PIONEER ENERGY SERVICES CORP (Form: 8-K, Received: 06/02/2020 06:04:40)

Taxpayer ID Number:

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): May 29, 2020

PIONEER ENERGY SERVICES CORP.

(Exact name of registrant as specified in its charter)


Delaware	1-8182	74-2088619
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1250 N.E. Loop 410, Suite 1000 San Antonio, Texas		78209
(Address of principal executive offices)		(ZIP Code)

Registrant’s telephone number, including area code: (855) 884-0575

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Introductory Note

As previously disclosed, on March 1, 2020, Pioneer Energy Services Corp. (“Pioneer” or the “Company”) and its affiliates, Pioneer Coiled Tubing Services, LLC, Pioneer Drilling Services, Ltd., Pioneer Fishing & Rental Services, LLC, Pioneer Global Holdings, Inc., Pioneer Production Services, Inc., Pioneer Services Holdings, LLC, Pioneer Well Services, LLC, Pioneer Wireline Services Holdings, Inc. and Pioneer Wireline Services, LLC filed voluntary petitions for relief under Title 11 (“Chapter 11”) of the United States Code (the “Cases”) in the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”) and, on March 2, 2020, filed the prepackaged Chapter 11 plan of reorganization (the “Plan”) with the Bankruptcy Court.

On May 11, 2020, the Bankruptcy Court entered an order, Docket No. 331 (the “Confirmation Order”) confirming the Plan. On May 29, 2020 (the “Effective Date”) the conditions to effectiveness of the Plan were satisfied and the Company emerged from Chapter 11. The Company filed a notice of the Effective Date of the Plan with the Bankruptcy Court on May 29, 2020 (the “Notice of Effective Date”). A copy of the Notice of Effective Date is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

As part of the transactions undertaken pursuant to the Plan, the Company was converted from a Texas corporation to a Delaware corporation.

Item 1.01 Entry into a Material Definitive Agreement.

ABL Credit Agreement

On the Effective Date, pursuant to the terms of the Plan, the Company entered into a senior secured asset-based revolving credit agreement in an aggregate amount of $75 million (the “ABL Credit Agreement”) among the Company and its domestic subsidiaries as borrowers (the “Borrowers”), the lenders party thereto and PNC Bank, National Association as administrative agent. Among other things, proceeds of loans under the ABL Credit Agreement may be used to pay fees and expenses associated with the ABL Credit Agreement and finance ongoing working capital and general corporate needs of the Company and certain of its subsidiaries.

The maturity date of loans made under the ABL Credit Agreement is the earliest of (i) 90 days prior to maturity of the Senior Secured Notes (as defined below), (ii) 90 days prior to the maturity of the Convertible Notes (as defined below), and (iii) May 29, 2025. Revolving Loans (as defined in the ABL Credit Agreement) under the ABL Credit Agreement will bear interest at a rate of (i) in the case of LIBOR rate borrowings, the LIBOR rate, with a LIBOR rate floor of 0%, plus an applicable margin in the range of 175 to 225 basis points per annum, and (ii) in the case of base rate borrowings, the base rate plus an applicable margin in the range of 75 to 125 basis points per annum, in the case of clauses (i) and (ii), based on the Average Excess Availability (as defined in the ABL Credit Agreement).

The ABL Credit Agreement has a financial covenant that requires the Borrowers (as defined in the ABL Credit Agreement) to maintain a Fixed Charge Coverage Ratio (as defined in the ABL Credit Agreement) of 1.00 to 1.00 during any Covenant Testing Period (as defined in the ABL Credit Agreement). The ABL Credit Agreement also has a financial covenant that limits the Borrowers’ annual Capital Expenditures (as defined in the ABL Credit Agreement) to 125% of the budget set forth in the Projections (as defined in the ABL Credit Agreement) for any fiscal year. The ABL Credit Agreement is guaranteed by the Borrowers and is secured by a first lien on the Borrowers accounts receivable and inventory, and the cash proceeds thereof, and a second lien on substantially all of the other assets and properties of the Borrowers.

Upon the Effective Date, the Company had no borrowings and approximately $7,054,000 in outstanding letters of credit under the ABL Credit Agreement.

The foregoing description of the ABL Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the ABL Credit Agreement, which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.

Convertible Notes Indenture and Convertible Notes due 2025

The Company entered into an indenture, dated as of the Effective Date (the “Convertible Notes Indenture”), among the Company and Wilmington Trust, N.A., as trustee, and issued $129,771,000 aggregate principal amount of its convertible senior unsecured pay-in-kind notes due 2025 (the “Convertible Notes”) thereunder. The following is a brief description of the material provisions of the Convertible Notes Indenture and the Convertible Notes.

The Convertible Notes will mature on November 15, 2025, unless earlier redeemed, converted or repurchased. The Convertible Notes are general unsecured obligations of the Company. The Convertible Notes bear interest at a fixed rate of 5% per annum, which will be payable semi-annually in-kind in the form of an increase to the principal amount.

The Convertible Notes are convertible at the option of the holders at any time into shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The Convertible Notes will convert mandatorily into Common Stock at maturity; provided, however, that if the value of the Common Stock otherwise deliverable in connection with a mandatory conversion of a Convertible Note on the maturity date would be less than the principal amount of such Convertible Note plus accrued and unpaid interest, then the Convertible Note will instead convert into an amount of cash equal to the principal amount thereof plus accrued and unpaid interest. The initial conversion rate is 75 shares of the Common Stock per $1,000 principal amount of the Convertible Notes. The conversion rate is subject to customary anti-dilution adjustments.

If the Company undergoes a “fundamental change” as defined in the Convertible Notes Indenture, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their Convertible Notes. The fundamental change repurchase price will be 100% of the principal amount of the Convertible Notes to be repurchased plus any accrued and unpaid interest. In the case of certain fundamental change events that constitute merger events (as defined in the Convertible Notes Indenture), the Company has a superseding right to cause the mandatory conversion of the Convertible Notes.

The Company may, at its option, cause the conversion of all or part of the Convertible Notes into, per $1,000 principal amount of Convertible Notes, a number of shares of Common Stock equal to the then-current conversion rate or the cash value of such number of shares of Common Stock (but not less than the principal amount of the Convertible Notes), upon the consummation of a “merger event” (as defined in the Convertible Notes Indenture).

Holders of Convertible Notes are entitled to vote on all matters on which holders of Common Stock generally are entitled to vote (or, if any, to take action by written consent of the holders of Common Stock), voting together as a single class together with the shares of Common Stock and not as a separate class, on an as-converted basis, at any annual or special meeting of holders of Common Stock of the Company and each holder is entitled to such number of votes as such holder would receive on an as-converted basis on the record date for such vote.

The Convertible Notes Indenture contains covenants that limit the Company’s ability and the ability of certain of its subsidiaries to incur, assume or guarantee additional indebtedness and create liens and enter into mergers or consolidations.

The Convertible Notes Indenture contains customary events of default. In the case of an event of default arising from certain events of bankruptcy, insolvency or other similar law, with respect to the Company or any significant subsidiary of the Company, all outstanding Convertible Notes will become due and payable immediately without further action or notice. If any other event of default occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the Convertible Notes then outstanding may declare the Convertible Notes due and payable immediately.

The Convertible Notes Indenture provides, subject to certain exceptions, that for so long as the Common Stock is registered under the Securities Exchange Act of 1934 (the “Exchange Act”), a beneficial owner of the Convertible Notes is not entitled to receive shares of Common Stock upon an optional conversion of any Convertible Notes during any period of time in which the aggregate number of shares of Common Stock that may be acquired by such beneficial owner upon conversion of Convertible Notes shall, when added to the aggregate number of shares of Common Stock deemed beneficially owned, directly or indirectly, by such beneficial owner and each person subject to aggregation of Common Stock with such beneficial owner under Section 13 or Section 16 of the Exchange Act at such time, exceed 9.99% of the total issued and outstanding shares of Common Stock.

The foregoing description of the Convertible Notes Indenture and the Convertible Notes is qualified in its entirety by the full text of those documents, which are attached as Exhibits 4.1 and 4.2 to this Form 8-K and are incorporated herein by reference.

Senior Secured Notes Indenture and Senior Secured Notes due 2025

The Company entered into an indenture, dated as of the Effective Date (the “Senior Secured Notes Indenture”), among the Company, the subsidiary guarantor party thereto and Wilmington Trust, N.A., as trustee, and issued $78,125,000 aggregate principal amount of its floating rate senior secured notes due 2025 (the “Senior Secured Notes”) thereunder. The

Senior Secured Notes are guaranteed on a senior secured basis by the Company’s existing subsidiaries that also guarantee its obligations under the ABL Credit Agreement (the “Guarantors”) on a full and unconditional basis and are secured by a second lien on the accounts receivable and inventory and a first lien on substantially all of the other assets and properties (including the cash proceeds thereof) of the Company and the Guarantors. The following is a brief description of the material provisions of the Senior Secured Notes Indenture and the Senior Secured Notes.

The Senior Secured Notes will mature on May 15, 2025. Interest on the Senior Secured Notes will accrue at the rate of LIBOR plus 9.50% per annum, with a LIBOR rate floor of 1.5%, and will be payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year, commencing on August 15, 2020. With respect to any interest payment due on or prior to May 29, 2021, 50% of the interest will be payable in cash and 50% of the interest will be paid in-kind in the form of an increase to the principal amount. A majority of the holders of the Senior Secured Notes may amend the Senior Secured Notes Indenture to provide that 100% of the interest will be payable in-kind with respect to any interest payment due on or prior to May 29, 2021. For all interest periods commencing on or after May 15, 2024, the interest rate for the Senior Secured Notes for a particular interest period will be a rate equal to LIBOR plus 10.50%, with a LIBOR rate floor of 1.5%.

The Company may not redeem the Senior Secured Notes prior to June 1, 2021. On and after June 1, 2021, the Company may redeem all or part of the Senior Secured Notes at redemption prices (expressed as percentages of the principal amount) equal to (i) 104.000% for the twelve-month period beginning on June 1, 2021; (ii) 102.000% for the twelve-month period beginning on June 1, 2022; (iii) 101.000% for the twelve-month period beginning on June 1, 2023 and (iii) 100.000% for the twelve-month period beginning June 1, 2024 and at any time thereafter, plus accrued and unpaid interest at the redemption date. Notwithstanding the foregoing, if a change of control (as defined in the Senior Secured Notes Indenture) occurs prior to June 1, 2022, the Company may elect to purchase all remaining outstanding Senior Secured Notes not tendered to the Company as described below at a redemption price equal to 103.000% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the applicable redemption date.

If a change of control (as defined in the Senior Secured Notes Indenture) occurs, holders of the Senior Secured Notes will have the right to require the Company to repurchase all or any part of their Senior Secured Notes at a purchase price equal to 101.000% of the aggregate principal amount of the Senior Secured Notes repurchased, plus accrued and unpaid interest, if any, to the repurchase date.

The Senior Secured Notes Indenture contains covenants that limit, among other things, the Company’s ability and the ability of certain of its subsidiaries, to: incur, assume or guarantee additional indebtedness; pay dividends or distributions on capital stock or redeem or repurchase capital stock; make investments; repay junior debt; sell stock of its subsidiaries; transfer or sell assets; enter into sale and lease back transactions, create liens; enter into transactions with affiliates; and enter into mergers or consolidations.

The Company is also subject to a minimum asset coverage ratio, pursuant to which the Company shall not permit its asset coverage ratio to be less than 1.5 to 1 as of any June 30 or December 31.

The Senior Secured Notes Indenture also provides for certain customary events of default, including, among others, nonpayment of principal or interest, breach of covenants, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, failure of a security document to create an effective security interest in collateral, bankruptcy and insolvency events, and cross acceleration, which would permit the principal, premium, if any, interest and other monetary obligations on all the then outstanding Senior Secured Notes to be declared due and payable immediately.

The foregoing description of the Senior Secured Notes Indenture and the Senior Secured Notes is qualified in its entirety by the full text of those documents, which are attached as Exhibits 4.3 and 4.4 to this Form 8-K and are incorporated herein by reference.

Intercreditor Agreement

On the Effective Date, PNC Bank, National Association, as administrative agent under the ABL Credit Agreement, Wilmington Trust, N.A. as collateral agent under the Senior Secured Notes Indenture, and the Company and certain of its subsidiaries entered into an intercreditor agreement (the “Intercreditor Agreement”) that, among other things, sets forth the relative lien priorities of the secured parties under the ABL Credit Agreement and the Senior Secured Notes Indenture on the collateral securing the Borrowers’ obligations under the ABL Credit Agreement and the Senior Secured Notes Indenture. Obligations under the ABL Credit Agreement are secured by a first-priority lien on ABL Priority Collateral, which generally includes accounts receivables and inventory assets of the Borrowers, whereas obligations under the Senior Secured Notes are secured by a first-priority lien on Notes Priority Collateral, which generally includes most fixed assets, equity interests and intellectual property of the Borrowers.

The foregoing description of the Intercreditor Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Intercreditor Agreement, which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

Registration Rights Agreement

On the Effective Date, the Company entered into a registration rights agreement (the “Registration Rights Agreement”) with certain parties who received the Company’s Common Stock and the Convertible Notes on the Effective Date (the “Securityholders”). The Registration Rights Agreement provides resale registration rights for the Securityholders’ Registrable Securities (as defined in the Registration Rights Agreement).

Pursuant to the Registration Rights Agreement, Securityholders have customary demand, shelf and piggyback registration rights, subject to the limitations set forth in the Registration Rights Agreement. Under their demand registration rights, Securityholders with an aggregate ownership percentage of at least 30% (15% after the Company completes its initial underwritten public offering (as such term is defined in the Registration Rights Agreement)) have the right to demand the Company register any or all of their Registrable Securities under the Securities Act of 1933. The Company is not obligated to effect a demand registration under certain circumstances.

These registration rights are subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares to be included in an offering and the Company’s right to delay or withdraw a registration statement under certain circumstances. The Company will generally pay all registration expenses in connection with its obligations under the Registration Rights Agreement, regardless of whether a registration statement is filed or becomes effective. The registration rights granted in the Registration Rights Agreement are subject to customary indemnification and contribution provisions, as well as customary restrictions such as blackout periods.

The foregoing description of the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Registration Rights Agreement, which is attached hereto as Exhibit 10.3 and is incorporated by reference herein.

Item 1.02 Termination of a Material Definitive Agreement.

Equity Interests

On the Effective Date, by operation of the Plan, all agreements, instruments, and other documents evidencing, relating to or connected with any equity interests of the Company, including the existing common stock, issued and outstanding immediately prior to the Effective Date, and any rights of any holder in respect thereof, were deemed cancelled, discharged and of no force or effect.

DIP Credit Agreement

On the Effective Date, the senior secured superpriority debtor-in-possession credit agreement the Company previously entered into with the lenders party thereto, PNC Bank, National Association, as administrative agent, collateral agent and issuing bank, was paid in full and terminated.

Senior Notes and Credit Agreements

On the Effective Date, by operation of the Plan, all outstanding obligations under each of the following debt instruments were cancelled and the applicable agreements governing such obligations were terminated.

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Term Loan Agreement, dated as of November 8, 2017, by and among Pioneer, as the borrower, the lenders party thereto and Wilmington Trust, National Association, as administrative agent;

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Credit Agreement, dated as of November 8, 2017, by and among Pioneer, as the parent and a borrower, the other borrowers party thereto, Wells Fargo, National Association, as administrative agent and collateral agent, and the other lenders party thereto; and

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6.125% Senior Notes due 2022 issued by Pioneer pursuant to the Indenture, dated March 18, 2014, by and among Pioneer, as the issuer, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in the Introductory Note and Item 1.01 above relating to the ABL Credit Agreement, the Senior Secured Notes Indenture, the Senior Secured Notes, the Convertible Notes Indenture and the Convertible Notes is incorporated herein by reference into this Item 2.03.

Item 3.02 Unregistered Sales of Equity Securities

Upon the effectiveness of the Plan, all previously issued and outstanding equity interests in the Company were cancelled and the Company issued 1,049,804 shares of its Common Stock to the holders of the Company’s existing unsecured senior notes and holders of existing common stock of the Company prior to the Effective Date. Upon the effectiveness of the Plan, the Company also issued $129,771,000 aggregate principal amount of Convertible Notes, which on the Effective Date were convertible into approximately 9,732,825 shares of Common Stock.

The shares of Common Stock described above were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 1145 of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”) (which generally exempts from such registration requirements the issuance of securities under a plan of reorganization). The Convertible Notes described above were exempt from registration under the Securities Act pursuant to Section 4(a)(2) thereof and Regulation D promulgated thereunder.

The information required by this Item 3.02 relating to the foregoing and set forth under the Introductory Note or Item 1.01 above is incorporated herein by reference into this Item 3.02.

Item 3.03 Material Modification to Rights of Security Holders

The information set forth under the Introductory Note and Items 1.01, 1.02, 3.02, 5.01 and 5.03 of this Current Report on Form 8-K is incorporated herein by reference.

Item 5.01 Changes in Control of Registrant

As previously disclosed, on the Effective Date, all previously issued and outstanding equity interests in the Company were cancelled. Pursuant to the Plan, the Company issued shares of Common Stock representing approximately 94.25% of the outstanding Common Stock (before giving effect to the conversion of the Convertible Notes and any shares of Common Stock that may be issued pursuant to the Equity Incentive Plan described below) to holders of the Company’s unsecured senior notes outstanding immediately prior to the Effective Date and the remaining 5.75% of the outstanding Common Stock (before giving effect to the conversion of the Convertible Notes and any shares of Common Stock that may be issued pursuant to the Equity Incentive Plan described below) to the holders of existing common stock outstanding immediately prior to the Effective Date. For further information, see items 1.01, 1.02, 3.02 and 3.03 of this Current Report on Form 8-K, which are incorporated herein by reference.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Departure and Appointment of Directors

Pursuant to the Plan, as of the Effective Date, the following directors ceased to serve on the Company’s board of directors: Dean A. Burkhardt, Tamara Morytko, J. Michael Rauh, C. John Thompson and Scott D. Urban.

Pursuant to the Plan, the Company’s new board of directors consists of five members, including Wm. Stacy Locke, as chief executive officer, and the four members listed below, who were appointed as of the Effective Date:

Charlie Thompson currently serves as chairman of the board and chief executive officer at Nuverra Environmental Solutions, a middle market oilfield water logistics company. Mr. Thompson founded PinHigh Capital Partners, a Houston-based family office affiliated investment partnership with a focus on private oil service and exploration and production investments. Previously, Mr. Thompson spent two years at Nomura Securities building the oil and gas investment banking business, and from 2004 to 2014 he was an original partner of Legacy Partners Group. Mr. Thompson holds a B.A. in geology from Williams College and attended Columbia Business School.

David Coppé currently serves on the board of Legacy Reserves Inc., an oil and gas producer focused on horizontal development in the Permian basin. He also serves on the board of RDV Resources (f/k/a Sheridan I). Mr. Coppé served as director and head of energy, private equity of Caisse de Dépôt et Placement du Québec from March 2017 until March 2019. Mr. Coppé was also a co-founder and partner at Cadent Energy Partners, LLC, an energy-focused private equity firm, and chief executive officer of Probe Holdings, Inc., an independent manufacturer of wireline and downhole equipment for oil and gas wells. He started his career as a field engineer for Schlumberger and also worked for Goldman Sachs. Mr. Coppé received an M.B.A. from Massachusetts Institute of Technology and a Mechanical Engineering degree from the University of Louvain, Belgium.

John Jacobi began his full-time employment in the energy business in 1981 working for Woolf & Magee Inc., a drilling, exploration and production company. In 1991, Mr. Jacobi co-founded Jacobi-Johnson Energy, Inc., an independent oil and gas producer, and served as its president focusing on acquisitions in the Ark-La-Tex and Gulf Coast Basins. In 1998, Jacobi-Johnson Energy, Inc. was sold to EXCO Resources, where Mr. Jacobi served as vice president of business development and marketing and led the acquisition efforts on transactions valued at approximately $8 billion. In June 2013, Mr. Jacobi co-founded Covey Park Energy, Inc., again focusing on acquisitions and served as its co-chief executive officer. Covey Park Energy, Inc. was sold to Comstock Resources in July 2019, and Mr. Jacobi currently serves on its board.

Matt Porter is currently a founding partner at Activos, LLC, a consulting company in domestic and international oilfield service industry and Allied Industrial Partners, an investment firm that focuses on investments in manufacturing, distribution, energy and industrial service companies. Previously, he was a chief executive officer, president and director at Xtreme Drilling Corp. and chief financial officer at Bronco Drilling Company. He started his career at BOK Financial Corp. as portfolio manager. Mr. Porter received his M.B.A. and B.B.A. from University of Oklahoma.

Other than as set forth in the Plan, there are no arrangements or understandings between any of the listed directors and any other persons pursuant to which such director was selected as a director and there are no transactions in which any of the listed directors has an interest in which requires disclosure under Item 404(a) of Regulation S-K.

Equity Incentive Plan

Pursuant to the terms of the Plan, the Company adopted the Pioneer Energy Services Corp. 2020 Equity Incentive Plan (the “Equity Incentive Plan”) providing for the issuance from time to time, as approved by the Company’s new board of directors, of equity and equity-based awards with respect to the Common Stock in the aggregate and on a fully-diluted basis, of up to 1,198,074 shares of Common Stock, representing approximately 114 percent (114%) of the shares of Common Stock issued on the Effective Date, but representing 10 percent (10%) of the shares of Common Stock issued on the Effective Date on a fully-diluted basis. The shares of Common Stock issued under the Equity Incentive Plan in the future will dilute all of the shares of Common Stock issued on the Effective Date and all shares of Common Stock issued upon conversion of the Convertible Notes equally.

The foregoing description of the Equity Incentive Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Equity Incentive Plan, which is attached hereto as Exhibit 10.4 and is incorporated by reference herein.

Severance Plan

Pursuant to the terms of the Plan, the Company adopted the Pioneer Energy Services Corp. Key Executive Severance Plan (the “Severance Plan”) providing for protection for loss of salary and benefits in the event of certain involuntary terminations of employment from the Company for sixteen key employees (each a “participant”) to assist the Company in retaining an intact management team.

The Severance Plan provides that if an eligible participant’s employment with the Company is terminated by the Company other than for “cause” or due to voluntary resignation by the participant with “good reason” (each as defined in the Severance Plan), the participant will be eligible to receive accrued benefits (including base salary, vacation pay and other earned benefits) and a lump-sum cash payment in an amount set forth in Schedule A to the Severance Plan, as well as continuation of life insurance and medical benefits for twelve months from the date of the such termination.

Receipt of severance benefits are subject to the participant’s execution of a release of any claims against the Company and compliance with restrictive covenants, including non-competition and non-solicitation covenants.

The foregoing description of the Severance Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the Severance Plan, which is attached hereto as Exhibit 10.5 and is incorporated by reference herein.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On the Effective Date, the Company changed its domicile from Texas to Delaware.

On the Effective Date, pursuant to the terms of the Plan, the Company filed the Certificate of Incorporation of the Company (the “Certificate of Incorporation”) with the office of the Secretary of State of the State of Delaware and adopted the Amended and Restated Bylaws of the Company (the “Bylaws”). A description of the material changes from the Company’s prior certificate of incorporation (the Restated Articles of Incorporation of Pioneer Energy Services Corp., filed with the Securities and Exchange Commission (the “SEC”) as Exhibit 4.1 to the Company’s S-3 dated May 22, 2018, the “Prior Certificate”) and bylaws (the Amended and Restated Bylaws of Pioneer Energy Services Corp., filed with the SEC as Exhibit 3.1 to the Company’s 8-K filed July 2, 2019, the “Prior Bylaws”) is set forth below. Additionally, the General Corporation Law of the State of Delaware (the “DGCL”) may contain provisions that affect the capital stock of the Company.

With respect to the Certificate of Incorporation, the material differences between the Certificate of Incorporation and the Prior Certificate are as follows:

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The Certificate of Incorporation authorizes the Company to issue up to 25,000,000 shares of Common Stock, and 1,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”). The Prior Certificate authorized the Company to issue up to 210,000,000 shares, consisting of 200,000,000 shares of common stock, par value $0.10 per share, and 10,000,000 shares of preferred stock, par value $1.00 per share.

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The Certificate of Incorporation prohibits the Company from issuing non-voting equity securities (which shall not be deemed to include any warrants or options to purchase capital stock of the Corporation) to the extent prohibited by Section 1123(a)(6) of the Bankruptcy Code. The Prior Certificate did not contain a similar provision.

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In addition to Common Stock and Preferred Stock, if any, the Certificate of Incorporation also sets out the voting rights with respect to holders of the Company’s Convertible Notes, who are entitled to vote upon all matters upon which holders of any class or classes of Common Stock have the right to vote under Delaware law or the Certificate of Incorporation and shall be deemed to be stockholders of the Company (and the Convertible Notes shall be deemed to be stock) for the purpose of any provision of the DGCL that requires the vote of stockholders as a prerequisite to any corporate action. The number of votes represented by each Convertible Note is equal to the largest number of whole shares of Common Stock (rounded down to the nearest whole share) into which such Convertible Note may be converted, in accordance with the Convertible Notes Indenture, at the record date for the determination of the stockholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken.

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The Convertible Noteholders have the same right of inspection of the books, accounts and other records of the Company which the holders of Common Stock have or may have under the DGCL or the Certificate of Incorporation.

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Under the Certificate of Incorporation, the term a director serves before reelection was lowered from three years to one year, and all directors sitting on the board are now of the same class, and all will be voted on for reelection at each annual meeting of the stockholders. The Certificate of Incorporation requires all directors, other than the Chief Executive Officer of the Company in his capacity as a director, to satisfy the independence requirements of The Nasdaq Global Market, The Nasdaq Global Select Market and The New York Stock Exchange. The Prior Certificate did not contain a similar provision.

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The Certificate of Incorporation provides that any or all of the directors of the Company may be removed from office, with or without cause, by the affirmative vote of the holders of at least a majority of the voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class. The Prior Certificate provided that a director could only be removed by the stockholders for cause, as specifically defined in the Prior Certificate.

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The Certificate of Incorporation expressly states that the Company elects not to be governed by Section 203 of the DGCL (Business combinations with interested stockholders). The Prior Certificate did not contain a comparable provision.

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The Certificate of Incorporation expressly provides that approval by the holders of at least 60% of the total voting power of all outstanding securities of the Company generally entitled to vote at a meeting of stockholders (including the Convertible Notes) is required to be obtained prior to the consummation of any Deemed Liquidation Event. “Deemed Liquidation Event” means any acquisition of beneficial ownership of more than 50% of the total voting power of all outstanding securities of the Company generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class, any sales or dispositions of all or substantially all of the assets of the Company on a consolidated basis, or any merger, consolidation, recapitalization or similar transaction where the Common Stock is converted into, or exchanged for, any other consideration. Under the Texas Business Organizations Code, two-thirds of the total voting power of all outstanding securities of the Company generally entitled to vote at a meeting of stockholders was required to approve a Deemed Liquidation Event.

•

The Certificate of Incorporation provides that a director of the Company shall not be liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL. The Prior Certificate had a similar provision, but also expressly stated that nothing in the Prior Certificate eliminates or limits the liability of a director to the extent the director is found liable for: (1) a breach of the director’s duty of loyalty to the Company or its shareholders; (2) an act or omission not in good faith that constitutes a breach of duty of the director to the Company or any act or omission that involves intentional misconduct or a knowing violation of the law; (3) a transaction from which the director received an improper benefit, whether or not the benefit resulted from an action taken within the scope of the director’s office; or (4) an act or omission for which the liability of a director is expressly provided by an applicable statute.

•

The Certificate of Incorporation changed the registered agent and office of the Company. It is now Corporation Service Company, 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808. Under the Prior Certificate it was Capitol Corporate Services, Inc., 206 E. 9th Street, Suite 1300, Austin, Texas 78701.

With respect to the Bylaws, the material differences between the Bylaws and the Prior Bylaws are as follows:

•

The Bylaws provide that prior to the date of the first annual meeting of stockholders, no special meeting may be called by the board of directors or any person for the purposes of electing or removing any director or at which a proposal to elect or remove any director will be acted on unless such meeting is at the written request of the holders of at least 90% of the voting power of all outstanding securities of the Company generally entitled to vote at a meeting of stockholders (including the Convertible Notes), unless such election or removal is to occur in connection with a Deemed Liquidation Event (as defined in the Certificate of Incorporation) to be duly approved at such special meeting. The Bylaws further provide that any amendment to the foregoing provision must be approved by the affirmative vote of the holders of not less than 90% of the total voting power of all outstanding securities of the Company generally entitled to vote in the election of directors. The Prior Bylaws did not contain similar provisions.

•

Consistent with the Certificate of Incorporation, the Convertible Noteholders are entitled to vote upon all matters upon which holders of any class or classes of Common Stock have the right to vote. Each Convertible Noteholder is entitled to one vote for each share of Common Stock (rounded down to the nearest whole share) into which the Convertible Notes held by such Convertible Noteholder may be converted, in accordance with the Convertible Notes Indenture. Each holder of the Company’s Common Stock is entitled to one vote for each outstanding share of Common Stock of the Company held by such common stockholder.

•

The Bylaws provide that any director nominee (except the Chief Executive Officer of the Company) must satisfy the independence requirements of The Nasdaq Global Market, The Nasdaq Global Select Market and The New York Stock Exchange. The Prior Bylaws had no such requirement.

•

The Bylaws provide each Convertible Noteholder and each holder of Common Stock issued to each Convertible Noteholder upon the conversion of Convertible Notes, preemptive rights to purchase its pro rata portion of any capital stock, equity interest, or other instrument exercisable or exchangeable for or convertible into capital stock or equity interest of the Company or any of its subsidiaries proposed to be issued by the Company or any of its subsidiaries, subject to certain customary exceptions. The section of the Bylaws containing these preemptive rights shall terminate at such time as the Company has a class of equity securities listed on The Nasdaq Global Market, The Nasdaq Global Select Market or The New York Stock Exchange. The Bylaws further provide that any amendment to the section of the Bylaws containing the preemptive rights must be approved by the affirmative vote of not less than 66 2/3% of the total voting power of (i) the outstanding Convertible Notes and (ii) the Common Stock issued upon conversion of the Convertible Notes, with the Convertible Notes and such Common Stock voting together as a single class. The Prior Bylaws did not grant preemptive rights to holders of capital stock.

•

The Bylaws provide that the prior written consent of each holder (together with its affiliates and related funds) of at least 17.5% of the aggregate voting power of all voting securities of the Company outstanding as of the Effective Date (each such holder, a “Major Securityholder”), for so long as such Major Securityholder holds at least 17.5% of the aggregate voting power of all voting securities of the Company outstanding as of the Effective Date, is required prior to the Company or any subsidiary incurring any indebtedness other than (i) borrowings outstanding on the Effective Date, (ii) paid-in-kind interest on the Convertible Notes and the Senior Secured Notes, without increasing the aggregate amount of interest payable thereon, (iii) borrowings under the ABL Facility, and (iv) indebtedness incurred in the ordinary course of business (the “Major Securityholder Consent Provision”). The Bylaws further provide that any amendment to the Major Securityholder Consent Provision must be approved by the affirmative vote of the holders of not less than 66 2/3% of the total voting power of all outstanding securities of the Company generally entitled to vote in the election of directors (including each holder that is then, and has been since the Effective Date, a Major Securityholder). The Prior Bylaws did not contain similar provisions.

•

The Bylaws provide that as long as Ascribe III Investments LLC (“Ascribe”) (together with its affiliates and affiliated funds) holds or beneficially owns at least 12.5% of the aggregate voting power of all voting securities of the Company outstanding as of the Effective Date, the Company and its subsidiaries cannot issue any capital stock, equity interest, or other instrument exercisable or exchangeable for or convertible into capital stock or equity interest of the Corporation or any of its subsidiaries without Ascribe’s prior written consent, subject to certain exceptions (the “Ascribe Consent Provision”). The Bylaws further provide that, for so long as Ascribe (together with its affiliates and affiliated funds) holds or beneficially owns at least 10% of the aggregate voting power of all voting securities of the Company outstanding as of the Effective Date, any amendment to the Ascribe Consent Provision must be approved by the affirmative vote of Ascribe. The Prior Bylaws did not contain similar provisions.

•

Except for those transactions specifically set forth in the Bylaws, the Bylaws contain a provision stating that the Company shall not, and shall not permit any of its subsidiaries to, enter into, amend or renew an agreement, arrangement or transaction with (a) any affiliate of the Company (including any of the Company’s directors or officers or any entity in which any of the Company’s directors or officers has a financial interest) or (b) any owner of 5% or more of the Common Stock (including shares of Common Stock (rounded down to the nearest whole share) into which Convertible Notes may be converted), or an affiliate of such owner (each, a “Related Party”), unless such action is approved by either (i) a majority of the disinterested directors on the board of directors, or (ii) the holders of 60% of the Common Stock (including shares of Common Stock into which Convertible Notes may be converted), other than any Common Stock (including shares of Common Stock into which Convertible Notes may be converted) held by the Related Party. The Prior Bylaws did not contain a similar provision.

The foregoing description of the Certificate of Incorporation and the Bylaws does not purport to be complete and is

qualified in its entirety by reference to the full text of the Certificate of Incorporation and the Bylaws, which are attached hereto as Exhibits 3.1 and 3.2 and are incorporated by reference herein.

Item 7.01

Regulation FD Disclosure.

On the Effective Date, the Company issued a press release announcing its emergence from the Cases. A copy of the press release has been furnished as Exhibit 99.2 to, and incorporated by reference into, this Current Report.

The information contained in this Item 7.01 and Exhibit 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any of the Company’s filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and regardless of any general incorporation language in such filings, except to the extent expressly set forth by specific reference in such a filing. The filing of this Current Report on Form 8-K (including the exhibit hereto or any information included herein or therein) shall not be deemed an admission as to the materiality of any information herein that is required to be disclosed solely by reason of Regulation FD.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits:


3.1		Certificate of Incorporation of Pioneer Energy Services Corp.

3.2		Amended and Restated Bylaws of Pioneer Energy Services Corp.

4.1		Convertible Notes Indenture, dated May 29, 2020

4.2		Convertible Notes

4.3		Senior Secured Notes Indenture, dated May 29, 2020

4.4		Senior Secured Notes

10.1		ABL Credit Agreement, dated May 29, 2020

10.2		Intercreditor Agreement, dated May 29, 2020

10.3		Registration Rights Agreement, dated May 29, 2020

10.4		Equity Incentive Plan

10.5		Severance Plan

99.1		Notice of Effective Date

99.2		Press Release, dated June 1, 2020

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


		PIONEER ENERGY SERVICES CORP.

By:		/s/ Lorne E. Phillips
		Lorne E. Phillips
		Executive Vice President and Chief Financial Officer

Date: June 2, 2020

EXHIBIT INDEX


Exhibit Number		Exhibit Description
3.1		Certificate of Incorporation of Pioneer Energy Services Corp.

3.2		Amended and Restated Bylaws of Pioneer Energy Services Corp.

4.1		Convertible Notes Indenture, dated May 29, 2020

4.2		Convertible Notes

4.3		Senior Secured Notes Indenture, dated May 29, 2020

4.4		Senior Secured Notes

10.1		ABL Credit Agreement, dated May 29, 2020

10.2		Intercreditor Agreement, dated May 29, 2020

10.3		Registration Rights Agreement, dated May 29, 2020

10.4		Equity Incentive Plan

10.5		Severance Plan

99.1		Notice of Effective Date

99.2		Press Release, dated June 1, 2020

Exhibit 3.1

CERTIFICATE OF INCORPORATION

PIONEER ENERGY SERVICES CORP.

May 29, 2020

ARTICLE 1.

NAME

The name of the corporation is Pioneer Energy Services Corp. (the “Corporation”).

ARTICLE 2.

REGISTERED OFFICE AND AGENT

The address of the Corporation’s registered office in the State of Delaware is 251 Little Falls Drive, City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is Corporation Service Company.

ARTICLE 3.

PURPOSE AND POWERS

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“Delaware Law”).

ARTICLE 4.

CAPITAL STOCK

(A) Authorized Shares

The total number of shares of stock that the Corporation shall have authority to issue is 25,000,000 shares of Common Stock, par value $0.001 per share (the “Common Stock”), and 1,000,000 shares of Preferred Stock, par value $0.001 per share (the “Preferred Stock”). To the extent prohibited by Section l123(a)(6) of

Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”), the Corporation will not issue non-voting equity securities (which shall not be deemed to include any warrants or options to purchase capital stock of the Corporation); provided, however, that this provision (i) will have no further force or effect beyond that required under Section 1123 of the Bankruptcy Code, (ii) will have such force and effect, if any, only for so long as such section is in effect and applicable to the Corporation or any of its wholly-owned subsidiaries and (iii) in all events may be amended or eliminated in accordance with applicable law as from time to time in effect.

(B) Common Stock

(1) All shares of Common Stock shall be identical in all respects and shall entitle the holder thereof to the same rights and privileges, subject to the same qualifications, limitations and restrictions.

(2) Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, and subject to any other provisions of this Certificate of Incorporation, as it may be amended from time to time in accordance with the terms hereof, the holders of Common Stock shall be entitled to receive, on a pro rata basis, such dividends and other distributions in cash, stock or property of the Corporation when, as and if declared thereon by the Corporation’s Board of Directors (the “Board”) from time to time out of assets or funds of the Corporation legally available therefore.

(3) Subject to the rights of any holders of any shares of Preferred Stock which may from time to time come into existence and be outstanding, in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of Common Stock shall be entitled to receive the assets and funds of the Corporation available for distribution after payments to creditors and to the holders of any class or series of stock having preference over the Common Stock as to the distribution of assets upon liquidation, dissolution or winding up of the Corporation, ratably in proportion to the number of shares held by them.

(4) At every meeting of the stockholders of the Corporation in connection with the election of directors and all other matters submitted to a vote of stockholders, each holder of shares of Common Stock is entitled to one vote in person or by proxy for each share of Common Stock registered in the name of such holder on the transfer books of the Corporation. Notwithstanding the foregoing, except as otherwise required by applicable law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Certificate of Incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are entitled, either separately or together with the holders of one or more other such classes or series, to vote thereon pursuant to this Certificate of Incorporation or pursuant to Delaware Law. The holders of shares of Common Stock shall not have cumulative voting rights.

(C) Preferred Stock

(1) The Board is authorized, subject to limitations prescribed by law, to provide by resolution or resolutions for the issuance of a share or shares of Preferred Stock in one or more series and, by filing a certificate of designation with the Secretary of State pursuant to Delaware Law setting forth a copy of such resolution or resolutions (a “Certificate of Designations”), to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences, and rights of the shares of each such series and the qualifications, limitations, and restrictions thereof. Each series of the Preferred Stock shall be appropriately designated by a distinguishing letter or title, prior to the issue of any shares thereof. The authority of the Board with respect to the Preferred Stock and any series shall include, but not be limited to, determination of the following:

(i) the number of shares constituting any series and the distinctive designation of that series;

(ii) the dividend rate on the shares of any series, whether dividends shall be cumulative, the conditions and date or dates, and the relative rights of priority, if any, of payment of dividends on shares of that series;

(iii) the voting rights for the shares of any series, in addition to the voting rights provided by applicable law, and the number of votes per share and the terms and conditions of such voting rights;

(iv) whether any series shall have conversion privileges and, if so, the terms and conditions of conversion, including provision for adjustment of the conversion rate upon such events as the Board shall determine;

(v) whether the shares of any series shall be redeemable and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates;

(vi) whether any series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund;

(vii) the rights of the shares of any series in the event of voluntary or involuntary dissolution or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of that series; and

(viii) any other powers, preferences, rights, qualifications, limitations, and restrictions of any series.

(2) Notwithstanding the provisions of Section 242(b)(2) of Delaware Law, the number of authorized shares of Preferred Stock and Common Stock may, without a class or series vote, be increased or decreased (but not below the number of shares thereof then outstanding) from time to time by the affirmative vote of the holders of at least a majority of the voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class.

(D) 5.00% Convertible Senior Unsecured PIK Notes.

(1) In addition to the foregoing, so long as any obligations under the Corporation’s 5.00% Convertible Senior Unsecured PIK Notes due 2025 (the “Convertible Notes”), outstanding pursuant to that certain Indenture, dated as of May 29, 2020, by and between the Corporation, and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee (the “Convertible Notes Indenture”) remain outstanding and not discharged in full, the holders of the Convertible Notes shall have the right to vote, as provided herein pursuant to Section 221 of Delaware Law. The holders of the Convertible Notes shall be entitled to vote upon all matters upon which holders of any class or classes of Common Stock have the right to vote under Delaware Law or this Certificate of Incorporation and shall be deemed to be stockholders of the Company (and the Convertible Notes shall be deemed to be stock) for the purpose of any provision of Delaware Law that requires the vote of stockholders as a prerequisite to any corporate action. The number of votes represented by each Convertible Note shall be equal to the largest number of whole shares of Common Stock (rounded down to the nearest whole share) into which such Convertible Note may be converted, in accordance with the Convertible Notes Indenture, at the record date for the determination of the stockholders entitled to vote on such matters or, if no such record date is established, at the date such vote is taken. Except as provided in this Section D of Article 4 or as otherwise required by applicable law, the holders of the Convertible Notes shall have no right or power to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting.

(2) Holders of Convertible Notes shall have the same right of inspection of the books, accounts and other records of the Company which the holders of Common Stock have or may have under Delaware Law or this Certificate of Incorporation.

ARTICLE 5.

BYLAWS

Subject to any restriction set forth in the bylaws of the Corporation (the “Bylaws”), the Board shall have the power to adopt, amend or repeal the Bylaws.

Subject to the provisions of the Bylaws, the stockholders and holders of Convertible Notes may adopt, amend or repeal the Bylaws only with the affirmative vote of the holders of not less than 662/3% of the total voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class.

ARTICLE 6.

BOARD OF DIRECTORS

(A) Power of the Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board.

(B) Number of Directors. Subject to any restriction set forth in the Bylaws, the number of directors which shall constitute the Board shall, as of the date this Certificate of Incorporation becomes effective, be five and, thereafter, shall be fixed exclusively by one or more resolutions adopted from time to time as set forth in the Bylaws of the Corporation.

(C) Election of Directors.

(1) A Nominating and Governance committee of the Board shall nominate directors. Any director nominee (except the Chief Executive Officer of the Corporation in his capacity as a director) shall satisfy the independence requirements of The Nasdaq Global Market, The Nasdaq Global Select Market and The New York Stock Exchange. A majority of the Board shall select one director to serve as Chairperson of the Board; provided that such Chairperson shall not be an executive or employee of the Corporation.

(2) Each director shall serve for a term ending on the date of the first annual meeting of stockholders next following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal.

(3) The names and mailing addresses of the persons who are to serve initially as directors are:


Name		Mailing Address
Wm. Stacy Locke		1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209

Charlie Thompson		c/o Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209

David Coppe		c/o Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209

John Jacobi		c/o Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209

Matt Porter		c/o Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209

(4) There shall be no cumulative voting in the election of directors. Election of directors need not be by written ballot unless the Bylaws so provide.

(D) Vacancies. Except as may be provided in any Certificate of Designations for any series of Preferred Stock with respect to any directors elected (or to be elected) by the holders of such series, vacancies on the Board resulting from death, resignation, removal or otherwise and newly created directorships resulting from any increase in the number of directors shall, except as otherwise required by law, be filled solely by a majority of the directors then in office (although less than a quorum) or by the sole remaining director, until such seat is filled at the next election of directors.

(E) Removal. Except as may be provided in any Certificate of Designations for any series of Preferred Stock with respect to any directors elected (or to be elected) by the holders of such series and except as otherwise required by applicable law, any or all of the directors of the Corporation may be removed from office, with or without cause, only by the affirmative vote of the holders of at least a majority of the voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class.

(F) Action by Written Consent. Any action required or permitted to be taken at any meeting of the Board or any committee thereof may be taken by written consent executed by all of the directors then in office or all members of such committee, as applicable, in lieu of a meeting.

(G) Quorum. A quorum for any meeting of the Board shall require the presence in person of a majority of the total number of directors then in office. Each director shall be entitled to one vote on any matter in respect of which it is entitled to vote. The affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board.

(H) Section 203 Opt-Out. The Corporation expressly elects not to be governed by Section 203 of Delaware Law.

(I) Officers. Except as otherwise expressly delegated by resolution of the Board, the Board shall have the exclusive power and authority to appoint and remove officers of the Corporation.

ARTICLE 7.

MEETINGS OF STOCKHOLDERS

(A) Annual Meetings. An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting shall be held at such place, on such date, and at such time as the Board shall determine, subject to the provisions of the Bylaws.

(B) Special Meetings. Subject to the provisions of the Bylaws, special meetings of stockholders of the Corporation may be called by the Chairperson of the Board, the Chief Executive Officer or a majority of the Board. Subject to the provisions of the Bylaws governing special meetings, holders of not less than 50% of the voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes) entitled to vote at the proposed special meeting may also call a special meeting of stockholders of the Corporation by furnishing the Corporation a written request which states the purpose or purposes of the proposed meeting in the manner set forth in the Bylaws.

(C) No Action by Written Consent. Subject to the rights of the holders of any class or series of Preferred Stock then outstanding, as may be set forth in the certificate of designations for such class or series of Preferred Stock, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of stockholders at an annual or special meeting duly noticed and called in accordance with Delaware Law, as amended from time to time, and this Article 7 and may not be taken by written consent of stockholders without a meeting.

(D) Approval of the Stockholders. Approval by the holders of at least 60% of the total voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes) is required to be obtained prior to the consummation of any Deemed Liquidation Event. “Deemed Liquidation Event” shall mean any acquisition of beneficial ownership of more than 50% of the total voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class, any sales or dispositions of all or substantially all of the assets of the Corporation on a consolidated basis, or any merger, consolidation, recapitalization or similar transaction where the Common Stock is converted into, or exchanged for, any other consideration.

ARTICLE 8.

INDEMNIFICATION

(A) Limited Liability. A director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by Delaware Law.

(B) Right to Indemnification.

(1) Each person (and the heirs, executors or administrators of such person) who was or is a party or is threatened to be made a party to, or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that such person is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise (each, a “Covered Person”), shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware Law. Notwithstanding the preceding sentence, except in connection with a suit to enforce the provisions of this Article 8, a Covered Person shall be entitled to indemnification under this Article 8 in connection with a Proceeding (or part thereof) commenced by such Covered Person only if the commencement of such Proceeding (or part thereof) by the Covered Person was authorized by the Board. The right to indemnification conferred in this Article 8 shall also include the right to be paid by the Corporation the expenses incurred in connection with any such proceeding in advance of its final disposition to the fullest extent permitted by Delaware Law. The right to indemnification conferred in this Article 8 shall be a contract right. To the fullest extent not prohibited by Delaware Law, the Corporation shall pay the expenses (including

attorneys’ fees) incurred by a Covered Person in defending any Proceeding in advance of its final disposition; provided, however, that, to the extent required by Delaware Law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by such Covered Person to repay all amounts advanced if it should be ultimately determined that such Person is not entitled to be indemnified under this Article 8 or otherwise.

(2) Without limiting anything set forth in the foregoing clause (1), the Corporation may, by action of its Board, provide indemnification to such of the directors, officers, employees and agents of the Corporation to such extent and to such effect as the Board shall determine to be appropriate and authorized by Delaware Law.

(C) Insurance. The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss incurred by such person in any such capacity or arising out of such person’s status as such, whether or not the Corporation would have the power to indemnify such person against such liability under Delaware Law.

(D) Nonexclusivity of Rights. The rights and authority conferred in this Article 8 shall not be exclusive of any other right that any person may otherwise have or hereafter acquire.

(E) Preservation of Rights. Neither the amendment nor repeal of this Article 8, nor the adoption of any provision of this Certificate of Incorporation or the Bylaws, nor, to the fullest extent permitted by Delaware Law, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed). If Delaware Law is hereafter amended to permit further elimination or limitation of the personal liability of directors, then the liability of a Director shall be eliminated or limited to the fullest extent permitted by Delaware Law as so amended.

ARTICLE 9.

AMENDMENTS

The Corporation reserves the right to amend this Certificate of Incorporation in any manner permitted by Delaware Law and all rights and powers conferred upon stockholders, directors and officers herein are granted subject to this reservation. Notwithstanding the foregoing, none of the provisions set forth in

this Certificate of Incorporation may be repealed or amended in any respect, and no other provision may be adopted, amended or repealed which would have the effect of modifying or permitting the circumvention of any provision set forth in this Certificate of Incorporation, unless such action is approved by the affirmative vote of the holders of not less than 66 ^2/3% of the total voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), voting together as a single class.

ARTICLE 10.

INCORPORATOR

The name and mailing address of the incorporator is Bryce Seki, c/o Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209.

IN WITNESS WHEREOF, Pioneer Energy Services Corp. has caused this Certificate of Incorporation to be executed by an incorporator this 29th day of May, 2020.


PIONEER ENERGY SERVICES CORP.

By:		/s/ Bryce Seki
Name: Bryce Seki
Title: Incorporator

Exhibit 3.2

AMENDED AND RESTATED BYLAWS

PIONEER ENERGY SERVICES CORP.

^{* * * * *}

ARTICLE 1

OFFICES

Section 1.01. Registered Office. The registered office of the Corporation shall be in the City of Wilmington, County of New Castle, State of Delaware.

Section 1.02. Other Offices. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

Section 1.03. Books. The books of the Corporation may be kept within or without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE 2

MEETINGS OF STOCKHOLDERS

Section 2.01. Time and Place of Meetings. All meetings of stockholders shall be held at such place, either within or without the State of Delaware, on such date and at such time as may be determined from time to time by the Board of Directors (or the chairperson of the Board of Directors in the absence of a designation by the Board of Directors).

Section 2.02. Annual Meetings. (a) An annual meeting of stockholders shall be held for the election of directors and to transact such other business as may properly be brought before the meeting at such date and time as may be designated by the Board of Directors.

(b) The initial annual meeting of stockholders shall be held on such date and time as may be designated by the Board of Directors provided that such date is no earlier than May 29, 2021.

Section 2.03. Special Meetings. (a) Special meetings of stockholders may be called by a majority of the Board of Directors or the chairperson of the Board of Directors, the Chief Executive Officer or the President of the Corporation.

(b) Special meetings of stockholders shall be called by the President or the Secretary of the Corporation on the written request of the holders of at least that percentage of the voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes) that the Certificate of Incorporation specifies as the minimum percentage necessary to call a special meeting of stockholders. Such request shall state the purpose or purposes of that meeting and the matters proposed to be acted on at that meeting. Upon receipt of such request, the Board of Directors shall set a date for the special meeting, set a record date in accordance with Section 6.01, and shall cause an appropriate officer of the Corporation to give the notice required under Section 2.04. This Section 2.03 shall be subject to the rights, if any, of holders of any class or series of capital stock of the Corporation and Convertible Notes (defined below) to call special meetings.

(c) Notwithstanding anything to the contrary herein, prior to the date of the first annual meeting of stockholders, no special meeting may be called under this Section 2.03 by the Board of Directors or any person for the purposes of electing or removing any director or at which a proposal to elect or remove any director will be acted on unless such meeting is at the written request of the holders of at least 90% of the voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes), unless such election or removal is to occur in connection with a Deemed Liquidation Event (as defined in the Certificate of Incorporation) to be duly approved at such special meeting.

Section 2.04. Notice of Meetings and Adjourned Meetings; Waivers of Notice. (a) Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given to the stockholders and holders of the Corporation’s 5.00% Convertible Senior Unsecured PIK Notes due 2025 (the “Convertible Notes”, and holders of the Convertible Notes, “Convertible Noteholders”) which shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders, Convertible Noteholders, and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by the General Corporation Law of the State of Delaware as the same exists or may hereafter be amended (“Delaware Law”), such notice shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder and each Convertible Noteholder of record entitled to vote at such meeting. The Board of Directors or the chairperson of the meeting may adjourn the meeting to another time or place (whether or not a quorum is present), and notice need not be given of the adjourned meeting if the time, place, if any, and the means of remote

communications, if any, by which stockholders, Convertible Noteholders, and proxy holders may be deemed to be present in person and vote at such meeting, are announced at the meeting at which such adjournment is made. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder and each Convertible noteholder of record entitled to vote at the meeting.

(b) A written waiver of any such notice signed by the person entitled thereto, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice.

Section 2.05. Quorum. Unless otherwise provided under the Certificate of Incorporation or these Bylaws and subject to Delaware Law, the presence, in person or by proxy, of the holders of a majority of the total voting power of all outstanding securities of the Corporation generally entitled to vote at a meeting of stockholders (including the Convertible Notes) shall constitute a quorum for the transaction of business. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the chairperson of the meeting or a majority in voting interest of the stockholders and Convertible Noteholders present in person or represented by proxy may adjourn the meeting, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted that might have been transacted at the meeting as originally notified.

Section 2.06. Voting. (a) In accordance with Article 4 of the Certificate of Incorporation, the Convertible Noteholders shall be entitled to vote upon all matters upon which holders of any class or classes of Common Stock have the right to vote. Unless otherwise provided in the Certificate of Incorporation and subject to Delaware Law, (i) each holder of the Corporation’s common stock, par value $0.001 per share (the “Common Stock”, and together with the Convertible Notes, the “Voting Securities”; and such holder, a “Common Stockholder”, and together with the Convertible Noteholders, the “Securityholders”) shall be entitled to one vote for each outstanding share of Common Stock of the Corporation held by such Common Stockholder, and (ii) each Convertible Noteholder shall be entitled to one vote for each share of Common Stock (rounded down to the nearest whole share) into which the Convertible Notes held by such Convertible Noteholder may be converted, in accordance with that certain Indenture, dated as of May 29, 2020, by and between the Corporation, and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee (the “Convertible Notes Indenture”). Any share of capital stock of the Corporation or Convertible Notes held by the Corporation shall have no voting rights.

(b) Except as otherwise required by law, the Certificate of Incorporation or these Bylaws, in all matters other than the election of directors, the affirmative vote of the holders of a majority of the votes cast at the meeting on the subject matter shall be the act of the Securityholders. Abstentions and broker non-votes shall not be counted as votes cast.

(c) Each Securityholder entitled to vote at a meeting of stockholders or to express consent or dissent to a corporate action in writing without a meeting may authorize another person or persons to act for such Securityholder by proxy, appointed by an instrument in writing, subscribed by such Securityholder or by his attorney thereunto authorized, or by proxy sent by cable, telegram or by any means of electronic communication permitted by law, which results in a writing from such Securityholder or by his attorney, and delivered to the secretary of the meeting. No proxy shall be voted after three (3) years from its date, unless said proxy provides for a longer period.

Section 2.07. Action by Consent. Subject to the rights of the holders of any class or series of preferred stock then outstanding, as may be set forth in the certificate of designations for such class or series of preferred stock, any action required or permitted to be taken at any annual or special meeting of stockholders may be taken only upon the vote of Securityholders at an annual or special meeting duly noticed and called in accordance with Delaware Law and may not be taken by written consent of Securityholders without a meeting.

Section 2.08. Organization. At each meeting of stockholders, the chairperson of the Board of Directors, if one shall have been elected, or in the chairperson’s absence or if one shall not have been elected, the director designated by the vote of the majority of the directors present at such meeting, shall act as chairperson of the meeting; provided that the Chief Executive Officer of the Corporation shall not be the chairperson. The Secretary (or in the Secretary’s absence or inability to act, the person whom the chairperson of the meeting shall appoint secretary of the meeting) shall act as secretary of the meeting and keep the minutes thereof.

Section 2.09. Order of Business. The order of business at all meetings of stockholders shall be as determined by the chairperson of the meeting.

Section 2.10. Nomination of Directors and Proposal of Other Business.

(a) Annual Meetings of Stockholders. (i) Nominations of persons for election to the Board of Directors or the proposal of other business to be transacted by the Securityholders at an annual meeting of stockholders may be made only (A) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (B) by

or at the direction of the Board of Directors or any committee thereof, (C) as may be provided in the certificate of designations for any class or series of preferred stock or (D) by any Securityholder of the Corporation who is a Securityholder of record at the time of giving of notice provided for in paragraph (ii) of this Section 2.10(a) and at the time of the annual meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in this Section 2.10(a), and, except as otherwise required by law, any failure to comply with these procedures shall result in the nullification of such nomination or proposal.

(ii) For nominations or other business to be properly brought before an annual meeting of stockholders by a Securityholder pursuant to clause (D) of paragraph (i) of this Section 2.10(a), the Securityholder must have given timely notice thereof in writing to the Secretary of the Corporation and any such proposed business (other than the nominations of persons for election to the Board of Directors) must constitute a proper matter for stockholder action. To be timely, a Securityholder’s notice shall be delivered to, or mailed and received by, the Secretary of the Corporation at the principal executive offices of the Corporation not less than 120 days nor more than 150 days prior to the first anniversary of the preceding year’s annual meeting of stockholders; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to such anniversary date or delayed more than 70 days after such anniversary date then to be timely such notice must be received by the Corporation no earlier than 120 days prior to such annual meeting and no later than the later of 70 days prior to the date of the meeting or the 10^th day following the day on which public announcement of the date of the meeting was first made by the Corporation. In no event shall the adjournment or postponement of any meeting, or any announcement thereof, commence a new time period (or extend any time period) for the giving of a Securityholder’s notice as described above.

(iii) A Securityholder’s notice to the Secretary shall set forth (A) as to each person whom the Securityholder proposes to nominate for election or reelection as a director, a reasonably detailed description of any compensatory, payment or other financial agreement, arrangement or understanding that such person has with any other person or entity other than the Corporation including the amount of any payment or payments received or receivable thereunder, in each case in connection with candidacy or service as a director of the Corporation (a “Third-Party Compensation Arrangement”), (B) as to any other business that the Securityholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend these Bylaws, the text of the proposed amendment), the reasons for conducting such business and any material interest in such business of such

Securityholder and the beneficial owner, if any, on whose behalf the proposal is made and (C) as to the Securityholder giving the notice and the beneficial owner, if any, on whose behalf the proposal is made:

(1) the name and address of such Securityholder (as they appear on the Corporation’s books) and any such beneficial owner;

(2) (i) for each class or series, the number of shares of capital stock of the Corporation and Convertible Notes that are held of record or are beneficially owned by such Common Stockholder and by any such beneficial owner and (ii) for the Convertible Notes, the number of shares of Common Stock (rounded down to the nearest whole share) into which the Convertible Notes held of record or beneficially by such Convertible Noteholder and any such beneficial owner may be converted in accordance with the Convertible Notes Indenture;

(3) a description of any agreement, arrangement or understanding between or among such Securityholder and any such beneficial owner, any of their respective Affiliates or associates, and any other person or persons (including their names) in connection with the proposal of such nomination or other business;

(4) a description of any agreement, arrangement or understanding (including, regardless of the form of settlement, any derivative, long or short positions, profit interests, forwards, futures, swaps, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to create or mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, such Securityholder or any such beneficial owner or any such nominee with respect to the Corporation’s securities;

(5) a representation that the Securityholder is a holder of record of stock of the Corporation or a Convertible Noteholder entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to bring such nomination or other business before the meeting;

(6) a representation as to whether such Securityholder or any such beneficial owner intends or is part of a group that intends to (i) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock or Convertible Notes required to approve or adopt the proposal or to elect each such nominee and/or (ii) otherwise to solicit proxies from Securityholders in support of such proposal or nomination; and

(7) such other information relating to any proposed item of business as the Corporation may reasonably require to determine whether such proposed item of business is a proper matter for stockholder action.

If requested by the Corporation, the information required under clauses 2.10(a)(iii)(C)(2), (3) and (4) of the preceding sentence of this Section 2.10 shall be supplemented by such Securityholder and any such beneficial owner not later than 10 days after the record date for the meeting to disclose such information as of the record date.

(b) Special Meetings of Stockholders. If the election of directors is included as business to be brought before a special meeting in the Corporation’s notice of meeting, then nominations of persons for election to the Board of Directors at a special meeting of stockholders may be made by any Securityholder who is a stockholder or Convertible Noteholder of record at the time of giving of notice provided for in this Section 2.10(b) and at the time of the special meeting, who shall be entitled to vote at the meeting and who complies with the procedures set forth in this Section 2.10(b). For nominations to be properly brought by a Securityholder before a special meeting of stockholders pursuant to this Section 2.10(b), the Securityholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a Securityholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Corporation (A) not earlier than 150 days prior to the date of the special meeting nor (B) later than the later of 120 days prior to the date of the special meeting or the 10^th day following the day on which public announcement of the date of the special meeting was first made. A Securityholder’s notice to the Secretary shall comply with the notice requirements of Section 2.10(a)(iii).

(c) General. (i) To be eligible to be a nominee for election as a director, the proposed nominee must provide to the Secretary of the Corporation in accordance with the applicable time periods prescribed for delivery of notice under Section 2.10(a)(ii) or Section 2.10(b): (1) a completed D&O questionnaire (in the form provided by the secretary of the Corporation at the request of the nominating Securityholder) containing information regarding the nominee’s background and qualifications and such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation or to serve as an independent director of the Corporation, (2) a written representation that, unless previously disclosed to the Corporation, the nominee is not and will not become a party to any voting agreement, arrangement or understanding with any person or entity as to how such nominee, if elected as a director, will vote on any issue or that could interfere with such person’s ability to comply, if elected as a director, with his/her fiduciary duties under applicable law, (3) a written representation and agreement that, unless

previously disclosed to the Corporation pursuant to Section 2.10(a)(iii)(A), the nominee is not and will not become a party to any Third-Party Compensation Arrangement and (4) a written representation that, if elected as a director, such nominee would be in compliance and will continue to comply with the Corporation’s corporate governance guidelines as disclosed on the Corporation’s website, as amended from time to time. At the request of the Board of Directors, any person nominated by the Board of Directors for election as a director shall furnish to the Secretary of the Corporation the information that is required to be set forth in a Securityholder’s notice of nomination that pertains to the nominee.

(ii) No person shall be eligible to be nominated by a Securityholder to serve as a director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.10. No business proposed by a Securityholder shall be conducted at a stockholder meeting except in accordance with this Section 2.10.

(iii) The chairperson of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by these Bylaws or that business was not properly brought before the meeting, and if he/she should so determine, he/she shall so declare to the meeting and the defective nomination shall be disregarded or such business shall not be transacted, as the case may be. Notwithstanding the foregoing provisions of this Section 2.10, unless otherwise required by law, if the Securityholder (or a qualified representative of the Securityholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or other proposed business, such nomination shall be disregarded or such proposed business shall not be transacted, as the case may be, notwithstanding that proxies in respect of such vote may have been received by the Corporation and counted for purposes of determining a quorum. For purposes of this Section 2.10, to be considered a qualified representative of the Securityholder , a person must be a duly authorized officer, manager or partner of such Securityholder or must be authorized by a writing executed by such Securityholder or an electronic transmission delivered by such Securityholder to act for such Securityholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

ARTICLE 3

DIRECTORS

Section 3.01. General Powers. Except as otherwise provided in Delaware Law or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

Section 3.02. Number, Election and Term of Office. (a) The Board of Directors shall consist of five (5) directors and thereafter, the exact number of directors shall be determined from time to time solely by resolution adopted by the affirmative vote of a majority of the Board. Except as otherwise provided in the Certificate of Incorporation, each director shall serve for a term ending on the date of the first annual meeting of stockholders next following the annual meeting at which such director was elected. Notwithstanding the foregoing, each director shall hold office until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal. A Nominating and Governance committee of the Board of Directors shall nominate directors. Any director nominee (except the Chief Executive Officer of the Corporation) shall satisfy the independence requirements of The Nasdaq Global Market, The Nasdaq Global Select Market and The New York Stock Exchange.

(b) Directors shall be elected at a duly called meeting of the stockholders at which a quorum is present. In any uncontested election of directors, a nominee shall be elected as a director at such a meeting if the votes of shares of capital stock of the Corporation and Convertible Notes present in person or represented by proxy at the meeting and entitled to vote in the election of directors cast “for” such nominee’s election exceed the votes of capital stock of the Corporation and Convertible Notes present in person or represented by proxy at the meeting and entitled to vote in the election of directors cast “against” such nominee’s election (with “abstentions” and “broker non-votes” not counted as votes cast either “for” or “against” that nominee’s election). In a contested election, directors shall be elected by plurality vote of all votes cast at such a meeting. An election is considered contested if the Board determines that (a) there are more nominees for election than positions on the Board to be filled or (b) one or more nominees for election to the Board was nominated other than by or at the direction of the Board.

(c) This Section 3.02 shall be subject, in all respects, to the rights, if any, of the holders of Preferred Stock, in each case as specified in more detail in the applicable Certificate of Designations.

Section 3.03. Quorum and Manner of Acting. Unless the Certificate of Incorporation or these Bylaws require a greater number, a majority of the Board of Directors shall constitute a quorum for the transaction of business at any meeting of the Board of Directors and, except as otherwise expressly required by law or by the Certificate of Incorporation, the affirmative vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors. When a meeting is adjourned to another time or place (whether or not a quorum is present), notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Board of Directors may transact any business which might have been transacted at the original meeting. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat shall adjourn the meeting, from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

Section 3.04. Time and Place of Meetings. The Board of Directors shall hold its meetings at such place, either within or without the State of Delaware, and at such time as may be determined from time to time by the Board of Directors (or the chairperson of the Board of Directors in the absence of a determination by the Board of Directors).

Section 3.05. Annual Meeting. The Board of Directors shall meet for the purpose of organization, the election of officers and the transaction of other business, as soon as practicable after each annual meeting of stockholders, on the same day and at the same place where such annual meeting shall be held. Notice of such meeting need not be given. In the event such annual meeting is not so held, the annual meeting of the Board of Directors may be held at such place either within or without the State of Delaware, on such date and at such time as shall be specified in a notice thereof given as hereinafter provided in Section 3.07 herein or in a waiver of notice thereof signed by any director who chooses to waive the requirement of notice.

Section 3.06. Regular Meetings. After the place and time of regular meetings of the Board of Directors shall have been determined and notice thereof shall have been once given to each member of the Board of Directors, regular meetings may be held without further notice being given.

Section 3.07. Special Meetings. Special meetings of the Board of Directors may be called by the chairperson of the Board of Directors or the President and shall be called by the chairperson of the Board of Directors, President or the Secretary, on the written request of any director. Notice of special meetings of the Board of Directors shall be given to each director at least one calendar day before the date of the meeting in such manner as is determined by the Board of Directors.

Section 3.08. Committees. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the

Securityholders, any action or matter (other than the election or removal of directors) expressly required by Delaware Law to be submitted to the Securityholders for approval or (b) adopting, amending or repealing any Bylaw of the Corporation. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

Section 3.09. Action by Consent. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions, are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Section 3.10. Telephonic Meetings. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or such committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

Section 3.11. Resignation. Any director may resign from the Board of Directors at any time by giving notice to the Board of Directors or to the Secretary of the Corporation. Any such notice must be in writing or by electronic transmission to the Board of Directors or to the Secretary of the Corporation. The resignation of any director shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 3.12. Vacancies. Unless otherwise provided in the Certificate of Incorporation, when one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have the power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in the filling of the other vacancies.

Section 3.13. Compensation. Unless otherwise restricted by the Certificate of Incorporation or these Bylaws, the Board of Directors shall have authority to fix the compensation of directors, including fees and reimbursement of expenses.

ARTICLE 4

OFFICERS

Section 4.01. Principal Officers. The principal officers of the Corporation shall be a Chief Executive Officer, a President, one or more Vice Presidents, a Treasurer and a Secretary who shall have the duty, among other things, to record the proceedings of the meetings of stockholders and directors in a book kept for that purpose. The Corporation may also have such other principal officers, including one or more Controllers, as the Board of Directors may in its discretion appoint. One person may hold the offices and perform the duties of any two or more of said offices, except that no one person shall hold the offices and perform the duties of President and Secretary.

Section 4.02. Appointment, Term of Office and Remuneration. The principal officers of the Corporation shall be appointed by the Board of Directors in the manner determined by the Board of Directors. Each such officer shall hold office until his or her successor is appointed, or until his or her earlier death, resignation or removal. The remuneration of all officers of the Corporation shall be fixed by the Board of Directors. Any vacancy in any office shall be filled in such manner as the Board of Directors shall determine.

Section 4.03. Subordinate Officers. In addition to the principal officers enumerated in Section 4.01 herein, the Corporation may have one or more Assistant Treasurers, Assistant Secretaries and Assistant Controllers and such other subordinate officers, agents and employees as the Board of Directors may deem necessary, each of whom shall hold office for such period as the Board of Directors may from time to time determine. The Board of Directors may delegate to any principal officer the power to appoint and to remove any such subordinate officers, agents or employees.

Section 4.04. Removal. Except as otherwise permitted with respect to subordinate officers, any officer may be removed, with or without cause, at any time, by resolution adopted by the Board of Directors.

Section 4.05. Resignations. Any officer may resign at any time by giving notice to the Board of Directors (or to a principal officer if the Board of Directors has delegated to such principal officer the power to appoint and to remove such officer). Any such notice must be in writing or by electronic transmission. The resignation of any officer shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

Section 4.06. Powers and Duties. The officers of the Corporation shall have such powers and perform such duties incident to each of their respective offices and such other duties as may from time to time be conferred upon or assigned to them by the Board of Directors.

ARTICLE 5

CAPITAL STOCK

Section 5.01. Certificates For Stock; Uncertificated Shares. The shares of the Corporation shall be uncertificated, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be represented by certificates. Except as otherwise required by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of shares represented by certificates of the same class and series shall be identical. Any holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of, the Corporation by any two authorized officers of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The Corporation shall not have power to issue a certificate in bearer form.

Section 5.02. Transfer Of Shares. Subject to the limitations set forth in the Certificate of Incorporation, shares of the stock of the Corporation may be transferred, without the consent of the Corporation and subject to compliance with applicable securities laws, on the record of stockholders of the Corporation by the holder thereof or by such holder’s duly authorized attorney upon surrender of a certificate therefor properly endorsed or upon receipt of proper transfer instructions from the registered holder of uncertificated shares or by such holder’s duly authorized attorney and upon compliance with appropriate procedures for transferring shares in uncertificated form, unless waived by the Corporation.

Section 5.03. Authority for Additional Rules Regarding Transfer. The Board of Directors shall have the power and authority to make all such rules and regulations as they may deem expedient concerning the issue, transfer and registration of certificated or uncertificated shares of the stock of the Corporation, as well as for the issuance of new certificates in lieu of those which may be lost or destroyed, and may require of any stockholder requesting replacement of lost or destroyed certificates, bond in such amount and in such form as they may deem expedient to indemnify the Corporation, and/or the transfer agents, and/or the registrars of its stock against any claims arising in connection therewith.

Section 5.04. Preemptive Rights.

(a) Subject to the terms and conditions of this Section 5.04 and applicable law, if the Corporation or any of its subsidiaries proposes to offer, sell or issue any capital stock, equity interest, or other instrument exercisable or exchangeable for or convertible into capital stock or equity interest of the Corporation or any of its subsidiaries (collectively, “Company Securities”) except for any Excluded

Issuance (as defined below) (collectively, the “Preemptive Shares”), then the Corporation shall give each Convertible Noteholder and each holder of Common Stock issued to the Common Stockholder upon the conversion of Convertible Notes formerly held by the Common Stockholder (each, a “Preemptive Rights Holder”) written notice of such proposed issuance at least fifteen (15) business days prior to the proposed issuance date (an “Issuance Notice”). The Issuance Notice shall specify the number and class of Preemptive Shares and the price (or a good faith range of the price if the final price is not then determinable) at which such Preemptive Shares are proposed to be issued and the other material terms and conditions of such Preemptive Shares and of the issuance, including the proposed issuance date. Each Preemptive Rights Holder shall be entitled to purchase, at the price and on the other terms and conditions specified in the Issuance Notice, up to a number of Preemptive Shares equal to its pro rata portion which shall be calculated as (x) the number of Preemptive Shares proposed to be issued by the Corporation multiplied by (y) the Ownership Percentage of such Preemptive Rights Holder of Common Stock as of immediately prior to the proposed issuance; provided that if a range is provided in the Issuance Notice then each Preemptive Rights Holder shall be entitled to condition such participation upon the final price being within such specified price range. A Preemptive Rights Holder may, in its sole discretion, allocate its right to purchase its portion of the Preemptive Shares among its Affiliates and Related Funds, including any funds managed by such Preemptive Rights Holder or its Affiliates.

(b) A Preemptive Rights Holder may exercise its right to purchase its pro rata portion of the Preemptive Shares by delivering written notice of its election to purchase such Preemptive Shares to the Corporation within five (5) Business Days after receipt of the Issuance Notice (such Preemptive Rights Holder, an “Exercising Holder”). A delivery of such notice by such Exercising Holder shall constitute a binding agreement of such Exercising Holder to purchase, at the price and on the terms and conditions specified in the Issuance Notice, the number of Preemptive Shares specified in such notice. If, at the end of such five (5) Business Day period, any Preemptive Rights Holder has not exercised its right to purchase any of its pro rata portion of such Preemptive Shares by delivering such notice, such Preemptive Rights Holder shall be deemed to have waived all of its rights under this Section 5.04 with respect to the purchase of such Preemptive Shares specified in the applicable Issuance Notice.

(c) Subject to compliance with this Section 5.04, the Corporation shall have ninety (90) days after the date of the Issuance Notice to consummate the proposed issuance of any or all of such Preemptive Shares that the Exercising Holders have elected not to purchase at the same (or higher) price and upon such other terms and conditions that, taken as a whole, are not materially less favorable to the Corporation than those specified in the Issuance Notice; provided that, if such issuance is subject to regulatory approval, such 90-day period shall be extended until the expiration of five (5) Business Days after all such approvals have been received, but in no event to later than 180 days after the date of the Issuance Notice.

If the Board of Directors proposes to issue any Preemptive Shares after such 90-day period (or 180-day period, if applicable) or during such 90-day period (or 180-day period, if applicable) at a lower price or on such other terms that are, taken as a whole, materially less favorable to the Corporation, it shall again comply with the procedures set forth in this Section 5.04.

(d) The closing of any issuance of Preemptive Shares to the Exercising Holders pursuant to this Section 5.04 shall take place at the time and in the manner provided in the Issuance Notice. The Corporation shall be under no obligation to consummate any proposed issuance of Preemptive Shares.

(e) The preemptive rights under this Section 5.04 shall not apply to (each of the following, an “Excluded Issuance”):

(1) issuances or sales of any Company Securities to employees, officers, directors, managers or consultants of the Corporation pursuant to employee benefits or similar employee or management equity incentive plans or arrangements, including offer letters, employment agreements, consulting agreements, or appointment letters;

(2) issuances or sales in, or in connection with, a bona fide joint venture, merger, acquisition, business combination or debt financing or reorganization of the Corporation with or into another Person or a bona fide acquisition by the Corporation of another Person (whether pursuant to a stock purchase, asset purchase, merger or otherwise) or substantially all the assets of another Person or a strategic partnership or other similar relationship, in each case approved by the Board of Directors;

(3) issuances by the Corporation or a direct or indirect wholly-owned subsidiary of the Corporation to another direct or indirect wholly-owned subsidiary of the Corporation;

(4) issuances as a dividend or upon any stock split, reclassification, recapitalization, exchange or readjustment of Company Securities, or other similar transaction (in each case, on a pro rata basis);

(5) issuances upon the conversion of Convertible Notes or the conversion or exercise of any Company Securities that were issued in compliance with the terms and conditions of this Section 5.04;

(6) issuances in connection with a bona fide shareholder rights plan duly adopted and approved by the Board of Directors;

(7) any increase in the amount of Company Securities issuable upon the conversion of Convertible Notes due to any increase to the capitalized principal amount of the Convertible Notes in accordance with their terms;

(8) issuances in connection with a bona fide firm commitment underwritten public offering with gross proceeds in excess of $75 million;

(9) issuances to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to equipment leasing or personal property leasing transaction approved by the Board of Directors; and

(10) issuances as consideration approved by the Board of Directors payable to a third party that is not an Affiliate of any Securityholder for any other business relationship the primary purpose of which is not to raise capital, including for the acquisition or license of technology by the Company or its subsidiaries, joint venture or development activities or the distribution, supply or manufacture of the Company’s or its subsidiaries’ products and services.

(f) As used in these Bylaws:

(1) “Ownership Percentage” means, with respect to any Securityholder at any time, a fraction, (x) the numerator of which is the sum of (i) the total number of outstanding shares of Common Stock beneficially owned by such Securityholder, including any Common Stock issued (directly or indirectly) to the Securityholder upon the conversion of Convertible Notes beneficially owned by the Securityholder, if any, plus (ii) the number of shares of Common Stock (rounded down to the nearest whole share) into which Convertible Notes beneficially owned by such Securityholder at such time, if any, may be converted and (y) the denominator of which is the total number of outstanding shares of Common Stock assuming the conversion in full of all outstanding Convertible Notes.

(2) “Affiliate” means, when used with reference to any Person, any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person and, in respect of any Securityholder, any investment fund, vehicle or holding company of which such Securityholder or any Affiliate of such Securityholder serves as the general partner, managing member or discretionary manager or advisor; provided that limited partners, non-managing members or other similar direct or indirect investors in a Securityholder (in their capacities as such) shall not be deemed to be Affiliates of such Securityholder.

(3) “Related Fund” means, with respect to any Person, any fund, account or investment vehicle that is controlled, managed, sub-managed, advised or sub-advised by (i) such Person, (ii) an Affiliate of such Person or (iii) the same investment manager, sub-investment manager, advisor or sub-advisor as such Person or an Affiliate of such investment manager, sub-investment manager, advisor or sub-advisor.

(4) “Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

(g) This Section 5.04 shall terminate at such time as the Corporation has a class of equity securities listed on The Nasdaq Global Market, The Nasdaq Global Select Market or The New York Stock Exchange.

(h) Notwithstanding any provision hereof to the contrary, the Corporation or its subsidiaries may issue or sell Company Securities without first complying with the provisions of this Section 5.04 if the Board of Directors determines in good faith that it is in the best interests of the Corporation to consummate such issuance or sale without having first complied with such provision; provided, that in connection with such issuance or sale, the Corporation gives written notice to each Preemptive Rights Holder within thirty (30) days after the issuance of such Company Securities that contains substantially the same information that would have been included in an Issuance Notice, mutatis mutandis. Each Preemptive Rights Holder shall have ten (10) Business Days from the date such written notice is delivered to elect to purchase up to that number of Company Securities that would, if purchased by such Preemptive Rights Holder, maintain such Preemptive Rights Holder’s Ownership Percentage in the Corporation, before giving effect to the issuance of such Company Securities. The closing of such sale to the Preemptive Rights Holders shall occur within sixty (60) days of the date written notice is given to the Preemptive Rights Holder. The other provisions of this Section 5.04 shall apply to such issuance, mutatis mutandis.

Section 5.05. Actions Requiring Consent of Certain Securityholders.

(a) Without the prior written consent of each Securityholder (together with its Affiliates and Related Funds) holding at least 17.5% of the aggregate voting power of all Voting Securities outstanding as of May 29, 2020 (the “Emergence Date”, and each such Securityholder, a “Major Securityholder”), for so long as such Major Securityholder holds at least 17.5% of the aggregate voting power of all Voting Securities outstanding as of the Emergence Date, the Corporation shall not, and shall not permit any of its subsidiaries to, incur any indebtedness, other than (1) borrowings outstanding on the Emergence Date, (2) paid-in-kind interest accrued in respect of (A) the Convertible Notes and (B) the Senior Secured Floating Rate Notes of the Corporation due 2025 issued pursuant to an Indenture (the “Senior Secured Notes Indenture”) by and among the Corporation, the Grantors named therein and Wilmington Trust, National Association, as trustee and security agent, as such Senior Secured Notes Indenture may be amended, restated, amended and restated, supplemented or otherwise modified, without increasing the aggregate amount of interest payable thereon, (3) without duplication of clause (1) above, borrowings under that certain Credit Agreement, dated as of May 29, 2020, by and among PNC Bank, National Association, the lenders party thereto, and the Corporation and its subsidiaries as in effect on May 29, 2020, and (4) indebtedness in the ordinary course of business.

(b) Neither the Corporation nor any of its subsidiaries will issue any Company Securities (other than Excluded Issuances) without the prior written consent of Ascribe III Investments LLC (“Ascribe”) for so long as Ascribe, together with its Affiliates and Affiliated Funds, holds or beneficially owns at least 12.5% of the aggregate voting power of all Voting Securities outstanding as of the Emergence Date.

ARTICLE 6

GENERAL PROVISIONS

Section 6.01. Fixing the Record Date. (a) In order that the Corporation may determine the Securityholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing such record date is adopted by the Board of Directors, and which record date shall not be more than 60 nor less than 10 days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the Securityholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining Securityholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of Securityholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided that the Board of Directors may in its discretion or as required by law fix a new record date for determination of Securityholders entitled to vote at the adjourned meeting, and in such case shall fix the same date or an earlier date as the record date for Securityholders entitled to notice of such adjourned meeting.

(b) In order that the Corporation may determine the Securityholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the Securityholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining Securityholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

Section 6.02. Dividends. Subject to limitations contained in Delaware Law and the Certificate of Incorporation, the Board of Directors may declare and pay dividends upon the shares of capital stock of the Corporation, which dividends may be paid either in cash, in property or in shares of the capital stock of the Corporation.

Section 6.03. Year. The fiscal year of the Corporation shall commence on January 1 and end on December 31 of each year.

Section 6.04. Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal, Delaware”. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or otherwise reproduced.

Section 6.05. Voting of Stock Owned by the Corporation. The Board of Directors may authorize any person, on behalf of the Corporation, to attend, vote at and grant proxies to be used at any meeting of stockholders of any corporation (except this Corporation) in which the Corporation may hold stock.

Section 6.06. Amendments. These Bylaws or any of them, may be altered, amended or repealed, or new Bylaws may be made, by the Securityholders entitled to vote thereon at any annual or special meeting thereof or by the Board of Directors. Unless a higher percentage is required by the Certificate of Incorporation as to any matter that is the subject of these Bylaws, all such amendments must be approved by the affirmative vote of the holders of not less than 66²^/³% of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors, voting together as a single class, or by a majority of the Board of Directors. Notwithstanding the foregoing, (i) any amendment of Section 5.04 must be approved by the affirmative vote of not less than 66^2/3% of the total voting power of (A) the outstanding Convertible Notes and (B) the Common Stock issued upon conversion of the Convertible Notes, with the Convertible Notes and such Common Stock voting together as a single class, (ii) any amendment of Section 5.05(a) must be approved by the affirmative vote of the holders of not less than 66^2/3% of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors (including, for the avoidance of doubt, each Securityholder that is then, and has been since the Emergence Date, a Major Securityholder), (iii) for so long as Ascribe, together with its Affiliates and Affiliated Funds, holds or beneficially owns at least 10% of the aggregate voting power of all Voting Securities outstanding as of the Emergence Date, any amendment to Section 5.05(b) must be approved by the affirmative vote of Ascribe, and (iv) any amendment of Sections 2.02(b), 2.03(c) and this sentence of Section 6.06 of these Bylaws must be approved by the affirmative vote of the holders of not less than 90% of the total voting power of all outstanding securities of the Corporation generally entitled to vote in the election of directors.

Section 6.07. Exclusive Forum. Any suit, action or proceeding by stockholders seeking to enforce any provision of, or based on any matter arising out of or in connection with, the Certificate of Incorporation or these Bylaws shall be brought in the Court of Chancery of the State of Delaware, or to the extent such

court does not have subject matter jurisdiction, the United States District Court for the District of Delaware, or to the extent such court also does not have subject matter jurisdiction, another court of the State of Delaware, County of New Castle, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of the Certificate of Incorporation or these Bylaws shall be deemed to have arisen from a transaction of business in the State of Delaware. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

Section 6.08. Related Party Transactions. The Corporation shall not, and shall not permit any of its subsidiaries to, enter into, amend or renew an agreement, arrangement or transaction with (a) any Affiliate of the Corporation (including any of the Corporation’s directors or officers or any entity in which any of the Corporation’s directors or officers has a financial interest) or (b) any owner of 5% or more of the Common Stock (including, for the avoidance of doubt, shares of Common Stock (rounded down to the nearest whole share) into which Convertible Notes may be converted), or an Affiliate of such owner (each, a “Related Party”) unless such action is approved by either (i) a majority of the disinterested directors on the Board of Directors, or (ii) the holders of 60% of the Common Stock (including, for the avoidance of doubt, shares of Common Stock (rounded down to the nearest whole share) into which Convertible Notes may be converted), other than any Common Stock (including, for the avoidance of doubt, shares of Common Stock (rounded down to the nearest whole share) into which Convertible Notes may be converted) held by the Related Party, except for (A) customary compensation or benefits arrangements with a director, officer or other employee of the Corporation or any of its subsidiaries in the ordinary course of business, (B) intercompany agreements in the ordinary course of business, and (C) the performance of the Corporation’s obligations under that certain Registration Rights Agreement, dated as of May 29, 2020, by and among the Corporation and the other parties thereto from time to time.

Exhibit 4.1

CONFIDENTIAL

EXECUTION VERSION

PIONEER ENERGY SERVICES CORP.

AND

WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee

INDENTURE

Dated as of May 29, 2020

5.00% Convertible Senior Unsecured PIK Notes due 2025

TABLE OF CONTENTS


	PAGE
ARTICLE 1 Definitions		1

Section 1.01. Definitions		1

ARTICLE 2 Issue, Description, Execution, Registration and Exchange of Notes		16

Section 2.01. Designation and Amount		16
Section 2.02. Form of Notes		16
Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts		17
Section 2.04. Execution, Authentication and Delivery of Notes		19
Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary		19
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes		26
Section 2.07. Temporary Notes		27
Section 2.08. Cancellation of Notes Paid, Converted, Etc.		27
Section 2.09. CUSIP Numbers		27
Section 2.10. Repurchases		28
Section 2.11. Equity Voting Rights		28

ARTICLE 3 Satisfaction and Discharge		28

Section 3.01. Satisfaction and Discharge		28

ARTICLE 4 Particular Covenants of the Company		28

Section 4.01. Payment of Principal and Interest		28
Section 4.02. Maintenance of Office or Agency		28
Section 4.03. Appointments to Fill Vacancies in Trustee’s Office		29
Section 4.04. Provisions as to Paying Agent		29
Section 4.05. Existence		30
Section 4.06. Rule 144A Information Requirement and Annual Reports		31
Section 4.07. Stay, Extension and Usury Laws		31
Section 4.08. Compliance Certificate; Statements as to Defaults		31
Section 4.09. Further Instruments and Acts		32
Section 4.10 Amendments or Waivers of ABL Credit Documents or Senior Secured Notes Documents		32
Section 4.11 Certain Covenants Under Senior Secured Notes Indenture		32


ARTICLE 5 Lists of Holders and Reports by the Company and the Trustee			32

Section 5.01. Lists of Holders			32
Section 5.02. Preservation and Disclosure of Lists			33

ARTICLE 6 Defaults and Remedies			33

Section 6.01. Events of Default			33
Section 6.02. Acceleration; Rescission and Annulment			34
Section 6.03. Payments of Notes on Default; Suit Therefor			35
Section 6.04. Application of Monies Collected by Trustee			37
Section 6.05. Proceedings by Holders			37
Section 6.06. Proceedings by Trustee			38
Section 6.07. Remedies Cumulative and Continuing			39
Section 6.08. Direction of Proceedings and Waiver of Defaults by Majority of Holders			39
Section 6.09. Notice of Defaults			39
Section 6.10. Undertaking to Pay Costs			40

ARTICLE 7 Concerning the Trustee			40

Section 7.01. Duties and Responsibilities of Trustee			40
Section 7.02. Reliance on Documents, Opinions, Etc.			42
Section 7.03. No Responsibility for Recitals, Etc.			43
Section 7.04. Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes			43
Section 7.05. Monies and Shares of Common Stock to Be Held in Trust			43
Section 7.06. Compensation and Expenses of Trustee			43
Section 7.07. Officers’ Certificate as Evidence			44
Section 7.08. Eligibility of Trustee			45
Section 7.09. Resignation or Removal of Trustee			45
Section 7.10. Acceptance by Successor Trustee			46
Section 7.11. Succession by Merger, Etc.			46
Section 7.12. Trustee’s Application for Instructions from the Company			47

ARTICLE 8 Concerning the Holders			47

Section 8.01. Action by Holders			47
Section 8.02. Proof of Execution by Holders			48
Section 8.03. Who Are Deemed Absolute Owners			48
Section 8.04. Company-Owned Notes Disregarded			48
Section 8.05. Revocation of Consents; Future Holders Bound			49


ARTICLE 9 Holders’ Meetings			49

Section 9.01. Purpose of Meetings			49
Section 9.02. Call of Meetings by Trustee			49
Section 9.03. Call of Meetings by Company or Holders			50
Section 9.04. Qualifications for Voting			50
Section 9.05. Regulations			50
Section 9.06. Voting			51
Section 9.07. No Delay of Rights by Meeting			51

ARTICLE 10 Supplemental Indentures			51

Section 10.01. Supplemental Indentures Without Consent of Holders			51
Section 10.02. Supplemental Indentures with Consent of Holders			52
Section 10.03. Effect of Supplemental Indentures			53
Section 10.04. Notation on Notes			53
Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee			54

ARTICLE 11 Consolidation, Merger, Sale, Conveyance and Lease			54

Section 11.01. Company May Consolidate, Etc. on Certain Terms			54
Section 11.02. Successor Corporation to Be Substituted			54
Section 11.03. Opinion of Counsel to Be Given to Trustee			55

ARTICLE 12 Immunity of Incorporators, Stockholders, Officers and Directors			55

Section 12.01. Indenture and Notes Solely Corporate Obligations			55

ARTICLE 13 Equity Voting Rights			56

Section 13.01. Equity Voting Rights			56
Section 13.03. Amendments to Certificate of Incorporation			56

ARTICLE 14 Conversion of Notes			57

Section 14.01. Conversion of Notes			57
Section 14.02. Conversion Procedure; Settlement Upon Conversion			58
Section 14.03. Adjustment of Conversion Rate			62
Section 14.04. Distributions			66
Section 14.05. Adjustments of Prices			66
Section 14.06. Shares to Be Fully Paid			67
Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common Stock			67
Section 14.08. Certain Covenants			69
Section 14.09. Responsibility of Trustee			69
Section 14.10. Notice to Holders Prior to Certain Actions			70
Section 14.11. Stockholder Rights Plans			70

iii


ARTICLE 15 Repurchase of Notes at Option of Holders			72

Section 15.01. Intentionally Omitted			72
Section 15.02. Repurchase at Option of Holders Upon a Fundamental Change			72
Section 15.03. Withdrawal of Fundamental Change Repurchase Notice			75
Section 15.04. Deposit of Fundamental Change Repurchase Price			75
Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes			76

ARTICLE 16 No Redemption			76

Section 16.01. No Redemption			76

ARTICLE 17 Miscellaneous Provisions			76

Section 17.01. Provisions Binding on Company’s Successors			76
Section 17.02. Official Acts by Successor Corporation			76
Section 17.03. Addresses for Notices, Etc.			76
Section 17.04. Governing Law; Jurisdiction			77
Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee			78
Section 17.06. Legal Holidays			78
Section 17.07. No Security Interest Created			78
Section 17.08. Benefits of Indenture			78
Section 17.09. Table of Contents, Headings, Etc.			78
Section 17.10. Authenticating Agent			79
Section 17.11. Execution in Counterparts			80
Section 17.12. Severability			80
Section 17.13. Waiver of Jury Trial			80
Section 17.14. Force Majeure			80
Section 17.15. Calculations			80
Section 17.16. USA PATRIOT Act			81
Section 17.17 Tax Treatment			81

EXHIBIT


Exhibit A	Form of Note	A-1
Exhibit B-1	Form of Certificate of Transfer	B-1
Exhibit B-2	Form of Accredited Investor Certificate	B-2
Exhibit C	Form of Conversion Blocker Opt-out Notice	C-1

INDENTURE dated as of May 29, 2020 between PIONEER ENERGY SERVICES CORP., a Delaware corporation, as issuer (the “Company,” as more fully set forth in Section 1.01) and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association duly organized and existing under the laws of the United States of America, as trustee (in such capacity, the “Trustee,” as more fully set forth in Section 1.01).

W I T N E S S E T H:

WHEREAS, for its lawful corporate purposes, the Company has duly authorized the issuance of its 5.00% Convertible Senior Unsecured PIK Notes due 2025 (the “Notes”), initially in an aggregate Initial Principal Amount not to exceed $129,771,000, and in order to provide the terms and conditions upon which the Notes are to be authenticated, issued and delivered, the Company has duly authorized the execution and delivery of this Indenture; and

WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note, the Form of Notice of Conversion, the Form of Fundamental Change Repurchase Notice and the Form of Assignment and Transfer to be borne by the Notes are to be substantially in the forms hereinafter provided; and

WHEREAS, all acts and things necessary to make the Notes, when executed by the Company and authenticated and delivered by the Trustee or a duly authorized authenticating agent, as in this Indenture provided, the valid, binding and legal obligations of the Company, and this Indenture a valid agreement according to its terms, have been done and performed, and the execution of this Indenture and the issuance hereunder of the Notes have in all respects been duly authorized.

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

That in order to declare the terms and conditions upon which the Notes are, and are to be, authenticated, issued and delivered, and in consideration of the premises and of the purchase and acceptance of the Notes by the Holders thereof, the Company covenants and agrees with the Trustee for the equal and proportionate benefit of the respective Holders from time to time of the Notes (except as otherwise provided below), as follows:

ARTICLE 1

DEFINITIONS

Section 1.01. Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein,” “hereof,” “hereunder” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. The terms defined in this Article include the plural as well as the singular. The words “sign”, “execute”, “execution”, “signature”, and words of like import in or related to any document to be signed in connection with this Indenture and the transactions contemplated hereby (including without limitation amendments, waivers or consents) shall be deemed to include electronic

signatures, the electronic matching of assignment terms and contract formations on electronic platforms, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

“ABL Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, by and among the Company and certain of its Subsidiaries, as borrowers, the lenders from time to time party thereto and PNC Bank, National Association, as administrative agent, sole lead arranger and sole bookrunner, as may be amended, restated, amended and restated, supplemented or otherwise modified in accordance with the terms of this Indenture, and as it may be refinanced or replaced in accordance with the Intercreditor Agreement and this Indenture (including any Replacement ABL Credit Agreement (as defined in the Intercreditor Agreement)).

“ABL Credit Documents” means the ABL Credit Agreement, any intercreditor agreement relating thereto, and all notes, guarantees, security agreements, mortgages, pledge agreements, notices, and each other agreement, instrument, or document executed at any time in connection with the ABL Credit Agreement, as may be amended, restated, amended and restated, supplemented or otherwise modified in accordance with the terms of this Indenture.

“Accelerated Mandatory Conversion” shall have the meaning specified in Section 14.01(c)(i).

“Accelerated Mandatory Conversion Date” shall have the meaning specified in Section 14.01(c)(ii).

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control,” when used with respect to any specified Person means the power to direct or cause the direction of 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. Notwithstanding anything to the contrary herein, the determination of whether one Person is an “Affiliate” of another Person for purposes of this Indenture shall be made based on the facts at the time such determination is made or required to be made, as the case may be, hereunder.

“Aggregated Person” shall have the meaning specified in Section 14.12(a).

“AI” means an “accredited investor” as defined in Rule 501(a) of Regulation D.

“AI Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the legend set forth in Section 2.05(c)(i) 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 to AIs in reliance on Regulation D.

“As-Converted-to-Common-Stock-Basis” shall have the meaning specified in Section 13.01.

“Board of Directors” means the board of directors of the Company or a committee of such board duly authorized to act for it hereunder.

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means a day other than a Saturday, Sunday or other day on which banking institutions are authorized or required by law to close in New York City.

“Capital Stock” means, for any entity, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that entity.

“Capitalization Amount” means, for any Interest Payment Date, an amount per Note equal to the interest accrued on the Capitalized Principal Amount as of the immediately preceding Interest Payment Date (or, if there is no immediately preceding Interest Payment Date, the interest accrued on the Initial Principal Amount), calculated at the rate of 5.00% per annum for the period from, and including, such immediately preceding Interest Payment Date (or, if there is no immediately preceding Interest Payment Date, from, and including, the Issue Date) to, but excluding, such Interest Payment Date.

“Capitalized Principal Amount” means, for any date, the principal amount per Note equal to the Initial Principal Amount of such Note, as increased on each Interest Payment Date on or prior to such date by the Capitalization Amount for each such Interest Payment Date. When the term “principal amount” of any Note is used herein, such reference(s) shall be deemed to be reference(s) to the Capitalized Principal Amount of such Note, unless the context otherwise requires.

“Cash Settlement” shall have the meaning specified in Section 14.02(a).

“Certificate of Incorporation” means the certificate of incorporation of the Company, as the same may be amended and/or restated, modified or supplemented from time to time.

“close of business” means 5:00 p.m. (New York City time).

“Commission” means the U.S. Securities and Exchange Commission.

“Common Equity” of any Person means (1) Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person and (2) in the case of the Company or any successor company as provided for herein, the Notes on an As-Converted-to-Common-Stock-Basis.

“Common Stock” means the common stock of the Company, par value $0.001 per share, at the date of this Indenture, subject to Section 14.07.

“Company” shall have the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 11, shall include its successors and assigns.

“Company Order” means a written order of the Company, signed by (a) the Company’s Chief Executive Officer, President, Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”) and (b) any such other Officer designated in clause (a) of this definition or the Company’s Treasurer or Assistant Treasurer or Secretary or any Assistant Secretary, and delivered to the Trustee.

“Conversion Agent” shall have the meaning specified in Section 4.02.

“Conversion Blocker” shall have the meaning specified in Section 14.12(a).

“Conversion Date” means (a) in respect of a conversion pursuant to Section 14.01(a), the first date that the Holder has complied with the requirements set forth in Section 14.02(b), (b) in respect of a conversion pursuant to Section 14.01(b), the second Business Day immediately preceding the Maturity Date and (c) in respect of a conversion pursuant to Section 14.01(c), the relevant Accelerated Mandatory Conversion Date.

“Conversion Obligation” shall have the meaning specified in Section 14.01(a).

“Conversion Price” means as of any time, $1,000 divided by the Conversion Rate as of such time.

“Conversion Rate” shall have the meaning specified in Section 14.01(a).

“Corporate Trust Office” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at 50 South Sixth Street, Suite 1290, Minneapolis, MN 55402, Attention: Pioneer Energy Services Notes Administrator, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor trustee (or such other address as such successor trustee may designate from time to time by notice to the Holders and the Company).

“Custodian” means the Trustee, as custodian for The Depository Trust Company, with respect to the Global Notes, or any successor entity thereto.

“Daily Conversion Value” means, for each of the 30 consecutive Trading Days during the Observation Period, one-thirtieth (1/30^th) of the product of (a) the Conversion Rate on such Trading Day and (b) the Daily VWAP for such Trading Day; provided that, for any Trading Day during the Mandatory Conversion Period, the “Daily Conversion Value” shall not be less than $1,000 divided by 30.

“Daily VWAP” means, for each of the 30 consecutive Trading Days during the relevant Observation Period, the per share volume-weighted average price per share of Common Stock as displayed under the heading “Bloomberg VWAP” on the applicable Bloomberg page for such shares in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of one share of the Common Stock on such Trading Day determined, using a volume-weighted average method, by a nationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” shall be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours. Notwithstanding the foregoing, if the price of the Common Stock is not displayed on such page, the “Daily VWAP” shall be equal to the Fair Market Value of the Common Stock.

“Default” means any event that is, or after notice or passage of time, or both, would be, an Event of Default.

“Defaulted Amounts” means any amounts on any Note (including, without limitation, the Fundamental Change Repurchase Price, principal and interest) that are due and payable but are not punctually paid or duly provided for.

“Depositary” means, with respect to each Global Note, the Person specified in Section 2.05(c) as the Depositary with respect to such Notes, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter, “Depositary” shall mean or include such successor.

“Discounted Issuance” shall have the meaning specified in Section 14.03(c).

“Distributed Property” shall have the meaning specified in Section 14.04(a).

“Effective Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, reflecting the relevant share split or share combination, as applicable, or if the shares are not so traded, the date on which the relevant share split or share combination, as applicable, becomes effective.

“Effective Price” means:

(a) with respect to Common Stock acquired for cash, the per share amount of the net cash proceeds received by the Company for such Common Stock;

(b) with respect to Common Stock acquired for other consideration, the per share Fair Market Value of the net consideration received by the Company for such Common Stock;

(c) with respect to any option, warrant or other right to acquire Common Stock, whether direct or indirect and whether or not conditional or contingent, the sum of (a) the Fair Market Value of the aggregate consideration, if any, received by the Company for such option, warrant or right divided by the number of shares of Common

Stock into which such option, warrant or right is exercisable at time of issuance, plus (b) the per share amount of the exercise price to the extent paid in cash and per share fair market value (as determined in good faith and in a commercially reasonable manner by the Board of Directors) of the exercise price if paid in other consideration; and

(d) with respect to securities convertible or exchangeable into Common Stock, (x) the net consideration per security paid for such securities (to the extent paid in cash) or the net fair market value (as determined in good faith and in a commercially reasonable manner by the Board of Directors) of the consideration per security paid for such securities if the price for such securities is paid in other consideration, as of the date of their issuance divided by (y) the number of shares of Common Stock per security for which such securities are convertible or exchangeable.

“Event of Default” shall have the meaning specified in Section 6.01.

“Ex-Dividend Date” means the first date on which shares of the Common Stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question, from the Company or, if applicable, from the seller of Common Stock on such exchange or market (in the form of due bills or otherwise) as determined by such exchange or market; provided that if the shares of Common Stock are not so traded, the Ex-Dividend Date shall mean the record date for such issuance, dividend or distribution, as declared by the Board of Directors.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Fair Market Value” of the Common Stock or other property, as of any date of determination, means the price that a willing buyer would pay to a willing seller for the shares of Common Stock or such property in an arm’s length transaction, with neither party being under any immediate obligation or need to consummate the transaction, assuming such shares of Common Stock are publicly traded and widely distributed with no discount for lack of liquidity; provided that such valuation shall exclude any minority discount. Fair Market Value shall be determined by the Board of Directors and a written notice of such determination shall be given by the Company to the Trustee and the Holders ten (10) days prior to the date of the transaction for which the Fair Market Value is being determined. Unless objected by the Holders of a majority in aggregate principal amount of the Notes then outstanding within such ten (10)-day period, the Board of Directors’ determination of the Fair Market Value shall be binding on the parties hereto. If the Holders of a majority in aggregate principal amount of the Notes then outstanding object in writing to the Board of Directors’ determination of the Fair Market Value within such ten (10)-day period, the Company shall hire a nationally recognized accounting firm or investment bank with experience in transactions of comparable size and magnitude at the sole cost and expense of the Company. Such accounting firm or investment bank shall calculate the Fair Market Value and its calculations shall be conclusive and binding upon the parties absent a manifest error.

“Final Settlement Method Election Date” means the 40th Scheduled Trading Day immediately preceding the Maturity Date.

“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.

“Form of Fundamental Change Repurchase Notice” means the “Form of Fundamental Change Repurchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.

“Form of Note” means the “Form of Note” attached hereto as Exhibit A.

“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:

(a) an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the equity securities of the Company entitled to vote for members of the Board of Directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); provided that no securityholders of the Company on the date hereof (after giving effect to the transactions contemplated by the Transaction Agreement) shall constitute a “group” for purposes of this definition solely by virtue of the voting agreements among, or commonality of interests of, such securityholders in the bankruptcy proceedings with respect to the Company immediately prior to the date hereof;

(b) the consummation of (A) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or assets; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (B) in which the holders of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Fundamental Change pursuant to this clause (b);

(c) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company, voting as a single class with the Holders; or

(d) at any time following the Initial Listing Date, the Common Stock (or other common stock underlying the Notes) ceases to be listed or quoted on a Relevant Exchange for a period of five consecutive Trading Days;

provided, however, that a transaction or transactions described in clause (a) or clause (b) above shall not constitute a Fundamental Change, if at least 90% of the consideration received or to be received by the common stockholders of the Company, excluding cash payments for fractional shares, in connection with such transaction or transactions consists of shares of common stock that are listed or quoted on a Relevant Exchange or will be so listed or quoted when issued or exchanged in connection with such transaction or transactions and as a result of such transaction or transactions the Notes become convertible into such consideration, excluding cash payments for fractional shares (subject to the provisions of Section 14.02(a)). If any transaction in which the Common Stock is replaced by the securities of another entity occurs, following the effective date of such transaction references to the Company in this definition shall instead be references to such other entity; and

provided, further, that in no event shall the consummation of the transactions contemplated by the Transaction Agreement (including pursuant to the securities purchase agreement referred to therein but excluding, for the avoidance of doubt, subsequent transfers of securities not required by the Transaction Agreement) constitute a Fundamental Change.

“Fundamental Change Company Notice” shall have the meaning specified in Section 15.02(c).

“Fundamental Change Repurchase Date” shall have the meaning specified in Section 15.02(a).

“Fundamental Change Repurchase Notice” shall have the meaning specified in Section 15.02(b)(i).

“Fundamental Change Repurchase Price” shall have the meaning specified in Section 15.02(a).

“Global Note” shall have the meaning specified in Section 2.05(b).

“Holder,” as applied to any Note, or other similar terms (but excluding the term “beneficial holder”), means any Person in whose name at the time a particular Note is registered on the Note Register.

“Indenture” means this instrument as originally executed or, if amended or supplemented as herein provided, as so amended or supplemented.

“Initial Listing Date” means the first date on or after the date of this Indenture that the Common Stock (or other common stock underlying the Notes) is listed or quoted on a Relevant Exchange.

“Initial Notes” shall have the meaning specified in Section 2.01.

“Initial Principal Amount” of any Note means the principal amount of such Note on the Issue Date.

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, among PNC Bank, National Association, as administrative agent under the ABL Credit Agreement and Wilmington Trust, National Association, as security agent under the Senior Secured Notes Indenture and acknowledged and agreed by the Company and certain of its Subsidiaries, as may be amended, restated, amended and restated, supplemented or otherwise modified in accordance with the terms of this Indenture.

“Interest Payment Date” means each May 15 and November 15 of each year, beginning on November 15, 2020.

“Issue Date” means May 29, 2020.

“Last Reported Sale Price” of the Common Stock on any date means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange on the relevant date, the “Last Reported Sale Price” shall be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Stock is not so quoted, the “Last Reported Sale Price” shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose. If the bid and ask prices referred to in the prior sentence cannot be ascertained, the “Last Reported Sale Price” shall be the Fair Market Value of the Common Stock.

“Listing Condition” shall be satisfied on any date if the Common Stock is duly listed for trading on a Relevant Exchange as of such date.

“Mandatory Conversion” shall have the meaning specified in Section 14.01(b).

“Mandatory Conversion Obligation” shall have the meaning specified in Section 14.01(b).

“Mandatory Conversion Period” means the 30 consecutive Trading Days beginning on, and including, the 31st Scheduled Trading Day immediately preceding the Maturity Date.

“Market Disruption Event” means, for the purposes of determining amounts due upon conversion (a) a failure by the primary U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading to open for trading during its regular trading session or (b) the occurrence or existence prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Stock for more than one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant stock exchange or otherwise) in the Common Stock or in any options contracts or futures contracts relating to the Common Stock.

“Maturity Date” means November 15, 2025.

“Merger Event” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:

(b) the consummation of (A) any bona fide recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination) as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets; (B) any bona fide share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be converted into cash, securities or other property or assets; or (C) any sale, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its Subsidiaries, taken as a whole, to any Person other than one of the Company’s Wholly Owned Subsidiaries; provided, however, that a transaction described in clause (A) or (B) in which the holders of all classes of the Company’s Common Equity immediately prior to such transaction own, directly or indirectly, more than 50% of all classes of Common Equity of the continuing or surviving corporation or transferee or the parent thereof immediately after such transaction in substantially the same proportions as such ownership immediately prior to such transaction shall not be a Merger Event pursuant to this clause (b); or

(c) any one or more related (A) bona fide consolidations, amalgamations, mergers or binding share exchanges of the Company or any of its Subsidiaries with or into another Person in which the Company is the continuing entity and which does not result in a reclassification or change of all of the Common Stock outstanding, and (B) acquisitions by the Company or any of its Subsidiaries of substantially all assets, or a business, division, or line of business, of any Person, for which, in the case of this clause (c), either (x) the equity value of the Person or Persons being acquired is, in the aggregate for all such transactions, greater than $100,000,000, or (y) such transactions have been approved by Holders of at least a majority of the aggregate principal amount of the Notes then outstanding (determined in accordance with Article 8);

provided that in no event shall the consummation of the transactions contemplated by the Transaction Agreement (including pursuant to the securities purchase agreement referred to therein but excluding, for the avoidance of doubt, subsequent transfers of securities not required by the Transaction Agreement) constitute a Merger Event.

“Note” or “Notes” shall have the meaning specified in the first paragraph of the recitals of this Indenture.

“Note Register” shall have the meaning specified in Section 2.05(a).

“Note Registrar” shall have the meaning specified in Section 2.05(a).

“Notice of Conversion” shall have the meaning specified in Section 14.02(b).

“Obligations” means, without duplication, any principal, premium, if any, interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or its Subsidiaries, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts payable under the Notes and this Indenture.

“Observation Period” with respect to any Note surrendered for conversion means (i) subject to clause (ii), the 30 consecutive Trading Day period beginning on, and including, the second Trading Day immediately succeeding such Conversion Date, and (ii) in respect of any Mandatory Conversion, the Mandatory Conversion Period.

“Officer” means, with respect to the Company, the President, the Chief Executive Officer, the Treasurer, the Secretary, any Executive or Senior Vice President or any Vice President (whether or not designated by a number or numbers or word or words added before or after the title “Vice President”).

“Officers’ Certificate,” when used with respect to the Company, means a certificate that is delivered to the Trustee and that is signed by (a) two Officers of the Company or (b) one Officer of the Company and one of the Treasurer, any Assistant Treasurer, the Secretary, any Assistant Secretary or the Controller of the Company. Each such certificate shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section. One of the Officers giving an Officers’ Certificate pursuant to Section 4.08 shall be the principal executive, financial or accounting officer of the Company.

“open of business” means 9:00 a.m. (New York City time).

“Opinion of Counsel” means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company, or other counsel acceptable to the Trustee, that is delivered to the Trustee. Each such opinion shall include the statements provided for in Section 17.05 if and to the extent required by the provisions of such Section 17.05.

“Optional Conversion” shall have the meaning specified in Section 14.12(a).

“outstanding,” when used with reference to Notes, shall, subject to the provisions of Section 8.04, mean, as of any particular time, all Notes authenticated and delivered by the Trustee under this Indenture, except:

(a) Notes theretofore canceled by the Trustee or accepted by the Trustee for cancellation;

(b) Notes, or portions thereof, that have become due and payable and in respect of which monies in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Company) or shall have been set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent);

(c) Notes that have been paid pursuant to Section 2.06 or Notes in lieu of which, or in substitution for which, other Notes shall have been authenticated and delivered pursuant to the terms of Section 2.06 unless proof satisfactory to the Trustee is presented that any such Notes are held by protected purchasers in due course;

(d) Notes converted pursuant to Article 14 and required to be cancelled pursuant to Section 2.08; and

(e) Notes repurchased by the Company pursuant to the penultimate sentence of Section 2.10.

“Paying Agent” shall have the meaning specified in Section 4.02.

“Person” means an individual, a corporation, a limited liability company, an association, a partnership, a joint venture, a joint stock company, a trust, an unincorporated organization or a government or an agency or a political subdivision thereof.

“Physical Notes” means permanent certificated Notes in registered form issued in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof.

“Physical Settlement” shall have the meaning specified in Section 14.02(a).

“PIK Notes” shall have the meaning set forth in Section 2.03(d).

“Predecessor Note” of any particular Note means every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.06 in lieu of or in exchange for a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note that it replaces.

“QIB” means a “qualified institutional buyer” (within the meaning of Rule 144A).

“Record Date” means, with respect to any dividend, distribution or other transaction or event in which the holders of Common Stock (or other applicable security) have the right to receive any cash, securities or other property or in which the Common Stock (or such other security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of holders of the Common Stock (or such other security) entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors, by statute, by contract or otherwise).

“Reference Property” shall have the meaning specified in Section 14.07(a).

“Regular Record Date,” with respect to any Interest Payment Date, means the May 1 or November 1 (whether or not such day is a Business Day) immediately preceding the applicable May 15 or November 15 Interest Payment Date, respectively.

“Regulation D” means Regulation D as promulgated under the Securities Act.

“Relevant Exchange” means any of The New York Stock Exchange, The NYSE American, The Nasdaq Global Select Market, The Nasdaq Global Market or The Nasdaq Capital Market (or any of their respective successors).

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.

“Restricted Global Note” means a Global Note that is a Restricted Note.

“Restricted Physical Note” means a Physical Note that is a Restricted Note.

“Restricted Note” shall have the meaning specified in Section 2.05(c)(i).

“Restricted Notes Resale Restriction Termination Date” shall have the meaning specified in Section 2.05(c)(i).

“Restricted Ownership Percentage” shall have the meaning specified in Section 14.12(a).

“Restricted Securities” shall have the meaning specified in Section 2.05(c)(i).

“Rule 144” means Rule 144 as promulgated under the Securities Act.

“Rule 144A” means Rule 144A as promulgated under the Securities Act.

“Rule 144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the legend set forth in Section 2.05(c)(i) 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 to QIBs.

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Stock is listed or admitted for trading. If the Common Stock is not so listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“Senior Secured Notes” means the $78,125,000 in aggregate principal amount of the Company’s Senior Secured Floating Rate Notes due 2025.

“Senior Secured Notes Documents” means the Senior Secured Notes Indenture and the other “Notes Documents” under and as defined in the Senior Secured Notes Indenture, as each document may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms of this Indenture.

“Senior Secured Notes Indenture” means the Indenture relating to the Senior Secured Notes dated as of the date hereof, among the Company, the guarantors party thereto and Wilmington Trust, National Association, as trustee and security agent, as such document may be amended, restated, supplemented or otherwise modified from time to time, in accordance with the terms of this Indenture.

“Settlement Amount” has the meaning specified in Section 14.02(a)(iv).

“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement or Cash Settlement, as elected (or deemed to have been elected) by the Company.

“Settlement Notice” has the meaning specified in Section 14.02(a)(iii).

“Share Exchange Event” shall have the meaning specified in Section 14.07(a).

“Significant Subsidiary” means a Subsidiary of the Company that meets the definition of “significant subsidiary” in Article 1, Rule 1-02 of Regulation S-X under the Exchange Act.

“Subsidiary” means, with respect to any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, general partners or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person; (ii) such Person and one or more Subsidiaries of such Person; or (iii) one or more Subsidiaries of such Person.

“Successor Company” shall have the meaning specified in Section 11.01(a).

“Trading Day” means a day on which (i) trading in the Common Stock (or other security for which a closing sale price must be determined) generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock (or such other security) is then listed or, if the Common Stock (or such other security) is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock (or such other security) is then traded and (ii) a Last Reported Sale Price for the Common Stock (or closing sale price for such other security) is available on such securities exchange or market; provided that if the Common Stock (or such other security) is not so listed or traded, “Trading Day” means a Business Day; and provided, further, that for purposes of determining amounts due upon conversion only, “Trading Day” means a day on which (x) there is no Market Disruption Event and (y) trading in the Common Stock generally occurs on the principal U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Stock is then listed or admitted for trading, except that if the Common Stock is not so listed or admitted for trading, “Trading Day” means a Business Day.

“Transaction Agreement” means the transaction agreement dated as of, and filed in the United States Bankruptcy Court for the Southern District of Texas on, May 9, 2020, among the Consenting Term Lenders and the Participating Noteholders (each as defined therein) [Docket No. 316].

“transfer” shall have the meaning specified in Section 2.05(c).

“Trigger Event” shall have the meaning specified in Section 14.04(a).

“Trust Indenture Act” means the Trust Indenture Act of 1939, as amended, as it was in force at the date of execution of this Indenture; provided, however, that in the event the Trust Indenture Act of 1939 is amended after the date hereof, the term “Trust Indenture Act” shall mean, to the extent required by such amendment, the Trust Indenture Act of 1939, as so amended.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.

“unit of Reference Property” shall have the meaning specified in Section 14.07(a).

“Unrestricted Global Note” means a Global Note that is not a Restricted Note.

“Unrestricted Physical Note” means a Physical Note that is not a Restricted Note.

“Wholly Owned Subsidiary” means, with respect to any Person, any Subsidiary of such Person, except that, solely for purposes of this definition, the reference to “more than 50%” in the definition of “Subsidiary” shall be deemed replaced by a reference to “100%”.

ARTICLE 2

ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES

Section 2.01. Designation and Amount. The Notes shall be designated as the “5.00% Convertible Senior Unsecured PIK Notes due 2025.” The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is limited to $129,771,000 (the “Initial Notes”), except for Notes authenticated and delivered upon the issuance of PIK Notes, registration or transfer of, or in exchange for, or in lieu of other Notes to the extent expressly permitted hereunder. PIK Notes shall be issued in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof.

Section 2.02. Form of Notes. The Notes and the Trustee’s certificate of authentication to be borne by such Notes shall be substantially in the respective forms set forth in Exhibit A, the terms and provisions of which shall constitute, and are hereby expressly incorporated in and made a part of this Indenture; provided that to the extent any provision of any Note conflicts with the provisions of this Indenture, the provisions of this Indenture shall control and govern. To the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby.

Any Global Note may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Indenture as may be required by the Custodian or the Depositary, or as may be required to comply with any applicable law or any regulation thereunder or with the rules and regulations of any securities exchange or automated quotation system upon which the Notes may be listed or traded or designated for issuance or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Notes are subject.

Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends or endorsements as the Officer executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Indenture, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance (and the Company shall notify the Trustee of any such listing or designation), or to conform to usage or to indicate any special limitations or restrictions to which any particular Notes are subject.

Each Global Note shall represent such principal amount of the outstanding Notes as shall be specified therein and shall provide that it shall represent 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 increased or reduced to reflect repurchases, cancellations, conversions, transfers or exchanges permitted hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in such manner and upon instructions given by the Holder of such Notes or the Company in accordance with this Indenture. Payment of principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued interest that has not been paid on, a Global Note shall be made to the Holder of such Note on the date of payment, unless a record date or other means of determining Holders eligible to receive payment is provided for herein.

Section 2.03. Date and Denomination of Notes; Payments of Interest and Defaulted Amounts. (a) The Notes shall be issuable in registered form without coupons in minimum denominations of $1.00 principal amount and integral multiples of $1.00 in excess thereof. Each Note shall be dated the date of its authentication and shall bear interest from the date specified on the face of such Note. Accrued interest on the Notes shall be computed on the basis of a 360-day year composed of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

(b) Intentionally Omitted.

(c) Any Defaulted Amounts shall forthwith cease to be payable to the Holder on the relevant payment date but shall accrue interest per annum at the rate borne by the Notes plus two percent, subject to the enforceability thereof under applicable law, from, and including, such relevant payment date, and such Defaulted Amounts together with such interest thereon shall be paid by the Company, at its election in each case, as provided in clause (i) or (ii) below:

(i) The Company may elect to make payment of any Defaulted Amounts to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on a special record date for the payment of such Defaulted Amounts, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of the Defaulted Amounts proposed to be paid on each Note and the date of the proposed payment (which shall be not less than 25 days after the receipt by the Trustee of such notice), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount to be paid in respect of such Defaulted Amounts or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Amounts as in this clause provided. Thereupon the Company shall fix a special record date for the payment of such Defaulted Amounts which shall be not more than 15 days

and not less than 10 days prior to the date of the proposed payment, and not less than 15 days after the receipt by the Trustee of the notice of the proposed payment. The Company shall promptly notify the Trustee of such special record date and the Trustee, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Amounts and the special record date therefor to be delivered to each Holder not less than 10 days prior to such special record date. Notice of the proposed payment of such Defaulted Amounts and the special record date therefor having been so delivered, such Defaulted Amounts shall be paid to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such special record date and shall no longer be payable pursuant to the following clause (ii) of this Section 2.03(c).

(ii) The Company may make payment of any Defaulted Amounts in any other lawful manner not inconsistent with the requirements of any securities exchange or automated quotation system on which the Notes may be listed or designated for issuance, and upon such notice as may be required by such exchange or automated quotation system, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee.

(d) The Company shall pay interest on the Notes on any Interest Payment Date by directing in a written order dated no later than the applicable Interest Payment Date the increase of the Capitalized Principal Amount of the Notes by the Capitalization Amount for such Interest Payment Date, effective as of such Interest Payment Date; provided that the Capitalized Principal Amount shall be rounded up to the nearest $1.00; provided that for any Notes (1) converted with a Conversion Date after a Regular Record Date and on or prior to the corresponding Interest Payment Date; (2) repurchased on a Fundamental Change Repurchase Date that is after a Regular Record Date and on or prior to the corresponding Interest Payment Date; or (3) automatically converted pursuant to Section 14.01(b), any Capitalization Amount by which the Capitalized Principal Amount for such Notes would have been increased on such corresponding Interest Payment Date shall instead be paid in cash to the relevant Holder(s) of such Notes as of such Regular Record Date, and no such increase shall be made to the Capitalized Principal Amount of such Notes. Notwithstanding the foregoing or anything to the contrary in this Indenture, if the Notes are represented by one or more Physical Notes, or if the Company is prohibited by the requirements of the Depository or law with respect to Global Notes from paying interest by increasing the Capitalized Principal Amount of the Notes, the Company may, at its option, in lieu of increasing the Capitalized Principal Amount of the Notes by the Capitalization Amount for such Interest Payment Date, pay interest due and payable on such Physical Notes or Global Notes, as the case may be, by authenticating additional Notes (in the form of Physical Notes or Global Notes, as applicable) on the relevant Interest Payment Date (the “PIK Notes”) in an aggregate principal amount equal to the relevant Capitalization Amount. If the Company elects to issue PIK Notes, the Company shall direct the Trustee in a written order dated no later than five Business Days prior to the applicable Interest Payment Date to authenticate and deliver PIK Notes, dated as of the applicable Interest Payment Date, in an aggregate amount equal to the Capitalization Amount for the applicable interest period (rounded up to the nearest $1.00).

Section 2.04. Execution, Authentication and Delivery of Notes. The Notes shall be signed in the name and on behalf of the Company by the manual or facsimile signature of its Chief Executive Officer, President, Chief Financial Officer, Treasurer, Secretary or any of its Executive or Senior Vice Presidents.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes, and the Trustee in accordance with such Company Order shall authenticate and deliver such Notes, without any further action by the Company hereunder.

Only such Notes as shall bear thereon a certificate of authentication substantially in the form set forth on the Form of Note attached as Exhibit A hereto, executed manually by an authorized officer of the Trustee (or an authenticating agent appointed by the Trustee as provided by Section 17.10), shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose. Such certificate by the Trustee (or such an authenticating agent) upon any Note executed by the Company shall be conclusive evidence that the Note so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture.

In case any Officer of the Company who shall have signed any of the Notes shall cease to be such Officer before the Notes so signed shall have been authenticated and delivered by the Trustee, or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed such Notes had not ceased to be such Officer of the Company; and any Note may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Note, shall be the Officers of the Company, although at the date of the execution of this Indenture any such person was not such an Officer.

Section 2.05. Exchange and Registration of Transfer of Notes; Restrictions on Transfer; Depositary.

(a) The Company shall cause to be kept at the Corporate Trust Office a register (the register maintained in such office or in any other office or agency of the Company designated pursuant to Section 4.02, the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. Such register shall be in written form or in any form capable of being converted into written form within a reasonable period of time. The Trustee is hereby initially appointed the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. The Company may appoint one or more co-Note Registrars in accordance with Section 4.02.

Upon surrender for registration of transfer of any Note to the Note Registrar or any co-Note Registrar, and satisfaction of the requirements for such transfer set forth in this Section 2.05, the Company shall execute, and the Trustee shall authenticate and deliver upon receipt of a Company Order, in the name of the designated transferee or transferees, one or more new Notes of any authorized denominations and of a like aggregate principal amount and bearing such restrictive legends as may be required by this Indenture.

Notes may be exchanged for other Notes of any authorized denominations and of a like aggregate principal amount, upon surrender of the Notes to be exchanged at any such office or agency maintained by the Company pursuant to Section 4.02. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver upon receipt of a Company Order, the Notes that the Holder making the exchange is entitled to receive, bearing registration numbers not contemporaneously outstanding.

All Notes presented or surrendered for registration of transfer or for exchange, repurchase or conversion shall (if so required by the Company, the Trustee, the Note Registrar or any co-Note Registrar) be duly endorsed, or be accompanied by a written instrument or instruments of transfer in form satisfactory to the Company and duly executed, by the Holder thereof or its attorney-in-fact duly authorized in writing.

No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent for any exchange or registration of transfer of Notes, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of new Notes issued upon such exchange or registration of transfer being different from the name of the Holder of the old Notes surrendered for exchange or registration of transfer.

None of the Company, the Trustee, the Note Registrar or any co-Note Registrar shall be required to exchange or register a transfer of (i) any Notes surrendered for conversion or, if a portion of any Note is surrendered for conversion, such portion thereof surrendered for conversion or (ii) any Notes, or a portion of any Note, surrendered for repurchase (and not withdrawn) in accordance with Article 15.

All Notes issued upon any registration of transfer or exchange of Notes in accordance with this Indenture shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

(b) So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, subject to the third paragraph of Section 2.05(c)(vi) all Notes shall be represented by one or more Notes in global form (each, a “Global Note”) registered in the name of the Depositary or the nominee of the Depositary. The transfer and exchange of beneficial interests in a Global Note that does not involve the issuance of a Physical Note shall be effected through the Depositary (but not the Trustee or the Custodian) in accordance with this Indenture (including the restrictions on transfer set forth herein) and the procedures of the Depositary therefor.

(c) (i) Every Note that bears or is required under this Section 2.05(c)(i) to bear the legend set forth in this Section 2.05(c)(i) (each, a “Restricted Note” and, together with any Common Stock issued upon conversion of Restricted Notes that is required to bear the legend set forth in Section 2.05(d), the “Restricted Securities”), shall be subject to the restrictions on transfer set forth in this Section 2.05(c)(i) (including the legend set forth below), unless such restrictions on transfer shall be eliminated or otherwise waived by written consent of the Company, and the Holder of each such Restricted Security, by such Holder’s acceptance thereof, agrees to be bound by all such restrictions on transfer. As used in this Section 2.05(c) and Section 2.05(d), the term “transfer” encompasses any sale, pledge, transfer or other disposition whatsoever of any Restricted Security or AI Security.

Until the date (the “Restricted Notes Resale Restriction Termination Date”) that is the later of (1) the date that is one year after the last date of original issuance of the Notes, or such shorter period of time as permitted by Rule 144 or any successor provision thereto, and (2) such later date, if any, as may be required by applicable law, any certificate evidencing such Note (and all securities issued in exchange therefor or substitution thereof, other than Common Stock, if any, issued upon conversion thereof, which shall bear the legend set forth in Section 2.05(d), if applicable) shall bear a legend in substantially the following form (unless such Notes have been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company in writing, with notice thereof to the Trustee):

THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT [INSERT FOR RULE 144A GLOBAL NOTE: IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,] [INSERT FOR AI GLOBAL NOTE: IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,] AND

(2) AGREES FOR THE BENEFIT OF PIONEER ENERGY SERVICES CORP. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE HEREOF OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY RESERVES THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

(ii) [Reserved].

(iii) No transfer of any Restricted Note prior to the Restricted Notes Resale Restriction Termination Date will be registered by the Note Registrar unless (x) the applicable box on the Form of Assignment and Transfer has been checked, (y) the Trustee has received a certificate in the form of Exhibit B-1 hereto and (iii) in the case of a transfer to an AI, the Trustee has received a certificate in the form of Exhibit B-2 hereto.

(iv) Any Restricted Note (or security issued in exchange or substitution therefor) (x) as to which the restrictions on transfer set forth in Section 2.05(c)(i) shall have expired in accordance with their terms, (y) that has been transferred pursuant to a registration statement that has become effective or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (z) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of such Note for exchange to the Note Registrar in accordance with the provisions of this Section 2.05, be exchanged for a new Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive legend required by Section 2.05(c)(i) and shall not be assigned a restricted CUSIP number. The Company shall be entitled to instruct the Custodian in writing to so surrender any Global Note representing Restricted Notes as to which any of the conditions set forth in clause (x) through (z) of the immediately preceding sentence have been satisfied, and, upon such instruction, the Custodian shall so surrender such Global Note for exchange; and any new Global Note so exchanged therefor shall not bear the restrictive legend specified in Section 2.05(c)(i) and shall not be assigned a restricted CUSIP number. The Company shall promptly notify the Trustee upon the occurrence of the Restricted Notes Resale Restriction Termination Date and promptly after a registration statement, if any, with respect to the Notes or any Common Stock issued upon conversion of the Notes has been declared effective under the Securities Act.

(v) [Reserved].

(vi) Notwithstanding any other provisions of this Indenture (other than the provisions set forth in this Section 2.05(c)), a Global Note may not be transferred as a whole or in part except (i) 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 the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary and (ii) for exchange of a Global Note or a portion thereof for one or more Physical Notes in accordance with the second immediately succeeding paragraph.

The Depositary shall be a clearing agency registered under the Exchange Act. The Company initially appoints The Depository Trust Company to act as Depositary with respect to each Global Note. Initially, each Global Note shall be issued to the Depositary, registered in the name of Cede & Co., as the nominee of the Depositary, and deposited with the Trustee as custodian for Cede & Co.

If (i) the Depositary notifies the Company at any time that the Depositary is unwilling or unable to continue as depositary for the Global Notes and a successor depositary is not appointed within 90 days, (ii) the Depositary ceases to be registered as a clearing agency under the Exchange Act and a successor depositary is not appointed within 90 days or (iii) an Event of Default with respect to the Notes has occurred and is continuing and a beneficial owner of any Note requests that its beneficial interest therein be issued as a Physical Note, the Company shall execute, and the Trustee, upon receipt of an Officers’ Certificate and a Company Order for the authentication and delivery of Notes, shall authenticate and deliver (x) in the case of clause (iii), a Physical Note to such beneficial owner in an aggregate principal amount equal to the aggregate principal amount of such Note corresponding to such beneficial owner’s beneficial interest and (y) in the case of clause (i) or (ii), Physical Notes to each beneficial owner of the related Global Notes (or a portion thereof) in an aggregate principal amount equal to the aggregate principal amount of such Global Notes in exchange for such Global Notes, and upon delivery of the Global Notes to the Trustee such Global Notes shall be canceled.

Physical Notes issued in exchange for all or a part of the Global Note pursuant to this Section 2.05(c) shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, or, in the case of clause (iii) of the immediately preceding paragraph, the relevant beneficial owner, shall instruct the Trustee. Upon execution and authentication, the Trustee shall deliver such Physical Notes to the Persons in whose names such Physical Notes are so registered.

At such time as all interests in a Global Note have been converted, canceled, repurchased or transferred, such Global Note shall be, upon receipt thereof, canceled by the Trustee in accordance with standing procedures and existing instructions between the Depositary and the Custodian. At any time prior to such cancellation, if any interest in a Global Note is exchanged

for Physical Notes, converted, canceled, repurchased or transferred to a transferee who receives Physical Notes therefor or any Physical Note is exchanged or transferred for part of such Global Note, the aggregate principal amount of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the Custodian, be appropriately reduced or increased, as the case may be, and an endorsement shall be made on such Global Note, by the Trustee or the Custodian, at the direction of the Trustee, to reflect such reduction or increase.

None of the Company, the Trustee or any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

(d) Until the Restricted Notes Resale Restriction Termination Date, any stock certificate representing Common Stock issued upon conversion of a Note shall bear a legend in substantially the following form (unless such Common Stock has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or such Common Stock has been issued upon conversion of a Note that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer, or pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, or unless otherwise agreed by the Company with written notice thereof to the Trustee and any transfer agent for the Common Stock):

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT [INSERT FOR COMMON STOCK ISSUED IN EXCHANGE FOR INTERESTS IN A RULE 144A GLOBAL NOTE: IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,]

[INSERT FOR COMMON STOCK ISSUED IN EXCHANGE FOR INTERESTS IN AN AI GLOBAL NOTE: IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,] AND

(2) AGREES FOR THE BENEFIT OF PIONEER ENERGY SERVICES CORP. (THE “COMPANY”) THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE DATE THAT IS THE LATER OF (X) ONE YEAR AFTER THE LAST ORIGINAL ISSUE DATE OF THE SERIES OF NOTES UPON THE CONVERSION OF WHICH THIS SECURITY WAS ISSUED OR SUCH SHORTER PERIOD OF TIME AS PERMITTED BY RULE 144 UNDER THE SECURITIES ACT OR ANY SUCCESSOR PROVISION THERETO AND (Y) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW, EXCEPT:

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PRIOR TO THE REGISTRATION OF ANY TRANSFER IN ACCORDANCE WITH CLAUSE (2)(D) ABOVE, THE COMPANY AND THE TRANSFER AGENT FOR THE COMPANY’S COMMON STOCK RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH LEGAL OPINIONS, CERTIFICATIONS OR OTHER EVIDENCE AS MAY REASONABLY BE REQUIRED IN ORDER TO DETERMINE THAT THE PROPOSED TRANSFER IS BEING MADE IN COMPLIANCE WITH THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. NO REPRESENTATION IS MADE AS TO THE AVAILABILITY OF ANY EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

Any such Common Stock (x) as to which such restrictions on transfer shall have expired in accordance with their terms, (y) that has been transferred pursuant to a registration statement that has become or been declared effective under the Securities Act and that continues to be effective at the time of such transfer or (z) that has been sold pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act, may, upon surrender of the certificates representing such shares of Common Stock for exchange in accordance with the procedures of the transfer agent for the Common Stock, be exchanged for a new certificate or certificates for a like aggregate number of shares of Common Stock, which shall not bear the restrictive legend required by this Section 2.05(d).

(e) The Company shall cause any Restricted Note that is repurchased or owned by it to be surrendered to the Trustee for cancellation in accordance with Section 2.08.

(f) None of the Trustee, the Paying Agent or the Note Registrar shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any Note shall become mutilated or be destroyed, lost or stolen, the Company in its discretion may execute, and upon receipt of a Company Order the Trustee or an authenticating agent appointed by the Trustee shall authenticate and deliver, a new Note, bearing a registration number not contemporaneously outstanding, in exchange and substitution for the mutilated Note, or in lieu of and in substitution for the Note so destroyed, lost or stolen. In every case the applicant for a substituted Note shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless from any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, the applicant shall also furnish to the Company, to the Trustee and, if applicable, to such authenticating agent evidence to their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

The Trustee or such authenticating agent may authenticate any such substituted Note and deliver the same upon the receipt of such security or indemnity as the Trustee, the Company and, if applicable, such authenticating agent may require. No service charge shall be imposed by the Company, the Trustee, the Note Registrar, any co-Note Registrar or the Paying Agent upon the issuance of any substitute Note, but the Company may require a Holder to pay a sum sufficient to cover any documentary, stamp or similar issue or transfer tax required in connection therewith as a result of the name of the Holder of the new substitute Note being different from the name of the Holder of the old Note that became mutilated or was destroyed, lost or stolen. In case any Note that has matured or is about to mature or has been surrendered for required repurchase or is about to be converted in accordance with Article 14 shall become mutilated or be destroyed, lost or stolen, the Company may, in its sole discretion, instead of issuing a substitute Note, pay or authorize the payment of or convert or authorize the conversion of the same (without surrender thereof except in the case of a mutilated Note), as the case may be, if the applicant for such payment or conversion shall furnish to the Company, to the Trustee and, if applicable, to such authenticating agent such security or indemnity as may be required by them to save each of them harmless for any loss, liability, cost or expense caused by or connected with such substitution, and, in every case of destruction, loss or theft, evidence satisfactory to the Company, the Trustee and, if applicable, any Paying Agent or Conversion Agent evidence of their satisfaction of the destruction, loss or theft of such Note and of the ownership thereof.

Every substitute Note issued pursuant to the provisions of this Section 2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall constitute an additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be found at any time, and shall be entitled to all the benefits of (but shall be subject to all the limitations set

forth in) this Indenture equally and proportionately with any and all other Notes duly issued hereunder. To the extent permitted by law, all Notes shall be held and owned upon the express condition that the foregoing provisions are exclusive with respect to the replacement, payment, conversion or repurchase of mutilated, destroyed, lost or stolen Notes and shall preclude any and all other rights or remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement, payment, conversion or repurchase of negotiable instruments or other securities without their surrender.

Section 2.07. Temporary Notes. Pending the preparation of Physical Notes, the Company may execute and the Trustee or an authenticating agent appointed by the Trustee shall, upon written request of the Company, authenticate and deliver temporary Notes (printed or lithographed). Temporary Notes shall be issuable in any authorized denomination, and substantially in the form of the Physical Notes but with such omissions, insertions and variations as may be appropriate for temporary Notes, all as may be determined by the Company. Every such temporary Note shall be executed by the Company and authenticated by the Trustee or such authenticating agent upon the same conditions and in substantially the same manner, and with the same effect, as the Physical Notes. Without unreasonable delay, the Company shall execute and deliver to the Trustee or such authenticating agent Physical Notes (other than any Global Note) and thereupon any or all temporary Notes (other than any Global Note) may be surrendered in exchange therefor, at each office or agency maintained by the Company pursuant to Section 4.02 and the Trustee or such authenticating agent shall authenticate and deliver in exchange for such temporary Notes an equal aggregate principal amount of Physical Notes. Such exchange shall be made by the Company at its own expense and without any charge therefor. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits and subject to the same limitations under this Indenture as Physical Notes authenticated and delivered hereunder.

Section 2.08. Cancellation of Notes Paid, Converted, Etc. The Company shall cause all Notes surrendered for the purpose of payment, repurchase, registration of transfer or exchange or conversion, if surrendered to any Person other than the Trustee (including any of the Company’s agents, Subsidiaries or Affiliates), to be surrendered to the Trustee for cancellation. All Notes delivered to the Trustee shall be canceled promptly by it. Except for any Notes surrendered for registration of transfer or exchange, or as otherwise expressly permitted by any of the provisions of this Indenture, no Notes shall be authenticated in exchange for any Notes surrendered to the Trustee for cancellation. The Trustee shall dispose of canceled Notes in accordance with its customary procedures and, after such disposition, shall deliver a certificate of such disposition to the Company, at the Company’s written request in a Company Order.

Section 2.09. CUSIP Numbers. The Company in issuing the Notes may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in all notices issued to Holders as a convenience to such Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or on such notice and that reliance may be placed only on the other identification numbers printed on the Notes. The Company shall promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

Section 2.10. Repurchases. The Company may, to the extent permitted by law, and directly or indirectly (regardless of whether such Notes are surrendered to the Company), repurchase Notes in the open market or otherwise, whether by the Company or its Subsidiaries or through a private or public tender or exchange offer or through counterparties to private agreements, including by cash-settled swaps or other derivatives. The Company shall cause any Notes so repurchased (other than Notes repurchased pursuant to cash-settled swaps or other derivatives) to be surrendered to the Trustee for cancellation in accordance with Section 2.08 and such Notes shall no longer be considered outstanding under this Indenture upon their repurchase.

Section 2.11. Equity Voting Rights. Each Holder shall have the voting and other rights in respect of Common Stock as set forth in Article 13.

ARTICLE 3

SATISFACTION AND DISCHARGE

Section 3.01. Satisfaction and Discharge. This Indenture shall upon request of the Company contained in an Officers’ Certificate cease to be of further effect, and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) (i) all Notes theretofore authenticated and delivered (other than Notes which have been destroyed, lost or stolen and which have been replaced, paid or converted as provided in Section 2.06) have been delivered to the Trustee for cancellation; or (ii) the Company has deposited with the Trustee or delivered to Holders, as applicable, after the Notes have become due and payable, whether on the Maturity Date, any Fundamental Change Repurchase Date, upon conversion or otherwise, cash or shares of Common Stock, as applicable, sufficient to pay all of the outstanding Notes and all other sums due and payable under this Indenture by the Company or satisfy the Company’s Conversion Obligation or Mandatory Conversion Obligation, as applicable; and (b) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 7.06 shall survive.

ARTICLE 4

PARTICULAR COVENANTS OF THE COMPANY

Section 4.01. Payment of Principal and Interest. The Company covenants and agrees that it will cause to be paid the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued interest on, each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.

Section 4.02. Maintenance of Office or Agency. The Company will maintain in the contiguous United States of America, an office or agency where the Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase (“Paying Agent”) or for conversion (“Conversion Agent”) 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 shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee in the contiguous United States of America.

The Company may also from time to time designate as co-Note Registrars 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 that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the contiguous United States of America, 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 terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.

The Company hereby initially designates the Trustee as the Paying Agent, Note Registrar, Custodian and Conversion Agent and the Corporate Trust Office as the office or agency in the contiguous United States of America where Notes may be surrendered for registration of transfer or exchange or for presentation for payment or repurchase or for conversion and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served.

Section 4.03. Appointments to Fill Vacancies in Trustee’s Office. The Company, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.09, a Trustee, so that there shall at all times be a Trustee hereunder.

Section 4.04. Provisions as to Paying Agent. (a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of Section 2.03(d) and this Section 4.04:

(i) that it will hold all sums held by it as such agent for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued interest that has not been paid on, the Notes in trust for the benefit of the Holders of the Notes;

(ii) that it will give the Trustee prompt notice of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued interest that has not been paid on, the Notes when the same shall be due and payable; and

(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

Subject to Section 2.03(d), the Company shall, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued interest that has not been paid on, the Notes, deposit with the Paying Agent a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) or accrued interest

that has not been paid , and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of any failure to take such action; provided that if such deposit is made on the due date, such deposit must be received by the Paying Agent by 11:00 a.m., New York City time, on such date.

(b) If the Company shall act as its own Paying Agent, subject to Section 2.03(d), it will, on or before each due date of the principal (including the Fundamental Change Repurchase Price, if applicable) of, and accrued interest that has not been paid on, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such principal (including the Fundamental Change Repurchase Price, if applicable) and accrued interest that has not been paid so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued interest that has not been paid on, the Notes when the same shall become due and payable.

(c) Anything in this Section 4.04 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay, cause to be paid or deliver to the Trustee all sums or amounts held in trust by the Company or any Paying Agent hereunder as required by this Section 4.04, such sums or amounts to be held by the Trustee upon the trusts herein contained and upon such payment or delivery by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability but only with respect to such sums or amounts.

(d) Any money and shares of Common Stock deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, accrued interest that has not been paid on and the consideration due upon conversion of any Note and remaining unclaimed for two years after such principal (including the Fundamental Change Repurchase Price, if applicable), interest or consideration due upon conversion has become due and payable shall be paid to the Company, subject to any applicable abandoned property law, on request of the Company contained in an Officers’ Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, 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 shares of Common Stock, and all liability of the Company as trustee thereof, shall 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 a newspaper published in the English language, customarily published on each Business Day and of general circulation in The Borough of Manhattan, The City of New York, notice that such money and shares of Common Stock remain unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money and shares of Common Stock then remaining will be repaid or delivered to the Company.

Section 4.05. Existence. Subject to Article 11, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 4.06. Rule 144A Information Requirement and Annual Reports. (a) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company shall, so long as any of the Notes or any shares of Common Stock issuable upon conversion thereof shall, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and, upon written request, any Holder, beneficial owner or prospective purchaser of such Notes or any shares of Common Stock issuable upon conversion of such Notes, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or shares of Common Stock pursuant to Rule 144A. The Company shall take such further action as any Holder or beneficial owner of such Notes or such Common Stock may reasonably request to the extent from time to time required to enable such Holder or beneficial owner to sell such Notes or shares of Common Stock in accordance with Rule 144A, as such rule may be amended from time to time.

(b) The Company shall file with the Trustee, within 15 days after the same are required to be filed with the Commission, copies of any documents or reports that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to any grace period provided by Rule 12b-25 under the Exchange Act). Any such document or report that the Company files with the Commission via the Commission’s EDGAR system shall be deemed to be filed with the Trustee for purposes of this Section 4.06(b) at the time such documents are filed via the EDGAR system. The Trustee shall have no liability or responsibility for the content, filing or timeliness of any report delivered or filed under or in connection with this Indenture or the transactions contemplated thereunder.

(c) Delivery of the reports and documents described in subsection (b) above to the Trustee is for informational purposes only, and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely on an Officers’ Certificate).

Section 4.07. Stay, Extension and Usury Laws. The Company covenants (to the extent that it may lawfully do so) that it shall 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 or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and the Company (to the extent 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 had been enacted.

Section 4.08. Compliance Certificate; Statements as to Defaults. The Company shall deliver to the Trustee within 90 days after the end of each fiscal year of the Company (beginning with the fiscal year ending on December 31, 2020) an Officers’ Certificate stating whether the signers thereof have knowledge of any failure by the Company to comply with all conditions and covenants then required to be performed under this Indenture and, if so, specifying each such failure and the nature thereof.

In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event within 30 days after an Officer of the Company has actual knowledge of the occurrence of any Event of Default or Default, an Officers’ Certificate setting forth the details of such Event of Default or Default, its status and the action that the Company is taking or proposing to take in respect thereof.

Section 4.09. Further Instruments and Acts. Upon request of the Trustee, the Company will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purposes of this Indenture.

Section 4.10 Amendments or Waivers of ABL Credit Documents or Senior Secured Notes Documents. The Company shall not, and shall not permit any of its Subsidiaries to, agree to any refinancing, replacement, amendment, restatement, supplement or other modification to, or waiver of, any ABL Credit Document or Senior Secured Notes Document (including, for the avoidance of doubt, the Intercreditor Agreement) that would (a) restrict the Company from making payments in respect of the Notes or otherwise performing its obligations under this Indenture, in each case, that would otherwise be permitted under such ABL Credit Document or Senior Secured Notes Document as in effect on the date hereof, (b) increase the amount of cash interest payable on the Senior Secured Notes on or prior to the first anniversary of the date hereof or (c) amend or modify any provisions regarding the incurrence, amount, security or priority of Additional Notes Collateral Debt (as defined in the Intercreditor Agreement). The Company shall not fail to deliver notice to the trustee under the Senior Secured Notes Indenture to direct the capitalization of interest as provided in the Senior Secured Notes Indenture.

Section 4.11 Certain Covenants Under Senior Secured Notes Indenture. The Company shall comply with the covenants set forth in Sections 5.01 (Debt) and 5.02 (Liens) of the Senior Secured Notes Indenture as in effect as of the date hereof, without giving effect to any amendment, restatement, supplement or other modification thereto, waiver or termination thereof, after the date hereof, in each case, as if such covenants were fully set forth herein, mutatis mutandis; provided that, for purposes hereof, the reference in Section 5.01(c) and (n) of the Senior Secured Notes Indenture to $2,500,000 and $5,000,000, respectively, shall be deemed to be $2,750,000 and $5,500,000, respectively.

ARTICLE 5

LISTS OF HOLDERS AND REPORTS BY THE COMPANY AND THE TRUSTEE

Section 5.01. Lists of Holders. The Company covenants and agrees that it will furnish or cause to be furnished to the Trustee, semi-annually, not more than 15 days after each May 1 and November 1 in each year beginning with November 1, 2020, and at such other times as the Trustee may request in writing, within 30 days after receipt by the Company of any such request (or such lesser time as the Trustee may reasonably request in order to enable it to timely provide any notice to be provided by it hereunder), a list in such form as the Trustee may reasonably require of the names and addresses of the Holders as of a date not more than 15 days (or such other date as the Trustee may reasonably request in order to so provide any such notices) prior to the time such information is furnished, except that no such list need be furnished so long as the Trustee is acting as Note Registrar.

Section 5.02. Preservation and Disclosure of Lists. The Trustee shall preserve, in as current a form as is reasonably practicable, all information as to the names and addresses of the Holders contained in the most recent list furnished to it as provided in Section 5.01 or maintained by the Trustee in its capacity as Note Registrar, if so acting. The Trustee may destroy any list furnished to it as provided in Section 5.01 upon receipt of a new list so furnished.

ARTICLE 6

DEFAULTS AND REMEDIES

Section 6.01. Events of Default. Each of the following events shall be an “Event of Default” with respect to the Notes:

(a) default in any payment of interest on any Note when due and payable, and the default continues for a period of five (5) Business Days;

(b) default in the payment of principal of any Note when due and payable on the Maturity Date, upon any required repurchase, upon declaration of acceleration or otherwise;

(c) failure by the Company to comply with its obligation to convert the Notes in accordance with this Indenture if such failure continues for five (5) Business Days;

(d) failure by the Company to issue a Fundamental Change Company Notice in accordance with Section 15.02(c) when due if such failure continues for five (5) Business Days;

(e) failure by the Company to comply with its obligations under Article 11;

(f) failure by the Company to comply with its obligations under Sections 4.05, 4.10, 4.11, 14.04 and 14.08;

(g) failure by the Company for thirty (30) days after written notice from the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture;

(h) default by the Company or any Subsidiary of the Company with respect to any indenture, mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced, any indebtedness for money borrowed in excess of $15,000,000 (or its foreign currency equivalent) in the aggregate of the Company and/or any such Subsidiary, whether such indebtedness now exists or shall hereafter be created, (i) resulting in such indebtedness becoming or being declared due and payable or (ii) constituting a failure to pay the principal or interest of any such debt when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise;

(i) a final judgment or judgments for the payment of $15,000,000 (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) in the aggregate rendered against the Company or any Subsidiary of the Company, which judgment is not discharged, bonded, paid, waived or stayed thirty (30) days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished;

(j) the Company or any Significant Subsidiary shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to the Company or any such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or any such Significant Subsidiary or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

(k) an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty (60) consecutive days.

Section 6.02. Acceleration; Rescission and Annulment. If one or more Events of Default shall have occurred and be continuing (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), then, and in each and every such case (other than an Event of Default specified in Section 6.01(j) or Section 6.01(k) with respect to the Company or any of its Significant Subsidiaries), unless the principal of all of the Notes shall have already become due and payable, either the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding determined in accordance with Section 8.04, by notice in writing to the Company (and to the Trustee if given by Holders), may declare 100% of the aggregate principal amount of, and any accrued interest that has not been paid on, all the outstanding Notes to be due and payable immediately, and upon any such declaration the same shall become and shall automatically be immediately due and payable, anything contained in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default specified in Section 6.01(j) or Section 6.01(k) with respect to the Company or any of its Significant Subsidiaries occurs and is continuing, an amount in cash per $1,000 principal amount of Notes equal to the greater of (x) $1,000, plus any accrued interest that has not been paid on such principal amount and (y) the amount to be received by holders of Common Stock in such event per share multiplied by the Conversion Rate on the date such Event of Default, as determined in good faith by the Board of Directors, shall become and shall automatically be immediately due and payable.

The immediately preceding paragraph, however, is subject to the conditions that if, at any time after the principal of the Notes shall have been so declared due and payable, and before any judgment or decree for the payment of the monies due shall have been obtained or entered as hereinafter provided, the Company shall pay or shall deposit with the Trustee a sum sufficient to

pay installments of accrued interest that has not been paid upon all Notes and the principal of any and all Notes that shall have become due otherwise than by acceleration (with interest on overdue installments of accrued interest that has not been paid to the extent that payment of such interest is enforceable under applicable law, and on such principal at the rate borne by the Notes at such time, plus two (2) percent, from the due date thereof) and amounts due to the Trustee pursuant to Section 7.06, and if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) any and all existing Events of Default under this Indenture, other than the nonpayment of the principal of and accrued interest that has not been paid , if any, on Notes that shall have become due solely by such acceleration, shall have been cured or waived pursuant to Section 6.08, then and in every such case (except as provided in the immediately succeeding sentence) the Holders of a majority in aggregate principal amount of the Notes then outstanding, by written notice to the Company and to the Trustee, may waive all Defaults or Events of Default with respect to the Notes and rescind and annul such declaration and its consequences and 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 or rescission and annulment shall extend to or shall affect any subsequent Default or Event of Default, or shall impair any right consequent thereon. Notwithstanding anything to the contrary herein, no such waiver or rescission and annulment shall extend to or shall affect any Default or Event of Default resulting from (i) the nonpayment of the principal (including the Fundamental Change Repurchase Price, if applicable) of, or accrued interest that has not been paid on, any Notes, (ii) a failure to repurchase any Notes when required or (iii) a failure to pay or deliver, as the case may be, the consideration due upon conversion of the Notes.

Section 6.03. Payments of Notes on Default; Suit Therefor. If an Event of Default described in clause (a) or (b) of Section 6.01 shall have occurred, the Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of the Notes, the whole amount then due and payable on the Notes for principal and interest, if any, with interest on any overdue principal and interest, if any, at the rate borne by the Notes at such time, plus two percent, and, in addition thereto, such further amount as shall be sufficient to cover any amounts due to the Trustee under Section 7.06. If the Company shall fail to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company or any other obligor upon the Notes and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any other obligor upon the Notes, wherever situated.

In the event there shall be pending proceedings for the bankruptcy or for the reorganization of the Company or any other obligor on the Notes under Title 11 of the United States Code, or any other applicable law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Company or such other obligor, the property of the Company or such other obligor, or in the event of any other judicial proceedings relative to the Company or such other obligor upon the Notes, or to the creditors or property of the Company or such other obligor, the Trustee, irrespective of whether the principal of the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the

Trustee shall have made any demand pursuant to the provisions of this Section 6.03, shall be entitled and empowered, by intervention in such proceedings or otherwise, to file and prove a claim or claims for the whole amount of principal and accrued interest that has not been paid , if any, in respect of the Notes, and, in case of any judicial proceedings, to file such proofs of claim and other papers or documents and to take such other actions as it may deem necessary or advisable in order to have the claims of the Trustee (including any claim for the compensation, reasonable expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceedings relative to the Company or any other obligor on the Notes, its or their creditors, or its or their property, and to collect and receive any monies or other property payable or deliverable on any such claims, and to distribute the same after the deduction of any amounts due to the Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy or reorganization, liquidator, custodian or similar official is hereby authorized by each of the Holders to make such payments to the Trustee, as administrative expenses, 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 it for compensation, reasonable expenses, advances and disbursements, including agents and counsel fees, reasonable expenses, advances and disbursements, and including any other amounts due to the Trustee under Section 7.06, incurred by it up to the date of such distribution. To the extent that such payment of compensation, reasonable expenses, advances and disbursements out of the estate in any such proceedings 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, monies, securities and other property that the Holders of the Notes may be entitled to receive in such proceedings, 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 such Holder or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Trustee without the possession of any of the Notes, or the production thereof at any trial or other proceeding relative thereto, and any such suit or proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation, reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Notes.

In any proceedings brought by the Trustee (and in any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be a party) the Trustee shall be held to represent all the Holders of the Notes, and it shall not be necessary to make any Holders of the Notes parties to any such proceedings.

In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of any waiver pursuant to Section 6.08 or any rescission and annulment pursuant to Section 6.02 or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Company,

the Holders and the Trustee shall, subject to any determination in such proceeding, be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Company, the Holders and the Trustee shall continue as though no such proceeding had been instituted.

Section 6.04. Application of Monies Collected by Trustee. Any monies collected by the Trustee pursuant to this Article 6 with respect to the Notes shall be applied in the following order, at the date or dates fixed by the Trustee for the distribution of such monies, upon presentation of the several Notes, and stamping thereon the payment, if only partially paid, and upon surrender thereof, if fully paid:

First, to the payment of all amounts due the Trustee under Section 7.06;

Second, in case the principal of the outstanding Notes shall not have become due and be unpaid, to the payment of interest on, and any cash due upon conversion of, the Notes in default in the order of the date due of the payments of such interest and cash due upon conversion, as the case may be, with interest (to the extent that such interest has been collected by the Trustee) upon such overdue payments accruing from the due date for such overdue payments at the rate borne by the Notes at such time, plus two percent, such payments to be made ratably to the Persons entitled thereto;

Third, in case the principal of the outstanding Notes shall have become due, by declaration or otherwise, and be unpaid, to the payment of the whole amount (including, if applicable, the payment of the Fundamental Change Repurchase Price and any cash due upon conversion) then owing and unpaid upon the Notes for principal and interest, if any, with interest on the overdue principal and, to the extent that such interest has been collected by the Trustee, upon overdue installments of interest accruing from the due date for such overdue installments of interest at the rate borne by the Notes at such time plus two percent, and in case such monies shall be insufficient to pay in full the whole amounts so due and unpaid upon the Notes, then to the payment of such principal (including, if applicable, the Fundamental Change Repurchase Price and any cash due upon conversion) and interest without preference or priority of principal over interest, or of interest over principal or of any installment of interest over any other installment of interest, or of any Note over any other Note, ratably to the aggregate of such principal (including, if applicable, the Fundamental Change Repurchase Price and any cash due upon conversion) and accrued interest that has not been paid; and

Fourth, to the payment of the remainder, if any, to the Company.

Section 6.05. Proceedings by Holders. Except to enforce the right to receive payment of principal (including, if applicable, the Fundamental Change Repurchase Price) or interest when due, or the right to receive payment or delivery of the consideration due upon conversion, no Holder of any Note shall have any right by virtue of or by availing of any provision of this Indenture to institute any suit, action or proceeding in equity or at law upon or under or with respect to this Indenture, or for the appointment of a receiver, trustee, liquidator, custodian or other similar official, or for any other remedy hereunder, unless:

(a) such Holder previously shall have given to the Trustee written notice of an Event of Default and of the continuance thereof, as herein provided;

(b) Holders of at least 25% in aggregate principal amount of the Notes then outstanding shall have made written request upon the Trustee to institute such action, suit or proceeding in its own name as Trustee hereunder;

(c) such Holders shall have offered to the Trustee such security or indemnity satisfactory to it in its reasonable discretion against any loss, liability or expense to be incurred therein or thereby;

(d) the Trustee for 60 days after its receipt of such notice, request and offer of such security or indemnity, shall have neglected or refused to institute any such action, suit or proceeding; and

(e) no direction that, in the opinion of the Trustee, is inconsistent with such written request shall have been given to the Trustee by the Holders of a majority of the aggregate principal amount of the Notes then outstanding within such 60-day period pursuant to Section 6.08,

it being understood and intended, and being expressly covenanted by the taker and Holder of every Note with every other taker and Holder and the Trustee that no one or more Holders shall have any right in any manner whatever by virtue of or by availing of any provision of this Indenture to affect, disturb or prejudice the rights of any other Holder, or to obtain or seek to obtain priority over or preference to any other such Holder, or to enforce any right under this Indenture, except in the manner herein provided and for the equal, ratable and common benefit of all Holders (except as otherwise provided herein). For the protection and enforcement of this Section 6.05, each and every Holder and the Trustee shall be entitled to such relief as can be given either at law or in equity.

Notwithstanding any other provision of this Indenture and any provision of any Note, each Holder shall have the right to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) any accrued interest that has not been paid on, and (z) the consideration due upon conversion of, such Note, on or after the respective due dates expressed or provided for in such Note or in this Indenture, or to institute suit for the enforcement of any such payment or delivery, as the case may be.

Section 6.06. Proceedings by Trustee. In case of an Event of Default, the Trustee may in its discretion proceed to protect and enforce the rights vested in it by this Indenture by such appropriate judicial proceedings as are necessary to protect and enforce any of such rights, either by suit in equity or by action at law or by proceeding in bankruptcy or otherwise, whether for the specific enforcement of any covenant or agreement contained in this Indenture or in aid of the exercise of any power granted in this Indenture, or to enforce any other legal or equitable right vested in the Trustee by this Indenture or by law.

Section 6.07. Remedies Cumulative and Continuing. Except as provided in the last paragraph of Section 2.06, all powers and remedies given by this Article 6 to the Trustee or to the Holders shall, to the extent permitted by law, be deemed cumulative and not exclusive of any thereof or of any other powers and remedies available to the Trustee or the Holders of the Notes, by judicial proceedings or otherwise, to enforce the performance or observance of the covenants and agreements contained in this Indenture, and no delay or omission of the Trustee or of any Holder of any of the Notes to exercise any right or power accruing upon any Default or Event of Default shall impair any such right or power, or shall be construed to be a waiver of any such Default or Event of Default or any acquiescence therein; and, subject to the provisions of Section 6.05, every power and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holders.

Section 6.08. Direction of Proceedings and Waiver of Defaults by Majority of Holders. The Holders of a majority of the aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Notes; provided, however, that (a) such direction shall not be in conflict with any rule of law or with this Indenture, and (b) the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. The Trustee may refuse to follow any direction that it determines is unduly prejudicial to the rights of any other Holder (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders) or that would involve the Trustee in personal liability. The Holders of a majority in aggregate principal amount of the Notes at the time outstanding determined in accordance with Section 8.04 may on behalf of the Holders of all of the Notes waive any past Default or Event of Default hereunder and its consequences except (i) a default in the payment of any accrued interest that has not been paid on, or the principal (including any Fundamental Change Repurchase Price) of, the Notes when due that has not been cured pursuant to the provisions of Section 6.01, (ii) a failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iii) a default in respect of a covenant or provision hereof which under Article 10 cannot be modified or amended without the consent of each Holder of an outstanding Note affected. Upon any such waiver the Company, the Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon. Whenever any Default or Event of Default hereunder shall have been waived as permitted by this Section 6.08, said Default or Event of Default shall for all purposes of the Notes and this Indenture be deemed to have been cured and to be not continuing; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

Section 6.09. Notice of Defaults. The Trustee shall, within 90 days after the occurrence and continuance of a Default of which a Responsible Officer has actual knowledge, deliver to all Holders notice of all Defaults known to a Responsible Officer, unless such Defaults shall have been cured or waived before the giving of such notice; provided that, except in the case of a Default in the payment of the principal of (including the Fundamental Change Repurchase Price, if applicable), or accrued interest that has not been paid on, any of the Notes or a Default in the payment or delivery of the consideration due upon conversion, the Trustee shall be protected in withholding such notice if and so long as a committee of Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Holders.

Section 6.10. Undertaking to Pay Costs. All parties to this Indenture agree, and each Holder of any Note by its acceptance thereof shall be deemed to have agreed, that any court may, in its discretion, require, 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 Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section 6.10 (to the extent permitted by law) shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Notes at the time outstanding determined in accordance with Section 8.04, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, or any accrued interest that has not been paid on, any Note (including, but not limited to, the Fundamental Change Repurchase Price, if applicable) on or after the due date expressed or provided for in such Note or to any suit for the enforcement of the right to convert any Note, or receive the consideration due upon conversion, in accordance with the provisions of Article 14.

ARTICLE 7

CONCERNING THE TRUSTEE

Section 7.01. Duties and Responsibilities of Trustee. The Trustee, prior to the occurrence of an Event of Default and after the curing or waiver of all Events of Default that may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In the event an Event of Default has occurred and is continuing, the Trustee shall 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; provided that if an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any of the Holders unless such Holders have offered to the Trustee indemnity or security satisfactory to it in its reasonable discretion against any loss, liability or expense that might be incurred by it in compliance with such request or direction.

No provision of this Indenture shall be construed to relieve the Trustee from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that:

(a) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default that may have occurred:

(i) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions that by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);

(b) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer or Officers of the Trustee, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts;

(c) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority of the aggregate principal amount of the Notes at the time outstanding determined as provided in Section 8.04 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

(d) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;

(e) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Note Registrar with respect to the Notes;

(f) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred, unless a Responsible Officer of the Trustee had actual knowledge of such event;

(g) in the absence of written investment direction from the Company, all cash received by the Trustee shall be placed in a non-interest bearing trust account, and in no event shall the Trustee be liable for the selection of investments or for investment losses incurred thereon or for losses incurred as a result of the liquidation of any such investment prior to its maturity date or the failure of the party directing such investments prior to its maturity date or the failure of the party directing such investment to provide timely written investment direction, and the Trustee shall have no obligation to invest or reinvest any amounts held hereunder in the absence of such written investment direction from the Company; and

(h) in the event that the Trustee is also acting as Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent hereunder, the rights, privileges, powers, protections, benefits, indemnities and immunities afforded to the Trustee pursuant to this Article 7 shall also be afforded to such Custodian, Note Registrar, Paying Agent, Conversion Agent or transfer agent.

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers.

Section 7.02. Reliance on Documents, Opinions, Etc. Except as otherwise provided in Section 7.01:

(a) the Trustee may conclusively rely and shall be fully protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, note, coupon or other paper or document believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

(b) before the Trustee acts or refrains from acting on any request, direction, order or demand of the Company, it may require an Officers’ Certificate or an Opinion of Counsel or both; the Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel; and any Board Resolution may be evidenced to the Trustee by a copy thereof certified by the Secretary or an Assistant Secretary of the Company;

(c) the Trustee may consult with counsel and require an Opinion of Counsel and any advice of such counsel or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(d) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation;

(e) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, custodians, nominees or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent, custodian, nominee or attorney appointed by it with due care hereunder;

(f) the permissive rights of the Trustee enumerated herein shall not be construed as duties;

(g) the Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any Person authorized to sign an Officers’ Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded; and

(h) the Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.

In no event shall the Trustee be liable for any special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action other than any such loss or damage caused by the Trustee’s willful misconduct or gross negligence. The Trustee shall not be charged with knowledge of any Default or Event of Default with respect to the Notes, unless either (1) a Responsible Officer shall have actual knowledge of such Default or Event of Default or (2) written notice of such Default or Event of Default shall have been given to the Trustee by the Company or by any Holder of the Notes.

Section 7.03. No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the holders of the Notes and the Company having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.

Section 7.04. Trustee, Paying Agents, Conversion Agents or Note Registrar May Own Notes. The Trustee, any Paying Agent, any Conversion Agent or Note Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not the Trustee, Paying Agent, Conversion Agent or Note Registrar.

Section 7.05. Monies and Shares of Common Stock to Be Held in Trust. All monies and shares of Common Stock received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money and shares of Common Stock held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money or shares of Common Stock received by it hereunder except as may be agreed from time to time by the Company and the Trustee.

Section 7.06. Compensation and Expenses of Trustee. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually

agreed to in writing between the Trustee and the Company, and the Company will pay or reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture in any capacity thereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as shall have been caused by its gross negligence or willful misconduct. The Company also covenants to indemnify the Trustee in any capacity under this Indenture and any other document or transaction entered into in connection herewith and its agents and any authenticating agent for, and to hold them harmless against, any loss, claim, damage, liability or expense incurred without gross negligence or willful misconduct on the part of the Trustee, its officers, directors, agents or employees, or such agent or authenticating agent, as the case may be, and arising out of or in connection with the acceptance or administration of this Indenture or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim of liability in the premises. The obligations of the Company under this Section 7.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by the Trustee, except, subject to the effect of Section 6.04, funds held in trust herewith for the benefit of the Holders of particular Notes. The Trustee’s right to receive payment of any amounts due under this Section 7.06 shall not be subordinate to any other liability or indebtedness of the Company. The obligation of the Company under this Section 7.06 shall survive the satisfaction and discharge of this Indenture and the earlier resignation or removal of the Trustee. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The indemnification provided in this Section 7.06 shall extend to the officers, directors, agents and employees of the Trustee.

To secure the Company’s payment obligations in this Section 7.06, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.

The Company’s payment obligations pursuant to this Section 7.06 shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee and its agents and any authenticating agent incur expenses or render services after an Event of Default specified in Section 6.01(j) or Section 6.01(k) occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

Section 7.07. Officers’ Certificate as Evidence. Except as otherwise provided in Section 7.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officers’ Certificate delivered to the Trustee, and such Officers’ Certificate, in the absence of gross negligence or willful misconduct on the part of the Trustee, shall be full warrant to the Trustee for any action taken or omitted by it under the provisions of this Indenture upon the faith thereof.

Section 7.08. Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act (as if the Trust Indenture Act were applicable hereto) to act as such and has a combined capital and surplus of at least $50,000,000. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 7.09. Resignation or Removal of Trustee. (a) The Trustee may at any time resign by giving written notice of such resignation to the Company and by delivering notice thereof to the Holders. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment within 60 days after the giving of such notice of resignation to the Holders, the resigning Trustee may, upon ten Business Days’ notice to the Company and the Holders, petition any court of competent jurisdiction for the appointment of a successor trustee, or any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, subject to the provisions of Section 6.10, on behalf of himself or herself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

(b) In case at any time any of the following shall occur:

(i) the Trustee shall cease to be eligible in accordance with the provisions of Section 7.08 and shall fail to resign after written request therefor by the Company or by any such Holder, or

(ii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,

then, in either case, the Company may by a Board Resolution remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.10, any Holder who has been a bona fide holder of a Note or Notes for at least six months (or since the date of this Indenture) may, on behalf of himself or herself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

(c) The Holders of a majority in aggregate principal amount of the Notes at the time outstanding, as determined in accordance with Section 8.04, may at any time remove the Trustee and nominate a successor trustee that shall be deemed appointed as successor trustee unless within ten days after notice to the Company of such nomination the Company objects thereto, in which case the Trustee so removed or any Holder, upon the terms and conditions and otherwise as in Section 7.09(a) provided, may petition any court of competent jurisdiction for an appointment of a successor trustee.

(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 7.09 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.10.

Section 7.10. Acceptance by Successor Trustee. Any successor trustee appointed as provided in Section 7.09 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as Trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amounts then due it pursuant to the provisions of Section 7.06, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a senior claim to which the Notes are hereby made subordinate on all money or property held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 7.06.

No successor trustee shall accept appointment as provided in this Section 7.10 unless at the time of such acceptance such successor trustee shall be eligible under the provisions of Section 7.08.

Upon acceptance of appointment by a successor trustee as provided in this Section 7.10, each of the Company and the successor trustee, at the written direction and at the expense of the Company shall deliver or cause to be delivered notice of the succession of such trustee hereunder to the Holders. If the Company fails to deliver such notice within ten days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be delivered at the expense of the Company.

Section 7.11. Succession by Merger, Etc. Any corporation or other entity into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other entity succeeding to all or substantially all of the corporate

trust business of the Trustee (including the administration of this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that in the case of any corporation or other entity succeeding to all or substantially all of the corporate trust business of the Trustee such corporation or other entity shall be eligible under the provisions of Section 7.08.

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or authenticating agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or an authenticating agent appointed by such successor trustee may authenticate such Notes either in the name of any predecessor trustee hereunder or in the name of the successor trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor trustee or to authenticate Notes in the name of any predecessor trustee shall apply only to its successor or successors by merger, conversion or consolidation.

Section 7.12. Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable to the Company for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any officer that the Company has indicated to the Trustee should receive such application actually receives such application, unless any such officer shall have consented in writing to any earlier date), unless, prior to taking any such action (or the effective date in the case of any omission), the Trustee shall have received written instructions in accordance with this Indenture in response to such application specifying the action to be taken or omitted.

ARTICLE 8

CONCERNING THE HOLDERS

Section 8.01. Action by Holders. Whenever in this Indenture it is provided that the Holders of a specified percentage of the aggregate principal amount of the Notes may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action), the fact that at the time of taking any such action, the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of the Holders voting in favor thereof at any meeting of Holders duly called and held in accordance with the provisions of Article 9, or (c) by a combination of such instrument or instruments and any such record of such a meeting of

Holders. Whenever the Company or the Trustee solicits the taking of any action by the Holders of the Notes, the Company or the Trustee may, but shall not be required to, fix in advance of such solicitation, a date as the record date for determining Holders entitled to take such action. The record date if one is selected shall be not more than fifteen days prior to the date of commencement of solicitation of such action.

Section 8.02. Proof of Execution by Holders. Subject to the provisions of Section 7.01, Section 7.02 and Section 9.05, proof of the execution of any instrument by a Holder or its agent or proxy shall be sufficient if made in accordance with such reasonable rules and regulations as may be prescribed by the Trustee or in such manner as shall be satisfactory to the Trustee. The holding of Notes shall be proved by the Note Register or by a certificate of the Note Registrar. The record of any Holders’ meeting shall be proved in the manner provided in Section 9.06.

Section 8.03. Who Are Deemed Absolute Owners. The Company, the Trustee, any authenticating agent, any Paying Agent, any Conversion Agent and any Note Registrar may deem the Person in whose name a Note shall be registered upon the Note Register to be, and may treat it as, the absolute owner of such Note (whether or not such Note shall be overdue and notwithstanding any notation of ownership or other writing thereon made by any Person other than the Company or any Note Registrar) for the purpose of receiving payment of or on account of the principal (including any Fundamental Change Repurchase Price) of and (subject to Section 2.03) accrued interest that has not been paid on such Note, for conversion of such Note and for all other purposes; and neither the Company nor the Trustee nor any Paying Agent nor any Conversion Agent nor any Note Registrar shall be affected by any notice to the contrary. All such payments or deliveries so made to any Holder for the time being, or upon its order, shall be valid, and, to the extent of the sums or shares of Common Stock so paid or delivered, effectual to satisfy and discharge the liability for monies payable or shares deliverable upon any such Note. Notwithstanding anything to the contrary in this Indenture or the Notes following an Event of Default, any holder of a beneficial interest in a Global Note may directly enforce against the Company, without the consent, solicitation, proxy, authorization or any other action of the Depositary or any other Person, such holder’s right to exchange such beneficial interest for a Note in certificated form in accordance with the provisions of this Indenture.

Section 8.04. Company-Owned Notes Disregarded. In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company or by any Subsidiary thereof shall be disregarded and deemed not to be outstanding for the purpose of any such determination; provided that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, consent, waiver or other action only Notes that a Responsible Officer actually knows are so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for the purposes of this Section 8.04 if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to so act with respect to such Notes and that the pledgee is not the Company or a Subsidiary thereof. In the case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers’ Certificate listing and identifying all Notes, if any, known by the Company to be owned or held by or for the account of any of the above described Persons; and, subject to Section 7.01, the Trustee shall be entitled to accept such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any such determination.

Section 8.05. Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.01, of the taking of any action by the Holders of the percentage of the aggregate principal amount of the Notes specified in this Indenture in connection with such action, any Holder of a Note that is shown by the evidence to be included in the Notes the Holders of which have consented to such action may, by filing written notice with the Trustee at its Corporate Trust Office and upon proof of holding as provided in Section 8.02, revoke such action so far as concerns such Note. Except as aforesaid, any such action taken by the Holder of any Note shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Note and of any Notes issued in exchange or substitution therefor or upon registration of transfer thereof, irrespective of whether any notation in regard thereto is made upon such Note or any Note issued in exchange or substitution therefor or upon registration of transfer thereof.

ARTICLE 9

HOLDERS’ MEETINGS

Section 9.01. Purpose of Meetings. A meeting of Holders may be called at any time and from time to time pursuant to the provisions of this Article 9 for any of the following purposes:

(a) to give any notice to the Company or to the Trustee or to give any directions to the Trustee permitted under this Indenture, or to consent to the waiving of any Default or Event of Default hereunder (in each case, as permitted under this Indenture) and its consequences, or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article 6;

(b) to remove the Trustee and nominate a successor trustee pursuant to the provisions of Article 7;

(c) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.02; or

(d) to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Notes under any other provision of this Indenture or under applicable law.

Section 9.02. Call of Meetings by Trustee. The Trustee may at any time call a meeting of Holders to take any action specified in Section 9.01, to be held at such time and at such place as the Trustee shall determine. Notice of every meeting of the Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting and the establishment of any record date pursuant to Section 8.01, shall be delivered to Holders of such Notes. Such notice shall also be delivered to the Company. Such notices shall be delivered not less than 20 nor more than 90 days prior to the date fixed for the meeting.

Any meeting of Holders shall be valid without notice if the Holders of all Notes then outstanding are present in person or by proxy or if notice is waived before or after the meeting by the Holders of all Notes then outstanding, and if the Company and the Trustee are either present by duly authorized representatives or have, before or after the meeting, waived notice.

Section 9.03. Call of Meetings by Company or Holders. In case at any time the Company, pursuant to a Board Resolution, or the Holders of at least 10% of the aggregate principal amount of the Notes then outstanding, shall have requested the Trustee to call a meeting of Holders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have delivered the notice of such meeting within 20 days after receipt of such request, then the Company or such Holders may determine the time and the place for such meeting and may call such meeting to take any action authorized in Section 9.01, by delivering notice thereof as provided in Section 9.02.

Section 9.04. Qualifications for Voting. To be entitled to vote at any meeting of Holders a Person shall (a) be a Holder of one or more Notes on the record date pertaining to such meeting or (b) be a Person appointed by an instrument in writing as proxy by a Holder of one or more Notes on the record date pertaining to such meeting. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons entitled to vote at such meeting and their counsel and any representatives of the Trustee and its counsel and any representatives of the Company and its counsel.

Section 9.05. Regulations. Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders, in regard to proof of the holding of Notes and of the appointment of proxies, and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall think fit.

The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders as provided in Section 9.03, in which case the Company or the Holders calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Holders of a majority in aggregate principal amount of the Notes represented at the meeting and entitled to vote at the meeting.

Subject to the provisions of Section 8.04, at any meeting of Holders each Holder or proxyholder shall be entitled to one vote for each $1.00 principal amount of Notes held or represented by him or her; provided, however, that no vote shall be cast or counted at any meeting in respect of any Note challenged as not outstanding and ruled by the chairman of the meeting to be not outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Notes held by it or instruments in writing as aforesaid duly designating it as the proxy to vote on behalf of other Holders. Any meeting of Holders duly called pursuant to the provisions of Section 9.02 or Section 9.03 may be adjourned from time to time by the Holders of a majority of the aggregate principal amount of Notes represented at the meeting, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice.

Section 9.06. Voting. The vote upon any resolution submitted to any meeting of Holders shall be by written ballot on which shall be subscribed the signatures of the Holders or of their representatives by proxy and the outstanding aggregate principal amount of the Notes held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more Persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was delivered as provided in Section 9.02. The record shall show the aggregate principal amount of the Notes voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one of the duplicates shall be delivered to the Company and the other to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting.

Any record so signed and verified shall be conclusive evidence of the matters therein stated.

Section 9.07. No Delay of Rights by Meeting. Nothing contained in this Article 9 shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Notes.

ARTICLE 10

SUPPLEMENTAL INDENTURES

Section 10.01. Supplemental Indentures Without Consent of Holders. The Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for one or more of the following purposes:

(a) to cure any ambiguity, omission, defect or inconsistency;

(b) to provide for the assumption by a Successor Company of the obligations of the Company under this Indenture, and to provide for the equity voting and other rights provided for in Article 13 pursuant to Article 11;

(d) to secure the Notes;

(e) to add to the covenants or Events of Default of the Company for the benefit of the Holders or surrender any right or power conferred upon the Company;

(f) in connection with any Share Exchange Event, to provide that the Notes are convertible into Reference Property, subject to the provisions of Section 14.02, and make such related changes to the terms of the Notes to the extent expressly required by Section 14.07;

(g) to comply with the rules of any applicable securities depositary, including the Depositary, so long as such amendment does not adversely affect the rights of any Holder;

(h) to make any amendment to the provisions of this Indenture relating to the transfer and legending of Notes as permitted by this Indenture, including, without limitation to facilitate the issuance and administration of the Notes; provided, however, that such amendment does not adversely affect the rights of Holders;

(i) to appoint a successor trustee, paying agent, conversion agent or registrar with respect to the Notes; or

(j) to issue PIK Notes.

Upon the written request of the Company, the Trustee is hereby authorized to join with the Company in the execution of any such supplemental indenture, to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to, but may in its discretion, enter into any supplemental indenture that affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.

Any supplemental indenture authorized by the provisions of this Section 10.01 may be executed by the Company and the Trustee without the consent of the Holders of any of the Notes at the time outstanding, notwithstanding any of the provisions of Section 10.02.

Section 10.02. Supplemental Indentures with Consent of Holders. With the consent (evidenced as provided in Article 8) of the Holders of at least a majority of the aggregate principal amount of the Notes then outstanding (determined in accordance with Article 8 and including, without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes), the Company, when authorized by the resolutions of the Board of Directors and the Trustee, at the Company’s expense, may from time to time and at any time enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or any supplemental indenture or of modifying in any manner the rights of the Holders; provided, however, that, without the consent of the Holders of at least 85% of the aggregate principal amount of the Notes then outstanding (determined in accordance with Article 8 and including, without limitation, consents obtained in connection with a repurchase of, or tender or exchange offer for, Notes), no such supplemental indenture shall make any change to Section 4.10; provided further that without the consent of each Holder of an outstanding Note affected, no such supplemental indenture shall:

(a) reduce the amount of Notes whose Holders must consent to an amendment;

(b) reduce the rate of or extend the stated time for payment of interest on any Note;

(d) make any change that adversely affects the equity voting and other rights of the Holders provided for in Article 13;

(e) make any change that adversely affects the conversion rights of any Notes except in accordance with Article 14;

(f) reduce the Fundamental Change Repurchase Price of any Note or amend or modify in any manner adverse to the Holders the Company’s obligation to make such payments, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

(g) make any Note payable in a currency, or at a place of payment, other than that stated in the Note;

(h) change the ranking in priority of payment of the Notes; or

(i) make any change in this Article 10 that requires each Holder’s consent or in the provisions of Section 6.02 or Section 6.08 providing for waiver by the Holders.

Upon the written request of the Company, and upon the filing with the Trustee of evidence of the consent of Holders as aforesaid and subject to Section 10.05, the Trustee shall join with the Company in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture.

Holders do not need under this Section 10.02 to approve the particular form of any proposed supplemental indenture. It shall be sufficient if such Holders approve the substance thereof. After any such supplemental indenture becomes effective, the Company shall deliver to the Holders a notice briefly describing such supplemental indenture. However, the failure to give such notice to all the Holders, or any defect in the notice, will not impair or affect the validity of the supplemental indenture.

Section 10.03. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture pursuant to the provisions of this Article 10, this Indenture shall be and be deemed to be modified and amended in accordance therewith and the respective rights, limitation of rights, obligations, duties and immunities under this Indenture of the Trustee, the Company and the Holders shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

Section 10.04. Notation on Notes. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to the provisions of this Article 10 may, at the Company’s expense, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company or the Trustee shall so determine, new Notes

so modified as to conform, in the opinion of the Trustee and the Board of Directors, to any modification of this Indenture contained in any such supplemental indenture may, at the Company’s expense, be prepared and executed by the Company, authenticated by the Trustee (or an authenticating agent duly appointed by the Trustee pursuant to Section 17.10) and delivered in exchange for the Notes then outstanding, upon surrender of such Notes then outstanding.

Section 10.05. Evidence of Compliance of Supplemental Indenture to Be Furnished Trustee. In addition to the documents required by Section 17.05, the Trustee shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant hereto complies with the requirements of this Article 10 and is permitted or authorized by this Indenture.

ARTICLE 11

CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE

Section 11.01. Company May Consolidate, Etc. on Certain Terms. Subject to the provisions of Section 11.02, the Company shall not consolidate with, merge with or into, or sell, convey, transfer or lease all or substantially all of its properties and assets to another Person, unless:

(a) the resulting, surviving or transferee Person (the “Successor Company”), if not the Company, shall be a corporation 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 supplemental indenture all of the obligations of the Company under the Notes and this Indenture;

(b) the Holders shall be granted the same equity voting and other rights in respect of the Successor Company as are set forth in Sections 13.01 and 13.02 of this Indenture; and

(c) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture.

For purposes of this Section 11.01, the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of one or more Subsidiaries of the Company to another Person, which properties and assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties and assets of the Company on a consolidated basis, shall be deemed to be the sale, conveyance, transfer or lease of all or substantially all of the properties and assets of the Company to another Person.

Section 11.02. Successor Corporation to Be Substituted. In case of any such consolidation, merger, sale, conveyance, transfer or lease and upon the assumption by the Successor Company, by supplemental indenture, executed and delivered to the Trustee, of the due and punctual payment of the principal of and accrued interest that has not been paid on all of the Notes, the due and punctual delivery or payment, as the case may be, of any consideration due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company, such Successor Company (if

not the Company) shall succeed to and, except in the case of a lease of all or substantially all of the Company’s properties and assets, shall be substituted for the Company, with the same effect as if it had been named herein as the party of the first part. Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the Officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In the event of any such consolidation, merger, sale, conveyance or transfer (but not in the case of a lease), upon compliance with this Article 11 the Person named as the “Company” in the first paragraph of this Indenture (or any successor that shall thereafter have become such in the manner prescribed in this Article 11) may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture and the Notes.

In case of any such consolidation, merger, sale, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

Section 11.03. Opinion of Counsel to Be Given to Trustee. No such consolidation, merger, sale, conveyance, transfer or lease shall be effective unless the Successor Company (if any) shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, conveyance, transfer or lease, assumption and supplemental indenture complies with the provisions of this Article 11.

ARTICLE 12

IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

Section 12.01. Indenture and Notes Solely Corporate Obligations. No recourse for the payment of the principal of or accrued interest that has not been paid on any Note, nor for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company in this Indenture or in any supplemental indenture or in any Note, nor because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, employee, agent, Officer or director or Subsidiary, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes.

ARTICLE 13

EQUITY VOTING RIGHTS

Section 13.01 . Equity Voting Rights.

Except as may be otherwise expressly provided in the Certificate of Incorporation or as expressly required by the General Corporation Law of the State of Delaware, Holders shall be entitled, for so long as any Notes remain outstanding, to vote on all matters on which holders of Common Stock generally are entitled to vote (or, if any, to take action by written consent of the holders of Common Stock), voting together as a single class together with the shares of Common Stock and not as a separate class, on an As-Converted-to-Common Stock-Basis, at any annual or special meeting of holders of Common Stock of the Company and each Holder shall be entitled to such number of votes as such Holder would receive on an As-Converted-to-Common-Stock-Basis on the record date for such vote; provided, that, following the Initial Listing Date, such number of votes shall be limited if required in order to comply with any mandatorily applicable listing rule of the Relevant Exchange on which the Common Stock is listed unless compliance therewith has been waived by such Relevant Exchange. The Holders shall also be entitled to receive notice of any meeting of holders of Common Stock in accordance with the Certificate of Incorporation and bylaws of the Company. As used herein, “As-Converted-to-Common-Stock-Basis” means, with respect to a Holder, the number of votes equal to the largest number of whole shares of Common Stock (rounded down to the nearest whole share) such Holder would be entitled to, assuming that immediately prior to the applicable record date, with respect to an annual or special meeting of the Company’s holders of Common Stock, the Holder converted its Notes into Common Stock in accordance with Article 14 of this Indenture assuming Physical Settlement were applicable and ignoring for such purpose the operation of any Conversion Blocker as provided in Section 14.12.

Section 13.02. Inspection Rights. In addition, Holders shall have the same right of inspection of the books, accounts and other records of the Company which the holders of Common Stock have or may have under the General Corporation Law of the State of Delaware or the Company’s Certificate of Incorporation.

Section 13.03. Amendments to Certificate of Incorporation.

So long as any Notes remain outstanding, the Company shall not take any action, directly or indirectly (including without limitation by merger or recapitalization), to amend, alter or repeal, or adopt any provision as part of the Certificate of Incorporation or bylaws of the Company, or of any Successor Company, inconsistent with the rights of Holders under either of Section 13.01 or Section 13.02 of this Indenture, except upon the affirmative vote of the Holders of each Note then outstanding.

ARTICLE 14

CONVERSION OF NOTES

Section 14.01. Conversion of Notes.

(a) Conversion Privilege. Subject to and upon compliance with the provisions of this Article 14, each Holder of a Note shall have the right, at such Holder’s option, to convert all or any portion (if the portion to be converted is a minimum of $1.00 principal amount or an integral multiple in excess thereof) of such Note at any time prior to the close of business on the Business Day immediately preceding the first day of the Mandatory Conversion Period, at an initial conversion rate of 75.0000 shares of Common Stock (subject to adjustment as provided in this Article 14, the “Conversion Rate”) per $1,000 principal amount of Notes (subject to, and in accordance with, the settlement provisions of Section 14.02, the “Conversion Obligation”).

(b) Mandatory Conversion at Maturity. Each Note shall automatically convert (unless previously converted at the option of the Holder in accordance with Section 14.01(a), converted at the option of the Company pursuant to an Accelerated Mandatory Conversion, or repurchased at the option of the Holder in accordance with Article 15) on the Maturity Date (subject to postponement as a result of Market Disruption Events) (a “Mandatory Conversion”) at the Conversion Rate per $1,000 principal amount of Notes (subject to, and in accordance with, the settlement provisions of Section 14.02, the “Mandatory Conversion Obligation”).

(c) Accelerated Mandatory Conversion. (i) If the effective date of a Merger Event occurs prior to the Final Settlement Method Election Date, the Company, at its option, may cause all or any portion of the Notes to be automatically converted (an “Accelerated Mandatory Conversion”) at the Conversion Rate per $1,000 principal amount of Notes (subject to, and in accordance with, the settlement provisions of Section 14.02).

(ii) To exercise the Accelerated Mandatory Conversion right set forth in clause (i) above, the Company shall issue a press release for publication on the Dow Jones News Service or Bloomberg Business News (or if either such service is not available, a similar broadly disseminated news or press release service selected by the Company in good faith) prior to the open of business on the earlier of (x) the fifth Trading Day immediately following the effective date of such a Merger Event and (y) the Business Day immediately preceding the first day of the Mandatory Conversion Period, announcing such Accelerated Mandatory Conversion. The Company shall also give written notice to the Holders and the Trustee on the same day as the press release announcing the Company’s election to convert the Notes; provided that in the case of a Global Note, such notice shall be delivered in accordance with customary procedures of the Depositary. In the case of an Accelerated Mandatory Conversion, the Conversion Date shall be the date on which the Company issues such press release (the date of any such issuance, an “Accelerated Mandatory Conversion Date”).

(iii) In addition to any information required by applicable law or regulation, the press release and notice of an Accelerated Mandatory Conversion pursuant to Section 14.01(c)(ii) shall specify:

(A) the Accelerated Mandatory Conversion Date;

(B) the Conversion Rate;

(C) the Settlement Method by which the Company has elected to satisfy the Company’s conversion obligation in respect of the Accelerated Mandatory Conversion and, if applicable, the first Trading Day of the applicable Observation Period;

(D) that interest on the Notes to be converted shall cease to accrue on the Accelerated Mandatory Conversion Date; and

(E) in case any Note is to be converted in part only, the portion of the principal amount thereof to be converted and that on and after the Accelerated Mandatory Conversion Date, upon surrender of such Note, a new Note in principal amount equal to the unconverted portion thereof shall be issued.

(iv) On and after the Accelerated Mandatory Conversion Date, interest shall cease to accrue on the Notes called for an Accelerated Mandatory Conversion and all rights of Holders of such Notes shall terminate, except for the right to receive the shares of Common Stock and/or cash deliverable upon conversion thereof and, if the Accelerated Mandatory Conversion Date occurs following a Regular Record Date and prior to the corresponding Interest Payment Date, the right of the Holder of record on such Regular Record Date to receive the interest payable on the corresponding Interest Payment Date in cash. The Company shall pay in cash to the Holder receiving the conversion consideration any accrued interest that has not been paid on any Note subject to Accelerated Mandatory Conversion to, but excluding, the Accelerated Mandatory Conversion Date.

(v) Intentionally Omitted.

(vi) If fewer than all of the outstanding Notes are to be converted pursuant to this Section 14.01(c), the Trustee shall select the Notes or portions thereof of a Global Note or the Notes in certificated form to be converted (in principal amounts of $1.00 or multiples thereof) by lot or by another method the Trustee considers to be fair and appropriate (and, in such manner that complies with the requirements of the Depositary, if applicable). If any Note selected by the Trustee is submitted for conversion in part after such selection, the portion of the Note submitted for conversion shall be deemed (so far as may be possible) to be the portion selected for conversion.

Section 14.02. Conversion Procedure; Settlement Upon Conversion.

(a) Subject to this Section 14.02 and Section 14.07(a), upon conversion of any Note prior to the first day of the Mandatory Conversion Period, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of Notes being converted, cash (“Cash Settlement”) or shares of Common Stock, together with cash, if applicable, in lieu of delivering any fractional share of Common Stock in accordance with subsection (j) of this Section 14.02 (“Physical Settlement”), at its election, as set forth in this Section 14.02; provided that if the Listing Condition is not satisfied on the relevant Conversion Date, the Company shall be deemed to have elected Physical Settlement in respect of such conversion. If the Listing Condition becomes satisfied, or ceases to be satisfied, on any day, the

Company shall so notify the Holders, the Trustee and the Conversion Agent prior to the open of business on the third Business Day immediately following the date of such satisfaction or cessation. Subject to this Section 14.02 and Section 14.07(a), the Company shall satisfy its Mandatory Conversion Obligation by Cash Settlement or Physical Settlement, at its election, as set forth in this Section 14.02; provided that (x) if the Listing Condition is not satisfied as of the Final Settlement Method Election Date, the Company shall be deemed to have elected Physical Settlement in respect of all Mandatory Conversion Obligations and (y) if Physical Settlement applies (or is deemed to apply) and the Last Reported Sale Price per Share of Common Stock on the second Business Day immediately preceding the Maturity Date is less than the Conversion Price then, notwithstanding anything to the contrary in this Indenture, each $1,000 principal amount of Notes shall convert into an amount of cash equal to $1,000.

(i) All conversions pursuant to Section 14.01(b) shall be settled using the same Settlement Method. All conversions pursuant to Section 14.01(c) in connection with a particular Merger Event shall be settled using the same Settlement Method.

(ii) The Company shall use the same Settlement Method for all conversions pursuant to Section 14.01(a) with the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to any such conversions with different Conversion Dates.

(iii) If, in respect of any Conversion Date where the Listing Condition is satisfied on such date (or for all conversions pursuant to Section 14.01(b) where the Listing Condition is satisfied as of the Final Settlement Method Election Date), the Company elects to deliver a notice (the “Settlement Notice”) of the relevant Settlement Method in respect of such Conversion Date (or such conversions, as the case may be), the Company, through the Trustee, shall deliver such Settlement Notice to converting Holders no later than the close of business on the Trading Day immediately following the relevant Conversion Date (or, in the case of any conversions (x) pursuant to Section 14.01(b), no later than the Final Settlement Method Election Date or (y) pursuant to Section 14.01(c), in the relevant Accelerated Mandatory Conversion Notice). If the Listing Condition has been satisfied and the Company does not elect a Settlement Method prior to the deadline set forth in the immediately preceding sentence, the Company shall be deemed to have elected Physical Settlement in respect of its applicable Conversion Obligation or Mandatory Conversion Obligation, as the case may be. Such Settlement Notice shall specify the relevant Settlement Method.

(iv) The cash or shares of Common Stock in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:

(A) if the Company elects (or is deemed to have elected) to satisfy its Conversion Obligation in respect of such conversion by Physical Settlement, the Company shall deliver to the converting Holder in respect of each $1,000 principal amount of Notes being converted a number of shares of Common Stock equal to the Conversion Rate in effect on the Conversion Date (for the avoidance of doubt, subject to the proviso in the last sentence of Section 14.02(a)); and

(B) if the Company elects to satisfy its Conversion Obligation in respect of such conversion by Cash Settlement, the Company shall pay to the converting Holder in respect of each $1,000 principal amount of Notes being converted cash in an amount equal to the sum of the Daily Conversion Values for each of the 30 consecutive Trading Days during the related Observation Period.

(v) The Daily Conversion Values (if applicable) shall be determined by the Company promptly following the last day of the Observation Period. Promptly after such determination of the Daily Conversion Values and the amount of cash payable in lieu of delivering any fractional share of Common Stock, the Company shall notify the Trustee and the Conversion Agent (if other than the Trustee) of the Daily Conversion Values and the amount of cash payable in lieu of delivering fractional shares of Common Stock. The Trustee and the Conversion Agent (if other than the Trustee) shall have no responsibility for any such determination.

(b) Subject to Section 14.02(e), before any Holder of a Note shall be entitled to convert a Note pursuant to Section 14.01(a), such Holder shall (i) in the case of a Global Note, comply with the procedures of the Depositary in effect at that time and (ii) in the case of a Physical Note (1) complete, manually sign and deliver an irrevocable notice to the Conversion Agent as set forth in the Form of Notice of Conversion (or a facsimile thereof) (a “Notice of Conversion”) at the office of the Conversion Agent and state in writing therein the principal amount of Notes to be converted and the name or names (with addresses) in which such Holder wishes the certificate or certificates for any shares of Common Stock to be delivered upon settlement of the Conversion Obligation to be registered, (2) surrender such Notes, duly endorsed to the Company or in blank (and accompanied by appropriate endorsement and transfer documents), at the office of the Conversion Agent and (3) if required, furnish appropriate endorsements and transfer documents. The Trustee (and if different, the Conversion Agent) shall notify the Company of any conversion pursuant to this Article 14 on the Conversion Date for such conversion. No Notice of Conversion with respect to any Notes may be surrendered by a Holder thereof if such Holder has also delivered a Fundamental Change Repurchase Notice to the Company in respect of such Notes and has not validly withdrawn such Fundamental Change Repurchase Notice in accordance with Section 15.03.

If more than one Note shall be surrendered for conversion at one time by the same Holder, the Conversion Obligation with respect to such Notes shall be computed on the basis of the aggregate principal amount of the Notes (or specified portions thereof to the extent permitted thereby) so surrendered.

(c) A Note shall be deemed to have been converted immediately prior to the close of business on the relevant Conversion Date. Except as set forth in Section 14.07(a), the Company shall pay or deliver, as the case may be, the consideration due in respect of the Conversion Obligation on the second Business Day immediately following the relevant Conversion Date, if the Company elects (or is deemed to have elected) Physical Settlement, or on the second Business Day immediately following the last Trading Day of the Observation Period, in the case of any other Settlement Method. If any shares of Common Stock are due to a converting Holder, the Company shall issue or cause to be issued, and deliver (if applicable) to the converting Holder, or such Holder’s nominee or nominees, the full number of shares of Common Stock to which such Holder shall be entitled, in book-entry format through the Depositary, in satisfaction of the Company’s Conversion Obligation.

(d) In case any Note shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to or upon the written order of the Holder of the Note so surrendered a new Note or Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Note, without payment of any service charge by the converting Holder but, if required by the Company or Trustee, with payment of a sum sufficient to cover any documentary, stamp or similar issue or transfer tax or similar governmental charge required by law or that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such conversion being different from the name of the Holder of the old Notes surrendered for such conversion.

(e) If a Holder submits a Note for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of Common Stock upon conversion, unless the tax is due because the Holder requests such shares to be issued in a name other than the Holder’s name, in which case the Holder shall pay that tax. The Conversion Agent may refuse to deliver the certificates representing the shares of Common Stock being issued in a name other than the Holder’s name until the Trustee receives a sum sufficient to pay any tax that is due by such Holder in accordance with the immediately preceding sentence.

(f) Except as provided in Section 14.03, no adjustment shall be made for dividends on any shares of Common Stock issued upon the conversion of any Note as provided in this Article 14.

(g) Upon the conversion of an interest in a Global Note, the Trustee, or the Custodian at the direction of the Trustee, shall make a notation on such Global Note as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversion of Notes effected through any Conversion Agent other than the Trustee.

(h) Upon conversion pursuant to Section 14.01(a), a Holder shall not receive any separate cash payment for any accrued interest that has not been paid . The Company’s settlement of the full Conversion Obligation shall be deemed to satisfy in full its obligation to pay the principal amount of the Note and any accrued interest that has not been paid to, but not including, the relevant Conversion Date. As a result, any accrued interest that has not been paid to, but not including, the relevant Conversion Date shall be deemed to be paid in full rather than cancelled, extinguished or forfeited. Notwithstanding the foregoing, (x) if Notes are converted after the close of business on a Regular Record Date, Holders of such Notes as of the close of business on such Regular Record Date will receive the full amount of interest payable on such Notes in cash on the corresponding Interest Payment Date notwithstanding the conversion and (y) all Holders of record on the Regular Record Date immediately preceding the Maturity Date shall receive the full interest payment due on the Maturity Date in cash regardless of whether their Notes have been converted following such Regular Record Date.

(i) The Person in whose name the shares of Common Stock shall be issuable upon conversion shall be treated as a stockholder of record as of the close of business on the relevant Conversion Date if the Company elects (or is deemed to have elected) to satisfy the related Conversion Obligation by Physical Settlement. Upon a conversion of Notes, such Person shall no longer be a Holder of such Notes surrendered for conversion.

(j) The Company shall not issue any fractional share of Common Stock upon conversion of the Notes and shall instead pay cash in lieu of delivering any fractional share of Common Stock issuable upon conversion based on the Last Reported Sale Price of the Common Stock on the relevant Conversion Date (in the case of Physical Settlement).

Section 14.03. Adjustment of Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company if any of the following events occurs.

(a) If the Company effects a share split or share combination, the Conversion Rate shall be adjusted based on the following formula:


		CR’ = CR₀ X		OS’
		CR’ = CR₀ X		OS₀

where,


CR₀ =		the Conversion Rate in effect immediately prior to the open of business on the Effective Date of such share split or share combination, as applicable;

CR’ =		the Conversion Rate in effect immediately after the open of business on such Effective Date;

OS₀ =		the number of shares of Common Stock outstanding immediately prior to the open of business on such Effective Date (before giving effect to any such split or combination); and

OS’ =		the number of shares of Common Stock outstanding immediately after giving effect to such share split or share combination.

Any adjustment made under this Section 14.03(a) shall become effective immediately after the open of business on the Effective Date for such share split or share combination, as applicable.

(b) If the Company or any of its Subsidiaries make a payment in respect of a tender or exchange offer for the Common Stock (other than an odd lot tender offer), to the extent that the cash and value of any other consideration included in the payment per share of the Common Stock exceeds the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be increased based on the following formula:


		CR’ = CR₀ X		AC + (SP’ X OS’)
		CR’ = CR₀ X		OS₀ X SP’

where,


CR₀ =		the Conversion Rate in effect immediately prior to the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

CR’ =		the Conversion Rate in effect immediately after the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires;

AC =		the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for shares of Common Stock purchased in such tender or exchange offer;

OS₀ =		the number of shares of Common Stock outstanding immediately prior to the date such tender or exchange offer expires (prior to giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer);

OS’ =		the number of shares of Common Stock outstanding immediately after the date such tender or exchange offer expires (after giving effect to the purchase of all shares of Common Stock accepted for purchase or exchange in such tender or exchange offer); and

SP’ =		the average of the Last Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the date such tender or exchange offer expires.

The increase to the Conversion Rate under this Section 14.03(b) shall occur at the close of business on the 10th Trading Day immediately following, and including, the Trading Day next succeeding the date such tender or exchange offer expires; provided that (x) in respect of any conversion of Notes for which Physical Settlement is applicable, if the relevant Conversion Date occurs during the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the date that such tender or exchange offer expires to, and including, the Conversion Date in determining the Conversion Rate and (y) in respect of any conversion of Notes for which Cash Settlement is applicable, for any Trading Day that falls within the relevant Observation Period for such conversion and within the 10 Trading Days immediately following, and including, the Trading Day next succeeding the expiration date of any tender or exchange offer, references to “10” or “10th” in the preceding paragraph shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the Trading Day next succeeding the expiration date of such tender or exchange offer to, and including, such Trading Day in determining the Conversion Rate as of such Trading Day.

(c) In case of any transaction in which the Company issues any shares of Common Stock, warrants, rights or options to acquire Common Stock or securities convertible or exchangeable into Common Stock for an Effective Price that is lower than the Conversion Price on the Business Day immediately prior to the date of pricing of such transaction (each, a “Discounted Issuance”), the Conversion Rate shall be increased based on the following formula:


		CR’ = CR₀ X		OS’ + I
		CR’ = CR₀ X		OS’ + F

where,


CR₀	=	the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such issuance;

CR’	=	the Conversion Rate in effect immediately after the open of business on such Ex-Dividend Date;

OS’	=	the number of shares of Common Stock outstanding at the close of business on the Business Day immediately prior to the date of pricing of the Discounted Issuance;

I	=	the total number of shares of Common Stock offered for subscription or purchase or into which such warrants, rights, options or convertible or exchangeable securities are exercisable, convertible or exchangeable, as the case may be, pursuant to the Discounted Issuance; and

F	=	the total number of shares of Common Stock that the aggregate Effective Price would purchase at the Conversion Price per share on such Business Day.

For the avoidance of doubt, in no event shall the Conversion Rate be decreased as a result of this Section 14.03(c). Any increase made pursuant to this Section 14.03(c) shall become effective at the close of business on the date of pricing for the Discounted Issuance. To the extent that shares of Common Stock, rights, options or convertible or exchangeable securities are not issued, the Conversion Rate shall be readjusted, effective as of the date when the Board of Directors determines not to make such issuance, to be the Conversion Rate that would be in effect if the Discounted Issuance had not been priced.

(d) In addition to those adjustments required by clauses (a), (b) and (c) of this Section 14.03, and to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Company’s securities are then listed, the Company from time to time may increase the Conversion Rate by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest. In addition, to the extent permitted by applicable law and subject to the applicable rules of any exchange on which any of the Company’s securities are then listed, the Company may (but is not required to) increase the Conversion Rate to avoid or diminish any income tax to holders of Common Stock or rights to purchase Common Stock in connection with a dividend or

distribution of shares of Common Stock (or rights to acquire shares of Common Stock) or similar event. Whenever the Conversion Rate is increased pursuant to either of the preceding two sentences, the Company shall deliver to the Holder of each Note a notice of the increase at least 15 days prior to the date the increased Conversion Rate takes effect, and such notice shall state the increased Conversion Rate and the period during which it will be in effect.

(e) All calculations and other determinations under this Article 14 shall be made by the Company and shall be made to the nearest one-ten thousandth (1/10,000th) of a share.

(f) Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly file with the Trustee (and the Conversion Agent if not the Trustee) an Officers’ Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such Officers’ Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has knowledge is still in effect. Promptly after delivery of such certificate, the Company shall prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and the date on which each adjustment becomes effective and shall deliver such notice of such adjustment of the Conversion Rate to each Holder. Failure to deliver such notice shall not affect the legality or validity of any such adjustment.

(g) For purposes of this Section 14.03, the number of shares of Common Stock at any time outstanding shall not include shares of Common Stock held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Company, but shall include shares of Common Stock issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock.

(h) Notwithstanding anything to the contrary in this Article 14, the Conversion Rate shall not be adjusted:

(i) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of the Company’s Subsidiaries; provided that such issuance shall not exceed, in the aggregate, 10% of the then outstanding Common Stock of the Company on a fully diluted basis, treating all of the then outstanding Notes as converted to Common Stock on an As-Converted-to-Common-Stock-Basis;

(ii) upon the issuance of any shares of the Common Stock pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in clause (ii) of this subsection and outstanding as of the date the Notes were first issued;

(iii) upon the repurchase of any shares of Common Stock pursuant to an odd lot tender offer or an open-market share repurchase program or other buy-back transaction that is not a tender offer or exchange offer of the nature described in Section 14.03(b);

(iv) solely for a change in the par value of the Common Stock; and

(v) for accrued and unpaid interest, if any.

Section 14.04. Distributions.

(a) If the Company distributes shares of its Capital Stock, cash, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Stock (any of such shares of Capital Stock, cash, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities, the “Distributed Property”), each Holder of a Note shall receive, in respect of each $1,000 principal amount thereof, at the same time and upon the same terms as holders of the Common Stock receive the Distributed Property, the amount and kind of Distributed Property such Holder would have received if such Holder owned a number of shares of Common Stock equal to the Conversion Rate in effect on the Ex-Dividend Date for the distribution (regardless of whether such Holder’s Notes have been converted prior to such distribution, unless such Holder will have been deemed a record holder of the shares of Common Stock deliverable upon conversion as of the relevant Record Date for such distribution).

For purposes of this Section 14.04(a) (and subject in all respects to Section 14.11), rights, options or warrants distributed by the Company to all holders of the Common Stock entitling them to subscribe for or purchase shares of the Company’s Capital Stock, including Common Stock (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (“Trigger Event”): (i) are deemed to be transferred with such shares of the Common Stock; (ii) are not exercisable; and (iii) are also issued in respect of future issuances of the Common Stock, shall be deemed not to have been distributed for purposes of this Section 14.04(a) (and no distribution to Holders under this Section 14.04(a) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate distribution shall be made under this Section 14.04(a). If any such right, option or warrant, including any such existing rights, options or warrants distributed prior to the date of this Indenture, are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date with respect to new rights, options or warrants with such rights (in which case the existing rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders thereof).

Section 14.05. Adjustments of Prices. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs or the Daily Conversion Values over a span of multiple days (including, without limitation, an Observation Period), the Board of Directors shall make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the Ex-Dividend Date, Effective Date or expiration date, as the case may be, of the event occurs, at any time during the period when the Last Reported Sale Prices, the Daily VWAPs or the Daily Conversion Values are to be calculated.

Section 14.06. Shares to Be Fully Paid. The Company shall provide, free from preemptive rights, out of its authorized but unissued shares or shares held in treasury, sufficient shares of Common Stock to provide for conversion of the Notes from time to time as such Notes are presented for conversion (assuming that at the time of computation of such number of shares, all such Notes would be converted by a single Holder and that Physical Settlement were applicable).

Section 14.07. Effect of Recapitalizations, Reclassifications and Changes of the Common Stock.

(a) In the case of:

(i) any recapitalization, reclassification or change of the Common Stock (other than changes resulting from a subdivision or combination),

(ii) any consolidation, merger, combination or similar transaction involving the Company,

(iii) any sale, lease or other transfer to a third party of the consolidated assets of the Company and the Company’s Subsidiaries substantially as an entirety or

(iv) any statutory share exchange,

in each case, as a result of which the Common Stock would be converted into, or exchanged for, stock, other securities, other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event”), then, at and after the effective time of such Share Exchange Event, the right to convert each $1,000 principal amount of Notes shall be changed into a right to convert such principal amount of Notes into the kind and amount of shares of stock, other securities or other property or assets (including cash or any combination thereof) that a holder of a number of shares of Common Stock equal to the Conversion Rate immediately prior to such Share Exchange Event would have owned or been entitled to receive (the “Reference Property,” with each “unit of Reference Property” meaning the kind and amount of Reference Property that a holder of one share of Common Stock is entitled to receive) upon such Share Exchange Event and, prior to or at the effective time of such Share Exchange Event, the Company or the successor or purchasing Person, as the case may be, shall execute with the Trustee a supplemental indenture permitted under Section 10.01(f) providing for such change in the right to convert each $1,000 principal amount of Notes; provided, however, that at and after the effective time of the Share Exchange Event (A) the Company shall continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of Notes in accordance with Section 14.02 and (B) (I) any amount payable in cash upon conversion of the Notes in accordance with Section 14.02 shall continue to be payable in cash, (II) any shares of Common Stock that the Company would have been required to deliver upon conversion of the Notes in accordance with Section 14.02 shall instead be deliverable in the amount and type of Reference Property that a holder of that number of shares of Common Stock would have been entitled to receive in such Share Exchange Event and (III) the Daily VWAP shall be calculated based on the value of a unit of Reference Property.

If the Share Exchange Event causes the Common Stock to be converted into, or exchanged for, the right to receive more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property into which the Notes will be convertible shall be deemed to be the weighted average of the types and amounts of consideration actually received by the holders of Common Stock, and (ii) the unit of Reference Property for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one share of Common Stock. If the holders of the Common Stock receive only cash in such Share Exchange Event, then for all conversions for which the relevant Conversion Date occurs after the effective date of such Share Exchange Event (A) the consideration due upon conversion of each $1,000 principal amount of Notes shall be solely cash in an amount equal to the Conversion Rate in effect on the Conversion Date, multiplied by the price paid per share of Common Stock in such Share Exchange Event and (B) the Company shall satisfy the Conversion Obligation by paying cash to converting Holders on the second Business Day immediately following the relevant Conversion Date (for the avoidance of doubt, subject to clause (y) of the proviso in the last sentence of the first paragraph of Section 14.02(a). The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as reasonably practicable after such determination is made.

Such supplemental indenture described in the second immediately preceding paragraph shall provide for anti-dilution and other adjustment and distribution rights that shall be as nearly equivalent as is possible to the adjustments and rights provided for in this Article 14. If, in the case of any Share Exchange Event, the Reference Property includes shares of stock, securities or other property or assets (including cash or any combination thereof) of a Person other than the successor or purchasing corporation, as the case may be, in such Share Exchange Event, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions as the Board of Directors shall reasonably consider necessary or appropriate to protect the rights of the Holders under this Indenture, including the right to require the Company to repurchase the Notes as set forth in Article 15.

(b) When the Company executes a supplemental indenture pursuant to subsection (a) of this Section 14.07, the Company shall promptly file with the Trustee an Officers’ Certificate briefly stating the reasons therefor, the kind or amount of cash, securities or property or asset that will comprise a unit of Reference Property after any such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent have been complied with, and shall promptly deliver notice thereof to all Holders. The Company shall cause notice of the execution of such supplemental indenture to be delivered to each Holder within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture.

(c) The Company shall not consummate any Share Exchange Event unless its terms are consistent with this Section 14.07. None of the foregoing provisions shall affect the right of a holder of Notes to convert its Notes into cash or shares of Common Stock, as applicable, as set forth in Section 14.01 and Section 14.02 prior to the effective date of such Share Exchange Event.

(d) The above provisions of this Section shall similarly apply to successive Share Exchange Events.

Section 14.08. Certain Covenants. (a) The Company covenants that all shares of Common Stock issued upon conversion of Notes will be fully paid and non-assessable by the Company and free from all taxes, liens and charges with respect to the issue thereof.

(b) The Company covenants that, if any shares of Common Stock to be provided for the purpose of conversion of Notes hereunder require registration with or approval of any governmental authority under any federal or state law before such shares of Common Stock may be validly issued upon conversion, the Company will, to the extent then permitted by the rules and interpretations of the Commission, secure such registration or approval, as the case may be.

(c) The Company further covenants that if at any time the Common Stock shall be listed on any national securities exchange or automated quotation system the Company will list and keep listed, so long as the Common Stock shall be so listed on such exchange or automated quotation system, any Common Stock issuable upon conversion of the Notes.

Section 14.09. Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine the Conversion Rate (or any adjustment thereto) or whether any facts exist that may require any adjustment (including any increase) of the Conversion Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities, property or cash that may at any time be issued or delivered upon the conversion of any Note; and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any Note for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 14.07 relating either to the kind or amount of shares of stock or securities or property (including cash) receivable by Holders upon the conversion of their Notes after any event referred to in such Section 14.07 or to any adjustment to be made with respect thereto, but, subject to the provisions of Section 7.01, may accept (without any independent investigation) as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers’ Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such supplemental indenture) with respect thereto.

Section 14.10. Notice to Holders Prior to Certain Actions. In case of any:

(a) action by the Company or one of its Subsidiaries that would require an adjustment in the Conversion Rate pursuant to Section 14.03 or a distribution pursuant to Section 14.04 or Section 14.11;

(b) Share Exchange Event or Merger Event; or

then, in each case (unless notice of such event is otherwise required pursuant to another provision of this Indenture), the Company shall, at least 20 days prior to the applicable date hereinafter specified, cause to be filed with the Trustee and the Conversion Agent (if other than the Trustee) for delivery to each Holder, a notice stating (i) the date on which a record is to be taken for the purpose of such action by the Company or one of its Subsidiaries or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined for the purposes of such action by the Company or one of its Subsidiaries, or (ii) the date on which such Share Exchange Event, Merger Event, dissolution, liquidation or winding-up is expected to become effective or occur, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their Common Stock for securities or other property deliverable upon such Share Exchange Event, Merger Event, dissolution, liquidation or winding-up. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action by the Company or one of its Subsidiaries, Share Exchange Event, Merger Event, dissolution, liquidation or winding-up.

Section 14.11. Stockholder Rights Plans. If the Company has a stockholder rights plan in effect upon conversion of the Notes, each share of Common Stock, if any, issued upon such conversion shall be entitled to receive the appropriate number of rights, if any, and the certificates representing the Common Stock issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any such stockholder rights plan, as the same may be amended from time to time. However, if, prior to any conversion of Notes, the rights have separated from the shares of Common Stock in accordance with the provisions of the applicable stockholder rights plan, a distribution shall be made at the time of separation as if the Company distributed to all or substantially all holders of the Common Stock Distributed Property as provided in Section 14.04.

Section 14.12. Certain Limitations on Settlement.

(a) For so long as the Common Stock is registered under the Exchange Act, a beneficial owner of the Notes shall not be entitled to receive shares of Common Stock upon conversion of any Notes pursuant to Section 14.01(a) (each, an “Optional Conversion”) during any period of time in which the aggregate number of shares of Common Stock that may be acquired by such beneficial owner upon conversion of Notes shall, when added to the aggregate number of shares of Common Stock deemed beneficially owned, directly or indirectly, by such beneficial owner and each person subject to aggregation of Common Stock with such beneficial owner under Section 13 or Section 16 of the Exchange Act and the rules promulgated thereunder at such time (an “Aggregated Person”) (other than by virtue of the ownership of securities or rights to acquire securities that have limitations on such beneficial owner’s or such person’s right

to convert, exercise or purchase similar to this limitation), as determined pursuant to the rules and regulations promulgated under Section 13(d) of the Exchange Act, exceed 9.99% (or, in respect of funds and accounts managed by BlackRock Financial Management, Inc. and its Affiliates, 19.99%) (the “Restricted Ownership Percentage”) of the total issued and outstanding shares of Common Stock (the “Conversion Blocker”). Notwithstanding the foregoing, this Conversion Blocker shall not apply (a) with respect to a beneficial owner of the Notes if such beneficial owner is subject to Section 16(a) of the Exchange Act without regard to the aggregate number of shares of Common Stock issuable upon conversion of the Notes and upon conversion, exercise or sale of securities or rights to acquire securities that have limitations on such beneficial owner’s right to convert, exercise or purchase similar to this limitation or (b) to any beneficial owner of Notes acquiring Notes on the date of this Indenture that does not wish for the Conversion Blocker to apply to it and/or its Affiliates and has notified the Company and the Trustee on the date of this Indenture by delivering an opt-out notice substantially in the form of Exhibit C hereto. Any purported delivery of shares of Common Stock upon Optional Conversion of Notes by a beneficial owner shall be void and have no effect to the extent (but only to the extent) that, after such delivery such beneficial owner’s beneficial ownership of Common Stock (together with that of any Aggregated Person) would exceed the Restricted Ownership Percentage. If any delivery of shares of Common Stock owed to a beneficial owner upon Optional Conversion of Notes is not made, in whole or in part, as a result of the limitations described in this Section 14.12, the Company’s obligation to make such delivery shall not be extinguished, and the Company shall deliver such shares as promptly as practicable after the applicable beneficial owner gives notice to the Company that, after such delivery, such beneficial owner’s beneficial ownership of Common Stock (together with that of any Aggregated Person) would not exceed the Restricted Ownership Percentage. Nothing in this Section 14.12 shall have any effect upon the provisions and calculations set forth in Section 14.03 through Section 14.07 (inclusive).

(b) Notwithstanding the foregoing, the Company shall issue shares of Common Stock upon Optional Conversion of such beneficial owner’s Notes up to (but not exceeding) the amount that would cause such beneficial owner’s beneficial ownership of Common Stock (together with that of any Aggregated Person) to equal the Restricted Ownership Percentage; provided that each beneficial owner shall have the right at any time and from time to time to (i) reduce the Restricted Ownership Percentage applicable to such beneficial owner immediately upon prior written notice to the Company (provided that, for the avoidance of doubt, in such event, such beneficial owner may sell shares of Common Stock or Notes to reduce the aggregate number of shares of Common Stock deemed beneficially owned by such beneficial owner (together with any Aggregated Person) to a level below the reduced Restricted Ownership Percentage, in which case the Notes will be convertible by such beneficial owner upon Optional Conversion up to (but will not exceed) the reduced Restricted Ownership Percentage) or (ii) increase the Restricted Ownership Percentage applicable to such beneficial owner (together with any Aggregated Person) upon 65 days’ prior written notice to the Company.

(c) Under no circumstances shall the Trustee or the Conversion Agent have any obligation to identify any beneficial owner of the Notes, or otherwise make any determination, monitor or otherwise take any action with respect to the restrictions set forth in this Section 14.12.

(d) In determining the number of shares of Common Stock outstanding, the beneficial owner of the Notes may rely on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q filed with the Commission, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by the Company or its transfer agent to the beneficial owner of the Notes setting forth the number of shares of Common Stock then outstanding. For any reason at any time, upon written or oral request of the Holder, the Company shall, within two Business Days of such request, confirm orally and in writing to the Holder the amount or number of any Common Equity of any class then outstanding.

(e) The provisions of this Section 14.12 shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial ownership limitation herein contained.

ARTICLE 15

REPURCHASE OF NOTES AT OPTION OF HOLDERS

Section 15.01. Intentionally Omitted.

Section 15.02. Repurchase at Option of Holders Upon a Fundamental Change.

(a) If a Fundamental Change occurs at any time, subject to the Company’s rights under Section 14.01(c), if applicable, each Holder shall have the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes, or any portion thereof that is equal to $1.00 or an integral multiple of $1.00 in excess thereof, on the date (the “Fundamental Change Repurchase Date”) specified by the Company that is not less than 20 calendar days or more than 35 calendar days following the date of the Fundamental Change Company Notice at a repurchase price equal to 100% of the principal amount of such Notes, plus any accrued interest that has not been paid to, but excluding, the Fundamental Change Repurchase Date (the “Fundamental Change Repurchase Price”), unless the Fundamental Change Repurchase Date falls after a Regular Record Date but on or prior to the Interest Payment Date to which such Regular Record Date relates, in which case the Company shall instead pay the full amount of accrued interest that has not been paid in cash to Holders of record as of such Regular Record Date, and the Fundamental Change Repurchase Price shall be equal to 100% of the principal amount of Notes to be repurchased pursuant to this Article 15.

(b) Repurchases of Notes under this Section 15.02 shall be made, at the option of the Holder thereof, upon:

(i) delivery to the Paying Agent by a Holder of a duly completed notice (the “Fundamental Change Repurchase Notice”) in the form set forth in Attachment 2 to the Form of Note attached hereto as Exhibit A, if the Notes are Physical Notes, or in compliance with the Depositary’s procedures for surrendering interests in Global Notes, if the Notes are Global Notes, in each case on or before the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date; and

(ii) delivery of the Notes, if the Notes are Physical Notes, to the Paying Agent at any time after delivery of the Fundamental Change Repurchase Notice (together with all necessary endorsements for transfer) at the Corporate Trust Office of the Paying Agent, or book-entry transfer of the Notes, if the Notes are Global Notes, in compliance with the procedures of the Depositary, in each case such delivery being a condition to receipt by the Holder of the Fundamental Change Repurchase Price therefor.

The Fundamental Change Repurchase Notice in respect of any Notes to be repurchased shall state:

(i) in the case of Physical Notes, the certificate numbers of the Notes to be delivered for repurchase;

(ii) the aggregate principal amount of Notes to be repurchased, which must be $1.00 or an integral multiple thereof; and

(iii) that the Notes are to be repurchased by the Company pursuant to the applicable provisions of the Notes and this Indenture;

provided, however, that if the Notes are Global Notes, the Fundamental Change Repurchase Notice must comply with appropriate Depositary procedures.

Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Fundamental Change Repurchase Notice contemplated by this Section 15.02 shall have the right to withdraw, in whole or in part, such Fundamental Change Repurchase Notice at any time prior to the close of business on the Business Day prior to the Fundamental Change Repurchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 15.03.

The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Repurchase Notice or written notice of withdrawal thereof.

(c) On or before the 20th calendar day after the occurrence of the effective date of a Fundamental Change, the Company shall provide to all Holders of Notes and the Trustee and the Paying Agent (in the case of a Paying Agent other than the Trustee) a notice (the “Fundamental Change Company Notice”) of the occurrence of the effective date of the Fundamental Change and of the repurchase right at the option of the Holders arising as a result thereof. In the case of Physical Notes, such notice shall be by first class mail or, in the case of Global Notes, such notice shall be delivered in accordance with the applicable procedures of the Depositary. Simultaneously with providing such notice, the Company shall publish a notice containing the information set forth in the Fundamental Change Company Notice in a newspaper of general circulation in The City of New York or publish such information on the Company’s website or through such other public medium as the Company may use at that time. Each Fundamental Change Company Notice shall specify:

(i) the events causing the Fundamental Change;

(ii) the date of the Fundamental Change;

(iii) the last date on which a Holder may exercise the repurchase right pursuant to this Article 15;

(iv) the Fundamental Change Repurchase Price;

(v) the Fundamental Change Repurchase Date;

(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;

(vii) if applicable, the Conversion Rate and any adjustments to the Conversion Rate;

(viii) that the Notes with respect to which a Fundamental Change Repurchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Repurchase Notice in accordance with the terms of this Indenture; and

(ix) the procedures that Holders must follow to require the Company to repurchase their Notes.

No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to this Section 15.02.

At the Company’s written request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company.

(d) Notwithstanding the foregoing, no Notes may be repurchased by the Company on any date at the option of the Holders upon a Fundamental Change if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to such date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Repurchase Price with respect to such Notes), or any instructions for book-entry transfer of the Notes in compliance with the procedures of the Depositary shall be deemed to have been cancelled, and, upon such return or cancellation, as the case may be, the Fundamental Change Repurchase Notice with respect thereto shall be deemed to have been withdrawn.

Section 15.03. Withdrawal of Fundamental Change Repurchase Notice. (a) A Fundamental Change Repurchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Corporate Trust Office of the Paying Agent in accordance with this Section 15.03 at any time prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date, specifying:

(i) the aggregate principal amount of the Notes with respect to which such notice of withdrawal is being submitted;

(ii) if Physical Notes have been issued, the certificate number of the Note in respect of which such notice of withdrawal is being submitted; and

(iii) the principal amount, if any, of such Note that remains subject to the original Fundamental Change Repurchase Notice, which portion must be in minimum denominations of $1.00 or an integral multiple of $1.00 in excess thereof;

provided, however, that if the Notes are Global Notes, the notice must comply with appropriate procedures of the Depositary.

Section 15.04. Deposit of Fundamental Change Repurchase Price. (a) The Company will deposit with the Trustee (or other Paying Agent appointed by the Company, or if the Company is acting as its own Paying Agent, set aside, segregate and hold in trust as provided in Section 4.04) on or prior to 11:00 a.m., New York City time, on the Fundamental Change Repurchase Date an amount of money sufficient to repurchase all of the Notes to be repurchased at the appropriate Fundamental Change Repurchase Price. Subject to receipt of funds and/or Notes by the Trustee (or other Paying Agent appointed by the Company), payment for Notes surrendered for repurchase (and not withdrawn prior to the close of business on the Business Day immediately preceding the Fundamental Change Repurchase Date) will be made on the later of (i) the Fundamental Change Repurchase Date (provided the Holder has satisfied the conditions in Section 15.02) and (ii) the time of book-entry transfer or the delivery of such Note to the Trustee (or other Paying Agent appointed by the Company) by the Holder thereof in the manner required by Section 15.02 by mailing checks for the amount payable to the Holders of such Notes entitled thereto as they shall appear in the Note Register; provided, however, that payments to the Depositary shall be made by wire transfer of immediately available funds to the account of the Depositary or its nominee. The Trustee shall, promptly after such payment and upon written demand by the Company, return to the Company any funds in excess of the Fundamental Change Repurchase Price.

(b) If by 11:00 a.m. New York City time, on the Fundamental Change Repurchase Date, the Trustee (or other Paying Agent appointed by the Company) holds money sufficient to make payment on all the Notes or portions thereof that are to be repurchased on such Fundamental Change Repurchase Date, then, with respect to the Notes that have been properly surrendered for repurchase and have not been validly withdrawn, (i) such Notes will cease to be outstanding, (ii) interest will cease to accrue on such Notes (whether or not book-entry transfer of the Notes has been made or the Notes have been delivered to the Trustee or Paying Agent) and (iii) all other rights of the Holders of such Notes will terminate (other than the right to receive the Fundamental Change Repurchase Price and, if applicable, accrued interest that has not been paid ).

(c) Upon surrender of a Note that is to be repurchased in part pursuant to Section 15.02, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Note in an authorized denomination equal to the principal amount of the unrepurchased portion of the Note surrendered.

Section 15.05. Covenant to Comply with Applicable Laws Upon Repurchase of Notes. In connection with any repurchase offer, the Company will, if required:

(a) comply with the provisions of Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act;

(b) file a Schedule TO or any other required schedule under the Exchange Act; and

(c) otherwise comply with all federal and state securities laws in connection with any offer by the Company to repurchase the Notes;

in each case, so as to permit the rights and obligations under this Article 15 to be exercised in the time and in the manner specified in this Article 15. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations hereunder by virtue thereof.

ARTICLE 16

NO REDEMPTION

Section 16.01. No Redemption. The Notes shall not be redeemable by the Company prior to the Maturity Date, and no sinking fund is provided for the Notes.

ARTICLE 17

MISCELLANEOUS PROVISIONS

Section 17.01. Provisions Binding on Company’s Successors. All the covenants, stipulations, promises and agreements of the Company contained in this Indenture shall bind its successors and assigns whether so expressed or not.

Section 17.02. Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or required to be done or performed by any board, committee or Officer of the Company shall and may be done and performed with like force and effect by the like board, committee or officer of any corporation or other entity that shall at the time be the lawful sole successor of the Company.

Section 17.03. Addresses for Notices, Etc. Any notice or demand that by any provision of this Indenture is required or permitted to be given or served by the Trustee or by the Holders on the Company shall be deemed to have been sufficiently given or made, for all purposes if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed (until another address is provided in writing by the Company to the Trustee)

to Pioneer Energy Services Corp., 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209, Attention: General Counsel. Any notice, direction, request or demand hereunder to or upon the Trustee shall be deemed to have been sufficiently given or made, for all purposes, if given or served by being deposited postage prepaid by registered or certified mail in a post office letter box addressed to the Corporate Trust Office.

The Trustee, by notice to the Company, may designate additional or different addresses for subsequent notices or communications.

Any notice or communication delivered or to be delivered to a Holder of Physical Notes shall be mailed to it by first class mail, postage prepaid, at its address as it appears on the Note Register and shall be sufficiently given to it if so mailed within the time prescribed. Any notice or communication delivered or to be delivered to a Holder of Global Notes shall be delivered in accordance with the applicable procedures of the Depositary and shall be sufficiently given to it if so delivered within the time prescribed.

Failure to mail or deliver a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed or delivered, as the case may be, in the manner provided above, it is duly given, whether or not the addressee receives it.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice to Holders by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.

Section 17.04. Governing Law; Jurisdiction. THIS INDENTURE AND EACH NOTE, AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS INDENTURE AND EACH NOTE, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF THAT WOULD REQUIRE THE APPLICATION OF LAWS OF ANOTHER JURISDICTION).

The Company irrevocably consents and agrees, for the benefit of the Holders from time to time of the Notes and the Trustee, that any legal action, suit or proceeding against it with respect to obligations, liabilities or any other matter arising out of or in connection with this Indenture or the Notes may be brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and, until amounts due and to become due in respect of the Notes have been paid, hereby irrevocably consents and submits to the non-exclusive jurisdiction of each such court in personam, generally and unconditionally with respect to any action, suit or proceeding for itself in respect of its properties, assets and revenues.

The Company irrevocably and unconditionally waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions, suits or proceedings arising out of or in connection with this Indenture brought in the courts of the State of New York or the courts of the United States located in the Borough of Manhattan, New York City, New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

Section 17.05. Evidence of Compliance with Conditions Precedent; Certificates and Opinions of Counsel to Trustee. Upon any application or demand by the Company to the Trustee to take any action under any of the provisions of this Indenture, the Company shall furnish to the Trustee, at the request of the Trustee, an Officers’ Certificate and Opinion of Counsel stating that such action is permitted by the terms of this Indenture.

Each Officers’ Certificate and Opinion of Counsel provided for, by or on behalf of the Company in this Indenture and delivered to the Trustee with respect to compliance with this Indenture (other than the Officers’ Certificates provided for in Section 4.08) shall include (a) a statement that the person signing such certificate is familiar with the requested action and this Indenture; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statement contained in such certificate is based; (c) a statement that, in the judgment of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed judgment as to whether or not such action is permitted by this Indenture; and (d) a statement as to whether or not, in the judgment of such person, such action is permitted by this Indenture.

Section 17.06. Legal Holidays. In any case where any Interest Payment Date, any Fundamental Change Repurchase Date or the Maturity Date is not a Business Day or is any other day on which banking institutions are authorized or required by law to close in the place of payment, then, in any such case, any action to be taken on such date need not be taken on such date, but may be taken on the next succeeding Business Day on which banking institutions are not authorized or required by law to close in the place of payment, with the same force and effect as if taken on such date, and no interest shall accrue in respect of the delay.

Section 17.07. No Security Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

Section 17.08. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Holders, the parties hereto, any Paying Agent, any Conversion Agent, any authenticating agent, any Note Registrar and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 17.09. Table of Contents, Headings, Etc. The table of contents and the titles 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 hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

Section 17.10. Authenticating Agent. The Trustee may appoint an authenticating agent that shall be authorized to act on its behalf and subject to its direction in the authentication and delivery of Notes in connection with the original issuance thereof and transfers and exchanges of Notes hereunder, including under Section 2.04, Section 2.05, Section 2.06, Section 2.07, Section 10.04 and Section 15.04 as fully to all intents and purposes as though the authenticating agent had been expressly authorized by this Indenture and those Sections to authenticate and deliver Notes. For all purposes of this Indenture, the authentication and delivery of Notes by the authenticating agent shall be deemed to be authentication and delivery of such Notes “by the Trustee” and a certificate of authentication executed on behalf of the Trustee by an authenticating agent shall be deemed to satisfy any requirement hereunder or in the Notes for the Trustee’s certificate of authentication. Such authenticating agent shall at all times be a Person eligible to serve as trustee hereunder pursuant to Section 7.08.

Any corporation or other entity into which any authenticating agent may be merged or converted or with which it may be consolidated, or any corporation or other entity resulting from any merger, consolidation or conversion to which any authenticating agent shall be a party, or any corporation or other entity succeeding to the corporate trust business of any authenticating agent, shall be the successor of the authenticating agent hereunder, if such successor corporation or other entity is otherwise eligible under this Section 17.10, without the execution or filing of any paper or any further act on the part of the parties hereto or the authenticating agent or such successor corporation or other entity.

Any authenticating agent may at any time resign by giving written notice of resignation to the Trustee and to the Company. The Trustee may at any time terminate the agency of any authenticating agent by giving written notice of termination to such authenticating agent and to the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any authenticating agent shall cease to be eligible under this Section, the Trustee may appoint a successor authenticating agent (which may be the Trustee), shall give written notice of such appointment to the Company and shall deliver notice of such appointment to all Holders.

The Company agrees to pay to the authenticating agent from time to time reasonable compensation for its services although the Company may terminate the authenticating agent, if it determines such agent’s fees to be unreasonable.

The provisions of Section 7.02, Section 7.03, Section 7.04, Section 8.03 and this Section 17.10 shall be applicable to any authenticating agent.

If an authenticating agent is appointed pursuant to this Section 17.10, the Notes may have endorsed thereon, in addition to the Trustee’s certificate of authentication, an alternative certificate of authentication in the following form:

as Authenticating Agent, certifies that this is one of the Notes described

in the within-named Indenture.


By:


Authorized Officer

Section 17.11. Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 17.12. Severability. In the event any provision of this Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted by law) the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired.

Section 17.13. Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 17.14. Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, epidemics, pandemics, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services, or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility; it being understood that the Trustee shall use reasonable efforts that are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

Section 17.15. Calculations. Except as otherwise provided herein, the Company shall be responsible for making all calculations called for under the Notes. These calculations include, but are not limited to, determinations of the Capitalization Amounts, the Last Reported Sale Prices of the Common Stock, the Daily VWAPs, the Daily Conversion Values, the Fundamental Change Repurchase Prices, accrued interest payable on the Notes and the Conversion Rate of the Notes. The Company shall make all these calculations in good faith and, absent manifest error, the Company’s calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule of its calculations to each of the Trustee and the Conversion Agent, and each of the Trustee and Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee will forward the Company’s calculations to any Holder of Notes upon the request of that Holder at the sole cost and expense of the Company.

Section 17.16. USA PATRIOT Act. The parties hereto acknowledge that in accordance with Section 326 of the USA PATRIOT Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the USA PATRIOT Act.

Section 17.17 Tax Treatment. Absent a change in law, or a contrary determination (as defined in Section 1313(a) of the Internal Revenue Code of 1986, as amended (the “Code”)), or, solely in the case of clauses (ii) or (iii) hereof, a change in Internal Revenue Service administrative guidance, the Company and each Holder of Notes agrees, solely for all U.S. federal, and applicable state and local, income tax purposes, (i) to treat the Notes as equity of the Company, (ii) not to treat the Notes as “preferred stock” within the meaning of Section 305 of the Code, (iii) (A) not to treat any increase of the Capitalized Principal Amount of the Notes as a distribution for purposes of Section 301 of the Code and (B) to treat any issuance of PIK Notes as a distribution of stock pursuant to Section 305 of the Code, (iv) to treat a conversion of Notes satisfied by Physical Settlement as a recapitalization within the meaning of Section 368(a)(1)(E) of the Code, and (v) to file all of its applicable tax returns and reports in accordance with the treatment set forth in clauses (i), (ii), (iii) and (iv) of this Section 17.17. References to sections of the Code shall include corresponding references to similar provisions in any applicable state and local tax laws. Notwithstanding the foregoing, and for the avoidance of doubt, the obligations under the Notes and under the Indenture shall constitute indebtedness for borrowed money for all other purposes.

[Remainder of page intentionally left blank]

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


PIONEER ENERGY SERVICES CORP.

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee

By:	/s/ Jane Schweiger
	Name:	Jane Schweiger
	Title:	Vice President

EXHIBIT A

[FORM OF FACE OF NOTE]

[INCLUDE FOLLOWING LEGEND IF A GLOBAL NOTE]

[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.]

[INCLUDE FOLLOWING LEGEND IF A RESTRICTED NOTE]

[THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT [IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,]¹

[IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT,]² AND

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

¹	Include for Rule 144A Global Note.

²	Include for AI Global Note.

A-1

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

A-2

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Note due 2025


No. [ ]		Principal Amount: [Initially]³ $[ ]

CUSIP No. [723664 AC2]⁴[723664 AE8]⁵

PIONEER ENERGY SERVICES CORP., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to [CEDE & CO.]⁶ [ ]⁷, or registered assigns, the amounts due upon conversion, repurchase or otherwise corresponding to the principal amount set forth above [or such greater or lesser principal amount as set forth in the “Schedule of Exchanges of Notes” attached hereto]⁸ [of $[ ]]⁹, in accordance with the rules and procedures of the Depositary, and interest thereon as set forth below.

This Note shall bear interest at the rate of 5.00% per year from May 29, 2020, or from the most recent date to which interest had been paid or provided for to, but excluding, the next scheduled Interest Payment Date until November 15, 2025. Interest is payable semi-annually in arrears by an increase to the Capitalized Principal Amount of the Notes pursuant to Section 2.03(d) of the Indenture on each May 15 and November 15, commencing on November 15, 2020, to Holders of record at the close of business on the preceding May 1 and November 1 (whether or not such day is a Business Day), respectively. Notwithstanding the foregoing, in certain circumstances the Company may, at its option, in lieu of increasing the Capitalized Principal Amount of the Notes by the Capitalization Amount for such Interest Payment Date, pay interest due and payable on the Notes by authenticating additional Notes on the relevant Interest Payment Date in an aggregate principal amount equal to the relevant Capitalization Amount.

Any Defaulted Amounts shall accrue interest per annum at the rate borne by the Notes plus two percent, subject to the enforceability thereof under applicable law, from, and including, the relevant payment date to, but excluding, the date on which such Defaulted Amounts shall have been paid by the Company, at its election, in accordance with Section 2.03(c) of the Indenture.

The Company shall pay the principal of and any interest due in cash on this Note, if and so long as such Note is a Global Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the registered Holder of such Note. As provided in and subject to the provisions of the Indenture, the Company shall pay the principal of any Notes (other than Notes that are Global Notes) at the office or agency designated by the Company for that purpose. The Company has initially designated the Trustee as its Paying Agent and Note Registrar in respect of the Notes and will designate an office or agency in the contiguous United States as a place where Notes may be presented for payment or for registration of transfer and exchange.

³	Include if a global note.

⁴	Include if a Rule 144A Note.

⁵	Include if an AI Note.

⁶	Include if a global note.

⁷	Include if a physical note.

⁸	Include if a global note.

⁹	Include if a physical note.

A-3

Reference is made to the further provisions of this Note set forth on the reverse hereof, including, without limitation, provisions giving the Holder of this Note the right to convert this Note into cash or shares of Common Stock, as applicable, on the terms and subject to the limitations set forth in the Indenture. Such further provisions shall for all purposes have the same effect as though fully set forth at this place.

This Note, and any claim, controversy or dispute arising under or related to this Note, shall be construed in accordance with and governed by the laws of the State of New York (without regard to the conflicts of laws provisions thereof).

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.

This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been signed manually or by facsimile by the Trustee or a duly authorized authenticating agent under the Indenture.

[Remainder of page intentionally left blank]

A-4

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


PIONEER ENERGY SERVICES CORP.

By:
		Name:
		Title:

Dated:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee, certifies that this is one of the Notes described

in the within-named Indenture.


By:
		Authorized Officer

A-5

[FORM OF REVERSE OF NOTE]

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Note due 2025

This Note is one of a duly authorized issue of Notes of the Company, designated as its 5.00% Convertible Senior Unsecured PIK Notes due 2025 (the “Notes”), initially in an aggregate principal amount of $129,771,000 all issued or to be issued under and pursuant to an Indenture dated as of May 29, 2020 (the “Indenture”), between the Company and Wilmington Trust, National Association (the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Notes. Capitalized terms used in this Note and not defined in this Note shall have the respective meanings set forth in the Indenture.

In case certain Events of Default shall have occurred and be continuing, the principal of, and interest on, all Notes may be declared, by either the Trustee or Holders of at least 25% in aggregate principal amount of Notes then outstanding, and upon said declaration shall become, due and payable, in the manner, with the effect and subject to the conditions and certain exceptions set forth in the Indenture.

Subject to the terms and conditions of the Indenture, the Company will make all payments and deliveries in respect of the Fundamental Change Repurchase Price on the Fundamental Change Repurchase Date to the Holder who surrenders a Note to a Paying Agent to collect such payments in respect of the Note. 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.

The Indenture contains provisions permitting the Company and the Trustee in certain circumstances, without the consent of the Holders of the Notes, and in certain other circumstances, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, evidenced as in the Indenture provided, to execute supplemental indentures modifying the terms of the Indenture and the Notes as described therein. It is also provided in the Indenture that, subject to certain exceptions, the Holders of a majority in aggregate principal amount of the Notes at the time outstanding may on behalf of the Holders of all of the Notes waive any past Default or Event of Default under the Indenture and its consequences.

Each Holder shall have the right to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) any accrued interest that has not been paid , if any, on, and (z) the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money or shares of Common Stock, as the case may be, herein prescribed.

A-6

The Notes are issuable in registered form without coupons in denominations of $1.00 principal amount and integral multiples of $1.00 in excess thereof. At the office or agency of the Company referred to on the face hereof, and in the manner and subject to the limitations provided in the Indenture, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations, without payment of any service charge but, if required by the Company or Trustee, with payment of a sum sufficient to cover any transfer or similar tax that may be imposed in connection therewith as a result of the name of the Holder of the new Notes issued upon such exchange of Notes being different from the name of the Holder of the old Notes surrendered for such exchange.

The Notes are not subject to redemption through the operation of any sinking fund or otherwise.

Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holder’s option, to require the Company to repurchase for cash all of such Holder’s Notes or any portion thereof (in principal amounts of $1.00 or integral multiples thereof) on the Fundamental Change Repurchase Date at a price equal to the Fundamental Change Repurchase Price.

Holders shall be entitled, for so long as any Notes remain outstanding, to vote on all matters on which holders of Common Stock generally are entitled to vote, on the basis set forth in Article 13 of the Indenture.

A-7

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM = as tenants in common

UNIF GIFT MIN ACT = Uniform Gifts to Minors Act

CUST = Custodian

TEN ENT = as tenants by the entireties

JT TEN = joint tenants with right of survivorship and not as tenants in common

Additional abbreviations may also be used though not in the above list.

A-8

SCHEDULE A¹⁰

SCHEDULE OF EXCHANGES OF NOTES

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Notes due 2025

The principal amount of this Global Note is _________________ DOLLARS ($[________]). The following increases or decreases in this Global Note have been made:


			Principal
	Amount of	Amount of	amount of this	Signature of
	decrease in	increase in	Global Note	authorized
	principal	principal	following	signatory of
Date of	amount of this	amount of this	such decrease	Trustee or
exchange	Global Note	Global Note	or increase	Custodian

¹⁰	Include if a global note.

A-1

ATTACHMENT 1

[FORM OF NOTICE OF CONVERSION]

To:	Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

The undersigned registered owner of this Note hereby exercises the option to convert this Note, or the portion hereof (that is $1.00 principal amount or an integral multiple thereof) below designated, into cash or shares of Common Stock, as applicable, in accordance with the terms of the Indenture referred to in this Note, and directs that any cash payable and any shares of Common Stock issuable and deliverable upon such conversion, together with any cash for any fractional share, and any Notes representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If any shares of Common Stock or any portion of this Note not converted are to be issued in the name of a Person other than the undersigned, the undersigned will pay all documentary, stamp or similar issue or transfer taxes, if any in accordance with Section 14.02(d) and Section 14.02(e) of the Indenture. Any amount required to be paid to the undersigned on account of interest accompanies this Note. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.


Dated:
						Signature(s)
Signature Guarantee



Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if shares of Common Stock are to be issued, or Notes are to be delivered, other than to and in the name of the registered holder.


Fill in for registration of shares if to be issued, and Notes if to be delivered, other than to and in the name of the registered holder:

(Name)
(Street Address)
(City, State and Zip Code)
Please print name and address
		Principal amount to be converted (if less than all):
		$______,000
		NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.
		______________________________
		Social Security or Other Taxpayer
		Identification Number

ATTACHMENT 2

[FORM OF FUNDAMENTAL CHANGE REPURCHASE NOTICE]

To:	Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from PIONEER ENERGY SERVICES CORP. (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Repurchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with Section 15.02 of the Indenture referred to in this Note (1) the Fundamental Change Repurchase Price on the principal amount of this Note, or the portion thereof (that is $1.00 principal amount or an integral multiple thereof) below designated, and (2) if such Fundamental Change Repurchase Date does not fall during the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date, any accrued interest that has not been paid thereon to, but excluding, such Fundamental Change Repurchase Date. Capitalized terms used herein but not defined shall have the meanings ascribed to such terms in the Indenture.

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:


Dated:

		Signature(s)


		Social Security or Other Taxpayer Identification Number

		Principal amount to be repaid (if less than all): $ ,000

		NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

ATTACHMENT 3

[FORM OF ASSIGNMENT AND TRANSFER FORM]

For value received hereby sell(s), assign(s) and transfer(s) unto (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

In connection with any transfer of the within Note occurring prior to the Restricted Notes Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:

☐ To PIONEER ENERGY SERVICES CORP. or a subsidiary thereof; or

☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or

☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or

☐ Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.

B-1-2

Dated:

Signature(s)

Signature Guarantee

Signature(s) must be guaranteed by an eligible Guarantor Institution (banks, stock brokers, savings and loan associations and credit unions) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15 if Notes are to be delivered, other than to and in the name of the registered holder.

NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

B-1-3

EXHIBIT B-1

[FORM OF CERTIFICATE OF TRANSFER]

Pioneer Energy Services Corp. 1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

If to the Trustee:

Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

Facsimile: (612) 217-5651

Re: Convertible Senior Unsecured PIK Notes due 2025

Reference is hereby made to the Indenture, dated as of May 29, 2020 (the “Indenture”), between Pioneer Energy Services Corp., as issuer (the “Company”), and Wilmington Trust, National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

, (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $ in such Note[s] or interests (the “Transfer”), to (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ☐ Check if Transferee will take delivery of a beneficial interest in the Rule 144A Global Note or a Physical Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Physical Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Physical Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Physical Note will be subject to the restrictions on transfer enumerated in the legend printed on the Rule 144A Global Note and/or the Physical Note and in the Indenture and the Securities Act.

B-1-4

2. ☐ Check and complete if Transferee will take delivery of a beneficial interest in the AI Global Note or a Restricted Physical Note pursuant to any provision of the Securities Act other than Rule 144A. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in the AI Global Note and Restricted Physical Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ☐ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Restricted Physical Note will be subject to the restrictions on Transfer enumerated in the legend printed on the AI Global Note and/or the Restricted Physical Note and in the Indenture and the Securities Act;

(b) ☐ such Transfer is being effected to the Company or a Subsidiary thereof;

(c) ☐ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

(d) ☐ such Transfer is being effected to an AI and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A or Rule 144, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Physical Note and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit B-2 to the Indenture and (2) if the Company so requires, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Restricted Physical Note will be subject to the restrictions on Transfer enumerated in the legend printed on the AI Global Note and/or the Restricted Physical Note and in the Indenture and the Securities Act.

B-1-5

3. ☐ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Physical Note.

(a) ☐ Check if Transfer is Pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Physical Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Physical Notes and in the Indenture.

(b) ☐ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Physical Note will not be subject to the restrictions on transfer enumerated in the legend printed on the Restricted Global Notes or Restricted Physical Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.



[Insert Name of Transferor]



By:


Name:


Title:

Dated:

B-1-6

ANNEX A TO CERTIFICATE OF TRANSFER

1.	The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) or (b)]

(a)

☐ a beneficial interest in the:

(i)

Rule 144A Global Note (CUSIP ), or

(ii)

AI Global Note (CUSIP ), or

(b)

☐ a Restricted Physical Note.

2.	After the Transfer, the Transferee will hold:

[CHECK ONE]

(a)

☐ a beneficial interest in the:

(i)

Rule 144A Global Note (CUSIP ), or

(ii)

AI Global Note (CUSIP ), or

(iii)

Unrestricted Global Note (CUSIP ), or

(b)

☐ a Restricted Physical Note, or

(c)

☐ an Unrestricted Physical Note, in accordance with the terms of the Indenture.

B-1-7

EXHIBIT B-2

FORM OF ACCREDITED INVESTOR CERTIFICATE

[Date]

Pioneer Energy Services Corp. 1250 N.E.

Loop 410, Suite 1000

San Antonio, Texas 78209 Attention:

Corporate Secretary

Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

Facsimile: (612) 217-5651

Re: Convertible Senior Unsecured PIK Notes due 2025

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $ principal amount of the Convertible Senior Unsecured PIK Notes due 2025 (the “Securities”) of Pioneer Energy Services Corp., a Delaware corporation (the “Company”).

Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:

The undersigned represents and warrants to you that:

1. We are an “accredited investor” (as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”)) purchasing for our own account or for the account of such an “accredited investor” at least $250,000 principal amount of the Securities, and we are acquiring the Securities for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risk of our investment in the Securities and we invest in or purchase securities similar to the Securities in the normal course of our business. We and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

C-1

2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is one year after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Company or a Subsidiary thereof, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act, to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a “QIB”) that purchases for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) to an “accredited investor” within the meaning of Rule 501(a) under the Securities Act that is purchasing for its own account or for the account of such an “accredited investor,” in each case in a minimum principal amount of Securities of $250,000 or (e) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (d) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Termination Date of the Securities pursuant to clauses (d) or (e) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Company and the Trustee.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.



[Insert Name of Transferee]

By:
Name:
Title:

Dated:

EXHIBIT C

[FORM OF CONVERSION BLOCKER OPT-OUT NOTICE]

[Date]

Pioneer Energy Services Corp. 1250 N.E.

Loop 410, Suite 1000

San Antonio, Texas 78209 Attention:

Corporate Secretary

Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

Facsimile: (612) 217-5651

Re: Convertible Senior Unsecured PIK Notes due 2025 – Conversion Blocker Opt-Out Notice

Ladies and Gentlemen:

Reference is hereby made to the Indenture, dated as of May 29, 2020 (the “Indenture”), between Pioneer Energy Services Corp., as issuer (the “Company”), and Wilmington Trust, National Association, as trustee (the “Trustee”). Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

This notice is delivered pursuant to Section 14.12(a) of the Indenture to notify the Company and the Trustee that the undersigned does not wish for the Conversion Blocker to apply to it [and/or its Affiliates], and in conformity with the terms of the Indenture, the Conversion Blocker shall herewith not apply to, and be of no force and effect on, the undersigned [and/or its Affiliates].



[Insert Name of Beneficial Owner of Notes]

By:
Name:
Title:

C-1

Exhibit 4.2

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREUNDER IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS 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.

THIS SECURITY AND THE COMMON STOCK, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Note due 2025


No. 144A-1		Principal Amount: Initially $127,468,000

CUSIP No. 723664 AC2

PIONEER ENERGY SERVICES CORP., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to CEDE & CO., or registered assigns, the amounts due upon conversion, repurchase or otherwise corresponding to the principal amount set forth above or such greater or lesser principal amount as set forth in the “Schedule of Exchanges of Notes” attached hereto, in accordance with the rules and procedures of the Depositary, and interest thereon as set forth below.

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


PIONEER ENERGY SERVICES CORP.

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

Dated: May 29, 2020

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee, certifies that this is one of the Notes described

in the within-named Indenture.


By:		/s/ Jane Schweiger
		Vice President

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Note due 2025

Each Holder shall have the right to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) any accrued interest that has not been paid, if any, on, and (z) the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money or shares of Common Stock, as the case may be, herein prescribed.

The Notes are not subject to redemption through the operation of any sinking fund or otherwise.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM = as tenants in common

UNIF GIFT MIN ACT = Uniform Gifts to Minors Act

CUST = Custodian

TEN ENT = as tenants by the entireties

JT TEN = joint tenants with right of survivorship and not as tenants in common

Additional abbreviations may also be used though not in the above list.

SCHEDULE A

SCHEDULE OF EXCHANGES OF NOTES

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Notes due 2025

The principal amount of this Global Note is ONE HUNDRED AND TWENTY SEVEN MILLION, FOUR HUNDRED AND SIXTY EIGHT THOUSAND DOLLARS ($127,468,000).

The following increases or decreases in this Global Note have been made:


Date of exchange	Amount of decrease in principal amount of this Global Note	Amount of increase in principal amount of this Global Note	Principal amount of this Global Note following such decrease or increase	Signature of authorized signatory of Trustee or Custodian

ATTACHMENT 1

NOTICE OF CONVERSION

To:	Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator


Dated:


		Signature(s)

Signature Guarantee

Signature(s) must be guaranteed

by an eligible Guarantor Institution

(banks, stock brokers, savings and

loan associations and credit unions)

with membership in an approved

signature guarantee medallion program

pursuant to Securities and Exchange

Commission Rule 17Ad-15 if shares

of Common Stock are to be issued, or

Notes are to be delivered, other than

to and in the name of the registered holder.

Fill in for registration of shares if

to be issued, and Notes if to

be delivered, other than to and in the

name of the registered holder:

(Name)

(Street Address)

(City, State and Zip Code)

Please print name and address

Principal amount to be converted (if less than all): $______,000

NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

Social Security or Other Taxpayer

Identification Number

ATTACHMENT 2

FUNDAMENTAL CHANGE REPURCHASE NOTICE

To:	Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

Dated: _____________________

Signature(s)

Social Security or Other Taxpayer Identification Number

Principal amount to be repaid (if less than all):
$______,000

NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

ATTACHMENT 3

ASSIGNMENT AND TRANSFER FORM

For value received ____________________________ hereby sell(s), assign(s) and transfer(s) unto _________________ (Please insert social security or Taxpayer Identification Number of assignee) the within Note, and hereby irrevocably constitutes and appoints _____________________ attorney to transfer the said Note on the books of the Company, with full power of substitution in the premises.

☐ To PIONEER ENERGY SERVICES CORP. or a subsidiary thereof; or

☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or

☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or

Dated: ________________________

Signature(s)

Signature Guarantee

Signature(s) must be guaranteed by an

eligible Guarantor Institution (banks, stock

brokers, savings and loan associations and

credit unions) with membership in an approved

signature guarantee medallion program pursuant

to Securities and Exchange Commission

Rule 17Ad-15 if Notes are to be delivered, other

than to and in the name of the registered holder.

NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS AN “ACCREDITED INVESTOR” (WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, OR

(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BECOME EFFECTIVE UNDER THE SECURITIES ACT, OR

(D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT OR ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Note due 2025


No. ACCD INV-1		Principal Amount: Initially $2,303,000

CUSIP No. 723664 AE8

PIONEER ENERGY SERVICES CORP., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company,” which term includes any successor corporation or other entity under the Indenture referred to on the reverse hereof), for value received hereby promises to pay to CEDE & CO., or registered assigns, the amounts due upon conversion, repurchase or otherwise corresponding to the principal amount set forth above or such greater or lesser principal amount as set forth in the “Schedule of Exchanges of Notes” attached hereto, in accordance with the rules and procedures of the Depositary, and interest thereon as set forth below.

In the case of any conflict between this Note and the Indenture, the provisions of the Indenture shall control and govern.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


PIONEER ENERGY SERVICES CORP.

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

Dated: May 29, 2020

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee, certifies that this is one of the Notes described

in the within-named Indenture.


By:		/s/ Jane Schweiger
		Vice President

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Note due 2025

Each Holder shall have the right to receive payment or delivery, as the case may be, of (x) the principal (including the Fundamental Change Repurchase Price, if applicable) of, (y) any accrued interest that has not been paid, if any, on, and (z) the consideration due upon conversion of, this Note at the place, at the respective times, at the rate and in the lawful money or shares of Common Stock, as the case may be, herein prescribed.

The Notes are not subject to redemption through the operation of any sinking fund or otherwise.

ABBREVIATIONS

The following abbreviations, when used in the inscription of the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM = as tenants in common

UNIF GIFT MIN ACT = Uniform Gifts to Minors Act

CUST = Custodian

TEN ENT = as tenants by the entireties

JT TEN = joint tenants with right of survivorship and not as tenants in common

Additional abbreviations may also be used though not in the above list.

SCHEDULE A

SCHEDULE OF EXCHANGES OF NOTES

PIONEER ENERGY SERVICES CORP.

5.00% Convertible Senior Unsecured PIK Notes due 2025

The principal amount of this Global Note is TWO MILLION, THREE HUNDRED AND THREE THOUSAND DOLLARS ($2,303,000). The following increases or decreases in this Global Note have been made:


Date of exchange	Amount of decrease in principal amount of this Global Note	Amount of increase in principal amount of this Global Note	Principal amount of this Global Note following such decrease or increase	Signature of authorized signatory of Trustee or Custodian

ATTACHMENT 1

NOTICE OF CONVERSION

To:	Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator


Dated:


		Signature(s)

Signature Guarantee

Signature(s) must be guaranteed

by an eligible Guarantor Institution

(banks, stock brokers, savings and

loan associations and credit unions)

with membership in an approved

signature guarantee medallion program

pursuant to Securities and Exchange

Commission Rule 17Ad-15 if shares

of Common Stock are to be issued, or

Notes are to be delivered, other than

to and in the name of the registered holder.

Fill in for registration of shares if

to be issued, and Notes if to

be delivered, other than to and in the

name of the registered holder:

(Name)

(Street Address)

(City, State and Zip Code)

Please print name and address

Principal amount to be converted (if less than all): $______,000

NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

Social Security or Other Taxpayer

Identification Number

ATTACHMENT 2

FUNDAMENTAL CHANGE REPURCHASE NOTICE

To:	Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

In the case of Physical Notes, the certificate numbers of the Notes to be repurchased are as set forth below:

Dated: _____________________

Signature(s)

Social Security or Other Taxpayer Identification Number

Principal amount to be repaid (if less than all):
$______,000

NOTICE: The above signature(s) of the Holder(s) hereof must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

ATTACHMENT 3

ASSIGNMENT AND TRANSFER FORM

☐ To PIONEER ENERGY SERVICES CORP. or a subsidiary thereof; or

☐ Pursuant to a registration statement that has become or been declared effective under the Securities Act of 1933, as amended; or

☐ Pursuant to and in compliance with Rule 144A under the Securities Act of 1933, as amended; or

Dated: ________________________

Signature(s)

Signature Guarantee

Signature(s) must be guaranteed by an

eligible Guarantor Institution (banks, stock

brokers, savings and loan associations and

credit unions) with membership in an approved

signature guarantee medallion program pursuant

to Securities and Exchange Commission

Rule 17Ad-15 if Notes are to be delivered, other

than to and in the name of the registered holder.

NOTICE: The signature on the assignment must correspond with the name as written upon the face of the Note in every particular without alteration or enlargement or any change whatever.

Exhibit 4.3

EXECUTION VERSION

PIONEER ENERGY SERVICES CORP.

AND EACH OF THE GUARANTORS PARTY HERETO

SENIOR SECURED FLOATING RATE NOTES DUE 2025

INDENTURE

Dated as of May 29, 2020

WILMINGTON TRUST, NATIONAL ASSOCIATION

as Trustee and Security Agent

TABLE OF CONTENTS


			Page
ARTICLE I. DEFINITIONS AND INCORPORATION BY REFERENCE			1

	Section 1.01.	Definitions	1
	Section 1.02.	Rules of Construction	23

ARTICLE II. THE NOTES			24

	Section 2.01.	Form and Dating	24
	Section 2.02.	Execution and Authentication	25
	Section 2.03.	Registrar and Paying Agent	25
	Section 2.04.	Paying Agent to Hold Money in Trust	26
	Section 2.05.	Holder Lists	26
	Section 2.06.	Transfer and Exchange	26
	Section 2.07.	Replacement Notes	38
	Section 2.08.	Outstanding Notes	39
	Section 2.09.	Treasury Notes	39
	Section 2.10.	Temporary Notes	39
	Section 2.11.	Cancellation	39
	Section 2.12.	PIK Interest; Defaulted Interest	40
	Section 2.13.	Calculation Agent	41

ARTICLE III. REDEMPTION AND PURCHASE			41

	Section 3.01.	Notices to Trustee	41
	Section 3.02.	Selection of Notes to Be Redeemed or Purchased	41
	Section 3.03.	Notice of Redemption	42
	Section 3.04.	Effect of Notice of Redemption	43
	Section 3.05.	Deposit of Redemption or Purchase Price	43
	Section 3.06.	Notes Redeemed or Purchased in Part	44
	Section 3.07.	Optional Redemption	44
	Section 3.08.	Mandatory Redemption	44
	Section 3.09.	Mandatory Offers to Purchase	45
	Section 3.10.	Offer to Repurchase Upon a Change of Control	47

ARTICLE IV. AFFIRMATIVE COVENANTS			48

	Section 4.01.	Payment of Notes	48
	Section 4.02.	Maintenance of Office or Agency	50
	Section 4.03.	Corporate Existence	50
	Section 4.04.	Compliance Certificate	50
	Section 4.05.	Reporting	51
	Section 4.06.	Insurance	53
	Section 4.07.	Compliance with Laws	53
	Section 4.08.	Taxes	53
	Section 4.09.	New Subsidiaries	54
	Section 4.10.	Security	55
	Section 4.11.	Deposit Accounts; Securities Accounts; Commodity Accounts	55
	Section 4.12.	Records	55
	Section 4.13.	Maintenance of Properties	55
	Section 4.14.	Appraisals	55


	Section 4.15.	Titled Collateral	56
	Section 4.16.	Quarterly Update Calls	56
	Section 4.17.	[Reserved]	56
	Section 4.18.	Further Assurances	56
	Section 4.19.	Additional Material Real Estate Assets	56
	Section 4.20.	Anti-Corruption Laws	57
	Section 4.21.	Additional Subsidiary Guarantees	57
	Section 4.22.	Payments for Consent	57
	Section 4.23.	Floating Interest Rate	58
	Section 4.24.	Post-Issue Date Matters	59

ARTICLE V. NEGATIVE COVENANTS			60

	Section 5.01.	Debt	60
	Section 5.02.	Liens	61
	Section 5.03.	Investments	62
	Section 5.04.	Acquisitions	64
	Section 5.05.	Agreements Restricting Liens or Payments to Company	64
	Section 5.06.	[Reserved]	64
	Section 5.07.	Corporate Actions	65
	Section 5.08.	Dispositions	65
	Section 5.09.	Restricted Payments	66
	Section 5.10.	Affiliate Transactions	67
	Section 5.11.	Line of Business	67
	Section 5.12.	Hazardous Materials	68
	Section 5.13.	Compliance with ERISA	68
	Section 5.14.	Sale and Leaseback Transactions	68
	Section 5.15.	Limitation on Hedging	69
	Section 5.16.	Minimum Asset Coverage Ratio	69
	Section 5.17.	Global Holdings and its Subsidiaries	69
	Section 5.18.	Landlord Agreements	69
	Section 5.19.	Disposal of Subsidiary Interests	70
	Section 5.20.	Amendments or Waivers of Organization Documents, ABL Credit Documents or Material Contracts	70
	Section 5.21.	Fiscal Year	71
	Section 5.22.	Foreign Subsidiaries	71
	Section 5.23.	Negative Pledge	72

ARTICLE VI. SUCCESSORS			72

	Section 6.01.	Merger, Consolidation, or Dispositions of Property	72
	Section 6.02.	Successor Corporation Substituted	73

ARTICLE VII.			73

	Section 7.01.	Events of Default	73
	Section 7.02.	Acceleration	76
	Section 7.03.	Other Remedies	76
	Section 7.04.	Waiver of Past Defaults	76
	Section 7.05.	Control by Majority	76
	Section 7.06.	Limitation on Suits	76
	Section 7.07.	Rights of Holders of Notes to Receive Payment	77
	Section 7.08.	Collection Suit by Trustee	77


	Section 7.09.	Trustee May File Proofs of Claim	77
	Section 7.10.	Priorities	78
	Section 7.11.	Undertaking for Costs	78
	Section 7.12.	Delay or Omission Not Waiver	79

ARTICLE VIII. TRUSTEE			79

	Section 8.01.	Duties of Trustee	79
	Section 8.02.	Rights of Trustee	80
	Section 8.03.	Individual Rights of Trustee	82
	Section 8.04.	Trustee’s Disclaimer	82
	Section 8.05.	Notice of Defaults	82
	Section 8.06.	[Reserved]	83
	Section 8.07.	Compensation and Indemnity	83
	Section 8.08.	Replacement of Trustee	83
	Section 8.09.	Successor Trustee by Merger, etc.	84
	Section 8.10.	Eligibility; Disqualification	85
	Section 8.11.	Limitation on Duty of Trustee in Respect of Collateral: Indemnification	85

ARTICLE IX. LEGAL DEFEASANCE AND COVENANT DEFEASANCE			86

	Section 9.01.	Option to Effect Legal Defeasance or Covenant Defeasance	86
	Section 9.02.	Legal Defeasance and Discharge	86
	Section 9.03.	Covenant Defeasance	87
	Section 9.04.	Conditions to Legal or Covenant Defeasance	87
	Section 9.05.	Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions	88
	Section 9.06.	Repayment to Company	89
	Section 9.07.	Reinstatement.	89

ARTICLE X. AMENDMENT, SUPPLEMENT AND WAIVER			89

	Section 10.01.	Without Consent of Holders of Notes	89
	Section 10.02.	With Consent of Holders of Notes	91
	Section 10.03.	[Reserved]	92
	Section 10.04.	Revocation and Effect of Consents	92
	Section 10.05.	Notation on or Exchange of Notes	93
	Section 10.06.	Trustee to Sign Amendments, etc.	93

ARTICLE XI. SATISFACTION AND DISCHARGE			93

	Section 11.01.	Satisfaction and Discharge	93
	Section 11.02.	Application of Trust Money	94

ARTICLE XII. GUARANTEES			95

	Section 12.01.	Guarantee	95
	Section 12.02.	Limitation on Guarantor Liability	96
	Section 12.03.	Execution and Delivery of Subsidiary Guarantee	97
	Section 12.04.	Release	97

ARTICLE XIII. COLLATERAL			97

	Section 13.01.	Security Documents	97
	Section 13.02.	Security Agent	98
	Section 13.03.	Authorization of Actions to Be Taken	99

iii


	Section 13.04.	Release of Collateral	100
	Section 13.05.	Powers Exercisable by Receiver or Trustee	101
	Section 13.06.	Release upon Termination of the Notes Obligations	101

ARTICLE XIV. MISCELLANEOUS			101

	Section 14.01.	[Reserved]	101
	Section 14.02.	Notices	101
	Section 14.03.	[Reserved.]	103
	Section 14.04.	Certificate and Opinion as to Conditions Precedent	103
	Section 14.05.	Statements Required in Certificate or Opinion	103
	Section 14.06.	Rules by Trustee and Agents	103
	Section 14.07.	No Personal Liability of Directors, Officers, Employees and Stockholders	103
	Section 14.08.	Governing Law; Consent to Jurisdiction: Waiver of Jury Trial	104
	Section 14.09.	No Adverse Interpretation of Other Agreements	104
	Section 14.10.	Successors	104
	Section 14.11.	Severability	104
	Section 14.12.	Counterpart Originals	104
	Section 14.13.	Table of Contents, Headings, etc.	105
	Section 14.14.	Benefit of Indenture	105
	Section 14.15.	Legal Holidays	105
	Section 14.16.	Calculations	105
	Section 14.17.	PATRIOT Act	105



EXHIBITS

Exhibit A		FORM OF NOTE
Exhibit B-1		FORM OF CERTIFICATE OF TRANSFER
Exhibit B-2		FORM OF ACCREDITED INVESTOR CERTIFICATE
Exhibit C		FORM OF CERTIFICATE OF EXCHANGE
Exhibit D		FORM OF NOTATION OF GUARANTEE
Exhibit E		FORM OF SUPPLEMENTAL INDENTURE



SCHEDULES

Schedule 5.01		INDEBTEDNESS
Schedule 5.02		PERMITTED LIENS
Schedule 5.03		PERMITTED INVESTMENTS

INDENTURE, dated as of May 29, 2020, among Pioneer Energy Services Corp. a Delaware corporation (the “Company”), the Guarantors (as defined herein) and Wilmington Trust, National Association, and any and all successors thereto, as trustee (in such capacity, the “Trustee”) and security agent (in such capacity, the “Security Agent”) in each case for the Holders of the Notes.

The Company, the Guarantors, the Trustee and the Security Agent agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined herein) of the Senior Secured Floating Rate Notes due 2025 (the “Notes”):

ARTICLE I.

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

“ABL Administrative Agent” means PNC Bank, National Association, in its capacity as administrative agent for the ABL Credit Agreement.

“ABL Credit Agreement” means that certain Credit Agreement, dated as of the date hereof, by and among the Company and certain subsidiaries of its Subsidiaries, as borrowers, the ABL Lenders from time to time party thereto, the ABL Administrative Agent and PNC Bank, National Association, as sole lead arranger and sole bookrunner, as may be amended, restated, amended and restated, supplemented or otherwise modified, and as it may be refinanced or replaced in accordance with the ABL Intercreditor Agreement (including any Replacement ABL Credit Agreement (as defined in the ABL Intercreditor Agreement)).

“ABL Credit Documents” means the ABL Credit Agreement, the ABL Intercreditor Agreement, all notes, guarantees, security agreements, mortgages, pledge agreements, notices, and each other agreement, instrument, or document executed at any time in connection with the ABL Credit Agreement.

“ABL Intercreditor Agreement” means the Intercreditor Agreement, dated as of the date hereof, between the Trustee and the ABL Administrative Agent, as it may be amended, restated, amended and restated, supplemented or otherwise modified in accordance with the terms hereof.

“ABL Lender” means any Lender (as such term is defined in the ABL Credit Agreement).

“ABL Obligations” has the meaning set forth in the ABL Intercreditor Agreement.

“ABL Priority Collateral” has the meaning set forth in the ABL Intercreditor Agreement.

“Acceptable Security Interest” means a security interest which (1) exists in favor of the Security Agent for its benefit and the ratable benefit of the Secured Parties, (2) secures the obligations under the Notes, (3) is enforceable against the Notes Party which created such security interest and (4) upon the filing of appropriate financing statements and/or the completion of other actions as required under the UCC and any other applicable law, is perfected.

“Access and Subordination Agreement” has the meaning set forth in Section 5.18(a) (“Landlord Agreements”).

“Account” has the meaning set forth in Section 9-102(a)(2) of the UCC.

“Account Control Agreement” means, with respect to any deposit account, securities account or commodity account of a Notes Party held with a bank or securities intermediary, an agreement or agreements among the Notes Party owning such deposit, securities or commodity account, as applicable, the Security Agent, the ABL Administrative Agent (to the extent that the ABL Credit Agreement is in existence) and such other bank or securities intermediary, which provides that the security interest of the Security Agent over such account is an Acceptable Security Interest that is superior to all other Liens (other than Permitted Priority Liens).

“Acquisition” means the purchase by the Company or any Subsidiary of (a) all or substantially all of the assets of any other Person, (b) all or substantially all of the assets constituting a division, business unit or line of business of any other Person, or (c) all of the Equity Interests of a Person.

“Additional Notes Collateral Debt” means additional senior secured debt of the Company subject to, and with a priority specified in, the ABL Intercreditor Agreement; provided that such Additional Notes Collateral Debt has been consented to in writing by the Holders of a majority in aggregate principal amount of the Notes then outstanding and by the applicable stockholders in accordance with the By-laws of the Company; and, provided, further, that the incurrence of such Additional Notes Collateral Debt shall be subject to the Additional Notes Collateral Debt ROFO.

“Additional Notes Collateral Debt ROFO” means that, prior to the incurrence of Additional Notes Collateral Debt, the Company’s Board of Directors shall first solicit an offer to provide not less than the full amount of such Additional Notes Collateral Debt from one or more of the Holders (who may provide such Debt pro rata to their respective holdings of Notes or otherwise). The Holders shall have 10 Business Days from the date of receipt of such written solicitation to provide such offer, during which time third parties may also submit offers to provide not less than the full amount of such Additional Notes Collateral Debt. Any such offer by a Holder or third party shall contain the terms of such Debt in reasonable detail and an unconditional (save for customary closing deliverables and documentation substantially identical to the Notes Documents) and irrevocable undertaking to either fund such Additional Notes Collateral Debt within 30 days after the acceptance of such offer or to execute, at any time on or after the 10^th Business Day but no later than 45^th day after the acceptance of such offer, a binding agreement (which shall be subject to no conditions other than customary closing deliverables) to fund such Additional Notes Collateral Debt, which agreement shall be substantially in the form of the Note Documents (or such other form as may be acceptable to the Company). The Company shall have 10 Business Days after the receipt of the Holders’ offer(s) to either incur such Debt on terms previously offered by the Holders or reject the offer(s). If no Additional Notes Collateral Debt has been incurred on the same or better terms (taken as a whole and at the sole determination of the Company’s Board of Directors) than those provided by the Holders within 45 days after the rejection by the Company of the Holders’ offer(s), the Additional Notes Collateral Debt ROFO shall reattach to any subsequent incurrence (or intended incurrence) of the Additional Notes Collateral Debt.

“Affiliate” means, as to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person or any Subsidiary of such Person. The term “control” (including the terms “controlled by” or “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership, by contract, or otherwise.

“Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent or administrative agent.

“AI” means an “accredited investor” as defined in Rule 501(a) of Regulation D.

“AI 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 to AIs in reliance on Regulation D.

“Annual Rent” means, with respect to a particular Leased Premises, an aggregate amount equal to all such rental or other payments in a 12 month period for such Leased Premises as of the Issue Date.

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Company or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

“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 that apply to such transfer or exchange.

“Applicable Reserve Requirement” means, at any time, the maximum rate, expressed as a decimal, at which reserves (including any basic marginal, special, supplemental, emergency or other reserves) are required to be maintained with respect thereto against Eurocurrency Liabilities under regulations issued from time to time by the Federal Reserve Board or other applicable banking regulator. Without limiting the effect of the foregoing, the Applicable Reserve Requirement shall reflect any other reserves required to be maintained by such member banks with respect to (i) any category of liabilities which includes deposits by reference to which the applicable LIBOR or any other interest rate of a loan is to be determined, or (ii) any category of extensions of credit or other assets.

“Approved Appraiser” means each of (i) Hilco Valuation Services, and (ii) any other industry recognized third party appraiser.

“Asset Coverage Ratio” as of any date of determination, means the ratio, determined on a consolidated basis for the Company and its Subsidiaries, of (a) the sum of (i) the NOLV of the machinery, parts, Equipment and other fixed assets (other than any machinery, parts, Equipment or other fixed assets that currently constitute, or have ever constituted, Excepted Real Estate Assets or Excepted Certificated Equipment and Motor Vehicles), in each case, constituting Collateral in which the Security Agent has an Acceptable Security Interest that is perfected as of such date of determination and is superior to all other Liens other than Permitted Priority Liens, plus (ii) the aggregate amount of Disposition Proceeds Collateral to (b) the outstanding principal amount of the Debt of the Company and its Subsidiaries under the Notes Documents plus the amount of all Debt under Hedging Arrangements.

“Attributable Debt” means, on any date, (1) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP in all material respects, and (2) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“Bank Product Obligations” has the meaning assigned to such term in the ABL Credit Agreement.

“Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

“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 Sections 13(d) and 14(d) 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 upon the occurrence of a subsequent condition. The terms “Beneficially Owns”, “Beneficially Owned” and “Beneficial Ownership” have correlative meanings.

“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation;

(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; and with respect to each of the foregoing, any committee thereof duly authorized to act on behalf thereof.

“Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York or the place of payment of any principal amount, interest or premium with respect to the Notes is payable, are authorized or required by law, regulation or executive order to close.

“Calculation Agent” means the institution designated as such pursuant to Section 2.13 (“Calculation Agent”).

“Capital Leases” means, for any Person, any lease of any Property by such Person as lessee which would, in accordance with GAAP in all material respects, be required to be classified and accounted for as a capital lease on the balance sheet of such Person; provided that, any lease that was treated as an operating lease under GAAP at the time it was entered into and that later becomes a capital lease (or is treated for accounting purposes substantially similar to that of a capital lease) as a result of the change in GAAP that occurs during the life of such lease, including any renewals, shall be treated as an operating lease for all purposes under this Indenture.

“Capitalized Amount” means, for each PIK Interest Payment Date, an amount per Note equal to 50% of the interest accrued on the Capitalized Principal Amount as of the immediately preceding PIK Interest Payment Date (or, if there is no immediately preceding PIK Interest Payment Date, the interest accrued on the Initial Principal Amount), calculated at the rate specified in the form of Note for the period from, and including, such immediately preceding Interest Payment Date (or, if there is no immediately preceding Interest Payment Date, from, and including, the Issue Date) to, but excluding, such Interest Payment Date.

“Capitalized Principal Amount” means, for any date, the principal amount per Note equal to the Initial Principal Amount of such Note, as increased on each PIK Interest Payment Date on or prior to such date by the Capitalized Amount for each such Interest Payment Date. When the term “principal amount” of any Note is used herein, such reference(s) shall be deemed to be reference(s) to the Capitalized Principal Amount of such Note, unless the context otherwise requires.

“Cash Equivalents” means:

(1) United States dollars;

(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) having maturities of not more than one year from the date of acquisition;

(3) certificates of deposit and Eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year from the date of acquisition and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson BankWatch Rating of “B” or better;

(4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper having the highest rating obtainable from Moody’s or S&P and in each case maturing within one year after the date of acquisition; and

(6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition.

“Cash Management Agreement” means any agreement to provide to the Company or any Subsidiary cash management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account relationships, commercial credit cards, merchant card, purchase or debit cards (including so called “procurement cards” or “p-cards”), non-card e-payables services, and other cash management services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.

“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, state and local analogs, and all rules and regulations and requirements thereunder in each case as now or hereafter in effect.

“Certificated Equipment” means any Equipment the ownership of which is evidenced by, or under applicable Legal Requirement, is required to be evidenced by, a certificate of title.

“Certificated Motor Vehicles” means any motor vehicles, tractors, trailers, and other like individual mobile goods, the ownership of which is evidenced by, or under applicable Legal Requirement, is required to be evidenced by, a certificate of title.

“Certificated Note” means a definitive Note in certificated form which is registered in the name of the Holder thereof and issued in accordance with Section 2.06 (“Transfer and Exchange”) 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.

“CFC” means a “controlled foreign corporation” as defined in Section 957 of the Code.

“Change of Control” means an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934), except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time, directly or indirectly, of 50% or more of the equity securities of the Company entitled to vote for members of the Board of Directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right) or (b) the Company sells or otherwise Disposes of all or substantially all of the assets of the Company and the Guarantors; provided that in no event shall the consummation of the transactions contemplated by the Transaction Agreement (including pursuant to the securities purchase agreement referred to therein but excluding, for the avoidance of doubt, subsequent transfers of securities not required by the Transaction Agreement) constitute a Change of Control; and, provided, further, that no securityholders of the Company on the Issue Date (after giving effect to the transactions contemplated by the Transaction Agreement) shall constitute a “group” for purposes of this definition solely by virtue of the voting agreements among, or commonality of interests of, such securityholders in bankruptcy proceedings with respect to the Company immediately prior to the Issue Date.

“Code” means the Internal Revenue Code of 1986, as amended, the regulations promulgated thereunder and published interpretations thereof.

“Collateral” means, collectively, all Property of the Company and the Guarantors which is “Collateral” or similar terms described in any Security Agreement, any Mortgage, any Account Control Agreement or any other Security Document from time to time.

“Colombian Group” means, collectively, (i) Pioneer Latina Group SDAD, Ltda., a Panama corporation, (ii) Pioneer de Colombia SDAD, Ltda., a Panama corporation, (iii) Pioneer de Colombia SDAD, Ltd. (Colombia branch), (iv) Proveedora Internacional de Taladros S.A.S. and (v) Subsidiaries of the foregoing.

“Company” means Pioneer Energy Services Corp., a Delaware corporation, and any and all successors thereto.

“Compliance Certificate” means a compliance certificate executed by a Financial Officer of the Company or such other Person as required by this Indenture that shall include a certification by a Financial Officer of the Company that no Default has occurred and is continuing together with calculations demonstrating compliance by the Company and its Subsidiaries with their respective financial covenants.

“Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that (without duplication):

(1) the Net Income (but not loss) of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or distributions paid in cash to the referent Person or a Subsidiary;

(2) the Net Income of any Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders; and

(3) the cumulative effect of a change in accounting principles will be excluded.

“Controlled Group” means all members of a controlled group of corporations and all businesses (whether or not incorporated) under common control which, together with the Company, are treated as a single employer under Section 414 of the Code.

“Convertible Bonds” means the 5% convertible senior unsecured payment-in-kind notes due 2025 issued by the Company pursuant to the indenture dated as of the date hereof, in the initial aggregate principal amount as of the date hereof of up to $129,771,000.

“Convertible Bond Indenture” means the indenture dated as of the date hereof between the Company and Wilmington Trust, National Association, as trustee, pursuant to which the Company issued the Convertible Bonds.

“Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 14.02 (“Notices”) hereof or such other address as to which the Trustee may give notice to the Company.

“Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

“Debt” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(1) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(2) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(3) net obligations of such Person under any Hedging Arrangement;

(4) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than one hundred twenty (120) days after the date on which such trade account payable was created);

(5) Debt (excluding prepaid interest thereon) secured by a Lien on property owned by such Person (including Debt arising under conditional sales or other title retention agreements), whether or not such Debt shall have been assumed by such Person or is limited in recourse;

(6) Capital Leases and Synthetic Lease Obligations;

(7) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, excluding obligations arising in connection with employee benefit plans with respect to fractional shares, or which are payable solely in Equity Interests;

(8) all Guarantees of such Person in respect of any of the foregoing; and

(9) all liabilities of such Person payable in cash in respect of unfunded vested benefits under any Plan.

For all purposes hereof, the Debt of any Person shall include the Debt of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Debt is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Arrangement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Debt in respect thereof as of such date.

“Default” means (a) an Event of Default or (b) any event or condition which with notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“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 (“Registrar and Paying Agent”) 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.

“Discharge of ABL Obligations” has the meaning set forth in the ABL Intercreditor Agreement.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any Property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Disposition Proceeds Collateral” means the aggregate amount of Net Disposition Proceeds received by a Notes Party in connection with a Disposition to the extent that (i) such Disposition is permitted by Section 5.08 (“Dispositions”), (ii) such Notes Party is not required to use such Net Disposition Proceeds to make a mandatory offer to purchase pursuant to Section 3.09 (“Mandatory Offers to Purchase”) or pursuant to the ABL Credit Agreement, and (iii) such Net Disposition Proceeds are on deposit in the Disposition Proceeds Collateral Account.

“Disposition Proceeds Collateral Account” means each segregated deposit account of a Notes Party that is used for the purpose of holding Disposition Proceeds Collateral and is subject to an Account Control Agreement that provides for full and immediate control by the Security Agent.

“Domestic Subsidiary” means a Subsidiary incorporated or organized under the laws of the United States of America, any State thereof or the District of Columbia.

“Environment” shall have the meanings set forth in 42 U.S.C. § 9601(8).

“Environmental Law” means all applicable federal, state, and local laws, rules, regulations, ordinances, orders, decisions, agreements, and other requirements, including common law theories, now or hereafter in effect and relating to, or in connection with the Environment, health, or safety, including without limitation CERCLA, relating to (a) pollution, contamination, injury, destruction, loss, protection, cleanup, reclamation or restoration of the air, surface water, groundwater, land surface or subsurface strata, or other natural resources; (b) solid, gaseous or liquid waste generation, treatment, processing, recycling, reclamation, cleanup, storage, disposal or transportation; (c) exposure to pollutants, contaminants, hazardous, medical infections, or toxic substances, materials or wastes; (d) the safety or health of employees; or (e) the manufacture, processing, handling, transportation, distribution in commerce, use, storage or disposal of hazardous, medical infections, or toxic substances, materials or wastes.

“Equipment” of any Person means all equipment (as defined in the UCC) owned by such Person, wherever located.

“Equity Interest” means with respect to any Person, any shares, interests, participation, or other equivalents (however designated) of corporate stock, membership interests or partnership interests (or any other ownership interests) of such Person (but excluding any debt security that is convertible into, or exchangeable for, capital stock of such Person).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

“Eurocurrency Liabilities” has the meaning assigned to that term in Regulation D of the Federal Reserve Board as in effect from time to time.

“Event of Default” has the meaning specified in Section 7.01.

“Excepted Certificated Equipment and Motor Vehicles” means (a) each Certificated Equipment or Certificate Motor Vehicle owned by a Notes Party (that is not subject to a Permitted Lien securing purchase money Debt or Capital Leases which are permitted hereunder) with an individual net book value of less than $50,000 but not to exceed $2,500,000 in the aggregate, and (b) all Certificated Equipment or Certificate Motor Vehicles to the extent such equipment or motor vehicle is subject to a Permitted Lien securing purchase money Debt or Capital Leases which are permitted hereunder.

“Excepted Liens” means:

(a) Liens imposed by law, such as materialmen’s, mechanics’, carriers’, warehouseman’s, workmen’s, suppliers’, landlords’, maritime, operators’, vendors’ and repairmen’s liens, and other similar liens (including Liens of sellers of goods arising under Article 2 of the UCC or similar provisions of applicable law) arising in the ordinary course of business securing obligations which are not overdue for a period of more than thirty (30) days or if more than thirty (30) days overdue, (1) are being contested in good faith by appropriate procedures or proceedings and for which adequate reserves have been established and (2) with respect to which the failure to make payment does not materially adversely affect the value or the use by the Company or its Subsidiaries of the Property subject to such Liens;

(b) Liens arising in the ordinary course of business out of pledges or deposits under workers compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation to secure public or statutory obligations;

(c) Liens for Taxes, assessments, or other governmental charges (1) which are being actively contested in good faith by appropriate proceedings and for which adequate reserves have been established in compliance with GAAP or (2) with respect to which the failure to make payment could not reasonably be expected to have a Material Adverse Change;

(d) encumbrances consisting of easements, zoning restrictions, or other restrictions on the use of real Property that do not (individually or in the aggregate) materially affect the value of the assets encumbered thereby or materially impair the ability of the Company or a Subsidiary to use such assets in its business, and none of which is violated in any material aspect by existing or proposed structures or land use;

(e) 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 and burdening only deposit accounts or other funds maintained with a depository institution;

(f) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business and cash deposits to secure letters of credit in respect of the foregoing;

(g) any interest or title of a licensor or sublicensor under any license entered into by the Company or its Subsidiaries; provided that (1) such license is entered into in the ordinary course of business, (2) such interest or title of licensor or sublicensor does not interfere in any material respect in the business of the Company or its Subsidiaries, (3) such interest or title, if in the form of a Lien, secures only the obligations arising under such license, and (4) such interest or title only affects the property subject to such license or the proceeds thereof;

(h) any interest or title of a lessor or sublessor under any operating lease entered into by the Company or its Subsidiaries; provided that (1) such lease is entered into, and any Liens arise, in the ordinary course of business, (2) any Liens secure obligations which are not overdue for a period of more than thirty (30) days or if more than thirty (30) days overdue, are being contested in good faith by appropriate procedures or proceedings and for which adequate reserves have been established, (3) any Liens secure only the obligations arising under such lease and not debt for borrowed money, and (4) any Liens only encumber property that is subject to such lease (including Property located on the premises subject to the lease) and insurance proceeds thereof;

(i) judgment and attachment Liens not giving rise to an Event of Default, provided that (1) any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and (2) no action to enforce such Lien has been commenced;

(j) Liens arising out of any conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business;

(k) customary set off and netting rights and related settlement procedures under any Hedging Agreement permitted hereunder; and

(l) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

provided that no intention to subordinate any Lien granted in favor of the Security Agent for the benefit of the Secured Parties is to be hereby implied or expressed by the permitted existence of such Excepted Liens.

“Excepted Real Estate Assets” means each Real Estate Asset owned by a Notes Party as of the Issue Date that has an individual net book value of less than $2,500,000 but not to exceed $5,000,000 in the aggregate when taken together with all other Real Estate Assets constituting “Excepted Real Estate Assets.”

“Excess Cash Amount” has the meaning set forth in Section 5.22.

“Excess Cash Distribution Deadline” has the meaning set forth in Section 5.22.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.

“Excluded Accounts” means, collectively, each deposit account or securities account that (a) is used solely for the purpose of holding amounts necessary to fund, in the ordinary course of business and consistent with past practice, (1) payroll and related payroll Taxes or (2) sales Taxes and other Tax obligations of the Notes Parties for which officers and directors could incur personal liability if not paid, or (b) does not contain individually, or in the aggregate with other accounts excluded pursuant to this clause (b), more than $1,000,000.00 at any time outstanding; provided, that no Disposition Proceeds Collateral Account shall ever constitute an Excluded Account.

“Fair Market Value” means, with respect to consideration received or to be received, or given or to be given, pursuant to any transaction by the Company or any of its Subsidiaries, if such consideration is in an amount of at least $25.0 million, the fair market value of such consideration as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive and evidenced by a resolution of such Board of Directors, and if consideration is less than $25.0 million, the sale value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or exigent necessity of either party, determined in good faith by a responsible officer of the Company (unless otherwise expressly provided in this Indenture).

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System or any of its successors.

“Financial Officer” means, with respect to any Notes Party, the chief executive officer, chief financial officer, chief accounting officer or treasurer.

“Financial Statements” means, for any period, (a) the consolidated Financial Statements of the Company and its Subsidiaries, including statements of income, shareholder equity and comprehensive income and cash flow for such period as well as a balance sheet as of the end of such period and (b) the consolidated Financial Statements of Global Holdings and its Subsidiaries, including statements of income and cash flow for such period as well as a balance sheet as of the end of such period, in each case, all prepared in accordance with GAAP in all material respects.

“First-Tier CFC” means each CFC or FSHC with respect to which any one or more of the Company and its Domestic Subsidiaries (other than an FSHC) directly owns or controls a majority of such CFC’s or FSHC’s Voting Securities (other than directors’ qualifying shares).

“Flood Insurance Regulations” means, collectively, (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, (d) the Flood Insurance Reform Act of 2004, (e) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto and (f) any regulations promulgated thereunder.

“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

“FSHC” means a Domestic Subsidiary that has no material assets other than Equity Interests in, and Debt of, CFCs and other FSHCs.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entities as have been approved by a significant segment of the accounting profession, which are applicable at the date of determination.

“Global Holdings” means Pioneer Global Holdings, Inc., a Delaware corporation.

“Global Note Legend” means the legend set forth in Section 2.06(g)(2) (“Transfer and Exchange—Legends—Global Note Legend”) 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, (i) substantially in the form of Exhibit A hereto, (ii) deposited with or on behalf of and registered in the name of the Depositary or its nominee, (iii) that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and (iv) issued in accordance with Sections 2.01 (“Form and Dating”), 2.06(b)(3) (“Transfer and Exchange—Transfer and Exchange of Beneficial Interests in the Global Notes—Transfer of Beneficial Interests to Another Restricted Global Note”), 2.06(b)(4) (“Transfer and Exchange—Transfer and Exchange of Beneficial Interests in the Global Notes— Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note”), 2.06(d)(1) (“Transfer and Exchange—Transfer and Exchange of Certificated Notes for Beneficial Interests—Restricted Certificated Notes to Beneficial Interests in Restricted Global Notes”), 2.06(d)(2) (“Transfer and Exchange—Transfer and Exchange of Certificated Notes for Beneficial Interests—Restricted Certificated Notes to Beneficial Interests in Unrestricted Global Notes”) or 2.06(d)(3) (“Transfer and Exchange— Transfer and Exchange of Certificated Notes for Beneficial Interests—Unrestricted Certificated Notes to Beneficial Interests in Unrestricted Global Notes”) hereof.

“Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States of America pledges its full faith and credit.

“Guarantee” means a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, of all or any part of any Debt in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof (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).

“Guarantors” means each of:

(1) the Company’s Domestic Subsidiaries in existence on the date of the Indenture;

(2) any other Subsidiary that executes a Subsidiary Guarantee in accordance with the provisions of this Indenture; and

(3) their respective successors and assigns;

provided that any Person constituting a Guarantor as described above will cease to constitute a Guarantor when its respective Subsidiary Guarantee is released in accordance with the terms thereof.

“Hazardous Substance” means any substance or material identified as such pursuant to CERCLA and those regulated under any other Environmental Law, including without limitation pollutants, contaminants, flammable substances and materials, explosives, radioactive materials, oil, petroleum and petroleum products, chemical liquids and solids, polychlorinated biphenyls, asbestos, toxic substances, radionuclides, radioactive materials and any other materials regulated under Environmental Laws.

“Hazardous Waste” means any substance or material regulated or designated as such pursuant to the Resource Conservation and Recovery Act, 42 U.S.C. §§ 6901, et seq., and any regulations promulgated thereto.

“Hedging Arrangement” means a hedge, call, swap, collar, floor, cap, option, forward sale or purchase or other contract or similar arrangement (including any obligations to purchase or sell any commodity or security at a future date for a specific price) which is entered into to reduce or eliminate or otherwise protect against the risk of fluctuations in prices or rates, including interest rates, foreign exchange rates, commodity prices and securities prices.

“Holder” means a Person in whose name a Note is registered on the Registrar’s books.

“Immaterial Subsidiary” means any Subsidiary that had:

(1) assets having an aggregate book value, as of the end of the fiscal year most recently ended, not exceeding $250,000; and

(2) Consolidated Net Income not exceeding $250,000 for such fiscal year, provided that a Subsidiary will not be considered to be an Immaterial Subsidiary if it, directly or indirectly, guarantees or otherwise provides direct credit support for any Debt of the Company.

“Indenture” means this Indenture pursuant to which the Notes will be issued among the Company, the Guarantors, the Trustee and the Security Agent, as amended, supplemented or modified.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

“Initial Notes” means the $78,125,000 aggregate principal amount of Notes issued under this Indenture on the date hereof.

“Initial Principal Amount” of any Note means the principal amount of such Note on the Issue Date.

“Intercompany Note” means any promissory note among the applicable Notes Parties and/or Subsidiaries that is collaterally assigned to the Security Agent for its benefit and the benefit of the Secured Parties to the extent required by the Security Documents.

“Intercompany Subordination Agreement” means an intercompany subordination agreement, dated as of even date with this Agreement, executed and delivered by each Notes Party and each of its Subsidiaries, the Trustee, the trustee to the Convertible Bonds, and the ABL Administrative Agent, the form and substance of which is reasonably satisfactory to the Trustee.

“Interest Determination Date” has the meaning set forth in Section 4.23(a).

“Interest Payment Date” has the meaning set forth in Section 4.23(g)

“Inventory” of any Person means all inventory (as defined in the UCC) owned by such Person, wherever located and whether or not in transit, which is held for sale.

“Investment” means, with respect to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest of another Person, (b) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of such Person, or (c) any loan, advance or capital contribution to, Guarantee or assumption of Debt of, or purchase or other acquisition of any other Debt or interest in, another Person; provided that any loan, advance or capital contribution by any Notes Party or Subsidiary to any member of the Colombian Group in an amount not to exceed the customary fees necessary for the nationalization of drilling rigs numbered 21, 51 and 55 shall not constitute an “Investment”; provided such loans, advances or capital contributions shall not exceed $10,000,000 in the aggregate. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Issue Date” means the date of this Indenture and the date the Initial Notes are first issued.

“Leased Premises” means each of the premises (other than leases of residential real property interests) leased by a Notes Party as of the Issue Date.

“Legal Requirement” means any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any governmental authority, including, but not limited to, Regulations T, U and X.

“LIBOR” has the meaning set forth in Section 4.23(b).

“Lien” means any mortgage, lien, pledge, charge, deed of trust, security interest, or encumbrance to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law, or otherwise (including the interest of a vendor or lessor under any conditional sale agreement, Capital Lease, or other title retention agreement).

“Liquid Investments” means (a) readily marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by the full faith and credit of the United States of America; (b) commercial paper issued by (i) any ABL Lender or any Affiliate of any ABL Lender or (ii) any commercial banking institutions or corporations rated at least P-1 by Moody’s or A-1 by S&P; (c) certificates of deposit, time deposits, and bankers’ acceptances issued by (i) any ABL Lender or (ii) any other commercial banking institution which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $250,000,000.00 and rated Aa by Moody’s or AA by S&P; (d) repurchase agreements which are entered into with any major money center banks included in the commercial banking institutions described in clause (c) and which are secured by readily marketable direct full faith and credit obligations of the government of the United States of America or any agency

thereof; (e) investments in any money market fund which holds investments substantially of the type described in the foregoing clauses (a) through (d); and (f) short term investments by Foreign Subsidiaries made with the goal of preservation of capital, which investments are customary for short term cash management for similarly situated business enterprises in the jurisdiction in which any such Foreign Subsidiary is conducting business. All the Liquid Investments described in clauses (a) through (d) above shall have maturities of not more than 365 days from the date of issue.

“Material Adverse Change” means a material adverse change (a) in the business, condition (financial or otherwise), or results of operations of the Company and the Subsidiaries, taken as a whole; (b) on the validity or enforceability of this Indenture or any of the other Notes Documents; or (c) on the ability of the Company, individually, or the Notes Parties, collectively, to perform their obligations under this Indenture, any Note, the Subsidiary Guarantees or any other Notes Document.

“Material Contract” means each contract or agreement to which a Notes Party or Subsidiary is a party that is deemed to be a material contract or material definitive agreement under the Securities Act of 1933 or the Securities Exchange Act of 1934 or other federal securities laws, including, without limitation, the types of contracts specified in item 601(b)(10)(ii) of Regulation S-K, and in the event that at any time hereafter the Company ceases to be required to comply with the Securities Laws, then the same definitions shall continue to apply for purposes of this Indenture and the other Notes Documents.

“Moody’s” means Moody’s Investors Service, Inc. or any successor to the rating agency business thereof.

“Mortgage” means any mortgage, deed of trust, leasehold mortgage, leasehold deed of trust or similar security document entered into by any Notes Party in favor of the Security Agent for the benefit of the Secured Parties, in respect of Mortgaged Property owned by such Notes Party.

“Mortgaged Property” means any Property owned by a Notes Party which is subject to the Liens existing and to exist under the terms of any Mortgage.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA.

“Net Disposition Proceeds” means, with respect to any Disposition, an amount equal to: (i) cash payments (including any cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise (including by way of a milestone payment), but only as and when so received) received by the Company or any of its Subsidiaries from such Disposition, minus (ii) any actual costs incurred in connection with such Disposition, including (a) income or gains taxes payable by the seller as a result of any gain recognized in connection with such Disposition, (b) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Debt (other than the Notes) that is secured by a Lien on the stock or assets subject to such Disposition and that is required to be repaid under the terms thereof as a result of such Disposition and (c) a reasonable reserve for any indemnification payments (fixed or contingent) attributable to seller’s indemnities and representations and warranties to purchaser in respect of such Disposition undertaken by the Company or any of its Subsidiaries in connection with such Disposition; provided that upon release of any such reserve, the amount released shall be considered Net Disposition Proceeds.

“Net Income” means, for any period and with respect to any Person, the net income for such period for such Person after Taxes as determined in accordance with GAAP, excluding, however, (a) extraordinary items, including, for the avoidance of doubt, any extraordinary items that constitute (i) any net non-cash gain or loss during such period arising from the sale, exchange, retirement or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business and (ii) any write-up or write-down of assets, (b) the net income of any Person (other than a Subsidiary) in which any other Person (other than the Company or any of its Subsidiaries) has a joint interest, except to the extent of the amount of cash dividends or other cash distributions actually paid to the Company or any of its Subsidiaries by such Person during such period, and (c) the net income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary.

“Net Insurance/Condemnation Proceeds” means an amount equal to: (i) any cash payments or proceeds received by the Company or any of its Subsidiaries (a) under any casualty insurance policy in respect of a covered loss thereunder or (b) as a result of the taking of any assets of the Company or any of its Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, minus (ii) (a) any actual costs incurred by the Company or any of its Subsidiaries in connection with the adjustment, settlement or other realization of any claims of the Company or such Subsidiary in respect thereof, and (b) any actual costs incurred in connection with any sale of such assets as referred to in clause (i)(b) of this definition, including income taxes payable as a result of any gain recognized in connection therewith.

“NOLV” means, as of any date of determination, with respect to any machinery, parts, Equipment and other fixed assets of the Company or a Guarantor, the net orderly liquidation value thereof (taking into account any loss, destruction, damage, condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, confiscation, or the requisition, of such Property and after taking into account all soft costs associated with the liquidation thereof, including but not limited to, delivery fees, interest charges, finance fees, taxes, installation fees and professional fees) as established by the appraisal most recently delivered pursuant to Section 4.14.

“Notes” has the meaning assigned to it in the preamble to this Indenture. Unless the context otherwise requires, all references to the “Notes” shall include the Initial Notes and any PIK Notes.

“Notes Documents” means this Indenture, the Notes, the Subsidiary Guarantees, the Security Documents, the ABL Intercreditor Agreement and each other agreement, instrument, or document executed at any time in connection with this Indenture.

“Notes Obligations” means the Obligations due by any Notes Party under this Indenture, the Notes and any other Notes Documents.

“Notes Parties” means the Company and the Guarantors, and each, individually, a Notes Party.

“Obligations” means, without duplication, any principal, premium, if any, interest (including interest accruing on or after the filing of any petition in bankruptcy or for reorganization relating to the Company or its Subsidiaries, whether or not a claim for post-filing interest is allowed in such proceeding), penalties, fees, charges, expenses, indemnifications, reimbursement obligations, damages, guarantees, and other liabilities or amounts payable under the documentation governing any Debt or in respect thereof.

“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.

“Officers’ Certificate” means a certificate signed on behalf of the Company by two Officers of the Company, one of whom 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 14.05 (“Statements Required in Certificate or Opinion”) hereof.

“Opinion of Counsel” means an opinion from legal counsel to the Company or any of its Subsidiaries that meets the requirements of Section 14.05 (“Statements Required in Certificate or Opinion”) hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company.

“Organization Documents” means (a) for any corporation, the certificate or articles of incorporation and the bylaws, (b) for any partnership, the partnership agreement and, if applicable, certificate of limited partnership or (c) for any limited liability company, the operating agreement and articles or certificates of formation or incorporation.

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Permitted Debt” has the meaning set forth in Section 5.01 (“Debt”).

“Permitted Investments” has the meaning set forth in Section 5.03 (“Investments”).

“Permitted Liens” has the meaning set forth in Section 5.02 (“Liens”).

“Permitted Priority Liens” means (i) in the case of Collateral constituting Equity Interests, non-consensual Excepted Liens arising by operation of law, (ii) in the case of Collateral constituting accounts covered by Account Control Agreements, (A) non-consensual Excepted Liens arising by operation of law and (B) only to the extent such accounts constitute ABL Priority Collateral, Liens permitted by Section 5.02(i), (iii) in the case of any Collateral not covered by clauses (i)-(ii), Liens permitted by Section 5.02(i) (only to the extent such Collateral constitutes ABL Priority Collateral) and Excepted Liens and (iv) Liens permitted by Section 5.02(h); provided that no intention to subordinate any Lien granted in favor of the Security Agent for the benefit of the Secured Parties is to be hereby implied or expressed by the permitted existence of such Permitted Priority Liens.

“Person” means an individual, partnership, corporation (including a business trust), joint stock company, trust, limited liability company, limited liability partnership, unincorporated association, joint venture, or other entity, or a government or any political subdivision or agency thereof, or any trustee, receiver, custodian, or similar official.

“PIK Interest” means the amount of interest paid other than in cash on each PIK Interest Payment Date pursuant to Section 2.12(a).

“PIK Interest Payment Date” means any Interest Payment Date occurring on or prior to the first anniversary of the Issue Date.

“PIK Notes” has the meaning set forth in Section 2.12(a).

“Pioneer Services” means Pioneer Services Holdings, LLC, a Delaware limited liability company.

“Plan” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of the Company or any member of the Controlled Group or with respect to which the Company or any member of the Controlled Group has any liability and that is subject to Title IV of ERISA or the minimum funding standards under Section 412 of the Code.

“Pledge Agreement” means the Pledge Agreement by each Notes Party which owns any Equity Interest in another Person and made in favor of the Security Agent, as it may be amended, amended and restated, modified, or supplemented from time to time.

“Private Placement Legend” means the legend set forth in Section 2.06(g)(1) (“Transfer and Exchange—Legends—Private Placement Legend”) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

“Property” of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.

“QIB” means a “qualified institutional buyer” as defined in Rule 144A.

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) then owned by any Person in any real property.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA as to which the PBGC has not waived the requirements of Section 4043(a) of ERISA that it is to be notified of such event.

“Responsible Officer” means (i) when used with respect to the Trustee, any officer within the Corporate Trust Office 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 and (ii) when used with respect to any Notes Party, any Financial Officer, secretary or assistant secretary of such Notes Party, or any other officer having substantially the same authority and responsibility.

“Restricted Certificated Note” means a Certificated Note bearing the Private Placement Legend.

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

“Restricted Payment” means, with respect to any Person, (a) any direct or indirect dividend or distribution (whether in cash, securities or other Property) on, or any direct or indirect payment of any kind or character (whether in cash, securities or other Property) in consideration for or otherwise in connection with the ownership of, or any retirement, purchase, redemption, conversion, exchange, sinking fund or other acquisition of, any Equity Interest of such Person, or any options, warrants or rights to purchase or acquire any such Equity Interest of such Person, (b) principal or interest payments (in cash, Property or otherwise) on, or redemptions of, subordinated debt of such Person or (c) principal payments (in cash, Property or otherwise) on, or purchases or redemptions of, Senior Debt of such Person; provided that the term “Restricted Payment” shall not include (i) any dividend or distribution payable solely in Equity Interests of the Company or warrants, options or other rights to purchase such Equity Interests, (ii) settlement in connection with the cashless exercise of employee, officer or director stock options or similar benefit plans, (iii) payments for fractional shares in connection with settlement under employee benefit plans, (iv) principal payments on, or redemption of, the Notes Obligations, (v) principal payments on Senior Debt to the extent that such payment is required under the terms of the agreement or instrument creating, establishing or otherwise evidencing such Senior Debt, (vi) principal payments on, or purchases or redemptions of, Additional Notes Collateral Debt and (vii) any payment made of any Bank Product Obligations or payment of any amounts under the ABL Credit Agreement. For the avoidance of doubt, issuances of Equity Interests or any options, warrants or rights to purchase or acquire such Equity Interests to an employee, director or officer of the Company and its Subsidiaries in the ordinary course of business pursuant to a stock plan shall not be considered a Restricted Payment.

“Rule 144” means Rule 144 promulgated under the Securities Act.

“Rule 144A” means Rule 144A promulgated under the Securities Act.

“Rule 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 to QIBs.

“S&P” means Standard & Poor’s Ratings Group, Inc., or any successor to the rating agency business thereof.

“Sanctions” means any person that is the target of any sanctions administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority.

“SEC” means the U.S. Securities and Exchange Commission.

“Security Agent” means Wilmington Trust, National Association, acting in its capacity as “Security Agent” under this Indenture and the Security Documents and any successor thereto in such capacity.

“Secured Parties” means, collectively, the Trustee, the Security Agent, the Holders and the beneficiaries of each indemnification obligation undertaken by any Notes Party under any Notes Document.

“Securities Act” means the Securities Act of 1933, as amended.

“Security Agreement” means the Security Agreement among the Notes Parties and the Security Agent, as it may be amended, amended and restated, modified, or supplemented from time to time.

“Security Documents” means, collectively, the Pledge Agreement, the Security Agreements, the Mortgages, the Account Control Agreements, and any and all other instruments, documents or agreements now or hereafter executed by the Company or any other Person to secure the Obligations.

“Senior Debt” means Debt of the type described in clause (1) of the definition of “Debt” contained herein that is not by its terms contractually subordinated.

“Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02(w) of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the Issue Date;

“Specified Amount” means an amount equal to $997,942.

“Specified Blocked Account” means a segregated deposit account of the Company that is used for the purpose of holding the Specified Amount and is subject to the Specified Blocked Account Control Agreement.

“Specified Blocked Account Control Agreement” means an account control agreement among the Company, the Security Agent and the bank where the Specified Blocked Account is held, which provides (a) that the security interest of the Security Agent over such account is an Acceptable Security Interest that is superior to all other Liens (other than Permitted Priority Liens) and (b) for full and immediate control by the Security Agent.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Debt, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Debt, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subsidiary” means, with respect to any Person, any other Person, a majority of whose outstanding Voting Securities (other than directors’ qualifying shares) shall at any time be owned by such Person or one or more Subsidiaries of such Person. Unless the context otherwise requires, each reference to a Subsidiary shall be a reference to a Subsidiary of the Company.

“Subsidiary Guarantee” means any Guarantee by a Guarantor of the Company’s payment Obligations under this Indenture and on the Notes, executed pursuant to the provisions of this Indenture.

“Swap Termination Value” means, in respect of any one or more Hedging Arrangements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Arrangements, (a) for any date on or after the date such Hedging Arrangements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Arrangements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Arrangements.

“Synthetic Lease Obligations” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such person (without regard to accounting treatment).

“Taxes” means any present or future tax, levy, impost, duty, assessment, charge, fee, deduction or withholding (together with interest, penalties and other additions thereto) of any nature and whatever called, imposed, levied, collected, withheld or assessed by any governmental authority.

“Tax Group” means any member of the “affiliated group” (as determined under Section 1504 of the Code or any similar provision under non-U.S. tax law) of which the Company or any of its Subsidiaries is the ultimate parent.

“Termination Event” means (a) a Reportable Event with respect to a Plan, (b) the withdrawal of the Company or any member of the Controlled Group from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan.

“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended from time to time, and the rules and regulations thereunder.

“Total Annual Rent” means $2,024,016, which such aggregate amount equals to the total annual rent for all Leased Premises as of the Issue Date.

“Transaction Agreement” means the transaction agreement dated as of, and filed in the United States Bankruptcy Court for the Southern District of Texas on, May 9, 2020, among the Consenting Term Lenders and the Participating Noteholders (each as defined therein) [Docket No 316].

“Treasury Notes” has the meaning set forth in Section 2.09.

“Trustee” means Wilmington Trust, National Association, until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that if perfection or the effect of perfection or non-perfection is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction.

“Unrestricted Cash” means the aggregate amount of cash and Cash Equivalents held in accounts on the consolidated balance sheet of the Notes Parties to the extent that the use of such cash for application to payment of the Obligations or other Debt is not prohibited by law or any contract or other agreement and such cash and Cash Equivalents are free and clear of all Liens (other than Liens in favor of Security Agent and the ABL Administrative Agent).

“Unrestricted Certificated Note” means one or more Certificated Notes that do not bear and are 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.

“U.S. Person” means a U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

“Voting Securities” means (a) with respect to any corporation, capital stock of the corporation having general voting power under ordinary circumstances to elect directors of such corporation (irrespective of whether at the time stock of any other class or classes shall have or might have special voting power or rights by reason of the happening of any contingency), (b) with respect to any partnership, any partnership interest or other ownership interest having general voting power to elect the general partner or other management of the partnership or other Person, and (c) with respect to any limited liability company, membership certificates or interests having general voting power under ordinary circumstances to elect managers of such limited liability company.

“Weighted Average Yield” means with respect to any Debt, on any date of determination, the weighted average yield to maturity, in each case, based on the interest rate applicable to such Debt on such date and giving effect to all upfront or similar fees or original issue discount payable with respect to such Debt.

Section 1.02. 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;

(3) “or” is not exclusive;

(4) “including” means “including without limitation,” “including but not limited to” or words of similar import;

(5) words in the singular include the plural, and in the plural include the singular;

(6) “will” shall be interpreted to express a command;

(7) “interest” in this Indenture and the Notes means the initial interest rate borne by the Notes and any defaulted interest that accrues as described under Section 2.12(b);

(8) references to sections of or rules under the Securities Act will be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

(9) the words “herein,” “hereof” and “hereunder” and words of similar import shall be construed to refer to this Indenture; and

(10) the words “sign”, “execute”, “execution”, “signature”, and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation amendments, waivers or consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

ARTICLE II.

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 (including, for the avoidance of doubt, any PIK Notes) shall be in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof.

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, repurchases 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 (“Transfer and Exchange”) hereof or, in the case of an increase resulting from the payment of interest on a PIK Interest Payment Date, in accordance with the provisions of Section 2.12(a).

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.

The Trustee will, upon receipt of a written order of the Company signed by two Officers (an “Authentication Order”), (i) authenticate Notes for (x) original issue that may be validly issued under this Indenture or (y) the payment of PIK Interest on a PIK Interest Payment Date in the form of PIK Notes and (ii) increase the Capitalized Principal Amount of any Global Note as a result of the payment of interest on a PIK Interest Payment Date in the amount set forth in the PIK Notice (as defined in Section 4.01(e)). 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 (“Replacement Notes”) 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 Trustee will initially act as Paying Agent and Registrar. 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, if any, or interest on the Notes, and will notify the Trustee in writing 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 such 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. 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 such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.

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 Certificated Notes if:

(1) the Company delivers to the Trustee notice from the Depositary (A) that it is unwilling or unable to continue to act as Depositary for the Global Notes and a successor Depositary is not appointed by the Company within 90 days after the date of such notice from the Depositary or (B) that it is no longer a clearing agency registered under the Exchange Act;

(2) the Company at its option and in its sole discretion, determines that the Global Notes (in whole but not in part) will be exchanged for Certificated Notes and delivers a written notice to such effect to the Trustee; or

(3) there has occurred and is continuing an Event of Default with respect to the Notes.

Upon the occurrence of any of the preceding events in (1), (2) or (3) above, Certificated 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 (“Replacement Notes”) and 2.10 (“Temporary Notes”) 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 (“Transfer and Exchange”) (except an exchange for a Certificated Note as provided in this Section 2.06(a)), Section 2.07

(“Replacement Notes”) or Section 2.10 (“Temporary Notes”) 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) or (c) 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.

(A) 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 Notes may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. Except as may be required by any Applicable Procedures, 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:

(A) both:

(1) 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

(2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

(B) both:

(1) if permitted under Section 2.06(a) above, 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 Certificated Note in an amount equal to the beneficial interest to be transferred or exchanged; and

(2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Certificated Note shall be registered to effect the transfer or exchange referred to in (2) above.

(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 Rule 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B-1 hereto, including the certifications in item (1) thereof.

(B) If the transferee will take delivery in the form of a beneficial interest in the AI Global Note then the transferor must deliver a certificate in the form of Exhibit B-2 hereto, including the certifications in item 2 thereof (provided the transferee also delivers to the Trustee the opinion of counsel, certifications and/or other information referred to therein).

(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 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) the Registrar receives the following:

(1) 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 thereof; or

(2) if the Holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who will 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-1 hereto, including the certifications in item 3 thereof;

and, in each such case set forth in clause (D), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company 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 clause (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 clause (B) or (D) above.

(5) Transfer or Exchange of Beneficial Interests in an Unrestricted Global Note for Beneficial Interests in a Restricted Global Note Prohibited. 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.

(1) Beneficial Interests in Restricted Global Notes to Restricted Certificated Notes. Subject to Section 2.06(a), if a beneficial interest in a Restricted Global Note is to be exchanged for a Restricted Certificated Note or transferred to a Person who takes delivery thereof in the form of a Restricted Certificated Note, then, upon receipt by the Registrar of the following documentation at least 20 days prior to the date of the transfer or exchange:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Certificated Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item 2 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-1 hereto, including the certifications in item 1 thereof;

(C) 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-1 hereto, including the certifications in item 2 thereof;

(D) 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-1 hereto, including the certifications in item 2 thereof;

(E) 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-1 hereto, including the certifications in item 2 thereof; or

(F) if such beneficial interest is being transferred to an AI, a certificate to the effect set forth in Exhibit B-2 hereto from the proposed transferee and, if requested by the Company, the delivery of an Opinion of Counsel, certification and/or other information satisfactory to it,

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 Certificated Note in the appropriate principal amount. Any Certificated 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 issued 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 Certificated Notes to the Persons in whose names such Notes are so registered. Any Certificated 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 Certificated Notes. Subject to Section 2.06(a) hereof, a Holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Certificated Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Certificated Note only if:

(A) the Registrar receives the following:

(1) if the Holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Certificated Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item 1 thereof; or

(2) if the Holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who will take delivery thereof in the form of an Unrestricted Certificated Note, a certificate from such Holder in the form of Exhibit B-1 hereto, including the certifications in item 3 thereof,

and, in each such case set forth in this subparagraph (A), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company 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 any of the conditions of any of the clauses of this Section 2.06(c)(2), the Company shall execute and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate and deliver a Certificated Note that does not bear the Private Placement Legend in the appropriate principal amount to the Person designated by the holder of such beneficial interest in instructions delivered to the Registrar by the Depositary and the applicable Participant or Indirect Participant on behalf of such holder, and the Trustee shall reduce or cause to be reduced in a corresponding amount pursuant to Section 2.06(h), the aggregate principal amount of the applicable Restricted Global Note.

(3) Beneficial Interests in Unrestricted Global Notes to Unrestricted Certificated Notes. If any Holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for an Unrestricted Certificated Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Certificated Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(2) hereof, 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 an Unrestricted Certificated Note in the appropriate principal amount. Any Unrestricted Certificated Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) 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 Unrestricted Certificated Notes to the Persons in whose names such Notes are so registered. Any Unrestricted Certificated Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(3) shall not bear the Private Placement Legend.

(d) Transfer and Exchange of Certificated Notes for Beneficial Interests.

(1) Restricted Certificated Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Certificated Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Certificated 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 Certificated 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 thereof;

(B) if such Restricted Certificated Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B-1 hereto, including the certifications in item 1 thereof;

(C) if such Restricted Certificated 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-1 hereto, including the certifications in item 2 thereof;

(D) if such Restricted Certificated Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B-1 hereto, including the certifications in item 2 thereof;

(E) if such Restricted Certificated Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B-1 hereto, including the certifications in item 2 thereof; or

(F) if such Restricted Certificated Note is being transferred to an AI, a certificate to the effect set forth in Exhibit B-2 hereto from the proposed transferee and, if requested by the Company, the delivery of an Opinion of Counsel, certification and/or other information satisfactory to it,

the Trustee will cancel the Restricted Certificated Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note and in the case of clause (B) above, the Rule 144A Global Note.

(2) Restricted Certificated Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Certificated Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Certificated Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

(A) the Registrar receives the following:

(1) if the Holder of such Certificated Notes proposes to exchange such Notes 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 thereof; or

(2) if the Holder of such Certificated Notes proposes to transfer such Notes 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-1 hereto, including the certifications in item 3 thereof;

and, in each such case set forth in this clause (A), if the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Company 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 any of the conditions of any of the clauses of this Section 2.06(d)(2), the Trustee shall cancel the Certificated Notes and increase or cause to be increased the aggregate principal amount of an Unrestricted Global Note.

(3) Unrestricted Certificated Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Certificated Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Certificated 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 shall cancel the applicable Unrestricted Certificated Note and increase or cause to be increased in a corresponding amount the aggregate principal amount of one of the Unrestricted Global Notes pursuant to Section 2.06(h) hereof;

(4) Transfer or Exchange of Unrestricted Certificated Notes to Beneficial Interests in Restricted Global Notes Prohibited. An Unrestricted Certificated Note may not be exchanged for, or transferred to Persons who take delivery thereof in the form of, beneficial interests in a Restricted Global Note.

(5) Issuance of Unrestricted Global Notes. If any such exchange or transfer from a Certificated Note to a beneficial interest is effected pursuant to subparagraphs (2) or (3)) 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 principal amount of Certificated Notes so transferred.

(e) Transfer and Exchange of Certificated Notes for Certificated Notes. Upon request by a Holder of Certificated Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Certificated Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Certificated 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 Certificated Notes to Restricted Certificated Notes. Any Restricted Certificated Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Certificated 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-1 hereto, including the certifications in item 1 thereof;

(B) 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-1 hereto, including the certifications, certificates and Opinion of Counsel required by item 2 thereof, if applicable.

(2) Restricted Certificated Notes to Unrestricted Certificated Notes. Any Restricted Certificated Note may be exchanged by the Holder thereof for an Unrestricted Certificated Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Certificated Note only if:

(A) the Registrar receives the following:

(1) if the Holder of such Restricted Certificated Notes proposes to exchange such Notes for an Unrestricted Certificated Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item 1 thereof; or

(2) if the Holder of such Restricted Certificated Notes proposes to transfer such Notes to a Person who will take delivery thereof in the form of an Unrestricted Certificated Note, a certificate from such Holder in the form of Exhibit B-1 hereto, including the certifications in item 3 thereof;

and, in each such case set forth in this clause (A), if the Company so requests, an Opinion of Counsel in form reasonably acceptable to the Company 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 clauses of this Section 2.06(e)(2), the Trustee shall cancel the prior Restricted Certificated Note and the Company shall execute, and upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate and deliver an Unrestricted Certificated Note in the appropriate aggregate principal amount to the Person designated by the Holder of such prior Restricted Certificated Note in instructions delivered to the Registrar by such Holder.

(3) Unrestricted Certificated Notes to Unrestricted Certificated Notes. A Holder of Unrestricted Certificated Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Certificated Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Certificated Notes pursuant to the instructions from the Holder thereof.

(f) [Reserved].

(g) Legends. The following legends will appear on the face of all Global Notes and Certificated Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

(1) Private Placement Legend.

(A) Except as permitted below, each Global Note and each Certificated Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT THAT IS AN ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE, OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION, AND/OR OTHER INFORMATION SATISFACTORY TO IT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE COMPANY ON OR AFTER THE RESALE RESTRICTION TERMINATION DATE.”

Notwithstanding the foregoing, any Global Note or Certificated Note issued pursuant to subparagraph (b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2) or (e)(3) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) (and any note not required by law to have such a legend) shall not bear the Private Placement Legend.

In addition, the foregoing legend may be adjusted for future issuances in accordance with applicable law.

(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 CERTIFICATED 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 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 WATER STREET, NEW YORK, NEW YORK) (“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.”

(3) OID Legend. To the extent required by Section 1275(c)(1)(A) of the Internal Revenue Code of 1986, as amended, and Treasury Regulation Section 1.1275-3(b)(1), each Note issued at a discount to its stated redemption price at maturity shall bear a legend (the “OID Legend”) in substantially the following form (with any necessary amendments thereto to reflect any amendments occurring after the Issue Date to the applicable sections):

“FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE COMPANY AT PIONEER ENERGY SERVICES CORP. 1250 N.E. LOOP 410, SUITE 1000, SAN ANTONIO, TEXAS 78209 ATTENTION: CORPORATE SECRETARY AND THE COMPANY WILL PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS NOTE.”

(h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Certificated 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 (“Cancellation”) 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 Certificated 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 Custodian 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 Custodian 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 Certificated Notes upon receipt of an Authentication Order in accordance with Section 2.02 (“Execution and Authentication”) 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 Certificated 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 (“Temporary Notes”), 3.06 (“Notes Redeemed or Purchased in Part”), 3.09 (“Offer to Purchase by Application of Excess Proceeds”), 3.09 (“Mandatory Offers to Purchase”) and 9.05 (“Notation on or Exchange of Notes”) 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 Certificated Notes issued upon any registration of transfer or exchange of Global Notes or Certificated 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 Certificated 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 Notes for redemption under Section 3.02 (“Selection of Notes to Be Redeemed or Purchased”) 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 Certificated Notes in accordance with the provisions of Section 2.02 (“Execution and Authentication”) 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 or other electronic methods.

(9) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Participants or Indirect Participants) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(10) Neither the Trustee, the Company nor any agent of the Company or the Trustee shall have any responsibility for any actions taken or not taken by the Depositary.

Notwithstanding the foregoing, with respect to any Global Note, nothing herein shall prevent the Company, the Trustee, or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by any Depositary (or its nominee), as a Holder, with respect to such Global Note or shall impair, as between such Depositary and owners of beneficial interests in such Global Note, the operation of customary practices governing the exercise of the rights of such Depositary (or its nominee) as Holder of such Global Note.

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 of this Indenture, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 (“Treasury Notes”) 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) (“Optional Redemption”) hereof.

If a Note is replaced pursuant to Section 2.07 (“Replacement Notes”) 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 (“Payment of Notes”) hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any of the foregoing) 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 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 actually 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 Certificated 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 requirements of the Exchange Act and the Trustee). Certification of the destruction or cancellation of all canceled Notes will be delivered to the Company. 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. PIK Interest; Defaulted Interest.

(a) On each PIK Interest Payment Date, the Company shall pay 50% of the interest due and payable on the Notes in cash and 50% of the interest due and payable on the Notes by directing the Trustee in a written order dated and delivered no later than five Business Days prior to the applicable PIK Interest Payment Date to increase the Capitalized Principal Amount of the Notes by the Capitalized Amount for such PIK Interest Payment Date, effective as of such Interest Payment Date. The Trustee, or the Custodian acting at the direction of the Trustee, on receipt of such written order shall increase the Capitalized Principal Amount accordingly to the credit of the Holders on the applicable record date and appropriate adjustments will be made on the books and records of the Trustee with respect to such increase; provided that the Capitalized Principal Amount shall be rounded up to the nearest $1.00. Notwithstanding the foregoing or anything to the contrary in this Indenture, if the Notes are represented by one or more Certificated Notes, or if the Company is prohibited by the requirements of the Depository or law with respect to Global Notes from paying interest by increasing the Capitalized Principal Amount of the Notes, the Company may, at its option, in lieu of increasing the Capitalized Principal Amount of the Notes by the Capitalized Amount for such Interest Payment Date, pay interest due and payable on such Certificated Notes or Global Notes, as the case may be, by directing the Trustee to authenticate additional Notes (in the form of Certificated Notes or Global Notes, as applicable) on the relevant PIK Interest Payment Date (the “PIK Notes”) in an aggregate principal amount equal to the relevant Capitalized Amount. If the Company elects to issue PIK Notes, the Company shall deliver to the Trustee no later than five Business Days prior to the applicable PIK Interest Payment Date appropriate PIK Notes duly executed by the Company together with a written order to authenticate and deliver such PIK Notes, dated as of the applicable PIK Interest Payment Date, in an aggregate amount equal to the Capitalized Amount for the applicable interest period (rounded up to the nearest $1.00). The Trustee, or the Custodian acting at the direction of the Trustee, on receipt of such written order shall authenticate and deliver such PIK Notes to the Holders on the applicable record date and appropriate adjustments will be made on the books and records of the Trustee with respect to such PIK Notes. Any PIK Notes delivered pursuant to the provisions hereof shall be on the same terms and conditions, and shall be treated as a single class for all purposes (including waivers, amendments, conversions and offers to purchase) as the Initial Notes under this Indenture.

(b) 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 a rate that is 2% per annum in excess of the interest rate otherwise payable under the Notes. The Company will notify the Trustee in writing in the form of an Officers’ Certificate 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 at least two Business Days prior written request of the Company, the Trustee in the name and at the expense of the Company) will send or cause to be sent to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

Section 2.13. Calculation Agent.

(a) GLAS Trust Company LLC will serve as the initial “Calculation Agent” for the Notes pursuant to the Calculation Agency Agreement dated May 27, 2020 between the Company, the Guarantors and the Calculation Agent. In the absence of willful misconduct, bad faith or gross negligence, the Calculation Agent’s calculation of LIBOR and its calculation of the applicable interest rate for each Interest Period will be final and binding.

(b) The Company has the right to replace the Calculation Agent with another leading commercial bank or investment bank in New York upon 30 days’ notice to the Calculation Agent. If the appointed office of the Calculation Agent is unable or unwilling to continue to act as the Calculation Agent or fails to determine the interest rate for any Interest Period (unless LIBOR has been discontinued and the rate equal to such rate on the Interest Determination Date when LIBOR was last available on Bloomberg L.P.’s page “BBAM” and last used to determine the relevant interest rate for the Notes is the last available rate as set forth in Section 4.23(c)), the Company shall appoint such other leading commercial bank or investment bank in New York.

ARTICLE III.

REDEMPTION AND PURCHASE

Section 3.01. Notices to Trustee.

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 (“Optional Redemption”) hereof, it must furnish to the Trustee, at least 10 days but not more than 60 days before a redemption date, an Officers’ 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 at any time, the Trustee will select Notes for redemption as follows:

(1) if the Notes are listed on any national securities exchange (and the Company shall notify the Trustee of any such listing), in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

(2) if the Notes are not listed on any national securities exchange, on a pro rata basis to the extent practicable or by lot or by such other method as the Trustee shall deem fair and appropriate (and, in such a manner that complies with the requirements of the Depositary, if applicable).

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 days 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.

The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in minimum amounts of $1.00 and integral multiples of $1.00 in excess thereof; 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 $1.00, 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.

At least 10 days but not more than 60 days before a redemption date, the Company will give or cause to be given, 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 given 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 Article XI hereof.

The notice will identify the Notes to be redeemed and will state:

(1) the redemption date;

(2) the redemption price;

(3) if the Notes are being redeemed in part:

(A) that the Trustee shall select Notes for redemption on a pro rata basis to the extent practicable or by lot or by such other method as the Trustee shall deem fair and appropriate (and, in such manner that complies with the requirements of the Depository, if applicable), and in any case, not in parts of less than $1.00; and

(B) the portion of the principal amount of such Notes to be redeemed and that, after the redemption date upon surrender of such Notes, a new Note 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;

(8) any conditions to redemption, and

(9) 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 10 Business Days prior to the date that notice of such redemption is to be given to Holders (unless a shorter notice period is agreed to by the Company and the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in this Section 3.03 above.

Section 3.04. Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 (“Notice of Redemption”) hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price; provided that any Notice of Redemption may, at the Company’s discretion, be given prior to a transaction or event specified in this Indenture and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion or occurrence of the related transaction or event, as the case may be.

If a redemption or purchase is subject to satisfaction of one or more conditions precedent, such notice shall describe each such condition, and if applicable, shall state that, in the Company’s discretion, the redemption date may be delayed until such time as any or all such conditions shall be satisfied, or such redemption or purchase may not occur and such notice may be rescinded in the event that any or all such conditions shall not have been satisfied by the redemption date, or by the redemption date as so delayed, or such notice may be rescinded at any time in the Company’s discretion if in the good faith judgment of the Company any or all of such conditions will not be satisfied; provided that in any such event, the Company shall provide notice to the Holders of such delay or rescission at least one Business Day prior to the scheduled redemption date.

Section 3.05. Deposit of Redemption or Purchase Price.

No later than 10:00 a.m. New York City time on 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 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 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 a record date but on or prior to the related Interest Payment Date, then any accrued and unpaid interest to the redemption or purchase date 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 (“Payment of Notes”) hereof.

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) Except as set forth in clause (c) of this Section 3.07, the Notes shall not be redeemable at the option of the Company prior to June 1, 2021.

(b) On or after June 1, 2021, the Company may redeem the Notes, in whole or in part, at any time and from time to time, upon not less than 10 nor more than 60 days’ prior notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, thereon to the applicable redemption date, if redeemed during the twelve-month period beginning on June 1 of the years indicated below; provided that any such redemption of Notes shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding:


Year	Percentage
2021		104.000	%
2022		102.000	%
2023		101.000	%
2024 and thereafter.		100.000	%

(c) If a Change of Control occurs prior to June 1, 2022, following the expiry of a Change of Control Offer made in the manner provided in Section 3.10 below, to the extent there are any Notes outstanding, the Company may redeem such outstanding Notes, in whole but not in part, upon not less than 10 nor more than 60 days’ prior notice delivered not later than 10 days following the Change of Control Payment Date, at a redemption price equal to 103.000% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the applicable redemption date.

(d) Any redemption pursuant to this 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

Section 3.08. Mandatory Redemption.

The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

Section 3.09. Mandatory Offers to Purchase.

(a) Subject to the ABL Intercreditor Agreement prior to the Discharge of ABL Obligations (but only with respect to any ABL Priority Collateral), no later than the second Business Day following the date of receipt by the Company or any of its Subsidiaries of Net Disposition Proceeds in respect of any Disposition of any Property of the Company or its Subsidiaries which, together with the Net Disposition Proceeds in respect of all other Dispositions of any Property since the Issue Date, exceeds $5,000,000 in the aggregate (other than Net Disposition Proceeds received in respect of Dispositions of Inventory in the ordinary course of business as permitted under Section 5.08 (“Dispositions”)) (“Excess Net Disposition Proceeds”), the Company shall commence an offer to purchase, in the manner provided by Section 3.09(d) below, an aggregate principal amount of Notes equal to the lesser of (x) the aggregate principal amount outstanding of the Notes and (y) the aggregate amount of Excess Net Disposition Proceeds; provided, however that a Disposition (in any single transaction or series of related transactions) of Property resulting in Net Disposition Proceeds of less than $100,000 shall be excluded from the above offer to purchase requirements and shall not count towards the $5,000,000 aggregate threshold set forth above.

(b) Subject to the ABL Intercreditor Agreement with respect to any ABL Priority Collateral prior to the Discharge of ABL Obligations, no later than the second Business Day following the date of receipt by the Company or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds, the Company shall commence an offer to purchase, in the manner provided by Section 3.09(d) below, an aggregate principal amount of Notes equal to the lesser of (x) the aggregate principal amount outstanding of the Notes and (y) the aggregate amount of Net Insurance/Condemnation Proceeds; provided, that so long as no Event of Default shall have occurred and be continuing, the Company shall have the option, directly or through one or more of its Subsidiaries, to invest such Net Insurance/Condemnation Proceeds within one year of receipt thereof in long term productive assets of the general type used in the business of the Company and its Subsidiaries, which investment may include the repair, restoration or replacement of the applicable assets thereof; provided further, however, that the Company shall make an offer to purchase Notes with any such Net Insurance/Condemnation Proceeds not so invested within such period described above promptly (and in any event, prior to the expiration of two (2) Business Days) following the expiration of such period (or by such earlier date, if any, as the Company or such Subsidiary shall elect not to so invest such Net Insurance/Condemnation Proceeds).

(c) No later than the second Business Day following the date of receipt by the Company or any of its Subsidiaries of any cash proceeds from the incurrence of any Debt of the Company or any of its Subsidiaries (other than with respect to any Debt permitted to be incurred pursuant to Section 5.01 (“Debt”)), the Company shall commence an offer to purchase, in the manner provided by Section 3.09(d) below, an aggregate principal amount of Notes equal to 100% of such proceeds, net of underwriting discounts and commissions and other costs and expenses associated therewith, including legal fees and expenses.

(d) If, pursuant to paragraphs (a), (b) and (c) of this Section 3.09, the Company shall be required to commence an offer to purchase Notes (a “Mandatory Offer”), it shall follow the procedures specified below:

(i) The Mandatory Offer shall be made to all Holders and, to the extent required, an offer will also be made to all holders of other Debt of the Company that is pari passu with the Notes in right of payment and security and that contains provisions similar to those set forth in this Indenture to purchase such debt at a price equal to no more than 100% of the principal amount thereof.

(ii) The Mandatory 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”).

(iii) No later than three Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply the amount of proceeds specified in each of paragraphs (a), (b) and (c) of this Section 3.09 (the “Offer Amount”) to the purchase of Notes and the other pari passu Debt, if any, to be purchased (on a pro rata basis, if applicable). Payment for any Notes so purchased will be made in the same manner as interest payments are made.

(iv) If the Purchase Date is on or after a record date and on or before the related Interest Payment Date, any accrued and unpaid interest 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 whose Notes are accepted for purchase pursuant to the Mandatory Offer. Otherwise, accrued and unpaid interest, if any, on Notes purchased in the Mandatory Offer will be paid to tendering Holders on the Purchase Date.

(v) Upon the commencement of a Mandatory Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Mandatory Offer. The notice, which will govern the terms of the Mandatory Offer, will state:

1) that the Mandatory Offer is being made pursuant to Section 3.09(a), 3.09(b) or 3.09(c) hereof and the length of time the Mandatory Offer will remain open;

2) the Offer Amount, the purchase price (which, for the avoidance of doubt, shall be 100% of the principal amount of Notes purchased) and the Purchase Date;

3) that any Note not tendered or accepted for purchase will continue to accrue interest;

4) that, unless the Company defaults in making such payment, any Note accepted for purchase pursuant to the Mandatory Offer will cease to accrue interest on and after the Purchase Date;

5) that Holders electing to have a Note purchased pursuant to the Mandatory Offer may elect to have Notes purchased in amounts not less than $1.00 and, thereafter, in integral multiples of $1.00 only;

6) that Holders electing to have Notes purchased pursuant to the Mandatory 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 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 Debt surrendered by holders thereof, if applicable, exceeds the Offer Amount, the Company will select the principal amount of Notes and other pari passu Debt to be purchased, if applicable, on a pro rata basis based on the principal amount of Notes and such other pari passu Debt surrendered (with such adjustments as may be deemed appropriate by the Company so that no Note of $1.00 or less can be redeemed in part and that minimum denominations of $1.00 in excess thereof are maintained); and

9) that Holders whose Notes are 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 purchase, on a pro rata basis to the extent necessary, an aggregate principal amount of Notes tendered pursuant to the Mandatory Offer equal to the Offer Amount, or if less than an aggregate principal amount of Notes equal to 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 Officers’ Certificate stating that such Notes or portions thereof were accepted for purchase by the Company in accordance with the terms of this Section 3.09. The Paying Agent will promptly (but in any case not later than three (3) Business Days after the termination of the Offer Period) mail to Holders of Notes properly tendered an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, plus, subject to paragraph (d)(iv) of this Section 3.09, accrued and unpaid interest, if any, and the Company will promptly issue a new Note, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note in a principal amount equal to any unpurchased portion of the Notes surrendered, if any. 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 Mandatory 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 3.05 (“Deposit of Redemption or Purchase Price”) and 3.06 (“Notes Redeemed or Purchased in Part”) hereof.

(e) 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 any Mandatory Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of this Indenture, 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 of this Indenture by virtue of such conflict.

Section 3.10. Offer to Repurchase Upon a Change of Control.

(a) If a Change of Control occurs, each Holder will have a right to require the Company to repurchase all or any part (equal to a minimum principal amount of $1.00 or an integral multiple of $1.00 in excess thereof) of that Holder’s Notes pursuant to an offer by the Company (a “Change of Control Offer”) on the terms described below. In the Change of Control Offer, the Company will offer a payment in cash (the “Change of Control Payment”) equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest, if any, thereon for the Notes repurchased, to the date of purchase. Within 10 days following any Change of Control, the Company will mail a notice to each Holder of the Notes describing the

transaction or transactions that constitute the Change of Control and offering to repurchase the Notes on the date specified in the notice, which date will be no earlier than 10 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”), pursuant to the procedures described below and in such notice.

(b) 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 of Control. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Change of Control provisions of this Indenture by virtue of such conflict.

(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 pursuant to the Change of Control Offer; and

(3) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

(d) The Paying Agent will promptly mail to each Holder of Notes properly tendered pursuant to the Change of Control Offer 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; provided that each new Note will be in a minimum principal amount of $1.00 or an integral multiple of $1.00 in excess thereof.

(e) The Company will not be required to make a Change of Control Offer upon a Change of Control if 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 tendered and not withdrawn pursuant to the Change of Control Offer.

ARTICLE IV.

AFFIRMATIVE COVENANTS

Section 4.01. Payment of Notes.

The Company will pay or cause to be paid the principal of, premium, if any, and interest on, the Notes on the dates and in the manner provided in this Indenture and the Notes.

(a) All payments by the Company of principal, interest, premium, fees and other Obligations shall be made (i) other than with respect to a payment of PIK Interest, in U.S. dollars in same day funds, without defense, recoupment, setoff or counterclaim, free of any restriction or condition, and delivered to the Paying Agent for the account of the Holders or (ii) with respect to a payment of PIK Interest, by the Company in accordance with Section 2.12(a) either (x) directing by a written order to the Trustee to increase the Capitalized Principal Amount of the Notes by the relevant Capitalized Amount or (y) authenticating and delivering, by written direction to the Trustee, PIK Notes in an aggregate principal amount equal to the relevant Capitalized Amount, in the case of each of (i) and (ii) above not later than 10:00 a.m. (New York City time) on the date due.

(b) All payments in respect of the principal amount of any Note shall be accompanied by payment of accrued interest on such Note, and all such payments (and, in any event, any payments in respect of any Note on a date when interest is due and payable with respect to such Note) shall be applied to the payment of interest then due and payable before application to principal.

(c) Whenever any payment to be made hereunder with respect to any Note shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period; provided that, if the payment to be made in respect of the final Stated Maturity of the Notes falls on a day that is not a Business Day, such payment shall be made on the immediately prior Business Day, and interest shall be deemed to have accrued, and shall be payable, as if the payment was made on the date of the final Stated Maturity of the Note.

(d) The Paying Agent shall deem any payment by or on behalf of the Company hereunder that is not made in accordance with Section 4.01(a) to be a non-conforming payment. Any such payment shall not be deemed to have been received by the Paying Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. The Paying Agent shall give prompt notice to the Company if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 7.01(a) (“Events of Default—Payment Failure”). Interest shall continue to accrue on any outstanding principal amount of Notes as to which a non-conforming payment is made until such funds become available funds (but in no event less than the period from the date of such payment to the next succeeding applicable Business Day) at the rate determined pursuant to Section 2.12(b) from the date such amount was due and payable until the date such amount is paid in full.

(e) The Company will deliver a notice (a “PIK Notice”) to the Trustee no later than five Business Days prior to the end of any relevant Interest Period in respect of which the Company will pay PIK Interest, which notice will state the total amount of interest to be paid on the PIK Interest Payment Date in respect of such Interest Period and the amount of such interest to be paid as PIK Interest. PIK Interest will be considered paid on the date due if on such date the Trustee has received (i) a written order, pursuant to Section 2.02, from the Company signed by two Officers of the Company, requesting to increase the balance of any Global Note to reflect such PIK Interest or (ii) PIK Notes duly executed by the Company together with a written order, pursuant to Section 2.02, of the Company, signed by two Officers of the Company, requesting the authentication of such PIK Notes by the Trustee. In connection with the payment of PIK Interest in respect of the Notes, the Company will, without the consent of Holders (and without regard to any restrictions or limitations set forth under Section 5.01), either increase the outstanding principal amount of the Notes represented by a Global Note or issue PIK Notes under this Indenture.

Section 4.02. Maintenance of Office or Agency.

The Company will maintain 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. 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 Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03 (“Registrar and Paying Agent”) hereof.

Section 4.03. Corporate Existence.

Subject to Article VI, the Company shall, and shall cause each Subsidiary to, preserve and maintain its partnership, limited liability company or corporate existence, rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified as a foreign business entity in each jurisdiction in which qualification is necessary or desirable in view of its business and operations or the ownership of its Properties except to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Change; provided, however, that nothing herein contained shall prevent any transaction permitted by Section 5.07 (“Corporate Actions”) or Section 5.08 (“Dispositions”).

Section 4.04. Compliance Certificate.

(a) The Company shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers’ 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 Officers 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 its obligations under 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 and is then continuing, 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, the Company is not a party to a decree, order or written agreement nor has any statutory law, regulation or rule applicable to the Company been enacted that, in each case, by its express terms, prohibits the payment of the principal of, or premium or interest, if any, on the Notes when due pursuant to the Indenture and the Notes, or if such decree, order or written agreement exists, or such statutory law, regulation or rule has been enacted, a description thereof and what action the Company is taking or proposes to take with respect thereto.

(b) So long as any of the Notes are outstanding, the Company will deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers’ 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. Reporting.

(a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company will furnish to the Trustee and the Holders, or file electronically with the SEC through the SEC’s Electronic Data Gathering, Analysis and retrieval System (“EDGAR”) (or any successor filing system) within five (5) Business Days of the time periods specified in the SEC’s rules and regulations:

(1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual Financial Statements by the Company’s independent registered public accounting firm; and

(2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company 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 the Company’s consolidated Financial Statements by the Company’s certified independent accountants.

For the avoidance of doubt, notwithstanding the foregoing, (i) the Company will not be required to furnish any information, certificates or reports required by (A) Section 302, Section 404 or Section 906 of the Sarbanes-Oxley Act of 2002, or related Items 307 or 308 of Regulation S-K or (B) Regulation G or Item 10(e) of Regulation S-K promulgated by the SEC with respect to any non-generally accepted accounting principles financial measures contained therein, (ii) the reports referred to above will not be required to contain the separate Financial Statements or other information contemplated by Rule 3-05, Rule 3-09, Rule 3-10, Rule 3-16 and Article 13 of Regulation S-X and (iii) the reports referred to above will not be required to present compensation or beneficial ownership information.

(b) The Company will file a copy of each of the reports referred to in paragraph (a) with the SEC for public availability (unless the SEC will not accept such a filing). If, notwithstanding the foregoing, the SEC will not accept the Company’s filings for any reason, the Company will post the reports referred to in the preceding paragraphs on its website. The Company, and to the extent applicable, the Guarantors, will be deemed to have furnished such reports and other information to the Trustee and the Holders if it has filed such reports and other information with the SEC using the EDGAR filing system (or any successor filing system), or if such system is not available to the Company or the SEC will not accept any such filing, if it has filed such reports and other information on its website, and in each case, such reports and other information are publicly available thereon. The Trustee shall have no liability or responsibility for the content, filing or timeliness of any report delivered or filed under or in connection with this Indenture or the transactions contemplated thereunder.

(c) The Company and the Guarantors agree that, for so long as any Notes remain outstanding, they 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.

(d) At any time that the Company is not subject to the reporting requirements of Section 13 and 15(d) of the Exchange Act, the Company will furnish the information required by Section 4.05(a) to the Trustee and, in lieu of filing such reports with the SEC, may make available such information electronically (including by posting to a non-public, password-protected website maintained by the Company or a third party) to any Holder, any bona fide prospective investor in the Notes, any bona fide market maker (or person who intends to be a market maker) in the Notes or any bona fide securities analyst, in each case, who provides to the Company its email address, employer name and other information reasonably requested by the Company. Any Person who requests such financial information from the Company or seeks to participate in any conference call required by this Indenture will be required to represent to and agree with the Company (and by accepting such financial information, such Person will be deemed to have represented to and agreed with the Company) to the Company’s good faith satisfaction that:

(1) it is a Holder, a bona fide prospective investor in the Notes, a bona fide market maker (or intended market maker) with respect to the Notes or a bona fide securities analyst, as applicable;

(2) if it is a prospective purchaser of the Notes, it is (A) a QIB, (B) a Non- U.S. Person or (C) an AI;

(3) it will not use the information in violation of applicable securities laws or regulations;

(4) it will not communicate the information to any Person and will keep the information confidential;

(5) it will use such information only in connection with evaluating an investment in the Notes (or, if it is a bona fide market maker or intended market maker, only in connection with making a market in the Notes or, if it is a bona fide securities analyst, for preparing analysis for Holders and prospective purchasers of the Notes that otherwise have access to the financial information in compliance with this covenant); and

(6) it (A) will not use such information in any manner intended to compete with the business of the Company and (B) is not a Person (which includes such Person’s Affiliates, other than the Affiliates of a bona fide securities research analyst with whom such research analyst does not share such information) that is principally engaged in or derives a significant portion of its revenues from operating or owning a business which is substantially similar to the business engaged in by the Company and its Subsidiaries on the Issue Date.

Section 4.06. Insurance.

(a) The Company shall, and shall cause each Subsidiary to, with reputable insurers in respect of their respective Properties, carry and maintain insurance in such amounts and against such risks as is customarily maintained by other Persons of similar size engaged in similar businesses, or self-insure to the extent that is customary for Persons of similar size engaged in similar businesses.

(b) All policies of property insurance with respect to the Collateral either shall have attached thereto a payable endorsement in favor of the Trustee for its benefit and the ratable benefit of the Secured Parties, and all policies of liability insurance with respect to the Notes Parties shall name the Trustee for its benefit and the ratable benefit of the Secured Parties as an additional insured. All policies or certificates of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, and the period of coverage. All policies of property insurance with respect to the Collateral and liability insurance with respect to the Notes Parties shall contain a provision that notwithstanding any contrary agreements between the Company, the Subsidiaries and the applicable insurance company, such policies will not be canceled or amended in any manner that is materially adverse to the interests of the Trustee or the Holders (which provision shall include any reduction in the scope or limits of coverage) without at least thirty (30) days’ (or ten (10) days in the case of non-payment) prior written notice to the Trustee.

(c) Any proceeds of insurance referred to in this Section 4.06 which are paid to the Trustee shall (1) if no Event of Default has occurred and is continuing, be returned to the Company to be applied as permitted by Section 3.09(b) (“Mandatory Offers to Purchase”), and (2) if an Event of Default has occurred and is continuing, be immediately applied to the obligations under the Notes in accordance with Article VII (“Defaults and Remedies”) (subject to the terms of the ABL Intercreditor Agreement).

Section 4.07. Compliance with Laws.

The Company shall, and shall cause each Subsidiary to, comply with all federal, state, and local laws and regulations (including Environmental Laws) which are applicable to the operations and Property of the Company or any Subsidiary and maintain all related permits necessary for the ownership and operation of the Company’s and each Subsidiary’s Property and business except to the extent the failure to comply therewith could not reasonably be expected to have a Material Adverse Change; provided that this Section 4.07 shall not prevent the Company or any Subsidiary from, in good faith and with reasonable diligence, contesting the validity or application of any such laws or regulations by appropriate legal proceedings for which adequate reserves have been established. The Company will, and will cause its Subsidiaries to, maintain in effect and enforce policies and procedures designed reasonably intended to procure compliance, in all material respects, by the Company, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

Section 4.08. Taxes.

The Company shall, and shall cause each Subsidiary and any member of the Tax Group to, pay and discharge all Taxes imposed on the Company, any Subsidiary, or any member of the Tax Group prior to the date on which penalties attach except (a) where such Tax is being contested in good faith and for which adequate reserves have been established in compliance with GAAP, or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Change.

Section 4.09. New Subsidiaries.

Within thirty (30) days after (x) the creation of any new Subsidiary of the Company or (y) the purchase by the Company or any Subsidiary of the capital stock of any Person, which purchase results in such Person becoming a Subsidiary of the Company, the Company shall cause (a) such Subsidiary, if it is a Domestic Subsidiary (excluding any FSHC), to become a Guarantor and to execute and deliver to the Trustee (i) a supplemental indenture in substantially the form as Exhibit E hereto, (ii) a notation of guarantee in substantially the form as Exhibit D hereto, (iii) a supplement to the applicable Security Agreement in substantially the same form as Annex 1 to such Security Agreement, (iv) a Mortgage if such Domestic Subsidiary (excluding any FSHC) owns Real Estate Assets required to be mortgaged under Section 4.19 (“Additional Material Real Estate Assets”), (v) if such Domestic Subsidiary owns any Equity Interests in any other Person, a supplement to the Pledge Agreement in substantially the same form as Annex 1 to the Pledge Agreement, provided that, such Domestic Subsidiary shall only be required to pledge 65% of the voting Equity Interests and 100% of the non-voting Equity Interests in each of its First-Tier CFCs or FSHCs (or such greater percentage of the voting Equity Interests in each such First-Tier CFC or FSHC that would not reasonably be expected to result in material tax liability (or a material loss of tax benefits) to the Notes Parties); provided, further that any such additional pledge shall be automatically released without any further action by any of the parties hereto upon notice to the Security Agent by the Company of its reasonable determination that such additional pledge is reasonably expected to result in material tax liability (or a loss of material tax benefits), and (vi) such evidence of corporate, partnership or limited liability company authority to enter into such supplemental indenture, such notation of guarantee, such Security Agreement, and the Pledge Agreement and an Opinion of Counsel to such Domestic Subsidiary (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), and (b) the equity holder of such Subsidiary to execute an amendment to the Pledge Agreement pledging 100% of the Equity Interest owned by such equity holder if such Subsidiary is a Domestic Subsidiary (but if such Subsidiary is an FSHC, limited to 65% of the voting Equity Interests and 100% of the non-voting Equity Interests issued by such FSHC), along with share certificates pledged thereby and appropriately executed stock powers in blank, if applicable. Notwithstanding the foregoing, Pioneer Services shall not be required to execute and deliver any Notes Documents so long as Pioneer Services (i) is a disregarded entity for U.S. federal income Tax purposes and (ii) owns no material assets other than no more than 3% of the ownership interests in Foreign Subsidiaries of Global Holdings. For the avoidance of doubt and notwithstanding anything contained in this Indenture or any other Notes Document to the contrary, (A) each Subsidiary that constitutes a guarantor or pledgor under the ABL Credit Agreement or any other ABL Credit Document shall constitute a Guarantor or pledgor, as applicable, under this Indenture and the other Notes Documents, and (B) subject to clause (A), (1) no Foreign Subsidiary of the Company or FSHC (other than Global Holdings) shall be considered, or shall be required to become, a Guarantor and (2) any Notes Party that owns an Equity Interest in a CFC or FSHC shall not be required to pledge (x) any Equity Interest in any Subsidiary of a First-Tier CFC or FSHC or (y) in excess of 65% of the voting Equity Interests issued by any First-Tier CFC or FSHC pursuant to the Pledge Agreement (or such greater percentage of the voting Equity Interests issued by any First-Tier CFC or FSHC that would not reasonably be expected to result in material tax liability (or a loss of material tax benefits) to the Notes Parties; provided, that any such additional pledge shall be automatically released without any further action by any of the parties hereto upon notice to the Security Agent by the Company of its reasonable determination that such additional pledge is reasonably expected to result in material tax liability (or a loss of material tax benefits)).

Section 4.10. Security.

The Company agrees that at all times the Security Agent shall have an Acceptable Security Interest that is superior to all other Liens (other than Permitted Priority Liens) in the Collateral to secure the performance and payment of the Notes Obligations.

Section 4.11. Deposit Accounts; Securities Accounts; Commodity Accounts.

The Company shall, and shall cause each other Notes Party to, maintain all deposit accounts, securities accounts and commodity accounts (other than the Excluded Accounts) subject to Account Control Agreements. Notwithstanding anything to the contrary contained in this Indenture or any other Notes Documents, in no event shall the Company or any other Notes Party be required to enter into an Account Control Agreement with respect to an Excluded Account.

Section 4.12. Records.

The Company shall, and shall cause each Subsidiary to, maintain books of record with respect to such Person’s operations, affairs, and financial condition in accordance with GAAP in all material respects.

Section 4.13. Maintenance of Properties.

The Company shall, and shall cause each Subsidiary to, maintain its owned, leased, or operated Property necessary in the operation of its business in good condition and repair, normal wear and tear and casualty and condemnation excepted; and shall abstain from, and cause each Subsidiary to abstain from, knowingly or willfully permitting the commission of waste or other injury, destruction, or loss of natural resources, or the occurrence of pollution, contamination, or any other condition in, on or about the owned or operated Property involving the Environment that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.

Section 4.14. Appraisals.

From and including December 31, 2020, the Company shall, and shall cause its Subsidiaries to, cause an Approved Appraiser to conduct an appraisal as of each December 31 and each June 30 of each fiscal year, and to cause such appraisals to be delivered to the Trustee in each case within thirty (30) days after such dates, solely for the benefit of the Trustee and the Holders (but at the Notes Parties’ sole cost and expense). Such written appraisals may include, but not be limited to, a detailed NOLV for machinery, parts, Equipment and other fixed assets of the Notes Parties; provided that at least one appraisal per fiscal year (including, for the avoidance of doubt, the fiscal year ended December 31, 2020) shall be a field appraisal and any other appraisals in such fiscal year shall be desktop updates. Within two (2) Business Days after the delivery of an appraisal in accordance with this Section 4.14, the Company shall deliver a Compliance Certificate to the Trustee with a written direction to the Trustee to deliver a copy to the Holders. In addition, from and including the quarter ended December 31, 2020, the Company shall include information with respect to the calculation of the Asset Coverage Ratio in its quarterly reports on Form 10-Q and its annual reports on Form 10-K.

Section 4.15. Titled Collateral.

The Company shall, and shall cause each of its Subsidiaries that is a Notes Party to:

(a) On or before the date that is 150 days following the Issue Date, cause the original certificate of title for each piece of Certificated Equipment or Certificated Motor Vehicles (other than Excepted Certificated Equipment and Motor Vehicles) owned by it on the Issue Date to name the Security Agent as the holder of an Acceptable Security Interest thereon and shall deliver a copy of such certificate of title to the Security Agent (or its designated agent) with such notation; and

(b) Cause the original certificate of title for each piece of Certificated Equipment and Certificated Motor Vehicle (other than Excepted Certificated Equipment and Motor Vehicles) purchased by it after the Issue Date to name the Security Agent as the holder of an Acceptable Security Interest thereon and shall deliver a copy of such certificate of title to the Security Agent (or its designated agent) with such notation within 45 days after such purchase.

Section 4.16. Quarterly Update Calls.

The Company will, promptly following the delivery of Financial Statements under Section 4.05 (“Reporting”), participate in a meeting or conference call with the Trustee and the Holders; provided that the foregoing requirement may be satisfied by public earnings calls for all shareholders that are open to the Trustee and the Holders. At any time that the Company is not subject to the reporting requirements of Section 13 and 15(d) of the Exchange Act, any Person who attends such conference call with the Company will be required to represent to and agree with the Company (and by attending such conference call, such person will be deemed to have represented and agreed with the Company) to clauses (1) through (6) of Section 4.05(d).

Section 4.17. [Reserved].

Section 4.18. Further Assurances.

At any time or from time to time, each Notes Party will, at its expense, promptly execute, acknowledge and deliver such further documents and do such other acts and things as may be necessary in order to effect fully the purposes of the Notes and the Subsidiary Guarantees and the Security Documents. In furtherance and not in limitation of the foregoing, each Notes Party shall take such actions as may be necessary from time to time to ensure that the Notes are guaranteed by the Guarantors and are secured by substantially all of the assets of the Company and its Subsidiaries and all of the outstanding Equity Interests of the Company and its Subsidiaries (subject to limitations contained in the Security Documents with respect to Foreign Subsidiaries, FSHCs and Excluded Property (as defined in the Security Agreement)).

Section 4.19. Additional Material Real Estate Assets.

In the event that (a) (i) one or more Notes Parties acquires Real Estate Assets after the Issue Date or (ii) any Person that owns Real Estate Assets becomes a Guarantor after the Issue Date, and (b) the aggregate book value or aggregate fair market value, as reasonably estimated by the Company in good faith, of all such Real Estate Assets described in clause (a), together with the aggregate book value or aggregate fair market value, as reasonably estimated by the Company in good faith, as applicable, of all other Real Estate Assets of the Notes Parties (other than the Excepted Real Estate Assets owned on the Issue Date) that are not subject to an Acceptable

Security Interest under a Mortgage, exceeds $2,500,000, then such Notes Party shall (A) promptly (and, in any event, within 10 Business Days thereafter) take all such actions that are necessary to subject such Real Estate Assets (other than Real Estate Assets of the Notes Parties for which neither the aggregate book value nor the aggregate fair market value for all such Real Estate Assets for all Notes Parties, taken as a whole (other than Excepted Real Estate Assets) equals or exceed $2,500,000) to a Lien in favor of the Security Agent for the benefit of the Holders, including executing and delivering, or causing to be executed and delivered, one or more Mortgages with respect to such Real Estate Assets, together with all documents, instruments, agreements, certificates, title insurance, title opinions, legal opinions and surveys related thereto that are reasonably requested by the Security Agent and (B) reasonably in advance of the execution and delivery of any Mortgage covering any Real Estate Assets on which any “Building” or “Manufactured (Mobile) Home” (each, as defined in the applicable Flood Insurance Regulations) is located, deliver, or caused to be delivered, to the Trustee life-of-loan Federal Emergency Management Agency Standard Flood Hazard Determinations with respect to such Real Estate Assets.

Section 4.20. Anti-Corruption Laws.

The Company and its Subsidiaries shall conduct their business in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act of 2010, and other applicable anti-corruption legislation in other jurisdictions where the Company or its Subsidiaries employs or contracts personnel and conducts material operations, and maintain policies and procedures designed to promote and achieve compliance with such laws.

Section 4.21. Additional Subsidiary Guarantees.

Subject to Section 4.09 (“New Subsidiaries”) (but, for the avoidance of doubt, without limiting the obligations of the Company set forth therein), if any Domestic Subsidiary that is not a Guarantor guarantees, assumes or in any other manner becomes liable for Debt of any Notes Party, then such Domestic Subsidiary will (1) become a Guarantor and (2) execute a supplemental indenture in substantially the form attached as Exhibit E hereto, and a notation of guarantee in substantially the form attached as Exhibit D hereto, and deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, in each case, within 10 Business Days of the date on which it so became liable with respect to such Debt; provided that, any Domestic Subsidiary that constitutes an Immaterial Subsidiary shall not be required to become a Guarantor until such time as it ceases to be an Immaterial Subsidiary. Upon the release, termination or satisfaction of such Domestic Subsidiary’s guarantee or assumption of such Debt, or as otherwise provided in this Indenture, that Subsidiary’s Subsidiary Guarantee shall automatically be released and terminated.

Section 4.22. Payments for Consent.

The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder 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 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 4.23. Floating Interest Rate.

(a) The interest rate on the Notes will reset on each Interest Payment Date occurring prior to the final Stated Maturity of the Notes. The interest rate for the Notes for a particular Interest Period will be a rate equal to LIBOR on the second London Business Day preceding the first day of such Interest Period (an “Interest Determination Date”), as determined by the Calculation Agent, plus 9.50%; provided that, for all Interest Periods commencing from May 15, 2024, the interest rate for the Notes for a particular Interest Period will be a rate equal to LIBOR as of the relevant Interest Determination Date, plus 10.50%.

(b) Subject to paragraphs (c) and (d) of this Section 4.23, “LIBOR” shall mean for any Interest Period, the rate per annum obtained by dividing (i) (a) the rate per annum equal to the rate determined by the Calculation Agent to be the London interbank offered rate administered by the ICE Benchmark Administration (or any other person which takes over the administration of that rate) for deposits (for delivery on the first day of such period) with a term equivalent to such period in U.S. dollars displayed on the ICE LIBOR USD page of the Reuters Screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters, determined as of approximately 11:00 a.m. (London, England time) on such Interest Determination Date, or (b) in the event the rate referenced in the preceding clause (a) is not available, the rate per annum equal to the average of the quotations received by the Calculation Agent from the Company for deposits (for delivery on the first day of the relevant period) in U.S. dollars of amounts in same day funds comparable to the principal amount of the Notes from three leading banks in the London deposit market, for which LIBOR is then being determined with a term comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement; provided, however, that notwithstanding the foregoing, LIBOR (or any Alternative Rate (as defined below)) shall at no time be less than 1.500%.

(c) Notwithstanding the foregoing, if the Company determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for determining LIBOR (including because LIBOR is not available or published on a current basis), it shall as soon as practicable so notify the Calculation Agent and the Company shall provide a substitute for LIBOR, which shall be the alternative reference rate selected by the central bank, reserve bank, monetary authority or any similar institution (including any committee or working group thereof) that is consistent with accepted market practice, as determined by the Company (the “Alternative Rate”). The Calculation Agent will use such Alternative Rate for each future Interest Determination Date to calculate the interest rate for the Notes. As part of such substitution, the Company will make such adjustments (“Adjustments”) to the Alternative Rate or the spread thereon, as well as the business day convention, interest determination dates and related provisions and definitions, in each case that are consistent with accepted market practice for the use of such Alternative Rate for debt obligations such as the Notes. The Company and the Trustee shall enter into an amendment to this Indenture to reflect the Alternative Rate and such other related changes to this Indenture as may be applicable as determined in good faith by the Company and set forth in an Officers’ Certificate delivered to the Trustee. Notice of such amendment shall be promptly given to the Calculation Agent by the Company. If the Company determines that there is no clear market consensus as to whether any rate has replaced LIBOR in customary market usage, the Calculation Agent shall have the right to resign as calculation agent in respect of the Notes and the Company will appoint, in its sole discretion, a successor calculation agent in respect of the Notes to determine the Alternative Rate and make any Adjustments thereon, and whose determinations will be binding

on the Company, the Trustee and the holders of the Notes. If, however, the Company determines that LIBOR has been discontinued, but for any reason an Alternative Rate has not been determined, LIBOR (for purposes of calculating the relevant interest rate) will be equal to such rate on the Interest Determination Date when LIBOR was last available on Bloomberg L.P.’s page “BBAM” and last used to determine the relevant interest rate for the Notes. The Company will promptly notify Holders of the Notes of the rate replacing LIBOR.

(d) LIBOR for the Interest Period commencing on the Issue Date shall be 1.5%.

(e) Promptly upon determination of the interest rate for a given Interest Period on each Interest Determination Date, the Calculation Agent will inform the Company and the Trustee by written notice of the interest rate for such Interest Period. The Company will make available the interest rates for current and preceding Interest Periods by delivery of a notice through such medium as available to participants in DTC or any successor thereof, and in accordance with applicable respective rules and procedures as long as the Notes are held in global form. In the event that the Notes are held in certificated form, upon the request of the Holders, the Company will provide the interest rates for the current and preceding Interest Periods.

(f) All percentages resulting from any calculation of any interest rate for the Notes will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upward, and all U.S. dollar amounts would be rounded to the nearest cent, with one-half cent being rounded upward. Each calculation of the interest rate by the Calculation Agent will (in the absence of manifest error) be final and binding on the Holders and the Notes Parties.

(g) Interest on the Notes will be payable on a quarterly basis in arrears, each February 15, May 15, August 15 and November 15, until the final Stated Maturity of the Notes (each, an “Interest Payment Date”). For the avoidance of doubt, the first Interest Payment Date shall be August 15, 2020.

(h) Interest on the Notes will accrue from (and including) the Issue Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will be applied to the principal amount of the Notes outstanding on the first day of the relevant Interest Period and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

Section 4.24. Post-Issue Date Matters.

No later than 10 Business Days after the Issue Date, the applicable Notes Parties shall deliver to the Security Agent the certificate representing 35% of the Equity Interests in Proveedora Internacional de Taladros S.A.S., together with the undated stock power or other transfer instrument evidencing such Equity Interests.

ARTICLE V.

NEGATIVE COVENANTS

Section 5.01. Debt.

The Company shall not, nor shall it permit any Subsidiary to, create, assume, incur, suffer to exist, or in any manner become liable, directly, indirectly, or contingently in respect of, any Debt other than the following (collectively, the “Permitted Debt”):

(a) Debt of the Notes Parties under the Notes issued hereunder (including any PIK Notes);

(b) intercompany Debt incurred in the ordinary course of business subordinated to the Notes Obligations on terms set forth in the Intercompany Subordination Agreement, evidenced by an Intercompany Note, and owed (1) by any Guarantor (other than Global Holdings and its Subsidiaries) to the Company; (2) by the Company to any Guarantor (other than Global Holdings and its Subsidiaries); (3) by any Guarantor (other than Global Holdings and its Subsidiaries) to another Guarantor; and (4) by Global Holdings or any of its Subsidiaries to the Company or any of its other Subsidiaries to the extent such Debt is an Investment permitted under Section 5.03(c) or (k);

(c) Debt of Foreign Subsidiaries; provided that the aggregate outstanding principal amount of such Debt shall not at any time exceed $2,500,000 and, provided further, that such Debt is not directly or indirectly recourse to any of the Notes Parties or of their respective assets;

(d) Debt incurred in the ordinary course of business to finance the payment of premiums for a 12 month period for insurance; provided that the aggregate outstanding principal amount of such Debt shall not at any time exceed $2,500,000;

(e) Debt (other than for borrowed money) subject to Liens permitted under Section 5.02(b) and Section 5.02(e);

(f) Debt arising under any Hedging Arrangement permitted under Section 5.15;

(g) unfunded Plan obligations or liabilities to the extent they are permitted to remain unfunded under applicable law;

(h) Guarantees (1) of any Notes Party in respect of Debt of any Notes Party (other than Global Holdings and its Subsidiaries, except to the extent that the Debt incurred by Global Holdings and its Subsidiaries, were it guaranteed, would not exceed the amount of an Investment therein permitted under Section 5.03) otherwise permitted hereunder and (2) of the Company or any Subsidiary in respect of Debt of Global Holdings or any of its Subsidiaries otherwise permitted hereby to the extent such Guarantees constitute Investments permitted under Section 5.03(c) or (k);

(i) Debt of the Company under the Convertible Bonds existing on the Issue Date (including any capitalized interest or payment-in-kind interest thereon) and any refinancing, extension, renewal or replacement thereof; provided that (i) such refinancing, extension, renewal or replacement does not increase the then outstanding principal amount of the Convertible Bonds (plus all accrued interest on the Convertible Bonds and the amount of all expenses and premiums incurred in connection therewith), (ii) the final Stated Maturity of any such refinancing, extension, renewal or

replacement Debt shall not be earlier than 180 days after the final Stated Maturity of the Notes, (iii) the Weighted Average Yield of such refinanced, extended, renewed or replaced Debt is equal to or greater than the Weighted Average Yield of the Convertible Bonds and (iv) such refinanced, extended, renewed or replaced Debt is incurred by the Company.

(j) obligations in respect of Cash Management Agreements in the ordinary course of business, including any letter of credit supporting such obligations;

(k) Debt incurred by the Company or its Subsidiaries in an Acquisition permitted under Section 5.04 consisting of agreements providing for indemnification, the adjustment of the purchase price or similar adjustments (but not earnouts);

(l) Debt arising under bid, performance, stay, customs, appeal and surety bonds, or with respect to workers’ compensation or other like employee benefit claims, in each case incurred in the ordinary course of business, and obligations in respect of letters of credit related thereto;

(m) Debt existing on the Issue Date and set forth in Schedule 5.01 hereto and any modifications, refinancings, extensions, renewals or replacements (but not the increase in the aggregate principal amount other than customary costs, expenses and premiums associated with such modifications, refinancings, extensions, renewals or replacements) thereof;

(n) other Debt in an aggregate principal amount outstanding (together with the principal amount of Debt outstanding pursuant to Section 5.01(c), (d) or (f)) at any time not to exceed $5,000,000; provided that if the Company creates, assumes, incurs, suffers to exist or otherwise becomes liable for secured Debt for borrowed money pursuant to this Section 5.01(n), the Weighted Average Yield applicable to such Debt shall not be greater than the applicable Weighted Average Yield payable pursuant to the Notes, unless the interest rate with respect to the Notes is increased so as to cause the then applicable Weighted Average Yield on the Notes to equal the Weighted Average Yield then applicable to such Debt;

(o) Additional Notes Collateral Debt in an aggregate principal amount outstanding at any time not to exceed $10,000,000, and any extensions, refinancings, refundings, replacements and renewals in respect thereof, provided that any Debt so extending, refinancing, refunding, replacing or renewing such Debt is Additional Notes Collateral Debt and, for the avoidance of doubt, is subject to the Additional Notes Collateral Debt ROFO; and

(p) Debt of the Notes Parties under the ABL Credit Documents as in effect on the date hereof, or as amended, restated, supplemented or otherwise modified in accordance with Section 5.20(b), and any extensions, refinancings, refundings, replacements and renewals in respect thereof made in accordance with such Section 5.20(b) and the ABL Intercreditor Agreement, so long as, in each case, such Debt is subject to the ABL Intercreditor Agreement.

Section 5.02. Liens.

The Company shall not, nor shall it permit any Subsidiary to, create, assume, incur, or suffer to exist any Lien on the Property of the Company or any Subsidiary, whether now owned or hereafter acquired, or assign any right to receive any income, other than the following (collectively, the “Permitted Liens”):

(a) Liens securing the Notes Obligations;

(b) Excepted Liens;

(c) Liens arising from precautionary UCC financing statements regarding operating leases entered into by the Company or any Subsidiary in the ordinary course of business;

(d) Liens on cash or securities pledged to secure Cash Management Agreements and insurance policies in the ordinary course of business and cash deposits to secure letters of credit in respect of the foregoing;

(e) Liens (1)(A) on advances of cash or Liquid Investments in favor of the seller of any property to be acquired in connection with an Acquisition permitted by Section 5.04, which advances shall be applied against the purchase price for such Acquisition or (B) consisting of an agreement to dispose of any property in a Disposition permitted by Section 5.08, and (2) on cash earnest money deposits to secure performance made in connection with any letter of intent or purchase agreement not prohibited hereby;

(f) Liens existing on the Issue Date and set forth in Schedule 5.02 and any modifications, replacements, renewals or extensions thereof; provided that (1) such Liens shall not be modified or amended to secure more than the amount of the Obligations which they secure on the Issue Date and (2) such Liens do not extend to any additional Property other than after acquired Property and proceeds and products thereof;

(g) other Liens securing Obligations, actual or contingent, in an aggregate principal amount not greater than $5,000,000;

(h) Liens securing any Debt permitted under Section 5.01(o); provided that the applicable Liens are subject to the ABL Intercreditor Agreement;

(i) Liens securing any Debt permitted under Section 5.01(p); provided that the applicable Liens are subject to the ABL Intercreditor Agreement; and

(j) “protective” Liens granted in connection with sales permitted hereunder that are intended to be “true sales” or bailment, storage or similar arrangements in which a counterparty holds title to the assets that are the subject of such transaction, and precautionary UCC financing statement filings made in respect of consignments.

Section 5.03. Investments.

The Company shall not, nor shall it permit any Subsidiary to, make or hold any direct or indirect Investment in any Person, other than the following (collectively, the “Permitted Investments”):

(a) Investments in the form of trade credit to customers of the Notes Parties arising in the ordinary course of business and represented by accounts from such customers;

(b) Liquid Investments;

(c) Investments existing on the Issue Date (1) by the Company in any Subsidiary, and (2) by any Subsidiary in the Company or any other Subsidiary or (3) set forth on Schedule 5.03;

(d) Investments in Hedging Arrangements permitted under Section 5.15;

(e) ordinary course of business Investments in (1) a Guarantor (other than Global Holdings and its Subsidiaries) or (2) the Company; provided that, to the extent such Investments consist of intercompany loans or advances, such Investments are subordinated to the Notes Obligations and are evidenced by an Intercompany Note;

(f) promissory notes and other non-cash consideration received by the Notes Parties in connection with any asset sale permitted under Section 5.08;

(g) Investments received in connection with the bankruptcy or reorganization of suppliers and customers, or with the settlement of delinquent obligations of, and disputes with, customers and suppliers arising in the ordinary course of business;

(h) loans and advances to employees of the Notes Parties in the ordinary course of business; provided that the aggregate principal amount of all such loans and advances shall not exceed $50,000 at any time outstanding;

(i) creation or acquisition (subject to and in accordance with Section 5.04) of any additional Subsidiaries (and in the case of an Acquisition permitted by Section 5.04, the Investments owned by such Subsidiaries on the date of such Acquisition shall be deemed permitted hereby provided that such Investments were not acquired in contemplation of such Acquisition); provided that each such Subsidiary shall comply with the requirements of Section 4.09; provided further that neither the Company nor any Subsidiary (other than Global Holdings and its Subsidiaries) may create or acquire any Foreign Subsidiary;

(j) Investments consisting of Debt (other than Debt described in Section 5.01(n) and (o)), Acquisitions and corporate actions, otherwise permitted pursuant to the applicable provisions of Section 5.01 (other than Section 5.01(n) and (o)), Section 5.04 and Section 5.07;

(k) (i) Investments by a Subsidiary of Global Holdings in another Subsidiary of Global Holdings; (ii) Investments of Equipment consisting of parts, supplies and spares into Global Holdings or Foreign Subsidiaries of Global Holdings; provided that (A) the aggregate value of all such Equipment invested pursuant to this clause (ii), together with the aggregate value of all Equipment Disposed of pursuant to Section 5.08(i), shall not exceed $10,000,000 (excluding Investments made pursuant to Section 5.03(l)), (B) no Default or Event of Default shall have occurred and be continuing at the time of such Investment or shall result therefrom, (C) the Asset Coverage Ratio of the Company and its Subsidiaries, calculated on a pro forma basis to give effect to all such Investments and Dispositions, shall not be less than 1.5:1.0, and (D) to the extent such Investment consists of a lease of Equipment, (1) the applicable Foreign Subsidiary shall have executed a consent to the assignment of such lease pursuant to the Security Documents and (2) Account Control Agreements shall have been executed in accordance with Section 4.11 with respect to each deposit account in which payments under any such lease are deposited; and (iii) cash Investments in the Colombian Group in an aggregate amount over the period commencing on the Issue Date not to exceed the sum of (x) $25,000,000 plus (y) an amount equal to the aggregate amount distributed or otherwise paid on or after the Issue Date to the Notes Parties (other than Global Holdings and its Subsidiaries) by Global Holdings or one or more Foreign Subsidiaries comprising the Colombian Group, including, but not limited to, lease payments with respect to the lease of any drilling rig leased by one or more of the Foreign Subsidiaries comprising the Colombian Group from the Notes Parties (other than Global Holdings and its Subsidiaries); provided that (A) in no event shall the aggregate amount of Investments outstanding under this clause (iii) exceed $25,000,000 (excluding Investments made pursuant to Section 5.03(l)) at any time, (B) no Default or Event of Default shall have occurred and be continuing at the time of such Investment or shall result therefrom and (C) to the extent practicable, such Investment shall be made as a loan or advance evidenced by an Intercompany Note; and

(l) Investments by a Notes Party of the drilling rigs described in Section 5.08(k) and any related assets and equipment useful for the operation thereof into Global Holdings or any Foreign Subsidiary comprising the Colombian Group in order to facilitate Dispositions of such rigs and related equipment (or Foreign Subsidiary) to a third party in accordance with Section 5.08(k).

Section 5.04. Acquisitions.

The Company shall not, nor shall it permit any Subsidiary to, make an Acquisition in a transaction or related series of transactions unless:

(a) no Event of Default shall have occurred or be continuing or would result from such Acquisition,

(b) such Acquisition is substantially related to the business of the Company and its Subsidiaries individually or in the aggregate and is not hostile,

(c) such Acquisition is either (i) not of a Foreign Subsidiary or (ii) made by Global Holdings or one of its Subsidiaries, and

(d) solely with respect to Acquisitions financed with cash consideration, if (i) the aggregate consideration for such Acquisition exceeds $10,000,000 or (ii) the aggregate consideration for all such Acquisitions since the Issue Date exceeds $20,000,000, then after giving pro forma effect to such Acquisition, the sum of (A) the aggregate Unrestricted Cash and Liquid Investments of the Notes Parties at such time plus (B) the aggregate amount available for borrowing under the ABL Credit Agreement at such time shall not be less than $90,000,000.

Section 5.05. Agreements Restricting Liens or Payments to Company.

The Company shall not, nor shall it permit any Subsidiary to, create, incur, assume or permit to exist any contract, agreement or understanding (other than this Indenture, the other Notes Documents, the ABL Credit Documents and the Convertible Bond Indenture) which in any way (a) prohibits or restricts the granting, conveying, creation or imposition of any Lien on any of its Property, whether now owned or hereafter acquired, to secure the Notes Obligations (other than agreements governing Debt permitted by Section 5.01(n) and (o) to the extent such restrictions govern only the assets financed pursuant to or securing such Debt incurred pursuant to Section 5.01(n) and (o)), (b) restricts any Subsidiary from paying Restricted Payments to the Company, or (c) requires the consent of or notice to other Persons in connection therewith, except (1) in connection with a Disposition permitted by Section 5.08 or (2) customary restrictions contained in leases, subleases or licenses entered into in the ordinary course of business.

Section 5.06. [Reserved]

Section 5.07. Corporate Actions.

The Company shall not, nor shall it permit any Subsidiary to, merge or consolidate with or into any other Person, except that, subject to compliance with Article VI, (a) a Notes Party (other than Global Holdings) may merge or be consolidated with or into any other Notes Party (other than Global Holdings), (b) any Subsidiary of Global Holdings may merge or be consolidated with or into any other Subsidiary of Global Holdings and (c) any Subsidiary may merge with any other Person (other than a Subsidiary of Global Holdings) in order to effect an Investment, Acquisition or Disposition permitted pursuant to the applicable provisions of Sections 5.03(i), 5.04 and Section 5.08(c), (k), and (l), respectively, provided that, in each such case under (a), (b) or (c), immediately after giving effect to any such proposed transaction (x) no Default would exist, (y) in the case of any such merger to which the Company is a party, the Company is the surviving entity, and (z) in the case of any such merger to which a Notes Party is a party, the Notes Party is the surviving entity (or if not the surviving entity, the survivor shall, on the date of such transaction, (i) assume the Obligations of such Notes Party and (ii) become a party to the Security Documents (in accordance with Section 4.09 hereof), including, without limitation, by (A) the execution of such documents of joinder and such lien and security agreements as are necessary for the Security Agent to have an Acceptable Security Interest in such Person’s Property (other than Excluded Property (as defined in the Security Agreement)) and in the Equity Interests in such Person, and (B) demonstrating that the Security Agent will have an Acceptable Security Interest in such Person’s Collateral and its compliance in all material respects with applicable laws).

Section 5.08. Dispositions.

The Company shall not, nor shall it permit any Subsidiary to, make any Disposition or enter into any agreement to make any Disposition, except:

(a) Dispositions of obsolete or worn out Property, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of Property no longer useful or used by the Company and its Subsidiaries in the conduct of its business;

(b) Dispositions of Equipment or real Property to the extent that (1) such Property is exchanged for credit against the purchase price of similar replacement Property or (2) the proceeds of such Disposition are reasonably promptly applied, or contractually obligated to be applied (in the case of Equipment for which substantial delivery lead times apply), to the purchase price of such replacement Property; provided, to the extent the Property being transferred constitutes Collateral, such replacement Property shall constitute Collateral;

(c) Dispositions of Property (i) by any Subsidiary to the Company or to another Subsidiary (other than Global Holdings or any Subsidiary thereof) and (ii) by any Subsidiary of Global Holdings to another Subsidiary of Global Holdings; provided that, in the case of clause (i) or (ii), if the transferor of such property is Notes Party, the transferee thereof must be a Notes Party;

(d) Dispositions of inventory in the ordinary course of business;

(e) Dispositions of Liquid Investments;

(f) Dispositions of accounts receivable in connection with the collection or compromise thereof in the ordinary course of business;

(g) Leases, subleases, licenses or sublicenses of property (other than to Global Holdings and its Subsidiaries except with respect to existing leases of drilling rigs numbered 21, 51 and 55) in the ordinary course of business and which do not materially interfere with the business of the Company and its Subsidiaries;

(h) Transfers of Property subject to any settlement of or payment in respect of any property or casualty insurance claim (excluding any claim in respect of business interruption) or any condemnation proceeding relating to any asset of the Company or any of its Subsidiaries, subject to the Company’s compliance with Section 3.09(b);

(i) Dispositions of Equipment consisting of parts, supplies and spares by the Company and its Subsidiaries to Global Holdings or Foreign Subsidiaries of Global Holdings; provided that (i) the aggregate book value of all such Equipment Disposed of pursuant to this Section 5.08(i), together with the aggregate book value of all Equipment invested pursuant to Section 5.03(k)(ii) during the period commencing on the Issue Date, shall not exceed $10,000,000, (ii) no Default or Event of Default shall have occurred and be continuing at the time of such Disposition or shall result therefrom, and (iii) the Asset Coverage Ratio of the Company and its Subsidiaries, calculated on a pro forma basis to give effect to all such Dispositions and Investments, shall not be less than 1.5:1.0;

(j) Dispositions permitted by Section 5.03 (other than Section 5.03(j)), Section 5.07 (other than Section 5.07(c)) and Section 5.09;

(k) Dispositions of drilling rigs numbered 21, 51, 52, 53, 55, 301, 302 and 303, each located in Colombia, to a third party (or to Global Holdings on an interim basis in order to facilitate such a disposition), or of the Subsidiary owning such rigs; provided that (1) at the time of such Disposition, no Default shall exist or would result from such Disposition, (2) the consideration received by the Company or its Subsidiaries in connection with such Disposition is (A) equal to or greater than the Fair Market Value of the drilling rigs (or Subsidiary) being Disposed of and (B) comprised of at least 90% cash or Liquid Investments and (iii) in the case of a Disposition of a Subsidiary, such Subsidiary owns no assets or property other than such drilling rigs, related assets and equipment useful for the operation thereof and associated working capital; and

(l) Dispositions by the Company and its Subsidiaries not otherwise permitted under this Section 5.08; provided that (1) at the time of such Disposition, no Default shall exist or would result from such Disposition, (2) the consideration received by the Company or its Subsidiaries in connection with such Disposition is (A) equal to or greater than the Fair Market Value of the Property being Disposed of and (B) comprised of at least 90% cash or Liquid Investments, and (3) the Asset Coverage Ratio is not less than 1.5 to 1.0 on a pro forma basis after giving effect to such Disposition.

Section 5.09. Restricted Payments.

The Company shall not, nor shall it permit any Subsidiary to declare, pay or make any Restricted Payments except:

(a) the Notes Parties may make Restricted Payments among and to each other;

(b) the Company’s Foreign Subsidiaries may make Restricted Payments among and to each other;

(d) the Notes Parties may make Restricted Payments in connection with the customary operation of a consolidated cash management system for the Notes Parties;

(e) the Company may, and may incur obligations to, purchase, redeem or otherwise acquire its Equity Interests with the proceeds received from the substantially concurrent issue of new Equity Interests of the Company;

(f) the Company may, and may incur obligations to, purchase, repurchase, retire or otherwise acquire or retire for value its Equity Interests (i) held by any present or former director, officer, member of management or employee of any Subsidiary in accordance with repurchase rights or obligations established in connection with such Equity Interests, and (ii) pursuant to the terms of any incentive, benefit, compensation, employee or restricted equity interest purchase plan, phantom stock plan, equity interests option plan or other employee benefit or equity based compensation plan established by the Company; provided that the aggregate amount of all such Restricted Payments made to present or former directors, officers or members of management pursuant to this Section 5.09(f) shall not exceed $100,000 in any fiscal year of the Company;

(g) the Company may, and may incur obligations to, make Restricted Payments consisting of (i) the cashless exercise of options or warrants, and the vesting of restricted stock, in connection with customary and reasonable employee compensation, incentive, or other benefit programs, and (ii) purchases of fractional shares provided that total cash disbursements for fractional shares do not exceed $50,000 in any fiscal year of Company;

(h) the Company may, and may incur obligations to, renew, extend, rearrange or refinance (whether at or prior to the maturity thereof) the Additional Notes Collateral Debt incurred pursuant to Section 5.01(o), provided that any Debt so renewing, extending, rearranging or refinancing such Debt is Additional Notes Collateral Debt and, for the avoidance of doubt, is subject to the Additional Notes Collateral Debt ROFO; and

(i) the Company may, and may incur obligations to, renew, extend, rearrange or refinance (whether at or prior to the maturity thereof) the Senior Debt outstanding under the ABL Credit Agreement, provided that any such renewal, extension, rearrangement or refinancing is effected in accordance with the requirements of Section 5.01(p).

Section 5.10. Affiliate Transactions.

The Company shall not, nor shall it permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction or series of transactions (including, but not limited to, the purchase, sale, lease or exchange of Property, the making of any Investment, the giving of any Guarantee, the assumption of any obligation or the rendering of any service) with any of their Affiliates involving aggregate value in excess of $500,000 unless such transaction or series of transactions (a) is on terms no less favorable to the Company or such Subsidiary, as applicable, than those that could be obtained in a comparable arm’s length transaction with a Person that is not an Affiliate and (b) is consented to by Holders of at least 66²⁄₃% in aggregate principal amount of the Notes then outstanding. The foregoing requirements shall not apply to, to the extent otherwise permitted under this Indenture, transactions among the Company and any Subsidiary.

Section 5.11. Line of Business.

The Company shall not, and shall not permit any Subsidiary to, materially change the character of the Company’s and the Subsidiaries’ collective business as conducted on the date of this Indenture, or engage in any type of business not reasonably related to the Company’s and the Subsidiaries’ collective business as presently and normally conducted.

Section 5.12. Hazardous Materials.

The Company (a) shall not, nor shall it permit any Subsidiary to, create, handle, transport, use, or dispose of any Hazardous Substance or Hazardous Waste except in compliance with all applicable permits and applicable Environmental Laws, except where such failure to comply with applicable permits or Environmental Law would not result in a Material Adverse Change; and (b) shall not, nor shall it permit any Subsidiary to, release any Hazardous Substance or Hazardous Waste into the environment and shall not permit the Company’s or any Subsidiary’s Property to be subjected to any release of Hazardous Substance or Hazardous Waste, except where such release would not result in a Material Adverse Change.

Section 5.13. Compliance with ERISA.

The Company shall not, nor shall it permit any member of the Controlled Group to, directly or indirectly: (a) engage in any transaction in connection with which the Company or any member of the Controlled Group could be subjected to either a civil penalty assessed pursuant to Section 502(c), (i) or (l) of ERISA or a Tax imposed by Chapter 43 of Subtitle D of the Code; (b) terminate any Plan in a manner, or take any other action with respect to any Plan, which could result in any liability to the Company or any member of the Controlled Group to the PBGC (other than premiums in the ordinary course of business); (c) fail to make full payment or contribution when due of all amounts due under the provisions of any Plan, agreement relating thereto or applicable law; (d) permit the actuarial present value of all accumulated benefit liabilities (based on the assumptions used for purposes of Accounting Standards Codification No. 715: Compensation Retirement Benefits) under all underfunded Plans to exceed the fair market value of the assets of all such underfunded Plans allocable to such benefit liabilities; (e) contribute to or assume an obligation to contribute to any Multiemployer Plan; (f) acquire an interest in any Person that causes such Person to become a member of the Controlled Group if such Person sponsors, maintains or contributes to, or at any time in the six-year period preceding such acquisition has sponsored, maintained, or contributed to, (1) any Multiemployer Plan or (2) any Plan with respect to which the actuarial present value of all accumulated benefit liabilities (based on the assumptions used for purposes of Accounting Standards Codification No. 715: Compensation Retirement Benefits) under all underfunded Plans of such Person and the Controlled Group exceed the fair market value of the assets of all such underfunded Plans allocable to such benefit liabilities; (g) incur a liability to or on account of a Plan under Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; (h) contribute to or assume an obligation to contribute to any employee welfare benefit plan, as defined in Section 3(1) of ERISA, including, without limitation, any such plan maintained to provide benefits to former employees of such entities, that may not be terminated by such entities in their sole discretion at any time without any liability; or (i) amend a Plan resulting in an increase in current liability such that the Company or any member of the Controlled Group is required to provide security to such Plan under ERISA or the Code, if the action described in clauses (a) through (i) would, individually or in the aggregate, reasonably be expected to have a Material Adverse Change.

Section 5.14. Sale and Leaseback Transactions.

The Company shall not, nor shall it permit any Subsidiary to, sell or transfer to a Person any Property, whether now owned or hereafter acquired, if at the time or thereafter the Company or a Subsidiary shall lease as lessee such Property or any part thereof or other Property which the Company or such Subsidiary intends to use for substantially the same purpose as the Property sold or transferred.

Section 5.15. Limitation on Hedging.

The Company shall not, nor shall it permit any Subsidiary to, (a) purchase, assume, or hold a speculative position in any commodities market or futures market or enter into any Hedging Arrangement for speculative purposes; or (b) be party to or otherwise enter into any Hedging Arrangement which (i) is entered into for reasons other than to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Company or its Subsidiaries or (ii) is with any party other than (A) a lender or agent under the ABL Credit Agreement or (B) any other Person if such Person or its credit support provider has a long term senior unsecured debt rating at the time of entry into the applicable Hedging Arrangement is A-/A3 by S&P or Moody’s (or their equivalent) or higher.

Section 5.16. Minimum Asset Coverage Ratio.

From and including December 31, 2020, the Company shall not permit the Asset Coverage Ratio as of any June 30 or December 31 of any calendar year to be less than 1.5:1.0.

Section 5.17. Global Holdings and its Subsidiaries.

(a) The Company will not, and will not permit any Subsidiary (other than Global Holdings and its Subsidiaries) to Guarantee any Debt or other obligations of Global Holdings or any of its Subsidiaries, except to the extent permitted by Section 5.03(c) or (k).

(b) The Company will not permit Global Holdings or any of its Subsidiaries to hold any Equity Interests in, or any Debt of, the Company or any Subsidiary (other than Global Holdings and its Subsidiaries).

(c) The Company will cause the management, business and affairs of each of the Company and the Subsidiaries to be conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate Financial Statements of Global Holdings and its Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Company and the Subsidiaries to be commingled) so that Global Holdings and each of its Subsidiaries will be treated as a corporate entity separate and distinct from the Company and the Subsidiaries (other than Global Holdings and its Subsidiaries).

Section 5.18. Landlord Agreements.

(a) No Notes Party shall, nor shall it permit any of its Subsidiaries that is, or is required to be, a Notes Party to hold, store or otherwise maintain any Equipment or Inventory that is intended to constitute Collateral pursuant to the Security Documents at premises which are not owned by a Notes Party unless (1) such Equipment is located at the job site under which such Equipment is then currently under contract or is out for repair or maintenance for a period of up to 120 days, (2) such Equipment or Inventory is located at premises that are leased by a Notes Party or stored at the premises of another Person, and such Notes Party has used commercially reasonable efforts to seek and deliver (x) a lien waiver or subordination agreement and (y) a collateral access agreement (such agreements under clauses (x) and (y), collectively, an “Access and Subordination Agreement”); (3) such Equipment is office equipment located at such Notes Party’s regional corporate headquarters or sales offices; or (4) such Inventory is located on premises owned or operated by the customer that is to purchase such Inventory.

(b) The Company shall not, nor shall it permit any Subsidiary to, remove or withdraw any funds deposited in the Specified Blocked Account, except that funds in the Specified Blocked Account may be withdrawn by the Company on or after the date on or after the date on which the Notes Parties have obtained and delivered to the Security Agent Access and Subordination Agreements with respect to Leased Premises for which the aggregate Annual Rent therefor equals or exceeds 90% of the Total Annual Rent.

Section 5.19. Disposal of Subsidiary Interests.

Except for any sale of all of its interests in the Equity Interests of any of its Subsidiaries in compliance with the provisions of Sections 5.07 and 5.08, no Notes Party shall, nor shall it permit any of its Subsidiaries to, except for pledges of Equity Interests pursuant to the Security Documents or as may be required by the ABL Credit Agreement and addressed in the ABL Intercreditor Agreement, (a) directly or indirectly sell, assign, pledge or otherwise encumber or dispose of any Equity Interests of any of its Subsidiaries, except to qualify directors if required by applicable law; or (b) permit any of its Subsidiaries directly or indirectly to sell, assign, pledge or otherwise encumber or dispose of any Equity Interests of any of its Subsidiaries, except to a Notes Party (subject to the restrictions on such disposition otherwise imposed hereunder), or to qualify directors if required by applicable law.

Section 5.20. Amendments or Waivers of Organization Documents, ABL Credit Documents or Material Contracts.

No Notes Party shall, nor shall it permit any of its Subsidiaries to, agree to any of the following:

(a) any material amendment, restatement, supplement or other modification to, or waiver of, any of its Organization Documents in a manner that would be materially adverse to the Security Agent or the Holders;

(b) any amendment, restatement, supplement or other modification to, or waiver of, any ABL Credit Document, if any such amendment, restatement, supplement, modification or waiver would (i) increase the maximum allowed amount of (A) Debt for borrowed money (which shall not include any Bank Product Obligations) constituting principal outstanding under the ABL Credit Documents (including any amounts drawn but not reimbursed under any letters of credit or similar instruments issued under the ABL Credit Documents (whether or not such unreimbursed draws are deemed to constitute loan advances)), plus (B) the aggregate face amount of any undrawn letters of credit or similar instruments issued but not reimbursed under the ABL Credit Documents to an amount in excess of the ABL Cap Amount (as defined in the ABL Intercreditor Agreement) (provided that any amount owing pursuant to the ABL Credit Documents and/or Bank Product Obligation as interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges shall, at all times for all purposes under this paragraph, be considered as such, regardless of whether such amount may, after it has become owing, be added to the principal balance of the loans or Debt for borrowed money under the ABL Credit Documents and/or charged to any loan account under the ABL Credit Documents), (ii) increase the highest “Applicable Margin” or similar component of the interest rate on the Obligations (as defined in the ABL Credit Agreement) by more than 3.00% per annum above the highest “Applicable Margin” or similar component of the interest rate provided for under the ABL Credit Documents in effect on the date hereof (excluding, without limitation, (A) fluctuations in underlying rate indices, (B) customary changes in interest rates resulting from the replacement (in

accordance with prevailing industry practices for similar credit facilities with commercial banks) of any rate index/indices based on LIBOR with an alternative rate index/indices, (C) the imposition of a default rate of up to 2.00% per annum, and (D) movement within the pricing grid set forth in the ABL Credit Agreement as in effect on the date hereof or as modified in accordance with the terms hereof), (iii) change any covenants, defaults, or events of default under the ABL Credit Agreement or any other ABL Credit Document (including the addition of covenants, defaults, or events of default not contained in the ABL Credit Agreement or other ABL Credit Documents as in effect on the date hereof) to restrict any Notes Party from making payments of the Notes Obligations that would otherwise be permitted under the ABL Credit Documents as in effect on the date hereof, or (iv) increase or add any advance rates beyond the advance rates set forth in the ABL Credit Agreement on the Issue Date to the extent that any such increase or addition, when taken together with all other such increases or additions, would result in greater than $7,500,000 in the aggregate of additional loan availability under the ABL Credit Documents (with the impact of each such increase or addition being calculated on the date thereof and then aggregated with the impact of all other such increases or additions); provided that neither the existence of any overadvance under the ABL Credit Agreement, nor the exercise by the ABL Agent (as defined in the ABL Intercreditor Agreement) of any discretionary rights with respect to any component(s) of the borrowing base to the extent contemplated by the ABL Credit Documents on the Issue Date, shall be deemed to be an increase to or addition of an advance rate;

(c) any amendment, restatement, supplement or other modification to, or waiver of, the Convertible Bond Indenture if any such amendment, restatement, supplement, modification or waiver would restrict any Notes Party from making payments of the Notes Obligations that would otherwise be permitted under the Convertible Bond Indenture as in effect on the date hereof; or

(d) any material amendment, restatement, supplement or other modification to, or waiver of, any Material Contract in a manner that would be materially adverse to the Security Agent or the Holders.

Section 5.21. Fiscal Year.

No Notes Party shall, nor shall it permit any of its Subsidiaries to change its fiscal year-end from December 31.

Section 5.22. Foreign Subsidiaries.

No Notes Party shall permit the amount of cash and Cash Equivalents (including Liquid Investments) of the Foreign Subsidiaries of the Notes Parties to exceed $20,000,000 in the aggregate for all such Foreign Subsidiaries at any time (with the amount by which such aggregate cash and Cash Equivalents exceed $20,000,000 at such time equaling the “Excess Cash Amount”), unless such Foreign Subsidiaries distribute such Excess Cash Amount to one or more Notes Parties (other than Global Holdings or any Subsidiary thereof) within three (3) Business Days of the date of determination (the “Excess Cash Distribution Deadline”); provided that, (a) in no event shall the Excess Cash Amount exceed $3,000,000 at any time and (b) to the extent that any Event of Default occurs with respect to this Section 5.22 (other than in connection with a violation of clause (a) above), the Notes Parties may cure such Event of Default by causing such Foreign Subsidiaries to distribute such Excess Cash Amount to one or more Notes Parties (other than Global Holdings or any Subsidiary thereof) within two (2) Business Days after the occurrence of such Event of Default.

Section 5.23. Negative Pledge.

No Notes Party shall, nor shall it permit any of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any Excepted Certificated Equipment and Motor Vehicle, Excepted Real Estate Asset or other owned Real Estate Asset, other than Excepted Liens and Liens pursuant to Section 5.02(a), (c) and (f) and (to the extent subject to the ABL Intercreditor Agreement and a Mortgage or other Security Document) Section 5.02(h) and (i).

ARTICLE VI.

SUCCESSORS

Section 6.01. Merger, Consolidation, or Dispositions of Property.

(a) The Company will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation) or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the Properties of the Company and its Subsidiaries taken as a whole, in one or more related transactions, to another Person unless:

(1) either:

(A) the Company is the resultant, transferee or the surviving Person; or

(B) the resultant, transferee or surviving Person formed (if other than the Company) is a corporation, limited liability company or limited partnership organized or existing under the laws of the United States, any state of the United States or the District of Columbia;

(2) such resultant, transferee or surviving Person assumes all the obligations of the Company under the Notes and this Indenture (including the obligation to pay additional amounts under Section 7.01 (“Events of Default”));

(3) immediately after such transaction no Default exists; and

(4) except in the case of a merger of the Company with or into a Guarantor, or a sale, assignment, transfer, conveyance or other disposition of Property to the Company or a Guarantor, immediately after such transaction after giving pro forma effect thereto and any related financing transactions the Asset Coverage Ratio as of such date is not less than 1.5:1.0.

(b) In addition, the Company may not, directly or indirectly, lease all or substantially all of its Property, in one or more related transactions, to any other Person.

(1) any Subsidiary of the Company may consolidate with, merge into or sell, assign, transfer or convey all or part of its Property to the Company; and

(2) the Company may merge with an Affiliate that has no significant Property or liabilities and was formed solely for the purpose of changing the jurisdiction of organization of the Company to another state of the United States so long as the amount of the Company’s Debt and the Debt of the Subsidiaries is not increased thereby.

Section 6.02. Successor Corporation Substituted.

Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the Properties of the Company or its Subsidiaries in a transaction that is subject to, and that complies with the provisions of Section 6.01 (“Merger, Consolidation, or Dispositions of Property”) hereof, the successor Person formed by such consolidation or into or with which the Company or its Subsidiaries is or are merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, transfer, lease, 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 or the applicable Subsidiaries), and may exercise every right and power of the Company or Subsidiaries under this Indenture with the same effect as if such successor Person had been named as the Company or Subsidiaries herein; provided, however, that the predecessor Company or Subsidiaries 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 or the applicable Subsidiaries’ assets in a transaction that is subject to, and that complies with the provisions of, Section 6.01 (“Merger, Consolidation, or Disposition of Property”) hereof.

ARTICLE VII.

DEFAULTS AND REMEDIES

Section 7.01. Events of Default.

The occurrence of any of the following events shall constitute an “Event of Default” under this Indenture:

(a) Payment Failure. The Company (1) fails to pay any principal when due under this Indenture or (2) fails to pay, within three (3) Business Days after the same becomes due, any other amount due under this Indenture, including payments of interest, fees, reimbursements, and indemnifications;

(b) Breach of Covenant. (1) Any breach by the Notes Parties of any of the covenants in Section 4.03 (“Corporate Existence”) (with respect to the legal existence of the Notes Parties), Section 4.04 (“Compliance Certificate”), Section 4.06 (“Insurance”), Section 4.15 (“Titled Collateral”), Section 4.19 (“Additional Material Real Estate Assets”), Section 4.24 (“Post-Issue Date Matters”) or Article V (other than Sections 5.12 (“Hazardous Materials”) or 5.13 (“Compliance with ERISA”)) of this Indenture (provided that any Event of Default caused by a breach of Section 5.22 (“Foreign Subsidiaries”) is subject to cure to the extent contemplated by Section 5.22 (“Foreign Subsidiaries”)), or (2) any breach by any Notes Party of any other covenant contained in this Indenture and such breach is not cured within thirty (30) days after the earlier of (A) the date notice thereof is given to the Company by the Trustee or the Security Agent or (B) the date any Responsible Officer of any Notes Party obtained actual knowledge thereof;

(c) Guarantee. Any material provisions in a Subsidiary Guarantee shall at any time (before its expiration according to its terms) and for any reason cease to be in full force and effect and valid and binding on the Guarantors party thereto or shall be contested by any party thereto; any Guarantor shall deny it has any liability or obligation under the Subsidiary Guarantee;

(d) Security Documents. Any Security Document shall at any time and for any reason cease to create an Acceptable Security Interest that is superior to all other Liens (other than Permitted Priority Liens) in Collateral with a fair market value in excess of $5,000,000.00 in the aggregate for all Security Documents purported to be subject to such agreement in accordance with the terms of such agreement or any material provisions of any Security Document shall cease to be in full force and effect and valid and binding on any party thereto or any such Person shall so state in writing, except to the extent resulting from the Security Agent’s failure to maintain possession of any stock certificates, promissory notes or other instruments delivered to it under the Security Documents;

(e) Cross-Default. (1) The Company or any Subsidiary shall fail to pay any principal of or premium or interest on (A) its Debt which is outstanding in a principal amount of at least $15,000,000.00 individually or when aggregated with all such Debt of the Company and the Subsidiaries so in default (but excluding Debt hereunder) or (B) its Debt under the ABL Credit Documents, in each case, when the same becomes due and payable (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), and such failure shall continue after the applicable grace period, if any, specified in the agreement or instrument relating to such Debt; (2) any other event shall occur or condition shall exist under any agreement or instrument relating to (A) Debt which is outstanding in a principal amount of at least $15,000,000.00 individually or when aggregated with all such Debt of the Company and the Subsidiaries so in default (other than Debt hereunder) or (B) Debt under the ABL Credit Documents and, in each case, shall continue after the applicable grace period, if any, specified in such agreement or instrument, if the effect of such event or condition is to accelerate, or to permit the acceleration of, the maturity of such Debt prior to the stated maturity thereof; or (3) (A) any Debt which is outstanding in a principal amount of at least $15,000,000.00 individually or when aggregated with all such Debt of the Company and the Subsidiaries so in default (but excluding Debt hereunder) or (B) any Debt under the ABL Credit Documents, in each case, shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment);

(f) Bankruptcy and Insolvency. The Company or any Significant Subsidiary (1) admits in writing its inability to pay its debts generally as they become due; makes an assignment for the benefit of its creditors; consents to or acquiesces in the appointment of a receiver, liquidator, fiscal agent, or trustee of itself or any of its Property; files a petition under bankruptcy or other laws for the relief of debtors; or consents to any reorganization, arrangement, workout, liquidation, dissolution, or similar relief or (2) shall have had, without its consent: any court enter an order appointing a receiver, liquidator, fiscal agent, or trustee of itself or any of its Property; any petition filed against it seeking reorganization, arrangement, workout, liquidation, dissolution or similar relief under bankruptcy or other laws for the relief of debtors, and such order or petition shall not be dismissed, stayed, vacated, or set aside for a period of sixty (60) consecutive days;

(g) Adverse Judgment. The Company or any Subsidiary suffers final judgments against any of them since the date of this Indenture in an aggregate amount, less any insurance proceeds covering such judgments which are received or as to which the insurance carriers admit liability, greater than $15,000,000.00 and either (1) enforcement proceedings shall have been commenced by any creditor upon such judgments or (2) there shall be any period of thirty (30) consecutive days during which a stay of enforcement of such judgments, by reason of a pending appeal, payment in accordance with the terms of such judgment, or otherwise, shall not be in effect;

(h) Termination Events. Any Termination Event with respect to a Plan shall have occurred, and, thirty (30) days after the earlier of (i) written notice by the Trustee to the Company of such Termination Event or (ii) the Company obtains knowledge or otherwise becomes aware of such Termination Event, such Termination Event shall not have been corrected and shall have created and caused to be continuing a material risk of Plan termination or liability for withdrawal from the Plan as a “substantial employer” (as defined in Section 4001(a)(2) of ERISA), which termination or liability for withdrawal could reasonably be expect to result in an actual obligation of the Company or a Subsidiary to pay an amount of money greater than $15,000,000.00;

(i) Plan Withdrawals. The Company or any member of the Controlled Group as an employer under a Multiemployer Plan shall have made a complete or partial withdrawal from such Multiemployer Plan and such withdrawal could reasonably be expect to result in an actual obligation of the Company or a Subsidiary to pay an amount of money exceeding $15,000,000.00;

(j) ABL Intercreditor Agreement. At any time prior to the Discharge of the ABL Obligations, the ABL Intercreditor Agreement or any material provision thereof shall cease to be in full force and effect and valid and binding on the ABL Administrative Agent and each of the Notes Parties that is a party thereto or any such Person shall so state in writing;

(k) Change of Control. The Company or any of its Subsidiaries shall fail to comply with the provisions of Section 3.10 (“Offer to Repurchase Upon Change of Control”) or Section 6.01 (“Merger, Consolidation, or Sale of Assets”) hereof, and such failure continues for 30 days after the date written notice of such noncompliance is given to the Company by the Trustee or Holders;

(l) Subsidiary Guarantees. Any Subsidiary Guarantee shall for any reason cease to be in full force and effect or be declared null and void in a final non-appealable judgment of a court of competent jurisdiction or any responsible officer of any Guarantor, denies in writing that it has any further liability under its Subsidiary Guarantee, or gives written notice to such effect, other than by reason of the termination of this Indenture or the release of any such Subsidiary Guarantee in accordance with this Indenture; or

(m) Collateral. With respect to any Collateral, individually or in the aggregate, having a Fair Market Value in excess of $5,000,000, any of the Security Documents ceases to be in full force and effect, or any of the Security Documents, ceases to give the holders of the Notes the Liens purported to be created thereby, or any of the Security Documents is declared null and void or any Notes Party denies in writing that it has any further liability under any Security Document or gives written notice to such effect (in each case other than in accordance with the terms of this Indenture or the terms of the ABL Intercreditor Agreement or the other Security Documents), except to the extent that any loss of perfection or priority results from the failure of the Security Agent to maintain possession of any possessory Collateral actually delivered or otherwise results from the gross negligence or willful misconduct of the Trustee or the Security Agent.

Section 7.02. Acceleration.

In the case of an Event of Default specified in clause (f) of Section 7.01 hereof, with respect to the Company, any Subsidiary of the Company that is a Significant Subsidiary or any group of 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 by notice to the Company or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes by notice to the Company and the Trustee may declare all the Notes to be due and payable immediately.

Section 7.03. 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, if any, and interest on the Notes or enforce the performance of any provision of the Notes or this Indenture.

The Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions.

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 7.04. Waiver of Past Defaults.

The Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may on behalf of all Holders of the Notes (i) waive any existing Default or Events of Default and its consequences under this Indenture except a continuing Default or Event of Default in the payment of principal of, or interest or premium, if any, on, the Notes and (ii) rescind an acceleration and its consequences, if the rescission would not violate or conflict with any judgment or decree and if all existing Events of Default have been cured or waived.

Section 7.05. Control by Majority.

Subject to certain limitations, the Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. 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 (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders) or that may involve the Trustee in personal liability.

Section 7.06. Limitation on Suits.

Subject to Section 8.01 (“Duties of Trustee”), in case an Event of Default occurs and is continuing, the Trustee will be under no obligation to exercise any of the rights or powers under this Indenture at the request or direction of any Holders of Notes unless such Holders have offered to the Trustee indemnity or security satisfactory to it against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium, if any, when due, no Holder of a Note may pursue any remedy with respect to this Indenture or the Notes unless:

(1) such Holder has previously given 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 have requested the Trustee in writing to pursue the remedy;

(3) such Holders have offered the Trustee security or indemnity satisfactory to it against any loss, liability or expense;

(4) the Trustee has not complied with such request within 60 days after the receipt of the request and the offer of security or indemnity; and

(5) Holders of a majority in aggregate principal amount of the then outstanding Notes have not given the Trustee a written direction inconsistent with such request within such 60-day period.

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

Section 7.07. 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, 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; provided that a Holder shall not have the right to institute any such suit for the enforcement of payment if and to the extent that the institution or prosecution thereof or the entry of judgment therein would, under applicable law, result in the surrender, impairment, waiver or loss of the Lien of this Indenture upon any property subject to such Lien.

Section 7.08. Collection Suit by Trustee.

If an Event of Default specified in Sections 7.01(a)(1) or (2) (“Events of Default”) hereof occurs and is continuing, the Trustee may recover judgment in its own name and, in the case of the Trustee, as Trustee of an express trust against the Company for the whole amount of principal of, premium, 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 and its agents and counsel.

Section 7.09. Trustee May File Proofs of Claim.

The Trustee shall be 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 and its agents and counsel) and the Holders 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 compensation, reasonable expenses, disbursements and advances of the Trustee, and its agents and counsel, and any other amounts due the Trustee under Section 8.07 (“Compensation and Indemnity”) 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 8.07 (“Compensation and Indemnity”) 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 7.10. Priorities.

Subject to the ABL Intercreditor Agreement, if the Trustee collects any money pursuant to this Article VII, it shall pay out the money in the following order:

First: to the Trustee, the Security Agent, the Paying Agent and the Registrar for amounts due under Section 8.07 (“Compensation and Indemnity”) 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 for amounts due and unpaid on the Notes for principal, premium, 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, 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 Interest Payment Date for any payment to Holders pursuant to this Section 7.10.

Section 7.11. 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 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, expenses and disbursements 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 7.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 7.07 (“Rights of Holders of Notes to Receive Payment”) hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

Section 7.12. Delay or Omission Not Waiver.

No delay or omission of the Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article VII or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.

ARTICLE VIII.

TRUSTEE

Section 8.01. Duties of Trustee.

(a) The Trustee, prior to the occurrence of an Event of Default with respect to the Notes and after the curing or waiving of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. 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 (it being agreed that the permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty); and

(2) 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. The Trustee shall be under no duty to make any investigation as to any statement contained in any such instance, but may accept the same as conclusive evidence of the truth and accuracy of such statement or the correctness of such opinions. However, in the case of certificates or opinions required by any provision hereof to be provided to it, the Trustee shall examine the form of 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 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 8.01;

(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 7.05 (“Control by Majority”) 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 8.01.

(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.

(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.

(g) The Trustee shall not be deemed to have knowledge of any Default or Event of Default unless the Trustee shall have received written notice of a Default or an Event of Default in accordance with the provisions of this Indenture.

(h) The Trustee shall neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument, or document other than this Indenture, whether or not an original or a copy of such agreement has been provided to the Trustee.

(i) The Trustee shall have no duty to know or inquire as to the performance or nonperformance of any provision of any other agreement, instrument, or document other than this Indenture.

Section 8.02. Rights of Trustee.

(a) The Trustee may conclusively rely upon and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper person or persons, not only as to due execution, validity and effectiveness, but also as to the truth and accuracy of any information contained therein. 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 Officers’ 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 Officers’ Certificate or Opinion of Counsel and will not be responsible to anyone for any loss occasioned by so acting or refraining from acting. The Trustee may consult with counsel and the 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 indemnity or security satisfactory to it against the losses, liabilities and expenses that might be incurred by it in compliance with such request or direction.

(g) The Trustee shall have no duty to inquire as to the performance of the Company with respect to the covenants contained in Articles IV and V.

(h) Delivery of reports, information and documents to the Trustee under Section 4.05 (“Reporting”) is for informational purposes only and the Trustee’s receipt of the foregoing shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

(i) The rights, powers, privileges, protections, immunities and benefits given to the Trustee, including its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each Agent, custodian and other Person employed to act hereunder, including the Security Agent.

(j) The Trustee shall not be responsible or liable for any action taken or omitted by it in good faith at the direction of the Holders of not less than a majority in principal amount of the Notes as to the time, method and place of conducting any proceedings for any remedy available to the Trustee or the exercising of any power conferred by this Indenture.

(k) Any action taken, or omitted to be taken, by the Trustee in good faith pursuant to this Indenture upon the request or authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the Holder of any Note shall be conclusive and binding upon future holdings of Notes and upon Notes executed and delivered in exchange therefor or in place thereof.

(l) The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any Person authorized to sign an Officers’ Certificate, including any Person specified as so authorized in any such certificate previously delivered and not superseded.

(m) The Trustee shall not be responsible or liable for punitive, special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of actions.

(n) The Trustee shall not be required to give any bond or surety in respect of the execution of the trusts and powers under this Indenture.

(o) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under the Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including, without limitation, acts of God: earthquakes; fire; flood; terrorism; wars and other military disturbances; sabotage; epidemics; pandemics; riots; interruptions; loss or malfunction of utilities; computer (hardware or software) or communication services; accidents; labor disputes; acts of civil or military authorities and governmental action; or the unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility.

Section 8.03. 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 or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Section 8.10 (“Eligibility; Disqualification”) hereof.

Section 8.04. 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. The Trustee shall not be charged with knowledge of any Default or Event of Default under Sections 7.01(b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (l) or (m) or of the identity of any Significant Subsidiary, unless either (a) a Responsible Officer of the Trustee shall have actual knowledge thereof or (b) the Trustee shall have received written notice thereof in accordance with Section 14.02 hereof from the Company, any Guarantor or any Holder. In accepting the trust hereby created, the Trustee acts solely as Trustee under this Indenture and not in its individual capacity and all persons, including without limitation the Holders of Notes and the Company having any claim against the Trustee arising from this Indenture shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein.

Section 8.05. 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 a notice of the Default or Event of Default within 90 days after the Trustee gains knowledge of such continuing Default or Event of Default unless such Default or Event of Default shall have been cured or waived before the giving of such notice. The Trustee may withhold from Holders notice of any continuing Default or Event of Default if it determines that withholding notice is in their interest, except in the case of a Default or Event of Default relating to the payment of principal of, or interest or premium, if any, on, the Notes.

Section 8.06. [Reserved].

Section 8.07. Compensation and Indemnity.

(a) The Company will pay to the Trustee (in its capacity as Trustee and, to the extent it has been appointed as such, Paying Agent and Registrar) (each, an “Indemnified Party”) 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 each Indemnified Party 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 Indemnified Party’s agents and counsel.

(b) The Company will indemnify the Indemnified Party and its directors, officers, employees and agents against any and all claims, losses, liabilities, damages or expenses (including, but not limited to, the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel) 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 8.07) 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 willful misconduct, as finally determined by a court of competent jurisdiction. The Indemnified Party will notify the Company promptly of any claim for which it may seek indemnity. Failure by the Indemnified Party to so notify the Company will not relieve the Company of its obligations hereunder. The Company will defend the claim and the Indemnified Party will cooperate in the defense. Each Indemnified Party may have separate counsel but the Company will pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent will not be unreasonably withheld.

(c) The obligations of the Company under this Section 8.07 will survive the satisfaction and discharge of this Indenture, repayment of the Notes and the resignation or removal of an Indemnified Party.

(d) To secure the Company’s payment obligations in this Section 8.07, each Indemnified Party will have a Lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except that held in trust to pay principal, premium, if any, and interest on particular Notes pursuant to Article VIII hereof. Such Lien will survive the satisfaction and discharge of this Indenture.

(e) When an Indemnified Party incurs expenses or renders services after an Event of Default specified in Section 7.01(f) (“Events of Default”) 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.

Section 8.08. 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 8.08.

(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 8.10 (“Eligibility; Disqualification”) hereof;

(2) the Trustee is adjudged bankrupt or 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.

(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 three months, fails to comply with Section 8.10 (“Eligibility; Disqualification”) 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 retiring Trustee hereunder have been paid and subject to the Lien provided for in Section 8.07 (“Compensation and Indemnity”) hereof. Notwithstanding replacement of the Trustee pursuant to this Section 8.08, the Company’s obligations under Section 8.07 (“Compensation and Indemnity”) hereof will continue for the benefit of the retiring Trustee.

Section 8.09. 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.

In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

Section 8.10. 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.

Section 8.11. Limitation on Duty of Trustee in Respect of Collateral: Indemnification.

(a) Beyond the exercise of reasonable care in the custody thereof, the Trustee shall have no duty as to any Collateral in its possession or control or in the possession or control of any Agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and the Trustee shall not be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral. The Trustee shall be deemed to have exercised reasonable care in the custody of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which it accords its own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee in good faith.

(b) The Trustee shall not be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral. Subject to Section 8.01 of this Indenture, the Trustee shall have no duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the ABL Intercreditor Agreement or any Security Document by the Company, the Guarantors or the Security Agent. The Trustee may act and rely and shall be protected in acting and relying in good faith on the opinion or advice of or information obtained from any counsel, accountant, appraiser or other expert or adviser, whether retained or employed by the Company or by the Trustee, in relation to any matter arising in the administration of this Indenture or the Security Documents. In no event shall the Trustee be liable for any amount in excess of the value of the Collateral.

ARTICLE IX.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 9.01. Option to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at its option and at any time, elect to have either Section 9.02 (“Legal Defeasance and Discharge”) or Section 9.03 (“Covenant Defeasance”) hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article IX.

Section 9.02. Legal Defeasance and Discharge.

Upon the Company’s exercise under Section 9.01 (“Option to Effect Legal Defeasance or Covenant Defeasance”) hereof of the option applicable to this Section 9.02, each Notes Party will, subject to the satisfaction of the conditions set forth in Section 9.04 (“Conditions to Legal or Covenant Defeasance”) hereof, be deemed to have been discharged from their Notes Obligations (including the Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Notes Parties will be deemed to have paid and discharged the entire Debt represented by the outstanding Notes (including the Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 9.05 (“Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions”) hereof and the other Sections of this Indenture referred to in clauses (1) and (2) below, and to have satisfied all their other Notes Obligations (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, if any, on, such Notes when such payments are due from the trust referred to in Section 9.05 (“Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions”) hereof;

(2) the Company’s obligations with respect to the Notes under Article II and Section 4.02 (“Maintenance of Office or Agency”) concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s and the Guarantors’ obligations in connection therewith; and

(4) the Legal Defeasance provisions of this Indenture.

Subject to compliance with this Article IX, the Company may exercise its option under this Section 9.02 notwithstanding the prior exercise of its option under Section 9.03 (“Covenant Defeasance”) hereof.

Section 9.03. Covenant Defeasance.

Upon the Company’s exercise under Section 9.01 (“Option to Effect Legal Defeasance or Covenant Defeasance”) hereof of the option applicable to this Section 9.03, each Notes Party will, subject to the satisfaction of the conditions set forth in Section 9.04 (“Conditions to Legal or Covenant Defeasance”) hereof, be released from each of their Notes Obligations under the covenants contained in Section 5.09 (“Restricted Payments”), Section 5.10 (“Affiliate Transactions”), Section 5.11 (“Line of Business”), Section 5.14 (“Sale and Leaseback Transactions”) and clause (4) of Section 6.01(a) (“Merger, Consolidation, or Dispositions of Property”) hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 9.04 (“Conditions to Legal or Covenant Defeasance”) 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. For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Guarantees, the Notes Parties 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 7.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Guarantees will be unaffected thereby.

Section 9.04. Conditions to Legal or Covenant Defeasance.

In order to exercise either Legal Defeasance or Covenant Defeasance under either Section 9.02 (“Legal Defeasance and Discharge”) or 9.03 (“Covenant Defeasance”) 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 Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in amounts as will be sufficient, in the opinion of an independent registered public accounting firm, independent investment banking firm of nationally-recognized standing or other comparable financial professional, to pay the principal of, or interest and premium, if any, on the outstanding Notes on the final Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company has delivered to the Trustee an Opinion of Counsel stating that:

(A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

(B) since the Issue Date, 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 will confirm that, the beneficial owners 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 9.03 (“Covenant Defeasance”) hereof, the Company has delivered to the Trustee an Opinion of Counsel stating that the beneficial owners 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 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 or the granting of Liens to secure such borrowings or any portion thereof) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the day of deposit;

(5) such Legal Defeasance or Covenant Defeasance will not result in a breach 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, or if such breach or default would occur, which is not waived as of, and for all purposes, on an after the date of such defeasance;

(6) the Company must have delivered to the Trustee an Opinion of Counsel to the effect that after the 91st day following a deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization, or similar laws affecting creditors’ rights generally;

(7) the Company must have delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Notes over the other creditors of the Company and the Guarantors with the intent of defeating, hindering, delaying or defrauding creditors of the Company, any Guarantor or others; and

(8) the Company must have delivered to the Trustee an Officers’ 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 9.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 9.06 (“Repayment to Company”) hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 9.05, the “Trustee”) pursuant to Section 9.04 (“Conditions to Legal or Covenant Defeasance”) 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, 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 Government Securities deposited pursuant to Section 9.04 (“Conditions to Legal or Covenant Defeasance”) 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 IX to the contrary, the Trustee will deliver or pay to the Company from time to time upon the written request of the Company any money or non-callable Government Securities held by it as provided in Section 9.04 (“Conditions to Legal or Covenant Defeasance”) 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 9.04(1) (“Conditions to Legal or Covenant Defeasance”) 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 9.06. Repayment to Company.

Subject to any applicable abandoned property law, 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, if any, or interest on, any Note and remaining unclaimed for two years after such principal, premium, 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 or The Wall Street Journal, notice that such money remains unclaimed and that, after a date specified therein, which will not be less than thirty (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 9.07. Reinstatement.

If the Trustee or the Paying Agent is unable to apply any U.S. dollars or non-callable Government Securities in accordance with Sections 9.02 (“Legal Defeasance and Discharge”) or Section 9.03 (“Covenant Defeasance”) 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’ Notes Obligations will be revived and reinstated as though no deposit had occurred pursuant to Section 9.02 (“Legal Defeasance and Discharge”) or 9.03 (“Covenant Defeasance”) hereof until such time as the Trustee or the Paying Agent is permitted to apply all such money in accordance with Section 9.02 (“Legal Defeasance and Discharge”) or 9.03 (“Covenant Defeasance”) hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, premium, 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 X.

AMENDMENT, SUPPLEMENT AND WAIVER

Section 10.01. Without Consent of Holders of Notes.

Notwithstanding Section 10.02 (“With Consent of Holders of Notes”) of this Indenture, the Company, the Guarantors, the Trustee and the Security Agent may amend or supplement this Indenture, the Notes, the Subsidiary Guarantees, the ABL Intercreditor Agreement or the Security Documents without the consent of any Holder of Notes:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of Certificated Notes and to issue PIK Notes;

(3) to provide for the assumption of the Company’s or any Guarantor’s obligations to Holders in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s Property in accordance with the terms of this Indenture;

(4) to make any change that would provide any additional rights or benefits to the Holders or that does not adversely affect the legal rights under this Indenture of any such Holder;

(5) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA (to the extent this Indenture is or becomes so qualified);

(6) to add any Subsidiary as an additional Guarantor as provided in this Indenture or to evidence the succession of another Person to the Company, any Guarantor or any other obligor until the Notes pursuant to this Indenture, and the assumption by any such successor of the covenants and agreements of the Company, such Guarantor or such obligor contained in this Indenture, the Notes and in any Subsidiary Guarantee of such Guarantor, including the addition of any required co-issuer of the Notes;

(7) to release a Guarantor from its obligations under this Indenture and its Subsidiary Guarantee pursuant to this Indenture;

(8) to provide for the acceptance of appointment of a successor Trustee as provided in this Indenture;

(9) to add to the covenants of the Company, any Guarantor or any other obligor under the Notes for the benefit of the Holders of the Notes or to surrender any right or power conferred upon the Company or any Guarantor or any other obligor under the Notes, as applicable, in this Indenture, in the Notes or in any Subsidiary Guarantee;

(10) to comply with the rules of any applicable securities depositary;

(11) to mortgage, pledge, hypothecate or grant any other Lien for the benefit of the Holders, as additional security for the payment and performance of all or any portion of the Notes Obligations, in any Property or assets, including any which are required to be mortgaged, pledged or hypothecated, or in which a Lien is required to be granted pursuant to this Indenture, any of the Security Documents or otherwise;

(12) to release Collateral from the Lien for the benefit of Holders when permitted or required by this Indenture and the Security Documents; and

(13) to make any amendments to reflect, if applicable, any Alternative Rate and related Adjustments, together with any other related changes as are necessary pursuant to Section 4.23(c).

Upon the written 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 8.02(b) (“Rights of Trustee”) hereof, the Trustee will join with the Company and, other than with respect to any supplemental indenture entered into pursuant to Section 4.21 (“Additional Subsidiary Guarantees”), 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, privileges, protections, indemnities or immunities under this Indenture or otherwise.

Section 10.02. With Consent of Holders of Notes.

Except as provided in Section 10.01 and below in this Section 10.02, this Indenture, the Notes, the Subsidiary Guarantees, the ABL Intercreditor Agreement or the Security Documents may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing Default or Event of Default or compliance with any provision of this Indenture, the Notes, the Subsidiary Guarantees, the ABL Intercreditor Agreement or the Security Documents may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes). Sections 2.08 (“Outstanding Notes”) and 2.09 (“Treasury Notes”) hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 10.02.

Subject to the following paragraph, without the consent of each Holder affected, an amendment, supplement or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the percentage in principal amount of such outstanding Notes whose Holders must consent to an amendment, supplement or waiver;

(2) reduce the principal of or change the fixed maturity of any Note or alter any of the provisions with respect to the redemption of the Notes (other than the provisions described above under Section 3.07 (“Optional Redemption”));

(3) reduce the rate of or change the time for payment of interest on any Note;

(4) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, 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 currency 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, if any, on, the Notes;

(7) waive a redemption payment with respect to any Note (other than a payment required by Section 3.07 (“Optional Redemption”));

(8) make any change in the ranking or priority of any Note that would adversely affect the Holder of such Note;

(9) release any Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture;

(10) modify any Security Document or the provisions of this Indenture dealing with the Security Documents or application of trust moneys under the Security Documents, or otherwise release any Collateral, in any manner materially adverse to the Holders other than in accordance with this Indenture, the Security Documents and the ABL Intercreditor Agreement;

(11) modify the ABL Intercreditor Agreement in any manner materially adverse to the Holders other than in accordance with this Indenture and the ABL Intercreditor Agreement; or

(12) make any change to the preceding amendment and waiver provisions.

Notwithstanding the foregoing, this Indenture and the Notes may be amended by Holders of at least a majority in aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) to (1) modify the definition of “Capitalized Amount” to mean, for each PIK Interest Payment Date, an amount per Note equal to 100% of the interest accrued on the Capitalized Principal Amount as of the immediately preceding PIK Interest Payment Date (or, if there is no immediately preceding PIK Interest Payment Date, the interest accrued on the Initial Principal Amount), calculated at the rate specified in the form of Note for the period from, and including, such immediately preceding Interest Payment Date (or, if there is no immediately preceding Interest Payment Date, from, and including, the Issue Date) to, but excluding, such Interest Payment Date; and (2) make any amendments or modifications required to give effect to the foregoing, including but not limited to amendments or modifications to Section 2.12(a).

The consent of the Holders is not necessary under this Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment.

Section 10.03. [Reserved].

Section 10.04. 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.

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the provisions of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment or waiver or to revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.

Section 10.05. 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.

Section 10.06. Trustee to Sign Amendments, etc.

The Trustee will sign any amended or supplemental Indenture authorized pursuant to this Article X if the amendment or supplement does not adversely affect the rights, duties, privileges, protections, liabilities, indemnities 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 8.01 (“Duties of Trustee”) hereof) will be fully protected in relying upon, in addition to the documents required by Section 14.04 (“Certificate and Opinion as to Conditions Precedent”) hereof, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental Indenture is authorized or permitted by this Indenture.

ARTICLE XI.

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 thereunder, when:

(1) either:

(A) all such Notes theretofore authenticated and delivered, except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has been deposited in trust and thereafter repaid to the Company or discharged from such trust as provided in this Indenture, 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 or will become due and payable within one year by reason of the mailing of a notice of redemption or otherwise 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 Government Securities, or a combination of cash in U.S. dollars and non-callable Government Securities, in such amounts as will be sufficient, without consideration of any reinvestment of interest, to pay and discharge the entire Debt on such Notes not theretofore delivered to the Trustee for cancellation for principal, premium, 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 the deposit or will occur immediately after giving effect to the deposit and the deposit will not result in a breach of, or constitute a default under, any other material instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(3) the Company or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and

(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 Officers’ 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 (1)(B) of this Section 11.01, the provisions of Section 11.02 (“Application of Trust Money”) and 9.06 (“Repayment to Company”) hereof will survive. In addition, nothing in this Section 11.01 will be deemed to discharge those provisions of Section 8.07 (“Compensation and Indemnity”) 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 9.05 (“Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions”) hereof, all money deposited with the Trustee pursuant to Section 11.01 (“Satisfaction and Discharge”) 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, 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 Government Securities in accordance with Section 11.01 (“Satisfaction and Discharge”) 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 (“Satisfaction and Discharge”) hereof; provided that if the Company has made any payment of principal of, premium, 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 Government Securities held by the Trustee or Paying Agent.

ARTICLE XII.

GUARANTEES

Section 12.01. Guarantee.

(a) Subject to this Article XII, 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 Notes Obligations of the Company hereunder or thereunder, that:

(1) the principal of, premium, 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 Notes Obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full, 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, in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise.

Failing payment by the Company when due of any amount 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 Notes 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 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 (other than payment in full of all of the obligations of the Company hereunder and under the Notes). 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 Subsidiary Guarantee will not be discharged except by complete payment of the Notes Obligations contained in the Notes and this Indenture. Each Guarantor also agrees to pay any and all costs and expenses (including reasonable attorney’s fees, expenses and disbursements) incurred by the Trustee or any Holder in enforcing any rights under this Section 12.01.

(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 Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

(d) Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any Notes Obligations guaranteed hereby until payment in full of all Notes 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 Notes Obligations guaranteed hereby may be accelerated as provided in Section 7.02 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Notes Obligations guaranteed hereby, and (2) in the event of any declaration of acceleration of such Notes Obligations as provided in Section 7.02 hereof, such Notes Obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Subsidiary 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 Subsidiary Guarantee.

(e) Each Subsidiary Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s Properties, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes or Subsidiary Guarantees, whether as a “voidable preference,” “fraudulent transfer” or otherwise, all as though such payment or performance had not been made. In the event that any payment or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

(f) In case any provision of any Subsidiary Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(g) Each payment to be made by a Guarantor in respect of its Subsidiary Guarantee shall be made without set-off, counterclaim, reduction or diminution of any kind or nature.

Section 12.02. 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 Subsidiary 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 Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the Notes 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 each 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 XII, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance.

Section 12.03. Execution and Delivery of Subsidiary Guarantee.

To evidence its Subsidiary Guarantee set forth in Section 12.01 hereof, on the Issue Date each initial Guarantor hereby shall be required to have a notation of such Subsidiary Guarantee substantially in the form attached as Exhibit D hereto endorsed by an Officer of such Guarantor (by manual or facsimile signature) 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 Subsidiary Guarantee set forth in Section 12.01 hereof will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantee.

If an Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.

Subsequent to the date of this Indenture, in the event a Subsidiary is required by Section 4.09 (“New Subsidiaries”) or Section 4.21 (“Additional Subsidiary Guarantees”) to guarantee the Company’s obligations under the Notes and this Indenture, the Company will cause such Subsidiary to comply with the provisions of Section 4.09 (“New Subsidiaries”) and Section 4.21 (“Additional Subsidiary Guarantees”) hereof, as applicable, and this Article XII, to the extent applicable.

Section 12.04. Release.

Subject to the ABL Intercreditor Agreement, the Subsidiary Guarantee of a Guarantor will be released upon:

(i) any sale, transfer or other disposition (including by way of merger, consolidation or amalgamation or similar transactions) of all of the Equity Interests of such Guarantor to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary of the Company, if the sale, transfer or other disposition is made in a manner not in violation of this Indenture;

(ii) pursuant to an amendment or waiver in accordance with Article X; or

(iii) satisfaction in full by the Company or any other Guarantor of any and all Notes Obligations.

ARTICLE XIII.

COLLATERAL

Section 13.01. Security Documents.

The payment of the principal of and interest and premium, if any, on the Notes when due, whether on an Interest Payment Date, at maturity, by acceleration, repurchase, redemption or otherwise and whether by the Company pursuant to the Notes or by any Guarantor pursuant to its Subsidiary Guarantee, the payment of all other obligations under the Notes, this Indenture and the Security Documents and the performance of all other obligations of the Company and the Guarantors under this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents

shall be secured as provided in the Security Documents, which the Company and the applicable Guarantors entered into on the Issue Date, and will be secured by the Collateral as set forth in the Security Documents hereafter delivered as required or permitted by this Indenture. The Company shall, and shall cause each Guarantor to, and each Guarantor shall, make all filings and take all other actions as are required by the Security Documents to maintain (at the sole cost and expense of the Company and the Guarantors) the security interest created by the Security Documents in the Collateral (other than with respect to any Collateral the security interest in which is not required to be perfected under the Security Documents) as a perfected security interest, subject only to Liens permitted by this Indenture, to the extent required by the Security Documents.

Section 13.02. Security Agent.

(a) The Security Agent shall have all the rights, benefits, privileges, powers, protections, indemnities and immunities provided in the Security Documents and shall have all of the rights, benefits, privileges, powers, protections, indemnities and immunities provided to the Trustee under this Indenture, including under Article VIII hereof.

(b) None of the Security Agent, the Trustee, the Paying Agent, the Registrar or any of their respective officers, directors, employees, attorneys or agents will be responsible or liable for the existence, genuineness, value or protection of any Collateral, for the legality, enforceability, effectiveness or sufficiency of the Security Documents, for the creation, perfection, priority, sufficiency or protection of any Liens securing the Notes Obligations, or any defect or deficiency as to any such matters, nor shall the Trustee or the Security Agent be responsible for filing financing statements.

(c) Subject to the Security Documents, the Trustee shall direct the Security Agent from time to time. Subject to the Security Documents, except as directed by the Trustee as required or permitted by this Indenture and any other representatives, the Holders acknowledge that the Security Agent will not be obligated:

(i) to act upon directions purported to be delivered to it by any other Person;

(ii) to foreclose upon or otherwise enforce any Liens securing the Notes Obligations; or

(iii) to take any other action whatsoever with regard to any or all of the Liens securing the Notes Obligations, Security Documents or Collateral.

(d) If the Company (i) incurs any ABL Obligations at any time when the ABL Intercreditor Agreement is not in effect or at any time when Debt constituting ABL Obligations entitled to the benefit of the ABL Intercreditor Agreement is concurrently retired, and (ii) at any time when the Trustee is not the Security Agent, directs the Trustee to deliver to the Security Agent an Officers’ Certificate so stating and requesting, or at any other time directs, that the Security Agent enter into an intercreditor agreement (on substantially the same terms as the ABL Intercreditor Agreement in effect on the Issue Date) with a designated agent or representative for the holders of the ABL Obligations so incurred, the Holders acknowledge that the Security Agent is hereby authorized and directed to enter into such intercreditor agreement, bind the Holders on the terms set forth therein and perform and observe its obligations thereunder.

(e) The Security Agent will be accountable only for amounts that it actually receives as a result of the enforcement of Liens securing the Notes Obligations or the Security Documents.

(f) The Holders of Notes agree that the Security Agent shall be entitled to the rights, powers, privileges, protections, immunities, indemnities and benefits provided to the Security Agent by this Indenture and the Security Documents. Furthermore, each Holder of a Note, by accepting such Note, consents to the terms of and authorizes and directs each of the Trustee (in each of its capacities) and the Security Agent to enter into and perform each of the ABL Intercreditor Agreement and Security Documents in each of its capacities thereunder.

(g) At all times when the Trustee is not itself the Security Agent, the Company will deliver to the Trustee copies of all Security Documents delivered to the Security Agent and copies of all documents delivered to the Security Agent pursuant to this Indenture and the Security Documents.

Section 13.03. Authorization of Actions to Be Taken.

(a) Each Holder, by its acceptance thereof, appoints the Security Agent as its collateral agent under the Security Documents, consents and agrees to the terms of each Security Document, as originally in effect and as amended, supplemented or replaced from time to time in accordance with its terms or the terms of this Indenture, authorizes and directs the Security Agent to enter into the Security Documents to which it is a party, appoints the Security Agent as its collateral agent and authorizes and empowers the Trustee and the Security Agent to bind the Holders and other holders of Notes Obligations as set forth in the Security Documents to which they are a party, including, without limitation, the ABL Intercreditor Agreement, and in each case to perform its obligations and exercise its rights and powers thereunder.

(b) The Trustee is authorized and empowered to receive for the benefit of the Holders any funds collected or distributed to the Trustee under the Security Documents to which the Trustee is a party and, subject to the terms of the Security Documents, to make further distributions of such funds to the Holders of Notes according to the provisions of this Indenture.

(c) Subject to the provisions of the Security Documents and Section 10.01 hereof, the Trustee may, but shall not be obligated to, in its sole discretion and without the consent of the Holders, direct, on behalf of the Holders, the Security Agent to take all actions it deems necessary or appropriate in order to:

(i) foreclose upon or otherwise enforce any or all of the Liens securing the Notes Obligations;

(ii) enforce any of the terms of the Security Documents to which the Security Agent or Trustee is a party; or

(iii) collect and receive payment of any and all Notes Obligations.

Subject to the ABL Intercreditor Agreement and at the Company’s sole cost and expense, the Trustee is authorized and empowered to institute and maintain, or direct the Security Agent to institute and maintain, such suits and proceedings as it may deem reasonably expedient to protect or enforce the Liens securing the Notes Obligations or the Security Documents to which the Security Agent or Trustee is a party or to prevent any impairment of Collateral by any acts that

may be unlawful or in violation of the Security Documents or this Indenture, and such suits and proceedings as the Trustee may deem reasonably expedient, at the Company’s sole cost and expense, to preserve or protect its interests and the interests of the Holders in the Collateral, including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of Holders, the Security Agent or the Trustee.

Section 13.04. Release of Collateral.

(a) Collateral may be released from the Lien and security interest created by the Security Documents to secure the Notes Obligations at any time or from time to time in accordance with the provisions of the Security Documents and the ABL Intercreditor Agreement or as provided hereby.

(b) For the avoidance of doubt, the Lien on the Collateral created by the Security Documents securing the Notes Obligations shall automatically be released and discharged under the circumstances set forth in, and subject to, the ABL Intercreditor Agreement.

(c) Subject to the ABL Intercreditor Agreement, the Liens on the Collateral securing the Notes and the Subsidiary Guarantees also shall be released automatically:

(iv) upon the consummation by the Company or any Guarantor of a Disposition (other than any Disposition to the Company or another Guarantor) of such Property or assets to the extent not prohibited under this Indenture;

(v) in respect of the assets of a Guarantor that constitute Collateral, upon release or discharge of such Guarantor from its Subsidiary Guarantee in accordance with this Indenture;

(vi) upon payment in full of the principal of, together with accrued and unpaid interest on, and premium, if any, on, the Notes, and all other Notes Obligations that are due and payable at or prior to the time such principal, together with accrued and unpaid interest, is paid;

(vii) pursuant to an amendment or waiver in accordance with Article X; or

(viii) upon a legal defeasance or covenant defeasance under Article IX hereof or a discharge under Article XI hereof.

In connection with any release of Collateral pursuant to this Section 13.04, the Security Agent shall not be required to execute, deliver or acknowledge any instruments of termination, satisfaction or release unless, in each case, an Officers’ Certificate and Opinion of Counsel certifying that all conditions precedent, including, without limitation, this Section 13.04, have been met and stating under which of the circumstances set forth in Section 13.04 above the Collateral is being released, have been delivered to the Security Agent on or prior to the date of such release or the date on which the Security Agent executes any such instrument. The execution, delivery or acknowledgement of any such instrument shall be at the sole cost and expense of the Company.

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Section 13.05. Powers Exercisable by Receiver or Trustee.

In case the Collateral shall be in the possession of a receiver or trustee, lawfully appointed, the powers conferred in this Article XIII upon the Company or a Guarantor with respect to the release, sale or other disposition of such property may be exercised by such receiver or trustee, and an instrument signed by such receiver or trustee shall be deemed the equivalent of any similar instrument of the Company or a Guarantor or of any officer or officers thereof required by the provisions of this Article XIII; and if the Trustee or the Security Agent shall be in the possession of the Collateral under any provision of this Indenture, then such powers may be exercised by the Trustee or the Security Agent, as the case may be.

Section 13.06. Release upon Termination of the Notes Obligations.

In the event that the Company delivers to the Trustee an Officers’ Certificate and Opinion of Counsel certifying that all the Notes Obligations have been satisfied and discharged by the payment in full of the Company’s obligations under the Notes, this Indenture and the Security Documents, and all such Notes Obligations have been so satisfied, the Trustee shall, upon the request of the Company, deliver to the Company and the Security Agent a notice provided to it stating that the Trustee, on behalf of the Holders, disclaims and gives up any and all rights it has in or to the Collateral, and any rights it has under the Security Documents, and upon receipt by the Security Agent of such notice, the Security Agent shall be deemed not to hold a Lien in the Collateral on behalf of the Trustee, and the Trustee shall (and direct the Security Agent to) do or cause to be done, at the Company’s sole cost and expense, all acts reasonably necessary to release such Lien as soon as is reasonably practicable.

ARTICLE XIV.

MISCELLANEOUS

Section 14.01. [Reserved].

Section 14.02. Notices.

Any notice or communication by the Notes Parties, on the one hand, or the Trustee, on the other hand, to the other is duly given if in writing and delivered in Person or by first class mail (registered or certified, return receipt requested), facsimile transmission or overnight air courier guaranteeing next day delivery, to the others’ address:

If to the Notes Parties:

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

Facsimile: (210) 678-4804

with copies to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, NY 10019-6064

Attention: David Huntington

Facsimile: (212) 757-3990

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If to the Trustee:

Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

Facsimile: (612) 217-5651

If to the Security Agent:

Wilmington Trust, National Association

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

Facsimile: (612) 217-5651

The Company, any Guarantor, the Trustee, or the Security Agent, 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: (i) at the time delivered by hand, if personally delivered; (ii) five Business Days after being deposited in the mail, postage prepaid, if mailed; (iii) when receipt acknowledged, if transmitted by facsimile; and (iv) 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. 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.

Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any notice of redemption) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary for such Note (or its designee), pursuant to the customary procedures of such Depositary.

A copy of this Indenture may be requested in writing by a Holder for no charge.

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Section 14.03. [Reserved.]

Section 14.04. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company and/or any Guarantor to the Trustee to take any action or to refrain from taking any action under this Indenture, the Company and/or such Guarantor shall furnish to the Trustee:

(1) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee (which must include the statements set forth in Section 14.05 (“Statements Required in Certificate or Opinion”) 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 14.05 (“Statements Required in Certificate or Opinion”) hereof) stating that, in the opinion of such counsel (who may rely on such Officers’ Certificate as to matters of fact), all such conditions precedent and covenants have been satisfied.

Section 14.05. Statements Required in Certificate or Opinion.

Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture 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 14.06. 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 14.07. No Personal Liability of Directors, Officers, Employees and Stockholders.

No director, officer, employee, manager, incorporator, member, partner or stockholder or other owner of Equity Interests of the Company or any of its Subsidiaries, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, this Indenture, the Subsidiary Guarantees, or for any claim based on, in respect of, or by reason of, such obligations or

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their creation. Each Holder of a Note 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, and it is the view of the SEC that such waiver is against public policy.

Section 14.08. Governing Law; Consent to Jurisdiction: Waiver of Jury Trial.

(a) THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.

(b) The parties irrevocably submit to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, City of New York, over any suit, action or proceeding arising out of or relating to this Indenture. To the fullest extent permitted by applicable law, each party irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(c) EACH OF THE COMPANY, THE GUARANTORS AND THE TRUSTEE HEREBY (AND EACH HOLDER OF A NOTE BY ITS ACCEPTANCE THEREOF) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 14.09. 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 14.10. 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.

Section 14.11. 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 14.12. 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.

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Section 14.13. 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.

Section 14.14. Benefit of Indenture.

Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, any Paying Agent, any Registrar and its successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 14.15. Legal Holidays.

If a regular record date is not a Business Day, the record date shall not be affected. If performance of any covenant, duty or obligation (other than payments on the Notes to be made pursuant to Section 4.01 which shall be made in accordance with Section 4.01(c)) is required on a date which is not a Business Day, performance shall not be required until the next succeeding day that is a Business Day.

Section 14.16. Calculations.

The Company or the Calculation Agent, as applicable, will be responsible for making all calculations called for under this Indenture or the Notes. The Company or the Calculation Agent, as applicable, will make all such calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders. The Company or the Calculation Agent, as applicable, will provide a schedule of its calculations to the Trustee and the Trustee is entitled to rely conclusively upon the accuracy of such calculations without independent verification.

Section 14.17. PATRIOT Act.

The parties hereto acknowledge that in accordance with Section 326 of the USA Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the USA Patriot Act.

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IN WITNESS WHEREOF, the parties have executed this Indenture as of the date first written above.


PIONEER ENERGY SERVICES CORP., a Texas corporation

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER DRILLING SERVICES, LTD., a Texas corporation

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER GLOBAL HOLDINGS, INC., a Delaware corporation

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER PRODUCTION SERVICES, INC., a Delaware corporation

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER SERVICES HOLDINGS, LLC as Guarantor

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER WIRELINE SERVICES HOLDINGS, INC., as Guarantor

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER WIRELINE SERVICES, LLC, as Guarantor

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER WELLS SERVICES, LLC, as Guarantor

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER FISHING & RENTAL SERVICES, LLC, as Guarantor

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER COILED TUBING SERVICES, LLC, as Guarantor

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee

By:		/s/ Jane Schweiger
		Name: Jane Schweiger
		Title: Vice President


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Security Agent

By:		/s/ Jane Schweiger
		Name: Jane Schweiger
		Title: Vice President

EXHIBIT A

[Face of Note]

[Insert the Global Note Legend, if applicable, pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable, pursuant to the provisions of the Indenture]

[Insert OID Legend, if applicable, pursuant to the provisions of the Indenture]

CUSIP: [723664 AG3]¹ [723664 AH1]²

Senior Secured Floating Rate Notes due 2025


No.____		$	___________

PIONEER ENERGY SERVICES CORP., a Delaware corporation, for value received, promises to pay to ____________ or its registered assigns, the principal sum of _____________________________ DOLLARS, subject to any adjustments listed on the Schedule of Exchanges of Interests in the Global Note attached hereto, on May 15, 2025.

Interest Payment Dates: February 15, May 15, August 15 and November 15

Record Dates: February 1, May 1, August 1 and November 1

Date of Issuance: May 29, 2020

¹	Insert for 144A Note.

²	Insert for AI Note.

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


PIONEER ENERGY SERVICES CORP.

By:
		Name:
		Title:


This is one of the Senior Secured Floating Rate Notes due 2025 referred to in the within-mentioned Indenture:

Dated:


WILMINGTON TRUST, NATIONAL ASSOCIATION as Trustee

By:
		Authorized Signatory

[Back of Note]

Senior Secured Floating Rate Notes due 2025

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

(1) INTEREST AND METHOD OF PAYMENT. Pioneer Energy Services Corp., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at the rate determined by the Calculation Agent pursuant to the paragraph below. The principal of this Note shall mature on May 15, 2025.

Interest on this Note will be payable on a quarterly basis in arrears, on each February 15, May 15, August 15 and November 15, until the final Stated Maturity of this Note (each, an “Interest Payment Date”); provided that the first Interest Payment Date shall be August 15, 2020; provided further that on any Interest Payment Date on or prior to the first anniversary of the Issue Date (each a “PIK Interest Payment Date”) interest on this Note due and payable on such PIK Interest Payment Date shall be payable in arrears by (x) an increase to the Capitalized Principal Amount of the Notes, or by authenticating additional Notes, in each case pursuant to Section 2.12(a) of the Indenture and (y) to the extent such interest exceeds the Capitalized Amount, the cash payment of such excess. The interest rate on this Note will reset on each Interest Payment Date occurring prior to the final Stated Maturity of this Note. The interest rate for this Note for a particular Interest Period will be a rate equal to LIBOR on the second London Business Day preceding the first day of such Interest Period (an “Interest Determination Date”), as determined by the Calculation Agent, plus 9.50%; provided that, for all Interest Periods commencing from May 15, 2024, the interest rate for this Note for a particular Interest Period will be a rate equal to LIBOR as of the relevant Interest Determination Date, plus 10.50%. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will be applied to the principal amount of the Notes outstanding on the first day of the relevant Interest Period and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

“Interest Period” means, with respect to the Notes, each period commencing on and including each Interest Payment Date and ending on and including the day immediately preceding the next succeeding Interest Payment Date, with the exception that the first Interest Period shall commence on and include the Issue Date. For the avoidance of doubt, if any Interest Payment Date falls on a day that is not a Business Day, an Interest Period shall still commence on such Interest Payment Date notwithstanding that the payment of interest due on such Interest Payment Date is not made on such day.

period) with a term equivalent to such period in U.S. dollars displayed on the ICE LIBOR USD page of the Reuters Screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters, determined as of approximately 11:00 a.m. (London, England time) on such Interest Determination Date, or (b) in the event the rate referenced in the preceding clause (a) is not available, the rate per annum equal to the average of the quotations received by the Calculation Agent from the Company for deposits (for delivery on the first day of the relevant period) in U.S. dollars of amounts in same day funds comparable to the principal amount of the Notes from three leading banks in the London deposit market, for which LIBOR is then being determined with a term comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement; provided, however, that notwithstanding the foregoing, LIBOR (or any Alternative Rate (as defined below)) shall at no time be less than 1.500%.

Notwithstanding the foregoing, if the Company determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for determining LIBOR (including because LIBOR is not available or published on a current basis), it shall as soon as practicable so notify the Calculation Agent and the Company shall provide a substitute for LIBOR, which shall be the alternative reference rate selected by the central bank, reserve bank, monetary authority or any similar institution (including any committee or working group thereof) that is consistent with accepted market practice, as determined by the Company (the “Alternative Rate”). The Calculation Agent will use such Alternative Rate for each future Interest Determination Date to calculate the interest rate for the Notes. As part of such substitution, the Company will make such adjustments (“Adjustments”) to the Alternative Rate or the spread thereon, as well as the business day convention, interest determination dates and related provisions and definitions, in each case that are consistent with accepted market practice for the use of such Alternative Rate for debt obligations such as the Notes. The Company and the Trustee shall enter into an amendment to this Indenture to reflect the Alternative Rate and such other related changes to this Indenture as may be applicable as determined in good faith by the Company and set forth in an Officers’ Certificate delivered to the Trustee. Notice of such amendment shall be promptly given to the Calculation Agent by the Company. If the Company determines that there is no clear market consensus as to whether any rate has replaced LIBOR in customary market usage, the Calculation Agent shall have the right to resign as calculation agent in respect of the Notes and the Company will appoint, in its sole discretion, a successor calculation agent in respect of the Notes to determine the Alternative Rate and make any Adjustments thereon, and whose determinations will be binding on the Company, the Trustee and the holders of the Notes. If, however, the Company determines that LIBOR has been discontinued, but for any reason an Alternative Rate has not been determined, LIBOR (for purposes of calculating the relevant interest rate) will be equal to such rate on the Interest Determination Date when LIBOR was last available on Bloomberg L.P.’s page “BBAM” and last used to determine the relevant interest rate for the Notes. The Company will promptly notify Holders of the Notes of the rate replacing LIBOR.

Promptly upon determination of the interest rate for a given Interest Period on each Interest Determination Date, the Calculation Agent will inform the Company and the Trustee by written notice of the interest rate for such Interest Period. The Company will make available the interest rates for current and preceding Interest Periods by delivery of a notice through such medium as available to participants in DTC or any successor thereof, and in accordance with applicable respective rules and procedures as long as any Note is held in global form. In the event that any Note is held in certificated form, upon the request of the holder of any Note, the Company will provide the interest rates for the current and preceding Interest Periods.

In addition, the Company may pay defaulted interest as provided for in Section 2.12(b) of the Indenture.

The Notes are limited to $78,125,000 aggregate principal amount (subject to Section 2.07 of the Indenture). The principal of and interest on, and all other amounts payable under, this Note will be payable in U.S. dollars.

Whenever any payment to be made with respect to any Note is due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and no interest shall accrue on any amount that would have been otherwise payable on such payment date if it were a Business Day for the intervening period; provided that, if the payment to be made in respect of the final Stated Maturity of the Notes falls on a day that is not a Business Day, such payment shall be made on the immediately prior Business Day, and interest shall be deemed to have accrued, and shall be payable, as if the payment was made on the date of the final Stated Maturity of the Note. The term “Business Day” means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York or the place of payment of principal of and interest on, and all other amounts payable under, this Note, are authorized or required by law, regulation or executive order to close.

The Company will pay interest on the Notes to the Persons who are registered Holders of Notes at the close of business on the record date next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date (except as provided in Section 2.12 of the Indenture with respect to defaulted interest).

All references to “interest” in this Note and in the Indenture mean the initial interest rate borne by the Notes and any defaulted interest that accrues as described under Section 2.12(b) of the Indenture (unless the Indenture states otherwise).

(2) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust, National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity; provided no Event of Default is continuing.

(3) INDENTURE. The Company issued the Notes under an Indenture dated as of May 29, 2020 (the “Indenture”) among the Company, the Guarantors, the Trustee and the Security Agent. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the Indenture, the Indenture shall govern and be controlling.

(4) OPTIONAL REDEMPTION. The Notes are subject to redemption as provided in Section 3.07 of the Indenture.

(5) MANDATORY REDEMPTION. The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

(6) MANDATORY OFFERS TO PURCHASE.

(A) Except as provided in the Indenture, no later than the second Business Day following the date of receipt by the Company or any of its Subsidiaries of Net Disposition Proceeds in respect of any Disposition of Property of the Company or its Subsidiaries which, together with the Net Disposition Proceeds in respect of certain Dispositions since the Issue Date, exceeds $5,000,000 in the aggregate (other than as specified in the Indenture), in the circumstances specified in the Indenture, the Company shall commence an offer to purchase, in the manner provided in paragraph (D) below, an aggregate principal amount of Notes equal to the lesser of (x) the aggregate principal amount outstanding of the Notes and (y) the aggregate amount of Excess Net Disposition Proceeds; provided, however that a disposition of Property resulting in Net Disposition Proceeds of less than $100,000 shall be excluded from these offer to purchase requirements and shall not count towards the $5,000,000 aggregate threshold set forth above.

(B) Except as provided in the Indenture, no later than the second Business Day following the date of receipt by the Company or any of its Subsidiaries of any Net Insurance/Condemnation Proceeds, in circumstances specified in the Indenture, the Company shall commence an offer to purchase, in the manner provided in paragraph (D) below, an aggregate principal amount of Notes equal to the lesser of (x) the aggregate principal amount outstanding of the Notes and (y) the aggregate amount of Net Insurance/Condemnation Proceeds; provided, that so long as no Event of Default shall have occurred and be continuing, the Company shall have the option, directly or through one or more of its Subsidiaries, to invest such Net Insurance/Condemnation Proceeds within one year of receipt thereof in certain assets specified in the Indenture; provided further, however, that the Company shall make an offer to purchase Notes with any such Net Insurance/Condemnation Proceeds not so invested within such period described above promptly following the expiration of such period.

(C) No later than the second Business Day following the date of receipt by the Company or any of its Subsidiaries of any cash proceeds from the incurrence of any Debt of the Company or any of its Subsidiaries (other than with respect to any Debt permitted to be incurred pursuant to Section 5.01 of the Indenture), in circumstances specified in the Indenture, the Company shall commence an offer to purchase, in the manner provided in paragraph (D) below, an aggregate principal amount of Notes equal to 100% of such proceeds, net of underwriting discounts and commissions and other costs and expenses associated therewith, including legal fees and expenses.

(D) The Mandatory Offers described in paragraphs (A), (B) and (C) above will be made to all Holders of the Notes and, to the extent required, offers will also be made to all holders of other Debt of the Company that is pari passu with the Notes containing provisions similar to those set forth in the Indenture. No later than three Business Days after the termination of the Offer Period, the Company will apply the amount of proceeds specified in each of paragraphs (A), (B) and (C) above to the purchase of Notes and the other pari passu Debt, if any, to be purchased (on a pro rata basis, if applicable). Holders of Notes that are the subject of a Mandatory Offer will receive a notice from the Company containing all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Mandatory Offer. Holders electing to have Notes purchased pursuant to a Mandatory Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to this Note completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice.

(7) REPURCHASE AT THE OPTION OF HOLDER. If a Change of Control occurs, each Holder will have a right to require the Company to repurchase all or any part (equal to a minimum principal amount of $1.00 or an integral multiple of $1.00 in excess thereof) of that Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of purchase. Within 10 days following any Change of Control, the Company will mail a notice to each Holder of the Notes describing the transaction or transactions that constitute the Change of Control and offering to repurchase the Notes on the date specified in the notice, which date will be no earlier than 10 days and no later than 60 days from the date such notice is mailed, pursuant to the procedures described in the Indenture and in such notice.

(8) NOTICE OF REDEMPTION. Notice of redemption will be given, by first class mail, at least 10 days but not more than 60 days before a redemption date to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be given 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 or discharge of the Indenture. Notes in denominations larger than $1.00 may be redeemed in part but only in whole multiples of $1.00 in excess thereof, unless all of the Notes held by a Holder are to be redeemed. Any notice of redemption may, at the Company’s discretion, be given prior to a transaction or event specified in the Indenture and any such redemption or notice may, at the Company’s discretion, be subject to one or more conditions precedent, including, but not limited to, completion or occurrence of the related transaction or event, as the case may be.

the Indenture. The Registrar is not required register the transfer or exchange of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. In addition, neither the Registrar nor the Company is required 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 Notes for redemption, or to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date.

(10) PERSONS DEEMED OWNERS. The registered Holder of a Note will be treated as its owner for all purposes. Only registered Holders have rights under the Indenture and this Note.

(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Notes or the Subsidiary Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and any existing Default or Event or Default or compliance with any provision of the Indenture, the Notes or the Subsidiary Guarantees may be waived with the consent of the Holders of a majority in aggregate principal amount of the then outstanding Notes. Without the consent of any Holder of a Note, the Indenture, the Notes or the Subsidiary Guarantees may be amended or supplemented to cure any ambiguity, defect or inconsistency and to effect certain other changes as set forth in the Indenture. Without the consent of 100% in aggregate principal amount of Notes, an amendment, supplement or waiver may not modify, among other things, any Security Document, any provision of the Indenture dealing with the Security Documents, or otherwise release any Collateral or modify the ABL Intercreditor Agreement, except in circumstances specified in the Indenture.

(12) DEFAULTS AND REMEDIES. If any Event of Default occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes by notice to the Company and the Trustee, may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable immediately without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in aggregate principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal of, or interest or premium, if any, on, the Notes) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may, on behalf of the Holders of all of the Notes, waive any existing Default or Event of Default and its consequences under the Indenture (except a continuing Default or Event of Default in the payment of interest or premium, if any, on, or the principal of, the Notes) and rescind an acceleration and its consequences (if the rescission would not violate or conflict with any judgment or decree and if all existing Events of Default have been cured or waived). The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required, upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

(13) LEGAL DEFEASANCE AND COVENANT DEFEASANCE. Subject to certain conditions, the Company may, at its option and at any time, elect to terminate certain of the obligations of the Notes Parties under the Notes if the Company, among other things, deposits with the Trustee cash in U.S. dollars, non-callable Government Securities, or a combination thereof, for the payment of principal, interest and premium, if any, on the outstanding Notes on the final Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date.

(14) RANKING. The Notes will constitute senior secured obligations of the Company.

(15) GUARANTEE. Each of the Guarantors will, jointly and severally, unconditionally guarantee to the extent set forth in the Indenture (i) the full and prompt payment when due of the principal of, premium, if any, and interest on, the Notes and all other Notes Obligations of the Company under the Indenture and (ii) 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. Each Subsidiary Guarantee will remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation, reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company’s Properties.

(16) SECURITY. The payment of the principal of and interest and premium, if any, on the Notes, the payment of all other obligations under the Notes, the Indenture and the Security Documents and the performance of all other obligations of the Company and the Guarantors under the Indenture, the Notes, the Subsidiary Guarantees and the Security Documents will be secured as provided in the Indenture and the Security Documents and will be secured by the Collateral as set forth in the Indenture and the Security Documents as required or permitted by the Indenture. The Security Agent will have at all times an Acceptable Security Interest that is superior to all other Liens (other than Permitted Priority Liens) in the Collateral to secure the performance and payment of the Notes Obligations. Subject to the ABL Intercreditor Agreement, the Liens on the Collateral securing the Notes Obligations, the Notes and the Subsidiary Guarantees will be released automatically in circumstances specified in the Indenture.

(17) TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or any other capacity may become the owner or pledgee of the 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 or resign.

(18) NO RECOURSE AGAINST OTHERS. No director, officer, employee, manager, incorporator, member, partner or stockholder or other owner of Equity Interests of the Company or any of its Subsidiaries, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Subsidiary Guarantees, or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of a Note by accepting the 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, and it is the view of the SEC that such waiver is against public policy.

(19) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

(20) ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder 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 Gifts to Minors Act).

(21) CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes, and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption, and reliance may be placed only on the other identification numbers placed thereon.

(22) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE SUBSIDIARY GUARANTEES.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

PIONEER ENERGY SERVICES CORP.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

ASSIGNMENT FORM

To assign this Note, fill in the form below:


(I) or (we) assign and transfer this Note to:_________________________________________________________________________
		(Insert assignee’s legal name)


(Insert assignee’s soc. sec. or tax I.D. no.)




(Print or type assignee’s name, address and zip code)

and irrevocably appoint________________________________________________________________________________________

to transfer this Note on the books of the Company. The agent may substitute another to act for him.


Date: ______________________

		Your Signature:______________________________________
		(Sign exactly as your name appears on the face of this Note)

Signature Guarantee*: _____________________

*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

Option of Holder to Elect Purchase

If you want to elect to have this Note purchased by the Company pursuant to Section 3.09 (“Mandatory Offers to Purchase”) or Section 3.10 (“Offer to Repurchase Upon Change of Control”) of the Indenture, check the appropriate box below:


☐ Section 3.09 (“Mandatory Offers to Purchase”)		☐ Section 3.10 (“Offer to Repurchase Upon a Change of Control”)

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 3.09 (“Mandatory Offers to Purchase”) or Section 3.10 (“Offer to Repurchase Upon a Change of Control”) of the Indenture, state the amount you elect to have purchased:

$____________________


Date: ______________________

		Your Signature:______________________________________
		(Sign exactly as your name appears on the face of this Note)

		Tax Identification No.: ________________________________

Signature Guarantee*: _________________________________

*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE *

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Certificated Note, or exchanges of a part of another Global Note or Certificated Note for an interest in this Global Note, have been made:

Date of
Exchange

Amount of
Decrease in
Principal Amount
at Maturity of this
Global Note

Amount of
Increase in
Principal Amount
at Maturity of this
Global Note

Principal Amount
at Maturity

of this Global
Note following
such Decrease
or Increase

Signature of
authorized officer
of Trustee or
Custodian

*	This schedule should be included only if the Note is issued in global form.

EXHIBIT B-1

FORM OF CERTIFICATE OF TRANSFER

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

If to the Trustee:

Wilmington Trust, National Association

Global Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services Notes Administrator

Facsimile: (612) 217-5651

Re: Senior Secured Floating Rate Notes due 2025

Reference is hereby made to the Indenture, dated as of May 29, 2020 (the “Indenture”), among Pioneer Energy Services Corp., as issuer (the “Company”), the Guarantors party thereto and Wilmington Trust, National Association, as trustee and security agent. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

___________________, (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $_________in such Note[s] or interests (the “Transfer”), to _____________________(the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ☐ Check if Transferee will take delivery of a beneficial interest in the Rule 144A Global Note or a Certificated Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Certificated Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Certificated Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A, and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Rule 144A Global Note and/or the Certificated Note and in the Indenture and the Securities Act.

2. ☐ Check and complete if Transferee will take delivery of a beneficial interest in the AI Global Note or a Restricted Certificated Note pursuant to any provision of the Securities Act other than Rule 144A. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in the AI Global Note and Restricted Certificated Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ☐ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Restricted Certificated Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the AI Global Note and/or the Restricted Certificated Note and in the Indenture and the Securities Act;

(b) ☐ such Transfer is being effected to the Company or a Subsidiary thereof;

(c) ☐ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

(d) ☐ such Transfer is being effected to an AI and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A or Rule 144, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Certificated Note and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit B-2 to the Indenture and (2) if the Company so requires, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Restricted Certificated Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the AI Global Note and/or the Restricted Certificated Note and in the Indenture and the Securities Act.

3. ☐ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Certificated Note.

(a) ☐ Check if Transfer is Pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Certificated Notes and in the Indenture.

(b) ☐ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Certificated Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Certificated Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.


[Insert Name of Transferor]



By:


Name:


Title:

Dated: _____________________________

ANNEX A TO CERTIFICATE OF TRANSFER

1.	The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) or (b)]

(a)

☐ a beneficial interest in the:

(i)

Rule 144A Global Note (CUSIP ), or

(ii)

AI Global Note (CUSIP ), or

(b)

☐ a Restricted Certificated Note.

2.	After the Transfer, the Transferee will hold:

[CHECK ONE]

(a)

☐ a beneficial interest in the:

(i)

Rule 144A Global Note (CUSIP ), or

(ii)

AI Global Note (CUSIP ), or

(iii)

Unrestricted Global Note (CUSIP ), or

(b)

☐ a Restricted Certificated Note, or

(c)

☐ an Unrestricted Certificated Note,

in accordance with the terms of the Indenture.

EXHIBIT B-2

FORM OF ACCREDITED INVESTOR CERTIFICATE

[Date]

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

Wilmington Trust, National Association

Global Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services

Notes Administrator

Facsimile: (612) 217-5651

Re: Senior Secured Floating Rate Notes due 2025

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $—————— principal amount of the Senior Secured Floating Rate Notes due 2025 (the “Securities”) of Pioneer Energy Services Corp., a Delaware corporation (the “Company”).

Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows:


Name:		————————————
Address:		————————————
Taxpayer ID Number:		————————————

The undersigned represents and warrants to you that:

2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing Securities to offer, sell or otherwise transfer such Securities prior to the date that is one year after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the “Resale Restriction Termination Date”) only (a) to the Company or a Subsidiary thereof, (b) pursuant to a registration statement which has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act, to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a “QIB”) that purchases for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) to an “accredited investor” within the meaning of Rule 501(a) under the Securities Act that is purchasing for its own account or for the account of such an “accredited investor,” in each case in a minimum principal amount of Securities of $250,000 or (e) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (d) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an “accredited investor” (within the meaning of Rule 501(a) under the Securities Act) and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to any offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clauses (d) or (e) above to require the delivery of an opinion of counsel, certifications and/or other information satisfactory to the Company and the Trustee.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.


[Insert Name of Transferee]

By:
Name:
Title:

Dated:

EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

If to the Trustee:

Wilmington Trust, National

Association

Global Capital Markets

50 South Sixth Street, Suite 1290

Minneapolis, MN 55402

Attention: Pioneer Energy Services

Notes Administrator

Facsimile: (612) 217-5651

Re: Senior Secured Floating Rate Notes due 2025

____________________, (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $____________in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

1. Exchange of Restricted Certificated Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Certificated Notes or Beneficial Interests in an Unrestricted Global Note

(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Certificated Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Certificated Note, the Owner hereby certifies (i) the Certificated Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Certificated Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(c) ☐ Check if Exchange is from Restricted Certificated Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Certificated Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(d) ☐ Check if Exchange is from Restricted Certificated Note to Unrestricted Certificated Note. In connection with the Owner’s Exchange of a Restricted Certificated Note for an Unrestricted Certificated Note, the Owner hereby certifies (i) the Unrestricted Certificated Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Certificated Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Certificated Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. Exchange of Restricted Certificated Notes or Beneficial Interests in Restricted Global Notes for Restricted Certificated Notes or Beneficial Interests in Restricted Global Notes

(a) ☐ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Certificated Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Certificated Note with an equal principal amount at maturity, the Owner hereby certifies that the Restricted Certificated Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Certificated Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Certificated Note and in the Indenture and the Securities Act.

(b) ☐ Check if Exchange is from Restricted Certificated Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Certificated Note for a beneficial interest in the

[CHECK ONE]

☐ Rule 144A Global Note,

☐ AI Global Note,

with an equal principal amount at maturity, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.


[Insert Name of Owner]

By:
Name:
Title:

Dated:

EXHIBIT D

FORM OF NOTATION OF SUBSIDIARY GUARANTEE

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of May 29, 2020 (the “Indenture”) among Pioneer Energy Services Corp. (the “Company”), the Guarantors party thereto and Wilmington Trust, National Association, as trustee (the “Trustee”) and as security agent, (a) the due and punctual payment of the principal of, premium, if any, and interest on, the Notes when due, whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on the overdue principal of and interest on the Notes, if any, if lawful, and the due and punctual performance of all other Notes Obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) 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, in accordance with the terms of the extension or renewal, whether at maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture, and the limitations thereon, are expressly set forth in Article XII of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee.

Capitalized terms used but not defined herein have the meanings given to them in the Indenture.


[NAME OF GUARANTORS]

By:
		Name:
		Title:

EXHIBIT E

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of _______________,_____, among __________ (the “Guaranteeing Subsidiary”), a subsidiary of Pioneer Energy Services Corp. (or its permitted successor), a Delaware corporation (the “Company”), the Company and Wilmington Trust, National Association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of May 29, 2020 providing for the issuance of Senior Secured Floating Rate Notes due 2025 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Guarantee”); and

WHEREAS, pursuant to Section 10.01 (“Without Consent of Holders of Notes”) of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby guarantees the Company’s obligations under the Indenture and the Notes related thereto pursuant to the terms and conditions of Article XII of the Indenture, such Article XII being incorporated by reference herein as if set forth at length herein (each such guarantee, a “Subsidiary Guarantee”), and such Guaranteeing Subsidiary agrees to be bound as a Guarantor under the Indenture as if it had been an initial signatory thereto; provided that the Guaranteeing Subsidiary can be released from its Subsidiary Guarantee to the same extent as any other Guarantor under the Indenture.

3. NO RECOURSE AGAINST OTHERS. No director, officer, employee, manager, incorporator, member, partner or stockholder or other owner of Equity Interests of the Company or any of its Subsidiaries, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of a Note by accepting the Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

4. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.

5. 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.

6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

8. 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 Notes heretofore or hereafter authenticated and delivered shall be bound hereby.

DRAFT

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

Dated: __________, 20[ ]


[NEW GUARANTOR]



By:


Name:
Title:


PIONEER ENERGY SERVICES CORP., as the Company



By:


Name:
Title:


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee



By:


Name:
Title:

SCHEDULE 5.01

INDEBTEDNESS

Intercompany Note:

Debtor

Issuer of Instrument

Principal Amount of

Instrument

Maturity Date

Pioneer de Colombia

SDAD, Ltda.

Pioneer Latina

Group SDAD, Ltda.

$19,800,000

December 4, 2023

Convertible Bonds issued by the Company pursuant to the Indenture dated as of May 29, 2020 by and among the Company, as issuer thereunder, Wilmington Trust, National Association, as trustee, and the holders party thereto from time to time, in an aggregate principal amount of $129,771,000.

Credit Agreement, dated as of May 29, 2020, by and among the Company and certain of its direct and indirect Subsidiaries, as borrowers, the lenders from time to time party thereto and PNC Bank, National Association, as administrative agent, in an aggregate principal amount of $75,000,000.

SCHEDULE 5.02

PERMITTED LIENS

None.

SCHEDULE 5.03

PERMITTED INVESTMENTS

None.

Exhibit 4.4

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 (i) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (ii) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE, (iii) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (iv) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL, OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS ONE YEAR AFTER THE LATER OF THE ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE

TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(a) UNDER THE SECURITIES ACT THAT IS AN ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY’S RIGHT PRIOR TO ANY SUCH OFFER, SALE, OR TRANSFER PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION, AND/OR OTHER INFORMATION SATISFACTORY TO IT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER OR THE COMPANY ON OR AFTER THE RESALE RESTRICTION TERMINATION DATE.

FOR THE PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS NOTE IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT. YOU MAY CONTACT THE COMPANY AT PIONEER ENERGY SERVICES CORP. 1250 N.E. LOOP 410, SUITE 1000, SAN ANTONIO, TEXAS 78209 ATTENTION: CORPORATE SECRETARY AND THE COMPANY WILL PROVIDE YOU WITH THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE AND THE YIELD TO MATURITY OF THIS NOTE.

CUSIP: 723664 AG3

Senior Secured Floating Rate Notes due 2025


No. 144A-1		$	78,125,000

PIONEER ENERGY SERVICES CORP., a Delaware corporation, for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of SEVENTY EIGHT MILLION, ONE HUNDRED AND TWENTY FIVE THOUSAND DOLLARS, subject to any adjustments listed on the Schedule of Exchanges of Interests in the Global Note attached hereto, on May 15, 2025.

Interest Payment Dates: February 15, May 15, August 15 and November 15

Record Dates: February 1, May 1, August 1 and November 1

Date of Issuance: May 29, 2020

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


PIONEER ENERGY SERVICES CORP.

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


This is one of the Senior Secured Floating Rate Notes due 2025 referred to in the within-mentioned Indenture:

Dated: May 29, 2020

WILMINGTON TRUST, NATIONAL ASSOCIATION
as Trustee

By:		/s/ Jane Schweiger
		Vice President

Senior Secured Floating Rate Notes due 2025

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

Interest on this Note will be payable on a quarterly basis in arrears, on each February 15, May 15, August 15 and November 15, until the final Stated Maturity of this Note (each, an “Interest Payment Date”); provided that the first Interest Payment Date shall be August 15, 2020; provided further that on any Interest Payment Date on or prior to the first anniversary of the Issue Date (each a “PIK Interest Payment Date”) interest on this Note due and payable on such PIK Interest Payment Date shall be payable in arrears by (x) an increase to the Capitalized Principal Amount of the Notes, or by authenticating additional Notes, in each case pursuant to Section 2.12(a) of the Indenture and (y) to the extent such interest exceeds the Capitalized Amount, the cash payment of such excess. The interest rate on this Note will reset on each Interest Payment Date occurring prior to the final Stated Maturity of this Note. The interest rate for this Note for a particular Interest Period will be a rate equal to LIBOR on the second London Business Day preceding the first day of such Interest Period (an “Interest Determination Date”), as determined by the Calculation Agent, plus 9.50%; provided that, for all Interest Periods commencing from May 15, 2024, the interest rate for this Note for a particular Interest Period will be a rate equal to LIBOR as of the relevant Interest Determination Date, plus 10.50%. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will be applied to the principal amount of the Notes outstanding on the first day of the relevant Interest Period and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

Subject to the following paragraph, “LIBOR” will mean for any Interest Period, the rate per annum obtained by dividing (i) (a) the rate per annum equal to the rate determined by the Calculation Agent to be the London interbank offered rate administered by the ICE Benchmark Administration (or any other person which takes over the administration of that rate) for deposits (for delivery on the first day of such period) with a term equivalent to such period in U.S. dollars displayed on the ICE LIBOR USD page of the Reuters Screen (or any replacement Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters, determined as of approximately 11:00 a.m. (London, England time) on such Interest Determination Date, or (b) in the event the rate referenced in the preceding clause

(a) is not available, the rate per annum equal to the average of the quotations received by the Calculation Agent from the Company for deposits (for delivery on the first day of the relevant period) in U.S. dollars of amounts in same day funds comparable to the principal amount of the Notes from three leading banks in the London deposit market, for which LIBOR is then being determined with a term comparable to such period as of approximately 11:00 a.m. (London, England time) on such Interest Determination Date, by (ii) an amount equal to (a) one minus (b) the Applicable Reserve Requirement; provided, however, that notwithstanding the foregoing, LIBOR (or any Alternative Rate (as defined below)) shall at no time be less than 1.500%.

Notwithstanding the foregoing, if the Company determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for determining LIBOR (including because LIBOR is not available or published on a current basis), it shall as soon as practicable so notify the Calculation Agent and the Company shall provide a substitute for LIBOR, which shall be the alternative reference rate selected by the central bank, reserve bank, monetary authority or any similar institution (including any committee or working group thereof) that is consistent with accepted market practice, as determined by the Company (the “Alternative Rate”). The Calculation Agent will use such Alternative Rate for each future Interest Determination Date to calculate the interest rate for the Notes. As part of such substitution, the Company will make such adjustments (“Adjustments”) to the Alternative Rate or the spread thereon, as well as the business day convention, interest determination dates and related provisions and definitions, in each case that are consistent with accepted market practice for the use of such Alternative Rate for debt obligations such as the Notes. The Company and the Trustee shall enter into an amendment to this Indenture to reflect the Alternative Rate and such other related changes to this Indenture as may be applicable as determined in good faith by the Company and set forth in an Officers’ Certificate delivered to the Trustee. Notice of such amendment shall be promptly given to the Calculation Agent by the Company. If the Company determines that there is no clear market consensus as to whether any rate has replaced LIBOR in customary market usage, the Calculation Agent shall have the right to resign as calculation agent in respect of the Notes and the Company will appoint, in its sole discretion, a successor calculation agent in respect of the Notes to determine the Alternative Rate and make any Adjustments thereon, and whose determinations will be binding on the Company, the Trustee and the holders of the Notes. If, however, the Company determines that LIBOR has been discontinued, but for any reason an Alternative Rate has not been determined, LIBOR (for purposes of calculating the relevant interest rate) will be equal to such rate on the Interest Determination Date when LIBOR was last available on Bloomberg L.P.’s page “BBAM” and last used to determine the relevant interest rate for the Notes. The Company will promptly notify Holders of the Notes of the rate replacing LIBOR.

In addition, the Company may pay defaulted interest as provided for in Section 2.12(b) of the Indenture.

(4) OPTIONAL REDEMPTION. The Notes are subject to redemption as provided in Section 3.07 of the Indenture.

(5) MANDATORY REDEMPTION. The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

(6) MANDATORY OFFERS TO PURCHASE.

pursuant to the Mandatory Offer. Holders electing to have Notes purchased pursuant to a Mandatory Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” attached to this Note completed, or transfer by book-entry transfer, to the Company, a Depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice.

(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in minimum denominations of $1.00 and integral multiples of $1.00 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Registrar is not required register the transfer or exchange of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. In addition, neither the Registrar nor the Company is required 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 Notes for redemption, or to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date.

(10) PERSONS DEEMED OWNERS. The registered Holder of a Note will be treated as its owner for all purposes. Only registered Holders have rights under the Indenture and this Note.

(14) RANKING. The Notes will constitute senior secured obligations of the Company.

(19) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

(22) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE SUBSIDIARY GUARANTEES.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

PIONEER ENERGY SERVICES CORP.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

ASSIGNMENT FORM

To assign this Note, fill in the form below:


(I) or (we) assign and transfer this Note to:
		(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)





(Print or type assignee’s name, address and zip code)


and irrevocably appoint

to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:_____________


		Your Signature:______________________
		(Sign exactly as your name appears on the face of this Note)


Signature Guarantee*:___________________

*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

Option of Holder to Elect Purchase


☐ Section 3.09 (“Mandatory Offers to Purchase”)		☐ Section 3.10 (“Offer to Repurchase Upon a Change of Control”)

$____________

Date:____________


		Your Signature:____________________________________
		(Sign exactly as your name appears on the face of this Note)

		Tax Identification No.:_______________________________

Signature Guarantee*: _______________

*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

Date of

Exchange

Amount of

Decrease in

Principal Amount

at Maturity of this

Global Note

Amount of

Increase in

Principal Amount

at Maturity of this

Global Note

Principal Amount
at Maturity

of this Global
Note following
such Decrease

or Increase

Signature of
authorized officer
of Trustee or
Custodian

CUSIP: 723664 AH1

Senior Secured Floating Rate Notes due 2025


No. AI-1		$	0

PIONEER ENERGY SERVICES CORP., a Delaware corporation, for value received, promises to pay to CEDE & CO., or its registered assigns, the principal sum of ZERO DOLLARS, subject to any adjustments listed on the Schedule of Exchanges of Interests in the Global Note attached hereto, on May 15, 2025.

Interest Payment Dates: February 15, May 15, August 15 and November 15

Record Dates: February 1, May 1, August 1 and November 1

Date of Issuance: May 29, 2020

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.


PIONEER ENERGY SERVICES CORP.

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

This is one of the Senior Secured Floating Rate Notes due 2025 referred to in the within-mentioned Indenture:

Dated: May 29, 2020


WILMINGTON TRUST, NATIONAL ASSOCIATION as Trustee

By:		/s/ Jane Schweiger
		Vice President

Senior Secured Floating Rate Notes due 2025

Capitalized terms used herein have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

Interest on this Note will be payable on a quarterly basis in arrears, on each February 15, May 15, August 15 and November 15, until the final Stated Maturity of this Note (each, an “Interest Payment Date”); provided that the first Interest Payment Date shall be August 15, 2020; provided further that on any Interest Payment Date on or prior to the first anniversary of the Issue Date (each a “PIK Interest Payment Date”) interest on this Note due and payable on such PIK Interest Payment Date shall be payable in arrears by (x) an increase to the Capitalized Principal Amount of the Notes, or by authenticating additional Notes, in each case pursuant to Section 2.12(a) of the Indenture and (y) to the extent such interest exceeds the Capitalized Amount, the cash payment of such excess. The interest rate on this Note will reset on each Interest Payment Date occurring prior to the final Stated Maturity of this Note. The interest rate for this Note for a particular Interest Period will be a rate equal to LIBOR on the second London Business Day preceding the first day of such Interest Period (an “Interest Determination Date”), as determined by the Calculation Agent, plus 9.50%; provided that, for all Interest Periods commencing from May 15, 2024, the interest rate for this Note for a particular Interest Period will be a rate equal to LIBOR as of the relevant Interest Determination Date, plus 10.50%. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will be applied to the principal amount of the Notes outstanding on the first day of the relevant Interest Period and, for partial months, on the basis of the number of days actually elapsed in a 30-day month.

In addition, the Company may pay defaulted interest as provided for in Section 2.12(b) of the Indenture.

(4) OPTIONAL REDEMPTION. The Notes are subject to redemption as provided in Section 3.07 of the Indenture.

(5) MANDATORY REDEMPTION. The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes.

(6) MANDATORY OFFERS TO PURCHASE.

(10) PERSONS DEEMED OWNERS. The registered Holder of a Note will be treated as its owner for all purposes. Only registered Holders have rights under the Indenture and this Note.

(14) RANKING. The Notes will constitute senior secured obligations of the Company.

(18) NO RECOURSE AGAINST OTHERS. No director, officer, employee, manager, incorporator, member, partner or stockholder or other owner of Equity Interests of the Company or any of its Subsidiaries, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of a Note by accepting the 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, and it is the view of the SEC that such waiver is against public policy.

(19) AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

(22) GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE INDENTURE, THIS NOTE AND THE SUBSIDIARY GUARANTEES.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

PIONEER ENERGY SERVICES CORP.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Corporate Secretary

ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:

(Insert assignee’s legal name)

(Insert assignee’s soc. sec. or tax I.D. no.)

(Print or type assignee’s name, address and zip code)

and irrevocably appoint

to transfer this Note on the books of the Company. The agent may substitute another to act for him.

Date:

Your Signature:

(Sign exactly as your name appears on the face of this Note)

Signature Guarantee*:

*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

Option of Holder to Elect Purchase


☐ Section 3.09 (“Mandatory Offers to Purchase”)		☐ Section 3.10 (“Offer to Repurchase Upon a Change of Control”)

$______________

Date: ______________

Your Signature:___________________________________________

(Sign exactly as your name appears on the face of this Note)

Tax Identification No.: _____________________________________

Signature Guarantee*: __________________________________________

*	Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE

Date of

Exchange

Amount of

Decrease in

Principal Amount

at Maturity of this

Global Note

Amount of

Increase in

Principal Amount

at Maturity of this

Global Note

Principal Amount
at Maturity

of this Global
Note following
such Decrease

or Increase

Signature of
authorized officer
of Trustee or
Custodian

Exhibit 10.1

Execution Version

CREDIT AGREEMENT

by and among

PNC BANK, NATIONAL ASSOCIATION,

as Agent,

PNC BANK, NATIONAL ASSOCIATION,

as Sole Lead Arranger,

PNC BANK, NATIONAL ASSOCIATION,

as Sole Book Runner,

THE LENDERS THAT ARE PARTIES HERETO,

as the Lenders,

PIONEER ENERGY SERVICES CORP.

as Parent and as a Borrower, and

PIONEER DRILLING SERVICES, LTD.,

PIONEER GLOBAL HOLDINGS, INC.,

PIONEER PRODUCTION SERVICES, INC.,

PIONEER WIRELINE SERVICES HOLDINGS, INC.,

PIONEER WIRELINE SERVICES, LLC,

PIONEER WELL SERVICES, LLC,

PIONEER FISHING & RENTAL SERVICES, LLC and

PIONEER COILED TUBING SERVICES, LLC

as Borrowers

Dated as of May 29, 2020

TABLE OF CONTENTS


			Page
1.	DEFINITIONS AND CONSTRUCTION			1
	1.1.	Definitions		1
	1.2.	Accounting Terms		61
	1.3.	Code		61
	1.4.	Construction		62
	1.5.	Time References		63
	1.6.	Schedules and Exhibits		63
	1.7.	LIBOR Notification		63

2.	LOANS AND TERMS OF PAYMENT			63
	2.1.	Revolving Loans		63
	2.2.	[Intentionally Omitted]		64
	2.3.	Borrowing Procedures and Settlements		64
	2.4.	Payments; Reductions of Commitments; Prepayments		72
	2.5.	Promise to Pay; Promissory Notes		76
	2.6.	Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations		76
	2.7.	Crediting Payments		78
	2.8.	Designated Account		78
	2.9.	Maintenance of Loan Account; Statements of Obligations		78
	2.10.	Fees		79
	2.11.	Letters of Credit		80
	2.12.	LIBOR Option		89
	2.13.	Interest Rate Inadequate or Unfair		91
	2.14.	Successor LIBOR Rate Index		92
	2.15.	Capital Requirements		93
	2.16.	[Intentionally Omitted]		95
	2.17.	Joint and Several Liability of Borrowers		95

3.	CONDITIONS; TERM OF AGREEMENT			98
	3.1.	Conditions Precedent to the Initial Extension of Credit		98
	3.2.	Conditions Precedent to all Extensions of Credit		101
	3.3.	Maturity		101
	3.4.	Effect of Maturity		101
	3.5.	Early Termination by Borrowers		101
	3.6.	Conditions Subsequent		101

-i-

TABLE OF CONTENTS

(continued)


			Page
4.	REPRESENTATIONS AND WARRANTIES			102
	4.1.	Due Organization and Qualification; Subsidiaries		102
	4.2.	Due Authorization; No Conflict		103
	4.3.	Governmental Consents		103
	4.4.	Binding Obligations; Perfected Liens		104
	4.5.	Title to Assets; No Encumbrances		104
	4.6.	Litigation		104
	4.7.	Compliance with Laws		104
	4.8.	No Material Adverse Effect		105
	4.9.	Solvency		105
	4.10.	Employee Benefits		105
	4.11.	Environmental Condition		105
	4.12.	Complete Disclosure		106
	4.13.	[Intentionally Omitted]		106
	4.14.	Indebtedness		106
	4.15.	Payment of Taxes		107
	4.16.	Margin Stock		107
	4.17.	Governmental Regulation		107
	4.18.	[Intentionally Omitted]		107
	4.19.	Employee and Labor Matters		107
	4.20.	[Intentionally Omitted]		108
	4.21.	Leases		108
	4.22.	Eligible Accounts		108
	4.23.	Eligible Inventory		108
	4.24.	Intentionally Omitted		108
	4.25.	Location of Inventory		108
	4.26.	Inventory Records		108
	4.27.	Intentionally Omitted		108
	4.28.	Material Contracts and Senior Secured Notes Documents		109
	4.29.	Immaterial Subsidiaries		109
	4.30.	Hedge Agreements		109
	4.31.	Certificate of Beneficial Ownership		110

5.	AFFIRMATIVE COVENANTS			110
	5.1.	Financial Statements, Reports, Certificates		110
	5.2.	Reporting		110
	5.3.	Existence		110
	5.4.	Maintenance of Properties		111
	5.5.	Taxes		111

-ii-

TABLE OF CONTENTS

(continued)


			Page
	5.6.	Insurance		111
	5.7.	Inspection		112
	5.8.	Compliance with Laws		112
	5.9.	Environmental		112
	5.10.	Disclosure Updates		113
	5.11.	Formation of Subsidiaries		113
	5.12.	Further Assurances		114
	5.13.	Lender Meetings		114
	5.14.	Location of Inventory; Chief Executive Office		114
	5.15.	[Intentionally Omitted]		115
	5.16.	Primary Treasury Management Relationship		115
	5.17.	Additional Material Real Estate Assets		115
	5.18.	Titled Collateral		115
	5.19.	ERISA		116
	5.20.	Certificate of Beneficial Ownership and Other Additional Information		116
	5.21.	Keepwell		116

6.	NEGATIVE COVENANTS			117
	6.1.	Indebtedness		117
	6.2.	Liens		117
	6.3.	Restrictions on Fundamental Changes		117
	6.4.	Disposal of Assets		118
	6.5.	Nature of Business		118
	6.6.	Prepayments and Amendments		118
	6.7.	Restricted Payments		120
	6.8.	Accounting Methods		121
	6.9.	Investments		121
	6.10.	Transactions with Affiliates		121
	6.11.	Use of Proceeds		122
	6.12.	Limitation on Issuance of Equity Interests		123
	6.13.	Inventory with Bailees		123
	6.14.	Immaterial Subsidiaries		123
	6.15.	Global Holdings and its Subsidiaries		123
	6.16.	Plan of Reorganization Amendment		123

-iii-

TABLE OF CONTENTS

(continued)


			Page
7.	FINANCIAL COVENANTS			123

8.	EVENTS OF DEFAULT			124
	8.1.	Payments		124
	8.2.	Covenants		124
	8.3.	Judgments		125
	8.4.	Voluntary Bankruptcy, etc.		125
	8.5.	Involuntary Bankruptcy, etc.		125
	8.6.	Default Under Other Agreements		125
	8.7.	Representations, etc.		125
	8.8.	Guaranty		126
	8.9.	Security Documents		126
	8.10.	Loan Documents		126
	8.11.	Change of Control		126
	8.12.	Anti-Money Laundering/International Trade Law Compliance		126
	8.13.	Seizures		126

9.	RIGHTS AND REMEDIES			126
	9.1.	Rights and Remedies		126
	9.2.	Remedies Cumulative		127

10.	WAIVERS; INDEMNIFICATION			127
	10.1.	Demand; Protest; etc.		127
	10.2.	The Lender Group’s Liability for Collateral		128
	10.3.	Indemnification		128

11.	NOTICES			129

12.	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION			130

13.	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS			132
	13.1.	Assignments and Participations		132
	13.2.	Successors		136

14.	AMENDMENTS; WAIVERS			137
	14.1.	Amendments and Waivers		137
	14.2.	Replacement of Certain Lenders		139
	14.3.	No Waivers; Cumulative Remedies		139

-iv-

TABLE OF CONTENTS

(continued)


			Page
15.	AGENT; THE LENDER GROUP			140
	15.1.	Appointment and Authorization of Agent		140
	15.2.	Delegation of Duties		141
	15.3.	Liability of Agent		141
	15.4.	Reliance by Agent		141
	15.5.	Notice of Default or Event of Default		142
	15.6.	Credit Decision		142
	15.7.	Costs and Expenses; Indemnification		143
	15.8.	Agent in Individual Capacity		143
	15.9.	Successor Agent		144
	15.10.	Lender in Individual Capacity		144
	15.11.	Collateral Matters		145
	15.12.	Restrictions on Actions by Lenders; Sharing of Payments		147
	15.13.	Agency for Perfection		147
	15.14.	Payments by Agent to the Lenders		148
	15.15.	Concerning the Collateral and Related Loan Documents		148
	15.16.	Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information		148
	15.17.	Several Obligations; No Liability		149
	15.18.	No Reliance on Agent’s Customer Identification Program		149

16.	WITHHOLDING TAXES			150
	16.1.	Payments		150
	16.2.	Exemptions		150
	16.3.	Reductions		152
	16.4.	Refunds		153

17.	GENERAL PROVISIONS			154
	17.1.	Effectiveness		154
	17.2.	Section Headings		154
	17.3.	Interpretation		154
	17.4.	Severability of Provisions		154
	17.5.	Bank Product Providers		154
	17.6.	Debtor-Creditor Relationship		155
	17.7.	Counterparts; Electronic Execution		155
	17.8.	Revival and Reinstatement of Obligations; Certain Waivers		155
	17.9.	Confidentiality		156
	17.10.	Survival		158
	17.11.	[Intentionally Omitted]		158

-v-

TABLE OF CONTENTS

(continued)


		Page
17.12.	Integration		158
17.13.	Parent as Agent for Borrowers		158
17.14.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions		159
17.15.	Intercreditor Agreement		160
17.16.	Certifications From Banks and Participants; USA PATRIOT Act		160
17.17.	Anti-Terrorism Laws Agreement		160

-vi-

EXHIBITS AND SCHEDULES


Exhibit A-1		Form of Assignment and Acceptance
Exhibit B-1		Form of Borrowing Base Certificate
Exhibit B-2		Form of Bank Product Provider Agreement
Exhibit C-1		Form of Compliance Certificate
Exhibit G		Form of Intercompany Note
Exhibit J-1		Form of Joinder
Exhibit L-1		Form of LIBOR Notice
Exhibit P-1		Form of Perfection Certificate

Schedule A-1		Agent’s Account
Schedule A-2		Authorized Persons
Schedule C		Commitments
Schedule D		Designated Account
Schedule E		Existing Letters of Credit
Schedule P-1		Permitted Investments
Schedule P-2		Permitted Liens
Schedule 1.1(c)		Existing Intercompany Notes
Schedule 3.6		Conditions Subsequent
Schedule 4.1(b)		Capitalization of Borrowers
Schedule 4.1(c)		Capitalization of Borrowers’ Subsidiaries
Schedule 4.1(d)		Subscriptions, Options, Warrants, Calls
Schedule 4.6(b)		Litigation
Schedule 4.11		Environmental Matters
Schedule 4.14		Indebtedness
Schedule 4.25		Location of Inventory
Schedule 4.28		Material Contracts
Schedule 5.1		Financial Statements, Reports, Certificates
Schedule 5.2		Collateral Reporting
Schedule 6.5		Nature of Business
Schedule 6.10		Transactions with Affiliates

-vii-

CREDIT AGREEMENT

THIS CREDIT AGREEMENT, is entered into as of May 29, 2020 by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender”, as that term is hereinafter further defined), PNC BANK, NATIONAL ASSOCIATION, a national banking association (“PNC)”, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”), PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole lead arranger (in such capacity, together with its successors and assigns in such capacity, the “Sole Lead Arranger”), PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole book runner (in such capacity, together with its successors and assigns in such capacity, the “Sole Book Runner”), PIONEER ENERGY SERVICES CORP., a Texas corporation (“Parent”), the Subsidiaries of Parent identified on the signature pages hereof as “Borrowers”, and those additional entities that hereafter become parties hereto as Borrowers in accordance with the terms hereof by executing the form of Joinder attached hereto as Exhibit J-1 (together with Parent, each, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”).

WHEREAS, On March 3, 2020 the Borrowers and certain of their Affiliates (the”Debtors”) filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code, which petition is identified as Bankruptcy Case No. 20-31425 (jointly administered) (collectively, the “Case”) before the United States Bankruptcy Court for the Southern District of Texas, Houston Division (together any other court having jurisdiction over the Case, the “Bankruptcy Court”);

WHEREAS, on May 11, 2020, the Bankruptcy Court entered that certain Findings Of Fact, Conclusions Of Law, And Order Approving the Debtors’ Disclosure Statement and Confirming the Debtors’ Joint Prepackaged Chapter 11 Plan of Reorganization (the “Confirmation Order”), confirming the joint plan of reorganization for the Debtors (together with all exhibits, schedules, annexes, supplements and other attachments thereto, and, as amended, waived, modified or supplemented from time to time, the “Plan of Reorganization”); and

WHEREAS, in connection with the consummation of the transactions contemplated by the Plan of Reorganization, the Borrowers have requested that the Lenders extend credit in the form of Loans and Letters of Credit as set forth herein.

NOW, THEREFORE, the parties agree as follows:

1.	DEFINITIONS AND CONSTRUCTION.

1.1. Definitions. As used in this Agreement, the following terms shall have the following definitions:

-1-

“2014 Notes” means the Senior Unsecured Notes issued by the Borrower pursuant to the Indenture dated as of March 18, 2014 (and any supplements thereto) in the aggregate original principal amount of $300,000,000 (together with notes of such series issued in substitution or exchange therefor; provided that the aggregate principal amount thereof is not increased).

“ABL Priority Collateral” has the meaning ascribed thereto in the Intercreditor Agreement.

“Acceptable Appraisal” means, with respect to an appraisal of Inventory, the most recent appraisal of such property received by Agent (a) from an appraisal company reasonably satisfactory to Agent (it being acknowledged and agreed that Hilco Appraisal Services is satisfactory to Agent) and (b) the scope and methodology (including, to the extent relevant, any sampling procedure employed by such appraisal company) of which are satisfactory to Agent.

“Acceptable Security Interest” means a security interest which (a) exists in favor of Agent, for the benefit of the Lender Group and the Bank Product Providers, (b) secures the Obligations, (c) is enforceable against the Loan Party which created such security interest and (d) upon the filing of appropriate financing statements and/or the completion of other actions as required under the UCC and any other applicable law, is perfected.

“Account” means an account (as that term is defined in the Code).

“Account Debtor” means any Person who is obligated on an Account, chattel paper, or a general intangible.

“Account Party” has the meaning specified therefor in Section 2.11(h) of this Agreement.

“Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of Certified Public Accountants (or successor thereto or any agency with similar functions).

“Acquisition” means the purchase by the Parent or any Subsidiary of (a) all or substantially all of the assets of (or any division, business unit or business line of) any other Person, (b) all of the Equity Interests of any other Person (including any such purchase accomplished by means of a merger or consolidation).

“Additional Documents” has the meaning specified therefor in Section 5.12 of this Agreement.

“Additional Notes Collateral Debt” means Indebtedness in an aggregate principal amount outstanding at any time not to exceed $10,000,000, so long as such Indebtedness is (i) issued on terms substantially similar (but no less favorable to the Borrowers) to the Indebtedness issued under the Senior Secured Notes Documents (it being understood that such Indebtedness may be in the form of loans or notes) and (ii) subject to the terms and conditions of the Intercreditor Agreement.

-2-

“Additional Notes Collateral Debt Documents” means the loan or notes documents in form and substance substantially similar (but no less favorable to the Borrowers) to the Senior Secured Notes Documents executed at any time in connection with the Additional Notes Collateral Debt, as each document may be amended, restated, supplemented or otherwise modified from time to time.

“Administrative Borrower” has the meaning specified therefor in Section 17.13 of this Agreement.

“Administrative Questionnaire” has the meaning specified therefor in Section 13.1(a) of this Agreement.

“Affected Lender” has the meaning specified therefor in Section 2.15(b) of this Agreement.

“Affiliate” means, as applied to any Person, any other Person who controls, is controlled by, or is under common control with, such Person. For purposes of this definition, “control” means the possession, directly or indirectly through one or more intermediaries, of the power to direct the management and policies of a Person, whether through the ownership of Equity Interests, by contract, or otherwise; provided, that for purposes of the definition of Eligible Accounts and Section 6.10 of this Agreement: (a) any Person which owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of directors or other members of the governing body of a Person or 10% or more of the partnership or other ownership interests of a Person (other than as a limited partner of such Person) shall be deemed an Affiliate of such Person, (b) each director (or comparable manager) of a Person shall be deemed to be an Affiliate of such Person, and (c) each partnership in which a Person is a general partner shall be deemed an Affiliate of such Person.

“Agent” has the meaning specified therefor in the preamble to this Agreement.

“Agent-Related Persons” means Agent, together with its Affiliates, officers, directors, employees, attorneys, and agents.

“Agent’s Account” means the Deposit Account of Agent identified on Schedule A-1 to this Agreement (or such other Deposit Account of Agent that has been designated as such, in writing, by Agent to Borrowers and the Lenders).

“Agent’s Liens” means the Liens granted by each Loan Party or its Subsidiaries to Agent under the Loan Documents and securing the Obligations.

“Agreement” means this Credit Agreement, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.

-3-

“Alternate Source” has the meaning specified in the definition of Overnight Bank Funding Rate.

“Anti-Corruption Laws” means the FCPA, the U.K. Bribery Act of 2010, as amended, and all other applicable laws and regulations or ordinances concerning or relating to bribery, money laundering or corruption in any jurisdiction in which any Loan Party or any of its Subsidiaries or Affiliates is located or is doing business.

“Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions programs and embargoes, import/export licensing, money laundering or bribery, and any regulation, order, or directive promulgated, issued or enforced pursuant to such laws, all as amended, supplemented or replaced from time to time.

“Applicable Margin” means, as of any date of determination and with respect to Base Rate Loans or LIBOR Rate Loans, as applicable, the applicable margin set forth in the following table that corresponds to the Average Excess Availability of Borrowers for the most recently completed calendar quarter; provided, that for the first two fiscal quarters ending following the Closing Date, the Applicable Margin shall only be set at “Level II” or “Level III”:


Level	Average Excess Availability	Applicable Margin for Base Rate Loans			Applicable Margin for LIBOR Rate Loans
I	> equal to 66.7% of the Commitments		0.75	%		1.75	%
II	< 66.67% and > 33.33% of the Commitments		1.00	%		2.00	%
III	< 33.33% of the Commitments		1.25	%		2.25	%

“Application Event” means the occurrence of (a) a failure by Borrowers to repay all of the Obligations in full on the Maturity Date, or (b) an Event of Default and the election by Agent or the Required Lenders to require that payments and proceeds of Collateral be applied pursuant to Section 2.4(b)(iii) of this Agreement.

“Assignee” has the meaning specified therefor in Section 13.1(a) of this Agreement.

“Assignment and Acceptance” means an Assignment and Acceptance Agreement substantially in the form of Exhibit A-1 to this Agreement.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP in all material respects, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

-4-

“Authorized Person” means any one of the individuals identified as an officer of a Borrower on Schedule A-2 to this Agreement, or any other individual identified by Administrative Borrower as an authorized person and authenticated through Agent’s electronic platform or portal in accordance with its procedures for such authentication.

“Availability” means, as of any date of determination, the amount that Borrowers are entitled to borrow as Revolving Loans under Section 2.1 of this Agreement (after giving effect to the then outstanding Revolver Usage).

“Average Excess Availability” means, with respect to any period, the sum of the aggregate amount of Excess Availability for each day in such period (as calculated by Agent as of the end of each respective day) divided by the number of days in such period.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Bank Product” means any one or more of the following financial products or accommodations extended to any Loan Party by a Bank Product Provider: (a) credit cards (including commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”)), (b) payment card processing services, (c) debit cards, (d) stored value cards, (e) Cash Management Services, or (f) transactions under Hedge Agreements.

“Bank Product Agreements” means those agreements entered into from time to time by any Loan Party with a Bank Product Provider in connection with the obtaining of any of the Bank Products.

“Bank Product Collateralization” means providing cash collateral (pursuant to documentation reasonably satisfactory to Agent) to be held by Agent for the benefit of the Bank Product Providers (other than the Hedge Providers) in an amount determined by Agent as sufficient to satisfy the reasonably estimated credit exposure, operational risk or processing risk with respect to the then existing Bank Product Obligations (other than Hedge Obligations).

“Bank Product Obligations” means (a) all obligations, liabilities, reimbursement obligations, fees, or expenses owing by each Loan Party and its Subsidiaries to any Bank Product Provider pursuant to or evidenced by a Bank Product Agreement and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due,

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now existing or hereafter arising, (b) all Hedge Obligations, and (c) all amounts that Agent or any Lender is obligated to pay to a Bank Product Provider as a result of Agent or such Lender purchasing participations from, or executing guarantees or indemnities or reimbursement obligations to, a Bank Product Provider with respect to the Bank Products provided by such Bank Product Provider to a Loan Party or its Subsidiaries.

“Bank Product Provider” means any Lender or any of its Affiliates, including each of the foregoing in its capacity, if applicable, as a Hedge Provider; provided, that no such Person (other than PNC or its Affiliates) shall constitute a Bank Product Provider with respect to a Bank Product unless and until Agent receives a Bank Product Provider Agreement from such Person (a) on or prior to the Closing Date (or such later date as Agent shall agree to in writing in its sole discretion) with respect to Bank Products provided on or prior to the Closing Date, or (b) on or prior to the date that is 10 days after the provision of such Bank Product to a Loan Party or its Subsidiaries (or such later date as Agent shall agree to in writing in its sole discretion) with respect to Bank Products provided after the Closing Date; provided further, that if, at any time, a Lender ceases to be a Lender under this Agreement (prior to the payment in full of the Obligations), then, from and after the date on which it so ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Bank Product Providers and the obligations with respect to Bank Products provided by such former Lender or any of its Affiliates shall no longer constitute Bank Product Obligations.

“Bank Product Provider Agreement” means an agreement in substantially the form attached hereto as Exhibit B-2 to this Agreement, in form and substance satisfactory to Agent, duly executed by the applicable Bank Product Provider, the applicable Loan Parties, and Agent.

“Bank Product Reserves” means, as of any date of determination, those reserves that Agent deems necessary or appropriate to establish (based upon the Bank Product Providers’ determination of the liabilities and obligations of each Loan Party and its Subsidiaries in respect of Bank Product Obligations) in its Permitted Discretion in respect of Bank Products then provided or outstanding.

“Bankruptcy Code” means title 11 of the United States Code, as in effect from time to time.

“Bankruptcy Court” has the meaning specified therefor in the preamble to this Agreement.

“Base Rate” shall mean, for any day, a rate per annum equal to the highest of (a) the PNC Base Rate in effect on such day, (b) the sum of the Overnight Bank Funding Rate in effect on such day plus one half of one percent (0.5%), and (c) the sum of the Daily LIBOR Rate in effect on such day plus one percent (1.0%), so long as a Daily LIBOR Rate is offered, ascertainable and not unlawful. Any change in the Base Rate (or any component thereof) shall take effect at the opening of business on the day such change occurs.

“Base Rate Loan” means each portion of the Revolving Loans that bears interest at a rate determined by reference to the Base Rate.

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“Benchmark Replacement” means the sum of: (a) the alternate benchmark rate that has been selected by Agent and Borrowers giving due consideration to (i) any selection or recommendation of a replacement rate or the mechanism for determining such a rate by the Relevant Governmental Authority or (ii) any evolving or then-prevailing market convention for determining a rate of interest as a replacement to the LIBOR Rate for U.S. dollar-denominated credit facilities and (b) the Benchmark Replacement Adjustment; provided that, if the Benchmark Replacement as so determined would be less than zero, the Benchmark Replacement will be deemed to be zero for the purposes of this Agreement.

“Benchmark Replacement Adjustment” means, with respect to any replacement of the LIBOR Rate with an alternate benchmark rate for each applicable Interest Period, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by Agent and Borrowers (a) giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of the LIBOR Rate with the applicable Benchmark Replacement (excluding such spread adjustment) by the Relevant Governmental Authority or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for such replacement of the LIBOR Rate for U.S. dollar denominated credit facilities at such time and (b) which may also reflect adjustments to account for (i) the effects of the transition from the LIBOR Rate to the Benchmark Replacement and (ii) yield- or risk-based differences between the LIBOR Rate and the Benchmark Replacement.

“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Base Rate,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest and other administrative matters) that Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by Agent in a manner substantially consistent with market practice (or, if Agent decides that adoption of any portion of such market practice is not administratively feasible or if Agent determines that no market practice for the administration of the Benchmark Replacement exists, in such other manner of administration as Agent decides is reasonably necessary in connection with the administration of this Agreement).

“Benchmark Replacement Date” means the earlier to occur of the following events with respect to the LIBOR Rate:

(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of the LIBOR Rate permanently or indefinitely ceases to provide the LIBOR Rate; or

(2) in the case of clause (3) of the definition of “Benchmark Transition Event,” the date of the public statement or publication of information referenced therein.

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“Benchmark Transition Event” means the occurrence of one or more of the following events with respect to the LIBOR Rate:

(1) a public statement or publication of information by or on behalf of the administrator of the LIBOR Rate announcing that such administrator has ceased or will cease to provide the LIBOR Rate, permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR Rate;

(2) a public statement or publication of information by a Governmental Authority having jurisdiction over Agent, the regulatory supervisor for the administrator of the LIBOR Rate, the U.S. Federal Reserve System, an insolvency official with jurisdiction over the administrator for the LIBOR Rate, a resolution authority with jurisdiction over the administrator for the LIBOR Rate or a court or an entity with similar insolvency or resolution authority over the administrator for the LIBOR Rate, which states that the administrator of the LIBOR Rate has ceased or will cease to provide the LIBOR Rate permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the LIBOR Rate; or

(3) a public statement or publication of information by the regulatory supervisor for the administrator of the LIBOR Rate or a Governmental Authority having jurisdiction over Agent announcing that the LIBOR Rate is no longer representative.

“Benchmark Unavailability Period” means, if a Benchmark Transition Event and its related Benchmark Replacement Date have occurred with respect to the LIBOR Rate and solely to the extent that the LIBOR Rate has not been replaced with a Benchmark Replacement, the period (x) beginning at the time that such Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the LIBOR Rate for all purposes hereunder in accordance with Section 2.14 and (y) ending at the time that a Benchmark Replacement has replaced the LIBOR Rate for all purposes hereunder pursuant to Section 2.14.

“Beneficial Owner” means, for each Borrower, each of the following: (a) each individual, if any, who, directly or indirectly, owns 25% or more of such Borrower’s Equity Interests; and (b) a single individual with significant responsibility to control, manage, or direct such Borrower.

“Benefit Plan” means an employee benefit plan (other than a Multiemployer Plan) maintained for employees of any Loan Party or Subsidiary thereof or any ERISA Affiliate and covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the IRC.

“Board of Directors” means, as to any Person, the board of directors (or comparable managers) of such Person, or any committee thereof duly authorized to act on behalf of the board of directors (or comparable managers).

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“Board of Governors” means the Board of Governors of the Federal Reserve System of the United States (or any successor).

“Borrower” and “Borrowers” have the respective meanings specified therefor in the preamble to this Agreement.

“Borrower Materials” has the meaning specified therefor in Section 17.9(c) of this Agreement.

“Borrowing” means a borrowing consisting of Revolving Loans made on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by Agent in the case of an Extraordinary Advance.

“Borrowing Base” means, as of any date of determination, the result of:

(a) the sum of (i) 90% of the amount of Eligible Billed Accounts then qualifying as Investment Grade Accounts, plus (ii) 85% of the amount of Eligible Billed Accounts which are non-Investment Grade Accounts, plus (iii) 85% of Eligible Unbilled Accounts (provided, such amount shall not exceed $10,000,000 at any time); less (iv) the amount, if any, of the Dilution Reserve, plus

(b) the lesser of (A) the product of 70% multiplied by the value (calculated at the book value on a basis consistent with Borrowers’ historical accounting practices) of Eligible Inventory at such time, and (B) the product of 85% multiplied by the Net Recovery Percentage identified in the most recent Acceptable Appraisal of Inventory, multiplied by the value (calculated at the book value on a basis consistent with Borrowers’ historical accounting practices) of Eligible Inventory (such determination may be made as to different categories of Eligible Inventory based upon the Net Recovery Percentage applicable to such categories) at such time (provided, in each case, such amount shall not exceed $3,750,000 at any time), minus

(c) the aggregate amount of Reserves, if any, established by Agent from time to time under Section 2.1(c) of this Agreement.

“Borrowing Base Certificate” means a certificate in the form of Exhibit B-1 to this Agreement.

“Borrowing Request” has the meaning specified therefor in Section 2.3 of this Agreement.

“Business Day” means any day other than Saturday or Sunday or a legal holiday on which commercial banks are authorized or required by law to be closed for business in East Brunswick, New Jersey and, if the applicable Business Day relates to any LIBOR Rate Loans, such day must also be a day on which dealings are carried on in the London interbank market.

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“Capital Expenditures” means, with respect to any Person for any period, the amount of all expenditures by such Person and its Subsidiaries during such period that are capital expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or financed, but excluding, without duplication (a) with respect to the purchase price of assets that are purchased substantially contemporaneously with the trade-in of existing assets during such period, the amount that the gross amount of such purchase price is reduced by the credit granted by the seller of such assets for the assets being traded in at such time and (b) expenditures made during such period to consummate one or more Permitted Acquisitions.

“Capital Lease” means a lease that is required to be capitalized for financial reporting purposes in accordance with GAAP; provided that, any lease that was treated as an operating lease under GAAP at the time it was entered into and that later becomes a capital lease (or is treated for accounting purposes substantially similar to that of a capital lease) as a result of the change in GAAP that occurs during the life of such lease, including any renewals, shall be treated as an operating lease for all purposes under this Agreement.

“Capitalized Lease Obligation” means that portion of the obligations under a Capital Lease that is required to be capitalized in accordance with GAAP.

“Case” has the meaning specified therefor in the preamble to this Agreement.

“Cash Management Services” means any cash management or related services including treasury, depository, return items, overdraft, controlled disbursement, merchant store value cards, e-payables services, electronic funds transfer, interstate depository network, automatic clearing house transfer (including the Automated Clearing House processing of electronic funds transfers through the direct Federal Reserve Fedline system) and other customary cash management arrangements.

“Certificated Equipment” means any Equipment the ownership of which is evidenced by, or under applicable Legal Requirement, is required to be evidenced by, a certificate of title.

“Certificate of Beneficial Ownership” means, for each Borrower, a certificate in form and substance acceptable to Agent (as amended or modified by Agent from time to time in its sole discretion), certifying, among other things, the Beneficial Owner of such Borrower.

“CFC” means a controlled foreign corporation (as that term is defined in the IRC) in which any Loan Party is a “United States shareholder” within the meaning of Section 951(b) of the IRC.

“CFTC” shall mean the Commodity Futures Trading Commission.

“Change in Law” means the occurrence after the date of this Agreement of: (a) the adoption or effectiveness of any law, rule, regulation, judicial ruling, judgment or treaty, (b) any change in any law, rule, regulation, judicial ruling, judgment or treaty or in the administration, interpretation, implementation or application by any Governmental Authority of any law, rule, regulation, guideline or treaty, or (c) the making or issuance by any Governmental Authority of any request, rule, guideline or directive, whether or not having the force of law; provided, that

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notwithstanding anything in this Agreement to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith, and (ii) all requests, rules, guidelines or directives concerning capital adequacy promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities shall, in each case, be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“Change of Control” means that an event or series of events by which (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the equity securities of the Parent entitled to vote for members of the board of directors or equivalent governing body of the Parent on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right), or (b) the Parent sells or otherwise Disposes of all or substantially all of the assets of the Loan Parties; provided that in no event shall the consummation of the transactions contemplated by the Transaction Agreement (including pursuant to the securities purchase agreement referred to therein) constitute a Change of Control and, provided, further, that no stockholders of the Parent on the Closing Date (after giving effect to the transactions contemplated by the Transaction Agreement) shall constitute a “group” for purposes of this definition solely by virtue of the voting agreements among, or commonality of interests of, such stockholders in bankruptcy proceedings with respect to the Parent immediately prior to the Closing Date.

“CIP Regulations” shall have the meaning set forth in Section 15.18 hereof.

“Closing Date” shall mean May 29, 2020.

“Code” means the New York Uniform Commercial Code, as in effect from time to time.

“Collateral” means all assets and interests in assets and proceeds thereof now owned or hereafter acquired by any Loan Party or its Subsidiaries in or upon which a Lien is granted by such Person in favor of Agent or the Lenders under any of the Loan Documents.

“Collateral Access Agreement” means a landlord waiver, bailee letter, or acknowledgement agreement of any lessor, warehouseman, processor, consignee, or other Person in possession of, having a Lien upon, or having rights or interests in any Loan Party’s or its Subsidiaries’ books and records, Equipment, or Inventory, in each case, in form and substance reasonably satisfactory to Agent.

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“Colombian Group” means, collectively, (i) Pioneer Latina Group SDAD, Ltda., a Panama corporation, (ii) Pioneer de Colombia SDAD, Ltda., a Panama corporation, (iii) Pioneer de Colombia SDAD, Ltd. (Colombia branch), (iv) Proveedora Internacional de Taladros S.A.S. and (v) Subsidiaries of the foregoing.

“Commitment” means, with respect to each Lender, its Revolver Commitment, and, with respect to all Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Lender’s name under the applicable heading on Schedule C to this Agreement or in the Assignment and Acceptance pursuant to which such Lender became a Lender under this Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of this Agreement.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate substantially in the form of Exhibit C-1 to this Agreement delivered by the chief financial officer or treasurer of Parent to Agent.

“Confidential Information” has the meaning specified therefor in Section 17.9(a) of this Agreement.

“Confirmation Order” has the meaning specified therefor in the preamble to this Agreement.

“Control Agreement” means a control agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by a Loan Party or one of its Subsidiaries, Agent, and the applicable securities intermediary (with respect to a Securities Account) or bank (with respect to a Deposit Account).

“Convertible Notes” means the $129,771,000 in aggregate principal amount of the Parent’s 5.00% Convertible Senior Unsecured PIK Notes due 2025, as such amount may be increased by the issuance of additional PIK Notes, as defined in the Convertible Notes Indenture as in effect on the date of this Agreement and as such Convertible Notes Indenture may be amended, restated, supplemented, refinanced, extended or otherwise modified in accordance with Section 6.6(b)(iii).

“Convertible Notes Documents” means the Convertible Notes Indenture and the other documents executed at any time in connection with the Convertible Notes Indenture, as each document may be amended, restated, supplemented or otherwise modified from time to time.

“Convertible Notes Indenture” means the Indenture relating to the Convertible Notes dated as of May 29, 2020, between the Parent and Wilmington Trust, National Association, as trustee and conversion agent, as such document may be amended, restated, supplemented or otherwise modified from time to time.

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“Convertible Notes Guaranty” means each guaranty by one or more of the Loan Parties of the Parent’s obligations in respect of the Convertible Notes.

“Copyright Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

“Covenant Satisfaction Event” shall mean the earliest date on which all of the following conditions precedent have been satisfied: (a) if the Covenant Trigger Event shall have occurred as a result of the occurrence of an Event of Default, such Event of Default shall have been waived in writing by Agent and all of the Required Lenders and (b) if the Covenant Trigger Event shall have occurred as a result of the Borrowers’ failure to maintain Excess Availability equal to or greater than the greater of (x) 15% of the Maximum Revolver Amount and (y) $9,375,000, Excess Availability is equal to or greater than the greater of (x) 15% of the Maximum Revolver Amount or (y) $9,375,000 for 45 consecutive days.

“Covenant Testing Period” means a period commencing on the last day of the fiscal month of Parent most recently ended prior to a Covenant Trigger Event for which Borrowers are required to deliver to Agent monthly, quarterly or annual financial statements pursuant to Schedule 5.1 to this Agreement and ending on the occurrence of a Covenant Satisfaction Event.

“Covenant Trigger Event” means the occurrence of either of the following: (A) the occurrence and continuance of any Event of Default, or (B) Excess Availability at any time is less than the greater of (x) 15% of the Maximum Revolver Amount or (y) $9,375,000.

“Covered Entity” means (a) each Borrower, each of Borrower’s Subsidiaries, all Guarantors and all pledgors of Collateral and (b) each Person that, directly or indirectly, is in control of a Person described in clause (a) above. For purposes of this definition, control of a Person shall mean the direct or indirect (x) ownership of, or power to vote, 25% or more of the issued and outstanding equity interests having ordinary voting power for the election of directors of such Person or other Persons performing similar functions for such Person, or (y) power to direct or cause the direction of the management and policies of such Person whether by ownership of equity interests, contract or otherwise.

“Daily LIBOR Rate” shall mean, for any day, the rate per annum determined by Agent by dividing (x) the Published Rate by (y) a number equal to 1.00 minus the Reserve Percentage.

“Debtors” has the meaning specified therefor in the preamble to this Agreement.

“Default” means an event, condition, or default that, with the giving of notice, the passage of time, or both, would be an Event of Default.

“Defaulting Lender” means any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies Agent and Administrative Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding

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(each of which conditions precedent, together with any applicable Default or Event of Default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to Agent, Issuing Bank, or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two Business Days of the date when due, (b) has notified any Borrower, Agent or Issuing Bank in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable Default or Event of Default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by Agent or Administrative Borrower, to confirm in writing to Agent and Administrative Borrower that it will comply with its prospective funding obligations hereunder (provided, that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by Agent and Administrative Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of any Insolvency Proceeding, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided, that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to Administrative Borrower, Issuing Bank, and each Lender.

“Defaulting Lender Rate” means (a) for the first three days from and after the date the relevant payment is due, the Base Rate, and (b) thereafter, the interest rate then applicable to Revolving Loans that are Base Rate Loans (inclusive of the Applicable Margin applicable thereto).

“Deposit Account” means any deposit account (as that term is defined in the Code).

“Designated Account” means the Deposit Account of Administrative Borrower identified on Schedule D to this Agreement (or such other Deposit Account of Administrative Borrower located at the Designated Account Bank that has been designated as such, in writing, by the Administrative Borrower to Agent).

“Designated Account Bank” has the meaning specified therefor in Schedule D to this Agreement (or such other bank that is located within the United States that has been designated as such, in writing, by the Administrative Borrower to Agent).

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“Dilution” means, as of any date of determination, a percentage, based upon the experience of the immediately prior twelve months, that is the result of dividing the Dollar amount of (a) bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to Borrowers’ Accounts during such period, by (b) Borrowers’ billings with respect to Accounts during such period.

“Dilution Reserve” means, as of any date of determination, an amount sufficient to reduce the advance rate against Eligible Accounts by the extent to which Dilution is in excess of 5%.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any Property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interests into which they are convertible or for which they are exchangeable), or upon the happening of any event or condition (a) matures or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provide for the scheduled payments of dividends in cash, or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 180 days after the Maturity Date.

“Disqualified Institution” means, on any date, any Person designated by Administrative Borrower as a “Disqualified Institution” by written notice delivered to Agent prior to the date hereof; provided, that “Disqualified Institutions” shall exclude any Person that Administrative Borrower has designated as no longer being a “Disqualified Institution” by written notice delivered to Agent from time to time.

“Disregarded Domestic Person” means any direct or indirect Domestic Subsidiary that is treated as a disregarded entity for U.S. federal income Tax purposes, if it holds no assets (excluding de minimis assets) other than the equity of one or more direct or indirect Foreign Subsidiaries that are CFCs, FSHCs or other Disregarded Domestic Persons.

“Dollars” or “$” means United States dollars.

“Domestic Subsidiary” means any Subsidiary of any Loan Party that is not a Foreign Subsidiary.

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“Drawing Document” means any Letter of Credit or other document presented for purposes of drawing under any Letter of Credit, including by electronic transmission such as SWIFT, electronic mail, facsimile or computer generated communication.

“Early Opt-in Event” means a determination by Agent that U.S. dollar denominated credit facilities being executed at such time, or that include language similar to that contained in Section 2.14, are being executed or amended, as applicable, to incorporate or adopt a new benchmark interest rate to replace the LIBOR Rate.

“Earn-Outs” means unsecured liabilities of a Loan Party arising under an agreement to make any deferred payment as a part of the Purchase Price for a Permitted Acquisition, including performance bonuses or consulting payments in any related services, employment or similar agreement, in an amount that is subject to or contingent upon the revenues, income, cash flow or profits (or the like) of the target of such Permitted Acquisition.

“EBITDA” means, without duplication, for the Parent and its consolidated Subsidiaries, for any period, the amount equal to: (a) the Parent’s consolidated Net Income for such period plus (b) to the extent deducted in determining the Parent’s consolidated Net Income, (i) Interest Expense, (ii) federal, state, local and foreign income Taxes (whether or not deferred), (iii) depreciation, (iv) amortization, (v) all other non-cash charges (including for the avoidance of doubt non-cash losses from a sale, exchange, retirement or other disposition of a rig), (vi) cash transaction expenses incurred in connection with, to the extent permitted hereunder, any Investment, Acquisition or Disposition in an aggregate amount not to exceed 10% of EBITDA prior to giving effect to such cash transaction expenses, in each case, for such period, (vii) any non-recurring, non-cash charges relating to any premium or penalty paid, write off of deferred finance costs or other charges in connection with redeeming or retiring any Indebtedness prior to its stated maturity, (viii) unrealized losses resulting from mark to market accounting for hedging activities, including, without limitation those resulting from the application of FASB Accounting Standards Codification 815 (“FASB ASC 815”), (ix) unrealized non-cash losses resulting from foreign currency balance sheet adjustments required by GAAP, (x) other extraordinary or non-recurring expenses and restructuring charges of the Parent and its consolidated Subsidiaries reducing such Net Income which do not represent a cash item in such period, (xi) non-cash expenses associated with discontinuation of foreign operations, (xii) impairment and other non-cash items (other than write-downs of current assets) of the Parent and its consolidated Subsidiaries for such period (excluding any such non-cash item to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period), and (xiii) other extraordinary or non-recurring professional costs and expenses of the Parent and its consolidated Subsidiaries incurred prior to the Closing Date and within 90 days thereafter reducing such Net Income related to the Case in an aggregate amount not to exceed $40,000,000 in such period, minus (c) to the extent included in determining Parent’s consolidated Net Income, non-cash gains from a sale, exchange, retirement or other disposition of Property. In addition, notwithstanding the foregoing, the amount of positive EBITDA attributable to Foreign Subsidiaries, Immaterial Subsidiaries and any other Subsidiaries that are not Loan Parties during any calculation period, to the extent such amount exceeds 10% of EBITDA of the Loan Parties and their Subsidiaries on a consolidated basis for such calculation period, shall be disregarded for purposes of calculating the Fixed Charge Coverage Ratio.

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“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Eligibility Date” shall mean, with respect to each Loan Party and each Swap Obligation, the date on which this Agreement or any other Loan Document becomes effective with respect to such Swap Obligation (for the avoidance of doubt, the Eligibility Date shall be the effective date of such Swap Obligation if this Agreement or any other Loan Document is then in effect with respect to such Loan Party, and otherwise it shall be the effective date of this Agreement and/or such other Loan Documents to which such Loan Party is a party).

“Eligible Accounts” means Eligible Billed Accounts and Eligible Unbilled Accounts.

“Eligible Billed Accounts” means those Accounts created by a Borrower in the ordinary course of its business, that arise out of such Borrower’s sale of goods or rendition of services, that comply with each of the representations and warranties respecting Eligible Accounts made in the Loan Documents, and that are not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any information with respect to the Borrowers’ business or assets of which Agent becomes aware after the Closing Date, including any field examination performed by (or on behalf of) Agent from time to time after the Closing Date. In determining the amount to be included, Eligible Billed Accounts shall be calculated net of customer deposits, unapplied cash, Taxes, finance charges, service charges, discounts, credits, allowances, and rebates. Eligible Billed Accounts shall not include the following:

(a) Accounts that the Account Debtor has failed to pay within 90 days of original invoice date or 60 days of due date,

(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible under clause (a) above,

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(c) Accounts with respect to which the Account Debtor is an Affiliate of any Borrower or an employee or agent of any Borrower or any Affiliate of any Borrower,

(d) Accounts (i) arising in a transaction wherein goods are placed on consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale on approval, a bill and hold, or any other terms by reason of which the payment by the Account Debtor may be conditional, or (ii) with respect to which the payment terms are “C.O.D.”, cash on delivery or other similar terms,

(e) Accounts that are not payable in Dollars,

(f) Accounts with respect to which the Account Debtor either (i) does not maintain its chief executive office in the United States or Canada, or (ii) is not organized under the laws of the United States or Canada or any state or province thereof, or (iii) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof, unless (A) the Account is supported by an irrevocable letter of credit reasonably satisfactory to Agent (as to form, substance, and issuer or domestic confirming bank) that has been delivered to Agent and, if requested by Agent, is directly drawable by Agent, or (B) the Account is covered by credit insurance in form, substance, and amount, and by an insurer, reasonably satisfactory to Agent,

(g) Accounts with respect to which the Account Debtor is either (i) the United States or any department, agency, or instrumentality of the United States (exclusive, however, of Accounts with respect to which Borrowers have complied, to the reasonable satisfaction of Agent, with the Assignment of Claims Act, 31 USC §3727), or (ii) any state of the United States or any other Governmental Authority,

(h) Accounts with respect to which the Account Debtor is a creditor of a Borrower, has or has asserted a right of recoupment or setoff, or has disputed its obligation to pay all or any portion of the Account, to the extent of such claim, right of recoupment or setoff, or dispute,

(i) Accounts with respect to (x) Account Debtors with a rating of Baa3 or higher from Moody’s or a rating of BBB- or higher from S&P whose Eligible Accounts owing to Borrowers exceed 40% or (y) any other Account Debtor whose Eligible Accounts owing to Borrowers exceed 25% (each such percentage, as applied to a particular Account Debtor, being subject to reduction by Agent in its Permitted Discretion if the creditworthiness of such Account Debtor deteriorates) of all Eligible Accounts, to the extent of the obligations owing by such Account Debtor in excess of such applicable percentage; provided, that in each case, the amount of Eligible Accounts that are excluded because they exceed the applicable foregoing percentage shall be determined by Agent based on all of the otherwise Eligible Accounts prior to giving effect to any eliminations based upon the foregoing concentration limits.

(j) Accounts with respect to which the Account Debtor is subject to an Insolvency Proceeding, is not Solvent, has gone out of business, or as to which any Borrower has received notice of an imminent Insolvency Proceeding or a material impairment of the financial condition of such Account Debtor,

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(k) Accounts, the collection of which, Agent, in its Permitted Discretion, believes to be doubtful, including by reason of the Account Debtor’s financial condition,

(l) Accounts that are not subject to a valid and perfected first priority Agent’s Lien,

(m) Accounts with respect to which (i) the goods giving rise to such Account have not been shipped and billed to the Account Debtor, or (ii) the services giving rise to such Account have not been performed and billed to the Account Debtor,

(n) Accounts with respect to which the Account Debtor is a Sanctioned Person,

(o) Accounts (i) that represent the right to receive progress payments or other advance billings that are due prior to the completion of performance by the applicable Borrower of the subject contract for goods or services, or (ii) that represent credit card sales, or

(p) Accounts owned by a target acquired in connection with a Permitted Acquisition or Permitted Investment, or Accounts owned by a Person that is joined to this Agreement as a Borrower pursuant to the provisions of this Agreement, until the completion of a field examination with respect to such Accounts, in each case, satisfactory to Agent in its Permitted Discretion.

“Eligible Contract Participant” shall mean an “eligible contract participant” as defined in the Commodity Exchange Act and regulations thereunder.

“Eligible Inventory” means Inventory of a Borrower, that consists of first quality finished goods held for use or sale in the ordinary course of Borrowers’ business, that complies with each of the representations and warranties respecting Eligible Inventory made in the Loan Documents, and that is not excluded as ineligible by virtue of one or more of the excluding criteria set forth below; provided, that such criteria may be revised from time to time by Agent in Agent’s Permitted Discretion to address the results of any information with respect to the Borrowers’ business or assets of which Agent becomes aware after the Closing Date, including any field examination or appraisal performed or received by Agent from time to time after the Closing Date. In determining the amount to be so included, Inventory shall be valued at the lower of cost or market on a basis consistent with Borrowers’ historical accounting practices. An item of Inventory shall not be included in Eligible Inventory if:

(a) a Borrower does not have good, valid, and marketable title thereto,

(b) a Borrower does not have actual and exclusive possession thereof (either directly or through a bailee or agent of a Borrower),

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(c) it is not located at one of the locations in the continental United States set forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended from time to time with the prior written consent of Agent) (or in-transit from one such location to another such location),

(d) it is stored at locations holding less than $100,000 of the aggregate value of such Borrower’s Inventory,

(e) it is in-transit to or from a location of a Borrower (other than in-transit from one location set forth on Schedule 4.25 to this Agreement to another location set forth on Schedule 4.25 to this Agreement (as such Schedule 4.25 may be amended from time to time with the prior written consent of Agent)),

(f) it is located on real property leased by a Borrower or in a contract warehouse or with a bailee, in each case, unless either (i) it is subject to a Collateral Access Agreement executed by the lessor or warehouseman, as the case may be, and it is segregated or otherwise separately identifiable from goods of others, if any, stored on the premises, or (ii) Agent has established a Landlord Reserve with respect to such location,

(g) it is the subject of a bill of lading or other document of title,

(h) it is not subject to a valid and perfected first priority Agent’s Lien,

(i) it consists of goods returned or rejected by a Borrower’s customers,

(j) it consists of goods that are obsolete, slow moving, spoiled or are otherwise past the stated expiration, “sell-by” or “use by” date applicable thereto, restrictive or custom items or otherwise is manufactured in accordance with customer-specific requirements, work-in-process, raw materials, or goods that constitute spare parts, packaging and shipping materials, supplies used or consumed in Borrowers’ business, bill and hold goods, defective goods, “seconds,” or Inventory acquired on consignment,

(k) it is subject to third party intellectual property, licensing or other proprietary rights, unless Agent is satisfied that such Inventory can be freely sold by Agent on and after the occurrence of an Event of a Default despite such third party rights, or

(l) it was acquired in connection with a Permitted Acquisition or Permitted Investment, or such Inventory is owned by a Person that is joined to this Agreement as a Borrower pursuant to the provisions of this Agreement, until the completion of an Acceptable Appraisal of such Inventory and the completion of a field examination with respect to such Inventory that is satisfactory to Agent in its Permitted Discretion.

“Eligible Transferee” means (a) any Lender (other than a Defaulting Lender), any Affiliate of any Lender and any Related Fund of any Lender; (b) (i) a commercial bank organized under the laws of the United States or any state thereof, and having total assets in excess of $1,000,000,000; (ii) a savings and loan association or savings bank organized under the laws of

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the United States or any state thereof, and having total assets in excess of $1,000,000,000; (iii) a commercial bank organized under the laws of any other country or a political subdivision thereof; provided, that (A) (x) such bank is acting through a branch or agency located in the United States, or (y) such bank is organized under the laws of a country that is a member of the Organization for Economic Cooperation and Development or a political subdivision of such country, and (B) such bank has total assets in excess of $1,000,000,000; (c) any other entity (other than a natural person) that is an “accredited investor” (as defined in Regulation D under the Securities Act) that extends credit or buys loans as one of its businesses including insurance companies, investment or mutual funds and lease financing companies, and having total assets in excess of $1,000,000,000; and (d) during the continuation of an Event of Default, any other Person approved by Agent.

“Eligible Unbilled Accounts” means Accounts of a Borrower arising from the shipment of goods or provision of services to the applicable Account Debtor that qualify as Eligible Billed Accounts except that such Accounts have not yet been billed to the applicable Account Debtor, so long as such Accounts (i) relate to a shipment of goods or provision of services that has been completed in full as of the date of a Borrowing Base Certificate on which such Accounts are first reported (the “EUA First Report Date”), and (ii) shall be billed within 30 days of the EUA First Report Date; provided that an Account shall cease to be an Eligible Unbilled Account upon the date such Account is billed to the applicable Account Debtor. In determining the amount to be included, Eligible Unbilled Accounts shall be calculated as of the last day of the month or week, as applicable, reported on such Borrowing Base Certificate, and net of customer deposits and unapplied cash.

“Employee Benefit Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA, other than a Multiemployer Plan, which provides benefits to any employees of a Loan Party or Subsidiary thereof or to which a Loan Party or Subsidiary thereof has an obligation to make contributions, including as the result of being an ERISA Affiliate.

“Environmental Action” means any written complaint, summons, citation, notice, directive, order, claim, litigation, investigation, judicial or administrative proceeding, judgment, letter, or other written communication from any Governmental Authority, or any third party involving violations of Environmental Laws or releases of Hazardous Materials (a) from any assets, properties, or businesses of any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest, (b) from adjoining properties or businesses, or (c) from or onto any facilities which received Hazardous Materials generated by any Borrower, any Subsidiary of any Borrower, or any of their predecessors in interest.

“Environmental Law” means any applicable federal, state, provincial, foreign or local statute, law, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, or rule of common law now or hereafter in effect and in each case as amended, or any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, in each case, to the extent binding on any Loan Party or its Subsidiaries, relating to the environment, the effect of the environment on employee health, or Hazardous Materials, in each case as amended from time to time.

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“Environmental Liabilities” means all liabilities, monetary obligations, losses, damages, costs and expenses (including all reasonable fees, disbursements and expenses of counsel, experts, or consultants, and costs of investigation and feasibility studies), fines, penalties, sanctions, and interest incurred as a result of any claim or demand, or Remedial Action required, by any Governmental Authority or any third party, and which relate to any Environmental Action.

“Environmental Lien” means any Lien in favor of any Governmental Authority for Environmental Liabilities.

“Equipment” means equipment (as that term is defined in the Code).

“Equity Interests” means, with respect to a Person, all of the shares, options, warrants, interests, participations, or other equivalents (regardless of how designated) of or in such Person, whether voting or nonvoting, including capital stock (or other ownership or profit interests or units), preferred stock, or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the SEC under the Exchange Act).

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto.

“ERISA Affiliate” means (a) any Person subject to ERISA whose employees are treated as employed by the same employer as the employees of any Loan Party or its Subsidiaries under IRC Section 414(b), (b) any trade or business subject to ERISA whose employees are treated as employed by the same employer as the employees of any Loan Party or its Subsidiaries under IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any organization subject to ERISA that is a member of an affiliated service group of which any Loan Party or any of its Subsidiaries is a member under IRC Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC, any Person subject to ERISA that is a party to an arrangement with any Loan Party or any of its Subsidiaries and whose employees are aggregated with the employees of such Loan Party or its Subsidiaries under IRC Section 414(o).

“EUA First Report Date” has the meaning specified in the definition of Eligible Unbilled Accounts.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“Event of Default” has the meaning specified therefor in Section 8 of this Agreement.

“Excepted Certificated Equipment” means (a) each Certificated Equipment owned by a Loan Party (that is not subject to a Permitted Lien securing purchase money Indebtedness or Capital Leases which are permitted hereunder) with an individual net book value of less than $50,000 but not to exceed $10,000,000 in the aggregate, and (b) all Certificated Equipment to the extent such Equipment is subject to a Permitted Lien securing purchase money Indebtedness or Capital Leases which are permitted hereunder.

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“Excepted Liens” means Liens described in clauses (b), (c), (e), (g), (h), (j), (k), (m), (o), (q), (y), (z) of the definition of Permitted Liens.

“Excepted Real Property” means each parcel of Real Property owned by a Loan Party as of the Closing Date that has an individual net book value of less than $5,000,000 but not to exceed $18,000,000 in the aggregate when taken together with all other Real Property constituting “Excepted Real Property.”

“Excess Availability” means, as of any date of determination, the amount equal to Availability.

“Exchange Act” means the Securities Exchange Act of 1934, as in effect from time to time.

“Excluded Subsidiary” means (a) Immaterial Subsidiaries, (b) any Disregarded Domestic Persons, (c) any FSHC and (d) any Foreign Subsidiary of a Loan Party; provided, that notwithstanding the foregoing clauses (a) through (d), any Person that guarantees all or any portion of the obligations under the Senior Secured Notes or the Convertible Notes (or any refinancings thereof permitted hereunder) shall not be an Excluded Subsidiary.

“Excluded Swap Obligation” means, with respect to any Loan Party, any Swap Obligation if, and to the extent that, all or a portion of the guaranty of such Loan Party of (including by virtue of the joint and several liability provisions of Section 2.17), or the grant by such Loan Party of a security interest to secure, such Swap Obligation (or any guaranty thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the guaranty of such Loan Party or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guaranty or security interest is or becomes illegal.

“Excluded Taxes” means (i) any Tax imposed on the net income or net profits of any Lender or any Participant (including any branch profits Taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender or such Participant is organized or the jurisdiction (or by any political subdivision or taxing authority thereof) in which such Lender’s or such Participant’s principal office is located in or as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the Tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under this Agreement or any other Loan Document), (ii) United States federal withholding Taxes that would not have been imposed but for a Lender’s

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or a Participant’s failure to comply with the requirements of Section 16.2 of this Agreement, (iii) any United States federal withholding Taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender (a) becomes a party to this Agreement (other than pursuant to an assignment request by the Loan Party) or (b) designates a new lending office (other than a designation made at the request of a Loan Party), provided, that, Excluded Taxes shall not include any amount of such Taxes that were payable to such Foreign Lender’s assignor immediately before such Foreign Lender became a party to this Agreement or to such Foreign Lender immediately before it designated its new lending office, provided, further, that additional United States federal withholding Taxes that may be imposed after the time such Foreign Lender becomes a party to this Agreement (or designates a new lending office), as a result of a subsequent Change in Law shall not be Excluded Taxes, and (iv) any United States federal withholding Taxes imposed under FATCA.

“Existing DIP Credit Agreement” means that certain Debtor-in-Possession Credit Agreement, dated as of March 3, 2020, by and among the Borrowers, the lenders party thereto and PNC, as administrative agent and collateral agent, as amended, restated, supplemented or otherwise modified from time to time.

“Existing Letters of Credit” means those letters of credit described on Schedule E to this Agreement.

“Existing Term Loan Credit Agreement” means that certain Term Loan Credit Agreement, dated as of November 8, 2017, among Parent, as borrower thereunder, the other borrowers party thereto, Wilmington Trust, National Association, as administrative agent and the lenders from time to time party thereto, as amended, restated, supplemented or otherwise modified from time to time.

“Extraordinary Advances” has the meaning specified therefor in Section 2.3(d)(iii) of this Agreement.

“FATCA” means Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), and (a) any current or future regulations or official interpretations thereof, (b) any agreements entered into pursuant to Section 1471(b)(1) of the IRC, and (c) any intergovernmental agreement entered into by the United States (or any fiscal or regulatory legislation, rules, or practices adopted pursuant to any such intergovernmental agreement entered into in connection therewith).

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.

“Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal to, for each day during such period, the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Agent from three Federal funds brokers of recognized standing selected by it (and, if any such rate is below zero, then the rate determined pursuant to this definition shall be deemed to be zero).

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“Fee Letter” means that certain fee letter, dated as of February 28, 2020, among Borrowers and Agent, in form and substance reasonably satisfactory to Agent.

“Fixed Charges” means, with respect to any fiscal period and with respect to Parent determined on a consolidated basis in accordance with GAAP, the sum, without duplication, of (a) Interest Expense required to be paid (other than interest paid-in-kind, amortization of financing fees, and other non-cash Interest Expense) during such period, (b) scheduled principal payments in respect of Indebtedness that are required to be paid during such period, (c) all federal, state, and local income Taxes required to be paid during such period and (d) all Restricted Payments paid (whether in cash or other property, other than common Equity Interests) during such period. For the purposes of determining Fixed Charges under this Agreement, Fixed Charges for the fiscal quarter ended March 31, 2020 shall be deemed to be $2,342,416, Fixed Charges for the fiscal quarter ended December 31, 2019 shall be deemed to be $2,146,092, Fixed Charges for the fiscal quarter ended September 30, 2019 shall be deemed to be $2,060,732, and Fixed Charges for the fiscal quarter ended June 30, 2019 shall be deemed to be $1,822,514.

“Fixed Charge Coverage Ratio” means, with respect to any fiscal period and with respect to Parent determined on a consolidated basis in accordance with GAAP, the ratio of (a) EBITDA for such period minus Unfinanced Capital Expenditures made (to the extent not already incurred in a prior period) or incurred during such period, to (b) Fixed Charges for such period.

“Flood Insurance Regulations” means, collectively, (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statute thereto, (c) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, (d) the Flood Insurance Reform Act of 2004, (e) the Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto and (f) any regulations promulgated thereunder.

“Flow of Funds Agreement” means a flow of funds agreement, dated as of even date with this Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by Borrowers and Agent.

“Foreign Lender” means any Lender or Participant that is not a United States person within the meaning of IRC section 7701(a)(30).

“Foreign Subsidiary” means any direct or indirect subsidiary of any Loan Party that is organized under the laws of any jurisdiction other than the United States, any state thereof or the District of Columbia.

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“FSHC” means a Domestic Subsidiary that holds no assets (excluding de minimis assets)other than Equity Interests in, or Equity Interests in and indebtedness of, one or more direct or indirect Foreign Subsidiaries that are CFCs, Disregarded Domestic Persons or other FSHCs.

“Funding Date” means the date on which a Borrowing occurs.

“Funding Losses” has the meaning specified therefor in Section 2.12(b)(ii) of this Agreement.

“GAAP” means generally accepted accounting principles as in effect from time to time in the United States, consistently applied.

“Global Holdings” means Pioneer Global Holdings, Inc., a Delaware corporation.

“Governing Documents” means, with respect to any Person, the certificate or articles of incorporation, by-laws, or other organizational documents of such Person.

“Governmental Authority” means the government of any nation or any political subdivision thereof, whether at the national, state, territorial, provincial, county, municipal or any other level, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of, or pertaining to, government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the owner of such Indebtedness or other obligation of the payment or performance thereof or to protect such owner against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person; provided, however, that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

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“Guarantor” means (a) each Person that guaranties all or a portion of the Obligations, including any Person that is a “Guarantor” under the Guaranty and Security Agreement, and (b) each other Person that becomes a guarantor after the Closing Date pursuant to Section 5.11 of this Agreement.

“Guaranty and Security Agreement” means a guaranty and security agreement, dated as of even date with this Agreement, in form and substance reasonably satisfactory to Agent, executed and delivered by each of the Loan Parties to Agent.

“Hazardous Materials” means (a) substances that are defined or listed in, or otherwise classified pursuant to, any applicable laws or regulations as “hazardous substances,” “hazardous materials,” “hazardous wastes,” “toxic substances,” or any other formulation intended to define, list, or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity, or “EP toxicity”, (b) oil, petroleum, or petroleum derived substances, natural gas, natural gas liquids, synthetic gas, drilling fluids, produced waters, and other wastes associated with the exploration, development, or production of crude oil, natural gas, or geothermal resources, (c) any flammable substances or explosives or any radioactive materials, and (d) asbestos in any form or electrical equipment that contains any oil or dielectric fluid containing levels of polychlorinated biphenyls in excess of 50 parts per million.

“Hedge Agreement” means a “swap agreement” as that term is defined in Section 101(53B)(A) of the Bankruptcy Code and any other hedge, call, swap, collar, floor, cap, option, forward sale or purchase contract or similar arrangement (including any obligations to purchase or sell any commodity or security at a future date for a specific price).

“Hedge Obligations” means any and all obligations or liabilities, whether absolute or contingent, due or to become due, now existing or hereafter arising, of each Loan Party and its Subsidiaries arising under, owing pursuant to, or existing in respect of Hedge Agreements entered into with one or more of the Hedge Providers.

“Hedge Provider” means any Bank Product Provider that is a party to a Hedge Agreement with a Loan Party or its Subsidiaries or otherwise provides Bank Products under clause (f) of the definition thereof; provided, that if, at any time, a Lender ceases to be a Lender under this Agreement (prior to the payment in full of the Obligations), then, from and after the date on which it ceases to be a Lender thereunder, neither it nor any of its Affiliates shall constitute Hedge Providers and the obligations with respect to Hedge Agreements entered into with such former Lender or any of its Affiliates shall no longer constitute Hedge Obligations.

“Hedging Arrangement” means a Hedge Agreement which is entered into to reduce or eliminate or otherwise protect against the risk of fluctuations in prices or rates, including interest rates, foreign exchange rates, commodity prices and securities prices.

“Immaterial Subsidiary” means each Subsidiary of a Borrower that is not a Material Subsidiary.

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“Indebtedness” as to any Person means (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations of such Person under any Hedging Arrangement; (d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than one hundred twenty (120) days after the date on which such trade account payable was created); (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (f) Capital Leases and Synthetic Lease Obligations; (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends, excluding obligations arising in connection with employee benefit plans with respect to fractional shares, or which are payable solely in Equity Interests; (h) all Guarantees of such Person in respect of any of the foregoing; and (i) all liabilities of such Person payable in cash in respect of unfunded vested benefits under any Benefit Plan.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedging Arrangement on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Liabilities” has the meaning specified therefor in Section 10.3 of this Agreement.

“Indemnified Person” has the meaning specified therefor in Section 10.3 of this Agreement.

“Indemnified Taxes” means, (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of, any Loan Party under any Loan Document, and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.

“Insolvency Proceeding” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

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“Intercompany Note” means any promissory note among the applicable Loan Parties and/or Subsidiaries that (i) is substantially in the form of Exhibit G hereto (except to the extent described on Schedule 1.1(c)) and (ii) is collaterally assigned to Agent for its benefit and the benefit of the Lenders and Bank Product Providers to the extent required by the Guaranty and Security Agreement (subject to the terms and conditions of the Intercreditor Agreement).

“Intercompany Subordination Agreement” means an intercompany subordination agreement, dated as of even date with this Agreement, executed and delivered by each Loan Party and each of its Subsidiaries, and Agent, the form and substance of which is reasonably satisfactory to Agent.

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of the Closing Date, by and between Agent and Senior Secured Notes Collateral Agent (or any successor or assignee thereto), and acknowledged by Parent and Borrowers.

“Interest Expense” means, for any period, the aggregate of the interest expense of Borrowers for such period, determined on a consolidated basis in accordance with GAAP.

“Interest Period” means, with respect to each LIBOR Rate Loan, a period commencing on the date of the making of such LIBOR Rate Loan (or the continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; provided, that (a) interest shall accrue at the applicable rate based upon the LIBOR Rate from and including the first day of each Interest Period to, but excluding, the day on which any Interest Period expires, (b) any Interest Period that would end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (c) with respect to an Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period), the Interest Period shall end on the last Business Day of the calendar month that is 1, 2, or 3 months after the date on which the Interest Period began, as applicable, and (d) Borrowers may not elect an Interest Period which will end after the Maturity Date.

“Inventory” means inventory (as that term is defined in the Code).

“Inventory Reserves” means, as of any date of determination, (a) Landlord Reserves in respect of Inventory, and (b) those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves for slow moving Inventory and Inventory shrinkage) with respect to Eligible Inventory or the Maximum Revolver Amount, including based on the results of appraisals.

“Investment” means, with respect to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest of another Person, (b) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit or all or a substantial part of the business of such Person, or (c) any loan, advance or capital contribution to,

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Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person; provided that any loan, advance or capital contribution by any Loan Party or Subsidiary to any member of the Colombian Group in an amount not to exceed the customary fees necessary for the nationalization of drilling rig numbers 21, 51 and 55 shall not constitute an “Investment”; provided such loans, advances or capital contributions shall not exceed $10,000,000 in the aggregate. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

“Investment Grade Accounts” means any Eligible Billed Accounts with respect to which the applicable Account Debtor maintains a rating equal to or higher than (a) Baa3 (or the equivalent) by Moody’s, (b) BBB- (or the equivalent) by S&P, or (c) an equivalent rating by any other rating agency approved by Agent in its Permitted Discretion.

“IRC” means the Internal Revenue Code of 1986, as in effect from time to time.

“ISP” means, with respect to any Letter of Credit, the International Standby Practices 1998 (International Chamber of Commerce Publication No. 590) and any version or revision thereof accepted by the Issuing Bank for use.

“Issuer Document” means, with respect to any Letter of Credit, a letter of credit application, a letter of credit agreement, or any other document, agreement or instrument entered into (or to be entered into) by a Borrower in favor of Issuing Bank and relating to such Letter of Credit.

“Issuing Bank” means PNC or any other Lender that, at the request of Borrowers and with the consent of Agent, agrees, in such Lender’s sole discretion, to become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to Section 2.11 of this Agreement, and Issuing Bank shall be a Lender.

“Joinder” means a joinder agreement substantially in the form of Exhibit J-1 to this Agreement.

“Landlord Reserve” means, as to each location at which a Borrower has Inventory or books and records located and as to which a Collateral Access Agreement has not been received by Agent, a reserve in an amount equal to 3 months’ rent, storage charges, fees or other amounts under the lease or other applicable agreement relative to such location or, if greater and Agent so elects, the number of months’ rent, storage charges, fess or other amounts for which the landlord, bailee, warehouseman or other property owner will have, under applicable law, a Lien in the Inventory of such Borrower to secure the payment of such amounts under the lease or other applicable agreement relative to such location.

“Legal Requirement” means any law, statute, ordinance, decree, requirement, order, judgment, rule, regulation (or official interpretation of any of the foregoing) of, and the terms of any license or permit issued by, any Governmental Authority, including, but not limited to, Regulations T, U and X.

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“Lender” has the meaning set forth in the preamble to this Agreement, shall include Issuing Bank and the Swing Lender, and shall also include any other Person made a party to this Agreement pursuant to the provisions of Section 13.1 of this Agreement and “Lenders” means each of the Lenders or any one or more of them.

“Lender Group” means each of the Lenders (including Issuing Bank and the Swing Lender) and Agent, or any one or more of them.

“Lender Group Expenses” means all (a) costs or expenses (including Taxes and insurance premiums) required to be paid by any Loan Party or its Subsidiaries under any of the Loan Documents that are paid, advanced, or incurred by the Lender Group, (b) reasonable documented out-of-pocket fees or charges paid or incurred by Agent in connection with the Lender Group’s transactions with each Loan Party and its Subsidiaries under any of the Loan Documents, including, photocopying, notarization, couriers and messengers, telecommunication, public record searches, filing fees, recording fees, and, to the extent a Mortgage is required to be delivered under this Agreement, publication, real estate surveys, real estate title policies and endorsements, and environmental audits, (c) Agent’s customary fees and charges imposed or incurred in connection with any background checks or OFAC/PEP searches related to any Loan Party or its Subsidiaries, (d) Agent’s customary fees and charges (as adjusted from time to time) with respect to the disbursement of funds (or the receipt of funds) to or for the account of any Borrower (whether by wire transfer or otherwise), together with any reasonable out-of-pocket costs and expenses incurred in connection therewith, (e) customary charges imposed or incurred by Agent resulting from the dishonor of checks payable by or to any Loan Party, (f) reasonable, documented out-of-pocket costs and expenses paid or incurred by the Lender Group to correct any default or enforce any provision of the Loan Documents, or during the continuance of an Event of Default, in gaining possession of, maintaining, handling, preserving, storing, shipping, selling, preparing for sale, or advertising to sell the Collateral, or any portion thereof, irrespective of whether a sale is consummated, (g) field examination, appraisal, and valuation fees and expenses of Agent related to any field examinations, appraisals, or valuation to the extent of the fees and charges (and up to the amount of any limitation) provided in Section 2.10 of this Agreement, (h) Agent’s and Lenders’ reasonable, documented costs and expenses (including reasonable and documented attorneys’ fees and expenses) relative to third party claims or any other lawsuit or adverse proceeding paid or incurred, whether in enforcing or defending the Loan Documents or otherwise in connection with the transactions contemplated by the Loan Documents, Agent’s Liens in and to the Collateral, or the Lender Group’s relationship with any Loan Party or any of its Subsidiaries, (i) Agent’s reasonable and documented costs and expenses (including reasonable and documented attorneys’ fees and due diligence expenses) incurred in advising, structuring, drafting, reviewing, administering (including travel, meals, and lodging), syndicating (including reasonable costs and expenses relative to CUSIP, DXSyndicate^™, SyndTrak or other communication costs incurred in connection with a syndication of the loan facilities), or amending, waiving, or modifying the Loan Documents, (j) Agent’s and each Lender’s reasonable and documented costs and expenses (including reasonable and documented attorneys, accountants, consultants, and other advisors fees and expenses) incurred in terminating, enforcing (including attorneys, accountants, consultants, and other advisors fees and expenses incurred in connection with a “workout,” a “restructuring,” or an Insolvency Proceeding concerning any Loan Party or any of its Subsidiaries or in exercising

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rights or remedies under the Loan Documents), or defending the Loan Documents, irrespective of whether a lawsuit or other adverse proceeding is brought, or in taking any enforcement action or any Remedial Action with respect to the Collateral, and (k) without duplication, reasonable and documented costs and expenses incurred in connection with the Case, including without limitation, reasonable and documented costs and expenses incurred in connection with (i) the review of pleadings and other filings made with the Bankruptcy Court, (ii) attendance at all hearings in respect of the Case, and (iii) defending and prosecuting any actions or proceedings arising out of or relating to the Obligations, the Liens securing the Obligations or any transactions related to arising in connection with this Agreement or the other Loan Documents.

“Lender Group Representatives” has the meaning specified therefor in Section 17.9 of this Agreement.

“Lender-Related Person” means, with respect to any Lender, such Lender, together with such Lender’s Affiliates, officers, directors, employees, attorneys, and agents.

“Letter of Credit” means a letter of credit (as that term is defined in the Code) issued by Issuing Bank.

“Letter of Credit Collateralization” means either (a) providing cash collateral (pursuant to documentation reasonably satisfactory to Agent (including that Agent has a first priority perfected Lien in such cash collateral), including provisions that specify that the Letter of Credit Fees and all commissions, fees, charges and expenses provided for in Section 2.11(k) of this Agreement (including any fronting fees) will continue to accrue while the Letters of Credit are outstanding) to be held by Agent for the benefit of the Revolving Lenders in an amount equal to 103% of the then existing Letter of Credit Usage, (b) delivering to Agent documentation executed by all beneficiaries under the Letters of Credit, in form and substance reasonably satisfactory to Agent and Issuing Bank, terminating all of such beneficiaries’ rights under the Letters of Credit, or (c) providing Agent with a standby letter of credit, in form and substance reasonably satisfactory to Agent, from a commercial bank acceptable to Agent (in its sole discretion) in an amount equal to 103% of the then existing Letter of Credit Usage (it being understood that the Letter of Credit Fee and all fronting fees set forth in this Agreement will continue to accrue while the Letters of Credit are outstanding and that any such fees that accrue must be an amount that can be drawn under any such standby letter of credit).

“Letter of Credit Disbursement” means a payment made by Issuing Bank pursuant to a Letter of Credit.

“Letter of Credit Exposure” means, as of any date of determination with respect to any Lender, such Lender’s participation in the Letter of Credit Usage pursuant to Section 2.11(e) on such date.

“Letter of Credit Fee” has the meaning specified therefor in Section 2.6(b) of this Agreement.

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“Letter of Credit Indemnified Costs” has the meaning specified therefor in Section 2.11(f) of this Agreement.

“Letter of Credit Related Person” has the meaning specified therefor in Section 2.11(f) of this Agreement.

“Letter of Credit Sublimit” means $30,000,000.

“Letter of Credit Usage” means, as of any date of determination, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit, plus (b) the aggregate amount of outstanding reimbursement obligations with respect to Letters of Credit which remain unreimbursed or which have not been paid through a Revolving Loan.

“LIBOR Alternate Source” has the meaning specified in the definition of LIBOR Rate.

“LIBOR Deadline” has the meaning specified therefor in Section 2.12(b)(i) of this Agreement.

“LIBOR Notice” means a written notice in the form of Exhibit L-1 to this Agreement.

“LIBOR Option” has the meaning specified therefor in Section 2.12(a) of this Agreement.

“LIBOR Rate” shall mean for any LIBOR Rate Loan for the then current Interest Period relating thereto, the interest rate per annum determined by Agent by dividing (the resulting quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum) (a) the rate which appears on the Bloomberg Page BBAM1 (or on such other substitute Bloomberg page that displays rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market), or the rate which is quoted by another source selected by Agent as an authorized information vendor for the purpose of displaying rates at which U.S. dollar deposits are offered by leading banks in the London interbank deposit market (a “LIBOR Alternate Source”), at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period as the London interbank offered rate for U.S. Dollars for an amount comparable to such LIBOR Rate Loan and having a borrowing date and a maturity comparable to such Interest Period (or (x) if there shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or any substitute page) or any LIBOR Alternate Source, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error), (y) if the LIBOR Rate is unascertainable as set forth in Section 2.14, a comparable replacement rate determined in accordance with Section 2.14), by (b) a number equal to 1.00 minus the Reserve Percentage; provided, however, that if the LIBOR Rate determined as provided above would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement. The LIBOR Rate shall be adjusted with respect to any LIBOR Rate Loan that is outstanding on the effective date of any change in the Reserve Percentage as of such effective date. Agent shall give reasonably prompt notice to the Borrowers of the LIBOR Rate as determined or adjusted in accordance herewith, which determination shall be conclusive absent manifest error.

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“LIBOR Rate Loan” means each portion of a Revolving Loan that bears interest at a rate determined by reference to the LIBOR Rate.

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, charge, deposit arrangement, encumbrance, easement, lien (statutory or other), security interest, or other security arrangement and any other preference, priority, or preferential arrangement of any kind or nature whatsoever, including any conditional sale contract or other title retention agreement, the interest of a lessor under a Capital Lease and any synthetic or other financing lease having substantially the same economic effect as any of the foregoing.

“Liquid Investments” means (i) readily marketable direct full faith and credit obligations of the United States of America or obligations unconditionally guaranteed by the full faith and credit of the United States of America; (ii) commercial paper issued by (A) any Lender or any Affiliate of any Lender or (B) any commercial banking institutions or corporations rated at least P-1 by Moody’s or A-1 by S&P; (iii) certificates of deposit, time deposits, and bankers’ acceptances issued by (A) any of the Lenders or (B) any other commercial banking institution which is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $250,000,000.00 and rated Aa by Moody’s or AA by S&P; (iv) repurchase agreements which are entered into with any of the Lenders or any major money center banks included in the commercial banking institutions described in clause (iii) and which are secured by readily marketable direct full faith and credit obligations of the government of the United States of America or any agency thereof; (v) investments in any money market fund which holds investments substantially of the type described in the foregoing clauses (i) through (iv) and (vi) short term investments by Foreign Subsidiaries made with the goal of preservation of capital, which investments are customary for short term cash management for similarly situated business enterprises in the jurisdiction in which any such Foreign Subsidiary is conducting business. All the Liquid Investments described in clauses (i) through (iv) above shall have maturities of not more than 365 days from the date of issue.

“Loan” means any Revolving Loan, Swing Loan, or Extraordinary Advance made (or to be made) hereunder.

“Loan Account” has the meaning specified therefor in Section 2.9 of this Agreement.

“Loan Documents” means this Agreement, the Control Agreements, the Copyright Security Agreement, any Borrowing Base Certificate, the Fee Letter, the Guaranty and Security Agreement, the Intercompany Subordination Agreement, the Intercreditor Agreement, any Issuer Documents, the Letters of Credit, the Mortgages, the Patent Security Agreement, the Trademark Security Agreement, any note or notes executed by Borrowers in connection with this Agreement and payable to any member of the Lender Group, and any other instrument or agreement entered into, now or in the future, by any Loan Party or any of its Subsidiaries and any member of the Lender Group in connection with this Agreement (but specifically excluding Bank Product Agreements).

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“Loan Party” means any Borrower or any Guarantor.

“Margin Stock” as defined in Regulation U of the Board of Governors as in effect from time to time.

“Material Adverse Effect” means (a) a material adverse effect in the business, operations, condition (financial or otherwise) or results of operations of the Loan Parties and their Subsidiaries, taken as a whole, other than as a result of the commencement, the continuation, or events leading up to the commencement of the Case, (b) a material adverse effect on the validity or enforceability of this Agreement or any of the other Loan Documents; (c) on the ability of the Loan Parties, collectively, to perform their obligations under this Agreement or any other Loan Document, or (d) a material impairment of the enforceability or priority of Agent’s Liens with respect to all or a material portion of the Collateral.

“Material Contract” means, with respect to any Person, (a) each contract or agreement to which such Person or any of its Subsidiaries is a party that is deemed to be a material contract or material definitive agreement under the Securities Act of 1933 or the Exchange Act or other federal securities laws, including, without limitation, the types of contracts specified in item 601(b)(10)(ii) of Regulation S-K (other than purchase orders in the ordinary course of the business of such Person or such Subsidiary and other than contracts that by their terms may be terminated by such Person or Subsidiary in the ordinary course of its business upon less than 60 days’ notice without penalty or premium), (b) each contract or agreement with customers of such Person for which aggregate annual consideration paid in respect thereof equals or exceeds $15,000,000, and (c) all other contracts or agreements, the loss of which could reasonably be expected to result in a Material Adverse Effect.

“Material Subsidiary” means (a) each Borrower, and (b) each Domestic Subsidiary (other than a Disregarded Domestic Person) of a Loan Party that (i) owns at least 2.50% of the consolidated total assets of the Loan Parties and their Subsidiaries, (ii) generates at least 2.50% of the consolidated revenues of the Loan Parties and their Subsidiaries, (iii) is the owner of Equity Interests of any Subsidiary of a Loan Party that otherwise constitutes a Material Subsidiary, or (iv) any group comprising Subsidiaries of a Loan Party that each would not have been a Material Subsidiary under clauses (i), (ii), or (iii) but that, taken together, had revenues or total assets in excess of 5.0% of the consolidated revenues or total assets, as applicable, of the Loan Parties and their Subsidiaries.

“Maturity Date” means the earliest of (i) 90 days prior to maturity of the Senior Secured Notes (as amended, financed, or replaced), (ii) 90 days prior to the maturity of the Convertible Notes (as amended, financed, or replaced), and (iii) May 29, 2025.

“Maximum Revolver Amount” means $75,000,000, decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 2.4(c) of this Agreement.

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“Moody’s” means Moody’s Investors Service, Inc.

“Mortgages” means, individually and collectively, one or more mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a Loan Party or one of its Subsidiaries in favor of Agent, at Agent’s request, in form and substance reasonably satisfactory to Agent, that encumber the Real Property Collateral.

“Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Loan Party or Subsidiary thereof is making or is required to make contributions, including as the result of being an ERISA Affiliate.

“Net Income” means, for any period and with respect to any Person, the net income for such period for such Person after Taxes as determined in accordance with GAAP, excluding, however, (a) extraordinary items, including, for the avoidance of doubt, any extraordinary items that constitute (i) any net non-cash gain or loss during such period arising from the sale, exchange, retirement or other disposition of capital assets (such term to include all fixed assets and all securities) other than in the ordinary course of business, and (ii) any write-up or write-down of assets, (b) the net income of any Person (other than a Subsidiary) in which any other Person (other than the Parent or any of its Subsidiaries) has a joint interest, except to the extent of the amount of cash dividends or other cash distributions actually paid to the Parent or any of its Subsidiaries by such Person during such period, and (c) the net income of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary of such income is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary.

“Net Recovery Percentage” means, as of any date of determination, the percentage of the book value of Borrowers’ Inventory that is estimated to be recoverable in an orderly liquidation of such Inventory net of all associated costs and expenses of such liquidation, such percentage to be determined as to each category of Inventory and to be as specified in the most recent Acceptable Appraisal.

“Non-Consenting Lender” has the meaning specified therefor in Section 14.2(a) of this Agreement.

“Non-Defaulting Lender” means each Lender other than a Defaulting Lender.

“Non-Qualifying Party” shall mean any Borrower or any Guarantor that on the Eligibility Date fails for any reason to qualify as an Eligible Contract Participant.

“Obligations” means (a) all loans (including the Revolving Loans (inclusive of Extraordinary Advances and Swing Loans)), debts, principal, interest (including any interest that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), reimbursement or indemnification obligations with respect to Letters of Credit (irrespective of whether contingent), premiums, liabilities (including all amounts charged to the Loan Account pursuant to this Agreement), obligations (including indemnification obligations), fees (including the fees provided

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for in the Fee Letter), Lender Group Expenses (including any reasonable and documented fees or expenses that accrue after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), guaranties, and all covenants and duties of any other kind and description owing by any Loan Party arising out of, under, pursuant to, in connection with, or evidenced by this Agreement or any of the other Loan Documents and irrespective of whether for the payment of money, whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, and including all interest not paid when due and all other expenses or other amounts that any Loan Party is required to pay or reimburse by the Loan Documents or by law or otherwise in connection with the Loan Documents, and (b) all Bank Product Obligations; provided that, anything to the contrary contained in the foregoing notwithstanding, the Obligations shall exclude any Excluded Swap Obligation. Without limiting the generality of the foregoing, the Obligations of Borrowers under the Loan Documents include the obligation to pay (i) the principal of the Revolving Loans, (ii) interest accrued on the Revolving Loans, (iii) the amount necessary to reimburse Issuing Bank for amounts paid or payable pursuant to Letters of Credit, (iv) Letter of Credit commissions, fees (including fronting fees) and charges, (v) Lender Group Expenses, (vi) fees payable under this Agreement or any of the other Loan Documents, and (vii) indemnities and other amounts payable by any Loan Party under any Loan Document. Any reference in this Agreement or in the Loan Documents to the Obligations shall include all or any portion thereof and any extensions, modifications, renewals, or alterations thereof, both prior and subsequent to any Insolvency Proceeding.

“OFAC” means The Office of Foreign Assets Control of the U.S. Department of the Treasury.

“Originating Lender” has the meaning specified therefor in Section 13.1(e) of this Agreement.

“Other Taxes” means all present or future stamp, court, excise, value added, or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document.

“Overadvance” means, as of any date of determination, that the Revolver Usage is greater than any of the limitations set forth in Section 2.1 or Section 2.11 of this Agreement.

“Overnight Bank Funding Rate” shall mean, for any, day the rate per annum (based on a year of 360 days and actual days elapsed) comprised of both overnight federal funds and overnight Eurocurrency borrowings by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the Federal Reserve Bank of New York, as set forth on its public website from time to time, and as published on the next succeeding Business Day as the overnight bank funding rate by such Federal Reserve Bank (or by such other recognized electronic source (such as Bloomberg) selected by Agent for the purpose of displaying such rate) (an “Alternate Source”); provided, that if such day is not a Business Day, the Overnight Bank Funding Rate for such day shall be such rate on the immediately preceding Business Day;

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provided, further, that if such rate shall at any time, for any reason, no longer exist, a comparable replacement rate determined by Agent at such time (which determination shall be conclusive absent manifest error). If the Overnight Bank Funding Rate determined as above would be less than zero, then such rate shall be deemed to be zero. The rate of interest charged shall be adjusted as of each Business Day based on changes in the Overnight Bank Funding Rate without notice to the Borrowers.

“Parent” has the meaning specified therefor in the preamble to this Agreement.

“Participant” has the meaning specified therefor in Section 13.1(e) of this Agreement.

“Participant Register” has the meaning set forth in Section 13.1(i) of this Agreement.

“Patent Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

“Payment Conditions” means, at the time of determination with respect to a proposed payment to fund a Specified Transaction, that:

(a) no Default or Event of Default then exists or would arise as a result of the consummation of such Specified Transaction,

(b) either

(i) Excess Availability after giving effect to such proposed payment and Specified Transaction, in each case, is not less than 25% of the Maximum Revolver Amount, or

(ii) both (A) the Fixed Charge Coverage Ratio of the Loan Parties and their Subsidiaries is equal to or greater than 1.00:1.00 for the trailing 12 month period most recently ended for which financial statements are required to have been delivered to Agent pursuant to Schedule 5.1 to this Agreement (calculated on a pro forma basis as if such proposed payment or investment is a Fixed Charge (regardless of whether such proposed payment or investment is otherwise not a Fixed Charge for the purposes of calculating the Fixed Charge Coverage Ratio) made on the last day of such 12 month period (it being understood that such proposed payment shall also be a Fixed Charge made on the last day of such 12 month period for purposes of calculating the Fixed Charge Coverage Ratio under this clause (ii) for any subsequent proposed payment to fund a Specified Transaction)), and (B) Excess Availability after giving effect to such proposed payment and Specified Transaction, in each case, is not less than 20% of the Maximum Revolver Amount, and

(c) Administrative Borrower has delivered a certificate to Agent certifying that all conditions described in clauses (a) and (b) above have been satisfied.

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“PBGC” means the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

“Perfection Certificate” means a certificate in the form of Exhibit P-1 to this Agreement.

“Permitted Acquisition” means any Acquisition so long as:

(a) the Payment Conditions are satisfied,

(b) such Acquisition is substantially related to the business of the Parent and its Subsidiaries individually or in the aggregate and is not hostile,

(c) such Acquisition is either (i) not of a Foreign Subsidiary or (ii) made by Global Holdings or one of its Subsidiaries;

(d) any Persons acquired pursuant to such Acquisition shall have positive EBITDA, calculated in accordance with GAAP immediately prior to such Acquisition;

(e) the Loan Parties shall have delivered to Agent unaudited financial statements of the acquired entity for the two (2) most recent fiscal years then ended, if available, in form and substance reasonably acceptable to Agent;

(f) no assets acquired in any such Acquisition shall be included in the Borrowing Base until Agent has received a field examination and/or appraisal of such assets, in form and substance acceptable to Agent; and

(g) within the time periods prescribed therein, the Loan Parties shall comply with Sections 5.11 and 5.12 of this Agreement with respect to any assets or Persons acquired pursuant to such Acquisition.

For the purposes of calculating Excess Availability, as applicable, under this definition, any assets being acquired in the proposed Acquisition shall be included in the Borrowing Base on the date of closing of such Acquisition so long as Agent has received an audit or appraisal of such assets and so long as such assets satisfy the applicable eligibility criteria.

“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) credit judgment in accordance with customary business practices of Agent for asset-based lending transactions.

“Permitted Dispositions” means:

(a) Dispositions of obsolete or worn out Property, whether now owned or hereafter acquired, in the ordinary course of business and dispositions of Property no longer useful or used by any Loan Party and their respective Subsidiaries in the conduct of their business, provided that none of the foregoing Dispositions are of Property that constitutes Eligible Inventory,

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(b) Dispositions of Inventory to buyers in the ordinary course of business,

(c) Dispositions of money (in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents) or Liquid Investments,

(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

(e) the granting of Permitted Liens,

(f) Dispositions of accounts receivable (other than Eligible Accounts) in connection with the compromise or collection thereof in the ordinary course of business,

(g) any involuntary loss, damage or destruction of property,

(h) transfers of property subject to any settlement of or payment in respect of any property or casualty insurance claim (excluding any claim in respect of business interruption) or any condemnation proceeding relating to any asset of any Borrower or any of its respective Subsidiaries,

(i) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property,

(j) leases, subleases, licenses or sublicenses of Property (other than to Global Holdings and its Subsidiaries except with respect to existing leases of drilling rigs numbered 21, 51 and 55)) in the ordinary course of business and which do not materially interfere with the business of the Borrowers and their Subsidiaries,

(k) the sale or transfer to a Person of any Property having a fair market value less than $5,000,000 (in the aggregate for all such Property sold), where the Parent or a Subsidiary shall lease as lessee such Property or any part thereof or other Property which the Parent or such Subsidiary shall use for substantially the same purpose as the Property sold or transferred,

(l) the sale or issuance of Equity Interests (other than Disqualified Equity Interests) of Parent,

(m) (i) the lapse of registered patents, trademarks, copyrights and other intellectual property of any Loan Party or any of its Subsidiaries to the extent not economically desirable in the conduct of its business, or (ii) the abandonment of patents, trademarks, copyrights, or other intellectual property rights in the ordinary course of business so long as (in each case under clauses (i) and (ii)), (A) with respect to copyrights, such copyrights are not material revenue generating copyrights, and (B) such lapse is not materially adverse to the interests of the Lender Group,

(n) the making of Restricted Payments that are expressly permitted to be made pursuant to this Agreement,

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(o) the making of Permitted Investments,

(p) Dispositions of assets (i) by any Subsidiary to any Borrower or to another Subsidiary (other than Global Holdings or any Subsidiary thereof) and (ii) by any Subsidiary of Global Holdings to another Subsidiary of Global Holdings; provided that, in the case of clause (i) or (ii), if the transferor of such property is a Loan Party, the transferee thereof must be a Loan Party,

(q) Dispositions of Equipment or Real Property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property, or (ii) the proceeds of such disposition are reasonably promptly applied, or contractually obligated to be applied (in the case of Equipment for which substantial delivery lead times apply), to the purchase price of such replacement property; provided, that to the extent the property being transferred constitutes Collateral, such replacement property shall constitute Collateral,

(r) Dispositions of Equipment consisting of parts, supplies and spares by any Borrower and its respective Subsidiaries to Global Holdings or Foreign Subsidiaries of Global Holdings in the ordinary course of business; provided that (i) the aggregate book value of all such Equipment disposed of pursuant to this clause (r), together with aggregate book value of all Equipment invested pursuant to clause (t)(ii) of the definition of Permitted Investments during the period commencing on the Closing Date, shall not exceed $10,000,000 and (ii) no Default or Event of Default shall have occurred and be continuing at the time of such disposition or shall result therefrom,

(s) Dispositions of drilling rigs numbered 21, 51, 52, 53, 55, 301, 302 and 303, each located in Colombia, to a third party (or to Global Holdings on an interim basis in order to facilitate such a disposition), or of the Subsidiary owning such rigs; provided that (i) at the time of such Disposition, no Default or Event of Default shall exist or would result from such Disposition, (ii) the consideration received by the applicable Borrower or its Subsidiaries in connection with such Disposition is (A) equal to or greater than the fair market value of the drilling rigs (or Subsidiary) being disposed of and (B) comprised of at least 90% (or such lower percentage as the Required Lenders may approve) cash or Liquid Investments and (iii) in the case of a Disposition of a Subsidiary, such Subsidiary owns no assets or property other than such drilling rigs, related assets and equipment useful for the operation thereof and associated working capital;

(t) sales or other Dispositions of assets not otherwise permitted in clauses (a) through (s) above (other than sales or other dispositions of ABL Priority Collateral), so long as (i) no Default or Event of Default has occurred and is continuing or would immediately result therefrom and (ii) the consideration received by such Borrower or its Subsidiaries in connection with such Disposition is (A) equal to or greater than the fair market value of the Property being disposed of and (B) comprised of at least 90% cash or Liquid Investments.

“Permitted Indebtedness” means:

(a) Indebtedness in respect of the Obligations,

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(b) Indebtedness of any Loan Party owing to Wells Fargo Bank, N.A. under any reimbursement agreement in respect of the Existing Letters of Credit, so long as the aggregate amount of all such Indebtedness does not exceed $7,004,000 in the aggregate,

(d) Indebtedness arising in connection with the endorsement of instruments or other payment items for deposit,

(e) Indebtedness consisting of (i) unsecured guarantees in the ordinary course of business with respect to bid, performance, stay, customs, appeal and surety bonds; (ii) unsecured guarantees arising with respect to customary indemnification obligations to purchasers in connection with Permitted Dispositions; (iii) unsecured guarantees with respect to Indebtedness of any Loan Party or one of its Subsidiaries, to the extent that the Person that is obligated under such guaranty could have incurred such underlying Indebtedness,

(f) Indebtedness incurred by any Borrower or its respective Subsidiaries in connection with a Permitted Acquisition consisting of agreements providing for indemnification, the adjustment of the purchase price or similar adjustments (but not earnouts),

(g) [intentionally omitted],

(h) [intentionally omitted],

(i) Indebtedness incurred in the ordinary course of business (i) under bid, performance, stay, customs, appeal and surety bonds and (ii) with respect to workers’ compensation or other like employee benefit claims and, in each case, obligations in respect of letters of credit related thereto,

(j) unfunded Benefit Plan obligations or liabilities to the extent they are permitted to remain unfunded under applicable law,

(k) Indebtedness incurred in the ordinary course of business to finance the payment of premiums for a 12 month period for insurance; provided that the aggregate outstanding principal amount of such Indebtedness shall not at any time exceed $5,000,000,

(l) the incurrence by any Loan Party or its Subsidiaries of Indebtedness under Hedge Agreements that is incurred for the bona fide purpose of reducing or eliminating or otherwise protecting against the risk of fluctuations in prices or rates, including interest rates, foreign exchange rates, commodity prices and securities prices, in each case, associated with such Loan Party’s or such Subsidiary’s operations and not for speculative purposes,

(m) Indebtedness incurred in the ordinary course of business in respect of credit cards, credit card processing services, debit cards, stored value cards, commercial cards (including so-called “purchase cards”, “procurement cards” or “p-cards”), or Cash Management Services,

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(n) unsecured Indebtedness of any Loan Party owing to employees, former employees, former officers, directors, or former directors (or any spouses, ex-spouses, or estates of any of the foregoing) incurred in connection with the repurchase or redemption by such Loan Party of the Equity Interests of Parent that has been issued to such Persons, so long as (i) no Default or Event of Default has occurred and is continuing or would result from the incurrence of such Indebtedness, (ii) the aggregate amount of all such Indebtedness outstanding at any one time does not exceed $1,000,000, and (iii) such Indebtedness is subordinated in right of payment to the Obligations on terms and conditions reasonably acceptable to Agent,

(o) contingent liabilities in respect of any indemnification obligation, adjustment of purchase price, non-compete, or similar obligation of any Loan Party incurred in connection with the consummation of one or more Permitted Acquisitions,

(p) Indebtedness composing Permitted Investments,

(q) unsecured Indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the ordinary course of business,

(r) unsecured Indebtedness of any Loan Party or its Subsidiaries in respect of Earn-Outs owing to sellers of assets or Equity Interests to such Loan Party or its Subsidiaries that is incurred in connection with the consummation of one or more Permitted Acquisitions so long as such unsecured Indebtedness is on terms and conditions reasonably acceptable to Agent,

(s) Indebtedness in an aggregate outstanding principal amount not to exceed $5,000,000 at any time outstanding for all Foreign Subsidiaries of each Loan Party; provided, that such Indebtedness is not directly or indirectly recourse to any of the Loan Parties or of their respective assets,

(t) intercompany Indebtedness incurred in the ordinary course of business subordinated to the Obligations on terms set forth in the Intercompany Subordination Agreement, evidenced by an Intercompany Note, and owed (i) by any Loan Party (other than Global Holdings and its Subsidiaries) to the Parent; (ii) by the Parent to any other Loan Party (other than Global Holdings and its Subsidiaries); (iii) by any Loan Party (other than Global Holdings and its Subsidiaries) to another Loan Party; and (iv) by Global Holdings or any of its Subsidiaries to the Parent or any of its other Subsidiaries to the extent such Indebtedness is an Investment permitted under clause (f), (t) or (u) of the definition of Permitted Investment,

(u) Guarantees (i) of any Loan Party in respect of Indebtedness of any Loan Party (other than Global Holdings and its Subsidiaries, except to the extent that the Indebtedness incurred by Global Holdings and its Subsidiaries, were it guaranteed, would not exceed the amount of an Investment therein permitted under Section 6.3) otherwise permitted hereunder and (ii) of the Parent or any Subsidiary in respect of Indebtedness of Global Holdings or any of its Subsidiaries otherwise permitted hereby to the extent such Guarantees constitute Investments permitted under clause (f) or (t) of the definition of Permitted Investment,

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(v) accrual of interest, accretion or amortization of original issue discount, or the payment of interest in kind, in each case, on Indebtedness that otherwise constitutes Permitted Indebtedness,

(w) Indebtedness under the Senior Secured Notes Documents as in effect on the date hereof, or as amended, restated, supplemented or otherwise modified in accordance with Section 6.6(b)(iii) of this Agreement, and any Refinancing Indebtedness in respect thereof made in accordance with Section 6.6(b)(iii) of this Agreement and the Intercreditor Agreement, so long as, in each case, such Indebtedness is subject to the terms and conditions of the Intercreditor Agreement,

(x) Additional Notes Collateral Debt,

(y) Indebtedness (other than for borrowed money) subject to Excepted Liens and Liens described in clause (v) of the definition of Permitted Liens,

(z) unsecured Indebtedness evidenced by the Convertible Notes and the Convertible Notes Guaranties (including unsecured Refinancing Indebtedness thereof); provided that, in the event of any such extension, refinancing, refunding, replacement or renewal, then (i) the scheduled maturity date of such Indebtedness shall not be earlier than 180 days after the Maturity Date, (ii) such Indebtedness shall not have any amortization or other requirement to purchase, redeem, retire, defease or otherwise make any principal payment in respect thereof, other than at scheduled maturity thereof and mandatory prepayments or mandatory redemptions or puts triggered upon change in control, sale of all or substantially all assets and certain asset sales, in each case which are customary with respect to such type of Indebtedness (and provided, for the avoidance of doubt, that payments of regularly scheduled interest shall be permitted with respect to such Indebtedness so long as no Event of Default has occurred and is then continuing), (iii) the agreements and instruments governing such Indebtedness shall not contain (A)(1) any financial maintenance covenants that are more restrictive than those in the Loan Documents, or (2) any other affirmative or negative covenants, defaults or events of default that are, taken as a whole, materially more restrictive than those, taken as a whole, set forth in the Loan Documents; provided that the inclusion of any covenant that is customary with respect to such type of Indebtedness and that is not found in the Loan Documents shall not be deemed to be more restrictive for purposes of this clause (A), (B) any restriction on the ability of Parent or any of its Subsidiaries to amend, modify, restate or otherwise supplement this Agreement or the other Loan Documents, or (C)(1) any restrictions on the ability of any Subsidiary of the Parent to guarantee the Obligations (as such Obligations may be extended, renewed, rearranged, increased, amended, supplemented or otherwise modified from time to time), provided that a requirement that any such Subsidiary also guarantee such Indebtedness shall not be deemed to be a violation of this clause (C), (2) any restrictions on the ability of any Subsidiary or the Parent to pledge assets as collateral security for the Obligations (as such Obligations may be extended, renewed, rearranged, increased, amended, supplemented or otherwise modified from time to time), or (3) any restrictions on the ability of any Subsidiary or the Parent to incur Indebtedness under this Agreement or any other Loan Document; provided that, any restriction as to the entry into any such guaranty or pledge of assets or incurrence of such Indebtedness under this Agreement that is not materially more restrictive

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than those set forth in the agreements and instruments governing the Convertible Notes as in effect on the Closing Date shall not be deemed to be a restriction for purposes of this clause (C), (iv) any such Indebtedness is in an aggregate principal amount not greater than the aggregate principal amount of the Indebtedness being extended, refinanced, refunded, replaced or renewed, plus all accrued interest thereon, the amount of any premiums required to be paid thereon and all fees and expenses associated therewith or with the extension, refinancing, refunding, replacement or renewal, and (v) if such extension, refinancing, refunding, replacement or renewal of Indebtedness occurs on or before May 29, 2025, the cash interest rate on the Convertible Notes shall not increase by more than 3.00% per annum above the cash interest rate in effect on the date hereof (in each case, excluding, without limitation, (x) fluctuations in underlying rate indices, (y) the imposition of a default rate of up to 2.00% per annum, and (z) increases in the cash interest rate to the extent not payable in cash), and

(aa) other Indebtedness in an aggregate principal amount outstanding (together with the principal amount of Indebtedness outstanding pursuant to clauses (k), (l) and (s) of this definition) at any time not to exceed $10,000,000.

“Permitted Intercompany Advances” means loans made in accordance with and pursuant to clauses (t) and (u) of the definition of Permitted Indebtedness.

“Permitted Investments” means:

(a) Investments in the form of trade credit to customers of the Borrowers and their Subsidiaries arising in the ordinary course of business and represented by accounts from such customers,

(b) Investments in cash and Liquid Investments,

(c) Investments in negotiable instruments deposited or to be deposited for collection in the ordinary course of business,

(d) advances made in connection with purchases of goods or services in the ordinary course of business,

(e) Investments received in settlement of amounts due (or other disputes) to any Loan Party or any of its Subsidiaries effected in the ordinary course of business or owing to any Loan Party or any of its Subsidiaries as a result of Insolvency Proceedings involving an account debtor or upon the foreclosure or enforcement of any Lien in favor of a Loan Party or its Subsidiaries,

(f) Investments existing on the Closing Date (i) by any Borrower in any Subsidiary, (ii) by any Subsidiary in any Borrower or any other Subsidiary and (iii) set forth on Schedule P-1 to this Agreement,

(g) guarantees permitted under the definition of Permitted Indebtedness,

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(h) [intentionally omitted],

(i) Investments consisting of (A) Indebtedness otherwise permitted pursuant to the applicable provisions of Section 6.1 (other than clause (aa) of the definition of Permitted Indebtedness), and (B) corporate actions otherwise permitted pursuant to Section 6.3;

(j) Equity Interests or other securities acquired in connection with the satisfaction or enforcement of Indebtedness or claims due or owing to a Loan Party or its Subsidiaries (in bankruptcy of customers or suppliers or otherwise outside the ordinary course of business) or as security for any such Indebtedness or claims,

(k) deposits of cash made in the ordinary course of business to secure performance of operating leases,

(l) (i) non-cash loans and advances to employees, officers, and directors of a Loan Party or any of its Subsidiaries for the purpose of purchasing Equity Interests in Parent so long as the proceeds of such loans are used in their entirety to purchase such Equity Interests in Parent, (ii) loans and advances to employees and officers of a Loan Party or any of its Subsidiaries in the ordinary course of business for any other business purpose and in an aggregate amount not to exceed $500,000 at any one time,

(m) Creation of any Subsidiary or any Permitted Acquisitions, provided that each such Subsidiary shall comply with the requirements of Section 5.11; provided further that no Borrower nor any Subsidiary (other than Global Holdings and its Subsidiaries) may create any Foreign Subsidiary,

(n) Investments in the form of capital contributions and the acquisition of Equity Interests made by any Loan Party in any other Loan Party (other than Global Holdings and other than capital contributions to or the acquisition of Equity Interests of Parent),

(o) ordinary course of business Investments in a Guarantor or a Borrower (other than Global Holdings and its Subsidiaries); provided that, to the extent such Investments consist of intercompany loans or advances, such Investments are subordinated to the Obligations on terms reasonably acceptable to the Required Lenders and are evidenced by an Intercompany Note;

(p) Investments resulting from entering into (i) Bank Product Agreements, or (ii) agreements relative to obligations permitted under clause (l) of the definition of Permitted Indebtedness,

(q) equity Investments by any Loan Party in any Subsidiary of such Loan Party which is required by law to maintain a minimum net capital requirement or as may be otherwise required by applicable law,

(r) Investments held by a Person acquired in a Permitted Acquisition to the extent that such Investments were not made in contemplation of or in connection with such Permitted Acquisition and were in existence on the date of such Permitted Acquisition,

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(s) Investments consisting of non-cash consideration (including, without limitation, promissory notes) received in connection with Permitted Dispositions, and

(t) (i) Investments by a Subsidiary of Global Holdings in another Subsidiary of Global Holdings; (ii) Investments of Equipment consisting of parts, supplies and spares into Global Holdings or Foreign Subsidiaries of Global Holdings; provided that (A) the aggregate value of all such Equipment invested pursuant to this clause (ii), together with the aggregate value of all Equipment disposed of pursuant to clause (r) of the definition of Permitted Disposition, shall not exceed $10,000,000 (excluding Investments described in clause (w) of the definition of Permitted Investments) and (B) no Default or Event of Default shall have occurred and be continuing at the time of such Investment or shall result therefrom; and (iii) cash Investments in the Colombian Group in an aggregate amount over the period commencing on the Closing Date not to exceed the sum of (x) $25,000,000 plus (y) in each case, an amount equal to the aggregate amount distributed or otherwise paid on or after the Closing Date to the Loan Parties (other than Global Holdings and its Subsidiaries) by Global Holdings or one or more Foreign Subsidiaries comprising the Colombian Group, including, but not limited to, lease payments with respect to the lease of any drilling rig leased by one or more of the Foreign Subsidiaries comprising the Colombian Group from the Loan Parties (other than Global Holdings and its Subsidiaries); provided that (A) in no event shall the aggregate amount of Investments outstanding under this clause (iii) exceed $25,000,000 (excluding Investments made pursuant to clause (r) of the definition of Permitted Dispositions) at any time, (B) no Default or Event of Default shall have occurred and be continuing at the time of such Investment or shall result therefrom and (C) to the extent practicable, such Investment shall be made as a loan or advance evidenced by an Intercompany Note,

(u) Investments by any Borrower or any Subsidiary in Global Holdings and its Subsidiaries to satisfy employment obligations to foreign expatriate employees in an aggregate amount not to exceed $200,000 at any time outstanding which are subsequently reimbursed by Global Holdings and its Subsidiaries within sixty (60) days of such Investment,

(v) [intentionally omitted],

(w) Investments by any Loan Party of the drilling rigs described in clause (s) of the definition of Permitted Disposition into Global Holdings or any Foreign Subsidiary comprising the Colombian Group in order to facilitate Dispositions of such rigs (or Foreign Subsidiary) to a third party in accordance with clause (s) of the definition of Permitted Disposition, and

(x) other Investments (other than Acquisitions) so long as the Payment Conditions are satisfied.

“Permitted Liens” means:

(a)	Liens granted to, or for the benefit of, Agent to secure the Obligations,

(b)

Liens for Taxes (including, without limitation, Property Taxes), assessments, or other governmental charges (i) which are being actively contested in good faith by appropriate proceedings and for which adequate reserves have been established in compliance with GAAP and (ii) with respect to which the failure to make payment could not reasonably be expected to result in a Material Adverse Effect, other than in any case any such Liens that have priority over Agent’s Liens,

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(c)

judgment and attachment Liens not giving rise to an Event of Default, provided that (i) any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and (ii) no action to enforce such Lien has been commenced;

(d)

Liens set forth on Schedule P-2 to this Agreement and any modifications, replacements, renewals or extensions thereof; provided that (i) such Liens shall not be modified or amended to secure more than the amount of the obligations which they secure on the Closing Date and (ii) such Liens do not extend to any additional Property other than after acquired Property and proceeds and products thereof,

(e)

any interest or title of a lessor or sublessor under any operating lease entered into by any Borrower or its respective Subsidiaries; provided that (i) such lease is entered into, and any Liens arise, in the ordinary course of business, (ii) any Liens secure obligations which are not overdue for a period of more than thirty days or if more than thirty days overdue, are being contested in good faith by appropriate procedures or proceedings and for which adequate reserves have been established, (iii) any Liens secure only the obligations arising under such lease and not debt for borrowed money, and (iv) any Liens only encumber property that is subject to such lease (including Property located on the premises subject to the lease) and insurance proceeds thereof,

(f)	Liens solely on cash collateral (in an amount not to exceed 105% of such Permitted Indebtedness) to secure Indebtedness permitted by clause (b) of the definition of “Permitted Indebtedness”,

(g)

Liens imposed by law, such as materialmen’s, mechanics’, carriers’, warehouseman’s, workmen’s, suppliers’, landlords’, maritime, operators’, vendors’ and repairmen’s liens, and other similar liens (including Liens of sellers of goods arising under Article 2 of the UCC or similar provisions of applicable law) arising in the ordinary course of business securing obligations which are not overdue for a period of more than thirty (30) days or if more than thirty (30) days overdue, (i) are being contested in good faith by appropriate procedures or proceedings and for which adequate reserves have been established and (ii) with respect to which the failure to make payment does not materially adversely affect the value or the use by any Borrower or its respective Subsidiaries of the Property subject to such Liens,

(h)	Liens arising in the ordinary course of business out of pledges or deposits under workers compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation to secure public or statutory obligations,

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(i)	Liens on amounts deposited to secure Parent’s and its Subsidiaries obligations in connection with the making or entering into of bids, tenders, or leases in the ordinary course of business and not in connection with the borrowing of money,

(j)

Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business and cash deposits to secure letters of credit in respect of the foregoing,

(k)

encumbrances consisting of easements, zoning restrictions, or other restrictions on the use of Real Property that do not (individually or in the aggregate) materially affect the value of the assets encumbered thereby or materially impair the ability of any Borrower or its respective Subsidiaries to use such assets in its business, and none of which is violated in any material aspect by existing or proposed structures or land use,

(l)	non-exclusive licenses of patents, trademarks, copyrights, and other intellectual property rights in the ordinary course of business,

(m)

any interest or title of a licensor or sublicensor under any license entered into by any Borrower or its respective Subsidiaries; provided that (a) such license is entered into in the ordinary course of business, (ii) such interest or title of licensor or sublicensor does not interfere in any material respect in the business of such Borrower or such Subsidiaries, (iii) such interest or title, if in the form of a Lien, secures only the obligations arising under such license, and (iv) such interest or title only affects the property subject to such license or the proceeds thereof,

(n)	Liens that are replacements of Permitted Liens to the extent that the original Indebtedness is the subject of permitted Refinancing Indebtedness and so long as the replacement Liens only encumber those assets that secured the original Indebtedness,

(o)	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 and burdening only deposit accounts or other funds maintained with a depository institution,

(p)	[intentionally omitted],

(q)	Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods,

(r)	Liens solely on any cash earnest money deposits made by a Loan Party or any of its Subsidiaries in connection with any letter of intent or purchase agreement with respect to a Permitted Acquisition,

(s)	[intentionally omitted],

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(t)

Liens securing the Obligations (under and as defined in the Senior Secured Notes Indenture as in effect on the date hereof or as amended, restated, supplemented or otherwise modified in accordance with Section 6.6(b)(iii) of this Agreement), and any extensions, refinancings, refundings, replacements and renewals in respect thereof made in accordance with Section 6.6(b)(iii) of this Agreement and the Intercreditor Agreement, so long as, in each case, such Liens are subject to the terms and conditions of the Intercreditor Agreement,

(u)	Liens arising from precautionary UCC financing statements regarding operating leases entered into by any Borrower or any of their respective Subsidiaries in the ordinary course of business,

(v)

Liens (i)(A) on advances of cash or Liquid Investments in favor of the seller of any property to be acquired in connection with a Permitted Acquisition, which advances shall be applied against the purchase price for such Permitted Acquisition and (B) consisting of an agreement to dispose of any property in a Permitted Disposition and (ii) on cash earnest money deposits to secure performance made in connection with any letter of intent or purchase agreement not prohibited hereby,

(w)

Liens securing Indebtedness permitted by clause (x) the definition of “Permitted Indebtedness”, so long as, in each case, such Liens are subject to the terms and conditions of the Intercreditor Agreement on terms identical to the Liens with respect to the Indebtedness issued under the Senior Secured Notes Documents,

(x)

“protective” Liens granted in connection with sales permitted hereunder that are intended to be “true sales” or bailment, storage or similar arrangements in which a counterparty holds title to the assets that are the subject of such transaction, and precautionary UCC financing statement filings made in respect of consignments,

(y)	Liens arising out of any conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into in the ordinary course of business,

(z)	customary set off and netting rights and related settlement procedures under any Hedging Agreement permitted hereunder, and

(aa)	other Liens (excluding Liens on ABL Priority Collateral) securing obligations, actual or contingent, in an aggregate principal amount not greater than $10,000,000.00.

“Permitted Protest” means the right of any Loan Party or any of its Subsidiaries to protest any Lien (other than any Lien that secures the Obligations), Taxes, or rental payment; provided, that (a) a reserve with respect to such obligation is established on such Loan Party’s or its Subsidiaries’ books and records in such amount as is required under GAAP, (b) any such protest is instituted promptly and prosecuted diligently by such Loan Party or its Subsidiary, as applicable, in good faith, and (c) Agent is satisfied that, while any such protest is pending, there will be no impairment of the enforceability, validity, or priority of any of Agent’s Liens.

“Person” means natural persons, corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships, joint ventures, trusts, land trusts, business trusts, or other organizations, irrespective of whether they are legal entities, and governments and agencies and political subdivisions thereof.

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“Plan of Reorganization” has the meaning specified therefor in the preamble to this Agreement.

“Platform” has the meaning specified therefor in Section 17.9(c) of this Agreement.

“PNC” has the meaning specified therefor in the preamble to this Agreement and shall extend to all of its successors and assigns.

“PNC Base Rate” shall mean the base commercial lending rate of PNC as publicly announced to be in effect from time to time, such rate to be adjusted automatically, without notice, on the effective date of any change in such rate. This rate of interest is determined from time to time by PNC as a means of pricing some loans to its customers and is neither tied to any external rate of interest or index nor does it necessarily reflect the lowest rate of interest actually charged by PNC to any particular class or category of customers of PNC.

“Projections” means (x) with respect to fiscal year ending December 31, 2020, the financial projections referenced in Section 3.1(i) and (y) with respect to any fiscal year thereafter, the Projections delivered pursuant to Schedule 5.1 to this Agreement for such fiscal year.

“Property” of any Person means any property or assets (whether real, personal, or mixed, tangible or intangible) of such Person.

“Property Taxes” means all real property Taxes, personal property Taxes and similar ad valorem Taxes.

“Pro Rata Share” means, as of any date of determination:

(a) with respect to a Lender’s obligation to make all or a portion of the Revolving Loans, with respect to such Lender’s right to receive payments of interest, fees, and principal with respect to the Revolving Loans, and with respect to all other computations and other matters related to the Revolver Commitments or the Revolving Loans, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of all Lenders,

(b) with respect to a Lender’s obligation to participate in the Letters of Credit, with respect to such Lender’s obligation to reimburse Issuing Bank, and with respect to such Lender’s right to receive payments of Letter of Credit Fees, and with respect to all other computations and other matters related to the Letters of Credit, the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of all Lenders; provided, that if all of the Revolving Loans have been repaid in full and all Revolver Commitments have been terminated, but Letters of Credit remain outstanding, Pro Rata Share under this clause shall be the percentage obtained by dividing (A) the Letter of Credit Exposure of such Lender, by (B) the Letter of Credit Exposure of all Lenders, and

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(c) with respect to all other matters and for all other matters as to a particular Lender (including the indemnification obligations arising under Section 15.7 of this Agreement), the percentage obtained by dividing (i) the Revolving Loan Exposure of such Lender, by (ii) the aggregate Revolving Loan Exposure of all Lenders, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to Section 13.1; provided, that if all of the Loans have been repaid in full and all Commitments have been terminated, Pro Rata Share under this clause shall be the percentage obtained by dividing (A) the Letter of Credit Exposure of such Lender, by (B) the Letter of Credit Exposure of all Lenders.

“Protective Advances” has the meaning specified therefor in Section 2.3(d)(i) of this Agreement.

“Public Lender” has the meaning specified therefor in Section 17.9(c) of this Agreement.

“Published Rate” shall mean the rate of interest published each Business Day in the Wall Street Journal “Money Rates” listing under the caption “London Interbank Offered Rates” for a one month period (or, if no such rate is published therein for any reason, then the Published Rate shall be the LIBOR Rate for a one month period as published in another publication selected by Agent).

“Purchase Price” means, with respect to any Acquisition, an amount equal to the aggregate consideration, whether cash, property or securities (including the fair market value of any Equity Interests of Parent issued in connection with such Acquisition and including the maximum amount of Earn-Outs), paid or delivered by a Loan Party or one of its Subsidiaries in connection with such Acquisition (whether paid at the closing thereof or payable thereafter and whether fixed or contingent), but excluding therefrom (a) any cash of the seller and its Affiliates used to fund any portion of such consideration, and (b) any cash or Liquid Investments acquired in connection with such Acquisition.

“Qualified Cash” means, as of any date of determination, the amount of unrestricted cash and Liquid Investments of the Loan Parties and their Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any combination thereof, and which such Deposit Account or Securities Account is (i) maintained at PNC or (ii) subject to a Control Agreement in favor of PNC, in each case, is maintained by a branch office of the applicable bank or securities intermediary located within the United States.

“Qualified ECP Loan Party” shall mean each Loan Party that on the Eligibility Date is (a) a corporation, partnership, proprietorship, organization, trust, or other entity other than a “commodity pool” as defined in Section 1a(10) of the Commodity Exchange Act and CFTC regulations thereunder that has total assets exceeding $10,000,000 or (b) an Eligible Contract Participant that can cause another person to qualify as an Eligible Contract Participant on the Eligibility Date under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act by entering into or otherwise providing a “letter of credit or keepwell, support, or other agreement” for purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

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“Qualified Equity Interests” means and refers to any Equity Interests issued by Parent (and not by one or more of its Subsidiaries) that is not a Disqualified Equity Interest.

“Real Property” means any estates or interests in real property now owned or hereafter acquired by any Loan Party or one of its Subsidiaries and the improvements thereto.

“Real Property Collateral” means any Real Property hereafter acquired by any Loan Party to the extent any mortgage is granted to secure the Senior Secured Notes (or, if the Senior Secured Notes have been paid in full, to the extent the aggregate book value or aggregate fair market value of all Real Property acquired after the Closing Date exceeds $5,000,000, then any such after acquired Real Property).

“Receivable Reserves” means, as of any date of determination, those reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including Landlord Reserves for books and records locations and reserves for rebates, discounts, warranty claims, and returns) with respect to the Eligible Accounts or the Maximum Revolver Amount.

“Record” means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

“Refinancing Indebtedness” means refinancings, renewals, or extensions of Indebtedness so long as:

(a) such refinancings, renewals, or extensions do not result in an increase in the principal amount of the Indebtedness so refinanced, renewed, or extended, other than by the amount of premiums paid thereon and the fees and expenses incurred in connection therewith and by the amount of unfunded commitments with respect thereto,

(b) such refinancings, renewals, or extensions do not result in a shortening of the final stated maturity or the average weighted maturity (measured as of the refinancing, renewal, or extension) of the Indebtedness so refinanced, renewed, or extended, nor are they on terms or conditions that, taken as a whole, are or could reasonably be expected to be materially adverse to the interests of the Lenders,

(c) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension must include subordination terms and conditions that are at least as favorable to the Lender Group as those that were applicable to the refinanced, renewed, or extended Indebtedness,

(d) the Indebtedness that is refinanced, renewed, or extended is not recourse to any Person that is liable on account of the Obligations other than those Persons which were obligated with respect to the Indebtedness that was refinanced, renewed, or extended,

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(e) if the Indebtedness that is refinanced, renewed or extended was unsecured, such refinancing, renewal or extension shall be unsecured, and

(f) if the Indebtedness that is refinanced, renewed, or extended was secured (i) such refinancing, renewal, or extension shall be secured by substantially the same or less collateral as secured such refinanced, renewed or extended Indebtedness on terms no less favorable to Agent or the Lender Group and (ii) the Liens securing such refinancing, renewal or extension shall not have a priority more senior than the Liens securing such Indebtedness that is refinanced, renewed or extended.

“Register” has the meaning set forth in Section 13.1(h) of this Agreement.

“Registered Loan” has the meaning set forth in Section 13.1(h) of this Agreement.

“Related Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course and that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender, or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

“Relevant Governmental Authority” means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York or any successor thereto.

“Remedial Action” means all actions taken to (a) clean up, remove, remediate, contain, treat, monitor, assess, evaluate, or in any way address Hazardous Materials in the indoor or outdoor environment, (b) prevent or minimize a release or threatened release of Hazardous Materials so they do not migrate or endanger or threaten to endanger public health or welfare or the indoor or outdoor environment, (c) restore or reclaim natural resources or the environment, (d) perform any pre-remedial studies, investigations, or post-remedial operation and maintenance activities, or (e) conduct any other actions with respect to Hazardous Materials required by Environmental Laws.

“Replacement Lender” has the meaning specified therefor in Section 2.15(b) of this Agreement.

“Report” has the meaning specified therefor in Section 15.16 of this Agreement.

“Reportable Compliance Event” means that any Covered Entity becomes a Sanctioned Person, or is charged by indictment, criminal complaint or similar charging instrument, arraigned, or custodially detained in connection with any Anti-Terrorism Law or any predicate crime to any Anti-Terrorism Law, or has knowledge of facts or circumstances to the effect that it is reasonably likely that any aspect of its operations is in actual or probable violation of any Anti-Terrorism Law.

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“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA as to which the PBGC has not waived the requirements of Section 4043(a) of ERISA that is be notified of such event.

“Required Lenders” means, at any time, Lenders having or holding more than 50% of the aggregate Revolving Loan Exposure of all Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Required Lenders, and (ii) at any time there are two or more Lenders (who are not Affiliates of one another or Defaulting Lenders), “Required Lenders” must include at least two Lenders (who are not Affiliates of one another).

“Reserve Percentage” shall mean as of any day the maximum effective percentage in effect on such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the reserve requirements (including supplemental, marginal and emergency reserve requirements) with respect to eurocurrency funding (currently referred to as “Eurocurrency Liabilities”).

“Reserves” means, as of any date of determination, Inventory Reserves, Receivable Reserves, Bank Product Reserves and those other reserves that Agent deems necessary or appropriate, in its Permitted Discretion and subject to Section 2.1(c), to establish and maintain (including reserves with respect to (a) sums that any Loan Party or its Subsidiaries are required to pay under any Section of this Agreement or any other Loan Document (such as Taxes, assessments, insurance premiums, or, in the case of leased assets, rents or other amounts payable under such leases) and has failed to pay, and (b) amounts owing by any Loan Party or its Subsidiaries to any Person to the extent secured by a Lien on, or trust over, any of the Collateral (other than a Permitted Lien), which Lien or trust, in the Permitted Discretion of Agent likely would have a priority superior to Agent’s Liens (such as Liens or trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or suppliers, or Liens or trusts for ad valorem, excise, sales, or other Taxes where given priority under applicable law) in and to such item of the Collateral) with respect to the Borrowing Base or the Maximum Revolver Amount.

“Restricted Payment” means, with respect to any Person, (a) any direct or indirect dividend or distribution (whether in cash, securities or other Property) on, or any direct or indirect payment of any kind or character (whether in cash, securities or other Property) in consideration for or otherwise in connection with the ownership of, or any retirement, purchase, redemption, conversion, exchange, sinking fund or other acquisition of, any Equity Interest of such Person, or any options, warrants or rights to purchase or acquire any such Equity Interest of such Person, (b) principal or interest payments (in cash, Property or otherwise) on, or redemptions of, subordinated debt of such Person or (c) principal payments (in cash, Property or otherwise) on, or redemptions of, Senior Debt of such Person; provided that the term “Restricted Payment” shall not include (i) any dividend or distribution payable solely in Equity Interests of any Borrower or warrants, options or other rights to purchase such Equity Interests, (ii) settlement in connection with the cashless exercise of employee, officer or director stock options or similar benefit plans, (iii) payments for fractional shares in connection with settlement under employee benefit plans, (iv) principal payments on, or redemptions of, the Obligations and (v) principal payments on, or

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redemptions of, Senior Debt to the extent that such payment or redemption is required under the terms of the agreement or instrument creating, establishing or otherwise evidencing such Senior Debt. For the avoidance of doubt, issuances of Equity Interests or any options, warrants or rights to purchase or acquire such Equity Interests to an employee, director or officer of the Borrower and its Subsidiaries in the ordinary course of business pursuant to a stock plan shall not be considered a Restricted Payment.

“Revolver Commitment” means, with respect to each Revolving Lender, its Revolver Commitment, and, with respect to all Revolving Lenders, their Revolver Commitments, in each case as such Dollar amounts are set forth beside such Revolving Lender’s name under the applicable heading on Schedule C to this Agreement or in the Assignment and Acceptance pursuant to which such Revolving Lender became a Revolving Lender under this Agreement, as such amounts may be reduced or increased from time to time pursuant to assignments made in accordance with the provisions of Section 13.1 of this Agreement, and as such amounts may be decreased by the amount of reductions in the Revolver Commitments made in accordance with Section 2.4(c) hereof.

“Revolver Usage” means, as of any date of determination, the sum of (a) the amount of outstanding Revolving Loans (inclusive of Swing Loans and Protective Advances), plus (b) the amount of the Letter of Credit Usage.

“Revolving Lender” means a Lender that has a Revolving Loan Exposure or Letter of Credit Exposure.

“Revolving Loan Exposure” means, with respect to any Revolving Lender, as of any date of determination (a) prior to the termination of the Revolver Commitments, the amount of such Lender’s Revolver Commitment, and (b) after the termination of the Revolver Commitments, the aggregate outstanding principal amount of the Revolving Loans of such Lender.

“Revolving Loans” has the meaning specified therefor in Section 2.1(a) of this Agreement.

“Sanctioned Country” means a country subject to a sanctions program maintained under any Anti-Terrorism Law.

“Sanctioned Person” means any individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated, prohibited, sanctioned or debarred person, group, regime, entity or thing, or subject to any limitations or prohibitions (including but not limited to the blocking of property or rejection of transactions), under any Anti-Terrorism Law.

“S&P” means S&P Global Ratings, a division of S&P Global, Inc.

“SEC” means the United States Securities and Exchange Commission and any successor thereto.

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“Secured Parties” shall mean, collectively, the Administrative Agent, each Lender, each Issuing Bank, each bank that is party to any Hedge Agreement and each sub-agent appointed pursuant to Section 15.1 by the Administrative Agent.

“Securities Account” means a securities account (as that term is defined in the Code).

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Senior Debt” means Indebtedness of the type described in clause (a) of the definition of “Indebtedness” contained herein that is not by its terms contractually subordinated.

“Senior Secured Notes” means the $78,125,000 in aggregate principal amount of the Parent’s Senior Secured Floating Rate Notes due 2025.

“Senior Secured Notes Collateral Agent” means Wilmington Trust, National Association as the collateral agent under the Senior Secured Notes Indenture.

“Senior Secured Notes Documents” means the Senior Secured Notes Indenture and the other “Notes Documents” under and as defined in the Senior Secured Notes Indenture, as each document may be amended, restated, supplemented or otherwise modified from time to time.

“Senior Secured Notes Indenture” means the Indenture relating to the Senior Secured Notes dated as of May 29, 2020, among the Parent, the guarantors party thereto and Wilmington Trust, National Association, as trustee, as such document may be amended, restated, supplemented or otherwise modified from time to time.

“Settlement” has the meaning specified therefor in Section 2.3(e)(i) of this Agreement.

“Settlement Date” has the meaning specified therefor in Section 2.3(e)(i) of this Agreement.

“Sole Book Runners” has the meaning set forth in the preamble to this Agreement.

“Sole Lead Arrangers” has the meaning set forth in the preamble to this Agreement.

“Solvent” means, with respect to any Person as of any date of determination, that (a) at fair valuations, the sum of such Person’s debts (including contingent liabilities) is less than all of such Person’s assets, (b) such Person is not engaged or about to engage in a business or transaction for which the remaining assets of such Person are unreasonably small in relation to the business or transaction or for which the property remaining with such Person is an unreasonably small capital, (c) such Person has not incurred and does not intend to incur, or reasonably believe that it will incur, debts beyond its ability to pay such debts as they become due (whether at maturity or otherwise), and (d) such Person is “solvent” or not “insolvent”, as applicable within the meaning

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given those terms and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Statement of Financial Accounting Standard No. 5).

“Specified Transaction” means, any Investment, prepayment of Indebtedness or Restricted Payment (or declaration of any prepayment or Restricted Payment).

“Standard Letter of Credit Practice” means, for Issuing Bank, any domestic or foreign law or letter of credit practices applicable in the city in which Issuing Bank issued the applicable Letter of Credit or, for its branch or correspondent, such laws and practices applicable in the city in which it has advised, confirmed or negotiated such Letter of Credit, as the case may be, in each case, (a) which letter of credit practices are of banks that regularly issue letters of credit in the particular city, and (b) which laws or letter of credit practices are required or permitted under ISP or UCP, as chosen in the applicable Letter of Credit.

“Subsidiary” of a Person means a corporation, partnership, limited liability company, or other entity in which that Person directly or indirectly owns or controls the Equity Interests having ordinary voting power to elect a majority of the Board of Directors of such corporation, partnership, limited liability company, or other entity.

“Supermajority Lenders” means, at any time, Revolving Lenders having or holding more than 66 2/3% of the aggregate Revolving Loan Exposure of all Revolving Lenders; provided, that (i) the Revolving Loan Exposure of any Defaulting Lender shall be disregarded in the determination of the Supermajority Lenders, and (ii) at any time there are two or more Revolving Lenders (who are not Affiliates of one another), “Supermajority Lenders” must include at least two Revolving Lenders (who are not Affiliates of one another or Defaulting Lenders).

“Swap Obligation” means, with respect to any Loan Party, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Hedging Arrangements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedging Arrangements, (a) for any date on or after the date such Hedging Arrangements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Arrangements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedging Arrangements (which may include a Lender or any Affiliate of a Lender).

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“Swing Lender” means PNC or any other Lender that, at the request of Borrowers and with the consent of Agent agrees, in such Lender’s sole discretion, to become the Swing Lender under Section 2.3(b) of this Agreement.

“Swing Loan” has the meaning specified therefor in Section 2.3(b) of this Agreement.

“Swing Loan Exposure” means, as of any date of determination with respect to any Lender, such Lender’s Pro Rata Share of the Swing Loans on such date.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (i) a so-called synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means any taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.

“Tax Group” means any member of the “affiliated group” (as determined under Section 1504 of the Code) of which the Borrower is a member.

“Tax Lender” has the meaning specified therefor in Section 14.2(a) of this Agreement.

“Termination Event” means (i) a Reportable Event with respect to a Benefit Plan, (ii) the withdrawal of any Loan Party or any ERISA Affiliate from a Benefit Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (iii) the filing of a notice of intent to terminate a Benefit Plan or the treatment of a Benefit Plan amendment as a termination under Section 4041(c) of ERISA, (iv) the institution of proceedings to terminate a Benefit Plan by the PBGC, or (v) any other event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Benefit Plan.

“Trademark Security Agreement” has the meaning specified therefor in the Guaranty and Security Agreement.

“Transaction Agreement” means the transaction agreement dated as of, and filed in the United States Bankruptcy Court for the Southern District of Texas on, May 9, 2020, among the Consenting Term Lenders and the Participating Noteholders (each as defined therein) [Docket No. 316].

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“Transaction Documents” shall mean the Loan Documents, the Senior Secured Notes Documents, the Convertible Notes Documents, the Plan of Reorganization and the Confirmation Order.

“Transactions” shall mean, collectively, the transactions to occur pursuant to the Transaction Documents, including (a) the execution, delivery and performance of the Loan Documents, the creation of Liens pursuant thereto, and the initial borrowing hereunder and the use of proceeds thereof; (b) the execution, delivery and performance of the Convertible Notes Documents and the issuance of the Convertible Notes and the use of proceeds thereof; (c) the execution, delivery and performance of the Senior Secured Notes Documents and the issuance of the Senior Secured Notes and the use of proceeds thereof; (d) the automatic repayment in full of, and the automatic termination of all obligations and commitments under, the Existing DIP Credit Agreement; (e) the repayment in full of, and the termination of all obligations and commitments under, the Existing Term Loan Credit Agreement; (f) the repayment in full of, and the termination of all obligations and commitments under, the 2014 Notes; (g) entry of the Confirmation Order; (h) the transactions contemplated by the Plan of Reorganization and (i) the payment of all fees and expenses to be paid and owing in connection with the foregoing.

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits 2007 Revision, International Chamber of Commerce Publication No. 600 and any version or revision thereof accepted by Issuing Bank for use.

“Unfinanced Capital Expenditures” means Capital Expenditures (a) not financed with the proceeds of any incurrence of Indebtedness (other than the incurrence of any Revolving Loans), the proceeds of any sale or issuance of Equity Interests or equity contributions, the proceeds of any asset sale (other than the sale of Inventory in the ordinary course of business) or any insurance proceeds, and (b) that are not reimbursed by a third person (excluding any Loan Party or any of its Affiliates) in the period such expenditures are made pursuant to a written agreement.

“United States” means the United States of America.

“Unused Line Fee” has the meaning specified therefor in Section 2.10(b) of this Agreement.

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed, extended, amended or replaced.

“Usage Amount” has the meaning specified therefor in Section 2.10(b) of this Agreement.

“Voidable Transfer” has the meaning specified therefor in Section 17.8 of this Agreement.

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“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the Write-Down and Conversion Powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.2. Accounting Terms. All accounting terms not specifically defined herein shall be construed in accordance with GAAP applied on a consistent basis with those applied in the preparation of the Financial Statements delivered to Agent for the fiscal year ending December 31, 2018; provided, that if Administrative Borrower notifies Agent that Borrowers request an amendment to any provision hereof to eliminate the effect of any Accounting Change occurring after the Closing Date or in the application thereof on the operation of such provision (or if Agent notifies Administrative Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such Accounting Change or in the application thereof, then Agent and Borrowers agree that they will negotiate in good faith amendments to the provisions of this Agreement that are directly affected by such Accounting Change with the intent of having the respective positions of the Lenders and Borrowers after such Accounting Change conform as nearly as possible to their respective positions immediately before such Accounting Change took effect and, until any such amendments have been agreed upon and agreed to by the Required Lenders, the provisions in this Agreement shall be calculated as if no such Accounting Change had occurred. When used herein, the term “financial statements” shall include the notes (if any) and schedules thereto. Whenever the term “Parent” or “Borrowers” is used in respect of a financial covenant or a related definition, it shall be understood to mean the Loan Parties and their Subsidiaries on a consolidated basis, unless the context clearly requires otherwise. Notwithstanding anything to the contrary contained herein, (a) all financial statements delivered hereunder shall be prepared, and all financial covenants contained herein shall be calculated, without giving effect to any election under the Statement of Financial Accounting Standards Board’s Accounting Standards Codification Topic 825 (or any similar accounting principle) permitting a Person to value its financial liabilities or Indebtedness at the fair value thereof, and (b) the term “unqualified opinion” as used herein to refer to opinions or reports provided by accountants shall mean an opinion or report that is (i) unqualified, and (ii) does not include any explanation, supplemental comment, or other comment concerning the ability of the applicable Person to continue as a going concern or concerning the scope of the audit. Notwithstanding anything contained herein to the contrary, for all purposes of this Agreement, including the construction of relevant accounting terms, changes to GAAP resulting from the currently proposed changes to FASB ASC Topic 606, Revenue from Contracts with Customers, shall, once adopted and in effect, be deemed to apply automatically to this Agreement without the requirement of any modification or amendment hereto.

1.3. Code. Any terms used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein; provided, that to the extent that the Code is used to define any term herein and such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.

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1.4. Construction. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular provision of this Agreement or such other Loan Document, as the case may be. Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable (subject to any restrictions on such alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements set forth herein). The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties. Any reference herein or in any other Loan Document to the satisfaction, repayment, or payment in full of the Obligations shall mean (a) the payment or repayment in full in immediately available funds of (i) the principal amount of, and interest accrued and unpaid with respect to, all outstanding Loans, together with the payment of any premium applicable to the repayment of the Loans, (ii) all Lender Group Expenses that have accrued and are unpaid regardless of whether demand has been made therefor, and (iii) all fees or charges that have accrued hereunder or under any other Loan Document (including the Letter of Credit Fee and the Unused Line Fee) and are unpaid, (b) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Letter of Credit Collateralization, (c) in the case of obligations with respect to Bank Products (other than Hedge Obligations), providing Bank Product Collateralization, (d) the receipt by Agent of cash collateral in order to secure any other contingent Obligations (i) for which a claim or demand for payment has been made on or prior to such time or (ii) in respect of matters or circumstances known to Agent or a Lender at such time that are reasonably expected to result in any loss, cost, damage, or expense (including attorneys’ fees and legal expenses), in each case such cash collateral to be in such amount as Agent reasonably determines is appropriate to secure such contingent Obligations, (e) the payment or repayment in full in immediately available funds of all other outstanding Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Hedge Agreements provided by Hedge Providers) other than (i) unasserted contingent indemnification Obligations, (ii) any Bank Product Obligations (other than Hedge Obligations) that, at such time, are allowed by the applicable Bank Product Provider to remain outstanding without being required to be repaid or cash collateralized, and (iii) any Hedge Obligations that, at such time, are allowed by the applicable Hedge Provider to remain outstanding without being required to be repaid, and (f) the termination of all of the Commitments of the Lenders. Any reference herein to any Person shall be construed to include such Person’s successors and assigns. Any requirement of a writing contained herein or in any other Loan Document shall be satisfied by the transmission of a Record.

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1.5. Time References. Unless the context of this Agreement or any other Loan Document clearly requires otherwise, all references to time of day refer to Eastern standard time or Eastern daylight time, as in effect in East Brunswick, New Jersey on such day. For purposes of the computation of a period of time from a specified date to a later specified date, unless otherwise expressly provided, the word “from” means “from and including” and the words “to” and “until” each means “to and including”; provided, that with respect to a computation of fees or interest payable to Agent or any Lender, such period shall in any event consist of at least one full day.

1.6. Schedules and Exhibits. All of the schedules and exhibits attached to this Agreement shall be deemed incorporated herein by reference.

1.7. LIBOR Notification.. Section 2.14 of this Agreement provides a mechanism for determining an alternate rate of interest in the event that the London interbank offered rate is no longer available or in certain other circumstances. Agent does not warrant or accept any responsibility for and shall not have any liability with respect to, the administration, submission or any other matter related to the London interbank offered rate or other rates in the definition of “LIBOR Rate” or with respect to any alternative or successor rate thereto, or replacement rate therefor.

2.	LOANS AND TERMS OF PAYMENT..

2.1. Revolving Loans.

(a) Subject to the terms and conditions of this Agreement, and during the term of this Agreement, each Revolving Lender agrees (severally, not jointly or jointly and severally) to make revolving loans (“Revolving Loans”) to Borrowers in an amount at any one time outstanding not to exceed the lesser of:

(i)	such Lender’s Revolver Commitment, or

(ii)	such Lender’s Pro Rata Share of an amount equal to the lesser of:

(A) the amount equal to (1) the Maximum Revolver Amount, less (2) the sum of (y) the Letter of Credit Usage at such time, plus (z) the principal amount of Swing Loans outstanding at such time, and

(B) the amount equal to (1) the Borrowing Base as of such date (based upon the most recent Borrowing Base Certificate delivered by Borrowers to Agent), less (2) the sum of (x) the Letter of Credit Usage at such time, plus (y) the principal amount of Swing Loans outstanding at such time.

(b) Amounts borrowed pursuant to this Section 2.1 may be repaid and, subject to the terms and conditions of this Agreement, reborrowed at any time during the term of this Agreement. The outstanding principal amount of the Revolving Loans, together with interest accrued and unpaid thereon, shall constitute Obligations and shall be due and payable on the Maturity Date or, if earlier, on the date on which they otherwise become due and payable pursuant to the terms of this Agreement.

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(c) Anything to the contrary in this Section 2.1 notwithstanding, Agent shall have the right (but not the obligation) at any time, in the exercise of its Permitted Discretion, to establish and increase or decrease Reserves and against the Borrowing Base or the Maximum Revolver Amount. The amount of any Reserve established by Agent, and any changes to the eligibility criteria set forth in the definitions of Eligible Accounts and Eligible Inventory shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such reserve or change in eligibility and shall not be duplicative of any other reserve established and currently maintained or eligibility criteria.

2.2. [Intentionally Omitted].

2.3. Borrowing Procedures and Settlements..

(a) Procedure for Borrowing Revolving Loans. Each Borrowing shall be made by a written request (each, a “Borrowing Request”) by an Authorized Person delivered to Agent (which may be delivered through Agent’s electronic platform or portal) and received by Agent no later than 1:00 p.m. (i) on the Business Day that is the requested Funding Date in the case of a request for a Swing Loan, (ii) on the Business Day that is one Business Day prior to the requested Funding Date in the case of a request for a Base Rate Loan, and (iii) on the Business Day that is three Business Days prior to the requested Funding Date in the case of all other requests, specifying (A) the amount of such Borrowing, and (B) the requested Funding Date (which shall be a Business Day); provided, that Agent may, in its sole discretion, elect to accept as timely requests that are received later than 1:00 p.m. on the applicable Business Day. All Borrowing Requests which are not made on-line via Agent’s electronic platform or portal shall be subject to (and unless Agent elects otherwise in the exercise of its sole discretion, such Borrowings shall not be made until the completion of) Agent’s authentication process (with results satisfactory to Agent) prior to the funding of any such requested Revolving Loan.

(b) Making of Swing Loans. In the case of a Revolving Loan and so long as any of (i) the aggregate amount of Swing Loans made since the last Settlement Date, minus all payments or other amounts applied to Swing Loans since the last Settlement Date, plus the amount of the requested Swing Loan does not exceed $7,500,000, or (ii) Swing Lender, in its sole discretion, agrees to make a Swing Loan notwithstanding the foregoing limitation, Swing Lender shall make a Revolving Loan (any such Revolving Loan made by Swing Lender pursuant to this Section 2.3(b) being referred to as a “Swing Loan” and all such Revolving Loans being referred to as “Swing Loans”) available to Borrowers on the Funding Date applicable thereto by transferring immediately available funds in the amount of such Borrowing to the Designated Account. Each Swing Loan shall be deemed to be a Revolving Loan hereunder and shall be subject to all the terms and conditions (including Section 3) applicable to other Revolving Loans, except that all payments (including interest) on any Swing Loan shall be payable to Swing Lender solely for its own account. Subject to the provisions of Section 2.3(d)(ii), Swing Lender shall not make and shall not be obligated to make any Swing Loan if Swing Lender has actual knowledge that (i) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing, or (ii) the requested Borrowing would exceed the Availability on such Funding Date. Swing Lender shall not otherwise be required to

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determine whether the applicable conditions precedent set forth in Section 3 have been satisfied on the Funding Date applicable thereto prior to making any Swing Loan. The Swing Loans shall be secured by Agent’s Liens, constitute Revolving Loans and Obligations, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Loans.

(i) In the event that Swing Lender is not obligated to make a Swing Loan, then after receipt of a request for a Borrowing pursuant to Section 2.3(a)(i), Agent shall notify the Lenders by telecopy, telephone, email, or other electronic form of transmission, of the requested Borrowing; such notification to be sent on the Business Day that is (A) in the case of a Base Rate Loan, at least one Business Day prior to the requested Funding Date, or (B) in the case of a LIBOR Rate Loan, prior to 1:00 p.m. at least three Business Days prior to the requested Funding Date. If Agent has notified the Lenders of a requested Borrowing on the Business Day that is one Business Day prior to the Funding Date, then each Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, not later than 12:00 p.m. on the Business Day that is the requested Funding Date. After Agent’s receipt of the proceeds of such Revolving Loans from the Lenders, Agent shall make the proceeds thereof available to Borrowers on the applicable Funding Date by transferring immediately available funds equal to such proceeds received by Agent to the Designated Account; provided, that subject to the provisions of Section 2.3(d)(ii), no Lender shall have an obligation to make any Revolving Loan, if (1) one or more of the applicable conditions precedent set forth in Section 3 will not be satisfied on the requested Funding Date for the applicable Borrowing unless such condition has been waived, or (2) the requested Borrowing would exceed the Availability on such Funding Date.

(ii) Unless Agent receives notice from a Lender prior to 11:30 a.m. on the Business Day that is the requested Funding Date relative to a requested Borrowing as to which Agent has notified the Lenders of a requested Borrowing that such Lender will not make available as and when required hereunder to Agent for the account of Borrowers the amount of that Lender’s Pro Rata Share of the Borrowing, Agent may assume that each Lender has made or will make such amount available to Agent in immediately available funds on the Funding Date and Agent may (but shall not be so required), in reliance upon such assumption, make available to Borrowers a corresponding amount. If, on the requested Funding Date, any Lender shall not have remitted the full amount that it is required to make available to Agent in immediately available funds and if Agent has made available to Borrowers such amount on the requested Funding Date, then such Lender shall make the amount of such Lender’s Pro Rata Share of the requested Borrowing available to Agent in immediately available funds, to Agent’s Account, no later than 12:00 p.m. on the Business Day that is the first Business Day after the requested Funding Date (in which case, the interest accrued on such Lender’s portion of such Borrowing for the Funding Date shall be for Agent’s separate account). If any Lender shall not remit the full amount that it is required to make available to Agent in immediately available funds as and when required hereby and if Agent has made available to Borrowers such amount, then that Lender shall be obligated to immediately remit such amount to Agent, together with interest at the Defaulting Lender Rate for each day until the date on which such amount is so remitted. A notice submitted by Agent to any Lender with

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respect to amounts owing under this Section 2.3(c)(ii) shall be conclusive, absent manifest error. If the amount that a Lender is required to remit is made available to Agent, then such payment to Agent shall constitute such Lender’s Revolving Loan for all purposes of this Agreement. If such amount is not made available to Agent on the Business Day following the Funding Date, Agent will notify Administrative Borrower of such failure to fund and, upon demand by Agent, Borrowers shall pay such amount to Agent for Agent’s account, together with interest thereon for each day elapsed since the date of such Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Revolving Loans composing such Borrowing.

(d) Protective Advances and Optional Overadvances.

(i) Any contrary provision of this Agreement or any other Loan Document notwithstanding (but subject to Section 2.3(d)(iv)), at any time (A) after the occurrence and during the continuance of a Default or an Event of Default, or (B) that any of the other applicable conditions precedent set forth in Section 3 are not satisfied, Agent hereby is authorized by Borrowers and the Lenders, from time to time, in Agent’s sole discretion, to make Revolving Loans to, or for the benefit of, Borrowers, on behalf of the Revolving Lenders, that Agent, in its Permitted Discretion, deems necessary or desirable (1) to preserve or protect the Collateral, or any portion thereof, or (2) to enhance the likelihood of repayment of the Obligations (other than the Bank Product Obligations) (the Revolving Loans described in this Section 2.3(d)(i) shall be referred to as “Protective Advances”). Notwithstanding the foregoing, the aggregate amount of all Protective Advances outstanding at any one time shall not exceed 10% of the Borrowing Base.

(ii) Any contrary provision of this Agreement or any other Loan Document notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as applicable, and either Agent or Swing Lender, as applicable, may, but is not obligated to, knowingly and intentionally, continue to make Revolving Loans (including Swing Loans) to Borrowers notwithstanding that an Overadvance exists or would be created thereby, so long as (A) after giving effect to such Revolving Loans, the outstanding Revolver Usage does not exceed the Borrowing Base by more than 10% of the Borrowing Base, and (B) subject to Section 2.3(d)(iv) below, after giving effect to such Revolving Loans, the outstanding Revolver Usage (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver Amount. In the event Agent obtains actual knowledge that the Revolver Usage exceeds the amounts permitted by this Section 2.3(d), regardless of the amount of, or reason for, such excess, Agent shall notify the Lenders as soon as practicable (and prior to making any (or any additional) intentional Overadvances (except for and excluding amounts charged to the Loan Account for interest, fees, or Lender Group Expenses) unless Agent determines that prior notice would result in imminent harm to the Collateral or its value, in which case Agent may make such Overadvances and provide notice as promptly as practicable thereafter), and the Lenders with Revolver Commitments thereupon shall, together with Agent, jointly determine the terms of arrangements that shall be implemented with Borrowers intended to reduce, within a reasonable time, the outstanding principal amount of the Revolving Loans to Borrowers to an amount permitted by the preceding sentence. In such circumstances, if any Lender with a Revolver Commitment objects to the proposed terms of reduction or repayment of any Overadvance, the terms of reduction or repayment thereof shall be implemented according to the determination of the Required Lenders. The foregoing provisions are meant for the benefit of the Lenders and Agent and are not meant for the benefit of Borrowers, which shall continue to be bound by the provisions of Section 2.4(e).

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(iii) Each Protective Advance and each Overadvance (each, an “Extraordinary Advance”) shall be deemed to be a Revolving Loan hereunder, except that no Extraordinary Advance shall be eligible to be a LIBOR Rate Loan. Prior to Settlement of any Extraordinary Advance, all payments with respect thereto, including interest thereon, shall be payable to Agent solely for its own account. Each Revolving Lender shall be obligated to settle with Agent as provided in Section 2.3(e) (or Section 2.3(g), as applicable) for the amount of such Lender’s Pro Rata Share of any Extraordinary Advance. The Extraordinary Advances shall be repayable on demand, secured by Agent’s Liens, constitute Obligations hereunder, and bear interest at the rate applicable from time to time to Revolving Loans that are Base Rate Loans. The provisions of this Section 2.3(d) are for the exclusive benefit of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrowers (or any other Loan Party) in any way.

(iv) Notwithstanding anything contained in this Agreement or any other Loan Document to the contrary, no Extraordinary Advance may be made by Agent if such Extraordinary Advance would cause the aggregate Revolver Usage to exceed the Maximum Revolver Amount or any Lender’s Pro Rata Share of the Revolver Usage to exceed such Lender’s Revolver Commitments; provided that Agent may make Extraordinary Advances in excess of the foregoing limitations so long as such Extraordinary Advances that cause the aggregate Revolver Usage to exceed the Maximum Revolver Amount or a Lender’s Pro Rata Share of the Revolver Usage to exceed such Lender’s Revolver Commitments are for Agent’s sole and separate account and not for the account of any Lender. No Lender shall have an obligation to settle with Agent for such Extraordinary Advances that cause the aggregate Revolver Usage to exceed the Maximum Revolver Amount or a Lender’s Pro Rata Share of the Revolver Usage to exceed such Lender’s Revolver Commitments as provided in Section 2.3(e) (or Section 2.3(g), as applicable).

(e) Settlement. It is agreed that each Lender’s funded portion of the Revolving Loans is intended by the Lenders to equal, at all times, such Lender’s Pro Rata Share of the outstanding Revolving Loans. Such agreement notwithstanding, Agent, Swing Lender, and the other Lenders agree (which agreement shall not be for the benefit of Borrowers) that in order to facilitate the administration of this Agreement and the other Loan Documents, settlement among the Lenders as to the Revolving Loans (including Swing Loans and Extraordinary Advances) shall take place on a periodic basis in accordance with the following provisions:

(i) Agent shall request settlement (“Settlement”) with the Lenders on a weekly basis, or on a more frequent basis if so determined by Agent in its sole discretion (1) on behalf of Swing Lender, with respect to the outstanding Swing Loans, (2) for itself, with respect to the outstanding Extraordinary Advances, and (3) with respect to any Loan Party’s or any of their Subsidiaries’ payments or other amounts received, as to each by notifying the Lenders by telecopy, telephone, or other similar form of transmission, of such requested Settlement, no later than 4:00 p.m. on the Business Day immediately prior to the date of such requested Settlement (the date of such requested Settlement being the “Settlement Date”). Such notice of a Settlement Date shall

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include a summary statement of the amount of outstanding Revolving Loans (including Swing Loans and Extraordinary Advances) for the period since the prior Settlement Date. Subject to the terms and conditions contained herein (including Section 2.3(g)): (y) if the amount of the Revolving Loans (including Swing Loans and Extraordinary Advances) made by a Lender that is not a Defaulting Lender exceeds such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, then Agent shall, by no later than 2:00 p.m. on the Settlement Date, transfer in immediately available funds to a Deposit Account of such Lender (as such Lender may designate), an amount such that each such Lender shall, upon receipt of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances), and (z) if the amount of the Revolving Loans (including Swing Loans and Extraordinary Advances) made by a Lender is less than such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, such Lender shall no later than 2:00 p.m. on the Settlement Date transfer in immediately available funds to Agent’s Account, an amount such that each such Lender shall, upon transfer of such amount, have as of the Settlement Date, its Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances). Such amounts made available to Agent under clause (z) of the immediately preceding sentence shall be applied against the amounts of the applicable Swing Loans or Extraordinary Advances and, together with the portion of such Swing Loans or Extraordinary Advances representing Swing Lender’s Pro Rata Share thereof, shall constitute Revolving Loans of such Lenders. If any such amount is not made available to Agent by any Lender on the Settlement Date applicable thereto to the extent required by the terms hereof, Agent shall be entitled to recover for its account such amount on demand from such Lender together with interest thereon at the Defaulting Lender Rate.

(ii) In determining whether a Lender’s balance of the Revolving Loans (including Swing Loans and Extraordinary Advances) is less than, equal to, or greater than such Lender’s Pro Rata Share of the Revolving Loans (including Swing Loans and Extraordinary Advances) as of a Settlement Date, Agent shall, as part of the relevant Settlement, apply to such balance the portion of payments actually received in good funds by Agent with respect to principal, interest, fees payable by Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral.

(iii) Between Settlement Dates, Agent, to the extent Extraordinary Advances or Swing Loans are outstanding, may pay over to Agent or Swing Lender, as applicable, any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to the Extraordinary Advances or Swing Loans. Between Settlement Dates, Agent, to the extent no Extraordinary Advances or Swing Loans are outstanding, may pay over to Swing Lender any payments or other amounts received by Agent, that in accordance with the terms of this Agreement would be applied to the reduction of the Revolving Loans, for application to Swing Lender’s Pro Rata Share of the Revolving Loans. If, as of any Settlement Date, payments or other amounts of the Loan Parties or their Subsidiaries received since the then immediately preceding Settlement Date have been applied to Swing Lender’s Pro Rata Share of the Revolving Loans other than to Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to Agent for the accounts of the Lenders, and Agent shall pay to the Lenders (other than a Defaulting Lender if

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Agent has implemented the provisions of Section 2.3(g)), to be applied to the outstanding Revolving Loans of such Lenders, an amount such that each such Lender shall, upon receipt of such amount, have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans. During the period between Settlement Dates, Swing Lender with respect to Swing Loans, Agent with respect to Extraordinary Advances, and each Lender with respect to the Revolving Loans other than Swing Loans and Extraordinary Advances, shall be entitled to interest at the applicable rate or rates payable under this Agreement on the daily amount of funds employed by Swing Lender, Agent, or the Lenders, as applicable.

(iv) Anything in this Section 2.3(e) to the contrary notwithstanding, in the event that a Lender is a Defaulting Lender, Agent shall be entitled to refrain from remitting settlement amounts to the Defaulting Lender and, instead, shall be entitled to elect to implement the provisions set forth in Section 2.3(g).

(f) Notation. Consistent with Section 13.1(h), Agent, as a non-fiduciary agent for Borrowers, shall maintain a register showing the principal amount and stated interest of the Revolving Loans, owing to each Lender, including the Swing Loans owing to Swing Lender, and Extraordinary Advances owing to Agent, and the interests therein of each Lender, from time to time and such register shall, absent manifest error, conclusively be presumed to be correct and accurate.

(g) Defaulting Lenders.

(i) Notwithstanding the provisions of Section 2.4(b)(iii), Agent shall not be obligated to transfer to a Defaulting Lender any payments made by Borrowers to Agent for the Defaulting Lender’s benefit or any proceeds of Collateral that would otherwise be remitted hereunder to the Defaulting Lender, and, in the absence of such transfer to the Defaulting Lender, Agent shall transfer any such payments (A) first, to Agent to the extent of any Extraordinary Advances that were made by Agent and that were required to be, but were not, paid by Defaulting Lender, (B) second, to Swing Lender to the extent of any Swing Loans that were made by Swing Lender and that were required to be, but were not, paid by the Defaulting Lender, (C) third, to Issuing Bank, to the extent of the portion of a Letter of Credit Disbursement that was required to be, but was not, paid by the Defaulting Lender, (D) fourth, to each Non-Defaulting Lender ratably in accordance with their Commitments (but, in each case, only to the extent that such Defaulting Lender’s portion of a Revolving Loan (or other funding obligation) was funded by such other Non-Defaulting Lender), (E) fifth, in Agent’s sole discretion, to a suspense account maintained by Agent, the proceeds of which shall be retained by Agent and may be made available to be re-advanced to or for the benefit of Borrowers (upon the request of Borrowers and subject to the conditions set forth in Section 3.2) as if such Defaulting Lender had made its portion of Revolving Loans (or other funding obligations) hereunder, and (F) sixth, from and after the date on which all other Obligations have been paid in full, to such Defaulting Lender in accordance with tier (L) of Section 2.4(b)(iii). Subject to the foregoing, Agent may hold and, in its discretion, re-lend to Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by Agent for the account of such Defaulting Lender. Solely for the purposes of voting or consenting to matters with respect to the Loan Documents (including the calculation of Pro Rata

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Share in connection therewith) and for the purpose of calculating the fee payable under Section 2.10(b), such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s Commitment shall be deemed to be zero; provided, that the foregoing shall not apply to any of the matters governed by Section 14.1(a)(i) through (iii). The provisions of this Section 2.3(g) shall remain effective with respect to such Defaulting Lender until the earlier of (y) the date on which all of the Non-Defaulting Lenders, Agent, Issuing Bank, and Borrowers shall have waived, in writing, the application of this Section 2.3(g) to such Defaulting Lender, or (z) the date on which such Defaulting Lender makes payment of all amounts that it was obligated to fund hereunder, pays to Agent all amounts owing by Defaulting Lender in respect of the amounts that it was obligated to fund hereunder, and, if requested by Agent, provides adequate assurance of its ability to perform its future obligations hereunder (on which earlier date, so long as no Event of Default has occurred and is continuing, any remaining cash collateral held by Agent pursuant to Section 2.3(g)(ii) shall be released to Borrowers). The operation of this Section 2.3(g) shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder, or to relieve or excuse the performance by any Borrower of its duties and obligations hereunder to Agent, Issuing Bank, or to the Lenders other than such Defaulting Lender. Any failure by a Defaulting Lender to fund amounts that it was obligated to fund hereunder shall constitute a material breach by such Defaulting Lender of this Agreement and shall entitle Borrowers, at their option, upon written notice to Agent, to arrange for a substitute Lender to assume the Commitment of such Defaulting Lender, such substitute Lender to be reasonably acceptable to Agent. In connection with the arrangement of such a substitute Lender, the Defaulting Lender shall have no right to refuse to be replaced hereunder, and agrees to execute and deliver a completed form of Assignment and Acceptance in favor of the substitute Lender (and agrees that it shall be deemed to have executed and delivered such document if it fails to do so) subject only to being paid its share of the outstanding Obligations (other than Bank Product Obligations, but including (1) all interest, fees, and other amounts that may be due and payable in respect thereof, and (2) an assumption of its Pro Rata Share of its participation in the Letters of Credit); provided, that any such assumption of the Commitment of such Defaulting Lender shall not be deemed to constitute a waiver of any of the Lender Groups’ or Borrowers’ rights or remedies against any such Defaulting Lender arising out of or in relation to such failure to fund. In the event of a direct conflict between the priority provisions of this Section 2.3(g) and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.3(g) shall control and govern.

(ii) If any Swing Loan or Letter of Credit is outstanding at the time that a Lender becomes a Defaulting Lender then:

(A) such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Pro Rata Shares but only to the extent (x) the sum of all Non-Defaulting Lenders’ Pro Rata Share of Revolver Usage plus such Defaulting Lender’s Swing Loan Exposure and Letter of Credit Exposure does not exceed the total of all Non-Defaulting Lenders’ Revolver Commitments and (y) the conditions set forth in Section 3.2 are satisfied at such time;

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(B) if the reallocation described in clause (A) above cannot, or can only partially, be effected, Borrowers shall within two Business Days following notice by Agent (x) first, prepay such Defaulting Lender’s Swing Loan Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), and (y) second, cash collateralize such Defaulting Lender’s Letter of Credit Exposure (after giving effect to any partial reallocation pursuant to clause (A) above), pursuant to a cash collateral agreement to be entered into in form and substance reasonably satisfactory to Agent, for so long as such Letter of Credit Exposure is outstanding; provided, that Borrowers shall not be obligated to cash collateralize any Defaulting Lender’s Letter of Credit Exposure if such Defaulting Lender is also Issuing Bank;

(C) if Borrowers cash collateralize any portion of such Defaulting Lender’s Letter of Credit Exposure pursuant to this Section 2.3(g)(ii), Borrowers shall not be required to pay any Letter of Credit Fees to Agent for the account of such Defaulting Lender pursuant to Section 2.6(b) with respect to such cash collateralized portion of such Defaulting Lender’s Letter of Credit Exposure during the period such Letter of Credit Exposure is cash collateralized;

(D) to the extent the Letter of Credit Exposure of the Non-Defaulting Lenders is reallocated pursuant to this Section 2.3(g)(ii), then the Letter of Credit Fees payable to the Non-Defaulting Lenders pursuant to Section 2.6(b) shall be adjusted in accordance with such Non-Defaulting Lenders’ Letter of Credit Exposure;

(E) to the extent any Defaulting Lender’s Letter of Credit Exposure is neither cash collateralized nor reallocated pursuant to this Section 2.3(g)(ii), then, without prejudice to any rights or remedies of Issuing Bank or any Lender hereunder, all Letter of Credit Fees that would have otherwise been payable to such Defaulting Lender under Section 2.6(b) with respect to such portion of such Letter of Credit Exposure shall instead be payable to Issuing Bank until such portion of such Defaulting Lender’s Letter of Credit Exposure is cash collateralized or reallocated;

(F) so long as any Lender is a Defaulting Lender, the Swing Lender shall not be required to make any Swing Loan and Issuing Bank shall not be required to issue, amend, or increase any Letter of Credit, in each case, to the extent (x) the Defaulting Lender’s Pro Rata Share of such Swing Loans or Letter of Credit cannot be reallocated pursuant to this Section 2.3(g)(ii), or (y) the Swing Lender or Issuing Bank, as applicable, has not otherwise entered into arrangements reasonably satisfactory to the Swing Lender or Issuing Bank, as applicable, and Borrowers to eliminate the Swing Lender’s or Issuing Bank’s risk with respect to the Defaulting Lender’s participation in Swing Loans or Letters of Credit; and

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(G) Agent may release any cash collateral provided by Borrowers pursuant to this Section 2.3(g)(ii) to Issuing Bank and Issuing Bank may apply any such cash collateral to the payment of such Defaulting Lender’s Pro Rata Share of any Letter of Credit Disbursement that is not reimbursed by Borrowers pursuant to Section 2.11(d). Subject to Section 17.14, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder (including the Borrowers) against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(h) Independent Obligations. All Revolving Loans (other than Swing Loans and Extraordinary Advances) shall be made by the Lenders contemporaneously and in accordance with their Pro Rata Shares. It is understood that (i) no Lender shall be responsible for any failure by any other Lender to perform its obligation to make any Revolving Loan (or other extension of credit) hereunder, nor shall any Commitment of any Lender be increased or decreased as a result of any failure by any other Lender to perform its obligations hereunder, and (ii) no failure by any Lender to perform its obligations hereunder shall excuse any other Lender from its obligations hereunder.

2.4. Payments; Reductions of Commitments; Prepayments..

(a) Payments by Borrowers.

(i) Except as otherwise expressly provided herein, all payments by Borrowers shall be made to Agent’s Account for the account of the Lender Group and shall be made in immediately available funds, no later than 3:30 p.m. on the date specified herein. Any payment received by Agent later than 3:30 p.m. shall be deemed to have been received (unless Agent, in its sole discretion, elects to credit it on the date received) on the following Business Day and any applicable interest or fee shall continue to accrue until such following Business Day.

(ii) Unless Agent receives notice from Borrowers prior to the date on which any payment is due to the Lenders that Borrowers will not make such payment in full as and when required, Agent may assume that Borrowers have made (or will make) such payment in full to Agent on such date in immediately available funds and Agent may (but shall not be so required), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent Borrowers do not make such payment in full to Agent on the date when due, each Lender severally shall repay to Agent on demand such amount distributed to such Lender, together with interest thereon at the Defaulting Lender Rate for each day from the date such amount is distributed to such Lender until the date repaid.

(b) Apportionment and Application.

(i) So long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all principal and interest payments received by Agent shall be apportioned ratably among the Lenders (according to the unpaid principal balance of the Obligations to which such payments relate held by each Lender) and all payments of fees and expenses received by Agent (other than fees or expenses that are for Agent’s separate account or for the separate account of Issuing Bank) shall be apportioned ratably among the Lenders having a Pro Rata Share of the type of Commitment or Obligation to which a particular fee or expense relates.

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(ii) Subject to Section 2.4(b)(v), Section 2.4(d), and Section 2.4(e), all payments to be made hereunder by Borrowers shall be remitted to Agent and all such payments, and all proceeds of Collateral received by Agent, shall be applied, so long as no Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, to reduce the balance of the Revolving Loans outstanding.

(iii) At any time that an Application Event has occurred and is continuing and except as otherwise provided herein with respect to Defaulting Lenders, all payments remitted to Agent and all proceeds of Collateral received by Agent shall be applied as follows:

(A) first, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to Agent under the Loan Documents and to pay interest and principal on Extraordinary Advances that are held solely by Agent pursuant to the terms of Section 2.4(d)(iv), until paid in full,

(B) second, to pay any fees or premiums then due to Agent under the Loan Documents, until paid in full,

(D) fourth, to pay the principal of all Protective Advances, until paid in full,

(E) fifth, ratably, to pay any Lender Group Expenses (including cost or expense reimbursements) or indemnities then due to any of the Lenders under the Loan Documents, until paid in full,

(F) sixth, ratably, to pay any fees or premiums then due to any of the Lenders under the Loan Documents, until paid in full,

(G) seventh, to pay interest accrued in respect of the Swing Loans, until paid in full,

(H) eighth, to pay the principal of all Swing Loans, until paid in full,

(I) ninth, ratably, to pay interest accrued in respect of the Revolving Loans (other than Protective Advances), until paid in full,

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(J) tenth, ratably

i. to pay the principal of all Revolving Loans, until paid in full,

ii. to Agent, to be held by Agent, for the benefit of Issuing Bank (and for the ratable benefit of each of the Lenders that have an obligation to pay to Agent, for the account of Issuing Bank, a share of each Letter of Credit Disbursement), as cash collateral in an amount up to 103% of the Letter of Credit Usage (to the extent permitted by applicable law, such cash collateral shall be applied to the reimbursement of any Letter of Credit Disbursement as and when such disbursement occurs and, if a Letter of Credit expires undrawn, the cash collateral held by Agent in respect of such Letter of Credit shall, to the extent permitted by applicable law, be reapplied pursuant to this Section 2.4(b)(iii), beginning with tier (A) hereof),

iii. to (I) the Bank Product Providers based upon amounts then certified by each applicable Bank Product Provider to Agent (in form and substance satisfactory to Agent) to be due and payable to such Bank Product Provider on account of Bank Product Obligations, and (II) with any balance to be paid to Agent, to be held by Agent, for the ratable benefit of the Bank Product Providers, as cash collateral (which cash collateral may be released by Agent to the applicable Bank Product Provider and applied by such Bank Product Provider to the payment or reimbursement of any amounts due and payable with respect to Bank Product Obligations owed to the applicable Bank Product Provider as and when such amounts first become due and payable and, if and at such time as all such Bank Product Obligations are paid or otherwise satisfied in full, the cash collateral held by Agent in respect of such Bank Product Obligations shall be reapplied pursuant to this Section 2.4(b)(iii), beginning with tier (A) hereof,

(K) eleventh, to pay any other Obligations other than Obligations owed to Defaulting Lenders,

(L) twelfth, ratably to pay any Obligations owed to Defaulting Lenders; and

(M) thirteenth, to Borrowers (to be wired to the Designated Account) or such other Person entitled thereto under applicable law.

(iv) Agent promptly shall distribute to each Lender, pursuant to the applicable wire instructions received from each Lender in writing, such funds as it may be entitled to receive, subject to a Settlement delay as provided in Section 2.3(e).

(v) In each instance, so long as no Application Event has occurred and is continuing, Section 2.4(b)(ii) shall not apply to any payment made by Borrowers to Agent and specified by Borrowers to be for the payment of specific Obligations then due and payable (or prepayable) under any provision of this Agreement or any other Loan Document.

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(vi) For purposes of Section 2.4(b)(iii), “paid in full” of a type of Obligation means payment in cash or immediately available funds of all amounts owing on account of such type of Obligation, including interest accrued after the commencement of any Insolvency Proceeding, default interest, interest on interest, and expense reimbursements, irrespective of whether any of the foregoing would be or is allowed or disallowed in whole or in part in any Insolvency Proceeding.

(vii) In the event of a direct conflict between the priority provisions of this Section 2.4 and any other provision contained in this Agreement or any other Loan Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, if the conflict relates to the provisions of Section 2.3(g) and this Section 2.4, then the provisions of Section 2.3(g) shall control and govern, and if otherwise, then the terms and provisions of this Section 2.4 shall control and govern.

(c) Reduction of Revolver Commitments. The Revolver Commitments shall terminate on the Maturity Date or earlier termination thereof pursuant to the terms of this Agreement. Borrowers may, with the consent of Agent, reduce the Revolver Commitments, without premium or penalty, to an amount (which may be zero) not less than the sum of (A) the Revolver Usage as of such date, plus (B) the principal amount of all Revolving Loans not yet made as to which a request has been given by Borrowers under Section 2.3(a), plus (C) the amount of all Letters of Credit not yet issued as to which a request has been given by Borrowers pursuant to Section 2.11(a). Each such reduction shall be in an amount which is not less than $5,000,000 (unless the Revolver Commitments are being reduced to zero and the amount of the Revolver Commitments in effect immediately prior to such reduction are less than $5,000,000), shall be made by providing not less than three Business Days prior written notice to Agent, and shall be irrevocable. The Revolver Commitments, once reduced, may not be increased. Each such reduction of the Revolver Commitments shall reduce the Revolver Commitments of each Lender proportionately in accordance with its ratable share thereof. In connection with any reduction in the Revolver Commitments prior to the Maturity Date, if any Loan Party or any of its Subsidiaries owns any Margin Stock, Borrowers shall deliver to Agent an updated Form U-1 (with sufficient additional originals thereof for each Lender), duly executed and delivered by the Borrowers, together with such other documentation as Agent shall reasonably request, in order to enable Agent and the Lenders to comply with any of the requirements under Regulations T, U or X of the Federal Reserve Board.

(d) Optional Prepayments of Revolving Loans. Borrowers may prepay the principal of any Revolving Loan at any time in whole or in part, without premium or penalty.

(e) Mandatory Prepayments Regarding the Borrowing Base. If, at any time, (A) the Revolver Usage on such date exceeds (B) the lesser of (x) the Borrowing Base reflected in the Borrowing Base Certificate most recently delivered by Borrowers to Agent, or (y) the Maximum Revolver Amount, in all cases as adjusted for Reserves established by Agent in accordance with Section 2.1(c), then Borrowers shall immediately prepay the Obligations in accordance with Section 2.4(f) in an aggregate amount equal to the amount of such excess.

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(f) Application of Payments. Each prepayment pursuant to Section 2.4(e) shall, (1) so long as no Application Event shall have occurred and be continuing, be applied, first, to the outstanding principal amount of the Revolving Loans until paid in full, and second, to cash collateralize the Letters of Credit in an amount equal to 103% of the then outstanding Letter of Credit Usage, and (2) if an Application Event shall have occurred and be continuing, be applied in the manner set forth in Section 2.4(b)(iii).

2.5. Promise to Pay; Promissory Notes..

(a) Borrowers agree to pay the Lender Group Expenses on the earlier of (i) the first day of the month following the date on which the applicable Lender Group Expenses were first incurred, or (ii) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof and the satisfaction thereof for the purposes of this subclause (ii)). Borrowers promise to pay all of the Obligations (including principal, interest, premiums, if any, fees, costs, and expenses (including Lender Group Expenses)) in full on the Maturity Date or, if earlier, on the date on which the Obligations (other than the Bank Product Obligations) become due and payable pursuant to the terms of this Agreement. Borrowers agree that their obligations contained in the first sentence of this Section 2.5(a) shall survive payment or satisfaction in full of all other Obligations.

(b) Any Lender may request that any portion of its Commitments or the Loans made by it be evidenced by one or more promissory notes. In such event, Borrowers shall execute and deliver to such Lender the requested promissory notes payable to the order of such Lender in a form furnished by Agent and reasonably satisfactory to Borrowers. Thereafter, the portion of the Commitments and Loans evidenced by such promissory notes and interest thereon shall at all times be represented by one or more promissory notes in such form payable to the order of the payee named therein.

2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations..

(a) Interest Rates. Except as provided in Section 2.6(c), all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest as follows:

(i) if the relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the Applicable Margin, and

(ii) otherwise, at a per annum rate equal to the Base Rate plus the Applicable Margin.

(b) Letter of Credit Fee. Borrowers shall pay Agent (for the ratable benefit of the Revolving Lenders), a Letter of Credit fee (the “Letter of Credit Fee”) (which fee shall be in addition to the fronting fees and commissions, other fees, charges and expenses set forth in Section 2.11(k)) that shall accrue at a per annum rate equal to the Applicable Margin with respect to LIBOR Rate Loans times the average amount of the Letter of Credit Usage during the immediately preceding month.

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(c) Default Rate. (i) Automatically upon the occurrence and during the continuation of an Event of Default under Section 8.4 or 8.5 and (ii) upon the occurrence and during the continuation of any other Event of Default (other than an Event of Default under Section 8.4 or 8.5), at the direction of Agent or the Required Lenders, and upon written notice by Agent to Borrowers of such direction (provided, that such notice shall not be required for any Event of Default under Section 8.1), (A) all Loans and all Obligations (except for undrawn Letters of Credit) that have been charged to the Loan Account pursuant to the terms hereof shall bear interest since the date of the occurrence of the Event of Default at a per annum rate equal to two percentage points above the per annum rate otherwise applicable thereunder, and (B) the Letter of Credit Fee shall be increased to two percentage points above the per annum rate otherwise applicable hereunder and retroactively applied since the date of the occurrence of the Event of Default.

(d) Payment. Except to the extent provided to the contrary in Section 2.10, Section 2.11(k) or Section 2.12(a), (i) all interest and all other fees payable hereunder or under any of the other Loan Documents (other than Letter of Credit Fees) shall be due and payable, in arrears, on the first day of each month, (ii) all Letter of Credit Fees payable hereunder, and all fronting fees and all commissions, other fees, charges and expenses provided for in Section 2.11(k) shall be due and payable, in arrears, on the first Business Day of each month, and (iii) all costs and expenses payable hereunder or under any of the other Loan Documents, and all other Lender Group Expenses shall be due and payable on the earlier of (x) the first day of the month following the date on which the applicable costs, expenses, or Lender Group Expenses were first incurred, or (y) the date on which demand therefor is made by Agent (it being acknowledged and agreed that any charging of such costs, expenses or Lender Group Expenses to the Loan Account pursuant to the provisions of the following sentence shall be deemed to constitute a demand for payment thereof and the satisfaction thereof for the purposes of this subclause (y)). Borrowers hereby authorize Agent, from time to time without prior notice to Borrowers, to charge to the Loan Account (A) on the first day of each month, all interest accrued during the prior month on the Base Rate Loans hereunder, (B) at the times indicated in Section 2.12(a), all interest accrued during the applicable period on the LIBOR Rate Loans, (C) on the first Business Day of each month, all Letter of Credit Fees accrued or chargeable hereunder during the prior month, (D) as and when incurred or accrued, all fees and costs provided for in Section 2.10(a) or (c), (E) on the first day of each month, the Unused Line Fee accrued during the prior month pursuant to Section 2.10(b), (F) as and when due and payable, all other fees payable hereunder or under any of the other Loan Documents, (G) as and when incurred or accrued, all other Lender Group Expenses, and (H) as and when due and payable all other payment obligations payable under any Loan Document or any Bank Product Agreement (including any amounts due and payable to the Bank Product Providers in respect of Bank Products). All amounts (including interest, fees, costs, expenses, Lender Group Expenses, or other amounts payable hereunder or under any other Loan Document or under any Bank Product Agreement) charged to the Loan Account shall thereupon constitute Revolving Loans hereunder, shall constitute Obligations hereunder, and shall initially accrue interest at the rate then applicable to Revolving Loans that are Base Rate Loans (unless and until converted into LIBOR Rate Loans in accordance with the terms of this Agreement).

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(e) Computation. All interest and fees chargeable under the Loan Documents shall be computed on the basis of a 360 day year, in each case, for the actual number of days elapsed in the period during which the interest or fees accrue. In the event the Base Rate is changed from time to time hereafter, the rates of interest hereunder based upon the Base Rate automatically and immediately shall be increased or decreased by an amount equal to such change in the Base Rate.

(f) Intent to Limit Charges to Maximum Lawful Rate. In no event shall the interest rate or rates payable under this Agreement, plus any other amounts paid in connection herewith, exceed the highest rate permissible under any law that a court of competent jurisdiction shall, in a final determination, deem applicable. Borrowers and the Lender Group, in executing and delivering this Agreement, intend legally to agree upon the rate or rates of interest and manner of payment stated within it; provided, that anything contained herein to the contrary notwithstanding, if such rate or rates of interest or manner of payment exceeds the maximum allowable under applicable law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall be liable only for the payment of such maximum amount as is allowed by law, and payment received from Borrowers in excess of such legal maximum, whenever received, shall be applied to reduce the principal balance of the Obligations to the extent of such excess.

2.7. Crediting Payments. The receipt of any payment item by Agent shall not be required to be considered a payment on account unless such payment item is a wire transfer of immediately available funds made to Agent’s Account or unless and until such payment item is honored when presented for payment. Should any payment item not be honored when presented for payment, then Borrowers shall be deemed not to have made such payment. Anything to the contrary contained herein notwithstanding, any payment item shall be deemed received by Agent only if it is received into Agent’s Account on a Business Day on or before 3:30 p.m. If any payment item is received into Agent’s Account on a non-Business Day or after 3:30 p.m. on a Business Day (unless Agent, in its sole discretion, elects to credit it on the date received), it shall be deemed to have been received by Agent as of the opening of business on the immediately following Business Day.

2.8. Designated Account. Agent is authorized to make the Revolving Loans, and Issuing Bank is authorized to issue the Letters of Credit, under this Agreement based upon telephonic or other instructions received from anyone purporting to be an Authorized Person or, without instructions, if pursuant to Section 2.6(d). Borrowers agree to establish and maintain the Designated Account with the Designated Account Bank for the purpose of receiving the proceeds of the Revolving Loans requested by Borrowers and made by Agent or the Lenders hereunder. Unless otherwise agreed by Agent and Borrowers, any Revolving Loan or Swing Loan requested by Borrowers and made by Agent or the Lenders hereunder shall be made to the Designated Account.

2.9. Maintenance of Loan Account; Statements of Obligations. Agent shall maintain an account on its books in the name of Borrowers (the “Loan Account”) on which Borrowers will be charged with all Revolving Loans (including Extraordinary Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrowers or for Borrowers’

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account, the Letters of Credit issued or arranged by Issuing Bank for Borrowers’ account, and with all other payment Obligations hereunder or under the other Loan Documents, including, accrued interest, fees and expenses, and Lender Group Expenses. In accordance with Section 2.7, the Loan Account will be credited with all payments received by Agent from Borrowers or for Borrowers’ account. Agent shall make available to Borrowers monthly statements regarding the Loan Account, including the principal amount of the Revolving Loans, interest accrued hereunder, fees accrued or charged hereunder or under the other Loan Documents, and a summary itemization of all charges and expenses constituting Lender Group Expenses accrued hereunder or under the other Loan Documents, and each such statement, absent manifest error, shall be conclusively presumed to be correct and accurate and constitute an account stated between Borrowers and the Lender Group unless, within 30 days after Agent first makes such a statement available to Borrowers, Borrowers shall deliver to Agent written objection thereto describing the error or errors contained in such statement.

2.10. Fees.

(a) Agent Fees. Borrowers shall pay to Agent, for the account of Agent, as and when due and payable under the terms of the Fee Letter, the fees set forth in the Fee Letter.

(b) Unused Line Fee. If, for any day in each calendar quarter, the daily unpaid balance of the sum of Revolving Loans plus Swing Loans plus the maximum undrawn amount of all outstanding Letters of Credit (the “Usage Amount”) does not equal the Maximum Revolver Amount, then Borrowers shall pay to Agent, for the ratable benefit of Revolving Lenders, a fee at a rate equal to 0.50% per annum for each such day on the amount by which the Maximum Revolver Amount on such day exceeds such Usage Amount (the “Unused Line Fee”). Such Unused Line Fee shall be due and payable to Agent in arrears on the first Business Day of each calendar quarter with respect to each day in the previous calendar quarter.

(c) Field Examination, Inventory Appraisal and Other Fees. Borrowers shall pay to Agent, field examination, appraisal, and valuation fees and charges, as and when incurred or chargeable, as follows (i) a fee of $1,500 per day, per examiner, plus reasonable out-of-pocket expenses (including travel, meals, and lodging) for each field examination of any Loan Party or its Subsidiaries performed by or on behalf of Agent, plus a per examination field exam management fee in the amount of $2,500 for new facilities, and $1,500 for recurring examinations (or, in each case, such other amount customarily charged by Agent to its customers) and (ii) the actual fees and charges or reasonable out-of-pocket expenses paid or incurred by Agent if it elects to employ the services of one or more third Persons to appraise the Collateral, or any portion thereof. Notwithstanding the foregoing, (i) no more than one field examination shall be conducted at the expense of the Borrowers during any consecutive twelve (12) month period in which a Covenant Testing Period does not exist, (ii) during a Covenant Testing Period (and so long as no Event of Default exists), no more than two field examinations shall be conducted at the expense of the Borrowers during any consecutive twelve (12) month period, and (iii) if any Event of Default shall exist, then notwithstanding anything to the contrary in the foregoing clauses (i) and (ii), there shall be no limitation on the number or frequency of field examinations which may be conducted at the expense of the Borrowers, in each case except for field examinations conducted prior to the

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Closing Date or in connection with a proposed Acquisition (whether or not consummated). So long as no Event of Default shall have occurred and be continuing during a calendar year, Borrowers shall not be obligated to reimburse Agent for more than one inventory appraisal in such calendar year, except for appraisals conducted prior to the Closing Date or in connection with a proposed Acquisition (whether or not consummated).

2.11. Letters of Credit.

(a) Subject to the terms and conditions of this Agreement, upon the request of Borrowers prior to 1:00 p.m., at least five Business Days prior to the proposed date of issuance made in accordance herewith, and prior to the Maturity Date, Issuing Bank agrees to issue a requested standby Letter of Credit or a sight commercial Letter of Credit for the account of Borrowers. By submitting a request to Issuing Bank for the issuance of a Letter of Credit, Borrowers shall be deemed to have requested that Issuing Bank issue the requested Letter of Credit. Each request for the issuance of a Letter of Credit, or the amendment, renewal, or extension of any outstanding Letter of Credit, shall be (i) irrevocable and made in writing by an Authorized Person, (ii) delivered to Agent and Issuing Bank via telefacsimile or other electronic method of transmission reasonably acceptable to Agent and Issuing Bank and reasonably in advance of the requested date of issuance, amendment, renewal, or extension, and (iii) subject to Issuing Bank’s authentication procedures with results satisfactory to Issuing Bank. Each such request shall be in form and substance reasonably satisfactory to Agent and Issuing Bank and (i) shall specify (A) the amount of such Letter of Credit, (B) the date of issuance, amendment, renewal, or extension of such Letter of Credit, (C) the proposed expiration date of such Letter of Credit, (D) the name and address of the beneficiary of the Letter of Credit, and (E) such other information (including, the conditions to drawing, and, in the case of an amendment, renewal, or extension, identification of the Letter of Credit to be so amended, renewed, or extended) as shall be necessary to prepare, amend, renew, or extend such Letter of Credit, and (ii) shall be accompanied by such Issuer Documents as Agent or Issuing Bank may request or require, to the extent that such requests or requirements are consistent with the Issuer Documents that Issuing Bank generally requests for Letters of Credit in similar circumstances. Issuing Bank’s records of the content of any such request will be conclusive absent manifest error. Anything contained herein to the contrary notwithstanding, Issuing Bank may, but shall not be obligated to, issue a Letter of Credit that supports the obligations of a Loan Party or one of its Subsidiaries in respect of (x) a lease of real property to the extent that the face amount of such Letter of Credit exceeds the highest rent (including all rent-like charges) payable under such lease for a period of one year, or (y) an employment contract to the extent that the face amount of such Letter of Credit exceeds the highest compensation payable under such contract for a period of one year.

(b) Issuing Bank shall have no obligation to issue a Letter of Credit if any of the following would result after giving effect to the requested issuance:

(i) the Letter of Credit Usage would exceed the Letter of Credit Sublimit, or

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(ii) the Letter of Credit Usage would exceed the Maximum Revolver Amount less the outstanding amount of Revolving Loans (including Swing Loans), or

(iii) the Letter of Credit Usage would exceed the Borrowing Base at such time less the outstanding principal balance of the Revolving Loans (inclusive of Swing Loans) at such time.

(c) In the event there is a Defaulting Lender as of the date of any request for the issuance of a Letter of Credit, Issuing Bank shall not be required to issue or arrange for such Letter of Credit to the extent (i) the Defaulting Lender’s Letter of Credit Exposure with respect to such Letter of Credit may not be reallocated pursuant to Section 2.3(g)(ii), or (ii) Issuing Bank has not otherwise entered into arrangements reasonably satisfactory to it and Borrowers to eliminate Issuing Bank’s risk with respect to the participation in such Letter of Credit of the Defaulting Lender, which arrangements may include Borrowers cash collateralizing such Defaulting Lender’s Letter of Credit Exposure in accordance with Section 2.3(g)(ii). Additionally, Issuing Bank shall have no obligation to issue or extend a Letter of Credit if (A) any order, judgment, or decree of any Governmental Authority or arbitrator shall, by its terms, purport to enjoin or restrain Issuing Bank from issuing such Letter of Credit, or any law applicable to Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over Issuing Bank shall prohibit or request that Issuing Bank refrain from the issuance of letters of credit generally or such Letter of Credit in particular, or (B) the issuance of such Letter of Credit would violate one or more policies of Issuing Bank applicable to letters of credit generally, or (C) if amounts demanded to be paid under any Letter of Credit will not or may not be in United States Dollars.

(d) Any Issuing Bank (other than PNC or any of its Affiliates) shall notify Agent in writing no later than the Business Day prior to the Business Day on which such Issuing Bank issues any Letter of Credit. In addition, each Issuing Bank (other than PNC or any of its Affiliates) shall, on the first Business Day of each week, submit to Agent a report detailing the daily undrawn amount of each Letter of Credit issued by such Issuing Bank during the prior calendar week. Borrowers and the Lender Group hereby acknowledge and agree that all Existing Letters of Credit shall constitute Letters of Credit under this Agreement on and after the Closing Date with the same effect as if such Existing Letters of Credit were issued by Issuing Bank at the request of Borrowers on the Closing Date. Each Letter of Credit shall be in form and substance reasonably acceptable to Issuing Bank, including the requirement that the amounts payable thereunder must be payable in Dollars. If Issuing Bank makes a payment under a Letter of Credit, Borrowers shall pay to Agent an amount equal to the applicable Letter of Credit Disbursement on the Business Day such Letter of Credit Disbursement is made and, in the absence of such payment, the amount of the Letter of Credit Disbursement immediately and automatically shall be deemed to be a Revolving Loan hereunder (notwithstanding any failure to satisfy any condition precedent set forth in Section 3) and, initially, shall bear interest at the rate then applicable to Revolving Loans that are Base Rate Loans. If a Letter of Credit Disbursement is deemed to be a Revolving Loan hereunder, Borrowers’ obligation to pay the amount of such Letter of Credit Disbursement to Issuing Bank shall be automatically converted into an obligation to pay the resulting Revolving Loan. Promptly following receipt by Agent of any payment from Borrowers pursuant to this paragraph, Agent shall distribute such payment to Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to Section 2.11(e) to reimburse Issuing Bank, then to such Revolving Lenders and Issuing Bank as their interests may appear.

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(e) Promptly following receipt of a notice of a Letter of Credit Disbursement pursuant to Section 2.11(d), each Revolving Lender agrees to fund its Pro Rata Share of any Revolving Loan deemed made pursuant to Section 2.11(d) on the same terms and conditions as if Borrowers had requested the amount thereof as a Revolving Loan and Agent shall promptly pay to Issuing Bank the amounts so received by it from the Revolving Lenders. By the issuance of a Letter of Credit (or an amendment, renewal, or extension of a Letter of Credit) and without any further action on the part of Issuing Bank or the Revolving Lenders, Issuing Bank shall be deemed to have granted to each Revolving Lender, and each Revolving Lender shall be deemed to have purchased, a participation in each Letter of Credit issued by Issuing Bank, in an amount equal to its Pro Rata Share of such Letter of Credit, and each such Revolving Lender agrees to pay to Agent, for the account of Issuing Bank, such Revolving Lender’s Pro Rata Share of any Letter of Credit Disbursement made by Issuing Bank under the applicable Letter of Credit. In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to Agent, for the account of Issuing Bank, such Revolving Lender’s Pro Rata Share of each Letter of Credit Disbursement made by Issuing Bank and not reimbursed by Borrowers on the date due as provided in Section 2.11(d), or of any reimbursement payment that is required to be refunded (or that Agent or Issuing Bank elects, based upon the advice of counsel, to refund) to Borrowers for any reason. Each Revolving Lender acknowledges and agrees that its obligation to deliver to Agent, for the account of Issuing Bank, an amount equal to its respective Pro Rata Share of each Letter of Credit Disbursement pursuant to this Section 2.11(e) shall be absolute and unconditional and such remittance shall be made notwithstanding the occurrence or continuation of an Event of Default or Default or the failure to satisfy any condition set forth in Section 3. If any such Revolving Lender fails to make available to Agent the amount of such Revolving Lender’s Pro Rata Share of a Letter of Credit Disbursement as provided in this Section, such Revolving Lender shall be deemed to be a Defaulting Lender and Agent (for the account of Issuing Bank) shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Defaulting Lender Rate until paid in full.

(f) Each Borrower agrees to indemnify, defend and hold harmless each member of the Lender Group (including Issuing Bank and its branches, Affiliates, and correspondents) and each such Person’s respective directors, officers, employees, attorneys and agents (each, including Issuing Bank, a “Letter of Credit Related Person”) (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable fees and disbursements of attorneys, experts, or consultants and all other costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), which may be incurred by or awarded against any such Letter of Credit Related Person (other than Taxes, which shall be governed by Section 16) (the “Letter of Credit Indemnified Costs”), and which arise out of or in connection with, or as a result of:

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(i) any Letter of Credit or any pre-advice of its issuance;

(ii) any action or proceeding arising out of, or in connection with, any Letter of Credit (whether administrative, judicial or in connection with arbitration), including any action or proceeding to compel or restrain any presentation or payment under any Letter of Credit, or for the wrongful dishonor of, or honoring a presentation under, any Letter of Credit;

(iii) any independent undertakings issued by the beneficiary of any Letter of Credit;

(iv) any unauthorized instruction or request made to Issuing Bank in connection with any Letter of Credit or requested Letter of Credit, or any error, omission, interruption or delay in such instruction or request, whether transmitted by mail, courier, electronic transmission, SWIFT, or any other telecommunication including communications through a correspondent;

(v) any third party seeking to enforce the rights of an applicant, beneficiary, nominated person, transferee, assignee of Letter of Credit proceeds or holder of an instrument or document relating to any Letter of Credit;

(vi) the fraud, forgery or illegal action of parties other than the Letter of Credit Related Person;

(vii) any prohibition on payment or delay in payment of any amount payable by Issuing Bank to a beneficiary or transferee beneficiary of a Letter of Credit arising out of Anti-Corruption Laws and Anti-Terrorism Laws;

(viii) Issuing Bank’s performance of the obligations of a confirming institution or entity that wrongfully dishonors a confirmation;

(ix) any foreign language translation provided to Issuing Bank in connection with any Letter of Credit;

(x) any foreign law or usage as it relates to Issuing Bank’s issuance of a Letter of Credit in support of a foreign guaranty including without limitation the expiration of such guaranty after the related Letter of Credit expiration date and any resulting drawing paid by Issuing Bank in connection therewith; or

(xi) the acts or omissions, whether rightful or wrongful, of any present or future de jure or de facto governmental or regulatory authority or cause or event beyond the control of the Letter of Credit Related Person;

provided, that such indemnity shall not be available to any Letter of Credit Related Person claiming indemnification under clauses (i) through (x) above to the extent that such Letter of Credit Indemnified Costs may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of the

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Letter of Credit Related Person claiming indemnity. Borrowers hereby agree to pay the Letter of Credit Related Person claiming indemnity on demand from time to time all amounts owing under this Section 2.11(f). If and to the extent that the obligations of Borrowers under this Section 2.11(f) are unenforceable for any reason, Borrowers agree to make the maximum contribution to the Letter of Credit Indemnified Costs permissible under applicable law. This indemnification provision shall survive termination of this Agreement and all Letters of Credit.

(g) The liability of Issuing Bank (or any other Letter of Credit Related Person) under, in connection with or arising out of any Letter of Credit (or pre-advice), regardless of the form or legal grounds of the action or proceeding, shall be limited to direct damages suffered by Borrowers that are caused by Issuing Bank’s gross negligence or willful misconduct in (i) honoring a presentation under a Letter of Credit that on its face does not at least substantially comply with the terms and conditions of such Letter of Credit, (ii) failing to honor a presentation under a Letter of Credit that strictly complies with the terms and conditions of such Letter of Credit, or (iii) retaining Drawing Documents presented under a Letter of Credit. Borrowers’ aggregate remedies against Issuing Bank and any Letter of Credit Related Person for wrongfully honoring a presentation under any Letter of Credit or wrongfully retaining honored Drawing Documents shall in no event exceed the aggregate amount paid by Borrowers to Issuing Bank in respect of the honored presentation in connection with such Letter of Credit under Section 2.11(d), plus interest at the rate then applicable to Base Rate Loans hereunder. Borrowers shall take commercially reasonable action to avoid and mitigate the amount of any damages claimed against Issuing Bank or any other Letter of Credit Related Person, including by enforcing its rights against the beneficiaries of the Letters of Credit. Any claim by Borrowers under or in connection with any Letter of Credit shall be reduced by an amount equal to the sum of (x) the amount (if any) saved by Borrowers as a result of the breach or alleged wrongful conduct complained of, and (y) the amount (if any) of the loss that would have been avoided had Borrowers taken all reasonable steps to mitigate any loss, and in case of a claim of wrongful dishonor, by specifically and timely authorizing Issuing Bank to effect a cure.

(h) Borrowers are responsible for the final text of the Letter of Credit as issued by Issuing Bank, irrespective of any assistance Issuing Bank may provide such as drafting or recommending text or by Issuing Bank’s use or refusal to use text submitted by Borrowers. Borrowers understand that the final form of any Letter of Credit may be subject to such revisions and changes as are deemed necessary or appropriate by Issuing Bank, and Borrowers hereby consent to such revisions and changes not materially different from the application executed in connection therewith. Borrowers are solely responsible for the suitability of the Letter of Credit for Borrowers’ purposes. If Borrowers request Issuing Bank to issue a Letter of Credit for an affiliated or unaffiliated third party (an “Account Party”), (i) such Account Party shall have no rights against Issuing Bank; (ii) Borrowers shall be responsible for the application and obligations under this Agreement; and (iii) communications (including notices) related to the respective Letter of Credit shall be among Issuing Bank and Borrowers. Borrowers will examine the copy of the Letter of Credit and any other documents sent by Issuing Bank in connection therewith and shall promptly notify Issuing Bank (not later than three (3) Business Days following Borrowers’ receipt of documents from Issuing Bank) of any non-compliance with Borrowers’ instructions and of any discrepancy in any document under any presentment or other irregularity. Borrowers understand

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and agree that Issuing Bank is not required to extend the expiration date of, and may give notice of nonrenewal of, any Letter of Credit for any reason; provided however, that that the Issuing Bank remains obligated to issue Letters of Credit in accordance with the terms of this Section 2.11. With respect to any Letter of Credit containing an “automatic amendment” to extend the expiration date of such Letter of Credit, if Borrowers do not at any time want the then current expiration date of such Letter of Credit to be extended, Borrowers will so notify Agent and Issuing Bank at least 30 calendar days before Issuing Bank is required to notify the beneficiary of such Letter of Credit or any advising bank of such non-extension pursuant to the terms of such Letter of Credit.

(i) Borrowers’ reimbursement and payment obligations under this Section 2.11 are absolute, unconditional and irrevocable and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever, including:

(i) any lack of validity, enforceability or legal effect of any Letter of Credit, any Issuer Document, this Agreement, or any Loan Document, or any term or provision therein or herein;

(ii) payment against presentation of any draft, demand or claim for payment under any Drawing Document that does not comply in whole or in part with the terms of the applicable Letter of Credit or which proves to be fraudulent, forged or invalid in any respect or any statement therein being untrue or inaccurate in any respect, or which is signed, issued or presented by a Person or a transferee of such Person purporting to be a successor or transferee of the beneficiary of such Letter of Credit;

(iii) Issuing Bank or any of its branches or Affiliates being the beneficiary of any Letter of Credit;

(iv) Issuing Bank or any correspondent honoring a drawing against a Drawing Document up to the amount available under any Letter of Credit even if such Drawing Document claims an amount in excess of the amount available under the Letter of Credit;

(v) the existence of any claim, set-off, defense or other right that any Loan Party or any of its Subsidiaries may have at any time against any beneficiary or transferee beneficiary, any assignee of proceeds, Issuing Bank or any other Person;

(vi) Issuing Bank or any correspondent honoring a drawing upon receipt of an electronic presentation under a Letter of Credit requiring the same, regardless of whether the original Drawing Documents arrive at Issuing Bank’s counters or are different from the electronic presentation;

(vii) any other event, circumstance or conduct whatsoever, whether or not similar to any of the foregoing that might, but for this Section 2.11(i), constitute a legal or equitable defense to or discharge of, or provide a right of set-off against, any Borrower’s or any of its Subsidiaries’ reimbursement and other payment obligations and liabilities, arising under, or in connection with, any Letter of Credit, whether against Issuing Bank, the beneficiary or any other Person; or

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(viii) the fact that any Default or Event of Default shall have occurred and be continuing;

provided, that subject to Section 2.11(g) above, the foregoing shall not release Issuing Bank from such liability to Borrowers as may be finally determined in a final, non-appealable judgment of a court of competent jurisdiction against Issuing Bank following reimbursement or payment of the obligations and liabilities, including reimbursement and other payment obligations, of Borrowers to Issuing Bank arising under, or in connection with, this Section 2.11 or any Letter of Credit.

(j) Without limiting any other provision of this Agreement, Issuing Bank and each other Letter of Credit Related Person (if applicable) shall not be responsible to Borrowers for, and Issuing Bank’s rights and remedies against Borrowers and the obligation of Borrowers to reimburse Issuing Bank for each drawing under each Letter of Credit shall not be impaired by:

(i) honor of a presentation under any Letter of Credit that on its face substantially complies with the terms and conditions of such Letter of Credit, even if the Letter of Credit requires strict compliance by the beneficiary;

(ii) honor of a presentation of any Drawing Document that appears on its face to have been signed, presented or issued (A) by any purported successor or transferee of any beneficiary or other Person required to sign, present or issue such Drawing Document or (B) under a new name of the beneficiary;

(iii) acceptance as a draft of any written or electronic demand or request for payment under a Letter of Credit, even if nonnegotiable or not in the form of a draft or notwithstanding any requirement that such draft, demand or request bear any or adequate reference to the Letter of Credit;

(iv) the identity or authority of any presenter or signer of any Drawing Document or the form, accuracy, genuineness or legal effect of any Drawing Document (other than Issuing Bank’s determination that such Drawing Document appears on its face substantially to comply with the terms and conditions of the Letter of Credit);

(v) acting upon any instruction or request relative to a Letter of Credit or requested Letter of Credit that Issuing Bank in good faith believes to have been given by a Person authorized to give such instruction or request;

(vi) any errors, omissions, interruptions or delays in transmission or delivery of any message, advice or document (regardless of how sent or transmitted) or for errors in interpretation of technical terms or in translation or any delay in giving or failing to give notice to any Borrower;

(vii) any acts, omissions or fraud by, or the insolvency of, any beneficiary, any nominated person or entity or any other Person or any breach of contract between any beneficiary and any Borrower or any of the parties to the underlying transaction to which the Letter of Credit relates;

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(viii) assertion or waiver of any provision of the ISP or UCP that primarily benefits an issuer of a letter of credit, including any requirement that any Drawing Document be presented to it at a particular hour or place;

(ix) payment to any presenting bank (designated or permitted by the terms of the applicable Letter of Credit) claiming that it rightfully honored or is entitled to reimbursement or indemnity under Standard Letter of Credit Practice applicable to it;

(x) acting or failing to act as required or permitted under Standard Letter of Credit Practice applicable to where Issuing Bank has issued, confirmed, advised or negotiated such Letter of Credit, as the case may be;

(xi) honor of a presentation after the expiration date of any Letter of Credit notwithstanding that a presentation was made prior to such expiration date and dishonored by Issuing Bank if subsequently Issuing Bank or any court or other finder of fact determines such presentation should have been honored;

(xii) dishonor of any presentation that does not strictly comply or that is fraudulent, forged or otherwise not entitled to honor; or

(xiii) honor of a presentation that is subsequently determined by Issuing Bank to have been made in violation of international, federal, state or local restrictions on the transaction of business with certain prohibited Persons.

(k) Borrowers shall pay, in accordance with Section 2.6(d), for the account of Issuing Bank as non-refundable fees, commissions, and charges (it being acknowledged and agreed that any charging of such fees, commissions, and charges to the Loan Account pursuant to the provisions of Section 2.6(d) shall be deemed to constitute a demand for payment thereof for the purposes of this Section 2.11(k)): (i) a fronting fee which shall be imposed by Issuing Bank equal to 0.25% per annum times the daily face amount of each outstanding Letter of Credit for the period from and excluding the date of issuance of same to and including the date of expiration or termination, to be payable quarterly in arrears on the first day of each calendar quarter and on the Maturity Date, plus (ii) any and all other customary commissions, fees and charges then in effect imposed by, and any and all expenses incurred by, Issuing Bank, or by any adviser, confirming institution or entity or other nominated person, relating to Letters of Credit, at the time of issuance of any Letter of Credit and upon the occurrence of any other activity with respect to any Letter of Credit (including transfers, assignments of proceeds, amendments, drawings, renewals or cancellations).

(l) If by reason of (x) any Change in Law, or (y) compliance by Issuing Bank or any other member of the Lender Group with any direction, request, or requirement (irrespective of whether having the force of law) of any Governmental Authority or monetary authority including, Regulation D of the Board of Governors as from time to time in effect (and any successor thereto):

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(i) any reserve, deposit, or similar requirement is or shall be imposed or modified in respect of any Letter of Credit issued or caused to be issued hereunder or hereby, or any Loans or obligations to make Loans hereunder or hereby, or

(ii) there shall be imposed on Issuing Bank or any other member of the Lender Group any other condition regarding any Letter of Credit, Loans, or obligations to make Loans hereunder,

and the result of the foregoing is to increase, directly or indirectly, the cost to Issuing Bank or any other member of the Lender Group of issuing, making, participating in, or maintaining any Letter of Credit or to reduce the amount receivable in respect thereof, then, and in any such case, Agent may, at any time within a reasonable period after the additional cost is incurred or the amount received is reduced, notify Borrowers, and Borrowers shall pay within 30 days after demand therefor, such amounts as Agent may specify to be necessary to compensate Issuing Bank or any other member of the Lender Group for such additional cost or reduced receipt, together with interest on such amount from the date of such demand until payment in full thereof at the rate then applicable to Base Rate Loans hereunder; provided, that (A) Borrowers shall not be required to provide any compensation pursuant to this Section 2.11(l) for any such amounts incurred more than 180 days prior to the date on which the demand for payment of such amounts is first made to Borrowers, and (B) if an event or circumstance giving rise to such amounts is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof. The determination by Agent of any amount due pursuant to this Section 2.11(l), as set forth in a certificate setting forth the calculation thereof in reasonable detail, shall, in the absence of manifest or demonstrable error, be final and conclusive and binding on all of the parties hereto.

(m) Each standby Letter of Credit shall expire not later than the date that is 12 months after the date of the issuance of such Letter of Credit; provided, that any standby Letter of Credit may provide for the automatic extension thereof for any number of additional periods each of up to one year in duration; provided further, that with respect to any Letter of Credit which extends beyond the Maturity Date, Letter of Credit Collateralization shall be provided therefor on or before the date that is five Business Days prior to the Maturity Date. Each commercial Letter of Credit shall expire on the earlier of (i) 120 days after the date of the issuance of such commercial Letter of Credit and (ii) five Business Days prior to the Maturity Date.

(n) If (i) any Event of Default shall occur and be continuing, or (ii) Availability shall at any time be less than zero, then on the Business Day following the date when the Administrative Borrower receives notice from Agent or the Required Lenders (or, if the maturity of the Obligations has been accelerated, Revolving Lenders with Letter of Credit Exposure representing greater than 50% of the total Letter of Credit Exposure) demanding Letter of Credit Collateralization pursuant to this Section 2.11(n) upon such demand, Borrowers shall provide Letter of Credit Collateralization with respect to the then existing Letter of Credit Usage. If Borrowers fail to provide Letter of Credit Collateralization as required by this Section 2.11(n), the Revolving Lenders may (and, upon direction of Agent, shall) advance, as Revolving Loans the amount of the cash collateral required pursuant to the Letter of Credit Collateralization provision so that the then existing Letter of Credit Usage is cash collateralized in accordance with the Letter of Credit Collateralization provision (whether or not the Revolver Commitments have terminated, an Overadvance exists or the conditions in Section 3 are satisfied).

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(o) Unless otherwise expressly agreed by Issuing Bank and Borrowers when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit.

(p) Issuing Bank shall be deemed to have acted with due diligence and reasonable care if Issuing Bank’s conduct is in accordance with Standard Letter of Credit Practice or in accordance with this Agreement.

(q) In the event of a direct conflict between the provisions of this Section 2.11 and any provision contained in any Issuer Document, it is the intention of the parties hereto that such provisions be read together and construed, to the fullest extent possible, to be in concert with each other. In the event of any actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms and provisions of this Section 2.11 shall control and govern.

(r) The provisions of this Section 2.11 shall survive the termination of this Agreement and the repayment in full of the Obligations with respect to any Letters of Credit that remain outstanding.

(s) At Borrowers’ costs and expense, Borrowers shall execute and deliver to Issuing Bank such additional certificates, instruments and/or documents and take such additional action as may be reasonably requested by Issuing Bank to enable Issuing Bank to issue any Letter of Credit pursuant to this Agreement and related Issuer Document, to protect, exercise and/or enforce Issuing Banks’ rights and interests under this Agreement or to give effect to the terms and provisions of this Agreement or any Issuer Document. Each Borrower irrevocably appoints Issuing Bank as its attorney-in-fact and authorizes Issuing Bank, without notice to Borrowers, to execute and deliver ancillary documents and letters customary in the letter of credit business that may include but are not limited to advisements, indemnities, checks, bills of exchange and issuance documents. The power of attorney granted by the Borrowers is limited solely to such actions related to the issuance, confirmation or amendment of any Letter of Credit and to ancillary documents or letters customary in the letter of credit business. This appointment is coupled with an interest.

2.12. LIBOR Option.

(a) Interest and Interest Payment Dates. In lieu of having interest charged at the rate based upon the Base Rate, Borrowers shall have the option, subject to Section 2.12(b) below (the “LIBOR Option”) to have interest on all or a portion of the Revolving Loans be charged (whether at the time when made (unless otherwise provided herein), upon conversion from a Base Rate Loan to a LIBOR Rate Loan, or upon continuation of a LIBOR Rate Loan as a LIBOR Rate Loan) at a rate of interest based upon the LIBOR Rate. Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the Interest Period applicable thereto, (ii) the date on which all or any portion of the Obligations are accelerated pursuant to the terms hereof, or (iii) the

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date on which this Agreement is terminated pursuant to the terms hereof. On the last day of each applicable Interest Period, unless Borrowers have properly exercised the LIBOR Option with respect thereto, the interest rate applicable to such LIBOR Rate Loan automatically shall convert to the rate of interest then applicable to Base Rate Loans of the same type hereunder. At any time that an Event of Default has occurred and is continuing, at the written election of Agent or the Required Lenders, Borrowers no longer shall have the option to request that Revolving Loans bear interest at a rate based upon the LIBOR Rate.

(b) LIBOR Election.

(i) Borrowers may, at any time and from time to time, so long as Borrowers have not received a notice from Agent (which notice Agent may elect to give or not give in its discretion unless Agent is directed to give such notice by the Required Lenders, in which case, it shall give the notice to Borrowers), after the occurrence and during the continuance of an Event of Default, to terminate the right of Borrowers to exercise the LIBOR Option during the continuance of such Event of Default, elect to exercise the LIBOR Option by notifying Agent prior to 1:00 p.m. at least three Business Days prior to the commencement of the proposed Interest Period (the “LIBOR Deadline”). Notice of Borrowers’ election of the LIBOR Option for a permitted portion of the Revolving Loans and an Interest Period pursuant to this Section shall be made by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR Deadline. Promptly upon its receipt of each such LIBOR Notice, Agent shall provide a copy thereof to each of the affected Lenders.

(ii) Each LIBOR Notice shall be irrevocable and binding on Borrowers. In connection with each LIBOR Rate Loan, each Borrower shall indemnify, defend, and hold Agent and the Lenders harmless against any loss, cost, or expense actually incurred by Agent or any Lender as a result of (A) the payment or required assignment of any principal of any LIBOR Rate Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (B) the conversion of any LIBOR Rate Loan other than on the last day of the Interest Period applicable thereto, or (C) the failure to borrow, convert, continue or prepay any LIBOR Rate Loan on the date specified in any LIBOR Notice delivered pursuant hereto (such losses, costs, or expenses, “Funding Losses”). A certificate of Agent or a Lender delivered to Borrowers setting forth in reasonable detail any amount or amounts that Agent or such Lender is entitled to receive pursuant to this Section 2.12 shall be conclusive absent manifest error. Borrowers shall pay such amount to Agent or the Lender, as applicable, within 30 days of the date of its receipt of such certificate. If a payment of a LIBOR Rate Loan on a day other than the last day of the applicable Interest Period would result in a Funding Loss, Agent may, in its sole discretion at the request of Borrowers, hold the amount of such payment as cash collateral in support of the Obligations until the last day of such Interest Period and apply such amounts to the payment of the applicable LIBOR Rate Loan on such last day, it being agreed that Agent has no obligation to so defer the application of payments to any LIBOR Rate Loan and that, in the event that Agent does not defer such application, Borrowers shall be obligated to pay any resulting Funding Losses.

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(iii) Unless Agent, in its sole discretion, agrees otherwise, Borrowers shall have not more than seven LIBOR Rate Loans in effect at any given time. Borrowers may only exercise the LIBOR Option for proposed LIBOR Rate Loans of at least $1,000,000.

(c) Conversion; Prepayment. Borrowers may convert LIBOR Rate Loans to Base Rate Loans or prepay LIBOR Rate Loans at any time; provided, that in the event that LIBOR Rate Loans are converted or prepaid on any date that is not the last day of the Interest Period applicable thereto, including as a result of any prepayment through the required application by Agent of any payments or proceeds of Collateral in accordance with Section 2.4(b) or for any other reason, including early termination of the term of this Agreement or acceleration of all or any portion of the Obligations pursuant to the terms hereof, each Borrower shall indemnify, defend, and hold Agent and the Lenders and their Participants harmless against any and all Funding Losses in accordance with Section 2.12 (b)(ii).

(d) Special Provisions Applicable to LIBOR Rate. The LIBOR Rate may be adjusted by Agent with respect to any Lender on a prospective basis to take into account any additional or increased costs to such Lender of maintaining or obtaining any eurodollar deposits or increased costs (other than Taxes which shall be governed by Section 16), in each case, due to changes in applicable law occurring subsequent to the commencement of the then applicable Interest Period, including any Changes in Law and changes in the reserve requirements imposed by the Board of Governors, which additional or increased costs would increase the cost of funding or maintaining loans bearing interest at the LIBOR Rate. In any such event, the affected Lender shall give Borrowers and Agent notice of such a determination and adjustment and Agent promptly shall transmit the notice to each other Lender and, upon its receipt of the notice from the affected Lender, Borrowers may, by notice to such affected Lender (A) require such Lender to furnish to Borrowers a statement setting forth in reasonable detail the basis for adjusting such LIBOR Rate and the method for determining the amount of such adjustment, or (B) repay the LIBOR Rate Loans of such Lender with respect to which such adjustment is made (together with any amounts due under Section 2.12(b)(ii)).

(e) No Requirement of Matched Funding. Anything to the contrary contained herein notwithstanding, neither Agent, nor any Lender, nor any of their Participants, is required actually to acquire eurodollar deposits to fund or otherwise match fund any Obligation as to which interest accrues at the LIBOR Rate.

2.13. Interest Rate Inadequate or Unfair.. In the event that Agent or any Lender shall have determined that:

(a) reasonable means do not exist for ascertaining the LIBOR Rate for any Interest Period; or

(b) Dollar deposits in the relevant amount and for the relevant maturity are not available in the London interbank LIBOR market, with respect to an outstanding LIBOR Rate Loan, a proposed LIBOR Rate Loan, or a proposed conversion of a Base Rate Loan into a LIBOR Rate Loan; or

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(c) the making, maintenance or funding of any LIBOR Rate Loan has been made impracticable or unlawful by compliance by Agent or such Lender in good faith with any applicable law or any interpretation or application thereof by any Governmental Authority or with any request or directive of any such Governmental Authority (whether or not having the force of law), or

(d) the LIBOR Rate will not adequately and fairly reflect the cost to such Lender of the establishment or maintenance of any LIBOR Rate Loan,

then Agent shall give Borrowers prompt written or telephonic notice of such determination. If such notice is given prior to a Benchmark Replacement Date (as defined below), (i) any such requested LIBOR Rate Loan shall be made as a Base Rate Loan, unless Borrowers shall notify Agent no later than 1:00 p.m. two (2) Business Days prior to the date of such proposed borrowing, that its request for such borrowing shall be cancelled or made as an unaffected type of LIBOR Rate Loan, (ii) any Base Rate Loan or LIBOR Rate Loan which was to have been converted to an affected type of LIBOR Rate Loan shall be continued as or converted into a Base Rate Loan, or, if Borrowers shall notify Agent, no later than 1:00 p.m. two (2) Business Days prior to the proposed conversion, shall be maintained as an unaffected type of LIBOR Rate Loan, and (iii) any outstanding affected LIBOR Rate Loans shall be converted into a Base Rate Loan, or, if Borrowers shall notify Agent, no later than 1:00 p.m. two (2) Business Days prior to the last Business Day of the then current Interest Period applicable to such affected LIBOR Rate Loan, shall be converted into an unaffected type of LIBOR Rate Loan, on the last Business Day of the then current Interest Period for such affected LIBOR Rate Loans (or sooner, if any Lender cannot continue to lawfully maintain such affected LIBOR Rate Loan). Until such notice has been withdrawn, Lenders shall have no obligation to make an affected type of LIBOR Rate Loan or maintain outstanding affected LIBOR Rate Loans and no Borrower shall have the right to convert a Base Rate Loan or an unaffected type of LIBOR Rate Loan into an affected type of LIBOR Rate Loan.

2.14. Successor LIBOR Rate Index.

(a) Benchmark Replacement. Notwithstanding anything to the contrary herein or in the other Loan Documents, if Agent determines that a Benchmark Transition Event or an Early Opt-in Event has occurred, Agent may amend this Agreement to replace the LIBOR Rate with a Benchmark Replacement in accordance with this Section 2.14; and any such amendment shall be in writing, shall specify the date that the Benchmark Replacement is effective and will not require any further action or consent of any other party to this Agreement, including Borrower. Until the Benchmark Replacement is effective, each advance, conversion and renewal of a LIBOR Rate Loan will continue to bear interest with reference to the LIBOR Rate; provided, however, during a Benchmark Unavailability Period (i) any pending selection of, conversion to or renewal of a LIBOR Rate Loan that has not yet gone into effect shall be deemed to be a selection of, conversion to or renewal of a Base Rate Loan, (ii) all outstanding LIBOR Rate Loans shall automatically be converted to Base Rate Loans at the expiration of the existing Interest Period (or sooner, if Agent cannot continue to lawfully maintain such affected LIBOR Rate Loan) and (iii) any component of the Base Rate based upon the LIBOR Rate will not be used in any determination of the Base Rate.

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(b) Benchmark Replacement Conforming Changes. In connection with the implementation of a Benchmark Replacement, Agent will have the right to make Benchmark Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in the other Loan Documents, any amendments implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement.

(c) Notices; Standards for Decisions and Determinations. Agent will promptly notify Borrowers of (i) the effectiveness of any Benchmark Replacement Conforming Changes and (ii) the commencement of any Benchmark Unavailability Period. Any determination, decision or election that may be made by Agent pursuant to this Section 2.14 including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action, will be conclusive and binding absent manifest error and may be made in its sole discretion and without consent from any other party hereto, except, in each case, as expressly required pursuant to this Section 2.14.

2.15. Capital Requirements.

(a) If, after the date hereof, Issuing Bank or any Lender determines that (i) any Change in Law regarding capital, liquidity or reserve requirements for banks or bank holding companies, or (ii) compliance by Issuing Bank or such Lender, or their respective parent bank holding companies, with any guideline, request or directive of any Governmental Authority regarding capital adequacy or liquidity requirements (whether or not having the force of law), has the effect of reducing the return on Issuing Bank’s, such Lender’s, or such holding companies’ capital or liquidity as a consequence of Issuing Bank’s or such Lender’s commitments, Loans, participations or other obligations hereunder to a level below that which Issuing Bank, such Lender, or such holding companies could have achieved but for such Change in Law or compliance (taking into consideration Issuing Bank’s, such Lender’s, or such holding companies’ then existing policies with respect to capital adequacy or liquidity requirements and assuming the full utilization of such entity’s capital) by any amount deemed by Issuing Bank or such Lender to be material, then Issuing Bank or such Lender may notify Borrowers and Agent thereof. Following receipt of such notice, Borrowers agree to pay Issuing Bank or such Lender on demand the amount of such reduction of return of capital as and when such reduction is determined, payable within 30 days after presentation by Issuing Bank or such Lender of a statement in the amount and setting forth in reasonable detail Issuing Bank’s or such Lender’s calculation thereof and the assumptions upon which such calculation was based (which statement shall be deemed true and correct absent manifest error). In determining such amount, Issuing Bank or such Lender may use any reasonable averaging and attribution methods. Failure or delay on the part of Issuing Bank or any Lender to demand compensation pursuant to this Section shall not constitute a waiver of Issuing Bank’s or such Lender’s right to demand such compensation; provided, that Borrowers shall not be required to compensate Issuing Bank or a Lender pursuant to this Section for any reductions in return incurred more than 180 days prior to the date that Issuing Bank or such Lender notifies Borrowers of such Change in Law giving rise to such reductions and of such Lender’s intention to claim compensation therefor; provided further, that if such claim arises by reason of the Change in Law that is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.

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(b) If Issuing Bank or any Lender requests additional or increased costs referred to in Section 2.11(l) or Section 2.12(d) or amounts under Section 2.15(a) (such Issuing Bank or Lender, an “Affected Lender”), then, at the request of Administrative Borrower, such Affected Lender shall use reasonable efforts to promptly designate a different one of its lending offices or to assign its rights and obligations hereunder to another of its offices or branches, if (i) in the reasonable judgment of such Affected Lender, such designation or assignment would eliminate or reduce amounts payable pursuant to Section 2.11(l), Section 2.12(d) or Section 2.15(a), as applicable, or would eliminate the illegality or impracticality of funding or maintaining LIBOR Rate Loans, and (ii) in the reasonable judgment of such Affected Lender, such designation or assignment would not subject it to any material unreimbursed cost or expense and would not otherwise be materially disadvantageous to it. Borrowers agree to pay all reasonable out-of-pocket costs and expenses incurred by such Affected Lender in connection with any such designation or assignment. If, after such reasonable efforts, such Affected Lender does not so designate a different one of its lending offices or assign its rights to another of its offices or branches so as to eliminate Borrowers’ obligation to pay any future amounts to such Affected Lender pursuant to Section 2.11(l), Section 2.12(d) or Section 2.15(a), as applicable, or to enable Borrowers to obtain LIBOR Rate Loans, then Borrowers (without prejudice to any amounts then due to such Affected Lender under Section 2.11(l), Section 2.12(d) or Section 2.15(a), as applicable) may, unless prior to the effective date of any such assignment the Affected Lender withdraws its request for such additional amounts under Section 2.11(l), Section 2.12(d) or Section 2.15(a), as applicable, or indicates that it is no longer unlawful or impractical to fund or maintain LIBOR Rate Loans, may designate a different Issuing Bank or substitute a Lender or prospective Lender, in each case, reasonably acceptable to Agent and, unless a Default or Event of Default shall have occurred and be continuing, Borrowers to purchase the Obligations owed to such Affected Lender and such Affected Lender’s commitments hereunder (a “Replacement Lender”), and if such Replacement Lender agrees to such purchase, such Affected Lender shall assign to the Replacement Lender its Obligations and commitments, and upon such purchase by the Replacement Lender, which such Replacement Lender shall be deemed to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement and such Affected Lender shall cease to be “Issuing Bank” or a “Lender” (as the case may be) for purposes of this Agreement.

(c) Notwithstanding anything herein to the contrary, the protection of Sections 2.11(l), 2.12(d), and 2.15 shall be available to Issuing Bank and each Lender (as applicable) regardless of any possible contention of the invalidity or inapplicability of the law, rule, regulation, judicial ruling, judgment, guideline, treaty or other change or condition which shall have occurred or been imposed, so long as it shall be customary for issuing banks or lenders affected thereby to comply therewith. Notwithstanding any other provision herein, neither Issuing Bank nor any Lender shall demand compensation pursuant to this Section 2.15 if it shall not at the time be the general policy or practice of Issuing Bank or such Lender (as the case may be) to demand such compensation in similar circumstances under comparable provisions of other credit agreements, if any.

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2.16. [Intentionally Omitted].

2.17. Joint and Several Liability of Borrowers.

(a) Each Borrower is accepting joint and several liability hereunder and under the other Loan Documents in consideration of the financial accommodations to be provided by the Lender Group under this Agreement, for the mutual benefit, directly and indirectly, of each Borrower and in consideration of the undertakings of the other Borrowers to accept joint and several liability for the Obligations.

(b) Each Borrower, jointly and severally, hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other Borrowers, with respect to the payment and performance of all of the Obligations (including any Obligations arising under this Section 2.17), it being the intention of the parties hereto that all the Obligations shall be the joint and several obligations of each Borrower without preferences or distinction among them. Accordingly, each Borrower hereby waives any and all suretyship defenses that would otherwise be available to such Borrower under applicable law.

(c) If and to the extent that any Borrower shall fail to make any payment with respect to any of the Obligations as and when due, whether upon maturity, acceleration, or otherwise, or to perform any of the Obligations in accordance with the terms thereof, then in each such event the other Borrowers will make such payment with respect to, or perform, such Obligations until such time as all of the Obligations are paid in full, and without the need for demand, protest, or any other notice or formality.

(d) The Obligations of each Borrower under the provisions of this Section 2.17 constitute the absolute and unconditional, full recourse Obligations of each Borrower enforceable against each Borrower to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of the provisions of this Agreement (other than this Section 2.17(d)) or any other circumstances whatsoever.

(e) Without limiting the generality of the foregoing and except as otherwise expressly provided in this Agreement, each Borrower hereby waives presentments, demands for performance, protests and notices, including notices of acceptance of its joint and several liability, notice of any Revolving Loans or any Letters of Credit issued under or pursuant to this Agreement, notice of the occurrence of any Default, Event of Default, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Agreement, notices of the existence, creation, or incurring of new or additional Obligations or other financial accommodations or of any demand for any payment under this Agreement, notice of any action at any time taken or omitted by Agent or Lenders under or in respect of any of the Obligations, any right to proceed against any other Borrower or any other Person, to proceed against or exhaust any security held from any other Borrower or any other Person, to protect, secure, perfect, or insure any security interest or Lien on any property subject thereto or exhaust any right to take any action against any other Borrower, any other Person, or any collateral, to pursue any other remedy in any member of the Lender Group’s or any Bank Product Provider’s power whatsoever, any requirement of

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diligence or to mitigate damages and, generally, to the extent permitted by applicable law, all demands, notices and other formalities of every kind in connection with this Agreement (except as otherwise provided in this Agreement), any right to assert against any member of the Lender Group or any Bank Product Provider, any defense (legal or equitable), set-off, counterclaim, or claim which each Borrower may now or at any time hereafter have against any other Borrower or any other party liable to any member of the Lender Group or any Bank Product Provider, any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Obligations or any security therefor, and any right or defense arising by reason of any claim or defense based upon an election of remedies by any member of the Lender Group or any Bank Product Provider including any defense based upon an impairment or elimination of such Borrower’s rights of subrogation, reimbursement, contribution, or indemnity of such Borrower against any other Borrower. Without limiting the generality of the foregoing, each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by Agent or Lenders at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by Agent or Lenders in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower. Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Agent or Lender with respect to the failure by any Borrower to comply with any of its respective Obligations, including any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder, which might, but for the provisions of this Section 2.17 afford grounds for terminating, discharging or relieving any Borrower, in whole or in part, from any of its Obligations under this Section 2.17, it being the intention of each Borrower that, so long as any of the Obligations hereunder remain unsatisfied, the Obligations of each Borrower under this Section 2.17 shall not be discharged except by performance and then only to the extent of such performance. The Obligations of each Borrower under this Section 2.17 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any other Borrower or any Agent or Lender. Each of the Borrowers waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement hereof. Any payment by any Borrower or other circumstance which operates to toll any statute of limitations as to any Borrower shall operate to toll the statute of limitations as to each of the Borrowers. Each of the Borrowers waives any defense based on or arising out of any defense of any Borrower or any other Person, other than payment of the Obligations to the extent of such payment, based on or arising out of the disability of any Borrower or any other Person, or the validity, legality, or unenforceability of the Obligations or any part thereof from any cause, or the cessation from any cause of the liability of any Borrower other than payment of the Obligations to the extent of such payment. Agent may, at the election of the Required Lenders, foreclose upon any Collateral held by Agent by one or more judicial or nonjudicial sales or other dispositions, in accordance with applicable law or may exercise any other right or remedy Agent, any other member of the Lender Group, or any Bank Product Provider may have against any Borrower or any other Person, or any security, in each case, without affecting or impairing in any way the liability of any of the Borrowers hereunder except to the extent the Obligations have been paid.

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(f) Each Borrower represents and warrants to Agent and Lenders that such Borrower is currently informed of the financial condition of Borrowers and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment of the Obligations. Each Borrower further represents and warrants to Agent and Lenders that such Borrower has read and understands the terms and conditions of the Loan Documents. Each Borrower hereby covenants that such Borrower will continue to keep informed of Borrowers’ financial condition and of all other circumstances which bear upon the risk of nonpayment or nonperformance of the Obligations.

(g) The provisions of this Section 2.17 are made for the benefit of Agent, each member of the Lender Group, each Bank Product Provider, and their respective successors and assigns, and may be enforced by it or them from time to time against any or all Borrowers as often as occasion therefor may arise and without requirement on the part of Agent, any member of the Lender Group, any Bank Product Provider, or any of their successors or assigns first to marshal any of its or their claims or to exercise any of its or their rights against any Borrower or to exhaust any remedies available to it or them against any Borrower or to resort to any other source or means of obtaining payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this Section 2.17 shall remain in effect until all of the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by Agent or any Lender in connection with the insolvency, bankruptcy or reorganization of any Borrower, or otherwise, the provisions of this Section 2.17 will forthwith be reinstated in effect, as though such payment had not been made.

(h) Each Borrower hereby agrees that it will not enforce any of its rights that arise from the existence, payment, performance or enforcement of the provisions of this Section 2.17, including rights of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of Agent, any other member of the Lender Group, or any Bank Product Provider against any Borrower, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including the right to take or receive from any Borrower, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security solely on account of such claim, remedy or right, unless and until such time as all of the Obligations have been paid in full in cash. Any claim which any Borrower may have against any other Borrower with respect to any payments to any Agent or any member of the Lender Group hereunder or under any of the Bank Product Agreements are hereby expressly made subordinate and junior in right of payment, without limitation as to any increases in the Obligations arising hereunder or thereunder, to the prior payment in full in cash of the Obligations and, in the event of any insolvency, bankruptcy, receivership, liquidation, reorganization or other similar proceeding under the laws of any jurisdiction relating to any Borrower, its debts or its assets, whether voluntary or involuntary, all such Obligations shall be paid in full in cash before any payment or distribution of any character, whether in cash, securities or other property, shall

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be made to any other Borrower therefor. If any amount shall be paid to any Borrower in violation of the immediately preceding sentence, such amount shall be held in trust for the benefit of Agent, for the benefit of the Lender Group and the Bank Product Providers, and shall forthwith be paid to Agent to be credited and applied to the Obligations and all other amounts payable under this Agreement, whether matured or unmatured, in accordance with the terms of this Agreement, or to be held as Collateral for any Obligations or other amounts payable under this Agreement thereafter arising. Notwithstanding anything to the contrary contained in this Agreement, no Borrower may exercise any rights of subrogation, contribution, indemnity, reimbursement or other similar rights against, and may not proceed or seek recourse against or with respect to any property or asset of, any other Borrower (the “Foreclosed Borrower”), including after payment in full of the Obligations, if all or any portion of the Obligations have been satisfied in connection with an exercise of remedies in respect of the Equity Interests of such Foreclosed Borrower whether pursuant to this Agreement or otherwise.

3.	CONDITIONS; TERM OF AGREEMENT.

3.1. Conditions Precedent to the Initial Extension of Credit. The obligation of each Lender to make the initial extensions of credit provided for hereunder is subject to the fulfillment, to the satisfaction of Agent and each Lender, of each of the conditions precedent set forth below (the making of such initial extensions of credit by a Lender being conclusively deemed to be its satisfaction or waiver of the conditions precedent):

(a) [intentionally omitted];

(b) Agent shall have received each of the following documents, in form and substance satisfactory to Agent, duly executed and delivered, and each such document shall be in full force and effect:

(i) the most recent completed Borrowing Base Certificate required to be delivered pursuant to the Existing DIP Credit Agreement,

(ii) Initial Borrowing Request and Flow of Funds Agreement,

(iii) the Guaranty and Security Agreement,

(iv) the Intercompany Subordination Agreement,

(v) a completed Perfection Certificate for each of the Loan Parties,

(vi) the Patent Security Agreement,

(vii) the Trademark Security Agreement; and

(viii) the Intercreditor Agreement;

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(c) Agent shall have received a certificate from the Secretary of each Loan Party (i) subject to Schedule 3.6, attesting to the resolutions of such Loan Party’s board of directors authorizing its execution, delivery, and performance of the Loan Documents to which it is a party, (ii) authorizing specific officers of such Loan Party to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of such Loan Party;

(d) Agent shall have received copies of each Loan Party’s Governing Documents, as amended, modified, or supplemented to the Closing Date, which Governing Documents shall be certified by the Secretary of such Loan Party;

(e) Agent shall have received a certificate of status with respect to each Loan Party, dated within 21 days of the Closing Date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of such Loan Party, which certificate shall indicate that such Loan Party is in good standing (or the equivalent thereof issued by any applicable jurisdiction) in such jurisdiction;

(f) after giving effect to all advances to be made at closing and the payment of all fees and expenses relating to the Transactions, Excess Availability shall be equal to or greater than $25,000,000 and Agent shall have received a Borrowing Base Certificate providing evidence thereof;

(g) Agent shall have received certificates of insurance, as are required by Section 5.6 of this Agreement, the form and substance of which shall be satisfactory to Agent;

(h) Agent shall have received a customary opinion of (i) Paul, Weiss, Rifkind, Wharton & Garrison LLP, the Loan Parties’ counsel and (ii) Norton Rose Fulbright, the Loan Parties’ local Texas counsel, in each case, in form and substance satisfactory to Agent;

(i) Agent shall have received the projected consolidated income statement, balance sheet, and statement of cash flows of Parent and its Subsidiaries as of and for the year ending December 31, 2020 in form and substance (including as to scope and underlying assumptions) satisfactory to Agent;

(j) to the extent due and payable, and invoiced at least 3 Business Days prior to the Closing Date, Borrowers shall have paid all Lender Group Expenses incurred in connection with the transactions evidenced by this Agreement and the other Loan Documents;

(k) to the extent requested 10 Business Days prior to the Closing Date, Agent and each Lender shall have received, in form and substance acceptable to Agent and each Lender executed Certificate of Beneficial Ownership and such other documentation and other information requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act (it being understood that as of the date hereof Agent has received all such documentation and other information that it requires and that such documentation and other information is satisfactory to Agent);

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(l) Since December 31, 2019, there shall not have occurred any material adverse change in the business, operations, condition (financial or otherwise) or results of operations of the Loan Parties and their Subsidiaries, taken as a whole, other than as a result of the commencement, the continuation, or events leading up to the commencement of the Case;

(m) No litigation, investigation or proceeding before or by any arbitrator or governmental body shall be continuing or threatened against any Borrower or against the officers or directors of any Borrower (A) in connection with this Agreement, the other Loan Documents, the Senior Secured Notes Documents, the Convertible Notes Documents or any of the transactions contemplated thereby and which, in the reasonable opinion of Agent, is deemed material or (B) which could, in the reasonable opinion of Agent, have a Material Adverse Effect;

(n) Each document (including any Uniform Commercial Code financing statement) required by this Agreement, any related agreement or under law or reasonably requested by Agent to be filed, registered or recorded in order to create, in favor of Agent, a perfected security interest in or lien upon the Collateral shall have been executed and delivered to Agent by the applicable Loan Party and be in proper form for filing in the appropriate jurisdiction; provided that, the provision or perfection of any Collateral that is not or cannot be executed and delivered on the Closing Date after the use of commercially reasonable efforts to provide or perfect the Agent’s security interest in such Collateral (for the avoidance of doubt, not including Collateral of a type that can be perfected by the filing of UCC financing statements or the delivery of stock certificates (together with undated powers endorsed in blank) of the Borrowers and their respective Subsidiaries) shall not constitute an Event of Default if executed and delivered within a period reasonably agreed to by the Loan Parties and Agent;

(o) Receipt of the documents evidencing the Convertible Notes and Senior Secured Notes, each in form and substance reasonably satisfactory to Agent;

(p) The Bankruptcy Court shall have entered the Confirmation Order, in form and substance satisfactory to Agent, confirming the Plan of Reorganization. The Confirmation Order shall not have been reversed, vacated, stayed, amended, supplemented or otherwise modified. The Confirmation Order shall authorize the Loan Parties that are Debtors to execute, deliver and perform under the Loan Documents. The respective Indebtedness or Obligations of the Loan Parties, and any Liens securing same that are outstanding immediately after the consummation of the Plan of Reorganization shall not exceed the amount contemplated or otherwise permitted by the Plan of Reorganization; and

(q) Agent shall have received a certificate from the Loan Parties attesting that all conditions precedent to the Effective Date (as defined in the Plan of Reorganization) have been satisfied and that no conditions precedent to the Effective Date (as defined in the Plan of Reorganization) have been waived.

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3.2. Conditions Precedent to all Extensions of Credit. The obligation of the Lender Group (or any member thereof) to make any Revolving Loans hereunder (or to extend any other credit hereunder) at any time shall be subject to the following conditions precedent:

(a) the representations and warranties of each Loan Party or its Subsidiaries contained in this Agreement or in the other Loan Documents shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of such extension of credit, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date); and

(b) no Default or Event of Default shall have occurred and be continuing on the date of such extension of credit, nor shall either result from the making thereof.

3.3. Maturity. The Commitments shall continue in full force and effect for a term ending on the Maturity Date (unless terminated earlier in accordance with the terms hereof).

3.4. Effect of Maturity. On the Maturity Date, all commitments of the Lender Group to provide additional credit hereunder shall automatically be terminated and all of the Obligations (other than Hedge Obligations) immediately shall become due and payable without notice or demand and Borrowers shall be required to repay all of the Obligations (other than Hedge Obligations) in full. No termination of the obligations of the Lender Group (other than payment in full of the Obligations and termination of the Commitments) shall relieve or discharge any Loan Party of its duties, obligations, or covenants hereunder or under any other Loan Document and Agent’s Liens in the Collateral shall continue to secure the Obligations and shall remain in effect until all Obligations have been paid in full. When all of the Obligations have been paid in full, Agent will, at Borrowers’ sole expense, execute and deliver any termination statements, lien releases, discharges of security interests, and other similar discharge or release documents (and, if applicable, in recordable form) as are reasonably necessary to release, as of record, Agent’s Liens and all notices of security interests and liens previously filed by Agent.

3.5. Early Termination by Borrowers. Borrowers have the option, at any time upon ten Business Days prior written notice to Agent, to repay all of the Obligations in full and terminate the Commitments. The foregoing notwithstanding, (a) Borrowers may rescind termination notices relative to proposed payments in full of the Obligations with the proceeds of third party Indebtedness if the closing for such issuance or incurrence does not happen on or before the date of the proposed termination (in which case, a new notice shall be required to be sent in connection with any subsequent termination), and (b) Borrowers may extend the date of termination at any time with the consent of Agent (which consent shall not be unreasonably withheld or delayed).

3.6. Conditions Subsequent. The obligation of the Lender Group (or any member thereof) to continue to make Revolving Loans (or otherwise extend credit hereunder) is subject to the fulfillment, on or before the date applicable thereto, of the conditions subsequent set forth on Schedule 3.6 to this Agreement (the failure by Borrowers to so perform or cause to be performed such conditions subsequent as and when required by the terms thereof (unless such date is extended, in writing, by Agent, which Agent may do without obtaining the consent of the other members of the Lender Group), shall constitute an Event of Default).

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4.	REPRESENTATIONS AND WARRANTIES.

In order to induce the Lender Group to enter into this Agreement, each Borrower makes the following representations and warranties to the Lender Group which shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true, correct, and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each Revolving Loan (or other extension of credit) made thereafter, as though made on and as of the date of such Revolving Loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date), and such representations and warranties shall survive the execution and delivery of this Agreement:

4.1. Due Organization and Qualification; Subsidiaries.

(a) Each Loan Party and each of its Subsidiaries (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect, and (iii) after giving effect to the Confirmation Order and the Plan of Reorganization, has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

(b) Set forth on Schedule 4.1(b) to this Agreement is a complete and accurate description of the authorized Equity Interests of Parent, by class, and a description of the number of shares of each such class that are issued and outstanding as of the Closing Date. Except as set forth on Schedule 4.1(b) to this Agreement (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), Parent is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests.

(c) Set forth on Schedule 4.1(c) to this Agreement (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), is a complete and accurate list of the Parent’s direct and indirect Subsidiaries, showing, in each case after giving effect to the Plan of Reorganization: (i) the number of shares of each class of common and preferred Equity Interests authorized for each of such Subsidiaries, and (ii) the number and the percentage of the outstanding shares of each such class owned directly or indirectly by Parent. After giving effect to the Confirmation Order and the Plan of Reorganization, all of the outstanding Equity Interests of each Subsidiary of Parent has been validly issued and is fully paid and non-assessable.

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(d) Except as set forth on Schedule 4.1(d) to this Agreement (as such Schedule may be updated from time to time to reflect changes resulting from transactions permitted under this Agreement), (i) there are no subscriptions, options, warrants, or calls relating to any shares of any Loan Party’s or any of its Subsidiaries’ Equity Interests, including any right of conversion or exchange under any outstanding security or other instrument, and (ii) no Loan Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any shares of its Equity Interests or any security convertible into or exchangeable for any of its Equity Interests.

4.2. Due Authorization; No Conflict.

(a) After giving effect to the Confirmation Order and the Plan of Reorganization, as to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party have been duly authorized by all necessary action on the part of such Loan Party.

(b) After giving effect to the Confirmation Order and the Plan of Reorganization, as to each Loan Party, the execution, delivery, and performance by such Loan Party of the Loan Documents to which it is a party do not and will not (i) violate any material provision of federal, state, or local law or regulation applicable to any Loan Party or its Subsidiaries, the Governing Documents of any Loan Party or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on any Loan Party or its Subsidiaries, (ii) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Material Contract of any Loan Party or its Subsidiaries where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (iii) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of any Loan Party, other than Permitted Liens, or (iv) require any approval of any holder of Equity Interests of a Loan Party, other than consents or approvals that have been obtained and that are still in force.

4.3. Governmental Consents. After giving effect to the Confirmation Order and the Plan of Reorganization, the execution, delivery, and performance by each Loan Party of the Loan Documents to which such Loan Party is a party and the consummation of the transactions contemplated by the Loan Documents do not and will not require any registration with, consent, or approval of, or notice to, or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation, as of the Closing Date.

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4.4. Binding Obligations; Perfected Liens.

(a) Each Loan Document has been duly executed and delivered by each Loan Party that is a party thereto and, after giving effect to the Confirmation Order and the Plan of Reorganization, is the legally valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(b) Agent’s Liens are validly created, perfected (other than (i) in respect of motor vehicles that are subject to a certificate of title, (ii) money, (iii) letter-of-credit rights (other than supporting obligations), (iv) commercial tort claims (other than those that, by the terms of the Guaranty and Security Agreement, are required to be perfected), and (v) any Deposit Accounts and Securities Accounts not subject to a Control Agreement as permitted by Section 7(k)(iv) of the Guaranty and Security Agreement, and subject only to the filing of financing statements, in each case, in the appropriate filing offices), and first priority Liens, subject only to the Intercreditor Agreement, Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens, or the interests of lessors under Capital Leases.

4.5. Title to Assets; No Encumbrances. Each of the Loan Parties and its Subsidiaries has (a) good, sufficient and legal title to (in the case of fee interests in Real Property), (b) valid leasehold interests in (in the case of leasehold interests in real or personal property), and (c) good and marketable title to (in the case of all other personal property), all of their respective assets reflected in their most recent financial statements delivered pursuant to Section 5.1, in each case except for assets disposed of since the date of such financial statements to the extent permitted hereby. All of such assets are free and clear of Liens except for Liens created under the Loan Documents and Permitted Liens.

4.6. Litigation.

(a) There are no actions, suits, or proceedings pending or, to the knowledge of any Borrower, threatened in writing against a Loan Party or any of its Subsidiaries that either individually or in the aggregate could reasonably be expected to result in a Material Adverse Effect.

(b) Schedule 4.6(b) to this Agreement sets forth a complete and accurate description of each of the actions, suits, or proceedings with asserted liabilities in excess of, or that could reasonably be expected to result in liabilities in excess of, $2,500,000 (to the extent not covered by independent third-party insurance) that, as of the Closing Date, is pending or, to the knowledge of any Borrower, after due inquiry, threatened against a Loan Party or any of its Subsidiaries.

4.7. Compliance with Laws. No Loan Party nor any of its Subsidiaries (a) is in violation of any applicable laws, rules, regulations, executive orders, or codes (including Environmental Laws) that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect, or (b) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

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4.8. No Material Adverse Effect. All historical financial statements relating to the Loan Parties and their Subsidiaries that have been delivered by Borrowers to Agent have been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for the lack of footnotes and being subject to year-end audit adjustments) and present fairly in all material respects, the Loan Parties’ and their Subsidiaries’ consolidated financial condition as of the date thereof and results of operations for the period then ended. Since December 31, 2019, no event, circumstance, or change has occurred that has or could reasonably be expected to result in a Material Adverse Effect.

4.9. Solvency. After giving effect to the Confirmation Order and the Plan of Reorganization:

(a) Each Loan Party is Solvent; and

(b) No transfer of property is being made by any Loan Party and no obligation is being incurred by any Loan Party in connection with the transactions contemplated by this Agreement or the other Loan Documents with the intent to hinder, delay, or defraud either present or future creditors of such Loan Party.

4.10. Employee Benefits. As of the Closing Date, no Loan Party, none of their Subsidiaries, nor any of their ERISA Affiliates maintains or contributes to any Benefit Plan or Multiemployer Plan. Except as could not reasonably be expected to have a Material Adverse Effect, (a) each Employee Benefit Plan is compliant with, and has been operated in compliance with, all applicable laws, including ERISA and the IRC, and the terms of such plan, and (b) no Loan Party or Subsidiary has any liability for any excise tax, fine or penalty for breach of fiduciary duty with respect to any Employee Benefit Plan. No Termination Event has occurred with respect to any Benefit Plan that could reasonably be expected to give rise to a Material Adverse Effect or Lien on the assets of any Loan Party or Subsidiary thereof under ERISA or the IRC, and to the knowledge of Borrowers, (a) no Reportable Event has occurred with respect to any Multiemployer Plan and (b) each Multiemployer Plan has complied with and been administered in accordance with applicable provisions of ERISA and the IRC. Except as could not reasonably be expected to have a Material Adverse Effect, (a) no Loan Party or Subsidiary thereof or, to the knowledge of Borrower, any ERISA Affiliate has had a complete or partial withdrawal from any Multiemployer Plan for which there is any unsatisfied withdrawal liability, and (b) as of the most recent valuation date applicable thereto, no Loan Party or Subsidiary nor, to the knowledge of Borrower, any ERISA Affiliate has received notice that any Multiemployer Plan is insolvent.

4.11. Environmental Condition. Except as set forth on Schedule 4.11 to this Agreement, (a) to each Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets has ever been used by a Loan Party or its Subsidiaries, in the disposal of, or to produce, store, handle, treat, release, or transport, any Hazardous Materials, where such disposal, production, storage, handling, treatment, release or transport was in violation, in any material

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respect, of any applicable Environmental Law, (b) to each Borrower’s knowledge, no Loan Party’s nor any of its Subsidiaries’ properties or assets has ever been designated or identified in any manner pursuant to any environmental protection statute as a Hazardous Materials disposal site, (c) no Loan Party nor any of its Subsidiaries has received notice that a Lien arising under any Environmental Law has attached to any revenues or to any Real Property owned or operated by a Loan Party or its Subsidiaries, and (d) no Loan Party nor any of its Subsidiaries nor any of their respective facilities or operations is subject to any outstanding written order, consent decree, or settlement agreement with any Person relating to any Environmental Law or Environmental Liability that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

4.12. Complete Disclosure. All factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about the industry of any Loan Party or its Subsidiaries) furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender (including all information contained in the Schedules hereto or in the other Loan Documents) for purposes of or in connection with this Agreement or the other Loan Documents, and all other such factual information taken as a whole (other than forward-looking information and projections and information of a general economic nature and general information about the industry of any Loan Party or its Subsidiaries) hereafter furnished by or on behalf of a Loan Party or its Subsidiaries in writing to Agent or any Lender will be, true and accurate, in all material respects, on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. The Projections delivered to Agent on or prior to the Closing Date represent, and as of the date on which any other Projections are delivered to Agent, such additional Projections represent, Borrowers’ good faith estimate, on the date such Projections are delivered, of the Loan Parties’ and their Subsidiaries’ future performance for the periods covered thereby based upon assumptions believed by Borrowers to be reasonable at the time of the delivery thereof to Agent (it being understood that such Projections are subject to significant uncertainties and contingencies, many of which are beyond the control of the Loan Parties and their Subsidiaries, and no assurances can be given that such Projections will be realized, and although reflecting Borrowers’ good faith estimate, projections or forecasts based on methods and assumptions which Borrowers believed to be reasonable at the time such Projections were prepared, are not to be viewed as facts, and that actual results during the period or periods covered by the Projections may differ materially from projected or estimated results).

4.13. [Intentionally Omitted]].

4.14. Indebtedness. Set forth on Schedule 4.14 to this Agreement is a true and complete list of all Indebtedness of each Loan Party and each of its Subsidiaries outstanding immediately prior to the Closing Date (other than unsecured Permitted Indebtedness outstanding immediately prior to the Closing Date with respect to any one transaction or a series of related transactions in an amount not to exceed $1,000,000) that is to remain outstanding immediately after giving effect to the closing hereunder on the Closing Date and such Schedule accurately sets forth the aggregate principal amount of such Indebtedness as of the Closing Date.

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4.15. Payment of Taxes. All material Tax returns and reports of each Loan Party and its Subsidiaries required to be filed by any of them have been timely (taking into account any valid extensions) filed, and all material Taxes required to be paid by each have been timely paid prior to the date on which any fine, penalty, interest, late charge or loss may be added thereto for non-payment except (i) Taxes, that are being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with GAAP or (ii) to the extent that the failure to do so could not be reasonably expected to result in a Material Adverse Effect. Each Loan Party and each of its Subsidiaries have made adequate provision in accordance with GAAP for all Taxes not yet due and payable.

4.16. Margin Stock. Neither any Loan Party nor any of its Subsidiaries owns any Margin Stock or is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock. No part of the proceeds of the loans made to Borrowers will be used to purchase or carry any Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors. Neither any Loan Party nor any of its Subsidiaries expects to acquire any Margin Stock.

4.17. Governmental Regulation. No Loan Party nor any of its Subsidiaries is subject to regulation under the Federal Power Act or the Investment Company Act of 1940 or under any other federal or state statute or regulation which may limit its ability to incur Indebtedness or which may otherwise render all or any portion of the Obligations unenforceable. No Loan Party nor any of its Subsidiaries is a “registered investment company” or a company “controlled” by a “registered investment company” or a “principal underwriter” of a “registered investment company” as such terms are defined in the Investment Company Act of 1940.

4.18. [Intentionally Omitted].

4.19. Employee and Labor Matters. There is (i) no unfair labor practice complaint pending or, to the knowledge of any Borrower, threatened against any Loan Party or its Subsidiaries before any Governmental Authority and no grievance or arbitration proceeding pending or threatened against any Loan Party or its Subsidiaries which arises out of or under any collective bargaining agreement and that could reasonably be expected to result in a material liability, (ii) to the knowledge of any Borrower, no strike, labor dispute, slowdown, stoppage or similar action or grievance pending or threatened in writing against any Loan Party or its Subsidiaries that could reasonably be expected to result in a material liability, or (iii) to the knowledge of any Borrower, no union representation question existing with respect to the employees of any Loan Party or its Subsidiaries and no union organizing activity taking place with respect to any of the employees of any Loan Party or its Subsidiaries. None of any Loan Party or its Subsidiaries has incurred any liability or obligation under the Worker Adjustment and Retraining Notification Act or similar state law, which remains unpaid or unsatisfied. The hours worked and payments made to employees of each Loan Party and its Subsidiaries have not been

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in violation of the Fair Labor Standards Act or any other applicable legal requirements, except to the extent such violations could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. All material payments due from any Loan Party or its Subsidiaries on account of wages and employee health and welfare insurance and other benefits have been paid or accrued as a liability on the books of Parent, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

4.20. [Intentionally Omitted].

4.21. Leases. Each Loan Party and its Subsidiaries enjoy peaceful and undisturbed possession under all leases material to their business to which they are parties or under which they are operating, and, subject to Permitted Protests, all of such material leases are valid and subsisting and no material default by the applicable Loan Party or its Subsidiaries exists under any of them.

4.22. Eligible Accounts. As to each Account that is identified by Borrowers as an Eligible Account in a Borrowing Base Certificate submitted to Agent, such Account is (a) a bona fide existing payment obligation of the applicable Account Debtor created by the sale and delivery of Inventory or the rendition of services to such Account Debtor in the ordinary course of a Borrower’s business and in accordance with applicable contractual provisions governing such sale and delivery or rendition, (b) owed to a Borrower without any known defenses, disputes, offsets, counterclaims, or rights of return or cancellation, and (c) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Accounts.

4.23. Eligible Inventory. As to each item of Inventory that is identified by Borrowers as Eligible Inventory in a Borrowing Base Certificate submitted to Agent, such Inventory is (a) of good and merchantable quality, free from known defects, and (b) not excluded as ineligible by virtue of one or more of the excluding criteria (other than any Agent-discretionary criteria) set forth in the definition of Eligible Inventory.

4.24. Intentionally Omitted.

4.25. Location of Inventory. Except as set forth on Schedule 4.25 (as such Schedule may be updated pursuant to Section 5.14), the Eligible Inventory of Borrowers and the Inventory of Borrowers and their Subsidiaries with a value in excess of $250,000 in the aggregate is not stored with a bailee, warehouseman, or similar party and is located only at, or in-transit between, (a) the locations identified on Schedule 4.25 to this Agreement (as such Schedule may be updated pursuant to Section 5.14) or (b) a worksite at which Equipment is deployed.

4.26. Inventory Records. Each Loan Party keeps correct and accurate records itemizing and describing the type, quality, and quantity of its and its Subsidiaries’ Inventory and the book value thereof.

4.27. Intentionally Omitted.

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4.28. Material Contracts and Senior Secured Notes Documents.

(a) Set forth on Schedule 4.28 (as such Schedule may be updated from time to time in accordance herewith) is a reasonably detailed description of the Material Contracts of each Loan Party and its Subsidiaries as of the most recent date on which Parent provided the Compliance Certificate pursuant to Section 5.1; provided, that Borrowers may amend Schedule 4.28 to add additional Material Contracts so long as such amendment occurs by written notice to Agent on the date that Parent provides the Compliance Certificate. Except for matters which, either individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Material Contract (other than those that have expired at the end of their normal terms) is in full force and effect and is binding upon and enforceable against the applicable Loan Party or its Subsidiary), and is not in default due to the action or inaction of the applicable Loan Party or its Subsidiary.

(b) Borrowers have delivered to Agent a complete and correct copy of the Senior Secured Notes Documents, including all schedules and exhibits thereto, in effect on the Closing Date. The execution, delivery and performance of each of the Senior Secured Notes Documents has been duly authorized by all necessary action on the part of each Borrower who is a party thereto. Each Senior Secured Notes Document is the legal, valid and binding obligation of each Borrower who is a party thereto, enforceable against each such Borrower in accordance with its terms, in each case, except (i) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights, and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought.

(c) Borrowers have delivered to Agent a complete and correct copy of the Convertible Notes Documents, including all schedules and exhibits thereto, in effect on the Closing Date. The execution, delivery and performance of each of the Convertible Notes Documents has been duly authorized by all necessary action on the part of each Borrower who is a party thereto. Each Convertible Notes Document is the legal, valid and binding obligation of each Borrower who is a party thereto, enforceable against each such Borrower in accordance with its terms, in each case, except (i) as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting generally the enforcement of creditors’ rights, and (ii) the availability of the remedy of specific performance or injunctive or other equitable relief is subject to the discretion of the court before which any proceeding therefor may be brought.

4.29. Immaterial Subsidiaries. No Immaterial Subsidiary (a) owns any assets (other than assets of a de minimis nature), (b) has any liabilities (other than liabilities of a de minimis nature), or (c) engages in any business activity.

4.30. Hedge Agreements. On each date that any Hedge Agreement is executed by any Hedge Provider, Borrower and each other Loan Party satisfy all eligibility, suitability and other requirements under the Commodity Exchange Act (7 U.S.C. § 1, et seq., as in effect from time to time) and the Commodity Futures Trading Commission regulations.

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4.31. Certificate of Beneficial Ownership. The Certificate of Beneficial Ownership executed and delivered to Agent and Lenders for each Borrower on or prior to the date of this Agreement, as updated from time to time in accordance with this Agreement, is accurate, complete and correct as of the date hereof and as of the date any such update is delivered. Borrowers acknowledge and agree that the Certificate of Beneficial Ownership is one of the other Loan Documents.

5.	AFFIRMATIVE COVENANTS.

Each Borrower covenants and agrees that, until the termination of all of the Commitments and payment in full of the Obligations:

5.1. Financial Statements, Reports, Certificates. Borrowers (a) will deliver to Agent, with copies to each Lender, each of the financial statements, reports, and other items set forth on Schedule 5.1 to this Agreement no later than the times specified therein, (b) agree that no Subsidiary of a Loan Party will have a fiscal year different from that of Parent, (c) agree to maintain a system of accounting that enables Borrowers to produce financial statements in accordance with GAAP, and (d) agree that they will, and will cause each other Loan Party to, (i) keep a reporting system that shows all additions, sales, claims, returns, and allowances with respect to their and their Subsidiaries’ sales, and (ii) maintain their billing systems and practices substantially as in effect as of the Closing Date and shall only make material modifications thereto with notice to, and with the consent of, Agent. Documents required to be delivered pursuant to this Section 5.1 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrowers post such documents, or provides a link thereto on Borrower’s website on the Internet and (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and Agent have access (whether a commercial, third-party or governmental website or whether sponsored by Agent), so long as, in either case, a link to such materials is delivered electronically by Borrowers to Agent within the applicable deadlines.

5.2. Reporting. Borrowers (a) will deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the reports set forth on Schedule 5.2 to this Agreement at the times specified therein, and (b) agree to use commercially reasonable efforts in cooperation with Agent to facilitate and implement a system of electronic collateral reporting in order to provide electronic reporting of each of the items set forth on such Schedule.

5.3. Existence. Except as otherwise permitted under Section 6.3 or Section 6.4, each Loan Party will, and will cause each of its Subsidiaries to, at all times preserve and keep in full force and effect such Person’s valid existence and good standing in its jurisdiction of organization and with respect to all other jurisdictions in which it is qualified to do business and any rights, franchises, permits, licenses, accreditations, authorizations, or other approvals material to their businesses, in each case, except as could not reasonably be expected to result in a Material Adverse Effect.

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5.4. Maintenance of Properties. Each Loan Party will, and will cause each of its Subsidiaries to, maintain and preserve all of its assets that are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear, tear, casualty, and condemnation and Permitted Dispositions excepted.

5.5. Taxes. Each Loan Party shall, and shall cause each Subsidiary and any member of the Tax Group to, pay and discharge all material Taxes imposed on any Borrower, any Subsidiary, or any member of the Tax Group prior to the date on which penalties attach except (a) where such Tax is being contested in good faith and for which adequate reserves have been established in compliance with GAAP, or (b) to the extent that the failure to do so could not be reasonably expected to result in a Material Adverse Effect.

5.6. Insurance.

(a) Each Loan Party shall, and shall cause each Subsidiary to, with reputable insurers in respect of their respective Properties, carry and maintain insurance in such amounts and against such risks as is customarily maintained by other Persons of similar size engaged in similar businesses, or self-insure to the extent that is customary for Persons of similar size engaged in similar businesses; provided that, the amounts of such insurance and the risks covered by such insurance shall be acceptable to Agent, in its Permitted Discretion.

(b) If requested by Agent, certified copies of all policies of insurance or certificates thereof, and endorsements and renewals thereof shall be delivered by the Administrative Borrower to and retained by Agent. All policies of property insurance with respect to the Collateral either shall have attached thereto a lender’s loss payable endorsement in favor of Agent for its benefit and the ratable benefit of the Secured Parties, in form reasonably satisfactory to Agent, and all policies of liability insurance with respect to the Loan Parties shall name Agent for its benefit and the ratable benefit of the Secured Parties as an additional insured. All policies or certificates of insurance shall set forth the coverage, the limits of liability, the name of the carrier, the policy number, and the period of coverage. All policies of property insurance with respect to the Collateral and liability insurance with respect to the Loan Parties shall contain a provision that notwithstanding any contrary agreements between any Borrower, the Subsidiaries and the applicable insurance company, such policies will not be canceled or amended in any manner that is materially adverse to the interests of Agent or the Secured Parties (which provision shall include any reduction in the scope or limits of coverage) without at least thirty (30) days’ (or ten (10) days in the case of non-payment) prior written notice to Agent.

(c) Any proceeds of insurance referred to in this Section 5.6 which are paid to Agent shall (i) if no Event of Default has occurred and is continuing, be returned to the Borrower, and (ii) if an Event of Default has occurred and is continuing, be immediately applied to the Obligations in accordance with Section 2.4(b).

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5.7. Inspection.

(a) Each Loan Party will, and will cause each of its Subsidiaries to, permit Agent, any Lender, and each of their respective duly authorized representatives or agents to visit any of its properties and inspect any of its assets or books and records, to examine and make copies of its books and records, and to discuss its affairs, finances, and accounts with, and to be advised as to the same by, its officers and employees (provided, that an authorized representative of a Borrower shall be allowed to be present) at such reasonable times and intervals as Agent or any Lender, as applicable, may designate and, so long as no Default or Event of Default has occurred and is continuing, with reasonable prior notice to Borrowers and during regular business hours, at Borrowers’ expense in accordance with the provisions of Section 2.10(c) and the Fee Letter.

(b) Each Loan Party will, and will cause each of its Subsidiaries to, permit Agent and each of its duly authorized representatives or agents to conduct field examinations, appraisals or valuations at such reasonable times and intervals as Agent may designate, at Borrowers’ expense in accordance with the provisions of Section 2.10(c) and the Fee Letter.

5.8. Compliance with Laws. Each Loan Party will, and will cause each of its Subsidiaries to, comply with the requirements of all applicable laws, rules, regulations, and orders of any Governmental Authority, other than laws, rules, regulations, and orders the non-compliance with which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

5.9. Environmental. Each Loan Party will, and will cause each of its Subsidiaries to,

(a) Keep any property either owned or operated by any Loan Party or its Subsidiaries free of any Environmental Liens or post bonds or other financial assurances sufficient to satisfy the obligations or liability evidenced by such Environmental Liens,

(b) Comply, in all material respects, with Environmental Laws and provide to Agent documentation of such compliance which Agent reasonably requests,

(c) Promptly notify Agent of any release of which any Loan Party has knowledge of a Hazardous Material in any reportable quantity and that would reasonably be expected to result in a Material Adverse Effect from or onto property owned or operated by any Loan Party or its Subsidiaries and take any Remedial Actions required to abate said release or otherwise to come into compliance, in all material respects, with applicable Environmental Law, and

(d) Promptly, but in any event within ten Business Days of its receipt thereof, provide Agent with written notice of any of the following: (i) notice that an Environmental Lien has been filed against any of the real or personal property of a Loan Party or its Subsidiaries, (ii) commencement of any Environmental Action or written notice that an Environmental Action will be filed against a Loan Party or its Subsidiaries, and (iii) written notice of a violation, citation, or other administrative order from a Governmental Authority.

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5.10. Disclosure Updates. Each Loan Party will, promptly and in no event later than five Business Days after obtaining knowledge thereof, notify Agent if any written information, exhibit, or report furnished to Agent or the Lenders contained, at the time it was furnished, any untrue statement of a material fact or omitted to state any material fact necessary to make the statements contained therein not misleading in light of the circumstances in which made. The foregoing to the contrary notwithstanding, any notification pursuant to the foregoing provision will not cure or remedy the effect of the prior untrue statement of a material fact or omission of any material fact nor shall any such notification have the effect of amending or modifying this Agreement or any of the Schedules hereto.

5.11. Formation of Subsidiaries . Each Loan Party will, within thirty days after any Loan Party forms any direct or indirect Subsidiary, acquires any direct or indirect Subsidiary after the Closing Date, or at any time when any direct or indirect Subsidiary of a Loan Party that previously was an Immaterial Subsidiary becomes a Material Subsidiary, within thirty days of such event (or such later date as permitted by Agent in its sole discretion) (a) unless such Subsidiary is an Excluded Subsidiary, cause such new Subsidiary (i) if such Subsidiary is a Domestic Subsidiary and Administrative Borrower requests, subject to the consent of Agent, that such Domestic Subsidiary be joined as a Borrower hereunder, to provide to Agent a Joinder to this Agreement, and (ii) to provide to Agent a joinder to the Guaranty and Security Agreement, in each case, together with such other security agreements (including Mortgages and related deliveries in accordance with Section 5.17) as well as appropriate financing statements (and with respect to all property subject to a Mortgage, fixture filings), all in form and substance reasonably satisfactory to Agent (including being sufficient to grant Agent a first priority Lien (subject to Permitted Liens) in and to the assets of such newly formed or acquired Subsidiary); (b) provide, or cause the applicable Loan Party to provide, to Agent a pledge agreement (or an addendum to the Guaranty and Security Agreement) and appropriate certificates and powers or financing statements, pledging all of the direct or beneficial ownership interest in such new Subsidiary in form and substance reasonably satisfactory to Agent; provided, that only 65% (or such greater percentage that would not reasonably be expected to result in any additional material tax liability (or a material loss of tax benefits) to the Loan Parties; provided, that any such additional pledge shall be automatically released without any further action by any of the parties hereto upon notice to the Agent by the Administrative Borrower of its reasonable determination that such additional pledge is reasonably expected to result in any additional material tax liability (or a material loss of tax benefits)) of the total outstanding voting Equity Interests of any first tier Subsidiary of a Loan Party that is a Foreign Subsidiary, a FSHC or a Disregarded Domestic Person (and none of the Equity Interests of any Subsidiary of such Foreign Subsidiary, FSHC or Disregarded Domestic Person) shall be required to be pledged (which pledge, if reasonably requested by Agent, shall be governed by the laws of the jurisdiction of such Subsidiary), and (c) provide to Agent all other documentation, including the Governing Documents of such Subsidiary and one or more opinions of counsel reasonably satisfactory to Agent, which, in its opinion, is appropriate with respect to the execution and delivery of the applicable documentation referred to above (including Mortgages and related deliveries in accordance with Section 5.17). Any document, agreement, or instrument executed or issued pursuant to this Section 5.11 shall constitute a Loan Document.

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5.12. Further Assurances. Each Loan Party will, and will cause each of the other Loan Parties to, at any time upon the reasonable request of Agent, execute or deliver to Agent any and all financing statements, fixture filings, security agreements, pledges, assignments, mortgages, deeds of trust, opinions of counsel, and all other documents (the “Additional Documents”) that Agent may reasonably request in form and substance reasonably satisfactory to Agent, to create, perfect, and continue perfected or to better perfect Agent’s Liens in all of the assets of each of the Loan Parties (whether now owned or hereafter arising or acquired, tangible or intangible, real or personal) (other than any assets expressly excluded from the Collateral (as defined in the Guaranty and Security Agreement) pursuant to Section 3 of the Guaranty and Security Agreement), to create and perfect Liens in favor of Agent in any Real Property in accordance with Section 5.17, and in order to fully consummate all of the transactions contemplated hereby and under the other Loan Documents; provided, that the foregoing shall not apply to any Subsidiary of a Loan Party that is an Excluded Subsidiary. To the maximum extent permitted by applicable law, if any Borrower or any other Loan Party refuses or fails to execute or deliver any reasonably requested Additional Documents within a reasonable period of time not to exceed ten Business Days following the request to do so, each Borrower and each other Loan Party hereby authorizes Agent to execute any such Additional Documents in the applicable Loan Party’s name and authorizes Agent to file such executed Additional Documents in any appropriate filing office. In furtherance of, and not in limitation of, the foregoing, each Loan Party shall take such actions as Agent may reasonably request from time to time to ensure that the Obligations are guaranteed by the Guarantors and are secured by substantially all of the assets of the Loan Parties, including all of the outstanding capital Equity Interests of each Borrower (other than Parent) and its Subsidiaries (in each case, other than with respect to any assets expressly excluded from the Collateral (as defined in the Guaranty and Security Agreement) pursuant to Section 3 of the Guaranty and Security Agreement).

5.13. Lender Meetings. Borrowers will, within 90 days after the close of each fiscal year of Parent, at the request of Agent or of the Required Lenders and upon reasonable prior notice, hold a meeting or conference call at a mutually agreeable time with all Lenders who choose to attend such meeting or conference call at which meeting or conference call shall be reviewed the financial results of the previous fiscal year and the financial condition of the Loan Parties and their Subsidiaries and the projections presented for the current fiscal year of the Parent; provided that the foregoing requirement may be satisfied by public earnings calls for all shareholders that are open to the Agent and the Lenders.

5.14. Location of Inventory; Chief Executive Office. Each Loan Party will, and will cause each of its Subsidiaries to, keep (a) their Eligible Inventory and Inventory with a value in excess of $250,000 in the aggregate only at (x) the locations identified on Schedule 4.25 to this Agreement (provided that Borrowers may amend Schedule 4.25 to this Agreement so long as such amendment occurs by written notice to Agent accompanying the delivery of a Borrowing Base Certificate for any particular month or week, as applicable, or a Compliance Certificate for a month that is the end of one of Borrowers’ fiscal quarters, in which such Inventory is moved to such new location and such new location is within the continental United States), and (y) a worksite at which Equipment is deployed, and (b) their respective chief executive offices only at the locations identified on Schedule 7 to the Guaranty and Security Agreement. Subject to Schedule 3.6 to this Agreement, each Loan Party will, and will cause each of its Subsidiaries to use their commercially reasonable efforts to obtain Collateral Access Agreements for each of the leased locations identified on Schedule 7 to the Guaranty and Security Agreement and Schedule 4.25 to this Agreement.

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5.15. [Intentionally Omitted].

5.16. Primary Treasury Management Relationship. As promptly as practicable after the Closing Date but in no event later than one hundred twenty (120) days following the Closing Date: (x) transfer to, and thereafter maintain with, PNC and/or any of its applicable affiliates the primary depository and cash management relationships of the Loan Parties, (y) direct all of the Loan Parties’ customers to remit payments to such applicable deposit accounts with PNC and (z) deliver to Agent evidence of the closure of all such deposit accounts which either are not maintained with PNC or its Affiliates or are not Excluded Accounts (as defined in the Guaranty and Security Agreement).

5.17. Additional Material Real Estate Assets. In the event that (a) any Real Property owned by a Loan Party is subject to a perfected Lien securing Senior Secured Notes (or any refinancings thereof permitted hereunder) or (b) the Senior Secured Notes (and any refinancings thereof permitted hereunder) shall have been paid in full and, in the case of this clause (b), (i) (A) one or more Loan Parties acquires Real Property after the Closing Date or (B) any Person that owns Real Property becomes a Loan Party after the Closing Date, and (ii) the aggregate book value or aggregate fair market value, as reasonably estimated by the Borrowers in good faith, of all such Real Property described in clause (i), together with the aggregate book value or aggregate fair market value, as reasonably estimated by the Borrowers in good faith, as applicable, of all other Real Property of the Loan Parties (other than the Excepted Real Property owned on the Closing Date) that are not subject to an Acceptable Security Interest under a Mortgage, exceeds $5,000,000, then such Loan Party shall (x) promptly take all such actions that are necessary to subject such Real Property (other than Real Property of the Loan Parties for which neither the aggregate book value nor the aggregate fair market value for all such Real Property for all Loan Parties (other than Excepted Real Property) equals or exceed $5,000,000) to a Lien in favor of Agent, including executing and delivering, or causing to be executed and delivered, one or more Mortgages with respect to such Real Property and requested by Agent, together with all documents, instruments, agreements, certificates, title insurance, title opinions, legal opinions and surveys related thereto that are reasonably requested by Agent and (y) reasonably in advance of the execution and delivery of any Mortgage covering any Real Property on which any “Building” or “Manufactured (Mobile) Home” (each, as defined in the applicable Flood Insurance Regulations) is located, deliver, or caused to be delivered, to Agent life-of-loan Federal Emergency Management Agency Standard Flood Hazard Determinations with respect to such Real Property.

5.18. Titled Collateral. In the event that any Certificated Equipment owned by a Loan Party is subject to a perfected Lien securing Senior Secured Notes (or any refinancings thereof permitted hereunder) or the Senior Secured Notes (and any refinancings thereof permitted hereunder) shall have been paid in full, each Loan Party shall cause the original certificate of title for each piece of Certificated Equipment (other than Excepted Certificated Equipment) purchased by it after the Closing Date to name Agent as the holder of an Acceptable Security Interest thereon and shall deliver a copy of such certificate of title to Agent (or its designated agent, including the Senior Secured Notes Collateral Agent) with such notation within 45 days after such purchase (or such later date as Agent may agree in its sole discretion).

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5.19. ERISA. Except as could not reasonably be expected to give rise to a Material Adverse Effect, each Loan Party shall cause any Employee Benefit Plan to be operated in accordance with all applicable laws, including ERISA and the IRC. Except as could not reasonably be expected in each case to give rise a Material Adverse Effect, the Loan Parties shall not, nor shall they permit any Subsidiary to, directly or indirectly: (i) engage in any transaction in connection with which any Loan Party or Subsidiary will incur either a civil penalty assessed pursuant to Section 502(c), (i) or (l) of ERISA or a Tax imposed by Chapter 43 of Subtitle D of the IRC; (ii) terminate any Benefit Plan in a manner, or take any other action with respect to any Benefit Plan, which could result in any liability to a Loan Party or Subsidiary to the PBGC (other than premiums in the ordinary course of business); (iii) fail to make full payment or contribution when due of all amounts due by such Loan Party or Subsidiary under the provisions of any Benefit Plan or Multiemployer Plan, or (iv) withdrawal from a Multiemployer Plan. The Loan Parties shall promptly provide notice to Agent upon becoming aware of any of the following if such event could reasonably be expected to have a Material Adverse Effect: (i) any Loan Party or Subsidiary sponsors or becomes obligated to contribute to a Benefit Plan or acquires directly or indirectly a liability to contribute to a Benefit Plan or Multiemployer Plan, or (ii) the occurrence of a Termination Event with respect to a Benefit Plan or any Loan Party or Subsidiary incurs withdrawal liability to any Multiemployer Plan.

5.20. Certificate of Beneficial Ownership and Other Additional Information. Provide to Agent and Lenders: (i) confirmation of the accuracy of the information set forth in the most recent Certificate of Beneficial Ownership provided to Agent and Lenders; (ii) a new Certificate of Beneficial Ownership, in form and substance acceptable to Agent and each Lender, when the individual(s) to be identified as a Beneficial Owner have changed; and (iii) such other information and documentation as may reasonably be requested by Agent or any Lender from time to time for purposes of compliance by Agent or such Lender with applicable laws (including without limitation the USA Patriot Act and other “know your customer” and anti-money laundering rules and regulations), and any policy or procedure implemented by Agent or such Lender to comply therewith.

5.21. Keepwell. If it is a Qualified ECP Loan Party, then jointly and severally, together with each other Qualified ECP Loan Party, hereby absolutely unconditionally and irrevocably (a) guarantees the prompt payment and performance of all Swap Obligations owing by each Non-Qualifying Party (it being understood and agreed that this guarantee is a guaranty of payment and not of collection), and (b) undertakes to provide such funds or other support as may be needed from time to time by any Non-Qualifying Party to honor all of such Non-Qualifying Party’s obligations under this Agreement or any other Loan Document in respect of Swap Obligations (provided, however, that each Qualified ECP Loan Party shall only be liable under this Section 5.21 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 5.21, or otherwise under this Agreement or any other Loan Document, voidable under applicable law, including applicable law relating to fraudulent

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conveyance or fraudulent transfer, and not for any greater amount). The obligations of each Qualified ECP Loan Party under this Section 5.21 shall remain in full force and effect until the payment in full of the Obligations, the termination of the Commitments and the termination of this Agreement and the other Loan Documents. Each Qualified ECP Loan Party intends that this Section 5.21 constitute, and this Section 5.21 shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

6.	NEGATIVE COVENANTS.

Each Borrower covenants and agrees that, until the termination of all of the Commitments and the payment in full of the Obligations:

6.1. Indebtedness. Each Loan Party will not, and will not permit any of its Subsidiaries to, create, incur, assume, suffer to exist, guarantee, or otherwise become or remain, directly or indirectly, liable with respect to any Indebtedness, except for Permitted Indebtedness.

6.2. Liens. Each Loan Party will not, and will not permit any of its Subsidiaries to, create, incur, assume, or suffer to exist, directly or indirectly, any Lien on or with respect to any of its assets, of any kind, whether now owned or hereafter acquired, or any income or profits therefrom, except for Permitted Liens.

6.3. Restrictions on Fundamental Changes.

(a) Each Loan Party will not, and will not permit any of its Subsidiaries to, merge or consolidate with or into any other Person, except that (i) any Loan Party (other than Global Holdings) may merge or be consolidated with or into any other Loan Party (other than Global Holdings), (ii) any Subsidiary of Global Holdings may merge or be consolidated with or into any other Subsidiary of Global Holdings and (iii) any Subsidiary may merge with any other Person (other than a Subsidiary of Global Holdings) in order to effect a Permitted Investment, a Permitted Acquisition or Permitted Disposition permitted pursuant to the applicable provisions of clause (m) of the definition of Permitted Investments and clauses (p), (s) and (t) of the definition of Permitted Dispositions, provided that, in each such case under (i),(ii) or (iii), immediately after giving effect to any such proposed transaction (x) no Default or Event of Default would exist, (y) in the case of any such merger to which any Borrower is a party, a Borrower (other than Global Holdings) is the surviving entity, and (z) in the case of any such merger to which a Guarantor is a party, a Guarantor is the surviving entity (or if not the surviving entity, the survivor shall, on the date of such transaction, (i) assume the obligations of such Guarantor and (ii) become a party to the Guaranty and Security Agreement and other applicable Loan Documents, in each case, in a manner reasonably acceptable to Agent (and in accordance with Section 5.11 hereof), including, without limitation, by (x) the execution of such documents of joinder and such lien and security agreements (in form and substance reasonably acceptable to Agent) as are necessary for Agent to have an Acceptable Security Interest in such Person’s Property (other than Excluded Property (as defined in the Guaranty and Security Agreement)) and in the Equity Interests in such Person, and (y) demonstrating that Agent will have an Acceptable Security Interest in such Person’s Collateral and its compliance in all material respects with applicable laws).

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(b) Each Loan Party will not, and will not permit any of its Subsidiaries to, effect any Acquisition other than a Permitted Acquisition.

6.4. Disposal of Assets. Other than Permitted Dispositions or transactions expressly permitted by Sections 6.3 or 6.9, each Loan Party will not, and will not permit any of its Subsidiaries to, convey, sell, lease, license, assign, transfer, or otherwise dispose of any of its or their assets or enter into any agreement to make any Disposition.

6.5. Nature of Business. No Borrower shall, and shall not permit any of its respective Subsidiaries to, materially change the character of such Borrower’s and such Subsidiaries’ collective business as conducted on the date of this Agreement, or engage in any type of business not reasonably related to such Borrower’s and such Subsidiaries’ collective business as presently and normally conducted.

6.6. Prepayments and Amendments. Each Loan Party will not, and will not permit any of its Subsidiaries to,

(a) except in connection with Refinancing Indebtedness permitted by Section 6.1,

(i) optionally prepay, redeem, defease, purchase, or otherwise acquire any Indebtedness of any Loan Party or its Subsidiaries, other than (A) the Obligations in accordance with this Agreement, (B) Hedge Obligations, or (C) Permitted Intercompany Advances,

(ii) make any payment on account of Indebtedness that has been contractually subordinated in right of payment to the Obligations if such payment is not permitted at such time under the subordination terms and conditions,

(iii) make any payment on account of Indebtedness of any Loan Party or its Subsidiaries in respect of Earn-Outs owing to sellers of assets or Equity Interests to such Loan Party or its Subsidiaries that is incurred in connection with the consummation of one or more Permitted Acquisitions unless the Payment Conditions are satisfied, or

(b) directly or indirectly, amend, modify, or change any of the terms or provisions of:

(i) any agreement, instrument, document, indenture, or other writing evidencing or concerning Permitted Indebtedness other than (A) the Obligations in accordance with this Agreement, (B) Hedge Obligations, (C) Permitted Intercompany Advances, (D) amendments to the Senior Secured Notes Documents made in accordance with clause (iii) below, and (E) Indebtedness permitted under clauses (i), (l) and (m) of the definition of Permitted Indebtedness,

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(ii) the Governing Documents of any Loan Party or any of its Subsidiaries if the effect thereof, either individually or in the aggregate, could reasonably be expected to be materially adverse to the interests of the Lenders, or

(iii) any Senior Secured Notes Document, Convertible Notes Document and/or Additional Notes Collateral Debt Documents if any such amendment, restatement, supplement or other modification to, or waiver of, such Senior Secured Notes Document, Convertible Notes Document and/or Additional Notes Collateral Debt Documents would (A) shorten or hasten the maturity date of the Senior Secured Notes, Convertible Notes and/or Additional Notes Collateral Debt, (B) shorten or hasten the date scheduled for any principal payment thereunder, (C) increase the amount of any required principal payment thereunder (or change the methodology by which any such principal amount is determined, unless the same shall have in all cases the effect of reducing the amount of any required principal payment thereunder or extending the date on which such required principal payment becomes due), (D) change any covenants, defaults, or events of default under the Senior Secured Notes Indenture, Convertible Notes Indenture and/or Additional Notes Collateral Debt Documents or any other Senior Secured Notes Document and/or Convertible Notes Document (including the addition of covenants, defaults, or events of default not contained in the Senior Secured Notes Indenture, Convertible Notes Indenture or other Senior Secured Notes Documents and/or Convertible Notes Documents as in effect on the date hereof) to restrict any Loan Party from making payments of the Obligations (or the obligations under the Senior Secured Notes Documents, Convertible Notes Documents and/or Additional Notes Collateral Debt Documents) or otherwise incurring additional Obligations (or the obligations under the Senior Secured Notes Documents, Convertible Notes Documents and/or Additional Notes Collateral Debt Documents) that would otherwise be permitted under the Senior Secured Notes Documents and/or Convertible Notes Documents as in effect on the date hereof; (E) change the redemption, mandatory prepayment, or defeasance provisions thereof in a manner that makes them more restrictive to the Loan Parties, (F) increase the maximum allowed amount of Indebtedness for borrowed money constituting principal outstanding under the Senior Secured Notes Documents and/or Additional Notes Collateral Debt Documents to an amount in excess of the Note Cap Amount (as defined in the Intercreditor Agreement) (provided that any amount owing pursuant to the Senior Secured Notes Documents and/or Additional Notes Collateral Debt Documents as interest, premiums, fees, costs, and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges shall, at all times for all purposes under this paragraph, be considered as such (and, for the avoidance of doubt, shall not count against the Note Cap Amount for purposes of this clause (F)), regardless of whether such amount may, before or after it has become owing, be added to the principal balance of the Indebtedness for borrowed money under the Senior Secured Notes Documents and/or Additional Notes Collateral Debt Documents), (G) increase the maximum allowed amount of Indebtedness for borrowed money constituting principal outstanding under the Convertible Notes Documents (provided that any amount owing pursuant to the Convertible Notes Documents as interest, premiums, fees, costs, and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges shall, at all times for all purposes under this paragraph, be considered as such, regardless of whether such amount may, before or after it has become owing, be added to the principal balance of the Indebtedness for borrowed money under the Convertible Notes Documents), or (H) (x) increase the cash interest

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rate on the Senior Secured Notes by more than 3.00% per annum above the cash interest rate in effect on the date hereof, (y) increase the cash interest rate on the Convertible Notes by more than 3.00% per annum above the cash interest rate in effect on the date hereof and/or (z) increase the cash interest rate on the Additional Notes Collateral Debt by more than the greater of 3.00% per annum above the cash interest rate on the Senior Secured Notes in effect on the date hereof (in each case, excluding, without limitation, (w) fluctuations in underlying rate indices, (x) customary changes in interest rates resulting from replacement (in accordance with prevailing industry practices for similar bond indentures) of any rate index/indices based on LIBOR with an alternative rate index/indices, (y) the imposition of a default rate of up to 2.00% per annum, and (z) increases in the cash interest rate to the extent not payable in cash).

6.7. Restricted Payments. Each Loan Party will not, and will not permit any of its Subsidiaries to, make any Restricted Payment; provided, that so long as it is permitted by law,

(a) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, Borrowers may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing) on account of redemptions of Equity Interests of Parent held by such Persons; provided, that the aggregate amount of such redemptions made by Borrowers during the term of this Agreement plus the amount of Indebtedness outstanding under clause (n) of the definition of Permitted Indebtedness, does not exceed $1,500,000 in the aggregate,

(b) so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, Borrowers may make distributions to former employees, officers, or directors of Parent (or any spouses, ex-spouses, or estates of any of the foregoing), solely in the form of forgiveness of Indebtedness of such Persons owing to any Loan Party on account of repurchases of the Equity Interests of Parent held by such Persons; provided, that such Indebtedness was incurred by such Persons solely to acquire Equity Interests of Parent,

(c) the Borrowers may, and may incur obligations to, purchase, repurchase, retire or otherwise acquire or retire for value its Equity Interests (i) held by any present or former director, officer, member of management or employee of any Subsidiary (or any spouses, ex-spouses, or estates of any of the foregoing) in accordance with repurchase rights or obligations established in connection with such Equity Interests, and (ii) pursuant to the terms of any incentive, benefit, compensation, employee or restricted equity interest purchase plan, phantom stock plan, equity interests option plan or other employee benefit or equity based compensation plan established by such Borrower; provided that the aggregate amount of all such Restricted Payments made to present or former directors, officers or members of management pursuant to Section 6.7(c)(i) shall not exceed $1,000,000 in any fiscal year of such Borrower,

(d) the Borrowers may, and may incur obligations to, make Restricted Payments consisting of (i) the cashless exercise of options or warrants, and the vesting of restricted stock, in connection with customary and reasonable employee compensation, incentive, or other benefit programs, and (ii) purchases of fractional shares provided that total cash disbursements for fractional shares do not exceed $100,000 in any fiscal year of such Borrower,

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(e) the Borrowers and the Guarantors may make Restricted Payments among and to each other,

(f) the Borrowers’ Foreign Subsidiaries may make Restricted Payments among and to each other,

(g) the Borrowers’ Foreign Subsidiaries may make Restricted Payments to any Borrower or any Guarantor,

(h) Restricted Payments made in accordance with Section 6.6(a) of this Agreement,

(i) [reserved]

(j) the Borrowers and their respective Subsidiaries may, and may incur obligations to, make offsets against and acquisitions of Equity Interests of such Borrower in satisfaction of customary indemnification and purchase price adjustment obligations owed to such Borrower or such Subsidiary thereof under Acquisition arrangements in which Equity Interests of Borrower were issued as consideration for such Acquisition, provided that the only consideration exchanged by any Loan Party in connection with any such Acquisition is the relief, satisfaction or waiver of claims of such Loan Party under such Acquisition arrangements,

(k) each Borrower may, and may incur obligations to, purchase, redeem or otherwise acquire its Equity Interests with the proceeds received from the substantially concurrent issue of new Equity Interests of the Borrower, and

(l) other Restricted Payments (other than to optionally prepay, redeem, defease, purchase, or otherwise acquire Indebtedness under the Senior Secured Notes (or any refinancing thereof permitted hereunder), any Additional Notes Collateral Debt (or any refinancing thereof permitted hereunder), and the Convertible Notes (or any Permitted Indebtedness issued in replacement thereof permitted hereunder)) so long as the Payment Conditions are satisfied.

6.8. Accounting Methods. Each Loan Party will not, and will not permit any of its Subsidiaries to, modify or change its fiscal year or its method of accounting (other than as may be required to conform to GAAP).

6.9. Investments. Each Loan Party will not, and will not permit any of its Subsidiaries to, directly or indirectly, make or acquire any Investment or incur any liabilities (including contingent obligations) for or in connection with any Investment except for Permitted Investments.

6.10. Transactions with Affiliates. Except as set forth on Schedule 6.10, each Loan Party will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of transactions (including, but not limited to, the purchase, sale, lease or exchange of Property, the making of any Investment, the giving of any Guarantee, the assumption of any obligation or the rendering of any service) with any of their Affiliates unless such transaction or series of transactions is on terms no less favorable to the Loan Party or such Subsidiary, as applicable, than those that could be obtained in a comparable arm’s length transaction with a Person that is not such an Affiliate except for:

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(a) pursuant to the Technical Services Agreement dated as of January 22, 2008 between Pioneer Drilling Services, Ltd. and Pioneer de Colombia SDAD LTDA-Colombian Branch as the same may be amended, supplemented, otherwise modified or replaced from time to time, so long as the terms thereof are not materially less favorable to the Borrower and its Subsidiaries,

(b) transactions between or among the Loan Parties (other than Global Holdings and its Subsidiaries) and transactions between or among Global Holdings and its Subsidiaries,

(c) transactions involving at least one of Global Holdings and its Subsidiaries to the extent permitted under (i) clause (a), (t)(iv), (u), (w) and/or (z) of the definition of Permitted Indebtedness, (ii) clause (a), (d) and/or (t) of the definition of Permitted Liens, (iii) clause (f), (t), (u) and/or (w) of the definition of Permitted Investment, (iv) clause (j), (p)(i) and/or (s) of the definition of Permitted Disposition, (v) Section 6.3(a)(iii), (vi) Section 6.7(c), (f) and/or (j), or (vii) Section 6.15(a),

(d) the payment of customary fees and reimbursement of out of pocket expenses, and customary indemnification arrangements, of officers and directors of the Borrower and its Subsidiaries,

(e) employment and severance arrangements entered into by the Borrower and its Subsidiaries in the ordinary course of business, and

(f) agreements for the non-exclusive licensing of intellectual property, or distribution of products, in each case, among the Loan Parties and their Subsidiaries for the purpose of the counterparty thereof operating its business, and agreements for the assignment of intellectual property from any Loan Party or any of its Subsidiaries to any Loan Party.

6.11. Use of Proceeds. Each Loan Party will not, and will not permit any of its Subsidiaries to, use the proceeds of any Loan made hereunder for any purpose other than (a) on the Closing Date, (i) to repay, in full, the outstanding principal, accrued interest, and accrued fees and expenses owing under or in connection with the Existing DIP Credit Agreement, and (ii) to pay the fees, costs, and expenses incurred in connection with the Transactions, in each case, as set forth in the Flow of Funds Agreement, and (b) thereafter, consistent with the terms and conditions hereof, for their lawful and permitted purposes; provided that no part of the proceeds of the Loans will be used to purchase or carry any such Margin Stock or to extend credit to others for the purpose of purchasing or carrying any such Margin Stock or for any purpose that violates the provisions of Regulation T, U or X of the Board of Governors.

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6.12. Limitation on Issuance of Equity Interests. Except for the issuance or sale of Qualified Equity Interests by Parent (and expect to the extent permitted by Section 6.4), each Loan Party will not, and will not permit any of its Subsidiaries to, issue or sell any of its Equity Interests.

6.13. Inventory with Bailees. Each Borrower will not, and will not permit any of its Subsidiaries to, store its Eligible Inventory or Inventory with a value in excess of $250,000 in the aggregate at any time with a bailee, warehouseman, or similar party (x) except as set forth on Schedule 4.25 (as such Schedule may be amended in accordance with Section 5.14) or (y) at a worksite at which Equipment is deployed.

6.14. Immaterial Subsidiaries. Each Loan Party will not permit any Immaterial Subsidiary to (a) own any assets (other than assets of a de minimis nature), (b) have any liabilities (other than liabilities of a de minimis nature), or (c) engage in any business activity.

6.15. Global Holdings and its Subsidiaries.

(a) Parent will not, and will not permit any Subsidiary (other than Global Holdings and its Subsidiaries) to Guarantee any Indebtedness or other obligations of Global Holdings or any of its Subsidiaries, except to the extent permitted by clauses (f) or (t) of the definition of Permitted Investments.

(b) Parent will not permit Global Holdings or any of its Subsidiaries to hold any Equity Interests in, or any Indebtedness of, any Borrower or any Subsidiary (other than Global Holdings and its Subsidiaries).

(c) Parent will cause the management, business and affairs of each Borrower and the Subsidiaries to be conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate financial statements of Global Holdings and its Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Borrowers and the Subsidiaries to be commingled) so that Global Holdings and each of its Subsidiaries will be treated as a corporate entity separate and distinct from the Borrowers and the Subsidiaries (other than Global Holdings and its Subsidiaries).

6.16. Plan of Reorganization Amendment. The Loan Parties will not exercise their rights under Section X.A of the Plan of Reorganization (“Modifications and Amendments”) in a manner adverse to the interests of the Lenders unless Agent has consented to any such proposed modification or amendment in writing.

7. FINANCIAL COVENANTS. Each Borrower covenants and agrees that, until the termination of all of the Commitments and the payment in full of the Obligations:

(a) Borrowers will maintain a Fixed Charge Coverage Ratio, calculated for each 12 month period ending on the first day of any Covenant Testing Period and the last day of each fiscal month occurring until the end of any Covenant Testing Period (including the last day thereof), in each case of at least 1.00 to 1.00; and

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(b) Borrowers shall not permit the Capital Expenditures of the Borrowers to exceed an amount equal to 125% of the budget set forth in the Projections for such Capital Expenditures of the Borrowers in any fiscal year; provided, (a) in the event Capital Expenditures during any fiscal year are less than the amount permitted for such fiscal year, then the unused amount (the “Carryover Amount”) may be carried over and used in the immediately succeeding fiscal year; and (b) any Carryover Amount shall not exceed 50% of the budget set forth in the Projections for such Capital Expenditures and shall be deemed to be the last amount spent in such succeeding fiscal year; provided, further, that if the Borrowers submit to Agent revised Projections, and Agent consents to such revised Projections in its sole discretion, the amount of Capital Expenditures permitted for purposes of this Section 7(b) shall be reset to 125% of the budget set forth in such revised Projections for such Capital Expenditures. Notwithstanding the foregoing, if as of the end of any fiscal quarter of the Borrowers, the sum of (i) Excess Availability plus (ii) Qualified Cash (in an amount not to exceed $10,000,000) is equal to or greater than $35,000,000 on each day of such fiscal quarter, the Loan Parties and their Subsidiaries shall not be subject to the limitation of Capital Expenditures under this Section 7(b) during such fiscal quarter.

8.	EVENTS OF DEFAULT.

Any one or more of the following events shall constitute an event of default (each, an “Event of Default”) under this Agreement:

8.1. Payments. If Borrowers fail to pay when due and payable, or when declared due and payable, (a) all or any portion of the Obligations consisting of interest, fees, or charges due the Lender Group, reimbursement of Lender Group Expenses, or other amounts (other than any portion thereof constituting principal) constituting Obligations (including any portion thereof that accrues after the commencement of an Insolvency Proceeding, regardless of whether allowed or allowable in whole or in part as a claim in any such Insolvency Proceeding), and such failure continues for a period of three Business Days, (b) all or any portion of the principal of the Loans, or (c) any amount payable to Issuing Bank in reimbursement of any drawing under a Letter of Credit;

8.2. Covenants. If any Loan Party or any of its Subsidiaries:

(a) fails to perform or observe any covenant or other agreement contained in any of (i) Sections 3.6, 5.1, 5.2, 5.3 (solely if any Borrower is not in good standing in its jurisdiction of organization), 5.7 (solely if any Borrower refuses to allow Agent or its representatives or agents to visit any Borrower’s properties, inspect its assets or books or records, examine and make copies of its books and records, or discuss Borrowers’ affairs, finances, and accounts with officers and employees of any Borrower), 5.10, 5.11, 5.13, or 5.14 of this Agreement, (ii) Section 6 of this Agreement, (iii) Section 7 of this Agreement, or (iv) Section 7 of the Guaranty and Security Agreement; or

(b) fails to perform or observe any covenant or other agreement contained in this Agreement, or in any of the other Loan Documents, in each case, other than any such covenant or agreement that is the subject of another provision of this Section 8 (in which event such other provision of this Section 8 shall govern), and such failure continues for a period of thirty days after the earlier of (i) the date on which such failure shall first become known to any officer of any Borrower, or (ii) the date on which written notice thereof is given to Borrowers by Agent;

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8.3. Judgments. If one or more unstayed judgments, orders, or awards for the payment of money involving an aggregate amount of $15,000,000, or more (except to the extent fully covered (other than to the extent of customary deductibles) by insurance pursuant to which the insurer has not denied coverage) is entered or filed against a Loan Party or any of its Subsidiaries, or with respect to any of their respective assets, and either (a) there is a period of thirty consecutive days at any time after the entry of any such judgment, order, or award during which (i) the same is not discharged, satisfied, vacated, or bonded pending appeal, or (ii) a stay of enforcement thereof is not in effect, or (b) enforcement proceedings are commenced upon such judgment, order, or award;

8.4. Voluntary Bankruptcy, etc.. If an Insolvency Proceeding is commenced by a Loan Party or any of its Subsidiaries;

8.5. Involuntary Bankruptcy, etc.. If an Insolvency Proceeding is commenced against a Loan Party or any of its Subsidiaries and any of the following events occur: (a) such Loan Party or such Subsidiary consents to the institution of such Insolvency Proceeding against it, (b) the petition commencing the Insolvency Proceeding is not timely controverted, (c) the petition commencing the Insolvency Proceeding is not dismissed within sixty calendar days of the date of the filing thereof, (d) an interim trustee is appointed to take possession of all or any substantial portion of the properties or assets of, or to operate all or any substantial portion of the business of, such Loan Party or its Subsidiary, or (e) an order for relief shall have been issued or entered therein;

8.6. Default Under Other Agreements. If there is (a) an “Event of Default” (as defined in the Senior Secured Notes Indenture) which results in a right by the lenders thereunder, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, or results in an automatic acceleration thereof, (b) an “Event of Default” (as defined in the Convertible Notes Indenture) which results in a right by the lenders thereunder, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, or results in an automatic acceleration thereof, (c) a default in one or more agreements to which a Loan Party or any of its Subsidiaries is a party with one or more third Persons relative to a Loan Party’s or any of its Subsidiaries’ Indebtedness involving an aggregate amount of $15,000,000 or more, and such default (i) occurs at the final maturity of the obligations thereunder, or (ii) results in a right by such third Person, irrespective of whether exercised, to accelerate the maturity of such Loan Party’s or its Subsidiary’s obligations thereunder, or (d) a default in or an involuntary early termination of one or more Hedge Agreements to which a Loan Party or any of its Subsidiaries is a party involving an aggregate amount of $15,000,000 or more;

8.7. Representations, etc. If any warranty, representation, certificate, statement, or Record made herein or in any other Loan Document or delivered in writing to Agent or any Lender in connection with this Agreement or any other Loan Document proves to be untrue in any material respect (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of the date of issuance or making or deemed making thereof;

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8.8. Guaranty. If the obligation of any Guarantor under the guaranty contained in the Guaranty and Security Agreement is limited in any material respect or terminated by operation of law or by such Guarantor (other than in accordance with the terms of this Agreement) or if any Guarantor repudiates, or revokes or purports to repudiate or revoke, in writing, any such guaranty;

8.9. Security Documents. If the Guaranty and Security Agreement or any other Loan Document that purports to create a Lien, shall, for any reason fail or cease to create a valid and perfected and, (except to the extent of Permitted Liens which are non-consensual Permitted Liens, permitted purchase money Liens or the interests of lessors under Capital Leases) first priority Lien (subject to the Intercreditor Agreement) on the Collateral covered thereby, except as a result of a disposition of the applicable Collateral in a transaction permitted under this Agreement;

8.10. Loan Documents. The validity or enforceability of any Loan Document shall at any time for any reason (other than solely as the result of an action or failure to act on the part of Agent) be declared to be null and void, or a proceeding shall be commenced by a Loan Party or its Subsidiaries, or by any Governmental Authority having jurisdiction over a Loan Party or its Subsidiaries, seeking to establish the invalidity or unenforceability thereof, or a Loan Party or its Subsidiaries shall deny in writing that such Loan Party or its Subsidiaries has any liability or obligation purported to be created under any Loan Document;

8.11. Change of Control. A Change of Control shall occur, whether directly or indirectly;

8.12. Anti-Money Laundering/International Trade Law Compliance. Any representation or warranty contained in Section 17.17 is or becomes false or misleading at any time;

8.13. Seizures. Any portion of the Collateral having a fair market value in excess of $1,000,000 shall be seized, subject to garnishment or taken by a Governmental Authority; or

9.	RIGHTS AND REMEDIES.

9.1. Rights and Remedies. Upon the occurrence and during the continuation of an Event of Default, Agent may, and, at the instruction of the Required Lenders, shall, in addition to any other rights or remedies provided for hereunder or under any other Loan Document or by applicable law, do any one or more of the following:

(a) by written notice to Borrowers, (i) declare the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents to be immediately due and payable, whereupon the same shall become and be immediately due and payable and Borrowers shall be obligated to repay all of such Obligations in

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full, without presentment, demand, protest, or further notice or other requirements of any kind, all of which are hereby expressly waived by each Borrower, (ii) direct Borrowers to provide (and Borrowers agree that upon receipt of such notice Borrowers will provide) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations for drawings that may subsequently occur under issued and outstanding Letters of Credit, and (iii) direct Borrowers to provide (and Borrowers agree that upon receipt of such notice Borrowers will provide) Bank Product Collateralization to Agent to be held as security for Borrowers’ or their Subsidiaries’ obligations in respect of outstanding Bank Products;

(b) by written notice to Borrowers, declare the Commitments terminated, whereupon the Commitments shall immediately be terminated together with (i) any obligation of any Revolving Lender to make Revolving Loans, (ii) the obligation of the Swing Lender to make Swing Loans, and (iii) the obligation of Issuing Bank to issue Letters of Credit; and

(c) exercise all other rights and remedies available to Agent or the Lenders under the Loan Documents, under applicable law, or in equity.

The foregoing to the contrary notwithstanding, upon the occurrence of any Event of Default described in Section 8.4 or Section 8.5, in addition to the remedies set forth above, without any notice to Borrowers or any other Person or any act by the Lender Group, the Commitments shall automatically terminate and the Obligations (other than the Bank Product Obligations), inclusive of the principal of, and any and all accrued and unpaid interest and fees in respect of, the Loans and all other Obligations (other than the Bank Product Obligations), whether evidenced by this Agreement or by any of the other Loan Documents, shall automatically become and be immediately due and payable and Borrowers shall automatically be obligated to repay all of such Obligations in full (including Borrowers being obligated to provide (and Borrowers agree that they will provide) (1) Letter of Credit Collateralization to Agent to be held as security for Borrowers’ reimbursement obligations in respect of drawings that may subsequently occur under issued and outstanding Letters of Credit and (2) Bank Product Collateralization to be held as security for Borrowers’ or their Subsidiaries’ obligations in respect of outstanding Bank Products), without presentment, demand, protest, or notice or other requirements of any kind, all of which are expressly waived by Borrowers.

9.2. Remedies Cumulative. The rights and remedies of the Lender Group under this Agreement, the other Loan Documents, and all other agreements shall be cumulative. The Lender Group shall have all other rights and remedies not inconsistent herewith as provided under the Code, by law, or in equity. No exercise by the Lender Group of one right or remedy shall be deemed an election, and no waiver by the Lender Group of any Default or Event of Default shall be deemed a continuing waiver. No delay by the Lender Group shall constitute a waiver, election, or acquiescence by it.

10.	WAIVERS; INDEMNIFICATION.

10.1. Demand; Protest; etc. Each Borrower waives demand, protest, notice of protest, notice of default or dishonor, notice of payment and nonpayment, nonpayment at maturity, release, compromise, settlement, extension, or renewal of documents, instruments, chattel paper, and guarantees at any time held by the Lender Group on which any Borrower may in any way be liable.

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10.2. The Lender Group’s Liability for Collateral. Each Borrower hereby agrees that: (a) so long as Agent complies with its obligations, if any, under the Code, the Lender Group shall not in any way or manner be liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto occurring or arising in any manner or fashion from any cause, (iii) any diminution in the value thereof, or (iv) any act or default of any carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of loss, damage, or destruction of the Collateral shall be borne by the Loan Parties.

10.3. Indemnification. Each Borrower shall pay, indemnify, defend, and hold the Agent-Related Persons, the Lender-Related Persons and the Issuing Bank (each, an “Indemnified Person”) harmless (to the fullest extent permitted by law) from and against any and all claims, demands, suits, actions, investigations, proceedings, liabilities, fines, costs, penalties, and damages, and all reasonable and documented fees and disbursements of attorneys (provided, that Borrowers shall not be liable for the fees and expenses of more than one counsel to the Agent and the Lenders (in addition to any reasonably necessary local counsel in each applicable local jurisdiction and any reasonably necessary “conflicts counsel”), experts, or consultants and all other reasonable and documented costs and expenses actually incurred in connection therewith or in connection with the enforcement of this indemnification (as and when they are incurred and irrespective of whether suit is brought), at any time asserted against, imposed upon, or incurred by any of them (a) in connection with or as a result of or related to the execution and delivery (provided, that Borrowers shall not be liable for costs and expenses (including attorneys’ fees) of any Lender (other than Agent) incurred in advising, structuring, drafting, reviewing, administering or syndicating the Loan Documents), enforcement, performance, or administration (including any restructuring or workout with respect hereto) of this Agreement, any of the other Loan Documents, or the transactions contemplated hereby or thereby or the monitoring of Borrowers’ and their Subsidiaries’ compliance with the terms of the Loan Documents (provided, that the indemnification in this clause (a) shall not extend to (i) disputes solely between or among the Lenders that do not involve any acts or omissions of any Loan Party, or (ii) disputes solely between or among the Lenders and their respective Affiliates that do not involve any acts or omissions of any Loan Party; it being understood and agreed that the indemnification in this clause (a) shall extend to Agent (but not the Lenders unless the dispute involves an act or omission of a Loan Party) relative to disputes between or among Agent on the one hand, and one or more Lenders, or one or more of their Affiliates, on the other hand, or (iii) any claims for Taxes, which shall be governed by Section 16, other than Taxes which relate to primarily non-Tax claims), (b) with respect to any actual or prospective investigation, litigation, or proceeding related to this Agreement, any other Loan Document, the making of any Loans or issuance of any Letters of Credit hereunder, or the use of the proceeds of the Loans or the Letters of Credit provided hereunder (irrespective of whether any Indemnified Person is a party thereto), or any act, omission, event, or circumstance in any manner related thereto, (c) with respect to any threatened or actual imposition of fines or penalties, or disgorgement of benefits, for violation of any Anti-Terrorism Law by any Borrower, any Affiliate or Subsidiary of any Borrowers, or any Guarantor, and (d) in connection with or arising out of any presence or release of Hazardous Materials at, on, under, to

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or from any assets or properties owned, leased or operated by any Loan Party or any of its Subsidiaries or any Environmental Actions, Environmental Liabilities or Remedial Actions related in any way to any such assets or properties of any Loan Party or any of its Subsidiaries (each and all of the foregoing, the “Indemnified Liabilities”). The foregoing to the contrary notwithstanding, no Borrower shall have any obligation to any Indemnified Person under this Section 10.3 with respect to any Indemnified Liability that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Indemnified Person. This provision shall survive the termination of this Agreement and the repayment in full of the Obligations. If any Indemnified Person makes any payment to any other Indemnified Person with respect to an Indemnified Liability as to which Borrowers were required to indemnify the Indemnified Person receiving such payment, the Indemnified Person making such payment is entitled to be indemnified and reimbursed by Borrowers with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.

11.	NOTICES.

Unless otherwise provided in this Agreement, all notices or demands relating to this Agreement or any other Loan Document shall be in writing and (except for financial statements and other informational documents which may be sent by first-class mail, postage prepaid) shall be personally delivered or sent by registered or certified mail (postage prepaid, return receipt requested), overnight courier, electronic mail (at such email addresses as a party may designate in accordance herewith), or telefacsimile. In the case of notices or demands to any Loan Party or Agent, as the case may be, they shall be sent to the respective address set forth below:


If to any Loan Party:		C/O PIONEER ENERGY SERVICES CORP. 1250 NE Loop 410, Suite 1000 San Antonio, Texas 78209 Attn: Chief Financial Officer (Lorne Phillips) Telephone: (210) 828 7689 Facsimile: (210) 828 8228 Email: LPhillips@pioneeres.com

with copies to:		PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP 1285 Avenue of the Americas New York, NY 10019-6064 Attn: Catherine Goodall, Esq. Telephone: (212) 373-3919 Facsimile: (212) 492-0919 Email: cgoodall@paulweiss.com

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If to Agent:		PNC BANK, NATIONAL ASSOCIATION 2100 Ross Avenue, Suite 1850 Dallas, TX 75201 Attn: Relationship Manager – Pioneer Telephone: (214) 871-1253 Facsimile: (214) 871-2015 Email: anita.puligandla@pnc.com

with copies to:		BLANK ROME LLP Blank Rome LLP One Logan Square Philadelphia, PA 19103 Attn: Heather Sonnenberg, Esq. Telephone: (215) 832-5701 Facsimile: (215) 832-5701 Email: sonnenberg@blankrome.com

Any party hereto may change the address at which they are to receive notices hereunder, by notice in writing in the foregoing manner given to the other party. All notices or demands sent in accordance with this Section 11, shall be deemed received on the earlier of the date of actual receipt or three Business Days after the deposit thereof in the mail; provided, that (a) notices sent by overnight courier service shall be deemed to have been given when received, (b) notices by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient) and (c) notices by electronic mail shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return email or other written acknowledgment).

12.	CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER; JUDICIAL REFERENCE PROVISION.

(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF AND THEREOF, THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

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(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(b).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “CLAIM”). EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(d) EACH BORROWER HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(e) [INTENTIONALLY OMITTED].

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(f) NO CLAIM MAY BE MADE BY ANY LOAN PARTY AGAINST AGENT, THE SWING LENDER, ANY OTHER LENDER, ISSUING BANK, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, AGENT, OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, PUNITIVE OR EXEMPLARY DAMAGES OR LOSSES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION THEREWITH, AND EACH LOAN PARTY HEREBY WAIVES, RELEASES, AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

13.	ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.

13.1. Assignments and Participations.

(a) (i) Subject to the conditions set forth in clause (a)(ii) below, any Lender may assign and delegate all or any portion of its rights and duties under the Loan Documents (including the Obligations owed to it and its Commitments) to one or more assignees so long as such prospective assignee is an Eligible Transferee (each, an “Assignee”), with the prior written consent (such consent not be unreasonably withheld or delayed) of:

(A) Borrowers; provided, that no consent of Borrowers shall be required (1) if a Default or Event of Default has occurred and is continuing, or (2) in connection with an assignment to a Person that is a Lender or an Affiliate (other than natural persons) of a Lender; provided further, that Borrowers shall be deemed to have consented to a proposed assignment unless they object thereto by written notice to Agent within ten Business Days after having received notice thereof; and

(B) Agent, Swing Lender, and Issuing Bank.

(ii)	Assignments shall be subject to the following additional conditions:

(A) no assignment may be made (i) so long as no Default or Event of Default has occurred and is continuing, to a Disqualified Institution, or (ii) to a natural person,

(B) no assignment may be made to a Loan Party or an Affiliate of a Loan Party,

(C) the amount of the Commitments and the other rights and obligations of the assigning Lender hereunder and under the other Loan Documents subject to each such assignment (determined as of the date the Assignment and Acceptance with respect to such assignment is delivered to Agent) shall be in a minimum amount (unless waived by Agent) of $5,000,000 (except such minimum amount shall not apply to (I) an assignment or delegation by

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any Lender to any other Lender, an Affiliate of any Lender, or a Related Fund of such Lender, or (II) a group of new Lenders, each of which is an Affiliate of each other or a Related Fund of such new Lender to the extent that the aggregate amount to be assigned to all such new Lenders is at least $5,000,000),

(D) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement,

(E) the parties to each assignment shall execute and deliver to Agent an Assignment and Acceptance; provided, that Borrowers and Agent may continue to deal solely and directly with the assigning Lender in connection with the interest so assigned to an Assignee until written notice of such assignment, together with payment instructions, addresses, and related information with respect to the Assignee, have been given to Borrowers and Agent by such Lender and the Assignee,

(F) unless waived by Agent, the assigning Lender or Assignee has paid to Agent, for Agent’s separate account, a processing fee in the amount of $3,500, and

(G) the assignee, if it is not a Lender, shall deliver to Agent an Administrative Questionnaire in a form approved by Agent (the “Administrative Questionnaire”).

(b) From and after the date that Agent receives the executed Assignment and Acceptance and, if applicable, payment of the required processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such Assignment and Acceptance, shall be a “Lender” and shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assigning Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights (except with respect to Section 10.3) and be released from any future obligations under this Agreement (and in the case of an Assignment and Acceptance covering all or the remaining portion of an assigning Lender’s rights and obligations under this Agreement and the other Loan Documents, such Lender shall cease to be a party hereto and thereto); provided, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of this Agreement, including such assigning Lender’s obligations under Section 15 and Section 17.9(a).

(c) By executing and delivering an Assignment and Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm to and agree with each other and the other parties hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Agreement or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Agreement or any other Loan Document furnished pursuant hereto, (ii) such assigning Lender makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Loan Party or the performance or observance by any Loan Party of any of its obligations under this Agreement or any other Loan Document furnished pursuant hereto, (iii) such

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Assignee confirms that it has received a copy of this Agreement, together with such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such Assignment and Acceptance, (iv) such Assignee will, independently and without reliance upon Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Agreement, (v) such Assignee appoints and authorizes Agent to take such actions and to exercise such powers under this Agreement and the other Loan Documents as are delegated to Agent, by the terms hereof and thereof, together with such powers as are reasonably incidental thereto, and (vi) such Assignee agrees that it will perform all of the obligations which by the terms of this Agreement are required to be performed by it as a Lender.

(d) Immediately upon Agent’s receipt of the required processing fee, if applicable, and delivery of notice to the assigning Lender pursuant to Section 13.1(b), this Agreement shall be deemed to be amended to the extent, but only to the extent, necessary to reflect the addition of the Assignee and the resulting adjustment of the Commitments arising therefrom. The Commitment allocated to each Assignee shall reduce such Commitments of the assigning Lender pro tanto.

(e) Any Lender may at any time sell to one or more commercial banks, financial institutions, or other Persons (a “Participant”) participating interests in all or any portion of its Obligations, its Commitment, and the other rights and interests of that Lender (the “Originating Lender”) hereunder and under the other Loan Documents; provided, that (i) the Originating Lender shall remain a “Lender” for all purposes of this Agreement and the other Loan Documents and the Participant receiving the participating interest in the Obligations, the Commitments, and the other rights and interests of the Originating Lender hereunder shall not constitute a “Lender” hereunder or under the other Loan Documents and the Originating Lender’s obligations under this Agreement shall remain unchanged, (ii) the Originating Lender shall remain solely responsible for the performance of such obligations, (iii) Borrowers, Agent, and the Lenders shall continue to deal solely and directly with the Originating Lender in connection with the Originating Lender’s rights and obligations under this Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant any participating interest under which the Participant has the right to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment to, or consent or waiver with respect to this Agreement or of any other Loan Document would (A) extend the final maturity date of the Obligations hereunder in which such Participant is participating, (B) reduce the interest rate applicable to the Obligations hereunder in which such Participant is participating, (C) release all or substantially all of the Collateral or guaranties (except to the extent expressly provided herein or in any of the Loan Documents) supporting the Obligations hereunder in which such Participant is participating, (D) postpone the payment of, or reduce the amount of, the interest or fees payable to such Participant through such Lender (other than a waiver of default interest), or (E) decreases the amount or postpones the due dates of scheduled principal repayments or prepayments or premiums payable to such Participant through such Lender, (v) no participation shall be sold to a natural person, (vi) no participation shall be sold to a Loan Party or an Affiliate of a Loan Party or, so long as no Default or Event of Default has occurred and is continuing, to a Disqualified

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Institution, and (vii) all amounts payable by Borrowers hereunder shall be determined as if such Lender had not sold such participation, except that, if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of set off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement; provided, however, a Participant shall be entitled to the benefits of Section 16 as if it were the Originating Lender if the Loan Parties are notified of the participation and the Participant complies with Section 16.2, provided, further, that such Participant shall not be entitled to receive any greater payment under Section 16, with respect to any participation, than its participating Lender would have been entitled to receive thereunder, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquires the applicable participation. The rights of any Participant only shall be derivative through the Originating Lender with whom such Participant participates and no Participant shall have any rights under this Agreement or the other Loan Documents or any direct rights as to the other Lenders, Agent, Borrowers, the Collateral, or otherwise in respect of the Obligations. No Participant shall have the right to participate directly in the making of decisions by the Lenders among themselves.

(f) In connection with any such assignment or participation or proposed assignment or participation or any grant of a security interest in, or pledge of, its rights under and interest in this Agreement, a Lender may, subject to the provisions of Section 17.9, disclose all documents and information which it now or hereafter may have relating to any Loan Party and its Subsidiaries and their respective businesses.

(g) Any other provision in this Agreement notwithstanding, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement to secure obligations of such Lender, including any pledge in favor of any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank or U.S. Treasury Regulation 31 CFR §203.24, and such Federal Reserve Bank may enforce such pledge or security interest in any manner permitted under applicable law; provided, that no such pledge shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(h) Agent (as a non-fiduciary agent on behalf of Borrowers) shall maintain, or cause to be maintained, a register (the “Register”) on which it enters the name and address of each Lender as the registered owner of the Revolving Loans (and the principal amount thereof and stated interest thereon) held by such Lender (each, a “Registered Loan”). Other than in connection with an assignment by a Lender of all or any portion of its portion of the Revolving Loans to an Affiliate of such Lender or a Related Fund of such Lender (i) a Registered Loan (and the registered note, if any, evidencing the same) may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register (and each registered note shall expressly so provide) and (ii) any assignment or sale of all or part of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by registration of such assignment or sale on the Register, together with the surrender of the registered note, if any, evidencing the same duly

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endorsed by (or accompanied by a written instrument of assignment or sale duly executed by) the holder of such registered note, whereupon, at the request of the designated assignee(s) or transferee(s), one or more new registered notes in the same aggregate principal amount shall be issued to the designated assignee(s) or transferee(s). Prior to the registration of assignment or sale of any Registered Loan (and the registered note, if any evidencing the same), Borrowers shall treat the Person in whose name such Registered Loan (and the registered note, if any, evidencing the same) is registered as the owner thereof for the purpose of receiving all payments thereon and for all other purposes, notwithstanding notice to the contrary. In the case of any assignment by a Lender of all or any portion of its Revolving Loans to an Affiliate of such Lender or a Related Fund of such Lender, and which assignment is not recorded in the Register, the assigning Lender, on behalf of Borrowers, shall maintain a register comparable to the Register.

(i) In the event that a Lender sells participations in the Registered Loan, such Lender, as a non-fiduciary agent on behalf of Borrowers, shall maintain (or cause to be maintained) a register on which it enters the name of all participants in the Registered Loans held by it (and the principal amount (and stated interest thereon) of the portion of such Registered Loans that is subject to such participations) (the “Participant Register”). A Registered Loan (and the registered note, if any, evidencing the same) may be participated in whole or in part only by registration of such participation on the Participant Register (and each registered note shall expressly so provide). Any participation of such Registered Loan (and the registered note, if any, evidencing the same) may be effected only by the registration of such participation on the Participant Register. No Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Agent (in its capacity as Agent) shall have no responsibility for maintaining a Participant Register.

(j) Agent shall make a copy of the Register (and each Lender shall make a copy of its Participant Register to the extent it has one) available for review by Borrowers from time to time as Borrowers may reasonably request.

13.2. Successors. This Agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties; provided, that no Borrower may assign this Agreement or any rights or duties hereunder without the Lenders’ prior written consent and any prohibited assignment shall be absolutely void ab initio. No consent to assignment by the Lenders shall release any Borrower from its Obligations. A Lender may assign this Agreement and the other Loan Documents and its rights and duties hereunder and thereunder pursuant to Section 13.1 and, except as expressly required pursuant to Section 13.1, no consent or approval by any Borrower is required in connection with any such assignment.

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14.	AMENDMENTS; WAIVERS.

14.1. Amendments and Waivers.

(a) No amendment, waiver or other modification of any provision of this Agreement or any other Loan Document (other than the Fee Letter), and no consent with respect to any departure by any Borrower therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by Agent at the written request of the Required Lenders) and the Loan Parties that are party thereto and then any such waiver or consent shall be effective, but only in the specific instance and for the specific purpose for which given; provided, that no such waiver, amendment, or consent shall, unless in writing and signed by all of the Lenders directly affected thereby and all of the Loan Parties that are party thereto, do any of the following:

(i) increase the amount of or extend the expiration date of any Commitment of any Lender or amend, modify, or eliminate the last sentence of Section 2.4(c)(i),

(ii) postpone or delay any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees, or other amounts due hereunder or under any other Loan Document,

(iii) reduce the principal of, or the rate of interest on, any loan or other extension of credit hereunder, or reduce any fees or other amounts payable hereunder or under any other Loan Document (except in connection with the waiver of applicability of Section 2.6(c) (which waiver shall be effective with the written consent of the Required Lenders),

(iv) amend, modify, or eliminate this Section or any provision of this Agreement providing for consent or other action by all Lenders,

(v) amend, modify, or eliminate Section 3.1,

(vi) amend, modify, or eliminate Section 15.11,

(vii) other than as permitted by Section 15.11, release or contractually subordinated Agent’s Lien in and to any of the Collateral,

(viii) amend, modify, or eliminate the definitions of “Required Lenders”, Supermajority Lenders or “Pro Rata Share”,

(ix) other than in connection with a merger, liquidation, dissolution or sale of such Person expressly permitted by the terms hereof or the other Loan Documents, release any Borrower or any Guarantor from any obligation for the payment of money or consent to the assignment or transfer by any Borrower or any Guarantor of any of its rights or duties under this Agreement or the other Loan Documents,

(x) amend, modify, or eliminate any of the provisions of Section 2.4(b)(i), (ii) or (iii), or

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(xi) amend, modify, or eliminate any of the provisions of Section 13.1 with respect to assignments to, or participations with, Persons who are Loan Parties or Affiliates of a Loan Party;

(b) No amendment, waiver, modification, or consent shall amend, modify, waive, or eliminate,

(i) the definition of, or any of the terms or provisions of, the Fee Letter, without the written consent of Agent and Borrowers (and shall not require the written consent of any of the Lenders),

(ii) any provision of Section 15 pertaining to Agent, or any other rights or duties of Agent under this Agreement or the other Loan Documents, without the written consent of Agent, Borrowers, and the Required Lenders;

(c) No amendment, waiver, modification, elimination, or consent shall amend, without written consent of Agent, Borrowers and the Supermajority Lenders, modify, or eliminate the definition of Borrowing Base or any of the defined terms (including the definitions of Eligible Accounts, Eligible Billed Accounts, Eligible Unbilled Accounts and Eligible Inventory) that are used in such definition to the extent that any such change results in more credit being made available to Borrowers based upon the Borrowing Base, but not otherwise, or the definition of Maximum Revolver Amount;

(d) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Issuing Bank, or any other rights or duties of Issuing Bank under this Agreement or the other Loan Documents, without the written consent of Issuing Bank, Agent, Borrowers, and the Required Lenders;

(e) No amendment, waiver, modification, elimination, or consent shall amend, modify, or waive any provision of this Agreement or the other Loan Documents pertaining to Swing Lender, or any other rights or duties of Swing Lender under this Agreement or the other Loan Documents, without the written consent of Swing Lender, Agent, Borrowers, and the Required Lenders; and

(f) Anything in this Section 14.1 to the contrary notwithstanding, (i) any amendment, modification, elimination, waiver, consent, termination, or release of, or with respect to, any provision of this Agreement or any other Loan Document that relates only to the relationship of the Lender Group among themselves, and that does not affect the rights or obligations of any Loan Party, shall not require consent by or the agreement of any Loan Party, and (ii) any amendment, waiver, modification, elimination, or consent of or with respect to any provision of this Agreement or any other Loan Document may be entered into without the consent of, or over the objection of, any Defaulting Lender other than any of the matters governed by Section 14.1(a)(i) through (iii) that affect such Lender.

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14.2. Replacement of Certain Lenders.

(a) If (i) any action to be taken by the Lender Group or Agent hereunder requires the consent, authorization, or agreement of all Lenders or all Lenders affected thereby and if such action has received the consent, authorization, or agreement of the Required Lenders but not of all Lenders or all Lenders affected thereby, or (ii) any Lender makes a claim for compensation under Section 16, then Borrowers or Agent, upon at least five Business Days prior irrevocable notice, may permanently replace any Lender that failed to give its consent, authorization, or agreement (a “Non-Consenting Lender”) or any Lender that made a claim for compensation (a “Tax Lender”) with one or more Replacement Lenders, and the Non-Consenting Lender or Tax Lender, as applicable, shall have no right to refuse to be replaced hereunder. Such notice to replace the Non-Consenting Lender or Tax Lender, as applicable, shall specify an effective date for such replacement, which date shall not be later than 15 Business Days after the date such notice is given.

(b) Prior to the effective date of such replacement, the Non-Consenting Lender or Tax Lender, as applicable, and each Replacement Lender shall execute and deliver an Assignment and Acceptance, subject only to the Non-Consenting Lender or Tax Lender, as applicable, being repaid in full its share of the outstanding Obligations (without any premium or penalty of any kind whatsoever, but including (i) all interest, fees and other amounts that may be due in payable in respect thereof, (ii) an assumption of its Pro Rata Share of participations in the Letters of Credit, and (iii) Funding Losses). If the Non-Consenting Lender or Tax Lender, as applicable, shall refuse or fail to execute and deliver any such Assignment and Acceptance prior to the effective date of such replacement, Agent may, but shall not be required to, execute and deliver such Assignment and Acceptance in the name or and on behalf of the Non-Consenting Lender or Tax Lender, as applicable, and irrespective of whether Agent executes and delivers such Assignment and Acceptance, the Non-Consenting Lender or Tax Lender, as applicable, shall be deemed to have executed and delivered such Assignment and Acceptance. The replacement of any Non-Consenting Lender or Tax Lender, as applicable, shall be made in accordance with the terms of Section 13.1. Until such time as one or more Replacement Lenders shall have acquired all of the Obligations, the Commitments, and the other rights and obligations of the Non-Consenting Lender or Tax Lender, as applicable, hereunder and under the other Loan Documents, the Non-Consenting Lender or Tax Lender, as applicable, shall remain obligated to make the Non-Consenting Lender’s or Tax Lender’s, as applicable, Pro Rata Share of Revolving Loans and to purchase a participation in each Letter of Credit, in an amount equal to its Pro Rata Share of participations in such Letters of Credit.

14.3. No Waivers; Cumulative Remedies. No failure by Agent or any Lender to exercise any right, remedy, or option under this Agreement or any other Loan Document, or delay by Agent or any Lender in exercising the same, will operate as a waiver thereof. No waiver by Agent or any Lender will be effective unless it is in writing, and then only to the extent specifically stated. No waiver by Agent or any Lender on any occasion shall affect or diminish Agent’s and each Lender’s rights thereafter to require strict performance by Borrowers of any provision of this Agreement. Agent’s and each Lender’s rights under this Agreement and the other Loan Documents will be cumulative and not exclusive of any other right or remedy that Agent or any Lender may have.

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15.	AGENT; THE LENDER GROUP.

15.1. Appointment and Authorization of Agent. Each Lender hereby designates and appoints PNC as its agent under this Agreement and the other Loan Documents and each Lender hereby irrevocably authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to designate, appoint, and authorize) Agent to execute and deliver each of the other Loan Documents on its behalf and to take such other action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to Agent by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Agent agrees to act as agent for and on behalf of the Lenders (and the Bank Product Providers) on the conditions contained in this Section 15. Any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Loan Documents, nor shall Agent have or be deemed to have any fiduciary relationship with any Lender (or Bank Product Provider), and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against Agent. Without limiting the generality of the foregoing, the use of the term “agent” in this Agreement or the other Loan Documents with reference to Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only a representative relationship between independent contracting parties. Each Lender hereby further authorizes (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to act as the secured party under each of the Loan Documents that create a Lien on any item of Collateral. Except as expressly otherwise provided in this Agreement, Agent shall have and may use its sole discretion with respect to exercising or refraining from exercising any discretionary rights or taking or refraining from taking any actions that Agent expressly is entitled to take or assert under or pursuant to this Agreement and the other Loan Documents. Without limiting the generality of the foregoing, or of any other provision of the Loan Documents that provides rights or powers to Agent, Lenders agree that Agent shall have the right to exercise the following powers as long as this Agreement remains in effect: (a) maintain, in accordance with its customary business practices, ledgers and records reflecting the status of the Obligations, the Collateral, payments and proceeds of Collateral, and related matters, (b) execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to the Loan Documents, or to take any other action with respect to any Collateral or Loan Documents which may be necessary to perfect, and maintain perfected, the security interests and Liens upon Collateral pursuant to the Loan Documents, (c) make Revolving Loans, for itself or on behalf of Lenders, as provided in the Loan Documents, (d) exclusively receive, apply, and distribute payments and proceeds of the Collateral as provided in the Loan Documents, (e) open and maintain such bank accounts and cash management arrangements as Agent deems necessary and appropriate in accordance with the Loan Documents for the foregoing purposes, (f) perform, exercise, and

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enforce any and all other rights and remedies of the Lender Group with respect to any Loan Party or its Subsidiaries, the Obligations, the Collateral, or otherwise related to any of same as provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to the Loan Documents.

15.2. Delegation of Duties. Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys in fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. Agent shall not be responsible for the negligence or misconduct of any agent or attorney in fact that it selects as long as such selection was made without gross negligence or willful misconduct.

15.3. Liability of Agent. None of the Agent-Related Persons shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (b) be responsible in any manner to any of the Lenders (or Bank Product Providers) for any recital, statement, representation or warranty made by any Loan Party or any of its Subsidiaries or Affiliates, or any officer or director thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Loan Party or its Subsidiaries or any other party to any Loan Document to perform its obligations hereunder or thereunder. No Agent-Related Person shall be under any obligation to any Lenders (or Bank Product Providers) to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the books and records or properties of any Loan Party or its Subsidiaries. No Agent-Related Person shall have any liability to any Lender, and Loan Party or any of their respective Affiliates if any request for a Loan, Letter of Credit or other extension of credit was not authorized by the applicable Borrower. Agent shall not be required to take any action that, in its opinion or in the opinion of its counsel, may expose it to liability or that is contrary to any Loan Document or applicable law or regulation.

15.4. Reliance by Agent. Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, telefacsimile or other electronic method of transmission, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent, or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrowers or counsel to any Lender), independent accountants and other experts selected by Agent. Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless Agent shall first receive such advice or concurrence of the Lenders as it deems appropriate and until such instructions are received, Agent shall act, or refrain from acting, as it deems advisable. If Agent so requests, it shall first be indemnified to its reasonable satisfaction by the Lenders (and, if it so elects, the Bank Product Providers) against any and all liability and expense that may be incurred by it by reason of taking

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or continuing to take any such action. Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders (and Bank Product Providers).

15.5. Notice of Default or Event of Default. Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment of principal, interest, fees, and expenses required to be paid to Agent for the account of the Lenders and, except with respect to Events of Default of which Agent has actual knowledge, unless Agent shall have received written notice from a Lender or Borrowers referring to this Agreement, describing such Default or Event of Default, and stating that such notice is a “notice of default.” Agent promptly will notify the Lenders of its receipt of any such notice or of any Event of Default of which Agent has actual knowledge. If any Lender obtains actual knowledge of any Event of Default, such Lender promptly shall notify the other Lenders and Agent of such Event of Default. Each Lender shall be solely responsible for giving any notices to its Participants, if any. Subject to Section 15.4, Agent shall take such action with respect to such Default or Event of Default as may be requested by the Required Lenders in accordance with Section 9; provided, that unless and until Agent has received any such request, Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable.

15.6. Credit Decision. Each Lender (and Bank Product Provider) acknowledges that none of the Agent-Related Persons has made any representation or warranty to it, and that no act by Agent hereinafter taken, including any review of the affairs of any Loan Party and its Subsidiaries or Affiliates, shall be deemed to constitute any representation or warranty by any Agent-Related Person to any Lender (or Bank Product Provider). Each Lender represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) to Agent that it has, independently and without reliance upon any Agent-Related Person and based on such due diligence, documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of each Borrower or any other Person party to a Loan Document, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrowers. Each Lender also represents (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to represent) that it will, independently and without reliance upon any Agent-Related Person and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of each Borrower or any other Person party to a Loan Document. Except for notices, reports, and other documents expressly herein required to be furnished to the Lenders by Agent, Agent shall not have any duty or responsibility to provide any Lender (or Bank Product Provider) with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of any Borrower or any other Person party to a Loan Document that may come into the possession of

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any of the Agent-Related Persons. Each Lender acknowledges (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that Agent does not have any duty or responsibility, either initially or on a continuing basis (except to the extent, if any, that is expressly specified herein) to provide such Lender (or Bank Product Provider) with any credit or other information with respect to any Borrower, its Affiliates or any of their respective business, legal, financial or other affairs, and irrespective of whether such information came into Agent’s or its Affiliates’ or representatives’ possession before or after the date on which such Lender became a party to this Agreement (or such Bank Product Provider entered into a Bank Product Agreement).

15.7. Costs and Expenses; Indemnification. Agent may incur and pay Lender Group Expenses to the extent Agent reasonably deems necessary or appropriate for the performance and fulfillment of its functions, powers, and obligations pursuant to the Loan Documents, including court costs, attorneys’ fees and expenses, fees and expenses of financial accountants, advisors, consultants, and appraisers, costs of collection by outside collection agencies, auctioneer fees and expenses, and costs of security guards or insurance premiums paid to maintain the Collateral, whether or not Borrowers are obligated to reimburse Agent or Lenders for such expenses pursuant to this Agreement or otherwise. Agent is authorized and directed to deduct and retain sufficient amounts from payments or proceeds of the Collateral received by Agent to reimburse Agent for such out-of-pocket costs and expenses prior to the distribution of any amounts to Lenders (or Bank Product Providers). In the event Agent is not reimbursed for such costs and expenses by the Loan Parties and their Subsidiaries, each Lender hereby agrees that it is and shall be obligated to pay to Agent such Lender’s ratable share thereof. Whether or not the transactions contemplated hereby are consummated, each of the Lenders, on a ratable basis, shall indemnify and defend the Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers and without limiting the obligation of Borrowers to do so) from and against any and all Indemnified Liabilities; provided, that no Lender shall be liable for the payment to any Agent-Related Person of any portion of such Indemnified Liabilities resulting solely from such Person’s gross negligence or willful misconduct nor shall any Lender be liable for the obligations of any Defaulting Lender in failing to make a Revolving Loan or other extension of credit hereunder. Without limitation of the foregoing, each Lender shall reimburse Agent upon demand for such Lender’s ratable share of any costs or out of pocket expenses (including attorneys, accountants, advisors, and consultants fees and expenses) incurred by Agent in connection with the preparation, execution, delivery, administration, modification, amendment, or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement or any other Loan Document to the extent that Agent is not reimbursed for such expenses by or on behalf of Borrowers. The undertaking in this Section shall survive the payment of all Obligations hereunder and the resignation or replacement of Agent.

15.8. Agent in Individual Capacity. PNC and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in, and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with any Loan Party and its Subsidiaries and Affiliates and any other Person party to any Loan Document as though PNC were not Agent hereunder, and, in each case, without notice to or consent of the other members of the Lender Group. The other members of the Lender

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Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, PNC or its Affiliates may receive information regarding a Loan Party or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of such Loan Party or such other Person and that prohibit the disclosure of such information to the Lenders (or Bank Product Providers), and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver Agent will use its reasonable best efforts to obtain), Agent shall not be under any obligation to provide such information to them. The terms “Lender” and “Lenders” include PNC in its individual capacity.

15.9. Successor Agent. Agent may resign as Agent upon 30 days (ten days if an Event of Default has occurred and is continuing) prior written notice to the Lenders (unless such notice is waived by the Required Lenders) and Borrowers (unless such notice is waived by Borrowers or a Default or Event of Default has occurred and is continuing) and without any notice to the Bank Product Providers. If Agent resigns under this Agreement, the Required Lenders shall be entitled, with (so long as no Event of Default has occurred and is continuing) the consent of Borrowers (such consent not to be unreasonably withheld, delayed, or conditioned), appoint a successor Agent for the Lenders (and the Bank Product Providers). If, at the time that Agent’s resignation is effective, it is acting as Issuing Bank or the Swing Lender, such resignation shall also operate to effectuate its resignation as Issuing Bank or the Swing Lender, as applicable, and it shall automatically be relieved of any further obligation to issue Letters of Credit, or to make Swing Loans. If no successor Agent is appointed prior to the effective date of the resignation of Agent, Agent may appoint, after consulting with the Lenders and Borrowers, a successor Agent. If Agent has materially breached or failed to perform any material provision of this Agreement or of applicable law, the Required Lenders may agree in writing to remove and replace Agent with a successor Agent from among the Lenders with (so long as no Event of Default has occurred and is continuing) the consent of Borrowers (such consent not to be unreasonably withheld, delayed, or conditioned). In any such event, upon the acceptance of its appointment as successor Agent hereunder, such successor Agent shall succeed to all the rights, powers, and duties of the retiring Agent and the term “Agent” shall mean such successor Agent and the retiring Agent’s appointment, powers, and duties as Agent shall be terminated. After any retiring Agent’s resignation hereunder as Agent, the provisions of this Section 15 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Agent under this Agreement. If no successor Agent has accepted appointment as Agent by the date which is 30 days following a retiring Agent’s notice of resignation, the retiring Agent’s resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of Agent hereunder until such time, if any, as the Lenders appoint a successor Agent as provided for above.

15.10. Lender in Individual Capacity. Any Lender and its respective Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, provide Bank Products to, acquire Equity Interests in and generally engage in any kind of banking, trust, financial advisory, underwriting, or other business with any Loan Party and its Subsidiaries and Affiliates and any other Person party to any Loan Documents as though such Lender were not a Lender hereunder without notice to or consent of the other members of the Lender Group (or the Bank

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Product Providers). The other members of the Lender Group acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, pursuant to such activities, such Lender and its respective Affiliates may receive information regarding a Loan Party or its Affiliates or any other Person party to any Loan Documents that is subject to confidentiality obligations in favor of such Loan Party or such other Person and that prohibit the disclosure of such information to the Lenders, and the Lenders acknowledge (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to acknowledge) that, in such circumstances (and in the absence of a waiver of such confidentiality obligations, which waiver such Lender will use its reasonable best efforts to obtain), such Lender shall not be under any obligation to provide such information to them.

15.11. Collateral Matters.

(a) The Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent to release any Lien on any Collateral (i) upon the termination of the Commitments and payment and satisfaction in full by the Loan Parties and their Subsidiaries of all of the Obligations, (ii) constituting property being sold or disposed of if a release is required or desirable in connection therewith and if Borrowers certify to Agent that the sale or disposition is permitted hereunder (and Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting property in which no Loan Party or any of its Subsidiaries owned any interest at the time Agent’s Lien was granted nor at any time thereafter, (iv) constituting property leased or licensed to a Loan Party or its Subsidiaries under a lease or license that has expired or is terminated in a transaction permitted under this Agreement, or (v) in connection with a credit bid or purchase authorized under this Section 15.11. The Loan Parties and the Lenders hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to authorize) Agent, based upon the instruction of the Required Lenders, to (a) consent to the sale of, credit bid, or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale thereof conducted under the provisions of the Bankruptcy Code, including Section 363 of the Bankruptcy Code, (b) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any sale or other disposition thereof conducted under the provisions of the Code, including pursuant to Sections 9-610 or 9-620 of the Code, or (c) credit bid or purchase (either directly or indirectly through one or more entities) all or any portion of the Collateral at any other sale or foreclosure conducted or consented to by Agent in accordance with applicable law in any judicial action or proceeding or by the exercise of any legal or equitable remedy. In connection with any such credit bid or purchase, (i) the Obligations owed to the Lenders and the Bank Product Providers shall be entitled to be, and shall be, credit bid on a ratable basis (with Obligations with respect to contingent or unliquidated claims being estimated for such purpose if the fixing or liquidation thereof would not impair or unduly delay the ability of Agent to credit bid or purchase at such sale or other disposition of the Collateral and, if such contingent or unliquidated claims cannot be estimated without impairing or unduly delaying the ability of Agent to credit bid at such sale or other disposition, then such claims shall be disregarded, not credit bid, and not entitled to any interest in the Collateral that is the subject of such credit bid or purchase) and the Lenders and the Bank Product Providers whose Obligations are credit bid shall be entitled to receive interests (ratably based upon

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the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) in the Collateral that is the subject of such credit bid or purchase (or in the Equity Interests of the any entities that are used to consummate such credit bid or purchase), and (ii) Agent, based upon the instruction of the Required Lenders, may accept non-cash consideration, including debt and equity securities issued by any entities used to consummate such credit bid or purchase and in connection therewith Agent may reduce the Obligations owed to the Lenders and the Bank Product Providers (ratably based upon the proportion of their Obligations credit bid in relation to the aggregate amount of Obligations so credit bid) based upon the value of such non-cash consideration; provided, that Bank Product Obligations not entitled to the application set forth in Section 2.4(b)(iii)(J) shall not be entitled to be, and shall not be, credit bid, or used in the calculation of the ratable interest of the Lenders and Bank Product Providers in the Obligations which are credit bid. Except as provided above, Agent will not execute and deliver a release of any Lien on any Collateral without the prior written authorization of (y) if the release is of all or substantially all of the Collateral, all of the Lenders (without requiring the authorization of the Bank Product Providers), or (z) otherwise, the Required Lenders (without requiring the authorization of the Bank Product Providers). Upon request by Agent or Borrowers at any time, the Lenders will (and if so requested, the Bank Product Providers will) confirm in writing Agent’s authority to release any such Liens on particular types or items of Collateral pursuant to this Section 15.11; provided, that (1) anything to the contrary contained in any of the Loan Documents notwithstanding, Agent shall not be required to execute any document or take any action necessary to evidence such release on terms that, in Agent’s opinion, could expose Agent to liability or create any obligation or entail any consequence other than the release of such Lien without recourse, representation, or warranty, and (2) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly released) upon (or obligations of Borrowers in respect of) any and all interests retained by any Borrower, including, the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Each Lender further hereby irrevocably authorize (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to irrevocably authorize) Agent, at its option and in its sole discretion, to subordinate (by contract or otherwise) any Lien granted to or held by Agent on any property under any Loan Document (a) to the holder of any Permitted Lien on such property if such Permitted Lien secures purchase money Indebtedness (including Capitalized Lease Obligations) which constitute Permitted Indebtedness and (b) to the extent Agent has the authority under this Section 15.11 to release its Lien on such property.

(b) Agent shall have no obligation whatsoever to any of the Lenders (or the Bank Product Providers) (i) to verify or assure that the Collateral exists or is owned by a Loan Party or any of its Subsidiaries or is cared for, protected, or insured or has been encumbered, (ii) to verify or assure that Agent’s Liens have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, (iii) to verify or assure that any particular items of Collateral meet the eligibility criteria applicable in respect thereof, (iv) to impose, maintain, increase, reduce, implement, or eliminate any particular reserve hereunder or to determine whether the amount of any reserve is appropriate or not, or (v) to exercise at all or in any particular manner or under any duty of care, disclosure or fidelity, or to continue exercising, any of the rights, authorities and powers granted or available to Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission,

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or event related thereto, subject to the terms and conditions contained herein, Agent may act in any manner it may deem appropriate, in its sole discretion given Agent’s own interest in the Collateral in its capacity as one of the Lenders and that Agent shall have no other duty or liability whatsoever to any Lender (or Bank Product Provider) as to any of the foregoing, except as otherwise expressly provided herein.

15.12. Restrictions on Actions by Lenders; Sharing of Payments.

(a) Each of the Lenders agrees that it shall not, without the express written consent of Agent, and that it shall, to the extent it is lawfully entitled to do so, upon the written request of Agent, set off against the Obligations, any amounts owing by such Lender to any Loan Party or its Subsidiaries or any deposit accounts of any Loan Party or its Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders further agrees that it shall not, unless specifically requested to do so in writing by Agent, take or cause to be taken any action, including, the commencement of any legal or equitable proceedings to enforce any Loan Document against any Borrower or any Guarantor or to foreclose any Lien on, or otherwise enforce any security interest in, any of the Collateral.

(b) If, at any time or times any Lender shall receive (i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments with respect to the Obligations, except for any such proceeds or payments received by such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments from Agent in excess of such Lender’s Pro Rata Share of all such distributions by Agent, such Lender promptly shall (A) turn the same over to Agent, in kind, and with such endorsements as may be required to negotiate the same to Agent, or in immediately available funds, as applicable, for the account of all of the Lenders and for application to the Obligations in accordance with the applicable provisions of this Agreement, or (B) purchase, without recourse or warranty, an undivided interest and participation in the Obligations owed to the other Lenders so that such excess payment received shall be applied ratably as among the Lenders in accordance with their Pro Rata Shares; provided, that to the extent that such excess payment received by the purchasing party is thereafter recovered from it, those purchases of participations shall be rescinded in whole or in part, as applicable, and the applicable portion of the purchase price paid therefor shall be returned to such purchasing party, but without interest except to the extent that such purchasing party is required to pay interest in connection with the recovery of the excess payment.

15.13. Agency for Perfection. Agent hereby appoints each other Lender (and each Bank Product Provider) as its agent (and each Lender hereby accepts (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to accept) such appointment) for the purpose of perfecting Agent’s Liens in assets which, in accordance with Article 8 or Article 9, as applicable, of the Code can be perfected by possession or control. Should any Lender obtain possession or control of any such Collateral, such Lender shall notify Agent thereof, and, promptly upon Agent’s request therefor shall deliver possession or control of such Collateral to Agent or in accordance with Agent’s instructions.

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15.14. Payments by Agent to the Lenders. All payments to be made by Agent to the Lenders (or Bank Product Providers) shall be made by bank wire transfer of immediately available funds pursuant to such wire transfer instructions as each party may designate for itself by written notice to Agent. Concurrently with each such payment, Agent shall identify whether such payment (or any portion thereof) represents principal, premium, fees, or interest of the Obligations.

15.15. Concerning the Collateral and Related Loan Documents. Each member of the Lender Group authorizes and directs Agent to enter into this Agreement and the other Loan Documents. Each member of the Lender Group agrees (and by entering into a Bank Product Agreement, each Bank Product Provider shall be deemed to agree) that any action taken by Agent in accordance with the terms of this Agreement or the other Loan Documents relating to the Collateral and the exercise by Agent of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Lenders (and such Bank Product Provider).

15.16. Field Examination Reports; Confidentiality; Disclaimers by Lenders; Other Reports and Information. By becoming a party to this Agreement, each Lender:

(a) is deemed to have requested that Agent furnish such Lender, promptly after it becomes available, a copy of each field examination report respecting any Loan Party or its Subsidiaries (each, a “Report”) prepared by or at the request of Agent, and Agent shall so furnish each Lender with such Reports,

(b) expressly agrees and acknowledges that Agent does not (i) make any representation or warranty as to the accuracy of any Report, and (ii) shall not be liable for any information contained in any Report,

(c) expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that Agent or other party performing any field examination will inspect only specific information regarding the Loan Parties and their Subsidiaries and will rely significantly upon Borrowers’ and their Subsidiaries’ books and records, as well as on representations of Borrowers’ personnel,

(d) agrees to keep all Reports and other material, non-public information regarding the Loan Parties and their Subsidiaries and their operations, assets, and existing and contemplated business plans in a confidential manner in accordance with Section 17.9, and

(e) without limiting the generality of any other indemnification provision contained in this Agreement, agrees: (i) to hold Agent and any other Lender preparing a Report harmless from any action the indemnifying Lender may take or fail to take or any conclusion the indemnifying Lender may reach or draw from any Report in connection with any loans or other credit accommodations that the indemnifying Lender has made or may make to Borrowers, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a loan or loans of Borrowers, and (ii) to pay and protect, and indemnify, defend and hold Agent, and any such other Lender preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including, attorneys’ fees and costs) incurred by Agent and any such other Lender preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

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In addition to the foregoing, (x) any Lender may from time to time request of Agent in writing that Agent provide to such Lender a copy of any report or document provided by any Loan Party or its Subsidiaries to Agent that has not been contemporaneously provided by such Loan Party or such Subsidiary to such Lender, and, upon receipt of such request, Agent promptly shall provide a copy of same to such Lender, (y) to the extent that Agent is entitled, under any provision of the Loan Documents, to request additional reports or information from any Loan Party or its Subsidiaries, any Lender may, from time to time, reasonably request Agent to exercise such right as specified in such Lender’s notice to Agent, whereupon Agent promptly shall request of Borrowers the additional reports or information reasonably specified by such Lender, and, upon receipt thereof from such Loan Party or such Subsidiary, Agent promptly shall provide a copy of same to such Lender, and (z) any time that Agent renders to Borrowers a statement regarding the Loan Account, Agent shall send a copy of such statement to each Lender.

15.17. Several Obligations; No Liability. Notwithstanding that certain of the Loan Documents now or hereafter may have been or will be executed only by or in favor of Agent in its capacity as such, and not by or in favor of the Lenders, any and all obligations on the part of Agent (if any) to make any credit available hereunder shall constitute the several (and not joint) obligations of the respective Lenders on a ratable basis, according to their respective Commitments, to make an amount of such credit not to exceed, in principal amount, at any one time outstanding, the amount of their respective Commitments. Nothing contained herein shall confer upon any Lender any interest in, or subject any Lender to any liability for, or in respect of, the business, assets, profits, losses, or liabilities of any other Lender. Each Lender shall be solely responsible for notifying its Participants of any matters relating to the Loan Documents to the extent any such notice may be required, and no Lender shall have any obligation, duty, or liability to any Participant of any other Lender. Except as provided in Section 15.7, no member of the Lender Group shall have any liability for the acts of any other member of the Lender Group. No Lender shall be responsible to any Borrower or any other Person for any failure by any other Lender (or Bank Product Provider) to fulfill its obligations to make credit available hereunder, nor to advance for such Lender (or Bank Product Provider) or on its behalf, nor to take any other action on behalf of such Lender (or Bank Product Provider) hereunder or in connection with the financing contemplated herein.

15.18. No Reliance on Agent’s Customer Identification Program. To the extent the Loans or this Agreement is, or becomes, syndicated in cooperation with other Lenders, each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates, participants or assignees, may rely on Agent to carry out such Lender’s, Affiliate’s, participant’s or assignee’s customer identification program, or other obligations required or imposed under or pursuant to the USA PATRIOT Act or the regulations thereunder, including the regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including any programs involving any of the following items relating to or in connection with any of Borrowers, their Affiliates or their agents, the other Loan Documents or the transactions hereunder or contemplated hereby: (i) any identity verification procedures, (ii) any recordkeeping, (iii) comparisons with government lists, (iv) customer notices or (v) other procedures required under the CIP Regulations or such Anti-Terrorism Laws.

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16.	WITHHOLDING TAXES.

16.1. Payments. All payments made by any Loan Party under any Loan Document will be made free and clear of, and without deduction or withholding for, any Taxes, except as otherwise required by applicable law, and in the event any deduction or withholding of Taxes is required, the applicable Loan Party shall make the requisite withholding, promptly pay over to the applicable Governmental Authority the withheld Tax, and furnish to Agent as promptly as possible after the date the payment of any such Tax is due pursuant to applicable law, certified copies of tax receipts evidencing such payment by the Loan Parties. Furthermore, if any such Tax is an Indemnified Tax or an Indemnified Tax is so levied or imposed, the Loan Parties agree to pay the full amount of such Indemnified Taxes and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement, any note, or Loan Document, including any amount paid pursuant to this Section 16.1 after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount provided for herein. The Loan Parties will promptly pay any Other Taxes or reimburse Agent for such Other Taxes upon Agent’s demand. The Loan Parties shall jointly and severally indemnify each Indemnified Person (as defined in Section 10.3) (collectively a “Tax Indemnitee”) for the full amount of Indemnified Taxes arising in connection with this Agreement or any other Loan Document or breach thereof by any Loan Party (including, without limitation, any Indemnified Taxes imposed or asserted on, or attributable to, amounts payable under this Section 16) imposed on, or paid by, such Tax Indemnitee and all reasonable costs and expenses related thereto (including fees and disbursements of attorneys and other tax professionals), as and when they are incurred and irrespective of whether suit is brought, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority (other than Indemnified Taxes and additional amounts that a court of competent jurisdiction finally determines to have resulted from the gross negligence or willful misconduct of such Tax Indemnitee). The obligations of the Loan Parties under this Section 16 shall survive the termination of this Agreement, the resignation and replacement of Agent, and the repayment of the Obligations.

16.2. Exemptions.

(a) If a Lender or Participant is entitled to claim an exemption or reduction from United States withholding Tax, such Lender or Participant agrees with and in favor of Agent, to deliver to Agent (or, in the case of a Participant, to the Lender granting the participation only) and the Administrative Borrower on behalf of all Borrowers at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Administrative Borrower or Agent as will permit payments under this Agreement to be made without withholding or at a reduced rate of withholding and will also, if reasonably requested by the Administrative Borrower or Agent, provide any documentation prescribed by applicable law or reasonably requested by the Administrative Borrower or Agent as will enable the Administrative Borrower or Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements:

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(i) if such Lender or Participant is entitled to claim an exemption from United States withholding tax pursuant to the portfolio interest exception, (A) a statement of the Lender or Participant, signed under penalty of perjury, that it is not a (I) a “bank” as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder of Administrative Borrower (within the meaning of Section 871(h)(3)(B) of the IRC), or (III) a controlled foreign corporation related to Borrowers within the meaning of Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form W-8BEN, Form W-8BEN-E, Form W-8EXP or Form W-8IMY (with proper attachments as applicable);

(ii) if such Lender or Participant is entitled to claim an exemption from, or a reduction of, withholding Tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN or Form W-8BEN-E, as applicable;

(iii) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding Tax because it is effectively connected with a United States trade or business of such Lender, a properly completed and executed copy of IRS Form W-8ECI;

(iv) if such Lender or Participant is entitled to claim that interest paid under this Agreement is exempt from United States withholding Tax because such Lender or Participant serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (including a withholding statement and copies of the Tax certification documentation for its beneficial owner(s) of the income paid to the intermediary, if required based on its status provided on the Form W-8IMY), accompanied by IRS Form W-8ECI, IRS Form W-8BEN, IRS Form W-8BEN-E, IRS Form W-8EXP, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; or

(v) a properly completed and executed copy of any other form or forms, including IRS Form W-9, as may be required under the IRC or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.

(b) If a Lender or Participant claims an exemption from withholding Tax in a jurisdiction other than the United States, such Lender or such Participant agrees with and in favor of Agent and Borrowers, to deliver to Agent and Administrative Borrower (or, in the case of a Participant, to the Lender granting the participation only) on or prior to the date on which such Foreign Lender becomes a Lender any such form or forms, as may be required under the laws of such jurisdiction as a condition to exemption from, or reduction of, foreign withholding or backup withholding Tax before receiving its first payment under this Agreement, but only if such Lender or such Participant is legally able to deliver such forms, or the providing of or delivery of such forms in the Lender’s reasonable judgment would not subject such Lender to any material unreimbursed cost or expense or materially prejudice the legal or commercial position of such Lender (or its Affiliates); provided, further, that nothing in this Section 16.2(b) shall require a Lender or Participant to disclose any information that it deems to be confidential (including without limitation, its Tax returns).

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(c) Each Lender and each Participant shall provide new forms (or successor forms) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Agent and Administrative Borrower (or, in the case of a Participant, to the Lender granting the participation only) of any change in circumstances which would modify or render invalid any claimed exemption or reduction.

(d) If a Lender or Participant claims exemption from, or reduction of, withholding Tax and such Lender or Participant sells, assigns, grants a participation in, or otherwise transfers all or part of the Obligations of Borrowers to such Lender or Participant, such Lender or Participant agrees to notify Agent and Administrative Borrower (or, in the case of a sale of a participation interest, to the Lender granting the participation only) of the percentage amount in which it is no longer the beneficial owner of Obligations of Borrowers to such Lender or Participant. To the extent of such percentage amount, Agent and Administrative Borrower will treat such Lender’s or such Participant’s documentation provided pursuant to Section 16.2 as no longer valid. With respect to such percentage amount, such Participant or Assignee shall provide new documentation, pursuant to Section 16.2, if applicable. Borrowers agree that each Participant shall be entitled to the benefits of this Section 16 with respect to its participation in any portion of the Commitments and the Obligations so long as such Participant complies with the obligations set forth in this Section 16 with respect thereto (it being understood that the documentation required under this Section 16.2 shall be delivered by the participating Lender).

(e) If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable due diligence and reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Lender shall deliver to Agent and the Administrative Borrower (or, in the case of a Participant, to the Lender granting the participation only) at the time or times prescribed by law and at such time or times reasonably requested by Agent and the Administrative Borrower (or, in the case of a Participant, the Lender granting the participation) such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by Agent and the Administrative Borrower (or, in the case of a Participant, the Lender granting the participation) as may be necessary for Agent or Borrowers to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (e), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

16.3. Reductions.

(a) If a Lender or a Participant is subject to an applicable withholding Tax, Agent (or, in the case of a Participant, the Lender granting the participation) may withhold from any payment to such Lender or such Participant an amount equivalent to the applicable withholding Tax. If the forms or other documentation required by Section 16.2 are not delivered to Agent (or, in the case of a Participant, to the Lender granting the participation), then Agent (or, in the case of a Participant, to the Lender granting the participation) may withhold from any payment to such Lender or such Participant not providing such forms or other documentation an amount equivalent to the applicable withholding Tax.

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(b) If the IRS or any other Governmental Authority of the United States or other jurisdiction asserts a claim that Agent (or, in the case of a Participant, to the Lender granting the participation) did not properly withhold Tax from amounts paid to or for the account of any Lender or any Participant due to a failure on the part of the Lender or any Participant (because the appropriate form was not delivered, was not properly executed, or because such Lender failed to notify Agent (or such Participant failed to notify the Lender granting the participation) of a change in circumstances which rendered the exemption from, or reduction of, withholding Tax ineffective, or for any other reason) such Lender shall indemnify and hold Agent harmless (or, in the case of a Participant, such Participant shall indemnify and hold the Lender granting the participation harmless) for all amounts paid, directly or indirectly, by Agent (or, in the case of a Participant, to the Lender granting the participation), as Tax or otherwise, including penalties and interest, and including any Taxes imposed by any jurisdiction on the amounts payable to Agent (or, in the case of a Participant, to the Lender granting the participation only) under this Section 16, together with all costs and expenses (including attorneys’ fees and expenses). The obligation of the Lenders and the Participants under this subsection shall survive the payment of all Obligations and the resignation or replacement of Agent.

16.4. Refunds . If Agent or a Lender determines, in its sole discretion, that it has received a refund of any Indemnified Taxes to which the Loan Parties have paid additional amounts pursuant to this Section 16, so long as no Event of Default has occurred and is continuing, it shall pay over such refund to the Administrative Borrower on behalf of the Loan Parties (but only to the extent of payments made, or additional amounts paid, by the Loan Parties under this Section 16 with respect to Indemnified Taxes giving rise to such a refund), net of all out-of-pocket expenses of Agent or such Lender and without interest (other than any interest paid by the applicable Governmental Authority with respect to such a refund); provided, that the Loan Parties, upon the request of Agent or such Lender, agrees to repay the amount paid over to the Loan Parties (plus any penalties, interest or other charges, imposed by the applicable Governmental Authority, other than such penalties, interest or other charges imposed as a result of the willful misconduct or gross negligence of Agent or Lender hereunder as finally determined by a court of competent jurisdiction) to Agent or such Lender in the event Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything in this Agreement to the contrary, this Section 16 shall not be construed to require Agent or any Lender to make available its Tax returns (or any other information which it deems confidential) to Loan Parties or any other Person or require Agent or any Lender to pay any amount to an indemnifying party pursuant to this Section 16.4, the payment of which would place Agent or such Lender (or their Affiliates) in a less favorable net after-Tax position than such Person would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.

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17.	GENERAL PROVISIONS.

17.1. Effectiveness. This Agreement shall be binding and deemed effective when executed by each Borrower, Agent, and each Lender whose signature is provided for on the signature pages hereof.

17.2. Section Headings. Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

17.3. Interpretation. Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against the Lender Group or any Borrower, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

17.4. Severability of Provisions. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

17.5. Bank Product Providers. Each Bank Product Provider in its capacity as such shall be deemed a third party beneficiary hereof and of the provisions of the other Loan Documents for purposes of any reference in a Loan Document to the parties for whom Agent is acting. Agent hereby agrees to act as agent for such Bank Product Providers and, by virtue of entering into a Bank Product Agreement, the applicable Bank Product Provider shall be automatically deemed to have appointed Agent as its agent and to have accepted the benefits of the Loan Documents. It is understood and agreed that the rights and benefits of each Bank Product Provider under the Loan Documents consist exclusively of such Bank Product Provider’s being a beneficiary of the Liens and security interests (and, if applicable, guarantees) granted to Agent and the right to share in payments and collections out of the Collateral as more fully set forth herein. In addition, each Bank Product Provider, by virtue of entering into a Bank Product Agreement, shall be automatically deemed to have agreed that Agent shall have the right, but shall have no obligation, to establish, maintain, relax, or release reserves in respect of the Bank Product Obligations and that if reserves are established there is no obligation on the part of Agent to determine or insure whether the amount of any such reserve is appropriate or not. In connection with any such distribution of payments or proceeds of Collateral, Agent shall be entitled to assume no amounts are due or owing to any Bank Product Provider unless such Bank Product Provider has provided a written certification (setting forth a reasonably detailed calculation) to Agent as to the amounts that are due and owing to it and such written certification is received by Agent a reasonable period of time prior to the making of such distribution. Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products, but may rely upon the written certification of the amount due and payable from the applicable Bank Product Provider. In the absence of an updated certification, Agent shall be entitled to assume that the amount due and payable to the applicable Bank Product Provider is the amount last certified to Agent by such Bank Product Provider as being due and payable (less any distributions made to such Bank Product Provider on

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account thereof). Borrowers may obtain Bank Products from any Bank Product Provider, although Borrowers are not required to do so. Each Borrower acknowledges and agrees that no Bank Product Provider has committed to provide any Bank Products and that the providing of Bank Products by any Bank Product Provider is in the sole and absolute discretion of such Bank Product Provider. Notwithstanding anything to the contrary in this Agreement or any other Loan Document, no provider or holder of any Bank Product shall have any voting or approval rights hereunder (or be deemed a Lender) solely by virtue of its status as the provider or holder of such agreements or products or the Obligations owing thereunder, nor shall the consent of any such provider or holder be required (other than in their capacities as Lenders, to the extent applicable) for any matter hereunder or under any of the other Loan Documents, including as to any matter relating to the Collateral or the release of Collateral or Guarantors.

17.6. Debtor-Creditor Relationship. The relationship between the Lenders and Agent, on the one hand, and the Loan Parties, on the other hand, is solely that of creditor and debtor. No member of the Lender Group has (or shall be deemed to have) any fiduciary relationship or duty to any Loan Party arising out of or in connection with the Loan Documents or the transactions contemplated thereby, and there is no agency or joint venture relationship between the members of the Lender Group, on the one hand, and the Loan Parties, on the other hand, by virtue of any Loan Document or any transaction contemplated therein.

17.7. Counterparts; Electronic Execution. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement. The foregoing shall apply to each other Loan Document mutatis mutandis.

17.8. Revival and Reinstatement of Obligations; Certain Waivers. If any member of the Lender Group or any Bank Product Provider repays, refunds, restores, or returns in whole or in part, any payment or property (including any proceeds of Collateral) previously paid or transferred to such member of the Lender Group or such Bank Product Provider in full or partial satisfaction of any Obligation or on account of any other obligation of any Loan Party under any Loan Document or any Bank Product Agreement, because the payment, transfer, or the incurrence of the obligation so satisfied is asserted or declared to be void, voidable, or otherwise recoverable under any law relating to creditors’ rights, including provisions of the Bankruptcy Code relating to fraudulent transfers, preferences, or other voidable or recoverable obligations or transfers (each, a “Voidable Transfer”), or because such member of the Lender Group or Bank Product Provider elects to do so on the reasonable advice of its counsel in connection with a claim that the payment, transfer, or incurrence is or may be a Voidable Transfer, then, as to any such Voidable Transfer, or the amount thereof that such member of the Lender Group or Bank Product Provider elects to repay, restore, or return (including pursuant to a settlement of any claim in respect thereof), and as

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to all reasonable costs, expenses, and attorneys’ fees of such member of the Lender Group or Bank Product Provider related thereto, (i) the liability of the Loan Parties with respect to the amount or property paid, refunded, restored, or returned will automatically and immediately be revived, reinstated, and restored and will exist, and (ii) Agent’s Liens securing such liability shall be effective, revived, and remain in full force and effect, in each case, as fully as if such Voidable Transfer had never been made. If, prior to any of the foregoing, (A) Agent’s Liens shall have been released or terminated, or (B) any provision of this Agreement shall have been terminated or cancelled, Agent’s Liens, or such provision of this Agreement, shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligation of any Loan Party in respect of such liability or any Collateral securing such liability. This provision shall survive the termination of this Agreement and the repayment in full of the Obligations.

17.9. Confidentiality.

(a) Agent and Lenders each individually (and not jointly or jointly and severally) agree that material, non-public information regarding the Loan Parties and their Subsidiaries, their operations, assets, and existing and contemplated business plans (“Confidential Information”) shall be treated by Agent and the Lenders in a confidential manner, and shall not be disclosed by Agent and the Lenders to Persons who are not parties to this Agreement, except: (i) to attorneys for and other advisors, accountants, auditors, and consultants to any member of the Lender Group and to employees, directors and officers of any member of the Lender Group (the Persons in this clause (i), “Lender Group Representatives”) on a “need to know” basis in connection with this Agreement and the transactions contemplated hereby and on a confidential basis, (ii) to Subsidiaries and Affiliates of any member of the Lender Group (including the Bank Product Providers); provided, that any such Subsidiary or Affiliate shall have agreed to receive such information hereunder subject to the terms of this Section 17.9, (iii) as may be required by regulatory authorities so long as such authorities are informed of the confidential nature of such information, (iv) as may be required by statute, decision, or judicial or administrative order, rule, or regulation; provided, that (x) prior to any disclosure under this clause (iv), the disclosing party agrees to provide Borrowers with prior notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior notice to Borrowers pursuant to the terms of the applicable statute, decision, or judicial or administrative order, rule, or regulation and (y) any disclosure under this clause (iv) shall be limited to the portion of the Confidential Information as may be required by such statute, decision, or judicial or administrative order, rule, or regulation, (v) as may be agreed to in advance in writing by Borrowers, (vi) as requested or required by any Governmental Authority pursuant to any subpoena or other legal process; provided, that (x) prior to any disclosure under this clause (vi) the disclosing party agrees to provide Borrowers with prior written notice thereof, to the extent that it is practicable to do so and to the extent that the disclosing party is permitted to provide such prior written notice to Borrowers pursuant to the terms of the subpoena or other legal process and (y) any disclosure under this clause (vi) shall be limited to the portion of the Confidential Information as may be required by such Governmental Authority pursuant to such subpoena or other legal process, (vii) as to any such information that is or becomes generally available to the public (other than as a result of prohibited disclosure by Agent or the Lenders or the Lender Group Representatives),

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(viii) in connection with any assignment, participation or pledge of any Lender’s interest under this Agreement; provided, that prior to receipt of Confidential Information any such assignee, participant, or pledgee shall have agreed in writing to receive such Confidential Information either subject to the terms of this Section 17.9 or pursuant to confidentiality requirements substantially similar to those contained in this Section 17.9 (and such Person may disclose such Confidential Information to Persons employed or engaged by them as described in clause (i) above), (ix) in connection with any litigation or other adversary proceeding involving parties hereto which such litigation or adversary proceeding involves claims related to the rights or duties of such parties under this Agreement or the other Loan Documents; provided, that prior to any disclosure to any Person (other than any Loan Party, Agent, any Lender, any of their respective Affiliates, or their respective counsel) under this clause (ix) with respect to litigation involving any Person (other than any Borrower, Agent, any Lender, any of their respective Affiliates, or their respective counsel), the disclosing party agrees to provide Borrowers with prior written notice thereof, and (x) in connection with, and to the extent reasonably necessary for, the exercise of any secured creditor remedy under this Agreement or under any other Loan Document.

(b) Anything in this Agreement to the contrary notwithstanding, Agent may disclose information concerning the terms and conditions of this Agreement and the other Loan Documents to loan syndication and pricing reporting services or in its marketing or promotional materials, with such information to consist of deal terms and other information customarily found in such publications or marketing or promotional materials and may otherwise use the name, logos, and other insignia of any Borrower or the other Loan Parties and the Commitments provided hereunder in any “tombstone” or other advertisements, on its website or in other marketing materials of Agent.

(c) Each Loan Party agrees that Agent may make Borrower materials “Borrower Materials”) available to the Lenders by posting the communications on IntraLinks, SyndTrak or a substantially similar secure electronic transmission system (the “Platform”). The Platform is provided “as is” and “as available.” Agent does not warrant the accuracy or completeness of the Borrower Materials, or the adequacy of the Platform and expressly disclaim liability for errors or omissions in the communications. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third party rights or freedom from viruses or other code defects, is made by Agent in connection with the Borrower Materials or the Platform. In no event shall Agent or any of the Agent-Related Persons have any liability to the Loan Parties, any Lender or any other person for damages of any kind, including direct or indirect, special, incidental or consequential damages, losses or expenses (whether in tort, contract or otherwise) arising out of any Loan Party’s or Agent’s transmission of communications through the Internet, except to the extent the liability of such person is found in a final non-appealable judgment by a court of competent jurisdiction to have resulted from such person’s gross negligence or willful misconduct. Each Loan Party further agrees that certain of the Lenders may be “public-side” Lenders (i.e., Lenders that do not wish to receive material non-public information with respect to the Loan Parties or their securities) (each, a “Public Lender”). The Loan Parties shall be deemed to have authorized Agent and its Affiliates and the Lenders to treat Borrower Materials marked “PUBLIC” or otherwise at any time filed with the SEC as not containing any material non-public information with respect to the Loan Parties or

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their securities for purposes of United States federal and state securities laws. All Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Investor” (or another similar term). Agent and its Affiliates and the Lenders shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” or that are not at any time filed with the SEC as being suitable only for posting on a portion of the Platform not marked as “Public Investor” (or such other similar term).

17.10. Survival. All representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Agent, Issuing Bank, or any Lender may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any Loan or any fee or any other amount payable under this Agreement is outstanding or unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or been terminated.

17.11. [Intentionally Omitted].

17.12. Integration. This Agreement, together with the other Loan Documents, reflects the entire understanding of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof. The foregoing to the contrary notwithstanding, all Bank Product Agreements, if any, are independent agreements governed by the written provisions of such Bank Product Agreements, which will remain in full force and effect, unaffected by any repayment, prepayments, acceleration, reduction, increase, or change in the terms of any credit extended hereunder, except as otherwise expressly provided in such Bank Product Agreement.

17.13. Parent as Agent for Borrowers. Each Borrower hereby irrevocably appoints the Parent as the borrowing agent and attorney-in-fact for all Borrowers (the “Administrative Borrower”) which appointment shall remain in full force and effect unless and until Agent shall have received prior written notice signed by each Borrower that such appointment has been revoked and that another Borrower has been appointed Administrative Borrower. Each Borrower hereby irrevocably appoints and authorizes the Administrative Borrower (a) to provide Agent with all notices with respect to Revolving Loans and Letters of Credit obtained for the benefit of any Borrower and all other notices and instructions under this Agreement and the other Loan Documents (and any notice or instruction provided by Administrative Borrower shall be deemed to be given by Borrowers hereunder and shall bind each Borrower), (b) to receive notices and instructions from members of the Lender Group (and any notice or instruction provided by any member of the Lender Group to the Administrative Borrower in accordance with the terms hereof shall be deemed to have been given to each Borrower), and (c) to enter into Bank Product Provider Agreements on behalf of Borrowers and their Subsidiaries, and (d) to take such action as the Administrative Borrower deems appropriate on its behalf to obtain Revolving Loans and Letters

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of Credit and to exercise such other powers as are reasonably incidental thereto to carry out the purposes of this Agreement. It is understood that the handling of the Loan Account and Collateral in a combined fashion, as more fully set forth herein, is done solely as an accommodation to Borrowers in order to utilize the collective borrowing powers of Borrowers in the most efficient and economical manner and at their request, and that Lender Group shall not incur liability to any Borrower as a result hereof. Each Borrower expects to derive benefit, directly or indirectly, from the handling of the Loan Account and the Collateral in a combined fashion since the successful operation of each Borrower is dependent on the continued successful performance of the integrated group. To induce the Lender Group to do so, and in consideration thereof, each Borrower hereby jointly and severally agrees to indemnify each member of the Lender Group and hold each member of the Lender Group harmless against any and all liability, expense, loss or claim of damage or injury, made against the Lender Group by any Borrower or by any third party whosoever, arising from or incurred by reason of (i) the handling of the Loan Account and Collateral of Borrowers as herein provided, or (ii) the Lender Group’s relying on any instructions of the Administrative Borrower, except that Borrowers will have no liability to the relevant Agent-Related Person or Lender-Related Person under this Section 17.13 with respect to any liability that has been finally determined by a court of competent jurisdiction to have resulted solely from the gross negligence or willful misconduct of such Agent-Related Person or Lender-Related Person, as the case may be.

17.14. Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

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17.15. Intercreditor Agreement. Notwithstanding anything herein to the contrary, the lien and security interest granted to the Agent pursuant to this Agreement and the other Loan Documents and the exercise of any right or remedy by the Agent hereunder or thereunder are subject to the provisions of the Intercreditor Agreement. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.

17.16. Certifications From Banks and Participants; USA PATRIOT Act.

(a) Each Lender or assignee or participant of a Lender that is not incorporated under the laws of the United States of America or a state thereof (and is not excepted from the certification requirement contained in Section 313 of the USA PATRIOT Act and the applicable regulations because it is both (i) an affiliate of a depository institution or foreign bank that maintains a physical presence in the United States or foreign country, and (ii) subject to supervision by a banking authority regulating such affiliated depository institution or foreign bank) shall deliver to Agent the certification, or, if applicable, recertification, certifying that such Lender is not a “shell” and certifying to other matters as required by Section 313 of the USA PATRIOT Act and the applicable regulations: (1) within ten (10) days after the Closing Date, and (2) as such other times as are required under the USA PATRIOT Act.

(b) The USA PATRIOT Act requires all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, any Lender may from time to time request, and each Borrower shall provide to such Lender, such Borrower’s name, address, tax identification number and/or such other identifying information as shall be necessary for such Lender to comply with the USA PATRIOT Act and any other Anti-Terrorism Law.

17.17. Anti-Terrorism Laws Agreement.

(a) Each Borrower represents and warrants that (i) no Covered Entity is a Sanctioned Person and (ii) no Covered Entity, either in its own right or through any third party, (A) has any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B) does business in or with, or derives any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; or (C) engages in any dealings or transactions prohibited by any Anti-Terrorism Law.

(b) Each Borrower covenants and agrees that (i) no Covered Entity will become a Sanctioned Person, (ii) no Covered Entity, either in its own right or through any third party, will (A) have any of its assets in a Sanctioned Country or in the possession, custody or control of a Sanctioned Person in violation of any Anti-Terrorism Law; (B) do business in or with, or derive any of its income from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any Anti-Terrorism Law; (C) engage in any dealings or transactions prohibited by any Anti-Terrorism Law or (D) use the advances to fund any operations in, finance any investments or activities in, or, make any payments to, a Sanctioned Country or Sanctioned

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Person in violation of any Anti-Terrorism Law, (iii) the funds used to repay the Obligations will not be derived from any unlawful activity, (iv) each Covered Entity shall comply with all Anti-Terrorism Laws and (v) Borrowers shall promptly notify Agent in writing upon the occurrence of a Reportable Compliance Event.

[Signature pages to follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.


PARENT AND BORROWER:	PIONEER ENERGY SERVICES CORP., a Texas corporation

	By:	/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

ADDITIONAL BORROWERS:	PIONEER DRILLING SERVICES, LTD., a Texas corporation

	By:	/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

	PIONEER PRODUCTION SERVICES, INC., a Delaware corporation

	By:	/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

	PIONEER GLOBAL HOLDINGS, INC., a Delaware corporation

	By:	/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

[SIGNATURE PAGE TO CREDIT AGREEMENT]


PIONEER WIRELINE SERVICES HOLDINGS, INC., a Delaware corporation

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER WIRELINE SERVICES, LLC, a Delaware limited liability company

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER WELL SERVICES, LLC, a Delaware limited liability company

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER FISHING & RENTAL SERVICES, LLC, a Delaware limited liability company

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer


PIONEER COILED TUBING SERVICES, LLC, a Delaware limited liability company

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief Financial Officer

[SIGNATURE PAGE TO CREDIT AGREEMENT]


PNC BANK, NATIONAL ASSOCIATION, a national banking association, as Agent, as Sole Lead Arranger, as Sole Book Runner and as a Lender

By:		/s/ Anita Puligandla
		Name: Anita Puligandla
		Title: Senior Vice President

[SIGNATURE PAGE TO CREDIT AGREEMENT]

SCHEDULE A-1

AGENT’S ACCOUNT

Redacted.

Schedule A-1 Page 1

SCHEDULE C

COMMITMENTS


Revolving Lender	Revolver Commitment
PNC Bank, National Association	$	75,000,000.00
All Revolving Lenders	$	75,000,000.00

Schedule C Page 1

SCHEDULE 3.6

CONDITIONS SUBSEQUENT

Redacted.

Schedule 3.6 Page 1

SCHEDULE 5.1

FINANCIAL STATEMENTS, REPORTS, CERTIFICATES

Deliver to Agent (and if so requested by Agent, with copies for each Lender) each of the financial statements, reports, or other items set forth below at the following times in form satisfactory to Agent:


as soon as available, but in any event within 20 days after the end of each month during each of Parent’s fiscal years,		(a) monthly accounts receivable and accounts payable agings, monthly inventory listings, (b) and Borrowing Base certificates monthly (reverting to weekly during a Covenant Testing Period), and (c) rig utilization reports, in form and substance reasonably satisfactory to Agent.

as soon as available, but in any event within 30 days (45 days in the case of a month that is the end of one of Parent’s fiscal quarters) after the end of each month during each of Parent’s fiscal years,		(d) an unaudited consolidated and consolidating balance sheet, income statement, statement of cash flow, and statement of shareholder’s equity covering Parent’s and its Subsidiaries’ operations during such period, and (e) a Compliance Certificate along with the underlying calculations, including the calculations to arrive at EBITDA and Fixed Charge Coverage Ratio (regardless of whether such financial covenant is then being tested).

as soon as available, but in any event within 90 days after the end of each of Parent’s fiscal years,		(f) consolidated and consolidating financial statements of Parent and its Subsidiaries for each such fiscal year, audited by independent certified public accountants reasonably acceptable to Agent and certified, without any qualifications noted in their opinion (including any (i) “going concern” or like qualification or exception, (ii) qualification or exception as to the scope of such audit, or (iii) qualification which relates to the treatment or classification of any item and which, as a condition to the removal of such qualification, would require an adjustment to such item, the effect of which would be to cause any noncompliance with the provisions of Section 7 of the Agreement), by such accountants to have been prepared in accordance with GAAP (such audited financial statements to include a balance sheet, income statement, statement of cash flow, and statement of shareholder’s equity, and, if prepared, such accountants’ letter to management), and (g) a Compliance Certificate along with the underlying calculations, including the calculations to arrive at EBITDA and Fixed Charge Coverage Ratio (regardless of whether such financial covenant is then being tested).

Schedule 5.1 Page 1


as soon as available, but in any event no later than the earlier of (x) the filing of the Parent’s Form 10-K annual reports and (y) sixty (60) days after the beginning of the Parent’s fiscal year commencing with fiscal year 2021,		(h) a month by month projected operating budget and cash flow of the Loan Parties on a consolidated and consolidating basis for such fiscal year (including an income statement for each month and a balance sheet as at the end of the last month in each fiscal quarter), such projections to be accompanied by a certificate signed by the President or Chief Financial Officer of each Loan Party to the effect that such projections have been prepared on the basis of sound financial planning practice consistent with past budgets and financial statements and that such officer has no reason to question the reasonableness of any material assumptions on which such projections were prepared (“Projections”).

as soon as available, but in any event no later than concurrently with the filing of the Parent’s Form 10-Q quarterly reports and Form 10-K annual reports,		(i) copies of Parent’s projected consolidated cash flow statement, balance sheet and income statement, in form and substance (including as to scope and underlying assumptions) satisfactory to Agent, in its Permitted Discretion, for the forthcoming four fiscal quarters, certified by the chief financial officer of Parent as being such officer’s good faith estimate of the financial performance of Parent and its Subsidiaries during the period covered thereby.

if and when filed by Parent,		(j) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K current reports, (k) any other filings made by Parent with the SEC, and (l) any other information that is provided by Parent to its shareholders generally.

promptly, but in any event within 5 days after any Borrower has knowledge of any event or condition that constitutes a Default or an Event of Default,		(m) notice of such event or condition and a statement of the curative action that Borrowers propose to take with respect thereto.

promptly, but in any event within 5 days after any Borrower has knowledge thereof or the date of the furnishing to any Borrower,		(n) notice and copies of notices, certificates or reports (other than operational notices regarding interest rate selections, change of address notices, and similar routine and immaterial notices) sent to or from the Loan Parties in connection with the Senior Secured Notes Documents or any amendment, supplement or other modification to the Senior Secured Notes Documents,

Schedule 5.1 Page 2



promptly after the commencement thereof, but in any event within 5 days after the service of process with respect thereto on Parent or any of its Subsidiaries,		(o) notice of all actions, suits, or proceedings brought by or against Parent or any of its Subsidiaries before any Governmental Authority which reasonably could be expected to result in a Material Adverse Effect.

upon the request of Agent,		(p) to the extent reasonably available to the Loan Parties, any other information reasonably requested relating to the financial condition of Parent or its Subsidiaries.

Schedule 5.1 Page 3

SCHEDULE 5.2

Collateral Reporting

Provide Agent (and if so requested by Agent, with copies for each Lender) with each of the documents set forth below at the following times in form satisfactory to Agent:



If (x) no Covenant Testing Period is in effect, monthly (no later than the 20th day of each month), or (y) Covenant Testing Period is in effect, weekly (no later than the third Business Day of each week, commencing with the first such day to occur during any Covenant Testing Period),		(a) an executed Borrowing Base Certificate, (b) a detailed aging, by total, listing each Borrower’s billed and unbilled Accounts (in the case of unbilled Accounts, aged by reference to the service date), together with a reconciliation and supporting documentation for any reconciling items noted (c) a reconciliation of billed and unbilled Accounts, accounts payable, and, to the extent Inventory is included in the Borrowing Base, Inventory of Borrowers’ to the general ledger, and from the general ledger to its monthly financial statements, including any book reserves related to each category, (d) a detailed calculation of those Accounts that are not eligible for the Borrowing Base, (e) notice of all claims, offsets, or disputes asserted by Account Debtors with respect to each Borrower’s Accounts, (f) to the extent Inventory is included in the Borrowing Base, Inventory system/perpetual reports specifying the net book value of each Borrower’s Inventory, by category, (g) to the extent Inventory is included in the Borrowing Base, a detailed calculation of Inventory categories that are not eligible for the Borrowing Base, (h) a summary aging, by vendor, of each Loan Party’s accounts payable and any book overdraft and an aging, by vendor, of any held checks, and (i) a detailed report regarding each Loan Party’s and its Subsidiaries’ cash and Cash Equivalents, including an indication of which amounts constitute Qualified Cash.

Quarterly (no later than the 45th day after the end of each fiscal quarter),		(j) a report regarding each Loan Party’s and its Subsidiaries’ accrued, but unpaid, ad valorem taxes, and (k) a Perfection Certificate or a supplement to the Perfection Certificate.

Schedule 5.2 Page 1



Annually (no later than 90 days after the end of each fiscal year)		(l) a detailed list of each Loan Party’s and its Subsidiaries’ customers, with address and contact information.

Upon request by Agent,		(m) copies of purchase orders and invoices for Inventory acquired by any Loan Party or its Subsidiaries, (n) copies of invoices together with corresponding shipping and delivery documents, and credit memos together with corresponding supporting documentation, with respect to invoices and credit memos in excess of an amount determined in the sole discretion of Agent, from time to time, and (o) such other reports as to the Collateral of any Loan Party and its Subsidiaries, as Agent may reasonably request.

Schedule 5.2 Page 2

EXHIBIT A-1

FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT

This ASSIGNMENT AND ACCEPTANCE AGREEMENT (“Assignment Agreement”) is entered into as of _______________ ________________ between _______________________________ (“Assignor”) and _______________________________ (“Assignee”). Reference is made to the Agreement described in Annex I hereto (the “Credit Agreement”). Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement.

1. In accordance with the terms and conditions of Section 13 of the Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, that interest in and to the Assignor’s rights and obligations under the Loan Documents as of the date hereof with respect to the Obligations owing to the Assignor, and Assignor’s portion of the Commitments, all to the extent specified on Annex I.

2. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claim and (ii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment Agreement and to consummate the transactions contemplated hereby; (b) makes no representation or warranty and assumes no responsibility with respect to (i) any statements, representations or warranties made in or in connection with the Loan Documents, or (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any other instrument or document furnished pursuant thereto; (c) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any Guarantor or the performance or observance by any Borrower or any Guarantor of any of their respective obligations under the Loan Documents or any other instrument or document furnished pursuant thereto, and (d) represents and warrants that the amount set forth as the Purchase Price on Annex I represents the amount owed by Borrowers to Assignor with respect to Assignor’s share of the Revolving Loans assigned hereunder, as reflected on Assignor’s books and records.

3. The Assignee (a) confirms that it has received copies of the Credit Agreement and the other Loan Documents, together with copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment Agreement; (b) agrees that it will, independently and without reliance upon Agent, Assignor, or any other Lender, based upon such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking any action under the Loan Documents; (c) [confirms that it is an Eligible Transferee;] (d) appoints and authorizes the Agent to take such action as agent on its behalf and to exercise such powers under the Loan Documents as are delegated to Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (e) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender; [and (f) attaches the forms prescribed by the Internal Revenue Service of the United States certifying as to the Assignee’s status for purposes of determining exemption from United States withholding taxes with respect to all payments to be made to the Assignee under the Credit Agreement or such other documents as are necessary to indicate that all such payments are subject to such rates at a rate reduced by an applicable tax treaty.]

4. Following the execution of this Assignment Agreement by the Assignor and Assignee, the Assignor will deliver this Assignment Agreement to the Agent for recording by the Agent. The effective date of this Assignment (the “Settlement Date”) shall be the latest to occur of (a) the date of the execution and delivery hereof by the Assignor and the Assignee, (b) the receipt by Agent for its sole and separate account a processing fee in the amount of $3,500 (if required by the Credit Agreement), (c) the receipt of any required consent of the Agent, and (d) the date specified in Annex I.

5. As of the Settlement Date (a) the Assignee shall be a party to the Credit Agreement and, to the extent of the interest assigned pursuant to this Assignment Agreement, have the rights and obligations of a Lender thereunder and under the other Loan Documents, and (b) the Assignor shall, to the extent of the interest assigned pursuant to this Assignment Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and the other Loan Documents, provided, however, that nothing contained herein shall release any assigning Lender from obligations that survive the termination of the Credit Agreement, including such assigning Lender’s obligations under Article 15 and Section 17.9(a) of the Credit Agreement.

6. Upon the Settlement Date, Assignee shall pay to Assignor the Purchase Price (as set forth in Annex I). From and after the Settlement Date, Agent shall make all payments that are due and payable to the holder of the interest assigned hereunder (including payments of principal, interest, fees and other amounts) to Assignor for amounts which have accrued up to but excluding the Settlement Date and to Assignee for amounts which have accrued from and after the Settlement Date. On the Settlement Date, Assignor shall pay to Assignee an amount equal to the portion of any interest, fee, or any other charge that was paid to Assignor prior to the Settlement Date on account of the interest assigned hereunder and that are due and payable to Assignee with respect thereto, to the extent that such interest, fee or other charge relates to the period of time from and after the Settlement Date.

7. This Assignment Agreement may be executed in counterparts and by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. This Assignment Agreement may be executed and delivered by telecopier or other facsimile transmission all with the same force and effect as if the same were a fully executed and delivered original manual counterpart.

8. THIS ASSIGNMENT AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

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IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement and Annex I hereto to be executed by their respective officers, as of the first date written above.


[NAME OF ASSIGNOR] as Assignor

By
		Name:
		Title:

[NAME OF ASSIGNEE] as Assignee

By
		Name:
		Title:

-3-


ACCEPTED THIS ____ DAY OF _______________

PNC BANK, NATIONAL ASSOCIATION, a national banking association, as Agent, as Swing Lender and as Issuing Bank



By
		Name:
		Title:


[[____________], [as Swing Lender] [and] [as Issuing Bank]



By
		Name:
		Title:]


[[ADMINISTRATIVE BORROWER]



By
		Name:
		Title:]¹

¹	Include to the extent required by Section 13.1(a)(i)(A).

-4-

ANNEX FOR ASSIGNMENT AND ACCEPTANCE

ANNEX I

1.	Borrowers: PIONEER ENERGY SERVICES CORP., a Delaware corporation, and its Subsidiaries from time to time party to the Credit Agreement

2.	Name and Date of Credit Agreement:

Credit Agreement dated as of May 29, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”) by and among PIONEER ENERGY SERVICES CORP., a Delaware corporation (“Parent”), the Subsidiaries of Parent identified on the signature pages thereof as Borrowers, and those additional entities that hereafter become parties to the Credit Agreement as Borrowers in accordance with the terms thereof, each, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”), the lenders party thereto as “Lenders” (each of such Lenders, together with its successors and assigns, is referred to hereinafter as a “Lender”), Agent, PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole lead arranger (in such capacity, together with its successors and assigns in such capacity, the “Sole Lead Arranger”), and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole book runner (in such capacity, together with its successors and assigns in such capacity, the “Sole Book Runner”).


3.	Date of Assignment Agreement:	__________

4.	Amounts:

	(a) Assigned Amount of Revolver Commitment	$__________

	(b) Assigned Amount of Revolving Loans	$__________

5.	SettlementDate:	__________

6.	PurchasePrice	$__________

7.	Noticeand Payment Instructions, etc.

Assignee:

_______________________________
_______________________________
_______________________________

Assignor:

_______________________________
_______________________________
_______________________________

EXHIBIT B-l

Form of Borrowing Base Certificate

[Attached]

EXHIBIT B-2

FORM OF BANK PRODUCT PROVIDER AGREEMENT

[Letterhead of Specified Bank Product Provider]

[Date]

PNC Bank, National Association, as Agent

2100 Ross Avenue, Suite 1850

Dallas, TX 75201

Attn: Relationship Manager – Pioneer

Telephone: (214) 871-1253

Facsimile: (214) 871-2015

Email: anita.puligandla@pnc.com

Ladies and Gentlemen:

Reference is hereby made to that certain Credit Agreement, dated as of May 29, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among PIONEER ENERGY SERVICES CORP., a Delaware corporation (“Parent”), PIONEER DRILLING SERVICES, LTD., a Texas corporation (“ Drilling”), PIONEER GLOBAL HOLDINGS, INC., a Delaware corporation (“Global”), PIONEER PRODUCTION SERVICES, INC., a Delaware corporation (“Production”), PIONEER WIRELINE SERVICES HOLDINGS, INC., a Delaware corporation (“Wireline Holdings”), PIONEER WIRELINE SERVICES, LLC, a Delaware limited liability company (“Wireline”), PIONEER WELL SERVICES, LLC, a Delaware limited liability company (“Well Services”), PIONEER FISHING & RENTAL SERVICES, LLC, a Delaware limited liability company (“Fishing & Rental”), PIONEER COILED TUBING SERVICES, LLC, a Delaware limited liability company (“Coiled Tubing”; together with Parent, Drilling, Global, Production, Wireline Holdings, Wireline, Well Services, Fishing & Rental and those additional entities that hereafter become parties to the Credit Agreement as Borrowers in accordance with the terms thereof, each, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”), the lenders party thereto as “Lenders” (each of such Lenders, together with its successors and assigns, is referred to hereinafter as a “Lender”), Agent, PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole lead arranger (in such capacity, together with its successors and assigns in such capacity, the “Sole Lead Arranger”), and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole book runner (in such capacity, together with its successors and assigns in such capacity, the “Sole Book Runner”). Capitalized terms used herein, but not specifically defined herein, shall have the meanings ascribed to them in the Credit Agreement.

Reference is also made to that certain [description of the Bank Product Agreement or Agreements] (the “Specified Bank Product Agreement [Agreements]”) dated as of __________ by and between [Lender or Affiliate of Lender] (the “Specified Bank Products Provider”) and [identify the Loan Party].

1. Appointment of Agent. The Specified Bank Products Provider hereby designates and appoints Agent, and Agent by its signature below hereby accepts such appointment, as its agent under the Credit Agreement and the other Loan Documents. The Specified Bank Products Provider hereby acknowledges that it has reviewed Sections 15.1 through 15.15 and Sections 15.17, 15.18, and 17.5 of the Credit Agreement (collectively such sections are referred to herein as the “Agency Provisions”), including, as applicable, the defined terms used therein. Specified Bank Products Provider and Agent each agree that the Agency Provisions which govern the relationship, and certain representations, acknowledgements, appointments, rights, restrictions, and agreements, between the Agent, on the one hand, and the Lenders, on the other hand, shall, from and after the date of this letter agreement, also apply to and govern, mutatis mutandis, the relationship between the Agent, on the one hand, and the Specified Bank Product Provider with respect to the Bank Products provided pursuant to the Specified Bank Product Agreement[s], on the other hand.

2. Acknowledgement of Certain Provisions of Credit Agreement. The Specified Bank Products Provider hereby acknowledges that it has reviewed the provisions of Section 2.4(b)(ii), Section 14.1, Section 15 and Section 17.5 of the Credit Agreement, including, as applicable, the defined terms used therein, and agrees to be bound by the provisions thereof. Without limiting the generality of any of the foregoing referenced provisions, Specified Bank Product Provider understands and agrees that its rights and benefits under the Loan Documents consist solely of it being a beneficiary of the Liens and security interests granted to Agent and the right to share in proceeds of the Collateral to the extent set forth in the Credit Agreement.

3. Reporting Requirements. Agent shall have no obligation to calculate the amount due and payable with respect to any Bank Products. On a monthly basis (not later than the 10th Business Day of each calendar month) or as more frequently as Agent shall request, the Specified Bank Products Provider agrees to provide Agent with a written report, in form and substance satisfactory to Agent, detailing Specified Bank Products Provider’s reasonable determination of the liabilities and obligations (and mark-to-market exposure) of Parent and the other Loan Parties in respect of the Bank Products provided by Specified Bank Products Provider pursuant to the Specified Bank Products Agreement[s]. If Agent does not receive such written report within the time period provided above, Agent shall be entitled to assume that the reasonable determination of the liabilities and obligations of Parent and the other Loan Parties with respect to the Bank Products provided pursuant to the Specified Bank Products Agreement[s] is zero.

4. Bank Product Reserve Conditions. Specified Bank Products Provider further acknowledges and agrees that Agent shall have the right (to the extent permitted pursuant to the Credit Agreement), but shall have no obligation to establish, maintain, relax, or release reserves in respect of any of the Bank Product Obligations and that if reserves are established there is no obligation on the part of the Agent to determine or insure whether the amount of any such reserve is appropriate or not (including whether it is sufficient in amount). If Agent chooses to implement a reserve, Specified Bank Products Provider acknowledges and agrees that Agent shall be entitled to rely on the information in the reports described above to establish the Bank Product Reserves.

5. Bank Product Obligations. From and after the delivery to Agent of this agreement duly executed by Specified Bank Product Provider and the acknowledgement of this agreement by Agent and Borrower, the obligations and liabilities of Parent and the other Loan Parties to Specified Bank Product Provider in respect of Bank Products evidenced by the Specified Bank Product Agreement[s] shall constitute Bank Product Obligations (and which, in turn, shall constitute Obligations), and Specified Bank Product Provider shall constitute a Bank Product Provider until such time as Specified Bank Products Provider or its Affiliate is no longer a Lender. Specified Bank Products Provider acknowledges that other Bank Products (which may or may not be Specified Bank Products) may exist at any time.

6. Notices. All notices and other communications provided for hereunder shall be given in the form and manner provided in Section 11 of the Credit Agreement, and, if to Agent, shall be mailed, sent, or delivered to Agent in accordance with Section 11 of the Credit Agreement, if to any Borrower, shall be mailed, sent, or delivered to Borrowers in accordance with Section 11 in the Credit Agreement, and, if to Specified Bank Products Provider, shall be mailed, sent or delivered to the address set forth below, or, in each case as to any party, at such other address as shall be designated by such party in a written notice to the other party.

If to Specified Bank

Products Provider:

________________________
________________________
________________________
Attn: ____________________
Fax No. __________________

7. Miscellaneous. This agreement shall bind and inure to the benefit of the respective successors and assigns of each of the parties hereto (including any successor agent pursuant to Section 15.9 of the Credit Agreement); provided, that Borrowers may not assign this agreement or any rights or duties hereunder without the other parties’ prior written consent and any prohibited assignment shall be absolutely void ab initio. Unless the context of this agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and “including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.” This agreement may be executed in any number of counterparts and by different parties on separate counterparts. Each of such counterparts shall be deemed to be an original, and all of such counterparts, taken together, shall constitute but one and the same agreement. Delivery of an executed counterpart of this letter by telefacsimile or other means of electronic transmission shall be equally effective as delivery of a manually executed counterpart.

8. Governing Law.

(a) THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK. EACH PARTY HERETO WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8(b).

(c) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES ITS RIGHT, IF ANY, TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH PARTY HERETO REPRESENTS THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(d) EACH BORROWER AND SPECIFIED BANK PRODUCTS PROVIDER EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

[signature pages to follow]


Sincerely,

[SPECIFIED BANK PRODUCTS PROVIDER]



By:


Name:


Title:

-7-


Acknowledged, accepted, and agreed as of the date first written above:

PIONEER ENERGY SERVICES CORP., as Administrative Borrower



By:


Name:


Title:

-8-


Acknowledged, accepted, and agreed as of ______________

PNC BANK, NATIONAL ASSOCIATION, a national banking association, as Agent



By:


Name:


Title:

-9-

EXHIBIT C-1

FORM OF COMPLIANCE CERTIFICATE

[on Parent’s letterhead]

To: PNC Bank, National Association

2100 Ross Avenue, Suite 1850

Dallas, TX 75201

Attn: Relationship Manager – Pioneer

Telephone: (214) 871-1253

Facsimile: (214) 871-2015

Email: anita.puligandla@pnc.com

Re: Compliance Certificate dated _____________, 20__

Ladies and Gentlemen:

Pursuant to Section 5.1 of the Credit Agreement, the undersigned officer of Parent hereby certifies as of the date hereof that:

1. The financial information of Parent and its Subsidiaries furnished in Schedule 1 attached hereto, has been prepared in accordance with GAAP (except, in the case of unaudited financial statements, for year-end audit adjustments and the lack of footnotes), and fairly presents in all material respects the financial condition of Parent and its Subsidiaries as of the date set forth therein.

2. Such officer has reviewed the terms of the Credit Agreement and has made, or caused to be made under his/her supervision, a review in reasonable detail of the transactions and financial condition of Parent and its Subsidiaries during the accounting period covered by the financial statements delivered pursuant to Section 5.1 of the Credit Agreement.

3. Such review has not disclosed the existence on and as of the date hereof, and the undersigned does not have knowledge of the existence as of the date hereof, of any event or condition that constitutes a Default or Event of Default, except for such conditions or events listed on Schedule 2 attached hereto, in each case specifying the nature and period of existence thereof and what action Parent and/or its Subsidiaries have taken, are taking, or propose to take with respect thereto.

4. Except as set forth on Schedule 3 attached hereto, the representations and warranties of Parent and its Subsidiaries set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date.

5. [The Fixed Charge Coverage Ratio for the 12 month period ending ____________ ___, 20___, is demonstrated on Schedule 4 hereof.]² [or] [As of the date hereof, Parent its Subsidiaries are [in / not in] compliance with the covenant contained in Section 7(a) of the Credit Agreement as demonstrated on Schedule 4 hereof.]³

6. Attached hereto as Schedule 5 are Projections and calculations which show Borrowers are [in / not in] compliance with the covenant contained in Section 7(b) of the Credit Agreement.

[Signature page follows]

²	Language to be used when Borrowers are not in a Covenant Testing Period.

³	Language to be used during a Covenant Testing Period.

IN WITNESS WHEREOF, this Compliance Certificate is executed by the undersigned this _____ day of ___________, 20____.


PIONEER ENERGY SERVICES CORP., a Delaware corporation, as Parent



By:


Name:


Title:

SCHEDULE 1

Financial Information

SCHEDULE 2

Default or Event of Default

SCHEDULE 3

Representations and Warranties

SCHEDULE 4

Financial Covenants (Fixed Charge Coverage Ratio)

Borrowers’ Fixed Charge Coverage Ratio for the 12 month period ending ____________ ___, 20___, is ___:1.0, which ratio [is/is not] greater than or equal to the ratio set forth in Section 7(b) of the Credit Agreement for the corresponding period.

SCHEDULE 5

Financial Covenants (Capital Expenditures)

EXHIBIT G

FORM OF INTERCOMPANY NOTE


Note Number:		Dated: , 202

FOR VALUE RECEIVED, Pioneer Energy Services Corp. (“Borrower”) and certain Subsidiaries of Borrower (collectively, and together with the Borrower, the “Group Members” and each, a “Group Member”) which is a party to this subordinated intercompany note (this “Note”) promises to pay to the order of such other Group Member as it makes loans to such Group Member (each Group Member which borrows money pursuant to this Note is referred to herein as a “Payor” and each Group Member which makes loans and advances pursuant to this Note is referred to herein as a “Payee”), on demand, in lawful money as may be agreed upon from time to time by the relevant Payor and Payee, in immediately available funds and at the appropriate office of the Payee, the aggregate unpaid principal amount of all loans and advances heretofore and hereafter made by such Payee to such Payor and any other Indebtedness now or hereafter owing by such Payor to such Payee as shown either on Schedule A attached hereto (and any continuation thereof) or in the books and records of such Payee. The failure to show any such Indebtedness or any error in showing such Indebtedness shall not affect the obligations of any Payor hereunder. Capitalized terms used herein but not otherwise defined herein shall have the meanings given such terms in the Credit Agreement dated as of May 29, 2020 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”), by and among Borrower, the Subsidiaries of Borrower identified on the signature pages thereto, the Lenders party thereto from time to time, PNC Bank, National Association, as Administrative Agent for the Lenders (the “Administrative Agent”), PNC Bank, National Association, as sole lead arranger and PNC Bank, National Association, as sole book runner.

The unpaid principal amount hereof from time to time outstanding shall bear interest at a rate equal to the rate as may be agreed upon in writing from time to time by the relevant Payor and Payee. Subject to the provisions of the Loan Documents, interest shall be due and payable at such times as may be agreed upon from time to time by the relevant Payor and Payee. Subject to the provisions of the Loan Documents, upon demand for payment of any principal amount hereof, accrued but unpaid interest on such principal amount shall also be due and payable. Interest shall be paid in any lawful currency as may be agreed upon by the relevant Payor and Payee and in immediately available funds. Interest shall be computed for the actual number of days elapsed on the basis of a year consisting of 365 days.

Each Payor and any endorser of this Note hereby waives presentment, demand, protest and notice of any kind. No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.

This Note has been pledged by each Payee that is a Loan Party to the Administrative Agent, for the benefit of the Secured Parties, as security for such Payee’s obligations, if any, under the Loan Documents to which such Payee is a party. Each Payor acknowledges and agrees that after the occurrence of and during the continuation of an Event of Default (as defined in the Credit Agreement), the Administrative Agent and the other Secured Parties may exercise all the rights of each Payee that is a Loan Party under this Note and will not be subject to any abatement, reduction, recoupment, defense, setoff or counterclaim available to such Payor.

Each Payee agrees that any and all claims of such Payee against any Payor that is a Loan Party or any endorser of this Note, or against any of their respective properties, shall be subordinate and subject in right of payment to the Secured Obligations (as defined in the Guaranty and Security Agreement) until all of the Secured Obligations have been performed and paid in full (other than contingent indemnification obligations not due and payable) and all commitments to extend credit under any Loan Document have been terminated; provided, that, subject to the provisions of the Loan Documents, each Payor may make payments to the applicable Payee so long as no Event of Default shall have occurred and be continuing; and provided, further, that all loans and advances made by a Payee pursuant to this Note shall be received by the applicable Payor subject to the provisions of the Loan Documents. Notwithstanding any right of any Payee to ask, demand, sue for, take or receive any payment from any Payor, all rights, Liens and security interests of such Payee, whether now or hereafter arising and howsoever existing, in any assets of any Payor (whether constituting part of the security or collateral given to any Secured Party to secure payment of all or any part of the Secured Obligations or otherwise) shall be and hereby are subordinated to the rights of the Secured Parties in such assets. Except as expressly permitted by the Loan Documents, the Payees shall have no right to possession of any such asset or to foreclose upon, or exercise any other remedy in respect of, any such asset, whether by judicial action or otherwise, unless and until all of the Secured Obligations shall have been performed and paid in full (other than contingent indemnification obligations not due and payable) and all commitments have been expired or terminated.

After the occurrence of and during the continuation of an Event of Default, if all or any part of the assets of any Payor, or the proceeds thereof, are subject to any distribution, division or application to the creditors of any Payor, whether partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or if the business of any Payor is dissolved or if (except as expressly permitted by the Loan Documents) all or substantially all of the assets of any Payor are sold, then, and in any such event, any payment or distribution of any kind or character, whether in cash, securities or other investment property, or otherwise, which shall be payable or deliverable upon or with respect to any indebtedness of such Payor to any Payee (“Payor Indebtedness”) shall be paid or delivered directly to the Administrative Agent for application to any of the Secured Obligations, due or to become due, until the date on which the Secured Obligations shall have been performed and paid in full (other than contingent indemnification obligations which are not due and payable and which by their terms survive the termination or expiration of the Credit Agreement and the other Loan Documents). After the occurrence of and during the continuation of an Event of Default, each Payee that is a Loan Party irrevocably authorizes, empowers and appoints the Administrative Agent as such Payee’s attorney-in-fact (which appointment is coupled with an interest and is irrevocable) to demand, sue for, collect and receive every such payment or distribution and give acquittance therefor and to make and present for and on behalf of such Payee such proofs of claim and take such other action, in the Administrative Agent’s own names or in the name of such Payee or otherwise, as the Administrative Agent may deem necessary or advisable for the enforcement of this Note. After the occurrence of and during the continuation of an Event of Default, each Payee that is a Loan Party also agrees to execute, verify, deliver and file any such proofs of claim in respect of the Payor

Indebtedness requested by the Administrative Agent. After the occurrence of and during the continuation of an Event of Default, the Administrative Agent may vote such proofs of claim in any such proceeding (and the applicable Payee shall not be entitled to withdraw such vote), receive and collect any and all dividends or other payments or disbursements made on Payor Indebtedness in whatever form the same may be paid or issued and apply the same on account of any of the Secured Obligations in accordance with the Credit Agreement. Upon the occurrence and during the continuation of any Event of Default, should any payment, distribution, security or other investment property or instrument or any proceeds thereof be received by any Payee that is a Loan Party upon or with respect to Payor Indebtedness owing to such Payee prior to such time as the Secured Obligations have been performed and paid in full (other than contingent indemnification obligations which are not due and payable and which by their terms survive the termination or expiration of the Credit Agreement and the other Loan Documents), such Payee that is a Loan Party shall receive and hold the same for the benefit of the Secured Parties, and shall forthwith deliver the same to the Administrative Agent, for the benefit of the Secured Parties, in precisely the form received (except for the endorsement or assignment of such Payee where necessary or advisable in the Administrative Agent’s judgment), for application to any of the Secured Obligations in accordance with the Credit Agreement, due or not due, and, until so delivered, the same shall be segregated from the other assets of such Payee for the benefit of the Secured Parties. Upon the occurrence and during the continuance of an Event of Default, if such Payee fails to make any such endorsement or assignment to the Administrative Agent, the Administrative Agent or any of its officers, employees or representatives are hereby irrevocably authorized to make the same. Each Payee that is a Loan Party agrees that until the Secured Obligations have been performed and paid in full (other than contingent indemnification obligations which are not due and payable and which by their terms survive the termination or expiration of the Credit Agreement and the other Loan Documents), such Payee will not (i) assign or transfer, or agree to assign or transfer, to any Person (other than in favor of the Administrative Agent for the benefit of the Secured Parties pursuant to the Guaranty and Security Agreement or otherwise) any claim such Payee has or may have against any Payor, (ii) upon the occurrence and during the continuance of an Event of Default, discount or extend the time for payment of any Payor Indebtedness, or (iii) otherwise amend, modify, supplement, waive or fails to enforce any provision of this Note.

The Secured Parties shall be third party beneficiaries hereof and shall be entitled to enforce the subordination and other provisions hereof.

Notwithstanding anything to the contrary contained herein, in any other Loan Document or in any such promissory note or other instrument, this Note shall not be deemed replaced, superseded or in any way modified by any promissory note or other instrument entered into on or after the date hereof which purports to create or evidence any loan or advance by any Group Member to any other Group Member.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE OF NEW YORK.

Upon execution and delivery after the date hereof by any Subsidiary of any Group Member of a counterpart signature hereto, such subsidiary shall become a Group Member hereunder with the same force and effect as if originally named as a Group Member hereunder (each additional Subsidiary, an “Additional Group Member”). Each Group Member expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Group Member hereunder. This Note shall be fully effective as to any Additional Group Member that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Group Member hereunder.

This Note may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, each Group Member has caused this Note to be executed and delivered by its proper and duly authorized officer as of the date set forth above.


PIONEER ENERGY SERVICES CORP.



By:


Name:
Title:

PIONEER DRILLING SERVICES, LTD. PIONEER GLOBAL HOLDINGS, INC. PIONEER PRODUCTION SERVICES, INC. PIONEER WIRELINE SERVICES HOLDINGS, INC.
PIONEER WIRELINE SERVICES, LLC PIONEER WELL SERVICES, LLC PIONEER FISHING & RENTAL SERVICES, LLC
PIONEER COILED TUBING SERVICES, LLC



By:


Name:
Title:

Schedule A

TRANSACTIONS UNDER PROMISSORY NOTE

Date

Name of
Payor

Name of
Payee

Amount of
Advance
This Date

Amount of
Principal
Paid This
Date

Outstanding
Principal
Balance
from Payor
to Payee
This Date

Notation
Made By

ENDORSEMENT

FOR VALUE RECEIVED, each of the undersigned does hereby sell, assign and transfer to all of its right, title and interest in and to the Intercompany Note, dated , 202_ (as amended, supplemented or otherwise modified from time to time, the “Note”), made by PIONEER ENERGY SERVICES CORP. (the “Borrower”) and certain Subsidiaries of the Borrower or any other Person that is or becomes a party thereto, and payable to the undersigned. This endorsement is intended to be attached to the Note and, when so attached, shall constitute an endorsement thereof.

The initial undersigned shall be the Payees (as defined in the Note) party to the Loan Documents on the date of the Note. From time to time after the date thereof, Additional Group Members (as defined in the Note) may become parties to the Note. Upon execution and delivery of a counterpart signature page to this endorsement, each Additional Group Member that is a Payee under the Note (each, an “Additional Payee”) shall be as fully a signatory to this endorsement as if such Additional Payee were an original signatory hereof. Each Payee expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Payee under the Note or hereunder. This endorsement shall be fully effective as to any Additional Payee that is or becomes a signatory hereto regardless of whether any other Person becomes or fails to become or ceases to be a Payee to the Note or hereunder.

Dated: ___________


PIONEER ENERGY SERVICES CORP.



By:
Name:
Title:


[NAME OF EACH GUARANTOR]



By:
Name:
Title:

EXHIBIT J-1

[FORM OF] JOINDER AGREEMENT

This JOINDER AGREEMENT (this “Agreement”), is entered into as of __________, 20__, by and among ___________, a ________ (“New Borrower”), and PNC BANK, NATIONAL ASSOCIATION, a national banking association (“PNC”), as agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, “Agent”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Credit Agreement, dated as of May 29, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), by and among PIONEER ENERGY SERVICES CORP., a Delaware corporation (“Parent”), PIONEER DRILLING SERVICES, LTD., a Texas corporation (“ Drilling”), PIONEER GLOBAL HOLDINGS, INC., a Delaware corporation (“Global”), PIONEER PRODUCTION SERVICES, INC., a Delaware corporation (“Production”), PIONEER WIRELINE SERVICES HOLDINGS, INC., a Delaware corporation (“Wireline Holdings”), PIONEER WIRELINE SERVICES, LLC, a Delaware limited liability company (“Wireline”), PIONEER WELL SERVICES, LLC, a Delaware limited liability company (“Well Services”), PIONEER FISHING & RENTAL SERVICES, LLC, a Delaware limited liability company (“Fishing & Rental”), PIONEER COILED TUBING SERVICES, LLC, a Delaware limited liability company (“Coiled Tubing”; together with Parent, Drilling, Global, Production, Wireline Holdings, Wireline, Well Services, Fishing & Rental and those additional entities that hereafter become parties to the Credit Agreement as Borrowers in accordance with the terms thereof, each, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”), the lenders party thereto as “Lenders” (each of such Lenders, together with its successors and assigns, is referred to hereinafter as a “Lender”), Agent, PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole lead arranger (in such capacity, together with its successors and assigns in such capacity, the “Sole Lead Arranger”), and PNC BANK, NATIONAL ASSOCIATION, a national banking association, as sole book runner (in such capacity, together with its successors and assigns in such capacity, the “Sole Book Runner”), the Lender Group has agreed to make or issue Loans, Letters of Credit and other certain financial accommodations thereunder;

WHEREAS, initially capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Credit Agreement;

WHEREAS, pursuant to that certain Intercompany Subordination Agreement, dated as of May 29, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercompany Subordination Agreement”), by and among Parent and each of Parent’s Subsidiaries listed on the signature pages hereto as an obligor (such Subsidiaries, together with Parent, are referred to hereinafter each individually as a “Obligor”, and individually and collectively, jointly and severally, as “Obligors”) and Agent, each Obligor has agreed to the subordination of indebtedness of each other Obligor owed to such Obligor on the terms set forth therein;

WHEREAS, pursuant to that certain Fee Letter, dated as of February 29, 2020 (as amended, restated, supplemented or otherwise modified from time to the, the “Fee Letter”), by and among Borrowers and Agent, each Borrower has agreed to pay certain fees to Agent on the terms set forth therein;

WHEREAS, New Borrower is required to become a party to the Credit Agreement by, among other things, executing and delivering this Agreement to Agent; and

WHEREAS, New Borrower has determined that the execution, delivery and performance of this Agreement directly benefit, and are within the corporate purposes and in the best interests of, New Borrower, by virtue of the financial accommodations available to New Borrower from time to time pursuant to the terms and conditions of the Credit Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each of the parties hereto hereby agrees as follow:

1. Joinder of New Borrower to the Credit Agreement. By its execution of this Agreement, New Borrower hereby (a) agrees that from and after the date of this Agreement it shall be a party to the Credit Agreement as a “Borrower” and shall be bound by all of the terms, conditions, covenants, agreements and obligations set forth in the Credit Agreement, (b) accepts joint and several liability for the Obligations pursuant to the terms of the Loan Documents, and (c) confirms that, after giving effect to the supplement to the Schedules to the Credit Agreement provided for in Section 2 below, the representations and warranties contained in Section 4 of the Credit Agreement are true and correct as they relate to New Borrower as of the date this Agreement. New Borrower hereby agrees that each reference to a “Borrower” or the “Borrowers” in the Credit Agreement and the other Loan Documents shall include New Borrower. New Borrower acknowledges that it has received a copy of the Credit Agreement and the other Loan Documents and that it has read and understands the terms thereof.

2. Updated Schedules. Attached as Exhibit A hereto are updated copies of each of Schedule 4.1(b) and Schedule 4.1(c)⁴ to the Credit Agreement revised to include all information required to be provided therein including information with respect to New Borrower. Each such Schedule shall be attached to the Credit Agreement, and on and after the date hereof all references in any Loan Document to any such Schedule to the Credit Agreement shall mean such Schedule as so amended; provided, that any use of the term “as of the date hereof” or any term of similar import, in any provision of the Credit Agreement relating to New Borrower or any of the information amended by such Schedule hereby, shall be deemed to refer to the date of this Agreement.

⁴	Include any additional Schedules to be updated as well.

3. Joinder of New Borrower to the Intercompany Subordination Agreement. By its execution of this Agreement, New Borrower hereby (a) agrees that from and after the date of this Agreement it shall be an Obligor under the Intercompany Subordination Agreement as if it were a signatory thereto and shall be bound by all of the provisions thereof, and (b) agrees that it shall comply with and be subject to all the terms, conditions, covenants, agreements and obligations set forth in the Intercompany Subordination Agreement. New Borrower hereby agrees that each reference to an “Obligor” or the “Obligors” in the Intercompany Subordination Agreement shall include New Borrower. New Borrower acknowledges that it has received a copy of the Intercompany Subordination Agreement and that it has read and understands the terms thereof.

4. Joinder of New Borrower to the Fee Letter. By its execution of this Agreement, New Borrower hereby (a) agrees that from and after the date of this Agreement it shall be a “Borrower” party to the Fee Letter as if it were a signatory thereto and shall be bound by all of the provisions thereof, and (b) agrees that it shall comply with and be subject to all of the terms, conditions, covenants, agreements and obligations set forth in the Fee Letter applicable to Borrowers. New Borrower hereby agrees that each reference to “Borrower” or “Borrowers” in the Fee Letter shall include New Borrower. New Borrower acknowledges that it has received a copy of the Fee Letter and that it has read and understands the terms thereof.

5. Representations and Warranties of New Borrower. New Borrower hereby represents and warrants to Agent for the benefit of the Lender Group and the Bank Product Providers as follows:

(a) It (i) is duly organized and existing and in good standing under the laws of the jurisdiction of its organization, (ii) is qualified to do business in any state where the failure to be so qualified could reasonably be expected to result in a Material Adverse Effect, and (iii) has all requisite power and authority to own and operate its properties, to carry on its business as now conducted and as proposed to be conducted, to enter into this Agreement and the other Loan Documents to which it is made a party and to carry out the transactions contemplated hereby and thereby.

(b) The execution, delivery, and performance by it of this Agreement and any other Loan Document to which New Borrower is made a party (i) have been duly authorized by all necessary action on the part of New Borrower and (ii) do not and will not (A) violate any material provision of federal, state, or local law or regulation applicable to New Borrower or its Subsidiaries, the Governing Documents of New Borrower or its Subsidiaries, or any order, judgment, or decree of any court or other Governmental Authority binding on New Borrower or its Subsidiaries, (B) conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any material agreement of New Borrower or its Subsidiaries where any such conflict, breach or default could individually or in the aggregate reasonably be expected to have a Material Adverse Effect, (C) result in or require the creation or imposition of any Lien of any nature whatsoever upon any assets of New Borrower, other than Permitted Liens, (D) require any approval of New Borrower’s interestholders or any approval or consent of any Person under any material agreement of New Borrower, other than consents or approvals that have been obtained and that are still in force and effect and except, in the case of material agreements, for consents or approvals, the failure to obtain could not individually or in the aggregate reasonably be expected to cause a Material Adverse Effect, or (E) require any registration with, consent, or approval of, or notice to or other action with or by, any Governmental Authority, other than registrations, consents, approvals, notices, or other actions that have been obtained and that are still in force and effect, and except for filings and recordings with respect to the Collateral to be made, or otherwise delivered to Agent for filing or recordation.

(c) This Agreement and each Loan Document to which New Borrower is a party is the legally valid and binding obligation of New Borrower, enforceable against New Borrower in accordance with its respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors’ rights generally.

(d) Each other representation and warranty applicable to New Borrower as a Borrower under the Loan Documents is true, correct and complete, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on such date (except to the extent that such representations and warranties relate solely to an earlier date).

6. Additional Requirements. Concurrent with the execution and delivery of this Agreement, Agent shall have received the following, each in form and substance satisfactory to Agent:

(a) a Joinder No. __ to the Guaranty and Security Agreement, dated as of the date hereof, by and among New Borrower and Agent (“Joinder No. __”), together with the original Equity Interest certificates, if any, representing all of the Equity Interests of the Subsidiaries of New Borrower required to be pledged under the Guaranty and Security Agreement and any original promissory notes of New Borrower, accompanied by undated Equity Interest powers/transfer forms executed in blank, and the same shall be in full force and effect;

(b) a Pledged Interests Addendum by __________, a _________, dated as of the date hereof, with respect to the pledge of Equity Interest of New Borrower, owned by _______, together with the original stock certificates (subject to the Term Loan Intercreditor Agreement), if any, representing all of the Equity Interests of New Borrower held by ________, accompanied by undated stock powers executed in blank and other proper instruments of transfer, and the same shall be in full force and effect;

(c) appropriate financing statement to be filed in the office of the _______ Secretary of State against New Borrower to perfect the Agent’s Liens in and to the Collateral of New Borrower;

(d) a certificate from the Secretary of New Borrower, dated as of the date hereof, (i) attesting to the resolutions of New Borrower’s [Board of Directors][Managers] authorizing its execution, delivery, and performance of this Agreement and the other Loan Documents to which New Borrower is or will become a party, (ii) authorizing officers of New Borrower to execute the same, and (iii) attesting to the incumbency and signatures of such specific officers of New Borrower;

(e) a certificate of status with respect to New Borrower, dated as of a recent date, such certificate to be issued by the appropriate officer of the jurisdiction of organization of New Borrower, which certificate shall indicate that New Borrower is in good standing in such jurisdiction;

(f) certificates of status with respect to New Borrower, dated as of a recent date, such certificates to be issued by the appropriate officer of the jurisdictions (other than the jurisdiction of organization of New Borrower) in which the failure to be duly qualified or licensed would constitute a Material Adverse Effect, which certificates shall indicate that New Borrower is in good standing in such jurisdictions;

(g) copies of New Borrower’s Governing Documents, as amended, modified or supplemented to the date hereof, certified by the Secretary of New Borrower; and

(h) evidence that New Borrower has been added to the Loan Parties’ existing insurance policies required by Section 5.6 of the Credit Agreement;

(i) a customary opinion of counsel regarding such matters as to New Borrower as Agent or its counsel may reasonably request, and which is otherwise in form and substance reasonably satisfactory to Agent (it being understood that such opinion shall be limited to this Agreement, and the documents executed or delivered in connection herewith (including the financing statement filed against New Borrower); and

(j) such other agreements, instruments, approvals or other documents reasonably requested by Agent prior to the date hereof in order to create, perfect and establish the first priority of, or otherwise protect, any Lien purported to be covered by any Loan Document or otherwise to effect the intent that New Borrower shall become bound by all of the terms, covenants and agreements contained in the Loan Documents and that, to the extent set forth in the Credit Agreement and the Guaranty and Security Agreement, all property and assets of New Borrower shall become Collateral for the Obligations.

7. Further Assurances. At any time upon the reasonable request of Agent, New Borrower shall promptly execute and deliver to Agent such Additional Documents as Agent shall reasonably request pursuant to the Credit Agreement and the other Loan Documents, in each case in form and substance reasonably satisfactory to Agent.

8. Notices. Notices to New Borrower shall be given in the manner set forth for Borrowers in Section 11 of the Credit Agreement.

9. Choice of Law and Venue; Jury Trial Waiver; Judicial Reference. THIS AGREEMENT SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS.

10. Binding Effect. This Agreement shall be binding upon New Borrower, and the other Loan Parties and shall inure to the benefit of the Agent and the Lenders, together with their respective successors and permitted assigns.

11. Effect on Loan Documents.

(a) Except as contemplated to be supplemented hereby, the Credit Agreement, the Fee Letter, the Intercompany Subordination Agreement and each other Loan Document shall continue to be, and shall remain, in full force and effect. Except as expressly contemplated hereby, this Agreement shall not be deemed (i) to be a waiver of, or consent to, or a modification or amendment of any other term or condition of the Credit Agreement, the Fee Letter, the Intercompany Subordination Agreement or any of the instruments or agreements referred to therein, as the same may be amended or modified from time to time.

(b) Each reference in the Credit Agreement and the other Loan Documents to “Borrower”, “Obligor” or words of like import referring to a Borrower or an Obligor shall include and refer to New Borrower and (b) each reference in the Credit Agreement, the Fee Letter, Intercompany Subordination Agreement or any other Loan Document to this “Agreement”, “hereunder”, “herein”, “hereof”, “thereunder”, “therein”, “thereof”, or words of like import referring to the Credit Agreement, the Fee Letter, Intercompany Subordination Agreement or any other Loan Document shall mean and refer to such agreement as supplemented by this Agreement.

12. Miscellaneous

(a) This Agreement is a Loan Document. This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, taken together, shall constitute but one and the same Agreement. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic image scan transmission (e.g., “PDF” or “tif” via email) shall be equally effective as delivery of an original executed counterpart of this Agreement. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic image scan transmission also shall deliver an original executed counterpart of this Agreement but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.

(b) Any provision of this Agreement which is prohibited or unenforceable shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in that jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction. Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

(c) Headings and numbers have been set forth herein for convenience only. Unless the contrary is compelled by the context, everything contained in each Section applies equally to this entire Agreement.

(d) Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against any member of the Lender Group or New Borrower, whether under any rule of construction or otherwise. This Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

(e) The pronouns used herein shall include, when appropriate, either gender and both singular and plural, and the grammatical construction of sentences shall conform thereto.

(f) This Agreement shall be subject to the rules of construction set forth in Section 1.4 of the Credit Agreement, and such rules of construction are incorporated herein by this reference, mutatis mutandis.

[remainder of this page intentionally left blank].

IN WITNESS WHEREOF, New Borrower and Agent have caused this Agreement to be duly executed by its authorized officer as of the day and year first above written.


NEW BORROWER:		,
		a



		By:


		Name:


		Title:

AGENT:

PNC BANK, NATIONAL ASSOCIATION, a

national banking association



		By:


		Name:


		Title:

Exhibit A

EXHIBIT L-1

FORM OF LIBOR NOTICE

PNC Bank, National Association, as Agent

under the below referenced Credit Agreement

2100 Ross Avenue, Suite 1850

Dallas, TX 75201

Attn: Relationship Manager – Pioneer

Telephone: (214) 871-1253

Facsimile: (214) 871-2015

Email: anita.puligandla@pnc.com

Ladies and Gentlemen:

This LIBOR Notice represents Borrowers’ request to elect the LIBOR Option with respect to outstanding Revolving Loans in the amount of $________ (the “LIBOR Rate Advance”)[, and is a written confirmation of the telephonic notice of such election given to Agent].

The LIBOR Rate Advance will have an Interest Period of [1, 2, or 3] month(s) commencing on _____________________.

This LIBOR Notice further confirms Borrowers’ acceptance, for purposes of determining the rate of interest based on the LIBOR Rate as determined pursuant to the Credit Agreement.

Administrative Borrower represents and warrants that [(i) as of the date hereof, the representations and warranties of Parent or its Subsidiaries contained in the Credit Agreement and in the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date hereof, as though made on and as of such date (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date)) and (ii)]⁵ no Default or Event of Default has occurred and is continuing on the date hereof, nor will any thereof occur after giving effect to the request above.

[Signature page follows]

⁵	Only required in connection with new borrowings.


Dated:



PIONEER ENERGY SERVICES CORP.,
a Delaware corporation, as Administrative Borrower



By:


Name:


Title:

Acknowledged by:



PNC BANK, NATIONAL ASSOCIATION, a
national banking association, as Agent



By


Name:


Title:

SCHEDULE 4.1(b)

CAPITALIZATION OF BORROWERS

SCHEDULE 4.1(c)

CAPITALIZATION OF BORROWERS’ SUBSIDIARIES

EXHIBIT P-1

FORM OF PERFECTION CERTIFICATE

Reference is hereby made to (1) that certain Credit Agreement, dated as of May 29, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the “Credit Agreement”), by and among Pioneer Energy Services Corp., a Delaware corporation (“Parent”) and the Subsidiaries of Parent identified on the signature pages thereof as “Borrowers”, and those additional entities that become parties thereto as Borrowers in accordance with the terms thereof by executing the form of Joinder attached thereto as Exhibit J-l (each, together with Parent, a “Borrower” and individually and collectively, jointly and severally, the “Borrowers”), the lenders identified on the signature pages thereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a “Lender” and, collectively, the “Lenders”). PNC Bank, National Association, a national banking association (“PNC”), as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity “Agent”). PNC as sole lead arranger and PNC as sole book runner, and (2) that certain Guaranty and Security Agreement dated as of May 29, 2020 (as amended, restated, supplemented, or otherwise modified from time to time, the “Guaranty and Security Agreement”) by and among Parent, Borrowers and the Subsidiaries of Borrowers party thereto (each, a “Grantor” and collectively, the “Grantors”), and Agent.

Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the Credit Agreement. Any terms (whether capitalized or lower case) used in this Perfection Certificate that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Credit Agreement; provided that to the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern. As used herein, the term “Loan Parties” shall mean the “Loan Parties” as that term is defined in the Credit Agreement and “Code” shall mean the “Code” as that term is defined in the Guaranty and Security Agreement.

The undersigned, the ______ of ______, hereby certifies (in my capacity as ______ and not in my individual capacity) to Agent and each of the other members of the Lender Group and the Bank Product Providers as follows as of ______ __, 20__:

1. Names.

(a) The exact legal name of each Loan Party, as such name appears in its certified certificate of incorporation, articles of incorporation, certificate of formation, or any other organizational document, is set forth in Schedule 1(a). Each Loan Party is a. the type of entity disclosed next to its name in Schedule 1(a) and b. a registered organization except to the extent disclosed in Schedule 1(a). Also set forth in Schedule 1(a) is the organizational identification number, if any, of each Loan Party that is a registered organization, the Federal Taxpayer Identification Number of each Loan Party and the jurisdiction of formation of each Loan Party. Each Loan Party has qualified to do business and is in good standing in the states listed on Schedule 1(a).

(b) Set forth in Schedule 1(b) hereto is a list of any other legal names each Loan Party has had in the past five years, together with the date of the relevant name change.

(c) Set forth in Schedule 1(c) is a list of all other names used by each Loan Party in connection with any business or organization to which such Loan Party became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise or on any filings with the Internal Revenue Service, in each case, at any time in the past five years. Except as set forth in Schedule 1(c), no Loan Party has changed its jurisdiction of organization at any time during the past four months.

2. Chief Executive Offices and Other Collateral Locations. The chief executive office of each Loan Party is located at the address set forth in Schedule 2 hereto, and except as otherwise listed, such chief executive office has not been located at any other address during the past five (5) years. Schedule 2 hereto sets forth all of the locations where each Loan Party maintains (or within the past four months has maintained) any equipment, inventory or other tangible personal property.

3. Real Property.

(a) Attached hereto as Schedule 3(a) is a list of all a. Real Property (as defined in the Guaranty and Security Agreement) of each Loan Party, b. filing offices for any mortgages encumbering the Real Property or to encumber, the Real Property as of the Closing Date, c. common names, addresses and uses of each parcel of Real Property (stating improvements located thereon) and d. other information relating thereto required by such Schedule. Except as described on Schedule 3(a) attached hereto: (A) no Loan Party has entered into any leases, subleases, tenancies, franchise agreements, licenses or other occupancy arrangements as owner, lessor, sublessor, licensor, franchisor or grantor with respect to any of the real property described on Schedule 3(a) and (B) no Loan Party has any leases which require the consent of the landlord, tenant or other party thereto to the transactions contemplated by the Loan Documents.

(b) Schedule 3(b) sets forth all third parties (“Bailees”) with possession of any Collateral (including inventory and equipment) of the Loan Parties, including the name and address of such Bailee, a description of the inventory and equipment in such Bailee’s possession and the location of such inventory and equipment (if none please so state). Schedule 3(b) also identifies whether such third party is a consignee, processor, warehouseman, freight forwarder/customs broker or other type of bailee.

4. Extraordinary Transactions. Schedule 4 attached hereto describes any acquisitions by a Loan Party of the businesses or assets of a Person outside the ordinary course of business during the five years preceding the Closing Date. Except for those purchases, mergers, acquisitions, consolidations, and other transactions described on Schedule 4 attached hereto during the preceding five year period, all of the Collateral has been originated by each Loan Party in the ordinary course of business or consists of goods which have been acquired by such Loan Party in the ordinary course of business from a person in the business of selling goods of that kind.

5. Stock Ownership and Other Equity Interests. Attached hereto as Schedule 5(a) is a true and correct list of each of all of the authorized, and the issued and outstanding, Equity Interests of each Loan Party and its Subsidiaries and the record and beneficial owners of such Equity Interests. Also set forth on Schedule 5(a) is each equity investment of each Loan Party that represents 50% or less of the equity of the entity in which such investment was made. Attached hereto as Schedule 5(b) is a true and correct organizational chart of Parent and its Subsidiaries.

6. Instruments and Chattel Paper. Attached hereto as Schedule 6 is a true and correct list of all promissory notes, instruments (other than checks to be deposited in the ordinary course of business), tangible chattel paper, electronic chattel paper and other evidence of Indebtedness held by each Loan Party as of ______ __, 20__ having an aggregate value or face amount in excess of $250,000, including all intercompany notes between or among any two or more Loan Parties or any of their Subsidiaries.

7. Intellectual Property.

(a) Schedule 7(a) provides a complete and correct list of all registered Copyrights (as defined in the Guaranty and Security Agreement) owned by any Loan Party, all applications for registration of Copyrights owned by any Loan Party, and all other Copyrights owned by any Loan Party and material to the conduct of the business of any Loan Party. Schedule 7(a) provides a complete and correct list of all Patents (as defined in the Guaranty and Security Agreement) owned by any Loan Party and all applications for Patents owned by any Loan Party. Schedule 7(a) provides a complete and correct list of all registered Trademarks (as defined in the Guaranty and Security Agreement) owned by any Loan Party, all applications for registration of Trademarks owned by any Loan Party, and all other Trademarks owned by any Loan Party and material to the conduct of the business of any Loan Party.

(b) Schedule 7(b) provides a complete and correct list of all Intellectual Property Licenses (as defined in the Guaranty and Security Agreement) entered into by any Loan Party pursuant to which a. any Loan Party has provided any license or other rights in Intellectual Property (as defined in the Guaranty and Security Agreement) owned or controlled by such Loan Party to any other Person (other than non-exclusive software licenses or “SaaS” usage rights granted in the ordinary course of business) or b. any Person has granted to any Loan Party any license or other rights in Intellectual Property owned or controlled by such Person that is material to the business of such Loan Party, including any Intellectual Property that is incorporated in any Inventory, software, or other product marketed, sold, licensed, or distributed by such Loan Party;

8. Commercial Tort Claims. Attached hereto as Schedule 8 is a true and correct list of all commercial tort claims that exceed $250,000 held by each Loan Party, including a brief description thereof.

9. Deposit Accounts and Securities Accounts. Attached hereto as Schedule 9 is a true and complete list of all Deposit Accounts and Securities Accounts (each as defined in the Guaranty and Security Agreement) maintained by each Loan Party, including the name of each institution where each such account is held, the name of each such account and the name of each entity that holds each account.

10. Letter-of-Credit Rights. Attached hereto as Schedule 10 is a true and correct list of all letters of credit issued in favor of any Loan Party, as beneficiary thereunder.

11. Motor Vehicles. Attached hereto as Schedule 11 is a true and correct list of all motor vehicles and other goods (covered by certificates of title or ownership) and the owner and approximate fair market value of such motor vehicles.

12. Other Assets: A Loan Party owns the following kinds of assets:


Aircraft:	Yes ___	No ___

Vessels, boats or ships:	Yes ___	No ___

Railroad rolling stock:	Yes ___	No ___

If the answer is yes to any of these other types of assets, please describe on Schedule 12.

[The Remainder of this Page has been intentionally left blank]

IN WITNESS WHEREOF we have hereunto signed this Perfection Certificate as of this ____ day of ______ __, 20__.


[BORROWERS]



By
		Name:
		Title:

Schedule 1(a)

Legal Names, Etc.

Legal
Name

Type of
Entity

Registered
Organization
(Yes/No)

Organizational
Number

Federal
TIN

Jurisdiction
of
Formation

States
Where
Qualified to
do Business

Schedule 1(a) - 1

Schedule 1(b)

Prior Names

Schedule 1(b) - 1

Schedule 1(c)

Changes in Corporate Identity; Other Names


Loan Party/Subsidiary		Action		Date of Action		State of Formation		List of All Other Names Used on Any Filings with the Internal Revenue Service During Past Five Years

Schedule 1(c) - 1

Schedule 2

Changes in Corporate Identity; Other Names


Loan Party/Subsidiary		Address

Other Collateral Locations

Schedule 2 - 1

Schedule 3(a)

Real Property

Schedule 3(a) - 1

Schedule 3(a)

Real Property (cont.)

Required Consents; Loan Party Held Landlord/ Grantor Interests

(i) Landlord’s / Tenant’s Consent Required

(ii) Leases, Subleases, Tenancies, Franchise Agreements, Licenses or Other Occupancy Agreements Pursuant to which any Loan Party holds Landlord’s / Grantor’s Interest

Schedule 3(a) - 2

Schedule 3(b)

Bailees

Schedule 3(b) - 1

Schedule 4

Transactions Other Than in the Ordinary Course of Business

Schedule 4

Schedule 5(a)

(a) Equity Interests of Loan Parties and Subsidiaries

Owner

Issuer

Type of
Organization

Class of
Interests

# of Shares
Owned

Percentage
ownership

Percentage
of Class
Pledged

Certificate No. (if
uncertificated
please indicate so)

(b) Other Equity Interests

Schedule 5(a)

Schedule 5(b)

Organizational Chart

Schedule 5(b)

Schedule 6

Instruments and Chattel Paper

1.	Promissory Notes:


Borrower		Holder		Principal Amount		Date of Issuance		Interest Rate		Maturity Date

1.	Intercompany Notes:


Debtor/Grantor		Issuer of Instrument		Principal Amount of Instrument		Maturity Date

Schedule 6

Schedule 7(a)

Copyrights, Patents and Trademarks

UNITED STATES COPYRIGHTS

OTHER COPYRIGHTS

Schedule 7(a)

Schedule 7(a)

Copyrights, Patents and Trademarks (cont.)

UNITED STATES PATENTS:

Applications:


Debtor/Grantor		Title		Filing Date/Issued Date		Status		Application/ Registration No.

Schedule 7(a)

Schedule 7(a)

Copyrights, Patents and Trademarks (cont.)

UNITED STATES TRADEMARKS:

Schedule 7(a)

Schedule 7(b)

Schedule 7(b)

Schedule 8

Commercial Tort Claims

Schedule 8

Schedule 9

Deposit Accounts and Securities Accounts


Entity		Bank		Account		Account Type

Schedule 9

Schedule 10

Letter of Credit Rights

Schedule 10

Schedule 11

Motor Vehicles

Schedule 11

Schedule 12

Other Assets

Schedule 12

Exhibit 10.2

EXECUTION VERSION

INTERCREDITOR AGREEMENT

Dated as of May 29, 2020

among

PNC Bank, National Association,

as ABL Agent

and

Wilmington Trust, National Association,

as Note Security Agent

and acknowledged and agreed to by

Pioneer Energy Services Corp.,

as the Company

and the other Grantors referred to herein

TABLE OF CONTENTS


		Page
SECTION 1 DEFINITIONS			2

1.1	Defined Terms		2
1.2	Terms Generally		26

SECTION 2 LIEN PRIORITIES			26

2.1	Relative Priorities		26
2.2	Prohibition on Contesting Liens & Claims; No Marshaling		28
2.3	No New Liens		28
2.4	Similar Liens and Agreements		29
2.5	Collateral Differences		30
2.6	Perfection of Liens		30

SECTION 3 ENFORCEMENT			30

3.1	Restrictions on Exercise of Remedies By Term Agent and Term Claimholders		30
3.2	Restrictions on Exercise of Remedies by ABL Agent and ABL Claimholders		34
3.3	Collateral Access Rights		38
3.4	Term General Intangibles Rights/Access to Information		40
3.5	Set-Off and Tracing of and Priorities in Proceeds		41

SECTION 4 PAYMENTS			42

4.1	Application of Proceeds		42
4.2	Payments Over		44

SECTION 5 OTHER AGREEMENTS			45

5.1	Releases		45
5.2	Insurance		47
5.3	Amendments to ABL Loan Documents and Term Loan Documents		48
5.4	Confirmation of Subordination in Subordinated Lien Collateral Documents		49
5.5	Gratuitous Bailee/Agent for Perfection		49
5.6	When Discharge of Obligations Deemed to Not Have Occurred		51

SECTION 6 PURCHASE OPTIONS			53

6.1	Notice of Exercise		53
6.2	Purchase and Sale		54
6.3	Payment of Purchase Price		56
6.4	Limitation on Representations and Warranties		58

SECTION 7 INSOLVENCY OR LIQUIDATION PROCEEDINGS			58

7.1	Finance and Sale Issues		58
7.2	Relief from the Automatic Stay		60


7.3	Adequate Protection	60
7.4	Avoidance Issues	61
7.5	Reorganization Securities	61
7.6	Post-Petition Obligations	62
7.7	Waivers	62
7.8	Separate Grants of Security and Separate Classification	62
7.9	Effectiveness in Insolvency or Liquidation Proceedings	62
7.10	Asset Dispositions	63

SECTION 8 RELIANCE; WAIVERS; ETC.		64

8.1	Reliance	64
8.2	No Warranties or Liability	64
8.3	No Waiver of Lien Priorities	65
8.4	Obligations Unconditional	67

SECTION 9 MISCELLANEOUS		67

9.1	Integration/Conflicts	67
9.2	Effectiveness; Continuing Nature of this Agreement; Severability	67
9.3	Amendments; Waivers	68
9.4	Information Concerning Financial Condition of the Company and its Subsidiaries	68
9.5	Subrogation	69
9.6	Submission to Jurisdiction; Certain Waivers	70
9.7	WAIVER OF JURY TRIAL	71
9.8	Notices	71
9.9	Further Assurances	71
9.10	APPLICABLE LAW	71
9.11	Binding on Successors and Assigns	72
9.12	Headings	72
9.13	Counterparts	72
9.14	Authorization	72
9.15	No Third Party Beneficiaries / Provisions Solely to Define Relative Rights	72
9.16	Certain Terms Concerning Term Agent	73
9.17	Certain Terms Concerning ABL Agent and Term Agent	73
9.18	Authorization of Secured Agents	73
9.19	Relationship of Claimholders	73
9.20	Specific Performance	74
9.21	Additional Grantors	74
9.22	Additional Credit Agreements	74

INTERCREDITOR AGREEMENT

This INTERCREDITOR AGREEMENT (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”), is dated as of May 29, 2020, and entered into by and among PNC Bank, National Association, as agent under the ABL Credit Agreement (as defined below) for the holders of the ABL Obligations (as defined below) (in such capacity, the “ABL Agent”, as more fully defined below), and Wilmington Trust, National Association, as security agent under the Note Indenture (as defined below) for the holders of the Note Obligations (as defined below) (in such capacity, the “Initial Note Security Agent”, as more fully defined below) and acknowledged and agreed to by Pioneer Energy Services Corp. (the “Company”), and the other Grantors (as defined below). Capitalized terms used in this Agreement have the meanings set forth in Section 1 below.

RECITALS

The Company, the other Grantors party thereto, the lenders and agents party thereto, and ABL Agent, have entered into that certain Credit Agreement dated as of the date hereof (the “ABL Credit Agreement”, as more fully defined below);

The Company, certain of its subsidiaries, Wilmington Trust, National Association, as trustee (in such capacity, the “Initial Note Trustee ”, as more fully defined below), and Initial Note Security Agent have entered into that certain Indenture dated as of the date hereof providing for the issuance by the Company of certain senior secured floating rates due 2025 (the “Initial Note Indenture”, as more fully defined below);

The ABL Obligations are to be secured (i) by Liens on the ABL Priority Collateral that are senior to the Liens of the Note Claimholders on the ABL Priority Collateral and (ii) by Liens on the Note Priority Collateral that are junior in priority to the Liens of the Note Claimholders on the Note Priority Collateral;

The Note Obligations are to be secured (i) by Liens on the Note Priority Collateral that are senior to the Liens of the ABL Claimholders on the Note Priority Collateral and (ii) by Liens on the ABL Priority Collateral that are junior in priority to the Liens of the ABL Claimholders on the ABL Priority Collateral;

The ABL Obligations will also be secured by the ABL Exclusive Priority Cash Collateral, which ABL Exclusive Priority Cash Collateral will not secure the Note Obligations, the Note Obligations will also be secured by the Note Specified Blocked Account, which Note Specified Blocked Account will not secure the ABL Obligations, and the Note Obligations may also be secured by the Real Estate Assets, which Real Estate Assets may not secure the ABL Obligations;

The ABL Loan Documents and the Note Documents provide, among other things, that the parties thereto shall set forth in this Agreement their respective rights and remedies with respect to the Collateral; and

In consideration of the foregoing, the mutual covenants and obligations herein set forth and for other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, each of Note Security Agent on behalf of the Note Claimholders and ABL Agent on behalf of the ABL Claimholders, intending to be legally bound, hereby agrees as follows:

AGREEMENT

SECTION 1

DEFINITIONS

1.1 Defined Terms. Each of Accounts, Account Debtor, Chattel Paper, Deposit Accounts, Commercial Tort Claims, Documents, Equipment, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter of Credit, Letter of Credit Rights, Payment Intangibles, Proceeds, Securities and Securities Accounts shall have the meanings set forth in Articles 8 or 9 of the UCC. In addition, as used in this Agreement, the following terms shall have the meanings set forth below. “ABL Agent” means each of (i) ABL Agent as defined in the preamble to this Agreement, and (ii) any new ABL Agent identified by the Company pursuant to Section 5.6(a), in each case, together with any successor(s) thereto in such capacity appointed in accordance with the applicable ABL Loan Documents.

“ABL Bank Product Obligations” means “Bank Product Obligations” as defined in the ABL Credit Agreement as in effect on the date hereof.

“ABL Bank Product Provider” means “Bank Product Provider” as defined in the ABL Credit Agreement as in effect on the date hereof.

“ABL Cap Amount” means (x) the sum of (i) $82,500,000, plus (ii) if the Company or any other ABL Credit Party shall be subject to any Insolvency or Liquidation Proceeding, $7,500,000, minus (y) the amount of all payments in respect of the ABL Principal Obligations under the ABL Credit Agreement that result in a permanent reduction of the revolving credit commitments under the ABL Credit Agreement (other than payments of such revolving loan obligations in connection with a Refinancing thereof pursuant to Section 5.6 hereof and any payments that are rescinded or required to be returned).

“ABL Claimholders” means, at any relevant time, the holders of ABL Obligations or Excess ABL Obligations at that time, including ABL Agent, the ABL Lenders, the ABL Bank Product Providers, issuing bank(s) of letters of credit issued pursuant to the ABL Credit Agreement and the other agents and arrangers under the ABL Loan Documents.

“ABL Collateral Documents” means the Loan Documents (as defined in the ABL Credit Agreement) pursuant to which a Lien is granted by any Grantor securing any ABL Obligations and/or the Excess ABL Obligations or under which rights or remedies with respect to such Liens are governed (other than this Agreement).

“ABL Credit Agreement” means (i) the ABL Credit Agreement as defined in the Recitals to this Agreement, as it may have been or may hereafter be from time to time amended, restated, amended and restated, supplemented, or otherwise modified from time to time in a manner not prohibited by this Agreement, and (ii) any Replacement ABL Credit Agreement under Section 5.6 hereof, as it may be from time to time amended, restated, amended and restated, supplemented, or otherwise modified from time to time in a manner not prohibited by this Agreement.

“ABL Credit Party” means “Borrower,” “Guarantor” or “Loan Party” as defined in the ABL Credit Agreement.

“ABL Declined Liens” has the meaning set forth in Section 2.3.

“ABL Default” means an “Event of Default” as defined in an ABL Credit Agreement or any similar event or condition set forth in any other ABL Loan Document which causes, or permits holders of the applicable ABL Obligations outstanding thereunder to cause, the ABL Obligations outstanding thereunder to become immediately due and payable.

“ABL Direct Interest Obligations” has the meaning set forth in the definition of “ABL Obligations”.

“ABL Excluded Assets” means any assets expressly excluded from the grant of Liens by the Grantors pursuant to the ABL Collateral Documents.

“ABL Exclusive Priority Cash Collateral” has the meaning set forth in Section 2.3.

“ABL Lenders” means the “Lenders” under and as defined in each ABL Credit Agreement.

“ABL Loan Documents” means each ABL Credit Agreement and the Loan Documents (as defined in the applicable ABL Credit Agreement) and each of the other agreements, documents and instruments providing for or evidencing any other ABL Obligation and/or Excess ABL Obligations, and any other document or instrument executed or delivered at any time in connection with any ABL Obligations and/or Excess ABL Obligations, including any intercreditor or joinder agreement among holders of ABL Obligations and/or Excess ABL Obligations, to the extent such are effective at the relevant time, as each may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

“ABL Obligations” means, (a) all principal of the loans made (or deemed made) pursuant to the ABL Credit Agreement and the related ABL Loan Documents, (b) all reimbursement obligations and/or cash collateralization obligations, if any, with respect to any letter of credit or similar instruments issued pursuant to the ABL Credit Agreement and related ABL Loan Documents, (c) all interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges payable by ABL Credit Parties under the ABL Loan Documents and/or ABL Bank Product Obligations, (d) all ABL Bank Product Obligations, and (e) all other obligations and liabilities of any kind owing by ABL Credit Parties pursuant to the ABL Loan Documents and/or ABL Bank Product Obligations (including all “Obligations” as defined in the ABL Credit Agreement as in effect on the date hereof), whether now existing or hereafter arising, whether evidenced by a note or other writing, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including Post-Petition Obligations

with respect to the Obligations described in clauses (a) through (e), whether or not allowed in any Insolvency or Liquidation Proceeding; provided, that the ABL Obligations of an ABL Credit Party shall not include its “Excluded Swap Obligations” (as defined in the ABL Credit Agreement). Notwithstanding the foregoing, if the sum of, without duplication: (1) all Indebtedness for borrowed money constituting principal outstanding at any applicable time under the ABL Credit Agreement and the other ABL Loan Documents (excluding ABL Bank Product Obligations), including any amounts drawn but not reimbursed at such time under any letters of credit or similar instruments issued under the ABL Credit Agreement (whether or not such unreimbursed draws are deemed to constitute loan advances) (including all Capitalized Interest Obligations and Capitalized Other Obligations outstanding under the ABL Credit Agreement and the other ABL Loan Documents); plus (2) the aggregate undrawn face amount of all letters of credit or similar issued and outstanding at such time under the ABL Credit Agreement (all such Obligations under the preceding clauses (1) and (2), collectively the “ABL Principal Obligations”), is in excess of, in the aggregate, the sum of (1) the ABL Cap Amount, plus (2) the amount of all Capitalized Interest Obligations and all Capitalized Other Obligations that have been added to the outstanding principal balance under the ABL Credit Agreement and the other ABL Loan Documents through such time, then (x) only that portion of such ABL Principal Obligations not in excess of such sum (collectively, the “ABL Priority Principal Obligations”) shall be included in ABL Obligations and (y) with respect to any interest, premiums, and fees that directly relate to Indebtedness for borrowed money outstanding under the ABL Loan Documents (including any amounts drawn but not reimbursed under any letters of credit or similar instruments issued under the ABL Credit Agreement (whether or not such unreimbursed draws are deemed to constitute loan advances)) and/or letters of credit outstanding under the ABL Loan Documents (including any interest accruing on any Capitalized Interest Obligations and Capitalized Other Obligations that have been added to the outstanding principal balance under the ABL Credit Agreement and the other ABL Loan Documents) (collectively, the “ABL Direct Interest Obligations”), only that portion of such ABL Direct Interest Obligations with respect to the ABL Priority Principal Obligations shall be included in the ABL Obligations (collectively, the “ABL Priority Interest Obligations”), provided that, for the avoidance of doubt, (A) any and all premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges owing by the ABL Credit Parties pursuant to the ABL Loan Documents/ABL Bank Product Obligations that are not directly related to any particular Indebtedness for borrowed money outstanding under the ABL Loan Documents (including any amounts drawn but not reimbursed under any letters of credit or similar instruments issued under the ABL Credit Agreement (whether or not such unreimbursed draws are deemed to constitute loan advances)) and/or letters of credit or similar instruments outstanding under the ABL Loan Documents and/or ABL Bank Product Obligations (whether or not converted at any time to Capitalized Interest Obligations) shall at all times and under all circumstances be included in the ABL Obligations) and (B) no interest (whether or not converted at any time to Capitalized Interest Obligations) in respect of outstanding principal advances or letter of credit per annum fees (whether or not converted at any time to Capitalized Interest Obligations) that at any time accrues and becomes owing with respect to ABL Principal Obligations outstanding at any time that do not constitute ABL Priority Principal Obligations at such time (nor any further interest accruing on such interest) shall constitute ABL Obligations, ABL Priority Principal Obligations, or ABL Priority Interest Obligations at any time; and provided further that, for purposes of the foregoing calculation, (i) the aggregate principal amount of any such Indebtedness described therein that is denominated in a foreign currency shall

be measured based on the original principal amount of the borrowing thereof, and (ii) the aggregate face amount of any such letters of credit described therein that are denominated in a foreign currency shall be measured based on the original face amount thereof, in each case without giving effect to any foreign currency fluctuations following the date of such incurrence or issuance, as applicable. For avoidance of doubt, and notwithstanding anything to the contrary in the definition of ABL Cap Amount, the term “ABL Obligations” shall, in all circumstances, include, without limitation, all ABL Bank Product Obligations (other than “Excluded Swap Obligations,” as defined in the ABL Credit Agreement).

“ABL Principal Obligations” has the meaning set forth in the definition of “ABL Obligations”.

“ABL Priority Collateral” means the following property of any Grantor (including, for the avoidance of doubt, any such assets that, but for the application of Section 552 of the Bankruptcy Code, would constitute ABL Priority Collateral): (i) Accounts, Chattel Paper and Receivables, in each case other than to the extent constituting identifiable proceeds of Note Priority Collateral; (ii) Deposit Accounts and Securities Accounts (and all cash, checks and other negotiable instruments, funds, other evidences of payment and other assets held therein), other than the Note Priority Collateral Account and the Note Specified Blocked Account; provided that to the extent that identifiable Proceeds of Note Priority Collateral, including, without limitation, identifiable Proceeds from the sale or other disposition of Note Priority Collateral, are deposited in any such Deposit Accounts or Securities Accounts, such identifiable Proceeds shall be treated as Note Priority Collateral; (iii) all Inventory; (iv) to the extent evidencing, governing, securing or otherwise reasonably related to any of the foregoing, all Documents, General Intangibles, Instruments, Investment Property (other than Equity Interests of the Grantors and their Subsidiaries and Affiliates on which a Lien is granted under any Note Documents), Commercial Tort Claims, Letters of Credit, Letter of Credit Rights and Supporting Obligations; provided, however, that to the extent any of the foregoing also evidence, govern, secure or otherwise reasonably relate to any Note Priority Collateral only that portion that evidences, governs, secures or relates to ABL Priority Collateral shall constitute ABL Priority Collateral; provided, further, that the foregoing shall not include any Intellectual Property; (v) 30% of all proceeds of business interruption insurance; (vi) all books, records and documents related to the foregoing (including databases, customer lists and other records, whether tangible or electronic, which contain any information relating to any of the foregoing); and (vii) all Proceeds and products of any or all of the foregoing in whatever form received, including proceeds of insurance and claims against third parties; provided that the ABL Priority Collateral shall not include the ABL Excluded Assets.

“ABL Priority Interest Obligations” has the meaning set forth in the definition of “ABL Obligations”.

“ABL Retained Indemnification Interests” has the meaning set forth in Section 6.2(a).

“ABL Retained Interests” has the meaning set forth in Section 6.2(c).

“ABL Standstill Period” has the meaning set forth in Section 3.1.

“Access Period” means for (i) each Real Estate Asset that is a Mortgaged Premises and any other Note Priority Collateral located thereon and (ii) any applicable Note Priority Collateral constituting Equipment, the period, which begins on the day on which ABL Agent provides Note Security Agent with notice of its exercise of its access rights in accordance with Section 3.3(a) following either (a) delivery by Note Security Agent to ABL Agent of the notice required by Section 3.3(a) that Note Security Agent (or its agent) has either obtained possession or control of such Note Priority Collateral or sold or otherwise disposed of such Note Priority Collateral or (b) delivery of an Enforcement Notice by ABL Agent in accordance with Section 3.3(a), and ends on the earliest of (A) the 180^th day after such date; provided, however, that such 180 day period shall be tolled as to any applicable Real Estate Assets or any applicable Equipment during any period during which ABL Agent is stayed or otherwise prohibited by law or court order from either (x) exercising its rights and remedies as the Prior Lien Agent with respect to the ABL Priority Collateral (or any particular part thereof) and/or (y) exercising its rights and remedies under Section 3.3 hereof to have access to and/or use of any applicable Real Estate Asset or any applicable Equipment in order to exercise its rights and remedies as the Prior Lien Agent with respect to any applicable ABL Priority Collateral; (B) the date on which all or substantially all of the ABL Priority Collateral is sold, collected or liquidated (or, with respect to any particular Note Priority Collateral consisting of a Real Estate Asset that is a Mortgaged Property, the date on which all which all or substantially all of the ABL Priority Collateral located thereon is sold, collected or liquidated and substantially all of the Note Priority Collateral consisting of Equipment with respect to which ABL Agent wishes to exercise its access rights under Section 3.3 hereof has been removed therefrom); and (C) the Discharge of ABL Obligations.

“Account Agreements” means any lockbox account agreement, pledged account agreement, blocked account agreement, deposit account control agreement, securities account control agreement, or any similar deposit or securities account agreements among Note Security Agent and/or ABL Agent, one or more Grantors and the relevant financial institution depository or securities intermediary.

“Accounts” means all present and future “accounts” (as defined in Article 9 of the UCC).

“Additional Notes Collateral Cap Amount” means (x) $10,000,000, minus (y) the amount of all payments in respect of the Additional Notes Collateral Principal Obligations under the Additional Notes Collateral Debt Agreement (other than payments of such Additional Notes Collateral Debt Obligations in connection with a Refinancing thereof pursuant to Section 5.6 hereof and any payments that are rescinded or required to be returned).

“Additional Notes Collateral Debt” means secured Indebtedness incurred under any Additional Notes Collateral Agreement.

“Additional Notes Collateral Debt Agreement” means any credit agreement, debt facility, indenture (including any supplemental indenture under the Note Indenture) and/or commercial paper facility, in each case, with banks or other institutional or commercial lenders providing for term loan/notes indebtedness that is secured by a Lien on Collateral as in effect on the date hereof; provided, however, that (i) the Indebtedness under such Additional Notes Collateral Debt Agreement is permitted to be incurred, secured and guaranteed on such basis by each ABL Loan Document and each Note Document, and, without limiting the foregoing, such

Indebtedness constitutes “Additional Notes Collateral Debt” as defined and permitted under the ABL Credit Agreement and the Initial Note Indenture, (ii) the Additional Notes Collateral Debt Representative under such Additional Notes Collateral Debt Agreement shall have become party to this Agreement pursuant to, and by satisfying the conditions set forth in, Section 9.22 hereof and (iii) each of the other requirements of Section 9.22 shall have been complied with.

“Additional Notes Claimholders” means, at any relevant time, the holders of Additional Notes Collateral Debt Obligations at that time, including agent, trustee, other representative, the holders and the other agents and arrangers under the Additional Notes Collateral Debt Documents.

“Additional Notes Collateral Debt Collateral Documents” means all “security documents,” “collateral documents” or similar documents under and as defined in the Additional Notes Collateral Debt Agreement.

“Additional Notes Collateral Debt Documents” means Additional Notes Collateral Debt Agreement and each of the other agreements, documents and instruments providing for or evidencing any Additional Notes Collateral Debt, and any other document or instrument executed or delivered at any time in connection therewith to the extent such are effective at the relevant time, as each may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

“Additional Notes Collateral Debt Obligations” means (a) the aggregate principal amount of Additional Notes Collateral Debt outstanding under the Additional Notes Collateral Debt Agreement, (b) all interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts or charges payable by Note Parties under the Additional Notes Collateral Debt Documents, and (c) all other obligations and liabilities of any kind owing by Notes Parties pursuant to the Additional Notes Collateral Debt Documents, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether arising from an extension of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including Post-Petition Obligations with respect to the Obligations described in clauses (a) through (c), whether or not allowed in any Insolvency or Liquidation Proceeding. Notwithstanding the foregoing, if the sum of all Indebtedness for borrowed money constituting principal outstanding at any applicable time under the Additional Notes Collateral Debt Agreement and the other Additional Notes Collateral Debt Documents (including all Capitalized Interest Obligations and Capitalized Other Obligations outstanding under the Additional Notes Collateral Debt Agreement and the other Additional Notes Collateral Debt Documents) (collectively, the “Additional Notes Collateral Principal Obligations”) is in excess of, in the aggregate, the sum of (1) the Additional Notes Collateral Cap Amount, plus (2) the amount of all Capitalized Interest Obligations and all Capitalized Other Obligations that have been added to the outstanding principal balance under the Additional Notes Collateral Debt Agreement and the other Additional Notes Collateral Debt Documents through such time then (x) only that portion of such Additional Notes Collateral Principal Obligations not in excess of such sum (collectively, the “Additional Notes Collateral Priority Principal Obligations”) shall be included in Additional Notes Collateral Debt Obligations, and (y) with respect to any interest, premiums, and fees that directly relate to the Indebtedness for borrowed money outstanding under the Additional Notes Collateral Debt Documents (including any interest

accruing on any Capitalized Interest Obligations and Capitalized Other Obligations that have been added to the outstanding principal balance under the Additional Notes Collateral Debt Agreement and the other Additional Notes Collateral Debt Documents) (collectively, the “Additional Notes Collateral Direct Interest Obligations”), only that portion of such Additional Notes Collateral Direct Interest Obligations with respect to the Additional Notes Collateral Priority Principal Obligations shall be included in the Additional Notes Collateral Debt Obligations (collectively, the “Additional Notes Collateral Priority Interest Obligations”), provided that, for the avoidance of doubt (A) any and all premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges owing by the Notes Parties pursuant to the Additional Notes Collateral Debt Agreement Documents that are not directly related to any particular Indebtedness for borrowed money outstanding under the Additional Notes Collateral Debt Documents (whether or not converted at any time to Capitalized Other Obligations) shall at all times and under all circumstances be included in the Additional Notes Collateral Debt Obligations, and (B) no interest (whether or not converted at any time to Capitalized Interest Obligations) in respect of outstanding principal advances that at any time accrues and becomes owing with respect to Additional Notes Collateral Principal Obligations outstanding at any time that do not constitute Additional Notes Collateral Priority Principal Obligations at such time (nor any further interest accruing on such interest) shall constitute Additional Notes Collateral Debt Obligations, Additional Notes Collateral Priority Principal Obligations, or Additional Notes Collateral Priority Interest Obligations at any time; and provided, further, that, for purposes of the foregoing calculation, the aggregate principal amount of any such Indebtedness described therein that is denominated in a foreign currency shall be measured based on the original principal amount of the borrowing thereof.

“Additional Notes Collateral Debt Representative” means any agent, trustee or other representative (or, in the absence of any such agent/trustee, a majority in principal amount the Additional Notes Claimholders under such Additional Notes Collateral Debt Agreement) under any Additional Notes Collateral Debt Agreement.

“Additional Notes Collateral Direct Interest Obligations” has the meaning set forth in the definition of “Additional Notes Collateral Debt Obligations”.

“Additional Notes Collateral Principal Obligations” has the meaning set forth in the definition of “Additional Notes Collateral Debt Obligations”.

“Additional Notes Collateral Priority Interest Obligations” has the meaning set forth in the definition of “Additional Notes Collateral Debt Obligations”.

“Additional Notes Collateral Priority Principal Obligations” has the meaning set forth in the definition of “Additional Notes Collateral Debt Obligations”.

“Additional Notes Retained Indemnification Interests” has the meaning set forth in Section 6.2(c).

“Additional Notes Retained Interest” has the meaning set forth in Section 6.2(f).

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Agent” means each of ABL Agents and/or Note Security Agents, as the context may require.

“Agreement” has the meaning set forth in the Preamble to this Agreement.

“Applicable ABL Priority Collateral Distributions” has the meaning set forth in Section 4.1(a).

“Applicable Note Priority Collateral Distributions” has the meaning set forth in Section 4.1(b).

“Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and hereafter in effect, or any successor statute.

“Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or foreign law for the relief of debtors.

“Borrower Subsidiaries” means each Subsidiary of the Company that has or may from time to time hereafter execute and deliver any ABL Loan Document and/or Note Document as a “borrower” (or the equivalent thereof).

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the laws of, or are in fact closed in, New York.

“Capitalized Interest Obligations” means any obligations accrued, outstanding, and owing at any time under the ABL Credit Documents, the Additional Notes Collateral Debt Documents, or the Initial Notes Document, as applicable, that (x) originally accrued as and consisted of interest in respect of outstanding principal advances, issuances, notes, loans, and/or letter of credit per annum fees in respect of outstanding letters of credit or similar instruments under the ABL Credit Documents, the Additional Notes Collateral Debt Documents, or the Initial Notes Document (as applicable) and (y) was concurrently or subsequently capitalized, paid in kind, added to the principal balance of outstanding Indebtedness for borrowed money, and/or charged to any borrowers’ loan account under and pursuant to the ABL Credit Documents, the Additional Notes Collateral Debt Documents, or the Initial Notes Document, as applicable.

“Capitalized Other Obligations” means any obligations accrued, outstanding, and owing at any time under the ABL Credit Documents, the Additional Notes Collateral Debt Documents, or the Initial Notes Document (as applicable), that (x) originally accrued as and consisted of premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other charges (excluding in each case any and all interest in respect of outstanding principal advances and/or letter of credit per annum fees) under the ABL Credit Documents, the Additional Notes Collateral Debt Documents, or the Initial Notes Document (as applicable) and (y) was concurrently or subsequently capitalized, paid in kind, added to the principal balance of outstanding Indebtedness for borrowed money, and/or charged to any borrowers’ loan account under and pursuant to the ABL Credit Documents, the Additional Notes Collateral Debt Documents, or the Initial Notes Document, as applicable.

“Claimholders” means the ABL Claimholders and/or the Note Claimholders, as the context may require.

“Collateral” means, at any time, all of the assets and property of any Grantor, whether real, personal or mixed, in which the holders of any ABL Obligations or the holders of any Note Obligations (or their respective Agents) hold, purport to hold or are required to hold, a security interest at such time (or are required pursuant to Section 2 to be granted a security interest), including any property subject to Liens granted pursuant to Section 7 to secure both any ABL Obligations and any Note Obligations and whether or not the liens on any such assets or property are allowed, disallowed, subordinated or avoided in any respect. For the avoidance of doubt, the term “Collateral” does not include the ABL Exclusive Priority Cash Collateral, the Note Specified Blocked Account or the Real Estate Assets to the extent any of such Real Estate Assets are not required to be subject to a lien securing the ABL Obligations.

“Collateral Documents” means the ABL Collateral Documents and the Note Collateral Documents.

“Company” has the meaning set forth in the Preamble to this Agreement.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Copyright Licenses” means any written agreement naming any Grantor as licensor or licensee, granting any right under any Copyright or copyrights owned by a third party, including the grant of rights to reproduce, distribute, display, perform, create derivative works of and otherwise exploit material works protected by any Copyright.

“Copyrights” means each of the following that is owned by any Grantor: (i) all copyrights arising under the laws of the United States, any other country or group of countries or any political subdivision thereof, whether registered or unregistered and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including all registrations, recordings and applications in the United States Copyright Office; and (ii) the right to obtain all renewals thereof.

“Declined Liens” has the meaning set forth in Section 2.3.

“DIP Financing” has the meaning set forth in Section 7.1.

“Discharge of ABL Obligations” means, except to the extent otherwise expressly provided in Section 5.6, each of the following has occurred:

(a) payment in full in cash of the principal of, and or any interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amount and charges (including Post-Petition Obligations, whether or not such Post-Petition Obligations would be allowed in such Insolvency or Liquidation Proceeding) (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted) accruing on or with respect to, all Indebtedness under the ABL Loan Documents, in all cases under this clause (a) to the extent constituting ABL Obligations;

(b) payment in full in cash of all ABL Bank Product Obligations (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted) or the cash collateralization of all such ABL Bank Product Obligations on terms satisfactory to each ABL Bank Product Provider (or delivery of a standby letter of credit on terms satisfactory to such ABL Bank Product Provider) and the expiration or termination of all transactions under the documentation evidencing such ABL Bank Product Obligations, in each case, whether or not such amounts are allowed or allowable under the Bankruptcy Law or in any such Insolvency or Liquidation Proceeding;

(c) payment in full in cash (or cash collateralization in accordance with the ABL Loan Documents) of all other ABL Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted by any of the ABL Claimholders), in each case, whether or not such amounts are allowed or allowable under the Bankruptcy Law or in any such Insolvency or Liquidation Proceeding;

(d) termination or expiration of all commitments, if any, to extend credit that would constitute ABL Obligations;

(e) either (x) termination with consent of the beneficiary (or expiration in accordance with their terms) or (y) cash collateralization (or delivery of a standby letter of credit if and as contemplated by the ABL Credit Agreement), in each case in an amount and manner reasonably satisfactory to ABL Agent but in an amount no greater than 103% of the aggregate undrawn face amount), of all letters of credit and similar instruments issued under the ABL Loan Documents in all cases under this clause (e) to the extent constituting ABL Obligations; and

(f) receipt by ABL Agent of cash collateral in such amount as ABL Agent determines is reasonably necessary to secure the ABL Claimholders in respect of indemnification obligations of the ABL Credit Parties as to matters or circumstances known at such time to ABL Agent which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the ABL Claimholders;

provided, however, that notwithstanding the foregoing, Discharge of ABL Obligations shall not be deemed to have occurred unless all of the foregoing claims have actually been paid in full in cash (or if applicable, fully cash collateralized or backstopped by acceptable standby letters of credit in accordance with the provisions of the ABL Loan Documents), whether or not such amounts are allowed or disallowed vis-a-vis any Grantor, and notwithstanding any discharge of any or all such claims pursuant to section 1141(d) of the Bankruptcy Code or otherwise.

“Discharge of Additional Notes Collateral Debt Obligations” means, except to the extent otherwise expressly provided in Section 5.6, each of the following has occurred:

(a) payment in full in cash of the principal of, and or any interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amount and charges (including Post-Petition Obligations, whether or not such Post-Petition Obligations would be allowed in such Insolvency or Liquidation Proceeding) (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted) accruing on or with respect to, all Indebtedness under the Additional Notes Collateral Debt Documents, in all cases under this clause (a) to the extent constituting Additional Notes Collateral Debt Obligations;

(b) payment in full in cash of all other Additional Notes Collateral Debt Obligations (or cash collateralization in accordance with the Additional Notes Collateral Debt Documents) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted by any of the Additional Notes Claimholders), in each case, whether or not such amounts are allowed or allowable under any Bankruptcy Law or in any such Insolvency or Liquidation Proceeding;

(c) termination or expiration of all commitments, if any, to extend credit that would constitute Additional Notes Collateral Debt Obligations; and

(d) receipt by Additional Notes Collateral Debt Representative of cash collateral in such amount as Additional Notes Collateral Debt Representative determines is reasonably necessary to secure the Additional Notes Claimholders in respect of indemnification obligations of the Notes Parties as to matters or circumstances known at such time to Additional Notes Collateral Debt Representative which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Additional Notes Claimholders;

provided, however, that notwithstanding the foregoing, Discharge of Additional Notes Collateral Debt Obligations shall not be deemed to have occurred unless all of the foregoing claims have actually been paid in full in cash (or if applicable, fully cash collateralized in accordance with the provisions of the Additional Notes Collateral Debt Documents), whether or not such amounts are allowed or disallowed vis-a-vis any Grantor, and notwithstanding any discharge of any or all such claims pursuant to section 1141(d) of the Bankruptcy Code or otherwise.

“Discharge of Excess ABL Obligations” means, except to the extent otherwise expressly provided in Section 5.6, each of the following has occurred:

Insolvency or Liquidation Proceeding) (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted) accruing on or with respect to, all Indebtedness under the ABL Loan Documents, in all cases under this clause (a) to the extent constituting Excess ABL Obligations;

(b) payment in full in cash (or cash collateralization in accordance with the ABL Loan Documents) of all other Excess ABL Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted by any of the ABL Claimholders), in each case, whether or not such amounts are allowed or allowable under the Bankruptcy Law or in any such Insolvency or Liquidation Proceeding;

(d) either (x) termination with consent of the beneficiary (or expiration in accordance with their terms) or (y) cash collateralization (or delivery of a standby letter of credit if and as contemplated by the ABL Credit Agreement), in each case in an amount and manner reasonably satisfactory to ABL Agent but in an amount no greater than 103% of the aggregate undrawn face amount), of all letters of credit and similar instruments issued under the ABL Loan Documents in all cases under this clause (d) to the extent constituting ABL Obligations;

(e) receipt by ABL Agent of cash collateral in such amount as ABL Agent determines is reasonably necessary to secure the ABL Claimholders in respect of indemnification obligations of the ABL Credit Parties as to matters or circumstances known at such time to ABL Agent which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the ABL Claimholders;

provided, however, that notwithstanding the foregoing, Discharge of Excess ABL Obligations shall not be deemed to have occurred unless all of the foregoing claims have actually been paid in full in cash (or if applicable, fully cash collateralized or backstopped by standby letters of credit in accordance with the provisions of the ABL Loan Documents), whether or not such amounts are allowed or disallowed vis-a-vis any Grantor, and notwithstanding any discharge of any or all such claims pursuant to section 1141(d) of the Bankruptcy Code or otherwise.

“Discharge of Excess Note Obligations” means, except to the extent otherwise expressly provided in Section 5.6, each of the following has occurred:

(a) payment in full in cash of the principal of, and or any interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amount and charges (including Post-Petition Obligations, whether or not such Post-Petition Obligations would be allowed in such Insolvency or Liquidation Proceeding) (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted) accruing on or with respect to, all Indebtedness under the Note Documents, in all cases under this clause (a) to the extent constituting Excess Note Obligations;

(b) payment in full in cash of all other Excess Note Obligations that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted by any of the Note Claimholders), in each case, whether or not such amounts are allowed or allowable under any Bankruptcy Law or in any such Insolvency or Liquidation Proceeding;

(c) termination or expiration of all commitments, if any, to extend credit that would constitute Excess Note Obligations;

(d) receipt by Note Security Agent of cash collateral in such amount as Note Security Agent determines is reasonably necessary to secure the Note Claimholders in respect of indemnification obligations of the Notes Parties as to matters or circumstances known at such time to Note Security Agent which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Note Claimholders;

provided, however, that notwithstanding the foregoing, Discharge of Excess Note Obligations shall not be deemed to have occurred unless all of the foregoing claims have actually been paid in full in cash (or if applicable, fully cash collateralized in accordance with the provisions of the Note Documents), whether or not such amounts are allowed or disallowed vis-a-vis any Grantor, and notwithstanding any discharge of any or all such claims pursuant to section 1141(d) of the Bankruptcy Code or otherwise.

“Discharge of Note Obligations” means, except to the extent otherwise expressly provided in Section 5.6, each of the following has occurred:

(a) payment in full in cash of the principal of, and or any interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amount and charges (including Post-Petition Obligations, whether or not such Post-Petition Obligations would be allowed in such Insolvency or Liquidation Proceeding) (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted) accruing on or with respect to, all Indebtedness under the Note Documents, in all cases under this clause (a) to the extent constituting Note Obligations;

(b) payment in full in cash of all other Note Obligations (or cash collateralization in accordance with the Note Documents) that are due and payable or otherwise accrued and owing at or prior to the time such principal and interest are paid (other than inchoate or contingent or reimbursable obligations for which no claim has been asserted by any of the Note Claimholders), in each case, whether or not such amounts are allowed or allowable under any Bankruptcy Law or in any such Insolvency or Liquidation Proceeding;

provided, however, that notwithstanding the foregoing, Discharge of Note Obligations shall not be deemed to have occurred unless all of the foregoing claims have actually been paid in full in cash (or if applicable, fully cash collateralized in accordance with the provisions of the Note Documents), whether or not such amounts are allowed or disallowed vis-a-vis any Grantor, and notwithstanding any discharge of any or all such claims pursuant to section 1141(d) of the Bankruptcy Code or otherwise.

“Discharge of Prior Lien Obligations” means (a) with respect to the ABL Priority Collateral as it relates to the Note Claimholders, the Discharge of ABL Obligations; and (b) with respect to the Note Priority Collateral as it relates to the ABL Claimholders, the Discharge of Note Obligations.

“Disposition” has the meaning set forth in Section 5.1(b).

“Enforcement Action” means any action to:

(a) foreclose, execute, levy, or collect on, take possession or control of (other than for purposes of perfecting a Lien thereon), sell or otherwise realize upon (judicially or non-judicially), or lease, license, or otherwise dispose of (whether publicly or privately), Collateral or otherwise exercise or enforce remedial rights with respect to Collateral under the ABL Loan Documents or the Note Documents (including by way of setoff, recoupment, notification of a public or private sale or other disposition pursuant to the UCC or other applicable law, notification to Account Debtors, notification to depository banks under deposit account control agreements (subject to the proviso below), or exercise of rights under landlord consents, if applicable);

(b) solicit bids from third Persons, approve bid procedures for any proposed disposition of Collateral, to conduct the liquidation or disposition of Collateral or engage or retain sales brokers, marketing agents, investment bankers, accountants, auctioneers, or other third Persons for the purposes of marketing, promoting, and selling Collateral;

(d) otherwise enforce a security interest or exercise another right or remedy, as a secured creditor or otherwise, pertaining to the Collateral at law, in equity, or pursuant to the ABL Loan Documents or Note Documents (including the commencement of applicable legal proceedings or other actions with respect to all or any portion of the Collateral to facilitate the actions described in the preceding clauses, and exercising voting rights in respect of equity interests comprising Collateral); or

(e) the Disposition of Collateral by any Grantor after the occurrence and during the continuation of an event of default under the ABL Loan Documents or the Note Documents with the consent of ABL Agent or Note Security Agent, as applicable;

provided, however, that notwithstanding the foregoing, none of the following shall constitute an Enforcement Action: (i) the establishment or modification of (x) borrowing base and/or availability reserves or other reserves against collateral, (y) eligibility criteria for Accounts or Inventory, or (z) other conditions for advances; (ii) the changing of advance rates or advance sub-limits; (iii) the imposition of a default rate or late fee; (iv) the collection and application (including pursuant to “cash dominion” provisions) of Accounts or other monies deposited from time to time in Deposit Accounts or Securities Accounts, in each case, against the ABL Obligations pursuant to the provisions of the ABL Loan Documents (including the notification of Account Debtors, depositary institutions or any other Person to deliver proceeds of Collateral to ABL Agent); (v) the cessation of lending pursuant to the provisions of the ABL Loan Documents, including upon the occurrence of a default or the existence of an over-advance; (vi) the filing of a proof of claim in any Insolvency or Liquidation Proceeding; (vii) unless an event of default under and as defined in the ABL Loan Documents or the Note Documents has occurred and is continuing, the consent by ABL Agent to disposition by any Grantor of any of the ABL Priority Collateral or the consent by Note Security Agent to disposition by any Grantor of any of the Note Priority Collateral; (viii) the acceleration of the Note Obligations, the Excess Note Obligations, the ABL Obligations, or the Excess ABL Obligations; and (ix) the commencement or filing or joining with other Persons in the commencement or filing of a petition in an Insolvency or Liquidation Proceeding in the exercise of any remedies as an unsecured creditor.

“Enforcement Notice” means a written notice delivered by (i) ABL Agent, at a time when an ABL Default has occurred and is continuing, to Note Security Agent announcing that such ABL Agent intends to commence an Enforcement Action against the ABL Priority Collateral and specifying the relevant event of default; or (ii) Note Security Agent, at a time when a Note Default has occurred and is continuing, to ABL Agent announcing that such Note Security Agent intends to commence an Enforcement Action against the Note Priority Collateral and specifying the relevant event of default.

“Equity Interests” means, with respect to any Person, all of the shares, interests, rights, participations or other equivalents (however designated) of capital stock of (or other ownership or profit interests or units in) such Person and all of the warrants, options or other rights for the purchase, acquisition or exchange from such Person of any of the foregoing (including through convertible securities).

“Excess ABL Obligations” means any Obligations (x) constituting ABL Principal Obligations to the extent exceeding the ABL Priority Principal Obligations, and (y) constituting ABL Direct Interest Obligations to the extent exceeding the ABL Priority Interest Obligations.

“Excess Additional Notes Collateral Debt Obligations” means any Obligations (x) constituting Additional Notes Collateral Principal Obligations to the extent exceeding the Additional Notes Collateral Priority Principal Obligations, and (y) constituting Additional Notes Collateral Direct Interest Obligations to the extent exceeding the Additional Notes Collateral Priority Interest Obligations.

“Excess Initial Note Obligations” means any Obligations (x) constituting Initial Note Principal Obligations to the extent exceeding the Initial Note Priority Principal Obligations, and (y) constituting Initial Note Direct Interest Obligations to the extent exceeding the Initial Note Priority Interest Obligations.

“Excess Note Obligations” means any Obligations consisting of Excess Additional Notes Collateral Debt Obligations or Excess Initial Note Obligations.

“Foreign Subsidiary” means any Subsidiary other than a U.S. Subsidiary.

“Governmental Authority” means any federal, state, municipal, national or other government, governmental department, commission, board, bureau, court, agency or instrumentality or political subdivision thereof or any entity or officer exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to any government or any court, in each case whether associated with a state of the United States, the United States, or a foreign entity or government.

“Grantors” means the Company, each of the Borrower Subsidiaries, each of the Guarantor Subsidiaries and each other Person that has or may from time to time hereafter execute and deliver any ABL Collateral Document and/or Note Collateral Document as a “grantor” or “pledgor” (or the equivalent thereof) to secure any ABL Obligations, Excess ABL Obligations, Note Obligations and/or Excess Note Obligations, as the context may require.

“Guarantor Subsidiaries” means each Subsidiary of the Company that has executed and delivered or may from time to time hereafter execute and deliver any ABL Loan Document and/or Note Document as a “guarantor” (or the equivalent thereof).

“Indebtedness” means and includes all indebtedness for borrowed money; for the avoidance of doubt, “Indebtedness” shall not include reimbursement or other obligations in respect of letters of credit or the ABL Bank Product Obligations.

“Initial Note Cap Amount” means (x) the sum of (i) $78,125,000, plus (ii) if the Company or any other Notes Party shall be subject to any Insolvency or Liquidation Proceeding, $7,812,500, minus (y) the amount of all payments in respect of the Initial Note Principal Obligations (other than payments of such Initial Note Obligations in connection with a Refinancing thereof pursuant to Section 5.6 hereof and any payments that are rescinded or required to be returned).

“Initial Note Claimholders” means, at any relevant time, the holders of Note Obligations or Excess Note Obligations at that time, including the Note Security Agent, the Note Trustee, the Note Holders, and the other agents and arrangers under the Note Documents.

“Initial Note Collateral Documents” means the Security Documents (as defined in the Initial Note Indenture) and any other agreement, document or instrument pursuant to which a Lien is granted by any Grantor securing any Note Obligations and/or the Excess Note Obligations or under which rights or remedies with respect to such Liens are governed (other than this Agreement).

“Initial Note Direct Interest Obligations” has the meaning set forth in the definition of “Initial Note Obligations”.

“Initial Note Documents” means the Note Indenture, the Note Collateral Documents, the Additional Notes Collateral Debt Documents and each of the other agreements, documents and instruments providing for or evidencing any other Note Obligation and/or Excess Note Obligations, and any other document or instrument executed or delivered at any time in connection with any Note Obligations and/or Excess Note Obligations, including any intercreditor or joinder agreement among holders of Note Obligations and/or Excess Note Obligations to the extent such are effective at the relevant time, as each may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

“Initial Note Indenture” means the Note Indenture as defined in the Recitals to this Agreement, as it may have been or may hereafter be from time to time amended, restated, amended and restated, supplemented, or otherwise modified from time to time in a manner not prohibited by this Agreement.

“Initial Note Obligations” means (a) the aggregate principal amount of Notes outstanding under the Initial Note Indenture, (b) all interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts or charges payable by Notes Parties under the Initial Note Documents, and (c) all other obligations and liabilities of any kind owing by Notes Parties pursuant to the Initial Note Documents (including all “Note Obligations” as defined in the Initial Note Indenture as in effect on the date hereof), whether now existing or hereafter arising, whether evidenced by a note or other writing, whether arising from an extension of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several, including Post-Petition Obligations with respect to the Obligations described in clauses (a) through (c), whether or not allowed in any Insolvency or Liquidation Proceeding. Notwithstanding the foregoing, if the sum of all Indebtedness for borrowed money constituting principal outstanding at any applicable time under the Note Indenture and the other Initial Note Documents (including all Capitalized Interest Obligations and Capitalized Other Obligations outstanding under the Initial Note Indenture and the other Initial Note Documents) (collectively, the “Initial Note Principal Obligations”) is in excess of, in the aggregate, the sum of (1) the Initial Note Cap Amount, plus (2) the amount of all Capitalized Interest Obligations and all Capitalized Other Obligations that have been added to the outstanding principal balance under the Initial Note Indenture and the other Initial Note Documents through such time then (x) only that portion of such Initial Note Principal Obligations not in excess of such sum (collectively, the “Initial Note Priority Principal Obligations”) shall be included in the Initial Note Obligations, and (y) with respect to any interest, premiums, and fees that directly relate to the Indebtedness for borrowed money outstanding under the Initial Note Documents (including any interest accruing on any Capitalized Interest Obligations and all Capitalized Other Obligations that have been added to the outstanding principal balance under the Initial Note Indenture and the other Initial Note Documents) (collectively, the “Initial Note Direct Interest Obligations”), only that portion of such Initial Note Direct Interest Obligations with respect to the Initial Note Priority

Principal Obligations shall be included in the Initial Note Obligations (collectively, the “Initial Note Priority Interest Obligations”), provided that, for the avoidance of doubt, (A) any and all premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other amounts and charges owing by the Notes Parties pursuant to the Initial Note Documents that are not directly related to any particular Indebtedness for borrowed money outstanding under the Initial Note Documents (whether or not converted at any time to Capitalized Other Obligations) shall at all times and under all circumstances be included in the Initial Note Obligations, and (B) no interest (whether or not converted at any time to Capitalized Interest Obligations) in respect of outstanding principal advances that at any time accrues and becomes owing with respect to Initial Note Principal Obligations outstanding at any time that do not constitute Initial Note Priority Principal Obligations at such time (nor any further interest accruing on such interest) shall constitute Initial Note Obligations, Initial Note Priority Principal Obligations, or Initial Note Priority Interest Obligations at any time; and; provided, further, that, for purposes of the foregoing calculation, the aggregate principal amount of any such Indebtedness described therein that is denominated in a foreign currency shall be measured based on the original principal amount of the borrowing thereof.

“Initial Note Principal Obligations” has the meaning set forth in the definition of “Initial Note Obligations”.

“Initial Note Priority Interest Obligations” has the meaning set forth in the definition of “Initial Note Obligations”.

“Initial Note Priority Principal Obligations” has the meaning set forth in the definition of “Initial Note Obligations”.

“Initial Note Security Agent” means (i) Note Security Agent as defined in the Preamble to this Agreement and (ii) any new Note Security Agent identified by the Company pursuant to Section 5.6(b), in each case, together with any successor(s) thereto in such capacity appointed in accordance with the applicable Initial Note Documents.

“Initial Note Trustee” means the Initial Note Trustee as defined in the Recitals to this Agreement, together with any successor(s) thereto in such capacity appointed in accordance with the applicable Initial Note Documents.

“Insolvency or Liquidation Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.

“Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States, multinational or foreign laws or otherwise, including the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets, the computer software and any registered internet domain names, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.

“Lien” means any lien (including, judgment liens and liens arising by operation of law), mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, call, trust, (contractual, statutory, deemed, equitable, constructive, resulting or otherwise), UCC financing statement or other preferential arrangement having the practical effect of any of the foregoing, including any right of set-off or recoupment.

“Mortgaged Premises” means any Real Estate Asset which shall now or hereafter be subject to a Note Mortgage.

“Note Cap Amount” means at any time the sum of (i) the maximum amount of Additional Notes Collateral Debt Priority Principal Obligations permissible hereunder at such time, plus (ii) the maximum amount of Initial Note Priority Principal Obligations permissible hereunder at such time, plus (iii) if the Company or any other Notes Party shall be subject to any Insolvency or Liquidation Proceeding, $7,812,500.

“Note Claimholders” means, collectively, the Initial Note Claimholders and Additional Notes Claimholders.

“Note Collateral Documents” means, collectively, the Initial Note Collateral Documents and the Additional Notes Collateral Debt Collateral Documents.

“Note Declined Liens” has the meaning set forth in Section 2.3.

“Note Default” means an “Event of Default” as defined in the Note Indenture, Additional Notes Collateral Debt Agreement or any similar event or condition set forth in any other Note Document which causes, or permits holders of the applicable Note Obligations outstanding thereunder to cause, the Note Obligations outstanding thereunder to become immediately due and payable.

“Note Documents” means, collectively, the Initial Note Documents and the Additional Notes Collateral Debt Documents.

“Note Excluded Assets” means any “Excluded Property” as defined in the Note Collateral Documents and any other property excluded from the Liens granted by the Grantors pursuant to the Note Collateral Documents.

“Note General Intangibles” means all general intangibles (including Intellectual Property) which are not ABL Priority Collateral.

“Note Holders” means the “Holders” under and as defined in the Note Indenture.

“Note Indenture” means (A) each of (i) the Initial Note Indenture as defined in the Recitals to this Agreement, and (ii) any Additional Notes Collateral Debt Agreement, and (B) any Replacement Note Indenture under Section 5.6 hereof, as it may be from time to time amended, restated, amended and restated, supplemented or otherwise modified from time to time in a manner not prohibited by this Agreement.

“Note Mortgages” means all mortgages, deeds of trust and other documents under which a Lien on real property is granted to secure the Note Obligations.

“Note Obligations” means the Initial Note Obligations and the Additional Notes Collateral Debt Obligations.

“Notes Party” means each “Notes Party” under and as defined in the Note Indenture.

“Note Priority Collateral” means the following property of any Grantor (including, for the avoidance of doubt, any such assets that, but for the application of Section 552 of the Bankruptcy Code, would constitute Note Priority Collateral): (i) all present and future Equity Interests in all present and future direct and indirect Subsidiaries of the Company (to the extent constituting Collateral from time to time under the Note Document and ABL Loan Documents); (ii) all present and future Indebtedness owing to the Company or another Grantor by any other Grantor or Subsidiary thereof (except to the extent constituting ABL Priority Collateral under clauses (i), (ii) or (iii) or such definition or proceeds thereof); (iii) all other present and future property and assets not constituting ABL Priority Collateral, real and personal, of any Grantor, whether real, personal or mixed, including, but not limited to, each of the following to the extent not constituting ABL Priority Collateral: Commercial Tort Claims, machinery and equipment, goods, the Note Priority Collateral Account, fixtures, financial assets, General Intangibles, Investment Property, intellectual property, Letters of Credit, Letter of Credit Rights, license rights, Chattel Paper, insurance proceeds, contract rights, hedge agreements, Documents, Instruments, Supporting Obligations and indemnification rights; (iv) all books, records and documents related to the foregoing (including databases, customer lists and other records, whether tangible or electronic, which contain any information relating to any of the foregoing); and (v) all Proceeds and products of any or all of the foregoing in whatever form received, including insurance and claims against third parties (but limited to 70% of all proceeds of business interruption insurance); provided that the Note Priority Collateral shall not include the Note Excluded Assets.

“Note Priority Collateral Account” means a deposit or securities account which will be used solely for deposit of identifiable proceeds of Note Priority Collateral, but excluding any identifiable proceeds of ABL Priority Collateral deposited therein or credited thereto.

“Note Retained Indemnification Interest” has the meaning set forth in Section 6.2(b).

“Note Retained Interest” has the meaning set forth in Section 6.2(e).

“Note Security Agent” means (i) Initial Note Security Agent, (ii) any Additional Notes Collateral Debt Representative and (iii) any new Note Security Agent identified by the Company pursuant to Section 5.6(b), in each case, together with any successor(s) thereto in such capacity appointed in accordance with the applicable Note Documents.

“Note Specified Blocked Account” means “Specified Blocked Account” as defined in the Initial Note Indenture, but excluding any identifiable proceeds of ABL Priority Collateral deposited therein or credited thereto.

“Note Standstill Period” has the meaning set forth in Section 3.2.

“Note Trustee” means (i) the Initial Note Trustee (as defined in the Recitals to this Agreement), and (ii) any new Initial Note Trustee identified by the Company pursuant to Section 5.6(b), in each case, together with any successor(s) thereto in such capacity appointed in accordance with the applicable Initial Note Documents.

“Obligations” means all obligations of every nature of each Grantor from time to time owed to any agent or trustee, the ABL Claimholders, the Note Claimholders or any of them or their respective Affiliates under the ABL Loan Documents, the Note Documents, documents evidencing the ABL Bank Product Obligations, in each case, whether for principal, reimbursement or cash collateralization of letters of credit and similar instruments, interest, premiums, payments for early termination of the ABL Bank Product Obligations consisting of hedging obligations, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, or otherwise and all guarantees of any of the foregoing and including any and all applicable Post-Petition Obligations included in or accruing in connection with any of the foregoing. For the avoidance of doubt, the term “Obligations” shall include all ABL Obligations, all Excess ABL Obligations, all Note Obligations and all Excess Note Obligations.

“Patent Licenses” means all agreements, whether written or oral, providing for the grant by or to any Grantor of any right to manufacture, use or sell any invention covered in whole or in part by a Patent or patents owned by a third party.

“Patents” means each of the following that is owned by any Grantor: (i) all letters patent of the United States, any other country or group of countries or any political subdivision thereof, all reissues and extensions thereof and all goodwill associated therewith; (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof; and (iii) all rights to obtain any reissues or extensions of the foregoing.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, Governmental Authority or other entity.

“Pledged Collateral” has the meaning set forth in Section 5.5.

“Post-Petition Obligations” means interest, premiums, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other charges owing by any Grantor(s) that pursuant to the ABL Credit Documents and/or ABL Bank Product Obligation or the Note Documents, as applicable, continue to accrue after the commencement of any Insolvency or Liquidation Proceeding, whether or not such interest, fees, costs and expenses (and reimbursement obligations with respect thereto), indemnification obligations, and other charges are allowed or allowable under the Bankruptcy Law or in any such Insolvency or Liquidation Proceeding.

“Prior Lien Agent” means (i) as it relates to ABL Agent and the other ABL Claimholders with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, Note Security Agent; and (ii) as it relates to Note Security Agent and the other Note Claimholders with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, ABL Agent.

“Prior Lien Claimholders” means (i) as it relates to the ABL Claimholders with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, the Note Claimholders; and (ii) as it relates to the Note Claimholders with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, the ABL Claimholders.

“Prior Lien Collateral” means with respect to any Person, all Collateral with respect to which (and only for so long as) such Person is a “Prior Lien Claimholder” as provided in the definition thereof.

“Prior Lien Loan Documents” means (i) as it relates to the ABL Claimholders with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, the Note Documents; and (ii) as it relates to the Note Claimholders with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, the ABL Loan Documents.

“Prior Lien Obligations” means (i) as it relates to the ABL Obligations with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, the Note Obligations; and (ii) as it relates to the Note Obligations with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, the ABL Obligations.

“Real Estate Asset” means, at any time of determination, any interest (fee, leasehold or otherwise) of any Grantor in any real property, including Mortgaged Premises, distribution centers and warehouses and corporate headquarters and administrative offices.

“Receivables” means (i) any right to payment for goods sold or leased or for services rendered, whether or not such right is evidenced by an Instrument or Chattel Paper and whether or not it has been earned by performance (including, without limitation, any Account), (ii) all amounts at any time payable to any Grantor in respect of the sale or other disposition of any Account, (iii) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account, (iv) all Payment Intangibles, and (v) all rights to payment from an issuer of a credit card, charge card or debt card resulting from charges by a customer of any Grantor in connection with the sale of ABL Priority Collateral or any provision of services by a Grantor.

“Recovery” has the meaning set forth in Section 7.4.

“Refinance” means, in respect of any Indebtedness, letters of credit, hedging and/or cash management obligation, to refinance, extend, renew, defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other Indebtedness, letters of credit, hedging and/or cash management obligation in exchange or replacement for, such Indebtedness, letters of credit, hedging and/or cash management obligation in whole or in part regardless of whether the principal amount of such Refinancing Indebtedness, letters of credit, hedging and/or cash management obligation is the same, greater than or less than the principal amount of the Refinanced Indebtedness, the face amount of the Refinanced letters of credit or the amount of hedging and/or cash management exposure. “Refinanced” and “Refinancing” shall have correlative meanings.

“Replacement ABL Credit Agreement” means any ABL Credit Agreement executed and delivered in connection with any Refinancing of the ABL Obligations and/or Excess ABL Obligations made in accordance with the terms of this Agreement and the Note Documents (or, in the event the Discharge of ABL Obligations has occurred, any credit agreement governing and/or evidencing a replacement ABL revolving credit facility that would have been permitted as a Refinancing of the ABL Obligations and/or Excess ABL Obligations made in accordance with the terms of this Agreement and the Note Documents had such Discharge of ABL Obligations not occurred).

“Replacement Note Indenture” means any Note Indenture executed and delivered in connection with any Refinancing of the Note Obligations and/or Excess Note Obligations made in accordance with the terms of this Agreement and the ABL Documents (or, in the event the Discharge of Note Obligations has occurred, any credit agreement, debt facility, indenture and/or commercial paper facility governing and/or evidencing a replacement term debt/notes facility that would have been permitted as a Refinancing of the Note Obligations and/or Excess Note Obligations made in accordance with the terms of this Agreement and the ABL Documents had such Discharge of Note Obligations not occurred).

“Requisite ABL Claimholders” means the “Required Lenders” under and as defined in the ABL Credit Agreement on the date hereof.

“Requisite Note Claimholders” means the Note Holders of at least a majority in the aggregate principal amount of the “Notes” (as defined in the Note Indenture as of the date hereof) then outstanding under the Note Indenture and the aggregate principal amount of the Additional Notes Collateral Principal Obligations.

“Subordinated Lien Agent” means (i) with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, Note Security Agent; and (ii) with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, ABL Agent.

“Subordinated Lien Claimholders” means (i) with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, the Note Claimholders; and (ii) with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, the ABL Claimholders.

“Subordinated Lien Collateral” means with respect to any Person, all Collateral with respect to which (and only for so long as) such Person is a “Subordinated Lien Claimholder” as provided in the definition thereof.

“Subordinated Lien Loan Documents” means (i) with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, the Note Documents; and (ii) with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, the ABL Loan Documents.

“Subordinated Lien Obligations” means (i) with respect to all matters relating to the ABL Priority Collateral (but not the Note Priority Collateral) prior to the Discharge of ABL Obligations, the Note Obligations; and (ii) with respect to all matters relating to the Note Priority Collateral (but not the ABL Priority Collateral) prior to the Discharge of Note Obligations, the ABL Obligations.

“Subsidiary” means, as to any Person, any entity more than 50% of whose voting securities or Equity Interests is owned by the Company (including indirect ownership through other entities in which the Company directly or indirectly owns more than 50% of the voting securities or Equity Interests).

“Third Party Purchaser” has the meaning set forth in Section 3.3.

“Trade Secrets” means all confidential and proprietary information, including know-how, trade secrets, manufacturing and production processes and techniques, inventions, research and development information, technical data, financial, marketing and business data, pricing and cost information, business and marketing plans, and customer and supplier lists and information.

“Trademark License” means any agreement, whether written or oral, providing for the grant by or to any Grantor of any right to use any Trademark or trademarks owned by a third party.

“Trademarks” means each of the following that is owned by any Grantor: (i) all trademarks, trade names, trade dress, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all registrations and recordings thereof, and all applications in connection therewith, whether in the U.S. Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or group of countries or any political subdivision thereof, or otherwise, and all common-law rights related thereto; and (ii) the right to obtain all renewals thereof.

“UCC” means the Uniform Commercial Code (or any similar or equivalent legislation) as in effect in any applicable jurisdiction.

“U.S. Subsidiary” means any Subsidiary that is organized under the laws of the United States of America or any state thereof or the District of Columbia.

“Use Period” means the period, with respect to any Note Priority Collateral (but, in the case of Real Estate Assets, only if such Real Estate Assets are Mortgaged Premises), which begins on the day on which ABL Agent provides Note Security Agent with an Enforcement Notice and ends on the earliest of (A) the 180^th day after such date; provided, however, that such 180 day period shall be tolled during any period during which ABL Agent is stayed or otherwise prohibited by law or court order from exercising remedies with respect to such Note Priority Collateral; (B) the date on which all or substantially all of the ABL Priority Collateral is sold, collected or liquidated; and (C) the Discharge of ABL Obligations.

1.2 Terms Generally. The definitions of terms in this Agreement shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise:

(a) any definition of or reference herein to any agreement, instrument or other document shall be construed as referring to such agreement, instrument or other document as amended, restated, amended and restated, supplemented or otherwise modified from time to time and any reference herein to any statute or regulations shall include any amendment, renewal, extension or replacement thereof;

(b) any reference herein to any Person shall be construed to include such Person’s permitted successors and assigns from time to time;

(c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof;

(d) all references herein to Sections shall be construed to refer to Sections of this Agreement;

(e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights;

(f) any reference herein to ABL Agent on behalf of the ABL Claimholders shall be understood to mean only on behalf of itself and the ABL Claimholders for which such ABL Agent is acting as agent under the related ABL Loan Documents or any ABL Collateral Documents; and

(g) any reference herein to Note Security Agent on behalf of the Note Claimholders shall be understood to mean only on behalf of itself and the Note Claimholders for which such Note Security Agent is acting as agent under the related Note Documents or any Note Collateral Documents.

SECTION 2

LIEN PRIORITIES

2.1 Relative Priorities. Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the ABL Obligations, the Excess ABL Obligations, the Note Obligations and/or the Excess Note Obligations on the Collateral and notwithstanding any provision of the UCC, or any other applicable law or the ABL Loan

Documents or the Note Documents or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing the ABL Obligations or the Note Obligations, the subordination of such Liens to any Liens securing other obligations or any other circumstance whatsoever, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, ABL Agent, on behalf of itself and the ABL Claimholders represented by it, and Note Security Agent, on behalf of itself and the Note Claimholders represented by it, each hereby agree that:

(a) Subject to clause (c) below, any Lien on the ABL Priority Collateral securing any ABL Obligations now or hereafter held by or on behalf of ABL Agent or any ABL Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the ABL Priority Collateral securing any Note Obligations or any Excess Note Obligations;

(b) subject to clause (d) below, any Lien on the Note Priority Collateral securing any Note Obligations now or hereafter held by or on behalf of Note Security Agent, any Note Claimholders or any agent or trustee therefor regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects to all Liens on the Note Priority Collateral securing any ABL Obligations or any Excess ABL Obligations;

(c) any Lien on the ABL Priority Collateral securing any Excess ABL Obligations now or hereafter held by or on behalf of ABL Agent or any ABL Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to any Lien on the ABL Priority Collateral securing any Note Obligations, but shall be senior in all respects to any Lien on the ABL Priority Collateral securing any Excess Note Obligations; and

(d) any Lien on the Note Priority Collateral securing any Excess Note Obligations now or hereafter held by or on behalf of Note Security Agent or any Note Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to any Lien on the Note Priority Collateral securing any ABL Obligations, but shall be senior in all respects to any Lien on the Note Priority Collateral securing any Excess ABL Obligations.

(e) Notwithstanding anything herein to the contrary but without in any way changing the priorities among the ABL Obligations and the Note Obligations and solely within the Note Obligations, so long as the Discharge of Additional Notes Collateral Debt Obligations has not occurred, (x) any Lien on the Collateral securing any Additional Notes Collateral Debt Obligations, now or hereafter held by or on behalf of Additional Notes Collateral Debt Representative or any Additional Notes Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all respects and prior to any Lien on the Collateral securing any of the Initial Note Obligations and (y) any Lien on the Collateral securing any Initial Note Obligations, now or hereafter held by or on behalf of Initial Note Security Agent or any Initial Note Claimholders or any agent or trustee therefor, regardless of how acquired, whether by grant, possession, statute, operation of law, subrogation or otherwise, shall be junior and subordinate in all respects to any Lien on the Collateral securing any of the Additional Notes Collateral Debt Obligations.

2.2 Prohibition on Contesting Liens & Claims; No Marshaling. Each of ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, and Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, agrees that it will not (and hereby waives any right to) directly or indirectly contest, or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the priority, validity, perfection, extent or enforceability of a Lien held, or purported to be held, by or on behalf of any of the ABL Claimholders in the Collateral or the ABL Exclusive Priority Cash Collateral or by or on behalf of any of the Note Claimholders in the Collateral or Real Estate Assets, as the case may be, or the amount, nature or extent of the ABL Obligations, Excess ABL Obligations, Note Obligations or Excess Note Obligations or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of (i) ABL Agent or any ABL Claimholder or (ii) Note Security Agent or any Note Claimholder to enforce this Agreement, including the provisions of this Agreement relating to the priority of the Liens securing (a) the ABL Obligations and the Excess ABL Obligations as provided in Sections 2.1(a), 2.1(c) and 3.1 and (b) the Note Obligations and the Excess Note Obligations as provided in Sections 2.1(b), 2.1(d) and 3.2. Until the Discharge of Prior Lien Obligations, neither (x) Note Security Agent nor any Note Claimholder with respect to the ABL Priority Collateral nor (y) ABL Agent nor any ABL Claimholder with respect to the Note Priority Collateral will assert any marshaling, appraisal, valuation or other similar right that may otherwise be available to a junior secured creditor.

2.3 No New Liens. So long as the Discharge of Prior Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor (except that any Liens securing DIP Financing shall be governed by Section 7.1 hereof not this Section 2.3), the parties hereto agree that the Company shall not, and shall not permit any other Grantor to:

(a) subject to Section 2.5 hereof, grant or permit any additional Liens on any asset or property to secure any Note Obligation or any Excess Note Obligations unless it has granted or concurrently grants a Lien on such asset or property to secure all of the ABL Obligations and Excess ABL Obligations, the parties hereto agreeing that any such Lien shall be subject to Section 2.1 hereof; provided that this provision will not be violated with respect to any Lien securing any Note Obligations or any Excess Note Obligations if ABL Agent is given a reasonable opportunity to accept a Lien on any asset or property and either the Company or ABL Agent not receiving the Lien states in writing that the applicable ABL Loan Documents prohibit ABL Agent from accepting a Lien on such asset or property, or ABL Agent otherwise expressly declines to accept a Lien on such asset or property (any such prohibited or declined Liens, an “ABL Declined Lien”); or

(b) subject to Section 2.5 hereof, grant or permit any additional Liens on any asset or property to secure any ABL Obligation or any Excess ABL Obligations unless it has granted or concurrently grants a Lien on such asset or property to secure all of the Note Obligations and Excess Note Obligations, the parties hereto agreeing that any such Lien shall be subject to Section 2.1 hereof; provided that this provision will not be violated with respect to any Lien

securing any ABL Obligations or any Excess ABL Obligations if Note Security Agent is given a reasonable opportunity to accept a Lien on any asset or property and either the Company or Note Security Agent not receiving the Lien states in writing that the applicable Note Documents prohibit Note Security Agent from accepting a Lien on such asset or property, or Note Security Agent otherwise expressly declines to accept a Lien on such asset or property (any such prohibited or declined Lien, a “Note Declined Lien” and, together with the ABL Declined Liens, the “Declined Liens”).

To the extent that the foregoing provisions are not complied with for any reason, without limiting any other rights and remedies available to (i) ABL Agent and/or the ABL Claimholders or (ii) Note Security Agent and/or the Note Claimholders, each agree that any amounts received by or distributed to any of them pursuant to or as a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 4.2.

Notwithstanding anything in this Agreement to the contrary, Deposit Accounts or Securities Accounts holding cash and/or cash equivalents may be pledged to secure ABL Obligations and Excess ABL Obligations consisting of (and solely limited to) (i) reimbursement obligations in respect of letters of credit and swing line loans issued under the ABL Credit Agreement and/or (ii) any obligations of lenders participating in the facilities under which such letters of credit are issued and swing loans made, in each case under the ABL Credit Agreement, which may be pledged without granting a Lien thereon to secure any other ABL Obligations or Excess ABL Obligations or any Note Obligations or Excess Note Obligations (cash and cash equivalents so pledged, the “ABL Exclusive Priority Cash Collateral”).

2.4 Similar Liens and Agreements. The parties hereto agree that, subject to Sections 2.3 and 2.5, it is their intention that the Collateral that is subject to Liens supporting the ABL Obligations, the Excess ABL Obligations, the Note Obligations and the Excess Note Obligations be identical. In furtherance of the foregoing and of Section 9.9, the parties hereto agree, subject to the other provisions of this Agreement:

(a) upon request by ABL Agent or Note Security Agent, as applicable, to cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time in order to determine the specific items included in the ABL Priority Collateral and the Note Priority Collateral, as applicable, and the steps taken to perfect their respective Liens thereon and the identity of the respective parties obligated under the ABL Loan Documents and the Note Documents, as applicable; and

(b) that the documents and agreements creating or evidencing the Liens on the ABL Priority Collateral and the Note Priority Collateral and guarantees for the ABL Obligations, the Excess ABL Obligations, the Note Obligations and the Excess Note Obligations shall be in all material respects the same forms of documents other than with respect to the asset-based lending and the senior secured notes nature of the Obligations thereunder.

2.5 Collateral Differences.

(a) Notes Specified Blocked Account. The parties hereto also agree that (i) the Company granted Liens upon the Notes Specified Blocked Account to secure the Note Obligations and the Excess Note Obligations but not the ABL Obligations or the Excess ABL Obligations and (ii) neither the ABL Obligations nor the Excess ABL Obligations will be secured by the Lien upon the Note Specified Blocked Account.

(b) Real Estate Assets. The parties hereto also agree that (i) the Company and the other Grantors may hereafter grant Liens upon their Real Estate Assets to secure the Note Obligations and the Excess Note Obligations and ABL Agent may decline to accept a Lien to secure the ABL Obligations or the Excess ABL Obligations on such Real Estate Assets pursuant to Section 2.3(a) and (ii) neither the ABL Obligations nor the Excess ABL Obligations will be secured by a Lien upon Real Estate Assets if such Real Estate Assets are not required pursuant to the ABL Loan Documents as in effect at the applicable time to be subject to a Lien securing the ABL Obligations.

2.6 Perfection of Liens. Except for the arrangements contemplated by Section 5.5, none of ABL Agent or the ABL Claimholders shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Collateral for the benefit of Note Security Agent or the Note Claimholders, and none of Note Security Agent or the Note Claimholders shall be responsible for perfecting and maintaining the perfection of Liens with respect to the Collateral for the benefit of ABL Agent or the ABL Claimholders. The provisions of this Agreement are intended solely to govern the respective Lien priorities as between the ABL Claimholders on the one hand and the Note Claimholders on the other hand and such provisions shall not impose on ABL Agent, the ABL Claimholders, Note Security Agent, the Note Claimholders or any agent or trustee therefor any obligations in respect of the disposition of proceeds of any Collateral which would conflict with prior-perfected claims therein in favor of any other Person or any order or decree of any court or governmental authority or any applicable law.

SECTION 3

ENFORCEMENT

3.1 Restrictions on Exercise of Remedies By Note Security Agent and Note Claimholders.

(a) Until the Discharge of ABL Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, Note Security Agent and the Note Claimholders represented by it:

(i) will not commence or maintain, or seek to commence or maintain, any Enforcement Action or otherwise exercise any rights or remedies with respect to the ABL Priority Collateral; provided that Note Security Agent may commence an Enforcement Action or otherwise exercise any or all such rights or remedies, in each case, with respect to ABL Priority Collateral, after the passage of a period of at least 180 days since the later of: (x) the date on which all outstanding Notes issued under the Note Indenture have become due and payable following a Note Default under the Note Indenture; and (y) the date on which ABL Agent received notice from the Note Security Agent of such Note Default and acceleration (the “ABL Standstill Period”); provided, further, that notwithstanding anything herein to the contrary, in no event shall Note

Security Agent or any Note Claimholder take any Enforcement Action with respect to the ABL Priority Collateral if, notwithstanding the expiration of the ABL Standstill Period, ABL Agent or ABL Claimholders shall have commenced and be diligently pursuing an Enforcement Action with respect to all or any material portion of the ABL Priority Collateral or seeking to lift or dissolve any stay or other injunction preventing them from pursuing an Enforcement Action (prompt notice of such exercise to be given to Note Security Agent);

(ii) will not contest, protest or object to any foreclosure proceeding or action brought by ABL Agent or any ABL Claimholder with respect to ABL Priority Collateral or any other exercise by ABL Agent or any ABL Claimholder of any rights and remedies relating to the ABL Priority Collateral under the ABL Loan Documents or otherwise (including any Enforcement Action initiated by or supported by ABL Agent or any ABL Claimholder), in each case so long as any proceeds received by ABL Agent in excess of those necessary to achieve a Discharge of ABL Obligations are distributed in accordance with Section 4.1 hereof and applicable law, subject to the relative priorities described herein; and

(iii) will not object to the forbearance by ABL Agent or the ABL Claimholders from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies, in each case, relating to the ABL Priority Collateral (provided that nothing in this clause (iii) shall be interpreted or construed under any circumstances to limit the rights of the Note Security Agent to commence any Enforcement Action or exercise any rights or remedies in accordance with the terms of Section 3.1(a)(i) above).

(b) Until the Discharge of ABL Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, subject to Section 3.1(a)(i), ABL Agent and the ABL Claimholders shall have the exclusive right: (i) to commence and maintain an Enforcement Action or otherwise enforce rights or exercise remedies (including set-off, recoupment and the right to credit bid their debt), in each case, with respect to ABL Priority Collateral; provided that Note Security Agent shall have the credit bid rights set forth in Section 3.1(c)(vi); and (ii) subject to Section 5.1, to make determinations regarding the release, disposition, or restrictions with respect to the ABL Priority Collateral without any consultation with or the consent of Note Security Agent or any Note Claimholder; provided, that for the avoidance of doubt, the foregoing shall not require the release of any Lien in favor of Note Security Agent or any Note Claimholders with respect to the ABL Priority Collateral except to the extent required by Section 5.1; provided, further, that, in the case of clauses (i) and (ii), any proceeds of ABL Priority Collateral received by ABL Agent in excess of those necessary to achieve a Discharge of ABL Obligations are distributed in accordance with Section 4.1 hereof and applicable law. In commencing or maintaining any Enforcement Action or otherwise exercising rights and remedies with respect to the ABL Priority Collateral, ABL Agent and the ABL Claimholders may enforce the provisions of the ABL Loan Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion in compliance with any applicable law and without consultation with Note Security Agent or any Note Claimholder and regardless of whether any such exercise is adverse to the interest of any Note Claimholder. Such exercise and enforcement shall include the rights of

an agent appointed by them to sell or otherwise dispose of ABL Priority Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and other applicable law and of a secured creditor under any Bankruptcy Law of any applicable jurisdiction.

(i) file a claim or statement of interest with respect to the Note Obligations and/or Excess Note Obligations; provided that an Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor;

(ii) take any action (not adverse to the priority status of the Liens on the ABL Priority Collateral securing the ABL Obligations, or the rights of ABL Agent or the ABL Claimholders to exercise remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce or receive any value on account of except as expressly set forth in this Agreement) its Lien on the ABL Priority Collateral;

(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims or Liens of the Note Claimholders, including any claims secured by the ABL Priority Collateral, if any, in each case in accordance with the terms of this Agreement;

(iv) file, propose, support or vote on any plan of reorganization, arrangement, compromise or liquidation, file any proof of claim, make other filings and make any arguments and motions that are, in each case, not inconsistent with the terms of this Agreement; provided that no filing, proposal or filing of any claim or vote, or pleading related to such claim or vote, to accept or reject a disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or any other document, agreement or proposal similar to the foregoing by Note Security Agent or any Note Claimholder may be made, filed or cast if any provision of the disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or such other document, agreement or proposal similar to the foregoing is in contravention of any of the provisions of this Agreement;

(v) exercise any of its rights or remedies with respect to the ABL Priority Collateral after the termination of the ABL Standstill Period to the extent permitted by Section 3.1(a)(i); and

(vi) bid for or purchase ABL Priority Collateral at any public, private or judicial foreclosure upon such Collateral initiated by ABL Agent or any ABL Claimholder, or any sale of ABL Priority Collateral during an Insolvency or Liquidation Proceeding; provided that such bid may not include a “credit bid” in respect of any Note Obligations unless the cash proceeds of such bid are otherwise sufficient to cause, and used to cause, the Discharge of ABL Obligations.

Note Security Agent, on behalf of itself and the Note Claimholders represented by it, agrees that it will not take or receive any ABL Priority Collateral or any proceeds of ABL Priority Collateral in connection with the exercise of any right or remedy (including set-off and recoupment) with respect to any ABL Priority Collateral in its capacity as a secured creditor and that it will not take or receive any distribution (whether or not constituting ABL Priority Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates on account of or in exchange for such party’s interest in the ABL Priority Collateral or other rights as a secured creditor in respect of the ABL Priority Collateral, unless and until the Discharge of ABL Obligations has occurred, except in connection with any foreclosure expressly permitted by Section 3.1(a)(i) to the extent Note Security Agent and the other Note Claimholders are permitted to retain the proceeds thereof in accordance with Section 4.2. Without limiting the generality of the foregoing, unless and until the Discharge of ABL Obligations has occurred, except as expressly provided in Sections 3.1(a), 7.3(b), 7.5 and this Section 3.1(c), the sole right of Note Security Agent and the Note Claimholders with respect to the ABL Priority Collateral is to hold a Lien on the ABL Priority Collateral (and not to exercise or receive any value on account of such Lien) pursuant to the applicable Note Collateral Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of ABL Obligations has occurred.

(d) Subject to Sections 3.1(a) and 3.1(c) and Section 7.3(b):

(i) Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, agrees that Note Security Agent and the Note Claimholders represented by it will not take any action with respect to ABL Priority Collateral that would hinder any exercise of remedies under the ABL Loan Documents with respect to ABL Priority Collateral or is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the ABL Priority Collateral, whether by foreclosure or otherwise;

(ii) Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, hereby waives any and all rights it or the Note Claimholders may have as a junior lien creditor or otherwise to object to the manner in which ABL Agent or the ABL Claimholders seek to enforce the Liens on the ABL Priority Collateral securing the ABL Obligations undertaken in accordance with this Agreement, regardless of whether any action or failure to act by or on behalf of ABL Agent or ABL Claimholders is adverse to the interest of the Note Claimholders; and

(iii) Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, hereby acknowledges and agrees that no covenant, agreement or restriction contained in the Note Collateral Documents or any other Note Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of ABL Agent or the ABL Claimholders with respect to the ABL Priority Collateral as set forth in this Agreement and the ABL Loan Documents.

(e) Except as specifically set forth in this Agreement, Note Security Agent and the Note Claimholders may exercise rights and remedies as unsecured creditors against the Company or any other Grantor that has guaranteed or granted Liens to secure the Note Obligations in accordance with the terms of the Note Documents and applicable law; provided that in the event that any Note Claimholder becomes a judgment Lien creditor as a result of its enforcement of its rights as an unsecured creditor with respect to the Note Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the ABL Obligations) as the other Liens securing the Note Obligations are subject to this Agreement.

(f) Except as specifically set forth in Sections 3.1(a) and 3.1(d), nothing in this Agreement shall prohibit the receipt by Note Security Agent or any Note Claimholders of the required payments of interest, principal and other amounts owed in respect of any Note Obligations so long as such receipt is not the direct or indirect result of the exercise by Note Security Agent or any other Note Claimholders of rights or remedies as a secured creditor (including set-off and recoupment) with respect to ABL Priority Collateral or enforcement in contravention of this Agreement of any Lien on ABL Priority Collateral held by any of them.

(g) Note Security Agent, on behalf of the Note Claimholders represented by it, agrees not to commence an Enforcement Action until an Enforcement Notice has been given to ABL Agent.

3.2 Restrictions on Exercise of Remedies by ABL Agent and ABL Claimholders.

(a) Until the Discharge of Note Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, ABL Agent and the ABL Claimholders represented by it:

(i) will not commence or maintain, or seek to commence or maintain, any Enforcement Action or otherwise exercise any rights or remedies with respect to the Note Priority Collateral; provided that ABL Agent may commence an Enforcement Action or otherwise exercise any or all such rights or remedies, in each case, with respect to Note Priority Collateral, after the passage of a period of at least 180 days since the later of: (x) the date on which ABL Agent declared the existence of any Event of Default under any ABL Loan Documents for which it is ABL Agent and demanded the repayment of all the principal amount of the ABL Obligations thereunder; and (y) the date on which Note Security Agent received notice from ABL Agent of such declaration of an Event of Default and demand for repayment, (the “Note Standstill Period”); provided, further, that notwithstanding anything herein to the contrary, in no event shall ABL Agent or any ABL Claimholder take any Enforcement Action with respect to the Note Priority Collateral if, notwithstanding the expiration of the Note Standstill Period, Note Security Agent or Note Claimholders shall have commenced and be diligently pursuing an Enforcement Action or other exercise of their rights or remedies in each case with respect to all or any material portion of the Note Priority Collateral or seeking to lift or dissolve any stay or other injunction preventing them from exercising such rights (prompt notice of such exercise to be given to ABL Agent);

(ii) will not contest, protest or object to any foreclosure proceeding or action brought by Note Security Agent or any Note Claimholder with respect to Note Priority Collateral or any other exercise by Note Security Agent or any Note Claimholder of any rights and remedies relating to the Note Priority Collateral under the Note

Documents or otherwise (including any Enforcement Action initiated by or supported by Note Security Agent or any Note Claimholder), in each case so long as any proceeds received by Note Security Agent in excess of those necessary to achieve a Discharge of Note Obligations are distributed in accordance with Section 4.1 hereof and applicable law, subject to the relative priorities described herein; and

(iii) will not object to the forbearance by Note Security Agent or the Note Claimholders from bringing or pursuing any foreclosure proceeding or action or any other exercise of any rights or remedies, in each case, relating to the Note Priority Collateral (provided that nothing in this clause (iii) shall be interpreted or construed under any circumstances to limit the rights of the ABL Agent to commence any Enforcement Action or exercise any rights or remedies in accordance with the terms of Section 3.1(a)(i) above).

(b) Until the Discharge of Note Obligations has occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, subject to Sections 3.2(a)(i), 3.3 and 3.4, Note Security Agent and the Note Claimholders shall have the exclusive right: (i) to commence and maintain an Enforcement Action or otherwise enforce rights or exercise remedies (including set-off, recoupment and the right to credit bid their debt), in each case, with respect to Note Priority Collateral; provided that ABL Agent shall have the credit bid rights set forth in Section 3.2(c)(vi); and (ii) subject to Section 5.1, to make determinations regarding the release, disposition, or restrictions with respect to the Note Priority Collateral without any consultation with or the consent of ABL Agent or any ABL Claimholder; provided, that for the avoidance of doubt, the foregoing shall not require the release of any Lien in favor of ABL Agent or any ABL Claimholders with respect to the Note Priority Collateral except to the extent required by Section 5.1; provided, further, that, in the case of clauses (i) and (ii), any proceeds of Note Priority Collateral received by Note Security Agent in excess of those necessary to achieve a Discharge of Note Obligations are distributed in accordance with Section 4.1 and applicable law, subject to the relative priorities described herein. In commencing or maintaining any Enforcement Action or otherwise exercising rights and remedies with respect to the Note Priority Collateral, Note Security Agent and the Note Claimholders may, subject to Sections 3.4 and 3.5, enforce the provisions of the Note Documents and exercise remedies thereunder, all in such order and in such manner as they may determine in the exercise of their sole discretion in compliance with any applicable law and without consultation with ABL Agent or any ABL Claimholder and regardless of whether any such exercise is adverse to the interest of any ABL Claimholder. Such exercise and enforcement shall include the rights of an agent appointed by them to sell or otherwise dispose of Note Priority Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured creditor under the UCC and of a secured creditor under any Bankruptcy Law of any applicable jurisdiction.

(i) file a claim or statement of interest with respect to the ABL Obligations and/or Excess ABL Obligations; provided that an Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor;

(ii) take any action (not adverse to the priority status of the Liens on the Note Priority Collateral securing the Note Obligations, or the rights of Note Security Agent or the Note Claimholders to exercise remedies in respect thereof) in order to create, perfect, preserve or protect (but not enforce or receive any value on account of except as expressly set forth herein) its Lien on the Note Priority Collateral;

(iii) file any necessary responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any person objecting to or otherwise seeking the disallowance of the claims or Liens of the ABL Claimholders, including any claims secured by the Note Priority Collateral, if any, in each case in accordance with the terms of this Agreement;

(iv) file, propose, support or vote on any plan of reorganization, arrangement, compromise or liquidation, file any proof of claim, make other filings and make any arguments and motions that are, in each case, not inconsistent with the terms of this Agreement; provided that no filing, proposal or filing of any claim or vote, or pleading related to such claim or vote, to accept or reject a disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or any other document, agreement or proposal similar to the foregoing by ABL Agent or any ABL Claimholder may be made, filed or cast if any provision of the disclosure statement, plan of reorganization, arrangement, compromise or liquidation, or such other document, agreement or proposal similar to the foregoing is in contravention of any of the provisions of this Agreement;

(v) exercise any of its rights or remedies with respect to the Note Priority Collateral after the termination of the Note Standstill Period to the extent permitted by Sections 3.2(a)(i), 3.3 and 3.4;

(vi) bid for or purchase Note Priority Collateral at any public, private or judicial foreclosure upon such Collateral initiated by Note Security Agent or any Note Claimholder, or any sale of Note Priority Collateral during an Insolvency or Liquidation Proceeding; provided that such bid may not include a “credit bid” in respect of any ABL Obligations unless the cash proceeds of such bid are otherwise sufficient to cause, and used to cause, the Discharge of Note Obligations; and

(vii) exercise any of its rights with respect to any to the Note Priority Collateral set forth in Section 3.3 and/or 3.4.

Except as otherwise provided in Sections 3.3, 3.4, and 3.5, ABL Agent, on behalf of itself and the ABL Claimholders represented by it, agrees that it will not take or receive any Note Priority Collateral or any proceeds of Note Priority Collateral in connection with the exercise of any right or remedy (including set-off and recoupment) with respect to any Note Priority Collateral in its capacity as a secured creditor and that it will not take or receive any distribution (whether or not constituting Note Priority Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates on account of or in exchange for such party’s interest in the Note Priority Collateral or other rights as a secured creditor in respect of the Note Priority Collateral, unless and until the Discharge of Note Obligations has occurred,

except in connection with any foreclosure expressly permitted by Section 3.2(a)(i) to the extent ABL Agent and the other ABL Claimholders are permitted to retain the proceeds thereof in accordance with Section 4.2. Without limiting the generality of the foregoing, unless and until the Discharge of Note Obligations has occurred, except as expressly provided in Sections 3.2(a), 3.3, 3.4, 3.5, 7.3(b), 7.5 and this Section 3.2(c), the sole right of ABL Agent and the ABL Claimholders with respect to the Note Priority Collateral is to hold a Lien on the Note Priority Collateral (and not to exercise or receive any value on account of such Lien) pursuant to the ABL Collateral Documents for the period and to the extent granted therein and to receive a share of the proceeds thereof, if any, after the Discharge of Note Obligations has occurred.

(d) Subject to Sections 3.2(a) and 3.2 (c), Sections 3.3 and 3.4 and Section 7.3(b):

(i) ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, agrees that ABL Agent and ABL Claimholders will not take any action with respect to Note Priority Collateral that would hinder any exercise of remedies under the Note Documents with respect to Note Priority Collateral or is otherwise prohibited hereunder, including any sale, lease, exchange, transfer or other disposition of the Note Priority Collateral, whether by foreclosure or otherwise;

(ii) ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, hereby waives any and all rights it or the ABL Claimholders represented by it may have as a junior lien creditor or otherwise to object to the manner in which Note Security Agent or the Note Claimholders seek to enforce the Liens on the Note Priority Collateral securing the Note Obligations undertaken in accordance with this Agreement, regardless of whether any action or failure to act by or on behalf of Note Security Agent or Note Claimholders is adverse to the interest of the ABL Claimholders; and

(iii) ABL Agent, for itself and on behalf of each other Claimholder represented by it, hereby acknowledges and agrees that no covenant, agreement or restriction contained in the ABL Collateral Documents or any other ABL Loan Document (other than this Agreement) shall be deemed to restrict in any way the rights and remedies of Note Security Agent or the Note Claimholders with respect to the Note Priority Collateral as set forth in this Agreement and the Note Documents.

(e) Except as specifically set forth in this Agreement, including, without limitation, Section 7.3, ABL Agent and the ABL Claimholders may exercise rights and remedies as unsecured creditors against the Company or any other Grantor that has guaranteed or granted Liens to secure the ABL Obligations in accordance with the terms of the ABL Loan Documents and applicable law; provided that in the event that any ABL Claimholder becomes a judgment Lien creditor as a result of its enforcement of its rights as an unsecured creditor with respect to the ABL Obligations, such judgment Lien shall be subject to the terms of this Agreement for all purposes (including in relation to the Note Obligations) as the other Liens securing the ABL Obligations are subject to this Agreement.

(f) Except as specifically set forth in Sections 3.2(a) and 3.2(d), nothing in this Agreement shall prohibit the receipt by ABL Agent or any ABL Claimholders of the required payments of interest, principal and other amounts owed in respect of the ABL Obligations so long as such receipt is not the direct or indirect result of the exercise by ABL Agent or any other ABL Claimholders of rights or remedies as a secured creditor (including set-off and recoupment) with respect to the Note Priority Collateral or enforcement in contravention of this Agreement of any Lien on Note Priority Collateral held by any of them.

(g) ABL Agent, on behalf of the ABL Claimholders represented by it, agrees not to commence an Enforcement Action until an Enforcement Notice has been given to Note Security Agent.

3.3 Collateral Access Rights.

(a) If (A) Note Security Agent, or any agent or representative of Note Security Agent, shall, after any Note Default, obtain possession or physical control of any of the Note Priority Collateral consisting of (x) any Real Estate Asset that is a Mortgaged Premises or any other Note Priority Collateral located thereon or (y) Equipment, or (B) Note Security Agent shall sell or otherwise dispose of any Note Priority Collateral consisting of (x) any Real Estate Asset that is a Mortgaged Premises or any other Note Priority Collateral located thereon or (y) Equipment to any third party (each a “Third Party Purchaser”), Note Security Agent shall promptly notify ABL Agent in writing of that fact, and ABL Agent shall within 10 Business Days (or such longer period as may be agreed by Note Security Agent in its sole discretion) thereafter, notify Note Security Agent in writing as to whether ABL Agent desires to exercise access rights under this Section 3.3. In addition, if ABL Agent, or any agent or representative of ABL Agent, shall obtain possession or physical control of any of the Note Priority Collateral, following the delivery to Note Security Agent of an Enforcement Notice with respect to the Disposition of any ABL Priority Collateral, then ABL Agent shall within 10 Business Days (or such longer period as may be agreed by Note Security Agent in its sole discretion) notify Note Security Agent in writing that such ABL Agent is exercising its access rights under this Agreement and its rights under Section 3.4 in respect of such ABL Priority Collateral. Upon delivery of such notice of exercise of access rights by ABL Agent to Note Security Agent, the parties shall confer in good faith to coordinate with respect to ABL Agent’s exercise of such access rights. Consistent with the definition of “Access Period”, access rights may apply to differing portions of the Note Priority Collateral at differing times, in which case, a differing Access Period will apply to each such portion.

(b) Subject to Section 3.3(e), during any pertinent Access Period, ABL Agent and its agents, representatives and designees shall have an irrevocable, non-exclusive right to have access to, and a royalty-free, rent-free right to use, the Note Priority Collateral consisting of (x) any Real Estate Asset constituting a Mortgaged Premises or any other Note Priority Collateral located thereon and (y) Equipment, for the purpose of (i) arranging for and effecting the sale or disposition of any ABL Priority Collateral, including the production, completion, packaging and other preparation of such ABL Priority Collateral for sale or disposition; (ii) selling the ABL Priority Collateral (by public auction, private sale or other sale, whether in bulk, in lots or to customers in the ordinary course of business or otherwise and which sale may include augmented Inventory of the same type sold in any Grantor’s business); (iii) storing or otherwise dealing with the ABL Priority Collateral; (iv) taking any action necessary to complete the assembly, manufacture, processing, packaging, storage, sale or disposal (whether in bulk, in lots or to customers in the ordinary course of business or otherwise), transportation or shipping and/or

removal of, in any lawful manner (A) work-in-process; (B) raw materials; (C) Inventory; or (D) any other item of ABL Priority Collateral, or (v) completing any contract/project on behalf of any Grantor(s) to the extent that ABL Agent shall reasonably determine that such completion is necessary for or would materially increase the likelihood of the collection by ABL Agent of all Accounts, Chattel Paper, and Receivables consisting of ABL Priority Collateral at the time ABL Agent shall give its notice under Section 3.3(a) above that ABL Agent wishes to exercise its rights under this Section 3.3. Note Security Agent shall not bear expense for any of the actions in the preceding sentence. During any such Access Period, ABL Agent and its representatives (and persons employed on their behalf) may continue to operate, service, maintain, process and sell the ABL Priority Collateral, as well as to engage in bulk sales of ABL Priority Collateral; provided, however, that ABL Agent and the other ABL Claimholders shall be obligated to pay any utility, rental, lease or similar charges and payments owed to third parties that accrue during, or that arise as a result of, such use to the extent not paid for by the Grantors. ABL Agent shall take proper and reasonable care under the circumstances of any Note Priority Collateral that is used by it during the Access Period and repair any physical damage (ordinary wear-and-tear excepted) caused by such ABL Agent or its agents, representatives or designees, and ABL Agent shall comply with all applicable laws in all material respects in connection with its use or occupancy of the Note Priority Collateral. ABL Agent and the other ABL Claimholders shall reimburse Note Security Agent for any damage to property (ordinary wear-and-tear excepted) directly caused by the acts or omissions of ABL Agent and Persons under ABL Agent’s control to the extent not repaired and shall indemnify and hold harmless Note Security Agent and the other Note Claimholders represented by it for any injury, claim, loss, damage, cost or liability to Persons directly caused by the acts or omissions of ABL Agent or Persons under ABL Agent’s control; provided, however, that ABL Agent and the other ABL Claimholders will not be liable for any diminution in the value of the Note Priority Collateral caused by the absence of the ABL Priority Collateral therefrom and none of the ABL Claimholders have any duty or liability to maintain the Note Priority Collateral in a condition or manner better than that in which it was maintained prior to the access or use thereof by any or all of the ABL Claimholders. In no event shall ABL Agent or the other ABL Claimholders have any liability to Note Security Agent and/or the Note Claimholders hereunder as a result of any condition (including any environmental condition, claim or liability) on or with respect to the Note Priority Collateral existing prior to the date of the exercise by ABL Agent of its rights under this Agreement. ABL Agent and Note Security Agent shall cooperate and use reasonable efforts to ensure that their activities during the Access Period as described above do not unduly interfere with the activities of the other as described above, including the right of Note Security Agent to commence foreclosure of the Note Priority Collateral or show the Note Priority Collateral to prospective purchasers and to ready the Note Priority Collateral for sale.

(c) If Note Security Agent shall foreclose or otherwise sell any of the Note Priority Collateral consisting of (x) any Real Estate Asset that is a Mortgaged Premises or any other Note Priority Collateral located thereon or (y) Equipment, Note Security Agent will notify the buyer thereof of the existence of this Agreement and that the buyer is acquiring such Note Priority Collateral subject to the terms of this Agreement (specifically including the rights of ABL Agent under this Section 3.3 and Section 3.4 hereof). Subject to Section 3.3(e), the rights of ABL Agent and the other ABL Claimholders under this Section 3.3 and Section 3.4 during each applicable Access Period or Use Period shall continue notwithstanding such foreclosure, sale or other disposition by Note Security Agent.

(d) ABL Agent and the other ABL Claimholders shall have the right to bring an action to enforce their rights under this Section 3.3 and Section 3.4, including an action seeking possession of the applicable Collateral and/or specific performance of this Section 3.3 and Section 3.4.

3.4 Note General Intangibles Rights/Access to Information. Note Security Agent hereby grants (to the full extent of its rights and interests, if any) to ABL Agent and its agents, representatives and designees (a) an irrevocable royalty-free, rent-free nonexclusive license and lease (which will be binding on any successor or assignee of any Note Priority Collateral) to use, all of the Note Priority Collateral consisting of Note General Intangibles (including, for the avoidance of doubt, Intellectual Property), and any computer or other data processing Equipment included in the Note Priority Collateral necessary in connection therewith, to (i) collect all Accounts included in ABL Priority Collateral; (ii) copy, use, or preserve any and all information relating to any of the ABL Priority Collateral; and (iii) finish and sell any Goods or Inventory constituting ABL Priority Collateral and (b) an irrevocable royalty-free license (which will be binding on any successor or assignee of the Note General Intangibles) to use any and all Note General Intangibles (including, for the avoidance of doubt, Intellectual Property) at any time in connection with any Enforcement Action by ABL Agent or such agents, representatives and designees; provided, however, that ABL Agent exercising such rights and the other ABL Claimholders represented by it shall be obligated to pay any utility, rental, lease or similar charges and payments owed to third parties that accrue during, or that arise as a result of, such use to the extent not paid for by the Grantors; provided, further, however, (A) the royalty-free, rent-free license and lease granted in clause (a) with respect to the applicable Note Priority Collateral (exclusive of any Note General Intangibles (including Intellectual Property)), shall be subject to Section 3.3(e) and shall only apply during, and immediately expire upon the end of, (1) the Access Period applicable to such Note Priority Collateral located on any Real Estate Asset that is a Mortgaged Premises and (2) the Use Period with respect to any Note Priority Collateral not located on any Real Estate Asset that is a Mortgaged Premises and (B) the royalty-free license granted in clause (b) with respect to any Note General Intangibles shall only apply during, and immediately expire upon the end of, the Use Period (provided that such expiration shall be without prejudice to the sale or other disposition of the ABL Priority Collateral in accordance with applicable law).

In the event that ABL Agent shall, in the exercise of its rights under the ABL Loan Documents or otherwise, receive possession or control of any books and records of any Grantor which contain information identifying or pertaining to the Note Priority Collateral, ABL Agent shall promptly either make available to Note Security Agent such books and records for inspection and duplication or provide to Note Security Agent copies thereof. In the event that Note Security Agent shall, in the exercise of its rights under the Note Documents or otherwise, receive possession or control of any books and records of any Grantor which contain information identifying or pertaining to any of the ABL Priority Collateral, Note Security Agent shall promptly either make available to ABL Agent such books and records for inspection and duplication or provide ABL Agent copies thereof.

3.5 Set-Off and Tracing of and Priorities in Proceeds.

(a) Note Security Agent, on behalf of the Note Claimholders represented by it, acknowledges and agrees that, to the extent Note Security Agent or any other Note Claimholder exercises its rights of set-off against any ABL Priority Collateral, the amount of such set-off shall be held and distributed pursuant to Section 4.1(a). ABL Agent, on behalf of the ABL Claimholders represented by it, acknowledges and agrees that, to the extent ABL Agent or any other ABL Claimholder exercises its rights to set-off against any Note Priority Collateral, the amount of such set-off shall be held and distributed pursuant to Section 4.1(b).

(b) ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, and Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, agree that prior to an issuance of an Enforcement Notice, or the commencement of any Insolvency or Liquidation Proceeding, any proceeds of Collateral, whether or not deposited under Account Agreements, used by any Grantor to acquire property constituting Collateral shall not (solely as between ABL Agent and Note Security Agent and as between the ABL Claimholders and the Note Claimholders) be treated as proceeds of Collateral for purposes of determining the relative priorities of the ABL Claimholders and the Note Claimholders in the Collateral so acquired.

(c) ABL Agent, on behalf of itself and the ABL Claimholders represented by it, and Note Security Agent, on behalf of itself and the Note Claimholders represented by it, agrees that after an issuance of an Enforcement Notice, each such Person shall cooperate in good faith to identify the proceeds of the ABL Priority Collateral and the Note Priority Collateral, as the case may be (it being agreed that after an issuance of an Enforcement Notice, unless ABL Agent has actual knowledge to the contrary, all funds deposited under Account Agreements (other than any Account Agreement to which the Note Priority Collateral Account or the Note Specified Blocked Account is subject) and then applied to the ABL Obligations shall be presumed to be ABL Priority Collateral (a presumption that can be rebutted by Note Security Agent); provided, however, that neither any ABL Claimholder nor any Note Claimholder shall be liable or in any way responsible for any claims or damages from conversion of the ABL Priority Collateral or Note Priority Collateral, as the case may be (it being understood and agreed that (A) the only obligation of any ABL Claimholder is to pay over to Note Security Agent, in the same form as received, with any necessary endorsements, all proceeds that such ABL Claimholder received that have been identified as proceeds of the Note Priority Collateral and (B) the only obligation of any Note Claimholder is to pay over to ABL Agent, in the same form as received, with any necessary endorsements, all proceeds that such Note Claimholder received that have been identified as proceeds of the ABL Priority Collateral). Each of ABL Agent and Note Security Agent may reasonably request in writing from the other agents an accounting of the identification of the proceeds of Collateral (and ABL Agent and Note Security Agent, as the case may be, upon which such request is made shall deliver such accounting reasonably promptly after such request is made).

SECTION 4

PAYMENTS

4.1 Application of Proceeds.

(a) So long as the Discharge of ABL Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, all of (x) any ABL Priority Collateral or any proceeds thereof received by any Agent or any Claimholder in connection with any Enforcement Action or other exercise of remedies by any Agent or any Claimholders (including under any circumstances provided for in Section 5.1(b)) and (y) any distribution (whether or not constituting ABL Priority Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates received by any Agent or any Claimholder on account of or in exchange for such party’s interest in the ABL Priority Collateral or other rights as a secured creditor in respect of the ABL Priority Collateral, including all adequate protection payments in respect of the ABL Priority Collateral (for purposes of this paragraph, “Applicable ABL Priority Collateral Distributions”), shall be delivered to and applied by ABL Agent to the ABL Obligations until the Discharge of ABL Obligations shall have occurred; provided that, subject to Section 7.5, any non-cash ABL Priority Collateral or non-cash proceeds or Applicable ABL Priority Collateral Distributions may be held by ABL Agent as ABL Priority Collateral unless the failure to apply such amounts would be commercially unreasonable. Upon the Discharge of ABL Obligations, ABL Agent shall deliver any remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it in the same form as received, with any necessary endorsements (such endorsements shall be without recourse and without any representation or warranty) to Note Security Agent, to be applied by Note Security Agent to the Note Obligations until the Discharge of Note Obligations shall have occurred. Upon the Discharge of Note Obligations, Note Security Agent shall (x) if there are any Excess ABL Obligations, deliver any remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it in same form as received, with any necessary endorsements (such endorsements shall be without recourse and without any representation or warranty) to ABL Agent, to be applied to the Excess ABL Obligations until the Discharge of Excess ABL Obligations shall have occurred, or (y) if there are no Excess ABL Obligations, then (I) to the extent there are any Excess Note Obligations, Note Security Agent shall apply any remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it thereto until the Discharge of Excess Note Obligations shall have occurred, and (II) if there are no Excess Note Obligations, or if the Discharge of Excess Note Obligations shall have occurred pursuant to the immediately preceding clause (I), Note Security Agent shall deliver any remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it to such other Person as may be lawfully entitled thereto or as a court of competent jurisdiction may otherwise direct. If ABL Agent shall receive remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it under clause (x) of the preceding sentence, and there shall be any ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions remaining after Discharge of Excess ABL Obligations shall have occurred, then (i) if there are any Excess Note Obligations, ABL Agent shall deliver any remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it in same form as received, with any necessary endorsements (such endorsements shall be without recourse and without any representation or warranty) to Note Security Agent, to be applied to the Excess Note Obligations until the Discharge of Excess Note Obligations shall have occurred, or (ii) if there are no Excess Note Obligations, ABL Agent shall deliver any remaining ABL Priority Collateral and proceeds thereof and Applicable ABL Priority Collateral Distributions held by it to such other Person as may be lawfully entitled thereto or as a court of competent jurisdiction may otherwise direct.

(b) So long as the Discharge of Note Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, all of (x) any Note Priority Collateral or any proceeds thereof received by any Agent or any Claimholder in connection with any Enforcement Action or other exercise of remedies by any Agent or any Claimholders (including under any circumstances provided for in Section 5.1(b)) and (y) any distribution (whether or not constituting Note Priority Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates received by any Agent or any Claimholder on account of or in exchange for such party’s interest in the Note Priority Collateral or other rights as a secured creditor in respect of the Note Priority Collateral, including all adequate protection payments in respect of the Note Priority Collateral (for purposes of this paragraph, “Applicable Note Priority Collateral Distributions”), shall be delivered to and applied by such Note Security Agent to the Note Obligations until the Discharge of Note Obligations shall have occurred; provided that, subject to Section 7.5, any non-cash Note Priority Collateral or non-cash proceeds or Applicable Note Priority Collateral Distributions may be held by Note Security Agent as Note Priority Collateral unless the failure to apply such amounts would be commercially unreasonable. Upon the Discharge of Note Obligations, Note Security Agent shall deliver any remaining Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it in the same form as received, with any necessary endorsements (such endorsements shall be without recourse and without any representation or warranty) to ABL Agent, to be applied by ABL Agent to the ABL Obligations in until the Discharge of ABL Obligations shall have occurred. Upon the Discharge of ABL Obligations, ABL Agent shall (x) if there are any outstanding Excess Note Obligations, deliver any remaining Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it in same form as received, with any necessary endorsements (such endorsements shall be without recourse and without any representation or warranty) to Note Security Agent, to be applied to the Excess Note Obligations until the Discharge of Excess Note Obligations shall have occurred, or (y) if there are no outstanding Excess Note Obligations, (I) to the extent there are any Excess ABL Obligations, ABL Agent shall apply any remaining Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it thereto until the Discharge of Excess ABL Obligations shall have occurred, and (II) if there are no Excess ABL Obligations, or if the Discharge of Excess ABL Obligations shall have occurred pursuant to the immediately preceding clause (I), ABL Agent shall deliver any remaining Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it to such other Person as may be lawfully entitled thereto or as a court of competent jurisdiction may otherwise direct. If Note Security Agent shall receive remaining Tern Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it under clause (x) of the preceding sentence, and there shall be any Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions remaining after Discharge of Excess Note Obligations shall have occurred, then (i) if there are any Excess ABL Obligations, Note Security Agent shall deliver any remaining Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it in same form as received, with any necessary endorsements (such endorsements shall be without recourse and without any representation or warranty) to ABL Agent, to be applied to the Excess ABL Obligations until the Discharge of Excess ABL Obligations shall have occurred, or (i) if there are no Excess ABL Obligations, Note Security Agent shall deliver any remaining Note Priority Collateral and proceeds thereof and Applicable Note Priority Collateral Distributions held by it to such other Person as may be lawfully entitled thereto or as a court of competent jurisdiction may otherwise direct.

(c) In the event that prior to the Discharge of ABL Obligations, proceeds of the Collateral are received in connection with a Disposition, loss, condemnation or other disposition (whether voluntary or involuntary) of Collateral that involves both ABL Priority Collateral and Note Priority Collateral, for the purposes of this Agreement with respect to such Disposition, loss, condemnation or other disposition, the ABL Priority Collateral consisting of Accounts shall be deemed to have a valuation equal to the book value of each such Account (but not less than the book value of such Account at the time the Grantors incurred ABL Obligations based upon the existence of such Account), the ABL Priority Collateral consisting of Inventory shall be deemed to have a value equal to the orderly liquidation value of such Inventory based on and consistent with the then-current appraisal of such Inventory received by ABL Agent with respect thereto (but not less than the book value of such Inventory at the time the Grantors incurred ABL Obligations based upon the existence of such Inventory) or, if no such appraisal exists or if the most current appraisal is more than one year old, the book value thereof (but not less than the book value of such Inventory at the time the Grantors incurred ABL Obligations based upon the existence of such Inventory). In the event that proceeds of the Collateral are received in connection with a Disposition of all or substantially all of the capital stock or other equity interests issued by any Grantor and the Liens of ABL Agent, on behalf of the ABL Claimholders represented by it, on any Collateral in which such Grantor has an interest are released, then such capital stock or other equity interests so disposed of shall be deemed to be Collateral that involves both ABL Priority Collateral and Note Priority Collateral such that ABL Priority Collateral shall also be deemed to have been disposed of in connection with such Disposition for the purposes of this Agreement.

(d) Notwithstanding anything herein to the contrary but without in any way changing the distribution of proceeds of the Collateral as between the ABL Obligations and the Note Obligations, so long as the Discharge of Additional Notes Collateral Debt Obligations has not occurred no distribution of proceeds of any Collateral in the circumstances described in this Section 4.1, whether received by the Initial Note Security Agent or the Additional Notes Collateral Debt Representative, shall be made to the Initial Note Claimholders.

4.2 Payments Over. (a) Subject to Section 3.5 and Section 7.5, so long as the Discharge of Prior Lien Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against the Company or any other Grantor, any Subordinated Lien Collateral or any proceeds thereof (including any Subordinated Lien Collateral or proceeds thereof subject to Liens that have been avoided or otherwise invalidated) received by any Subordinated Lien Agent or any Subordinated Lien Claimholders in connection with any Enforcement Action or other exercise of any right or remedy relating to the Subordinated Lien Collateral (less any reasonable out of pockets costs and expenses incurred in connection with any such Enforcement Action), and any distribution (whether or not constituting Subordinated Lien Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates received by any Subordinated Lien Agent or any Subordinated Lien Claimholder on account of or in exchange for such party’s interest in the Subordinated Lien Collateral or other rights as a secured creditor in respect of the Subordinated Lien Collateral, in all cases shall be segregated and held in trust and forthwith paid over to the Prior Lien Agent for the benefit of the Prior Lien Claimholders in the same form as received, with any necessary

endorsements (which endorsements shall be without recourse and without any representations or warranties). Each Prior Lien Agent is hereby authorized to make any such endorsements as agent for the Subordinated Lien Agent or Subordinated Lien Claimholders. This authorization is coupled with an interest and is irrevocable until the Discharge of Prior Lien Obligations.

(b) Subject to Section 7.5, so long as the Discharge of Prior Lien Obligations has not occurred, if in any Insolvency or Liquidation Proceeding the Subordinated Lien Agent or any Subordinated Lien Claimholders shall receive any distribution of money or other property in respect of the Prior Lien Collateral (including any assets or proceeds subject to Liens that have been avoided or otherwise invalidated) or any distribution (whether or not constituting Prior Lien Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates on account of or in exchange for such party’s interest in the Prior Lien Collateral or other rights as a secured creditor in respect of the Prior Lien Collateral, such money or other property shall be segregated and held in trust and forthwith paid over to the Prior Lien Agent for the benefit of the Prior Lien Claimholders in the same form as received, with any necessary endorsements (which endorsements shall be without recourse and without any representations or warranties). Any Lien received by the Subordinated Lien Agent or any Subordinated Lien Claimholders in respect of any of the Subordinated Lien Obligations in any Insolvency or Liquidation Proceeding shall be subject to the terms of this Agreement.

(c) Subject to Section 7.5, so long as the Discharge of Additional Notes Collateral Debt Obligations has not occurred, if in any Insolvency or Liquidation Proceeding the Initial Note Security Agent or any Initial Note Claimholders shall receive any distribution of money or other property in respect of the Collateral (including any assets or proceeds subject to Liens that have been avoided or otherwise invalidated) or any distribution (whether or not constituting Collateral or the proceeds thereof) from the Company, any other Grantor or any of their respective bankruptcy estates on account of or in exchange for such party’s interest in the Collateral or other rights as a secured creditor in respect of the Collateral, such money or other property shall be segregated and held in trust and, to the extent not otherwise required to be delivered to the ABL Agent pursuant to this Section 4.2, forthwith paid over to the Additional Notes Collateral Debt Representative for the benefit of the Additional Notes Claimholders in the same form as received, with any necessary endorsements (which endorsements shall be without recourse and without any representations or warranties). Any Lien received by the Initial Notes Security Agent or any Initial Note Claimholders in respect of any of the Initial Note Obligations in any Insolvency or Liquidation Proceeding shall be subject to the terms of this Agreement.

SECTION 5

OTHER AGREEMENTS

5.1 Releases.

(a) (i) If in connection with any Enforcement Action by ABL Agent or any other exercise of ABL Agent’s remedies in respect of the ABL Priority Collateral, in each case prior to the Discharge of ABL Obligations, ABL Agent, for itself or on behalf of any of the ABL Claimholders represented by it, releases any of its Liens on any part of the ABL Priority Collateral, then the Liens, if any, of Note Security Agent, for itself or for the benefit of the Note Claimholders

represented by it, on such ABL Priority Collateral shall be automatically, unconditionally and simultaneously released. Note Security Agent, for itself or on behalf of the Note Claimholders represented by it, promptly shall execute and deliver to ABL Agent or Grantor such termination statements, releases and other documents as ABL Agent or Grantor may reasonably request in writing to effectively confirm the foregoing releases.

(ii) If in connection with any Enforcement Action by Note Security Agent or any other exercise of Note Security Agent’s remedies in respect of the Note Priority Collateral, in each case prior to the Discharge of Note Obligations, Note Security Agent, for itself or on behalf of the Note Claimholders represented by it, releases any of its Liens on any part of the Note Priority Collateral, then the Liens, if any, of ABL Agent, for itself or for the benefit of the ABL Claimholders represented by it, on such Note Priority Collateral, shall be automatically, unconditionally and simultaneously released. ABL Agent, for itself and on behalf of the ABL Claimholders represented by it, shall promptly execute and deliver to Note Security Agent or Grantor such termination statements, releases and other documents as Note Security Agent or Grantor may reasonably request in writing to effectively confirm the foregoing releases.

(b) If, in connection with any sale, lease, exchange, transfer or other disposition of any Collateral by any Grantor (collectively, a “Disposition”) (other than in connection with an Enforcement Action or other exercise of the Prior Lien Agent’s remedies in respect of the Collateral which shall be governed by Section 5.1(a) above) that is either (i) not prohibited under the terms of the Prior Lien Loan Documents and not expressly prohibited under the terms of the Subordinated Lien Loan Documents and occurs when no Event of Default under the Subordinated Lien Loan Documents has occurred and is continuing, or (ii) conducted by the applicable Grantor with the written permission of the applicable requisite Prior Lien Claimholders at a time when an Event of Default has occurred and is continuing under the Prior Lien Loan Documents, the Prior Lien Agent, for itself and on behalf of the Prior Lien Claimholders represented by it, releases any of its Liens on any part of the Collateral, or, if applicable, releases any Guarantor Subsidiary from its obligations under its guaranty of the Prior Lien Obligations, in each case other than in connection with, or following, the Discharge of Prior Lien Obligations, then the Liens, if any, of the Subordinated Lien Agent, for itself or for the benefit of the Subordinated Lien Claimholders, on such Collateral, and the obligations of such Guarantor Subsidiary under its guaranty of the Subordinated Lien Obligations, shall be automatically, unconditionally and simultaneously released. The Subordinated Lien Agent, for itself or on behalf of any such Subordinated Lien Claimholders, promptly shall execute and deliver to the Prior Lien Agent or such Guarantor Subsidiary such termination statements, releases and other documents as the Prior Lien Agent or such Grantor may reasonably request in writing to effectively confirm such release.

(c) Until the Discharge of Prior Lien Obligations occurs, the Subordinated Lien Agent, for itself and on behalf of each other Subordinated Lien Claimholder, hereby irrevocably constitutes and appoints each Prior Lien Agent and any officer or agent of the Prior Lien Agent, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of the Subordinated Lien Agent or such holder or in such Prior Lien Agent’s own name, from time to time in the Prior Lien Agent’s discretion, for the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Section 5.1, including any endorsements or other instruments of transfer or release. This power is coupled with an interest and is irrevocable until the Discharge of Prior Lien Obligations.

(d) Until the Discharge of Prior Lien Obligations occurs, to the extent that the Prior Lien Agent and the Prior Lien Claimholders represented by it (i) have released any Lien on Collateral or any Guarantor Subsidiary from its obligation under its guaranty and any such Liens or guaranty are later reinstated and (ii) subject to Section 2.3 and Section 2.4, obtain any new liens or additional guarantees from any Guarantor Subsidiary, then the Subordinated Lien Agent, for itself and on behalf of each other Subordinated Lien Claimholder, shall be granted a Lien on any such Collateral (except to the extent such lien represents a Declined Lien with respect to the Indebtedness and/or letters of credit represented by the Subordinated Lien Agent), subject to the lien subordination provisions of this Agreement, and an additional guaranty, as the case may be.

5.2 Insurance. (a) Unless and until the Discharge of ABL Obligations has occurred, ABL Agent and the ABL Claimholders represented by it shall have the sole and exclusive right, subject to the rights of the Grantors under the ABL Loan Documents, to adjust settlement for any insurance policy covering the ABL Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the ABL Priority Collateral. Unless and until the Discharge of ABL Obligations has occurred, and subject to the rights of the Grantors under the ABL Loan Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to the ABL Priority Collateral shall be paid first, to ABL Agent for the benefit of the ABL Claimholders pursuant to the terms of the ABL Loan Documents (including for purposes of cash collateralization of letters of credit), second, upon a Discharge of ABL Obligations, and subject to the rights of the Grantors under the Note Documents, to Note Security Agent for the benefit of the Note Claimholders to the extent required under the Note Documents, third, upon a Discharge of Note Obligations, to ABL Agent for the benefit of holders of Excess ABL Obligations, if any, fourth, upon a Discharge of Excess ABL Obligations, to Note Security Agent for the benefit of holders of Excess Note Obligations, if any, and fifth, to the extent no Excess ABL Obligations or Excess Note Obligations are outstanding, to the owner of the subject property, such other Person as may be lawfully entitled thereto or as a court of competent jurisdiction may otherwise direct. Until the Discharge of ABL Obligations has occurred, if Note Security Agent or any Note Claimholders shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall segregate and hold in trust and forthwith pay such proceeds over to ABL Agent in accordance with the terms of Section 4.2.

(b) Unless and until the Discharge of Note Obligations has occurred, Note Security Agent and the Note Claimholders represented by it shall have the sole and exclusive right, subject to the rights of the Grantors under the Note Documents, to adjust settlement for any insurance policy covering the Note Priority Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding (or any deed in lieu of condemnation) affecting the Note Priority Collateral. Unless and until the Discharge of Note Obligations has occurred, and subject to the rights of the Grantors under the Note Documents, all proceeds of any such policy and any such award (or any payments with respect to a deed in lieu of condemnation) if in respect to the Note Priority Collateral shall be paid first, to Note Security Agent for the benefit of the Note Claimholders pursuant to the terms of the Note Documents,

second, upon a Discharge of Note Obligations, and subject to the rights of the Grantors under the ABL Loan Documents, to ABL Agent for the benefit of the ABL Claimholders to the extent required under the ABL Collateral Documents (including for purposes of cash collateralization of letters of credit), third, upon a Discharge of ABL Obligations, to Note Security Agent for the benefit of holders of Excess Note Obligations, if any, fourth, upon a Discharge of Excess Note Obligations, to ABL Agent for the benefit of holders of Excess ABL Obligations, if any, and fifth, to the extent no Excess Note Obligations or Excess ABL Obligations are outstanding, to the owner of the subject property, such other Person as may be lawfully entitled thereto or as a court of competent jurisdiction may otherwise direct. Until the Discharge of Note Obligations has occurred, if ABL Agent or any ABL Claimholders shall, at any time, receive any proceeds of any such insurance policy or any such award or payment in contravention of this Agreement, it shall segregate and hold in trust and forthwith pay such proceeds over to Note Security Agent in accordance with the terms of Section 4.2.

(d) To effectuate the foregoing, and to the extent that the pertinent insurance company agrees to issue such endorsements, ABL Agent and Note Security Agent shall each receive separate lender’s loss payable endorsements naming themselves as loss payee, as their interests may appear, with respect to policies which insure the ABL Priority Collateral and the Note Priority Collateral.

(e) To the extent that an insured loss covers or constitutes both ABL Priority Collateral and Note Priority Collateral, then ABL Agent and Note Security Agent will work jointly and in good faith to collect, adjust or settle (subject to the rights of the relevant grantors under the ABL Loan Documents and the Note Documents) under the relevant insurance policy, with the proceeds thereof being applied in accordance with the provisions of Section 4.1 of this Agreement.

5.3 Amendments to ABL Loan Documents and Note Documents.

(a) The ABL Loan Documents and Note Documents, respectively, may be amended, restated, amended and restated, supplemented or Refinanced or otherwise modified from time in accordance with their terms, all without affecting the Lien subordination or other provisions of this Agreement; provided, however, (i) without the prior written consent of the Note Security Agent, the ABL Loan Documents may not be amended, restated, amended and restated, supplemented, Refinanced or modified to restrict or prohibit amendments, supplements or modifications to the Note Documents to the extent such amendments, supplements or modifications to the Note Documents are otherwise permitted under the ABL Loan Documents as of the date hereof and (ii) without the prior written consent of ABL Agent, the Note Documents may not be amended, restated, amended and restated, supplemented, Refinanced or modified to restrict or prohibit amendments, supplements or modifications to the ABL Loan Documents to the extent such amendments, supplements or modifications to the ABL Loan Documents are otherwise permitted under the Note Documents as of the date hereof. (i) The ABL Obligations and Excess ABL Obligations may be Refinanced without notice to, or the consent of the Note Security Agent or the other Note Claimholders and (ii) the Note Obligations and Excess Note Obligations may be Refinanced without notice to, or consent of, the ABL Agent or the other ABL Claimholders, in each case, without affecting the Lien subordination and other provisions of this Agreement so long

as such Refinancing is on terms and conditions that would not violate this Agreement (i.e., such Refinancing is on terms and conditions that would not violate this Agreement (specifically including this Section 5.3(a)) if such Refinancing were an amendment/amendment and restatement of the ABL Obligations and Excess ABL Obligations or Note Obligations and Excess Note Obligations (as applicable)), any of the Note Documents or the ABL Loan Documents in effect at that time; provided, however, that, in each case, the holders of any such Refinancing debt that is purported to be secured by a Lien on any Collateral shall bind themselves in a writing satisfactory to the ABL Agent and Note Security Agent to the terms of this Agreement; provided, further, however, that, if such Refinancing debt is secured by a Lien on any Collateral the holders of such Refinancing debt shall be deemed bound by the terms hereof regardless of whether or not such writing is provided.

(b) ABL Agent and Note Security Agent shall each use good faith efforts to notify the other Agents of any written amendment or modification to the ABL Loan Documents and the Note Documents, respectively, but the failure to provide such notice shall not create a cause of action against the party failing to give such notice or create any claim or right on behalf of any other Person.

5.4 Confirmation of Subordination in Subordinated Lien Collateral Documents. Prior to the Discharge of Prior Lien Obligations, the Company agrees that each Subordinated Lien Loan Document shall, unless otherwise agreed by each Agent, include the following language (or language to similar effect approved by the Prior Lien Agent):

“Notwithstanding anything herein to the contrary, the lien and security interest granted to the [ABL][Note Security] Agent pursuant to this Agreement and the exercise of any right or remedy by the [ABL][Note Security] Agent hereunder are subject to the provisions of the Intercreditor Agreement, dated as of May 29, 2020 (as amended, restated, supplemented or otherwise modified from time to time, the “Intercreditor Agreement”), among PNC Bank, National Associations, as ABL Agent and Wilmington Trust, National Association, as Initial Note Security Agent and certain other persons party or that may become party thereto from time to time. In the event of any conflict between the terms of the Intercreditor Agreement and this Agreement, the terms of the Intercreditor Agreement shall govern and control.”

5.5 Gratuitous Bailee/Agent for Perfection.

(a) ABL Agent and Note Security Agent agree to hold that part of the Collateral that is in its possession or control (or in the possession or control of its agents or bailees) to the extent that possession or control thereof is taken to perfect a Lien thereon under the UCC (such Collateral being the “Pledged Collateral”) as (i) in the case of ABL Agent, the collateral agent for the ABL Claimholders under the ABL Loan Documents for which ABL Agent is acting as agent or, in the case of Note Security Agent, the collateral agent for the Note Claimholders under the Note Documents for which Note Security Agent is acting as agent and (ii) non-fiduciary, gratuitous bailee for the benefit of each other Agent (such bailment being intended, among other things, to satisfy the requirements of Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC)

and any assignee solely for the purpose of perfecting the security interest granted under the ABL Loan Documents and the Note Documents, respectively, subject to the terms and conditions of this Section 5.5. Each Agent hereby appoints each other Agent as its non-fiduciary gratuitous bailee for the purposes of perfecting its security interest in all Pledged Collateral in which such other Agent has a perfected security interest under the UCC. Solely with respect to any Deposit Accounts under the control of ABL Agent (other than any Deposit Account holding only ABL Exclusive Priority Cash Collateral), ABL Agent agrees to also hold such control as gratuitous agent for Note Security Agent subject to the terms and conditions of this Section 5.5. Solely with respect to the Note Priority Collateral Account under the control of Note Security Agent, Note Security Agent agrees to also hold such control as gratuitous agent for ABL Agent subject to the terms and conditions of this Section 5.5. ABL Agent and Note Security Agent hereby accept such appointments pursuant to this Section 5.5(a) and acknowledge and agree that they shall hold the Pledged Collateral for the benefit of the other Claimholders with respect to any Pledged Collateral and that any proceeds received by such Agent under any Pledged Collateral shall be applied in accordance with Section 4.

(b) Each Agent shall have no obligation whatsoever to any Claimholders or other Agents to ensure that the Pledged Collateral is genuine or owned by any of the Grantors, to perfect the security interest of any other Agent or any other Claimholder or to preserve rights or benefits of any Person except as expressly set forth in this Section 5.5. The duties or responsibilities of ABL Agent under this Section 5.5 shall be limited solely to holding the Pledged Collateral as bailee (and with respect to Deposit Accounts, as gratuitous agent) in accordance with this Section 5.5 and delivering the Pledged Collateral upon a Discharge of ABL Obligations as provided in Section 5.5(d) below or upon a Discharge of Note Obligations as provided in Section 5.5(e) below.

(c) None of the Agents shall have by reason of the Collateral Documents, this Agreement or any other document a fiduciary relationship in respect of any other Agent or Claimholder represented by such other Agent. Each Agent and the respective Claimholders represented by it hereby waives and releases each other Agent and the respective Claimholders represented by it from all claims and liabilities arising pursuant to such Agent’s role under this Section 5.5 as gratuitous bailee and gratuitous agent with respect to the Pledged Collateral. It is understood and agreed that the interests of ABL Agent and the ABL Claimholders, on the one hand, and Note Security Agent and the Note Claimholders on the other hand, may differ and each of ABL Agent and Note Security Agent and each of the ABL Claimholders and Note Claimholders shall be fully entitled to act in their own interest without taking into account the interests of any other Agents or Claimholders represented by such other Agent.

(d) Upon the Discharge of ABL Obligations, ABL Agent shall deliver the remaining Pledged Collateral in its possession (if any) together with any necessary endorsements (such endorsement shall be without recourse and without any representation or warranty) in the following order: first, if a Discharge of Note Obligations has not already occurred, to Note Security Agent until a Discharge of Note Obligations has occurred and second, if a Discharge of Excess ABL Obligations has not already occurred, to ABL Agent for application to any Excess ABL Obligations until a Discharge of Excess ABL Obligations has occurred, and third, if a Discharge of Excess Note Obligations has not already occurred, to Note Security Agent for application to any Excess Note Obligations until a Discharge of Excess Note Obligations has occurred, and

fourth, to the Company or as a court of competent jurisdiction may otherwise direct. ABL Agent further agrees to take all other action reasonably requested in writing by Note Security Agent at the expense of the Company in connection with Note Security Agent obtaining a first-priority interest in the ABL Priority Collateral.

(e) Upon the Discharge of Note Obligations, Note Security Agent shall deliver the remaining Pledged Collateral in its possession (if any) together with any necessary endorsements (such endorsement shall be without recourse and without any representation or warranty) in the following order: first, to ABL Agent until a Discharge of ABL Obligations has occurred second, if a Discharge of Excess Note Obligations has not already occurred, to Note Security Agent for application to any Excess Note Obligations until a Discharge of Excess Note Obligations has occurred, and third, if a Discharge of Excess ABL Obligations has not already occurred, to ABL Agent for application to any Excess ABL Obligations until a Discharge of Excess ABL Obligations has occurred, and fourth, to the Company or as a court of competent jurisdiction may otherwise direct. Note Security Agent further agrees to take all other action reasonably requested in writing by ABL Agent at the expense of the Company in connection with ABL Agent obtaining a first-priority interest in the Note Priority Collateral.

(f) Notwithstanding anything to the contrary contained in this Agreement, any obligation of either Agent, to make any delivery to the other Agent under Section 5.5(d), Section 5.5(e) or Section 5.6 is subject to (i) the order of any court of competent jurisdiction or (ii) any automatic stay imposed in connection with any Insolvency or Liquidation Proceeding

5.6 When Discharge of Obligations Deemed to Not Have Occurred.

(a) If, at any time after the Discharge of ABL Obligations has occurred or contemporaneously therewith, the Company enters into any Replacement ABL Credit Agreement which Replacement ABL Credit Agreement is permitted by the Note Documents, then such Discharge of ABL Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken as a result of the occurrence of such first Discharge of ABL Obligations), and, from and after the date on which the agent/trustee (or, in the absence of any such agent/trustee, all of the lender(s) under such Replacement ABL Credit Agreement) under such Replacement ABL Credit Agreement becomes a party to this Agreement in accordance with Section 9.22 hereof, the obligations under such Replacement ABL Credit Agreement automatically shall be treated as ABL Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the agent/trustee (or, in the absence of any such agent/trustee, all of the lender(s) under such Replacement ABL Credit Agreement) under such Replacement ABL Credit Agreement shall be the “ABL Agent” for all purposes of this Agreement and this Agreement shall continue or be reinstated (as applicable) in full force and effect, and any such prior termination (if any) shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement (if any). Upon receipt of a designation from the Company in accordance with Section 9.22 hereof, Note Security Agent shall promptly (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as the Company or such new ABL Agent shall reasonably request in writing in order to provide to the new ABL Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement and (b) deliver to the new ABL Agent any Pledged Collateral

constituting ABL Priority Collateral held by it together with any necessary endorsements (or otherwise allow the new ABL Agent to obtain control of such Pledged Collateral). As provided in Section 9.22 hereof, the new ABL Agent shall agree in a writing addressed to Note Security Agent and the Note Claimholders to be bound by the terms of this Agreement. Subject to Section 2.5 hereof, if the new ABL Obligations under the new ABL Loan Documents are secured by assets of the Grantors constituting Collateral that do not also secure the Note Obligations, then the Note Obligations shall be secured at such time by a second-priority Lien on such assets to the same extent provided in the Note Collateral Documents and this Agreement except to the extent such Lien on such assets constitutes a Declined Lien.

(b) If, at any time after the Discharge of Note Obligations has occurred or contemporaneously therewith, the Company enters into any Replacement Note Indenture which Replacement Note Indenture is permitted by the ABL Loan Documents, then such Discharge of Note Obligations shall automatically be deemed not to have occurred for all purposes of this Agreement (other than with respect to any actions taken as a result of the occurrence of such first Discharge of Note Obligations), and, from and after the date on which the agent/trustee (or, in the absence of any such agent/trustee, all of the lender(s)/noteholder(s) under such Replacement Note Indenture) under such Replacement Note Indenture becomes a party to this Agreement in accordance with Section 9.22 hereof, the obligations under such Replacement Note Indenture automatically shall be treated as Note Obligations for all purposes of this Agreement, including for purposes of the Lien priorities and rights in respect of Collateral set forth herein, and the agent/trustee (or, in the absence of any such agent/trustee, all of the lender(s)/noteholder(s) under such Replacement Note Indenture) under such Replacement Note Indenture shall be the “Note Security Agent” for all purposes of this Agreement and this Agreement shall continue or be reinstated (as applicable) in full force and effect, and any such prior termination (if any) shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement (if any). Upon receipt of a designation from the Company in accordance with Section 9.22 hereof, ABL Agent shall promptly (a) enter into such documents and agreements (including amendments or supplements to this Agreement) as the Company or such new Note Security Agent shall reasonably request in writing in order to provide to the new Note Security Agent the rights contemplated hereby, in each case consistent in all material respects with the terms of this Agreement and (b) deliver to the new Note Security Agent any Pledged Collateral constituting Note Priority Collateral held by it together with any necessary endorsements (or otherwise allow the new Note Security Agent to obtain control of such Pledged Collateral). As provided in Section 9.22 hereof, the new Note Security Agent shall agree in a writing addressed to Note Security Agent and the Note Claimholders to be bound by the terms of this Agreement. Subject to Section 2.5 hereof, if the new Note Obligations under the new Note Documents are secured by assets of the Grantors constituting Collateral that do not also secure the ABL Obligations, then the ABL Obligations shall be secured at such time by a second-priority Lien on such assets to the same extent provided in the ABL Collateral Documents and this Agreement except to the extent such Lien on such assets constitutes a Declined Lien.

SECTION 6

PURCHASE OPTIONS

6.1 Notice of Exercise.

(a) Upon the occurrence and during the continuance of an (i) acceleration of the ABL Obligations and termination of commitments to advance further revolving loans under the ABL Credit Agreement, (ii) an Insolvency or Liquidation Proceeding, (iii) an ABL Default resulting from the failure to make principal or interest payments of the ABL Obligations when due under the ABL Loan Documents, if such ABL Default remains unwaived for at least forty-five (45) consecutive days, (iv) the termination of the ABL Standstill Period or the Note Standstill Period, (v) the ABL Lenders ceasing to make extensions of credit under the ABL Credit Agreement at any time that there is borrowing base availability under the ABL Credit Agreement (regardless of whether a default or Event of Default (as defined in the ABL Credit Agreement) exists under the ABL Credit Agreement) for a period of three (3) or more consecutive Business Days at a time “cash dominion” exists with respect to Deposit Accounts, or (vi) Note Security Agent shall have received an Enforcement Notice or a notice from ABL Agent of ABL Agent’s intention to commence foreclosure or take any other action to sell or otherwise realize upon any Collateral, all or a portion of the Note Claimholders, acting as a single group, shall have the option at any time upon five (5) Business Days’ prior written notice to ABL Agent to purchase all of the ABL Obligations from the ABL Claimholders. Such notice from such Note Claimholders to ABL Agent shall be irrevocable.

(b) Upon the occurrence and during the continuance of an (i) acceleration of the Note Obligations under the Note Indenture, (ii) an Insolvency or Liquidation Proceeding, (iii) a Note Default resulting from the failure to make principal or interest payments of the Note Obligations when due under the Note Documents, if such Note Default remains unwaived for at least forty-five (45) consecutive days, (iv) the termination of the ABL Standstill Period or the Note Standstill Period, or (v) ABL Agent shall have received an Enforcement Notice or a notice from Note Security Agent of Note Security Agent’s intention to commence foreclosure or take any other action to sell or otherwise realize upon any Collateral, all or a portion of the ABL Claimholders, acting as a single group, shall have the option at any time upon five (5) Business Days’ prior written notice to Note Security Agent(which notice the Note Security Agent will promptly forward to the Note Claimholders) to purchase all of the Note Obligations from the Note Claimholders. Such notice from such ABL Claimholders to Note Security Agent shall be irrevocable.

(c) Upon the occurrence and during the continuance of an (i) acceleration of the Additional Notes Collateral Debt Obligations under the Additional Notes Collateral Debt Agreement, (ii) an Insolvency or Liquidation Proceeding, (iii) any Note Default with respect to the Additional Notes Collateral Debt Documents, if such Note Default remains unwaived for at least forty-five (45) consecutive days, (iv) the termination of the ABL Standstill Period or the Note Standstill Period, or (v) Initial Note Security Agent shall have received an Enforcement Notice or a notice from the Additional Notes Collateral Debt Representative of such Additional Notes Collateral Debt Representative’s intention to commence foreclosure or take any other action to sell or otherwise realize upon any Collateral, all or a portion of the Initial Note Claimholders, acting as a single group, shall have the option at any time upon five (5) Business Days’ prior written notice to Additional Notes Collateral Debt Representative (which notice the Additional Notes Collateral Debt Representative will promptly forward to the Additional Notes Claimholders) to purchase all of the Additional Notes Collateral Debt Obligations from the Additional Notes Claimholders. Such notice from such Initial Note Claimholders to Additional Notes Collateral Debt Representative shall be irrevocable.

6.2 Purchase and Sale.

(a) On the date specified by the relevant Note Claimholders in the notice contemplated by Section 6.1(a) above (which shall not be less than five (5) Business Days, nor more than twenty (20) calendar days, after the receipt by ABL Agent of the notice of the relevant Note Claimholder’s election to exercise such option), the ABL Claimholders shall sell to the relevant Note Claimholders, and the relevant Note Claimholders shall purchase from the ABL Claimholders, the ABL Obligations, provided that, ABL Agent and the ABL Claimholders shall retain all rights to be indemnified and/or held harmless by the ABL Credit Parties in accordance with the terms of the ABL Loan Documents (the “ABL Retained Indemnification Interests”).

(b) On the date specified by the relevant ABL Claimholders in the notice contemplated by Section 6.1(b) above (which shall not be less than five (5) Business Days, nor more than twenty (20) calendar days, after the receipt by Note Security Agent of the notice of the relevant ABL Claimholder’s election to exercise such option), the Note Claimholders shall sell to the relevant ABL Claimholders, and the relevant ABL Claimholders shall purchase from the Note Claimholders, the Note Obligations, provided that, Note Security Agent and the Note Claimholders shall retain all rights to be indemnified and/or held harmless by the Notes Parties in accordance with the terms of the Note Documents (the “Note Retained Indemnification Interests”).

(c) On the date specified by the relevant Initial Note Claimholders in the notice contemplated by Section 6.1(c) above (which shall not be less than five (5) Business Days, nor more than twenty (20) calendar days, after the receipt by Additional Notes Collateral Debt Representative of the notice of the relevant Initial Note Claimholders’ election to exercise such option), the Additional Notes Claimholders shall sell to the relevant Initial Note Claimholders, and the relevant Initial Notes Claimholders shall purchase from the Additional Notes Claimholders, the Additional Notes Collateral Debt Obligations, provided that, Additional Notes Collateral Debt Representative and the Additional Notes Claimholders shall retain all rights to be indemnified and/or held harmless by the Notes Parties in accordance with the terms of the Additional Notes Collateral Debt Documents (the “Additional Notes Retained Indemnification Interests”).

(d) (x) Interest consisting of Excess ABL Obligations shall continue to accrue and be payable in accordance with the terms of the ABL Loan Documents, (y) the ABL Retained Indemnification Interests and any Excess ABL Obligations (collectively, the “ABL Retained Interest”) shall continue to be secured by the Collateral, and (z) the ABL Retained Interest shall be paid (or cash collateralized, as applicable) in accordance with the terms of the ABL Credit Agreement and this Agreement. Each ABL Claimholder shall continue to have all rights and remedies of a lender under the ABL Credit Agreement and the other ABL Loan Documents; provided, that no ABL Claimholder shall have any right to vote on or otherwise consent to any amendment, waiver, departure from, or other modification of any provision of any ABL Loan Document except that the consent of ABL Agent shall be required for (i) those matters that require the agreement of all lenders under the ABL Credit Agreement to reduce interest or principal and (ii) matters in contravention of the provisions and priorities set forth in this Agreement with respect to the ABL Retained Interest.

(e) (x) Interest consisting of Excess Note Obligations shall continue to accrue and be payable in accordance with the terms of the Note Documents, (y) the Note Retained Indemnification Interest and any Excess Note Obligations (collectively, the “Note Retained Interest”) shall continue to be secured by the Collateral, and (z) the Note Retained Interest shall be paid (or cash collateralized, as applicable) in accordance with the terms of the Note Indenture and this Agreement. Each Note Claimholder shall continue to have all rights and remedies of a holder under the Note Indenture and the other Note Documents; provided, that no Note Claimholder shall have any right to vote on or otherwise consent to any amendment, waiver, departure from, or other modification of any provision of any Note Document except that the consent of Note Security Agent shall be required for (i) those matters that require the agreement of all holders under the Note Indenture to reduce interest or principal and (ii) matters in contravention of the provisions and priorities set forth in this Agreement with respect to the Note Retained Interest.

(f) (x) Interest consisting of Excess Additional Notes Obligations shall continue to accrue and be payable in accordance with the terms of the Additional Notes Collateral Debt Documents, (y) the Additional Notes Retained Indemnification Interest and any Excess Note Obligations (collectively, the “Additional Notes Retained Interest”) shall continue to be secured by the Collateral, and (z) the Additional Notes Retained Interest shall be paid (or cash collateralized, as applicable) in accordance with the terms of the Additional Notes Collateral Debt Agreement and this Agreement. Each Additional Notes Claimholder shall continue to have all rights and remedies of a holder under the Additional Notes Collateral Debt Agreement and the other Additional Notes Collateral Debt Documents; provided, that no Additional Notes Claimholder shall have any right to vote on or otherwise consent to any amendment, waiver, departure from, or other modification of any provision of any Additional Notes Collateral Debt Document except that the consent of Additional Notes Collateral Debt Representative shall be required for (i) those matters that require the agreement of all holders under the Additional Notes Collateral Debt Agreement to reduce interest or principal and (ii) matters in contravention of the provisions and priorities set forth in this Agreement with respect to the Additional Notes Retained Interest.

(g) In the event that any one or more of the Note Claimholders exercises and consummates the purchase option set forth in this Section 6, (i) ABL Agent shall have the right, but not the obligation, to immediately resign under the ABL Credit Agreement, and (ii) the purchasing Note Claimholders shall have the right, but not the obligation, to require ABL Agent to immediately resign under the ABL Credit Agreement. If ABL Agent shall resign under this Section 6.2(g), to the extent permitted by applicable law, upon the written request of Note Security Agent (with all costs and expenses in connection therewith to be for the account of Note Security Agent and to be paid by Grantors), ABL Agent shall, without recourse or warranty, take commercially reasonable steps to transfer the possession of the Collateral, if any, then in its possession to Note Security Agent, except in the event and to the extent (A) such Collateral is sold, liquidated, or otherwise disposed of by any of the ABL Claimholders or by a Grantor as provided herein in full or partial satisfaction of any of the ABL Obligations or (B) it is otherwise required by any order of any court or other governmental authority or applicable law.

(h) In the event that any one or more of the ABL Claimholders exercises and consummates the purchase option set forth in this Section 6, (i) the Note Security Agent shall have the right, but not the obligation, to immediately resign under the Note Indenture, and (ii) the purchasing ABL Claimholders shall have the right, but not the obligation, to require Note Security

Agent to immediately resign under the Note Indenture. If Note Security Agent shall resign under this Section 6.2(h), to the extent permitted by applicable law, upon the written request of ABL Agent (with all costs and expenses in connection therewith to be for the account of ABL Agent and to be paid by Grantors) Note Security Agent shall, without recourse or warranty, take commercially reasonable steps to transfer the possession of the Collateral, if any, then in its possession to ABL Agent, except in the event and to the extent (A) such Collateral is sold, liquidated, or otherwise disposed of by any of the Note Claimholders or by a Grantor as provided herein in full or partial satisfaction of any of the Note Obligations or (B) it is otherwise required by any order of any court or other governmental authority or applicable law.

(i) In the event that any one or more of the Initial Note Claimholders exercises and consummates the purchase option set forth in this Section 6, (i) the Additional Notes Collateral Debt Representative shall have the right, but not the obligation, to immediately resign under the Additional Notes Collateral Debt Agreement, and (ii) the purchasing Initial Note Claimholders shall have the right, but not the obligation, to require Additional Notes Collateral Debt Representative to immediately resign under the Additional Notes Collateral Debt Agreement. If Additional Notes Collateral Debt Representative shall resign under this Section 6.2(i), to the extent permitted by applicable law, upon the written request of Initial Note Security Agent (with all costs and expenses in connection therewith to be for the account of Initial Note Security Agent and to be paid by Grantors), Additional Notes Collateral Debt Representative shall, without recourse or warranty, take commercially reasonable steps to transfer the possession of the Collateral, if any, then in its possession to Initial Note Security Agent, except in the event and to the extent (A) such Collateral is sold, liquidated, or otherwise disposed of by any of the Additional Notes Claimholders or by a Grantor as provided herein in full or partial satisfaction of any of the Additional Notes Collateral Debt Obligations or (B) it is otherwise required by any order of any court or other governmental authority or applicable law.

6.3 Payment of Purchase Price.

(a) Upon the date of such purchase and sale, the relevant Note Claimholders, the relevant Initial Note Claimholders, or the relevant ABL Claimholders, as applicable, shall (i) pay to ABL Agent for the benefit of the ABL Claimholders (with respect to a purchase of the ABL Obligations), to Note Security Agent for the benefit of the Note Claimholders (with respect to a purchase of the Note Obligations), or to Additional Notes Collateral Debt Representative (with respect to a purchase of the Additional Notes Collateral Debt Obligations) as the purchase price therefor the full amount of all the ABL Obligations, Note Obligations, or Additional Notes Collateral Debt Obligations, as applicable, then outstanding and unpaid (including principal, interest, fees and expenses, including reasonable attorneys’ fees and legal expenses) in cash, (ii) with respect to a purchase of the ABL Obligations, furnish cash collateral to ABL Agent in a manner and in such amounts as ABL Agent determines is reasonably necessary to secure the ABL Claimholders in connection with any issued and outstanding letters of credit, hedging obligations and cash management obligations secured by the ABL Loan Documents, (iii) [reserved], (iv) with respect to a purchase of the ABL Obligations, agree to reimburse ABL Agent and the ABL Claimholders for any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) in connection with any commissions, fees, costs or expenses related to any issued and outstanding letters of credit as described above and any checks or other payments provisionally credited to the ABL Obligations, and/or as to which ABL Agent has not yet received final payment,

(v) with respect to a purchase of ABL Obligations, furnish cash collateral to ABL Agent in such amount as ABL Agent determines is reasonably necessary to secure the ABL Claimholders in respect of indemnification obligations of the ABL Credit Parties as to matters or circumstances known to ABL Agent at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the ABL Claimholders, (vi) with respect to a purchase of Note Obligations, furnish cash collateral to Note Security Agent in such amount as Note Security Agent determines is reasonably necessary to secure the Note Claimholders in respect of indemnification obligations of the Notes Parties as to matters or circumstances known to Note Security Agent at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Note Claimholders, (vii) with respect to a purchase of Additional Notes Obligations, furnish cash collateral to Additional Notes Collateral Debt Representative in such amount as Additional Notes Collateral Debt Representative determines is reasonably necessary to secure the Additional Notes Claimholders in respect of indemnification obligations of the Notes Parties as to matters or circumstances known to Additional Notes Collateral Debt Representative at the time of the purchase and sale which would reasonably be expected to result in any loss, cost, damage or expense (including reasonable attorneys’ fees and legal expenses) to the Additional Notes Claimholders, and (viii) agree to indemnify and hold harmless the ABL Claimholders, the Note Claimholders, or the Additional Notes Claimholders, as applicable, from and against any loss, liability, claim, damage or expense (including reasonable fees and expenses of legal counsel) arising out of any claim asserted by a third party in respect of the ABL Obligations, the Note Obligations, or the Additional Notes Collateral Debt Obligations, as applicable, as a direct result of any acts by any Note Claimholder, any ABL Claimholder, or any Additional Notes Claimholder, as applicable, occurring after the date of such purchase. Such purchase price and cash collateral shall be remitted by wire transfer in federal funds to such bank account in New York, New York as ABL Agent, Note Security Agent, or Additional Notes Collateral Debt Representative, as applicable, may designate in writing for such purpose.

(b) Anything contained in this Section 6.3 to the contrary notwithstanding, with respect to a purchase of ABL Obligations, in the event that the purchasing Note Claimholders receive all or a portion of any prepayment premium, make-whole obligation, or early termination fee payable pursuant to the ABL Loan Documents in cash within 90 days following the date on which the purchasing Note Claimholders pay the purchase price described in clause (a) above, then, within 3 Business Days after receipt by such Note Claimholders of such amounts, the purchasing Note Claimholders shall pay a supplemental purchase price to ABL Agent, for the benefit of the ABL Claimholders, in respect of their purchase under this Section 6 in an amount equal to the portion of the prepayment premium, make-whole obligation or early termination fee received by the purchasing Note Claimholders to which the ABL Claimholders would have been entitled to receive had the purchase under this Section 6 not occurred.

(c) Anything contained in this Section 6.3 to the contrary notwithstanding, with respect to a purchase of Note Obligations, in the event that the purchasing ABL Claimholders receive all or a portion of any prepayment premium, make-whole obligation, or early termination fee payable pursuant to the Note Documents in cash within 90 days following the date on which the purchasing ABL Claimholders pay the purchase price described in clause (a) above, then, within 3 Business Days after receipt by such ABL Claimholders of such amounts, the purchasing

ABL Claimholders shall pay a supplemental purchase price to Note Security Agent, for the benefit of the Note Claimholders, in respect of their purchase under this Section 6 in an amount equal to the portion of the prepayment premium, make-whole obligation or early termination fee received by the purchasing ABL Claimholders to which the Note Claimholders would have been entitled to receive had the purchase under this Section 6 not occurred.

(d) Anything contained in this Section 6.3 to the contrary notwithstanding, with respect to a purchase of Additional Notes Collateral Debt Obligations, in the event that the purchasing Initial Note Claimholders receive all or a portion of any prepayment premium, make-whole obligation, or early termination fee payable pursuant to the Additional Notes Collateral Debt Documents in cash within 90 days following the date on which the purchasing Initial Note Claimholders pay the purchase price described in clause (a) above, then, within 3 Business Days after receipt by such Additional Notes Claimholders of such amounts, the purchasing Initial Note Claimholders shall pay a supplemental purchase price to Note Security Agent, for the benefit of the Additional Notes Claimholders, in respect of their purchase under this Section 6 in an amount equal to the portion of the prepayment premium, make-whole obligation or early termination fee received by the purchasing Initial Note Claimholders to which the Additional Notes Claimholders would have been entitled to receive had the purchase under this Section 6 not occurred.

6.4 Limitation on Representations and Warranties.

(a) Such purchase shall be expressly made without representation or warranty of any kind by any selling party (or the applicable ABL Agent or Note Security Agent) and without recourse of any kind, except that the selling party shall represent and warrant: (a) the amount of the ABL Obligations or Note Obligations, as applicable, being purchased from it, (b) that such ABL Claimholder or Note Claimholder, as applicable, owns the ABL Obligations or Note Obligations, as applicable, free and clear of any Liens or encumbrances and (c) that such ABL Claimholder or Note Claimholder, as applicable, has the right to assign such ABL Obligations or Note Obligations, as applicable, and the assignment is duly authorized.

SECTION 7

INSOLVENCY OR LIQUIDATION PROCEEDINGS

7.1 Finance and Sale Issues.

(a) Until the Discharge of ABL Obligations has occurred, if the Company or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding and ABL Agent shall desire to permit the use of “Cash Collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code) constituting ABL Priority Collateral or proceeds thereof or to permit any Grantor to obtain financing, whether from the ABL Claimholders, the Note Claimholders or any other Person approved by the Requisite Note Claimholders and the Requisite ABL Claimholders under Section 364 of the Bankruptcy Code or any similar Bankruptcy Law (“DIP Financing”) then Note Security Agent, on behalf of itself and the Note Claimholders represented by it, agrees that it will raise no objection and be deemed to have consented to such Cash Collateral use or DIP Financing so long as such Cash Collateral use or DIP Financing meet the following requirements: (i) the aggregate principal amount of the DIP Financing plus the aggregate outstanding amount of

ABL Principal Obligations does not exceed the ABL Cap Amount; (ii) Note Security Agent and the Note Claimholders represented by it may assert any objection with respect thereto that may be raised by an unsecured creditor of the Grantors; (iii) the terms of the DIP Financing (a) do not compel the applicable Grantor to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document, (b) do not expressly require the liquidation of all or substantially all of the Collateral prior to the default under such documentation and (c) contain interest rates and advance rates that are commercially reasonable; and (iv) any Lien on the Note Priority Collateral to secure such DIP Financing is subordinate to the Lien of Note Security Agent with respect thereto (to the extent such Lien secures Note Obligations) and to the Liens securing any DIP Financing made in accordance with Section 7.1(b) below. To the extent the Liens securing the ABL Obligations are subordinated to or pari passu with the Liens securing such DIP Financing which meets the requirements of clauses (i) through (iv) above, Note Security Agent will subordinate its Liens in the ABL Priority Collateral to the Liens securing such DIP Financing (and all obligations relating thereto) and will not request adequate protection or any other relief in connection therewith (except as expressly agreed by ABL Agent or to the extent permitted by Section 7.3). Note Security Agent agrees that it shall not, and nor shall any of the Note Claimholders, directly or indirectly, provide, offer to provide, or support any DIP Financing secured by a Lien on the ABL Priority Collateral that is senior to or pari passu with the Liens securing the ABL Obligations and DIP Financing provided by or consented to by ABL Claimholders. If, in connection with any use of Cash Collateral constituting ABL Priority Collateral or DIP Financing provided by or consented to by ABL Claimholders, any Liens on the ABL Priority Collateral held by the ABL Claimholders to secure the ABL Obligations and DIP Financing provided by or consented to by ABL Claimholders are subject to a surcharge or are subordinated to an administrative priority claim, a professional fee “carve-out,” or fees owed to the United States Trustee, then the Liens on the ABL Priority Collateral of the Note Claimholders securing the Note Obligations and any DIP Financing provided by or consented to by Note Claimholders shall also be subordinated to such interest or claim and shall remain subordinated to the Liens on the ABL Priority Collateral of the ABL Claimholders consistent with this Agreement.

(b) Until the Discharge of Note Obligations has occurred, if the Company or any other Grantor shall be subject to any Insolvency or Liquidation Proceeding and Note Security Agent shall desire to permit the use of “Cash Collateral” (as such term is defined in Section 363(a) of the Bankruptcy Code) constituting Note Priority Collateral or proceeds thereof or to permit any Grantor to obtain DIP Financing, then ABL Agent, on behalf of itself and the ABL Claimholders represented by it, agrees that it will raise no objection and be deemed to have consented to such Cash Collateral use or DIP Financing so long as such Cash Collateral use or DIP Financing meet the following requirements: (i) the aggregate principal amount of the DIP Financing plus the aggregate outstanding amount of Note Principal Obligations does not exceed the Note Cap Amount; (ii) ABL Agent and the ABL Claimholders represented by it may assert any objection with respect thereto that may be raised by an unsecured creditor of the Grantors; (iii) the terms of the DIP Financing (a) do not compel the applicable Grantor to seek confirmation of a specific plan of reorganization for which all or substantially all of the material terms are set forth in the DIP Financing documentation or a related document, (b) do not expressly require the liquidation of all or substantially all of the Collateral prior to the default under such documentation and (c) contain interest rates and advance rates that are commercially reasonable; and (iv) any Lien on the ABL Priority Collateral to secure such DIP Financing is subordinate to the Lien of ABL Agent with

respect thereto (to the extent such Lien secures ABL Obligations) and to the Liens securing any DIP Financing made in accordance with Section 7.1(a) above. To the extent the Liens securing the Note Obligations are subordinated to or pari passu with the Liens securing such DIP Financing which meets the requirements of clauses (i) through (iv) above, ABL Agent will subordinate its Liens in the Note Priority Collateral to the Liens securing such DIP Financing (and all obligations relating thereto) and will not request adequate protection or any other relief in connection therewith (except as expressly agreed by Note Security Agent or to the extent permitted by Section 7.3). ABL Agent agrees that it shall not, and nor shall any of the ABL Claimholders, directly or indirectly, provide, offer to provide, or support any DIP Financing secured by a Lien on the Note Priority Collateral that is senior to or pari passu with the Liens securing the Note Obligations and DIP Financing provided by or consented to by Note Claimholders. If, in connection with any use of Cash Collateral constituting Note Priority Collateral or DIP Financing provided by or consented to by Note Claimholders, any Liens on the Note Priority Collateral held by the Note Claimholders to secure the Note Obligations and DIP Financing provided by or consented to by Note Claimholders are subject to a surcharge or are subordinated to an administrative priority claim, a professional fee “carve-out,” or fees owed to the United States Trustee, then the Liens on the Note Priority Collateral of the ABL Claimholders securing the ABL Obligations and any DIP Financing provided by or consented to by ABL Claimholders shall also be subordinated to such interest or claim and shall remain subordinated to the Liens on the Note Priority Collateral of the Note Claimholders consistent with this Agreement.

7.2 Relief from the Automatic Stay. Until the Discharge of Prior Lien Obligations has occurred, each Subordinated Lien Agent, on behalf of itself and the Subordinated Lien Claimholders represented by it, agrees that none of them shall (i) seek (or support any other Person seeking) relief from the automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the Subordinated Lien Collateral, without the prior written consent of the Prior Lien Agent or (ii) oppose (or support any other Person in opposing) any request by any Prior Lien Agent for relief from such stay with respect to Prior Lien Collateral; provided, that if the Prior Lien Agent seeks and obtains relief from the automatic stay or other stay then the Subordinated Lien Agent may join in such relief in respect of the Subordinated Lien Collateral.

7.3 Adequate Protection.

(a) Until the Discharge of Prior Lien Obligations has occurred, each Subordinated Lien Agent, on behalf of itself and the Subordinated Lien Claimholders represented by it, agrees that none of them shall contest (or support any other Person contesting):

(i) any request by any Prior Lien Agent or any Prior Lien Claimholders for adequate protection under any Bankruptcy Law with respect to Prior Lien Collateral; provided, any Subordinated Lien Claimholder, solely in its capacity as a Prior Lien Claimholder, may object to adequate protection in the form of cash payments to the extent such payment is sought to be paid from such Subordinated Lien Claimholder’s Prior Lien Collateral or the proceeds (or advances in respect) thereof; or

(ii) any objection by any Prior Lien Agent or any Prior Lien Claimholders to any motion, relief, action or proceeding based on such Prior Lien Agent or such Prior Lien Claimholders claiming a lack of adequate protection with respect to Prior Lien Collateral.

(b) Notwithstanding the foregoing provisions in this Section 7.3, in any Insolvency or Liquidation Proceeding, (i) if the Prior Lien Claimholders (or any subset thereof) are granted adequate protection with respect to Prior Lien Collateral in the form of additional collateral in connection with any Cash Collateral use or DIP Financing, then each Subordinated Lien Agent, on behalf of itself or any of the Subordinated Lien Claimholders, may seek or request adequate protection in the form of a Lien on such additional collateral, which Lien will be subordinated to the Liens securing the Prior Lien Obligations and such Cash Collateral use or DIP Financing (and all Obligations relating thereto) on the same basis as the other Liens securing the Subordinated Lien Obligations are so subordinated to the Prior Lien Obligations under this Agreement and (ii) if the ABL Claimholders (or any subset thereof), on the one hand, and the Note Claimholders (or any subset thereof), on the other hand, are granted adequate protection with respect to the Collateral in the form of a super priority administrative expense claim in connection with any Cash Collateral use or DIP Financing, then such superpriority administrative expense claim shall be pari passu in respect of each applicable claim relating to Prior Lien Collateral, and shall be pari passu in respect of each applicable claim relating to Subordinated Lien Collateral, and all such superpriority administrative claims relating to Subordinated Lien Collateral shall be junior in right of payment to such claims relating to Prior Lien Collateral.

(c) Each Subordinated Lien Agent, for itself and on behalf of each other Subordinated Lien Claimholder represented by it, agrees that notice of a hearing to approve DIP Financing or use of Cash Collateral on an interim basis shall be adequate if delivered to such Subordinated Lien Agent at least two (2) Business Days in advance of such hearing and that notice of a hearing to approve DIP Financing or use of Cash Collateral on a final basis shall be adequate if delivered to such Subordinated Lien Agent at least fourteen (14) days in advance of such hearing.

7.4 Avoidance Issues. If any Prior Lien Claimholder is required in any Insolvency or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of the Company or any other Grantor any amount paid in respect of Prior Lien Obligations (a “Recovery”), then such Prior Lien Claimholders shall be entitled to a reinstatement of Prior Lien Obligations with respect to all such recovered amounts on the date of such Recovery, and from and after the date of such reinstatement the Discharge of Prior Lien Obligations shall be deemed not to have occurred for all purposes hereunder. If this Agreement shall have been terminated prior to such Recovery, this Agreement shall be reinstated in full force and effect, and such prior termination shall not diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto from such date of reinstatement. This Section 7.4 shall survive termination of this Agreement.

7.5 Reorganization Securities. Notwithstanding anything herein to the contrary, if, in any Insolvency or Liquidation Proceeding, debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized debtor are distributed pursuant to a plan of reorganization, arrangement, compromise or liquidation or similar dispositive restructuring plan, both on account of Prior Lien Obligations and on account of Subordinated Lien Obligations, then, to the extent the debt obligations distributed on account of the Prior Lien Obligations and on account of the Subordinated Lien Obligations are secured by Liens upon the same property, the provisions of this Agreement will survive the distribution of such debt obligations pursuant to such plan and will apply with like effect to the Liens securing such debt obligations.

7.6 Post-Petition Obligations. Neither the Subordinated Lien Agents nor any Subordinated Lien Claimholder shall oppose or seek to challenge any claim by the Prior Lien Agent or any Prior Lien Claimholder for allowance in any Insolvency or Liquidation Proceeding of Prior Lien Obligations consisting of Post-Petition Obligations to the extent of the value of any Prior Lien Claimholder’s Lien on Prior Lien Collateral, without regard to the existence of the Lien of the Subordinated Lien Agent on behalf of the Subordinated Lien Claimholders on such Collateral.

7.7 Waivers. Each Subordinated Lien Agent, for itself and on behalf of each other Subordinated Lien Claimholder represented by it, waives any claim it may hereafter have against any Prior Lien Claimholder arising out of the election of any Prior Lien Claimholder of the application of Section 1111(b)(2) of the Bankruptcy Code, and/or out of any cash collateral or financing arrangement or out of any grant of a security interest in connection with the Prior Lien Collateral in any Insolvency or Liquidation Proceeding so long as such actions are not in express contravention of the terms of this Agreement. The Subordinated Lien Claimholders agree that they will not, directly or indirectly, assert or support the assertion of, and hereby waive any right that they may have to assert or support the assertion of any claim under Section 506(c) or the “equities of the case” exception of Section 552(b) of the Bankruptcy Code as against any Prior Lien Claimholder or with respect to any of the Prior Lien Collateral to the extent securing the Prior Lien Obligations; provided, that nothing herein shall restrict the holder of any DIP Financing from having, or seeking to have, such DIP Financing repaid, in whole or in part, from the proceeds of the assertion of any claim under Section 506(c) of the Bankruptcy Code (or any comparable provision of any other Bankruptcy Law) with respect to such Prior Lien Collateral.

7.8 Separate Grants of Security and Separate Classification. Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, and ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, acknowledge and agree that:

(a) the grants of Liens pursuant to the ABL Collateral Documents and the Note Collateral Documents constitute separate and distinct grants of Liens; and

(b) because of, among other things, their differing rights in the Collateral, the Note Obligations are fundamentally different from the ABL Obligations and must be separately classified in any plan of reorganization proposed or adopted in an Insolvency or Liquidation Proceeding.

7.9 Effectiveness in Insolvency or Liquidation Proceedings. The parties hereto acknowledge that this Agreement is a “subordination agreement” under Section 510(a) of the Bankruptcy Code, which will be effective before, during and after the commencement of an Insolvency or Liquidation Proceeding. All references in this Agreement to any Grantor will include such Person as a debtor-in-possession and any receiver or trustee for such Person in an Insolvency or Liquidation Proceeding.

7.10 Asset Dispositions.

(a) Until the Discharge of ABL Obligations has occurred, Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, agrees that, in the event of any Insolvency or Liquidation Proceeding, the Note Claimholders will not seek consultation rights in connection with, and will not object or oppose (or support any Person in objecting or opposing) a motion for any Disposition of any ABL Priority Collateral free and clear of the Liens of Note Security Agent and the Note Claimholders or other claims under Sections 363, 365, 1129 or 1141 of the Bankruptcy Code, or any comparable provision of any Bankruptcy Law (and including any motion for bid procedures or other procedures related to the Disposition that is the subject of such motion), and shall be deemed to have consented to any such Disposition of any ABL Priority Collateral under Section 363(f) of the Bankruptcy Code that has been consented to by ABL Agent; provided that (i) the proceeds of such Disposition of any Collateral to be applied to the ABL Obligations or the Note Obligations are applied in accordance with Sections 4.1 and 4.2 and (ii) Note Security Agent and the Note Claimholders represented by it may assert any objection with respect thereto that may be raised by an unsecured creditor of the Grantors.

(b) Until the Discharge of Note Obligations has occurred, ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, agrees that, in the event of any Insolvency or Liquidation Proceeding, the ABL Claimholders will not seek consultation rights in connection with, and will not object or oppose (or support any Person in objecting or opposing) a motion for any Disposition of any Note Priority Collateral free and clear of the Liens of ABL Agent and the ABL Claimholders or other claims under Sections 363, 365, 1129 or 1141 of the Bankruptcy Code, or any comparable provision of any Bankruptcy Law (and including any motion for bid procedures or other procedures related to the Disposition that is the subject of such motion), and shall be deemed to have consented to any such Disposition of any Note Priority Collateral under Section 363(f) of the Bankruptcy Code that has been consented to by Note Security Agent; provided that (i) the proceeds of such Disposition of any Collateral to be applied to the ABL Obligations or the Note Obligations are applied in accordance with Sections 4.1 and 4.2 and (ii) ABL Agent and the ABL Claimholders represented by it may assert any objection with respect thereto that may be raised by an unsecured creditor of the Grantors.

(c) The Note Claimholders agree that the ABL Claimholders shall have the right to credit bid under Section 363(k) of the Bankruptcy Code with respect to any Disposition of the ABL Priority Collateral and the ABL Claimholders agree that the Note Claimholders shall have the right to credit bid under Section 363(k) of the Bankruptcy Code with respect to any Disposition of the Note Priority Collateral; provided that the Claimholders shall not be deemed to have agreed to any credit bid by other Claimholders in connection with the Disposition of Collateral consisting of both Note Priority Collateral and ABL Priority Collateral (unless the cash proceeds of such bid are otherwise sufficient to cause, and used to cause, the Discharge of the Note Obligations (in the case of any such credit bid under this proviso by any one or more ABL Claimholders) or the Discharge of the ABL Obligations (in the case of any such credit bid under this proviso by any one or more Note Claimholders). Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it, agrees that, so long as the Discharge of ABL Obligations has not occurred, no Note Claimholder shall, without the prior written consent of ABL Agent, credit bid under Section 363(k) of the Bankruptcy Code with respect to the ABL Priority Collateral unless the cash proceeds of such bid are otherwise sufficient to cause, and used to cause, the Discharge of ABL Obligations. ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it, agrees that, so long as the Discharge of Note Obligations has not occurred, no ABL Claimholder shall, without the prior written consent of Note Security Agent, credit bid under Section 363(k) of the Bankruptcy Code with respect to the Note Priority Collateral unless the cash proceeds of such bid are otherwise sufficient to cause, and used to cause, the Discharge of Note Obligations.

SECTION 8

RELIANCE; WAIVERS; ETC.

8.1 Reliance. Other than any reliance on the terms of this Agreement, ABL Agent, on behalf of itself and the ABL Claimholders represented by it, acknowledges that it and such ABL Claimholders have, independently and without reliance on Note Security Agent or any Note Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the applicable ABL Loan Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the applicable ABL Loan Documents or this Agreement. Other than any reliance on the terms of this Agreement, Note Security Agent, on behalf of itself and the Note Claimholders represented by it, acknowledges that it and such Note Claimholders have, independently and without reliance on ABL Agent or any ABL Claimholder, and based on documents and information deemed by them appropriate, made their own credit analysis and decision to enter into each of the applicable Note Documents and be bound by the terms of this Agreement and they will continue to make their own credit decision in taking or not taking any action under the applicable Note Documents or this Agreement.

8.2 No Warranties or Liability. ABL Agent, on behalf of itself and the ABL Claimholders represented by it, acknowledges and agrees that Note Security Agent and the Note Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the Note Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Except as otherwise provided herein, the Note Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the applicable Note Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. Note Security Agent, on behalf of itself and the Note Claimholders represented by it, acknowledges and agrees that each of ABL Agent and the ABL Claimholders have made no express or implied representation or warranty, including with respect to the execution, validity, legality, completeness, collectability or enforceability of any of the ABL Loan Documents, the ownership of any Collateral or the perfection or priority of any Liens thereon. Except as otherwise provided herein, the ABL Claimholders will be entitled to manage and supervise their respective loans and extensions of credit under the applicable ABL Loan Documents in accordance with law and as they may otherwise, in their sole discretion, deem appropriate. Note Security Agent and the Note Claimholders represented by it shall have no duty to ABL Agent or any of the ABL Claimholders, and ABL Agent and the ABL Claimholders represented by it shall have no duty to Note Security Agent or any of the Note Claimholders, to act or refrain from acting in a manner which allows, or results in, the occurrence or continuance of an event of default or default under any agreements with the Company or any other Grantor (including the ABL Loan Documents and the Note Documents), regardless of any knowledge thereof with which they may have or be otherwise charged with.

8.3 No Waiver of Lien Priorities.

(a) No right of the ABL Claimholders, ABL Agent or any of them to enforce any provision of this Agreement or any ABL Loan Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or any other Grantor or by any act or failure to act by any ABL Claimholder or ABL Agent, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the ABL Loan Documents or any of the Note Documents, regardless of any knowledge thereof which ABL Agent or the ABL Claimholders, or any of them, may have or be otherwise charged with. No right of the Note Claimholders, Note Security Agent or any of them to enforce any provision of this Agreement or any Note Document shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or any other Grantor or by any act or failure to act by any Note Claimholder or Note Security Agent, or by any noncompliance by any Person with the terms, provisions and covenants of this Agreement, any of the ABL Loan Documents or any of the Note Documents, regardless of any knowledge thereof which Note Security Agent or the Note Claimholders, or any of them, may have or be otherwise charged with.

(b) Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Company and the other Grantors under the ABL Loan Documents and subject to the provisions of Section 5.3), the ABL Claimholders, ABL Agent and any of them may, at any time and from time to time in accordance with the ABL Loan Documents and/or applicable law, without the consent of, or notice to, Note Security Agent or any Note Claimholders, without incurring any liabilities to Note Security Agent or any Note Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of Note Security Agent or any Note Claimholders is affected, impaired or extinguished thereby) do any one or more of the following:

(i) change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of the ABL Obligations or the Excess ABL Obligations or any Lien on any ABL Priority Collateral or guaranty thereof or any liability of the Company or any other Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the ABL Obligations or the Excess ABL Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by ABL Agent or any of the ABL Claimholders, the ABL Obligations, the Excess ABL Obligations or any of the ABL Loan Documents;

(ii) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the ABL Priority Collateral or any liability of the Company or any other Grantor to the ABL Claimholders or ABL Agent, or any liability incurred directly or indirectly in respect thereof;

(iii) settle or compromise any ABL Obligation or Excess ABL Obligations or any other liability of the Company or any other Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including the ABL Obligations or the Excess ABL Obligations) in any manner or order; and

(iv) exercise or delay in or refrain from exercising any right or remedy against the Company or any other Grantor or any other Person, elect any remedy and otherwise deal freely with the Company, any other Grantor or any ABL Priority Collateral and any guarantor or any liability of the Company or any other Grantor to the ABL Claimholders or any liability incurred directly or indirectly in respect thereof.

(c) Without in any way limiting the generality of the foregoing paragraph (but subject to the rights of the Company and the other Grantors under the Note Documents and subject to the provisions of Section 5.3), the Note Claimholders, Note Security Agent and any of them may, at any time and from time to time in accordance with the Note Documents and/or applicable law, without the consent of, or notice to, ABL Agent or any ABL Claimholders, without incurring any liabilities to ABL Agent or any ABL Claimholders and without impairing or releasing the Lien priorities and other benefits provided in this Agreement (even if any right of subrogation or other right or remedy of ABL Agent or any ABL Claimholders is affected, impaired or extinguished thereby) do any one or more of the following:

(i) change the manner, place or terms of payment or change or extend the time of payment of, or amend, renew, exchange, increase or alter, the terms of any of the Note Obligations or the Excess Note Obligations or any Lien on any Note Priority Collateral or guaranty thereof or any liability of the Company or any other Grantor, or any liability incurred directly or indirectly in respect thereof (including any increase in or extension of the Note Obligations or the Excess Note Obligations, without any restriction as to the tenor or terms of any such increase or extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner any Liens held by Note Security Agent or any of the Note Claimholders, the Note Obligations, the Excess Note Obligations or any of the Note Documents;

(ii) sell, exchange, release, surrender, realize upon, enforce or otherwise deal with in any manner and in any order any part of the Note Priority Collateral or any liability of the Company or any other Grantor to the Note Claimholders or Note Security Agent, or any liability incurred directly or indirectly in respect thereof;

(iii) settle or compromise any Note Obligation, Excess Note Obligations or any other liability of the Company or any other Grantor or any security therefor or any liability incurred directly or indirectly in respect thereof and apply any sums by whomsoever paid and however realized to any liability (including the Note Obligations or the Excess Note Obligations) in any manner or order; and

(iv) exercise or delay in or refrain from exercising any right or remedy against the Company or any security or any other Grantor or any other Person, elect any remedy and otherwise deal freely with the Company, any other Grantor or any Note Priority Collateral and any security and any guarantor or any liability of the Company or any other Grantor to the Note Claimholders or any liability incurred directly or indirectly in respect thereof.

8.4 Obligations Unconditional. All rights, interests, agreements and obligations of ABL Agent and the ABL Claimholders represented by it and Note Security Agent and the Note Claimholders represented by it, respectively, hereunder shall remain in full force and effect irrespective of:

(a) any lack of validity or enforceability of any ABL Loan Documents or any Note Documents;

(b) except as otherwise expressly set forth in this Agreement, any change in the time, manner or place of payment of, or in any other terms of, all or any of the ABL Obligations or Note Obligations, or any amendment or waiver or other modification, including any increase in the amount thereof, whether by course of conduct or otherwise, of the terms of any ABL Loan Document or any Note Document;

(c) except as otherwise expressly set forth in this Agreement, any exchange, subordination, release or non-perfection of any security interest in any Collateral or any other collateral, or any amendment, waiver or other modification, whether in writing or by course of conduct or otherwise, of all or any of the ABL Obligations or Note Obligations or any guaranty thereof;

(d) the commencement of any Insolvency or Liquidation Proceeding in respect of the Company or any other Grantor; or

(e) any other circumstances which otherwise might constitute a defense available to, or a discharge of, the Company or any other Grantor in respect of ABL Agent, the ABL Obligations, any ABL Claimholder, Note Security Agent, the Note Obligations or any Note Claimholder in respect of this Agreement.

SECTION 9

MISCELLANEOUS

9.1 Integration/Conflicts. This Agreement, the ABL Loan Documents and the Note Documents represent the entire agreement of the Grantors, the ABL Claimholders and the Note Claimholders with respect to the subject matter hereof and thereof, and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof and thereof. There are no promises, undertakings, representations or warranties by the ABL Claimholders or the Note Claimholders relative to the subject matter hereof and thereof not expressly set forth or referred to herein or therein. As between the ABL Claimholders on the one hand and the Note Claimholders on the other, in the event of any conflict between the provisions of this Agreement and the provisions of the ABL Loan Documents or the Note Documents, the provisions of this Agreement shall govern and control.

9.2 Effectiveness; Continuing Nature of this Agreement; Severability. This Agreement shall become effective when executed and delivered by the parties hereto. This is a continuing agreement of lien subordination and the ABL Claimholders and the Note Claimholders may continue, at any time and without notice to any other Agent or any other Claimholder, to extend credit and other financial accommodations and lend monies to or for the benefit of the Company

or any Grantor in reliance hereof. Each of ABL Agent and Note Security Agent, on behalf of itself and the ABL Claimholders and the Note Claimholders represented by it, respectively, hereby waives any right it may have under applicable law to revoke this Agreement or any of the provisions of this Agreement. The terms of this Agreement shall survive, and shall continue in full force and effect, in any Insolvency or Liquidation Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace any invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. All references to the Company or any other Grantor shall include the Company or such Grantor as debtor and debtor-in-possession and any receiver, trustee or similar person for the Company or any other Grantor (as the case may be) in any Insolvency or Liquidation Proceeding. This Agreement shall terminate and be of no further force and effect:

(a) with respect to ABL Agent, the ABL Claimholders, the ABL Obligations and the Excess ABL Obligations, on the date on which the ABL Obligations and the Excess ABL Obligations are no longer secured by, and no longer required to be secured by, any of the Collateral, subject to the rights of such ABL Claimholders under Sections 5.6 and 7.4; and

(b) with respect to Note Security Agent, the Note Claimholders, the Note Obligations and the Excess Note Obligations, on the date on which the Note Obligations and the Excess Note Obligations are no longer secured by, and no longer required to be secured by, any of the Collateral, subject to the rights of such Note Claimholders under Sections 5.6 and 7.4.

provided, however, that in each case, such termination shall not relieve any such part of its obligations incurred hereunder prior to the date of such termination.

9.3 Amendments; Waivers. No amendment, modification or waiver of any of the provisions of this Agreement by Note Security Agent or ABL Agent shall be deemed to be made unless the same shall be in writing signed on behalf of each party hereto or its authorized agent and each waiver, if any, shall be a waiver only with respect to the specific instance involved and shall in no way impair the rights of the parties making such waiver or the obligations of the other parties to such party in any other respect or at any other time. Notwithstanding the foregoing, the Company and the other Grantors shall not have any right to consent to or approve any amendment, modification or waiver of any provision of this Agreement.

9.4 Information Concerning Financial Condition of the Company and its Subsidiaries.

(a) ABL Agent and the ABL Claimholders, on the one hand, and the Note Claimholders, on the other hand, shall each be responsible for keeping themselves informed of (i) the financial condition of the Company and its Subsidiaries and all endorsers and/or guarantors of the ABL Obligations, the Excess ABL Obligations, the Note Obligations or the Excess Note Obligations and (ii) all other circumstances bearing upon the risk of nonpayment of the ABL Obligations, the Excess ABL Obligations, the Note Obligations or the Excess Note Obligations. ABL Agent and the ABL Claimholders shall have no duty to advise Note Security Agent or any Note Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise. Note Security Agent and the Note Claimholders shall have no duty to advise ABL Agent or any ABL Claimholder of information known to it or them regarding such condition or any such circumstances or otherwise.

(b) In the event ABL Agent or any of the ABL Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to Note Security Agent or any Note Claimholder, it or they shall be under no obligation:

(i) to make, and ABL Agent and the ABL Claimholders shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided;

(ii) to provide any additional information or to provide any such information on any subsequent occasion;

(iii) to undertake any investigation; or

(iv) to disclose any information, which pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

(c) In the event Note Security Agent or any of the Note Claimholders, in its or their sole discretion, undertakes at any time or from time to time to provide any such information to ABL Agent or any ABL Claimholder, it or they shall be under no obligation:

(i) to make, and Note Security Agent and the Note Claimholders shall not make, any express or implied representation or warranty, including with respect to the accuracy, completeness, truthfulness or validity of any such information so provided;

(ii) to provide any additional information or to provide any such information on any subsequent occasion;

(iii) to undertake any investigation; or

(iv) to disclose any information, which pursuant to accepted or reasonable commercial finance practices, such party wishes to maintain confidential or is otherwise required to maintain confidential.

9.5 Subrogation. With respect to the value of any payments or distributions in cash, property or other assets that any of the Subordinated Lien Claimholders or the Subordinated Lien Agent pays over to the Prior Lien Agent or the Prior Lien Claimholders under the terms of this Agreement, the Subordinated Lien Claimholders and the Subordinated Lien Agents shall be subrogated to the rights of the Prior Lien Agents and the Prior Lien Claimholders; provided that each Subordinated Lien Agent, on behalf of itself and the Subordinated Lien Claimholders represented by it, hereby agrees not to assert or enforce all such rights of subrogation it may acquire as a result of any payment hereunder until the Discharge of Prior Lien Obligations has occurred. The Company and the other Grantors acknowledge and agree that the value of any payments or distributions in cash, property or other assets received by any Subordinated Lien Agent or the Subordinated Lien Claimholders that are paid over to the Prior Lien Agent or the Prior Lien Claimholders pursuant to this Agreement shall not reduce any of the Subordinated Lien Obligations.

9.6 Submission to Jurisdiction; Certain Waivers. Each party hereto hereby irrevocably and unconditionally:

(a) submits for itself and its property in any legal action or proceeding relating to this Agreement and the Collateral Documents (whether arising in contract, tort or otherwise), or for recognition and enforcement of any judgment in respect thereof, to the exclusive general jurisdiction of the courts of the State of New York sitting in the Borough of Manhattan, the courts of the United States for the Southern District of New York sitting in the Borough of Manhattan, and appellate courts from any thereof;

(b) agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York state court or, to the fullest extent permitted by applicable law, in such federal court;

(c) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law and that nothing in this Agreement or any other ABL Loan Document or Note Document shall affect any right that any ABL Claimholder or Note Claimholder may otherwise have to bring any action or proceeding relating to this Agreement or any other ABL Loan Document or Note Document against any Grantor or any of its assets in the courts of any jurisdiction;

(d) waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement in any court referred to in paragraph (a) of this Section (and irrevocably waives to the fullest extent permitted by applicable law the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court);

(e) consents to service of process in any such proceeding in any such court may be made by registered or certified mail, return receipt requested, to the applicable party at its address provide in accordance with Section 9.8 (and agrees that nothing in this Agreement or any other ABL Loan Document or Note Document will affect the right of any party hereto to serve process in any other manner permitted by applicable law);

(f) agrees that service as provided in clause (e) above is sufficient to confer personal jurisdiction over the applicable party in any such proceeding in any such court, and otherwise constitutes effective and binding service in every respect; and

(g) waives, to the maximum extent not prohibited by law, any right it may have to claim or recover any special, exemplary, punitive or consequential damages.

9.7 WAIVER OF JURY TRIAL. EACH PARTY HERETO, THE COMPANY AND EACH OTHER GRANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT, BREACH OF DUTY, COMMON LAW, STATUTE OR ANY OTHER THEORY). EACH PARTY HERETO AND THE COMPANY AND THE OTHER GRANTORS (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. EACH PARTY HERETO AND THE COMPANY AND THE OTHER GRANTORS FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.

9.8 Notices. All notices to the Note Claimholders and the ABL Claimholders permitted or required under this Agreement shall also be sent to Note Security Agent and ABL Agent, respectively. Unless otherwise specifically provided herein, any notice hereunder shall be in writing and may be personally served, telexed or sent by telefacsimile or United States mail or courier service and shall be deemed to have been given when delivered in person or by courier service and signed for against receipt thereof, upon receipt of telefacsimile or telex, or three Business Days after depositing it in the United States mail with postage prepaid and properly addressed. For the purposes hereof, the addresses of the parties hereto shall be as set forth in the ABL Credit Agreement or Note Indenture, as applicable, or as set forth in the Joinder Agreement pursuant to which it becomes a party hereto, or, as to each party, at such other address as may be designated by such party in a written notice to all of the other parties.

9.9 Further Assurances. ABL Agent, for itself and on behalf of each other ABL Claimholder represented by it under the applicable ABL Loan Documents, and Note Security Agent, for itself and on behalf of each other Note Claimholder represented by it under the applicable Note Documents, and the Company and the other Grantors, agree that each of them shall take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested), and take all such further actions, as may be required under any applicable law, as ABL Agent or Note Security Agent may reasonably request to effectuate the terms of and the Lien priorities contemplated by this Agreement.

9.10 APPLICABLE LAW. THIS AGREEMENT AND ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW RULES THAT WOULD RESULT IN THE APPLICATION OF A DIFFERENT GOVERNING LAW (OTHER THAN ANY MANDATORY PROVISIONS OF THE UCC RELATING TO THE LAW GOVERNING PERFECTION AND THE EFFECT OF PERFECTION OR PRIORITY OF THE SECURITY INTERESTS IN THE COLLATERAL).

9.11 Binding on Successors and Assigns. This Agreement shall be binding upon ABL Agent, the ABL Claimholders, Note Security Agent, the Note Claimholders, the Company and the other Grantors and their respective successors and assigns from time to time. If ABL Agent or Note Security Agent resigns or is replaced pursuant to the ABL Credit Agreement or the Note Indenture, as applicable, its successor shall be deemed to be a party to this Agreement and shall have all the rights of, and be subject to all the obligations of, this Agreement. No provision of this Agreement will inure to the benefit of a trustee, debtor-in-possession, creditor trust or other representative of an estate or creditor of any Grantor, including where any such trustee, debtor-in-possession, creditor trust or other representative of an estate is the beneficiary of a Lien securing Collateral by virtue of the avoidance of such Lien in an Insolvency or Liquidation Proceeding.

9.12 Headings. The section headings and table of contents used in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose, be given any substantive effect, affect the construction hereof or be taken into consideration in the interpretation hereof.

9.13 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile or other electronic imaging means), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission (e.g. “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof.

9.14 Authorization. By its signature, each Person executing this Agreement, on behalf of such Person but not in his or her personal capacity as a signatory, represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement.

9.15 No Third Party Beneficiaries / Provisions Solely to Define Relative Rights. This Agreement and the rights and benefits hereof shall inure to the benefit of each of the ABL Claimholders and the Note Claimholders and their respective successors and assigns from time to time. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of ABL Agent and the ABL Claimholders on the one hand and Note Security Agent and the Note Claimholders on the other hand. Nothing herein shall be construed to limit the relative rights and obligations as among the ABL Claimholders or as among the Note Claimholders. None of the Company, any other Grantor or any other creditor thereof shall have any rights hereunder and neither the Company nor any Grantor may rely on the terms hereof. Nothing in this Agreement is intended to or shall impair the obligations of the Company or any other Grantor, which are absolute and unconditional, to pay the ABL Obligations, the Excess ABL Obligations, the Note Obligations and the Excess Note Obligations as and when the same shall become due and payable in accordance with their terms.

9.16 Certain Terms Concerning Note Security Agent. Note Security Agent is executing and delivering this Agreement solely in its capacity as such and pursuant to direction set forth in the Note Documents; and in so doing, Note Security Agent shall not be responsible for the terms or sufficiency of this Agreement for any purpose. Note Security Agent shall have no duties or obligations under or pursuant to this Agreement other than such duties and obligations as may be expressly set forth in this Agreement as duties and obligations on its part to be performed or observed. In entering into this Agreement, or in taking (or forbearing from) any action under or pursuant to the Agreement, Note Security Agent shall have and be protected by all of the rights, privileges, protections, immunities, indemnities and other protections granted to it under the Note Documents.

9.17 Certain Terms Concerning ABL Agent and Note Security Agent. In no event shall ABL Agent or Note Security Agent incur any liability in connection with this Agreement (except for its own gross negligence or willful misconduct) or be liable for or on account of the statements, representations, warranties, covenants or obligations stated to be those of other Claimholders hereunder, all such liability, if any, being expressly waived by the parties hereto and any Person claiming by, through or under such party. The permissive authorizations, entitlements, powers and rights granted to ABL Agent or Note Security Agent herein shall not be construed as duties. Any exercise of discretion on behalf of ABL Agent or Note Security Agent shall be exercised in accordance with the terms of the ABL Loan Documents or the Note Documents, respectively. Neither of ABL Agent nor Note Security Agent shall have any individual liability to any Person if it shall mistakenly pay over or distribute to any Claimholder (or the Company) any amounts in violation of the terms of this Agreement, so long as ABL Agent or Note Security Agent, as the case may be, is acting in good faith without gross negligence or willful misconduct. Each party hereto hereby acknowledges and agrees that each of ABL Agent and Note Security Agent is entering into this Agreement solely in its capacity under the ABL Loan Documents and the Note Documents, respectively, and not in its individual capacity. Notwithstanding anything herein to the contrary, neither ABL Agent nor Note Security Agent shall have any responsibility for the preparation, filing or recording of any instrument, document or financing statement or for the perfection or maintenance of any security interest created hereunder.

9.18 Authorization of Secured Agents. By accepting the benefits of this Agreement and the other ABL Loan Documents, each ABL Claimholder authorizes ABL Agent to enter into this Agreement and to act on its behalf as agent hereunder and in connection herewith. By accepting the benefits of this Agreement and the other Note Documents, each Note Claimholder authorizes Note Security Agent to enter into this Agreement and to act on its behalf as agent hereunder and in connection herewith.

9.19 Relationship of Claimholders. Nothing set forth herein shall create or evidence a joint venture, partnership or an agency or fiduciary relationship among the Claimholders. None of the Claimholders nor any of their respective directors, officers, agents or employees shall be responsible to any other Claimholder or to any other Person for any Grantor’s solvency, financial condition or ability to repay the ABL Obligations or the Note Obligations, or for statements of any Grantor, oral or written, or for the validity, sufficiency or enforceability of the ABL Loan Documents or the Note Documents, or any security interests granted by any Grantor to any Claimholder in connection therewith. Each Claimholder has entered into its respective financing agreements with the Grantors based upon its own independent investigation, and neither ABL Agent nor Note Security Agent makes any warranty or representation to the other Claimholders for which it acts as agent nor does it rely upon any representation of the other agents or the Claimholders for which it acts as agent with respect to matters identified or referred to in this Agreement.

9.20 Specific Performance. Each of ABL Agent and Note Security Agent may demand specific performance of this Agreement. Each of ABL Agent and Note Security Agent, for itself and on behalf of the relevant ABL Claimholders and Note Claimholders, as applicable, hereby irrevocably waives any defense based on the adequacy of a remedy at law and any other defense that might be asserted to bar the remedy of specific performance in any action that may be brought by any ABL Claimholder or Note Claimholder, as applicable.

9.21 Additional Grantors. Each Grantor agrees that it shall ensure that each of its Subsidiaries that is or is to become a party to any ABL Loan Document or Note Document shall either execute this Agreement on the date hereof or shall confirm that it is a Grantor hereunder pursuant to a joinder agreement substantially in the form attached hereto as Exhibit A that is executed and delivered by such Subsidiary prior to or concurrently with its execution and delivery of such ABL Loan Document or such Note Document.

9.22 Replacement Credit Agreements, Additional Notes Collateral Debt Agreement.

(a) To the extent, but only to the extent, permitted by the provisions of the ABL Loan Documents and the Term Loan Documents, the Company may (i) incur additional term/note indebtedness that constitutes Additional Notes Collateral Debt and/or (ii) Refinance any of the ABL Obligations (and/or Excess ABL Obligations) or the Note Obligations (and/or the Excess Note Obligations), and the Company may designate the credit agreements, debt facilities, indentures and/or commercial paper facilities governing such Additional Notes Collateral Debt or Refinancing indebtedness, as applicable, as the “Additional Notes Collateral Debt Agreement” or a “Replacement ABL Credit Agreement” or a “Replacement Note Indenture” (as applicable) hereunder. In order to so designate any credit agreements, debt facilities, indentures and/or commercial paper facilities , as the “Additional Notes Collateral Debt Agreement” or a “Replacement ABL Credit Agreement” or a “Replacement Note Indenture” (as applicable) hereunder, such credit agreements, debt facilities, indentures and/or commercial paper facilities must satisfy the requirements of the definition of Additional Notes Collateral Debt Agreement or Replacement ABL Credit Agreement or Replacement Note Indenture (as applicable) hereunder, as applicable, and the Company must deliver to each Agent a designation in substantially the form of Exhibit B hereto. Additionally, the agent/trustee or representative (or, in the absence of any such agent/trustee, all of the lender(s)/noteholder(s) thereunder) under such Additional Notes Collateral Debt Agreement or Replacement ABL Credit Agreement or Replacement Note Indenture (as applicable) shall have executed and delivered to each other Agent a joinder agreement in substantially the form of Exhibit C hereto whereby such new agent agrees to be bound by the terms of this Agreement and represents and warrants that the Additional Notes Collateral Debt Agreement or Replacement ABL Credit Agreement or Replacement Note Indenture (as applicable), as applicable, provides that the Claimholders thereunder will be subject to and bound by the provisions of this Agreement.

(b) In the event that there is more than one Note Security Agent under this Agreement at any time (whether as a result of the incurrence of any Additional Notes Collateral Debt by the Company, any Refinancing of the Note Obligations, or otherwise), then for all purposes hereunder specifically including Section 9.3 hereof, to the extent the consent or

agreement of Note Security Agent is required with respect to any matter hereunder, as between ABL Agent and the other ABL Claimholders on the one hand and each Note Security Agent and the other Note Claimholders on the other hand, the consent or agreement of (a) so long as the Discharge of Additional Notes Collateral Debt Obligations has not occurred, the Additional Notes Collateral Debt Representative (without the necessity of any consent or agreement from any other Note Security Agent) shall bind all Note Claimholders, or (b) at all other times, the Initial Note Security Agent (without the necessity of any consent or agreement from any other Note Security Agent) shall bind all Note Claimholders.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor Agreement as of the date first written above.


PNC BANK, NATIONAL ASSOCIATION, as ABL Agent

By:		/s/ Anita Puligandla
		Name: Anita Puligandla
		Title: Senior Vice President

Signature Page to Intercreditor Agreement


WILMINGTON TRUST, NATIONAL ASSOCIATION, as Note Security Agent

By:		/s/ Jane Schweiger
		Name: Jane Schweiger
		Title: Vice President

Signature Page to Intercreditor Agreement


Acknowledged and Agreed to by:

PIONEER ENERGY SERVICES CORP., a Texas corporation

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER DRILLING SERVICES, LTD., a Texas corporation

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER GLOBAL HOLDINGS, INC., a Delaware corporation

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER PRODUCTION SERVICES, INC., a Delaware corporation

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer

Signature Page to Intercreditor Agreement


PIONEER WIRELINE SERVICES HOLDINGS, INC., a Delaware corporation

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER WIRELINE SERVICES, LLC, a Delaware limited liability company

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER WELL SERVICES, LLC, a Delaware limited liability company

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER FISHING & RENTAL SERVICES, LLC, a Delaware limited liability company

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer


PIONEER COILED TUBING SERVICES, LLC, a Delaware limited liability company

By:	/s/ Lorne E. Phillips
	Name:	Lorne E. Phillips
	Title:	Executive Vice President and Chief Financial Officer

Signature Page to Intercreditor Agreement

Exhibit A

to Intercreditor Agreement

[FORM OF] GRANTOR JOINDER AGREEMENT NO. [ ] dated as of [ ], 20[ ] to the INTERCREDITOR AGREEMENT dated as of May 29, 2020 (the “ABL Intercreditor Agreement”), among PNC Bank, National Association, as ABL Agent, and Wilmington Trust, National Association, as Note Security Agent, and acknowledged and agreed to by Pioneer Energy Services Corp. (the “Company”), and certain subsidiaries of the Company (each a “Grantor”).

Capitalized terms used herein but not otherwise defined herein shall have the meanings set forth in the ABL Intercreditor Agreement.

The undersigned, [______________], a [________________], (the “New Grantor”) wishes to acknowledge and agree to the ABL Intercreditor Agreement and become a party thereto to the limited extent contemplated by Section 9.15 thereof and to acquire and undertake the rights and obligations of a Grantor thereunder.

Accordingly, the New Grantor agrees as follows for the benefit of the Agents and the Claimholders:

Section 1. Accession to the ABL Intercreditor Agreement. The New Grantor (a) acknowledges and agrees to, and becomes a party to the ABL Intercreditor Agreement as a Grantor to the limited extent contemplated by Section 9.15 thereof, (b) agrees to all the terms and provisions of the ABL Intercreditor Agreement and (c) shall have all the rights and obligations of a Grantor under the ABL Intercreditor Agreement. This Grantor Joinder Agreement supplements the ABL Intercreditor Agreement and is being executed and delivered by the New Grantor pursuant to Section 9.21 of the ABL Intercreditor Agreement.

Section 2. Representations, Warranties and Acknowledgement of the New Grantor. The New Grantor represents and warrants to each Agent and to the Claimholders that (a) it has full power and authority to enter into this Grantor Joinder Agreement, in its capacity as Grantor and (b) this Grantor Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Grantor Joinder Agreement.

Section 3. Counterparts. This Grantor Joinder Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Grantor Joinder Agreement or any document or instrument delivered in connection herewith by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of this Grantor Joinder Agreement or such other document or instrument, as applicable.

Section 4. Section Headings. Section headings used in this Grantor Joinder Agreement are for convenience of reference only and are not to affect the construction hereof or to be taken in consideration in the interpretation hereof.

Section 5. Benefit of Agreement. The agreements set forth herein or undertaken pursuant hereto are for the benefit of, and may be enforced by, any party to the ABL Intercreditor Agreement subject to any limitations set forth in the ABL Intercreditor Agreement with respect to the Grantors.

Exhibit A – Page 1

Section 6. Governing Law. THIS GRANTOR JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 7. Severability. In case any one or more of the provisions contained in this Grantor Joinder Agreement should be held invalid, illegal or unenforceable in any respect, none of the parties hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the ABL Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 8. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.8 of the ABL Intercreditor Agreement. All communications and notices hereunder to the New Grantor shall be given to it at the address set forth under its signature hereto, which information supplements Section 9.8 of the ABL Intercreditor Agreement.

Section 9. Miscellaneous. The provisions of Section 9 of the ABL Intercreditor Agreement will apply with like effect to this Grantor Joinder Agreement.

[Remainder of this page intentionally left blank]

Exhibit A – Page 2

Exhibit A

to Intercreditor Agreement

IN WITNESS WHEREOF, the New Grantor has duly executed this designation as of the day and year first above written.


[___________________________________]



By


Name:


Title:

Exhibit A – Page 1

Exhibit B

[Form of] Credit Agreement Designation

[FORM OF] [ADDITIONAL NOTES COLLATERAL DEBT AGREEMENT] [REPLACEMENT ABL CREDIT AGREEMENT] [REPLACEMENT NOTE INDENTURE] DESIGNATION NO. [ ] (this “Designation”) dated as of [ ], 20[ ] with respect to the INTERCREDITOR AGREEMENT dated as of May 29, 2020 (the “ABL Intercreditor Agreement”), among PNC Bank, National Association, as ABL Agent and Wilmington Trust, National Association, as Initial Note Security Agent and the additional Agents from time to time a party thereto, and acknowledged and agreed to by Pioneer Energy Services Corp. (the “Company”), and certain subsidiaries of the Company (each a “Grantor”).

Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the ABL Intercreditor Agreement.

This Designation is being executed and delivered in order to designate the below described credit agreement, debt facility, indenture and/or commercial paper facility as an [Additional Notes Collateral Debt Agreement] [Replacement ABL Credit Agreement] [Replacement Note Indenture] entitled to the benefit of and subject to the terms of the ABL Intercreditor Agreement.

The undersigned, the duly appointed [specify title of Responsible Officer] of the Company hereby certifies on behalf of the Company that:

Section 1. [Insert name of the Company or other Grantor] intends to enter into [describe new debt facility] (the “New Debt Facility”) which New Debt Facility satisfies all requirements of the ABL Intercreditor Agreement to be an [Additional Notes Collateral Debt Agreement] [Replacement ABL Credit Agreement] [Replacement Note Indenture] and it is hereby designated as such.

Section 2. The incurrence of the Indebtedness or letters of credit under the New Debt Facility is permitted by each applicable ABL Loan Document and Note Document.

Section 3. The name and address of the Agent for such New Debt Facility is:


		[Insert name and all capacities; Address]

		Telephone: ______________________

		Fax: ____________________________

		Email ___________________________

		Email: __________________________

[Remainder of this page intentionally left blank]

Exhibit B – Page 1

IN WITNESS WHEREOF, the Company has duly executed this designation as of the day and year first above written.

[ ]



By


Name:
Title:

Exhibit B – Page 2

JOINDER AGREEMENT NO. with respect to the INTERCREDITOR AGREEMENT dated as of May 29, 2020 (the “ABL Intercreditor Agreement”), among PNC Bank, National Association, as ABL Agent, and Wilmington Trust, National Association, as Note Security Agent, and acknowledged and agreed to by Pioneer Energy Services Corp. (the “Company”), and certain subsidiaries of the Company (each a “Grantor”).

A. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the ABL Intercreditor Agreement.

B. The undersigned ([collectively,] the “New Agent”) [is the [agent][trustee] [constitute all of the [lenders][noteholders] under the [described facility] which has been designated by the Company as [an Additional Notes Collateral Debt Agreement ] [a Replacement ABL Credit Agreement]/[a Replacement Note Indenture] entitled to the benefit of and subject to the terms of the ABL Intercreditor Agreement.

C. The New Agent wishes to become a party to the ABL Intercreditor Agreement as [ABL Agent][ Note Security Agent] in accordance with the provisions of the ABL Intercreditor Agreement.

Accordingly, the New Agent agrees as follows, for the benefit of each other party to the ABL Intercreditor Agreement:

Section 1. Accession to the ABL Intercreditor Agreement. The New Agent (a) hereby accedes and becomes a party to the ABL Intercreditor Agreement as [ABL Agent][ Note Security Agent], (b) agrees, for itself and on behalf of the holders of the [ABL Obligations] [Note Obligations] represented by it, to all the terms and provisions of the ABL Intercreditor Agreement and (c) shall have all the rights and obligations of an Agent under the ABL Intercreditor Agreement.

Section 2. Representations, Warranties and Acknowledgement of the New Agent. The New Agent represents and warrants to each other Agent and to the Claimholders that (a) it has full power and authority to enter into this Joinder Agreement, in its capacity as [an ABL Agent]/[ Note Security Agent] with respect to the [ABL Obligations] [Note Obligations] represented by it, (b) this Joinder Agreement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Joinder Agreement and (c) the [ABL Loan Documents] [Note Documents] relating to such [ABL Obligations] [Note Obligations] provide that, upon the New Agent’s entry into this Joinder Agreement, the Claimholders in respect of such [ABL Obligations] [Note Obligations] will be subject to and bound by the provisions of the ABL Intercreditor Agreement.

Section 3. Counterparts. This Joinder Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Joinder Agreement or any document or instrument delivered in connection herewith by telecopy or other electronic means shall be effective as delivery of a manually executed counterpart of this Joinder Agreement or such other document or instrument, as applicable

Exhibit C – Page 1

Section 4. Section Headings. Section headings used in this Joinder Agreement are for convenience of reference only and are not to affect the construction hereof or to be taken in consideration in the interpretation hereof.

Section 6. Governing Law. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

Section 7. Severability. In case any one or more of the provisions contained in this Joinder Agreement should be held invalid, illegal or unenforceable in any respect, none of the parties hereto shall be required to comply with such provision for so long as such provision is held to be invalid, illegal or unenforceable, but the validity, legality and enforceability of the remaining provisions contained herein and in the ABL Intercreditor Agreement shall not in any way be affected or impaired. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

Section 8. Notices. All communications and notices hereunder shall be in writing and given as provided in Section 9.8 of the ABL Intercreditor Agreement. All communications and notices hereunder to the New Agent shall be given to it at the address set forth under its signature hereto, which information supplements Section 9.8 of the ABL Intercreditor Agreement.

Exhibit C – Page 2

IN WITNESS WHEREOF, the New Agent has duly executed this Joinder Agreement to the ABL Intercreditor Agreement as of the day and year first above written.


[NAME OF NEW AGENT], as [ABL Agent][ Note Security Agent]

By:
		Name:
		Title:



Address for notices:







attention of:

Telecopy:

Exhibit C – Page 3

Exhibit 10.3

Execution Version

REGISTRATION RIGHTS AGREEMENT

by and among

PIONEER ENERGY SERVICES CORP.

and

THE HOLDERS PARTY HERETO

Dated as of May 29, 2020

TABLE OF CONTENTS



		PAGE

1.	Definitions	2

2.	Demand Registration	7

3.	Shelf Registration	8

4.	Shelf Takedowns	8

5.	Piggyback Registration	9

6.	Priority in Public Offerings	10

7.	Postponement; Suspensions; Withdrawals	11

8.	Company Undertakings	12

9.	Securityholder Undertakings	17

10.	Registration Expenses	18

11.	Lock-Up Agreements	19

12.	Indemnification; Contribution	20

13.	Transfer of Registration Rights	24

14.	Limitations on Subsequent Registration Rights	24

15.	Board Observer Right	24

16.	Amendment, Modification and Waivers; Further Assurances	25

17.	Miscellaneous	26

Schedule I List of Holders of Company Securities on the Effective Date
Schedule II Opt-Out Elections
Annex A Form of Joinder Agreement

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of May 29, 2020 by and among Pioneer Energy Services Corp. (the “Company”), the holders of Company Securities identified on Schedule I hereto (collectively, the “Initial Securityholders”) and any other Person who shall at any time be a party to or bound by this Agreement as a result of the execution and delivery to the Company of a Joinder substantially in the form attached as Annex A (a “Joinder”), in accordance with the terms hereof (collectively, the “Subsequent Securityholders” and together with the Initial Securityholders, the “Securityholders”).

RECITALS:

WHEREAS, on March 2, 2020, certain of the Company’s subsidiaries (collectively, the “Debtors”)¹ filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101, et seq. (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern District of Texas (Houston Division) (the “Bankruptcy Court”);

WHEREAS, pursuant to a “prepackaged” plan of reorganization (as it may be amended, modified or supplemented from time to time, the “Plan”), as of the date hereof (the “Effective Date”), each of the Securityholders will be issued Common Stock (as defined below) and certain Securityholders will be issued Convertible Notes (as defined below);

WHEREAS, on May 11, 2020, the Bankruptcy Court entered an order confirming the Plan, including this Agreement to read as set forth herein;

WHEREAS, in accordance with the Plan, each of the Company and the Initial Securityholders desire to enter into this Agreement with respect to the registration rights, priorities and obligations of the Securityholders set forth herein; and

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Company and each of the Securityholders hereby agree as follows:

The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, if applicable, are as follows: Pioneer Energy Services Corp. (8619); Pioneer Coiled Tubing Services, LLC (6232); Pioneer Drilling Services, Ltd. (2497); Pioneer Fishing & Rental Services, LLC (4399); Pioneer Global Holdings, Inc. (4707); Pioneer Production Services, Inc. (1361); Pioneer Services Holdings, LLC (4706); Pioneer Well Services, LLC (7572); Pioneer Wireline Services Holdings, Inc. (6455); and Pioneer Wireline Services, LLC (2205). The headquarters for the above-captioned Debtors is 1250 N.E. Loop 410, Suite 1000, San Antonio, Texas 78209.

1. Definitions.

(a) As used herein, the following terms have the following meanings:

“Affiliate” shall mean, when used with reference to any Person, any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person and, in respect of any Securityholder, any investment fund, vehicle or holding company of which such Securityholder or any Affiliate of such Securityholder serves as the general partner, managing member or discretionary manager or advisor; provided that limited partners, non-managing members or other similar direct or indirect investors in a Securityholder (in their capacities as such) shall not be deemed to be Affiliates of such Securityholder.

“Alternative Securities Exchange” means, excluding any National Securities Exchange, any other securities exchange or over-the-counter quotation system, including, without limitation, the NYSE MKT, the Nasdaq Capital Market, any quotation or other listing service provided by the OTC Markets Group or the Financial Industry Regulatory Authority, Inc., any “pink sheet” or other alternative listing service or any successor or substantially equivalent service to any of the foregoing.

“beneficially owned,” “beneficial ownership” and similar phrases have the same meanings as such terms have under Rule 13d-3 and 13d-5 (or any successor rule then in effect) promulgated under the Exchange Act, except that in calculating the beneficial ownership of any Securityholder, such Securityholder shall be deemed to have beneficial ownership of all securities that such Securityholder has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The calculation of beneficial ownership for a Securityholder shall also include any securities beneficially owned by any Affiliates and Related Funds of such Securityholder.

“Block Sale” means the sale of Company Securities to one or more purchasers that are financial institutions in an underwritten offering registered under the Securities Act without a prior public marketing process by means of a bought deal or pursuant to an “overnight” underwritten offering.

“Board of Directors” means the board of directors of the Company.

“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York City are authorized by law to close.

“Capital Stock” means the capital stock of the Company.

“Company Securities” means any Capital Stock or equity interests of the Company, including the Convertible Notes, the Common Stock and any other security convertible into or exercisable or exchangeable for such Capital Stock or equity interests of the Company, including any security, bond, note, indebtedness, warrant, option or other right or instrument exercisable for or exchangeable or convertible into such Capital Stock or equity interests.

“Common Stock” shall mean the shares of common stock, par value $0.01 per share, of the Company.

“Commission” means the United States Securities and Exchange Commission or any successor governmental agency.

“control” (including the terms “controlling,” “controlled by” and “under common control with”) means, unless otherwise noted, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting shares, by contract, or otherwise.

“Convertible Notes” means the Company’s 5% Convertible Senior Unsecured PIK Notes due 2025, issued pursuant to the Convertible Notes Indenture.

“Convertible Notes Indenture” means the indenture dated as of the date hereof between the Company and Wilmington Trust, National Association, as trustee, in respect of the Company’s 5% Convertible Senior Unsecured PIK Notes due 2025.

“Counsel to the Securityholders” means the legal counsel, which shall be experienced in the federal securities laws, to the Securityholders selected (i) in the case of a Demand Registration or Shelf Takedown, by the Securityholders beneficially owning a majority of the Registrable Securities (on an as converted to Common Stock basis) initially requesting such Demand Registration or Shelf Takedown; (ii) in the case of a Piggyback Registration, the Securityholders beneficially owning a majority of the Registrable Securities (on an as converted to Common Stock basis) requested to be included in such Piggyback Registration; and (iii) in the case of a Shelf Registration, by the Securityholders beneficially owning a majority of the Registrable Securities (on an as converted to Common Stock basis) to be included in such Shelf Registration.

“Effective Date” has the meaning assigned to such term in the Plan, and is the date hereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

“Excluded Registration” means a registration of the Company’s equity securities (i) pursuant to a Registration Statement on Form S-8 (or other registration solely relating to an offering or sale to employees or directors of the Company or any of its subsidiaries pursuant to any employee stock plan or other employee benefit arrangement), (ii) pursuant to a Registration Statement on Form S-4 (or similar form), (iii) involving shares issued as consideration for the acquisition by the Company of another Person or in respect of an employee benefit or dividend reinvestment plan, or (iv) pursuant to a Shelf Registration Statement pursuant to which only the initial purchasers and subsequent transferees of debt securities of the Company or any subsidiary that are convertible for equity securities and that are initially issued pursuant to Rule 144A and/or Regulation S (or any successor provision) of the Securities Act may resell such notes and sell the equity securities into which such debt securities may be converted.

“FINRA” means the Financial Industry Regulatory Authority or any successor regulatory authority.

“Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of operations, condition (financial or otherwise) or prospects of the Company and its subsidiaries, taken as a whole.

“National Securities Exchange” means The Nasdaq Global Market, The Nasdaq Global Select Market or The New York Stock Exchange.

“Ownership Percentage” means, with respect to any Securityholder at any time, a fraction, (x) the numerator of which is the total number of outstanding shares of Voting Stock beneficially owned by such Securityholder at such time and (y) the denominator of which is the total number of shares of outstanding Voting Stock at such time. For all purposes of determining a Securityholder’s Ownership Percentage, all shares of Voting Stock beneficially owned by such Securityholder’s Affiliates and Related Funds shall be deemed to be beneficially owned by such Securityholder at such time (disregarding for purposes of such determination of Ownership Percentage any impact of the Restricted Ownership Percentage (as such term is defined in the Convertible Notes Indenture) applicable to such Securityholder and its Affiliates and Related Funds).

“Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Prospectus” means the prospectus or prospectuses included in any Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 430A under the Securities Act or any successor rule thereto), as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such prospectus or prospectuses.

“Public Offering” means any sale or distribution to the public of Company Securities pursuant to an underwritten offering registered under the Securities Act, whether by the Company, by any Securityholders and/or by any other holders of Company Securities, including a Block Sale.

“Qualified IPO” means a firm commitment underwritten initial Public Offering of shares of Common Stock that provides for at least $100 million in gross proceeds to the Company and, immediately after such Public Offering, the Common Stock is quoted or listed for trading on a National Securities Exchange.

“Registrable Securities” means at any time, (i) the Convertible Notes and the Common Stock of the Company held or beneficially owned by any Securityholder, including any Common Stock beneficially owned by such Securityholder’s Affiliates and Related Funds and (ii) any Common Stock issued or issuable upon the conversion, exercise

or exchange, as applicable, of the Convertible Notes or any other securities or interests of the Company held or beneficially owned by such Securityholder, its Affiliates and its Related Funds and any Common Stock or other securities issued as or pursuant to (or issuable upon the conversion, exercise or exchange of any warrant, right or other security that is issued as or pursuant to) a dividend, stock split, combination or any reclassification, recapitalization, merger, consolidation, exchange or any other distribution or reorganization with respect to, or in exchange for, or in replacement of, the securities referenced in clause (i) or (ii) above; provided, however, that as to any Registrable Securities, such securities shall irrevocably cease to constitute Registrable Securities upon the earliest to occur of (A) the date on which such securities have been disposed of pursuant to an effective Registration Statement under the Securities Act, (B) the date on which such securities have been disposed of pursuant to Rule 144, (C) the date that is the later of (i) the date on which such Securityholder beneficially owns less than 5% of the Voting Stock and (ii) the date on which such Securityholder may effect the sale or other disposition of such securities without registration under the Securities Act and without regard to volume and manner of the sale requirements under Rule 144 and (D) such Registrable Securities are held by the Company or one of its subsidiaries.

“Registration Date” means the date on which the Company becomes subject to Section 13(a) or Section 15(d) of the Exchange Act.

“Registration Statement” means any registration statement of the Company, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits and all material incorporated by reference in such registration statement.

“Related Fund” means with respect to any Person, an Affiliate of such Person or any fund, account or investment vehicle that is controlled, managed, advised or sub-advised by any Securityholder, an Affiliate thereof or the same investment manager, advisor or sub-advisor as the Securityholder or an Affiliate of such investment manager, advisor or sub-advisor.

“Rule 144” means Rule 144 promulgated under the Securities Act (or any successor rule then in effect).

“Rule 144A” means Rule 144A promulgated under the Securities Act (or any successor rule then in effect).

“Securities Act” means the Securities Act of 1933, as amended from time to time.

“Voting Stock” shall mean Common Stock and the Convertible Notes, provided that the amount of shares of Voting Stock outstanding in respect of the Convertible Notes shall be determined by giving effect, immediately prior to the relevant date of determination, to the conversion of the Convertible Notes into Common Stock in accordance with Article 14 of the Convertible Notes Indenture assuming “Physical Settlement” (as defined in the Convertible Notes Indenture).

(b) Each of the following terms is defined in the Section set forth opposite such term:


Term		Section
Agreement		Preamble
Bankruptcy Code		Preamble
Bankruptcy Court		Preamble
Company		Preamble
Company Demand Registration Notice		2(a)
Company Shelf Takedown Notice		3(a)
Covered Notice		9(e)
Debtors		Preamble
Demand Registration		2(a)
Demand Registration Notice		2(a)
Due Diligence Information		8(a)(xii)
Effective Date		Preamble
End of Suspension Notice		7(b)
Form S-1 Shelf		3(a)
Form S-3 Shelf		3(a)
IPO		2(a)
Joinder		Preamble
Lock-Up Agreement		11(b)
Long-Form Registration		2(a)
Losses		12(a)
MFN Release		11(d)
Opt-Out Election		9(e)
Piggyback Registration		5(a)5(a)
Piggyback Registration Notice		5(a)
Plan		Recitals
Registration Expenses		10(a)
Restricted Period		11(a)
road show		12(a)
Sale Event		11(a)
Shelf Registration Statement		3(a)
Shelf Supplement		4(b)
Shelf Takedown		4(a)
Shelf Takedown Notice		4(a)
Short-Form Registration		2(a)
Securityholder		Preamble
Subsequent Securityholders		Preamble
Suspension Event		7(b)
Suspension Notice		7(b)
Withdrawal Request		7(c)

2. Demand Registration.

(a) Any time after the date of this Agreement one or more Securityholders with an aggregate Ownership Percentage of least 30% (the “Demand Ownership Threshold”) (provided that after the Company’s initial Public Offering (the “IPO”), such Demand Ownership Threshold shall decrease to 15%) may request that the Company file a Registration Statement to effect the registration and sale under the Securities Act, including a Public Offering, of all or any portion of the Registrable Securities held by such requesting party or parties on Form S-1 or any successor thereto (a “Long-Form Registration”) or, if available, a Form S-3 or any successor thereto (a “Short-Form Registration” and, together with each Long-Form Registration and Shelf Registration (as defined below), a “Demand Registration”); provided, however, that the Company shall not be obligated to effect (i) more than three (3) such Demand Registrations and underwritten Shelf Takedowns, taken together, in any 12-month period in the aggregate for all requesting Securityholders and (ii) any Demand Registration with respect to which the requesting Securityholder (or requesting Securityholders, as the case may be) proposes to sell Registrable Securities in such Demand Registration at an anticipated aggregate offering price (calculated based upon the market price of the Registrable Securities on the date on which the Company receives the written request for such Demand Registration) to the public of less than $10.0 million unless such Demand Registration includes all of the then-outstanding Registrable Securities.

(b) Such request for a Demand Registration shall be made by giving written notice to the Company (a “Demand Registration Notice”), which shall specify the number of Registrable Securities required to be included in the Demand Registration and whether or not such Demand Registration will involve a Public Offering. Upon receipt of any Demand Registration Notice, the Company shall promptly (but in no event later than ten (10) days following receipt thereof) give written notice to all Securityholders holding Registrable Securities of receipt of such Demand Registration Notice (a “Company Demand Registration Notice”) and, subject to the provisions of Section 6, shall include in such Demand Registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within ten (10) Business Days after sending the Company Demand Registration Notice.

(c) The Company shall use commercially reasonable efforts to prepare and file with (or confidentially submit to) the Commission, within forty-five (45) days after receipt of the Demand Registration Notice, a Registration Statement on Form S-1 or, if applicable, Form S-3 covering all Registrable Securities the requesting Securityholders and other Securityholders have requested be included in such Demand Registration and shall use its commercially reasonable efforts to cause such Registration Statement to be declared effective and to commence the Public Offering, if applicable, as promptly as practicable. Demand Registrations shall be Short-Form Registrations whenever the Company is permitted to use any applicable short form registration statement under the rules and regulations of the Securities Act, unless the underwriters, if any, in their reasonable discretion, determine that the use of a Long-Form Registration is necessary in order for the successful offering of such Registrable Securities. The Registration Statement may include Common Stock of the Company to be sold by the Company for its own account.

(d) If the Demand Registration is requested by Securityholders, the initial requesting Securityholders that beneficially own a majority of the Registrable Securities (on an as converted to Common Stock basis) initially requested to be included in the Demand Registration shall (i) select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such Public Offering and (ii) if the Common Stock is not then listed on any National Securities Exchange, select the National Securities Exchange the Common Stock is to be listed upon. Notwithstanding the foregoing, any investment banking firm selected pursuant to this Section 2(d) will be subject to the reasonable approval of the Company.

3. Shelf Registration.

(a) Following the earlier to occur of (1) the six-month anniversary of the date of this Agreement and (2) the Company becoming eligible to file a shelf registration statement on Form S-3, the Company will use commercially reasonable efforts to file a shelf registration statement (a “Shelf Registration Statement”) on Form S-1 or any successor thereto (a “Form S-1 Shelf”) or, if available, Form S-3 or any successor thereto (a “Form S-3 Shelf” and, together with each Form S-1 Shelf, a “Shelf Registration”), registering the resale of all of the Registrable Securities held by the Securityholders, on a delayed or continuous basis. The Company will use commercially reasonable efforts to cause such Shelf Registration to be declared effective as promptly as practicable after filing.

(b) The Company shall maintain the effectiveness of the Shelf Registration and replace such Shelf Registration as necessary until the date on which all Registrable Securities included in the Shelf Registration have been sold or otherwise cease to be Registrable Securities. The Company shall use its commercially reasonable efforts to convert any Form S-1 Shelf to a Form S-3 Shelf as soon as reasonably practicable after the Company becomes eligible to use Form S-3.

4. Shelf Takedowns.

(a) At any time that a Shelf Registration Statement is effective, any Securityholder may request to sell all or any portion of its Registrable Securities included in the Shelf Registration in a Public Offering (each, a “Shelf Takedown”). Such request for a Shelf Takedown shall be made by giving written notice to the Company (a “Shelf Takedown Notice”), which shall specify the number of Registrable Securities proposed to be sold in the Shelf Takedown as well as whether the Registrable Securities are proposed to be sold in a Block Sale (if so requested, a “Securityholder Block Sale”). Except in connection with a Securityholder Block Sale, upon receipt of any Shelf Takedown Notice, the Company shall promptly (but in no event later than five (5) days following receipt thereof) give written notice to all Securityholders of receipt of such Shelf Takedown Notice (a “Company Shelf Takedown Notice”) and shall include, subject to the provisions of Section 6, in such Shelf Takedown all Registrable Securities with respect to which the Company has received written requests for inclusion therein within three (3) Business Days after sending the Company Shelf Takedown Notice.

(b) The Company shall commence the Public Offering and prepare and file with the Commission, as soon as practicable after the date on which it received the Shelf Takedown Notice, any amendments or supplements (each, a “Shelf Supplement”) to the applicable Shelf Registration Statement to enable the Registrable Securities included in the Shelf Takedown to be offered and sold and, if such Shelf Supplement is an amendment to such Shelf Registration Statement, shall use its reasonable best efforts to cause such Shelf Supplement to be declared effective by the Commission as soon as practicable.

(c) The initial requesting Securityholders that beneficially own a majority of the Registrable Securities initially requested to be included in the Shelf Takedown shall select the investment banking firm or firms to act as the managing underwriter or underwriters in connection with such Public Offering. Notwithstanding the foregoing, any investment banking firm selected pursuant to this Section 4(c) will be subject to the reasonable approval of the Company.

(d) Notwithstanding any of the foregoing provisions of this Section 4, the Company shall not be obligated to effect an underwritten Shelf Takedown or Securityholder Block Sale within thirty-five (35) days after the pricing of a previous Securityholder Block Sale or within sixty (60) days after the pricing of a previous underwritten Shelf Takedown or Demand Registration and the Registrable Securities requested to be sold by the Securityholders in such underwritten Shelf Takedown or Securityholder Block Sale shall have an anticipated aggregate gross offering price (before deducting underwriting discounts and commission) of at least $10 million or $7 million, respectively, and provided, further, that the Company shall not be obligated to effect more than three (3) Demand Registrations and underwritten Shelf Takedowns, taken together, in any 12-month period in the aggregate for all requesting Securityholders.

5. Piggyback Registration.

(a) Whenever the Company proposes to register any of its equity securities under the Securities Act or conduct a Public Offering of registered securities for its own account or the account of any security holder of the Company (other than a Securityholder Block Sale, a Demand Registration, a Shelf Registration or a Shelf Takedown or pursuant to an Excluded Registration) on a form which would permit the registration or offering of Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice (in any event no later than five (5) Business Days prior to the filing of such Registration Statement or commencement of such Public Offering) to all holders of Registrable Securities of its intention to effect such Piggyback Registration (the “Piggyback Registration Notice”). The Company shall, subject to the provisions of Section 6(b) below, include in such Piggyback Registration all Registrable Securities beneficially owned by Securityholders on the date of the Piggyback Registration Notice with respect to which the Company has received written requests for inclusion therein within five (5) Business Days after the date of the Piggyback Registration Notice.

6. Priority in Public Offerings.

(a) For any Demand Registration or Shelf Takedown involving a Public Offering, if the managing underwriter of such Demand Registration or Shelf Takedown advises the Company and Securityholders of Registrable Securities in writing that in its reasonable and good faith opinion the number of Registrable Securities and other Company Securities if any, requested to be included in such Demand Registration or Shelf Takedown exceeds the number of Registrable Securities and other Common Stock, if any, that can be reasonably sold without adversely affecting the proposed offering price range acceptable to the Securityholders beneficially owning a majority of the Registrable Securities (on an as converted to Common Stock basis) initially requesting such Demand Registration or Shelf Takedown, the Company shall thereafter include in such Demand Registration or Shelf Takedown (A) first, the Registrable Securities beneficially owned by the Securityholders initiating such Demand Registration or Shelf Takedown, allocated on a pro rata basis on the basis of the number of Registrable Securities owned by such Securityholders; (B) second, the Registrable Securities beneficially owned by any other Securityholders requesting inclusion in such Demand Registration or Shelf Takedown, allocated on a pro rata basis among them on the basis of the number of Registrable Securities owned by such other Securityholders; (C) third, any Company Securities to be sold by the Company for its own account and requested to be included in such Demand Registration or Shelf Takedown; and (D) fourth, any other Company Securities requested to be included in such Demand Registration or Shelf Takedown.

(b) For any Piggyback Registration involving a Public Offering, if the managing underwriter of such Piggyback Registration advises the Company and holders of Registrable Securities in writing that in its reasonable and good faith opinion the number of Registrable Securities and other securities, if any, requested to be included in such Piggyback Registration exceeds the number of Registrable Securities and other securities, if any, that can be reasonably sold without adversely affecting the proposed offering price range acceptable to the Company, the Company shall thereafter include in such Piggyback Registration (i) in the case of an offering initiated by the Company (A) first, any Company Securities to be sold by the Company for its own account requested to be included in such Piggyback Registration; (B) second, the Registrable Securities beneficially owned by the Securityholders requesting inclusion in such Piggyback Registration, allocated on a pro rata basis among the respective Securityholders on the basis of the number of Registrable Securities owned by such Securityholders and (C) third, other Company Securities requested to be included in such Piggyback Registration and (ii) in the case of an offering not initiated by the Company, (A) first, the Company Securities owned by the Securityholders initiating such offering, allocated on a pro rata basis among such initiating Securityholders on the basis of the number of Company Securities included in the applicable Registration Statement owned by such Securityholders, (B) second, the Registrable Securities beneficially owned by the Securityholders requesting inclusion in such Piggyback Registration, allocated on a pro rata basis among the respective Securityholders on the basis of the number of Registrable Securities owned by such Securityholders (on an as converted to Common Stock basis); (C) third, any Company Securities to be sold by the Company for its own account requested to be included in such Piggyback Registration; and (D) fourth, other Company Securities requested to be included in such Piggyback Registration.

7. Postponement; Suspensions; Withdrawals.

(a) Postponement. The Company may suspend for up to forty-five (45) days (i) the filing, effectiveness or use of a Registration Statement for any Demand Registration or Shelf Supplement for any Shelf Takedown or (ii) the continued use of any other Registration Statement filed and declared effective pursuant to this Agreement if the Board of Directors determines in good faith, after consultation with its legal counsel, that the offer or sale of Registrable Securities would reasonably be expected to (i) have a Material Adverse Effect on any proposal or plan by the Company or any of its subsidiaries to engage in any material acquisition of assets or stock (other than in the ordinary course of business) or any material merger, consolidation, tender offer, recapitalization, reorganization, financing, offering or other transaction involving the Company or any of its subsidiaries; or (ii) require the premature disclosure of material non-public information that the Company has a bona fide business purpose in preserving as confidential; provided, however, that in no event shall the Securityholders be suspended from selling Registrable Securities for a period that exceeds an aggregate of 90 days in any 365-day period.

(b) Suspension. In the event that the Board of Directors determines to postpone the filing, effectiveness or use of any Registration Statement or Shelf Supplement or suspend the use of any Registration Statement filed and declared effective pursuant to this Agreement pursuant to this Section 7 (a “Suspension Event”), the Company shall give a notice to the Securityholders of Registrable Securities included or to be included in such Registration Statement or Shelf Supplement (a “Suspension Notice”), which shall state that such suspension shall continue only for so long as the Suspension Event or its effect is continuing. A Securityholder shall not sell any Registrable Securities pursuant to such Registration Statement at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice (as defined below). Securityholders may recommence sales of Registrable Securities pursuant to the Registration Statement following further written notice to such effect (an “End of Suspension Notice”) from the Company, and such End of Suspension Notice shall be given by the Company to the Securityholders promptly following the conclusion of any Suspension Event.

(c) Withdrawal Requests. Any Securityholder may withdraw its request for inclusion of Registrable Securities in a Registration Statement or Shelf Supplement by giving written notice to the Company of its intention to remove its Registrable Securities from such Registration Statement or Shelf Supplement within two (2) Business Days before the earlier of (i) the expected date of the commencement of marketing efforts for the Public Offering in connection with such Registration Statement or (ii) the effectiveness of the Registration Statement (a “Withdrawal Request”). The Company shall pay all Registration Expenses in connection with any Registration Statement subject to a Withdrawal Request.

8. Company Undertakings.

(a) Whenever Registrable Securities are registered pursuant to this Agreement, the Company shall promptly:

(i) use commercially reasonable efforts to effect the registration and sale of such Registrable Securities as soon as reasonably practicable in accordance with the intended method of disposition thereof;

(ii) before filing a Registration Statement or Prospectus or any amendments or supplements thereto, furnish to the Securityholders whose Registrable Securities are requested to be included in the Registration Statement copies of all such documents, other than exhibits, documents that are incorporated by reference and such documents that are otherwise publicly available on the Electronic Data Gathering, Analysis, and Retrieval system maintained by the Commission (“EDGAR”), proposed to be filed and provide Counsel to the Securityholders with a reasonable opportunity to review and comment on such documents of no less than five (5) Business Days;

(iii) prepare and file with the Commission a Registration Statement with regard to such Registrable Securities as soon as reasonably practicable but not later than the time required hereby and use its commercially reasonable efforts to cause such Registration Statement to become effective as soon thereafter as is reasonably practicable;

(iv) (A) prepare and file with the Commission such amendments and supplements to each Registration Statement as may be necessary to comply with the provisions of the Securities Act, including post effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective for the applicable time period required hereunder and, if applicable, file any Registration Statements pursuant to Rule 462(b) promulgated under the Securities Act; (B) cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; (C) comply in all material respects with the provisions of the Securities Act and the Exchange Act and any applicable securities exchange or other recognized trading market with respect to the disposition of all securities covered by such Registration Statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; and (D) provide additional information related to each Registration Statement as requested by, and obtain any required approval necessary from, the Commission or any federal or state governmental authority;

(v) furnish to each seller of Registrable Securities, and the managing underwriters, if any, without charge, such number of copies of the applicable Registration Statement, each amendment and supplement thereto, the Prospectus included in such Registration Statement and all exhibits and other documents filed therewith as such seller or such managing underwriters, if any, shall reasonably request to facilitate the

disposition of the Registrable Securities owned by such seller and a copy of any and all transmittal letters or other correspondence to or received from the Commission or any other governmental authority relating to such offer; provided, that the Company, in its discretion, may satisfy its obligation to furnish any such documents to the Securityholders and underwriters by filing such documents with the Commission so they are publicly available on EDGAR;

(vi) (A) register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests in writing, (B) keep such registration or qualification in effect for so long as such Registration Statement remains in effect, and (C) do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company shall not be required to (x) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction);

(vii) notify each selling Securityholder, the managing underwriters and Counsel to the Securityholders at any time when a Prospectus relating to the applicable Registration Statement is required to be delivered under the Securities Act upon the happening of any event as a result of which the Prospectus relating to such Registration Statement or any document incorporated or deemed to be incorporated therein by reference, contains an untrue statement of a material fact or omits any material fact necessary to make the Prospectus relating thereto not misleading or otherwise requires the making of any changes in such Registration Statement, Prospectus, or document, and, at the request of any such seller and subject to Section 4(a) hereof, and shall promptly prepare a supplement or amendment to such Prospectus, furnish copies of such supplement or amendment to each seller of such Registrable Securities, Counsel to the Securityholders and the managing underwriters, if any, as the same shall reasonably request and file such supplement or amendment with the Commission so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus as so amended or supplemented shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading,

(viii) notify each selling Securityholder, the managing underwriters, if any, and Counsel to the Securityholders as soon as the Company (A) becomes aware of any comments or inquiries by the Commission or any requests by the Commission or any federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus covering Registrable Securities or for additional information relating thereto, (B) becomes aware of the issuance, or receives a written threat of issuance, by the Commission of any stop order suspending, or a written statement threatening to suspend, the effectiveness of a Registration Statement covering the Registrable Securities or (C) receives any notification with respect to the suspension of the qualification or exemption from qualification of any Registrable Security for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose;

(ix) use reasonable best efforts (A) to cause the Common Stock (including any Common Stock underlying any Registrable Securities) to be listed on any National Securities Exchange duly selected by Securityholders in accordance herewith, in accordance with the applicable National Securities Exchange or Alternative Securities Exchange listing requirements, and (B), if the Common Stock is then listed on a National Securities Exchange or included for quotation on an Alternative Securities Exchange, to cause all such Registrable Securities continue to be so listed or included;

(x) provide and cause to be maintained a transfer agent and registrar for all such Registrable Securities from and after the effective date of the applicable Registration Statement;

(xi) in connection with any Public Offering: (A) enter into and perform under such customary agreements (including underwriting agreements in customary form, including customary representations and warranties and provisions with respect to indemnification and contribution) and take all such other actions as the Securityholders beneficially owning a majority of the Registrable Securities initially requested to be sold or the underwriters, if any, reasonably request in order to facilitate the disposition of such Registrable Securities and provide commercially reasonable cooperation, including causing appropriate officers to attend and participate in “road shows” and analyst or investor presentations and such other customary selling or other informational meetings organized by the underwriters, if any; and (B) use commercially reasonable efforts to obtain and cause to be furnished to the managing underwriters a signed counterpart of (i) one or more comfort letters from the Company’s independent public accountant(s) in customary form and covering such matters of the type customarily covered by comfort letters and (ii) a legal opinion and negative assurance letter of counsel to the Company addressed to the relevant underwriters in customary form and covering such matters of the type customarily covered by such letters as the managing underwriters reasonably request;

(xii) upon reasonable notice and during normal business hours, make available for inspection by a representative appointed by the Securityholders of a majority of Registrable Securities proposed to be included in any Public Offering pursuant to a Registration Statement, Counsel to the Securityholders, and any underwriter participating in any Public Offering pursuant to such Registration Statement, as applicable, all financial and other records and pertinent corporate documents of the Company, and cause the Company’s officers, directors, employees and independent accountants to supply all information reasonably requested by any such Person in connection with such Public Offering, and make themselves available at mutually convenient times to discuss the business of the Company and other matters reasonably requested by any such Person in connection with such Public Offering to enable them to exercise their due diligence responsibility, as applicable, provided that recipients of such financial and other records and pertinent corporate documents agree in writing to keep the confidentiality thereof pursuant to a written agreement reasonably acceptable to the Company;

(xiii) in the event of the issuance or threatened issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any Common Stock included in such Registration Statement for sale in any jurisdiction, the Company shall use commercially reasonable efforts to (A) prevent the issuance of any such stop order, and in the event of such issuance, to obtain the withdrawal of such order and (B) obtain the withdrawal of any order suspending or preventing the use of any related Prospectus or suspending qualification of any Registrable Securities included in such Registration Statement for sale in any jurisdiction at the earliest practicable date;

(xiv) provide a CUSIP number for the Registrable Securities prior to the effective date of the first Registration Statement including Registrable Securities (or maintain existing CUSIP numbers for any Registrable Securities that previously obtained such a CUSIP number);

(xv) promptly notify in writing the participating Securityholders, the sales or placement agent, if any, therefor and the managing underwriters of the securities being sold, if any, (A) when such Registration Statement or related Prospectus or any Prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to any such Registration Statement or any post-effective amendment, when the same has become effective; and (B) of any written comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto;

(xvi) cooperate with each Securityholder and each underwriter, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA;

(xvii) within the deadlines specified by the Securities Act, make all required filing fee payments in respect of any Registration Statement or Prospectus used under this Agreement (and any Public Offering covered thereby);

(xviii) if requested by any participating Securityholder or the managing underwriters, if any, promptly include in a Prospectus Supplement or Registration Statement amendment such information regarding the Company or the offering as the Securityholder or managing underwriters, if any, may reasonably request, including in order to permit the intended method of distribution of such securities, and make all required filings of such Prospectus supplement or such Registration Statement amendment as soon as reasonably practicable after the Company has received such request;

(xix) in the case of certificated Registrable Securities, cooperate with the participating Securityholders of Registrable Securities and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written representations from each participating Securityholder that the Registrable Securities represented by the certificates so delivered by such Securityholder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the Securityholders or managing underwriters, if any, may reasonably request at least two (2) Business Days prior to any sale of Registrable Securities provided that nothing in this Agreement shall require the Company to issue securities in certificated form unless such securities are already in certificated form; and

(xx) use commercially reasonable efforts to take all other actions deemed necessary or advisable in the reasonable judgment of the Company to effect the registration and sale of the Registrable Securities contemplated hereby.

(b) The Company shall hold in confidence and not make any disclosure of information concerning a Securityholder provided to the Company pursuant to this Agreement unless (i) disclosure of such information is necessary to comply with federal or state securities laws or the rules of any applicable securities exchange or other recognized trading market, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in, or is otherwise required to be included in, any Registration Statement or Prospectus pursuant to the Securities Act or any rule or regulation thereunder, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Company agrees that to the extent permitted by law, it shall, upon learning that disclosure of such information concerning a Securityholder is sought in or by a court or governmental body of competent jurisdiction or through other means, use its reasonable best efforts to give prompt written notice to such Securityholder (or such Securityholder’s counsel) and allow such Securityholder, at the Securityholder’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

(c) As of the date hereof and except as provided pursuant to the Plan, the Company represents and warrants that it is not a party to, or otherwise subject to, any other agreement granting registration rights to any other Person with respect to any securities of the Company, including securities convertible, exercisable or exchangeable into or for shares of any Capital Stock of the Company.

(d) With a view to making available certain rules and regulations of the Commission that may permit the sale of the Registrable Securities to the public without registration, on and after the date the Company becomes a reporting company under the Exchange Act and until such date as no Securityholder owns any Registrable Securities, the Company shall:

(i) use commercially reasonable efforts to continue to file in a timely manner all reports and other documents required, if any, to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted thereunder; and

(ii) make available information necessary to comply with Section 4(a)(7) under the Securities Act and Rule 144 and Rule 144A promulgated under the Securities Act, if available, with respect to resales of the Registrable Securities under the Securities Act to the extent required from time to time to enable such Securityholder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Section 4(a)(7), Rule 144 and Rule 144A promulgated under the Securities Act, or any successor rules or regulations hereafter adopted by the Commission.

(e) At any time the Company is not required to file public reports with the Securities Exchange Commission, the Company will continue to provide such public reports on EDGAR until the later of (i) such date as no Securityholder owns any Registrable Securities; (ii) the third anniversary of the date of this Agreement; and (iii) such date as no Securityholder owns any Convertible Notes.

(f) The Company acknowledges and agrees that nothing in this Agreement shall prohibit the Securityholders, at any time and from time to time, from selling or otherwise transferring Registrable Securities pursuant to a private placement or other transaction which is not registered pursuant to the Securities Act.

9. Securityholder Undertakings.

(a) Each selling Securityholder that requests inclusion of its Registrable Securities in any Registration Statement shall furnish to the Company such information regarding such Securityholder and its plan and method of distribution of such Registrable Securities as the Company may, from time to time, reasonably request. The Company may refuse to proceed with the registration of such Securityholder’s Registrable Securities if such Securityholder unreasonably fails to furnish such information within a reasonable time after receiving such request.

(b) No Securityholder may participate in any Public Offering hereunder unless such Securityholder (i) agrees to sell its securities on the basis provided in any underwriting arrangements in customary form entered into pursuant to this Agreement and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements; provided that no Securityholder included in any Public Offering shall be required to (x) make any representations or warranties to the Company or the underwriters other than (A) representations and warranties regarding (1) such Securityholder’s ownership of its Registrable Securities to be sold or transferred, (2) such Securityholder’s power and authority to effect such transfer, and (3) such matters pertaining to compliance with securities laws as may be reasonably requested by the Company or the underwriters, and (B) such other representations, warranties and other provisions relating to such Securityholder’s participation in such Public Offering as may be reasonably requested by the underwriters, or (y) to undertake any indemnification obligations to the Company with respect thereto, except as otherwise provided in Section 12(b), or to the underwriters with respect thereto, except to the extent of the indemnification being given to the underwriters and their controlling Persons in Section 12(b).

(c) Each of the Securityholders shall hold in confidence and not make any disclosure of information regarding any other Securityholder included in any Company Demand Registration Notice, Company Shelf Registration Notice and Company Shelf Takedown Notice provided to such Securityholders pursuant to this Agreement unless (i) disclosure of such information is necessary to comply with federal or state securities laws or the rules of any applicable securities exchange or other recognized trading market, (ii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iii) such information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement. The Securityholders agree that to the extent permitted by law, such Securityholders shall, upon learning that disclosure of such information concerning another Securityholder is sought in or by a court or governmental body of competent jurisdiction or through other means, use such Securityholder’s reasonable best efforts to give prompt written notice to the other Securityholder (or such other Securityholder’s counsel) and allow such other Securityholder, at the other Securityholder’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

(d) In the case of a Shelf Takedown or Demand Registration involving a Public Offering requested by Securityholders pursuant to this Agreement, the price, underwriting discount and other financial terms of the related underwriting agreement for the Registrable Securities shall be determined by the Securityholders beneficially owning a majority of the Registrable Securities initially requested to be included in such Public Offering.

(e) Notwithstanding anything to the contrary in this Agreement, any Securityholder may make a written election (an “Opt-Out Election”) to no longer receive from the Company any Company Demand Registration Notice, Company Shelf Registration Notice, Company Shelf Takedown Notice, Piggyback Registration Notice or Suspension Notice (other than a Suspension Notice with respect to a Registration Statement as to which such Securityholder’s Registrable Securities are, or have been requested to be, included in) (each, a “Covered Notice”), and, following receipt of such Opt-Out Election, the Company shall not be required to, and shall not, deliver any such Covered Notice to such Securityholder from the date of such Opt-Out Election and such Securityholder shall have no right to participate in any Registration Statement or Public Offering as to which such Covered Notices pertain. An Opt-Out Election shall remain in effect until it has been revoked in writing and received by the Company. A Securityholder who previously has given the Company an Opt-Out Election may revoke such election at any time, and there shall be no limit on the ability of a Securityholder to issue and revoke subsequent Opt-Out Elections. As of the date of this Agreement, the Securityholders listed on Schedule II hereto have given the Company an Opt-Out Election.

10. Registration Expenses.

(a) The Company shall pay all fees and expenses incurred in connection with registrations and Public Offerings made pursuant to this Agreement (excluding any underwriting discounts, fees or selling commissions or fees, or transfer taxes of any Securityholder, “Registration Expenses”), which shall include, without limitation, (i) all stock exchange, Commission, FINRA and other registration and filing fees, (ii) all fees and expenses incurred in connection with complying with any securities or blue sky laws

(including reasonable fees, charges and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities), (iii) all printing, messenger and delivery expenses, (iv) all fees, charges and disbursements of counsel to the Company and of its independent public accountants and any other accounting and legal fees, charges and expenses incurred by the Company (including any expenses arising from any special audits or “comfort letters” required in connection with or incident to any registration) and other Persons retained by the Company and (v) all fees and expenses incurred in connection with the listing of the Registrable Securities on a National Securities Exchange or Alternative Securities Exchange.

(b) The Company shall pay the reasonable fees and out-of-pocket expenses of one Counsel to the Securityholders, relating to or in connection with any registration or offering of Registrable Securities pursuant to this Agreement, as well as the reasonable fees and out-of-pocket expenses of any additional counsel retained by any Securityholder for the purpose of rendering a legal opinion on behalf of such Securityholder in connection with any Public Offering if the managing underwriters of such Public Offering or the Company reasonably request such legal opinion and Counsel to the Securityholders cannot reasonably provide such legal opinion due to legal jurisdiction or otherwise.

(c) The Company shall not be required to pay any underwriting fees, discounts and commissions, or any transfer taxes or similar taxes or charges, if any, attributable to the sale of Registrable Securities, and all such fees, discounts, commissions, taxes and charges related to any Registrable Securities shall be the sole responsibility of the Securityholders of such Registrable Securities.

11. Lock-Up Agreements.

(a) If reasonably requested by the Board of Directors, (i) each Securityholder that offers any Registrable Securities in an IPO or in any other Public Offering following an IPO, (ii) each Securityholder with an Ownership Percentage of at least 10% for whom the managing underwriter reasonably requests consistent with customary market practices (in the event of a Qualified IPO (whether or not participating therein)), and (iii) each of the Company’s executive officers and directors shall agree, for a period of up to 180 days following the date of the final prospectus in the case of an IPO or for a period of up to 90 days in the case of any other Public Offering following an IPO (the “Restricted Period”) not to (A) offer, sell, contract to sell (including any short sale), pledge, grant any option to purchase, transfer or otherwise dispose of (including sales pursuant to Rule 144 or Section 1145 of the Bankruptcy Code), directly or indirectly, any Company Securities (including Company Securities that may be deemed to be owned beneficially by such Securityholder in accordance with the rules and regulations of the Commission), (B) enter into a transaction that would have the same effect as described in clause (A) above, (C) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences or ownership of any Company Securities, whether such transaction is to be settled by delivery of such Company Securities, in cash or otherwise (each of (A), (B) and (C) above, a “Sale Event”), or (D) publicly disclose the intention to enter into any Sale Event, unless the underwriters managing the IPO or Public Offering otherwise agree in writing in a Lock-Up Agreement pursuant to this Section 11.

(b) Any lock-up agreement (a “Lock-Up Agreement”) required pursuant to this Section 11 shall be addressed to the managing underwriters of such IPO or Public Offering and be in customary form and substance with customary exceptions as reasonably requested by such managing underwriters. Each Person that is required to execute a Lock-Up Agreement pursuant to this Section 11 agrees to execute a Lock-Up Agreement setting forth such party’s agreement not to engage in any Sale Events during the Restricted Period if reasonably requested by the managing underwriters of such Public Offering. Notwithstanding the foregoing, the Securityholders shall only be required to enter into Lock-Up Agreements pursuant to this Section 11 if each of the Company’s executive officers and directors have entered into and are bound by Lock-Up Agreements that are not less restrictive than the Securityholders’ Lock-Up Agreements.

(c) If reasonably requested by the managing underwriters for any IPO or Public Offering, the Company shall (i) agree to a customary lock up provision applicable to the Company in an underwriting agreement as reasonably requested by the managing underwriters for such IPO or Public Offering, including customary exceptions to be agreed in good faith between the Company and the managing underwriters for such IPO or Public Offering and (ii) use commercially reasonable efforts to cause each of its executive officers and directors, in each case, to enter into Lock-Up Agreements with the managing underwriters of such IPO Public Offering meeting the requirements of this Section 11.

(d) Any waiver of requirements or restrictions in this Section 11 that is granted by the underwriters to (i) any person or entity with an Ownership Percentage of at least 1% or (ii) any of the Company’s executive officers and directors, in each case, shall also apply to the same extent to all Securityholders for the same proportion of Company Securities waived for such other person (the “MFN Release”) unless such waiver is in connection with an underwritten offering pursuant to an effective SEC registration statement, all Securityholders shall be eligible to participate in such offering and the MFN Release shall only apply with respect to such Securityholder’s sales in such offering; provided, that the foregoing provision shall not apply until the underwriters have waived the requirements or restrictions in this Section 11 with respect to Company Securities having an aggregate value at least equal to 1.0% of the aggregate fair market value of the Common Stock then outstanding.

12. Indemnification; Contribution.

(a) Indemnification by the Company. The Company shall indemnify and hold harmless each Securityholder registered pursuant to this Agreement, such Securityholder’s Affiliates, Related Funds, directors, officers, employees, members, managers, agents and any Person who controls any such Securityholder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), any underwriter that facilitates the sale of the Registrable Securities and any Person who controls such underwriter (within the meaning of Section 15 of the Securities Act or

Section 20 of the Exchange Act) to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities and expenses (“Losses”) to which they or any of them may become subject insofar as such Losses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement pursuant to which Registrable Securities were registered, Prospectus, preliminary prospectus, any road show, as defined in Rule 433(h)(4) under the Securities Act (“road show”), or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in the case of any Prospectus, preliminary prospectus or road show, in light of the circumstances under which they were made, to make the statements therein not misleading. The Company agrees to reimburse each such indemnified party for any reasonable legal or other out-of-pocket expenses incurred by them in connection with investigating or defending any such Losses; provided, however, that the Company will not be liable in any case to the extent that any such Loss arises out of or is based upon any such untrue or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of any such Securityholder specifically for inclusion therein, including, without limitation, any notice and questionnaire or out of sales of Registrable Securities made during a Suspension Event after notice is given pursuant to Section 7 hereof. This indemnity agreement will be in addition to any liability which the Company may otherwise have.

(b) Indemnification by the Securityholders. Each Securityholder severally (and not jointly) shall indemnify and hold harmless the Company and each of its Affiliates, directors, officers, employees, members, managers, agents and each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), any underwriter that facilitates the sale of Registrable Securities and any Person who controls such underwriter (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) to the fullest extent permitted by applicable law, from and against any and all Losses to which they or any of them may become subject insofar as such Losses arise out of or are based upon any untrue or alleged untrue statement of a material fact contained in any Registration Statement pursuant to which Registrable Securities were registered, Prospectus, preliminary Prospectus, road show or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary in the case of any Prospectus, preliminary prospectus or road show, in light of the circumstances under which they were made, to make the statements therein not misleading, to the extent, but only to the extent, that any such untrue statement or alleged untrue statement or omission or alleged omission is contained in any written information furnished to the Company by or on behalf of such Securityholder specifically for inclusion therein; provided, however, that the maximum amount to be indemnified by such Securityholder pursuant to this Section 12(b) shall be limited to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Securityholder in the registration to which such Registration Statement, Prospectus, preliminary prospectus or road show relates; provided, further, that a Securityholder shall not be liable in any case to the extent that prior to the filing of any such Registration Statement, Prospectus, preliminary prospectus or road show or any amendment thereof or supplement thereto,

each Securityholder has furnished in writing to the Company, information expressly for use in, and within a reasonable period of time prior to the effectiveness of such Registration Statement or the use of the Prospectus, preliminary prospectus or road show, or any amendment thereof or supplement thereto which corrected or made not misleading information previously provided to the Company. This indemnity agreement will be in addition to any liability which any such Securityholder may otherwise have.

(c) Conduct of Indemnification Proceedings. Promptly after receipt by an indemnified party under this Section 12 of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 12(c), notify the indemnifying party in writing of the commencement thereof; provided that failure of the indemnified party to notify the indemnifying party (i) will not relieve the indemnifying party from liability under Section 12(a) or Section 12(b) above unless and to the extent such action and such failure results in material prejudice to the indemnifying party and forfeiture by the indemnifying party of substantial rights and defenses; and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in Section 12(a) or Section 12(b) above. The indemnifying party shall be entitled to participate in any such action and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to the indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, except as provided in the next sentence, after notice from the indemnifying party to such indemnified party of its election to so assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. Notwithstanding the indemnifying party’s rights in the prior sentence, the indemnified party shall have the right to employ its own counsel, and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if:

(iii) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with an actual or potential conflict of interest;

(iv) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party;

(v) the indemnifying party has not employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action; or

(vi) the indemnifying party authorized the indemnified party to employ separate counsel at the expense of the indemnifying party.

No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party (which consent shall not be unreasonably withheld), consent to entry of any judgment or enter into any settlement or compromise unless such settlement or compromise (x) includes as an unconditional term thereof the giving by the claimant or plaintiff therein, to such indemnified party, of a full and final release from all liability in respect to such claim or litigation and (y) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of such indemnified party. Notwithstanding anything in this Section 12, in no event shall the indemnifying party be liable for fees, costs and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for any indemnified party.

(d) Contribution. In the event that the indemnity provided in Section 12(a) or Section 12(b) above is unavailable or insufficient to hold harmless an indemnified party for any reason, then each applicable indemnifying party agrees to contribute to the aggregate Losses paid or payable (including reasonable legal or other reasonable out-of-pocket expenses incurred in connection with investigating or defending same) to such indemnified party in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other; provided, however, that the maximum amount of liability in respect of such contribution shall be limited in the case of any Securityholder to the net proceeds (after deducting underwriters’ discounts and commissions) received by such Securityholder in connection with such registration. The parties agree that it would not be just and equitable if contribution pursuant to this Section 12(d) were determined by pro rata allocation (even if the Securityholders of Registrable Securities or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 12(d). The amount paid or payable by an indemnified party as a result of the Losses referred to above in this Section 12(d) shall be deemed to include any reasonable legal or other reasonable out-of-pocket expenses incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 12(d), no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 12, each Person who controls any Securityholder, agent or underwriter (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each director, officer, employee and agent of any such Securityholder, agent or underwriter shall have the same rights to contribution as such Securityholder, agent or underwriter, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each officer and director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this Section 12(d).

(e) Survival. The provisions of this Section 12 will remain in full force and effect, regardless of any investigation made by or on behalf of any Securityholder or the Company or any of the officers, directors or controlling Persons referred to in this Section 12, and will survive the transfer of Registrable Securities.

13. Transfer of Registration Rights.

The rights of a Securityholder hereunder may be transferred, assigned, or otherwise conveyed on a pro rata basis in connection with any transfer, distribution, assignment, or other conveyance of Registrable Securities to any transferee or assignee; provided that all of the following additional conditions are satisfied with respect to any transfer, assignment or conveyance of rights hereunder: (a) such transfer, assignment or conveyance is effected in accordance with applicable securities laws and in compliance with the charter documents of the Company; (b) such transferee or assignee agrees in writing to become subject to the terms of this Agreement by executing and delivering to the Company a Joinder; and (c) the Company is given written notice by such Securityholder within twenty (20) Business Days of such transfer or assignment, stating the name and address of the transferee or assignee, identifying the Registrable Securities with respect to which such rights are being transferred or assigned and the total number of Registrable Securities and other Company Securities beneficially owned by such transferee or assignee.

14. Limitations on Subsequent Registration Rights.

From and after the date hereof, the Company shall not, without the prior written consent of the Securityholders beneficially owning a majority of Registrable Securities then outstanding, enter into any agreement (other than pursuant to Section 13 hereof) with any current or future holder of any Company Securities that would allow such current or future holder to require the Company to include securities in any Registration Statement other than an Excluded Registration filed by the Company or for Securityholders on a basis other than pari passu with, or expressly subordinate to, the piggyback rights of the Securityholders of Registrable Securities hereunder; provided, that in no event shall the Company enter into any agreement (other than pursuant to Section 13 hereof) that would permit another holder of securities of the Company to participate on a pari passu basis (in terms of priority of cut-back based on advice of underwriters) with a requesting Securityholder in a Public Offering pursuant to this Agreement.

15. Board Observer Right.

A Securityholder that, together with its Affiliates and Related Funds, owns more than 5% of the outstanding shares of the Voting Stock shall have the right to designate one Board observer who shall be entitled to attend all meetings of the Board of Directors and any committee thereof and receive all materials that are provided to directors of the Company or committee members; provided that such Board observer shall have no voting rights with respect to actions taken or elected not to be taken by the Board of Directors or any committee thereof.

16. Amendment, Modification and Waivers; Further Assurances.

(a) Amendment. This Agreement may be amended, modified, superseded, cancelled, renewed or extended only by a written instrument signed by (i) the Company, and (ii) the Securityholders of at least a majority of the Registrable Securities that are shares of Voting Stock; provided, that (1) no provision of this Agreement shall be modified or amended in a manner that is disproportionately and materially adverse to any Securityholder, without the prior written consent of such Securityholder, as applicable, and (2) none of the provisions of Sections 8(e) and 15 may be amended, modified, superseded or cancelled, unless such action is approved by the affirmative vote of the Securityholders of at least 66 ^2/3% of the Registrable Securities that are shares of Voting Stock. The terms and conditions of this Agreement may be waived only by written waiver signed by the party hereto waiving compliance.

(b) Notwithstanding Section 16(a), the addition of new parties to this Agreement in accordance with its terms as a result of any transfers permitted in accordance with this Agreement shall not be deemed to be an amendment requiring the consent of any Securityholder.

(c) Changes in Common Stock. If, and as often as, there are any changes in the Common Stock or other capital stock of the Company by way of stock split, stock dividend, combination or reclassification, or through merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof as may be required so that the rights and privileges granted hereby shall continue with respect to the Registrable Securities as so changed and the Company shall make appropriate provision in connection with any merger, consolidation, reorganization or recapitalization that any successor to the Company (or resulting parent thereof) shall agree, as a condition to the consummation of any such transaction, to expressly assume the Company’s obligations hereunder.

(d) Effect of Waiver. No waiver of any terms or conditions of this Agreement shall operate as a waiver of any other breach of such terms and conditions or as a waiver of any other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver of such provision or of any other provision hereof. No written waiver hereunder, unless it by its own terms explicitly provides to the contrary, shall be construed to effect a continuing waiver of the provisions being waived and no such waiver in any instance shall constitute a waiver in any other instance or for any other purpose or impair the right of the party against whom such waiver is claimed in all other instances or for all other purposes to require full compliance with such provision. The failure of any party to enforce any provision of this Agreement shall not be construed as a waiver of such provision and shall not affect the right of such party thereafter to enforce each provision of this Agreement in accordance with its terms.

(e) Further Assurances. Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement.

17. Miscellaneous.

(a) Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and assigns of the parties hereto whether so expressed or not. In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of Securityholders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent Securityholder. No assignment of this Agreement by the Company, or any of the Company’s rights, interests or obligations hereunder, shall be effective against any Securityholder without the prior written consent of such Securityholder (such consent not to be unreasonably withheld).

(b) Remedies; Specific Performance. Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically, to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor; provided that the liability of the Securityholders shall be several and not joint. The Company and each other party hereto agrees and acknowledges that money damages would be an inadequate remedy for any breach of the provisions of this Agreement and that any party hereto may in its sole discretion obtain specific performance and/or injunctive relief (without posting any bond or other security) to enforce or prevent violation of the provisions of this Agreement and shall not be required to prove irreparable injury or that such party does not have an adequate remedy at law with respect to any breach of this Agreement (each of which elements the parties hereby admit). Each of the parties hereto further agree and acknowledge that each and every obligation applicable to it contained in this Agreement shall be specifically enforceable against it and hereby waives and agrees not to assert any defenses against an action for specific performance of their respective obligations hereunder. All rights and remedies existing under this Agreement are cumulative to, and not exclusive of, any rights or remedies available under this Agreement or otherwise.

(c) Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given when (i) delivered personally to the recipient, (ii) e-mailed or sent by facsimile to the recipient or (iii) one Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands and other communications shall be sent to the Company at the address set forth below and to any Securityholder at the address set forth on the signature page hereto (with copies sent at the address set forth below), or at such address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party.

if to the Company:

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Bryce Seki, VP—General Counsel

E-mail: BSeki@pioneeres.com

with copies to:

Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10019

Attention: Brian S. Hermann,

Elizabeth R. McColm,

Brian Bolin

Eugene Y. Park

E-mail: bhermann@paulweiss.com

emccolm@paulweiss.com

bbolin@paulweiss.com

epark@paulweiss.com

if to any Securityholder, at its address and the address of any representative listed on its signature pages

with copies (which shall not constitute notice) to:

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, New York 10017

Attention: Damian S. Schaible

Natasha Tsiouris

Erik Jerrard

E-mail: damian.schaible@davispolk.com,

natasha.tsiouris@davispolk.com

erik.jerrard@davispolk.com

and

Fried, Frank, Harris, Shriver & Jacobson LLP

One New York Plaza

New York, New York 10004

Attention: Brad Eric Scheler

Warren de Wied

John M. Bibona

E-mail: brad.eric.scheler@friedfrank.com

warren.de.wied@friedfrank.com

john.bibona@friedfrank.com

If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal holiday in the State of New York or the jurisdiction in which the Company’s principal office is located, the time period shall automatically be extended to the Business Day immediately following such Saturday, Sunday or legal holiday.

(d) No Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Securityholders of Registrable Securities in this Agreement.

(e) Counterparts. This Agreement may be executed in one or more counterparts, and may be delivered by means of facsimile or electronic transmission in portable document format (“pdf”), each of which shall be deemed to be an original and shall be binding upon the party who executed the same, but all of such counterparts shall constitute the same agreement.

(f) Descriptive Headings; Interpretation; No Strict Construction. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a substantive part of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs shall include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and, if applicable, hereof. The words “include,” “includes” or “including” in this Agreement shall be deemed to be followed by “without limitation.” The use of the words “or,” “either” or “any” shall not be exclusive. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. All references to laws, rules, regulations and forms in this Agreement shall be deemed to be references to such laws, rules, regulations and forms, as amended from time to time or, to the extent replaced, the comparable successor thereto in effect at the time. All references to agencies, self-regulatory organizations or governmental entities in this Agreement shall be deemed to be references to the comparable successors thereto from time to time.

(g) Delivery by Facsimile and Electronic Means. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine or other electronic means, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or other electronic means to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or other electronic means as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

(h) Arm’s Length Agreement. Each of the parties to this Agreement agrees and acknowledges that this Agreement has been negotiated in good faith, at arm’s length, and not by any means prohibited by law.

(i) Sophisticated Parties; Advice of Counsel. Each of the parties to this Agreement specifically acknowledges that (i) it is a knowledgeable, informed, sophisticated Person capable of understanding and evaluating the provisions set forth in this Agreement and (ii) it has been fully advised and represented by legal counsel of its own independent selection and has relied wholly upon its independent judgment and the advice of such counsel in negotiating and entering into this Agreement.

(j) Governing Law. This Agreement and the exhibits, attachments and annexes hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) to the extent such rules or provisions would cause the application of the laws of any jurisdiction other than the State of Delaware.

(k) Submission to Jurisdiction. Any action, suit or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby must be brought in the Court of Chancery of the State of Delaware, or to the extent such court does not have subject matter jurisdiction, the United States District Court for the District of Delaware, or to the extent such court also does not have subject matter jurisdiction, another court of the State of Delaware, County of New Castle, so long as one of such courts shall have subject matter jurisdiction over such suit, action or proceeding, and that any case of action arising out of this Agreement shall be deemed to have arisen from a transaction of business in the State of Delaware, and each party consents to the exclusive jurisdiction and venue of such courts (and of the appropriate appellate courts therefrom) in any such action, suit or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such, action, suit or proceeding in any such court or that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

(l) Waiver of Jury Trial. Each of the parties to this Agreement hereby agrees to waive its respective rights to a jury trial of any claim or cause of action based upon or arising out of this Agreement. The scope of this waiver is intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this Agreement, including contract claims, tort claims and all other common law and statutory claims. Each party hereto acknowledges that this waiver is a material inducement to enter into this Agreement, that each has already relied on this waiver in entering into this Agreement and that each will continue to rely on this waiver in

their related future dealings. Each party hereto further warrants and represents that it has reviewed this waiver with its legal counsel and that it knowingly and voluntarily waives its jury trial rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 17(l) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.

(m) Complete Agreement. This Agreement and any certificates, documents, instruments and writings that are delivered pursuant hereto, represent the complete agreement among the parties hereto as to all matters covered hereby, and supersedes any prior agreements or understandings among the parties.

(n) Severability. In the event any one or more of the provisions contained in this Agreement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction). The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

(o) Termination. This Agreement shall terminate and be of no further force or effect when there shall no longer be any Registrable Securities outstanding; provided that (i) any Securityholder may elect to terminate its rights under this Agreement by giving the Company written notice thereof and (ii) this Agreement shall automatically terminate with respect to a Securityholder that no longer holds any Registrable Securities; provided further that the provisions of Sections 8(b), 8(e), 9(e), 10, 11, 12, 15 and 17 shall survive any termination pursuant to this Section 17(o).

(p) Independent Agreement by the Securityholders. The obligations of each Securityholder hereunder are several and not joint with the obligations of any other Securityholder, and no provision of this Agreement is intended to confer any obligations on any Securityholder vis-à-vis any other Securityholder. Nothing contained herein, and no action taken by any Securityholder pursuant hereto, shall be deemed to constitute the Securityholders as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Securityholders are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated herein.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first written above.


PIONEER ENERGY SERVICES CORP.

By:		/s/ Lorne E. Phillips
		Name: Lorne E. Phillips
		Title: Executive Vice President and Chief
		Financial Officer

[Signature Page to Registration Rights Agreement]

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first written above.


[SECURITYHOLDER]



By:
		Name:
		Title:


Address:







Telephone:

Fax No.:

E-mail:

SCHEDULE I

List of Holders of the Company Securities on the Effective Date

Redacted.

SCHEDULE II

Opt-Out Elections

None.

ANNEX A

Form of Joinder Agreement

THIS JOINDER AGREEMENT is made and entered into by the undersigned with reference to the following facts:

Reference is made to the Registration Rights Agreement, dated as of May 29, 2020, as amended (the “Registration Rights Agreement”), by and among Pioneer Energy Services Corp. (the “Company”) and the other parties thereto. Capitalized terms used but not defined in this Joinder Agreement shall have the meanings ascribed thereto in the Registration Rights Agreement.

As a condition to the acquisition of rights under the Registration Rights Agreement in accordance with the terms thereof, the undersigned agrees as follows:

1. The undersigned hereby agrees to be bound by the provisions of the Registration Rights Agreement and undertakes to perform each obligation as if a party thereunder and an original signatory thereto in such capacity.

2. This Joinder Agreement shall bind, and inure to the benefit of, the undersigned hereto and its respective devisees, heirs, personal and legal representatives, executors, administrators, successors and assigns.

3. This Joinder Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) to the extent such rules or provisions would cause the application of the laws of any jurisdiction other than the State of Delaware.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement.


[SECURITYHOLDER]

By:
		Name:
		Title:

Date:


Address:







Phone Number:

Facsimile Number:

E-mail for Notice:

I.R.S. I.D. Number:

Amount of Registrable Securities Acquired:

Exhibit 10.4

PIONEER ENERGY SERVICES CORP.

2020 EMPLOYEE INCENTIVE PLAN

ARTICLE 1

PURPOSE

Pioneer Energy Services Corp., a Delaware corporation (the “Company”), hereby establishes the Pioneer Energy Services Corp. 2020 Employee Incentive Plan (the “Plan”), effective as of May 29, 2020 (the “Effective Date”). The purpose of the Plan is to advance the interests of the Company and its shareholders by providing a means by which the Company and its Subsidiaries can attract, retain and motivate selected employees and provide such individuals with an opportunity to participate in the increased value of the Company and its Subsidiaries which their effort, initiative and skill have helped produce.

ARTICLE 2

DEFINITIONS

As used in the Plan, the following terms shall have the meanings set forth below:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person. For the purpose of this definition, the term “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Award” means any grant of Options, Restricted Stock, RSUs or Other Share-Based Awards granted under the Plan.

“Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award, which may, but need not (as determined by the Committee), be required to be executed or acknowledged by a Participant as a condition precedent to receiving an Award or the benefits under an Award.

“Beneficial owner” or “beneficially own” has the meaning given to such term in Rule 13d-3 under the Exchange Act.

“Board” means the board of directors of the Company.

“Bylaws” means the Bylaws of the Company, as amended from time to time.

“Cause” shall mean and include (unless otherwise provided in a Participant’s Award Agreement) the Participant’s (a) commission of any act or omission constituting fraud under any law of the State of Texas or other law applicable to the Participant, (b) conviction of, or a plea of nolo contendere to, a felony, (c) embezzlement or theft of property or funds of the Company or any of its Affiliates or (d) refusal to perform the Participant’s duties with the Company; (e) failure to follow the instructions of the Board or the Participant’s supervisor or a senior executive officer that, in each case, are lawful,

reasonable and commensurate with the Participant’s title and duties, (f) conduct in connection with the Participant’s duties, performance or responsibilities that is fraudulent, unlawful or grossly negligent; or (g) willful misconduct with respect to the Participant’s duties; provided, that the conduct described in clauses (d), (e) and (g) shall not constitute Cause unless the Company has provided the Participant with written notice of such conduct and, to the extent curable, the Participant fails to cure such conduct within 10 days of receiving such notice.

“Change in Control” means the consummation of any transaction or series of transactions, pursuant to which one or more Persons or Groups (as such term is used in Section 13(d) of the Exchange Act) (other than a Permitted Holder) acquires or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or Group shall be deemed to have “beneficial ownership” of all securities that such Person or Group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of (a) capital stock of the Company possessing (i) the power to vote more than 50% of the capital stock of the Company or (ii) the voting power sufficient to elect a majority of the members of the Board or the board of directors of any successor to the Company (whether such transaction is effected by merger, consolidation, recapitalization, sale or transfer of the Company’s capital stock or otherwise), in either case determined on a fully-diluted basis (taking in account all such securities that such Persons or Groups have the right to acquire pursuant to any option right), or (b) all or substantially all of the assets of the Company and its Subsidiaries.

“Code” means the Internal Revenue Code of 1986, as amended, and applicable rules and regulations thereunder.

“Committee” means a committee of two or more members of the Board designated by the Board to administer the Plan, or if no such committee has been designated, the Board.

“Common Shares” means shares of the common stock, par value $0.01 per share, of the Company and any other security into which such common stock may hereafter be converted or changed.

“Company Group” means the Company, its Subsidiaries, and any of their Affiliates.

“Convertible Bonds” has the meaning set forth in the Charter.

“Disability” means any medically determinable physical or mental impairment resulting in the Participant’s inability to engage in any substantial gainful activity, where such impairment is likely to result in death or can be expected to last for a continuous period of not less than 12 months, as determined reasonably and in good faith by the Committee.

“Eligible Individual” means any employee of the Company or any of its Subsidiaries.

“Encumbrance” means any lien, security interest, pledge, claim, option, right of first refusal, marital right or other encumbrance with respect to any Common Share issued in respect of any Award.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and applicable rules and regulations thereunder.

“Exercise Price” means the price at which a Common Share may be purchased by a Participant pursuant to an Option, as set forth in the relevant Award Agreement.

“Fair Market Value” means, with respect to a Common Share as of any date of determination, the fair market value as determined in good faith by the Board in its sole discretion.

“Incentive Stock Option” means an Option granted pursuant to Section 6.01 that is intended to meet the requirements of Section 422 of the Code.

“Option” means an option to purchase Common Shares.

“Other Share-Based Award” means any award of, denominated in or based on Common Shares granted to a Participant, pursuant to Section 6.04, which may include, for the avoidance of doubt, stock appreciation rights, dividend or dividend equivalent rights and other similar awards.

“Participant” means an Eligible Individual who receives an Award under the Plan.

“Permitted Holder” means the Company or any of its Affiliates, any employee benefit plan(s) sponsored by the Company or any of its Affiliates, or any Person or Group (as such term is used in Sections 13(d) of the Exchange Act), who beneficially owns (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or Group shall be deemed to have “beneficial ownership” of all securities that such Person or Group has the right to acquire (such right, an “option right”), whether such right is exercisable immediately or only after the passage of time) at least 10% of the Common Shares on the Effective Date on a fully-diluted basis (taking into account all such securities that such Person or Group has the right to acquire pursuant to any option right), and the respective controlled Affiliates of such Person or Group.

“Person” means an individual, corporation, limited liability Company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Plan” has the meaning set forth in Article 1.

“Restricted Stock” means any award of Common Shares that is subject to vesting conditions pursuant to Section 6.02.

“Restricted Stock Units” or “RSUs” means a contractual right to receive the value of the underlying Common Shares in cash, Common Shares or a combination thereof pursuant to Section 6.03.

“Section 409A” has the meaning assigned to it in Article 15.

“Securities Act” means the Securities Act of 1933, as amended, and applicable rules and regulations thereunder.

“Shareholder” shall have the meaning designated in the Bylaws.

“Subsidiary” means with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are at the time directly or indirectly owned by such Person.

“Unvested Award” means, as of any date, any Award (or any portion thereof) which by its terms has not yet vested as of such date.

“Vested Award” means, as of any date, any Award (or any portion thereof) which by its terms has vested as of such date.

ARTICLE 3

ADMINISTRATION

Section 3.01. Committee. The Plan shall be administered by the Committee.

Section 3.02. Authority of the Committee. Subject to the provisions of the Plan, the Committee shall have the authority, in its discretion and on behalf of the Company:

(a) to select from among the Eligible Individuals those persons who shall receive Awards, to determine the time or times of receipt, to determine the types of Awards and the number of Common Shares covered by the Awards, to establish the terms, conditions, performance criteria, restrictions and other aspects of the Awards and the provisions of the applicable Award Agreement and to modify, amend, cancel or suspend Awards;

(b) to interpret the Plan;

(d) to determine whether, to what extent and under what circumstances Awards may be settled in cash, Common Shares, other Awards or other property, including without limitation the authority to settle Awards in cash or property upon a Change in Control or other similar corporate transaction;

(e) to determine whether, to what extent and under what circumstances, cash, Common Shares, other Awards, other property and any other amounts payable with respect to an Award shall or may be deferred either automatically or at the election of the Participant or of the Committee;

(f) to cancel and re-grant, accelerate vesting or adjust the Exercise Price of an Award previously granted under the Plan; and

(g) to make all other determinations and findings, including factual findings, deemed necessary or advisable for the administration of the Plan.

Section 3.03. Committee Discretion. In exercising its authority, the Committee shall have the broadest possible discretion, including but not limited to the ability to take different actions with respect to different Participants under the Plan. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations and other decisions made in good faith by the Committee under or with respect to the Plan, any Award or Award Agreement shall be final, binding and conclusive on all persons.

Section 3.04. Committee Delegation. To the extent permitted by applicable law, the Committee may delegate its authority, or specified items thereof, to one or more designated officers of the Company or other committees of the Board.

ARTICLE 4

SHARES SUBJECT TO THE PLAN

Section 4.01. General Limitation.

(a) Subject to Section 4.02 below, the maximum number of Common Shares that may be issued under the Plan is 1,198,074 Common Shares.

(b) To the extent any Common Shares covered by an Award is not issued because the Award is forfeited, canceled or expires without being exercised, such Common Shares shall not be deemed to have been issued for purposes of determining the maximum number of Common Shares available for issuance under the Plan.

(c) Notwithstanding anything to the contrary in Section 4.01(b) above, Common Shares subject to an Award shall not again be available for issuance under the Plan if such Common Shares are (i) Common Shares tendered to or withheld by the Company (by either actual delivery or by attestation) to satisfy payment of the Exercise Price of any Option or any Other Share-Based Award granted under the Plan or (ii) not delivered because the Award is settled in cash or are Common Shares withheld to satisfy applicable tax withholding obligations or otherwise arising from an Option or other Award.

Section 4.02. Adjustments. In the event that any corporate transaction or distribution (including, without limitation, any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split up, spin off, repurchase, combination or exchange of Common Shares or other securities of the Company, but not including ordinary dividends) affects the Common Shares such that the Committee determines that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then (a) the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number of Common Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under Section 4.01; (ii) the number of Common Shares or other securities of the Company (or number and kind of other securities and property) subject to outstanding Awards; and (iii) the Exercise Price or other terms and conditions of any Award or, (b) if deemed appropriate, the Committee may make provision for a cash payment to the holder of an outstanding Award in full satisfaction of such Award as set forth in Section 4.03.

Section 4.03. Cancelation of Awards. For the avoidance of doubt, if an adjustment is appropriate under Section 4.02, the Committee may, if deemed equitable by the Committee in light of the applicable circumstances, cause any Award granted hereunder to be canceled in consideration of a cash payment to the holder of such Award equal in value to the product of (a) the number of Common Shares subject to such Award, multiplied by (b) the Fair Market Value of a Common Share as of the date of such cancelation (less any Exercise Price or other applicable exercise, hurdle or similar price) with respect to such canceled Award, provided that, for the avoidance of doubt, if the Award has an Exercise Price that exceeds the Fair Market Value of the Common Shares underlying the Award, the Award may be canceled for no consideration.

Section 4.04. Anti-Dilution. The Common Shares available for issuance pursuant to Section 4.01 and all outstanding Awards thereunder shall be subject to dilution for further equity issuances (except with respect to issuances (x) with respect to the number of shares available for issuance pursuant to Section 4.01 and (y) resulting from the conversion of the Convertible Bonds), on a ratable basis with all Common Shares of the Company.

Section 4.05. Other Provisions. The grant of any Award may also be subject to such other provisions as the Committee deems appropriate (whether or not applicable to any Award granted to any other Participant) and set forth in the applicable Award Agreement.

ARTICLE 5

ELIGIBILITY AND PARTICIPATION

Key employees of the Company or any of its Subsidiaries who are expected to be important to the ongoing business of the Company and any of its Subsidiaries shall be eligible to participate in and receive Awards under the Plan, which individuals will be selected by the Board.¹ Awards may be granted on conditions specified by the Committee.

ARTICLE 6

AWARDS

Section 6.01. Options.

(a) General. The Committee is authorized to grant Options under the Plan, which shall be evidenced by an Award Agreement and shall contain terms and conditions not inconsistent with the limitations and conditions set forth herein.

As soon as practicable (but in no event more than 15 days following) the Effective Date, in accordance with an allocation schedule to be reasonably determined by the Board after good faith consultation with the Company’s Chief Executive Officer, the Company shall make the initial grants under the Plan, 100% in the form of Awards of Restricted Stock, with respect to an aggregate number of 599,037 Common Shares, pursuant to the form of Restricted Stock Award Agreement attached as Exhibit A hereto, to the initial designated participants in the Company’s Key Executive Severance Plan as set forth on Exhibit A thereof.

(b) Exercise Price. The Exercise Price of each Option shall be established by the Committee at the time the Option is granted. Unless otherwise determined by the Committee, the Exercise Price shall not be less than the Fair Market Value of a Common Share on the date of grant of the Option (which shall not be less than the “fair market value” of a Common Share within the meaning of Section 409A).

(c) Number of Common Shares. Each Award Agreement shall specify the number of Common Shares that are subject to the Option.

(d) Vesting. The vesting schedule for each grant of Options shall be set forth in the applicable Award Agreement, including the treatment of outstanding Options upon a Participant’s termination of employment or service. An Option shall be exercisable only in accordance with the terms and conditions and during such periods as may be established by the Committee in the Award Agreement, or otherwise in accordance with the Plan and the Award Agreement. The Committee may, in its discretion, provide that such an Option may be exercised in whole or in part, in installments, cumulative or otherwise, for any period of time specified by the Committee or based on performance or other criteria established by the Committee.

(e) Payment. No Common Shares shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price, or adequate provision therefor (in the discretion of the Committee), is received by the Company. Such payment may be made, as determined by the Committee in its sole discretion, (i) in cash; (ii) solely to the extent permitted by the Committee, in Common Shares owned by the Participant or in Common Shares which may be received by the Participant upon exercise of the Option (in each case, the value of such Common Shares shall be their Fair Market Value on the date of exercise); (iii) in other property acceptable to the Committee; or (iv) by any combination thereof.

(f) Term of Options. An Option and all rights and obligations thereunder shall expire on the date to be determined by the Committee and set forth in the applicable Award Agreement, which shall be not later than ten years from the date of grant of such Option.

(g) Incentive Stock Options. The terms of any Incentive Stock Option granted under this Plan shall comply in all respects with the provisions of Section 422 of the Code. Subject to adjustment under Section 4.02, the maximum number of Common Shares that may be issued under Incentive Stock Options under the Plan is 1,198,074.

(h) Requirement of Employment or Service. If the Participant ceases to be employed by, or provide service to, the Company prior to the Vesting of an Option, or if other conditions established by the Committee are not met, the Participant’s Option shall be immediately forfeited. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

Section 6.02. Restricted Stock.

(a) General. The Committee is authorized to grant Awards of Restricted Stock under the Plan, which shall be evidenced by an Award Agreement and shall contain terms and conditions not inconsistent with the following limitations and conditions set forth herein.

(b) Number of Common Shares; Restrictions. The Committee shall determine the number of Common Shares subject to Restricted Stock. The Committee shall establish conditions under which restrictions on Restricted Stock shall lapse over a period of time or according to such other criteria as the Committee deems appropriate, including, without limitation, restrictions based upon the achievement of specific performance goals.

(c) Requirements. If the specified restrictions are not met, the Restricted Stock shall terminate as to all Common Shares covered by the Award as to which the restrictions have not lapsed, and those Common Shares shall be immediately forfeited by the Participant to the Company. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(d) Restrictions on Transfer and Legend on Stock Certificate. A Participant may not sell, assign, transfer, pledge or otherwise dispose of the Restricted Stock. Unless otherwise determined by the Committee, the Company will retain possession of certificates for Common Shares subject to an Award of Restricted Stock until all restrictions on such shares have lapsed. Each certificate for Common Shares subject to an Award of Restricted Stock, unless held by the Company, shall contain a legend giving appropriate notice of the restrictions in the Award. The Committee may determine that the Company will not issue certificates for Awards of Restricted Stock until all restrictions on such shares have lapsed.

(e) Right to Vote and to Receive Dividends. Unless the Committee determines otherwise, the Participant shall not have the right to vote on Restricted Stock until the restrictions lapse in accordance with the terms of the Plan. Further, unless the Committee determines otherwise, the Participant shall not have the right to receive any dividends or other distributions that would be paid on such Restricted Stock if the restrictions had lapsed.

Section 6.03. Restricted Stock Units; RSUs.

(a) General. The Committee is authorized to grant RSUs under the Plan, which shall be evidenced by an Award Agreement and shall contain terms and conditions not inconsistent with the limitations and conditions set forth herein.

(b) Terms of RSUs. The Committee may grant RSUs that will vest and settle over a period of time or according to such other criteria as the Committee deems appropriate, including, without limitation, restrictions based upon the achievement of specific performance goals. RSUs may be settled at the end of a specified performance period or other period, or settlement may be deferred to a date authorized by the Committee. The Committee shall determine the number of RSUs to be granted and the requirements applicable to such RSUs.

(c) Requirement of Employment or Service. If the Participant ceases to be employed by, or provide service to, the Company prior to the vesting of RSUs, or if other conditions established by the Committee are not met, the Participant’s RSUs shall be immediately forfeited. The Committee may, however, provide for complete or partial exceptions to this requirement as it deems appropriate.

(d) Settlement of RSUs. Settlement of RSUs shall be made in cash, Common Shares or any combination of the foregoing, as the Committee shall determine in its sole discretion.

Section 6.04. Other Share-Based Awards. The Committee is authorized to grant unrestricted Common Shares or Other Share-Based Awards under the Plan to Participants, alone or in tandem with other Awards, in such amounts and subject to such terms and conditions, including vesting schedules or other criteria, including performance criteria, as the Committee will from time to time in its sole discretion determine.

Section 6.05. Settlement of Awards. Common Shares delivered pursuant to the exercise of an Option, settlement of an RSU or the issuance, exercise or vesting and settlement of Other Share-Based Awards shall be subject to any such additional conditions (other than vesting conditions), restrictions and contingencies as the Committee may establish pursuant to the Plan and Award Agreement, in addition to the conditions set forth herein.

Section 6.06. Amendment to Awards. The Committee may waive any conditions or rights under any Award theretofore granted, prospectively or retroactively.

Section 6.07. Other Provisions. The grant of any Award may also be subject to such other provisions as the Committee deems appropriate (whether or not applicable to any Award granted to any other Participant), including the treatment of Awards and Common Shares upon the occurrence of any corporate transaction or distribution involving the Company, including any merger, reorganization, recapitalization or other similar corporate event.

ARTICLE 7

CHANGE IN CONTROL

Section 7.01. Committee Actions on a Change in Control. In the event of a Change in Control, the Committee will have full discretion, subject to any applicable regulatory approvals, and subject to the terms of any Award Agreement, to take whatever actions that it deems necessary or appropriate with respect to outstanding Awards, including: (a) to provide for full or partial accelerated vesting of any Award or portion thereof, either immediately prior to such Change in Control or on such terms and conditions following the Change in Control as the Committee may determine in its sole discretion; (b) to provide for the assumption of an Award (or portions thereof) or the substitution of an Award (or portions thereof) with similar awards of the surviving or acquiring Company (subject to Section 409A, where applicable); (c) to provide for the cash-out and cancelation of any Vested Award (or portion thereof) immediately prior to such Change in Control, which cash-out may (subject to Section 409A, where applicable) be subject to any escrow, earn-out or other contingent or deferred payment arrangement that is contemplated by such Change in Control; provided that, for the avoidance of doubt, if the Vested Award has an Exercise Price that exceeds the Fair Market Value of the Common Shares underlying the Award, the Award may be canceled for no

consideration; (d) to cancel, without consideration, any Unvested Award and any other Award that is not otherwise exercised on or prior to any Change in Control; or (e) to take any other actions as the Committee deems necessary or advisable in connection with such Change in Control. The Committee may, in connection with a Change in Control, take different actions with respect to different Participants under the Plan, different Awards under the Plan and different portions of Awards granted under the Plan.

ARTICLE 8

TAX WITHHOLDING

All distributions under the Plan are subject to minimum tax withholding obligations, and the Committee may condition the delivery of Common Shares or other benefits upon satisfaction of all applicable withholding requirements. The Committee, in its sole discretion and subject to such requirements as it may prescribe, may permit such withholding obligations to be satisfied through any combination of the following: (a) cash payment by the Participant; (b) payroll withholding of the Participant’s salary, wages or other compensation; (c) surrender of Common Shares which the Participant already owns (either by actual surrender or attestation); or (d) surrender of Common Shares or other benefits to which the Participant is otherwise entitled (e.g., upon exercise of an Option) under the terms of the Plan.

ARTICLE 9

TRANSFERABILITY

Section 9.01. Transferability of Awards. Except as otherwise expressly permitted by the Committee, no Award may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant other than by will or by the laws of descent and distribution. An Option (or Other Share-Based Award subject to exercise) may be exercised during the lifetime of the Participant only by the Participant or the Participant’s legal representative.

Section 9.02. Continuation of Terms. To the extent any transfer of any Award is permitted pursuant to Section 9.01, (i) any transferee of any such Award shall, by virtue of and as a condition to such transfer, agree to be bound by the terms of the Plan and the applicable Award Agreement and (ii) the provisions of the Plan and the Award Agreement with respect to such Award will continue to apply as though the Award were still held by the applicable Participant.

ARTICLE 10

LIMITATION ON IMPLIED RIGHTS

Section 10.01. Property Rights. Neither a Participant nor any other Person shall, by reason of participation in the Plan, acquire any right in or title to any assets, funds or property of any member of the Company Group whatsoever including without limitation, any specific funds, assets or other property which any member of the Company Group, in its or their sole discretion, may set aside in anticipation of a liability under the Plan. Subject to the terms of the Plan, a Participant shall have only a contractual right to the Common Shares or amounts, if any, payable under the Plan, unsecured by any assets of any member of the Company Group, and nothing contained in the Plan shall constitute a representation or guarantee that the assets of any member of the Company Group shall be sufficient to pay any benefits to any Person.

Section 10.02. Employment Rights. Nothing in this Plan nor in any Award Agreement shall confer upon any Participant any promise or commitment by any member of the Company Group regarding employment, employment positions, work assignments, compensation or any other term or condition of employment or affiliation.

Section 10.03. No Implied Rights or Obligations. The Company, in establishing and maintaining this Plan as a voluntary and unilateral undertaking, expressly disavows the creation of any rights in Participants or others claiming entitlement under the Plan or any obligations on the part of any member of the Company Group, or the Committee, except as expressly provided herein. No Award shall be deemed to be salary or compensation for the purposes of computing benefits under any employee benefit, severance, pension or retirement plan of the Company or any of its Subsidiaries, unless the Committee shall determine otherwise, applicable local law provides otherwise or the terms of such plan specifically include such compensation.

Section 10.04. No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between any member of the Company Group and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from any member of the Company Group pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company.

Section 10.05. Rights as a Shareholder. Except as otherwise provided by the Committee in an Award Agreement, no Participant or holder of any Award shall have any rights as a Shareholder with respect to any Common Shares underlying such Award until the Award has been exercised or settled, and the Participant or holder has been issued Common Shares in accordance with the terms of the Plan.

Section 10.06. Additional Conditions of Awards. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award will be subject to reduction, cancelation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include a termination of the Participant’s employment or service with the Company or any of its Subsidiaries, a violation of material policies, breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant or other conduct by the Participant that is detrimental to the business or reputation of any member of the Company Group.

Section 10.07. Variations by Jurisdiction. Awards may be granted to Participants in different legal jurisdictions on such terms and conditions as may, in the judgment of the Committee, be necessary or desirable to recognize differences in local law, tax policy or custom. The Committee also may impose conditions on the exercise or vesting of Awards in order to minimize the Company’s obligation with respect to tax equalization for Participants on assignments outside their home country.

Section 10.08. Data Protection. By participating in the Plan, the Participant consents to the holding and processing of personal information provided by the Participant to any member of the Company Group, trustee or third-party service provider, for all purposes relating to the operation of the Plan. These include:

(a) administering and maintaining Participant records;

(b) providing information to any member of the Company Group, trustees of any employee benefit trust, registrars, brokers or third-party administrators of the Plan;

(c) providing information to future purchasers or other transaction counterparties of any member of the Company Group, or the business in which the Participant works; and

(d) transferring information about the Participant to any country or territory that may not provide the same protection for the information as the Participant’s home country.

ARTICLE 11

GOVERNMENT AND STOCK EXCHANGE REGULATIONS

The Committee may refuse to issue or transfer any Common Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Common Shares or such other consideration might violate any applicable law or regulation or entitle the Company to recover the same under Section 16(b) of the Exchange Act, and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be construed as an offer to sell securities of the Company, and no such offer shall be outstanding, unless and until the Committee in its sole discretion has determined that any such offer, if made, would be in compliance with all applicable requirements of the U.S. federal and state securities laws and any other laws to which such offer, if made, would be subject.

Upon the issuance of Common Shares in connection with the settlement award, vesting, exercise or settlement of an Award at a time when there is not in effect a registration statement under the Securities Act relating to such Common Shares and available for delivery a prospectus meeting the requirements of Section 10(a)(3) of the Securities Act, or if the rules or interpretations of the Securities and Exchange Commission so require, such Common Shares may be issued only if the Company and the holder of such Common Shares are in compliance with all securities law requirements for an exemption from registration and the holder represents and warrants in writing to the Company that the Common Shares purchased are being acquired for investment and not with a view to distribution thereof.

The Company is under no duty to ensure that Common Shares may legally be delivered under the Plan, and shall have no liability to Award recipients in the event such delivery of Common Shares may not be made.

ARTICLE 12

AMENDMENTS, SUSPENSIONS OR TERMINATION OF PLAN

Section 12.01. Amendment and Termination of the Plan. The Board may at any time amend, suspend or terminate the Plan from time to time; provided, however, that no such amendment, alteration, suspension, discontinuation or termination shall be made without approval by the shareholders of the Company if such approval is necessary to comply with any tax or regulatory requirement for which or with which the Board deems it necessary or desirable to qualify or comply.

Section 12.02. Amendment of Award Agreements. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted or the associated Award Agreement, prospectively or retroactively; provided that any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would materially adversely impair the rights of any Participant or any holder of any Award theretofore granted will not to that extent be effective without the consent of the affected Participant or holder.

Section 12.03. Corrections. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent that it shall deem desirable to carry the Plan into effect.

ARTICLE 13

TERMINATION

The Plan shall continue in effect until May 29, 2030, unless earlier terminated by the Board pursuant to Article 12.

ARTICLE 14

GOVERNING LAW; WAIVER OF JURY TRIAL

The validity, construction and effect of the Plan, the Award Agreements and any rules, regulations or procedures relating thereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the conflicts of laws rules of such state. Participants acknowledge and agree that any controversy which may arise under or relate to the Plan or an Award Agreement is likely to involve complicated and difficult issues, and the Company and each Participant will agree to irrevocably waive any and all right to trial by jury in any legal proceeding arising out of or relating to the Plan or an Award Agreement, or the transactions and matters contemplated hereby or thereby.

ARTICLE 15

SECTION 409A OF THE CODE

The Plan is intended to comply with the requirements of Section 409A of the Code and the regulations and guidance thereunder (respectively, “Section 409A”), the provisions of the Plan shall be interpreted in a manner that satisfies such requirements, and the Plan shall be operated accordingly. If any provision of the Plan would otherwise frustrate or conflict with this intent, the provision will be interpreted and deemed amended

so as to avoid this conflict. If an operational failure occurs with respect to the requirements of Section 409A, any affected Participant shall fully cooperate with the Company to correct the failure, to the extent possible, in accordance with any correction procedure established by the Internal Revenue Service. No provision of the Plan shall be interpreted to transfer any liability for a failure to comply with Section 409A from a Participant or any other Person to the Company.

Notwithstanding any provision of the Plan or any Award Agreement, if at the time of termination of a Participant’s employment or service with the Company or any of its Subsidiaries he or she is a “specified employee” (as defined in Section 409A) and any payments upon such termination under the Plan or such Award Agreement are treated as deferred compensation subject to Section 409A, he or she will not be entitled to such payments until the earlier of (a) the date that is six months after such termination or (b) any earlier date that does not result in any additional tax or interest to such Participant under Section 409A.

For purposes of Section 409A, any payment or settlement of an Award made under the Plan shall be designated as a “separate payment” within the meaning of Section 409A.

EXHIBIT A

FORM OF RESTRICTED STOCK AWARD AGREEMENT – EMERGENCE GRANTS

RESTRICTED STOCK AWARD AGREEMENT

Under the Pioneer Energy Services Corp. 2020 Equity Incentive Plan

THIS AWARD AGREEMENT (the “Award Agreement”) is made and entered into as of [_], 2020 between Pioneer Energy Services Corp., a Delaware corporation (the “Company”), and [•] (the “Participant”).

The Company hereby grants to the Participant an Award of Restricted Stock (the “Award”) which represents Common Shares that are subject to vesting conditions according to the terms and conditions as set forth in this Award Agreement and in the Pioneer Energy Services Corp. 2020 Equity Incentive Plan (the “Plan”). Capitalized terms not otherwise defined herein have the meanings set forth in the Plan.

In accordance with this grant, and as a condition thereto, the Company and the Participant agree as follows:

SECTION 1. Number of Common Shares; Date of Grant; Vesting Schedule. The number of shares of Restricted Stock subject to the Award, the grant date, the vesting commencement date and the vesting schedule are set forth in Exhibit A to this Award Agreement.

SECTION 2. Transferability. Any unvested shares of Restricted Stock subject to the Award, may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered, whether voluntarily, involuntarily or by option of law.

SECTION 3. Termination of Employment or Service. In the event of a termination of the Participant’s employment or service with the Company or any of its Subsidiaries, this Award will be treated as follows:

(a) Death or Disability. If the Participant’s employment or service with the Company or any of its Subsidiaries is terminated due to the Participant’s death or Disability, (i) the number of shares of Time-Vesting Restricted Stock that would have become vested within a period of one year following the date of such termination shall vest as of the date of such termination and any unvested Time-Vesting Restricted Stock shall immediately be forfeited and canceled without any payment or consideration being due from the Company and (ii) a prorata portion of the Performance-Vesting Restricted Stock shall become vested as of the last day of the Performance Period, determined by multiplying the actual number of shares of Performance-Vesting Restricted Stock that would have vested based on actual performance of the Performance Condition, by a fraction (i) the numerator of which is the number of days of service completed in the Performance Period as of the date of termination plus 365 and (ii) the denominator of which is 1,095 and any shares of the Performance-Vesting Restricted Stock that remain unvested at the end of the Performance Period shall immediately be forfeited and canceled without any payment or consideration being due from the Company.

(b) Termination Without Cause or for Good Reason. If the Participant’s employment or service with the Company or any of its Subsidiaries is terminated (i) by the Company or any of its Subsidiaries without Cause or (ii) due to the Participant resigning for Good Reason, (x) all outstanding Time-Vesting Restricted Stock shall vest as of the date of termination and (y) all outstanding Performance-Vesting Restricted Stock shall vest as of the date of termination based on performance of the Performance Condition at target level.

For the purposes of this Award Agreement, “Good Reason” means, a voluntary termination by the Participant due to the occurrence (without the Participant’s consent) of any of the following: (i) material diminution of the Participant’s title, authority or responsibilities as in effect on the Effective Date that is not remedied by the Company within 5 business days after the Participant’s written notice to the Company of such diminution; (ii) a reduction in the Participant’s base salary as in effect on the Effective Date, other than as a result of a reduction (reasonably determined in good faith by the Board to be necessary and in the best interests of the Company in response to (or to reasonably forestall) a deterioration the Company’s financial condition) of not more than 5% that applies generally to similarly situated employees of the Company; or (iii) relocation of the Participant’s principal place of business by more than 45 miles.

(c) Termination for Cause. If the Participant’s employment or service with the Company or any of its Subsidiaries is terminated by the Company or any of its Subsidiaries for Cause, any unvested shares of Time-Vesting Restricted Stock and Performance-Vesting Restricted Stock shall be immediately forfeited and canceled in their entirety without any payment or consideration being due from the Company.

(d) Voluntary Termination Without Good Reason. If the Participant resigns from the Participant’s employment or service with the Company or any of its Subsidiaries without Good Reason, any unvested shares of Time-Vesting Restricted Stock and Performance-Vesting Restricted Stock shall be immediately forfeited and canceled in their entirety without any payment or consideration being due from the Company.

SECTION 4. Change in Control. The treatment upon a Change in Control of any unvested shares of Restricted Stock subject to the Award shall be determined by the Committee pursuant to Section 7.01 of the Plan; provided that Section 7.01(d) of the Plan shall not apply to the Award.

SECTION 5. Voting Rights. For the avoidance of doubt, subject to the Company’s Charter, any unvested shares of Restricted Stock subject to the Award shall be entitled to voting rights to the extent that the Company’s 5.00% Convertible Senior Unsecured PIK Notes due 2025 have voting rights on an as-converted basis.

SECTION 6. Representations. The Participant represents and warrants that:

(a) If the Participant qualifies as an “Accredited Investor” (as defined in Rule 501 of Regulation D promulgated under the Securities Act) he or she has completed Annex I hereto, in accordance with the instructions therein.

(b) The Common Shares issued in connection with the Award are for the Participant’s own account for investment and not with any view to the distribution thereof, and the Participant will not sell, assign, transfer or otherwise dispose of the Award or any of the Common Shares issued in connection with the Award, or any interest therein, in violation of the Securities Act or any applicable state securities law.

(c) The Participant understands that (i) the Common Shares issued in connection with the Award will not be registered under the Securities Act or any applicable state securities law and may not be sold or otherwise disposed of unless it is registered or sold or otherwise disposed of in a transaction that is exempt from such registration and (ii) the certificates representing such Common Shares will bear appropriate legends restricting the transferability thereof.

(d) The Participant understands that the Company Group will rely upon the completeness and accuracy of these representations in establishing that the contemplated transactions are exempt from the Securities Act and hereby affirms that all such representations are accurate and complete. The Participant will notify the Company immediately of any changes in any of such information at any time.

SECTION 7. Restrictive Covenants. As a condition precedent to receiving the Award granted pursuant to this Award Agreement, the Participant shall execute and agree to be subject to the Restrictive Covenant Agreement in substantially the form set forth in Exhibit B to the Pioneer Energy Services Corp. Key Executive Severance Plan. Notwithstanding anything herein to the contrary, if the Participant does not execute and agree to be subject to the Restrictive Covenant Agreement contemporaneously with this Award Agreement, the Award shall be void ab initio and canceled in its entirety without any payment or consideration being due from the Company.

SECTION 8. Spousal Consent. The Participant agrees to cause any current or future spouse of his or hers to deliver to the Company a consent in the form of the consent set forth in Exhibit B hereto validly executed by such spouse on the date hereof or promptly after any such person becomes his or her spouse, as applicable.

SECTION 9. Governing Law; Waiver of Jury Trial. This Award Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without regard to the conflicts of laws rules of such state. Each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or related to this Award Agreement or the transactions contemplated hereby.

SECTION 10. Amendment. The Committee may waive any conditions or rights under, amend any terms of, or alter, suspend, discontinue, cancel or terminate, this Award or Award Agreement, prospectively or retroactively; provided, however, and notwithstanding Section 12.02 of the Plan, any such waiver, amendment, alteration, suspension, discontinuance, cancelation or termination that would adversely affect the rights of the Participant will not to that extent be effective without the consent of the Participant.

SECTION 11. Interpretation. The Participant accepts this Award subject to all the terms and provisions of the Plan; provided that in the event of any conflict between any provision of the Plan and this Award Agreement, this Award Agreement shall control. The Participant accepts as binding, conclusive and final all decisions or interpretations of the Board or the Committee upon any questions arising under the Plan and/or this Award Agreement. Notwithstanding the immediately preceding sentence or the provisions of Section 3.03 of the Plan, any good faith dispute by the Participant of any action taken by the Committee in respect of this Award Agreement (or any applicable provisions of the Plan relating hereto) shall be subject to de novo review by the applicable court. The Participant acknowledges receiving a copy of the Plan.

SECTION 12. Notices. Any notice under this Award Agreement shall be (i) if in writing, effective when delivered in person or deposited in the United States mail, postage prepaid, registered or certified, and addressed to the Participant at his or her last known address on the books of the Company or, in the case of the Company, at the address set forth below, subject to the right of either party to designate some other address at any time hereafter in a notice satisfying the requirements of this Section 12, or (ii) if delivered by electronic email transmission, effective when a receipt of such e-mail is requested and received.

Pioneer Energy Services Corp.

1250 N.E. Loop 410, Suite 1000

San Antonio, Texas 78209

Attention: Bryce Seki, VP - General Counsel

E-mail: bseki@pioneeres.com

SECTION 13. Sections and Headings. All section references in this Award Agreement are to sections hereof for convenience of reference only and are not to affect the meaning of any provision of this Award Agreement.

SECTION 14. Counterparts. This Award Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Award Agreement shall become effective when each party hereto shall have received counterparts hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Award Agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

[signature page follows]

IN WITNESS WHEREOF, the undersigned have caused this Award Agreement to be duly executed as of the date first above written.


PIONEER ENERGY SERVICES CORP.



By:
		Name:
		Title:


PARTICIPANT



By:
		Name:

ANNEX I

1.	The Participant is an Accredited Investor as a result of meeting one or more of the criteria set forth in items 2(a) through (d) below (check the relevant response):

Yes ____________ No ____________

2.	If the answer to Question 1 above is yes, the Participant is an Accredited Investor because he or she certifies that (check all appropriate descriptions that apply):

____________ The Participant has individual net worth, or joint net worth with his or her spouse, exceeding $1,000,000. For purposes of this Question 2, “net worth” means the excess of total assets at fair market value (including personal and real property, but excluding the estimated fair market value of a person’s primary home) over total liabilities.

____________ The Participant had individual income exceeding $200,000 in each of the last two calendar years and the Participant has a reasonable expectation of reaching the same income level in the current calendar year. For purposes of this Question 2(b), “income” means annual adjusted gross income, as reported for federal income tax purposes, plus (i) the amount of any tax-exempt interest income received; (ii) the amount of losses claimed as a limited partner in a limited partnership; (iii) any deduction claimed for depletion; (iv) amounts contributed to an IRA or Keogh retirement plan; (v) alimony paid; and (vi) any amount by which income from long-term capital gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 1202 of the Code.

____________ The Participant had joint income with his or her spouse exceeding $300,000 in each of the last two calendar years and the Participant has a reasonable expectation of reaching the same income level in the current calendar year, as defined in (b) above.

____________ The Participant is a director, executive officer or general partner of the Company, or a director, executive officer of the Company. (For purposes of this Question 2(d), executive officer means the president; any vice president in charge of a principal business unit, division or function, such as sales, administration or finance; or any other person or persons who perform(s) similar policymaking functions for the Company.)

3.	The Participant is qualified to purchase the Common Shares underlying the Award because he or she has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of such investment.

Yes ____________ No ____________

4.	The Participant has sufficient knowledge and experience in similar investments to evaluate the merits and risks of an investment in the Company Group.

Yes ____________ No ____________

EXHIBIT A

GRANT NOTICE OF AWARD



1.	Number of Common Shares underlying the Award	[•] [•]² will be “Time-Vesting Restricted Stock” and [•]³ will be “Performance-Vesting Restricted Stock”

2.	Type of Award	Restricted Stock

3.	“Grant Date”	[_], 2020

4.	“Vesting Commencement Date”	May 29, 2020

5.	Vesting Schedule	Subject to Section 3 of the Award Agreement, the Restricted Stock issued under the Award will vest as follows: Time-Vesting Restricted Stock will vest 1/3 on each of the first three anniversaries of the Vesting Commencement Date, subject to the Participant’s continuous employment with the Company and its Affiliates. Performance-Vesting Restricted Stock will vest subject to the Performance Condition below.⁴

6.	“Performance Condition”	[•]

²	Note to Draft: Unless otherwise determined by the New Board after good faith consultation with the Company’s Chief Executive Officer, to be an amount equal to 60% of the total number of Common Shares underlying the Award.

³	Note to Draft: Unless otherwise determined by the New Board after good faith consultation with the Company’s Chief Executive Officer, to be an amount equal to 40% of the total number of Common Shares underlying the Award.

⁴	Note to Draft: The performance targets to be reasonably determined by the New Board in its sole discretion after good faith consultation with the Company’s Chief Executive Officer.

EXHIBIT B

CONSENT OF SPOUSE

The undersigned spouse of Participant who is the signatory to the foregoing Award Agreement has read and hereby approves the terms and conditions of the Plan and this Award Agreement. In consideration of the Company’s granting his or her spouse the Award as set forth in the Plan and this Award Agreement, the undersigned hereby agrees to be irrevocably bound by the terms and conditions of the Plan and this Award Agreement and further agrees that any community property interest shall be similarly bound. The undersigned hereby appoints the undersigned’s spouse as attorney-in-fact for the undersigned with respect to any amendment or exercise of rights under the Plan or this Award Agreement.

Name:

Spouse of [•]

Exhibit 10.5

FINAL VERSION

Post-Filing Severance Plan

PIONEER ENERGY SERVICES CORP.

KEY EXECUTIVE SEVERANCE PLAN

I.	Purposes of Plan and Definitions

1.1. Purposes. This Pioneer Energy Services Corp. Key Executive Severance Plan (the “Plan”), effective as of May 29, 2020 (the “Effective Date”), was adopted by the Board to provide the selected key employees set forth on Exhibit A hereto (the “Participants”) of Pioneer Energy Services Corp., a Delaware corporation, and any successor thereto (the “Company”) protection for loss of salary and benefits in the event of certain involuntary terminations of employment from the Company and thereby to assist the Company in retaining an intact management team to continue performing services for the Company and its subsidiaries by providing greater incentives to the Participants to attain and maintain high levels of performance.

1.2. Definitions.

“Accrued Benefits” means any base salary, vacation pay and other earned benefits if applicable under applicable law or the terms of an applicable Company benefit plan, in each case accrued and unpaid through the date of a Participant’s termination of employment.

“Board” means the board of directors of the Company.

“Cause” shall mean the Participant’s (a) commission of any act or omission constituting fraud under any law of the State of Texas or other law applicable to the Participant, (b) conviction of, or a plea of nolo contendere to, a felony, (c) embezzlement or theft of property or funds of the Company or any of its Affiliates or (d) refusal to perform his or her duties with the Company; (e) failure to follow the instructions of the Board or the Participant’s supervisor or a senior executive officer that, in each case, are lawful, reasonable and commensurate with the Participant’s title and duties, (f) conduct in connection with the Participant’s duties, performance or responsibilities that is fraudulent, unlawful or grossly negligent; or (g) willful misconduct with respect to the Participant’s duties; provided, that the conduct described in clauses (d), (e) and (g) shall not constitute Cause unless the Company has provided the Participant with written notice of such conduct and, to the extent curable, the Participant fails to cure such conduct within 10 days of receiving such notice.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended from time to time.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board or such other committee of the Board as is designated by the Board to administer the Plan.

“Good Reason” means, a voluntary termination by the Participant due to the occurrence (without the Participant’s consent) of any of the following: (i) material diminution of the Participant’s title, authority or responsibilities as in effect on the Effective Date that is not remedied by the Company within five business days after the Participant’s written notice to the Company of such diminution; (ii) a reduction in the Participant’s base salary as in effect on the Effective Date, other than as a result of a reduction (reasonably determined in good faith by the Board to be necessary and in the best interests of the Company in response to (or to reasonably forestall) a deterioration the Company’s financial condition) of not more than 5% that applies generally to similarly situated employees of the Company; or (iii) relocation of the Participant’s principal place of business by more than 45 miles.

“Involuntary Termination” means the termination of a Participant’s employment with the Company (i) by the Company or any Affiliate for any reason other than for Cause or (ii) due to a voluntary resignation by the Participant for Good Reason.

“Participant” has the meaning set forth in Section 1.1.

“Participation Certificate” means a certificate substantially similar to the form attached hereto as Exhibit B.

“Plan” has the meaning set forth in Section 1.1.

“Waiver and Release” means a legal document, in a form substantially similar to the form attached hereto as Exhibit D, in which a Participant, in exchange for severance benefits under the Plan, releases, among other parties, the Company and all of its Affiliates and their directors, officers, employees and agents, their employee benefit plans, and the fiduciaries and agents of said plans from liability and damages in any way related to the Participant’s employment with or separation from employment with the Company or any of its Affiliates.

“Waiver Effective Date” means the eighth day following the date on which the Participant executes and has not revoked the Waiver and Release.

II.

Administration of the Plan

2.1. Interpretations. The Committee shall have full power and authority to interpret, construe and administer the Plan.

2.2. Committee Determinations Conclusive. Any interpretation adopted by the Committee with respect to any provision of the Plan and the effect thereof, shall be final, binding and conclusive upon the Company, all Affiliates and all persons who may claim any rights or benefits hereunder.

III.

Eligibility

3.1. Condition of Participation. To be eligible to receive the benefits upon an Involuntary Termination under this Plan, a Participant is required to execute and deliver to the Company (a) a Participation Certificate provided to the Participant by the Company in substantially the form attached hereto as Exhibit B and (b) a Restrictive Covenant Agreement provided to the Participant by the Company in substantially the form attached hereto as Exhibit C.

3.2. Termination of Participation. A Participant’s eligibility to receive the benefits upon an Involuntary Termination under this Plan shall terminate at such time as may be determined by the Committee, provided such Participant shall be given notice of such termination of status as a Participant by the Committee at least one year prior to the effectiveness of such termination. The preceding sentence of this Section 3.2 shall not apply to the initial Participants listed on Exhibit A as of the Effective Date, whose participation in the Plan shall not be terminated without the written consent of any such affected Participant.

IV.

Involuntary Termination

4.1. Cash Severance Payment. In the event of an Involuntary Termination of a Participant, the Participant will be eligible to receive the Accrued Benefits, and subject to the Participant’s execution without revocation of the Waiver and Release in accordance with Section 6.1, a lump-sum cash payment, payable not later than five days following the Waiver Effective Date, in an amount equal to the “Cash Severance Amount” set forth in the Participant’s Participation Certificate. In the event a Participant is a “specified employee” for purposes of Section 409A of the Code (as determined as of the Participant’s termination of employment pursuant to policies adopted by the Board), and to the extent required under Section 409A of the Code, the lump sum payment specified in this Section 4.1 shall be delayed until the date six months and two days following the date of the Participant’s termination of employment.

4.2. Life Insurance and Medical Benefits Continuation.

(a) Subject to the Participant’s execution without revocation of the Waiver and Release in accordance with Section 6.1, the Participant shall be entitled to receive for the Participant and, where applicable, the Participant’s dependents, following the Participant’s Involuntary Termination, (i) continued life insurance coverage under the Company’s plan for a period of 12 months following the date of termination and (ii) if the Participant timely elects to continue health benefits coverage under COBRA, the Company will pay the Participant’s COBRA premiums for the “Coverage Period” set forth in the Participant’s Participation Certificate or through the end of the month in which the Participant ceases to be eligible for COBRA, if earlier. In the event of a Participant’s death during the Coverage Period, the Participant’s beneficiaries shall be eligible to receive such continued medical coverage in accordance with the foregoing.

(b) In the event a Participant is a “specified employee” for purposes of Section 409A of the Code (as determined as of the Participant’s termination of employment pursuant to policies adopted by the Board), and to the extent required under Section 409A of the Code, payment of the Company’s portion of any life insurance premiums shall be delayed until the date six months and two days following the date of the Participant’s termination of employment. During the six months following termination of employment, the Participant shall be responsible for payment of the entire amount of life insurance premiums.

(c) Notwithstanding the foregoing, the continuation of life insurance coverage and medical benefits for any Participant shall immediately end upon the Participant’s eligibility for life insurance or similar medical coverage, as applicable, by reason of employment with any entity other than the Company or any Affiliate.

V.	Rights of Participants

5.1. Limitation of Rights. Nothing in the Plan shall be construed to:

(a) give any Employee any right to participate in the Plan for any specified period of time subject to Section 3.2;

(b) limit in any way the right of the Company or any Affiliate to terminate a Participant’s employment with the Company or any Affiliate at any time;

(c) give a Participant or any spouse of a deceased Participant any interest in any fund or any specific asset or assets of the Company or any Affiliate; or

(d) be evidence of any agreement or understanding, express or implied, that the Company or any Affiliate will employ a Participant in any particular position or at any particular rate of remuneration.

5.2. Non-alienation of Benefits. No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same will be void. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits.

5.3. Prerequisites to Benefits. No Participant, or any person claiming through a Participant, shall have any right or interest in the Plan, or in any benefits hereunder, unless and until all of the terms, conditions and provisions of the Plan which affect such Participant or such other person shall have been complied with as specified herein.

VI.

Miscellaneous

6.1. Release and Full Settlement. Anything to the contrary herein notwithstanding, as a condition to the receipt of any severance payments or benefits under the Plan, a Participant whose employment has been subject to an Involuntary Termination shall first execute a Waiver and Release, in substantially the form attached hereto as Exhibit D, no later than 60 days following the Participant’s termination of employment (the “Waiver Consideration Period”).

6.2. Amendment or Termination of the Plan. Upon authorization by the Board, the Company may amend or terminate the Plan at any time; provided, however, that no amendment or termination that would adversely affect the rights of any Participant under the Plan shall be made without the consent of such Participant, except as expressly provided in Section 3.2 for Participants other than the initial Participants in the Plan.

6.3. Cash Severance Payment in Lieu of Other Compensation. Notwithstanding anything in the Plan to the contrary, the Cash Severance Amount payable pursuant to Section 4.1 of the Plan, shall supersede, and be awarded in lieu of, any cash compensation payable to the Participant by the Company or any Affiliate on account of the termination of the Participant’s employment, pursuant to (a) a written employment or other agreement with the Company or any Affiliate, (b) another severance plan or program of the Company or any Affiliate, or (c) any other obligation, whether by contract, applicable law or otherwise, of the Company, or any other Person to provide a payment to such Participant in the event of an Involuntary Termination of such Participant’s employment with the Company or any Affiliate. For the avoidance of doubt, following the Effective Date, no Participant shall be entitled to receive any severance benefits under the Amended and Restated Pioneer Drilling Services, Ltd. Key Executive Severance Plan.

6.4. Reduction of Cash Severance Payment. Notwithstanding anything in the Plan to the contrary, the Cash Severance Amount otherwise payable to a Participant shall be reduced by any monies owed by the Participant to the Company or any Affiliate, including, but not limited to, any overpayments made to the Participant by the Company or any Affiliate, and the balance of any loan by the Company or any Affiliate to the Participant that is outstanding at the time that the Cash Severance Amount is paid.

6.5. Taxes. All payments provided for hereunder shall be made net of any applicable withholding requirements of federal, state, or local law.

6.6. Applicable Laws. The Plan shall be construed, administered and governed in all respects under the laws of the State of Delaware.

6.7. Unfunded Plan. The benefits provided herein shall be unfunded and shall be provided from the Company’s general assets. No contributions are required under the Plan. For all purposes, the Participants shall be treated as general unsecured creditors of the Company.

6.8. Successors; Binding Agreement.

(a) In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets (or a combination thereof) of the Company to expressly assume and agree to perform this Plan in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Plan and shall entitle the Participant to terminate employment and receive the payments described in Article IV that would be payable upon an Involuntary Termination.

(b) This Plan shall inure to the benefit of and be enforceable by the Participant’s legal representatives and other successors in interest, provided that rights under this Plan may not be assigned by the Participant. If the Participant dies while any amount (other than an amount that by its terms is to terminate upon the Participant’s death) would still be payable to the Participant hereunder if the Participant was still living, all such amounts shall be paid in accordance with this Plan to the executors, personal representatives, or administrators of the Participant’s estate.

6.9. Entire Agreement. This Plan sets forth the entire agreement of the parties regarding its subject matter. For the avoidance of doubt, effective upon the occurrence of the Effective Date, this Plan shall supersede the Company’s Amended and Restated Pioneer Drilling Services, Ltd. Key Executive Severance Plan, which shall terminate and be of no further force or effect.

6.10. Invalidity or Unenforceability. The invalidity or unenforceability of any provision of this Plan will not be deemed to invalidate or make unenforceable any other provision of the Plan or the entirety of the Plan.

VII.

Section 409A Compliance

7.1. General. This Plan is intended to comply with Section 409A of the Code and for such purpose each payment under the Plan shall be considered a separate payment. Any ambiguous provisions will be construed in a manner that is compliant with or exempt from the application of Section 409A. If a provision of the Plan would result in the imposition of an applicable tax under Section 409A of the Code, such provision may be reformed to avoid imposition of the applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect any Participant’s rights or benefits hereunder.

7.2. Reimbursements or Provision of In-Kind Benefits. All reimbursements or provision of in-kind benefits pursuant to this Plan shall be made in accordance with Treasury Regulations §1.409A-3(i)(1)(iv) such that the reimbursement or provision will be deemed payable at a specified time or on a fixed schedule relative to a permissible payment event. The amount of expenses eligible for reimbursement or provided under Section 4 hereof during the Participant’s taxable year may not affect the amounts reimbursed or provided in any other taxable year (except that total reimbursements may be limited by a lifetime maximum under a group health plan), the reimbursement of an eligible expense shall be made on or before the last day of the Participant’s taxable year following the taxable year in which the expense was incurred, and the right to reimbursement or provision of in-kind benefit is not subject to liquidation or exchange for another benefit.

7.3. Timing of Payments. Notwithstanding anything herein to the contrary, if as of the Participant’s Involuntary Termination the Waiver Consideration Period together with the revocation period described in the Waiver and Release could span two (2) calendar years, then any payments that constitute “nonqualified deferred compensation” for purposes of Section 409A of the Code shall not begin or be paid until the second calendar year.

FINAL VERSION

Post-Filing Severance Plan

EXHIBIT A

Participants

Name

Position

Severance Amount
($)

Coverage Period

Restriction Period

TOTAL:

EXHIBIT B

PIONEER ENERGY SERVICES CORP.

KEY EXECUTIVE SEVERANCE PLAN

PARTICIPATION CERTIFICATE

This Participation Certificate, dated as of May 29, 2020 (the “Effective Date”), is by and between Pioneer Energy Services Corp., a Delaware corporation (the “Corporation”), and __________________ (the “Participant”). Capitalized terms used but not defined herein have the respective meanings assigned to such terms in the Pioneer Energy Services Corp. Key Executive Severance Plan (the “Plan”) unless otherwise stated.

1. The Participant is eligible to participate in the Plan, effective as of the Effective Date.

2. The Participant hereby acknowledges that the Participant’s designation as a Participant in the Plan replaces and supersedes the Participant’s eligibility to participate in the Amended and Restated Pioneer Drilling Services, Ltd. Key Executive Severance Plan and the Participant hereby waives any rights under such plan.

3. The Participant acknowledges and agrees that as a condition precedent to the Participant’s right to participate in the Plan and to receive any award under the Pioneer Energy Services Corp. 2020 Employee Incentive Plan, the Participant must execute and agree to be subject to a Restrictive Covenant Agreement provided to the Participant in substantially the form attached as Exhibit C of the Plan. The “Restricted Period” under the Restrictive Covenant Agreement (as set forth below) shall supersede the duration of any restrictive covenants that otherwise would apply to the Participant under the Retention Award Letter Agreement, dated September [•], 2019, between the Participant and the Company, which such Retention Award Letter Agreement shall otherwise remain in full force and effect.

4. The following table sets forth certain terms for purposes of the Plan and the Restrictive Covenant Agreement:¹


Cash Severance Amount ($)	Coverage Period	Restricted Period
[•]	[•] months	[•] months

¹	Information to be inserted for applicable initial Participant from Exhibit A to the Plan.

5. [The Participant’s status as a “Participant” under the Plan shall terminate at such time as may be determined by the Committee, provided such Participant shall be given notice of such termination by the Company at least one year prior to the effectiveness of such termination.]²


PIONEER ENERGY SERVICES CORP.



By:


Acknowledged and Agreed

By:
		Name:

²	This provision shall not be included for the initial Participants.

FINAL VERSION

Post-Filing Severance Plan

EXHIBIT C

RESTRICTIVE COVENANT AGREEMENT

As a material condition to participation in the Pioneer Energy Services Corp. Key Executive Severance Plan (the “Severance Plan”) and the Pioneer Energy Services Corp. 2020 Equity Incentive Plan, [•] (the “Participant”) agrees to be bound by this Restrictive Covenant Agreement (this “Agreement”), made by and between the Participant and Pioneer Energy Services Corp., a Delaware corporation (together with its Affiliates, the “Company”), effective as of May 29, 2020. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Plan.

SECTION 1. Non-Competition. In consideration of the covenants and agreements set forth in this Agreement, the Participant covenants and agrees with the Company that, while employed by the Company or providing services to the Company and during the “Restricted Period” (as set forth in the Participant’s Participation Certificate under the Severance Plan) following the date of the termination of the Participant’s employment with the Company for any reason, the Participant shall not, on behalf of a Competitor, directly or indirectly (whether as an employee, employer, consultant, agent, principal, partner, equityholder, officer or director, or in any other representative capacity) engage in the Business in any state of the United States and any foreign country where the Company or any of its direct or indirect subsidiaries engages in the Business. For purposes of this Agreement, the “Business” means the business of land contract drilling services or production services, and any other business that the Participant knows or should know that the Company or any of its direct or indirect subsidiaries has taken material steps to engage in. The term “Competitor” shall mean any corporation, partnership or other business organization or entity that engages in, or that owns a significant interest in an entity that engages in directly or indirectly, the Business.

SECTION 2. Non-Solicitation of Customers. While employed by the Company or providing services to the Company, and during the Restricted Period following the date of the termination of the Participant’s employment with the Company for any reason, the Participant shall not, directly or indirectly, alone or in concert with others, solicit (either directly or indirectly by assisting others) the business of any customer of the Company with whom the Participant had contact (a) while employed, during the two (2) years prior to such solicitation and (b) during the Restricted Period, during the final two (2) years of the Participant’s employment with the Company, or, in each case, otherwise induce any such customer to change its relationship with the Company.

SECTION 3. Non-Solicitation of Company Employees. While employed by the Company or providing services to the Company, and during the Restricted Period following the date of the termination of the Participant’s employment with the Company for any reason, the Participant shall not, directly or indirectly, alone or in concert with others, solicit, recruit, hire, or attempt to solicit, recruit or hire any of the Company’s current or former employees with whom the Participant had contact (which includes, but is not limited to, employees within the Participant’s chain of command or under the Participant’s supervisory authority) (a) while employed, during the two (2) years prior to such solicitation and (b) during the Restricted Period, during the final two (2) years of the Participant’s employment with the Company or, in each case, otherwise induce any such current employee to terminate his or her employment with the Company.

SECTION 4. Non-Disclosure. The Participant agrees to preserve and protect the confidentiality of all Confidential Information (as defined below), which the Participant acknowledges is the sole and exclusive property of the Company. The Participant agrees that the Participant will not, at any time during the term of the Participant’s employment or thereafter, make any unauthorized disclosure of Confidential Information, or make any use thereof, except, in each case, in the carrying out of the Participant’s responsibilities to the Company. The Participant further agrees to preserve and protect the confidentiality of all confidential information of third parties provided to the Company by such third parties with an expectation of confidentiality. The Participant shall use commercially reasonable efforts to cause all persons or entities to whom any Confidential Information shall be disclosed by the Participant hereunder to preserve and protect the confidentiality of such Confidential Information. The Participant shall have no obligation hereunder to keep confidential any Confidential Information if and to the extent disclosure thereof is specifically required by applicable laws; provided, however, that in the event disclosure is required by applicable laws and the Participant is making such disclosure, the Participant shall provide the Company with prompt notice of such requirement prior to making any such disclosure to the extent practicable and not legally prohibited, so that the Company may seek an appropriate protective order at the Company’s sole cost and expense. The term “Confidential Information” shall mean any and all confidential or proprietary information and materials, as well as all trade secrets, belonging to the Company and includes, regardless of whether such information or materials are expressly identified or marked as confidential or proprietary, and whether or not patentable: (i) technical information and materials of the Company; (ii) business information and materials of the Company; (iii) any information or material that gives the Company an advantage with respect to its competitors by virtue of not being known by those competitors; and (iv) other valuable, confidential information and materials and/or trade secrets of the Company.

SECTION 5. Non-Disparagement. From the date hereof and at all times following the termination of the Participant’s employment with the Company for any reason, the Participant shall not, and shall not induce others to, directly or indirectly, for the Participant or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity, or otherwise, disparage, criticize, or defame the Company, its affiliates and their respective affiliates, directors, officers, agents, shareholders or employees, either publicly or privately, or make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the Company or its affiliates; provided that nothing herein shall or shall be deemed to prevent or impair the Participant from testifying truthfully in any legal or administrative proceeding if such testimony is compelled or requested (or otherwise complying with legal requirements). The Company agrees that it will direct its directors and executive officers not to and not to cause or assist any other person or entity to disparage, criticize, or defame the Participant either publicly or privately, or make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the Participant.

SECTION 6. Permitted Disclosures. The Participant has the right under federal law to certain protections for cooperating with or reporting legal violations to the Securities and Exchange Commission (the “SEC”) and/or its Office of the Whistleblower, as well as certain other governmental entities and self-regulatory organizations. As such, nothing in this Agreement or otherwise prohibits or limits the Participant from disclosing this Agreement to, or from cooperating with or reporting violations to or initiating communications with, the SEC or any other such governmental entity or self-regulatory organization, and the Participant may do so without notifying the Company. The Company and its Affiliates may not retaliate against the Participant for any of these activities, and nothing in this Agreement or otherwise requires the Participant to waive any monetary award or other payment that the Participant might become entitled to from the SEC or any other governmental entity or self-regulatory organization. Moreover, nothing in this Agreement or otherwise prohibits the Participant from notifying the Company that the Participant is going to make a report or disclosure to law enforcement. Notwithstanding anything to the contrary in this Agreement or otherwise, as provided for in the Defend Trade Secrets Act of 2016 (18 U.S.C. § 1833(b)), the Participant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Without limiting the foregoing, if the Participant files a lawsuit for retaliation by the Company for reporting a suspected violation of law, the Participant may disclose the trade secret to his or her attorney and use the trade secret information in the court proceeding, if the Participant (x) files any document containing the trade secret under seal, and (y) does not disclose the trade secret, except pursuant to court order.

SECTION 7. Acknowledgement. The Participant acknowledges that the terms of this Agreement are reasonable and necessary in light of his or her unique position, responsibility and knowledge of the operations of the Company and its Affiliates and the unfair advantage that his or her knowledge and expertise concerning the business of the Company and its Affiliates would afford a competitor of the Company or its Subsidiaries and are not more restrictive than necessary to protect the legitimate interests of the parties hereto. If the final judgment of a court of competent jurisdiction, or any final non-appealable decision of an arbitrator in connection with a mandatory arbitration, declares that any term or provision of this Agreement is invalid or unenforceable, the parties agree that the court or arbitrator making the determination of invalidity or unenforceability shall have the power to reduce the scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the judgment or decision may be appealed. The Participant acknowledges that the Company and its Affiliates and the shareholders of the Company would be irreparably harmed by any breach of this Agreement and that there would be no adequate remedy at law or in damages to compensate the Company and its Affiliates and the shareholders of the Company for any such breach. The Participant agrees that the Company shall be entitled to injunctive relief, without having to post bond or other security, requiring specific performance by him or her of this Agreement in addition to any other remedy to which the Company is entitled at law or in equity, and consents to the entry thereof. This Agreement shall be construed and enforced in accordance with, and the rights and obligations of the parties hereto shall be governed by, the laws of the State of Delaware without giving effect to the conflicts of law principles thereof. The Participant agrees that jurisdiction and venue for any action arising from or relating to this Agreement or the relationship among the parties hereto, including but not limited to matters concerning validity, construction, performance, or enforcement, shall be exclusively in the federal and state courts of the State of Delaware located in New Castle County (collectively, the “Selected Courts”) (provided, that a final judgment in any such action shall be conclusive and enforced in other jurisdictions) and further agree that service of process may be made in any matter permitted by law. The Participant irrevocably waives and agrees not to assert (i) any objection which Participant may ever have to the laying of venue of any action or proceeding arising out of this Agreement in the Selected Courts, and (ii) any claim that any such action brought in any such court has been brought in an inconvenient forum. This Section 7 is intended to fix the location of potential litigation among the parties and does not create any causes of action or waive any defenses or immunities to suit. EACH PARTY

WAIVES ANY RIGHT TO A TRIAL BY JURY, TO THE EXTENT LAWFUL, AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS SECTION 7 WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR THE CONTEMPLATED TRANSACTIONS.

[Signature page follows]

FINAL VERSION

Post-Filing Severance Plan

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first above written.


PIONEER ENERGY SERVICES CORP.

By:
		Name:
		Title:


[Participant]

By:
		Name:

EXHIBIT D

PIONEER ENERGY SERVICES CORP.

KEY EXECUTIVE SEVERANCE PLAN

FORM OF WAIVER AND RELEASE

Pioneer Energy Services Corp. has offered to pay me certain benefits (the “Benefits”) pursuant to the Pioneer Energy Services Corp. Key Executive Severance Plan (the “Plan”). The Benefits are offered to me subject to my agreement, among other things, to waive any and all of my claims against and release Pioneer Energy Services Corp. and its predecessors, successors and assigns (collectively referred to as the “Company”), all of the affiliates (including parents and subsidiaries) of the Company (collectively referred to as the “Affiliates”), and the Company’s and Affiliates’ directors and officers, employees and agents, counsel, insurers, employee benefit plans and the fiduciaries and agents of said plans (collectively, with the Company and Affiliates, referred to as the “Corporate Group”) from any and all claims, demands, actions, liabilities and damages arising out of or relating in any way to my employment with or separation from the Company or any Affiliate; provided, however, that this Waiver and Release shall not apply to (i) any claim or cause of action to enforce or interpret any provision contained in the Plan or (ii) any claims for indemnification under any charter documents or bylaws of the Company or any Affiliate or, if applicable, the director and officer indemnification agreement entered into with the Company or an Affiliate on ___________, 20__. I have read this Waiver and Release and the Plan (which, together, are referred to herein as the “Plan Materials”) and the Plan is incorporated herein by reference. The provision of the Benefits is voluntary on the part of the Company and is not required by any legal obligation other than the Plan. I choose to accept this offer.

I understand that signing this Waiver and Release is an important legal act. I acknowledge that the Company has advised me to consult an attorney before signing this Waiver and Release. I understand that, in order to be eligible for the Benefits, I must sign (and return to [_]) this Waiver and Release by 5:00 p.m. on ___________, 20__. I acknowledge that I have been given at least 21 days to consider whether to sign and execute this Waiver and Release.

In exchange for the payment to me of Benefits, I (1) agree not to sue in any local, state and/or federal court regarding or relating in any way to my employment with or separation from the Company or any Affiliate and (2) knowingly and voluntarily waive all claims and release the Corporate Group from any and all claims, demands, actions, liabilities and damages, whether known or unknown, arising out of or relating in any way to my employment with or separation from the Company or any Affiliate, except to the extent that my rights are vested under the terms of employee benefit plans sponsored by the Company or any Affiliate and except with respect to such rights or claims as may arise after the date this Waiver and Release is executed. The claims subject to this Waiver and Release include, but are not limited to, claims and causes of action under: Title VII of the Civil Rights Act of 1964, as amended (“Title VII”); the Age

Discrimination in Employment Act of 1967, as amended, including the Older Workers Benefit Protection Act of 1990 (“ADEA”); the Civil Rights Act of 1866, as amended; the Civil Rights Act of 1991; the Americans with Disabilities Act of 1990 (“ADA”); the Energy Reorganization Act, as amended, 42 U.S.C. § 5851; the Workers Adjustment and Retraining Notification Act of 1988; the Pregnancy Discrimination Act of 1978; the Employee Retirement Income Security Act of 1974, as amended; the Family and Medical Leave Act of 1993; the Fair Labor Standards Act; the Occupational Safety and Health Act; the Texas Labor Code § 21.001 et seq.; the Texas Labor Code; claims in connection with workers’ compensation or “whistle blower” statutes; and/or contract, tort, defamation, slander, wrongful termination or any other state or federal regulatory, statutory or common law. Further, I expressly represent that no promise or agreement which is not expressed in the Plan Materials has been made to me in executing this Waiver and Release, and that I am relying on my own judgment in executing this Waiver and Release, and that I am not relying on any statement or representation of the Company, any of the Affiliates or any other member of the Corporate Group or any of their agents. I agree that this Waiver and Release is valid, fair, adequate and reasonable, is with my full knowledge and consent, was not procured through fraud, duress or mistake and has not had the effect of misleading, misinforming or failing to inform me.

I acknowledge that payment of Benefits to me by the Company is not an admission by the Company or any other member of the Corporate Group that they engaged in any wrongful or unlawful act or that the Company or any member of the Corporate Group violated any federal or state law or regulation.

Should any of the provisions set forth in this Waiver and Release be determined to be invalid by a court, agency or other tribunal of competent jurisdiction, it is agreed that such determination shall not affect the enforceability of other provisions of this Waiver and Release. I acknowledge that this Waiver and Release and the other Plan Materials set forth the entire understanding and agreement between me and the Company or any other member of the Corporate Group concerning the subject matter of this Waiver and Release and supersede any prior or contemporaneous oral and/or written agreements or representations, if any, between me and the Company or any other member of the Corporate Group. I understand that for a period of seven calendar days following the date that I sign this Waiver and Release, I may revoke my acceptance of the offer referred to above, provided that my written statement of revocation is received on or before that seventh day by [_], in which case the Waiver and Release will not become effective. In the event I revoke my acceptance of the offer referred to above, the Company shall have no obligation to provide me the Benefits. I understand that failure to revoke my acceptance of the offer referred to above within seven calendar days from the date I sign this Waiver and Release will result in this Waiver and Release being permanent and irrevocable.

I acknowledge that I have read this Waiver and Release, I have had an opportunity to ask questions and have it explained to me and that I understand that this Waiver and Release will have the effect of knowingly and voluntarily waiving any action I might pursue, including breach of contract, personal injury, retaliation, discrimination on the basis of race, age, sex, national origin or disability and any other claims arising prior to the date of this Waiver and Release.

By execution of this document, I do not waive or release or otherwise relinquish any legal rights I may have which are attributable to or arise out of acts, omissions or events of the Company or any other member of the Corporate Group which occur after the date of the execution of this Waiver and Release.



Employee’s Printed Name				Company Representative


Employee’s Signature				Company Execution Date


Employee’s Signature Date				Employee’s Social Security Number

Exhibit 99.1

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

In re:

PIONEER ENERGY SERVICES CORP., et al.,¹

Debtors.

Chapter 11

Case No. 20-31425 (DRJ)

(Jointly Administered)

NOTICE OF (I) ENTRY OF ORDER APPROVING THE DEBTORS’

DISCLOSURE STATEMENT FOR, AND CONFIRMING, THE DEBTORS’ JOINT

PREPACKAGED CHAPTER 11 PLAN OF REORGANIZATION AND (II) THE

OCCURRENCE OF THE EFFECTIVE DATE

PLEASE TAKE NOTICE that on May 11, 2020, the Honorable David R. Jones, United States Bankruptcy Judge for the United States Bankruptcy Court for the Southern District of Texas (the “Bankruptcy Court”), entered the Findings of Fact, Conclusions of Law, and Order Approving the Debtors’ Disclosure Statement and Confirming the Debtors’ Joint Prepackaged Chapter 11 Plan of Reorganization [Docket No. 331] (the “Confirmation Order”) confirming the Plan² [Docket No. 16] and approving the Disclosure Statement [Docket No. 16] of the above-captioned debtors and debtors in possession (the “Debtors”).

PLEASE TAKE FURTHER NOTICE that the Effective Date of the Plan occurred on May 29, 2020.

PLEASE TAKE FURTHER NOTICE that copies of the Confirmation Order, the Plan, and the related documents are available for inspection. If you would like to obtain a copy of the Confirmation Order or the Plan, you may contact Epiq Corporate Restructuring, LLC, the voting and claims agent (the “Notice and Claims Agent”) retained by the Debtors in these Chapter 11 Cases, by: (i) accessing the Debtors’ restructuring website at https://dm.epiq11.com/pioneerenergy, (ii) calling the Notice and Claims Agent at 1-833-991-0977 (Domestic Toll-Free) or 1-503-597-7679 (International); or (ii) emailing the Notice and Claims Agent at PioneerEnergy@epiqglobal.com. Parties may also obtain any documents filed in the Chapter 11 Cases via PACER at https://www.pacer.gov/.

²	Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Joint Prepackaged Plan of Reorganization for Pioneer Energy Services Corp. and its Affiliated Debtors [Docket No. 16] (as modified, amended, and including all supplements, the “Plan”).

PLEASE TAKE FURTHER NOTICE that the Bankruptcy Court has approved certain discharge, release, exculpation, injunction, and related provisions in Article VIII of the Plan.

PLEASE TAKE FURTHER NOTICE that pursuant to Article V of the Plan, all (a) requests for payment of Cure Claims that differ from the amounts paid or proposed to be paid by the Debtors or the Reorganized Debtors to a counterparty must be filed with the Reorganized Debtors and the Notice and Claims Agent on or before thirty (30) days after the Effective Date and/or (b) proofs of claim with respect to Claims arising from the rejection of Executory Contracts and Unexpired Leases, if any, must be filed with the Bankruptcy Court within thirty (30) day after the date of the order of the Court approving such rejection (including the Confirmation Order). Any such request that is not timely filed shall be disallowed and forever barred, estopped, and enjoined from assertion, and shall not be enforceable against any Debtor or Reorganized Debtor, as applicable, without the need for any objection by the Debtors, Reorganized Debtors or any other party in interest or any further notice to or action, order, or approval of the Court.

PLEASE TAKE FURTHER NOTICE that the Plan and its provisions are binding on the Debtors, the Reorganized Debtors, and any Holder of a Claim or Interest and such Holders’ respective successors and assigns, whether or not the Claim or Interest of such Holder is Impaired under the Plan, and whether or not such Holder voted to accept the Plan.

PLEASE TAKE FURTHER NOTICE that the Plan and the Confirmation Order contain other provisions that may affect your rights. You are encouraged to review the Plan and the Confirmation Order in their entirety.

[Remainder of Page Intentionally Left Blank.]

Exhibit 99.2

LOGO

NEWS RELEASE

Pioneer Energy Services Corp.

1250 NE Loop 410, Suite 1000, San Antonio, Texas 78209

Pioneer Energy Services Successfully Emerges from Chapter 11

San Antonio, TX— June 1, 2020 – Pioneer Energy Services Corp. (“Pioneer” or “the Company”) announced today that it has emerged from Chapter 11 bankruptcy protection, successfully completing its debt restructuring process and implementing the Chapter 11 reorganization plan confirmed by the U.S. Bankruptcy Court for the Southern District of Texas on May 11, 2020.

In connection with the debt restructuring, Pioneer reduced total debt by approximately $267 million, from $475 million to $208 million, eliminated a substantial portion of its cash interest obligations, and obtained a new $75 million asset backed revolving credit facility. The Company’s $208 million of new debt consists of $78 million of floating rate senior secured notes due May 2025, with 50% of the interest in the first year paid in-kind rather than in cash, and $130 million of 5% convertible notes due November 2025, with all interest paid in-kind rather than in cash. Based on current interest rates total cash interest payable on the notes is anticipated to be approximately $4.3 million in the first year and $8.6 million thereafter.

The convertible notes are initially convertible into 75 shares of common stock per $1,000 principal amount of the convertible notes, subject to customary anti-dilution adjustments. The convertible notes are mandatorily convertible at maturity as long as the value of the shares issuable upon conversion exceeds the principal amount of the notes plus accrued interest. In addition, upon the occurrence of certain “merger events”, which include a sale of the Company and acquisitions by the Company where the acquired entity has an equity value in excess of $100 million or the convertible noteholders have consented, the Company may require all or a portion of the convertible notes to convert into shares of common stock. Upon conversion of the convertible notes, and assuming the Company does not incur additional debt (including borrowings under its revolving credit facility), the Company would have $82.4 million of debt outstanding, which includes paid in-kind interest.

“Today marks the completion of a restructuring and recapitalization that allows the Company to continue providing our customers with industry-leading expertise and safe, value-added services,” said Wm. Stacy Locke, Chief Executive Officer. “On behalf of the management team, I would like to extend my gratitude to our employees for their hard work and dedication and to our customers, suppliers, and stakeholders for their support during this process.”

The Company also announced today a newly constituted Board of Directors, effective in conjunction with the Company’s emergence from Chapter 11. The new Board is comprised of David Coppé, John Jacobi, Wm. Stacy Locke, Matt Porter, and Charlie Thompson.

Mr. Locke said, “Our newly constituted Board includes a group of individuals with a range of experience and expertise. We look forward to benefitting from their guidance as we embark on our new beginning.”

Shares of the Company’s common stock will no longer trade on the OTC Pink Marketplace. The Company anticipates trading of its common stock on the OTC market to commence again in the near future.

Details of the restructuring and debt agreements, as well as additional details regarding the new directors will be provided in a Current Report on Form 8-K to be filed with the Securities and Exchange Commission (the “SEC”), which can be viewed on the SEC’s website at http://www.sec.gov or the Company’s website after filing. Additional information is available by calling (833) 991-0977 (toll free) or (503) 597-7679

(international). Court filings and other information related to the court-supervised proceedings are available at a website administered by the Company’s claims agent, Epiq Corporate Restructuring, LLC, at https://dm.epiq11.com/pioneerenergy.

About Pioneer Energy Services Corp.

Pioneer Energy Services provides well servicing and wireline services to producers primarily in Texas and Rocky Mountain regions. Pioneer also provides contract land drilling services to oil and gas operators in Texas and Appalachia regions and internationally in Colombia. Pioneer is headquartered in San Antonio, Texas.

Contact:

Dan Petro, CFA, Vice President, Treasury and Investor Relations

Pioneer Energy Services

(210) 828-7689

Cautionary Statement Regarding Forward-Looking Statements

Statements contained in this press release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements made in good faith that are subject to risks, uncertainties and assumptions. These forward-looking statements are based on our current beliefs, intentions, and expectations. Any statements that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions, future events or performance (often, but not always identifiable by the use of the words or phrases such as “will result,” “expects to,” “will continue,” “anticipates,” “plans, “intends,” “estimated,” “projects,” and “outlook”) are not historical facts and may be forward-looking and, accordingly, such statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those expressed in these forward-looking statements. Our actual results, performance or achievements could differ materially from those we express in the foregoing discussion as a result of a variety of factors, including the effects on our business of the filing for, and emergence from, Chapter 11 bankruptcy protection. We have discussed many of these factors in more detail in our Annual Report on Form 10-K for the year ended December 31, 2019, as amended by Form 10-K/A for the year ended December 31, 2019, including under the heading “Risk Factors” in Item 1A. These factors are not necessarily all the important factors that could affect us. Other unpredictable or unknown factors could also have material adverse effects on actual results or matters that are the subject of our forward-looking statements. All forward-looking statements speak only as of the date on which they are made and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. We advise readers that they should (1) recognize that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.