EXHIBIT 4.1
HANOVER COMPRESSOR COMPANY,
as Issuer,
$262,621,810
ZERO COUPON
SUBORDINATED NOTES DUE MARCH 31, 2007
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INDENTURE
Dated as of May 14, 2003
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WACHOVIA BANK, NATIONAL ASSOCIATION
as Trustee
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CROSS REFERENCE TABLE*
TIA INDENTURE
SECTION SECTION
------- -----------
3.10 (a)(1) ................................................. 7.10
(a)(2) ................................................. 7.10
(a)(3) ................................................. N.A.**
(a)(4) ................................................. N.A.
(b) ................................................. 7.08; 7.10
(c) ................................................. N.A.
3.11 (a) ................................................. 7.11
(b) ................................................. 7.11
(c) ................................................. N.A.
3.12 (a) ................................................. 2.05
(b) ................................................. 13.03
(c) ................................................. 13.03
(d) ................................................. 7.06
3.13 (a) ................................................. 7.06
(b)(1) ................................................. N.A.
(b)(2) ................................................. 7.06
(c) ................................................. 13.02
(d) ................................................. 7.06
3.14 (a) ................................................. 4.02; 13.02
(b) ................................................. N.A.
(c)(1) ................................................. 13.04
(c)(2) ................................................. 13.04
(c)(3) ................................................. N.A.
(d) ................................................. N.A.
(e) ................................................. 13.05
(f) ................................................. 4.03
3.15 (a) ................................................. 7.01
(b) ................................................. 7.05; 13.02
(c) ................................................. 7.01
(d) ................................................. 7.01
(e) ................................................. 6.11
3.16 (a) (last sentence).................................. 2.08
(a)(1)(A) ................................................. 6.05
(a)(1)(B) ................................................. 6.04
(a)(2) ................................................. N.A.
(b) ................................................. 6.07
3.17 (a)(1) ................................................. 6.08
(a)(2) ................................................. 6.09
(b) ................................................. 2.04
3.18 (a) ................................................. 13.01
* Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of the Indenture.
** Note: N.A. means Not Applicable.
TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE................................................1
SECTION 1.01. DEFINITIONS........................................................................1
SECTION 1.02. OTHER DEFINITIONS.................................................................10
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.................................11
SECTION 1.04. RULES OF CONSTRUCTION.............................................................11
ARTICLE 2. THE SECURITIES...........................................................................12
SECTION 2.01. FORM AND DATING...................................................................12
SECTION 2.02. EXECUTION AND AUTHENTICATION......................................................12
SECTION 2.03. REGISTRAR AND PAYING AGENT........................................................13
SECTION 2.04. PAYING AGENT TO HOLD CASH AND SECURITIES IN TRUST.................................13
SECTION 2.05. HOLDER LISTS......................................................................14
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY..........................................14
SECTION 2.07. REPLACEMENT SECURITIES............................................................17
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.........................18
SECTION 2.09. TEMPORARY SECURITIES..............................................................19
SECTION 2.10. CANCELLATION......................................................................19
SECTION 2.11. PERSONS DEEMED OWNERS.............................................................19
SECTION 2.12. CUSIP NUMBERS.....................................................................20
ARTICLE 3. REDEMPTION...............................................................................20
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE...............................................20
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED............................................20
SECTION 3.03. NOTICE OF REDEMPTION..............................................................21
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION....................................................22
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.......................................................22
SECTION 3.06. SECURITIES REDEEMED IN PART.......................................................22
ARTICLE 4. COVENANTS................................................................................22
SECTION 4.01. PAYMENT OF SECURITIES.............................................................22
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS................................................23
SECTION 4.03. COMPLIANCE CERTIFICATE............................................................23
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS......................................................24
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY...................................................24
SECTION 4.06. EXISTENCE.........................................................................24
SECTION 4.07. CALCULATION OF ORIGINAL ISSUE DISCOUNT AND ADDITIONAL INTEREST....................25
SECTION 4.08. PAYMENT LIMITATIONS...............................................................25
SECTION 4.09. LIMITATION ON INDEBTEDNESS........................................................25
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ARTICLE 5. SUCCESSOR CORPORATION....................................................................28
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.....................................28
ARTICLE 6. DEFAULTS AND REMEDIES....................................................................29
SECTION 6.01. EVENTS OF DEFAULT.................................................................29
SECTION 6.02. ACCELERATION......................................................................30
SECTION 6.03. OTHER REMEDIES....................................................................31
SECTION 6.04. WAIVER OF PAST DEFAULTS...........................................................31
SECTION 6.05. CONTROL BY MAJORITY...............................................................31
SECTION 6.06. LIMITATION ON SUITS...............................................................32
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT..............................................32
SECTION 6.08. COLLECTION SUIT BY TRUSTEE........................................................32
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM..................................................32
SECTION 6.10. PRIORITIES........................................................................33
SECTION 6.11. UNDERTAKING FOR COSTS.............................................................34
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS...........................................34
SECTION 6.13. ADDITIONAL INTEREST...............................................................34
ARTICLE 7. TRUSTEE..................................................................................36
SECTION 7.01. DUTIES OF TRUSTEE.................................................................36
SECTION 7.02. RIGHTS OF TRUSTEE.................................................................37
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE......................................................38
SECTION 7.04. TRUSTEE'S DISCLAIMER..............................................................39
SECTION 7.05. NOTICE OF DEFAULTS................................................................39
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.....................................................39
SECTION 7.07. COMPENSATION AND INDEMNITY........................................................39
SECTION 7.08. REPLACEMENT OF TRUSTEE............................................................40
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER.......................................................41
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.....................................................42
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.................................42
ARTICLE 8. DISCHARGE OF INDENTURE...................................................................42
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES..............................................42
SECTION 8.02. REPAYMENT TO THE COMPANY..........................................................42
ARTICLE 9. AMENDMENTS...............................................................................43
SECTION 9.01. WITHOUT CONSENT OF HOLDERS........................................................43
SECTION 9.02. WITH CONSENT OF HOLDERS...........................................................44
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT...............................................45
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS............................45
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.............................................45
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES...........................................45
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.................................................46
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ARTICLE 10. [INTENTIONALLY OMITTED]..................................................................46
ARTICLE 11. SUBORDINATION...........................................................................46
SECTION 11.01. SUBORDINATION.....................................................................46
SECTION 11.02 PAYMENTS..........................................................................46
SECTION 11.03. INSOLVENCY; BANKRUPTCY; ETC.......................................................47
SECTION 11.04. STANDSTILL........................................................................48
SECTION 11.05. NO IMPAIRMENT.....................................................................49
SECTION 11.06. RECOVERIES........................................................................50
SECTION 11.07. PAYMENTS TO AGENT BANK............................................................50
SECTION 11.08. RIGHTS OF TRUSTEE.................................................................50
ARTICLE 12. [INTENTIONALLY OMITTED].................................................................51
ARTICLE 13. MISCELLANEOUS...........................................................................52
SECTION 13.01. TRUST INDENTURE ACT...............................................................52
SECTION 13.02. NOTICES...........................................................................52
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.......................................53
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT................................53
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.....................................53
SECTION 13.06. SEPARABILITY CLAUSE...............................................................54
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR......................................54
SECTION 13.08. GOVERNING LAW.....................................................................54
SECTION 13.09. NO RECOURSE AGAINST OTHERS........................................................54
SECTION 13.10. RECORD DATE FOR VOTE OR CONSENT OF HOLDERS........................................54
SECTION 13.11. SUCCESSORS........................................................................54
SECTION 13.12. MULTIPLE ORIGINALS................................................................54
EXHIBIT A -- Form of Security
EXHIBIT B -- Form of Institutional Accredited Investor Letter
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THIS INDENTURE, dated as of May 14, 2003, is between Hanover Compressor
Company, a Delaware corporation (the "COMPANY"), and Wachovia Bank, National
Association, a national banking association, as trustee (hereinafter, in such
capacity, the "TRUSTEE").
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's Zero Coupon
Subordinated Notes due March 31, 2007:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ADDITIONAL INTEREST" means Event of Default Interest and Excess Leverage
Interest.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"BANK AGENT" means with respect to any Senior Debt Agreement, the lead
agent for the lenders and/or creditors thereunder.
"BANKRUPTCY LAW" means the Bankruptcy Reform Act of 1978, as codified under
Title 11 of the United States Code, and the bankruptcy rules promulgated
thereunder, as the same may be in effect from time to time, or any similar
Federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of such board.
"BUSINESS DAY" means each day of the year on which banking institutions are
not required or authorized to close in The City of New York, New York or the
city in which the Corporate Trust Office is located.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"COMPANY" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and,
thereafter, shall mean such successor. The foregoing sentence shall likewise
apply to any subsequent such successor or successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
delivered to the Trustee and signed in the name of the Company by its Chairman
of the Board, any Vice Chairman, its President or any Vice President, and by its
Treasurer, an Assistant Treasurer, its Controller, an Assistant Controller, its
Secretary or an Assistant Secretary.
"CONSOLIDATED EBITDA" means for any period, with respect to any Person, the
sum of, without duplication, (a) Consolidated Earnings Before Interest and Taxes
for such Person for such period plus (b) all amounts attributable to
depreciation and amortization, determined in accordance with GAAP (to the extent
such amounts have been deducted in determining Consolidated Earnings Before
Interest and Taxes for such period) plus (c) all amounts classified as
extraordinary charges for such period (to the extent such amounts have been
deducted in determining Consolidated Earnings Before Interest and Taxes for such
period) plus (d) cash dividends received by Holdings or any Restricted
Subsidiary from any Joint Venture or from any Unrestricted Subsidiary or
Unqualified Subsidiary that has any Non-Recourse Indebtedness outstanding (to
the extent such amounts have been deducted in determining Consolidated Earnings
Before Interest and Taxes for such period) plus (e) any non-recurring non-cash
expenses or losses (including, non-cash currency charges) (to the extent such
amounts have been deducted in determining Consolidated Earnings Before Interest
and Taxes for such period), and minus (a) any increase in Consolidated Earnings
Before Interest and Taxes to the extent that such increase is a result of the
actions underlying the charges referred to in clause (e) above subsequent to the
fiscal quarter in which the relevant non-cash expenses or losses were reflected
as a charge in the statement of Consolidated Earnings Before Interest and Taxes,
all as determined on a consolidated basis and (b) all amounts classified as
extraordinary income for such period (to the extent such amounts have been
included in determining Consolidated Earnings Before Interest and Taxes for such
period); PROVIDED that, if during such period such Person shall have made a
Material Acquisition, Consolidated EBITDA for such period shall be calculated
after giving pro forma effect to such Material Acquisition as if such Material
Acquisition had occurred on the first day of such period; PROVIDED FURTHER that,
the foregoing proviso shall have effect only if the Trustee (as defined herein)
has been furnished with unaudited, or, if available, audited, consolidated
financial statements of the acquired property for such period, such financial
statements to include the balance sheet and statements of income and cash flows
reflecting the historical performance of the acquired property for such period
to the extent applicable. As used in this definition, "Material Acquisition"
means any acquisition of property or series of related acquisitions of property
that (a) constitutes assets or constitutes all or substantially all of the
equity interests of a Person and (b) involves the payment of consideration of at
least $15,000,000. In calculating Consolidated EBITDA, the financial performance
of Joint Ventures, Unrestricted Subsidiaries and Unqualified Subsidiaries that
have any Non-Recourse Indebtedness outstanding shall be disregarded except as
provided in clause (d) above. All capitalized terms used in this definition
shall have the meanings assigned to such terms in the Credit Agreement as in
effect on the Issue Date.
"CONSOLIDATED INDEBTEDNESS" means at a particular date, as to any Person,
the sum of (without duplication) (a) all Indebtedness of such Person and its
Subsidiaries determined
2
on a consolidated basis in accordance with GAAP, excluding (i) Indebtedness in
respect of Financing Leases, (ii) the Seller Note plus the principal amount of
any additional notes issued in payment of interest thereon and (iii) for
purposes of subsections 8.1(a), (c), (d) and (f) of the Credit Agreement only,
Non-Recourse Indebtedness and the Tranche B Balance Sheet Loans plus (b)(i)
Guarantee Obligations of Holdings and its Subsidiaries in respect of
Indebtedness (other than in respect of the Tranche B Balance Sheet Loans), (ii)
the Equipment Lease Tranche A Loans, (iii) the Tranche A Portion of the 2001A
Equipment Lease Transaction and (iv) the Tranche A Portion of the 2001B
Equipment Lease Transaction. All capitalized terms used in this definition shall
have the meanings assigned to such terms in the Credit Agreement as in effect on
the Issue Date.
"CONSOLIDATED LEVERAGE RATIO" means, as used in Section 4.09, the ratio of
Consolidated Indebtedness of the Company to Consolidated EBITDA of the Company
for the four consecutive fiscal quarters most recently then ended for which
financial statements have been published (PROVIDED, HOWEVER, that financial
statements will be deemed to have been published with respect to the first three
fiscal quarters of a fiscal year on the 45th day following such fiscal quarter
and with respect to the last fiscal quarter of a fiscal year on the 90th day
following such fiscal year, whether published or not) and, as used elsewhere in
this Indenture, the ratio of Consolidated Indebtedness of the Company to
Consolidated EBITDA of the Company for the four consecutive fiscal quarters most
recently ended; PROVIDED that for purposes of calculating the numerator of the
foregoing ratio in each instance, Consolidated Indebtedness of the Company shall
exclude seventy percent (70%) of the Indebtedness (as such term is defined in
the Credit Agreement as in effect on the Issue Date) in respect of the TIDES
Debentures.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which at any
particular time its corporate trust business shall be administered, which office
is, at the date hereof, located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Administration.
"CREDIT AGREEMENT" means that certain Credit Agreement, dated as of
December 15, 1997, as amended and restated through December 3, 2001, as further
amended from time to time through the Issue Date, among the Company, certain of
its Subsidiaries named therein from time to time, the lenders named therein and
JPMorgan Chase Bank, as administrative agent, together with any Guaranties
thereof by the Company or its Subsidiaries, in each case, as amended, restated,
supplemented, waived, replaced (whether or not upon termination and whether with
the original lenders or otherwise), restructured, refinanced, increased or
otherwise modified from time to time.
"CURRENCY AGREEMENTS" shall mean in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"CUSTODIAN" shall mean Wachovia Bank, National Association, as custodian
with respect to the Securities in global form, or any successor entity thereto.
3
"DEFAULT" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(1) the United States of America or any state or other political
subdivision thereof; or
(2) any jurisdiction in which the Company conducts all or any part of
its business, or which asserts jurisdiction over any properties of the
Company; or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
"GUARANTY" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
Indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (1) for the purchase or payment of such
Indebtedness or obligation, or (2) to maintain any working capital or other
balance sheet condition or any income statement condition of any other
Person or otherwise to advance or make available funds for the purchase or
payment of such Indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness or
obligation of the ability of any other Person to make payment of the
Indebtedness or obligation; or
4
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the obligor under
any Guaranty, the Indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HOLDER" means a Person in whose name a Security is registered on the
Registrar's books.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and
other financial institutions (whether or not representing obligations for
borrowed money);
(f) swaps of such Person;
(g) the principal or lease balance outstanding under Synthetic Leases;
and
(h) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (g) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (h) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
5
"INSOLVENCY PROCEEDING" means (a) any case, action, or proceeding before
any court or other Governmental Authority having jurisdiction over the
applicable Person or its assets relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up, or relief of
debtors or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other similar arrangement in respect of
its creditors generally or any substantial portion of its creditors; in each
case whether undertaken under Federal (including the Bankruptcy Law), state, or
foreign law.
"INTEREST RATE AGREEMENT" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"ISSUE DATE" of any Security means May 14, 2003.
"ISSUE PRICE" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is
issued as set forth on the face of the Security, as adjusted to reflect any
Offset Prepayment.
"LEGAL HOLIDAY" is any day other than a Business Day. If any specified date
(including a date for giving notice) is a Legal Holiday, the action shall be
taken on the next succeeding date that is not a Legal Holiday, and to the extent
applicable no Original Issue Discount or interest, if any, shall accrue for the
intervening period.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"NON-U.S. PERSON" means a Person that is not a U.S. Person.
"OFFICER" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller or the Secretary or an Assistant Secretary
of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Controller, an
Assistant Controller, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"OFFSET PREPAYMENT" means an amount owed by a Schlumberger Holder or any of
its Affiliates to the Company or any of its Affiliates, which amount may be
offset against Additional Interest, interest, if any, a portion of the Issue
Price and accrued Original Issue
6
Discount in accordance with the terms of the Offset Rights Agreement dated May
14, 2003 between Schlumberger Technology Corporation and the Company.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 13.04 and 13.05, from legal counsel. The counsel may be an
employee of, or counsel to, the Company reasonably acceptable to the Trustee.
"ORIGINAL ISSUE DISCOUNT" of any Security means the difference between the
Principal Amount and the Issue Price of the Security as set forth on the face of
the Security. For purposes of this Indenture and the Securities, accrual of
Original Issue Discount shall be calculated on the basis of a 360-day year of
twelve 30-day months.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, or government or any agency or political subdivision thereof.
"PRINCIPAL" or "PRINCIPAL AMOUNT" of a Security means the principal amount
at Stated Maturity as set forth on the face of such Security, or on Schedule A
thereto in the case of a Security in global form.
"QIB" means "qualified institutional buyer" as that term is defined in Rule
144A.
"REDEMPTION DATE" means a date specified for redemption of the Securities
in accordance with the terms of the Securities and Section 3.01 of this
Indenture.
"REDEMPTION PRICE" shall have the meaning set forth in paragraph 5 of the
Securities.
"REFINANCING INDEBTEDNESS" means Indebtedness that is incurred to refund,
refinance, replace, exchange, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "REFINANCE," "REFINANCES" and
"REFINANCED" shall have a correlative meaning) any Indebtedness existing on the
Issue Date or incurred in compliance with Section 4.09 of this Indenture
(including Indebtedness of the Company that refinances Indebtedness of any
Subsidiary of the Company and Indebtedness of any Subsidiary of the Company that
refinances Indebtedness of the Company or another Subsidiary of the Company)
including Indebtedness that refinances Refinancing Indebtedness, PROVIDED,
HOWEVER, that such Refinancing Indebtedness is incurred in an aggregate
principal amount (or if issued with original issue discount, an aggregate issue
price) that is equal to or less than the sum of the aggregate principal amount
(or if issued with original issue discount, the aggregate accreted value) then
outstanding of Indebtedness being refinanced (plus, without duplication, any
additional Indebtedness incurred to pay interest or premiums required by the
instruments governing such existing Indebtedness and fees incurred in connection
therewith).
"REGULATION S" means Regulation S as promulgated under the Securities Act.
7
"REORGANIZATION SECURITIES" means (a) debt securities that are issued
pursuant to an Insolvency Proceeding (1) as long as the rights of the holders of
any Senior Debt outstanding at the time of issuance thereof or any debt
securities issued in exchange for such Senior Debt in such Insolvency Proceeding
are not impaired or materially altered and (2) the payment of which is
subordinate and junior at least to the extent provided in Article 11 to the
payment of all Senior Debt outstanding at the time of the issuance thereof and
to the payment of all debt securities issued in exchange for such Senior Debt in
such Insolvency Proceeding (whether such subordination is effected by the terms
of such securities, an order or decree issued in such Insolvency Proceeding, by
agreement of the Holders or otherwise) or (b) equity securities that are issued
pursuant to an Insolvency Proceeding; PROVIDED, in either case, that (x) such
securities are authorized by an order or decree made by a court of competent
jurisdiction in such Insolvency Proceeding (which order or decree states that
the authorization of such securities is intended to give effect to the
subordination of the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Additional Interest, Redemption Price, interest and any other
Subordinated Obligations, if any, pursuant to Article 11 hereof) and (y) the
Securities and such securities are not treated as the same class of securities
as any Senior Debt outstanding at the time of the issuance thereof or any
securities issued in exchange for such Senior Debt in such Insolvency
Proceeding.
"RULE 144" means Rule 144 as promulgated under the Securities Act.
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SCHLUMBERGER" means Schlumberger Limited, a Netherlands Antilles company.
"SCHLUMBERGER HOLDER" means Schlumberger and any direct or indirect
Subsidiary of Schlumberger or any entity that merges or consolidates with or
owns or acquires all of the equity securities or all or substantially all of the
assets of Schlumberger Technology Corporation, or any Subsidiary of such entity.
"SEC" or "COMMISSION" means the Securities and Exchange Commission or any
successor entity.
"SECURITIES" means the Company's Zero Coupon Subordinated Notes due March
31, 2007.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SENIOR DEBT" means all payment obligations (whether now outstanding or
hereafter incurred) of the Company in respect of (a) Indebtedness of the Company
other than (1) the Securities, (2) any Indebtedness that by its terms is
expressly subordinated to the Securities, and (3) any Indebtedness (i) incurred
by the Company that represents all or a portion of the consideration for the
acquisition of all or a portion of the capital stock or assets of any Person and
(ii) which is owing to the Person that sold or otherwise transferred such
capital stock or assets or to an Affiliate of such Person, (b) interest
(including default interest) and premium on
8
the outstanding Indebtedness referred to in clause (a) above, (c) the fees and
commissions (including commitment, agency and letter of credit fees and
commissions) payable pursuant to the Senior Debt Agreements, (d) all other
payment obligations (including costs, expenses, penalties, indemnifications,
damages, liabilities or otherwise of the Company) owing under or arising
pursuant to the Senior Debt Agreements not of the type described in clauses (a)
through (c) above, and (e) post-petition interest on the Indebtedness referred
to in clauses (a) through (d) above accruing subsequent to the commencement of a
proceeding under the Bankruptcy Law (whether or not such interest is allowed as
a claim in such proceeding). Notwithstanding the foregoing and Section 4.09,
Senior Debt shall include (1) all payment obligations of the Company under the
Credit Agreement and (2) all payment obligations of the Company under the
Synthetic Leases and the Synthetic Lease Guarantees. For the avoidance of doubt,
clauses (a) through (e) above shall be treated as separate and independent
criteria, and any payment obligation meeting the criteria in any such clause
shall be treated as "Senior Debt." Senior Debt shall not, however, include trade
accounts payable, tax claims or assessments.
"SENIOR DEBT AGREEMENT" means each instrument or agreement evidencing or
governing the Indebtedness referred to in clause (a) of the definition of Senior
Debt.
"SENIOR DEBT DEFAULT" means any default or event of default by the Company
or its Subsidiaries under any Senior Debt Agreement.
"STATED MATURITY," when used with respect to any Security, means the date
specified in such Security as the fixed date on which an amount equal to the
Principal of such Security is due and payable.
"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 capital stock or other equity interests entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or 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 one or more subsidiaries of such Person (or any combination thereof).
"SYNTHETIC LEASE" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, where
such transaction is considered debt for borrowed money for tax purposes but is
classified as an operating lease in accordance with GAAP. Notwithstanding the
foregoing, any synthetic lease, tax retention operating lease, off-balance sheet
loan or similar off-balance sheet financing product in effect as of the Issue
Date shall continue to be treated as a "SYNTHETIC LEASE" for purposes hereof,
regardless of any change in GAAP.
"SYNTHETIC LEASE GUARANTIES" means Guaranties by the Company of the
obligations of one or more of its Subsidiaries under Synthetic Leases and the
related financing agreements (including credit agreements and debt instruments)
as such Guaranties may be amended, restated, supplemented, waived, replaced
(whether or not upon termination and
9
whether with the original lenders or otherwise), restructured, refinanced,
increased or otherwise modified from time to time.
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture, except as provided in Section 9.03; PROVIDED,
HOWEVER, that if the Trust Indenture Act of 1939 is amended after such date,
"TIA" means, to the extent required by any such amendment, the Trust Indenture
Act of 1939, as so amended.
"TIDES DEBENTURES" means the unsecured debentures junior and subordinate in
right of payment to all the obligations and liabilities of the Company pursuant
to the TIDES Indenture.
"TIDES INDENTURE" means the Indenture, dated as of December 15, 1999,
between the Company and Wilmington Trust Company, as trustee thereunder.
"TRUST OFFICER" means any officer within the corporate trust department of
the Trustee at the Corporate Trust Office, including any vice president,
assistant vice president, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
"TRUSTEE" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent successor or
successors.
"U.S. PERSON" has the meaning specified in Regulation S.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of the Company, all of the
capital stock of which (other than directors' qualifying shares) is owned by the
Company or another Wholly-Owned Subsidiary.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED
TERM IN SECTION
---- ----------
"CLEARSTREAM"...................................................... 2.06(c)
"EUROCLEAR"........................................................ 2.06(c)
"EVENT OF DEFAULT"................................................. 6.01
"EVENT OF DEFAULT INTEREST"........................................ 6.13(a)
"EXCESS LEVERAGE DATE"............................................. 6.13(b)
"EXCESS LEVERAGE INTEREST"......................................... 6.13(b)
"NOTICE OF DEFAULT"................................................ 6.01
"PAYING AGENT"..................................................... 2.03
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DEFINED
TERM IN SECTION
---- ----------
"REGISTRAR"........................................................ 2.03
"RESTRICTED SECURITIES"............................................ 2.06(c)
"RESTRICTED SECURITY LEGEND"....................................... 2.06(c)
"SUBORDINATED OBLIGATIONS"......................................... 11.01
"VOIDABLE TRANSFER"................................................ 11.06
SECTION 1.03. 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:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) the term "merger" includes a statutory compulsory share exchange
and a conversion of a corporation into a limited liability company, a
partnership or other entity and vice versa;
11
(6) references to statutes, rules or regulations include any successor
statute, rule or regulation, as the case may be;
(7) the masculine gender includes the feminine and the neuter; and
(8) words in the singular include the plural, and words in the plural
include the singular.
ARTICLE 2.
THE SECURITIES
SECTION 2.01. FORM AND DATING.
Other than as provided in Section 2.06, the Securities and the Trustee's
certificate of authentication for the Securities shall be substantially in the
form of EXHIBIT A, which is a part of this Indenture. In addition to such
legends as may be required by Section 2.06, the Securities may have notations,
legends or endorsements required by law, stock exchange rule or usage, PROVIDED
that any such notation, legend or endorsement required by usage is in a form
reasonably acceptable to the Company. The Company shall provide any such
notations, legends or endorsements to the Trustee in writing. Each Security
shall be dated the date of its authentication.
Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers, exchanges or redemptions permitted hereby. Any endorsement of a
Security in global form to reflect the amount of any increase or decrease in the
amount of outstanding Security represented thereby shall be made by the Trustee
or the Custodian, at the direction of the Trustee, in accordance with the terms
hereof and in such manner and upon instructions given by the Holder of such
Security in accordance with this Indenture. Payment of Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Additional Interest, Redemption
Price or interest, if any, on any Security in global form shall be made to the
Holder of such Security.
A Security may be issued in any denomination.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, one of its Vice Chairmen, its President or one of its Vice
Presidents. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and
12
delivery of such Securities or did not hold such offices at the date of
authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue in
an aggregate Principal Amount of $262,621,810 upon a Company Order without any
further action by the Company. The aggregate Principal Amount of Securities
outstanding at any time may not exceed the amount set forth in the foregoing
sentence, except as provided in Section 2.07 hereof. The aggregate Principal
Amount of Securities outstanding from time to time may be reduced as a result of
any Offset Prepayments. The ability of the Schlumberger Holder to effect an
Offset Prepayment shall terminate once the Schlumberger Holder owns less than
all of the Securities.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an agent to deal with Holders or an
Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("REGISTRAR") and an
office or agency where Securities may be presented for purchase or payment
("PAYING AGENT"). The Registrar shall keep a register of the Securities and of
their transfer and exchange. The Company may appoint and have one or more
co-registrars and one or more additional paying agents. The term Paying Agent
includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar (if not the Trustee or an Affiliate of
the Trustee). The agreement shall implement the provisions of this Indenture
that relate to such agent and the Security (including the provisions set forth
in Article 11). The Company shall notify the Trustee in writing of the name and
address of any such agent. If the Company fails to maintain a Registrar or
Paying Agent, the Trustee shall act as such to the extent that it determines
that it may do so and shall be entitled to appropriate compensation therefor
pursuant to Section 7.07 hereof. The Company or an Affiliate of the Company may
act as Paying Agent, Registrar or co-registrar.
The Company initially appoints the Trustee as Registrar and Paying Agent
and to act as Custodian in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD CASH AND SECURITIES IN TRUST.
13
Except as otherwise provided herein, prior to 11:00 a.m., New York City
time, on each due date of payments in respect of any Security, the Company shall
deposit with the Paying Agent cash sufficient to make such payments when such
payments are due. The Company shall require the Paying Agent (if not the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all cash held by the Paying Agent for the
making of payments in respect of the Securities and shall notify the Trustee in
writing of any default by the Company in making any such payment. At any time
during the continuance of any such default, the Trustee may require the Paying
Agent to, and the Paying Agent shall, upon the written request of the Trustee,
forthwith pay to the Trustee all cash so held in trust. If the Company or an
Affiliate of the Company acts as Paying Agent, it shall segregate the cash held
by it as Paying Agent and hold it as a separate trust fund. The Company at any
time may require the Paying Agent to pay all cash held by it to the Trustee and
to account for any funds and securities disbursed by it. Upon doing so, the
Paying Agent shall have no further liability for such cash. This Section 2.04 is
not intended in any way to limit or impair the rights of the holders of the
Senior Debt under Article 11.
SECTION 2.05. 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
Holders. If the Trustee is not the Registrar, the Company shall cause to be
furnished to the Trustee at least semiannually on April 20 and October 20 a
listing of Holders dated within ten days of the date on which the list is
furnished 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 Holders.
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY.
(a) Upon surrender for registration of transfer of any Security at any
office or agency of the Company designated as Registrar or co-registrar pursuant
to Section 2.03 hereof and satisfaction of the requirements for such transfer
set forth in this Section 2.06, the Company shall execute, and upon receipt of a
Company Order, the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate Principal Amount and bearing
such restrictive legends as may be required by this Indenture.
Securities may be exchanged for a like aggregate Principal Amount of
Securities of other authorized denominations. Securities to be exchanged shall
be surrendered at any office or agency to be maintained by the Company
designated as Registrar or co-registrar pursuant to Section 2.03 hereof and the
Company shall execute and register, and the Trustee shall authenticate and
deliver in exchange therefor, the Security or Securities which the Holder making
the exchange shall be entitled to receive, bearing registration numbers not
contemporaneously outstanding and such restrictive legends as may be required by
this Indenture.
14
All Securities presented for registration of transfer or for exchange into
like Securities, repurchase, redemption or payment shall (if so required by the
Company, the Trustee, the Registrar or any co-registrar) be duly endorsed by, or
be accompanied by a written instrument or instruments of transfer in form
satisfactory to the Company, the Registrar and the Trustee, duly executed by the
Holder or such Holder's attorney duly authorized in writing.
No service charge shall be charged to the Holder for any exchange for like
Securities or registration of transfer of Securities, but the Company may
require payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Registrar or any co-registrar shall
be required to exchange for like Securities or register a transfer of (i) any
Securities for a period of 15 days next preceding the mailing of notice of
Securities to be redeemed, or (ii) any Securities or portions thereof selected
or called for redemption.
All Securities issued upon any transfer or exchange for like Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture as the Securities surrendered
upon such exchange or transfer.
(b) So long as the Securities are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Securities that are so
eligible may be represented by a Security in global form registered in the name
of the Depositary or the nominee of the Depositary, except as otherwise
specified below. The transfer and exchange of beneficial interests in such
Security in global form shall be effected through the Depositary in accordance
with this Indenture and the procedures of the Depositary therefor.
Any Security in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Securities to be tradeable on any market developed for trading of securities
pursuant to Rule 144A or Regulation S or required to comply with any applicable
law or any regulation thereunder or with the rules and regulations of any
securities exchange or automated quotation system upon which the Securities may
be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Securities are subject.
(c) Every Security that bears or is required under this Section 2.06(c) to
bear the Restricted Securities Legend (the "RESTRICTED SECURITIES") shall be
subject to the restrictions on transfer set forth in this Section 2.06(c) unless
such restrictions on transfer shall be waived by written consent of the Company,
and the Holder of each such Transfer Restricted Security, by such Holder's
acceptance thereof, agrees to be bound by all such restrictions on transfer. As
used in Section 2.06(c), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
15
Until transferred under Rule 144(k) under the Securities Act (or any
successor provision), any certificate evidencing such Security (and all
securities issued in exchange therefor or substitution thereof) shall bear a
legend in substantially the form set forth on the face of the Security in
EXHIBIT A (the "RESTRICTED SECURITY LEGEND"), unless such Security has been sold
pursuant to a registration statement that has been declared effective under the
Securities Act (and which continues to be effective at the time of such
transfer), or unless otherwise agreed by the Company in writing, with written
notice thereof accompanied by an Opinion of Counsel to the Trustee.
Any Security (or security issued in exchange or substitution therefor) as
to which the conditions for removal of the Restricted Security Legend have been
satisfied may, upon surrender of such Security for exchange to the Registrar in
accordance with the provisions of this Section 2.06, be exchanged for a new
Security or Securities, of like tenor and aggregate Principal Amount, which
shall not bear the Restricted Security Legend required by this Section 2.06(c).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in Section 2.06(b) and in this Section 2.06(c)), a Security
in global form may not be transferred as a whole or in part except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary. Initially, one or more Securities in global form shall be issued to
the Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Custodian for Cede & Co. Each Security in
global form, to the extent that it represents the interests of Non-U.S. Persons,
will be held by Cede & Co. for the accounts of designated agents on behalf of
the Euroclear System ("EUROCLEAR") and Clearstream Banking, Societe Anonyme
("CLEARSTREAM"). During the 40-day distribution compliance period (as defined in
Regulation S), Non-U.S. Persons holding beneficial interests in a Security in
global form may do so only through Euroclear or Clearstream, and any resale or
transfer of any such interest to a U.S. Person shall only be permitted if such
Person is a QIB or is the Company or an Affiliate of the Company.
If at any time the Depositary for a Security in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary is not appointed by the Company within
ninety (90) days after the Company receives such notice, or if the Company so
elects, the Company will execute, and the Trustee, upon receipt of an Officers'
Certificate and Company Order for the authentication and delivery of Securities,
will authenticate and deliver, Securities in certificated or definitive form, in
aggregate Principal Amount equal to the Principal Amount of the Security in
global form, in exchange for such Security in global form.
Securities in certificated form issued in exchange for all or a part of a
Security in global form pursuant to this Section 2.06 shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee in writing. Upon execution and authentication, the Trustee
16
shall deliver such Securities in certificated form to the Persons in whose names
such Securities in certificated form are so registered.
At such time as all interests in a Security in global form have been
redeemed, canceled or repurchased or exchanged for Securities in certificated
form, or transferred to a transferee who receives Securities in certificated
form, such Security in global form shall, upon receipt thereof, be canceled by
the Trustee in accordance with standing procedures and instructions existing
between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Security in global form is exchanged for
Securities in certificated form, redeemed, repurchased or canceled, the
Principal Amount of the Security in global form shall, in accordance with the
terms hereof and the standing procedures and instructions existing between the
Depositary and the Custodian, be appropriately reduced and an endorsement shall
be made on such Security in global form, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction.
(d) Any Security that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act, is
purchased or owned by the Company or any Affiliate thereof may not be resold by
the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Security no longer being
"restricted securities" (as defined under Rule 144).
(e) Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States Federal or state securities law.
The Trustee shall have no obligation or duty to monitor, determine or
inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Depositary
participants or beneficial owners of interests in a Security in global form)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
SECTION 2.07. REPLACEMENT SECURITIES.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity bond that is sufficient in
the judgment of the Company and the Trustee to protect and save each of them
harmless, along with any agent from any loss that any of them may suffer if a
Security is replaced, the Company shall execute and, upon its receipt of a
Company Order, the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such
17
destroyed, lost or stolen Security, a new Security of like tenor and Principal
Amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be repurchased or redeemed
by the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay, repurchase or redeem such Security, as
the case may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may, as a condition to such issuance, require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.
Securities outstanding at any time are all the Securities authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those paid pursuant to Section 4.01 hereof, those replaced or paid
pursuant to Section 2.07 hereof and those described in this Section 2.08 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate thereof holds the Security; PROVIDED, HOWEVER, that in determining
whether the Holders of the requisite Principal Amount of Securities have given
or concurred in any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trust Officer actually knows to be so owned shall be so
disregarded unless written notice of such ownership is received by the Trustee
at the Corporate Trust Office of the Trustee in accordance with Section 13.02
hereof and such notice references the Securities and this Indenture. For
purposes of the foregoing proviso, the term "Affiliate" shall not include any
Schlumberger Holder. Subject to the foregoing, only Securities outstanding at
the time of such determination shall be considered in any such determination
(including, without limitation, determinations pursuant to Articles 6 and 9
hereof).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a protected purchaser.
18
If the Paying Agent holds, in accordance with this Indenture, prior to
11:00 a.m., New York City time, on a Redemption Date or on Stated Maturity, cash
sufficient to pay Securities payable on that date, then on and after that date
such Securities shall cease to be outstanding and Original Issue Discount,
Additional Interest and interest, if any, on such Securities shall cease to
accrue; PROVIDED, that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
SECTION 2.09. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may execute,
and upon receipt of a Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03
hereof, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities, the Company shall execute and upon receipt of a
Company Order the Trustee shall authenticate and deliver in exchange therefor a
like Principal Amount of definitive Securities of authorized denominations.
Until so exchanged, the temporary Securities shall in all respects be entitled
to the same benefits under this Indenture as definitive Securities.
SECTION 2.10. CANCELLATION.
All Securities surrendered for payment, purchase, redemption or
registration of transfer or exchange for the Securities shall, if surrendered to
any Person other than the Trustee, be delivered to the Trustee and shall be
promptly canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly canceled by the Trustee. The Company may not
issue new Securities to replace Securities it has paid for or delivered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures.
SECTION 2.11. PERSONS DEEMED OWNERS.
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Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name such Security is registered as the owner of such Security
for the purpose of receiving payment of Principal Amount, Issue Price, accrued
Original Issue Discount, accrued Additional Interest, Redemption Price or
interest, if any, in respect thereof, and for all other purposes whatsoever,
whether or not such Security be overdue, and none of the Company, the Trustee or
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 2.12. CUSIP NUMBERS.
The Company in issuing the Securities 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 Securities or as contained in any notice of redemption
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company will promptly notify the Trustee of
any change in the "CUSIP" numbers.
ARTICLE 3.
REDEMPTION
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE.
The Company, at its option, may redeem the Securities at any time on or
after March 31, 2006, in accordance with the provisions of paragraphs 5 and 7 of
the Securities. If the Company elects to redeem Securities pursuant to paragraph
5 of the Securities, it shall notify the Trustee in writing of the Redemption
Date, the Principal Amount of Securities to be redeemed and the Redemption
Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 in the case of any redemption of the Securities, at least 5
Business Days prior to the giving of a notice of redemption to the Holders
unless a shorter notice shall be satisfactory to the Trustee. The Company may
revoke its notice to the Trustee at any time prior to the giving of a notice of
redemption to any Holder.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities held in definitive form are to be redeemed
pursuant to Section 3.01, the Trustee shall select the definitive Securities to
be redeemed pro rata or by lot or by another method the Trustee considers fair
and appropriate (as long as such method is not prohibited by the rules of any
securities exchange or quotation system on which the Securities are then listed
or quoted) all in accordance with customary industry practice. The Trustee shall
make the selection before the giving of a notice of redemption to each Holder of
Securities from outstanding definitive Securities not previously called for
redemption. Except as expressly stated otherwise, provisions of this Indenture
that apply to definitive Securities called for redemption also apply to portions
of definitive Securities called for
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redemption. The Trustee shall notify the Company promptly of the definitive
Securities or portions of definitive Securities to be redeemed.
Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 20 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and Principal Amounts of the particular Securities to be
redeemed;
(6) that Original Issue Discount, Additional Interest and interest, if
any, on Securities called for redemption will cease to accrue on and after the
Redemption Date; and
(7) the CUSIP number or numbers for the Securities.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense; PROVIDED that the
Company has delivered to the Trustee, at least 5 Business Days prior to the
giving of a notice of redemption to each Holder of Securities, 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.
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SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is given, pursuant to Section 3.03 hereof,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price stated in the notice.
Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
Prior to 11:00 a.m., New York City time, on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or an Affiliate
of the Company is the Paying Agent, shall segregate and hold in trust) cash
sufficient to pay the Redemption Price of all Securities to be redeemed on that
date other than Securities or portions of Securities called for redemption which
prior thereto have been delivered by the Company to the Trustee for
cancellation, and on or after the Redemption Date (unless the Company shall
default in the payment of the Securities at the Redemption Price), Original
Issue Discount, Additional Interest and interest, if any, on the Securities or
portion of Securities called for redemption shall cease to accrue and, except as
provided in Section 8.02 hereof, to be entitled to any benefit or security under
this Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the Redemption Price thereof to (but
excluding) the Redemption Date plus any unpaid interest, if any.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder a new
Security in an authorized denomination equal in Principal Amount to the
unredeemed portion of the Security surrendered.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Company shall promptly pay or cause to be paid all payments in respect
of the Securities on the dates and in the manner provided in the Securities or
pursuant to this Indenture. Principal Amount, Issue Price, accrued Original
Issue Discount, accrued Additional Interest, Redemption Price and interest, if
any, shall be considered paid on the applicable date due if prior to 11:00 a.m.,
New York City time, on such date the Trustee or the Paying Agent holds, in
accordance with this Indenture, cash sufficient to pay all such amount then due.
The Company shall pay interest on overdue amounts at the rate set forth in
paragraph 1 of the Securities and it shall pay interest on overdue interest at
the same rate compounded semiannually (to the extent that the payment of such
interest shall be legally enforceable), which interest on overdue interest shall
accrue from the date such amounts became overdue and shall be
22
in lieu of, and not in addition to, the continued accrual of Original Issue
Discount and Additional Interest.
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS.
The Company will deliver to the Trustee (a) as soon as available and in any
event within 120 days after the end of each fiscal year of the Company (i) a
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such fiscal year and the related consolidated statements of operations,
stockholders' equity and cash flows for such fiscal year, all audited by an
independent public accountant of nationally recognized standing and (ii) a
report containing a management's discussion and analysis of the financial
condition and results of operations and a description of the business and
properties of the Company and (b) as soon as available and in any event within
60 days after the end of each of the first three quarters of each fiscal year of
the Company (i) an unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal quarter and the related unaudited
statements of operations and cash flows for the portion of the fiscal year
ending with such fiscal quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations of
the Company; PROVIDED that the foregoing shall not be required for any fiscal
year or quarter, as the case may be, with respect to which the Company files
with the Trustee an annual report or quarterly report, as the case may be,
pursuant to the third paragraph of this Section 4.02.
At any time the Company is not subject to either Section 13 or 15(d) of the
Exchange Act, the Company shall at the request of any Holder provide to such
Holder and any prospective purchaser designated by such Holders, as the case may
be, such information, if any, required by Rule 144A(d)(4) under the Securities
Act.
The Company shall file with the Trustee, within 15 days after it files such
annual and quarterly reports, information, documents and other reports with the
SEC, copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may by
rules and regulations prescribe) which the Company is required to file with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act.
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 the information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company, an Officers' Certificate in which one of the
two Officers signing such certificate is either the principal executive officer,
principal financial officer or principal accounting officer of the Company,
stating whether or not to the knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement
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of notice provided hereunder) and, if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which the
signers may have knowledge.
The Company will deliver to a Trust Officer of the Trustee, as soon as
possible and in any event within five days, upon becoming aware of any Default,
any Event of Default or any Senior Debt Default, an Officers' Certificate
specifying with particularity such Default, Event of Default or Senior Debt
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 4.03 shall be delivered
to a Trust Officer of the Trustee at its Corporate Trust Office.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall appoint in the Borough of Manhattan, The City of New
York, an office or agency where Securities shall be presented or surrendered for
payment, and the Company shall appoint an office or agency where Securities may
be surrendered for registration of transfer, exchange, purchase or redemption
and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Corporate Trust Office shall be
the office or agency for all of the aforesaid purposes (other than the place
where Securities shall be presented or surrendered for payment) unless the
Company shall appoint some other office or agency for such purposes and shall
give prompt written notice to the Trustee of the location, and any change in the
location, of such other 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.
The Company may also from time to time designate one or more other offices
or agencies where the Securities 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, where Securities shall be presented or
surrendered for payment. The office of the Trustee located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ shall be the initial office where
Securities shall be presented or surrendered for payment.
SECTION 4.06. EXISTENCE.
Subject to Article 5 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence under the laws of its
24
jurisdiction of incorporation and rights (charter and statutory); PROVIDED,
HOWEVER, that the Company shall not be required to preserve any such right if
the Company shall determine that the maintenance thereof is no longer desirable
in the conduct of the business of the Company and, in any event, that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 4.07. CALCULATION OF ORIGINAL ISSUE DISCOUNT AND ADDITIONAL
INTEREST.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of Original Issue
Discount (including daily rates and accrual periods) accrued on the outstanding
Securities as of the end of such year, (ii) a written notice specifying the
amount of any Additional Interest (including daily rates and accrual periods)
accrued on the outstanding Securities as of the end of such year, and (iii) such
other specific information relating to such Original Issue Discount and any
Additional Interest as may then be relevant under the Internal Revenue Code of
1986, as amended from time to time.
SECTION 4.08. PAYMENT LIMITATIONS.
The Company covenants that it will not enter into or become subject to any
restriction on the payment of the Principal Amount, Issue Price, accrued
Original Issue Discount, accrued Additional Interest, Redemption Price or
interest, if any, on any Securities other than (a) the provisions of Article 2,
(b) the provisions of Article 11 and (c) any such restriction prohibiting
optional prepayments, optional redemptions or optional purchases of the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Additional Interest, Redemption Price or interest, if any, on any Securities
(whether by way of offset (other than an Offset Prepayment) or otherwise).
SECTION 4.09. LIMITATION ON INDEBTEDNESS.
(a) The Company shall not, and shall not permit any of its Subsidiaries to,
issue, create, assume, guarantee, incur or otherwise become liable for any
Indebtedness; PROVIDED, HOWEVER, that the Company and any Subsidiary of the
Company may issue, create, assume, guarantee, incur or otherwise become liable
for Indebtedness if on the date of the issuance, creation, assumption, guarantee
or incurrence thereof: (1) the Consolidated Leverage Ratio does not exceed 5.6
to 1.0 after giving effect to the incurrence of such Indebtedness (including
after giving effect to the repayment of any Indebtedness with the proceeds of
such incurred Indebtedness) and (2) no Default or Event of Default has occurred
or is continuing or would occur as a consequence of incurring the Indebtedness
and the application of the proceeds thereof.
(b) Section 4.09(a) shall not prohibit the incurrence by the Company
or any of its Subsidiaries of the following Indebtedness:
(i) Indebtedness of the Company owing to and held by any Wholly-Owned
Subsidiary or Indebtedness of a Subsidiary of the Company owing to and held
by the Company or any Wholly-Owned Subsidiary; PROVIDED, HOWEVER, (1) any
25
subsequent issuance or transfer of capital stock or any other event which
results in any such Indebtedness being beneficially held by a Person other
than the Company, or a Wholly-Owned Subsidiary, and (2) any sale or other
transfer of any such Indebtedness to a Person other than the Company, or a
Wholly-Owned Subsidiary, shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by the Company or such Subsidiary, as the
case may be;
(ii) Indebtedness represented by any Refinancing Indebtedness incurred
in respect of any Indebtedness (other than Indebtedness described in
clauses (i), (iv), (v) or (vi)) outstanding as of the Issue Date or
incurred in compliance with Section 4.09;
(iii) Indebtedness of a Subsidiary of the Company incurred and
outstanding on the date on which such Subsidiary of the Company was
acquired by the Company (other than Indebtedness incurred (A) to provide
all or any portion of the funds utilized to consummate the transaction or
series of related transactions pursuant to which such Subsidiary of the
Company became a Subsidiary of the Company or was otherwise acquired by the
Company or (B) otherwise in connection with, or in contemplation of, such
acquisition); PROVIDED, HOWEVER, that at the time such Subsidiary of the
Company is acquired, the Company would have been able to incur $1.00 of
additional Indebtedness pursuant to Section 4.09(a) after giving effect to
the incurrence of such Indebtedness pursuant to this clause (iii) and after
calculating Consolidated EBITDA giving pro forma effect to such acquisition
as if such acquisition had occurred on the first day of the applicable
twelve month period used in calculating the Consolidated Leverage Ratio;
(iv) Indebtedness under Currency Agreements and Interest Rate
Agreements; PROVIDED that in the case of Currency Agreements and Interest
Rate Agreements, such Currency Agreements and Interest Rate Agreements are
entered into for bona fide hedging purposes of the Company or its
Subsidiaries (as determined in good faith by the Board of Directors or
senior management of the Company) and substantially correspond in terms of
notional amount, duration, currencies and interest rates, as applicable, to
Indebtedness of the Company or its Subsidiaries on customary terms entered
into in the ordinary course of business and incurred without violation of
the terms of this Indenture;
(v) Indebtedness incurred in respect of workers' compensation claims,
self-insurance obligations, performance, surety and similar bonds and
completion guarantees provided by the Company or a Subsidiary of the
Company in the ordinary course of business;
(vi) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in
the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business, PROVIDED, HOWEVER, that such Indebtedness is
extinguished within five Business Days of incurrence; and
26
(vii) in addition to the items referred to in clauses (i) through (vi)
above, Indebtedness of the Company and its Subsidiaries in an aggregate
outstanding principal amount which, when taken together with the principal
amount of all other Indebtedness incurred pursuant to this clause (vii) and
then outstanding, will not exceed $100.0 million (it being understood that
any Indebtedness incurred pursuant to this clause (vii) shall cease to be
deemed to be incurred or outstanding for purposes hereof but shall be
deemed incurred for purposes of Section 4.09(a) from and after the first
date on which the Company or its Subsidiaries could have incurred such
Indebtedness under Section 4.09(a) without reliance on this clause (vii)).
(c) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness incurred pursuant to and in
compliance with, this Section 4.09:
(1) (A) Indebtedness permitted by Section 4.09 need not be
permitted solely by reference to one provision permitting such
Indebtedness but may be permitted in part by one such provision
and in part by one or more other provisions of Section 4.09
permitting such Indebtedness and (B) in the event that
Indebtedness meets the criteria of more than one of the types of
Indebtedness described in Section 4.09(a) or (b), the Company, in
its sole discretion, will classify such item of Indebtedness and
only be required to include the amount and type of such
Indebtedness in one of such clauses; and
(2) the amount of Indebtedness issued at a price that is less
than the principal amount thereof will be equal to the amount of
the liability in respect thereof determined in accordance with
GAAP.
Accrual of interest, accrual of dividends, the accretion of accreted value, the
payment of interest in the form of additional Indebtedness and the payment of
dividends in the form of additional shares of preferred stock will not be deemed
to be an incurrence of Indebtedness for purposes of this Section 4.09. The
amount of any Indebtedness outstanding as of any date shall be (i) the accreted
value of the Indebtedness in the case of any Indebtedness issued with original
issue discount and (ii) the principal amount or liquidation preference thereof
of any other Indebtedness.
(d) For purposes of determining compliance with this Section 4.09, the U.S.
dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency shall be calculated based on the relevant currency exchange rate in
effect on the date such Indebtedness was incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that if such Indebtedness is incurred to refinance pursuant to Section
4.09(b)(ii) other Indebtedness denominated in a foreign currency, and such
refinancing would cause the restriction in this Section 4.09 to be exceeded if
calculated at the relevant currency exchange rate in effect on the date of such
refinancing, such restriction shall be deemed not to have been exceeded so long
as the principal amount of such Refinancing Indebtedness does not exceed the
principal amount of such Indebtedness being refinanced. Notwithstanding any
other
27
provision of this Section 4.09, the maximum amount of Indebtedness that the
Company may incur pursuant to this Section 4.09 shall not be deemed to be
exceeded solely as a result of fluctuations in the exchange rate of currencies.
The principal amount of any Indebtedness incurred to refinance other
Indebtedness, if incurred in a different currency from the Indebtedness being
refinanced, shall be calculated based on the currency exchange rate applicable
to the currencies in which such Refinancing Indebtedness is denominated that is
in effect on the date of such refinancing.
ARTICLE 5.
SUCCESSOR CORPORATION
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease all or substantially all of its properties
and assets in a single transaction or series of transactions to any Person,
unless:
(i) the successor Person formed by such consolidation or the survivor
of such merger or the Person that acquires by conveyance, transfer or lease all
or substantially all of the properties and assets of the Company, as the case
may be, shall be, immediately after giving effect to such transaction, a solvent
Person organized and existing under the laws of the United States or any state
thereof (including the District of Columbia), and, if the Company is not such
Person, such Person shall expressly assume by an indenture supplemental hereto,
executed and delivered to the Trustee in form reasonably satisfactory to the
Trustee, the due and punctual payment of the Principal Amount, Issue Price,
accrued Original Issue Discount, accrued Additional Interest, Redemption Price
or interest, if any, on the Securities, according to their tenor, and the due
and punctual performance of all of the covenants and obligations of the Company
under the Securities and this Indenture.
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 5 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
The successor Person formed by such consolidation or into which the Company
is merged or the successor Person to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor had been named as the Company herein; and thereafter, except in the
case of a lease, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities.
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ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if any of the following conditions or events
shall occur and be continuing:
(1) except in the case of a redemption, the Company defaults in
the payment of the Principal Amount, Issue Price, accrued Original Issue
Discount or accrued Additional Interest on any Security when the same becomes
due and payable at its Stated Maturity, upon declaration or otherwise;
(2) the Company defaults in the payment of the Redemption Price
on any Security for more than five days after the same becomes due and payable
upon redemption;
(3) the Company defaults in the performance of or compliance with
any term contained in Sections 4.08 and 5.01;
(4) the Company fails to comply with Section 4.09 and such
failure continues for 30 days after the earlier to occur of (x) a senior
financial officer of the Company obtaining knowledge of such failure to comply
with Section 4.09 and (y) the Trustee notifying the Company, or the Holders of
at least 25% in aggregate Principal Amount of the Securities at the time
outstanding notifying the Company and the Trustee, of such failure to comply
with Section 4.09;
(5) the Company fails to comply with any of its agreements or
covenants in the Securities or this Indenture (other than those referred to as
clauses (1) - (4) above) and such failure continues for 90 days after receipt by
the Company of a Notice of Default;
(6) the Company defaults under one or more Senior Debt Agreements
pursuant to which (a) Senior Debt in an aggregate principal amount of
$100,000,000 or more is outstanding or (b) there are commitments thereunder to
provide Senior Debt in an aggregate principal amount of $100,000,000 or more and
as a consequence of such default the Indebtedness under such Senior Debt
Agreements has become, or has been declared, due and payable before its
regularly scheduled dates of payment;
(7) the Company (a) is generally not paying, or admits in writing
its inability to pay, its debts as they become due, (b) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, seeking to
adjudicate it as a bankrupt or insolvent, for liquidation or to take advantage
of any Bankruptcy Law, (c) makes a general assignment for the benefit of its
creditors, (d) consents to the appointment of a custodian, receiver, trustee or
other officer with similar powers with respect to it or with respect to any
substantial part of its property or (e) takes corporate action for the purpose
of any of the foregoing; or
29
(8) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company, a custodian,
receiver, trustee or other officer with similar powers with respect to it or
with respect to any substantial part of its property, or constituting an order
for relief or approving a petition for relief or reorganization or any other
petition in bankruptcy or for liquidation or to take advantage of any Bankruptcy
Law, or ordering the dissolution, winding-up or liquidation of the Company, or
any such petition shall be filed against the Company and such petition shall not
be dismissed within 60 days.
A Default under clause (4) above is not an Event of Default until 30 days
following the earlier to occur of (x) a senior financial officer of the Company
obtaining knowledge of such failure to comply with Section 4.09 and (y) the
Trustee notifying the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notifying the Company
and the Trustee, of such failure to comply with Section 4.09, and in either case
the Company does not cure such Default (and such Default is not waived) within
the 30-day period specified above. A Default under clause (5) above is not an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in aggregate Principal Amount of the Securities at the time
outstanding notify the Company and the Trustee, of the Default and the Company
does not cure such Default (and such Default is not waived) within the time
specified in clause (5) above after actual receipt of such notice (a "NOTICE OF
DEFAULT"). Any such notice must specify the Default, demand that it be remedied
and state that such notice is a Notice of Default.
SECTION 6.02. ACCELERATION.
Subject to the subordination provisions contained in Article 11:
(1) If an Event of Default with respect to the Company described
in Section 6.01(7) (other than an Event of Default described in clause (a) of
Section 6.01(7) or described in clause (e) of Section 6.01(7) by virtue of the
fact that such clause encompasses clause (a) of Section 6.01(7)) or Section
6.01(8) has occurred, concurrently with the Indebtedness under the Credit
Agreement becoming immediately due and payable, the Issue Price, accrued
Original Issue Discount and any accrued Additional Interest on all Securities
shall become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holders.
(2) If any other Event of Default has occurred and is continuing
or if any Event of Default described in the preceding sentence has occurred and
is continuing and the Indebtedness under the Credit Agreement has not become
immediately due and payable, the Trustee by notice to the Company, or the
Holders of at least 25% in aggregate Principal Amount of the Securities at the
time outstanding by notice to the Company and the Trustee, may declare the Issue
Price, accrued Original Issue Discount and any accrued Additional Interest to
the date of declaration on all the Securities to be immediately due and payable.
Upon such a declaration, such Issue Price, accrued Original Issue Discount and
any accrued Additional Interest shall become and be due and payable immediately.
30
The Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding, by notice to the Company and the Trustee (and without notice
to any other Holder), may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree and if all existing
Events of Default have been cured or waived except nonpayment of the Issue
Price, accrued Original Issue Discount and any accrued Additional Interest that
have become due solely as a result of acceleration and if all other amounts due
to the Trustee and the Holders under the Securities and this Indenture have been
paid. No such rescission shall affect any subsequent or other Default or Event
of Default or impair any consequent right.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may, subject
to Article 11, pursue any available remedy to collect the payment of the Issue
Price, accrued Original Issue Discount and any accrued Additional Interest on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture. The Trustee may, subject to Article 11, also pursue any
remedy available to the Holders or the Trustee whether hereunder, under the
Securities or otherwise available to any Holder or the Trustee, at law or
equity.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Holder 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. No
remedy is exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate Principal Amount of
the Securities at the time outstanding, by notice to the Company and the Trustee
(and without notice to any other Holder), may waive an existing Default or Event
of Default and its consequences hereunder except (a) an Event of Default
described in Section 6.01(1) or (2) hereof or, (b) a Default in respect of a
provision that under Section 9.02 hereof cannot be amended without the consent
of each Holder directly affected. When a Default or Event of Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of not less than a majority in aggregate Principal Amount of
the Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with any law or this Indenture or
that the Trustee determines in good faith is unduly prejudicial to the rights of
other Holders or would involve the Trustee in personal liability.
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SECTION 6.06. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Company and a Trust Officer of the
Trustee written notice stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal Amount of
the Securities at the time outstanding make a written request to the Trustee to
pursue the remedy;
(3) such Holder or Holders offer and furnish to the Trustee
reasonable security or indemnity satisfactory to the Trustee against any loss,
liability or expense satisfactory to the Trustee;
(4) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the furnishing of security or
indemnity; and
(5) the Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Holder may not use this Indenture to prejudice the rights of any other
Holder or to obtain a preference or priority over any other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture (other than Article
11), the right of any Holder to receive payment of the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Additional Interest, Redemption
Price or interest, if any, in respect of the Securities held by such Holder, on
or after the respective due dates expressed in the Securities or any date of
redemption, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected adversely without the
consent of each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default described in Section 6.01(1) or (2) hereof occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount owing with
respect to the Securities, the amounts provided for in Section 7.07 hereof and
such further amounts as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation, expenses, disbursements and
advances (including extraordinary fees and expenses) to the Trustee, its agents
and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
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In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Principal Amount, Issue
Price, accrued Original Issue Discount, accrued Additional Interest, Redemption
Price or interest, if any, in respect of the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
any such amount) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Additional
Interest, Redemption Price or interest, if any, and to file such 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 of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any money or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official 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 the
Trustee any amount due 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 7.07 hereof. To the extent that the
payment of any such reasonable compensation, expenses, disbursements, advances
(including extraordinary fees and expenses) of the Trustee, its agents and
counsel, and any other amounts due the Trustee 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 Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claims 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 for amounts due under Section 7.07 hereof;
SECOND: to the holders of Senior Debt in accordance with Article 11 hereof;
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THIRD: subject to Article 11, to Holders for amounts due and unpaid on the
Securities for the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Additional Interest, Redemption Price or interest, if any,
ratably, without preference or priority of any kind, according to such amounts
due and payable on the Securities; and
FOURTH: the balance, if any, to the Company or to such other party as a
court of competent jurisdiction shall direct.
The Trustee may fix a proposed record date and payment date for any payment
to Holders pursuant to this Section 6.10 and shall notify the Company in writing
with respect to such proposed record date and payment date. At least 15 days
before such record date, the Company shall mail to each Holder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
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
Trustee, a court in its discretion may require the filing by any party litigant
(other than the Trustee) 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 to 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,
any suit by a Holder for the enforcement of the payment of the Principal Amount,
accrued Original Issue Discount, accrued Additional Interest, Redemption Price
or interest, if any, on or after the due date expressed in such Security or a
suit by Holders of more than 10% in aggregate Principal Amount of the Securities
at the time outstanding.
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which would
prohibit or forgive the Company from paying all or any portion of the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Additional
Interest or Redemption Price in respect of Securities, as contemplated herein,
or which 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 laws and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 6.13. ADDITIONAL INTEREST.
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(a) From and after the date an Event of Default occurs and is
continuing until all existing Events of Default have been cured or waived,
interest ("EVENT OF DEFAULT INTEREST") in addition to the accrual of Original
Issue Discount shall accrue at 2.0% per annum on a principal amount per Security
equal to (i) the Issue Price plus (ii) the Original Issue Discount plus (iii)
any Additional Interest, in each case, with respect to (ii) and (iii), accrued
to the date immediately prior to the date of the occurrence of an Event of
Default. Such Event of Default Interest shall accrue from the date of the
occurrence of an Event of Default on a semiannual bond equivalent basis using a
360-day year composed of twelve 30-day months, and shall automatically cease to
accrue once all existing Events of Default have been cured or waived.
(b) From and after the date that the Consolidated Leverage Ratio has
exceeded 5.18 to 1.0 as of the end of the two consecutive fiscal quarters most
recently then ended (the "EXCESS LEVERAGE DATE"), interest ("EXCESS LEVERAGE
INTEREST") in addition to the accrual of Original Issue Discount shall accrue at
3.0% per annum on a principal amount per Security equal to (i) the Issue Price
plus (ii) the Original Issue Discount plus (iii) any Additional Interest, in
each case, with respect to (ii) and (iii), accrued to the date immediately prior
to the Excess Leverage Date. Such Excess Leverage Interest shall accrue from the
Excess Leverage Date on a semiannual bond equivalent basis using a 360-day year
composed of twelve 30-day months, and shall automatically cease to accrue once
the Consolidated Leverage Ratio no longer exceeds 5.18 to 1.0. If at any time
following the end of a fiscal quarter during which Excess Leverage Interest
accrued and the Consolidated Leverage Ratio as of the end of such fiscal quarter
is less than or equal to 5.18 to 1.0, the Company shall deliver promptly, but in
any event within five Business Days of the delivery by the Company to the
Trustee of the financial information of the Company required pursuant to Section
4.02, a notice stating that Excess Leverage Interest ceased to accrue as of the
end of the immediately preceding fiscal quarter, and the Excess Leverage
Interest shall be deemed to have ceased to accrue as of the end of such
immediately preceding fiscal quarter.
(c) In the event that the Company would be required to accrue Event of
Default Interest under Section 6.13(a) and Excess Leverage Interest under
Section 6.13(b), the Company shall accrue only Excess Leverage Interest for as
long as it is required under Section 6.13(b). In no event shall the Company
concurrently accrue both Event of Default Interest and Excess Leverage Interest.
(d) Notwithstanding the existence of any Event of Default that has not
been cured or waived or the Consolidated Leverage Ratio exceeding 5.18 to 1.0,
Additional Interest shall cease to accrue on any Security when the same becomes
due and payable on the earlier to occur of (i) acceleration pursuant to Section
6.02, (ii) the Redemption Date and (iii) the Stated Maturity, upon declaration
or otherwise.
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ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise 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 man would exercise or
use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are expressly
and 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
(2) 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 which 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, but the Trustee need not verify the accuracy of
the content thereof.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph (b)
of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) 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 6.05 hereof.
Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by the
TIA.
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(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), (c) and (e) of this Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise any right
or power or extend or risk its own funds or otherwise incur any financial
liability unless it receives indemnity reasonably satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it, and money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law.
(g) The Trustee shall not be required to give any bond or surety with
respect to the execution of its rights and powers or with respect to this
Indenture.
(h) Except as expressly provided herein, the Trustee shall not be
bound to ascertain or inquire as to the performance or observance of any
covenants, conditions or agreements on the part of the Company hereunder; but
the Trustee may require of the Company full information and advice as to the
performance of the covenants, conditions and agreements as aforesaid.
SECTION 7.02. RIGHTS OF TRUSTEE.
Subject to Section 7.01:
(a) The Trustee may conclusively rely on any document reasonably
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 a
Company Order, 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 a Company Order, Officers' Certificate or Opinion of
Counsel.
(c) The Trustee may act through its attorneys or 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 which it believes to be authorized or within its rights or
powers. Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer.
(e) The Trustee may consult with counsel selected by it and any advice
of such counsel or Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted by it
hereunder in good faith and in reliance on or in accordance with such advice or
Opinion of Counsel.
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(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture, unless the Holders shall have
provided to the Trustee reasonable security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities which may be incurred therein
or thereby.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company during normal business hours at
reasonable frequencies, personally or by agent or attorney at the sole cost of
the Company and shall incur no liability or additional liability of any kind by
reason of such inquiry or investigation.
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any negligent act on the
part of any agent or attorney appointed with due care by it hereunder.
(i) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee in
accordance with Section 13.02 hereof, and such notice references the Securities
and this Indenture.
(j) The rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, and to each agent, custodian and other Person employed to act
hereunder.
(k) The Trustee shall be under no obligation to expend or risk its own
funds or to exercise, at the request or direction of any of the Holders or
otherwise, any of the rights or powers vested in it by this Indenture pursuant
to this Indenture.
(l) It shall not be the duty of the Trustee, except as expressly
provided herein, to ensure that any duties or obligations herein imposed upon
the Company or any other Person are performed, and, except as expressly provided
herein, the Trustee shall not be liable or responsible for the failure of any
other Person to perform any act required of it or them by this Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Securities and may become a creditor or otherwise deal with the
Company or its Affiliates with
38
the same rights it would have if it were not Trustee. Any Paying Agent,
Registrar or co-registrar may do the same with the like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. 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 Securities; it shall not be
accountable for the Company's use of the proceeds from the Securities; it shall
not be accountable or 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 in any prospectus or offering memorandum for the
Securities or in this Indenture or the Securities or any other document (other
than its certificate of authentication), the acts of a prior Trustee hereunder,
or the determination as to which beneficial owners are entitled to receive any
notices hereunder.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default occurs and is continuing and if it is actually known by a
Trust Officer or if written notice of any event which is in fact such a default
is received by the Trustee at the Corporate Trust Office of the Trustee in
accordance with Section 13.02 hereof, and such notice references the Securities
and this Indenture, the Trustee shall give to each Holder notice of the Default
within 30 days after it is actually known to a Trust Officer. Except in the case
of a Default described in Section 6.01(1) or (2) hereof, the Trustee may
withhold the notice if and so long as a Trust Officer determines that
withholding the notice is in the interests of Holders. The second sentence of
this Section 7.05 shall be in lieu of the proviso to Section 315(b) of the TIA
and such provision is hereby expressly excluded from this Indenture, as
permitted by the TIA.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
If required by TIA Section 313(a), within 60 days after each May 1,
beginning with the May 1 following the date of this Indenture, and for so long
as the Securities remain outstanding, the Trustee shall mail to each Holder a
brief report dated as of such May 1 that complies with TIA Section 313(a). The
Trustee also shall comply with TIA Section 313(b)(2).
A copy of each report at the time of its mailing to Holders shall be filed
with the SEC and each securities exchange on which the Securities are listed.
The Company agrees to promptly notify the Trustee in writing whenever the
Securities become listed on any securities exchange and of any delisting
thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it
39
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) to reimburse the Trustee promptly upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in connection with this Indenture (including the compensation and the expense,
advances and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its gross negligence or bad
faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any and all loss, damage, claims, liability or expense
(including taxes other than taxes based upon, measured by, or determined by the
income of the Trustee, and the reasonable fees of legal counsel) incurred
without gross negligence or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of its duties under this
Indenture or this trust, including the costs and expenses of defending itself
against any claim (whether asserted by the Company, any Holder or any other
Person), costs or expenses of enforcing this Indenture or the Securities, or
liability in connection with the exercise or performance of any of its powers or
duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount, Issue Price, accrued Original Issue Discount, accrued Additional
Interest, Redemption Price or interest, if any, as the case may be, on
particular Securities. Such lien shall survive the satisfaction and discharge of
this Indenture.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8), the expenses
and compensation for services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company; PROVIDED, HOWEVER, that
no such resignation shall be effective until a successor Trustee has accepted
its appointment pursuant to this Section 7.08. The Holders of not less than a
majority in aggregate Principal Amount of the Securities at the time outstanding
may remove the Trustee by so notifying the Trustee and the Company, in writing,
and may appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with, or ceases to be eligible
under, Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
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(3) a receiver or public officer takes charge or control of the
Trustee or its property or affairs; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, so long as no Event of Default shall have occurred
and be continuing, the Company shall promptly appoint, by resolution of its
Board of Directors, a successor Trustee or, if an Event of Default shall have
occurred and be continuing, the Holders of a majority in Principal Amount of the
Securities at the time outstanding shall promptly appoint a successor Trustee.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts. No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article.
If a successor Trustee does not take office within 20 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 25% in aggregate Principal Amount of the Securities at the
time outstanding may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER.
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business (including the trust created
by this Indenture) or assets to, another Person, the resulting, surviving or
transferee Person without any further act shall be the successor Trustee
hereunder, PROVIDED such Person shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. As soon as practicable, the successor Trustee shall
give written notice of its succession to the Company. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Securities so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a)(1) and is subject to 310(b). The Trustee shall have a combined capital
and surplus of at least $250,000,000 (or if the Trustee is a member of a bank
holding company system, its bank holding company shall have a combined capital
and surplus of at least $250,000,000) as set forth in its most recent published
annual report of condition. Nothing herein contained shall prevent the Trustee
from filing with the SEC the application referred to in the penultimate
paragraph of TIA Section 310(b). If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section 7.10, it shall
promptly give to each Holder notice of such ineligibility, which notice shall
state the reason for such ineligibility and whether or not the Trustee intends
to correct such ineligibility.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES.
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07 hereof) for
cancellation or (ii) all outstanding Securities (A) have become due and payable,
(B) will become due and payable at their Stated Maturity within one year, or (C)
are to be called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company, and the Company irrevocably deposits
with the Trustee as trust funds cash sufficient to pay at Stated Maturity the
Principal Amount and any accrued Additional Interest or to pay at the Redemption
Date the Redemption Price and any accrued Additional Interest, as the case may
be, of all outstanding Securities (other than Securities replaced pursuant to
Section 2.07 hereof), and if in any case the Company pays all other sums payable
hereunder by the Company and the Trustee shall have been irrevocably instructed
to apply such money to the payment of said amounts with respect to the
Securities, then this Indenture shall, subject to Section 7.07 hereof, cease to
be of further effect. Upon the receipt by the Trustee of all documents required
by Section 7.02(b), the Trustee shall join in the execution of a document
prepared by the Company acknowledging satisfaction and discharge of this
Indenture on written demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel stating that the conditions set forth in this
Section 8.01 have been complied with and at the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY.
42
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years; PROVIDED,
HOWEVER, that the Trustee or such Paying Agent, before being required to make
any such return, shall, in the event that the Securities are no longer held in
global form, at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York and the Wall Street
Journal (if such publication is then in circulation) or mail to each such Holder
notice that such money or securities remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed money or securities then remaining will be
returned to the Company. After return to the Company, Holders entitled to the
money or securities must look only to the Company for payment as general
creditors and all liability of the Trustee and the Paying Agent with respect to
such money, and all liabilities as trustee thereof, shall thereupon cease. The
Company shall, and does hereby, indemnify the Trustee to the fullest extent
permitted by law for the Trustee's failure to comply with any abandoned property
or escheat law by acting in accordance with this Section 8.02.
ARTICLE 9.
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture and the Securities
without the consent of any Holder:
(1) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, PROVIDED that, in any case, such change shall not
materially adversely affect the interests of the Holders;
(2) to provide for the assumption of the Company's obligations to
the Holders in case of a merger or consolidation or conveyance, transfer or
lease of the Company's properties and assets substantially as an entirety;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities so long as such uncertificated Securities are
in registered form for purposes of the Internal Revenue Code of 1986, as
amended;
(4) to make any change that does not adversely affect the right
of any Holder; or
(5) to make any change to comply with the requirements of the
TIA, or any amendment thereto, or to comply with any requirement of the SEC in
connection with the qualification, if any, of the Indenture under the TIA;
43
PROVIDED, HOWEVER, that in the case of a change under paragraph (1) above, the
Company shall deliver to the Trustee an Opinion of Counsel stating that the
change does not materially adversely affect the interests of the Holders;
PROVIDED FURTHER, HOWEVER, that in the case of a change under paragraph (4)
above, the Company shall deliver to the Trustee an Opinion of Counsel stating
that the change does not adversely affect the right of any Holder. Upon the
written request of the Company and upon receipt by the Trustee of the documents
described in Section 7.02(b) hereof, the Trustee shall join with the Company in
the execution of any amendment 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 amendment or supplemental indenture that adversely
affects its own rights, duties or immunities under this Indenture.
SECTION 9.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee, with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding, may amend this Indenture or the Securities; PROVIDED, HOWEVER, the
terms of Article 11 (and the related definitions) may not be amended or modified
without having obtained the prior written consent of the holders of the Senior
Debt under and in accordance with the Senior Debt Agreements. However, without
the consent of each Holder affected, an amendment or supplement to this
Indenture or the Securities may not:
(1) make any change to the Principal Amount of Securities whose
Holders must consent to an amendment;
(2) make any change to the manner or rate of accrual in
connection with Original Issue Discount or interest, if any, reduce the rate of
interest referred to in paragraph 1 of the Securities or extend the time for
payment of Original Issue Discount or interest, if any, on any Security;
(3) reduce the Principal Amount or the Issue Price of or extend
the Stated Maturity of any Security;
(4) reduce the Redemption Price of any Security;
(5) make any Security payable in money or securities other than
that stated in the Security;
(6) [intentionally omitted]; or
(7) make any change in Section 6.04 or 6.07 hereof or this
Section 9.02, except to increase the percentage of Holders referenced in Section
6.04 or 6.07 hereof or this Section 9.02, as applicable.
44
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment or supplement under this Section 9.02 becomes effective,
the Company shall mail to each Holder a notice briefly describing the amendment
or supplement. Upon the written request of the Company and upon receipt by the
Trustee of the documents described in Section 7.02(b) hereof, the Trustee shall
join with the Company in the execution of any amendment 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 amendment or
supplemental indenture that adversely affects its own rights, duties or
immunities under this Indenture.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplemental indenture executed pursuant to this Article
9 shall comply with the TIA as then in effect, if then required to so comply.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment, supplement, waiver or other action becomes effective, a
consent to it or any other action by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of that Security or portion of
the Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on the
Security. However, any such Holder or subsequent Holder may revoke the consent,
waiver or action as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment, waiver
or action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
Securities authenticated and delivered after the execution of any amendment
or supplemental indenture pursuant to this Article 9 may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such amendment or supplemental indenture. If the Company shall
so determine, new Securities so modified as to conform to any such amendment or
supplemental indenture may be prepared and executed by the Company and, upon
receipt of a Company Order, authenticated and delivered by the Trustee in
exchange for outstanding Securities.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.
The Trustee shall sign any amendment 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. If the
Trustee concludes that it does adversely affect the Trustee, the Trustee may,
but need not, sign such amendment or supplemental indenture. In
45
signing such amendment or supplement the Trustee shall be entitled to receive,
and (subject to the provisions of Section 7.01 hereof) shall be fully protected
in relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment or supplement is authorized or permitted by, and complies with,
this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article 9, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
ARTICLE 10.
[INTENTIONALLY OMITTED]
ARTICLE 11.
SUBORDINATION
SECTION 11.01. SUBORDINATION.
Anything in this Indenture and the Securities to the contrary
notwithstanding, each Holder covenants and agrees that the payment of the
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Additional Interest, Redemption Price and interest, if any, on, and all other
amounts payable by the Company on or in respect of, the Securities
(collectively, the "SUBORDINATED OBLIGATIONS") shall, to the extent set forth in
this Article 11, be subordinate and junior and subject in right of payment to
the prior payment in full in cash of all Senior Debt.
SECTION 11.02. PAYMENTS.
No payment or distribution (whether directly, by purchase or redemption by
right of set-off (other than an Offset Prepayment, other than a purchase made
solely by exchange for common stock of the Company and, after December 31, 2005,
other than a payment or distribution with respect to which the prior written
consent of the holders of the Senior Debt under and in accordance with the
Credit Agreement has been obtained) or otherwise) in respect of any Security,
whether as principal, interest or otherwise, and whether in cash, securities or
property, including pursuant to Section 8.01, shall be made by or on behalf of
the Company or received, accepted or demanded, directly or indirectly, by or on
behalf of the Holders unless and until all Senior Debt has been indefeasibly
paid in full in cash to the holders of the Senior Debt. Notwithstanding the
immediately preceding sentence, the Company may (a) accrue Original Issue
Discount, Additional Interest, and interest, if any, (b) make Offset
Prepayments, (c) so long as no Senior Debt Default exists at the Stated Maturity
or would result from the payment of the amount due on any Security at the Stated
Maturity, pay the amount due on any Security at the Stated Maturity (or, with
the prior written consent of the Senior Debt under the Credit Agreement, the
Redemption Price on the Redemption Date); PROVIDED, HOWEVER, that if a
46
Senior Debt Default exists at such date or would result from such payment on any
Security at such date, then the Company shall not make such payment until such
Senior Debt Default is cured or waived and (d) pay the amount due on any
Security without regard to the foregoing if the Company receives the written
consent of the requisite holders of the Senior Debt (or any duly authorized
representative thereof) under and in accordance with each of the Senior Debt
Agreements.
In the event that, notwithstanding the foregoing, the Company or the
Trustee shall make any payment or distribution to the Trustee or the Holders
prohibited by the foregoing provisions of this Section 11.02, then and in such
event such payment or distribution shall be segregated by the Trustee or the
Holders, as the case may be, and held for the benefit of and promptly shall be
paid over to the holders of the Senior Debt for application against the Senior
Debt remaining unpaid until such Senior Debt is paid in full in cash.
SECTION 11.03. INSOLVENCY; BANKRUPTCY; ETC.
(a) In the event of the institution of any Insolvency Proceeding relative
to the Company, then any payment or distribution of any kind or character,
whether in cash, property or securities, by setoff (other than Offset
Prepayments) or otherwise, which may be payable or deliverable in such
proceedings in respect of any Subordinated Obligations shall (notwithstanding
any other provision of this Indenture, including Section 11.02, but excluding
the proviso to this Section 11.03(a)) be paid or delivered by the Person making
such payment or distribution, whether a trustee in bankruptcy, a receiver, a
liquidating trustee, or otherwise, directly to the holders of the Senior Debt to
the extent necessary to make payment in full in cash of all Senior Debt
remaining unpaid; PROVIDED, HOWEVER, that no such delivery of any Reorganization
Securities shall be made to holders of the Senior Debt.
(b) If the Trustee does not file a proper claim or proof of debt or other
document or amendment thereof in the form required in any Insolvency Proceeding
relative to the Company under applicable law prior to 15 days before the
expiration of time to file such claim or other document or amendment thereof,
then the holders of the Senior Debt shall have the right (but not the
obligation) in such Insolvency Proceeding, and hereby irrevocably are appointed
lawful attorney of the Holders for the purpose of enabling the holders of the
Senior Debt, to demand, ▇▇▇ for, collect, receive and give receipt for the
payments and distributions in respect of the Securities that are made in such
Insolvency Proceeding and that are required to be paid or delivered to the
holders of the Senior Debt as provided in Section 11.03(a), and to file and
prove all claims therefor and to execute and deliver all documents in such
proceeding in the name of the Trustee or Holders or in the name of the holders
of the Senior Debt or otherwise in respect of such claims, as the holders of the
Senior Debt reasonably may determine to be necessary or appropriate to
effectuate the foregoing, PROVIDED, that the holders of the Senior Debt shall
act in a commercially reasonable manner and shall notify the Trustee prior to
commencing the first of any such actions. The holders of the Senior Debt are
authorized (but shall not be required) to vote or otherwise act in any such
Insolvency Proceeding in the capacity of the Holders (including, without
limitation, the right to vote to accept or reject any plan of reorganization,
composition, arrangement or liquidation), subject to the rights of the Holders
set forth in Section 11.04.
47
(c) In the event that, notwithstanding the foregoing provisions of this
Section 11.03, the Trustee or any of the Holders shall have received any payment
or distribution of any kind or character, whether in cash, property or
securities (other than Reorganization Securities), by setoff (other than Offset
Prepayments) or otherwise which was paid or delivered in respect of the
Subordinated Obligations pursuant to an Insolvency Proceeding, before all Senior
Debt is paid in full in cash, then and in such event such payment or
distribution shall be segregated and held in trust for the benefit of and
immediately shall be paid over to the holders of the Senior Debt for application
to the payment of all Senior Debt remaining unpaid until all such Senior Debt
shall have been paid in full in cash.
SECTION 11.04. STANDSTILL.
Until the Senior Debt is paid in full in cash, the Trustee and the Holders
shall (notwithstanding the provisions of Article 6) be prohibited from
accelerating the payment of the Issue Price, accrued Original Discount, accrued
Additional Interest and interest, if any, on any Security and shall be
prohibited from enforcing any of its default remedies with respect thereto
(including any right to ▇▇▇ the Company or to file or participate in the filing
of an involuntary bankruptcy petition against the Company) except that nothing
in this Article 11 shall prevent or otherwise affect the following: (a) in the
case of the failure by the Company to pay the amount due at the Stated Maturity,
so long as no Senior Debt Default exists or would result from the making of such
payment (other than a Senior Debt Default arising from the Company's failure to
make such payment), the Trustee's or the Holders' right to accelerate or take
any other enforcement action with respect to this Indenture (subject to the
other subordination provisions of this Article 11); PROVIDED, HOWEVER, that if a
Senior Debt Default then exists or would result from the making of such payment
(other than a Senior Debt Default arising from the Company's failure to make
such payment), the Trustee and the Holders shall not have the right to
accelerate or take any other enforcement action with respect to this Indenture
and the Securities (subject to the other subordination provisions of this
Article 11) until the first to occur of (1) the 180th day after the Stated
Maturity, (2) the date on which there is commenced by or against the Company any
Insolvency Proceeding, (3) the date upon which any Bank Agent or any holder of
Senior Debt commences a judicial proceeding to collect any Senior Debt (in
respect of $10,000,000 or more of Senior Debt) or commences to realize upon any
collateral for any such Senior Debt pursuant to the exercise of remedies or
gives notice of any non-judicial sale of any such collateral or (4) the date
upon which the date for payment of any Senior Debt is accelerated under the
Credit Agreement or any Synthetic Lease Guaranty and (b) the right of the
Trustee and the Holders to declare the Issue Price, accrued Original Issue
Discount, accrued Additional Interest and interest, if any, immediately due and
payable and the right of the Trustee or the Holders to take any other
enforcement action with respect to this Indenture and the Securities (subject to
the other subordination provisions of this Article 11) if the Indebtedness under
one or more Senior Debt Agreements pursuant to which (1) Senior Debt in an
aggregate principal amount of $100,000,000 or more is outstanding or (2) there
are commitments thereunder to provide Senior Debt in an aggregate principal
amount of $100,000,000 or more, is declared immediately due and payable. The
provisions of this Section 11.04 shall not, however, prohibit or otherwise
affect the Trustee's or the Holders' right to seek specific performance of, or
an injunction to enjoin violation of, any covenant by the Company (other than a
covenant to pay the
48
Principal Amount, Issue Price, accrued Original Issue Discount, accrued
Additional Interest, Redemption Price or interest, if any, on any Security or
any other Subordinated Obligations).
SECTION 11.05. NO IMPAIRMENT.
No right of any present or future holder of Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture or the Securities regardless of any knowledge thereof any holder of
Senior Debt may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of the Senior Debt may, at any time and from time to time, without the
consent of or notice to the Holders or the Trustee, without incurring
responsibility and without impairing or releasing the subordination provided in
this Article 11, do any one or more of the following: (a) change the manner,
place or terms of payment or extend the time of payment of, or renew, amend,
modify, or alter, any Senior Debt or any Senior Debt Agreement evidencing the
same or evidencing, governing, creating, guaranteeing or securing any Senior
Debt; (b) sell, exchange, release, or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Debt; (c) release any Person liable in
any manner for the collection of Senior Debt; (d) fail or delay in the
perfection of Liens securing the Senior Debt, (e) exercise or refrain from
exercising any rights against the Company and any other Person (including,
without limitation, actions with respect to the foreclosure upon, sale, release
or failure to realize upon, any of its collateral, and actions with respect to
the collection of any claim for all or any part of the Senior Debt from any
account debtor or any other Person, regardless of whether any such actions or
omissions may affect the rights of the holders of the Senior Debt to a
deficiency) and (f) from time to time enter into agreements and settlements with
the Company as it may determine, including, without limitation, any substitution
of collateral, any release of any Lien and any release of the Company.
The provisions of this Article 11 are for the purpose of defining the
relative rights of the holders of Senior Debt on the one hand, and the Holders
on the other hand, and nothing herein shall impair, as between the Company and
the Holders, the obligation of the Company, which is unconditional and absolute,
to pay to the Holders the Principal Amount, Issue Price, accrued Original Issue
Discount, accrued Additional Interest, Redemption Price or interest, if any, on
any Security in accordance with the terms and provisions of this Indenture, nor
shall anything herein prevent the Holders from exercising all remedies otherwise
permitted by applicable law or hereunder upon Default hereunder (including the
right to demand payment and ▇▇▇ for performance hereof and to accelerate the
maturity hereof as provided in Section 6.02), subject to the rights, if any, of
holders of Senior Debt under this Article 11. Upon payment in full in cash of
all Senior Debt, the Holders shall, to the extent of any payments or
distributions paid or delivered to the holders of the Senior Debt or otherwise
applied to the Senior Debt pursuant to the provisions of this Article 11, be
subrogated to the rights of the holders of the Senior Debt to receive payments
or distributions of assets of the Company made on Senior Debt (and any security
therefor) until the Subordinated Obligations shall be paid in full in cash, and,
for the purposes of such subrogation, no payments to the holders of Senior Debt
of any cash, assets, stock, or obligations to which the Holders would be
entitled except for the provisions of this
49
Article 11 shall, as between the Company, its creditors (other than the holders
of the Senior Debt), and the Holders, be deemed to be a payment by the Company
to or on account of Senior Debt. The fact that failure to make any payment on
account of the Subordinated Obligations is caused by reason of the operation of
any provision of this Article 11 shall not be construed as preventing the
occurrence of an Event of Default.
SECTION 11.06. RECOVERIES.
If a claim is made upon any holder or holders of Senior Debt for repayment
or recovery of any amount (a "VOIDABLE TRANSFER") on account of any Senior Debt
under any state or federal law, whether by reason of preference, fraudulent
conveyance, or otherwise and if such holder or holders of Senior Debt repay all
or a portion of such amounts by reason of (a) any judgment, decree, or order of
any court or administrative body having jurisdiction over such holder or
holders, or (b) any settlement or compromise of any claim effected by such
holder or holders based upon the reasonable advice of counsel, then, as to the
amount that has been repaid, the provisions of this Article 11 automatically
shall be reinstated and restored and the amount so repaid shall constitute
Senior Debt entitled to the benefits of this Article 11 as if such Voidable
Transfer never had been made. The foregoing provisions of this Article 11 shall
constitute a continuing offer to all Persons who become holders of Senior Debt,
and such provisions are made for the benefit of, and may be enforced directly
by, holders of Senior Debt, who hereby are expressly stated to be intended
beneficiaries of this Article 11, whether or not they actually relied thereon.
The terms of this Article 11 (and the related definitions) may not be amended or
modified without obtaining the prior written consent of the holders of the
Senior Debt under and in accordance with the Credit Agreement and the other
Senior Debt Agreements.
SECTION 11.07. PAYMENTS TO AGENT BANK.
Any payment or distribution to be paid or delivered to the holders of the
Senior Debt under the provisions of this Article 11 may be paid or delivered to
one or more Bank Agents for such holders. Each Holder and the Trustee shall be
entitled to rely on the delivery to it of a written notice purported to be
signed on behalf of an officer or representative of any Bank Agent believed by
it in good faith to be genuine to establish the identity of such Bank Agent, the
amount of the outstanding Senior Debt and other matters relevant to the
provisions of this Article 11.
SECTION 11.08. RIGHTS OF TRUSTEE.
(a) With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are expressly and
specifically set forth in this Article 11, and no implied covenants or
obligations on the part of the Trustee with respect to the holders of the Senior
Debt shall be implied or read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holder if it shall mistakenly pay over
or distribute in good faith to the Holders or the Company or any other Person
money or assets to which any holders of Senior Debt shall be entitled by virtue
of this Article 11 or otherwise.
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(b) Notwithstanding the provisions of this Article 11 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Securities, unless a Trust Officer of the Trustee shall
have received at its Corporate Trust Office at least one Business Day prior to
the date of such payment written notice from the Bank Agent (or the holders of a
majority of outstanding principal amount of any particular class of Senior Debt
if there is no applicable Bank Agent) of facts that would cause the payment of
any amounts with respect to the Securities to violate this Article 11. Nothing
in this Article 11 shall impair the claims of, or payments to, the Trustee under
or pursuant to Section 7.07 hereof.
(c) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and correctness of the opinions
expressed therein, upon notices and certificates delivered to the Trustee and
conforming to the requirements of this Article 11 by the Bank Agent (or the
holders of a majority of outstanding principal amount of any particular class of
Senior Debt if there is no applicable Bank Agent). Any notice or certificate
delivered pursuant to this Article 11 shall reference the Securities and this
Indenture, shall state the authority of the Person delivering such notice or
certificate and, in the case of any direction to the Trustee to withhold payment
to the Holders, shall instruct the Trustee to hold the monies received for the
holders of Senior Debt and shall state the reason for the non-payment to the
Holders. The Trustee need not investigate any fact or matter stated in any such
notice or certificate.
(d) The Trustee is entitled to conclusively rely upon an order or decree of
a court of competent jurisdiction or a certificate of a bankruptcy trustee or
other similar official for the purpose of ascertaining (1) the persons entitled
to participate in any payment or distribution referred to in this Article 11,
(2) the holders of Senior Debt and other Company debt, (3) the amount of any
Senior Debt or any obligation to the Holders or the amount payable thereon and
(4) all other pertinent facts relating to the Trustee's obligations under this
Article 11.
ARTICLE 12.
[INTENTIONALLY OMITTED]
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ARTICLE 13.
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT.
This Indenture is hereby made subject to, and shall be governed by, the
provisions of the TIA required to be part of and to govern indentures qualified
under the TIA; PROVIDED, HOWEVER that this Section 13.01 shall not require this
Indenture or the Trustee to be qualified under the TIA prior to the time such
qualification is in fact required under the terms of the TIA, nor shall it
constitute any admission or acknowledgment by either party that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the TIA. If any provision hereof limits, qualifies
or conflicts with another provision hereof which is required to be included in
an indenture qualified under the TIA, such required provision shall control.
SECTION 13.02. NOTICES.
Any request, demand, authorization, notice, waiver, consent or
communication shall be in writing in the English language and delivered in
Person or mailed by first class mail, postage prepaid, addressed as follows or
transmitted by facsimile transmission (confirmed by overnight courier) to the
following facsimile numbers:
if to the Company:
Hanover Compressor Company
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
Wachovia Bank, National Association
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Administration
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the
Holder, by first class mail, postage prepaid, at the Holder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
52
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, it is duly given, whether
or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent or co-registrar.
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar, the Paying Agent and anyone else shall have
the protection of TIA Section 312(c).
SECTION 13.04. 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, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officers' Certificate or Opinion of Counsel with respect to compliance
with a covenant or condition provided for in this Indenture shall include:
(1) a statement that each individual making such Officers' Certificate
or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such Officers'
Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such individual, 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 complied with; and
(4) a statement that, in the opinion of such individual, such covenant
or condition has been complied with.
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SECTION 13.06. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities 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 13.07. RULES BY TRUSTEE, PAYING AGENT AND REGISTRAR.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 13.08. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE
SECURITIES.
SECTION 13.09. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or this Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder shall waive
and release all such liability. The waiver and release shall be part of the
consideration for the issue of the Securities.
SECTION 13.10. RECORD DATE FOR VOTE OR CONSENT OF HOLDERS.
The Company may set a record date for purposes of determining the identity
of Holders entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture, which record date shall be the
later of 10 days prior to the first solicitation of such vote or consent or the
date of the most recent list of Holders furnished to the Trustee pursuant to
Section 2.05 prior to such solicitation. If a record date is fixed, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to take such action by vote or consent
or to revoke any vote or consent previously given, whether or not such Persons
continue to be Holders after such record date.
SECTION 13.11. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 13.12. MULTIPLE ORIGINALS.
The parties 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. One signed copy is enough to prove this Indenture.
54
(SIGNATURE PAGE FOLLOWS)
55
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
written above.
HANOVER COMPRESSOR COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President &
Chief Financial Officer
WACHOVIA BANK, NATIONAL
ASSOCIATION, as Trustee
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
56
EXHIBIT A
[FORM OF FACE OF SECURITY]
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS ORIGINAL
ISSUE DISCOUNT. INFORMATION INCLUDING THE ISSUE PRICE, AMOUNT OF ORIGINAL ISSUE
DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY WILL BE MADE AVAILABLE TO
HOLDERS UPON REQUEST TO THE CHIEF FINANCIAL OFFICER OF THE COMPANY, AT (281)
447-8787.
[FORM OF LEGEND FOR GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFERS, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFER IN WHOLE, BUT NOT
IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[RESTRICTED SECURITY LEGEND]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES
WITHIN THE MEANING OF (OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH
(k)(2) OF RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR"); (2) AGREES
THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE
A-1
NOTE EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY
WITHIN THE UNITED STATES TO OR FOR THE ACCOUNT OF U.S. PERSON EXCEPT (A) TO
HANOVER COMPRESSOR COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT PRIOR TO SUCH TRANSFER FURNISHES TO
WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM
OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER), (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH
TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN CONNECTION WITH ANY TRANSFER OF
THE NOTE EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(k) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO WACHOVIA BANK, NATIONAL ASSOCIATION, AS
TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR OR IS A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST PRIOR TO SUCH TRANSFER FURNISH TO WACHOVIA BANK, NATIONAL
ASSOCIATION, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. TRANSFERS OF THIS NOTE MUST BE MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF. THIS LEGEND WILL BE
REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY PURSUANT
TO CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER
RULE 144(k) UNDER THE SECURITIES ACT (OR ANY
A-2
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
A-3
HANOVER COMPRESSOR COMPANY
ZERO COUPON SUBORDINATED NOTE DUE MARCH 31, 2007
No.
Issue Date: May 14, 2003
Issue Price: $173,378,423
CUSIP:
-------------
Hanover Compressor Company, a Delaware corporation, promises to pay to
or registered assigns, on March 31, 2007 the
-------------------------------
Principal Amount of Dollars ($______________)
----------------------------------
[or such greater or lesser Principal Amount as may be shown on Schedule A
hereto]./1/
This Security shall not bear interest except as specified on the other side
of this Security. Original Issue Discount will accrue as specified on the other
side of this Security.
Additional provisions of this Security are set forth on the other side of
this Security.
IN WITNESS WHEREOF, Hanover Compressor Company has caused this instrument
to be duly executed.
HANOVER COMPRESSOR COMPANY
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
Dated:
-------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Wachovia Bank, National Association, as Trustee, certifies that this is one of
the Securities referred to in the within-mentioned Indenture.
By
-----------------------------
Authorized Signatory
[FORM OF REVERSE SIDE OF SECURITY]
----------
/1/ For inclusion in the global Security only.
A-5
HANOVER COMPRESSOR COMPANY
ZERO COUPON SUBORDINATED NOTE DUE MARCH 31, 2007
1. INTEREST
This Security shall not bear interest except as specified in this
paragraph. If any Additional Interest accrues on this Security, then such
accrued Additional Interest shall be payable upon the Stated Maturity or upon
the earlier redemption pursuant to paragraph 5 hereof or acceleration thereof
pursuant to Section 6.02 of the Indenture. If the Principal Amount hereof and
accrued Additional Interest, if any, or any portion of such Principal Amount or
accrued Additional Interest, if any, is not paid when due (whether upon
acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 5 hereof, or upon the
Stated Maturity of this Security), then in each such case the overdue amount
shall bear interest at the rate of 13.00% per annum, compounded semiannually (to
the extent that the payment of such interest shall be legally enforceable),
which interest shall accrue from the date such overdue amount was due to the
date payment of such amount, including interest thereon, has been made or duly
provided for. All such interest shall be payable on demand. The accrual of such
interest on overdue amounts shall be in lieu of, and not in addition to, the
continued accrual of Original Issue Discount and Additional Interest.
The Original Issue Discount (the difference between the Issue Price and the
Principal Amount of the Security) in the period during which a Security remains
outstanding, shall accrue at 11.00% per annum, on a semiannual bond equivalent
basis using a 360-day year composed of twelve 30-day months, commencing on the
Issue Date of this Security. Event of Default Interest shall accrue at 2.0% per
annum, on a semiannual bond equivalent basis using a 360-day year composed of
twelve 30-day months, commencing on the date an Event of Default occurs and is
continuing and automatically ceasing when all existing Events of Default have
been cured or waived. Excess Leverage Interest shall accrue at 3.0% per annum,
on a semiannual bond equivalent basis using a 360-day year composed of twelve
30-day months, commencing upon the date that the Consolidated Leverage Ratio has
exceeded 5.18 to 1.0 throughout the two consecutive fiscal quarters most
recently then ended and is continuing and automatically ceasing when the
Consolidated Leverage Ratio no longer exceeds 5.18 to 1.0. In the event that the
Company would be required to accrue Event of Default Interest and Excess
Leverage Interest, the Company shall accrue only Excess Leverage Interest for as
long as it is required. In no event shall the Company accrue both Event of
Default Interest and Excess Leverage Interest. Original Issue Discount and,
notwithstanding the foregoing, Additional Interest shall cease to accrue on the
earlier of (a) the date on which the Principal Amount hereof or any portion of
such Principal Amount becomes due and payable and (b) any Redemption Date or
other date on which such Original Issue Discount shall cease to accrue in
accordance with Section 2.08 of the Indenture.
A-6
2. METHOD OF PAYMENT
Holders must surrender Securities to the Paying Agent to collect all
payments in respect of the Securities. The Company will pay cash amounts in
money of the United States that at the time of payment is legal tender for
payment of public and private debts.
3. PAYING AGENT AND REGISTRAR
Initially, Wachovia Bank, National Association (the "TRUSTEE"), will act as
Paying Agent and Registrar. The Company may appoint and change any Paying Agent,
Registrar or co-registrar without notice, other than notice to the Trustee. The
company or any of its Subsidiaries or any of their Affiliates may act as Paying
Agent, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture (the "INDENTURE"),
dated as of May 14, 2003, between the Company and the Trustee. Capitalized terms
used herein and not defined herein have the meanings ascribed thereto in the
Indenture. The Securities are subject to all such terms, and Holders are
referred to the Indenture for a statement of those terms.
The Securities are general unsecured obligations of the Company limited to
$262,621,810 aggregate Principal Amount (subject to Section 2.07 of the
Indenture).
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the option
of the Company at the Redemption Price described below, provided that the
Securities are not redeemable prior to March 31, 2006.
The Redemption Price of a Security shall equal (i) 102.50% multiplied by
(ii) the Issue Price plus accrued Original Issue Discount and Additional
Interest, if any, as of the Redemption Date.
6. [INTENTIONALLY OMITTED]
7. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company will be mailed at least
20 days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to 11:00 a.m., New York City time, on the Redemption Date, on and after such
date Original Issue Discount and Additional Interest, if any, cease to accrue on
such Securities or portions thereof.
A-7
8. RANKING
The Securities shall, to the extent set forth in Article 11 of the
Indenture, be subordinate and junior and subject in right of payment to the
prior payment in full in cash of all Senior Debt.
9. [INTENTIONALLY OMITTED]
10. [INTENTIONALLY OMITTED]
11. [INTENTIONALLY OMITTED]
12. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form, without coupons, but with no
limitation as to denominations. A Holder may transfer Securities in accordance
with the Indenture. The Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any transfer
taxes or other assessments required by law. The Registrar need not transfer or
exchange any Securities selected or called for redemption (except, in the case
of a Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities for a period of 15 days before the mailing of notice
of Securities to be redeemed.
13. PERSONS DEEMED OWNERS
The registered holder of this Security may be treated as the owner of this
Security for all purposes.
14. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, PROVIDED,
HOWEVER, that the Trustee or such Paying Agent, before being required to make
any such return, shall in the event that the Securities are no longer held in
global form, at the expense of the Company cause to be published once in a
newspaper of general circulation in The City of New York and the Wall Street
Journal (if such publication is then in circulation) or mail to each such Holder
notice that such money or securities remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed money or securities then remaining will be
returned to the Company. After return to the Company, Holders entitled to the
money or securities must look only to the Company for payment as general
creditors and all liability of the Trustee and the Paying Agent with respect to
such money, and all liabilities as trustee thereof, shall thereupon cease.
15. AMENDMENT; WAIVER
A-8
Subject to certain exceptions set forth in the Indenture, (i) the Indenture
or the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain Defaults and Events of Defaults may be waived with
the written consent of the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding. Subject to certain exceptions set
forth in the Indenture, without the consent of any Holder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity, defect
or inconsistency, or to provide for the assumption of the Company's obligations
to the Holders of the Securities in case of a merger or consolidation or sale of
all or substantially all of the Company's assets; to provide for uncertificated
Securities in addition to or in place of certificated Securities or to make any
change that does not adversely affect the rights of any Holder or to comply with
any requirement of the SEC in connection with the qualification of the Indenture
under the TIA.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) except in the case of a
redemption, the Company defaults in the payment of the Principal Amount, Issue
Price, accrued Original Issue Discount or accrued Additional Interest on any
Security when the same becomes due and payable at its Stated Maturity, upon
declaration or otherwise; (ii) the Company defaults in the payment of the
Redemption Price on any Security for more than five days after the same becomes
due; (iii) the Company defaults in the performance of or compliance with any
term contained in Sections 4.08 and 5.01 of the Indenture; (iv) the Company
fails to comply with Section 4.09 and such failure continues for 30 days after
the earlier to occur of (x) a senior financial officer of the Company obtaining
knowledge of such failure to comply with Section 4.09 and (y) the Trustee
notifying the Company, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding notifying the Company and the
Trustee, of such failure to comply with Section 4.09; (v) the Company fails to
comply with any of its agreements or covenants in the Securities or the
Indenture (other than those referred to in clauses (i) - (iv) above), and such
failure continues for 90 days after receipt by the Company of a Notice of
Default; (vi) the Company is in default under one or more Senior Debt Agreements
pursuant to which (a) Senior Debt in an aggregate principal amount of
$100,000,000 or more is outstanding or (b) there are commitments thereunder to
provide Senior Debt in an aggregate principal amount of $100,000,000 or more and
as a consequence of such default the Indebtedness under such Senior Debt
Agreements has become, or has been declared, due and payable before its
regularly scheduled dates of payment; and (vii) certain events of bankruptcy or
insolvency as set forth in the Indenture. If an Event of Default occurs and is
continuing, the Trustee, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding, may declare all the Securities
to be due and payable immediately. Certain events of bankruptcy or insolvency
are Events of Default which will result in the Securities being declared due and
payable immediately upon the occurrence of such Events of Default. Acceleration
is subject to the subordination provisions of the Indenture.
Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the
Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of no less than a majority in aggregate Principal
Amount of the Securities at the time outstanding may direct the
A-9
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing Default for 30 days or (except a Default in
payment of amounts specified in clauses (i) and (ii) above) if it determines
that withholding notice is in their interests.
17. TRUSTEE DEALINGS WITH THE COMPANY
The Trustee under the Indenture, in its individual or any other capacity,
may become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company shall
not have any liability for any obligations of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Holder waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an assignee,
such as TEN COM (=tenants in common), TENANT (=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 Gift to Minors Act).
21. OFFSET RIGHTS
The aggregate Principal Amount of the Securities outstanding from time to
time may be reduced as a result of Offset Prepayments, which Offset Prepayments
terminate once the Schlumberger Holder owns less than all of the Securities.
22. GOVERNING LAW
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
23. INDENTURE TO CONTROL
In case of any conflict between the provisions of this Security and the
Indenture, the provisions of the Indenture shall control.
A-10
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
Hanover Compressor Company
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
A-11
TRANSFER NOTICE
This Transfer Notice relates to $ Principal Amount (as defined in the
----------
Indenture to which the referenced Securities are subject) of the Zero Coupon
Subordinated Notes due March 31, 2007 of Hanover Compressor Company, a Delaware
corporation, held by (the "TRANSFEROR").
------------
(I) or (we) assign and transfer this Security to
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. no.)
and irrevocably appoint agent to transfer this
-------------------------------
Security on the books of the Company. The agent may substitute another to act
for him.
Your Signature:
-----------------------------------------------------------------
(Sign exactly as your name appears on the other side of this
Security)
Date:
------------------------------------------------------------------
Signature Guarantee:/2/
------------------------------------------------
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the date that is two years after the later of the
date of original issuance of such Securities and the last date, if any, on which
such Securities were owned by the Company or any Affiliate of the Company, the
undersigned confirms that such Securities are being transferred:
CHECK ONE BOX BELOW
(1) [_] to Hanover Compressor Company; or
(2) [_] pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) [_] pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(4) [_] pursuant to another available exemption from the registration
requirements of the Securities Act of 1933; or
----------
/2/ Signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar which requirements include membership or
participation in the Security Transfer Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Registrar in addition
to or in substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
A-12
(5) [_] pursuant to an effective registration statement under the
Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to
register any of the Securities evidenced by this certificate in the
name of any person other than the registered holder thereof; PROVIDED,
HOWEVER, that if box (3) or (4) is checked, the Trustee may require,
prior to registering any such transfer of the Securities such legal
opinions, certifications and other information as it has reasonably
requested (including, if the transferee is an institutional accredited
investor as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act of 1933, a letter signed by such transferee in the form
of Exhibit B to the Indenture) to confirm that such transfer is being
made pursuant to an exemption from, or in a transaction not subject
to, the registration requirements of the Securities Act of 1933.
Unless the box below is checked, the undersigned confirms that such
Security is not being transferred to an "affiliate" of the Company as
defined in Rule 144 under the Securities Act of 1933 (an "AFFILIATE"):
(6) [_] The transferee is an Affiliate of the Company.
-----------------------------------
Signature
-----------------------------------
Date
-----------------------------------
Signature Guarantee/3/
----------
/3/ Signature must be guaranteed by a commercial bank, trust company or member
firm of the New York Stock Exchange.
A-13
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for
its own account or an account with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act of 1933, and is aware
that the sale to it is being made in reliance on Rule 144A and acknowledges that
it has received such information regarding the Company as the undersigned has
requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:
-------------------------- ---------------------------------------------
[Signature of executive officer of purchaser]
Name:
----------------------------------------
Title:
---------------------------------------
A-14
SCHEDULE A
Changes to Principal Amount of Global Security
PRINCIPAL AMOUNT OF SECURITIES
BY WHICH THIS GLOBAL SECURITY
IS TO BE REDUCED OR INCREASED,
AND REASON FOR REMAINING PRINCIPAL AMOUNT NOTATION
DATE REDUCTION OR INCREASE OF THIS GLOBAL SECURITY MADE BY
-------------------------------------------------------------------------------
A-15
EXHIBIT B
[FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR]
Hanover Compressor Company
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Wachovia Bank, National Association
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Re: Zero Coupon Subordinated Notes due March 31, 2007 of Hanover Compressor
Company, a Delaware corporation
(CUSIP: ___________)
Gentlemen:
Reference is hereby made to the Indenture, dated as of May 14, 2003 (the
"Indenture"), between Hanover Compressor Company, as issuer (the "Company") and
Wachovia Bank, National Association as trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $ aggregate
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principal amount of:
(a) [_] a beneficial interest in a Security in global form, or
(b) [_] a definitive Security,
we confirm that:
1. We understand that any subsequent transfer of the Securities or any
beneficial interest therein is subject to certain restrictions and conditions
set forth in the Indenture and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Securities or any beneficial interest
therein except in compliance with, such restrictions and conditions and the
United States Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities and any beneficial
interest therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Securities or any
beneficial interest therein, we will do so only (A) to the Company or any
subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to
a "qualified
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institutional buyer" (as defined therein), (C) to an institutional "accredited
investor" (as defined below) that, prior to such transfer, furnishes (or has
furnished on its behalf by a U.S. broker-dealer) to you a signed letter
substantially in the form of this letter and an Opinion of Counsel in form
reasonably acceptable to the Company to the effect that such transfer is in
compliance with the Securities Act, (D) outside the United States in accordance
with Regulation S under the Securities Act, (E) pursuant to the provisions of
Rule 144 under the Securities Act or (F) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing the Securities or a beneficial interest therein from us in a
transaction meeting the requirements of clauses (A) through (E) of this
paragraph a notice advising such purchaser that resales thereof are restricted
as stated herein.
3. We understand that, on any proposed resale of the Securities or a
beneficial interest therein, we and our transferee will be required to furnish
to you such certifications, legal opinions and other information as you may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us will
bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
5. We are acquiring the Securities or a beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You are entitled to rely upon this letter and are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
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[Insert Name of Institutional Accredited Investor]
By:
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Name:
Title:
Dated: ,
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