Securities Act in accordance with Rule 144,
a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such beneficial interest is being transferred to the Company or any of
its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an effective
registration statement under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall
authenticate and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in
a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names
and in such authorized denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose
names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c)(1) shall bear the Private
Placement Legend and shall be subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes.
A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial
30
interest for an Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only
if:
(A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the holder of such beneficial
interest, in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (i) a Broker-Dealer,
(ii) a Person participating in the distribution of the Exchange Notes or (iii) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(b) thereof; or
(ii) if the holder of such beneficial interest in a Restricted Global
Note proposes to transfer such beneficial interest to a Person who shall
take delivery thereof in the form of an Unrestricted Definitive Note, a
certificate from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes.
If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange
such beneficial interest for a Definitive Note or to transfer such beneficial interest to a
Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction
of the conditions set forth in Section 2.06(b)(2) hereof, the Trustee will cause the
aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company will execute and the Trustee will authenticate
and deliver to the Person designated in the instructions a Definitive Note in the
appropriate principal amount. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(3) will be registered in such name or names and in
such authorized denomination or denominations as the holder of such beneficial interest
requests through instructions to the Registrar from or through the Depositary and the
Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange
for a beneficial interest pursuant to this Section 2.06(c)(3) will not bear the Private
Placement Legend.
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(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(1) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If
any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial interest in a Restricted
Global Note, then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to exchange such
Note for a beneficial interest in a Restricted Global Note, a certificate from such
Holder in the form of Exhibit C hereto, including the certifications in item (2)(b)
thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB in
accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person
in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in item (2)
thereof;
(D) if such Restricted Definitive Note is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in accordance with
Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an Institutional
Accredited Investor in reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs (B) through (D) above, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by item (3) thereof, if
applicable;
(F) if such Restricted Definitive Note is being transferred to the Company or
any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such Restricted Definitive Note is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item (3)(c)
thereof,
the Trustee will cancel the Restricted Definitive Note, increase or cause to be
increased the aggregate principal amount of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global
Note, in the case of clause (C) above, the Regulation S Global Note, and in all
other cases, the IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.
A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in
an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note
only if:
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(A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating
in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration Statement in
accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer
Registration Statement in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive Notes proposes to exchange such
Notes for a beneficial interest in the Unrestricted Global Note, a
certificate from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(ii) if the Holder of such Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery thereof in the form of a
beneficial interest in the Unrestricted Global Note, a certificate from such
Holder in the form of Exhibit B hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests or if the Applicable Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that such exchange or transfer
is in compliance with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no longer required in order
to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in this Section
2.06(d)(2), the Trustee will cancel the Definitive Notes and increase or cause to be
increased the aggregate principal amount of the Unrestricted Global Note.
(3) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.
A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial
interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who
takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note
at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will
cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the
aggregate principal amount of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a beneficial interest is
effected pursuant to subparagraphs (2)(B), (2)(D) or (3) above at a time when an
Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt
of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will
authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of Definitive Notes so transferred.
33
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder
of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the
Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration
of transfer or exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in
writing. In addition, the requesting Holder must provide any additional certifications, documents
and information, as applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted
Definitive Note may be transferred to and registered in the name of Persons who take
delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to Rule 144A, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the certifications
in item (1) thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the
transferor must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to any other exemption from the
registration requirements of the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted
Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note
or transferred to a Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the Exchange Offer in
accordance with the Registration Rights Agreement and the Holder, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in the applicable
Letter of Transmittal that it is not (i) a Broker-Dealer, (ii) a Person participating
in the distribution of the Exchange Notes or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf Registration Statement
in accordance with the Registration Rights Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange
Offer Registration Statement in accordance with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate from
such Holder in the form of Exhibit C hereto, including the certifications in
item (1)(d) thereof; or
34
(ii) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the Registrar so
requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the Securities Act
and that the restrictions on transfer contained herein and in the Private Placement
Legend are no longer required in order to maintain compliance with the Securities
Act.
(3) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of
Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof
in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such
a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the
Registration Rights Agreement, the Company will issue and, upon receipt of an Authentication Order
in accordance with Section 2.02 hereof, the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of the beneficial interests in the Restricted Global Notes accepted for
exchange in the Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not participating in a
distribution of the Exchange Notes and (C) they are not affiliates (as defined in Rule 144)
of the Company; and
(2) Unrestricted Definitive Notes in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange
Offer by Persons that certify in the applicable Letters of Transmittal that (A) they are not
Broker-Dealers, (B) they are not participating in a distribution of the Exchange Notes and
(C) they are not affiliates (as defined in Rule 144) of the Company.
Concurrently with the issuance of such Notes, the Trustee will cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company will
execute and the Trustee will authenticate and deliver to the Persons designated by the Holders of
Definitive Notes so accepted Unrestricted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends will appear on the face of all Global Notes and Definitive
Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions
of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global Note and each
Definitive Note (and all Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
“THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER ▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT
35
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT. THE
HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) (a) IN THE UNITED STATES TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (c) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (d) TO AN INSTITUTIONAL
“ACCREDITED INVESTOR” (AS DEFINED IN RULE 501 (a) (1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
“INSTITUTIONAL ACCREDITED INVESTOR”)) THAT, PRIOR TO SUCH TRANSFER, FURNISHES THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS
THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUER THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT OR (e) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO
REQUESTS), (2) TO THE ISSUER OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE.”
(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued
pursuant to subparagraphs (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or
(f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution
thereof) will not bear the Private Placement Legend.
(2) Global Note Legend. Each Global Note will bear a legend in substantially the
following form:
“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR
ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS
MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED IN
WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS GLOBAL NOTE MAY BE
DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (4) THIS
GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY
NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY
36
THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) (“DTC”), TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.”
(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests
in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note
has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be
returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any
time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or
transferred to a Person who will take delivery thereof in the form of a beneficial interest in
another Global Note or for Definitive Notes, the principal amount of Notes represented by such
Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the
beneficial interest is being exchanged for or transferred to a Person who will take delivery
thereof in the form of a beneficial interest in another Global Note, such other Global Note will be
increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges, the Company will execute and
the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an
Authentication Order in accordance with Section 2.02 hereof or at the Registrar’s request.
(2) No service charge will be made to a Holder of a beneficial interest in a Global
Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such transfer taxes or
similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10,
3.06, 3.09, 4.10, 4.14 and 9.05 hereof).
(3) The Registrar will not be required to register the transfer of or exchange of any
Note selected for redemption in whole or in part, except the unredeemed portion of any Note
being redeemed in part.
(4) All Global Notes and Definitive Notes issued upon any registration of transfer or
exchange of Global Notes or Definitive Notes will be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this Indenture, as the
Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.
(5) Neither the Registrar nor the Company will be required:
(A) to issue, to register the transfer of or to exchange any Notes during a
period beginning at the opening of business 15 days before the day of any selection
of
37
Notes for redemption under Section 3.02 hereof and ending at the close of
business on the day of selection;
(B) to register the transfer of or to exchange any Note selected for redemption
in whole or in part, except the unredeemed portion of any Note being redeemed in
part; or
(C) to register the transfer of or to exchange a Note between a record date and
the next succeeding interest payment date.
(6) Prior to due presentment for the registration of a transfer of any Note, the
Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is
registered as the absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes, and none of the Trustee,
any Agent or the Company shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and Definitive Notes in accordance with
the provisions of Section 2.02 hereof.
(8) All certifications, certificates and Opinions of Counsel required to be submitted
to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or
exchange may be submitted by facsimile.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives
evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue
and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if
the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond
must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of
them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a
Note.
Every replacement Note is an additional obligation of the Company and will be entitled to all
of the benefits of this Indenture equally and proportionately with all other Notes duly issued
hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the Trustee except for
those canceled by it, those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof, and those described
in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does
not cease to be outstanding because the Company or an Affiliate of the Company holds the Note;
however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be
outstanding for purposes of Section 3.07(a) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to
be outstanding and interest on it ceases to accrue.
38
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof)
holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date,
then on and after that date such Notes will be deemed to be no longer outstanding and will cease to
accrue interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount of Notes have concurred in
any direction, waiver or consent, Notes owned by the Company or any Guarantor, or by any Person
directly or indirectly controlling or controlled by or under direct or indirect common control with
the Company or any Guarantor, will be considered as though not outstanding, except that for the
purposes of determining whether the Trustee will be protected in relying on any such direction,
waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the Company may prepare and the
Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary
Notes will be substantially in the form of certificated Notes but may have variations that the
Company considers appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate
definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and
Paying Agent will forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled
Notes (subject to the record retention requirement of the Exchange Act). The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it will pay the defaulted
interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in each case at the
rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and the date of the
proposed payment. The Company will fix or cause to be fixed each such special record date and
payment date; provided that no such special record date may be less than 10 days prior to the
related payment date for such defaulted interest. At least 15 days before the special record date,
the Company (or, upon the written request of the Company, the Trustee in the name and at the
expense of the Company) will mail or cause to be mailed to Holders a notice that states the special
record date, the related payment date and the amount of such interest to be paid.
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ARTICLE 3
REDEMPTION AND PREPAYMENT
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption provisions of
Section 3.07 hereof, it must furnish to the Trustee, at least 30 days but not more than 60 days
before a redemption date, an Officer’s Certificate setting forth:
(1) the clause of this Indenture pursuant to which the redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any
time, the Trustee will select Notes for redemption or purchase on a pro rata basis unless otherwise
required by law, applicable stock exchange requirements or DTC.
In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or
purchased will be selected, unless otherwise provided herein, not less than 10 nor more than 60
days prior to the redemption or purchase date by the Trustee from the outstanding Notes not
previously called for redemption or purchase.
Notes and portions of Notes selected will be in amounts of $1,000 or whole multiples of
$1,000; except that if all of the Notes of a Holder are to be redeemed or purchased, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture
that apply to Notes called for redemption or purchase also apply to portions of Notes called for
redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 10 days but not more than 60 days
before a redemption date, the Company will mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Notes are to be redeemed at its registered address,
except that redemption notices may be mailed more than 60 days prior to a redemption date if the
notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of
this Indenture pursuant to Articles 8 or 11 hereof.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of the principal amount of such
Note to be redeemed and that, after the redemption date upon surrender of such Note, a new
Note
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or Notes in principal amount equal to the unredeemed portion will be issued upon
cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered to the Paying Agent to collect
the redemption price;
(6) that, unless the Company defaults in making such redemption payment, interest on
Notes called for redemption ceases to accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this Indenture pursuant to which the
Notes called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy of the CUSIP
number, if any, listed in such notice or printed on the Notes.
At the Company’s request, the Trustee will give the notice of redemption in the Company’s name
and at its expense; provided, however, that the Company has delivered to the Trustee, at least 45
days prior to the redemption date, an Officer’s Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided in the preceding
paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the redemption price. A
notice of redemption may not be conditional.
Section 3.05 Deposit of Redemption or Purchase Price.
On or prior to 11:00 a.m. New York City Time on the Business Day prior to the redemption or
purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Additional Interest, if any, on
all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly
return to the Company any money deposited with the Trustee or the Paying Agent by the Company in
excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest
and Additional Interest, if any, on, all Notes to be redeemed or purchased.
If the Company complies with the provisions of the preceding paragraph, on and after the
redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes
called for redemption or purchase. If a Note is redeemed or purchased on or after an interest
record date but on or prior to the related interest payment date, then any accrued and unpaid
interest shall be paid to the Person in whose name such Note was registered at the close of
business on such record date. If any Note called for redemption or purchase is not so paid upon
surrender for redemption or purchase because of the failure of the Company to comply with the
preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or
purchase date until such principal is paid, and to the extent lawful on any interest not paid on
such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.
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Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and,
upon receipt of an Authentication Order, the Trustee will authenticate for the Holder at the
expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased
portion of the Note surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to June 1, 2009, the Company may on any one or more occasions redeem up
to 35% of the aggregate principal amount of Notes issued under this Indenture at a redemption price
of 106.875% of the principal amount thereof, plus accrued and unpaid interest and Additional
Interest, if any, to the redemption date, with the Net Cash Proceeds of one or more Public Equity
Offerings; provided that:
(1) at least 65% of the aggregate principal amount of Notes (which includes issued
Additional Notes, if any) issued under this Indenture (excluding Notes held by Superior
Energy and its Subsidiaries) remains outstanding immediately after the occurrence of such
redemption; and
(2) the redemption occurs within 90 days of the date of the closing of such Public
Equity Offering.
(b) Except pursuant to the preceding paragraph, the Notes will not be redeemable at the
Company’s option prior to June 1, 2010.
(c) On or after June 1, 2010, the Company may redeem all or a part of the Notes upon not less
than 10 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and Additional Interest, if any,
on the Notes redeemed to the applicable redemption date, if redeemed during the twelve-month period
beginning on June 1 of the years indicated below, subject to the rights of Holders on the relevant
record date to receive interest on the relevant interest payment date:
| Year | Percentage | |||
2010 |
103.438 | % | ||
2011 |
101.719 | % | ||
2012 and thereafter |
100.000 | % | ||
At any time prior to June 1, 2010, the Company may also redeem all or a part of the Notes,
upon not less than 10 nor more than 60 days prior notice mailed by first-class mail to each
Holder’s registered address, at a redemption price equal to 100% of the principal amount of Notes
redeemed plus the Applicable Premium as of, and accrued and unpaid interest and Additional
Interest, if any, to the applicable date of redemption, subject to the rights of Holders on the
relevant record date to receive interest due on the relevant interest payment date.
Unless the Company defaults in the payment of the redemption price, interest will cease to
accrue on the Notes or portions thereof called for redemption on the applicable redemption date.
(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
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Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption or sinking fund payments with respect
to the Notes. However, under the circumstances in Sections 4.10 and 4.14 hereof, the Company may
be required to offer to purchase the Notes. The Company may at any time and from time to time
purchase Notes in the open market or otherwise.
Section 3.09 Offer to Purchase by Application of Net Available Cash.
In the event that, pursuant to Section 4.10 hereof, the Company is required to commence an
offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will follow the procedures
specified below.
The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that
is pari passu with the Notes containing provisions similar to those set forth in this Indenture
with respect to offers to purchase or redeem with the proceeds of sales of assets. The Asset Sale
Offer will remain open for a period of at least 20 Business Days following its commencement and not
more than 30 Business Days, except to the extent that a longer period is required by applicable law
(the “Offer Period”). No later than three Business Days after the termination of the Offer Period
(the “Purchase Date”), the Company will apply all Net Available Cash (the “Offer Amount”) to the
purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or,
if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in
response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same
manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on or before the related
interest payment date, any accrued and unpaid interest and Additional Interest, if any, will be
paid to the Person in whose name a Note is registered at the close of business on such record date,
and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail, a
notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice will contain
all instructions and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:
(1) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section
4.10 hereof and the length of time the Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase Date;
(3) that any Note not tendered or accepted for payment will continue to accrue
interest;
(4) that, unless the Company defaults in making such payment, any Note accepted for
payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase
Date;
(5) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may
elect to have Notes purchased in integral multiples of $1,000 only;
(6) that Holders electing to have Notes purchased pursuant to any Asset Sale Offer will
be required to surrender the Note, with the form entitled “Option of Holder to Elect
Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the
Company, a
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Depositary, if appointed by the Company, or a Paying Agent at the address specified in
the notice at least three days before the Purchase Date;
(7) that Holders will be entitled to withdraw their election if the Company, the
Depositary or the Paying Agent, as the case may be, receives, not later than the expiration
of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and other pari passu Indebtedness
surrendered by holders thereof exceeds the Offer Amount, the Company will select the Notes
and other pari passu Indebtedness to be purchased on a pro rata basis based on the principal
amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as
may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on
a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and will deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officer’s Certificate stating that such Notes or portions thereof were accepted
for payment by the Company in accordance with the terms of this Section 3.09. The Company, the
Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than
five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and
the Company will promptly issue a new Note, and the Trustee, upon written request from the Company,
will authenticate and mail or deliver (or cause to be transferred by book entry) such new Note to
such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any
Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof.
The Company will publicly announce the results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase pursuant to this
Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.
ARTICLE 4
COVENANTS
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium, if any, and interest and
Additional Interest, if any, on, the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, and interest and Additional Interest, if any will be considered paid on
the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available
funds and designated for and sufficient to pay all principal, premium, if any, and interest then
due. The Company will pay all Additional Interest, if any, in the same manner on the dates and in
the amounts set forth in the Registration Rights Agreement.
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The Company will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it will pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Additional Interest (without regard to any applicable grace period) at the same rate
to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, the City of New York, an office or
agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the location, and any change
in the location, of such office or agency. If at any time the Company fails to maintain any such
required office or agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office
of the Trustee.
The Company may also from time to time designate one or more other offices or agencies where
the Notes may be presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission will in any
manner relieve the Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby designates the New York City office of the Trustee’s Affiliate, The Bank of
New York, as one such office or agency of the Company in accordance with Section 2.03 hereof.
Section 4.03 SEC Reports.
(a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are
outstanding, Superior Energy will furnish to the Holders of Notes or cause the Trustee to furnish
to the Holders of Notes, within the time periods specified in the SEC’s rules and regulations:
(1) all quarterly and annual reports that would be required to be filed with the SEC on
Forms 10-Q and 10-K if Superior Energy were required to file reports; and
(2) all current reports that would be required to be filed with the SEC on Form 8-K if
Superior Energy were required to file such reports.
All such reports will be prepared in all material respects in accordance with all of the rules
and regulations applicable to such reports. Each annual report on Form 10-K will include a report
on Superior Energy’s consolidated financial statements by Superior Energy’s certified independent
accountants. In addition, Superior Energy will file a copy of each of the reports referred to in
clauses (1) and (2) above with the SEC for public availability within the time periods specified in
the rules and regulations applicable to such reports (unless the SEC will not accept such a filing)
and will post the reports on its website within those time periods. The Company will at all times
comply with TIA § 314(a).
If, at any time, Superior Energy is no longer subject to the periodic reporting requirements
of the Exchange Act for any reason, Superior Energy will nevertheless continue filing the reports
specified in the preceding paragraph with the SEC within the time periods specified above unless
the SEC will not accept such a filing. Superior Energy will not take any action for the purpose of
causing the SEC not to
45
accept any such filings. If, notwithstanding the foregoing, the SEC will not accept Superior
Energy’s filings for any reason, the Company will post the reports referred to in the preceding
paragraph on its website within the time periods that would apply if Superior Energy were required
to file those reports with the SEC.
(b) For so long as any Notes remain outstanding, if at any time they are not required to file
with the SEC the reports required by paragraphs (a) and (b) of this Section 4.03, the Company and
the Guarantors will furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor is so required under the
TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officer’s
Certificate stating that a review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing Officer with a view to
determining whether the Company has kept, observed, performed and fulfilled its obligations under
this Indenture, and further stating, as to each such Officer signing such certificate, that to the
best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in default in the performance or observance of any
of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default has
occurred, describing all such Defaults or Events of Default of which he or she may have knowledge
and what action the Company is taking or proposes to take with respect thereto) and that to the
best of his or her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is prohibited or if such
event has occurred, a description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the American Institute of
Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03
above shall be accompanied by a written statement of Superior Energy’s independent public
accountants (who shall be a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to their attention that
would lead them to believe that Superior Energy has violated any provisions of Article 4 or Article
5 hereof or, if any such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will deliver to the Trustee,
forthwith, and in any event not later than 10 days after any Officer becomes aware of any event
that this giving of notice or the lapse of time or both would become a Default or Event of Default,
an Officer’s Certificate specifying such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay, prior to delinquency,
all material taxes, assessments, and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment is not adverse in any
material respect to the Holders of the Notes.
46
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and covenants that it will not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law has been enacted.
Section 4.07 Limitation on Restricted Payments.
(a) Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to make a Restricted Payment if at the time Superior Energy,
the Company or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of Indebtedness pursuant
to paragraph (a) of Section 4.09 hereof; or
(3) the aggregate amount of such Restricted Payment and all other Restricted Payments
since May 2, 2001 would exceed the sum of (without duplication):
(A) 50% of the Consolidated Net Income accrued during the period (treated as one
accounting period) from April 1, 2001 to the end of the most recent fiscal quarter
ending at least 45 days (or, if less, the number of days after the end of such fiscal
quarter as the consolidated financial statements of Superior Energy and its
Subsidiaries, consisting of, at least, the Company and the Restricted Subsidiaries,
shall be provided to the Holders pursuant to this Indenture) prior to the date of
such Restricted Payment (or, in case such Consolidated Net Income shall be a deficit,
minus 100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received by Superior Energy from the
issuance or sale of its Capital Stock (other than Disqualified Stock) subsequent to
May 2, 2001 (other than an issuance or sale to any of its Subsidiaries and other than
an issuance or sale to an employee stock ownership plan or to a trust established by
Superior Energy or any of its Subsidiaries for the benefit of their employees) or the
fair market value of the consideration (if other than cash) from such issue or sale
of Capital Stock and 100% of any capital cash contribution received by Superior
Energy from its stockholders subsequent to May 2, 2001; plus
(C) the amount by which Indebtedness of Superior Energy, the Company or any
Restricted Subsidiary is reduced on Superior Energy’s consolidated balance sheet,
consisting of, at least, the Company and the Restricted Subsidiaries, upon the
conversion or exchange (other than by any Subsidiary of Superior Energy) subsequent
to the Issue Date of any Indebtedness of Superior Energy, the Company or any
Restricted Subsidiary convertible or exchangeable for Capital Stock (other than
Disqualified Stock) of Superior Energy (less the amount of any cash, or the fair
market value of any other property, distributed by Superior Energy upon such
conversion or exchange); plus
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(D) an amount equal to the sum of (i) the net reduction in the Investments
(other than Permitted Investments) made by Superior Energy, the Company or any
Restricted Subsidiary in any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds realized on the sale of such
Investment, proceeds representing the return of capital (excluding dividends and
distributions), in each case received by Superior Energy, the Company or any
Restricted Subsidiary, and (ii) to the extent such Person is an Unrestricted
Subsidiary, the portion (proportionate to the Company’s equity interest in such
Subsidiary) of the fair market value of the net assets of such Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum shall not exceed, in the case
of any such Person or Unrestricted Subsidiary, the amount of Investments (excluding
Permitted Investments) previously made (and treated as a Restricted Payment) by the
Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary.
(b) The provisions of the foregoing paragraph (a) will not prohibit:
(1) any Restricted Payment (other than a Restricted Payment described in clause (1) of
the definition of “Restricted Payment”) made by exchange for, or out of the Net Cash
Proceeds of the substantially concurrent sale of, Capital Stock of Superior Energy (other
than Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary of
Superior Energy or an employee stock ownership plan or to a trust established by Superior
Energy, the Company or any Restricted Subsidiaries for the benefit of their employees) or
the fair market value of the consideration (if other than cash) from such issue or sale of
Capital Stock or a substantially concurrent capital cash contribution received by Superior
Energy from its stockholders; provided, however, that (A) such Restricted Payment shall be
excluded in the calculation of the amount of Restricted Payments and (B) the Net Cash
Proceeds or the fair market value of the consideration (if other than cash) from such sale
or such capital cash contribution (to the extent so used for such Restricted Payment) shall
be excluded from the calculation of amounts under clause (3)(B) of paragraph (a) above;
(2) any purchase, repurchase, redemption, defeasance or other acquisition or retirement
for value of Subordinated Obligations made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Indebtedness which is permitted to be Incurred pursuant to
Section 4.09 hereof; provided, however, that such purchase, repurchase, redemption,
defeasance or other acquisition or retirement for value shall be excluded in the calculation
of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of declaration thereof if at such date
of declaration such dividend would have complied with this Section 4.07; provided, however,
that at the time of payment of such dividend, no other Default shall have occurred and be
continuing (or result therefrom); provided further, however, that such dividend shall be
included in the calculation of the amount of Restricted Payments;
(4) so long as no Default has occurred and is continuing, the repurchase or other
acquisition of shares of Capital Stock of Superior Energy or any of its Subsidiaries, other
than an Unrestricted Subsidiary, from employees, former employees, directors or former
directors of Superior Energy or any of its Subsidiaries, other than an Unrestricted
Subsidiary (or permitted transferees of such employees, former employees, directors or
former directors), pursuant to the terms of the agreements (including employment agreements)
or plans (or amendments thereto)
48
approved by the Board of Directors of Superior Energy under which such individuals
purchase or sell or are granted the option to purchase or sell, shares of such Capital
Stock; provided, however, that the aggregate amount of such repurchases and other
acquisitions shall not exceed $5.0 million in any calendar year; provided further, however,
that such repurchases and other acquisitions shall be excluded in the calculation of the
amount of Restricted Payments;
(5) repurchase of Capital Stock deemed to occur upon the exercise of stock options if
such Capital Stock represents a portion of the exercise price thereof; provided, however,
that such repurchases shall be excluded in the calculation of the amount of Restricted
Payments;
(6) Investments in the Special Purpose Vessel Entity in the form of one or more Vessel
Guarantees in an aggregate amount not to exceed $45.0 million; provided, however, that such
Investments shall be excluded in the calculation of the amount of Restricted Payments; and
(7) other Restricted Payments in an aggregate amount not to exceed $10.0 million;
provided, however, that (A) at the time of such Restricted Payments, no Default shall have
occurred and be continuing (or result therefrom) and (B) such Restricted Payments, when made
and in the amount so made, shall thereafter be included in the calculation of the amount of
Restricted Payments.
The amount of all Restricted Payments (other than cash) will be the fair market value on the
date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued
by Superior Energy, the Company or such Restricted Subsidiary, as the case may be, pursuant to the
Restricted Payment. The fair market value of any assets or securities that are required to be
valued by this Section 4.07 will be determined by the Board of Directors of Superior Energy whose
resolution with respect thereto will be delivered to the Trustee.
Section 4.08 Limitation on Restrictions on Distributions from Restricted Subsidiaries.
(a) Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary to (i) pay dividends or make
any other distributions on its Capital Stock to Superior Energy, the Company or a Restricted
Subsidiary or pay any Indebtedness owed to the Company, (ii) make any loans or advances to the
Company or (iii) transfer any of its property or assets to the Company, except:
(1) any encumbrance or restriction pursuant to an agreement in effect at or entered
into on the Issue Date, including any such Credit Facility and the Notes and this Indenture;
(2) any encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement relating to any Indebtedness Incurred by such Restricted Subsidiary on or prior
to the date on which such Restricted Subsidiary was acquired by Superior Energy or the
Company, as the case may be (other than Indebtedness Incurred as consideration in, or to
provide all or any portion of the funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company), and outstanding on such
date;
(3) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in clause (1) or (2) of this
Section 4.08 or this clause (3) or contained in any amendment to an agreement referred to in
clause (1) or (2) of this Section 4.08 or this clause (3); provided, however, that the
encumbrances and
49
restrictions with respect to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are no more restrictive than the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in such predecessor
agreements;
(4) any such encumbrance or restriction consisting of customary non-assignment
provisions in leases governing leasehold interests to the extent such provisions restrict
the transfer of the lease or the property leased thereunder;
(5) in the case of clause (iii) of Section 4.08(a) hereof, restrictions contained in
security agreements or mortgages securing Indebtedness of Superior Energy, the Company or a
Restricted Subsidiary to the extent such restrictions restrict the transfer of the property
subject to such security agreements or mortgages;
(6) provisions limiting the disposition or distribution of assets or property in joint
venture agreements, limited liability agreements, joint operating agreements, asset sale
agreements, sale-leaseback agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business, which limitation is applicable only to the
assets that are the subject of such agreements;
(7) restrictions imposed by customers on cash or other amounts deposited by them
pursuant to contracts entered into in the ordinary course of business;
(8) purchase money obligations for property acquired in the ordinary course of business
and Capital Lease Obligations that impose restrictions on the property purchased or leased
of the nature described in clause (iii) of Section 4.08(a) hereof;
(9) restrictions on the transfer of property or assets required by any regulatory
authority having jurisdiction over Superior Energy, the Company or such Restricted
Subsidiary;
(10) encumbrances and restrictions contained in contracts entered into in the ordinary
course of business, not relating to any Indebtedness, and that do not, individually or in
the aggregate, detract from the value of, or from the ability of Superior Energy, the
Company and the Restricted Subsidiaries to realize the value of, property or assets of the
Company or any Restricted Subsidiary in any manner material to Superior Energy, the Company
or any Restricted Subsidiary; and
(11) Liens permitted to be incurred under the provisions of Section 4.12 that limit the
right of the debtor to dispose of the assets subject to such Liens.
(b) Superior Energy will not create or otherwise cause or permit to exist or become effective
any consensual encumbrance or restriction on its ability to (i) make capital contributions or other
Investments in the Company or any Restricted Subsidiary or pay any Indebtedness owed to the Company
or any Restricted Subsidiary, (ii) make any loans or advances to the Company or any Restricted
Subsidiary or (iii) transfer any of its property or assets to the Company or any Restricted
Subsidiary, except:
(1) any encumbrance or restriction pursuant to any Credit Facilities and any agreement
in effect at or entered into on the Issue Date; and
(2) any encumbrance or restriction pursuant to an agreement effecting a Refinancing of
Indebtedness Incurred pursuant to an agreement referred to in the immediately preceding
50
clause (1) of this Section 4.08(b) or this clause (2) or contained in any amendment to
an agreement referred to in the immediately preceding clause (1) of this Section 4.08(b) of
this clause (2); provided, however, that the encumbrances and restrictions with respect to
Superior Energy contained in any such refinancing agreement or amendment are no more
restrictive in any material respect than the encumbrances and restrictions with respect to
Superior Energy contained in such predecessor agreements.
Section 4.09 Limitation on Indebtedness.
(a) Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary to, Incur, directly or indirectly, any Indebtedness; provided, however, that Superior
Energy, the Company and any Subsidiary Guarantor may Incur Indebtedness if, the Consolidated
Coverage Ratio for the period of the most recent four fiscal quarters ending at least 45 days prior
to (or, if less, the number of days after the end of such fiscal quarter as the consolidated
financial statements of Superior Energy and its Subsidiaries, consisting of, at least, the Company
and the Restricted Subsidiaries, shall be provided to the Holders pursuant to this Indenture) the
date of such Incurrence would have exceeded 2.0 to 1 and no Default would have occurred and be
continuing, in each case determined on a pro forma basis (including a pro forma application of the
net proceeds therefrom), as if the additional Indebtedness had been incurred at the beginning of
such four quarter period.
(b) Notwithstanding the foregoing paragraph (a), so long as no Default has occurred and is
continuing, Superior Energy, the Company and the Restricted Subsidiaries may Incur, to the extent
provided below, the following Indebtedness:
(1) Indebtedness Incurred by Superior Energy, the Company and any Subsidiary Guarantor
under Credit Facilities; provided, however, that after giving effect to such Incurrence, the
aggregate principal amount of all Indebtedness incurred under this clause (1) (with letters
of credit and bankers’ acceptances, if any, being deemed to have a principal amount equal to
the maximum potential liability of the Company thereunder) and then outstanding does not
exceed the greater of (A) $250.0 million and (B) the amount equal to 30% of Consolidated Net
Tangible Assets as of the end of the most recent fiscal quarter ending at least 45 days (or,
if less, the number of days after the end of such fiscal quarter as the consolidated
financial statements of Superior Energy shall be provided to the Holders pursuant to this
Indenture) prior to the date of the Incurrence of such Indebtedness;
(2) the incurrence by Superior Energy, the Company or any Restricted Subsidiary of
intercompany Indebtedness between or among Superior Energy, the Company or any Restricted
Subsidiary; provided, however, that:
(a) if Superior Energy, the Company or any Restricted Subsidiary is the obligor on such
Indebtedness and the payee is not Superior Energy, the Company or any Restricted Subsidiary,
such Indebtedness must be expressly subordinated to the prior payment in full in cash of all
Obligations then due with respect to the Notes, in the case of the Company, or the
Guarantee, in the case of a Guarantor; and
(b) (i) any subsequent issuance or transfer of Capital Stock that results in any such
Indebtedness being held by a Person other than Superior Energy, the Company or any
Restricted Subsidiary and (ii) any sale or other transfer of any such Indebtedness to a
Person that is not either Superior Energy, the Company or any Restricted Subsidiary, will be
deemed, in each case, to constitute an incurrence of such Indebtedness by Superior Energy,
the Company or such Restricted Subsidiary, as the case may be, that was not permitted by
this clause (2);
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(3) Indebtedness consisting of the Notes and the related Note Guarantees to be issued
on the date of this Indenture and the Exchange Notes and the related Note Guarantees to be
issued pursuant to the Registration Rights Agreement;
(4) Indebtedness outstanding on the Issue Date (other than Indebtedness described in
clause (1), (2) or (3) of this paragraph (b));
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding on or prior to the
date on which such Subsidiary was acquired by Superior Energy or the Company, as the case
may be (other than Indebtedness Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Subsidiary became a Subsidiary or was acquired
by Superior Energy or the Company, as the case may be); provided, however, that on the date
of such acquisition and after giving pro forma effect thereto, the Company would have been
able to Incur at least $1.00 of additional Indebtedness pursuant to paragraph (a) of this
Section 4.09;
(6) Refinancing Indebtedness in respect of Indebtedness Incurred pursuant to paragraph
(a) or pursuant to clause (3), (4) or (5) of this paragraph (b) or this clause (6);
provided, however, that to the extent such Refinancing Indebtedness directly or indirectly
Refinances Indebtedness of a Subsidiary Incurred pursuant to clause (5) of this paragraph
(b), such Refinancing Indebtedness shall be Incurred only by such Subsidiary;
(7) Hedging Obligations entered into in the ordinary course of business for the purpose
of limiting risks that arise in the ordinary course of business of Superior Energy, the
Company or any Restricted Subsidiary;
(8) Indebtedness incurred solely in respect of banker’s acceptances, letters of credit,
performance and surety bonds and completion guarantees and other reimbursement obligations
(to the extent that such incurrence does not result in the Incurrence of any obligation for
the payment of borrowed money of others), in each case Incurred in the ordinary course of
business;
(9) the incurrence by Superior Energy, the Company or any Restricted Subsidiary of
Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money
obligations, in each case, incurred for the purpose of financing all or any part of the
acquisition or cost of design, construction, installation, improvement or the carrying cost
of assets used in the business of Superior Energy, the Company or any Restricted Subsidiary,
in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred
to renew, refund, refinance, replace, defease or discharge any Indebtedness incurred
pursuant to this clause (9), not to exceed $35.0 million at any time outstanding;
(10) Indebtedness arising from any agreement providing for indemnities, Guarantees,
purchase price adjustments, holdbacks, contingency payment obligations based on the
performance of the acquired or disposed assets or similar obligations (other than Guarantees
of Indebtedness) Incurred by any Person in connection with the acquisition or disposition of
assets;
(11) in-kind obligations relating to net oil or natural gas balancing positions arising
in the ordinary course of business;
(12) the guarantee by the Company or any of the Guarantors of Indebtedness of Superior
Energy, the Company or any Restricted Subsidiary that was permitted to be incurred by
another provision of this Section 4.09; provided that if the Indebtedness being guaranteed
is
52
subordinated to or pari passu with the Notes, then the Guarantee shall be subordinated
or pari passu, as applicable, to the same extent as the Indebtedness guaranteed;
(13) the incurrence by Foreign Subsidiaries of Indebtedness in an aggregate principal
amount at any time outstanding pursuant to this clause (13), including all Permitted
Refinancing Indebtedness incurred to renew, refund, refinance, replace, defease or discharge
any Indebtedness incurred pursuant to this clause (13), not to exceed $20.0 million (or the
equivalent thereof, measured at the time of each incurrence, in applicable foreign
currency); and
(14) Indebtedness of Superior Energy, the Company and any Restricted Subsidiary in an
aggregate principal amount which, together with all other Indebtedness of such Persons
outstanding on the date of such Incurrence (other than Indebtedness permitted by clauses (1)
through (13) of this paragraph (b) or paragraph (a) of this Section 4.09) does not exceed
$30.0 million.
(c) Notwithstanding the foregoing, each of Superior Energy and the Company will not, and will
not permit any Subsidiary Guarantor to, Incur any Indebtedness pursuant to the foregoing paragraph
(b) if the proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations of Superior Energy, the Company or any Subsidiary Guarantor unless such Indebtedness
shall be subordinated to the Notes or the relevant Subsidiary Guarantee, as applicable, to at least
the same extent as such Subordinated Obligations.
(d) Each of Superior Energy and the Company will not, and will not permit any Subsidiary
Guarantor to Incur any Indebtedness (including indebtedness permitted to be incurred by paragraph
(b) of this Section 4.09) that is contractually subordinated in right of payment to any other
Indebtedness of the Company or such Guarantor unless such Indebtedness is also contractually
subordinated in right of payment to the Notes and the applicable Note Guarantee on substantially
identical terms; provided, however, that no Indebtedness will be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the Company or such Guarantor solely
by virtue of being unsecured or by virtue of being secured on a first or junior Lien basis.
(e) For purposes of determining compliance with this Section 4.09, in the event that an item
of proposed Indebtedness meets the criteria of more than one of the categories of permitted debt
described in clauses (1) through (14) of paragraph (b) of this Section 4.09, or is entitled to be
incurred pursuant to paragraph (a) of this Section 4.09, the Company will be permitted to classify
such item of Indebtedness on the date of its incurrence, or later reclassify all or a portion of
such item of Indebtedness, in any manner that complies with this Section 4.09. The accrual of
interest, the accretion or amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of
preferred stock as Indebtedness due to a change in accounting principles, and the payment of
dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified
Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock
for purposes of this Section 4.09. Notwithstanding any other provision of this Section 4.09, the
maximum amount of Indebtedness that Superior Energy, the Company or any Restricted Subsidiary may
incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of
fluctuations in exchange rates or currency values.
(f) The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with
original issue discount;
53
(2) the principal amount of the Indebtedness, in the case of any other Indebtedness;
and
(3) in respect of Indebtedness of another Person secured by a Lien on the assets of the
specified Person, the lesser of:
(a) the fair market value of such assets at the date of determination; and
(b) the amount of the Indebtedness of the other Person.
Section 4.10 Limitation on Sales of Assets and Subsidiary Stock.
(a) Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Disposition unless:
(1) Superior Energy, the Company or such Restricted Subsidiary, as the case may be,
receives consideration at the time of such Asset Disposition at least equal to the fair
market value (including as to the value of all non-cash consideration) as determined in good
faith by the Board of Directors of Superior Energy, an officer of Superior Energy or an
officer of such Restricted Subsidiary with responsibility for such transaction, which
determination shall be conclusive evidence of compliance with this provision, of the shares
and assets subject to such Asset Disposition;
(2) in the case of an Asset Disposition for consideration exceeding $20.0 million, the
fair market value is determined, in good faith, by the Board of Directors of Superior
Energy, and evidenced by a resolution of the Board of Directors of Superior Energy set forth
in an Officer’s Certificate delivered to the Trustee;
(3) at least 75% of the consideration thereof received by Superior Energy, the Company
or such Restricted Subsidiary, as the case may be, is in the form of cash or Temporary Cash
Investments; and
(4) an amount equal to 100% of the Net Available Cash from such Asset Disposition is
applied by Superior Energy, the Company or such Restricted Subsidiary, as the case may be,
within 365 days after its receipt, at its option:
(A) to repay Indebtedness and other Obligations under a Credit Facility;
(B) to acquire Additional Assets or to make capital expenditures in a Related
Business; and
(C) to the extent of the balance of such Net Available Cash after application in
accordance with clauses (A) and (B), to make an offer to the Holders of the Notes
(and to holders of other Indebtedness of the Company that is pari passu with the
Notes) to purchase Notes (and such other Indebtedness of the Company) pursuant to and
subject to the conditions contained in this Indenture;
provided, however, that in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (A) or (C) above, the Company or such Restricted Subsidiary shall permanently
retire such Indebtedness and shall cause the related loan commitment, if any, to be permanently
reduced in an amount equal to the principal amount so prepaid, repaid or purchased. Notwithstanding
the foregoing
54
provisions of this Section 4.10, Superior Energy, the Company and the Restricted Subsidiaries will
not be required to apply any Net Available Cash in accordance with this paragraph except to the
extent that the aggregate Net Available Cash from all Asset Dispositions which are not applied in
accordance with this Section 4.10 exceeds $20.0 million. Pending application of Net Available Cash
pursuant to this Section 4.10, such Net Available Cash shall be invested in Temporary Cash
Investments or used to reduce loans outstanding under any revolving credit facility existing under
a Credit Facility.
For the purposes of this Section 4.10, the following are deemed to be cash or Temporary Cash
Investments: (i) the assumption of Indebtedness of Superior Energy, the Company or any Restricted
Subsidiary (other than any of their Subordinated Obligations) and the release of Superior Energy,
the Company or such Restricted Subsidiary, as the case may be, from all liability on such
Indebtedness in connection with such Asset Disposition and (ii) any securities received by the
Company or any Restricted Subsidiary from the transferee that are promptly converted by the Company
or such Restricted Subsidiary into cash on the maturity date thereof but in no event later than 180
days after the receipt thereof (to the extent of cash received).
The requirement of clause (a)(4) above shall be deemed to be satisfied if an agreement
(including a lease) committing to make the acquisitions or expenditures referred to therein is
entered into by Superior Energy, the Company or a Restricted Subsidiary within the time period
specified in such clause and such Net Available Cash is subsequently applied in accordance with
such agreement within six months following such agreement.
In the event of an Asset Disposition that requires the purchase of the Notes (and other pari
passu Indebtedness of the Company) pursuant to clause (a)(4)(C) above, the Company will purchase
Notes tendered pursuant to an offer by the Company for the Notes (and such other pari passu
Indebtedness of the Company) at a purchase price of 100% of their principal amount (or, in the
event such other pari passu Indebtedness of the Company was issued with significant original issue
discount, 100% of the accreted value thereof), without premium, plus accrued but unpaid interest
and Additional Interest (or, in respect of such other pari passu Indebtedness of the Company, such
lesser price, if any, as may be provided for by the terms of such Indebtedness of the Company) in
accordance with the procedures (including prorating in the event of oversubscription) set forth in
this Indenture. If the aggregate purchase price of the securities tendered exceeds the Net
Available Cash allotted to their purchase, the Company will select the securities to be purchased
on a pro rata basis but in denominations of $1,000 principal amount or multiples thereof.
Each of Superior Energy and the Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to Section 3.09 hereof and this Section 4.10. To
the extent that the provisions of any securities laws or regulations conflict with provisions of
Section 3.09 hereof and this Section 4.10, each of Superior Energy and the Company will comply with
the applicable securities laws and regulations and will not be deemed to have breached its
obligations under Section 3.09 hereof and this Section 4.10 by virtue of its compliance with such
securities laws or regulations.
Section 4.11 Limitation on Affiliate Transactions.
(a) Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary to, enter into or permit to exist any transaction (including the purchase, sale, lease
or exchange of any property, employee compensation arrangements or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company or Superior Energy (an “Affiliate
Transaction”) unless:
55
(1) the terms of the Affiliate Transaction are no less favorable to Superior Energy,
the Company or such Restricted Subsidiary than those that could be obtained at the time of
the Affiliate Transaction in arm’s-length dealings with a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess of $10.0 million, the
terms of the Affiliate Transaction are set forth in writing and a majority of the Board of
Directors of Superior Energy having no personal stake in such Affiliate Transaction have
determined in good faith that the criteria set forth in clause (1) are satisfied and have
approved the relevant Affiliate Transaction as evidenced by a resolution of the Board of
Directors of Superior Energy; and
(3) if such Affiliate Transaction involves an amount in excess of $20.0 million, the
Board of Directors of Superior Energy shall also have received a written opinion from a
nationally recognized investment banking, appraisal or accounting firm that is not an
Affiliate of the Company or Superior Energy to the effect that such Affiliate Transaction is
fair, from a financial standpoint, to Superior Energy, the Company and the Restricted
Subsidiaries, as the case may be.
(b) The provisions of the preceding paragraph (a) will not prohibit:
(1) a Restricted Payment or Permitted Investment, in each case permitted to be made
pursuant to Section 4.07 hereof.
(2) any issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock options and
stock ownership plans approved by the Board of Directors of Superior Energy;
(3) loans or advances to employees in the ordinary course of business of Superior
Energy, the Company or any of the Restricted Subsidiaries, but in any event not to exceed
$2.0 million in the aggregate outstanding at any one time;
(4) any transaction with a Restricted Subsidiary or joint venture or similar entity
which would constitute an Affiliate Transaction solely because Superior Energy, the Company
or a Restricted Subsidiary owns an equity interest in or otherwise controls such Restricted
Subsidiary, joint venture or similar entity;
(5) reasonable fees and reasonable compensation paid to, and indemnity and similar
arrangements provided on behalf of, officers, directors and employees of Superior Energy,
the Company or any Restricted Subsidiary as determined in good faith by the Board of
Directors of Superior Energy or its senior management;
(6) any Affiliate Transaction between the Company and a Restricted Subsidiary or
between Restricted Subsidiaries;
(7) the issuance or sale of any Capital Stock (other than Disqualified Stock) of
Superior Energy; and
(8) transactions where the rates or charges involved, and related terms of payment, are
determined by competitive bids and the interest of the Affiliate arises solely from such
56
Person’s status as a non-employee member of the Board of Directors of Superior Energy
and which otherwise comply with clauses (1) and (2), as applicable, of the preceding
paragraph (a).
Section 4.12 Limitation on Liens.
Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, Incur or permit to exist any Lien securing any Indebtedness
of any kind except for Permitted Liens (the “Initial Lien”) of any nature whatsoever on any of its
properties (including Capital Stock of a Restricted Subsidiary), whether owned at the Issue Date or
thereafter acquired, without effectively providing that the Notes shall be secured equally and
ratably with (or prior to) the obligations so secured for so long as such obligations are so
secured.
Any Lien created for the benefit of the Holders of the Notes pursuant to the preceding
sentence shall provide by its terms that such Lien shall be automatically and unconditionally
released and discharged upon the release and discharge of the Initial Lien.
Section 4.13 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to
preserve and keep in full force and effect:
(1) its corporate existence, and the corporate, partnership or other existence of each
of its Subsidiaries, in accordance with the respective organizational documents (as the same
may be amended from time to time) of the Company or any such Subsidiary; and
(2) the rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries; provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of any of its
Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and its Subsidiaries, taken
as a whole, and that the loss thereof is not adverse in any material respect to the Holders
of the Notes.
Section 4.14 Offer to Repurchase Upon Change of Control.
(a) Upon
the occurrence of any of the following events (each a “Change
of Control”), each
Holder shall have the right to require that the Company repurchase such Holder’s Notes at a
purchase price in cash equal to 101% of the principal amount thereof on the date of purchase plus
accrued and unpaid interest and Additional Interest, if any, to the date of purchase (subject to
the right of holders of record on the relevant record date to receive interest due on the relevant
interest payment date):
(1) any “person” (as such term is used in Section 13(d) of the Exchange Act) is or
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause (1) such person shall be deemed to have “beneficial
ownership” of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or indirectly, of
more than 50% of the total voting power of the Voting Stock of Superior Energy or the
Company;
(2) individuals who on the Issue Date constituted the Board of Directors of Superior
Energy together with any new directors whose election by such Board of Directors or whose
nomination for election by the stockholders of Superior Energy, as the case may be, was
approved by a vote of a majority of the directors of Superior Energy then still in office
who were
57
either directors on the Issue Date or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the Board of
Directors then in office;
(3) the adoption of a plan relating to the liquidation or dissolution of either the
Company or Superior Energy; or
(4) the merger or consolidation of the Company or Superior Energy, as the case may be,
with or into another Person or the merger of another Person with or into the Company or
Superior Energy, as the case may be, or the sale of all or substantially all the assets of
the Company or Superior Energy, as the case may be (in each case, determined on a
consolidated basis) to another Person (other than a Wholly Owned Subsidiary in the case of a
merger or consolidation involving the Company), other than a transaction following which, in
the case of a merger or consolidation transaction, securities that represented 100% of the
Voting Stock of the Company or Superior Energy, as the case may be, immediately prior to
such transaction (or other securities into which such securities are converted as part of
such merger or consolidation transaction) constitute at least a majority of the voting power
of the Voting Stock of the surviving Person in such merger or consolidation transaction.
(b) Within 30 days following any Change of Control, the Company will mail a notice to each
Holder with a copy to the Trustee (the “Change of Control
Offer”) stating:
(1) that a Change of Control has occurred and that such Holder has the right to require
us to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the
principal amount thereof on the date of purchase, plus accrued and unpaid interest and
Additional Interest, if any, to the date of purchase (subject to the right of holders of
record on the relevant record date to receive interest on the relevant interest payment
date);
(2) the circumstances and relevant facts regarding such Change of Control (including
information with respect to pro forma historical income, cash flow and capitalization after
giving effect to such Change of Control);
(3) the purchase date (which shall be no earlier than 10 days nor later than 60 days
from the date such notice is mailed); and
(4) that any Note not tendered will continue to accrue interest;
(5) that, unless the Company defaults in the payment of the Change of Control Payment,
all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue
interest after the Change of Control Payment Date;
(6) that Holders electing to have any Notes purchased pursuant to a Change of Control
Offer will be required to surrender the Notes, with the form entitled “Option of Holder to
Elect Purchase” attached to the Notes completed, or transfer by book-entry transfer, to the
Paying Agent at the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date;
(7) that Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day preceding the
Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have the Notes purchased; and
58
(8) that Holders whose Notes are being purchased only in part will be issued new Notes
equal in principal amount to the unpurchased portion of the Notes surrendered, which
unpurchased portion must be equal to $1,000 in principal amount or an integral multiple
thereof.
The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a Change in Control. To
the extent that the provisions of any securities laws or regulations conflict with the provisions
of Sections 3.09 or 4.14 hereof, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under Section 3.09 hereof or
this Section 4.14 by virtue of such compliance.
(c) On the Change of Control Payment Date, the Company will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes properly tendered pursuant to the
Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the Change of Control Payment in
respect of all Notes or portions of Notes properly tendered; and
(3) deliver or cause to be delivered to the Trustee the Notes properly accepted
together with an Officer’s Certificate stating the aggregate principal amount of Notes or
portions of Notes being purchased by the Company.
The Paying Agent will promptly mail (but in any case not later than five days after the Change
of Control Payment Date) to each Holder of Notes properly tendered the Change of Control Payment
for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the
Notes surrendered, if any. The Company will publicly announce the results of the Change of Control
Offer on or as soon as practicable after the Change of Control Payment Date.
(d) the Company will not be required to make a Change of Control Offer following a Change of
Control if (1) a third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of
Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under
such Change of Control Offer or (2) notice of redemption has been given pursuant to Section 3.07
hereof unless and until there is a default in payment of the applicable redemption price.
(e) The provisions described in this Section 4.14 may be waived or modified with the written
consent of the Holders of a majority in principal amount of the Notes.
Section 4.15 Limitation on Sale/Leaseback Transactions.
(a) Each of Superior Energy and the Company will not, and will not permit any Restricted
Subsidiary to, enter into any Sale/Leaseback Transaction with respect to any property unless:
(1) Superior Energy, the Company or such Restricted Subsidiary, as the case may be,
would be entitled to (A) Incur Indebtedness in an amount equal to the Attributable Debt with
respect to such Sale/Leaseback Transaction pursuant to paragraph (a) of Section 4.09 hereof
and (B) create a Lien on such property securing such Attributable Debt without equally and
ratably securing the Notes pursuant to the covenant described under Section 4.12 hereof;
provided,
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however, that clause (A) of this clause (1) shall be suspended during any period in
which the Company, Superior Energy and its Restricted Subsidiaries are not subject to the
Suspended Covenants;
(2) the gross proceeds of such Sale/Leaseback Transaction are at least equal to the
fair market value (as determined in good faith by the Board of Directors of Superior Energy)
of such property; and
(3) the transfer of such property is permitted by, and the Company applies the proceeds
of such transaction in compliance with, Section 4.10 hereof.
Section 4.16 Limitation on Issuances of Guarantees by Exempt Foreign Subsidiaries.
Neither Superior Energy nor the Company will permit any Exempt Foreign Subsidiary, directly or
indirectly, to Guarantee any other Indebtedness of Superior Energy, the Company or any Restricted
Subsidiary unless such Exempt Foreign Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for the Guarantee of the payment of the Notes by
such Exempt Foreign Subsidiary, which Guarantee will be senior to or pari passu with such
Restricted Subsidiary’s Guarantee of such other Indebtedness unless such other Indebtedness is a
Subordinated Obligation, in which case the Guarantee of the Notes may be senior to the Guarantee of
such Subordinated Obligation to the same extent as the Notes are senior to such Subordinated
Obligation.
Section 4.17 Payments for Consent.
The Company will not and Superior Energy will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the
benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of this Indenture or the Notes unless such consideration is offered to
be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time
frame set forth in the solicitation documents relating to such consent, waiver or agreement.
Section 4.18 Future Guarantors.
In the event that, after the Issue Date (1) any Restricted Subsidiary (excluding an Exempt
Foreign Subsidiary except under Section 4.16) Incurs, directly or indirectly, any Indebtedness or
guarantees or otherwise provides direct credit support for any Indebtedness of Superior Energy, the
Company or any Restricted Subsidiary, or (2) as of the end of any fiscal quarter, any Restricted
Subsidiary (excluding an Exempt Foreign Subsidiary) has total assets or total revenues that are at
least equal to 5% of the total assets or total revenues, as applicable, of the Company and its
Restricted Subsidiaries, then each of Superior Energy and the Company will cause such Restricted
Subsidiary, contemporaneously with the first to occur of such events described in the preceding
clauses (1) and (2) (as applicable), to execute a Note Guarantee pursuant to a supplemental
indenture in form and substance satisfactory to the Trustee and shall cause all Indebtedness of
such Restricted Subsidiary owing to Superior Energy, the Company or any other Subsidiary of the
Company and not previously discharged to be converted into Capital Stock of such Restricted
Subsidiary (other than Disqualified Stock). The form of Note Guarantee is attached as Exhibit E
hereto.
Section 4.19 Changes in Covenants when Notes Rated Investment Grade.
If on any date following the date of this Indenture:
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(a) the Notes are rated Baa3 or better by ▇▇▇▇▇’▇ and BBB- or better by S&P (or, if either
such entity ceases to rate the Notes for reasons outside of the control of the Company, the
equivalent investment grade credit rating from any other “nationally recognized statistical rating
organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the
Company as a replacement agency); and
(b) no Default or Event of Default shall have occurred and be continuing,
then, beginning on that day and subject to the provisions of the following paragraph, the covenants
in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.15 and 5.01 hereof will be suspended (the “Suspended
Covenants”).
Notwithstanding the foregoing, if the rating assigned by either such rating agency should
subsequently decline to below Baa3 or BBB-, respectively, the foregoing Suspended Covenants will be
reinstituted as of and from the date of such rating decline. Calculations under the reinstated
Section 4.07 will be made as if Section 4.07 had been in effect since the date of this Indenture
except that no default will be deemed to have occurred solely by reason of a Restricted Payment
made while Section 4.07 was suspended.
ARTICLE 5
SUCCESSORS
SUCCESSORS
Section 5.01 Merger and Consolidation.
(a) Neither the Company will, nor will Superior Energy permit the Company to, consolidate with
or merge with or into, or convey or transfer, in one transaction or a series of transactions,
directly or indirectly, all or substantially all its assets to, any Person, unless:
(1) the Company shall be the surviving Person, or the resulting, surviving or
transferee Person (the “Successor Company”) shall be a Person organized and existing under
the laws of the United States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) shall expressly assume, by an indenture
supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of the Company under the Notes, this Indenture and the
Registration Rights Agreement;
(2) immediately after giving pro forma effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a
result of such transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have occurred and be
continuing;
(3) immediately after giving pro forma effect to such transaction, either (a) the
Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to
paragraph (a) of the Section 4.09 or (b) the Consolidated Coverage Ratio of the Successor
Company will be greater than the Consolidated Coverage Ratio of the Company and its
Subsidiaries immediately prior to such transaction; provided, however, that this clause (3)
shall be suspended during any period in which the Company, Superior Energy and its
Restricted Subsidiaries are not subject to the Suspended Covenants; and
(4) the Company shall have delivered to the Trustee an Officer’s Certificate of
Superior Energy and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with this Indenture;
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provided, however, that clause (3) will not be applicable to (A) a Restricted Subsidiary
consolidating with, merging into or transferring all or part of its properties and assets to the
Company or (B) if determined in good faith by the Board of Directors of Superior Energy (as
evidenced by a resolution of such board), the Company merging with an Affiliate of the Company
solely for the purpose and with the sole effect of reorganizing the Company in another
jurisdiction, provided the surviving entity will assume all the obligations of the Company under
the Notes, this Indenture, and the Registration Rights Agreement.
In addition, neither the Company will, nor will Superior Energy permit the Company to,
directly or indirectly, lease all or substantially all of the properties and assets of it and its
Restricted Subsidiaries taken as a whole, in one or more related transactions, to any other Person.
(b) Superior Energy will not consolidate with or merge with or into, or convey or transfer, in
one transaction or a series of transactions, directly or indirectly, all or substantially all its
assets to, any Person, unless:
(1) Superior Energy shall be the surviving Person, or the resulting, surviving or
transferee Person (the “Successor Company”) shall be a Person organized and existing under
the laws of the United States of America, any State thereof or the District of Columbia and
the Successor Company (if not Superior Energy) shall expressly assume, by an indenture
supplemental thereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, all the obligations of Superior Energy under its Note Guarantee, this Indenture and
the Registration Rights Agreement;
(2) immediately after giving pro forma effect to such transaction (and treating any
Indebtedness which becomes an obligation of the Successor Company or any Subsidiary as a
result of such transaction as having been Incurred by such Successor Company or such
Subsidiary at the time of such transaction), no Default shall have occurred and be
continuing;
(3) immediately after giving pro forma effect to such transaction, either (a) the
Successor Company would be able to Incur an additional $1.00 of Indebtedness pursuant to
paragraph (a) of Section 4.09 hereof or (b) the Consolidated Coverage Ratio of the Successor
Company will be greater than the Consolidated Coverage Ratio of Superior Energy and its
Subsidiaries immediately prior to such transaction; provided, however, that this clause (3)
shall be suspended during any period in which the Company, Superior Energy and its
Restricted Subsidiaries are not subject to the Suspended Covenants; and
(4) Superior Energy shall have delivered to the Trustee an Officer’s Certificate of
Superior Energy and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with this Indenture;
provided, however, that clause (3) will not be applicable to (A) a Restricted Subsidiary
consolidating with, merging into or transferring all or part of its properties and assets to
Superior Energy or (B) if determined in good faith by the Board of Directors of Superior Energy (as
evidenced by a resolution of such board), Superior Energy merging with an Affiliate of Superior
Energy solely for the purpose and with the sole effect of reorganizing Superior Energy in another
jurisdiction, provided the surviving entity will assume all the obligations of Superior Energy
under its Note Guarantee, this Indenture, and the Registration Rights Agreement.
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In addition, Superior Energy will not directly or indirectly, lease all or substantially all
of the properties and assets of it and its Restricted Subsidiaries taken as a whole, in one or more
related transactions, to any other Person.
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or transfer or conveyance or other disposition of all or
substantially all of the properties or assets of the Company in a transaction that is subject to,
and that complies with the provisions of, Section 5.01 hereof, the successor Person formed by such
consolidation or into or with which the Company is merged or to which such transfer or conveyance
or other disposition is made shall succeed to, and be substituted for (so that from and after the
date of such consolidation, merger, transfer, conveyance or other disposition, the provisions of
this Indenture referring to the “Company” shall refer instead to the successor Person and not to
the Company), and may exercise every right and power of the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein; provided, however,
that the predecessor Company shall not be relieved from the obligation to pay the principal of and
interest on the Notes except in the case of a sale of all of the Company’s assets in a transaction
that is subject to, and that complies with the provisions of, Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an “Event of Default”:
(1) default for 30 days in the payment when due of interest on, or Additional Interest,
if any, with respect to, the Notes;
(2) default in the payment when due (at its Stated Maturity, upon redemption, upon
required purchase, upon declaration or otherwise) of the principal of, or premium, if any,
on, the Notes;
(3) failure by the Company or Superior Energy to comply with Section 5.01 hereof;
(4) failure by the Company or Superior Energy to comply for 30 days after notice with
any of its obligations pursuant to Section 4.14 hereof (other than a failure to purchase the
Notes) and Section 4.10 hereof (other than a failure to purchase the Notes) or under
Sections 4.03, 4.07, 4.08, 4.09, 4.11, 4.12, 4.15, 4.16 or 4.18.
(5) failure by Superior Energy, the Company or a Restricted Subsidiary to comply for 60
days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate
principal amount of the Notes then outstanding voting as a single class to comply with any
of the other agreements in this Indenture;
(6) default under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any Indebtedness for money borrowed by the
Superior Energy, the Company or any of its Restricted Subsidiaries (or the payment of which
is guaranteed by Superior Energy, the Company or any of its Restricted Subsidiaries),
whether such Indebtedness or Guarantee now exists, or is created after the date of this
Indenture, if that default:
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(A) is caused by a failure to pay principal of, or interest or premium, if any,
on, such Indebtedness prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a “Payment Default”); or
(B) results in the acceleration of such Indebtedness prior to its express
maturity,
and, in each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $20.0 million
or more;
(7) any judgment or decree for the payment of money in excess of $20.0 million is
entered against the Company, Superior Energy or a Significant Subsidiary, remains
outstanding for a period of 60 consecutive days following such judgment and is not
discharged, waived or stayed within 10 days after notice; or
(8) Superior Energy, the Company or any of its Restricted Subsidiaries that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken
together, would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an involuntary
case;
(C) consents to the appointment of a custodian of it or for all or substantially
all of its property;
(D) makes a general assignment for the benefit of its creditors; or
(E) generally is not paying its debts as they become due;
(9) a court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
(A) is for relief against Superior Energy, the Company or any of its Restricted
Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries
of the Company that, taken together, would constitute a Significant Subsidiary in an
involuntary case;
(B) appoints a custodian of Superior Energy, the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary or for all or substantially all of the property of the Company or any of
its Restricted Subsidiaries that is a Significant Subsidiary or any group of
Restricted Subsidiaries of the Company that, taken together, would constitute a
Significant Subsidiary; or
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(C) orders the liquidation of Superior Energy, the Company or any of its
Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted
Subsidiaries of the Company that, taken together, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive days; or
(10) except as permitted by this Indenture, any Note Guarantee is held in any judicial
proceeding to be unenforceable or invalid or ceases for any reason to be in full force and
effect, or any Guarantor, or any Person acting on behalf of any Guarantor, denies or
disaffirms its obligations under its Note Guarantee.
However, a default under clauses (4), (5), (7) and (10) above will not constitute an Event of
Default until the Trustee or the Holders of 25% in principal amount of the outstanding Notes notify
the Company of the default and the Company does not cure such default within the time specified
after receipt of such notice.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (8) or (9) of Section 6.01 hereof, with
respect to Superior Energy, the Company, any Restricted Subsidiary of the Company that is a
Significant Subsidiary or any group of Restricted Subsidiaries of the Company that, taken together,
would constitute a Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then
outstanding Notes may declare all the Notes to be due and payable immediately.
Upon any such declaration, the Notes shall become due and payable immediately.
The Holders of a majority in aggregate principal amount of the then outstanding Notes by
written notice to the Trustee may, on behalf of all of the Holders, rescind an acceleration and its
consequences, if the rescission would not conflict with any judgment or decree and if all existing
Events of Default (except nonpayment of principal, interest or premium or Additional Interest, if
any, that has become due solely because of the acceleration) have been cured or waived.
Section 6.03 Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy
to collect the payment of principal, premium and Additional Interest, if any, and interest on the
Notes or to enforce the performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not
produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note
in exercising any right or remedy accruing upon an Event of Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of not less than a majority in aggregate principal amount of the then outstanding
Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing
Default or
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Event of Default and its consequences hereunder, except a continuing Default or Event of
Default in the payment of the principal of, premium and Additional Interest, if any, or interest
on, the Notes (including in connection with an offer to purchase); provided, however, that the
Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that resulted from such
acceleration. Upon any such waiver, such Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.
Section 6.05 Control by Majority.
Holders of a majority in aggregate principal amount of the then outstanding Notes may direct
the time, method and place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture that the Trustee determines may be
unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in
personal liability.
Section 6.06 Limitation on Suits.
A Holder may pursue a remedy with respect to this Indenture or the Notes only if:
(1) such Holder gives to the Trustee written notice that an Event of Default is
continuing;
(2) Holders of at least 25% in aggregate principal amount of the then outstanding Notes
make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer and, if requested, provide to the Trustee security or
indemnity reasonably satisfactory to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(5) during such 60-day period, Holders of a majority in aggregate principal amount of
the then outstanding Notes do not give the Trustee a direction inconsistent with such
request.
A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a
Note or to obtain a preference or priority over another Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to
receive payment of principal, premium and Additional Interest, if any, and interest on the Note, on
or after the respective due dates expressed in the Note (including in connection with an offer to
purchase), or to bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08 Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) hereof occurs and is continuing,
the Trustee is authorized to recover judgment in its own name and as trustee of an express trust
against the
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Company for the whole amount of principal of, premium and Additional Interest, if any, and
interest remaining unpaid on, the Notes and interest on overdue principal and, to the extent
lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall be entitled and
empowered to collect, receive and distribute any money or other property payable or deliverable on
any such claims and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the
payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money, securities and other
properties that the Holders may be entitled to receive in such proceeding whether in liquidation or
under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it shall pay out the money in
the following order:
First: to the Trustee, its agents and attorneys for amounts due under Section 7.07
hereof, including payment of all compensation, expenses and liabilities incurred, and all
advances made, by the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes for principal,
premium and Additional Interest, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Notes for principal,
premium and Additional Interest, if any and interest, respectively; and
Third: to the Company or to such party as a court of competent jurisdiction shall
direct.
The Trustee may fix a record date and payment date for any payment to Holders of Notes
pursuant to this Section 6.10.
Section 6.11 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion
may require the
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filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees,
against any party litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder of a Note, a suit by a Holder of a Note pursuant to Section 6.07
hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding
Notes.
ARTICLE 7
TRUSTEE
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee will exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of care and skill in
its exercise, as a prudent person would exercise or use under the circumstances in the conduct of
such person’s own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee will be determined solely by the express provisions of
this Indenture and the Trustee need perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, the Trustee will examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need not confirm or
investigate the accuracy of the mathematical calculations or other facts stated therein).
(c) The Trustee may not be relieved from liabilities for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;
(2) the Trustee will not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(3) the Trustee will not be liable with respect to any action it takes or omits to take
in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.
(e) No provision of this Indenture will require the Trustee to expend or risk its own funds or
incur any liability. The Trustee will be under no obligation to exercise any of its rights and
powers under this Indenture at the request of any Holders, unless such Holder has offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or expense.
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(f) The Trustee will not be liable for interest on any money received by it except as the
Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be
segregated from other funds except to the extent required by law.
Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to
have been signed or presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate
or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits
to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee
may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and will not be responsible for the
misconduct or negligence of any agent appointed with due care.
(d) The Trustee will not be liable for any action it takes or omits to take in good faith that
it believes to be authorized or within the rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction
or notice from the Company will be sufficient if signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the rights or powers vested in
it by this Indenture at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security against the losses, liabilities and
expenses that might be incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a Default or Event of Default is received by a Responsible Officer of
the Trustee at the Corporate Trust Office of the Trustee from the Company or the Holders of 25% in
aggregate principal amount of the outstanding Notes, and such notice references the specific
Default or Event of Default, the Notes and this Indenture.
(h) The Trustee shall not be required to give any bond or surety in respect of the performance
of its power and duties hereunder.
(i) The Trustee shall have no duty to inquire as to the performance of the Company’s covenants
herein.
(j) The Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or attorney appointed with
due care by it hereunder.
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Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Company or any Affiliate of the Company with the same rights it
would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for permission to
continue as Trustee (if this Indenture has been qualified under the TIA) or resign. Any Agent may
do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
Section 7.04 Trustee’s Disclaimer.
The Trustee will not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the
proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any
provision of this Indenture, it will not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it will not be responsible for any
statement or recital herein or any statement in the Notes or any other document in connection with
the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is known to the Trustee,
the Trustee will mail to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in payment of principal
of, premium or Additional Interest, if any, or interest on, any Note, the Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee will mail to the Holders of the
Notes a brief report dated as of such reporting date that complies with TIA § 313(a) (but if no
event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date,
no report need be transmitted). The Trustee also will comply with TIA § 313(b)(2). The Trustee
will also transmit by mail all reports as required by TIA § 313(c).
(b) A copy of each report at the time of its mailing to the Holders of Notes will be mailed by
the Trustee to the Company and filed by the Trustee with the SEC and each stock exchange on which
the Notes are listed in accordance with TIA § 313(d). The Company will promptly notify the Trustee
when the Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable compensation for its
acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be
limited by any law on compensation of a trustee of an express trust. The Company will reimburse
the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services. Such expenses will include the
reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.
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(b) The Company and the Guarantors will indemnify the Trustee against any and all losses,
liabilities or expenses incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and expenses of enforcing
this Indenture against the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors, any Holder or any other
Person) or liability in connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be attributable to its
negligence or bad faith. The Trustee will notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company will not relieve the Company
or any of the Guarantors of their obligations hereunder. The Company or such Guarantor will defend
the claim and the Trustee will cooperate in the defense. The Trustee may have separate counsel and
the Company will pay the reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent will not be
unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this Section 7.07 will survive the
satisfaction and discharge of this Indenture, the resignation or removal of the Trustee and the
payment in full of the Notes.
(d) To secure the Company’s and the Guarantors’ payment obligations in this Section 7.07, the
Trustee will have a Lien prior to the Notes on all money or property held or collected by the
Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien
will survive the satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an Event of Default specified
in Section 6.01 (8) or (9) hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA § 313(b)(2) to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a successor Trustee will become
effective only upon the successor Trustee’s acceptance of appointment as provided in this Section
7.08.
(b) The Trustee may resign in writing at any time and be discharged from the trust hereby
created by so notifying the Company. The Holders of a majority in aggregate principal amount of
the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in
writing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is
entered with respect to the Trustee under any Bankruptcy Law;
(3) a custodian or public officer takes charge of the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
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(c) If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for
any reason, the Company will promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal amount of the then
outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
(d) If a successor Trustee does not take office within 30 days after the retiring Trustee
resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in
aggregate principal amount of the then outstanding Notes may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(e) If the Trustee, after written request by any Holder who has been a Holder for at least six
months, fails to comply with Section 7.10 hereof, such Holder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its appointment to the retiring
Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will
become effective, and the successor Trustee will have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee will mail a notice of its succession to
Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the
successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company’s obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation without any further
act will be the successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation organized and doing
business under the laws of the United States of America or of any state thereof that is authorized
under such laws to exercise corporate trustee power, that is subject to supervision or examination
by federal or state authorities and that has a combined capital and surplus of at least $100.0
million as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the requirements of TIA § 310(a)(1),
(2) and (5). The Trustee is subject to TIA § 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA §
311(b). A Trustee who has resigned or been removed shall be subject to TIA § 311(a) to the extent
indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may at any time, at the option of its Board of Directors evidenced by a resolution
set forth in an Officer’s Certificate, elect to have either Section 8.02 or 8.03 hereof be applied
to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section
8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with
respect to all outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance
means that the Company and the Guarantors will be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes (including the Note Guarantees), which will
thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all
their other obligations under such Notes, the Note Guarantees and this Indenture (and the Trustee,
on demand of and at the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which will survive until otherwise terminated or
discharged hereunder:
(1) the rights of Holders of outstanding Notes to receive payments in respect of the
principal of, or interest or premium and Additional Interest, if any, on, such Notes when
such payments are due from the trust referred to in Section 8.04 hereof;
(2) the Company’s obligations with respect to such Notes under Article 2 and Section
4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the
Company’s and the Guarantors’ obligations in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option under this
Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section
8.03, the Company and each of the Guarantors will, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from each of their obligations under the covenants
contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 hereof
and clause (4) of Section 5.01 hereof with respect to the outstanding Notes on and after the date
the conditions set forth in Section 8.04 hereof are satisfied (hereinafter, “Covenant Defeasance”),
and the Notes will thereafter be deemed not “outstanding” for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but will continue to be deemed “outstanding” for all other purposes
hereunder (it being understood that such Notes will not be deemed outstanding for accounting
purposes). For this purpose, Covenant Defeasance means that, with respect to
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the outstanding Notes and Note Guarantees, the Company and the Guarantors may omit to comply
with and will have no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any
such covenant or by reason of any reference in any such covenant to any other provision herein or
in any other document and such omission to comply will not constitute a Default or an Event of
Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture
and such Notes and Note Guarantees will be unaffected thereby. In addition, upon the Company’s
exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(6)
hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 8.02
or 8.03 hereof:
(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the Holders, cash in U.S. dollars, non-callable U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized investment bank, appraisal firm, or firm of independent public accountants, to
pay the principal of, premium and Additional Interest, if any, and interest on, the
outstanding Notes on the stated date for payment thereof or on the applicable redemption
date, as the case may be, and the Company must specify whether the Notes are being defeased
to such stated date for payment or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof, the Company must deliver to
the Trustee an Opinion of Counsel confirming that:
(A) the Company has received from, or there has been published by, the Internal
Revenue Service a ruling; or
(B) since the date of this Indenture, there has been a change in the applicable
federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income, gain
or loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof, the Company must deliver to
the Trustee an Opinion of Counsel confirming that the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(4) no Default or Event of Default shall have occurred and be continuing on the date of
such deposit (other than a Default or Event of Default resulting from the borrowing of funds
to be applied to such deposit) and the deposit will not result in a breach or violation of,
or constitute a default under, any other instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound;
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(5) such Legal Defeasance or Covenant Defeasance will not result in a breach or
violation of, or constitute a default under, any material agreement or instrument (other
than this Indenture) to which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officer’s Certificate stating that the
deposit was not made by the Company with the intent of preferring the Holders of Notes over
the other creditors of the Company with the intent of defeating, hindering, delaying or
defrauding any creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05 Deposited Money and U.S. Government Obligations to be Held in Trust; Other
Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or other qualifying trustee,
collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in
respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance
with the provisions of such Notes and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect of principal,
premium and Additional Interest, if any, and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee or other charge imposed on
or assessed against the cash or non-callable U.S. Government Obligations deposited pursuant to
Section 8.04 hereof or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the Trustee will deliver or pay to
the Company from time to time upon the request of the Company any money or non-callable U.S.
Government Obligations held by it as provided in Section 8.04 hereof which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(1) hereof),
are in excess of the amount thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of, premium or Additional Interest, if any, or interest on,
any Note and remaining unclaimed for two years after such principal, premium or Additional
Interest, if any, or interest has become due and payable shall be paid to the Company on its
request or (if then held by the Company) will be discharged from such trust; and the Holder of such
Note will thereafter be permitted to look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, will thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may at the expense of the
Company cause to be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a
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date specified therein, which will not be less than 30 days from the date of such notification
or publication, any unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any U.S. dollars or non-callable U.S.
Government Obligations in accordance with Section 8.02 or 8.03 hereof, as the case may be, by
reason of any order or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company’s and the Guarantors’ obligations under
this Indenture and the Notes and the Note Guarantees will be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof,
as the case may be; provided, however, that, if the Company makes any payment of principal of,
premium or Additional Interest, if any, or interest on, any Note following the reinstatement of its
obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive
such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee
may amend or supplement this Indenture or the Notes or the Note Guarantees without the consent of
any Holder of Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or in place of certificated
Notes;
(3) to provide for the assumption of the Company’s or a Guarantor’s obligations to the
Holders of the Notes and Note Guarantees by a successor to the Company or such Guarantor
pursuant to Article 5 or Article 10 hereof;
(4) to make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect the legal rights hereunder of any
Holder;
(5) to comply with requirements of the SEC in order to effect or maintain the
qualification of this Indenture under the TIA;
(6) to conform the text of this Indenture or the Notes to any provision of the
“Description of Notes” section of the Company’s Offering Memorandum dated May 17, 2006,
relating to the initial offering of the Notes, to the extent that such provision in that
“Description of Notes” was intended to be a verbatim recitation of a provision of this
Indenture, the Note Guarantees or the Notes;
(7) to provide for the issuance of Additional Notes in accordance with the limitations
set forth in this Indenture as of the date hereof; or
(8) to allow any Guarantor to execute a supplemental indenture and/or a Note Guarantee
with respect to the Notes.
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Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company
and the Guarantors in the execution of any amended or supplemental indenture authorized or
permitted by the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be obligated to enter into
such amended or supplemental indenture that affects its own rights, duties or immunities under this
Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company and the Trustee may amend or
supplement this Indenture (including, without limitation, Section 3.09, 4.10 and 4.15 hereof) and
the Notes and the Note Guarantees with the consent of the Holders of at least a majority in
aggregate principal amount of the then outstanding Notes (including, without limitation, Additional
Notes, if any) voting as a single class (including, without limitation, consents obtained in
connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to
Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium or Additional Interest, if any, or
interest on, the Notes, except a payment default resulting from an acceleration that has been
rescinded) or compliance with any provision of this Indenture or the Notes or the Note Guarantees
may be waived with the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including, without limitation, Additional Notes, if any) voting as a single
class (including, without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, the Notes). Section 2.08 hereof shall determine which Notes
are considered to be “outstanding” for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its Board of Directors
authorizing the execution of any such amended or supplemental indenture, and upon the filing with
the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the
Trustee will join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s
own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion, but will not be obligated to, enter into such amended or supplemental Indenture.
It is not be necessary for the consent of the Holders of Notes under this Section 9.02 to
approve the particular form of any proposed amendment, supplement or waiver, but it is sufficient
if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes effective, the
Company will mail to the Holders of Notes affected thereby a notice briefly describing the
amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect
therein, will not, however, in any way impair or affect the validity of any such amended or
supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding voting as a single class may
waive compliance in a particular instance by the Company with any provision of this Indenture or
the Notes or the Note Guarantees. However, without the consent of each Holder affected, an
amendment, supplement or waiver under this Section 9.02 may not (with respect to any Notes held by
a non-consenting Holder):
(1) reduce the principal amount of Notes whose Holders must consent to an amendment,
supplement or waiver;
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(2) reduce the principal of or change the fixed maturity of any Note or alter or waive
any of the provisions with respect to the redemption of the Notes (except as provided above
with respect to Sections 3.09, 4.10 and 4.15 hereof);
(3) reduce the rate of or change the time for payment of interest, including default
interest, on any Note;
(4) waive a Default or Event of Default in the payment of principal of, or premium or
Additional Interest, if any, or interest on, the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes and a waiver of the payment default that resulted from such acceleration);
(5) make any Note payable in money other than that stated in the Notes;
(6) make any change in the provisions of this Indenture relating to waivers of past
Defaults or the rights of Holders of Notes to receive payments of principal of, or interest
or premium or Additional Interest, if any, on, the Notes;
(7) waive a redemption payment with respect to any Note (other than a payment required
by Sections 3.09, 4.10 or 4.15 hereof);
(8) release any Guarantor from any of its obligations under its Note Guarantee or this
Indenture, except in accordance with the terms of this Indenture; or
(9) make any change in the preceding amendment and waiver provisions.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be set forth in a amended or
supplemental indenture that complies with the TIA as then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a
Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or
portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of
the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written notice of revocation
before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every Holder.
Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee
shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not affect the validity and
effect of such amendment, supplement or waiver.
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Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental indenture authorized pursuant to this
Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities
or immunities of the Trustee. The Company may not sign an amended or supplemental indenture until
the Board of Directors of the Company approves it. In executing any amended or supplemental
indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be
fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an
Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or
supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
NOTE GUARANTEES
NOTE GUARANTEES
Section 10.01. Guarantee.
(a) Subject to this Article 10, each of the Guarantors hereby, jointly and severally,
unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of the validity and enforceability of
this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Additional Interest, if any, and interest on, the
Notes will be promptly paid in full when due, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the Company to the Holders or the Trustee
hereunder or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and
(2) in case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any performance so guaranteed for
whatever reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
(b) The Guarantors hereby agree that their obligations hereunder are unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with
respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any
action to enforce the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Note Guarantee will not be discharged
except by complete performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or otherwise to return to the
Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in
relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore discharged, will be reinstated in full force
and effect.
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(d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation
to the Holders in respect of any obligations guaranteed hereby until payment in full of all
obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes
of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (2) in the event of any
declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations
(whether or not due and payable) will forthwith become due and payable by the Guarantors for the
purpose of this Note Guarantee. The Guarantors will have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the rights of the
Holders under the Note Guarantee.
Section 10.02. Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors
hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum
amount that will, after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on behalf of any other
Guarantor in respect of the obligations of such other Guarantor under this Article 10, result in
the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer
or conveyance.
Section 10.03. Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees
that a notation of such Note Guarantee substantially in the form attached as Exhibit E hereto will
be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee
and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in Section 10.01 hereof will
remain in full force and effect notwithstanding any failure to endorse on each Note a notation of
such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds
that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed,
the Note Guarantee will be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof hereunder, will
constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the
Guarantors.
In the event that the Company or any of its Restricted Subsidiaries creates or acquires any
Subsidiary other than an Exempt Foreign Subsidiary after the date of this Indenture, if required by
Section 4.18 hereof, the Company will cause such Subsidiary to comply with the provisions of
Section 4.18 hereof and this Article 10, to the extent applicable.
Section 10.04. Guarantors May Consolidate, etc., on Certain Terms.
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Except as otherwise provided in Section 10.05 hereof, no Subsidiary Guarantor may sell or
otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person, other than the
Company or another Guarantor, unless:
(1) immediately after giving effect to such transaction, no Default or Event of Default
exists; and
(2) either:
(a) subject to Section 10.05 hereof, the Person acquiring the property in any such sale
or disposition or the Person formed by or surviving any such consolidation or merger
unconditionally assumes all the obligations of that Subsidiary Guarantor under this
Indenture, its Note Guarantee and the Registration Rights Agreement on the terms set forth
herein or therein, pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee; or
(b) the Net Proceeds of such sale or other disposition are applied in accordance with
the applicable provisions of this Indenture, including without limitation, Section 4.10
hereof.
In case of any such consolidation, merger, sale or conveyance and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same
effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to
be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the Trustee. All the
Note Guarantees so issued will in all respects have the same legal rank and benefit under this
Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Note Guarantees had been issued at the date of the execution
hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses 2(a) and (b)
above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or
merger of a Guarantor with or into the Company or another Guarantor, or will prevent any sale or
conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
Section 10.05. Releases.
(a) In the event of any sale or other disposition of all or substantially all of the assets of
any Subsidiary Guarantor, by way of merger, consolidation or otherwise, or a sale or other
disposition of all of the Capital Stock of any Guarantor, in each case to a Person that is not
(either before or after giving effect to such transactions) Superior Energy, the Company or a
Restricted Subsidiary of the Company, then such Subsidiary Guarantor (in the event of a sale or
other disposition, by way of merger, consolidation or otherwise, of all of the Capital Stock of
such Guarantor) or the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be released and
relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale
or other disposition are applied in accordance with the applicable provisions of this Indenture,
including without limitation Section 4.10 hereof. Upon delivery by the Company to the Trustee of
an Officer’s Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this Indenture, including
without limitation Section
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4.10 hereof, the Trustee will execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Note Guarantee.
(b) Upon designation by the Company of any Restricted Subsidiary that is a Subsidiary
Guarantor as an Unrestricted Subsidiary in accordance with the terms of this Indenture, such
Guarantor will be released and relieved of any obligations under its Note Guarantee.
(c) Upon Legal Defeasance in accordance with Article 8 hereof or satisfaction and discharge of
this Indenture in accordance with Article 11 hereof, each Subsidiary Guarantor will be released and
relieved of any obligations under its Note Guarantee.
Any Subsidiary Guarantor not released from its obligations under its Note Guarantee as
provided in this Section 10.05 will remain liable for the full amount of principal of and interest
and premium and Additional Interest, if any, on the Notes and for the other obligations of any
Subsidiary Guarantor under this Indenture as provided in this Article 10.
ARTICLE 11
SATISFACTION AND DISCHARGE
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further effect as to all Notes
issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated, except lost, stolen or destroyed Notes that
have been replaced or paid and Notes for whose payment money has theretofore been deposited
in trust and thereafter repaid to the Company, have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to the Trustee for cancellation have become
due and payable by reason of the mailing of a notice of redemption or otherwise or will
become due and payable within one year and the Company or any Guarantor has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust solely for the
benefit of the Holders, cash in U.S. dollars, non-callable U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, without consideration of any
reinvestment of interest, to pay and discharge the entire Indebtedness on the Notes not
delivered to the Trustee for cancellation for principal, premium and Additional Interest, if
any, and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on the date of such
deposit (other than a Default or Event of Default resulting from the borrowing of funds to
be applied to such deposit) and the deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the Company or any Guarantor is a
party or by which the Company or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be paid all sums payable by it
under this Indenture; and
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(4) the Company has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at maturity or on the
redemption date, as the case may be.
In addition, the Company must deliver an Officer’s Certificate and an Opinion of Counsel to
the Trustee stating that all conditions precedent to satisfaction and discharge have been
satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited
with the Trustee pursuant to subclause (b) of clause (1) of this Section 11.01, the provisions of
Sections 11.02 and 8.06 hereof will survive. In addition, nothing in this Section 11.01 will be
deemed to discharge those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06 hereof, all money deposited with the Trustee
pursuant to Section 11.01 hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the
Persons entitled thereto, of the principal (and premium and Additional Interest, if any) and
interest for whose payment such money has been deposited with the Trustee; but such money need not
be segregated from other funds except to the extent required by law.
If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in
accordance with Section 11.01 hereof by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company’s and any Guarantor’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to Section 11.01 hereof;
provided that if the Company has made any payment of principal of, premium or Additional Interest,
if any, or interest on, any Notes because of the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Notes to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 12
MISCELLANEOUS
MISCELLANEOUS
Section 12.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by
TIA §318(c), the imposed duties will control.
Section 12.02 Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly
given if in writing and delivered in Person or by first class mail (registered or certified, return
receipt requested), facsimile transmission, electronic transmission or overnight air courier
guaranteeing next day delivery, to the others’ address:
If to the Company and/or any Guarantor:
c/o Superior Energy Services, Inc.
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| ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ | ||
| ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||
| Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| With a copy to: | ||
| Jones, Walker, Waechter, Poitevent, Carrère & ▇▇▇▇▇▇▇, LLP | ||
| ▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ | ||
| ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. | ||
| Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ | ||
| If to the Trustee: | ||
| The Bank of New York Trust Company, N.A. | ||
| ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||
| Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇ |
The Company, any Guarantor or the Trustee, by notice to the others, may designate additional
or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) will be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by
facsimile or electronic transmission; and the next Business Day after timely delivery to the
courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to
its address shown on the register kept by the Registrar. Any notice or communication will also be
so mailed to any Person described in TIA § 313(c), to the extent required by the TIA. Failure to
mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with
respect to other Holders.
If a notice or communication is mailed in the manner provided above within the time
prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it will mail a copy to the Trustee
and each Agent at the same time.
Section 12.03 Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their
rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA § 312(c).
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Section 12.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action under this
Indenture, the Company shall furnish to the Trustee:
(1) an Officer’s Certificate in form and substance reasonably satisfactory to the
Trustee (which must include the statements set forth in Section 12.05 hereof) stating that,
in the opinion of the signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
(which must include the statements set forth in Section 12.05 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants have been satisfied.
Section 12.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture (other than a certificate provided pursuant to TIA § 314(a)(4)) must comply
with the provisions of TIA § 314(e) and must include:
(1) a statement that the Person making such certificate or opinion has read such
covenant or condition;
(2) a brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he or she has made such
examination or investigation as is necessary to enable him or her to express an informed
opinion as to whether or not such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been satisfied.
Section 12.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar
or Paying Agent may make reasonable rules and set reasonable requirements for its functions.
Section 12.07 No Personal Liability of Directors, Officers, Employees and Stockholders.
No past, present or future director, officer, organizer, manager, employee, incorporator,
stockholder or member of the Company or any Guarantor, as such, will have any liability for any
obligations of the Company or the Guarantors under the Notes, this Indenture, the Note Guarantees
or for any claim based on, in respect of, or by reason of, such obligations or their creation.
Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. The waiver may not be effective
to waive liabilities under the federal securities laws.
85
Section 12.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE,
THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
Section 12.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or debt agreement of the
Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
Section 12.10 Successors.
All agreements of the Company in this Indenture and the Notes will bind its successors. All
agreements of the Trustee in this Indenture will bind its successors. All agreements of each
Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 10.05
hereof.
Section 12.11 Severability.
In case any provision in this Indenture or in the Notes is invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not in any way be
affected or impaired thereby.
Section 12.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed copy will be an
original, but all of them together represent the same agreement.
Section 12.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not to be considered a part of
this Indenture and will in no way modify or restrict any of the terms or provisions hereof.
[Signature Pages Follow]
86
SIGNATURES
Dated as of May 22, 2006
| SESI, L.L.C. | ||||||
| By: | SUPERIOR ENERGY SERVICES, INC., | |||||
| Its Sole Member | ||||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Executive Vice President and Chief Financial Officer | ||||||
| Superior Energy Services, Inc. | ||||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Executive Vice President and Chief Financial Officer | ||||||
| 1105 ▇▇▇▇▇▇ ROAD, L.L.C. BLOWOUT TOOLS, INC. CONCENTRIC PIPE AND TOOL RENTALS, L.L.C. CONNECTION TECHNOLOGY, L.L.C. CSI TECHNOLOGIES, LLC DRILLING LOGISTICS, L.L.C. F. & F. WIRELINE SERVICE, L.L.C. FASTORQ, L.L.C. H.B. RENTALS, L.C. INTERNATIONAL SNUBBING SERVICES, L.L.C. J.R.B. CONSULTANTS, INC. NON-MAGNETIC RENTAL TOOLS, L.L.C. PROACTIVE COMPLIANCE, L.L.C. PRODUCTION MANAGEMENT INDUSTRIES, L.L.C. SEGEN LLC SELIM LLC SEMO, L.L.C. SEMSE, L.L.C. SPN RESOURCES, LLC STABIL DRILL SPECIALTIES, L.L.C. SUB-SURFACE TOOLS, L.L.C. SUPERIOR CANADA HOLDING, INC. SUPERIOR ENERGY SERVICES, L.L.C. SUPERIOR INSPECTION SERVICES, INC. UNIVERSAL FISHING AND RENTAL TOOLS, INC. WILD WELL CONTROL, INC. WORKSTRINGS, L.L.C. |
||||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Authorized Representative | ||||||
| SE FINANCE LP | ||||||
| By: | SEGEN, LLC as general partner | |||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||||
| Title: Authorized Representative | ||||||
| THE BANK OF NEW YORK TRUST COMPANY, N.A. | ||||||
| By: | /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |||||
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | ||||||
| Title: Vice President | ||||||
Exhibits have been intentionally omitted, and will be made available to the Securities and Exchange Commission upon request.