EXHIBIT 4.3
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of May
22, 2003, among GREY WOLF, INC., a Texas corporation (the "COMPANY"), the
Guarantors under the Indenture referred to below (the "GUARANTORS"), and
JPMorgan Chase Bank, a New York banking corporation, as trustee under the
Indenture referred to below (the "TRUSTEE").
W I T N E S S E T H :
WHEREAS, the Company and the Guarantors have heretofore executed and
delivered to the Trustee an Indenture (as such may be amended from time to time,
the "INDENTURE"), dated as of May 7, 2003, providing for the issuance of an
aggregate principal amount of up to $187,500,000 (including the Initial
Purchaser's option to purchase $37,500,000 of additional Notes) of 3.75%
Contingent Convertible Senior Notes due 2023 (the "SECURITIES");
WHEREAS, Section 9.01 of the Indenture provides that the Company, the
Guarantors and the Trustee may amend the Indenture or the Securities without the
consent of the Securityholders (i) to cure any ambiguity, omission, defect or
inconsistency and (ii) to make any other change that does not adversely affect
the rights of Securityholders;
WHEREAS, Section 9.01 of the Indenture further provides that any
amendment made within fifteen (15) days of the date of the Indenture solely to
conform the Indenture to the description of the Securities contained in the
Offering Memorandum will not be deemed to adversely affect the interests of the
Securityholders; and
WHEREAS, the Company, the Guarantors and the Trustee have identified
certain matters constituting ambiguities, omissions, defects, inconsistencies or
other changes not adversely affecting the Securityholders (or deemed as such
under Section 9.01 of the Indenture) which they desire to cure by amendment to
the Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Company, the Guarantors and the Trustee hereby amend the Indenture and the form
of Note attached thereto as follows:
1. Definitions. (a) Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture and the
form of Note.
(b) For all purposes of this Supplemental Indenture, except as
otherwise herein expressly provided or unless the context otherwise requires:
(i) the terms and expressions used herein shall have the same meanings as
corresponding terms and expressions used in the Indenture and the form of Note;
and (ii) the words "HEREIN," "HEREOF" and "HEREBY" and other words of similar
import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
2. Amendment to Section 11.07. Section 11.07 of the Indenture is
hereby amended to conform to the Offering Memorandum by deleting Section 11.07
in its entirety and by replacing it with the following revised Section 11.07:
"Section 11.07. Release of Guarantor.
Upon the sale or other transfer of all of the Capital Stock of a
Guarantor to any Person that is not an Affiliate of the Company in compliance
with the terms of this Indenture (including, without limitation, Section 11.04
hereof) and in a transaction that does not result in a Default or an Event of
Default being in existence or continuing immediately thereafter, such Guarantor
shall be deemed automatically and unconditionally released and discharged from
all obligations under this Indenture without any further action required on the
part of the Trustee or any Holder; provided that any such release or discharge
shall occur only to the extent that all obligations of such Guarantor under all
of its guarantees of, and under all of its pledges of assets or other security
interests which secure, other Obligations of the Company, or any other
Subsidiary of the Company, shall also be released or discharged upon such sale
or other transfer. The Trustee shall deliver at the expense of the Company an
appropriate instrument or instruments evidencing such release upon receipt of a
request of the Company accompanied by an Officers' Certificate and Opinion of
Counsel certifying as to the compliance with this Section 11.07 and the other
applicable provisions of this Indenture."
3. Amendment to Form of Note. The second grammatical paragraph of
numbered paragraph 1. of the form of Note attached to the Indenture, which
paragraph is entitled "Interest," is hereby amended to conform to the Offering
Memorandum by deleting such second grammatical paragraph and by replacing it
with the following revised paragraph:
"The Company shall pay contingent interest to the Holders during any
six-month period (a "CONTINGENT INTEREST PERIOD") from May 7 to November 6 and
from November 7 to May 6, commencing May 7, 2008, if the average Security
Trading Price for the five Trading Day period ending on the third Trading Day
immediately preceding the first day of the applicable Contingent Interest Period
equals $1,200 or more. The Security Trading Price, in any such instance, shall
be determined no later than the second Trading Day immediately preceding the
first day of the applicable Contingent Interest Period by the Conversion Agent
acting as calculation agent in the manner set forth in Section 10.01 of the
Indenture within the definition of "Security Trading Price." The amount of
contingent interest payable per $1,000 principal amount of Notes in respect of
any Contingent Interest Period shall equal 0.50% per annum. The Company will pay
contingent interest, if any, in the same manner as it will pay interest as
described above."
To implement the amendment contemplated in this paragraph 3 of this Supplemental
Indenture, the form of Note attached to the Indenture as Exhibit A-1 is hereby
replaced in its entirety with the revised form of Note attached to this
Supplemental Indenture as Exhibit A-1.
4. Replacement Notes. Upon the written request of the Holders,
the Company will issue replacement Notes which shall, thereafter, be the Notes
issued under the Indenture for all purposes.
2
5. Ratification of Indenture. Except as expressly amended hereby,
the Indenture is in all respects ratified and confirmed and all the terms,
conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and
every Holder of Securities heretofore or hereafter authenticated and delivered
shall be bound hereby.
6. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
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.
7. Trustee Makes No Representation. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
8. Counterparts. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
9. Effect of Headings. The Section headings herein are for
convenience only and shall not effect the construction thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
THE COMPANY:
GREY WOLF, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
THE TRUSTEE:
JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
3
THE GUARANTORS:
DI/PERFENSA, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
DI ENERGY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
GREY WOLF DRILLING COMPANY L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
GREY WOLF INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
GREY WOLF HOLDINGS COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
4
GREY WOLF LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
MURCO DRILLING CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Vice President and Treasurer
5
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR U.S. FEDERAL
INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL
REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER $1000 OF PRINCIPAL
AMOUNT, THE ISSUE DATE IS MAY 7, 2003 AND THE COMPARABLE YIELD IS 9.0% PER
ANNUM. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION REGARDING THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE PROJECTED PAYMENT SCHEDULE
FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST FOR SUCH INFORMATION TO: GREY
WOLF, INC., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ATTN.: CHIEF
FINANCIAL OFFICER, SUCH INFORMATION TO BE MADE AVAILABLE, BEGINNING NO LATER
THAN 10 DAYS AFTER THE ISSUE DATE, PROMPTLY UPON REQUEST.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO GREY WOLF, INC. (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 IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE 2 OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY, AND THE COMMON STOCK
DELIVERABLE UPON CONVERSION HEREOF OR UPON PURCHASE OF THIS SECURITY BY THE
COMPANY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
A-1, Page 1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) TO A PERSON WHOM 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, (II) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON SATISFACTION
OF THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-1, Page 2
GREY WOLF, INC.
3.75% Contingent Convertible Senior Notes Due 2023
No.: CUSIP:
Issue Date: Principal Amount:
GREY WOLF, INC., a Texas corporation, promises to pay to Cede & Co. or
registered assigns, the Principal Amount as set forth on Schedule I hereto, on
May 7, 2023, subject to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place. This Security is convertible as specified
on the other side of this Security.
Interest Payment Dates: November 7 and May 7, commencing November 7,
2003
Record Dates: April 22 and October 22, commencing October 22, 2003
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: GREY WOLF, INC.
By: _______________________________________
Name:
Title:
A-1, Page 3
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
JPMORGAN CHASE BANK, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.
By: _______________________________
Authorized Signatory
Dated:
[FORM OF REVERSE SIDE OF NOTE]
GREY WOLF, INC.
3.75% Contingent Convertible Senior Notes Due 2023
1. Interest.
This Security shall accrue interest at an initial rate of 3.75% per
annum. The Company promises to pay interest on the Securities in cash
semiannually on each May 7 and November 7, commencing November 7, 2003, to
Holders of record on the immediately preceding April 22 and October 22,
respectively. Interest on the Securities will accrue from the most recent date
to which interest has been paid, or if no interest has been paid, from May 7,
2003, until the Principal Amount is paid or duly made available for payment. The
Company will pay interest on any overdue Principal Amount at the interest rate
borne by the Securities at the time such interest on the overdue Principal
Amount accrues, compounded semiannually, and it shall pay interest on overdue
installments of interest and Liquidated Damages, if any (without regard to any
applicable grace period), at the same interest rate compounded semiannually.
Interest (including contingent interest, if any) on the Securities will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The Company shall pay contingent interest to the Holders during any
six-month period (a "CONTINGENT INTEREST PERIOD") from May 7 to November 6 and
from November 7 to May 6, commencing May 7, 2008, if the average Security
Trading Price for the five Trading Day period ending on the third Trading Day
immediately preceding the first day of the applicable Contingent Interest Period
equals $1,200 or more. The Security Trading Price, in any such instance, shall
be determined no later than the second Trading Day immediately preceding the
first day of the applicable Contingent Interest Period by the Conversion Agent
acting as calculation agent in the manner set forth in Section 10.01 of the
Indenture within the definition of "Security Trading Price." The amount of
contingent interest payable per $1,000 principal amount of Notes in respect of
any Contingent Interest Period shall equal 0.50% per annum. The Company will pay
contingent interest, if any, in the same manner as it will pay interest as
described above.
2. Method of Payment.
The Company will pay interest (including contingent interest, if any)
and Liquidated Damages, if any, on this Security (except defaulted interest) to
the Person who is the registered Holder of this Security at the close of
business on April 22 or October 22, as the case may be, next preceding the
related interest payment date. Subject to the terms and conditions of the
Indenture, the Company will make payments in respect of the Redemption Price,
Purchase Price, Change in Control Purchase Price and the Principal Amount at
Stated Maturity, as the case may be, to the Holder who surrenders a Security to
a Paying Agent to collect such payments in respect of the Security. The Company
will pay cash amounts in money of the United States that at the time of payment
is legal tender for payment of public and private debts. However, the Company
may pay interest (including contingent interest, if any), Liquidated Damages, if
any, the Redemption Price, Purchase Price, Change in Control Purchase Price and
the Principal Amount at Stated Maturity, as the case may be, by check or wire
payable in such money;
A-1, Page 5
provided, however, that a Holder holding Securities with an aggregate Principal
Amount in excess of $1,000,000 will be paid by wire transfer in immediately
available funds at the election of such Holder. The Company may mail an interest
check to the Holder's registered address. Notwithstanding the foregoing, so long
as this Security is registered in the name of a Depositary or its nominee, all
payments hereon shall be made by wire transfer of immediately available funds to
the account of the Depositary or its nominee.
3. Paying Agent, Conversion Agent and Registrar.
Initially, JPMorgan Chase Bank (the "TRUSTEE") will act as Paying
Agent, Conversion Agent and Registrar. The Company may appoint and change any
Paying Agent, Conversion Agent or Registrar without notice, other than notice to
the Trustee; provided that the Company will maintain at least one Paying Agent
in the State of New York, The City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent or Registrar.
4. Indenture.
The Company issued the Securities under an Indenture dated as of May 7,
2003 (the "INDENTURE"), between the Company, the Guarantors and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as in
effect from time to time (the "TIA"). Capitalized terms used herein and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the Company limited
to up to $187,500,000 aggregate Principal Amount (which shall include the
Initial Purchaser's option to purchase $37,500,000 of additional Securities)
(subject to Section 2.7 of the Indenture). The Indenture does not limit other
indebtedness of the Company, secured or unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The Securities are not
redeemable prior to May 14, 2008. Beginning on May 14, 2008, the Securities are
redeemable as a whole, or from time to time in part, for cash in any integral
multiple of $1,000, at any time at the option of the Company at the following
Redemption Prices (expressed in percentages of the Principal Amount) if redeemed
during the redemption periods set forth below, in each case together with
accrued and unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, thereon, up to but not including the Redemption
Date; provided that, if the Redemption Date is on or after an interest record
date but on or prior to the related interest payment date, interest and
Liquidated Damages, if any, will be payable to the Holders in whose names the
Securities are registered at the close of business on the relevant record date:
A-1, Page 6
Redemption
Period Price
------ ----------
May 14, 2008 through May 6, 2009 101.88 %
May 7, 2009 through May 6, 2010 101.50 %
May 7, 2010 through May 6, 2011 101.13 %
May 7, 2011 through May 6, 2012 100.75 %
May 7, 2012 through May 6, 2013 100.38 %
May 7, 2013 and thereafter 100.00 %
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, all or any portion of
the Securities held by such Holder, in any integral multiple of $1,000, on May
7, 2013 and May 7, 2018 (each, a "PURCHASE DATE") at a purchase price per
Security equal to 100% of the aggregate Principal Amount of the Security (the
"PURCHASE PRICE"), together with accrued and unpaid interest (including
contingent interest, if any) and Liquidated Damages, if any, thereon, up to but
not including the Purchase Date (provided that, if the Purchase Date is on or
after an interest record date but on or prior to the related interest payment
date, accrued and unpaid interest, if any (including contingent interest, if
any), and Liquidated Damages, if any, will be payable to the Holders in whose
names the Securities are registered at the close of business on the relevant
record date) upon delivery of a Purchase Notice containing the information set
forth in the Indenture, together with the Securities subject thereto, at any
time from the opening of business on the date that is 20 Business Days prior to
such Purchase Date until the close of business on the Business Day prior to such
Purchase Date, and upon delivery of the Securities to the Paying Agent by the
Holder as set forth in the Indenture.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Securities
held by such Holder after the occurrence of a Change in Control of the Company
for a Change in Control Purchase Price equal to 100% of the Principal Amount
thereof plus accrued and unpaid interest (including contingent interest, if any)
and Liquidated Damages, if any, thereon, up to but not including the Change in
Control Purchase Date which Change in Control Purchase Price shall be paid in
cash.
Holders have the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay the Purchase Price or Change in Control
Purchase Price, as the case may be, and accrued and unpaid interest (including
contingent interest, if any) and Liquidated Damages, if any, of all Securities
or portions thereof to be purchased as of the Purchase Date or the Change in
Control Purchase Date, as the case may be, is deposited with the Paying Agent on
or before the Business Day following the Purchase Date or the Change in Control
Purchase Date, interest (including contingent interest, if any) and Liquidated
Damages, if any, will cease to accrue on such Securities (or portions thereof)
on and after such Purchase Date or Change in Control Purchase Date, and the
Holder thereof shall have no other rights as
A-1, Page 7
such other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, upon surrender of such Security.
7. Notice of Redemption.
Notice of redemption pursuant to paragraph 5 of this Security will be
mailed at least 20 days but not more than 60 days before the Redemption Date to
each Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, immediately after such Redemption Date
interest (including contingent interest, if any) and Liquidated Damages, if any,
cease to accrue on such Securities or portions thereof. Securities in
denominations larger than $1,000 of Principal Amount may be redeemed in part but
only in integral multiples of $1,000 of Principal Amount.
8. Conversion.
Subject to the provisions of Article 10 of the Indenture, a Holder of a
Note may convert such Note into shares of Common Stock of the Company if any of
the conditions specified in paragraphs (a) through (g) of Section 10.01 of the
Indenture is satisfied; provided, however, that if such Note is called for
redemption, the conversion right will terminate at the close of business on the
second Business Day before the redemption date of such Note (unless the Company
shall default in making the redemption payment when due, in which case the
conversion right shall terminate at the close of business on the date such
Default is cured and such Note is redeemed). The initial conversion price is
$6.45 per share, subject to adjustment under certain circumstances as described
in the Indenture (the "CONVERSION PRICE"). The number of shares issuable upon
conversion of a Note is determined by dividing the principal amount converted by
the Conversion Price in effect on the Conversion Date. In the event of a
conversion of a Note in a Principal Value Conversion the Company has the option
to deliver cash and/or Common Stock to the Holder of the Note surrendered for
such conversion as provided in Section 10.2 of the Indenture. Upon conversion,
no adjustment for interest, if any (including contingent interest, if any),
Liquidated Damages, if any, or dividends will be made. No fractional shares will
be issued upon conversion; in lieu thereof, an amount will be paid in cash based
upon the current market price (as defined in the Indenture) of the Common Stock
on the last Trading Day prior to the date of conversion.
To convert a Note, a Holder must (a) complete and sign the conversion
notice set forth below and deliver such notice to the Conversion Agent, (b)
surrender the Note to the Conversion Agent, (c) furnish appropriate endorsements
and transfer documents if required by the Registrar or the Conversion Agent, (d)
pay any transfer or similar tax, if required and (e) if the Note is held in
book-entry form, complete and deliver to the Depositary appropriate instructions
pursuant to the Depositary's book-entry conversion programs. If a Holder
surrenders a Note for conversion between the record date for the payment of an
installment of interest and the next interest payment date, the Note must be
accompanied by payment of an amount equal to the interest (including contingent
interest, if any) and Liquidated Damages, if any, payable on such interest
payment date on the principal amount of the Note or portion thereof then
converted; provided, however, that no such payment shall be required if such
Note has been called for redemption on a redemption date within the period
between and including such record date and such interest
A-1, Page 8
payment date, or if such Note is surrendered for conversion on the interest
payment date. A Holder may convert a portion of a Note equal to $1,000 or any
integral multiple thereof.
A Note in respect of which a Holder has delivered a Purchase Notice or
a Change of Control Repurchase Notice exercising the option of such Holder to
require the Company to repurchase such Note as provided in Section 3.08 or
Section 3.09, respectively, of the Indenture may be converted only if such
notice of exercise is withdrawn as provided above and in accordance with the
terms of the Indenture.
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or a Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
subject to applicable unclaimed property law. After return to the Company,
Holders entitled to the money or securities must look to the Company, for
payment as general creditors unless an applicable abandoned property law
designates another person.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Securityholder, the Company, the
Guarantors and the Trustee may amend the Indenture or the Securities (i) to
comply with Article 5 or Section 10.01 or Section 10.12 of the Indenture, (ii)
to cure any ambiguity, omission, defect or inconsistency, (iii) to make any
other change that does not adversely affect the rights of any Securityholder,
(iv) to add
A-1, Page 9
covenants, including applicable defeasance provisions relating thereto, and
Events of Default or to surrender any rights the Company has under the Indenture
that do not adversely affect the Holders of the Securities, (v) to provide
security for the Securities, (vi) to evidence and provide for the acceptance of
appointment under the Indenture by a successor or another Trustee, (vii) to
comply with the TIA or with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA, (viii) to add or release any
Guarantor pursuant to the terms of the Indenture, and (ix) to release any
Guarantor pursuant to the terms of the Indenture other than as contemplated
under Article 11, provided it does not adversely affect the interests of the
Holders of the Securities in any material respect; provided that any amendment
made within 15 days after the date of the Indenture solely to conform the
provisions of the Indenture to the description of the Securities contained in
the Offering Memorandum will not be deemed to adversely affect the interests of
Holders of the Securities.
13. Defaults and Remedies.
Under the Indenture, Events of Default include, in summary form, (i)
default for 30 days in payment of any interest (including contingent interest,
if any) or Liquidated Damages, if any, on any Securities; (ii) default in
payment of the Principal Amount, Redemption Price, Purchase Price or Change in
Control Purchase Price, as the case may be, in respect of the Securities when
the same becomes due and payable; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, subject to notice and lapse
of time; (iv) default by the Company or its Subsidiaries in the payment at the
final maturity thereof, after the expiration of any applicable grace period, of
principal of indebtedness for money borrowed in the principal amount then
outstanding in excess of $10,000,000, or acceleration of any indebtedness in
such principal amount so that it becomes due and payable prior to the date on
which it would otherwise have become due and payable and such acceleration is
not rescinded within 30 business days after notice to the Company in accordance
with the Indenture; (v) a Guarantee by a Guarantor that is a "significant
subsidiary" as defined in Item 1-02(w) of Regulation S-X ceases to be or is
asserted by the Company or any Guarantor not to be in full force and effect
(other than in accordance with the terms of the Indenture and such Guarantee);
and (vi) certain events of bankruptcy or insolvency.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(i) or (ii) above) if it determines that withholding notice is in their
interests.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
A-1, Page 10
15. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of the Company
or a Guarantor shall not have any liability for any obligations of the Company
or a Guarantor under the Securities, the Guarantees or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release are part of the consideration for the
issue of the Securities.
16. Authentication.
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).
18. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
The Company will furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
Grey Wolf, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn.: Chief Financial Officer
A-1, Page 11
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill in the form below: To convert this Security into Common Stock of the
Company, check the box [ ]
I or we assign and transfer this Security to To convert only part of this Security, state the
Principal Amount to be converted (which must be
(Insert assignee's soc. sec. or tax ID no.) $1,000 or an integral multiple of $1,000):
(Print or type assignee's name, address and zip code) If you want the stock certificate made out in
another person's name fill in the form below:
and irrevocably appoint____________________________
agent to transfer this Security on the books of the
Company. The agent may substitute another to act for
him.
__________________________________________________
__________________________________________________
(Insert the other person's soc. sec. tax ID no.)
__________________________________________________
__________________________________________________
__________________________________________________
__________________________________________________
(Print or type other person's name, address and zip
code)
Date:______________ Your Signature: ______________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guaranteed
_____________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By: _________________________________
Authorized Signatory
A-1, Page 12
