SECOND SUPPLEMENTAL INDENTURE
SECOND SUPPLEMENTAL INDENTURE (this Second Supplemental Indenture), dated as of October 1, 2021, is among Pioneer Energy Services Corp., a Delaware corporation (the Company), the guarantors party hereto (the Guarantors), Patterson-UTI Energy, Inc., a Delaware corporation (the Successor Company Parent), and Wilmington Trust, National Association, as trustee (in such capacity, the Trustee).
WHEREAS, the Company and the Guarantors heretofore executed and delivered to the Trustee that certain Indenture, dated as of May 29, 2020, providing for the issuance of the Companys 5.00% Convertible Senior Unsecured PIK Notes due 2025 (the Notes) and such Indenture was amended by that certain First Supplemental Indenture dated as of May 14, 2021 (as so amended, the Indenture);
WHEREAS, Sections 10.01(f) and 14.07 of the Indenture provide that, in certain instances, including where a merger involving the Company is to occur and where as a result of such merger, a Share Exchange Event (as defined in Section 14.07 of the Indenture) occurs when the Notes become payable upon any conversion in equity securities other than common stock of the Company, then a Supplemental Indenture should be executed and delivered;
WHEREAS, the Company has entered into that certain Agreement and Plan of Merger, dated as of July 5, 2021 (as amended, Merger Agreement), with Successor Company Parent, Crescent Merger Sub Inc., a Delaware corporation (Merger Sub Inc.) and Crescent Ranch Second Merger Sub LLC, a Delaware limited liability company, which provides, among other things, for a merger of Merger Sub Inc. with and into the Company (the Merger);
WHEREAS, as a result of the Merger, (i) the Company shall, immediately following the Merger, be the surviving corporation of the Merger, (ii) the Company shall become a wholly-owned subsidiary of the Successor Company Parent and (iii) the shares of equity deliverable to the Noteholders, upon any conversion of the Notes following the Merger would be shares of common stock, par value $0.01 per share, of the Successor Company Parent (Successor Company Parent Shares) as opposed to shares of common stock of the Company;
WHEREAS, in connection with consummation of the Merger, the Company and Successor Company Parent intend to cause an Accelerated Mandatory Conversion of the Notes in accordance with Section 14.01(c) of the Indenture whereupon the Noteholders will receive Successor Company Parent Shares in full payment, discharge and satisfaction of the Notes;
WHEREAS, following the effective time of the Merger in accordance with the terms of Section 14.01(c) of the Indenture and of the Merger Agreement, the Company and Successor Parent Company will (i) deposit with the Trustee the cash required to pay accrued but unpaid interest under the Notes and (ii) deposit with the Exchange Agent under the Merger Agreement the number of Successor Company Parent Shares payable to the Noteholders as a result of such Accelerated Mandatory Conversion;