▇▇▇▇▇▇ PRODUCTION SERVICES, INC.
AND
SUBSIDIARY GUARANTORS
9-3/8% SENIOR NOTES DUE 2007
INDENTURE
Dated as of February 20, 1997
U.S. TRUST COMPANY OF TEXAS, N.A.
Trustee
$140,000,000
CROSS REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1).................................................................7.10
(a)(2)....................................................................7.10
(a)(3)....................................................................N.A.
(a)(4)................................................................... N.A.
(a)(5)....................................................................7.10
(b).......................................................................7.10
(c).......................................................................N.A.
311(a)....................................................................7.11
(b).......................................................................7.11
(c).......................................................................N.A.
312(a).....................................................................2.5
(b).......................................................................11.3
(c).......................................................................11.3
313(a).....................................................................7.6
(b)(1).....................................................................7.6
(b)(2)................................................................ 7.6;7.7
(c)...................................................................7.6;11.2
(d)........................................................................7.6
314(a)................................................................4.3;11.2
(b).......................................................................4.12
(c)(1)....................................................................11.4
(c)(2)....................................................................11.4
(c)(3)....................................................................N.A.
(d).............................................................11.3;11.4;11.5
(e).......................................................................11.5
(f).......................................................................N.A.
315(a).....................................................................7.1
(b)...................................................................7.5;11.2
(c)........................................................................7.1
(d)........................................................................7.1
(e).......................................................................6.11
316 (a)(last sentence).....................................................2.9
(a)(1)(A)..................................................................6.5
(a)(1)(B)..................................................................6.4
(a)(2)....................................................................N.A.
(b)........................................................................6.7
(c).......................................................................2.12
317(a)(1)..................................................................6.8
(a)(2).....................................................................6.9
(b)........................................................................2.4
318(a)....................................................................11.1
(b).......................................................................N.A.
(c).......................................................................11.1
N.A. means not applicable.
*This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE................. 1
SECTION 1.1 DEFINITIONS........................................ 1
SECTION 1.2 OTHER DEFINITIONS.................................. 15
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.. 16
SECTION 1.4 RULES OF CONSTRUCTION.............................. 16
ARTICLE 2 THE NOTES.................................................. 17
SECTION 2.1 FORM AND DATING.................................... 17
SECTION 2.2 EXECUTION AND AUTHENTICATION....................... 17
SECTION 2.3 REGISTRAR AND PAYING AGENT......................... 18
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST................ 18
SECTION 2.5 HOLDER LISTS....................................... 19
SECTION 2.6 TRANSFER AND EXCHANGE.............................. 19
SECTION 2.7 REPLACEMENT NOTES.................................. 21
SECTION 2.8 OUTSTANDING NOTES.................................. 22
SECTION 2.9 TREASURY NOTES..................................... 22
SECTION 2.10 TEMPORARY NOTES.................................... 22
SECTION 2.11 CANCELLATION....................................... 22
SECTION 2.12 DEFAULTED INTEREST................................. 23
SECTION 2.13 CUSIP NUMBERS...................................... 23
ARTICLE 3 REDEMPTION AND PREPAYMENT.................................. 23
SECTION 3.1 NOTICES TO TRUSTEE................................. 23
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.................. 23
SECTION 3.3 NOTICE OF REDEMPTION............................... 24
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION..................... 25
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE........................ 25
SECTION 3.6 NOTES REDEEMED IN PART............................. 25
SECTION 3.7 OPTIONAL REDEMPTION................................ 25
SECTION 3.8 MANDATORY REDEMPTION............................... 26
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS 26
ARTICLE 4 COVENANTS.................................................. 28
SECTION 4.1 PAYMENT OF NOTES................................... 28
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.................... 28
SECTION 4.3 REPORTS............................................ 29
SECTION 4.4 COMPLIANCE CERTIFICATE............................. 29
SECTION 4.5 TAXES.............................................. 30
SECTION 4.6 STAY, EXTENSION AND USURY LAWS..................... 30
SECTION 4.7 RESTRICTED PAYMENTS................................ 30
SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES....................................... 32
SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED
EQUITY............................................. 33
SECTION 4.10 ASSET SALES........................................ 35
SECTION 4.11 TRANSACTIONS WITH AFFILIATES....................... 37
SECTION 4.12 LIENS.............................................. 37
i
SECTION 4.13 ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY
OWNED SUBSIDIARIES................................. 38
SECTION 4.14 SALE-AND-LEASEBACK TRANSACTIONS.................... 38
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL......... 38
SECTION 4.16 BUSINESS ACTIVITIES................................ 39
ARTICLE 5 SUCCESSORS................................................. 39
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS............ 39
SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.................. 40
ARTICLE 6 DEFAULTS AND REMEDIES...................................... 40
SECTION 6.1 EVENTS OF DEFAULT.................................. 40
SECTION 6.2 ACCELERATION....................................... 42
SECTION 6.3 OTHER REMEDIES..................................... 42
SECTION 6.4 WAIVER OF PAST DEFAULTS............................ 43
SECTION 6.5 CONTROL BY MAJORITY................................ 43
SECTION 6.6 LIMITATION ON SUITS................................ 43
SECTION 6.7 RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT...... 43
SECTION 6.8 COLLECTION SUIT BY TRUSTEE......................... 44
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM................... 44
SECTION 6.10 PRIORITIES......................................... 44
SECTION 6.11 UNDERTAKING FOR COSTS.............................. 45
ARTICLE 7 TRUSTEE ................................................... 45
SECTION 7.1 DUTIES OF TRUSTEE.................................. 45
SECTION 7.2 RIGHTS OF TRUSTEE.................................. 46
SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE....................... 47
SECTION 7.4 TRUSTEE'S DISCLAIMER............................... 47
SECTION 7.5 NOTICE OF DEFAULTS................................. 47
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES.......... 47
SECTION 7.7 COMPENSATION AND INDEMNITY......................... 47
SECTION 7.8 REPLACEMENT OF TRUSTEE............................. 48
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC................... 49
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION...................... 49
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
COMPANY............................................ 50
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE................... 50
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE......................................... 50
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE..................... 50
SECTION 8.3 COVENANT DEFEASANCE................................ 50
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE......... 51
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD
IN TRUST; OTHER MISCELLANEOUS PROVISIONS........... 52
SECTION 8.6 REPAYMENT TO THE COMPANY........................... 53
SECTION 8.7 REINSTATEMENT...................................... 53
ii
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER........................... 53
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES................ 53
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES................... 54
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT................ 56
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.................. 56
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES................... 56
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC...................... 56
ARTICLE 10 SUBSIDIARY GUARANTEES...................................... 57
SECTION 10.1 SUBSIDIARY GUARANTEES.............................. 57
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES................... 58
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY..... 59
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON
CERTAIN TERMS...................................... 59
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS.................. 60
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT.................. 60
SECTION 10.7 CONTRIBUTION....................................... 60
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES................. 61
ARTICLE 11 MISCELLANEOUS.............................................. 61
SECTION 11.1 TRUST INDENTURE ACT CONTROLS....................... 61
SECTION 11.2 NOTICES............................................ 61
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES................................... 63
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.......................................... 64
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION...... 64
SECTION 11.6 RULES BY TRUSTEE AND AGENTS........................ 64
SECTION 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND SHAREHOLDERS......................... 64
SECTION 11.8 GOVERNING LAW...................................... 65
SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS...... 65
SECTION 11.10 SUCCESSORS......................................... 65
SECTION 11.11 SEVERABILITY....................................... 65
SECTION 11.12 COUNTERPART ORIGINALS.............................. 65
SECTION 11.13 TABLE OF CONTENTS, HEADINGS, ETC................... 65
iii
INDENTURE dated as of February 20, 1997, by and among ▇▇▇▇▇▇ Production
Services, Inc., a Texas corporation (the "COMPANY"), the Subsidiary Guarantors
(as defined herein) and U.S. Trust Company of Texas, N.A., as trustee (the
"TRUSTEE").
The Company, the Subsidiary Guarantors and the Trustee agree as follows
for the benefit of one another and for the equal and ratable benefit of the
Holders of the 9-3/8% Senior Notes due 2007 of the Company (the "NOTES"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ACQUIRED INDEBTEDNESS" means, with respect to any specified Person, (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, including,
without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary to such specified Person and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"ACQUISITION LINE" means the loan facility under the credit agreement to
be entered into between the Company and the Frost National Bank for the purpose
of acquisitions of assets or businesses, as amended, modified, supplemented,
extended, restated or renewed from time to time.
"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 purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; PROVIDED that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"ATTRIBUTABLE INDEBTEDNESS" in respect of a sale-and-leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale-and-leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended). As used in the preceding sentence, the "net
rental payments" under any lease for any such period shall mean the sum of
rental and other payments required to be paid with respect to such period by the
lessee thereunder, excluding any amounts required to be paid by such lessee on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges. In the case of any lease that is terminable by the lessee
upon payment of penalty, such net rental payment shall also include the amount
of such penalty, but no rent
1
shall be considered as required to be paid under such lease subsequent to the
first date upon which it may be so terminated.
"BANKRUPTCY CUSTODIAN" means any receiver, trustee, assignee, liquidator
or similar officer under any Bankruptcy Law.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability
corporation or similar entity, any membership or other similar interests therein
and (v) any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"CASH EQUIVALENTS" means (i) any evidence of Indebtedness with a
maturity of 365 days or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii) demand and time deposits and certificates of
deposit or acceptances with a maturity of 365 days or less of any financial
institution that is a member of the Federal Reserve System having combined
capital and surplus and undivided profits of not less than $500 million; (iii)
commercial paper with a maturity of 270 days or less issued by a corporation
that is not an Affiliate of the Company and is organized under the laws of any
state of the United States or the District of Columbia and rated at least A-2 by
Standard and Poor's or at least P-2 by ▇▇▇▇▇'▇; (iv) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clause (i) above entered into with any commercial bank meeting the
specifications of clause (ii) above; (v) overnight bank deposits and bankers'
acceptances at any commercial bank meeting the qualifications specified in
clause (ii) above; (vi) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (ii) above,
provided all such deposits do not exceed $5.0 million in the aggregate at any
one time; (vii) demand and time deposits and certificates of deposit with any
commercial bank organized in the United States not meeting the qualifications
specified in clause (ii) above, PROVIDED that such deposits and certificates
support bond, letter of credit and other similar types of obligations incurred
in the ordinary course of business and (viii) investments in money market or
other mutual funds substantially all of whose assets comprise securities of the
types described in clauses (i) through (v) above.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of
2
related transactions, of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole to any "person" (as such term
is used in Section 13(d)(3) of the Exchange Act); (ii) the Company consolidates
with or merges into another Person or any Person consolidates with, or merges
into, the Company, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company is changed into or exchanged for cash,
securities or other property, other than any such transaction where (a) the
outstanding Voting Stock of the Company is changed into or exchanged for Voting
Stock of the surviving or resulting Person that is Qualified Capital Stock and
(b) the holders of the Voting Stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than a majority of the Voting
Stock of the surviving or resulting Person immediately after such transaction;
(iii) the adoption of a plan relating to the liquidation or dissolution of the
Company; (iv) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as defined above) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of more than 50% of the Voting Stock of the Company or (v) the first
day on which a majority of the members of the Board of Directors are not
Continuing Directors. For purposes of this definition, any transfer of an equity
interest of an entity that was formed for the purpose of acquiring Voting Stock
of the Company will be deemed to be a transfer of such portion of such Voting
Stock as corresponds to the portion of the equity of such entity that has been
so transferred.
"COMMISSION" means the Securities and Exchange Commission.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (i) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing such
Consolidated Net Income), plus (ii) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries for such period, to the
extent that such provision for taxes was included in computing such Consolidated
Net Income, plus (iii) consolidated net interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and whether or
not capitalized (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, imputed interest with respect to Attributable
Indebtedness, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Interest Rate Protection Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net Income, plus
(iv) depreciation, amortization (including amortization of goodwill, debt
issuance costs and other intangibles but excluding amortization of prepaid cash
expenses that were paid in a prior period) and other non-cash charges (including
any provision for the reduction in the carrying value of assets recorded in
accordance with GAAP but excluding any such non-cash charge to the extent that
it represents an accrual of or reserve for cash charges in any future period or
amortization of a prepaid cash expense that was paid in a prior period) of such
Person and its Restricted Subsidiaries for such period to the extent that such
depreciation, amortization and other non-cash charges were deducted in computing
such Consolidated Net Income, minus (v) any non-cash items increasing the
Consolidated Net Income of such Person and its Restricted Subsidiaries during
such period (excluding any such items that represent the reversal of any accrual
of, or cash reserve for, anticipated cash charges in any prior period commencing
subsequent to the Issue Date), in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the foregoing, the provision
for taxes on the income or profits of, and the depreciation and amortization and
other non-cash charges of a Restricted Subsidiary of the referent Person shall
be added to Consolidated Net Income to compute Consolidated Cash Flow only to
the extent (and in same proportion)
3
that the Net Income of such Restricted Subsidiary was included in calculating
the Consolidated Net Income of such Person and only if a corresponding amount
would be permitted at the date of determination to be dividended to the Company
by such Restricted Subsidiary without prior governmental approval (that has not
been obtained), and without direct or indirect restriction pursuant to the terms
of its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its shareholders.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; PROVIDED that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Restricted Subsidiary
thereof that is a Subsidiary Guarantor; (ii) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted 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
Restricted Subsidiary or its shareholders; (iii) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (iv) the cumulative effect of a change
in accounting principles shall be excluded.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any
date, the sum of (i) the consolidated equity of the common shareholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (ii)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of cash dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (x) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the Issue Date in the book
value of any asset owned by such Person or a consolidated Restricted Subsidiary
of such Person, (y) all investments as of such date in unconsolidated
Subsidiaries and in Persons that are not Subsidiaries (except, in each case,
Permitted Investments) and (z) all unamortized debt discount and expense and
unamortized deferred charges as of such date, all of the foregoing determined in
accordance with GAAP.
"CONTINUING DIRECTORS" means, as of any date of determination, any
member of the Board of Directors who (i) was a member of such Board of Directors
on the Issue Date or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 11.2 hereof or such other address as to which the
Trustee may give notice to the Company.
"CREDIT FACILITY" means, collectively, the Acquisition Line and the
Working Line.
"CURRENCY HEDGE OBLIGATIONS" means, at any time as to any Person, the
obligations of such Person at such time that were incurred in the ordinary
course of business pursuant to any foreign currency
4
exchange agreement, option or futures contract or other similar agreement or
arrangement designed to protect against or manage such Person's or any of its
Subsidiaries' exposure to fluctuations in foreign currency exchange rates.
"DEFAULT" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"DEFINITIVE NOTES" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereto.
"DEPOSITORY" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"DISINTERESTED DIRECTOR" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest (other than an interest arising solely from the beneficial
ownership of Capital Stock of the Company) in or with respect to such
transaction or series of transactions.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
on which the Notes mature.
"EMPLOYEE STOCK REPURCHASES" means purchases by the Company of any of
its Capital Stock from employees, provided that the aggregate amount of all such
purchases shall not exceed $500,000 during any fiscal year of the Company.
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EVENT OF LOSS" means, with respect to any workover rig or similar or
related property or asset of the Company or any Restricted Subsidiary, (i) any
damage to such workover rig or similar or related property or asset that results
in an insurance settlement with respect thereto on the basis of a total loss or
a constructive or compromised total loss or (ii) the confiscation, condemnation
or requisition of title to such workover rig or similar or related property or
asset by any government or instrumentality or agency thereof. An Event of Loss
shall be deemed to occur as of the date of the insurance settlement,
confiscation, condemnation or requisition of title, as applicable.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING INDEBTEDNESS" means up to $3.75 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Credit Facility) in existence on the Issue Date, until
such amounts are repaid.
5
"FAIR MARKET VALUE" means, with respect to any asset or Investment, the
fair market value of such asset or Investment at the time of the event requiring
such determination, and, with respect to any assets or Investment in excess of
$5.0 million (other than cash, Cash Equivalents or securities for which there is
a readily available public market) as determined by an Independent Appraiser
that is, in the reasonable judgment of the Board of Directors, qualified to
perform the task for which such Independent Appraiser has been engaged and
independent with respect to the Company.
"FIXED CHARGE COVERAGE RATIO" means with respect to any Person for any
period, the ratio of the Consolidated Cash Flow of such Person and its
Restricted Subsidiaries for such period to the Fixed Charges of such Person for
such period. In the event that the Company or any of its Restricted Subsidiaries
incurs, assumes, guarantees or redeems any Indebtedness (other than revolving
credit borrowings) or issues preferred stock subsequent to the commencement of
the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "CALCULATION DATE"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, guarantee or redemption of Indebtedness, or such issuance or
redemption of preferred stock, as if the same had occurred at the beginning of
the applicable four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions of businesses that
have been made by the referent Person or any of its Restricted Subsidiaries,
including through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period; (ii) the
Consolidated Cash Flow attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded; and (iii) the Fixed Charges attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Fixed Charges will
not be obligations of the referent Person or any of its Restricted Subsidiaries
following the Calculation Date.
"FIXED CHARGES" means, with respect to any Person for any period, the
sum of (i) the consolidated interest expense (net of any interest income) of
such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (excluding amortization of debt issuance costs and including, without
limitation, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
imputed interest with respect to Attributable Indebtedness, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Interest
Rate Protection Obligations); (ii) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period;
(iii) any interest expense on Indebtedness of another Person that is guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not such
guarantee or Lien is called upon) and (iv) the product of (A) all cash dividend
payments (and non-cash dividend payments in the case of a Person that is a
Restricted Subsidiary) on any series of preferred stock of such Person, to the
extent such preferred stock is owned by Persons other than such Person or its
Restricted Subsidiaries, times (B) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rate of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
6
"GAAP" means generally accepted accounting principles 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 entity as have been approved by a significant segment of the accounting
profession of the United States, which are in effect as of the date of
preparation of a financial statement or the date that a particular action is
taken or event occurs, as applicable.
"GLOBAL NOTE" means a Note that contains the paragraph referred to in
footnote 1 and the additional schedule referred to in footnote 2 to the form of
Note attached hereto as Exhibit A.
"GOVERNMENT SECURITIES" means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States of America, which, in either case, are not
callable or redeemable as the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Security
or a specific payment of principal of or interest on any such Government
Security held by such custodian for the account of the holder of such depository
receipt; provided, that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
Government Security or the specific payment of principal of or interest on the
Government Security evidenced by such depository receipt.
The term "GUARANTEE" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of nonperformance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down under letters of credit. When used as a verb,
"GUARANTEE" has a corresponding meaning.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any obligations in respect of
Currency Hedge Obligations or Interest Rate Protection Obligations, except any
such balance that constitutes an accrued expense or trade payable, if and to the
extent any of the foregoing indebtedness (other than letters of credit, Currency
Hedge Obligations and Interest Rate Protection Obligations) would appear as a
liability upon a balance sheet of such Person prepared in accordance with GAAP,
as well as all indebtedness of others secured by a Lien on any asset of such
Person (whether or not such indebtedness is assumed by such Person) and, to the
extent not otherwise included, the guarantee by such Person of any Indebtedness
of any other Person.
"INDENTURE" means this indenture, as amended or supplemented from time
to time.
7
"INDEPENDENT APPRAISER" means an investment banking firm of national
standing with noninvestment grade debt underwriting experience or any third
party appraiser of national standing; PROVIDED, HOWEVER, that such firm or
appraiser is not an Affiliate of the Company.
"INTEREST RATE PROTECTION OBLIGATIONS" means the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements or arrangements designed to protect
against or manage such Person's or any of its Subsidiaries' exposure to
fluctuations in interest rates.
"INVESTMENTS" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
PROVIDED that the following shall not constitute Investments: (i) an acquisition
of assets, Equity Interests or other securities by the Company for consideration
consisting of common equity securities of the Company, (ii) extensions of trade
credit or other advances to customers on commercially reasonable terms in
accordance with normal trade practices or otherwise in the ordinary course of
business, (iii) Interest Rate Protection Obligations and Currency Hedge
Obligations, but only to the extent that the same constitute Permitted
Indebtedness and (iv) endorsements of negotiable instruments and documents in
the ordinary course of business. If the Company or any Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Subsidiary of the Company such that, after giving effect to any such sale or
disposition, such Person is no longer a Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Subsidiary not sold or disposed of.
"ISSUE DATE" means the date on which the Notes were first issued under
this Indenture.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of San Antonio, Texas or the City of New York or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday, payment may be made on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other
than a precautionary financing statement respecting a lease not intended as a
security agreement).
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor to the
rating agency business thereof.
8
"NET EQUITY PROCEEDS" means (i) in the case of any sale by the Company
of Qualified Capital Stock of the Company, the aggregate net proceeds received
by the Company, after payment of expenses, commissions and the like incurred in
connection therewith, whether such proceeds are in cash or in other property
(valued as determined reasonably and in good faith by the Board of Directors, as
evidenced by a written resolution of said Board of Directors, at the fair market
value thereof at the time of receipt) and (ii) in the case of any exchange,
exercise, conversion or surrender of any outstanding Indebtedness of the Company
or any Restricted Subsidiary for or into shares of Qualified Capital Stock of
the Company, the amount of such Indebtedness (or, if such Indebtedness was
issued at an amount less than the stated principal amount thereof, the accrued
amount thereof as determined in accordance with GAAP) as reflected in the
consolidated financial statements of the Company prepared in accordance with
GAAP as of the most recent date next preceding the date of such exchange,
exercise, conversion or surrender (plus any additional amount required to be
paid by the holders of such Indebtedness to the Company or to any Wholly Owned
Restricted Subsidiary of the Company upon such exchange, exercise, conversion or
surrender and less any and all payments made to the holders of such
Indebtedness, and all other expenses incurred by the Company in connection
therewith), in the case of each of clauses (i) and (ii) to the extent
consummated after the Issue Date.
"NET INCOME" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (i) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (a) any Asset Sale (including, without
limitation, dispositions pursuant to sale-and-leaseback transactions) or other
sale of assets or (b) the disposition of any securities by such Person or any of
its Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; (ii) any extraordinary or
nonrecurring item (but not loss), together with any related provision for taxes
on such extraordinary or nonrecurring gain (but not loss) and (iii) any interest
income, together with any related provision for taxes on such interest income.
"NET PROCEEDS" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (i) the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (ii) amounts required to be applied to the repayment of
Indebtedness (other than Indebtedness under the Credit Facility) secured by a
Lien on the asset or assets that were the subject of such Asset Sale, (iii)
amounts required to be paid to any Person (other than the Company or any
Restricted Subsidiary) owning a beneficial interest in the asset or assets that
were the subject of such Asset Sale, (iv) any reserve for adjustment in respect
of the sale price of such asset or assets established in accordance with GAAP
and (v) any adjustment for expenses of discontinuing any operations or line of
business or severance costs, in both cases associated with an Asset Sale;
provided that such adjustment does not exceed 15% of the aggregate cash
proceeds.
"NON-RECOURSE INDEBTEDNESS" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (A) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (B) is directly or indirectly liable (as a Subsidiary
Guarantor or otherwise) or (C) constitutes the lender; (ii) no default with
respect to which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of
9
the Company or any of its Restricted Subsidiaries to declare a default on such
other Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity and (iii) as to which the lenders have been
notified in writing that they will not have any recourse to the stock or assets
of the Company or any of its Restricted Subsidiaries.
"NON-RECOURSE PURCHASE MONEY INDEBTEDNESS" means Indebtedness or that
portion of Indebtedness of the Company or any Restricted Subsidiary incurred in
connection with the acquisition by the Company or such Restricted Subsidiary,
subsequent to the Issue Date, of any property or assets and as to which (i) the
holders of such Indebtedness agree that they will look solely to the property or
assets so acquired (or, in the case of the acquisition of all of the outstanding
Capital Stock of a Person, the underlying properties and assets of such Person
at the time of such acquisition, including proceeds thereof) and securing such
Indebtedness for payment on or in respect of such Indebtedness, and neither the
Company nor any Restricted Subsidiary (A) provides credit support, including any
undertaking, agreement or instrument that would constitute Indebtedness or (B)
is directly or indirectly liable for such Indebtedness and (ii) no default with
respect to such Indebtedness would permit (after notice or passage of time or
both), according to the terms thereof, any holder of any Indebtedness of the
Company or a Restricted Subsidiary to declare a default on such Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity; and, PROVIDED HOWEVER, that any portion of the purchase price of such
property or assets that is not financed through the incurrence of such
Indebtedness, shall be deemed to be a "Restricted Investment" under this
Indenture and shall only be permitted to be expended by the Company or any
Restricted Subsidiary to the extent that the Company would be permitted to make
a Restricted Payment in such amount under the terms of Section 4.7 hereof.
"NOTE CUSTODIAN" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chief Executive
Officer, President, Chief Financial Officer, Treasurer, Secretary or any Vice
President of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed by two Officers, at
least one of whom shall be the principal executive officer, principal accounting
officer or principal financial officer of the Company, that meets the
requirements of Section 11.5 hereof.
"OIL SERVICE BUSINESS" means any businesses related to providing
services for the drilling for, or exploration and production of, oil, gas or
other hydrocarbons, including, but not limited to, (i) the well servicing
business, (ii) liquid services and (iii) production services.
"OPINION OF COUNSEL" means an Opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.5 hereof. The counsel may be an employee of or counsel to the Company.
"PERMITTED INVESTMENTS" means any of the following: (i) Investments in
Cash Equivalents; (ii) Investments in the Company or any of its Wholly Owned
Restricted Subsidiaries (including repurchases of any of the Notes on the open
market or as otherwise permitted by this Indenture); (iii) Investments by the
Company or any of its Restricted Subsidiaries in another Person, if as a result
10
of such Investment (A) such other Person becomes a Wholly Owned Restricted
Subsidiary or (B) such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its properties and assets to,
the Company or a Wholly Owned Restricted Subsidiary; (iv) Investments permitted
under Section 4.10 hereto; (v) Investments made in the ordinary course of
business in prepaid expenses, lease, utility, workers' compensation, performance
and other similar deposits; (vi) Investments in stock, obligations or securities
received in, settlement of debts owing to the Company or any Restricted
Subsidiary as a result of bankruptcy or insolvency proceedings or upon the
foreclosure, perfection or enforcement of any Lien in favor of the Company or
any Restricted Subsidiary, in each case as to debt owing to the Company or any
Restricted Subsidiary that arose in the ordinary course of business of the
Company or any such Restricted Subsidiary, PROVIDED that any stocks, obligations
or securities received in settlement of debts that arose in the ordinary course
of business (and received other than as a result of bankruptcy or insolvency
proceedings or upon foreclosure, perfection or enforcement of any Lien) that
are, within 30 days of receipt, converted into cash or Cash Equivalents shall be
treated as having been cash or Cash Equivalents at the time received and (vii)
other Investments in joint ventures, corporations, limited liability companies
or partnerships formed with or organized by third Persons, which joint ventures,
corporations, limited liability companies or partnerships, engage in the Oil
Service Business and are not Unrestricted Subsidiaries at the time of such
Investment, provided all such Investments do not, in the aggregate, exceed $10.0
million.
"PERMITTED LIENS" means the following types of Liens:
(i) Liens existing as of the Issue Date;
(ii) Liens securing the Notes or the Subsidiary
Guarantees;
(iii) Liens in favor of the Company;
(iv) Liens securing Indebtedness that constitutes
Permitted Indebtedness pursuant to clause (i), (ii) or (iv) of the
definition of "Permitted Indebtedness" included in Section 4.9 hereof;
(v) Liens for taxes, assessments and governmental
charges or claims either (A) not delinquent or (B) contested in good
faith by appropriate proceedings and as to which the Company or its
Restricted Subsidiaries shall have set aside on its books such reserves
as may be required pursuant to GAAP;
(vi) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
Liens imposed by law incurred in the ordinary course of business for
sums not delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by GAAP shall
have been made in respect thereof;
(vii) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure
the payment or performance of tenders, statutory or regulatory
obligations, surety and appeal bonds, bids, government contracts and
leases, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
11
(viii) judgment Liens not giving rise to an Event of
Default so long as 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;
(ix) any interest or title of a lessor under any Capital
Lease Obligation or operating lease;
(x) Liens securing Non-Recourse Purchase Money
Indebtedness and other purchase money Liens; PROVIDED, HOWEVER, that (i)
the related Non-Recourse Purchase Money Indebtedness or other purchase
money Indebtedness shall not be secured by any property or assets of the
Company or any Restricted Subsidiary other than the property or assets
so acquired and any proceeds therefrom and (ii) the Lien securing any
such Indebtedness shall be created within 90 days of such acquisition;
(xi) Liens securing obligations under or in respect of
either Currency Hedge Obligations or Interest Rate Protection
Obligations;
(xii) Liens upon specific items of inventory or other
goods of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(xiii) Liens securing reimbursement obligations with
respect to commercial letters of credit that encumber documents and
other property or assets relating to such letters of credit and products
and proceeds thereof; and
(xiv) Liens encumbering deposits made to secure
obligations arising from statutory, regulatory, contractual or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off.
"PERMITTED REFINANCING INDEBTEDNESS" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
PROVIDED that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount (or
accreted value, if applicable) of the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith); (ii) such Permitted Refinancing Indebtedness
has a final maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded and (iv)
with respect to any such Indebtedness of the Company being extended, refinanced,
renewed, replaced, defeased or refunded, such Permitted Refinancing Indebtedness
shall not be incurred by any Restricted Subsidiary.
12
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PUBLIC EQUITY OFFERING" means an underwritten offer and sale of common
stock of the Company pursuant to a registration statement that has been declared
effective by the Commission pursuant to the Securities Act (other than a
registration statement on Form S-8 or otherwise relating to equity securities
issuable under any employee benefit plan of the Company) or a private sale in
which the Company is obligated to publicly register such common stock for resale
within 120 days of such sale.
"QUALIFIED CAPITAL STOCK" of any Person means any and all Capital Stock
of such Person other than Disqualified Stock.
"RATING AGENCIES" means Standard and Poor's and ▇▇▇▇▇'▇, or any
successor to the respective rating agency businesses thereof.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, means any
officer within the corporate trust department 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.
"RESTRICTED INVESTMENT" means (without duplication) (i) the designation
of a Subsidiary as an Unrestricted Subsidiary in the manner described in the
definition of "Unrestricted Subsidiary", (ii) any Investment other than a
Permitted Investment and (iii) any amount constituting a "Restricted Investment"
as contemplated in the definition of "Non-Recourse Purchase Money Indebtedness".
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SIGNIFICANT SUBSIDIARY" means any (i) Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof, and (ii) any other Subsidiary that contributed more than 5% of
the Company's Consolidated Cash Flow for the most recent four fiscal quarters
for which financial statements are available.
"STANDARD AND POOR'S" means Standard and Poor's Ratings Group, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and any successor to the rating
agency business thereof.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Notes or the Subsidiary Guarantees, as the case may be.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Voting Stock is at the time owned or controlled, directly or
indirectly, by such Person of one or more of the other Subsidiaries of that
13
Person (or a combination thereof) and (ii) any partnership (A) the sole general
partner or the managing general partner of which is such Person or a Subsidiary
of such Person or (B) the only general partners of which are such Person or of
one or more Subsidiaries of such Person (or any combination thereof).
"SUBSIDIARY GUARANTORS" means each of (i) the Company's Significant
Subsidiaries on the Issue Date or any other Restricted Subsidiary that provides
a guarantee under the Credit Facility, (ii) any other Subsidiary that executes a
Subsidiary Guarantee in accordance with Article 10 hereof and (iii) their
respective successors and assigns, as required under Article 10 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA, except as provided in Section 9.3 hereof.
"TRUSTEE" means the party named as such above until a successor replaces
it in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary (or any successor to any
of them) that is designated by the Board of Directors as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors; but only to the
extent that such Subsidiary (i) has no Indebtedness other than Non-Recourse
Indebtedness; (ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or understanding
are no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of the
Company; (iii) is a Person with respect to which neither the Company nor any of
its Restricted Subsidiaries has any direct or indirect obligation (A) to
subscribe for additional Equity Interests or (B) to maintain or preserve such
Person's financial condition or to cause such Person to achieve any specified
levels of operating results and (iv) has not guaranteed or otherwise directly or
indirectly provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries. Any such designation by the Board of Directors
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
the resolution of the Board of Directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.7 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.9 hereof, the Company shall be in
default of such Section). The Board of Directors may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; PROVIDED that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.9 hereof and (ii) no Default or Event of Default
would be in existence following such designation.
"VOTING STOCK" means, with respect to any specified Person, Capital
Stock with voting power, under ordinary circumstances and without regard to the
occurrence of any contingency, to elect the directors or other managers or
trustees of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (A) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal,
14
including payment at final maturity, in respect thereof, by (B) the number of
years (calculated to the nearest one-twelfth) that will elapse between such date
and the making of such payment, by (ii) the then outstanding principal amount of
such Indebtedness.
"WHOLLY OWNED RESTRICTED SUBSIDIARY" means any Restricted Subsidiary to
the extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be partially
owned by the government of such foreign jurisdiction or individual or corporate
citizens of such foreign jurisdiction in order for such Restricted Subsidiary to
transact business in such foreign jurisdiction, PROVIDED that the Company,
directly or indirectly, owns the remaining Capital Stock or ownership interests
in such Restricted Subsidiary and, by contract or otherwise, controls the
management and business of such Restricted Subsidiary and derives the economic
benefits of ownership of such Restricted Subsidiary to substantially the same
extent as if such Restricted Subsidiary were a wholly owned Subsidiary.
"WHOLLY OWNED SUBSIDIARY" means any Subsidiary to the extent (i) all of
the Capital Stock or other ownership interests in such Subsidiary, other than
any directors' qualifying shares mandated by applicable law, is owned directly
or indirectly by the Company or (ii) such Subsidiary is organized in a foreign
jurisdiction and is required by the applicable laws and regulations of such
foreign jurisdiction to be partially owned by the government of such foreign
jurisdiction or individual or corporate citizens of such foreign jurisdiction in
order for such Subsidiary to transact business in such foreign jurisdiction,
provided that the Company, directly or indirectly, owns the remaining Capital
Stock or ownership interests in such Subsidiary and, by contract or otherwise,
controls the management and business of such Subsidiary and derives the economic
benefits of ownership of such Subsidiary to substantially the same extent as if
such Subsidiary were a wholly owned Subsidiary.
"WORKING LINE" means the loan facility under the credit agreement, dated
February 20, 1997, between the Company and the Frost National Bank for the
purposes of supporting accounts receivable, funding letters of credit and
providing for working capital needs, as amended, modified, supplemented,
extended, restated or renewed from time to time.
SECTION 1.2 OTHER DEFINITIONS.
DEFINED IN
TERM SECTION
"Adjusted Net Assets"..................... 10.7
"Asset Sale".............................. 4.10
"Asset Sale Offer"........................ 4.10
"Asset Sale Offer Payment"................ 3.9
"Asset Sale Offer Purchase Date".......... 3.9
"Asset Sale Offer Trigger Date"........... 4.10
"Benefitted Party"........................ 10.1
"Change of Control Offer"................. 4.15
"Change of Control Payment"............... 4.15
"Change of Control Payment Date".......... 4.15
"Covenant Defeasance"..................... 8.3
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"DTC" ................................... 2.3
"Event of Default"........................ 6.1
"Excess Proceeds"......................... 4.10
"Funding Guarantor"....................... 10.7
"incur"................................... 4.9
"Interest Payment Date"................... Exhibit A
"Legal Defeasance"........................ 8.2
"Maximum Bank Facility Amount"............ 4.9
"Offer Amount"............................ 3.9
"Offer Period"............................ 3.9
"Paying Agent"............................ 2.3
"Payment Default"......................... 6.1
"Permitted Indebtedness".................. 4.9
"refinancing"............................. 4.9
"Registrar"............................... 2.3
"Restricted Payments"..................... 4.7
"Subsidiary Guarantees"................... 10.1
"transfer"................................ 4.10
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, any Subsidiary Guarantor and
any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
SECTION 1.4 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP;
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(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in
the plural include the singular;
(v) provisions apply to successive events and
transactions; and
(vi) references to sections of or rules under the
Securities Act or the Exchange Act shall be deemed to include
substitute, replacement of successor sections or rules adopted by the
Commission from time to time.
ARTICLE 2
THE NOTES
SECTION 2.1 FORM AND DATING.
The Notes, the notation thereon relating to the Subsidiary Guarantees
and the Trustee's certificate of authentication shall 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 shall be dated the date
of its authentication. The Notes shall be issued in minimum denominations of
$1,000 and integral multiples thereof.
The terms and provisions contained in the form of the Notes and the
notation thereon relating to the Subsidiary Guarantees annexed hereto as Exhibit
A and the Subsidiary Guarantees shall constitute, and are hereby expressly made,
a part of this Indenture and 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.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including the text referred to in footnotes 1 and 2
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without including the text referred to in
footnotes 1 and 2 thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. 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 Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
SECTION 2.2 EXECUTION AND AUTHENTICATION.
One Officer shall 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 shall nevertheless be
valid. Each Subsidiary Guarantor shall execute its Subsidiary Guarantee in the
manner set forth in Section 10.8.
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A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee shall authenticate the Notes for original issue up to the
aggregate principal amount of $140,000,000. The aggregate principal amount of
Notes outstanding at any time may not exceed $140,000,000 except as provided in
Section 2.7 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 the Company or
an Affiliate of the Company.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall 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 shall 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 shall 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 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 Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.4 PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall 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 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 thereof) shall have no
further liability for the money. If the Company or a Subsidiary thereof acts as
Paying Agent, it shall 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 shall serve
as Paying Agent for the Notes.
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SECTION 2.5 HOLDER LISTS.
The Trustee shall 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 and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall 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 and the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.6 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES. When Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive Notes; or
(y) to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange
shall be duly endorsed or accompanied by a written instruction of transfer in
form satisfactory to the Registrar duly executed by such Holder or by his
attorney, duly authorized in writing.
(b) TRANSFER OF A DEFINITIVE NOTE FOR A BENEFICIAL INTEREST IN A
GLOBAL NOTE. A Definitive Note may not be exchanged for a beneficial interest in
a Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with written instructions from the Holder thereof directing the Trustee
to make, or to direct the Note Custodian to make, an endorsement on the Global
Note to reflect an increase in the aggregate principal amount of the Global
Note, in which case the Trustee shall cancel such Definitive Note in accordance
with Section 2.11 hereof and cause, or direct the Note Custodian to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Note Custodian, the aggregate principal amount of the Global
Note to be increased accordingly. If no Global Note is then outstanding, the
Company shall issue and, upon receipt of an authentication order in accordance
with Section 2.2 hereof, the Trustee shall authenticate,a new Global Note in the
appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL NOTE. The transfer and
exchange of the Global Note or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
(d) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL NOTE FOR A
DEFINITIVE NOTE.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a beneficial
interest in a Global
19
Note, the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depository and the Note Custodian, cause
the aggregate principal amount of a Global Note to be reduced
accordingly and, following such reduction, the Company shall execute and
the Trustee shall authenticate and deliver to the transferee a
Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.6(d) shall be
registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes
are so registered.
(e) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL NOTE.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor ▇▇▇▇▇▇▇▇▇▇ or
a nominee of such successor Depository.
(f) AUTHENTICATION OF DEFINITIVE NOTES IN ABSENCE OF DEPOSITORY.
If at any time:
(i) the Depository for the Notes notifies the Company that
the Depository is unwilling or unable to continue as Depository for the
Global Note and a successor Depository for the Global Note is not
appointed by the Company within 90 days after delivery of such notice;
or
(ii) the Company, at its discretion, notifies the Trustee
in writing that it elects to cause the issuance of Definitive Notes
under this Indenture,
then the Company shall execute, and the Trustee shall authenticate and deliver,
Definitive Notes in an aggregate principal amount equal to the principal amount
of the Global Note in exchange for such Global Note.
(g) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTE. At such time
as all beneficial interests in a Global Note have been exchanged for Definitive
Notes, redeemed, repurchased or canceled, the Global Note shall be returned to
or retained and canceled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or canceled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive
Notes and Global Notes at the Registrar's request.
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(ii) No service charge shall be made to a Holder 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 3.7, 3.9, 4.10, 4.15 and 9.5 hereto).
(iii) The Registrar shall not be required to register the
transfer or exchange of any Note selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the
Definitive Notes or Global Notes surrendered upon such registration of
transfer or exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.2 hereof and ending at the close of
business on the day of selection;
(B) to register the transfer of or to exchange any
Note so 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.
(i) 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 neither the Trustee, any Agent nor the Company shall be affected by notice
to the contrary.
SECTION 2.7 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 shall issue and the Trustee shall 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
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
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SECTION 2.8 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 redeemed, those reductions in the interest in a Global Note effected by
the Trustee in accordance with the provisions hereof, and those described in
this Section as not outstanding. Except as set forth in Section 2.9 hereof, a
Note does not cease to be outstanding because the Company, any of the Subsidiary
Guarantors or any Affiliate of the Company or any of the Subsidiary Guarantors
holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.1
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 thereof) 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 shall be deemed to be no longer outstanding and shall cease to accrue
interest.
SECTION 2.9 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, any of the Subsidiary Guarantors or any Affiliate of the Company or any
of the Subsidiary Guarantors, shall be considered as though not outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, waiver or consent, only Notes that
the Trustee actually knows are so owned shall be so disregarded.
SECTION 2.10 TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers thereof. Temporary Notes shall be substantially
in the form of Definitive Notes but may have variations that the Company
considers appropriate for temporary Notes and as shall be reasonably acceptable
to the Trustee. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Definitive Notes or the Global Note in exchange for
temporary Notes.
Holders of temporary Notes shall 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 shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, redemption, replacement or cancellation and shall
destroy such canceled Notes. The Trustee shall provide a certificate of
destruction to the Company from time to time, at the written request of 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. If the Company or
any Subsidiary Guarantor
22
shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12 DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the Notes, it shall
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 the rate provided in the Notes
and in Section 4.1 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
shall 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
the written request of the Company, the Trustee in the name and at the expense
of the Company) shall mail or cause to be mailed 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 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 notices of
redemption as a convenience to 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 as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Notes, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Company shall promptly notify the Trustee of any
change in the CUSIP numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.7 hereof, it shall furnish to the Trustee, at
least 30 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed among the Holders of the Notes in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed or, if the Notes are not so listed, on a
pro rata basis, by lot or in accordance with any other method the Trustee
considers fair and appropriate; provided that no Notes of $1,000 or less will be
redeemed in part. In the event that less than all of the
23
Notes are to be redeemed by lot, the particular Notes to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding Notes not
previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder shall be redeemed. Except as
provided in the preceding sentence, provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
The provisions of the two preceding paragraphs of this Section 3.2 shall
not apply with respect to any redemption affecting only a Global Note, whether
such Global Note is to be redeemed in whole or in part. In case of any such
redemption in part, the unredeemed portion of the principal amount of the Global
Note shall be in an authorized denomination.
SECTION 3.3 NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.9 hereof, at least 30 days but
not more than 60 days before a redemption date, the Company shall mail or cause
to be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address. Failure to receive such
notice or any defect in the notice to any such Holder shall not affect the
validity of the proceedings for the redemption of any other Notes or portion
thereof.
The notice shall identify the Notes to be redeemed (including CUSIP
number) and shall state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Note is being redeemed in part, the portion
of the principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(iv) the name and address of the Paying Agent;
(v) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(vi) that, unless the Company's defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(vii) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(viii) 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.
24
If any of the Notes to be redeemed is in the form of a Global Note, then
the Company shall modify such notice to the extent necessary to accord with the
procedures of the Depository applicable to redemption.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the
Company shall have delivered to the Trustee, at least 45 days (unless the
Trustee and the Company agree to a shorter period) prior to the redemption date,
an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.3
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.
One Business Day prior to the redemption date, the Company shall deposit
with the Trustee or with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.4 hereof)
money sufficient to pay the redemption price of and accrued interest on all
Notes to be redeemed on that date. The Trustee or the Paying Agent shall
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 price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph,
on and after the redemption date, interest shall cease to accrue on the Notes or
the portions of Notes called for redemption. If a Note is redeemed on or after
an interest record date but on or prior to the related interest payment date,
then any accrued and unpaid interest 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 shall not be so paid upon surrender for redemption
because of the failure of the Company to comply with the preceding paragraph,
interest shall be paid on the unpaid principal, from the redemption 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 Note and in
Section 4.1 hereof.
SECTION 3.6 NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
SECTION 3.7 OPTIONAL REDEMPTION.
(a) The Notes will not be redeemable at the Company's option
prior to February 1, 2002. Thereafter, the Notes will be subject to redemption
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest thereon to
the applicable
25
redemption date, if redeemed during the 12- month period beginning on February
1, of the years indicated below:
YEAR PERCENTAGE
2002.................................................. 104.6875%
2003.................................................. 103.1250%
2004.................................................. 101.5625%
2005 and thereafter................................... 100.0000%
(b) Notwithstanding the foregoing, at any time on or prior to
February 1, 2000, the Company may redeem up to an aggregate of $49.0 million
principal amount of Notes at a redemption price of 109.375% of the principal
amount thereof, plus accrued and unpaid interest thereon to the redemption date,
with the net proceeds of a Public Equity Offering; PROVIDED that at least $91.0
million in aggregate principal amount of Notes remain outstanding immediately
after the occurrence of such redemption; and, PROVIDED, FURTHER; that such
redemption shall occur within 60 days of the date of the closing of such Public
Equity Offering.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Sections 3.1 through 3.6 hereof.
SECTION 3.8 MANDATORY REDEMPTION.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company
shall not be required to make mandatory redemption payments or sinking fund
payments with respect to the Notes.
SECTION 3.9 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an Asset Sale Offer, it shall follow the
procedures specified below.
(i) The Asset Sale Offer shall be made to all Holders and
shall remain open for a period of 20 Business Days following its
commencement and no longer, except to the extent that a longer period is
required by applicable law (the "OFFER PERIOD").
(ii) If the Asset Sale Offer Purchase Date is on or after
an interest record date and on or before the related interest payment
date, any accrued and unpaid interest thereon, if any, shall 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 shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
(iii) Within 10 days following any Asset Sale Offer
Trigger Date, the Company shall send, by first class mail, a notice to
each of the Holders at such Holder's registered address, with a copy to
the Trustee. The notice, which shall govern the terms of the Asset Sale
Offer, shall contain all instructions and materials necessary to enable
such Holders to tender Notes pursuant to the Asset Sale Offer, and shall
state:
26
(A) that the Asset Sale Offer Trigger Date has
occurred pursuant to Section 4.10 hereof and that the Company is
offering to purchase the maximum principal of Notes that may be
purchased out of the Excess Proceeds (the "OFFER AMOUNT") at an
offer price in cash in an amount equal to
100.0% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to date of purchase, which shall be a
Business Day (the "ASSET SALE OFFER PURCHASE DATE") that is not
earlier than 30 days nor later than 60 days from the date such
notice is mailed;
(B) the amount of accrued and unpaid interest, if
any, as of the Asset Sale Offer Purchase Date;
(C) that any Note subject to the Asset Sale Offer
not tendered shall continue to accrue interest;
(D) that, unless the Company defaults in the
payment of the purchase price for the Notes payable pursuant to
the Asset Sale Offer, any such Notes accepted for payment
pursuant to the Asset Sale Offer shall cease to accrue interest,
after the Asset Sale Offer Purchase Date;
(E) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may only elect to have all of
such Note purchased (subject to the provisions of Section
3.9(a)(iii)(H) hereof) and may not elect to have only a portion
of such Note purchased;
(F) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer shall be required to surrender
the Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note completed to the Company or
a Paying Agent at the address specified in the notice at least
three Business Days before the Purchase Date;
(G) that Holders shall be entitled to withdraw
their election if the Company or the Paying Agent, as the case
may be, receives, not later than the expiration of the Offer
Period, a 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 ▇▇▇▇▇▇ is
withdrawing his election to have such Note purchased;
(H) that, if the aggregate principal amount of
Notes surrendered by Holders exceeds the Offer Amount or less
than all of the Notes tendered pursuant to the Asset Sale Offer
are accepted for payment by the Company for any reason consistent
with this Indenture, the Trustee shall select the Notes to be
purchased in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are
listed or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee deems fair and
appropriate; PROVIDED that Notes accepted for payment in part
will only be purchased in integral multiples of $1,000; and
(I) that Holders whose Notes were purchased only
in part shall be issued new Notes equal in principal amount to
the unpurchased portion of the Notes surrendered.
27
If any of the Notes subject to an Asset Sale Offer is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to repurchases.
(b) On the Asset Sale Offer Purchase Date, the Company shall: (i)
accept for payment the maximum principal amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer that can be purchased out of the
Excess Proceeds, (ii) deposit with the Paying Agent the aggregate purchase price
of all Notes or portions thereof accepted for payment and (iii) deliver or cause
to be delivered to the Trustee all Notes tendered pursuant to the Asset Sale
Offer. The Company or the Paying Agent, as the case may be, shall promptly mail
to each Holder of Notes or portions thereof accepted for payment an amount equal
to the purchase price for such Notes and the Trustee shall promptly authenticate
and mail to any such Holder of Notes accepted for payment in part a new Note
equal in principal amount to any unpurchased portion of the Notes, and any Note
not accepted for payment in whole or in part shall be promptly returned to the
Holder of such Note. The Company shall announce the results of the Asset Sale
Offer to Holders of the Notes on or as soon as practicable after the Asset Sale
Offer Purchase Date. The Company shall comply with the requirements of Rule
14e-1 under the Exchange Act, and any other securities laws or regulations, if
applicable, in connection with any Asset Sale Offer.
(c) Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Company shall 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 the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 2:00 p.m. Eastern Time one Business Day prior to the due date money
deposited by the Company in immediately available funds and designated for and
sufficient to pay all principal, premium, if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
1.0% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the City of New
York, 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 presented for
payment, 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 shall give prompt written notice to the
Trustee of the location, and any change
28
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 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; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall 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 2.3
hereof.
SECTION 4.3 REPORTS.
(a) Whether or not required by the rules and regulations of the
Commission, so long as any Notes are outstanding, the Company shall furnish to
the Holders of Notes (i) either the actual Forms 10-Q and 10-K filed with the
Commission, or all quarterly and annual financial information that would be
required to be contained in a filing with the Commission 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" that
describes the consolidated financial condition and results of operations of the
Company and, with respect to the annual information only, a report thereon by
the Company's certified independent accountants and (ii) either any actual Form
8-K filed with the Commission, or all information that would be required to be
contained in a filing with the Commission on Form 8-K if the Company were
required to file such Form. In addition, whether or not required by the rules
and regulations of the Commission, the Company shall file a copy of all such
information and reports with the Commission for public availability (unless the
Commission will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. The Company shall at
all times comply with TIA ss. 314(a).
(b) Delivery of such reports, information and documents 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'
compliance with any of the covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.4 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
each and every covenant contained in 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 shall have occurred and is
continuing, describing all such Defaults or Events of Default of which he or
she may
29
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 no event has
occurred and remains in existence by reason of which payments on account of the
principal of or interest, if any, on the Notes is prohibited or if such event
has occurred, a description of the event and what action the Company is taking
or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.3(a) above shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, 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 4.5 TAXES.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
SECTION 4.6 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 wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
SECTION 4.7 RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly Owned Restricted Subsidiary
of the Company); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any
30
Affiliate of the Company (other than (A) any such Equity Interests owned by the
Company or any Wholly Owned Restricted Subsidiary of the Company that is a
Subsidiary Guarantor and (B) Employee Stock Repurchases); (iii) make any
principal payment on, or purchase, redeem, defease or otherwise acquire or
retire for value any Subordinated Indebtedness (other than $3.75 million of
Subordinated Indebtedness which is Existing Indebtedness, provided that such
Subordinated Indebtedness is redeemed or repaid at or below par), except in
accordance with the mandatory redemption or repayment provisions set forth in
the documentation governing such Indebtedness or (iv) make any Restricted
Investment (all such payments and other actions set forth in clauses (i) through
(iv) above being collectively referred to as "RESTRICTED PAYMENTS"), unless, at
the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
(in addition to Permitted Indebtedness) pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.9(a) hereof; and
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Issue Date (excluding Restricted Payments
permitted by clauses (x) and (y) of the next succeeding paragraph, but
including the Restricted Payment permitted by clause (z) of the next
succeeding paragraph), is less than the sum of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the Issue Date to the end of the Company's most
recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate Net Equity Proceeds (A)
received by the Company from the issue or sale, subsequent to the Issue
Date, of Qualified Capital Stock of the Company or (B) of any other
Equity Interests or debt securities of the Company that have been issued
subsequent to the Issue Date and that have been converted into such
Qualified Capital Stock (other than any Qualified Capital Stock sold to
a Restricted Subsidiary of the Company) plus (iii) to the extent not
otherwise included in Consolidated Net Income, the net reduction in
Investments in Unrestricted Subsidiaries resulting from dividends,
repayments of loans or advances, or other transfers of assets, in each
case to the Company or a Restricted Subsidiary after the Issue Date from
any Unrestricted Subsidiary or from the redesignation of an Unrestricted
Subsidiary as a Restricted Subsidiary (valued as provided below), plus
(iv) $10.0 million.
The foregoing provisions shall not prohibit any of the following: (w)
the payment of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have complied with
the provisions of this Indenture; (x) the redemption, repurchase, retirement or
other acquisition of any Equity Interests of the Company in exchange for, or out
of the Net Equity Proceeds of, the substantially concurrent sale (other than to
a Restricted Subsidiary of the Company) of Qualified Capital Stock of the
Company (other than any Disqualified Stock); PROVIDED that the amount of any
such Net Equity Proceeds that are utilized for any such redemption, repurchase,
retirement or other acquisition shall be excluded from clause (c)(ii) of the
preceding paragraph and (y) the defeasance, redemption or repurchase of
Subordinated Indebtedness with the net cash proceeds from an incurrence of
Permitted
31
Refinancing Indebtedness or the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of Qualified Capital Stock of the Company;
PROVIDED that the amount of any such net cash proceeds that are utilized for any
such redemption, repurchase, retirement or other acquisition shall be excluded
from clause (c)(ii) of the preceding paragraph.
For purposes of the foregoing provisions, the amount of any Restricted
Payment (other than cash) shall be the fair market value (evidenced by a
resolution of the Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) on the date of the Restricted Payment of the asset(s)
proposed to be transferred by the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than five days
following the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.7 were computed, which calculations may be based upon the
Company's latest available financial statements.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would be permitted by the provisions
of this Section 4.7 and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. For purposes of making such
determination, all outstanding Investments by the Company and its Restricted
Subsidiaries (except to the extent repaid in cash prior to such designation) in
the Restricted Subsidiary so designated will be deemed to be Restricted Payments
at the time of such designation and will reduce the amount available for
Restricted Payments under paragraph (c) of this Section 4.7. All such
outstanding Investments will be deemed to constitute Investments in an amount
equal to the Fair Market Value of such Investments at the time of such
designation.
SECTION 4.8 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits or (b) pay any indebtedness owed to the Company or any of its Restricted
Subsidiaries, (ii) make loans or advances to the Company or any of its
Restricted Subsidiaries or (iii) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except for such encumbrances or
restrictions existing under or by reason of (r) Existing Indebtedness as in
effect on the Issue Date, (s) the Credit Facility as in effect as of the Issue
Date, and any amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings thereof, PROVIDED that
such amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacement or refinancings are no more restrictive with respect to
such dividend and other payment restrictions than those contained in the Credit
Facility as in effect on the Issue Date, (t) this Indenture and the Notes, (u)
applicable law, (v) any instrument governing Indebtedness or Capital Stock of a
Person acquired by the Company or any of its Restricted Subsidiaries as in
effect at the time of such acquisition (except to the extent such Indebtedness
was incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, PROVIDED that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of Section 4.9 hereof to be incurred,
(w) by reason of customary non-assignment provisions in leases entered into in
the ordinary course of business and customary provisions in other agreements
that restrict assignment of such agreements or rights thereunder, (x) customary
restrictions contained in asset sale
32
agreements limiting the transfer of such assets pending the closing of such
sale, (y) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, or (z) Permitted Refinancing
Indebtedness with respect to any indebtedness referred to in clauses (r), (t)
and (v) above, PROVIDED that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
SECTION 4.9 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED EQUITY.
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "INCUR") any
Indebtedness (including Acquired Indebtedness but excluding any Permitted
Indebtedness) and that the Company will not issue any Disqualified Stock and
will not permit any of its Restricted Subsidiaries to issue any shares of
preferred stock; PROVIDED, HOWEVER, that the Company may incur Indebtedness
(including Acquired Indebtedness) or issue shares of Disqualified Stock, and any
Restricted Subsidiary may incur Indebtedness (including Acquired Indebtedness),
if the Fixed Charge Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
or such Disqualified Stock is issued would have been at least (i) 2.0 to 1.0 if
such date occurs on or after the Issue Date and on or prior to March 31, 1998,
or (ii) 2.25 to 1.0 if such date occurs after March 31, 1998, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
(b) The Company shall not, and shall not permit any Subsidiary
Guarantor to, directly or indirectly, in any event incur any Indebtedness that
by its terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of that Company or such Subsidiary
Guarantor, as the case may be, unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly
subordinate to the Notes or the Subsidiary Guarantee of such Subsidiary
Guarantor, as the case may be, to the same extent and in the same manner as such
Indebtedness is subordinated pursuant to subordination provisions that are most
favorable to the holders of any other Indebtedness of the Company or such
Subsidiary Guarantor, as the case may be.
The foregoing provisions shall not apply to the incurrence of any of the
following Indebtedness (collectively, "PERMITTED INDEBTEDNESS"):
(i) Indebtedness (and any guarantee thereof) under the
Working Line in an aggregate principal amount at any one time
outstanding not to exceed the greater of (A) $35.0 million, less any
amounts derived from Asset Sales and applied to the permanent reduction
of the Indebtedness thereunder as contemplated by Section 4.10 hereof or
(B) 80% of the Company's Acceptable Accounts Receivable (as defined in
the Working Line) (the "MAXIMUM BANK FACILITY AMOUNT"), and any
renewals, amendments, extensions, supplements, modifications, deferrals,
refinancing or replacements (each, for purposes of this clause (i), a
"REFINANCING") thereof, including any successive refinancing thereof, so
long as the aggregate principal amount of any such new Indebtedness,
together with the aggregate principal amount of all other Indebtedness
outstanding pursuant to this clause (i), shall not at any one time
exceed the Maximum Bank Facility Amount;
33
(ii) Indebtedness under the Acquisition Line in an
aggregate principal amount at any one time outstanding not to exceed
$10.0 million, and any renewals, amendments, extensions, supplements,
modifications, deferrals, refinancing or replacements (each, for
purposes of this clause (ii), a "REFINANCING") thereof, including any
successive refinancing thereof, so long as the aggregate principal
amount of any such new Indebtedness hereunder, together with the
aggregate principal amount of all other Indebtedness outstanding
pursuant to this clause (ii), shall not at any one time exceed $10.0
million;
(iii) Indebtedness under the Notes;
(iv) Indebtedness under any Existing Indebtedness and any
Indebtedness under Letters of Credit existing on the Issue Date;
(v) Indebtedness under Interest Rate Protection
Obligations, provided that (A) such Interest Rate Protection Obligations
are related to payment obligations on Permitted Indebtedness or
Indebtedness otherwise permitted by Section 4.9(a) hereof and (B) the
notional principal amount of such Interest Rate Protection Obligations
does not exceed the principal amount of such Indebtedness to which such
Interest Rate Protection Obligations relate;
(vi) Indebtedness under Currency Hedge Obligations,
provided that (A) such Currency Hedge Obligations are related to payment
obligations on Permitted Indebtedness or Indebtedness otherwise
permitted by Section 4.9(a) hereof or to the foreign currency cash flows
reasonably expected to be generated by the Company and its Restricted
Subsidiaries and (B) the notional principal amount of such Currency
Hedge Obligations does not exceed the principal amount of such
Indebtedness and the amount of such foreign currency cash flows to which
such Currency Hedge Obligations relate;
(vii) the Subsidiary Guarantees of the Notes (and any
assumption of the obligations guaranteed thereby);
(viii) Indebtedness of the Company to a Wholly Owned
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary of
the Company to the Company or a Wholly Owned Restricted Subsidiary;
PROVIDED, HOWEVER, that upon any subsequent issuance or transfer of any
Capital Stock or any other event that results in any such Wholly Owned
Restricted Subsidiary ceasing to be a Wholly Owned Restricted Subsidiary
or any other subsequent transfer of any such Indebtedness (except to the
Company or a Wholly Owned Restricted Subsidiary), such Indebtedness
shall be deemed, in each case, to be incurred and shall be treated as an
incurrence for purposes of Section 4.9(a) hereof at the time the Wholly
Owned Restricted Subsidiary in question ceased to be a Wholly Owned
Restricted Subsidiary or the time such subsequent transfer occurred;
(ix) Indebtedness in respect of bid, performance or surety
bonds issued for the account of the Company or any Restricted Subsidiary
thereof in the ordinary course of business, including guarantees or
obligations of the Company or any Restricted Subsidiary thereof with
respect to letters of credit supporting such bid, performance or surety
obligations (in each case other than for an obligation for money
borrowed);
34
(x) the incurrence by the Company or its Restricted
Subsidiaries of Non-Recourse Purchase Money Indebtedness;
(xi) any Permitted Refinancing Indebtedness incurred by
the Company or a Restricted Subsidiary of any Indebtedness incurred
pursuant to clause (iii) or (iv) of this Section 4.9(b), including any
successive refinancing by the Company or such Restricted Subsidiary;
(xii) Capital Lease Obligations in an aggregate amount not
in excess of $8.0 million at any one time outstanding; and
(xiii) any additional Indebtedness issued pursuant to one
or more credit agreements in an aggregate principal amount for all such
credit agreements not in excess of $5.0 million at any one time
outstanding and any guarantee thereof.
SECTION 4.10 ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary
to, sell, issue, convey, transfer, lease or otherwise dispose of, to any Person
other than the Company or any of its Restricted Subsidiaries (including, without
limitation, by means of a sale-and-leaseback transaction or a merger or
consolidation) (collectively, for purposes of this Section 4.10, a "TRANSFER"),
directly or indirectly, in one or a series of related transactions, (a) any
Capital Stock of any Restricted Subsidiary held by the Company or any other
Restricted Subsidiary, (b) all or substantially all of the properties and assets
of any division or line of business of the Company or any of its Restricted
Subsidiaries, (c) any Event of Loss or (d) any other properties or assets of the
Company or any of its Restricted Subsidiaries other than transfers of cash, Cash
Equivalents, accounts receivable, or properties or assets in the ordinary course
of business; PROVIDED that the sale, lease, conveyance or other disposition of
all or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries, taken as a whole, shall be governed by Sections 4.15
and/or 5.1 hereof and not by the provisions of this Section 4.10 (each of the
foregoing, an "ASSET SALE"), unless (i) the Company (or the Restricted
Subsidiary, as the case may be) receives consideration at the time of such Asset
Sale at least equal to the fair market value (evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed
of and (ii) at least 75% of the consideration therefor received by the Company
or such Restricted Subsidiary is in the form of cash or Cash Equivalents;
PROVIDED that the amount of (x) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or any
Restricted Subsidiary (other than contingent liabilities and liabilities that
are Subordinated Indebtedness or otherwise by their terms subordinated to the
Notes or the Subsidiary Guarantees) that are assumed by the transferee of any
such assets pursuant to a novation agreement that releases the Company or such
Restricted Subsidiary from further liability and (y) any notes or other
obligations received by the Company or any such Restricted Subsidiary from such
transferee that are converted by the Company or such Restricted Subsidiary into
cash within 180 days of closing such Asset Sale (to the extent of the cash
received), shall be deemed to be cash for purposes of this clause (ii).
Notwithstanding the foregoing, any of the following shall, not be deemed
an "Asset Sale": (i) any transfer of properties or assets to an Unrestricted
Subsidiary, if such transfer is permitted under Section 4.7 hereof; (ii) sales
of damaged, worn-out or obsolete equipment or assets that, in the Company's
reasonable judgment, are either (A) no longer used or (B) no
longer useful in the business
35
of the Company or its Restricted Subsidiaries; (iii) any lease of any property
entered into in the ordinary course of business and with respect to which the
Company or any Restricted Subsidiary is the lessor, except any such lease that
provides for the acquisition of such property by the lessee during or at the end
of the term thereof for an amount that is less than the fair market value
thereof at the time the right to acquire such property occurs; (iv) any trade or
exchange by the Company or any Restricted Subsidiary of one or more workover
rigs for one or more workover rigs owned or held by another Person, PROVIDED
that (A) the Fair Market Value of the workover rig or rigs traded or exchanged
by the Company or such Restricted Subsidiary (including any cash or Cash
Equivalents, not to exceed 15% of such Fair Market Value, to be delivered by the
Company or such Restricted Subsidiary) is reasonably equivalent to the Fair
Market Value of the workover rig or rigs (together with any cash or Cash
Equivalents, not to exceed 15% of such Fair Market Value) to be received by the
Company or such Restricted Subsidiary and (B) such exchange is approved by a
majority of the Disinterested Directors of the Company; (v) sales of inventory
in the ordinary course of business of the Company and any Subsidiary consistent
with past practices; (vi) the issuance by the Company of its Capital Stock;
(vii) a Restricted Payment permitted under the terms of Section 4.7 hereof and
(viii) any transfers that, but for this clause (viii), would be Asset Sales, if
(A) the Company elects to designate such transfers as not constituting Asset
Sales and (B) after giving effect to such transfers, the aggregate Fair Market
Value of the properties or assets transferred in such transaction or any such
series of related transactions so designated by the Company does not exceed
$500,000.
Within 365 days after the receipt of any Net Proceeds from any Asset
Sale, the Company may (i) apply all or any of the Net Proceeds therefrom to
repay Indebtedness (other than Subordinated Indebtedness) of the Company or any
Restricted Subsidiary, PROVIDED, in each case, that the related loan commitment
of any revolving credit facility or other borrowing (if any) is thereby
permanently reduced by the amount of such Indebtedness so repaid or (ii) invest
all or any part of the Net Proceeds thereof in properties and other capital
assets that replace the properties or other capital assets that were the subject
of such Asset Sale or in other properties or other capital assets that will be
used in the business of the Company and its Restricted Subsidiaries or in
entities engaged in such business, provided that in such latter instance such
entities become a Subsidiary Guarantor or Restricted Subsidiary, as applicable.
Pending the final application of any such Net Proceeds, the Company may
temporarily reduce borrowings under any revolving credit facility or otherwise
invest such Net Proceeds in any manner that is not prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as provided
in the first sentence of this paragraph shall be deemed to constitute "EXCESS
PROCEEDS". When the aggregate amount of Excess Proceeds equals or exceeds $15.0
million (the date of such occurrence being called the "ASSET SALE OFFER TRIGGER
DATE"), the Company shall make an offer to all Holders of Notes (an "ASSET SALE
OFFER") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds at an offer price in cash in an amount equal to 100%
of the principal amount thereof plus accrued and unpaid interest thereon to the
date of purchase in accordance with the procedures set forth in Section 3.9
hereof. To the extent that the aggregate amount of Notes tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the Company may use any
remaining Excess Proceeds for general corporate purposes. Upon completion of
such Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The Company shall not permit any Restricted Subsidiary to enter into or
suffer to exist any agreement that would place any restriction of any kind
(other than pursuant to law or regulation) on the ability of the Company to make
an Asset Sale Offer following any Asset Sale. The Company shall comply with Rule
14e-1 under the Exchange Act, and any other securities laws and regulations
36
thereunder, if applicable, in the event that an Asset Sale occurs and the
Company is required to purchase Notes pursuant to this Section 4.10.
SECTION 4.11 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, (a) sell, lease, transfer or otherwise dispose of any of its
properties, assets or securities to, (b) purchase or lease any property, assets
or securities from, (c) make any Investment in or (d) enter into or suffer to
exist any other transaction or series of related transactions with, or for the
benefit of, any Affiliate of the Company unless (i) such transaction or series
of transactions is on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that would be available in
a comparable arm's length transaction with an unrelated third party, (ii) with
respect to any one transaction or series of related transactions involving
aggregate payments in excess of $1.0 million, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (i) above and (iii) with respect to a
transaction or series of related transactions involving payments in excess of
$10.0 million, the Company delivers an Officers' Certificate to the Trustee
certifying that (A) such transaction or series of related transactions complies
with clause (i) above and (B) such transaction or series of related transactions
has been approved by a majority of the Disinterested Directors of the Company;
PROVIDED, HOWEVER, that the foregoing restriction shall not apply to (u) any
arrangements in effect on the Issue Date, (v) transactions between or among the
Company and its Wholly Owned Restricted Subsidiaries, (w) loans or advances to
officers, directors and employees of the Company or any Restricted Subsidiary
made in the ordinary course of business and consistent with past practices of
the Company and its Restricted Subsidiaries in an aggregate amount not to exceed
$1.0 million outstanding at any one time, (x) indemnities of officers, directors
and employees of the Company or any Restricted Subsidiary permitted by bylaw or
statutory provisions, (y) the payment of reasonable and customary regular fees
to directors of the Company or any of its Restricted Subsidiaries who are not
employees of the Company or any Affiliate and (z) the Company's employee
compensation and other benefit arrangements.
SECTION 4.12 LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, except for Permitted Liens, upon any of
their respective property or assets, whether now owned or acquired after the
Issue Date, or any income, profits or proceeds therefrom, to secure (i) any
Indebtedness of the Company or such Restricted Subsidiary (if it is not also a
Subsidiary Guarantor), unless prior to, or contemporaneously therewith, the
Notes are equally and ratably secured or (ii) any Indebtedness of any Subsidiary
Guarantor, unless prior to, or contemporaneously therewith, the Subsidiary
Guarantees are equally and ratably secured; PROVIDED, HOWEVER, that if such
Indebtedness is expressly subordinated to the Notes or the Subsidiary
Guarantees, the Lien securing such Indebtedness will be subordinated and junior
to the Lien securing the Notes or the Subsidiary Guarantees, as the case may be,
with the same relative priority as such Indebtedness has with respect to the
Notes or the Subsidiary Guarantees. The foregoing covenant shall not apply to
any Lien securing Acquired Indebtedness, provided that any such Lien extends
only to the property or assets that were subject to such Lien prior to the
related acquisition by the Company or such Restricted Subsidiary and was not
created, incurred or assumed in contemplation of such transaction.
37
SECTION 4.13 ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, or otherwise
dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary of the
Company to any Person (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company), unless (A) such transfer, conveyance, sale or other
disposition is of all the Capital Stock of such Wholly Owned Restricted
Subsidiary and (B) the cash Net Proceeds from such transfer, conveyance, sale or
other disposition are applied in accordance with Section 4.10 hereof and (ii)
will not permit any Wholly Owned Restricted Subsidiary of the Company to issue
any of its Equity Interests to any Person other than to the Company or a Wholly
Owned Restricted Subsidiary of the Company; except, in the case of both clauses
(i) and (ii) above, with respect to dispositions or issuances by a Wholly Owned
Restricted Subsidiary of the Company as contemplated in clauses (i) and (ii) of
the definition of "Wholly Owned Restricted Subsidiary" included in Section 1.1
hereof.
SECTION 4.14 SALE-AND-LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale-and-leaseback transaction; PROVIDED that
the Company or any Restricted Subsidiary, as applicable, may enter into a
sale-and-leaseback transaction if (i) the Company could have (A) incurred
Indebtedness in an amount equal to the Attributable Indebtedness relating to
such sale-and-leaseback transaction pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.9(a) hereof and (B) incurred a Lien to secure such
Indebtedness pursuant to Section 4.12 hereof; (ii) the gross cash proceeds of
such sale-and-leaseback transaction are at least equal to the fair market value
(as determined in good faith by the Board of Directors and set forth in an
Officers' Certificate delivered to the Trustee) of the property that is the
subject of such sale-and-leaseback transaction and (iii) the transfer of assets
in such sale-and-leaseback transaction is permitted by, and the Company applies
the proceeds of such transaction in compliance with, Section 4.10 hereof.
SECTION 4.15 OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes on a
Business Day (the "CHANGE OF CONTROL PAYMENT DATE") not more than 70 nor less
than 30 days following such Change of Control, pursuant to the offer described
below (the "CHANGE OF CONTROL OFFER") at an offer price in cash equal to 101% of
the aggregate principal amount thereof plus accrued and unpaid interest thereon
to the date of purchase (the "CHANGE OF CONTROL PAYMENT"). Within 30 days
following any Change of Control, the Company shall mail a notice to each Holder
describing the transaction or transactions that constitute the Change of Control
and offering to repurchase Notes pursuant to the procedures required by this
Section 4.15 and described in such notice. The Company shall comply with the
requirements of Rule 14e-1 under the Exchange Act and any other securities laws
and regulations thereunder to the extent such laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control. The Change of Control Offer shall be required to remain open
for at least 20 Business Days and until the close of business on the fifth
Business Day prior to the Change of Control Payment Date.
(b) On the Change of Control Payment Date, the Company shall, to
the extent lawful, (i) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect
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of all Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted, together with an Officers'
Certificate stating the aggregate principal amount of Notes or portions thereof
being purchased by the Company. The Paying Agent shall promptly mail or
otherwise deliver to each Holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee shall 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 such new Note shall be in a principal amount of $1,000 or an
integral multiple thereof. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) The Change of Control provisions described above shall be
applicable whether or not any other provisions of this Indenture are applicable.
(d) The Company shall 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 validly tendered and not withdrawn
under such Change of Control Offer.
SECTION 4.16 BUSINESS ACTIVITIES.
The Company shall not, and will not permit any Restricted Subsidiary to,
engage in any business other than (i) the Oil Service Business, (ii) such other
businesses as the Company or its Restricted Subsidiaries are engaged in on the
Issue Date and (iii) such other business activities as are reasonably related or
incidental thereto.
ARTICLE 5
SUCCESSORS
SECTION 5.1 MERGER, CONSOLIDATION OR SALE OF ASSETS.
The Company shall not consolidate or merge with or into (whether or not
the Company is the surviving corporation), or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another Person unless (i) the
Company is the surviving corporation or the Person formed by or surviving any
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia, (ii) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Notes and this Indenture pursuant to a supplemental Indenture in a
form reasonably satisfactory to the Trustee, (iii) except in the case of a
merger of the Company with or into a Wholly Owned Subsidiary of the Company,
immediately after such transaction no Default or Event of Default exists and
(iv) except in the case of a merger of the Company with or into a Wholly Owned
Subsidiary of the Company, the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which such sale,
assignment, transfer, lease, conveyance or other
39
disposition shall have been made (A) will have Consolidated Net Worth
immediately after the transaction equal to or greater than the Consolidated Net
Worth of the Company immediately preceding the transaction and (B) will, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness (in addition to
Permitted Indebtedness) pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.9(a) hereof.
In connection with any consolidation, merger or transfer contemplated by
this provision, the Company shall deliver, or cause to be delivered, to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and the supplemental indenture in respect
thereto comply with this provision and that all conditions precedent in this
Indenture provided for relating to such transaction or transactions have been
complied with.
SECTION 5.2 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 or assets of the Company in accordance with Section 5.1 hereof, the
Person formed by such consolidation or into or with which the Company is 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, lease, conveyance or other
disposition, the provisions of this Indenture referring to "the Company" shall
refer instead to such Person and not to the Company), and may exercise every
right and power of the Company under this Indenture with the same effect as if
such Person had been named as the Company herein; PROVIDED, HOWEVER, that the
Company shall not be relieved from the obligation to pay the principal of,
premium, if any, and interest on the Notes except in the case of a sale of all
or substantially all of the Company's properties or assets that meets the
requirements of Section 5.1 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(i) the Company defaults for 30 days in the payment when
due of interest on the Notes;
(ii) the Company defaults in payment when due of the
principal of or premium, if any, on the Notes;
(iii) the Company fails to comply with the provisions of
Section 4.10, 4.15 or 5.1 hereof.
(iv) the Company fails for 45 days after notice to comply
with any of its other agreements in this Indenture or the Notes;
40
(v) the Company or any of its Restricted Subsidiaries
defaults under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or
any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the Issue Date, which default
(A) is caused by a failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness on the date of such default (a
"PAYMENT DEFAULT") or (B) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $5.0 million or more for any single Indebtedness or a total
of $10.0 million or more for all such Indebtedness and PROVIDED,
FURTHER, that if any such default is cured or waived or any such
acceleration rescinded, or such Indebtedness is repaid, within a period
of 10 days from the continuation of such default beyond the applicable
grace period or the occurrence of such acceleration, as the case may be,
such Event of Default under this Section 6.1(v) and any consequential
acceleration of the Notes shall be automatically rescinded, so long as
such recision does not conflict with any judgment or decree;
(vi) a final judgment or final judgments for the payment
of money are entered by a court or courts of competent jurisdiction
against the Company or any of its Subsidiaries and such judgment or
judgments remain unpaid and undischarged for a period (during which
execution shall not be effectively stayed) of 60 consecutive days,
provided that the aggregate of all such unpaid and undischarged
judgments exceeds $5.0 million;
(vii) any Subsidiary Guarantee shall for any reason cease
to be, or be asserted by the Company or any Subsidiary Guarantor, as
applicable, not to be, in full force and effect (except pursuant to the
release of any Subsidiary Guarantee in accordance with this Indenture);
(viii) the Company or any of its Restricted Subsidiaries
that constitutes a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary, pursuant to or within the meaning of Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief
against it in an involuntary case,
(C) consents to the appointment of a Bankruptcy
Custodian of it or for all or substantially all of its property,
(D) makes a general assignment for the benefit of
its creditors, or
(E) generally is not paying its debts as they
become due; or
(ix) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
41
(A) is for relief, in an involuntary case, against
the Company or any of its Restricted Subsidiaries that
constitutes a Significant Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant
Subsidiary;
(B) appoints a Bankruptcy Custodian of the Company
or any of its Restricted Subsidiaries that constitutes a
Significant Subsidiary or any group of Restricted Subsidiaries
that, taken together, would constitute a Significant Subsidiary,
for all or substantially all of the property of the Company or
any of such Restricted Subsidiaries; or
(C) orders the liquidation of the Company or any of
its Restricted Subsidiaries that constitutes a Significant
Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, for all of
substantially all of the property of the Company or any of such
Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days.
SECTION 6.2 ACCELERATION.
If any Event of Default (other than an Event of Default specified in
clause (viii) or (ix) of Section 6.1 hereof with respect to the Company or any
of its Restricted Subsidiaries that constitutes a Significant Subsidiary or any
group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (viii) or (ix) of
Section 6.1 hereof occurs with respect to the Company or any of its Restricted
Subsidiaries that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes by written notice to the Trustee may on behalf of all of the
Holders waive any existing Default or Event of Default acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium on the Notes) have been cured or waived.
SECTION 6.3 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 to enforce the performance of any provision of the
Notes or this Indenture.
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.
42
SECTION 6.4 WAIVER OF PAST DEFAULTS.
Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes (including in connection
with an offer to purchase pursuant to Sections 3.7, 3.9, 4.10 or 4.15 hereof).
Upon any such waiver, 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 shall extend to any subsequent or other
Default or impair any right consequent thereon.
SECTION 6.5 CONTROL BY MAJORITY.
Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. 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 of Notes or that may
involve the Trustee in personal liability.
SECTION 6.6 LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Note only if:
(i) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(ii) the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(iii) such Holder of a Notes or Holders of Notes offer
and, if requested, provide to the Trustee indemnity satisfactory to the
Trustee against any loss, liability or expense;
(iv) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if requested,
the provision of indemnity; and
(v) during such 60-day period the Holders of a majority in
aggregate principal amount of the then outstanding Notes do not give the
Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of
another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
SECTION 6.7 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 pursuant to Sections 3.7,
43
3.9, 4.10 or 4.15 hereof), 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.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.1(i) or (ii) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and 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, its agents and counsel.
SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is 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, its agents and counsel) and the
Holders of the Notes 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 reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.7 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 7.7 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 6.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
SECOND: to Holders of Notes 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
44
THIRD: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11 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 and expenses, against any party litigant in the suit, having due
regard for the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.6 hereof, or a suit by Holders of more
than 10% in aggregate principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
(a) If 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
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall 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; and
(ii) in the absence of bad faith on its part, 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. However, in the case of any such
certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(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:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 7.1;
45
(ii) the Trustee shall 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
(iii) the Trustee shall 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 6.5 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 7.1.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall 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.
SECTION 7.2 RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
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
shall 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. The Trustee may
consult with counsel of its selection and the advice of such counsel or any
Opinion of Counsel shall 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
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall 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 shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall 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 shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
46
SECTION 7.3 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 Compete 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, apply to the Commission for permission
to continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee shall 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 shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall 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.
SECTION 7.5 NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Notes, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.6 REPORT BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the 12 months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA ss. 313(b)(2) and
ss. 313(b)(1). The Trustee shall also transmit by mail all reports as required
by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the Commission and each stock
exchange on which the Notes are listed in accordance with TIA ss. 313(d). The
Company shall promptly notify the Trustee when the Notes are listed on any stock
exchange.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such compensation
as shall be agreed between the Company and the Trustee for its acceptance of
this Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements,
47
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee and any successor
Trustee against any and all losses, liabilities, damages, claims or expenses,
including taxes (other than taxes based on the income of the Trustee), 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 (including this Section 7.7) and defending
itself against any claim (whether asserted by the Company or 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 bad faith. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company shall not relieve the Company of
its obligations hereunder. The Company shall defend the claim and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel and the
Company shall pay the reasonable fees and expenses of much counsel. The Company
need not pay for any settlement made without its consent, which consent shall
not be unreasonably withheld.
The obligations of the Company under this Section 7.7 shall survive the
satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal, premium,
if any, and interest on particular Notes. Such Lien shall survive the
satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(viii) or (ix) 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. The Trustee shall also be entitled to receive compensation for
extraordinary services in default administration.
The Trustee shall comply with the provisions of TIA ss. 313 (b)(2) to
the extent applicable.
SECTION 7.8 REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.8.
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 Notes 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:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
48
(c) a Bankruptcy Custodian or public officer takes charge of the
Trustee or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall 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.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of Notes 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.
If the Trustee, after written request by any Holder of a Note who has
been a Holder of a Note for at least six months, fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
SECTION 7.9 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 shall be the successor Trustee. As
soon as practicable, the successor Trustee shall mail a notice of its succession
to the Company and the Holders of the Notes.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
There shall 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 (together with its parent bank holding company, if any)
a combined capital and surplus of at least $200 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
49
SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.1 OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, elect to have
either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
SECTION 8.2 LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.2, the Company and each Subsidiary Guarantor shall,
subject to the satisfaction of the conditions set forth in Section 8.4 hereof,
be deemed to have been discharged from its obligations with respect to all
outstanding Notes on the date the conditions set forth below are satisfied
(hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that
the Company shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.5 hereof and the other Sections
of this Indenture referred to in clauses (i) and (ii) below, and the Company and
each Subsidiary Guarantor shall be deemed to have satisfied all of its other
obligations under such Notes or Subsidiary Guarantee and this Indenture (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
shall survive until otherwise terminated or discharged hereunder: (i) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.4 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due; (ii) the Company's obligations with respect to such Notes
under Article 2 and Section 4.2 hereof; (iii) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (iv) this Article 8. Subject to compliance with this
Article 8, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 hereof.
SECTION 8.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.4 hereof, be released from its
obligations under the covenants contained in Sections 4.5, 4.7, 4.8, 4.9, 4.10,
4.11, 4.12, 4.13, 4.14, 4.15 and 4.16 hereof and Article 10 hereof with respect
to the outstanding Notes on and after the date the conditions set forth below
are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall
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 shall continue to be deemed
"outstanding" for all other purposes
50
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
respect to the outstanding Notes, the Company and any Subsidiary Guarantor may
omit to comply with and shall 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 shall not constitute a Default
or an Event of Default under Section 6.1 hereof, but, except as specified above,
the remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Company's exercise under Section 8.1 hereof of the option
applicable to this Section 8.3 hereof, subject to the satisfaction of the
conditions set forth in Section 8.4 hereof, Sections 6.1(v) and 6.1(vii) hereof
shall not constitute Events of Default.
SECTION 8.4 CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of either
Sections 8.2 or 8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such amounts as
will be sufficient, in the opinion of a nationally recognized firm of
independent public accountants, to pay the principal of, premium, if any, and
interest on the outstanding Notes on the stated date for payment thereof 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;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (i) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (ii) since the date of this Indenture, 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 shall confirm that, the Holders 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;
(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders 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;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article 8
51
concurrently with such incurrence) or insofar as Section 6.1(viii) or 6.1(ix)
hereof is concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation 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;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date such opinion, (i) the trust funds
will not be subject to rights of holders of Indebtedness other than the Notes
and (ii) assuming no intervening bankruptcy of the Company between the date of
deposit and the 91st day following the deposit (assuming no Holder of Notes is
an insider of the Company) or the day following the end of such other preference
period in effect at the time of such opinion (assuming a Holder of Notes is an
insider of the Company), as applicable, following the deposit, the trust funds
will not be subject to the effects of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under any
applicable United States or state law;
(g) the Company shall 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 Notes over any other creditors of the Company or
any Subsidiary Guarantor with the intent of defeating, hindering, delaying or
defrauding creditors of the Company, or any Subsidiary Guarantor or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, which, taken together, state that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
SECTION 8.5 DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.6 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 8.5, the
"TRUSTEE") pursuant to Section 8.4 hereof in respect of the outstanding Notes
shall 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 shall 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 8.4 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.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.4 hereof that, 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
8.4(a) hereof), are in excess of the amount thereof
52
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
SECTION 8.6 REPAYMENT TO THE COMPANY.
Subject to the applicable escheat and abandoned property laws, 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, and 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) shall be discharged from such trust;
and the Holder of such Notes shall thereafter, as a secured 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 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 The New York Times and
The Wall Street Journal (national edition), notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
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 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.5
hereof by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Sections 8.2 or 8.3
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.5 hereof; 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 shall 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 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.1 WITHOUT CONSENT OF HOLDERS OF NOTES.
(a) Notwithstanding Section 9.2 of this Indenture, the Company,
the Subsidiary Guarantors and the Trustee may amend or supplement this Indenture
or the Notes without the consent of any Holder of a Note:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Notes in addition
to or in place of certificated Notes;
53
(iii) to provide for the assumption of the Company's
obligations to the Holders of the Notes pursuant
to Article 5 or Section 10.4(b) hereof;
(iv) to secure the Notes pursuant to the requirements
of Section 4.12 or otherwise;
(v) to make any change that would provide any
additional rights or benefits to the Holders of
the Notes or that does not adversely affect the
legal rights under this Indenture of any such
Holder;
(vi) to add any Restricted Subsidiary as an
additional Subsidiary Guarantor as provided in
Section 10.2 hereof or to evidence the
succession of another Person to any Subsidiary
Guarantor pursuant to Section 10.4 hereof and
the assumption by any such successor of the
covenants and agreements of such Subsidiary
Guarantor contained herein and in the Subsidiary
Guarantee of such Subsidiary Guarantor;
(vii) to release a Subsidiary Guarantor from its
obligations under this Indenture and its
Subsidiary Guarantee pursuant to Section 10.5
hereof, or
(viii) to comply with requirements of the Commission in
order to effect or maintain the qualification of
this Indenture under the TIA.
(b) Upon the 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 9.6 hereof, the Trustee shall join with the Company and the
Subsidiary 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 shall not be obligated to enter into such amended or supplemental
Indenture that affects its own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.2 WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.2, the Company and the
Trustee may amend or supplement this Indenture, the Subsidiary Guarantees or the
Notes 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, subject to Sections 6.4 and 6.7 hereof, any existing
Default or Event of Default (other than a Default or Event of Default in the
payment of the principal of, premium, if any, or interest on the Notes, except a
payment default resulting from an acceleration that has been rescinded) or
compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in aggregate principal amount of the
then outstanding Notes (including consents obtained in connection with a
purchase of, tender offer or exchange offer for Notes).
Upon the 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 the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and
54
upon receipt by the Trustee of the documents described in Section 9.6 hereof,
the Trustee shall join with the Company and the Subsidiary Guarantors in the
execution of such amended or supplemental Indenture unless such amended or
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 amended or
supplemental Indenture.
Subject to Sections 6.4 and 6.7 hereof, the Holders of a majority in
aggregate principal amount of the Notes then outstanding may waive compliance in
a particular instance by the Company and the Subsidiary Guarantors with any
provision of this Indenture or the Notes. However, without the consent of each
Holder affected, an amendment or waiver may not (with respect to any Notes held
by a non-consenting Holder):
(i) reduce the principal amount of Notes whose
Holders must consent to an amendment, supplement
or waiver;
(ii) reduce the principal of or change the fixed
maturity of any Note or alter or waive any of
the provisions with respect to the redemption of
the Notes (except as provided below with respect
to Sections 3.9, 4.10 and 4.15 hereof);
(iii) reduce the rate of or change the time for
payment of interest, including default interest,
on any Note;
(iv) waive a Default or Event of Default in the
payment of principal of or premium, if any, or
interest 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);
(v) make any Note payable in money other than that
stated in the Notes;
(vi) 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 premium, if any, or
interest on the Notes;
(vii) waive a redemption payment with respect to any
Note (other than a payment required by Sections
4.10 or 4.15 hereof);
(viii) alter the ranking of the Notes relative to other
Indebtedness of the Company; or
(ix) make any change in the foregoing amendment and
waiver provisions.
In addition, without the consent of Holders of not less than 66-2/3% in
aggregate principal amount of the Notes then outstanding, no such amendment,
supplement or waiver may amend, change or modify the obligation of the Company
to make and consummate a Change of Control Offer in the event of a Change of
Control or make and consummate an Asset Sale Offer with respect to any Asset
Sale or modify any of the provisions or definitions with respect thereto.
55
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.2 to approve the particular form of any proposed amendment or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver.
SECTION 9.3 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.4 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 ▇▇▇▇▇▇'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 waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.5 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 authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENT ETC.
The Trustee shall sign any amended or supplemental Indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until its Board of Directors
approves it. In executing any amended or supplemental Indenture, the Trustee
shall be entitled to receive, and (subject to Section 7.1 hereof) shall be fully
protected in relying upon, Officers' Certificates and Opinions of Counsel
stating that the execution of such amended or supplemental Indenture is
authorized or permitted by this Indenture.
56
ARTICLE 10
SUBSIDIARY GUARANTEES
SECTION 10.1 SUBSIDIARY GUARANTEES.
(a) The Subsidiary Guarantors and each Subsidiary of the Company
that in accordance with Section 10.2 hereof is required to guarantee the
obligations of the Company under the Notes and this Indenture hereby jointly and
severally and unconditionally guarantees, on a senior basis (each such guarantee
being a "SUBSIDIARY GUARANTEE"), to each Holder of a Note authenticated and
delivered by the Trustee irrespective of the validity or enforceability of this
Indenture, the Notes or the obligations of the Company under this Indenture or
the Notes, that: (i) the principal of, premium, if any, and interest on the
Notes shall be paid in full when due, whether at the maturity or interest
payment or mandatory redemption date, by acceleration, call for redemption or
otherwise, and interest on the overdue principal and interest, if any, of the
Notes and all other obligations of the Company to the Holders or the Trustee
under this Indenture or the Notes shall be promptly paid in full or performed,
all in accordance with the terms of this Indenture and the Notes and (ii) in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, they shall be paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at maturity, by
acceleration or otherwise. Failing payment when due of any amount so guaranteed
for whatever reason, each Subsidiary Guarantor shall be obligated to pay the
same whether or not such failure to pay has become an Event of Default that
could cause acceleration pursuant to Section 6.2 hereof. Each Subsidiary
Guarantor agrees that this is a guarantee of payment not a guarantee of
collection.
(b) Each Subsidiary Guarantor hereby agrees that its obligations
with regard to its Subsidiary Guarantee shall be unconditional, irrespective of
the validity or enforceability of the Notes or the obligations of the Company
under this Indenture, the absence of any action to enforce the same, the
recovery of any judgment against the Company or any other obligor with respect
to this Indenture, the Notes or the obligations of the Company under this
Indenture or the Notes, any action to enforce the same or any other
circumstances (other than complete performance) that might otherwise constitute
a legal or equitable discharge or defense of a Subsidiary Guarantor. Each
Subsidiary Guarantor further, to the extent permitted by law, waives and
relinquishes all claims, rights and remedies accorded by applicable law to
guarantors and agrees not to assert or take advantage of any such claims, rights
or remedies, including but not limited to: (i) any right to require the Trustee,
the Holders or the Company (each, a "BENEFITTED PARTY") to proceed against the
Company or any other Person or to proceed against or exhaust any security held
by a Benefitted Party at any time or to pursue any other remedy in any
Benefitted Party's power before proceeding against such Subsidiary Guarantor;
(ii) the defense of the statute of limitations in any action hereunder or in any
action for the collection of any Indebtedness or the performance of any
obligation hereby guaranteed; (iii) any defense that may arise by reason of the
incapacity, lack of authority, death or disability of any other Person or the
failure of a Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person; (iv)
demand, protest and notice of any kind including but not limited to notice of
the existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of such Subsidiary
Guarantor, the Company, any Benefitted Party, any creditor of such Subsidiary
Guarantor, the Company or on the part of any other Person whomsoever in
connection with any Indebtedness or Obligations hereby guaranteed; (v) any
defense based upon an election of remedies by a Benefitted Party, including but
not limited to an election to proceed against such Subsidiary Guarantor for
reimbursement; (vi) any defense based upon any statute or rule of law that
provides that
57
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (vii) any defense arising
because of a Benefitted Party's election, in any proceeding instituted under any
Bankruptcy Law, of the application of Section 1111(b)(2) under the Bankruptcy
Law; (viii) any defense based on any borrowing or grant of a security interest
under Section 364 under the Bankruptcy Law or (ix) any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever. Each Subsidiary Guarantor hereby covenants that its Subsidiary
Guarantee will not be discharged except by complete performance of all of the
obligations contained in its Subsidiary Guarantee, the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or any Subsidiary Guarantor, or any
custodian, trustee, or similar official acting in relation to either the Company
or such Subsidiary Guarantor, any amount paid by the Company or such Subsidiary
Guarantor to the Trustee or such Holder, the applicable Subsidiary Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each Subsidiary Guarantor agrees that it will not 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.
(d) Each Subsidiary Guarantor further agrees that, as between
such Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on
the other hand, (i) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 6.2 hereof for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration as to the Company or any other obligor on the Notes
of the obligations guaranteed hereby and (ii) in the event of any declaration of
acceleration of those obligations as provided in Section 6.2 hereof, those
obligations (whether or not due and payable) will forthwith become due and
payable by such Subsidiary Guarantor for the purpose of this Subsidiary
Guarantee.
SECTION 10.2 ADDITIONAL SUBSIDIARY GUARANTEES.
(a) If, after the Issue Date, (i) the Company or any of its
Restricted Subsidiaries shall (A) transfer or cause to be transferred, any
assets, businesses, divisions, real property or equipment having a fair market
or book value in excess of $1.0 million to any Restricted Subsidiary that is not
a Subsidiary Guarantor or (B) make any Investment having an aggregate fair
market or book value in excess of $1.0 million in any Restricted Subsidiary that
is not a Subsidiary Guarantor or (ii) any Restricted Subsidiary that is not a
Subsidiary Guarantor (A) shall provide a guarantee under the Credit Facility or
(B) shall own any assets or properties having an aggregate fair market or book
value in excess of $1.0 million, then the Company shall cause such Restricted
Subsidiary to execute and deliver a supplemental indenture to this Indenture
agreeing to be bound by its terms applicable to a Subsidiary Guarantor and
providing for a Subsidiary Guarantee of the Notes by such Restricted Subsidiary,
in accordance with the terms of this Indenture.
(b) The Company shall not permit any of its Restricted
Subsidiaries, other than a Subsidiary Guarantor, directly or indirectly, to (i)
incur, guarantee or secure through the granting of Liens the payment of any
Indebtedness of the Company or (ii) pledge any intercompany notes representing
obligations of any of its Restricted Subsidiaries to secure the payment of any
Indebtedness of the Company, in each case, unless the Company shall cause such
Restricted Subsidiary to execute a Subsidiary Guarantee and deliver an Opinion
of Counsel in advance in accordance with the terms of this Indenture.
58
SECTION 10.3 LIMITATION OF SUBSIDIARY GUARANTORS' LIABILITY.
(a) Each Subsidiary Guarantor and by its acceptance hereof, each
beneficiary hereof, hereby confirm that it is its intention that the Subsidiary
Guarantee by such Subsidiary Guarantor not constitute a fraudulent transfer or
conveyance for purposes of the 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 of the Subsidiary Guarantees. To effectuate the
foregoing intention, each such person hereby irrevocably agrees that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee under
this Article 10 shall be limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations under this Indenture, result in the obligations of
such Subsidiary Guarantor under the Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
(b) For purposes of such limitations and the applicable
fraudulent conveyance laws, any indebtedness of a Subsidiary Guarantor incurred
from time to time pursuant to the Credit Facility and secured by a perfected
Lien on the assets of such Subsidiary Guarantor (assuming, for purposes of such
determination, that the incurrence of any such indebtedness and the granting of
any such security interest did not violate any such fraudulent conveyance laws)
shall be deemed, to the extent of the value of the assets subject to such Lien,
to have been incurred prior to the incurrence by such Subsidiary Guarantor of
liability under its Subsidiary Guarantee.
(c) Each beneficiary under the Subsidiary Guarantees, by
accepting the benefits hereof, confirms its intention that, in the event of a
bankruptcy, reorganization or other similar proceeding of the Company or any
Subsidiary Guarantor in which concurrent claims are made upon such Subsidiary
Guarantor hereunder, to the extent such claims will not be fully satisfied, each
such claimant with a valid claim against the Company shall be entitled to a
ratable share of all payments by such Subsidiary Guarantor in respect of such
concurrent claims.
SECTION 10.4 SUBSIDIARY GUARANTORS MAY CONSOLIDATE ETC., ON CERTAIN TERMS.
(a) No Subsidiary Guarantor may consolidate with or merge with or
into (whether or not such Subsidiary Guarantor is the surviving Person) another
Person (other than the Company or another Subsidiary Guarantor), whether or not
affiliated with such Subsidiary Guarantor, unless (i) subject to the provisions
of the following paragraph, the Person formed by or surviving any such
consolidation or merger (if other than such Subsidiary Guarantor) shall execute
and deliver a supplemental indenture to this Indenture agreeing to be bound by
its terms applicable to a Subsidiary Guarantor and providing for a Subsidiary
Guarantee of the Notes by such Person, in accordance with the terms of this
Indenture; (ii) immediately after giving effect to such transaction, no Default
or Event of Default exists; (iii) such Subsidiary Guarantor, or any Person
formed by or surviving any such consolidation or merger, would have Consolidated
Net Worth (immediately after giving effect to such transaction), equal to or
greater than the Consolidated Net Worth of such Subsidiary Guarantor immediately
preceding the transaction; (iv) the Company would be permitted by virtue of the
Company's pro forma Fixed Charge Coverage Ratio, immediately after giving effect
to such transaction, to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.9(a) hereof and
(v) such transaction does not violate any of the covenants contained in Articles
4 and 5 hereof. In
59
connection with any consolidation or merger contemplated by this provision, the
Subsidiary Guarantor shall deliver, or cause to be delivered, to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation or
merger and the supplemental indenture in respect thereto comply with this
provision and that all conditions precedent in this Indenture provided for
relating to such transaction or transactions have been complied with.
(b) Notwithstanding the foregoing, (i) a Subsidiary Guarantor may
consolidate with or merge with or into the Company, provided that the surviving
corporation (if other than the Company) shall expressly assume by supplemental
indenture complying with the requirements of this Indenture, the due and
punctual payment of the principal of, premium, if any, and interest on all of
the Notes, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be performed by the Company and
(ii) a Subsidiary Guarantor may consolidate with or merge with or into any other
Subsidiary Guarantor.
SECTION 10.5 RELEASES OF SUBSIDIARY GUARANTORS.
In the event of (i) the designation of any Subsidiary Guarantor as an
Unrestricted Subsidiary or (ii) a sale or other disposition of all or
substantially all of the properties or assets of any Subsidiary Guarantor to a
third party or an Unrestricted Subsidiary, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the capital stock of any
Subsidiary Guarantor, in either case, in a transaction or manner that does not
violate any of the covenants or other provision of this Indenture, then such
Subsidiary Guarantor (in the event of such a designation or a sale or other
disposition, by way of such a merger, consolidation or otherwise, of all of the
capital stock of such Subsidiary Guarantor) or the Person acquiring the property
(in the event of a sale or other disposition of all or substantially all of the
assets of such Subsidiary Guarantor) will be released from and relieved of any
obligations under this Indenture and its Subsidiary Guarantee, PROVIDED that any
Net Proceeds of such sale or other disposition are applied in accordance with
Section 4.10 hereof and PROVIDED, FURTHER, HOWEVER, that any such termination
shall occur only to the extent that all obligations of such Subsidiary Guarantor
under all of its guarantees of, and under all of its pledges of assets or other
security interests that secure, any other Indebtedness of the Company or its
Restricted Subsidiaries shall also terminate upon such release, sale or
disposition.
SECTION 10.6 "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article 10 shall in such case (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 10 in place of the Trustee.
SECTION 10.7 CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"FUNDING GUARANTOR") under a Subsidiary Guarantee, such Funding Guarantor shall
be entitled to a contribution from all other Subsidiary Guarantors in a pro rata
amount based on the Adjusted Net Assets (as defined below) of each Subsidiary
Guarantor (including the Funding Guarantor)
60
for all payments, damages and expenses incurred by that Funding Guarantor in
discharging the Company's obligations with respect to the Notes or any other
Subsidiary Guarantor's obligations with respect to such Subsidiary Guarantee.
"ADJUSTED NET ASSETS" of such Subsidiary Guarantor at any date shall mean the
lesser of the amount by which (x) the fair value of the property of such
Subsidiary Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent liabilities, but excluding liabilities under the
Subsidiary Guarantee of such Subsidiary Guarantor at such date and (y) the
present fair salable value of the assets of such Subsidiary Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Subsidiary Guarantor on its debts (after giving effect to all other fixed
and contingent liabilities incurred or assumed on such date and after giving
effect to any collection from any subsidiary of such Subsidiary Guarantor in
respect of the obligations of such subsidiary under the Subsidiary Guarantees),
excluding debt in respect of the Subsidiary Guarantees, as they become absolute
and matured.
SECTION 10.8 EXECUTION OF SUBSIDIARY GUARANTEES.
To evidence its guarantee to each Holder of Notes, each of the
Subsidiary Guarantors hereby agree to execute its Subsidiary Guarantee in
substantially the form of Exhibit A recited to be endorsed on each Note ordered
to be authenticated and delivered by the Trustee. Each Subsidiary Guarantor
hereby agrees that its Subsidiary Guarantee set forth in Section 10.1 hereof
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Subsidiary Guarantee. Each such Subsidiary
Guarantee shall be signed on behalf of each Subsidiary Guarantor by one Officer
of such Subsidiary Guarantor who shall have been duly authorized by all
requisite corporate actions, and the delivery of such Note by the Trustee, after
the authentication thereof hereunder, shall constitute due delivery of such
Subsidiary Guarantee on behalf of such Subsidiary Guarantor. Such signatures
upon the Subsidiary Guarantee may be by manual or facsimile signature of such
Officer and may be imprinted or otherwise reproduced on the Subsidiary
Guarantee, and in case any such Officer who shall have signed the Subsidiary
Guarantee shall cease to be such Officer before the Note on which such
Subsidiary Guarantee is endorsed shall have been authenticated and delivered by
the Trustee or disposed of by the Company, such Note nevertheless may be
authenticated and delivered or disposed of as though the person who signed the
Subsidiary Guarantee had not ceased to be such officer of the Subsidiary
Guarantor.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 11.2 NOTICES.
Any notice or communication by the Company, any of the Subsidiary
Guarantors or the Trustee to any of the others is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), facsimile or overnight air courier guaranteeing
next-day delivery, to such other's address:
61
If to the Company:
▇▇▇▇▇▇ Production Services, Inc.
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
2200 One American Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Subsidiary Guarantor:
c/▇ ▇▇▇▇▇▇ Production Services, Inc.
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
▇. ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
2200 One American Center
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
For payment, registration, transfer, exchange and tender of
Notes:
BY HAND:
U.S. Trust Company of Texas, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇, ▇.▇.
New York, New York 10006
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust
62
BY MAIL:
U.S. Trust Company of Texas, N.A.
P.O. Box 841
▇▇▇▇▇▇ Station
New York, New York 10276
For all other communications relating to the Notes:
U.S. Trust Company of Texas, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust
The Company, any of the Subsidiary Guarantors or the Trustee, 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) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the United States mail,
postage prepaid, if mailed; when receipt acknowledged, if sent by facsimile; the
next Business Day after timely delivery to the courier, if sent for overnight
delivery by a courier guaranteeing next-day delivery; and the second Business
Day after timely delivery to the courier, if sent for second-day delivery by a
courier guaranteeing second-day delivery.
Any notice or communication to a Holder shall be mailed by first class
U.S. mail to its address shown on the register kept by the Registrar. Any notice
or communication shall also be so mailed to any Person described in TIA ss.
313(c), to the extent required by the TIA. Failure to mail 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 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 shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 11.3 COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF
NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Subsidiary Guarantors, the Trustee, the Registrar and anyone else shall have the
protection of TIA ss. 312(c).
63
SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, such requesting entity shall furnish to the
Trustee:
(i) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.5 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
(ii) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include the
statements set forth in Section 11.5 hereof) stating that, in the
opinion of such counsel, all such conditions precedent and covenants
have been satisfied.
SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss.
314(e) and shall include:
(i) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(ii) 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;
(iii) 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
(iv) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
SECTION 11.6 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 11.7 NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND
SHAREHOLDERS.
No past, present or future director, officer, employee, incorporator or
shareholder of the Company or any Subsidiary Guarantor, as such, shall have any
liability for any obligations of the Company or such Subsidiary Guarantor under
the Notes, this Indenture or the Subsidiary Guarantees, as the case may be, or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes and the Subsidiary Guarantees.
64
SECTION 11.8 GOVERNING LAW.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE
USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES.
SECTION 11.9 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 11.10 SUCCESSORS.
All agreements of the Company or any Subsidiary Guarantor in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
SECTION 11.11 SEVERABILITY.
In case any provision in this Indenture or in the Notes 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.
SECTION 11.12 COUNTERPART ORIGINALS.
The parties hereto may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 11.13 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 shall in
no way modify or restrict any of the terms or provisions hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Indenture as
of the date first written above.
▇▇▇▇▇▇ PRODUCTION SERVICES, INC.,
a Texas corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board, President
and Chief Executive Officer
65
▇▇▇▇▇▇ COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
66
▇▇▇▇▇▇ PRODUCTION SERVICES DE MEXICO, S.A. DE C.V.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇
Sole Administrator
67
U.S. TRUST COMPANY OF TEXAS, N.A., as Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
68
EXHIBIT A
[FORM OF NOTE]
9-3/8% SENIOR NOTES DUE 2007
CUSIP: 239423 AA 4
No. $
▇▇▇▇▇▇ PRODUCTION SERVICES, INC., a Texas corporation, promises to pay
to , or registered assigns, the principal sum of Dollars
on February 1, 2007.
Interest Payment Dates: February 1 and August 1
Record Dates: January 15 and July 15
▇▇▇▇▇▇ PRODUCTION SERVICES, INC.
By:
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes referred
to in the within-mentioned
Indenture:
U.S. TRUST COMPANY OF TEXAS, N.A.,
as Trustee
By:
Authorized Signatory
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(▇▇▇▇▇▇ PRODUCTION SERVICES, INC.)
9-3/8% SENIOR NOTES DUE 2007
Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("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.(1)
Capitalized terms used herein shall have the meanings assigned to them
in the Indenture referred to below unless otherwise indicated.
1. INTEREST. ▇▇▇▇▇▇ Production Services, Inc., a Texas corporation (the
"COMPANY"), promises to pay interest on the principal amount of this Note at
9-3/8% per annum from February 20, 1997, until maturity. The Company shall pay
interest semi-annually on February 1 and August 1 of each year, or if any such
day is not a Business Day, on the next succeeding Business Day (each, an
"INTEREST PAYMENT DATE"). Interest on the Notes shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from the date of issuance; PROVIDED that the first Interest Payment Date shall
be August 1, 1997. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is 1% per annum in
excess of the rate then in effect; it shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the January 15 or July 15 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. The Notes will be payable
as to principal, premium and interest at the office or agency of the Company
maintained for such purpose within or without the City and State of New York,
or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders,
and provided that payment by wire transfer of immediately available funds will
be required with respect to principal of, and interest and premium on, all
Global Notes and all other Notes the Holders of which shall have provided
written wire transfer instructions to the Company or the Paying Agent at least
10 Business Days prior to the applicable
------------
(1) This paragraph should be included only in the Note if issued in global form.
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payment date. Such payment shall be in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, U.S. Trust Company of Texas,
N.A., 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.
4. INDENTURE AND SUBSIDIARY GUARANTEES. The Company issued the Notes
under an Indenture dated as of February 20, 1997 (the "INDENTURE"), among the
Company, the Subsidiary Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
obligations of the Company limited to $140.0 million in aggregate principal
amount. Payment on each Note is guaranteed on a senior basis, jointly and
severally, by the Subsidiary Guarantors pursuant to Article 10 of the Indenture.
5. OPTIONAL REDEMPTION.
(a) Except as set forth in subparagraph (b) of this Paragraph 5,
the Company shall not have the option to redeem the Notes prior to February 1,
2002. Thereafter, the Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
redemption date, if redeemed during the 12-month period beginning on February 1
of each of the years indicated below:
YEAR PERCENTAGE
2002.......................................... 104.6875%
2003.......................................... 103.1250%
2004.......................................... 101.5625%
2005 and thereafter........................... 100.0000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time on or prior to February 1, 2000, the Company may redeem
up to an aggregate of $49.0 million principal amount of Notes at a redemption
price of 109.375% of the principal amount thereof, plus accrued and unpaid
interest thereon to the redemption date, with the net proceeds of a Public
Equity Offering; PROVIDED that at least $91.0 million in aggregate principal
amount of Notes remain outstanding immediately after the occurrence of such
redemption; and, PROVIDED, FURTHER, that such redemption shall occur within 60
days of the date of the closing of such Public Equity Offering.
6. MANDATORY REDEMPTION. The Company shall not be required to make
mandatory redemption payments or sinking fund payments with respect to the
Notes.
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7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "CHANGE OF CONTROL OFFER") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and any unpaid interest thereon, if any, to the Change of Control
Payment Date (as hereinafter defined) (the "CHANGE OF CONTROL PAYMENT"). Within
30 days of the occurrence of a Change of Control, the Company shall notify the
Trustee in writing of such proposed occurrence and shall make a Change of
Control Offer. Within 30 days following the occurrence of a Change of Control,
the Company shall mail a notice to each Holder setting forth the procedures
governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, within 10 days following each Asset Sale Trigger Date, the Company
shall commence an offer to all Holders of Notes (an "ASSET SALE OFFER") pursuant
to Section 3.9 of the Indenture to purchase the maximum principal amount of
Notes that may be purchased out of the Excess Proceeds at an offer price in cash
in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest thereon, if any, to the Asset Sale Offer Purchase Date in
accordance with the procedures set forth in the Indenture. To the extent that
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company (or such Subsidiary) may use such excess
for general corporate purposes. Holders of Notes that are the subject of an
offer to purchase will receive an Asset Sale Offer from the Company prior to any
related purchase date and may elect to have such Notes purchased by completing
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at least
30 days but not more than 60 days before a redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000 may be redeemed in part but only in whole multiples of
$1,000, unless all of the Notes held by a Holder are to be redeemed. On and
after the redemption date interest ceases to accrue on Notes or portions thereof
called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. 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 Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be
treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture or the Notes 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 compliance with any provision of
the Indenture or the Notes 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
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Note, the Indenture or the Notes may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to provide for the assumption of
the Company's obligations to Holders of the Notes in case of a merger or
consolidation, to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder, to secure the Notes, to add or
release any Subsidiary Guarantor pursuant to the terms of the Indenture or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the TIA.
12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30
days in the payment when due of interest on the Notes; (ii) default in payment
when due of principal of or premium, if any, on the Notes when the same becomes
due and payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise, (iii) failure by the Company to comply with
Section 4.10, 4.15 or 5.1 of the Indenture; (iv) failure by the Company for 45
days after notice to the Company by the Trustee or the Holders of at least 25%
in aggregate principal amount of the Notes then outstanding to comply with
certain other agreements in the Indenture or the Notes; (v) default under
certain other agreements relating to Indebtedness of the Company, which default
(A) is caused by a failure to pay principal of or premium, if any, or interest
on such Indebtedness prior to the expiration of the grace period provided in
such Indebtedness on the date of such default (a "PAYMENT DEFAULT") or (B)
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$5.0 million or more for any single Indebtedness or a total of $10.0 million or
more for all such Indebtedness and PROVIDED, FURTHER, that if any such default
is cured or waived or any such acceleration rescinded, or such Indebtedness is
repaid, within a period of 10 days from the continuation of such default beyond
the applicable grace period or the occurrence of such acceleration, as the case
may be, such Event of Default under the Indenture and any consequential
acceleration of the Notes shall be automatically rescinded, so long as such
recision does not conflict with any judgment or decree; (vi) certain final
judgments for the payment of money that remain undischarged for a period of 60
days; (vii) any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Restricted Subsidiary that is a Guarantor, as
applicable, not to be, in full force and effect (except pursuant to the release
of any Subsidiary Guarantee in accordance with the Indenture) and (viii) certain
events of bankruptcy or insolvency with respect to the Company or any of its
Restricted Subsidiaries that constitutes a Significant Subsidiary or any group
of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of the then outstanding
Notes 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 with respect to the Company, any
Restricted Subsidiary that constitutes a Significant Subsidiary or any group of
Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable 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 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 of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. The Holders of a
majority in aggregate principal amount of the Notes then outstanding by 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
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Default or Event of Default in the payment of interest on, or the principal of,
the Notes. 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. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or shareholder of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any obligations of the Company
or such Subsidiary Guarantor under the Notes, the Indenture or the Subsidiary
Guarantees, as the case may be, or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes and the Subsidiary Guarantees.
15. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee.
16. 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).
17. 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.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
▇▇▇▇▇▇ Production Services, Inc.
▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
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[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEES]
Each of the Subsidiary Guarantors under the Indenture (the "INDENTURE")
referred to in the Note upon which this notation is endorsed, has
unconditionally guaranteed the obligations of the Company under the Notes and
the Indenture, jointly and severally (each such guarantee being a "SUBSIDIARY
GUARANTEE"), to each Holder of a Note authenticated and delivered by the Trustee
irrespective of the validity or enforceability of the Indenture, the Notes or
the obligations of the Company under the Indenture or the Notes, that: (i) the
principal of, premium, if any, and interest on the Notes shall be paid in full
when due, whether at the maturity or interest payment or mandatory redemption
date, by acceleration, call for redemption or otherwise, and interest on the
overdue principal and interest, if any, of the Notes and all other obligations
of the Company to the Holders or the Trustee under the Indenture or the Notes
shall be promptly paid in full or performed, all in accordance with the terms of
the Indenture and the Notes and (ii) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations, they shall be paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed for whatever reason, each Subsidiary Guarantor
shall be obligated to pay the same whether or not such failure to pay has become
an Event of Default that could cause acceleration pursuant to Section 6.2 of the
Indenture. Each Subsidiary Guarantor agrees that this is a guarantee of payment,
not a guarantee of collection. Capitalized terms used herein have the meanings
assigned to them in the Indenture unless otherwise indicated, and the
obligations of the Subsidiary Guarantors pursuant to the Subsidiary Guarantees
are subject to the terms of the Indenture, to which reference is hereby made for
the precise terms thereof. The obligations of each Subsidiary Guarantor to the
Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the
Indenture are expressly set forth, and are senior unsecured obligations of each
such Subsidiary Guarantor to the extent and in the manner provided, in Article
10 of the Indenture, and may be released or limited under certain circumstances.
Reference is hereby made to such Indenture for the precise terms of the
Subsidiary Guarantee therein made.
The Subsidiary Guarantees shall not be valid or obligatory for any
purpose until the certificate of authentication on the Note on which the
Subsidiary Guarantees are noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
By each of the following, and any other Subsidiary Guarantor as may be
added or substituted from time to time, as Subsidiary Guarantors:
SUBSIDIARY GUARANTORS:
▇▇▇▇▇▇ COMPANIES, INC.
▇▇▇▇▇▇ PRODUCTION SERVICES DE MEXICO, S.A. DE C.V.
By:
Name:
(for each of the above-listed Subsidiary
Guarantors)
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
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(Insert assignee's soc. sec. or tax I.D. no.)
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(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.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.10 or 4.15 of the Indenture, check the box below:
[ ] Section 4.10 [ ] Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$____________ (Must be in $1,000 Denominations)
Date: ________________
Your Signature:
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee:
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SCHEDULE OF EXCHANGES FOR DEFINITIVE NOTES(2)
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
AMOUNT OF SIGNATURE OF
DECREASE IN PRINCIPAL AMOUNT OF AUTHORIZED
PRINCIPAL AMOUNT OF INCREASE THIS GLOBAL NOTE SIGNATORY OF
DATE OF AMOUNT OF THIS IN PRINCIPAL AMOUNT FOLLOWING SUCH TRUSTEE OR NOTE
EXCHANGE GLOBAL NOTE OF THIS GLOBAL NOTE DECREASE (OR INCREASE) CUSTODIAN
--------------- ---------------------- ------------------------ ------------------------- ---------------
--------
(2) This should be included only if the Note is issued in global form.
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