Exhibit 4.1


 


SUPPLEMENTAL INDENTURE


 


SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of July 28, 2003 among
each of the subsidiaries of Key Energy Services, Inc., a Maryland corporation
(the “Company”), listed on
Schedule I attached hereto (each a “Guaranteeing
Subsidiary” and collectively, the
“Guaranteeing Subsidiaries”), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and The Bank of New York, 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 January 22, 1999 providing for the issuance of an aggregate
outstanding principal amount of $150.0 million of 14% Senior Subordinated Notes
due 2009 (the “Notes”);


 


WHEREAS, the Indenture provides that under certain
circumstances the Guaranteeing Subsidiaries shall execute and deliver to the
Trustee a supplemental indenture pursuant to which each 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 “Note Guarantee”); and


 


WHEREAS, pursuant to Section 9.01 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, each 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. Each Guaranteeing Subsidiary hereby agrees as follows:


 


(a)           Along with all
Guarantors named in the Indenture, to jointly and severally Guarantee to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, the Notes or the obligations of the Company
hereunder or thereunder, that:


 


(i)            the principal of and
interest on the Notes will be promptly paid in full when due, whether at
maturity, by acceleration, redemption or otherwise, and interest on the overdue
principal of and interest on the Notes, if any, if lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and


 


(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 or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise.


 

















 


Failing
payment when due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors shall be jointly and severally obligated to
pay the same immediately.


 


(b)           Subject to the
provisions of Section 12.02 of the Indenture, the obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or the Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute
a legal or equitable discharge or defense of a guarantor.


 


(c)           The following is hereby
waived: 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.


 


(d)           This Note Guarantee
shall not be discharged except by complete performance of the obligations
contained in the Notes and the Indenture, and each Guaranteeing Subsidiary
accepts all obligations of a Guarantor under the Indenture.


 


(e)           If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors, any amount paid by
either to the Trustee or such Holder, this Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force and effect.


 


(f)            No Guaranteeing
Subsidiary shall be entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby until payment in full
of all obligations guaranteed hereby.


 


(g)           As between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 6 of the Indenture for the purposes of this Note
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the obligations guaranteed hereby, and (y) in
the event of any declaration of acceleration of such obligations as provided in
Article 6 of the Indenture, such obligations (whether or not due and payable)
shall forthwith become due and payable by the Guarantors for the purpose of
this Note Guarantee.


 


(h)           The Guarantors shall
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
Guarantee.


 


(i)            Pursuant to Section
12.03 of the Indenture, after giving effect to any maximum amount and any other
contingent and fixed liabilities that are relevant under any applicable
Bankruptcy or fraudulent conveyance 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 Article 12 of the Indenture, this new Note Guarantee shall be
limited to the maximum amount permissible such that the obligations of such
Guarantor under this Note Guarantee will not constitute a fraudulent transfer
or conveyance.


 


2

















 


3.             Execution And Delivery. Each Guaranteeing Subsidiary agrees that the Note
Guarantees shall remain in full force and effect notwithstanding any failure to
endorse on each Note a notation of such Note Guarantee.


 


4.             Guaranteeing Subsidiary May Consolidate, Etc. On Certain Terms.


 


(a)           No Guaranteeing
Subsidiary may consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another corporation, Person or entity
whether or not affiliated with such Guarantor unless:


 


(i)            subject to Sections
12.05 and 12.06 of the Indenture, the Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or the Company)
unconditionally assumes all the obligations of such Guarantor, pursuant to a
supplemental indenture in form and substance reasonably satisfactory to the
Trustee, under the Notes, the Indenture and the Note Guarantee on the terms set
forth herein or therein and immediately after giving effect to such
transaction, no Default or Event of Default exists, or


 


(ii)           the Note Guarantee of
such Guarantor is to be released pursuant to Section 12.06 of the Indenture.


 


(b)           In case of any such
consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed
upon the Notes and the due and punctual performance of all of the covenants and
conditions of the Indenture to be performed by the Guarantor, such successor
corporation shall succeed to and be substituted for the Guarantor with the same
effect as if it had been named in the Indenture as a Guarantor. Such successor
corporation thereupon may cause to be signed any or all of the Note Guarantees
to be endorsed upon all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee. All the Note
Guarantees so issued shall in all respects have the same legal rank and benefit
under the Indenture as the Note Guarantees theretofore and thereafter issued in
accordance with the terms of the Indenture as though all of such Note Guarantees
had been issued at the date of the execution hereof.


 


(c)           Except as set forth in
Articles 4 and 5 of the Indenture, and notwithstanding clauses (a) and (b)
above, nothing contained in the Indenture or in any of the Notes shall prevent
any consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.


 


5.             Releases.


 


(a)           In the event of a sale
or other disposition of all of the assets of any Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all to the
capital stock of any Guarantor, in each case to a Person that is not (either
before or after giving effect to such transaction) a Restricted Subsidiary of
the Company, then such Guarantor (in the event of a sale or other disposition,
by way of merger, consolidation or otherwise, of all of the capital stock of
such Guarantor) or the corporation acquiring the property (in the event of a
sale or other disposition of all or substantially all of the assets of such
Guarantor) will be released and relieved of any obligations under its Note
Guarantee, if immediately after giving effect to such sale, there


 


3

















 


is no Default or Event of Default that has
occurred and is continuing. If such Guarantor is not released and relieved of
its obligations under its Note Guarantee because a Default or Event of Default has
occurred and is continuing immediately after giving effect to such sale, such
Guarantor will be released and relieved of such obligations as soon thereafter
as all Default and Events of Default have been waived or cured. If the Company
designates any Restricted Subsidiary that is a Guarantor as an Unrestricted
Subsidiary in accordance with the provisions of Section 4.19 of the Indenture,
such Restricted Subsidiary will be released and relieved of any obligations
under its Note Guarantee. The Trustee shall execute any documents reasonably
requested in order to evidence the release of any Guarantor, pursuant to the
provisions of Section 12.06 of the Indenture, from its obligations under its
Note Guarantee.


 


(b)           Any Guarantor not
released from its obligations under its Note Guarantee shall remain liable for
the full amount of principal of and interest on the Notes and for the other
obligations of any Guarantor under the Indenture as provided in Article 12 of
the Indenture.


 


6.             No Recourse Against Others. No past, present or future director, officer,
employee, incorporator, stockholder or agent of any Guaranteeing Subsidiary, as
such, shall have any liability for any obligations of the Company or any
Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder of the Notes by
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes. Such waiver may not be
effective to waive liabilities under the federal securities laws and it is the
view of the SEC that such a waiver is against public policy.


 


7.             New York Law To Govern. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT
TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION
OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.


 


8.             Counterparts. The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.


 


9.             Effect Of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.


 


10.           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 each Guaranteeing Subsidiary and the Company.


 


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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.


 


	
  Dated:
  July 28, 2003

  	
   

  
	
   

  	
   

  
	
   

  	
  THE GUARANTEEING SUBSIDIARIES:

  
	
   

  	
   

  
	
   

  	
  MISR
  KEY ENERGY SERVICES, LLC

  
	
   

  	
  Q
  SERVICES, INC.

  
	
   

  	
  Q.V.
  SERVICES, INC.

  
	
   

  	
  UNITRAK
  SERVICES HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/

  	
  Jack
  D. Loftis, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary of each entity

  listed above

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BROOKS
  WELL SERVICING BENEFICIAL, L.P.

  
	
   

  	
  by
  the sole general partner, Brooks Well Servicing, Inc.

  
	
   

  	
  KEY
  ENERGY DRILLING BENEFICIAL, LP

  
	
   

  	
  by
  the sole general partner, Key Energy Drilling, Inc.

  
	
   

  	
  UNITRAK
  SERVICES, L.P.

  
	
   

  	
  by
  the sole general partner, Unitrak Services Holding, Inc.

  
	
   

  	
  WELLTECH
  MID-CONTINENT BENEFICIAL, LP

  
	
   

  	
  by
  the sole general partner, WellTech Mid-Continent, Inc.

  
	
   

  	
  YALE
  E. KEY BENEFICIAL, LP

  
	
   

  	
  by
  the sole general partner, Yale E. Key, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/

  	
  Jack
  D. Loftis, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President and Secretary of each

  corporate general partner listed above

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Q.V.
  SERVICES, LLC

  
	
   

  	
  Q
  ENERGY SERVICES, L.L.C.

  
	
   

  	
  Q
  OIL & GAS SERVICES, LLC

  
	
   

  	
  BROOKS
  WELL SERVICING, LLC

  
	
   

  	
  KEY
  ENERGY DRILLING, LLC

  
	
   

  	
  UNITRAK
  SERVICES, LLC

  
	
   

  	
  YALE
  E. KEY, LLC

  
	
   

  	
  WELLTECH
  MID-CONTINENT, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/

  	
  Jack
  D. Loftis, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
  Title:

  	
  Manager
  of each limited liability company

  listed above

  



 


5

















 


	
   

  	
  AES
  ACQUISITION, L.P. (d/b/a AMERICAN ENERGY SERVICES)

  
	
   

  	
  QUALITY
  TUBULAR SERVICES, L.P.

  
	
   

  	
  QUALITY
  OIL FIELD SERVICES, L.P.

  
	
   

  	
  Q
  PRODUCTION SERVICES, L.P.

  
	
   

  	
  Q.V.
  SERVICES OF TEXAS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Q
  OIL & GAS SERVICES, LLC, the sole general

  partner of each limited partnership listed above

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/
  Jack D. Loftis, Jr.

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  KEY
  ENERGY SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jack D. Loftis, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
  Title:

  	
  Senior
  Vice President and Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  YALE
  E. KEY, INC., KEY ENERGY DRILLING, INC., WELLTECH EASTERN, INC., ODESSA
  EXPLORATION INCORPORATED, KALKASKA OILFIELD SERVICES, INC., WELL-CO OIL
  SERVICE, INC., KEY ROCKY MOUNTAIN, INC., KEY FOUR CORNERS, INC., BROOKS WELL
  SERVICING, INC., KEY ENERGY SERVICES – SOUTH TEXAS, INC., KEY ENERGY SERVICES
  – CALIFORNIA, INC., WATSON OILFIELD SERVICE & SUPPLY, INC., WELLTECH
  MID-CONTINENT, INC., DAWSON PRODUCTION MANAGEMENT, INC., DAWSON PRODUCTION
  TAYLOR, INC., DAWSON PRODUCTION ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jack D. Loftis, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President

  
									



 


6

















 


	
   

  	
  DAWSON
  PRODUCTION PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  DAWSON
  PRODUCTION MANAGEMENT INC., ITS

  SOLE GENERAL PARTNER

  
	
   

  	
   

  
	
   

  	
  Q.V.
  SERVICES BENEFICIAL, L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Q.V.
  SERVICES, INC., ITS SOLE GENERAL PARTNER

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Jack D. Loftis, Jr.

  	
   

  
	
   

  	
  Name:

  	
  Jack
  D. Loftis, Jr.

  
	
   

  	
  Title:

  	
  Vice
  President of each of the sole general partners

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE TRUSTEE:

  
	
   

  	
   

  
	
   

  	
  THE
  BANK OF NEW YORK,

  
	
   

  	
  as
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Marie
  E. Trimboli

  	
   

  
	
   

  	
  Authorized
  Signatory

  
						



 


7

















 


SCHEDULE I


 


Brooks Well Servicing, L.L.C.


 


Brooks Well Servicing Beneficial, L.P.


 


Key Energy Drilling, L.L.C.


 


Key Energy Drilling Beneficial, L.P.


 


MISR Key Energy Services, L.L.C.


 


Well Tech Mid-Continent, L.L.C.


 


Well Tech Mid-Continent Beneficial, L.P.


 


Yale E. Key, L.L.C.


 


Yale E. Key Beneficial, L.P.


 


Unitrak Services, L.L.C.


 


Unitrak Services, L.P.


 


Unitrak Services Holding, Inc.


 


Q Services, Inc.


 


Q.V. Services, Inc.


 


Q.V. Services, LLC


 


Q.V. Services Beneficial, L.P.


 


Q Energy Services, L.L.C.


 


Q Oil and Gas Services, L.L.C.


 


AES Acquisition, L.P. (d/b/a American Energy Services)


 


Quality Tubular Services, L.P.


 


Quality Oil Field Services, L.P.


 


Q Production Services, L.P.


 


Q.V. Services of Texas, L.P.


 


8