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Item 1.01
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Entry into a Material Definitive Agreement.
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Indenture
On August 17, 2017, SESI, L.L.C. (“SESI”), a wholly-owned subsidiary of Superior Energy Services, Inc. (the
“Company”), completed its previously announced sale of $500,000,000 aggregate principal amount of 7.750% Senior Notes due 2024 (the “Notes”) to J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Wells Fargo Securities, LLC, Capital One Securities, Inc., Citigroup Global Markets Inc., RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and Hancock Investment Services, Inc. (collectively, the “Initial Purchasers”). The
Notes were sold in accordance with a private placement conducted pursuant to Rule 144A and Regulation S under the Securities Act of 1933, as amended.
The Notes were issued pursuant to an indenture, dated August 17, 2017 (the “Indenture”), by and among the Company, SESI, all of
the Company’s domestic subsidiaries (other than SESI) that currently guarantee SESI’s revolving credit facility (the “Subsidiary Guarantors”) and The Bank of New York Mellon Trust Company, N.A., as trustee (the
“Trustee”). The Indenture contains covenants that will, among other things, limit the Company’s, SESI’s and their subsidiaries’ ability to pay dividends or make other distributions, incur liens or consolidate, merge or sell
all or substantially all of their assets. The indenture governing the Notes also contains customary events of default, including payment defaults, breaches of covenants, failure to pay judgments and events of bankruptcy, insolvency and
reorganization. Upon the occurrence of certain events of default, the Trustee or the holders of at least 25% in principal amount of the outstanding Notes may declare all outstanding Notes to be due and payable immediately. The Notes automatically
become due and payable if an event of default relating to specified events of bankruptcy, insolvency or reorganization occurs.
Prior to
September 15, 2020, SESI may, at its option, redeem up to 35% of the Notes with the net cash proceeds of certain sales of the Company’s equity, at a redemption price of 107.75% of the principal amount, plus accrued and unpaid interest, as
well as any additional interest thereon. On or after September 15, 2020, SESI may redeem all or part of the Notes at specified redemption prices. In addition, at any time prior to September 15, 2020, all or part of the Notes may be
redeemed by SESI at a price equal to 100% of the principal amount of the Notes so redeemed plus a premium equal to the greater of (i) 1% of the principal amount of the Notes so redeemed or (ii) the excess of the present value of the
redemption price of the Notes so redeemed on September 15, 2020, plus all required interest payments through September 15, 2020 (computed using a discount rate equal to the applicable treasury rate as of such redemption date plus 50 basis
points) over the principal amount of the Notes so redeemed. Upon the occurrence of a “Change in Control” (as defined in the indenture), each holder of the Notes will have the right to require SESI to purchase that holder’s Notes for a
cash price equal to 101% of their principal amount, plus accrued and unpaid interest. SESI will also be required to make an offer to repurchase the notes at 100% of their principal amount, plus accrued and unpaid interest, in the event of certain
asset sales.
A copy of the Indenture is attached hereto as Exhibit 4.1 and incorporated herein by reference. The foregoing
description of the Indenture is qualified in its entirety by reference to such exhibit.
Registration Rights Agreement
In connection with the sale of the Notes, on August 17, 2017, the Company, SESI and the Subsidiary Guarantors entered into a registration
rights agreement with J.P. Morgan Securities LLC, as representative of the Initial Purchasers (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company, SESI and the Subsidiary Guarantors have agreed
to file with the Securities and Exchange Commission a registration statement to allow the holders of the Notes to exchange the Notes and the related guarantees for registered notes and guarantees having substantially identical terms as the Notes and
related guarantees, evidencing the same indebtedness of SESI as the Notes, and to use reasonable best efforts to cause the exchange offer registration statement to be declared effective and consummate the exchange offer within 365 days after
August 17, 2017. In certain circumstances, the Company, SESI and the Subsidiary Guarantors may be required to file a shelf registration statement to register the Notes under the Securities Act.
If the Company, SESI and the Subsidiary Guarantors fail to comply with their obligations under the Registration Rights Agreement, SESI may be
required to pay additional interest, as calculated in the Registration Rights Agreement, with respect to the Notes.
A copy of the Registration Rights Agreement is attached hereto as Exhibit 10.1 and
incorporated herein by reference. The foregoing description of the Registration Rights Agreement is qualified in its entirety by reference to such exhibit.
Supplemental Indenture – 7.125% Senior Notes due 2021
On August 17, 2017, the Company, SESI, the Subsidiary Guarantors and the Trustee, as trustee, entered into a Supplemental Indenture (the
“Supplemental Indenture”) to the Indenture dated as of December 6, 2011, by and among the Company, SESI, the guarantors named therein and the Trustee, with respect to SESI’s 7.125% Senior Notes due 2021 (the “2021
Indenture”). The purpose of the Supplemental Indenture is to amend the 2021 Indenture to add the Subsidiary Guarantors as guarantors with respect to the 7.125% Senior Notes due 2021.
A copy of the Supplemental Indenture is attached hereto as Exhibit 4.2 and incorporated herein by reference. The foregoing description of the
Supplemental Indenture is qualified in its entirety by reference to such exhibit.